23rd

Semi-Annual Report
23rd Fiscal Period

From October 1, 2016 to March 31, 2017

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

http://www.shi-reit.co.jp/eng/Sekisui House Residential Investment Corporation (the Investment Corporation) is a J-REIT
investing in residential properties, with Sekisui House, Ltd. serving as sponsor.
Topics of the 23rd Fiscal Period Ended March 2017

Sekisui House, Ltd. Becoming our Sole Sponsor
The sponsorship scheme of the Investment Corporation shifted to sole sponsorship, as Sekisui House, Ltd. acquired the AssetManagement Company’s shares (representing 25% of all shares) owned by Spring Investment Co., Ltd., which had been the
co-sponsor, as of March 29, 2017.

— Conducted Replacement of Investment Properties —Asset Management Company (trade name changed as of March 29, 2017)

Property disposed on January 31, 2017

Property acquired on March 17, 2017

Esty Maison YACHIYOMIDORIGAOKA

Esty Maison MORISHITA

Sekisui House Asset Management, Ltd.
(Previous trade name: Sekisui House SI Asset Management, Ltd.)

Located in Yachiyo-shi, Chiba

Located in Sumida-ku, Tokyo(Greater Tokyo / Other Urban Areas)(Greater Tokyo / Major Urban Areas)

Property age: 19 years

Property age: 0.3 years(as of the disposition date)(as of June 30, 2017 )The Investment Corporation (trade name changed as of June 7, 2017)

Sekisui House Residential Investment Corporation

Replacement(Previous trade name: Sekisui House SI Residential Investment Corporation)

After the shift to sole sponsorship, we remain committed to achieving continuous external growthand steady internal growth through collaboration with the Sekisui House Group,
aiming to maximize the interest of our unitholders.

Ownership

Development

Planning

Feedback of supply and demand
information on rental housing

Sekisui House Residential
Investment Corporation

Sekisui House, Ltd.

Disposition price

1,250 million yen

Acquisition price

628 million yen

Appraisal value

1,180 million yen (as of end of 22nd fiscal period (September 30, 2016))

Appraisal value

636 million yen (appraisal value upon acquisition)

Actual NOI yield

Before depreciation: 4.6%; After depreciation: 3.3%

Appraisal NOI yield

Before depreciation: 4.6%; After depreciation: 3.6%

Gain onsale:

Collaboration for planning anddeveloping rental housing

32

Part of the gain on sale was reserved internally
million yen as reserve for reduction entry in the 23rd fiscal
period100.0%(as of April 30, 2017)Concluded a real estate sale and purchase
contract before the building was completed.
Leased up the property quickly after acquiring it.

Entrustment of asset management

Significances of the Property Replacement

Collaboration
with the Sekisui
House Group

Investment ratio of Greater Tokyo / Major Urban Areas

69.3%

68.7%

Feedback of matters related
to operation, administrationand supply of properties

Operation
Administration

Occupancy
ratio:(after deducting disposition-related expenses)

0.6

Sekisui House
Asset Management, Ltd.
(Asset Management Company)

Sekiwa Real Estate Group
Collaboration as service provider ofoperation and administration as well
as a supply source of properties

9.8 years

9.7 years

NOI yield after depreciation

0.3

Down
pointsAfter replacement

Before replacement

After replacement

3.6%

3.3%

0.1

Up
points
Before replacement

Average age of residential properties

Up
points
Disposed asset

Acquired asset(Note 1) For the above “Actual NOI yield (Before depreciation)” and “Actual NOI yield (After depreciation),” the annual yield over acquisition price has been calculated based on the actual NOI for the 22nd fiscal period ended September 2016 for the former
and based on the actual NOI after deducting depreciation for the same fiscal period for the latter, both rounded to the first decimal place. For “Appraisal NOI yield (Before depreciation)” and “Appraisal NOI yield (After depreciation),” the annual yieldover acquisition price has been calculated based on the NOI yield obtained under the direct capitalization method and stated on the real estate appraisal report for the former and based on the appraisal NOI after deducting assumed depreciation
for the latter, both rounded to the first decimal place.
(Note 2) The above “Investment ratio of Greater Tokyo / Major Urban Areas” indicates the ratio calculated by dividing the total acquisition price of the residential portfolio that is classified into relevant investment areas before and after the replacement, by
the total acquisition price of the entire residential portfolio, rounded to the first decimal place. “Average age of residential properties” indicates the average building age of the entire residential portfolio before and after the replacement, with June30, 2017 set as the base date and rounded down to the first decimal place.

1

To Our Unitholders

Performance Highlights

I would like to express our sincere gratitude for your continued and loyal patronage.
I hereby report on the business results of Sekisui House Residential Investment Corporation (the “Investment
Corporation”) for the fiscal period ended March 2017 (23rd fiscal period).
Approved by the 8th General Meeting of Unitholders held in June 7, 2017, the Investment Corporation
changed its trade name from Sekisui House SI Residential Investment Corporation to Sekisui House
Residential Investment Corporation as of the same date. This was in association with Spring Investment Co.,
Ltd., the co-shareholder of the Investment Corporation’s Asset Management Company, transferring all of theAsset Management Company’s shares it owns to Sekisui House, Ltd., the parent company of the AssetManagement Company, in March 2017. In line with this, the Asset Management Company also changed its
trade name to Sekisui House Asset Management, Ltd. in March 2017. To date, the Investment Corporation
has made it a basic strategy to build a portfolio that centers on high-quality rental residential properties
planned and developed by the Sekisui House Group, and has invested in and managed real estate-related
assets that are mainly used as residences. With Sekisui House, Ltd. becoming the sole sponsor, we will
endeavor to deepen our relationship with the Sekisui House Group even further and promote continuous
external growth, steady internal growth and strengthen our stable financial base that supports external andinternal growth.

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

In the 23rd fiscal period, we acquired two residential properties, Prime Maison SHIROKANE-TAKANAWA andPrime Maison ICHIGAYAYAMABUSHICHO, from Sekisui House, Ltd. in November 2016 using funds procured
through a public offering conducted in October 2016. Catapulting on this public offering, we have beenproactively working on the new stage in Phase III of our growth strategy announced in May 2016. With an
aim to achieve “Promotion of profitability and qualitative improvement of the portfolio through property
replacements,” which is upheld as one of the measures of our external growth strategy, we disposed Esty
Maison YACHIYOMIDORIGAOKA in January 2017 and then acquired Esty Maison MORISHITA in March 2017.
Due to the above, the number of properties we own increased to 113 properties as of the end of the 23rd
fiscal period, with the asset size totaling 206.9 billion yen, and the ratio of residential properties in the entire
portfolio rose to 98.2%. In terms of the occupancy ratio of the entire portfolio for the fiscal period, theperiod-end occupancy ratio stood at 97.8% and the period-average occupancy ratio was 97.1%, indicatinghigh levels surpassing those of the previous fiscal period.
In terms of financing, the Investment Corporation procured 9,708 million yen through the abovementioned
public offering conducted for the first time in two years in October 2016. With the public offering, not only
was our stable financial base further reinforced, leading to lowering the LTV level and expansion of borrowing
capacity, but liquidity of investment units is also expected to increase due to the expanded market
capitalization. Concerning existing loans, we also promoted extension of loan periods, fixing of interest rates
and diversification of repayment dates by making early repayment of loans totaling 3.0 billion yen in
December 2016 and March 2017 while refinancing loans totaling 9.5 billion yen that matured in February
2017. In addition, we executed a commitment line contract with a maximum commitment line amount of 10
billion yen in October 2016, in order to secure flexible and stable means for procuring funds along with public
offerings.
As a result of these endeavors, the Investment Corporation posted operating revenue of 6,919 million yen,operating income of 3,060 million yen and net income of 2,501 million yen for the 23rd fiscal period, withcash distribution per unit coming to 2,234 yen.
Going forward, the Investment Corporation will continue to strive to maximize the interest of its unitholders
aiming for expansion of the asset size, while maintaining / improving the level of cash distribution.

Cash Distribution per Unit
Actual cash distribution

23rd Fiscal Period Ended March 2017 Cash distribution per unit ¥2,234
Forecast cash distribution

24th Fiscal Period Ending September 2017 Cash distribution per unit

¥2,200 (forecast)

25th Fiscal Period Ending March 2018

¥2,220 (forecast)Business Results and Cash Distributions
Settlement Date

Sept. 2015

Mar. 2016

Sept. 2016

Mar. 2017

Sept. 2017

Mar. 2018

Fiscal Period

20th FP

21st FP

22nd FP

23rd FP

24th FP (forecast)

25th FP (forecast)

Operating revenue (million yen)

6,411

6,543

6,693

6,919

6,896

6,938

Operating income (million yen)

2,743

2,741

2,739

3,060

2,974

2,989

Ordinary income (million yen)

2,211

2,214

2,193

2,502

2,434

2,456

Net income (million yen)

2,209

2,210

2,192

2,501

2,432

2,454

49

47

8

31

-

-

2,122

2,125

2,145

2,234

2,200

2,220

Provision for reserve for reduction entry (million yen)
Cash distribution per unit (yen)(Note 1) The values of respective items in the “Sept. 2017 24th FP (forecast)” and “Mar. 2018 25th FP (forecast)” columns are the figures as of May 12, 2017 (the announcement date of business results)
calculated under certain assumptions. The actual operating revenue, operating income, ordinary income, net income, provision for reserve for reduction entry and cash distribution per unit are subject tochange due to such factors as additional acquisitions or dispositions of real estate in the future, changes in the real estate and other markets, and changes in the asset management environment andother conditions surrounding the Investment Corporation. In addition, the Investment Corporation does not guarantee any actual results or cash distribution amount in providing the forecast figures.
(Note 2) “Cash distribution per unit” for the “Sept. 2015 20th FP,” “Mar. 2016 21st FP,” “Sept. 2016 22nd FP” and “Mar. 2017 23rd FP” columns are calculated based on the amount of unappropriated retained
earnings less the provision for reserve for reduction entry of 49 million yen, 47 million yen, 8 million yen and 31 million yen, respectively, divided by the number of investment units issued as of the end ofeach fiscal period.

Changes in Business Results
Operating Revenue / Net Income

We appreciate your continued support.

1 Topics of the 23rd Fiscal Period Ended March 2017

To Our Unitholders
3 Performance Highlights
4 Steady Growth Based on Use of Comprehensive
Capabilities of the Sekisui House Group
6 Portfolio Management
8 Further Reinforcement of Financial Base
10 Major Properties Owned by the Investment Corporation
12 Examples of Initiatives in CSR and Environmental Activities
22

14 Management Discussion and Analysis
27 Financial Section (Audited)
28 Financial Statements(1) Balance Sheet(2) Statement of Income and Retained Earnings(3) Statement of Changes in Net Assets(4) Statement of Cash Distributions(5) Statement of Cash Flows

34 Notes to Financial Statements
55 Independent Auditor’s Report
56 Overview of the Investment Corporation and Asset Management Company
58 Unitholders Information

7,000

6,693

6,543

6,411

Cash Distribution per Unit
Operating revenue
Net income
6,919(Million yen)

Table of Contents

Cash distribution per unit

(Yen)

2,500
2,122

6,000

2,125

2,145

2,234

2,000

5,000
1,500

4,000
3,000
2,209

2,210

2,192

2,501

1,000

2,000
500

1,000
0

20th FP

21st FP

22nd FP

23rd FP(Sept. 30, 2015)(Mar. 31, 2016)(Sept. 30, 2016)(Mar. 31, 2017)0

20th FP

21st FP

22nd FP

23rd FP(Sept. 30, 2015)(Mar. 31, 2016)(Sept. 30, 2016)(Mar. 31, 2017)3

Steady Growth Based on Use of Comprehensive Capabilities of the Sekisui House GroupManagement under a joint-sponsor structure with Sekisui House as

the main sponsor

Shift to sole sponsorship by Sekisui House

Total acquisition price(Million yen)

Property acquisition status after March 2010 when Sekisui House became the sponsor

Sekisui House Residential Investment Corporation

Properties acquired from the Sekiwa Real Estate companies
Properties acquired from third parties

Acquisition from Sekisui House
200,000

56.0 billion yen / 28 properties

Acquisition fromthe Sekisui House GroupAcquisition from the Sekiwa Real Estate companies

51.9%

Total acquisition price135.2 billion yen

14.1 billion yen / 10 properties

71 properties

Disposed properties(Based on acquisition price)

June 2014: Changed the trade name to
Sekisui House SI Residential Investment Corporation
95 properties
151,74465.1 billion yen / 33 properties
150,000

89 properties
141,472
77 properties
128,794

June 2010: Changed the trade name to100,000(42,615)(38,345)(38,345)(47,505)(24,030)(10,930)(9,180)(7,510)(12,220)(14,140)

Acquisition of
38 properties totaling
70.1 billion yen fromthe Sekisui House Group(14,140)(16,075)(3,750)Sekisui House SI Investment Corporation
53 properties
99,920(22,275)

108 properties
193,890113 properties
206,943(56,005)

99 properties
171,099

Acquisition from third parties

53 properties
99,920110 properties
191,020

107 properties
188,771

111 properties
199,163

57 properties
103,974(3,340)58 properties
106,234(3,340)60 properties
101,006(3,340)66 properties
110,214(3,270)(8,140)Oct. 1, 2012
Public offering
20,460 units

Apr. 22, 2013
Public offering
21,430 units

Apr. 21, 2014
Public offering
111,600 units

Oct. 22, 2014
Public offering
97,970 units

Oct. 26, 2016
Public offering
83,240 units

Oct. 26, 2012
Third-party allotment
1,540 units

May 23, 2013
Third-party allotment
1,105 units

May 22, 2014
Third-party allotment
5,615 units

Nov. 18, 2014
Third-party allotment
4,900 units

Nov. 14, 2016
Third-party allotment
4,160 units(1,920)(1,920)70,000

Disposition of part of
HAMAMATSU Plaza, etc.

(3,270)(16,075)

Disposition of 1 property

Disposition of 1 property
Disposition of part of Hamamatsu Plaza East

Disposition of 1 property and part of 1 property

Disposition of 1 property and part of 1 property

Disposition of 1 property

Aim to expand the asset size while maintaining /improving the cash distribution level

June 2017: Changed the trade name to
Properties acquired from Sekisui House

Disposition of 5 properties-10,000
End of 9th FP(Mar. 31, 2010)

End of 10th FP(Sept. 30, 2010)

End of 11th FP(Mar. 31, 2011)

End of 12th FP(Sept. 30, 2011)

End of 13th FP(Mar. 31, 2012)

End of 14th FP(Sept. 30, 2012)

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

End of 16th FP(Sept. 30, 2013)

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

End of 18th FP(Sept. 30, 2014)

End of 19th FP(Mar. 31, 2015)

End of 20th FP(Sept. 30, 2015)

End of 21st FP(Mar. 31, 2016)

End of 22nd FP(Sept. 30, 2016)

End of 23rd FP(Mar. 31, 2017)

LTV

48.9%

47.1%

48.3%

49.3%

51.5%

52.1%

53.4%

51.0%

53.4%

52.3%

51.1%

51.5%

52.3%

53.5%

50.3%

Cash distribution
per unit¥2,010¥1,632¥1,958¥2,009¥2,023¥2,070¥2,091¥2,107¥2,212¥2,131¥2,185¥2,122¥2,125¥2,145¥2,234(Note 1) “LTV” is calculated by dividing the total interest-bearing debt (total of borrowings, investment corporation bonds, and interest-bearing tenant leasehold and security deposits) at the end of each fiscal period by total assets at the end of each fiscal period, rounded to the first decimal place. The same follows hereafter.
(Note 2) A five-for-one split of investment units was implemented on April 1, 2014. In consideration of the impact of the split, “Cash distribution per unit” for the fiscal period ended March 2014 (the 17th FP) or earlier indicates figures obtained by dividing actual figures by 5.

Status of Property Management Service Entrustment to the Sekiwa Real Estate Group“Prime Maison” and Others Developed by Sekisui House through Property Planning Meetings with the Asset Management Company

13 out of 14 properties are located in Greater Tokyo / Major Urban Areas (Tokyo 23 wards: 12, Yokohama-shi: 1)

Property management of 81 out of 112 residential properties in total is entrusted

Under construction

Properties in the planning stage

4 properties 455 units in total

6 properties 903 units in total

4 properties
3 properties

Track record of the Sekiwa Real Estate Group(as of January 31, 2017)

The Group manages leasing ofOccupancy ratio:

Prime Maison
OTSUKA(Tentative name)Prime Maison MITATSUNAMACHI(Shinagawa-ku, Tokyo)
220 units<Completed in May 2016>(Taito-ku, Tokyo)
64 units<Completed in Oct. 2016>(Toshima-ku, Tokyo)
144 units<Completed in Jan. 2017>(Minato-ku, Tokyo)
18 units(Note) With regard to the properties above, the Investment Corporation has no specific plans to acquire any of them as of June 30, 2017.

4

1 property

in Osaka-shi

Sekiwa Real Estate Kanto
Sekiwa Real Estate Kansai (2 properties)
Osaka-shi, etc.

Prime Maison
ASAKUSABASHI

96.5% (Entire leasing of Sha Maison)

Sekiwa Real Estate Tohoku

in Tokyo
23 wards

Prime Maison
SHIROKANEDAI TOWER

584 thousand units nationwide

Esty Maison UEMACHIDAI
Esty Maison KOBE-SANNOMIYA

Sekiwa Kanri Kansai (9 properties)(wholly-owned subsidiary of Sekiwa Real Estate Kansai)
Esty Maison NISHINAKAJIMA
Prime Maison YUHIGAOKA
KOBE Women’s Student Housing, etc.

Sekiwa Real
Estate Chugoku

Tokyo, Sapporo-shi, etc.

Completed properties

Sekiwa Real Estate (55 properties)

Nagoya-shi, etc.

As of June 30, 2017

Sekiwa Real Estate Chubu (11 properties)

Fukuoka-shi

As of May 15, 2017 (the 23rd FP Business Results Briefing date)

Sekiwa Real Estate Kyushu (4 properties)

Esty Maison GINZA
Prime Maison GINZA EAST
Prime Maison EBISU
Prime Maison SHIROKANE-TAKANAWA
Prime Maison ODORI KOEN, etc.

Prime Maison HIGASHISAKURA
Prime Maison GOKISO
Esty Maison TSURUMAI
Granmast KANAZAWA NISHIIZUMI, etc.

MAST HAKATA
Prime Maison MOMOCHIHAMA
Prime Maison CENTRAL PARK, etc.

(Note) “Sha Maison” is a brand for rental housing constructed by Sekisui House and managed by the Sekiwa Real Estate Group.

5Portfolio Management(Reference) Status of the Residential Portfolio

Changes in Occupancy Ratio
In the 23rd fiscal period, the Investment Corporation conducted strategic leasing activities with a focus on the optimum balance of occupancy and rentof each property and each unit in a favorable rental market environment, and achieved the occupancy ratio of 97.1% on average and 97.8% at theend of the fiscal period, standing at a high level surpassing the previous fiscal period.
100.0

Other real estate in trust (retail property)

100.0

100.0

100.0

96.8

96.9

97.1

96.6

96.7

100

96.8
96.7
95

96.6

96.4

97.0

97.4
97.3

100.0
97.8
97.7

Period-average occupancy ratio
Residence only

97.0%

Entire portfolio

97.1%

90
End of Sept.
2016

End of Oct.
2016

End of Nov.
2016

End of Dec.
2016

22nd FPEnd of Jan.
2017

End of Feb.
2017

End of Mar.
2017

23rd FP(Note 1) The occupancy ratio in the above graph indicates the ratio of total leased area to the total leasable area in each category for the properties of the corresponding category held by the Investment Corporation as of the end ofeach month from September 2016 to March 2017, rounded to the first decimal place.
(Note 2) “Period-average occupancy ratio” indicates the average of the occupancy ratios at the end of each month during the 23rd fiscal period.

Large-Scale Repair WorkIn the 23rd fiscal period, large-scale repair works, etc. were implemented at the following properties based on the property ages and results of deterioration
diagnosis. The Investment Corporation intends to implement large-scale repair works and such in a planned manner going forward.
Property age
As of June 30, 2017

Construction cost(excluding consumption tax)

Prime Maison MOMOCHIHAMA

21.3 years¥114 million

Esty Maison MUSASHIKOGANEI

12.4 years¥73 million

Esty Maison KITASHINJUKU

12.9 years¥43 million

Property name

Of which,¥226 million
was capital
expenditures

Details of work

Construction Period

Renovation and painting of exterior walls
May 2016 to November 2016and hallway walls of common areas,waterproofing balconies, etc.
November 2016 to March 2017
Entrance repair work was done simultaneously at
Prime Maison MOMOCHIHAMA
November 2016 to March 2017

Prime Maison MOMOCHIHAMA

BeforeRepair of entrance approach

Repair of elevator hall

After

After
BeforeEnd of 22nd FP (Sep. 30, 2016)
Owned properties (totaling 110 properties)

End of 23rd FP (Mar. 31, 2017)
Owned properties (totaling 112 properties)

Entire portfolio

100.0

Diversification status by area

100.0

Diversification status by floor area Diversification status by walking distance to station Diversification status by property age

Residence(%)

End of 21st FP (Mar. 31, 2016)
Owned properties (totaling 106 properties)

Greater Tokyo / Major Urban Areas

Greater Tokyo / Other Urban Areas

28.8%

Major Cities Nationwide (Classified according to the area where each property is located (based on the acquisition price))

Greater Tokyo
3.9%

27.7%

28.8%

71.2%

Greater Tokyo

67.2%

3.8%

71.2%

Greater Tokyo

67.4%

3.0%

72.3%

69.3%

Less than 5 years
5 years to less than 10 years
10 years to less than 15 years
15 years or more
(Classified according to the property age with June 30, 2017 as the reference date (based on the acquisition price))

10.6%

10.2%

8.1%

Average property age
43.0%

10.3 years

10.4%

9.1%

Average property age
38.3%

42.4%

10.2 years

Average property age
37.0%

Within 3 minutes
More than 3 minutes to within 5 minutes
More than 5 minutes to within 10 minutes(Classified according to the walking minutes from station for each property (based on the acquisition price))

27.9%

40.8%

Within10-minute walk

32.6%
27.4%

9.7 years

35.6%

More than 10 minutes

9.1%

9.4%

14.5%

8.7%

Within10-minute walk

32.8%
26.3%

Within10-minute walk

90.6%

91.0%

91.3%

30.2%

30.7%

29.9%

35.1%

Less than 30m2
30m2 to less than 50m2
50m2 to less than 100m2
100m2 or more
(Classified according to the area of each residential unit (based on the number of leasable residential units))

0.7%

0.6%

23.9%

23.6%

Average area
per unit
25.0%

0.6%

37.9m

2

22.9%

Average area
per unit

50.5%
25.2%

37.8m

2

Average area
per unit

50.6%

37.3m

2

24.8%

51.7%

(Note 1) “Average property age” is calculated by seeking the weighted average of the building age of each property (with June 30, 2017 set as the base date) with the investment ratio calculated based on the acquisition price, rounded down to the first decimal
place.
(Note 2) “Average area per unit” is calculated based on the total leasable residential area owned properties and the total number of leasable residential units as of each point of time, rounded down to the first decimal place.
(Note 3) The ratios of the above diversification statuses are rounded to the first decimal place. Accordingly, the ratios may not add up to 100%.

67

Further Reinforcement of Financial Base
Changes in Period-Average Borrowing Cost Rates and Average Remaining Period of Borrowings

Status of Financial Soundness
As an indicator demonstrating the stability of its financial base, the Investment Corporation has been granted the following credit ratings from two Japanese rating agencies. Ratio of
liabilities with fixed interest rates, ratio of long-term interest-bearing debt and LTV (ratio of interest-bearing debt to total assets) as of the end of the 23rd fiscal period are as follows.

Japan Credit Rating Agency, Ltd. (JCR)

Status of Credit Ratings(as of June 30, 2017)[Long-term issuer rating]

93.1%

Ratio of liabilities with fixed interest rates

Ratio of long-term interest-bearing debt

End of the 23rd FP (March 31, 2017)

(%)
1.50

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

AA- (Stable)

The Investment Corporation is conducting fund procurement with an intention to reinforce its financial base while working to lengthen borrowing periods under the low-interest rate environment.
The period-average borrowing cost rate for the 23rd fiscal period stood at 0.97%, and the average remaining period of borrowings was 4.6 years as of the end of the fiscal period.
(Year)
6.0

A+ (Stable)[Issuer rating]

100.0%

1.25%

50.3%

LTV

End of the 23rd FP (March 31, 2017)

Period-average borrowing cost rate (left axis)

1.09%

From November 1, 2016 to
October 31, 2017

¥10,000 million

Maturity Ladder (as of end of the 23rd FP (March 31, 2017))

Maximum commitment line amount

10,000 9,500

2,500

8,000

6,000

6,100

4,000

4,000

2,705

Long-term loans payable

9,900

8,792

9,830

9,500
8,100

2,000 7,100(1,600)

8,382

2,500

4,400
6,792

Investment corporation bonds

3,000

5,400

2,100

5,500

4,900

4,100
6,500

3,000

2,000

3,600
2,400

1,900

0
FP ending FP ending
FP ending
FP ending
FP ending
FP ending
FP ending
FP ending
FP ending
FP ending
FP ending
FP ending
FP ending
FP ending
FP ending
FP ending
FP ending
FP ended
FP endingMar. 31, 2017 Sept. 30, 2017 Mar. 31, 2018 Sept. 30, 2018 Mar. 31, 2019 Sept. 30, 2019 Mar. 31, 2020 Sept. 30, 2020 Mar. 31, 2021 Sept. 30, 2021 Mar. 31, 2022 Sept. 30, 2022 Mar. 31, 2023 Sept. 30, 2023 Mar. 31, 2024 Sept. 30, 2024 Mar. 31, 2025 Sept. 30, 2025 Mar. 31, 2026
(40th FP)
(39th FP)
(38th FP)
(37th FP)
(30th FP)
(36th FP)
(29th FP)
(35th FP)
(28th FP)
(34th FP)
(27th FP)
(33rd FP)
(26th FP)
(32nd FP)
(25th FP)
(31st FP)
(23rd FP)
(24th FP)
(41st FP)
(Note) Amounts in the above graph and table are rounded down to the nearest million yen. The same follows hereafter.

8

FP ended
Sept. 30, 2013
(16th FP)FP endedMar. 31, 2014
(17th FP)

1.01%
0.95%

0.97%

FP ended
Sept. 30, 2014
(18th FP)FP endedMar. 31, 2015
(19th FP)FP ended
Sept. 30, 2015
(20th FP)FP endedMar. 31, 2016
(21st FP)FP ended
Sept. 30, 2016
(22nd FP)FP endedMar. 31, 2017
(23rd FP)

2.0

(Note 1) “Period-average borrowing cost rate” is calculated by using the formula below and is rounded to the second decimal place:
Period-average borrowing cost rate = Period borrowing cost (annualized) / Balance of period-average interest-bearing debt
Borrowing cost = Interest expenses + borrowing related expenses + interest expenses on investment corporation bonds (excluding expenses for early repayment and commitment line contract)(Note 2) “Average remaining period of borrowings” is the remaining period of interest-bearing debt to the repayment dates (redemption dates) at the end of each fiscal period weighted average by the balance of interest-bearing debt, and is rounded down to thefirst decimal place.

The Investment Corporation has constructed the bank formation comprising 17 financial institutions centering on the three Japanese megabanks, basedon the credibility of Sekisui House. The borrowing status of the Investment Corporation is as follows.
Outstanding Balance

Share (%)

Mizuho Bank, Ltd.

16,001

17.5

Sumitomo Mitsui Banking Corporation

15,741

17.3

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

9,750

10.7

Mizuho Trust & Banking Co., Ltd.

8,030

8.8

Sumitomo Mitsui Trust Bank, Limited

6,850

7.5

Mitsubishi UFJ Trust and Banking Corporation

6,592

7.2

Development Bank of Japan Inc.

6,241

6.8

The Norinchukin Bank

4,752

5.2

Resona Bank, Limited.

4,550

5.0

The Bank of Fukuoka, Ltd.

2,400

2.6

Aozora Bank, Ltd.

2.4

Shinkin Central Bank

2,200
1,600

The Senshu Ikeda Bank, Ltd.

1,300

1.4

The Shizuoka Bank, Ltd.

1,300

1.4

The 77 Bank, Ltd.

1.4

The Hiroshima Bank, Ltd.

1,300
1,300

The Yamaguchi Bank, Ltd.
Total debt

1,300
91,2091.4
100.0

Financial Institution

10,882

1.02%

Status of Bank Formation (as of end of the 23rd FP (March 31, 2017))

The Investment Corporation is promoting to diversify repayment dates of its borrowings with an aim to further enhance the stability of its financial base. Goingforward, it will work to flatten the repayment amount for each fiscal period within the maximum commitment line amount of 10 billion yen as a benchmark.
(Million yen)
12,0004.0

1.04%

Contract period
0.50¥10,000 million

4.3 years
4.1 years

3.2 years

On October 7, 2016, the Investment Corporation concluded a commitment line contract with three Japanese megabanks in order to secure flexible and stablemeans for procuring funds. The Investment Corporation intends to maintain the commitment line even after the end of contract period.

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

4.3 years

4.2 years

Conclusion of Commitment Line Contract (as of end of the 23rd FP (March 31, 2017))

Unused maximum
commitment line balance

4.6 years

4.5 years

End of the 23rd FP (March 31, 2017)

1.00

Maximum commitmentline amount

4.9 years

1.20%(Note) “Ratio of liabilities with fixed interest rates” includes borrowings with the interest rates that have been practically fixed by concluding interest rate swap contracts, and “Ratio of long-term interest-bearing debt” includes current portion of long-term loans
payable within one year and investment corporation bonds maturing within one year. The ratios are rounded to the first decimal place.

Counterparty

Average remaining period of borrowings (right axis)(million yen)

1.4
1.4
1.4
1.4

1.4
1.8
2.4
2.6

17.5
5.0
5.2

Share by financial
institution

6.8

17.3

1.8

1.4

7.2
10.7

7.5
8.8

Unit: %

(Note) “Share” is rounded to the first decimal place.

9

Major Properties Owned by the Investment Corporation

Major Cities Nationwide (Sapporo-shi)

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

Sapporo-shi

Prime Maison MINAMI 2-JO

3 properties

Greater Tokyo / Major Urban Areas
Greater Tokyo / Major Urban Areas
Total 71 properties

Greater Tokyo / Other Urban Areas
Total 5 properties
Prime Maison ODORI KOEN

Major Cities Nationwide
Total 36 properties

Prime Maison GINZA EAST

Prime Maison YOKOHAMA NIHON-ODORIPrime Maison EBISU

Prime Maison GOTENYAMA EAST

Prime Maison KAMOKAMOGAWA

Major Cities Nationwide (Nagoya-shi)

Prime Maison SHINAGAWA

Kyoto-shi

Prime Maison FUJIMIDAI

1 property
Kanazawa-shi
Osaka-shi

Prime Maison SHIROKANE-TAKANAWA Prime Maison ICHIGAYAYAMABUSHICHO Prime Maison HATSUDAI Prime Maison SHIBUYA Prime Maison MORISHTA Prime Maison JINBOCHO Prime Maison WASEDA Prime Maison HATCHOBORI MAST LIFE YAHIROMAST LIFE AKIHABARA

1 property

10 properties
Nagoya-shi
Kobe-shi

2 properties
Esty Maison KINSHICHO II Esty Maison GINZA

Esty Maison GOTANDA Esty Maison SASAZUKA Esty Maison SHIBAURA Esty Maison AKABANE Esty Maison AZABUJUBAN

Yokkaichi-shi

Prime Maison GOKISO

Prime Maison HIGASHISAKURA

Prime Maison TAKAMI Prime Maison YADAMINAMI

Major Cities Nationwide (Osaka-shi, Kyoto-shi and Kobe-shi)

1 property

Fukuoka-shi
Esty Maison OJIMA

9 properties

9 properties
Esty Maison KYOBASHI Esty Maison SHIJONISHINOTOIN

Esty Maison ITABASHIKUYAKUSHOMAE Esty Maison KOHOKU TSUNASHIMA

Esty Maison HIGASHISHINAGAWA

Greater Tokyo / Other Urban Areas

Major Cities Nationwide (Fukuoka-shi)

Prime Maison YUHIGAOKA

Esty Maison OISENDAIZAKA Esty Maison YOTSUYASAKAMACHI

Esty Maison KOBE-SANNOMIYA Kobe Women’s Student Housing

Major Cities Nationwide (Other areas)

Esty Maison ITABASHI C6

Esty Maison SHINAGAWA SEASIDE Esty Maison KAWASAKI Esty Maison YOKOHAMA Esty Maison MORISHITA

10

Prime Maison KITATANABE

Prime Maison MUSASHINONOMORIMAST LIFE HINO

Prime Maison CENTRAL PARKMAST HAKATA

Prime Maison MOMOCHIHAMA Prime Maison TERIHA

Esty Maison HAKATAHIGASHI

Granmast KANAZAWA NISHIIZUMI Granmast UNOMORI

11

Examples of Initiatives in CSR and Environmental Activities

MEMO

Aiming to realize its basic principle of “providing high-quality residences through the J-REIT scheme” and “creating affluent and fulfilling lifestyles,” theInvestment Corporation conducts real estate investment management with due consideration given to the “environment, society and governance,” inaccordance with the “Sustainability Vision” advocated by Sekisui House. The Investment Corporation is conscious of its societal responsibilities, and has
established sustainability policy and objectives which it complies with and implements across the breadth of its operations. Major examples of its
initiatives are presented below.

LED light fixture replacement work in common areas

Energy-saving conversion of air conditioners in exclusive areas

Intended to reduce electricity consumption andgreenhouse gas (CO2) emissions in common areas

Intended to reduce electricity consumption andgreenhouse gas (CO2) emissions in exclusive areas

As of the end of March 2017

As of the end of March 2017

Implemented at a total of

Implemented at a total of

26 properties

Electricity consumption (cumulative total):
Expected decrease of approx. 925,054kwh annuallyGreenhouse gas emissions (cumulative total):
Expected decrease of approx. 479tons annually

505 A/C units

Comparison of air conditioning units with “★★2 Stars” energy efficiency andthose with “★★★★ 4 Stars” energy efficiency

Management that considers
the environment and society

Electricity consumption (per A/C unit):
Expected annual reduction of approx. 13%
Greenhouse gas emissions (per A/C unit):
Expected approx. 112kg annual reduction

Realize a sustainable society

KOBE Women’s Student Housing
newly acquired DBJ Green Building
Certification while certification ranksof three properties were raised

Provide high-quality residences
through the J-REIT scheme

Continued participation in the2016 GRESB sustainability
surveyCertification rank

RANK
UP

Acquired superior “Green Star” rating in the 2016 GRESB sustainability
survey and was selected as “Sector Leader” (ranked first) in Asia’s(5 stars)

Prime Maison SHINAGAWA

Residential Sector, both for the second consecutive year. Also acquired“4 Stars” (five-level rating with the highest being “5 Stars”) in the GRESB rating

Certification rank

(4 stars)

Certification rank

(3 stars)

RANK
UP

that was introduced in fiscal 2016.

Prime Maison
Prime Maison
Prime Maison
GOTENYAMA EAST YOKOHAMA NIHON-ODORI GINZA EAST
RANKUP

Esty Maison OJIMANEWKOBE Women’s Student Housing

DBJ Green Building Certification

Participation in GRESB sustainability survey(Note) The above figures for expected annual reduction are estimates and do not guarantee actual reductions.

1213

Management Discussion and Analysis
1. Changes in Operating Results and Other Management Data
Fiscal Period

2. Asset Management Status for the 23rd Fiscal Period

19th Fiscal Period

20th Fiscal Period(April 1, 2015 September 30, 2015)

21st Fiscal Period(October 1, 2015 March 31, 2016)

22nd Fiscal Period(April 1, 2016 September 30, 2016)

23rd Fiscal Period(October 1, 2016 March 31, 2017)

mm yen

6,286

6,411

6,543

6,693

6,919

mm yen(6,134)(6,330)(6,332)(6,674)(6,886)mm yen

3,472

3,667

3,801

3,953

3,858

mm yen(2,835)(2,975)(3,065)(3,218)(3,259)Operating income

mm yen

2,814

2,743

2,741

2,739

3,060

properties, which had previously been identified as a supplementary investment target, from its investment horizons and to solely invest in real estate related
assets that are mainly used (Note 1) as residences. With the revision, which was aimed at shifting the Investment Corporation into a REIT specialized in

Ordinary income

mm yen

2,305

2,211

2,214

2,193

2,502

residential properties, its investment targets were limited to residential properties

Accounting Period
Operating revenue(Rent revenue - real estate)
Operating expenses(Expenses related to rent business)

Net income(a)

mm yen

2,302

2,209

2,210

2,192

2,501

Total assets(b)

mm yen194,035

195,280

198,290203,257

210,166%(+9.7)(+0.6)(+1.5)(+2.5)(+3.4)(c)

mm yen91,227

91,213

91,26391,292

101,318%(+12.6)(-0.0)(+0.1)(+0.0)(+11.0)mm yen88,92588,92588,92588,92598,633(Period-on-period variation)
Net assets(Period-on-period variation)
Unitholders’ capital
Investment units issued

(d)

units

1,018,110

1,018,110

1,018,110

1,018,110

1,105,510

Net assets per unit(c)/(d)yen

89,60589,59089,63989,66891,648

Total cash distributions(e)

mm yen

2,224

2,160

2,163

2,183

2,469

Cash distribution per unit(e)/(d)

yen

2,185

2,122

2,125

2,145

2,234

yen

(2,185)(2,122)(2,125)(2,145)(2,234)(Earnings distribution per unit)(Distribution in excess of earnings per unit)

yen

(-)

(-)

(-)

(-)

(-)

Ordinary income to total assets(Note 2)%

1.2 (2.5)

1.1 (2.3)

1.1 (2.2)

1.1 (2.2)

1.2 (2.4)

Return on unitholders’ equity(Note 2)%2.7 (5.4)

2.4 (4.8)

2.4 (4.8)

2.4 (4.8)

2.6 (5.2)

Unitholders’ equity ratio(c)/(b)

%

47.0

46.7

46.0

44.9

48.2

(+1.2)(-0.3)(-0.7)(-1.1)(+3.3)(Period-on-period variation)
Distribution payout ratio(Note 3)

%

96.6

97.7

97.8

99.6

98.7

(Note 4)

properties[Other reference information]
Number of investment properties
Total leasable area

107

110

108

111

113

2

399,249.82

400,210.45

368,622.60

376,936.98

380,893.44

%

97.4

96.7

97.2

96.8

97.8

mm yen

1,369

1,431

1,468

1,582

1,606

m

Period-end occupancy ratio(Note 4)

Depreciation
Capital expenditures
Leasing NOI (net operating income)(Note 2)mm yen

153

97

293

302

397

mm yen

4,669

4,786

4,735

5,038

5,234

(Note 1) Consumption tax is not included in operating revenue, etc.
(Note 2) The indicators are calculated by using the following methods. In addition, annualized figures in accordance with the number of management days are provided in the parenthesis in parallel.
Ordinary income to total assets

Ordinary income / Average total assets
Average total assets = (Period-beginning total assets + Period-end total assets) / 2

Return on unitholders’ equity

Net income / Average net assets
Average net assets = (Period-beginning net assets + Period-end net assets) / 2

Leasing NOI

Leasing income for the fiscal period(Rent revenue-real estate – Expenses related to rent business) + Depreciation(Note 3) Distribution payout ratio is calculated by using the following method, and is rounded down to the nearest specified unit.
Cash distribution per unit (excluding distribution in excess of earnings per unit) / Net income per unit
For the 19th and 23rd fiscal periods, however, the following method is employed as the Investment Corporation issued new investment units in the periods.
Total cash distributions / Net income(Note 4) Number of investment properties indicates the number of properties that are considered to be single units respectively in light of common sense. In addition, the period-end occupancy ratio indicates the ratio of the total leased area to the total leasablearea as of the account closing date.

14(1) Brief History of the Investment Corporation(October 1, 2014 March 31, 2015)

Unit

The Investment Corporation listed on the Real Estate Investment Trust Securities Market (the J-REIT market) of Tokyo Stock Exchange, Inc. on July 28, 2005.
Subsequently, since 2010, it has worked to establish a stable portfolio primarily comprising residential properties as an investment corporation sponsored by
Sekisui House, Ltd. (“Sekisui House”), a leading company in the housing industry.
At the 6th General Meeting of Unitholders held on June 11, 2014, the Investment Corporation’s Articles of Incorporation was partially revised to remove retail

The Investment Corporation’s basic strategy is to build a portfolio that is centered on the high-quality rental residential properties planned and developed by
the Sekisui House Group (Note 2) with Sekisui House as the core company. Under this strategy, it works to expand the asset size with a focus on maximizing
the interests of its investors as well as to reinforce its financial base. By doing so, the Investment Corporation aims to become a leading company among
REITs investing in residential properties.
(Note 1) “Mainly used” means that a majority of the total exclusive area of the relevant real estate-related asset is allocated for a specific use.
(Note 2) The “Sekisui House Group” refers to the group encompassing Sekisui House and its 225 subsidiaries and 26 affiliated companies (as of the end of January 2017). The same follows hereafter.

(2) Operating Environment and Asset Management Results1) Operating Environment
During the 23rd fiscal period, the Japanese economy remained on course for a modest recovery, with capital investment showing a mild upward trend amid
improvements in corporate earnings and consumer spending remaining solid backed by steady improvements in the employment and income environment,
among other factors.
As for the land price trend, the national average stopped falling for the first time in 9 years and leveled-off for residential land, while rising for two
consecutive years for commercial land, according to the Land Price Survey as of January 1, 2017. As such, the combined average for residential andcommercial land, etc. has increased for two straight years. Presumably, this is a result of housing demand being bolstered by the continued low interest rateenvironment and by housing mortgage tax reduction and other measures, and also reflects such factors as growing demand for stores and hotels due to anincrease in the number of foreign tourists and other causes. By area, the average in the three major metropolitan areas (the Greater Tokyo, Osaka Area andNagoya Area) indicates an increase almost as slight as the previous year in the residential land, while the commercial land price showed a generally stronger
upward trend. In regional areas, both the residential land and commercial land prices in Sapporo-shi, Sendai-shi, Hiroshima-shi and Fukuoka-shi showed anincrease at a higher pace than in the three major metropolitan areas, and regional areas other than these cities also demonstrated a lower rate of pricedecrease.
As for the rental housing market, construction starts of housing for rent showed an upward trend due to such factors as an increase in construction ofwooden and light gauge steel-framed rental apartments as countermeasures against the inheritance tax. However, construction starts of rental
condominiums (mainly with reinforced concrete structures) increased only at a restrained pace, and both the occupancy ratio and rent levels of rental
condominiums owned by J-REITs have remained stable. In the Greater Tokyo / Major Urban Areas, the Investment Corporation’s focused investment area, thesupply and demand environment is expected to remain favorable in the face of population inflow from other areas continuing and supply of rental
condominiums remaining stable.
Under such circumstances, the Investment Corporation acquired three properties and disposed a property in the 23rd fiscal period, as well as achieving ahigh occupancy ratio and better profitability.
In November 2016, the Investment Corporation acquired two Prime Maison series properties planned and developed by Sekisui House, with acquisition pricetotaling 8,500 million yen (excluding, however, miscellaneous acquisition related expenses, fixed asset taxes, city planning taxes, consumption taxes andlocal consumption taxes; the same follows hereafter), by using funds procured through a public offering it conducted in October 2016. In January 2017, theInvestment Corporation disposed Esty Maison YACHIYOMIDORIGAOKA (disposition price: 1,250 million yen, gain on sale: 32 million yen) located in the Greater
Tokyo / Other Urban Areas, out of concerns about increased repair costs of the property in the future due to its aging and in consideration of the fact thatgain on sale can be obtained by disposing it, among other factors. Moreover, as an asset to replace the property, the Investment Corporation acquired Esty
Maison MORISHITA (acquisition price: 628 million yen (Note)), a newly-built property located in the Greater Tokyo / Major Urban Areas that it positions as thefocused investment area, in March 2017, in an effort to reinforce its portfolio.

15

In terms of occupancy ratio, the Investment Corporation thoroughly implemented leasing management, as it focused on concluding lease contracts for vacant(3) Summary of Fund Procurement

residential units as early as possible against the backdrop of favorable leasing market conditions. This brought the occupancy ratio of its residential portfolio
to the highest level (period average occupancy ratio: 97.0%, period-end occupancy ratio: 97.7%) since its listing. The figure for the entire portfolio was also

During the 23rd fiscal period, the Investment Corporation borrowed 5,500 million yen (loan period: nine years), 2,400 million yen (loan period: eight years)

at an extremely high level (period average occupancy ratio: 97.1%, period-end occupancy ratio: 97.8%). In addition, the Investment Corporation proactively
raised rents while paying due considerations to the occupancy ratio, achieving higher profitability.
(Note) The acquisition price of Esty Maison MORISHITA represents the transaction amount indicated in the trust beneficiary interest transfer agreement (excluding, however, miscellaneous acquisition related expenses, fixed asset taxes, city planning taxes,
consumption taxes and local consumption taxes), plus the amount of expenses for the additional facility construction conducted before the acquisition by the request of the Investment Corporation. The same follows hereafter.

borrowing periods and diversify repayment dates. On the other hand, the Investment Corporation made early repayment of short-term loans payable (3,000
million yen in total) in December 2016 and March 2017, respectively.
As a result of the above, the Investment Corporation had the total of interest-bearing debts standing at 105,709 million yen (91,209 million yen in long-term

2) Asset Management Resultsloans payable (including 4,805 million yen in current portion of long-term loans payable) and 14,500 million yen in investment corporation bonds (including

A. Changes in the asset size
The Investment Corporation started the 23rd fiscal period with management of 111 properties (110 residential properties and one retail property) it owned asof September 30, 2016, with a total acquisition price of 199,163 million yen (195,342 million yen for residential properties and 3,820 million yen for the retailproperty). Subsequently, as stated above, the Investment Corporation acquired two residential properties (total acquisition price: 8,500 million yen) in
November 2016 and, while disposing a residential property (acquisition price: 1,348 million yen) in January 2017 and acquired a residential property(acquisition price: 628 million yen) in March 2017. As a result, the properties owned by the Investment Corporation as of the end of the fiscal period underreview totaled 113 properties (112 residential properties and one retail property), with the total acquisition price amounting to 206,943 million yen (203,122
million yen for residential properties and 3,820 million yen for the retail property).
The table below indicates the properties acquired or disposed during the 23rd fiscal period.
<Newly acquired properties>
Property No.

Property Name

Residence-118

Prime Maison SHIROKANE-TAKANAWA

4,000 million yen in the current portion of investment corporation bonds) as of the end of the 23rd fiscal period (March 31, 2017). The “Loan-to-Value Ratio”(LTV), 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, was 50.3% as of the end of the 23rd fiscal period.
In October 2016, the Investment Corporation concluded a commitment line contract with Mizuho Bank, Ltd., The Bank of Tokyo-Mitsubishi UFJ, Ltd. and
Sumitomo Mitsui Banking Corporation (maximum commitment line amount: 10,000 million yen) in order to secure flexible and stable means for procuring
funds. The following table indicates the commitment line status as of the end of the 23rd fiscal period.
Maximum commitment line amount

10,000 million yen

Unused maximum commitment line balance 10,000 million yen
Start date of commitment line

November 1, 2016

Ending date of commitment line

October 31, 2017

Collateral

Unsecured and unguaranteed

Acquisition Price(million yen)

Acquisition Date

Counterparty

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

Mita, Minato-ku, Tokyo

4,500

November 1, 2016

Use of Funds

Funds for property acquisitions, refinancing (including redemption of investment corporation bonds) and renovation / repair work of real estate theInvestment Corporation owns

4,000

November 1, 2016

628

March 17, 2017

Location

Residence-119

Prime Maison ICHIGAYAYAMABUSHICHO

Ichigaya Yamabushicho, Shinjuku-ku, Tokyo

Residence-120

Esty Maison MORISHITA

Kikukawa, Sumida-ku, Tokyo<Disposed property>
Property No.

Property Name

Location

Disposition Price(million yen)

Disposition Date

Residence-18

Esty Maison YACHIYOMIDORIGAOKA

Midorigaoka, Yachiyo-shi, Chiba

1,250

January 31, 2017

In addition, the Investment Corporation has been granted the following credit ratings as of June 30, 2017.
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)

B. Initiatives on CSR and Realizing a Sustainable Society(4) Summary of Business Results and Distributions

The Investment Corporation established its environmental basic policy, sustainability policy and objectives in the 19th fiscal period ended March 2015, basedon the Sustainability Vision upheld by Sekisui House, which was the first in the housing industry to be recognized as an Eco-First Company by the Minister ofthe Environment. Based on these policies, etc., the Investment Corporation has cooperated with Sekisui House to promote its initiatives for CSR andenvironmental activities that meet the needs of the times, through such measures as enhancing energy conservation of its owned properties and acquiring
environmentally friendly properties. A Sustainability Committee has been set up to see how the policies are followed and assess the effectiveness of
implemented measures on a regular basis. In addition, in order to understand where our environmental awareness initiatives are positioned, endeavors weremade to obtain environmental recognition and certifications by external assessment organizations, and a system has been established to enable theInvestment Corporation to continuously take initiatives on CSR and for realizing a sustainable society.

As a result of these management efforts, the Investment Corporation posted operating revenue of 6,919 million yen, operating income of 3,060 million yen
after deducting such operating expenses as outsourcing expenses, utilities expenses and asset management fees, ordinary income of 2,502 million yen andnet income of 2,501 million yen in the 23rd fiscal period.

In the 23rd fiscal period, the Investment Corporation promoted such measures as the introduction of LED lighting to its properties, which it had conductedfrom time to time, the adoption of energy-efficient air-conditioning units and the installation of disaster relief vending machines, as its initiatives on CSR andenvironmental activities. As for obtainment of environmental certifications by external agencies, period monitoring was conducted with regard to the DBJ
Green Building Certification (Note). The effort led to the upgrading of certification ranks for three properties (Prime Maison SHINAGAWA, Prime Maison GINZA
EAST and Esty Maison OJIMA; from 4 stars to 5 stars, from 3 stars to 4 stars and from 2 stars to 3 stars, respectively) out of the five properties that havebeen certified. Moreover, another property (KOBE Women’s Student Housing) was newly granted the Certification (for 3 stars).
The Investment Corporation is resolved to promote its basic principle of “providing high-quality residences through the J-REIT scheme” and “creating
affluent and fulfilling lifestyles” by continuously implementing its initiatives based on the above-mentioned policies.
(Note) The “DBJ Green Building Certification” is designed to mark buildings by using a scoring model originally developed by Development Bank of Japan Inc. and select blue-chip real estate that meets the demands of the times. Its purpose is to promote real
properties that demonstrate environmental performance as well as security measures and disaster prevention measures and take into account the social requirements from various stakeholders surrounding the properties (“Green Building”).

16

and 1,600 million yen (loan period: three years and six months) in order to fund the refinancing of loans totaling 9,500 million yen (comprising loans of 6,500
million yen and 3,000 million yen with a loan period of five years and four years, respectively) that matured in February 2017, in an effort to lengthen

Furthermore, the Investment Corporation decided to internally reserve part of the gain on sale of Esty Maison YACHIYOMIDORIGAOKA disposed in January
2017 as reserve for reduction entry by applying to the Special Measures in Case Land or Other Property is Acquired in Advance in 2009 or 2010 under Article66-2 of the Act on Special Measures Concerning Taxation (Act No. 26 of 1957; as amended) (the “Special Taxation Measures Act”). Pursuant to this policy,
the Investment Corporation decided to distribute the entire amount of the unappropriated retained earnings after deducting 31 million yen as the provision
for reserve for reduction entry, which is within the scope of application to Article 66-2 of the Special Taxation Measures Act, 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 Special Taxation Measures Act).
As a result, the cash distribution per unit came to 2,234 yen for the 23rd fiscal period.

3. Future Management Policies and Vital Issues(1) Investment Environment
Looking ahead, the Japanese economy is expected to see domestic demand follow an upward trend due to improvements in the employment and income
environment, backed by the continuation of “Quantitative and Qualitative Monetary Easing with Yield Curve Control” by the Bank of Japan and various
economic measures by the government. However, attention must continue to be paid to the risk of the Japanese economy being pushed downward by the
economic trends in the U.S. and the impact of monetary policy operations on the international financial market, among other factors.

17

In the domestic real estate market, real estate transaction amount has shown a declining trend, falling from the previous year for two consecutive years of2015 and 2016. Nevertheless, backed by the favorable fund procurement environment thanks to the monetary easing policy, demand for real estate
investment, which should bring stable rental income, is expected to remain strong. Under such circumstances, the Investment Corporation will conductacquisitions and management of assets by carefully discerning the economic and interest rate trends, the supply and demand balance trends and theorientations of domestic and foreign investors.

<Summary of the Investment Corporation’s Major Brands>
Brand Name

Prime Maison

Esty Maison

MAST Series

Brand of Sekisui House

Proprietary Brand of theInvestment Corporation

Brand of the Sekiwa Real
Estate GroupAs a rule, high-quality urban rental apartments theInvestment Corporation acquired from outside the
Sekisui House GroupAs a rule, high-quality rental residential properties
planned and developed by the Sekiwa Real Estatecompanies (7 companies), which belong to the
Sekisui House Group, or those in which they own
in recognition of the value

Logo type(2) Management Policy and Vital Issues
1) External Growth Strategy
With an aim to realize maximum value for its unitholders, the Investment Corporation endeavors to build a portfolio with a focus on acquiring investment
properties from the Sekisui House Group, for which Sekisui House, the sponsor, serves as the core company. The Investment Corporation will also endeavor
to acquire properties from outside sources by continuously collecting property information in a proprietary route. In selecting the real estate-related assets it

Explanation on brandinvests in, the Investment Corporation will make comprehensive considerations of such macroeconomic factors as economic conditions and the real estatemarket trends, such geographical factors as the environment surrounding the areas where the real estate properties are located, urban planning status andits future outlook, and such individual factors as the size and shape of the land and buildings of the real estate properties as well as accessibility to roads.
For the real estate-related assets that are believed to have superiority over a long term as a result of these considerations, the Investment Corporation will
forecast cash flows they will generate and, based on the forecast, will investigate and make judgments as to their values using the income approach.
As for HAMAMATSU Plaza, the sole existing retail property (Note) it owns as of June 30, 2017, the Investment Corporation will make efforts to achieve its
stable management and, in cooperation with Sekisui House, work to enhance the appeal and asset value of the entire facilities while investigating selling theproperty at an appropriate time.

High-quality urban rental apartments planned anddeveloped by Sekisui House by utilizing its
know-how or in which it invests in recognition of
the value(3) Financial Strategy, etc.
For the “Loan-to-Value Ratio” (LTV), 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 of the 50% level as thetarget ceiling for the time being. For future borrowings, the Investment Corporation will make it a basic policy to procure funds focused on long-term, fixedinterest rate debts with diversified repayment dates, while continuing its endeavors to reduce fund procurement costs by fully considering the optimum
balance of fixed and floating interest rate loans.

(Note) “Existing retail property” refers to a real estate-related asset that the Investment Corporation owns continuously and that is mainly for use as a retail facility.

2) Internal Growth Strategy
The Investment Corporation will continuously implement various measures to enhance the profitability and asset value of its investment properties from a
medium to long-term perspective.

4. Significant Events Occurring after Settling the 23rd Fiscal Period
Not applicable

For the properties owned by the Investment Corporation, it will implement refurbishments and renovations at appropriate times to prevent aging andobsolescence of their exclusive and common areas, which hamper leasing. It will also promote a variety of repair works that are intended to maximize cost
performance, including thoroughly conducting quality control of the investment properties. Through these measures, the Investment Corporation aims tostrengthen its internal growth.
Moreover, the Investment Corporation will work to reduce operational costs by promoting replacement of light fixtures in common areas to LED lamps andfully investigating the details and amounts of repair work. In addition, for the costs related to management operations of owned properties, it will also takecost reduction measures such as investigating and maximizing their cost performance.
For properties it acquires from the Sekisui House Group, the Investment Corporation will, in principle, consign property management services to the Sekiwa
Real Estate Group (Note 1) in charge of the relevant areas in which the said properties are located, in order to improve the occupancy ratio and enhance theoperational and administrative efficiency through the synergy effect with the Sekisui House Group. Moreover, the Investment Corporation has graduallyunified the property management companies involved in the existing residential properties to the Sekiwa Real Estate group. This is understood to haveenabled the Investment Corporation to realize tenant attraction and efficient 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 approximately 584 thousand units throughout Japan (as of January
31, 2017), and its nationwide networks. Going forward, the Investment Corporation will keep this policy in an aim to maintain and improve its medium- andlong-term performance. 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. As for HAMAMATSU Plaza, the retailproperty, the Investment Corporation will endeavor to achieve stable management by improving parking lots, etc. and reviewing facility operations, among
other measures, in preparation for store opening by succeeding tenants of the former Ito Yokado Building, in an effort to enhance the appeal and synergy ofthe entire facility and thus increase the number of visitors (Note 2).

18(Note 1) The “Sekiwa Real Estate Group” represents a group of companies comprising, as the core, the Sekiwa Real Estate companies (7 companies) and their subsidiaries and affiliates. Furthermore, the “Sekiwa Real Estate companies (7 companies)” refers to
the seven companies of Sekiwa Real Estate, Ltd., Sekiwa Real Estate Kanto, Ltd., Sekiwa Real Estate Tohoku, Ltd., Sekiwa Real Estate Chubu, Ltd., Sekiwa Real Estate Kansai, Ltd., Sekiwa Real Estate Chugoku, Ltd. and Sekiwa Real Estate Kyushu, Ltd.,
which are wholly-owned subsidiaries of Sekisui House, and the core companies of the real estate division of the Sekisui House Group that are expanding nationwide presence in Japan. The same follows hereafter.
(Note 2) Hamamatsu Plaza is currently a commercial complex that comprises a total of six buildings, four in the Hamamatsu Plaza East area (the Akachan Honpo Building, the Xebio Building, the Hamapla & Frespo Building and a management building) and twoin the Hamamatsu Plaza West area (the Hamamatsu West Building and the Hamamatsu Plaza Sports Building (Zexis)). Note that the former Ito-Yokado Building, which was located in the Hamamatsu Plaza East area, has been completely demolished after
the closing of the store operated by Ito-Yokado Co., Ltd. Costco Wholesale Japan, Ltd. is currently proceeding with plans to open a store on the site of the former Ito-Yokado Building. (This plan is referred to as the “Costco Wholesale Japan Opening Plan”
hereafter. The buildings located in the Hamamatsu Plaza East area are collectively referred to as “Hamamatsu Plaza East” hereafter.) The Investment Corporation acquired trust beneficiary interests in real estate other than the Hamapla & Frespo Building
and the Hamamatsu Plaza Sports Building (Zexis) on July 28, 2005, and began operations, but disposed portions to Sekisui House, Ltd. on March 30, 2012, and September 30, 2013, and thus currently holds only 49% quasi-co-ownership of trust
beneficiary interests in real estate in the part of Hamamatsu Plaza East, which excludes the site of the Costco Wholesale Japan Opening Plan.

19

5. Changes in Rental Business Results
Property Name

(1) 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 March 31, 2017.
Property Name
Residence-1
Residence-3
Residence-4
Residence-5
Residence-6
Residence-8
Residence-10
Residence-11
Residence-12
Residence-14
Residence-15
Residence-16
Residence-17
Residence-19
Residence-20
Residence-21
Residence-22
Residence-23
Residence-24
Residence-25
Residence-26
Residence-27
Residence-28
Residence-29
Residence-30
Residence-31
Residence-33
Residence-34
Residence-35
Residence-36
Residence-37
Residence-39
Residence-40
Residence-41
Residence-42
Residence-43
Residence-44
Residence-45
Residence-46
Residence-47
Residence-48
Residence-50
Residence-51
Residence-52
Residence-53
Residence-54
Residence-55
Residence-56
Residence-57
Residence-58
Residence-59
Residence-60
Residence-61
Residence-62
Residence-63
Residence-64

20

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 MACHIDA
Esty Maison KAWASAKI
Esty Maison SHINKAWASAKI
Esty Maison YOKOHAMA
Esty Maison KAMEIDO
Esty Maison MEGURO
Esty Maison SUGAMO
Esty Maison KYOBASHI
Esty Maison MEGUROHONCHO
Esty Maison HAKURAKU
Esty Maison MINAMIHORIE
Esty Maison GOTANDA
Esty Maison OISENDAIZAKA
Esty Maison SHINAGAWA SEASIDE
Esty Maison MINAMIAZABU
Esty Maison JOTO
Esty Maison TSUKAMOTO
Esty Maison KAWASAKI II
Esty Maison AZABUJUBAN
Esty Maison ITABASHIHONCHO
Esty Maison OIZUMIGAKUEN
Esty Maison TENJINHIGASHI I
Esty Maison TENJINHIGASHI II
Esty Maison SHIJONISHINOTOIN
Esty Maison HIGASHISHINAGAWA
Esty Maison HACHIOJIMINAMINO
Esty Maison NISHINAKAJIMA
Esty Maison ITABASHIKUYAKUSHOMAE
Esty Maison MUSASHIKOYAMA
Esty Maison SENDAGI
Esty Maison YOTSUYASAKAMACHI
Esty Maison HAKATAHIGASHI
Esty Maison KAMIGOFUKU
Esty Maison SANGENJAYA
Prime Maison MUSASHINONOMORI
Prime Maison HIGASHISAKURA
Prime Maison KAYABAKOEN
Esty Maison SANGENJAYA II
Esty Maison ITABASHI C6MAST HAKATA
Esty Maison KINSHICHO
Esty Maison MUSASHIKOGANEIPrime Maison GOKISO
Prime Maison YUHIGAOKA
Prime Maison KITATANABE
Prime Maison MOMOCHIHAMA
Esty Maison AKIHABARA
Esty Maison SASAZUKA
Prime Maison GINZA EAST

Location (residence indication)

Form of Ownership

Total Leasable
Floor Area (m2)

Estimated Valueat End of Period(Note 1)(million yen)Book Value(million yen)

3-11-19 Ginza, Chuo-ku, Tokyo
5-13-12 Roppongi, Minato-ku, Tokyo
4-13-1 Higashi, Shibuya-ku, Tokyo
1-13-4 Hiroo, Shibuya-ku, Tokyo
2-3-4 Kandata-cho, Chiyoda-ku, Tokyo
1-28-17 Kita-Shinjuku, Shinjuku-ku, Tokyo
1-10-9 Komagata, Taito-ku, Tokyo
2-1-17 Hara-machida, Machida-shi, Tokyo
14-24 Ogawa-cho, Kawasaki-ku, Kawasaki-shi, Kanagawa
1-4 Furuichiba, Saiwai-ku, Kawasaki-shi, Kanagawa
3-33-1 Tsuruya-cho, Kanagawa-ku, Yokohama-shi, Kanagawa
6-57-11 Kameido, Koto-ku, Tokyo
2-10-12 Mita, Meguro-ku, Tokyo
4-14-15 Sugamo, Toshima-ku, Tokyo
2-7-10 Higashinoda-cho, Miyakojima-ku, Osaka-shi, Osaka
4-8-21 Megurohoncho, Meguro-ku, Tokyo
1-18-19 Rokkakubashi, Kanagawa-ku, Yokohama-shi, Kanagawa
2-12-10 Minamihorie, Nishi-ku, Osaka-shi, Osaka
7-7-2 Nishi-Gotanda, Shinagawa-ku, Tokyo
5-9-10 Higashi-Oi, Shinagawa-ku, Tokyo
3-25-20 Higashi-Shinagawa, Shinagawa-ku, Tokyo, etc.
1-10-8 Minamiazabu, Minato-ku, Tokyo
2-11-8 Noe, Joto-ku, Osaka-shi, Osaka
2-13-5 Tsukamoto, Yodogawa-ku, Osaka-shi, Osaka
12-4 Ogawa-cho, Kawasaki-ku, Kawasaki-shi, Kanagawa
1-11-1 Azabujuban, Minato-ku, Tokyo
14-14 Yamato-cho, Itabashi-ku, Tokyo
2-12-15 Higashi-Oizumi, Nerima-ku, Tokyo
4-3 Susaki-machi, Hakata-ku, Fukuoka-shi, Fukuoka
6-12 Susaki-machi, Hakata-ku, Fukuoka-shi, Fukuoka
697 Myodenji-cho, Shijo-sagaru, Nishinotoin-dori, Shimogyo-ku, Kyoto-shi, Kyoto
1-10-1 Higashi-Shinagawa, Shinagawa-ku, Tokyo
3-2-8 Nishikatakura, Hachioji-shi, Tokyo
2-8-21 Higashinakajima, Higashiyodogawa-ku, Osaka-shi, Osaka
2-46-11 Itabashi, Itabashi-ku, Tokyo
3-1-7 Ebara, Shinagawa-ku, Tokyo
3-49-1 Sendagi, Bunkyo-ku, Tokyo
6-20 Yotsuyasakamachi, Shinjuku-ku, Tokyo
7-2-80 Yoshizuka, Hakata-ku, Fukuoka-shi, Fukuoka
13-3 Kamigofukumachi, Hakata-ku, Fukuoka-shi, Fukuoka
2-16-9 Sangenjaya, Setagaya-ku, Tokyo
5-15-3 Josuihoncho, Kodaira-shi, Tokyo
2-10-14 Higashisakura, Higashi-ku, Nagoya-shi, Aichi
2-7-13 Kayaba, Chikusa-ku, Nagoya-shi, Aichi
3-11-6 Shimouma, Setagaya-ku, Tokyo
32-16 Oyama-higashi-cho, Itabashi-ku, Tokyo
4-22-25 Hakata Ekimae, Hakata-ku, Fukuoka-shi, Fukuoka
1-1-8 Kinshi, Sumida-ku, Tokyo
2-6-5 Honcho, Koganei-shi, Tokyo
2-17-2 Ayuchitori, Showa-ku, Nagoya-shi, Aichi
5-4-13 Ueshio, Tennoji-ku, Osaka-shi, Osaka
4-9-17 Kitatanabe, Higashisumiyoshi-ku, Osaka-shi, Osaka
3-9-1 Momochihama, Sawara-ku Fukuoka-shi, Fukuoka
3-4-2 Ueno, Taito-ku, Tokyo
1-61-17 Sasazuka, Shibuya-ku, Tokyo
1-2-1 Tsukiji, Chuo-ku, Tokyo

Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests

5,515.43
2,019.10
2,062.10
781.02
1,706.54
1,881.19
2,978.28
3,090.89
3,741.01
3,737.47
2,823.73
2,279.21
1,070.13
2,619.17
4,613.04
1,656.02
1,285.83
1,804.48
3,871.15
2,979.85
2,602.30
1,082.12
2,065.92
2,321.04
2,824.86
1,755.31
1,274.49
1,362.36
1,058.82
1,943.72
2,261.28
2,936.72
2,155.16
3,643.42
3,915.81
1,176.78
897.302,453.17
9,106.08
2,261.91
856.083,924.58
3,118.11
2,163.98
894.64
4,036.66
9,614.80
1,611.54
2,275.24
4,427.65
2,040.35
1,798.97
7,514.76
2,324.65
3,701.70
6,177.20

6,240
1,730
1,970
835
1,540
1,520
2,100
1,530
2,360
1,200
2,090
1,550
1,040
1,550
2,910
1,120
917
1,010
3,030
2,660
1,980
1,190
949
1,060
1,850
2,580
907
764
359
728
1,150
2,350
875
1,900
2,480
1,020
682
2,050
2,390
819
805
1,820
1,470
765
777
2,590
2,480
1,280
1,710
1,910
920
604
2,030
1,980
3,280
6,150

4,714
1,604
1,875
638
1,266
1,212
1,699
1,146
1,815
925
1,884
1,406
788
1,447
2,275
1,112
709
940
2,737
2,216
1,966
1,191
972
1,112
1,715
2,597
909
789
376
708
1,275
2,430
879
1,902
2,469
940
707
2,176
2,007
802
832
1,481
1,033
595
665
2,097
1,775
1,024
1,520
1,524
753
500
1,898
1,489
2,769
4,964

Residence-65
Residence-66
Residence-67
Residence-68
Residence-69
Residence-70
Residence-71
Residence-72
Residence-73
Residence-74
Residence-75
Residence-76
Residence-77
Residence-78
Residence-79
Residence-80
Residence-81
Residence-82
Residence-83
Residence-84
Residence-85
Residence-86
Residence-87
Residence-88
Residence-89
Residence-90
Residence-91
Residence-92
Residence-93
Residence-94
Residence-95
Residence-96
Residence-97
Residence-98
Residence-99
Residence-100
Residence-101
Residence-102
Residence-103
Residence-104
Residence-105
Residence-106
Residence-107
Residence-108
Residence-109
Residence-110
Residence-111
Residence-112
Residence-113
Residence-114
Residence-115
Residence-116
Residence-117
Residence-118
Residence-119
Residence-120
Retail-1

Prime Maison TAKAMI
Prime Maison YADAMINAMI
Prime Maison TERIHA
Esty Maison HIGASHISHIRAKABE
Esty Maison SENGOKU
Esty Maison DAIZAWA
Esty Maison TOGOSHI
Esty Maison KAWARAMACHI
Esty Maison NISHITENMA
Esty Maison SHIROKANEDAI
Esty Maison HIGASHISHINJUKU
Esty Maison MOTOAZABU
Esty Maison TORITSUDAIGAKU
Esty Maison MUSASHIKOYAMA II
Esty Maison NAKANO
Esty Maison SHINNAKANO
Esty Maison NAKANOFUJIMICHO
Esty Maison TETSUGAKUDO
Esty Maison KOENJI
Esty Maison OSHIAGE
Esty Maison AKABANE
Esty Maison OJI
Prime Maison WASEDA
Prime Maison HATCHOBORI
Prime Maison JINBOCHO
Prime Maison GOTENYAMA EAST
MAST LIFE AKIHABARA
Esty Maison AOI
Esty Maison YAKUIN
Esty Maison KINSHICHO II
Esty Maison OJIMA
Prime Maison FUJIMIDAI
Esty Maison TSURUMAI
Prime Maison MORISHITA
Prime Maison SHINAGAWA
Prime Maison ODORI KOEN
Prime Maison MINAMI 2-JO
Prime Maison KAMOKAMOGAWA
Prime Maison CENTRAL PARKMAST LIFE YAHIRO
Prime Maison EBISU
Esty Maison SHIBAURA
Granmast KANAZAWA NISHIIZUMIGranmast UNOMORI
Esty Maison TSUTSUJIGAOKA
Esty Maison KOHOKU TSUNASHIMA
MAST LIFE HINO
Prime Maison YOKOHAMA NIHON-ODORIKOBE Women’s Student Housing
Prime Maison SHIBUYA
Prime Maison HATSUDAI
Esty Maison UEMACHIDAI
Esty Maison KOBE-SANNOMIYA
Prime Maison SHIROKANE-TAKANAWA
Prime Maison ICHIGAYAYAMABUSHICHO
Esty Maison MORISHITA

Location (residence indication)

2-6-7 Takami, Chikusa-ku, Nagoya-shi, Aichi
3-11-7 Yadaminami, Higashi-ku, Nagoya-shi, Aichi
1-3-7 Kashiiteriha, Higashi-ku, Fukuoka-shi, Fukuoka
3-9-36 Yoshino, Higashi-ku, Nagoya-shi, Aichi
4-6-17 Sengoku, Bunkyo-ku, Tokyo
2-39-13 Daizawa, Setagaya-ku, Tokyo
1-25-5 Togoshi, Shinagawa-ku, Tokyo
3-2-10 Kawaramachi, Chuo-ku, Osaka-shi, Osaka
5-15-3 Nishitenma, Kita-ku, Osaka-shi, Osaka
1-1-4 Kamiosaki, Shinagawa-ku, Tokyo
6-22-5 Shinjuku, Shinjuku-ku, Tokyo
3-6-6 Motoazabu, Minato-ku, Tokyo
2-7-17 Tairamachi, Meguro-ku, Tokyo
3-11-4 Koyama, Shinagawa-ku, Tokyo
5-48-2 Chuo, Nakano-ku, Tokyo
6-10-7 Honcho, Nakano-ku, Tokyo
5-13-1 Yayoicho, Nakano-ku, Tokyo
2-12-15 Matsugaoka, Nakano-ku, Tokyo
5-25-26 Koenjiminami, Suginami-ku, Tokyo
5-11-5 Narihira, Sumida-ku, Tokyo
2-39-5 Akabane, Kita-ku, Tokyo
2-25-8 Oji, Kita-ku, Tokyo
544-11 Waseda Tsurumaki-cho, Shinjuku-ku, Tokyo
4-11-9 Hatchobori, Chuo-ku, Tokyo
1-50-9 Kandajinbo-cho, Chiyoda-ku, Tokyo
6-6-33 Kitashinagawa, Shinagawa-ku, Tokyo
50-6 Kanda Sakumagashi, Chiyoda-ku, Tokyo
1-14-20 Aoi, Higashi-ku, Nagoya-shi, Aichi
1-13-8 Hirao, Chuo-ku, Fukuoka-shi, Fukuoka
3-5-19 Kotobashi, Sumida-ku, Tokyo
5-32-5 Ojima, Koto-ku, Tokyo
1-25 Fujimidai, Chikusa-ku, Nagoya-shi, Aichi
2-20-1 Chiyoda, Naka-ku, Nagoya-shi, Aichi
3-6-4 Morishita, Koto-ku, Tokyo
1-3-16 Kita-Shinagawa, Shinagawa-ku, Tokyo
6-5-2 Odori-Nishi, Chuo-ku, Sapporo-shi, Hokkaido
9-1-1 Minami 2jo Nishi, Chuo-ku, Sapporo-shi, Hokkaido
1-6-1 Minami 7jo Nishi, Chuo-ku, Sapporo-shi, Hokkaido
4-2-5 Kashiiteriha, Higashi-ku, Fukuoka-shi, Fukuoka
5-30-10 Yahiro, Sumida-ku, Tokyo
1-22-19 Ebisu, Shibuya-ku, Tokyo
2-8-3 Shibaura, Minato-ku, Tokyo
2-155-1 Nishiizumi, Kanazawa-shi, Ishikawa
1-6-7 Unomori, Yokkaichi-shi, Mie
1-14-19 Nishitsutsujigaoka, Chofu-shi, Tokyo, etc.
8-45-25 Shin-yoshida Higashi, Kohoku-ku, Yokohama-shi, Kanagawa, etc.
1-19-3 Shinmachi, Hino-shi, Tokyo
1-4 Honcho, Naka-ku, Yokohama-shi, Kanagawa, etc.
7-1-6 Koyocho Naka, Higashinada-ku, Kobe-shi, Hyogo
3-10-4 Shibuya, Shibuya-ku, Tokyo
1-45-2 Hatsudai, Shibuya-ku, Tokyo
1-1-16 Uehonmachi-nishi, Chuo-ku, Osaka-shi, Osaka
3-2-27 Onoe-dori, Chuo-ku, Kobe-shi, Hyogo
4-7-26 Mita, Minato-ku, Tokyo
2-5 Ichigaya Yamabushicho, Shinjuku-ku, Tokyo
1-13-11 Kikukawa, Sumida-ku, Tokyo
Residence subtotal
HAMAMATSU Plaza (Note 2)1020-1 Kaminishi-cho, Higashi-ku, Hamamatsu-shi, Shizuoka, etc.
Other real estate in trust (Retail property) subtotal
Total

Form of Ownership
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests
Trust beneficiary interests

Total Leasable
Floor Area (m2)

Estimated Valueat End of Period(Note 1)(million yen)Book Value(million yen)

2,016.79
2,168.59
6,728.20
4,014.07
1,498.13
2,352.90
1,943.17
3,486.48
2,877.90
2,675.11
1,889.50
1,199.86
1,035.78
1,073.59
2,023.72
1,107.57
1,299.60
1,531.89
1,527.52
3,180.90
4,302.84
2,289.44
1,650.66
1,382.32
1,819.90
2,512.91
803.36
4,809.68
5,213.51
9,469.65
9,905.97
5,704.63
13,812.40
2,180.78
2,107.88
7,360.37
6,019.09
4,102.08
10,268.74
3,409.16
3,010.66
3,795.82
4,634.50
2,280.00
1,849.70
6,867.48
2,827.55
5,461.13
15,341.68
1,972.59
2,879.20
2,225.52
2,007.00
3,923.76
4,099.04
748.92366,776.31
14,117.13
14,117.13
380,893.44

1,030
813
1,310
1,560
1,330
2,220
1,690
1,890
1,660
2,330
1,600
1,490
833
1,020
1,840
993
948
1,140
1,110
2,400
3,220
1,630
1,560
1,430
1,920
2,790
543
2,450
2,330
8,100
8,520
2,020
4,420
1,900
1,940
3,090
1,910
1,220
2,298
1,880
4,250
2,910
1,100
817
913
2,750
1,370
4,690
5,780
2,310
2,860
1,020
976
4,690
4,200
643
223,2132,802
2,802226,015

856
673
1,041
1,260
1,079
1,879
1,361
1,562
1,373
1,951
1,337
1,169
730
836
1,524
839
858
938
956
1,921
2,666
1,349
1,243
1,123
1,597
2,098
474
2,090
2,034
6,667
7,069
1,752
3,806
1,740
1,701
2,694
1,492
988
2,283
1,697
3,634
2,873
1,038
765
911
2,847
1,334
4,421
6,087
2,238
2,776
983
1,005
4,610
4,102
658
196,296
3,714
3,714
200,010(Note 1) The “Estimated Value at End of Period” indicates either the appraisal value or survey value by real estate appraisers with March 31, 2017 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 “leasable floor area” of the facility by 49%, which is the quasi-co-ownership interest of the Investment Corporation.

21

6. Changes in Rental Business Results

22nd Fiscal Period (Apr. 1, 2016 – Sept. 30, 2016)

The following table provides changes in rental business results for each property in which the Investment Corporation has invested.
Occupancy
Ratio at End of
Period(Note 2) (%)

Rent Revenue
throughout
Period(million yen)

Ratio to Total
Rent
Revenues(%)

Number of
Tenants at End
of Period(Note 1)

Occupancy
Ratio at End of
Period(Note 2) (%)

Rent Revenue
throughout
Period(million yen)

Ratio to Total
Rent
Revenues(%)

Residence-1 Esty Maison GINZA

1

97.7

174

2.6

1

98.0

176

2.6

Residence-3 Esty Maison AZABUNAGASAKA

1

88.4

47

0.7

1

91.5

47

0.7

Residence-4 Esty Maison EBISU II

1

91.8

55

0.8

1

97.5

55

0.8

Residence-5 Esty Maison EBISU

1

96.1

23

0.3

1

85.0

21

0.3

Residence-6 Esty Maison KANDA

1

96.0

44

0.7

1

95.6

44

0.6

Residence-8 Esty Maison KITASHINJUKU

1

94.0

46

0.7

1

92.9

47

0.7

Residence-10 Esty Maison ASAKUSA KOMAGATA

1

100.0

66

1.0

1

100.0

66

1.0

Residence-11 Esty Maison MACHIDA

1

90.8

51

0.8

1

98.4

51

0.7

Residence-12 Esty Maison KAWASAKI

1

94.5

75

1.1

1

96.6

74

1.1

Residence-14 Esty Maison SHINKAWASAKI

1

100.0

32

0.5

1

100.0

32

0.5

Residence-15 Esty Maison YOKOHAMA

1

100.0

65

1.0

1

100.0

65

1.0

Residence-16 Esty Maison KAMEIDO

1

98.9

52

0.8

1

98.9

54

0.8

Residence-17 Esty Maison MEGURO

1

92.5

29

0.4

1

100.0

31

0.5

Residence-18 Esty Maison YACHIYOMIDORIGAOKA

1

98.4

44

0.7

-

-

29

0.4

Residence-19 Esty Maison SUGAMO

1

100.0

48

0.7

1

97.3

49

0.7

Residence-20 Esty Maison KYOBASHI

1

96.7

92

1.4

1

99.4

91

1.3

Residence-21 Esty Maison MEGUROHONCHO

1

93.0

31

0.5

1

93.4

32

0.5

Residence-22 Esty Maison HAKURAKU

1

96.5

31

0.5

1

92.7

30

0.4

Residence-23 Esty Maison MINAMIHORIE

1

92.1

33

0.5

1

97.0

33

0.5

Residence-24 Esty Maison GOTANDA

1

98.6

93

1.4

1

96.6

95

1.4

Residence-25 Esty Maison OISENDAIZAKA

1

100.0

81

1.2

1

97.9

78

1.1

Residence-26 Esty Maison SHINAGAWA SEASIDE

1

97.3

66

1.0

1

98.3

65

0.9

Residence-27 Esty Maison MINAMIAZABU

1

100.0

36

0.5

1

100.0

36

0.5

Residence-28 Esty Maison JOTO

1

95.5

32

0.5

1

100.0

32

0.5

Residence-29 Esty Maison TSUKAMOTO

1

90.6

38

0.6

1

100.0

38

0.6

Residence-30 Esty Maison KAWASAKI II

1

96.1

59

0.9

1

100.0

61

0.9

Residence-31 Esty Maison AZABUJUBAN

1

91.4

65

1.0

1

98.8

68

1.0

Residence-33 Esty Maison ITABASHIHONCHO

1

98.4

29

0.4

1

98.4

29

0.4

Residence-34 Esty Maison OIZUMIGAKUEN

1

96.6

26

0.4

1

96.2

25

0.4

Residence-35 Esty Maison TENJINHIGASHI I

1

97.8

15

0.2

1

94.4

15

0.2

Residence-36 Esty Maison TENJINHIGASHI II

1

97.6

28

0.4

1

98.8

27

0.4

Residence-37 Esty Maison SHIJONISHINOTOIN

1

92.9

37

0.6

1

100.0

41

0.6

Residence-39 Esty Maison HIGASHISHINAGAWA

1

94.8

66

1.0

1

93.6

71

1.0

Residence-40 Esty Maison HACHIOJIMINAMINO

1

94.2

32

0.5

1

96.5

32

0.5

Residence-41 Esty Maison NISHINAKAJIMA

1

96.4

64

1.0

1

96.9

64

0.9

Residence-42 Esty Maison ITABASHIKUYAKUSHOMAE

1

93.5

76

1.1

1

99.2

77

1.1

Residence-43 Esty Maison MUSASHIKOYAMA

1

95.6

30

0.5

1

98.2

30

0.4

Residence-44 Esty Maison SENDAGI

1

100.0

21

0.3

1

93.1

22

0.3

Residence-45 Esty Maison YOTSUYASAKAMACHI

1

97.0

57

0.9

1

100.0

61

0.9

Residence-46 Esty Maison HAKATAHIGASHI

1

97.1

85

1.3

1

97.6

85

1.2

Residence-47 Esty Maison KAMIGOFUKU

1

100.0

28

0.4

1

98.5

29

0.4

Residence-48 Esty Maison SANGENJAYA

1

100.0

24

0.4

1

94.4

24

0.4

Residence-50 Prime Maison MUSASHINONOMORI

1

96.5

63

0.9

1

97.9

60

0.9

Residence-51 Prime Maison HIGASHISAKURA

1

88.0

51

0.8

1

98.6

51

0.8

Residence-52 Prime Maison KAYABAKOEN

1

96.5

28

0.4

1

100.0

30

0.4

Residence-53 Esty Maison SANGENJAYA II

1

100.0

23

0.3

1

100.0

24

0.4

Residence-54 Esty Maison ITABASHI C6

1

93.8

79

1.2

1

97.9

79

1.2

Residence-55 MAST HAKATA

1

100.0

93

1.4

1

100.0

92

1.3

Residence-56 Esty Maison KINSHICHO

1

100.0

35

0.5

1

100.0

35

0.5

Residence-57 Esty Maison MUSASHIKOGANEI

1

97.1

50

0.8

1

95.1

53

0.8

Residence-58 Prime Maison GOKISO

1

98.4

63

1.0

1

98.4

64

0.9

Residence-59 Prime Maison YUHIGAOKA

1

88.7

29

0.4

1

100.0

30

0.4

Residence-60 Prime Maison KITATANABE

1

88.5

22

0.3

1

100.0

21

0.3

Residence-61 Prime Maison MOMOCHIHAMA

1

100.0

69

1.0

1

100.0

69

1.0

Residence-62 Esty Maison AKIHABARA

1

96.2

55

0.8

1

96.2

56

0.8

Residence-63 Esty Maison SASAZUKA

1

97.6

89

1.3

1

96.6

92

1.3

Residence-64 Prime Maison GINZA EAST

1

94.8

166

2.5

1

97.2

167

2.4

Residence

Use Property No.

22

Property Name

Property Name

23rd Fiscal Period (Oct. 1, 2016 – Mar. 31, 2017)

Number of
Tenants at End
of Period(Note 1)

Residence

22nd Fiscal Period (Apr. 1, 2016 – Sept. 30, 2016)

Use Property No.

Number of
Tenants at End
of Period(Note 1)23rd Fiscal Period (Oct. 1, 2016 – Mar. 31, 2017)

Occupancy
Ratio at End of
Period(Note 2) (%)

Rent Revenue
throughout
Period(million yen)

Ratio to Total
Rent
Revenues(%)

Number of
Tenants at End
of Period(Note 1)

Occupancy
Ratio at End of
Period(Note 2) (%)

Rent Revenue
throughout
Period(million yen)

Ratio to Total
Rent
Revenues(%)

Residence-65 Prime Maison TAKAMI

1

96.1

33

0.5

1

89.9

33

0.5

Residence-66 Prime Maison YADAMINAMI

1

100.0

29

0.4

1

96.6

28

0.4

Residence-67 Prime Maison TERIHA

1

100.0

51

0.8

1

100.0

51

0.8

Residence-68 Esty Maison HIGASHISHIRAKABE

1

100.0

48

0.7

1

100.0

48

0.7

Residence-69 Esty Maison SENGOKU

1

97.0

36

0.5

1

91.7

37

0.6

Residence-70 Esty Maison DAIZAWA

1

97.6

56

0.8

1

97.6

59

0.9

Residence-71 Esty Maison TOGOSHI

1

97.9

48

0.7

1

99.0

48

0.7

Residence-72 Esty Maison KAWARAMACHI

1

96.3

59

0.9

1

94.7

59

0.9

Residence-73 Esty Maison NISHITENMA

1

96.3

50

0.8

1

94.8

51

0.7

Residence-74 Esty Maison SHIROKANEDAI

1

94.1

64

1.0

1

94.1

62

0.9

Residence-75 Esty Maison HIGASHISHINJUKU

1

87.9

43

0.7

1

98.2

47

0.7

Residence-76 Esty Maison MOTOAZABU

1

84.2

38

0.6

1

100.0

32

0.5

Residence-77 Esty Maison TORITSUDAIGAKU

1

94.3

23

0.4

1

95.3

24

0.4

Residence-78 Esty Maison MUSASHIKOYAMA II

1

97.3

28

0.4

1

100.0

28

0.4

Residence-79 Esty Maison NAKANO

1

95.3

50

0.8

1

97.9

50

0.7

Residence-80 Esty Maison SHINNAKANO

1

100.0

28

0.4

1

95.9

27

0.4

Residence-81 Esty Maison NAKANOFUJIMICHO

1

95.5

26

0.4

1

93.4

28

0.4

Residence-82 Esty Maison TETSUGAKUDO

1

85.7

31

0.5

1

97.6

33

0.5

Residence-83 Esty Maison KOENJI

1

95.8

32

0.5

1

95.1

32

0.5

Residence-84 Esty Maison OSHIAGE

1

99.1

70

1.0

1

98.8

70

1.0

Residence-85 Esty Maison AKABANE

1

86.2

79

1.2

1

97.0

85

1.2

Residence-86 Esty Maison OJI

1

97.7

46

0.7

1

98.9

48

0.7

Residence-87 Prime Maison WASEDA

1

91.9

41

0.6

1

93.0

43

0.6

Residence-88 Prime Maison HATCHOBORI

1

95.0

37

0.6

1

90.0

37

0.5

Residence-89 Prime Maison JINBOCHO

1

100.0

50

0.8

1

93.6

54

0.8

Residence-90 Prime Maison GOTENYAMA EAST

1

95.5

72

1.1

1

95.7

79

1.2

Residence-91 MAST LIFE AKIHABARA

1

100.0

15

0.2

1

100.0

15

0.2

Residence-92 Esty Maison AOI

1

95.4

74

1.1

1

96.3

75

1.1

Residence-93 Esty Maison YAKUIN

1

95.8

71

1.1

1

96.4

74

1.1

Residence-94 Esty Maison KINSHICHO II

1

98.2

218

3.3

1

95.8

219

3.2

Residence-95 Esty Maison OJIMA

1

95.5

236

3.5

1

98.9

235

3.4

Residence-96 Prime Maison FUJIMIDAI

1

91.1

71

1.1

1

91.0

70

1.0

Residence-97 Esty Maison TSURUMAI

1

100.0

155

2.3

1

100.0

155

2.3

Residence-98 Prime Maison MORISHITA

1

97.7

56

0.8

1

100.0

55

0.8

Residence-99 Prime Maison SHINAGAWA

1

98.8

57

0.9

1

100.0

55

0.8

Residence-100 Prime Maison ODORI KOEN

1

95.0

116

1.7

1

92.3

116

1.7

Residence-101 Prime Maison MINAMI 2-JO

1

100.0

68

1.0

1

99.1

68

1.0

Residence-102 Prime Maison KAMOKAMOGAWA

1

99.2

46

0.7

1

98.0

47

0.7

Residence-103 Prime Maison CENTRAL PARK

1

94.4

85

1.3

1

100.0

87

1.3

Residence-104 MAST LIFE YAHIRO

1

100.0

56

0.8

1

100.0

56

0.8

Residence-105 Prime Maison EBISU

1

95.4

111

1.7

1

100.0

112

1.6

Residence-106 Esty Maison SHIBAURA

1

92.8

75

1.1

1

95.8

79

1.2

Residence-107 Granmast KANAZAWA NISHIIZUMI

1

100.0

41

0.6

1

100.0

41

0.6

Residence-108 Granmast UNOMORI

1

100.0

26

0.4

1

100.0

26

0.4

Residence-109 Esty Maison TSUTSUJIGAOKA

1

100.0

29

0.4

1

92.2

29

0.4

Residence-110 Esty Maison KOHOKU TSUNASHIMA

1

100.0

83

1.2

1

100.0

80

1.2

Residence-111 MAST LIFE HINO

1

100.0

47

0.7

1

98.1

47

0.7

Residence-112 Prime Maison YOKOHAMA NIHON-ODORI

1

96.0

136

2.0

1

98.1

143

2.1

Residence-113 KOBE Women’s Student Housing

1

100.0

222

3.3

1

100.0

222

3.2

Residence-114 Prime Maison SHIBUYA

1

96.6

61

0.9

1

96.6

63

0.9

Residence-115 Prime Maison HATSUDAI

1

100.0

76

1.1

1

94.7

80

1.2

Residence-116 Esty Maison UEMACHIDAI

1

94.0

31

0.5

1

97.5

31

0.5

Residence-117 Esty Maison KOBE-SANNOMIYA

1

93.2

30

0.5

1

98.3

29

0.4

Residence-118 Prime Maison SHIROKANE-TAKANAWA

-

-

-

-

1

98.1

103

1.5

Residence-119 Prime Maison ICHIGAYAYAMABUSHICHO

-

-

-

-

1

93.9

85

1.2

Residence-120 Esty Maison MORISHITA

-

-

-

-

1

95.1

3

0.1

110

96.7

6,556

98.2

112

97.7

6,799

98.7

Residence subtotal

23

22nd Fiscal Period (Apr. 1, 2016 – Sept. 30, 2016)

Other Real Estate in Trust (Retail property)

Use Property No.

Retail-1

Property Name

HAMAMATSU Plaza

8. Transactions with Interested Parties, Etc.

23rd Fiscal Period (Oct. 1, 2016 – Mar. 31, 2017)

Number of
Tenants at End
of Period(Note 1)

Occupancy
Ratio at End of
Period(Note 2) (%)

Rent Revenue
throughout
Period(million yen)

Ratio to Total
Rent
Revenues(%)

Number of
Tenants at End
of Period(Note 1)

Occupancy
Ratio at End of
Period(Note 2) (%)

Rent Revenue
throughout
Period(million yen)

Ratio to Total
Rent
Revenues
(%)

4

100.0

87

1.3

4

100.0

87

1.3

(1) Transaction Status
Transaction Amount, Etc.

Category

Purchase Amount, Etc.

Total Amount

9,128,575 thousand yen

1,250,000 thousand yen

8,500,000 thousand yen (93.1%)- thousand yen (-%)

8,500,000 thousand yen (93.1%)- thousand yen (-%)

Breakdown of Transactions with Interested Parties, Etc.
Retail-4

b-town MINAMIAOYAMA

-

-

31

0.5

-

-

-

-

Sekisui House, Ltd.
Total

Other real estate in trust (Retail property) subtotal
Total

4

100.0

118

1.8

4

100.0

87

1.3

114

96.8

6,674

100.0

116

97.8

6,886

100.0

(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 fiscal 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, the indicated occupancy ratio is based on the occupancy
status of the sublessees (the ratio of the leased floor area to the leasable floor area at the end of the relevant calculation period).

(2) Amount of Fees, Etc.
Category

Total Fees, Etc. (A)(thousand yen)

7. Capital Expenditures in the 23rd Fiscal Period
The following are the overview of works that fall under the category of the capital expenditures that the Investment Corporation conducted in real estate intrust in the 23rd fiscal period. In addition, the capital expenditure for the fiscal period under review totaled 397 million yen. Combining this with the 201
million yen in repair expenses, which were classified as expenses for the fiscal period, the Investment Corporation conducted construction of 599 million yen.
Real Estate Properties, etc. Name
(Location)
Prime Maison MOMOCHIHAMA(Fukuoka-shi, Fukuoka)

Purpose

PeriodProperty Management Fees

496,754

Expenditures(million yen)

Large-scale renovation

From: May 2016
To: November 2016

Esty Maison MUSASHIKOGANEI(Koganei-shi, Tokyo)

Large-scale renovation

From: November 2016
To: March 201777

HAMAMATSU Plaza(Hamamatsu-shi, Shizuoka)

Renovation of south exit and north-side parking lot

From: December 2015
To: March 2017

60

Esty Maison KITASHINJUKU(Shinjuku-ku, Tokyo)

Large-scale renovation

From: November 2016
To: March 201747

Esty Maison GOTANDA(Shinagawa-ku, Tokyo)

LED light fixture replacement work in common areas

From: January 2017
To: January 2017

1

Others120

Brokerage Fees

158,800

Breakdown of Transactions with Interested Parties, Etc.
Paid Party

Paid Amount (B)(thousand yen)

Ratio to Total Amount(B / A) (%)

Sekiwa Real Estate Ltd.

257,685

51.9

Sekiwa Real Estate Chubu, Ltd.

52,932

10.7

Sekiwa Real Estate Kansai, Ltd.

5,213

1.0

Sekiwa Real Estate Kyushu, Ltd.

16,992

3.4

Sekiwa Kanri Kansai Co., Ltd.

48,952

9.9

Sekiwa Real Estate Ltd.

100,442

63.3

Sekiwa Real Estate Chubu, Ltd.

8,588

5.4

Sekiwa Real Estate Kansai, Ltd.

1,376

0.9

Sekiwa Real Estate Kyushu, Ltd.

1,941

1.2

Sekiwa Kanri Kansai Co., Ltd.

5,995

3.8

(Note) “Interested Parties, Etc.” refers to the interested parties of the Asset Management Company and is designated in Article 123 of the Enforcement Order of the Act on Investment Trusts and Investment Corporations and Article 26-1-27 of the regulation on
management reports in investment trusts and investment corporations of the Investment Trusts Association, Japan.

90
Total

24

Sale Amount, Etc.

397

25

MEMO

MEMO

Financial Section (Audited)

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

26

28
30
31
32
33
34
55

27

Financial Statements(Thousand yen)
22nd Fiscal Period(As of September 30, 2016)(1) Balance Sheet

23rd Fiscal Period(As of March 31, 2017)

Liabilities(Thousand yen)
22nd Fiscal Period(As of September 30, 2016)

23rd Fiscal Period(As of March 31, 2017)

AssetsCurrent liabilities
Operating accounts payable

412,267

314,916

Short-term loans payable
Current portion of investment corporation bonds

3,000,000-

4,000,000

12,205,000
601,937

4,805,000
569,457

Cash and deposits

4,001,779

3,793,152

Current portion of long-term loans payable
Accounts payable – otherCash and deposits in trust
Operating accounts receivable

5,007,948
112,962

5,096,818
146,649

Accrued expenses
Income taxes payable

55,9401,295

54,222
1,261

Consumption taxes receivable
Prepaid expenses

1,264
169,216150,392

Accrued consumption taxes
Advances received

236,797

11,147
230,640

Deferred tax assets
Other

34
249
ሺ3,818)32
87
ሺ2,628)Other

Current assets

Allowance for doubtful accounts
Total current assets
Non-current assets
Property, plant and equipment
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust

9,289,637

103,979,697
ሺ15,100,421)

9,184,504

106,007,452(16,309,706)

88,879,276

89,697,745

900,614
ሺ218,092)

983,036
ሺ243,251)

682,522

1,972,641
ሺ572,081)
1,400,560

263,641
ሺ86,492)
177,148739,785

2,022,031
ሺ618,529)
1,403,501

298,133
ሺ100,337)
197,795

101,708,485

107,827,854

52,047-

192,900,040

199,866,683

Leasehold rights in trust
Other

145,982
246

143,964
110

Total intangible assets

146,229

144,075

Investments and other assets
Lease and guarantee deposits

242,672

242,672

Long-term prepaid expenses
Other

450,323
144,827

473,891
152,239

Construction in progress in trust
Total property, plant and equipment
Intangible assets

Total investments and other assets

837,823

868,802

193,884,092

200,879,561

Investment corporation bond issuance costs
Investment unit issuance costs

59,74023,691

52,234
49,813

Total deferred assets

83,431102,048203,257,161

210,166,114

Total non-current assets

12,77910,332

16,526,017

9,996,979

Investment corporation bonds
Long-term loans payable

14,500,000
79,004,500

10,500,000
86,404,500

Tenant leasehold and security deposits in trust

1,934,556

1,946,227

Total current liabilities
Non-current liabilities

Total non-current liabilities

95,439,056

98,850,727

111,965,074

108,847,707

88,925,149

98,633,978

Reserve for reduction entry

174,521183,091

Total voluntary retained earnings

174,521183,091

Unappropriated retained earnings

2,192,416

2,501,336

Total surplus

2,366,937

2,684,427

91,292,087

101,318,406

91,292,087

101,318,406

203,257,161

210,166,114

Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Surplus
Voluntary retained earnings

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

See accompanying “Notes to Financial Statements.”

Deferred assets

Total assets

28

29

(2) Statement of Income and Retained Earnings(3) Statement of Changes in Net Assets(Thousand yen)
23rd Fiscal Period(October 1, 2016 –March 31, 2017)

22nd Fiscal Period(April 1, 2016 –September 30, 2016)

22nd fiscal period (from April 1, 2016 to September 30, 2016)

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

6,674,711
18,4316,886,897
32,176

Total operating revenue

6,693,142

6,919,074

Unitholders’capitalOperating expenses
Expenses related to rent business

3,218,278

3,259,096

Asset management fee
Asset custody fee

484,273
15,847

360,581
16,135Administrative service fees
Directors’ compensations

35,9683,600

36,151
3,600

Provision of allowance for doubtful accounts
Other operating expenses

449
195,040

1,583
181,193

Total operating expenses

3,953,458

3,858,342

2,739,684

3,060,731

Interest income

57

46

Reversal of distributions payable
Other

263
206

616
18

Total non-operating income

527

680

Operating income
Non-operating income

Balance as ofApril 1, 2016
Changes of items during
the fiscal period
Provision for reserve
for reduction entry
Distribution fromsurplus88,925,149

Voluntary retained
earnings

Unappropriatedretained
Reserve
Total
earnings
forvoluntary
reduction retainedentry
earnings

395,333

394,811

Interest expenses on investment corporation
bonds

56,491

56,060

Amortization of investment corporation bondissuance costs

7,546

7,505

Borrowing related expenses
Amortization of investment unit issuance costs

72,304
14,50379,09921,211

108

117

546,288558,806

Ordinary income

2,193,924

2,502,606

Income before income taxes

Other
Total non-operating expenses

2,193,924

2,502,606

Income taxes - current
Income taxes - deferred

1,303
203

1,268
2

Total income taxes

1,507

1,270

2,192,416

2,501,336

Net income
Retained earnings brought forward--

Unappropriated retained earnings

2,192,416

2,501,336

See accompanying “Notes to Financial Statements.”

Total Net
Assets127,423

2,210,581

2,338,004

91,263,154

91,263,154

47,09747,097

ሺ47,097)---

ሺ2,163,483)

ሺ2,163,483)
2,192,416

ሺ2,163,483)
2,192,416

ሺ2,163,483)

ሺ18,164)

28,93228,93228,932

2,366,937

91,292,087

91,292,087

Net Income
Total changes of items
during the fiscal period
Balance as of
September 30, 2016

Total
surplusTotal
unitholders’equity127,423

2,192,416-

47,09747,09788,925,149

174,521

174,521

2,192,416

2,192,416

23rd fiscal period (from October 1, 2016 to March 31, 2017)(Thousand yen)

Non-operating expenses
Interest expenses(Thousand yen)

Unitholders’ equity

Unitholders’ equity
Surplus
Unitholders’capitalBalance as of
October 1, 2016
Changes of items during
the fiscal period
Issuance of new
investment units
Provision for reserve
for reduction entry
Distribution fromsurplus88,925,149

Voluntary retained
earnings

Unappropriatedretained
Reserve
Total
earnings
forvoluntary
reduction retainedentry
earnings
174,521

174,521

Total Net
Assets2,366,937

91,292,087

91,292,087

9,708,829

9,708,829

9,708,829
8,570

8,570

Net Income
Total changes of items
during the fiscal period
Balance as ofMarch 31, 2017

2,192,416

Total
surplusTotal
unitholders’equityሺ8,570)

---ሺ2,183,845)(2,183,845)(2,183,845)(2,183,845)

2,501,336

2,501,336

2,501,336

2,501,336

317,490

10,026,319

10,026,319

9,708,829

8,570

8,570

308,919

98,633,978

183,091

183,091

2,501,336

2,684,427 101,318,406 101,318,406

See accompanying “Notes to Financial Statements.”

30

31

(4) Statement of Cash Distributions
Item(5) Statement of Cash Flows

22nd Fiscal Period(April 1, 2016 – September 30, 2016)

23rd Fiscal Period(October 1, 2016 – March 31, 2017)

I. Unappropriated retained earnings

2,192,416,724 yen

2,501,336,041 yen

II. Cash distributions

2,183,845,950 yen

2,469,709,340 yen(2,145 yen)

(2,234 yen)

8,570,774 yen

31,626,701 yen

0 yen

0 yen

Method for calculating cash

As provided in Article 34-1-2 of its

As provided in Article 34-1-2 of its

distributions

Articlesof
Incorporation,
theInvestment Corporation makes it a

Articlesof
Incorporation,
theInvestment Corporation makes it abasic policy to make cash distributions
in excess of the amount equivalent tobasic 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

90% of the distributable income
amount as stipulated in Article 67-15 of

the Act on Special Measures
Concerning Taxation. Following thisthe Act on Special Measures
Concerning Taxation. Following thispolicy, and in consideration of the factthat individual unitholders must

policy, and in consideration of the factthat individual unitholders must

calculate the capital gains or losses forcash distributions in excess of earnings

calculate the capital gains or losses forcash distributions in excess of earnings

when the Investment Corporation
distributes cash in excess of earnings

when the Investment Corporation
distributes cash in excess of earnings

as stipulated in Article 34-1-4 of its
Articlesof
Incorporation,theas stipulated in Article 34-1-4 of its
Articlesof
Incorporation,
theInvestment Corporation distributed
2,183,845,950 yen, which is the entire

Investment Corporation distributed
2,469,709,340 yen, which is the entire

amount of the unappropriated retained
earnings after deducting the provision

amount of the unappropriated retained
earnings after deducting the provision

for reserve for reduction entry, as
stipulated in Article 66-2 of the Act onfor reserve for reduction entry, as
stipulated in Article 66-2 of the Act on

SpecialTaxation.

SpecialTaxation.

(Cash distributions per unit)
III. Voluntary retained earnings
Provision for reserve for reduction
entry
IV. Retained earnings carried forward

Measures

Concerning

Measures

Concerning(Thousand yen)
22nd Fiscal Period(April 1, 2016 –September 30, 2016)

23rd Fiscal Period(October 1, 2016 –March 31, 2017)

Cash flows from operating activities
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

2,193,924
1,582,665

2,502,606
1,606,450

7,546

7,505

14,503
ሺ685)

21,211(1,190)ሺ57)

Interest expenses

451,824

Decrease (increase) in operating accounts receivable

40,205
ሺ23,556)

Decrease (increase) in prepaid expenses
Decrease (increase) in consumption taxes receivable
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable - other
Increase (decrease) in accrued consumption taxes
Increase (decrease) in advances received
Decrease due to sale of property, plant and equipmentin trust
Decrease (increase) in long-term prepaid expenses
Other, net

ሺ1,264)
ሺ2,656)

23,078
ሺ17,913)(46)
450,872
ሺ33,687)
23,708

1,264
24,544
ሺ141,153)
11,147(6,156)

ሺ1,030)1,502,287

1,168,045

ሺ99,555)

ሺ28,452)

11,080(2,799)Subtotal

5,680,397

5,603,871

Interest income received

57
ሺ449,964)
ሺ3,807)46
ሺ452,590)
ሺ1,302)

Interest expenses paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities
Purchase of property, plant and equipment in trust
Purchase of intangible assets
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 new investment units
Dividends paid
Net cash provided by financing activities
Net increase (decrease) in cash and cash equivalents

5,226,683

5,150,025

ሺ7,411,375)

ሺ9,751,609)

140,160

155,193

ሺ221,860)

ሺ143,522)

ሺ7,498,977)

ሺ9,747,475)

12,000,000
ሺ2,800,000)

9,500,000
ሺ9,500,000)

ሺ43)

ሺ5,857)4,500,000
ሺ8,700,000)Ǧሺ2,162,923)
2,837,076

564,782

ሺ125)

ሺ7,412)

ሺ3,000,000)
9,661,495
ሺ2,183,802)
4,477,693(119,757)

Cash and cash equivalents at the beginning of period

8,444,945

9,009,728

Cash and cash equivalents at the end of period

9,009,728

8,889,971

See accompanying “Notes to Financial Statements.”
32

33

Notes to Financial Statements

3. Summary of Significant Accounting Policies

1. Organization

1. Depreciation method for
non-current assets

Sekisui House Residential Investment Corporation (the “Investment Corporation”) is a real estate investment
trust (REIT) specialized in residential properties, established in April 2005 under the Act on Investment Trusts
and Investment Corporations (Act No. 198 of 1951; as amended) (the “Investment Trusts Act”) and listed on theReal Estate Investment Trust Section (J-REIT market) of the Tokyo Stock Exchange in July 2005 (securities
code: 8973).
Since listing, the Investment Corporation has made it a basic policy to conduct management with the aim of
securing stable earnings and steady growth of investment properties from a medium- to long-term perspective,
and worked to build a portfolio that is centered on the high-quality rental residential properties planned anddeveloped by the Sekisui House Group (Note) with Sekisui House, Ltd., the sponsor, as the core company. As
a result of these endeavors, its asset size has grown to 206.9 billion yen (based on the acquisition price) with
113 properties at the end of the 23rd fiscal period (March 31, 2017).
The Investment Corporation will utilize the comprehensive strengths of the Sekisui House Group on housing,backed by the ample track records and know-how accumulated by the Group through widely implementing
housing-related businesses, to the utmost for its external growth and internal growth. By doing so, theInvestment Corporation will aim to maximize its business value as well as the interests of its unitholders.
The Investment Corporation has executed an asset management agreement with Sekisui House AssetManagement, Ltd., a 100%-owned subsidiary of Sekisui House, Ltd., to consign operations related to
management of its assets.
(Note) The Sekisui House Group refers to the corporate group encompassing Sekisui House and its 225 subsidiaries and26 affiliated companies (at the end of January 2017). The same follows hereafter.

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 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 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 Septemberof 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.

34(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 – 66 years
Structures in trust3 – 50 years
Machinery and equipment in trust
7 – 48 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.
2. Accounting for deferred(1) Investment corporation bond issuance costs
assetsInvestment 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 as expenses at an amountattributable to each fiscal period as expenses related to rent business.
Property taxes etc. that the Investment Corporation pays to the sellerin connection with acquisition 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 29,900 thousand yen for the 22nd fiscal period and 3,952
thousand yen for the 23rd 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 statement of cash flows consistof cash on hand and cash in trust; deposits that can be withdrawn at any
cash equivalents) in thetime and deposits in trust; and short-term investments with a maturity of 3
statement of cash flows
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

35

properties are recorded in relevant accounts on the balance sheet andstatement of income and retained earnings.
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.

4. Note to Balance Sheet
Minimum total net assets designated in Article 67-4 of the Investment Trusts Act(Thousand yen)
22nd Fiscal Period(As of September 30, 2016)

23rd Fiscal Period(As of March 31, 2017)
50,00050,000Commitment line contract
The Investment Corporation concluded a commitment line contract with three banks for borrowings.

(Thousand yen)

22nd Fiscal Period(As of September 30, 2016)

23rd Fiscal Period(As of March 31, 2017)

Maximum commitment line amount-

10,000,000

Used commitment line balance--

Difference-

10,000,000

5. Notes to Statement of Income and Retained Earnings
Breakdown of real estate rental revenues and expenses
22nd Fiscal Period(April 1, 2016 –September 30, 2016)(Thousand yen)
23rd Fiscal Period(October 1, 2016 –March 31, 2017)

A. Real estate rental revenues
Rent revenue - real estate
Rents
Other revenue

6,470,566

6,668,229

204,144

218,667

Total real estate rental revenue

6,674,711

6,886,897

B. Real estate rental expenses
Expenses related to rent businessOutsourcing expenses

631,260

656,606

Utilities expenses

86,73584,388Insurance expenses

7,771

8,013

Repair expenses

218,848

201,751

Property and other taxes

380,518

377,346

Trust fees

43,254

43,196Other

267,339

281,374

1,582,549

1,606,420

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

36

3,218,278

3,259,096

3,456,432

3,627,800

37

Breakdown of gain on sales of real estate properties
22nd Fiscal Period (from April 1, 2016 to September 30, 2016)

8. Lease Transactions(Thousand yen)
Esty Maison HIGASHISHINJUKU(part of land)
Revenue from sales of real estate
Cost of real estate sold
Other sales expenses

Operating lease transactions as lessee
Future lease payable equivalents

Due within one year

22nd Fiscal Period(As of September 30, 2016)
24,648(Thousand yen)
23rd Fiscal Period(As of March 31, 2017)
24,648Due after one year

866,788854,464

Total

891,436

879,112(Thousand yen)
23rd Fiscal Period(As of March 31, 2017)
1,600,910

23,500
7,154
2,261

9,415
14,084Gain on sales of real estate properties

Operating lease transactions as lessor

b-town MINAMIAOYAMARevenue from sales of real estate
Cost of real estate sold
Other sales expenses

1,495,133
60,519Gain on sales of real estate properties

1,560,000

Future lease receivable equivalents

1,555,653
4,346

Due within one year

22nd Fiscal Period(As of September 30, 2016)
1,663,229

Due after one year

5,630,344

5,422,695

Total

7,293,574

7,023,605

23rd Fiscal Period (from October 1, 2016 to March 31, 2017)(Thousand yen)

9. Financial Instruments

Esty Maison YACHIYOMIDORIGAOKA
Revenue from sales of real estate
Cost of real estate sold
Other sales expenses

1,168,146
49,676

1,250,000

1. Matters Concerning Status of Financial Instruments

1,217,823(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 fundmanagement plans. With regard to surplus fund management, the Investment Corporation focuses onsafety and liquidity, 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.

32,176

Gain on sales of real estate properties

6. Notes to Statement of Changes in Net Assets
22nd Fiscal Period(April 1, 2016 –September 30, 2016)

Total number of authorized investment
units and total number of investment units
issued23rd Fiscal Period(October 1, 2016 –March 31, 2017)

Total number of authorized investment units

10,000,000 units

10,000,000 units

Total number of investment units issued

1,018,110 units

1,105,510 units

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
22nd Fiscal Period(April 1, 2016 –September 30, 2016)(Thousand yen)
23rd Fiscal Period(October 1, 2016 –March 31, 2017)

Cash and deposits

4,001,779

3,793,152

Cash and deposits in trust

5,007,948

5,096,818

Cash and cash equivalents

9,009,728

8,889,971(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.
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.

38

39

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

23rd Fiscal Period (As of March 31, 2017)
Book Value Recordedon the Balance Sheet

3,793,152-(2) Cash and deposits in trust

5,096,818

5,096,818-

146,649

146,649-(2,628)(2,628)-144,020

144,020-

9,033,991

9,033,991-

314,916

314,916

-

-

-

-

4,000,000

4,013,033

13,0334,805,000

4,819,804

14,804(8) Investment corporation bonds

10,500,000

10,611,537

111,537(9) Long-term loans payable

86,404,500

87,034,282

629,782(Thousand yen)

Total of liabilities

106,024,416

106,793,575

769,158

Difference(10) Derivative transactions

-

-

-

(3) Operating accounts receivable
Allowance for doubtful accounts

Total of assets(5) Short-term loans payable

2. Matters Concerning Fair Value, etc. of Financial Instruments
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.
22nd Fiscal Period (As of September 30, 2016)(1) Cash and deposits

4,001,779

4,001,779-(2) Cash and deposits in trust

5,007,948

5,007,948-

112,962

112,962-

ሺ3,818)-109,143

ሺ3,818)109,143-

9,118,872

9,118,872-(4) Operating accounts payable

412,267

412,267-(5) Short-term loans payable

3,000,000

3,000,000

-

-

-

-

12,205,000

12,244,468

39,468(8) Investment corporation bonds

14,500,000

14,697,914

197,914(9) Long-term loans payable

79,004,500

80,236,082

1,231,582

Total of liabilities

109,121,767

110,590,733

1,468,965---(3) Operating accounts receivable
Allowance for doubtful accounts

Total of assets(6) Current portion of investment
corporation bonds(7) Current portion of long-term loans
payable(10) Derivative transactions

Difference

3,793,152(4) Operating accounts payable

Fair Value

Fair Value(1) Cash and deposits(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(Thousand yen)

(6) Current portion of investment
corporation bonds(7) Current portion of long-term loans
payable(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 receivable
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 investment corporation bonds and (8) 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.
(7) Current portion of long-term loans payable and (9) 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, thefair value of certain long-term loans payable with floating interest rates that qualifies for the special accountingof interest rate swaps [see Note “11. Derivative Transactions ”] is based on the method of calculating bydiscounting the sum of its principal and interest payments net of any cash flows from the interest-rate swap
by a reasonably 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.
(10) Derivative transactions
See Note “11. Derivative Transactions.”

40

41

(Note 4) Financial instruments for which discerning of fair value is recognized to be extremely difficult(Note 2) Scheduled redemption amount of monetary claims
22nd Fiscal Period (As of September 30, 2016)(Thousand yen)
Due after 1
Due after 2
Due after 3
Due after 4
Due in 1 YearDue after
Year through Years through Years through Years throughor Less
5 Years
2 Years
3 Years
4 Years
5 Years(1) Cash and deposits(2) Cash and deposits intrust(3) Operating accounts
receivable
Total of assets

4,001,779

-

-

-

-

-

5,007,948

-

-

-

-

-

112,962

-

-

-

-

-

9,122,690

-

-

-

-

-

23rd Fiscal Period (As of March 31, 2017)(Thousand yen)
Due after 1
Due after 4
Due after 2
Due after 3
Due in 1 YearDue after
Year through Years through Years through Years throughor Less
5 Years
2 Years
3 Years
4 Years
5 Years(1) Cash and deposits(2) Cash and deposits intrust(3) Operating accounts
receivable
Total of assets

3,793,152

-

-

-

-

-

5,096,818

-

-

-

-

-

146,649

-

-

-

-

-

9,036,620

-

-

-

-

-

22nd Fiscal Period (As of September 30, 2016)(1) Short-term loans
payable(2) Investment
corporation bonds(3) Long-term loans
payableTotal of liabilities

Due after 2
Due after 3
Due after 4
Due after 1
Year through Years through Years through Years through2 Years
3 Years
4 Years
5 Years

Total of liabilities

42

Due after
5 Years

-

-

-

-

-

-

4,000,000

2,500,000

2,000,000-

6,000,000

12,205,000

4,600,000

8,382,000

12,292,500

14,300,000

39,430,000

15,205,000

8,600,000

10,882,000

14,292,500

14,300,000

45,430,000

Due in 1 Yearor Less(1) Short-term loans
payable(2) Investment
corporation bonds(3) Long-term loans
payable(Thousand yen)

3,000,000

23rd Fiscal Period (As of March 31, 2017)
Due after 4
Due after 2
Due after 3
Due after 1
Year through Years through Years through Years through2 Years
3 Years
4 Years
5 Years(Thousand yen)
23rd Fiscal Period(As of March 31, 2017)(1) Lease and guarantee deposits

242,672

242,672(2) Tenant leasehold and security
deposits in trust

1,934,556

1,946,227

(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. Securities
22nd Fiscal Period (As of September 30, 2016)
Not applicable
23rd Fiscal Period (As of March 31, 2017)
Not applicable

11. Derivative Transactions(Note 3) Scheduled redemption and repayment amount of investment corporation bonds and borrowings

Due in 1 Yearor Less

Category

22nd Fiscal Period(As of September 30, 2016)

1. Derivatives to which hedge accounting is not applied
22nd Fiscal Period (As of September 30, 2016)
Not applicable
23rd Fiscal Period (As of March 31, 2017)
Not applicable
2. Derivatives to which hedge accounting is applied
22nd Fiscal Period (As of September 30, 2016)
The following is the contract amount or amount equivalent to the principal provided in the contract, etc. asof balance sheet date for each method of hedge accounting.

(Thousand yen)
Method of Hedge
Accounting

Due after
5 Years

-

-

-

-

-

-

4,000,000

2,500,000

2,000,000--

6,000,000

4,805,000

10,882,000

6,792,500

17,000,000

14,230,000

37,500,000

8,805,000

13,382,000

8,792,500

17,000,000

14,230,000

43,500,000

Type of Derivative
Main Hedged Item
Transactions

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

(Thousand yen)Calculation
Fair
Method for
Value
the Fair
Value

Interest rate swap
Special accounting
transaction
Long-term loans
for interest rate
61,304,500 (Note 2)
73,509,500
Receivable floating;payableswaps
Payable 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, the hedged item. Accordingly, their fair value is included in the fair value of the relevant long-term loans
payable (See Note “9. Financial Instruments” 2. Matters Concerning Fair Value, etc. of Financial Instruments(Note 1) (9) Long-term loans payable).

43

23rd Fiscal Period (As of March 31, 2017)
The following is the contract amount or amount equivalent to the principal provided in the contract, etc. asof balance sheet date 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

(Thousand yen)Calculation
Fair
Method for
Value
the Fair
Value

Interest rate swap
Special accounting
transaction
Long-term loans
59,204,500 (Note 2)
for interest rate
64,009,500
Receivable floating;payableswaps
Payable 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, the hedged item. Accordingly, their fair value is included in the fair value of the relevant long-term loans
payable (See Note “9. Financial Instruments” 2. Matters Concerning Fair Value, etc. of Financial Instruments(Note 1) (9) Long-term loans payable).

12. Retirement Benefits

1. Deferred tax assets and deferred tax liabilities consisted of the following:
22nd Fiscal Period(As of September 30, 2016)(Thousand yen)
23rd Fiscal Period(As of March 31, 2017)

5,978

6,619

1,211

834

34

32

7,225

7,485

ሺ7,190)(7,453)

Deferred tax assets:
Amortization of leasehold rights in trust
Amount of allowance for doubtful accounts notdeductible from taxable income
Amount of accrued business taxes not deductible
from taxable income
Subtotal deferred tax assets

34

32

34

32

22nd Fiscal Period(As of September 30, 2016)

Deductible cash distributions
Provision for reserve for reduction entry
Other
Effective income tax rate

44

22nd Fiscal Period (from April 1, 2016 to September 30, 2016)
Not applicable
23rd Fiscal Period (from October 1, 2016 to March 31, 2017)
Not applicable

2. Subsidiaries and Affiliates
22nd Fiscal Period (from April 1, 2016 to September 30, 2016)
Not applicable
23rd Fiscal Period (from October 1, 2016 to March 31, 2017)
Not applicable
3. Sister Companies
22nd Fiscal Period (from April 1, 2016 to September 30, 2016)
Not applicable
23rd Fiscal Period (from October 1, 2016 to March 31, 2017)
Not applicable

4. Directors and Major Individual Unitholders

2. Reconciliation of the statutory tax rate to the Effective Income Tax Rate

Statutory tax rate
(Adjustment)

15. Assets Retirement Obligations

23rd Fiscal Period (from October 1, 2016 to March 31, 2017)
Not applicable

13. Income Taxes

Deferred tax assets, net

23rd Fiscal Period (from October 1, 2016 to March 31, 2017)
Not applicable as the Investment Corporation does not have any affiliated companies.

1. Parent Company and Major Corporation Unitholders
22nd Fiscal Period (from April 1, 2016 to September 30, 2016)
Not applicable

23rd Fiscal Period (As of March 31, 2017)
Not applicable as the Investment Corporation does not have any retirement benefit plan.

Total deferred tax assets

22nd Fiscal Period (from April 1, 2016 to September 30, 2016)
Not applicable as the Investment Corporation does not have any affiliated companies.

16. Transactions with Related Parties

22nd Fiscal Period (As of September 30, 2016)
Not applicable as the Investment Corporation does not have any retirement benefit plan.

Valuation allowance

14. Equity Method Income and Retained Earnings

23rd Fiscal Period(As of March 31, 2017)31.74%

31.74%

ሺ31.59%)
ሺ0.12%)(31.32%)
ሺ0.40%)

0.04%
0.07%

0.03%
0.05%

22nd Fiscal Period (from April 1, 2016 to September 30, 2016)

Classification Name

Share of
Voting Rights
Business[or Ownership
Description orof Such in the
Occupation
Investment
Corporation]

Executive Directorof the Investment
Director andCorporation and
Osamu
President of
its close
Minami Sekisui House SI
relatives
AssetManagement, Ltd.

-

Description ofTransaction
Payment of asset
management fees to
Sekisui House SI
Asset Management,
Ltd. (Note 1)
Payment of institution
operation andadministration feesto Sekisui House SI
Asset Management,
Ltd. (Note 3)

Balance atTransaction
the End ofAmountCategory
Period(thousand(thousandyen)
yen)
524,181(Note 2)

6,100

Accounts
payable otherAccounts
payable -536,493

1,512

other
45

(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 27,240 thousand yen as asset management fees related to property acquisitions, which havebeen capitalized in the book value of individual real properties, and 12,668 thousand yen of asset management
fees related to property disposition, which have been recorded in other sales expenses.
(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.

23rd Fiscal Period (from October 1, 2016 to March 31, 2017)Classification Name

Share of
Voting Rights
Business[or Ownership
Description orof Such in the
Occupation
Investment
Corporation]

Description ofTransaction

Balance atTransaction
the End ofAmountCategory
Period(thousand(thousand
yen)
yen)

Payment of asset
Accounts
management fees to409,597
Sekisui House Asset
Executive Director
payable 394,845(Note 2)
Management, Ltd.
of the Investment
other
Director and(Note 1)
Corporation and
Osamu
President ofPayment of institution
its close
Minami Sekisui House
operation andrelatives
AccountsAssetadministration fees
1,400
payable 1,512
Management, Ltd.
to Sekisui House
other
Asset Management,
Ltd. (Note 3)(Note 1) The transaction was conducted by Osamu Minami as representative of a third party (Sekisui House 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 39,016 thousand yen as asset management fees related to property acquisitions, which havebeen capitalized in the book value of individual real properties, and 10,000 thousand yen of asset management
fees related to property disposition, which have been recorded in other sales expenses.
(Note 3) The transaction was conducted by Osamu Minami as representative of a third party (Sekisui House 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.

17. Segment Information[Segment Information]
Descriptions are omitted as the Investment Corporation has a single business segment of real estateleasing business.
[Related Information]
22nd Fiscal Period (from April 1, 2016 to September 30, 2016)(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 of income
and retained earnings.
(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 and retained earnings.
(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 and retained earnings.
23rd Fiscal Period (from October 1, 2016 to March 31, 2017)(1) Information by product and service
46

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 of income
and retained earnings.
(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 and retained earnings.
(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 and retained earnings.

18. Per Unit Information
23rd Fiscal Period
22nd Fiscal Period(April 1, 2016 –(October 1, 2016 –Item
September 30, 2016)
March 31, 2017)
Net assets per unit
89,668 yen
91,648 yen
Net income per unit
2,153 yen
2,288 yen
(Note 1) Diluted net income per unit has not been presented since no warrants or convertible bonds are outstanding.
(Note 2) Net income per unit has been calculated based on the following data:
PeriodPeriodItem
Net Income (thousand yen)Amount not attributable to ordinary
unitholders (thousand yen)
Net income attributable to ordinary
investment units (thousand yen)
Average number of units during the
fiscal period (units)

22nd Fiscal Period(April 1, 2016 –September 30, 2016)
2,192,416

23rd Fiscal Period(October 1, 2016 –March 31, 2017)
2,501,336--

2,192,416

2,501,336

1,018,110

1,093,070

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. Real estate rental revenues andexpenses for the relevant rental properties amounted to 3,456,432 thousand yen for the 22nd fiscal period and3,627,800 thousand yen for the 23rd 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.
22nd Fiscal Period(April 1, 2016 –September 30, 2016)(Thousand yen)
23rd Fiscal Period(October 1, 2016 –March 31, 2017)

Book value recorded on the balance sheet
Balance at the beginning of period
188,701,461
192,994,081
Amount of net change during period
4,292,620
7,016,565
Balance at the end of period
192,994,081
200,010,647
Fair value at the end of period
214,650,000
226,015,800(Note 1) Book value recorded on the balance sheet indicates the book value less accumulated depreciation.
(Note 2) Net change during the 22nd fiscal period is comprised of increases primarily attributable to new acquisitions of 4
properties (7,061,224 thousand yen) and decrease primarily attributable to disposition of Esty Maison
HIGASHISHINJUKU (part of the land) and b-town MINAMIAOYAMA (1,502,287 thousand yen) and depreciation(1,582,549 thousand yen). Net change during the 23rd fiscal period is comprised of increases primarily attributableto new acquisitions of 3 properties (9,393,337 thousand yen) and decrease primarily attributable to disposition of
Esty Maison YACHIYOMIDORIGAOKA (1,168,146 thousand yen) and depreciation (1,606,420 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 the respective appraisal dates of September 30,
2016 and March 31, 2017.

20. Significant Subsequent Events
Not applicable47

5. Schedule of Investment Corporation Bonds

21. Detailed Schedules
1. Schedule of Securities
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(Thousand yen)Contract Amount (Note 1)

Category

Type

Transaction other thanmarket transaction

Interest rate swap
transaction
Receivable floating;payable fixed

Fair Value(Note 2)

Of Which,over 1 YearTotal

64,009,500

59,204,500

64,009,500

59,204,500-(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

Property,plant andequipment

Intangible
assetsBalance Increase Decrease Balance
duringduringas of
as of
OctoberthetheMarch 31,
1, 2016 Period
Period2017

Buildings in trust 103,979
900
Structures in trust
Machinery and1,972
equipment in trust
Tools, furniture263
and fixtures intrust
101,708
Land in trust
Construction in
52
progress in trust
208,877
Total
Leasehold rights
164
in trust
6
Other
171
Total

(Million yen)

Accumulated Depreciation
Net BalanceorDepreciation
as of March Remarks
Accumulated during the31, 2017
Amortization
Period
16,3091,494
89,697(Note)
24325
739(Note)

3,136
83

1,108
1

106,007
983

71

21

2,022

618

66

1,403

(Note)

42

7

298

100

17

197

(Note)

6,457

337

107,827--

107,827(Note)

-

52

-

-

-

-

9,791

1,529

217,138

17,271

1,604

199,866

-

-

164

20

2

143

Name
First Series
Unsecured
Investment
Corporation Bonds
Second Series
Unsecured
Investment
Corporation Bonds
Third Series
Unsecured
Investment
Corporation Bonds
Fourth Series
Unsecured
Investment
Corporation Bonds
Fifth Series
Unsecured
Investment
Corporation Bonds
Total

Issue Date

February 28,
2013

Balance as of Decrease Balance as of
CouponOctober 1,during the
March 31,
Rate
2016
2017
Period(%)(million yen) (million yen) (million yen)

Redemption
Date-

February 28,
2018(Note 1)

4,000

4,000

0.630

February 28,
2013

2,000

-

2,000

1.000

February 28,
2020

February 28,
2014

2,500

-

2,500

0.374

February 28,
2019

February 28,
2014

3,000

-

3,000

1.069

February 28,2024

August 29,
2014

3,000

-

3,000

0.871

August 30,
2024

14,500-14,500Purpose Collateral(Note 2)

Unsecured(Note 3)(Note 1) These investment corporation bonds are recorded in the current liabilities on the balance sheet as current portionof investment corporation bonds at the end of the 23rd fiscal period.
(Note 2) The proceeds are used as funds for repayment of borrowings and acquisition of real estate trust beneficiaryinterests, etc.
(Note 3) The proceeds are used as funds for repayment of borrowings, etc.
(Note 4) These investment corporation bonds are equipped with pari passu clause among specified investment
corporation bonds.
(Note 5) Amounts of investment corporation bonds to be redeemed annually within five years after the date of the balance
sheet are as follows.
(Million 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

2,000

-

-

0
6
6
0
0
(Note)
0
171
27
2
144
(Note) The amount of increase during the 23rd fiscal period is primarily attributable to the acquisition of Prime Maison
SHIROKANE-TAKANAWA, Prime Maison ICHIGAYAYAMABUSHICHO and Esty Maison MORISHITA. The amountof decrease during the 23rd fiscal period is attributable to the disposition of Esty Maison YACHIYOMIDORIGAOKA.

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

48

49

6. Schedule of Loans Payable
Category

LenderShort-termloanspayableLong-term
loans
payable50

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
The Bank of TokyoMitsubishi UFJ, Ltd.
Subtotal
Aozora Bank, Ltd.
Shinkin Central Bank
Mizuho Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust
Bank, Limited
The Bank of TokyoMitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust andBanking Corporation
Resona Bank, Limited
Development Bank ofJapan Inc.
The Bank of Fukuoka, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
The Bank of TokyoMitsubishi UFJ, Ltd.
The Yamaguchi Bank, Ltd.
Development Bank ofJapan Inc.
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
The Norinchukin Bank
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Banking
Corporation
The Bank of TokyoMitsubishi UFJ, Ltd.
Mizuho Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
The Bank of TokyoMitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust andBanking Corporation
Resona Bank, Limited
The 77 Bank, Ltd.
The Hiroshima Bank, Ltd.
Mizuho Bank, Ltd.
The Bank of TokyoMitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust andBanking Corporation

Balance Increase Decrease Balance
as ofduringduringas of
Average
OctoberthetheMarch 31,
Repayment Repayment
Interest Rate
PurposeRemarks
2017
Method
1, 2016 Period
PeriodDate(Note 1)(million (million (million (million
yen)
yen)
yen)
yen)
1,000
1,000
August 31,
Lump-sum
1,000
Unsecured/
1,000
0.20500%(Note 4)2017
upon
Unguaranteed(Note 2)maturity
1,000
1,000
3,000
100
100
200

-

3,000
100
100
200

-

200

-

200

-

200

-

200

-

100

-

100

-

100

-

100

-

300

-

300

-

200

-

200

-

1,200

-

1,200

-

500
400

-

500
400

-

1,100

-

1,100

-

1,300

-

1,300

-

500

-

500

-

941

-

-

941

1,470

-

-

1,470

1,470

-

-

1,470

2,352
176

-

-

2,352
176

176

-

-

176

750

-

-

750

2,250

-

-

2,250

750

-

-

750

750

-

-

750

400

-

-

400

500

-

-

500

1,700

-

-

1,700

2,142

-

-

2,142

500
500
500
100

-

-

500
500
500
100

500

-

-

500

500

-

-

500

1.18975%

February 28,
2017

February 28,
1.19475%2017

February 28,
2019
Lump-sumupon
maturity
August 31,
0.95750%
2017(Note 3)
1.15475%

0.89900%

1.02225%

February 28,
2019(Note 5)(Note 6)

Unsecured/(Note 4) Unguaranteed(Note 5)February 28,
2020(Note 4)0.75600%

February 28,
2018(Note 3)Category

Aozora Bank, Ltd.
Shinkin Central Bank
Mizuho Bank, Ltd.

Balance Increase Decrease Balance
as ofduringduringas of
Average
OctoberthetheMarch 31,
Repayment Repayment
Interest Rate
Purpose2017
Method
1, 2016 Period
PeriodDate(Note 1)(million (million (million (million
yen)
yen)
yen)
yen)
200
200
200
200
300
300
-

Mizuho Trust & Banking
Co., Ltd.

400

-

400

-

Sumitomo Mitsui Banking
Corporation

300

-

300

-

Sumitomo Mitsui Trust
Bank, Limited

200

-

200

-

700

-

700

-

500

-

500

-

200
1,000
500

-

200
-

1,000
500

200

-

-

200

2,500

-

-

2,500

600

-

-

600

200

-

-

200

500
500
200

-

-

500
500
200

200

-

-

200

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

500

-

-

500

400

-

-

400

500

-

-

500

500

-

-

500

500

-

-

500

500

-

-

500

500
500
405

-

-

500
500
405

1,145

-

-

1,145

500
500
500
300

-

-

500
500
500
300

300

-

-

300

The Bank of TokyoMitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust andBanking Corporation
Resona Bank, LimitedAozora Bank, Ltd.
Mizuho Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Trust
Bank, Limited
The Bank of TokyoMitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust andBanking Corporation
Resona Bank, LimitedAozora Bank, Ltd.
Mizuho Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust
Bank, Limited
Mizuho Bank, Ltd.
Long-term Sumitomo Mitsui Banking
loans payable Corporation
Sumitomo Mitsui Trust
Bank, Limited
The Bank of TokyoMitsubishi UFJ, Ltd.
Mizuho Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust
Bank, Limited
Mitsubishi UFJ Trust andBanking Corporation
Resona Bank, Limited
The Senshu Ikeda Bank,
Ltd.
Mizuho Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust
Bank, Limited
Mitsubishi UFJ Trust andBanking Corporation
The Yamaguchi Bank, Ltd.
Resona Bank, Limited
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
The Shizuoka Bank, Ltd.
Shinkin Central Bank
The Bank of Fukuoka, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation

0.65475%

February 28,
20171.17200%

August 31,
2020

Remarks(Note 5)(Note 4)0.45819%1.17350%

1.11000%

August 31,
2018

Lump-sumupon
February 28,
maturity
2022(Note 5)

Unsecured/
Unguaranteed

February 28,
2022(Note 4)0.95225%

February 26,
2021

0.79614%February 28,
2020

0.97300%

February 26,
2021(Note 5)51

Category

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
The Bank of TokyoMitsubishi UFJ, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Aozora Bank, Ltd.
The Senshu Ikeda Bank,Ltd.
The Shizuoka Bank, Ltd.
The 77 Bank, Ltd.
Shinkin Central Bank
The Norinchukin Bank
The Hiroshima Bank, Ltd.
The Bank of Fukuoka, Ltd.
Mizuho Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust
Bank, Limited
The Bank of TokyoMitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust andBanking Corporation
The Yamaguchi Bank, Ltd.
Resona Bank, Limited
Development Bank ofJapan Inc.
The Norinchukin Bank
The Bank of Fukuoka, Ltd.
Mizuho Bank, Ltd.
Long-term
Sumitomo Mitsui Banking
loans payable
Corporation
The Bank of TokyoMitsubishi UFJ, Ltd.
Resona Bank, Limited
The Senshu Ikeda Bank,Ltd.
The Shizuoka Bank, Ltd.
The 77 Bank, Ltd.
Shinkin Central Bank
The Norinchukin Bank
The Hiroshima Bank, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Banking
Corporation
Development Bank ofJapan Inc.
Mizuho Bank, Ltd.
Aozora Bank, Ltd.
The Norinchukin Bank
Mizuho Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust
Bank, Limited
The Bank of TokyoMitsubishi UFJ, Ltd.
The Yamaguchi Bank, Ltd.
Resona Bank, Limited

52

Balance Increase Decrease Balance
as ofduringduringas of
Average
OctoberthetheMarch 31,
Repayment Repayment
Interest Rate
Purpose2017
Method
1, 2016 Period
PeriodDate(Note 1)(million (million (million (million
yen)
yen)
yen)
yen)
2,500
2,500
2,000

-

-

2,000

900

-

-

900

2,450

-

-

2,450

1,950

-

-

1,950

200

-

-

200

200

-

-

200

200
200
200
500
200
700
1,000

-

-

200
200
200
500
200
700
1,000

800

-

-

800

600

-

-

600

300

-

-

300

800

-

-

800

500

-

-

500

200
500

-

-

200
500

1,000

-

-

1,000

800
500
500

-

-

800
500
500

500

-

-

500

300

-

-

300

750

-

-

750

500

-

-

500

500
500
500
500
500
600

-

-

500
500
500
500
500
600

300

-

-

300

450

-

-

450

1,000

-

-

1,000

450

-

-

450

2,100

-

-

2,100

100
200
300
1,100

-

-

100
200
300
1,100

500

-

-

500

1,100

-

-

1,100

450

-

-

450

700

-

-

700

100
300

-

-

100
300

0.96475%

August 31,
2022

0.83600%

August 31,
2021

0.86650%

Lump-sumupon
maturity

Remarks

Unsecured/(Note 4)
Unguaranteed

February 28,
2023(Note 4)0.85250%0.73975%

February 28,
2023

February 28,
2022
Lump-sumupon
maturity

0.62800%

Unsecured/
Unguaranteed

February 26,
2021

0.68030%

August 31,
2023

0.67400%

August 31,
2023(Note 5)0.45500%

February 29,2024

Category

The Senshu Ikeda Bank,Ltd.
The Shizuoka Bank, Ltd.
The 77 Bank, Ltd.
Shinkin Central Bank
Development Bank ofJapan Inc.
The Hiroshima Bank, Ltd.
The Bank of Fukuoka, Ltd.
Mitsubishi UFJ Trust andBanking Corporation
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Mitsubishi UFJ Trust andBanking Corporation
The Bank of TokyoMitsubishi UFJ, Ltd.
The Norinchukin Bank
Mizuho Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Banking
Corporation
Long-term
Sumitomo Mitsui Trustloans payable
Bank, Limited
Resona Bank, LimitedAozora Bank, Ltd.
Development Bank ofJapan Inc.
The Bank of Fukuoka, Ltd.
Mizuho Bank, Ltd.
Mitsubishi UFJ Trust andBanking Corporation
The Yamaguchi Bank, Ltd.
The Bank of TokyoMitsubishi UFJ, Ltd.
The Norinchukin Bank
Mizuho Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Banking
Corporation
Resona Bank, Limited
The Bank of TokyoMitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking
Corporation
Subtotal
Total

Balance Increase Decrease Balance
as ofduringduringas of
Average
OctoberthetheMarch 31,
Repayment Repayment
Interest Rate
Purpose2017
Method
1, 2016 Period
PeriodDate(Note 1)(million (million (million (million
yen)
yen)
yen)
yen)
100

-

-

100

100
100
100

-

-

100
100
100

600

-

-

600

100
200

-

-

100
200

450

-

-

450

800

-

-

800

800

-

-

800

1,000

-

-

1,000

600

-

-

600

300
200

-

-

300
200

500

-

-

500

200

-

-

200

400

-

-

400

300
-

300

-

300
300

-

1,200

-

1,200

-

500
700

-

500
700

-

800

-

800

-

500

-

500

-

1,500

-

1,500

-

300
200

-

300
200

-

600

-

600

-

300

-

300

-

400

-

400

-

600

-

600

0.61000%

-

1,600

-

1,600

0.31000%

91,20994,209

9,500
9,500

9,500
12,50091,20991,2090.50500%

February 29,2024

0.50500%

February 29,
2024

0.57000%

August 29,2025

0.49500%

August 30,
2024

0.77880%

February 27,
2026

0.72500%

February 27,
2026

0.67000%

February 28,
2025

Lump-sumupon
maturity(Note 5)

Remarks

Unsecured/
Unguaranteed

February 28,
2025
August 31,
2020(Note 1) The “average interest rate” 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) The Investment Corporation borrowed short-term loans payable initially totaling 4.5 billion yen on August 31, 2016.
Of the amount, the Investment Corporation made early repayment for 1.5 billion yen on September 30, 2016,
leaving the balance at the beginning of the 23rd fiscal period at 3.0 billion yen. Of this balance, the Investment
Corporation made early repayment for 1.8 billion yen on December 9, 2016 and for 1.2 billion yen on March 15,
2017, respectively.
(Note 3) These loans are recorded in the current liabilities on the balance sheet as current portion of long-term loans
payable at the end of the 23rd fiscal period.
(Note 4) These loans are used as funds for repayment of existing borrowings.
(Note 5) These loans are used as funds for the acquisition of real estate trust beneficiary interests, etc.
(Note 6) 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.

53

(Note 7) Amounts of long-term loans payable to be repaid annually within five years after the date of the balance sheet
are as follows.
(Million yen)Due in 1 Yearor Less

4,805

Due after 1 Yearthrough 2 Years

10,882

Due after 2 Years
through 3 Years

6,792

Due after 3 Years
through 4 Years

17,000Due after 4 Years
through 5 Years

14,23054

012_9823324552907.indd
dm_9823324552907.indd

55

54
57-58

2017/07/21

13:38:41012_9823324552907.indd

55

2017/07/21

13:38:43
13:57:09

Overview of the Investment Corporation
Trade Name

Overview of the Asset Management Company
Trade Name

Sekisui House Residential Investment Corporation
3-1-31 Minami-Aoyama, Minato-ku, Tokyo

Address

Head OfficeTel: +81-3-5770-8973 (main number)

Representative

Osamu Minami, Executive Director

Asset Management Company

Fiscal Term

3-1-31 Minami-Aoyama, Minato-ku, Tokyo
Tel: +81-3-5770-8973 (main number)

Paid-in Capital

200 million yen

Shareholders

Sekisui House, Ltd. 100%

Sekisui House Asset Management, Ltd.

End of March and end of September

April 20, 2005

History

Sekisui House Asset Management, Ltd.

May 19, 2005
July 28, 2005

Directors

Registration and Establishment under Article 166 of the Act on Investment Trusts andInvestment Corporations (the “Investment Trusts Act”)
Implementation of registration by the Prime Minister under Article 187 of the Investment Trusts Act(Registration No.33 issued by the Director of Kanto Local Finance Bureau)
Listed on the Real Estate Investment Trust Section of the Tokyo Stock Exchange

Organizational Structure

President:

Osamu Minami

Executive Vice President:

Nobuyoshi Sato

Senior Managing Director:

Koji Sakamoto

Director (part-time):

Masami Matsumoto (Senior Manager, Accounting & Finance Department, Sekisui House, Ltd.)

Auditor (part-time):

Naoki Kawamura (Senior Manager, Legal Department, Sekisui House, Ltd.)

July 28, 2004
January 27, 2005

EstablishedCertified as entrustment-based agency under the Building Lots and Buildings Transaction BusinessAct (License No.31 issued by the Minister of Land, Infrastructure, Transportation and Tourism)
Certified as asset management operator of investment corporations under the Investment Trusts Act(License No. 41 issued by the Prime Minister)
Registered as a financial instruments business operator under the Financial Instruments and Exchange Act(Registration No.337 issued by the Director of Kanto Local Finance Bureau (Kinsho))April 18, 2005

History

September 30, 2007

Structure to Manage the Investment Corporation

Based on its Articles of Incorporation, the Investment Corporation manages the funds paid in by the unitholders by investing primarily in real estate and related assets.

The asset management of the Investment Corporation is entrusted to Sekisui House Asset Management, Ltd., the asset management company.

The following diagram indicates the operational roles and assignments of the companies involved in the management and administration of the Investment Corporation.

The following diagram shows the organizational chart of the asset management company and its organs in charge of compliance.

Specific Related Corporation /Pipeline Support Companies

Investment Corporation

General Meeting of
Shareholders

Administrator(Accounting) /Sekisui House, Ltd.
Sekiwa Real Estate, Ltd.
Agreement concerning preferential
negotiation rights, etc.

Sekisui House Residential
Investment Corporation

General Administrative Affairs
Entrustment Agreement
Asset Custody Agreement

Custodian

Statutory Auditor

Mizuho Trust & Banking Co., Ltd.

Organ to discuss and decide on basic andimportant compliance matters, etc.

Board of Directors

Compliance Committee
Asset Management Company / Administrator(Institutional management)

Asset Management
Agreement
Institutional
Management Agreement

General Meeting of Unitholders
Transfer Agency Services
Agreement(Investment Unit Administration
Services Agreement)

Sekisui House Asset Management, Ltd.

Board of Directors
Agreement concerning preferential
negotiation rights, etc.
Agreement concerning preferential
negotiation rights

Compliance Committee

Compliance Officer

Organs in charge of complianceTransfer Agent

Mizuho Trust & Banking Co., Ltd.

Executive
Director:
Osamu Minami
Supervisory
Director:
Kaoru Takamatsu
Supervisory
Mikio Koyano
Director:

Compliance Officer
President
Financial Agency Agreement

Pipeline Support Companies

Investment Committee

The Compliance Committee consists of theCompliance Officer, President and external experts
in compliance.

Investment Corporation
Bond Administrator

Risk Management and Compliance Office

Independent Auditor
The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Sekiwa Real Estate Kanto, Ltd.

Sekiwa Real Estate Kansai, Ltd.

Risk Management and Compliance Office

Ernst & Young ShinNihon LLC

Sekiwa Real Estate Tohoku, Ltd. Sekiwa Real Estate Chugoku, Ltd.
Sekiwa Real Estate Chubu, Ltd.

Sekiwa Real Estate Kyushu, Ltd.

Real Estate
Investment Department

56

The Compliance Officer is responsible formanaging the overall compliance of the AssetManagement Company. The Compliance Officer
shall be selected based on having sufficientexamining and supervising capabilities to ensurecompliance with laws, regulations and various
rules by the Asset Management Company

Asset Management
Department

Engineering
Management Department

IR & Financial
Affairs Department

Management
Department

The Risk Management and Compliance Officemonitors operations with regard to risk
management and compliance with laws, regulationsand various rules, etc.

57

Unitholders Information

MEMO

Changes in Investment Unit Price and Transaction Volume in the Last Two Years (March 31, 2015 – March 31, 2017)(Investment unit price: yen)

Investment unit price

200,000

Transaction volume(Transaction volume: units)

50,000Market capitalization: 136,419 million yen (as of March 31, 2017)High (closing price) in the 23rd fiscal period: 129,900 yen (December 30, 2016)

170,000

40,000Low (closing price) in the 23rd fiscal period: 112,700 yen (November 14, 2016)
Period-end investment unit price in the 23rd fiscal period: 123,400 yen (March 31, 2017)

140,000

30,000110,000

20,00080,00010,00050,0000Mar. 31,2015(19th FP)

Sept. 30,2015
(20th FP)

Jun. 30

Dec. 31Mar. 31,2016(21st FP)

Sept. 30,2016
(22nd FP)

Jun. 30

Dec. 31Mar. 31,2017(23rd FP)

Unitholders Composition
Number of Unitholders

Financial institutions (including securities companies)
153 (1.43%)

End of 23rd FP (Mar. 31, 2017)
10,702 unitholders

Foreign firms, etc.

Individuals and others

10,178 (95.10%)
206 (1.92%)
135 (1.23%)

End of 22nd FP (Sept. 30, 2016)
10,935 unitholders

Other domestic firms

165 (1.54%)

158 (1.44%)
10,427 (95.35%)

215 (1.97%)

Number of Investment Units

77,373 units (7.00%)

End of 23rd FP (Mar. 31, 2017)
1,105,510 units

End of 22nd FP (Sept. 30, 2016)
1,018,110 units

752,248 units (68.05%)

168,300 units (15.22%) 107,589 units (9.73%)

673,997 units (66.20%)

93,332 units (9.17%) 140,339 units (13.78%) 110,442 units (10.85%)

Major Unitholders
The following table shows the 10 largest unitholders according to the ratio of their owned investment units to the total number of investment units issued asof March 31, 2017.
Name / Company Name

Number of Investment
Units Owned (units)

Ratio of Investment Units Owned toTotal Investment Units Issued(%) (Note)

Japan Trustee Services Bank, Ltd. (Trust Account)

306,022

27.68

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

78,069

7.06

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

73,867

6.68

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

39,527

3.57

Sekisui House, Ltd.

39,000

3.52

THE HACHIJUNI BANK, LTD.

19,964

1.80

DEUTSCHE BANK AG LONDON-PB NON-TREATY CLIENTS 613

19,7401.78

THE FUJI FIRE AND MARINE INSURANCE COMPANY, LIMITED

17,130

1.54

The Hokuriku Bank, Ltd.

16,991

1.53

Mitsubishi UFJ Trust and Banking Corporation

16,103

1.45

626,413

56.66

Total
(Note) “Ratios of Investment Units Owned to Total Investment Units Issued” are rounded down to the nearest second decimal place.

58

59