6th Fiscal Period
Semi-Annual Reportfrom September 1, 2021 to February 28, 2022

SANKEI REAL ESTATE Inc.

Message to Our Unitholders
We would like to express our sincere appreciation to all unitholders for your loyal patronage to SANKEI REALESTATE Inc. (“SANKEI REAL ESTATE”).
Let us express our deepest sympathies to those who have been stricken with COVID-19 infections, related
people and those affected by the spread of the infection, as well as our sincere hope for their earliest
possible recovery.
Having settled the 6th fiscal period ended February 2022, we are pleased to report on the performance
results of SANKEI REAL ESTATE. We would like to thank all of our unitholders for your continued support andcooperation.
SANKEI REAL ESTATE sets “office buildings,” located mainly in major metropolitan areas (Greater Tokyo,
Osaka City and Nagoya City), as its primary investment target. We also set “sub assets” as the secondary
investment target in which we allocate a certain percentage of investments, with an aim to build a strong
portfolio that features both stability of earnings and growth potential. Sub assets are what we collectively
call the asset types that possess characteristics different from “office buildings” and contribute to thestability of the portfolio revenue. Under the strong support of The Sankei Building Co., Ltd., our sponsor, weare poised to build a high-quality portfolio of properties.
In the 6th fiscal period ended February 2022, operating revenue and operating income increased compared with boththe forecast and the previous fiscal period. In the 6th fiscal period, we newly acquired 4 office buildings in September
with the funds procured through a public offering conducted in August. With this expanding our asset size to 96.6
billion yen, we have almost reached our short-term target (asset size of 100 billion yen).
Concerning distribution per unit for the 6th fiscal period, it exceeded the forecast made at the beginning of period by
21 yen per unit due to operating revenue associated with the acquisition of 4 new properties. We decided to distribute
2,979 yen (up 4.1% period-on-period), up 117 yen period-on-period. As for forecast distribution per unit, we expect
3,120 yen, up 4.7% from the 6th fiscal period, for the 7th fiscal period ending August 2022, and 2,239 yen for the 8th
fiscal period ending February 2023, after considering the change in tenants in the 7th fiscal period onwards.
Attention should be paid to the impact of the prolonged COVID-19 pandemic on social and economic
activities in and outside Japan, as well as the impact of the Russian aggression against Ukraine that occurredin February 2022 on the global economy. While working to discern the trends of the economy and thefinancial and capital markets going forward, we will securely implement the growth strategy envisioned by
SANKEI REAL ESTATE and do our best to maximize unitholder value.
We ask you, our unitholders, to extend to us your continued consideration and support of our operations
for many years.
Yuichi Ota
Executive Director, SANKEI REAL ESTATE Inc.
President and Representative Director, Sankei Building Asset Management Co., Ltd.

-2-

I.

Asset Management Report

1. Overview of Asset Management(1) Changes in operating results and other management data
2nd fiscal
3rd fiscal
4th fiscal
5th fiscal
6th fiscal
periodperiodperiodperiodperiodFebruary 2020 August 2020 February 2021 August 2021 February 2022

Fiscal period
Closing of accounts
Operating revenue[Operating revenue from real estateleasing]
Operating expenses[Operating expenses from real estateleasing]
Operating income

million yen

1,933

2,005

2,147

2,176

2,778

million yen[1,933][2,005][2,147][2,176][2,778]million yen

767

1,009

1,029

1,034

1,237

million yen

[577]

[778]

[790]

[793]

[972]

million yen

1,166

996

1,118

1,141

1,540

Ordinary income

million yen

1,069

904

1,017

1,014

1,392

Net income

million yen

1,068

903

1,016

1,014

1,391

Unitholders’ capital (Note 4)
Total number of investment units issued andoutstanding
Net assets

million yen

36,54036,54036,54036,54049,435[Period-on-period change]
Total assets[Period-on-period change]

units

356,800

356,800

356,800

356,800

467,099

million yen

37,60937,44437,55737,55550,827%[60.3][(0.4)][0.3][(0.0)][35.3]

million yen

76,18676,19579,482

79,848106,523%[56.4]

[0.0]

[4.3]

[0.5]

[33.4]

Total interest-bearing liabilities

million yen

33,95633,50037,80037,80050,600Net assets per unit (Note 3)

yen

105,408

104,945

105,262

105,255

108,814

Net income per unit (Note 2)

yen

3,007

2,532

2,849

2,841

2,983

million yen

1,068

903

1,016

1,021

1,391

Total distribution
Distribution per unit

yen

2,995

2,532

2,849

2,862

2,979

[Distribution of net income per unit][Distribution in excess of net income perunit]
Ratio of ordinary income to total assets (Note 3)

yen[2,995][2,532][2,849][2,842][2,979]

yen

[－]

[－]

[－]

[20]

[－]

Annualized
Return on equity (Note 3)

%

1.7

1.2

1.3

1.3

1.5

%

[3.4]

[2.4]

[2.6]

[2.5]

[3.0]

%

3.5

2.4

2.7

2.7

3.1

Annualized

%

[7.0]

[4.8]

[5.4]

[5.4]

[6.3]

Equity ratio (Note 3)

%

49.4

49.1

47.3

47.0

47.7

[1.2]

[(0.3)][(1.8)][(0.3)]

[0.7]

%

100.0

100.0

100.0

100.0

100.0

days

182

184

181

184

181

[Period-on-period change]
Payout ratio (Note 3)[Other reference information]
Days of operation
Number of investment properties at end of
periodDepreciation

properties

11

11

12

12

14

million yen

215

219

227

228

306

Capital expenditures

million yen

69

54

42

57

73

Leasing NOI (Net Operating Income) (Note 3)

million yen

1,571

1,446

1,585

1,610

2,112

FFO (Funds from Operation) (Note 3)

million yen

1,284

1,122

1,243

1,242

1,698

yen

3,600

3,147

3,485

3,482

3,635

%

44.6

44.0

47.6

47.3

47.5

FFO per unit (Note 3)
Ratio of interest-bearing liabilities to total assets
at end of period (LTV) (Note 3)(Note 1)
(Note 2)
(Note 3)

Consumption tax is not included in operating revenue, etc.
Net income per unit is calculated by dividing net income by daily weighted average number of investment units (2nd fiscal period: 355,420 units; 3rd fiscal
period: 356,800 units; 4th fiscal period: 356,800 units; 5th fiscal period: 356,800 units; 6th fiscal period: 466,286 units).
The indicators are calculated by using the following formulas.
Net assets per unit

Ordinary income / [(total assets at beginning of period + total assets at end of period) / 2] × 100

Return on equity

Net income / [(net assets at beginning of period + net assets at end of period) / 2] × 100

Equity ratio

Leasing NOI (Net Operating Income)Net assets at end of period / total assets at end of period × 100
Distribution per unit (excluding distribution in excess of earnings) / net income per unit × 100
The payout ratio for the 2nd fiscal period and 6th fiscal period is calculated by the following formula, as thenumber of investment units during the period changed due to issuance of new investment units in the period:
Total distribution (excluding distribution in excess of earnings) / net income × 100
Operating revenue from real estate leasing - operating expenses from real estate leasing + depreciation

FFO (Funds from Operation)

Net income + depreciation - gain or loss on sale of real estate

FFO per unit
Ratio of interest-bearing liabilities to total
assets at end of period (LTV)

FFO / total number of investment units issued and outstanding

Payout ratio(Note 4)(Note 5)

Net assets ÷ total number of investment units issued and outstanding

Ratio of ordinary income to total assets

Balance of interest-bearing liabilities at end of period / total assets at end of period × 100

The amount obtained by subtracting the deduction from unitholders' capital from unitholders’ capital.
Unless otherwise stated, the figures less than the specified unit are rounded down for monetary amounts and rounded off to the nearest specified unit forpercentage figures in this report.

-3-

(2) Asset management review for the fiscal period
1) Brief History of the Investment Corporation
SANKEI REAL ESTATE was incorporated under the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951, as amended; hereinafter, the“Investment Trusts Act”) with Sankei Building Asset Management Co., Ltd. (hereinafter, the “Asset Management Company”) as the organizer and investments
in capital of 100 million yen (1,000 units) on November 19, 2018, and completed the registration with the Kanto Local Finance Bureau pursuant to Article 187of the Investment Trusts Act on December 17, 2018 (Registration No. 140 with the Director-General of the Kanto Local Finance Bureau). Later, SANKEI REALESTATE was listed on the Real Estate Investment Trust Securities Market of Tokyo Stock Exchange, Inc. (hereinafter, the Tokyo Stock Exchange”) on March
12, 2019 (TSE code: 2972).
In the fiscal period under review, new investment units (105,047 units) were issued through a public offering with September 1, 2021, as the payment due
date, and new investment units (5,252 units) were issued through third-party allotment accompanying the capital increase through public offering with
September 29, 2021, as the payment due date. A cash distribution in excess of earning of 20 yen per unit (contribution refund that falls under distribution
through reduction in unitholders’ capital for tax purposes) as the cash distribution for the 5th fiscal period (ended August 2021) resolved at SANKEI REALESTATE’s board of directors’ meeting held on October 15, 2021, and payment of the distribution commenced on November 22, 2021. As a result, as of thelast day of the fiscal period under review (February 28, 2022), the total number of investment units issued and outstanding was 467,099 units, and unitholders’capital (net) was 49,435 million yen.

2) Management Environment
In the fiscal period under review (fiscal period ended February 2022), although the Japanese economy continued to show movements of picking up, someweakness was seen amid difficult conditions due to the impact of COVID-19, and pre-emergency measures against COVID-19 based on the Act on Special
Measures for Pandemic Influenza and New Infectious Diseases Preparedness and Responses (Act No. 31 of 2012, as amended) were implemented due to the
spread of infection caused by Omicron variant. This, among other factors, made it an environment in which economic developments continued to require
attention. Overseas, while the economy continued to pick up from the difficult situation caused by COVID-19, attention should be given to the impact ofRussian aggression against Ukraine in February 2022 on the global economy.
Under such economic circumstances, in terms of the office building market, which SANKEI REAL ESTATE sets as the primary investment target, movements
to cancel lease agreements continued due to factors such as the consolidation of locations and the reduction of fixed expenses (rent payments, etc.), and thevacancy rate remained the same or continued to rise while rents declined slightly or remained the same in Tokyo, Osaka and Fukuoka where SANKEI REALESTATE’s portfolio assets are located. As for the hotel market, in which SANKEI REAL ESTATE invests as sub-assets, the total number of guests and occupancy
rate generally remained at the same level as the previous year according to the Overnight Travel Statistics Survey by the Japan Tourism Agency, but the
number of foreign tourists continued to decrease significantly due to restrictions on entry into Japan taken as a preventative measure against the spread of
COVID-19, and further relaxation of border measures are expected in future.

3) Management Performance
SANKEI REAL ESTATE executed fund procurement of 12,287 million yen through public offering, and acquired four properties on September 2, 2021 (two of
which were additional acquisitions) for a total acquisition price (Note 1) of 25,100 million yen with the procured funds and borrowings. As a result, theportfolio of SANKEI REAL ESTATE as of the last day of the fiscal period under review consisted of 14 properties with an asset size (total acquisition price) of
96,625 million yen.
As a result, the occupancy rate (Note 2) of the 14 portfolio properties as of the last day of the fiscal period under review remained high at 99.1%, andoperating revenue from real estate leasing was 2,778 million yen, up 27.7% from the end of the previous fiscal period. The appraisal value as of the last dayof the fiscal period under review was 105,713 million yen.
SANKEI REAL ESTATE strived to enhance tenant satisfaction through reinforcement and enhancement of the relationship with existing tenants, aiming at
expansion of revenue and stable growth of earnings from assets under management as in the previous fiscal period. For existing tenants approaching contract
renewal, efforts were made to limit rent reductions as much as possible and prevent the occurrence of vacancies through careful efforts based on the conditionof the COVID-19 pandemic and trends of the rental market. In addition, active efforts were made in leasing activities, and leasing-up of vacancies at someassets under management was almost completed during the fiscal period under review. At the same time, repairs and capital expenditures were narrowed
down to those that contribute to maintenance and improvement of the competitiveness of the assets under management.
The number of requests for rent decrease, deferment of rent payment, etc. due to the spread of COVID-19 from some tenants occupying office buildingsthat are assets under management decreased in the fiscal period under review compared with when the first state of emergency was declared in April 2020,
and the impact on management performance for the fiscal period under review is minimal because the assets under management are mainly office buildings.
In addition, although the two hotel properties held by SANKEI REAL ESTATE (Hotel Intergate Tokyo Kyobashi, Hotel Intergate Hiroshima) saw impact associatedwith the spread of COVID-19, fixed rent based on the current contract has been secured as usual for leasing business revenue for the fiscal period underreview.

-4-

SANKEI REAL ESTATE, along with the Asset Management Company, intends to continue to conduct management with consideration for ESG ( Environment,
Social and Governance) for the realization of a sustainable society and the improvement of the medium- to long-term unitholder value based on the“Sustainability Policy” in the Asset Management Company’s management guidelines.
SANKEI REAL ESTATE acquired 3 Star and Green Star ratings in October 2021 in the GRESB Real Estate Assessment that is a global investment benchmark
established as a tool for use in selection of and dialogue with investment destinations by measuring ESG considerations in individual companies and funds inthe real estate sector. In addition, SANKEI REAL ESTATE acquired the Building-Housing Energy-efficiency Labelling System (BELS) certification for two hotel
properties in December 2021.
(Note 1) “Acquisition price” is the sale and purchase price of each trust beneficiary right stated in the sale and purchase agreement for each acquired asset,
rounded down to the nearest million yen. The sale and purchase prices do not include consumption tax, local consumption tax and the various
expenses required for the acquisition. The same shall apply hereinafter.
(Note 2) “Occupancy rate” is the ratio of total leased area to total leasable area, rounded to one decimal place. Moreover, for total leasable area and totalleased area, each total is calculated based on the area corresponding to SANKEI REAL ESTATE’s ownership interest in each portfolio property.

4) Overview of Fund Procurement(Equity Financing)In the fiscal period under review, 12,287 million yen was procured by issuing new investment units (105,047 units) through public offering with September
1, 2021 as the payment due date. In addition, 614 million yen was procured by issuing new investment units (5,252 units) though third-party allotment
accompanying the public offering with September 29, 2021 as the payment due date.
(Debt Financing)In the fiscal period under review, 13,400 million yen was borrowed from Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Development Bank ofJapan Inc., Mizuho Trust & Banking Co., Ltd., Sumitomo Mitsui Trust Bank, Limited, Shinsei Bank, Limited, Resona Bank, Limited., Aozora Bank, Ltd., The NishiNippon City Bank, Ltd., Kansai Mirai Bank, Limited and The Chiba Bank, Ltd. through a loan syndicate with Mizuho Bank, Ltd. and Sumitomo Mitsui Banking
Corporation as the arrangers on September 2, 2021 for the acquisition of properties
Of the above borrowings, 600 million yen was repaid early on November 2, 2021 with the proceeds from the above capital increase through third-party
allotment.
Moreover, 4,300 million yen was borrowed from Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Development Bank of Japan Inc., Mizuho Trust& Banking Co., Ltd., Sumitomo Mitsui Trust Bank, Limited, Shinsei Bank, Limited, Resona Bank, Limited and Aozora Bank, Ltd. through a loan syndicate with
Mizuho Bank, Ltd. and Sumitomo Mitsui Banking Corporation as the arrangers on October 1, 2021, to repay long-term borrowings of 4,300 million yen due
for repayment on the same day.
As a result, as of the last day of the fiscal period under review, the balance of borrowings outstanding was 50,600 million yen and the ratio of interestbearing liabilities to total assets (hereinafter, “LTV ratio”) was 47.5%.

5) Overview of Business Performance and Distribution
As a result of the management described above, business performance for the fiscal period under review was operating revenue of 2,778 million yen,operating income of 1,540 million yen, ordinary income of 1,392 million yen, and net income of 1,391 million yen.
Concerning distribution, in accordance with SANKEI REAL ESTATE’s cash distribution policy (Article 36 of the articles of incorporation), SANKEI REAL ESTATE
intends to have the maximum amount of distribution of earnings included in deductible expenses by application of special provisions for taxation on
investment corporations (Article 67-15 of the Act on Special Measures Concerning Taxation (Act No. 26 of 1957, as amended)). For the fiscal period underreview, the decision was made to distribute 1,391,487,921 yen, which is the entire amount of unappropriated retained earnings, excluding fractions of
distribution per unit of less than 1 yen. This resulted in distribution per unit of 2,979 yen.

-5-(3) Capital increases
Changes in the total number of investment units issued and outstanding and unitholders’ capital from the incorporation of SANKEI REAL ESTATE to the last
day of the fiscal period under review (February 28, 2022) are as follows:

Date
Nov. 19, 2018
Mar. 11, 2019
Apr. 10, 2019
Sep. 2, 2019
Sep. 26, 2019
Sept. 1, 2021
Sept. 29, 2021
Nov. 22, 2021
(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)(Note 9)Description
Incorporation 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
Cash distribution in excessof earnings(contribution refund)Total number of investment units
issued and outstanding (units)
Increase
Balance(Decrease)

Unitholders’ capital (net)(million yen) (Note 1)
Increase
Balance(Decrease)

Remarks

1,000

1,000

100

100

(Note 2)

227,238

228,238

21,92822,028(Note 3)

11,362

239,600

1,096

23,124(Note 4)

111,619

351,219

12,77735,902(Note 5)

5,581

356,800

638

36,540(Note 6)

105,047

461,847

12,287

48,828(Note 7)

5,252

467,099614

49,442(Note 8)-467,099(7)49,435(Note 9)The amount obtained by subtracting the deduction from unitholders' capital from unitholders’ capital.
Investment units were issued at a paid-in amount of 100,000 yen per unit upon the incorporation of SANKEI REAL ESTATE.
New investment units were issued through public offering at an issue price of 100,000 yen (paid-in amount of 96,500 yen) per unit for the purpose of procuring funds for acquisitionof new properties.
New investment units were issued through third-party allotment accompanying the capital increase through public offering at a paid-in amount of 96,500 yen per unit.
New investment units were issued through public offering at an issue price of 118,734 yen (paid-in amount of 114,471 yen) per unit for the purpose of procuring funds for acquisitionof new properties.
New investment units were issued through third-party allotment accompanying the capital increase through public offering at a paid-in amount of 114,471 yen per unit.
New investment units were issued through public offering at an issue price of 121,327 yen (paid-in amount of 116,971 yen) per unit for the purpose of procuring funds for acquisitionof new properties.
New investment units were issued through third-party allotment accompanying the capital increase through public offering at a paid-in amount of 116,971 yen per unit.
A cash distribution in excess of earnings of 20 yen per unit (contribution refund that falls under distribution through the reduction in unitholders’ capital for tax purposes) as the
cash distribution for the 5th fiscal period (ended August 2021) resolved at SANKEI REAL ESTATE’s board of directors’ meeting held on October 15, 2021, and payment of the
distribution commenced on November 22, 2021.

[Changes in market price of investment certificates]
The highest and lowest (closing price) market prices on the Real Estate Investment Trust Securities Market of the Tokyo Stock Exchange, on which SANKEIREAL ESTATE’s investment certificates are listed, in each fiscal period are as follows:
Fiscal period

2nd fiscal period

3rd fiscal period

4th fiscal period

5th fiscal period

6th fiscal period

Closing of accounts

February 2020

August 2020

February 2021

August 2021

February 2022

Highest (yen)139,300

127,600

117,400

135,200

131,300

Lowest (yen)116,500

66,90090,100108,300

107,400(Note) SANKEI REAL ESTATE’s investment certificates were listed on the Real Estate Investment Trust Securities Market of the Tokyo
Stock Exchange on March 12, 2019.

-6-

(4) Performance of distribution, etc.
Concerning distribution for the fiscal period under review, SANKEI REAL ESTATE decided to distribute the entire amount of unappropriated retained earnings,
excluding fractions of distribution per unit of less than 1 yen, with the intent of having the maximum amount of distribution of earnings included in deductible
expenses by application of special provisions for taxation on investment corporations (Article 67-15 of the Act on Special Measures Concerning Taxation). As
a result, the distribution per unit was 2,979 yen.
Fiscal period

2nd fiscal periodBusiness period

From Sep. 1, 2019 From Mar. 1, 2020 From Sep. 1, 2020 From Mar. 1, 2021 From Sep. 1, 2021
to Feb. 29, 2020 to Aug. 31, 2020 to Feb. 28, 2021 to Aug. 31, 2021 to Feb. 28, 2022

Total unappropriated retained earnings(thousand yen)

1,068,783

3rd fiscal period

4th fiscal period

903,625

1,016,734

5th fiscal period

1,014,232

6th fiscal period

1,391,567

Retained earnings(thousand yen)

167

207

210

207

80

Total cash distributions(thousand yen)

1,068,616

903,417

1,016,523

1,021,161

1,391,487[Distribution per unit](yen)[2,995][2,532][2,849][2,862][2,979][Total distribution of earnings](thousand yen)

1,068,616

903,417

1,016,523

1,014,025

1,391,487(yen)[2,995][2,532][2,849][2,842][2,979][Total contribution refund](thousand yen)

－

－

－

7,136

－

[Contribution refund per unit]

(yen)

[－]

[－]

[－]

[20]

[－]

(thousand yen)

－

－

－

－

－

(yen)

[－]

[－]

[－]

[－]

[－]

(thousand yen)

－

－

－

7,136

－

(yen)

[－]

[－]

[－]

[20]

[－]

[Distribution of net income per unit]

Of the total contribution refund,
distribution of the reserve fortemporary difference adjustments[Of the contribution refund per unit,
distribution per unit of the reserve fortemporary difference adjustments]
Of the total contribution refund,
distribution through the reduction inunitholders’ capital for tax purposes[Of the contribution refund per unit,
distribution per unit through the
reduction in unitholders’ capital for tax
purposes](Note)

Amounts are rounded down to the nearest unit.

(5) Future asset management policy and issues to be addressed
General Management Outlook
Although the impact of COVID-19 on social and economic activities in Japan and abroad is expected to be alleviated due to factors such as progress invaccinations and approval of new drugs, the environment will likely continue to be one in which downside risks to the Japanese and overseas economies
being affected by Russian aggression against Ukraine, the impact on fluctuations in the financial and capital markets, etc. require close attention.
In the office building market, vacancy rates have risen and rents have continued to decrease or remain the same. While social and economic activities are
expected to recover with the further progress of vaccination, it is necessary to monitor future trends in office demand with potential risks such as changes inwork styles and moves to reduce fixed expenses (rent payments, etc.) due to economic downturn. SANKEI REAL ESTATE has concerns that the consolidationof locations and reduction of office space will progress due to the impact of increased telecommuting such as working from home and intentions to reduce
fixed expenses (rent payments, etc.), and expectation for a large volume of new supply especially in central Tokyo in 2023, it is believed that the occurrenceof vacancies and a drop in rents due to the relocation of tenants will progress. We will further reinforce the relationship with tenants and continue
consultations and responses as required, while closely monitoring tenants’ business performance, etc.
In terms of the hotel market, while recovery in the number of international visitors to Japan looking unlikely, domestic travelers and business travelers are
expected to increase with the recovery in social and economic activities, but the severe situation is still expected to continue. A severe operating environment
is foreseen for also the two hotel properties held by SANKEI REAL ESTATE, but no impact on SANKEI REAL ESTATE is expected as GRANVISTA Hotels & Resorts
Co., Ltd., which is a tenant of the two properties and a wholly owned subsidiary of SANKEI REAL ESTATE’s sponsor, The Sankei Building Co., Ltd. (hereinafter,“Sankei Building” or “Sponsor”), continues to pay fixed rent based on the fixed-term building lease agreement.

1) External Growth Strategy
While carefully assessing the economic impact of the spread of COVID-19, the real estate investment market conditions, and other factors, SANKEI REALESTATE will continue to maintain external growth through acquisition of Sankei Building’s portfolio properties as well as properties held by third parties byleveraging the sourcing capabilities of Sankei Building through full utilization of sponsorship support.
In external growth, we will conduct diversified investment conscious of the balance of the portfolio matrix such as area and yield, and strive to improve theprofitability and stability of the portfolio.

-7-2) Internal Growth Strategy
SANKEI REAL ESTATE aims for steady internal growth through reinforcement of the relationship with existing tenants and improvement in tenant satisfaction.
Specifically, we will raise rents upon contract renewal based on the deviation from market rent and continue to implement strategic leasing such as activities
to extend the cancellation notification period from tenants and disperse end dates of rental contracts from the viewpoint of termination risk for properties
where the end dates of multiple tenants are the same. Furthermore, we will continue to take proactive measures to improve tenant satisfaction such asactivities to improve the quality of hygiene and planned implementation of maintenance and repairs under the COVID-19 pandemic.
SANKEI REAL ESTATE will utilize the Sankei Building Group’s comprehensive operation and management functions ranging from real estate planning anddevelopment to lease-up, operation, and management through collaboration within the Sankei Building Group with Sankei Building at the core.
In addition, SANKEI REAL ESTATE will execute the following measures, etc. to aim for greater revenue and stable growth of earnings from assets undermanagement.
(a) Strive to provide services for tenants’ comfortable use while strengthening and enhancing tenant relationships in order to maintain and improve tenantsatisfaction so as to maintain and improve the occupancy rate and rent of assets under management.
(b) Seek to maintain and improve the market competitiveness of assets under management through planning and implementation of repairs and capital
expenditures by taking into consideration the state and characteristics of assets under management, real estate market conditions, tenant needs, andother factors and carefully examining them.
(c) Strive to maintain and improve earnings by conducting agile leasing activities with a continual grasp of leasing market trends.
(d) Adopt ongoing initiatives to reduce operating and management costs and consider the environment by periodically verifying the validity of operations,management level, and costs of assets under management. In doing so, the balance with the market competitiveness of assets under management
and perspective of maintaining and improving tenant satisfaction are taken into consideration.
(e) Conduct investment conscious of ESG, such as reduction of the environmental impact of assets under management and cooperation with external
stakeholders.

3) Financial Strategy
SANKEI REAL ESTATE will conduct appropriate and sound financial management while considering agility of financing activities, stability of cash flows, andother matters in order to secure stable earnings and steady growth of assets under management over the medium to long term.
In addition, to secure financial soundness, the basic policy shall be to set the upper limit for the LTV ratio at 60% in principle (however, the LTV ratio may
temporarily exceed the upper limit for the purpose of new asset acquisition, etc.). As a rule, SANKEI REAL ESTATE will maintain an approximate range of 40%
to 50% during normal operations.
(a) Equity Financing
Issuance of new investment units shall be in an agile manner with due consideration to investment unit dilution, while also comprehensively taking
into account capital market trends, financial environment, timing of acquisition of real estate, etc. to be newly acquired, ratio of interest-bearing
liabilities to total assets and other factors.
(b) Debt Financing
Upon borrowing, etc., fund procurement shall be executed in an appropriate manner by taking into account the balance between interest rate trends,
market levels, financial agility, long-term business relationships, and security, and by considering the borrowing period, fixed or floating interest rate,
provision of collateral or not, fees, and other terms and conditions of procurement of interest-bearing liabilities.

(6) Significant Subsequent Events
Not applicable.

-8-2. Overview of the Investment Corporation(1) Summary of unitholders’ capital

Total number ofinvestment units(units)authorized
Total number ofinvestment units(units)issued and outstanding
Unitholders’ capital(million yen)(net) (Note)
Number of unitholders

2nd fiscal period(as of Feb. 29,
2020)

3rd fiscal period(as of Aug. 31,
2020)

4th fiscal period(as of Feb. 28,
2021)

5th fiscal period(as of Aug. 31,
2021)

6th fiscal period(as of Feb. 28,
2022)

10,000,000

10,000,000

10,000,000

10,000,000

10,000,000

356,800

356,800

356,800

356,800

467,099

36,54036,54036,54036,54049,435

7,848

7,725

7,682

7,328

10,511(persons)(Note) The amount obtained by subtracting the deduction from unitholders' capital from unitholders’ capital.

(2) Matters related to investment units
The following table shows the major unitholders (Note 1) of SANKEI REAL ESTATE as of February 28, 2022.
Number of investment units
held(units)Name

Ratio to the total number ofinvestment units
issued and outstanding(%) (Note 2)

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

87,924

18.82

Custody Bank of Japan, Ltd. (Trust Account)

72,236

15.46

Custody Bank of Japan, Ltd. (Securities Investment Trust Account)

27,739

5.93

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

25,723

5.50

The Sankei Building Co., Ltd.

17,4793.74

BNP PARIBAS SECURITIES SERVICESLUXEMBOURG/JASDEC/SECURITIES-AIFM

13,039

2.79

Aozora Bank, Ltd.

11,2562.40

SCBHK AC LIECHTENSTEINISCHE LANDESBANK AG

6,528

1.39

The Bank of Yokohama, Ltd.

6,107

1.30

Japan Securities Finance Co., Ltd.

5,345

1.14

273,376

58.52

Total
(Note 1)
(Note 2)

“Major unitholders” refers to the ten largest entities among the unitholders according to the ratio of their investment units held to the total number of investment
units issued and outstanding.
Ratio to the total number of investment units issued and outstanding is rounded down to two decimal places.

(3) Matters related to directors
The following table shows the directors, etc. of SANKEI REAL ESTATE as of February 28, 2022.

Position
Executive
Director
Supervisory
Director
Financial
Auditor(Note 1)

(Note 2)
(Note 3)(Note 4)Name

Major concurrent assignments

Yuichi Ota

President and Representative Director, Sankei Building AssetManagement Co., Ltd.

Susumu Motoyoshi

Representative, Motoyoshi Total Accounting Office

Kohmei Shimizu
Ernst & Young
ShinNihon LLC

Partner, Utsunomiya Shimizu & Haruki
Adjunct Professor, Hosei University Law School－

Total remuneration foreach position during theperiod under review(thousand yen)
－
1,800
1,800
17,000None of the Executive Director or Supervisory Directors own investment units in SANKEI REAL ESTATE, either in their own name or in someone else’s name.
Moreover, although they may be officers of corporations other than those mentioned above, they have no conflict of interest with SANKEI REAL ESTATE at
those and the above positions.
The remuneration for the Executive Director and Supervisory Directors are the amounts paid to them in the fiscal period under review, and the remuneration
to the Financial Auditor is the amount payable to it for audits pertaining to the fiscal period under review.
The dismissal of the Financial Auditor shall be considered in accordance with the provisions of the Investment Trusts Act. The decision to not reappoint the
Financial Auditor shall be studied at SANKEI REAL ESTATE’s Board of Directors by comprehensively considering the audit quality, audit fee and other various
conditions.
The remuneration for accounting auditors includes those for the audit of financial statements in English and the preparation work of comfort letters.

-9-(4) Matters related to directors and officers liability insurance contract
The directors and officers liability insurance contract concluded by SANKEI REAL ESTATE is as follows:
Scope of insured parties

Summary of the content of the contract(Outline of insured events)
Insurance coverage is provided for damages incurred by the insured parties should claims be madeagainst the insured parties for compensation for damages arising from acts in their capacity as
directors of SANKEI REAL ESTATE.
(Share of burden of insurance expenses)
The insurance contract contains a rider covering executive directors and supervisory directors, theinsurance expenses for which are borne by the executive directors and supervisory directors. The
insurance expenses other than these are borne by SANKEI REAL ESTATE.
(Measures to ensure not to impair the propriety of the execution of duties)
Insurance coverage is not provided for cases such as damages incurred by the insured parties from
criminal acts, intentional illegal acts, etc.

Executive directors andsupervisory directors(5) Asset management company, asset custodian and administrative agentsThe following are the asset management company, asset custodian and administrative agents of SANKEI REAL ESTATE as of February 28, 2022.
Entrustment category

Name

Asset management company

Sankei Building Asset Management Co., Ltd.

Asset custodian

Sumitomo Mitsui Trust Bank, Limited

Administrative agent (unitholder register administrator)

Mizuho Trust & Banking Co., Ltd.

Administrative agent (operation of administrative instruments)

Mizuho Trust & Banking Co., Ltd.

Administrative agent (accounting, bookkeeping)Reiwa Accounting Holdings Co., Ltd.

Administrative agent (taxes)

Reiwakaikeisha Tax Corporation- 10 -

3. Status of Asset under Management of the Investment Corporation(1) SANKEI REAL ESTATE’s asset structure

Type ofasset

Geographic area
(Note 1)

Asset type

As apercentage of
total assets(%) (Note 3)
2.5

－

－

－

－

－

－

－

－

－

－

－

－

56,60970.971,86867.5－－

10,208

9.6

8,978

11.2

8,951

8.4

3,949

4.9

3,923

3.7

8,978

11.2

8,951

8.4

3,949

4.9

3,923

3.7

Subtotal

72,14990.4

97,57091.6

Deposits and other assets

7,698

9.6

8,953

8.4

Total assets

79,848100.0

106,523

100.0

Office buildings

Sub assets

Hotels(Note 3)

Total amount held(million yen)
(Note 2)
2,618

Sub assets(Note 2)

Greater Tokyo, Osaka City andNagoya City
Cities designated by government
ordinance (excluding above),core cities and major regional
citiesGreater Tokyo, Osaka City andNagoya City
Cities designated by government
ordinance (excluding above),core cities and major regional
citiesGreater Tokyo, Osaka City andNagoya City
Cities designated by government
ordinance (excluding above),core cities and major regional
citiesGreater Tokyo, Osaka City andNagoya City
Cities designated by government
ordinance (excluding above),core cities and major regional
citiesGreater Tokyo, Osaka City andNagoya City
Cities designated by government
ordinance (excluding above),core cities and major regional
citiesAs apercentage of
total assets(%) (Note 3)
3.3

Real estate(Note 1)

Total amount held(million yen)
(Note 2)

6th fiscal period(as of Feb. 28, 2022)

2,612

Office buildings

Real estatein trust

5th fiscal period(as of Aug. 31, 2021)“Greater Tokyo” refers to Tokyo, Kanagawa Prefecture, Saitama Prefecture and Chiba Prefecture.
“Core cities” refers to cities with population of 200,000 or more (excluding Greater Tokyo, Osaka City and Nagoya City, and other cities designated by government ordinance).
“Major regional cities” refers to cities that are municipalities with population of less than 200,000 and the Asset Management Company has deemed certain demand can be found forspecific asset types.
“Total amount held” is based on the carrying amount (in the case of real estate and real estate in trust, the depreciated book value), rounded down to the nearest million yen.
Furthermore, the total amount held for real estate in trust with hotel as the asset type includes the book value of movables incidental to hotels.
“As a percentage of total assets” is rounded to one decimal place.

- 11 -

(2) Major assets held
The following is an overview of the major assets (top ten properties on a book value basis) held by SANKEI REAL ESTATE as of February 28, 2022.
Book value(million yen)
(Note 1)

Total
leasable area(m2)
(Note 2)

Total
leased area(m2)
(Note 2)

Occupancy
rate(%)(Note 2)

Ratio to total
rent businessrevenue (%)(Note 3)Main use

Shinagawa Seaside TS Tower (Note 4, 5)

21,179Not disclosed(Note 6)

Not disclosed(Note 6)100.0

Not disclosed(Note 6)

Office buildings

BREEZÉ TOWER (Note 4)

13,013

12,146.02

12,122.05

99.8

19.8

Office buildings
Office buildings

Property name

Hitachi Kyusyu Building

10,20826,513.33

26,513.33

100.0

Not disclosed(Note 6)

Hotel Intergate Tokyo Kyobashi

8,951

6,006.53

6,006.53

100.0

7.4

HotelsS-GATE NIHONBASHI-HONCHO (Note 4)

6,689

3,171.83

3,171.83

100.0

5.8

Office buildings

Hibiya Sankei Building

6,070

3,439.61

3,439.61

100.0

7.2

Office buildings
Office buildings

S-GATE AKASAKA (Note 4)

5,652

2,646.48

2,646.48

100.0

Not disclosed(Note 6)

Omori Park Building

5,458

7,469.72

7,469.72

100.0

5.7

Office buildings

Hatchobori Sankei Building

5,019

5,594.90

5,594.90

100.0

6.3

Office buildings

Hotel Intergate Hiroshima

3,923

9,160.15

9,160.15

100.0

4.3

Hotels

86,166

Not disclosed(Note 6)

Not disclosed(Note 6)

100.0

90.4

－

Total
(Note 1)
(Note 2)

(Note 3)(Note 4)(Note 5)(Note 6)

“Book value” is the depreciated book value for each portfolio asset as of February 28, 2022, rounded down to the nearest million yen. The same shall apply hereinafter.
Figures for “total leasable area,” “total leased area” and “occupancy rate” are based on the data as of February 28, 2022. Furthermore, “total leasable area” is the area (excluding area of
warehouse, signboard, parking lot, etc.) expected to be leasable based on the lease agreement, drawing, etc. of the buildings for each portfolio asset, rounded down to two decimal places.
“Total leased area” is the total leased area (excluding area of warehouse, signboard, parking lot, etc.) stated in the lease agreement (excluding leased agreements under which the lease
period is yet to commence) for each portfolio asset, rounded down to two decimal places. With respect to the portion which comes under the pass-through-type master lease agreement,
the total area for which the lease agreement has actually been concluded with the end tenant and for which the lease period has commenced is indicated, rounded down to two decimal
places. “Occupancy rate” is the ratio of total leased area to total leasable area for each portfolio asset, rounded to one decimal place. In addition, “occupancy rate” in the total column is theratio of the sum total of total leased area to the sum total of total leasable area for each portfolio asset, rounded to one decimal place. The same shall apply for occupancy rate hereinafter.
“Ratio to total rent business revenue” is rounded to one decimal place. The same shall apply hereinafter.
The book value, total leasable area and total leased area are the figures equivalent to the co-ownership interest (51% for “S-GATE NIHONBASHI-HONCHO”) and the quasi co-ownershipinterest (45% for “BREEZÉ TOWER,” 50% for “Shinagawa Seaside TS Tower” and 80% for “S-GATE AKASAKA”) held by SANKEI REAL ESTATE.
An agreement has been reached with Sony Group Corporation for the termination of the contract for Shinagawa Seaside TS Tower with termination dates of March 31, 2022 (7 floors) andMarch 31, 2023 (14 floors). Of these terminations, for the termination of a portion equivalent to 7 floors with a termination date of March 31, 2022, a termination penalty was received on
the same date.
Not disclosed, due to unavoidable circumstances in that such contains information for which consent for disclosure has not been obtained from the tenant, relevant party, etc. or informationfrom which confidential information can be derived.

- 12 -

(3) Real estate assets in the portfolio
The following table shows the overview of the assets held by SANKEI REAL ESTATE as of February 28, 2022.
Property nameForm ofownership(Note 1)

Location

Tokyo Sankei Building (Note 3)

1-7-2 Otemachi, Chiyoda-ku, TokyoBREEZÉ TOWER (Note 3)

2-4-9 Umeda, Kita-ku, Osaka-shi, Osaka

S-GATE NIHONBASHI-HONCHO(Note 3)

1-9-1 Nihonbashi-Honcho, Chuo-ku, Tokyo

S-GATE AKIHABARA

2-4-6 Higashi-Kanda, Chiyoda-ku, Tokyo

Hibiya Sankei Building

1-9-1 Yurakucho, Chiyoda-ku, Tokyo

Hatchobori Sankei Building

2-7-1 Hatchobori, Chuo-ku, Tokyo

Toyo Park Building

5-29-17 Toyo, Koto-ku, Tokyo

Shinagawa Seaside TS Tower(Note 3)4-12-3 Higashi-Shinagawa, Shinagawa-ku, Tokyo

Omori Park Building

1-6-1 Omori-Honcho, Ota-ku, Tokyo

S-GATE AKASAKA (Note 3)

6-2-4 Akasaka, Minato-ku, Tokyo

Miyazakidai Garden Office2-6-10 Miyazaki, Miyamae-ku, Kawasaki-shi, Kanagawa

Hitachi Kyusyu Building

2-1-1 Momochihama, Sawara-ku, Fukuoka-shi, Fukuoka

Hotel Intergate Tokyo Kyobashi

3-7-8 Kyobashi, Chuo-ku, Tokyo

Hotel Intergate Hiroshima

5-16 Teppocho, Naka-ku, Hiroshima-shi, Hiroshima
Total(Note 1)
(Note 2)

(Note 3)

Real estate
Real estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary right

Period-end
appraisal value(million yen)
(Note 2)
2,690Book value(million yen)
2,618

17,77513,013

7,490

6,689

2,630

2,044

6,570

6,070

5,510

5,019

3,820

3,887

21,85021,179

5,490

5,458

5,688

5,652

2,790

2,853

10,300

10,208

9,020

8,951

4,090

3,923

105,71397,570“Real estate trust beneficiary right” refers to trust beneficiary right that has real estate as main trust assets.
“Period-end appraisal value” indicates the appraisal value or the price in the price survey that is conducted using the method similar to that used by real estate appraisers, with the last dayof the fiscal period as the survey date, based on SANKEI REAL ESTATE’s articles of incorporation and the “Regulations on Calculations of Investment Corporations” (Cabinet Office Order No.
47 of 2006, as amended).
The period-end appraisal value and book value are the figures equivalent to the co-ownership interest (2% for “Tokyo Sankei Building” and 51% for “S-GATE NIHONBASHI-HONCHO”) and thequasi co-ownership interest (45% for “BREEZÉ TOWER,” 50% for “Shinagawa Seaside TS Tower” and 80% for “S-GATE AKASAKA”) held by SANKEI REAL ESTATE.

The following table shows the overview of the rent business for each of the assets under management held by SANKEI REAL ESTATE.

Property nameTokyo Sankei Building
BREEZÉ TOWER
S-GATE NIHONBASHI-HONCHO
S-GATE AKIHABARA
Hibiya Sankei Building
Hatchobori Sankei Building
Toyo Park Building
Shinagawa Seaside TS Tower(Note 3)
Omori Park Building
S-GATE AKASAKA
Miyazakidai Garden OfficeHitachi Kyusyu Building
Hotel Intergate Tokyo Kyobashi
Hotel Intergate Hiroshima
Total(Note 1)

(Note 2)
(Note 3)(Note 4)5th fiscal period
4th fiscal period
From Mar. 1, 2021
From Sep. 1, 2021
to Aug. 31, 2021
to Feb. 28, 2022
OperatingOperatingrevenue fromrevenue fromNumber ofOccupancy
Ratio to total Number ofOccupancy
Ratio to total
real estate
real estatetenants
rate
rent businesstenants
rate
rent businessleasingleasing(at period end) (at period end)
revenue(at period end) (at period end)
revenue(during period)(during period)(Note 1)(%)(%)
(Note 1)(%)(%)(million yen)(million yen)
(Note 2)
(Note 2)
46
93.7
51
2.4
48
97.7
54
2.0
38
99.8
545
25.1
38
99.8
551
19.8
3
100.0
159
7.4
3
100.0
160
5.8
6
100.0
68
3.1
6
100.0
68
2.5
11
100.0
204
9.4
11
100.0
199
7.2
10
100.0
179
8.2
10
100.0
173
6.3
4
82.8
109
5.1
7
92.3
65
2.4
Not disclosed
Not disclosed Not disclosed Not disclosed
Not disclosed Not disclosed
100.0
100.0
(Note 4)(Note 4)(Note 4)(Note 4)(Note 4)(Note 4)
9
95.5
159
7.3
10
100.0
159
5.7
Not disclosed Not disclosed
Not disclosed Not disclosed
2
100.0
2
100.0
(Note 4)(Note 4)(Note 4)(Note 4)
7
85.7
76
2.7
－
－
－
－
Not disclosed Not disclosed
1
100.0
－
－
－
－
(Note 4)(Note 4)
1
100.0
206
9.5
1
100.0
206
7.4
1
100.0
118
5.5
1
100.0
118
4.3
Not disclosed
Not disclosed
98.2
2,176
100.0
99.1
2,778
100.0
(Note 4)(Note 4)

“Number of tenants” indicates the total number of tenants of the respective portfolio assets held as of February 28, 2022, based on the lease agreement of the relevant assets. When a passthrough-type master lease agreement has been concluded for the assets, however, the total number of end tenants is indicated for the portion covered by the pass-through-type master leaseagreement among such assets. In cases in which one tenant has concluded lease agreements of different use types for the same single asset, the tenant shall be counted as one for each use type.
Figures for “operating revenue from real estate leasing” are rounded down to the nearest million yen.
An agreement has been reached with Sony Group Corporation for the termination of the contract for Shinagawa Seaside TS Tower with termination dates of March 31, 2022 (7 floors) andMarch 31, 2023 (14 floors). Of these terminations, for the termination of a portion equivalent to 7 floors with a termination date of March 31, 2022, a termination penalty was received on thesame date.
Not disclosed due to unavoidable circumstances in that such contains information for which consent for disclosure has not been obtained from the tenant, relevant party, etc. or informationfrom which confidential information can be derived.

- 13 -

(4) Schedule of renewable energy generation facilities in the portfolio
Not applicable.

(5) Schedule of the rights to operate public facilities, etc. in the portfolio
Not applicable.

(6) Status of other assets
Real estate and trust beneficiary rights that have real estate as trust assets, etc. held by SANKEI REAL ESTATE are listed altogether on the aforementioned (3)Real estate assets in the portfolio.

1) Schedule of Securities Incorporated in the Portfolio
Not applicable.

2) Status of Contract Amounts, Etc. and Fair Value of Specified Transactions
Not applicable.

(7) Status of assets held in each country/region
Not applicable for any country or region outside Japan.

- 14 -

4. Capital Expenditures for Real Estate Held(1) Schedule of capital expenditures
Of capital expenditures associated with renovation work, etc. currently planned for assets held by SANKEI REAL ESTATE as of February 28, 2022, the following
are the major estimated amounts (10 million yen or more). The estimated construction costs below may include the portion separately charged to expenses
in accounting.

Name of real estate, etc.
(Location)

Expected construction cost (million yen)
PurposeScheduled period

Total amountAmount of
Total amountpayment
already paid
during period

Hitachi Kyusyu Building(Sawara-ku, Fukuoka-shi)Toilet renovation work

From: Jun. 1, 2022
To: Aug. 31, 2022

15

－

－

BREEZÉ TOWER(Kita-ku, Osaka-shi)

Update of high-rise billing WHM

From: Mar. 1, 2022
To: Mar. 31, 2022

14

－

－

Hitachi Kyusyu Building(Sawara-ku, Fukuoka-shi)

Update central monitoring
panel server and client PCs

From: Mar. 19, 2022
To: Mar. 31, 2022

13

－

－

(2) Capital expenditures during the fiscal period
Major construction works falling under the category of capital expenditures of 10 million yen or more conducted in the fiscal period under review for assets
held by SANKEI REAL ESTATE as of February 28, 2022, are as follows: For the fiscal period under review, capital expenditures amounted to 73 million yen andrepair expenses separately charged to expenses amounted to 36 million yen for a combined total of 109 million yen of construction works implemented.
Name of real estate, etc.
(Location)
Toyo Park Building(Koto-ku, Tokyo)

Amount of payment(million yen)

Purpose

PeriodRenewal of power distribution
panel equipment

From: Dec. 7, 2021
To: Feb. 28, 2022

10

Other

63

Total

73

(3) Cash reserves for long-term repair plans
Based on long-term repair plans formulated on a property-by-property basis, SANKEI REAL ESTATE makes the following provision of reserve for repairs fromcash flows during the fiscal period for the purpose of allocating to medium- to long-term future large-scale repairs and other funds.

Fiscal period
Balance of reserveat beginning of period(thousand yen)
Provision of reserve
during period(thousand yen)
Reversal of reserve
during period(thousand yen)
Reserve carried forward(thousand yen)

2nd fiscal period
From Sep. 1, 2019
to Feb. 29, 2020

3rd fiscal period
From Mar. 1, 2020
to Aug. 31, 2020

4th fiscal period
From Sep. 1, 2020
to Feb. 28, 2021

5th fiscal period
From Mar. 1, 2021
to Aug. 31, 2021

6th fiscal period
From Sep. 1, 2021
to Feb. 28, 2022

95,103

130,466

217,842

175,880

209,678

105,897

128,187

59,29359,29385,56770,53440,812

101,255

25,49632,895130,466

217,842

175,880

209,678

262,349- 15 -

5. Status of Expenses and Liabilities(1) Details of expenses related to asset management(Unit: thousand yen)

5th fiscal period
From Mar. 1, 2021
to Aug. 31, 2021

Item
Asset management fee

6th fiscal period
From Sep. 1, 2021
to Feb. 28, 2022

195,532

210,809

Asset custody fee

1,575

2,013

Administrative service fees

7,100

8,760

Remuneration for directors (and other officers)

3,600

3,600

Other expenses

33,20340,098241,011265,281

Total(2) Status of loans
The status of loans from respective financial institutions as of February 28, 2022, is as follows:

Category

Balanceatbeginningof period(millionyen)

Balanceat end ofperiod(million
yen)

－

260

Averageinterest rate
(Note 1)Maturity
date(Note 2)

Repayment
methodUse offunds

Remarks

0.22912%(floatinginterest rate)

Aug. 31,2022

Lump-sum
repayment
at maturity(Note 3)

Unsecured/
Nonguaranteed593

0.36969%593 (fixed interest
rate)

Mar. 12,2022

Lump-sum
repayment
at maturity(Note 3)

Unsecured/
Nonguaranteed

542

542

Shinsei Bank, Limited

439

439

Resona Bank, Limited

439

439

Mizuho Bank, Ltd.

972

972

716

716

614

614

Mar. 12,2023

Lump-sum
repayment
at maturity(Note 3)

Unsecured/
Nonguaranteed

Mar. 12,2024

Lump-sum
repayment
at maturity(Note 3)

Unsecured/
Nonguaranteed

LenderMizuho Bank, Ltd.
Short-term Sumitomo Mitsui
loansBanking Corporation

Drawdown
date

Sep. 2,
2021

SubtotalMizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Development Bank ofJapan Inc.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Trust
Bank, Limited

Sumitomo Mitsui
Banking Corporation
Development Bank ofJapan Inc.
Long-term Mizuho Trust & Banking
loansCo., Ltd.
Sumitomo Mitsui Trust
Bank, Limited

Mar. 12,
2019

－

140

－

400

1,574

1,574

1,084

1,084

929

929

392

0.42346%392 (fixed interest
rate)

358

358

Shinsei Bank, Limited

324

324

Resona Bank, Limited

324

324

Mizuho Bank, Ltd.

856

856

639

639

548

548

Sumitomo Mitsui
Banking Corporation
Development Bank ofJapan Inc.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Trust
Bank, Limited

Mar. 12,2019

350

0.49096%350 (fixed interest
rate)

319

319

Shinsei Bank, Limited

294

294

Resona Bank, Limited

294

294

Mar. 12,2019- 16 -

Category

LenderDrawdown
date

Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Trust
Bank, Limited

Sep. 3,
2019

Balanceatbeginningof period(millionyen)

Balanceat end ofperiod(millionyen)

Averageinterest rate
(Note 1)Maturity
date(Note 2)

Repayment
methodUse offunds

Remarks

0.25747%(floatinginterest rate)

Sep. 3,2022

Lump-sum
repayment
at maturity(Note 3)

Unsecured/
Nonguaranteed

620

0.36200%620 (fixed interest
rate)

Sep. 3,2023

Lump-sum
repayment
at maturity(Note 3)

Unsecured/
Nonguaranteed

550

550

Sep. 12,2024

Lump-sum
repayment
at maturity(Note 4)

Unsecured/
Nonguaranteed

0.23545%(floatinginterest rate)

Oct. 1,2021

Lump-sum
repayment
at maturity(Note 3)

Unsecured/
Nonguaranteed

0.36978%(fixed interest
rate)

Mar. 12,2025

Lump-sum
repayment
at maturity(Note 4)

Unsecured/
Nonguaranteed

0.29655%(fixed interest
rate)

Sep. 2,2025

Lump-sum
repayment
at maturity(Note 3)

Unsecured/
Nonguaranteed

2,250

2,250

1,500

1,500

620

620

550

550

Shinsei Bank, Limited

490

490

Resona Bank, Limited

490

490

Mizuho Bank, Ltd.

950

950

800

800

2,000

2,000

Sumitomo Mitsui
Banking Corporation
Development Bank ofJapan Inc.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Trust
Bank, Limited

Sep. 3,2019

Shinsei Bank, Limited

490

490

Resona Bank, Limited

490

490

1,167

1,167

832

832

713

713

Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Development Bank ofJapan Inc.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Trust
Bank, Limited

Mar. 12,2020

Shinsei Bank, Limited
Long-term
Resona Bank, Limited
loans
Mizuho Bank, Ltd.

Oct. 1,
2020

Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Development Bank ofJapan Inc.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Trust
Bank, Limited

Mar. 12,2021

456

0.32923%456 (fixed interest
rate)

416

416

358

358

358

358

4,300

－

1,331

1,331

929

929

796

796

509

509

465

465

Shinsei Bank, Limited

385

385

Resona Bank, Limited

385

385

Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Development Bank ofJapan Inc.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Shinsei Bank, Limited
Resona Bank, Limited
THE NISHI-NIPPON CITY
BANK, LTD.
Kansai Mirai Bank,
LimitedThe Chiba Bank, Ltd.

Sep. 2,
2021

－

1,550

－

1,000

－

700

－

600

－

500

－

500

－

400

－

500

－

300

－

150

- 17 -

Category

LenderDrawdown
date

Balanceatbeginningof period(millionyen)

Balanceat end ofperiod(million
yen)

－

750

－

700

－

700

－

200

－

500

－

500

Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Development Bank ofJapan Inc.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Shinsei Bank, Limited

Sep. 2,
2021

Resona Bank, Limited－

400

Aozora Bank, Ltd.

－

1,500

－

500

－

300

THE NISHI-NIPPON CITY
BANK, LTD.
Kansai Mirai Bank,
Long-term
Limitedloans
The Chiba Bank, Ltd.

－

150

－

1,100

－

900

－

700

－

300

－

300

Shinsei Bank, Limited－

300

Resona Bank, Limited－

200

Aozora Bank, Ltd.

－

500

Mizuho Bank, Ltd.
Sumitomo Mitsui
Banking Corporation
Development Bank ofJapan Inc.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Trust
Bank, Limited

Oct. 1,
2021

Subtotal
Total(Note 1)
(Note 2)
(Note 3)(Note 4)37,80050,20037,80050,600

Averageinterest rate
(Note 1)Maturity
date(Note 2)

Repayment
methodUse offunds

Remarks

0.35542%(fixed interest
rate)

Sep. 2,2026

Lump-sum
repayment
at maturity(Note 3)

Unsecured/
Nonguaranteed

0.38044%(fixed interest
rate)

Apr. 1,2026

Lump-sum
repayment
at maturity(Note 4)

Unsecured/
Nonguaranteed

The average interest rate is a weighted-average figure during the fiscal period and is rounded to five decimal places.
If the maturity date is not a business day, the immediately following business day shall be the maturity date.
These funds are used for acquiring real estate or real estate trust beneficiary rights and accompanying expenses.
The funds are used to repay existing loans.

(3) Investment corporation bonds
Not applicable.

(4) Short-term investment corporation bonds
Not applicable.

(5) Investment unit acquisition rights
Not applicable.

- 18 -

6. Acquisitions and Sales during the Fiscal Period(1) Acquisition and sale of real estate, asset-backed securities, infrastructure assets, etc. and infrastructurerelated assets, etc.
Acquisition
Property nameGain or loss
on sale(million
yen)

－

－

－

－

1,400

－

－

－

－

2,800

－

－

－

－

10,000－－－－25,100－－－－

September 2,
2021

10,900

September 2,
2021

interest)

Miyazakidai Garden OfficeHitachi Kyusyu Building

September 2,
2021
September 2,
2021

Total
(Note)

Book value(million yen)

Acquisition
price(million yen)

Shinagawa Seaside TS Tower(20% quasi co-ownership(Additional Acquisition)

Sale price(million yen)

Acquisition date

(25% quasi co-ownership interest in
sectional ownership of the building,etc.)(Additional Acquisition)

S-GATE AKASAKA

Sale

－

Sale date“Acquisition price” is the sale and purchase price of the trust beneficiary right stated in the sale and purchase agreement, rounded down to the nearest million yen. The sale andpurchase prices do not include consumption tax, local consumption tax and the various expenses required for the acquisition.

(2) Acquisition and sale of other assets
Main assets other than the above real estate and asset-backed securities, etc. are bank deposits or bank deposits within trust assets.

(3) Survey on prices of specified assets, etc.
Acquisitionor saleProperty nameShinagawa Seaside TS Tower

Acquisition

Acquisition(25% quasi co-ownership interest in
sectional ownership of the building,etc.)(Additional Acquisition)

S-GATE AKASAKA(20% quasi co-ownership interest)(Additional Acquisition)

Transacti
on dateSep. 2,
2021
Sep. 2,2021

Acquisition

Miyazakidai Garden Office

Sep. 2,2021

Acquisition

Hitachi Kyusyu Building

Sep. 2,2021(Note 1)
(Note 2)Type ofasset

Acquisition
price or saleprice(million yen)

Real estateAppraisalvalue(million yen)

10,900Real estate
trust
beneficiary
rightReal estate
trust
beneficiary
rightReal estate
trust
beneficiary
rightReal estate
trust
beneficiaryrightAppraisal
dateAppraiser

11,000Jul. 1,
2021

The Tanizawa Sōgō
Appraisal Co., Ltd.

1,400

1,422

Jul. 1,
2021

Japan Real Estate
Institute

2,800

2,830

Jul. 1,
2021

Japan Real Estate
Institute

10,000

10,200Jul. 1,
2021

Japan Real Estate
Institute

The appraisal value indicated above was prepared by the appraiser based on the Real Estate Appraisal Standards, Specific Thesis Chapter 3: “Appraisal on Prices of Real Estate Subject toSecuritization.”“Acquisition price or sale price” is the sale and purchase price of the trust beneficiary right stated in the sale and purchase agreement, rounded down to the nearest million yen. The saleand purchase prices do not include consumption tax, local consumption tax and the various expenses required for the acquisition.

(4) Transactions with interested parties, etc.
1) Transaction status
Category
Total

Transaction amount, etc. (million yen) (Note 2)
Purchase amount, etc.

Sale amount, etc.

25,100－

Breakdown of transactions with interested parties, etc. (Note 1)
Godo Kaisha SKB 2

10,900(43.4%)－(－%)

Godo Kaisha SKB Momochi

10,000(39.8%)－(－%)

Godo Kaisha SKB Miyazakidai

2,800(11.2%)－(－%)

The Sankei Building Co., Ltd.

1,400

(5.6%)－(－%)

25,100(100.0%)

－

(－%)

Total

- 19 -

(Note 1)(Note 2)
(Note 3)“Interested parties, etc.” refer to the interested persons, etc., of the asset management company with which SANKEI REAL ESTATE has entered into an asset managementagreement as provided in Article 123 of the Order for Enforcement of the Act on Investment Trusts and Investment Corporations and Article 26, Paragraph 1, Item 27 of
the Rules on Management Reports of Investment Trusts and Investment Corporations of The Investment Trusts Association, Japan.
“Transaction amount, etc.” is the sale and purchase price of the trust beneficiary right stated in the sale and purchase agreement, rounded down to the nearest million
yen. The sale and purchase prices do not include consumption tax, local consumption tax and the various expenses required for the acquisition.
Figures in parenthesis represent the percentage (%) to the respective total amounts, rounded to one decimal place.

2) Amount of fees paid, etc.
Category

Total amount of fees
paid, etc.
(A)

Breakdown of transactions with interested parties, etc.
Paid party

Paid amount (B)237,000 thousand yen

Percentage of
total amount(B/A)

Brokerage fees

237,000 thousand yen The Sankei Building Co., Ltd.

100.0%

Property management fees

56,232 thousand yen

The Sankei Building Co., Ltd.

18,953thousand yen

33.7%

The Sankei Building Management Co., Ltd.

15,402thousand yen

27.4%

Building management fees

167,842 thousand yen The Sankei Building Management Co., Ltd.

125,915 thousand yen

75.0%3) Major payments to other interested parties, etc.
The amounts paid to interested parties, etc. other than the fees paid, etc. above are as follows:
The Sankei Building Management Co., Ltd.

27,367 thousand yen (Repair expenses)

Sankei Bldg. Techno Co., Ltd.

1,227 thousand yen (Repair expenses)

Sankei Shimbun Co., Ltd.

1,135 thousand yen (Land rent)

Fuji Media Holdings, Inc.

683 thousand yen (Land rent)

4) Leasing transactions, etc.
Leasing transactions conducted with interested parties, etc. are as follows:
GRANVISTA Hotels & Resorts Co., Ltd.
The Sankei Building Co., Ltd.

325,755 thousand yen (Rental revenue)
2,948 thousand yen (Rental revenue)(5) Transactions with the asset management company regarding concurrent work conducted by the asset
management company
As of February 28, 2022, Sankei Building Asset Management Co., Ltd., the asset management company of SANKEI REAL ESTATE, concurrently conducts
investment advisory and agency business and type II financial instruments business under the Financial Instruments and Exchange Act, but has no suchtransactions with SANKEI REAL ESTATE.

- 20 -

7. Overview of Accounting(1) Assets, liabilities, principal, and profits and loss
Please refer to Balance Sheet, Statement of Income and Retained Earnings, Statement of Changes in Unitholders’ Equity, Notes to Financial Statements andStatement of Cash Distributions on later pages of this report.

(2) Changes in calculation method of depreciation
Not applicable.

(3) Changes in valuation method of real estate and infrastructure assets, etc.
Not applicable.

(4) Status, etc. of self-managed investment trust beneficiary certificates, etc.
Not applicable.

8. Other(1) Notices
Not applicable.

(2) Disclosure on corporation owning foreign real estate
Not applicable.

(3) Disclosure on real estate owned by corporation owning foreign real estate
Not applicable.

(4) Other
Unless otherwise stated, the figures less than the specified unit are rounded down for monetary amounts and rounded off to the nearest specified unit forpercentage figures in this Report.

- 21 -

- 22 -

- 23 -

1. Financial Statements(1) Balance Sheet(Unit: thousand yen)
5th fiscal period(as of Aug. 31, 2021)

AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Land
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
Construction in progress in trust
Total property, plant and equipment
Intangible assets
SoftwareTotal intangible assets
Investments and other assets
Long-term prepaid expenses
Deferred tax assets
Lease and guarantee deposits
Total investments and other assets
Total non-current assets
Deferred assets
Investment unit issuance costs
Total deferred assets
Total assets- 24 -

6th fiscal period(as of Feb. 28, 2022)

4,457,965
2,799,257
36,07959,212
77
7,352,593

4,512,675
3,729,623
89,93861,458389,377
8,783,072

169,301(15,201)
154,100
544
(25)
518
2,457,766
14,340,970(992,106)
13,348,864
23,832(1,435)22,396
11,302(564)
10,73728,239(5,727)22,51256,132,575
281,344
72,430,815

179,269(18,849)
160,419
544
(39)
504
2,457,766
18,708,509(1,291,738)
17,416,771
71,171(2,476)
68,695
11,302(1,131)
10,17029,876(7,822)
22,05477,433,848
32,673
97,602,903

4,833
4,833

3,893
3,893

43,72413
10,00053,73872,489,387

93,33810
10,000103,348
97,710,146

6,488
6,488
79,848,468

30,12430,124
106,523,343

(Unit: thousand yen)
5th fiscal period(as of Aug. 31, 2021)
Liabilities
Current liabilities
Operating accounts payable
Short-term borrowings
Long-term loans due within one year
Accounts payable - otherAccrued expenses
Income taxes payable
Consumption taxes payable
Advances received
Deposits received
Total current liabilities
Non-current liabilities
Long-term loans
Lease and guarantee deposits received
Lease and guarantee deposits received in trust
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders' capital
Unitholders’ capital (net)
Surplus
Unappropriated retained earnings(undisposed loss)
Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets*1- 25 -

6th fiscal period(as of Feb. 28, 2022)

225,346
9,900,000
494,644
27,936875
89,208339,943
14,065
11,092,019

126,748
400,000
11,500,000
242,634
38,805815
485,392
11,356
12,805,752

27,900,000
82,1393,219,176
31,201,315
42,293,334

38,700,000
87,974
4,102,499
42,890,473
55,696,225

36,540,901
36,540,901

49,442,685(7,136)49,435,549

1,014,232

1,391,567

1,014,232
37,555,134
37,555,134
79,848,468

1,391,567
50,827,117*1
50,827,117
106,523,343

(2) Statement of Income and Retained Earnings(Unit: thousand yen)
5th fiscal period
From: Mar. 1, 2021
To: Aug. 31, 2021

Operating revenue
Rent business revenue
Other rent business revenue
Total operating revenue
Operating expenses
Expenses related to rent business
Asset management fee
Asset custody fee
Administrative service fees
Remuneration for directors (and other officers)
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Insurance claim income
Interest on refund
Other
Total non-operating income
Non-operating expenses
Interest expenses
Borrowing related expenses
Amortization of investment unit issuance expenses
Other
Total non-operating expenses
Ordinary income
Net income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)

*1
*1

*1

- 26 -

6th fiscal period
From: Sep. 1, 2021
To: Feb. 28, 2022

2,032,902
143,210
2,176,113
793,758
195,532
1,575
7,100
3,600
33,203
1,034,769
1,141,343

*1
*1

*1

2,615,817
162,297
2,778,114
972,543
210,809
2,013
8,760
3,600
40,0981,237,824
1,540,290

31
994
50
15
1,091

37
253
17
308

66,412
61,120127,533
1,014,902
1,014,902880
0880
1,014,021
210
1,014,232

88,26448,5406,024
5,583
148,414
1,392,184
1,392,184
820
2
823
1,391,360
207
1,391,567

(3) Statement of Changes in Unitholders’ Equity
5th fiscal period (from March 1, 2021 to August 31, 2021)(Unit: thousand yen)

Unitholders’ equity
Surplus
Unappropriatedretainedearnings(undisposed
loss)

Unitholders’capitalBalance at beginning of
periodChanges in items during
periodDistributions fromsurplus36,540,901

1,016,734

1,016,734

37,557,635

37,557,635(1,016,523)(1,016,523)(1,016,523)(1,016,523)

1,014,021

1,014,021

1,014,021

1,014,021-(2,501)(2,501)(2,501)(2,501)36,540,901

1,014,232

1,014,232

37,555,134

37,555,134

Net income
Total changes in items
during period
Balance at end of period

*1

Total
surplus

Total net
assetsTotalunitholders’equity6th fiscal period (from September 1, 2021, to February 28, 2022)(Unit: thousand yen)

Unitholders’ equity
Surplus
Deduction
Unitholders’ Unappropriatedfrom
Unitholders’retained
capitalTotal
unitholders'
capitalearnings(net)
surpluscapital(undisposed
loss)

Balance at beginning of
periodChanges in items during
periodIssuance of new
investment units
Distribution in excess ofearnings
Distributions fromsurplus36,540,901

36,540,901

12,901,784(7,136)

Total changes in items
during period
Balance at end of period*11,014,232

Total net
assets37,555,134

37,555,134

12,901,784

12,901,784

12,901,784(7,136)(7,136)(7,136)

Net income

1,014,232

Total
unitholders’equity(1,014,025)(1,014,025)(1,014,025)(1,014,025)

1,391,360

1,391,360

1,391,360

1,391,360

12,901,784(7,136) 12,894,648

377,335

377,335

13,271,983

13,271,983

49,442,685(7,136) 49,435,549

1,391,567

1,391,567

50,827,117

50,827,117- 27 -

(4) Statement of Cash Distributions(Unit: yen)
5th fiscal period
From: Mar. 1, 2021
To: Aug. 31, 2021

6th fiscal period
From: Sep. 1, 2021
To: Feb. 28, 2022

I. Unappropriated retained earnings
II. Additional distributions in excess ofearnings
Deduction from unitholders' capital

1,014,232,892

1,391,567,971

7,136,000-

III. Amount of distribution

1,021,161,600

1,391,487,921[Amount of distribution per unit][2,862][2,979]of which, distribution of earnings

1,014,025,600

1,391,487,921[of which, distribution of earnings per unit][2,842][2,979]of which, distribution in excess of earnings[of which, distribution in excess of earnings
per unit]
IV. Retained earnings carried forward

7,136,000

-

[20]

[-]

207,293

80,050In accordance with the policy on
distribution specified in Article 36,
Paragraph 1 of SANKEI REAL ESTATE’s
articles of incorporation, the amountof distribution shall be limited to theamount of net income in excess of theamount equivalent to 90% of
distributable profit, as stipulated in
Article 67-15 of the Act on Special
Measures Concerning Taxation. Basedon this policy, the decision was madeto distribute 1,014,025,600 yen,which is the largest integral multipleof the total number of investment
units issued and outstanding (356,800
units) not in excess of unappropriatedretained earnings.
Furthermore, pursuant to the policyon the distribution in excess ofearnings specified in Article 36,
Paragraph 2 of SANKEI REAL ESTATE’s
articles of incorporation, due to net
income decreasing in the fiscal period
under review as a result of recording
temporaryborrowing-related
expenses associated with borrowing
for the acquisition of real estate trust
beneficiary rights of 4 properties on
September 2, 2021, 7,136,000 yen
was distributed as a contribution
refund that falls under distribution
through reduction in unitholders’capital for tax law. As a result, theamountofdistributionwas
1,021,161,600 yen in the fiscal period
under review.

In accordance with the policy on
distribution specified in Article 36,
Paragraph 1 of SANKEI REAL ESTATE’s
articles of incorporation, the amountof distribution shall be limited to theamount of net income in excess of theamount equivalent to 90% of
distributable profit, as stipulated in
Article 67-15 of the Act on Special
Measures Concerning Taxation. Basedon this policy, the decision was madeto distribute 1,391,487,921 yen,which is the largest integral multipleof the total number of investment
units issued and outstanding (467,099
units) not in excess of unappropriatedretained earnings.
The distribution in excess of earnings
specified in Article 36, Paragraph 2 of
SANKEI REAL ESTATE’s articles ofincorporation will not be made.

Method of calculation of amount of
distribution- 28 -

(5) Statement of Cash Flows(Unit: thousand yen)
5th fiscal period
From: Mar. 1, 2021
To: Aug. 31, 2021

Cash flows from operating activities
Net income before income taxes
Depreciation
Amortization of investment unit issuance expenses
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund
receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable - other
Increase (decrease) in consumption taxes payable
Increase (decrease) in advances received
Increase (decrease) in deposits received
Decrease (increase) in long-term prepaid expenses
Decrease (increase) in other assets
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust
Proceeds from lease and guarantee deposits received
Refund of lease and guarantee deposits received
Proceeds from lease and guarantee deposits received
in trust
Refund of lease and guarantee deposits received intrust
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term loans
Repayments of short-term loans
Proceeds from long-term loans
Repayments of long-term loans
Proceeds from issuance of investment units
Payments of investment unit issuance costs
Distributions 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*1- 29 -

6th fiscal period
From: Sep. 1, 2021
To: Feb. 28, 2022

1,014,902
229,481(31)
66,412
20,672

1,392,184
307,9376,024(37)88,264(47,934)

9,321(389,377)(12,615)
18,847
12,407
89,208(33,871)
6,568
(487)
40,937
1,461,754
31(64,651)(884)
1,396,250(2,245)(86,226)
9,619(89,208)
145,449(2,709)(49,613)77
1,282,20437(77,396)(881)
1,203,964(3,460)(28,670)
2,572
(19)

(9,967)(25,743,595)
5,933
(98)

3,970

1,005,708(35,084)(128,308)(60,691)(24,870,328)

4,800,000(4,800,000)(6,488)(1,015,975)(1,022,464)
313,095
6,944,127
7,257,223

1,000,000(600,000)
16,700,000(4,300,000)
12,901,784(29,661)(1,020,683)
24,651,439
985,075
7,257,223*1
8,242,298

(6) Notes to Financial Statements(Notes on the Going Concern Assumption)
Not applicable.
(Notes on Matters Concerning Significant Accounting Policies)
1.

Method of depreciation of noncurrent assets

2.

Accounting for deferred assets

3.

Standards for revenue andexpense recognition

4.

Scope of cash (cash and cash
equivalents) in the statement ofcash flows

5.

Other significant matters related
to the basis for preparation of
the financial statements(1) Property, plant and equipment (including trust assets)
The straight-line method is adopted. Furthermore, the useful lives of major property,
plant and equipment are as follows:
Buildings
1–65 years
Structures
6–59 years
Machinery and equipment
8-10 years
Tools, furniture and fixtures
4–8 years(2) Intangible assets
The straight-line method is adopted.
(3) Long-term prepaid expenses
The straight-line method is adopted.
Investment unit issuance costs
They are amortized by the straight-line method over 3 years.
(1) Standards for revenue recognition
The details of performance obligations concerning revenue from contracts with
SANKEI REAL ESTATE’s customers and the time when the performance obligations arenormally satisfied (the normal time to recognize revenue) are as follows.
i.
Sale of real estate, etc.
Revenue is recognized for the sale of real estate at the time the buyer who is acustomer gains control of the real estate, etc. through the performance ofdelivery obligations specified in a contract on the sale of real estate.
ii. Utilities reimbursement
Revenue is recognized for utilities reimbursement according to the supply ofelectricity, water, etc. to tenants who are customers based on the content oflease agreements for real estate and incidental agreements. For the utilities
reimbursement for which SANKEI REAL ESTATE is deemed to be an agent, the net
amount after deducting the amount to be paid to another party from the amountreceived from the other party as charges for electricity, gas, etc. provided by said
party is recorded as revenue.
(2) Accounting for fixed asset tax, etc.
For fixed asset tax, city planning tax, depreciable asset tax, etc. on real estate or trust
beneficiary rights of real estate, the tax levied corresponding to the calculation period
is recorded as expenses related to rent business.
Furthermore, the amount equivalent to fixed asset tax, etc. in the initial fiscal year
paid by SANKEI REAL ESTATE upon acquisition of real estate or trust beneficiary rightsof real estate is included in the cost of acquisition of the real estate, etc., notrecognized as expenses. The amount equivalent to fixed asset tax, etc. included in thecost of acquisition of real estate, etc. was nil in the previous fiscal period. The amountequivalent to fixed asset tax, etc. included in the cost of acquisition of real estate, etc.
was 48,733 thousand yen in the fiscal period under review.
Cash and cash equivalents in the statement of cash flows comprise cash on hand and cashin trust, demand deposits and deposits in trust, and short-term investments with a maturityof three months or less from the date of acquisition that are readily convertible to cash andthat are subject to an insignificant risk of changes in value.
Accounting for trust beneficiary rights that have real estate, etc. as trust assets
Concerning trust beneficiary rights that have real estate, etc. as trust assets held, allaccounts of assets and liabilities within trust assets and all accounts of revenue andexpenses from the trust assets are recognized in the relevant account item of the balance
sheet and the statement of income and retained earnings.
Furthermore, the following material items of the trust assets recognized in the relevant
account item are separately listed on the balance sheet.
i.
Cash and deposits in trustii. Buildings in trust; Structures in trust; Machinery and equipment in trust; Tools,
furniture and fixtures in trust; Land in trust; Construction in progress in trustiii. Lease and guarantee deposits received in trust- 30 -

(Notes on Changes in Accounting Policies)
1. The application of the “Accounting Standard for Revenue Recognition”
The Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan (ASBJ) Statement No. 29 issued
on March 31, 2020; hereinafter “Revenue Recognition Accounting Standard”) and the Implementation Guidance on
Accounting Standard for Revenue Recognition (ASBJ Guidance No. 30 issued on March 26, 2021) have been applied fromthe beginning of the fiscal period under review, and the amount expected to be received in exchange for goods or services
is recognized as revenue at the time control of the promised goods or services is transferred to the customer. The
application of the accounting standard has no impact on the financial statements. In accordance with the transitional
treatment specified in section 89-3 of the Revenue Recognition Accounting Standard, notes on “Revenue Recognition” forthe previous fiscal period are not stated.
2. The application of the “Accounting Standard for Fair Value Measurement”
The “Accounting Standard for Fair Value Measurement” (Accounting Standards Board of Japan (ASBJ) Statement No. 30
issued on July 4, 2019; hereinafter referred to as Fair Value Measurement Accounting Standard), etc. have been applied
from the beginning of the fiscal period under review, and in accordance with the transitional treatment specified in section
19 of the Fair Value Measurement Accounting Standard and section 44-2 of the Accounting Standard for Financial
Instruments (ASBJ Statement No. 10 issued on July 4, 2019), the new accounting policies specified by the Fair Value
Measurement Accounting Standard, etc. will apply into the future. They have no impact on 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)
5th fiscal period
6th fiscal period(as of Aug. 31, 2021)(as of Feb. 28, 2022)
50,00050,000(Notes to the Statement of Income and Retained Earnings)*1. Breakdown of operating income (loss) from real estate leasing
5th fiscal period
From: Mar. 1, 2021
To: Aug. 31, 2021
A. Operating revenue from real estateleasing
Rent business revenue
Rental revenue
Common area maintenance revenue(Unit: thousand yen)
6th fiscal period
From: Sep. 1, 2021
To: Feb. 28, 2022

1,890,879
142,0222,479,240
136,576

Total rent business revenue

2,032,902

2,615,817

Other rent business revenue
Utilities revenue
Parking revenue
Other rental revenue

89,327
31,102
22,780119,960
34,789
7,547

Total other rent business revenue
Total operating revenue from real estateleasing
B. Operating expenses from real estateleasing
Expenses related to rent businessOutsourcing expenses
Utilities expenses
Property taxes
Land rent
Repair expenses
Insurance premium
Trust fee
Depreciation
Other expenses related to rent
business
Total expenses related to rent business

143,210
2,176,113

162,297
2,778,114

169,652
116,632
223,015
1,818
39,331
4,354
2,752
228,541
7,658

224,074
162,294
220,379
1,818
36,0696,044
3,871
306,997
10,992

793,758

972,543

Total operating expenses from realestate leasing
C. Operating income (loss) from real estateleasing [A−B]

793,758

972,543

1,382,355

1,805,571- 31 -

(Notes to the Statement of Changes in Unitholders’ Equity)*1. Total number of investment units authorized and total number of investment units issued and outstanding
5th fiscal period
From: Mar. 1, 2021
To: Aug. 31, 2021
Total number of investment units
authorized
Total number of investment units issued
and outstanding(Unit: units)
6th fiscal period
From: Sep. 1, 2021
To: Feb. 28, 2022

10,000,000

10,000,000

356,800

467,099(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)
5th fiscal period
6th fiscal period
From: Mar. 1, 2021
From: Sep. 1, 2021
To: Aug. 31, 2021
To: Feb. 28, 2022
Cash and deposits
Cash and deposits in trust

4,457,965
2,799,257

4,512,675
3,729,623

Cash and cash equivalents

7,257,223

8,242,298(Notes on Lease Transactions)Operating lease transactions (as lessor)
Future minimum lease payments
5th fiscal period(as of Aug. 31, 2021)(Unit: thousand yen)
6th fiscal period(as of Feb. 28, 2022)

Due within 1 year

2,519,482

2,859,110

Due after 1 year
Total

14,482,652
17,002,135

14,772,633
17,631,744(Notes on Financial Instruments)
1. Matters concerning status of financial instruments(1) Policy for handling financial instruments
SANKEI REAL ESTATE shall procure funds in a well-balanced manner through borrowing from financial institutions,issuance of investment corporation bonds, issuance of new investment units, etc. to contribute to steady growth ofassets under management as well as efficient operation and stability of management.
Upon borrowing from financial institutions, issuance of investment corporation bonds, etc., the fund procurement
shall be in a manner that gives due consideration to the balance between agility in fund procurement and financial
stability, characteristics of to-be-acquired real estate, etc. Specifically, the procurement means, ratio of long-term debt,
ratio of fixed-rate debt, staggering of maturities, provision of collateral or not, etc. shall be considered. Upon borrowing,
lenders shall be limited to the qualified institutional investors provided in the Financial Instruments and Exchange Act(however, limited to the institutional investors provided in Article 67-15 of the Act on Special Measures Concerning
Taxation).
Issuance of new investment units shall be for the purpose of expansion of asset size and enhancement of profitability,
as well as implementation decided by taking into account the LTV ratio, dilution of existing unitholders’ rights andaccompanying decline in transaction price of investment units, etc. and in light of the financial environment.
Derivative transactions may be conducted for the purpose of hedging the risk of fluctuation in interest rates and otherrisks on SANKEI REAL ESTATE arising from the concerned liabilities. No derivative transactions were conducted in thefiscal period under review.
(2) Description of financial instruments and associated risks, and risk management system
Loans are mainly for the purpose of procuring funds for acquisition of assets and funds for repayment of obligations.
Loans are exposed to the risk of inability to refinance upon becoming due for repayment, risk of rise in the interest rate
payable, etc., but the risks are mitigated by considering fund procurement that is well balanced through issuance ofinvestment units, etc. while also diversifying fund procurement sources and staggering maturities. In addition, the riskof rise in interest rates on SANKEI REAL ESTATE’s operations is managed by closely watching interest rate trends andkeeping the LTV ratio under control in an appropriate manner.
(3) Supplementary explanation to matters concerning fair value, etc. of financial instruments
Certain assumptions, etc. are adopted in the calculation of the value of financial instruments. Accordingly, the concernedvalues may vary when different assumptions, etc. are adopted.

- 32 -

2. Matters concerning fair value, etc. of financial instruments
The following are the carrying amount and fair value as of August 31, 2021, and the amount of difference between these.
Notes on “cash and deposits” and “cash and deposits in trust” are omitted due to the fair value being approximated to thecarrying amount because they are cash or settled in a short period. Furthermore “leasehold and guarantee deposits
received” and “leasehold and guarantee deposits received in trust” are omitted because they lack significance.
(Unit: thousand yen)
Carrying amount(1) Long-term loans due within
one year(2) Long-term loans
Total liabilities

Fair value

Amount of difference

9,900,000
27,900,000

9,908,903
27,976,223

8,903
76,22337,800,000

37,885,127

85,127

The following are the carrying amount and fair value as of February 28, 2022, and the amount of difference between these.
Notes on “cash and deposits,” “cash and deposits in trust” and “short-term borrowings” are omitted due to the fair value
being approximated to the carrying amount because they are cash or settled in a short period. Furthermore “lease andguarantee deposits received” and “lease and guarantee deposits received in trust” are omitted because they lacksignificance.
(Unit: thousand yen)
Carrying amount(1) Long-term loans due within
one year(2) Long-term loans
Total liabilities

Fair value

Amount of difference

11,500,000
38,700,000

11,504,603
38,654,400

4,603(45,599)

50,200,000

50,159,003(40,996)(Note 1) Method of calculation of the fair value of financial instruments(1) Long-term loans due within one year; (2) Long-term loans
Of long-term loans, because those with floating interest rates reflect market interest rates in a short period of time, the fair value is thought toresemble the book value and thus stated at that book value. However, in the case of long-term loans with fixed interest rates, the fair value iscalculated based on the present value of their future cash flows discounted over the time to maturity and at the rate adjusted for credit risks.
(Note 2) Amount of repayment of loans scheduled to be due after the end of the fiscal period (August 31, 2021)
Due within
1 yearLong-term loans due within one year

Due after
2 to 3 years

Due after
3 to 4 years

Due after
4 to 5 years

-

-

-

-

-

-

9,600,000

9,200,000

9,100,000--

9,900,000

9,600,000

9,200,000

9,100,000--

Amount of repayment of loans scheduled to be due after the end of the fiscal period (February 28, 2022)
Due within
1 yearShort-term loans
Long-term loans due within one year

Due after
1 to 2 years

Due after
2 to 3 years

Due after
3 to 4 years

Due after
4 to 5 years(Unit: thousand yen)
Due after
5 years

400,000

-

-

-

-

-

11,500,000

-

-

-

-

-

-

9,600,000

7,600,000

11,000,000

10,500,000-

11,900,000

9,600,000

7,600,000

11,000,000

10,500,000-

Long-term loans
Total(Unit: thousand yen)
Due after
5 years

9,900,000

Long-term loans
Total

Due after
1 to 2 years(Notes on Securities)
5th fiscal period (as of August 31, 2021)
Not applicable.
6th fiscal period (as of February 28, 2022)
Not applicable.
(Notes on Derivative Transactions)
5th fiscal period (as of August 31, 2021)
Not applicable.
6th fiscal period (as of February 28, 2022)
Not applicable.

- 33 -

(Notes on Retirement Benefits)
5th fiscal period (as of August 31, 2021)
Not applicable.
6th fiscal period (as of February 28, 2022)
Not applicable.
(Notes on Tax-Effect Accounting)
1. Breakdown of main causes for occurrence of deferred tax assets and deferred tax liabilities
5th fiscal period(as of Aug. 31, 2021)(Unit: thousand yen)
6th fiscal period(as of Feb. 28, 2022)

Deferred tax assets
Non-deductible accrued enterprise tax

13

10

Total
Deferred tax assets, net

13
13

10
10

2. Reconciliation of significant differences between the statutory tax rate and the effective income tax rate

(Unit: %)5th fiscal period(as of Aug. 31, 2021)

6th fiscal period(as of Feb. 28, 2022)

31.46

31.46

(31.43)(31.44)

Other

0.06

0.04

Effective income tax rate after applicationof tax-effect accounting

0.09

0.06

Statutory tax rate
[Adjustments]
Deductible distribution payable(Notes on Share of Profit (Loss) of Entities Accounted for Using Equity Method)
5th fiscal period (from March 1, 2021 to August 31, 2021)
Not applicable.
6th fiscal period (from September 1, 2021 to February 28, 2022)
Not applicable.
(Notes on Related-Party Transactions)
1. Parent company, major corporate unitholder, etc.
5th fiscal period (from March 1, 2021 to August 31, 2021)
Not applicable.
6th fiscal period (from September 1, 2021 to February 28, 2022)
Not applicable.
2. Affiliated company, etc.
5th fiscal period (from March 1, 2021 to August 31, 2021)
Not applicable.
6th fiscal period (from September 1, 2021 to February 28, 2022)
Not applicable.
3. Fellow subsidiary, etc.
5th fiscal period (from March 1, 2021 to August 31, 2021)
Not applicable.
6th fiscal period (from September 1, 2021 to February 28, 2022)
Not applicable.

- 34 -

4. Director, major individual unitholder, etc.
5th fiscal period (from March 1, 2021 to August 31, 2021)

Description of
Share capital
Percentage ofrelationship
Balance atorvoting rights,
Transaction
Description ofend ofConcurrent
investments
etc. held by
Description of amount Accountbusiness or
periodAttribute
Location
holding of
in capital(in) SANKEItransaction(thousanditem
Business(thousandoccupation
positions,(thousand
REAL ESTATE
yen)
relationshipyen)etc. byyen)(%)
directors
Executive
Director of
SANKEI REAL
Payment of
Executive Director of
ESTATE, andasset
SANKEI REAL ESTATE, andPresident andmanagement
Accounts
President andDirector Yuichi Ota
Representative
fee to asset
195,532 payable - 215,085
Representative Director
Director ofmanagement
otherof Sankei Building Asset
Sankei Building
company
Management Co., Ltd.
Asset
(Note 3)
Management
Co., Ltd.
(Note 1) Of the related-party transactions subject to disclosure, the related-party transactions including significant transactions are disclosed.
(Note 2) Of the amounts above, transaction amount does not include consumption tax, etc., while balance at end of period includes consumption tax, etc.
Amounts are rounded down to the nearest thousand yen.
(Note 3) Payment of asset management fee is for transactions conducted by Yuichi Ota as representative of Sankei Building Asset Management Co., Ltd., andtransaction amount is based on the terms and conditions provided in SANKEI REAL ESTATE’s articles of incorporation.
(Note 4) Transaction terms and conditions are decided based on the actual market conditions.
Name ofcompany,
etc. orname ofperson

6th fiscal period (from September 1, 2021 to February 28, 2022)

Description ofPercentage ofrelationship
Name of
Balance
Share capitalvoting rights,
Transaction
company,
Description ofat end ofConcurrent
or investments
Description ofamount Accountetc. held by
Attributeetc. or Location
business or
periodholding of
in capitaltransaction(thousand
item(in) SANKEIBusinessname ofoccupation(thousandpositions,(thousand yen)
yen)
REAL ESTATE
relationshippersonyen)
etc. by(%)
directors
Executive
Director of
Payment of
SANKEI REAL
Executive Director of
asset
ESTATE, andSANKEI REAL ESTATE,
management
President andAccounts
and President and
461,809
Director Yuichi Ota
Representative
fee to asset
payable - 231,890
Representative Director(Note 4)
management
Director ofotherof Sankei Building Asset
Sankei Building
company
Management Co., Ltd.
Asset
(Note 3)
Management
Co., Ltd.
(Note 1) Of the related-party transactions subject to disclosure, the related-party transactions including significant transactions are disclosed.
(Note 2) Of the amounts above, transaction amount does not include consumption tax, etc., while balance at end of period includes consumption tax, etc.
Amounts are rounded down to the nearest thousand yen.
(Note 3) Payment of asset management fee is for transactions conducted by Yuichi Ota as representative of Sankei Building Asset Management Co., Ltd., andtransaction amount is based on the terms and conditions provided in SANKEI REAL ESTATE’s articles of incorporation.
(Note 4) Asset management fee includes the portion of the fee for property acquisition included in the book value of individual real estate, etc. (251,000
thousand yen).
(Note 5) Transaction terms and conditions are decided based on the actual market conditions.

(Notes on Asset Retirement Obligations)
5th fiscal period (from March 1, 2021 to August 31, 2021)
Not applicable.
6th fiscal period (from September 1, 2021 to February 28, 2022)
Not applicable.

- 35 -

(Notes on Investment and Rental Properties)
SANKEI REAL ESTATE owns office buildings, etc. for the purpose of earning revenue from leasing. The carrying amount,amount of change during period and fair value of these investment and rental properties are as follows:(Unit: thousand yen)
5th fiscal period
6th fiscal period
From: Mar. 1, 2021
From: Sep. 1, 2021
To: Aug. 31, 2021
To: Feb. 28, 2022
Carrying amount
Balance at beginning of period
72,320,630
72,149,470
Amount of change during period
Balance at end of period
Fair value at end of period(171,159)

25,420,759

72,149,470
79,326,000

97,570,230
105,713,000(Note 1) Carrying amount is the amount of the cost of acquisition, less accumulated depreciation.
(Note 2) Of the amount of change during period, the amount of increase in the previous fiscal period is mainly attributable to capital expenditures(57,084 thousand yen), etc., while the amount of decrease is mainly attributable to depreciation (228,541 thousand yen). The amount of
increase in the fiscal period under review is mainly attributable to new property acquisition of 2 properties and additional acquisition of 2
properties (total of 4 properties: 25,653,909 thousand yen <including expenses incidental to the acquisition>) while the amount of decreaseis mainly attributable to depreciation (306,997 thousand yen).
(Note 3) Fair value at end of period is the appraisal value by an external real estate appraiser.

Furthermore, the income (loss) concerning investment and rental properties is presented in “Notes to the Statement of
Income and Retained Earnings.”(Notes on Revenue Recognition)
1. Information breaking down revenue from contracts with customers
6th fiscal period (from September 1, 2021 to February 28, 2022)

Sale of real estate, etc.
Utilities reimbursement
Other
Total

(Note)

Revenue from contracts with customers(Note)
119,960
119,960(Unit: thousand yen)
Sales to external customers
119,960
2,658,154
2,778,114

Leasing business revenue, etc. subject to ASBJ Statement No. 13 “Accounting Standard for Lease Transactions” and the transfer of real estate,etc. subject to The Japanese Institute of Certified Public Accountants Accounting Committee Report No. 15 “Practical Guidelines on
Accounting of Transferors for the Securitization of Real Estate Utilizing Special Purpose Companies” are not included in the above amounts
because they are excluded from application of the Revenue Recognition Accounting Standard. The main revenues from contracts withcustomers are revenue from the sale of real estate, etc. and utilities reimbursement.

2. Information forming the basis for understanding revenue from contracts with customers
6th fiscal period (from September 1, 2021 to February 28, 2022)
Matters related to significant accounting policies are as stated in the notes.
3. Information on satisfaction of performance obligations based on contracts with customers, cash flows from such contracts,
and the amount and timing of revenue expected to be recognized from the next accounting period from contracts withcustomers that exist at the end of the accounting period under review
6th fiscal period (from September 1, 2021 to February 28, 2022)(1) Balance of contract assets and contract liabilities, etc.

Receivables from contracts with customers(balance at beginning of period)
Receivables from contracts with customers(balance at end of period)
Contract assets (balance at beginning of period)
Contract assets (balance at end of period)
Contract liabilities (balance at beginning of period)
Contract liabilities (balance at end of period)(Unit: thousand yen)
6th fiscal period
22,574
26,182-- 36 -

(2) Transaction price allocated to remaining performance obligations
Revenue is recognized for utilities reimbursement using the amount for which there is a right to claim in accordancewith section 19 of the Implementation Guidance on Accounting Standard for Revenue Recognition because there is aright to receive an amount of consideration directly corresponding to the value for the lessee who is a customer for the
portion for which performance is completed by the end of the period. Therefore, the provisions of section 80-22(2) of
the Revenue Recognition Accounting Standard apply, and the transaction prices allocated to remaining performanceobligations are not included in the notes.
(Notes on Segment Information, Etc.)
1. Segment information
The information is omitted since SANKEI REAL ESTATE has a single segment—the real estate rent business.
2. Related information
5th fiscal period (from March 1, 2021 to August 31, 2021)(1) Information by product and service
The information is omitted since operating revenue to external customers for a single group of products and services
exceeds 90% of operating revenue on the statement of income and retained earnings.
(2) Information by geographic areai.
Operating revenue
The information is omitted since operating revenue to external customers in Japan exceeds 90% of operating
revenue on the statement of income and retained earnings.
ii. Property, plant and equipment
The information is omitted since the amount of property, plant and equipment located in Japan exceeds 90% of
the amount of property, plant and equipment on the balance sheet.
(3) Information by major customer
Name of customer
GRANVISTA Hotels & Resorts Co., Ltd.

Operating revenue
325,755(Unit: thousand yen)
Related segment
Real estate leasing businessSony Group Corporation

Not disclosed (Note)

Real estate leasing business(Note)

Not disclosed, due to unavoidable circumstances in that consent for disclosure has not been obtained from the lessee.

6th fiscal period (from September 1, 2021 to February 28, 2022)(1) Information by product and service
The information is omitted since operating revenue to external customers for a single group of products and services
exceeds 90% of operating revenue on the statement of income and retained earnings.
(2) Information by geographic areai.
Operating revenue
The information is omitted since operating revenue to external customers in Japan exceeds 90% of operating
revenue on the statement of income and retained earnings.
ii. Property, plant and equipment
The information is omitted since the amount of property, plant and equipment located in Japan exceeds 90% of
the amount of property, plant and equipment on the balance sheet.
(3) Information by major customer
Name of customer
GRANVISTA Hotels & Resorts Co., Ltd.

Operating revenue
325,755(Unit: thousand yen)
Related segment
Real estate leasing businessSony Group Corporation

Not disclosed (Note)

Real estate leasing business5th fiscal period
From: Mar. 1, 2021
To: Aug. 31, 2021

6th fiscal period
From: Sep. 1, 2021
To: Feb. 28, 2022

(Note)

Not disclosed, due to unavoidable circumstances in that consent for disclosure has not been obtained from the lessee.

[Notes on Per Unit Information]

Net assets per unit

105,255 yen

108,814 yen

Net income per unit

2,841 yen

2,983 yen

(Note 1) Net income per unit is calculated by dividing net income by the period’s daily weighted average number of investment units (fiscal period
ended August 2021: 356,800 units; fiscal period ended February 2022: 466,286 units). In addition, diluted earnings per unit is not stated,because there are no diluted investment units(Note 2) The basis for calculation of earnings per unit is as follows:- 37 -

5th fiscal period
From: Mar. 1, 2021
To: Aug. 31, 2021
Net income (thousand yen)Amount not available to common unitholders (thousand yen)
Net income attributable to common investment units(thousand yen)
Average number of investment units during period (units)

6th fiscal period
From: Sep. 1, 2021
To: Feb. 28, 2022

1,014,021

1,391,360--

1,014,021

1,391,360

356,800

466,286(Notes on Significant Subsequent Events)
Not applicable.
(7) Supplementary Schedules
1) Schedule of Securities
a. Shares
Not applicable.
b. Securities other than shares
Not applicable.
2) Status of Contract Amounts, Etc. and Fair Value of Derivative Transactions and Forward Exchange Transactions
Not applicable.
3) Schedule of Assets Related to Real Estate

Type of asset

Buildings

169,301

9,967-

179,269

18,8493,647

160,419

Structures

544

-

-

544

39

13

504

2,457,766--

2,457,766--

2,457,766

Buildings in trust

14,340,970

4,367,539-

18,708,509

1,291,738

299,631

17,416,771(Note)

23,83247,339-71,171

2,476

1,041

68,695(Note)

11,302--

11,302

1,131

567

10,17028,2391,637-

29,876

7,822

2,095

22,054(Note)

Land in trust

56,132,575

21,301,273-

77,433,848--

77,433,848(Note)

Construction inprogress in trust

281,344

16,466265,138

32,673--32,673(Note)

Subtotal

73,445,876

25,744,223

265,138

98,924,962

1,322,058

306,997

97,602,903

9,400

-

-

9,400

5,506

940

3,893

9,400

-

-

9,400

5,506

940

3,893

73,455,276

25,744,223

265,138

98,934,362

1,327,564

307,937

97,606,797

SoftwareSubtotal
Total(Note)(Note)

Land
Structures intrust
Property, Machinery andplant and equipment inequipment trust
Tools, furnitureand fixtures intrust

Intangible
assets

Accumulated depreciation
Balance
Net balanceor
Increase
Decrease
BalanceAmountat beginning ofat end ofduring period during period at end of period accumulated during period
Remarks
periodperiod(thousand yen) (thousand yen) (thousand yen) amortization (thousand(thousand yen)(thousandyen)(thousand
yen)
yen)

The increase during period is mainly attributable to new property acquisition of 2 properties and additional acquisition of 2 properties (total of 4
properties: 25,653,909 thousand yen <including expenses incidental to the acquisition>).

4) Schedule of Other Specified Assets
Not applicable.
5) Schedule of Investment Corporation Bonds
Not applicable.

- 38 -

6) Schedule of Loans
Category

ShorttermloansLongtermloans

LenderMizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
SubtotalMizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedShinsei Bank, Limited
Resona Bank, Limited
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedShinsei Bank, Limited
Resona Bank, Limited
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedShinsei Bank, Limited
Resona Bank, Limited
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedShinsei Bank, Limited
Resona Bank, Limited
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedShinsei Bank, Limited
Resona Bank, Limited

Balance atIncrease
Decrease Balance at end
Average
beginning of
Maturity date Use ofduring period during periodinterest rateof period
period(Note 2)
funds
(thousand yen) (thousand yen) (thousand yen) (Note 1)(thousand yen)
260,000
260,000
0.22912%
Aug. 31,(floating(Note 3)2022
140,000
140,000
interest rate)
400,000
400,000
0.23077%(floating(Note 3)200,000
200,000
interest rate)
1,000,000
600,000
400,000
1,574,000
1,574,000
1,084,000--

1,084,000

929,000--

929,000

593,000--

593,000

542,000--

542,000

439,000
439,000
972,000--

439,000
439,000
972,000

716,000--

716,000

614,000--

614,000

392,000--

392,000

358,000--

358,000

324,000
324,000
856,000--

324,000
324,000
856,000

639,000--

639,000

548,000--

548,000

350,000--

350,000

319,000--

319,000

294,000
294,000
2,250,000--

294,000
294,000
2,250,000

1,500,000--

1,500,000

620,000--

620,000

550,000--

550,000

490,000
490,000
950,000--

490,000
490,000
950,000

800,000--

800,000

2,000,000--

2,000,000

620,000--

620,000

550,000--

550,000

490,000
490,000--

490,000
490,000- 39 -

Remarks
Unsecured/
Nonguaranteed
Unsecured/
Nonguaranteed

0.36969%(fixed interest
rate)

Mar. 12,2022(Note 3)

Unsecured/
Nonguaranteed

0.42346%(fixed interest
rate)

Mar. 12,2023(Note 3)

Unsecured/
Nonguaranteed

0.49096%(fixed interest
rate)

Mar. 12,2024(Note 3)

Unsecured/
Nonguaranteed

0.25747%(floatinginterest rate)

Sep. 3,2022(Note 3)

Unsecured/
Nonguaranteed

0.36200%(fixed interest
rate)

Sep. 3,2023(Note 3)

Unsecured/
NonguaranteedCategory

LenderMizuho Bank, Ltd.

AverageMaturity dateinterest rate
(Note 2)
(Note 1)

Use offunds

Remarks

Sep. 12,2024(Note 4)

Unsecured/
Nonguaranteed

0.23545%(floatinginterest rate)

Oct. 1,
2021(Note 3)

Unsecured/
Nonguaranteed

Mar. 12,2025(Note 4)

Unsecured/
Nonguaranteed(Note 3)

Unsecured/
Nonguaranteed(Note 3)

Unsecured/
Nonguaranteed

1,167,000--

1,167,000

832,000--

832,000

713,000--

713,000

456,000--

0.32923%
456,000 (fixed interest
rate)

416,000--

416,000

Shinsei Bank, Limited

358,000--

358,000

Resona Bank, Limited

358,000--

358,000

Mizuho Bank, Ltd.

4,300,000-

4,300,000-

Mizuho Bank, Ltd.

1,331,000--

1,331,000

929,000--

929,000

796,000--

796,000

509,000--

0.36978%
509,000 (fixed interest
rate)

465,000--

465,000

Shinsei Bank, Limited

385,000--

385,000

Resona Bank, Limited

385,000--

385,000-

1,550,000-

1,550,000-

1,000,000-

1,000,000-

700,000-

700,000-

600,000-

600,000-

500,000-

Shinsei Bank, Limited-

500,000-

0.29655%
500,000 (fixed interest Sep. 2, 2025
rate)
500,000

Resona Bank, Limited-

400,000-

400,000

THE NISHI-NIPPON CITY BANK,
LTD.

-

500,000-

500,000

Kansai Mirai Bank, Limited-

300,000-

300,000

The Chiba Bank, Ltd.

-

150,000-

150,000

Mizuho Bank, Ltd.

-

750,000-

750,000-

700,000-

700,000-

700,000-

700,000-

200,000-

200,000-

500,000-

500,000

Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedMizuho Bank, Ltd.
Longterm
loans

Balance atIncrease
Decrease
Balance at
beginning ofduring period during period end of period
period(thousand(thousand(thousand(thousand
yen)
yen)
yen)
yen)

Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedShinsei Bank, Limited-

500,000-

0.35542%(fixed interest Sep. 2, 2026
500,000
rate)

Resona Bank, Limited-

400,000-

400,000

Aozora Bank, Ltd.

-1,500,000-

1,500,000

THE NISHI-NIPPON CITY BANK,
LTD.

-

500,000-

500,000

Kansai Mirai Bank, Limited-

300,000-

300,000

The Chiba Bank, Ltd.

-

150,000-

150,000- 40 -

Category

LenderMizuho Bank, Ltd.

Longterm
loans

Balance at
beginning of
period(thousandyen)

Increase
Decrease
Balance atduring period during period end of period(thousand(thousand(thousand
yen)
yen)
yen)
-

1,100,000-

1,100,000-

900,000-

900,000-

700,000-

700,000-

300,000-

300,000-

300,000-

300,000

Shinsei Bank, Limited-

300,000-

300,000

Resona Bank, Limited-

200,000-

200,000

Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
Limited

Aozora Bank, Ltd.
Subtotal
Total-

500,000-

500,000

37,800,000

16,700,000

4,300,000

50,200,000

37,800,000

17,700,000

4,900,000

50,600,000

AverageMaturity dateinterest rate
(Note 2)
(Note 1)

Use offunds

Remarks

0.38044%(fixed interest Apr. 1, 2026
rate)

(Note 4)

Unsecured/
Nonguaranteed(Note 1) The average interest rate is a weighted-average figure during the fiscal period and is rounded to five decimal places.
(Note 2) If the maturity date is not a business day, the immediately following business day shall be the maturity date.
(Note 3) These funds are used for acquiring real estate or real estate trust beneficiary rights and accompanying expenses.
(Note 4) The funds are used to repay existing loans.
(Note 5) The total amounts of long-term loans to be repaid for each year within five years after the date of the balance sheet are as follows:(Unit: thousand yen)
Due within 1 year
Long-term loans

11,500,000

Due after 1 to 2 years Due after 2 to 3 years Due after 3 to 4 years Due after 4 to 5 years
9,600,000

7,600,000- 41 -

11,000,000

10,500,000-