18th

Semi-Annual Report
18th Fiscal Period

3-1-31 Minami-Aoyama, Minato-ku, Tokyo

http://www.shsi-reit.co.jp/eng/(from April 1, 2014 to September 30, 2014)

With an aim to realize maximum value for its
Sekisui House SI Residential Investment Corporation
centers on high-quality rental residential properties
for which Sekisui House, Ltd., the main sponsor,
Features of the Investment Corporation

Outline of Portfolio Development Policy

Residential Portfolio Focused on Greater Tokyo
that Has a Deep and Broad Demand Base
Investment Ratio of
Residential Properties

Asset Size
Total Acquisition
Price

186.0
106

¥

Number of owned
properties

billionRatio of residential
properties

properties

Number of residential
properties(as of January 31, 2015)

Investment Ratio of Greater Tokyo
for Residential Properties

91.1
99

%

Ratio of Greater Tokyo forresidential properties

properties

Number of residential
properties in Greater Tokyo(as of January 31, 2015)

unitholders,endeavors to build a portfolio thatplanned and developed by the Sekisui House Group,
serves as the core company.

72.1
67

%

properties(as of January 31, 2015)

Invests in real estate-related assets that are mainly used
residences(Note)

as

Positions Greater Tokyo / Major Urban Area as the focusedinvestment area, while conducting diversified investment in Greater
Tokyo / Other Urban Areas and Major Cities Nationwide

Portfolio of Relatively New Properties Achieving High Occupancy
Occupancy Ratio
Entireportfolio

96.8%

Residential
properties(as of December 31, 2014)

Invests in properties comprised of a variety of residential types,
primarily the Single and Compact Type residences

Average Property Age

95.9

%

Entireportfolio

8.1

year

Residential
properties(as of January 31, 2015)

7.7

year
(Note) “Mainly used” means that a majority of the total exclusive area of the relevant real estate-related asset is allocated for a specific use.

Credit Ratings Based on Stable Financial Base
Status of Credit Ratings
Japan Credit Rating Agency, Ltd. (JCR)(Long-term issuer rating)AA(Stable)

Rating and Investment Information, Inc. (R&I)(Issuer rating)(as of January 31, 2015)

1

A+(Stable)2

Sekisui House SI Residential Investment Corporation

To Our Unitholders
Dear Investors,

Performance Highlights
Distribution per Unit

I would like to express our sincere gratitude for your continued and loyal patronage.
Sekisui House SI Residential Investment Corporation (the “Investment Corporation”) aims to further enhance its
profitability through expanding its asset size by building a portfolio that is centered on the high-quality residential
properties planned and developed by the Sekisui House Group, for which Sekisui House, Ltd. ("Sekisui House"),the main sponsor, serves as the core company, while taking into account the distribution levels. Let me report toyou the business results of the Investment Corporation for the fiscal period ended September 2014 (18th fiscal
period).
In the fiscal period under review, the Investment Corporation newly acquired four properties in May 2014 using
the proceeds obtained from issuing new investment units through public offering conducted at the beginning of
the period. They comprise Esty Maison KINSHICHO II, Esty Maison OJIMA, Prime Maison FUJIMIDAI and Esty
Maison TSURUMAI, purchased from a bridge fund and the Sekisui House Group. Consequently, the number ofowned properties increased to 99 by the end of the fiscal period, with the asset size totaling 171,099 million yen,
an increase by approximately 12.8% compared with the end of the 17th fiscal period and about 1.7 times thesize at the time of the sponsor change in 2010.

Osamu Minami
Executive Director, Sekisui House SI Residential
Investment Corporation
President, Sekisui House SI Asset Management, Ltd.

In July, the Investment Corporation newly concluded agreements concerning preferential negotiation rights with
Sekiwa Real Estate Tohoku, Ltd. and Sekiwa Real Estate Chugoku, Ltd. This resulted in pipeline support
agreements being concluded with all Sekiwa Real Estate companies (7 companies), comprehensively covering
the investment target areas of the Investment Corporation through the nationwide networks of the Sekisui HouseGroup.
Moreover, the period-end occupancy ratio of the entire portfolio stood at 97.1% while the period averageoccupancy ratio was 96.7%, both maintaining high levels.
On the financial side, the Investment Corporation newly borrowed 8.7 billion yen to partly fund the acquisition of
the above-mentioned properties. In August 2014, we also conducted refinancing of borrowings totaling 12.8
billion yen. The refinancing activities included the issuance of the Fifth Series Unsecured Investment Corporation
Bond (3 billion yen).
As a result of these endeavors, the Investment Corporation posted operating revenue of 5,591 million yen,operating income of 2,463 million yen and net income of 1,950 million yen. Furthermore, we conducted a fivefor-one split of investment units on April 1, 2014, intending to create an environment which should make it easierfor retail investors to make investments. Accordingly, distribution per unit stood at 2,131 yen.
As already announced, the Investment Corporation partially revised its Articles of Incorporation through resolution
at its Sixth General Meeting of Unitholders held in June 2014, in order to transform itself from a “diversified REIT
centering on residential properties” to a “REIT specialized in residential properties.” Moreover, the Investment
Corporation changed its trade name to “Sekisui House SI Residential Investment Corporation” in addition to
making other arrangements, and relocated its head office together with the asset management company.
Entering the 19th fiscal period ending March 2015, we conducted another public offering, which marks the fourth
public offering conducted in the three years since the sponsor change.
Going forward, we will strive to maximize unitholder value by promoting steady expansion of asset size throughutilization of the comprehensive strengths of Sekisui House, among other measures.
We appreciate your continuing support.

18th Fiscal Period Ended September 2014

Cash distribution per unit

Business Results and Distribution
Settlement Date

Sep. 2012

Mar. 2013

Sep. 2013

Mar. 2014

Sep. 2014

Mar. 2015

Fiscal Period

14th FP

15th FP

16th FP

17th FP

18th FP

19th FP (Forecast)

Operating revenue (millions of yen)

3,567

4,038

4,688

4,952

5,591

6,252

Operating income (millions of yen)

1,663

1,908

2,179

2,242

2,463

2,771

Ordinary income (millions of yen)

1,193

1,435

1,684

1,767

1,952

2,249

Net income (millions of yen)

1,191

1,433

1,681

1,765

1,950

2,247

2,070 (10,351)

2,091 (10,459)

2,107 (10,537)

2,212 (11,062)

2,131 (10,655)

2,130 (10,650)

Cash distribution per unit (yen)(Note 1) The values of respective items in the 19th fiscal period ending March 2015 (forecast) are the figures as of November 17, 2014 calculated under certain assumptions. The actual operating
revenue, operating income, ordinary income, net income and distribution per unit may be subject to change due to such factors as additional acquisitions or sales of real properties in the
future, changes in the real estate and other markets, and changes in the asset management environment and other conditions surrounding the Investment Corporation. In addition, theInvestment Corporation does not guarantee any actual results or distribution amount in providing the forecast figures. Furthermore, the Investment Corporation executed a five-for-one splitof its investment units on April 1, 2014. Taking into account the effect of the investment unit split, the distribution per unit for the fiscal period ended March 2014 (17th fiscal period) andbefore represents the figure obtained by dividing the actual distribution per unit for each period (figure in parenthesis) by 5. For the fiscal period ended September 2014 (18th fiscal period)
and after, the figure in parenthesis for each period indicates the value obtained by multiplying the actual distribution per unit or the forecast by 5. The same follows hereafter.
(Note 2) With regard to the 151 million yen (planned) as gain on sale of b-town Jingumae II for the 19th fiscal period ending March 2015, the Investment Corporation assumes to record 78 million yen(planned) as reserve for reduction to the extent applicable to the Special Provisions for Taxation on Investment Corporations under Article 67-15 of the Act on Special Measures Concerning
Taxation and the Special Measures in Case Land or Other Property is Acquired in Advance in 2009 or 2010 under Article 66-2 of the said law. However, the actual amount of the internal
reserve may be subject to change.

Changes in Business Results● Operating Revenue / Net Income● Cash Distribution per Unit
Operating revenue(millions of yen)

6,000
5,000
4,000

Net income(10,351)

4,952

4,688

(yen)

2,500

5,591

2,000

Business Results andCash Distributions

・Operating revenue: ¥5,591 million, operating income: ¥2,463 million, net income: ¥1,950 million
・Cash distribution per unit: ¥2,131 (up 0.5% over initial forecast)・Procured approximately ¥10.7 billion in April 2014 through public offering, the third public offering in three consecutive years

Financing Activities

・Refinanced ¥12.8 billion in existing borrowings that matured in August 2014

3

2,091

(10,537)

2,107(11,062)

2,212(10,655)

2,131

1,500

2,000
1,191

1,433

1,681

1,765

1,950

1,000
500

1,000
0

0
14th FP
15th FP
16th FP
17th FP
18th FP(Sep. 30, 2012) (Mar. 31, 2013) (Sep.30, 2013) (Mar. 31, 2014) (Sep.30, 2014)

Table of Contents
1 Features and Investment Policy
3

To Our Unitholders

4

Performance Highlights

5 Portfolio Management

・Conducted new borrowings (¥8.7 billion) to fund the acquisition of four residential properties purchased in May 20147

Portfolio Map

9Itemized Portfolio Assets

・Acquired four properties in total, comprising two residential properties from the Sekisui House Group and the other two
residential properties by executing the preferential negotiation rights obtained in March 2013

(10,459)

3,000

・Issued the Fifth Series Investment Corporation Bonds (10-year bonds / ¥3.0 billion) as part of the above-mentioned refinancing

・Occupancy ratio (entire portfolio): 97.1% (the end of 18th fiscal period (September 30, 2014)
Portfolio Management Status

2,070

4,038

3,567

14th FP
15th FP
16th FP
17th FP
18th FP(Sep. 30, 2012) (Mar. 31, 2013) (Sep.30, 2013) (Mar. 31, 2014) (Sep.30, 2014)

Summary of Management Results for the 18th Fiscal Period Ended September 2014

¥2,13113 Management Discussion and Analysis

18 Financial Section
19 Financial Statements
I . Balance Sheet
II . Statement of Income and Retained Earnings
III. Statement of Changes in Net Assets
IV. Statement of Cash Distributions
V . Statement of Cash Flows

25 Notes to Financial Statements
45 Independent Auditor’s Report		

4

Sekisui House SI Residential Investment Corporation

Portfolio Management
Qualitative Improvement of the Residential Portfolio

Residence

87.6％

11.6％
88.4％

89.8％

50

Diversification statusby property age

70.9％

Ratio of residential properties increased0

End of 9th FP(Mar. 31, 2010)

End of 15th FP(Mar. 31, 2013)

End of 16th FP(Sep.30, 2013)■ Greater Tokyo /Major Urban Areas

Diversification status
by area

84.3％

12.4％

End of 17th FP (Mar. 31, 2014)
Residential portfolio (totaling 87 properties)

10.2％

End of 17th FP(Mar. 31, 2014)

End of 18h FP(Sep.30, 2014)

Turned to unrealized gain at the end of the 17th fiscal period
Unrealized
gain/loss-10.1billion-4.2billion-2.4 billion+1.4 billion+5.9 billion

Unrealized
gain/loss ratio-10.3%-3.4 %-1.7%+1.0 %+3.6%

The entire portfolio’s unrealized gain further increased at the end of the 18th fiscal period(Note) The unrealized gain/loss ratio is calculated by using the following formula and is rounded to the nearest first decimal place.
Unrealized gain / loss ratio = Period-end unrealized gain / loss ÷ Period-end book value
Period-end unrealized gain / loss = Real estate appraisal value of owned assets at the end of period – Period-end book value

Changes in Occupancy Ratio

Diversification status
by walking distance to station

15.7％

29.1％

Retail property

Diversification status
by floor area

（％）
100

End of 18th FP (Sep. 30, 2014)
Residential portfolio (totaling 91 properties)■ Greater Tokyo / Other Urban Areas

After public offering in 19th FP
Residential portfolio (totaling 99 properties)■ Major Cities Nationwide (Classified according to the area where each property is located)

26.0％

25.6％
Greater Tokyo

27.9％
Greater Tokyo

74.4％

3.9％

74.0％

3.4％

70.5％
Of these,Tokyo’s 23 wards

Further promoted qualitative improvement of the portfolio
through the acquisition of high-quality residential properties

Ratio of Residential Properties Increased in Accordance with Expansion of Asset Size, Turning Unrealized Loss to Unrealized Gain

Greater Tokyo

70.6％

63.4％

72.1％

3.1％

Of these,Tokyo’s 23 wards

69.0％
Of these,Tokyo’s 23 wards

64.4％

63.5％

■ Less than 5 years ■ 5 years to less than 10 years ■ 10 years or more (Classified according to the property age with November 17, 2014 (announcement of business results) as the reference date)

10.5％

16.1％
Averageproperty age

7.9 years

Averageproperty age

73.4％

15.0％

9.2％

16.5％

8.0 years

15.6％

Averageproperty age

74.3％

7.5 years
69.4％■ Within 3 minutes ■ More than 3 minutes to within 5 minutes ■ More than 5 minutes to within 10 minutes ■ More than 10 minutes (Classified according to the walking minutes from station for each property)

9.6％

9.5％

31.1％
Within10 minute walk

90.4％

32.7％

Within10 minute walk

26.6％

■ Less than 30m2

■ 30m2 to less than 50m2

21.9％

0.7％
Average area
per unit

27.9％

38.0 ㎡

9.9％

31.8％

28.6％

■ 50m2 to less than 100m2

90.5％

Within10 minute walk

30.1％

26.8％

33.0％

90.1％

30.4％

■ 100m2 or more (Classified according to the area of each residential unit)

23.1％

0.7％
Average area
per unit

49.5％
27.3％

38.4 ㎡

24.6％

0.7％
Average area
per unit

48.9％
27.6％

39.1 ㎡

47.0％(Note 1) The “average property age” is calculated by seeking the weighted average of the building age of each property with the investment ratio calculated based on the acquisition price, rounded down to the nearest first decimal place..
(Note 2) The “average area per unit” is calculated based on the total leasable residential area of owned properties and the total number of rentable residential units as of each period, rounded down to the nearest first decimal place.

Aiming to secure rental income stably over the long term, the Investment Corporation collaborated with the property management companies to focus on managing
properties in pursuit of intensively controlled and more efficient leasing management. As a result of this endeavor, the occupancy ratio have remained stable.

（％）
100

99.8
97.5

95

99.8

99.8

99.8

100.0

100.0

96.4

96.2

96.6

96.8

96.8

95.6

95.8

95.9

96.6
95.2

95.1

99.9
97.1

Expansion of the Pipeline Support Agreements with the Sekisui House Group
Apart from Sekisui House, the Investment Corporation concluded pipeline support agreements with Sekiwa Real Estate Tohoku, Ltd. and Sekiwa Real Estate Chugoku, Ltd. on July 31, 2014.
This resulted in the pipeline support agreements having been concluded with all the Sekiwa Real Estate companies (7 companies), comprehensively covering the investment target areas of the Investment Corporation.

Scheme for Obtaining Property Information
Pipeline support
agreements

96.3
Sekisui House
Sekiwa Real Estate Kanto
Sekiwa Real Estate Kansai

900

End ofMar. 2014

17th FPEnd ofApr. 2014

End of
May 2014

End ofJun. 2014

Retail property
End ofJul. 2014

Sekisui House SI Asset Management

Spring Investment

Proprietary channels of
the asset management company

Overview of Pipeline Support Agreements

End ofAug. 2014

End ofSep. 2014

18th FP

Granting of preferential
negotiation rights forowned properties, etc.

Provision of information
concerning properties
owned by third parties

Preferential provision of
information concerning saleof properties in connection
with discretionary
investment business andinvestment advisory business

Name of the Agreement

Party to the Agreement

Agreement Concerning Preferential Negotiation Rights, Etc.

Sekisui House, Sekiwa Real Estate and Sekiwa Real Estate Kanto

Yes

Yes

ー

Agreement Concerning Preferential Negotiation Rights

Sekiwa Real Estate Tohoku, Sekiwa Real Estate Chubu, Sekiwa Real Estate Kansai,
Sekiwa Real Estate Chugoku and Sekiwa Real Estate Kyushu

Yes

ー

ー

Agreement Concerning Preferential Provision of Property Information

Spring Investment

ー

Yes

Yes

Entire portfolio(Note) The occupancy ratio in the above graph indicate the ratio of total leased space to the total leasable space in each category for the properties of the corresponding category held by
the Investment Corporation as of the end of each month from March 2014 to September 2014, rounded to the nearest first decimal place.

5

Sekiwa Real Estate

Sekiwa Real Estate Tohoku
Sekiwa Real Estate Chubu
Sekiwa Real Estate Chugoku Sekiwa Real Estate Kyushu

Stable occupancy is maintained continuously

Residence

Pipeline support
agreement

6

Sekisui House SI Residential Investment Corporation

Portfolio Map
In order to mitigate the risks associated with unipolar concentration of the portfolio, including risks related to local economy andearthquakes, the Investment Corporation positions Greater Tokyo / Major Urban Area as the focused investment area, while conducting
diversified investment in Greater Tokyo / Other Urban Areas and Major Cities Nationwide.
Greater Tokyo /Major Urban Areas

Major Cities Nationwide (Osaka City)
Residence-20
Residence-23
Residence-28
Residence-29
Residence-41
Residence-59
Residence-60
Residence-72
Residence-73

Esty Maison KYOBASHI
Esty Maison MINAMIHORIE
Esty Maison JOTO
Esty Maison TSUKAMOTO
Esty Maison NISHINAKAJIMA
Prime Maison YUHIGAOKA
Prime Maison KITATANABE
Esty Maison KAWARAMACHI
Esty Maison NISHITENMA

Residence-1
Residence-3
Residence-4
Residence-5
Residence-6
Residence-8
Residence-10
Residence-12
Residence-14
Residence-15
Residence-16
Residence-17
Residence-19
Residence-21
Residence-22
Residence-24
Residence-25
Residence-26
Residence-27
Residence-30
Residence-31
Residence-33

Major Cities Nationwide (Fukuoka City)
Residence-35 Esty Maison TENJINHIGASHI I
Residence-36 Esty Maison TENJINHIGASHI II
Residence-46 Esty Maison HAKATAHIGASHI
Residence-47 Esty Maison KAMIGOFUKUResidence-55 MAST HAKATA
Residence-61 Prime Maison MOMOCHIHAMAResidence-67 Prime Maison TERIHA
Residence-93 Esty Maison YAKUIN
Residence-103 Prime Maison CENTRAL PARK

Esty Maison GINZA
Esty Maison AZABUNAGASAKA
Esty Maison EBISU II
Esty Maison EBISU
Esty Maison KANDA
Esty Maison KITASHINJUKU
Esty Maison ASAKUSA KOMAGATA
Esty Maison KAWASAKI
Esty Maison SHINKAWASAKI
Esty Maison YOKOHAMA
Esty Maison KAMEIDO
Esty Maison MEGURO
Esty Maison SUGAMO
Esty Maison MEGUROHONCHO
Esty Maison HAKURAKU
Esty Maison GOTANDA
Esty Maison OISENDAIZAKA
Esty Maison SHINAGAWA SEASIDE
Esty Maison MINAMIAZABU
Esty Maison KAWASAKIⅡ
Esty Maison AZABUJUBAN
Esty Maison ITABASHIHONCHO

Residence-34
Residence-39
Residence-42
Residence-43
Residence-44
Residence-45
Residence-48
Residence-53
Residence-54
Residence-56
Residence-57
Residence-62
Residence-63
Residence-64
Residence-69
Residence-70
Residence-71
Residence-74
Residence-75
Residence-76
Residence-77
Residence-78

Esty Maison OIZUMIGAKUEN
Esty Maison HIGASHISHINAGAWA
Esty Maison ITABASHIKUYAKUSHOMAE
Esty Maison MUSASHIKOYAMA
Esty Maison SENDAGI
Esty Maison YOTSUYASAKAMACHI
Esty Maison SANGENJAYA
Esty Maison SANGENJAYA II
Esty Maison ITABASHI C6
Esty Maison KINSHICHO
Esty Maison MUSASHIKOGANEI
Esty Maison AKIHABARA
Esty Maison SASAZUKA
Prime Maison GINZA EAST
Esty Maison SENGOKU
Esty Maison DAIZAWA
Esty Maison TOGOSHI
Esty Maison SHIROKANEDAI
Esty Maison HIGASHISHINJUKU
Esty Maison MOTOAZABU
Esty Maison TORITSUDAIGAKU
Esty Maison MUSASHIKOYAMA II

Residence-79 Esty Maison NAKANO
Residence-80 Esty Maison SHINNAKANO
Residence-81 Esty Maison NAKANOFUJIMICHO
Residence-82 Esty Maison TETSUGAKUDO
Residence-83 Esty Maison KOENJI
Residence-84 Esty Maison OSHIAGE
Residence-85 Esty Maison AKABANE
Residence-86 Esty Maison OJI
Residence-87 Prime Maison WASEDA
Residence-88 Prime Maison HATCHOBORIResidence-89 Prime Maison JINBOCHO
Residence-90 Prime Maison GOTENYAMA EAST
Residence-91 MAST LIFE AKIHABARA
Residence-94 Esty Maison KINSHICHO II
Residence-95 Esty Maison OJIMA
Residence-98 Prime Maison MORISHITA (Acquired in 19th FP)
Residence-99 Prime Maison SHINAGAWA (Acquired in 19th FP)
Residence-104 MAST LIFE YAHIRO (Acquired in 19th FP)
Residence-105 Prime Maison EBISU (Acquired in 19th FP)
b-town JINGUMAE Ⅱ (Sold in 19th FP) (Note)
Retail-2
b-town MINAMIAOYAMA
Retail-4
b-toss IKEBUKURO
Retail-7(Acquired in 19th FP)

Greater Tokyo / Other Urban Areas

Residence-11
Residence-18
Residence-40
Residence-50
Retail-5
Retail-8

Esty Maison MACHIDA
Esty Maison YACHIYO MIDORIGAOKA
Esty Maison HACHIOJIMINAMINO
Prime Maison MUSASHINONOMORI
KOJIMA NEW KAMIFUKUOKATEN
Joy Square YUGAWARA

Major Cities Nationwide (Nagoya City)
Residence-13
Residence-51
Residence-52
Residence-58
Residence-65
Residence-66
Residence-68
Residence-92
Residence-96
Residence-97

Esty Maison IMAIKE
Prime Maison HIGASHISAKURA
Prime Maison KAYABAKOEN
Prime Maison GOKISO
Prime Maison TAKAMI
Prime Maison YADAMINAMI
Esty Maison HIGASHISHIRAKABE
Esty Maison AOIPrime Maison FUJIMIDAI
Esty Maison TSURUMAI

Major Cities Nationwide (Kyoto City, Sapporo City, Hamamatsu City and other areas)

Residence-37
Residence-100
Residence-101
Residence-102
Retail-1
Retail-3
Retail-9

Esty Maison SHIJONISHINOTOIN
Prime Maison ODORI KOEN (Acquired in 19th FP)
Prime Maison MINAMI 2-JO (Acquired in 19th FP)
Prime Maison KAMOKAMOGAWA (Acquired in 19th FP)
HAMAMATSU PlazaRINKU HAGURAZAKI Plaza
Bell Plaza Shopping Center(Note) b-town JINGUMAE II was sold on October 3, 2014.

78

Sekisui House SI Residential Investment Corporation

Itemized Portfolio Assets
The following table provides details of the assets (real estate and trust beneficiary interests in real estate as major entrusted property, etc.) owned by theInvestment Corporation as of September 30, 2014.
Property Name

Location (residence indication)

Form of OwnershipTotal
rentable area(m2)

Appraisal
Value at End ofBook Value
Period (Note 1) (millions of yen)(millions of yen)

Location (residence indication)

Form of OwnershipTotal
rentable area(m2)

Appraisal
Value at End ofBook Value
Period (Note 1) (millions of yen)(millions of yen)

Residence-59 Prime Maison YUHIGAOKA

5-4-13 Ueshio, Tennoji-ku, Osaka-shi, Osaka

Trust beneficiary interests

2,040.35

851

Residence-60 Prime Maison KITATANABE

4-9-17 Kitatanabe, Higashisumiyoshi-ku, Osaka-shi, Osaka

Trust beneficiary interests

1,798.97

553

532

797

Residence-1

Esty Maison GINZA

3-11-19 Ginza, Chuo-ku, Tokyo

Trust beneficiary interests

5,515.43

5,810

4,842

Residence-61 Prime Maison MOMOCHIHAMA

3-9-1 Momochihama, Sawara-ku Fukuoka-shi, Fukuoka

Trust beneficiary interests

7,514.76

1,950

1,816

Residence-3

Esty Maison AZABUNAGASAKA

5-13-12 Roppongi, Minato-ku, Tokyo

Trust beneficiary interests

2,019.10

1,590

1,649

Residence-62 Esty Maison AKIHABARA

3-4-2 Ueno, Taito-ku, Tokyo

Trust beneficiary interests

2,324.65

1,760

1,567

Residence-4

Esty Maison EBISU II

4-13-1 Higashi, Shibuya-ku, Tokyo

Trust beneficiary interests

2,062.10

1,820

1,850

Residence-63 Esty Maison SASAZUKA

1-61-17 Sasazuka, Shibuya-ku, Tokyo

Trust beneficiary interests

3,701.70

2,980

2,839

653

Residence-64 Prime Maison GINZA EAST

1-2-1 Tsukiji, Chuo-ku, Tokyo

Trust beneficiary interests

6,177.20

5,580

5,168

1,249

Residence-65 Prime Maison TAKAMI

2-6-7 Takami, Chikusa-ku, Nagoya-shi, Aichi

Trust beneficiary interests

2,016.79955

901

3-11-7 Yadaminami, Higashi-ku, Nagoya-shi, Aichi

Trust beneficiary interests

2,168.59

749

712

Residence-5
Residence-6

Esty Maison EBISU
Esty Maison KANDA

1-13-4 Hiroo, Shibuya-ku, Tokyo
2-3-4 Kandata-cho, Chiyoda-ku, Tokyo

Trust beneficiary interests
Trust beneficiary interests

781.02
1,706.54

774
1,380

1-28-17 Kita-Shinjuku, Shinjuku-ku, Tokyo

Trust beneficiary interests

1,881.19

1,430

1,197

Residence-66 Prime Maison YADAMINAMI

Residence-10 Esty Maison ASAKUSA KOMAGATA

1-10-9 Komagata, Taito-ku, Tokyo

Trust beneficiary interests

2,978.28

1,950

1,690

Residence-67 Prime Maison TERIHA

1-3-7 Kashiiteriha, Higashi-ku, Fukuoka-Shi, Fukuoka

Trust beneficiary interests

6,728.20

1,220

1,103

Residence-11 Esty Maison MACHIDA

2-1-17 Hara-machida, Machida-shi, Tokyo

Trust beneficiary interests

3,090.89

1,450

1,140

Residence-68 Esty Maison HIGASHISHIRAKABE

3-9-36 Yoshino, Higashi-ku, Nagoya-shi, Aichi

Trust beneficiary interests

4,014.07

1,440

1,337

Residence-12 Esty Maison KAWASAKI

14-24 Ogawa-cho, Kawasaki-ku, Kawasaki-shi, Kanagawa

Trust beneficiary interests

3,741.01

2,280

1,890

Residence-69 Esty Maison SENGOKU

4-6-17 Sengoku, Bunkyo-ku, Tokyo

Trust beneficiary interests

1,498.13

1,190

1,111

270

Residence-70 Esty Maison DAIZAWA

2-39-13 Daizawa, Setagaya-ku, Tokyo

Trust beneficiary interests

2,352.90

1,970

1,928

944

Residence-71 Esty Maison TOGOSHI

1-25-5 Togoshi, Shinagawa-ku, Tokyo

Trust beneficiary interests

1,943.17

1,520

1,412

3-2-10 Kawaramachi, Chuo-ku, Osaka-shi, Osaka

Trust beneficiary interests

3,486.48

1,790

1,646

Residence-8

Esty Maison KITASHINJUKUResidence-13 Esty Maison IMAIKE
Residence-14 Esty Maison SHINKAWASAKI

3-12-28 Imaike, Chikusa-ku, Nagoya-shi, Aichi
1-4 Furuichiba, Saiwai-ku, Kawasaki-shi, Kanagawa

Trust beneficiary interests
Trust beneficiary interests

1,296.22
3,737.47

195
1,150

Residence-15 Esty Maison YOKOHAMA

3-33-1 Tsuruya-cho, Kanagawa-ku, Yokohama-shi, Kanagawa

Trust beneficiary interests

2,823.73

2,010

1,960

Residence-72 Esty Maison KAWARAMACHI

Residence-16 Esty Maison KAMEIDO

6-57-11 Kameido, Koto-ku, Tokyo

Trust beneficiary interests

2,279.21

1,410

1,473

Residence-73 Esty Maison NISHITENMA

5-15-3 Nishitenma, Kita-ku, Osaka-shi, Osaka

Trust beneficiary interests

2,877.90

1,590

1,448

Residence-17 Esty Maison MEGURO

2-10-12 Mita, Meguro-ku, Tokyo

Trust beneficiary interests

1,070.13

987

815

Residence-74 Esty Maison SHIROKANEDAI

1-1-4 Kamiosaki, Shinagawa-ku, Tokyo

Trust beneficiary interests

2,675.11

2,140

1,977

Residence-18 Esty Maison YACHIYO MIDORIGAOKA

1-2-8 Midorigaoka, Yachiyo-shi, Chiba

Trust beneficiary interests

4,815.26

1,120

1,198

Residence-75 Esty Maison HIGASHISHINJUKU

6-22-5 Shinjuku, Shinjuku-ku, Tokyo

Trust beneficiary interests

1,889.50

1,490

1,405

1,486

Residence-76 Esty Maison MOTOAZABU

3-6-6 Motoazabu, Minato-ku, Tokyo

Trust beneficiary interests

1,199.86

1,330

1,204

2,425

Residence-77 Esty Maison TORITSUDAIGAKU

2-7-17 Tairamachi, Meguro-ku, Tokyo

Trust beneficiary interests

1,035.78

787

752

Residence-78 Esty Maison MUSASHIKOYAMA II

3-11-4 Koyama, Shinagawa-ku, Tokyo

Trust beneficiary interests

1,073.59

921

869

Residence-19 Esty Maison SUGAMO
Residence-20 Esty Maison KYOBASHI

4-14-15 Sugamo, Toshima-ku, Tokyo
2-7-10 Higashinoda-cho, Miyakojima-ku, Osaka-shi, Osaka

Trust beneficiary interests
Trust beneficiary interests

2,619.17
4,613.04

1,510
2,700

Residence-21 Esty Maison MEGUROHONCHO

4-8-21 Megurohoncho, Meguro-ku, Tokyo

Trust beneficiary interests

1,656.02

998

1,142

Residence-22 Esty Maison HAKURAKU

1-18-19 Rokkakubashi, Kanagawa-ku, Yokohama-shi, Kanagawa

Trust beneficiary interests

1,285.83

829

746

Residence-79 Esty Maison NAKANO

5-48-2 Chuo, Nakano-ku, Tokyo

Trust beneficiary interests

2,023.72

1,660

1,585

Residence-23 Esty Maison MINAMIHORIE

2-12-10 Minamihorie, Nishi-ku, Osaka-shi, Osaka

Trust beneficiary interests

1,804.48

1,020

977

Residence-80 Esty Maison SHINNAKANO

6-10-7 Honcho, Nakano-ku, Tokyo

Trust beneficiary interests

1,107.57

906

872

Residence-24 Esty Maison GOTANDA

7-7-2 Nishi-Gotanda, Shinagawa-ku, Tokyo

Trust beneficiary interests

3,871.15

2,780

2,822

Residence-81 Esty Maison NAKANOFUJIMICHO

5-13-1 Yayoicho, Nakano-ku, Tokyo

Trust beneficiary interests

1,299.60

920

888

2,279

Residence-82 Esty Maison TETSUGAKUDO

2-12-15 Matsugaoka, Nakano-ku, Tokyo

Trust beneficiary interests

1,531.89

1,100

981

2,036

Residence-83 Esty Maison KOENJI

5-25-26 Koenjiminami, Suginami-ku, Tokyo

Trust beneficiary interests

1,527.52

1,070

987

5-11-5 Narihira, Sumida-ku, Tokyo

Trust beneficiary interests

3,180.90

2,210

2,006

Residence-25 Esty Maison OISENDAIZAKA
Residence-26 Esty Maison SHINAGAWA SEASIDE

5-9-10 Higashi-Oi, Shinagawa-ku, Tokyo
3-25-20 Higashi-Shinagawa, Shinagawa-ku, Tokyo, etc.

Trust beneficiary interests
Trust beneficiary interests

2,979.85
2,602.30

2,450
1,940

Residence-27 Esty Maison MINAMIAZABU

1-10-8 Minamiazabu, Minato-ku, Tokyo

Trust beneficiary interests

1,082.12

1,130

1,224

Residence-84 Esty Maison OSHIAGE

Residence-28 Esty Maison JOTO

2-11-8 Noe, Joto-ku, Osaka-shi, Osaka

Trust beneficiary interests

2,065.92

940

1,007

Residence-85 Esty Maison AKABANE

2-39-5 Akabane, Kita-ku, Tokyo

Trust beneficiary interests

4,302.84

2,940

2,805

Residence-29 Esty Maison TSUKAMOTO

2-13-5 Tsukamoto, Yodogawa-ku, Osaka-shi, Osaka

Trust beneficiary interests

2,321.04

1,060

1,153

Residence-86 Esty Maison OJI

2-25-8 Oji, Kita-ku, Tokyo

Trust beneficiary interests

2,289.44

1,480

1,420

Residence-30 Esty Maison KAWASAKI II

12-4 Ogawa-cho, Kawasaki-ku, Kawasaki-shi, Kanagawa

Trust beneficiary interests

2,824.86

2,010

1,773

Residence-87 Prime Maison WASEDA

544-11 Waseda Tsurumaki-cho, Shinjuku-ku, Tokyo

Trust beneficiary interests

1,650.66

1,390

1,299

2,633

Residence-88 Prime Maison HATCHOBORI

4-11-9 Hatchobori, Chuo-ku, Tokyo

Trust beneficiary interests

1,382.32

1,260

1,178

939

Residence-89 Prime Maison JINBOCHO

1-50-9 Kandajinbo-cho, Chiyoda-ku, Tokyo

Trust beneficiary interests

1,819.90

1,710

1,661

6-6-33 Kitashinagawa, Shinagawa-ku, Tokyo

Trust beneficiary interests

2,512.91

2,530

2,148

Residence-31 Esty Maison AZABUJUBAN
Residence-33 Esty Maison ITABASHIHONCHO

1-11-1 Azabujuban, Minato-ku, Tokyo
14-14 Yamato-cho, Itabashi-ku, Tokyo

Trust beneficiary interests
Trust beneficiary interests

1,755.31
1,274.49

2,490
905

Residence-34 Esty Maison OIZUMIGAKUEN

2-12-15 Higashi-Oizumi, Nerima-ku, Tokyo

Trust beneficiary interests

1,362.36

811

816

Residence-90 Prime Maison GOTENYAMA EAST

Residence-35 Esty Maison TENJINHIGASHI I

4-3 Susaki-machi, Hakata-ku, Fukuoka-shi, Fukuoka

Trust beneficiary interests

1,058.82

376

401

Residence-91 MAST LIFE AKIHABARA

50-6 Kanda Sakumagashi, Chiyoda-ku, Tokyo

Trust beneficiary interests

803.36507

492

Residence-36 Esty Maison TENJINHIGASHI II

6-12 Susaki-machi, Hakata-ku, Fukuoka-shi, Fukuoka

Trust beneficiary interests

1,943.72

698

755

Residence-92 Esty Maison AOI

1-14-20 Aoi, Higashi-ku, Nagoya-shi, Aichi

Trust beneficiary interests

4,809.68

2,240

2,210

Residence-37 Esty Maison SHIJONISHINOTOIN

697 Myodenji-cho, Shijo-sagaru, Nishinotoin-dori, Shimogyo-ku, Kyoto-shi, Kyoto

Trust beneficiary interests

2,261.28

1,070

1,328

Residence-93 Esty Maison YAKUIN

1-13-8 Hirao, Chuo-ku, Fukuoka-shi, Fukuoka

Trust beneficiary interests

5,207.49

2,180

2,124

2,511

Residence-94 Esty Maison KINSHICHO II

3-5-19 Kotobashi, Sumida-ku, Tokyo

Trust beneficiary interests

9,469.65

7,250

6,987

Residence-95 Esty Maison OJIMA

5-32-5 Ojima, Koto-ku, Tokyo

Trust beneficiary interests

9,905.97

7,990

7,384

1-25 Fujimidai, Chigusa-ku, Nagoya-shi, Aichi

Trust beneficiary interests

5,704.63

1,880

1,832

2-20-1 Chiyoda, Naka-ku, Nagoya-shi, Aichi

Trust beneficiary interests

13,812.40

4,090

3,933

273,509.12

158,249

150,139

Residence-39 Esty Maison HIGASHISHINAGAWA
Residence-40 Esty Maison HACHIOJIMINAMINO

1-10-1 Higashi-Shinagawa, Shinagawa-ku, Tokyo
3-2-8 Nishikatakura, Hachioji-shi, Tokyo

Trust beneficiary interests
Trust beneficiary interests

2,936.72
2,155.16

2,320
958

919

Residence-41 Esty Maison NISHINAKAJIMA

2-8-21 Higashinakajima, Higashiyodogawa-ku, Osaka-shi, Osaka

Trust beneficiary interests

3,643.42

1,920

2,019

Residence-96 Prime Maison FUJIMIDAI

Residence-42 Esty Maison ITABASHIKUYAKUSHOMAE

2-46-11 Itabashi, Itabashi-ku, Tokyo

Trust beneficiary interests

3,915.81

2,450

2,551

Residence-97 Esty Maison TSURUMAI

Residence-43 Esty Maison MUSASHIKOYAMA

3-1-7 Ebara, Shinagawa-ku, Tokyo

Trust beneficiary interests

1,176.78

1,010

978

Residence-44 Esty Maison SENDAGI

3-49-1 Sendagi, Bunkyo-ku, Tokyo

Trust beneficiary interests

897.30680

735

Retail-1

HAMAMATSU Plaza (Note 2)1020-1 Kaminishi-cho, Higashi-ku, Hamamatsu-shi, Shizuoka, etc.

Trust beneficiary interests

14,117.13

2,219

3,653

b-town JINGUMAE II

5-3-13 Jingumae, Shibuya-ku, Tokyo

Trust beneficiary interests

499.67983

1,013

Residence subtotal

Residence-45 Esty Maison YOTSUYASAKAMACHI

15 Sakamachi, Shinjuku-ku, Tokyo

Trust beneficiary interests

2,453.17

1,930

2,253

Retail-2

Residence-46 Esty Maison HAKATAHIGASHI

7-2-80 Yoshizuka, Hakata-ku, Fukuoka-shi, Fukuoka

Trust beneficiary interests

9,106.08

2,350

2,110

Retail-3

RINKU HAGURAZAKI Plaza

605 Kashoji Tajiri-cho, Sennan-gun, Osaka, etc.

Trust beneficiary interests

53,275.73

5,040

4,734

b-town MINAMIAOYAMA

3-6-7 Minamiaoyama, Minato-ku, Tokyo

Trust beneficiary interests

769.93

1,120

1,508

Residence-47 Esty Maison KAMIGOFUKU

13-3 Kamigofukumachi, Hakata-ku, Fukuoka-shi, Fukuoka

Trust beneficiary interests

2,261.91

828

850

Retail-4

Residence-48 Esty Maison SANGENJAYA

2-16-9 Sangenjaya, Setagaya-ku, Tokyo

Trust beneficiary interests

856.08820

862

Retail-5

KOJIMA NEW KAMIFUKUOKATEN

5-10-18 Kamifukuoka, Fujimino-shi, Saitama

Trust beneficiary interests

3,413.40

1,330

1,254

Residence-50 Prime Maison MUSASHINONOMORI

5-15-3 Josuihoncho, Kodaira-shi, Tokyo

Trust beneficiary interests

3,924.58

1,780

1,527

Retail-7

b-toss IKEBUKURO

1-38-3 Nishi-Ikebukuro, Toshima-ku, Tokyo

Trust beneficiary interests

1,332.88

1,640

1,974

Residence-51 Prime Maison HIGASHISAKURA

2-10-14 Higashisakura, Higashi-ku, Nagoya-shi, Aichi

Trust beneficiary interests

3,118.11

1,340

1,093

Retail-8

Joy Square YUGAWARA

1-1617-54 Chuo, Yugawaramachi, Ashigarashimo-gun, Kanagawa

Trust beneficiary interests

4,404.35

1,530

1,695

622

Retail-9

Bell Plaza Shopping Center

1647-7 Nakamaruko, Ueda-shi, Nagano, etc.

Trust beneficiary interests

6,172.70

1,190

1,379

Other real estate in trust (Retail property) subtotal

83,985.79

15,052

17,214

Total

357,494.91

173,301

167,353

Residence-52 Prime Maison KAYABAKOEN

9

Property Name

2-7-13 Kayaba, Chikusa-ku, Nagoya-shi, Aichi

Trust beneficiary interests

2,163.98

734

Residence-53 Esty Maison SANGENJAYA II

3-11-6 Shimouma, Setagaya-ku, Tokyo

Trust beneficiary interests

894.64807

696

Residence-54 Esty Maison ITABASHI C6

32-16 Oyama-higashi-cho, Itabashi-ku, Tokyo

Trust beneficiary interests

4,036.66

2,340

2,202

Residence-55 MAST HAKATA

4-22-25 Hakata Ekimae, Hakata-ku, Fukuoka-shi, Fukuoka

Trust beneficiary interests

9,614.80

2,280

1,902

Residence-56 Esty Maison KINSHICHO

1-1-8 Kinshi, Sumida-ku, Tokyo

Trust beneficiary interests

1,611.54

1,180

1,079

Residence-57 Esty Maison MUSASHIKOGANEI

2-6-5 Honcho, Koganei-shi, Tokyo

Trust beneficiary interests

2,275.24

1,610

1,489

Residence-58 Prime Maison GOKISO

2-17-2 Ayuchitori, Showa-ku, Nagoya-shi, Aichi

Trust beneficiary interests

4,427.65

1,760

1,615

(Note 1) The “Appraisal Value at End of Period” indicates either the appraisal value or survey value by real estate appraisers with September 30, 2014 as the date of appraisal.
(Note 2) The real estate in trust is quasi-co-owned, and the figure represents the value obtained by multiplying the “rentable area” of the facility by 49%, which is the quasi-co-ownership interest of theInvestment Corporation.

10

Sekisui House SI Residential Investment Corporation

The following table provides changes in rental business results for each property in which the Investment Corporation has invested.
17th Fiscal Period (Oct. 1, 2013 – Mar. 31, 2014)11

Property Name

Ratio to Total
RentalRevenues(%)

Occupancy
Number of
Rental Revenue
Tenants at End Ratio at End of
throughout
Periodof Period
Period(Note 2) (%) (millions of yen)
(Note 1)

Ratio to Total
RentalRevenues(%)

Use Property No.

Property Name

Occupancy
Rental Revenue
Number ofthroughout
Tenants at End Ratio at End of
PeriodPeriodof Period(Note 2) (%) (millions of yen)
(Note 1)18th Fiscal Period (Apr. 1, 2014 – Sep. 30, 2014)

Ratio to Total
RentalRevenues(%)

Occupancy
Number of
Rental Revenue
Tenants at End Ratio at End of
throughout
Periodof Period
Period(Note 2) (%) (millions of yen)
(Note 1)

Ratio to Total
RentalRevenues
(%)

1

92.8

30

0.6

1

87.7

27

0.5

Esty Maison GINZA

1

97.0

167

3.4

1

96.0

170

3.1

Residence-60 Prime Maison KITATANABE

1

100.0

22

0.5

1

92.0

22

0.4

Residence-3

Esty Maison AZABUNAGASAKA

1

98.7

50

1.0

1

90.6

50

0.9

Residence-61 Prime Maison MOMOCHIHAMA

1

100.0

69

1.4

1

100.0

68

1.2

Residence-4

Esty Maison EBISU II

1

91.3

54

1.1

1

87.2

54

1.0

Residence-62 Esty Maison AKIHABARA

1

97.5

53

1.1

1

95.0

55

1.0

Residence-5

Esty Maison EBISU

1

96.8

24

0.5

1

92.8

22

0.4

Residence-63 Esty Maison SASAZUKA

1

99.0

87

1.8

1

95.7

87

1.6

Residence-6

Esty Maison KANDA

1

97.4

45

0.9

1

96.1

45

0.8

Residence-64 Prime Maison GINZA EAST

1

95.0

160

3.3

1

98.1

162

2.9

Residence-7

Esty Maison SENDAGAYA

―

―

14

0.3

―

―

―

―

Residence-65 Prime Maison TAKAMI

1

85.9

32

0.7

1

100.0

32

0.6

Residence-8

Esty Maison KITASHINJUKU

1

88.3

46

0.9

1

98.7

42

0.8

Residence-66 Prime Maison YADAMINAMI

1

92.3

27

0.6

1

100.0

27

0.5

Residence-10 Esty Maison ASAKUSA KOMAGATA

1

98.6

63

1.3

1

97.7

65

1.2

Residence-67 Prime Maison TERIHA

1

100.0

51

1.1

1

100.0

51

0.9

Residence-11 Esty Maison MACHIDA

1

96.3

52

1.1

1

95.5

53

1.0

Residence-68 Esty Maison HIGASHISHIRAKABE

1

100.0

47

1.0

1

100.0

47

0.9

Residence-12 Esty Maison KAWASAKI

1

98.7

77

1.6

1

96.8

79

1.4

Residence-69 Esty Maison SENGOKU

1

97.3

37

0.8

1

94.4

37

0.7

Residence-13 Esty Maison IMAIKE

1

91.9

15

0.3

1

98.3

14

0.3

Residence-70 Esty Maison DAIZAWA

1

100.0

60

1.2

1

97.6

60

1.1

Residence-14 Esty Maison SHINKAWASAKI

1

100.0

32

0.7

1

100.0

31

0.6

Residence-71 Esty Maison TOGOSHI

1

96.9

48

1.0

1

100.0

47

0.8

Residence-15 Esty Maison YOKOHAMA

1

100.0

77

1.6

1

95.8

63

1.1

Residence-72 Esty Maison KAWARAMACHI

1

94.3

59

1.2

1

95.1

57

1.0

Residence-16 Esty Maison KAMEIDO

1

100.0

53

1.1

1

96.0

52

0.9

Residence-73 Esty Maison NISHITENMA

1

93.9

53

1.1

1

95.0

54

1.0

Residence-17 Esty Maison MEGURO

1

100.0

30

0.6

1

97.5

30

0.5

Residence-74 Esty Maison SHIROKANEDAI

1

92.4

60

1.2

1

90.1

58

1.1

Residence-18 Esty Maison YACHIYO MIDORIGAOKA

1

93.6

42

0.9

1

95.3

44

0.8

Residence-75 Esty Maison HIGASHISHINJUKU

1

96.7

46

0.9

1

94.0

45

0.8

Residence-19 Esty Maison SUGAMO

1

97.2

47

1.0

1

97.3

48

0.9

Residence-76 Esty Maison MOTOAZABU

1

100.0

33

0.7

1

100.0

39

0.7

Residence-20 Esty Maison KYOBASHI

1

95.4

89

1.8

1

99.4

92

1.7

Residence-77 Esty Maison TORITSUDAIGAKU

1

100.0

21

0.4

1

92.8

22

0.4

Residence-21 Esty Maison MEGUROHONCHO

1

96.4

32

0.7

1

100.0

34

0.6

Residence-78 Esty Maison MUSASHIKOYAMA II

1

97.3

28

0.6

1

100.0

28

0.5

Residence-22 Esty Maison HAKURAKU

1

94.7

31

0.6

1

96.5

30

0.5

Residence-79 Esty Maison NAKANO

1

94.8

51

1.1

1

92.1

49

0.9

Residence-23 Esty Maison MINAMIHORIE

1

98.6

35

0.7

1

97.2

35

0.6

Residence-80 Esty Maison SHINNAKANO

1

95.7

30

0.6

1

96.2

28

0.5

Residence-24 Esty Maison GOTANDA

1

96.0

93

1.9

1

94.6

90

1.6

Residence-81 Esty Maison NAKANOFUJIMICHO

1

97.7

27

0.6

1

100.0

29

0.5

Residence-25 Esty Maison OISENDAIZAKA

1

97.4

78

1.6

1

96.1

80

1.4

Residence-82 Esty Maison TETSUGAKUDO

1

100.0

34

0.7

1

97.6

34

0.6

Residence-26 Esty Maison SHINAGAWA SEASIDE

1

97.2

64

1.3

1

96.7

65

1.2

Residence-83 Esty Maison KOENJI

1

95.1

33

0.7

1

89.1

31

0.6

Residence-27 Esty Maison MINAMIAZABU

1

98.1

34

0.7

1

96.2

35

0.6

Residence-84 Esty Maison OSHIAGE

1

96.9

66

1.4

1

95.9

68

1.2

Residence-28 Esty Maison JOTO

1

98.5

34

0.7

1

90.7

33

0.6

Residence-85 Esty Maison AKABANE

1

97.6

93

1.9

1

97.6

94

1.7

Residence-29 Esty Maison TSUKAMOTO

1

100.0

40

0.8

1

96.9

40

0.7

Residence-86 Esty Maison OJI

1

96.6

47

1.0

1

94.4

46

0.8

Residence-30 Esty Maison KAWASAKI II

1

99.2

61

1.3

1

96.0

63

1.1

Residence-87 Prime Maison WASEDA

1

96.8

42

0.9

1

98.5

42

0.8

Residence-31 Esty Maison AZABUJUBAN

1

98.7

67

1.4

1

96.8

66

1.2

Residence-88 Prime Maison HATCHOBORI

1

93.8

34

0.7

1

100.0

37

0.7

Residence-33 Esty Maison ITABASHIHONCHO

1

96.9

28

0.6

1

93.8

28

0.5

Residence-89 Prime Maison JINBOCHO

1

96.4

50

1.0

1

93.6

49

0.9

Residence-34 Esty Maison OIZUMIGAKUEN

1

95.9

24

0.5

1

94.6

26

0.5

Residence-90 Prime Maison GOTENYAMA EAST

1

95.7

68

1.4

1

100.0

72

1.3

Residence-35 Esty Maison TENJINHIGASHI I

1

100.0

16

0.3

1

97.8

15

0.3

Residence-91 MAST LIFE AKIHABARA

1

100.0

5

0.1

1

100.0

15

0.3

Residence-36 Esty Maison TENJINHIGASHI II

1

100.0

28

0.6

1

96.3

27

0.5

Residence-92 Esty Maison AOI

1

88.7

24

0.5

1

94.8

72

1.3

Residence-37 Esty Maison SHIJONISHINOTOIN

1

97.6

41

0.8

1

100.0

40

0.7

Residence-93 Esty Maison YAKUIN

1

92.2

1

0.0

1

94.0

73

1.3

Residence-39 Esty Maison HIGASHISHINAGAWA

1

96.4

71

1.5

1

96.1

71

1.3

Residence-94 Esty Maison KINSHICHO II

―

―

―

―

1

94.1

170

3.0

Residence-40 Esty Maison HACHIOJIMINAMINO

1

91.9

34

0.7

1

94.2

31

0.6

Residence-95 Esty Maison OJIMA

―

―

―

―

1

94.9

192

3.4
1.0

Residence

Residence-59 Prime Maison YUHIGAOKA

Residence-1

Residence-41 Esty Maison NISHINAKAJIMA

1

96.1

67

1.4

1

92.9

66

1.2

Residence-96 Prime Maison FUJIMIDAI

―

―

―

―

1

92.2

56

Residence-42 Esty Maison ITABASHIKUYAKUSHOMAE

1

100.0

75

1.5

1

91.9

78

1.4

Residence-97 Esty Maison TSURUMAI

―

―

―

―

1

100.0

129

2.3

Residence-43 Esty Maison MUSASHIKOYAMA

1

94.8

31

0.6

1

100.0

30

0.5

Residence subtotal

87

96.6

4,333

88.1

91

96.3

4,990

89.3

Residence-44 Esty Maison SENDAGI

1

100.0

23

0.5

1

97.6

21

0.4

Retail-1

HAMAMATSU Plaza

4

100.0

107

2.2

4

100.0

109

2.0

Residence-45 Esty Maison YOTSUYASAKAMACHI

1

92.8

57

1.2

1

85.1

56

1.0

Retail-2

b-town JINGUMAE II

1

100.0

23

0.5

1

100.0

24

0.4

Residence-46 Esty Maison HAKATAHIGASHI

1

97.9

85

1.7

1

98.4

82

1.5

Retail-3

RINKU HAGURAZAKI Plaza

3

100.0

182

3.7

3

100.0

182

3.3

Residence-47 Esty Maison KAMIGOFUKU

1

89.7

28

0.6

1

97.0

26

0.5

Retail-4

b-town MINAMIAOYAMA

1

100.0

33

0.7

1

92.3

33

0.6

Residence-48 Esty Maison SANGENJAYA

1

88.8

24

0.5

1

97.3

23

0.4

Retail-5

KOJIMA NEW KAMIFUKUOKATEN

1

100.0

48

1.0

1

100.0

48

0.9

Residence-50 Prime Maison MUSASHINONOMORI

1

98.7

62

1.3

1

93.2

63

1.1

Retail-7

b-toss IKEBUKURO

1

88.8

52

1.1

1

100.0

60

1.1

Residence-51 Prime Maison HIGASHISAKURA

1

93.6

52

1.1

1

95.0

50

0.9

Retail-8

Joy Square YUGAWARA

1

100.0

81

1.7

1

100.0

86

1.6

Residence-52 Prime Maison KAYABAKOEN

1

100.0

29

0.6

1

100.0

29

0.5

Retail-9

Bell Plaza Shopping Center

1

100.0

55

1.1

1

100.0

55

1.0

Residence-53 Esty Maison SANGENJAYA II

1

97.0

24

0.5

1

91.1

23

0.4

13

99.8

583

11.9

13

99.9

600

10.7

Residence-54 Esty Maison ITABASHI C6

1

93.3

76

1.5

1

94.5

78

1.4

100

97.5

4,917

100.0

104

97.1

5,591

100.0

Residence-55 MAST HAKATA

1

100.0

93

1.9

1

100.0

93

1.7

Residence-56 Esty Maison KINSHICHO

1

97.3

33

0.7

1

95.8

35

0.6

Residence-57 Esty Maison MUSASHIKOGANEI

1

93.2

54

1.1

1

90.2

51

0.9

Residence-58 Prime Maison GOKISO

1

96.9

62

1.3

1

98.3

65

1.2

Other Real Estate in Trust (Retail property)

Residence

Use Property No.

Occupancy
Rental Revenue
Number ofthroughout
Tenants at End Ratio at End of
PeriodPeriodof Period(Note 2) (%) (millions of yen)
(Note 1)

17th Fiscal Period (Oct. 1, 2013 – Mar. 31, 2014)

18th Fiscal Period (Apr. 1, 2014 – Sep. 30, 2014)

Other real estate in trust (Retail property) subtotal
Total(Note 1) The “Number of Tenants” indicates the number of lessees (including master-lease companies) that are in direct lease agreement with the trustees for each asset already acquired as of the end of eachfiscal period. Furthermore, the “Master-lease Company” represents the lessee that has concluded a lease agreement for the entire building with the Investment Corporation or the trustee for the
purpose of subleasing the property to third parties.
(Note 2) Of the properties that are subleased by the lessees to sublessees, for those from which the Investment Corporation receives rents that may vary depending on the leasing status to the sublessees, theindicated occupancy ratio is based on the occupancy status of the sublessees (the ratio of the leased area to the rentable area at the end of the relevant calculation period).

12

Sekisui House SI Residential Investment Corporation

Management Discussion and Analysis
1. Asset Management Status for the 18th Fiscal Period2) Asset Management Results(1) Brief History of the Investment Corporation

A. Measures for expanding the asset size

Sekisui House SI Residential Investment Corporation (the “Investment Corporation”) is an investment corporation sponsored by Sekisui House, Ltd. (“Sekisui
House”), a leading company in the housing industry, and Spring Investment Co., Ltd. (“Spring Investment”), an international fund manager, and works to establish
a stable portfolio primarily comprising residential properties.

[Changes in the asset size]

The Investment Corporation listed on the Real Estate Investment Trust Securities Market of Tokyo Stock Exchange, Inc. on July 28, 2005. Subsequently, as Sekisui
House and Spring Investment were selected as new sponsors replacing the former sponsor, they acquired the outstanding shares of the Investment Corporation’s
asset management company on March 8, 2010, with 75% equity interest held by Sekisui House and 25% by Spring Investment. This firmly established acollaboration system with the two companies serving as joint sponsors for the Investment Corporation and the asset management company.
Later, at the Sixth General Meeting of Unitholders held on June 11, 2014, the Investment Corporation’s Articles of Incorporation was partially revised to remove
retail properties, which had previously been identified as a supplementary investment target, from its investment horizons and to solely invest in real estaterelated assets that are mainly used (Note) as residences. At the same time, it was resolved to change the Investment Corporation’s trade name to Sekisui House SI
Residential Investment Corporation in order to strongly demonstrate the shift of its investment targets.
The Investment Corporation works to expand its asset size, primarily through acquiring rental residential properties developed by Sekisui House, with a focus on
maximization of the interests of its unitholders, and also endeavors to reinforce its financial base. By doing so, it aims to become the leading company among
J-REITs investing in residential properties.
Furthermore, in consideration of the introduction of Nippon Individual Savings Account (NISA) in January 2014, the Investment Corporation conducted a five-forone split of its investment units with March 31, 2014 and April 1, 2014 as the record date and the effective date, respectively. The split was intended to create anenvironment which should make it easier for retail investors to make investments, by lowering the amount per unit for investment.
(Note) “Mainly used” means that a majority of the total exclusive area of the relevant real estate-related asset is allocated for a specific use.

(2) Investment Environment and Asset Management Results1) Operating Environment
During the 18th fiscal period, the Japanese economy showed some weakness, primarily in production, impacted by a decrease in demand in reaction to the rush
demand prior to the consumption tax rate hike, etc. Recovery occasionally failed to pick up pace due to such foreign factors as the tense situations in the Ukraine
and Middle East as well as unseasonable weather in Japan. Nevertheless, corporate sentiment was generally kept at a favorable level, and the economy
presumably remained on course for a modest recovery, given the employment and income environments continuing to improve steadily.
Under these circumstances, the Tokyo Stock Exchange REIT Index remained strong, as it continued to rise for six consecutive months through September 2014 ona monthly basis, although it occasionally dropped temporarily due to fluctuations in the domestic and foreign stock exchanges and in long-term interest rates. The
rise reflected the recognition in the market for the purchase of J-REIT investment units by the Bank of Japan and the high dividend yield of J-REITs due to thedecreased long-term interest rates.

As for the land price trend, the national average was still decreasing both for commercial and residential land but the rate of decrease continued to shrink,according to the government’s Prefectural Land Price Survey as of July 1, 2014. On the average in the three major metropolitan areas (the Greater Tokyo, Osaka
Area and Nagoya Area), the residential land price took an upward turn and the commercial land price accelerated its pace of increase. Moreover, in the three major
metropolitan areas, land prices increased in slightly less than half of the surveyed sites for residential land and slightly more than two-thirds for commercial land.
As such, land prices are observed to be heading for recovery, due to such factors as progress made in redevelopment projects and real estate investment
increasing as well as the office building market showing a recovery trend.
In terms of the demand trend for rental residential properties, the number of single-person households centering on young people is increasing in Greater Tokyoand some major cities including government designated cities because of population inflow from other regions. In addition, there continue to be a decreasedorientation for possessing one’s own houses, primarily among young generations, due to changes of mind-sets such as turning away from driving cars and frombuying their own homes as well as due to more diversified lifestyles. Given these backgrounds, latent demand for rental residential properties remain solid, andrental condominiums featuring superior locations and quality enjoy stable occupancy.
As for the supply trend for rental residential properties, the number of housing starts continue to remain at a low level, showing a year-on-year decrease for sevenconsecutive months, according to the Statistics on Building Construction Starts (September 2014) by the Ministry of Land, Infrastructure, Transport and Tourism.
As such, the supply and demand situation in the rental residential properties market is believed to largely remain in good shape.
Meanwhile, according to the Monthly Report of Recent Economic and Financial Developments 2014 (October 2014) by the Bank of Japan, private consumption
presumably remains resilient, with the effects of the decline in demand in reaction to the front-loaded increase waning on the whole despite some dispersions.
Accordingly, it is considered that rents for stores, which are influenced by private consumption trends, have remained flat as a whole. For example, department
store sales throughout Japan have picked up since May 2014 after significantly decreasing in April, and supermarket sales nationwide have also shown amoderate pickup trend since May following a large drop in April. Moreover, convenience store sales have continued a slightly upward trend, showing relatively
smaller fluctuations after the rush demand, and there is an observed tendency in which the opening of some convenience stores that pay high rents in such areas
as Ginza, Omotesando and Shinjuku lead the increase in rents.

13

The Investment Corporation started the 18th fiscal period with management of 95 properties it owned as of March 31, 2014, having total acquisition price of
151,744 million yen (excluding, however, miscellaneous acquisition related expenses, fixed property taxes, city planning taxes, consumption taxes and local
consumption taxes; the same follows hereafter), and acquired four residential properties (with total acquisition price of 19,355 million yen) in May 2014. As aresult, the properties owned by the Investment Corporation as of the end of the fiscal period under review totaled 99 properties (91 residential properties and 8
retail properties), with the total acquisition price amounting to 171,099 million yen (153,562 million yen for residential properties and 17,536 million yen for retailproperties).
The table below indicates the properties acquired during the 18th fiscal period.
<Newly acquired properties>
Property No.

Property Name

Location

Acquisition Price(millions of yen)

Acquisition Date

Residence-94

Esty Maison KINSHICHO II

Kotobashi, Sumida-ku, Tokyo

6,720

May 1, 2014

Residence-95

Esty Maison OJIMA

Ojima, Koto-ku, Tokyo

7,120

May 1, 2014

Residence-96

Prime Maison FUJIMIDAI

Fujimidai, Chigusa-ku, Nagoya-shi, Aichi

1,755

May 1, 2014

Residence-97

Esty Maison TSURUMAI

Chiyoda, Naka-ku, Nagoya-shi, Aichi

3,760

May 1, 2014

[Use of diversified property acquisition channels and methods]
As part of diversifying the property acquisition methods, the Investment Corporation had obtained preferential negotiation rights for the acquisition of two
residential properties from GK AQUA 2 in March 2013. The Investment Corporation exercised the said preferential negotiation rights to acquire the two properties
in May 2014. In the same month, it also acquired a Prime Maison Series property from Sekisui House and a residential property from Sekiwa Real Estate Chubu,Ltd. As these show, the Investment Corporation conducted property acquisitions by utilizing the diversified property acquisition channels and methods it hasestablished through its activities to date.
[Implementation of public offerings for two consecutive fiscal periods]
The Investment Corporation issued new investment units through public offering in April 2014. Using the funds procured from the public offering plus borrowingsand cash on hand, it acquired the aforementioned four residential properties in May 2014. Moreover, in October 2014 (the 19th fiscal period), it conducted anotherpublic offering for two consecutive fiscal periods. The Investment Corporation decided to acquire seven Prime Maison Series properties from Sekisui House and a
MAST Series property from Sekiwa Real Estate, Ltd. by using the funds procured through the public offering as well as borrowings and cash on hand. Of theseproperties, acquisition already completed for eight properties in November 2014 and January 2015. For details of the latest public offering and property
acquisitions, please refer to 3. Significant Events Occurring after Settling the 18th Fiscal Period described below.

B. Implementation of Leasing Activities and Measures to Enhance Property Value
During the fiscal period, the Investment Corporation conducted leasing activities by paying attention to the trends in the surrounding rental markets in accordancewith the property locations, residential types and tenant classifications. At the same time, it took various measures aiming to enhance property values and tenantsatisfaction. Specific measures included implementation of renewals and renovations of aged and obsolete exclusive and common areas, which can be obstacle toleases, in a timely manner and introduction of LED lighting to common areas aimed at reducing power charges, all in an endeavor to improve property values andreduce costs. Consequently, the occupancy ratio of the entire residential properties stood at 96.3% as of the end of the 18th fiscal period.
For retail properties, joint efforts were made with the property management companies on the lease of b-toss IKEBUKURO, which had had vacant sections since
before the 17th fiscal period. With leasing of the property completed, the occupancy ratio of the entire retail properties stood at 99.9% as of September 30, 2014.
As a result of these endeavors, the occupancy ratio of the entire portfolio was 97.1% as of the end of the fiscal period under review.

(3) Summary of Fund Procurement
During the 18th fiscal period, the Investment Corporation newly borrowed 8,700 million yen in short-term loans payable (loan period: approximately 10 months) in
May 2014 in order to fund property acquisitions. In August 2014, it borrowed 5,400 million yen with a loan period of approximately 8 years and 4,400 million yen
with a loan period of approximately 7 years, as well as issuing investment corporation bonds totaling 3,000 million yen with a redemption period of 10 years, as
funds for refinancing the borrowings that matured (12,809 million yen in total). These arrangements helped promote further extension of borrowing periods anddiversification of repayment days. Taking advantage of the favorable financing environment, the Investment Corporation issued the said investment corporation
bonds with an applicable coupon rate that was lower by 0.198 points than the investment corporation bonds it issued in February 2014 having the same
redemption period. Moreover, for the long-term loans payable, the interest rates were fixed in effect by concluding interest rate swap agreements in order tohedge the risk of rising interest rates.
As a result of the above, the Investment Corporation had the balance of interest-bearing liabilities standing at 92,459 million yen (8,700 million yen in short-termloans payable, 69,259 million yen in long-term loans payable (including 6,650 million yen in current portion of long-term loans payable) and 14,500 million yen in
investment corporation bonds) as of September 30, 2014.

14

Sekisui House SI Residential Investment Corporation

In addition, the Investment Corporation has been granted the following credit ratings as of January 31, 2015, in the light of the stable financial base establishedthrough these endeavors.
Credit Rating Agency

Issuer Rating

Japan Credit Rating Agency, Ltd. (JCR)

Long-term issuer rating AA- (Stable)

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

Issuer rating A+ (Stable)(4) Summary of Business Results and Distributions
As a result of these management efforts, the Investment Corporation posted operating revenue of 5,591 million yen, operating income of 2,463 million yen after
deducting such operating expenses as outsourcing expenses, utilities expenses and asset management fees, ordinary income of 1,952 million yen and net incomeof 1,950 million yen in the 18th fiscal period. With regard to the cash distributions, the Investment Corporation decided to distribute the entire amount of theunappropriated retained earnings excluding the fractions less than one yen per investment unit, with the aim of having the maximum amount of profit distributions
deducted as expenses based on application of the special provisions for taxation on investment corporations (Article 67-15 of the Act on Special Measures
Concerning Taxation). As a result, the cash distribution per unit came to 2,131 yen for the 18th fiscal period.

B. Internal Growth Strategy
The Investment Corporation will continue to implement various measures to enhance cash flows from its owned properties. For residential properties, it will work
to reinforce property competitiveness by conducting building renovation and unit renewal work, and further strengthen coordination with the property
management companies to reduce vacancy periods (down time) and maintain and improve the contract renewal ratio.
Specifically, in order to improve the occupancy ratio and enhance the operational and administrative efficiency through the synergy effect with the Sekisui HouseGroup, the Investment Corporation will, in principle, consign property management services for the properties it acquires from the Sekisui House Group to the
Sekiwa Real Estate Group companies that cover the areas in which the said properties are located. Moreover, as the Investment Corporation has gradually unified
the property management companies involved in the existing residential properties to the Sekiwa Real Estate companies, it aims to maintain and improve
medium- and long-term performance through tenant attraction and efficient centralized administration by taking advantage of the Sekiwa Real Estate Group’s
know-how on property management services, backed by the track record of lease management for 537,000 units throughout Japan (as of July 31, 2014), and its
nationwide networks. Furthermore, in an effort to establish the brand, the Investment Corporation is unifying the property name brands to “Esty Maison”, as a rule,
for residential properties it acquired from other than the Sekisui House Group. By doing so, and in combination with the “Prime Maison” brand for Sekisui House’s
rental residential properties and the “MAST” series brand for the Sekiwa Real Estate Group’s rental residential properties, the Investment Corporation will
implement its comprehensive brand strategy to demonstrate the superior quality of its properties.
<Summary of the Investment Corporation’s Major Brands>
Brand Name

Credit Rating Agency

Credit Rating Agency

Credit Rating Agency

Brand of Sekisui House

Proprietary Brand of theInvestment Corporation

Brand of the Sekiwa Real
Estate Group

High-quality urban rental condominiums
planned and developed by Sekisui House byutilizing its know-how or in which it invests
in recognition of the value

As a rule, high-quality urban rental
condominiums the Investment Corporationacquired from outside the Sekisui HouseGroup

As a rule, high-quality rental residential
properties planned and developed by the
Sekiwa Real Estate companies that belong
to the Sekisui House Group

2. Future Management Policies and Vital Issues(1) Investment Environment
With regard to the outlook of the Japanese economy, domestic demand will maintain firmness and exports are expected to head for a moderate increase,according to the Outlook for Economic Activity and Prices (October 2014) by the Bank of Japan. As such, a virtuous cycle from income to spending is likely to be
maintained in both the household and corporate sectors. For the second half of fiscal 2014, the economy is anticipated to remain solid, given a steady
improvement in the employment and income environments, although the impact of the reaction to the rush demand prior to the consumption tax rate hike will
linger for some time centering on personal consumption. However, a certain upswing or downswing may possibly arise for the future outlook, depending on suchoverseas economic trends as the outlook of emerging economies, the European debt problem and the recovery pace of the U.S. economy as well as such factors
as the impact of the consumption tax rate increase, changes in expectations of household and corporate sectors for growth over a medium to long term andconfidence in the medium- to long-term sustainability of the national finance. Close monitoring of the future trends and outcome of these factors will be required.

Logo type

Explanation on brandIn the real estate transaction market, the increase in real estate prices attributed to the monetary easing policy will probably continue going forward, amid theintensifying competition over properties due to diversification of market participants and the rents entering the upward phase, thanks to the expanded “quantitativeand qualitative monetary easing” announced by the Bank of Japan on October 31, 2014 and the change of the policy asset mix for the medium-term plan by theGovernment Pension Investment Fund (GPIF) it announced on the same day. On the other hand, supply of new properties including high-quality rental residential
properties, etc. is projected to remain at a low level over a medium term, primarily because of the increase in construction costs and intensified competition overacquisitions of construction sites. Accordingly, the expected investment return will presumably continue to show a decreasing trend for some time. Based on thisview, the Investment Corporation will manage its assets by carefully discerning the asset management environment in terms of the business and interest rate
trends, the supply and demand balance status and the orientations of domestic and foreign investors.

As for the retail properties, which are characterized by the fact that their earnings are impacted by the changes in the business climate and the competition
environment in surrounding areas, the Investment Corporation will maintain close communications with the tenants on a daily basis and promptly respond toproblems that may occur, in order to cope with such changes as soon as possible. Moreover, the Investment Corporation will endeavor to enhance the value of the
facilities by conducting renovations, etc. of the properties as needed, and further enhance its leasing activities.

(2) Management Policy and Vital Issues(3) Financial Strategy, Etc.

A. External Growth Strategy
With an aim to realize maximum value for its unitholders, the Investment Corporation endeavors to build a portfolio that centers on high-quality rental residential
properties planned and developed by the Sekisui House Group, for which Sekisui House, Ltd., the main sponsor, serves as the core company. In this endeavor, theInvestment Corporation positions Greater Tokyo / Major Urban Area as the focused investment area as well as the core area of its property portfolio, while setting
Greater Tokyo / Other Urban Areas as areas to achieve a risk distribution effect for the Greater Tokyo residential portfolio. Moreover, in order to mitigate the risk
associated with heavy concentration of the portfolio on Greater Tokyo, the Investment Corporation will work to diversify investments to a certain degree as it
investigates acquisitions of properties that allow expectations for stable rental demand, carefully selected from among properties located in major metropolitan
areas and major regional cities around Japan, by making the best use of the nationwide networks of the Sekisui House Group. As for the residential types asinvestment targets, the Investment Corporation will invest primarily in properties comprised mainly of the Single and Compact Type residences for which relatively
high rental demand and profitability can be expected, as well as in properties comprised mainly of the Family Type residences for which stable earnings can be
expected, giving due consideration to area characteristics. The Investment Corporation will also selectively invest in properties comprised mainly of the Large Type
residences after carefully analyzing site environments and such.
In terms of the property acquisition channels, the Investment Corporation will not only utilize the Sekisui House Group’s ability to supply properties but also use
property information provided by Spring Investment, the co-sponsor, and endeavor to acquire properties from outside sources by collecting property information
through the proprietary networks of the asset management company. By doing so, the Investment Corporation will work to steadily expand and diversify theacquisition opportunities, and aim to reinforce profitability through expanding the asset size centering on high-quality rental residential properties.
As for existing retail properties it owns, the Investment Corporation will investigate selling them as a rule, while making efforts to achieve their stable management
in cooperation with Sekisui House.

For the loan-to-value ratio (LTV), which represents the ratio of the balance of borrowings, investment corporation bonds and interest-bearing lease and guarantee
deposits to the total of assets owned by the Investment Corporation, the Asset Management Guidelines of the asset management company sets the ceiling at
60%. However, as the policy it has followed to date, the Investment Corporation makes it a basic rule to maintain LTV at a conservative level, with the lower half ofthe 50% level as the target ceiling for the time being. Furthermore, while the Investment Corporation’s LTV stood at 52.3% as of the end of the 18th fiscal period,
the figure is expected to have been lowered to some extent as of the date of this document due to the issuance of new investment units through public offeringand other measures as mentioned before. The Investment Corporation will effectively utilize the capacity for property acquisition created by the decreased LTV,
while investigating diversification of the fund procurement means and conducting fund procurement through appropriate means, paying close attention to themarket environment.

3. Significant Events Occurring after Settling the 18th Fiscal Period(1) Issuance of New Investment Units
At the board of directors’ meetings held on October 3 and October 15, 2014, the Investment Corporation resolved on the issuance of new investment units as
described below, in order to use the proceeds for part of the funds for acquisitions of specified assets and expenses incidental to the acquisitions. Payment
completed on October 22, 2014 for the investment units issued through public offering.
As for the new investment units to be issued through third-party allotment, Mizuho Securities Co., Ltd., the allottee, notified on November 12, 2014 about
subscribing for the whole of the investment units to be offered (4,900 units). Payment completed on November 18, 2014.
As a result, unitholders’ capital increased to 88,925,149,945 yen, with the number of investment units issued and outstanding totaling 1,018,110 units.

15

16

Sekisui House SI Residential Investment Corporation

Financial Section[Issuance of investment units through public offering (primary offering)]
Number of units issued: 97,970 units
Issue price (offer price): 99,157 yen per unit
Total issue price (total offer price): 9,714,411,290 yen
Paid-in amount (issue amount): 95,902 yen per unit
Total paid-in amount (total issue amount): 9,395,518,940 yen
Payment date
: October 22, 2014
Starting date for calculating distributions: October 1, 2014
[Issuance of investment units by way of third-party allotment]
Number of units issued: 4,900 units
Paid-in amount (issue amount): 95,902 yen per unit
Total paid-in amount (total issue amount): 469,919,800 yen
Payment date
: November 18, 2014
Starting date for calculating distributions: October 1, 2014
Third party allottee: Mizuho Securities Co., Ltd.

(Reference Information)

A. Assignment of Owned Property
The Investment Corporation sold the following property as of October 3, 2014.
Property No.
Retail-2

Property Nameb-town JINGUMAE II

Sale Price(millions of yen)

Location
Jingumae, Shibuya-ku, Tokyo

Sale Date

1,200

October 3, 2014

Acquisition Price(millions of yen)

Acquisition Date

(Note) The location is based on the indication on the registry.

B. New Asset Acquisitions
The Investment Corporation acquired the following eight properties as of November 4, 2014 and January 15, 2015.
Property No.

Property Name

Location

Residence-98

Prime Maison MORISHITA

Morishita, Koto-ku, Tokyo

1,720

November 4, 2014

Residence-99

Prime Maison SHINAGAWA

Kita-Shinagawa, Shinagawa-ku, Tokyo

1,680

November 4, 2014

Residence-100

Prime Maison ODORI KOEN

Odori-Nishi, Chuo-ku, Sapporo-shi, Hokkaido

2,660

November 4, 2014

Residence-101

Prime Maison MINAMI 2-JO

Minami 2-jo Nishi, Chuo-ku, Sapporo-shi, Hokkaido

1,470

November 4, 2014

Residence-102

Prime Maison KAMOKAMOGAWA

Minami 7-jo Nishi, Chuo-ku, Sapporo-shi, Hokkaido

970

November 4, 2014

Residence-103

Prime Maison CENTRAL PARK

Kashii Teriha, Higashi-ku, Fukuoka-shi, Fukuoka

2,230

November 4, 2014

Residence-104

MAST LIFE YAHIRO

Yahiro, Sumida-ku, Tokyo

1,670

November 4, 2014

Residence-105

Prime Maison EBISU

Ebisu, Shibuya-ku, Tokyo

3,585

January 15, 2015

Contents

Financial Statements
Balance Sheet
Statement of Income and Retained Earnings
Statement of Changes in Net Assets
Statement of Cash Distributions
Statement of Cash Flows
Notes to Financial Statements
Independent Auditor’s Report

19
21
22
23
24
25
45

(Note) The location is based on the indication on the registry.

C. Borrowing of Funds
The Investment Corporation borrowed funds as follows in order to allocate them for acquiring real estate trust beneficiary interests and for other purposes.
LenderMizuho Bank, Ltd.
Sumitomo Mitsui Banking Corporation

Drawdown Date
November 4,
2014

500
500

Interest Rate

Fixed/
Floating

Repayment
Date

Repayment
Method0.33000%(Note 1)

Floating

August 31,
2015

Lump-sum
repayment

Fund for acquisition of Unsecured
real estate beneficiary andinterest, etc.
unguaranteed

0.33000%(Note 2)

Floating

February29, 2016

Lump-sum
repayment

Fund for acquisition of Unsecured
real estate beneficiary andinterest, etc.
unguaranteed

800

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking Corporation

Loan amount(millions ofyen)

January 15,
2015

800

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

1,200

Total

3,800

Use

Collateral(Note 1) The interest rate is applicable for the period from January 30, 2015 to February 27, 2015.

17(Note 2) The interest rate is applicable for the period from January 30, 2015 to February 27, 2015.

18

Sekisui House SI Residential Investment Corporation

Financial Statements(1) Balance Sheet(Thousands of yen)
17th Fiscal Period(As of March 31, 2014)(Thousands of yen)

18th Fiscal Period(As of September 30, 2014)

Assets17th Fiscal Period(As of March 31, 2014)

18th Fiscal Period(As of September 30, 2014)

Liabilities

Current assets
Cash and deposits
Cash and deposits in trust

Current liabilities
3,442,531
4,174,220

3,595,652
4,769,531

Operating accounts receivable
Prepaid expenses

159,587
116,460

145,036
137,101

Deferred tax assets
Consumption taxes receivable
Other
Allowance for doubtful accounts

83
13,486
337
(870)

99
69,086912(1,681)

7,905,837

8,715,737

Total current assets
Non-current assets

Operating accounts payable

305,654289,892

3,300,000
16,159,000

8,700,000
6,650,000

Accounts payable – other416,881446,304

Accrued expenses
Income taxes payable

69,827
2,005

64,192
2,079

Advances received
Other

258,338
29,553303,927
12,782

20,541,260

16,469,179

Investment corporation bondLong-term loans payable

11,500,000
52,809,500

14,500,000
62,609,500

Tenant leasehold and security deposits in trust

1,967,645

2,303,807

Total non-current liabilities

66,277,145

79,413,307

86,818,405

95,882,486

Unitholders’ capital

68,294,216

79,059,711

Surplus
Unappropriated retained earnings

1,765,604

1,950,792

1,765,604

1,950,792

70,059,821

81,010,504

Short-term loans payable
Current portion of long-term loans payable

Total current liabilities
Non-current liabilities

Property, plant and equipment
Buildings in trust
Accumulated depreciation

71,913,979(9,013,788)

82,643,364(10,188,991)

Buildings in trust, net

62,900,190

72,454,373

551,871594,179

Total liabilities

Accumulated depreciation(122,933)(141,133)

Structures in trust, net

428,937

453,045

Net assets
Unitholders’ equity

961,624(270,751)

1,292,569(321,942)

690,872

970,626

Structures in trust

Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation

86,395(38,322)102,935(44,439)

48,07258,496

Land in trust

84,024,725

93,263,002

Total property, plant and equipment

148,092,799

167,199,543

Intangible assets
Leasehold rights in trust
Other

156,073
1,793

154,055
1,164

Total intangible assets

157,867

155,220

235,682299,924

235,682
341,576

Other

115,450

120,354

Total investments and other assets

651,056

697,613

148,901,723

168,052,377

70,66589,884Tools, furniture and fixtures in trust, net

Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets

70,059,821

81,010,504

156,878,226

176,892,990

See accompanying notes to the financial statements.

Investments and other assets
Lease and guarantee deposits
Long-term prepaid expenses

Total non-current assets
Deferred assets
Investment corporation bond issuance costs
Investment unit issuance costs
Total deferred assets
Total assets

19-

34,991

70,665

124,876

156,878,226

176,892,990

20

Sekisui House SI Residential Investment Corporation(2) Statement of Income and Retained Earnings(3) Statement of Changes in Net Assets(Thousands of yen)
18th Fiscal Period(April 1, 2014 –September 30, 2014)

17th Fiscal Period(October 1, 2013 –March 31, 2014)

17th fiscal period (from October 1, 2013 to March 31, 2014)(Thousands of yen)
Unitholders’ equity

Operating revenue
Rent revenue - real estate
Gain on sales of real estate properties

4,917,718
35,1895,591,570

2,233,689
326,184
13,1672,560,551
360,826
13,752

30,6363,600
870
102,244

31,1163,600
1,387
156,425

2,710,393

3,127,659

2,242,513

2,463,911

665
139

770
220

Interest on tax refund
Compensation income
Other

80
5,674
38

12
160

Total non-operating income

6,598

1,163

Interest expenses
Interest expenses on investment corporation

389,965
25,964

390,80245,969bonds
Amortization of investment corporation bond

3,837

6,491

issuance costs
Borrowing related expenses
Amortization of investment unit issuance costs
Other

61,63145

62,645
6,113
93

Total non-operating expenses

481,443

512,115

Ordinary income

1,767,668

1,952,959

Income before income taxes

1,767,668

1,952,959

2,140
12

2,236
(15)

Operating expenses
Expenses related to rent business
Asset management fee
Asset custody fee
Administrative service fees
Directors’ compensations
Provision of allowance for doubtful accounts
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Reversal of distributions payableNon-operating expenses

Income taxes - current
Income taxes - deferred
Total income taxes

2,153

2,220

1,765,515

1,950,739

Retained earnings brought forward

88

53

Unappropriated retained earnings

1,765,604

1,950,792

Net income

Total unitholders’ Total Net Assets
equityUnappropriatedretainedearnings

Total surplus

68,294,216

1,681,846

1,681,846

69,976,063

69,976,063

Distribution from surplus(1,681,757)(1,681,757)(1,681,757)(1,681,757)

Net Income

1,765,515

1,765,515

1,765,515

1,765,515-

83,75783,75783,75783,757

68,294,216

1,765,604

1,765,604

70,059,821

70,059,821

5,591,570

4,952,907

Total operating revenue

Surplus

Unitholders’capitalBalance as of October 1,
2013
Changes during the fiscal
periodTotal changes of items
during the fiscal period
Balance as of March 31,
2014

18th fiscal period (from April 1, 2014 to September 30, 2014)(Thousands of yen)
Unitholders’ equity
Surplus

Balance as of April 1,
2014
Changes during the fiscal
periodIssuance of new
investment units

Unitholders’capitalUnappropriatedretainedearnings

Total surplus

68,294,216

1,765,604

1,765,604

10,765,494

Total unitholders’ Total Net Assets
equity70,059,821

70,059,821

10,765,494

10,765,494

Distribution from surplus(1,765,550)(1,765,550)(1,765,550)(1,765,550)

Net Income

1,950,739

1,950,739

1,950,739

1,950,739

10,765,494

185,188

185,188

10,950,682

10,950,682

79,059,711

1,950,792

1,950,792

81,010,504

81,010,504

Total changes of items
during the fiscal period
Balance as of September
30, 2014

See accompanying notes to the financial statements.

21

22

Sekisui House SI Residential Investment Corporation(4) Statement of Cash Distributions(5) Statement of Cash Flows

17th Fiscal Period(October 1, 2013 – March 31, 2014)

18th Fiscal Period(April 1, 2014 – September 30, 2014)

I. Unappropriated retained earnings

1,765,604,403 yen

1,950,792,909 yen

II. Cash distributions

1,765,550,510 yen

1,950,376,440 yen(11,062 yen)

(2,131 yen)

Item

(Cash distributions per unit)
III. Retained earnings brought forward
Method for calculating cash
distributions

53,893 yen

416,469 yen

As provided in Article 34-1-2 of its
Articlesof
Incorporation,
theInvestment Corporation makes it a

As provided in Article 34-1-2 of its
Articlesof
Incorporation,
theInvestment Corporation makes it abasic policy to make cash distributions
in excess of the amount equivalent to
90% of the distributable income
amount as stipulated in Article 67-15 of
the Act on Special Measures
Concerning Taxation. Following thisbasic policy to make cash distributions
in excess of the amount equivalent to
90% of the distributable income
amount as stipulated in Article 67-15 of
the Act on Special Measures
Concerning Taxation. Following thispolicy, and in consideration of the factthatindividual
unitholder
must
calculate the capital gains or losses forthe cash distributions in excess ofpolicy, and in consideration of the factthatindividual
unitholder
must
calculate the capital gains or losses forthe cash distributions in excess ofearnings

earnings

when

the

Investment

when

the

Investment

Corporation distributes cash in excessof earnings as stipulated in Article
34-1-4 of its Articles of Incorporation,
the Investment Corporation distributed

Corporation distributes cash in excessof earnings as stipulated in Article
34-1-4 of its Articles of Incorporation,
the Investment Corporation distributed

1,765,550,510 yen, which is the entire

1,950,376,440 yen, which is the entire

amount of the unappropriated retained
earnings excluding the fractions lessthan one yen per investment unit, as

amount of the unappropriated retained
earnings excluding the fractions lessthan one yen per investment unit, as

distribution of earnings.

distribution of earnings.

(Thousands of yen)
17th Fiscal Period(October 1, 2013 –March 31, 2014)

18th Fiscal Period(April 1, 2014 –September 30, 2014)

Cash flows from operating activities

1,767,668
1,074,178

1,952,959
1,253,358

3,837

6,491

(469)

6,113
811

(665)
415,929(75,870)
16,378(770)
436,771
14,550(17,820)

24,02521,709(55,600)(9,730)

Increase (decrease) in accounts payable - other

28,25946,905

Increase (decrease) in advances received(74,706)
541,099

45,588-Decrease (increase) in long-term prepaid expenses(77,749)(44,472)

Other, net

33,757(17,565)

Subtotal

3,697,381

3,617,591

Interest income received

665(426,084)770(442,406)

Income before income taxes
Depreciation
Amortization of investment corporation bond issuancecosts
Amortization of investment unit issuance costs
Increase (decrease) in allowance for doubtful accounts
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in prepaid expenses
Decrease (increase) in consumption taxes receivable
Increase (decrease) in operating accounts payable

Decrease due to sale of property, plant and equipmentin trust

Interest expenses paid
Income taxes paid
Net cash provided by operating activities(1,237)(2,161)

3,270,725

3,173,793(11,270,645)(20,382,717)

182,627

505,853(118,079)(169,690)(5,493)(4,904)(11,211,591)(20,051,459)

3,300,000(4,900,000)

8,700,000(3,300,000)

14,030,000(10,137,000)
5,458,785

9,800,000(9,509,000)
2,976,428-

10,724,389

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 investments and other assets,
net
Net cash 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
Proceeds from issuance of investment units
Dividends paid

(1,680,732)(1,765,719)

Net cash provided by financing activities

6,071,052

17,626,098

Net increase (decrease) in cash and cash equivalents(1,869,813)

748,432

Cash and cash equivalents at the beginning of period

9,486,565

7,616,751

Cash and cash equivalents at the end of period

7,616,751

8,365,184

See accompanying notes to the financial statements.

23

24

Sekisui House SI Residential Investment Corporation

Notes to Financial Statements
1. Organization
Sekisui House SI Residential Investment Corporation (the “Investment Corporation”), formerly Sekisui House
SI Investment Corporation, is a Japanese real estate investment corporation established in April 2005 underthe Act on Investment Trusts and Investment Corporations (the “Investment Trusts Act”) and listed on theTokyo Stock Exchange in July 2005. Since March 2010, it has been sponsored by Sekisui House, Ltd., aleading company in the housing industry, and Spring Investment Co., Ltd., an international fund manager, andhas worked to establish a stable portfolio primarily comprising residential properties. In June 2014, theInvestment Corporation changed its name to the present one to demonstrate its new strategy of solely
investing in real properties that are mainly used as residences while removing retail properties, which had
previously been identified as a supplementary investment target, from its investment horizons. The Investment
Corporation is externally managed by a licensed asset management company, Sekisui House SI AssetManagement, Ltd.

2. Basis of Presentation
The Investment Corporation maintains its accounting records and prepares its financial statements inaccordance with accounting principles generally accepted in Japan (“Japanese GAAP”), including provisions
set forth in the Financial Instruments and Exchange Act, the Investment Trusts Act, the Companies Act and therelated regulations, which are different in certain respects as to the application and disclosure requirements ofInternational Financial Reporting Standards.
The accompanying financial statements are basically a translation of the financial statements of the Investment
Corporation, which were prepared 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 topresent them in a format which is more familiar to readers outside Japan. In addition, the notes to financial
statements include certain information which might not be required under Japanese GAAP but is presented
herein as additional information.
The Investment Corporation’s fiscal period is a six-month period, which ends at the end of March and
September of each year. The Investment Corporation 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 theaccompanying financial statements and the notes thereto. As a result, the total 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. Depreciation method for
non-current assets

2. Accounting for deferredassets25(1) Property, plant and equipment
Depreciation is calculated using the straight-line method.
The estimated useful lives of major property, plant and equipment are as
follows:
Buildings in trust3 – 60 years
Structures in trust3 – 20 years
Machinery and equipment in trust
3 – 15 years
Tools, furniture and fixtures in trust2 – 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 contract.
(1) Investment corporation bond issuance costs
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).
3. Standards for recording
Allowance for doubtful accounts
allowance
For allowance for doubtful accounts against possible losses arising fromdefault on receivables, uncollectable amount is estimated and recorded
by investigating collectability on a case-by-case examination for doubtful
and other specific receivables.
4. Standards for recording
Accounting treatment of property taxes, etc.
Property taxes, city planning taxes and depreciable asset taxes
revenues and expenses(“property taxes, etc.”) assessed for the real estate owned by theInvestment Corporation are charged to income at an amountattributable to each fiscal period as expenses related to rent business.
Property taxes etc. that the Investment Corporation pays to the seller inconnection with purchase of real estate (including trust beneficiaryinterests in real estate as entrusted property) as they are deemed to be
attributable to the Investment Corporation are included in theacquisition cost of the acquired real estate, instead of expenses.
Property taxes, etc. capitalized as a part of the acquisition cost
amounted to 23,828 thousand yen for the 17th fiscal period and 55,017
thousand yen for the 18th fiscal period, respectively.
5. Method of hedge accounting (1) Method of hedge accounting
Special accounting is applied for interest rate swap transactions.
(2) Hedging instruments and hedged items
Hedging instrument: interest rate swap transactions
Hedged items: interest expenses on loans payable(3) Hedging policy
Based on its basic policy for risk management, the Investment
Corporation utilizes derivative transactions in order to hedge risks
designated in its Articles of Incorporation.
(4) Method for assessing the effectiveness of hedging
Assessment of the effectiveness of hedging is omitted as requirements
are satisfied for special accounting for interest rate swap transactions.
6. Scope of funds (cash and
The funds (cash and cash equivalents) in the statements of cash flows
cash equivalents) in theconsist of cash on hand and cash in trust; deposits that can be withdrawn atstatement of cash flows
any time and deposits in trust; and short-term investments with a maturity of 3
months or less from the date of acquisition, which are readily convertible tocash and bear only an insignificant risk of value fluctuation.
7. Other significant items(1) Accounting methods for trust beneficiary interests in real estate, etc. as
fundamental to preparing
entrusted property
the financial statements
Regarding trust beneficiary interests in real estate, etc. as entrusted
property, all asset and liability accounts of the entrusted properties aswell as all revenue and expense accounts generated by the entrusted
properties are recorded in relevant accounts on the balance sheet andstatement of income.
Furthermore, the following accounts are considered material and thusstated separately in the balance sheet related to entrusted properties
from the relevant accounts.
1) Cash and deposits in trust2) Buildings in trust, structures in trust, machinery and equipment intrust, tools, furniture and fixtures in trust and land in trust3) Leasehold rights in trust4) Tenant leasehold and security deposits in trust(2) Accounting for consumption taxes
National and local consumption taxes are excluded from the transaction
amounts. Non-deductible consumption taxes for acquisition of assets areincluded in the acquisition cost of each asset.

26

Sekisui House SI Residential Investment Corporation

4. Note to Balance Sheet

6. Notes to Statement of Changes in Net Assets

Minimum total net assets designated in Article 67-4 of the Investment Trusts Act

17th Fiscal Period(October 1, 2013 –March 31, 2014)(Thousands of yen)
17th Fiscal Period(As of March 31, 2014)

18th Fiscal Period(As of September 30, 2014)
50,00050,000Total number of authorized investment
units and number of investment units
issued and outstanding
Total number of authorized investment units
Number of investment units issued andoutstanding

5. Notes to Statement of Income and Retained Earnings

18th Fiscal Period(April 1, 2014 –September 30, 2014)

2,000,000 units

10,000,000 units

159,605 units

915,240 units

Breakdown of real estate rental revenues and expenses(Thousands of yen)
17th Fiscal Period(October 1, 2013 –March 31, 2014)

18th Fiscal Period(April 1, 2014 –September 30, 2014)

A. Real estate rental revenues

7. Notes to Statement of Cash Flows
Reconciliation of the Cash and Cash Equivalents at the End of Period in the statement of cash flows with thecorresponding accounts on the balance sheet(Thousands of yen)

Rent revenue - real estate
Rents
Other revenue
Total real estate rental revenue

4,730,488

5,386,820

187,229

204,749

17th Fiscal Period(As of March 31, 2014)

18th Fiscal Period(As of September 30, 2014)

Cash and deposits

3,442,531

Cash and deposits in trust

4,174,220

3,595,652
4,769,531

Cash and cash equivalents

7,616,751

8,365,184

4,917,718

5,591,570

Outsourcing expenses

455,559

496,630

Utilities expenses

92,975111,148

Insurance expenses

5,833

6,448

Repair expenses

134,577

135,879

Property and other taxes

225,664

288,457

Due within one year

23,76023,820Due after one year

894,960

885,310

Total

918,720909,130

B. Real estate rental expenses
Expenses related to rent business

Trust fees

46,04645,038Other

199,475

224,210

1,073,556

1,252,737

2,233,689

2,560,551

2,684,028

3,031,018

Depreciation
Total real estate rental expenses
C. Real estate rental revenues andexpenses (A – B)

8. Lease Transactions
Operating lease transactions as lessee
Future lease payable equivalents

17th Fiscal Period (from October 1, 2013 to March 31, 2014)

18th Fiscal Period(As of September 30, 2014)

Operating lease transactions as lessor
Future lease receivable equivalents(Thousands of yen)
17th Fiscal Period(As of March 31, 2014)

Due within one year

Breakdown of gain on sale of real estate properties(Thousands of yen)
17th Fiscal Period(As of March 31, 2014)

18th Fiscal Period(As of September 30, 2014)

1,033,454

1,205,298

Due after one year

1,733,173

2,610,294

Total

2,766,627

3,815,592(Thousands of yen)

Esty Maison SENDAGAYA
Revenue from sale of real estate
Cost of real estate sale541,099

Other sale expenses

23,711Gain on sale of real estate properties

600,000
564,81035,18918th Fiscal Period (from April 1, 2014 to September 30, 2014)
Not applicable27

28

Sekisui House SI Residential Investment Corporation

9. Financial Instruments

2. Matters Concerning Fair Value, Etc. of Financial Instruments

1. Matters Concerning Status of Financial Instruments(1) Policy on Handling Financial Instruments
The Investment Corporation raises necessary funds (through additional issuance of investment units,
borrowings and issuance of investment corporation bonds) in light of its financial plans and surplus funds
management plans. With regard to surplus funds, the Investment Corporation focuses on safety andliquidity, and manages them as interest-bearing ordinary bank deposits or short-term time deposits in order
to avoid market risks as much as possible. As for derivative transactions, the Investment Corporation may
use them to hedge against interest rate fluctuation risks, and will not conduct any speculative transactions.

The following are the book values recorded on the balance sheet, fair values and the difference between theseamounts. The following tables do not include those for which determining the fair value is recognized to be
extremely difficult.

(2) Description of Financial Instruments and Associated Risks, and Risk Management Structure
Operating accounts receivable are exposed to credit risks of customers. In order to mitigate such risks, theInvestment Corporation works to select tenants by taking into account the tenants’ credibility and has
established a management system for controlling the status of rent payment.
Lease and guarantee deposits from rental properties are exposed to credit risks of the companies to dobusiness with. In order to mitigate such risks, the Investment Corporation works to periodically grasp thefinancial conditions, etc. of such companies.
The possibility, conditions and subsequent burden of interest payments for borrowings and issuance ofinvestment corporation bonds are impacted by the interest rate situations and other factors. Thus, there is
no guarantee that the Investment Corporation can successfully make borrowings or issue investment
corporation bonds at a time when and under the conditions that it prefers. In addition, if borrowings are
made at floating interest rates, interest payments may increase due to later fluctuations in the interest rates.
Depending on the lending attitude of financial institutions, new borrowings may not be possible or theInvestment Corporation may have to borrow funds under disadvantageous conditions in terms of interest
rates, collateral provision and financial covenants, etc.

17th Fiscal Period (As of March 31, 2014)
Book Value Recordedon the Balance Sheet(Thousands of yen)
Fair Value

Difference(1) Cash and deposits

3,442,531

3,442,531-(2) Cash and deposits in trust

4,174,220

4,174,220-

159,587

159,587

-

(870)

(870)

-

158,717

158,717-

7,775,469

7,775,469-(4) Operating accounts payable

305,654305,654-(5) Short-term loans payable

3,300,000

3,300,000-(6) Current portion of long-term loans
payable16,159,000

16,218,576

59,576(7) Investment corporation bonds

11,500,000

11,253,422(246,577)(8) Long-term loans payable

52,809,500

52,798,649(10,850)

Total of liabilities

84,074,154

83,876,302(197,852)---(3) Operating accounts receivable
Allowance for doubtful accounts

Total of assets(9) Derivative transactions

Concerning the market risks (interest rate fluctuation risk, etc.) related to the above-mentioned borrowings
and investment corporation bonds, the Investment Corporation works to mitigate them in accordance with
the Derivative Transactions Handling and Risk Management Regulations, an internal rule designated by the
Asset Management Company.

18th Fiscal Period (As of September 30, 2014)(1) Cash and deposits

3,595,652

3,595,652-

Moreover, for the management of liquidity risk related to fund raising (risk of failing to execute repayment on
the repayment dates), the department in charge at the Asset Management Company prepares and updates
cash flow plans in a timely manner based on reports from its respective departments. The liquidity risk isalso managed by such measures as maintaining liquidity on hand at a certain level.

(2) Cash and deposits in trust

4,769,531

4,769,531-

145,036

145,036-(1,681)(1,681)-

143,354

143,354-8,508,538

8,508,538-(4) Operating accounts payable

289,892

289,892-(5) Short-term loans payable

8,700,000

8,700,000-(6) Current portion of long-term loans
payable6,650,000

6,654,571

4,571(7) Investment corporation bonds

14,500,000

14,141,843(358,156)(8) Long-term loans payable

62,609,500

62,576,856(32,643)

Total of liabilities

92,749,392

92,363,163(386,229)---(3) Supplementary Explanation on Matters Concerning Fair Value, etc. of Financial Instruments
The fair value of financial instruments, aside from values based on market price, include values based onreasonable calculations when there is no market price. Certain variable factors are adopted in calculating
those values, and there may be cases where the values will vary when different assumptions are adopted.
As for the contract value and other conditions of derivative transactions indicated in “2. Matters Concerning
Fair Value, Etc. of Financial Instruments”, the value itself is not an indicator showing the market risks related
to such transactions.

Book Value Recordedon the Balance Sheet(3) Operating accounts receivable
Allowance for doubtful accounts

Total of assets(9) Derivative transactions(Thousands of yen)
Fair Value

Difference(Note 1) Calculation method for fair value of financial instruments and matters concerning derivative transactions(1) Cash and deposits, (2) Cash and deposits in trust and (3) Operating accounts receivable29

30

Sekisui House SI Residential Investment Corporation

As these are settled within a short period of time, the fair value is approximately the same as the book value
and is thus stated at that book value.
In calculating the fair value of operating accounts receivable, it is difficult to determine the credit risk
individually. Accordingly, allowance for doubtful accounts is deemed as credit risk.
(4) Operating accounts payable and (5) Short-term loans payable
As these are settled within a short period of time, the fair value is approximately the same as the book value
and is thus stated at that book value.
(6) Current portion of long-term loans payable and (8) Long-term loans payable
The fair value of those with floating interest rates is based on the book value, as it reflects the market interest
rate within a short period of time and thus is considered to be nearly equal to the book value. (However, the fairvalue of certain long-term loans payable with floating interest rates that qualifies for the special accounting ofinterest rate swaps [see Notes “Derivative Transactions”.] is based on the method of calculating by discounting
the sum of its principal and interest payments net of any cash flows from the interest-rate swap by areasonably estimated rate assumed as being applicable to a new similar borrowing to be made by theInvestment Corporation.) The present value of those with fixed interest rates is based on the method of
discounting the combined total of principal and interest by a reasonably estimated rate assumed as being
applicable to a new similar borrowing to be made by the Investment Corporation.
(7) Investment corporation bonds
As the investment corporation bonds of the Investment Corporation are traded over the counter throughnegotiations, it is difficult to indicate the fair value as the market price. The present value is based on themethod of calculating by discounting the combined total of principal and interest by a reasonably estimatedrate assumed as being applicable to a similar bond issuance.
(9) Derivative transactions
See Notes “Derivative Transactions”.

(Note 3) Scheduled redemption and repayment amount of investment corporation bonds and borrowings
17th Fiscal Period (As of March 31, 2014)
Due in 1 Yearor Less(1) Short-term loans
payable(2) Investment
corporation bonds(3) Long-term loans
payableTotal of liabilities(1) Cash and deposits(2) Cash and deposits
in trust(3) Operating accounts
receivable
Total of assets(Thousands of yen)
Due after 1
Due after 2
Due after 3
Due after 4
Due after
year through Years through Years through Years through5 Years
2 Years
3 Years
4 Years
5 Years
-

-

-

-

-

159,587

-

-

-

-

-

7,776,339

-

-

-

-

-

18th Fiscal Period (As of September 30, 2014)(1) Cash and deposits(2) Cash and deposits
in trust(3) Operating accounts
receivable
Total of assets

3,595,652
4,769,531
145,036
8,510,220--

4,000,000

2,500,000

5,000,000

16,159,000

2,850,000

9,500,000

4,805,000

10,882,000

24,772,500

19,459,000

2,850,000

9,500,000

8,805,000

13,382,000

29,772,500

Due in 1 Yearor Less(1) Short-term loans
payable(2) Investment
corporation bonds(3) Long-term loans
payableTotal of liabilities

8,700,000(Thousands of yen)
Due after 1
Due after 2
Due after 3
Due after 4
Due after
year through Years through Years through Years through5 Years
2 Years
3 Years
4 Years
5 Years----

4,000,000

2,500,000

8,000,000

6,650,000

2,850,000

12,205,000

4,600,000

8,382,000

34,572,500

15,350,000

2,850,000

12,205,000

8,600,000

10,882,000

42,572,500(Note 4) Financial instruments for which discerning of fair value is recognized to be extremely difficult

3,442,531
4,174,220

Due in 1 Yearor Less-

18th Fiscal Period (As of September 30, 2014)(Note 2) Scheduled redemption amount of monetary claims
17th Fiscal Period (As of March 31, 2014)
Due in 1 Yearor Less

3,300,000(Thousands of yen)
Due after 1
Due after 2
Due after 3
Due after 4
Due after
year through Years through Years through Years through5 Years
2 Years
3 Years
4 Years
5 Years-(Thousands of yen)
Due after 1
Due after 2
Due after 3
Due after 4
Due after
year through Years through Years through Years through5 Years
2 Years
3 Years
4 Years
5 Years
-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Category

17th Fiscal Period(As of March 31, 2014)(Thousands of yen)
18th Fiscal Period(As of September 30, 2014)(1) Lease and guarantee deposits

235,682

235,682(2) Tenant leasehold and security
deposits in trust

1,967,645

2,303,807

(1)

(2)

Lease and guarantee deposits
Lease and guarantee deposits are not subject to disclosure of fair value because discerning of fair value is recognized to be
extremely difficult as reasonable estimation of cash flows is impossible since there is no market price and also since it isdifficult to calculate the deposit period in effect.
Tenant leasehold and security deposits in trust
Tenant leasehold and security deposits in trust, which are deposited by the tenants of rental properties, are not subject todisclosure of fair value because reasonable estimation of cash flows is recognized to be extremely difficult since there is nomarket price and also since it is difficult to calculate the deposit period in effect.

10. Negotiable Securities
17th Fiscal Period (As of March 31, 2014)
Not applicable
18th Fiscal Period (As of September 30, 2014)
Not applicable

11. Derivative Transactions
1. Derivatives to which hedge accounting is not applied
17th Fiscal Period (As of March 31, 2014)
Not applicable
18th Fiscal Period (As of September 30, 2014)
Not applicable31

32

Sekisui House SI Residential Investment Corporation

2. Derivatives to which hedge accounting is applied

13. Income Taxes

17th Fiscal Period (As of March 31, 2014)
The following is the contract amount or amount equivalent to the principal under the contract, etc. as ofbalance sheet date by method of hedge accounting.

1. Deferred tax assets and liabilities consisted of the following:

Method of Hedge
Accounting

Type of Derivative
Main Hedged Item
Transactions

Contract Amount (Note 1)
Of Which,over 1 year

(Thousands of yen)Calculation
Fair
Method for
Value
the Fair
Value

Interest rate swap
transaction
Long-term loans
54,109,500
47,459,500 (Note 2)
Receivable floating;payablePayable fixed(Note 1) The contract amount of interest rate swaps is indicated based on the notional principal amount.
(Note 2) Transactions for which special accounting for interest rate swaps is applied are combined with long-term loans
payable for accounting purposes. Accordingly, their fair value is included in the fair value of the relevant long-termloans payable (See Note “Financial Instruments” 2. Matters Concerning Fair Value, Etc. of Financial Instruments(Note 1) (8) Long-term loans payable.).
Special accounting
for interest rate
swaps

18th Fiscal Period (As of September 30, 2014)
The following is the contract amount or amount equivalent to the principal provided in the contract, etc. as of
the closing of accounts for each method of hedge accounting.

Method of Hedge
Accounting

Type of Derivative
Main Hedged Item
Transactions

Contract Amount (Note 1)
Of Which,over 1 year

(Thousands of yen)Calculation
Fair
Method for
Value
the Fair
Value

Interest rate swap
transaction
Long-term loans
63,909,500
57,259,500 (Note 2)
Receivable floating;payablePayable fixed(Note 1) The contract amount of interest rate swaps is indicated based on the notional principal amount.
(Note 2) Transactions for which special accounting for interest rate swaps is applied are combined with long-term loans
payable for accounting purposes. Accordingly, their fair value is included in the fair value of the relevant long-termloans payable (See Note “Financial Instruments” 2. Matters Concerning Fair Value, Etc. of Financial Instruments(Note 1) (8) Long-term loans payable.).
Special accounting
for interest rate
swaps

Deferred tax assets:
Amortization of leasehold rights in trust
Amount of accrued business taxes not deductible
from taxable income
Subtotal deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax assets, net

17th Fiscal Period(As of March 31, 2014)(Thousands of yen)
18th Fiscal Period(As of September 30, 2014)

2,987
83

3,675
99

3,071
(2,987)
83
83

3,775
(3,675)99
99

2. Reconciliation of the statutory tax rate to the Effective Income Tax Rate
17th Fiscal Period(As of March 31, 2014)

18th Fiscal Period(As of September 30, 2014)

Statutory tax rate

36.59%

34.16%(Adjustment)
Deductible cash distributions
Other(36.55%)0.08%(34.11%)
0.06%

0.12%

0.11%

Effective income tax rate

3. Adjustment of Deferred Tax Assets and Deferred Tax Liabilities due to Changes in Income Tax Rate
With the Local Corporation Tax Act (Act No.11 of 2014) and the Act for Partial Amendment to Local Tax Law,
Etc. (Act No. 4 of 2014) promulgated on March 31, 2014, the local corporation tax has been established and apart of the local tax has been reclassified as national tax, effective for the fiscal year starting on or after
October 1, 2014. Accordingly, the statutory tax rate used to calculate deferred tax assets and deferred tax
liabilities concerning temporary differences that are expected to be resolved in and after the fiscal period
ending March 2015 (the 19th fiscal period) will be changed to 34.15%. The impact of this change on thedeferred tax assets and deferred tax liabilities at the end of the 18th fiscal period was minimal.

12. Retirement Benefits

14. Equity Method Income and Retained Earnings

17th Fiscal Period (As of March 31, 2014)
Not applicable as the Investment Corporation does not have any retirement benefit plan

17th Fiscal Period (from October 1, 2013 to March 31, 2014)
Not applicable as the Investment Corporation does not have any affiliated companies

18th Fiscal Period (As of September 30, 2014)
Not applicable as the Investment Corporation does not have any retirement benefit plan

18th Fiscal Period (from April 1, 2014 to September 30, 2014)
Not applicable as the Investment Corporation does not have any affiliated companies

15. Assets Retirement Obligations
17th Fiscal Period (from October 1, 2013 to March 31, 2014)
Not applicable
18th Fiscal Period (from April 1, 2014 to September 30, 2014)
Not applicable33

34

Sekisui House SI Residential Investment Corporation

16. Transactions with Related Parties

which Koji Sakamoto was in the position of Executive Director. Furthermore, Junichi Inoue resigned from office ofPresident of Sekisui House SI Asset Management, Ltd. effective March 20, 2014, and Osamu Minami took officeas President on the same date.

1. Parent Company and Major Corporation Unitholders
17th Fiscal Period (from October 1, 2013 to March 31, 2014)
Not applicable

18th Fiscal Period (from April 1, 2014 to September 30, 2014)

18th Fiscal Period (from April 1, 2014 to September 30, 2014)
Not applicable

Classification Name

2. Subsidiaries and Affiliates
17th Fiscal Period (from October 1, 2013 to March 31, 2014)
Not applicable
18th Fiscal Period (from April 1, 2014 to September 30, 2014)
Not applicable
3. Sister Companies
17th Fiscal Period (from October 1, 2013 to March 31, 2014)
Not applicable
18th Fiscal Period (from April 1, 2014 to September 30, 2014)
Not applicable
4. Directors and Major Individual Unitholders
17th Fiscal Period (from October 1, 2013 to March 31, 2014)

Classification NameBusiness
Description or
Occupation

Share of
VotingRights [orOwnershipof Such intheInvestment
Corporation]

Description ofTransaction

Balance atTransaction
the End ofAmountCategory
Period(thousands(thousandsof yen)of yen)Payment of asset
management fees to
Accounts
Sekisui House SI
391,048
payable –359,361
Asset Management,(Note 2)other
Ltd.
(Note 1)
Executive Director
Payment of institutionof the Investment
operation andCorporation and
Director andJunichiadministration fees to
Accounts
its close
President of
Inoue
Sekisui House SI
1,400 payable –1,470
relatives
Sekisui House SI
Asset Management,
other
Asset
Ltd.
(Note 3)
Management, Ltd.
Receipt of damage
compensation for
Hamamatsu Plaza,
5,674
etc.
(Note 4)(Note 1) The transaction was conducted by Junichi Inoue as representative of a third party (Sekisui House SI AssetManagement, Ltd.), and the fees are based on the terms and conditions designated in the Articles of Incorporationof the Investment Corporation.
(Note 2) The figure includes 60,064 thousand yen of asset management fees related to property acquisitions, which havebeen capitalized in the book value of individual real properties, and 4,800 thousand yen of asset management
fees related to property assignment, which have been recorded in other sales expenses.
(Note 3) The transaction was conducted by Junichi Inoue as representative of a third party (Sekisui House SI AssetManagement, Ltd.), and the fees are based on the institution operation and administration agreement.
(Note 4) The transaction was conducted by Junichi Inoue as representative of a third party (Sekisui House SI AssetManagement, Ltd.), claiming refund of for overpayment of property tax and city planning tax for Hamamatsu Plazaand 6 other properties owned by the Investment Corporation.
(Note 5) Of the amounts in the above table, consumption taxes are not included in the transaction amount, but are includedin the balance at the end of period.
(Note 6) Junichi Inoue resigned from office of Executive Director as of March 20, 2014, and Koji Sakamoto took office as
Executive Director on the same date. The transaction amounts indicates the figures for the 17th fiscal period in

35

Business
Description or
Occupation

Share of
VotingRights [orOwnershipof Such intheInvestment
Corporation]

Description ofTransaction

Balance atTransaction
the End ofAmountCategory
Period(thousands(thousandsof yen)of yen)Payment of asset
management fees to
Accounts
Sekisui House SI
493,606
payable–389,692
Asset
Management,
Executive Director(Note 2)otherLtd.
of the Investment
Director and(Note 1)
Corporation and
Osamu
President ofPayment of institution
its close
Minami Sekisui House SI
operation andrelatives
AccountsAssetadministration fees toManagement, Ltd.
Sekisui House SI
6,100 payable –1,512
Asset Management,
other
Ltd.
(Note 3)(Note 1) The transaction was conducted by Osamu Minami as representative of a third party (Sekisui House SI AssetManagement, Ltd.), and the fees are based on the terms and conditions designated in the Articles of Incorporationof the Investment Corporation.
(Note 2) The figure includes 132,780 thousand yen as asset management fees related to property acquisitions, which havebeen capitalized in the book value of individual real properties.
(Note 3) The transaction was conducted by Osamu Minami as representative of a third party (Sekisui House SI AssetManagement, Ltd.), and the fees are based on the institution operation and administration agreement.
(Note 4) Of the amounts in the above table, consumption taxes are not included in the transaction amount but are includedin the balance at the end of period.
(Note 5) The tenure of office of Koji Sakamoto as Executive Officer expired on June 11, 2014. Osamu Minami was
appointed as Executive Director at the general meeting of unitholders of the Investment Corporation, taking officeeffective June 12, 2014. The transaction amounts indicate the figures for the 18th fiscal period in which Koji
Sakamoto was in the position of Executive Director.

17. Segment Information[Segment Information]
Descriptions are omitted as the Investment Corporation has a single business segment of real estateleasing business.
[Related Information]
17th Fiscal Period (from October 1, 2013 to March 31, 2014)(1) Information by product and service
Descriptions are omitted as the Investment Corporation’s operating revenue under single product/service
classification for outside customers exceeds 90% of operating revenue recorded in the statement ofincome.
(2) Information by region(a) Operating revenue
Descriptions are omitted as the Investment Corporation’s operating revenue for outside customers inJapan exceeds 90% of operating revenue recorded in the statement of income.
(b) Property, plant and equipment
Descriptions are omitted as the amount of the Investment Corporation’s property, plant and equipment
located in Japan exceeds 90% of property, plant and equipment recorded in the balance sheet.
(3) Information by major customer
Descriptions are omitted as the Investment Corporation’s operating revenue for any individual outside
customer is less than 10% of operating revenue recorded in the statement of income.
18th Fiscal Period (from April 1, 2014 to September 30, 2014)(1) Information by product and service
Descriptions are omitted as the Investment Corporation’s operating revenue under single product/service

36

Sekisui House SI Residential Investment Corporation

classification for outside customers exceeds 90% of operating revenue recorded in the statement ofincome.
(2) Information by region(a) Operating revenue
Descriptions are omitted as the Investment Corporation’s operating revenue for outside customers inJapan exceeds 90% of operating revenue recorded in the statement of income.
(b) Property, plant and equipment
Descriptions are omitted as the amount of the Investment Corporation’s property, plant and equipment
located in Japan exceeds 90% of property, plant and equipment recorded in the balance sheet.
(3) Information by major customer
Descriptions are omitted as the Investment Corporation’s operating revenue for any individual outside
customer is less than 10% of operating revenue recorded in the statement of income.

18. Per Unit Information
17th Fiscal Period
18th Fiscal Period(October 1, 2013 –(April 1, 2014 –Item
March 31, 2014)
September 30, 2014)
Net assets per unit
87,791 yen
88,512 yen
Net income per unit
2,212 yen
2,163 yen
(Note 1) Diluted net income per unit has not been presented since no warrants or convertible bonds are outstanding.
(Note 2) The Investment Corporation implemented a 5-for-1 split of its investment units on April 1, 2014 as the effective
date. Accordingly, net assets per unit and net income per unit have been calculated on the assumption that the
split of investment units was conducted at the beginning of the 17th fiscal period ended March 2014.
(Note 3) Net income per unit has been calculated based on the following data:
PeriodPeriodItem
Net Income (thousands of yen)Amount not attributable to ordinary
unitholders (thousands of yen)
Net income attributable to ordinary
investment units (thousands of yen)
Average number of units during the
fiscal period (units)

17th Fiscal Period(October 1, 2013 –March 31, 2014)
1,765,515

18th Fiscal Period(April 1, 2014 –September 30, 2014)
1,950,739--

1,765,515

1,950,739

798,025

901,478

20. Significant Subsequent Events
1. Issuance of New Investment Units
At the board of directors’ meetings held on October 3 and October 15, 2014, the Investment Corporation
resolved on the issuance of new investment units as described below, in order to use the proceeds for part of
the funds for acquisitions of specified assets and expenses incidental to the acquisitions. Payment
completed on October 22, 2014 for the investment units issued through public offering, and on November 18,
2014 for the investment units issued by way of third-party allotment, respectively.
As a result, unitholders’ capital increased to 88,925,149,945 yen, with the number of investment units issued
and outstanding totaling 1,018,110 units.
[Issuance of investment units through public offering (primary offering)]
Number of units issued:
Issue price (offer price):
Total issue price (total offer price):
Paid-in amount (issue amount):
Total paid-in amount (total issue amount):
Payment date:
Starting date for calculating distributions:

97,970 units
99,157 yen per unit
9,714,411,290 yen
95,902 yen per unit
9,395,518,940 yen
October 22, 2014
October 1, 2014

[Issuance of investment units of investment units by way of third-party allotment]
Number of units issued:
Paid-in amount (issue amount):
Total paid-in amount (total issue amount):
Payment date:
Starting date for calculating distributions:Third party allottee:

4,900 units
95,902 yen per unit
469,919,800 yen
November 18, 2014
October 1, 2014
Mizuho Securities Co., Ltd.

19. Rental Properties
The Investment Corporation owns assets as trust beneficiary interests in real estate as entrusted property,
which comprises rental residential properties and rental retail properties. The real estate rental revenues andexpenses for the relevant rental properties amounted to 2,684,028 thousand yen for the 17th fiscal period and3,031,018 thousand yen for the 18th fiscal period, respectively. The following table provides the book value
recorded on the balance sheet, amount of change during the period and fair value of these rental properties.
17th Fiscal Period(October 1, 2013 –March 31, 2014)(Thousands of yen)
18th Fiscal Period(April 1, 2014 –September 30, 2014)

Book value recorded on the balance sheet
Balance at the beginning of period
138,507,635
148,249,019
Amount of net change during period
9,741,383
19,104,717
Balance at the end of period
148,249,019
167,353,736
Fair value at the end of period
149,737,600
173,301,700(Note 1) Book value recorded on the balance sheet indicates the book value less accumulated depreciation.
(Note 2) Net change during the 17th fiscal period is comprised of increase primarily attributable to new acquisitions of 7
properties (11,269,443 thousand yen) and decrease primarily attributable to assignment of Esty Maison
SENDAGAYA (541,099 thousand yen) and depreciation (1,073,556 thousand yen).Net change during the 18th
fiscal period is comprised of increases primarily attributable to new acquisitions of 4 properties (20,288,623
thousand yen) and decrease primarily attributable to depreciation and amortization (1,252,737 thousand yen).
(Note 3) Pursuant to the Articles of Incorporation, the fair value at the end of period indicates the appraisal value or
surveyed value provided by outside real estate appraisers with appraisal dates of March 31, 2014 and September
30, 2014, respectively.

37

38

Sekisui House SI Residential Investment Corporation

21. Detailed Schedules

5. Schedule of Investment Corporation Bonds

1. Schedule of Securities
Name

Not applicable
Real estate trust beneficiary interests are included in the Summary of Detailed Schedule of Real Properties.
2. Schedule of Contract Amount, Etc. and Fair Value of Derivative Transactions and Forward Exchange
Transactions(Thousands of yen)
Category

Contract Amount (Note 1)

Type

Transaction other thanmarket transaction

Fair Value(Note 2)

Of Which,over 1 year

Interest rate swap
transactions
Receive float /pay fixed

Total

63,909,500

57,259,500

63,909,500

57,259,500-(Note 1) The contract amount of interest rate swaps is indicated based on the notional principal amount.
(Note 2) Description of fair value is omitted as the transactions satisfy the requirements for special accounting under theaccounting standards for financial instruments.

3. Summary of Detailed Schedule of Real Properties

Type of Assets(Millions of yen)
Net
Balance Increase Decrease Balance
Balance
as ofduring during
as of
as of
Remarks
Or
Depreciation
April 1,thethe
September
September
2014
Period Period 30, 2014 Accumulated during the30, 2014
Amortization
PeriodAccumulated
Depreciation

Buildings in trust 71,913
Structures intrust
Machinery andProperty, equipment inplant and trust
equipment Tools, furnitureand fixtures intrust
Land in trust
Total
Intangible
assetsLeasehold rights
in trust
Other
Total

10,729-82,643

10,188

1,175

72,454(Note)

551

42

-

594

141

18

453

(Note)

961

330

-

1,292

321

51

970

(Note)

86

16

-

102

44

6

58

(Note)

84,024

9,238-

93,263--

93,263(Note)

157,538

20,357-

177,896

10,6961,250

167,199

164

-

-

164

10

2

154

6

-

-

6

5

0

1

171

-

-

171

16

2

155

Issue DateFirst Series
Unsecured
Investment February 28, 2013
Corporation
Bonds
SecondSeriesUnsecured
February 28, 2013
Investment
Corporation
Bonds
Third Series
Unsecured
Investment February 28, 2014
Corporation
Bonds
Fourth Series
Unsecured
Investment February 28, 2014
Corporation
Bonds
Fifth Series
Unsecured
Investment August 29, 2014
Corporation
Bonds
Total

Balance
Balance as Decrease
as ofof April 1, during the
CouponSeptember
2014
PeriodRate
30, 2014(millions of (millions of(%)(millions of
yen)
yen)
yen)

Redemption
Date

Purpose Collateral

4,000

-

4,000

0.630

February 28,
2018(Note 1) Unsecured

2,000

-

2,000

1.000

February 28,
2020(Note 1) Unsecured

2,500

-

2,500

0.374

February 28,
2019(Note 2) Unsecured

3,000

-

3,000

1.069

February 28,
2024(Note 2) Unsecured

-

-

3,000

0.871

August 30,
2024(Note 2) Unsecured

11,500-14,500(Note 1) The proceeds are used as funds for repayment of borrowings and acquisition of real estate trust beneficiaryinterests, etc.
(Note 2) The proceeds are used as funds for repayment of borrowings, etc.
(Note 3) These investment corporation bonds are equipped with pari passu clause among specified investment corporation
bonds.
(Note 4) Amounts of investment corporation bonds to be redeemed within five years after the date of the balance sheet are
as follows.
(Millions of yen)Due in 1 YearDue after 1 YearDue after 2 Years
Due after 3 Years
Due after 4 Yearsor Less
through 2 Years
through 3 Years
through 4 Years
through 5 Years
-

-

-

4,000

2,500

(Note) The amount of increase during the 18th fiscal period is primarily attributable to the acquisition of Esty Maison
KINSHICHO II, Esty Maison OJIMA, Prime Maison FUJIMIDAI and Esty Maison TSURUMAI.

4. Schedule of Other Specified Assets
Not applicable
Real estate trust beneficiary interests are included in the Summary of Detailed Schedule of Real Properties.

39

40

Sekisui House SI Residential Investment Corporation

6. Schedule of Loans Payable
Category

LenderMizuho Bank, Ltd.

Short-termloanspayableSumitomo Mitsui Banking
Corporation
The Bank of Tokyo-Mitsubishi
UFJ, Ltd.

1,100

-

1,100

-

Category
Remarks

LenderThe Senshu Ikeda Bank, Ltd.

500

-

-

500

The Shizuoka Bank, Ltd.

500

-

-

500

The 77 Bank, Ltd.

500

-

-

500

Shinkin Central Bank

500

-

-

February
0.99850% 27, 2015
(Note 2)500

The Hiroshima Bank, Ltd.

500

-

-

500

1,100

-

1,100

1,100

-

1,100

-

Mizuho Bank, Ltd.

-

4,350

-

4,350

Sumitomo Mitsui Banking
Corporation

-

4,350

-

4,350

3,300

8,700

3,300

8,700

Mizuho Bank, Ltd.

700

-

-

700

4,954

-

4,954

-

Aozora Bank, Ltd.

100

-

-

100

August 31,- 1.43000%
2014

Shinkin Central Bank

100

-

-

100

-

Mizuho Bank, Ltd.

200

-

-

200

200

-

-

200

200

-

-

200 1.18975%

100

-

-

100

100

-

-

100

300

-

-

300

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
The Bank of Tokyo-Mitsubishi
UFJ, Ltd.
Development Bank of Japan Inc.

3,954

-

3,954

600

-

600

2,000

-

-

0.34636%

425

-

-

425 1.57000%

Sumitomo Mitsui Banking
Corporation

425

-

-

425

1,500

-

-

1,500

Mizuho Bank, Ltd.

500

-

-

500

Sumitomo Mitsui Banking
Corporation

500

-

-

Resona Bank, Limited

950

-

-

Lump-sum
Unsecured/
upon(Note 3)
Unguaranteedmaturity

February27, 2015

Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
LimitedThe Bank of Tokyo-Mitsubishi
UFJ, Ltd.
Mitsubishi UFJ Trust andBanking Corporation

2,000

Mizuho Bank, Ltd.

The Norinchukin Bank

February
Lump-sum29, 2016
Unsecured/
upon(Note 4)
Unguaranteedmaturity

February
1.15900% 27, 2015
(Note 2)
500

Resona Bank, Limited

950

Long-term
loans
payable

200

-

-

200

Development Bank of Japan
Inc.

1,200

-

-

1,200

The Bank of Fukuoka, Ltd.

500

-

-

500

Mizuho Bank, Ltd.

400

-

-

400

1,100

-

-

1,100

1,300

-

-

1,300

The Yamaguchi Bank, Ltd.

500

-

-

500

Development Bank of Japan
Inc.

941

-

-

941

Mizuho Bank, Ltd.

1,470

-

Sumitomo Mitsui Banking
Corporation

1,470

The Norinchukin Bank

February28, 2017

February28, 2017-

1,470 1.15475%

February28, 2019

-

-

1,470

2,352

-

-

2,352

Mizuho Bank, Ltd.

176

-

-

176 0.95750%

Sumitomo Mitsui Banking
Corporation

176

-

-

176

Mizuho Bank, Ltd.

750

-

-

750

2,250

-

-

2,250

750

-

-

750

750

-

-

750

400

-

-

400

500

-

-

500

1,700

-

2,142
500

Mizuho Bank, Ltd.
Mizuho Trust & Banking Co.,Ltd.
The Bank of Tokyo-Mitsubishi
UFJ, Ltd.
Mitsubishi UFJ Trust andBanking Corporation
Resona Bank, Limited

Remarks(Note 3)

1.19475%

Sumitomo Mitsui Banking
Corporation
The Bank of Tokyo-Mitsubishi
UFJ, Ltd.

Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Banking
Corporation
The Bank of Tokyo-Mitsubishi
UFJ, Ltd.

41

Balance Increase Decrease Balance
as ofduringduringas of
Average
April 1,thethe
September Interest Repayment Repayment
Purpose2014
PeriodPeriod30, 2014
Rate
Date
Method(millions (millions (millions (millions(Note 1)of yen) of yen) of yen)of yen)August 29,- 0.34636%
2014

SubtotalLong-term
loans
payableBalance Increase Decrease Balance
as of during during
as ofAverage
April 1,thethe
September Interest Repayment Repayment
Purpose2014
Period Period 30, 2014
Rate
Date
Method(millions (millions (millions (millions (Note 1)of yen) of yen) of yen)of yen)Lump-sum(Note 5) Unsecured/
upon
Unguaranteedmaturity(Note 4)
August 31,
2017

0.89900%

February28, 2019(Note 3)-1,700 1.02225%

February28, 2020(Note 4)

-

-

2,142

-

-

500

42

Sekisui House SI Residential Investment Corporation

Category

Lender-500

The Senshu Ikeda Bank,Ltd.

The Hiroshima Bank, Ltd.

500

-

-

500

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

500

-

-

500

400

-

-

400

500

-

-

500

500

-

-

500

500

-

-

500

500

-

-

500

100

-

-

February
100 0.75600%
28, 2018

500

-

-

500

500

-

-

500

Aozora Bank, Ltd.

200

-

-

200

Shinkin Central Bank

200

-

-

200

The Yamaguchi Bank, Ltd.

500

-

-

500

Mizuho Bank, Ltd.

300

-

-

300

Resona Bank, Limited

500

-

-

500

400

-

-

400

Mizuho Bank, Ltd.

405

-

-

405

Sumitomo Mitsui Banking
Corporation

1,145

-

-

1,145

The Shizuoka Bank, Ltd.

500

-

-

500

Shinkin Central Bank

500

-

-

500

Resona Bank, Limited

200

-

-

200

700

-

-

700

500

-

-

500

The Bank of Fukuoka, Ltd.

500

-

-

500 0.97300%

200

-

-

200

Mizuho Bank, Ltd.

300

-

-

300

Sumitomo Mitsui Banking
Corporation

300

-

-

300

-

2,500

-

2,500

-

2,000

-

2,000 0.96475%

-

900

-

900

Mizuho Bank, Ltd.

-

2,450

-

2,450

Sumitomo Mitsui Banking
Corporation

-

1,950

-

1,950

68,968

9,800

9,509

69,25972,26818,50012,80977,959-1,000

Mizuho Bank, Ltd.

500

-

-

500

200

-

-

2,500

-

-

600

-

-

600

-

200

Resona Bank, Limited

500

-

-

500

Aozora Bank, Ltd.

500

-

-

500

Mizuho Bank, Ltd.
Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
LimitedMitsubishi UFJ Trust andBanking Corporation
Resona Bank, Limited

Mizuho Bank, Ltd.

2,500 1.17200%-

Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
LimitedThe Bank ofTokyo-Mitsubishi UFJ, Ltd.

Long-term loans
payable200

200

Mizuho Bank, Ltd.

0.79614%-(Note 3)

August 31,
Lump-sum2020
upon
maturity

Unsecured/
Unguaranteed(Note 4)

Sumitomo Mitsui Banking
Corporation
The Bank ofTokyo-Mitsubishi UFJ, Ltd.

Subtotal
Total

200

-

-

200

200

-

-

200 0.61060%

1,100

-

-

1,100

500

-

-

500

300

-

-

300

300

-

-

300

400

-

-

400

800

-

-

800

400

-

-

400

980

-

-

980

500

-

-

500

1,500

-

-

1,500

500

-

-

500

800

-

-

800

1.17350%

August 31,
2018

February28, 2022(Note 3)February28, 2022

February
26, 2021

February28, 2020

Lump-sumupon
maturity

February
26, 2021

Unsecured/
Unguaranteed(Note 3)

August 31,
2022(Note 4)0.83600%

August 31,
2021(Note 1) The average interest is a weighted-average figure during the fiscal period and is rounded to the fifth decimal
place. Furthermore, the average interest rate of borrowings for which the Investment Corporation conductedinterest rate swap transactions for the purpose of hedging the interest rate fluctuation risk is the rate obtained bytaking into account the effect of interest rate swaps.
(Note 2) These loans are recorded in the current liabilities on the balance sheet as current portion of long-term loans
payable as of the end of the 18th fiscal period.
(Note 3) These loans are used as funds for the acquisition of real estate trust beneficiary interests, etc.
(Note 4) These loans are used as funds for repayment of existing borrowings.
(Note 5) These loans are used as funds for redemption of the Second Series Unsecured Investment Corporation Bonds(with pari passu clause among specified investment corporation bonds and with limitations on resale among
qualified institutional investors) issued in March 2007.
(Note 6) Amounts of long-term loans payable to be repaid within five years after the date of the balance sheet are as
follows.
(Millions of yen)Due in 1 Yearor Less

1.11000%

Remarks(Note 4)--

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

0.95225%

300

1,000

Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Trust Bank,
LimitedThe Bank ofTokyo-Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust andBanking Corporation(Note 4)

February
300 0.65475%
28, 2017

Aozora Bank, Ltd.

Mizuho Bank, Ltd.

43

Lender-Mizuho Trust & Banking Co.,
Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
LimitedThe Bank ofTokyo-Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust andBanking Corporation

payableRemarks

500

The Bank ofTokyo-Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust andBanking Corporation

loans

Balance Increase Decrease Balance
as ofduringduringas of
Average
April 1,thethe
September Interest Repayment Repayment
Purpose2014
PeriodPeriod30, 2014
Rate
Date
Method(millions (millions (millions (millions (Note 1)of yen) of yen) of yen)of yen)Category

The 77 Bank, Ltd.

Mizuho Bank, Ltd.

Long-term

Balance Increase Decrease Balance
as ofduringduringas of
Average
April 1,thethe
September Interest Repayment Repayment
Purpose2014
PeriodPeriod30, 2014
Rate
Date
Method(millions (millions (millions (millions (Note 1)of yen) of yen) of yen)of yen)6,650

Due after 1 Yearthrough 2 Years

2,850

Due after 2 Years
through 3 Years

12,205Due after 3 Years
through 4 Years

4,600

Due after 4 Years
through 5 Years

8,382(Note 4)44

Sekisui House SI Residential Investment Corporation

45