(REIT) Financial Report for Fiscal Period Ended January 31, 2018
March 16, 2018
Stock Exchange Listing: Tokyo Stock Exchange
URL: http://starasia-reit.com

REIT Securities Issuer:
Securities Code:
Representative:

Star Asia Investment Corporation (SAR)
3468
Atsushi Kato, Executive Director

Asset Management Company:
Representative:
Contact:

Star Asia Investment Management Co., Ltd. (the Asset Management Company)
Atsushi Kato, President and CEO
Toru Sugihara, Director and CFO
TEL: 03-5425-1340

Scheduled date of commencement of cash distribution payment:
Scheduled date of submission of securities report:

April 16, 2018
April 26, 2018

Preparation of supplementary financial results briefing materials:
Holding of financial results briefing session:

Yes
Yes (for institutional investors and analysts)(Amounts are rounded down to the nearest million yen)
1. Status of Management and Assets for Fiscal Period Ended January 31, 2018 (from August 1, 2017 to January 31, 2018)(1) Management Status(% figures are the rate of period-on-period increase (decrease))
Fiscal period
Operating revenue
Operating income
Ordinary income
Net income
million yen%
million yen%
million yen%
million yen%
Ended Jan. 2018
3,194
(0.5)
2,051
(2.2)
1,876
2.3
1,802
(1.7)
Ended Jul. 2017
3,211
59.2
2,098
76.2
1,833
70.8
1,832
70.8
Net income
per unit

Fiscal period

Ratio of net income
to equity
yen
4,349
4,697

Ended Jan. 2018
Ended Jul. 2017

%
4.3
4.8

Ratio of ordinary income
to total assets
%
2.3
2.4

Ratio of ordinary income
to operating revenue
%
58.7
57.1

(2) Status of Cash Distribution
Cash distribution
Total
Cash distribution
Total
Ratio of cash
per unit
cash distribution
in excess of
cash distribution Cash distribution
Fiscal period
distribution to(not including cash
(not including cash
earnings
in excess of
payout ratio
distribution in excess of distribution in excess of
net assets
per unit
earnings
earnings)
earnings)
yenmillion yen
yenmillion yen%%
Ended Jan. 2018
4,077
1,689
0
0
93.7
4.0
Ended Jul. 2017
4,423
1,832
0
0
100.0
4.4
(Note1) For the fiscal period ended July 31, 2017, cash distribution payout ratio is calculated by the following formula due to changes
in the number of investment units during the period following issuance of new investment units during the period:
Cash distribution payout ratio = Total cash distribution (not including cash distribution in excess of earnings) ÷ Net income ×100(Note2) For the fiscal period ended January 31, 2018, total cash distribution differs from net income due to internal reserve.
(3) Financial Position
Fiscal period

Total assets
million yen
82,154
83,609Net assets
million yen
41,87041,892

Net cashprovided by (used in)operating activities
million yen
4,220
4,721

Net cashprovided by (used in)investing activities
million yen(1,027)(18,283)

Ended Jan. 2018
Ended Jul. 2017

Equity ratio
%
51.0
50.1

Net assets per unit
yen
101,063
101,116(4) Status of Cash Flows
Fiscal period

Ended Jan. 2018
Ended Jul. 2017－

1 －Net cashprovided by (used in)financing activities
million yen(3,210)13,900Cash and cash equivalents
at end of period
million yen
4,820
4,837

2. Management Status Forecast for Fiscal Period Ending July 31, 2018 (from February 1, 2018 to July 31, 2018) and Fiscal Period Ending
January 31, 2019 (from August 1, 2018 to January 31, 2019)(% figures are the rate of period-on-period increase (decrease))
Cash distribution
per unit
Cash distribution
Fiscal period
Operating revenue
Operating income
Ordinary income
Net income(not including
in excess of earnings
cash distribution
per unit
in excess of earnings)
million yen% million yen% million yen% million yen
%
yen
yen
2,751
1,504
1,231
1,230
2,750
0
Ending Jul. 2018(13.9)(26.7)(34.4)(31.7)
2,732
1,497
1,320
1,319
2,804
0
Ending Jan. 2019
(0.7)
(0.5)
7.2
7.2

(Reference) Forecast net income per unit (fiscal period ending July 31, 2018)
2,615 yen
Forecast net income per unit (fiscal period ending January 31, 2019) 2,804 yen* Other(1) Changes in Accounting Policies, Changes in Accounting Estimates, and Retrospective Restatement① Changes in accounting policies accompanying amendments to accounting standards, etc.: No② Changes in accounting policies other than ①:No③ Changes in accounting estimates:
No④ Retrospective restatement:No(2) Total Number of Investment Units Issued and Outstanding① Total number of investment units issued and outstanding (including own investment units) at end of period
Fiscal period ended Jan. 31, 2018
414,300 units
Fiscal period ended Jul. 31, 2017414,300 units② Number of own investment units at end of period
Fiscal period ended Jan. 31, 2018
0 units
Fiscal period ended Jul. 31, 2017
0 units(Note) For the number of investment units serving as the basis for calculation of net income per unit, please see “Notes on Per
Unit Information” on page 24.
* Presentation of Status of Implementation of Audit Procedures
At the time of disclosure of this financial report, audit procedures for financial statements pursuant to the Financial Instruments andExchange Act have not been completed.
* Explanation of Appropriate Use of Management Status Forecast, and Other Matters of Special Note
The management status outlook and other forward-looking statements contained in this document are based on information thatare currently available and certain assumptions that are deemed reasonable by SAR. Accordingly, the actual management status, etc.
may differ materially due to various factors. In addition, the forecast figures are the current figures calculated under the assumptions
described in “Assumptions Underlying Operating Results Forecasts for Fiscal Period Ending July 31, 2018 and Fiscal Period Ending
January 31, 2019” on pages 3-4. Accordingly, the actual operating revenue, operating income, ordinary income, net income, cash
distribution per unit (not including cash distribution in excess of earnings) and cash distribution in excess of earnings per unit mayvary due to acquisition/disposition of real estate, etc., trends of the real estate market, etc., fluctuations in interest rates or otherchanges in the circumstances surrounding SAR, etc. in the future. In addition, the forecast is not a guarantee of the amount of cash
distribution.

－

2 －Assumptions Underlying Operating Results Forecasts for
Fiscal Period Ending July 31, 2018 and Fiscal Period Ending January 31, 2019
Item
Calculation period

Investment assets

Operating revenue

Operating expenses

NOI(Net Operating
Income)Non-operating
expensesAssumptions
 Fiscal period ending July 31, 2018: February 1, 2018 – July 31, 2018 (181 days)
 Fiscal period ending January 31, 2019: August 1, 2018 – January 31, 2019 (184 days)
 SAR acquired the real estate beneficiary interests in trust for the following 6 properties (hereafter referred
to as the “Acquisition” in these assumptions) in February 2018 and there is a change in the invested assets.
As of today, SAR owns the real estate beneficiary interests in trust of 29 properties and 2 mezzanine loan
debts (hereafter referred to as the “Existing Assets” in these assumptions; of the Existing Assets, hereafter
real estate beneficiary interests in trust are referred to as the “Existing Assets (real estate, etc.)” andmezzanine loan debts are referred to as the “Existing Assets (mezzanine)”in these assumptions). It is
assumed that there are no other changes (new property acquisitions, sales of the Existing Assets, etc.) in
the investment assets through the end of the fiscal period ending January 31, 2019.
<Acquisition>
Property names: Nihonbashi Hamacho Park Building, Urban Park Ryokuchi Koen, Urban Park Koenji,
Funabashi Nishiura Logistics I, Funabashi Nishiura Logistics II, Matsubushi Logistics
Acquisition date: February 2, 2018
In practice, this may vary due to changes in investment assets.
 Rent revenues from the Existing Assets (real estate, etc.) are calculated based on the rent stated in thelease agreements that are effective as of today taking factors such as market movement into
consideration. It is assumed that no rent payments will be delinquent or declined by tenants.
 Interest revenues or dividend revenues from the Existing Assets (mezzanine) are calculated based onoutlines or trust agreements which define contents of the Existing Assets (mezzanine) that are effective
as of today. It is also assumed that no interest payments or dividend payments will be declined.
 Among expenses related to rent business of the Existing Assets, which are the principal operating
expenses, expenses excluding depreciation are calculated on the basis of historical data, reflecting
variable factors of expenses.
 Fixed property taxes, city planning taxes and other public charges are expected to be 175 million yen for
the fiscal period ending July 31, 2018 and 175 million yen for the fiscal period ending January 31, 2019.
 For the properties related to the Acquisition, fixed property taxes, city planning taxes and other publiccharges are settled on a pro rata basis based on the number of days of ownership with the sellers at thetime of acquisition of the properties. However, in the case of SAR, the settled amount is included in theacquisition cost and thus not be recorded as expenses in the fiscal periods ending July 31, 2018 and ending
January 31, 2019. In addition, fixed property taxes, city planning taxes and other public charges for theproperties related to the Acquisition will be recorded as expenses from the fiscal period ending July 31,
2019.
 For the expenditures for repair and maintenance of buildings, 80 million yen is expected for the fiscal
period ending July 31, 2018 and 62 million yen is expected for the fiscal period ending January 31, 2019
based on repair and maintenance plans drawn up by the Asset Management Company. However, theexpenditures for repair and maintenance for the fiscal periods could differ significantly from the estimatedamounts, as expenditures may arise urgently due to damage to buildings and such caused by unexpectedfactors, and because the variance in amounts generally tends to be significant from year to year and repair
and maintenance expenses do not arise regularly.
 Depreciation is calculated using the straight line method, including incidental expenses and others, and is
expected to be 356 million yen for the fiscal period ending July 31, 2018 and 367 million yen for the fiscal
period ending January 31, 2019.
 The NOI of SAR’s portfolio (the Existing Assets (real estate, etc.)) is expected to be 2,113 million yen for
the fiscal period ending July 31, 2018 and 2,117 million yen for the fiscal period ending January 31, 2019.
 NOI is calculated by using the following calculation method.
NOI = rent revenue – rent expenses (excluding depreciation)
 Temporary expenses are expected to be 7 million yen for the fiscal period ending July 31, 2018 as theissuance cost of new investment units conducted in February 2018.
 Interest expense and other financial expenses are expected to be 266 million yen in total for the fiscal
period ending July 31, 2018 and 176 million yen in total for the fiscal period ending January 31, 2019.
 Temporary expenses are expected to be 93 million yen for the fiscal period ending July 31, 2018 from new
borrowings and refinancing as described in “Debt financing” below.

－

3 －

Item

Assumptions

Debt financing

 The total amount of interest-bearing liabilities is assumed to be 43,230 million yen as of the end of the
fiscal period ending July 31, 2018, and 43,040 million yen as of the end of the fiscal period ending January
31, 2019.
 As of today, SAR has 43,510 million yen of outstanding borrowings.
 It is assumed to prepay 280 million yen during the fiscal period ending July 31, 2018 by using the payment
for the issuance of the new investment units through third-party allotment conducted on February, 2018.
 It is assumed to prepay 190 million yen during the fiscal period ending January 31, 2019 by using
consumption tax refund resulting property acquisition in February 2018 and payment of other various
expenses.
 It is assumed that 7,300 million yen of loans payable due for repayment in the fiscal period ending July
31, 2018 will be refinanced in the same amount.
 Excluding the above, it is assumed that there will be no new borrowings or repayments of existing
borrowings including prepayments until the end of the fiscal period ending January 31, 2019.

Investment units The total number of investment units issued and outstanding as of the date of this document, which is
470,624 units, is assumed.
 It is assumed that there will be no changes in the number of investment units issued due to additional
issuance, etc. of new investment units through the end of the fiscal period ending January 31, 2019.

 Cash distribution per unit (not including cash distribution in excess of earnings) is calculated on theassumption described in the cash distribution policy stipulated in SAR’s Articles of Incorporation.
 It is assumed that derivative transactions (interest rate swaps) will continue to be conducted. However, It
is assumed that deferred losses on hedges, which is an item of deduction from net assets (those provided
in Article 2, item 30 (b) of the Ordinance on Accountings of Investment Corporations), is nonaccrual until
Cash distribution
the end of the fiscal period ending January 31, 2019, and cash distribution per unit (not including cash
per unit
distribution in excess of earnings) will not be affected by changes in items of deduction from net assets in(not including
the calculation.
cash distribution
 It is possible that the cash distribution per unit (not including cash distribution in excess of earnings) couldin excess of earnings)
change due to various factors, including changes in investment assets, changes in rent revenue
accompanying changes in tenants, etc., or unexpected repair and maintenance, etc. In addition, cash
distribution per unit (not including cash distribution in excess of earnings) may be affected by changes in
items of deduction from net assets.
 It is expected that a reversal of reserve for reduction entry of 63 million yen will be made in the fiscal
period ending July 31, 2018.

Cash distribution
in excess of earnings
per unit

Other

It is assumed that no deferred losses on hedges will be incurred, which is an item of deduction from net
assets, as described above. Of cash distribution in excess of earnings, that attributable to allowance fortemporary difference adjustment is not scheduled at this point.
In addition, of cash distribution in excess of earnings, that falling under the category of cash distribution
accompanying decrease in capital, etc. under tax law is not scheduled at this point.

 Forecasts are based on the assumption that revisions that impact the above forecast figures will not bemade to laws and regulations, tax systems, accounting standards, listing rules, and rules of The Investment
Trusts Association, Japan etc.
 Forecasts are based on the assumption that there will be no major unforeseen changes to general
economic trends and real estate market conditions, etc.

－

4 －

3.

Financial Statements(1) Balance Sheet(Unit: thousand yen)
3rd fiscal period(As of July 31, 2017)

AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Deferred tax assets
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
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
Total intangible assets
Investments and other assets
Investment securities
Long-term prepaid expenses
Lease and guarantee deposits
Other
Total investments and other assets
Total non-current assets
Total assets－

5 －4th fiscal period(As of January 31, 2018)

1,598,847
3,239,091
52,745
108,94520
261,743
5,261,393

1,667,713
3,153,262
44,66990,216
5,354
4,961,216

25,006,453(764,163)
24,242,289
9,606
(397)
9,209
11,270(499)
10,771
9,971(1,228)
8,743
50,426,286
74,697,300

24,909,318(1,055,284)
23,854,033
9,606
(733)
8,872
20,707(1,240)19,467
20,207(2,314)
17,892
48,929,717
72,829,984

3,459,138
3,459,138

3,459,138
3,459,138

146,256
10,00035,321
191,577
78,348,016
83,609,410

734,500
121,333
10,00038,473904,307
77,193,430
82,154,646

(Unit: thousand yen)
3rd fiscal period(As of July 31, 2017)
Liabilities
Current liabilities
Operating accounts payable
Current portion of long-term loans payable
Accounts payable - otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Other
Total current liabilities
Non-current liabilities
Long-term loans payable
Tenant leasehold and security deposits in trust
Other
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Surplus
Unappropriated retained earnings (undisposed loss)
Total surplus
Total unitholders’ equity
Valuation and translation adjustments
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

－

*1

6 －

4th fiscal period(As of January 31, 2018)

227,743
8,680,000
269,194
7,030
1,023
12,734
589,678
9,492
9,796,897

292,304
7,300,000
289,696
6,054
74,345126,003338,283
10,9258,437,613

30,050,000
1,863,336
6,635
31,919,971
41,716,869

30,050,000
1,794,980
1,507
31,846,487
40,284,100

40,031,185

40,031,185

1,832,669
1,832,669
41,863,855

1,802,393
1,802,393
41,833,579

28,686
28,68641,892,541
83,609,410

36,96636,966
41,870,546
82,154,646*1

(2) Statement of Income(Unit: thousand yen)
3rd fiscal period
From: February 1, 2017
To: July 31, 2017
Operating revenue
Lease business revenue
Other lease business revenue
Gain on sales of real estate property
Other revenue
Total operating revenue
Operating expenses
Expenses related to rent business
Asset management fee
Asset custody and administrative service fees
Directors’ compensations
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Interest on refund
Total non-operating income
Non-operating expenses
Interest expenses
Borrowing related expenses
Investment unit issuance expenses
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 (undisposed loss)

4th fiscal period
From: August 1, 2017
To: January 31, 2018

2,146,216
166,563*2 898,612
3,211,392

*1

*1

*1

－

7 －

836,576
189,465
16,9122,400
67,794
1,113,150
2,098,241

2,255,617
152,654*2 771,663
14,412
3,194,348

*1

*1

*1

841,650
211,612
19,5152,400
67,331
1,142,509
2,051,838

21
21

24
771
795

82,120129,149
48,461
5,000
264,731
1,833,531
1,833,531
1,026
(8)
1,018
1,832,513
155
1,832,669

92,57555,58727,928176,091
1,876,542
1,876,542
74,34820
74,3691,802,173
220
1,802,393

(3) Statement of Unitholders’ Equity
3rd fiscal period (from February 1, 2017 to July 31, 2017)(Unit: thousand yen)
Unitholders’ equity
Unitholders’ capital
Capital deduction
Unitholders’ capital

Balance at beginning of the period

Allowance fortemporarydifference
adjustment

33,541,125

Unitholders’capital, net

Total capital
deduction(26,197)(26,197)

33,514,927

Changes of items during the period
Issuance of new investment units

6,490,060

6,490,060

Dividends from surplus
Reversal of allowance for

26,197

26,197

26,1976,490,060

26,197

26,197

6,516,258*1 40,031,185--

40,031,185

temporary difference adjustment
Net income
Net changes of items other thanunitholders’ equity
Total changes of items during theperiodBalance at end of the period(Unit: thousand yen)
Unitholders’ equity

Valuation and translation adjustments

Surplus
Unappropriatedretained earnings(undisposed loss)
Balance at beginning of theperiod

1,099,059

Total
surplus1,099,059

Deferred
Total unitholders’gains or losses on
equityhedges34,613,987

60,135

Total
valuation andtranslation
adjustments

60,135Total
net assets

34,674,123

Changes of items during theperiodIssuance of new investment
units
Dividends from surplus

6,490,060

6,490,060(1,072,706)(1,072,706)(1,072,706)(1,072,706)(26,197)(26,197)--

1,832,513

1,832,513

1,832,513

1,832,513

Reversal of allowance fortemporary difference
adjustment
Net income
Net changes of items otherthan unitholders’ equity
Total changes of items during
the period
Balance at end of the period(31,449)(31,449)(31,449)

733,610733,610

7,249,868(31,449)(31,449)

7,218,418

1,832,669

1,832,669

41,863,855

28,686

28,68641,892,541－

8 －4th fiscal period (from August 1, 2017 to January 31, 2018)(Unit: thousand yen)
Valuation and translation
adjustments

Unitholders’ equity
SurplusTotal
net assets

Total
surplus

Total
Total
Deferredvaluation andunitholders’ gains or losses
translation
equityon hedges
adjustments

1,832,669

1,832,669

41,863,855

41,892,541

Dividends from surplus(1,832,448)(1,832,448)(1,832,448)(1,832,448)

Net income

1,802,173

1,802,173

1,802,173

1,802,173

Unappropriatedretainedearnings(undisposed
loss)

Unitholders’capitalBalance at beginning of theperiod40,031,185

28,686

28,686

Changes of items during theperiodNet changes of items otherthan unitholders’ equity
Total changes of items during
the period
Balance at end of the period

8,280

8,280

8,280

-

(30,275)(30,275)(30,275)

8,280

8,280

(21,995)*1 40,031,185

1,802,393

1,802,393

41,833,579

36,96636,966

41,870,546－

9 －(4) Statement of Cash Distributions(Unit: yen)I.

Unappropriated retained earnings

II. Cash distribution[Cash distribution per unit]
Cash distribution of earnings[Cash distribution of earnings per unit]
III. Retained earnings carried forward

3rd fiscal period
From: February 1, 2017
To: July 31, 2017

4th fiscal period
From: August 1, 2017
To: January 31, 2018

1,832,669,478

1,802,393,825

1,832,448,900[4,423]

1,689,101,100[4,077]

1,832,448,900[4,423]

1,689,101,100[4,077]

220,578

113,292,725

Method of calculation of amount of cash distribution
3rd fiscal period (from February 1, 2017 to July 31, 2017):
Pursuant to the cash distribution policy provided in Article 35, Paragraph 1 of SAR’s Articles of Incorporation, SAR shall distribute inexcess of the amount equivalent to 90% of the amount of distributable earnings of SAR as defined in Article 67-15 of the Act on
Special Measures Concerning Taxation. In accordance with such policy, concerning cash distribution of earnings (not including cash
distribution in excess of earnings), the decision was made to distribute 1,832,448,900 yen, which is the entire amount of theunappropriated retained earnings but excluding the portion where cash distribution of earnings per unit becomes a fractionalamount of less than 1 yen, as cash distribution of earnings.
4th fiscal period (from August 1, 2017 to January 31, 2018):
Pursuant to the cash distribution policy provided in Article 35, Paragraph 1 of SAR’s Articles of Incorporation, SAR shall distribute inexcess of the amount equivalent to 90% of the amount of distributable earnings of SAR as defined in Article 67-15 of the Act on
Special Measures Concerning Taxation. In accordance with such policy, concerning cash distribution of earnings (not including cash
distribution in excess of earnings), the decision was made considering 771,663,395 yen of gain on sales of real estate property to
distribute 1,689,101,100 yen, which is the minimum multiple of the total number of issued and outstanding investment units, withamount exceeding 90% of income before income taxes and 113,072,147 yen of net income was decided to be reserved internally.

－

10 －

(5) Statement of Cash Flows(Unit: thousand yen)
3rd fiscal period
From: February 1, 2017
To: July 31, 2017
Cash flows from operating activities
Income before income taxes
Depreciation
Investment unit issuance expenses
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund receivable
Increase (decrease) in accrued consumption taxes
Decrease (increase) in prepaid expenses
Decrease (increase) in long-term prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable - other
Increase (decrease) in advances received
Decrease from sales of property, plant and equipment in trust
Other, net
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment in trust
Repayments of tenant leasehold and security deposits in trust
Proceeds from tenant leasehold and security deposits in trust
Purchase of investment securities
Net cash provided by (used in) investing activities
Cash flows from financing activities
Increase in short-term loans payable
Decrease in short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of investment units
Dividends paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

－

11 －

4th fiscal period
From: August 1, 2017
To: January 31, 2018

1,833,531
287,475
48,461(21)
82,120(2,655)(261,743)(63,671)(20,666)(19,099)226
59,804
270,4972,579,413
9,366
4,803,041
21(80,426)(848)
4,721,788

1,876,542
305,290
27,928(24)
92,575
8,075
261,743
113,269
18,72924,922
84,485
14,243(251,394)
1,744,836(5,941)4,315,282
24(93,627)(1,027)4,220,652(18,557,651)(208,168)
482,179(18,283,641)(224,406)(128,352)
59,996(734,500)(1,027,262)

600,000(1,600,000)
9,830,000(300,000)
6,441,599(1,070,613)
13,900,986
339,133
4,498,806*1 4,837,939(1,380,000)(1,830,353)(3,210,353)(16,962)
4,837,939*1 4,820,976

(6) Notes on the Going Concern Assumption
Not applicable.
(7) Notes on Matters Concerning Significant Accounting Policies
1. Evaluation standards
Other securities:
and methods ofThose with fair value
valuation of securities
Fair value method or market value method (Variances are directly included in net assets.)
2. Method of
Property, plant and equipment (including trust assets)
depreciation of
The straight-line method is adopted. The useful life of primary property, plant and equipment is as
non-current assets
follows:
Buildings
5-69 years
Structures
10-15 years
Machinery and equipment
10 years
Tools, furniture and fixtures 3- 6 years
3. Accounting forInvestment unit issuance expenses
deferred assets
The entire amount is expensed as incurred.
4. Standards for
Accounting for fixed property tax, etc.
revenue and expense
Accounting for fixed property tax, city planning tax, depreciable asset tax, etc. (“fixed property tax,
recognitionetc.”) on real estate or beneficiary interest in trust for real estate held is that, of the tax amountassessed and determined, the amount corresponding to the concerned calculation period is expensed
as expenses related to rent business.
The amount equivalent to fixed property tax, etc. in the initial fiscal year borne by SAR uponacquisition of real estate or beneficiary interest in trust for real estate is not recognized as expenses
but included in the cost of acquisition of the concerned real estate, etc. In the fiscal period underreview, there was no amount equivalent to fixed property tax, etc. included in the cost of acquisitionof real estate, etc.
5. Method of(1) Hedge accounting approachhedge accounting
Deferral hedge accounting is adopted.
(2) Hedging instruments and hedged items
Hedging instruments:
Interest rate swap transaction
Hedged items: Interest on loans(3) Hedging policy
SAR conducts derivative transactions for the purpose of hedging the risks provided in its Articles
of Incorporation pursuant to rules and regulations.
(4) Method of assessing the effectiveness of hedging
The effectiveness of hedging is assessed by comparing the cumulative change in cash flows of
the hedging instruments with the cumulative change in cash flows of the hedged items andverifying the ratio of the amount of change in the two.
6. Scope of funds
The funds (cash and cash equivalents) in the statement of cash flows comprise cash on hand and cashin the statement ofin trust, demand deposits and deposits in trust, and short-term investments with a maturity of three
cash flows (cash andmonths or less from the date of acquisition that are readily convertible to cash and that are subject
cash equivalents)
to an insignificant risk of changes in value.
7. Other significant(1) Accounting for beneficiary interest in trust for real estate, etc.
matters serving as theConcerning beneficiary interest in trust for real estate, etc. held, all accounts of assets andbasis for preparation
liabilities within trust assets as well as all accounts of revenue and expenses from the trust assetsof financial statements
are recognized in the relevant account item of the balance sheet and the statement of income.
The following material items of the trust assets recognized in the relevant account item areseparately listed on the balance sheet.
① Cash and deposits in trust② Buildings in trust; Structures in trust; Machinery and equipment in trust; Tools, furniture andfixtures in trust; Land in trust③ Leasehold rights in trust④ Tenant leasehold and security deposits in trust(2) Accounting for consumption tax, etc.
The accounting for consumption tax and local consumption tax is the taxes are excluded from thetransaction amounts.
Non-deductible consumption tax on acquisition of assets is included in the acquisition cost ofeach asset.

－

12 －

(8) Notes to the Financial Statements[Notes to the Balance Sheet]*1

Minimum net assets as provided in Article 67, Paragraph 4 of the Act on Investment Trusts and Investment Corporations(Unit: thousand yen)
3rd fiscal period(As of July 31, 2017)

4th fiscal period(As of January 31, 2018)

50,00050,0002 Allowance for temporary difference adjustment
3rd fiscal period (From: February 1, 2017 To: July 31, 2017)
1. Reason for the difference or reversal items and amount(Unit: thousand yen)
Item

Reason for thedifference

Initial amount

Balance at
beginning oftheperiodAllowance

Reversal

26,197－

26,197

Balance at endof the period

Deferred gains
or losses on－－hedges

2. Method of reversal
Deferred gains or losses on hedges
Reversal will be made due to changes of fair value.
4th fiscal period (From: August 1, 2017 To: January 31, 2018)
Not applicable

－

13 －

－

Reason for thereversal

Changes of fairvalue

[Notes to the Statement of Income]*1 Breakdown of operating income (loss) from real estate leasing(Unit: thousand yen)
3rd fiscal period
From: February 1, 2017
To: July 31, 2017

4th fiscal period
From: August 1, 2017
To: January 31, 2018

1,895,917

1,997,374

181,193
58,706

187,680
60,958

A. Operating revenue from real estate leasing
Lease business revenue
Rental revenue
Common area maintenance revenue
Parking revenue
Facility use revenue
Other rental revenue

8,344
2,054

2,146,216

7,738
1,865

2,255,617

Other lease business revenue
Utilities reimbursement

122,615

Other revenue

43,948

Total operating revenue from real estate leasing

134,400
166,563

18,254

2,312,779

152,654
2,408,272

B. Operating expenses from real estate leasing
Expenses related to rent business
Management fee
Utilities expenses

124,462
126,591

121,151
137,730

Taxes and dues
Repair expenses

156,208
62,667

139,11259,548Trust fee
Insurance premium

8,724
3,635

10,740
3,772

287,475
66,810305,29064,304

Depreciation
Other expenses
Total operating expenses from real estate leasing
C. Operating income (loss) from real estate leasing
*2

[A－B]

Breakdown of gain on sales of real estate property

3rd fiscal period (From: February 1, 2017 To: July 31, 2017)(Unit: thousand yen）
Urban Park Yoyogikoen
Real Estate Sale Income

1,100,000

Real Estate Sale Cost
Other Real Estate Sale Expenses

902,696
44,860Gain on Real Estate Sale

152,443

Oak Minami-Azabu(49% of quasi co-ownership interest)
Real Estate Sale Income

2,459,800

Real Estate Sale Cost
Other Real Estate Sale Expenses

1,676,717
36,913Gain on Real Estate Sale

746,168－

14 －

836,576

841,650

1,476,202

1,566,622

4th fiscal period (From: August 1, 2017 To: January 31, 2018)
Oak Minami-Azabu(51% of quasi co-ownership interest)
Real Estate Sale Income
2,560,200
Real Estate Sale Cost
Other Real Estate Sale Expenses

1,744,836
43,699Gain on Real Estate Sale

771,663[Notes to the Statement of Unitholders’ Equity]*1

Total number of investment units authorized and total number of investment units issued and outstanding

Total number of investment units authorized
Total number of investment units issued and outstanding

3rd fiscal period
From: February 1, 2017
To: July 31, 2017

4th fiscal period
From: August 1, 2017
To: January 31, 2018

10,000,000 units

10,000,000 units

414,300 units

414,300 units[Notes to the Statement of Cash Flows]*1 Reconciliation of cash and cash equivalents at end of period to the amount of balance sheet items(Unit: thousand yen)
3rd fiscal period
From: February 1, 2017
To: July 31, 2017

4th fiscal period
From: August 1, 2017
To: January 31, 2018

Cash and deposits

1,598,847

1,667,713

Cash and deposits in trust

3,239,091

3,153,262

Cash and cash equivalents

4,837,939

4,820,976[Notes on Lease Transactions]Operating leases (as lessor)
Future minimum lease payments(Unit: thousand yen)
3rd fiscal period
As of July 31, 2017

4th fiscal period
As of Jan. 31, 2018

Not later than 1 year

1,807,841

1,597,468

Later than 1 year

3,858,017

3,175,890

5,665,859

4,773,358

Total

－

15 －

[Notes on Financial Instruments]
1. Matters concerning status of financial instruments(1) Policy for handling financial instruments
SAR shall procure funds to allocate to acquisition of real estate related assets, repayment of interest‐bearing liabilities,
etc. through mainly issuance of investment units, borrowing from financial institutions, issuance of investment
corporation bonds, etc. Upon procuring funds through interest‐bearing liabilities, due consideration shall be given tofund procurement agility and financial stability.
(2) Description of financial instruments and associated risks, and risk management system
The funds procured through loans, which shall be for the purpose of mainly acquisition of assets, are exposed to liquidity
risk until the repayment date, but the concerned risks are managed by taking such measures as lengthening the
procurement periods and staggering the maturities. In addition, loans with floating interest rates are exposed to interest
rate fluctuation risk, but derivative transactions (interest rate swap transactions) are utilized as hedging instruments to,in effect, convert interest rates to fixed rates in order to mitigate that risk. For the hedge accounting approach, hedging
instruments, hedged items, hedging policy and method of assessing the effectiveness of hedging, please refer to “5.
Method of hedge accounting” described under “Notes on Matters Concerning Significant Accounting Policies” earlier inthis document.
(3) Supplementary explanation to matters concerning fair value, etc. of financial instruments
Not applicable.
2.

Matters concerning fair value, etc. of financial instruments
The carrying amount and fair value as of July 31, 2017, and the amount of difference between these, are as follows:(Unit: thousand yen)
Carrying amount

Fair value

Amount of difference(1) Cash and deposits

1,598,847

1,598,847-(2) Cash and deposits in trust

3,239,091

3,239,091

-

-

-

-

4,837,939

4,837,939-

8,680,000

8,680,000-

30,050,000

30,050,000-

38,730,000

38,730,000-

28,686

28,686-(3) Investment securities
Assets total(4) Current portion of long-term loans
payable(5) Long-term loans payable
Liabilities total(6) Derivative transactions (*)

The carrying amount and fair value as of January 31, 2018, and the amount of difference between these, are as follows:(Unit: thousand yen)
Carrying amount

Fair value

Amount of difference(1) Cash and deposits

1,667,713

1,667,713-(2) Cash and deposits in trust

3,153,262

3,153,262-

734,500

734,500-

5,555,476

5,555,476-(4) Current portion of long-term loans
payable7,300,000

7,300,000-(5) Long-term loans payable

30,050,000

30,050,000-

37,350,000

37,350,000-

36,96636,966-(3) Investment securities
Assets total

Liabilities total(6) Derivative transactions (*)(*)

Assets and liabilities arising from derivative transactions are offset and presented in the net amount, with the balance shown in parentheses ( )when in a net liability position.

－

16 －

(Note 1) Method of calculation of the fair value of financial instruments(1) Cash and deposits; (2) Cash and deposits in trust; (4) Current portion of long-term loans payable
Because these are settled in a short period of time, the fair value is approximately the same as the book value and thus stated at that bookvalue.
(3) Investment securities
Because interest income etc. from mezzanine loan debt are based on floating interest rates, the fair value is approximately the same as thebook value and thus stated at that book value.
(5) Long-term loans payables
Because long-term loans payable are all with floating interest rates under terms and conditions that interest rates be reviewed every set periodof time, the fair value is approximately the same as the book value and thus stated at that book value.
(6) Derivative transactions
Please refer to “Notes on Derivative Transactions” later in this document.
(Note 2) Financial instruments for which estimation of fair value is recognized to be difficult(Unit: thousand yen)
3rd fiscal period
As of July 31, 2017

Category
Tenant leasehold and security deposits in trust

4th fiscal period
As of January 31, 2018

1,863,336

1,794,980

Tenant leasehold and security deposits in trust are not subject to valuation at fair value, because a reasonable estimation of cash flows isrecognized to be extremely difficult due to there being no market price and difficulty of calculating the actual deposit period from when lessees
move in to when they move out.
(Note 3) Amount of redemption of monetary claims scheduled to be due after the date of settlement of accounts(July 31, 2017)(Unit: thousand yen)
Later than 1 year Later than 2 years Later than 3 years Later than 4 years
and not later than and not later than and not later than and not later than Later than 5 years
2 years
3 years
4 years
5 years

Not later than
1 yearCash and deposits

1,598,847

-

-

-

-

-

Cash and deposits in trust

3,239,091

-

-

-

-

-

-

-

-

-

-

-

4,837,939

-

-

-

-

-

Investment securities
Total(January 31, 2018)(Unit: thousand yen)
Later than 1 year Later than 2 years Later than 3 years Later than 4 years
and not later than and not later than and not later than and not later than Later than 5 years
2 years
3 years
4 years
5 years

Not later than
1 yearCash and deposits

1,667,713

-

-

-

-

-

Cash and deposits in trust

3,153,262

-

-

-

-

-

-

-

-

-

-

734,500

4,820,976

-

-

-

-

734,500

Investment securities
Total(Note 4) Amount of repayment of loans scheduled to be due after the date of settlement of accounts(July 31, 2017)

Not later than
1 year(Unit: thousand yen)
Later than 1 year Later than 2 years Later than 3 years Later than 4 years
and not later than and not later than and not later than and not later than Later than 5 years
2 years
3 years
4 years
5 years

Long-term loans payable

8,680,000

7,300,000

7,300,000

11,300,000

4,150,000

-

Total

8,680,000

7,300,000

7,300,000

11,300,000

4,150,000-(January 31, 2018)

Not later than
1 year(Unit: thousand yen)
Later than 1 year Later than 2 years Later than 3 years Later than 4 years
and not later than and not later than and not later than and not later than Later than 5 years
2 years
3 years
4 years
5 years

Long-term loans payable

7,300,000

7,300,000

11,300,000

7,300,000

4,150,000

-

Total

7,300,000

7,300,000

11,300,000

7,300,000

4,150,000

-

－

17 －

[Notes on Securities]
Other securities
3rd fiscal period (as of July 31, 2017)
Not applicable.
4th fiscal period (as of January 31, 2018)（Unit: Thousand yen）
Category

Book value(1)Stock

Acquisition cost

Difference

-

-

-

bond, municipal
bond, etc.

-

-

-

②Corporate bond

-

-

-

③Other

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

400,000

400,000

-

-

-

-

334,500

334,500-

734,500

734,500-

734,500

734,500-(2)Bond①Government
Book value greaterthan acquisition cost(3)Other
Subtotal(1)Stock(2)Bond①Government
bond, municipalBook value less thanor equal tobond, etc.

acquisition cost

②Corporate bond
③Other(3)Other
Subtotal
Total[Notes on Derivative Transactions]
3rd fiscal period (as of July 31, 2017)
1. Derivative transactions to which hedge accounting is not applied
Not applicable.
2.

Derivative transactions to which hedge accounting is applied
The following is the contract amount or the amount equivalent to the principal provided in the contract as of the date ofsettlement of accounts for each hedge accounting approach.
(Unit: thousand yen)Hedge
accounting
approach

Type, etc. of derivative transactionMainhedged item

Principle

Interest rate swap transaction

Long-term

accounting(floating receivable; fixed payable)loans payable

Contract amount, etc. (Note 1)
Of which,later than 1 year
30,050,000(Note 1) Contract amount, etc. is based on notional principal.
(Note 2) Fair value is calculated based on the price quoted by lending financial institutions, etc.

－

18 －

30,050,000

Fair value(Note 2)
28,686

4th fiscal period (as of January 31, 2018)
1. Derivative transactions to which hedge accounting is not applied
Not applicable.
2.

Derivative transactions to which hedge accounting is applied
The following is the contract amount or the amount equivalent to the principal provided in the contract as of the date ofsettlement of accounts for each hedge accounting approach.
(Unit: thousand yen)Hedge
accounting
approach

Type, etc. of derivative transactionMainhedged item

Principle

Interest rate swap transaction

Long-term

accounting(floating receivable; fixed payable)loans payable

Contract amount, etc. (Note 1)
Of which,later than 1 year
30,050,000

30,050,000

Fair value(Note 2)36,966(Note 1) Contract amount, etc. is based on notional principal.
(Note 2) Fair value is calculated based on the price quoted by lending financial institutions, etc.

[Notes on Retirement Benefits]
3rd fiscal period (as of July 31, 2017)
Not applicable.
4th fiscal period (as of January 31, 2018)
Not applicable.
[Notes on Tax-Effect Accounting]
1. Breakdown of main causes for occurrence of deferred tax assets and deferred tax liabilities(Unit: thousand yen)
3rd fiscal period
As of July 31, 2017

4th fiscal period
As of January 31, 2018

Deferred tax assets
Non-deductible accrued enterprise tax
Acquisition cost of securities

20
-

6,119
1,364

Subtotal
Valuation allowance

20
-

7,484
(7,484)

Total

20

-

20

-

Deferred tax assets, net
2.

Breakdown of major components that caused any significant differences between the statutory tax rate and the effective
income tax rate after application of tax-effect accounting(Unit: %)3rd fiscal period
As of July 31, 2017

4th fiscal period
As of January 31, 2018

Statutory tax rate

31.74

31.74

[Adjustments]
Deductible distributions payable(31.72)(28.57)

Other

0.04

0.79

Effective income tax rate
after application of tax-effect accounting

0.06

3.96

－

19 －

[Notes on Share of Profit (Loss) of Entities Accounted for Using Equity Method, etc.]
3rd fiscal period (as of July 31, 2017)
Not applicable.
4th fiscal period (as of January 31, 2018)
Not applicable.
[Notes on Related-Party Transactions]
1.

Parent company, major corporate unitholder, etc.
3rd fiscal period (from February 1, 2017 to July 31, 2017)
Not applicable.
4th fiscal period (from August 1, 2017 to January 31, 2018)
Not applicable.

2.

Affiliated company, etc.
3rd fiscal period (from February 1, 2017 to July 31, 2017)
Not applicable.
4th fiscal period (from August 1, 2017 to January 31, 2018)
Not applicable.

3.

Fellow subsidiary, etc.
3rd fiscal period (from February 1, 2017 to July 31, 2017)
Not applicable.
4th fiscal period (from August 1, 2017 to January 31, 2018)
Not applicable.

－

20 －

4.

Director, major individual unitholder, etc.
3rd fiscal period (from February 1, 2017 to July 31, 2017)Type

Name ofCapital stock

Description

company,orof business

investmentsorin capital

occupation

etc. or

Address

personDirector,or close
relativeof

Atsushi

－

－

Kato

Percentage
of votingrights, etc.
held by (in)amountAccounttransaction(thousand

item

yen)

Executive

Payment of

Director of

asset

SAR, andmanagement
0.01%

and CEO of

director

Description ofSAR

President

fee to theAsset

the Asset

Management

Management

Company

Company

Balance atTransaction

end ofperiod(thousandyen)

321,598

Accounts(Note 2)

payable -(Note 3)other204,623(Note 2)

(Note 1)

4th fiscal period (from August 1, 2017 to January 31, 2018)
Name ofType

company,
etc. or

Address

Capital stock

Description

orof business

investmentsorin capital

occupation

personDirector,or close
relativeof

Atsushi

－

－

Kato

director

Percentage
of votingrights, etc.
held by (in)amountAccounttransaction(thousand

item

yen)

SAR
Payment of

Director of

asset

SAR, andmanagement
0.01%

and CEO of

fee to theAsset

the Asset

Management

Management

Company

Company(Note 1)

Description of

Executive

President

Balance atTransaction

end ofperiod(thousandyen)

237,214

Accounts(Note 2)

payable -(Note 3)other220,609(Note 2)

(Note 1)

The transaction is one that was conducted by Atsushi Kato as President and CEO of a third party (the Asset Management Company), andthe transaction amount is based on the terms and conditions provided in the Articles of Incorporation of SAR.

(Note 2)Of the amounts above, the transaction amount does not include consumption tax, while the balance at the end of the period includes
consumption tax.

(Note 3)

Asset management fee of 3rd fiscal period includes the property acquisition incentive portion included in the book value of individual
real estate, etc. in the amount of 96,535 thousand yen and the property transfer incentive portion in the amount of 35,598 thousand
yen. Asset management fee of 4th fiscal period includes the property transfer incentive portion in the amount of 25,602 thousand yen.

[Notes on Asset Retirement Obligations]
3rd fiscal period (as of July 31, 2017)
Not applicable.
4th fiscal period (as of January 31, 2018)
Not applicable.

－

21 －

[Notes on Investment and Rental Properties]
SAR owns rental real estate, etc. for the purpose of earning revenue from leasing. The carrying amount, amount of increase(decrease) during the period and fair value of these investment and rental properties are as follows:(Unit: thousand yen)
3rd fiscal period
From: February 1, 2017
To: July 31, 2017

4th fiscal period
From: August 1, 2017
To: January 31, 2018

Balance at beginning of period

62,518,247

78,156,438

Amount of increase (decrease) during period

15,638,191(1,867,315)

Balance at end of period

78,156,438

76,289,122

84,450,200

82,680,000

Carrying amount

Fair value at end of period(Note 1) Carrying amount is the amount of the cost of acquisition, less accumulated depreciation.
(Note 2) Of the amount of increase (decrease) in investment and rental properties during 3rd period, the amount of increase are mainly attributable toacquisition of real estate beneficiary interest in trust of 7 properties (18,314,960 thousand yen) and capital expenditure (190,119 thousandyen), while the amount of decrease is mainly attributable to disposition of 2 properties (one of those is 49% of quasi co-ownership) (2,579,413
thousand yen) and depreciation (287,475 thousand yen). Of the amount of increase (decrease) in investment and rental properties during 4th
period, the amount of increase is mainly attributable to capital expenditure (182,811 thousand yen), while the amount of decrease is mainly
attributable to disposition of 1 property (51% of quasi co-ownership)(1,744,836 thousand yen) and depreciation (305,290 thousand yen).
(Note 3) Fair value at the end of the period is the appraisal value by an outside real estate appraiser. Of the fair value at the end 3rd period, that of Oak
Minami-Azabu (51% of quasi co-ownership) is based of transfer price (2,560,200 thousand yen) stated in the contract dated Feb. 28, 2017.

The income (loss) concerning investment and rental properties are as stated in “Notes to the Statement of Income” earlier inthis document.

－

22 －

[Notes on Segment Information]
1. Segment information
Segment information is omitted because SAR operates a single segment, which is the real estate leasing business.
2.

Related information
3rd fiscal period (from February 1, 2017 to July 31, 2017)(1) Information about products and services
Information about products and services is omitted because net sales to external customers for a single products andservices category are in excess of 90% of operating revenue on the statement of income.
(2) Information about geographic areas① Net sales
Information about net sales is omitted because net sales to external customers in Japan are in excess of 90% of
operating revenue on the statement of income.
② Property, plant and equipment
Information about property, plant and equipment is omitted because the amount of property, plant and equipment
located in Japan is in excess of 90% of the amount of property, plant and equipment on the balance sheet.
(3) Information about major customers（Unit: Thousand yen）
Customer nameOperating revenue

Kanden Realty & Development Co., Ltd.

746,168

Segment
Real estate leasing business.

4th fiscal period (from August 1, 2017 to January 31, 2018)(1) Information about products and services
Information about products and services is omitted because net sales to external customers for a single products andservices category are in excess of 90% of operating revenue on the statement of income.
(2) Information about geographic areas① Net sales
Information about net sales is omitted because net sales to external customers in Japan are in excess of 90% of
operating revenue on the statement of income.
② Property, plant and equipment
Information about property, plant and equipment is omitted because the amount of property, plant and equipment
located in Japan is in excess of 90% of the amount of property, plant and equipment on the balance sheet.
(3) Information about major customers（Unit: Thousand yen）
Customer nameOperating revenue

Kanden Realty & Development Co., Ltd.

771,663－

23 －Segment
Real estate leasing business.

[Notes on Per Unit Information]
3rd fiscal period
From: February 1, 2017
To: July 31, 2017

4th fiscal period
From: August 1, 2017
To: January 31, 2018

Net assets per unit

101,116 yen

101,063 yen

Net income per unit

4,697 yen

4,349 yen

(Note 1) Net income per unit is calculated by dividing net income by the daily weighted average number of investment units. In addition, diluted net income
per unit is not stated, because there are no diluted investment units.
(Note 2) The basis for calculation of net income per unit is as follows:

3rd fiscal period
From: February 1, 2017
To: July 31, 2017

4th fiscal period
From: August 1, 2017
To: January 31, 2018

1,832,513

1,802,173--

1,832,513

1,802,173

390,083

414,300

Net income (thousand yen)Amount not attributable to common unitholders (thousandyen)
Net income attributable to common investment units(thousand yen)
Average number of investment units during period (units)[Notes on Significant Subsequent Events]

Issuance of new investment units
For the issuance of new investment units for the purpose of procuring funds for acquisition of new properties and repayment ofborrowings SAR resolved at the Board of Directors meetings on January 12, 2018 and January 22, 2018, and the payments werecompleted as follows. For the issuance of new investment units through public offering, the payment was completed on February
1, 2018, and for the issuance of new investment units through third-party allotment, the payment was completed on February 27,
2018.
As a result, total unitholders’ capital changed to 45,832,670,448 yen with 470,624 investment units outstanding.
<Issuance of new investment units through public offering>Number of new investment units issued: 53,641 units
Offer price: 106,724 yen per unit
Total offer price: 5,724,782,084 yen
Paid-in amount (issue amount): 103,002 per unit
Total paid-in amount (total issue amount): 5,525,130,282 yen
Payment date: February 1, 2018
<Issuance of new investment units through third-party allotment>
Number of new investment units issued: 2,683 units
Paid-in amount (issue amount): 103,002 per unit
Total paid-in amount (total issue amount): 276,354,366 yen
Payment Date: February 27, 2018
Allottee: Nomura Securities Co. Ltd.
SAR acquired 6 properties (total amount of purchase price: 10,743 million yen) allocating the funds from issuance of new
investment units through public offering as part of acquisition funds.

－

24 －

(9) Changes in Total Number of Investment Units Issued and Outstanding
The following are the changes in unitholders’ capital and total number of investment units issued and outstanding since theestablishment of SAR.

Date

Event

December 1, 2015

Establishment throughprivate placement

January 14, 2016
April 19, 2016
May 17, 2016
April 4, 2017
April 24, 2017
February 1, 2018
February 27, 2018

Capital increase throughprivate placement
Capital increase throughpublic offering
Capital increase throughthird-party allotment
Capital increase throughpublic offering
Capital increase throughthird-party allotment
Capital increase throughpublic offering
Capital increase throughthird-party allotment

Total number of investment
units issued and outstanding(units)Increase
Balance(Decrease)

Unitholders’ capital(thousand yen)
(Note 9)
Increase
Balance(Decrease)

Remarks

2,000

2,000

200,000

200,000(Note 1)

95,00097,0009,500,000

9,700,000(Note 2)

235,900

332,900

22,705,375

32,405,375(Note 3)

11,800344,700

1,135,750

33,541,125(Note 4)

66,200410,900

6,173,017

39,714,142(Note 5)3,400

414,300

317,043

40,031,185(Note 6)53,641

467,941

5,525,130

45,556,316(Note 7)

2,683

470,624

276,354

45,832,670(Note 8)(Note 1) Investment units were issued at a paid-in amount of 100,000 yen per unit upon the establishment of SAR.
(Note 2) Investment units were issued at a paid-in amount of 100,000 yen per unit.
(Note 3) New investment units were issued through public offering at an issue price of 100,000 yen (paid-in amount of 96,250 yen) per unit for the
purpose of procuring funds for acquisition of new properties, etc.
(Note 4) New investment units were issued through third-party allotment at a paid-in amount of 96,250 yen per unit for the purpose of procuring funds
for repayment of borrowings.
(Note 5) New investment units were issued through public offering at an issue price of 96,720 yen (paid-in amount of 93,248 yen) per unit for the purposeof procuring funds for acquisition of new properties.
(Note 6) New investment units were issued through third-party allotment at a paid-in amount of 93,248 yen per unit for the purpose of procuring funds
for repayment of borrowings.
(Note 7) New investment units were issued through public offering at an issue price of 106,724 yen (paid-in amount of 103,002 yen) per unit for the
purpose of procuring funds for acquisition of new properties.
(Note 8) New investment units were issued through third-party allotment at a paid-in amount of 103,002 yen per unit for the purpose of procuring funds
for repayment of borrowings.
(Note 9) Deduction of reversal of allowance for temporary difference adjustment in line with the cash distribution in excess of earnings from unitholders’capital is not considered.

－

25 －

4.

Changes in Directors(1) Directors of SAR
There were no changes in directors in the fiscal period under review.
(2) Directors of the Asset Management Company
There were no changes in directors in the fiscal period under review.

5.

Reference Information(1) Investment Status

Type ofasset

Primary use

3rd fiscal period

4th fiscal period(As of July 31, 2017)(As of January 31, 2018)

Geographic area

Total amount

As a percentage

Total amount

As a percentage(Note 1)

heldof total assets

heldof total assets(million yen)(%)(million yen)(%)

(Note 2)

(Note 3)(Note 2)

(Note 3)

Greater Tokyo

16,772

20.1

15,070

18.3

Other than Greater Tokyo

10,34012.4

10,297

12.5

Greater Tokyo

13,858

16.6

13,845

16.9

Other than Greater Tokyo

1,549

1.9

1,542

1.9

Greater Tokyo

24,61729.4

24,544

29.9

Greater Tokyo

7,141

8.5

7,128

8.7

Other than Greater Tokyo

3,875

4.6

3,859

4.7

78,156

93.5

76,289

92.9

-

-

734

0.9

Deposits and other assets

5,452

6.5

5,131

6.2

Total amount of assets

83,609100.0

82,154100.0

OfficeReal

Residence

estatein trust

Logistics facility

Hotel

Subtotal
Investment securities

Amount(million yen)

As a percentage
of total assets(%)

Amount(million yen)

As a percentage
of total assets(%)

Total amount of liabilities (Note 4)

41,71649.9

40,28449.0

Total amount of net assets (Note 4)

41,89250.1

41,87051.0(Note 1) “Greater Tokyo” refers to Tokyo’s 23 wards, Yokohama City and Kawasaki City in the case of the office asset type, andTokyo, Kanagawa, Saitama and Chiba Prefectures in the case of other asset types (residence, logistics facility and hotel).
The same shall apply hereinafter.
(Note 2) “Total amount held” is the carrying amount as at the date of settlement of accounts (in the case of real estate in trust,then the depreciated book value), rounded down to the nearest million yen.
(Note 3) “As a percentage of total assets” is the carrying amount of the concerned assets expressed as a percentage of the total
amount of assets, rounded to the first decimal place.
(Note 4) “Total amount of liabilities” and “Total amount of net assets” are according to total liabilities and total net assets on
the balance sheet.

－

26 －

(2) Invested Assets① Overview of Investment Assets
PropertyUse

no.

Property nameAcquisition

Share of

Location

price

investment(Note 2)

(million yen)(%)

(Note 3)(Note 4)(Note 1)

OFC-01

OFC-03

OFC-04

Minami-Azabu Shibuya

Minato Ward,

Building

Tokyo

Honmachibashi Tower

Osaka City, Osaka

Nishi-Shinjuku Matsuya

Shibuya Ward,

BuildingTokyo

Alphabet Seven

OFC-06

Shibuya MK Building

Office

OFC-05

OFC-07

Chuo Ward,

Hakata-eki Higashi 113
Building

Minato Ward,Tokyo
Shibuya Ward,
Tokyo

Real estateappraisalvalue, etc.

Acquisition date(million yen)
(Note 5)

2,973

3.9

3,150

January 14, 2016

6,065

8.0

6,920

January 14, 2016

1,763

2.3

2,430

April 20, 2016

1,725

2.3

2,330

April 20, 2016

2,042

2.7

2,810

April 20, 2016

1,885

2.5

2,070

April 20, 2016

6,320

8.4

6,890

April 20, 2016

2,286

3.0

2,480

April 6, 201725,05933.3

29,080

－

2,045

2.7

2,170

January 14, 2016

6,315

8.4

7,310

January 14, 2016

2,528

3.4

2,580

April 20, 2016

1,490

2.0

1,610

April 20, 2016

1,460

1.9

1,510

February 1, 2017

1,186

1.6

1,190

April 6, 201715,02419.9

16,370－Hakata Ward,
Fukuoka City,
Fukuoka
Kanagawa Ward,

OFC-08Asahi Building

Yokohama City,
Kanagawa
Hakata Ward,

OFC-09Hakata-eki East Place

Fukuoka City,
Fukuoka

Subtotal
RSC-01

Urban Park Azabujuban

RSC-02

Urban Park Daikanyama

RSC-04

Urban Park Shin-Yokohama

Minato Ward,Tokyo
Shibuya Ward,Tokyo

Residence

Kohoku Ward,
Yokohama City,
Kanagawa
RSC-05

Urban Park Namba

RSC-06

Urban Park Gokokuji

RSC-07

Urban Park Kashiwa

Naniwa Ward,
Osaka City, Osaka
Toshima Ward,Tokyo
Kashiwa City,
Chiba

Subtotal－

27 －Iwatsuki Ward,
LGC-01

Iwatsuki Logistics

Saitama City,

6,942

9.2

7,130

January 14, 2016

3,560

4.7

4,050

January 14, 2016

7,875

10.5

8,560

January 14, 2016

4,700

6.2

4,890

April 6, 2017

1,300

1.7

1,400

April 6, 201724,37732.3

26,030

－

2,069

2.7

2,290

January 14, 2016

1,750

2.3

1,750

January 14, 2016

3,827

5.1

3,890

April 6, 2017

3,248

4.3

3,270

April 6, 2017

10,894

14.5

11,200－75,354100.0

82,680－Saitama
Kanagawa Ward,

Logistics facility

LGC-02

Yokohama Logistics

Yokohama City,
Kanagawa

LGC-03

Funabashi Logistics

LGC-04

Baraki Logistics

LGC-05Tokorozawa Logistics

Funabashi City,
Chiba
Ichikawa City,
Chiba
Tokorozawa City,
SaitamaHotel

Subtotal
HTL-01R&B Hotel Umeda East

HTL-02

Smile Hotel Namba

HTL-03

Kita Ward,
Osaka City, Osaka
Naniwa Ward,
Osaka City, Osaka

BEST WESTERN Tokyo

Edogawa Ward,

Nishikasai

Tokyo
Tsurumi Ward,

HTL-04

BEST WESTERN Yokohama

Yokohama City,
Kanagawa

Subtotal
Total(Note 1) “Property no.” is that assigned to SAR’s investment assets by categorizing into office (OFC), retail facility (RTL), residence (RSC), logistics
facility (LGC) and hotel (HTL), and numbering in order by category. The same shall apply hereinafter.
(Note 2) “Location” is the smallest independent administrative district in which each investment asset is located.
(Note 3) “Acquisition price” indicates, with the exception of Minami-Azabu Shibuya Building and Oak Minami-Azabu Building, the sale and purchaseprice stated in the sale and purchase agreement for the investment asset, rounded to the nearest million yen. The sale and purchase pricedoes not include consumption tax, local consumption tax and various expenses required for the acquisition. However, in the case of MinamiAzabu Shibuya Building, since the price for each investment asset is not set in the sale and purchase agreement, the total sale and purchaseprice is divided proportionally based on the ratio of the appraisal value of the properties at the time of acquisition and indicated as theacquisition price.
(Note 4) “Share of investment” is the acquisition price of the investment asset expressed as a percentage of the sum total amount of acquisition price,rounded to the first decimal place.
(Note 5) Appraisals are entrusted to Daiwa Real Estate Appraisal Co., Ltd., Japan Real Estate Institute and The Tanizawa Sogo Appraisal co., Ltd. andreal estate appraisal values are the opinions of value stated in the real estate appraisal report with January 31, 2018 as the date of value,each rounded to the nearest million yen. For details, please refer to “④ Summary of appraisal report.”

－

28 －

② Portfolio Summarya.

By Geographic Area
Geographic area

Acquisition price(million yen)

Share
(%)
(Note 1)

Greater

5 central wards of Tokyo (Note 2)

16,863

22.4

Tokyo

Other areas in Greater Tokyo

42,946

57.0

79.4

Other than Greater Tokyo

15,545

20.6

Total

75,354100.0(Note 1) “Share” is calculated on an acquisition price basis, rounded to the first decimal place. Accordingly, the shares may
not add up to 100%. The same shall apply hereinafter in “c. By Asset Type (Use).”(Note 2) “5 central wards of Tokyo” refers to Chiyoda, Chuo, Minato, Shinjuku and Shibuya Wards. The same shall apply
hereinafter.
(a) OfficeGeographic area
GreaterTokyo

Acquisition price(million yen)

Share
(%)

5 central wards of Tokyo

8,503

33.9

Other areas in Greater Tokyo

6,320

25.2

59.2

Other than Greater Tokyo

10,236

40.8

Total

25,059100.0(b) Residence
Geographic area

Acquisition price(million yen)

Share
(%)

Greater

5 central wards of Tokyo

8,360

55.6

Tokyo

Other areas in Greater Tokyo

5,174

34.4

90.1

Other than Greater Tokyo

1,490

9.9

Total

15,024100.0(c) Logistics facility
Geographic area
GreaterTokyo

Acquisition priceShare(million yen)

(%)
－

0.0

24,377100.0

5 central wards of Tokyo

100.0
Other areas in Greater Tokyo－

0.0

24,377

100.0

Other than Greater Tokyo
Total

－

29 －

(d) Hotel
Acquisition price(million yen)

Geographic areab.

Greater

5 central wards of Tokyo

Tokyo

Other areas in Greater Tokyo

－

0.0

7,075

64.9

64.9

Other than Greater Tokyo

3,819

35.1

Total

10,894100.0

By Size
Acquisition price

Share
(%)

Number ofproperties

5 billion yen or more

(Note)

5

21.7

1 billion yen or more
but less than 5 billion yen

18

78.3

Total

23

100.0

but less than 10 billion yen(Note)
c.

Share
(%)

“Share” is calculated on a number of properties basis.

By Asset Type (Use)Use

Number of

Acquisition priceShareproperties(million yen)(%)

Office825,05933.3

Residence

6

15,02419.9

Logistics facility

524,377

32.3

Hotel

4

10,894

14.5

Total

23

75,354

100.0

－

30 －

③ Status of Leasing

Propertyno.

OFC-01

OFC-03

OFC-04

Property nameMinami-Azabu Shibuya
Building
Honmachibashi Tower
Nishi-Shinjuku Matsuya
Building

OFC-05Alphabet Seven

OFC-06

Shibuya MK Building

OFC-07

Hakata-eki Higashi 113
Building

Number ofConstruction

tenants

completion(Note 1)

June 1993

55

February 2010

(Note 7)

Operating

Security andrevenueguarantee

from leasing

deposits(thousand(thousand

yen)

yen)

(Note 2)

(Note 3)

Leased area Leasable area
(m2)

(m2)

(Note 4)(Note 5)

Occupancy
rate(%)(Note 6)

90,118110,427

3,263.08

3,263.08

100.0

215,202

194,529

10,489.58

10,489.58

100.0

May 1987

9

90,089130,869

3,521.03

3,521.03

100.0

January 1990

9

77,246

95,0152,464.59

2,464.59

100.0

July 1993

4

74,20599,047

1,612.88

1,612.88

100.0

October 1987

32

74,613

97,2893,486.93

3,600.46

96.8

OFC-08Asahi Building

November 1994

21

210,183

244,513

8,672.01

8,672.01

100.0

OFC-09Hakata-eki East Place

February 1986

18

95,27662,367

4,632.70

4,632.70

100.0

RSC-01

Urban Park Azabujuban

November 1999

42

55,465

11,4091,907.85

1,986.76

96.0

RSC-02

Urban Park Daikanyama

67

190,353

81,9005,855.92

5,977.18

98.0

RSC-04

Urban Park Shin-Yokohama

May 2009

75

70,616

15,934

3,953.03

3,989.11

99.1

RSC-05

Urban Park Namba

January 2013

114

51,049100

2,525.62

2,584.81

97.7

RSC-06

Urban Park Gokokuji

February 1990

95

46,4078,122

1,767.51

1,964.04

90.0

RSC-07

Urban Park Kashiwa

August 199740

35,7068,565

2,884.20

2,954.77

97.6

LGC-01

Iwatsuki Logistics

October 2014

3

201,82197,01430,190.81

30,190.81

100.0

Not

Not

Not

disclosed

disclosed

disclosed

18,135.34

100.0(Note 9)(Note 9)(Note 9)37,818.26

91.6

12,185.78

100.0

5,994.75

100.0

LGC-02

Yokohama Logistics① November 1982
② May 2006

October 1994

1

Building 1:
LGC-03

Funabashi Logistics

September 1992

4

Building 2:

258,10383,426

34,633.37

Not

Not

Not

disclosed

disclosed

disclosed(Note 9)(Note 9)(Note 9)August 1997

LGC-04

LGC-05

Baraki Logistics

Tokorozawa Logistics

August 2015

2

April 1999

1

Not

Not

Not

disclosed

disclosed

disclosed(Note 9)(Note 9)(Note 9)HTL-01R&B Hotel Umeda East

October 2000

1

64,93573,6153,940.93

3,940.93

100.0

HTL-02

Smile Hotel Namba

February 2008

1

53,067-

1,711.42

1,711.42

100.0

－

31 －

HTL-03

HTL-04

BEST WESTERN Tokyo
Nishikasai
BEST WESTERN Yokohama

March 1991

1

84,60084,6005,293.88

5,293.88

100.0

September 1987

1

80,40080,4004,686.09

4,686.09

100.0

551

2,408,272

1,794,980

173,809.30

177,670.26

97.8

Total (23 properties)(Note 1) “Number of tenants” is the number of tenants (excluding parking) under the lease agreement stated in the leaseagreement for the investment asset as of January 31, 2018. If a single tenant is leasing multiple rental units in an
investment asset, the tenant is counted as 1 tenant for the concerned investment asset. If a single tenant is leasing
rental units across multiple investment assets, the tenant is counted as separate tenants and the sum total numberof tenants is stated in the total column. Furthermore, in cases where a pass-through type master lease agreement
under which rent from end-tenants is received as is in principle (“pass-through type master lease”) has beenconcluded for the concerned investment asset, the total number of end-tenants is stated. In cases where a master
lease agreement agreeing to the effect that the rent under the master lease agreement shall be a fixed rent (“rentguaranteed type master lease”) has been concluded for the concerned investment asset, the number of tenants is 1
and the sum total of these is stated.
(Note 2) “Operating revenue from leasing” is rental revenue, common area maintenance revenue, parking revenue and otherrevenue from real estate held generated during the fiscal period under review (including other lease businessrevenue).
(Note 3) “Security and guarantee deposits” is the sum total amount of tenant security and guarantee deposits required basedon the lease agreement (including deposits based on parking, antenna, rooftop and other agreements; the amountafter depreciation) for the investment asset as of January 31, 2018 (limited to those occupied as of said date).
Furthermore, in cases where a pass-through type master lease agreement has been concluded for the concerned
investment asset, it is the sum total amount of tenant security and guarantee deposits under lease agreements
concluded with end-tenants.
(Note 4) “Leased area” is the sum total of the leased area stated in the lease agreement for the investment asset as of January
31, 2018. Furthermore, in cases where a master lease agreement has been concluded for the concerned investment
asset, it is the sum total of the leased area under lease agreements concluded with end-tenants for properties undera pass-through type master lease, and it is the leased area under the master lease agreement for properties undera rent-guaranteed type master lease.
(Note 5) “Leasable area” is the floor area regarded as being available for leasing based on the lease agreement or building
drawing, etc. of the building for the investment asset as of January 31, 2018.
(Note 6) “Occupancy rate” is the ratio of leased area to leasable area for the investment asset as of January 31, 2018, rounded
to the first decimal place. In addition, in the total column, it is the ratio of the sum total of leased area to the sum
total of leasable area for the investment asset, rounded to the first decimal place.
(Note 7) Of the tenants of the property, a single company leases all 36 units of the residential portion, of which 30 units areunder a rent-guaranteed type master lease agreement and 6 units are under a pass-through type master leaseagreement.
(Note 8) In the table, “Number of tenants,” “Security and guarantee deposits,” “Leased area” and “Occupancy rate” are basedon lease agreements valid as of January 31, 2018, even if there is a notice of cancellation or termination of leaseagreements with end-tenants or unpaid rent.
(Note 9) Not disclosed, because consent for disclosure has not been obtained from the tenants.

－

32 －

④ Summary of Real Estate Appraisal Report, etc.
Summary of appraisal report

Income approachAppraisal
Appraisal
Property
Use

value
Property nameDCF

methodmethodfirmno.

Appraisal

Direct capitalization(million yen)

NOI yield
NOI(Note 1)
(Note 2)(%)

(million yen)
Indicated

Indicated

Discount

Terminal

value

rate

cap rate(million yen)

(%)

(%)

Cap rate
value(Note 4)(Note 3)(%)(million yen)

Office

OFC-01

Minami-Azabu Shibuya Building

Daiwa

3,150

3,250

4.0

3,100

3.6

4.2

145

4.9

OFC-03

Honmachibashi Tower

Daiwa

6,920

7,100

4.2

6,840

4.0

4.4

312

5.1

OFC-04

Nishi-Shinjuku Matsuya Building

Daiwa

2,430

2,410

4.1

2,440

3.9

4.3

112

6.3

OFC-05Alphabet Seven

JREI

2,330

2,330

4.1

2,290

3.9

4.3

101

5.8

2,860

3.9

2,760

3.7

4.1

115

5.6

OFC-06

Shibuya MK Building

JREI

2,810

OFC-07

Hakata-eki Higashi 113 Building

Daiwa

2,070

2,150

4.6

2,030

4.4

4.8

110

5.8

OFC-08Asahi Building

JREI

6,890

6,930

4.0

6,850

3.7

4.1

307

4.9

OFC-09Hakata-eki East Place

Daiwa

Subtotal

2,480

2,520

4.7

2,460

4.5

4.9

119

5.2

29,08029,550-28,770

-

-

1,321

5.3

RSC-01

Urban Park Azabujuban

JREI

2,170

2,170

4.0

2,130

3.8

4.2

91

4.4

RSC-02

Urban Park Daikanyama

JREI

7,310

7,430

3.9

7,180

3.7

4.1

302

4.8

RSC-04

Urban Park Shin-Yokohama

Daiwa

2,580

2,620

4.5

2,560

4.3

4.7

122

4.8

RSC-05

Urban Park Namba

Daiwa

1,610

1,630

4.8

1,600

4.6

5.0

80

5.4

RSC-06

Urban Park Gokokuji

JREI

1,510

1,530

4.4

1,480

4.2

4.6

75

5.1

RSC-07

Urban Park Kashiwa

Tanizawa

1,190

1,220

4.7

1,170

4.8

4.9

61

5.1

Subtotal

16,37016,600-16,120

-

-

730

4.9

LGC-01

Iwatsuki Logistics

Daiwa

7,130

7,240

4.5

7,080

4.3

4.7

332

4.8

LGC-02

Yokohama Logistics

Daiwa

4,050

4,110

4.3

4,020

4.1

4.5

204

5.7

Logistics

LGC-03

Funabashi Logistics

Daiwa

8,560

8,660

4.3

8,510

4.1

4.5

425

5.4

facility

LGC-04

Baraki Logistics

Tanizawa

4,890

5,000

4.2

4,840

4.1

4.4

212

4.5

LGC-05Tokorozawa Logistics

JREI

1,400

1,400

5.2

1,390

4.8

5.5

78

6.0

26,03026,410-25,840

-

-

1,252

5.1

Residence

Subtotal
HTL-01R&B Hotel Umeda East

Daiwa

2,290

2,310

4.6

2,280

4.4

4.8

115

5.6

HTL-02

Smile Hotel Namba

Daiwa

1,750

1,760

5.3

1,740

5.1

5.5

98

5.6

JREI

3,890

3,940

4.5

3,830

4.3

4.7

182

4.8

JREI

3,270

3,280

4.6

3,250

4.3

4.7

155

4.8

Subtotal

11,20011,290-

11,100

-

-

550

5.0

Total

82,68083,850-81,830

-

-

3,852

5.1

BEST WESTERN Tokyo
Hotel

HTL-03
HTL-04

Nishikasai
BEST WESTERN Yokohama(Note 1) “Appraisal firm” is shown as “Daiwa” to stand for Daiwa Real Estate Appraisal Co., Ltd., “JREI” to stand for Japan Real
Estate Institute and “Tanizawa” to stand for The Tanizawa Sogo Appraisal co., Ltd..
(Note 2) “Appraisal value” is as of January 31, 2018 as the date of value.
(Note 3) “NOI” is the net operating income by the direct capitalization method stated in the appraisal report, rounded to thenearest million yen.
(Note 4) “Appraisal NOI yield” is based on the NOI found in the indication of value by the direct capitalization method in thereal estate appraisal report and expressed as a percentage of acquisition price, rounded to the first decimal place.

－

33 －

⑤ Information on Major Real Estate Properties
Of investment assets, the following are those that fall under the category of major real estate properties (thosebuildings/facilities pertaining to land recognized to be used collectively of which total rental revenue accounts for 10% or moreof the sum total of total rental revenue of investment assets) and the top five properties in terms of total rental revenue as ofJanuary31, 2018.
Changes in occupancy rate (%) (Note 2)
July 31, 2016
Funabashi Logistics

January 31, 2017

July 31, 2017

January 31, 2018

91.6

91.6

91.6

91.6

Iwatsuki Logistics

100.0

100.0

100.0

100.0

Asahi Building

93.3

96.4

100.0

100.0

Honmachibashi
Tower

100.0

100.0

100.0

100.0

93.2

95.5

99.1

98.0

(Note 1)

Urban Park
Daikanyama(Note 1) The property falls under the category of major real estate properties as defined above.
(Note 2) “Changes in occupancy rate” is the ratio of leased area to leasable area for the investment asset as of the record
date, rounded to the first decimal place.
⑥ Top 10 End-Tenants in Terms of Leased Area
The following table lists the tenants ranking in the top ten tenants in terms of leased area of investment assets.

Name of tenant

Name of property occupied

Leased area(m2)

As a percentage of
total leasable area

(Note 1)(%)
(Note 2)

1

Not disclosed (Note 3)

Iwatsuki Logistics

Not disclosed (Note 3)

16.7

2

Not disclosed (Note 3)

Funabashi Logistics

Not disclosed (Note 3)

12.1

3

Not disclosed (Note 3)

Yokohama Logistics

Not disclosed (Note 3)

10.2

4

Rembrandt Inn

BEST WESTERN Tokyo Nishikasai
BEST WESTERN Yokohama

9,979.97

5.6

5

Not disclosed (Note 3)

Funabashi Logistics

Not disclosed (Note 3)

4.0

6

Not disclosed (Note 3)

Baraki Logistics

Not disclosed (Note 3)

3.5

7

Not disclosed (Note 3)

Baraki Logistics

Not disclosed (Note 3)

3.4

8

Ricoh Japan Corporation

Honmachibashi Tower

6,044.70

3.4

9

Not disclosed (Note 3)

Tokorozawa Logistics

Not disclosed (Note 3)

3.4

10

Kao Corporation

Funabashi Logistics

5,888.87

3.3

116,666.68

65.7

Total of the top 10 tenants(Note 1) “Leased area” is the sum total of the leased area stated in the lease agreement for the investment asset as of January
31, 2018.
(Note 2) “As a percentage of total leasable area” is the area leased to the tenant expressed as a percentage of the sum totalof leasable area of all investment assets, rounded to the first decimal place.
(Note 3) Not disclosed, because consent for disclosure has not been obtained from the end-tenants, etc.

－

34 －

⑦ Capital Expenditures
a. Schedule of Capital Expenditures for the 5th fiscal period
The following are the principal capital expenditures arising from renovation construction work, etc. currently planned
for the assets held by SAR as of January 31, 2018. Please note that the expected construction amounts include portions
that are expensed as a separate account item of accounting costs.

Name of real estate, etc.
(Location)b.

PurposeScheduled period

Asahi Building

Upgrading of mechanical

From: Jun. 2018

(Yokohama City, Kanagawa)parking spaceTo:

Asahi Building(Yokohama City, Kanagawa)

Upgrading of air-conditioning
system

Nishi-Shinjuku Matsuya Building(Shibuya Ward, Tokyo)

Estimated construction costs(thousand yen)Amount of Total
Total
payment amountamountduringalready
periodpaid
23,200－－

From: Jun. 2018
To:
Jul. 2018

23,000－－Upgrading of elevator

From: Feb. 2018
To:
Mar. 2018

21,000－－Asahi Building

Upgrading of air-conditioning

From: May. 2018

(Yokohama City, Kanagawa)ventilation system

To:18,650－－Jul. 2018

Jun. 2018

Capital Expenditures during the 4th fiscal period
The following summarizes the primary construction work that constitutes capital expenditures implemented for theassets held by SAR as of January 31, 2018 during the 4th fiscal period. Capital expenditures for the 4th fiscal periodamounted to 182,811 thousand yen and, when combined with the 59,548 thousand yen in repair expenses charged to
the 4th fiscal period expenses, totals 242,360 thousand yen in construction work implemented.
Name of real estate, etc.
(Location)

Purpose

PeriodYokohama Logistics(Yokohama City, Kanagawa)

Upgrading of air-conditioning
system

From:Jan.2018
To: Jan.2018

Shibuya MK Building

Renovation of restrooms on the

From:Sep.2017(Shibuya Ward, Tokyo)

1st to 6th floors

To: Jan.2018

Asahi Building

Upgrading of firefighting

From:Jan.2018(Yokohama City, Kanagawa)equipment

To: Jan.2018－

Others
Total－－

Construction costs(thousand yen)
22,782
19,553
11,162
129,313
182,81135 －⑧ Individual Property Income Statements(Unit: thousand yen)

Property no.
Property name

OFC-01

OFC-03

OFC-04

OFC-05

Minami-Azabu

Honmachibashi

Nishi-Shinjuku

Shibuya Building

Tower

Matsuya Building

OFC-06Alphabet Seven

Shibuya
MK Building① Total operating revenue
from real estate leasing

90,118215,20290,08977,246

74,205

Lease business revenue

83,548

188,980

81,43570,96868,946

Other lease business revenue

6,570

26,221

8,654

6,278

5,258

27,99363,726

34,601

22,303

20,811

5,735

13,440

6,656

4,902

4,829

② Total operating expenses
from real estate leasing
Management fee
Trust fee

500

480

500

500

430

Utilities expenses

6,806

24,891

8,132

4,917

3,648

Insurance premium

127

390

139

109

47

Repair expenses

922

2,427

1,086

5,202

4,931

Property taxes

4,574

19,683

3,222

5,768

4,192

Other

9,327

2,412

14,864

903

2,731

③ NOI
(①－②)

62,125

151,475

55,48854,94353,394④ Depreciation

10,74944,891

7,157

4,117

2,619

⑤ Operating income (loss)
from real estate leasing(③－④)

51,375

106,584

48,33150,82650,774⑥ Capital expenditures

12,955

3,168

14,79912,013

19,553

⑦ NCF
(③－⑥)

49,169148,306

40,68842,93033,8403,005,343

6,028,529

1,824,013

1,802,390

2,084,616

Book value at end of the period

Property no.
Property name

OFC-07

OFC-08

Hakata-eki Higashi
113 Building

OFC-09Asahi Building

RSC-01

RSC-02

Hakata-eki

Urban Park

Urban Park

East Place

Azabujuban

Daikanyama① Total operating revenue
from real estate leasing

74,613

210,183

95,27655,465

190,353

Lease business revenue

67,315

193,117

84,69751,645

182,557

Other lease business revenue

7,298

17,066

10,578

3,819

7,796

26,182

56,86622,865

11,86934,523

7,406

15,648

8,396

2,142

8,681

② Total operating expenses
from real estate leasing
Management fee
Trust fee
Utilities expenses

430

480

480

430

430

7,100

17,507

10,358544

4,774

Insurance premium

135

387

184

63

214

Repair expenses

3,736

4,251

2,568

2,998

5,271

Property taxes

5,073

16,021-

2,738

10,825

Other

2,299

2,569

878

2,951

4,326

③ NOI
(①－②)

48,431

153,317

72,41043,595

155,830④ Depreciation

5,728

22,435

6,411

4,199

12,137⑤ Operating income (loss)
from real estate leasing(③－④)

42,703130,881

65,99939,395

143,693⑥ Capital expenditures

6,600

30,544

3,981

15,595

2,308

⑦ NCF
(③－⑥)

41,831

122,772

68,42928,000

153,5216,354,540

2,310,981

2,098,889

6,420,070

Book value at end of the period

1,958,111－

36 －(Unit: thousand yen)

Property no.
Property name

RSC-04

RSC-05

RSC-06

RSC-07

LGC-01

Urban Park

Urban Park

Urban Park

Urban Park

Iwatsuki

Shin-Yokohama

Namba

Gokokuji

Kashiwa

Logistics① Total operating revenue
from real estate leasing

70,61651,04946,40735,706

201,821

Lease business revenue

69,201

48,21044,91034,482

187,718

Other lease business revenue

1,415

2,838

1,496

1,224

14,103

21,153

13,58813,863

7,697

34,501② Total operating expenses
from real estate leasing
Management fee

4,698

2,576

3,772

1,843

5,650

Trust fee

430

430

480

430

430

Utilities expenses

882

511

2,564

863

14,103

Insurance premium

164

69

58

93

296

Repair expenses

2,504

3,064

4,479

1,729

-

Property taxes

4,721

2,880

-

-

14,020

Other

7,753

4,057

2,508

2,737

-

③ NOI
(①－②)

49,463

37,46032,54328,009167,320④ Depreciation

16,442

7,508

4,098

6,525

46,434⑤ Operating income (loss)
from real estate leasing(③－④)

33,02029,951

28,445

21,483

120,885

-

625

971

11,341-49,46336,834

31,572

16,667

167,320

2,578,946

1,542,785

1,495,930

1,251,792

6,831,454⑥ Capital expenditures
⑦ NCF
(③－⑥)
Book value at end of the period

Property no.
Property name

LGC-02

LGC-03

LGC-04

LGC-05

HTL-01

Yokohama

Funabashi

BarakiTokorozawa

R&B Hotel

Logistics

Logistics

Logistics

Logistics

Umeda East

① Total operating revenue
from real estate leasing

258,103

64,935

Lease business revenue

238,099

64,935

Other lease business revenue

20,003-57,0507,305

12,058

742

480

430

② Total operating expenses
from real estate leasing
Management fee
Trust fee
Utilities expenses

17,21810

Insurance premium

429

123

Repair expenses

Not disclosed

Property taxes(Note)

Other

2,715
23,678Not disclosed

Not disclosed(Note)(Note)

498
5,383

469

118

③ NOI
(①－②)

201,052

57,629④ Depreciation

26,491

9,142⑤ Operating income (loss)
from real estate leasing(③－④)

174,561

48,487⑥ Capital expenditures

6,226

3,514

194,825

54,115⑦ NCF(③－⑥)
Book value at end of the period

3,732,599

7,908,587

4,722,372(Note) Not disclosed, because consent for disclosure has not been obtained from the tenants.
－ 37 －

1,349,103

2,135,152

(Unit: thousand yen)

Property no.
Property name

HTL-02

HTL-03

HTL-04

Smile HotelBEST WESTERNBEST WESTERN
Yokohama

Namba (Note)

Tokyo Nishikasai① Total operating revenue
from real estate leasing

53,06784,60080,400

Lease business revenue

53,06784,60080,400

-

-

-

4,097

2,593

8,633

Management fee

660

1,200

1,200

Trust fee

630

500

500

Other lease business revenue② Total operating expenses
from real estate leasing

Utilities expenses

-

-

-

Insurance premium

58

137

116

Repair expenses

339

731

6,789

Property taxes

2,302

0

0

106

24

27

③ NOI
(①－②)

48,96982,006

71,766④ Depreciation

11,9409,640

10,918⑤ Operating income (loss)
from real estate leasing(③－④)

37,02872,36560,847⑥ Capital expenditures

1,626

3,968

4,218

⑦ NCF
(③－⑥)

47,34278,03767,5481,724,157

3,862,737

3,266,014

OtherBook value at end of the period(Note) Operating revenue from real estate leasing of Smile Hotel Namba includes variable rents of 30,693 thousand yen.
(Unit: thousand yen)

Property name

OfficeResidence

Logistics facility

HotelPortfolio

total

total

total

total

total

① Total operating revenue
from real estate leasing

926,936

449,598

748,734

283,0022,408,272

Lease business revenue

839,009431,008

702,597

283,0022,255,617

Other lease business revenue

87,926

18,59046,137-

152,654

275,349

102,696

135,682

22,631

536,359

67,01623,713

26,6183,802

121,151② Total operating expenses
from real estate leasing
Management fee
Trust fee

3,800

2,630

2,250

2,060

10,740Utilities expenses

83,36010,141

44,218

10

137,730

Insurance premium

1,522

663

1,151

436

3,772

Repair expenses

25,12720,047

6,015

8,359

59,548Property taxes

58,535

21,16551,724

7,686

139,112

Other

35,987

24,3353,705

276

64,304

③ NOI
(①－②)

651,586

346,902

613,052

260,371

1,871,912④ Depreciation

104,11150,912

108,624

41,642305,290⑤ Operating income (loss)
from real estate leasing(③－④)

547,475

295,989

504,427

218,729

1,566,622⑥ Capital expenditures

103,618

30,84235,023

13,327

182,811

⑦ NCF
(③－⑥)

547,968

316,060

578,028

247,043

1,689,101

25,368,527

15,388,416

24,544,116

10,988,061

76,289,122

Book value at end of the period－

38 －