Semi-Annual
Report4-15-1, Akasaka, Minato-ku, Tokyo
http://sekisuihouse-reit.co.jp/en/

10
10

第
th期
資産運用報告FiscalPeriod2019年5月1日～2019年10月31日(From May 1, 2019 to 31 October, 2019)

Picture on the cover

Akasaka Garden City
Akasaka Garden City is a high-quality office building completed in 2006 and located in thecommercial district in the vicinity of Akasaka Goyochi, along the street near Aoyama Street.
It has excellent location condition with high accessibility of seven subway lines of Tokyo
Metro at “Akasaka-mitsuke” Station, “Nagatacho” Station, “Aoyama-itchome” Station and“Akasaka” Station. It has the façade that takes advantage of the natural color of gemstonematerials and dividable regularshaped spaces without pillars which allows a high multiplicity
of uses. In addition, with the ceiling height of 2,800mm, the space is open and bright. The
property is also equipped indoor energy efficient facilities. Moreover, in case of a disaster, an
accumulator battery is installed for the emergency light in common space to maintain theminimum necessary operation of the building and the property gives consideration to thebusiness continuity plans (BCPs) of tenant companies.

Performance Highlights

Message to Our Unitholders

Distribution per Unit

I would like to express our sincere gratitude for yourcontinued and loyal patronage.
I hereby report on the management status and financial results for the 10th fiscal period ended October 2019 of Sekisui House Reit, Inc. (“SHR”).

1,631 yen

Distribution per Unit (Actual)
10th Fiscal Period Ended October 2019

Business Results and Distribution
9th FP
ended Apr. 2019
(Actual)10th FP
ended Oct. 2019
(Actual)11th FP
ending Apr. 2020
(Forecast) 1

12th FP
ending Oct. 2020
(Forecast)1

Operating revenue(million yen)

12,36914,683

14,526

14,765

Operating income(million yen)

6,627

8,226

7,694

7,718

Ordinary income(million yen)

5,894

7,406

6,804

6,832

Net income(million yen)

5,894

7,405

6,803

6,831

Distribution per unit
(yen)

1,594

1,631

1,623

1,630

Fiscal Period(Note 1) The respective figures for “11th FP ending Apr. 2020 (Forecast)” and “12th FP ending Oct. 2020 (Forecast)” are as of December 13, 2019 (the announcement date of business results) calculated based upon certain assumptions. Actual operating revenue, operating income, ordinary income, net income and distribution per unit may differ materially due to various factors. The
above forecasts are not intended to be guarantees of business results or the actual amount of distribution.

Operating Revenue / Net Income(million yen)

Operating revenue

16,00014,68314,00012,00014,526

Distribution per Unit
Net income

(yen)

2,000

14,765
1,594

12,369

1,631

1,623

1,630

1,500

In the fiscal period under review, SHR acquired 7
properties, including 3 office buildings and 4 residences, through the first global offering as SHR in
June 2019 (a public offering for both domestic andinternational markets), and conducted acquisitionand disposition for each 1 residence as an asset replacement in September.
In the global offering, SHR newly acquired Akasaka
Garden City (Tokyo), which is located in highly-concentrated business district in the center of Tokyo,
and also additionally acquired 2 properties in Garden City Shinagawa Gotenyama (Tokyo) and Hommachi Minami Garden City (Osaka). In addition, SHR
acquired 3 residences located in Tokyo; Prime Maison Mitatsunamachi, Prime Maison Hongo, andPrime Maison Kuramae, as well as Esty Maison Yokohama-aobadai North located in Kanagawa Prefecture, which is also residence. Moreover, with regard
to the replacement of assets, Esty Maison Yokohama
was disposed and Esty Maison Yokohama-aobadai
South was acquired.
All of these properties are acquired by utilizing thepipeline support of Sekisui House, which is a sponsor of SHR. As a result, SHR owns 119 properties(111 residential properties and 8 commercial properties) and its asset size is 527.0 billion yen (246.5 billion yen for residential properties and 280.5 billion
yen for commercial properties).
As for the occupancy rate as of the end of the 10th
fiscal period ended October 2019, as rents at thetime of new contracts continued to rise, mainly inGreater Tokyo, the residential properties at 97.5%,
the commercial properties at 99.9%, and theportfolio as a whole at 98.1% and continued tomaintain high levels.
As a result of the above, management performancefor the fiscal period under review resulted in operating revenue of 14,683 million yen, operating incomeof 8,226 million yen, ordinary income of 7,406 million yen and net income of 7,405 million yen, andthe distribution per unit declared for the fiscal period was 1,631 yen.
Recently, there has been an increasing trend towardemphasizing the three elements of environmental,social and governance (ESG) in order for stakeholders to measure corporate sustainability globally.
Sekisui House, which is the sponsor of SHR, is aiming to become a leading company in ESG management. In order to achieve sustainable growth andmaximize unitholder value, SHR will also further
promote real estate investment management with afocus on ESG. In the fiscal period under review, SHR
obtained Green Star granted to participants highly
evaluated at GRESB Real Estate Assessment in threeconsecutive years, and was able to retain the trackrecord of being selected as “Sector Leader” in the
Asia/Diversified – Office/Residential Sector.
I ask for the continued support and encouragementof unitholders.

Junichi Inoue
Executive Director of Sekisui House Reit, Inc.
President & Representative Director of
Sekisui House Asset Management, Ltd.

10,000
8,000
6,000

7,405

Contents

1,000
6,803

6,831

5,894

500

4,000
2,000

Overview of SHR ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙2Statement of Cash Distributions ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙49

Financial Section (Audited)∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙43Statement of Cash Flows ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙50

Financial Statements ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙44

Notes to Financial Statements ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙51

Balance Sheet ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙44Supplementary Schedules ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙66

9th FP
ended Apr. 2019

10th FP
ended Oct. 201911th FP
ending Apr. 2020

12th FP
ending Oct. 2020

9th FP
ended Apr. 2019

10th FP
ended Oct. 201911th FP
ending Apr. 2020

12th FP
ending Oct. 2020

Statement of Income and Retained Earnings ∙ ∙ ∙46

Independent Auditor’s Report ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙76

ActualActualForecast

Forecast

ActualActualForecast

Forecast

Statement of Changes in Net Assets ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙47Unitholder Information ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙ ∙

78

0

0

1

Overview of SHR

Key Indicators

As of December 13, 2019 (the announcement date of business results)

Overview of Portfolio

Investment Policy
Investment Strategies

保有物件数
Numberof owned properties

取得価格合計
Total
acquisition price

鑑定評価額合計
Total
appraisal value(as of 10th FP ended
Oct.末現在）
2019)（2019年10月期（第10期）

119
properties
527.0
billion億円
yen 593.0
billion億円
yen
119
物件
5,270
5,930
Occupancy rate

Ratio of Prime Properties(As of the end of Nov. 2019)
稼働率（2019年11月末日現在）

プライム・プロパティ比率

98.1 %
98.1 %

1.60 %
1.60 %

Nagoya area
4.4%
(10 properties)

Strategic location

Asset category

Sites suited for “bases forsustainable living” for residents

As residences, provide high-class fundamental functionality, suchas comfort and safety, and give due consideration to the environment as a societal request to make comprehensive determinations
regarding buildings suited to neighborhoods and the like.

Commercial Properties

Sites suited for “sustainable bases ofoperation” of tenant companies

In addition to the functionality sought by tenant companies, giveconsideration to the environment as a societal request and establish
specifications suitable for BCP sites to make comprehensive determinations regarding buildings suited to neighborhoods and the like.

Building age ratio1
Others4.4%(14 properties)

15 years or more
6.6%
(14 properties)

Under 5 years
7.3%(12 properties)

High quality

Residential Properties（2019年10月調査時点）

Area ratio1, 2

Hotel
6.6%
(2 properties)(surveyed in Oct. 2019)

ポートフォリオPML値

91.5 %
91.5 %

Usage type ratio1

Portfolio PML value

Prime Properties centered on “Strategic Location” and “High Quality”
Designate “high quality“ residential properties and commercial properties located in “strategic location“ as “Prime Properties“,and continue to invest primarily in Prime Properties with the aim of enhancing the quality of the portfolio

Portfolio Development Policy
Investment Ratio by Usage Type
Build a portfolio with “residences” as “the sustainable bases of living for residents” and “office buildings” as “the sustainable basesof operation for business,” as core assets, while promoting investments in hotels that are expected to achieve continuous growth.

Asset size

527.0 billion yen
Office building
46.6%(7 properties)

Osaka area
26.2%
(13 properties)
Residence
46.8%(111 properties)

Three Major
Metropolitan Areas

95.6%

10 years ormore but lessthan 15 years
31.2%(71 properties)

Averagebuilding age

Assetcategory

10.1 years

Greater Tokyo
65.0%(82 properties)

5 years ormore but lessthan 10 years
54.9%(23 properties)

Usage typeCore assets

Residential
Properties

Residence

Examples of specific asset types

Investment ratio by
As of Dec. 13, 2019usage type(the announcement date(acquisition price basis) of business results)

Target investment
ratio in the medium
to long term

Residences
Student dormitories
Company housings

30%~55%

46.8%

Approx. 45%

Office buildings
Data centers

30%~55%

46.6%

Approx. 45%

Hotels0%~30%

6.6%

Approx. 10%

Retail properties
Serviced apartments
Senior properties1

0%~10%-

Approx. 0%-10%

Office building

Financial Status
LTV (total asset basis)(as of the end of the 10th FP ended Oct. 2019)44.6 %
Long-term debt ratio

Credit Rating
Newly acquired credit rating from Rating and Investment
Information, Inc. (R&I)

93.3 %

Japan Credit Rating Agency, Ltd. (JCR)

AA (Stable)(Note) Housings for the elderly with services, Fee-based homes for the aged and Daycare centers are included in Senior properties.

Investment Ratio by Area and Asset Category
Set priority investment areas in light of the characteristics of each asset category.
Investment ratio by
As of Dec. 13, 2019priority investment area (the announcement date(acquisition price basis)of business results)

Rating and Investment Information, Inc. (R&I)

Asset category

Priority investment area

AA- (Stable)

Residential Properties

Greater Tokyo

70% or higher

77.2%

Commercial Properties

Three Major Metropolitan Areas(Greater Tokyo, Osaka area, Nagoya area)

80% or higher

100.0%(Note 1) “Hommachi Garden City” is calculated by treating the office building portion as one property and hotel portion as one property according to the usage type of the building under compartmentalized ownership for calculating “Usage type ratio,” and the entire building as one property for calculating “Area ratio” and “Building age ratio.” In addition, SHR acquired “EstyMaison Yokohama-aobadai North” on June 10, 2019 and “Esty Maison Yokohama-aobadai South” on September 27, 2019 respectively and manages these properties as a single property,
collectively “Esty Maison Yokohama-aobadai”, as these properties are located on the same site. Therefore, “Esty Maison Yokohama-aobadai” is deemed as one property for calculating“Usage type ratio” and “Area ratio”. On the other hand, “Esty Maison Yokohama-aobadai North” and “Esty Maison Yokohama-aobadai South” are deemed as separate properties forcalculating “Building age ratio”.
(Note 2) The “Three Major Metropolitan Areas” refer to “Greater Tokyo,” “Osaka area” and “Nagoya area.” The “Greater Tokyo” refers to Tokyo, Kanagawa Prefecture, Chiba Prefecture, andSaitama Prefecture; the “Osaka area” refers to Osaka Prefecture, Kyoto Prefecture, Hyogo Prefecture, and Nara Prefecture; and the “Nagoya area” refers to Aichi Prefecture. The same shallapply hereinafter.

2

Hotel

Retail and other properties

96.7 %
Fixed interest rate debt ratio

Commercial
Properties

Investment Policy for Hotel
Invest in hotels which can be expected to be highly competitive over the medium to long term (simplified accommodations
and the like are in principle not be invested.)
Invest primarily in hotels regarded as Prime Properties3

Overview of SHR

SHR’s ESG Initiatives
ESG Policy

SocialBasic Policy

Initiatives for Tenant Companies and Residents and Contribution to Local Area and Communities

SHR and Sekisui House Asset Management, Ltd. (“SHAM”) aim to provide “sustainable living basis” for residents and “sustainable bases of operation” for tenant companies by conducting real estate investment management with due consideration
given to the environment, social and governance in recognition of the shared responsibility to contribute to the realization ofa sustainable society in accordance with the “Sustainable Vision” advocated by Sekisui House, the sponsor of SHR and SHAM.

“Sustainable Vision”

Consider ESG and conduct realestate investment managementof Sekisui House,
the sponsor of
SHR and SHAM

Environmental consideration
Safety/BCP
Livability/Functionality

Provision of
Sustainable Living Basisfor residents

SHR is striving to stockpile and introduce equipment, such as distribution of emergency supplies or emergency toilet, etc. forthe security and safety of tenant companies and residents. In addition, SHR takes initiatives to deepen communications andharmoniously co-exist with local communities where owned properties are located through installation of AED (AutomatedExternal Defibrillator) and disaster relief vending machines or participation in local events.
● Installation of AED● 24-hour disaster prevention centermachines

Provision of
Sustainable Basis of operation
for tenant companies
Garden City
Shinagawa Gotenyama

Participation in Global Initiatives● Signing of the Principles for Responsible Investment (PRI)

SHAM has decided to support
the basic approaches of the
PRI and became a signatory.

● Expressing support for the UN Global Compact

Sekisui House Group has expressed
support for the 10 principles of the
UN Global Compact and is striving
to create corporate culture respecting for the human rights.

2019 GRESB Assessment

Selected as “Sector Leader”

Prime Maison
Ginza East and others

Initiatives of the Asset Management Company● Encouraging male employees to take parental leave for one month or more

SHAM encourages eligible male employees who have a child under 3 years old, to take at least one month of parental
leave.
● Creating a Comfortable Working Environment and Initiatives for the Health of Employees

SHR is working to create corporate culture that is open to the public by conducting surveys on employee ethics and theworkplace environment and providing opportunities to discuss requests of employees. In addition, SHR conducts stresschecks and walking challenge as initiatives for health.

For the purpose of tightening examinations on transactions with interested parties, including the acquisition of portfolio
assets and the entrustment of property management services, SHAM has established a governance system that is highly independent, transparent and sound, such as appointing external professionals who has no special interest to SHAM.

GRESB Real Estate Assessment; Acquired a “Green Star”

rating for the third consecutive year

GRESB is an annual benchmark assessment to evaluate ESG considerations in the real estate sector, and GRESB Real Estate Assessment
evaluates sustainability efforts by real estate companies or REITs, etc., not of individual properties.

Decision Making Process
SHAM

Environment
SHR has actively introduced environmentally friendly facilities, including solar power generation panels, LED lighting, energy-saving air conditioners, and Low-e double-glazed windows which have heat shielding and heat insulating functions to theowned properties. As a result, many owned properties acquired environmental certifications.

Proposing fromeach
department inchargeCompliance
Officer/Internal Control
Promotion
Department
Remanded

DBJ Green Building Certification
Acquired DBJ Green Building Certification for 51 properties out of the total of 119 owned properties

3 Stars or higher for all certified properties

Investment
Committee

Rejected

Checked by organization responsible for compliance

SHR
Compliance
Committee

Rejected

Board ofDirectors

Rejected

Checked by external professionals

Approval of
Board ofDirectors of
SHR

Transaction
with Interested
Parties or othertransactions

Disapproved

Checked by SHR’s Supervisory Directors● As external members, external professionals are● The Internal Control Promotion Dept.

(Examples)

conducts preliminary reviews on items to be
discussed prior to all meetings, under thecommand of the Compliance Officer.

selected to the committees on investment decisions
or compliance, and checks decision-making, etc.
for transactions from the professional’s perspective.
● For the decision-making, attendance of theexternal members and agreement of all of theattended members are required.

● Transaction with interested parties requireapproval from the board of directors which iscomprised of SHR’s Executive Director andSupervisory Directors.

Prime Maison
Mitatsunamachi

The DBJ Green Building Certification Program was launched by Development Bank of Japan Inc. (“DBJ”).
It evaluates and certifies properties which are required by society and economy based on comprehensive assessment of properties, while
evaluating various factors such as properties’ environmental features, disaster prevention, proper care for surrounding communities andcommunication with various stakeholders.

4

Prime Maison
Yokohama Nihon-odori and others

Governancein Asia/Diversified - Office/Residential Sector

Garden City
Shinagawa Gotenyama● Disaster relief vending

For more information in SHR’s ESG, please refer to the website below.
Website(ESG)

http://sekisuihouse-reit.co.jp/en/esg/index.html
5Overview of SHR

Promote Internal and External Growth Aiming to Maximize Unitholder Value
Change in Asset Size
Promote strengthen portfolio through the first global offering as SHR (the 4th follow-on PO) and replacement of assets(billion yen)

Aim to expand asset size further

600

119 properties1

527.0 billion yen
500

113 properties

112 properties

440.8 billion yen 438.1 billion yen

115 properties

457.3 billion yen 69.6 billion yen

400
Acquisition through global offering(the 4th follow-on PO) (Jun. 10, 2019)+ 28.7 billion yen
Akasaka Garden City
Garden City Shinagawa Gotenyama+ 12.3billion yen(additional acquisition portion)
Hommachi Minami Garden City
+ 20.9 billion yen(additional acquisition portion)+ 2.0 billion yen
Prime Maison Mitatsunamachi+ 2.6 billion yen
Prime Maison Hongo+ 2.1 billion yen
Prime Maison Kuramae
Esty Maison Yokohama-aobadai North + 1.3 billion yen

300

6 properties
200

200.7 billion yen

Create of Internal Growth
Opportunities for Office Building
The master lease scheme of Hommachi Minami
Garden City (owned portion), the portion alreadyowned before conducting global offering (the 4th
follow-on PO), has been changed from fixed-rent
type master lease agreement to pass-through typemaster lease agreement in December 2019 as
improvement of profit and stable management are
expected against the backdrop of favorable realestate market. In addition, the master lease schemeof Garden City Shinagawa Gotenyama (owned
portion) shall be changed from fixed-rent typemaster lease agreement to pass-through type master
lease agreement in February 2020.

100

0+ 69.6 billion yen

Total

End of 7th FP
ended Apr. 2018

Upon the merger
as of May 1, 2018

End of 8th FP
ended Oct. 2018

End of 9th FP
ended Apr. 2019

End of 10th FP
ended Oct. 2019

(Note) In calculating the number of properties as of the end of the 10th fiscal period ended Oct. 2019, “Garden City Shinagawa Gotenyama (additional acquisition portion)” and “Hommachi
Minami Garden City (additional acquisition portion)” are additional acquisition, and therefore, they are counted as one property together with the already owned portion. “Esty Maison
Yokohama-aobadai North” and “Esty Maison Yokohama-aobadai South” are counted as one property as they are located on the same site.

Assets replacement during the 10th FP ended Oct. 2019

Fixed-rent type master
lease agreement

DirectLease agreement

13.4%

15.8%
Pass-through typemaster leaseagreement
Total

As of the endof 10th FP ended
Oct. 2019

32.8%

Change topass-throughtype master leaseagreement fromfixed-rent type master
lease agreement
Total

37.9%

Lease scheme of office building
Property name

Type of lease scheme

Ratio of leased
floor area

Acquired in10th FP

Pass-through type master lease agreement

9.7%

Acquired in10th FP

Pass-through type master lease agreement

5.8%

Scheduled to be changed on February 1, 2020
From fixed-rent type master lease agreement to pass-through type master lease agreement

24.7%

Pass-through type master lease agreement

10.2%

Changed on December 1, 2019
From fixed-rent type master lease agreement to pass-through type master lease agreement

13.2%

Hommachi Garden City
(Office building portion)

Fixed-rent type master lease agreement (expiring in May 2020)

13.4%

HK Yodoyabashi Garden Avenue

Pass-through type master lease agreement

3.6%

Hirokoji Garden Avenue

Pass-through type master lease agreement

3.5%

Gotenyama SH Building

Direct lease agreement

15.8%

Akasaka Garden City

Garden City Shinagawa
Gotenyama

Replacement of assets (Sep. 27, 2019)
Esty Maison Yokohama-aobadai South + 1.6 billion yen
Esty Maison Yokohama (disposition) - 2.1 billion yen

Ratio of lease scheme(leased floor area basis)

Hommachi Minami
Garden City

Acquired Esty Maison Yokohama-aobadai South which is leased as a whole to a creditworthy tenant under a long-term lease
Realized disposition of Esty Maison Yokohama with the price which is substantially higher than the appraisal value.

Owned
Acquired in10th FP
Owned

Total

100.0%

Acquired asset
Usage type

Property nameLocation

Residence

Esty Maison Yokohama-aobadai
SouthYokohama-shi,
Kanagawa

Acquisition price(million yen)Appraisal value(million yen)Appraisal NOI yield1(%)

Occupancy rate
(%)

1,660

1,710

5.1

100.0

(Reference) Office Building Leasing Scheme Diagram (Illustration)

Master lease agreement(Note 1) Appraisal NOI yield is calculated by dividing appraisal NOI indicated in the appraisal report based on direct capitalization method, which does not take into account the depreciation, by
acquisition price.

Disposed asset

6

Usage type

Property nameResidence

Esty Maison Yokohama

Location
Yokohama-shi,
Kanagawa

Disposition price(million yen)Appraisal value(million yen)

3,000

2,070

Gain on disposition forContribution amount foraccounting purposes1 increasing distribution amount2(million yen)(million yen)804

End tenants

Sekisui House(master lessee)

Fixed-rent type master lease agreement
SHR receives the constant amount of rent regardless of the rent for the end tenants

279(per unit +65 yen)

(Note 1) Out of the “Gain on disposition for accounting purposes”, SHR reserved 775 million yen internally as a reserve for reduction entry for utilizing to stabilize the level of distribution in thefollowing fiscal periods.
(Note 2) “Esty Maison Yokohama” is the succeeded property due to the merger with Sekisui House Residential Investment Corporation. Therefore, the book value for taxation purposes and thebook value for accounting purposes is different and the gain on disposition for taxation purposes has exceeded the gain on disposition for accounting purposes, resulting in an inconsistency between accounting and taxation purposes of 251 million yen arising. In order to avoid incurring a tax burden, SHR intends to reverse the reserve for temporary difference adjustment
and distribute the amount equivalent to in an inconsistency between accounting and taxation purposes of 251 million yen. As a result, contribution amount for increasing distribution shallbe 279 million yen, which is the amount distract 775 million yen of reserve for reduction entry stated above (Note 1) and add 251 million yen of an inconsistency between accounting andtaxation purposes to gain on disposition for accounting purposes.

Pass-through type master lease agreement
SHR receives the same amount of rent as the rent for the end tenants

SHR

Direct lease agreement
Lease agreement

SHR receives rent directly from the end tenants7Overview of SHR

Portfolio Map

As of December 13, 2019 (the announcement date of business results)

Major Owned Properties

82 properties
14 properties
Osaka area
Nagoya area 10 properties
14 properties
OthersGreater Tokyo
1

Greater Tokyo
Acquired in 10th FP

Sapporo-shi Residence/
Residence

3 properties

Greater Tokyo

Office Building

79 properties
Office building/ 3 properties

Hotel

Residence/

Acquired in 10th FP

Osaka Area

Nagoya area
■ GC Shinagawa Gotenyama (additional acquisition)■ Akasaka GC■ PM Mitatsunamachi

Fukuoka-shi

Kanazawa-shi

Residence/

Residence/

8 properties

1 property

Kitakyushu-shi

Yokkaichi-shi

Residence/

Residence/

1 property

9 properties
Office building/ 1 property

Residence/

1 property■ The Ritz-Carlton, Kyoto■ Hommachi Minami GC(additional acquisition)■ EM Yokohama-aobadai South■ PM Hongo■ PM Kuramae■ EM Yokohama-aobadai North

Osaka area1

9 properties
Office building/ 3 properties
Hotel/ 2 properties
Residence/■ Gotenyama SH Building ■ PM Shinagawa■ PM Ginza East

Nagoya Area■■ Hommachi GC■ HK Yodoyabashi GA■ PM Kitatanabe■ PM Yuhigaoka■ Kobe Women’s Student
Housing■ PM Musashinonomori■ Hirokoji GA■ PM Higashisakura■ PM Gokiso■ PM Takami■ PM Yadaminami■ PM Minami 2-jo

■ GM Kanazawa Nishiizumi ■ GM Unomori■ PM Central Park

Others■ PM Gotenyama East

■ PM Daikanyama■ PM Gotenyama West

■ EM Toyosu Residence■ PM Odorikoen■ PM Asakusabashi

8■ PM Ebisu■ PM Yokohama Nihon-odori ■ PM Shirokane-takanawa ■ PM Ichigayayamabushicho ■ PM Shirokanedai Tower ■ PM Otsuka■ MAST Hakata■ EM Yakuin■ Residence ■ Office Building ■ Hotel PM: Prime Maison EM: Esty Maison GC: Garden City GA: Garden Avenue GM: Granmast(Note1) “Hommachi Garden City,” located in the Osaka area, is calculated by treating the office building portion as one property and hotel portion as one property.

9Overview of SHR

Stable and Sound Financial Operations
Debt FinanceBank Formation

Total interestbearing liabilities 244.2 billion yen
LTV

Financial institution

44.6%(as of the end of 10th
FP ended Oct. 2019)

Fixed-interest
rate debt ratio

93.3%

Long-term debt ratio

96.7%

Averageinterest rate1

0.67%
6.9 years

Average maturity

As of December 13, 2019 (the announcement date of business results)

Overview of SHR

Balance(billion yen) Percentage

Financial institution Balance(billion yen) Percentage

Junichi Inoue, Executive Director

Location

4-15-1 Akasaka, Minato-ku, Tokyo

Shinkin Central Bank

2.3

1.0%

Mizuho Bank, Ltd.

43.1

19.6%

The Senshu Ikeda Bank, Ltd.

1.8

0.8%

Sumitomo Mitsui Banking Corporation

39.8

18.1%

The 77 Bank, Ltd.

1.8

0.8%

Sumitomo Mitsui Trust Bank, Limited

19.3

8.8%

The Yamaguchi Bank, Ltd.

1.8

0.8%

Mizuho Trust & Banking Co., Ltd.

14.8

6.7%

Aozora Bank, Ltd.

1.7

0.8%

Resona Bank, Limited.

12.9

5.9%

The Shizuoka Bank, Ltd.

1.3

0.6%

Development Bank of Japan Inc.

11.3

5.2%

The Hiroshima Bank, Ltd.

The Norinchukin Bank

10.6

4.9%

Total Loans

The Bank of Fukuoka, Ltd.

3.1

1.4%

Total Investment
Corporation Bonds

24.5

-

100% ownership

Total InterestBearing Liabilities

244.2

-

Asset Management Company

1.3

0.6%
100.0%

Sekisui House, Ltd.

MUFG Bank, Ltd.,
Mizuho Bank, Ltd.,
Sumitomo Mitsui Banking Corporation

15.0 billion yen

November 1, 2019 to October 31, 2020

Mitsubishi UFJ Trust andBanking Corporation

General Meeting ofUnitholders

Asset Custody Company
Mitsubishi UFJ Trust andBanking Corporation

Sekiwa Real Estate, Ltd.
Sekiwa Real Estate Kanto, Ltd.
Sekiwa Real Estate Tohoku, Ltd.
Sekiwa Real Estate Chubu, Ltd.
Sekiwa Real Estate Kansai, Ltd.
Sekiwa Real Estate Chugoku, Ltd.
Sekiwa Real Estate Kyushu, Ltd.

Transfer Agent

Executive Director
Junichi Inoue
Supervisory Director Shigeru Nomura
Supervisory Director Tatsushi Omiya

Mizuho Trust & Banking Co., Ltd.

Administrator for Investment
Corporation Bonds

Independent Auditor
Ernst & Young ShinNihon LLC

MUFG Bank, Ltd.

Loans with floating interest rates

Investment corporation bonds(Note 1) As of February 1, 2020, company name of Sekiwa Real Estate Companies will be changed to Sekisui House Real Estate Companies. In addition, Sekiwa Real
Estate, Ltd. and Sekiwa Real Estate Kanto, Ltd. will be merged and will be Sekisui House Real Estate Tokyo, Ltd.

Overview of SHAM
4.0

3.0

15

26.8
8.0

10
2.0
6.7

3.0

7.0

2.0

20.2

16.9
4.3

7.1

5.0

12.4

11.1

15.8

9.8

15.1

12.4

10.6

6.1

4.4

4.0

8.0

6.6

6.5

2.3

Corporate
nameSekisui House
Asset Management, Ltd.

Representative

Junichi Inoue,
President & Representative Director

2.5

FP ending FP ending FP ending FP ending FP ending FP ending FP ending FP ending FP ending FP ending FP ending FP ending FP ending FP ending FP ending FP ending FP ending FP ending FP ending FP ending
Apr. 30, Oct. 31, Apr. 30, Oct. 31, Apr. 30, Oct. 31, Apr. 30, Oct. 31, Apr. 30, Oct. 31, Apr. 30, Oct. 31, Apr. 30, Oct. 31, Apr. 30, Oct. 31, Apr. 30, Oct. 31, Apr. 30, Oct. 31,
2020
2020
2021
2021
2022
2022
2023
2023
2024
2024
2025
2025
2026
2026
2027
2027
2028
2028
2029
2029

Licenses andregistration,etc.

May 1, 2018
Merged with Sekisui House
Residential Investment
Corporation

(%)
50

40.8%

40.8%

40.7%

Shareholder

Sekisui House, Ltd. (100%)

General Meeting of
Shareholders
Auditors

45.3%

44.6%

LTV has fallen down due toglobal offering(the 4th follow-on PO)

35

End of FP
ended Apr.
2016

400 million yen

End of FP
ended Oct.
2016

End of FP
ended Apr.
2017

(Note) LTV (%) = Total interest-bearing liabilities / total assets × 100

End of FP
ended Oct.
2017

Investment Committee

Compliance Committee

40.7%

40

End of FP
ended Oct.
2015

CapitalBoard of Directors

43.3%

45
40.9%

4-15-1 Akasaka, Minato-ku, Tokyo

Licensed for building lots and buildings transaction business License No.(2) 96411 issued by the Governor of Tokyo
Certified as an entrustment-based agency License No.82 issued by the Minister of Land, Infrastructure, Transportation and Tourism
Registered as a financial instruments business operator Registration No.2791 issued by the Director-General of Kanto Local Finance Bureau (Kinsho)

Intend to control LTV conservatively at mid-40% range with upper limit of around 50% for the immediate period

41.0%

Location

Operational Organizational Structure

Change in LTV

10General Administrative Agent

Asset Management Agreement
Sponsor Support Agreement
Agreement on Preferential Negotiating Rights (etc.)
General Administrative Agreement
Asset Custody Agreement
Administrative Agreement (Administration of Investment Units)
Financial Agent Agreement

Loans with fixed interest rates

20

0April and October of each year

Board of Directors

Pipeline Support Companies

Agreement Term

Fiscal Period
Ends

Investment Corporation

Sekisui House
Asset Management, Ltd.

1

Credit Limit Amount

Sekisui House
Asset Management, Ltd.

As of December 13, 2019 (the announcement date of business results)

219.7

Financial Institution

AssetManagement
Company

Structure Diagram
Parent Company of the AssetManagement Company /Sponsor

25

0

Representative

23.9%

Diversification of Repayment Dates

5

Sekisui House Reit, Inc.

52.5

Status of Commitment Line Agreement

30

Name

MUFG Bank, Ltd.

(Note 1) “Average interest rate” indicates a weighted average (annual) interest rate using the balance of interest-bearing liabilities. In respect of the interest rates of interest-bearing liabilities forwhich an interest rate swap was conducted, interest rates taking into account the effect of the interest rate swap are used.

(billion yen)

Overview of SHR and SHAM

End of FP
ended Apr.
2018

End of FP
ended Oct.
2018

End of FP
ended Apr.
2019

End of FP
ended Oct.
2019

Compliance Officer
Business Strategy
Department

President &Representative Director

Internal Control
Promotion Department

Real Estate Division
Real Estate
Investment
No. 1 Dept.

Real Estate
Investment
No. 2 Dept.

Real Estate
Real Estate
Real EstateManagement Management Management
No. 1 Dept.
No. 2 Dept.
No. 3 Dept.

Real Estate
Accounting
Department

Engineering
Management
Department

Finance
Department

Investor
Relations
Department

Accounting
Department

GeneralAffairs
Department11Outline of asset management operation
1. Developments in Asset Management in the Fiscal Period under Review(1) Brief History of the Investment Corporation

Sekisui House Reit, Inc. (“SHR”) was established on September 8, 2014 as an investment corporation investing
primarily in commercial properties including office buildings, hotels and retail and other properties, sponsored by
Sekisui House, Ltd. (“Sekisui House”), a leading homebuilder representing Japan with an establisheddevelopment and management track record also in the property development business. SHR was listed on theReal Estate Investment Trust Section of the Tokyo Stock Exchange, Inc. (“Tokyo Stock Exchange”) on December
3, 2014 (securities code: 3309).
Sekisui House Residential Investment Corporation (“SHI,” and collectively with SHR, the “Two Investment

Corporations”) was established on April 20, 2005 as an investment corporation investing primarily in residences
and retail properties, with the corporate name of JOINT REIT Investment Corporation, and listed on the Real
Estate Investment Trust Section of the Tokyo Stock Exchange on July 28, 2005. In March 2010, a collaboration
system was established with Sekisui House serving as the main sponsor and Spring Investment Co., Ltd. as joint

sponsor for the investment corporation, which was renamed from JOINT REIT Investment Corporation to Sekisui
House SI Investment Corporation in June 2010. Later, in June 2014, its Articles of Incorporation were revised to
set residences as the sole target of investment, and the corporate name was changed to Sekisui House SI
Residential Investment Corporation. Subsequently, in association with the shift to a structure in which Sekisui
House serves as the sole sponsor in March 2017, SHI was renamed to Sekisui House Residential Investment
Corporation in June 2017.
The Two Investment Corporations, each under the support of the Sekisui House Group(Note 1), had separately
conducted asset management in an effort to expand their assets and secure stable returns by utilizing theirrespective strengths with the aim of continuous enhancement of unitholder value. However, with an aim to securestrong returns and stability and growth of cash distributions through promoting a steady increase of assets undermanagement and endeavor to maximize unitholder value by further expanding the scale of their assets andincreasing their market presence and expanding a variety of opportunities for growth through utilizing the

integrated corporate strength of the Sekisui House Group, the Two Investment Corporations conducted anabsorption-type merger with SHR as the surviving corporation and SHI as the dissolving corporation (the“Investment Corporation Merger”), setting May 1, 2018 as the effective date(Note 2).
SHR’s investment policy is to conduct asset management that seeks to secure stable earnings over the medium tolong term and steady growth of its investment assets, with residential properties(Note 3) and commercial
properties(Note 4) as major investment targets.
(Note 1) “Sekisui House Group” refers to a group of companies comprised of Sekisui House and its consolidated subsidiaries and its
affiliates accounted for by the equity method. The same shall apply hereinafter.
(Note 2) In association with the Investment Corporation Merger, Sekisui House Asset Management, Ltd. (the “former SHAM”), the asset

management company for SHI, and Sekisui House Asset Management, Ltd. (former name: Sekisui House Investment Advisors,Ltd.) (the “Asset Management Company” or “SHAM”), the asset management company for SHR, carried out an absorption-typemerger as of the same date as the effective date of the Investment Corporation Merger, with SHAM being the surviving company
and the former SHAM being the dissolving company, and changed the company name to the current one.
(Note 3) “Residential properties” refer to real estate whose principal use is residence (including student dormitories, company housing,furnished residences with appliances which do not fall under serviced apartments (*1) (*2)). The same shall apply hereinafter.
(*1) “Serviced apartments” refer to furnished residences with appliances where a dedicated operator provides certain services
to users. The same shall apply hereinafter.
(*2) Some serviced apartments may fall under apartment houses as defined in the Building Standards Act (Act No. 201 of 1950,
as amended) (the “Building Standards Act”). The same shall apply hereinafter.
(Note 4) “Commercial properties” refer to real estate whose principal use is for office buildings, hotels and retail and other properties(including serviced apartments, housing for elderly with service, fee-based homes for the aged, and daycare centers (*); the same
shall apply hereinafter.) and other non-residential business purposes. The same shall apply hereinafter.
(*) Some housing for elderly with service, fee-based homes for the aged, and daycare centers may fall under apartment houses
as defined in the Building Standards Act. The same shall apply hereinafter.

(Note 5) As for “residential properties” and “commertial properties”, since management guideline stipulated in SHAM has been revisedon December 13, 2019, the definitions after the revision are indicated.

(2) Management Environment and Management Performancea. Management Environment
The Japanese economy continued to recover gradually from the previous fiscal period, despite weaknesses inexports and production, due to a moderate increase in capital investment against the backdrop of corporate profits,

which had been steady at high levels, and steady improvement in the employment and income environment.
Under such circumstances, the real estate leasing market both for residences and office buildings continued tohave favorable supply-demand conditions, and rental demand remained robust. As for hotels, while there is adecreasing trend in the number of tourists visiting Japan from South Korea and other countries, the number offoreign tourists visiting Japan is still on an upward trend.
On the other hand, in the real estate transaction market, investors in Japan and overseas have continued to behighly motivated to acquire properties under favorable financial conditions, and the SHR has seen a shortage ofsuperior properties that it considers to be an investment target, and expected cap rate has remained at low levels.

b. Management Performance

In an environment in which the properties SHR considers to be investment targets are in short supply, SHR hasleveraged the pipeline support of Sekisui House, a sponsor of SHR, to acquire a total of seven properties, including
three high-quality office buildings and four residences developed by Sekisui House (of which two properties wereadditionally acquired), using the funds raised by the public offering in June 2019. In addition, in September 2019,
SHR disposed one residence, which had been expected to lose profitability for a certain period of time due to theretirement of a large tenant, to an outside third party, and acquired one residence from Sekisui House.
These transactions brought the number of properties SHR owned as of October 31, 2019 (“as of the end of the
fiscal period under review”) to 119 (comprising 111 residential properties and 8 commercial properties) with anaggregate acquisition price(Note) of 527,065 million yen (246,565 million yen for residential properties and 280,500
million yen for commercial properties).
Moreover, the occupancy rate of SHR’s investment assets as of the end of the fiscal period under review stood at
97.5% for residential properties, 99.9% for commercial properties and 98.1% for the entire portfolio, bolstered bystrong leasing demand against the backdrop of the solid economic growth as described above.

(Note) The “acquisition price” indicates the transaction price shown in the sales agreements for respective properties (excluding
consumption tax, local consumption tax and commission and other various expenses, rounded down to the nearest million yen).
For properties SHR succeeded from SHI through the Investment Corporation Merger, however, the value based on the appraisal
by real estate appraisers with April 30, 2018 as the appraisal date is used as the acquisition price, because the acceptance priceshould be the appraisal value upon the acquisition by SHR as such properties are accounted for by the purchase method with
SHR set as the acquiring corporation and SHI as the acquired corporation. The same shall apply hereinafter.

(3) Overview of Fund Procurementa. Issuance of New Investment Units

During the fiscal period under review, SHR issued new investment units through the public offering (of 501,500
units) on June 10, 2019, and issued additional new investment units by way of third-party allotment (of 25,075
units) on July 9 of the same year. As a result, as of the end of the fiscal period under review, unitholders’ capitalis 149,210 million yen and the total number of investment units issued and outstanding is 4,288,666 units.

b. Borrowings and Issuance of Investment Corporation Bonds
SHR procured a short-term loan in the total amount of 31,160 million yen on June 10, 2019 to use as funds forthe acquisition of the real estate trust beneficiary interests (total of 7 properties including additional acquisitionof 2 properties) and related expenses. Of this short-term loan, 1,850 million yen was partially early repaid on

July 12, 2019 through the issuance of new investment units by way of third-party allotment conducted on July
9, 2019. SHR refinanced 16,310 million yen into a fixed interest rate long-term loans on September 30, 2019 (ofwhich 11,940 million yen was long-term loans with floating interest rates, but interest rates were effectively fixedby establishing interest rate swaps). On July 11, 2019, SHR issued its first green bonds (the issuance amount of
the third investment corporation bonds is 4,000 million yen and the issuance amount of the fourth investment
corporation bonds is 2,500 million yen), and, on July 12, 2019, using the funds from this bonds and cash on hand,
SHR made early repayment of the short-term loan of 6,500 million yen procured on February 28, 2019 .
As a result, fixed interest rate debt ratio in interest-bearing liabilities became 91.2% at the end of the fiscal

period under review from 93.1% at the end of the previous fiscal period. The balance of interest-bearing liabilities1213

at the end of the fiscal period under review is 244,242 million yen and the ratio of total interest-bearing liabilities
to total assets (“LTV (total assets basis)”) is 44.6%.
At the end of the fiscal period under review, commitment line agreements with MUFG Bank, Ltd., Mizuho Bank,
Ltd. and Sumitomo Mitsui Banking Corporation were established at a maximum amount of 15,000 million yen.

2.

Status of Capital Increase, etc.
The following table sets forth the increase (/decrease) in unitholders’ capital and the total number of investment
units issued and outstanding since the establishment of SHR through to the end of the fiscal period under review.

As the commitment deadline of the commitment line contract arrived on October 31, 2019, SHR re-entered into
a commitment line contract with MUFG Bank, Ltd., Mizuho Bank, Ltd. and Sumitomo Mitsui Banking
Corporation on October 30, 2019 with the term of the contract from November 1, 2019 to October 31, 2020 andthe maximum amount of 15,000 million yen in order to ensure flexible and stable financing methods.
c. Credit Rating
The following table sets forth the status of credit ratings of SHR as of the end of the fiscal period under review.

Date

Event

Total number ofinvestment units
issued and outstanding(units)Unitholders’ capital(million yen)
Increase(Decrease)

Balance

Increase(Decrease)

Note

Balance

September 8, 2014

Private placement forincorporation

200

200

2,000

2,000

(Note 1)Credit Rating Agency

Rating Type

December 2, 2014

Public offering

63,69063,890600,000

602,000(Note 2)

Japan Credit Rating Agency, Ltd.
(JCR)

Long-term issuer rating: AA
Rating outlook: Stable

December 24, 2014

Third-party allotment

3,184

67,07430,000632,000(Note 3)

Japan Credit Rating Agency, Ltd.
(JCR)

May 19, 2015

Public offering

19,67386,748154,200

786,200(Note 4)

Bond rating: AA

June 12, 2015

Third-party allotment

995

87,7437,800

794,000(Note 5)

May 24, 2016

Public offering

11,70699,45095,200889,200(Note 6)

June 21, 2016

Third-party allotment

590

100,040

4,800

894,000(Note 7)

May 24, 2017

Public offering

9,661

109,70271,400965,400(Note 8)June 12, 2017

Third-party allotment

487

110,1893,600

969,000(Note 9)May 1, 2018

Split of investment units―

110,189

969,000

1,938,000(Note 10)

May 1, 2018

Allocation of investment
units through merger―

110,189

1,824,091

3,762,091(Note 11)

June 10, 2019

Public offering

37,162

147,351

501,500

4,263,591(Note 12)

July 9, 2019

Third-party allotment

1,858

149,21025,075

4,288,666(Note 13)(4) Overview of Business Performance and Distributions
Results in the fiscal period under review are operating revenue of 14,683 million yen, operating income of 8,226
million yen and ordinary income of 7,406 million yen, resulting in net income of 7,405 million yen. In addition,
concerning cash distributions, SHR decided to distribute 6,994 million yen, which is the amount of unappropriatedretained earnings after adding reversal of reserve for temporary difference adjustments (364 million yen) basedon the application of special tax treatment for investment corporations (Article 67-15 of the Act on Special
Measures Concerning Taxation (Act No. 26 of 1957, as amended) (the “Special Taxation Measures Act”)) andreserving reserve for reduction entry (775 million yen) stipulated in Article 65-7 of the Special Taxation Measures
Act.

(Note 1) New investment units were issued at an issue price of 100,000 yen per unit upon the establishment of SHR.
(Note 2) New investment units were issued at an issue price of 110,000 yen (with the issue amount being 106,150 yen) per unit through apublic offering to procure funds for the acquisition of new properties.

(Note 3)New investment units were issued at an issue amount of 106,150 yen per unit by way of third-party allotment and proceeds thereof
were intended to be used to make partial repayment of loans. Out of proceeds from the issuance of new investment units (3,184
million yen), 111 million yen was allocated for partial repayment of loans and the remaining (3,073 million yen) was allocated, with
the net proceeds from the public offering on May 19, 2015, to fund part of the acquisition cost of “Hommachi Garden City (Officebuilding portion)” (as defined in “Condition of investment assets” “2. Major Portfolio Assets” below).
(Note 4) New investment units were issued at an issue price of 131,917 yen (with the issue amount being 127,587 yen) per unit through apublic offering to procure funds for the acquisition of a new property.
(Note 5) New investment units were issued at an issue amount of 127,587 yen per unit by way of third-party allotment and proceeds thereof
were intended to be used to make partial repayment of loans or as part of future acquisition funds for specified assets.
(Note 6) New investment units were issued at an issue price of 127,140 yen (with the issue amount being 122,967 yen) per unit through apublic offering to procure funds for the acquisition of new properties.
(Note 7) New investment units were issued at an issue amount of 122,967 yen per unit by way of third-party allotment and proceeds thereof
were intended to be used to make future partial repayment of loans or as part of future acquisition funds for specified assets.
(Note 8) New investment units were issued at an issue price of 139,912 yen (with the issue amount being 135,320 yen) per unit through apublic offering to procure funds for the acquisition of new properties.
(Note 9) New investment units were issued at an issue amount of 135,320 yen per unit by way of third-party allotment, with the proceeds
thereof intended to be used for the partial repayment of the short-term loans that had been taken up to finance the acquisition of the
new properties.
(Note 10) SHR implemented a two-for-one split of investment units with April 30, 2018 as the record date and May 1, 2018 as the effective date.
(Note 11) Upon the Investment Corporation Merger, 1.65 SHR units following the investment unit split were allocated to every SHI unit on
May 1, 2018 and 1,824,091 investment units were newly issued.
(Note 12) New investment units were issued at an issue price of 76,537 yen (with the issue amount being 74,103 yen) per unit through a public
offering to procure funds for the acquisition of new properties.
(Note 13) New investment units were issued at an issue amount of 74,103 yen per unit by way of third-party allotment, with the proceeds
thereof intended to be used for the partial repayment of the short-term loans that had been taken up to finance the acquisition of the
new properties.

14

15

3.

[Changes in Market Price of Investment Securities]
The following table sets forth the fiscal period high and low (closing price) on the Tokyo Stock Exchange Real
Estate Investment Trust Section on which SHR investment securities are listed.
6th fiscal
periodFiscal period

From: May 1,
2017
To: Oct. 31,
2017

7th fiscal period
Before the exrights date

After the exrights date

8th fiscal
periodFrom: Nov. 1, From: Apr. 25, From: May 1,
2018
2017
2018
To: Apr. 30,
To: Apr. 24,
To: Oct. 31,
2018
2018
2018

9th fiscal
period10th fiscal
periodFrom: Nov. 1,
2018
To: Apr. 30,
2019

From: May 1,
2019
To: Oct. 31,
2019High (yen)146,400

149,100

70,50073,90085,400103,700

Low (yen)

125,900

123,700

69,70068,20067,10077,200(Note) SHR implemented a two-for-one split of investment units with April 30, 2018 as the record date and May 1, 2018 as the effective date.

Performance of Distribution, etc.
Distribution per unit for the fiscal period under review (the 10th fiscal period) is 1,631 yen. The policy is to
distribute 6,994,814 thousand yen, which is the amount of unappropriated retained earnings after adding reversalof reserve for temporary difference adjustments (364,855 thousand yen) in application of the special treatment ofcorporation tax under which the amount equivalent to distribution of earnings is deductible from the taxable
income of investment corporations as deductible expenses (Article 67-15 of the Special Taxation Measures Act)and reserving reserve for reduction entry (775,495 thousand yen) stipulated in Article 65-7 of the Special Taxation
Measures Act.

Fiscal period
Total amount of unappropriatedretained earnings (thousand yen)Amount of accumulated earnings(thousand yen)
Total amount of cash distribution(thousand yen)[Distribution per unit] (yen)Total amount of distribution of
earnings out of the total amountof cash distribution(thousand yen)[Distribution of earnings per unit](yen)
Total amount of refund ofinvestment in capital out of thetotal amount of cash distribution(thousand yen)[Amount of refund of investment
in capital per unit] (yen)Total distribution amount fromreserve for temporary difference
adjustments out of total amountof refund of investment in capital(thousand yen)[Distribution amount fromreserve for temporary difference
adjustments per unit out of
amount of refund of investment
in capital per unit] (yen)Total distribution amount from
distribution reducing unitholders’capital for tax purpose out of total
amount of refund of investment incapital (thousand yen)[Distribution amount from
distribution reducing unitholders’capital for tax purpose out of
amount of refund of investment incapital per unit] (yen)16

6th fiscal period 7th fiscal period 8th fiscal period 9th fiscal period 10th fiscal period
From: May 1,
From: Nov. 1,
From: May 1,
From: Nov. 1,
From: May 1,
2017
2017
2018
2018
2019
To: Oct. 31, 2017 To: Apr. 30, 2018 To: Oct. 31, 2018 To: Apr. 30, 2019 To: Oct. 31, 2019
2,626,016

2,621,502

7,403,117

5,894,142

7,405,454

26

357

1,556,827―

775,495

2,625,990

2,621,145

5,846,289

5,996,773

6,994,814[2,710][2,705][1,554][1,594][1,631]

2,625,990

2,621,145

5,846,289

5,996,773

6,994,814[2,710][2,705][1,554][1,594][1,631]

―

―

―

―

―

[―]

[―]

[―]

[―]

[―]

―

―

―

―

―

[―]

[―]

[―]

[―]

[―]

―

―

―

―

―

[―]

[―]

[―]

[―]

[―]

17

4. Future Management Policy(1) Future Trends Outlook
Looking ahead, the Japanese economy is expected to continue recovering moderately, supported partly by theeffects of various economic policies amid the employment and income situation continuing to improve, despite
weakness remains in exports, industrial production and machinery investment, according to the Monthly

Sekisui House and Sekiwa Real Estate Group(Note 3) possess (a) property management (“PM”) skills based on theirrelationship with tenants, (b) know-how as a real estate developer to maintain/improve real estate value throughlarge-scale repair, renovation/value enhancement, redevelopment, etc., and (c) know-how on developing various

types of master leasing businesses. SHR and SHAM can, by concluding a PM services consignment agreement(“PM Agreement”) or a sponsor support agreement with Sekisui House, seek (a) property management services
for commercial properties, and (b) in relation to management of owned assets for internal growth, (i) technologies
and know-how that contribute to the improvement of tenant satisfaction or other factors, including energy
efficiency and eco-friendliness, that contribute to the renovation/value enhancement of properties, (ii) personnel

Economic Report (October 2019) released by the Cabinet Office.
However, in addition to the effects of tensions over trade issues, the outlook for the Chinese economy, events inoverseas economies such as the United Kingdom's exit from the European Union, and fluctuations in financial
and capital markets, it is necessary to pay close attention to consumer sentiment after the consumption tax hike,and to the impact on the economy of a series of natural disasters, including Typhoon No. 19 in the first Reiwa

support, including provision of know-how required for the operation of SHR, and (iii) support in areas such as
negotiation of master lease agreements with regard to commercial properties. Furthermore, Sekiwa Real EstateGroup possesses PM skills, including know-how on PM services proven by tenant solicitation utilizing its
nationwide network and an abundant management track record. As such, SHR will capitalize on the PM skills
possessed by Sekiwa Real Estate Group by concluding a PM Agreement with Sekiwa Real Estate Group for

Era.
Having such circumstances in mind, SHR believes that, in the real estate leasing market, demand will remain
stable continuously both for residences and office buildings. Meanwhile, the hotel market will likely continue to
see a strong demand against the backdrop of the change in number of foreign tourists visiting Japan over theprevious year.

residential properties.

(Note 1) The “three major metropolitan areas” refer to “Greater Tokyo,” the “Osaka area” and the “Nagoya area,” where “Greater

Tokyo” refers to Tokyo, Kanagawa Prefecture, Chiba Prefecture and Saitama Prefecture, the “Osaka area” refers to Osaka
Prefecture, Kyoto Prefecture, Hyogo Prefecture and Nara Prefecture and the “Nagoya area” refers to Aichi Prefecture. The

As to the real estate transaction market, the expected cap rate is likely to remain low for the time being.

(2) Future Management Policy and Challenges to Address
SHR will continue to focus on prime properties―high-quality residential properties and commercial properties
situated in strategic locations―as its core investment targets among other main investment targets. By
implementing growth strategies that take full advantage of the real estate development and operation capabilities
and other strengths of the Sekisui House Group, which has established an extensive track record of developing
and operating residential properties and commercial properties, SHR will seek to secure stable earnings over the

medium to long term and steady growth of its investment assets and thereby aim to maximize unitholder value.
On the other hand, SHR will endeavor to expand its asset size by exploring investment opportunities through theinitiatives of SHAM on its own.
Concerning main investment target areas in Japan for residential properties, SHR has set Greater Tokyo(Note 1) as
the core investment area with a focus on the Tokyo 23 wards, which are believed to have a number of prime
properties that offer locations accommodating residents’ needs as well as excellent basic functions as a residence
including comfort and safety and such and are expected to see strong leasing demand and supplies of prime
properties. In addition, SHR will invest in other major cities throughout Japan outside of Greater Tokyo including
government designated cities as well as their surrounding commutable areas, where networks of Sekisui Houseand Seven Sekiwa Real Estate Companies(Note 2) can be fully utilized.
SHR has set the three major metropolitan areas(Note 1) with three large cities, namely the Tokyo 23 wards, Osaka
City and Nagoya City, all of which SHR has knowledge in the course of developments by Sekisui House, as thecore investment areas in Japan for commercial properties, with a focus on the three large cities, in which SHR
can expect stable management against the backdrop of solidified demand resulting from being bases for tenantcompanies’ business activities. In addition, major cities throughout Japan other than the three major metropolitan
areas are set as investment areas.
SHR has executed a sponsor support agreement with Sekisui House. This agreement provides for utilization of
the urban redevelopment business track record and know-how of Sekisui House, allowing SHR to seek fromSekisui House property acquisition support for external growth (pipeline support). Specifically, such support will(a) grant to SHR preferential negotiation rights with regard to the sale of domestic real estate, etc. owned ordeveloped by Sekisui House, (b) provide SHR with information on real estate, etc. owned or developed in Japanby third parties, (c) provide SHR with warehousing functions, and (d) provide SHR with support for theredevelopment of owned properties.
Furthermore, SHR has concluded agreements concerning preferential negotiation rights (and others) with theSeven Sekiwa Real Estate Companies. Thus, particularly with residential properties, SHR will be able to receive
support in acquiring properties for external growth, such as granting of preferential negotiation rights regarding
sale of domestic real estate, etc. owned or developed by the Seven Sekiwa Real Estate Companies.

18

same shall apply hereinafter.
(Note 2) “Seven Sekiwa Real Estate Companies” is a collective name for Sekiwa Real Estate, Ltd., Sekiwa Real Estate Kanto, Ltd.,
Sekiwa Real Estate Tohoku, Ltd., Sekiwa Real Estate Chubu, Ltd., Sekiwa Real Estate Kansai, Ltd., Sekiwa Real Estate
Chugoku, Ltd. and Sekiwa Real Estate Kyushu, Ltd., which are wholly-owned subsidiaries of Sekisui House and are corecompanies of real estate unit of the Sekisui House Group operating nationwide. The same shall apply hereinafter.
(Note 3) “Sekiwa Real Estate Group” refers to a group of companies comprised of Seven Sekiwa Real Estate Companies as the core,and of its subsidiaries and affiliates. The same shall apply hereinafter.

(3) Financial Strategy
SHR has adopted as its policy the conduct of stable and sound financial operations in order to secure stableearnings over the medium to long term and enhance unitholder value. Specifically, the policy is to form strong andstable business relationships with leading domestic financial institutions, centering on megabanks, bolstered by
the creditworthiness of the sponsor, Sekisui House, and also to reduce refinancing risks and risks of fluctuationsin interest rates by exploring the extension of borrowing periods and working to diversify dates for repayment,
etc., while pursuing the optimum balance between fixed-rate and floating-rate debts.
In addition, with regard to LTV (total assets basis), although SHR has the policy to set the figure at 60% as its

upper limit, SHR will control the figure at mid-40%, which is a conservative level, setting the upper limit for thetime being at around 50% with a focus on securing its funding capabilities.
Furthermore, SHR will work to diversify its sources for direct and indirect financing, such as by issuinginvestment corporation bonds, in comprehensive consideration of the market environment, SHR’s financial
standing and other factors, while continuing its endeavors for stable and sound financial operations.

5.

Significant Subsequent Events
Not applicable.
(Reference Information)(1) Issuance of Investment Corporation Bonds
SHR decided to conduct issuance of new investment corporation bonds as stated below on October 25, 2019
based on the comprehensive resolution passed at a meeting of the board of directors of SHR held on February
25, 2019, and payment for such corporate bonds has been completed on November 1, 2019.

Name: Sekisui House Reit, Inc. Fifth Series Unsecured Investment Corporation Bonds(with pari passu clause among specified investment corporation bonds) (Green
Bonds)

Total issue amount: 5,000 million yen

Interest rate

: 0.220% per annum

Payment date

: November 1, 201919

Collateral and guarantee: No secured mortgage or guarantee is applicable, and no assets are specificallyreserved as security.

Redemption method and date

: The total amount will be redeemed on November 1, 2024.
The bonds may be repurchased and cancelled at any time after the payment dateunless otherwise specified by Japan Securities Depository Center, Incorporatedor laws and regulations.

Credit rating: AA (Japan Credit Rating Agency, Ltd.)Fiscal agent, issuing agent
and paying agent: MUFG Bank, Ltd.

(Note 4)

The first interest calculation period is from November 29, 2019 to the last day of February 2020.

(Note 6)

SHR may, by giving prior written notice and if certain other terms and conditions are met, make early repayment of the loan (inwhole or in part) in the period between the drawdown date and the repayment date.

(Note 5)b.

Where the repayment date is not a business day, such date will be the immediately following business day or (if the immediately
following business day falls in the next calendar month) the immediately preceding business day.

Floating Interest Rate Borrowing

Category

Lenders(Note 1)

MUFG Bank, Ltd.
(Note 8)Use of proceeds

Mizuho Bank, Ltd.

(Note) Details of the early repayment are as follows.

Short-term

Balance before
repayment

Repayment
amount(million yen) (million yen)

Lender
MUFG Bank, Ltd.,
Mizuho Bank, Ltd. and
Sumitomo Mitsui
Banking Corporation

13,000

Balance after
repayment(million yen)

Drawdown
date

8,000

Jun. 10,
2019

5,000

Repayment
date

May 29,2020

Sumitomo Mitsui
Banking
Corporation

Early
repayment
date
Nov. 5,2019(2) Acquisition of Credit Rating

Subject of ratings

RatingRating outlook

Issuer rating

AA-

Stable(Note 2) (Note 3)(Note 4) (Note 5)

Drawdown
datea. Fixed Interest Rate Borrowing
Category

Longterm

Lender(Note 1)Development
Bank of Japan Inc.

Total

Loan
Amount(millionyen)

MUFG Bank, Ltd.

1,400

Sumitomo Mitsui
Banking
Corporation

Base rate
300 (JBA 3-month
Japanese Yen
TIBOR) plus
1,000
0.290%(Note 10)The Norinchukin
Bank

800

MUFG Bank, Ltd.

1,700

800

800

(Note 8)Mizuho Bank, Ltd.
Interest rate
(Note 2) (Note 3)(Note 4)0.500%－

Repayment Repayment
date
methodDrawdown
date

Borrowing
methodNov. 29,
2019

Borrowing basedon individualloan agreement,
dated November
26, 2019. The
lender under theloan agreement
is as indicated to
the left of thistable.

May 31,
2028

－

－

－

(Note 5)

Security(Note 6)

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

Lump-sum
Unsecuredandrepayment
at maturity Unguaranteed－

Repayment Repayment
methoddate(Note 6)

Security(Note 7)

Nov. 30,2023(Note 9)1,800

Mizuho Bank, Ltd.
Longterm

200 (JBA 3-month
Japanese Yen
TIBOR) plus
800
0.185%

Nov. 29,2019(3) Borrowing of Funds
SHR conducted the following borrowing of funds on November 29, 2019 for use as repayment funds of a longterm borrowing (14,000 million yen) which was due for repayment on November 30, 2019.

Borrowing
method1,200

Sumitomo Mitsui
Trust Bank,
Limited(Note 8)

SHR announced that it newly acquired credit rating from Rating and Investment Information, Inc. (“R&I”) on
November 18, 2019.

Interest rate

Base rate: The proceeds were used for early repayment of short-term loans on November 5,2019 (Note).

Category

Loan
Amount(millionyen)

Resona Bank,
Limited.
Total

Borrowing basedon individualloan agreement,
dated November
26, 2019. The
lenders under
the loanagreement are as
indicated to theleft of this table.

May 29,2026

Lump-sum
Unsecured
repayment
andat maturity Unguaranteed

1,300

Base rate(JBA 3-month
Japanese Yen
1,200
TIBOR) plus
0.380%
600

May 31,
2028(Note 11)900

13,200

－

－

－

－

－

－

－

(Note 1) MUFG Bank, Ltd., Mizuho Bank, Ltd. and Sumitomo Mitsui Banking Corporation are arrangers of the above borrowing.
(Note 2) The borrowing expenses and other charge payable to the lender are not included.
(Note 3) The first interest payment date will be the last day of February 2020. Subsequent interest payment dates will be the last day ofAugust and February of each year and the principal repayment date. Where the relevant date is not a business day, such date willbe the immediately following business day or (if the immediately following business day falls into the next calendar month) the
immediately preceding business day.

20

21

(Note 1) MUFG Bank, Ltd., Mizuho Bank, Ltd. and Sumitomo Mitsui Banking Corporation are arrangers of the above borrowings.

(Note 2) The borrowing expenses and other charge payable to the lenders are not included.
(Note 3) The base rate applicable to the calculation period for the interest payable on an interest payment date shall be the 3-month Japanese

Yen TIBOR (Tokyo InterBank Offered Rate) published by the Japanese Bankers Association (JBA) TIBOR Administration two
business days prior to the immediately preceding relevant interest payment date. The base rate is subject to review every interest

The first interest payment date will be the last day of February 2020. Subsequent interest payment dates will be the last day of(Note 5)

immediately preceding business day.
The first interest calculation period is from November 29, 2019 to the last day of February 2020.

(Note 7)

following business day falls in the next calendar month) the immediately preceding business day.
SHR may, by giving prior written notice and if certain other terms and conditions are met, make early repayment of the loans (in(Note 8)(Note 9)1.

Status of Capital

payment date. Where no rate that corresponds to the interest calculation period exists, the base rate shall be that which corresponds
to the concerned period calculated based on the method provided for in the relevant individual loan agreement.

(Note 4)(Note 6)

Outline of the investment corporation

every three months and the principal repayment date. Where the relevant date is not a business day, such date will be theimmediately following business day or (if the immediately following business day falls into the next calendar month) the

Where the repayment date is not a business day, such date will be the immediately following business day or (if the immediately

whole or in part), in the period between the drawdown date and the repayment date.
The borrowings from MUFG Bank, Ltd. are ESG Loan for J-REIT.

The interest rate is fixed at 0.273%, in fact, by conclusion of the interest rate swap agreement.

(Note 10) The interest rate is fixed at 0.441%, in fact, by conclusion of the interest rate swap agreement.
(Note 11) The interest rate is fixed at 0.599%, in fact, by conclusion of the interest rate swap agreement.

Fiscal period

As of the end As of the end As of the end
As of the end
As of the endof 9th fiscal of 10th fiscal
of 6th fiscal
of 7th fiscal
of 8th fiscal
periodperiodperiodperiodperiod(Oct. 31, 2017) (Apr. 30, 2018) (Oct. 31, 2018) (Apr. 30, 2019) (Oct. 31, 2019)

Total number of investment units
authorized (units)

10,000,000

10,000,000

20,000,000

20,000,000

20,000,000

Total number of investment units
issued and outstanding (units)

969,000

969,000

3,762,091

3,762,091

4,288,666

Unitholders’ capital (million yen)

110,189

110,189

110,189

110,189

149,210

Number of unitholders (persons)

14,49012,95820,293

18,73618,9862.

Matters Concerning Investment Units
Of the unitholders as of the end of the fiscal period under review, the following are the top ten unitholders in termsof investment unitholding ratio.

Name

Japan Trustee Services Bank, Ltd. (Trust Account)

1,010,534

23.56

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

667,883

15.57

Sekisui House, Ltd.

200,750

4.68

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

173,539

4.05

Trust & Custody Services Bank, Ltd. (Securities Investment Trust Account)

90,8782.12

Mitsubishi UFJ Trust and Banking Corporation

50,102

1.17

STATE STREET BANK WEST CLIENT - TREATY 505234

49,701

1.16

BNYM AS AGT/CLTS 10 PERCENT

45,0441.05

Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.

44,106

1.03

JP MORGAN CHASE BANK 385771

34,4920.80

2,367,029

55.19

Total
(Note)

22

Number ofunits owned(units)Percentage of
owned units tototal units
issued andoutstanding(%)

Percentage of owned units to total units issued and outstanding is rounded to the nearest second decimal place.

23

3. Matters Concerning Directors, etc.
(1) Name and other information of executive director, supervisory directors and an independent auditor
The following table sets forth information on the executive director, supervisory directors and an independent
auditor of SHR as of the date of this document.
Position
Executive
Director

Supervisory
Director

Independent
AuditorName

Key concurrently held position, etc.

Junichi Inoue

President & Representative Director,
Sekisui House Asset Management, Ltd.

Shigeru Nomura

President, Shigeru Nomura Certified Public
Accountant OfficeOutside Director, Eiken Chemical Co., Ltd.
Member of Corporate Revitalization
Committee, The Resolution and Collection
Corporation (RCC)

1,800

Tatsushi Omiya

Outside Director, QB Net Holdings Co., Ltd.
Lawyer, LEX Law Office

1,800

Ernst & Young
ShinNihon LLC―

46,900Composition of Assets of the Investment Corporation
The following table sets forth the composition of assets of SHR as of the end of the fiscal period under review.

Type of
asset

―

Asset
category

Real estatein trust(Note 2)

(2) Policy for determining whether to dismiss or refuse the reappointment of independent auditor
Dismissal of the independent auditor is subject to consideration at a meeting of the board of directors of SHR inaccordance with the provisions of the Investment Trusts Act. Refusal of reappointment of the independent auditor
is also subject to consideration at a meeting of the board of directors of SHR by taking into account the quality ofaudits, amount of audit fee and various other circumstances in a comprehensive manner.
Asset Management Company, Asset Custodian and Administrative AgentsThe following table sets forth information on the asset management company, asset custodian and administrative
agents of SHR as of the date of this document.
Name(Note 2)

Greater Tokyo

182,060

38.3

189,258

34.5

Other areas

55,768

11.7

55,720

10.2

Three major
metropolitan areas

213,95245.0

275,780

50.3

―

―

―

―

Total of real estate in trust

451,782

95.1

520,759

95.0

Deposits and other assets

23,203

4.9

27,2305.0

Total amount of assets

474,985100.0

547,989

100.0

Residential
properties
Commercial
properties

Other areas(Note 1) “Total amount held” is the carrying amount (or, for real estate in trust, the depreciated book value) as of the end of each fiscal period,
rounded down to the nearest million yen.
(Note 2) Figures under the heading “As a percentage of total assets” have been rounded to the nearest first decimal place.
(Note 3) SHR does not own any overseas real estate, etc. as of the end of the fiscal period under review.

2.

Major Portfolio Assets
The following table sets forth an overview of the major portfolio assets (top ten properties by book value at the end of
period) of SHR as of the end of the fiscal period under review.
As a percentage
of total
property-related
operatingrevenue(%) (Note 5)

Book value
at the endof period(million yen)

Leasablearea(m2)

Leasedarea(m2)

Garden City Shinagawa
Gotenyama(Note 6)

70,82538,577.99

38,545.79

99.9

11.4

Gotenyama SH Building

50,16419,999.97

19,999.97

100.0

7.8

43,20429,657.53

29,657.53

100.0

7.5

Name ofreal estate, etc.

(Note 1)

Hommachi Minami Garden City
(Note 7)(Note 2)

(Note 3)

Occupancy
rate(%)(Note 4)

Usage
type
Officebuilding
Officebuilding
Officebuilding
Officebuilding
Officebuilding

Asset Management Company

Sekisui House Asset Management, Ltd.

Hommachi Garden City
(Office building portion)(Note 8)

37,17817,006.94

17,006.94

100.0

6.5

Asset Custodian

Mitsubishi UFJ Trust and Banking Corporation

Akasaka Garden City (Note 9)28,855

12,472.80

12,275.28

98.4

3.7

Administrative Agent (Transfer Agent)Mizuho Trust & Banking Co., Ltd.

The Ritz-Carlton, Kyoto(Note 10)17,941

9,384.56

9,384.56

100.0

2.5

Hotel

Administrative Agent (Administrative Agent forOperation of Administrative Instruments)

Mitsubishi UFJ Trust and Banking Corporation

Hommachi Garden City
(Hotel portion)(Note 8)

17,061

18,092.98

18,092.98

100.0

2.9

Hotel

Administrative Agent (Administrative Agent for
Investment Corporation Bonds)

MUFG Bank, Ltd.

Esty Maison Ojima

8,495

9,905.97

9,734.93

98.3

1.8 Residence

Esty Maison Kinshicho II

8,117

9,469.65

9,302.30

98.2

1.6 Residence

Prime Maison Shirokanedai
Tower

8,028

6,772.89

6,516.50

96.2

1.7 Residence

289,872

171,341.28

170,516.78

99.5

47.5

Total

24

Geographical area,etc.

As of the end of 9th fiscal
As of the end of 10th fiscal
periodperiod(Apr. 30, 2019)(Oct. 31, 2019)
As a
As a
Total amount
Total amountpercentage ofpercentage of
held
held
total assets
total assets(million yen)(million yen)(%)(%)
(Note 1)
(Note 1)
(Note 2)

(Note 2) The total amount of compensation for the independent auditor, as stated above, is an approximation and includes compensation for
preparing comfort letters for the issuance of new investment units in June 2019 and the issuance of the Third and Fourth Series
Unsecured Investment Corporation Bonds in July 2019, as well as compensation for auditing matters related to English financial
statements.

Entrustment category1.

Total amount of compensationfor each position during period(thousand yen)

(Note 1) None of the executive director or supervisory directors owns SHR investment units in their own name or in the name of anotherperson. In addition, supervisory directors may be officers of other corporations other than those stated above, but none of suchcorporations, including those stated above, has vested interest in SHR.

4.

Condition of investment assets―

25

(Note 1) “Book value at the end of period” refers to the depreciated book value of each property as of the end of the fiscal period under review,rounded down to the nearest million yen. The same shall apply hereinafter.
(Note 2) “Leasable area” refers to the floor area presumably available for leasing based on the lease agreement or building drawing, etc. foreach property that is valid as of the end of the fiscal period under review, rounded down to the second decimal place. In cases where
the properties SHR owns are co-ownership interest or quasi co-ownership interest of trust beneficiary interests in real estate forrespective properties, the figure indicates the value obtained by multiplying the leasable area of real estate or real estate in trust (orthe leasable area of exclusively-owned portions for properties under compartmentalized ownership interest) by the ratio of the(Note 3)ownership interest owned by SHR or trustees. The same shall apply hereinafter.

3.

Details of Assets (Real Estate, etc.) in the Portfolio
The following table sets forth an overview of the properties owned by SHR as of the end of the fiscal period underreview.
Usage
type“Leased area” refers to the sum total of the leased area indicated in the respective lease agreements, which are valid as of the end of
the fiscal period under review, with the end tenants for each of the properties or the leased area based on building drawings. However,the leasable area of each property is indicated in case fixed-rent type master lease agreements have been concluded with the master
lease companies, regardless of whether lease agreements have been concluded with the end tenants. For Akasaka Garden City and

The Ritz-Carlton, Kyoto, the figure indicates the area corresponding to the quasi co-ownership interest owned by SHR. The same

Property
number(Note 1)

Location(Note 2)Type of ownershipBook value
at the end of
period(million yen)

Estimatedvalue at theend of period(million yen)
(Note 3)

R-001

Esty Maison Ginza

Chuo-ku, Tokyo

Real estate trust
beneficiary interests

R-002

Esty Maison Azabunagasaka

Minato-ku, Tokyo

Real estate trust
beneficiary interests

1,773

1,930

2,027

2,180

6,504

6,900

shall apply hereinafter.
(Note 4) “Occupancy rate” refers to the ratio of leased area to leasable area of each property as of the end of the fiscal period under review,

R-003

Esty Maison Ebisu II

Shibuya-ku, Tokyo

Real estate trust
beneficiary interests

R-004

Esty Maison Ebisu

Shibuya-ku, Tokyo

Real estate trust
beneficiary interests

868

903

(Note 5) Figures under the heading “As a percentage of total property-related operating revenue” indicate the ratio of property-related

R-005

Esty Maison Kanda

Chiyoda-ku, Tokyo

Real estate trust
beneficiary interests

1,583

1,740

R-006

Esty Maison Kitashinjuku

Shinjuku-ku, Tokyo

Real estate trust
beneficiary interests

1,564

1,710

R-007

Esty Maison
Asakusakomagata

Taito-ku, Tokyo

Real estate trust
beneficiary interests

2,144

2,360

R-008

Esty Maison Kawasaki

Kawasaki-shi,
Kanagawa

Real estate trust
beneficiary interests

2,492

2,660

R-010

Esty Maison Kameido

Koto-ku, Tokyo

Real estate trust
beneficiary interests

1,542

1,760

R-011

Esty Maison Meguro

Meguro-ku, Tokyo

Real estate trust
beneficiary interests

1,088

1,190

R-012

Esty Maison Sugamo

Toshima-ku, Tokyo

Real estate trust
beneficiary interests

1,613

1,740

2,903

3,000

rounded to the nearest first decimal place. The figure indicated in the “Total” column indicates the ratio of the sum total of leased
area of each property to the sum total of leasable area of each property, rounded to the nearest first decimal place.

(Note 6)

operating revenue of each property for the fiscal period under review to total property-related operating revenue of each property of
SHR’s entire portfolio for the fiscal period under review, rounded to the nearest first decimal place.
SHR additionally acquired the compartmentalized ownership interest in all of the exclusively-owned portions of the 1st floor above
ground and part of the exclusively-owned portions of the 5th floor above ground of the building of “Garden City Shinagawa
Gotenyama”, as well as the accompanying right of site (ratio of right of site: 734,166/3,857,806 (or approximately 19.0%)) on June 10,2019 (may be referred to as “Garden City Shinagawa Gotenyama (additional acquisition portion)”) and SHR owns all of “Garden City

(Note 7)

Shinagawa Gotenyama” as of the end of the fiscal period under review. The same shall apply hereinafter.
SHR additionally acquired the compartmentalized ownership interest in all of the exclusively-owned portions of the 1st to 12th floors
above ground of the building of “Hommachi Minami Garden City”, as well as the accompanying right of site (ratio of right of site:
1,295,807/2,965,753 (or approximately 43.7%)) on June 10, 2019 (may be referred to as “Hommachi Minami Garden City (additional
acquisition portion)”) and SHR owns all of “Hommachi Minami Garden City” as of the end of the fiscal period under review. The same

shall apply hereinafter.
(Note 8) Hommachi Garden City comprises the portions used as office building and retail property (“Hommachi Garden City (Office building
portion)”) and the portions used as a hotel (“Hommachi Garden City (Hotel portion)”.) In this document, the overview and otherinformation regarding the property may be described separately for the Office building portion and the Hotel portion. The same shallapply hereinafter.
(Note 9) For Akasaka Garden City, SHR owns 65.45% quasi co-ownership interest of trust beneficiary interest in real estate regarding thecompartmentalized ownership interest in all of the exclusively-owned portions of the 1st floor under ground through 4th floor above
ground and 11th floor through 19th floor above ground of the building, as well as the accompanying right of site (ratio of right of site:662,768/1,000,000 (or approximately 66.3%)), and the figures indicate the value corresponding to the quasi co-ownership interest.
The same shall apply hereinafter.
(Note 10) For The Ritz-Carlton, Kyoto, SHR owns 40% quasi co-ownership interest of trust beneficiary interest in real estate for the property,
and the figures indicate the value corresponding to the quasi co-ownership interest. The same shall apply hereinafter.

Residence

R-013

Esty Maison Kyobashi

Osaka-shi, Osaka

Real estate trust
beneficiary interests

R-014

Esty Maison Hakuraku

Yokohama-shi,
Kanagawa

Real estate trust
beneficiary interests

913

975

R-015

Esty Maison Minamihorie

Osaka-shi, Osaka

Real estate trust
beneficiary interests

1,051

1,110

R-016

Esty Maison Gotanda(Note 4)

Shinagawa-ku,
TokyoReal estate trust
beneficiary interests

3,073

3,280

R-017

Esty Maison Oisendaizaka

Shinagawa-ku,
TokyoReal estate trust
beneficiary interests

2,679

2,860

R-018

Esty Maison
Shinagawa Seaside

Shinagawa-ku,
TokyoReal estate trust
beneficiary interests

2,140

2,170

R-019

Esty Maison Minamiazabu

Minato-ku, Tokyo

Real estate trust
beneficiary interests

1,243

1,330

R-020

Esty Maison Tsukamoto

Osaka-shi, Osaka

Real estate trust
beneficiary interests

1,054

1,120

R-021

Esty Maison Kawasaki II

Kawasaki-shi,
Kanagawa

Real estate trust
beneficiary interests

1,968

2,070

R-022

Esty Maison Azabujuban

Minato-ku, Tokyo

Real estate trust
beneficiary interests

2,727

2,890

918

994

R-023

Esty Maison Itabashihoncho

Itabashi-ku, Tokyo

Real estate trust
beneficiary interests

R-024

Esty Maison Oizumigakuen

Nerima-ku, Tokyo

Real estate trust
beneficiary interests

779

838

R-025

Esty Maison
Higashishinagawa

Shinagawa-ku,
TokyoReal estate trust
beneficiary interests

2,341

2,390

R-026

Esty Maison
Itabashikuyakushomae

Itabashi-ku, Tokyo

Real estate trust
beneficiary interests

2,497

2,680

Shinagawa-ku,
TokyoReal estate trust
beneficiary interests

1,035

1,130

Bunkyo-ku, Tokyo

Real estate trust
beneficiary interests

689

748

R-027
R-028

26

Name ofreal estate, etc.

Esty Maison Musashikoyama(Note 5)

Esty Maison Sendagi(Note 6)27

Usagetype

Residence

Property
numberEstimatedvalue at theend of period(million yen)

R-029

Esty Maison
Yotsuyasakamachi(Note 7)

Shinjuku-ku,
TokyoReal estate trust
beneficiary interests

2,077

2,270

R-059

Esty Maison Toritsudaigaku

R-030

Esty Maison Hakatahigashi

Fukuoka-shi,
Fukuoka

Real estate trust
beneficiary interests

2,325

2,410

R-060

R-031

Esty Maison Kamigofuku

Fukuoka-shi,
Fukuoka

Real estate trust
beneficiary interests

798

814

R-061

(Note 1)

(Note 2)Type of ownership

Usage
type

Property
numberLocation

Name ofreal estate, etc.

(Note 1)

Location(Note 2)Type of ownership(Note 3)

Book value
at the end of
period(million yen)

Estimatedvalue at theend of period(million yen)
(Note 3)Meguro-ku, Tokyo

Real estate trust
beneficiary interests

850

863

Esty Maison
Musashikoyama II

Shinagawa-ku,
TokyoReal estate trust
beneficiary interests

1,015

1,060

Esty Maison Nakano

Nakano-ku, Tokyo

Real estate trust
beneficiary interests

1,846

1,860

1,003

1,030

R-032

Esty Maison Sangenjaya

Setagaya-ku,
TokyoReal estate trust
beneficiary interests

809

871

R-062

Esty Maison Shinnakano

Nakano-ku, Tokyo

Real estate trust
beneficiary interests

R-033

Prime Maison
Musashinonomori

Kodaira-shi,
Tokyo

Real estate trust
beneficiary interests

1,817

1,960

R-063

Esty Maison Nakanofujimicho

Nakano-ku, Tokyo

Real estate trust
beneficiary interests

969

1,020

R-034

Prime Maison Higashisakura

Nagoya-shi, Aichi

Real estate trust
beneficiary interests

1,467

1,590

R-064

Esty Maison Tetsugakudo

Nakano-ku, Tokyo

Real estate trust
beneficiary interests

1,139

1,180

R-035

Prime Maison Kayabakoen

Nagoya-shi, Aichi

Real estate trust
beneficiary interests

848

876

R-065

Esty Maison Koenji

Suginami-ku,
TokyoReal estate trust
beneficiary interests

1,145

1,200

2,447

2,560

R-036

Esty Maison Sangenjaya II

Setagaya-ku,
TokyoReal estate trust
beneficiary interests

773

842

R-066

Esty Maison Oshiage

Sumida-ku, Tokyo

Real estate trust
beneficiary interests

R-037

Esty Maison Itabashi C6

Itabashi-ku,
TokyoReal estate trust
beneficiary interests

2,516

2,690

R-067

Esty Maison Akabane

Kita-ku, Tokyo

Real estate trust
beneficiary interests

3,221

3,370

R-038

MAST Hakata(Note 8)

Fukuoka-shi,
Fukuoka

Real estate trust
beneficiary interests

2,266

2,500

R-068

Esty Maison Oji

Kita-ku, Tokyo

Real estate trust
beneficiary interests

1,618

1,740

R-039

Esty Maison Kinshicho

Sumida-ku,
TokyoReal estate trust
beneficiary interests

1,232

1,300

R-069

Prime Maison Waseda

Shinjuku-ku,
TokyoReal estate trust
beneficiary interests

1,551

1,650

Real estate trust
beneficiary interests

1,430

1,520

1,924

1,970

R-040

Esty Maison Musashikoganei

Koganei-shi,
Tokyo

Real estate trust
beneficiary interests

1,770

1,980

R-070

Prime Maison Hatchobori

Chuo-ku, Tokyo

R-041

Prime Maison Gokiso

Nagoya-shi, Aichi

Real estate trust
beneficiary interests

1,904

2,050

R-071

Prime Maison Jimbocho

Chiyoda-ku,
Tokyo

R-042

Prime Maison Yuhigaoka

Osaka-shi, Osaka

Real estate trust
beneficiary interests

892

972

R-072

Prime Maison
Gotenyama East

Shinagawa-ku,
TokyoReal estate trust
beneficiary interests

588

MAST LIFE Akihabara

Chiyoda-ku,
TokyoFukuoka-shi,
Fukuoka

Real estate trust
beneficiary interests

1,916

R-043
R-044

Prime Maison Kitatanabe
Prime Maison Momochihama

Osaka-shi, Osaka

634
2,080

Residence

R-073
R-074

Real estate trust
beneficiary interests
Real estate trust
beneficiary interests

2,888

2,980

Real estate trust
beneficiary interests

549

569

Esty Maison Aoi

Nagoya-shi, Aichi

Real estate trust
beneficiary interests

2,412

2,540

Real estate trust
beneficiary interests

2,622

2,460

R-045

Esty Maison Akihabara

Taito-ku, Tokyo

Real estate trust
beneficiary interests

1,888

2,010

R-075

Esty Maison Yakuin

Fukuoka-shi,
Fukuoka

R-046

Esty Maison Sasazuka

Shibuya-ku,
TokyoReal estate trust
beneficiary interests

3,408

3,500

R-076

Esty Maison Kinshicho II

Sumida-ku, Tokyo

Real estate trust
beneficiary interests

8,117

8,800

R-047

Prime Maison Ginza East

Chuo-ku, Tokyo

Real estate trust
beneficiary interests

6,156

6,600

R-077

Esty Maison Ojima

Koto-ku, Tokyo

Real estate trust
beneficiary interests

8,495

9,160

Real estate trust
beneficiary interests

1,040

Nagoya-shi, Aichi

Real estate trust
beneficiary interests

2,050

2,120

4,652

4,590

R-048

Prime Maison Takami

Nagoya-shi, Aichi

1,110

R-078

Prime Maison Fujimidai

R-049

Prime Maison Yadaminami

Nagoya-shi, Aichi

Real estate trust
beneficiary interests

878

864

R-079

Esty Maison Tsurumai

Nagoya-shi, Aichi

Real estate trust
beneficiary interests

R-050

Prime Maison Teriha

Fukuoka-shi,
Fukuoka

Real estate trust
beneficiary interests

1,222

1,290

R-080

Prime Maison Morishita

Koto-ku, Tokyo

Real estate trust
beneficiary interests

1,892

2,020

R-051

Esty Maison
Higashishirakabe

Nagoya-shi, Aichi

Real estate trust
beneficiary interests

1,666

1,640

R-081

Prime Maison Shinagawa

Shinagawa-ku,
TokyoReal estate trust
beneficiary interests

1,930

2,040

Esty Maison Sengoku

Bunkyo-ku,
TokyoReal estate trust
beneficiary interests

1,347Real estate trust
beneficiary interests

3,115

3,010

Real estate trust
beneficiary interests

1,882

1,740

Real estate trust
beneficiary interests

1,239

1,130

Real estate trust
beneficiary interests

2,245

2,294

Sumida-ku, Tokyo

Real estate trust
beneficiary interests

1,872

1,970

Real estate trust
beneficiary interests

4,318

4,740

Real estate trust
beneficiary interests

1,049

1,060

R-052

1,370

R-082

Prime Maison Odorikoen

Sapporo-shi,
Hokkaido

R-053

Esty Maison Daizawa

Setagaya-ku,
TokyoReal estate trust
beneficiary interests

2,250

2,300

R-083

Prime Maison Minami 2-jo

Sapporo-shi,
Hokkaido

R-054

Esty Maison Togoshi

Shinagawa-ku,
TokyoReal estate trust
beneficiary interests

1,748

1,820

R-084

Prime Maison
Kamokamogawa

Sapporo-shi,
Hokkaido

R-055

Esty Maison Nishitemma

Osaka-shi, Osaka

Real estate trust
beneficiary interests

1,653

1,690

R-085

Prime Maison Central Park

Fukuoka-shi,
Fukuoka

Shinagawa-ku,
TokyoReal estate trust
beneficiary interests

2,386

Shinjuku-ku,
TokyoReal estate trust
beneficiary interests

1,648

Minato-ku, Tokyo

Real estate trust
beneficiary interests

1,525

R-056
R-057
R-058

28

Book value
at the end of
period(million yen)

Name ofreal estate, etc.

Esty Maison Shirokanedai
Esty Maison Higashishinjuku
Esty Maison Motoazabu

2,560
1,760
1,580

R-086

(Note 9)MAST LIFE Yahiro

R-087

Prime Maison Ebisu

Shibuya-ku,
Tokyo

R-088

Granmast Kanazawa
Nishiizumi

Kanazawa-shi,Ishikawa

29

Usagetype

Property
number(Note 1)

R-089

(Note 2)

Yokkaichi-shi,
MieType of ownershipBook value
at the end of
period(million yen)

Estimatedvalue at theend of period(million yen)

Usage
type

Property
number(Note 1)Name ofreal estate, etc.

Location(Note 2)Type of ownership(Note 3)

Real estate trust
beneficiary interests

805

835

Real estate trust
beneficiary interests

2,724
1,355

Book value
at the end of
period(million yen)

Estimatedvalue at theend of period(million yen)
(Note 3)O-001

Garden City Shinagawa
Gotenyama

Shinagawa-ku,
TokyoReal estate trust
beneficiary interests

70,825

89,100

2,932

O-002

Gotenyama SH Building

Shinagawa-ku,
TokyoReal estate trust
beneficiary interests

50,16462,000

1,410

O-003

Hommachi Minami Garden
City

Osaka-shi,
Osaka

Real estate trust
beneficiary interests

43,20456,400O-004

Hommachi Garden City
(Office building portion)

Osaka-shi,
Osaka

Real estate trust
beneficiary interests

37,17844,800O-005

HK Yodoyabashi Garden
Avenue(Note 12)

Osaka-shi,
Osaka

Real estate trust
beneficiary interests

4,302

6,130

Real estate trust
beneficiary interests
Real estate trust
beneficiary interests

6,246

7,370

28,85530,100-240,777

295,900

Yokohama-shi,
Kanagawa

R-091

MAST LIFE Hino

Hino-shi, Tokyo

Real estate trust
beneficiary interests

R-092

Prime Maison
Yokohama Nihon-odori

Yokohama-shi,
Kanagawa

Real estate trust
beneficiary interests

4,772

5,010

R-093

Kobe Women’s Student
Housing

Kobe-shi, Hyogo

Real estate trust
beneficiary interests

5,631

6,110

R-094

Prime Maison Shibuya

Shibuya-ku,
TokyoReal estate trust
beneficiary interests

2,410

2,610

O-006

Hirokoji Garden Avenue

Nagoya-shi,
Aichi

2,971

3,210

O-007

Akasaka Garden City

Minato-ku,
Tokyo

Officebuilding

Prime Maison Hatsudai

Shibuya-ku,
TokyoReal estate trust
beneficiary interests

R-096

Esty Maison Uemachidai

Osaka-shi,
Osaka

Real estate trust
beneficiary interests

1,084

1,060

Subtotal

R-097

Esty Maison Kobe-sannomiya

Kobe-shi, Hyogo

Real estate trust
beneficiary interests

951

977

H-001

Hommachi Garden City
(Hotel portion)

Osaka-shi,
Osaka

Real estate trust
beneficiary interests

17,061

18,000R-098

Prime Maison
Shirokane-takanawa

Minato-ku,
TokyoReal estate trust
beneficiary interests

4,855

5,260

H-002

The Ritz-Carlton, Kyoto

Kyoto-shi, Kyoto

Real estate trust
beneficiary interests

17,941

18,520R-099

Prime Maison
Ichigayayamabushicho

Shinjuku-ku,
TokyoReal estate trust
beneficiary interests

4,174

4,260

Subtotal--

35,00236,520R-100

Esty Maison Morishita

Sumida-ku,
TokyoReal estate trust
beneficiary interests

645

673

Total

-

-

520,759

593,054

R-101

Prime Maison
Shirokanedai Tower

Shinagawa-ku,
TokyoReal estate trust
beneficiary interests

8,028

9,590

R-102

Prime Maison Otsuka

Toshima-ku,
TokyoReal estate trust
beneficiary interests

3,746

4,330

R-103

Prime Maison Asakusabashi

Taito-ku, Tokyo

Real estate trust
beneficiary interests

1,700

1,960

R-104

Prime Maison Daikanyama

Meguro-ku,
TokyoReal estate trust
beneficiary interests

2,546

2,990

R-105

Prime Maison
Gotenyama West

Shinagawa-ku,
TokyoReal estate trust
beneficiary interests

3,440

4,130

Koto-ku, Tokyo

Real estate trust
beneficiary interests

6,094

6,670

R-095

Esty Maison Toyosu Residence

R-106(Note 10)

R-107

Esty Maison Kokura

Kitakyushu-shi,
Fukuoka

Real estate trust
beneficiary interests

1,094

1,050

R-108

MAST Ijiri

Fukuoka-shi,
Fukuoka

Real estate trust
beneficiary interests

402

420

R-109

Prime Maison
Mitatsunamachi

Minato-ku,
TokyoReal estate trust
beneficiary interests

2,068

2,170

R-110

Prime Maison Hongo

Bunkyo-ku,
TokyoReal estate trust
beneficiary interests

2,634

2,700

R-111

Prime Maison Kuramae

Taito-ku,
Tokyo

Real estate trust
beneficiary interests

2,227

2,270

R-112

Esty Maison Yokohamaaobadai(Note 11)

Yokohama-shi,
Kanagawa

Real estate trust
beneficiary interests

3,062

3,170

-

244,979

260,634

Subtotal

30

Granmast Unomori

Location

Esty Maison
Kohoku Tsunashima

R-090

Residence

Name ofreal estate, etc.

-

Hotel

-

(Note 1) “Property number” is the number assigned by property after classifying the properties owned by SHR by usage type, and theletters R, O and H refer to residence, office building and hotel, respectively. The same shall apply hereinafter.
(Note 2) “Location” is indicated based on the statement in the registry. If there are multiple statements of locations in the registry, either(Note 3)(Note 4)(Note 5)(Note 6)one of them is indicated.
“Estimated value at the end of period” refers to the value stated in each real estate appraisal report (with the end of April as theappraisal date) for each fiscal period ended April, and the value stated in each real estate appraisal report (with the end of Octoberas the appraisal date) or the survey value stated in each real estate survey value report (with the end of October as the surveydate) as a result of value surveys not pursuant to real estate appraisal standards, for each fiscal period ended October, rounded
down to the nearest million yen.
For Esty Maison Gotanda, SHR owns real estate trust beneficiary interests for the compartmentalized ownership interest to partof the exclusively-owned portions of the building and for the accompanying right of site (ratio of right of site: 387,036/426,933 (orapproximately 90.7%)).
For Esty Maison Musashikoyama, SHR owns real estate trust beneficiary interests for the compartmentalized ownership interest
to part of the exclusively-owned portions of the building and for the accompanying right of site (ratio of right of site:
117,678/127,609 (or approximately 92.2%)).

For Esty Maison Sendagi, SHR owns real estate trust beneficiary interests for the compartmentalized ownership interest to partof the exclusively-owned portions of the building and for the accompanying right of site (ratio of right of site: 89,730/103,842 (orapproximately 86.4%)).
(Note 7) For Esty Maison Yotsuyasakamachi, SHR owns real estate trust beneficiary interests for the compartmentalized ownershipinterest to part of the exclusively-owned portions of the building and for the accompanying right of site (ratio of right of site:245,317/329,739 (or approximately 74.4%)).
(Note 8) MAST Hakata is a property on a leased land owned by the Urban Renaissance Agency and for which a general fixed-termleasehold right is established with a lease term of 50 years from December 1, 2002.
(Note 9) Part of the land of Prime Maison Central Park (lot number: 23-32) is a leased land, while the building (store) on the leased landis owned by the lessee.
(Note 10) Esty Maison Toyosu Residence is a property on a leased land owned by the Urban Renaissance Agency and for which a general
fixed-term leasehold right is established with a lease term of 65 years from March 17, 2006.
(Note 11) Esty Maison Yokohama-aobadai is comprised by two buildings, Esty Maison Yokohama-aobadai North and Esty Maison
Yokohama-aobadai South. As the two buildings are located on the same site, SHR manages these buildings as a single property
reffering to collectively as Esty Maison Yokohama-aobadai and the total amount of each building is indicated.
(Note 12) For HK Yodoyabashi Garden Avenue, SHR owns real estate trust beneficiary interests for the compartmentalized ownershipinterest to all of the exclusively-owned portions of the 1st through 6th floors above ground of the building and for theaccompanying right of site (ratio of right of site: 405,901/1,000,000 (or approximately 40.6%)).

31

The following table sets forth the change in status of leasing of real estate, etc. owned by SHR.

Usage
type

Property
numberName ofreal estate, etc.

10th fiscal period
9th fiscal period
From: May 1, 2019
From: Nov. 1, 2018
To: Oct. 31, 2019
To: Apr. 30, 2019
PropertyPropertyAs a
As a
relatedrelated
Total
percentage
percentage
Occupancy
Total
Occupancy
operatingoperatingnumber ofof total number ofof totalrate
rate
revenuerevenuetenants [at the end
property- tenants [at the end
property[during[during[at the end of fiscal
related [at the end of fiscal
relatedfiscalfiscalof fiscal
period]period]operating of fiscal
operatingperiod]period]period]revenuerevenue(%)(%)
period](million(million(Note 1)
(Note 2)
(Note 1)
(Note 2)
(%)
(%)
yen)
yen)
(Note 4)(Note 4)(Note 3)

R-001
R-002
R-003
R-004
R-005
R-006
R-007
R-008
R-009
R-010
R-011
R-012
R-013
R-014
R-015
Residence

R-016
R-017
R-018
R-019
R-020
R-021
R-022
R-023
R-024
R-025
R-026
R-027
R-028
R-029

32

Esty Maison Ginza
Esty Maison
Azabunagasaka
Esty Maison
Ebisu II
Esty Maison Ebisu
Esty Maison
Kanda
Esty Maison
Kitashinjuku
Esty Maison
Asakusakomagata
Esty Maison
Kawasaki
Esty Maison
Yokohama (Note 5)
Esty Maison
KameidoEsty Maison
MeguroEsty Maison
SugamoEsty Maison
Kyobashi
Esty Maison
Hakuraku
Esty Maison
Minamihorie
Esty Maison
GotandaEsty Maison
Oisendaizaka
Esty Maison
ShinagawaSeasideEsty Maison
Minamiazabu
Esty Maison
Tsukamoto
Esty Maison
Kawasaki II
Esty Maison
Azabujuban
Esty Maison
Itabashihoncho
Esty Maison
Oizumigakuen
Esty Maison
Higashishinagawa
Esty Maison
Itabashikuyakush
omae
Esty Maison
Musashikoyama
Esty Maison
Sendagi
Esty Maison
Yotsuyasakamachi

Usage
type

Property
numberName ofreal estate, etc.

10th fiscal period
9th fiscal period
From: May 1, 2019
From: Nov. 1, 2018
To: Oct. 31, 2019
To: Apr. 30, 2019
PropertyPropertyAs a
As a
relatedrelated
Total
Occupancy
Total
Occupancy
percentage
percentage
operatingoperatingnumber ofrate
rate
of total number ofof total
revenuerevenuetenants [at the end
property- tenants [at the end
property[during[during[at the end of fiscal
related [at the end of fiscal
relatedfiscalfiscalof fiscal
period]period]operating of fiscal
operatingperiod]period]period](%)(%)
revenuerevenueperiod](million(million(Note 1)
(Note 2)
(Note 1)
(Note 2)
(%)
(%)
yen)
yen)
(Note 4)(Note 4)(Note 3)R-030

(Note 3)

Esty Maison
Hakatahigashi
Esty Maison
Kamigofuku
Esty Maison
Sangenjaya
Prime Maison
Musashinonomori
Prime Maison
Higashisakura
Prime Maison
Kayabakoen
Esty Maison
Sangenjaya II
Esty Maison
Itabashi C6(Note 3)

1

98.9

85

0.7

1

99.3

85

0.6

1

97.0

29

0.2

1

97.0

29

0.2

1

97.2

24

0.2

1

94.4

24

0.2

1

95.8

62

0.5

1

93.2

62

0.5

1

89.7

52

0.4

1

98.7

53

0.4

1

96.3

29

0.2

1

88.6

29

0.2

1

100.0

24

0.2

1

97.1

24

0.2

1

97.0

80

0.6

1

98.2

80

0.6

1

100.0

93

0.8

1

100.0

93

0.7

1

97.2

37

0.3

1

98.6

36

0.3

1

95.1

55

0.5

1

96.1

54

0.4

1

96.5

65

0.5

1

98.5

65

0.5

1

100.0

30

0.2

1

91.8

28

0.2

1

96.6

23

0.2

1

100.0

23

0.2

1

100.0

69

0.6

1

100.0

70

0.5

1

98.7

58

0.5

1

100.0

58

0.4

1

98.9

90

0.7

1

98.0

91

0.7

1

98.7

174

1.4

1

97.9

172

1.2

1

88.8

34

0.3

1

85.3

31

0.2

1

100.0

28

0.2

1

100.0

29

0.2

1

100.0

51

0.4

1

100.0

51

0.4

1

100.0

46

0.4

1

100.0

46

0.3

1

97.3

38

0.3

1

100.0

39

0.3

1

95.4

60

0.5

1

98.8

61

0.4

1

97.9

50

0.4

1

99.0

50

0.4

1

96.9

51

0.4

1

95.6

51

0.4

1

98.8

66

0.5

1

100.0

69

0.5

1

100.0

47

0.4

1

100.0

47

0.3

1

99.1

179

1.4

1

96.8

176

1.3

1

96.4

50

0.4

1

95.5

51

0.4

1

89.2

58

0.5

1

95.9

58

0.4

1

100.0

23

0.2

1

96.1

22

0.2

1

95.6

46

0.4

1

97.4

46

0.3

1

97.7

47

0.4

1

95.2

47

0.3

1

97.7

67

0.5

1

97.7

65

0.5

1

97.5

76

0.6

1

98.7

77

0.6

1

100.0

65

0.5

―

－

13

0.1

1

99.0

53

0.4

1

97.9

54

0.4

1

100.0

31

0.3

1

100.0

32

0.2

1

90.1

49

0.4

1

100.0

49

0.4

1

94.4

89

0.7

1

98.2

89

0.6

1

93.0

30

0.2

1

96.5

30

0.2

1

100.0

34

0.3

1

96.8

33

0.2

1

98.9

95

0.8

1

92.0

92

0.7

1

97.2

77

0.6

1

96.8

77

0.6

1

94.9

64

0.5

1

98.3

64

0.5

R-048

1

92.3

34

0.3

1

94.2

34

0.2

R-049

1

99.0

38

0.3

1

99.0

39

0.3

R-050

1

93.0

63

0.5

1

99.1

61

0.4

R-051

1

97.4

67

0.5

1

100.0

67

0.5

R-052

1

100.0

29

0.2

1

98.4

29

0.2

R-053

1

96.6

27

0.2

1

98.3

26

0.2

R-054

1

93.8

70

0.6

1

98.5

72

0.5

R-055

1

100.0

76

0.6

1

97.6

77

0.6

1

94.0

31

0.3

1

100.0

31

0.2

1

100.0

22

0.2

1

95.8

22

0.2

R-058

Esty Maison
Motoazabu

1

100.0

35

0.3

1

100.0

40

0.3

1

100.0

62

0.5

1

98.3

59

0.4

R-059

Esty Maison
Toritsudaigaku

1

100.0

23

0.2

1

100.0

24

0.2

R-031
R-032
R-033
R-034
R-035
R-036
R-037
R-038
R-039
R-040
R-041
R-042
R-043
R-044
Residence

R-045
R-046
R-047

R-056
R-057

MAST Hakata
Esty Maison
Kinshicho
Esty Maison
Musashikoganei
Prime Maison
GokisoPrime Maison
Yuhigaoka
Prime Maison
Kitatanabe
Prime Maison
Momochihama
Esty Maison
Akihabara
Esty Maison
SasazukaPrime Maison
Ginza East
Prime Maison
TakamiPrime Maison
Yadaminami
Prime Maison
TerihaEsty Maison
Higashishirakabe
Esty Maison
Sengoku
Esty Maison
Daizawa
Esty Maison
Togoshi
Esty Maison
Nishitemma
Esty Maison
Shirokanedai
Esty Maison
Higashishinjuku

33

Usagetype

Property
numberName ofreal estate, etc.

10th fiscal period
9th fiscal period
From: Nov. 1, 2018
From: May 1, 2019
To: Oct. 31, 2019
To: Apr. 30, 2019
PropertyPropertyAs a
As a
relatedrelated
Total
Occupancy
percentage
Total
Occupancy
percentage
operatingoperatingnumber ofrate
rate
of total number ofof total
revenuerevenuetenants [at the end
property- tenants [at the end
property[during[during[at the end of fiscal
related [at the end of fiscal
relatedfiscalfiscalperiod]of fiscal
operating of fiscal
period]operatingperiod]period](%)
revenueperiod]revenueperiod](%)(million(million(Note 1)
(Note 2)
(Note 1)
(Note 2)
(%)
(%)
yen)
yen)
(Note 4)(Note 4)(Note 3)

R-060
R-061
R-062
R-063
R-064
R-065
R-066
R-067
R-068
R-069
R-070
R-071
R-072
R-073

Esty Maison Oji
Prime Maison
WasedaPrime Maison
Hatchobori
Prime Maison
JimbochoPrime Maison
Gotenyama East
MAST LIFE
Akihabara

R-074

Esty Maison Aoi

Residence R-075

Esty Maison
YakuinEsty Maison
Kinshicho II
Esty Maison
Ojima
Prime Maison
Fujimidai
Esty Maison
TsurumaiPrime Maison
Morishita
Prime Maison
ShinagawaPrime Maison
Odorikoen
Prime Maison
Minami 2-joPrime Maison
Kamokamogawa
Prime Maison
Central Park
MAST LIFE
YahiroPrime Maison
Ebisu
Granmast
Kanazawa
Nishiizumi
Granmast
Unomori

R-076
R-077
R-078
R-079
R-080
R-081
R-082
R-083
R-084
R-085
R-086
R-087
R-088
R-089

34

Esty Maison
Musashikoyama II
Esty Maison
NakanoEsty Maison
Shinnakano
Esty Maison
Nakanofujimicho
Esty Maison
Tetsugakudo
Esty Maison
KoenjiEsty Maison
Oshiage
Esty Maison
Akabane

Usage
type

Property
numberName ofreal estate, etc.

(Note 3)10th fiscal period
9th fiscal period
From: May 1, 2019
From: Nov. 1, 2018
To: Oct. 31, 2019
To: Apr. 30, 2019
PropertyPropertyAs a
As a
relatedrelated
Total
Occupancy
Total
Occupancy
percentage
percentage
operatingoperatingnumber ofrate
rate
of total number ofof total
revenuerevenuetenants [at the end
property- tenants [at the end
property[during[during[at the end of fiscal
related [at the end of fiscal
relatedfiscalfiscalof fiscal
period]period]operating of fiscal
operatingperiod]period]period](%)(%)
revenuerevenueperiod](million(million(Note 1)
(Note 2)
(Note 1)
(Note 2)
(%)
(%)
yen)
yen)
(Note 4)(Note 4)(Note 3)

1

97.4

29

0.2

1

97.3

31

0.2

1

96.8

52

0.4

1

98.1

52

0.4

1

92.9

27

0.2

1

100.0

28

0.2

1

92.1

29

0.2

1

100.0

28

0.2

1

91.6

33

0.3

1

92.1

34

0.2

1

96.4

33

0.3

1

100.0

34

0.2

1

97.5

72

0.6

1

95.0

70

0.5

1

94.6

97

0.8

1

100.0

95

0.7

1

100.0

50

0.4

1

95.5

49

0.4

1

94.5

44

0.4

1

93.0

45

0.3

1

96.9

39

0.3

1

100.0

39

0.3

1

100.0

52

0.4

1

98.6

53

0.4

1

100.0

84

0.7

1

100.0

83

0.6

1

100.0

15

0.1

1

100.0

15

0.1

1

85.7

69

0.6

1

91.2

67

0.5

1

96.3

76

0.6

1

97.5

74

0.5

1

95.7

223

1.8

1

98.2

224

1.6

1

97.7

244

2.0

1

98.3

246

1.8

1

94.1

69

0.6

1

92.4

68

0.5

1

100.0

155

1.3

1

100.0

155

1.1

1

97.7

57

0.5

1

97.7

57

0.4

R-108

1

98.9

56

0.5

1

98.2

57

0.4

R-109

1

89.2

113

0.9

1

89.0

112

0.8

R-110

1

100.0

71

0.6

1

97.5

72

0.5

R-111

1

88.8

46

0.4

1

95.2

44

0.3

1

93.1

87

0.7

1

98.8

83

0.6

1

100.0

56

0.5

1

100.0

56

0.4

1

96.5

111

0.9

1

98.3

110

0.8

1

100.0

41

0.3

1

100.0

41

0.3

1

100.0

26

0.2

1

100.0

26

0.2

R-090
R-091
R-092
R-093
R-094
R-095
R-096
R-097
R-098
R-099
R-100
Residence R-101
R-102
R-103
R-104
R-105
R-106
R-107

R-112
Subtotal

Esty Maison
KohokuTsunashima
MAST LIFE Hino
Prime Maison
Yokohama Nihonodori
Kobe Women’sStudent Housing
Prime Maison
ShibuyaPrime Maison
Hatsudai
Esty Maison
Uemachidai
Esty Maison Kobesannomiya
Prime Maison
Shirokanetakanawa
Prime Maison
Ichigayayamabush
icho
Esty Maison
Morishita
Prime Maison
Shirokanedai
Tower
Prime Maison
OtsukaPrime Maison
Asakusabashi
Prime Maison
Daikanyama
Prime Maison
Gotenyama West
Esty Maison
Toyosu Residence
Esty Maison
KokuraMAST Ijiri
Prime Maison
Mitatsunamachi
Prime Maison
Hongo
Prime Maison
Kuramae
Esty Maison
Yokohamaaobadai(Note 3)

1

100.0

78

0.6

1

100.0

78

0.6

1

100.0

48

0.4

1

100.0

48

0.4

1

97.7

153

1.2

1

99.0

137

1.0

1

100.0

223

1.8

1

100.0

222

1.6

1

96.2

65

0.5

1

100.0

64

0.5

1

92.9

82

0.7

1

98.3

80

0.6

1

100.0

33

0.3

1

92.1

32

0.2

1

100.0

31

0.3

1

98.2

31

0.2

1

96.3

122

1.0

1

95.7

127

0.9

1

97.9

110

0.9

1

96.7

112

0.8

1

95.1

21

0.2

1

100.0

18

0.1

1

94.0

238

1.9

1

96.2

236

1.7

1

96.1

115

0.9

1

95.7

118

0.9

1

94.7

56

0.5

1

97.5

51

0.4

1

69.3

65

0.5

1

84.7

64

0.5

1

96.3

118

1.0

1

96.8

115

0.8

1

95.4

467

3.8

1

96.2

469

3.4

1

86.4

26

0.2

1

90.3

32

0.2

1

100.0

6

0.1

1

100.0

13

0.1

―

―

―

―

1

88.9

39

0.3

―

―

―

―

1

91.7

51

0.4

―

―

―

―

1

96.8

43

0.3

―

―

―

―

1

100.0

39

0.3

12

96.7

7,525

60.8

12

97.5

7,624

54.9

35

Usagetype

Property
numberName ofreal estate, etc.

10th fiscal period
9th fiscal period
From: May 1, 2019
From: Nov. 1, 2018
To: Oct. 31, 2019
To: Apr. 30, 2019
PropertyPropertyAs a
As a
relatedrelated
Total
Occupancy
Total
Occupancy
percentage
percentage
operatingoperatingnumber ofrate
rate
of total number ofof total
revenuerevenuetenants [at the end
property- tenants [at the end
property[during[during[at the end of fiscal
related [at the end of fiscal
relatedfiscalfiscalof fiscal
period]period]operating of fiscal
operatingperiod]period]period](%)(%)
revenuerevenueperiod](million(million(Note 1)
(Note 2)
(Note 1)
(Note 2)
(%)
(%)
yen)
yen)
(Note 4)(Note 4)(Note 3)

O-001
O-002
O-003
Officebuilding

O-004

Garden City
Shinagawa
Gotenyama
Gotenyama SH
Building
HommachiMinami Garden
City
Hommachi Garden
City(Office building
portion)HK Yodoyabashi
Garden Avenue
Hirokoji Garden
AvenueAkasaka Garden
City(Note 5)

36

1

99.9

1,584

11.4

1

100.0

1,088

8.8

1

100.0

1,088

7.8

1

100.0

588

4.8

1

100.0

1,044

7.5

1

100.0

905

7.3

1

100.0

903

6.5

1

100.0

150

1.1

1

100.0

210

1.7

1

100.0

216

1.6

―

―

―

―

1

98.4

509

3.7

2

100.0

4,260

34.4

2

99.8

5,497

39.6

1

100.0

406

3.3

1

100.0

404

2.9

1

100.0

178

1.4

1

100.0

352

2.5

Subtotal

2

100.0

584

4.7

2

100.0

757

5.5

Total

15

97.5

12,369

100.0

15

98.1

13,879

100.0

H-001

(Note 4)

10.7

1.2

Subtotal(Note 3)

1,318

148

O-007

(Note 2)

100.0

100.0

O-006

(Note 1)

1

1

O-005

Hotel

(Note 3)

H-002

Hommachi Garden
City(Hotel portion)
The Ritz-Carlton,
Kyoto“Total number of tenants” refers to the sum total of the number of tenants under, and indicated in, the respective lease agreements
for each property that are valid as of the end of each fiscal period (or, if a master lease agreement that is valid as of the end of eachfiscal period has been concluded for the property, the number of lessees under the master lease agreement). In the “Subtotal” and“Total” columns, however, a tenant that leases spaces in multiple properties is counted as one. Furthermore, of the office buildings,

the total number of end tenants for HK Yodoyabashi Garden Avenue and Hirokoji Garden Avenue where pass-through type master
lease agreements have been concluded is 7 and 8, respectively, both as of the end of the 9th fiscal period (from Nov. 1, 2018 to Apr.
30, 2019) and as of the end of the 10th fiscal period (from May 1, 2019 to Oct. 31, 2019). In addition, the total number of end tenantsfor Garden City Shinagawa Gotenyama (additional acquisition portion), Hommachi Minami Garden City (additional acquisition
portion) and Akasaka Garden City as of the end of the 10th fiscal period (from May 1, 2019 to Oct. 31, 2019) is 10, 13 and 18,
respectively.
“Occupancy rate” refers to the ratio of leased area to leasable area of each property as of the end of each fiscal period, rounded to
the nearest first decimal place. The figures indicated in the “Subtotal” columns are the ratio of the subtotal of leased area of each
property classified by usage type to the subtotal of leasable area of each property classified by usage type, and the figure indicatedin the “Total” column is the ratio of the sum total of leased area of each property to the sum total of leasable area of each property,
as the occupancy rate of the entire portfolio. The both figures have been rounded to the nearest first decimal place.
“Property-related operating revenue [during fiscal period]” indicates the property-related operating revenue of each property foreach fiscal period, rounded down to the nearest million yen.
Figures under the heading “As a percentage of total property-related operating revenue” indicate the ratio of property-related
operating revenue of each property for each fiscal period or the subtotal of property-related operating revenue of each property
classified by usage type for each fiscal period to total property-related operating revenue of each property for each fiscal period,
rounded to the nearest first decimal place.
SHR disposed Esty Maison Yokohama on September 27, 2019. Accordingly, “Property-related operating revenue [during fiscal
period]” and “As a percentage of total property-related operating revenue” for the property in the above table indicate the figures
for the duration SHR owned it.

4.

Details of Renewable Energy Power Generation Facility, etc.
Not applicable.

5.

Details of Right to Operate Public Facility, etc.
Not applicable.

6.

Details of Investment Securities
Not applicable.

7.

Table of Status of Contract Amount, etc. and Fair Value of Specified Transactions
The following table sets forth the status of contract amount, etc. and fair value of specified transactions at SHR
as of the end of the fiscal period under review.
Category

Transaction other thanmarket transaction

Transaction other thanmarket transaction

TypeInterest rate swap transaction(Under which floating interest
rates are receivable and fixedinterest rates are payable)
Interest rate swap transaction(Under which floating interest
rates are receivable and fixedinterest rates are payable)
Total

Contract amount, etc.
Fair value(thousand yen)(Note 1)(thousand yen)Amount(Note 2)due after 1 year
55,572,500

43,280,000(475,678)

98,081,000

84,081,000－(Note 3)

153,653,500

127,361,000

ሺ475,678)(Note 1) The contract amount, etc. of interest rate swap transactions is based on notional principal amounts.
(Note 2) The fair value was calculated by the counterparty of the relevant transaction based on the actual market interest rate, etc.
(Note 3) The fair value is omitted because the transaction meets the criteria for special accounting under the Accounting Standards for
Financial Instruments.

8.

Status of Other Assets
Trust beneficiary interests with real estate as the main assets in trust are stated in “3. Details of Assets (Real
Estate, etc.) in the Portfolio” above. As of the end of the fiscal period under review, there are no specified assets
other than real estate, etc., asset-backed securities, etc. and infrastructure assets, etc. in the portfolio.

9.

Status of Holding of Assets by Country and Region
As of the end of the fiscal period under review, there are no portfolio real estate, etc. in any other country or region
besides Japan.

37

Capital expenditures for property

Condition of expenses and debts

1.

1.

Schedule of Capital Expenditures
The main capital expenditure amounts accompanying renovation work, etc. currently planned for properties
owned by SHR, are as follows. However, a portion of such amounts may ultimately be classified as expenses in thecourse of the accounting process.
Name of real estate, etc.
(location)

MAST Hakata(Hakataekimae, Hakata-ku,
Fukuoka-shi, Fukuoka)
Prime Maison Fujimidai(Fujimidai, Chikusa-ku, Nagoyashi, Aichi)
Esty Maison Kyobashi(Higashinoda-machi, Miyakojimaku, Osaka-shi, Osaka)
Esty Maison Oisendaizaka(Higashi-Oi, Shinagawa-ku, Tokyo)
Esty Maison Akihabara(Ueno, Taito-ku, Tokyo)
Hommachi Garden City
(Office building portion)(Hommachi, Chuo-ku, Osaka-shi,
Osaka)
Hommachi Garden City
(Hotel portion)(Hommachi, Chuo-ku, Osaka-shi,
Osaka)(Note)

PurposeLarge-scale repairs
Large-scale repairs
Large-scale repairs
Large-scale repairs
Large-scale repairs
Upgrading of central
monitoring devices
and peripheral
equipment
Upgrading of central
monitoring devices
and peripheral
equipment

Scheduled period
From: February 2020
To: October 2020
From: May 2020
To: October 2020
From: November 2019
To: March 2020
From: October 2019
To: March 2020
From: November 2019
To: March 2020
From: April 2020
To: October 2020
From: April 2020
To: October 2020

Scheduled amount (million yen)(Note)
Payment for
Total
Amountthe fiscal
amount period under already paid
review
249

―

―

134

―

―

130

―

―

95

―

―

58

―

―

28

―

―

25

―

―

Details of Expenses Pertaining to Management, etc.

Item
Asset management fee(Note)(Unit: thousand yen)

9th fiscal period
From: Nov. 1, 2018
To: Apr. 30, 2019

10th fiscal period
From: May 1, 2019
To: Oct. 31, 2019
826,100

1,036,070

Asset custody fee

9,083

9,344

Administrative service fees

42,953

43,689Directors’ compensations

3,600

3,600

217,096239,715

1,098,833

1,332,420

Other expenses
Total(Note)In addition to the amounts shown above, the asset management fees contain 3,120 thousand yen as management fees forproperty acquisition, capitalized in the book value of real estate, etc., for the 9th fiscal period and 9,000 thousand yen as
management fees for property disposition, recorded as other disposition-related expenses, for the 10th fiscal period.

“Scheduled amount” refers to the amount arrived at by multiplying (i) the full amount required for the work by (ii) the ratio of thecompartmentalized ownership interest or quasi co-ownership interest owned by SHR, when SHR owns compartmentalized ownershipinterest in the property or quasi co-ownership interest in the real estate trust beneficiary interests for the property (in the event SHR
owns a quasi co-ownership interest related to trust beneficiary interest whose trust estate is composed of compartmentalized

ownership interest, the total cost multiplied by the ratio of compartmentalized ownership interest and then multiplied by the quasi
co-ownership interest ratio) that is subject to the relevant work.

2.

Capital Expenditures During Period
An overview of capital expenditures conducted by SHR for its properties during the fiscal period under review is
as set forth in the following table. Total capital expenditures during the fiscal period under review was 826 million
yen and, together with 295 million yen of repair expenses charged to expenses in the fiscal period under review,
work amounting to 1,121 million yen was implemented.

Name of real estate, etc.
Purpose(location)
Esty Maison Yakuin
Large-scale repair(Hirao, Chuo-ku, Fukuoka-shi, Fukuoka)
Esty Maison Higashishirakabe
Large-scale repair(Yoshino, Higashi-ku, Nagoya-shi, Aichi)
Esty Maison Shinagawa Seaside
Large-scale repair(Higashi-Shinagawa, Shinagawa-ku, Tokyo)
Hommachi Garden City (Office building portion) New installation of coil units(Hommachi, Chuo-ku, Osaka-shi, Osaka)
for ice heat storage system
Hommachi Garden City (Hotel portion)
New installation of coil units
for ice heat storage system(Hommachi, Chuo-ku, Osaka-shi, Osaka)
Other capital expenditures
Total

3.

PeriodFrom: February 2019
To: October 2019
From: February 2019
To: June 2019
From: March 2019
To: October 2019
From: May 2019
To: June 2019
From: May 2019
To: June 2019

Payment amount(million yen)
226
121
114
46
42
274
826

Cash Reserves for Long-Term Repair Plans
SHR had no cash reserved for long-term repair plans as of the end of the fiscal period under review(Note).

(Note) “Reserve fund for repair,” which has been reserved by management associations at the properties owned by SHR in order tosecure expenses for repair works expected in the future, is not included in the cash reserves.

38

39

Condition of investment transactions
1.

3. Investigation into Value, etc. of Specified Assets(1) Real Estate, etc. (Appraisal)

Status, etc. of Sale and Purchase of Real Estate, etc., Asset-Backed Securities, etc., Infrastructure Assets, etc. andInfrastructure-Related Assets
Acquisition
Name of real estate, etc.

Acquisition date

Disposition

Acquisition
price(million yen)

Disposition date

(Note 1)Gain (Loss)
Disposition
priceBook value
on sale(million yen) (million yen) (million yen)
(Not 1)(Note 2)

Prime Maison Mitatsunamachi

June 10, 2019

2,040

―

―

―

―

Prime Maison Hongo

June 10, 2019

2,600

―

―

―

―

Prime Maison Kuramae

June 10, 2019

2,190

―

―

―

―

Esty Maison Yokohama-aobadai
North

June 10, 2019

1,360

―

―

―

―

Garden City Shinagawa Gotenyama(additional acquisition portion)

June 10, 201912,350――――

Hommachi Minami Garden City
(additional acquisition portion)

June 10, 2019

20,900――――Akasaka Garden City

June 10, 201928,700――――Esty Maison Yokohama-aobadai
South
Esty Maison Yokohama
Total

September 27, 2019

1,660

―
―

―

― September 27, 2019
71,800―Acquisition
Transaction
Name of real estate, etc.
or disposition
date

―

―

―

3,000

2,073

804

3,000

2,073

804

(Note 1) “Acquisition price” and “Disposition price” indicate the transaction prices shown in the sales agreements for respective owned
properties (excluding consumption tax, local consumption tax and miscellaneous expenses including transaction fees), rounded down

Acquisition

2.

Status, etc. in respect of Sale and Purchase of Other Assets
Not applicable.

Main assets other than the abovementioned real estate, etc., asset-backed securities, etc., infrastructure assets,etc. and infrastructure-related assets are essentially bank deposits or bank deposits within assets in trust.

Appraiser

Date ofappraisal

Prime Maison
Mitatsunamachi

June 10,
2019Real estate trust
beneficiaryinterests

2,040

2,160

Chuo Real EstateAppraisal Co.,Ltd.

April 1,2019

Prime Maison Hongo

June 10,
2019Real estate trust
beneficiaryinterests

2,600

2,700

Chuo Real EstateAppraisal Co.,Ltd.

April 1,2019

Prime Maison Kuramae

June 10,
2019Real estate trust
beneficiaryinterests

2,190

2,260

Chuo Real EstateAppraisal Co.,Ltd.

April 1,
2019

Esty Maison Yokohamaaobadai North

June 10,
2019Real estate trust
beneficiaryinterests

1,360

1,460

Chuo Real EstateAppraisal Co.,Ltd.

April 1,
2019

Garden City Shinagawa
Gotenyama(additional acquisition
portion)June 10,
2019Real estate trust
beneficiaryinterests

12,35015,000Daiwa Real
Estate Appraisal
Co., Ltd.

April 1,
2019

Hommachi Minami
Garden City (additional
acquisition portion)

June 10,
2019Real estate trust
beneficiaryinterests

20,90023,800Richi Appraisal
Institute

April 1,
2019

June 10,
2019Real estate trust
beneficiaryinterests

28,70029,900Chuo Real EstateAppraisal Co.,Ltd.

April 1,
2019

Esty Maison Yokohama- September 27,
aobadai South2019

Real estate trust
beneficiaryinterests

1,660

1,710

Chuo Real Estate
September 1,
Appraisal Co.,
2019
Ltd.

September 27,
2019

Real estate trust
beneficiaryinterests

3,000

2,070

Daiwa Real
Estate Appraisal
Co., Ltd.

Akasaka Garden City
(Note 2)to the nearest million yen. The same shall apply hereinafter.
(Note 2) “Gain (Loss) on sale” indicates the amount calculated by subtracting book value and transaction fees from disposition price.

Type of asset

Acquisition
Appraisal
price orvalue
disposition(millionpriceyen)(million(Note 1)yen)

Disposition Esty Maison Yokohama

April 30,
2019

(Note 1) The appraisal value stated above is derived by applying the “Real Estate Appraisal Standards; Particulars; Chapter 3: Appraisal on
Value of Real Estate Subject to Securitization.”(Note 2) “Appraisal value” of Akasaka Garden City is indicated based on the ratio of quasi co-ownership interest SHR owns.

(2) Others
Concerning transactions requiring investigations into the value, etc. of specified assets pursuant to Article 201,
Paragraph 2 of the Investment Trusts Act, Akasaka Audit LLC has conducted the investigations pursuant toPractical Guidelines for Specialized Operations 4460 “Practical Guidelines for Agreed-Upon Procedures

Pertaining to Investigation into the Value, etc. of Specified Assets of Investment Trusts and Investment
Corporations” published by The Japanese Institute of Certified Public Accountants, and SHR has been notified of
the results of the investigations.
The transactions subject to investigations in the fiscal period under review were two interest rate swap
transactions. For the transactions, investigations into the name of the counterparty to the transaction, the typeof financial instrument or financial indicator involved, the transaction period, other matters concerning thecontent of the over-the-counter transaction of derivatives, etc. have been entrusted.

40

41

Financial Section (Audited)

4. Status of Transactions with Interested Persons, etc.(Note 1)(1) Status of Transactions
Amount of purchase and sale, etc.

Category

Amount of purchase, etc.

Total amountAmount of sale, etc.

71,800 million yen

3,000 million yen

Breakdown of status of transactions with interested persons, etc.
Sekisui House, Ltd.

71,800 million yen [100.0%]― million yen [―%]

(2) Amount of Commission Fee, etc.

Category

Total amount Breakdown of transactions with interested persons, etc.
of commission
Amount paidfee, etc. (A)
Payee
(B)
(thousand yen)(thousand yen)Management fee(Note 2)844,252

As a percentage of
total amount (B/A)(%)

Sekiwa Real Estate, Ltd.

412,377

48.8

Sekiwa Real Estate
Chubu, Ltd.

55,948

6.6

Sekiwa Kanri Kansai Co.,Ltd.

40,284

4.8

Sekisui House, Ltd.

31,759

3.8

Sekiwa Real Estate
Kyushu, Ltd.

18,958

2.2

Sekiwa Real Estate
Kansai, Ltd.

5,761

0.7

240

0.0

SH Hotel Systems Ltd.

(Note 1) “Interested persons, etc.” refers to interested persons, etc. of the Asset Management Company with which SHR has executed an asset
management entrustment agreement as provided in Article 123 of the Order for Enforcement of the Act on Investment Trusts andInvestment Corporations (Order for Enforcement No. 480 of 2000, as amended) and Article 26, Item 27 of the Rules on Investment
Reports, etc. of Investment Trusts and Investment Corporations of The Investment Trusts Association, Japan.
(Note 2) “Management fee” has been rounded down to the nearest thousand yen.
(Note 3) Other than the commission fee, etc. indicated above, the amounts paid to interested persons, etc. for repair works, etc. are as follows.
The figures have been rounded down to the nearest thousand yen.

5.

42

Sekisui House, Ltd.

242,911 thousand yen

Sekiwa Real Estate, Ltd.

167,932 thousand yen

Sekiwa Real Estate Chubu, Ltd.

44,488 thousand yen

Sekiwa Kanri Kansai Co., Ltd.

27,133 thousand yen

Sekiwa Real Estate Kyushu, Ltd.

24,386 thousand yen

Sekiwa Real Estate Kansai, Ltd.

4,707 thousand yen

Status, etc. of Transactions with the Asset Management Company Pertaining to Business Operations ofContents
Financial Statements
Balance Sheet

44

Statement of Income and Retained Earnings

46

Statement of Changes in Net Assets

47

Statement of Cash Distributions

49

Statement of Cash Flows

50

Notes to Financial Statements

51

Supplementary Schedules

66

Independent Auditor’s Report

76

Concurrent Business Engaged in by the Asset Management Company
There are no applicable transactions as of the end of the fiscal period under review, as SHAM does not concurrently
engage in any type I financial instruments or type II financial instruments business (as defined in the Financial
Instruments and Exchange Act (Act No. 25 of 1948, as amended)), building lots and buildings transaction business,or specified joint real estate ventures.

43

(Thousands of yen)

9th Fiscal Period

1. Financial Statements(1) Balance Sheet(Thousands of yen)

9th Fiscal Period(As of April 30, 2019)

AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Other
Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Vehicles in trust
Accumulated depreciation
Vehicles in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Total property, plant and equipment
Intangible assets
Leasehold rights in trust
Other
Total intangible assets
Investments and other assets
Lease and guarantee deposits
Long-term prepaid expenses
Other
Total investments and other assets
Total non-current assets
Deferred assets
Investment corporation bond issuance costs
Investment unit issuance costs
Total deferred assets
Total assets

44

10th Fiscal Period(As of October 31, 2019)

7,657,644
13,301,529
157,133
168,285
212,703(973)
21,496,324

7,551,248
17,134,730
196,322
198,915
153,267(778)
25,233,705

158,892,235(8,236,920)
150,655,315
1,500,004(121,928)
1,378,076
2,153,877(91,694)
2,062,182－－－
117,224(10,983)
106,240
295,079,081
98,534449,379,431

172,504,565(10,454,347)
162,050,217
1,564,478(152,627)
1,411,851
2,193,249(133,771)
2,059,477
153
(19)
134
214,116(24,980)
189,135
352,572,801
5,494
518,289,113

2,501,173
6,894
2,508,068

2,475,748
5,442
2,481,190

790,700
396,558
373,282
1,560,540
453,448,040

790,700
498,514403,137
1,692,352
522,462,655

26,285
14,75541,040474,985,405

65,615
227,653
293,268
547,989,630

Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable
Current portion of investment corporation bonds
Current portion of long-term loans payable
Accounts payable – otherAccrued expenses
Income taxes payable
Advances received
Derivatives liabilities
Other
Total current liabilities
Non-current liabilities
Investment corporation bonds
Long-term loans payable
Tenant leasehold and security deposits in trust
Derivatives liabilities
Other
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
SurplusCapital surplus
Voluntary reserve
Reserve for temporary difference adjustments
Total voluntary reserve
Unappropriated retained earnings
Total surplus
Total unitholders’ equity
Valuation and translation adjustments
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets (Note 4)
Total liabilities and net assets

10th Fiscal Period(As of April 30, 2019)(As of October 31, 2019)751,690
6,500,000
2,000,000
20,792,500
986,348
189,758590
309,077
27,894
189,700
31,747,560

974,618
13,000,000
2,000,000
27,892,500
1,205,134
196,924588
431,905
50,959269,336
46,021,967

11,000,000
174,640,000
11,148,044
515,034
239,015
197,542,094
229,289,654

17,500,000
183,850,000
13,836,639
424,718
163,835
215,775,192
261,797,160

110,189,294

149,210,081

128,598,415

128,598,415

1,556,827
1,556,827
5,894,142
136,049,385
246,238,679

1,454,196
1,454,196
7,405,454
137,458,066
286,668,148(542,929)(542,929)
245,695,750
474,985,405(475,678)(475,678)
286,192,469
547,989,630

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

45

(2) Statement of Income and Retained Earnings(Thousands of yen)

9th Fiscal Period

10th Fiscal Period

to April 30, 2019)

to October 31, 2019)(From November 1, 2018

Operating revenue
Rent revenue – real estate (Note 5)
Other lease business revenue (Note 5)
Gain on sale of real estate properties (Note 5)
Total operating revenue
Operating expenses
Expenses related to rent business (Note 5)
Asset management fees
Asset custody fees
Administrative service fees
Directors’ compensation
Provision of allowance for doubtful accounts
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Reversal of distribution payable
Refunded consumption taxes
Other
Total non-operating income
Non-operating expenses
Interest expenses
Interest expenses on investment corporation bonds
Borrowing related expenses
Amortization of investment unit issuance costs
Amortization of investment corporation bond issuance costs
Other
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes – current
Total income taxes
Net income
Unappropriated retained earnings
The accompanying notes are an integral part of these financial statements.

46(3) Statement of Changes in Net Assets
9th Fiscal Period (From November 1, 2018 to April 30, 2019)(Thousands of yen)

(From May 1, 201912,085,814
284,165－
12,369,980

13,539,686
339,644804,126
14,683,458

4,643,232
826,100
9,083
42,9533,600
483
216,612
5,742,066
6,627,913

5,124,966
1,036,070
9,344
43,6893,600
226239,489
6,457,387
8,226,071

111
1,135
30,680－31,927106
1,415
49,005684
51,211

607,995
48,75589,904
14,3842,919
1,135
765,094
5,894,747
5,894,747
605
605
5,894,142
5,894,142

672,439
53,44893,43642,905
5,212
3,779
871,223
7,406,059
7,406,059
605
605
7,405,454
7,405,454

Unitholders’ equity
Surplus
Voluntary reserve

Unitholders’capitalBalance at beginning of period

110,189,294

Reserve fortemporarydifference
adjustments

Capitalsurplus128,598,415

Unappropriatedretainedearnings

Total
voluntary
reserve－－

7,403,117

1,556,827

1,556,827(1,556,827)

Changes of items during period
Reserve for temporary difference
adjustments
Distribution from surplus(5,846,289)

Net income

5,894,142

Net changes of items other thanunitholders’ equity
Total changes of items during period
Balance at end of period (Note 6)－－

1,556,827

1,556,827(1,508,974)

110,189,294

128,598,415

1,556,827

1,556,827

5,894,142(Thousands of yen)

Valuation and translation
adjustments

Unitholders’ equity
Surplus

Total
Deferred gains valuation andtranslation
or losses on
adjustments
hedgesTotal
net assets

Total
surplusTotal
unitholders’equity136,001,532

246,190,826

－

－

－

Distribution from surplus(5,846,289)(5,846,289)(5,846,289)

Net income

5,894,142

5,894,142

5,894,142

Balance at beginning of period(526,965)(526,965)

245,663,860

Changes of items during period
Reserve for temporary difference
adjustments

Net changes of items other thanunitholders’ equity
Total changes of items during period
Balance at end of period (Note 6)(15,963)(15,963)(15,963)

47,85247,852(15,963)(15,963)

31,889136,049,385

246,238,679(542,929)(542,929)

245,695,750

47

10th Fiscal Period (From May 1, 2019 to October 31, 2019)(4) Statement of Cash Distributions(Thousands of yen)

Item

Unitholders’ equity

Ⅰ. Unappropriated retained earnings
Ⅱ. Reversal of voluntary reserve

Surplus
Voluntary reserve

Unitholders’capitalBalance at beginning of period

110,189,294

Reserve fortemporarydifference
adjustments

Capitalsurplus128,598,415

1,556,827

Total
voluntary
reserve

Reversal of reserve for temporary difference
adjustments (Note 7)
Ⅲ. Cash distributions[Cash distributions per unit]
Ⅳ. Voluntary reserve

Unappropriatedretainedearnings

1,556,827

5,894,142

Provision of reserve for reduction entry(Note 7)
Ⅴ. Retained earnings carried forward

Changes of items during period
Issuance of new investment units

39,020,787

Reversal of reserve for temporary
difference adjustments(102,630)(102,630)

Method for calculating cash distributions

102,630

Distribution from surplus(5,996,773)

Net income

7,405,454

Balance at end of period (Note 6)

39,020,787－(102,630)(102,630)

1,511,312

149,210,081

128,598,415

1,454,196

1,454,196

7,405,454(Thousands of yen)

Valuation and translation
adjustments

Unitholders’ equity
Surplus

Balance at beginning of period

Total
surplusTotal
unitholders’equity136,049,385

246,238,679

Total
Deferred gains valuation andtranslation
or losses on
adjustments
hedges(542,929)(542,929)

Total
net assets

245,695,750

Changes of items during period
Issuance of new investment units

39,020,787

39,020,787

－

－

－

Distribution from surplus(5,996,773)(5,996,773)(5,996,773)

Net income

7,405,454

7,405,454

7,405,454

Reversal of reserve for temporary
difference adjustments

Net changes of items other thanunitholders’ equity
Total changes of items during period
Balance at end of period (Note 6)

67,251

67,251

67,251

1,408,681

40,429,468

67,251

67,25140,496,719

137,458,066

286,668,148(475,678)(475,678)

286,192,469

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

10th Fiscal Period(From May 1, 2019 toApril 30, 2019 )October 31, 2019 )

5,894,142,237yen

7,405,454,420yen

102,630,817yen

364,855,362yen

5,996,773,054yen[1,594yen]

6,994,814,246yen[1,631yen]－yen

775,495,536yen

－yen

－yen

The basic policy is to distributein excess of an amountThe basic policy is to distributein excess of an amountfor distribution of SHR
provided in Article 67-15,
Paragraph 1 of the Act onfor distribution of SHR
provided in Article 67-15,
Paragraph 1 of the Act onequivalent to 90% of theamount of earnings available

Net changes of items other thanunitholders’ equity
Total changes of items during period

9th Fiscal Period(From November 1, 2018 toSpecial Measures Concerning
Taxation as set forth in Article
46, Paragraph 1, Item 2 of the
Articles of Incorporation of
SHR.
Based on such policy, SHR
decided to distribute
5,996,773,054 yen, which is
obtained by adding a reversalof the reserve for temporary
difference adjustments(102,630,817 yen) tounappropriated retained
earnings, as distribution of

earnings.
SHR will not distribute cash inexcess of earnings as set forthin Article 46, Paragraph 2 of

the Articles of Incorporation ofSHR.

equivalent to 90% of theamount of earnings available

Special Measures Concerning
Taxation as set forth in Article
46, Paragraph 1, Item 2 of the
Articles of Incorporation of
SHR.
Based on such policy, SHR
decided to distribute
6,994,814,246 yen, which is
obtained by adding a reversalof the reserve for temporary
difference adjustments(364,855,362 yen) tounappropriated retained
earnings and reserving areserve for reduction entry(775,495,536 yen) provided in

Article 65-7 of the Act on
Special Measures Concerning
Taxation, as distribution of
earnings.

SHR will not distribute cash inexcess of earnings as set forthin Article 46, Paragraph 2 of
the Articles of Incorporation of
SHR.

48

49

(5) Statement of Cash Flows
9th Fiscal Period

Cash flows from operating activities
Income before income taxes
Depreciation and amortization
Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance costs
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes receivable
Decrease (increase) in prepaid expenses
Decrease (increase) in long-term prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable – other
Increase (decrease) in accrued consumption taxes
Increase (decrease) in advances received
Decrease due to sale of property, plant and equipment in trust
Other, net
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities
Purchase of property, plant and equipment in trust
Proceeds from tenant leasehold and security deposits in trust
Repayments of tenant leasehold and security deposits in trust
Decrease (increase) in other investments
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term loans payable
Repayments of short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Proceeds from issuance of investment corporation bonds
Redemption of investment corporation bonds
Proceeds from issuance of investment units
Dividends paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period (Note 8)
The accompanying notes are an integral part of these financial statements.

50(From November 1, 2018
to April 30, 2019)(Thousands of yen)

10th Fiscal Period(From May 1, 2019
to October 31, 2019)

5,894,747
2,190,566
2,919
14,384(111)
656,751(11,611)(147,089)(14,072)(117,273)(80,862)361,698(200,653)(2,499)－(59,850)
8,487,044
111(767,380)(604)
7,719,170

7,406,059
2,370,528
5,212
42,905(106)725,888(39,188)(3,530)(30,629)(101,955)
173,060
218,946－
122,828
2,073,098
96,442
13,059,560
106(812,688)(606)
12,246,372(19,999,067)
310,349(126,690)(189,934)(20,005,342)(73,243,672)
2,887,300(198,705)(22,687)(70,577,764)

23,500,000(17,000,000)
25,382,000(12,382,000)－(2,500,000)－(5,844,807)
11,155,192(1,130,979)
22,090,154
20,959,174

31,160,000(24,660,000)
16,310,000－
6,455,456－
38,789,674(5,996,933)
62,058,197
3,726,805
20,959,174
24,685,979(6) Notes to Financial Statements
1. Organization
Sekisui House Reit, Inc. (“SHR”) is a Japanese real estate investment corporation established in September 2014
under the Act on Investment Trusts and Investment Corporations of Japan (the “Investment Trust Act”).
On December 3, 2014, SHR commenced its investment operations when it was listed on the Real Estate Investment
Trust Securities Market of the Tokyo Stock Exchange, and it acquired three properties (total acquisition cost of¥114.3 billion) on the same day.
SHR implemented a 2-for-1 split of its investment units with May 1, 2018 as the effective date.
SHR conducted an absorption-type merger with Sekisui House Residential Investment Corporation (“SHI”) as thedissolved corporation, setting May 1, 2018 as the effective date.
SHR is externally managed by a licensed asset management company, Sekisui House Asset Management, Ltd. (the“Asset Management Company”).
Sekisui House Asset Management, Ltd., previously called Sekisui House Investment Advisors, Ltd., carried out anabsorption-type merger with Sekisui House Asset Management, Ltd. (the “former SHAM”), which was the asset
management company for SHI, on May 1, 2018, with the Asset Management Company being the surviving company
and the former SHAM being the dissolved company, and changed its company name to the current one.
2. Basis of Presentation
SHR maintains its accounting records and prepares its financial statements in accordance with accounting
principles generally accepted in Japan (“Japanese GAAP”), including provisions set forth in the Financial
Instruments and Exchange Act, the Investment Trust Act, the Companies Act and the related regulations, which are
different in certain respects as to the application and disclosure requirements of International Financial ReportingStandards.
The accompanying financial statements are basically a translation of the financial statements of SHR, which wereprepared in accordance with Japanese GAAP and were presented in its Securities Report filed with the Kanto Local
Finance Bureau. In preparing the accompanying financial statements, certain reclassifications and modifications
have been made to the financial statements issued domestically in order to present them in a format which is morefamiliar to readers outside Japan. In addition, the notes to the financial statements include certain information
which might not be required under Japanese GAAP but is presented herein as additional information.
SHR’s fiscal period is a six-month period, which ends at the end of April and October of each year.
SHR does not prepare consolidated financial statements as it has no subsidiaries.
Unless otherwise specified, amounts have been rounded down to the nearest thousand yen in the accompanying
financial statements and the notes thereto. As a result, the amounts shown in the financial statements and notes
thereto do not necessarily agree with the sum of the individual account balances.
3. Summary of Significant Accounting Policies(1)Property, plant and equipment (including assets in trust)
1. Method of depreciation
Depreciation is calculated using the straight-line method.
and amortization of nonThe useful lives of principal property, plant and equipment are as follows:
current assets
Buildings
3-69 years
Structures
6-52 years
Machinery and equipment
8-61 years
Vehicles in trust
2 years
Tools, furniture and fixtures
2-15 years(2)Intangible assets
Intangible assets are amortized utilizing the straight-line method.
Leasehold rights in trust are amortized on a straight-line basis over theremaining life of each fixed-term land lease contract.
(3)Long-term prepaid expenses
Long-term prepaid expenses are amortized utilizing the straight-line method.
2. Accounting for(1) Investment corporation bond issuance costs
deferred assets
Investment corporation bond issuance costs are amortized utilizing thestraight-line method over the redemption periods.
(2) Investment unit issuance costs
Investment unit issuance costs are amortized utilizing the straight-line
method (over 3 years).

51

3. Standards for recording
allowance

4. Standards forrevenue and expense
recognition

5. Method of hedge
accounting

6.

52

Scope of funds in thestatement of cash flows

Allowance for doubtful accounts
To prepare for possible losses arising from default on receivables, theestimated uncollectable amount is recorded by examining collectability on acase-by-case basis for doubtful and other specific receivables.
(1)Revenue recognition
Rent revenue
SHR generally recognizes rent revenue,
including fixed rent revenues, variable rent
revenues and common area charges, on an
accrual basis over the term of each leaseagreement.
Other lease business
Other lease business revenue is recognizedrevenuein accordance with Japanese GAAP, typicallyas amounts under the relevant agreements
become due.
(2)Accounting for property taxes
In accounting for property tax, city planning tax, depreciable asset tax, etc. onreal estate, etc., of the tax amount assessed and determined, the amountcorresponding to the applicable calculation period is expensed as expenses
related to rent business.
Reimbursement of property tax, paid to the seller upon the acquisition of realestate or trust beneficiary interests of real estate as assets in trust, is notrecognized as expenses related to rent business in the corresponding fiscal
period but included in the acquisition cost of the property.
Property taxes capitalized as a part of the acquisition cost amounted to 157,506
thousand yen for the 10th fiscal period and 39,028 thousand yen for the 9th
fiscal period(1)Method of hedge accounting
Deferral hedge accounting is applied. However, the special accounting
treatment is applied to interest rate swaps that meet the criteria for the
special accounting treatment.
(2)Hedging instruments and hedged items
Hedging instruments: Interest rate swap transactions
Hedged items:
Interest on loans(3)Hedging policy
SHR conducts derivative transactions for the purpose of hedging the risks set
forth in its Articles of Incorporation based on its basic risk management policy.
(4)Method for assessing the effectiveness of hedging
Interest rate swaps meet the criteria for the special accounting treatment andan assessment of the effectiveness is thus omitted.
(5)Special accounting treatment
Under the special accounting treatment, interest rate swaps are not measured
at fair value, but the differential paid or received under the swap agreements
is recognized and included in or deducted from interest expense. Anyamounts received under interest rate swaps subject to such accounting
treatment are not recognized as income on the accompanying statements ofincome and retained earnings but rather have the effect of decreasing interest
expenses.
The funds (cash and cash equivalents) in the statement of cash flows consist of cashon hand and cash in trust; deposits that can be withdrawn at any time and deposits
in trust; and short-term investments with a maturity of three months or less fromthe date of acquisition, which are readily convertible to cash and bear only an
insignificant risk of price fluctuation.

7.

Other significant mattersserving as basis for
preparation offinancial statements(1)Accounting for trust beneficiary interests of real estate, etc. as assets in trust
Concerning trust beneficiary interests of real estate, etc. as assets in trust, allaccounts of assets and liabilities within assets in trust as well as all accountsof revenue and expenses from the assets in trust are recognized in the relevant
account items on the balance sheet and the statement of income and retained
earnings.
The following material items of the assets in trust recognized in the relevant
account items are separately listed on the balance sheet.
ͳሻ Cash and deposits in trustʹሻ Buildings in trust; Structures in trust; Machinery and equipment in trust;Tools, furniture and fixtures in trust; Land in trust; Construction inprogress in trust; Leasehold rights in trust͵ሻ Tenant leasehold and security deposits in trust(2)Accounting for consumption tax, etc.
Consumption tax and local consumption tax are excluded from thecorresponding transaction amounts.

53

4. Notes to Balance Sheet

5. Notes to Statement of Income and Retained Earnings*1. Breakdown of property-related operating revenue and expenses*1. Minimum net assets designated in Article 67-4 of the Investment Trust Act(Thousands of yen)(Thousands of yen)

9th Fiscal Period

10th Fiscal Period

9th Fiscal Period(As of April 30, 2019)50,000*2. Commitment line agreement
SHR has entered into a commitment line agreement with three financial institutions in order to secure flexible
and stable financing.

(Thousands of yen)

10th Fiscal Period

9th Fiscal Period(As of April 30, 2019)

Total amount of commitment line
Balance executed as loans
Unused line of credit(As of October 31, 2019)15,000,000

15,000,000－－

15,000,000

15,000,000(Thousands of yen)

10th Fiscal Period

9th Fiscal Period(As of April 30, 2019)(As of October 31, 2019)

Gain on negative goodwill (*)
1,556,827

1,556,827

Balance at beginning of period－

1,556,827

Reserve amount during period

1,556,827－

Reversal amount during period－

102,630

1,556,827

1,454,196

Balance at end of period
Reason for reserve and reversal

Reserve of a part of gain
on negative goodwill by
merger with SHI.

Appropriated for
distributions(*) Reserve of a part of gain on negative goodwill that arose in the previous fiscal period; SHR plans to drawdown at least 1% of thereserve for each fiscal period (corresponding to the amount of the reserve expensed equally over 50 years) and appropriate the amountfor cash distributions, starting from the fiscal period following the fiscal period in which the reserve was made.

A. Property-related operating revenue
Rent revenue – real estate
Rental income
Other
Other lease business revenue
Utilities revenue
Other
B. Property-related operating expenses
Expenses related to rent businessSubcontract expenses
Property management fees
Trust fees
Utilities expenses
Property and other taxes
Insurance expenses
Repair expenses
Depreciation
Other expenses related to rent business(From May 1, 2019
to October 31, 2019)11,812,505
273,308

12,085,814

13,248,088
291,597

42,768241,397

284,165

115,719
223,925

Total property-related operating revenue*3. Matters concerning accounting for reserve and reversal of reserve for temporary difference adjustments

Initial amount(From November 1, 2018
to April 30, 2019)(As of October 31, 2019)50,00010th Fiscal Period

12,369,980

374,236
374,765
44,181
113,511803,144
14,533
282,133
2,189,114
447,612

4,643,232

13,539,686

339,644
13,879,331

422,160
422,487
40,591
180,503
860,133
16,257295,3362,369,076
518,418

5,124,966

Total property-related operating expenses

4,643,232

5,124,966

C. Property-related operating income [A − B]

7,726,747

8,754,364*2. Breakdown of gain on sale of real estate properties
9th Fiscal Period (From November 1, 2018 to April 30, 2019)
Not applicable.
10th Fiscal Period (From May 1, 2019 to October 31, 2019)(Thousands of yen)

Esty Maison Yokohama
Proceeds from sale of real estate property

3,000,100

Cost of real estate property

2,073,098

Other sales expenses

122,874

Gain on sale of real estate property

804,126

6. Notes to Statement of Changes in Net Assets*1. Total number of authorized investment units and total number of investment units issued
10th Fiscal Period
9th Fiscal Period(From November 1, 2018
to April 30, 2019)54(From May 1, 2019
to October 31, 2019)

Total number of authorized investment units

20,000,000units

20,000,000units

Total number of investment units issued

3,762,091units

4,288,666units55

7. Notes to Statement of Cash Distributions

10. Financial Instruments

Reserve for temporary difference adjustments
9th Fiscal Period(From November 1, 2018 to April 30, 2019)

With regard to the reserve for temporary
difference adjustments, SHR plans to drawdownat least 1% of the reserve for each fiscal period(corresponding to the amount of the reserve
expensed equally over 50 years) and appropriate
the amount for cash distributions, starting fromthe fiscal period following the fiscal period inwhich the reserve was made. SHR decided to
drawdown 102,630,817 yen for the 9th fiscal
period.

10th Fiscal Period(From May 1, 2019 to October 31, 2019)

With regard to the reserve for temporary
difference adjustments, SHR plans to drawdownat least 1% of the reserve for each fiscal period(corresponding to the amount of the reserve
expensed equally over 50 years) and appropriate
the amount for cash distributions, starting fromthe fiscal period following the fiscal period inwhich the reserve was made. SHR decided to
drawdown 364,855,362 yen for the 10th fiscal
period.

8. Notes to Statement of Cash Flows*1. Reconciliation of cash and cash equivalents at end of period to the corresponding balance sheet items(Thousands of yen)

9th Fiscal Period(From November 1, 2018
to April 30, 2019)

10th Fiscal Period(From May 1, 2019
to October 31, 2019)

Cash and deposits

7,657,644

7,551,248

Cash and deposits in trust

13,301,529

17,134,730

Cash and cash equivalents

20,959,174

24,685,979

1. Status of financial instruments(1) Policy for financial instruments
Making it a policy to conduct stable and sound financial operations that would contribute to steady growthof its investment assets as well as efficient management and stability of management, SHR shall procure
funds through borrowings or the issuance of investment corporation bonds for the purposes of utilizing
such funds for the acquisition of assets, payments of repair expenses or distributions, operations of SHR,
repayment of obligations or other.
For derivative transactions, the policy is that derivative transactions shall be limited to those for the
purpose of hedging the risk of fluctuations in interest rates on liabilities and foreign currency risk in thecase of overseas real estate investments, and that no speculative transactions shall be conducted.
(2) Description of financial instruments and associated risks, and risk management structure
The funds procured through borrowings shall be used mainly for the acquisition of investment assets andfor repayment of loans.

The availability and terms and conditions of borrowings and the issuance of investment corporation bonds
may be affected by SHR’s financial creditworthiness, the interest rate situation and other factors, andthere is thus no guarantee that funds can be procured at SHR’s desired timing and terms and conditions.
Furthermore, loans with floating interest rates are susceptible to subsequent market trends.
SHR manages and limits the liquidity risk and the risk of fluctuations in interest rates associated withsuch fund procurement by diversifying fund procurement sources and means and by maintaining the ratio

of interest-bearing liabilities to total assets and the ratio of floating-rate loans to total loans at appropriate
levels. Furthermore, for certain loans with floating interest rates, derivative transactions (interest rate
swap transactions) are used as a hedging instrument for hedging the risk of fluctuations in interest rates

based on rules that set forth the basic policy for handling derivative transactions and risk management.
(3) Supplementary explanation of matters concerning fair value of financial instruments
The fair value of financial instruments, aside from values based on market price, includes values based onreasonable calculations when there is no market price. As the calculations involve variable factors, there
may be cases where the corresponding values will vary when different assumptions are adopted. In

addition, the contract amounts of derivative transactions in “2. Matters concerning fair value of financial
instruments” do not represent the market risk involved in the derivative transactions.

9. Lease Transactions
Operating lease transactions as lessee
Future minimum lease payments(Thousands of yen)

9th Fiscal Period

Due within 1 year
Due after 1 year
Total

10th Fiscal Period(As of April 30, 2019)(As of October 31, 2019)

411,960

411,960

20,499,571

20,293,591

20,911,531

20,705,551

2. Matters concerning fair value of financial instruments
The following is the carrying amount and fair value of financial instruments as of April 30, 2019 and of
October 31, 2019, and the difference between them.
The following table does not include those for which fair value is recognized to be extremely difficult todetermine (please refer to (Note 2)).

Operating lease transactions as lessor
Future minimum lease income(Thousands of yen)

9th Fiscal Period(As of October 31, 2019)

Due within 1 year

9,798,520

8,939,389

Due after 1 year

30,096,783

36,458,592

39,895,304

45,397,982

Total

56

10th Fiscal Period(As of April 30, 2019)57

9th Fiscal Period (As of April 30, 2019)(4) Current portion of investment corporation bonds (6)Investment corporation bonds

Book value
recorded on thebalance sheet(Thousands of yen)

Fair value

Difference(1) Cash and deposits

7,657,644

7,657,644－(2) Cash and deposits in trust

13,301,529

13,301,529－

20,959,174

20,959,174－

6,500,000

6,500,000－

2,000,000

2,013,069

13,069(5) Current portion of long-term loans payable

20,792,500

20,828,447

35,947(6) Investment corporation bonds

11,000,000

11,209,963

209,963

174,640,000

176,826,547

2,186,547

214,932,500

217,378,028

2,445,528[542,929][542,929]－[542,929][542,929]－

Total assets(3) Short-term loans payable(4) Current portion of investment corporation
bonds(7) Long-term loans payable
Total liabilities(8) Derivative transactions(*)
Total derivative transactions(*)

The fair value of investment corporation bonds is based on the quoted market price.
Of the investment corporation bonds issued by SHR, the fair value of those with a market price is based on the quoted market
price. For those where it is difficult to obtain the fair value based on the quoted market price, the fair value is based on themethod of calculating by discounting the combined total of principal and interest by a reasonably estimated interest rateapplicable when conducting similar fund procurement for the remaining period of the bonds.
(5) Current portion of long-term loans payable (7) Long-term loans payable

As the long-term loans payable with floating interest rates reflect interest rate changes within a short period of time, the fairvalue is approximately the same as the book value and is thus stated at that book value (provided, however, that for long-termloans payable with floating interest rates that qualify for the special accounting treatment of interest rate swaps (please refer
to “12. Derivative Transactions”), the fair value is based on the method of calculation in which the sum total amount ofprincipal and interest accounted for with the interest rate swap is discounted by the rate assumed in the event of a similar

new drawdown). In addition, for those with fixed interest rates, the fair value is based on the method of calculation in which
the sum total amount of principal and interest is discounted by the rate assumed in the event of a similar new drawdown
corresponding to the remaining period.

(8) Derivative transactions
Please refer to “12. Derivative Transactions”.
(Note 2) Financial instruments for which fair value is recognized to be extremely difficult to determine

Tenant leasehold and security deposits in trust are not subject to valuation of fair value because a reasonable estimation of
cash flows is recognized to be extremely difficult because there is no market price and the difficulty of calculating the actual
deposit period from when lessees move in to when they move out.

(Thousands of yen)

Item(*)Amounts arising from derivative transactions are shown on a net basis with any amounts inside square parentheses [ ]indicating a net liability position.

10th Fiscal Period(As of April 30, 2019)(As of October 31, 2019)11,148,044

13,836,639

Tenant leasehold and security deposits in trust

10th Fiscal Period (As of October 31, 2019)(Note 3) Redemption schedule of monetary claims after the closing date

Book value
recorded on thebalance sheet(Thousands of yen)

Fair value

Difference

9th Fiscal Period (As of April 30, 2019)(Thousands of yen)
Due after
4 to 5 years
5 years

Due in1 year or less

1 to 2 years

2 to 3 years

3 to 4 years

Cash and deposits

7,657,644

－

－

－

－

－

(1) Cash and deposits

7,551,248

7,551,248－(2) Cash and deposits in trust

17,134,730

17,134,730－

24,685,979

24,685,979－

Cash and deposits in trust

13,301,529

－

－

－

－

－

13,000,000

13,000,000

－

Total

20,959,174

－

－

－

－

－

2,000,000

2,005,760

5,760

27,892,500

27,900,332

7,832

Due in1 year or less

1 to 2 years

2 to 3 years

3 to 4 years

4 to 5 years

Total assets(3) Short-term loans payable(4) Current portion of investment corporation
bonds(5) Current portion of long-term loans payable

10th Fiscal Period (As of October 31, 2019)(Thousands of yen)
Due after
5 years(6) Investment corporation bonds

17,500,000

17,707,993

207,993(7) Long-term loans payable

183,850,000

186,678,660

2,828,660

Cash and deposits

7,551,248

－

－

－

－

－

244,242,500

247,292,746

3,050,246

Cash and deposits in trust

17,134,730

－

－

－

－

－

(475,678)(475,678)

－

Total

24,685,979

－

－

－

－

－

(475,678)(475,678)－

Total liabilities(8) Derivative transactions(*)
Total derivative transactions(*)(*)Amounts arising from derivative transactions are shown on a net basis with any amounts inside square parentheses [ ]indicating a net liability position.

(Note 1) Method of calculating the fair value of financial instruments(1) Cash and deposits and (2) Cash and deposits in trust
As these are settled within a short period of time, the fair value is approximately the same as the book value and is thusstated at that book value.
(3) Short-term loans payable
As these are settled within a short period of time and have floating interest rates, the fair value is approximately the same as
the book value and is thus stated at that book value.

58

9th Fiscal Period(Note 4) Repayment schedule of investment corporation bonds and loans after the closing date

9th Fiscal Period (As of April 30, 2019)(Thousands of yen)
Due after
5 years

Due in1 year or less

1 to 2 years

2 to 3 years

3 to 4 years

4 to 5 years

Short-term loans payable

6,500,000

－

－

－

－

－

Investment corporation
bonds

2,000,000－－

3,000,000

3,000,000

5,000,000

Long-term loans payable

20,792,500

28,050,000

35,590,000

23,500,000

25,640,000

61,860,000

59

10th Fiscal Period (As of October 31, 2019)(Thousands of yen)
Due after
4 to 5 years
5 years

Due in1 year or less

1 to 2 years

2 to 3 years

3 to 4 years

Short-term loans payable

13,000,000

－

－

－

－

－

Investment corporation
bonds

2,000,000－

3,000,000－

10,000,000

4,500,000

Long-term loans payable

27,892,500

29,710,000

39,230,000

31,310,000

21,735,000

61,865,000

11. Securities
9th Fiscal Period (From November 1, 2018 to April 30, 2019)
Not applicable.
10th Fiscal Period (From May 1, 2019 to October 31, 2019)
Not applicable.

Fair value

Calculation
method offair value

Long-term
loans
payable55,572,500

43,280,000(475,678)*1

Long-term
loans
payable98,081,000

84,081,000*2－

Not applicable.

9th Fiscal Period (As of April 30, 2019)(Thousands of yen)Mainhedgeditem
Long-term
loans
payableLong-term
loans
payableContract amount
Of which,over
1 yearFair value

Calculation
method offair value

10th Fiscal Period (From May 1, 2019 to October 31, 2019)
Not applicable.
14. Income Taxes
1. Breakdown of deferred tax assets and deferred tax liabilities by major cause(Thousands of yen)

9th Fiscal Period

55,572,500

86,141,000

48,780,000

72,141,000(542,929)

*2

*1

－

10th Fiscal Period(As of April 30, 2019)(As of October 31, 2019)

2,357,755

2,288,155

Deferred tax assets
Valuation difference on assets acquired due to merger*1 Fair value is quoted by counterparties based on the prevailing market interest rates.
*2 As derivative transactions qualifying for the special accounting treatment for interest rate swaps are accounted for with thehedged long-term loans payable, the fair value is included in the fair value of the underlying long-term loans payable (pleaserefer to “10. Financial Instruments; 2. Matters concerning fair value of financial instruments (Note 1)”).

60

Interest rate swap
transaction
Floating interest ratereceivable and fixedinterest rate payable
Interest rate swap
Specialtransaction
accounting
treatment for Floating interest rateinterest rate receivable and fixedswapsinterest rate payable
Principal
methodOf which,over
1 year

13. Retirement Benefits
9th Fiscal Period (From November 1, 2018 to April 30, 2019)

2. Derivatives to which hedge accounting is applied
The following is the contract amount or the amount equivalent to the principal provided in the contract asof the closing date for each method of hedge accounting.

Interest rate swap
transaction
Principal
Floating interest rate
methodreceivable and fixedinterest rate payable
Interest rate swap
Specialtransaction
accounting
treatment for Floating interest rateinterest rate receivable and fixedswapsinterest rate payableMainhedgeditem

Type ofderivative transactions*2 As derivative transactions qualifying for the special accounting treatment for interest rate swaps are accounted for with thehedged long-term loans payable, the fair value is included in the fair value of the underlying long-term loans payable (pleaserefer to “ 10. Financial Instruments; 2. Matters concerning fair value of financial instruments (Note 1)”).

Not applicable.
10th Fiscal Period (As of October 31, 2019)
Not applicable.

Type ofderivative transactions

Method ofhedge
accounting(Thousands of yen)Contract amount*1 Fair value is quoted by counterparties based on the prevailing market interest rates.

12. Derivative Transactions
1. Derivatives to which hedge accounting is not applied
9th Fiscal Period (As of April 30, 2019)

Method ofhedge
accounting

10th Fiscal Period (As of October 31, 2019)

Amortization of leasehold rights in trust

13,671

20,422

Deferred gains or losses on hedges

171,511

149,648

Deferred tax assets (subtotal)

2,542,938

2,458,226

Valuation allowance for total deductible temporary
difference(2,542,938)(2,458,226)

－

－

－

－

Total deferred tax assets
Net deferred tax assets61

2. Breakdown of major items that caused significant differences between the statutory tax rate and theeffective income tax rate after application of tax-effect accounting(As of April 30, 2019)

10th Fiscal Period(As of October 31, 2019)

31.51

31.51

(32.04)(29.76)

0.54

1.55

－

(3.30)

0.00

0.01

0.01

0.01

[Adjustments]
Deductible cash distribution
Changes in valuation allowance
Provision of reserve for reduction entry
Other
Effective income tax rate
after application of tax-effect accounting

AssetManagement, Ltd.

(%)

9th Fiscal Period

Statutory tax rate

House AssetManagement, Ltd.
(Note 1)

(Note 1) A transaction conducted by Junichi Inoue as a representative of a third party (Sekisui House Asset Management, Ltd.) andthe fee amount is based on terms and conditions set forth in the Articles of Incorporation of SHR.
(Note 2) The amount includes 3,120 thousand yen of asset management fees pertaining to real estate acquisition included in the bookvalue of property, plant and equipment.
(Note 3) Consumption taxes are not included in the transaction amount but are included in the balance at end of period.

10th Fiscal Period (From May 1, 2019 to October 31, 2019)
Type

Directoror close
relative

Name

JunichiInoue

Description ofPercentage ofoccupation

held by (in) SHR

business or

Executive Directorof SHR and
Representative
Director of Sekisui
House Asset－Management, Ltd.

15. Profit or Loss of Affiliates Accounted for Under the Equity Method
9th Fiscal Period (From November 1, 2018 to April 30, 2019)

Description of

voting rights

transaction

Payment of asset
management feesto Sekisui House

Asset
Management, Ltd.

Transaction
amount(Thousandsof yen)1,045,071(Note 2)

Account
item

Balanceat end of period(Thousands ofyen)

Accounts
payable– other

1,133,704(Note 1)

(Note 1) A transaction conducted by Junichi Inoue as a representative of a third party (Sekisui House Asset Management, Ltd.) andthe fee amount is based on terms and conditions set forth in the Articles of Incorporation of SHR.
(Note 2) The amount includes 9,000 thousand yen of asset management fees pertaining to real estate sales included in the book value

Not applicable.

of property, plant and equipment.
(Note 3) Consumption taxes are not included in the transaction amount but are included in the balance at end of period.

10th Fiscal Period (From May 1, 2019 to October 31, 2019)
Not applicable.

17. Asset Retirement Obligations
9th Fiscal Period (From November 1, 2018 to April 30, 2019)

16. Transactions with Related Parties
1. Parent company and major corporate unitholders.
9th Fiscal Period (From November 1, 2018 to April 30, 2019)

Not applicable.

10th Fiscal Period (From May 1, 2019 to October 31, 2019)

Not applicable.

Not applicable.

10th Fiscal Period (From May 1, 2019 to October 31, 2019)
Not applicable.

2. Subsidiaries and affiliates.
9th Fiscal Period (From November 1, 2018 to April 30, 2019)
Not applicable.

10th Fiscal Period (From May 1, 2019 to October 31, 2019)
Not applicable.

3. Sister companies.
9th Fiscal Period (From November 1, 2018 to April 30, 2019)
Not applicable.

10th Fiscal Period (From May 1, 2019 to October 31, 2019)
Not applicable.

4. Directors and major individual unitholders.
9th Fiscal Period (From November 1, 2018 to April 30, 2019)

62

Type

Name

Description ofbusiness or
occupation

Directoror close
relative

JunichiInoue

Executive Directorof SHR and
Representative
Director of Sekisui

Percentage ofvoting rights
held by (in) SHR

Description oftransaction－

Payment of asset
management feesto Sekisui House

Transaction
amount(Thousandsof yen)829,220(Note 2)

Account
item
Accounts
payable– other

Balanceat end of period(Thousands ofyen)

892,18863

18. Investment and Rental Properties

SHR owns rental office buildings, etc. in Tokyo and other areas for the purpose of earning revenue fromleasing. The following is the carrying amount, amount of increase (decrease) during the period and fair value ofthese investment and rental properties.

(Thousands of yen)

9th Fiscal Period(From November 1, 2018
to April 30, 2019)

10th Fiscal Period(From May 1, 2019 to
October 30, 2019)

Carrying amount
Balance at beginning of period

433,830,623

451,782,070

Amount of increase (decrease) during period

17,951,447

68,977,295

Balance at end of period

451,782,070

520,759,366

505,577,000

593,054,000

Fair value at end of period(Note 1) Carrying amount is the book value less accumulated depreciation.
(Note 2) Net increase during the 9th fiscal period is mainly attributable to the acquisition of 3 new properties (19,501,844 thousandyen), offset by depreciation (2,189,114 thousand yen). Net increase during the 10th fiscal period is mainly attributable to theacquisition of 7 new properties (72,593,252 thousand yen) offset by a decrease during the period mainly attributable to thedisposition of one property (2,073,098 thousand yen) that SHR had owned and depreciation (2,369,076 thousand yen).
(Note 3) Fair value at the end of the period is the appraisal value by outside real estate appraisers.

(1) Information about products and services

Information about products and services is omitted because net sales to external customers for a single
products and services category are in excess of 90% of operating revenue on the statement of income andretained earnings.
(2) Information about geographic areas
ͳሻ Operating revenue

Information about net sales is omitted because net sales to external customers in Japan are in excessof 90% of operating revenue on the statement of income and retained earnings.
ʹሻ Property, plant and equipment
Information about property, plant and equipment is omitted because the property, plant andequipment located in Japan is in excess of 90% of property, plant and equipment on the balance
sheet.

(3) Information about major customers(Thousands of yen)

Name of customer
Sekisui House, Ltd.

Segment information is omitted because SHR operates a single segment, which is the real estate leasing
business.

2. Related information
9th Fiscal Period (From November 1, 2018 to April 30, 2019)(1) Information about products and services
Information about products and services is omitted because net sales to external customers for a single
products and services category are in excess of 90% of operating revenue on the statement of income andretained earnings.
(2) Information about geographic areas
ͳሻ Operating revenue

Information about net sales is omitted because net sales to external customers in Japan are in excessof 90% of operating revenue on the statement of income and retained earnings.
ʹሻ Property, plant and equipment

Information about property, plant and equipment is omitted because the property, plant andequipment located in Japan is in excess of 90% of property, plant and equipment on the balance
sheet.
(3) Information about major customers

3,270,352

Name of related segment
Real estate leasing business

20. Per Unit Information
10th Fiscal Period

9th Fiscal Period

The property-related operating income in the 9th and 10th fiscal periods for investment and rental properties
is presented in “5. Notes to Statement of Income and Retained Earnings”.

19. Segment Information
1. Segment information

Operating revenue(From November 1, 2018
to April 30, 2019)(From May 1, 2019
to October 31, 2019)

Net assets per unit

65,308yen

66,732yen

Net income per unit

1,566yen

1,775yen(Note 1) Net income per unit is calculated by dividing net income by the daily weighted average number of investment units.
In addition, diluted net income per unit is not stated because there are no dilutive investment units.
The following is the basis for calculating net income per unit.

9th Fiscal Period(From November 1,
2018
to April 30, 2019)

10th Fiscal Period(From May 1, 2019
to October 31, 2019)

5,894,142

7,405,454

Amount not attributable to common unitholders (Thousands of yen)－－

Net income attributable to common investment units (Thousands ofyen)

5,894,142

7,405,454

Average number of investment units during period (Units)

3,762,091

4,170,241

Net income (Thousands of yen)

21. Significant Subsequent Events
Not applicable.

(Thousands of yen)

Name of customer
Sekisui House, Ltd.

Operating revenue
3,214,990

Name of related segment
Real estate leasing business10th Fiscal Period (From May 1, 2019 to October 31, 2019)
64

65

3. Schedule of property, plant and equipment and intangible assets(7)

Supplementary Schedules
10th Fiscal Period (From May 1, 2019 to October 31, 2019)
1. Schedule of securities(1) Shares(2) Securities other than shares
Not applicable.

Transaction other thanmarket transaction
Transaction other thanmarket transaction

TypeInterest rate swap transaction
Floating interest rate receivableand fixed interest rate payable
Interest rate swap transaction
Floating interest rate receivableand fixed interest rate payable
Total

Of which,over 1 year
55,572,500

43,280,000
84,081,000(Note 3)

153,653,500

127,361,000(475,678)

71,325

2,153,877

152,627

31,242

1,411,851(Note 1)

2,193,249

133,771

48,5682,059,477(Note 1)

－

153

19

19

134

97,546654

214,116

24,98014,013

189,135(Note 1)

295,079,081

58,780,819

1,287,100

352,572,801－－

352,572,801(Note 1)

98,534

5,494

98,534

5,494

－

－

5,494

457,840,959

73,424,965

2,211,063

529,054,860

10,765,747

2,343,650

518,289,113

2,552,025－－

2,552,025

76,27725,4252,475,748

Other

14,500－－14,500

9,058

1,452

5,442

Subtotal

2,566,526－－

2,566,526

85,33526,8772,481,190

460,407,485

73,424,965

2,211,063

531,621,386

10,851,083

2,370,528

520,770,303

andequipment in

For theperiod172,504,565

10,454,347

6,851

1,564,478

121,199

81,827－

153

117,224trust
Property,plant andequipment

98,081,000

1,500,004

oraccumulated
amortization

Machinery

Fair value(Note 2)(475,678)

736,095(Note 1)in trust

Contract amount (Note 1)

14,348,425

162,050,217

Structures

Category

158,892,235

2,249,806

in trust(Thousands of yen)

Balanceat end ofperiod(Thousands of yen)
Accumulated depreciation

Notes

Buildings

2. Contract amount and fair value of derivative transactions

Amount ofdecreaseduringperiodNet balanceat end ofperiodType of assets

Not applicable.

Balanceat beginningof period

Amount ofincreaseduringperiodVehicles intrust
Tools,
furniture andfixtures intrust(Note 1) The contract amount of interest rate swap transactions is based on the notional principal amount.
(Note 2) Fair value is quoted by counterparties based on the prevailing market interest rates.

Land in trust(Note 3) The fair value is omitted because the transaction meets the criteria for the special accounting treatment under thein progress inConstruction

Accounting Standards for Financial Instruments.

trust
Subtotal
Intangible Leasehold
assetsrights in
trust

Total
(Note 1)

The increase during the fiscal period under review is mainly attributable to the acquisition of Garden City Shinagawa Gotenyama(additional acquisition), Honmachi Minami Garden City (additional acquisition), Akasaka Garden City, Prime Maison
Mitatsunamachi , Prime Maison Hongo , Prime Maison Kuramae, and Esty Maison Yokohama-aobadai. The decrease during the
fiscal period under review is attributable to the disposition of Esty Maison Yokohama.

4. Schedule of other specified assets

Real estate trust beneficiary interests are included above in “3. Schedule of property, plant and equipment
and intangible assets”.

66

67

5. Schedule of investment corporation bonds
Name

Issue date

SHI
Second Series
February 28,
Unsecured Investment
2013
Corporation Bond
SHI
Fourth Series
February 28,
Unsecured Investment
2014
Corporation Bond
SHI
Fifth Series
August 29,
Unsecured Investment
2014
Corporation Bond
SHRFirst Series
September 8,
Unsecured Investment
2016
Corporation Bond
SHR
Second Series
July 13,
Unsecured Investment
2017
Corporation Bond
SHR
Third Series
July 11,
Unsecured Investment
2019
Corporation Bond
(Green Bonds)
SHR
Fourth Series
July 11,
Unsecured Investment
2019
Corporation Bond
(Green Bonds)
Total

－

Balance at
beginning of
period(Thousands ofyen )Amount ofdecrease during
period(Thousands ofyen )Balanceat end of period(Thousands ofyen )Couponrate(%)

Redemption Use of
dateproceeds

Security

2,000,000－

2,000,000

1.000

3,000,000－

3,000,000

1.069

February 28,(Note 3) Unsecured2024

3,000,000

－

0.871

August30,2024(Note 3) Unsecured

category

Lender2,000,000

2,000,000

0.340

MUFG Bank, Ltd.

Short-

Mizuho Bank, Ltd.

－

3,000,000－

4,000,000

－

0.240

0.220

Sumitomo Mitsui Banking

13,000,000

2,500,000

19,500,000

－

0.570

(Note 3) Unsecured－

July 11,2029(Note 3) Unsecured

－

－

－

(Note 3) The proceeds are used as funds for repayment of loans payable.
(Note 4) These investment corporation bonds are equipped with pari passu clause among specified investment corporation bonds.
(Note 5) The following is the maturity schedule of investment corporation bonds within five years of the balance sheet date.
Due in1 year or less
2,000,000(Thousands of yen)

1 to 2 years

2 to 3 years－

3,000,000

3 to 4 years

4 to 5 years－

10,000,000

period2,600,000

rate

Repayment due

(%)

date

(Note 1)

Repayment
methodUse ofproceeds

Security

Repayment-

1,900,000-

1,900,000

of loans- 0.23143

2,000,000-

MUFG Bank, Ltd.

-12,110,000

7,058,000

5,052,000

Mizuho Bank, Ltd.

-9,870,000

5,752,000

4,118,000

Redemption

Feb. 28, 2020of existing(Note2)

corporation
bonds
Purchase of
0.24066

assets andMay. 29, 2020

related(Note3)-9,180,000

5,350,000

3,830,000

MUFG Bank, Ltd.

3,842,500--

3,842,500

Mizuho Bank, Ltd.

400,000--

400,000

Mizuho Trust & Banking Co., Ltd.

500,000--

500,000

Resona Bank, Limited

500,000--

500,000

MUFG Bank, Ltd.

800,000--

800,000

Repayment

Mizuho Bank, Ltd.

500,000--

500,000of loans

2,500,000--

2,500,000

Mizuho Trust & Banking Co., Ltd.

200,000--

200,000

Resona Bank, Limited

500,000--

500,000

expenses

1.02225

1.17200

Aozora Bank, Ltd.

1,000,000--

1,000,000

MUFG Bank, Ltd.

800,000--

800,000

Mizuho Bank, Ltd.

300,000--

300,000

300,000--

300,000 1.17350

400,000--

400,000

Long-

Sumitomo Mitsui Banking

term

Corporation

loans

Sumitomo Mitsui Trust Bank,

payable Limited
Mizuho Bank, Ltd.

--405,000-

1,145,000

MUFG Bank, Ltd.

500,000--

500,000

Mizuho Bank, Ltd.

400,000--

400,000

500,000--

500,000

500,000--

500,000 0.95225

Corporation
LimitedMizuho Trust & Banking Co., Ltd.

500,000--

500,000

Resona Bank, Limited

500,000--

500,000

The Senshu Ikeda Bank, Ltd.

500,000--

500,000

The Yamaguchi Bank, Ltd.

500,000--

500,000

Aug. 31, 2020
(Note4)payableUnsecured

LumpsumUn-payment

guaran-Feb. 28, 2022

assets andrelatedexpenses-Sumitomo Mitsui Banking(Note4)Purchase of

405,000

Corporation

Feb. 28, 2020

teed

1,145,000

Sumitomo Mitsui Banking

Sumitomo Mitsui Trust Bank,

68-

during period-

Limited

－2,600,000

at end of

2,000,000

Sumitomo Mitsui Trust Bank,－

duringdecreaseinterest

investment

Corporation(Note 3) Unsecured

July 11,2024

at beginning of period

Balanceterm

Sumitomo Mitsui Banking

3,000,000

increaseAmount ofpayable and

September 8,(Note 3) Unsecured
2026

July 13,2022

Balanceperiodloans(Note 1) As of the end of the fiscal period under review, these bonds are recorded as “Current portion of investment corporation bonds”
in “Current liabilities” on the balance sheet.
(Note 2) The funds are used to repay borrowings and acquire trust beneficiary interests in real estate, etc.

Investment Corporation Bonds

Averagepayable Corporation－(Thousands of yen)Amount of

February 28,
2020(Note 2) Unsecured(Note 1)3,000,000

6. Schedule of loans payable

0.79614

Feb. 28, 2020
(Note4)

Repaymentof loans
Feb. 26, 2021

payable69

AverageAmount ofcategory

LenderBalanceincreaseat beginning of period

duringperiodAmount ofBalancedecreaseat end ofduring period

periodAverageinterest
rate

Repayment due

(%)

date

(Note 1)

Repayment
methodAmount of

Use ofproceeds

Security

category

Lender500,000--

500,000

Mizuho Bank, Ltd.

Mizuho Bank, Ltd.

400,000--

400,000

Sumitomo Mitsui Banking

500,000--

500,000

Corporation
Sumitomo Mitsui Trust Bank,
Limited

1,500,000--

Feb. 28, 2022

of loans

1,500,000

duringpayableBalancedecreaseat end ofduring period

period600,000--

600,000
300,000-

500,000

Shinkin Central Bank

500,000--

500,000 0.62800

The Senshu Ikeda Bank, Ltd.

500,000--

500,000--

980,000

The Shizuoka Bank, Ltd.

500,000--

500,000-

800,000

The 77 Bank, Ltd.

500,000--

500,000

Mizuho Bank, Ltd.

300,000--

300,000

The Hiroshima Bank, Ltd.

500,000--

500,000

300,000--

300,000

Purchase of

MUFG Bank, Ltd.

300,000--

300,000

assets and

The Bank of Fukuoka, Ltd.

500,000--

500,000

Mizuho Bank, Ltd.

500,000--

500,000

relatedShinkin Central Bank

500,000--

500,000

Sumitomo Mitsui Banking

The Shizuoka Bank, Ltd.

500,000--

500,000

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation

2,450,000--

2,450,000

1,950,000--

1,950,000

MUFG Bank, Ltd.

900,000--

900,000

Mizuho Bank, Ltd.

2,500,000--

2,500,000

2,000,000--

2,000,000

Sumitomo Mitsui Banking
Corporation

0.83600

Repaymentof loans
0.96475

MUFG Bank, Ltd.

4,300,000--

4,300,000

Mizuho Bank, Ltd.

1,800,000--

1,800,000

term

Sumitomo Mitsui Banking

loans

Corporation

3,000,000--

3,000,000

1,800,000--

1,800,000 0.65830

600,000--

LimitedMizuho Trust & Banking Co., Ltd.

900,000--

900,000--

800,000

800,000--

800,000

MUFG Bank, Ltd.

5,100,000--

5,100,000

Mizuho Bank, Ltd.

2,400,000--

2,400,000

3,700,000--

3,700,000

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

2,000,000--

2,000,000 0.94060

900,000--

900,000

1,400,000--

1,400,000

Development Bank of Japan Inc.

800,000--

800,000

The Norinchukin Bank

700,000--

700,000

MUFG Bank, Ltd.

4,600,000--

4,600,000

Mizuho Bank, Ltd.

700,000--

700,000

3,700,000--

3,700,000

700,000--

700,000

300,000--

300,000

Resona Bank, Limited

Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
LimitedDevelopment Bank of Japan Inc.

-

500,000--

750,000

The Norinchukin Bank

800,000--

800,000

The Bank of Fukuoka, Ltd.

500,000--

Development Bank of Japan Inc.

1,000,000--

1,000,000 0.85250

MUFG Bank, Ltd.

1,300,000--

1,300,000

Mizuho Bank, Ltd.

1,000,000--

1,000,000

600,000--

600,000sum

securedpayment

Un-

300,000--

300,000

at

guaran-maturityteed

Corporation
Sumitomo Mitsui Trust Bank,
LimitedLongterm
loans

800,000

Sumitomo Mitsui Banking(Note4)Un-

payableDevelopment Bank of Japan Inc.
The Norinchukin Bank

Nov. 30, 2019

Lump-

600,000

Resona Bank, Limited-

750,000

Sumitomo Mitsui BankingLong-payable Sumitomo Mitsui Trust Bank,

payableAug. 31, 2022

500,000

Resona Bank, Limited

Corporation

Aug. 31, 2021

Nov. 30, 2021

nt
method500,000

800,000--

800,000--

500,000

The Norinchukin Bank

500,000--

500,000 0.86650

The Bank of Fukuoka, Ltd.

700,000--

700,000

Aozora Bank, Ltd.

200,000--

200,000

maturity

Shinkin Central Bank

200,000--

200,000

The Senshu Ikeda Bank, Ltd.

200,000--

200,000

The Shizuoka Bank, Ltd.

200,000--

200,000

Purchase of

The 77 Bank, Ltd.

200,000--

200,000

assets and

The Hiroshima Bank, Ltd.

200,000--

200,000

relatedThe Yamaguchi Bank, Ltd.

200,000--

200,000

expenses

MUFG Bank, Ltd.

1,650,000--

MUFG Bank, Ltd.

200,000--

200,000

Mizuho Bank, Ltd.

950,000--

950,000

1,650,000--

1,650,000

850,000--

850,000

LimitedLumpFeb. 28, 2023

0.62760

500,000--

500,000

Resona Bank, Limited

550,000--

550,000

The Norinchukin Bank

650,000--

650,000

MUFG Bank, Ltd.

700,000--

700,000 0.88470

Development Bank of Japan Inc.

650,000--

650,000 0.88500

Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
LimitedResona Bank, Limited

Un-

sum

Repayment

payment

of loans

Un-atpayableguaran-securedteed

1,650,000 0.61760

Mizuho Trust & Banking Co., Ltd.

Mizuho Bank, Ltd.

Security

Feb. 28, 2022

500,000

Corporation

Use ofproceeds

Feb. 26, 2021

Resona Bank, Limited

Sumitomo Mitsui Trust Bank,

Nov. 30, 2024

0.73975

RepaymeMizuho Trust & Banking Co., Ltd.

Sumitomo Mitsui Banking

1.47450(Note 1)--

expenses

date-

980,000

Feb. 26, 2021

Repayment due(%)-

800,000

0.97300

rate

300,000

Resona Bank, Limited

Corporationinterest

500,000

Mizuho Trust & Banking Co., Ltd.

Sumitomo Mitsui Banking

70

at beginning of period

Amount of

The Norinchukin Bank

Corporation

Repayment
1.11000

increase
periodMUFG Bank, Ltd.
Sumitomo Mitsui Banking

Balance

350,000--

350,000

650,000--

650,000

Nov. 30, 2020

Nov. 30, 2022
0.89470

350,000--

350,000

300,000--

300,000

71

AverageAmount ofcategory

LenderBalanceincreaseat beginning of period

duringperiodBalancedecreaseat end ofduring period

periodrate

Repayment due

(%)

date

(Note 1)

Repayment
methodAmount of

Use ofproceeds

Security

category

LenderBalanceincreaseat beginning of period

duringperiodAmount ofBalancedecreaseat end ofduring period

periodMUFG Bank, Ltd.

750,000--

750,000 1.00850

MUFG Bank, Ltd.

1,810,000--

MUFG Bank, Ltd.

500,000--

500,000

MUFG Bank, Ltd.

440,000--

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

400,000--

400,000

700,000--

700,000--

350,000

Mizuho Trust & Banking Co., Ltd.

300,000--

300,000

Resona Bank, Limited

100,000--

100,000

Mizuho Bank, Ltd.

100,000--

100,000

2,100,000--

2,100,000

450,000--

450,000

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

450,000--

1,000,000--

1,000,000

MUFG Bank, Ltd.

700,000--

700,000

Mizuho Bank, Ltd.

1,100,000--

1,100,000

1,100,000--

1,100,000

Corporation
Mizuho Trust & Banking Co., Ltd.

Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,

450,000--

450,000

500,000--

500,000

Resona Bank, Limited

300,000--

300,000

The Norinchukin Bank

300,000--

300,000

Aozora Bank, Ltd.

200,000--

200,000

The Yamaguchi Bank, Ltd.

100,000--

100,000Long-

MUFG Bank, Ltd.

450,000--

450,000

term

Development Bank of Japan Inc.

600,000--

600,000

loans

The Bank of Fukuoka, Ltd.

200,000--

200,000

100,000--

100,000

The Senshu Ikeda Bank, Ltd.

100,000--

100,000

The Shizuoka Bank, Ltd.

100,000--

100,000

The 77 Bank, Ltd.

100,000--

100,000

The Hiroshima Bank, Ltd.

100,000--

100,000

Mizuho Bank, Ltd.

200,000--

200,000

200,000--

200,000

payable Shinkin Central Bank

Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,--

300,000--

300,000

MUFG Bank, Ltd.

600,000--

600,000 0.57000

MUFG Bank, Ltd.

1,000,000--

Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
Limited

800,000--

800,000

800,000--

800,000

400,000--

400,000

1,560,000--

1,560,000

830,000--

830,000

Mizuho Trust & Banking Co., Ltd.

370,000--

370,000

Resona Bank, Limited

550,000--

550,000

Development Bank of Japan Inc.

370,000--

370,000

The Norinchukin Bank

370,000--

370,000

Aug. 29, 2025

1,600,000 0.31000

600,000--

600,000 0.61000--

600,000

Resona Bank, Limited

400,000--

400,000

Shinkin Central Bank

300,000--

MUFG Bank, Ltd.

1,500,000--

MUFG Bank, Ltd.

800,000--

Mizuho Bank, Ltd.

700,000--

700,000

1,200,000--

1,200,000

The Bank of Fukuoka, Ltd.

500,000--

500,000

Aozora Bank, Ltd.

300,000--

300,000

The Yamaguchi Bank, Ltd.

500,000--

500,000

870,000--

870,000

480,000--

480,000 0.26791

0.67000

0.77880

LimitedResona Bank, Limited

300,000--

300,000

The Norinchukin Bank

210,000--

210,000Long-

MUFG Bank, Ltd.

990,000--

990,000 0.37000

Lump-

Un-

term

MUFG Bank, Ltd.

260,000--

260,000sum

securedloans

Mizuho Bank, Ltd.

550,000--

550,000

paymentUn-payable Mizuho Trust & Banking Co., Ltd.

220,000--

220,000

at

guaran-Development Bank of Japan Inc.

220,000--

220,000

maturityteed

176,000--

176,000

2,352,000--

2,352,000

MUFG Bank, Ltd.

750,000--

Mizuho Bank, Ltd.

1,050,000--

1,050,000

600,000--

600,000

1,050,000--

650,000--

650,000

950,000--

950,000

The Norinchukin Bank

750,000--

750,000

MUFG Bank, Ltd.

650,000--

650,000

Development Bank of Japan Inc.

550,000--

550,000

MUFG Bank, Ltd.

750,000--

Mizuho Bank, Ltd.

1,050,000--

1,050,000

600,000--

600,000

1,050,000--

650,000--

650,000

Resona Bank, Limited

950,000--

950,000

The Norinchukin Bank

750,000--

750,000

MUFG Bank, Ltd.

650,000--

650,000

Development Bank of Japan Inc.

550,000--

550,000

Corporation
Limited

0.45254

Aug. 31, 2020
(Note4)

Feb. 28, 2025

Feb. 27, 2026

Aug. 31, 2021

Lump-

Nov. 30, 2023

0.61380Un-

sum

Repayment

payment

of loans

Un-atpayableguaran-maturity

1,050,000 0.34800

Resona Bank, Limited

Sumitomo Mitsui Banking

Sep. 8, 2026

securedteedAug. 29, 2025

750,000 0.32000

Mizuho Trust & Banking Co., Ltd.

payableSecurity

800,000

relatedof loans

Use ofproceeds

300,000

expensesMizuho Bank, Ltd.

nt
method1,500,000 0.72500

Sumitomo Mitsui Trust Bank,

Mizuho Trust & Banking Co., Ltd.

Nov. 30, 2020-

600,000

Sumitomo Mitsui Trust Bank,

0.29291-

Corporation

Repayment
0.59750

900,000
1,600,000

assets andAug. 30, 2024

1,000,000

900,000

Repayme0.67000

200,000

Limited

300,000

440,000

300,000

Sumitomo Mitsui Trust Bank,

300,000

1,810,000 0.60500-

Corporation

The Norinchukin Bank

(Note 1)-

Sumitomo Mitsui Banking

Resona Bank, Limited

date

-

The Norinchukin Bank

500,000(%)

Purchase ofFeb. 29, 2024

400,000 0.49500

Repayment due-

Sumitomo Mitsui Banking

0.50500

rate

200,000

Mizuho Trust & Banking Co., Ltd.

0.63800

interest

300,000

Development Bank of Japan Inc.

-

Development Bank of Japan Inc.

MUFG Bank, Ltd.

Aug. 31, 2023-

Corporation

payableLimited-Sumitomo Mitsui Banking

Corporation

0.67400-

Mizuho Bank, Ltd.

of loans

Sumitomo Mitsui Trust Bank,

500,000

Mizuho Trust & Banking Co., Ltd.

Nov. 30, 2023

Mizuho Bank, Ltd.

400,000

LimitedSumitomo Mitsui Banking

450,000 0.68030

Mizuho Trust & Banking Co., Ltd.

LimitedMizuho Bank, Ltd.

Repayment
1.01850

350,000

Limited72

Amount of

Averageinterest

Jul. 13, 2022

0.35341

750,000 0.34000

1,050,000 0.41800

May. 31, 2023

0.4262273

AverageAmount ofcategory

LenderBalanceincreaseat beginning of period

duringperiodperioddate(Note 1)--500,000 0.56500--

500,000

Mizuho Bank, Ltd.

100,000--

100,000

The 77 Bank, Ltd.

500,000--

500,000

The Hiroshima Bank, Ltd.

500,000--

500,000

MUFG Bank, Ltd.

1,900,000--

1,900,000 0.70000

Mizuho Bank, Ltd.

4,200,000--

4,200,000

Corporation
Sumitomo Mitsui Trust Bank,
Limited

1,900,000--

1,900,000

1,480,000--

1,480,000

320,000--

320,000

0.63500--

nt
methodUse ofproceeds

Security

category

Lender

0.78300

Feb. 27, 2026

2,400,000

1,000,000--

1,000,000

200,000--

200,000

Mizuho Trust & Banking Co., Ltd.

400,000--

400,000 0.69500

Resona Bank, Limited

300,000--

300,000

The Bank of Fukuoka, Ltd.

300,000--

300,000

The Senshu Ikeda Bank, Ltd.

200,000--

200,000

The 77 Bank, Ltd.

200,000--

200,000

The Yamaguchi Bank, Ltd.

200,000--

200,000-

1,410,000-

1,410,000-

1,200,000-

1,200,000-

1,300,000-

1,300,000 0.28100-

600,000-

600,000-

200,000

Sumitomo Mitsui Banking-

376,000 0.28568

Corporation

MUFG Bank, Ltd.

300,000--

300,000 0.34900

Sumitomo Mitsui Trust Bank,

Mizuho Bank, Ltd.

2,459,000--

260,000--

260,000 0.35900

Mizuho Trust & Banking Co., Ltd.

900,000--

Development Bank of Japan Inc.

565,000-

MUFG Bank, Ltd.

450,000-

Mizuho Bank, Ltd.

1,332,000--

390,000--

Mizuho Trust & Banking Co., Ltd.

term

Resona Bank, Limited-

700,000-

700,000

900,000

loans-

565,000 0.48000

payableShinkin Central Bank-

200,000-

200,000-

450,000 0.56500

MUFG Bank, Ltd.

-

1,000,000-

1,000,000 0.27100

Mizuho Bank, Ltd.

-1,500,000-

1,500,000-

1,230,000-

1,230,000-

200,000-

200,000

1,332,000--

500,000--

500,000 0.29900

Mizuho Bank, Ltd.

500,000--

500,000

Sumitomo Mitsui Trust Bank,
Limited

-

-

-

-

500,000
700,000 0.30900

200,000--

200,000

Resona Bank, Limited

200,000--

200,000

100,000--

MUFG Bank, Ltd.

1,000,000--

Mizuho Bank, Ltd.

800,000--

800,000

700,000--

700,000

400,000--

400,000 0.40580

Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
Limited

100,000
1,000,000 0.39580

Mizuho Trust & Banking Co., Ltd.

400,000--

400,000

Resona Bank, Limited

200,000--

200,000

The Norinchukin Bank

200,000--

200,000

Shinkin Central Bank

200,000--

200,000 0.41388

MUFG Bank, Ltd.

1,000,000--

1,000,000 0.55600

Mizuho Bank, Ltd.

800,000--

800,000

700,000--

700,000

200,000--

200,000 0.56600

Mizuho Trust & Banking Co., Ltd.

400,000--

400,000

Resona Bank, Limited

200,000--

200,000

The Norinchukin Bank

500,000--

500,000

Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
Limitedsum

Repayment

securedpayment

of loans

Un-atpayableguaran-maturity
May. 31, 2023

700,000

Sumitomo Mitsui Banking
Un-

Lump-

1,350,000

Mizuho Trust & Banking Co., Ltd.
The Norinchukin Bank

Feb. 26, 2027

390,000 0.57500

1,350,000

500,000

LimitedLong-

MUFG Bank, Ltd.

Corporation(Note 1)1,400,000 0.68500-

Sumitomo Mitsui Banking

date

-

-

Mizuho Trust & Banking Co., Ltd.

periodRepayment due(%)-

Mizuho Bank, Ltd.

Aug. 30, 2024

during period

rate

-

LimitedAug. 31, 2021

at end of-

Sumitomo Mitsui Trust Bank,

Aug. 31, 2027

decreaseinterest

2,400,000

200,000

Corporation

duringBalance

1,400,000

376,000

Sumitomo Mitsui Banking

at beginning of period

Amount ofMizuho Bank, Ltd.

Development Bank of Japan Inc.

Corporation

increase

MUFG Bank, Ltd.

Sumitomo Mitsui Banking

500,000

2,459,000

BalanceperiodCorporation

0.23791
500,000

RepaymeAmount ofMizuho Trust & Banking Co., Ltd.

Sumitomo Mitsui Banking

74

during period(%)

500,000

Sumitomo Mitsui Banking

payableat end of

Repayment due

500,000

Mizuho Bank, Ltd.

loans

decreaserate

MUFG Bank, Ltd.

Corporation

term

Balance

MUFG Bank, Ltd.

Sumitomo Mitsui Banking

Long-

Amount of

Averageinterest

Aug. 30, 2024

teed

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

-

600,000-

600,000

Resona Bank, Limited-

800,000-

800,000

The Norinchukin Bank-

900,000-

900,000

0.42000

The Bank of Fukuoka, Ltd.

-

400,000-

400,000

Shinkin Central Bank-

300,000-

300,000

The 77 Bank, Ltd.

-

300,000-

300,000

The Yamaguchi Bank, Ltd.

-

300,000-

MUFG Bank, Ltd.

-

1,000,000-

1,000,000 0.41000

MUFG Bank, Ltd.

-

1,170,000-

1,170,000 0.46000

Development Bank of Japan Inc.

-

900,000-

900,000

The Senshu Ikeda Bank, Ltd.

-

300,000-

300,000

201,932,500

47,470,000

24,660,000

224,742,500

Total

Repayment
methodUse ofproceeds

Security

Feb. 29, 2028

Aug. 31, 2023

Lump-

Un-

sum

Repayment

payment

of loans

Un-atpayableguaran-maturity

securedteed

Feb. 27, 2026

300,000

0.44000

Feb. 28, 2029

(Note 1) Average interest rate is the weighted average interest rate during the period. Interest rates are rounded to six decimal
places. The interest rates for loans hedged by interest rate swap transactions used to hedge the risk of interest rate
fluctuations are the interest rates reflecting the effect of the interest rate swaps.

(Note 2) Early repayment was made on July 12, 2019.
(Note 3) Early repayments were made on July 12, 2019 and on September 30, 2019.

(Note 4) As of the end of the fiscal period under review, these loans are recorded as “Current portion of long-term loans payable” in“Current liabilities” on the balance sheet.
Aug. 31, 2026

(Note 5) The following is the maturity schedule of long-term loans within five years of the balance sheet date.

Due in1 year or lessLong-term loans payable

27,892,500(Thousands of yen)
1 to 2 years
29,710,000

2 to 3 years
39,230,000

3 to 4 years
31,310,000

4 to 5 years
21,735,000

75

<MEMO>

76

77

Unitholder Information

Unitholder Information

Unitholder Memo

Change in Investment Unit Price and Trading Volume (December 3, 2014 to November 29, 2019)
SHR´s investment unit price (left axis)

TSE REIT Index

Trading volume (right axis)(JPY)
110,000(Unit)
400,000

100,000

Unitholder Memo
Account Closing Date

End of April and October of each year

Record Date for Determining
Distribution Payment

End of April and October of each year
(Cash distribution will be paid out within 3 months from the record date.)

General Meeting of Unitholders

General meeting of unitholders shall be convened on January 1, 2020 and onwards without delay,and subsequently be convened on January 1 every 2 years and onwards without delay. In addition,
the general meetings of unitholders may be held from time to time when it is necessary.

Date to Determine Exercising of
Voting Rights by Unitholders

Date stipulated in Article 12 of the Articles of Incorporation

Listed Stock ExchangeTokyo Stock Exchange, Inc. (Securities Code: 3309)

Newspaper Posting Public Notice

Nikkei Inc.

Transfer Agent

Mizuho Trust & Banking Co., Ltd.

Contact

Stock Transfer Agency Department,
Mizuho Trust & Banking Co., Ltd.
1-2-1 Yaesu, Chuo-ku, Tokyo, 103-0028
Phone: 0120-288-324 (Toll Free only in Japan)

300,000
90,000200,000

80,00070,000100,000
60,00050,0000Dec. Mar. Jun.
2014 2015

Sep. Dec. Mar. Jun.
2016

Sep. Dec. Mar. Jun.
2017

Sep. Dec. Mar. Jun.
2018

Sep. Dec. Mar. Jun.
2019

Sep. Dec.

(Note 1) Closing price and trading volume of the investment unit of SHR in a regular trading session at Tokyo Stock Exchange, Inc. are indicated.
(Note 2) As a two-for-one split of investment units was implemented on May 1, 2018, investment units have been traded at halved (the ex-rights) unit price on and after April 25, 2018. In consideration of the impact of the split, the above graph is based on actual figures of “Investment Unit Price” for April 24, 2018 and earlier being divided by two and actual figures of “Trading
Volume” being multiplied by two.
(Note 3) Change in TSE REIT Index is indicated after converting the closing price of TSE REIT Index on the listing date of SHR (December 3, 2014) to JPY 66,000, the amount gained after adjusting
the two-for-one split to the closing price of the investment unit of SHR in a regular trading session. Furthermore, TSE REIT Index refers to the weighted average-type index of market
capitalization of all REIT counters listed on the Tokyo Stock Exchange (TSE).

Concerning Procedures to Change Registered Address, etc.

Unitholder Composition

As of the end of the 10th fiscal period ended October 2019

Financial institutions (including securities companies)
Foreign firms, etc.
Individuals and others

297,697 units (6.9%)
853,469 units (19.9%)
275,568 units (6.4%)

2,861,932 units (66.7%)

Number ofinvestment units
owned by owner type
Number ofunitholders
by owner type

227 persons (1.2%)
340 persons (1.8%)

Concerning Receiving Cash Distribution
You can receive your “cash distribution” by bringing your “distributions receipt” to a nearby Japan Post Bank or post office.
In cases where the reception period has elapsed, please specify how you wish to receive dividends on the back of the “distributions receipt,” and then mail it to the place of contact mentioned above, or receive cash distribution directly at the service
counter of the head office/branch of Mizuho Trust & Banking Co., Ltd. In addition, with respect to future cash distribution, if
you wish to receive them through transfer to a bank account you specify or other measures, please contact your securities
company, etc.
Please receive your “cash distribution” on an early date as we will be unable to pay them if they are not received within 3
years from the commencement date of payments of cash distribution.

Total: 4,288,666 units

Total: 18,986 persons

Please contact your securities company to change registered address, name, etc.

Other domestic firms

18,193 persons (95.8%)

226 persons (1.2%)(Note) Total of ratios may not add up to 100.0% as ratios are indicated as rounded to the first decimal place.

Website of Sekisui House Reit, Inc.

IR Calendar
Closing month of
FP ending April

Announcement offinancial results for FP
ending April

Apr.

Jun.
May

Closing month of
FP ending October

Announcement offinancial results for FP
ending October

Oct.

Dec.

Aug.
Jul.

Sep.

Commencement of the payment of cash distributions for FP ending April
Dispatch of Semi-Annual Report for FP ending April (Japanese version)
78

Nov.

Guide to website

http://sekisuihouse-reit.co.jp/en/
Feb.

Jan.

Mar.

Commencement of the payment of cash distributions for FP ending October
Dispatch of Semi-Annual Report for FP ending October (Japanese version)

SHR strives for timely and accurate information disclosure via
the website. IR information is also made available to subscribers
via e-mail delivery (Japanese only) to provide access to thelatest information.
The latest cash distribution, financial, investment property
and other information useful to investors are made available
for viewing on the website.

79