22nd

Fiscal Period Business Report(Statement of Financial Performance)

June 1, 2016 – November 30, 2016

6-2-1 Ginza, Chuo Ward, Tokyo http://www.daiwa-of_ce.co.jp/en/

I. Overview of Daiwa Office Investment Corporation
To Our Investors
We would like to express our deep gratitude to all our unitholders for your support of Daiwa Office Investment Corporation (DOI).
In the 22nd Fiscal Period, DOI posted operating revenues of 12,853 million yen and operating income of 6,143 million yen. Our
distribution per unit for the 22nd Fiscal Period is 10,695 yen, an increase by 187 yen from the 21st Fiscal Period
See page 4 for financial and management highlights
Average contract rent at the end of the 22nd Fiscal Period increased 114 yen from the end of the previous fiscal period to 19,219
yen, indicating an increase for the fourth consecutive fiscal period. Rent revisions contributed to 8.7 million yen increase inmonthly contracted rents from the end of the previous fiscal period, which was a 6.1% rate of increase for average monthly rent.
Furthermore, the rate of increase for average monthly rent stood at 7.2% due to replacement of tenants, and the occupancy rate was
97.7%. We will realize sustainable internal growth through the thorough implementation of the hands-on approach that continuously
applies “Bonji-Tettei” as the code of conduct.

See page 8 for details of internal growth

During the 22nd Fiscal Period, DOI acquired Heiwa Higashi-nihonbashi Building on June 1, 2016, Square Daikanyama Buildingon June 29, 2016, Shinjuku West Building and Ogikubo TM Building on July 21, 2016 (total acquisition price: 13,392 million
yen) using funds obtained through the public offering announced in July 2016. DOI will continue
to selectively acquire office properties centering on the five central wards of Tokyo in an effort
to further improve the value of its portfolio.

See page 12 for details of external growthIn financial matters, DOI promoted diversification of repayment dates by taking out long-termborrowings. DOI will continue striving to further strengthen financial structure while working to
reduce future refinancing risks.

See page 15 for details of financial conditions

DOI will continue to increase the competitiveness of its properties and aim to achieve
its medium- to long-term goal of continuous growth through the utilization of
investment capacity from capital increase, etc., while increasing long-term EPS (netincome after deducting gain on sales of properties). We wish for the continued
success of our unitholders and ask for your continued support of DOI.

Yoshimi Murakami Executive Director of Daiwa Office Investment Corporation
Table of Contents

I. Overview of Daiwa Office Investment Corporation
To Our Investors……………………………………………… 2

II. Asset Management Report…………………………… 17
III. Balance Sheets… ……………………………………… 22

Characteristics and Strategies of
Daiwa Office Investment Corporation ………………………… 3
Financial and Management Highlights………………………… 4

IV. Statements of Income and Retained Earnings…… 24
V. Statements of Changes in Net Assets……………… 25

Overview of Portfolio (portfolio list)…………………………… 5
Overview of Portfolio (portfolio distribution)…………………… 6
Internal Growth Measures… ………………………………… 8External Growth Measures…………………………………… 12
Financial Conditions… ……………………………………… 15
Description of Asset Manager………………………………… 16

2

VI. Statements of Cash Flows… ………………………… 26
VII. Notes to Financial Statements……………………… 27
VIII. Independent Auditor’s Report… …………………… 41
IX. Investor Information… ………………………………… 42

Characteristics and Strategies of Daiwa Office Investment Corporation

Characteristics of Daiwa Office Investment Corporation

Office Specialized
REIT

REIT Focused on the Five
Central Wards of Tokyo

Effective application of operational knowhow specialized in officebuildings

Places priority on owning office buildings in favorable locations forwhich there is high demand

Office buildings 100.0%

Major Regional Cities 3.1%
Greater Tokyo

Five Central
Wards of Tokyo

88.6%

8.3%

Based on acquisition price(Note) Please note that the percentages in the above graphs are as of December 21, 2016.

Growth Strategies
Activities for solid growth・Continue acquiringproperties

Achievement of a 500 billion yen asset size

・Leverage borrowing
capacity

Keep the medium-to-long term, upper-limit
LTV target range within 40%~50%(billion yen)
500

400

Investment inselectively-chosencompetitive properties

364.0

387.5

413.2

445.7

500.0
467.7
458.3

300

Establishment of stable revenue base・Property management
activities

Continuation of “Bonji-Tettei”
Thorough implementation of hands-on
approach
Further strengthen relations with tenants

・Maintain andimprove property
value

Capture tenant needs by reinforcing ties withproperty managers
Strategic renewals and lease-up activities

・Financial activities

Reduce refinancing risk by extending
borrowing periods and diversifying
repayment dates

Distribution per Unit

200

100

0
Fiscal period Fiscal period Fiscal period Fiscal period Fiscal period Fiscal period Medium-term
ended
ended
ended
ended
ended
ended
goal
May 2014 November 2014 May 2015 November 2015 May 2016 November 2016

Fiscal period ended November 2016
(22nd Fiscal Period)

Fiscal period ending May 2017
(Note) The forecasts on distribution are calculated based(23rd Fiscal Period)on certain assumptions and may vary due tochanges in the status and other factors. Moreover,the forecasts set forth herein should not be
construed as a guarantee of distribution amounts.

Fiscal period ending November 2017(24th Fiscal Period)

10,695 yen
10,700 yen
10,710 yen(actual)(forecast)(forecast)

I. Overview of Daiwa Office Investment Corporation

3

Financial and Management Highlights
Steady increase of distributions due to progress in internal growth■ Operating Revenues■ Operating Income■ Net Income(million yen)
13,000(million yen)
7,000

(million yen)
6,000

11,837

10,0009,763

12,85312,363

10,387

6,108

5,614

5,000

7,000

5,250

6,143

4,770

4,438

3,641

3,000

5,324

4,688

4,000

4,031

2,000

4,000

0

0

0

18th Period 19th Period 20th Period 21st Period 22nd Period

18th Period 19th Period 20th Period 21st Period 22nd Period

18th Period 19th Period 20th Period 21st Period 22nd Period■ Changes in Rental Revenues(million yen)
11,000External growth (acquisition/full contribution from properties sold) (Note 1)

10,0009,000

External growth(acquisition/during-the-period contribution from properties sold) (Note 2)

267

Internal growth (increase/decrease of rents of existing properties)

839

176

349

8,000

261

7,000

511

6

115

227

27

229
117

154
282

148
215

64

–55

6,000
0
17th Period

18th Period

19th Period

20th Period

21st Period

22nd Period■ Distribution per Unit(yen)
12,000

Forecast from one year earlier

10,0008,000
6,000

Forecast from six months earlier

5,500
6,250
6,542

5,350
5,500
5,986

Actual dividends

6,550
7,200
7,478

7,300
7,540
7,621

16th Period

17th Period

8,328
8,700
9,142

7,570
7,820
8,256

(Note 1) Amount obtained by subtracting rents andcommon area fees income in the previous
fiscal period of properties sold in theprevious fiscal period from the amount ofrents and common area fees income
increased compared to the previous period
due to full year contribution from properties
acquired in the previous fiscal period.
(Note 2) Amount obtained by subtracting rents andcommon area fees income decreased in
the current fiscal period due to sales ofproperties in the current fiscal period fromthe amount of rents and common area fees
income increased in the current fiscal
period due to acquisition of properties in
the current fiscal period.

9,000
9,350
9,688

10,7109,900
10,55010,695

10,56010,70022nd Period

23rd Period 24th Period

9,750
9,850
10,508

4,000
2,000
0
14th Period

15th Period

18th Period

19th Period

20th Period

21st Period

22nd Period

21st Period

20th Period

19th Period

18th Period(November 2016)(May 2016)(November 2015)(May 2015)(November 2014)

Operating revenues (million yen)

12,85312,363

11,837

10,387

9,763

Operating income (million yen)

6,143

6,108

5,614

4,770

4,438

Ordinary income (million yen)

5,325

5,326

4,689

4,032

3,642

Net income (million yen)

5,324

5,250

4,688

4,031

3,641

Total number of units issued (units)497,869

484,000

484,000

441,000

441,000
504,746

Net assets per unit (yen)515,230

511,818

511,777

505,566

Distribution per unit (yen)10,695

10,508

9,688

9,142

8,256

Total assets (million yen)

483,450

476,690

460,705432,232

399,555

42.3

43.3

41.7

44.3

40.2

53

50

50

47

46

467.7

458.3

445.7

413.2

387.5

336,722.04

328,027.44

325,313.01

288,833.07

286,088.89

97.7

98.7

98.3

97.3

97.2

Loan-to-value (LTV) (based on total asset value) (%)
Number of investment properties
Asset size (billion yen)
Total rentable area (m2)Occupancy rate (%)(Note) Distribution per unit for the 22nd fiscal period is calculated by dividing the amount obtained by subtracting provision for reserve for reduction entry (164 million yen) from unappropriated retained earnings by the
total number of investment units issued.

4Overview of Portfolio (portfolio list)(as of December 21, 2016)
Property Name

Address

Acquisition
Appraisal
Execution
Rentable Structure andPrice
Value at End
Area (m2) No. of Floors Completion of Major
of Period
Share(Note 2)
(Note 3)
Repairs mm yen(mm yen) (Note 4)(%)

Ownership TypeLand

Building

PML (%)

Five Central Wards of Tokyo (Note 1)
Ginza, Chuo-ku, Tokyo
1 Daiwa Ginza
Ginza, Chuo-ku, Tokyo
2 Daiwa Ginza Annex
Shibaura, Minato-ku, Tokyo
3 Daiwa Shibaura
Minami Aoyama, Minato-ku, Tokyo
4 Daiwa Minami-Aoyama
Sarugakucho, Chiyoda-ku, Tokyo
5 Daiwa Sarugakucho
Hamamatsucho, Minato-ku, Tokyo
6 Daiwa A Hamamatsucho
Jingumae, Shibuya-ku, Tokyo
7 Daiwa Jingumae
Shibadaimon, Minato-ku, Tokyo
8 Daiwa Shibadaimon
Misakicho, Chiyoda-ku, Tokyo
9 Daiwa Misakicho
Shinbashi, Minato-ku, Tokyo
10 Daiwa Shimbashi 510
Tsukiji, Chuo-ku, Tokyo
11 Daiwa Tsukijiekimae
Tsukiji, Chuo-ku, Tokyo
12 Daiwa Tsukiji
Tsukishima, Chuo-ku, Tokyo
13 Daiwa Tsukishima
14 Daiwa Nihonbashi Horidomecho Nihombashi-Horidomecho, Chuo-ku, Tokyo
Azabudai, Minato-ku, Tokyo
15 Daiwa Azabudai
Hatchobori, Chuo-ku, Tokyo
16 Daiwa Kyobashi
Kojimachi, Chiyoda-ku, Tokyo
17 Daiwa Kojimachi 4-chome
Shinbashi, Minato-ku, Tokyo
18 Daiwa Onarimon
19 Shinjuku Maynds Tower (Note 5) Yoyogi, Shibuya-ku, Tokyo
Udagawacho, Shibuya-ku, Tokyo
20 SHIBUYA EDGE
Nihombashi-Odenmacho, Chuo-ku, Tokyo
21 Daiwa Kodenmacho
Kanda-Jimbocho, Chiyoda-ku, Tokyo
22 Daiwa Jimbocho
Nishi-Shimbashi, Minato-ku, Tokyo
23 Daiwa Nishi-Shimbashi
Nihombashi-Kayabacho, Chuo-ku, Tokyo
24 Daiwa Kayabacho Building
Kanda-Jimbocho, Chiyoda-ku, Tokyo
25 Daiwa Jinbocho 3-chome
Maruyamacho, Shibuya-ku, Tokyo
26 E SPACE TOWER
27 Daiwa Nihonbashi Hongokucho Nihombashi Hongokucho, Chuo-ku, Tokyo
Shinjuku, Shinjuku-ku, Tokyo
28 shinyon curumu
Akasaka, Minato-ku, Tokyo
29 Daiwa Akasaka
Shibuya, Shibuya-ku, Tokyo
30 Daiwa Shibuya Miyamasuzaka
Minami Azabu, Minato-ku, Tokyo
31 Azabu Green Terrace
Ebisu, Shibuya-ku, Tokyo
32 Daiwa Ebisu 4-chome
Okubo, Shinjuku-ku, Tokyo
33 LAQUAS Higashi Shinjuku
Jingumae, Shibuya-ku, Tokyo
34 Concept Aoyama
Shinsen-cho, Shibuya-ku, Tokyo
35 Shinsen Place
Nanpeidaicho, Shibuya-ku, Tokyo
36 Glass City Shibuya
Nihonbashi Hakozakicho, Chuo-ku, Tokyo
37 River Gate
Hatchobori, Chuo-ku, Tokyo
38 Daiwa Hatchobori ekimae
39 Daiwa Hatchobori ekimae West Hatchobori, Chuo-ku, Tokyo
Nishishinjuku, Shinjuku-ku, Tokyo
40 Nikko Building
Nihonbashi Koami-cho, Chuo-ku, Tokyo
41 Kirin Nihonbashi Building
42 Heiwa Higashi-nihonbashi Building Higashi Nihonbashi, Chuo-ku, Tokyo
Daikanyamacho, Shibuya-ku, Tokyo
43 Square Daikanyama Building
Nishishinjuku, Shinjuku-ku, Tokyo
44 Shinjuku West Building
45 Shin Kanda Mikuracho Building Kanda Mikura-cho, Chiyoda-ku, Tokyo

8,179.62 SRC B3/12F July 1963
2,032.11 SRC B3/8F Aug. 1972
9,619.67 SRC B1/12F Oct. 1987
2,715.54 S SRC B2/5F Sept. 1990
3,657.43
SRC 8F
June 1985
3,663.38 SRC B2/10F July 1993
2,198.61 RC B1/4F
Dec. 1997
2,386.48 SRC RC B1/7F Nov. 1996
2,137.53
S 8F
July 1996
2,641.56 SRC B1/8F
Apr. 1974
2,659.59
SRC 10F
Jan. 1996
1,487.44 SRC B1/7F Jan. 1990
8,426.28
S 5F
July 1996
2,850.81 SRC B2/7F
Apr. 1993
1,697.88 SRC B2/9F
Apr. 1984
3,265.83 SRC B1/8F Oct. 1974
2,690.90 SRC B2/9F Oct. 1987
11,614.92
SRC 9F
Apr. 1973
45,543.97 S SRC B3/34F Sept. 1995
2,480.65 RC B1/9F
Aug. 2006
2,379.31
SRC 8F
Mar. 1985
3,164.26
S B1/8F
Mar. 1997
4,815.84 SRC B1/10F July 1993
5,899.11 S SRC B1/8F Apr. 2010
2,889.34
S 9F
Feb. 2010
13,960.87 S SRC B1/15F Oct. 2002
2,143.08
S 8F
May 2010
6,751.31 S RC B2/11F Jan. 2012
8,739.17 SRC B2/7F Sept. 1990
6,327.95 S B1/12F
Dec. 1988
13,234.39 S RC B1/6F Sept. 2009
2,885.64 SRC B1/9F Dec. 1997
7,498.33
S10F
Aug. 2010
4,421.15 S RC B1/7F Nov. 2001
2,811.35 RC B1/9F
Sept. 2001
8,566.73 S SRC B1/11F Feb. 2004
32,063.06 S SRC RC B2/20F Feb. 1994
2,622.42 S SRC B1/10F Feb. 2006
1,723.15 SRC B1/9F Feb. 1996
6,967.61 SRC RC S B2/11F Aug. 1991
5,630.17 S SRC 7F
Feb. 1999
5,015.88
S 7F
Mar. 2008
1,588.35
S 6F
Mar. 2001
1,120.58
RC 4F
Mar. 1989
1,732.42 SRC S B1/7F Jan. 1991
276,901.67

Subtotal
Greater Tokyo Area (Note 1)
Higashi-Ikebukuro, Toshima-ku, Tokyo
4,461.47 SRC S B1/9F June 1993
46 Daiwa Higashi-Ikebukuro
Kita-Shinagawa, Shinagawa-ku, Tokyo
6,548.17 SRC B1/11F July 1991
47 Daiwa Shinagawa North
Osaki, Shinagawa-ku, Tokyo
1,786.06 S RC B1/6F Sept. 2007
48 Daiwa Osaki 3-chome
Kamiooka Nishi, Konan-ku, Yokohama City, Kanagawa 2,630.30 S SRC B3/7F May 201149 Daiwa Kamiooka
Kamiogi, Suginami-ku, Tokyo
17,778.14 S SRC B2/18F June 1993
50 Integral Tower
Meguro, Meguro-ku, Tokyo
3,519.50 S SRC B2/14F July 2009
51 Meguro Place Tower
Ogikubo, Suginami-ku, Tokyo
3,849.63 SRC B1/7F Nov. 1990
52 Ogikubo TM Building
Subtotal
40,573.27
Major Regional Cities (Note 1)
Meieki-Minami, Nakamura-ku, Nagoya City, Aichi
7,461.90
S 12F
Dec. 2007
53 Daiwa Meieki
Awaji-cho, Chuo-ku, Osaka City, Osaka
13,517.62 S SRC B1/16F Feb. 2008
54 Kitahama Grand Building
Subtotal
20,979.52
Total
338,454.46

simple and16,700 Feeleasehold
Fee simple
3,500 Fee simple
Fee simple
7,670 Fee simple
Fee simple
4,410 Fee simple
Fee simple
3,340 Fee simple
Fee simple
3,380 Fee simple Compartmentalized
ownership
2,320 Fee simple
Fee simple
2,960 Fee simple
Fee simple
2,730 Fee simple
Fee simple
2,470 Fee simple
Fee simple
1,650 Fee simple
Fee simple
1,430 Fee simple
Fee simple
9,230 Fee simple
Fee simple
2,530 Fee simple
Fee simple
1,860 Fee simple
Fee simple
3,290 Fee simple Compartmentalized
ownership (100%)
2,750 Fee simple Compartmentalized
ownership (100%)
13,400 Fee simple Compartmentalized
ownership (100%)
122,000 Co-ownership Co-ownership
4,870 Fee simple
Fee simple
simple and2,150 Feeleasehold
Fee simple
3,470 Fee simple
Fee simple
6,000 Fee simple
Fee simple
7,710 Fee simple
Fee simple
4,620 Fee simple
Fee simple
32,800 Fee simple
Fee simple
2,310 Fee simple
Fee simple
13,700 Right of site Compartmentalized
ownership (100%)
12,900 Fee simple
Fee simple
8,660 Fee simple
Fee simple
15,900 Fee simple
Fee simple
5,380 Fee simple
Fee simple
10,200 Fee simple Compartmentalized
ownership (100%)
11,800 Fee simple
Fee simple
6,260 Fee simple
Fee simple
17,800 Fee simple
Fee simple
30,100 Fee simple
Fee simple
3,210 Fee simple
Fee simple
1,800 Fee simple
Fee simple
14,800 Fee simple
Fee simple
8,230 Fee simple
Fee simple
6,560 Fee simple
Fee simple
2,470 Fee simple
Fee simple
1,160 Fee simple
Fee simple
1,680 Fee simple
Fee simple
444,160

4.53
3.97
3.82
9.19
7.14
3.79
13.33
3.72
4.24
5.51
4.23
4.98
4.87
4.68
6.64
4.51
6.19
3.89
2.03
1.56
4.19
5.05
3.76
4.50
5.33
3.11
3.80
4.44
7.14
5.64
2.67
2.44
4.46
4.42
6.21
1.61
1.76
5.89
7.03
4.32
5.76
4.37
6.21
8.28
6.01

0.6
1.6
0.4
0.4
3.2
1.2
0.8
8.3

3,650
6,010
2,320
2,600
18,5006,410
4,300
43,790Fee simple
Fee simple
Fee simple
Fee simple
Fee simple
Fee simple
Fee simple

Compartmentalized
ownership (100%)

3.55
7.19
6.14
6.29
1.18
1.68
6.41

5,300 1.1
9,481 2.0
14,781 3.1
469,341 100.0

7,660
11,50019,160507,110

Fee simple
Fee simple

Fee simple
Fee simple

10.31
3.48

2003
2003

14,100 3.0
3,050 0.6
8,265 1.8
4,550 1.0
3,190 0.7
2,865 0.62,800 0.6
2,578 0.5
2,346 0.5
2006
2,080 0.4
1,560 0.3
1,240 0.3
7,840 1.7
2,520 0.51,600 0.3
2005
3,460 0.7
2,910 0.6
2003 13,860 3.0
133,800 28.5
5,900 1.3
2,460 0.5
4,150 0.95,000 1.1
5,600 1.2
3,550 0.8
24,000 5.1
1,721 0.4
9,650 2.1
9,200 2.0
7,000 1.5
14,000 3.0
4,135 0.98,450 1.89,800 2.1
4,800 1.0
16,000 3.4
28,000 6.0
2,871 0.6
1,647 0.4
13,710 2.9
8,180 1.7
6,370 1.4
2,280 0.5
942 0.2
1,592 0.3
415,622 88.6
2,958
7,710
1,650
2,000
15,2205,600
3,800
38,938

Fee simple
Fee simple
Fee simple
Fee simple
Fee simple
Fee simple(Note 1) The Five Central Wards of Tokyo are Chiyoda, Chuo, Minato, Shinjuku and Shibuya Wards (or ku).
The Greater Tokyo Area is Tokyo (excluding the Five Central Wards), and Kanagawa, Chiba and Saitama Prefectures.
Major Regional Cities are the Osaka area (Osaka, Kyoto and Hyogo prefectures), Nagoya area (Aichi, Mie and Gifu prefectures) and ordinance designated cities and core cities set forth in the Local Autonomy Act.
(Note 2) The Rentable Area is indicated as of November 30, 2016 (end of 22nd Fiscal Period).
(Note 3) Structure acronyms are S for steel, RC for reinforced concrete and SRC for steel-reinforced concrete.
(Note 4) The values entered in the Appraisal Value at End of Period column are the appraisal values in the real estate appraisal reports with a pricing point of December 1, 2016 for Shin Kanda Mikuracho Building andof November 30, 2016 (end of 22nd Fiscal Period) for other properties.
(Note 5) The entrusted real estate corresponding to trust beneficiary interests that DOI owns regarding Shinjuku Maynds Tower is a co-ownership interest equal to 6/7 of the entire property. The figure shown for theRentable Area is the figure equivalent to 6/7 of the total rentable area of the entire building.

I. Overview of Daiwa Office Investment Corporation

5Overview of Portfolio (portfolio distribution)
DOI concentrates its investment in the Five Central Wards of Tokyo (Chiyoda, Chuo, Minato, Shinjuku and Shibuya)
Shibuya-ku

7 Daiwa Jingumae

20 SHIBUYA EDGE

30 Daiwa Shibuya Miyamasuzaka

32 Daiwa Ebisu 4-chome

46 Daiwa Higashi-Ikebukuro

Ikebukuro Sta.
46

19 Shinjuku Maynds Tower

26 E SPACE TOWER

50

34 Concept Aoyama

Suginami-ku

35 Shinsen Place

36 Glass City Shibuya

43 Square Daikanyama Building

Nakano Sta.

52 Ogikubo Sta.
50 Integral Tower

Toshimaku

33
HigashiShinjuku Sta.

Shinjuku-ku

Shinjuku-ku
44
40

Shinjuku Sta.
28

19

Yotsuya Sta.

Honancho Sta.
52 Ogikubo TM Building

Tokyo Metro
Ginza Line
Marunouchi Line
Hibiya Line
Tozai Line
Chiyoda Line
Yurakucho Line
Hanzomon Line
Namboku Line
Fukutoshin Line

Toei Subway

28 shinyon curumu

33 LAQUAS Higashi Shinjuku

40 Nikko Building

44 Shinjuku West Building

Shibuya-ku

Minato-ku

34

20
26
3 Daiwa Shibaura

4 Daiwa Minami-Aoyama

35

6 Daiwa A Hamamatsucho

36

ine
hi L
Tos
n
e
Den
yu
Tok

Lin
e
To
kyu
To
yok
o

JR

8 Daiwa Shibadaimon

10 Daiwa Shimbashi 510

30
Shibuya Sta.
43

Naka-meguro Sta.

6

32
Ebisu Sta.

15 Daiwa Azabudai

51

Main investment area:
Five Central Wards ofTokyo
Focused investmentarea: Greater Tokyo
Major Regional Cities

Gaienmae Sta.

4

Omotesando Sta.

Oedo Line
Asakusa Line
Mita Line
Shinjuku Line
Yamanote Line
Saikyo Line
Chuo Line
Sobu Line
Keiyo Line
Yokosuka Lineand
Sobu Rapid Line

Aoyamaitchome Sta.

7

18 Daiwa Onarimon

23 Daiwa Nishi-Shimbashi

29 Daiwa Akasaka

31 Azabu Green Terrace

51 Meguro Place Tower

Meguro Sta.

Osaki Sta.
48

(as of December 21, 2016)

Chuo-ku

1 Daiwa Ginza

37 River Gate

2 Daiwa Ginza Annex

11 Daiwa Tsukijiekimae

12 Daiwa Tsukiji

13 Daiwa Tsukishima

14 Daiwa Nihonbashi Horidomecho

16 Daiwa Kyobashi

21 Daiwa Kodenmacho

24 Daiwa Kayabacho Building

Asakusa Sta.
Oshiage Sta.

Suidobashi Sta.

9

Akihabara Sta.

5

Kinshicho Sta.

25 22

Kudanshita Sta.

27 Daiwa Nihonbashi Hongokucho 38 Daiwa Hatchobori ekimae

39 Daiwa Hatchobori ekimae West

42
45

27

21

14

Otemachi Sta.

Chiyoda-ku

17

Ningyocho Sta.
Nihombashi Sta.

Tokyo Sta.
Akasakamitsuke Sta.

Hibiya Sta.

Akasaka Sta.

12

Toranomon Sta.

29

Shimbashi Sta.
23
10
18

Shibakoen Sta.

Chuo-ku

41

16

39 38

Ginza Sta.

12

6

15

24 Suitengumae37

41 Kirin Nihonbashi Building 42 Heiwa Higashi-nihonbashi Building

Sta.

Chiyoda-ku

Hatchobori
Sta.

11

Tsukishima Sta.

13
5 Daiwa Sarugakucho

9 Daiwa Misakicho

17 Daiwa Kojimachi 4-chome

22 Daiwa Jimbocho

25 Daiwa Jinbocho 3-chome

45 Shin Kanda Mikuracho Building

53 Daiwa Meieki

54 Kitahama Grand Building

8

Minato-ku
31

3

ShinagawaSta.

47

Shinagawaku

47 Daiwa Shinagawa North

48 Daiwa Osaki 3-chome

54 53

49

49 Daiwa Kamiooka

I. Overview of Daiwa Office Investment Corporation

7

Internal Growth Measures
Realizing rent increases upon contract renewal and tenant replacement while working to heighten tenant satisfaction

Office Market Trends
Further improvements in vacancy rate are observed and rent levels are showing signs of recovery.

■ Office Building Rental Market of Tokyo■ Office Building Rental Market of 23 Wards of Tokyo(yen/tsubo)
24,000(%)
10.0

Average rents of existing buildings (left axis)
Vacancy rate of existing buildings (right axis)

22,000(tsubo)400,000

6.0

18,31918,0003.29

16,0006.0

100,000

4.5

0

3.0

-100,000

1.5
Floor area of new supplies
Floor area of new demands-200,000

0.0

Vacancy rate (right axis)(Source) Miki Shoji(Source) CBRE “Mid-term Office Market Outlook 2016~2020”■ Occupancy Rate

■ Rate of New Leases and Cancellations*

(%)
100.0

(%)
20.0
97.7

95.0

0.0

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20202001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

95.9

7.5

200,000

4.0
2.0

14,000Predicted figures

300,000

8.0

20,000(%)
9.0

96.3 96.4

96.4

95.4

97.2 97.3

98.3 98.7

97.7
97.5

95.0

97.3 97.6

13.4
10.0

96.8

94.3

9.8

7.2 7.4
3.9

3.2

-3.9

-3.4
-3.9

8.2

3.3

5.7

4.4

6.1 6.2
2.0

4.3

0.0

92.8
92.4
90.0

Occupancy rate (actual)
Occupancy rate (forecast)Occupancy rate (forecast)(as of disclosure in July 2016)

-10.0

-5.9

-5.3
-7.3 -6.3

-12.0

85.7
85.0
End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of
7th 8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd 23rd 24th
Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period-2.4 -1.7 -1.6

-2.8
-6.1 -5.7

Rate of new leases
Rate of cancellations

-14.7

-20.0

3.5
1.8 2.9 2.6-3.8 -3.2 -2.8

Expected rate of new leases
Expected rate of cancellations

End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of
7th 8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd 23rd 24th
Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period*Transition of rate of new leases and cancellations areas to the total rentable area.

Rental Business Status■ Average Contract Rent and Market Rent

■ Attribution Analysis/Monthly Contract Rent*(yen/tsubo)
30,000(Million Yen)

100

2,000

27,000

90

1,950

80

1,900

78.85 80.16
78.52 79.53

24,00021,00070

18,67418,00015,00019,10518,73819,219 60

Average contract rents*
Unit rent index(Period-on-period comparison, right axis)**

50

+59
1,863

+8

Decrease byRent Revisions

Increase byRent Revisions

–68

+57

Decrease by
Transfer

–15

1,905

0

Increase by
New Leases

Increase by
New Acquisition

1,800

1,750

40

12,000End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of
4th 5th 6th 7th 8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd
Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period(Note) Average contract rent of the existing 49 properties at the end of November 2016 is 19,331 yen(amount of change from the previous period: +209 yen)
* Average contract rents are average monthly contracted rents with tenants at the end of each fiscal period.
** Unit rent index is the earning rates of unit rent of individual properties indexed with the 7th Fiscal Period
as 100.

8

1,850

Decrease by
Tenants’Cancellations

1,700
End of 21st FP
Monthly Contract Rent

End of 22nd FP
Monthly Contract Rent

* Monthly Contact Rent is a total of final rent from tenants contracting at the end of the Fiscal Period.
Monthly Contract Rent for Shinjuku Maynds Tower was adjusted to 6/7 of the total.

Status of Contract Renewal■ Monthly Rent Increase Due to Contract Renewal/New Lease
Contract Renewal(Note 1)(thousand yen /month)

19th Fiscal Period (ended May 2015)
20th Fiscal Period (ended November 2015)
21st Fiscal Period (ended May 2016)
22nd Fiscal Period (ended November 2016)

New Lease

Total(Note 2)(thousand yen /month)(thousand yen /month)

3,157
6,438
766
3,988

9,020
14,376
14,246
12,747

5,862
7,938
13,479
8,759

Increased Rent as Percentage of Rents andCommon Area Fees Income (Note 3)

Increased Rent as Percentage of Net
Income (Note 4)

6-month conversion 12-month conversion 6-month conversion 12-month conversion

0.7%
1.0%
0.8%
0.7%

1.3%
2.0%
1.7%
1.5%

1.5%
2.1%
1.8%
1.5%

3.0%
4.3%
3.6%
2.9%

(Note 1) “Contract renewal” indicates, for the portion of which lease contract was renewed during each fiscal period, the total of net increase in monthly rent calculated by subtracting the total of monthly rents before renewal fromthe total of monthly rents at the end of the relevant fiscal period.
(Note 2) “New lease” indicates, for the portion for which a lease contract was concluded with a new tenant in each fiscal period, the total of net increase in monthly rent calculated by subtracting the total of monthly rents under thelease contract with the immediately preceding tenant from the total of monthly rents at the end of the relevant fiscal period.
(Note 3) The figures are calculated by dividing the amount obtained by multiplying the total of net increase in monthly rents due to contract renewal and new lease by 6, by rents and common area fees income in the immediately
prior fiscal period, rounded to the first decimal place.
(Note 4) The figures are calculated by dividing the amount obtained by multiplying the total of net increase in monthly rents due to contract renewal and new lease by 6, by net income in the immediately prior fiscal period, rounded
to the first decimal place.

■ Changes in Ratios of Areas with Rent Increase/Decrease/
Unchanged and Cancellation upon Contract Renewal■ Changes in Rent Increase/Decrease Rate of Contract
Renewal Tenants (sections)(%)

22nd Period

42.6

53.4

3.9

15.0

0.2

21st Period

49.0

20th Period

50.1

37.5

19th Period

26.5

18th Period 4.8

8.6

0.7

61.1
70.8

5.0

2.7

66.7

0.0

19.9

17th Period

8.5

16th Period

10.0 4.6

77.1

8.2

15th Period

14.4

70.3

12.3

67.3

13.8

7.9*

14.1*

9.0

10.0

57.4

12.1

0.0

4.5
-5.2

-5.0

-7.0
-10.0

14th Period

3.1

18.9

13th Period

40.6

0.8

20.0

40.0

0.0

9.8
4.3

1.4

54.6
60.0

5.0
1.0

2.5

5.2
5.2
0.0

-6.5
-7.0

9.0

7.3
7.2

0.0

0.0

-4.9

6.1
6.1

-5.1

-10.2

-15.0
Increase rate

4.0

-20.0

100.0
(%)

-25.0

80.0

Decrease rate

-22.7
-22.7

Rent increase / decrease rate

* Of the increase in the 17th FP, 14.1% is due to some tenants switching from sublease agreements tomaster lease agreements and 7.9% is due to negotiations with tenants.

14th
15th
16th
17th
18th
19th
20th
21st
22nd
Period Period Period Period Period Period Period Period Period(Note 1) “Increase rate” and “Decrease rate” indicate the simple average of rent increase/decrease against
contract rents before renewals for lease contracts whose contract renewal periods have arrived in
the above periods and whose rent renewals have been agreed, rounded to the first decimal place.
(Note 2) “Rent increase / decrease rate” are obtained by dividing the total of contract rents after renewal forlease contracts whose contract renewals have been agreed by the total of contract rents before
renewal, rounded to the fist decimal place.

■ Increase/Decrease in Monthly Rent due to New Lease andIncrease/Decrease Rate (compared to the previous tenant
for the same section)■ Area of which Contract Ended/Will End In and Afterthe Fiscal Period Ended November 2016 (the 22nd fiscal period)(based on rentable area)

Decrease(Thousand yen)
60,000

Increase

New tenant (left axis)
Previous tenant (left axis)

Unchanged

Cancellation

Increase/decrease rate (right axis)

55,05452,58050,00059,042

(%)
22.5

(%)
30.0

Scheduled
25.0

40,00030,00032,18835,34515.0

14.0
29,203 29,970

9.8
20,000

20.0

24.6

23.6

46,142

18.1

17.6

18.2

24th Period

25th Period

15.0

7.2

7.5

10,000

10.0

5.0

2.6
0

0.0

19th Period

20th Period

21st Period

22nd Period(Note) “New tenant” refers to the tenant who concluded a new lease contract in the respective fiscal period,and “Previous tenant” refers to the tenant, for the same section for which the new tenant concluded alease contract, which had been under a lease contract immediately before the new tenant.

0.0

22nd Period

23rd Period

26th Period(Note) The ratio of areas of which lease contracts are scheduled to be renewed in each fiscal period to thetotal rentable area (329,312.48m2) as of the end of November 2016 is indicated.

I. Overview of Daiwa Office Investment Corporation

9

Internal Growth Measures“Bonji-Tettei”
Continuous internal growth and maximization of asset value through “Bonji-Tettei”“Bonji-Tettei”
Accurate grasp of present
situations◦In depth understanding of the leasing market◦Capturing real opinions of occupying tenants◦ Understanding of features of portfolio properties◦ Determined budget control

Activities for internal growth◦Proactive interactions with brokers◦Accompanying new tenant candidate viewings◦Frequent visit on tenants◦ Conducting tenant satisfaction surveys◦ Thorough examination of properties◦ Solid numerical analysis in detail

Realization of internal growth◦Prompt and appropriate strategic lease-up◦Realizing stable revenue over a long-term by building up solid relationships with tenants◦Reliable cost control based on rigorous repair plans, etc.

Aims to maximize asset value
Office Management Team
(7 members)

Aims to maximize asset value
through the organization of theinvestment corporation’s portfolio
by assigning personnel in charge
and specialist groups to each
property.

Hiroshi Udagawa Takafumi Ushiku Kotaro Ishii

Jun Arai

Chie Kamimura

Investment Planning Team

Middle office work: Budget and performance management for the portfolio

Construction Management
Team (4 members)

Engineering: Formulation and implementation of construction planning for assets(3 members)

Yuuki Kobatake

Jun Iwasaki

Asset management
Asset management
Asset management
Asset management
Asset management
Asset management
Asset management
work history:
work history:
work history:
work history:
work history:
work history:
work history: 1 month
10 years 4 months
12 years 2 months
10 years 7 months
10 years 7 months
10 years 5 months
4 years 1 month(Note) “Asset Management work history” is the number of years engaged in the relevant work (as of end of Nov. 2016) and does not indicate the number of years employed at the asset management company.

Occupancy Status of Properties Subject to Leasing Improvement in the Fiscal Period Ended November 2016 (22nd FP)■ Daiwa Tsukishima (Acquisition Price: 7,840 million yen)
100.0(%)■ Daiwa Shimbashi 510 (Acquisition Price: 2,080 million yen)

100.0

100.0

99.6

100.0(%)

99.6

100.0

90.0

13.2

‘15/11

‘16/2

‘16/5

‘16/8

88.0

‘15/11• Promoted to increase inquiries by holding property
viewings before and after the major renewal work andraising recognition of the property among brokers.
• Visited brokers separately considering businesscategories/styles that would match the property
characteristics and explained the property.

90.0
80.0

*
（82.2）

78.9

78.9

‘16/5

‘16/8

70.0
‘16/2

‘16/5

‘16/8

‘15/11‘16/11• Captured floor expansion motive of the existing tenants
through constant and good relationships and succeededin concluding a floor expansion agreement without
creating any downtime.

‘16/2‘16/11• With the property’s high scarcity value due to its
relatively new age and proximity to the station,
succeeded in drawing out the needs of major companies
by tapping into the needs for sub-offices/relocation of100
companies with rent-paying capacity.
• As a result of negotiations, contracts were concluded atan
90 early stage with favorable terms and conditions torealize full occupancy.

100

Properties Subject to Leasing Improvement in the Fiscal Period ending May 2017 (23rd FP)
80

80

70

70

100

*Without the floor expansion from the existing tenant, the occupancy
rate would have fallen to 88.2%.
50■ Daiwa Tsukishima (Acquisition Price: 7,840 million yen)
• Aim for securing tenants
centering on companies based in
the area, etc. by taking
advantage of favorable access tocentral Tokyo and relatively low
rent level for the size and gradeof the property.
• Aim for early leasing of theremaining vacancies bylaunching campaigns targeting
tenants and brokers.

10

100.0

88.0

70.0
‘16/11

100.0

100.0

80.0
0.0

100.0(%)

99.6

56.7

50.0

■ Daiwa Osaki 3-chome (Acquisition Price: 1,650 million yen)0

■ Concept Aoyama (Acquisition Price: 9,800 million yen)
• With the move-out of the main
tenant, implemented renovationof facilities (air-conditioning,plumbing-related) to enhancethe value of the building, which
had been left undone sincecompletion.
• Aim to take in needs of creative
businesses and/or needs from
Shibuya area where vacancies
are decreasing, capitalizing on
the brand strength of the
Aoyama area.

■ River Gate (Acquisition Price: 28,000 million yen)
• Aim for early securement of
tenants by taking advantage of theproperty feature capable ofsecuring 600 tsubos or larger area
per floor at a reasonable rent inTokyo’s major three wards.
• For leasing sections scheduled to
be vacated but still occupied(cancellation dates yet to arrive),
aim to conclude leasing contracts
before the cancellation dates byconducting a property viewing
using currently vacant sections.

90

Measures to Increase Portfolio Value■ Strategic Renewal Work■ Coexistence with Local Societies

Daiwa Tsukishima

Shinjuku Maynds Tower

Entrance
BeforeAfter

Elevator Hall
BeforeShinjuku Maynds Tower participated in “Shinjuku Minamirumi” (annual
event held for the fourth time) organized by Odakyu Electric Railway Co,
Ltd., Takashimaya Co., Ltd., East Japan Railway Company, Asahi MutualLife Insurance Company and Daiwa Securities, and arranged a delightful
space featuring shooting stars and snow crystals displayed in a row
from the snow-covered Christmas tree to the pedestrian deck and tothe main entrance.
Pedestrian Deck

Christmas Tree

Plants

Entrance

After

Restroom
BeforeAfter

Concept Aoyama
Restroom
BeforeAfterPeriod: November 9, 2016 – February 14, 2017

Environmental Efforts■ Progress in Introduction of Green Leasing at Shinjuku Maynds Tower
As part of measures to protect the environment and raise tenant satisfaction, the Investment
Corporation has taken initiatives in which it concludes green leasing agreements with tenants
and promotes installation of LED lighting in areas exclusively occupied by the tenants since2014. Around 40% of areas exclusively occupied by the tenants are expected to have LED
lighting in the fiscal period ending May 2017.

Benefits for Tenants•Reduction of utility charges and maintenancecosts•Improvement of working environment in offices•Contribution to corporate social responsibility(CSR)•Enhancement of the company’s image

Benefits for the Investment
Corporation•Reduction of maintenance costs•Enhancement of property value by making
energy-saving investments•Receiving green lease fees

Ratio of Areas with LED Lighting Installed*(%) 40.0

Shinjuku Maynds Tower

36.3

35.0
30.0
25.0
20.0

18.2

15.0
10.0
5.0

6.9
3.4

10.3

3.4

0.0

19th
20th
21st 22nd 23rd
18th
Period Period Period Period Period Period*Forecast figure is indicated for the 23rd FP.

■ Acquired “Green Star” Rating for 5th Consecutive Year at GRESB 2016
Daiwa Real Estate Management participated in the Global Real Estate Sustainability Benchmark (GRESB)’s GRESB Real Estate Assessment in 2016,
targeting Daiwa Office Investment Corporation, and received a high evaluation on sustainability in both “management and policy” and “implementationand measurement” and acquired Green Star, the highest category, for the fifth consecutive year.

I. Overview of Daiwa Office Investment Corporation

11

External Growth Measures
Investment in selectively-chosen, high-quality competitive properties even in a harsher acquisition environment

Current Portfolio and Acquisition Policy
DOI will invest in competitive properties based on in-depth data analysis upon careful selection from among the vast information on properties
obtained through diverse sourcing.
■ Distribution Chart of Portfolio Properties■ Acquisition Policy* Distance to station is indicated by calculating 80m as
one minute

Building age (years)
60• Place priority on the Five Central Wards of Tokyo and equivalent areas.
• Thoroughly select properties in view of actual demand toward location (distance tostation, station power, crowd attraction, surrounding environment), building specs, etc.

55

• Target properties to improve stability and profitability of our existing portfolio.

50

Properties acquired in the 23rd FP
Properties acquired in the 22nd FP
Properties acquired after the sponsor change
Properties acquired before the sponsor change
Properties sold in the 22nd FP• Invest in buildings with an age of less than 25 years.
45■ Sale Policy

40• Consider replacement of properties if necessary through sale in light of properties’
future competitiveness, profitability, etc.

35
Daiwa Kudan

30 Ogikubo■ Number of Properties Reviewed for Acquisition(cases)
500
400
300

300

268

200

25

100
0

* Number of gross proposals (cases)

Number of properties reviewed (left axis)
Number of properties reviewed
416
in detail (right axis)

100

393

356
264

28

17

296

289

15

26

23

9th Period

40

10th Period
Daiwa
Daiwa Kudan
Nishi-Shimbashi

Square Daikanyama Building

15

18

Heiwa Higashi-nihonbashi Building

10

20

5

0

0

Property Acquisitions after Sponsor Change
Daiwa Jimbocho

20

60

31
12

ShinjukuWest Building

80

344

14th Fiscal 15th Fiscal 16th Fiscal 17th Fiscal 18th Fiscal 19th Fiscal 20th Fiscal 21st Fiscal 22nd Fiscal
PeriodPeriodPeriodPeriodPeriodPeriodPeriodPeriodPeriodTime of Acquisition

Shin Kanda Mikuracho Building

TM Building

25

0

1

2

3

4

5

6

7

11
8
9
10
Distance to station (minutes)

Total acquisition price: 244,199 million yen

11th Period
Daiwa
Daiwa
Kayabacho Building Jinbocho 3-chome

12th Period
E SPACE TOWER

13th Period
Daiwa Nihonbashi
Hongokucho

14th Period
Daiwa
Osaki 3-chome

Property
nameAcquisition price

Chiyoda Ward, Tokyo
4,150 million yen

Minato Ward, Tokyo
5,000 million yen

Chiyoda Ward, Tokyo
4,000 million yen

Chuo Ward, Tokyo
5,600 million yen

Chiyoda Ward, Tokyo
3,550 million yen

Shibuya Ward, Tokyo
24,000 million yen

Chuo Ward, Tokyo
1,721 million yen

Shinagawa Ward, Tokyo
1,650 million yen

Seller

ORIX JREIT Inc.

Japan Core Asset 2 YK
(Note 1)

Shining Nova No. 5 B(SPC)

Daiwa Property Co.,Ltd.

Tokyu Land Corporation Endeavor Realty FundYK (Note 1)

Tosei Corporation

MCR Six GK

Acquisition
dateMar. 10, 2010

Aug. 13, 2010

Sept. 2, 2010

Mar. 25, 2011

Mar. 29, 2011

July 8, 2011

May 11, 2012

Sept. 18, 2012

shinyon curumu

Daiwa Meieki

Daiwa Kamiooka

Daiwa Shibuya
Dougenzaka

Daiwa Akasaka

Daiwa Shibuya
Miyamasuzaka

Integral Tower

Shinjuku Ward, Tokyo
9,650 million yen

Nagoya City, Aichi
5,300 million yen

Yokohama City, Kanagawa
2,000 million yen

Shibuya Ward, Tokyo
4,500 million yen

Minato Ward, Tokyo
9,200 million yen

Shibuya Ward, Tokyo
7,000 million yen

Suginami Ward, Tokyo
15,220 million yen

SellerTwo domestic industrial
companies

Domestic special
purpose company

Shimizu Corporation

Domestic special
purpose company

Hakuba Capital 1 TMK(Note 1)E Buildings Limited
Liability Company

Ogikubo Building YK(Note 1)

Acquisition
dateDec. 3, 2012
Apr. 12, 2013

Feb. 1, 2013

Mar. 1, 2013

July 3, 2013

Aug. 9, 2013

Sept. 27, 2013

May 29, 2014

Area

15th Period

Time of Acquisition

16th Period

17th Period

Property
nameArea
Acquisition price(Note 1) "YK" stands for limited liability company and TMK (tokutei mokuteki kaisha) stands for special purpose company.
(Note 2) The sum of i) the total acquisition price from the time of the above sponsor change on December 21, 2016 and ii) prices for additional acquisition of owned properties or of the site in owned properties during the same period, is 244,619 million yen.

12

Changes in Asset Size and Trading Performance
Aim to achieve medium-term goal of an asset size of 500 billion yen by utilizing acquisition capability earned through capital increase(billion yen) 550

80.0 (%)
Total Acquisition Price

LTV (based on total assets) (right axis)

500

Investment for competitive
properties after thorough selection

445.7

450

458.3

469.3

413.2

400
350

313.2

311.3

300
250

500.0
467.7

269.1

265.0

278.1

314.9

332.0

287.3
34.2

34.0

34.4

37.5

60.0

387.5

364.0

352.7

50.0

44.3

43.0

40.6

41.7

40.2

43.3

Acquisition properties

42.3
40.0

Acquisition properties• River Gate
• Heiwa Higashi
Daiwa Hatchobori ekimaenihonbashi Building• Azabu Green Terrace •• Square Daikanyama•
Daiwa
Hatchobori
ekimae• Kitahama
25.5
Acquisition properties
25.3
Building
West
Grand
Building
Acquisition property • Daiwa Shibuya Dougenzaka• Shinjuku West Building
150• Ogikubo TM Building• Daiwa Akasaka
Acquisition properties
Acquisition property• Daiwa Osaki• Daiwa Shibuya Miyamasuzaka
Acquisition properties
3-chome• Daiwa Nishi-Shimbashi • E SPACE TOWER• Daiwa Ebisu 4-chome• Daiwa Kudan
Acquisition property
100• LAQUAS Higashi Shinjuku Acquisition properties• Nikko Building• Shin Kanda• Concept Aoyama
Acquisition properties
Acquisition property• Kirin Nihonbashi
Mikuracho Building• Shinsen Place
Acquisition property
Acquisition properties
Acquisition property• shinyon curumu• Integral Tower
Building
•
Glass
City
Shibuya50• Daiwa Jimbocho• Daiwa Kayabacho• Daiwa Nihonbashi • Daiwa Meieki• Meguro Place Tower• Daiwa Kamiooka• Daiwa Jinbocho 3-chome Hongokucho

28.1

200

70.0

Acquisition properties

28.9

30.0

20.0

10.0

0.0

0
8th
9th
10th
11th
12th
13th
14th
15th
16th
17th
18th
19th
20th
21st
22nd
As of Dec.
Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period 31, 2016

18th Period
Kitahama Grand
Building

Azabu Green Terrace

19th Period

Mediumterm goal

20th Period

Daiwa
Ebisu 4-chome

LAQUAS Higashi
Shinjuku

Concept Aoyama

Shinsen Place

Glass City Shibuya Meguro Place Tower

River Gate

Minato Ward, Tokyo
14,000 million yen

Osaka City, Osaka
9,481 million yen

Shibuya Ward, Tokyo
4,135 million yen

Shinjuku Ward, Tokyo
8,450 million yen

Shibuya Ward, Tokyo
9,800 million yen

Shibuya Ward, Tokyo
4,800 million yen

Shibuya Ward, Tokyo
16,000 million yen

Meguro Ward, Tokyo
5,600 million yen

Chuo Ward, Tokyo
28,000 million yen

Azabu Green Terrace
GK

GK North Beach

Domestic industrial
company

Higashi Shinjuku
Building TMK (Note 1)

Domestic special
purpose company

Domestic special
purpose company

Glass City TMK(Note 1)

Meguro Place TMK(Note 1)Thames TMK (Note 1)

July 4, 2014

Aug. 1, 2014

Dec. 1, 2014

Dec. 3, 2014

Mar. 2, 2015

Mar. 2, 2015

May 1, 2015

May 1, 2015

June 2, 2015

22nd Period
Heiwa Higashi
Square Daikanyama
Shinjuku Westnihonbashi Building
Building
Building

Ogikubo TM
Building

23rd Period
Shin Kanda
Mikuracho Building

20th Period
Daiwa
Daiwa Hatchobori
Hatchobori ekimaeekimae West

21st Period
Kirin Nihonbashi
Building

Nikko Building

Chuo Ward, Tokyo
2,871 million yen

Chuo Ward, Tokyo
1,647 million yen

Shinjuku Ward, Tokyo
13,710 million yen

Chuo Ward, Tokyo
8,180 million yen

Chuo Ward, Tokyo
6,370 million yen

Shibuya Ward, Tokyo
2,280 million yen

Shinjuku Ward, Tokyo Suginami Ward, Tokyo Chiyoda Ward, Tokyo
942 million yen
3,800 million yen
1,592 million yen

Domestic industrial
company

Domestic industrial
company

Overseas company

Kirin Beer Marketing

Domestic special
purpose company

Hulic

GK TC1GK TC1OH Real EstateManagement

Sept. 11, 2015

Sept. 11, 2015

Mar. 29, 2016

May 26, 2016

June 1, 2016

June 29, 2016

July 21, 2016

July 21, 2016

Dec. 21, 2016

(Note 3) Total acquisition price above includes acquisition prices of Daiwa Shibuya Dougenzaka divested in the 21st fiscal period and Daiwa Kudan divested in the 22nd fiscal period.

I. Overview of Daiwa Office Investment Corporation

13

External Growth Measures

Newly Acquired Properties■ 22nd Fiscal Period

Heiwa Higashi-nihonbashi Building [Acquired on June 1, 2016]
Location

Higashi-nihonbashi, Chuo-ku, Tokyo

Site Area

1,213.24m2

Square Daikanyama Building [Acquired on June 29, 2016]
Location
Daikanyama-cho, Shibuya-ku, Tokyo
Site Area
503.72m2
Structure/Floor S/6F
Total Floor Area 1,989.40m2
Acquisition Price 2,280 million yen

Structure/Floor S/7F
Total Floor Area 6,724.10m2
Acquisition Price 6,370 million yen

Appraisal Value 2,420 million yen (as of June 1, 2016)

Appraisal Value 6,450 million yen (as of April 30, 2016)
Construction Date March 2008

Construction Date March 2001

Occupancy Rate 100.0% (as of June 1, 2016)

Occupancy Rate 100.0% (as of June 29, 2016)

Number of Tenants 5 (as of June 1, 2016)

Number of Tenants 1 (as of June 29, 2016)• Located a 2-minute walk from Higashi-Nihonbashi Station on the
Toei Asakusa Subway Line and Bakuro-Yokoyama Station on the Toei
Shinjuku Subway Line and 3-minute walk from Bakurocho Station on
the JR Sobu Line (Rapid).
• Since the Horidomecho and Higashi-Nihonbashi area flourishedcentering on textile industry for a long time, specific demands fromapparel companies and such are expected.
• Exterior with a modern façade mostly covered with glass.

• Located a 7-minute walk from Daikanyama Station on the Tokyu
Toyoko Line and Shibuya Station on the JR Yamanote Line.
• Faces Hachiman Dori which is a very busy street and an exclusive
residential area and apparel shops are located in the surrounding
areas.
• Highly flexible layout and efficient use is possible, and features
exterior with a modern façade mostly covered with glass.

Shinjuku West Building [Acquired on July 21, 2016]

Ogikubo TM Building [Acquired on July 21, 2016]

Location
Nishishinjuku, Shinjuku-ku, Tokyo
Site Area
623.78m2
Structure/Floor RC/4F
Total Floor Area 1,438.16m2
Acquisition Price 942 million yen

Location
Ogikubo, Suginami-ku, Tokyo
Site Area
970.53m2
Structure/Floor SRC/B1/7F
Total Floor Area 5,116.78m2
Acquisition Price 3,800 million yen

Appraisal Value 1,140 million yen (as of July 1, 2016)

Appraisal Value 4,230 million yen (as of July 1, 2016)

Construction Date March 1989

Construction Date November 1990

Occupancy Rate 100.0% (as of July 21, 2016)

Occupancy Rate 100.0% (as of July 21, 2016)

Number of Tenants 7 (as of July 21, 2016)

Number of Tenants 11 (as of July 21, 2016)• Located a 2-minute walk from Nishi-Shinjuku Station on The Tokyo
Metro Marunouchi Line and a 7-minute walk from Shinjuku Station
which is the largest terminal station in Tokyo.
• Location amidst a concentration of various shop-visit type service
related industries such as temporary staffing businesses andfinancial businesses for end users of insurance, etc.
• Can also accommodate the office needs for a sales base that
requires loading/unloading as flat parking in the premises as well as
warehouse sections on each floor are provided.

• Located a 1-minute walk from Ogikubo Station on the JR Chuo/Sobu
Lines and the Tokyo Metro Marunouchi Line.
• The property has high locational appeal among local residents toservice-related companies such as banks and securities companies,
cram schools and clinics since it is excellent in terms of proximity to
Ogikubo Station. Also, back office demands of large companies incentral Tokyo such as call centers are also assumed.
• Highly flexible layout and efficient use is possible, and it is well-lit.

■ 23rd Fiscal Period

Shin Kanda Mikuracho Building [Acquired on December 21, 2016]• Located a five-minute walk from Kanda Station on the JR
Yamanote/Keihin Tohoku/Chuo Lines and the Tokyo Metro
Ginza Line and a four-minute walk from Shin-Nihonbashi
Station on the JR Sobu Line.
• Located a seven-minute walk from Mitsukoshimae Stationon the Tokyo Metro Ginza/Hanzomon Lines andKodenmacho Station on the Tokyo Metro Hibiya Line, andIwamotocho Station on the Toei Shinjuku Line.
• Rectangular-shaped (regular-shaped) rental space with nopillars with highly flexible layout, so efficient use ispossible.

14

Location
Site Area
Structure/Floor
Total Floor Area
Acquisition Price

Kanda Mikuracho, Chiyoda-ku, Tokyo
365.65m2
SRC/S/B1/7F
2,167.76m2
1,592 million yen

Appraisal Value

1,680 million yen (as of December 1, 2016)

Construction Date January 1991
Occupancy Rate

43.4% (as of December 21, 2016)

Number of Tenants 3 (as of December 21, 2016)

Financial Conditions
Reduce refinancing risk by extending borrowing periods and diversifying repayment dates

Status of Interest-Bearing Liabilities (as of November 30, 2016)
During the 22nd Fiscal Period, DOI took out short-term loans of 8 billion yen in total to raise funds for the acquisition of new properties,
and also conducted early repayment of existing loans (10 billion yen in total) including part of the aforementioned short-term loans.
In addition, DOI refinanced matured existing loans (1.5 billion yen), successfully diversifying repayment dates.
DOI will continue to focus on stable financial management.
■ Interest-Bearing Liabilities■ Change in Remaining Years at Time of
Procurement of Interest-Bearing Liabilities

70.0 (%) (years) 10.0

(billion yen) 280
Interest-bearing liabilities (left axis)

240

60.0

LTV (based on acquisition price) (Note) (right axis)

200

50.0

Medium-to-long term, upper-limit LTV target range

160

40.0

9.0
8.0
7.0

Average year remaining at the period end (right axis)
Average remaining years at the time ofprocurement during the 22nd Fiscal Period(left axis)

10.0

5.0 (years)

4.5

4.5

4.1 4.0
7.1

6.0

3.5
3.0

5.0

2.5

120

30.0

4.0

2.0

80

20.0

3.0

1.5

2.0
40

10.0

0

0.0
End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of
7th 8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd
Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period

2.4

1.0

1.0
0.5
0.0

0.0
8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd
Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period(Note) LTV (based on acquisition price): Total interest-bearing liabilities / Total acquisition price of properties(Note) Dotted line indicates average remaining years at the time of procurement during
the 22nd Fiscal Period excluding short-term borrowings■ Diversification of Repayment Dates■ Balance of Borrowings by Financial Institution(million yen)
25,000Financial institution
Investment Corporation Bond

20,00015,00010,0005,000

023rd 24th 25th 26th 27th 28th 29th 30th 31st 32nd 33rd 34th 35th 36th 37th 38th 39th 40th 41st 42nd
Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period■ Ratio of Fixed- to
Floating-Rate Borrowings■ Ratio of Long- to
Short-Term Liabilities

End of 22nd
Fiscal Period 19.6%

End of 22nd
Fiscal Period

80.4%

14.3
%

85.7%

Fixed interest rates

Long-term loans payable, etc.

Floating interest rates

Short-term loans payable, etc.

Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Trust Bank
Development Bank of Japan
Mizuho Bank
The Bank of Tokyo-Mitsubishi UFJ
Shinsei Bank
Resona Bank
Mitsubishi UFJ Trust and Banking
Mizuho Trust and Banking
The Bank of Fukuoka
Kansai Urban Banking Corporation
Aozora Bank
Nishi-Nippon City BankORIX Bank Corporation
The Gunma Bank
The 77 Bank
The Musashino Bank
Tokio Marine & Nichido Fire Insurance
The Yamaguchi Bank
The Higashi-Nippon Bank
Nippon Life Insurance Company
The Kagawa Bank
The Hiroshima Bank
Taiyo Life Insurance Company
Fukoku Mutual Life Insurance
Investment Corporation Bonds
Total

Balance (mm yen)

41,40024,85021,75019,40016,00014,00012,500
8,500
6,000
5,500
5,000
3,000
3,000
2,500
2,500
2,000
2,000
2,000
2,000
1,500
1,300
1,000
1,000
300
200
5,100
204,300

Share

20.3%
12.2%
10.6%
9.5%
7.8%
6.9%
6.1%
4.2%
2.9%
2.7%
2.4%
1.5%
1.5%
1.2%
1.2%
1.0%
1.0%
1.0%
1.0%
0.7%
0.6%
0.5%
0.5%
0.1%
0.1%
2.5%
100.0%■ Status of Rating
Rating agency

Rating and Investment Information, Inc. (R&I)
Japan Credit Rating Agency, Ltd. (JCR)

Target rating

RatingRating outlook

Issuer rating

A+

StableLong-term issuer rating

AA−

StableI. Overview of Daiwa Office Investment Corporation

15

Description of Asset Manager

Organization of Asset Manager (as of December 31, 2016)■ Description■ Directors and Auditors

Company Name

Daiwa Real Estate Asset Management Co., Ltd

President and Representative Director

Akira Yamanouchi

Address

6-2-1 Ginza, Chuo-ku, Tokyo

Established

October 21, 2004

Vice President and Representative
Director

Yuji Shinotsuka

Paid-in Capital

200 million yen
Akira Yamanouchi

Vice President and Representative
Director

Yoshiki Nishigaki

President

Director

Naoyuki Owa

Director (non-executive)

Mikita Komatsu

Director (non-executive)

Akihiko Ogino

AuditorTamaki Shibayama

9
Executive directors: 4; Executive auditors: 1
Non-executive directors: 2; Non-executive auditors: 2

Board of Directors
No. of Employees

69 (excluding dispatched employees)

Registration of Financial
Instruments Business Operator

Registration No. 355 (Financial Instruments), Director-General,
Kanto Local Finance Bureau (Kinsho)

Auditor (non-executive)

Morimasa Matsuda

Building Lots and Buildings
Transaction Business License

Auditor (non-executive)

Shinji Kiso

License No. (3)-83920, Governor of Tokyo■ Organizational Chart

Discretionary Agent for Real
Estate Transaction Approval

License No. 34, Minister of Land, Infrastructure, Transport andTourism

Association Membership

Member of The Investment Trusts Association, Japan
Member of Japan Investment Advisers Association
Member of Type II Financial Instruments Firms Association

Shareholders’ Meeting
Corporate Auditors

Board of Directors

Compliance Committee
Investment Committee（*）

President andRepresentative Director

Compliance Officer
Internal Control OfficeAcquisition
Department
OfficeInvestment Team

Origination
Department

Asset Management
Department
OfficeManagement Team

Private FundManagement Department

Customer Relations
Department

Finance
Department

Administration
Department

Corporate Planning
Department

Finance Team

Residential
Investment Team

Residential
Management Team

Accounting Team

Healthcare
Investment Team

Healthcare
Management TeamManagement Team

Infrastructure
Investment Team

Investment
Planning Team
Construction
Management Team

*Set up separately for each
investment corporation

Structure
Asset Manager
General Administrator
related to the operation of theadministrative instruments
Daiwa Real Estate AssetManagement Co., Ltd④①

Investment Corporation②

General Administrator
Asset Custodian
Sumitomo Mitsui Trust Bank, Limited

General Meeting of Unitholders
Officers
Executive Director: Yoshimi Murakami
Supervisory Director: Takayuki Hiraishi
Supervisory Director: Hiroshi Sakuma

Supporting Company

Accounting Auditor

Daiwa Securities Group Inc.

KPMG AZSA LLC① Asset management contract/General administration affairs contract related to operationof administrative instruments② General administrative affairs contract/Asset custodian contract③ Unitholder register, etc. management contract/Special account management contract③⑤

Manager of Unitholder
Registry, etc.
Special Account Management
Institution
Sumitomo Mitsui Trust Bank, Limited

General Administrator(Investment Corporation Bonds)
Sumitomo Mitsui Banking Corporation
Resona Bank, Ltd.

④ Sponsor support agreement⑤ Fiscal agency agreement(Note) The specified affiliated juridical person (meaning a specified affiliated juridical person as provided in Article 12, Paragraph 3 of the Cabinet Office Ordinance on Disclosure of Information, etc. on Specified
Securities (Ordinance of the Ministry of Finance No. 22 of 1993; including amendments thereto)) of DOI is Daiwa Securities Group Inc. Daiwa Securities Group Inc. is the Asset Management Company’s parent
company (meaning a parent company as stipulated in Article 8, Paragraph 3 of the Ordinance on Terminology, Forms and Preparation Methods of Financial Statements, etc. (Ordinance of the Ministry of Finance
No. 59 of 1963; including amendments thereto))16II. Asset Management Report
1. Management Status and Other Performance Highlights Data
Fiscal Period

22nd Period 21st Period 20th Period 19th Period 18th Period

June 1, 2016 From Dec. 1, 2015 From June 1, 2015 From Dec. 1, 2014 From June 1, 2014
( From
To Nov. 30, 2016 )( To May 31, 2016 )( To Nov. 30, 2015 )( To May 31, 2015 )( To Nov. 30, 2014 )(1) Operating Performance(Millions of yen, except per unit data or where otherwise indicated)
Operating revenues
12,85312,363
11,838
10,387
9,764
Rental revenues
12,687
11,948
11,777
10,112
9,693
Operating expenses
6,710
6,255
6,223
5,617
5,325
Property-related expenses
5,433
5,014
5,026
4,487
4,325
Operating income
6,143
6,108
5,615
4,770
4,439
Ordinary income
5,325
5,327
4,690
4,032
3,642
Net income
5,325
5,250
4,689
4,032
3,641
(2) Properties, etc. (as of end of period)
Total assets
483,451476,690
460,706
432,233
399,555[period-on-period percentage changes][+1.4%][+3.5%][+6.6%][+8.2%][+4.9%]
Interest-bearing liabilities
204,300
206,300
192,300
191,300
160,800
Net assets
256,517
247,720
247,700
222,955
222,593[period-on-period percentage changes][+3.6%][+0.0%][+11.1%][+0.2%][+10.4%]
Unitholders’ capital
251,552
243,404
243,404
219,156
219,156(3) Distributions
Total distribution amount
5,325
5,086
4,689
4,032
3,641
Dividend payout
100.0%
96.9%
100.0%
100.0%
100.0%(4) Per Unit Information
Total number of units issued (units)497,869
484,000
484,000
441,000
441,000
Net assets per unit (yen)515,231511,819
511,778505,566
504,746
Distribution per unit (yen)10,695
10,508
9,688
9,142
8,256
Distribution amount from earnings per unit (yen)10,695
10,508
9,688
9,142
8,256
Distribution amount in excess of earnings per unit (yen)
–
–
–
–
–
(5) Financial Indicators
1.1%
1.1%
1.1%
1.0%
0.9%
ROA
Notes 2and3[annual rate][2.2%][2.3%][2.1%][1.9%][1.9%]
2.1%
2.1%
2.0%
1.8%
1.7%
ROE
Notes 3and 4[annual rate][4.2%][4.2%][4.0%][3.6%][3.4%]
Capital ratio
53.1%
52.0%
53.8%
51.6%
55.7%
[period-on-period percentage changes][+1.1%][−1.8%][+2.2%][−4.1%][+2.7%]LTV (loan to value)
42.3%
43.3%
41.7%
44.3%
40.2%
Note 5
Property leasing cash flows (NOI)
9,004
8,660
8,455
7,180
6,866
(6) Other Referential Information
Number of investment properties
53
50
50
47
46
Note 6
558
543
558
450
479
Number of tenants
336,722.04 328,027.44 325,313.01 288,833.07 286,088.89
Total rentable area (m2)
Note
7
97.7%
98.7%
98.3%
97.3%
97.2%
Occupancy rate
Depreciation
1,750
1,726
1,704
1,554
1,497
Capital expenditures
993
517
1,087
905
570
(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)

Operating revenues, etc. do not include consumption taxes, etc.
ROA: Ordinary income ÷ [(Total assets at beginning of period + Total assets at end of period) ÷ 2] × 100
Figures for the 18th Fiscal Period are the annualized figures calculated based on 183 days of management.
Figures for the 19th Fiscal Period are the annualized figures calculated based on 182 days of management.
Figures for the 20th Fiscal Period are the annualized figures calculated based on 183 days of management.
Figures for the 21st Fiscal Period are the annualized figures calculated based on 183 days of management.
Figures for the 22nd Fiscal Period are the annualized figures calculated based on 183 days of management.
ROE: Net income ÷ [(Net assets at beginning of period + Net assets at end of period) ÷ 2] × 100
Property leasing cash flows (NOI): Rental revenues − Property-related expenses + Depreciation
Number of tenants is the number of end tenants. When there is a tenant occupying multiple buildings, the concerned tenant iscounted and stated for each individual building.
Occupancy rate: Total leased area ÷ Total rentable area

II. Asset Management Report17

2. Developments in Asset Management in the Fiscal Period under Review(1) Brief History of the Investment Corporation
Daiwa Office Investment Corporation (the former DA Office Investment Corporation; hereinafter referred
to as “DOI”) was established on July 11, 2005 in accordance with the Act on Investment Trusts andInvestment Corporations (Act No. 198 of 1951; including amendments thereto) with Daiwa Real Estate AssetManagement Co., Ltd. (former name K.K. daVinci Select) (the “Asset Manager”) as the organizer. After its
establishment, DOI implemented an additional issuance of investment units through a public offering (99,600
units) on October 18, 2005 and then listed on the Tokyo Stock Exchange, Inc. (TSE) Real Estate Investment
Trust Section (stock code: 8976) on the following day.
Though initial assets under management were 79,573 million yen (sum total of acquisition price),
subsequent activities, such as additional acquisition of properties and replacement of portfolio properties,
resulted in the assets under management amounting to 467,750 million yen as of the last day of November
2016.
DOI strives to secure stable revenue and sustained growth of the investment assets based on a clear
portfolio development policy of specializing in investment in office buildings, with a particular focus on
investment in a total floor area of more than about 2,000m2 situated in downtown Tokyo, as well as throughdedicated efforts to heighten tenant satisfaction levels.
(2) Investment Environment and Management Performance(A) Investment Environment (from June 2016 to November 2016)
The Japanese economy during the fiscal period under review continued to show a modest recovery
trend with real GDP growth rate (Second Preliminary Estimates) for July to September 2016 at an annual
rate of 1.3%, recording a positive figure for three consecutive quarters under the ongoing quantitative/
qualitative monetary easing policy by the Bank of Japan.
In the office building leasing market in central Tokyo, with new supply having settled down, the vacancy
rate took a turn after peaking in June 2013, dropping to 3.75% at the end of November 2016. Led by
improvement in the vacancy rate for large buildings, the overall vacancy rate that includes small- to
medium-sized buildings also continues to be on an improving trend. The drop in the vacancy rate has led
to an increase in office rent in some areas, and the market as a whole continues to see increase in rent,
albeit slight.
For the office building transaction market, an appetite for property acquisitions continued to be strong
among real estate companies, funds (including J-REITs) and overseas investors with the continuing
proactive lending attitude by financial institutions backed by the forecast of an increase in property prices
in accordance with expectations for economic recovery.
(B) Management Performance
In view of increasing the long-term EPS (EPS (net income per unit) after deducting gain on sales ofproperties) over the medium to long term, DOI continued to work on “external growth,” which aims toboost revenue through acquisition of properties, and “internal growth,” which aims to maximize income
generating from owned properties.
Concerning external growth, DOI acquired “Heiwa Higashi-nihonbashi Building” (acquisition price: 6,370
million yen) and “Square Daikanyama Building” (acquisition price: 2,280 million yen) in June 2016, and“Ogikubo TM Building” (acquisition price: 3,800 million yen) and “Shinjuku West Building” (acquisition
price: 942 million yen) in July 2016. In addition, DOI sold 1 property (Daiwa Kudan) during the fiscal period
under review. As a result, DOI’s assets under management as of the end of the 22nd Fiscal Period(November 30, 2016) totaled 53 properties, the sum total of acquisition prices of which amounted to467,750 million yen.
Concerning internal growth, while the office leasing market trended, DOI conducted proactive leasing,such as capturing needs for floor expansion within the same property through strengthening relationships
with existing tenants and reinforcing collaboration with leasing brokers and property managers. As aresult, the occupancy rate as of the end of the 22nd Fiscal Period (November 30, 2016) was 97.7%.

18

(3) Overview of Capital Procurement(A) Procurement of Capital for New Property Acquisitions(a) In the 22nd Fiscal Period, DOI made the following borrowings and issued the following investment units
to fund the acquisition of new properties.
・DOI took out short-term loans of 6,000 million yen in total from Sumitomo Mitsui Banking
Corporation, Mizuho Bank, Ltd. and The Bank of Tokyo-Mitsubishi UFJ, Ltd. on June 1, 2016 topartially fund the acquisition of a new property (Heiwa Higashi-nihonbashi Building) acquired on thesame day.
・DOI took out a short-term loan of 2,000 million yen from Sumitomo Mitsui Banking Corporation on
June 29, 2016 to partially fund the acquisition of a new property (Square Daikanyama Building)acquired on the same day.
・A public offering with the payment date on August 2, 2016 (12,700 issued units, paid-in price of
587,489 per unit, a total paid-in price of 7,461,110,300 yen) and a third-party allotment with thepayment date on August 31, 2016 (1,169 issued units, paid in price of 587,489 per unit, a total
paid-in price of 686,774,641 yen) were implemented to repay part of the aforementioned short-termloans totaling 8,000 million yen and to allocate the funds to cash on hand which decreased after
being used to acquire new properties (Ogikubo TM Building and Shinjuku West Building) acquiredon July 21, 2016.
(B) Procurement of Capital for Repayment of Borrowings
In the 22nd Fiscal Period, DOI made the following borrowings to fund the repayment of borrowings thatwere due for repayment.
・A total amount of 1,500 million yen was borrowed from Yamaguchi Bank Ltd. on August 31, 2016
to fund the repayment of the same amount borrowed from Aozora Bank, Ltd. due the same day.
DOI made an early repayment on September 30, 2016 of 10,000 million yen out of 11,000 million yen in
total borrowings (long-term loans from Sumitomo Mitsui Banking Corporation and Sumitomo Mitsui Trust
Bank, Ltd. taken out on May 26, 2016; short-term loans from Sumitomo Mitsui Banking Corporation,
Mizuho Bank, Ltd. and The Bank of Tokyo-Mitsubishi UFJ, Ltd. taken out on June 1, 2016; and a short-termloan from Sumitomo Mitsui Banking Corporation taken out on June 29, 2016).
(C) Status of Interest-Bearing Liabilities at End of the Fiscal Period under Review
As a result of the above, the balance of interest-bearing liabilities outstanding as of the end of the 22nd
Fiscal Period (November 30, 2016) stood at 204,300 million yen (short-term debt: 1,000 million yen; longterm debt: 198,200 million yen; investment corporation bonds: 5,100 million yen). The balance of the current
portion of long-term debt stood at 28,250 million yen.
The average remaining period of interest-bearing liabilities as of the end of the 22nd Fiscal Period stands
at 4.1 years.
(4) Capital Expenditures during the 21st Fiscal Period
The following summarizes the primary construction work that constitutes capital expenditures implemented
during the 22nd Fiscal Period. Capital expenditures for the 22nd Fiscal Period amounted to 992 million yen
and, when combined with the 456 million yen in repair expenses charged to the 22nd Fiscal Period expenses,
totals 1,449 million yen in construction work were implemented.
Name of real estate
properties(Location)
Daiwa Tsukishima(Chuo-ku, Tokyo)
Shinjuku Maynds Tower(Shibuya-ku, Tokyo)
Daiwa Shibaura(Minato-ku, Tokyo)

PurposeRenovation work of common areas
Repair work of mechanical parking facility
Upgrading of elevators

Other
Total

Period
From:
To:
From:
To:
From:
To:
From:
To:

Apr. 2016
Jul. 2016
Jul. 2016
Oct. 2016
Aug. 2016
Nov. 2016
Jun. 2016
Nov. 2016

Construction
amount paid
(Millions of yen)
70
69
64
790
993

II. Asset Management Report19(5) Overview of Financial Performance and Distributions
As a result of the management described above, DOI posted financial performance for the 22nd Fiscal Periodof 12,583 million yen in operating revenues, 6,143 million yen in operating income, 5,325 million yen in ordinary
income and 5,325 million yen in net income.
Concerning distributions, it is planned that the amount equivalent to distributions from earnings would be
included in the amount of tax-deductible expenses based on application of special provisions for taxation of
corporation tax (Article 67-15 of the Act on Special Measures Concerning Taxation (Act No. 26 of 1957;
including amendments thereto) (the “Special Taxation Measures Act”)). Accordingly, DOI decided to distributethe entire amount of unappropriated retained earnings (excluding fractions of the distribution amount per unitthat are less than 1 yen), and declared a distribution amount per unit of 10,695 yen.

3. Outlook for the Next Fiscal Period(1) Investment Environment
The Japanese economy going forward is expected to see a moderate economic recovery through recovery
in personal spending against the backdrop of favorable employment environment and the improved income
environment while various economic measures, centering on the public works projects and financial policies
promoted by the Abe administration and the monetary easing policy implemented by Bank of Japan continue.
However, factors, such as policies to be set out by the U.S. President-elect Donald Trump, the downward
swing of the Chinese economy, upset in emerging markets accompanying the U.S. “exit strategy,” drop in
stock prices around the world due to geopolitical risks and downturn of the European economy, pose
potential risks of disrupting the Japanese real economy and financial environment, and are thus thought torequire attention.
In the Tokyo office building leasing market, while new supply is on a low note, factors such as improvement
in employment are stimulating demand, resulting in the vacancy rate dropping. Improvement in corporate
performance is forecasted to increase demand for office floor space and rent is expected to improve as aconsequence. In the office building transaction market, backed by the favorable financing environment andexpectations of rent rising, among other factors, property acquisition appetite among investors overseas, realestate companies and funds (including J-REITs) is thought to grow even stronger.
(2) Future Management Policy and Tasks(A) Strategy for Managing Existing Properties
Despite such office leasing market conditions as described above, the tenant side is also expected to
become more heavily selective with properties in terms of software such as crime/disaster prevention
measures and operations/management on top of location and building specifications. Consequently, DOI
will carry out operational management under the following policy with an aim to enhance thecompetitiveness of existing properties and thereby increase the normal EPS over the medium to longterm.
(a) Maintain and raise occupancy rates
Concerning existing tenants, strive to reduce vacancy risks by improving the quality of buildings,
equipment and management system. In addition, concerning new tenants, strive to maintain and raiseoccupancy rates through the provision of services that are of higher satisfaction levels than competing
properties through proactive participation in the market.
(b) Maintain and raise profitability
Aim to secure stable revenue over the medium to long term through further strengthening good
relationships with existing tenants, as well as proactively tapping the needs of new tenants bydiscerning the market environment.
(c) Lower operational management costs
Strive to lower operational management costs based on maintaining office environments of hightenant satisfaction levels by implementing efficient operational management and reviewing systematicconstruction work by optimally leveraging the economies of scale achieved from proactively realizing
external growth.

20(B) Strategy for New Property Investments
DOI will invest in office buildings that have a total floor area of about 2,000m2 or more based on various
external growth strategies, while maintaining a balance with the asset acquisition environment andfinancing situation. In principle, considerations will focus on Tokyo as the investment target area, but DOI
will also consider investing in competitive properties in cities other than Tokyo from a viewpoint ofterritorially-distributed investments.
As pipeline support, in addition to expanding its own information-sourcing channels, DOI will continue tosearch for properties that meet its investment criteria by proactively gathering real estate transaction
market information through greater collaboration with the Asset Manager and Sponsor Group and utilizing
the Group’s extensive network of clients, partners, etc.
Furthermore, in the 22nd Fiscal Period, DOI acquired “Heiwa Higashi-nihonbashi Building,” “Square
Daikanyama Building,” “Shinjuku West Building” and “Ogikubo TM Building” which are located in Tokyo.
DOI believes that acquisition of these properties will contribute to further stabilization and enhancement of
the portfolio. DOI will continue to strive to acquire properties in line with the investment strategy describedabove.
(C) Financial Strategy
DOI will conduct disciplined financial management of the following basic content.
(a) Control leverage by keeping the ratio of interest-bearing liabilities to total assets (LTV) within the rangeof 40% to 50% at maximum, taking into consideration also the real LTV, etc., as a principle.
(b) Diversify repayment deadlines, targeting 30.0 billion yen as the maximum amount of interest-bearing
liabilities that shall become due during any single fiscal period as a principle.
(c) Aim to have long-term loans account for at least 70% of total loans as a principle.
(d) Achieve diversification of lenders, which shall mainly be Japanese financial institutions.
(e) Pursuant to its fund management rules, maintain stability in its financial standing by managing
necessary funds, such as the amount equivalent to distributions paid, separately from working capital.
(D) Schedule of Capital Expenditures
The following are the principal capital expenditures arising from renovation construction work, etc.
currently planned for existing portfolio properties. Please note that the expected construction amountincludes portions that are expensed as a separate account item of accounting costs.
Expected construction amount(Millions of yen)
Name of real estate
properties(Location)

PurposeScheduled
implementation
periodTotalamountAmountpaid
duringcurrent
periodTotalamountalreadypaid

Daiwa Akasaka(Minato-ku, Tokyo

Upgrading of air-conditioning
system

From: Nov. 2016
To: Jun. 2018

1,091

–

–

Ogikubo TM Building(Suginami-ku, Tokyo)

Upgrading of air-conditioning
equipment

From: Feb. 2017
To: May 2017

88

–

–

Shinjuku Maynds Tower Changing lighting in exclusive(Shibuya-ku, Tokyo)
areas to LED (green leasing)From: Dec. 2016
To: May 2017

60

–

–

Daiwa Akasaka(Minato-ku, Tokyo)

Upgrading of mechanical parking From: Oct. 2016
facility
To: May 2017

55

–

–

Daiwa Shibadaimon(Minato-ku, Tokyo)

Upgrading of individual airconditioning equipment

54

–

–

From: Feb. 2017
To: May 2017

II. Asset Management Report21III. Balance Sheets
As of May 31, 2016 and November 30, 2016

(Thousands of yen)

As of
May 31, 2016

As ofNovember 30, 2016

AssetsCurrent Assets:
Cash and cash equivalents (Notes 3 and 4)

23,038,218

20,667,865

174,843

145,235－

55,305427,960

369,096307

12

Other current assets

188,383

16,773

Total Current Assets

23,829,711

21,254,286

Land

12,302,227

12,302,227

Buildings and structures

3,146,315

3,219,522

Tools, furniture and fixtures

18,95819,126

Construction in progress

3,449

2,661

Land in trust accounts

351,272,600

359,306,652

Buildings and structures in trust accounts

102,387,897

104,787,007

Machinery and equipment in trust accounts

756,802886,637

Tools, furniture and fixtures in trust accounts

187,063

228,556

Construction in progress in trust accounts

42,086399,430

Other tangible fixed assets in trust accounts

4,337

4,337

(21,675,860)(23,137,885)

2,407,102

2,398,276

306,884

306,884

451,159,860

460,723,430

596

542

113,685

113,684

Long-term prepaid expenses

1,189,162

1,074,159

Deferred tax assets (Note 13)355,230

165,910－80,483

Deferred investment corporation bond issuance costs

29,43626,482Others12,353

11,9441,700,462

1,473,204

476,690,033

483,450,920

Tenant receivables
Consumption taxes receivable
Prepaid expenses
Deferred tax assets (Note 13)

Investment Properties, at cost (Notes 5 and 6):

Less: accumulated depreciation
Leasehold rights
Leasehold rights in trust accounts
Total Investment Properties, net
Other Assets:
TrademarkLease and guarantee deposits in trust

Derivative assets (Note 4)

Total Other Assets
Total Assets
The accompanying notes are an integral part of these financial statements.

22

(Thousands of yen)

As of
May 31, 2016

As ofNovember 30, 2016

Liabilities
Current Liabilities:
Accounts payable

988,221

1,996,737－

1,000,000

21,200,000

28,250,000

494,490456,273

970

831

Accrued consumption taxes

534,191

89,141

Rent received in advance

2,051,728

2,028,281

Other current liabilities

365,653

264,660

Total Current Liabilities

25,635,253

34,085,923

5,100,000

5,100,000

Long-term debt (Notes 4 and 9)

180,000,000

169,950,000

Tenant security deposits including trust accounts (Note 4)

16,870,266

16,952,100

Derivative liabilities (Note 4)

1,364,329

845,574

Total Long-Term Liabilities

203,334,595

192,847,674

228,969,848

226,933,597

243,403,874

251,551,759－

164,163

5,250,226

5,324,776

248,654,100

257,040,698

Deferred gains or losses on hedges(933,915)(523,375)

Total valuation and translation adjustments(933,915)(523,375)

Total Net Assets

247,720,185

256,517,323

Total Liabilities and Net Assets

476,690,033

483,450,920

Short-term debt (Notes 4 and 9)
Long-term debt due within one year (Notes 4 and 9)
Accounts payable – other
Income taxes payable

Long-Term Liabilities:
Investment corporation bonds (Notes 4 and 9)

Total Liabilities

Net Assets (Notes 8 and 14)
Unitholders’ Equity:
Unitholders’ capital
Units authorized: 2,000,000 units
Units issued and outstanding: 484,000 units as of May 31,
2016 and 497,869 units as of November 30, 2016,
respectively
Reserve for reduction entry
Retained earnings
Total Unitholders’ Equity
Valuation and translation adjustments

The accompanying notes are an integral part of these financial statements.
III. Balance Sheets

23

IV. Statements of Income and Retained Earnings
For the fiscal periods ended May 31, 2016 and November 30, 2016

(Thousands of yen)

For the fiscal periods
ended May 31, 2016
Operating Revenues:
Rental revenues (Note 7)
Other revenues related to property leasing (Note 7)
Gain on sale of investment properties (Note 11)
Total Operating Revenues
Operating Expenses:
Property-related expenses (Note 7)
Asset management fees
Asset custody fees
Administrative service fees
Trust fees
Directors’ compensation
Other operating expenses
Total Operating Expenses
Operating Income
Non-Operating Revenues:
Interest income
Reversal of distribution payable
Other non-operating revenues
Total Non-Operating Revenues
Non-Operating Expenses:
Interest expense
Interest expense on investment corporation bonds
Borrowing expenses
New investment units issuance costs
Other non-operating expenses
Total Non-Operating Expenses

For the fiscal periods
ended November 30, 2016

11,947,802
91,981
323,700

12,687,269
63,616102,139

12,363,483

12,853,024

5,014,202
994,954
23,18373,682

5,433,014
1,043,441
24,15982,492

19,7205,400
123,887

18,936
6,300
101,197

6,255,028
6,108,455

6,709,539
6,143,485

132
689
4,902

45
624
10,357

5,723

11,026597,307
16,892
166,855

603,225
16,708173,072
31,339
4,738

－
6,154
787,208

829,082

Ordinary Income
Income Before Income Taxes
Income taxes – current
Income taxes – deferred

5,326,970
5,326,970

5,325,429
5,325,429

978
75,798837
6Total Income Taxes (Note 13)
Net Income
Retained Earnings Brought Forward

76,776
5,250,19432
5,250,226

843
5,324,586
190
5,324,776

Retained Earnings at End of Period

The accompanying notes are an integral part of these financial statements.

24

IV. Statements of Income and Retained Earnings

V. Statements of Changes in Net Assets
For the fiscal periods ended May 31, 2016 and November 30, 2016
Number of
Units(Units)Balance as ofNovember 30, 2015
Cash distributions
declared
Net income
Net changes of
items other thanunitholders’ equity
Balance as of
May 31, 2016
Issuance of new
investment units
Provision of reserve
for reduction entry
Cash distributions
declared
Net income(Thousands of yen)

Unitholders’ Equity
Reserve forUnitholders’
Retained
Reduction
CapitalEarnings
Entry

Deferred Gains
or Losses on
HedgesTotal Net
Assets484,000

243,403,874－

4,689,024(392,515)

247,700,383

－

－

－

(4,688,992)－(4,688,992)

－

－

－

5,250,194－

5,250,194

－

－

－

－

(541,400)(541,400)

484,000

243,403,874－

5,250,226(933,915)

247,720,185

13,8698,147,885－－－

8,147,885－－

164,163(164,163)

－

－

－

－

－

(5,085,873)－(5,085,873)

－

－

－

5,324,586－

5,324,586

410,540

410,540(523,375)

256,517,323

Net changes of
items other than－－－－unitholders’ equity
Balance as of
497,869 251,551,759
164,1635,324,776
November 30, 2016
The accompanying notes are an integral part of these financial statements.

V. Statements of Changes in Net Assets

25VI. Statements of Cash Flows
For the fiscal periods ended May 31, 2016 and November 30, 2016

(Thousands of yen)

For the fiscal periods
ended
May 31, 2016

For the fiscal periods
ended
November 30, 2016

Income before income taxes

5,326,970

5,325,429

Depreciation and amortization

1,726,590

1,750,179

Amortization of bond issuance costs

2,954

2,954

New investment units issuance costs－

31,339Interest expense

614,199

619,933

Decrease in tenant receivables

63,99329,608(Decrease) increase in accounts payable(93,048)382,297

Increase (decrease) in rent received in advance

110,704(23,447)

Decrease in investment properties due to sale

9,127,507

3,795,174

Interest payments(614,107)(620,025)

Decrease (increase) in consumption taxes receivable

515,291(55,305)

Other, net

582,002(81,115)

17,363,055

11,157,021(22,669,418)(14,558,212)－(82,008)

Proceeds from tenant security deposits

882,544

1,152,741

Refunds of tenant security deposits(549,537)(1,070,907)

Net Cash Used in Investing Activities(22,336,411)(14,558,386)

Proceeds from short-term debt－

8,000,000

Repayments of short-term debt

(5,500,000)(7,000,000)

Proceeds from long-term debt

21,700,000

1,500,000

Repayments of long-term debt

(2,200,000)(4,500,000)－

8,116,546(4,688,696)(5,085,534)

Net Cash Provided by Financing Activities

9,311,304

1,031,012

Net Change in Cash and Cash Equivalents

4,337,948(2,370,353)

Cash and Cash Equivalents at Beginning of Period

18,700,270

23,038,218

Cash and Cash Equivalents at End of Period (Note 3)

23,038,218

20,667,865

Cash Flows from Operating Activities:

Net Cash Provided by Operating Activities
Cash Flows from Investing Activities:
Payments for purchases of investment properties
Payments for purchases of intangible assets

Cash Flows from Financing Activities:

Proceeds from issuance of new investment units
Distributions paid

The accompanying notes are an integral part of these financial statements.

26

VI. Statements of Cash Flows

VII. Notes to Financial Statements
For the fiscal periods ended May 31, 2016 and November 30, 2016

Note 1 – Organization and Basis of Presentation
Organization
Daiwa Office Investment Corporation (the former DA Office Investment Corporation; hereinafter referred to as“DOI”) was established on July 11, 2005 as an investment corporation under the Act on Investment Trusts andInvestment Corporations (Act No. 198 of 1951, including subsequent revisions, hereinafter referred to as the“Investment Trust Act”) by the founder (the former daVinci Select; now, Daiwa Real Estate Asset Management(hereinafter referred to as the “Asset Manager”)).
DOI is an externally managed real estate fund, established as an investment corporation. The Asset Manager,
as DOI’s asset management company, is engaged in acquiring, managing, leasing, and renovating officeproperties. Daiwa Securities Group Inc. currently owns 100% of the shares of the Asset Manager.
On October 18, 2005, DOI had raised approximately 49,498,710 thousand yen through an initial public offeringof units. Those units were listed on the J-REIT section of the Tokyo Stock Exchange.
As of November 30, 2016, DOI had ownership or trust beneficiary interests in 53 office properties withapproximately 336,722m2 of rentable office space and had leased office space to 558 tenants engaged in avariety of businesses. The occupancy rate for the office properties was approximately 97.7%.
Basis of Presentation
The accompanying financial statements have been prepared in accordance with the provisions set forth in theInvestment Trust Act, the Financial Instruments and Exchange Act and their related accounting regulations, andin conformity with accounting principles generally accepted in Japan (“Japanese GAAP”), which are different incertain respects as to application and disclosure requirements of International Financial Reporting Standards or
accounting principles generally accepted in the United States of America.
The accompanying financial statements have been reformatted and translated into English from the financial
statements of DOI prepared in accordance with Japanese GAAP and filed with the appropriate Local Finance
Bureau of the Ministry of Finance as required by the Financial Instruments and Exchange Act. In preparing theaccompanying financial statements, relevant notes have been expanded and certain reclassifications have been
made from the Japanese GAAP financial statements. Certain supplementary information included in the statutory
Japanese GAAP financial statements, but not required for fair presentation, is not presented in theaccompanying financial statements.
DOI maintains its accounting records in Japanese yen.
DOI’s fiscal period is a six-month period ending at the end of May and November of each year.

VII. Notes to Financial Statements

27

Note 2 – Summary of Significant Accounting Policies(a) Cash and Cash Equivalents
Cash and cash equivalents consist of cash, demand deposits, and short-term investments which are highly
liquid, readily convertible to cash and with insignificant risk of market value fluctuation, with maturities of threemonths or less from the date of acquisition.
(b) Investment Properties
Investment properties are recorded at cost, which includes the allocated purchase price, related costs andexpenses for acquisition of the office properties and the trust beneficiary interests in trust. Investment property
balances are depreciated using the straight-line method over the estimated useful lives as follows:
As of May 31, 2016
As of November 30, 2016
Buildings and structures
2-64 years
2-64 years
Machinery and equipment
4-23 years
7-23 years
Tools, furniture and fixtures
5-18 years
5-15 years
Cost related to the renovation, construction improvement of properties is capitalized. Expenditures for repairs andmaintenance which do not add to the value or prolong the useful life of property, are expensed as incurred.
(c) Deferred Investment Corporation Bond Issuance Costs
Deferred investment corporation bond issuance costs are amortized on a straight-line basis over the respective
terms of the bonds.
(d) New Investment Units Issuance Costs
The issuance costs of new investment units are expensed when incurred.
(e) Income Taxes
Deferred tax assets and liabilities are computed based on the difference between the financial statements andincome tax bases of assets and liabilities using the statutory rate.
(f) Real Estate Taxes
Investment properties are subject to various taxes, such as property taxes and city planning taxes. Owners of theproperties are registered by records maintained in each jurisdiction by the local government. The taxes are imposedon the registered record owner as of January 1 of each year, based on an assessment made by the local government.
When a property is purchased within the calendar year, the taxes for corresponding calendar year are imposed on
the seller. DOI pays the seller the corresponding amount of the taxes for the period from property acquisition date to
December 31 of the calendar year and capitalizes these amounts as acquisition costs of the property, rather than
expensing them. In subsequent calendar years, such taxes on investment properties are charged as operating
expenses in each fiscal period.
The following is a summary of capitalized real estate taxes.

(Thousands of yen)

Capitalized real estate taxes

For the fiscal periods ended
May 31, 2016
53,870For the fiscal periods ended
November 30, 2016
39,921(g) Consumption Taxes
Consumption taxes are excluded from transaction amounts. Generally, consumption taxes paid are offset against thebalance of consumption taxes withheld. As such, the excess of payments over amounts withheld is included in thecurrent assets while the excess of amounts withheld over payments is included in the current liabilities. Non-deductible
consumption taxes relating to investment properties are amortized equally over five years.
(h) Hedge Accounting
DOI enters into derivative transactions for the purpose of hedging risks in the Articles of Incorporation of DOI in
accordance with its general risk management policy. DOI uses interest-rate swaps as hedging instruments in order tohedge the risk of interest rate fluctuations related to borrowings. Pursuant to Japanese GAAP, DOI applies the special
accounting treatment to interest-rate swaps which qualify for hedge accounting and meet specific criteria. Under the
special accounting treatment, the related differentials paid or received under such swap contracts can be recognized
and included in interest expense or income of the hedged assets or liabilities, and the interest-rate swaps are notrequired to be measured at fair value separately. The assessment of hedge effectiveness has been made each fiscal
period except for interest-rate swaps which meet the special criteria.

28

(i) Revenue Recognition
Operating revenues consist of rental revenues including base rents and common area charges, and other operating
revenues such as utility charge reimbursements, parking space rental revenues and other income. Rental revenues
are generally recognized on an accrual basis over the life of each lease. Utility charge reimbursements are recognizedwhen earned and their amounts can be reasonably estimated.
(j) Accounting Treatment of Trust Beneficiary Interests in Real Estate
For trust beneficiary interests in real estate, all assets and liabilities with respect to assets in trust, as well as all
income generated and expenses incurred with respect to assets in trust, are recorded in the relevant balance sheet
and income statement accounts of the accompanying financial statements.

Note 3 – Cash and Cash Equivalents
Cash and cash equivalents stated on the accompanying balance sheets and statements of cash flows as of
May 31, 2016 and November 30, 2016 consisted of the following:(Thousands of yen)

Cash and deposits
Cash and deposits in trust
Cash and cash equivalents

As of May 31, 2016
20,940,425
2,097,793
23,038,218

As of November 30, 2016
19,070,683
1,597,182
20,667,865

Note 4 – Financial Instruments(a) Qualitative Information for Financial Instruments
Policy for Financial Instrument Transactions
DOI raises funds through borrowings, issuance of investment corporation bonds and issuance of investment units
for acquisition and renovation of investment properties, cash distributions of dividends and repayment of bankborrowings. In financing through interest-bearing debt, DOI raises funds with longer term, fixed-rate and welldiversified maturities to secure stable financing capacity and avoid potential risk of rising interest rates.
Surplus funds are managed considering risk and liquidity, by investing in highly liquid monetary assets and securities(in principle, deposits).
DOI enters into derivative transactions only for the purpose of hedging interest rate risks arising from liabilities.
Nature and Extent of Risks arising from Financial Instruments and Risk Management
Proceeds from borrowings and investment corporation bonds are used mainly to acquire investment properties andrepay or redeem outstanding borrowings and bonds. These borrowings and bonds are exposed to liquidity risk. Suchrisk is managed in ways such as maintaining the LTV ratio at low levels, diversifying maturities, keeping the ratio of
long-term debt to total debt at high levels, and diversifying lenders. For the floating-rate borrowings exposed to therisk of future interest rate fluctuations, DOI uses derivative transactions (interest-rate swap) as hedging instruments, inorder to avoid interest rate fluctuations and to fix the amount of interest payments for floating-rate borrowings.
DOI evaluates the effectiveness of hedges by the correlation between the change in aggregated amount of cash
flow of the hedging instruments and the change in aggregated amount of cash flow of the hedged items. The
assessment of hedge effectiveness is omitted for the interest-rate swaps which meet the specific criteria under the
special accounting treatment.
Derivative transactions are executed and monitored in compliance with the rules and procedures set forth in the risk
management policy of DOI.
Tenant security deposits including trust accounts are exposed to liquidity risk arising from refunding deposits in theevent of vacating of properties by tenants. Such risk is managed by reserving some parts of the funds.
Bank deposits are used for investing DOI’s surplus funds. These bank deposits are exposed to credit risks such as
bankruptcy of the depository financial institutions. DOI manages credit risk by investing only in short-term deposit andsetting a minimum credit rating requirement for the depository financial institutions (excluding deposits for settlement
purposes).
Supplemental Explanation regarding Fair Value of Financial Instruments
The fair value of financial instruments is based on their quoted market price. When there is no quoted market priceavailable, fair value is reasonably estimated. Since certain assumptions and factors are reflected in estimating the fairvalue, different assumptions and factors could result in a different value. Also, the contractual amounts of derivativetransactions do not represent the market risk involved in these derivative transactions.
VII. Notes to Financial Statements

29

(b) Estimated Fair Value of Financial Instruments
Book value, fair value and difference between the two as of May 31, 2016 and November 30, 2016 were as follows:(Thousands of yen)

As of May 31, 2016

As of November 30, 2016

AssetsBook value

Fair value

DifferenceBook value

Fair value

Difference

Cash and cash
equivalents
Total

23,038,218

23,038,218–

20,667,865

20,667,865–

23,038,218

23,038,218–

20,667,865

20,667,865

–

–

–

–

1,000,000

1,000,000–

21,200,000

21,292,250

92,25028,250,000

28,320,007

70,007

5,100,000

5,221,170

121,170

5,100,000

5,184,930

84,930Long-term debt

180,000,000

180,362,802

362,802

169,950,000

170,032,843

82,843

Total

206,300,000

206,876,222

576,222204,300,000

204,537,780

237,780(1,365,242)(1,365,242)–(765,091)(765,091)–

Liabilities
Short-term debt
Long-term debt
due within one
year
Investment
corporation bonds

Derivativetransactions (*)(*) The value of assets and liabilities arising from derivatives is shown at net value and with the amount in parenthesis indicating the net liability
position.

The financial instruments whose fair value is deemed extremely difficult to determine are excluded from theabove table (See Note 2 below).
Notes:
1. Methods to estimate fair value of financial instruments and derivative transactions
Assets:(1) Cash and cash equivalents
Due to the short maturities, the book value of these assets is deemed a reasonable approximation of the fairvalue.
Liabilities:(1) Short-term debt, long-term debt due within one year and long-term debt
For short-term debt and long-term debt with floating interest rates, their fair value and book value are nearly
identical and there are no significant changes in DOI’s credit risk after borrowing. Therefore, for these items, theirbook value is assumed as their fair value. For short-term debt and long-term debt with fixed interest rates, theirfair value is calculated based on the present value of principle and interest cash flows discounted at the current
interest rate which is estimated to be applied if similar new debt is entered into. However, the fair value of certain
floating-rate long term debt that qualifies for the special treatment of interest-rate swaps is calculated based on
the present value of principle and interest cash flows which are processed as a single unit with the interest-rate
swap.
(2) Investment corporation bonds
The fair value of investment corporation bonds are based on their quoted market price.

30

Derivative Transactions:
The Company applies the hedge accounting for all derivative transactions. Contractual amount and fair value
were as follows:(Thousands of yen)Hedge
accounting method

Type ofderivativetransaction

Hedged item

As of May 31, 2016
Contracted amount
Fair value (*1)
Due after one year
Total

Deferral hedge
accounting
methodInterest-rate swap
Receive floating/
Pay fixed

Long-term debt

82,800,000

81,300,000(1,365,242)

Special treatment
for interest-rate
swapsInterest-rate swap
Receive floating/
Pay fixed

Long-term debt

28,350,000

19,850,000– (*2)

111,150,000

101,150,000(1,365,242)(Thousands of yen)Hedge
accounting method

Type ofderivativetransaction

Hedged item

As of November 30, 2016
Contracted amount
Fair value (*1)
Due after one year
Total

Deferral hedge
accounting
methodInterest-rate swap
Receive floating/
Pay fixed

Long-term debt

99,600,000

99,600,000(765,091)

Special treatment
for interest-rate
swapsInterest-rate swap
Receive floating/
Pay fixed

Long-term debt

28,350,000

14,350,000– (*2)

127,950,000

113,950,000(765,091)(*1) The fair value is provided by financial institutions.
(*2) Fair values of interest-rate swaps with the special treatment are included in fair values of related long-term debt as the interest-rate swaps areprocessed as single unit with the hedged long-term debt.

2. Financial instruments whose fair value is deemed extremely difficult to determine
Tenant security deposits including trust accounts (with a book value of 16,870,266 thousand yen as of May 31,
2016 and 16,952,100 thousand yen as of November 30, 2016) that have been deposited by tenants were
excluded from the scope of fair value disclosure because they are not marketable, and the actual deposit period
is not estimable, which in turn makes it difficult to reasonably estimate the future cash flows.

VII. Notes to Financial Statements

31

3. Redemption schedule for monetary claims(Thousands of yen)

As of May 31, 2016

Cash and cash equivalents
Total

Due after
Due after
Due after
Due after
one to two two to three three to four four to five
years
years
years
years
23,038,218––––
23,038,218––––
Due within
one year

Due after
five years––(Thousands of yen)

As of November 30, 2016

Cash and cash equivalents
Total

Due after
Due after
Due after
Due after
one to two two to three three to four four to five
years
years
years
years
20,667,865––––
20,667,865––––
Due within
one year

Due after
five years––

4. Redemption schedule for short-term debt, investment corporation bonds and long-term debt
(Thousands of yen)

As of May 31, 2016

Investment corporation bonds
Long-term debt
Total

Due within
one year

Due after
Due after
Due after
Due after
one to two two to three three to four four to five
years
years
years
years

Due after
five years––– 3,000,000– 2,100,000
21,200,000 19,400,000 21,500,000 25,000,000 33,300,000 80,800,000
21,200,000 19,400,000 21,500,000 28,000,000 33,300,000 82,900,000(Thousands of yen)

As of November 30, 2016

Short-term debt
Investment corporation bonds
Long-term debt
Total

32

Due within
one year

Due after
Due after
Due after
Due after
one to two two to three three to four four to five
years
years
years
years

Due after
five years

1,000,000
–
–
–
–
–
–
– 3,000,000–– 2,100,000
28,250,000 17,350,000 22,000,000 31,600,000 24,200,000 74,800,000
29,250,000 17,350,000 25,000,000 31,600,000 24,200,000 76,900,000Note 5 – Tangible Fixed Assets of Investment Properties
Investment properties as of May 31, 2016 and November 30, 2016 consisted of the following:
As of May 31, 2016

(Thousands of yen)

As of November 30, 2016

Acquisition
cost

Accumulated
depreciation

Book value

Acquisition
cost

Accumulated
depreciation

Book valueLand

12,302,227–

12,302,227

12,302,227–

12,302,227

Buildings andstructures

3,146,315(1,807,702)

1,338,613

3,219,522(1,895,482)

1,324,040

Tools, furnitureand fixtures

18,958(9,261)

9,697

19,126(10,007)

9,119

Construction inprogress

3,448

–

3,448

2,661

–

2,661

Land in trust
accounts

351,272,600–

351,272,600

359,306,652–

359,306,652

Buildings andstructuresin trust accounts

102,387,898(19,378,467)

83,009,430

104,787,007(20,718,843)

84,068,164

Machinery andequipmentin trust accounts

756,802(389,890)

366,912886,637(411,720)

474,917

Tools, furnitureand fixturesin trust accounts

187,063(86,203)

100,860

228,556(97,496)

131,060

Construction inprogressin trust accounts

42,086–42,086399,430–

399,430

Other tangible
fixed assets
in trust accounts

4,337(4,337)–

4,337(4,337)–

470,121,734(21,675,860)

448,445,873

481,156,155(23,137,885)

458,018,270

Total

VII. Notes to Financial Statements

33

Note 6 – Fair Value of Investment and Rental Properties
The book value, net changes in the book value and the fair value of the investment and rental properties wereas follows:(Thousands of yen)

For the fiscal periods ended
May 31, 2016

For the fiscal periods ended
November 30, 2016

Balance at beginning of period

439,123,699

451,114,325

Change during the period (Note 2)

11,990,626

9,207,014

Balance at end of period

451,114,325

460,321,339

Fair value (Note 3)

483,390,000

505,430,000

Book value: (Note 1)(Notes)1. The book value represents the acquisition cost less accumulated depreciation.
2. Significant changes
For the fiscal period ended May 31, 2016, the major reasons of increase are acquisitions of two assets (21,890,000 thousand yen).
The major reason of decrease is sale of two assets (9,127,507 thousand yen) and depreciation (1,726,073 thousand yen).
For the fiscal period ended November 30, 2016, the major reasons of increase are acquisitions of four assets (13,392,000 thousand yen). The major
reason of decrease is sale of “Daiwa Kudan Building” (3,795,174 thousand yen) and depreciation (1,749,716 thousand yen).
3. The fair values as of May 31, 2016 and November 30, 2016 were determined by the sum of appraisal values provided by external real estateappraisers.

Note 7 – Rental Revenues and Expenses
Rental revenues and expenses for the fiscal periods ended May 31, 2016 and November 30, 2016 were as
follows:(Thousands of yen)

For the fiscal periods ended
May 31, 2016

For the fiscal periods ended
November 30, 2016

11,947,802

12,687,269

91,981

63,616

12,039,783

12,750,885

868,700

942,415

Utilities expenses

1,051,127

1,068,009

Taxes and dues

895,930

1,045,891

Insurance expenses

17,25017,056

Repair expenses

403,759456,738

1,726,073

1,749,716

51,363

153,189

Total rental expenses

5,014,202

5,433,014

Income from property leasing

7,025,581

7,317,871

Revenues from property leasing:
Rental revenues
Other revenues related to property leasing
Total revenues from property leasing
Rental expenses:
Consignment expenses

Depreciation
Other

34

Note 8 – Net Assets
DOI issues non-par value units in accordance with the Investment Trust Act and all of the amounts issued aredesignated as stated capital. DOI maintains a minimum of 50 million yen of net assets as required by theInvestment Trust Act.

Note 9 – Short-Term Debt, Long-Term Debt Due Within One Year, Long-Term Debt andInvestment Corporation Bonds
Short-term debt, long-term debt due within one year, long-term debt and investment corporation bonds as of
May 31, 2016 and November 30, 2016 consisted of the following:(Thousands of yen)

As of May 31, 2016
Unsecured loans due 2017 to 2026, principallyfrom banks and insurance companies with interest
rates mainly ranging from 0.2% to 1.0%

As of November 30, 2016

201,200,000

199,200,000

0.4% unsecured bond due 2019

3,000,000

3,000,000

1.0% unsecured bond due 2024

2,100,000

2,100,000

206,300,000

204,300,000

Total(Note) The interest rates presented are daily weighted average interest rates. As for long-term debts which were hedged by interest-rate swaps for the
purpose of avoiding interest rate fluctuation risk, the swapped interest rates are used to calculate daily weighted average interest rates.

The annual maturities of short-term debt, long-term debt and investment corporation bonds as of November
30, 2016 were as follows:(Thousands of yen)

Due within
one year

Due after
Due after
Due after
Due after
one to two two to three three to four four to five
years
years
years
years

Due after
five years

Short-term debt, long-term debt
29,250,000 17,350,000 25,000,000 31,600,000 24,200,000 76,900,000
and investment corporation bonds

Note 10 – Leases
As Lessor
The future minimum rental revenues under existing non-cancelable operating leases as of May 31, 2016 andNovember 30, 2016 were as follows:(Thousands of yen)

As of May 31, 2016

As of November 30, 2016

Due within one year

10,461,097

9,765,206

Due after one year

17,018,806

16,105,193

Total

27,479,903

25,870,399

VII. Notes to Financial Statements

35

Note 11 – Gain on Sale of Investment Properties
Gain on sale of investment properties for the fiscal period ended May 31, 2016 was as follows:(Thousands of yen)

For the fiscal period
ended May 31, 2016
Daiwa Shibuya Dogenzaka Building:
Proceeds from sale of investment property

6,400,000

Cost of selling investment property(4,474,587)

Other expenses related to sale(225,505)

Gain on sale of investment property

1,699,908

Daiwa Minami-Senba Building:
Proceeds from sale of investment property

3,335,062

Cost of selling investment property(4,652,920)

Other expenses related to sale
Loss on sale of investment property(58,350)(1,376,208)

Gain on sale of investment properties for the fiscal period ended November 30, 2016 was as follows:(Thousands of yen)

For the fiscal period
ended November 30, 2016
Daiwa Kudan Building:
Proceeds from sale of investment property

4,048,485

Cost of selling investment property(3,795,174)

Other expenses related to sale(151,172)

Gain on sale of investment property

102,139

Note 12 – Reduction of Investment Properties Purchased with Government Subsidies
Government subsidies of 32,898 thousand yen were deducted from the acquisition cost of the buildings intrust as of May 31, 2016 and November 30, 2016.

36

Note 13 – Income Taxes
DOI is subject to Japanese corporate income taxes on all of its taxable income. However, DOI may deduct theamount distributed to its unitholders from its taxable income when certain requirements, including a requirement
to distribute in excess of 90% of distributable profit for the fiscal period, are met under the Special Taxation
Measure Act of Japan. If DOI does not satisfy all of the requirements as specified in the Act, the entire taxable
income of DOI will be subject to regular corporate income taxes in Japan.
DOI has made distribution in excess of 90% of its distributable profit for each fiscal period in order to be able
to deduct such amount from taxable income.
The following table summarizes the significant difference between the statutory tax rate and DOI’s effective tax
rate for financial statement purposes.
(%)

For the fiscal periods ended
May 31, 2016

For the fiscal periods ended
November 30, 2016

Statutory tax rate

32.31%

31.74%

Deductible cash distributions(30.85)(31.74)

Others(0.02)

0.02

Effective tax rate

1.44%

0.02%

The significant components of deferred tax assets and liabilities as of May 31, 2016 and November 30, 2016
were as follows:(Thousands of yen)

As of May 31, 2016

As of November 30, 2016

Deferred tax assets:
Accrued enterprise tax

17

12

431,326

267,141

431,343

267,153

Reserve for reduction entry

75,80675,806

Deferred gains on hedges–

25,425

Total deferred tax liabilities

75,806

101,231

Net deferred tax assets

355,537

165,922

Deferred losses on hedges
Total deferred tax assets
Deferred tax liabilities:

VII. Notes to Financial Statements

37

Note 14 – Per Unit Information
Information about earnings per unit for the fiscal periods ended May 31, 2016 and November 30, 2016 and net
assets per unit as of May 31, 2016 and November 30, 2016 were as follows:(Yen)

For the fiscal periods ended
May 31, 2016

For the fiscal periods ended
November 30, 2016

10,847.51

10,800.73

484,000

492,984

Earnings per Unit:
Net income per unit
Weighted average number of units outstanding (units)(Yen)

As of May 31, 2016
Net Assets per Unit

511,819

As of November 30, 2016
515,231

The computation of earnings per unit is based on the weighted average number of units outstanding during theperiod. The computation of net assets per unit is based on the number of units outstanding at each period end
as stated on the balance sheets.
The diluted net income per unit is not stated as there are no diluted investment units.
There is no amount that is not available to ordinary unitholders.

Note 15 – Distribution Information
DOI’s Articles of Incorporation stipulate that DOI is required to make cash distribution in excess of 90% of
distributable profit as defined in the Special Taxation Measure Act of Japan for each fiscal period. Therefore, thetotal amount of dividends that DOI has determined to pay out is 5,085,872,000 yen for the fiscal period ended
May 31, 2016 and 5,324,708,955 yen for the fiscal period ended November 30, 2016 that are the largest integral
multiple of 484,000 and 497,869, the number of units outstanding as of May 31, 2016 and November 30, 2016,
respectively, after deducting provision of reserve for reduction entry as stipulated in Article 66-2 of the Special
Taxation Measure Act of Japan. Furthermore, DOI does not pay out dividends that exceed accounting profits asoutlined in Article 32-2 of DOI’s Articles of Incorporation.
(Yen)

For the fiscal periods ended
May 31, 2016

For the fiscal periods ended
November 30, 2016

Ⅰ Unappropriated retained earnings

5,250,225,912

5,324,776,691

Ⅱ Cash distributions declared

5,085,872,000

5,324,708,955

164,162,797–

191,115

67,736

Ⅲ Voluntary Retained Earnings
Provision of reserve for reduction entry
Ⅳ Retained earnings brought forward

38

Cash distributions are declared by the board of directors after the end of each period. Such distributions arepayable to unitholders of record at the end of each period. Information of cash distributions per unit and theboard of directors meeting dates when the distributions were proposed and approved were as follows:(Yen)

For the fiscal periods ended
May 31, 2016

For the fiscal periods ended
November 30, 2016

10,508

10,695

July 15, 2016

January 20, 2017

Cash distributions per unit
Board of directors meeting dates

Note 16 – Related-Party Transactions
Not applicable.

Note 17 – Segment Information
For the fiscal periods ended May 31, 2016 and November 30, 2016
Segment Information
Segment information has been omitted as DOI has only one segment, which is property leasing business.
Related Information
Information about Products and Services
Disclosure of this information has been omitted as operating revenues to external customers for a single
product/service category account for more than 90% of the operating revenues on the statements of income
and retained earnings.
Information about Geographic Areas(1) Operating revenues
Disclosure of this information has been omitted as domestic operating revenues account for more than 90% of
total operating revenues.
(2) Investment properties
Disclosure of this information has been omitted as domestic investment properties account for more than 90%of the book value of the total investment properties.
Information about Major Tenants
Disclosure of this information has been omitted as there is no tenant that accounts for 10% or more of theoperating revenues recorded in the statements of income and retained earnings.

VII. Notes to Financial Statements

39

Note 18 – Significant Subsequent Events
Acquisition of Asset
DOI acquired the trust beneficial interest in real estate on December 21, 2016 as described below.
Overview of the asset

40

Asset type

Trust beneficial interest in domestic real estate

Property nameShin Kanda Mikuracho Building

Location

5-1 Kanda Mikura-cho, Chiyoda-ku, Tokyo

Acquisition price

1,592,000 thousand yen (excluding acquisition-related costs, consumption taxes, etc.)

Agreement date

December 15, 2016

Acquisition date

December 21, 2016

SellerOH Real Estate Management Co., Ltd.

VIII. Independent Auditor’s Report

VIII. Independent Auditor’s Report41

IX. Investor Information
History of Investment Unit Price
18,000 (units)(yen) 900,000
Investment unit price (left axis)

800,000

Trading volume (right axis)

16,000700,000

14,000600,000

12,000500,000

10,000400,000

8,000

300,000

6,000

200,000

4,000

100,000

2,000

0

0

2014 2015
Dec. Jan.

Feb.

Mar.

Apr.

May

June

July

Aug. Sept. Oct.

Nov.

2016
Dec. Jan.

Feb.

Mar.

Apr.

May

June

July

Aug. Sept. Oct.

Nov.

Overview of Investment Units and Unitholders (as of November 30, 2016)■ No. of Investment Units by Investor Type
22nd
Fiscal Period

Individuals/others
22,035 units (4.4%)

Financial institutions
218,952 units (44.0%)■ No. of Unitholders
by Investor Type
Foreigners 61,792 units (12.4%)

Total: 497,896 units
Other domestic corporations 191,428 units (38.4%)

21stFiscal Period

Individuals/others
20,292 units (4.2%)

Financial institutions
212,202 units (43.8%)

Securities firms 3,662 units (0.7%)

Foreigners 53,390 units (11.0%)

Total: 484,000 units
Other domestic corporations 191,340 units (39.5%)

Name of Investor

1. Daiwa Investment Management Inc.

128,905 25.89%

2. Japan Trustee Services Bank, Ltd. (Trust Account)

70,700 14.20%

3. Daiwa Securities Group Inc.

59,321 11.91%

5. The Master Trust Bank of Japan, Ltd. (Trust Account)
6.

The Nomura Trust and Banking Co., Ltd.
(Investment Trust Account)101(1.1%)

Other domestic
corporations

163(1.8%)

Foreigners

216(2.4%)

Securities firms

15(0.2%)

Total

9,186

52,849 10.62%
51,052 10.25%

January 20, 2017 : Announcement of financial results
22nd Fiscal Period
February 14, 2017 : Sending of Japanese version Business
Report for 22nd Fiscal Period(Statement of Financial Performance)
February 15, 2017 : Start paying distributions for22nd Fiscal PeriodNov.
End offiscal period

Aug.
July

Jan.

17,676

3.55%

End offiscal period

7. STATE STREET BANK AND TRUST COMPANY 505012

5,786

1.16%

May

8. CBLDN STICHTING PENSIOEN FONDS METAAL EN TECHNIEK

4,295

0.86%

BNP PARIBAS SECURITIES SERVICESSYDNEY/JASDEC/AUSTRALIAN RESIDENTS

4,217

0.85%

STATE STREET BANK - WEST PENSION
10.
FUND CLIENTS - EXEMPT 505233

3,643

9.

0.73%

(Note) The percentage share figures are rounded to the second decimal place

42

Financial institutions

IR Calendar
Number ofPercentage
Units Owned
Share(units)Trust & Custody Services Bank, Ltd.
(Securities Investment Trust Account)

8,691(94.6%)

Securities firms 6,776 units (1.4%)

Top Ten Unitholders (as of November 30, 2016)4.

Individuals/others

Feb.

July 2017: Announcement of financial results for23rd Fiscal Period
August 2017 : Sending of Japanese version Business
Report for 23rd Fiscal Period(Statement of Financial Performance)
August 2017 : Start paying distributions for23rd Fiscal Period

Investor Memo
End of fiscal period

May 31 and November 30 of each year

General Meeting of Unitholders

Held at least once every two years

Date for finalizing Unitholders with voting rights
for the General Meeting of Unitholders

Date publicly announced beforehand

Reference date for finalizing payment of
distributions

May 31 and November 30 of each year
(distributions are paid within three months of this reference date)

Listed financial instruments exchangeTokyo Stock Exchange (securities code: 8976)

Newspaper in which notice is posted

Nikkei Inc.

Manager of Unitholder Registry, etc.

Sumitomo Mitsui Trust Bank, Limited, 1-4-1 Marunouchi, Chiyoda-ku, Tokyo 100-8233

Office handling administrative affairs

Transfer Agency Department of Sumitomo Mitsui Trust Bank, Limited, 2-8-4 Izumi, Suginami-ku, Tokyo
168-0063 Phone 0120-782-031 (toll-free in Japan)

Service counter

Head Office and All branches of the Sumitomo Mitsui Trust Bank nationwide

Provision of Information via Website
Daiwa Office Investment Corporation conducts information distribution via its website as an important tool for IR activities. DOI also provides an
e-mail delivery service, “IR mail Delivery Service,” which informs the subscribers of updates in website content such as press releaseannouncements via e-mail free of charge. The website will be continually enhanced and enriched so that the current situation and future
strategies of DOI are clearly communicated.

Daiwa Office Investment Corporation

http://www.daiwa-office.co.jp/en/

Important information is
distributed via e-mail. Please
access and follow the simple
steps if you wish to receive
our IR mail Delivery Service.

IX. Investor Information

43

The Daiwa Office Investment Corporation logo symbolizes hospitality with an open door and the desire to be a brightand open investment corporation. We will continue to aim to be a highly-transparent investment corporation that isfurther cherished and trusted by our investors and tenants.