Sekisui House SI Residential Investment Corporation

Sekisui House SI Residential Investment Corporation

19thSemi-Annual Report
19th Fiscal Period(from October 1, 2014 to March 31, 2015)

Sekisui House SI Residential Investment Corporation

Sekisui House SI Residential Investment Corporation

Sekisui House SI Residential Investment Corporation (the Investment Corporation) is a J-REIT
investing in residential properties, with Sekisui House, Ltd. serving as the main sponsor.
Collaborative Structure with the Sekisui House GroupThe Investment Corporation has established a collaborative structurewith the Sekisui House Group, the top manufacturer in the housing industry, which makes it possible to manage the investment properties overtheir life cycles from acquisition to operation and administration.
Planning

Development

Ownership

Operation

Administration

Features of the Investment Corporation
Residential Portfolio Focused on Greater Tokyo
that Has a Deep and Broad Demand Base
Investment Ratio of
Residential Properties

Asset Size

¥191.0billion

Total acquisition
price

Number of owned
properties

110

properties

Ratio of residential
properties
Number of residential
properties

As of July 24, 2015

Sekisui House, Ltd.

Collaboration

with the Sekisui House Group

Sekiwa Real Estate Group

93.0
104

Investment Ratio of Greater Tokyo
for Residential Properties%

Ratio of Greater Tokyo
for residential properties

properties

Number of residential
properties in Greater Tokyo

As of July 24, 2015

Entire portfolio

96.0

%

Residential
properties

As of June 30, 2015

Sekiwa Real Estate Group
Collaboration forplanning anddeveloping rental
housing

Sekisui House SI Asset Management Ltd.
Asset Management Company

Entrustment of asset management

1

Average Property Age

95.2

%

Entire portfolio

8.8

years

Residential
properties

As of July 24, 2015

8.5

years

Credit Ratings Based on Stable Financial BaseJapan Credit Rating Agency, Ltd. (JCR)

Feedback of mattersrelated to operation,
administration andsupply of properties

Sekisui House SI Residential Investment Corporation

properties

As of July 24, 2015

Status of Credit Ratings

Collaboration as service
provider of operation andadministration as well as asupply source of properties

Feedback of supply anddemand information onrental housing%

Portfolio of Relatively New Properties Achieving High Occupancy
Occupancy Ratio

Sekisui House, Ltd.

72.4
70

(Long-term issuer rating)AA-

Rating and Investment Information, Inc. (R&I)(Stable)(Issuer rating)

As of July 24, 2015

A+
(Stable)Outline of Portfolio Development Policy
Invests in real estate-related assets that are mainly used as residences
Positions Greater Tokyo / Major Urban Area as the focusedinvestment area, while conducting diversified investment inGreater Tokyo / Other Urban Areas and Major Cities Nationwide
Invests in properties comprised of a variety of residential types,
primarily the Single and Compact Type residences

2

Sekisui House SI Residential Investment Corporation

To Our Unitholders
Dear Investors,

Performance Highlights
Distribution per Unit

I would like to express our sincere gratitude for your continued and loyal patronage.
Sekisui House SI Residential Investment Corporation (the “Investment Corporation”) works to expand its
asset size by building a portfolio that is centered on the high-quality rental residential properties planned anddeveloped by the Sekisui House Group, while taking into account the distribution levels, with an aim toreinforce the portfolio’s stability and further enhance its profitability. Let me report on the business results of
the Investment Corporation for the fiscal period ended March 2015 (19th fiscal period).
In the fiscal period under review, the Investment Corporation acquired eight residential properties, including
Prime Maison MORISHITA, from Sekisui House, Ltd. and Sekiwa Real Estate, Ltd. etc. using funds procured
through the public offering it conducted at the beginning of the period. Moreover, through a proprietaryacquisition channel of the Asset Management Company, the Investment Corporation newly acquired aresidential property, Esty Maison SHIBAURA, located in the Shibaura area where further progress is
expected given the planned establishment of a new station on the JR Yamanote Line and redevelopment
projects slated around Tamachi Station. On the other hand, we have steadily sold our retail properties inorder to reinforce the stability of the portfolio. In the 19th fiscal period, we assigned b-town JINGUMAE II, aretail property, at a price surpassing both the book value and the appraisal value. Consequently, the numberof owned properties increased to 107 as of the end of the fiscal period, with the asset size totaling 188.7
billion yen, an increase by approximately 10.3% compared with the end of the 18th fiscal period. The ratio of
residential properties in the asset size rose to 91.3%.
Osamu Minami
Executive Director, Sekisui House SI Residential
Investment Corporation
President, Sekisui House SI Asset Management, Ltd.

In terms of the occupancy ratio for the 19th fiscal period, the period-end occupancy ratio stood at 97.4%,
up 0.3 points from the end of the 18th fiscal period while the period average occupancy ratio was 97.0%, up
0.3 points period-on-period, both maintaining high levels.
On the financial side, the Investment Corporation newly borrowed 6.65 billion yen in total to fund theacquisition of the properties. It also conducted refinancing of borrowings totaling 15.35 billion yen in aneffort to further lower the borrowing cost rate and promote lengthening of borrowing periods.
As a result of above-mentioned endeavors, the Investment Corporation posted operating revenue of 6,286
million yen, operating income of 2,814 million yen and net income of 2,302 million yen for the 19th fiscal
period. Distribution per unit stood at 2,185 yen.
On top of these, we acquired two residential properties (Granmast KANAZAWA NISHIIZUMI and Granmast
UNOMORI) from Sekiwa Real Estate Chubu, Ltd. in April 2015 and a residential property (Esty Maison
TSUTSUJIGAOKA) through a proprietary property acquisition channel of the Asset Management Company in
May 2015, respectively, while assigning part of the land of RINKU HAGURAZAKI Plaza (sokochi), a retailproperty, in April 2015. The acquisition of Granmast KANAZAWA NISHIIZUMI and Granmast UNOMORI was
realized pursuant to the partial revision to our management policy in June 2014, in which the investmentarea other than Greater Tokyo was broadly set in order to take full advantage of the recognition and knowhow, and nationwide real estate network of the Sekisui House Group. The acquisition marks the first
selective investment in residential properties located in the investment area newly designated in the revised
management policy.
Going forward, we will continue striving to maximize unitholder value by promoting steady expansion ofasset size through utilization of the comprehensive strengths of the Sekisui House Group, among othermeasures. We appreciate your continuing support.

Summary of Management Results for the 19th Fiscal Period Ended March 2015
Business Results and CashDistributions

・Operating revenue: ¥6,286 million, operating income: ¥2,814 million, net income: ¥2,302 million, provision for reserve for
reduction entry: ¥77 million
・Cash distribution per unit: ¥2,185 (up 2.6% over initial forecast)・Procured approximately ¥9.86 billion in October 2014 through public offering, the second public offering in two
consecutive fiscal periods

Financing Activities

・Conducted new borrowings (¥6.65 billion in total) to fund the acquisition of 9 residential properties purchased in November
2014, January 2015 and March 2015
・Refinanced ¥15.35 billion in existing borrowings that matured in February 2015
・Occupancy ratio (entire portfolio): 97.4% (at the end of 19th fiscal period (March 31, 2015))

Portfolio Management Status

・Acquired 9 properties in total, of which 8 residential properties were acquired by exercising preferential negotiation rights
granted by the Sekisui House Group and a residential property was acquired by utilizing a proprietary property acquisition
channel of the Asset Management Company
・Assigned a retail property with an intention to further reinforce the stability of the portfolio

3¥2,18519th Fiscal Period Ended March 2015 Cash distribution per unit

Business Results and Distribution
Settlement Date

Mar. 2013

Sept. 2013

Mar. 2014

Sept. 2014

Mar. 2015

Sept. 2015

Fiscal Period

15th FP

16th FP

17th FP

18th FP

19th FP

20th FP (Forecast)

Operating revenue (million yen)

4,038

4,688

4,952

5,591

6,286

6,411

Operating income (million yen)

1,908

2,179

2,242

2,463

2,814

2,730

Ordinary income (million yen)

1,435

1,684

1,767

1,952

2,305

2,194

Net income (million yen)

1,433

1,681

1,765

1,950

2,302

2,192

-

-

-

-

77

34

2,091 (10,459)

2,107 (10,537)

2,212 (11,062)

2,131（10,655）

2,185 (10,925)

2,120 (10,600)

Provision for reserve for reduction entry (million yen)
Cash distribution per unit (yen)(Note 1) The values of respective items in the 20th fiscal period ending September 2015 (forecast) are the figures as of May 18, 2015 (announcement of business results) calculated under certain assumptions. The actual operating revenue, operating
income, ordinary income, net income, provision for reserve for reduction entry and distribution per unit may be subject to change due to such factors as additional acquisitions or assignments of real properties in the future, changes in thereal estate and other markets, and changes in the asset management environment and other conditions surrounding the Investment Corporation. In addition, the Investment Corporation does not guarantee any actual results or distribution
amount in providing the forecast figures. Furthermore, the Investment Corporation executed a five-for-one split of its investment units on April 1, 2014. Taking into account the effect of the investment unit split, the distribution per unit for the
fiscal period ended March 2014 (17th fiscal period) and before represents the figure obtained by dividing the actual distribution per unit for each period (figure in parenthesis) by 5. For the fiscal period ended September 2014 (18th fiscal
period) and after, the figure in parenthesis for each period indicates the value obtained by multiplying the actual distribution per unit or the forecast by 5. The same follows hereafter.
(Note 2) Distribution per unit for the fiscal period ended March 2015 (19th fiscal period) is calculated based on the amount of unappropriated retained earnings less the provision for reserve for reduction entry of 77 million yen, divided by the numberof investment units issued as of the end of the fiscal period.
(Note 3) With regard to the 57 million yen (planned) as gain on partial sale of RINKU HAGURAZAKI Plaza (sokochi) for the 20th fiscal period ending September 2015, the Investment Corporation assumes to record 34 million yen (planned) as provision
for reserve for reduction entry to the extent applicable to the Special Provisions for Taxation on Investment Corporations under Article 67-15 of the Act on Special Measures Concerning Taxation and the Special Measures in Case Land or
Other Property is Acquired in Advance in 2009 or 2010 under Article 66-2 of the said law. However, the actual amount of the internal reserve may be subject to change.

Changes in Business Results● Operating Revenue / Net Income

Net income

Operating revenue(million yen)

(yen)

7,000

5,591

5,000

4,688

2,000

4,952

4,038

1,433

1,681

1,765

1,950

2,302

（11,062）（10,925）
2,212 （10,655）
2,185
2,131

1,000
500

1,000
0

（10,459）（10,537）
2,107
2,091

1,500

3,000
2,000

2,500

6,286

6,000

4,000

● Cash Distribution per Unit

15th FP
16th FP
17th FP
18th FP
19th FP(Mar. 31, 2013) (Sept. 30, 2013) (Mar. 31, 2014) (Sept. 30, 2014) (Mar. 31, 2015)

0

15th FP
16th FP
17th FP
18th FP
19th FP(Mar. 31, 2013) (Sept. 30, 2013) (Mar. 31, 2014) (Sept. 30, 2014) (Mar. 31, 2015)

Ta b l e o f C o n t e n t s
1

Features and Investment Policy

3

To Our Unitholders

4

Performance Highlights

5

Portfolio Management

6

Further Reinforcement of Financial Base

7

CSR and Environmental Activities

9

Portfolio Map

11 Management Discussion and Analysis

22 Financial Section (Audited)
23 Financial Statements
I . Balance Sheet
II . Statement of Income and Retained Earnings
III. Statement of Changes in Net Assets
IV. Statement of Cash Distributions
V . Statement of Cash Flows

29 Notes to Financial Statements
50 Independent Auditor’s Report
51 Overview of the Investment Corporation and Asset Management Company
53 Unitholders Information
4

Sekisui House SI Residential Investment Corporation

Further Reinforcement of Financial Base

Portfolio Management
Changes in Occupancy Ratio
Aiming to secure rental income stably over the long term, the Investment Corporation collaborated with the property management companies tofocus on managing properties in pursuit of intensively controlled and more efficient leasing management. As a result of this endeavor, theoccupancy ratio of the entire portfolio stood at 97.4% as of the end of the 19th fiscal period (March 31, 2015), continuing to stay at a high level.

（％）
100

99.9
97.1

95

96.3

100.0

100.0

100.0

100.0

100.0

100.0

97.1

97.0

96.8

96.8

97.1

97.4

96.2

96.2

95.9

96.4

95.9

96.7

The Investment Corporation is promoting stabilization of its financial base through such financial strategies as reducing borrowing costs andlengthening the borrowing periods, given the credibility of Sekisui House, Ltd.

Stabilization of the Financial BaseThe Investment Corporation is promoting stabilization of its financial base by endeavoring to fix interest rates, lengthen the borrowing periods andthrough other measures.
Ratio of fixed interest rates

90.8％

Ratio of long-term borrowings

End of the 19th period (March 31, 2015)

96.1％

Average remaining period of borrowings

End of the 19th period (March 31, 2015)

4.9

years

End of the 19th period (March 31, 2015)(Note 1) “Ratio of fixed interest rates” includes the interest rates of borrowings that have been practically fixed by concluding interest rate swap agreements, and is rounded to the nearest first decimal place.
(Note 2) “Ratio of long-term borrowings” includes current portion of long-term loans payable within one year, and is rounded to the nearest first decimal place.
(Note 3) “Average remaining period of borrowings” is the remaining period of interest-bearing debt to the repayment dates weighted average by the balance of interest-bearing debt, and is rounded down to the nearest first decimal place.
The same follows hereafter.

Stable occupancy is maintained continuously
Changes in Period-Average Borrowing Cost Rate and Average Remaining Period of Borrowings

90
End of Sept. 2014

End of Oct. 2014

End of Nov. 2014

18th FP

Residence

Retail property

End of Dec. 2014

End of Jan. 2015

Entire portfolio

End of Feb. 2015

Since the sponsor change, the Investment Corporation has worked to lengthen the average remaining period of borrowings and reduce the borrowing costs.
End of Mar. 2015

19th FP（％）3.00
Period-average borrowing cost rate (left axis)
Average remaining period of borrowing (right axis)(Note) The occupancy ratio in the above graph indicates the ratio of total leased area to the total leasable area in each category for the properties of the corresponding category held by the Investment Corporation as of the endof each month from September 2014 to March 2015, rounded to the nearest first decimal place.

4.2years

2.00

1.61 %

Status of the Residential Portfolio

Diversification status
by area

End of 18th FP (Sept. 30, 2014)
Residential portfolio (totaling 91 properties)■ Greater Tokyo /Major Urban Areas

End of 19th FP (Mar. 31, 2015)
Residential portfolio (totaling 100 properties)■ Greater Tokyo / Other Urban Areas

27.4％
Greater Tokyo

74.0％

27.6％
Greater Tokyo

70.6％

3.1％

Of these,Tokyo’s 23 wards

72.6％

Diversification status
by floor area

Diversification status
by walking distance to station

Diversification statusby property age

64.4％

69.5％
Of these,Tokyo’s 23 wards

3.5％

72.4％

8.7 years

69.0％
Of these,Tokyo’s 23 wards

64.1％

9.9％

21.3％

4.0％
Averageproperty age

0Greater Tokyo

Averageproperty age

73.8％

8.4 years

22.7％

9.6％

Averageproperty age

68.7％

8.5 years

67.7％

9.8％

31.8％
Within10-minute walk

28.6％
■ Less than 30m2

90.5％

■ 30m2 to less than 50m2

23.1％

27.3％

38.4 ㎡

27.9％■ 50m2 to less than 100m2

0.7％
Average area
per unit

32.4％

10.0％

Within10-minute walk

30.1％

90.2％

31.5％
Within10-minute walk

29.9％

29.6％

90.0％

29.0％

■ 100m2 or more (Classified according to the area of each residential unit)

25.3％

0.7％
Average area
per unit

48.9％
27.4％

39.2 ㎡

26.3％

0.7％
Average area
per unit

46.6％
27.1％

39.6 ㎡

45.9％(Note 1) “Average property age” is calculated by seeking the weighted average of the building age of each property with the investment ratio calculated based on the acquisition price, rounded down to the nearest first decimal place.
(Note 2) “Average area per unit” is calculated based on the total leasable residential area of owned properties and the total number of rentable residential units as of each point of time, rounded down to the nearest first decimal place.

5

2.1years

2.3years

3.1years

3.2years

1.38 %

1.25 %

3.0

1.20 %

1.09 %

1.04%

12th FP(Sept. 30, 2011)

13th FP
14th FP(Mar. 31, 2012) (Sept. 30, 2012)

15th FP(Mar. 31, 2013)

16th FP
17th FP(Sept. 30, 2013) (Mar. 31, 2014)

18th FP(Sept. 30, 2014)

19th FP(Mar. 31, 2015)

1.5

0(Note) “Period-average borrowing cost rate” is calculated by using the formula bellow, and is rounded to the nearest second decimal place:
Period-average borrowing cost rate = Period borrowing cost(annualized) / Balance of period-average interest-bearing debt

Status of Bank Formation
The Investment Corporation has promoted construction of the bank formation comprising major Japanese financial institutions centering on megabanks,
based on the credibility of Sekisui House, Ltd.
As of March 31, 2015, the Investment Corporation has borrowed funds from 17 financial institutions in total.
(as of March 31, 2015)■ Within 3 minutes ■ More than 3 minutes to within 5 minutes ■ More than 5 minutes to within 10 minutes ■ More than 10 minutes (Classified according to the walking minutes from station for each property (based on the acquisition price))

9.5％

2.0years

1.47 %

4.5

62.1％■ Less than 5 years ■ 5 years to less than 10 years ■ 10 years or more (Classified according to the property age with July 24, 2015 as the reference date (based on the acquisition price))

22.2％

1.00

1.56 %

4.9years■ Major Cities Nationwide (Classified according to the area where each property is located (based on the acquisition price))

26.0％
3.4％

As of July 24, 2015
Residential portfolio (totaling 104 properties)

4.5years

6.0（year）

Financial Institution
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Mizuho Trust & Banking Co., Ltd.
Sumitomo Mitsui Trust Bank, Limited
Mitsubishi UFJ Trust and Banking Corporation
Development Bank of Japan Inc.
The Norinchukin Bank
Resona Bank, Limited.
The Bank of Fukuoka, Ltd.
Aozora Bank, Ltd.
Shinkin Central BankThe Senshu Ikeda Bank, Ltd.
The 77 Bank. Ltd.
The Hiroshima Bank, Ltd.
The Yamaguchi Bank, Ltd.
The Shizuoka Bank, Ltd.
Total debt

Outstanding Balance(million yen)

16,026
15,866

Share
(%)

18.9
18.8

10,600

12.5

6,030

7.1

6,000

7.1

5,142

6.1

5,141
4,152
3,950
2,200

2,000
1,500
1,200
1,200

6.1
4.9
4.7
2.6
2.4

1.8

1.4
1.4

1,200

1.4

1,200
1,200
84,609

1.4
100.0

1.4

1.4%
1.4%
1.4%
1.4%

1.4%
1.8%
2.4%
2.6%

18.9%
4.7%
4.9%
6.1%

18.8%

6.1%
7.1%
7.1%

12.5%

6

Sekisui House SI Residential Investment Corporation

CSR and Environmental Activities
Establishment of Environmental Basic Policy
Based onEnvironment“Sustainability Vision”
of Sekisui House, Ltd.,the main sponsor of the Investment Corporation,

ConsiderSocietyand Conduct

Governance

Sustainability Policy
１Compliance with Environment-related Laws, Regulations and Rules

two of its owned properties (Prime Maison SHINAGAWA and Prime Maison GOTENYAMA EAST) as “Properties with exceptionally highenvironmental & social awareness.” This is the first case of the DBJ Green Building Certification granted to residential properties.

Energy Conservation Measures

Case Study

Replacement to LED light fixtures

Phased introduction began in September 2014■56

% annual reduction in
Approx.
electricity usage forecasted■

Introduction completed at 8 properties (as of the end of March 2015)138

ton annual reduction in
Approx.
greenhouse gas (CO2) emissions forecasted*Calculations made by Asset Management Company based onmaterials provided by vendor entrusted with light fixture replacement

プライムメゾン御殿山イースト
Prime
Maison GOTENYAMA EAST

Resource Depletion Countermeasures

Case Study

Installation of water-saving equipment (flow control valves)

Phased introduction began in March 2015

In an attempt to counter the depletion of resources through a reduction in water
usage, we are proceeding with the installation of water-saving equipment featuring
flow control valves and water-saving showers as necessary.

Introduction completed at 157 locations (as of the end of March 2015)■ Through the installation of flow control valves, which while not affecting water pressure can lead to a

reduction in water usage, a single flow control valve is estimate to result in a reduction in water usage of approx.

30%.

*Calculations made by Asset Management
Company based on materials provided by vendor
entrusted with flow control valve installation

Biodiversity Activities
In accordance with the “Gohon no ki” (Five Trees) project promoted by Sekisui House, Ltd., we give consideration to biodiversity and conduct
maintenance and management of planting, selecting tree species while considering vegetation existing within each region.

5*For details of the DBJ Green Building Certification, please refer to the next page.

Contributing to Regions in which We Own Properties
While promoting the establishment of facilities to enable tenants to continue living safely and securely in the event of a disaster, by opening ourfacilities to neighborhood residents when a disaster occurs, we are contributing to areas in which we own properties.

7

Assessment Points
Proactively promotes energy saving and energy creation by employing LED lighting for not only common areas but also exclusive
areas, as well as installing photovoltaic power generation panels, to demonstrate how sustainable residences should be.
Conducts greening on the rooftop and walls, and gives considerations to biodiversity by frequently planting Japan’s original, wild andnative species that have long been familiar to the local community, based on the “Gohon no ki” (Five Trees) project promoted by
Sekisui House, Ltd., the developer.
(Particularly for Prime Maison SHINAGAWA) Responds to a variety of tenant needs by introducing latest facilities, including installment of electric vehicle battery chargers as well as emergency power sources that are directly connected to the photovoltaic power
generation panels to supply electricity to the common areas.

Information Disclosure
While regularly monitoring environmental activities, we disclose information concerning sustainability performance on our website. Furthermore,
we will continue our efforts to acquire recognition from outside agencies, such as the DBJ Green Building Certification*.

6

Prime
Maison SHINAGAWA
プライムメゾン品川

In an attempt to reduce energy consumption and greenhouse gas emissions in common areas, weare proceeding with the phased replacement of existing light fixtures with LED light fixtures incommon areas.

Through the effective use of limited resources and energy conservation measures, we proactively undertake measures against the depletion of resources.

4

Provide high-quality residences through the J-REIT scheme

In January 2015, the Investment Corporation received a high-rank (4 stars) recognition by Development Bank of Japan Inc. (DBJ) for

We conduct measurement and management of energy consumption levels of properties owned by the Investment Corporation, and proactively
promote activities toward the conservation of energy.

3Realize sustainable society

DBJ Green Building Certification

In addition to performing in-house training for the purpose of enhancing knowledge with regard to environment-related laws, regulations and rules,
we conduct real estate investment and management while maintaining compliance with environment-related laws, regulations and rules toward therealization of a sustainable society.

2

Real estate
investment
management

DBJ Green Building Certification
The DBJ Green Building Certification System is designed to mark buildings by using a scoring model
originally developed by DBJ and select blue-chip real estate that meets the demands of the times. Its purpose
is to promote real estate properties that demonstrate environmental performance as well as security
measures and disaster prevention measures and take into account the social requirements from various
stakeholders surrounding the properties (“Green Buildings”).

8Sekisui House SI Residential Investment Corporation

Portfolio Map
In order to mitigate the risks associated with unipolar concentration of the portfolio, including risks related to local economy and earthquakes, theInvestment Corporation positions Greater Tokyo / Major Urban Area as the focused investment area, while conducting diversified investment inGreater Tokyo / Other Urban Areas and Major Cities Nationwide.
Greater Tokyo /Major Urban Areas

Major Cities Nationwide (Osaka City)
Residence-20
Residence-23
Residence-28
Residence-29
Residence-41
Residence-59
Residence-60
Residence-72
Residence-73

Esty Maison KYOBASHI
Esty Maison MINAMIHORIE
Esty Maison JOTO
Esty Maison TSUKAMOTO
Esty Maison NISHINAKAJIMA
Prime Maison YUHIGAOKA
Prime Maison KITATANABE
Esty Maison KAWARAMACHI
Esty Maison NISHITENMA

Residence-1
Residence-3
Residence-4
Residence-5
Residence-6
Residence-8
Residence-10
Residence-12
Residence-14
Residence-15
Residence-16
Residence-17
Residence-19
Residence-21
Residence-22
Residence-24
Residence-25
Residence-26
Residence-27
Residence-30
Residence-31
Residence-33
Residence-34

Major Cities Nationwide (Fukuoka City)
Residence-35 Esty Maison TENJINHIGASHI I
Residence-36 Esty Maison TENJINHIGASHI II
Residence-46 Esty Maison HAKATAHIGASHI
Residence-47 Esty Maison KAMIGOFUKUResidence-55 MAST HAKATA
Residence-61 Prime Maison MOMOCHIHAMAResidence-67 Prime Maison TERIHA
Residence-93 Esty Maison YAKUIN
Residence-103 Prime Maison CENTRAL PARK

Esty Maison GINZA
Esty Maison AZABUNAGASAKA
Esty Maison EBISU II
Esty Maison EBISU
Esty Maison KANDA
Esty Maison KITASHINJUKU
Esty Maison ASAKUSA KOMAGATA
Esty Maison KAWASAKI
Esty Maison SHINKAWASAKI
Esty Maison YOKOHAMA
Esty Maison KAMEIDO
Esty Maison MEGURO
Esty Maison SUGAMO
Esty Maison MEGUROHONCHO
Esty Maison HAKURAKU
Esty Maison GOTANDA
Esty Maison OISENDAIZAKA
Esty Maison SHINAGAWA SEASIDE
Esty Maison MINAMIAZABU
Esty Maison KAWASAKI II
Esty Maison AZABUJUBAN
Esty Maison ITABASHIHONCHO
Esty Maison OIZUMIGAKUEN

Residence-39
Residence-42
Residence-43
Residence-44
Residence-45
Residence-48
Residence-53
Residence-54
Residence-56
Residence-57
Residence-62
Residence-63
Residence-64
Residence-69
Residence-70
Residence-71
Residence-74
Residence-75
Residence-76
Residence-77
Residence-78
Residence-79
Residence-80

Esty Maison HIGASHISHINAGAWA
Esty Maison ITABASHIKUYAKUSHOMAE
Esty Maison MUSASHIKOYAMA
Esty Maison SENDAGI
Esty Maison YOTSUYASAKAMACHI
Esty Maison SANGENJAYA
Esty Maison SANGENJAYA II
Esty Maison ITABASHI C6
Esty Maison KINSHICHO
Esty Maison MUSASHIKOGANEI
Esty Maison AKIHABARA
Esty Maison SASAZUKA
Prime Maison GINZA EAST
Esty Maison SENGOKU
Esty Maison DAIZAWA
Esty Maison TOGOSHI
Esty Maison SHIROKANEDAI
Esty Maison HIGASHISHINJUKU
Esty Maison MOTOAZABU
Esty Maison TORITSUDAIGAKU
Esty Maison MUSASHIKOYAMA II
Esty Maison NAKANO
Esty Maison SHINNAKANO

Residence-81 Esty Maison NAKANOFUJIMICHO
Residence-82 Esty Maison TETSUGAKUDO
Residence-83 Esty Maison KOENJI
Residence-84 Esty Maison OSHIAGE
Residence-85 Esty Maison AKABANE
Residence-86 Esty Maison OJI
Residence-87 Prime Maison WASEDA
Residence-88 Prime Maison HATCHOBORIResidence-89 Prime Maison JINBOCHO
Residence-90 Prime Maison GOTENYAMA EAST
Residence-91 MAST LIFE AKIHABARA
Residence-94 Esty Maison KINSHICHO II
Residence-95 Esty Maison OJIMA
Residence-98 Prime Maison MORISHITA
Residence-99 Prime Maison SHINAGAWA
Residence-104 MAST LIFE YAHIRO
Residence-105 Prime Maison EBISU
Residence-106 Esty Maison SHIBAURA
Residence-110 Esty Maison KOHOKU TSUNASHIMA (Acquired in 20th FP) (Note)b-town MINAMIAOYAMA
Retail-4
b-toss IKEBUKURO (Assigned in 20th FP)
Retail-7(Note) Esty Maison KOHOKU TSUNASHIMA represents the property’s name after change, as the Investment Corporation will change the brand name of the property to Esty Maison after providing tenants with acertain period of notice of the change.

Greater Tokyo / Other Urban Areas

Residence-11
Residence-18
Residence-40
Residence-50
Residence-109
Retail-5
Retail-8

東京圏その他都市

Esty Maison MACHIDA
Esty Maison YACHIYO MIDORIGAOKA
Esty Maison HACHIOJIMINAMINO
Prime Maison MUSASHINONOMORI
Esty Maison TSUTSUJIGAOKA (Acquired in 20th FP)
KOJIMA × BIC CAMERA Kamifukuoka store(Formerly, KOJIMA NEW KAMIFUKUOKATEN)
Joy Square YUGAWARA

Major Cities Nationwide (Nagoya City)
Residence-13
Residence-51
Residence-52
Residence-58
Residence-65
Residence-66
Residence-68
Residence-92
Residence-96
Residence-97

9Esty Maison IMAIKE
Prime Maison HIGASHISAKURA
Prime Maison KAYABAKOEN
Prime Maison GOKISO
Prime Maison TAKAMI
Prime Maison YADAMINAMI
Esty Maison HIGASHISHIRAKABE
Esty Maison AOIPrime Maison FUJIMIDAI
Esty Maison TSURUMAI

Major Cities Nationwide (Kyoto City, Sapporo City, Hamamatsu City and other areas)

Residence-37
Residence-100
Residence-101
Residence-102
Residence-107
Residence-108
Retail-1
Retail-3
Retail-9

Esty Maison SHIJONISHINOTOIN
Prime Maison ODORI KOEN
Prime Maison MINAMI 2-JO
Prime Maison KAMOKAMOGAWA
Granmast KANAZAWA NISHIIZUMI (Acquired in 20th FP)
Granmast UNOMORI (Acquired in 20th FP)
HAMAMATSU PlazaRINKU HAGURAZAKI Plaza
Bell Plaza Shopping Center10

Sekisui House SI Residential Investment Corporation

Management Discussion and Analysis
Overview of Asset Management
1.Changes in Operating Results and Other Management Data
Fiscal Period

Unit

Accounting period
Operating revenue
Rent revenue - real estate
Operating expenses
Expenses related to rent business

2. Asset Management Status for the 19th Fiscal Period

15th Fiscal Period 16th Fiscal Period 17th Fiscal Period 18th Fiscal Period 19th Fiscal Period(October 1, 2013 (October 1, 2014 (October 1, 2012 (April 1, 2013 (April 1, 2014 March 31, 2014)
March 31, 2015)
March 31, 2013)
September 30, 2013)
September 30, 2014)

mm yen

4,038

4,688

4,952

5,591

6,286

mm yen(4,032)(4,683)(4,917)(5,591)(6,134)mm yen

2,130

2,508

2,710

3,127

3,472

mm yen(1,745)(2,066)(2,233)(2,560)(2,835)

Operating income

mm yen

1,908

2,179

2,242

2,463

2,814

Ordinary income

mm yen

1,435

1,684

1,767

1,952

2,305

Net income(a)

mm yen

1,433

1,681

1,765

1,950

2,302

Total assets(b)

mm yen133,843

148,871

156,878

176,892

194,035%(+17.2)(+11.2)(+5.4)(+12.8)(+9.7)

mm yen59,18869,97670,05981,01091,227%(+14.5)(+18.2)(+0.1)(+15.6)(+12.6)mm yen57,75568,294

68,29479,05988,925(Period-on-period variation)(c)

Net assets(Period-on-period variation)
Unitholders' capital(1) Brief History of the Investment Corporation
Sekisui House SI Residential Investment Corporation (the “Investment Corporation”) is an investment corporation sponsored by Sekisui House, Ltd. (“Sekisui House”), a
leading company in the housing industry, and Spring Investment Co., Ltd. (“Spring Investment”), an international fund manager, and has worked to establish a stableportfolio primarily comprising residential properties.
The Investment Corporation listed on the Real Estate Investment Trust Securities Market of Tokyo Stock Exchange, Inc. on July 28, 2005. Subsequently, as Sekisui Houseand Spring Investment were selected as new sponsors replacing the former sponsor, they acquired the outstanding shares of the Investment Corporation’s asset
management company on March 8, 2010, with 75% equity interest held by Sekisui House and 25% by Spring Investment. This firmly established a collaboration systemwith the two companies serving as joint sponsors for the Investment Corporation and the asset management company.
Later, at the Sixth General Meeting of Unitholders held on June 11, 2014, the Investment Corporation’s Articles of Incorporation was partially revised to remove retailproperties, which had previously been identified as a supplementary investment target, from its investment horizons and to solely invest in real estate related assets thatare mainly used (Note 1) as residences. At the same time, it was resolved to change the Investment Corporation’s trade name to Sekisui House SI Residential Investment
Corporation in order to strongly demonstrate the shift of its investment targets.
The Investment Corporation aims to become a leading company among REITs investing in residential properties by promoting expansion of its asset size, primarily
through acquiring rental residential properties developed by the Sekisui House Group (Note 2), with a focus on maximizing the interests of its unitholders, as well as byworking to reinforce its financial base.
(Note 1) “Mainly used” means that a majority of the total exclusive area of the relevant real estate-related asset is allocated for a specific use.
(Note 2) The Sekisui House Group refers to the group encompassing Sekisui House and its 194 subsidiaries and 20 affiliated companies (as of the end of January 2015).

Investment units issued

(d)

units

137,070

159,605

159,605

915,240

1,018,110

Net assets per unit(c)/(d)yen

431,813438,432(Note 5) 87,791

88,51289,605

Total cash distributions(e)

mm yen

1,433

1,681

1,765

1,950

2,224

1) Operating Environment

Cash distribution per unit(e)/(d)yen

10,45910,537

11,062

2,131

2,185

yen

(10,459)(10,537)(11,062)(2,131)(2,185)

During the 19th fiscal period, the Japanese economy presumably remained on course for a modest recovery, showing a steady improvement in the employment andincome environments as well as a pickup in exports backed by the recovery in overseas economies, etc., although improvement in consumer spending was dull in certain
areas.

Earnings distribution per unit

yen

(―)

(―)

(―)

(―)

(―)

%

1.2(2.3)

1.2(2.4)

1.2(2.3)

1.2(2.3)

1.2(2.5)(Note 2)%2.6(5.2)

2.6(5.2)

2.5(5.1)

2.6(5.2)

2.7(5.4)(c)/(b)

%

44.2

47.0

44.7

45.8

47.0

(-1.1)(2.8)(-2.3)

(1.1)

(1.2)

(Note 3)

%

100.0

99.9

100.0

99.9

96.6

(Note 4)

properties

Distribution in excess of earnings per unit
Ordinary income to total assets(Note 2)Return on unitholders’ equity
Unitholders’ equity ratio(Period-on-period variation)
Distribution payout ratio[Other reference information]
Number of investment properties
Total leasable area

(Note 4)

Period-end occupancy ratio
Depreciation
Capital expenditures
Leasing NOI (net operating income)(Note 2)

77

89

95

99

107

2

m

295,116.85

301,179.47

318,602.26

357,494.91

399,249.82

%

97.7

97.1

97.5

97.1

97.4

mm yen

853

1,018

1,073

1,252

1,369

mm yen

23

17

86

68

153

mm yen

3,141

3,636

3,757

4,283

4,669

(Note 1) Consumption tax is not included in operating revenue, etc.
(Note 2) The indicators are calculated by using the following methods. In addition, annualized figures in accordance with the number of management days are provided in the parenthesis in parallel.
Ordinary income to total assets

Ordinary income / Average total assets
Average total assets = (Period-beginning total assets + Period-end total assets) / 2

Return on unitholders’ equity

Net income / Average net assets
Average net assets = (Period-beginning net assets + Period-end net assets) / 2

Leasing NOI

Leasing income for the fiscal period(= Rent revenue - real estate – Expenses related to rent business) + Depreciation(Note 3) Distribution payout ratio is calculated by using the following method, and is rounded down to the nearest specified unit.
Distribution per unit (excluding distribution in excess of earnings per unit) / Net income per unit
For the 15th, 16th, 18th and 19th fiscal periods, however, the following method is employed as the Investment Corporation issued new investment units in the periods.
Total cash distributions / Net income(Note 4) Number of investment properties indicates the number of properties that are considered to be single units respectively in light of common sense. In addition, the period-end occupancy ratio indicates the ratio of the total leased area to the total leasablearea as of the account closing date.
(Note 5) The Investment Corporation implemented a 5-for-1 split of its investment units with March 31, 2014 and April 1, 2014 as the record date and the effective date, respectively. Accordingly, net assets per unit have been calculated on the assumption thatthe split of investment units was conducted at the beginning of the 17th fiscal period ended March 2014. Furthermore, net assets per units for the 17th fiscal period stands at 438,957 yen when it is calculated without assuming that the split ofinvestment units was conducted at the beginning of the 17th fiscal period.

(2) Investment Environment and Asset Management Results

Under these circumstances, the Tokyo Stock Exchange (TSE) REIT Index soared in the first half of the fiscal period, given the long-term interest rates in Japan continuing
to show a downward trend and due to the decision made by the Bank of Japan (BOJ) at its Monetary Policy Meeting held on October 31, 2014 to increase its purchasesof long-term government bonds at a pace of approximately 80 trillion yen annually, up 30 trillion yen, and to triple its purchases of J-REITs to approximately 90 billion
yen annually. Subsequently, in the latter half of the fiscal period, the TSE REIT Index showed unstable movements as the long-term interest rate levels took an upward
turn and became unstable after entering 2015. As a whole, however, the Index remained solid, partly bolstered by the BOJ’s purchases.
As for the land price trend, the national average decreased at a slower pace for residential land and shifted from a decrease to a leveling-off for commercial land for the
first time in seven years, according to the Land Price Survey as of January 1, 2015. On the average in the three major metropolitan areas (the Greater Tokyo, Osaka Area
and Nagoya Area), both the residential and commercial land prices have increased for two consecutive years. Moreover, in the three major metropolitan areas, land prices
increased in slightly less than half of the surveyed sites for residential land and slightly more than 70% for commercial land. As such, land prices are observed to be
recovering, due to such factors as a decrease in the vacancy rate of office buildings and the tendency to use commercial land as condominium sites.
In terms of the demand trend for rental residential properties, the number of single-person households centering on young people is increasing in Greater Tokyo andsome major cities including government designated cities because of population inflow from other regions. In addition, there continue to be a decreased orientation forpossessing one’s own houses, primarily among young generations, due to changes of mind-sets such as turning away from driving cars and from buying their own
homes as well as due to more diversified lifestyles. Given these backgrounds, latent demand for rental residential properties remain solid, and rental condominiums
featuring superior locations and quality enjoy stable occupancy.
As for the supply trend for rental residential properties, the number of housing starts exceeded the level of the year-earlier month for the first time in 13 months,
according to the Statistics on Building Construction Starts (March 2015) by the Ministry of Land, Infrastructure, Transport and Tourism. However, as the figure continues
to remain at a low level, the supply and demand situation in the rental residential properties market is believed to largely remain in good shape.
Meanwhile, according to the Monthly Report of Recent Economic and Financial Developments (April 2015) by the Bank of Japan, department store sales throughout
Japan have continued to show am improving trend, bolstered by a pickup of demand from the decline in reaction to the front-loaded increase and the asset effect fromhigher stock prices, as well as by an increase in sales for foreigners visiting Japan. Moreover, while supermarket sales nationwide were relatively weak, convenience
store sales have shown a slightly upward trend. Accordingly, it is considered that rents for stores, which are influenced by private consumption trends, have been
recovering. For example, there is an observed tendency in which advertised rents soar in expectation of the economic recovery going forward in such areas as Ginza andOmotesando in Tokyo.

2) Asset Management Results
A. Measures for expanding the asset size
[Changes in the asset size]
The Investment Corporation started the 19th fiscal period with management of 99 properties it owned as of September 30, 2014, having total acquisition price of 171,099
million yen (excluding, however, miscellaneous acquisition related expenses, fixed property taxes, city planning taxes, consumption taxes and local consumption taxes;
the same follows hereafter). Following the assignment of a retail property (acquisition price of 1,043 million yen) in October 2014, the Investment Corporation acquired

11

12Sekisui House SI Residential Investment Corporation

seven residential properties in November 2014, a residential property in January 2015 and a residential property in March 2015, respectively (with total acquisition priceof 18,715 million yen). As a result, the properties owned by the Investment Corporation as of the end of the fiscal period under review totaled 107 properties (100residential properties and 7 retail properties), with the total acquisition price amounting to 188,771 million yen (172,277 million yen for residential properties and 16,493
million yen for retail properties).
The table below indicates the properties assigned or acquired during the 19th fiscal period.

In addition, the Investment Corporation has been granted the following credit ratings as of July 24, 2015 in the light of the stable financial base established through theseendeavors.
Credit Rating Agency

Issuer Rating

Japan Credit Rating Agency, Ltd. (JCR)

Long-term issuer rating
AA- (Stable)

Rating and Investment Information, Inc. (R&I)

Issuer rating
A+ (Stable)<Assigned property>
Property No.
Retail-2

Property Nameb-town JINGUMAE II

Location

Assignment Price(million yen)

Assignment Date

Jingumae, Shibuya-ku, Tokyo

1,200

October 3, 2014

Location

Acquisition Price(million yen)

Acquisition Date

<Newly acquired properties>

As a result of these management efforts, the Investment Corporation posted operating revenue of 6,286 million yen, operating income of 2,814 million yen after
deducting such operating expenses as outsourcing expenses, utilities expenses and asset management fees, ordinary income of 2,305 million yen and net income of
2,302 million yen in the 19th fiscal period.

Residence-100

Prime Maison ODORI KOEN

Odori-Nishi, Chuo-ku, Sapporo-shi, Hokkaido

2,660

November 4, 2014

Furthermore, the Investment Corporation decided to internally reserve part of the gain on sale of b-town JINGUMAE II as reserve for reduction entry by applying to theSpecial Measures in Case Land or Other Property is Acquired in Advance in 2009 or 2010 under Article 66-2 of the Act on Special Measures Concerning Taxation.
Pursuant to this policy, the Investment Corporation decided to distribute the entire amount of the unappropriated retained earnings after deducting 77million yen as theprovision for reserve for reduction entry, which is within the scope of application to Article 66-2 of the Act on Special Measures Concerning Taxation, and excluding thefractions less than one yen per investment unit, with the aim of having the maximum amount of profit distributions deducted as expenses based on application of thespecial provisions for taxation on investment corporations (Article 67-15 of the Act on Special Measures Concerning Taxation).

Residence-101

Prime Maison MINAMI 2-JO

Minami 2jo Nishi, Chuo-ku, Sapporo-shi, Hokkaido

1,470

November 4, 2014

As a result, the cash distribution per unit came to 2,185 yen for the 19th fiscal period.

Residence-102

Prime Maison KAMOKAMOGAWA

Minami 7jo Nishi, Chuo-ku, Sapporo-shi, Hokkaido

970

November 4, 2014

Property No.

Property Name

Residence-98

Prime Maison MORISHITA

Morishita, Koto-ku, Tokyo

1,720

November 4, 2014

Residence-99

Prime Maison SHINAGAWA

Kita-Shinagawa, Shinagawa-ku, Tokyo

1,680

November 4, 2014

Residence-103

Prime Maison CENTRAL PARK

Kashii Teriha, Higashi-ku, Fukuoka-shi, Fukuoka

2,230

November 4, 2014

Residence-104

MAST LIFE YAHIRO

Yahiro, Sumida-ku, Tokyo

1,670

November 4, 2014

3. Future Management Policies and Vital Issues

Residence-105

Prime Maison EBISU

Ebisu, Shibuya-ku, Tokyo

3,585

January 15, 2015(1) Investment Environment

Residence-106

Esty Maison SHIBAURA

Shibaura, Minato-ku, Tokyo

2,730

March 31, 2015

With regard to the outlook of the Japanese economy, domestic demand will remain solid and exports are expected to head for a moderate increase, according to the
Outlook for Economic Activity and Prices (April 2015) by the Bank of Japan. As such, a virtuous cycle from income to spending is likely to be maintained in both thehousehold and corporate sectors. The economy is forecasted to continue growing at a rate surpassing the potential growth rate for fiscal 2015 through fiscal 2016, asconsumer spending in fiscal 2015 is anticipated to benefit from lower energy prices that push up real income and to recover from the drop following the rush demandprior to the consumption tax rate hike.

[Implementation of two public offerings in two consecutive fiscal periods and property replacement]
The Investment Corporation issued new investment units through public offering in April 2014. Using the funds procured from the public offering plus borrowings andcash on hand, it acquired four residential properties in May 2014. Moreover, in October 2014, it conducted another public offering for two consecutive fiscal periods, andused the funds procured from the public offering as well as borrowings and cash on hand to acquire seven Prime Maison Series properties from Sekisui House and a
MAST Series property from Sekiwa Real Estate, Ltd. (“Sekiwa Real Estate”), respectively. In line with the latter public offering, the Investment Corporation alsotransferred a retail property, the first such assignment since the amendments to its Articles of Incorporation in June 2014. The funds from the sale of the property wereused to partly fund the above-mentioned new acquisitions, realizing a property replacement of the portfolio. Through these series of initiatives, the Investment
Corporation was able to steadily expand the asset size and enhance the residential portfolio.
B. Implementation of Leasing Activities and Measures to Enhance Property Value
During the fiscal period, the Investment Corporation conducted leasing activities by paying attention to the trends in the surrounding rental markets in accordance withthe property locations, residential types and tenant classifications. At the same time, it took various measures aiming to enhance property values and tenant satisfaction.
Specific measures included implementation of renewals of aged and obsolete exclusive areas, which can be obstacles to leases, in a timely manner and measures thatare not only environmentally friendly but also helpful to reduce operational costs, such as introduction of energy-saving air-conditioning equipment, introduction of LED
lighting to common areas and installation of water-saving equipment. Consequently, the occupancy ratio of the entire residential properties stood at 96.7% as of the endof the 19th fiscal period.

However, a certain upswing or downswing may possibly arise for the future outlook, depending on such overseas economic trends as the outlook of emerging
economies, the European debt problem and the recovery pace of the U.S. economy as well as such factors as changes in expectations of household and corporate
sectors for growth over a medium to long term and confidence in the medium- to long-term sustainability of the national finance. Close monitoring of the future trends
and outcome of these factors will be required.
In the real estate transaction market, the increase in real estate prices attributed to the expansion of the “quantitative and qualitative monetary easing” announced by the
Bank of Japan on October 31, 2014 will probably continue going forward, amid the intensifying competition over properties due to diversification of market participants
and the rents entering the upward phase. On the other hand, supply of new properties including high-quality rental residential properties, etc. is projected to remain at alow level over a medium term, primarily because of the increase in construction costs and intensified competition over acquisitions of construction sites. Accordingly, theexpected investment return will presumably continue to show a decreasing trend for some time. Based on this view, the Investment Corporation will conduct acquisitions
and management of assets by carefully discerning the asset management environment in terms of the business and interest rate trends, the supply and demand balance
status and the orientations of domestic and foreign investors.

Moreover, Prime Maison SHINAGAWA and Prime Maison GOTENYAMA EAST, two of the residential properties owned by the Investment Corporation, were granted the
DBJ Green Building Certification by Development Bank of Japan Inc. (DBJ), the first case of the Certification granted to residential properties of J-REITs, in recognition
that they are “properties with exceptionally high environmental & social awareness.”(2) Management Policy and Vital Issues

For retail properties, stable occupancy has been maintained from the beginning of the fiscal period, with the occupancy ratio of the entire retail properties standing at
100.0% as of March 31, 2015.

With an aim to realize maximum value for its unitholders, the Investment Corporation endeavors to build a portfolio that centers on high-quality rental residential
properties planned and developed by the Sekisui House Group, for which Sekisui House, Ltd., the main sponsor, serves as the core company. In this endeavor, theInvestment Corporation positions Greater Tokyo / Major Urban Area as the focused investment area as well as the core area of its property portfolio, while setting
Greater Tokyo / Other Urban Areas as areas to achieve a risk distribution effect for the Greater Tokyo residential portfolio. Moreover, in order to mitigate the risk
associated with heavy concentration of the portfolio on Greater Tokyo, the Investment Corporation will work to diversify investments to a certain degree as it investigatesacquisitions of properties that allow expectations for stable rental demand, carefully selected from among properties located in major metropolitan areas and major
regional cities around Japan, by making the best use of the nationwide networks of the Sekisui House Group. As for the residential types as investment targets, theInvestment Corporation will invest primarily in properties comprised mainly of the Single and Compact Type residences for which relatively high rental demand andprofitability can be expected, as well as in properties comprised mainly of the Family Type residences for which stable earnings can be expected, giving due consideration
to area characteristics. The Investment Corporation will also selectively invest in properties comprised mainly of the Large Type residences after carefully analyzing site
environments and such.

As a result of these endeavors, the occupancy ratio of the entire portfolio was 97.4% as of the end of the fiscal period under review.

(3) Summary of Fund Procurement
During the 19th fiscal period, the Investment Corporation newly borrowed 1,000 million yen in short-term loans payable (loan period: approximately 10 months) inNovember 2014, 2,800 million yen in long-term loans payable in January 2015 (loan period: approximately a year and two months) and 2,850 million yen in short-termloans payable in March 2015 (loan period: approximately 11 months). In February 2015, it borrowed 8,100 million yen with a loan period of approximately 8 years, 3,350
million yen with a loan period of approximately 7 years and 3,900 million yen with a loan period of approximately 6 years, as funds for refinancing the borrowings thatmatured (15,350 million yen in total). These arrangements helped promote further extension of borrowing periods and diversification of repayment days. Of the longterm loans payable in these funds for refinancing, the interest rates were fixed in effect for borrowings with floating interest rates by concluding interest rate swap
agreements in order to hedge the risk of rising interest rates.
As a result of the above, the Investment Corporation had the balance of interest-bearing debts standing at 99,109 million yen (3,850 million yen in short-term loans
payable, 80,759 million yen in long-term loans payable (including 5,650 million yen in current portion of long-term loans payable) and 14,500 million yen in investment
corporation bonds) as of March 31, 2015.

13(4) Summary of Business Results and Distributions

A. External Growth Strategy

In terms of the property acquisition channels, the Investment Corporation will focus on utilizing the Sekisui House Group’s ability to supply properties, while also using
property information provided by Spring Investment, the co-sponsor, and endeavoring to acquire properties from outside sources by collecting property information
through the proprietary networks of the asset management company. Even in the real estate market where prices are soaring, the Investment Corporation will acquire
properties that it considers to contribute to enhancing its profitability, in view of the areas and property characteristics, while working to keep the yields at proper levels.
By doing so, the Investment Corporation will aim to steadily achieve expansion of the asset size centering on high-quality rental residential properties.
As for existing retail properties it owns, the Investment Corporation will investigate selling them as a rule, while making efforts to achieve their stable management incooperation with Sekisui House.

14

Sekisui House SI Residential Investment Corporation

B. Internal Growth Strategy
The Investment Corporation will continue to implement various measures to enhance cash flows from its owned properties. For residential properties, it will work to
reinforce property competitiveness and reduce operational costs by continuously conducting such initiatives as building renovation and unit renewal work, which it has
been implementing at any time, as well as replacement of common area lighting to LED lamps. In addition, it will further strengthen coordination with the property
management companies in an effort to reduce vacancy periods (down time) and maintain and improve the contract renewal ratio. It will also focus on increasing rents
upon concluding new contracts and renewing existing contracts with tenants, and on obtaining key money upon concluding new contracts and renewal fees uponrenewing existing contracts.
For properties it acquires from the Sekisui House Group, the Investment Corporation will, in principle, consign property management services to the Sekiwa Real EstateGroup (Note) companies that cover the areas in which the said properties are located, in order to improve the occupancy ratio and enhance the operational andadministrative efficiency through the synergy effect with the Sekisui House Group. Moreover, the Investment Corporation has gradually unified the property managementcompanies involved in the existing residential properties to the Sekiwa Real Estate companies. This is understood to have enabled the Investment Corporation to realize
tenant attraction and efficient administration by taking advantage of the Sekiwa Real Estate Group’s know-how on property management services, backed by the trackrecord of lease management for approximately 545,000 units throughout Japan (as of January 31, 2015), and its nationwide networks. Going forward, the Investment
Corporation will keep this policy in an aim to maintain and improve its medium- and long-term performance. Furthermore, in an effort to establish the brand, theInvestment Corporation is unifying the property name brands to “Esty Maison”, as a rule, for residential properties it acquired from other than the Sekisui House Group.
By doing so, and in combination with the “Prime Maison” brand for Sekisui House’s rental residential properties and the “MAST” series brand for the Sekiwa Real EstateGroup’s rental residential properties, the Investment Corporation will implement its comprehensive brand strategy to demonstrate the superior quality of its properties.
(Note) “Sekiwa Real Estate Group” represents a group of companies comprising, as the core, the Sekiwa Real Estate companies which are wholly-owned subsidiaries of Sekisui House, Ltd. and expanding nationwide presence in Japan, and their subsidiaries
and affiliates. Furthermore, the “Sekiwa Real Estate companies” refers to the seven companies of Sekiwa Real Estate, Ltd., Sekiwa Real Estate Kanto, Ltd., Sekiwa Real Estate Tohoku, Ltd., Sekiwa Real Estate Chubu, Ltd., Sekiwa Real Estate Kansai,Ltd., Sekiwa Real Estate Chugoku, Ltd. and Sekiwa Real Estate Kyushu, Ltd., which are wholly-owned subsidiaries of Sekisui House, Ltd. and the core companies of the real estate division of the Sekisui House Group.

Prime Maison

Location(Note 2)

Property Name

Acquisition Price(million yen)

Acquisition Date

1,005

April 2, 2015

Residence-107

Granmast KANAZAWA NISHIIZUMI

Nishiizumi, Kanazawa-shi, Ishikawa

Residence-108

Granmast UNOMORIUnomori, Yokkaichi-shi, Mie745

April 2, 2015

Residence-109

Esty Maison TSUTSUJIGAOKA

Nishitsutsujigaoka, Chofu-shi, Tokyo871

May 14, 2015

Residence-110

Esty Maison KOHOKU TSUNASHIMA (Note 1)

Shin-yoshida Higashi, Kohoku-ku, Yokohama-shi, Kanagawa

2,680

July 10, 2015

(Note 1) Although Esty Maison KOHOKU TSUNASHIMA is named Gran Coeur Kohoku Tsunashima as of the date of this document, the Investment Corporation will change the brand name of the property to Esty Maison after providing tenants with a certain
period of notice of the change. Accordingly, the property’s name after change is used here.
(Note 2) The location is based on the indication on the registry.

B. Assignments of Owned Property
The Investment Corporation assigned the following part of property as of April 28, 2015 and a property as of June 12, 2015.
Property No.

Location(Note 2)

Property Name

Sale Price(million yen)

Sale Date

Retail-3

RINKU HAGURAZAKI Plaza (Note 1)

Tajiri-cho, Sennan-gun, Osaka and other

1,150

April 28, 2015

Retail-7

b-toss IKEBUKURO

Nishi-Ikebukuro, Toshima-ku, Tokyo

2,050

June 12, 2015

(Note 1) RINKU HAGURAZAKI Plaza is a commercial facility comprised of three sections where Kohnan Shoji Co., Ltd., AEONTOWN Co., Ltd. and Kojima Co., Ltd. respectively have fixed-term land leasehold rights for business purposes as the lessees. Of
these sections, the Investment Corporation assigned the land section for which Kojima Co., Ltd. was the lessee.
(Note 2) The location is based on the indication on the registry.

<Summary of the Investment Corporation’s Major Brands>
Brand Name

Property No.

Esty Maison

MAST Series

C. Borrowing of Funds
The Investment Corporation borrowed funds as follows in order to allocate them for acquiring real estate trust beneficiary interests and for other purposes.
LenderLogo type

Drawdown Date

Loan amount(million yen)Mizuho Bank, Ltd.

Explanation on brandHigh-quality urban rental condominiums
planned and developed by Sekisui House byutilizing its know-how or in which it invests
in recognition of the value

Proprietary Brand of theInvestment Corporation
As a rule, high-quality urban rental
condominiums the Investment Corporationacquired from outside the Sekisui HouseGroup

Brand of the Sekiwa Real
Estate GroupAs a rule, high-quality rental residential
properties planned and developed by the
Sekiwa Real Estate companies that belong
to the Sekisui House GroupAs for the retail properties, which are characterized by the fact that their earnings are impacted by the changes in the business climate and the competition environment
in surrounding areas, the Investment Corporation will maintain close communications with the tenants on a daily basis and promptly respond to problems that may
occur, in order to cope with such changes as soon as possible so that the Investment Corporation endeavors to maintain and enhance the value of the facilities.

Fixed/
Floating

Repayment Date

Repayment
Method0.30500%(Note 1)

Floating

February 29, 2016

Lump-sum
repayment

Funds forUnsecuredacquisition of realandestate beneficiary
unguaranteedinterest, etc.

August 31, 2016

Lump-sum
repayment

Funds forUnsecuredacquisition of realandestate beneficiary
unguaranteedinterest, etc.

600
April 2, 2015

Sumitomo Mitsui Banking Corporation

Brand of Sekisui HouseInterest Rate

600

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

600

Total

1,800

Mizuho Bank, Ltd.

700

Sumitomo Mitsui Banking Corporation

700

July 10, 2015

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

700

Mitsubishi UFJ Trust and Banking Corporation

700

Total

2,800

0.30500%(Note 2)

Floating

Use

Collateral(Note 1) The interest rate is applicable for the period from June 30, 2015 to July 31, 2015.
(Note 2) The interest rate is applicable for the period from July 10, 2015 to July 31, 2015.

D. Early Repayment of Loans
As for the below-stated borrowings, the Investment Corporation conducted early repayment on May 29, 2015 and June 30, 2015.

(3) Financial Strategy, Etc.
For the loan-to-value ratio (LTV), which represents the ratio of the balance of borrowings, investment corporation bonds and interest-bearing lease and guarantee
deposits to the total of assets owned by the Investment Corporation, the Asset Management Guidelines of the asset management company sets the ceiling at 60%.
However, as the policy it has followed to date, the Investment Corporation makes it a basic rule to maintain LTV at a conservative level, with the lower half of the 50%
level as the target ceiling for the time being. Furthermore, the Investment Corporation’s LTV stood at 51.1% as of the end of the 19th fiscal period as a result of theissuance of new investment units through public offering conducted in the fiscal period. The Investment Corporation will effectively utilize the capacity for borrowings
created by the decreased LTV, while investigating diversification of the fund procurement means and conducting fund procurement through appropriate means, paying
close attention to the market environment.

4. Significant Events Occurring after Settling the 19th Fiscal Period
Not applicable.

< Individual loan contract (loan period: approximately 10 months)>
LenderMizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation

A. New Asset Acquisitions
The Investment Corporation acquired the following four properties as of April 2, 2015, May 14, 2015 and July 10, 2015.

15

Drawdown Date

Principal Repayment
Date

Early Repayment
Date

November 4, 2014

August 31, 2015

May 29, 2015

Principal Repayment
Date

Early Repayment
Date

500

0.33000%(Floating interest rate)
500(Note)

Amount of
Repayment(million yen)

Balance after
Repayment(million yen)

Security

500(full payment)

Unsecured andunguaranteed

Amount of
Repayment(million yen)

Balance after
Repayment(million yen)

Security

600

200

600

200

900

300

500

(Note) The interest rate is applicable for the period from April 30, 2015 to May 29, 2015.

< Individual loan contract (loan period: approximately 1 year and 2 months)>
LenderMizuho Bank, Ltd.

(Reference Information)

Loan AmountApplicable Interest Rate
(million yen)

Sumitomo Mitsui
Banking Corporation
The Bank of TokyoMitsubishi UFJ, Ltd.

Loan AmountApplicable Interest Rate
(million yen)

Drawdown Date

800
0.33000%
800 (Floating interest rate)(Note)
1,200

January 15, 2015

February 29, 2016

June 30, 2015

Unsecured andunguaranteed(Note) The interest rate is applicable for the period from May 29, 2015 to June 30, 2015.

16

Sekisui House SI Residential Investment Corporation

5. Itemized Portfolio Assets
Property Name

The following table provides details of the assets (real estate and trust beneficiary interests in real estate as major entrusted property, etc.) owned by the Investment
Corporation as of March 31, 2015.

Property Name

17

Location (residence indication)

Form of Ownership

Total Leasable
Floor Area(m2)

Estimated Valueat End of Period(Note 1)(million yen)Book Value(million yen)

Residence-1

Esty Maison GINZA

3-11-19 Ginza, Chuo-ku, Tokyo

Trust beneficiary interests

5,515.43

5,810

4,814

Residence-3

Esty Maison AZABUNAGASAKA

5-13-12 Roppongi, Minato-ku, Tokyo

Trust beneficiary interests

2,019.10

1,630

1,642

Residence-4

Esty Maison EBISU II

4-13-1 Higashi, Shibuya-ku, Tokyo

Trust beneficiary interests

2,062.10

1,860

1,843

Residence-5

Esty Maison EBISU

1-13-4 Hiroo, Shibuya-ku, Tokyo

Trust beneficiary interests

781.02790

650

Residence-6

Esty Maison KANDA

2-3-4 Kandata-cho, Chiyoda-ku, Tokyo

Trust beneficiary interests

1,706.54

1,410

1,242

Residence-8

Esty Maison KITASHINJUKU

1-28-17 Kita-Shinjuku, Shinjuku-ku, Tokyo

Trust beneficiary interests

1,881.19

1,450

1,190

Residence-10

Esty Maison ASAKUSA KOMAGATA

1-10-9 Komagata, Taito-ku, Tokyo

Trust beneficiary interests

2,978.28

1,970

1,678

Residence-11

Esty Maison MACHIDA

2-1-17 Hara-machida, Machida-shi, Tokyo

Trust beneficiary interests

3,090.89

1,460

1,125

Residence-12

Esty Maison KAWASAKI

14-24 Ogawa-cho, Kawasaki-ku, Kawasaki-shi, Kanagawa

Trust beneficiary interests

3,741.01

2,310

1,874

Residence-13

Esty Maison IMAIKE

3-12-28 Imaike, Chikusa-ku, Nagoya-shi, Aichi

Trust beneficiary interests

1,296.22

196

268

Residence-14

Esty Maison SHINKAWASAKI

1-4 Furuichiba, Saiwai-ku, Kawasaki-shi, Kanagawa

Trust beneficiary interests

3,737.47

1,170

946

Residence-15

Esty Maison YOKOHAMA

3-33-1 Tsuruya-cho, Kanagawa-ku, Yokohama-shi, Kanagawa

Trust beneficiary interests

2,823.73

2,010

1,952

Residence-16

Esty Maison KAMEIDO

6-57-11 Kameido, Koto-ku, Tokyo

Trust beneficiary interests

2,279.21

1,430

1,460

Residence-17

Esty Maison MEGURO

2-10-12 Mita, Meguro-ku, Tokyo

Trust beneficiary interests

1,070.13

1,020

810

Residence-18

Esty Maison YACHIYO MIDORIGAOKA

1-2-8 Midorigaoka, Yachiyo-shi, Chiba

Trust beneficiary interests

4,815.26

1,130

1,191

Residence-19

Esty Maison SUGAMO

4-14-15 Sugamo, Toshima-ku, Tokyo

Trust beneficiary interests

2,619.17

1,550

1,478

Residence-20

Esty Maison KYOBASHI

2-7-10 Higashinoda-cho, Miyakojima-ku, Osaka-shi, Osaka

Trust beneficiary interests

4,613.04

2,710

2,398

Residence-21

Esty Maison MEGUROHONCHO

4-8-21 Megurohoncho, Meguro-ku, Tokyo

Trust beneficiary interests

1,656.02

1,030

1,136

Residence-22

Esty Maison HAKURAKU

1-18-19 Rokkakubashi, Kanagawa-ku, Yokohama-shi, Kanagawa Trust beneficiary interests

1,285.83

837

739

Residence-23

Esty Maison MINAMIHORIE

2-12-10 Minamihorie, Nishi-ku, Osaka-shi, Osaka

Trust beneficiary interests

1,804.48984

970

Residence-24

Esty Maison GOTANDA

7-7-2 Nishi-Gotanda, Shinagawa-ku, Tokyo

Trust beneficiary interests

3,871.15

2,830

2,804

Residence-25

Esty Maison OISENDAIZAKA

5-9-10 Higashi-Oi, Shinagawa-ku, Tokyo

Trust beneficiary interests

2,979.85

2,490

2,267

Residence-26

Esty Maison SHINAGAWA SEASIDE

3-25-20 Higashi-Shinagawa, Shinagawa-ku, Tokyo, etc.

Trust beneficiary interests

2,602.30

1,980

2,022

Residence-27

Esty Maison MINAMIAZABU

1-10-8 Minamiazabu, Minato-ku, Tokyo

Trust beneficiary interests

1,082.12

1,160

1,218

Residence-28

Esty Maison JOTO

2-11-8 Noe, Joto-ku, Osaka-shi, Osaka

Trust beneficiary interests

2,065.92

922

1,000

Residence-29

Esty Maison TSUKAMOTO

2-13-5 Tsukamoto, Yodogawa-ku, Osaka-shi, Osaka

Trust beneficiary interests

2,321.04

1,050

1,144

Residence-30

Esty Maison KAWASAKI II

12-4 Ogawa-cho, Kawasaki-ku, Kawasaki-shi, Kanagawa

Trust beneficiary interests

2,824.86

1,910

1,761

Residence-31

Esty Maison AZABUJUBAN

1-11-1 Azabujuban, Minato-ku, Tokyo

Trust beneficiary interests

1,755.31

2,550

2,626

Residence-33

Esty Maison ITABASHIHONCHO

14-14 Yamato-cho, Itabashi-ku, Tokyo

Trust beneficiary interests

1,274.49925

933

Residence-34

Esty Maison OIZUMIGAKUEN

2-12-15 Higashi-Oizumi, Nerima-ku, Tokyo

Trust beneficiary interests

1,362.36

808

812

Residence-35

Esty Maison TENJINHIGASHI I

4-3 Susaki-machi, Hakata-ku, Fukuoka-shi, Fukuoka

Trust beneficiary interests

1,058.82

382

396

Residence-36

Esty Maison TENJINHIGASHI II

6-12 Susaki-machi, Hakata-ku, Fukuoka-shi, Fukuoka

Trust beneficiary interests

1,943.72

708

746

Residence-37

Esty Maison SHIJONISHINOTOIN

697 Myodenji-cho, Shijo-sagaru, Nishinotoin-dori, Shimogyo-ku, Kyoto-shi, Kyoto Trust beneficiary interests

2,261.28

1,110

1,319

Residence-39

Esty Maison HIGASHISHINAGAWA

1-10-1 Higashi-Shinagawa, Shinagawa-ku, Tokyo

Trust beneficiary interests

2,936.72

2,360

2,495

Residence-40

Esty Maison HACHIOJIMINAMINO

3-2-8 Nishikatakura, Hachioji-shi, Tokyo

Trust beneficiary interests

2,155.16

840

911

Residence-41

Esty Maison NISHINAKAJIMA

2-8-21 Higashinakajima, Higashiyodogawa-ku, Osaka-shi, Osaka Trust beneficiary interests

3,643.42

1,870

1,995

Residence-42

Esty Maison ITABASHIKUYAKUSHOMAE

2-46-11 Itabashi, Itabashi-ku, Tokyo

Trust beneficiary interests

3,915.81

2,500

2,534

Residence-43

Esty Maison MUSASHIKOYAMA

3-1-7 Ebara, Shinagawa-ku, Tokyo

Trust beneficiary interests

1,176.78

1,030

971

Residence-44

Esty Maison SENDAGI

3-49-1 Sendagi, Bunkyo-ku, Tokyo

Trust beneficiary interests

897.30695

730

Residence-45

Esty Maison YOTSUYASAKAMACHI

6-20 Yotsuyasakamachi, Shinjuku-ku, Tokyo

Trust beneficiary interests

2,453.17

1,950

2,238

Residence-46

Esty Maison HAKATAHIGASHI

7-2-80 Yoshizuka, Hakata-ku, Fukuoka-shi, Fukuoka

Trust beneficiary interests

9,106.08

2,390

2,089

Residence-47

Esty Maison KAMIGOFUKU

13-3 Kamigofukumachi, Hakata-ku, Fukuoka-shi, Fukuoka

Trust beneficiary interests

2,261.91

841

840

Residence-48

Esty Maison SANGENJAYA

2-16-9 Sangenjaya, Setagaya-ku, Tokyo

Trust beneficiary interests

856.08833

856

Residence-50

Prime Maison MUSASHINONOMORI

5-15-3 Josuihoncho, Kodaira-shi, Tokyo

Trust beneficiary interests

3,924.58

1,810

1,518

Residence-51

Prime Maison HIGASHISAKURA

2-10-14 Higashisakura, Higashi-ku, Nagoya-shi, Aichi

Trust beneficiary interests

3,118.11

1,370

1,082

Residence-52

Prime Maison KAYABAKOEN

2-7-13 Kayaba, Chikusa-ku, Nagoya-shi, Aichi

Trust beneficiary interests

2,163.98

744

616

Residence-53

Esty Maison SANGENJAYA II

3-11-6 Shimouma, Setagaya-ku, Tokyo

Trust beneficiary interests

894.64812

690

Residence-54

Esty Maison ITABASHI C6

32-16 Oyama-higashi-cho, Itabashi-ku, Tokyo

Trust beneficiary interests

4,036.66

2,380

2,182

Residence-55

MAST HAKATA

4-22-25 Hakata Ekimae, Hakata-ku, Fukuoka-shi, Fukuoka

Trust beneficiary interests

9,614.80

2,380

1,875

Residence-56

Esty Maison KINSHICHO

1-1-8 Kinshi, Sumida-ku, Tokyo

Trust beneficiary interests

1,611.54

1,200

1,068

Residence-57

Esty Maison MUSASHIKOGANEI

2-6-5 Honcho, Koganei-shi, Tokyo

Trust beneficiary interests

2,275.24

1,610

1,480

Residence-58

Prime Maison GOKISO

2-17-2 Ayuchitori, Showa-ku, Nagoya-shi, Aichi

Trust beneficiary interests

4,427.65

1,790

1,597

Residence-59

Prime Maison YUHIGAOKA

5-4-13 Ueshio, Tennoji-ku, Osaka-shi, Osaka

Trust beneficiary interests

2,040.35

878

789

Residence-60

Prime Maison KITATANABE

4-9-17 Kitatanabe, Higashisumiyoshi-ku, Osaka-shi, Osaka

Trust beneficiary interests

1,798.97

573

525

Location (residence indication)

Form of Ownership

Total Leasable
Floor Area(m2)

Estimated Valueat End of Period(Note 1)(million yen)Book Value(million yen)

Residence-61

Prime Maison MOMOCHIHAMA

3-9-1 Momochihama, Sawara-ku Fukuoka-shi, Fukuoka

Trust beneficiary interests

7,514.76

1,950

1,807

Residence-62

Esty Maison AKIHABARA

3-4-2 Ueno, Taito-ku, Tokyo

Trust beneficiary interests

2,324.65

1,790

1,550

Residence-63

Esty Maison SASAZUKA

1-61-17 Sasazuka, Shibuya-ku, Tokyo

Trust beneficiary interests

3,701.70

3,020

2,824

Residence-64

Prime Maison GINZA EAST

1-2-1 Tsukiji, Chuo-ku, Tokyo

Trust beneficiary interests

6,177.20

5,720

5,125

Residence-65

Prime Maison TAKAMI

2-6-7 Takami, Chikusa-ku, Nagoya-shi, Aichi

Trust beneficiary interests

2,016.79

972

892

Residence-66

Prime Maison YADAMINAMI

3-11-7 Yadaminami, Higashi-ku, Nagoya-shi, Aichi

Trust beneficiary interests

2,168.59753

704

Residence-67

Prime Maison TERIHA

1-3-7 Kashiiteriha, Higashi-ku, Fukuoka-Shi, Fukuoka

Trust beneficiary interests

6,728.20

1,230

1,090

Residence-68

Esty Maison HIGASHISHIRAKABE

3-9-36 Yoshino, Higashi-ku, Nagoya-shi, Aichi

Trust beneficiary interests

4,014.07

1,470

1,323

Residence-69

Esty Maison SENGOKU

4-6-17 Sengoku, Bunkyo-ku, Tokyo

Trust beneficiary interests

1,498.13

1,210

1,104

Residence-70

Esty Maison DAIZAWA

2-39-13 Daizawa, Setagaya-ku, Tokyo

Trust beneficiary interests

2,352.90

2,020

1,918

Residence-71

Esty Maison TOGOSHI

1-25-5 Togoshi, Shinagawa-ku, Tokyo

Trust beneficiary interests

1,943.17

1,550

1,402

Residence-72

Esty Maison KAWARAMACHI

3-2-10 Kawaramachi, Chuo-ku, Osaka-shi, Osaka

Trust beneficiary interests

3,486.48

1,810

1,628

Residence-73

Esty Maison NISHITENMA

5-15-3 Nishitenma, Kita-ku, Osaka-shi, Osaka

Trust beneficiary interests

2,877.90

1,590

1,432

Residence-74

Esty Maison SHIROKANEDAI

1-1-4 Kamiosaki, Shinagawa-ku, Tokyo

Trust beneficiary interests

2,675.11

2,200

1,992

Residence-75

Esty Maison HIGASHISHINJUKU

6-22-5 Shinjuku, Shinjuku-ku, Tokyo

Trust beneficiary interests

1,889.50

1,510

1,393

Residence-76

Esty Maison MOTOAZABU

3-6-6 Motoazabu, Minato-ku, Tokyo

Trust beneficiary interests

1,199.86

1,390

1,197

Residence-77

Esty Maison TORITSUDAIGAKU

2-7-17 Tairamachi, Meguro-ku, Tokyo

Trust beneficiary interests

1,035.78800

748

Residence-78

Esty Maison MUSASHIKOYAMA II

3-11-4 Koyama, Shinagawa-ku, Tokyo

Trust beneficiary interests

1,073.59

937

863

Residence-79

Esty Maison NAKANO

5-48-2 Chuo, Nakano-ku, Tokyo

Trust beneficiary interests

2,023.72

1,680

1,573

Residence-80

Esty Maison SHINNAKANO

6-10-7 Honcho, Nakano-ku, Tokyo

Trust beneficiary interests

1,107.57

914

865

Residence-81

Esty Maison NAKANOFUJIMICHO

5-13-1 Yayoicho, Nakano-ku, Tokyo

Trust beneficiary interests

1,299.60

937

882

Residence-82

Esty Maison TETSUGAKUDO

2-12-15 Matsugaoka, Nakano-ku, Tokyo

Trust beneficiary interests

1,531.89

1,100

973

Residence-83

Esty Maison KOENJI

5-25-26 Koenjiminami, Suginami-ku, Tokyo

Trust beneficiary interests

1,527.52

1,090

981

Residence-84

Esty Maison OSHIAGE

5-11-5 Narihira, Sumida-ku, Tokyo

Trust beneficiary interests

3,180.90

2,250

1,989

Residence-85

Esty Maison AKABANE

2-39-5 Akabane, Kita-ku, Tokyo

Trust beneficiary interests

4,302.84

2,990

2,778

Residence-86

Esty Maison OJI

2-25-8 Oji, Kita-ku, Tokyo

Trust beneficiary interests

2,289.44

1,500

1,406

Residence-87

Prime Maison WASEDA

544-11 Waseda Tsurumaki-cho, Shinjuku-ku, Tokyo

Trust beneficiary interests

1,650.66

1,450

1,288

Residence-88

Prime Maison HATCHOBORI

4-11-9 Hatchobori, Chuo-ku, Tokyo

Trust beneficiary interests

1,382.32

1,310

1,167

Residence-89

Prime Maison JINBOCHO

1-50-9 Kandajinbo-cho, Chiyoda-ku, Tokyo

Trust beneficiary interests

1,819.90

1,790

1,648

Residence-90

Prime Maison GOTENYAMA EAST

6-6-33 Kitashinagawa, Shinagawa-ku, Tokyo

Trust beneficiary interests

2,512.91

2,570

2,138

Residence-91

MAST LIFE AKIHABARA

50-6 Kanda Sakumagashi, Chiyoda-ku, Tokyo

Trust beneficiary interests

803.36509

489

Residence-92

Esty Maison AOI

1-14-20 Aoi, Higashi-ku, Nagoya-shi, Aichi

Trust beneficiary interests

4,809.68

2,280

2,186

Residence-93

Esty Maison YAKUIN

1-13-8 Hirao, Chuo-ku, Fukuoka-shi, Fukuoka

Trust beneficiary interests

5,207.49

2,220

2,105

Residence-94

Esty Maison KINSHICHO II

3-5-19 Kotobashi, Sumida-ku, Tokyo

Trust beneficiary interests

9,469.65

7,560

6,926

Residence-95

Esty Maison OJIMA

5-32-5 Ojima, Koto-ku, Tokyo

Trust beneficiary interests

9,905.97

8,170

7,325

Residence-96

Prime Maison FUJIMIDAI

1-25 Fujimidai, Chigusa-ku, Nagoya-shi, Aichi

Trust beneficiary interests

5,704.63

1,910

1,816

Residence-97

Esty Maison TSURUMAI

2-20-1 Chiyoda, Naka-ku, Nagoya-shi, Aichi

Trust beneficiary interests

13,812.40

4,110

3,908

Residence-98

Prime Maison MORISHITA

3-6-4 Morishita, Koto-ku, Tokyo

Trust beneficiary interests

2,180.78

1,800

1,788

Residence-99

Prime Maison SHINAGAWA

1-3-16 Kita-Shinagawa, Shinagawa-ku, Tokyo

Trust beneficiary interests

2,107.88

1,740

1,737

Residence-100 Prime Maison ODORI KOEN

6-5-2 Odori-Nishi, Chuo-ku, Sapporo-shi, Hokkaido

Trust beneficiary interests

7,360.37

2,870

2,765

Residence-101 Prime Maison MINAMI 2-JO

9-1-1 Minami 2jo Nishi, Chuo-ku, Sapporo-shi, Hokkaido

Trust beneficiary interests

6,019.09

1,700

1,542

Residence-102 Prime Maison KAMOKAMOGAWA

1-6-1 Minami 7jo Nishi, Chuo-ku, Sapporo-shi, Hokkaido

Trust beneficiary interests

4,102.08

1,110

1,021

Residence-103 Prime Maison CENTRAL PARK

4-2-5 Kashii Teriha, Higashi-ku, Fukuoka-shi, Fukuoka

Trust beneficiary interests

10,268.74

2,273

2,340

Residence-104 MAST LIFE YAHIRO

5-30-10 Yahiro, Sumida-ku, Tokyo

Trust beneficiary interests

3,409.16

1,720

1,740

Residence-105 Prime Maison EBISU

1-22-19 Ebisu, Shibuya-ku, Tokyo

Trust beneficiary interests

3,010.66

3,920

3,677

Residence-106 Esty Maison SHIBAURA

2-8-3 Shibaura, Minato-ku, Tokyo

Trust beneficiary interests

3,795.82

2,780

2,862

315,763.70

180,613

168,486
3,642

Residence subtotal
Retail-1

HAMAMATSU Plaza (Note 2)1020-1 Kaminishi-cho, Higashi-ku, Hamamatsu-shi, Shizuoka, etc.

Trust beneficiary interests

14,117.13

2,249

Retail-3

RINKU HAGURAZAKI Plaza

605 Kashoji Tajiri-cho, Sennan-gun, Osaka, etc.

Trust beneficiary interests

53,275.73

5,110

4,734

Retail-4

b-town MINAMIAOYAMA

3-6-7 Minamiaoyama, Minato-ku, Tokyo

Trust beneficiary interests

769.93

1,120

1,505

Retail-5

KOJIMA × BIC CAMERA Kamifukuoka store 5-10-18 Kamifukuoka, Fujimino-shi, Saitama

Trust beneficiary interests

3,413.40

1,120

1,251

Retail-7

b-toss IKEBUKURO

1-38-3 Nishi-Ikebukuro, Toshima-ku, Tokyo

Trust beneficiary interests

1,332.88

1,720

1,970

Retail-8

Joy Square YUGAWARA

1-1617-54 Chuo, Yugawaramachi, Ashigarashimo-gun, Kanagawa

Trust beneficiary interests

4,404.35

1,540

1,712

Retail-9

Bell Plaza Shopping Center

1647-7 Nakamaruko, Ueda-shi, Nagano, etc.

Trust beneficiary interests

6,172.70

1,190

1,378

Other real estate in trust (Retail property) subtotal

83,486.12

14,04916,195

Total

399,249.82

194,662

184,681(Note 1) The “Estimated Value at End of Period” indicates either the appraisal value by real estate appraisers with March 31, 2015 as the date of appraisal.
(Note 2) The real estate in trust is quasi-co-owned, and the figure represents the value obtained by multiplying the “leasable floor area” of the facility by 49%, which is the quasi-co-ownership interest of the Investment Corporation.

18

Sekisui House SI Residential Investment Corporation

6. Changes in Rental Business Results

18th Fiscal Period (Apr. 1, 2014 – Sept. 30, 2014)

The following table provides changes in rental business results for each property in which the Investment Corporation has invested.
18th Fiscal Period (Apr. 1, 2014 – Sept. 30, 2014)

19

Property Name

Property Name

19th Fiscal Period (Oct. 1, 2014 – Mar. 31, 2015)

Ratio to Total
RentalRevenues(%)

Occupancy
Number of
Rental Revenue
Tenants at End Ratio at End of
throughout
Periodof Period
Period(Note 2) (%)(Note 1)(million yen)

Ratio to Total
RentalRevenues(%)

Occupancy
Rental Revenue
Number ofthroughout
Tenants at End Ratio at End of
PeriodPeriodof Period(Note 2) (%)(Note 1)(million yen)

Ratio to Total
RentalRevenues(%)

Occupancy
Number of
Rental Revenue
Tenants at End Ratio at End of
throughout
Periodof Period
Period(Note 2) (%)(Note 1)(million yen)

Ratio to Total
RentalRevenues(%)

Residence-62

Esty Maison AKIHABARA

1

95.0

55

1.0

1

100.0

55

Residence-63

Esty Maison SASAZUKA

1

95.7

87

1.6

1

97.8

91

1.5

1

98.1

162

2.9

1

97.3

165

2.7

Residence-64 Prime Maison GINZA EAST

0.9

Residence-65 Prime Maison TAKAMI

1

100.0

32

0.6

1

92.4

33

0.5

Residence-1

Esty Maison GINZA

1

96.0

170

3.1

1

100.0

177

2.9

Residence-66 Prime Maison YADAMINAMI

1

100.0

27

0.5

1

96.2

27

0.4

Residence-3

Esty Maison AZABUNAGASAKA

1

90.6

50

0.9

1

85.3

45

0.7

Residence-67 Prime Maison TERIHA

1

100.0

51

0.9

1

100.0

51

0.8

Residence-4

Esty Maison EBISU II

1

87.2

54

1.0

1

95.7

56

0.9

Residence-68 Esty Maison HIGASHISHIRAKABE

1

100.0

47

0.9

1

100.0

47

0.8

Residence-5

Esty Maison EBISU

1

92.8

22

0.4

1

96.1

23

0.4

Residence-69 Esty Maison SENGOKU

1

94.4

37

0.7

1

89.7

37

0.6

Residence-6

Esty Maison KANDA

1

96.1

45

0.8

1

100.0

45

0.7

Residence-70 Esty Maison DAIZAWA

1

97.6

60

1.1

1

93.4

58

1.0

Esty Maison KITASHINJUKU

1

98.7

42

0.8

1

94.2

44

0.7

Residence-71 Esty Maison TOGOSHI

1

100.0

47

0.8

1

98.9

48

0.8

Esty Maison ASAKUSA KOMAGATA

1

97.7

65

1.2

1

96.5

63

1.0

Residence-72 Esty Maison KAWARAMACHI

1

95.1

57

1.0

1

99.0

61

1.0

Residence-11

Esty Maison MACHIDA

1

95.5

53

1.0

1

95.8

53

0.9

Residence-73 Esty Maison NISHITENMA

1

95.0

54

1.0

1

93.3

53

0.9

Residence-12

Esty Maison KAWASAKI

1

96.8

79

1.4

1

98.0

76

1.2

Residence-74 Esty Maison SHIROKANEDAI

1

90.1

58

1.1

1

97.9

58

0.9

Residence-13

Esty Maison IMAIKE

1

98.3

14

0.3

1

96.9

15

0.3

Residence-75 Esty Maison HIGASHISHINJUKU

1

94.0

45

0.8

1

92.2

41

0.7

Residence-14

Esty Maison SHINKAWASAKI

1

100.0

31

0.6

1

100.0

32

0.5

Residence-76 Esty Maison MOTOAZABU

1

100.0

39

0.7

1

100.0

40

0.7

Residence-15

Esty Maison YOKOHAMA

1

95.8

63

1.1

1

100.0

62

1.0

Residence-77 Esty Maison TORITSUDAIGAKU

1

92.8

22

0.4

1

93.5

23

0.4

Residence-16

Esty Maison KAMEIDO

1

96.0

52

0.9

1

98.9

52

0.9

Residence-78 Esty Maison MUSASHIKOYAMA II

1

100.0

28

0.5

1

100.0

29

0.5

Residence-17

Esty Maison MEGURO

1

97.5

30

0.5

1

91.8

29

0.5

Residence-79 Esty Maison NAKANO

1

92.1

49

0.9

1

98.9

51

0.8

Residence-18

Esty Maison YACHIYO MIDORIGAOKA

1

95.3

44

0.8

1

98.4

44

0.7

Residence-80 Esty Maison SHINNAKANO

1

96.2

28

0.5

1

98.0

28

0.5

Residence-19

Esty Maison SUGAMO

1

97.3

48

0.9

1

94.7

48

0.8

Residence-81 Esty Maison NAKANOFUJIMICHO

1

100.0

29

0.5

1

87.4

27

0.4

Residence-20

Esty Maison KYOBASHI

1

99.4

92

1.7

1

97.0

92

1.5

Residence-82 Esty Maison TETSUGAKUDO

1

97.6

34

0.6

1

80.6

30

0.5

Residence-21

Esty Maison MEGUROHONCHO

1

100.0

34

0.6

1

96.9

32

0.5

Residence-22

Esty Maison HAKURAKU

1

96.5

30

0.5

1

98.2

30

0.5

Residence-23

Esty Maison MINAMIHORIE

1

97.2

35

0.6

1

98.6

35

0.6

Residence-24

Esty Maison GOTANDA

1

94.6

90

1.6

1

96.0

92

1.5

Residence-25

Esty Maison OISENDAIZAKA

1

96.1

80

1.4

1

99.2

80

1.3

Residence-26

Esty Maison SHINAGAWA SEASIDE

1

96.7

65

1.2

1

98.2

64

1.1

Residence-27

Esty Maison MINAMIAZABU

1

96.2

35

0.6

1

98.1

35

0.6

Residence-28

Esty Maison JOTO

1

90.7

33

0.6

1

97.0

32

0.5

Residence-29

Esty Maison TSUKAMOTO

1

96.9

40

0.7

1

88.5

37

0.6

Residence-30

Esty Maison KAWASAKI II

1

96.0

63

1.1

1

96.1

67

1.1

Residence-31

Esty Maison AZABUJUBAN

1

96.8

66

1.2

1

100.0

67

1.1

Residence-33

Esty Maison ITABASHIHONCHO

1

93.8

28

0.5

1

95.4

29

0.5

Residence-34

Esty Maison OIZUMIGAKUEN

1

94.6

26

0.5

1

91.2

24

0.4

Residence-35

Esty Maison TENJINHIGASHI I

1

97.8

15

0.3

1

97.8

15

0.3

Residence-36

Esty Maison TENJINHIGASHI II

1

96.3

27

0.5

1

98.8

27

0.4

Residence-37

Esty Maison SHIJONISHINOTOIN

1

100.0

40

0.7

1

97.8

46

0.8

Residence-39

Esty Maison HIGASHISHINAGAWA

1

96.1

71

1.3

1

97.6

72

1.2

Residence-40

Esty Maison HACHIOJIMINAMINO

1

94.2

31

0.6

1

98.8

33

0.5

Residence-41

Esty Maison NISHINAKAJIMA

1

92.9

66

1.2

1

91.5

61

1.0

Residence-42

Esty Maison ITABASHIKUYAKUSHOMAE

1

91.9

78

1.4

1

92.8

73

1.2

Residence-43

Esty Maison MUSASHIKOYAMA

1

100.0

30

0.5

1

97.4

31

Residence-44

Esty Maison SENDAGI

1

97.6

21

0.4

1

97.7

22

Residence-45

Esty Maison YOTSUYASAKAMACHI

1

85.1

56

1.0

1

98.1

Residence-46

Esty Maison HAKATAHIGASHI

1

98.4

82

1.5

1

Residence-47

Esty Maison KAMIGOFUKU

1

97.0

26

0.5

Residence-48

Esty Maison SANGENJAYA

1

97.3

23

0.4

Residence-50

Prime Maison MUSASHINONOMORI

1

93.2

63

Residence-51

Prime Maison HIGASHISAKURA

1

95.0

Residence-52

Prime Maison KAYABAKOEN

1Residence-53

Esty Maison SANGENJAYA IIResidence-54

Esty Maison ITABASHI C6Residence-55

Residence

Residence-8
Residence-10

Residence-83 Esty Maison KOENJI

1

89.1

31

0.6

1

96.7

30

0.5

Residence-84 Esty Maison OSHIAGE

1

95.9

68

1.2

1

96.7

69

1.1

Residence-85 Esty Maison AKABANE

1

97.6

94

1.7

1

98.8

96

1.6

Residence-86 Esty Maison OJI

1

94.4

46

0.8

1

94.0

46

0.8

Residence-87 Prime Maison WASEDA

1

98.5

42

0.8

1

97.6

42

0.7

Residence-88 Prime Maison HATCHOBORI

1

100.0

37

0.7

1

93.2

38

0.6

Residence-89 Prime Maison JINBOCHO

1

93.6

49

0.9

1

98.6

53

0.9

Residence-90 Prime Maison GOTENYAMA EAST

1

100.0

72

1.3

1

92.2

75

1.2

Residence-91 MAST LIFE AKIHABARA

1

100.0

15

0.3

1

100.0

15

0.2

Residence-92 Esty Maison AOI

1

94.8

72

1.3

1

94.5

77

1.3

Residence-93 Esty Maison YAKUIN

1

94.0

73

1.3

1

96.7

74

1.2

Residence-94 Esty Maison KINSHICHO II

1

94.1

170

3.0

1

95.2

210

3.4

Residence-95 Esty Maison OJIMA

1

94.9

192

3.4

1

98.8

239

3.9

Residence-96 Prime Maison FUJIMIDAI

1

92.2

56

1.0

1

88.7

68

1.1

Residence-97 Esty Maison TSURUMAI

1

100.0

129

2.3

1

100.0

155

2.5

Residence-98 Prime Maison MORISHITA

-

-

-

-

1

97.7

44

0.7

Residence-99 Prime Maison SHINAGAWA

-

-

-

-

1

97.3

42

0.7

Residence-100 Prime Maison ODORI KOEN

-

-

-

-

1

94.1

93

1.5

Residence-101 Prime Maison MINAMI 2-JO

-

-

-

-

1

98.3

52

0.9

Residence-102 Prime Maison KAMOKAMOGAWA

-

-

-

-

1

98.0

35

0.6

Residence-103 Prime Maison CENTRAL PARK

-

-

-

1

91.4

70

1.1

0.5

-

Residence-104 MAST LIFE YAHIRO

-

-

-

-

1

100.0

45

0.7

0.4

Residence-105 Prime Maison EBISU

-

-

-

-

1

99.0

45

0.7

54

0.9

Residence-106 Esty Maison SHIBAURA

-

-

-

-

1

95.8

0

0.0

98.9

85

1.4

Residence subtotal

91

96.3

4,990

89.3

100

96.7

5,570

90.8

1

97.0

28

0.5

Retail-1

HAMAMATSU Plaza

4

100.0

109

2.0

4

100.0

100

1.6

1

100.0

24

0.4

Retail-2

b-town JINGUMAE II

1

100.0

24

0.4

-

-

0

0.0

1.1

1

97.6

63

1.0

Retail-3

RINKU HAGURAZAKI Plaza

3

100.0

182

3.3

3

100.0

182

3.0

50

0.9

1

97.3

53

0.9

Retail-4

b-town MINAMIAOYAMA

1

92.3

33

0.6

1

100.0

32

0.5

100.0

29

0.5

1

100.0

29

0.5

Retail-5

KOJIMA × BIC CAMERA Kamifukuoka store

1

100.0

48

0.9

1

100.0

48

0.8

1

91.1

23

0.4

1

100.0

23

0.4

Retail-7

b-toss IKEBUKURO

1

100.0

60

1.1

1

100.0

64

1.1

1

94.5

78

1.4

1

94.6

77

1.3

Retail-8

Joy Square YUGAWARA

1

100.0

86

1.6

1

100.0

80

1.3

MAST HAKATA

1

100.0

93

1.7

1

100.0

93

1.5

Retail-9

Bell Plaza Shopping Center

1

100.0

55

1.0

1

100.0

54

0.9

Residence-56

Esty Maison KINSHICHO

1

95.8

35

0.6

1

97.3

35

0.6

13

99.9

600

10.7

12

100.0

564

9.2

Residence-57

Esty Maison MUSASHIKOGANEI

1

90.2

51

0.9

1

93.2

53

0.9

104

97.1

5,591

100.0

112

97.4

6,134

100.0

Residence-58

Prime Maison GOKISO

1

98.3

65

1.2

1

90.7

64

1.1

Residence-59

Prime Maison YUHIGAOKA

1

87.7

27

0.5

1

100.0

30

0.5

Residence-60

Prime Maison KITATANABE

1

92.0

22

0.4

1

100.0

23

0.4

Residence-61

Prime Maison MOMOCHIHAMA

1

100.0

68

1.2

1

100.0

68

1.1

Other Real Estate in Trust (Retail property)

Residence

Use Property No.

Occupancy
Rental Revenue
Number ofthroughout
Tenants at End Ratio at End of
PeriodPeriodof Period(Note 2) (%)(Note 1)(million yen)

Use Property No.

19th Fiscal Period (Oct. 1, 2014 – Mar. 31, 2015)

Other real estate in trust (Retail property) subtotal
Total(Note 1) The “Number of Tenants” indicates the number of lessees (including master-lease companies) that are in direct lease agreement with the trustees for each asset already acquired as of the end of fiscal period. Furthermore, the “Master-lease
Company” represents the lessee that has concluded a lease agreement for the entire building with the Investment Corporation or the trustee for the purpose of subleasing the property to third parties.
(Note 2) Of the properties that are subleased by the lessees to sublessees, for those from which the Investment Corporation receives rents that may vary depending on the leasing status to the sublessees, the indicated occupancy ratio is based on theoccupancy status of the sublessees (the ratio of the leased floor area to the leasable floor area at the end of the relevant calculation period).

20

Sekisui House SI Residential Investment Corporation

Financial Section (Audited)
7. Capital Expenditures in the 19th Fiscal Period
The following are the overview of works that fall under the category of the capital expenditures the Investment Corporation conducted in real estate in trust in
the 19th fiscal period. In addition, the capital expenditure for the fiscal period under review totaled 153 million yen. Combining this with the 165 million yen in
repair expenses, which were classified as expenses for the fiscal period, the Investment Corporation conducted construction of 318 million yen.
Real Estate Property Name (Location)

PurposeExpenditures(million yen)

PeriodJoy Square YUGAWARA(Ashigarashimo-gun, Kanagawa)

Water-proofing of roof top

From: January 2015
To: March 2015

27

Esty Maison SHIROKANEDAI(Shinagawa-ku, Tokyo)

Renewal of common areas

From December 2014
To: March 2015

24

Esty Maison OJIMA and other 5 properties(Koto-ku, Tokyo and others)

Installation of LEDs for the lighting equipment ofcommon areas

From: October 2014
To: November 2014

19

Esty Maison SHINKAWASAKI(Kawasaki-shi, Kanagawa)

Replacement of electric water heaters

From: November 2014
To: December 2014

11

Others

69
153

Total

8. Transactions with Interested Parties, Etc.

Contents(1) Transaction Status

Financial Statements
Balance Sheet 23
Statement of Income and Retained Earnings  25
Statement of Changes in Net Assets 26Statement of Cash Distributions
 27
Statement of Cash Flows 28
Notes to Financial Statements 29
Independent Auditor’s Report 50

Transaction Amount, Etc.

Category
Total Amount

Purchase Amount, Etc.

Sale Amount, Etc.

18,715,000 thousand yen

1,200,000 thousand yen

13,200,000 thousand yen (70.5%)―

1,670,000 thousand yen ( 8.9%)―

14,870,000 thousand yen (79.5%)―

Breakdown of Transactions with Interested Parties, Etc.
Sekisui House Ltd.
Sekiwa Real Estate Ltd.
Total

(2) Amount of Fees, Etc.

Category

Property Management Fees

Brokerage Fees

Total Fees, Etc.
(A) (thousand yen)

415,728

132,524

Breakdown of Transactions with Interested Parties, Etc.
Paid Party

Paid Amount(B) (thousand yen)

Ratio to Total Amount(B/A) (%)

Sekiwa Real Estate Ltd.

195,640

47.1

Sekiwa Real Estate Chubu, Ltd.

45,757

11.0

Sekiwa Real Estate Kansai, Ltd.

25,391

6.1

Sekiwa Real Estate Kyushu, Ltd.

16,285

3.9

Sekiwa Real Estate Ltd.

78,684

59.4

Sekiwa Real Estate Chubu, Ltd.

5,855

4.4

Sekiwa Real Estate Kansai, Ltd.

5,308

4.0

Sekiwa Real Estate Kyushu, Ltd.

1,120

0.8

(Note) Interested parties, etc. refers to the interested parties of the asset management company and is designated in Article 123 of the Enforcement Order of the Act on Investment Trusts and Investment Corporations and Article 26-1-27 of the regulation
on management reports in investment trusts and investment corporations of the Investment Trusts Association, Japan.

21

22Sekisui House SI Residential Investment Corporation

Financial Statements

18th Fiscal Period(As of September 30, 2014)(1) Balance Sheet

18th Fiscal Period(As of September 30, 2014)(Thousand yen)

19th Fiscal Period(As of March 31, 2015)

AssetsCurrent assets

Cash and deposits

Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Deferred tax assets

Consumption taxes receivable
Other

Allowance for doubtful accounts
Total current assets

Non-current assets

Property, plant and equipment
Buildings in trust

Accumulated depreciation
Buildings in trust, net

Structures in trust

4,769,531
145,036

137,101
99
69,086912(1,681)

8,715,737

82,643,364

2,941,105

5,128,664
177,233

139,619132
39,852392(1,965)8,425,035

91,755,319(10,188,991)(11,426,535)

594,179

709,720

72,454,373

80,328,783

Liabilities

Current liabilities

Operating accounts payable

Short-term loans payable
Current portion of long-term loans payable
Accounts payable – otherAccrued expenses
Income taxes payable
Advances received
Other

Total non-current liabilities

79,413,307

91,995,324

Tenant leasehold and security deposits in trust
Total liabilities

Net assets

Unitholders’ capital

Total unitholders’ equity

970,626

1,351,662

Total liabilities and net assets(44,439)(51,990)

93,263,002

102,216,751

154,055

152,037

155,220

153,438

235,682

235,667

697,613778,288

Tools, furniture and fixtures in trust
Accumulated depreciation

Tools, furniture and fixtures in trust, net

Land in trust

Total property, plant and equipment

Intangible assets
Leasehold rights in trust
Trademark rights
Other

Total intangible assets

Investments and other assets
Lease and guarantee deposits
Long-term prepaid expenses
Other

Total investments and other assets

Total non-current assets

102,935

58,496167,199,543

1,164

341,576
120,354

135,744

82,379Total deferred assets

124,876

149,582

176,892,990

79,059,711

88,925,149

1,950,792

2,302,778

Total surplus

81,010,504

91,227,928

Total net assets

176,892,990

194,035,963

1,950,792

81,010,504

2,302,778

91,227,928

See accompanying “Notes to the Financial Statements”.

417,468
125,152

89,884

Total assets

102,808,035

865
535

Investment corporation bond issuance costs

34,991

95,882,486

184,529,619

185,461,345

Investment unit issuance costs

2,385,824

83,753

168,052,377

Deferred assets

2,303,807

Unitholders’ equity

1,733,045(381,382)

13,12814,500,000
75,109,500

1,292,569(321,942)

12,782

14,500,000
62,609,500

Machinery and equipment in trust
Machinery and equipment in trust, net

2,545
286,678

538,448
58,090Investment corporation bonds
Long-term loans payableNon-current liabilities(161,054)

Accumulated depreciation

2,079
303,927

446,304
64,192

10,812,711(141,133)

548,666

413,818

3,850,000
5,650,000

16,469,179

Accumulated depreciation

453,045289,892

8,700,000
6,650,000

Total current liabilities

Surplus
Unappropriated retained earnings

Structures in trust, net

233,595,652(Thousand yen)

19th Fiscal Period(As of March 31, 2015)

67,202

194,035,963

24

Sekisui House SI Residential Investment Corporation(2) Statement of Income and Retained Earnings(3) Statement of Changes in Net Assets(Thousand yen)
19th Fiscal Period(October 1, 2014 –March 31, 2015)

18th Fiscal Period(April 1, 2014 –September 30, 2014)
Operating revenue

Rent revenue - real estate
Gain on sale of real estate properties

5,591,570-

Total operating revenue

5,591,570

Expenses related to rent business

2,560,551

Operating expenses

Asset management fee
Asset custody fee

Administrative service fees
Directors’ compensations
Provision of allowance for doubtful accounts
Other operating expenses
Total operating expenses

Operating income

Non-operating income
Interest income

Reversal of distributions payable
Interest on tax refund
Other

Total non-operating income

Non-operating expenses

Interest expenses
Interest expenses on investment corporationbonds
Amortization of investment corporation bondissuance costs
Borrowing related expenses

Amortization of investment unit issuance costs
Other
Total non-operating expenses

Ordinary income

Income before income taxes
Income taxes - current

Income taxes - deferred
Total income taxes
Net income

Retained earnings brought forward
Unappropriated retained earnings

360,826
13,752
31,1163,600

1,387
156,425

6,134,681
152,133
6,286,815
2,835,075

417,097
14,751
33,9403,600

467
167,141

3,127,659

3,472,074

770

863

2,463,911

220
12
160

2,814,740

1,129

390,80245,969371,253
56,058

6,491

7,505

62,64562,345512,115

13,547
108

510,820

1,952,959

2,305,049

2,236

2,721

1,952,959

(15)

2,220

2,305,049

Balance as of April 1,
2014
Changes of items during
the fiscal period
Issuance of new
investment units

Surplus

Unitholders’capitalUnappropriatedretainedearnings

Total surplus

68,294,216

1,765,604

1,765,604

10,765,494

Total unitholders’ Total Net Assets
equity70,059,821

70,059,821

10,765,494

10,765,494

Distribution from surplus(1,765,550)(1,765,550)(1,765,550)(1,765,550)

Net Income

1,950,739

1,950,739

1,950,739

1,950,739

10,765,494

185,188

185,188

10,950,682

10,950,682

79,059,711

1,950,792

1,950,792

81,010,504

81,010,504

Total changes of items
during the fiscal period
Balance as of September
30, 2014

19th fiscal period (from October 1, 2014 to March 31, 2015)(Thousand yen)

Unitholders’ equity

Balance as of October 1,
2014
Changes of items during
the fiscal period
Issuance of new
investment units

Surplus

Unitholders’capitalUnappropriatedretainedearnings

Total surplus

79,059,711

1,950,792

1,950,792

9,865,438

Total unitholders’ Total Net Assets
equity81,010,504

81,010,504

9,865,438

9,865,438

Distribution from surplus(1,950,376)(1,950,376)(1,950,376)(1,950,376)

Net Income

2,302,362

2,302,362

2,302,362

2,302,362

9,865,438

351,985

351,985

10,217,424

10,217,424

88,925,149

2,302,778

2,302,778

91,227,928

91,227,928

Total changes of items
during the fiscal period
Balance as of March 31,
2015

(33)

2,687

1,950,739

2,302,362

1,950,792

2,302,778

53(Thousand yen)

Unitholders’ equity

226
39
－

1,163

6,113
93

18th fiscal period (from April 1, 2014 to September 30, 2014)416

See accompanying “Notes to the Financial Statements”.

25

26

Sekisui House SI Residential Investment Corporation(4) Statement of Cash Distributions
Item
I. Unappropriated retained earnings
II. Cash distributions(Cash distributions per unit)(5) Statement of Cash Flows

18th Fiscal Period(April 1, 2014 – September 30, 2014)

19th Fiscal Period(October 1, 2014 – March 31, 2015)

1,950,792,909 yen

2,302,778,596 yen(2,131 yen)

(2,185 yen)

1,950,376,440 yen

2,224,570,350 yen

III. Voluntary retained earnings
Provision for reserve for reduction
entry

IV. Retained earnings brought forward
Method for calculating cash
distributions

Cash flows from operating activities
Income before income taxes
Depreciation

Amortization of investment corporation bond issuance-

77,988,021 yen

416,469 yen

220,225 yen

As provided in Article 34-1-2 of its

Articlesof
Incorporation,
theInvestment Corporation makes it abasic policy to make cash distributions
in excess of the amount equivalent to

90% of the distributable income
amount as stipulated in Article 67-15 of
the Act on Special Measures
Concerning Taxation. Following thispolicy, and in consideration of the factthatindividual
unitholder
must

calculate the capital gains or losses forthe cash distributions in excess ofearnings
whentheInvestment
Corporation distributes cash in excessof earnings as stipulated in Article
34-1-4 of its Articles of Incorporation,

the Investment Corporation distributed
1,950,376,440 yen, which is the entire
amount of the unappropriated retained
earnings excluding the fractions lessthan one yen per investment unit, as
distribution of earnings.

As provided in Article 34-1-2 of its

Articlesof
Incorporation,
theInvestment Corporation makes it abasic policy to make cash distributions
in excess of the amount equivalent to

90% of the distributable income
amount as stipulated in Article 67-15 of
the Act on Special Measures
Concerning Taxation. Following thispolicy, and in consideration of the factthatindividual
unitholder
must
calculate the capital gains or losses forthe cash distributions in excess ofearnings
whentheInvestment
Corporation distributes cash in excessof earnings as stipulated in Article
34-1-4 of its Articles of Incorporation,

the Investment Corporation distributed
2,224,570,350 yen, which is the entire

amount of the unappropriated retained
earnings after deducting the provision

for reserve for reduction entry, as
stipulated in Article 66-2 of the Act on
SpecialMeasures
Concerning
Taxation, and excluding the fractions
less than one yen per investment unit.

(Thousand yen)

18th Fiscal Period(April 1, 2014 –September 30, 2014)

costs

Amortization of investment unit issuance costs

Increase (decrease) in allowance for doubtful accounts
Interest income

Interest expenses

Decrease (increase) in operating accounts receivable
Decrease (increase) in prepaid expenses

Decrease (increase) in consumption taxes receivable
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable - other
Increase (decrease) in advances received

Decrease due to sale of property, plant and equipmentin trust

Decrease (increase) in long-term prepaid expenses
Other, net
Subtotal

19th Fiscal Period(October 1, 2014 –March 31, 2015)

1,952,959
1,253,358

2,305,049
1,370,428

6,113
811

13,547
283

6,491

(770)
436,771

7,505

(863)
427,312

14,550(17,820)(32,197)
16,166

46,90545,58864,100(17,248)(55,600)(9,730)29,234104,169-

1,013,276(44,472)(17,565)(94,576)639

3,617,591

5,206,827

Interest expenses paid

770(442,406)

Net cash provided by operating activities

3,173,793

4,772,022(20,382,717)-(19,664,034)(1,084)

Repayments of tenant leasehold and security deposits(169,690)(175,589)

Decrease (increase) in investments and other assets,(4,904)(4,782)(20,051,459)(19,587,884)

Interest income received
Income taxes paid

Cash flows from investing activities

Purchase of property, plant and equipment in trust
Purchase of intangible assets

Proceeds from tenant leasehold and security deposits
in trust
in trust
net

Net cash used in investing activities
Cash flows from financing activities

Proceeds from short-term loans payable

Repayments of short-term loans payable
Proceeds from long-term loans payable

Repayments of long-term loans payable

Proceeds from issuance of investment corporation
bonds

Proceeds from issuance of investment units
Dividends paid

Net cash provided by financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of period
Cash and cash equivalents at the end of period(2,161)

505,853

8,700,000(3,300,000)
9,800,000(9,509,000)
2,976,428
10,724,389(1,765,719)
17,626,098

748,432

7,616,751

8,365,184

863(433,413)(2,255)

257,606

3,850,000(8,700,000)
18,150,000(6,650,000)
9,819,679(1,949,232)
14,520,447(295,414)

8,365,184
8,069,769

See accompanying “Notes to the Financial Statements”.

27

28

Sekisui House SI Residential Investment Corporation

Notes to Financial Statements
1. Organization
Sekisui House SI Residential Investment Corporation (the “Investment Corporation”), formerly Sekisui House
SI Investment Corporation, is a Japanese real estate investment corporation established in April 2005 underthe Act on Investment Trusts and Investment Corporations (the “Investment Trusts Act”) and listed on theTokyo Stock Exchange in July 2005. Since March 2010, it has been sponsored by Sekisui House, Ltd., aleading company in the housing industry, and Spring Investment Co., Ltd., an international fund manager, andhas worked to establish a stable portfolio primarily comprising residential properties. In June 2014, theInvestment Corporation changed its name to the present one to demonstrate its new strategy of solely
investing in real properties that are mainly used as residences while removing retail properties, which had
previously been identified as a supplementary investment target, from its investment horizons. The Investment
Corporation is externally managed by a licensed asset management company, Sekisui House SI AssetManagement, Ltd.

2. Basis of Presentation
The Investment Corporation maintains its accounting records and prepares its financial statements inaccordance with accounting principles generally accepted in Japan (“Japanese GAAP”), including provisions
set forth in the Financial Instruments and Exchange Act, the Investment Trusts Act, the Companies Act and therelated regulations, which are different in certain respects as to the application and disclosure requirements ofInternational Financial Reporting Standards.
The accompanying financial statements are basically a translation of the financial statements of the Investment
Corporation, which were prepared in accordance with Japanese GAAP and were presented in its Securities
Report filed with the Kanto Local Finance Bureau. In preparing the accompanying financial statements, certain
reclassifications and modifications have been made to the financial statements issued domestically in order topresent them in a format which is more familiar to readers outside Japan. In addition, the notes to financial
statements include certain information which might not be required under Japanese GAAP but is presented
herein as additional information.
The Investment Corporation’s fiscal period is a six-month period, which ends at the end of March and
September of each year. The Investment Corporation does not prepare consolidated financial statements as it
has no subsidiaries.
Unless otherwise specified, amounts have been rounded down to the nearest thousand yen in theaccompanying financial statements and the notes thereto. As a result, the total shown in the financial
statements and notes thereto do not necessarily agree with the sum of the individual account balances.

3. Summary of Significant Accounting Policies
1. Depreciation method for
non-current assets

2. Accounting for deferredassets29(1) Property, plant and equipment
 Depreciation is calculated using the straight-line method.
 The estimated useful lives of major property, plant and equipment are as
follows:
Buildings in trust3 – 66 years
Structures in trust3 – 36 years
Machinery and equipment in trust3 – 29 years
Tools, furniture and fixtures in trust2 – 15 years(2) Intangible assets
Intangible assets are amortized utilizing the straight-line method.
Leasehold rights in trust are amortized on a straight-line basis over theremaining life of each contract.
(1) Investment corporation bond issuance costs
Investment corporation bond issuance costs are amortized utilizing thestraight-line method over the redemption periods.
(2) Investment unit issuance costs
Investment unit issuance costs are amortized utilizing the straight-line
method (over 3 years).

3. Standards for recording
allowance

Allowance for doubtful accountsFor allowance for doubtful accounts against possible losses arising fromdefault on receivables, uncollectable amount is estimated and recorded
by investigating collectability on a case-by-case examination for doubtful
and other specific receivables.
4. Standards for recording
Accounting treatment of property taxes, etc.

Property taxes, city planning taxes and depreciable asset taxes
revenues and expenses(“property taxes, etc.”) assessed for the real estate owned by theInvestment Corporation are charged to income at an amountattributable to each fiscal period as expenses related to rent business.
Property taxes etc. that the Investment Corporation pays to the seller inconnection with purchase of real estate (including trust beneficiaryinterests in real estate as entrusted property) as they are deemed to be
attributable to the Investment Corporation are included in theacquisition cost of the acquired real estate, instead of expenses.
Property taxes, etc. capitalized as a part of the acquisition cost
amounted to 55,017 thousand yen for the 18th fiscal period and 17,432
thousand yen for the 19th fiscal period, respectively.
5. Method of hedge accounting (1) Method of hedge accounting
 Special accounting is applied for interest rate swap transactions.
(2) Hedging instruments and hedged items
 Hedging instrument: interest rate swap transactions
 Hedged items: interest expenses on loans payable(3) Hedging policyBased on its basic policy for risk management, the Investment
Corporation utilizes derivative transactions in order to hedge risks
designated in its Articles of Incorporation.
(4) Method for assessing the effectiveness of hedging
 Assessment of the effectiveness of hedging is omitted as requirements
are satisfied for special accounting for interest rate swap transactions.
6. Scope of funds (cash and
The funds (cash and cash equivalents) in the statements of cash flows
cash equivalents) in theconsist of cash on hand and cash in trust; deposits that can be withdrawn atstatement of cash flows
any time and deposits in trust; and short-term investments with a maturity of 3
months or less from the date of acquisition, which are readily convertible tocash and bear only an insignificant risk of value fluctuation.
7. Other significant items(1) Accounting methods for trust beneficiary interests in real estate, etc. as
fundamental to preparing
entrusted property
the financial statements
Regarding trust beneficiary interests in real estate, etc. as entrusted
property, all asset and liability accounts of the entrusted properties aswell as all revenue and expense accounts generated by the entrusted
properties are recorded in relevant accounts on the balance sheet andstatement of income.
Furthermore, the following accounts are considered material and thusstated separately in the balance sheet related to entrusted properties
from the relevant accounts.
1) Cash and deposits in trust2) Buildings in trust, structures in trust, machinery and equipment intrust, tools, furniture and fixtures in trust and land in trust3) Leasehold rights in trust4) Tenant leasehold and security deposits in trust(2) Accounting for consumption taxes
National and local consumption taxes are excluded from the transaction
amounts. Non-deductible consumption taxes for acquisition of assets areincluded in the acquisition cost of each asset.

30

Sekisui House SI Residential Investment Corporation

4. Note to Balance Sheet

6. Notes to Statement of Changes in Net Assets

Minimum total net assets designated in Article 67-4 of the Investment Trusts Act
18th Fiscal Period(As of September 30, 2014)

19th Fiscal Period(As of March 31, 2015)
50,00050,000Total number of investment units issued

Breakdown of real estate rental revenues and expenses

A. Real estate rental revenues

Total number of authorized investment
units and total number of investment units
issuedTotal number of authorized investment units

5. Notes to Statement of Income and Retained Earnings

18th Fiscal Period(April 1, 2014 –September 30, 2014)

18th Fiscal Period(April 1, 2014 –September 30, 2014)(Thousand yen)(Thousand yen)

19th Fiscal Period(October 1, 2014 –March 31, 2015)

Other revenue
Total real estate rental revenue

5,386,820

5,911,526

204,749

223,1545,591,570

6,134,681

B. Real estate rental expenses
Expenses related to rent businessOutsourcing expenses

496,630

559,345

Utilities expenses

111,148

123,823

Insurance expenses

6,448

6,670

Repair expenses

135,879

165,718

Property and other taxes

288,457

287,329

Trust fees

45,03845,247

Other

224,210277,351

1,252,737

1,369,589

2,560,551

2,835,075

3,031,018

3,299,606

Depreciation
Total real estate rental expenses
C. Real estate rental revenues andexpenses (A – B)

915,240 units

1,018,110 units(Thousand yen)
19th Fiscal Period(October 1, 2014 –March 31, 2015)

18th Fiscal Period(April 1, 2014 –September 30, 2014)
Cash and deposits

3,595,652

2,941,105

Cash and cash equivalents

8,365,184

8,069,769

Cash and deposits in trust

4,769,531

5,128,664

8. Lease Transactions
Operating lease transactions as lessee
Future lease payable equivalents

18th Fiscal Period(As of September 30, 2014)(Thousand yen)

19th Fiscal Period(As of March 31, 2015)

Due within one year

23,82024,588Due after one year

885,310

901,560

Total

909,130

926,148

Operating lease transactions as lessor

Breakdown of gain on sale of real estate properties
Not applicable

10,000,000 units

Reconciliation of the Cash and cash equivalents at the end of period in the statement of cash flows with thecorresponding accounts on the balance sheet

Future lease receivable equivalents

18th Fiscal Period (from April 1, 2014 to September 30, 2014)

10,000,000 units

7. Notes to Statement of Cash Flows

Rent revenue - real estate
Rents

19th Fiscal Period(October 1, 2014 –March 31, 2015)

18th Fiscal Period(As of September 30, 2014)(Thousand yen)

19th Fiscal Period(As of March 31, 2015)

Due within one year

1,205,298

1,402,092

Due after one year

2,610,294

2,723,965

Total

3,815,592

4,126,058

19th Fiscal Period (from October 1, 2014 to March 31, 2015)(Thousand yen)b-town JINGUMAE II
Revenue from sale of real estate
Cost of real estate sold
Other sale expenses

Gain on sale of real estate properties

31

1,013,276

34,5901,200,000
1,047,866
152,133

32

Sekisui House SI Residential Investment Corporation

9. Financial Instruments
1. Matters Concerning Status of Financial Instruments(1) Policy on Handling Financial Instruments
The Investment Corporation raises necessary funds (through additional issuance of investment units,
borrowings and issuance of investment corporation bonds) in light of its financial plans and surplus fundmanagement plans. With regard to surplus fund management, the Investment Corporation focuses onsafety and liquidity, and manages them as interest-bearing ordinary bank deposits or short-term time
deposits in order to avoid market risks as much as possible. As for derivative transactions, the Investment
Corporation may use them to hedge against interest rate fluctuation risks, and will not conduct any
speculative transactions.
(2) Description of Financial Instruments and Associated Risks, and Risk Management Structure
Operating accounts receivable are exposed to credit risks of customers. In order to mitigate such risks, theInvestment Corporation works to select tenants by taking into account the tenants’ credibility and has
established a management system for controlling the status of rent payment.
Lease and guarantee deposits from rental properties are exposed to credit risks of the companies to dobusiness with. In order to mitigate such risks, the Investment Corporation works to periodically grasp thefinancial conditions, etc. of such companies.
The possibility, conditions and subsequent burden of interest payments for borrowings and issuance ofinvestment corporation bonds are impacted by the interest rate situations and other factors. Thus, there is
no guarantee that the Investment Corporation can successfully make borrowings or issue investment
corporation bonds at a time when and under the conditions that it prefers. In addition, if borrowings are
made at floating interest rates, interest payments may increase due to later fluctuations in the interest
rates. Depending on the lending attitude of financial institutions, new borrowings may not be possible or
the Investment Corporation may have to borrow funds under disadvantageous conditions in terms ofinterest rates, collateral provision and financial covenants, etc.
Concerning the market risks (interest rate fluctuation risk, etc.) related to the above-mentioned borrowings
and investment corporation bonds, the Investment Corporation works to mitigate them in accordance with
the Derivative Transactions Handling and Risk Management Regulations, an internal rule designated by
the Asset Management Company.
Moreover, for the management of liquidity risk related to fund raising (risk of failing to execute repaymenton the repayment dates), the department in charge at the Asset Management Company prepares andupdates cash flow plans in a timely manner based on reports from its respective departments. The liquidity
risk is also managed by such measures as maintaining liquidity on hand at a certain level.
(3) Supplementary Explanation on Matters Concerning Fair Value, etc. of Financial Instruments
The fair value of financial instruments, aside from values based on market price, include values based onreasonable calculations when there is no market price. Certain variable factors are adopted in calculating
those values, and there may be cases where the values will vary when different assumptions are adopted.
As for the contract value and other conditions of derivative transactions indicated in “2. Matters Concerning
Fair Value, Etc. of Financial Instruments”, the value itself is not an indicator showing the market risks
related to such transactions.

2. Matters Concerning Fair Value, Etc. of Financial Instruments
The following are the book values recorded on the balance sheet, fair values and the difference between
these amounts. The following tables do not include those for which determining the fair value is recognized to
be extremely difficult.
18th Fiscal Period (As of September 30, 2014)
Book Value Recordedon the Balance Sheet(Thousand yen)
Fair Value

Difference(1) Cash and deposits

3,595,652

3,595,652-(2) Cash and deposits in trust

4,769,531

4,769,531-

145,036

145,036-(1,681)(1,681)-

143,354

143,354-8,508,538

8,508,538-(4) Operating accounts payable

289,892

289,892-(5) Short-term loans payable

8,700,000

8,700,000-(6) Current portion of long-term loans
payable6,650,000

6,654,571

4,571(7) Investment corporation bonds

14,500,000

14,141,843(358,156)(8) Long-term loans payable

62,609,500

62,576,856(32,643)

Total of liabilities

92,749,392

92,363,163(386,229)---(3) Operating accounts receivable
Allowance for doubtful accounts

Total of assets(9) Derivative transactions

19th Fiscal Period (As of March 31, 2015)
Book Value Recordedon the Balance Sheet (Thousand yen)
Fair Value

Difference(1) Cash and deposits

2,941,105

2,941,105-(2) Cash and deposits in trust

5,128,664

5,128,664-

177,233

177,233-(1,965)(1,965)-

175,268

175,268-

8,245,038

8,245,038-(4) Operating accounts payable

413,818

413,818-(5) Short-term loans payable

3,850,000

3,850,000-(6) Current portion of long-term loans
payable5,650,000

5,681,529

31,529(7) Investment corporation bonds

14,500,000

14,314,837(185,162)(8) Long-term loans payable

75,109,500

75,127,767

18,267

Total of liabilities

99,523,318

99,387,952(135,365)---(3) Operating accounts receivable
Allowance for doubtful accounts

Total of assets(9) Derivative transactions(Note 1) Calculation method for fair value of financial instruments and matters concerning derivative transactions(1) Cash and deposits, (2) Cash and deposits in trust and (3) Operating accounts receivable33

34

Sekisui House SI Residential Investment Corporation

As these are settled within a short period of time, the fair value is approximately the same as the book value

and is thus stated at that book value.
In calculating the fair value of operating accounts receivable, it is difficult to determine the credit risk

(Note 3) Scheduled redemption and repayment amount of investment corporation bonds and borrowings
18th Fiscal Period (As of September 30, 2014)individually. Accordingly, allowance for doubtful accounts is deemed as credit risk.
(4) Operating accounts payable and (5) Short-term loans payable

As these are settled within a short period of time, the fair value is approximately the same as the book value
and is thus stated at that book value.
(6) Current portion of long-term loans payable and (8) Long-term loans payable
The fair value of those with floating interest rates is based on the book value, as it reflects the market interest
rate within a short period of time and thus is considered to be nearly equal to the book value. (However, thefair value of certain long-term loans payable with floating interest rates that qualifies for the special
accounting of interest rate swaps [see Note “11. Derivative Transactions”] is based on the method of

calculating by discounting the sum of its principal and interest payments net of any cash flows from theinterest-rate swap by a reasonably estimated rate assumed as being applicable to a new similar borrowing to

Due in 1 Yearor Less(1) Short-term loans
payable(2) Investment
corporation bonds(3) Long-term loans
payableTotal of liabilities

As the investment corporation bonds of the Investment Corporation are traded over the counter throughnegotiations, it is difficult to indicate the fair value as the market price. The present value is based on themethod of calculating by discounting the combined total of principal and interest by a reasonably estimatedrate assumed as being applicable to a similar bond issuance.

(9) Derivative transactions
See Note “11. Derivative Transactions.”

18th Fiscal Period (As of September 30, 2014)
Due after 1
Due after 2
Due after 3
Due after 4
Due in 1 Year 
year through Years through Years through Years throughor Less
2 Years
3 Years
4 Years
5 Years
3,595,652
4,769,531

145,036
8,510,220

5,128,664
177,233
8,247,003

4,000,000

2,500,000

8,000,000

6,650,000

2,850,000

12,205,000

4,600,000

8,382,000

34,572,500

15,350,000

2,850,000

12,205,000

8,600,000

10,882,000

42,572,500

Due in 1 Yearor Less(1) Short-term loans
payable(2) Investment
corporation bonds(3) Long-term loans
payableTotal of liabilities

3,850,000

  (Thousand yen)
Due after 1
Due after 2
Due after 3
Due after 4
Due after
year through Years through Years through Years through5 Years
2 Years
3 Years
4 Years
5 Years---

4,000,000

2,500,000

2,000,000

6,000,000

5,650,000

9,500,000

4,805,000

10,882,000

6,792,500

43,130,000

9,500,000

9,500,000

8,805,000

13,382,000

8,792,500

49,130,000

 Category

Due after
5 Years(1) Lease and guarantee deposits

18th Fiscal Period(As of September 30, 2014)(2) Tenant leasehold and security

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Due after 1
Due after 2
Due after 3
Due after 4
Due in 1 Year
year through Years through Years through Years throughor Less
2 Years
3 Years
4 Years
5 Years
2,941,105-(Thousand yen)-

19th Fiscal Period (As of March 31, 2015)(1) Cash and deposits(2) Cash and deposits
in trust(3) Operating
accounts
receivable
Total of assets-(Note 4) Financial instruments for which discerning of fair value is recognized to be extremely difficult(Note 2) Scheduled redemption amount of monetary claims(1) Cash and deposits(2) Cash and deposits
in trust(3) Operating
accounts
receivable
Total of assets-

19th Fiscal Period (As of March 31, 2015)

be made by the Investment Corporation.) The present value of those with fixed interest rates is based on themethod of discounting the combined total of principal and interest by a reasonably estimated rate assumed as

being applicable to a new similar borrowing to be made by the Investment Corporation.
(7) Investment corporation bonds

8,700,000

  (Thousand yen)
Due after 1
Due after 2
Due after 3
Due after 4
Due after
year through Years through Years through Years through5 Years
2 Years
3 Years
4 Years
5 Years-

deposits in trust
(1)

(2)

(Thousand yen)
19th Fiscal Period(As of March 31, 2015)

235,682

235,667

2,303,807

2,385,824

Lease and guarantee deposits
Lease and guarantee deposits are not subject to disclosure of fair value because discerning of fair value is recognized to be
extremely difficult as reasonable estimation of cash flows is impossible since there is no market price and also since it isdifficult to calculate the deposit period in effect.
Tenant leasehold and security deposits in trust
Tenant leasehold and security deposits in trust, which are deposited by the tenants of rental properties, are not subject todisclosure of fair value because reasonable estimation of cash flows is recognized to be extremely difficult since there is nomarket price and also since it is difficult to calculate the deposit period in effect.

(Thousand yen)
Due after
5 Years

10. Securities

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

18th Fiscal Period (As of September 30, 2014)
Not applicable
19th Fiscal Period (As of March 31, 2015)
Not applicable

11. Derivative Transactions
1. Derivatives to which hedge accounting is not applied
18th Fiscal Period (As of September 30, 2014)
Not applicable35

36

Sekisui House SI Residential Investment Corporation

19th Fiscal Period (As of March 31, 2015)
Not applicable

13. Income Taxes
1. Deferred tax assets and liabilities consisted of the following:

2. Derivatives to which hedge accounting is applied
18th Fiscal Period (As of September 30, 2014)
The following is the contract amount or amount equivalent to the principal provided in the contract, etc. as of
the closing of accounts for each method of hedge accounting.

Method of Hedge
Accounting

Type of Derivative
Main Hedged Item
Transactions

Contract Amount (Note 1)
Of Which,over 1 Year

(Thousand yen)Calculation
Fair
Method for
Value
the Fair
Value

Interest rate swap
Special accounting
transaction
Long-term loans
for interest rate
63,909,500
57,259,500 (Note 2)
Receivable floating;payableswaps
Payable fixed(Note 1) The contract amount of interest rate swaps is indicated based on the notional principal amount.
(Note 2) Transactions for which special accounting for interest rate swaps is applied are combined with long-term loans
payable for accounting purposes. Accordingly, their fair value is included in the fair value of the relevant
long-term loans payable (See Note “Financial Instruments” 2. Matters Concerning Fair Value, Etc. of Financial
Instruments (Note 1) (8) Long-term loans payable.).

19th Fiscal Period (As of March 31, 2015)
The following is the contract amount or amount equivalent to the principal under the contract, etc. as ofbalance sheet date by each method of hedge accounting.

Method of Hedge
Accounting

Type of Derivative
Main Hedged Item
Transactions

Contract Amount (Note 1)
Of Which,over 1 Year

(Thousand yen)Calculation
Fair
Method for
Value
the Fair
Value

Deferred tax assets:(Thousand yen)
19th Fiscal Period(As of March 31, 2015)

18th Fiscal Period(As of September 30, 2014)

Amortization of leasehold rights in trust

Amount of allowance for doubtful accounts notdeductible from taxable income
Amount of accrued business taxes not deductible
from taxable income
Subtotal deferred tax assets

3,675

4,129

99

132

-

427

3,775

4,689

Valuation allowance(3,675)(4,557)

Deferred tax assets, net

99

132

Total deferred tax assets

99

132

2. Reconciliation of the statutory tax rate to the Effective Income Tax Rate
18th Fiscal Period(As of September 30, 2014)
Statutory tax rate

(Adjustment)
Deductible cash distributions

Provision for reserve for reduction entry
Other
Effective income tax rate

19th Fiscal Period(As of March 31, 2015)34.16%

34.15%(34.11%)(32.96%)

0.11%

0.12%

-%
0.06%

(1.16%)
0.09%

3. Adjustment of Deferred Tax Assets and Deferred Tax Liabilities due to Changes in Income Tax Rate

Interest rate swap
Special accounting
transaction
Long-term loans
for interest rate
71,609,500
71,609,500 (Note 2)
Receivable floating;payableswaps
Payable fixed(Note 1) The contract amount of interest rate swaps is indicated based on the notional principal amount.
(Note 2) Transactions for which special accounting for interest rate swaps is applied are combined with long-term loans
payable for accounting purposes. Accordingly, their fair value is included in the fair value of the relevant long-termloans payable (See Note “Financial Instruments” 2. Matters Concerning Fair Value, Etc. of Financial Instruments(Note 1) (8) Long-term loans payable.).

With the Act Concerning Partial Amendment of the Income Tax Act, Etc. (Act No. 9 of 2015) promulgated on
March 31, 2015, the income tax rate will be lowered, effective for the fiscal period starting on or after April 1,
2015. Accordingly, the effective statutory tax rate used to calculate deferred tax assets and deferred tax
liabilities concerning temporary differences that are expected to be reversed in and after the fiscal period
ending September 2015 (the 20th fiscal period) will be changed to 32.31%. The impact of this change on thedeferred tax assets and deferred tax liabilities at the end of the 19th fiscal period was minimal.

12. Retirement Benefits

14. Equity Method Income and Retained Earnings

18th Fiscal Period (As of September 30, 2014)
Not applicable as the Investment Corporation does not have any retirement benefit plan

18th Fiscal Period (from April 1, 2014 to September 30, 2014)
Not applicable as the Investment Corporation does not have any affiliated companies

19th Fiscal Period (As of March 31, 2015)
Not applicable as the Investment Corporation does not have any retirement benefit plan

19th Fiscal Period (from October 1, 2014 to March 31, 2015)
Not applicable as the Investment Corporation does not have any affiliated companies

15. Assets Retirement Obligations
18th Fiscal Period (from April 1, 2014 to September 30, 2014)
Not applicable
19th Fiscal Period (from October 1, 2014 to March 31, 2015)
Not applicable37

38

Sekisui House SI Residential Investment Corporation

19th Fiscal Period (from October 1, 2014 to March 31, 2015)

16. Transactions with Related Parties
1. Parent Company and Major Corporation Unitholders
18th Fiscal Period (from April 1, 2014 to September 30, 2014)
Not applicable

Classification Name

19th Fiscal Period (from October 1, 2014 to March 31, 2015)
Not applicable
2. Subsidiaries and Affiliates
18th Fiscal Period (from April 1, 2014 to September 30, 2014)
Not applicable
19th Fiscal Period (from October 1, 2014 to March 31, 2015)
Not applicable
3. Sister Companies
18th Fiscal Period (from April 1, 2014 to September 30, 2014)
Not applicable
19th Fiscal Period (from October 1, 2014 to March 31, 2015)
Not applicable
4. Directors and Major Individual Unitholders
18th Fiscal Period (from April 1, 2014 to September 30, 2014)

Classification Name

Share of
VotingRights [orBusiness
Ownership
Description orof Such in
Occupation
theInvestment
Corporation]

Description ofTransaction

Balance atTransaction
the End ofAmountCategory
Period(thousand (thousand
yen)
yen)

Payment of asset
management fees to
Accounts
493,606
Sekisui House SI
payable–389,692
Asset Management,
Executive Director(Note 2)otherLtd.
of the Investment
Director and(Note 1)
Corporation and
Osamu
President ofPayment of institution
its close
Minami Sekisui House SI
operation andrelatives
AccountsAssetadministration fees toManagement, Ltd.
Sekisui House SI
6,100 payable –1,512
Asset Management,
other
Ltd.
(Note 3)(Note 1) The transaction was conducted by Osamu Minami as representative of a third party (Sekisui House SI AssetManagement, Ltd.), and the fees are based on the terms and conditions designated in the Articles ofIncorporation of the Investment Corporation.
(Note 2) The figure includes 132,780 thousand yen as asset management fees related to property acquisitions, whichhave been capitalized in the book value of individual real properties.
(Note 3) The transaction was conducted by Osamu Minami as representative of a third party (Sekisui House SI AssetManagement, Ltd.), and the fees are based on the institution operation and administration agreement.
(Note 4) Of the amounts in the above table, consumption taxes are not included in the transaction amount but areincluded in the balance at the end of period.
(Note 5) The tenure of office of Koji Sakamoto as Executive Officer expired on June 11, 2014. Osamu Minami was
appointed as Executive Director at the general meeting of unitholders of the Investment Corporation, taking officeeffective June 12, 2014. The transaction amounts indicate the figures for the 18th fiscal period in which Koji
Sakamoto was in the position of Executive Director.

39

Share of
VotingRights [orBusiness
Ownership
Description orof Such in
Occupation
theInvestment
Corporation]

Description ofTransaction

Balance atTransaction
the End ofAmountCategory
Period(thousand (thousand
yen)
yen)

Payment of asset
management fees to
Accounts
516,937
Sekisui House SI
payable–474,053
Asset Management,
Executive Director(Note 2)otherLtd.
of the Investment
Director and(Note 1)
Corporation and
Osamu
President ofPayment of institution
its close
Minami Sekisui House SI
operation andrelatives
AccountsAssetadministration fees toManagement, Ltd.
Sekisui House SI
1,400 payable –1,512
Asset Management,
other
Ltd.
(Note 3)(Note 1) The transaction was conducted by Osamu Minami as representative of a third party (Sekisui House SI AssetManagement, Ltd.), and the fees are based on the terms and conditions designated in the Articles ofIncorporation of the Investment Corporation.
(Note 2) The figure includes 90,240 thousand yen as asset management fees related to property acquisitions, which havebeen capitalized in the book value of individual real properties, and 9,600 thousand yen of asset management
fees related to property assignment, which have been recorded in other sales expenses.
(Note 3) The transaction was conducted by Osamu Minami as representative of a third party (Sekisui House SI AssetManagement, Ltd.), and the fees are based on the institution operation and administration agreement.
(Note 4) Of the amounts in the above table, consumption taxes are not included in the transaction amount but areincluded in the balance at the end of period.

17. Segment Information[Segment Information]
Descriptions are omitted as the Investment Corporation has a single business segment of real estateleasing business.
[Related Information]
18th Fiscal Period (from April 1, 2014 to September 30, 2014)(1) Information by product and service
Descriptions are omitted as the Investment Corporation’s operating revenue under single product/service
classification for outside customers exceeds 90% of operating revenue recorded in the statement ofincome.
(2) Information by region(a) Operating revenue
Descriptions are omitted as the Investment Corporation’s operating revenue for outside customers inJapan exceeds 90% of operating revenue recorded in the statement of income.
(b) Property, plant and equipment
Descriptions are omitted as the amount of the Investment Corporation’s property, plant andequipment located in Japan exceeds 90% of property, plant and equipment recorded in the balance
sheet.
(3) Information by major customer
Descriptions are omitted as the Investment Corporation’s operating revenue for any individual outside
customer is less than 10% of operating revenue recorded in the statement of income.
19th Fiscal Period (from October 1, 2014 to March 31, 2015)(1) Information by product and service
Descriptions are omitted as the Investment Corporation’s operating revenue under single product/service
classification for outside customers exceeds 90% of operating revenue recorded in the statement ofincome.

40

Sekisui House SI Residential Investment Corporation(2) Information by region(a) Operating revenue
Descriptions are omitted as the Investment Corporation’s operating revenue for outside customers inJapan exceeds 90% of operating revenue recorded in the statement of income.
(b) Property, plant and equipment
Descriptions are omitted as the amount of the Investment Corporation’s property, plant andequipment located in Japan exceeds 90% of property, plant and equipment recorded in the balance
sheet.
(3) Information by major customer
Descriptions are omitted as the Investment Corporation’s operating revenue for any individual outside
customer is less than 10% of operating revenue recorded in the statement of income.

18. Per Unit Information
18th Fiscal Period
19th Fiscal Period(April 1, 2014 –(October 1, 2014 –Item
September 30, 2014)
March 31, 2015)
Net assets per unit
88,512 yen
89,605 yen
Net income per unit
2,163 yen
2,289 yen
(Note 1) Diluted net income per unit has not been presented since no warrants or convertible bonds are outstanding.
(Note 2) Net income per unit has been calculated based on the following data:
PeriodPeriodItem
Net Income (thousand yen)Amount not attributable to ordinary
unitholders (thousand yen)
Net income attributable to ordinary
investment units (thousand yen)
Average number of units during the
fiscal period (units)

18th Fiscal Period(April 1, 2014 –September 30, 2014)
1,950,739

19th Fiscal Period(October 1, 2014 –March 31, 2015)
2,302,362--

1,950,739

2,302,362

901,478

1,005,513

19. Rental Properties
The Investment Corporation owns assets as trust beneficiary interests in real estate as entrusted property,
which comprises rental residential properties and rental retail properties. The real estate rental revenues andexpenses for the relevant rental properties amounted to 3,031,018 thousand yen for the 18th fiscal period and3,299,606 thousand yen for the 19th fiscal period, respectively. The following table provides the book value
recorded on the balance sheet, amount of change during the period and fair value of these rental properties.
18th Fiscal Period(April 1, 2014 –September 30, 2014)

1. Schedule of Securities
Not applicable
Real estate trust beneficiary interests are included in the Summary of Detailed Schedule of Real Properties.
2. Schedule of Contract Amount, Etc. and Fair Value of Derivative Transactions and Forward Exchange
Transactions      Contract Amount (Note 1)

Category

Type

Transaction other thanmarket transaction

Interest rate swap
transactions
Receive float /pay fixed(Thousand yen)
Fair Value(Note 2)

Of Which,over 1 Year

Total

71,609,500

71,609,500

71,609,500

71,609,500-(Note 1) The contract amount of interest rate swaps is indicated based on the notional principal amount.
(Note 2) Description of fair value is omitted as the transactions satisfy the requirements for special accounting under theaccounting standards for financial instruments.

3. Summary of Detailed Schedule of Real Properties

Type of Assets

9,286

175

91,755

11,426

1,280

80,328(Note)

594

115

－

709

161

19

548

(Note)

1,292

440

－

1,733

381

59

1,351

(Note)

102

33

0

135

51

7

83

(Note)

93,263

9,834

880

102,216－－

102,216(Note)

177,896

19,7101,056

196,550

12,0201,367

184,529

164

－

－

164

12

2

152

－

1

－

1

0

0

0

6

－

－

6

5

0

0

171

1

－

172

18

2

153

Land in trust
Total

Intangible
assets(Million yen)
Net
Balance Increase Decrease Balance
Balance as of during during
as ofOr
Depreciation as of Remarks
October thethe
March 31,
Accumulated during the March 31,
1, 2014 Period Period
2015
2015
Amortization
PeriodAccumulated
Depreciation

Buildings in trust 82,643

Structures intrust
Machinery andProperty, equipment inplant and trust
equipment Tools, furnitureand fixtures intrust(Thousand yen)
19th Fiscal Period(October 1, 2014 –March 31, 2015)

Book value recorded on the balance sheet
Balance at the beginning of period
148,249,019
167,353,736
Amount of net change during period
19,104,717
17,328,049
Balance at the end of period
167,353,736
184,681,786
Fair value at the end of period
173,301,700
194,662,100(Note 1) Book value recorded on the balance sheet indicates the book value less accumulated depreciation.
(Note 2) Net change during the 18th fiscal period is comprised of increases primarily attributable to new acquisitions of 4
properties (20,288,623 thousand yen) and decrease primarily attributable to depreciation (1,252,737 thousandyen). Net change during the 19th fiscal period is comprised of increases primarily attributable to new acquisitionsof 9 properties (19,557,719 thousand yen) and decrease primarily attributable to sale of b-town JINGUMAE II(1,013,276 thousand yen) and depreciation (1,369,589 thousand yen).
(Note 3) Pursuant to the Articles of Incorporation, the fair value at the end of period indicates the appraisal value or
surveyed value provided by outside real estate appraisers with appraisal dates of September 30, 2014 andMarch 31, 2015, respectively.

20. Significant Subsequent Events

21. Detailed Schedules

Leasehold rights
in trust
Trademarkrights
Other

Total

(Note) The amount of increase during the 19th fiscal period is primarily attributable to the acquisition of Prime Maison
MORISHITA, Prime Maison SHINAGAWA, Prime Maison ODORI KOEN, Prime Maison MINAMI 2-JO, Prime
Maison KAMOKAMOGAWA, Prime Maison CENTRAL PARK, MAST LIFE YAHIRO, Prime Maison EBISU and
Esty Maison SHIBAURA. The amount of decrease during the 19th fiscal period is attributable to the sale of b-town
JINGUMAE II.

4. Schedule of Other Specified Assets
Not applicable
Real estate trust beneficiary interests are included in the Summary of Detailed Schedule of Real Properties.

Not applicable41

42

Sekisui House SI Residential Investment Corporation

6. Schedule of Loans Payable

5. Schedule of Investment Corporation Bonds

NameFirst Series
Unsecured
Investment
Corporation
Bonds
SecondSeriesUnsecured
Investment
Corporation
Bonds
Third Series
Unsecured
Investment
Corporation
Bonds
Fourth Series
Unsecured
Investment
Corporation
Bonds
Fifth Series
Unsecured
Investment
Corporation
Bonds

Balance as Decrease
Balanceof October during the as of March Coupon
1, 2014
Period31, 2015
Rate(million(million(million
(%)
yen)
yen)
yen)

Issue Date

February 28,
2013

February 28,
2013

February 28,
2014

February 28,
2014

August 29,
2014

Total

4,000

-

2,000

-

2,500

-

3,000

-

4,000

2,000

2,500

3,000

3,000

-

3,000

14,500-14,500

0.630

1.000

0.374

1.069

0.871

Redemption
Date

February 28,
2018

February 28,
2020

February 28,
2019

February 28,2024

August 30,
2024

Category

Purpose Collateral(Note 1) Unsecured(Note 1) Unsecured

-

4,000

2,500

Short-termloanspayable

4,350

－

4,350

－

Sumitomo Mitsui Banking
Corporation

4,350

－

4,350

－

Mizuho Bank, Ltd.

－

500

－

500

Sumitomo Mitsui Banking
Corporation

－

500

－

500

Mizuho Bank, Ltd.

－

950

－

950

－

950

－

950 0.30500％

－

950

－

950

8,700

3,850

8,700

3,850

2,000

－

－

2,000

Mizuho Bank, Ltd.

425

－

－

Sumitomo Mitsui Banking
Corporation

425

－

－

1,500

－

1,500

－

Mizuho Bank, Ltd.

500

－

500

－

Sumitomo Mitsui Banking
Corporation

500

－

500

－

Resona Bank, Limited

950

－

950

－

The Senshu Ikeda Bank, Ltd.

500

－

500

－

The Shizuoka Bank, Ltd.

500

－

500

－

The 77 Bank, Ltd.

500

－

500

－

Shinkin Central Bank

500

－

500

－

The Hiroshima Bank, Ltd.

500

－

500

－

Mizuho Bank, Ltd.

700

－

700

－

Aozora Bank, Ltd.

100

－

－

100

Shinkin Central Bank

100

－

－

100

Mizuho Bank, Ltd.

200

－

－

200

200

－

－

200

200

－

－

200 1.18975％

100

－

－

100

100

－

－

100

300

－

－

300

Subtotal
Development Bank of Japan
Inc.

(Note 2) Unsecured

The Norinchukin Bank

(Note 2) Unsecured

2,000

Mizuho Bank, Ltd.

Sumitomo Mitsui Banking
Corporation
The Bank of Tokyo-Mitsubishi
UFJ, Ltd.

(Note 2) Unsecured(Note 1) The proceeds are used as funds for repayment of borrowings and acquisition of real estate trust beneficiaryinterests, etc.
(Note 2) The proceeds are used as funds for repayment of borrowings, etc.
(Note 3) These investment corporation bonds are equipped with pari passu clause among specified investment
corporation bonds.
(Note 4) Amounts of investment corporation bonds to be redeemed within five years after the date of the balance sheet
are as follows.
 (Million yen)Due in 1 YearDue after 1 YearDue after 2 Years
Due after 3 Years
Due after 4 Yearsor Less
through 2 Years
through 3 Years
through 4 Years
through 5 Years-

LenderLong-term
loans
payableMizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
LimitedThe Bank of Tokyo-Mitsubishi
UFJ, Ltd.
Mitsubishi UFJ Trust andBanking Corporation
Resona Bank, Limited

200

－

－

200

1,200

－

－

1,200

The Bank of Fukuoka, Ltd.

500

－

－

500

Mizuho Bank, Ltd.

400

－

－

400

1,100

－

－

1,100

1,300

－

－

1,300

500

－

－

500

The Yamaguchi Bank, Ltd.

0.33261％

0.33261％

Remarks

February27, 2015
August 31,
2015
Lump-sum
Unsecured/(Note 2)upon
(Note 4)
Unguaranteedmaturity
February29, 2016

February425 1.57000％ 29, 2016
(Note 3)425

Development Bank of JapanInc.

Sumitomo Mitsui Banking
Corporation
The Bank of Tokyo-Mitsubishi
UFJ, Ltd.

43

Balance Increase Decrease Balance 
as of during during
as ofAverage
October thethe
March 31, Interest Repayment Repayment
Purpose1, 2014 Period Period
2015
Rate
Date
Method(million (million (million(million(Note 1)
yen)
yen)
yen)
yen)

(Note 5)
1.15900％

February27, 2015

0.99850％

February27, 2015

Lump-sum
Unsecured/
upon
Unguaranteedmaturity (Note 4)

1.19475％

February28, 2017

February28, 2017(Note 6)44

Sekisui House SI Residential Investment Corporation

Category

LenderDevelopment Bank of Japan
Inc.

Long-term
loans
payableBalance Increase Decrease Balance 
as ofduringduringas ofAverage
OctoberthetheMarch 31, Interest Repayment Repayment
Purpose1, 2014 Period
Period
2015
Rate
Date
Method(million (million (million(million(Note 1)
yen)
yen)
yen)
yen)

941

－

－

Remarks

Lender941

Mizuho Bank, Ltd.

1,470

－

－

Sumitomo Mitsui Banking
Corporation

February
1,470 1.15475％
28, 2019

1,470

－

－

1,470

The Norinchukin Bank

2,352

－

－

Category

2,352(Note 5)

The 77 Bank, Ltd.

500

－

－

500

The Hiroshima Bank, Ltd.

500

－

－

500

Mizuho Bank, Ltd.

100

－

－

100 0.75600％

500

－

－

500

500

－

－

500

The Bank ofTokyo-Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust andBanking Corporation

Mizuho Bank, Ltd.

176

－

－

Sumitomo Mitsui Banking
Corporation

August176 0.95750％
31,2017

176

－

－

176

Aozora Bank, Ltd.

200

－

－

200

Mizuho Bank, Ltd.

750

－

－

750

Shinkin Central Bank

200

－

－

200

2,250

－

－

Mizuho Bank, Ltd.

300

－

－

300

750

－

－

400

－

－

400

750

－

－

750

300

－

－

300 0.65475％

400

－

－

400

200

－

－

200

500

－

－

500

700

－

－

700

500

－

－

500

200

－

－

200

Aozora Bank, Ltd.

1,000

－

－

1,000

Mizuho Bank, Ltd.

500

－

－

500

200

－

－

200

2,500

－

－

600

－

－

600

200

－

－

200

Resona Bank, Limited

500

－

－

500

Aozora Bank, Ltd.

500

－

－

500

Mizuho Bank, Ltd.

200

－

－

200

200

－

－

200 0.58920％

1,100

－

－

1,100

500

－

－

500

300

－

－

300

300

－

－

300

400

－

－

400

800

－

－

800

400

－

－

400

980

－

－

980

500

－

－

500

1,500

－

－

1,500

500

－

－

500

800

－

－

800

Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Banking
Corporation
The Bank ofTokyo-Mitsubishi UFJ, Ltd.
Mizuho Bank, Ltd.
Mizuho Trust & Banking Co.,Ltd.
The Bank ofTokyo-Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust andBanking Corporation
Resona Bank, Limited

Lump-sum
Unsecured/
2,250
upon
Unguaranteed
February
maturity (Note 4)
0.89900％
28, 2019
750

1,700

－

－

February
1,700 1.02225％
28, 2020

2,142

－

－

2,142

500

－

－

500

Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
LimitedThe Bank ofTokyo-Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust andBanking Corporation(Note 5)Resona Bank, Limited

Long-term
loans
payableMizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedThe Bank ofTokyo-Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust andBanking Corporation

Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
LimitedMizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
LimitedThe Bank ofTokyo-Mitsubishi UFJ, Ltd.
Mizuho Bank, Ltd.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
LimitedMitsubishi UFJ Trust andBanking Corporation
Resona Bank, Limited

45

Balance Increase Decrease Balance 
as ofduringduringas of
Average
OctoberthetheMarch 31,
Interest
1, 2014 Period
Period2015
Rate(million (million (million(million(Note 1)
yen)
yen)
yen)
yen)

2,500 1.17200％

Repayment Repayme
PurposeDate
nt Method

February28, 2018(Note 5)February28, 2017(Note 4)

August 31,
Lump-su2020
m uponmaturity

Remarks

Unsecured/
Unguaranteed(Note 5)

August 31,
2018

1.17350％

February28, 2022(Note 4)1.11000％

February28, 2022(Note 5)46

Sekisui House SI Residential Investment Corporation

Category

LenderThe Senshu Ikeda Bank, Ltd.

500

－

－

Category
Remarks

LenderBalance Increase Decrease Balance 
as ofduringduringas of
Average
OctoberthetheMarch 31, Interest
1, 2014
PeriodPeriod2015
Rate(million (million (million(million(Note 1)
yen)
yen)
yen)
yen)

500

Aozora Bank, Ltd.

－

200

－

200

－

200

－

200

400

－

－

400

The Senshu Ikeda Bank,
Ltd.

500

－

－

500

The Shizuoka Bank, Ltd.

－

200

－

200

500

－

－

500

The 77 Bank, Ltd.

－

200

－

200

500

－

－

500

Shinkin Central Bank

－

200

－

200

500

－

－

500

The Norinchukin Bank

－

500

－

500

The Yamaguchi Bank, Ltd.

500

－

－

500

The Hiroshima Bank, Ltd.

－

200

－

200

Resona Bank, Limited

500

－

－

500

The Bank of Fukuoka, Ltd.

－

700

－

700

Mizuho Bank, Ltd.

－

1,000

－

1,000

－

800

－

800

－

600

－

600

－

300

－

300

－

800

－

800

－

500

－

500

The Yamaguchi Bank, Ltd.

－

200

－

200

Resona Bank, Limited

－

500

－

500

Development Bank of Japan
Inc.

－

1,000

－

The Norinchukin Bank

－

800

－

800

The Bank of Fukuoka, Ltd.

－

500

－

500

Mizuho Bank, Ltd.

－

500

－

500

－

500

－

500

－

300

－

300

Resona Bank, Limited

－

750

－

750

The Senshu Ikeda Bank,
Ltd.

－

500

－

500

The Shizuoka Bank, Ltd.

－

500

－

500

The 77 Bank, Ltd.

－

500

－

500

Shinkin Central Bank

－

500

－

500

The Norinchukin Bank

－

500

－

500

The Hiroshima Bank, Ltd.

－

500

－

500

Mizuho Bank, Ltd.

－

600

－

600

Sumitomo Mitsui Banking
Corporation

－

300

－

300

69,25918,1506,650

80,75977,95922,00015,35084,609Mizuho Bank, Ltd.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
LimitedMitsubishi UFJ Trust andBanking Corporation

Mizuho Bank, Ltd.

Long-term
loans
payableBalance Increase Decrease Balance 
as ofduringduringas ofAverage
OctoberthetheMarch 31, Interest Repayment Repayment
Purpose1, 2014 Period
Period
2015
Rate
Date
Method(million (million (million(million(Note 1)
yen)
yen)
yen)
yen)

0.95225％(Note 5)

405

－

－

405

Sumitomo Mitsui Banking
Corporation

1,145

－

－

1,145

The Shizuoka Bank, Ltd.

500

－

－

500

Shinkin Central Bank

500

－

－

The Bank of Fukuoka, Ltd.

500

－

－

Mizuho Bank, Ltd.

300

－

－

300

Sumitomo Mitsui Banking
Corporation

300

－

－

300

2,500

－

－

2,500

2,000

－

－

2,000 0.96475％

900

－

－

900

Mizuho Bank, Ltd.

2,450

－

－

2,450

Sumitomo Mitsui Banking
Corporation

1,950

－

－

1,950

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
The Bank ofTokyo-Mitsubishi UFJ, Ltd.

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
The Bank ofTokyo-Mitsubishi UFJ, Ltd.

－

800

－

－

800

－

－

1,200

－

February
26, 2021

0.79614％February28, 2020

Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust
Bank, Limited
The Bank ofTokyo-Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust andBanking Corporation

Lump-sum
Unsecured/
500
upon
Unguaranteedmaturity
February
500 0.97300％(Note 4)26, 2021

Long-term
loans
payableAugust 31,
2022(Note 5)0.83600％

August 31,
2021

800

February
800 0.33036％ 29, 2016
(Note 3)1,200

(Note 4)

Sumitomo Mitsui Banking
Corporation
The Bank ofTokyo-Mitsubishi UFJ, Ltd.

Subtotal
Total

Repayment Repayment
PurposeDate
MethodRemarks

February
0.86650％ 28, 2023

1,000 0.85250％

February28, 2023

0.73975％

February28, 2022

0.62800％

February
26, 2021

Lump-sum
Unsecured/
upon(Note 5)
Unguaranteedmaturity(Note 1) The “average interest rate” is a weighted-average figure during the fiscal period and is rounded to the fifth
decimal place. Furthermore, the average interest rate of borrowings for which the Investment Corporation
conducted interest rate swap transactions for the purpose of hedging the interest rate fluctuation risk is the rate
obtained by taking into account the effect of interest rate swaps.
(Note 2) The Investment Corporation made early repayment of the full amount of these loans on May 29, 2015.
(Note 3) These loans are recorded in the current liabilities on the balance sheet as current portion of long-term loans
payable as of the end of the 19th fiscal period.

47

48

Sekisui House SI Residential Investment Corporation(Note 4) These loans are used as funds for the acquisition of real estate trust beneficiary interests, etc.
(Note 5) These loans are used as funds for repayment of existing borrowings.
(Note 6) These loans are used as funds for redemption of the Second Series Unsecured Investment Corporation Bonds(with pari passu clause among specified investment corporation bonds and with limitations on resale among
qualified institutional investors) issued in March 2007.
(Note 7) Amounts of long-term loans payable to be repaid within five years after the date of the balance sheet are as
follows.
(Million yen)Due in 1 Yearor Less

5,650

49

Due after 1 Yearthrough 2 Years

9,500

Due after 2 Years
through 3 Years

4,805

Due after 3 Years
through 4 Years

10,882

Due after 4 Years
through 5 Years

6,792

50

Sekisui House SI Residential Investment Corporation

Overview of the Investment Corporation
Trade Name

Overview of Asset Management Company
Corporate Name

Sekisui House SI Asset Management, Ltd.

3-1-31 Minami-Aoyama, Minato-ku, Tokyo
Tel: +81-3-5770-8973 (main number)Head Office3-1-31 Minami-Aoyama, Minato-ku, Tokyo
Tel: +81-3-5770-8973 (main number)

Osamu Minami

Paid-in Capital

200 million yen

Shareholders

Sekisui House, Ltd
Spring Investment Co., Ltd.

Sekisui House SI Residential Investment Corporation

Address
Representative

Asset Management Company

Fiscal Term

Executive Director

Sekisui House SI Asset Management, Ltd.

May 19, 2005

History

July 28, 2005

Executive Vice President:

Registration and Establishment under Article 166 of the Act Concerning Investment Trusts andInvestment Corporations (Investment Trusts Act).
Implementation of registration by the Prime Minister under Article 187 of the Investment Trusts
Act. (registration number: Director of Kanto Local Finance Bureau No.33)
Listed on the Real Estate Investment Trust Section of the Tokyo Stock Exchange (securities code:
8973)

Organizational Structure

Specific Related Corporation/
Pipeline Support Companies

negotiation rights, etc.

● Asset Management

Agreement● Institutional

Sekisui House SI
Asset Management, Ltd.

Sekisui House
SI Residential
Investment Corporation

EstablishedObtained license as asset management agent for investment corporation under the Investment
Trusts Act (approval number: No. 41 licensed by the Prime Minister)

The asset management of the Investment Corporation is entrusted to Sekisui House SI Asset Management, Ltd., the asset management company.
The following diagram shows the organizational chart of the asset management company and its institutions in charge of compliance.

provision of property information● Agreement concerning preferential
negotiation rights, etc.
● Agreement concerning preferential
negotiation rights

Organ to discuss and decide on basic andimportant compliance matters, etc.

Board of Directors
Compliance Committee
Investment Committee

Compliance Committee

Board of Directors
Executive
Director:
Supervisory
Director:
Supervisory
Director:

Organs in charge of compliance
Mizuho Trust &Banking Co., Ltd.

Compliance Officer

Osamu Minami
Kaoru Takamatsu

President

Mikio Koyano● Financial Agency Agreement

Independent Auditor

The Compliance Committee consists of
the Compliance Officer, President andexternal experts in compliance.

Transfer Agent

Agreement

Spring Investment Co., Ltd.
Sekiwa Real Estate Tohoku, Ltd. Sekiwa Real Estate Chugoku, Ltd.

Statutory Auditor

Mizuho Trust &Banking Co., Ltd.

● Transfer Agency Services

Pipeline Support Companies

Sekiwa Real Estate Kansai, Ltd.

Entrustment Agreement● Asset Custody Agreement

Administrator(Accounting) &Custodian

General Meeting ofUnitholders

Management Agreement● Agreement concerning preferential

Sekiwa Real Estate Chubu, Ltd.

April 18, 2005

General Meeting of
Shareholders● General Administrative Affairs● Agreement concerning preferential(Institutional management)

July 28, 2004

History

Investment Corporation

Sekisui House, Ltd.
Sekiwa Real Estate, Ltd.

Asset Management Company & Administrator

Directors

Structure to Manage the Investment Corporation

Based on its Articles of Incorporation, the Investment Corporation manages the funds paid in by the unitholders by investing primarily in real estate andrelated assets.
The following diagram indicates the operational roles and assignments of the companies involved in the management and administration of the Investment Corporation.

Sekiwa Real Estate Kanto, Ltd.

Osamu Minami
Nobuyoshi Sato
Senior Managing Director: Koji Sakamoto (in charge of IR & Financial Affairs Department, Real Estate Investment Department and Management Department)
Director:
Masaki Katsura (in charge of Asset Management Department)
Director (part-time):
Yoshiki Inazawa (Senior Manager, Accounting & Finance Department, Sekisui House, Ltd.)
Auditor (part-time):
Naoki Kawamura (Section Manager, Legal Department, Sekisui House, Ltd.)
President:

End of March and end of September

April 20, 2005

75%
25%

Investment Corporation
Bond Administrator

Risk Management andCompliance Office

The Bank of TokyoMitsubishi UFJ, Ltd.

Risk Management and Compliance Office

Ernst & Young ShinNihon LLC

Sekiwa Real Estate Kyushu, Ltd.

Compliance Officer
The Compliance Officer is responsible
for managing the overall compliance of
the Asset Management Company. The
Compliance Officer shall be selectedbased on having sufficient examining
and supervising capabilities to ensurecompliance with laws, regulations andvarious rules by the Asset Management
Company.

Real Estate
Investment Department

Asset Management
Department

IR & Financial
Affairs Department

Management
Department

The Risk Management and Compliance
Office monitors operations with regard torisk management and compliance withlaws, regulations and various rules, etc.

(Note) In accordance with the completion of the procedure to abolish the special accounts, the agreement concerning administration of special accounts with Mizuho Trust & Banking Co., Ltd., the special account administrator, was terminated as of January 16, 2015.

51

52

Sekisui House SI Residential Investment Corporation

Unitholders Information
Changes in Investment Unit Price and Transaction Volume in the Last Two Years (March 31, 2013 - March 31, 2015)(Investment unit price: yen)

200,000

Transaction volume (Transaction volume: units)
30,000Investment unit priceMarket capitalization: 132,048 million yen (as of March 31, 2015)
High (closing price) in the 19th fiscal period: 150,700 yen (March 5, 2015)
Low (closing price) in the 19th fiscal period: 99,700 yen (October 16, 2014)
Period-end investment unit price in the 19th fiscal period: 129,700 yen (March 31, 2015)

150,000

20,000100,000

10,00050,000Mar. 31,2013(15th FP)

Jun. 30

Sept. 30,2013
(16th FP)

Dec. 31Mar. 31,2014(17th FP)

Jun. 30

Dec. 31

Sept. 30,2014
(18th FP)

0Mar. 31,2015(19th FP)

(Note) As a five-for-one split of the investment units was implemented on April 1, 2014, the investment units have been traded at one-fifth (the ex-rights) unit price on and after March 27, 2014. In
consideration of the impact of the split, the above graph is based on the actual figures of “Investment unit price” for March 27, 2014 and earlier being divided by five and actual figures of “Trading
volume” being multiplied by five.

Unitholder Composition● Number of Unitholders

138（1.10%）End of 19th FP (Mar. 31, 2015)
12,532 unitholders

Other domestic firms

Foreign firms

Individuals and others

12,028（95.98%）241（1.92%）
127（1.09%）End of 18th FP (Sept. 30, 2014)
11,612 unitholders

Financial Institutions (including securities companies)

125（1.00%）

104（0.90%）
11,119（95.75%）262（2.26%）● Number of Investment Units

End of 19th FP (Mar. 31, 2015)
1,018,110 units

End of 18th FP (Sept. 30, 2014)
915,240 units

669,049 units（65.71%）

92,151 units（9.05%） 128,048 units（12.58%） 128,862 units（12.66%）

571,655 units（62.46%）88,186 units（9.64%） 118,714 units（12.97%） 136,685 units（14.93%）

Major Unitholders
The following table shows the 10 largest unitholders according to the ratio of their owned investment units to the total number of investment units
issued as of March 31, 2015.
Name / Company Name

Ratio of Investment Units Owned to Total
Investment Units Issued(%) (Note)

Japan Trustee Services Bank, Ltd. (Trust Account)

255,935

25.13

The Master Trust Bank of Japan, Ltd. (Trust Account)

70,351

6.90

Trust & Custody Services Bank, Ltd. (Securities Investment Trust Account)

53,750

5.27

Sekisui House, Ltd.

39,000

3.83

The Nomura Trust and Banking Co., Ltd. (Trust Account)

38,342

3.76

Nomura Bank (Luxembourg) S.A

33,4843.28

Mizuho Trust & Banking Co., Ltd.

20,7392.03

THE FUJI FIRE AND MARINE INSURANCE COMPANY, LIMITED

20,6302.02

Deutsche Bank AG London-PB Non-Treaty Clients 613

19,759

1.94

The Hachijuni Bank, Ltd.
Total
Note: The ratios of investment units owned to total investment units issued are rounded down to the nearest second decimal place.

53

Investment Units Owned(units)17,704

1.73

569,69455.95