April 19, 2021

4th Fiscal Period (Ended February 2021)
Financial Results Briefing Materials

AssetManagement
CompanySANKEI REAL ESTATE Inc.

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SANKEI REAL ESTATE Inc.

Table of Contents

Executive Summary… P3

1. Financial Results andManagement Highlights… P4

2. Internal Growth Results and Strategy… P14

2-1 Internal Growth Results… P15

2-2 Internal Growth Strategy… P19

3. External Growth Results and Strategy
3-1 External Growth Results… P22

3-2 External Growth Strategy

… P23

… P21

4. Financial Strategy… P28

5. ESG Initiatives… P31

Appendix… P37

Disclaimer
This document is intended for the purpose of providing information on
SANKEI REAL ESTATE Inc. (hereinafter, “SANKEI REAL ESTATE”), and is
not intended for the purpose of soliciting investment in orrecommending the trading of specific products. Please consult yoursecurities company for any purchase of SANKEI REAL ESTATE investment
units. When making any investment, investors do so at their sole
discretion and risk. The information provided in this document is ananalysis or a judgment made by Sankei Building Asset Management Co.,
Ltd. (hereinafter, “Sankei Building Asset Management”) based on
information currently available to Sankei Building Asset Management,
and Sankei Building Asset Management does not guarantee and is notliable whatsoever for the accuracy, reliability, integrity, etc. thereof. In
addition, the content may be changed or abolished without prior notice.
The content of this document contains earnings forecasts and otherforward-looking statements. These forward-looking statements are nota guarantee of future business performance or financial content of
SANKEI REAL ESTATE. All rights to any part of this document belong toSankei Building Asset Management, and no part of this document shallbe used, cited, reproduced, altered, disassembled, transmitted, etc. by
any means, electronic or mechanical, for any purpose without
permission. This document is not a disclosure document based on the
Financial Instruments and Exchange Act. Please contact below if you
have any inquiries concerning this document.
Sankei Building Asset Management Co., Ltd.
Finance & IR Department
Phone: +81-3-5542-1316

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SANKEI REAL ESTATE Inc.

Executive Summary
Financial Results and Management Highlights
 In the 4th FP, as both external growth and internal growth proved effective, revenue and profit increased fromboth the forecast*1 and the previous fiscal period
 DPU*2 for the 4th FP was 2,849 yen, +6.5% (+173 yen) from the forecast or +12.5% (+317 yen) from the previous
fiscal period
 With the acquisition of “S-GATE AKASAKA,” a relatively new property in central Tokyo, continued to achieve
external growth steadily(Impact on DPU*3 for 4th FP: +128 yen; +13 yen from forecast) There was almost no impact of the COVID-19 pandemic following the previous period (The occurrence ofassumed GV*4 is also almost zero)
Future Growth Strategies
 Investment unit prices recovering, seeking external growth opportunities (abundant pipeline: approx. 50 to 100
billion yen)
 Target competitive properties exceeding portfolio NOI yields in Greater Tokyo and ordinance-designated cities

 For office buildings, place emphasis on location and specifications; For sub assets, focus on retail and logistics
facilities Continue to pursue internal growth, placing weight on focused properties for the time being
*1
*2
*3

Forecast refers to the forecast for the 4th FP at the time of the announcement of the financial results for the previous fiscal period (October 2020).
DPU refers to distribution per unit.
The 4th FP net profit base value (minus other operating expenses and non-operating income (loss) required to acquire actual operating income (loss) from leasing) is divided by the number ofinvestment units issued and outstanding (356,800 units).
*4 Assumed GV (General Vacancy) is the amount equivalent to 0.5% of the rental and CAM revenue (-10,079 thousand yen in 4th FP), budgeted as a certain risk of decrease in revenue caused by the riskof the COVID-19 pandemic.
*5 Figures are rounded down to the indicated digits, and ratios are rounded off.

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SANKEI REAL ESTATE Inc.

1. Financial Results and Management Highlights

4

SANKEI REAL ESTATE Inc.

Financial Highlights- As both external growth and internal growth proved effective,
revenue and profit increased from both the forecast and the previous fiscal period  DPU for the 4th FP was 2,849 yen, +6.5% (+173 yen) from the forecast or +12.5% (+317 yen) from the previous
fiscal period There was almost no impact of the COVID-19 pandemic. Reducing repair expenses also contributed toincreased revenue and profit■ Financial Summary for 4th FP (Ended February 2021)

ResultComparison with
forecast

Operating revenue

2,147 million yen+0.6%+12 million yen+7.1%+142 million yen

Operating profit

1,118 million yen+6.4%+67 million yen+12.3%+122 million yen

Net profit

1,016 million yen+6.5%+61 million yen+12.5%+113 million yen

2,849 yen

+6.5%

+173 yen+12.5%+317 yen

DPU (Distribution per unit)■ Change in DPU for 4th FP (Ended February 2021)(Unit: yen per unit)

2,900 yen

2,849 yen

+12.5%

2,800 yen

2,600 yen

2,532 yen

<Risk of decrease in revenue assumed in forecast>・Office and store revenue → budgeted as assumed GV
Rental and CAM revenue x 0.5% = -10,079 thousand yen DPU -28 yen

Breakdown of DPU

Forecast

Result

+6.5%

+5.7%

2,500 yen

There was almost no impact of the COVID-19 pandemic

・Rental conference room balance → budgeting within individual
property balance
DPU -8 yen<Results>

2,676 yen

2,700 yenComparison withprevious fiscal period-28 yen

4th FP
Forecast(as of October 2020)* Figures are rounded down to the indicated digits, and ratios are rounded off.

4th FP
ResultChangeChange0 yen+28 yen-0.2 yenStore revenue

3rd FP
ResultComparison withprevious fiscal
period0 yen

Office revenue

2,400 yenComparison with
forecast-0.2 yen

Rental conference
room balance-8 yen-7 yen+1 yen0.3 yenTotal DPU

-36 yen-7 yen+29 yen+0.1 yen

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SANKEI REAL ESTATE Inc.

Financial Results Highlights
Summary of DPU for 4th FP (Ended February 2021) (Comparison with Previous Fiscal Period) In the 4th FP, as both external growth and internal growth proved effective, DPU increased
significantly from the previous fiscal period(yen per unit)■ Summary of DPU for 4th FP (Ended February 2021)+399

Comparison with DPU forprevious fiscal period+317 yen(+12.5%)Internal growth
Rent revision*1

Change in
expensesrelated toleasing business
Main breakdown
・ Increase in outsourcing
expenses -30

Change inotheroperatingexpenses

Change in nonoperating
income (loss)

Impact of the
COVID-19
pandemic

External growth
AKASAKAacquisition

Change in rental revenue, etc.

3rd FP
Result*1 The +209 yen for “External Growth AKASAKA Acquisition” on this page uses S-GATE AKASAKA's 4th FP leasing business revenue divided by the number ofinvestment units issued and outstanding (356,800 units).
*2 Figures are rounded down to the indicated digits, and ratios are rounded off.

4th FP
Result6

SANKEI REAL ESTATE Inc.

Financial Results Highlights (Comparison with Forecast)
4th Fiscal Period (Ended February 2021)
 Revenue and profit increased (operating revenue: +0.6%; operating profit: +6.4%; net profit: +6.5%)
from the forecast(Unit: million yen)
4th FP Forecasts (A)(as of October 2020)

4th FP Results (B)(February 2021)

Difference(B)-(A)

2,135

2,147

12

2,015

2,015

10

(10)

0

10

Parking revenue

30

30

0

Utilities reimbursement

94

93

(0)

Other revenue

5

8

2

Operating expenses
Expenses related to leasing
business [Total]

1,084

1,029

(55)

840

790

(50)

Outsourcing expenses

185

183

(2)

・ Decrease in CM fee due to decrease in repair expenses (-2.2)

Utilities expenses

122

110

(11)

・ Breakdown: BREEZÉ TOWER (-4.3), Shinagawa (-2.9), Omori (-1.6), Hatchobori (-1.2), Hibiya (-0.6), AKASAKA (-0.5), Toyo(+0.6),
etc.

Repair expenses

68

35

(32)

・ Non-implementation of work, reduction of construction costs: BREEZÉ TOWER (-16.9), Hibiya (-9.8), Shinagawa (-4.4)

Property taxes

215

214

(0)

Depreciation

228

227

(1)

19

17

(1)

1,295

1,357

62

Total other operating expenses

243

239

(4)

Asset management fee

184

186

2

・ Increase in fee due to increase in income from leasing

Other expenses

59

52

(7)

・ Decrease due to unused reserve

Accounting period
Operating revenue
Rental and CAM revenue
Assumed GV included
therein

Other expenses
Operating income (loss) fromleasing

Major Factors for the Difference

1,051

1,118

67

Non-operating income

0

0

0

Non-operating expenses

95

101

5

Ordinary profit

955

1,017

61

Net profit

954

1,016

61

2,676 yen
1,523

2,849 yen
1,585

173 yen61

Operating profit

Distribution per unit (Unit: yen)
NOI

* Figures are rounded down to the indicated digits, and ratios are rounded off.

・ Assumed GV not used as described below (+10)

・ Cancellation fee: Tokyo Sankei (+2.5)

・ Decrease in depreciation due to decrease in additional capital investment (-8.5) and delay in implementation

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SANKEI REAL ESTATE Inc.

Financial Results Highlights (Comparison with Previous Fiscal Period)
4th Fiscal Period (Ended February 2021)
 Revenue and profit increased (operating revenue: +7.1%; operating profit: +12.3%; net profit: +12.5%) from theprevious fiscal period(Unit: million yen)Accounting period

3rd FP Results (A)(August 2020)

4th FP Results (B)(February 2021)

Difference(B)-(A)

Operating revenue

2,005

2,147

142

1,878

2,015

137

Parking revenue

29

30

1

・ SG AKASAKA acquisition (+1.2)

Utilities reimbursement

90

93

2

・ SG AKASAKA acquisition (+4.0)

・ Cancellation fee: Tokyo Sankei (+2.5), BREEZÉ TOWER (-0.5)

Rental and CAM revenue

Major Factors for the Difference・ SG AKASAKA acquisition (+69) ・Upward rent revision: BREEZÉ TOWER (+37), Shinagawa (+21)
・ SG NIHONBASHI-HONCHO phased rent increase (+12) ・Omori vacancy (-11)

・BREEZÉ TOWER (-2.5)

・Other (+0.9)

6

8

1

Operating expenses
Expenses related to leasing
business [Total]

1,009

1,029

20

778

790

11

Outsourcing expenses

172

183

10

・ SG AKASAKA acquisition (+5.5)
・ Increase in rent increase revision fee: Shinagawa (+6.1), BREEZÉ TOWER (-8), Other (+7)

Utilities expenses

118

110

(7)

・ Decrease in 3rd FP results

Other revenue

Repair expenses

35

35

0

Property taxes

215

214

(0)

Depreciation

219

227

7

17

17

0

1,226

1,357

131

Total other operating expenses

230

239

9

Asset management fee

183

186

3

・ Increase in fee due to increase in income from leasing
・ Increase in expenses related to unitholders’ meeting

Other expenses
Operating income (loss) fromleasing

46

52

6

996

1,118

122

Non-operating income

0

0

(0)

Non-operating expenses

92

101

8

Ordinary profit

904

1,017

113

Other expenses
Operating profit

Net profit
Distribution per unit (Unit: yen)
NOI

903

1,016

113

2,532 yen

2,849 yen

317 yen

1,446

1,585

138

・ SG AKASAKA acquisition (+6.4)

・ Accrual of refinancing costs (+8)* Figures are rounded down to the indicated digits, and ratios are rounded off.

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SANKEI REAL ESTATE Inc.

Management Highlights (Internal Growth)- Continued to achieve steady internal growth even in the prolonged COVID-19 pandemic ■ Rent Revision Performance of Office Buildings for 4th FP (Based on Closing of Books)
 Actual NOI yield and average rent increased, and occupancy rate almost full occupancy(hereinafter, major properties)
BREEZÉ TOWER

ShinagawaSeaside TS Tower

S-GATENIHONBASHIHONCHODPU Result*1

DPU Result*1

DPU Result*1+114 yen+47 yen+31 yen

Actual NOI yield
Office Buildings Average Rent
Period-end occupancy rate

4.4% (+10bp from previous fiscal period)
19,309 yen/tsubo (+4.5% from previous fiscal period)
99.9% (-0.1p from previous fiscal period)■ Rent Revision Performance of Office Buildings for 4th FP(Based on Conclusion of Contracts)

Impact on DPU*2+23 yenFor lease agreements concluded between September 1, 2020, and February 28, 2021

BREEZÉ TOWER

S-GATE AKIHABARA

Hibiya Sankei Building

Rate of rent increase
compared with
beforeRate of rent increase
compared with
beforeRate of rent increase
compared with
beforeRenewal with rent
revision/renewal

Renewal with rent
revision/renewal

Renewal with rent
revision/renewal+24.1%+15.8%+10.0%

New replacement-

New replacement-

New replacement-

Target area
Percentage of rent increase

2,769 tsubo
25.8%

Rate of rent increase compared with before+10.2%
Amount of monthly rent increase+1.4 million yen*1 The difference between the operating income (loss) from leasing for the current fiscal period and the operating income (loss) from leasing for the previous fiscal period is divided by the number ofinvestment units issued and outstanding (356,800).
*2 Calculated by converting the amount of increase in monthly rental and CAM revenue into that for the full period (6 months) and dividing it by the number of investment units issued and outstanding(356,800 units).
*3 Figures are rounded down to the indicated digits, and ratios are rounded off.
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SANKEI REAL ESTATE Inc.

Management Highlights (External Growth)- Continued to achieve steady external growth - With the expectation of potential redevelopments in the neighborhood, acquired “S-GATE AKASAKA,”
a relatively new property in central Tokyo*1
Impact of DPU for 4th FP＊2

＋128 yen

Sannoshita

Akasaka Biz Tower
akasaka Sacas
Akasaka
ACT Theater

Planned neighborhood
Redevelopment Area

Akasaka BLITZ

Akasaka 2 Police Box
Kokusai Shinakasaka Bldg. EastTBS
Kokusai Shinakasaka Bldg. West

KAJIMA CORPORATION KI Bldg.

S-GATE AKASAKA
Overview*1*2*3

SANKEI REAL ESTATE has acquired 60% quasi co-ownership interest in real estate trust beneficiary rights.
The 4th FP net profit base value (minus other operating expenses and non-operating income (loss) required to acquire actual operating income (loss) fromleasing) is divided by the number of investment units issued and outstanding (356,800 units).
Figures are rounded down to the indicated digits, and ratios are rounded off.

Location

Minato-ku, Tokyo

Acquisition price4,200 million yen

Appraisal value

4,266 million yen

Appraisal NOI yield

3.3%

Construction completion

July 2015

Ceiling height

2,800 mm

Floor load

500 kg/m²

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SANKEI REAL ESTATE Inc.

Earnings Forecasts for 5th Fiscal Period (Ending August 2021) and Thereafter In the 5th fiscal period, internal growth is expected to increase dividends, and the 6th fiscal period
takes into account downtime due to vacancies
 Hotels (2 properties) have no risk of reduced revenue due to deals and sponsorship commitments(yen per unit)

Rentalrevenue

Expensesrelated toleasingbusiness

Other
operatingexpenses

Nonoperating
income(loss)

Rentalrevenue

No refinancing costs

Expensesrelated toleasingbusiness

Other
operatingexpenses

Nonoperating
income(loss)
With refinancing costs

2000

3rd FP
4th FPDPU Result DPU Result* Figures are rounded down to the indicated digits.

5th FPDPU Forecast

6th FPDPU Forecast
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SANKEI REAL ESTATE Inc.

Earnings Forecasts for 5th Fiscal Period (Ending August 2021) and Thereafter DPU forecast for the 5th FP: +0.5% (+13 yen) from the 4th FP
 DPU forecast for the 6th FP: -5.0% (-142 yen) from the 5th FP forecast(Unit: million yen)Accounting period

4th FP Results (A)(February 2021)

5th FP Forecasts (B)(August 2021)

Operating revenue

2,147

2,178

30

2,144

(34)

Rental and CAM revenue

Difference(B)-(A)

6th FP Forecasts (C)(February 2022)

Difference(C)-(B)

Major Factors for the Difference
5th FP Forecasts (Comparison with 4th FP)

2,015

2,048

32

2,018

(30)

Parking revenue

30

29

(0)

29

(0)

・ Rental and CAM revenue +44 (AKASAKA acquisition +14, rent increase +30)

Utilities reimbursement

93

95

1

90

(4)

・ Rental and CAM revenue -12 (cancellation -8, rent decrease -4)

Other revenue

8

5

(2)

5

0

・ Other revenue: Cancellation fee -2

1,029

1,059

30

1,064

4

790

817

27

821

3

183

173

(10)

188

15

・ Outsourcing expenses: -10 (PM incentive fee -7, other)

110

121

10

109

(12)

・ Utilities expenses: Seasonal fluctuation (spring and summer) increase +10

Operating expenses
Expenses related to leasing
business [Total]
Outsourcing expenses
Utilities expenses

Operating revenue (+30)

Expenses related to leasing business (+27)

Repair expenses

35

53

18

49

(4)

・ Property taxes: AKASAKA acquisition +6.5

Property taxes

214

221

6

221

(0)

・ Increase in repair expenses +18

Depreciation

227

228

1

233

5

・ Depreciation: AKASAKA acquisition +1.3

Other expenses
Operating income (loss) fromleasing
Total other operating expenses

17

19

1

19

0

1,357

1,361

3

1,322

(38)

239

241

2

242

0

・ Rental and CAM revenue: +8.8 (existing tenants +4.7, new tenants +4.1)

Asset management fee

186

192

5

193

0

・ Rental and CAM revenue: -38.8 (existing tenants -7.1, vacancies -31.7)

Other expenses

52

49

(3)

49

0

・ Utilities reimbursement -4

1,118

1,119

0

1,079

(39)

0

0

(0)

0

0

Operating profit
Non-operating income
Non-operating expenses

6th FP Forecasts (Comparison with 5th FP)
Operating revenue (-34)

101

97

(3)

108

11

Ordinary profit

1,017

1,022

4

971

(50)

・ Outsourcing expenses: +15 (PM incentive fee +12, BM +3)

Net profit

1,016

1,021

4

970

(50)

・ Utilities expenses: Seasonal fluctuation (autumn and winter) decrease -12

2,849 yen

2,862 yen

13 yen2,720 yen(142 yen)

1,585

1,589

4

1,556

(33)

Distribution per unit (Unit: yen)
NOI

Expenses related to leasing business (+3)

・ Decrease in repair expenses -4
・ Depreciation: Increase in renewal work (CAPEX) +5* Figures are rounded down to the indicated digits, and ratios are rounded off.

12

SANKEI REAL ESTATE Inc.

Change in NAV per Unit (After Deduction of Distribution) *1

NAV multiple*2*As of April 9, 2021

End of 4th FP
0.91x

1.00x

(Unit: yen per unit)

123,491

121,641
4th FP

3rd FP+8.2%

120,000-1.5%

114,157
110,000

108,184

2nd FP+5.5%

21,078
Fall in pricecalculated at theend of the period
fell for someproperties

11,744
Increasein NCF

19,227

11,670100,000

Unrealized
gain

Net
assets96,515

Capitalincreasethroughpublicoffering

102,413

102,413

102,413

End of 2nd FP(End of February 2020)

End of 3rd FP(End of August 2020)

End of 4th FP(End of February 2021)

90,000End of 1st FP(End of August 2019)*1 NAV per unit = (Net assets after deduction of distribution + Unrealized gain on appraisal basis) / Number of investment units issued and outstanding*2 NAV multiple = Investment unit price (closing price as of relevant date) / NAV per unit
*3 Figures are rounded down to the indicated digits, and ratios are rounded off.

13

SANKEI REAL ESTATE Inc.

2. Internal Growth Results and Strategy

14

SANKEI REAL ESTATE Inc.

2-1 Internal Growth Results- Rent revision performance of office buildings (based on closing of books)  Maintained high occupancy rates and further improved profitability even during the COVID-19
pandemic
 Actual NOI Yield
Change inActualNOI Yield+10bp from previous fiscal period

4.0%
1st FP(ended August 2019)(ended February 2020)

3rd FP(ended August 2020)

4.4%
4th FP(ended February 2021)(Fixed assets tax has not been expensed for the 1st FP, 2nd FP, and for S-GATE AKASAKA in the 4th FP. Accordingly, the level during normal operation isindicated) Average Rent (yen per tsubo)
Office Buildings
Average Rent

4.3%

4.0%
2nd FP

+4.5% (+823 yen) from previous fiscal period

17,992 yen

17,523 yen

18,486 yen

19,309 yen

As of August 31, 2019

As of February 29, 2020

As of August 31, 2020

As of February 28, 2021

Average rent (yen per tsubo) = (Rental and CAM revenue upon the most recent settlement / 6 months / Leasable area x Occupancy rate)

Cases of Other REITs*

 Occupancy Rate
Change in
Occupancy Rate

Investment Corporation A: 22,458 yen
Investment Corporation C: 18,557 yen

Investment Corporation B: 20,191 yen

High occupancy rate maintained

100.0%
As of August 31, 2019
Cases of Other REITs *100.0%

As of February 29, 2020

100.0%
As of August 31, 2020

Investment Corporation A: 97.4%
Investment Corporation C: 97.6%

99.9%

As of February 28, 2021

Investment Corporation B: 98.4%
As at the end of February 2021 from each
investment corporation’s website

COVID-19 crisis
March 2020
Before COVID-19 crisis

After COVID-19 crisis* Figures are estimates by the Asset Management Company based on the most recent disclosed material by extracting investment corporations that are office REITs listed in the “ARES J-REIT Digest” andof which have over two-thirds of the portfolio held in the Tokyo 23 wards on an acquisition price basis, and the accuracy thereof is thus not guaranteed.

15

SANKEI REAL ESTATE Inc.

2-1 Internal Growth Results- Rent revision performance of office buildings for 4th FP (based on conclusion of contracts) *1*2  Upward rent revision progressing steadily, centering on tenants under fixed-term leases
 Rent Revision Performance of Office Buildings
Targeted leased area
(ownership interest of
SANKEI REAL ESTATE)

Number oftargeted tenants

Increase

Renewal with rent
revision/renewal

10715 tsubos

25.8%

No change

Renewal with rent
revision/renewal

15 2,021 tsubos

73.0%

Decrease

Renewal with rent
revision/renewal

2

33 tsubos

1.2%

27 2,769 tsubos

100.0%Total

 Breakdown of Tenants by Use
No rent decrease for office
OfficeRetailIncrease

10 cases

Increase

Decrease

2 cases

15 cases
11
73%

100%

+10.2%

 Breakdown of Tenants by Contract Form
Steady rent increase for fixed-term leases
Fixed-term Ordinary

No change
427%

Rate of increase
compared with before

Percentage
*3

100%

*1 Lease contracts concluded during the 4th FP (from September 1, 2020, to the end of February 2021).
*2 “Office buildings” refers to office buildings among the assets under management for the 4th FP.
*3 These are the percentages when the area leased to tenants who had rent revisions is deemed 100%.

No change
2
13%

1
10%

10 cases
990%

Decrease

2 cases

15 cases
13
87%

1
50%

1
50%

16

SANKEI REAL ESTATE Inc.

2-1 Internal Growth Results- Rent revision performance of office buildings for 4th FP (based on conclusion of contracts)  Upward rent revision (1)A-2Rate of rent increase compared with before
Renewal with rent revision/renewal(5 cases, 159 tsubos)

BREEZÉ TOWER*1＋24.1%

30%
20%
10%

32.5%
23.4%

23.2%

0%
1st FP

2nd FP

1.

Located in the Umeda area, a business district
representing Kansai.

2.

The property is equipped with rooftop greening,
green walls, photovoltaic generation facilities, andother energy-saving facilities. The property was
rated S rank (the highest rank) in the City of Osaka’sComprehensive Assessment System for Building
Environmental Efficiency (CASBEE Osaka) andawarded “CASBEE Osaka of the Year 2008.”

3.

3rd FP

4th FP

Effect of upward rent revision+13 yen

Impact on DPU*2

■ MAP
Hotel
Granvia Osaka

Osaka Sta.

The property is an information transmission basehaving “Sankei Hall BREEZÉ” which inherits the DNA
of “Sankei Hall,” a theater in Osaka which opened
in 1952.

Umesankouji

Chuo Post Office

Hilton Plaza
East

Harton Hotel
Nishiumeda

Daiwa House
Industry

Hilton Osaka

Hilton Plaza
West

Osaka Mode
Gakuen

Herbis ENT

Exit 6-47(Underground)

Umeda
Daibiru
HerbisOsaka

Exit 10(Above Ground)

Osaka Ekimae Daiichi Building
OSAKA CENTRALPOST OFFICE

Sakurabashi

The Ritz Carlton,
Osaka*1 45% quasi co-ownership interest acquired in sectional ownership of the office portion of the building, etc.
*2 Calculated by converting the amount of increase in monthly rental and CAM revenue into that for the full period (6 months) and dividing it by the
number of investment units issued and outstanding (356,800 units).
*3 Figures are rounded down to the indicated digits, and ratios are rounded off.

SubwayYotsubashi
Line

17

SANKEI REAL ESTATE Inc.

2-1 Internal Growth Results- Rent revision performance of office buildings for 4th FP (based on conclusion of contracts)  Upward rent revision (2)A-4S-GATE AKIHABARA

A-5

Hibiya Sankei Building

Rate of rent increase
compared with before

Rate of rent increase
compared with before

Renewal with rent
revision/renewal+15.8%

Renewal with rent
revision/renewal+10.0%

New replacement-

New replacement-

 Reduced downtime and achieved early lease-up of vacant portions
A-9

Omori Park Building

Forecast
Effects of early lease-up
Impact on DPU*1Accrual of rentMove out
4th FP

5th FP

6th FP

Sep 2020 - Feb 2021

Mar - Aug 2021

Sep 2021 -12-month leasing period (Including FR; Anticipating longer
leasing period due to COVID-19 pandemic)＋22 yenStart ofcontract

ResultSep 2020 - Dec 2020

Jan - Mar
2021

Rent generated
reduced by 5 months
Apr 2021 -4-month leasing period + 3 months FR*1 The amount of increase in monthly rental and CAM revenue for 5 months divided by the number of investment units issued and outstanding(356,800 units).
*2 Ratios are rounded to the indicated digits.

18

SANKEI REAL ESTATE Inc.

2-2 Internal Growth Strategy– Reduce rent gap, continue to aim for internal growth - Seize internal growth opportunities while maintaining relationship with tenants even amid the COVID-19 pandemic■ Status of Progress and Schedule of Contract
Revision/Renewal (as of February 28, 2021)■ Rent Gap*1 (for typical floorplate)(Unit: tsubos)

10 office properties
5th FP(ending August 2021)-12.0%-8.5%

As of September 2020

As of March 2021
6th FP(ending February 2022)(on total rent basis; weighted average)

BREEZÉ TOWER
All tenants under fixed-term lease

Rent gap
Strong supply and demand

Pursue re-contract
with rent increase

1,279(8.8%)

1,987(13.6%)

0 tsubos
500 tsubos
1,000 tsubos 1,500 tsubos 2,000 tsubos
Contact
ContractRevision/Renewal
Revision/RenewalArea
Area
Contact(Ratiototo
Total
LeasedArea)
ContractRevision/Renewal
Revision/RenewalPalnned
PlannedArea
Area(RatioTotal
LeasedArea)*3

 Focused properties
A-2

Progress rate*2
45.9%

A-7

Toyo Park Building
Cancellation due to consolidation ofbases

Vacancy rate rising in the area

Strengthen leasing
activities

Assumed occupancy rate of portfolio
5th Fiscal Period (Ending August 2021)
・End of period
98.3%
・Period average 99.3%
6th Fiscal Period (Ending February 2022)
・End of period
100 %・Period average 97.8%*1 “Rent Gap” refers to the figure arrived at when the amount of difference between the average rent for SANKEI REAL ESTATE’s office building portfolio and the market rent calculated based on assumed
new contract rent (typical floorplate) as stated in a market report prepared by CBRE K.K. is divided by the market rent.
*2 “Progress rate” is the value calculated by dividing the total leased area for lease contracts that have been concluded as of February 28, 2021, and whose contract revision/renewal has been completed by
the total leased area for each contract revision/renewal period, rounded to one decimal place.
*3 The leased area of the office buildings subject to “contract revision/renewal planned area” is the figure corresponding to the ownership interest acquired by SANKEI REAL ESTATE in each property. “Ratio
to total leased area” is the value calculated by dividing the total leased area for each contract revision/renewal period by the total leased area as of February 28, 2021, rounded to one decimal place.

19

SANKEI REAL ESTATE Inc.

2-2 Internal Growth Strategy - Continuing strategic leasing -Office leasing market

Current situation

Portfolio of SANKEI REAL ESTATE Decline in market rent and rise in vacancy rate of small- and mediumsized buildings
 Increase in consolidations and relocations not involving floor space
expansion Corporate earnings strong or recovering except for some business types
 Structural change in demand due to entrenchment of remote work, etc.

● Office buildings in prime locations*1● High-performance office buildings*2● Office buildings near work and home*3

Outlook

Well-balanced
possession+
Average rent less expensive than market rent*4

 Rise in vacancy rate gradually easing due to decrease in new supply Future uncertainties clearing Diversification of demand for office locations (central Tokyo, near workand home, etc.)
 Increase in preference for prime locations & high-performance buildings

Occupying tenants not easily affected by
the COVID-19 pandemic
Impact of the COVID-19 pandemic considered limited

Strategic leasing Leasing utilizing the customer base of the group companies, affiliated companies, network-related companies,
etc. of Fuji Media Holdings
 Pursuit of negotiations for rent increase with tenants with a rent gap (especially tenants under fixed-term leases) Diversification of contract period and rescheduling of cancellation notice period ahead of schedule based on
property characteristics and tenant attributes
 Direct leasing by the Asset Management Company
*1
*2
*3
*4

Tokyo Sankei Building, BREEZÉ TOWER, Hibiya Sankei Building, S-GATE AKASAKA, S-GATE NIHONBASHI-HONCHO, and Hatchobori Sankei Building are the applicable properties.
Tokyo Sankei Building, BREEZÉ TOWER, Shinagawa Seaside TS Tower, and the S-GATE Series (AKASAKA, NIHONBASI-HONCHO, and AKIHABARA) are the applicable properties.
Shinagawa Seaside TS Tower, Toyo Park Building, and Omori Park Building are the applicable properties.
Average rent (yen per tsubo) = Rental and CAM revenue upon the most recent settlement / 6 months / Leasable area x Occupancy rate (presented on page 15)

20

SANKEI REAL ESTATE Inc.

3. External Growth Results and Strategy

21

SANKEI REAL ESTATE Inc.

3-1 External Growth Results- Portfolio after acquisition of “S-GATE AKASAKA” -4th FP[As of February 28, 2021](October 1, 2020)

Acquired“S-GATE AKASAKA”

Number of properties

12 properties

Asset size
(Total acquisition price)

71.5 billion yen

Appraisal value*1

79.1 billion yen

Acquisition priceper property

5.9 billion yen

Averageappraisal NOI yield*2

4.3%

Portfolio PML value

1.7%

Occupancy rate*2

Sub assets
18.1%

Investment
Ratio byAsset Type(acquisition price basis)

Office buildings
81.9%

Other
5.6%

99.9%

Close

Average walking time*3

2.6 minutes

New

Average building age*3

16.5 years

Osaka City
18.3%

Investment
Ratio byGeographic
Area(acquisition price basis)

Large

Average typical floorplate*3

299 tsubos
Tokyo 23 wards
76.1%*1 Appraisal value is calculated based on net operating income derived by the direct capitalization method, with February 28, 2021, as the appraisal date for each.
*2 Ratios are rounded to the indicated digits.
*3 Figures are the weighted average based on the acquisition price of each owned property (rounded to the indicated digits).

22

SANKEI REAL ESTATE Inc.

3-2 External Growth Strategy- External growth policy remains unchanged - With strong sponsor support and an abundant pipeline, aim for favorable opportunities for external growth

Pipeline from sponsor<Target asset size>
200 billion yen
to 300 billion yen

Approx. 50 billion yen
to 100 billion yen

Aim for inclusion
in global indexes
FTSE EPRA/Nareit
Global Real Estate Index<Target asset size>

FTSE Global All Cap Index

100 billion yen
Launch a move to obtain
credit rating

71.5 billion yen

Approx. 0.5
to 1 year
At end of 4th FP
February 2021

Short-term target

Mid-term target• Asset size is based on acquisition price.
• The short-term and mid-term asset size targets above are solely the targets, and neither the achievement of the targets nor the timing of achievement are definite or guaranteed.
Furthermore, the timing of achievement of the targets may be delayed due to changes in the investment environment, real estate market conditions, etc. and other reasons.

23

SANKEI REAL ESTATE Inc.

3-2 External Growth Strategy- Investment unit prices recovering, seeking external growth opportunities -(yen)Highest pricesince listing
February 20, 2020

Lowest pricesince listing
March 19, 2020

As ofApril 9, 2021

139,300 yen

66,900 yen

121,400 yen

Peak ratio*1-52.0%-12.8%

Trading volume140,000

SANKEI REAL ESTATE Inc.
9/3 1st PO
execution date

*2

TSE REIT Index

NAV per unit (start is book value, value in financial results announcement thereafter)

8/6 1st PO
launch130,000(units)

10/1 AKASAKA 10/19
acquisition 3rd FP financial results
execution date briefing
9/7 AKASAKA
Distribution: 2,532 yenacquisition+ 9.0% from forecast
announcement
date

2/20
Highest pricesince listing

10,0008,000

120,000
110,000

6,000

100,000

4,000

90,0003/19
Lowest pricesince listing

80,0002,000

70,00060,00019/3/12 19/4/23 19/6/11 19/7/23

0
19/9/3 19/10/17 19/11/29 20/1/16 20/2/28 20/4/10 20/5/27

20/7/7

20/8/20 20/10/2 20/11/13 20/12/25 21/2/9

2/20 Highest price since listing

P/NAV
1.25

1.29

As of 4/9

NAV multiple
1.00

1.00
0.75

21/3/24

3/19 Lowest price since listing

0.59

0.50
*1 Peak ratio = 100% - (Investment unit price (closing price as of relevant date) / highest listed value)*2 The TSE REIT Index is relative to the closing price of investment units on the date of listing of SANKEI REAL ESTATE Inc. (March 12, 2019).

0

0

24

SANKEI REAL ESTATE Inc.

3-2 External Growth Strategy- Being aware of the balance of portfolio matrix - Target competitive properties exceeding portfolio NOI yields in Greater Tokyo and ordinance-designated cities
 For office buildings, place emphasis on location and specifications. For sub-assets, focus on retail and logistics
facilities<Cap. Rate (Appraisal NOI Yield) x Area × Acquisition Price>
Area
Low

0

Tokyo 23 wards(Other than central
2
3 wardsof Tokyo)

Central 3 wards of Tokyo
1(Chiyoda, Chuo, and Minato
wards)

2.5%

Greater Tokyo(Excluding
Tokyo)
3

Tokyo Sankei Building

3.0%

Cap. Rate

3.5%

4.0%

4.5%

5.0%

5.5%

High

S-GATE AKASAKA
Typical floorplate
158 tsubos
5 years old
1-minute walk

Office buildings

Typical floorplate
536 tsubos
20 years old
1-minute walk

S-GATE
HibiyaNIHONBASHI-HONCHO Sankei Building
Typical floorplate
Typical floorplate
186 tsubos
105 tsubos
2 years old
28 years old
4-minute walk
1-minute walk
S-GATE AKIHABARA
Typical floorplate74 tsubos
3 years old
5-minute walk

Hatchobori Sankei Building
Typical floorplate
201 tsubos
55 years old
3-minute walkHotel Intergate
Tokyo Kyobashi
3 years old
1-minute walkOsaka City
Nagoya4City

Other ordinancedesignated cities
Core cities, major 5
regional cities

Sub assets* The size of bubble depends on the acquisition price

Omori Park Building
Typical floorplate342 tsubos
27 years old
3-minute walk

Shinagawa Seaside
TS Tower
Typical floorplate
446 tsubos
17 years old
1-minute walkTargetToyo Park Building
Typical floorplate
219 tsubos
29 years old
9-minute walk

BREEZÉ TOWER
Typical floorplate
406 tsubos
12 years old
3-minute walkHotel Intergate
Hiroshima
2 years old
3-minute walk

6.0%

25

SANKEI REAL ESTATE Inc.

3-2 External Growth Strategy- Sub-assets are also being developed, centering on office buildings ■Main lineup of sponsor
Hareza Tower

Honmachi Sankei Building

Overview

Overview
Honmachi, Chuo-ku, Osaka-shi,
Osaka

Location

Construction completion August 2021 (scheduled)
Total floor area

29,698 m²

Number of floors

21 floors above ground

Location

Higashi-Ikebukuro, Toshima-ku,
TokyoConstruction completion

May 2020

Total floor area

Approx. 68,600 m²

Number of floors

33 floors above ground and 2 floors
below groundOtemachi Financial City North Tower
S-GATE HATCHOBORI

Overview

Overview

Location

Otemachi, Chiyoda-ku, Tokyo

Location

Hatchobori, Chuo-ku, Tokyo

Construction completion

October 2012

Construction completion

February 2020

Total floor area

Approx. 110,000 m²

Total floor area

Approx. 3,920 m²
Number of floors

31 floors above ground, 4 floors
below ground and 2-story
penthouse

Number of floors

10 floors above ground

Shinagawa Seaside TS Tower

Logistics facilities (sponsor-developed properties)

Overview
Location

Higashi-Shinagawa, Shinagawa-ku,
TokyoConstruction completion

July 2003

Total floor area

Approx. 52,977 m²

Number of floors

25 floors above ground and 2 floors
below ground* The properties listed above are not properties that are expected to be acquired by SANKEI REAL ESTATE Inc.

Osaka Area

Greater Tokyo

2 properties

2 properties

26

SANKEI REAL ESTATE Inc.

MEMO

27

SANKEI REAL ESTATE Inc.

4. Financial Strategy

28

SANKEI REAL ESTATE Inc.

Financial Strategy- Financial highlights (1) - Maintain stable financial base through lender composition centering on mega banks
 Lender Composition (as of March 12, 2021)

 Financing Highlights (as of March 12, 2021)
Balance of interestbearing liabilities

37.8 billion yen

LTV ratio*1

47.6%

Ratio oflong-term debt*2

88.6%

Ratio offixed-rate debt

73.0%

Average financing
interest rate*3

0.34%

Average remaining
time to maturity

2.2 years

 LTV Ratio During Normal Operations
End of 4th FP
LTV ratio

47.6%

End of 5th FP
47.5%(Forecast)End of 6th FP
47.4%(Forecast)

Stable bank formation through financing from 7
leading financial institutions of Japan

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of Japan Inc.

[Unit: million yen]
Borrowing
Percentage
amount13,400
35.4%
6,500

17.2%

5,600

14.8%

Mizuho Trust & Banking Co., Ltd.

3,540

9.4%

Sumitomo Mitsui Trust Bank, Ltd.

3,200

8.5%

Shinsei Bank, Limited

2,780

7.4%

Resona Bank, Ltd.

2,780

7.4%

7 banks in total

37,800100.00%*1 “LTV ratio” is total interest-bearing liabilities divided by total assets, rounded to one decimal place.
*2 “Long-term debt ” used in the calculation of the “Ratio of long-term debt” does not include long-term borrowings due within one year.
*3 “Average financing interest rate” is the average of applicable interest rates at March 12, 2021. Calculations are on an interest payable basis and do not include arrangement fee and other borrowing
related expenses.

29

SANKEI REAL ESTATE Inc.

Financial Strategy- Financial highlights (2) - Continue to promote also staggering of the maturity ladder Maturity Ladder for Interest-Bearing Liabilities (as of March 12, 2021)

 Refinanced borrowing due in the 5th FP (March 12, 2021)  Conducted borrowing related to the acquisitionof “S-GATE AKASAKA” in the 4th FP (October 1, 2020)
4.8 billion yen
Long-term borrowing
Floating interest rate, 2 years

4.8 billion yen
Long-term borrowing
Fixed interest rate, 4 years

4.3 billion yen
Long-term borrowing
Floating interest rate

(Unit: million yen)

7,000

6,000
5,900

5,900

5,600

5,000
4,800

4,000

4,800
4,300

4,300
3,700

3,300

3,000

2,000

1,000

0
4th FP

5th FP

6th FP

7th FP

8th FP

9th FP

Long-term borrowings

10th FP

11th FP

12th FP

13th FP30

SANKEI REAL ESTATE Inc.

5. ESG Initiatives

31

SANKEI REAL ESTATE Inc.

ESG Initiatives: ESG Topics (1) - Establishment of sustainability policy, etc. Sustainability Policy
 Established for the purpose of enhancing sustainability initiatives based on the recognition that consideration forsustainability is essential to the sustainable improvement of SANKEI REAL ESTATE’s medium- to long-termcompetitiveness and unitholder value(1) Preserving the earth environment and reducing theenvironmental load of assets under management(4) Working with executives and employees(2) Serving the local community(5) Observing compliance and establishing/maintaining aninternal control system(3) Cooperating with external stakeholders(6) Disclosing ESG information and securing transparency

Sustainability Promotion System Rules

Various Policies and Manuals

 Providing for establishment of various policies, internal
structure of the Asset Management Company, basic
policies on cooperating with external stakeholders andinformation disclosure, and other matters related tosustainability

 The following policies and manuals havebeen established to put the Sustainability
Policy into practiceSustainability Promotion System
Chief Sustainability Officer: Executive Deputy President
Sustainability Officer: General Manager of Investment
Management Department

Sustainability promotion meetings: Examining and planningvarious policies, targets, and measures related tosustainability

Policy on energy conservation
Policy on greenhouse gas emissions reduction
Policy on saving water
Policy on sustainable procurement
EMS operational manual32

SANKEI REAL ESTATE Inc.

ESG Initiatives: ESG Topics (2)Governance (Internal Control)Sponsor Commitment: Promotion of Same-Boat Investment by Sponsor
 Sankei Building, the sponsor, conducted additional acquisition of the investment units of SANKEI REAL ESTATE in the 4th
FP, too With further increase in same-boat investment with the unitholders of SANKEI REAL ESTATE, strong sponsor support
contributing to the medium- to long-term growth of SANKEI REAL ESTATE is expected
End of 2nd FP

End of 3rd FP

Additionally acquiredunits

End of 4th FP

Number of investment units
issued and outstanding

356,800 units

356,800 units－

356,800 units

Number of units
held by sponsor

11,362 units

14,979 units

2,500 units

17,479 units

3.18%

4.19%

0.70%

4.89%

Percentage of units
held by sponsor

Participation in 2021 GRESB Real Estate Assessment


GRESB Real Estate Assessment: A global investment benchmark established as a tool to measure the environmental, social, andgovernance (ESG) considerations of individual companies and funds in the real estate sector and used to select investment
targets and engage in dialogue with investment targets.
■ Roadmap (planned)
2021
Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

● Assessment opens
Prepare response
Validation and scoring● Release of preliminary results● Release of final results

33

SANKEI REAL ESTATE Inc.

ESG Initiatives: Environment (1) Received DBJ Green Building Certification, which certifies properties that give proper care to theenvironment and society, for 5 properties (including 2 properties for which the sponsor received certification) among
12 properties under management
S-GATE NIHONBASHI-HONCHO

A-10 S-GATE AKASAKA

A-4 S-GATE AKIHABARA

A-3 (51% co-ownership interest)

Recipient: SANKEI REAL ESTATE Inc.

(60% quasi co-ownership interest)

Recipient: SANKEI REAL ESTATE Inc.

Recipient: SANKEI REAL ESTATE Inc.

A-1 Tokyo Sankei Building(2% co-ownership interest)

Recipient: The Sankei Building Co., Ltd. (sponsor)

A-2

BREEZÉ TOWER(45% quasi co-ownership interest in sectional ownership of theoffice portion of the building, etc.)

Recipient: The Sankei Building Co., Ltd. (sponsor)

34

SANKEI REAL ESTATE Inc.

ESG Initiatives: Environment (2) Approximately 30% progress in switching to LED at both the exclusively owned areas and common areasof office buildings

Major environmental initiatives
Tokyo Sankei Building
Installation of energy-saving and long-life
LED lighting Sequentially introduce LED lighting and dimming control systems
 Increase the number of dimming and blinking sections, enabling narrowing down of thenecessary lighting areas
 Introduce lighting control by brightness sensor, allowing the office illumination settings tobe freely set from the disaster prevention centerTokyo Sankei Building,and BREEZÉ TOWER
Installation of electric vehicle (EV)chargers

 Install electric vehicle (EV) charger in the parking lot as part of Sankei Building’s
environmental protection measures
 Install 200V fast charger that can recharge standard electric vehicles to 80% in 30 minutesat BREEZÉ TOWERTokyo Sankei Building
Installation of community cycle ports

 Install Chiyoda Ward’s community cycle service ports as social contribution activities insupport of the project that Chiyoda Ward is proactively working on as activities to reduce
CO2 emissions and raise environmental awareness

BREEZÉ TOWER
Reduction of building heat load Improve comfort and reduce solar heat with double skin/Low-e glass

BREEZÉ TOWER
Effective use of natural energy

 Adopt automatic dimming control with the use of daylight and correction of initial
illuminance Use of indirect light with blind automatic control system
 Achieve energy saving using outside air-cooling system in the middle period and winter Adopt solar power system

BREEZÉ TOWER
Effective use of water resources andconsideration for surrounding
environment Reuse of rainwater and greywater (use as toilet flushing water, and automatic plant
irrigation) Water-saving effect with the adoption of water-saving equipment

S-GATE
Rooftop greening (establishment ofterrace) and greenery at entrance Rooftop greening efforts and establish terrace, and use greenery also at the entrance foran open and bright approach

35

SANKEI REAL ESTATE Inc.

ESG Initiatives: Social
 Response to the COVID-19 pandemic

Poster on preventing
the spread of COVID-19

PreventionIntroduce remote work and staggered commuting
Prepare alcohol disinfectants at common areas
Health management of property management staff
Display posters for preventing the spread of infection

When someone is infected with COVID-19


Identify the behavioral history of infected persons andpersons who had close contact with them
Implement disinfection work at the office and common areas
Contact the tenants, etc. who use the building

Installation of artwork（Tokyo Sankei Building）

 Relationship with stakeholders
Measures for employeesDevelop a comfortable office environment
Human resources development: Implement various training
Work-style support: Childcare and nursing care support

Measures for tenantsRoom for employees

Distribute disaster prevention goods

Implement disaster prevention drills, and distribute disasterprevention goods
Conduct tenant satisfaction surveys

Connection with the communityInstallation of artwork
36

SANKEI REAL ESTATE Inc.

Appendix

37

SANKEI REAL ESTATE Inc.

4th Fiscal Period (Ended February 2021) Balance Sheet (Unabridged)(Unit: thousand yen)

3rd FP
4th FP(as of Aug. 31, 2020) (as of Feb. 28, 2021)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Land
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust , net
Land in trust
Construction in progress in trust
Total property, plant and equipment
Intangible assets
SoftwareTotal intangible assets
Investments and other assets
Long-term prepaid expenses
Deferred tax assets
Leasehold and guarantee deposits
Total investments and other assets
Total non-current assets
Total assets

3,876,992
3,283,341
87,95751,898567,790
7,867,979

4,147,117
2,797,010
54,096
46,597
9,321
41,015
7,095,157

165,538(8,698)156,839
353
(12)
340
2,457,766
13,624,054(547,766)
13,076,288
22,236(813)
21,422
2,608
(208)
2,400
25,419(1,901)
23,51852,510,871
330
68,249,777

166,032(11,908)
154,123
353
(16)
336
2,457,766
14,296,308(769,403)
13,526,905
23,602(1,122)
22,479
2,875
(348)
2,526
27,889(3,719)24,17056,132,321
8,103
72,328,733

6,713
6,713

5,773
5,773

60,79314
10,00070,80768,327,298
76,195,278

43,23713
10,00053,251
72,387,757
79,482,915

3rd FP
4th FP(as of Aug. 31, 2020) (as of Feb. 28, 2021)
Liabilities
Current liabilities
Operating accounts payable
Long-term borrowings due within 1 year
Accounts payable – otherAccrued expenses
Income taxes payable
Consumption taxes payable
Advances received
Deposits received
Total current liabilities
Non-current liabilities
Long-term borrowings
Leasehold and guarantee deposits received
Leasehold and guarantee deposits received in trust
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Surplus
Unappropriated retained earnings (undisposed loss)
Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets

205,1284,800,000
214,600
26,272893
129,470
328,557
1,205,174
6,910,097

170,1129,100,000
219,582
26,175879
373,814
7,496
9,898,060

28,700,000
92,935
3,047,718
31,840,654
38,750,751

28,700,000
79,585
3,247,634
32,027,219
41,925,280

36,540,901

36,540,901

903,625
903,625
37,444,526
37,444,526
76,195,278

1,016,734
1,016,734
37,557,635
37,557,635
79,482,915

38

SANKEI REAL ESTATE Inc.

4th Fiscal Period (Ended February 2021) Statement of Income (Unabridged)(Unit: thousand yen)
3rd FP

4th FP(ended Aug. 2020)(ended Feb. 2021)

Operating revenue
Leasing business revenue
Other leasing business revenue

1,878,684

2,015,771

126,823

132,1632,005,507

2,147,934

Expenses related to leasing business

778,934

790,014

Asset management fee

Total operating revenue
Operating expenses

183,485

186,562

Asset custody fee

1,505

1,568

Administrative service fees

6,370

7,065

Remuneration for directors (and other officers)

3,600

3,600

Other operating expenses

35,23040,510Total operating expenses

1,009,126

1,029,320

996,380

1,118,614

Interest income

32

21Interest on refund

323-

Other non-operating income-

0

Total non-operating income

356

21

Interest expenses

58,586

61,565

Borrowing related expenses

33,79037,660Operating profit
Non-operating income

Non-operating expenses

Other non-operating expenses

-

2,000

Total non-operating expenses

92,377

101,225

Ordinary profit

904,359

1,017,409

Net profit before income taxes

904,359

1,017,409

Income taxes - current

898

882

Income taxes - deferred

2

0

901

883

903,458

1,016,526

167

207

903,625

1,016,734

Total income taxes
Net profit
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)

39

SANKEI REAL ESTATE Inc.

4th Fiscal Period (Ended February 2021) Statement of Cash Flows(Unit: thousand yen)

3rd FP

4th FP(ended Aug. 2020)(ended Feb. 2021)

Cash flows from operating activities
Net profit before income taxes
Depreciation
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 leasehold and guarantee deposits received
Refund of leasehold and guarantee deposits received
Proceeds from leasehold and guarantee deposits received in trust
Refund of leasehold and guarantee deposits received in trust
Net cash provided by (used in) investing activities
Cash flows from financing activities
Repayments of short-term borrowings
Proceeds from long-term borrowings
Distribution 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

904,359
220,471(32)
58,586(23,792)
369,256(10,700)
58,29752,356
129,470(12,866)
254,170(915)(225,717)
1,772,944
32(57,188)(951)
1,714,837

1,017,409
228,057(21)
61,565
34,103(9,321)
5,300(54,667)
4,076(129,470)
45,256(1,197,677)
17,555
526,775
548,943
21(61,662)(896)
486,405(5,747)(46,376)
1,400
(502)
142,697(8)
91,461(493)(4,286,634)
81(12,724)
232,800(33,127)(4,100,099)(4,756,000)
4,300,000(1,067,674)(1,523,674)
282,624
6,877,708
7,160,333

4,300,000(902,512)
3,397,487(216,205)
7,160,333
6,944,12740

SANKEI REAL ESTATE Inc.

Key Performance Indicators (KPIs)
3rd FP

4th FP

3rd FP

4th FP(ended Aug. 2020)(ended Feb. 2021)(ended Aug. 2020)(ended Feb. 2021)(against total assets)

44.0%

47.6%

Distribution per unit

2,532 yen

2,849 yen(against total assets <considering
unrealized gain/loss>)

40.0%

43.8%

Distribution yield

5.6%

5.2%

(against book value)

4.2%

4.4%

ROE

4.8%

5.4%

(against appraisal value)

3.8%

4.0%

Net assets per unit

104,945 yen

105,262 yen(against book value)

3.6%

3.8%

NAV per unit

126,023 yen

124,489 yen(against appraisal value)

3.2%

3.4%

Investment unit price (at end of period)

90,800 yen

110,200 yen(NOI yield)

4.7%

4.3%

NAV multiple

0.7x

0.9x

(NOI yield after depreciation)

4.0%

3.7%

PBR

0.9x

1.0x

FFO

1,122 million yen 1,243 million yen

PER

17.9x

19.3x

AFFO

1,068 million yen 1,201 million yen

FFO multiple

14.4x

15.8x

(FFO)

80.4%

81.7%

(AFFO)

84.5%

84.6%

LTV

NOI yield

NOI yield after
depreciation

Implied cap rate

FFO per unit

3,147 yen

3,485 yen
Payout ratio

EPS

2,532 yen

2,849 yen

*1. LTV (against total assets) = Interest-bearing liabilities / Total assets (book value)
LTV (against total assets <considering unrealized gain/loss>) = Interest-bearing liabilities / (Total assets(book value) + unrealized gain/loss)*2. NOI yield (against book value) = (Operating income from real estate leasing + Depreciation) /Book valueof real estate for lease
NOI yield (against appraisal value) = (Operating income from real estate leasing + Depreciation) /Appraisal value of real estate for lease*3. NOI yield after depreciation (against book value) = Operating income from real estate leasing / Book
value of real estate for lease
NOI yield after depreciation (against appraisal value) = Operating income from real estate leasing /Appraisal value of real estate for lease*4. Implied cap rate (NOI yield) = NOI (Annualized result of current FP x 2) / (Total fair value +Interestbearing liabilities – Cash and deposits + Leasehold deposits received)
Implied cap rate (NOI yield after depreciation) = NOI after depreciation (Annualized result of current FPx2) / (Total fair value + Interest-bearing liabilities – Cash and deposits + Leasehold deposits received)*5. FFO = Net profit + Depreciation – Gain/loss on sales of real estate properties (including loss onretirement of non-current assets)*6. AFFO = FFO – Capital expenditure*7. FFO per unit = FFO / Total number of investment units issued and outstanding at end of period*8. EPS = Net profit / Total number of investment units issued and outstanding at end of period*9. Distribution per unit = Total distribution / Total number of investment units issued andoutstanding at end of period*10. Distribution yield = Distribution per unit (Annualized result of current FP x 2) / Investment
unit price (at end of period)*11. ROE (Return on equity) = Net profit (Annualized most recent result x 2) / Net assets*12. NAV per unit = (Net assets + Unrealized gain/loss) / Total number of investment units
issued and outstanding at end of period*13. NAV multiple = Investment unit price (at end of period) / NAV per unit
*14. PBR (Price Book-value Ratio) = Investment unit price (at end of period) / Net assets perunit*15. PER (Price Earnings Ratio) = Investment unit price (at end of period) / EPS (Annualized
most recent result x 2)
*16. FFO multiple = Investment unit price / FFO per unit (Annualized most recent result x 2)
*17. Payout ratio (FFO) = Total distribution / FFO*18. Payout ratio (AFFO) = Total distribution / AFFO
*19. Figures are rounded down to the indicated digits (Percentages and multiples are rounded
to one decimal place.)

41

SANKEI REAL ESTATE Inc.

Status of Lenders (as of March 12, 2021)
LenderBorrowingamount(million yen)Interest rate(*1)

Maturity
date(*2)

Repayment
methodDescription

Term

LenderBorrowingamount(million yen)Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of Japan Inc.

1,574

Mizuho Bank, Ltd.

1,084

Sumitomo Mitsui Banking
Corporation
Development Bank of Japan Inc.

2,000

Mizuho Trust & Banking Co., Ltd.

593

Mizuho Trust & Banking Co., Ltd.

620

Sumitomo Mitsui Trust Bank, Ltd.

542

Sumitomo Mitsui Trust Bank, Ltd.

550

Shinsei Bank, Limited

439

Shinsei Bank, Limited

490

Resona Bank, Limited

439

Resona Bank, Limited

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of Japan Inc.

972

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of Japan Inc.

1,167

Mizuho Trust & Banking Co., Ltd.

456

Sumitomo Mitsui Trust Bank, Ltd.

416

Shinsei Bank, Limited

358

Resona Bank, Limited

358

929

614
392

Sumitomo Mitsui Trust Bank, Ltd.

358

324

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of Japan Inc.

856

March 12,2023

Lump-sum
repayment
at maturity

639
548

Mizuho Trust & Banking Co., Ltd.

350

Sumitomo Mitsui Trust Bank, Ltd.

319

Resona Bank, Limited

0.42346%(fixed)324

Resona Bank, Limited

Shinsei Bank, Limited

March 12,
2022

716

Mizuho Trust & Banking Co., Ltd.

Shinsei Bank, Limited

0.36969%(fixed)0.49096%(fixed)March 12,
2024

294
294

Unsecured
Nonguaranteed

Long-term borrowings

Long-term borrowings

Term

Description

0.36200%(fixed)September 3,2023

0.32923%(fixed)September 12,
Lump-sum2024
repayment
at maturity

Unsecured
Nonguaranteed

490

832
713

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank of Japan Inc.

1,331

Mizuho Trust & Banking Co., Ltd.

509

Sumitomo Mitsui Trust Bank, Ltd.

465

Shinsei Bank, Limited

385

Resona Bank, Limited

385

929
796

Mizuho Bank, Ltd.

4,300

1,500

Total

37,800Sumitomo Mitsui Trust Bank, Ltd.

550

Shinsei Bank, Limited

490

Resona Bank, Limited

490

September 3,
2022

Repayment
method800

2,250

0.27909%(floating)Maturity
date
(*2)

950

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

620

Interest rate(*1)

0.36978%(fixed)March 12,2025

0.22727%(floating)

October 1,
2021*1. Interest rates indicated are the applicable interest rates as of March 12, 2021.
*2. If the maturity date is not a business day, it will be the following business day.

42

SANKEI REAL ESTATE Inc.

4th Fiscal Period (Ended February 2021) Statement of Income from Leasing by Property(Unit: thousand yen)
Property number

A-1

A-2

A-3

A-4

A-5

A-6

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Property nameTokyo
Sankei Building

BREEZÉ TOWER

S-GATENIHONBASHIHONCHO

S-GATEAKIHABARA

HibiyaSankei Building

Hatchobori
Sankei Building

Leasing business revenue

60,396531,280

160,52962,652

209,800

176,523

Rental revenue

49,010418,757

153,523

59,774

183,364

145,970

CAM revenue

2,438

88,165--

13,232

13,790Utilities reimbursement

5,219

16,134

4,105

2,448

10,131

8,809

764

7,241

2,763

378

1,932

6,476

Other rental revenue

2,963

981

137

51

1,140

1,475

Expenses related toleasing business

30,012

211,497

43,374

25,10092,89560,826

Outsourcing expenses

6,158

65,762

8,998

8,505

18,07517,048

Utilities expenses

3,023

31,174

4,818

2,489

8,323

10,108Property taxes

12,30337,132

10,6104,821

53,901

10,144

683

1,135

-

-

-

-

Repair expenses

2,171

10,211

-

618

6,041

6,331

Insurance premium

112

954

353

170

308

474

-

(328)

250

250

250

250

3,213

63,29818,036

7,623

5,561

15,767

2,346

2,157

306

620

435

701

30,383319,783

117,155

37,552

116,904

115,696

33,597

383,081

135,192

45,176

122,466

131,463

Parking revenue

Land rent

Trust fee
Depreciation
Other expenses fromleasing
Operating income (loss)
from leasing
NOI*1 The information is “Not disclosed” due to unavoidable circumstances in that such contains information for which consent for disclosure has not beenobtained from the tenant, relevant party, etc. or information from which confidential information can be derived.
*2 Figures are rounded down to the indicated digits.

43

SANKEI REAL ESTATE Inc.

4th Fiscal Period (Ended February 2021) Statement of Income from Leasing by Property(Unit: thousand yen)
Property number

A-7

A-8

A-9

A-10

B-1

B-2

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Sub assets

Sub assets

Property name

Toyo
Park Building

Shinagawa Seaside
TS Tower*1

Omori
Park Building

S-GATEAKASAKA*1

Hotel Intergate
Tokyo Kyobashi

Hotel Intergate
Hiroshima

Leasing business revenue

Total

115,778

154,633

206,955

118,800

2,147,934

Rental revenue

84,030125,452

206,955

118,800

1,868,319

CAM revenue

19,78810,037--

147,452

Utilities reimbursement

9,539

12,970--93,366

Parking revenue

2,340

5,400

-

-

30,655

80

773

-

-

8,141

54,436

43,574790,014

Other rental revenue
Expenses related toleasing business

38,337(Not
disclosed)

65,709(Not
disclosed)

Outsourcing expenses

9,094

15,349

1,200

1,800

183,374

Utilities expenses

7,553

16,007--110,924

Property taxes

7,619

16,04725,62915,388214,815

-

-

-

-

1,818

Repair expenses

3,627

1,654

-

19

35,844

Insurance premium

257

493

543

496

4,664

Trust fee

350

350

250

250

2,371

26,77025,572

227,117

43

47

9,081

Land rent

Depreciation
Other expenses fromleasing
Operating income (loss)
from leasing
NOI

9,519

30,079315

15,2206,453

586

77,441

167,855

88,92358,478

152,519

75,225

1,357,920

86,960

197,935

104,144

64,931

179,289

100,798

1,585,038*1 The information is “Not disclosed” due to unavoidable circumstances in that such contains information for which consent for disclosure has not beenobtained from the tenant, relevant party, etc. or information from which confidential information can be derived.
*2 Figures are rounded down to the indicated digits.

44

SANKEI REAL ESTATE Inc.

Portfolio List (1) (as of February 28, 2021)
Property number

A-1

A-2

A-3

A-4

A-5

A-6

Asset type

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Office buildings

Property nameTokyo Sankei Building

BREEZÉ TOWER

S-GATENIHONBASHI-HONCHO

S-GATE AKIHABARA

HibiyaSankei Building

Hatchobori
Sankei Building(2% co-ownershipinterest)(45% quasi co-ownershipinterest in sectional
ownership of the officeportion of the building, etc.)(51% co-ownershipinterest)

Chiyoda-ku, Tokyo

Kita-ku, Osaka-shi

Chuo-ku, Tokyo

Chiyoda-ku, Tokyo

Chiyoda-ku, Tokyo

Chuo-ku, Tokyo

Acquisition dateMar. 12, 2019

① Mar. 12, 2019
② Sep. 3, 2019*

Mar. 12, 2019

Mar. 12, 2019

Mar. 12, 2019

Mar. 12, 2019

Acquisition price

2,509 million yen

13,100 million yen

6,698 million yen

2,055 million yen

5,829 million yen

4,959 million yen

Appraisal value

2,690 million yen

17,235 million yen

7,470 million yen

2,530 million yen

6,340 million yen

5,500 million yen

2.9%

5.5%

3.8%

4.4%

3.6%

5.1%

Sep. 2000

Jul. 2008

Oct. 2018

Sep. 2017

Jun. 1992

Sep. 1965

Occupancy rate

91.6%

100.0%

100.0%

100.0%

100.0%

100.0%PML value

2.3%

2.8%

2.0%

2.2%

3.1%

0.3%

Location

Appraisal NOI yield(Appraisal NOI/Acquisition price)
Construction completion* The first acquisition of BREEZÉ TOWER was made on March 12, 2019, and the second acquisition on September 3, 2019.

45

SANKEI REAL ESTATE Inc.

Portfolio List (2) (as of February 28, 2021)
Property number

A-7

Asset type

Property name

A-8

A-9

A-10

Office buildings

Office buildings

Office buildings

Office buildings

Sub assets

Sub assets

Toyo Park Building

Shinagawa Seaside
TS Tower

S-GATE AKASAKA

Hotel Intergate
Tokyo Kyobashi

Hotel Intergate
Hiroshima

Omori Park Building(25% quasi co-ownershipinterest in sectional
ownership of the building,
etc.)

B-1

B-2

(60% quasi co-ownershipinterest)

Location

Koto-ku, Tokyo

Shinagawa-ku, Tokyo

Ota-ku, Tokyo

Minato-ku, Tokyo

Chuo-ku, Tokyo

Naka-ku, Hiroshima-shi

Acquisition dateMar. 12, 2019

Sep. 3, 2019

Sep. 3, 2019

Oct. 1, 2020

Mar. 12, 2019

Sep. 3, 2019

Acquisition price

3,782 million yen

10,040 million yen

5,400 million yen

4,200 million yen

8,961 million yen

3,990 million yen

Appraisal value

3,610 million yen

11,000 million yen

5,490 million yen

4,266 million yen

8,970 million yen

4,080 million yen

4.0%

4.3%

4.1%

3.3%

3.9%

4.9%

Construction completion

Jun. 1991

Jul. 2003

May 1993

Jul. 2015

Jan. 2018

Oct. 2018

Occupancy rate

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%PML value

9.0%

3.2%

5.6%

4.6%

1.8%

2.1%

Appraisal NOI yield(Appraisal NOI/Acquisition price)

PML value (average)

1.7%

46

SANKEI REAL ESTATE Inc.

Overview of Appraisal Value at the End of 4th Fiscal Period(Unit: million yen)
End of 4th FP*2

At acquisition*1

Property
number

Property nameAcquisition
price

End of 4th FP
Book value(a)Appraisal value

Change(February 28, 2021) (b)CR*3

Appraisal value

Unrealized
gain/loss(b)-(a)CR*3

Appraisal value

CR*3

Tokyo Sankei Building(2% co-ownership interest)
BREEZÉ TOWER(45% quasi co-ownership interest in sectional
ownership of the office portion of the building,etc.)
S-GATE NIHONBASHI-HONCHO(51% co-ownership interest)

2,509

2,612

2,540

2.6%

2,690

2.5%

150

-0.1pt78

13,10013,13013,905

3.9%

17,235

3.8%

3,330

-0.1pt

4,105

6,698

6,725

6,780

3.7%

7,470

3.3%

690

-0.4pt745

A-4

S-GATE AKIHABARA

2,055

2,059

2,080

3.8%

2,530

3.5%

450

-0.3pt471

A-5

Hibiya Sankei Building

5,829

6,051

5,900

3.3%

6,340

3.0%

440

-0.3pt289

A-6

Hatchobori Sankei Building

4,959

5,020

5,020

4.2%

5,500

4.1%

480

-0.1pt480

A-7

Toyo Park Building

3,782

3,881

3,790

4.2%

3,610

4.0%

-180

-0.2pt-271

A-8

Shinagawa Seaside TS Tower(25% quasi co-ownership interest in sectional
ownership of the building, etc.)

10,040

10,132

10,200

3.6%

11,000

3.6%

800

0.0pt

868

A-9

Omori Park Building

5,400

5,477

5,600

3.9%

5,490

3.8%

-110

-0.1pt13

A-10

S-GATE AKASAKA(60% quasi co-ownership interest)

4,200

4,249

4,266

3.2%

4,266

3.2%

0

0.0pt

17

58,574

59,34060,081

A-1

A-2

A-3

Office buildings subtotal (total of 10 properties)

66,131

6,050

6,791

B-1

Hotel Intergate Tokyo Kyobashi

8,961

9,004

9,070

3.8%

8,970

3.8%

-100

0.0pt

-34

B-2

Hotel Intergate Hiroshima

3,990

3,974

4,080

4.6%

4,080

4.6%

0

0.0pt

106

Sub assets subtotal (total of 2 properties)

12,951

12,97913,15013,050-100

71

Portfolio total (total of 12 properties)

71,52572,32073,231

79,181

5,950

6,861

*1. The appraisal value with October 31, 2018, as the appraisal date is indicated for A-1, A-3 to A-7, and B-1, the appraisal value with July 1, 2019, as the appraisal date for A-8, A-9, and B-2, thetotal appraisal value with October 31, 2018, and July 1, 2019, as the appraisal dates for A-2, and the appraisal value with August 1, 2020, as the appraisal date for A-10.
*2. The appraisal value with February 28, 2021, as the appraisal date.
*3. CR is a cap rate based on direct capitalization method (NCF basis). For the CR at the time of acquisition of BREEZÉ TOWER, the weighted average based on each acquisition price of the quasi coownership interest in sectional ownership of the office portion of the building, etc. acquired on March 12, 2019, and September 3, 2019, is stated.

47

SANKEI REAL ESTATE Inc.

Portfolio at End of 4th Fiscal Period
SANKEI REAL ESTATE's high-quality portfolio is supported by strong sponsor support

Sponsor support rate 100%
Close

New

Large

Percentage by Walking
Time to the Nearest Station*1

Percentage by
Building Age*1

Percentage by
Typical Floorplate*1

Within 1 minute 44%
Within 3 minutes 83%
Within 5 minutes 95%
More than
5 minutes

Within 10 years 36%
Within 20 years 69%
Within 30 years 93%

Less than
100 tsubos

More than
30 yearsMore than
5.3%
3 minutes,
but within 5
minutes

3.5%

6.9%
100 tsubos or more,
but less than 200 tsubos

12.2%

Average

Large-scale buildings 68%*3
Large buildings
96%*2

2.6 minutes
More than 1 minute,but within 3 minutes

38.4%

All Properties

Within
1 minute

44.1%

More than 20 years,
but within 30 years

24.5%

Average*2

16.5 years

More than
15 years,
but within
20 years

14.0%

Within
10 years

28.6%

36.2%

More than
10 years, but
within 15 years

18.3%

All Properties*1 Calculated based on the acquisition price of each owned property as of February 28, 2020.
*2 Figures are the weighted average based on the acquisition price of each owned property (rounded to the indicated digits).
*3 Calculated based on the definition of "Large-scale buildings: 200 tsubo or more" and "Large buildings: 100 tsubos or more, but less than 200 tsubos"
made by Sanko Estate Co., Ltd.

Average*2299 tsubos

400 tsubos
or more43.8%

200 tsubos
or more, but lessthan 300 tsubos 300 tsubos or more,
but less than 400
tsubos
14.9%

9.2%

Office Buildings Only
48

SANKEI REAL ESTATE Inc.

Portfolio Matrix at End of 4th Fiscal Period (1)<Cap. Rate (Appraisal NOI Yield) x Area>

Area(Unit: million yen)

Area

Appraisal
NOI
CAP
Less than
3.0%
Less than
3.5%

Central 3 wards of Tokyo

Tokyo 23 wards(Chiyoda, Chuo, and Minato wards)(Other than the central 3 wards of Tokyo)

Property name
Building age, walking
time from station

Greater Tokyo(Excluding
Tokyo)

Property nameAcquisition price(million yen)

Building age, walking
time from station

Osaka City

Other ordinance-designated cities

Total acquisition
price

Nagoya City

Core cities, major regional cities(Overall ratio)

Property name
Building age, walking
time from station

Acquisition price(million yen)

Property nameAcquisition price(million yen)

Building age, walking
time from station

Acquisition price(million yen)

Tokyo Sankei Building
20 years old,
1-minute walk

2,509
2,509

(3.5%)S-GATE AKASAKA
5 years old,
1-minute walk

4,200
4,200

(5.9%)

Cap. Rate

Hibiya Sankei Building
28 years old,
1-minute walkLess than
4.0%

5,829

S-GATE NIHONBASHI-HONCHO
2 years old,
4-minute walk

21,4886,698(30.0%)

Hotel Intergate Tokyo Kyobashi
3 years old,
1-minute walk

8,961

S-GATE AKIHABARA
3 years old,
5-minute walk

Shinagawa Seaside TS Tower
2,055

17 years old,
1-minute walk

10,040Omori Park Building

Less than
4.5%

27 years old,
3-minute walk

21,2775,400(29.7%)

Toyo Park Building
29 years old,
9-minute walk

3,782

Hotel Intergate Hiroshima

Less than
5.0%
5.0%
or more2 years old,
3-minute walk

Hatchobori Sankei Building
55 years old,
3-minute walkTotalacquisition
price(Overall ratio)

BREEZÉ TOWER
12 years old,
3-minute walk

4,959

35,211

19,222(49.2%)(26.9%)

－

3,990

3,990
(5.6%)
18,05913,100(25.2%)

13,1003,990

71,525(18.3%)(5.6%)(100.0%)

Typical Floorplate * Office Buildings Only
400 tsubos
or moreLess than 400 tsubos, but
200 tsubos or more

Less than 200 tsubos, but
100 tsubos or more

Less than 100
tsubos49

SANKEI REAL ESTATE Inc.

Portfolio Matrix at End of 4th Fiscal Period (2)<Typical floorplate x Area>
Area(Unit: million yen)
Area

Typicalfloorplate(tsubo)Typical floorplate (tsubo)

400 tsubos
or moreLess than
400 tsubos
300 tsubos
or moreLess than
300 tsubos
200 tsubos
or moreCentral 3 wards of Tokyo

Tokyo 23 wards(Chiyoda, Chuo, and Minato wards)(Other than the central 3 wards of Tokyo)

Property name

Property name

Building age, walking
time from station

Acquisition price(million yen)

Tokyo Sankei Building
20 years old,
1-minute walk

2,509

Hatchobori Sankei Building
55 years old,
3-minute walk

4,959

Building age, walking
time from station

Greater Tokyo(Excluding
Tokyo)

Acquisition price(million yen)

Other ordinance-designated cities

Total acquisition
price

Nagoya City

Core cities, major regional cities(Overall ratio)

Property name

Property name

Building age, walking
time from station

Shinagawa Seaside
TS Tower

17 years old,
1-minute walkOsaka City

Acquisition price(million yen)

Building age, walking
time from station

Acquisition price(million yen)

BREEZÉ TOWER
12 years old,
3-minute walk

10,04025,64913,100(35.9%)

Omori Park Building

5,400

27 years old,
3-minute walk

(7.6%)

5,400

Toyo Park Building
29 years old,
9-minute walk

3,782

Hotel Intergate Hiroshima

12,731

2 years old,
3-minute walk(17.8%)

3,990

S-GATE NIHONBASHIHONCHO

2 years old,
4-minute walk

6,698

Hibiya Sankei Building
Less than
200 tsubos
100 tsubos
or more28 years old,
1-minute walk

5,829

25,688S-GATE AKASAKA
5 years old,
1-minute walk

(35.9%)
4,200

Hotel Intergate Tokyo Kyobashi
3 years old,
1-minute walkLess than
100 tsubos

8,961

S-GATE AKIHABARA

2,055

3 years old,
5-minute walk

(2.9%)

2,055

Total
acquisition
price40,611

13,822(Overall ratio)(56.8%)(19.3%)－

13,1003,990

71,525(18.3%)(5.6%)(100.0%)

Typical Floorplate * Office Buildings Only (Construction area is used as reference value for hotels)
400 tsubos
or moreLess than 400 tsubos, but
200 tsubos or more

Less than 200 tsubos, but
100 tsubos or more

Less than 100
tsubos50

SANKEI REAL ESTATE Inc.

Top End Tenants by Leased Area (as of February 28, 2021)
Business type

Total leased
area
(m2)

% of
portfolio’s
total leased
area

Hotel

15,166.7

23.36%

Hotel Intergate Tokyo Kyobashi
Hotel Intergate Hiroshima

Manufacturing

Not disclosed

Not disclosed

Shinagawa Seaside TS Tower

Manufacturing (food)Not disclosed

Not disclosed

BREEZÉ TOWER

Manufacturing(pharmaceutical)

Not disclosed

Not disclosed

BREEZÉ TOWER

Konoike Construction Co., Ltd.

Construction

2,542.7

3.92%

S-GATE NIHONBASHI-HONCHO

Hitachi Real Estate Partners, Ltd.

Real estate

2,423.0

3.73%

Toyo Park Building

Hakuhodo DY Holdings Inc.

Service(advertising)

1,888.3

2.91%

S-GATE AKASAKA

Toyo Sangyo Co., Ltd.

Service(equipment maintenance)

1,509.7

2.33%

Omori Park Building

Yokogawa Solution Service Corporation

Service(equipment maintenance)

Not disclosed

Not disclosed

Manufacturing(game)

1,131.0

1.74%

Name of end tenant

GRANVISTA Hotels & Resorts Co., Ltd.
Sony Corporation
NH Foods Ltd.
Bayer Yakuhin, Ltd.

SEGA GROUP CORPORATION

Property nameBREEZÉ TOWER
Omori Park Building* “Total leased area” and “% of portfolio’s total leased area” are based on figures after considering SANKEI REAL ESTATE’s ownership interest.
* “% of portfolio’s total leased area” refers to the total leased area expressed as a percentage of the entire portfolio’s total leased area, rounded to two decimal place.
* With regard to “Total leased area” and “% of portfolio’s total leased area,” for properties leased to the master lessee, the areas stated in the lease agreements concluded with end tenants are used
as areas leased to the end tenants when calculating.
* The information is “Not disclosed” due to unavoidable circumstances in that such contains information for which consent for disclosure has not been obtained from the tenant, relevant party, etc.
or information from which confidential information can be derived.

51

SANKEI REAL ESTATE Inc.

Status of Lease Agreements (as of February 28, 2021; based on leased area after considering ownership interest) Breakdown of Tenants by Lease Period(including hotels)

 Breakdown of Tenants by Contract Form
Ordinary building
lease agreement

Less than 3 years

29.0%

34.7%

32.0%

10 years or more

Average*1

7.6 years
68.0%
Fixed-term building
lease agreement

Construction & real estate

5 years or more,
but less than 10 years

 Breakdown of Tenants by Lease Period(excluding hotels)

 Breakdown of Tenants by Business TypeTransportation &communications 3.0%
Wholesale & retail 3.3%
IT 6.0%3 years or more,
but less than 5 years

18.0%

18.3%

Other 2.9%

10 years or more
7.3%

36.0%

9.7%

Manufacturing
 Sony NH Foods
 Bayer Yakuhin
Etc.

Less than
3 years

45.2%

Average*1

5 years or more,
23.5% but less than 10 years

3.8 years

15.7%
Service Toyo Sangyo
 Yokogawa Solution Service
 NEC Facilities
Etc.

24.0%

23.4%
Hotel  GRANVISTA Hotels & Resorts(100% subsidiary of Sankei Building)*1. Figures are the weighted average based on the area leased to each tenant.
*2. As to the calculation of each ratio indicated above, for properties leased to the master lessee, the areas stated in the lease agreements concluded withend tenants are used as areas leased to the end tenants when calculating.

3 years or more,
but less than 5 years

52

SANKEI REAL ESTATE Inc.

Status of Unitholders (as of February 28, 2021)


Breakdown of Investment Units by Unitholder Type
Financial institutions
Other Japanese corporations
Individuals/Other

Major Unitholders

Securities companies
Non-Japanese corporations, etc.

Number ofunits owned(units)Share ofunits owned(%)

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

72,506

20.32

Custody Bank of Japan, Ltd. (Trust Account)

67,33818.87

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

25,131

7.04

The Sankei Building Co., Ltd.

17,479

4.89

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

16,263

4.55

BNP PARIBAS SECURITIES SERVICESLUXEMBOURG/JASDEC/SECURITIES-AIFM

12,683

3.55

STATE STREET BANK AND TRUST COMPANY 505223

6,505

1.82

Aozora Bank, Ltd.

6,102

1.71

SCBHK AC LIECHTENSTEINISCHE LANDESBANK AG

5,727

1.60

The Bank of Yokohama, Ltd.

5,353

1.50

235,087

65.88

Name of unitholder

100%
90%
80%

13.93%

14.31%

14.68%

16.88%

11.66%

15.63%

14.52%

14.24%

6.75%
1.49%

4.52%
1.22%

5.53%
1.14%

6.25%
1.24%

70%
60%
50%
40%
30%

64.48%

63.92%

63.19%

64.31%

20%
10%0%
End of 1st FPEnd of 2nd FP

End of 3rd FP

End of 4th FP

Number of Unitholders by Unitholder TypeEnd of 1st FP End of 2nd FP End of 3rd FP End of 4th FP

Financial institutions

37

55

54

49

Securities companies
Other Japanese
corporations
Non-Japanese
corporations, etc.
Individuals/Other

17

19

23

22

116

127

131

135

57

62

59

70

6,399

7,585

7,458

7,406

Total

6,626

7,848

7,725

7,682

Total

* Each share above is rounded down to two decimal place.

53

SANKEI REAL ESTATE Inc.

Profile of the Asset Management Company

Trade name

Sankei Building Asset Management Co., Ltd.

Established

April 13, 2018

Capital

100 million yen

Financial instruments
business registration

Director-General of the Kanto Local Finance Bureau Registration(FIBO) No. 3094

The Sankei Building Co., Ltd. 100%

Real estate brokerage
licenseGovernor of Tokyo License (1) No. 102209

Investment management business, investment advisory andagency business, type II financial instruments business

Discretionary transaction
agency, etc. approval

Minister of Land, Infrastructure, Transport and Tourism ApprovalNo. 125

Shareholder composition
Main line of businessDirectors and auditors

5 directors
1 auditor

General Meeting of Shareholders

AuditorBoard of Directors

Investment Committee

Compliance Committee

President and CEO

Internal Audit Office

Investment Management Department
SANKEI REAL ESTATE Inc.
・Investment policy planning・Acquisition and sale of assets
under management
・Operation and management ofassets under management

Compliance OfficeFinance & IR Department

・Corporate planning, accounting
and general affairs
・Financials and IR

Fund Management Department
Private equity real estate funds, etc.
・Investment policy planning・Acquisition and sale of assets
under management
・Operation and management ofassets under management54