Sekisui House SI
Investment Corporation

Sekisui House SI
Investment Corporation
Business Results for the
11th Fiscal Period
From October 1, 2010 to March 31, 2011

May 17, 2011

Business Results
for the 11th Fiscal Period
From October 1, 2010 to March 31, 2011

Contents
1. Overview of the Eleventh Fiscal Period Ended
March 31, 2011

4. Appendix

・Progress Highlights

4・Balance Sheets

27

・Summary of Business Results for the Eleventh Fiscal
Period Ended March 31, 2011

5

・Statements of Income

29

・Business Results Summary

6・Statements of Cash Flows / Cash Distributions

30

・Occupancy Rates and NOI Yield

7

・Summary of Selected Financial Data

31・Impact of the Great East Japan Earthquake

8

・Portfolio Summary

32

・[Reference] Growth Strategy for a New Stage

9・Outline of Portfolio

33

・Portfolio at a Glance35

2. Business Results for the Eleventh Fiscal Period
Ended March 31, 2011
・Financial Strategy

11・Key Financial Indices for Interest-Bearing Debt

38

・External Growth Strategy

14・Portfolio Development Policy

39・Internal Growth Strategy

18・Overview of Unitholders as of March 31, 201140

・Historical Investment Unit Price41

3. Forecasts for the Twelfth Fiscal Period Ending
September 30, 2011 and Future Policy
・Forecasts for the Twelfth Fiscal Period Ending
September 30, 201123

・Progress of Growth Strategy and Recognized Challenges

24・Current Policy

25

2

1. Overview of the Eleventh Fiscal
Period Ended March 31, 2011

Prime Maison HIGASHISAKURA

Progress Highlights
Steady Progress in Phase I of the “Growth Strategy for a New Stage”
Previous fiscal period actual cash
distribution: ¥8,160 per unit

Current fiscal period actual cash
distribution: ¥9,793 per unit

(Fiscal period ended Sep. 2010 [10th fiscal period])(Fiscal period ended Mar. 2011 [11th fiscal period])

Jun. 2011

Fiscal period ending
September 2011
(12th fiscal period)

Next fiscal period forecast cash
distribution: ¥9,870 per unit
(Fiscal period ending Sep. 2011 [12th fiscal period])

Acquisition of MITEZZA C6 (planned)
Utilize asset management company’s external acquisition channel

May 2011

Refinancing of ¥2.85 billion
Achieve further reduction of borrowing costs

Mar. 2011

Acquisition of Tre Di Casa SANGENJAYA
Utilized the pipelines with Spring Investment

Fiscal period ended
March 2011
(11th fiscal period)

Feb. 2011

Refinancing of ¥15.2 billion
Further promoted stabilizing of financial
standing and achieved the targeted level

LTV: 48.3%
Occupancy rate: 96.6%

Oct. 2010(Entire portfolio)

Acquisition of Prime Maison MUSASHINONOMORI, Prime Maison
HIGASHISAKURA and Prime Maison KAYABAKOEN
Conducted new borrowings totaling ¥2.8 billion
Utilized the pipelines with Sekisui House and launched a system of collaboration with the
Sekiwa Real Estate Group

Fiscal period ended
September 2010
(10th fiscal period)

Sep. 2010

Jul./Aug. 2010 Refinancing of ¥14.6 billion
Released collateral from all loans / six financial institutions newly participated

LTV: 47.1%
Occupancy rate: 96.9%(Entire portfolio)Mar. 2010

Solicited anchor tenants for HAMAMATSU West Building at HAMAMATSU Plaza

May 2010

Proposed the “Growth Strategy for a New Stage”(Note) Figures for LTV and occupancy rate are as of the end of the respective fiscal periods.

Started new system through collaboration with new sponsors (Sekisui House, Ltd. and Spring Investment Co., Ltd.)
4

Summary of Business Results for the Eleventh Fiscal Period Ended March 31, 2011
◇ Factors for differences between actual results andforecasts for the fiscal period ended March 31, 2011

Comparison with Forecasts
Fiscal Period Ended
Mar. 31, 2011

Fiscal Period Ended
Mar. 31, 2011

(Forecasts as of Nov. 15, 2010)(182 days) (Actual)¥3,448 million¥3,462 million

Operating revenue

・ Operating income

Difference

Operating revenue¥13 million

0.4%

Operating income¥1,614 million¥1,655 million¥41 million

2.6%

Ordinary income¥1,088 million¥1,144 million¥55 million

5.1%

Net income
Cash distributions per unit

¥1,087 million¥1,126 million¥39 million

3.6%¥9,450¥9,793¥343

3.6%

Fiscal Period Ended
Mar. 31, 2011(183 days) (Actual)(182 days) (Actual)

Operating revenue¥3,334 million¥3,462 million¥128 million

3.8%

Operating income¥1,576 million¥1,655 million¥78 million

5.0%

Ordinary income¥956 million¥1,144 million¥187 million

19.6%

Net income¥938 million¥1,126 million¥187 million

20.0%¥8,160¥9,793¥1,63320.0%

Total assets¥104,422 million¥107,352 million¥2,930 million

Interest-bearing debt

¥49,229 million¥51,874 million¥2,645 million

Net assets¥51,462 million¥51,650 million¥187 million¥294,300¥377,500

Number of investment units
issued and outstanding

115,070 units

115,070 units

Period-end market value¥33,865 million¥43,438 million¥938 million¥1,126 million

Cash distributions

Notes: 1. Amounts less than the indicated unit are rounded down.

+¥1 million

Decrease in expenses related to rent business:-¥15 million

Decrease in other business expenses:-¥12 million

・Ordinary income
Decrease in non-operating expenses:-¥13 million

・ Net income
Increase in extraordinary losses:

Fiscal Period Ended
Sep. 30, 2010

Period-end investment unit price+¥11 million

Increase in other lease business revenue:

Operating expenses

Comparison with Previous Fiscal Period

Cash distributions per unit

Increase in rent revenue:+¥16 million◇ Factors for period-on-period changes to actual
results for the fiscal period ended March 31, 2011

Change・ Operating income
Operating revenue
Increase in rent revenue:
Increase in other lease business revenue:+¥124 million+¥3 million

Operating expenses
Increase in expenses related to rent business:+¥85 million

Decrease in other business expenses:-¥36 million

・Ordinary income
Decrease in non-operating expenses:-¥109 million

・ Net income
Increase in extraordinary losses:+¥16 million

Decrease in income taxes: -¥16 million

2. Percentage figures are rounded to the nearest first decimal place.

5

Business Results Summary
Cash Distributions per Unit

Operating Revenue, Ordinary Income and Net Income
Operating revenue(million yen)

4,000

Ordinary income

Net income(yen)Decreased income due to payment of settlement moneywith cancellation of planned property acquisitions

12,0003,500

10,000

3,000

8,000

2,500
2,000

6,000

1,500

4,000

1,000

2,000

500
0

Decreased distribution due to the impact of payment of settlementmoney with cancellation of planned property acquisitions

0

Period ended

Mar. 2009

Sep. 2009

Mar. 2010

Sep. 2010

Mar. 2011

Period ended

Mar. 2009

Sep. 2009

Mar. 2010

Sep. 2010

Mar. 2011

Fiscal Period Ended
Mar. 31, 2009(182 days)

Fiscal Period Ended
Sep. 30, 2009(183 days)

Fiscal Period Ended
Mar. 31, 2010
(182 days)

Fiscal Period Ended
Sep. 30, 2010(183 days)

Fiscal Period Ended
Mar. 31, 2011(182 days)

Operating revenue (million yen)

3,432

3,391

3,402

3,334

3,462

Ordinary income (million yen)

1,140

1,075

1,053

956

1,144

574

1,074

1,052

938

1,126

5,485

10,262

10,052

8,160

9,793

Net income (million yen)
Cash distributions per unit (yen)Notes: Amounts less than the indicated unit are rounded down.

6

Occupancy Rates and NOI Yield
Monthly Occupancy Rates at a Glance
Residential

Retail

Total

100%

95%

90%

85%

80%

75%
Mar.
2009

Apr.

End of Seventh
Fiscal Period

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

End of Eighth
Fiscal Period

Jan.
2010

Feb.

Mar.

Apr.

May

Jun.

End of NinthFiscal Period

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.
2011

End of TenthFiscal Period

Feb.

Mar.

End of Eleventh
Fiscal Period

Occupancy Rates

NOI Yields

Fiscal period ended March 31, 2011 (eleventh fiscal period)

Fiscal period ended March 31,
2011 (eleventh fiscal period)

As of March 31, 2011

Average for eleventh fiscal period(Oct. 1, 2010 through Mar. 31, 2011)

Residential

96.2%

95.7%

5.1%

Retail

96.9%

96.9%

5.2%

Total

96.6%

96.4%

5.1%

Notes: 1. “Occupancy Rates” indicated in the graph describe the rate of total leased space to the total leasable space for assets held by the Investment Corporation as of the end of each month from March 2009 to March 2011.
2. The average occupancy rate for the eleventh fiscal period ended March 31, 2011 indicates the average of occupancy rates as of the end of each month for the fiscal period from Oct. 1, 2010 through Mar. 31, 2011.
3. The NOI yield in the table is obtained by dividing the annualized NOI by the total acquisition price for the fiscal period from Oct. 1, 2010 through Mar. 31, 2011.
4. Percentage figures are rounded to the nearest first decimal place.

7

Impact of the Great East Japan Earthquake
Sekisui House SI Investment Corporation expresses its deepest condolences and sympathies to those who suffered from theGreat East Japan Earthquake on March 11, 2011. Our sincere wish is for safety and quick recovery of the affected areas.

Damage Status from the Great East Japan Earthquake at Sekisui House SI Investment Corporation
Damaged Properties

Damage Status

Cost of Repairs(Estimate)

ACT HILLS YACHIYO・Cracks and exfoliated tiles on parts of external walls
・Rifts on interior cloths
・Partial malfunction of facilities¥13,839 thousand

Joy Square YUGAWARA

・Partial breakage of anti-fire hanging walls in stores
・Cracks on floor and walls of common-use areas
・Partial damage of facilities, etc.

¥710 thousand

Other 19 properties

・Cracks and exfoliated tiles on parts of external walls
・Cracks on floor and walls of common-use areas
・Partial damage or malfunction of interior fittings andfacilities¥4,087 thousand

21 out of 57 properties

Total¥18,636 thousand

No report has been made on any
damage, etc., including humancasualties at tenants and other parties,
that will give material impact on thestatus of management of theInvestment Corporation.

Moreover, confirmation investigations with specialized third-party institutions were made concerning the impact of the earthquake on Tre Di Casa SANGENJAYA, which was acquired on March 25, 2011, and
MITEZZA C6, scheduled for acquisition on June 10, 2011. The asset management company also conducted an investigation on their own. As a result, it was decided that there will be no material impact on the
management of the properties after acquisitions, and the acquisition was conducted and the purchase agreement was concluded.

Accounting Treatment of Cost of Repairs Due to the Earthquake
Cost of repairs fordamage caused byearthquake:¥18,636 thousand

Repairs conducted in the fiscal period
ended Mar. 2011 (11th FP):
¥1,942 thousand (actual)

Recorded as expenses related to rent
business (cost of repairs) in fiscal period
ended Mar. 2011 (11th FP)

Repairs scheduled for the fiscal period
ending Sep. 2011 (12th FP) and after:¥16,694 thousand (estimate)

Recorded as allowance for disaster losses(extraordinary losses) in fiscal period ended
Mar. 2011 (11th FP)[Points to note] It is planned to be permitted to record the allowance for disaster losses as losses under the “special account for disasterlosses” pursuant to the specific circular, “Treatment of Corporation Tax on Expenses Related to the Great East Japan
Earthquake (Circular on Law Interpretation)” delivered by the National Tax Agency as of April 20, 2011. As such, we consider
that there will be no problem of “inconsistency between the accounting treatment and the taxation treatment.” Due to the treatment mentioned above, this matter is not included in the “Assumptions for the Forecast of Results for the Fiscal
Period ending September 2011 (Twelfth Fiscal Period”) disclosed in the “Financial Report for the Fiscal Period ended March
31, 2011” dated May 16, 2011(Japanese only). However, please note that the indicated amount may be changed due to further
investigations or aftershocks in the future.

Portfolio PML
(%)
10

7.6
5.2
5

5.0

0
Period ended Period ended Period ended
Mar. 2006
Sep. 2008
Mar. 2011(1st period) (6th period) (11th period)8

[Reference] Growth Strategy for a New Stage
Announced in May 2010 with additions in November 2010
Phase I (1 to 2 years)
Management
PolicyPrioritize the promotion ofstabilizing our financial standing- Assuming implementation of 3 to 5 years -Phase II (2 to 3 years)
Management
PolicyEnhance profitability bysignificantly increasing asset size

 Fix interest rates , extend the terms of loans
and diversify repayment dates
 Release assets from collateral security
 Strengthen and broaden bank relationships

 Enhance our financial standing by implementing
public offerings at an appropriate timing, size andstructure Discuss diversifying financing methods

External growth
Strategy

Utilization of the pipelines of the new sponsors
 Enhance information collection throughutilization of the Pipeline Support Agreement
 Evaluate acquisition of property within
existing borrowing capacity
 Proactively exchange opinions withpersonnel in charge of property development
at Sekisui House

 Add high quality residential properties to the portfolio
 Discuss utilizing the warehousing function of the newsponsors

Internal Growth
Strategy

Utilization of the know-how and networks of the new sponsors
 Utilize the leasing capability of Sekiwa Real
Estate concerning residential properties
 Enhance the overall management
effectiveness by strategically changing
property management companies of retailfacilities

Strategic
Goal

Aim to recover 6-monthly cash distributions
to the ¥10,000 level at an early stage*Thinking on “conversion to an integrated
REIT corporation focusing on housing”

 Utilize Sekiwa Real Estate Group as the property
management company of residential properties
acquired from the new sponsors
 Increase the value of retail facilities

Conversion to an integrated REIT corporation
focusing on housing*

Financial
Strategy

Utilization of the creditworthiness of the new sponsors

Aim to grow earnings based on doubling of asset size to ¥200
billion with due consideration given to cash distribution level

Aim to develop into a REIT that has a strong financial standing through increase of asset size focusedon maximizing unitholder returns by building a portfolio centering on high-quality residential properties.
92. Business Results for the Eleventh
Fiscal Period Ended March 31, 2011

Prime Maison HIGASHISAKURA

Financial Strategy ~ Initiatives to Promote Stabilizing of Financial Standing (1) ~Overview of Financing Activities
Promoted Stabilizing of Financial Standing and Achieved the Targeted Level Established in the Financial StrategyNewborrowings
in Oct. 2010
Refinancing
in Feb. 2011

Refinancing
in May 2011

Loan Amount

LenderLoan Term

Interest Rate/
SpreadCollateral¥2.8 billion

Four existing lenders
including Mitsubishi UFJ
Trust and Banking

2 years 5 months

Floating 0.8%

Unsecured¥15.2 billion¥2.85 billion

Six existing lenders including
Mizuho Corporate Bank

¥9.5 billion¥5.7 billion

3 years
6 months
2 years
6 months

Fixed

0.7%

Unsecured

Sustention of Rating
As of April 13, 2011
■ Rating agency
Rating and Investment
Information, Inc. (R&I)

Floating■ Issuer rating
A (Rating outlook: Stable)

Three existing lenders
including Development
Bank of Japan

4 years 10 months

Fixed

0.8%

Unsecured

Reduction of Borrowing Costs
Steadily Realized Significant Reduction of Borrowing Costs by Utilizing the Creditworthiness of Sekisui House and Other Efforts
Borrowing related expenses(million yen)

629

611

215

222

600
400
200

85
328

Interest expenses on investment corporation bonds

509
Achieved
reductionof ¥17 million

50
338

Achieved
reductionof ¥102 million

449

126
50
332

Interest expenses

61
50
Estimating
reductionof ¥60 million

336

0
Fiscal Period Ended Mar. 31, 2010
Fiscal Period Ended Sep. 30, 2010
Fiscal Period Ended Mar. 31, 2011
Fiscal Period Ending Sep. 30, 2011
(Ninth Fiscal Period)(Tenth Fiscal Period)(Eleventh Fiscal Period)(Twelfth Fiscal Period)-¥1,979 million＋¥2,158million
Period-end balance of＋¥2,645million¥51,208 million¥49,229 million¥51,874 million¥54,032 million
interest-bearing debt

OutlookNotes: 1. Amounts are rounded down to the nearest million yen.
2. The fiscal period ending September 30, 2011 (twelfth fiscal period) outlook are figures based on the assumption that there are no new borrowings other than the refinancing implemented in May 2011
and the new borrowings and refinancing scheduled for June and July 2011.
3. Assumptions are made that the refinancing and new borrowings scheduled for the fiscal period ending September 30, 2011 (twelfth fiscal period) will be implemented under similar economic conditions
as the refinancing implemented in the fiscal period ended March 31, 2011 (eleventh fiscal period).

11

Financial Strategy ~ Initiatives to Promote Stabilizing of Financial Standing (2) ~Fix Interest rates, Extend Loan Terms, and Diversify Repayment Dates
Targeted Levels Achieved for (1) Ratio of Fixed Rate Loans Payable, (2) Ratio of Long-term Liabilities and (3) Diversified Repayment Dates
Ratio of Fixed/Floating Rate Loans Payable

Ratio of Long/Short-Term Loans Payable

Changes in average remaining term of loans(Notes 1 and 2)(Notes 1 and 2)(Note 3 and 4)

Floating

100%Long-term

FixedLong-term (current portion)

38.7%

37.1%

16.9%

21.8%

34.6%

37.1%

26.8%

50%

62.9%

62.9%

50%

27.4%

61.3%
53.3%

78.2%

16.3%

2.0

83.7%

1.5

56.3%

Sep. 30,
2010

Mar. 31,2011(1) Targeted ratio of fixed rate loans payable: 60 – 80%

Diversified Repayment Dates (Note 3)

Sep. 30,
2010

Mar. 31,2011

Mar. 31,2010

May 9,
2011(2) Targeted ratio of long-term liabilities: 80 – 90%

Investment corporation bonds

12,000
9,000
6,000
3,000
3,450

5,000

10,137

2,800

6,587
7,342

Sep. 30,
2010

Mar. 31,2011

May 9,
2011

Average remaining term of loans was extended

As of May 9, 2011
Long-term loans payable (Note 5)( million yen)

1.0 year

0.0
Mar. 31,2010

May 9,
2011

1.5
years

0.5

0%
Mar. 31,
2010

2.2
years

1.0

38.0%

0%

2.0
years

2.5

100%
46.7%

(year)

Short-term

Refinancing implemented in thefiscal period ended March 2011
New loans borrowed in the fiscal
period ended March 2011
Refinancing implemented on
May 9, 2011

9,509

5,700
2,850

0
Mar. 31, 2011 Sep. 30, 2011 Mar. 31, 2012 Sep. 30, 2012 Mar. 31, 2013 Sep. 30, 2013 Mar. 31, 2014 Sep. 30, 2014 Mar. 31, 2015 Sep. 30, 2015 Mar. 31, 2016

(3) Diversified Repayment Dates: Set up Repayment Dates in Around 2 to 5 Years’ Range, Centering on 3-Year Loan Terms
Notes: 1. Percentage figures are rounded to the nearest first decimal place.
2. Stated as the percentage of total interest-bearing debt (borrowings + investment corporation bonds + interest-bearing tenant leasehold and security deposits) .
3. Does not include interest-bearing tenant leasehold and security deposits.
4. The figures are the result of calculation based on the weighted average using the remaining terms from each date to the repayment (redemption) dates of loans and investment corporation bonds,
and their balances, and rounded down to the nearest first decimal place.
5. Includes current portion of long-term loans payable.

12Financial Strategy~Overview of Interest-Bearing Debt as of March 31, 2011~

Overview of Interest-Bearing Debt
Outstanding Balance

Period-on-Period Comparison of Interest-Bearing Debt

Average Interest Rate on
Procurement (Note 2)(million yen)

60,000

Short-term loans payable- million-%

50,000Long-term loans payable(Note 3)

¥45,575 million

1.4%

40,000Interest-bearing deposits¥1,298 million

2.0%

30,000Investment corporation bonds(Note 3)
Total interest-bearing debt

LTV (Note 4)¥5,000 million¥51,874 million

2.0%

5,000
1,298

5,000
1,440

Investment corporation
bonds
Investment corporation
bonds due within one year
Interest-bearing deposit

21,26639,275Long-term loans payable

20,00013,200

1.4%

10,000

48.3%

0

8,322

6,300

Sep. 30, 2010

Mar. 31, 2011

Current portion of long-termloans payable
Short-term loans payable

Loans Payable Outstanding by Financial Institution
Financial Institution

Outstanding Balance

Mizuho Corporate Bank, Ltd.
Sumitomo Mitsui Banking Corporation
The Norinchukin Bank
Mitsubishi UFJ Trust and Banking Corporation
The Sumitomo Trust and Banking Co., Ltd.
Development Bank of Japan Inc.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Resona Bank, Ltd.
Mizuho Trust & Banking Co., Ltd.
Aozora Bank, Ltd.
The Chuo Mitsui Trust and Banking
Company, Limited
The Senshu Ikeda Bank, Ltd.
The 77 Bank, Ltd.
The Hiroshima Bank, Ltd.
The Yamaguchi Bank, Ltd.

Total Debt

Share

¥9,832 million¥9,273 million¥3,852 million¥3,642 million¥3,500 million¥2,941 million¥2,800 million¥2,750 million¥1,984 million¥1,500 million

21.6%
20.3%
8.5%
8.0%
7.7%
6.5%
6.1%
6.0%
4.4%
3.3%

¥1,500 million

3.3%¥500 million¥500 million¥500 million¥500 million¥45,575 million

1.1%
1.1%
1.1%
1.1%
100.0%

Maintained a bank formation comprised ofmajor domestic financial institutions
1.1%

1.1%

1.1%

Mizuho Corporate Bank

1.1%

Sumitomo Mitsui Banking
Norinchukin Bank

3.3%
3.3%
4.4%

Mitsubishi UFJ Trust and Banking
The Sumitomo Trust and Banking

21.6%

6.0%

Development Bank of JapanThe Bank of Tokyo-Mitsubishi UFJ
Resona Bank

6.1%

Mizuho Trust & Banking

20.3%

6.5%

Aozora BankThe Chuo Mitsui Trust and Banking

7.7%
8.0%

Senshu Ikeda Bank

8.5%

77 Bank
Hiroshima Bank
Yamaguchi Bank

Notes: 1. Concerning figures in the graphs and tables above, amounts of less than one million yen are rounded down and percentage figures are rounded to the nearest first decimal place.
2. The average interest rate on procurement is the weighted average of applied interest rates as of March 31, 2011, and the figures are rounded to the nearest first decimal place.
3. Includes current portion of long-term loans payable and investment corporation bonds due within one year.
4. LTV = Period-end total interest-bearing debt / Period-end total assets (Interest-bearing debt = Borrowings + Investment corporation bonds + Interest-bearing tenant leasehold and security deposits)

13External Growth Strategy ~Property Acquisitions Utilizing the Pipelines with Sponsors, Etc. (1)~Changes in Total Acquisition Prices
Steadily Implemented Property Acquisitions within the Borrowing Capacity by Utilizing the Pipelines with Sponsors, Etc.

(billion yen)

(2) Tre Di Casa
SANGENJAYA(1) Prime Maison
3 properties

110
105

¥0.714¥3.34 billion

10095billion¥99.9¥103.9 billion(3) MITEZZA C6

2.26
billion¥106.2billion¥103.2billionbillion90
Sep. 30, 2010(End of Tenth Fiscal Period)

Oct. 1, 2010
(Eleventh Fiscal Period)

Mar. 25, 2011
(Eleventh Fiscal Period)

Jun. 10, 2011 (Outlook)(Twelfth Fiscal Period)

Secure Stable Opportunities for Property Acquisitions
Focus on Utilizing the Pipelines with Sponsors while Utilizing Asset Management Company’s External Acquisition Channel

SponsorSponsorSekisui House, Ltd.
Prime Maison MUSASHINONOMORI(1) Prime Maison HIGASHISAKURA
Prime Maison KAYABAKOEN

Sekisui House SI Asset Management, Ltd.

(2) Tre Di Casa SANGENJAYA

Original channel(3) MITEZZA C6 (planned)14External Growth Strategy ~Property Acquisitions Utilizing the Pipelines with Sponsors, Etc. (2)~Properties Acquired in the Fiscal Period Ended March 31, 2011 (Eleventh Fiscal Period)(1) Acquired 3 Prime Maison Series Properties Located in the “Greater Tokyo / Adjoining Cities” and “Major Regional Cities” Areas (Utilizing the Pipelines with Sekisui House)

Residence - Prime Maison MUSASHINONOMORI Residence 50
51

Prime Maison HIGASHISAKURA

Residence 52

Prime Maison KAYABAKOEN

Location

Josuihoncho, Kodaira-shi, Tokyo

Location

Higashisakura, Higashi-ku,
Nagoya-shi, Aichi

Location

Kayaba, Chikusa-ku, Nagoyashi, Aichi

Completed

Dec. 2007

CompletedFeb. 2008

CompletedNov. 2006

Acquisition date

Oct. 1, 2010

Acquisition date

Oct. 1, 2010

Acquisition date

Oct. 1, 2010

Acquisition price1.56 billion yen

Acquisition price1.14 billion yen

Acquisition price

640 million yen(2) Acquired a Property with Focus on Living Environment in the “Central Tokyo / Jonan Area” (Utilizing the Pipelines with Spring Investment)
Residence Tre Di Casa SANGENJAYA
53
Location

Shimouma, Setagaya-ku, Tokyo

Completed

Jan. 2008

Closest station

16-min. walk from Sangenjaya Station on Total leasable floor
the Tokyu Denen Toshi Line
space

Construction and number offloorsRC, 5F

Total number ofleasable units

25(Include 1 store)

Site area

473.85m2

Acquisition dateMar. 25, 2011

Total floor area

1,006.89m2

Acquisition price

714 million yen

Main residential type

Single and Compact Types

Appraisal value (Note)

724 million yen (As of Feb. 3, 2011)894.64m2

Note: The appraisal value obtained as of the end of the fiscal period ended March 2011 (eleventh fiscal period) remained the same at ¥724 million.

15

External Growth Strategy ~Property Acquisitions Utilizing the Pipelines with Sponsors, Etc. (3)~Properties Planned for Acquisition in the Fiscal Period ending September 30, 2011 (Twelfth Fiscal Period)(3) Plans to Acquire a Property Featuring Good Design and Located Near Station in Greater Tokyo / Adjoining Cities(Acquisition through Asset Management Company’s Original Channel)

Residence - 54

MITEZZA C6 (Purchace agreement concluded on May 11, 2011)

Location

Oyamahigashicho, Itabashi –ku,Tokyo

Closest station

3-min. walk from Itabashi
Kuyakusho-mae Station on the
Subway Mita Line
10-min. walk from Oyama Station on
the Tobu Tojo Line

Construction and number of floors

RC, 14F

Site area

773.48㎡

Total floor area

5,249.34㎡

Main residential type

Single Type

Completed

Mar. 2008

Total leasable floor space

4,036.66㎡

Total number of leasable units

124 (Including 4 offices)

Planned acquisition dateJun. 10, 2011

Acquisition price2.26 billion yen

Appraisal value

2.3 billion yen ( As of April 1, 2011)

A property winning the Good Design Award 2008
The property is a unique rental condominium designed forbicycle users, whose number is increasing in line withheightened consciousness for environmental and health issues,
as assumed tenants. Still, it is equipped with functions andfacilities which rental condominiums generally recognized tohave high quality. In addition, pollen removal devices are
installed at this designer property.

Bicycle maintenance space

Pollen removal device[Reference] Rental Housing Properties Owned by Sekisui House

Note: There is no specific plan to acquire the properties shown below.

Residencia Ginza East

Prime Maison GOKISO

Prime Maison YUHIGAOKA

Prime Maison KITA TANABE

Prime Maison TERIHA

Chuo-ku, Tokyo

Nagoya-shi, Aichi

Osaka-shi, Osaka

Osaka-shi, Osaka

Fukuoka-shi, Fukuoka
16External Growth Strategy~Direction of Future External Growth~

Modification to Management Guidelines (Change in Allocation Rates by Asset Class)
Increase Allocation Rates of Residential Properties, and Decrease the Rateof Retail Properties
Allocation Rate (Acquisition Price Basis)
Asset Class of Real Estate Related Assets

Core Asset
Balance asset

Before Modification

After Modification

45～75%
25～55%
0～15%

70～85%
15～30%
0～15%

Residences
RetailOfficePurpose of Modification
Prepare and reinforce infrastructure for implementing the “Conversion to an integrated REIT
corporation focusing on housing”, with an aim to achieve the Phase II strategic goals

Aim for external growth centering on
high-quality rental housing developed by
Sekisui House, the main sponsor*The Investment Corporation intends to continue ownership ofexisting retail properties for some time.

Portfolio Development Policy for Residential Properties
RegionMain investment targets are Central Tokyo / Jonan Area and Greater Tokyo / Adjoining Cities
Also diversify investments in Major Regional Cities in order to reduce regional economy risks and earthquake risks, etc.

Residential
Type

Focus on Single / Compact Types but also invest in Family / Large Types<Image Chart>
RegionResidential
Type

Central Tokyo /Jonan Area

Greater Tokyo /Adjoining Cities
Major Regional
CitiesFuture Direction
SingleCompact

Family/ Large

Focusedinvestment
targets
Targets for diversified investment

Strengths of Sekisui House
・The Sekisui House Group is a leading company of the housing industry and conducts
business throughout Japan. It features strengths not only in the Tokyo metropolitan area but
also in Major Regional Cities.
・It boasts development records of high-quality and versatile rental housing centering on the
Compact / Family Types
・The networks of the Sekisui House Group exercise comprehensive capabilities that allow
expectations for planning and development of high-quality, Single Type rental housing.

No major change from the portfolio development policy employed to date・Continue to position properties with Single / Compact Types in theCentral Tokyo / Jonan Area as focused investment targets, based on
the thinking that such properties constitute the core of the rental
housing market
・In addition, take advantage of the strengths of the Sekisui House Groupfor properties located in Major Regional Cities or properties with Family /Large Types, and proactively consider acquisitions of carefully selected
properties that call for stable rental demand, in an effort to realize
diversified investment to a certain degree

Pipelines for Property Acquisitions
Present Pipelines
Sekisui House, Ltd.

Pipelines Expected to Expand in the Future
Sekiwa Real Estate Group17

Internal Growth Strategy (Residential) ~Analysis of Occupancy and Rent Trends~
Occupancy Status by Region for Residential Properties Owned by the Investment Corporation (Note 1)
100%
Entire Portfolio (Residential Properties)
Central Tokyo / Jonan Area

96.5%

96.5%

Greater Tokyo / Adjoining Cities

97.3%

96.2%

97.1%

94.5%

Major Regional Cities
95%

96.5%

Average Occupancy Rates
Entire Portfolio (Residential Properties)

95.7%

Central Tokyo / Jonan Area

95.6%

Greater Tokyo / Adjoining Cities

95.5%

Major Regional Cities

95.9%

96.9%

95.9%

94.0%

94.7%

93.5%
90%
End of Mar. 2010(End of ninth fiscal period)

End of Jun.

End of Sep. 2010(End of tenth fiscal period)

End of Dec.

End of Mar. 2011(End of eleventh fiscal period)

Rent Revisions for Residential Properties Owned by the Investment Corporation (Note 2)
Entire Portfolio (Residential Properties)

Central Tokyo / Jonan Area
Total monthly contracted rent

Greater Tokyo / Adjoining Cities

Major Regional Cities

Average rent rate per contract

110

100

100
100

102.4
99.2

102.8

97.9

104.4
102.2
97.4

90

104.6

104.8

100

100

100

100

97.7

96.0

100.4

101.9

99.3

98.2

99.1
97.7

95.2

100

101.0

100.3

101.0

100

99.8

98.6

98.5

80

70

Sep. 30, Mar. 31, Sep. 30, Mar. 31,
2009
2010
2010
2011

Sep. 30, Mar. 31, Sep. 30, Mar. 31,
2009
2010
2010
2011

Sep. 30, Mar. 31, Sep. 30, Mar. 31,
2009
2010
2010
2011

Sep. 30, Mar. 31, Sep. 30, Mar. 31,
2009
2010
2010
2011

Generally maintained the same level of occupancy rates and total monthly contracted rents. Rent adjustments started to show signs of bottoming out.
Will focus on maintaining high occupancy rates by setting rents at appropriate levels, closely watching the impact of the Great East Japan Earthquake on
the real estate leasing market.
Notes: 1. The fiscal period end occupancy rates and the average occupancy rates for the period of residential properties by region include stores or offices in residential properties. In addition, the average occupancy rates for the period are the averages of theoccupancy rates at the end of each month of the fiscal period. 2. Figures on the graph present changes from the end of the fiscal period ended September 30, 2009 (eighth fiscal period) based on the total contracted rent and average rent rate per contr act as of
September 30, 2009 being set as 100. Stores or offices in residential properties, and the 4 properties acquired in the fiscal period ended March 2011 (eleventh fiscal period), are not included in the base of calculations.

18Internal Growth Strategy (Residence) ~Measures to Reduce Costs~
Cost Reductions by Maintaining or Increasing Contract Renewal Rates
Implemented various measures as indicated below during the fiscal period
ended March 2011 (eleventh fiscal period), continuously aiming to maintainand increase contract renewal rates
Make an approach at an early stage and individually to tenantswith planned contract renewal
Respond to requests collected from questionnaires to tenants at
an early stage
Thoroughly work to maintain and manage common-use areasand promote cleaning and beautifying
Following the previous fiscal period, successfully secured a certain level of
performance by implementing elaborate measures for enhanced tenantsatisfaction

81.5%
80%

83.8%
80.3%

79.2%

Lowering of the basic contracted electric capacity by installing new
equipment, which has been implemented from the eighth fiscal period
ended September 30, 2009, was also continuously implemented in theeleventh fiscal period
Fiscal Period
Sep. 30, 2009(eighthperiod)Mar. 31, 2010
(ninth period)

Sep. 30, 2010
(tenth period)

Contract Renewal Rates

90%

Cost Reduction by Reviewing Basic Contracted Electric Capacity

81.8%

78.7%

74.1%
70%

Properties at which installation work was implemented
J-FLATS YOKOHAMA (parking lots)

ACTHILLS YACHIYOFITL KAMEIDO

Spacia KAWASAKI Ⅱ

J-FLATS YOKOHAMAFITL SHINAGAWA SEASIDE

Spacia HAKURAKU

J-FLATS HIGASHISHINAGAWA

Spacia OISENDAIZAKA

J-FLATS ITABASHIKUYAKUSHOMAE

J-FLATS MINAMIHORIE

PREGIO NISHINAKAJIMA

J-FLATS SHIJONISHINOTOIN

J-FLATS HAKATAHIGASHI

Spacia AZABUJUBAN IIFITL KOMAGATA

Spacia EBISU II

Spacia MACHIDA

Spacia KANDA

Spacia KAWASAKI

Spacia MEGUROFUDOMAE-

Mar. 31, 2011
(eleventh
period)Expects cost reduction of about ¥2,110,000 / year in total
electricity costs for the 7 properties where the installation
work was also implemented in the eleventh fiscal period

60%

50%
Mar. 31,2008

Sep. 30,
2008

Mar. 31,2009

Sep. 30,
2009

Mar. 31,2010

Sep. 30,
2010

Mar. 31,2011

Note: Renewal rate: The ratio of the number of residential units for which contracts were renewedagainst the number of residential units due for contract renewal during the fiscal period

In order to promote improvements in profitability, work to realize: Reduction of such costs as restoration and leasing associated withtenant replacement
 Maintenance and improvement of occupancy rates throughdecreased vacancy rates
by continuously maintaining and increasing the contract renewal rates

Cost Reduction by Reviewing Building Management (BM) Expenses
Reviewing of the BM expenses, which has been implemented from theninth fiscal period ended March 2010, was implemented in the eleventh
fiscal period also

⇒ Realized further reduction of BM expenses while maintaining the level ofservices provided

Cost reduction of ¥ 1,531,000 / year in total for the BM expenses achieved at
the 5 properties for which the review was madeCost reduction of ¥14,731,000 / year achieved when combined with the
reduction of ¥13,199,000 realized in the fiscal period ended March 201019

Internal Growth Strategy (Retail) ~Occupancy and Leasing Status of Retail Properties~
Occupancy Status of Retail Properties
HAMAMATSU Plaza

Other retail properties (7 properties)

Entire retail properties

100%

100.0%

100.0%

100.0%

97.3%
95%

96.9%

94.9%

93.5%

94.3%

100.0%
96.9%
94.3%●HAMAMATSU Plaza
September 2010
Implemented renewal work with the intention of reviewing thetarget demographics and the concept of HAMAMATSU West
Building

90%

88.1%
85%
End of Aug. 2010

End of Sep. 2010(End of 10th fiscal period)

End of Dec. 2010

End of Mar. 2011(End of 11th fiscal period)

Initiatives for Early Lease-up of HAMAMATSU West Building Implemented renewal work earlier than schedule for some vacant compartments inorder to solicit tenants at an early stage (construction cost approx. ¥10 million ⇒recorded for the fiscal period ended March 2011 (eleventh fiscal period)

Expanded leasing channels centering on XYMAX CUBE Corporation, theproperty management company(Companies cooperating in leasing: real estate developers, advertisement
agencies, etc.)
Held an event after the renewal – the first joint eventfor the East and the West Areas of HAMAMATSU
Plaza – as part of efforts for enhanced recognitionand vitalization of the facilities【Date: November 20 and 21, 2010
customers: more than 8,000】

Number of attending

Major Changes in Other Retail Properties●b-town JINGUMAE II Renewed agreement concluded with Paul Smith Japan Limited, the tenant,in accordance with the expiration of the fixed-term building lease agreement

Agreement term: April 1, 2011 – March 31, 2016
Leased (leasable) floor space: 499.67m2 (Note)(Note) Upon concluding the renewed agreement, the leased (leasable) floor space was changed from494.84 m2 to 499.67 m2.

●b-toss IKEBUKURO
 Lawsuit underway with Tokyu Recreation Co., Ltd., the tenant, on rent decrease Cancellation of the building lease agreement (rent guarantee type)offered by Tokyu Recreation as of April 1, 2011

Present Scheme

Status after Renewal
T.T BOWL
Hamamatsu Plaza West
Opened in Nov. 2010

End of the fiscal period ended March 2011 (eleventh fiscal period)
A certain level of occupancy rate (94.3%) is maintained, but anissue to be solved is the leasing of the vacant compartments
totaling 4,643.80 m2

Dance Studio MJ East
Opened in Dec. 2010

Nikken Gakuin
Hamamatsu School
Class opened in Jan. 2011

Master lease
company

Mizuho Trust &Banking Co., Ltd.

Trust
agreement

Master leaseagreement (passthrough type)

Sekisui House SI
Investment Corporation

Tokyu Recreation
Co., Ltd.
Building leaseagreement (rentguarantee type)

Building
subleaseagreements

End tenants

20

Internal Growth Strategy (Retail) ~Status of Contract Revisions with Existing Tenants~
Status of Contract Revisions with Existing Tenants (Tenant Changes between Oct. 1, 2010 and May 16, 2011)[Beginning of Eleventh Fiscal Period - Announcement of the Eleventh Fiscal Period Results]
Cases

Variation(monthly amount)

Percentage in Total Monthly Rents from
Tenants of Retail Properties at End of
Tenth Fiscal Period (Note 3)

Rent Increase

0

-

-

Rent unchanged

2 cases--Rent Decrease

6 cases (Note 1)-¥2,850thousand-1.7%

Cancellation ofContract

3 cases (Note 2)-¥3,368
thousand-2.0%

Remarks

Added clauses to the agreements with some tenants, forbidding rent
revisions or cancellation before expiration for the period through the end ofagreement terms

Notes 1. Includes a case in which the contracting party of the lease agreement for the administration building of HAMAMATSU Plaza was changed in accordance with the change of the property management company.
2. Includes a case in which the lease agreement for parking lots was cancelled.
3. The figures indicate the percentages of the variations (monthly amounts) given in the column to the left to the total monthly rents (including common charges and rents for parking lots) based on the lease agreements with tenants of retailproperties valid as of the end of September 2010.

Status of Management of Entire Retail Properties (Eleventh Fiscal Period Results and Twelfth Fiscal Period Outlook)
Fiscal Period Ended Mar. 31,
2011 (Eleventh Fiscal Period)
Results

Fiscal Period Ending Sep.
30, 2011 (Twelfth Fiscal
Period) Outlook

Average occupancy
ratios for the period

96.9%

96.9%

NOI yields

5.2%

4.9%

The figures in the column of “Fiscal Period Ending Sep. 30, 2011 (Twelfth Fiscal
Period) Outlook” have been calculated based on the valid lease agreements as of theend of the fiscal period ended March 2011 (eleventh fiscal period) and also factoringin the tenant changes anticipated as of the date of this material. The NOI yield foreach fiscal period is the ratio calculated by dividing the annualized NOI of each fiscal
period by the total amount of initial acquisition price of respective retail properties,
rounded to the nearest first decimal place.

Assumptions for Expected NOI yield of the Twelfth Fiscal Period■Vacant Compartments Related・Concerning vacant compartments as of the end of the fiscal period ended March 31, 2011 (eleventh fiscal period) inretail properties (4,643.80m2 of the leasable floor space), conservative assumption is made that there will be a certain
period during which these compartments will remain vacant■Existing Tenants Related
・In addition to the status of revisions to the content of contracts stated above, assumption is made that there
will be a certain amount of decrease based on lease agreements for some tenants

Corresponding Policy
Aim to solicit tenants during the fiscal period ending
September 2011 (twelfth fiscal period)
Currently in talks with potential tenants for setting up
storesCorresponding Policy
Enhance relationships with existing tenants
While the basic policy is to respond under the terms
and conditions of current leasing agreements, take acase-by-case approach depending on the status oftenants21

3. Forecasts for the Twelfth Fiscal Period Ending
September 30, 2011 and Future Policy

Prime Maison HIGASHISAKURA

Forecasts for the Twelfth Fiscal Period Ending September 30, 2011
Cash Distributions per Unit

Operating Revenue, Ordinary Income and Net Income
Operating revenue(million yen)

4,000

Ordinary income(yen)

Net income

16,000Decreased income due to payment of settlement money withcancellation of planned property acquisitions

14,0003,500

12,0003,000

10,000

2,500

8,000

2,000

6,000

1,500

4,000

1,000

2,000

500
0

Decreased income due to payment of settlement money withcancellation of planned property acquisitions

Period ended

Mar. 2009

Period ending

Sep. 2009

Mar. 2010

Sep. 2010

Mar. 2011

Sep. 2011(outlook)

0

Period ended

Period ending

Mar. 2009

Sep. 2009

Mar. 2010

Sep. 2010

Mar. 2011

Sep. 2011(outlook)

Fiscal Period Ended
Mar. 31, 2009(182 days)

Fiscal Period Ended
Sep. 30, 2009(183 days)

Fiscal Period Ended
Mar. 31, 2010
(182 days)

Fiscal Period Ended
Sep. 30, 2010(183 days)

Fiscal Period Ended
Mar.31, 2011(182 days)

Fiscal Period Ending
Sep. 30, 2011(183 days) (outlook)

Operating revenue (million yen)

3,432

3,391

3,402

3,334

3,462

3,529

Ordinary income (million yen)

1,140

1,075

1,053

956

1,144

1,136

574

1,074

1,052

938

1,126

1,135

5,485

10,262

10,052

8,160

9,793

9,870

Net income (million yen)

Cash distributions per unit (yen)<Assumptions for forecast of fiscal period ending September 30, 2011>◆Assets under management: 58 properties in total comprising the 57 properties owned as of the fiscal period ended March 31, 2011 (eleventh fiscal period) plus MITEZZA C6 planned to beacquired on June 10, 2011
◆Management fees: Approx. ¥313 million ◆Noncurrent asset tax, etc. that will be allocated as expenses related to rent business: Approx. ¥222 million◆Depreciation and amortization: Approx. ¥671 million ◆Interest expenses, loan origination fees, etc.: Approx. ¥449 million ◆Number of investment units issued and outstanding: 115,070 units
Notes: 1. Amounts less than the indicated unit are rounded down.
2. The above figures are calculated based upon specific assumptions as of May 16, 2011. Actual operating revenue, ordinary income, net income and cash distributions per unit may differ as a result ofsubsequent acquisitions or sales of real estate, trends in real estate markets, changes in the operating environment or other conditions affecting the Investment Corporation. The above forecasts are notintended to be guarantees of business results or cash distributions.

23

Internal Growth Strategy

External Growth Strategy

Financial Strategy

Progress of Growth Strategy and Recognized Challenges
Phase I (1 to 2 years)

Progress in Growth Strategy

Management Prioritize the promotion of
Policystabilizing our financial standing

Achieved certain results through the implementation of external growth andinternal growth strategies, while placing top priority on stabilizing financial standing

Utilization of the creditworthiness of the sponsors
 Fix interest rates , extend the terms of loans
and diversify repayment dates
 Release assets from collateral security
 Strengthen and broaden bank relationships

Utilization of the pipelines of the sponsors
 Enhance information collection through utilizationof the Pipeline Support Agreement
 Evaluate acquisition of property within existing
borrowing capacity
 Proactively exchange opinions with personnel incharge of property development at Sekisui House

Utilization of the know-how and networks of the sponsors

 Utilize the leasing capability of Sekiwa Real
Estate concerning residential properties
 Enhance the overall management
effectiveness by strategically changing
property management companies of retailfacilities

Strategic Goal
Aim to recover 6-monthly cash distributions
to the ¥10,000 level at an early stage■ Achieved the targeted level established in the financial
strategy
Challenge
Maintain stability of financial standing by utilizing thecreditworthiness of Sekisui House■ Steadily implemented property acquisitions within the limit ofborrowing capacity by utilizing the pipelines with sponsors,
etc.
Challenge
Conduct further property acquisitions utilizing borrowing capacity■ Maintained high levels of occupancy rates of residential
properties through such measures as assigning the
Sekiwa Real Estate Group as property manager
Challenge
Continue focus on leasing of vacant compartments at retail properties,
aiming for full occupancy

Challenge

Fiscal period ending September 30, 2011 (twelfth fiscal period)
Forecast cash distribution: ¥ 9,870
Raise cash distributions to the ¥10,000 level; stabilize the level of cash distributions

24

Current Policy
Forecast cash distribution per unit
for the fiscal period ending September 2011 (12th fiscal period)

Assumes to be ¥9,870

Current Policy

・Raise cash distributions to the¥10,000 level at an early stage
・Stabilize the level of cash distributions

Finance・Maintain and enhance stability of financial standing (Secure implementation of refinancing and borrowings offunds for property acquisitions)・Consider acquiring new credit ratings
・Optimize the proportion of fixed and floating interest rate borrowings (Carefully watch trends of long-term
interest rates)

External Growth・Secure closing of property acquisitions scheduled for June 2011
・Maintain and enhance cooperation relationship with property development divisions at Sekisui House・Expand and enhance networks for property information

Make up for the decreasing
trend of revenues from retailproperties by employing
measures to reinforce
profitability through external
and internal growth primarily
in residential properties

Internal Growth・Maintain high levels of occupancy rates of residential properties and set appropriate rents based on respective
property characteristics
・Improve occupancy rates of retail properties (expansion and enhancement of leasing structure for the
HAMAMATSU West Building of HAMAMATSU Plaza)
・Further reduce fixed costs for the management of owned properties

Major Economic Events Requiring Careful Observation Concerning Impacts of the Great East Japan Earthquakeon the Investment Corporation
・Trends of the nuclear power plant issues and power supply (Impact on the economy as a whole)・Trends in the real estate leasing market (Impact on occupancy rates and rent levels)
・Trends in the real estate transaction market (Impact on property appraisal values)
・Trends of corporate demands for funds (Impact on financial institutions)・Trends of financial burdens on the government for demand for restoration (Impact on interest rate rise)・Trends in the J-REIT market (Impact on investment unit prices)25

4. Appendix

Prime Maison HIGASHISAKURA

Balance Sheets (1)10th fiscal period (As of September 30, 2010)
Million yen

11th fiscal period (As of March 31, 2011)

Percent of total

Million yen

Percent of total

ChangeMillion yen

Period on period (%)

AssetsCurrent assets
Cash and deposits

2,539

1,731

-807

Cash and deposits in trust

3,319

3,348

28

Operating accounts receivable

55

52

-2

Prepaid expenses

212

103

-108

Deferred tax assets

0

0

-

Other

8

9

0

Allowance for doubtful accounts
Total current assts

-24
6,111

-20
5.9

5,225

3
4.9

-886

-14.5

Noncurrent assets
Property, plant and equipment
Buildings in trust

41,121

43,402

Accumulated depreciation-4,778-5,389-611

Buildings in trust, net

36,34338,013

1,669

Structures in trust

2,281

467

529

62

Accumulated depreciation

-127

-142

-15

Structures in trust, net

339

386

47

Machinery and equipment in trust

421

646

225

Accumulated depreciation

-111

-132

-20

Machinery and equipment in trust, net

309

513

204
13

Tools, furniture and fixtures in trust

24

38

Accumulated depreciation

-9

-11

-1

Tools, furniture and fixtures in trust, net

15

27

11

60,99762,963

1,965

110

-

Land in trust
Construction in progress in trust
Total property, plant and equipment

98,11593.9

101,904

-110
94.9

3,788

3.9

Intangible assets
Other

5

Total intangible assets

5

5
0.0

5

-0
0.0

-0

-10.3

Investments and other assets
Lease and guarantee deposits

10

10

-

Long-term prepaid expenses

93

118

25

Other

79

Total investments and other assets

182

0.2

213

0.2

30

16.8

98,304

94.1

102,123

95.1

3,818

3.9

Total noncurrent assets

84

5

Deferred assets
Investment corporation bond issuance costs

5

Total deferred assets

5

0.0

3

0.0

-2

-34.3

104,422100.0

107,352

100.0

2,930

2.8

Total Assets

3

-2

27

Balance Sheets (2)10th fiscal period (As of September 30, 2010)
Million yen

Percent of total

11th fiscal period (As of March 31, 2011)
Million yen

Percent of total

ChangeMillion yen

Period on period (%)

Liabilities
Current liabilities
Operating accounts payable

57

155

97

Short-term loans payable

3,200

-

-3,200Investment corporation bond due within one year

-

5,000

5,000

18,322

6,300-12,022

Accounts payable – other

269

284

14

Accrued expenses

149

84

-65

Income taxes payable

11

0

-11

Consumption taxes payable

18

-

-18

Advances received

410

420

10

Allowance for disaster losses

-

16

16

Other

6

20

Current portion of long-term loans payable

Total current liabilities

22,44621.5

12,282

14
11.4-10,164-45.3

Noncurrent liabilities
Investment corporation bond

5,000

-

-5,000Long-term loans payable

21,26639,27518,009Tenant leasehold and security deposits in trust

4,246

Total noncurrent liabilities

30,51229.2

43,41940.5

12,90642.3

52,95950.7

55,702

51.9

2,742

5.2

50,52348.4

50,523

47.1--

Total Liabilities

4,143

-102

Net Assets
Unitholders’ equity
Unitholders’ capital
Surplus
Unappropriated retained earnings (undisposed loss)

939

Total surplus

939

0.9

1,126

1.0

187

20.0

51,462

49.3

51,650

48.1

187

0.4

51,462

49.3

51,650

48.1

187

0.4

104,422100.0

107,352

100.0

2,930

2.8

Total unitholders’ equity
Total Net Assets
Total Liabilities and Net Assets

1,126

187

28

Statements of Income
10th fiscal period
from April 1, 2010
to September 30, 2010

11th fiscal period
from October 1, 2010
to March 31, 2011

Percent of
total

Million yen

ChangePercent of
total

Million yen

Period on period(%)

Million yen

Operating revenue
Rent revenue - real estate

3,334

Total operating revenue

3,334

3,462
100.0

3,462

128
100.0

128

3.8

Operating expenses
Expenses related to rent business

1,401

1,487

Asset management fee

207

207

0

Asset custody fee

10

10

-0

Administrative service fees

26

24

-2

Directors’ compensations

5

3

-1

Provision of allowance for doubtful accounts

14

5

-9

Other operating expenses

92

68

-23

Total operating expenses

1,757

52.7

1,806

52.2

49

2.8

1,576

47.3

1,655

47.8

78

5.0

Operating Income

85

Non-operating income
Interest income

10Reversal of distributions payable

0

0

0

Other

0

0

-0

Total non-operating income

1

0.1

0

-1

0.0

-0

-49.5

Non-operating expenses
Interest expenses

338

332

Interest expenses on investment corporation bonds

50

50

0

Amortization of investment corporation bond issuance costs

2

2

-0

222

126

-95

8

0

Borrowing related expenses
Other
Total non-operating expenses
Ordinary Income

-6

-7

622

18.7

512

14.8

-109

-17.7

956

28.7

1,144

33.0

187

19.6

Extraordinary Losses
Provision of allowance for disaster losses-

Total extraordinary losses

-

-

16

0.4

16

-

Income before Income Taxes

956

28.7

1,127

32.6

171

17.9

Income taxes - current

12

0

-11

-95.1

Income taxes - deferred

5

-

-5

-100.0Total income taxes

17

0.5

0

0.1

-16

-96.5

Net Income

938

28.2

1,126

32.5

187

20.0

0

0.0

0

0.0

-0

-24.4

939

28.2

1,126

32.5

187

20.0

Retained earnings brought forward
Unappropriated Retained Earnings (undisposed loss)

16

16

29

Statements of Cash Flows / Cash Distributions
Statements of Cash Flows
10th fiscal period
from April 1, 2010
to September 30,
2010
Million yen

11th fiscal period
from October 1, 2010
to March 31, 2011

10th fiscal period
from April 1, 2010
to September 30,
2010

11th fiscal period
from October 1, 2010
to March 31, 2011

Million yen

Million yen

Million yen

Net cash provided by (used in) operating activities
Net cash provided by (used in) financing activities

Income before income taxes

956

1,127

Depreciation and amortization

613

650

Repayments of short-term loans payable-9,354

7-

Proceeds from long-term loans payable

14,67918,0092

2

Repayments of long-term loans payable-7,163-12,0229-3

Proceeds from issuance of investment units

1,811

-

Dividends paid

-1,052-939

Net cash provided by (used in) financing
activities-1,078

1,847

Net increase (decrease) in cash and cash
equivalents

179

-778

Cash and cash equivalents at beginning of
period

5,678

5,858

Cash and cash equivalents at end of period

5,858

5,080

10th fiscal period
from April 1, 2010
to September 30, 2010

11th fiscal period
from October 1, 2010
to March 31, 2011

Yen

Yen

Investment unit issuance expenses
Amortization of investment corporation bondissuance costs
Increase (decrease) in allowance for doubtful
accounts
Interest income-1-0Interest expenses

389

383

Provision of allowance for disaster losses-

16

Decrease (increase) in operating accounts
receivable

132

Decrease (increase) in prepaid expenses

47

69

Increase (decrease) in operating accounts payable-581

Increase (decrease) in accounts payable - other-0

7

Increase (decrease) in accrued expenses

-0

-55

Increase (decrease) in consumption taxes payable

14

-18

Increase (decrease) in advances received-810

Decrease (increase) in long-term prepaid expenses

-23

13

Other, net

-22

13

Subtotal

1,991

2,300

Interest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities

1

0

-381

-375

-6

-11

1,605

1,913

Cash Distributions

Net cash provided by (used in) investment activities
Purchase of property, plant and equipment in trust-148-4,432

-5

-

92

121

-280

-223

Decrease (increase) in investments and other assets-4-5

Net cash provided by (used in) investment activities-346-4,539Purchase of intangible assets
Proceeds from tenant leasehold and security deposits
in trust received
Repayments of tenant leasehold and security deposits
in trust received-3,200

I Unappropriated retained earnings

939,029,614

1,126,993,023

II Cash Distributions

938,971,200

1,126,880,510(8,160)(9,793)58,414

112,513

Cash distributions per unit
III Retained earnings brought forward30Summary of Selected Financial Data
10th fiscal period
from April 1, 2010
to September 30, 2010

11th fiscal period
from October 1, 2010
to March 31, 2011

183

182

Total assets

104,422 million yen

107,352 million yen

Net assets

51,462 million yen

51,650 million yen

Unitholders’ capital

50,523 million yen

50,523 million yen

Investment units outstanding

115,070 units

115,070 units

Net assets per unit

447,227 yen

448,860 yen

938 million yen

1,126 million yen

8,160 yen

9,793 yen

Ordinary income to total assets (annualized)

1.8%

2.2%

Return on unitholders’ equity (annualized)

3.7%

4.4%

Unitholders’ equity ratio3

49.3%

48.1%

53

57

262,169.15㎡

272,273.12㎡

96.9%

96.6%

612 million yen

649 million yen

29 million yen

346 million yen

Leasing Net Operating Income (NOI)

2,545 million yen

2,625 million yen

Funds from Operation5 (FFO)

1,552 million yen

1,777 million yen

13,496 yen

15,445 yen

49,229 million yen

51,874 million yen

47.1%

48.3%

49.4%

50.7%

3.7 times

4.3 times

Business days

Total cash distributions
Cash distributions per unit
1

2

Total number of properties
Total rentable floor area
Period-end occupancy rate
Depreciation expense
Capital expenditures
4

FFO per unit
Total interest-bearing debt
Loan to Value6 (LTV)Interest-bearing debt ratio

78Debt Service Coverage Ratio (DSCR)(1) Ordinary income to total assets = Ordinary income (annualized) /Average total assets
Average total assets = (Period-beginning total assets + Period-end total
assets) / 2(2) Return on unitholders’ equity = Net income (annualized) / Average net
assetsAverage net assets = (Period-beginning net assets + Period-end net
assets) / 2(3) Unitholders’ equity ratio = Period-end net assets / Period-end total
assets(4) Leasing NOI = Leasing operating income (= Rent revenue-real estate –Expenses related to rent business) + Depreciation and amortization(Expenses related to rent business)(5) FFO = Net income + Depreciation and amortization(6) LTV = Period-end interest-bearing debt / Period-end total assets
Interest-bearing debt = Borrowings + Investment corporation bonds +Interest-bearing leasehold and security deposits(7) Interest-bearing debt ratio = Period-end interest-bearing debt / (Periodend interest-bearing debt + Unitholders’ capital)(8) DSCR = (Net income + Repayment of interest-bearing debt + Interest
expenses + Depreciation and amortization) / (Repayment of interestbearing debt + Interest expenses)
Note: Ratios are rounded to the nearest first decimal place.

31

Portfolio Summary
As of March 31, 2011 (End of Eleventh Fiscal Period)
Total Acquisition Price (Note 1)

Occupancy Rate

Average Property Age (Note 2)(As of Jun. 10, 2011
(estimate) (Note 4): ¥106,234 million)

96.6%

6.6 years

Total Number of Properties

PML (Entire Portfolio)

Average Property Age (Note 2)

5.0%

5.0 years

Diversification by Region (Note 3)

Diversification by Age (Note 3)¥103,974 million

57 properties(As of Jun. 10, 2011
(estimate) (Note 4): 58 properties)

Diversification by Asset Class (Note 3)

Residential

As of IPO

As of Mar.
31, 2011(End of
Eleventh
Fiscal Period)

As of Jun.
10, 2011(Estimate)(Note 4)
Notes:

49.0%

Retail51.0%(Residential Properties Only)

Less than 1 year
1 year to less than 5 years
5 years to less than 10 years
10 years or more

Central Tokyo/ Jonan Area
Greater Tokyo
Major Regional Cities

37.9%

12.9%

49.2%

37.2%

56.1%

6.6%

72.1%

27.9%

36.8%

26.9%

36.3%

45.0%

34.3%

20.8%

72.6%

27.4%

36.1%

28.4%

35.5%

46.2%

33.5%

20.3%

1. Concerning total acquisition prices, amounts of less than one million yen are rounded down.
2. Average property ages are the result of calculating the weighted average using investment ratios based on acquisition prices and rounded down to the nearest first decimal place.
3. Investment ratios by each category are calculated based on the acquisition price of each investment asset and rounded to the nearest first decimal place. Accordingly, ratio totals may not add up to 100%.
4. Figures are inclusive of the trust beneficiary interest in real estate in Japan scheduled to be acquired on June 10, 2011 (MITEZZA C6).

32

Outline of Portfolio ~Residential Properties~
Primary Properties Owned
Central Tokyo / Jonan Area
Spacia GOTANDA

Spacia GINZA

Greater Tokyo/ Adjoining Cities
J-FLATS YOKOHAMA

Prime Maison MUSASHINONOMORI

Spacia OISENDAIZAKA

Spacia AZABUJUBAN III

Major Regional Cities
S-RESIDENCE
KYOBASHI

Prime Maison
HIGASHISAKURA

33

Outline of Portfolio ~Retail Properties~
Classification by Region (Retail Properties)

Properties Owned
Central Tokyo / Jonan Area

Major
Regional
Cities73.6%

Central Tokyo/
Jonan Areab-town JINGUMAE II

b-town MINAMIAOYAMA

8.9%
Greater
Tokyo

17.5%

As of Mar. 31, 2011

Greater Tokyo/ Adjoining Cities
b-toss IKEBUKURO

KOJIMA NEW
KAMIFUKUOKA

Joy Square YUGAWARA

Major Regional Cities
HAMAMATSU PlazaRINKU
HAGURAZAKI Plaza

Bell Plaza
Shopping Center

Note: Ratios are calculated based on the acquisition price of each property (retail properties) and are rounded to the nearest first decimal place. Accordingly, ratio totals may not add up to 100 percent.

34

Portfolio at a Glance (1)Properties Owned as of March 31, 2011
Acquisition Price

Core Assets

Property No.

Property Name

Location

Site Area (m2)

Total Floor Area (m2)Price(Million yen)Appraisal
Value at End of
Period(Million yen)

Ratio
(%)

Occupancy Rate (%)
As of Sep. 30,
2010

As of Mar. 31,
2011Completion Date

Residence-1

Spacia GINZA

Ginza, Chuo-ku, Tokyo

636.36

7,836.57

5,290

5.1

5,080

97.7

96.8

February 07, 2005

Residence-3

Spacia AZABUJUBAN II

Roppongi, Minato-ku, Tokyo

677.452,317.87

1,730

1.7

1,490

94.7

91.3

January 16, 2004

Residence-4

Spacia EBISU II

Higashi, Shibuya-ku, Tokyo

561.582,452.69

1,960

1.9

1,740

92.3

100.0

June 13, 2003

Residence-5

Spacia EBISU III

Hiroo, Shibuya-ku, Tokyo

169.00871.90

700

0.7

740

96.1

100.0

October 20, 2004

Residence-6

Spacia KANDA

Kandatacho, Chiyoda-ku, Tokyo

307.692,028.19

1,360

1.3

1,250

94.4

98.7

February 20, 2004

Residence-7

Spacia SENDAGAYA

Daikyo-cho, Shinjuku-ku, Tokyo

340.49844.13

576

0.6

507

88.8

94.7

August 31, 2004

Residence-8

Spacia KITASHINJUKU

Kitashinjuku, Shinjuku-ku, Tokyo

504.412,204.07

1,290

1.2

1,330

100.0

100.0

August 06, 2004

Residence-9

Spacia MEGUROFUDOMAE

Nishigotanda, Shinagawa-ku, Tokyo

217.381,044.37

766

0.7

754

100.0

97.8

January 12, 2005

Residence-10

FITL KOMAGATA

Komagata, Taito-ku, Tokyo

663.54

3,406.10

1,870

1.8

1,830

96.2

95.3

July 28, 2004

Residence-11

Spacia MACHIDA

Haramachida, Machida-shi, Tokyo

587.484,033.59

1,360

1.3

1,320

99.2

99.1

February 23, 2004

Residence-12

Spacia KAWASAKI

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

683.694,656.10

2,130

2.0

2,090

99.3

96.8

July 15, 2004

Residence-13

IMAIKE IRIS NIBANKAN

Imaike, Chikusa-ku, Nagoya-shi, Aichi

360.54

1,375.76

300

0.3

200

86.8

98.5

October 15, 1991

Residence-14

GRACIA FIS

Furuichiba, Saiwai-ku, Kawasaki-shi, Kanagawa

1,992.09

3,737.47

1,018

1.0

943

100.0

100.0

March 05, 1999

Residence-15

J-FLATS YOKOHAMA

Tsuruya-cho, Kanagawa-ku, Yokohama-shi, Kanagawa

611.41

3,076.45

2,090

2.0

1,850

100.0

100.0

January 23, 2007

Residence-16

FITL KAMEIDO

Kameido, Koto-ku, Tokyo

438.432,899.67

1,650

1.6

1,440

97.8

97.0

November 30, 2005

Residence-17

Spacia MEGURO

Mita, Meguro-ku, Tokyo

578.01

1,283.92

887

0.9

926

95.5

94.4

November 28, 2005

Residence-18

ACT HILLS YACHIYO

Midorigaoka, Yachiyo-shi, Chiba

1,289.14

5,420.53

1,348

1.3

1,020

88.8

88.3

January 10, 1998

Residence-19

J-FLATS SUGAMO

Sugamo, Toshima-ku, Tokyo

965.702,785.83

1,510

1.5

1,440

95.0

92.3

February 22, 2007

Residence-20

S-RESIDENCE KYOBASHI

Higashinoda-cho, Miyakojima-ku, Osaka-shi, Osaka

799.685,995.82

2,774

2.7

2,550

96.0

100.0

March 02, 2006

Residence-21

EL CIELO MEGUROHONCHO

Megurohoncho, Meguro-ku, Tokyo

865.22

1,975.84

1,220

1.2

950

89.9

86.4

February 22, 2006

Residence-22

Spacia HAKURAKU

Rokkakubashi, Kanagawa-ku, Yokohama-shi,
Kanagawa

457.54

1,593.68

844

0.8

750

98.2

98.2

February 02, 2006

Residence-23

J-FLATS MINAMIHORIE

Minamihorie, Nishi-ku, Osaka-shi, Osaka

475.06

1,994.14

1,055

1.0

899

98.4

98.2

February 19, 2007

Residence-24

Spacia GOTANDA5

Nishigotanda, Shinagawa-ku, Tokyo

593.325,590.34

3,043

2.9

2,530

97.8

96.0

March 02, 2006

Residence-25

Spacia OISENDAIZAKA

Higashioi, Shinagawa-ku, Tokyo

558.393,440.73

2,440

2.3

2,160

97.9

98.7

August 10, 2006

35

Portfolio at a Glance (2)Acquisition Price
Property No.

Core Assets

Residence-26

Property NameFITL SHINAGAWA SEASIDE

Location

Higashishinagawa, Shinagawa-ku, Tokyo

Site Area (m2)

1,049.00

Total Floor Area(m2)

3,127.48

Price(Million yen)Appraisal
Value at End of
Period(Million yen)

Ratio
(%)

Occupancy Rate (%)
Completion Date
As of Sep. 30,
2011

As of Mar. 31,
2011

2,200

2.1

1,910

94.8

97.2

June 23, 2006

1,080

96.2

100.0

August 23, 2006

Residence-27

FITL MINAMIAZABUMinamiazabu, Minato-ku, Tokyo

487.27

1,479.61

1,300

1.3

Residence-28

RARETE JYOUTOU

Noe, Jyoutou-ku, Osaka-shi, Osaka

740.492,232.26

1,075

1.0

913

95.1

98.5

August 31, 2006

Residence-29

Spacia TSUKAMOTO CROWN HEIM

Tsukamoto, Yodogawa-ku, Osaka-shi, Osaka

808.542,565.66

1,250

1.2

1,030

97.9

100.0

August 10, 2006

Residence-30

Spacia KAWASAKI II

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

601.383,193.14

1,900

1.8

1,760

97.6

92.1

February 27, 2007

Residence-31

Spacia AZABUJUBAN III

Azabujuban, Minato-ku, Tokyo

380.26

2,097.45

2,700

2.6

2,190

96.9

100.0

February 22, 2007

Residence-33

FITL ITABASHIHONCHO

Yamato-cho, Itabashi-ku, Tokyo

220.85

1,446.78

1,000

1.0

838

96.9

90.7

February 27, 2007

Residence-34

FITL OIZUMIGAKUEN

Higashi-Oizumi, Nerima-ku, Tokyo

618.001,542.16

871

0.8

701

96.6

96.4

February 22, 2007

1,158.70

445

0.4

343

97.8

97.2

January 31, 2007

Residence-35

J-FLATS TENJINHIGASHI I

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

239.18Residence-36

J-FLATS TENJINHIGASHI II

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

514.892,108.69

840

0.8

625

96.4

96.3

May 23, 2007

Residence-37

J-FLATS SHIJONISHINOTOIN

Myodenji-cho, Shijo-sagaru, Nishinotoin-dori,Shimogyo-ku, Kyoto-shi, Kyoto

400.593,374.74

1,420

1.4

980

95.6

93.2

April 08, 2008

Residence-39

J-FLATS HIGASHISHINAGAWA

Higashi-Shinagawa, Shinagawa-ku, Tokyo

1,028.92

3,338.12

2,610

2.5

2,060

93.4

96.7

May 23, 2008

J-FLATS HACHIOJIMINAMINO

Nishikatakura, Hachioji-shi, Tokyo

1,134.50

2,243.06

1,000

1.0

919

94.2

88.4

March 6, 2007

Residence-41

PREGIO NISHINAKAJIMA

Higashinakajima, Higashiyodogawa-ku, Osakashi, Osaka

969.02

3,947.24

2,250

2.2

1,730

98.3

99.1

April 18, 2007

Residence-42

J-FLATS ITABASHIKUYAKUSHOMAE

Itabashi, Itabashi-ku, Tokyo

731.71

4,322.19

2,700

2.6

2,210

96.0

91.1

April 22, 2007

Residence-43

J-FLATS MUSASHIKOYAMA5

Ebara, Shinagawa-ku, Tokyo

512.62

1,616.87

1,012

1.0

878

95.6

98.3

November 5, 2007

Residence-44

J-FLATS SENDAGI5

Sendagi, Bunkyo-ku, Tokyo

250.44

1,239.10

757

0.7

615

90.9

100.0

January 9, 2008

Residence-45

J-FLATS YOTSUYASAKAMACHI5

Sakamachi, Shinjuku-ku, Tokyo

905.083,675.01

2,300

2.2

1,790

98.8

96.0

March 29, 2008

Residence-46

J-FLATS HAKATAHIGASHI

Yoshizuka, Hakata-ku, Fukuoka-shi, Fukuoka

4,590.91

9,465.09

2,250

2.2

2,110

99.4

97.3

November 21, 2007

Residence-47

J-FLATS KAMIGOFUKUKamigofukumachi, Hakata-ku, Fukuoka-shi,
Fukuoka

593.552,523.71

900

0.9

728

95.5

94.2

March 14, 2008

Residence-48

J-FLATS SANGENJAYASangenjaya, Setagaya-ku, Tokyo

153.83954.94

871

0.8

722

97.2

97.2

January 22, 2008

Residence-50

Prime Maison MUSASHINONOMORI

Josuihoncho, Kodaira-shi, Tokyo

5,116.62

4,412.42

1,560

1.5

1,630

-

96.9

December 19, 2007

Residence-51

Prime Maison HIGASHISAKURA

Higashisakura, Higashi-ku, Nagoya-shi, Aichi

846.053,517.62

1,140

1.1

1,220

-

93.6

February 15, 2008

Residence-52

Prime Maison KAYABAKOEN

Kayaba, Chikusa-ku, Nagoya-shi, Aichi

1,129.02

2,301.42

640

0.6

665

-

96.1

November 7, 2006

Residence-53

Tre Di Casa SANGENJAYA

Shimouma, Setagaya-ku, Tokyo

473.85

1,006.89

714

0.7

724

-

97.0

January 28, 2008

39,830.17

141,756.11

74,91672.1

66,16096.5

96.2

Residence-40

Residential Subtotal

36

Portfolio at a Glance (3)Acquisition Price

Core Assets

Property
No.

Property Name

Location

Site Area(m2)

Total Floor
Area (m2)

135,817.46

Price(Million
yen)

Ratio
(%)

73,250.17

15,360

14.8

Appraisal
Value at
End ofPeriod(Millionyen)

Occupancy Rate (%)
Completion Date

As of Sep
30, 2010

As of Mar.
31, 2011

12,00094.9

94.3(Note 6)

Retail-1

HAMAMATSU Plaza

Kaminishi-cho, Higashi-ku,
Hamamatsu-shi, Shizuoka, etc.

Retail-2

b-town JINGUMAE II

Jingumae, Shibuya-ku, Tokyo

283.83499.67

1,043

1.0

895

100.0

100.0

May 20, 2005

Retail-3

RINKU HAGURAZAKI Plaza

Tajiri-cho Oaza, Gashouji, Sennangun, Osaka, etc.

53,231.66

－

4,697

4.5

3,854

100.0

100.0

－

Retail-4

b-town MINAMIAOYAMAMinamiaoyama, Minato-ku, Tokyo

385.32797.63

1,530

1.5

1,280

100.0

100.0

February 28, 2006

Retail-5

KOJIMA NEW KAMIFUKUOKATEN

Kamifukuoka, Fujimino-shi, Saitama

4,877.90

3,413.40

1,300

1.3

1,120

100.0

100.0

October 14, 1996

Retail-7

b-toss IKEBUKURO

Nishi-Ikebukuro, Toshima-ku, Tokyo

223.381,474.21

1,980

1.9

1,550

100.0

100.0

November 12, 2005

Retail-8

Joy Square YUGAWARA

Chuo, Yugawaramachi,
Ashigarashimo-gun, Kanagawa

5,425.13

6,326.53

1,810

1.7

1,590

100.0

100.0 September 22, 2006

Retail-9

Bell Plaza Shopping Center

Nakamaruko, Ueda-shi, Nagano

23,304.57

6,203.26

1,337

1.3

1,110

100.0

100.0

Retail Subtotal

223,549.25

91,964.87

29,05827.9

23,39997.3

96.9

As of March 31, 2011 Portfolio Total

263,379.42

233,720.98

103,974

100.0

89,55996.9

96.6

Owned as of September 30, 2010

53 properties

99,920 million yen

Acquired in the period ended March 31, 2011

4 properties

4,054 million yen

57 properties

103,974 million yen

1 property

2,260 million yen

Owned as of March 31, 2011
Scheduled to be acquired in the period ending September 30, 2011 (contract alreadyconcluded as of the date of this material)

Total
Notes:

58 properties (estimate)

106,234 million yen(Note 7)

(estimate)

1. Based on information as of March 31, 2011. Occupancy rates are rounded to the nearest first decimal place.
2. Concerning acquisition prices, amounts of less than one million yen are rounded down, and percentages indicate the portion of the portfolio’s total acquisition price for properties owned and are rounded
to the nearest first decimal place.
3. The listed site area and total floor area figures are based on indications given in the register. As for Rinku Hagurazaki Plaza, its total floor area is not described because the Investment Corporationacquired only the land and leases it (the buildings on it are owned by the tenants).
4.The appraisal value at end of period is the amount appraised based on an appraisal by a real estate appraiser rounded down to the nearest million yen.
5. The ratio of site rights (co-ownership rights) for Spacia GOTANDA, J-FLATS MUSASHIKOYAMA, J-FLATS SENDAGI and J-FLATS YOTSUYASAKAMACHI are 387,036/426,933, 117,678/127,609,
89,730/103,842 and 245,317/329,739, respectively. However, “Site Area” indicates the total land area of the real estate in trust, while “Total Floor Area” indicates the floor area of the entire building. The
exclusive portions of the total floor area that the Investment Corporation has acquired are 3,637.18m2, 1,148.58m2, 867.27m2 and 2,253.07m2, respectively.
6. HAMAMATSU Plaza is a shopping-complex-type facility, with Hamamatsu West completed on October 20, 1979, the Ito-Yokado and administration buildings completed on November 7, 2000, andAkachanhonpo and Xebio buildings completed on November 9, 2000.
7. Bell-Plaza Shopping Center is a shopping-complex-type facility, with the Center building and Shop building completed on November 30, 1992 and the Restaurant building completed on July 12, 2006.

37

Key Financial Indices for Interest-Bearing Debt
Diversification of Repayment Dates (Notes 3)

Changes in Total Assets, Total Interest-Bearing Debt and LTV (Notes 1 and 2)(million yen)

Total assets

120,000
104,739

105,001

ＬＴＶ

Interest-bearing debt
104,750

104,422

107,352

90,00049.3%
60,00030,000

49.0%

48.9%

48.3%
47.1%

51,63960%(million yen)
12,000

55%

9,000

50%

6,000

51,20849,22951,874Mar. 31, 2010

Sep. 30, 2010

Mar. 31, 2011

0Sep. 30, 2009

5,700
2,850

Sep. 30, Mar. 31, Sep. 30, Mar. 31, Sep. 30, Mar. 31, Sep. 30, Mar. 31, Sep. 30, Mar. 31,
2011
2012
2012
2013
2013
2014
2014
2015
2015
2016

Ratio of Long/Short-Term Loans Payable (Notes 2 and 5)

Fixed

Short-termLong-term (Note 4)

100%

100%

24.8%
80%

7,342

5,000

0
PeriodendingRatio of Fixed / Floating Interest Rates (Notes 2 and 5)
Floating

6,587

3,000
3,450

40%
Mar. 31, 2009

Investment corporation bonds

10,137 9,509
45%

51,449As of May 9, 2011
Long-term loans payable (Note 4)

36.8%

46.7%

38.7%

37.1%

37.1%

80%

16.9%

21.8%

16.3%

100.0%

100.0%

Mar. 31, 2011

May 9, 2011

34.6%
26.8%

60%

60%

23.7%
27.4%

40%

40%
63.2%

53.3%

61.3%

62.9%

62.9%

20%

20%

0%

83.1%

75.2%
65.4%

0%
Sep. 30, 2009

Mar. 31, 2010

Sep. 30, 2010

Mar. 31, 2011

May 9, 2011

Sep. 30, 2009

Mar. 31, 2010

Sep. 30, 2010

Ratio of current portion of long-term loans payable and investment corporation bonds
Notes: 1. LTV = Interest-bearing debt / Total assets at end of the period (where interest-bearing debt is the sum of loans payable, investment corporation bonds and interest-bearing tenant leasehold and security deposits).
2. Percentage figures are rounded to the nearest first decimal place.
3. Does not include interest-bearing tenant leasehold and security deposits.
4. Includes current portion of long-term loans payable.
5. Stated as the percentage of total interest-bearing debt.

38

Portfolio Development Policy
Investment Diversification by Asset Class and Geographical Region
After modifications made on May 16, 2011
Asset Class of Real Estate
Related Assets

Allocation
Rate

RegionAllocation Rate

Specific Areas

Approx. 50%(Note 2)Central Tokyo: Chiyoda Ward, Chuo Ward, Minato Ward,
Bunkyo Ward, Shibuya Ward and Shinjuku
Ward
Jonan area: Setagaya Ward, Meguro Ward, Shinagawa
Ward and Ota Ward

GreaterTokyo/
Adjoining
CitiesApprox. 80%
including Central
Tokyo and the
Jonan Area
(Note 2)

Tokyo: Areas other than Central Tokyo and the Jonan Area
(excluding islands)
Kanagawa Prefecture: Kawasaki City, Yokohama City andothersChiba Prefecture: Ichikawa City, Urayasu City, Funabashi
City, Matsudo City and others
Saitama Prefecture: Kawaguchi City, Toda City, Saitama
City and others
Additional areas within commuting distance

Major
Regional
Cities (Note 1)

Approx. 20%(Note 2)

Sapporo City, Sendai City, Nagoya City, Kyoto City, Osaka
City, Kobe City, Hiroshima City, Fukuoka City, Kitakyushu
City and others
Additional areas within commuting distanceCentralTokyo/
Jonan Area

Residences

70～85%Core
AssetsBalance
AssetsRetail Properties

15～30%

Based on an assessment of the specific characteristics of each property, region and trade zone

Office, etc.

0～15%

Based on an assessment of the specific characteristics of each property and region

Notes: 1. "Major Regional Cities" refers to cabinet-order designated cities and cities in major regional areas that, in principle, have a population exceeding 500,000, or a commercial district of equivalent standing.
2. “Approx.” means ±10%.

39Overview of Unitholders as of March 31, 2011
Major Unitholders

Diversification of Unitholders

Name / Company Name

Investment
Units Owned(units)Ownership ofInvestment Units
Outstanding (%)

Japan Trustee Services Bank, Ltd.
(Trust Account)

23,61920.52

Goldman Sachs International

13,521

11.75

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

9,310

8.09

Sekisui House Ltd.

7,800

6.77

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

7,593

6.59

JOINT CORPORATION

5,400

4.69

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

5,342

4.64

Deutsche Bank AG London-PB Non-Treaty
Clients 613

3,627

3.15

Spring Investors Co., Ltd.

2,600

2.25

Nomura Bank (Luxembourg) S.A.

2,572

2.23

81,384

70.72

Mar. 31,2011
5,412
unitholders■Note: The status of large holdings as determined by the large share holdings reports (including Reportsof Changes) submitted by May 12, 2011 is as follows.
Sumitomo Trust& BankingCo., Ltd.

MizuhoSecurities Co.,
Ltd.

Tower
Investment
Management
Co., Ltd.

DIAM
Co., Ltd.

Mizuho Trust &Banking Co.,Ltd.

Total units held

6,635 units

8,120 units

17,278 units

12,989 units

11,644 units

Total
percentage ofownership

5.77%

7.06%

15.02%

11.29%

10.12%

Submission dateJan. 11, 2011

Jan. 11, 2011

Mar. 7, 2011

Mar. 24, 2011

Apr. 6, 2011

90 (1.66%)
75 (1.39%)

5,203 (96.14%)
40 (0.70%)
98 (1.72%)
70 (1.23%)

Sep. 30,
2010
5,710
unitholders

5,502 (96.36%)
45 (0.70%)
107 (1.66%)
77 (1.20%)

Mar. 31,2010
6,438 unit
holders6,209 (96.44%)

0%

Total

Name

44 (0.81%)

Financial Institutions (including securities companies)
Other domestic firms
Foreign firms
Individuals and others

Mar. 31,2010
115,070
units

20%

40%

50,240(43.66%)

Sep. 30,2010
115,070
units

41,503(36.07%)Mar. 31,2011
104,670
units

0%

60%

17,885(15.54%)

18,332(15.93%)80%

28,883(25.10%)18,062(15.70%)34,363(29.86%)32,975(31.50%)7,939(7.58%)

37,342(35.68%)

20%

40%

60%

100%

20,872(18.14%)

26,414(25.24%)

80%

100%

40

Historical Investment Unit Price
Sekisui House SI Investment Corporation Investment Unit Price Summary(yen)

400,000

2,000

Sekisui House SI Investment Corporation investment unit price (left axis)
TSE REIT Index (right axis)
1,500

200,000

1,000

100,000

500

0

H…
H…
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300,000

Mar. 2008

Sep. 2008

Mar. 2009

Sep. 2009

Mar. 2010

Sep. 2010

0Mar. 2011(units)5,000

Trading volume
4,000
3,000
2,000
1,000
0
Mar. 2008

Sep. 2008

Mar. 2009

Sep. 2009

Mar. 2010

Sep. 2010

Mar. 201141◇ This document is provided for information purposes only and is not a solicitation for investment, nor a recommendation
or invitation to make specific transactions. We caution readers to contact their securities companies with regard to thepurchase of investment units in Sekisui House SI Investment Corporation and to undertake investment decisions of
their own volition.
◇ This document is not a disclosure document or report based upon the Financial Instruments and Exchange Law, the
Law Concerning Investment Trusts and Investment Corporations, public listing regulations of the Tokyo Stock Exchange
or other related laws or regulations.
◇ Strategies, goals and forward-looking statements contained herein are based upon specific assumptions and judgments
made as of the date of the document in accordance with information available to Sekisui House SI Investment
Corporation at the time. Information herein is subject to impact from risks, uncertainties, assumptions and other factors.
Accordingly, strategies, goals and forecasts regarding future dates do not guarantee the Investment Corporation’s
future performance, operating results or financial position. Actual results may differ significantly from explicit or implicit
statements made herein regarding future performance, operating results, financial position or other conditions.
◇ While Sekisui House SI Investment Corporation takes reasonable care in the preparation of this document, it does notguarantee the accuracy and completeness of its content. Readers are also cautioned that the contents of this document
may be changed or deleted without prior notice.
◇ Making a copy of, or appropriation of, the content contained herein without prior permission is prohibited.
◇ This English language document is an abridged translation of the Japanese language document issued on the same
day and was prepared solely for the convenience of, and reference by, overseas investors. Sekisui House SI
Investment Corporation gives no warranties as to its accuracy or completeness.