8th Fiscal Period
Semi-Annual Reportfrom September 1, 2022 to February 28, 2023

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 REAL ESTATE
Inc. (“SANKEI REAL ESTATE”).
Having settled the 8th fiscal period ended February 2023, 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 and cooperation.
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 inwhich we allocate a certain percentage of investments, with an aim to build a strong portfolio that features bothstability of earnings and growth potential. Sub assets are what we collectively call the asset types that possesscharacteristics different from “office buildings” and contribute to the stability of the portfolio revenue. Under thestrong support of The Sankei Building Co., Ltd, our sponsor, we are poised to build a high-quality portfolio of
properties.
In the 8th fiscal period ended February 2023, while operating revenue and operating income decreased from theprevious period mainly attributable to a cancellation by a major tenant operating revenue exceeded the forecast
made at the beginning of the period. We decided to distribute 2,305 yen per unit (up 2.9% from the forecast) for
the 8th fiscal period, up 66 yen compared with the forecast made at the beginning of the period.
As for forecast distribution per unit, taking into account the change in tenants of management assets, the pricehike in electricity rates and other factors, and our plan to implement measures to stabilize distribution per unit
with the use of unrealized gain of the portfolio, we expect figures of 2,377 yen, up 3.1% from the 8th fiscal period,
for the 9th fiscal period ending August 2023 and 2,050 yen, down 13.8% from the 9th fiscal period, for the 10th
period ending February 2024. However, please note that the forecast distribution for the 10th fiscal period ending
February 2024 does not factor in every aspect of the revival plan, as we are eagerly working toward theimplementation of the revival plan for the purpose of resolving imminent risks, including cooperation withsponsors.
Although the Japanese economy continued to be affected by COVID-19, movement toward normalization of theeconomy progressed, and a new normal assuming living with COVID-19 is becoming established. Meanwhile,
expansion of demand due to overseas economic recovery, a rise in prices backed by the invasion of Ukraine by
Russia, high interest rates and fluctuations in foreign exchange rates brought about the first rise in prices in Japanin decades. In addition, conditions remain uncertain such as the possibility of COVID-19 infection trends, outcomesof the prolonged invasion of Ukraine and the success or failure of overseas monetary policy being factors in the
supply of goods being restricted again or pushing down the economy. While working to discern the trends of theeconomy and the financial 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 sincerely apologize to you, our unitholders, for our performance falling short of expectations, but are
determined to make a recovery in performance. We ask you to extend to us your continued consideration andsupport of our operations for many years.
Yuichi Ota
Executive Director, SANKEI REAL ESTATE Inc.
President and Chief Executive Officer, 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
Fiscal period
Closing of accounts
Operating revenue[Operating revenue from real estate rent
business]
Operating expenses[Operating expenses from real estate
rent business]
Operating income
Ordinary income
Net income
Unitholders’ capital (net) (Note 4)
Total number of investment units issued andoutstanding
Net assets[Period-on-period change]
Total assets[Period-on-period change]
Total interest-bearing liabilities
Net assets per unit (Note 3)
Net income per unit (Note 2)
Total distribution
Distribution per unit
[Distribution of net income per unit][Distribution in excess of net income perunit]
Ratio of ordinary income to total assets(Note 3)
Annualized
Return on equity (Note 3)
Annualized
Equity ratio (Note 3)[Period-on-period change]
Payout ratio (Note 3)[Other reference information]
Days of operation
Number of investment properties at end of
periodDepreciation
Capital expenditures
Leasing NOI (Net Operating Income) (Note 3)
FFO (Funds from Operation) (Note 3)
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)4th fiscal

5th fiscal

6th fiscal

7th fiscal

8th fiscalddFebruary d2021 August 2021
February d2022 August 2022
February d2023
million yen
2,147
2,176
2,778
3,028
2,891
million yen[2,147][2,176][2,778][3,028]million yen

1,029

1,034

1,237

1,397

[2,891]
1,648

million yen

[790]

[793]

[972]

[1,076][1,338]million yen
million yen
million yen
million yen

1,118
1,017
1,016
36,540

1,141
1,014
1,014
36,540

1,540
1,392
1,391
49,435

1,630
1,476
1,475
49,435

1,243
1,077
1,076
49,435

units356,800

356,800

467,099

467,099

467,099

million yen%
million yen%
million yenyenyen
million yen
yenyen

37,557[0.3]
79,482[4.3]
37,800105,262
2,849
1,016
2,849
[2,849]37,555[(0.0)]
79,848[0.5]
37,800105,255
2,841
1,021
2,862
[2,842]50,827[35.3]
106,523[33.4]
50,600108,814
2,983
1,391
2,979
[2,979]50,910[0.2]
106,553[0.0]
50,200108,993
3,158
1,475
3,158
[3,158]50,512[(0.8)]
105,828[(0.7)]
50,200108,140
2,304
1,076
2,305
[2,305]

yen

[－]

[20]

[－]

[－]

[－]

%

1.3

1.3

1.5

1.4

1.0

%
%
%
%
%
%

[2.6]
2.7
[5.4]
47.3
[(1.8)]
100.0

[2.5]
2.7
[5.4]
47.0
[(0.3)]
100.0

[3.0]
3.1
[6.3]
47.7
[0.7]
100.0

[2.7]
2.9
[5.8]
47.8
[0.1]
100.0

[2.0]
2.1
[4.3]
47.7
[(0.0)]
100.0

days

181

184

181

184

181

properties

12

12

14

14

14

million yen
million yen
million yen
million yen
yen

227
42
1,585
1,243
3,485

228
57
1,610
1,242
3,482

306
73
2,112
1,698
3,635

309
83
2,260
1,785
3,821

296
212
1,849
1,372
2,938

%

47.6

47.3

47.5

47.1

47.4

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 (4th fiscal period: 356,800 units; 5th fiscal
period: 356,800 units; 6th fiscal period: 466,286 units; 7th fiscal period: 467,099 units; 8th fiscal period: 467,099 units).
The indicators are calculated by using the following formulas.
Net assets per unit

Net assets ÷ total number of investment units issued and outstanding

Ratio of ordinary income to total assets

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

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 6th fiscal period is calculated by the following formula, as the number 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 rent business - operating expenses from real estate rent business +depreciation
Net income + depreciation - gain or loss on sale of real estate

Payout ratio
Rent NOI (Net Operating Income)FFO (Funds from Operation)
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
Balance of interest-bearing liabilities at end of period / total assets at end of period × 100(Note 4) The amount obtained by subtracting the deduction from unitholders’ capital from unitholders’ capital.
(Note 5) 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).
As of the last day of the fiscal period under review (February 28, 2023), the total number of investment units issued and outstanding was 467,099 units andunitholders’ capital (net) was 49,435 million yen.

2) Management Environment
In the fiscal period under review (fiscal period ended February 28, 2023), although the Japanese economy continued to be affected by COVID-19, movement
toward normalization of the economy progressed, and a new normal assuming living with COVID-19 is becoming established. Meanwhile, expansion ofdemand due to overseas economic recovery, a rise in prices backed by the invasion of Ukraine by Russia, high interest rates and fluctuations in foreign exchange
rates brought about the first rise in prices in Japan in decades. In addition, conditions remain uncertain such as the possibility of COVID-19 infection trends,
outcomes of the prolonged invasion of Ukraine and the success or failure of overseas monetary policy being factors in the supply of goods being restrictedagain or pushing down the 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.), andcases of decisions to relocate being withheld or taking time have been seen. The vacancy rate remained the same or continued to rise while rents declined
slightly or remained the same in Tokyo, Osaka and Fukuoka where SANKEI REAL ESTATE’s portfolio assets are located. With regard to the hotel market in which
SANKEI REAL ESTATE invests as sub assets, the total number of guests and room occupancy rates are on a path of steady recovery according to the Overnight
Travel Statistics Survey by the Japan Tourism Agency, and although they remain below its peak, inbound demand is expected to further expand.

3) Management Performance
SANKEI REAL ESTATE did not acquire or sell any assets in the fiscal period under review. The portfolio of SANKEI REAL ESTATE as of the end of the fiscal period
under review consisted of 14 properties with an asset size (total acquisition price (Note 1)) of 96,625 million yen, the same as that in the previous fiscal period.
The main factor in management performance as of the last day of the fiscal period under review was a cancellation of a major tenant, and the occupancy
rate (Note 2) of the 14 portfolio properties stood at 93.4%, and operating revenue from real estate rent business was 2,891 million yen, 4.5% lower than thatat the end of the previous fiscal period. The appraisal value as of the last day of the fiscal period under review was 104,232 million yen.
SANKEI REAL ESTATE has sought to improve satisfaction through reinforcement and enhancement of relations with existing tenants, aiming at expansion ofrevenue 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 condition of the
COVID-19 pandemic and trends of the rental market. We recognize the filling of vacancies caused by a cancellation by a major tenant in some assets undermanagement as the most important issue and are working ardently on leasing activities. In addition, 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 continued to decrease compared with when the first state of emergency was declared in April 2020, and the impact onmanagement performance in the fiscal period under review is minimal because the assets under management mainly have office tenants. In addition, thetwo hotel properties held by SANKEI REAL ESTATE (Hotel Intergate Tokyo Kyobashi and Hotel Intergate Hiroshima) finally had guest room occupancy rates
increase due to the recovery of inbound demand, and although they were subject to the impact associated with COVID-19, the content of contracts with fixed
rent based on the current contract also contributed to the stability of portfolio revenue for rent business revenue in the fiscal period under review.
SANKEI REAL ESTATE, along with the Asset Management Company, has continued to take measures to conduct management in the fiscal period underreview based on the policy with consideration for ESG, meaning the Environment, Social and Governance, for the purpose of the sustainability of society andincreasing the medium- to long-term unitholder value based on the “Sustainability Policy” in the Asset Management Company’s management guidelines.
SANKEI REAL ESTATE reacquired DBJ Green Building certification for two offices (S-GATE NIHONBASHI-HONCHO and S-GATE AKIHABARA) in September
2022. It also acquired 2 Star and Green Star ratings in October 2022 in the GRESB Real Estate Assessment. In addition, it acquired the CASBEE S rank assessment
for Shinagawa Seaside TS Tower in April 2023.
Furthermore, in March 2023, the Asset Management Company expressed its support for the recommendations of the Task Force on Climate-related
Financial Disclosures (“TCFD”) and joined the TCFD Consortium, a group of domestic companies that supports the TCFD recommendations.

-4-(Note 1)(Note 2)“Acquisition price” is the sale and purchase price of each real estate and trust beneficiary right stated in each sale and purchase agreement for the acquired assets, rounded down to thenearest 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.
“Occupancy rate” is the ratio of total leased area to total leasable area, rounded to one decimal place. Moreover, for total leasable area and total leased area, each total is calculated basedon the area corresponding to SANKEI REAL ESTATE’s ownership interest in each portfolio asset.

4) Overview of Fund Procurement
In the fiscal period under review, 5,900 million yen was borrowed from Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Mizuho Trust & Banking
Co., Ltd., Sumitomo Mitsui Trust Bank, Limited, Shinsei Bank, Limited (now SBI Shinsei Bank, Limited), and Resona Bank, Limited through a loan syndicate with
Mizuho Bank, Ltd. and Sumitomo Mitsui Banking Corporation as the arrangers on September 5, 2022, to repay long-term loans of 5,900 million yen due forrepayment on September 5, 2022. The loan was made with a period of 4.5 years and fixed interest rate, thereby promoting extension of the average time tomaturity, making the ratio of fixed-rate debt 100%, and staggering of maturities of interest-bearing liabilities.
As a result, as of the end of the fiscal period under review, the balance of loans outstanding was 50,200 million yen and the ratio of interest-bearing liabilities
to total assets (hereinafter, “LTV ratio”) was 47.4%.

5) Overview of Business Performance and Distribution
As a result of the management described above, business performance in the fiscal period under review was operating revenue of 2,891 million yen, operating
income of 1,243 million yen, ordinary income of 1,077 million yen, and net income of 1,076 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; hereinafter the “Special
Measures Taxation Act”)). For the fiscal period under review, the decision was made to distribute 1,076,663,195 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 2,305 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, 2023) are as follows:

Date
Nov. 19, 2018
Mar. 11, 2019
Apr. 10, 2019
Sep. 2, 2019
Sep. 26, 2019
Sep. 1, 2021
Sep. 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 acquisition of 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 acquisition of
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 acquisition of
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 distributioncommenced 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:(Note)

Fiscal period

4th fiscal period

5th fiscal period

6th fiscal period

7th fiscal period

8th fiscal period

Closing of accounts

February 2021

August 2021

February 2022

August 2022

February 2023

Highest (yen)117,400

135,200

131,300

111,900

99,700

Lowest (yen)90,100108,300

107,400

93,30086,400SANKEI 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 Special Measures Taxation Act). As a result, thedistribution per unit was 2,305 yen.
Fiscal period

4th fiscal periodBusiness period

From Sep. 1, 2020 From Mar. 1, 2021 From Sep. 1, 2021 From Mar. 1, 2022 From Sep. 1, 2022
to Feb. 28, 2021
to Aug. 31, 2021
to Feb. 28, 2022
to Aug. 31, 2022
to Feb. 28, 2023

8th fiscal period

Retained earnings(thousand yen)

210

207

80

178

141

Total cash distributions(thousand yen)

1,016,523

1,021,161

1,391,487

1,475,098

1,076,663(yen)(thousand yen)[Distribution of net income per unit](yen)

1,391,567

7th fiscal period(thousand yen)

[Total distribution of earnings]

1,014,232

6th fiscal period

Total unappropriated retained earnings[Distribution per unit]

1,016,734

5th fiscal period

1,475,277

1,076,805[2,849][2,862][2,979][3,158][2,305]

1,016,523

1,014,025

1,391,487

1,475,098

1,076,663[2,849][2,842][2,979][3,158][2,305][Total contribution refund](thousand yen)

－

7,136

－

－

－

[Contribution refund per unit]

(yen)

[－]

[20]

[－]

[－]

[－]

(thousand yen)

－

－

－

－

－

(yen)

[－]

[－]

[－]

[－]

[－]

(thousand yen)

－

7,136

－

－

－

(yen)

[－]

[20]

[－]

[－]

[－]

Of the total contribution refund, total
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, total
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
While the economy is expected to recover as a new normal assuming living with COVID-19 comes about, the environment will likely continue to be one inwhich downside risks to the Japanese and overseas economies brought about by rising prices starting in Europe and the U.S. triggered by factors such as animbalance in supply and demand amid global economic recovery and the prolongation of Russia’s invasion of Ukraine, rising interest rates and fluctuation in
exchange rates, and the impact on financial and capital markets warrant close attention.
In the office building market, vacancy rates have risen and rents have continued to fall or remain the same. While the normalization of social and economic
activities progresses as the impact of COVID-19 is alleviated, it is necessary to monitor future trends in office demand due to ongoing moves to reduce fixed
expenses (rent payments, etc.) accompanying changes in work styles and downside risk to economies. With regard to the assets held by SANKEI REAL ESTATE,
there are concerns about progress in consolidation of locations and reduction of office space due to the impact of increased telecommuting such as working
from home and the intentions to reduce fixed expenses (rent payments, etc.). Although a large volume of new supply is expected especially in central Tokyoin 2023, it has not had a significant impact on SANKEI REAL ESTATE’s assets at this point in time, but trends in the office building market will continue to bemonitored. Furthermore, with regard to the fuel procurement costs that are a cause of rising utilities expenses, relationships with tenants will be further
reinforced and consultations and responses will be continued as required, while closely monitoring tenants’ business performance, trends, etc.
In terms of the hotel market, domestic travelers and business travelers are expected to increase with the recovery in social and economic activities. A rapid
inflow has been recorded concerning the acceptance of foreign tourists since restrictions were lifted last October, and although conditions remain below thepeak level, further expansion is expected. While a moderate operating environment is foreseen for also the two hotel properties held by SANKEI REAL ESTATE,
continued stable revenue 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-termbuilding lease agreement.

-7-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.

2) Internal Growth Strategy
SANKEI REAL ESTATE aims for steady internal growth through reinforcement of the relations with existing tenants and improvement in tenant satisfaction.
Specifically, we will attempt to raise rents upon contract renewal if there is a significant deviation from market rent and continue to implement strategicleasing such as activities to extend the cancellation notification period from tenants and disperse end dates of rental contracts from the viewpoint oftermination risk for properties where the end dates of multiple tenants are the same. Furthermore, we will continue to take proactive measures to improvetenant satisfaction such as improving the quality of hygiene and planned implementation of maintenance and repairs.
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 relations 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 conducted in an agile manner with due consideration to investment unit dilution while 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-

(Reference Information)(A) Borrowing of Funds
SANKEI REAL ESTATE conducted the following loans on March 30, 2023, to use as part of the funds for acquisition and incidental expenses upon acquisition of
the real estate trust beneficiary rights of two properties as described in “(Reference Information) (B) Acquisition of Assets” below.
Category

LenderShort-term
Mizuho Bank, Ltd.
loans
(Note)

Loan amount(million yen)
6,800

Interest rate (Note)

Maturity date

Base rate (JBA 1-month Japanese Yen
TIBOR) + 0.35%

Repayment
methodRemarks

Lump-sum
Unsecured/Mar. 30, 2024 repayment at
Non-guaranteedmaturity

Base rate will be: JBA Japanese Yen TIBOR announced by JBA TIBOR Administration for the interest calculation period as of two business days prior to the immediately preceding interest payment
date (the drawdown date in the case of the first interest calculation period). For the JBA Japanese Yen TIBOR, please check the website of JBA TIBOR Administration(https://www.jbatibor.or.jp/english/rate/).

Furthermore, the 3,700 million yen of long-term loans due for repayment on March 13, 2023, was refinanced on the same day as follows.
Category

LenderMizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Long-term Development Bank of Japan Inc.
loans
Mizuho Trust & Banking Co., Ltd.
Sumitomo Mitsui Trust Bank, Limited
SBI Shinsei Bank, Limited
Resona Bank, Limited

Loan amount(million yen)Interest rate

3,700

1.02763%

Maturity date

Repayment
methodRemarks

Lump-sum
Unsecured/Sep. 13, 2027 repayment at
Non-guaranteedmaturity(B) Acquisition of Assets
SANKEI REAL ESTATE conducted the following acquisition of real estate trust beneficiary rights of two properties (total acquisition price: 6,642 million yen) on
March 31, 2023.
Acquisition price
Property
Asset type
Property nameLocation
Acquisition asset(million yen)SellerAcquisition datenumber(Note)
Officebuildings

Sub assets

A-10

B-3

S-GATE AKASAKA(additional acquisition)

SANKEILOGI Settsu

Total (2 properties)(Note)

Minato-ku,
TokyoReal estate trust
beneficiary rightSettsu-shi, Osaka

Real estate trust
beneficiary right

－

－

1,400

i. 3,669.4
ii. 1,572.6
Total 5,242

6,642

The Sankei Building Co., Ltd.

Mar. 31, 2023

i. The Sankei Building Co.,
Ltd.
(70%)
ii. JA Mitsui Leasing
Tatemono Co., Ltd.
(30%)

Mar. 31, 2023－－

“Acquisition price” is the sale and purchase price of each trust beneficiary right stated in the trust beneficiary right transfer 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.
Furthermore, the acquisition price for S-GATE AKASAKA is the figure equivalent to the 20% quasi co-ownership interest additionally acquired by SANKEI REAL ESTATE. As a result of the additional
acquisition, SANKEI REAL ESTATE holds 100% of the trust beneficiary right in S-GATE AKASAKA.

-9-

2. Overview of the Investment Corporation(1) Summary of Unitholders’ Capital
4th fiscal period

5th fiscal period

6th fiscal period

7th fiscal period

8th fiscal period(units)

10,000,000

10,000,000

10,000,000

10,000,000

10,000,000(units)356,800

356,800

467,099

467,099

467,099(million yen)

36,54036,54049,43549,43549,435(persons)

7,682

7,328

10,511

14,345

14,469(as of Feb. 28, 2021)

Total number of investment
units authorized
Total number of investment
units issued and outstanding
Unitholders’ capital (net)(Note)
Number of unitholders(Note)(as of Aug. 31, 2021)(as of Feb. 28, 2022)(as of Aug. 31, 2022)(as of Feb. 28, 2023)

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, 2023.
Number of investment units
held(units)Name

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

Custody Bank of Japan, Ltd. (Trust Account)

108,798

23.29

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

64,638

13.83

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

20,722

4.43

The Sankei Building Co., Ltd.

17,4793.74

Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.

8,894

1.90

JP MORGAN CHASE BANK 385771

6,316

1.35

The Bank of Yokohama, Ltd.

6,107

1.30

Japan Securities Finance Co., Ltd.

4,772

1.02

SMBC Nikko Securities Inc.

4,345

0.93

UEDA YAGI TANSHI Co., Ltd.

3,663

0.78

245,734

52.60

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, 2023.

Position
Executive
Director

Name
Yuichi Ota
Susumu Motoyoshi

Major concurrent assignments
President and Chief Executive Officer, Sankei Building AssetManagement Co., Ltd.
Representative, Motoyoshi Total Accounting Office
Representative Partner, Motoyoshi Research Institute LLC

Total remuneration foreach position during theperiod under review(thousand yen)－
1,800

Joint Representative Lawyer, Utsunomiya Shimizu & Haruki

Supervisory
Director
Kohmei Shimizu

Adjunct Professor, Hosei University Law School
Independent Director, ROBOT PAYMENT INC.

1,800

Independent Director, EDGE Technology, Inc.
Independent
Auditor(Note 1)

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

Ernst & Young
ShinNihon LLC－

12,300None 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 thoseand 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 Independent Auditor is the amount payable to it for audits pertaining to the fiscal period under review.
The dismissal of the Independent Auditor shall be considered in accordance with the provisions of the Investment Trusts Act. The decision to not reappoint the
Independent Auditor shall be studied by SANKEI REAL ESTATE’s Board of Directors upon comprehensively considering the audit quality, audit fee and other various
conditions.
The remuneration for independent auditors includes those for the audit of financial statements in English.

- 10 -

(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)
Executive directors and supervisory
The insurance contract contains a rider covering executive directors and supervisory directors, thedirectors
insurance 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.

(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, 2023.
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- 11 -

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

Type ofasset

Geographic area
(Note 1)

Asset type

Total amountheld(million yen)
(Note 2)

Greater Tokyo, Osaka City and Nagoya
City
Cities designated by government
ordinance (excluding above), corecities and major regional cities
Greater Tokyo, Osaka City and Nagoya
City
Cities designated by government
ordinance (excluding above), corecities and major regional cities
Greater Tokyo, Osaka City and Nagoya
City
Cities designated by government
ordinance (excluding above), corecities and major regional cities
Greater Tokyo, Osaka City and Nagoya
City
Cities designated by government
ordinance (excluding above), corecities and major regional cities
Greater Tokyo, Osaka City and Nagoya
City
Cities designated by government
ordinance (excluding above), corecities and major regional cities

8th fiscal period(as of Feb. 28, 2023)

As a percentage of
total assets(%) (Note 3)

Total amountheld(million yen)
(Note 2)

As a percentage of
total assets(%) (Note 3)

2,618

2.5

2,615

2.5

－

－

－

－

－

－

－

－

－

－

－

－

71,70967.3

71,67767.7

10,193

9.6

10,197

9.6

8,924

8.4

8,897

8.4

3,898

3.7

3,872

3.7

8,924

8.4

8,897

8.4

3,898

3.7

3,872

3.7

Subtotal

97,343

91.4

97,25991.9

Deposits and other assets

9,210

8.6

8,568

8.1

Total assets

106,553

100.0

105,828

100.0

Office buildings
Real estate
Sub assets

Office buildings

Real estatein trust

7th fiscal period(as of Aug. 31, 2022)

Sub assets

Hotels(Note 1)“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.
(Note 2) “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.
(Note 3) “As a percentage of total assets” is rounded to one decimal place.

(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, 2023.
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(Notes 4 and 5)

21,130Not disclosed(Note 6)

Not disclosed(Note 6)76.0

Not disclosed(Note 6)

Office buildings

BREEZÉ TOWER (Note 4)

12,995

12,146.02

10,974.15

90.4

18.2

Office buildings
Office buildings

Property name

Hitachi Kyusyu Building

10,197

26,513.33

26,513.33

100.0

Not disclosed(Note 6)

Hotel Intergate Tokyo Kyobashi

8,897

6,006.53

6,006.53

100.0

7.2

HotelsS-GATE NIHONBASHI-HONCHO (Note 4)

6,653

3,171.83

3,171.83

100.0

5.9

Office buildings

Hibiya Sankei Building

6,064

3,439.61

3,439.61

100.0

6.9

Office buildings
Office buildings
Office buildings

S-GATE AKASAKA (Note 4)

5,631

2,646.48

2,646.48

100.0

Not disclosed(Note 6)

Omori Park Building

5,452

7,469.72

5,914.78

79.2

5.4

Hatchobori Sankei Building

5,003

5,594.90

5,594.90

100.0

6.2

Office buildings

Toyo Park Building

3,873

4,224.52

3,897.52

92.3

3.8

Office buildings

85,899Not disclosed(Note 6)

Not disclosed(Note 6)

92.2

88.5

－

Total

- 12 -

(Note 1)“Book value” is the depreciated book value for each portfolio asset as of February 28, 2023, rounded down to the nearest million yen. The same shall apply hereinafter.

(Note 2)

Figures for “total leasable area,” “total leased area” and “occupancy rate” are based on the data as of February 28, 2023. Furthermore, “total leasable area” is the area (excluding certain
incidental areas such as warehouses which are not the main asset type, signboards, parking lots, 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 certain incidental areas such as warehouses which are not the main asset
type, signboards, parking lots, etc.) stated in the lease agreement (excluding lease 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 areafor each portfolio asset, rounded to one decimal place. In addition, “occupancy rate” in the total column is the ratio of the sum total of total leased area to the sum total of total leasable areafor each portfolio asset, rounded to one decimal place. The same shall apply for occupancy rate hereinafter.

(Note 3)(Note 4)

“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-ownership interest(45% for “BREEZÉ TOWER,” 50% for “Shinagawa Seaside TS Tower” and 80% for “S-GATE AKASAKA”) held by SANKEI REAL ESTATE.

(Note 5)

An agreement has been reached with Sony Group Corporation for the termination of the contract for Shinagawa Seaside TS Tower with a termination date of March 31, 2023 (14 floors).

(Note 6)

Not disclosed because such contains information for which consent for disclosure has not been obtained from the tenant, relevant party, etc. or information from which confidential
information can be derived.

- 13 -

(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, 2023.
Property nameForm of ownership(Note 1)

Location

Tokyo Sankei Building (Note 3)

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

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)
Miyazakidai Garden OfficeHitachi Kyusyu Building

2,620

2,615

18,00012,995

7,750

6,653

2,710

2,028

6,620

6,064

5,490

5,003

3,920

3,873

19,45021,130

5,490

5,452

5,992

5,631

2,730

2,843

10,30010,197

9,040

8,897

4,120

3,872

104,232

97,259Real estate

S-GATE NIHONBASHI-HONCHO (Note 3) 1-9-1 Nihonbashi-Honcho, Chuo-ku, Tokyo
2-4-6 Higashi-Kanda, Chiyoda-ku, Tokyo

Book value(million yen)

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 trustbReal estatefi i trust
i ht

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

S-GATE AKIHABARA

Period-end
appraisal value(million yen)
(Note 2)

6-2-4 Akasaka, Minato-ku, Tokyo
2-6-10 Miyazaki, Miyamae-ku, Kawasaki-shi,
Kanagawa
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

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

Total(Note 1)
(Note 2)

(Note 3)

“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 name

Number oftenants(at end of
period)(Note 1)

7th fiscal period
From Mar. 1, 2022
to Aug. 31, 2022
Operatingrevenue from
Occupancy rate
Ratio to total
real estate rent
(at end ofrent businessbusiness
period)revenue(during period)(%)(%)(million yen)
(Note 2)

Number oftenants(at end of
period)(Note 1)

8th fiscal period
From Sep. 1, 2022
to Feb. 28, 2023
Operatingrevenue from Ratio to total
Occupancy rate
real estate rent rent business(at end of
business
revenueperiod)(during period)(%)(million yen)(%)
(Note 2)

Tokyo Sankei Building

49

99.5

57

1.9

47

99.5

59

2.0

BREEZÉ TOWER

36

96.3

553

18.3

36

90.4

526

18.2

S-GATE NIHONBASHI-HONCHO

3

100.0

161

5.3

2

100.0

171

5.9

S-GATE AKIHABARA

6

100.0

68

2.3

6

100.0

68

2.4

Hibiya Sankei Building

11

100.0

198

6.6

11

100.0

198

6.9

Hatchobori Sankei Building

10

100.0

175

5.8

10

100.0

178

6.2

7

92.3

103

3.4

7

92.3

Toyo Park Building
Shinagawa Seaside TS Tower(Note 3)
Omori Park Building

Not disclosed(Note 4)
10

66.3
100.0

S-GATE AKASAKA

2

100.0

Miyazakidai Garden Office

8

100.0

Hitachi Kyusyu Building

1

100.0

Not disclosed Not disclosed Not disclosed(Note 4)(Note 4)(Note 4)165

5.5

Not disclosed Not disclosed(Note 4)(Note 4)77

2.5

Not disclosed Not disclosed(Note 4)(Note 4)

8

76.0
79.2

2

100.0

8

100.0

1

100.0

108
Not disclosed(Note 4)157
Not disclosed(Note 4)86
Not disclosed(Note 4)3.8
Not disclosed(Note 4)5.4
Not disclosed(Note 4)3.0
Not disclosed(Note 4)

Hotel Intergate Tokyo Kyobashi

1

100.0

206

6.8

1

100.0

206

7.2

Hotel Intergate Hiroshima

1

100.0

118

3.9

1

100.0

118

4.1

94.2

3,028

100.0

93.4

2,891

100.0

Total

Not disclosed(Note 4)

- 14 -

Not disclosed(Note 4)

(Note 1)(Note 2)
(Note 3)(Note 4)

“Number of tenants” indicates the total number of tenants of the respective portfolio assets held as of February 28, 2023, based on the lease agreement of the relevant assets. When a 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 lease agreement amongsuch 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 rent business” 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 a termination date of March 31, 2023 (14 floors).
Not disclosed because such contains information for which consent for disclosure has not been obtained from the tenant, relevant party, etc. or information from which confidential information
can be derived.

(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.

- 15 -

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, 2023, 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)Amount of
Total amountpayment
already paid
during period

PurposeScheduled period

BREEZÉ TOWER(Kita-ku, Osaka-shi)

Update and maintenance of
air conditioner AHU parts

From: Mar. 1, 2023
To: Mar. 31, 2023

10

－

－

BREEZÉ TOWER(Kita-ku, Osaka-shi)

Replacement of tile carpet in
office common area

From: Mar. 1, 2023
To: Mar. 31, 2023

10

－

－

BREEZÉ TOWER(Kita-ku, Osaka-shi)

Update of blind system

From: Mar. 1, 2023
To: Mar. 31, 2023

17

－

－

BREEZÉ TOWER(Kita-ku, Osaka-shi)

Dividing work of exclusive
area on 17F

From: Mar. 1, 2023
To: Apr. 30, 2023

30

－

－

BREEZÉ TOWER(Kita-ku, Osaka-shi)

Conversion to LED lighting

From: Sep. 1, 2023
To: Sep. 30, 2023

35

－

－

BREEZÉ TOWER(Kita-ku, Osaka-shi)

Update of power receiving
and transforming facilities andequipment

From: Feb. 1, 2024
To: Feb. 29, 2024

10

－

－

BREEZÉ TOWER(Kita-ku, Osaka-shi)

Update of security facilities

From: Feb. 1, 2024
To: Feb. 29, 2024

13

－

－

BREEZÉ TOWER(Kita-ku, Osaka-shi)

Update and maintenance of
air-conditioning system

From: Feb. 1, 2024
To: Feb. 29, 2024

31

－

－

BREEZÉ TOWER(Kita-ku, Osaka-shi)

Update of blind system

From: Feb. 1, 2024
To: Feb. 29, 2024

67

－

－

Hibiya Sankei Building(Chiyoda-ku, Tokyo)

Replacement of SP pump

From: Nov. 1, 2023
To: Nov. 30, 2023

24

－

－

Hibiya Sankei Building(Chiyoda-ku, Tokyo)

Maintenance of mechanicalcar parking system

From: Jan. 1, 2024
To: Jan. 31, 2024

11

－

－

Shinagawa Seaside TS Tower(Shinagawa-ku, Tokyo)

Common area renewal work

From: Jun. 1, 2023
To: Jun. 30, 2023

120

－

－

Shinagawa Seaside TS Tower(Shinagawa-ku, Tokyo)

Repair of emergency
generator

From: Oct. 1, 2023
To: Oct. 31, 2023

16

－

－

Shinagawa Seaside TS Tower(Shinagawa-ku, Tokyo)

Update of emergency
broadcasting system

From: Feb. 1, 2024
To: Feb. 29, 2024

18

－

－

Omori Park Building(Ota-ku, Tokyo)

Update of battery facilities

From: Oct. 1, 2023
To: Oct. 31, 2023

16

－

－

Omori Park Building(Ota-ku, Tokyo)

Repair of individual airconditioning system

From: Dec. 1, 2023
To: Dec. 31, 2023

16

－

－

Miyazakidai Garden Office(Miyamae-ku, Kawasaki-shi)Toilet renovation work

From: Jan. 1, 2024
To: Jan. 31, 2024

11

－

－

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

From: Aug. 1, 2023
to Aug. 31, 2023

18

－

－

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

Vacuum Circuit Breaker (VCB)
update work

From: Nov. 1, 2023
To: Nov. 30, 2023

12

－

－

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

Update work on district
heating and cooling facilities

From: Jan. 1, 2024
To: Jan. 31, 2024

23

－

－

- 16 -

Total amount(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, 2023, are as follows: For the fiscal period under review, capital expenditures amounted to 212 million yen andrepair expenses separately charged to expenses amounted to 271 million yen for a combined total of 483 million yen of construction works implemented.
Name of real estate, etc.
(Location)

PurposeAmount of payment(million yen)

PeriodBREEZÉ TOWER(Kita-ku, Osaka-shi)

Conversion to LED lighting forleased space

From: Sep. 1, 2022
To: Oct. 31, 2022

16

BREEZÉ TOWER(Kita-ku, Osaka-shi)

Update of blind system

From: Sep. 1, 2022
To: Dec. 27, 2022

14

Shinagawa Seaside TS Tower(Shinagawa-ku, Tokyo)

Update of automatic fire
detection equipment

From: Sep. 1, 2022
To: Oct. 31, 2022

61

Omori Park Building(Ota-ku, Tokyo)

Repair of individual airconditioning system on 7F

From: Dec. 3, 2022
To: Jan. 5, 2023

16

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

From: Sep. 10, 2022
To: Oct. 8, 2022

10

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

From: Jan. 6, 2023
To: Feb. 8, 2023

10

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

Vacuum Circuit Breaker (VCB)
update work

From: Nov. 1, 2022
To: Feb. 13, 2023

11

Other

72

Total

212

(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.

Business period
Balance of reserve at beginningof period (thousand yen)
Provision of reserve during
period (thousand yen)
Reversal of reserve during
period (thousand yen)
Reserve carried forward(thousand yen)

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

7th fiscal period
From: Mar. 1, 2022
To: Aug. 31, 2022

8th fiscal period
From: Sep. 1, 2022
To: Feb. 28, 2023

217,842

175,880

209,678

262,349

303,132

59,29359,29385,56759,80159,801

101,255

25,49632,89519,01938,448

175,880

209,678

262,349

303,132

324,485- 17 -

5. Status of Expenses and Liabilities(1) Details of Expenses Related to Asset Management(Unit: thousand yen)Item

7th fiscal period
From: Mar. 1, 2022
To: Aug. 31, 2022

8th fiscal period
From: Sep.1, 2022
To: Feb. 28, 2023

Asset management fee

265,992

247,055

Asset custody fee

2,100

2,092

Administrative service fees

7,460

8,020

Remuneration for directors (and other officers)

3,600

3,600

Other expenses
Total

41,722

48,325

320,876

309,094(2) Status of Loans
The status of loans from respective financial institutions as of February 28, 2023, is as follows:

Category

Balance at
beginningof period(millionyen)
972

Balance at
end ofperiod(million
yen)
972

716

716

614

614

392

392

358

358

324

324

Resona Bank, Limited

324

324

Mizuho Bank, Ltd.

856

856

639

639

548

548

350

350

319

319

294

294

LenderDrawdown
date

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSBI Shinsei Bank, Limited(Note 5)

Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSBI Shinsei Bank, Limited
Long-term (Note 5)
Resona Bank, Limited
loans

Mar. 12,2019Mar. 12,2019

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSBI Shinsei Bank, Limited(Note 5)

Sep. 3,
2019

294

294

2,250

－

1,500

－

620

－

550

－

490

－

Resona Bank, Limited

490－

Mizuho Bank, Ltd.

950

950

800

800

2,000

2,000

620

620

550

550

490

490

490

490

Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSBI Shinsei Bank, Limited(Note 5)Resona Bank, Limited

Sep. 3,2019- 18 -

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

Repayment
methodUse offunds

Remarks

0.42346%(fixed interest
rate)

Mar. 12,2023

Lump-sum
repayment (Note 3)
at maturity

Unsecured/
Nonguaranteed

0.49096%(fixed interest
rate)

Mar. 12,2024

Lump-sum
repayment (Note 3)
at maturity

Unsecured/
Nonguaranteed

0.26727%(floatinginterest rate)

Sep. 3,2022

Lump-sum
repayment at (Note 3)
maturity

Unsecured/
Nonguaranteed

0.36200%(fixed interest
rate)

Sep. 3,2023

Lump-sum
repayment at (Note 3)
maturity

Unsecured/
NonguaranteedCategory

LenderDrawdown
date

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSBI Shinsei Bank, Limited(Note 5)Mar. 12,2020

Resona Bank, Limited
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSBI Shinsei Bank, Limited(Note 5)Mar. 12,
2021

Resona Bank, Limited

Balance at
beginningof period(million
yen)
1,167

Balance at
end ofperiod(million
yen)
1,167

832

832

713

713

456

456

416

416

358

358

358

358

1,331

1,331

929

929

796

796

509

509

465

465

385

385

385

385

1,550

1,550

1,000

1,000

700

700

600

600

500

500

500

500

Resona Bank, Limited

400

400

THE NISHI-NIPPON CITY BANK,
LTD.

500

500

Kansai Mirai Bank, Limited

300

300

The Chiba Bank, Ltd.

150

150

Mizuho Bank, Ltd.

750

750

700

700

700

700

200

200

500

500

500

500

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of Japan
Long-term Inc.
loans
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSBI Shinsei Bank, Limited(Note 5)

Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSBI Shinsei Bank, Limited(Note 5)Resona Bank, Limited

Sep. 2,
2021

Sep. 2,
2021

400

400

1,500

1,500

THE NISHI-NIPPON CITY BANK,
LTD.

500

500

Kansai Mirai Bank, Limited

300

300

The Chiba Bank, Ltd.

150

150

Aozora Bank, Ltd.

- 19 -

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

Repayment
methodUse offunds

Remarks

0.32923%(fixed interest
rate)

Sep. 12,2024

Lump-sum
repayment at (Note 4)
maturity

Unsecured/
Nonguaranteed

0.36978%(fixed interest
rate)

Mar. 12,2025

Lump-sum
repayment at (Note 4)
maturity

Unsecured/
Nonguaranteed

Sep. 2,2025

Lump-sum
repayment at (Note 3)
maturity

Unsecured/
Nonguaranteed

Sep. 2,2026

Lump-sum
repayment at (Note 3)
maturity

Unsecured/
Nonguaranteed

0.29655%(fixed interest
rate)

0.35542%(fixed interest
rate)Category

LenderDrawdown
date

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSBI Shinsei Bank, Limited(Note 5)

Balance at
beginningof period(million
yen)
1,100

Balance at
end ofperiod(million
yen)
1,100

900

900

700

700

300

300

300

300

300

300

Oct. 1,
2021

Resona Bank, Limited

200

200

Aozora Bank, Ltd.

500

500

Mizuho Bank, Ltd.

1,574

1,574

1,084

1,084

929

929

593

593

542

542

439

439

Resona Bank, Limited

439

439

Mizuho Bank, Ltd.

－

2,250

－

1,500

－

620

－

550

－

490

Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSBI Shinsei Bank, Limited(Note 5)Long-term Sumitomo Mitsui Banking
Corporation
loans
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSBI Shinsei Bank, Limited(Note 5)Mar. 14,2022

Mar. 14,2022

Sep. 5,2022

Resona Bank, Limited
Total(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)－490

50,20050,200

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

Repayment
methodUse offunds

Remarks

0.38044%(fixed interest
rate)

Apr. 1,2026

Lump-sum
repayment at (Note 4)
maturity

Unsecured/
Nonguaranteed

0.77500%(fixed interest
rate)

Mar. 14,2028

Lump-sum
repayment at (Note 4)
maturity

Unsecured/
Nonguaranteed

0.77500%(fixed interest
rate)

Mar. 14,2028

Lump-sum
repayment at (Note 4)
maturity

Unsecured/
Nonguaranteed

0.79285%(fixed interest
rate)

Mar. 5,2027

Lump-sum
repayment at (Note 4)
maturity

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; if such date falls in the next month, the immediately preceding 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.
Shinsei Bank, Limited changed its trade name to SBI Shinsei Bank, Limited on January 4, 2023. The new trade name is used for all instances in this table.

(3) Investment Corporation Bonds
Not applicable.

(4) Short-Term Investment Corporation Bonds
Not applicable.

(5) Investment Unit Acquisition Rights
Not applicable.

- 20 -

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.
Not applicable.

(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.
Not applicable.

(4) Transactions with Interested Parties, Etc.
1) Transaction Status
Not applicable.

2) Amount of Fees Paid, Etc.
Category

Total amount of fees
paid, etc. (A)Property management fees

38,607 thousand yen

Building management fees

Breakdown of transactions with interested parties, etc.
Paid party

Paid amount (B)Percentage of
total amount(B/A)

The Sankei Building Co., Ltd.

21,333 thousand yen

55.3%

The Sankei Building Management Co., Ltd.

11,753 thousand yen

30.4%

169,778 thousand yen The Sankei Building Management Co., Ltd. 127,763 thousand yen

75.3%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.

267,176 thousand yen (Repair expenses)

Sankei Bldg. Techno Co., Ltd.
Sankei Shimbun Co., Ltd.
Fuji Media Holdings, Inc.

76 thousand yen (Repair expenses)
1,135 thousand yen (Land rent)
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)
3,002 thousand yen (Rental revenue)(5) Transactions with the Asset Management Company regarding Concurrent Work Conducted by the AssetManagement Company
As of February 28, 2023, Sankei Building Asset Management Co., Ltd., the asset management company of SANKEI REAL ESTATE, concurrently conducts
investment advisory and agency business, type II financial instruments business and real estate brokerage under the Financial Instruments and Exchange Act,but has no such transactions with SANKEI REAL ESTATE.

- 21 -

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.

- 22 -

8. Other(1) Notices
1) General Meeting of Unitholders
The overview of the items approved at SANKEI REAL ESTATE’s Third General Meeting of Unitholders held on November 25, 2022 is as follows.

Item

Overview

Partial amendments to the articles ofincorporation

・The amendment stipulated in the Supplementary Provision No. 3 of the “Act on Arrangement of RelevantActs Incidental to Enforcement of the Act on Partial Amendment of the Companies Act” (Act No. 71 of2019) was enforced on September 1, 2022, and the system for electronic provision of reference materials
for the General Meeting of Unitholders was introduced as of the same day. Accordingly, the necessarychanges were made.
・With the introduction of the system for electronic provision, the articles of incorporation were amended
such that SANKEI REAL ESTATE may omit all or part of the matters to be provided electronically from thephysical document to be delivered to unitholders who have requested delivery of such document.
・ In relation to the introduction of the tax-exemption program for specified tax-exempt cumulative
investment contracts (new NISA), amendments was made as required to make distributions, etc. on
SANKEI REAL ESTATE investment units eligible for the tax-exemption program.
・In line with the revision to the Accounting Standard for Financial Instruments (ASBJ Statement No. 10)(including related newly enacted or revised accounting standards and guidance on implementation),amendments were made as required to asset valuation methods.

Appointment of Directors

Yuichi Ota was appointed as Executive Director as of November 25, 2022.

Appointment of One SubstituteExecutive Director
Appointment of Two Supervisory
Directors
Appointment of One SubstituteSupervisory Director

Atsushi Mukai was appointed as Substitute Executive Director as of November 25, 2022.
Susumu Motoyoshi and Kohmei Shimizu were appointed as Supervisory Directors as of November 25, 2022.
Kanae Fukushima was appointed as Substitute Supervisory Director as of November 25, 2022.

2) Board of Directors of the investment Corporation
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 for percentage
figures in this report.

- 23 -

1.

Financial Statements(1) Balance Sheet

AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
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

7th fiscal period(as of Aug. 31, 2022)- 27 -(Unit: thousand yen)
8th fiscal period(as of Feb. 28, 2023)

5,575,535
3,303,184
62,70271,80178
9,013,302

5,208,842
3,097,656
64,47862,7958,433,772

181,978(22,182)
159,795
544
(53)
490
2,457,766
18,769,170(1,592,660)
17,176,510
71,171(3,517)67,654
11,302(1,698)
9,603
49,525(11,769)
37,756
77,433,848
56,722
97,400,148

182,520(25,525)
156,995
544
(67)
476
2,457,766
18,955,810(1,879,113)
17,076,697
71,171(4,558)66,613
14,330(2,290)12,04071,817(16,419)
55,397
77,433,848
945
97,260,780

2,953
2,953

2,013
2,013

103,157
15
10,000113,173
97,516,274

103,557
12
10,000113,569
97,376,363

24,09924,099106,553,676

18,075
18,075
105,828,211

(Unit: thousand yen)
7th fiscal period(as of Aug. 31, 2022)
Liabilities
Current liabilities
Operating accounts payable
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- 28 -

8th fiscal period(as of Feb. 28, 2023)

244,965
9,600,000
308,770
44,831
926
171,838
447,828
6,036
10,825,198

347,1039,600,000
288,400
50,743855
38,660449,764
676
10,776,204

40,600,000
88,2374,129,413
44,817,651
55,642,849

40,600,000
88,166
3,851,485
44,539,651
55,315,856

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

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

1,475,277

1,076,805

1,475,277
50,910,827*1
50,910,827
106,553,676

1,076,805
50,512,354*150,512,354
105,828,211

(2) Statement of Income and Retained Earnings(Unit: thousand yen)
7th fiscal period
From: Mar. 1, 2022
To: Aug. 31, 2022

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
Reversal of distributions payable
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

- 29 -

8th fiscal period
From: Sep. 1, 2022
To: Feb. 28, 2023

2,516,558
511,493
3,028,051
1,076,927
265,992
2,100
7,460
3,600
41,722
1,397,803
1,630,247

*1
*1

*1

2,452,313
439,634
2,891,948
1,338,956
247,055
2,092
8,020
3,600
48,325
1,648,050
1,243,897

41
279
0
321

41
584
930
285
1,842

100,93147,4606,024
26
154,444
1,476,124
1,476,124
932
(5)
927
1,475,197
80
1,475,277

114,796
47,427
6,024
168,248
1,077,491
1,077,491
861
3
865
1,076,626
178
1,076,805

(3) Statement of Changes in Unitholders’ Equity
7th fiscal period (from March 1, 2022, to August 31, 2022)(Unit: thousand yen)
Unitholders’ equity
Surplus
Deduction
Unitholders’fromUnitholders’
Unappropriatedcapitalunitholders’ capital (net)retained earnings
capital(undisposed loss)
Balance at beginning of
periodChanges in items during
period49,442,685

Total net
assets1,391,567 1,391,567

50,827,117

50,827,117

Distributions of surplus(1,391,487) (1,391,487)(1,391,487)(1,391,487)

Net income

1,475,197 1,475,197

1,475,197

1,475,197

83,70983,70983,7091,475,277 1,475,277

50,910,827

50,910,827

Total changes in items
during period
Balance at end of period*149,442,685(7,136) 49,435,549

Total
surplusTotal
unitholders’equity--83,709(7,136) 49,435,549

8th fiscal period (from September 1, 2022, to February 28, 2023)(Unit: thousand yen)
Unitholders’ equity
Surplus
Deduction
Unitholders’fromUnitholders’
Unappropriatedcapitalunitholders’ capital (net)retained earnings
capital(undisposed loss)
Balance at beginning of
periodChanges in items during
period49,442,685

Total net
assets1,475,277 1,475,277

50,910,827

50,910,827

Distributions of surplus(1,475,098) (1,475,098)(1,475,098)(1,475,098)

Net income

1,076,626 1,076,626

1,076,626

1,076,626(398,472)(398,472)(398,472)(398,472)

1,076,805 1,076,805

50,512,354

50,512,354

Total changes in items
during period
Balance at end of period*149,442,685(7,136) 49,435,549

Total
surplusTotal
unitholders’equity--(7,136) 49,435,549- 30 -

(4) Statement of Cash Distributions(Unit: yen)
7th fiscal period
From: Mar. 1, 2022
To: Aug. 31, 2022

I.

Unappropriated retained earnings

8th fiscal period
From: Sep. 1, 2022
To: Feb. 28, 2023

1,475,277,574

1,076,805,124

1,475,098,642

1,076,663,195[Amount of distribution per unit][3,158][2,305]

III. Retained earnings carried forward

178,932

141,929

In accordance with the policy on
distribution specified in Article 36,
Paragraph 1 of SANKEI REAL ESTATE’s
articles of incorporation, the amount of
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. Based onsuch policy, the decision was made to
distribute 1,475,098,642 yen, which is thelargest integral multiple of the total
number of investment units issued andoutstanding (467,099 units) not in excess
of unappropriated retained earnings, as
distribution of earnings.
The distribution in excess of earnings
specified in Article 36, Paragraph 2 of
SANKEI REAL ESTATE’s articles ofincorporation will not be made.

In accordance with the policy on
distribution specified in Article 36,
Paragraph 1 of SANKEI REAL ESTATE’s
articles of incorporation, the amount of
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. Based onsuch policy, the decision was made to
distribute 1,076,663,195 yen, which is thelargest integral multiple of the total
number of investment units issued andoutstanding (467,099 units) not in excess
of unappropriated retained earnings, as
distribution of earnings.
The distribution in excess of earnings
specified in Article 36, Paragraph 2 of
SANKEI REAL ESTATE’s articles ofincorporation will not be made.

II. Amount of distribution

Method of calculation of amount of
distribution- 31 -

(5) Statement of Cash Flows(Unit: thousand yen)
7th fiscal period
From: Mar. 1, 2022
To: Aug. 31, 2022

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
Repayments of short-term loans
Proceeds from long-term loans
Repayments of long-term loans
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- 32 -

8th fiscal period
From: Sep. 1, 2022
To: Feb. 28, 2023

1,476,124
310,7636,024(41)
100,931
27,164

1,077,491
297,033
6,024(41)
114,796(1,775)389,377-(10,343)
116,727
64,742
171,838(37,563)(5,319)(9,818)(78)
2,600,531
41(94,905)(821)
2,504,846

9,006
77,214(22,151)(133,178)
1,936(5,360)(399)
78
1,420,674
41(108,884)(932)
1,310,899(2,708)(102,914)
595
(331)

(542)
(130,867)
632
(703)

110,219

74,547(83,190)(351,923)(78,330)(408,856)(400,000)
5,600,000(5,600,000)(1,390,093)(1,790,093)
636,421
8,242,298
8,878,719

5,900,000(5,900,000)(1,474,263)(1,474,263)(572,220)8,878,719
8,306,499*1

(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 is as follows:
Buildings
3–65 years
Structures
6–59 years
Machinery and equipment
8-10 years
Tools, furniture and fixtures
4-10 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 withcustomers of SANKEI REAL ESTATE and the timing when the performance obligations
are normally 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 terms of leaseagreements 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 tenants as charges for electricity, gas, etc. provided by said party
is recorded as revenue.
(2) Accounting for non-current asset tax, etc.
For non-current asset tax, city planning tax, depreciable asset tax, etc. on real estateor 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 non-current asset tax, etc. in the initialfiscal year paid by SANKEI REAL ESTATE upon acquisition of real estate or trust
beneficiary rights of real estate is included in the cost of acquisition of the real estate,etc. and not recognized as expenses. The amount equivalent to non-current asset tax,
etc. included in the cost of acquisition of real estate, etc. was nil in the previous fiscal
period. The amount equivalent to non-current asset tax, etc. included in the cost of
acquisition of real estate, etc. was nil 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- 33 -

[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)
7th fiscal period(as of Aug. 31, 2022)

8th fiscal period(as of Feb. 28, 2023)

50,00050,000[Notes to the Statement of Income and Retained Earnings]*1. Breakdown of operating income (loss) from real estate rent business7th fiscal period
From: Mar. 1, 2022
To: Aug. 31, 2022
A. Operating revenue from real estate rent
business
Rent business revenue
Rental revenue
Common area maintenance revenue
Total rent business revenue
Other rent business revenue
Utilities reimbursement
Parking revenue
Termination penalties
Income from work to restore to theoriginal state
Other rental revenue
Total other rent business revenue
Total operating revenue from realestate rent business
B. Operating expenses from real estate
rent business
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 businessTotal operating expenses from realestate rent business
C. Operating income (loss) from real estate
rent business [A−B]- 34 -(Unit: thousand yen)
8th fiscal period
From: Sep. 1, 2022
To: Feb. 28, 2023

2,381,126
135,432

2,323,174
129,138

2,516,558

2,452,313

121,659
33,939346,974328

130,668
34,048
10,466
254,855

8,591
511,493
3,028,051

9,596
439,634
2,891,948

202,506
184,674
303,718
1,818
55,2305,749
3,787
309,823
9,616

231,216
214,149
300,889
1,818
271,4175,603
3,752
296,093
14,014

1,076,927

1,338,956

1,076,927

1,338,956

1,951,124

1,552,992

[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
7th fiscal period
From: Mar. 1, 2022
To: Aug. 31, 2022
Total number of investment units
authorized
Total number of investment units issued
and outstanding(Unit: units)
8th fiscal period
From: Sep. 1, 2022
To: Feb. 28, 2023

10,000,000

10,000,000

467,099

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
7th fiscal period
From: Mar. 1, 2022
To: Aug. 31, 2022

(Unit: thousand yen)
8th fiscal period
From: Sep. 1, 2022
To: Feb. 28, 2023

Cash and deposits
Cash and deposits in trust

5,575,535
3,303,184

5,208,842
3,097,656

Cash and cash equivalents

8,878,719

8,306,499

7th fiscal period(as of Aug. 31, 2022)

8th fiscal period(as of Feb. 28, 2023)

Due within 1 year
Due after 1 year

2,645,767
13,446,087

2,485,706
12,893,670

Total

16,091,854

15,379,376[Notes on Lease Transactions]Operating lease transactions (as lessor)
Future minimum lease payments(Unit: thousand yen)

[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,
and 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.

- 35 -

2. Matters concerning fair value, etc. of financial instruments
The following are the carrying amount and fair value as of August 31, 2022, and the amount of difference between these.
Notes on “cash and deposits” and “cash and deposits in trust” are omitted as the fair value approximates the carrying
amount because they are cash or settled in a short period. Furthermore “lease and guarantee deposits received” and “leaseand guarantee deposits received in trust” are omitted because the amounts are immaterial.
(Unit: thousand yen)
Carrying amount(1) Long-term loans due within one
year(2) Long-term loans
Total liabilities

Fair value

Amount of difference

9,600,000
40,600,000

9,601,711
40,274,136

1,711(325,863)

50,200,000

49,875,848(324,151)

The following are the carrying amount and fair value as of February 28, 2023, and the amount of difference between these.
Notes on “cash and deposits” and “cash and deposits in trust” are omitted as the fair value approximates the carrying
amount because they are cash or settled in a short period. Furthermore “lease and guarantee deposits received” and “leaseand guarantee deposits received in trust” are omitted because the amounts are immaterial.
(Unit: thousand yen)
Carrying amount(1) Long-term loans due within one
year(2) Long-term loans
Total liabilities

Fair value

Amount of difference

9,600,000
40,600,000

9,600,915
40,112,914

915(487,085)

50,200,000

49,713,829(486,170)(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 approximates
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 is calculated
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, 2022)(Unit: thousand yen)
Due within
1 yearLong-term loans due within one
year

Due after
2 to 3 years

Due after
3 to 4 years

9,600,000---

9,200,000

9,600,000

9,200,000

Long-term loans
Total

Due after
1 to 2 years

Due after
4 to 5 years

Due after
5 years---

9,100,000

10,500,000

6,200,000

5,600,000

9,100,000

10,500,000

6,200,000

5,600,000

Amount of repayment of loans scheduled to be due after the end of the fiscal period (February 28, 2023)(Unit: thousand yen)
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

Due after
5 years

9,600,000

-

-

-

-

-

-

7,600,000

11,000,000

10,500,000

5,900,000

5,600,000

9,600,000

7,600,000

11,000,000

10,500,000

5,900,000

5,600,000

Long-term loans
Total

Due after
1 to 2 years[Notes on Securities]
7th fiscal period (as of August 31, 2022)
Not applicable.
8th fiscal period (as of February 28, 2023)
Not applicable.
[Notes on Derivative Transactions]
7th fiscal period (as of August 31, 2022)
Not applicable.
8th fiscal period (as of February 28, 2023)
Not applicable.

- 36 -

[Notes on Retirement Benefits]
7th fiscal period (as of August 31, 2022)
Not applicable.
8th fiscal period (as of February 28, 2023)
Not applicable.
[Notes on Tax-Effect Accounting]
1. Breakdown of main causes for occurrence of deferred tax assets and deferred tax liabilities
7th fiscal period(as of Aug. 31, 2022)
Deferred tax assets
Non-deductible accrued enterprise tax
Total
Deferred tax assets, net(Unit: thousand yen)
8th fiscal period(as of Feb. 28, 2023)

15

12

15

12

15

12

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

Statutory tax rate
[Adjustments]
Deductible distribution payable
Other
Effective income tax rate after applicationof tax-effect accounting(Unit: %)7th fiscal period(as of Aug. 31, 2022)
31.46

8th fiscal period(as of Feb. 28, 2023)
31.46(31.44)0.04(31.44)
0.06

0.06

0.08

[Notes on Share of Profit (Loss) of Entities Accounted for Using Equity Method]
7th fiscal period (from March 1, 2022, to August 31, 2022)
Not applicable.
8th fiscal period (from September 1, 2022, to February 28, 2023)
Not applicable.
[Notes on Related-Party Transactions]
1. Parent company, major corporate unitholder, etc.
7th fiscal period (from March 1, 2022, to August 31, 2022)
Not applicable.
8th fiscal period (from September 1, 2022, to February 28, 2023)
Not applicable.
2. Affiliated company, etc.
7th fiscal period (from March 1, 2022, to August 31, 2022)
Not applicable.
8th fiscal period (from September 1, 2022, to February 28, 2023)
Not applicable.
3. Fellow subsidiary, etc.
7th fiscal period (from March 1, 2022, to August 31, 2022)
Not applicable.
8th fiscal period (from September 1, 2022, to February 28, 2023)
Not applicable.

- 37 -

4. Director, major individual unitholder, etc.
7th fiscal period (from March 1, 2022, to August 31, 2022)

Attribute

Share capital
Name oforcompany,
investments
etc. or Locationin capitalname of(thousandpersonyen)

Description ofbusiness or
occupation

Description ofPercentage
relationshipTransacti
Balanceof votingonat end ofrights, etc. Concurrent
Description of
Account
amountperiodheld by (in) holding oftransaction
item
Business(thousand(thousand
SANKEI
positions,relationship
REAL ESTATE
yen)
yen)
etc. by(%)
directors

Executive
Director of
SANKEI REAL
Payment of
Executive Director of
ESTATE, andasset
SANKEI REAL ESTATE, andPresident andmanagement
Accounts
President and Chief
Director Yuichi Ota
Chief Executive
fee to asset
265,992 payable - 292,592
Executive Officer of
Officer ofmanagement
other
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.

8th fiscal period (from September 1, 2022, to February 28, 2023)

Attribute

Share capital
Name oforcompany,
investments
etc. or Locationin capitalname of(thousandpersonyen)

Description ofbusiness or
occupation

Description ofPercentage
relationshipTransacti
Balanceof votingonat end ofrights, etc. Concurrent
Description of
Account
amountperiodheld by (in) holding oftransaction
item
Business
SANKEI(thousand(thousandpositions,relationship
REAL ESTATE
yen)
yen)
etc. by(%)
directors

Executive
Director of
SANKEI REAL
Payment of
Executive Director of
ESTATE, andasset
SANKEI REAL ESTATE, andAccounts
President andmanagement
President and Chief
fee to asset
Director Yuichi Ota
Chief Executive
247,055 payable - 271,761
Executive Officer ofmanagement
other
Officer ofSankei Building Assetcompany
Sankei Building
Management Co., Ltd.
(Note 3)
Asset
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.

- 38 -

[Notes on Asset Retirement Obligations]
7th fiscal period (from March 1, 2022, to August 31, 2022)
Not applicable.
8th fiscal period (from September 1, 2022, to February 28, 2023)
Not applicable.
[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)
7th fiscal period
From: Mar. 1, 2022
To: Aug. 31, 2022
Carrying amount
Balance at beginning of period

97,570,230

97,343,425(226,804)(83,590)

97,343,425
104,937,000

97,259,835
104,232,000

Amount of change during period
Balance at end of period
Fair value at end of period

8th fiscal period
From: Sep. 1, 2022
To: Feb. 28, 2023

(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(83,067 thousand yen), while the amount of decrease is mainly attributable to depreciation (309,823 thousand yen). The amount of increasein the fiscal period under review is mainly attributable to capital expenditures (212,502 thousand yen), while the amount of decrease ismainly attributable to depreciation (296,093 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
7th fiscal period (from March 1, 2022, to August 31, 2022)

Sale of real estate, etc.
Utilities reimbursement
Other
Total

(Note)

Revenue from contracts with customers(Note)
121,659
121,659(Unit: thousand yen)
Sales to external customers
121,659
2,906,392
3,028,051

Rent 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.

8th fiscal period (from September 1, 2022, to February 28, 2023)

Sale of real estate, etc.
Utilities reimbursement
Other
Total

(Note)

Revenue from contracts with customers(Note)
130,668
130,668(Unit: thousand yen)
Sales to external customers
130,668
2,761,279
2,891,948

Rent 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
7th fiscal period (from March 1, 2022, to August 31, 2022)
Matters related to significant accounting policies are as stated in the notes.
8th fiscal period (from September 1, 2022, to February 28, 2023)
Matters related to significant accounting policies are as stated in the notes.

- 39 -

3. Information on relationship between satisfaction of performance obligations based on contracts with customers and cash
flows from such contracts, and the amount and timing of revenue expected to be recognized from the next fiscal period
from contracts with customers that exist at the end of the fiscal period under review(1) Balance of contract assets and contract liabilities, etc.
(Unit: thousand yen)
7th fiscal period
8th fiscal period
From: Mar. 1, 2022
From: Sep. 1, 2022
To: Aug. 31, 2022
To: Feb. 28, 2023
Receivables from contracts with customers (Balance
26,18230,002at beginning of period)
Receivables from contracts with customers (Balance
30,00225,127at 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)(2) Transaction price allocated to remaining performance obligations
7th fiscal period (from March 1, 2022, to August 31, 2022)
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 isa right 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
performance obligations are not included in the notes.
8th fiscal period (from September 1, 2022, to February 28, 2023)
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 isa right 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
performance obligations 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
7th fiscal period (from March 1, 2022, to August 31, 2022)(1) Information by product and service
The information is omitted since operating revenue to external customers for a single group of products andservices 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(Unit: thousand yen)
Name of customer

Operating revenue

GRANVISTA Hotels & Resorts Co., Ltd.

325,755

Sony Group Corporation(Note)

Not disclosed (Note)

Not disclosed because consent for disclosure has not been obtained from the lessee.

- 40 -

Related segment
Real estate rent business
Real estate rent business8th fiscal period (from September 1, 2022, to February 28, 2023)(1) Information by product and service
The information is omitted since operating revenue to external customers for a single group of products andservices 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(Unit: thousand yen)
Name of customer

Operating revenue

GRANVISTA Hotels & Resorts Co., Ltd.
Sony Group Corporation(Note)

Related segment

325,755
Not disclosed (Note)

Real estate rent business
Real estate rent businessNot disclosed because consent for disclosure has not been obtained from the lessee.

[Notes on Per Unit Information]
7th fiscal period
From: Mar. 1, 2022
To: Aug. 31, 2022

Net assets per unit
Net income per unit

8th fiscal period
From: Sep. 1, 2022
To: Feb. 28, 2023

108,993 yen
3,158 yen

108,140 yen
2,304 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 2022: 467,099 units; fiscal period ended February 2023: 467,099 units). In addition, diluted net income per unit is not stated,because there are no diluted investment units(Note 2) The basis for calculation of net income per unit is as follows:
7th fiscal period
8th fiscal period
From: Mar. 1, 2022
From: Sep. 1, 2022
To: Aug. 31, 2022
To: Feb. 28, 2023
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)(Notes on Significant Subsequent Events)
Not applicable.

- 41 -

1,475,197

1,076,626--

1,475,197

1,076,626

467,099

467,099

(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

181,978542－

182,520

25,525

3,342

156,995

Structures

544

－

－

544

67

13

476

Land

2,457,766－－

2,457,766－－

2,457,766

Buildings in trust

18,769,170

186,639－

18,955,810

1,879,113

286,453

17,076,697

71,171－－

71,171

4,558

1,041

66,613

11,302

3,028－

14,3302,290

592

12,04049,52522,291－

71,817

16,4194,650

55,397

77,433,848－－

77,433,848－－

77,433,848

56,722

17,151

72,928

945

－

－

945

99,032,030

229,654

72,92899,188,756

1,927,975

296,093

97,260,780

Structures intrust
Property, Machinery andplant and equipment inequipment trust
Tools, furnitureand fixtures intrust
Land in trust
Construction inprogress in trust
Subtotal
Intangible
assetsSoftwareSubtotal
Total(Note)

Accumulated depreciation
Balance atorIncrease during Decrease during Balance at end
Net balance at
Amountbeginning ofaccumulated
periodperiodof period
during period end of period
period(thousand yen) (thousand yen) (thousand yen) amortization (thousand (thousand yen)(thousand yen)(thousand
yen)
yen)

9,400

－

－

9,400

7,386

940

2,013

9,400

－

－

9,400

7,386

940

2,013

99,041,430

229,654

72,92899,198,156

1,935,361

297,033

97,262,794

The increase during period is mainly due to capital expenditures (212,502 thousand yen in total).

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

- 42 -

Remarks(Note)(Note)(Note)(Note)

6) Schedule of Loans
Category

Longtermloans

LenderMizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSBI Shinsei Bank, Limited(Note 5)Resona Bank, Limited
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSBI Shinsei Bank, Limited(Note 5)Resona Bank, Limited
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSBI Shinsei Bank, Limited(Note 5)Resona Bank, Limited
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSBI Shinsei Bank, Limited(Note 5)Resona Bank, Limited
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSBI Shinsei Bank, Limited(Note 5)Resona Bank, Limited
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSBI Shinsei Bank, Limited(Note 5)Resona Bank, Limited

Balance atIncrease
Decrease Balance at end
Average
beginning of
Maturity dateduring period during periodof period
interest rate
period(Note 2)(thousand yen) (thousand yen) (thousand yen) (Note 1)(thousand yen)
972,000
972,000

Use offunds

716,000--

716,000

614,000--

614,000

392,000--

358,000--

0.42346%
392,000 (fixed interest Mar. 12, 2023 (Note 3)
rate)
358,000

324,000--

324,000

324,000
856,000--

324,000
856,000

639,000--

639,000

548,000--

548,000

350,000--

319,000--

0.49096%
350,000 (fixed interest Mar. 12, 2024 (Note 3)
rate)
319,000

294,000--

294,000

294,000
2,250,000-

2,250,000

294,000-

1,500,000-

1,500,000-

620,000-

620,000-

550,000-

550,000

0.26727%
Sep. 3, 2022
(floating- interest rate)

490,000-

490,000-

490,000
950,000-

490,000-

950,000

800,000--

800,000

2,000,000--

2,000,000

620,000--

550,000--

0.36200%
620,000 (fixed interest Sep. 3, 2023
rate)
550,000

490,000--

490,000

490,000
1,167,000--

490,000
1,167,000

832,000--

832,000

713,000--

713,000

456,000--

416,000--

0.32923%
456,000 (fixed interest Sep. 12, 2024 (Note 4)
rate)
416,000

358,000--

358,000

Unsecured/
Nonguaranteed

Unsecured/
Nonguaranteed(Note 3)

Unsecured/
Nonguaranteed(Note 3)

Unsecured/
Nonguaranteed

358,000--

358,000

1,331,000--

1,331,000

929,000--

929,000

796,000--

796,000

509,000--

465,000--

0.36978%
509,000 (fixed interest Mar. 12, 2025 (Note 4)
rate)
465,000

385,000--

385,000

385,000--

385,000- 43 -

Remarks

Unsecured/
Nonguaranteed

Unsecured/
NonguaranteedCategory

LenderMizuho Bank, Ltd.

1,550,000--

1,550,000

1,000,000--

1,000,000

700,000--

700,000

600,000--

600,000

500,000--

500,000

500,000--

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,
LimitedSBI Shinsei Bank, Limited(Note 5)

Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSBI Shinsei Bank, Limited(Note 5)Resona Bank, Limited
Longterm
loans

Balance atIncrease
Decrease Balance at end
Average
beginning of
Maturity dateduring period during periodinterest rateof period
period(Note 2)(thousand yen) (thousand yen) (thousand yen) (Note 1)(thousand yen)Aozora Bank, Ltd.

Use offunds

Remarks

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

(Note 3)

Unsecured/
Nonguaranteed(Note 3)

Unsecured/
Nonguaranteed(Note 4)

Unsecured/
Nonguaranteed

500,000--

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

400,000--

400,000

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

Mizuho Bank, Ltd.

1,100,000--

1,100,000

900,000--

900,000

700,000--

700,000

300,000--

300,000

300,000--

0.38044%(fixed interest Apr. 1, 2026
rate)
300,000

300,000--

300,000

Resona Bank, Limited

200,000--

200,000

Aozora Bank, Ltd.

500,000--

500,000

Mizuho Bank, Ltd.

1,574,000--

1,574,000

1,084,000--

1,084,000

929,000--

929,000

593,000--

542,000--

0.77500%
593,000 (fixed interest Mar. 14, 2028 (Note 4)
rate)
542,000

439,000--

439,000

439,000--

439,000

Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSBI Shinsei Bank, Limited(Note 5)

Sumitomo Mitsui Banking
Corporation
Development Bank of JapanInc.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSBI Shinsei Bank, Limited(Note 5)Resona Bank, Limited- 44 -

Unsecured/
NonguaranteedCategory

Balance atIncrease
Decrease Balance at end
Average
beginning of
Maturity dateduring period during periodinterest rateof period
period(Note 2)(thousand yen) (thousand yen) (thousand yen) (Note 1)(thousand yen)

LenderMizuho Bank, Ltd.

Longterm
loans

Sumitomo Mitsui Banking
Corporation
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSBI Shinsei Bank, Limited(Note 5)Resona Bank, Limited
Total

-

2,250,000-

2,250,000-

1,500,000-

1,500,000-

620,000-

620,000-

550,000-

0.79285%(fixed interest Mar. 5, 2027
rate)
550,000-

490,000-

490,000-

490,000-

490,000

50,200,000

5,900,000

5,900,000

50,200,000

Use offunds

Remarks(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; if such date falls in the next month, theimmediately preceding 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) Shinsei Bank, Limited changed its trade name to SBI Shinsei Bank, Limited on January 4, 2023. The new trade name is used for all instances in this table.
(Note 6) 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

9,600,000

Due after 1 to 2 years Due after 2 to 3 years Due after 3 to 4 years Due after 4 to 5 years
7,600,000

11,000,000- 45 -

10,500,000

5,900,000