May 1, 2018
Real Estate Investment Trust Securities Issuer
Sekisui House Reit, Inc.
Representative:
Junichi Inoue, Executive Director(Securities Code: 3309)
Asset Management Company:
Sekisui House Asset Management, Ltd.
Representative:
Junichi Inoue,
President & Representative Director
Inquiries:
Yoshiya Sasaki, Chief Manager
Investor Relations Department
TEL: +81-3-6447-4870 (main)

Notice Concerning Completion of Acquisition (Prime Maison Shirokanedai Tower and Five Other Properties)
and Completion of Sale (Esty Maison Machida and Eleven Other Properties) ofTrust Beneficiary Interests in Domestic Real Estate
Sekisui House Reit, Inc. (“SHR”) hereby announces that it has completed, as of today, acquisition of real estate
trust beneficiary interests in six residential properties (the “Asset Acquisition”) and sale of real estate trust
beneficiary interests in twelve residential properties (the “Asset Sale”) stated in the press release “NoticeConcerning Acquisition of Trust Beneficiary Interests in Domestic Real Estate and Leases (Prime Maison
Shirokanedai Tower and Five Other Properties) and Sale and Cancellation of Leases (Esty Maison Machida andEleven Other Properties)” released as of January 24, 2018 (the “Press Release dated January 24, 2018”), as
described below.
Further, we hereby announce the changed matters in the written real estate appraisals and the building
engineering reports which SHR has newly obtained upon settlement and delivery of the real estate trust
beneficiary interests with regard to six residential property of which SHR has completed acquisition as of today, as
well as the matters described as “Undecided” in the Press Release dated January 24, 2018.
1．Outline of acquisition and sale(1) Outline of the Asset Acquisition
The assets of which SHR has completed acquisition today (the “Acquired Assets”) are the real estate trust
beneficiary interests for the six residential properties set forth below.
Property nameSellerAcquisition price (Note 1)

Prime Maison Shirokanedai Tower

7,950 million yen

Prime Maison Otsuka

3,700 million yen

Prime Maison Asakusabashi
Prime Maison Daikanyama

Sekisui House, Ltd.

1,680 million yen
2,520 million yen

Prime Maison Gotenyama West3,400 million yen

Esty Maison Toyosu Residence (Note 2)

6,050 million yen

Total acquisition price (Note 1)
Note 1:
Note 2:
Note 3:25,300 million yen

The “acquisition price” and “total acquisition price” do not include acquisition expenses, fixed asset tax, city planning tax,
consumption tax, and local consumption tax; the same hereafter.
The property name of the “Esty Maison Toyosu Residence” is “Toyosu Residence” as of today, but its property name is scheduled to
be changed with the brand name “Esty Maison” after publicizing the change to the residents for a certain period of time, so theproperty name after such change has been stated; the same hereafter.
For more details regarding the above Acquired Assets, please see also the Press Release dated January 24, 2018 and the subsequent

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

1

section of this document titled “2. Changes from ‘Details of the Assets to be Acquired and Leases’ in the Press Release dated January
24, 2018”.

(2) Outline of the Asset Sale
The Assets of which SHR has completed sale as of today (the “Sold Assets”) are the real estate trust beneficiaryinterests for the 12 residential properties set forth below.
Property name

Purchaser (Note 1)

Sale price (Note 1)

Undisclosed

Undecided

Esty Maison Machida
Esty Maison Shinkawasaki
Esty Maison Megurohoncho
Esty Maison Joto
Esty Maison Tenjinhigashi I
Esty Maison Tenjinhigashi II
Esty Maison Shijonishinotoin
Esty Maison Hachiojiminamino
Esty Maison Nishinakajima
Esty Maison Kawaramachi
Esty Maison Shibaura
Esty Maison Tsutsujigaoka
Total sale price (Note 1)
Note 1:

Note 2:

16,400 million yen

The purchasers of the Sold Assets are multiple domestic limited liability companies, of which all are special purpose companies
established for the acceptance of assets. A single sale and purchase agreement has been entered with these limited liability
companies to complete the acceptance of assets, since each limited liability company is financed by the same domestic special
purpose company and is managed by the same asset management company. Since the transaction reflects a bulk sale, and sinceneither the purchasers of the Sold Assets nor the investor has given approval for disclosure, the sale price and purchaser information
for individual properties will remain undisclosed, In addition, the “total sale price” does not include sale expenses, fixed asset tax, city
planning tax, consumption tax, and local consumption tax; the same hereafter.
For more details regarding the above Sold Assets, please see the Press Release dated January 24, 2018.

As disclosed in the press release “Notice Concerning Completion of Merger with Sekisui House Residential
Investment Corporation” released as of today, the absorption-type merger with Sekisui House Residential
Investment Corporation (“SHI”) has become effective today (the “Investment Corporation Merger”), and the realestate trust beneficiary interests of SHI, a dissolving corporation in the absorption-type merger, have beensucceeded to by SHR. As a result of the completion of the Asset Acquisition and the Asset Sale, the assets undermanagement by SHR after the Investment Corporation Merger comprise 113 properties corresponding to 440.8
billion yen in asset size (the total amount of the acquisition prices of the assets under management).
For more details about the valuation of the real estate trust beneficiary interests succeeded to from SHI, please
see the press release “Notice Concerning Valuation of Succeeded Assets and Amount of Negative Goodwill From
Merger with Sekisui House Residential Investment Corporation” separately released as of today.

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

22．Changes from “Details of the Assets to be Acquired and Leases” in the Press Release dated January 24, 2018
(1) Prime Maison Shirokanedai Tower
Item

Description in the Press
Release dated January 24,
2018

Changes upon completion of
acquisition

Trustee

Undecided

Mizuho Trust & Banking Co.,Ltd.

Trust term expiration date

Undecided

April 30, 2028

Agreement term
expiration date

Undecided

April 30, 2028

Appraised value(thousand yen)

8,340,000

8,570,000

Time of valuation

December 1, 2017

April 1, 2018

Building
replacement cost(thousand yen)

2,347,000

2,389,000

Item

Description in the Press
Release dated January 24,
2018

Changes upon completion of
acquisition

Trustee

Undecided

Mizuho Trust & Banking Co.,Ltd.

Trust term expiration date

Undecided

April 30, 2028

Agreement term
expiration date

Undecided

April 30, 2028

Appraised value(thousand yen)

3,860,000

3,970,000

Time of valuation

December 1, 2017

April 1, 2018

6,540

9,010

1,401,000

1,424,000

Item

Description in the Press
Release dated January 24,
2018

Changes upon completion of
acquisition

Trustee

Undecided

Mizuho Trust & Banking Co.,Ltd.

Trust term expiration date

Undecided

April 30, 2028

Outline of leasing and management

Outline of written appraisal
Outline of building engineering
report (building condition
appraisal), etc.

(2) Prime Maison Otsuka

Outline of leasing and management

Outline of written appraisal

Outline of building engineering
report (building condition
appraisal), etc.

Repairexpenses(thousand yen)
(2 to 12-year
period)Building
replacement cost(thousand yen)

(3) Prime Maison Asakusabashi

Outline of leasing and management

Agreement term
expiration date

Undecided

April 30, 2028

Outline of written appraisal

Appraised value(thousand yen)

1,760,000

1,800,000

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

3

Time of valuation

December 1, 2017

April 1, 2018

Building
replacement cost(thousand yen)

659,000

671,000

Item

Description in the Press
Release dated January 24,
2018

Changes upon completion of
acquisition

Trustee

Undecided

Mitsubishi UFJ Trust andBanking Corporation

Trust term expiration date

Undecided

April 30, 2028

Agreement term
expiration date

Undecided

April 30, 2028

Appraised value(thousand yen)

2,650,000

2,730,000

Time of valuation

December 1, 2017

April 1, 2018

3,520

4,900

757,000

771,000

Item

Description in the Press
Release dated January 24,
2018

Changes upon completion of
acquisition

Trustee

Undecided

Mizuho Trust & Banking Co.,Ltd.

Trust term expiration date

Undecided

April 30, 2028

Agreement term
expiration date

Undecided

April 30, 2028

Appraised value(thousand yen)

3,560,000

3,680,000

Time of valuation

December 1, 2017

April 1, 201874,26084,7201,851,000

1,883,000

Outline of building engineering
report (building condition
appraisal), etc.

(4) Prime Maison Daikanyama

Outline of leasing and management

Outline of written appraisal

Outline of building engineering
report (building condition
appraisal), etc.

Repairexpenses(thousand yen)
(2 to 12-year
period)Building
replacement cost(thousand yen)

(5) Prime Maison Gotenyama West

Outline of leasing and management

Outline of written appraisal

Outline of building engineering
report (building condition
appraisal), etc.

Repairexpenses(thousand yen)
(2 to 12-year
period)Building
replacement cost(thousand yen)Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

4(6) Esty Maison Toyosu Residence
Item

Description in the Press
Release dated January 24,
2018

Changes upon completion of
acquisition

Trust term expiration date

September 26, 2023

April 30, 2028

Appraisal value(thousand yen)

6,440,000

6,460,000

Time of valuation

December 1, 2017

April 1, 2018452,510457,850

6,605,000

6,722,000

Outline of written appraisal

Outline of building engineering
report (building condition
appraisal), etc.

Repairexpenses(thousand yen)
(2 to 12-year
period)Building
replacement cost(thousand yen)

3．Summary of Appraisal Statements Regarding Acquired Assets
Changes from the descriptions in “14. Summary of Appraisal Statements Regarding Assets to be Acquired” of thePress Release dated January 24, 2018 are shown as underlined text.
Property nameAppraisal price
Name of appraisal agency
Time of valuation

Prime Maison Shirokanedai Tower
8,570,000,000 yen
Tanizawa Sogo Appraisal Co., Ltd.
April 1, 2018
(Unit: thousand yen)

Items

Value based on income approach

Value based on direct
capitalization method
Operating Revenue
Lease revenue(including common
area fee income)
Parking lot revenue
Other revenue
Vacant premises, etc.
loss, etc.
Operating Expenses
Maintenance andmanagement expenses
Water and utility fees
Repair expenses
Property manager fee
Tenant solicitation
expenses, etc.

Details

Summary, etc.
It was determined that the value based on the income approach calculatedusing the DCF method, which calculates the value by defining fluctuations
8,570,000 on future net operating income, is more persuasive and convincing, so
trial calculations were performed using the direct capitalization method,
based on the income amount according to the DCF method.
8,680,000
446,513441,752

Assessed as standard and stable lease income and parking lot income.

27,240Key money, renewal fee, vending machine income, and bicycle
registration fees recorded.
Assessed using vacancy rates and parking lots vacancy rates equalized-36,991
over the medium- to long-term.
94,955
14,512

21,537 Assessed based on written cost estimates, etc.
2,438 Assessed based on expenditure records, etc.
7,511 Assessed based on engineering reports and similar cases.
12,960 Assessed based on service agreements (not including CM and LM fees).
Assessed based on a turnover rate deemed to be a stable standard, based
25,791 on the competitiveness of the subject real property and similar
properties, etc.

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

5Taxes and other publicchargesNon-life insurance
premiums
Other expenses
Net Operating Income(NOI)
Revenue frominvestment of lumpsum payments
Capital expenditure
Net Income (NCF)

Capitalization rate

Value based on DCF method
Discount rate

Final capitalization rate
Cost method value
Land ratio
Building ratio
Other Matters Taken Into
Consideration by the Appraisal
Agency When Performing theAppraisal

19,466 Assessed based on FY2017 tax materials.
338 Assessed based on written estimates.
4,911 Assessed based on expenditure records, etc.
351,558
336 Assessed using an investment yield of 1.0%. Investment income recorded.
-4,780 Assessed based on engineering reports and similar cases.
347,115
The rate was compared to multiple transactions in neighboring areas andsimilar areas within the same supply and demand area, etc., we took into
4.0% account a comprehensive overview of the marketability of the subject real
property and trends in the real property market, etc., and took note of therelationship to the discount rate when performing our assessment.
8,520,000
We set a base yield for condominiums using the build up method, etc.
based on the yield for financial products, and carried out our assessment
4.1%
by incorporating the specified risks for the subject real property into thatbase yield.
We carried out our assessment by incorporating future unpredictability,
4.2%
based on the capitalization rate.
Calculated by making depreciation corrections to the cost of replacement
9,400,000of the subject real property.
72.2%
27.8%
Based on a value forming process and request purpose in which a market participant(purchaser) values profitability in the subject real property, as well as the typology as “alease property and its site,” we used as our standard an income amount that appropriatelyreflected future profitability for an investor to examine the cost method value and set theappraised value at the value based on the income approach.

*Comparison with the current rent unit price
Average rent unit price for theappraisal price
Average rent unit price for leaseagreements

Prime Maison Shirokanedai Tower
5,435 yen/m2(17,970 yen/tsubo)
5,541 yen/m2(18,318 yen/tsubo)

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

6

Property nameAppraisal price
Name of appraisal agency
Time of valuation
Items

Value based on income approach

Value based on direct
capitalization method
Operating Revenue
Lease revenue(including common
area fee income)
Parking lot revenue
Other revenue
Vacant premises, etc.
loss, etc.
Operating Expenses
Maintenance andmanagement expenses
Water and utility fees
Repair expenses
Property manager fee
Tenant solicitation
expenses, etc.
Taxes and other publicchargesNon-life insurance
premiums
Other expenses
Net Operating Income(NOI)
Revenue frominvestment of lumpsum payments
Capital expenditure
Net Income (NCF)

Capitalization rate

Value based on DCF method
Discount rate

Final capitalization rate

Prime Maison Otsuka
3,970,000,000 yen
Tanizawa Sogo Appraisal Co., Ltd.
April 1, 2018
(Unit: thousand yen)
Summary, etc.
It was determined that the value based on the income approach calculatedusing the DCF method, which calculates the value by defining fluctuations
3,970,000 on future net operating income, is more persuasive and convincing, so
trial calculations were performed using the direct capitalization method,
based on the income amount according to the DCF method.

Details

4,030,000
224,479
220,369

Assessed as standard and stable lease income and parking lot income.

13,272
Renewal fees, trunk room income, and bicycle parking lot registration fees
recorded.
Assessed using vacancy rates and parking lots vacancy rates equalized-14,323
over the medium- to long-term.
52,754
5,160

10,822 Assessed based on written cost estimates, etc.
2,352 Assessed based on expenditure records, etc.
4,300 Assessed based on engineering reports and similar cases.
6,608 Assessed based on service agreements (not including CM and LM fees).
Assessed based on a turnover rate deemed to be a stable standard, based
12,256 on the competitiveness of the subject real property and similar
properties, etc.
12,836 Assessed based on FY2017 tax materials, etc.
209 Assessed based on written estimates.
3,367 Assessed based on expenditure records, etc.
171,724
218 Assessed using an investment yield of 1.0%. Investment income recorded.
-2,860 Assessed based on engineering reports and similar cases.
169,083
The rate was compared to multiple transactions in neighboring areas andsimilar areas within the same supply and demand area, etc., we took into
4.2% account a comprehensive overview of the marketability of the subject real
property and trends in the real property market, etc., and took note of therelationship to the discount rate when performing our assessment.
3,940,000
We set a base yield for condominiums using the build up method, etc.
based on the yield for financial products, and carried out our assessment
4.3%
by incorporating the specified risks for the subject real property into thatbase yield.
We carried out our assessment by incorporating future unpredictability,
4.4%
based on the capitalization rate.

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

7

Cost method value

4,050,000

Land ratio
Building ratio

63.4%
36.6%

Other Matters Taken Into
Consideration by the Appraisal
Agency When Performing theAppraisalCalculated by making depreciation corrections to the cost of replacementof the subject real property.

Based on a value forming process and request purpose in which a market participant(purchaser) values profitability in the subject real property, as well as the typology as “alease property and its site,” we used as our standard an income amount that appropriatelyreflected future profitability for an investor to examine the cost method value and set theappraised value at the value based on the income approach.

*Comparison with the current rent unit pricePrime Maison Otsuka
4,659 yen/m2(15,400 yen/tsubo)
4,721 yen/m2(15,609 yen/tsubo)

Average rent unit price for theappraisal price
Average rent unit price for leaseagreements

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

8

Property nameAppraisal price
Name of appraisal agency
Time of valuation
Items

Value based on income approach

Value based on direct
capitalization method
Operating Revenue
Lease revenue(including common
area fee income)
Parking lot revenue
Other revenue
Vacant premises, etc.
loss, etc.
Operating Expenses
Maintenance andmanagement expenses
Water and utility fees
Repair expenses
Property manager fee
Tenant solicitation
expenses, etc.
Taxes and other publicchargesNon-life insurance
premiums
Other expenses
Net Operating Income(NOI)
Revenue frominvestment of lumpsum payments
Capital expenditure
Net Income (NCF)

Capitalization rate

Value based on DCF method
Discount rate

Final Capitalization rate

Prime Maison Asakusabashi
1,800,000,000 yen
Tanizawa Sogo Appraisal Co., Ltd.
April 1, 2018
(Unit: thousand yen)
Summary, etc.
It was determined that income approach value calculated using the DCF
method, which calculates the value by defining fluctuations on future net
1,800,000 operating income, is more persuasive and convincing, so trial calculations
were performed using the direct capitalization method, based on theincome amount according to the DCF method.

Details

1,830,000
103,906
105,540

Assessed as standard and stable lease income and parking lot income.

1,200
Key money, renewal fees, etc., and bicycle parking lot initial registration
fees recorded.
Assessed using vacancy rates and parking lots vacancy rates equalized-5,337over the medium- to long-term.
25,811
2,503

6,635 Assessed based on written cost estimates, etc.
1,097 Assessed based on expenditure records, etc.
2,207 Assessed based on engineering reports and similar cases.
3,042 Assessed based on service agreements (not including CM and LM fees).
Assessed based on a turnover rate deemed to be a stable standard, based
6,074 on the competitiveness of the subject real property and similar
properties, etc.
5,307 Assessed based on FY2017 tax materials.
94 Assessed based on written estimates.
1,350 Assessed based on expenditure records, etc.
78,09577 Assessed using an investment yield of 1.0%. Investment income recorded.
-1,340 Assessed based on engineering reports and similar cases.
76,832
The rate was compared to multiple transactions in neighboring areas andsimilar areas within the same supply and demand area, etc., we took into
4.2% account a comprehensive overview of the marketability of the subject real
property and trends in the real property market, etc., and took note of therelationship to the discount rate when performing our assessment.
1,780,000
We set a base yield for condominiums using the build up method, etc.
based on the yield for financial products, and carried out our assessment
4.3%
by incorporating the specified risks for the subject real property into thatbase yield.
We carried out our assessment by incorporating future unpredictability,
4.4%
based on the capitalization rate.

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

9

Cost method value

1,960,000

Land ratio
Building ratio

68.8%
31.2%

Other Matters Taken Into
Consideration by the Appraisal
Agency When Performing theAppraisalCalculated by making depreciation corrections to the cost of replacementof the subject real property.

Based on a value forming process and request purpose in which a market participant(purchaser) values profitability in the subject real property, as well as the typology as “alease property and its site,” we used as our standard an income amount that appropriatelyreflected future profitability for an investor to examine the cost method value and set theappraised value at the value based on the income approach.

*Comparison with the current rent unit pricePrime Maison Asakusabashi
4,326 yen/m2(14,300 yen/tsubo)
4,342 yen/m2(14,356 yen/tsubo)

Average rent unit price for theappraisal price
Average rent unit price for leaseagreements

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

10

Property nameAppraisal price
Name of appraisal agency
Time of valuation
Items

Value based on income approach

Value based on direct
capitalization method
Operating Revenue
Lease revenue(including common
area fee income)
Parking lot revenue
Other revenue
Vacant premises, etc.
loss, etc.
Operating Expenses
Maintenance andmanagement expenses
Water and utility fees
Repair expenses
Property manager fee
Tenant solicitation
expenses, etc.
Taxes and other publicchargesNon-life insurance
premiums
Other expenses
Net Operating Income(NOI)
Revenue frominvestment of lumpsum payments
Capital expenditure
Net Income (NCF)

Capitalization rate

Value based on DCF method
Discount rate

Final capitalization rate

Prime Maison Daikanyama
2,730,000,000 yen
Tanizawa Sogo Appraisal Co., Ltd.
April 1, 2018
(Unit: thousand yen)
Summary, etc.
It was determined that the value based on the income approach calculatedusing the DCF method, which calculates the value by defining fluctuations
2,730,000 on future net operating income, is more persuasive and convincing, so
trial calculations were performed using the direct capitalization method,
based on the income amount according to the DCF method.

Details

2,790,000
145,454
140,800

Assessed as standard and stable lease income, and parking lot income.

8,640
Key money, renewal fees, and bicycle parking lot registration fees
recorded.
Assessed using vacancy rates and parking lots vacancy rates equalized-10,544over the medium- to long-term.
32,433
6,558

5,337 Assessed based on written cost estimates, etc.
1,494 Assessed based on expenditure records, etc.
1,971 Assessed based on engineering reports and similar cases.
4,166 Assessed based on service agreements (not including CM and LM fees).
Assessed based on a turnover rate deemed to be a stable standard, based
8,476 on the competitiveness of the subject real property and similar
properties, etc.
8,403 Assessed based on FY2017 tax materials, etc.
110 Assessed based on written estimates.
2,472 Assessed based on expenditure records, etc.
113,021227 Assessed using an investment yield of 1.0%. Investment income recorded.
-1,540 Assessed based on engineering reports and similar cases.
111,708
The rate was compared to multiple transactions in neighboring areas andsimilar areas within the same supply and demand area, etc., we took into
4.0% account a comprehensive overview of the marketability of the subject real
property and trends in the real property market, etc., and took note of therelationship to the discount rate when performing our assessment.
2,710,000
We set a base yield for condominiums using the build up method, etc.
based on the yield for financial products, and carried out our assessment
4.1%
by incorporating the specified risks for the subject real property into thatbase yield.
We carried out our assessment by incorporating future unpredictability,
4.2%
based on the capitalization rate.

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

11

Cost method value

2,740,000

Land ratio
Building ratio

75.5%
24.5%

Other Matters Taken Into
Consideration by the Appraisal
Agency When Performing theAppraisalCalculated by making depreciation corrections to the cost of replacementof the subject real property.

Based on a value forming process and request purpose in which a market participant(purchaser) values profitability in the subject real property, as well as the typology as “alease property and its site,” we used as our standard an income amount that appropriatelyreflected future profitability for an investor to examine the cost method value and set theappraised value at the value based on the income approach.

*Comparison with the current rent unit pricePrime Maison Daikanyama
6,595 yen/m2(21,800 yen/tsubo)
6,837 yen/m2(22,602 yen/tsubo)

Average rent unit price for theappraisal price
Average rent unit price for leaseagreements

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

12

Property nameAppraisal price
Name of appraisal agency
Time of valuation
Items

Value based on income approach

Value based on direct
capitalization method
Operating Revenue
Lease revenue(including common
area fee income)
Parking lot revenue
Other revenue
Vacant premises, etc.
loss, etc.
Operating Expenses
Maintenance andmanagement expenses
Water and utility fees
Repair expenses
Property manager fee
Tenant solicitation
expenses, etc.
Taxes and other publicchargesNon-life insurance
premiums
Other expenses
Net Operating Income(NOI)
Revenue frominvestment of lumpsum payments
Capital expenditure
Net Income (NCF)

Capitalization rate

Value based on DCF method
Discount rate

Final capitalization rate

Prime Maison Gotenyama West3,680,000,000 yen
Tanizawa Sogo Appraisal Co., Ltd.
April 1, 2018
(Unit: thousand yen)
Summary, etc.
It was determined that the value based on the income approach calculatedusing the DCF method, which calculates the value by defining fluctuations
3,680,000 on future net operating income, is more persuasive and convincing, so
trial calculations were performed using the direct capitalization method,
based on the income amount according to the DCF method.

Details

3,710,000
215,306
218,981

Assessed as standard and stable lease income and parking lot income.

12,2403,649 Renewal fee income recorded.
Assessed using vacancy rates and parking lots vacancy rates equalized-19,565
over the medium- to long-term.
62,67417,091 Assessed based on written cost estimates, etc.
3,426 Recorded based on expenditure records, etc.
5,121 Assessed based on engineering reports and similar cases.
6,349 Assessed based on service agreements (not including CM and LM fees).
Assessed based on a turnover rate deemed to be a stable standard, based
12,773 on the competitiveness of the subject real property and similar
properties, etc.
16,358 Assessed based on FY2017 tax materials.
259 Assessed based on written estimates.
1,291 Assessed based on expenditure records, etc.
152,632520 Assessed using an investment yield of 1.0%. Investment income recorded.
-4,700 Assessed based on engineering reports and similar cases.
148,452
The rate was compared to multiple transactions in neighboring areas andsimilar areas within the same supply and demand area, etc., we took into
4.0% account a comprehensive overview of the marketability of the subject real
property and trends in the real property market, etc., and took note of therelationship to the discount rate when performing our assessment.
3,660,000
We set a base yield for condominiums using the build up method, etc.
based on the yield for financial products, and carried out our assessment
4.1%
by incorporating the specified risks for the subject real property into thatbase yield.
We carried out our assessment by incorporating future unpredictability,
4.2%
based on the capitalization rate.

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

13

Cost method value
Land Ratio
Building Ratio
Other Matters Taken Into
Consideration by the Appraisal
Agency When Performing theAppraisal

3,980,000

Calculated by making depreciation corrections to the cost of replacementof the subject real property.

74.3%
25.7%
Based on a value forming process and request purpose in which a market participant(purchaser) values profitability in the subject real property, as well as the typology as “alease property and its site,” we used as our standard an income amount that appropriatelyreflected future profitability for an investor to examine the cost method value and set theappraised value at the value based on the income approach.

*Comparison with the current rent unit price
Average rent unit price for theappraisal price
Average rent unit price for leaseagreements

Prime Maison Gotenyama West5,112 yen/m2(16,900 yen/tsubo)
5,397 yen/m2(17,842 yen/tsubo)

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

14

Property nameAppraisal price
Name of appraisal agency
Time of valuation
Items

Value based on income approach

Price using the direct
capitalization method(revised Inwood method)
Operating Revenue
Lease revenue(including common
area fee income)
Water and utility fee
revenue
Parking lot revenue
Other revenue
Vacant premises, etc.
loss, etc.
Operating Expenses
Maintenance andmanagement expenses
Water and utility fees
Repair expenses
Property manager fee
Tenant solicitation
expenses, etc.
Taxes and other publicchargesNon-life insurance
premiums
Other expenses
Net Operating Income(NOI)
Revenue frominvestment of lumpsum payments
Capital expenditure
Net Income (NCF)
Discount rate
Value based on DCF method
Discount rate (during theperiod held)

Esty Maison Toyosu Residence
6,460,000,000 yen
Tanizawa Sogo Appraisal Co., Ltd.
April 1, 2018
(Unit: thousand yen)
Summary, etc.
It was determined that the value based on the income approach calculatedusing the DCF method, which calculates the value by defining fluctuations
on future net operating income, is more persuasive and convincing, so
6,460,000
trial calculations were performed using the direct capitalization method(revised Inwood method), based on the income amount according to the
DCF method.

Details

6,680,000
900,948
903,095 Assessed as standard and stable lease income.
1,633 Assessed based on expenditure records, etc.
47,568 Assessed as standard and stable parking lot income.
12,892 Renewal fees and vending machine income, etc. recorded.
Assessed using vacancy rates and parking lots vacancy rates equalized-64,240over the medium- to long-term.
557,261
44,064 Assessed based on written cost estimates, etc.
7,344 Assessed based on expenditure records, etc.
22,498 Assessed based on engineering reports and similar cases.
26,595 Assessed based on service agreements (not including CM and LM fees).
Assessed based on a turnover rate deemed to be a stable standard, based
31,956 on the competitiveness of the subject real property and similar
properties, etc.
41,612 Assessed based on FY2017 tax materials.
953 Assessed based on written estimates.
382,236 Land rent, etc. assessed based on expenditure records, etc.
343,687
Assessed using an investment yield of 1.0%. Investment income recorded.
-4,462 (Investment loss recorded for deposit guarantee money relating to landlease)-26,880 Assessed based on engineering reports and similar cases.
312,344
We set a base yield for condominiums using the build up method, etc.
based on the yield for financial products, and carried out our assessment
4.5%
by incorporating the specified risks for the subject real property into thatbase yield and also examining case studies of transactions, etc.
6,370,000
We set a base yield for condominiums using the build up method, etc.
based on the yield for financial products, and carried out our assessment
4.5%
by incorporating the specified risks for the subject real property into thatbase yield and also examining case studies of transactions, etc.

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

15

Discount rate (whenassessing the sale price)
Cost method value
Land ratio
Building ratio
Other Matters Taken Into
Consideration by the Appraisal
Agency When Performing theAppraisal

We carried out our assessment by incorporating future unpredictability,
based on the discount rate during the period it was held.
Calculated by making depreciation corrections to the cost of replacement
6,670,000of the subject real property.
38.2%
61.8%
4.7%

Based on a value forming process and request purpose in which a market participant(purchaser) values profitability in the subject real property, as well as the typology as “abuilding with a fixed-term land lease (lease premises),” we used as our standard an income
amount that appropriately reflected future profitability for an investor to examine the cost
method value and set the appraised value at the value based on the income approach.

*Comparison with the current rent unit price
Esty Maison Toyosu Residence
3,206 yen/m2(10,600 yen/tsubo)
3,226 yen/m2(10,666 yen/tsubo)

Average rent unit price for theappraisal price
Average rent unit price for leaseagreements
Note 1:

With respect to amounts of money, amounts under 1,000 yen were rounded down, so in some cases the total amount may not match
the figures for operating income, operating expenses, or other items.

Note 2:“Average rent unit price for the appraisal price” is based on the stated “monthly lease revenue unit price (including common area fee
income) calculated based on the “lease income (including common area fees income)” for the residential areas in the direct
capitalization method in the above appraisal.

Note 3:“Average unit rent unit price for lease agreements” was calculated based on the total monthly rent income for effective leaseagreements for the residential areas as of March 31, 2018.

* Sekisui House Reit, Inc. website: http://sekisuihouse-reit.co.jp/en/<Attached Materials>[Reference Material]

Summary of Portfolio After Investment Corporation Merger, and Asset Acquisition andAsset Sale

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

16

[Reference Material]

Summary of Portfolio After Investment Corporation Merger, and Asset Acquisition andAsset Sale

Property
number

Property nameChuo-ku, Tokyo
Minato-ku,
TokyoShibuya-ku,
TokyoShibuya-ku,
Tokyo
Chiyoda-ku,
TokyoShinjuku-ku,
Tokyo

May 1, 2018

Acquisition
price (Note 2)(million yen)
6,540

May 1, 2018

1,790

0.4

May 1, 2018

2,040

0.5

May 1, 2018

873

0.2

May 1, 2018

1,610

0.4

May 1, 2018

1,590

0.4

Taito-ku, Tokyo

May 1, 2018

2,190

0.5

May 1, 2018

2,400

0.5

May 1, 2018

2,110

0.5

May 1, 2018

1,580

0.4

May 1, 2018

1,060

0.2

May 1, 2018

1,630

0.4

Location(Note 1)

R-001

Esty Maison Ginza

R-002

Esty Maison Azabunagasaka

R-003

Esty Maison Ebisu II

R-004

Esty Maison Ebisu

R-005

Esty Maison Kanda

R-006

Esty Maison Kitashinjuku

R-007

Esty Maison Asakusakomagata

R-008

Esty Maison Kawasaki

R-009

Esty Maison Yokohama

R-010

Esty Maison Kameido

Kawasaki-shi,
Kanagawa
Yokohama-shi,
Kanagawa
Koto-ku, Tokyo
Meguro-ku,
TokyoToshima-ku,
Tokyo

Date ofacquisition

Investment
ratio (Note 3)
(%)
1.5

R-011

Esty Maison Meguro

R-012

Esty Maison Sugamo

R-013

Esty Maison Kyobashi

Osaka-shi, Osaka

May 1, 2018

2,970

0.7

R-014

Esty Maison Hakuraku

Yokohama-shi,
Kanagawa

May 1, 2018

931

0.2

R-015

Esty Maison Minamihorie

Osaka-shi, Osaka

May 1, 2018

1,060

0.2

May 1, 2018

3,110

0.7

May 1, 2018

2,720

0.6

May 1, 2018

2,050

0.5

May 1, 2018

1,250

0.3

May 1, 2018

1,080

0.2

May 1, 2018

1,910

0.4

May 1, 2018

2,690

0.6

May 1, 2018

937

0.2

May 1, 2018

790

0.2

May 1, 2018

2,390

0.5

May 1, 2018

2,540

0.6

May 1, 2018

1,050

0.2

May 1, 2018

698

0.2

May 1, 2018

2,090

0.5

R-016

Esty Maison Gotanda

R-017

Esty Maison Oisendaizaka

R-018

Esty Maison Shinagawa Seaside

R-019

Esty Maison Minamiazabu

R-020

Esty Maison Tsukamoto

R-021

Esty Maison Kawasaki II

R-022

Esty Maison Azabujuban

R-023

Esty Maison Itabashihoncho

R-024

Esty Maison Oizumigakuen

R-025

Esty Maison Higashishinagawa

R-026

Esty Maison Itabashikuyakushomae

R-027

Esty Maison Musashikoyama

R-028

Esty Maison Sendagi

R-029

Esty Maison Yotsuyasakamachi

Shinagawa-ku,
Tokyo
Shinagawa-ku,
Tokyo
Shinagawa-ku,
Tokyo
Minato-ku,
TokyoOsaka-shi, Osaka
Kawasaki-shi,
Kanagawa
Minato-ku,
TokyoItabashi-ku,
Tokyo
Nerima-ku,
Tokyo
Shinagawa-ku,
Tokyo
Itabashi-ku,
Tokyo
Shinagawa-ku,
TokyoBunkyo-ku,
TokyoShinjuku-ku,
Tokyo

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

17

Property
number

Property nameLocation(Note 1)

R-030

Esty Maison Hakatahigashi

R-031

Esty Maison Kamigofuku

R-032

Esty Maison Sangenjaya

R-033

Prime Maison Musashinonomori

R-034

Prime Maison Higashisakura

R-035

Prime Maison Kayabakoen

R-036

Esty Maison Sangenjaya II

R-037

Esty Maison Itabashi C6

R-038

MAST Hakata

R-039

Esty Maison Kinshicho

R-040

Esty Maison Musashikoganei

R-041

Prime Maison Gokiso

R-042

Prime Maison Yuhigaoka

Fukuoka-shi,
Fukuoka
Fukuoka-shi,
Fukuoka
Setagaya-ku,
Tokyo
Kodaira-shi,Tokyo
Nagoya-shi,
Aichi
Nagoya-shi,
Aichi
Setagaya-ku,
Tokyo
Itabashi-ku,
TokyoFukuoka-shi,
Fukuoka
Sumida-ku,
Tokyo
Koganei-shi,Tokyo
Nagoya-shi,
Aichi
Osaka-shi, Osaka

R-043

Prime Maison Kitatanabe

R-044

Date ofacquisition

Acquisition
price (Note 2)(million yen)

Investment
ratio (Note 3)(%)

May 1, 2018

2,400

0.5

May 1, 2018

821

0.2

May 1, 2018

822

0.2

May 1, 2018

1,850

0.4

May 1, 2018

1,500

0.3

May 1, 2018

801

0.2

May 1, 2018

785

0.2

May 1, 2018

2,560

0.6

May 1, 2018

2,360

0.5

May 1, 2018

1,260

0.3

May 1, 2018

1,790

0.4

May 1, 2018

1,950

0.4

May 1, 2018

909

0.2

Osaka-shi, Osaka

May 1, 2018

601

0.1

Prime Maison Momochihama

Fukuoka-shi,
Fukuoka

May 1, 2018

1,940

0.4

R-045

Esty Maison Akihabara

Taito-ku, Tokyo

May 1, 2018

1,930

0.4

R-046

Esty Maison Sasazuka

Shibuya-ku,
Tokyo

May 1, 2018

3,340

0.8

R-047

Prime Maison Ginza East

May 1, 2018

6,250

1.4

R-048

Prime Maison Takami

May 1, 2018

1,050

0.2

R-049

Prime Maison Yadaminami

May 1, 2018

812

0.2

R-050

Prime Maison Teriha

May 1, 2018

1,260

0.3

R-051

Esty Maison Higashishirakabe

May 1, 2018

1,580

0.4

R-052

Esty Maison Sengoku

May 1, 2018

1,360

0.3

R-053

Esty Maison Daizawa

May 1, 2018

2,270

0.5

R-054

Esty Maison Togoshi

Chuo-ku, Tokyo
Nagoya-shi,
Aichi
Nagoya-shi,
Aichi
Fukuoka-shi,
Fukuoka
Nagoya-shi,
Aichi
Bunkyo-ku,
Tokyo
Setagaya-ku,
Tokyo
Shinagawa-ku,
Tokyo

May 1, 2018

1,770

0.4

R-055

Esty Maison Nishitemma

Osaka-shi, Osaka

May 1, 2018

1,680

0.4

May 1, 2018

2,400

0.5

May 1, 2018

1,680

0.4

May 1, 2018

1,540

0.3

May 1, 2018

861

0.2

May 1, 2018

1,030

0.2

R-056

Esty Maison Shirokanedai

R-057

Esty Maison Higashishinjuku

R-058

Esty Maison Motoazabu

R-059

Esty Maison Toritsudaigaku

R-060

Esty Maison Musashikoyama II

Shinagawa-ku,
TokyoShinjuku-ku,
Tokyo
Minato-ku,
Tokyo
Meguro-ku,
TokyoShinagawa-ku,
Tokyo

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

18

Property
number

Property nameLocation(Note 1)

R-061

Esty Maison Nakano

R-062

Esty Maison Shinnakano

R-063

Esty Maison Nakanofujimicho

R-064

Esty Maison Tetsugakudo

R-065

Esty Maison Koenji

R-066

Esty Maison Oshiage

R-067

Esty Maison Akabane

R-068

Esty Maison Oji

R-069
R-070

Nakano-ku,
TokyoNakano-ku,
TokyoNakano-ku,
TokyoNakano-ku,
Tokyo
Suginami-ku,
Tokyo
Sumida-ku,
Tokyo

Date ofacquisition

Acquisition
price (Note 2)(million yen)

Investment
ratio (Note 3)(%)

May 1, 2018

1,870

0.4

May 1, 2018

1,020

0.2

May 1, 2018

984

0.2

May 1, 2018

1,160

0.3

May 1, 2018

1,160

0.3

May 1, 2018

2,490

0.6

Kita-ku, Tokyo

May 1, 2018

3,290

0.7

Kita-ku, Tokyo

May 1, 2018

1,650

0.4

Prime Maison Waseda

Shinjuku-ku,
Tokyo

May 1, 2018

1,580

0.4

Prime Maison Hatchobori

Chuo-ku, Tokyo

May 1, 2018

1,460

0.3

May 1, 2018

1,960

0.4

May 1, 2018

2,910

0.7

May 1, 2018

555

0.1

May 1, 2018

2,460

0.6

May 1, 2018

2,430

0.6

May 1, 2018

8,250

1.9

May 1, 2018

8,630

2.0

May 1, 2018

2,070

0.5

May 1, 2018

4,490

1.0

May 1, 2018

1,930

0.4

May 1, 2018

1,960

0.4

May 1, 2018

3,160

0.7

May 1, 2018

1,930

0.4

May 1, 2018

1,250

0.3

May 1, 2018

2,309

0.5

May 1, 2018

1,910

0.4

May 1, 2018

4,360

1.0

May 1, 2018

1,080

0.2

May 1, 2018

830

0.2

May 1, 2018

2,750

0.6

May 1, 2018

1,390

0.3

R-071

Prime Maison Jimbocho

R-072

Prime Maison Gotenyama East

R-073

MAST LIFE Akihabara

R-074

Esty Maison Aoi

R-075

Esty Maison Yakuin

R-076

Esty Maison Kinshicho II

R-077

Esty Maison Ojima

R-078

Prime Maison Fujimidai

R-079

Esty Maison Tsurumai

R-080

Prime Maison Morishita

R-081

Prime Maison Shinagawa

R-082

Prime Maison Odorikoen

R-083

Prime Maison Minami 2-jo

R-084

Prime Maison Kamokamogawa

R-085

Prime Maison Central Park

R-086

MAST LIFE Yahiro

R-087

Prime Maison Ebisu

R-088

Granmast Kanazawa Nishiizumi

R-089

Granmast Unomori

R-090

Esty Maison Kohoku Tsunashima

R-091

MAST LIFE Hino

Chiyoda-ku,
Tokyo
Shinagawa-ku,
Tokyo
Chiyoda-ku,
Tokyo
Nagoya-shi,
Aichi
Fukuoka-shi,
Fukuoka
Sumida-ku,
Tokyo
Koto-ku, Tokyo
Nagoya-shi,
Aichi
Nagoya-shi,
Aichi
Koto-ku, Tokyo
Shinagawa-ku,
Tokyo
Sapporo-shi,
Hokkaido
Sapporo-shi,
Hokkaido
Sapporo-shi,
Hokkaido
Fukuoka-shi,
Fukuoka
Sumida-ku,
TokyoShibuya-ku,
TokyoKanazawa-shi,Ishikawa
Yokkaichi-shi,
MieYokohama-shi,
Kanagawa
Hino-shi, Tokyo

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

19

Property
number

Property nameLocation(Note 1)

Date ofacquisition

Acquisition
price (Note 2)(million yen)

Investment
ratio (Note 3)
(%)

R-092

Prime Maison Yokohama
Nihon-Odori

Yokohama-shi,
Kanagawa

May 1, 2018

4,870

1.1

R-093

Kobe Women’s Student Housing

Kobe-shi, Hyogo

May 1, 2018

5,880

1.3

May 1, 2018

2,430

0.6

May 1, 2018

3,010

0.7

Shibuya-ku,
TokyoShibuya-ku,
Tokyo

R-094

Prime Maison Shibuya

R-095

Prime Maison Hatsudai

R-096

Esty Maison Uemachidai

Osaka-shi, Osaka

May 1, 2018

1,040

0.2

R-097

Esty Maison Kobe-Sannomiya

Kobe-shi, Hyogo

May 1, 2018

971

0.2

May 1, 2018

4,900

1.1

May 1, 2018

4,220

1.0

May 1, 2018

655

0.1

May 1, 2018

7,950

1.8

May 1, 2018

3,700

0.8

May 1, 2018

1,680

0.4

May 1, 2018

2,520

0.6

May 1, 2018

3,400

0.8

May 1, 2018

6,050

1.4

237,395

53.8

59,60013.5

51,50011.7

23,1005.2

R-098

Prime Maison Shirokane-Takanawa

R-099

Prime Maison Ichigayayamabushicho

R-100

Esty Maison Morishita

R-101

Prime Maison Shirokanedai Tower

R-102

Prime Maison Otsuka

R-103

Prime Maison Asakusabashi

R-104

Prime Maison Daikanyama

R-105

Prime Maison Gotenyama West

R-106

Esty Maison Toyosu Residence

Minato-ku,
TokyoShinjuku-ku,
Tokyo
Sumida-ku,
Tokyo
Shinagawa-ku,
TokyoToshima-ku,
Tokyo
Taito-ku, Tokyo
Meguro-ku,
TokyoShinagawa-ku,
Tokyo
Koto-ku, Tokyo

Residential properties (Residence) – subtotal
O-001

Garden City Shinagawa Gotenyama

Shinagawa-ku,
Tokyo

O-002

Gotenyama SH Building

Shinagawa-ku,
Tokyo

O-003

Hommachi Minami Garden City

Osaka-shi, Osaka

O-004

Hommachi Garden City
(Office building portion)
HK Yodoyabashi Garden Avenue

December 3,
2014
May 24, 2016
May 24, 2017
December 3,
2014
December 3,
2014

Osaka-shi, Osaka

May 19, 2015

38,6008.8

Osaka-shi, Osaka
Nagoya-shi,
Hirokoji Garden Avenue
Aichi
Office buildings – subtotal
Hommachi Garden City
Osaka-shi, Osaka(Hotel portion)
Hotel – subtotal

May 24, 2016

4,400

1.0

May 24, 2016

6,350

1.4

183,550

41.6

17,2003.9

17,200

3.9

May 1, 2018

2,729

0.6

Retail property, etc. – subtotal

2,729

0.6

Commercial properties (office buildings + hotel + retail property, etc.) – subtotal

203,479

46.2

SHR’s portfolio (residential properties + commercial properties) – total

440,874

100.0

O-005
O-006

H-001

C-001

Hamamatsu Plaza

Hamamatsu-shi,
Shizuoka

May 24, 2017

Note 1:“Property number” is the number assigned by property after classifying the properties held by SHR, and the letters R, O, H and C referto residence, office, hotel and retail property, etc. respectively.

Note 2:“Acquisition price” refers to the sale and purchase price set forth in the sale and purchase agreement for each property (excluding
consumption tax and local consumption tax as well as commission and other various expenses; rounded down to the nearest millionyen). Since, however, the assets under management succeeded from SHI as a result of the Investment Corporation Merger will be

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

20

accounted by the purchase method in which SHR is the acquiring corporation and SHI is the acquired corporation and the appraisal
value obtained by SHR will be the actual amount received by SHR, the valuation based on the appraisal by real estate appraiser as ofApril 30, 2018, the time of valuation, are shown in the “Acquisition price” columns. The amounts of such values are rounded down to
the nearest million yen.
Note 3:“Investment ratio” shows the percentage of the acquisition price of each asset under management to the total acquisition price of theportfolio of SHR, which is rounded off to the first decimal place. Accordingly, the sum of the investment ratios of the respective
properties may differ from the figure shown in the “total” columns.

Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

21