February 23, 2018
Real Estate Investment Trust Securities Issuer
Sekisui House Reit, Inc.
Representative:
Junichi Inoue, Executive Director(Securities Code: 3309)
Asset Management Company
Sekisui House Investment Advisors, Ltd.
Representative:
Junichi Inoue,
President & Representative Director
Inquiries:
Atsuhiro Kida,
Director & General Manager
Management Division
TEL: +81-3-6447-4870 (main)
Notice Concerning Convocation of General Meeting of Unitholders Regarding the Approval of a Merger Agreement,
Partial Amendments of Articles of Incorporation, and Appointment of Directors
Sekisui House Reit, Inc. (“SHR”) hereby announces that it has resolved at the board of directors meeting held on
February 23, 2018 to submit proposals concerning the approval of a merger agreement, partial amendments to its
Articles of Incorporation, and appointment of directors at its Third General Meeting of Unitholders (“General
Meeting of Unitholders”) held on March 27, 2018.
The resolutions will take effect upon approval by the General Meeting of Unitholders. Details of the resolutions areprovided as follows.
1.

Approval of the Merger Agreement with Sekisui House Residential Investment Corporation

As stated in the “Notice Concerning Conclusion of a Merger Agreement between Sekisui House Reit, Inc. andSekisui House Residential Investment Corporation”, dated January 24, 2018, SHR agreed to implement anabsorption-type merger (the “Investment Corporation Merger”), with May 1, 2018 as the effective date, whereby
SHR will be the surviving corporation and Sekisui House Residential Investment Corporation (“SHI”) will be thedissolving corporation, and executed a merger agreement (the “Investment Corporation Merger Agreement”)
dated January 24, 2018.
All unitholders are requested to agree to the reasons to the Investment Corporation Merger Agreement and grant
their approval.
(For the details of the Investment Corporation Merger Agreement, please see the attached “Notice Concerning theThird General Meeting of Unitholders”)
2.

Partial amendments of the Articles of Incorporation

Reasons for amendments and overview of the proposals are as follows:(1) In conjunction with the Investment Corporation Merger, SHR plans to split its Investment Units at a ratioof 2-for-1 for the purpose of allocating one or more Investment Units to all SHI unitholders (“Investment
Unit Split”). The total number of issued investment units will increase in conjunction with the Investment
Unit Split, and accordingly, the total number of issuable investment units will be increased in advance(relating to Article 5, Paragraph 1 of the current Articles of Incorporation).

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

(2) With regard to the provision that a general meeting of unitholders shall be convened on a certain day andwithout delay thereafter, the terms of office of directors will change, and in order to adjust to the change
in the terms of office, the Articles of Incorporation shall be amended such that the provision to the effectthat a general meeting of unitholders of SHR shall be convened on July 1, 2018 and without delay
thereafter, and subsequently shall be convened on July 1 and without delay thereafter every two years
shall be amended to the effect that a general meeting of unitholders of SHR shall be convened on January 1,
2020 and without delay thereafter, and subsequently shall be convened on January 1 and without delay
thereafter every two years, and the necessary provisions relating to the record date for general meetingsof unitholders shall be changed (relating to Article 9, Paragraph 1 and Article 12, Paragraph 1 of thecurrent Articles of Incorporation).
(3) In conjunction with implementation of the Investment Corporation Merger, real estate used primarily as
residences (“Residential Properties”) shall be added to SHR’s core investment targets along with its
conventional targets of office buildings, retail properties, and hotels, and necessary provisions regarding
new geographical areas for investment in Residential Properties shall be added (relating to Article 31 andArticle 33, Paragraphs 1 to 3 of the current Articles of Incorporation and to Article 33, Paragraphs 3 and 5of the Proposed Amendments to the Articles of Incorporation).
(4) Some investments by SHI, which is the counterparty to the Investment Corporation Merger, include assetsthat are not investment targets of SHR; accordingly, in conjunction with the Investment Corporation
Merger, additions will be made to SHR’s target assets for investment (relating to Article 32, Paragraph 2 ofthe current Articles of Incorporation).
(5) The roles and responsibilities of the accounting auditor will increase, and considering that in conjunction
with the expanded scope of investment assets resulting from the Investment Corporation Merger, audit
work will also increase, the maximum accounting auditor remuneration amount will be adjusted from 20
million yen to 25 million yen to reflect an appropriate level (relating to Article 52 of the current Articles ofIncorporation).
(6) In conjunction with the Investment Corporation Merger, and for the purpose of implementation of theInvestment Corporation Merger, SHIA conducted investigation and valuation of SHI’s assets, negotiatedwith related persons, and performed other services; accordingly, provisions relating to the Management
Fee V (Merger Fee) shall be added to enable payment of appropriate consideration for SHIA’s services.
Further, it is expected that goodwill will arise in conjunction with the Investment Corporation Merger, andtherefore, necessary provisions will be added to clarify the handling of goodwill amortization and the likewhen calculating Management Fee I (Ongoing Operational and Management Fee I) and Management Fee
II (Ongoing Operational and Management Fee II).
Moreover, with regard to Management Fee II (Ongoing Operational and Management Fee II), in the casewhere SHR splits its investment units or implements a rights offering (gratis allocation of new investment
units to current unitholders through the exercise of investment unit acquisition rights), necessary
provisions will be added regarding calculation of Management Fee II (Ongoing Operational andManagement Fee II) to ensure that the impact on Management Fee II (Ongoing Operational andManagement Fee II) is neutral. It is expected that the planned Investment Unit Split will not have any
substantive effect in the calculation of Management Fee II (Ongoing Operational and Management Fee II)(relating to appendix to the current Articles of Incorporation).
(7) The amendments described in (1), (3), and (5) above will come into effect subject to the Investment
Corporation Merger coming into effect, and accordingly, a provision to that effect will be added as anappendix to the Articles of Incorporation (relating to Article 55 of the Proposed Amendments to the
Articles of Incorporation).

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

(8) In addition to the above, language shall be revised and wording shall be corrected to clarify the particularsof the provisions and article numbers shall be modified and other adjustments to the text shall be made.
(9) This Proposal is subject to approval of Proposal No. 1 “Approval of Merger Agreement with Sekisui House
Residential Investment Corporation” as set forth in the original draft.
(For the details of the Partial amendment of the Articles of Incorporation, please see the attached “NoticeConcerning the Third General Meeting of Unitholders”)
3.

Appointment of Directors(1) Because Executive Director Junichi Inoue requested to be allowed to temporarily resign as of April 30,
2018 for the purpose of adjustment of term of office, we request that he again be appointed as executive
director as of May 1, 2018.
(2) To be prepared for the case where the position of executive director is vacant or the case where there isan insufficient number of executive directors as specified under laws and regulations, we request that two
substitute executive directors (candidates: Osamu Minami and Nobuyoshi Sato) be appointed as of May 1,
2018.
(3) Because Supervisory Directors Shigeru Nomura and Tatsushi Omiya requested to be allowed to resign
temporarily as of April 30, 2018 for the purpose of adjustment of their terms of office, we request thatthey again be appointed as supervisory directors as of May 1, 2018.
(For the details of the Appointment of Directors, please see the attached “Notice Concerning the Third
General Meeting of Unitholders”)

4.

Schedule

February 23, 2018

The Board of Directors’ approval for resolutions to be submitted to the General Meeting ofUnitholders

March 12, 2018

Delivery of the Notice Concerning the Third General Meeting of Unitholders (scheduled)

March 27, 2018

General Meeting of Unitholders (scheduled)(Note) Following the approval of the proposals at the General Meeting of Unitholders, SHR will submit all documents as required by law<Attachment>
Notice Concerning the Third General Meeting of Unitholders* Sekisui House Reit, Inc. website: http://www.sekisuihouse-reit.co.jp/en/

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

Translation of Japanese Original(Securities Code: 3309)
March 12, 2018
To Our Unitholders
Junichi Inoue
Executive Director
Sekisui House Reit, Inc.
1-6-6 Motoakasaka, Minato-ku, Tokyo
Notice Concerning the Third General Meeting of Unitholders
You are cordially invited to attend the Third General Meeting of Unitholders of Sekisui House Reit, Inc. (“SHR”).
The Meeting will be held as described below.
If you are unable to attend the meeting, you can exercise your voting rights in writing. Please review the “Reference
Material for the General Meeting of Unitholders” mentioned below, vote on the proposals in the enclosed Voting
Rights Exercise Form, and return it by no later than Monday, March 26, 2018, 6:00 pm.
In addition, SHR established the provision of “deemed approval” in Article 17 of the current Articles ofIncorporation pursuant to Article 93 Paragraph1 of the Act on Investment Trusts and Investment Corporations.
Accordingly, if you are unable to attend the Meeting and are unable to vote using the Voting Rights Exercise Form,
please be aware that you will be deemed as having attended and approved each proposal.
Respectfully yours.
(Excerpt from SHR’s Current Articles of Incorporation)
Article 17 (Deemed Approval)
1. Unitholders who do not attend a general meeting of unitholders and do not exercise voting rights shall be deemed
approve the proposals for resolution submitted to the general meeting of unitholders (excluding any proposals
with purposes conflict with each other in cases where multiple proposals are submitted).
2. The number of voting rights of unitholders deemed to have voted in favor of the proposals for resolution pursuant
to the preceding paragraph will be included in the number of voting rights of unitholders present.

11. Date and Time
Tuesday, March 27, 2018, 2:00 p.m.
2. Place
6-1 Otemachi 2-chome, Chiyoda-ku, Tokyo
Asahi Seimei Otemachi building 27F
Otemachi Sunsky Room, Conference Room A
3. Proposal of the Meeting
Resolution Agenda:
Proposal No. 1: Approval of Merger Agreement with Sekisui House Residential Investment Corporation...................................................................................................................................... P.3
Proposal No. 2: Partial amendment of the Articles of Incorporation ...................................................... P.10
Proposal No. 3: Appointment of one executive director ......................................................................... P.22
Proposal No. 4: Appointment of two substitute executive directors ....................................................... P.23
Proposal No. 5: Appointment of two supervisory directors .................................................................... P.25
4. Voting Rights Exercise(1) Voting Rights Exercise through Attendance
Please present the enclosed Voting Rights Exercise Form at the reception desk.
(2) Voting Rights Exercise through Writing
For those voting in writing, please return the enclosed Voting Rights Exercise Form by no later than
Monday, March 26, 2018, 6:00 pm.
(3) Voting Rights Exercise through Proxy
For those voting by proxy, a unitholder can vote by having another individual unitholder who holds voting
rights attend the General Meeting of Unitholders and act as proxy. In that case, please submit a Power ofRepresentation Form and a Voting Rights Exercise Form at the reception desk.
(4) Method of Revising the Reference Materials of the General Meeting of Unitholders
When it is necessary to revise proposals contained in the Reference Materials of the General Meeting ofUnitholders by the day prior to the meeting, we will post the revisions on SHR’s website(http://www.sekisuihouse-reit.co.jp/en/).
End

Following the General Meeting of Unitholders, Sekisui House Investment Advisors, Ltd., SHR’s
asset management company, will hold an “Asset Management Briefing” at the same venue. Thoseattending the meeting are cordially invited to the briefing as well.

2

Reference Material for the General Meeting of Unitholders
Proposal and Reference Items
Proposal No. 1: Approval of Merger Agreement with Sekisui House Residential Investment Corporation
1.

2.
3.

Reason for absorption-type merger
SHR agreed to implement an absorption-type merger (the “Investment Corporation Merger”), with May 1,
2018 as the effective date, whereby SHR will be the surviving corporation and Sekisui House Residential
Investment Corporation (“SHI”, and collectively with SHR, the “Two Investment Corporations”) will be thedissolving corporation, and executed a merger agreement (the “Investment Corporation Merger Agreement”)
dated January 24, 2018.
The asset management companies of the Two Investment Corporations (the asset management company of
SHR is Sekisui House Investment Advisors, Ltd. (“SHIA”), and the asset management company of SHI is
Sekisui House Asset Management, Ltd. (“SHAM”), and collectively with SHIA, the “Two Asset Management
Companies”) are each wholly-owned subsidiaries of Sekisui House, Ltd. (“Sekisui House”), and receiving
support from the Sekisui House Group (comprised of Sekisui House and its consolidated subsidiaries and its
affiliates accounted for by the equity method) have each built track records in asset management.
The Two Investment Corporations have worked to expand their assets and secure stable returns by utilizing
their respective strengths with the aim of long-term enhancement of unitholder value. However, they reached
the conclusion that expanding the scale of their assets and increasing their market presence through a merger of
the Two Investment Corporations, and improving the opportunity for growth by utilizing the integrated
corporate strength of the Sekisui House Group, thereby securing strong returns and stability and growth of
distributions through the steady increase of assets under management, would be their best strategy for
maximizing unitholder value.
The Two Investment Corporations believe that their merger will have the following significance: (1)Creation of a highly stable diversified REIT having high quality residential properties and office buildings as itscore assets, (2) Increase of varied growth opportunities by utilizing the integrated corporate strength of the
Sekisui House Group, and (3) Greater market presence due to an increase in the scale of assets.
We believe that following the Investment Corporation Merger, the benefits from the merger will become
apparent in the greater stability of the investment unit price owing to an increase in distributions made possible
through internal and external growth and improved liquidity.
SHR will be the surviving corporation under an absorption-type merger and SHI will be dissolved in theInvestment Corporation Merger.
All unitholders are requested to agree to the reasons to the Investment Corporation Merger Agreement andgrant their approval.
Overview of the Investment Corporation Merger Agreement
As set forth in Attachment 1.
Summary of matters set forth in Article 194, Paragraph 1, Item (1) through Item (3) of the Regulation for the
Enforcement of the Act on Investment Trusts and Investment Corporations.
(1) Matters relating to the appropriateness of provisions relating to matters regarding the number of investment
units of the surviving corporation, or the method of calculation of the number of investment units of thesurviving corporation, to be allocated by the surviving corporation in the Investment Corporation Merger tounitholders of the dissolving corporation in exchange for investment units of the dissolving corporation
upon the absorption-type merger, the total capital of the surviving corporation, and allocation of investment
units of the surviving corporation to unitholders of the dissolving corporation(i) Matters regarding the appropriateness of the provisions relating to matters regarding the number ofinvestment units of the surviving corporation that the surviving corporation is to deliver to unitholdersof the dissolving corporation at the time of the absorption-type merger to replace their investment
units in the dissolving corporation or the method of calculating such number of investment units, andallocation of investment units of the surviving corporation to unitholders of the dissolving
corporation.

3

I.

Number of SHR investment units or amount of money to be allocated per SHI investment unit.
SHR(Surviving corporation in theabsorption-type merger)

SHI(Dissolving corporation in theabsorption-type merger)
1.65

Allocation of Investment units
under the Investment
Corporation Merger

Note 1:

Note 2:

Note 3:Note 4:1(Reference)
Prior to taking into
consideration the Investment
Unit Split
0.825

SHR plans to split one investment unit into two investment units with April 30, 2018 as the record date for splitting theinvestment units and May 1, 2018 as the effective date (the “Investment Unit Split”). The number of SHR investment units
to be issued as a result of the Investment Corporation Merger (the number of units after taking into account the Investment
Unit Split of SHR): 1,824,091 investment units
The allocation ratio shown above and the number of new investment units SHR will allocate and deliver are subject to theInvestment Unit Split taking effect. The merger ratio prior to taking into consideration the Investment Unit Split is SHI
0.825 to SHR 1; however, on the basis of that ratio, against 1 SHI investment unit, 0.825 SHR investment units would beallocated and delivered, and this would result in many SHI unitholders being allocated a fraction of less than one SHR
investment unit. Accordingly, in order to deliver to all SHI unitholders at least one SHR investment unit and make itpossible for them to continue holding SHR investment units after the Investment Corporation Merger, a split of theinvestment units will be carried out in the ratio of 2 investment units to 1 SHR investment unit, and for every 1 SHI
investment unit, 1.65 post-Investment Unit Split SHR investment units will be allocated and delivered.
As a result of allocating 1.65 SHR investment units to SHI unitholders for each SHI investment unit held, fractions of lessthan one investment unit will occur in the number of investment units that must be delivered. Those fractional units of lessthan one share will be sold through market transactions, and the proceeds from the sales will be delivered to the unitholders
allocated fractional shares in accordance with the fraction pursuant to the provisions of Article 88 of the Act on Investment
Trusts and Investment Corporations (Act No. 198 of 1951, including subsequent amendments, the “Investment Trusts Act”).
In addition to the abovementioned investment units, SHR intends to pay SHI unitholders (the unitholders stated or recordedin the final unitholders register on the day prior to the effective date of the Investment Corporation Merger (excluding the
SHI unitholders who demanded the purchase of their investment units pursuant to the provisions of Article 149-3 of theInvestment Trusts Act (excluding those unitholders who retracted such purchase demand) hereinafter referred to as the“Unitholders Subject to Allocation”)), or the registered pledgees of investment units held in lieu of the cash distributions forthe business period of SHI’s final term, a merger consideration in the form of cash distribution (based on SHI’s distributable
income for that same period in an amount (dropping any fractions of a yen) which is the quotient resulting from dividing theamount of SHI’s distributable income on the date prior to the effective date of the merger by the number of issued SHI
investment units on that date reduced by the number of investment units held by unitholders other than the Unitholders
Subject to Allocation) within a reasonable period from the effective date of the Investment Corporation Merger.

II.

Basis for the Calculation
SHR has appointed Nomura Securities Co., Ltd. (“Nomura Securities”), and SHI has
appointed Mizuho Securities Co., Ltd. (“Mizuho Securities”), respectively, as their financial
advisors for the Investment Corporation Merger and requested them to calculate the merger
ratio.
The summaries of the calculations made by Nomura Securities and Mizuho Securities
each indicate figures prior to taking into account the Investment Unit Split by SHR under theInvestment Corporation Merger above.
Because the investment units of the Two Investment Corporations are both listed on theTokyo Stock Exchange and there is a market price for the units, Nomura Securities usedaverage market investment unit price analysis, and because there are multiple companies
comparable to each of the Two Investment Corporations and an analogical estimate based oncomparable investment corporations is possible, it also used a comparable investment
corporation analysis; in order to reflect the state of future business operations in thecalculations, Nomura Securities made a discounted cash flow analysis (“DCF Analysis”), andin order to also reflect in its estimations the amount of the impact of fair value and realizablevalue on net assets, it also used the adjusted net asset method in its calculations. A summary of
Nomura Securities’ calculations is shown below. The range of values for the merger ratio
shown indicates the range of estimates for SHI when the value for one SHR investment unit isconsidered to be 1.

4

In its average market investment unit price analysis, Nomura Securities used the simple
arithmetic average of the closing prices on the calculation base date, which was set as January
23, 2018, the five business days preceding the calculation base date, the one-month period
preceding the calculation base date, the three-month period preceding the calculation base date,
and the six-month period preceding the calculation base date. For details in the supplemental
explanation regarding the assumptions and disclaimers of Nomura Securities’ analysis, pleaserefer to Note 1 at the end of this section.
In the future profit plans of the Two Investment Corporations, which formed the bases for
Nomura Securities’ DCF analysis, there were no fiscal periods in which major changes in
profits were projected.
Valuation Method

Range of Merger Ratio

Average Market Investment Unit Price Analysis

0.850 ～ 0.859

Comparable Investment Corporation Analysis

0.801 ～ 1.006

DCF Analysis

0.785 ～ 0.846

Adjusted Net Asset Method

0.780

In performing its analysis, Mizuho Securities reviewed the financial information of theTwo Investment Corporations, in addition to reviewing the terms and conditions of theInvestment Corporation Merger. Because the investment units of the Two Investment
Corporations are listed on the Tokyo Stock Exchange and market investment unit prices are
publicly available, Mizuho Securities used a market investment unit price analysis, andbecause there are multiple listed investment corporations that are comparable to each of theTwo Investment Corporations and an analysis based on comparable investment corporations is
possible, it also conducted a comparable investment corporation analysis; in addition Mizuho
Securities conducted the dividend discount model as a method of analysis (“DDM Analysis”)
of the investment unit value based on dividends that unitholders of the Two Investment
Corporations could be expected to receive in the future, and for the purpose of reflecting themarket value of assets held by each corporation, also used the adjusted net asset value
approach.
The calculated ranges of the merger ratio shown below are the range of the number of
SHR investment units to be allocated for each investment unit of SHI. In performing theinvestment unit price analysis, Mizuho Securities adopted January 23, 2018 as the reference
date and reviewed the closing investment unit price on the reference date and the average ofthe closing investment unit prices during most recent week, the most recent month, the mostrecent three months and the most recent six months, each ending on the reference date
For details in the supplemental explanation regarding the assumptions and disclaimers ofMizuho Securities’ analysis, please refer to Note 2 at the end of this section.
In the future profit plans of the Two Investment Corporations which formed the bases for
Mizuho Securities’ DDM Analysis, there were no fiscal periods in which significant changes in
profits were projected.

Note 1:

Valuation Method

Range of Merger Ratio

Investment Unit Price Analysis

0.850 ～ 0.859

Comparable Investment Corporation Analysis

0.804 ～ 0.968

Dividend Discount Model

0.539 ～ 0.988

Adjusted Net Asset Value Approach

0.781

Nomura Securities, in calculating the merger ratio, in general used information received from the Two Investment
Corporations and publicly disclosed information and, assuming those materials and information, etc. all to be accurate andcomplete, did not independently verify their accuracy and completeness. Nomura Securities also did not independently
assess, appraise or inspect the assets and liabilities (including assets and liabilities off the book and other contingent
liabilities) of the Two Investment Corporations, nor did it request a third party to do so. In addition, Nomura Securities
assumed that the financial forecasts (including profit plans and other information) provided by the Two Investment

5Corporations were reasonably prepared by their respective managements on the basis of the best estimates and judgments
available at the time such forecasts were provided.
In analyzing merger ratio, Mizuho Securities relied upon and assumed the accuracy and completeness of financial conditionor other information relating to the Two Investment Corporations that was publicly available or was furnished to or
discussed with Mizuho Securities by the Two Investment Corporations and upon which the analysis of Mizuho Securities isbased. Mizuho Securities did not independently verify (nor assume responsibility or liability for independently verifying)
any such information or its accuracy or completeness. The contents expressed in Mizuho Securities’ a written merger ratio
calculation report could potentially differ if there are matters that would make the information provided to Mizuho Securities
or discussed between Mizuho Securities and the corporations materially incorrect, or if there is a fact or circumstance notdisclosed at the time of delivery of a written merger ratio calculation report, or which occurs subsequent to delivery of awritten merger ratio calculation report (including facts which potentially existed at the time a written merger ratio
calculation report was delivered but became apparent subsequently). Mizuho Securities assumed that the executive directorsof each corporation are unaware of any fact that would make the information provided to or discussed with Mizuho
Securities incomplete or misleading. In addition, Mizuho Securities did not conduct an independent valuation or appraisal of
any assets or liabilities (including derivatives, off-balance sheet assets and liabilities and other contingent liabilities), or the
reserves of either corporation, and Mizuho Securities was not independently provided with, nor did Mizuho Securities makeany request to a third party for, any such valuation or appraisal. Mizuho Securities did not assume any obligation to conduct
any inspection of the properties or facilities of either corporation, nor did Mizuho Securities evaluate the capitalization,
solvency or fair value of either corporation under any law relating to bankruptcy, insolvency or similar matters.
With respect to any information Mizuho Securities requested in connection with analysis of merger ratio that was notprovided or disclosed to Mizuho Securities by the corporations, or could not otherwise be used by Mizuho Securities as abasis of Mizuho Securities’ evaluation, Mizuho Securities used assumptions it believed to be reasonable and appropriate,and Mizuho Securities did not verify the effect on either corporation’s future financial condition in the event that suchassumptions prove to be materially inaccurate.
With respect to the financial forecasts and other forward-looking information provided to Mizuho Securities, Mizuho
Securities assumed that such information was reasonably prepared by the executive directors of each corporation on a basis
reflecting the best currently available estimates and judgments of executive directors as to the expected future results ofoperations and financial conditions of the corporations. Mizuho Securities relied on the assumptions and financial
projections and the business forecast without independent verification of the feasibility of such assumptions and forecasts,
and Mizuho Securities expressed no view as to any analyses or forecasts referred to in its analysis or the assumptions on
which they are based. Mizuho Securities is not a legal, regulatory, or tax expert and therefore relied on the assessments madeby advisors to the corporations with respect to such issues. Mizuho Securities further assumed that the Merger will qualify as
a tax-free reorganization for Japanese corporate tax purposes.
The financial analysis results Mizuho Securities have provided to SHI in response to the request of SHI are for the sole
purpose of assisting the board of directors of SHI to determine the merger ratio, and such financial analysis results are notfor the purpose of expressing Mizuho Securities’ opinion as to fairness on the merger ratio.

Note 2:

III.

IV.

V.

Background to the Calculations
As a result of discussions and negotiations over an extended period comprehensively
taking into consideration such factors as the financial performance and state of the assets andliabilities of each of the Two Investment Corporations, their future business prospects, themerits of the Investment Corporation Merger and the results of the analyses performed by theirrespective financial advisors, the Two Investment Corporations, having determined that theabove merger ratios are appropriate, concluded the Investment Corporation Merger Agreement.
Relationships with the Institutions Which Performed the Calculations
Neither Nomura Securities nor Mizuho Securities fall under a related party of the Two
Investment Corporations as defined in Article 67, paragraph 4 of the Ordinance on Accounting
at Investment Corporations (Cabinet Office Ordinance No. 47 of 2006, as amended) andneither has any material interests that must be indicated with respect to the Investment
Corporation Merger.
Measures to Ensure Fairness
i. The propriety of the Investment Corporation Merger and measures to ensure fairness in theprocess of consideration of the merger ratio
In the course of their consideration of the Investment Corporation Merger, the Two
Investment Corporations reported on a timely basis the status of their considerations to theboard of directors of each of the investment corporations, with each board being composedof the investment corporation’s executive director and two supervisory directors, whose
independence from the asset management companies is ensured in terms of the Investment
Trusts Act, and all material matters of their considerations were deliberated and approvedby their respective board of directors.
In addition, SHR appointed Anderson Mori & Tomotsune, and SHI appointed Ito andMitomi Law Office as their respective legal advisors for the Investment Corporation
6

Merger, and they each received advice concerning the methodology and process relating to
the procedures and decision-making process for the Investment Corporation Merger.
ii. Measures to ensure fairness in the calculation of the merger ratio
As discussed in I through III above, each of the Two Investment Corporations
requested its respective financial advisor to perform a financial analysis in regard to themerger ratio and the merger ratio was determined by comprehensively taking into accountthe results of such analyses together with other factors.
SHR, in order to ensure the fairness of the Investment Corporation Merger and for the
benefit of its shareholders, obtained from Nomura Securities, an independent third-party
financial advisor, a written merger ratio calculation report providing an analysis from afinancial perspective based on certain assumptions in regard to the allocation under theInvestment Corporation Merger.
On the basis of the foregoing, SHR’s board of directors concluded that sufficient steps
had been taken to ensure the fairness of the Investment Corporation Merger.
SHI, for its part, in order to ensure the fairness of the Investment Corporation Merger
and for the benefit of its shareholders, obtained from Mizuho Securities, an independent
third-party financial advisor, a written merger ratio calculation report providing ananalysis from a financial perspective based on certain assumptions in regard to theallocation under the Investment Corporation Merger.
On the basis of the foregoing, SHI’s board of directors concluded that sufficient steps
had been taken to ensure the fairness of the Investment Corporation Merger.
The Two Investment Corporations did not, however, obtain written opinions (socalled “fairness opinions”) from their respective financial advisors to the effect that themerger ratio is reasonable from a financial perspective for their respective unitholders.
iii. Engagement of an independent advisor
SHI, in order to receive advice when considering the Investment Corporation Merger,
as well as other support for the implementation of the Investment Corporation Merger, in
addition to the independent third-party financial advisor mentioned in ii. above, fromwhich it requested the calculation of the merger ratio, also engaged SMBC Nikko
Securities Inc. (“SMBC Nikko Securities”) as an independent advisor. SHI did not,however, obtain a written merger ratio calculation report or a fairness opinion from SMBC
Nikko Securities.
(ii) Matters Relating to Total Unitholders’ Capital of Surviving Corporation
SHR’s total unitholders’ capital and capital surplus to be added upon the Investment Corporation
Merger will be as follows; provided, however, that SHR and SHI can consult and reach an agreement,
taking into account SHR’s and SHI’s asset condition on the day preceding the Effective Date, andchange such amounts:
I.
Total unitholders’ capital: 0 yen
II.
Capital surplus: The amount of change in unitholders’ equity, etc. specified in Article 22,
Paragraph 1 of the Regulations on Accounting of Investment Corporations(Cabinet Office Ordinance No. 47 of 2006, as amended), less the amountspecified in the preceding item.
(2) Matters regarding the dissolving corporation(i) Financial Statements, Management Discussion and Analysis, and Statement of Cash Distributions for
SHI’s latest Fiscal Period
As set forth in Attachment 2.
(ii) Material impact of the disposal of material assets, assumption of material obligations, and otherevents on SHI’s financial condition, if occurred, after the last day of the latest Fiscal Period.
I.
In order to provide for the effective management of the assets held by the surviving
corporation, as of January 24, 2018 the Two Asset Management Companies have executed anabsorption-type merger (the “Asset Management Company Merger”) with May 1, 2018 as the

7

II.

III.

effective date, subject to the Investment Corporation Merger taking effect, whereby SHIA willbe the surviving company and SHAM will be the dissolving company in the merger.
In addition, SHI will put before a general meeting of its unitholders, which is scheduled to beheld on March 27, 2018, a proposal for an amendment of its articles of incorporation with aview to changing its accounting periods from the current March 31 and September 30 to April
30 and October 31. If the aforementioned amendment is approved in the general meeting of theunitholders, the last period before the effective date of the Investment Corporation Merger is
expected to be a seven-month business period from October 1, 2017 to April 30, 2018.
On January 24, 2018, SHI executed a sale and purchase agreement with Sekisui House
regarding acquisition of trust beneficiary interests relating to six residential properties (Prime
Maison Shirokanedai Tower, Prime Maison Otsuka, Prime Maison Asakusabashi, Prime
Maison Daikanyama, Prime Maison Gotenyama West, and Esty Maison Toyosu
Residence(Note)) from Sekisui House with May 1, 2018, the day that the Investment Corporation
Merger will take effect, as the acquisition date. It is planned that after the Investment
Corporation Merger takes effect, SHR will assume from SHI its status as purchaser and all its
rights and duties under the sale and purchase agreement, and execute the acquisition
immediately thereafter. The sale and purchase agreement does not make the Investment
Corporation Merger taking effect a suspensive condition for acquisition of the assets by SHI,
but the agreement does provide that in the case where the Investment Corporation Merger does
not take place, SHI and Sekisui House will consult in good faith regarding how to proceed.
Note: The property name of the “Esty Maison Toyosu Residence” is “Toyosu Residence” as of today, but after its
acquisition, 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 its changed property name has been stated.

IV.

On January 24, 2018, SHI executed with the respective transferees sale and purchaseagreements regarding the transfer of trust beneficiary interests relating to twelve residential
properties (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) to multiple domestic limited
liability companies with May 1, 2018 as the planned transfer date. It is planned that after theInvestment Corporation Merger takes effect, SHR will assume from SHI its status as seller andall rights and duties under the sale and purchase agreement, and execute the acquisition
immediately thereafter. The sale and purchase agreement does not make the Investment
Corporation Merger taking effect a suspensive condition for transfer of the assets by SHI.
(3) Matters regarding the surviving corporation(i) Material impact of the disposal of material assets, assumption of material obligations, and otherevents on SHR’s financial condition, if occurred, after the last day of the latest Fiscal Period.
I.
In order to provide for the effective management of the assets held by the surviving
corporation, as of January 24, 2018 the Two Asset Management Companies have executed theAsset Management Company Merger with May 1, 2018 as the effective date, subject to theInvestment Corporation Merger taking effect, whereby SHIA will be the surviving company
and SHAM will be the dissolving company in the merger.
II.
SHR hereby announces that it resolved to split its investment units as follows (the “Investment
Unit Split”)
i
Purpose of the Investment Unit Split
The Investment Corporation Merger will be carried out through an absorption-typemerger having SHR as the surviving corporation, and the merger ratio, before considering
the Investment Unit Split, would be SHR 1: SHI 0.825. However, based on this merger
ratio, 0.825 units of SHR would be allotted to every unit of SHI, which would mean that a
number of SHI unitholders would receive less than one SHR unit. For this reason, in orderto enable SHI unitholders to continue holding SHR units even after the Investment
Corporation Merger, for the purpose of issuing 1 SHR unit or more to all SHI unitholders,
it was decided that the SHR units will be split 2-for-1. As a result of the Investment Unit

8

4.

Split, SHI unitholders will receive 1.65 units of SHR following the Investment Unit Splitfor every SHI unit they own.
ii Details of the Investment Unit Split
SHR units owned by the SHR unitholders set forth or recorded in the final unitholder
roster on April 30, 2018 (the day before the effective date of the Investment Corporation
Merger) will be split 2-for-1. The Investment Unit Split shall come into effect on May 1,
2018 (the effective date of the Investment Corporation Merger), provided that it is on thecondition that the Investment Corporation Merger Agreement is not terminated.
This Proposal is subject to approval of Proposal No. 2 “Partial amendment of the Articles of Incorporation” as
set forth in the original draft.

9

Proposal No. 2: Partial amendments of the Articles of Incorporation
1.

Reasons for the amendments and overview of the proposals(1) In conjunction with the Investment Corporation Merger, SHR plans to split its Investment Units at a ratio of
2-for-1 for the purpose of allocating one or more Investment Units to all SHI unitholders (“Investment Unit
Split”). The total number of issued investment units will increase in conjunction with the Investment Unit
Split, and accordingly, the total number of issuable investment units will be increased in advance (relating
to Article 5, Paragraph 1 of the current Articles of Incorporation).
(2) With regard to the provision that a general meeting of unitholders shall be convened on a certain day andwithout delay thereafter, the terms of office of directors will change, and in order to adjust to the change inthe terms of office, the Articles of Incorporation shall be amended such that the provision to the effect that ageneral meeting of unitholders of SHR shall be convened on July 1, 2018 and without delay thereafter, andsubsequently shall be convened on July 1 and without delay thereafter every two years shall be amended tothe effect that a general meeting of unitholders of SHR shall be convened on January 1, 2020 and without
delay thereafter, and subsequently shall be convened on January 1 and without delay thereafter every two
years, and the necessary provisions relating to the record date for general meetings of unitholders shall bechanged (relating to Article 9, Paragraph 1 and Article 12, Paragraph 1 of the current Articles ofIncorporation).
(3) In conjunction with implementation of the Investment Corporation Merger, real estate used primarily as
residences (“Residential Properties”) shall be added to SHR’s core investment targets along with its
conventional targets of office buildings, retail properties, and hotels, and necessary provisions regarding
new geographical areas for investment in Residential Properties shall be added (relating to Article 31 andArticle 33, Paragraphs 1 to 3 of the current Articles of Incorporation and to Article 33, Paragraphs 3 and 5of the Proposed Amendments to the Articles of Incorporation).
(4) Some investments by SHI, which is the counterparty to the Investment Corporation Merger, include assetsthat are not investment targets of SHR; accordingly, in conjunction with the Investment Corporation
Merger, additions will be made to SHR’s target assets for investment (relating to Article 32, Paragraph 2 ofthe current Articles of Incorporation).
(5) The roles and responsibilities of the accounting auditor will increase, and considering that in conjunction
with the expanded scope of investment assets resulting from the Investment Corporation Merger, audit
work will also increase, the maximum accounting auditor remuneration amount will be adjusted from 20
million yen to 25 million yen to reflect an appropriate level (relating to Article 52 of the current Articles ofIncorporation).
(6) In conjunction with the Investment Corporation Merger, and for the purpose of implementation of theInvestment Corporation Merger, SHIA conducted investigation and valuation of SHI’s assets, negotiatedwith related persons, and performed other services; accordingly, provisions relating to the Management Fee
V (Merger Fee) shall be added to enable payment of appropriate consideration for SHIA’s services.
Further, it is expected that goodwill will arise in conjunction with the Investment Corporation Merger,
and therefore, necessary provisions will be added to clarify the handling of goodwill amortization and thelike when calculating Management Fee I (Ongoing Operational and Management Fee I) and Management
Fee II (Ongoing Operational and Management Fee II).
Moreover, with regard to Management Fee II (Ongoing Operational and Management Fee II), in thecase where SHR splits its investment units or implements a rights offering (gratis allocation of new
investment units to current unitholders through the exercise of investment unit acquisition rights),
necessary provisions will be added regarding calculation of Management Fee II (Ongoing Operational andManagement Fee II) to ensure that the impact on Management Fee II (Ongoing Operational andManagement Fee II) is neutral. It is expected that the planned Investment Unit Split will not have any
substantive effect in the calculation of Management Fee II (Ongoing Operational and Management Fee II)(relating to appendix to the current Articles of Incorporation).
(7) The amendments described in (1), (3), and (5) above will come into effect subject to the Investment
Corporation Merger coming into effect, and accordingly, a provision to that effect will be added as anappendix to the Articles of Incorporation (relating to Article 55 of the Proposed Amendments to the Articles
of Incorporation).
10(8) In addition to the above, language shall be revised and wording shall be corrected to clarify the particularsof the provisions and article numbers shall be modified and other adjustments to the text shall be made.
(9) This Proposal is subject to approval of Proposal No. 1 “Approval of Merger Agreement with Sekisui House
Residential Investment Corporation” as set forth in the original draft.
2. Overview of Amendments
The Amendments are as follows:
Proposed Amendments to the Articles of Incorporation(Proposed amendments are underlined.)
Current Articles of Incorporation
Proposed Amendments
Article 5 Total Number of Issuable Investment Units, Article 5 Total Number of Issuable Investment Units,
Etc.
Etc.
1. The total number of issuable investment units for
the Investment Corporation is ten million(10,000,000) units.
2. - 3. (omitted)

1. The total number of issuable investment units for
the Investment Corporation is twenty million(20,000,000) units.
2. - 3. (unchanged)

Article 9 General Meeting of Unitholders

Article 9 General Meeting of Unitholders

1. A general meeting of unitholders of the Investment
Corporation shall be held within the 23 wards ofTokyo, and shall be convened on July 1, 2018 andonwards without delay, and subsequently beconvened on July 1 and onwards every two years
without delay. In addition, the general meetings ofunitholders may be held from time to time when it
is necessary.
2. (omitted)

1. A general meeting of unitholders of the Investment
Corporation shall be held within the 23 wards ofTokyo, and shall be convened on January 1, 2020and onwards without delay, and subsequently beconvened on January 1 every two years andonwards without delay. In addition, the general
meetings of unitholders may be held from time totime when it is necessary.
2. (unchanged)

Article 12 Record Date

Article 12 Record Date

1. If the Investment Corporation convenes a general
meeting of unitholders pursuant to the first sentenceof Paragraph 1 of Article 9, the Investment
Corporation shall deem the unitholders recorded orregistered in the final register of unitholders as ofthe end of April in 2018 and subsequently as of theend of April in every two years to be theunitholders who are entitled to exercise their rights
at such general meeting of unitholders. In addition
to such case, if a general meeting of unitholders is
to be held on a day within three months after theimmediately preceding Accounting Settlement Day(as defined in Article 45; the same shall apply
hereinafter), the Investment Corporation shall deemthe unitholders recorded or registered in the final
register of unitholders for such Accounting
Settlement Day to be the unitholders who areentitled to exercise their rights at such general
meeting of unitholders.
2. (omitted)

1. If the Investment Corporation convenes a general
meeting of unitholders pursuant to the first sentenceof Paragraph 1 of Article 9, the Investment
Corporation shall deem the unitholders recorded orregistered in the final register of unitholders as ofthe end of October in 2019 and subsequently as ofthe end of October in every two years to be theunitholders who are entitled to exercise their rights
at such general meeting of unitholders. In addition
to such case, if a general meeting of unitholders is
to be held on a day within three months after theimmediately preceding Accounting Settlement Day(as defined in Article 45; the same shall apply
hereinafter), the Investment Corporation shall deemthe unitholders recorded or registered in the final
register of unitholders for such Accounting
Settlement Day to be the unitholders who areentitled to exercise their rights at such general
meeting of unitholders.
2. (unchanged)

Article 31 Basic Policy of Asset Management

Article 31 Basic Policy of Asset Management

11Current Articles of Incorporation
The Investment Corporation shall manage its assets byinvesting continuously and principally in Real Estates
and Other Assets (as defined in Paragraph 1 of Article
32). The purpose of the Investment Corporation is toachieve mutual growth and prosperity together with all
stakeholders such as unitholders and tenant companies,
aiming at providing high-quality social capital andmaximizing unitholder value through asset
management that pursues stable earnings over the
medium to long term and steady growth in theManaged Assets.

Proposed Amendments
The Investment Corporation shall manage its assets byinvesting continuously and principally in Real Estates
and Other Assets (as defined in Paragraph 1 of Article
32). The purpose of the Investment Corporation is toachieve mutual growth and prosperity together with all
stakeholders such as unitholders and tenants, aiming at
providing high-quality social capital and maximizing
unitholder value through asset management that
pursues stable earnings over the medium to long termand steady growth in the Managed Assets.

Article 32 Categories, Purpose and Scope of Target
Assets of Asset Management

Article 32

1. (omitted)
2. Besides the Real Estates and Other Assets, theInvestment Corporation may invest in the following
Specified Assets:(Add)

1. (unchanged)
2. Besides the Real Estates and Other Assets, theInvestment Corporation may invest in the following
Specified Assets:(a) Trust beneficiary rights in trust of real estate,real estate lease rights or surface rights(including comprehensive trust beneficiary rights
in trust of the same together with money
associated with the real estates, and also
including trust beneficiary rights in trust of such
trust beneficiary rights, but excluding thosefalling under the Real Estates and Other Assets);(b) (unchanged)(c) Equity interests in an agreement where one
party makes a financial contribution to anotherparty to manage the Real Estates and Other
Assets or the assets listed in the Items (a) and (b),and the other party manages that contribution
principally as an investment in those assets anddistributes profits from such management(“Equity Interests in Silent Partnership on Real
Estate”)(d) (unchanged)(e) Real estate, real estate lease rights or surface
rights under the laws and regulations of a foreigncounty, or trust beneficiary rights in trust of only
real estate, real estate lease rights or surface
rights or the assets listed in Items (a) to (d)established under the laws and regulations of aforeign country(f) Preferred equity securities (as set forth in the
Act on Securitization of Assets (Law No. 105 of
1998, as amended) (the “Asset SecuritizationAct”) (limited to those the purpose of which is toinvest the amount exceeding the half of the assets
in the Real Estates and Other Assets or the assets
listed in Items (a) to (e) (the “Real Estate-Related
Assets”))(g) (unchanged)(h) (unchanged)(a) (omitted)(b) Equity interests in an agreement where one
party makes a financial contribution to anotherparty to manage the Real Estates and Other
Assets or the assets listed in the preceding item,
and the other party manages that contribution
principally as an investment in those assets anddistributes profits from such management(“Equity Interests in Silent Partnership on Real
Estate”)(c) (omitted)(d) Real estate, real estate lease rights or surface
rights under the laws and regulations of a foreigncounty, or trust beneficiary rights in trust of realestate, real estate lease rights or surface rights or
the assets listed in Items (a) to (c) establishedunder the laws and regulations of a foreigncountry(e) Preferred equity securities (as set forth in the
Act on Securitization of Assets (Law No. 105 of
1998, as amended) (the “Asset SecuritizationAct”) (limited to those the purpose of which is toinvest the amount exceeding the half of the assets
in the Real Estates and Other Assets or the assets
listed in Items (a) to (d) (the “Real EstateRelated Assets”))(f) (omitted)(g) (omitted)
12

Categories, Purpose and Scope of Target
Assets of Asset Management

Current Articles of Incorporation(h) Beneficiary certificates of a specified purpose
trust (as set forth in the Asset Securitization Act)(excluding the Real Estates and Other Assets, theassets falling under Item (a) or (c) and the assets
listed in Item (d) which are to be invested in theReal Estates and Other Assets or the assets listed
in Item (a) or (b)) (limited to those the purpose ofwhich is to invest the amount exceeding the halfof the assets in the Real Estate-Related Assets);(i) Assets of the same nature as those listed in Item(e) or (h) established under the laws andregulations of a foreign country (limited to thosethe purpose of which is to invest the amountexceeding the half of the assets in the Real
Estate-Related Assets)(j) (omitted)(k) (omitted)(l) Monetary claims (excluding the assets listed in
Item (j) or (k))(m) (omitted)(n) (omitted)(o) (omitted)(p) (omitted)(q) (omitted)(r) (omitted)(s) Beneficiary certificates of a bond investment
trust (which are beneficiary certificates of asecurities investment trust as set forth in theInvestment Trusts Act which are intended to be
managed as an investment in the assets, etc.
listed in Item (m), (n), (q), (u) or (v))(t) (omitted)(u) (omitted)(v) (omitted)(w) Trust beneficiary rights in monetary trusts, thepurpose of which is to manage the trust assets asinvestment in the assets as set forth in Items (j) to(v)(x) (omitted)(y) (omitted)(z) (omitted)
3. In addition to the Specified Assets as set forth inParagraphs 1 and 2 above, the Investment
Corporation may invest in the following assets:(a) - (c) (omitted)(d) Movables as set forth in the Civil Code (ActNo. 89 of 1896, as amended) (the “Civil Code”),such as facilities, equipment, and other items
attached to the Real Estate-Related Assets(excluding those set forth in Item (z) of
Paragraph 2 of Article 32)(e) - (n) (omitted)
4. (omitted)

13

Proposed Amendments(i) Beneficiary certificates of a specified purpose
trust (as set forth in the Asset Securitization Act)(excluding the Real Estates and Other Assets, theassets falling under Item (a), (b) or (d) and theassets listed in Item (e) which are to be invested
in the Real Estates and Other Assets or the assets
listed in Item (a), (b) or (c)) (limited to those thepurpose of which is to invest the amountexceeding the half of the assets in the Real
Estate-Related Assets)(j) Assets of the same nature as those listed in Item(f) or (i) established under the laws andregulations of a foreign country (limited to thosethe purpose of which is to invest the amountexceeding the half of the assets in the Real
Estate-Related Assets)(k) (unchanged)(l) (unchanged)(m) Monetary claims (excluding the assets listed in
Item (k) or (l))(n) (unchanged)(o) (unchanged)(p) (unchanged)(q) (unchanged)(r) (unchanged)(s) (unchanged)(t) Beneficiary certificates of a bond investment
trust (which are beneficiary certificates of asecurities investment trust as set forth in theInvestment Trusts Act which are intended to be
managed as an investment in the assets, etc.
listed in Item (n), (o), (r), (v) or (w))(u) (unchanged)(v) (unchanged)(w) (unchanged)(x) Trust beneficiary rights in monetary trusts, thepurpose of which is to manage the trust assets asinvestment in the assets as set forth in Items (k)to (w)(y) (unchanged)(z) (unchanged)(aa) (unchanged)
3. In addition to the Specified Assets as set forth inParagraphs 1 and 2 above, the Investment
Corporation may invest in the following assets:(a)- (c) (unchanged)(d) Movables as set forth in the Civil Code (Act No.
89 of 1896, as amended) (the “Civil Code”), suchas facilities, equipment, and other items attachedto the Real Estate-Related Assets (excluding
those set forth in Item (aa) of Paragraph 2 ofArticle 32)(e) - (n) (unchanged)
4. (unchanged)

Current Articles of Incorporation

Proposed Amendments

Article 33 Investment Policy

Article 33 Investment Policy

1. The Investment Corporation shall position nonresidential, business purpose real estates that areused mainly as office buildings, retail properties orhotels, etc. (the “Commercial Properties”) as its
central investment target.
2. The investment area of the Commercial Properties
shall be mainly in Japan but the Investment
Corporation may invest overseas.

1.

The Investment Corporation shall position realestates mainly for residential use (the “Residential
Properties”) and non-residential, business purpose
real estates that are used mainly as officebuildings, hotels and retail properties, etc. (the“Commercial Properties”) as its primary
investment target.
2. The investment area of the Residential Properties
and the Commercial Properties shall be mainly inJapan but the Investment Corporation may invest
overseas.
3. The main geographical areas for investment of the
Residential Properties in Japan shall be Greater
Tokyo and major cities in Japan other than Greater
Tokyo such as the ordinance-designated cities, andcommuting areas around them..
4. The main geographical areas for investment of theCommercial Properties in Japan shall be the Three
Major Metropolitan Areas (which collectively
refers to Greater Tokyo, Osaka Area and NagoyaArea) centering on the 23 wards of Tokyo, Osaka
City and Nagoya City and major cities in Japanother than the Three Major Metropolitan Areas.
5. The main geographical areas for investment of theoverseas Residential Properties and Commercial
Properties are Singapore, Australia and the U.S., aswell as other countries and regions where thepopulation and economy are expected to grow.

(Add)
3. The main geographical areas for investment of theCommercial Properties in Japan shall be the Three
Major Metropolitan Areas (which collectively
refers to Greater Tokyo, Osaka Area and NagoyaArea) centering on the 23 wards of Tokyo, Osaka
City and Nagoya City. The main geographicalareas for investment of the overseas Commercial
Properties are Singapore, Australia and the U.S., aswell as other countries and regions where thepopulation and economy are expected to grow.
(Add)

Article 34 Investment Restrictions

Article 34 Investment Restrictions

1. (omitted)
2. The Investment Corporation shall makeinvestments in the rights related to derivatives
transactions as set forth in Item (y) of Paragraph 2
of Article 32 only for the purpose of hedging
exchange risk, price fluctuation risk, interest raterisk and other risk factors arising from the Managed
Assets or liabilities of the Investment Corporation.
3. (omitted)

1. (unchanged)
2. The Investment Corporation shall makeinvestments in the rights related to derivatives
transactions as set forth in Item (z) of Paragraph 2
of Article 32 only for the purpose of hedging
exchange risk, price fluctuation risk, interest raterisk and other risk factors arising from the Managed
Assets or liabilities of the Investment Corporation.
3. (unchanged)

Article 39 Method of and Standards for Asset
Evaluation

Article 39 Method of and Standards for Asset
Evaluation

The method of and standards for asset evaluation of theInvestment Corporation shall be determined by thetype of the Managed Asset, and shall be as follows as a
general rule.
(a) Real estate, real estate lease rights andsurface rights of the Real Estates and Other
Assets as set forth in Paragraph 1 of Article
32; and those under the laws and

The method of and standards for asset evaluation of theInvestment Corporation shall be determined by the typeof the Managed Asset, and shall be as follows as a
general rule.
(a) Real estate, real estate lease rights andsurface rights of the Real Estates and Other
Assets as set forth in Paragraph 1 of Article
32; and those under the laws and14

Current Articles of Incorporation
regulations of a foreign country as set forthin Item (d) of Paragraph 2 of Article 32:(omitted)(b) Trust beneficiary rights in trust of realestate, real estate lease rights and surface
rights of the Real Estates and Other Assets
as set forth in Paragraph 1 of Article 32;
and those only in trust of real estate, realestate lease rights and surface rights
established under the laws and regulationsof a foreign country as set forth in Item (d)of Paragraph 2 of Article 32:(omitted)(c) Trust beneficiary rights in monetary trusts, thepurpose of which is to manage the trust assets as
an investment in real estate, real estate leaserights or surface rights as set forth in Paragraph 2
of Article 32, Item (a); and those establishedunder the laws and regulations of a foreigncountry as set forth in Item (d) of Paragraph 2 ofArticle 32:(omitted)(d) Equity Interests in Silent Partnership on Real
Estate as set forth in Item (b) of Paragraph 2 ofArticle 32; and those established under the laws
and regulations of a foreign country as set forthin Item (d) of Paragraph 2 of Article 32:(omitted)(e) Trust beneficiary rights in monetary trusts, thepurpose of which is to manage the trust assets
principally as an investment in Equity Interests in
Silent Partnership on Real Estate; and thoseestablished under the laws and regulations of aforeign country as set forth in Item (d) of
Paragraph 2 of Article 32:(omitted)(f) (omitted)(g) Monetary claims as set forth in Item (l) of
Paragraph 2 of Article 32:(omitted)(h) Rights related to derivatives transactions as set
forth in Item (y) of Paragraph 2 of Article 32:(omitted)(i) (omitted)

15

Proposed Amendments
regulations of a foreign country as set forthin Item (e) of Paragraph 2 of Article 32:(unchanged)(b) Trust beneficiary rights in trust of realestate, real estate lease rights and surface
rights as set forth in Paragraph 1 and Item(a) of Paragraph 2 of Article 32; and trust
beneficiary rights in trust of real estate, realestate lease rights and surface rights
established under the laws and regulationsof a foreign country as set forth in Item (e)of Paragraph 2 of Article 32:(unchanged)(c) Trust beneficiary rights in monetary trusts, thepurpose of which is to manage the trust assets as
an investment in real estate, real estate leaserights or surface rights as set forth in Item (b) of
Paragraph 2 of Article 32; and trust beneficiaryrights in monetary trusts established under thelaws and regulations of a foreign country as set
forth in Item (e) of Paragraph 2 of Article 32, thepurpose of which is to manage the trust assets as
an investment in real estate, real estate leaserights or surface rights as set forth in Item (b) of
Paragraph 2 of Article 32:(unchanged)(d) Equity Interests in Silent Partnership on Real
Estate as set forth in Item (c) of Paragraph 2 ofArticle 32; and those established under the laws
and regulations of a foreign country as set forthin Item (e) of Paragraph 2 of Article 32:(unchanged)(e) Trust beneficiary rights in monetary trusts, thepurpose of which is to manage the trust assets
principally as an investment in Equity Interests in
Silent Partnership on Real Estate as set forth in
Item (d) of Paragraph 2 of Article 32; and trust
beneficiary rights in monetary trusts establishedunder the laws and regulations of a foreigncountry as set forth in Item (e) of Paragraph 2 ofArticle 32, the purpose of which is to manage thetrust assets as an investment in Equity Interests
in Silent Partnership on Real Estate as set forth in
Item (d) of Paragraph 2 of Article 32:(unchanged)(f) (unchanged)(g) Monetary claims as set forth in Item (m) of
Paragraph 2 of Article 32:(unchanged)(h) Rights related to derivatives transactions as set
forth in Item (z) of Paragraph 2 of Article 32:(unchanged)(i) (unchanged)

Current Articles of Incorporation
Article 40 Value in Securities Registration
Statements, Securities Reports and AssetManagement Reports

Proposed Amendments
Article 40 Value in Securities Registration
Statements, Securities Reports and AssetManagement Reports

If making evaluations in a way that differs from themethods set forth in Article 39 for the purposes ofrecording a value in a securities registration statement,
securities report and asset management report, etc.,
evaluations shall be made in the following way.
(a) Real estate, real estate lease rights and surface
rights of the Real Estates and Other Assets as set
forth in Paragraph 1 of Article 32; those under thelaws and regulations of a foreign country as set
forth in Item (d) of Paragraph 2 of Article 32; andthose held by the Corporation Holding Overseas
Real Estate as set forth in Paragraph 1 of Article
32:(omitted)(b) Trust beneficiary rights in trust of real estate,real estate lease rights and surface rights of theReal Estates and Other Assets as set forth inParagraph 1 of Article 32; and trust beneficiaryrights in monetary trusts, the purpose of which is
to manage the trust assets principally as aninvestment in real estate, real estate lease rights
or surface rights as set forth in Item (a) of
Paragraph 2 of Article 32; and trust beneficiaryrights only in trust of real estate, real estate leaserights or surface rights established under thelaws and regulations of a foreign country as set
forth in Item (d) of Paragraph 2 of Article 32;
and trust beneficiary rights in monetary trusts,
the purpose of which is to manage the trust
assets principally as an investment in real estate,real estate lease rights or surface rights as set
forth in Item (a) of Paragraph 2 of Article 32:(omitted)(c) Equity Interests in Silent Partnership on Real
Estate as set forth in Item (b) of Paragraph 2 ofArticle 32; and trust beneficiary rights inmonetary trusts, the purpose of which is to
manage the trust assets principally as aninvestment in Equity Interests in Silent
Partnership on Real Estate as set forth in Item(c) of Paragraph 2 of Article 32; and Equity
Interests in Silent Partnership on Real Estateestablished under the laws and regulations of aforeign country as set forth in Item (d) of
Paragraph 2 of Article 32; and trust beneficiaryrights in monetary trusts, the purpose of whichis to manage the trust assets as an investment in
the Equity Interest in Silent Partnership on Real
Estate as set forth in Item (c) of Paragraph 2 ofArticle 32:(omitted)If making evaluations in a way that differs from themethods set forth in Article 39 for the purposes ofrecording a value in a securities registration statement,
securities report and asset management report, etc.,
evaluations shall be made in the following way.
(a) Real estate, real estate lease rights and surface
rights of the Real Estates and Other Assets as set
forth in Paragraph 1 of Article 32; those under thelaws and regulations of a foreign country as set
forth in Item (e) of Paragraph 2 of Article 32; andthose held by the Corporation Holding Overseas
Real Estate as set forth in Paragraph 1 of Article
32:(unchanged)(b) Trust beneficiary rights in trust of real estate,real estate lease rights and surface rights as set
forth in Paragraph 1 and Item (a) of Paragraph 2
of Article 32; and trust beneficiary rights inmonetary trusts, the purpose of which is to
manage the trust assets as an investment in realestate, real estate lease rights or surface rights as
set forth in Item (b) of Paragraph 2 of Article 32;
and trust beneficiary rights in trust of real estate,real estate lease rights or surface rights
established under the laws and regulations of aforeign country as set forth in Item (e) of
Paragraph 2 of Article 32; and trust beneficiaryrights in monetary trusts, the purpose of which is
to manage the trust assets as an investment inreal estate, real estate lease rights or surface
rights as set forth in Item (b) of Paragraph 2 ofArticle 32:(unchanged)(c) Trust beneficiary rights in monetary trusts, thepurpose of which is to manage the trust assets as
an investment in Equity Interests in Silent
Partnership on Real Estate as set forth in Items(c) and (d) of Paragraph 2 of Article 32; and trust
beneficiary rights in monetary trusts establishedunder the laws and regulations of a foreigncountry as set forth in Item (e) of Paragraph 2 ofArticle 32, the purpose of which is to manage thetrust assets as an investment in Equity Interests
in Silent Partnership on Real Estate as set forth inItems (c) and (d) of Paragraph 2 of Article 32:

16(unchanged)

Current Articles of Incorporation
Article 52 Standards for Fee Payment to
Accounting Auditor

Proposed Amendments
Article 52 Standards for Fee Payment to
Accounting Auditor

The Investment Corporation shall pay fees to theaccounting auditor in an amount determined by
the board of directors that is no more than 20
million yen for each Accounting Settlement Day
subject to audit, by the last day of February andAugust each year for the period of six months up
to such day, through bank transfer to an accountdesignated by the accounting auditor.

The Investment Corporation shall pay fees to theaccounting auditor in an amount determined by
the board of directors that is no more than 25
million yen for each Accounting Settlement Day
subject to audit, by the last day of February andAugust each year for the period of six months up
to such day, through bank transfer to an accountdesignated by the accounting auditor.

(Add)

Article 55 Effectuation of Amendment
The amendments in Paragraph 1 of Article 5 andArticles 31, 33 and 52 in these Articles ofIncorporation shall take effect on the effective dateof the absorption-type merger between theInvestment Corporation as the surviving
corporation and Sekisui House Residential
Investment Corporation as the absorbed corporation
under the merger agreement dated January 24, 2018
between the Investment Corporation and Sekisui
House Residential Investment Corporation (the“Merger”), subject to effectuation of the Merger.
This Article shall be deleted after the amendmentsin these Articles of Incorporation takes effectpursuant to this Article.

17

Current Articles of Incorporation
Attachment
Management Fee to Asset Management Company

Proposed Amendments
Attachment
Management Fee to Asset Management Company

1. Management Fee I (Ongoing Operational and
1. Management Fee I (Ongoing Operational andManagement Fee I)
Management Fee I)
Management Fee I shall be calculated by multiplying
Management Fee I shall be calculated by multiplying(i) the total net assets of the Investment Corporation on (i) the total net assets (less the amount equivalent tothe balance sheet (limited to those approved by the
unamortized positive goodwill) of the Investmentboard of directors pursuant to Article 131, Paragraph 2 Corporation on the balance sheet (limited to thoseof the Investment Trusts Act) for the latest Accounting approved by the board of directors pursuant to Article
Settlement Day by (ii) a rate separately agreed by the131, Paragraph 2 of the Investment Trusts Act) for theInvestment Corporation and the Asset Management
latest Accounting Settlement Day by (ii) a rate
Company (up to 0.5% per annum), on a per diem basis. separately agreed by the Investment Corporation andIn this calculation method, the actual number of days in the Asset Management Company (up to 0.5% per
the relevant business term shall be assumed to be 365
annum), on a per diem basis. In this calculation
days in a year and any fraction less than one yen shall method, the actual number of days in the relevant
be rounded down.
business term shall be assumed to be 365 days in a year
and any fraction less than one yen shall be rounded
down.
2. Management Fee II (Ongoing Operational andManagement Fee II)Management Fee II for each business term shall be (i)the distributable amount before deduction ofManagement Fee II for the relevant business term of
the Investment Corporation (i.e., the amount of the net
profit for the period before tax on the profit and loss
statement (limited to those approved by the board of
directors pursuant to Article 131, Paragraph 2 of theInvestment Trusts Act; the same shall apply
hereinafter) plus the amount of Management Fee II for
the business term, after a loss carried forward iscompensated, if any) divided by (ii) the total number ofoutstanding units as of the Accounting Settlement Dayof the relevant business term, and multiplied by (iii) (a)the operating profits before deduction of Management
Fee II (i.e., the amount of the operating profits on the
profit and loss statement plus the amount ofManagement Fee II for the business term) and (b) arate separately agreed by the Investment Corporationand the Asset Management Company (up to 0.004%).
In this calculation method, any fraction less than one
yen shall be rounded down, and divisions shall be doneat the end of the calculation, and the lower limit shallbe zero yen.

18

2. Management Fee II (Ongoing Operational andManagement Fee II)Management Fee II for each business term shall be (i)the distributable amount before deduction ofManagement Fee II for the relevant business term of
the Investment Corporation (i.e., the amount of the net
profit for the period before tax (after adding the amountof amortization of goodwill and deducting the gains on
negative goodwill incurred) on the profit and loss
statement (limited to those approved by the board of
directors pursuant to Article 131, Paragraph 2 of theInvestment Trusts Act; the same shall apply
hereinafter) plus the amount of Management Fee II for
the business term (including the amount of the nondeductible consumption tax on Management Fee II),after a loss carried forward is compensated, if any)
divided by (ii) the total number of issued andoutstanding units as of the Accounting Settlement Dayof the relevant business term (the “Distributable
Amount per Unit”), and multiplied by (iii) (a) the
operating profits before deduction of Management Fee
II (i.e., the amount of the operating profits on the profit
and loss statement plus the amount of amortization of
goodwill and Management Fee II for the business term(including the amount of the non-deductible
consumption tax on Management Fee II)) and (b) a rate
separately agreed by the Investment Corporation and
the Asset Management Company (up to 0.004%). In
this calculation method, any fraction less than one yen
shall be rounded down, and divisions shall be done at
the end of the calculation, and the lower limit shall be
zero yen.

Current Articles of Incorporation
3. Management Fee III (Acquisition Fee)Management Fee III shall be calculated by multiplying(i) the trading value for the acquisition of the Real
Estate-Related Assets (excluding the consumption tax,other similar taxes and expenses and the like) by (ii) a
rate separately agreed between the Investment
Corporation and the Asset Management Company (upto 0.5%) (in the case of acquisition from any interested
party as set forth in the “Rules for Transactions with
Interested Parties” of the Asset Management Company,
such rate shall be up to 0.25%), any fraction less than
one yen being rounded down.

Proposed Amendments
3. Management Fee III (Acquisition Fee)Management Fee III shall be calculated by multiplying(i) the trading value for the acquisition of the Real
Estate-Related Assets (excluding the consumption tax,other similar taxes and expenses and the like) by (ii) a
rate separately agreed between the Investment
Corporation and the Asset Management Company (upto 0.5%) (in the case of acquisition from any interested
party as set forth in the “Rules for Transactions with
Interested Parties” of the Asset Management Company,
there shall be no Acquisition Fee), any fraction lessthan one yen being rounded down.

4. Management Fee IV (Disposition Fee)Management Fee IV shall be calculated by multiplying(a) the trading value for the sale of the Real EstateRelated Assets (excluding the consumption tax, othersimilar taxes and expenses and the like) by (b) a rate
separately agreed between the Investment Corporationand the Asset Management Company (up to 0.5%) (inthe case of sale to any interested party as set forth in“Rules for Transactions with Interested Parties” of theAsset Management Company, there shall be nodisposition fee), any fraction less than one yen being
rounded down.

4. Management Fee IV (Disposition Fee)Management Fee IV shall be calculated by multiplying(i) the trading value for the disposition of the Real
Estate-Related Assets (excluding the consumption tax,other similar taxes and expenses and the like) by (ii) a
rate separately agreed between the Investment
Corporation and the Asset Management Company (upto 0.5%) (in the case of disposition to any interested
party as set forth in “Rules for Transactions with
Interested Parties” of the Asset Management Company,
there shall be no disposition fee), any fraction less than
one yen being rounded down.

(Add)

5. Management Fee V (Merger Fee)
In a consolidation-type merger or absorption-typemerger (collectively, a “merger”) between theInvestment Corporation and another investment
corporation, if such merger takes effect after the AssetManagement Company investigates and assesses theassets and other properties held by such investment
corporation and conducts any other business associatedwith the merger, Management Fee V shall be calculated
by multiplying (i) the then assessed value of the Real
Estate-Related Assets held by such investment
corporation when such merger takes effect by (ii) a rate
separately agreed between the Investment Corporationand the Asset Management Company (up to 0.8%).

5. Timing of Payment of Management Fee
6. Timing of Payment of Management Fee
Management Fee I and Management Fee II shall beManagement Fee I and Management Fee II shall be paid
paid within three months from the Accounting
within three months from the Accounting Settlement
Settlement Day of the relevant business term of the
Day of the relevant business term of the Investment
Investment Corporation.
Corporation.
Management Fee III shall be paid on or before the last Management Fee III shall be paid on or before the last
day of the following month of the month in which the day of the following month of the month in which theInvestment Corporation has acquired the relevant asset. Investment Corporation has acquired the relevant asset.
Management Fee IV shall be paid on or before the last Management Fee IV shall be paid on or before the last
day of the following month of the month in which the day of the following month of the month in which theInvestment Corporation has sold the relevant asset.
Investment Corporation has dispositioned the relevant
asset.
Management Fee V shall be paid within two months
after the merger takes effect.
19

Current Articles of Incorporation

Proposed Amendments

(Add)
(Add)

7. Adjustment Provision(1) If the Investment Corporation acquires its own
investment units and holds any undisposed or unretired
treasury investment units as of the Accounting
Settlement Day for the business term in which theInvestment Corporation acquired such investment
units, the number of the treasury investment units of
the Investment Corporation shall be excluded from thetotal number of issued and outstanding investment
units as of such Accounting Settlement Day for the
purpose of calculation of the Distributable Amount per
Unit for the Management Fee II.
(2) In the case of a split of the investment units of theInvestment Corporation that increases the total number
of issued and outstanding investment units,
Management Fee II for a business term ending on orafter the day on which such split of the investment
units takes effect shall be calculated by making an
adjustment in which the Distributable Amount per Unit
is multiplied by the Split Ratio (as defined below)
related to the total number of issued and outstanding
investment units.
In this paragraph (2),“Split Ratio” shall be calculated, in the case of any splitof the investment units of the Investment Corporationthat increases the total number of issued andoutstanding investment units, by dividing (i) the total
number of issued and outstanding investment units
immediately after such split of the investment units
takes effect by (ii) the total number of issued andoutstanding investment units immediately before such
split of the investment units takes effect.

(Add)

(Add)

(3) In the case of a Rights Offering (as defined below)that increases the total number of issued andoutstanding investment units, Management Fee II for abusiness term ending on or after the issue date of such
Rights Offering shall be calculated by making an
adjustment in which the Distributable Amount per Unit
is multiplied by the Ratio of Allotment without
Contribution (as defined below).
In this paragraph (3),“Rights Offering” means issuance of new investment
units as a result of the exercise of investment unit
acquisition rights related to an allotment without
contribution to unitholders.
“Ratio of Allotment without Contribution” means aratio to be calculated in the following formula in thecase of a Rights Offering.
＜Calculation Formula＞
Ratio of Allotment without Contribution ＝ A/B
A: Number of the total number of issued andoutstanding investment units immediately after20

Current Articles of Incorporation

Proposed Amendments
such Rights Offering less the Number of Units
Deemed to Be Issued at Market Price (as defined
below)
B: Total number of issued and outstanding investment
units immediately before such Rights Offering“Number of Units Deemed to Be Issued at Market
Price” shall be the Number of Incremental Units(as defined below) (any fraction less than one (1)unit shall be rounded down) multiplied by the ratio
obtained by dividing (i) the amount to be paid perunit at the time of exercising investment unit
acquisition rights allotted without contribution insuch Rights Offering by (ii) a Market Price per
Unit (as defined below), or by another ratio
determined by the board of directors, in the case of
Rights Offering.
“Market Price per Unit” means the closing price of an
ordinary market transaction of the investment units of
the Investment Corporation on the Tokyo Stock
Exchange, Inc. on the last day of the exercise period of
the investment unit acquisition rights allotted without
contribution in such Rights Offering (or, if there is no
closing price on that day, the closing price of theimmediately preceding day), in the case of Rights
Offering.
“Number of Incremental Units” means the number ofunits increased as a result of such Rights Offering in
the case of Rights Offering.

21

Proposal No. 3: Appointment of one executive director
Because Executive Director Junichi Inoue requested to be allowed to temporarily resign as of April 30,
2018 for the purpose of adjustment of term of office, we request that he again be appointed as executive director
as of May 1, 2018.
Under this proposal, in accordance with Article 22, Paragraph 1 of SHR’s current Articles of Incorporation,
the term of the office of executive director is the two-year period starting from May 1, 2018.
This proposal was submitted at the board of directors meeting held on February 23, 2018 with theunanimous agreement of all supervisory directors of SHR.
The candidate for executive director is as follows.
Name(date of birth)

Personal History
April 1989

Joined Sekisui House, Ltd., Tokyo-Tokken Building Projects Department

August 1999

Sekisui House, Ltd., Tokyo-Tokken Sales OfficeFebruary 2002

Sekisui House, Ltd., Tokyo West Sha Maison Sales Office

August 2002

Seconded to Sekiwa Real Estate, Ltd., Corporate Management andPlanning Office, Corporate Management Department

February 2003

Transferred to Sekiwa Real Estate, Ltd., Corporate Management andPlanning Office, Corporate Management Department

June 2005

Seconded to Sekisui House, Ltd., Development Department

April 2006

Seconded to Sekisui House, Ltd., Real Estate Asset Management
Department

August 2007
Junichi Inoue(September 28, 1966)
February 2010

Transferred to Sekisui House, Ltd., Real Estate Asset Management
Department
Sekisui House, Ltd., East Japan Development Planning Department

March 2010

Seconded to Sekisui House SI Asset Management Ltd. (currently Sekisui
House Asset Management, Ltd.), Director

May 2012

Transferred to Sekisui House SI Asset Management Ltd., Representative
Director and President

June 2012

Sekisui House SI Investment Corporation (currently Sekisui House
Residential Investment Corporation), Executive Director

March 2014

Sekisui House Realty Co., Ltd. (currently Sekisui House Investment
Advisors, Ltd.), Advisor

April 2014

Sekisui House Investment Advisors, Ltd., Representative Director andPresident (current position)

September 2014

Sekisui House Reit, Inc., Executive Director (current position)

・The above candidate for executive director possesses no Investment Units.
・The above candidate for executive director is President and Representative Director of SHIA, which is the asset
management company of SHR.
・Excluding the abovementioned matters, there are no special interests between the above candidate for executive
director and SHR.
・The above candidate for executive director is currently executing the overall business of SHR as its executive
director.
22

Proposal No. 4: Appointment of two substitute executive directors
To be prepared for the case where the position of executive director is vacant or the case where there is aninsufficient number of executive directors as specified under laws and regulations, we request that two
substitute executive directors be appointed as of May 1, 2018.
The order of assumption to the office as executive director will be, if this proposal is approved, Osamu
Minami first and Nobuyoshi Sato second.
Further, under this proposal, this resolution for the appointment of substitute executive directors will bevalid until the term of the office of executive director under Proposal No. 3 expires in accordance with Article
22, Paragraph 2 of the current Articles of Incorporation.
Further, only prior to assumption of office, the appointment of substitute executive directors can be revokedwith a resolution of the board of directors meeting.
This proposal was submitted at the board of directors meeting held on February 23, 2018 with theunanimous agreement of all supervisory directors of SHR.
The candidates for substitute executive directors are as follows:
Candidate
No.

1

Name
(date of birth)

Personal History
April 1983

Joined Sekisui House, Ltd., Urban Development Department

August 1991

Sekisui House, Ltd., Tokyo City Development Department

April 1999

Sekisui House, Ltd., Development Department

April 2006

Sekisui House, Ltd., Development Planning Department, Chief
Manager

February 2010

Sekisui House, Ltd., East Japan Development Planning
Department, Chief Manager

May 2010

Sekisui House, Ltd., East Japan Development Department, Chief
Manager

Osamu Minami(December 13, 1960) May 2012

Sekisui House, Ltd., Development Department, Senior Manager

June 2012

Seconded to Japan Post Holdings, Co., Ltd., Real Estate
Planning Department, General Manager

March 2014

Seconded to Sekisui House SI Asset Management, Ltd.
(currently Sekisui House Asset Management, Ltd.), Advisor

March 2014

Sekisui House SI Asset Management, Ltd., Representative
Director and President (current position)

April 2014

Transferred to Sekisui House SI Asset Management, Ltd.

June 2014

Sekisui House SI Residential Investment Corporation (currently
Sekisui House Residential Investment Corporation), Executive
Director (current position)

23

Candidate
No.

2

Name
(date of birth)

Personal History
April 1994

Joined ORIX Corporation, Real Property Appraisal Department

March 1998

ORIX Corporation, Osaka Sales Department II

March 2002

ORIX Corporation, Project Finance Department

March 2005

ORIX Corporation, Structured Finance Department

April 2007

Joined LaSalle Investment Management KK (currently LaSalle
Investment Management), Investment Sales Department,
Associate Director

April 2009

Joined Joint Corporation
Seconded to Joint Capital Partners Co., Ltd. (currently Sekisui
House Asset Management, Ltd.), IR and Finance Department,
Senior Manager

April 2009

Joint Capital Partners Co., Ltd., IR and Finance Department,
General Manager

March 2010

Transferred to Sekisui House SI Asset Management Ltd., IR and
Finance Department, General Manager

March 2014

Sekisui House SI Asset Management Ltd., Director and Vice
President (current position)

Nobuyoshi Sato
(February 29, 1972)

・The above candidates for substitute executive director possess no Investment Units.
・There are no special interests between the above candidates for substitute executive director and SHR. Osamu
Minami, one of the above candidates for substitute executive director, is executive director of SHI, the counterparty
in the Investment Corporation Merger, and is Representative Director and President of SHAM, the counterparty to
the Merger Agreement under which the Asset Management Companies carry out the Asset Management Company
Merger. Further, Nobuyoshi Sato, the other above candidate for substitute executive director, is Director and Vice
President of SHAM, the counterparty to the Merger Agreement under which the Asset Management Companies carryout the Asset Management Company Merger.

24

Proposal No. 5: Appointment of two supervisory directors
Because Supervisory Directors Shigeru Nomura and Tatsushi Omiya requested to be allowed to resign
temporarily as of April 30, 2018 for the purpose of adjustment of their terms of office, we request that theyagain be appointed as supervisory directors as of May 1, 2018.
Under this proposal, in accordance with Article 22, Paragraph 1 of SHR’s current Articles of Incorporation,
the term of the office of supervisory director will be the two-year period from May 1, 2018
The candidates for supervisory director are as follows:
Candidate
No.

1

Name
(date of birth)

Personal History
November 1975

Ernst & Whinney (currently Ernst & Young LLP), Tokyo Office,
New York Office, and Dusseldorf OfficeFebruary 1979

Registered as certified public accountant

December 1987

Ota and Showa Audit Corporation (currently Ernst & Young
ShinNihon LLC), International Division

April 1988

Ernst & Young Tax Consultants CV (currently Ernst & Young TaxCo.), Partner

December 1999

Ernst & Young Tax Consultants CV, Representative Partner

July 2002

Ernst & Young Shinnihon Tax (currently Ernst & Young Tax Co.),
Representative Staff

January 2003

EY Transaction Advisory Services Co., Ltd. (currently Ernst &Young Transaction Advisory Services Co., Ltd.), Co-CEO

July 2007

Ernst & Young Shinnihon Tax (currently Ernst & Young Tax Co.),
Representative Staff

Shigeru Nomura(September 11, 1952) July 2011

Established Shigeru Nomura Certified Public Accountant Office(current position)

July 2011

EOS Inc. (currently EP Consulting Services Corporation), Director

December 2011

EOS Inc., Chairman

April 2012

Kawashima Gold Corporation (currently K-Gold International
Corporation), Auditor

July 2012

View Communications, Inspector

September 2014

Sekisui House Reit, Inc., Supervisory Director (current position)

June 2015

Eiken Chemical Co., Ltd., Outside Director (current position)

July 2017

The Resolution and Collection Corporation, Corporate
Rehabilitation Committee, Committee Member (current position)25

Candidate
No.

2

Name
(date of birth)

Personal History
April 1998

The Industrial Bank of Japan, Limited (currently Mizuho Bank,
Ltd.)

April 2002

Legal Training and Research Institute, Supreme Court of Japan

October 2003

Mori Hamada & Matsumoto

July 2012
Tatsushi Omiya(September 14, 1973)

City Law Offices, Partner (current position)

December 2013

QB Net Co., Ltd. (currently QB Net Holdings Co., Ltd.), Auditor

September 2014

Sekisui House Reit, Inc., Supervisory Director (current position)

September 2017

QB Net Holdings Co., Ltd., Outside Director (current position)

・The above candidates for supervisory director possess no Investment Units.
・There are no special interests between the above candidates for supervisory directors and SHR.
・The above candidates for supervisory director are currently supervisory directors of SHR who are supervising thegeneral performance of duties by the executive director of SHR.
Reference Matters
Among the proposals submitted to the general meeting of unitholders, if there is any oppositional proposal,
with respect to any such proposal, the provisions of Article 93, Paragraph 1 of the Investment Trusts Act andthe “deemed approval” provisions specified in Article 17 of SHR’s current articles of incorporation will not
apply. Neither Proposal No. 1 through Proposal No. 5 set forth above falls under an oppositional proposal.
End

26

Attachment 1

Merger Agreement

January 24, 2018-1-

Merger Agreement
Sekisui House Reit, Inc. (“SHR”) and Sekisui House Residential Investment Corporation (“SHI”), in
regard to the merger of SHR and SHI (“Merger”), have entered into this Merger Agreement ("Agreement")
as set out below as of January 24, 2018 (“Execution Date”).

Article 1: Method of Merger
In accordance with the provisions of this Agreement, SHR and SHI shall carry out an absorption-typemerger with SHR as the surviving corporation and SHI as the dissolving corporation pursuant to theprovisions of Article 147 of the Act on Investment Trusts and Investment Corporations (Act No. 198 of1951, as amended; “Investment Trusts Act”).

Article 2: Corporate Names and Addresses of Merger Parties
The corporate names and addresses of the surviving corporation and dissolving corporation are as
follows:(1)

Corporate name and address of surviving corporation
Corporate name:Sekisui House Reit, Inc.
Address:
1-6-6 Motoakasaka, Minato-ku, Tokyo(2)

Corporate name and address of dissolving corporation
Corporate name:Sekisui House Residential Investment Corporation
Address:
3-1-31 Minami-Aoyama, Minato-ku, Tokyo

Article 3: Split of SHR’s Investment Units
Provided that this Agreement has not been cancelled in accordance with Article 13 or other provisions of
this Agreement, the investment units of unitholders set forth or recorded in SHR’s latest unitholder registryon the day preceding the day on which the Merger comes into force (“Effective Date”) will be split into
two investment units for every one investment unit on the Effective Date (“Investment Unit Split”).

Article 4: Method of Calculation of Number of Investment Units to be Delivered Upon Merger and Matters
Relating to Allotment Thereof
1.

Upon the Merger, SHR shall issue new investment units after the split in accordance with
Article 3 in the number obtained by multiplying the total number of investment units in SHI
held by the unitholders set forth or recorded in SHI’s latest unitholder registry on the day
preceding the Effective Date (excluding SHR, SHI, and unitholders of SHI that have demandedpurchase of their investment units pursuant to Article 149-3, of the Investment Trusts Act(excluding unitholders that have withdrawn such demand for purchase); “Unitholders Subject to
Allocation”) by 1.65 (rounded down to the nearest whole number) and shall deliver toUnitholders Subject to Allocation 1.65 SHR investment units after the split in accordance with
Article 3 per each of their investment units; provided, however, that such delivery’s and theMerger coming into force will be subject to the condition precedent that the Investment Unit
-2-

Split comes into force on the Effective Date, and if the Investment Unit Split does not come into
force on the Effective Date, SHR and SHI shall consult in good faith and reach an agreement
before changing the Effective Date specified in Article 6 or taking other measures towards the
Merger coming into force.
2.

In a case under the preceding paragraph, if there are any fractions of less than one SHR
investment unit in the investment units that must be delivered to Unitholders Subject to
Allocation, SHR shall process such fractions pursuant to Article 149-17 of the Investment Trusts
Act.

Article 5: Matters Relating to Total Unitholders’ Capital of Surviving Corporation
SHR’s total unitholders’ capital and capital surplus to be added upon the Merger will be as follows;
provided, however, that SHR and SHI can consult and reach an agreement, taking into account SHR’s and
SHI’s asset condition on the day preceding the Effective Date, to change such amounts:(1)

Total unitholders’ capital: 0 yen(2)Capital surplus: The amount of change in unitholders’ equity, etc. as specified in Article 22,
Paragraph 1 of the Regulations on Accounting of Investment Corporations(Cabinet Office Ordinance No. 47 of 2006, as amended), less the amountspecified in the preceding item.

Article 6: Effective Date
The Effective Date of the Merger will be May 1, 2018; provided, however, that depending on thenecessity of carrying out the procedures for the Merger and other factors, SHR and SHI can separately
consult and change the Effective Date after reaching agreement.

Article 7: General Meeting of Unitholders
1.

On March 27, 2018 or such other day SHR and SHI separately agree, SHR will convene a general
meeting of unitholders to request approval of (i) a proposal to approve this Agreement pursuant to
Article 149-7, Paragraph 1 of the Investment Trusts Act; (ii) a proposal to amend SHR’s articles ofincorporation as set forth in Attachment 7.1; and (iii) such other proposals as SHR and SHI
separately agree.

2.

On March 27, 2018 or such other day SHR and SHI separately agree, SHI will convene a general
meeting of unitholders to request approval of (i) a proposal to approve this Agreement pursuant to
Article 149-2, Paragraph 1 of the Investment Trusts Act (subject to approval of the proposal toamend the articles of incorporation as set forth in (iii) below); (ii) a proposal to terminate the asset
management service agreement with Sekisui House Asset Management, Ltd. (“SHAM”) on the
Effective Date on the condition precedent that the Merger comes into force; (iii) a proposal to amend
SHI’s articles of incorporation as set forth in Attachment 7.2 (subject to approval of the proposal toapprove this Agreement as set forth in (i) above); and (iv) such other proposals as SHR and SHI
separately agree.
-3-

Article 8: Corporate Name and Affiliates, etc. of SHR After Merger
1.

After the Merger, SHR’s corporate name will be Sekisui House Reit, Inc.

2.

SHR’s post-Merger Asset Management Company (meaning an asset management company specified
in Article 2, Paragraph 21 of the Investment Trusts Act; hereinafter the same), Asset CustodyCompany (meaning an asset custody company specified in Article 2, Paragraph 22 of the Investment
Trusts Act; hereinafter the same) and General Administrative Services Providers (meaning generaladministrative services providers specified in Article 2, Paragraph 23 of the Investment Trusts Act,
which accepts entrustment of the administrative services specified in the items of Article 117 of theInvestment Trusts Act; hereinafter the same), and accounting auditor will not change upon the
Merger. Further, with respect to the agreement with one of SHI’s General Administrative Services
Providers, The Bank of Tokyo-Mitsubishi UFJ, Ltd., which is the General Administrative Services
Provider for investment corporation bonds, SHR shall succeed to such agreement through the
Merger, and The Bank of Tokyo-Mitsubishi UFJ, Ltd. will become a General Administrative
Services Provider of SHR.

3.

Provided that the Merger comes into force, on the Effective Date, SHI will terminate any asset
management service agreement or institutional management administrative service agreement with
SHAM, asset custody agreement with Asset Custody Company, general administrative services
agreement (excluding the agreement with The Bank of Tokyo-Mitsubishi UFJ, Ltd., which is theGeneral Administrative Services Provider for investment corporation bonds) with its General
Administrative Services Providers, the exclusive right to negotiate agreement between SHAM andSekisui House, Ltd., the audit agreement with its accounting auditor (excluding the portion forauditing of SHI’s financial statements for the Fiscal Period having its Settlement Date on the last dayof April 2018 as amended by the resolution of Paragraph 2, Item (iii) of the preceding article as
required pursuant to the Financial Instruments and Exchange Act (Act No. 25 of 1948; asamended)), and assorted agreements, etc. ancillary to the foregoing agreements, as well as suchother agreements as SHR and SHI separately agree.

4.

Notwithstanding the preceding three paragraphs, SHR and SHI can separately consult and agree toamend the foregoing provisions.

Article 9: Merger Consideration
Instead of cash distribution proceeds to SHI’s unitholders for SHI’s Fiscal Period ending on the day
preceding the Effective Date as amended by the resolution offset forth in Article 7, Paragraph 2, Item (iii),
SHR shall pay to Unitholders Subject to Allocation or the registered pledgees of their units merger
consideration of an amount calculated in accordance with the following formula per SHI investment unit
they hold (fractions of less than one yen will be discarded) within a reasonable time after the Effective
Date, taking into account SHI’s income calculations for the relevant Fiscal Period and administrative workfor payment of merger consideration, etc.:
Amount ofmergerconsideration per
unit＝

Amount of SHI’s Distributable Income as of the day
preceding the Effective Date
The total number of SHI’s investment units issued as ofthe day preceding the Effective Date

-4-

In the above formula, “Amount of SHI’s Distributable Income as of the day preceding the Effective Date”
means the amount of profit set forth in Article 136, Paragraph 1 of the Investment Trusts Act, and “The
total number of SHI’s investment units issued as of the day preceding the Effective Date” means the total
number of SHI’s investment units issued as of the day preceding the Effective Date less the number ofinvestment units held by SHI’s unitholders other than Unitholders Subject to Allocation.

Article 10: Distribution of Cash
1.

During the period from (and including) the Execution Date until (but excluding) the Effective Date,as cash distributions for the Fiscal Period ended on the last day of October 2017, SHR shall
distribute a total amount of 2,625 million yen (2,710 yen per investment unit) to the unitholders orinvestment unit pledge holders set forth or recorded in SHR’s final unitholder registry on the last dayof October 2017, and except for such cash distributions, shall not pay any cash distributions to any
unitholder or purchase investment units for consideration by agreement with any unitholder.

2.

During the period from (and including) the Execution Date until (but excluding) the Effective Date,as cash distributions for the Fiscal Period ended on the last day of September 2017, SHI shall
distribute a total amount of 2,492 million yen (2,255 yen per investment unit) to the unitholders orinvestment unit pledge holders set forth or recorded in SHI’s final unitholder registry on the last day
of September 2017, and except for such cash distributions, shall not pay any cash distributions to
any unitholder or purchase investment units for consideration by agreement with any unitholder.

3.

Notwithstanding the preceding two paragraphs, if the Effective Date is changed to a day later thanMay 1, 2018, SHR and SHI shall consult and come to an agreement regarding the handling of cash
distributions.

Article 11: Succession to Corporate Assets, etc.
On the Effective Date, SHR shall succeed to all of SHI’s assets, liabilities, and rights and duties as of theEffective Date.

Article 12: Covenants
1.

During the period from (and including) the Execution Date until (but excluding) the Effective Date,
SHR and SHI shall each, using usual methods that are substantially identical to the methods usedprior to the execution of this Agreement, execute their operations and manage and invest their assets
with the due care of a competent manager and cause their Asset Management Companies, Asset
Custody Companies, General Administrative Services Providers and other third parties to do thesame, and shall not engage in conduct having a material impact on their assets or rights and duties(including without limitation issuance of investment units, issuance of investment corporation
bonds, new loans (excluding loans for repayment of existing loans), and execution or performanceof agreements for sale or acquisition of property) only after obtaining the other party’s consent inadvance (such consent shall not be unreasonably refused or withheld); provided, however, that theforegoing shall not apply to conduct clearly specified in this Agreement.

2.

During the period from (and including) the Execution Date until (but excluding) the Effective Date,
SHR and SHI shall take practical measures necessary for the Merger, including SHR’s succession to-5-

SHI’s assets, liabilities and obligations in conjunction with the Merger, adjustment of the investment
corporation systems that will survive the Merger and etc., and shall exchange information andotherwise provide necessary cooperation in order to take such measures.
3.

During the period from (and including) the Execution Date until (but excluding) the Effective Date,
if SHR or SHI learns of an event with respect to itself that is reasonably likely to have a material
impact on its business or financial condition or on the Merger (including without limitation breachof loan agreements, violation of laws or regulations by SHR or SHI, or findings etc. by theauthorities), it shall immediately notify the other party. In such case, SHR and SHI shall consult ingood faith and consider countermeasures, and make utmost efforts to resolve the event.

4.

By (and including) the day preceding the Effective Date, SHI shall, with respect to the agreements(“Pipeline Support Agreements”) set forth in Attachment 12.4(2) among SHI, SHAM, and thecompanies (“Pipeline Support Companies”) set forth in Attachment 12.4(1), execute agreements(“Pipeline Support Agreement Amendments”) in substance reasonably satisfactory to SHR so that,even if the asset management agreement between SHI and SHAM terminates, from the Effective
Date onward, the Pipeline Support Agreements between SHR and SHR’s Asset Management
Company Sekisui House Investment Advisors, Ltd. (corporate name will be changed to Sekisui
House Asset Management, Ltd. after the Merger comes into force; “SHIA”), and the respective
Pipeline Support Companies can continue.

5.

By (and including) the day preceding the Effective Date, SHR and SHI shall, each under its own
responsibility, lawfully and validly obtain from the counterparties to any agreements that containprovisions under which a right of cancellation will arise, or is likely to arise, to the counterparty
because of the execution of the Merger or because of assorted changes ancillary thereto (excluding
agreements that the relevant counterparty party to this Agreement agrees) written consent to theeffect that they consent without objection to the execution of the Merger and assorted changes
ancillary thereto.

6.

By (and including) the day preceding the Effective Date, SHI shall execute sale and purchaseagreements under which, on the Effective Date (provided, however, that if SHR and SHI haveagreed otherwise, then the date so agreed; in such case, when agreeing upon a different date, neither
SHR nor SHI shall unreasonable refuse its consent), SHI will acquire the property set forth inAttachment 12.6(1) and sell the property set forth in Attachment 12.6(2), and shall perform its duties
under each sale and purchase agreement as required for performance thereunder (limited to duties
that can be performed by (and including) the day preceding the Effective Date).

Article 13: Conditions for Merger
If on (and including) the day preceding the Effective Date, any of the following conditions precedent to
the Merger’s coming into force has not been satisfied or if it has become clear that any of the following
conditions precedent to the Merger’s coming into force will not be satisfied by the day preceding theEffective Date (inclusive)(provided, however, that in all cases, the foregoing shall not apply if the relevant
condition precedent is not satisfied for a reason attributable to a party, its persons concerned or its AssetManagement Company), a party hereto will be entitled to notify the other party in writing prior to the
Effective Date, and cancel this Agreement without incurring any liability or payment duties to the otherparty (provided, however, that the foregoing shall not apply to liability or payment duties in a case where
the party that gave such notice is in breach of other provisions of this Agreement). If SHR or SHI fails to-6-exercise its right of cancellation by the day preceding (and including) the Effective Date, the Merger shallcome into force as of the Effective Date.
(1)

That, as required in relation to the Merger and/or for carrying out the matters contemplated inrelation to the Merger, approval has been obtained from general meetings of unitholders of SHR
and SHI (including without limitation approval of the proposals specified in Article 7, Paragraph
1 and Paragraph 2), and other procedures have been completed and permits and approvals havebeen obtained, in accordance with applicable laws and regulations;(2)

That neither SHR nor SHI is in breach of any duties under agreements (including thisAgreement) or breach of financial covenants provisions, and is not late in payment of any
monetary obligations (including taxes and public charges) (in each case, excluding de minimis
matters);(3)

That no event of acceleration (including any event that would constitute an event of acceleration
upon the passage of time and/or notice), suspension of payment, or inability to pay has occurredwith respect to SHR or SHI;

(4)

That advance consent has been obtained from all financial institutions providing loans to SHR or
SHI regarding the execution of the Merger and the basic conditions of loans from the Effective
Date onwards (with respect to agreements for loans, including necessary allowances to avoid theoccurrence of any breach of financial covenants provisions, breach of covenants, or occurrenceof event of acceleration with respect to SHR after the Merger), and such consent has not been
withdrawn;(5)

That SHR and SHI have reasonably confirmed that U.S. securities law does not require filingprocedures of Form F-4 for the Merger;(6)

That no petition has been filed against SHR or SHI for commencement of bankruptcy
proceedings, commencement of civil rehabilitation proceedings, or commencement ofcomparable legal insolvency proceedings;(7)

That neither SHR nor SHIA, and neither SHI nor SHAM, has been subject to revocation ofregistration by supervisory authorities, suspension of operations in whole or in part, or otheradministrative disposition having a material impediment or material impact on theimplementation of the Merger;(8)

That the Pipeline Support Agreement Amendments have all been lawfully and validly executed,
and since (and including) the Effective Date, the Pipeline Support Agreements continue to be
lawful and valid between SHR and SHIA, and the respective Pipeline Support Companies;(9)

That it has been agreed among the parties to the agreements specified in Article 8, Paragraph 3that such agreements will be terminated as of the Effective Date under conditions reasonably
satisfactory to SHR subject to the coming into force of the Merger (even if this item is notsatisfied, SHI may not cancel this Agreement); and(10)

In addition to the foregoing, that no event has occurred that is reasonably determined tomarkedly impede or make markedly difficult the realization of the Merger.

-7-

Article 14: Change of Merger Conditions and Cancellation of Agreement
1. During the period from (and including) the Execution Date until the day preceding the Effective
Date (inclusive) (i) if any important change occurs with respect to the assets or business condition of
SHR or SHI; (ii) if it is reasonably determined that the implementation of the Merger has become
impossible or markedly difficult; (iii) if it becomes difficult to attain the purposes of the Merger
because of other reasons; or (iv) if it comes to light that any such event may occur, SHR and SHI
can consult in good faith and reach an agreement upon changing conditions for the Merger orotherwise amending this Agreement, or they can cancel this Agreement.
2. Even in a case where this Agreement has been cancelled in accordance with the preceding article or
the preceding paragraph, the provisions of this paragraph and Article 16 through Article 18 shallcontinue to have effective force.

Article 15: Public Announcement
If SHR or SHI will make a public announcement regarding the execution or content of this Agreement
or otherwise regarding the Merger, it shall first agree with the other party regarding the content, timing,and method, etc. thereof before making such announcement.

Article 16: Allocation of Expenses
Except as otherwise agreed between SHR and SHI, with respect to the allocation of expenses incurredby SHR and SHI by the Effective Date in connection with the execution and performance of thisAgreement (including without limitation fees to attorneys, certified public accountants, tax attorneys,
research companies, advisors, and other professionals appointed respectively by SHR and SHI and otherexpenses; expenses arising subject to the Merger coming into force are not included), SHR and SHI shalleach be responsible for payment of expenses it incurs; SHI shall record expenses it is responsible for as
expenses for the Fiscal Period ending by the day preceding the Effective Date (inclusive).

Article 17: Governing Law
This Agreement shall be governed by and construed in accordance with the laws of Japan.

Article 18: Jurisdiction
SHR and SHI agree that the Tokyo District Court will be the exclusive court of first instance withrespect to any dispute relating to this Agreement.

Article 19: Good-Faith Consultation
With respect to any matters necessary for the Merger other than what is specified in this Agreement,
SHR and SHI shall separately consult in accordance with the purpose of this Agreement and settle thematter.
-8-

(The remainder of this page is intentionally blank.)-9-

IN WITNESS WHEREOF, this Agreement has been prepared in duplicate, upon affixing the names andseals of each of SHR and SHI, each shall retain one original.

January 24, 2018

SHR:
Junichi Inoue
Executive Director
Sekisui House Reit, Inc.
1-6-6 Motoakasaka, Minato-ku, Tokyo
SHI:
Osamu Minami
Executive Director
Sekisui House Residential Investment Corporation
3-1-31 Minami-Aoyama, Minato-ku, Tokyo- 10 -

Attachment 7.1 (Proposed Amendments to SHR’s Articles of Incorporation)
Proposed Amendments to the Articles of Incorporation(Proposed amendments are underlined.)
Current Articles of Incorporation
Proposed Amendments
Article 5 Total Number of Issuable Investment Units, Article 5 Total Number of Issuable Investment Units,
Etc.
Etc.
1. The total number of issuable investment units for
the Investment Corporation is ten million(10,000,000) units.
2. - 3. (omitted)

1. The total number of issuable investment units for
the Investment Corporation is twenty million(20,000,000) units.
2. - 3. (unchanged)

Article 9 General Meeting of Unitholders

Article 9 General Meeting of Unitholders

1. A general meeting of unitholders of the Investment
Corporation shall be held within the 23 wards ofTokyo, and shall be convened on July 1, 2018 andonwards without delay, and subsequently beconvened on July 1 and onwards every two years
without delay. In addition, the general meetings ofunitholders may be held from time to time when it
is necessary.
2. (omitted)

1. A general meeting of unitholders of the Investment
Corporation shall be held within the 23 wards ofTokyo, and shall be convened on January 1, 2020and onwards without delay, and subsequently beconvened on January 1 every two years andonwards without delay. In addition, the general
meetings of unitholders may be held from time totime when it is necessary.
2. (unchanged)

Article 12 Record Date

Article 12 Record Date

1. If the Investment Corporation convenes a general
meeting of unitholders pursuant to the first sentenceof Paragraph 1 of Article 9, the Investment
Corporation shall deem the unitholders recorded orregistered in the final register of unitholders as ofthe end of April in 2018 and subsequently as of theend of April in every two years to be theunitholders who are entitled to exercise their rights
at such general meeting of unitholders. In addition
to such case, if a general meeting of unitholders is
to be held on a day within three months after theimmediately preceding Accounting Settlement Day(as defined in Article 45; the same shall apply
hereinafter), the Investment Corporation shall deemthe unitholders recorded or registered in the final
register of unitholders for such Accounting
Settlement Day to be the unitholders who areentitled to exercise their rights at such general
meeting of unitholders.
2. (omitted)

1. If the Investment Corporation convenes a general
meeting of unitholders pursuant to the first sentenceof Paragraph 1 of Article 9, the Investment
Corporation shall deem the unitholders recorded orregistered in the final register of unitholders as ofthe end of October in 2019 and subsequently as ofthe end of October in every two years to be theunitholders who are entitled to exercise their rights
at such general meeting of unitholders. In addition
to such case, if a general meeting of unitholders is
to be held on a day within three months after theimmediately preceding Accounting Settlement Day(as defined in Article 45; the same shall apply
hereinafter), the Investment Corporation shall deemthe unitholders recorded or registered in the final
register of unitholders for such Accounting
Settlement Day to be the unitholders who areentitled to exercise their rights at such general
meeting of unitholders.
2. (unchanged)

Article 31 Basic Policy of Asset Management

Article 31 Basic Policy of Asset Management

The Investment Corporation shall manage its assets byinvesting continuously and principally in Real Estates
and Other Assets (as defined in Paragraph 1 of Article
32). The purpose of the Investment Corporation is toachieve mutual growth and prosperity together with all
stakeholders such as unitholders and tenant companies,
aiming at providing high-quality social capital andmaximizing unitholder value through asset
management that pursues stable earnings over the

The Investment Corporation shall manage its assets byinvesting continuously and principally in Real Estates
and Other Assets (as defined in Paragraph 1 of Article
32). The purpose of the Investment Corporation is toachieve mutual growth and prosperity together with all
stakeholders such as unitholders and tenants, aiming at
providing high-quality social capital and maximizing
unitholder value through asset management that
pursues stable earnings over the medium to long termand steady growth in the Managed Assets.

- 11 -

Current Articles of Incorporation
medium to long term and steady growth in theManaged Assets.

Proposed Amendments

Article 32 Categories, Purpose and Scope of Target
Assets of Asset Management

Article 32

1. (omitted)
2. Besides the Real Estates and Other Assets, theInvestment Corporation may invest in the following
Specified Assets:(Add)

1. (unchanged)
2. Besides the Real Estates and Other Assets, theInvestment Corporation may invest in the following
Specified Assets:(a) Trust beneficiary rights in trust of real estate,real estate lease rights or surface rights(including comprehensive trust beneficiary rights
in trust of the same together with money
associated with the real estates, and also
including trust beneficiary rights in trust of such
trust beneficiary rights, but excluding thosefalling under the Real Estates and Other Assets);(b) (unchanged)(c) Equity interests in an agreement where one
party makes a financial contribution to anotherparty to manage the Real Estates and Other
Assets or the assets listed in the Items (a) and(b), and the other party manages that
contribution principally as an investment in thoseassets and distributes profits from suchmanagement (“Equity Interests in Silent
Partnership on Real Estate”)(d) (unchanged)(e) Real estate, real estate lease rights or surface
rights under the laws and regulations of a foreigncounty, or trust beneficiary rights in trust of only
real estate, real estate lease rights or surface
rights or the assets listed in Items (a) to (d)established under the laws and regulations of aforeign country(f) Preferred equity securities (as set forth in the
Act on Securitization of Assets (Law No. 105 of
1998, as amended) (the “Asset SecuritizationAct”) (limited to those the purpose of which is toinvest the amount exceeding the half of theassets in the Real Estates and Other Assets or theassets listed in Items (a) to (e) (the “Real EstateRelated Assets”))(g) (unchanged)(h) (unchanged)(i) Beneficiary certificates of a specified purpose
trust (as set forth in the Asset Securitization Act)(excluding the Real Estates and Other Assets, theassets falling under Item (a), (b) or (d) and theassets listed in Item (e) which are to be invested
in the Real Estates and Other Assets or the assets
listed in Item (a), (b) or (c)) (limited to those thepurpose of which is to invest the amountexceeding the half of the assets in the Real
Estate-Related Assets)(j) Assets of the same nature as those listed in Item(f) or (i) established under the laws and(a) (omitted)(b) Equity interests in an agreement where one
party makes a financial contribution to anotherparty to manage the Real Estates and Other
Assets or the assets listed in the preceding item,
and the other party manages that contribution
principally as an investment in those assets anddistributes profits from such management(“Equity Interests in Silent Partnership on Real
Estate”)(c) (omitted)(d) Real estate, real estate lease rights or surface
rights under the laws and regulations of a foreigncounty, or trust beneficiary rights in trust of realestate, real estate lease rights or surface rights or
the assets listed in Items (a) to (c) establishedunder the laws and regulations of a foreigncountry(e) Preferred equity securities (as set forth in the
Act on Securitization of Assets (Law No. 105 of
1998, as amended) (the “Asset SecuritizationAct”) (limited to those the purpose of which is toinvest the amount exceeding the half of theassets in the Real Estates and Other Assets or theassets listed in Items (a) to (d) (the “Real EstateRelated Assets”))(f) (omitted)(g) (omitted)(h) Beneficiary certificates of a specified purpose
trust (as set forth in the Asset Securitization Act)(excluding the Real Estates and Other Assets, theassets falling under Item (a) or (c) and the assets
listed in Item (d) which are to be invested in theReal Estates and Other Assets or the assets listed
in Item (a) or (b)) (limited to those the purposeof which is to invest the amount exceeding thehalf of the assets in the Real Estate-Related
Assets);(i) Assets of the same nature as those listed in Item(e) or (h) established under the laws and- 12 -

Categories, Purpose and Scope of Target
Assets of Asset Management

Current Articles of Incorporation
regulations of a foreign country (limited to thosethe purpose of which is to invest the amountexceeding the half of the assets in the Real
Estate-Related Assets)(j) (omitted)(k) (omitted)(l) Monetary claims (excluding the assets listed in
Item (j) or (k))(m) (omitted)(n) (omitted)(o) (omitted)(p) (omitted)(q) (omitted)(r) (omitted)(s) Beneficiary certificates of a bond investment
trust (which are beneficiary certificates of asecurities investment trust as set forth in theInvestment Trusts Act which are intended to be
managed as an investment in the assets, etc.
listed in Item (m), (n), (q), (u) or (v))(t) (omitted)(u) (omitted)(v) (omitted)(w) Trust beneficiary rights in monetary trusts, thepurpose of which is to manage the trust assets asinvestment in the assets as set forth in Items (j)to (v)(x) (omitted)(y) (omitted)(z) (omitted)
3. In addition to the Specified Assets as set forth inParagraphs 1 and 2 above, the Investment
Corporation may invest in the following assets:(a) - (c) (omitted)(d) Movables as set forth in the Civil Code (ActNo. 89 of 1896, as amended) (the “Civil Code”),such as facilities, equipment, and other items
attached to the Real Estate-Related Assets(excluding those set forth in Item (z) of
Paragraph 2 of Article 32)(e) - (n) (omitted)
4.
(omitted)

Proposed Amendments
regulations of a foreign country (limited to thosethe purpose of which is to invest the amountexceeding the half of the assets in the Real
Estate-Related Assets)(k) (unchanged)(l) (unchanged)(m) Monetary claims (excluding the assets listed in
Item (k) or (l))(n) (unchanged)(o) (unchanged)(p) (unchanged)(q) (unchanged)(r) (unchanged)(s) (unchanged)(t) Beneficiary certificates of a bond investment
trust (which are beneficiary certificates of asecurities investment trust as set forth in theInvestment Trusts Act which are intended to be
managed as an investment in the assets, etc.
listed in Item (n), (o), (r), (v) or (w))(u) (unchanged)(v) (unchanged)(w) (unchanged)(x) Trust beneficiary rights in monetary trusts, thepurpose of which is to manage the trust assets asinvestment in the assets as set forth in Items (k)to (w)(y) (unchanged)(z) (unchanged)(aa) (unchanged)
3. In addition to the Specified Assets as set forth inParagraphs 1 and 2 above, the Investment
Corporation may invest in the following assets:(a)- (c) (unchanged)(d) Movables as set forth in the Civil Code (ActNo. 89 of 1896, as amended) (the “Civil Code”),such as facilities, equipment, and other items
attached to the Real Estate-Related Assets(excluding those set forth in Item (aa) of
Paragraph 2 of Article 32)(e) - (n) (unchanged)
4.
(unchanged)

Article 33 Investment Policy

Article 33 Investment Policy

1. The Investment Corporation shall position nonresidential, business purpose real estates that areused mainly as office buildings, retail properties orhotels, etc. (the “Commercial Properties”) as its
central investment target.

1.

2. The investment area of the Commercial Properties
shall be mainly in Japan but the Investment
Corporation may invest overseas.
(Add)- 13 -The Investment Corporation shall position realestates mainly for residential use (the“Residential Properties”) and non-residential,
business purpose real estates that are used mainly
as office buildings, hotels and retail properties,
etc. (the “Commercial Properties”) as its primary
investment target.
2. The investment area of the Residential Properties
and the Commercial Properties shall be mainly inJapan but the Investment Corporation may invest
overseas.

Current Articles of Incorporation

3. The main geographical areas for investment of theCommercial Properties in Japan shall be the Three
Major Metropolitan Areas (which collectively
refers to Greater Tokyo, Osaka Area and NagoyaArea) centering on the 23 wards of Tokyo, Osaka
City and Nagoya City. The main geographicalareas for investment of the overseas Commercial
Properties are Singapore, Australia and the U.S., aswell as other countries and regions where thepopulation and economy are expected to grow.
(Add)

Proposed Amendments
3. The main geographical areas for investment of the
Residential Properties in Japan shall be Greater
Tokyo and major cities in Japan other than Greater
Tokyo such as the ordinance-designated cities, andcommuting areas around them.
4. The main geographical areas for investment of theCommercial Properties in Japan shall be the Three
Major Metropolitan Areas (which collectively
refers to Greater Tokyo, Osaka Area and NagoyaArea) centering on the 23 wards of Tokyo, Osaka
City and Nagoya City and major cities in Japanother than the Three Major Metropolitan Areas.

5. The main geographical areas for investment of theoverseas Residential Properties and Commercial
Properties are Singapore, Australia and the U.S., aswell as other countries and regions where thepopulation and economy are expected to grow.
Article 34 Investment Restrictions

Article 34 Investment Restrictions

1. (omitted)
2. The Investment Corporation shall makeinvestments in the rights related to derivatives
transactions as set forth in Item (y) of Paragraph 2
of Article 32 only for the purpose of hedging
exchange risk, price fluctuation risk, interest raterisk and other risk factors arising from theManaged Assets or liabilities of the Investment
Corporation.
3. (omitted)

1. (unchanged)
2. The Investment Corporation shall makeinvestments in the rights related to derivatives
transactions as set forth in Item (z) of Paragraph 2
of Article 32 only for the purpose of hedging
exchange risk, price fluctuation risk, interest raterisk and other risk factors arising from the Managed
Assets or liabilities of the Investment Corporation.
3.

Article 39 Method of and Standards for Asset
Evaluation

Article 39 Method of and Standards for Asset
Evaluation

The method of and standards for asset evaluation of theInvestment Corporation shall be determined by thetype of the Managed Asset, and shall be as follows as a
general rule.
(a) Real estate, real estate lease rights andsurface rights of the Real Estates andOther Assets as set forth in Paragraph 1 of
Article 32; and those under the laws andregulations of a foreign country as set
forth in Item (d) of Paragraph 2 of Article
32:(omitted)(b) Trust beneficiary rights in trust of realestate, real estate lease rights and surface
rights of the Real Estates and Other Assets
as set forth in Paragraph 1 of Article 32;
and those only in trust of real estate, realestate lease rights and surface rights
established under the laws and regulationsof a foreign country as set forth in Item (d)of Paragraph 2 of Article 32:

The method of and standards for asset evaluation of theInvestment Corporation shall be determined by the typeof the Managed Asset, and shall be as follows as a
general rule.
(a) Real estate, real estate lease rights andsurface rights of the Real Estates andOther Assets as set forth in Paragraph 1 of
Article 32; and those under the laws andregulations of a foreign country as set
forth in Item (e) of Paragraph 2 of Article
32:(unchanged)(b) Trust beneficiary rights in trust of realestate, real estate lease rights and surface
rights as set forth in Paragraph 1 and Item(a) of Paragraph 2 of Article 32; and trust
beneficiary rights in trust of real estate,real estate lease rights and surface rights
established under the laws and regulationsof a foreign country as set forth in Item (e)of Paragraph 2 of Article 32:- 14 -(unchanged)

Current Articles of Incorporation(omitted)(c) Trust beneficiary rights in monetary trusts, thepurpose of which is to manage the trust assets as
an investment in real estate, real estate leaserights or surface rights as set forth in Paragraph 2
of Article 32, Item (a); and those establishedunder the laws and regulations of a foreigncountry as set forth in Item (d) of Paragraph 2 ofArticle 32:(omitted)(d) Equity Interests in Silent Partnership on Real
Estate as set forth in Item (b) of Paragraph 2 ofArticle 32; and those established under the laws
and regulations of a foreign country as set forthin Item (d) of Paragraph 2 of Article 32:(omitted)(e) Trust beneficiary rights in monetary trusts, thepurpose of which is to manage the trust assets
principally as an investment in Equity Interests
in Silent Partnership on Real Estate; and thoseestablished under the laws and regulations of aforeign country as set forth in Item (d) of
Paragraph 2 of Article 32:(omitted)(f) (omitted)(g) Monetary claims as set forth in Item (l) of
Paragraph 2 of Article 32:(omitted)(h) Rights related to derivatives transactions as set
forth in Item (y) of Paragraph 2 of Article 32:(omitted)(i) (omitted)
Article 40

Value in Securities Registration
Statements, Securities Reports and AssetManagement Reports

If making evaluations in a way that differs from themethods set forth in Article 39 for the purposes ofrecording a value in a securities registration
statement, securities report and asset management
report, etc., evaluations shall be made in the followingway.
(a) Real estate, real estate lease rights and surface
rights of the Real Estates and Other Assets as set
forth in Paragraph 1 of Article 32; those under
the laws and regulations of a foreign country as
set forth in Item (d) of Paragraph 2 of Article 32;
and those held by the Corporation Holding- 15 -

Proposed Amendments(unchanged)(c) Trust beneficiary rights in monetary trusts, thepurpose of which is to manage the trust assets as
an investment in real estate, real estate leaserights or surface rights as set forth in Item (b) of
Paragraph 2 of Article 32; and trust beneficiaryrights in monetary trusts established under thelaws and regulations of a foreign country as set
forth in Item (e) of Paragraph 2 of Article 32, thepurpose of which is to manage the trust assets as
an investment in real estate, real estate leaserights or surface rights as set forth in Item (b) of
Paragraph 2 of Article 32:(unchanged)(d) Equity Interests in Silent Partnership on Real
Estate as set forth in Item (c) of Paragraph 2 ofArticle 32; and those established under the laws
and regulations of a foreign country as set forthin Item (e) of Paragraph 2 of Article 32:(unchanged)(e) Trust beneficiary rights in monetary trusts, thepurpose of which is to manage the trust assets
principally as an investment in Equity Interests
in Silent Partnership on Real Estate as set forthin Item (d) of Paragraph 2 of Article 32; and trust
beneficiary rights in monetary trusts establishedunder the laws and regulations of a foreigncountry as set forth in Item (e) of Paragraph 2 ofArticle 32, the purpose of which is to manage thetrust assets as an investment in Equity Interests
in Silent Partnership on Real Estate as set forthin Item (d) of Paragraph 2 of Article 32:(unchanged)(f) (unchanged)(g) Monetary claims as set forth in Item (m) of
Paragraph 2 of Article 32:(unchanged)(h) Rights related to derivatives transactions as set
forth in Item (z) of Paragraph 2 of Article 32:(unchanged)(i) (unchanged)
Article 40

Value in Securities Registration
Statements, Securities Reports and AssetManagement Reports

If making evaluations in a way that differs from themethods set forth in Article 39 for the purposes ofrecording a value in a securities registration statement,
securities report and asset management report, etc.,
evaluations shall be made in the following way.
(a) Real estate, real estate lease rights and surface
rights of the Real Estates and Other Assets as set
forth in Paragraph 1 of Article 32; those under thelaws and regulations of a foreign country as set
forth in Item (e) of Paragraph 2 of Article 32; andthose held by the Corporation Holding Overseas

Current Articles of Incorporation
Overseas Real Estate as set forth in Paragraph 1
of Article 32:(omitted)(b) Trust beneficiary rights in trust of real estate,real estate lease rights and surface rights of theReal Estates and Other Assets as set forth inParagraph 1 of Article 32; and trust beneficiaryrights in monetary trusts, the purpose of which is
to manage the trust assets principally as aninvestment in real estate, real estate lease rights
or surface rights as set forth in Item (a) of
Paragraph 2 of Article 32; and trust beneficiaryrights only in trust of real estate, real estate leaserights or surface rights established under thelaws and regulations of a foreign country as set
forth in Item (d) of Paragraph 2 of Article 32;
and trust beneficiary rights in monetary trusts,
the purpose of which is to manage the trust
assets principally as an investment in real estate,real estate lease rights or surface rights as set
forth in Item (a) of Paragraph 2 of Article 32:(omitted)(c) Equity Interests in Silent Partnership on Real
Estate as set forth in Item (b) of Paragraph 2 ofArticle 32; and trust beneficiary rights inmonetary trusts, the purpose of which is to
manage the trust assets principally as aninvestment in Equity Interests in Silent
Partnership on Real Estate as set forth in Item(c) of Paragraph 2 of Article 32; and Equity
Interests in Silent Partnership on Real Estateestablished under the laws and regulations of aforeign country as set forth in Item (d) of
Paragraph 2 of Article 32; and trust beneficiaryrights in monetary trusts, the purpose of whichis to manage the trust assets as an investment in
the Equity Interest in Silent Partnership on Real
Estate as set forth in Item (c) of Paragraph 2 ofArticle 32:(omitted)

Proposed Amendments
Real Estate as set forth in Paragraph 1 of Article
32:(unchanged)(b) Trust beneficiary rights in trust of real estate,real estate lease rights and surface rights as set
forth in Paragraph 1 and Item (a) of Paragraph 2
of Article 32; and trust beneficiary rights inmonetary trusts, the purpose of which is to
manage the trust assets as an investment in realestate, real estate lease rights or surface rights as
set forth in Item (b) of Paragraph 2 of Article 32;
and trust beneficiary rights in trust of real estate,real estate lease rights or surface rights
established under the laws and regulations of aforeign country as set forth in Item (e) of
Paragraph 2 of Article 32; and trust beneficiaryrights in monetary trusts, the purpose of which is
to manage the trust assets as an investment inreal estate, real estate lease rights or surface
rights as set forth in Item (b) of Paragraph 2 ofArticle 32:(unchanged)(c) Trust beneficiary rights in monetary trusts, thepurpose of which is to manage the trust assets as
an investment in Equity Interests in Silent
Partnership on Real Estate as set forth in Items(c) and (d) of Paragraph 2 of Article 32; and trust
beneficiary rights in monetary trusts establishedunder the laws and regulations of a foreigncountry as set forth in Item (e) of Paragraph 2 ofArticle 32, the purpose of which is to manage thetrust assets as an investment in Equity Interests
in Silent Partnership on Real Estate as set forthin Items (c) and (d) of Paragraph 2 of Article 32:

Article 52 Standards for Fee Payment to
Accounting Auditor

Article 52 Standards for Fee Payment to
Accounting Auditor

The Investment Corporation shall pay fees to theaccounting auditor in an amount determined by
the board of directors that is no more than 20
million yen for each Accounting Settlement Day
subject to audit, by the last day of February andAugust each year for the period of six months up
to such day, through bank transfer to an accountdesignated by the accounting auditor.

The Investment Corporation shall pay fees to theaccounting auditor in an amount determined by
the board of directors that is no more than 25
million yen for each Accounting Settlement Day
subject to audit, by the last day of February andAugust each year for the period of six months up
to such day, through bank transfer to an accountdesignated by the accounting auditor.

(Add)(unchanged)

Article 55 Effectuation of Amendment
The amendments in Paragraph 1 of Article 5 andArticles 31, 33 and 52 in these Articles ofIncorporation shall take effect on the effective date
- 16 -

Current Articles of Incorporation

Proposed Amendmentsof the absorption-type merger between theInvestment Corporation as the surviving
corporation and Sekisui House Residential
Investment Corporation as the absorbed
corporation under the merger agreement dated
January 24, 2018 between the Investment
Corporation and Sekisui House Residential
Investment Corporation (the “Merger”), subject toeffectuation of the Merger. This Article shall bedeleted after the amendments in these Articles ofIncorporation takes effect pursuant to this Article.

- 17 -

Current Articles of Incorporation
Attachment
Management Fee to Asset Management Company

Proposed Amendments
Attachment
Management Fee to Asset Management Company

1. Management Fee I (Ongoing Operational and
1. Management Fee I (Ongoing Operational andManagement Fee I)
Management Fee I)
Management Fee I shall be calculated by multiplying
Management Fee I shall be calculated by multiplying(i) the total net assets of the Investment Corporation on (i) the total net assets (less the amount equivalent tothe balance sheet (limited to those approved by the
unamortized positive goodwill) of the Investmentboard of directors pursuant to Article 131, Paragraph 2 Corporation on the balance sheet (limited to thoseof the Investment Trusts Act) for the latest Accounting approved by the board of directors pursuant to Article
Settlement Day by (ii) a rate separately agreed by the131, Paragraph 2 of the Investment Trusts Act) for theInvestment Corporation and the Asset Management
latest Accounting Settlement Day by (ii) a rate
Company (up to 0.5% per annum), on a per diem basis. separately agreed by the Investment Corporation andIn this calculation method, the actual number of days in the Asset Management Company (up to 0.5% per
the relevant business term shall be assumed to be 365
annum), on a per diem basis. In this calculation
days in a year and any fraction less than one yen shall method, the actual number of days in the relevant
be rounded down.
business term shall be assumed to be 365 days in a year
and any fraction less than one yen shall be rounded
down.
2. Management Fee II (Ongoing Operational andManagement Fee II)Management Fee II for each business term shall be (i)the distributable amount before deduction ofManagement Fee II for the relevant business term of
the Investment Corporation (i.e., the amount of the net
profit for the period before tax on the profit and loss
statement (limited to those approved by the board of
directors pursuant to Article 131, Paragraph 2 of theInvestment Trusts Act; the same shall apply
hereinafter) plus the amount of Management Fee II for
the business term, after a loss carried forward iscompensated, if any) divided by (ii) the total number ofoutstanding units as of the Accounting Settlement Dayof the relevant business term, and multiplied by (iii) (a)the operating profits before deduction of Management
Fee II (i.e., the amount of the operating profits on the
profit and loss statement plus the amount ofManagement Fee II for the business term) and (b) arate separately agreed by the Investment Corporationand the Asset Management Company (up to 0.004%).
In this calculation method, any fraction less than one
yen shall be rounded down, and divisions shall be doneat the end of the calculation, and the lower limit shallbe zero yen.

2. Management Fee II (Ongoing Operational andManagement Fee II)Management Fee II for each business term shall be (i)the distributable amount before deduction ofManagement Fee II for the relevant business term of
the Investment Corporation (i.e., the amount of the net
profit for the period before tax (after adding the amountof amortization of goodwill and deducting the gains on
negative goodwill incurred) on the profit and loss
statement (limited to those approved by the board of
directors pursuant to Article 131, Paragraph 2 of theInvestment Trusts Act; the same shall apply
hereinafter) plus the amount of Management Fee II for
the business term (including the amount of the nondeductible consumption tax on Management Fee II),after a loss carried forward is compensated, if any)
divided by (ii) the total number of issued andoutstanding units as of the Accounting Settlement Dayof the relevant business term (the “Distributable
Amount per Unit”), and multiplied by (iii) (a) the
operating profits before deduction of Management Fee
II (i.e., the amount of the operating profits on the profit
and loss statement plus the amount of amortization of
goodwill and Management Fee II for the business term(including the amount of the non-deductible
consumption tax on Management Fee II)) and (b) a rate
separately agreed by the Investment Corporation and
the Asset Management Company (up to 0.004%). In
this calculation method, any fraction less than one yen
shall be rounded down, and divisions shall be done at
the end of the calculation, and the lower limit shall be
zero yen.

3. Management Fee III (Acquisition Fee)Management Fee III shall be calculated by multiplying(i) the trading value for the acquisition of the Real
Estate-Related Assets (excluding the consumption tax,

3. Management Fee III (Acquisition Fee)Management Fee III shall be calculated by multiplying(i) the trading value for the acquisition of the Real
Estate-Related Assets (excluding the consumption tax,

- 18 -

Current Articles of Incorporation
other similar taxes and expenses and the like) by (ii) a
rate separately agreed between the Investment
Corporation and the Asset Management Company (upto 0.5%) (in the case of acquisition from any interested
party as set forth in the “Rules for Transactions with
Interested Parties” of the Asset Management Company,
such rate shall be up to 0.25%), any fraction less than
one yen being rounded down.

Proposed Amendments
other similar taxes and expenses and the like) by (ii) a
rate separately agreed between the Investment
Corporation and the Asset Management Company (upto 0.5%) (in the case of acquisition from any interested
party as set forth in the “Rules for Transactions with
Interested Parties” of the Asset Management Company,
there shall be no Acquisition Fee), any fraction lessthan one yen being rounded down.

4. Management Fee IV (Disposition Fee)Management Fee IV shall be calculated by multiplying(a) the trading value for the sale of the Real EstateRelated Assets (excluding the consumption tax, othersimilar taxes and expenses and the like) by (b) a rate
separately agreed between the Investment Corporationand the Asset Management Company (up to 0.5%) (inthe case of sale to any interested party as set forth in“Rules for Transactions with Interested Parties” of theAsset Management Company, there shall be nodisposition fee), any fraction less than one yen being
rounded down.

4. Management Fee IV (Disposition Fee)Management Fee IV shall be calculated by multiplying(i) the trading value for the disposition of the Real
Estate-Related Assets (excluding the consumption tax,other similar taxes and expenses and the like) by (ii) a
rate separately agreed between the Investment
Corporation and the Asset Management Company (upto 0.5%) (in the case of disposition to any interested
party as set forth in “Rules for Transactions with
Interested Parties” of the Asset Management Company,
there shall be no disposition fee), any fraction less than
one yen being rounded down.

(Add)

5. Management Fee V (Merger Fee)
In a consolidation-type merger or absorption-typemerger (collectively, a “merger”) between theInvestment Corporation and another investment
corporation, if such merger takes effect after the AssetManagement Company investigates and assesses theassets and other properties held by such investment
corporation and conducts any other business associatedwith the merger, Management Fee V shall be calculated
by multiplying (i) the then assessed value of the Real
Estate-Related Assets held by such investment
corporation when such merger takes effect by (ii) a rate
separately agreed between the Investment Corporationand the Asset Management Company (up to 0.8%).

5. Timing of Payment of Management Fee
6. Timing of Payment of Management Fee
Management Fee I and Management Fee II shall beManagement Fee I and Management Fee II shall be paid
paid within three months from the Accounting
within three months from the Accounting Settlement
Settlement Day of the relevant business term of the
Day of the relevant business term of the Investment
Investment Corporation.
Corporation.
Management Fee III shall be paid on or before the last Management Fee III shall be paid on or before the last
day of the following month of the month in which the day of the following month of the month in which theInvestment Corporation has acquired the relevant asset. Investment Corporation has acquired the relevant asset.
Management Fee IV shall be paid on or before the last Management Fee IV shall be paid on or before the last
day of the following month of the month in which the day of the following month of the month in which theInvestment Corporation has sold the relevant asset.
Investment Corporation has dispositioned the relevant
asset.
Management Fee V shall be paid within two months
after the merger takes effect.
(Add)
(Add)

7. Adjustment Provision(1) If the Investment Corporation acquires its own
investment units and holds any undisposed or unretired
treasury investment units as of the Accounting
Settlement Day for the business term in which theInvestment Corporation acquired such investment- 19 -

Current Articles of Incorporation

Proposed Amendments
units, the number of the treasury investment units of
the Investment Corporation shall be excluded from thetotal number of issued and outstanding investment
units as of such Accounting Settlement Day for the
purpose of calculation of the Distributable Amount per
Unit for the Management Fee II.
(2) In the case of a split of the investment units of theInvestment Corporation that increases the total number
of issued and outstanding investment units,
Management Fee II for a business term ending on orafter the day on which such split of the investment
units takes effect shall be calculated by making an
adjustment in which the Distributable Amount per Unit
is multiplied by the Split Ratio (as defined below)
related to the total number of issued and outstanding
investment units.
In this paragraph (2),“Split Ratio” shall be calculated, in the case of any splitof the investment units of the Investment Corporationthat increases the total number of issued andoutstanding investment units, by dividing (i) the total
number of issued and outstanding investment units
immediately after such split of the investment units
takes effect by (ii) the total number of issued andoutstanding investment units immediately before such
split of the investment units takes effect.

(Add)

(Add)

(3) In the case of a Rights Offering (as defined below)that increases the total number of issued andoutstanding investment units, Management Fee II for abusiness term ending on or after the issue date of such
Rights Offering shall be calculated by making an
adjustment in which the Distributable Amount per Unit
is multiplied by the Ratio of Allotment without
Contribution (as defined below).
In this paragraph (3),“Rights Offering” means issuance of new investment
units as a result of the exercise of investment unit
acquisition rights related to an allotment without
contribution to unitholders.
“Ratio of Allotment without Contribution” means aratio to be calculated in the following formula in thecase of a Rights Offering.
＜Calculation Formula＞
Ratio of Allotment without Contribution ＝ A/B
A: Number of the total number of issued andoutstanding investment units immediately after
such Rights Offering less the Number of Units
Deemed to Be Issued at Market Price (as defined
below)
B: Total number of issued and outstanding investment
units immediately before such Rights Offering“Number of Units Deemed to Be Issued at Market
Price” shall be the Number of Incremental Units(as defined below) (any fraction less than one (1)unit shall be rounded down) multiplied by the ratio
obtained by dividing (i) the amount to be paid perunit at the time of exercising investment unit
- 20 -

Current Articles of Incorporation

Proposed Amendments
acquisition rights allotted without contribution insuch Rights Offering by (ii) a Market Price per
Unit (as defined below), or by another ratio
determined by the board of directors, in the case of
Rights Offering.
“Market Price per Unit” means the closing price of an
ordinary market transaction of the investment units of
the Investment Corporation on the Tokyo Stock
Exchange, Inc. on the last day of the exercise period of
the investment unit acquisition rights allotted without
contribution in such Rights Offering (or, if there is no
closing price on that day, the closing price of theimmediately preceding day), in the case of Rights
Offering.
“Number of Incremental Units” means the number ofunits increased as a result of such Rights Offering in
the case of Rights Offering.

- 21 -

Attachment 7.2 (Proposed Amendments to SHI’s Articles of Incorporation)
Proposed Amendments to the Articles of Incorporation(Proposed amendments are underlined.)
Current Articles of Incorporation
Proposed Amendments
Article 9 General Meeting of Unitholders
Article 9 General Meeting of Unitholders
1-2. (omitted)
3. A general meeting of unitholders shall be convened
on June 10, 2016, or without delay thereafter, andsubsequently be convened on June 10 or without
delay thereafter every two years. In addition, ageneral meeting of unitholders may be held fromtime to time when it is necessary.

1-2. (unchanged)
3. A general meeting of unitholders shall be convened
on June 10, 2016, or without delay thereafter, andsubsequently be convened on July 10 or without
delay thereafter every two years. In addition, ageneral meeting of unitholders may be held fromtime to time when it is necessary.

4.

4.

(omitted)(unchanged)

Article 15 Record Date

Article 15 Record Date

1. If the Investment Corporation convenes a general
meeting of unitholders pursuant to the first sentenceof Paragraph 3 of Article 9, the Investment
Corporation shall deem the unitholders recorded orregistered in the final register of unitholders as ofthe end of March 2016 and subsequently as of theend of March every two years to be the unitholders
who are entitled to exercise their rights at suchgeneral meeting of unitholders.
2-4. (omitted)

1. If the Investment Corporation convenes a general
meeting of unitholders pursuant to the first sentenceof Paragraph 3 of Article 9, the Investment
Corporation shall deem the unitholders recorded orregistered in the final register of unitholders as ofthe end of April 2018 and subsequently as of theend of April every two years to be the unitholders
who are entitled to exercise their rights at suchgeneral meeting of unitholders.
2-4. (unchanged)

Article 33 Accounting Settlement Day

Article 33 Accounting Settlement Day

The business term of the Investment Corporation shallbe from April1 to the last day of September, and from
October 1 to the last day of March in the following
year, each year (the last day of each business term ishereinafter referred to as the “Accounting SettlementDay”).

The business term of the Investment Corporation shallbe from May 1 to the last day of October, and from
November 1 to the last day of April in the following
year, each year (the last day of each business term ishereinafter referred to as the “Accounting SettlementDay”).

(Add)

Chapter 9 Supplementary Provisions(Add)

Article 41 Changes to Business Term and Accounting
Settlement Day
Regardless of the provisions of Article 33, the businessterm of the Investment Corporation for the 25 th fiscal
period shall be from October 1, 2017 to the last day ofApril 2018.

- 22 -

Attachment 12.4(1) (Pipeline Support Companies)
1. Sekiwa Real Estate, Ltd.
2. Sekiwa Real Estate Kansai, Ltd.
3. Sekiwa Real Estate Kanto, Ltd.
4. Sekiwa Real Estate Kyushu, Ltd.
5. Sekiwa Real Estate Chugoku, Ltd.
6. Sekiwa Real Estate Chubu, Ltd.
7. Sekiwa Real Estate Tohoku, Ltd.

- 23 -

Attachment 12.4(2) (Pipeline Support Agreements)
1. The Exclusive Right to Negotiate Agreement among SHI, SHAM and Sekiwa Real Estate, Ltd. dated January
11, 2012
2. The Exclusive Right to Negotiate Agreement among SHI, SHAM and Sekiwa Real Estate Kansai, Ltd. dated
January 11, 2012
3. The Exclusive Right to Negotiate Agreement among SHI, SHAM and Sekiwa Real Estate Kanto, Ltd. dated
August 1, 2013
4. The Exclusive Right to Negotiate Agreement among SHI, SHAM and Sekiwa Real Estate Kyushu, Ltd. dated
January 11, 2012
5. The Exclusive Right to Negotiate Agreement among SHI, SHAM and Sekiwa Real Estate Chugoku, Ltd.
dated July 31, 2014
6. The Exclusive Right to Negotiate Agreement among SHI, SHAM and Sekiwa Real Estate Chubu, Ltd. dated
January 11, 2012
7. The Exclusive Right to Negotiate Agreement among SHI, SHAM and Sekiwa Real Estate Tohoku, Ltd. dated
July 31, 2014

- 24 -

Attachment 12.6(1) (Properties to be Acquired)(1) Prime Maison Shirokanedai Tower
Prime Maison
Planned acquisition priceShirokanedai Tower(million yen)
Form of right
Trust beneficiary interest
Trustee(Address) 1-1-17 Kamiosaki, Shinagawa-ku, Tokyo
Location(Lot number) 1-537-40 Kamiosaki, Shinagawa-ku, Tokyo
Form ofForm ofOwnershipownershipownership
Commercial district,
Land use
Category 1 residential
Use
district
district
Total floor
Land
Building area (m2)Structure/
number ofArea (m2)
1,786.53
floorsConstruction
completion
date
Property name

7,950
Undecided

Ownership
Apartment complex
8,896.22
RC, 23FMay 20, 2016(2) Prime Maison Otsuka
Planned acquisition price(million yen)
Form of right
Trust beneficiary interest
Trustee(Address) 1-15-1 Kitaotsuka, Toshima-ku, Tokyo
Location(Lot number) 1-15-4 Kitaotsuka, Toshima-ku, Tokyo
Form ofForm ofOwnershipownershipownership
Property nameLand use
district

Prime Maison Otsuka

Commercial district

Use

Land

Building
Area (m2)649.05

Total floorarea (m2)Structure/
number offloorsConstruction
completion
date

3,700
Undecided

Ownership
Apartment complex andretail store
5,949.18
RC/S, 19F

January 11, 2017(3) Prime Maison Asakusabashi
Prime Maison
Planned acquisition price
Asakusabashi(million yen)
Form of right
Trust beneficiary interest
Trustee(Address) 2-21-8 Yanagibashi, Taito-ku, Tokyo
Location(Lot number) 2-11-18 Yanagibashi, Taito-ku, Tokyo
Form ofForm ofLand
Ownership
Building
ownershipownership
Property name- 25 -

1,680
Undecided

Ownership

Land use
district

Commercial district

Area (m2)Use

422.87

Total floorarea (m2)Structure/
number offloorsConstruction
completion
date

Apartment complex
2,652.02
RC, 13F

October 7, 2016(4) Prime Maison Daikanyama
Prime Maison
Planned acquisition price
Daikanyama(million yen)
Form of right
Trust beneficiary interest
Trustee(Address) 1-9-6 Aobadai, Meguro-ku, Tokyo
Location(Lot number) 1-143-6 Aobadai, Meguro-ku, Tokyo
Form ofForm ofOwnershipownershipownership
Category 1 low-rise
Land use
exclusive residential
Use
district
district
Total floor
Land
Building area (m2)Structure/
number ofArea (m2)
1,041.02
floorsConstruction
completion
date
Property name

2,520
Undecided

Ownership
Apartment complex
2,522.21
RC, 3F/B2F

January 12, 2017(5) Prime Maison Gotenyama West
Prime Maison Gotenyama Planned acquisition priceWest(million yen)
Form of right
Trust beneficiary interest
Trustee(Address) 6-5-8 Kitashinagawa, Shinagawa-ku, Tokyo
Location(Lot number) 6-387-2 Kitashinagawa, Shinagawa-ku, Tokyo
Form ofForm ofOwnershipownershipownership
Category 1 low-rise
Land use
exclusive residential
Use
district
district
Total floor
Land
Building area (m2)Structure/
number ofArea (m2)3,167.72
floorsConstruction
completion
date
Property name- 26 -

3,400
Undecided

Ownership
Apartment complex
5,520.41
RC, 4F/B1F

January 18, 2011

(6) Toyosu Residence
Property nameToyosu Residence

Planned acquisition price(million yen)

6,050

Form of right

Trust beneficiary interest

Trustee

Sumitomo Mitsui Trust
Bank, Limited

Location(Address) 3-5-3 Toyosu, Koto-ku, Tokyo(Lot number) 3-1-43 Toyosu, Koto-ku, Tokyo and one other plot
Form of
Ordinary fixed-term land
Form ofownershiplease rightownership
Land use
district

Industrial district

Use

Land

Building
Area (m2)

8,818.22- 27 -

Total floorarea (m2)Structure/
number offloorsConstruction
completion
date

Ownership
Apartment complex,
office, and retail store
26,364.53
RC, 14F

February 28, 2008

Attachment 12.6(2) (Properties to be Sold)

Usage
Residence-11
Residence-14
Residence-21
Residence-28
Residence-35
Residence-36
Residence-37
Residence-40
Residence-41
Residence-72
Residence-106
Residence-109

Property nameEsty 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- 28 -

Attachment 2

Sekisui House Residential Investment Corporation
24th Fiscal Period (From April 1, 2017 to September 30, 2017)Management Discussion and Analysis
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

Management Discussion and Analysis
1. Changes in Operating Results and Other Management Data
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)24th Fiscal Period(April 1, 2017 September 30, 2017)

mm yen

6,411

6,543

6,693

6,919

6,916

Unit
Accounting Period
Operating revenue[Rent revenue - real estate]

mm yen[6,330][6,332][6,674][6,886][6,916]mm yen

3,667

3,801

3,953

3,858

3,914

mm yen[2,975][3,065][3,218][3,259][3,298]Operating income

mm yen

2,743

2,741

2,739

3,060

3,001

Ordinary income

mm yen

2,211

2,214

2,193

2,502

2,494

Operating expenses[Expenses related to rent business]

Net income(a)

mm yen

2,209

2,210

2,192

2,501

2,493

Total assets(b)

mm yen195,280

198,290203,257

210,166

210,009%[+0.6][+1.5][+2.5][+3.4][-0.1](c)

mm yen91,213

91,26391,292

101,318

101,341[Period-on-period variation]
Net assets[Period-on-period variation]
Unitholders' capital%[-0.0][+0.1][+0.0][+11.0][+0.0]

mm yen88,92588,92588,92598,633

98,633

Investment units issued

(d)

units

1,018,110

1,018,110

1,018,110

1,105,510

1,105,510

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

89,59089,63989,66891,64891,669Total cash distributions(e)

mm yen

2,160

2,163

2,183

2,469

2,492

Cash distribution per unit(e)/(d)[Earnings distribution per unit][Distribution in excess of earnings per unit]

yen

2,122

2,125

2,145

2,234

2,255

yen

[2,122][2,125][2,145][2,234][2,255]

yen

[-]

[-]

[-]

[-]

[-]

Ordinary income to total assets(Note 2)%

1.1 [2.3]

1.1 [2.2]

1.1 [2.2]

1.2 [2.4]

1.2 [2.4]

Return on unitholders' equity(Note 2)%

2.4 [4.8]

2.4 [4.8]

2.4 [4.8]

2.6 [5.2]

2.5 [4.9]

Unitholders' equity ratio(c)/(b)

%

46.7

46.0

44.9

48.2

48.3

[-0.3][-0.7][-1.1][+3.3][+0.1](Note 3)

%

97.7

97.8

99.6

98.7

100.0

(Note 4)

properties

110

108

111

113

113

400,210.45

368,622.60

376,936.98

380,893.44

382,734.80[Period-on-period variation]
Distribution payout ratio[Other reference information]
Number of investment properties

2

Total leasable aream

Period-end occupancy ratio(Note 4)

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

%

96.7

97.2

96.8

97.8

97.1

mm yen

1,431

1,468

1,582

1,606

1,602

mm yen

97

293

302

397

446

mm yen

4,786

4,735

5,038

5,234

5,220

(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 23rd fiscal period, 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.

2. Asset Management Status for the 24th Fiscal Period(1) Brief History of the Investment Corporation
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 retailproperties, 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 inresidential properties, its investment targets were limited to residential properties.
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 Results
During the 24th 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 further strengthening backed by steady improvements in the employment and income
environment, among other factors.
As for the land price trend, in terms of the national average, the range of drop continued to shrink for residential land while turning upward from being
leveled-off last year for commercial land, according to the Prefectural Land Price Survey as of July 1, 2017. Presumably, this is a result of housing demand
being bolstered by policies to support housing acquisition and such amid improving employment situation, and also reflects such factors as growing demand
for stores and hotels due to an increase in the number of foreign tourists and other causes. By area, the commercial land price has shown a generally
stronger upward trend in the three major metropolitan areas (the Greater Tokyo, Osaka Area and Nagoya Area). As for residential land price, it continued torise at almost the same pace as the previous year, though rather slight, in the Greater Tokyo and Nagoya Area while remaining flat in Osaka Area. In regional
areas, both the residential land and commercial land prices in the four regional cities (Sapporo-shi, Sendai-shi, Hiroshima-shi and Fukuoka-shi) showed anincrease at a higher pace than in the three major metropolitan areas, and areas other than these cities also continued to demonstrate a lower rate of pricedecrease.
As for the rental housing market, particularly in the Greater Tokyo / Major Urban Areas, which is the Investment Corporation’s focused investment area, thesupply and demand environment has continued to remain favorable in the face of population inflow from other areas continuing and supply of rental
condominiums remaining low.
As for the real estate transaction market, active transactions continued as overseas investors boosted transaction volume. On the other hand, J-REIT market
saw a decrease in funds raised through public offering against the backdrop of the transaction price level remaining high for all real estate.
Under such circumstances, the Investment Corporation did not make any new acquisitions during the 24th fiscal period. However, it strived to collectinformation on properties that could be subject for acquisition and to strengthen financial base (improvement in profitability) of properties it owned. As aresult, the occupancy ratio of its residential portfolio marked the highest level (period average occupancy ratio: 96.8%, period-end occupancy ratio: 97.0%)
since its listing for a fiscal period ending September, which is a low season; and the figures for the entire portfolio also stood at a high level (period averageoccupancy ratio: 96.9%, period-end occupancy ratio: 97.1%). In addition, rents also showed a trend of increase as in the previous fiscal period.

(3) Changes in the Asset Size
Since no acquisition or disposition was made in the 24th fiscal period, the assets owned by the Investment Corporation remain unchanged since thebeginning of the fiscal period. Therefore, the Investment Corporation owned 113 properties (112 residential properties and 1 retail property) with a totalacquisition price of 206,943 million yen (203,122 million yen for residential properties and 3,820 million yen for the retail property) as of the end of the 24th
fiscal period.

(4) Initiatives on CSR and Realizing a Sustainable Society
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. Furthermore, Sekisui House Asset Management, Ltd. (the “Asset Management Company”) has set up a Sustainability
Committee to see how the policies are followed and assess the effectiveness of implemented measures on a regular basis. In addition, in order to understandwhere our environmental awareness initiatives are positioned, endeavors were made to obtain environmental recognition and certifications by external
assessment organizations, and a system has been established to enable the Investment Corporation to continuously take initiatives on CSR and for realizing
a sustainable society.
In the 24th fiscal period, the Investment Corporation promoted such measures as introduction of LED lighting to its properties, which it had conducted fromtime to time, adoption of energy-efficient air-conditioning units and installation of water-saving equipment, as its initiatives on CSR and environmental
activities. As for obtainment of environmental recognition and certifications by external agencies, the Investment Corporation achieved “Green Star” in the2017 GRESB Assessment of real estate companies, REITs and funds conducted by Global Real Estate Sustainability Benchmark (“GRESB”) (Note) following
the previous year, and also acquired “4 Stars” (five-level rating with the highest being “5 Stars”) in the GRESB Rating which shows a participant’s relative
status of overall GRESB score. Furthermore, GRESB awards the title of “Sector Leader” to real estate companies, REITs and funds with outstanding efforts onsustainability that have received the highest ranking in each sector in each region. The Investment Corporation was selected as “Sector Leader” in the Asia
residential sector (ranked first) for the third consecutive year. In addition, the “GRESB Public Disclosure (five-level rating from “A” to “E”)” was launched thisyear to measure environment, society and governance (ESG) disclosures for more than 450 listed real estate vehicles with coverage of the entire FTSE EPRA/NAREIT Developed Index components. The Investment Corporation has achieved “C,” which is the global average level.
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 “GRESB” is a benchmark system for evaluating sustainability performance in the real estate sector, established in 2009 primarily by major European pension funds, which played a major role in establishing the Principles for Responsible Investment(PRI), for the purpose of enhancing shareholder value by applying environment, society and governance (ESG) considerations to real estate investments.

(5) Summary of Fund Procurement
During the 24th fiscal period, the Investment Corporation borrowed 2,528 million yen (loan period: 8 years) to repay part of a loan totaling 2,705 million yen(loan period: 5 years and 1 month) that matured in August 2017 and extended borrowing periods. The difference between the repaid amount and the loan
amount (177 million yen) was repaid using cash on hand.
As a result of the above, as of the end of the 24th fiscal period, the Investment Corporation’s balance of interest-bearing debt was 105,532 million yen(91,032 million yen in long-term loans payable (including 4,600 million yen in current portion of long-term loans payable) and 14,500 million yen in
investment corporation bonds (including 4,000 million yen in current portion of investment corporation bonds); and the ratio of the balance of borrowings,
investment corporation bonds and interest-bearing lease and guarantee deposits to total assets owned by the Investment Corporation (the “Loan-to-Value
Ratio (LTV)”) was 50.3%.
In addition, the Investment Corporation concluded a commitment line agreement 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.
In addition, the Investment Corporation has been granted the following credit ratings as of December 26, 2017 (the announcement date of this document).
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)(6) Summary of Business Results and Distributions
As a result of these management efforts, the Investment Corporation posted operating revenue of 6,916 million yen, operating income of 3,001 million yen
after deducting such operating expenses as outsourcing expenses, utilities expenses and asset management fees, ordinary income of 2,494 million yen andnet income of 2,493 million yen in the 24th fiscal period. The Investment Corporation decided to distribute the entire amount of the unappropriated retained
earnings, excluding the fractional amount where distribution per unit would be less than 1 yen, with the aim of having the maximum amount of earning
distributions deducted as expenses based on application of the special provisions for taxation on investment corporations (Article 67-15 of the Act on Special
Measures Concerning Taxation). As a result, the cash distribution per unit came to 2,255 yen for the 24th fiscal period.

3. Future Management Policies and Vital Issues(1) Investment Environment
Looking ahead, the Japanese economy is expected to continue to moderately expand as a positive circulation of income and expenditure continues in both
corporate and household economies and domestic demand takes an upward trend against the backdrop of a financial environment under monetary easing
policy so extreme as well as of government spending under the large-scale economic policy.
However, attention must continue to be paid to the risk of the Japanese economy being pushed downward by such factors as the impact of the U.S.
economic policy operations on the international financial market, the development and impact of the Brexit negotiations and geopolitical risks.
In the domestic real estate transaction market, investment demand for real estate which is likely to bring stable rental income is expected to remain strong
backed by the favorable fund procurement environment thanks to the monetary easing policy, resulting in continuation of the harsh acquisition environment.
As for the rental housing market, a favorable environment is expected to continue as seen in the previous fiscal period.
Under such circumstances, the Investment Corporation will conduct acquisitions and management of assets by carefully discerning the economic andinterest rate trends, the supply and demand balance trends and the orientations of domestic and foreign investors.

(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 manner. In selecting the real estate-related assets
it invests 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 and their conditions of connections
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 December 26, 2017 (the announcement date of this document), theInvestment 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 the property at an appropriate time.
(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.
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. The Investment Corporation aims to maintain and enhance asset
value through these measures.
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) 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 595 thousand units throughout Japan (as of July 31,2017), and its nationwide networks. Going forward, the Investment Corporation will keep this policy with an aim to enhance the profitability of its investment
properties. Furthermore, in an effort to establish the brand, the Investment Corporation is unifying the property name brands to “Esty Maison,” as a rule, forresidential 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 the retail property HAMAMATSU Plaza, Costco

Hamamatsu Warehouse opened on September 1, 2017 on the site owned by Sekisui House. In line with this, the Investment Corporation is determined tocontinue working on stable operation through improvements of the facility, etc. to generate a synergy effect for existing tenants.
(Note) “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 theseven 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.

<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 condominiums
the Investment 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

Explanation on brandHigh-quality urban rental condominiums plannedand developed by Sekisui House by utilizing its
know-how or in which it invests in recognition of
the value(3) Financial Strategy, Etc.
For 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 the target
ceiling for the time being. For future borrowings, the Investment Corporation will make it a basic policy to procure funds focused on long-term, fixed interest
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.

4. Significant Events Occurring after Settling the 24th Fiscal Period
Not applicable(Reference Information)
Establishment of commitment line
A commitment line agreement was concluded on October 6, 2017 as follows. This agreement establishes a new commitment line upon the ending of thecommitment term on October 31, 2017 under the commitment line agreement concluded on October 7, 2016.
Maximum commitment line amount

10,000 million yen

Start date of commitment line

November 1, 2017

Ending date of commitment line

October 31, 2018

Collateral

Unsecured and unguaranteed

Lenders

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

Use of funds

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

5. Itemized Portfolio Assets
The following table provides details of the assets (real estate and trust beneficiary interests in real estate as major entrusted property, etc.) owned by theInvestment Corporation as of September 30, 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
Residence-65

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
Prime Maison TAKAMI

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

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

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
2,016.79

6,390
1,760
2,000
855
1,570
1,550
2,140
1,550
2,360
1,230
2,130
1,580
1,060
1,590
2,970
1,130
932
1,040
3,090
2,730
2,010
1,220
951
1,080
1,860
2,620
927
773
364
738
1,170
2,400
875
1,900
2,480
1,040
697
2,090
2,400
821
824
1,860
1,490
787
786
2,640
2,360
1,220
1,740
1,890
909
601
1,900
1,980
3,350
6,160
1,050

4,687
1,605
1,885
634
1,260
1,206
1,686
1,133
1,800
919
1,866
1,393
783
1,498
2,246
1,106
701
934
2,719
2,204
1,953
1,184
966
1,103
1,705
2,589
903
783
373
700
1,263
2,413
871
1,880
2,453
932
701
2,161
2,154
793
826
1,472
1,021
590
659
2,076
1,749
1,013
1,512
1,507
744
495
1,891
1,473
2,756
4,924
849

Property Name
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 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)

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 Kashii Teriha, 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

Total Leasable
Floor Area (m2)

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

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
15,958.49
15,958.49
382,734.80

821
1,360
1,580
1,360
2,280
1,730
1,940
1,680
2,390
1,640
1,510
842
1,040
1,870
1,020
967
1,170
1,140
2,440
3,300
1,660
1,580
1,460
1,920
2,820
555
2,490
2,370
8,340
8,730
2,080
4,500
1,920
1,980
3,160
1,940
1,250
2,309
1,910
4,360
2,910
1,090
830
913
2,751
1,390
4,790
5,880
2,360
2,940
1,020
976
4,800
4,220
643
226,547
2,891
2,891
229,438

666
1,027
1,246
1,072
1,869
1,351
1,546
1,359
1,942
1,325
1,162
726
829
1,512
832
852
930
949
1,904
2,637
1,335
1,232
1,112
1,584
2,087
471
2,066
2,016
6,602
7,005
1,756
3,781
1,727
1,691
2,675
1,479
979
2,266
1,686
3,622
2,870
1,031
757
955
2,833
1,323
4,391
6,006
2,232
2,764
977
998
4,596
4,089
656
195,150
3,705
3,705
198,856(Note 1) The “Estimated Value at End of Period” indicates either the appraisal value or survey value by real estate appraisers with September 30, 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.

6. Changes in Rental Business Results
The following table provides changes in rental business results for each property in which the Investment Corporation has invested.
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-1 Esty Maison GINZA

1

98.0

176

2.6

1

97.4

173

2.5

Residence-3 Esty Maison AZABUNAGASAKA

1

91.5

47

0.7

1

91.5

48

0.7

Residence-4 Esty Maison EBISU II

1

97.5

55

0.8

1

97.9

56

0.8

Residence-5 Esty Maison EBISU

1

85.0

21

0.3

1

100.0

22

0.3

Residence-6 Esty Maison KANDA

1

95.6

44

0.6

1

96.3

45

0.7

Residence-8 Esty Maison KITASHINJUKU

1

92.9

47

0.7

1

100.0

48

0.7

Residence-10 Esty Maison ASAKUSA KOMAGATA

1

100.0

66

1.0

1

94.5

64

0.9

Residence-11 Esty Maison MACHIDA

1

98.4

51

0.7

1

91.8

51

0.7

Residence-12 Esty Maison KAWASAKI

1

96.6

74

1.1

1

95.3

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

54

0.8

1

97.0

54

0.8

Residence-17 Esty Maison MEGURO

1

100.0

31

0.5

1

95.0

31

0.5

Residence-18 Esty Maison YACHIYOMIDORIGAOKA

-

-

29

0.4

-

-

-

-

Residence-19 Esty Maison SUGAMO

1

97.3

49

0.7

1

100.0

50

0.7

Use Property No.

Residence

24th Fiscal Period (Apr. 1, 2017 – Sept. 30, 2017)

Number of
Tenants at End
of Period(Note 1)

Property Name

Residence-20 Esty Maison KYOBASHI

1

99.4

91

1.3

1

96.9

89

1.3

Residence-21 Esty Maison MEGUROHONCHO

1

93.4

32

0.5

1

86.0

29

0.4

Residence-22 Esty Maison HAKURAKU

1

92.7

30

0.4

1

96.5

30

0.4

Residence-23 Esty Maison MINAMIHORIE

1

97.0

33

0.5

1

96.8

34

0.5

Residence-24 Esty Maison GOTANDA

1

96.6

95

1.4

1

94.3

92

1.3

Residence-25 Esty Maison OISENDAIZAKA

1

97.9

78

1.1

1

98.7

77

1.1
0.9

Residence-26 Esty Maison SHINAGAWA SEASIDE

1

98.3

65

0.9

1

93.4

63

Residence-27 Esty Maison MINAMIAZABU

1

100.0

36

0.5

1

98.1

35

0.5

Residence-28 Esty Maison JOTO

1

100.0

32

0.5

1

93.6

33

0.5

Residence-29 Esty Maison TSUKAMOTO

1

100.0

38

0.6

1

97.9

40

0.6

Residence-30 Esty Maison KAWASAKI II

1

100.0

61

0.9

1

96.9

61

0.9

Residence-31 Esty Maison AZABUJUBAN

1

98.8

68

1.0

1

91.8

66

1.0
0.4

Residence-33 Esty Maison ITABASHIHONCHO

1

98.4

29

0.4

1

95.4

28

Residence-34 Esty Maison OIZUMIGAKUEN

1

96.2

25

0.4

1

89.8

26

0.4

Residence-35 Esty Maison TENJINHIGASHI I

1

94.4

15

0.2

1

100.0

15

0.2

Residence-36 Esty Maison TENJINHIGASHI II

1

98.8

27

0.4

1

93.9

28

0.4

Residence-37 Esty Maison SHIJONISHINOTOIN

1

100.0

41

0.6

1

95.5

41

0.6

Residence-39 Esty Maison HIGASHISHINAGAWA

1

93.6

71

1.0

1

94.4

71

1.0

Residence-40 Esty Maison HACHIOJIMINAMINO

1

96.5

32

0.5

1

97.7

34

0.5
0.9

Residence-41 Esty Maison NISHINAKAJIMA

1

96.9

64

0.9

1

92.1

64

Residence-42 Esty Maison ITABASHIKUYAKUSHOMAE

1

99.2

77

1.1

1

96.0

76

1.1

Residence-43 Esty Maison MUSASHIKOYAMA

1

98.2

30

0.4

1

100.0

31

0.5

Residence-44 Esty Maison SENDAGI

1

93.1

22

0.3

1

100.0

22

0.3

Residence-45 Esty Maison YOTSUYASAKAMACHI

1

100.0

61

0.9

1

96.7

60

0.9

Residence-46 Esty Maison HAKATAHIGASHI

1

97.6

85

1.2

1

97.5

91

1.3

Residence-47 Esty Maison KAMIGOFUKU

1

98.5

29

0.4

1

98.5

28

0.4

Residence-48 Esty Maison SANGENJAYA

1

94.4

24

0.4

1

88.8

24

0.4

Residence-50 Prime Maison MUSASHINONOMORI

1

97.9

60

0.9

1

96.4

63

0.9

Residence-51 Prime Maison HIGASHISAKURA

1

98.6

51

0.8

1

88.9

50

0.7

Residence-52 Prime Maison KAYABAKOEN

1

100.0

30

0.4

1

93.0

27

0.4

Residence-53 Esty Maison SANGENJAYA II

1

100.0

24

0.4

1

88.8

23

0.3

Residence-54 Esty Maison ITABASHI C6

1

97.9

79

1.2

1

97.0

78

1.1

Residence-55 MAST HAKATA

1

100.0

92

1.3

1

100.0

93

1.3

Residence-56 Esty Maison KINSHICHO

1

100.0

35

0.5

1

91.6

35

0.5

Residence-57 Esty Maison MUSASHIKOGANEI

1

95.1

53

0.8

1

98.0

52

0.8

Residence-58 Prime Maison GOKISO

1

98.4

64

0.9

1

92.7

59

0.9

Residence-59 Prime Maison YUHIGAOKA

1

100.0

30

0.4

1

100.0

30

0.4

Residence-60 Prime Maison KITATANABE

1

100.0

21

0.3

1

96.6

23

0.3

Residence-61 Prime Maison MOMOCHIHAMA

1

100.0

69

1.0

1

100.0

68

1.0

Residence-62 Esty Maison AKIHABARA

1

96.2

56

0.8

1

97.5

56

0.8

Residence-63 Esty Maison SASAZUKA

1

96.6

92

1.3

1

97.5

88

1.3

Residence-64 Prime Maison GINZA EAST

1

97.2

167

2.4

1

95.9

165

2.4

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

Residence

Use Property No.

Property Name

Number of
Tenants at End
of Period(Note 1)

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

Rent Revenue
throughout
Period(million yen)

24th Fiscal Period (Apr. 1, 2017 – Sept. 30, 2017)

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

89.9

33

0.5

1

92.9

33

0.5

Residence-66 Prime Maison YADAMINAMI

1

96.6

28

0.4

1

96.1

28

0.4

Residence-67 Prime Maison TERIHA

1

100.0

51

0.8

1

100.0

53

0.8

Residence-68 Esty Maison HIGASHISHIRAKABE

1

100.0

48

0.7

1

100.0

47

0.7
0.5

Residence-69 Esty Maison SENGOKU

1

91.7

37

0.6

1

98.4

37

Residence-70 Esty Maison DAIZAWA

1

97.6

59

0.9

1

98.9

59

0.9

Residence-71 Esty Maison TOGOSHI

1

99.0

48

0.7

1

97.8

49

0.7

Residence-72 Esty Maison KAWARAMACHI

1

94.7

59

0.9

1

95.0

59

0.9

Residence-73 Esty Maison NISHITENMA

1

94.8

51

0.7

1

97.1

51

0.7

Residence-74 Esty Maison SHIROKANEDAI

1

94.1

62

0.9

1

97.8

66

1.0

Residence-75 Esty Maison HIGASHISHINJUKU

1

98.2

47

0.7

1

97.8

47

0.7

Residence-76 Esty Maison MOTOAZABU

1

100.0

32

0.5

1

100.0

39

0.6

Residence-77 Esty Maison TORITSUDAIGAKU

1

95.3

24

0.4

1

100.0

21

0.3

Residence-78 Esty Maison MUSASHIKOYAMA II

1

100.0

28

0.4

1

97.8

30

0.4

Residence-79 Esty Maison NAKANO

1

97.9

50

0.7

1

100.0

51

0.7

Residence-80 Esty Maison SHINNAKANO

1

95.9

27

0.4

1

98.0

28

0.4

Residence-81 Esty Maison NAKANOFUJIMICHO

1

93.4

28

0.4

1

100.0

29

0.4

Residence-82 Esty Maison TETSUGAKUDO

1

97.6

33

0.5

1

96.9

33

0.5

Residence-83 Esty Maison KOENJI

1

95.1

32

0.5

1

100.0

32

0.5

Residence-84 Esty Maison OSHIAGE

1

98.8

70

1.0

1

100.0

71

1.0

Residence-85 Esty Maison AKABANE

1

97.0

85

1.2

1

98.2

93

1.4
0.7

Residence-86 Esty Maison OJI

1

98.9

48

0.7

1

100.0

47

Residence-87 Prime Maison WASEDA

1

93.0

43

0.6

1

96.1

43

0.6

Residence-88 Prime Maison HATCHOBORI

1

90.0

37

0.5

1

96.9

37

0.5

Residence-89 Prime Maison JINBOCHO

1

93.6

54

0.8

1

93.6

52

0.8

Residence-90 Prime Maison GOTENYAMA EAST

1

95.7

79

1.2

1

89.0

78

1.1

Residence-91 MAST LIFE AKIHABARA

1

100.0

15

0.2

1

100.0

15

0.2

Residence-92 Esty Maison AOI

1

96.3

75

1.1

1

88.7

75

1.1

Residence-93 Esty Maison YAKUIN

1

96.4

74

1.1

1

97.1

74

1.1

Residence-94 Esty Maison KINSHICHO II

1

95.8

219

3.2

1

97.6

215

3.1
3.5

Residence-95 Esty Maison OJIMA

1

98.9

235

3.4

1

98.0

239

Residence-96 Prime Maison FUJIMIDAI

1

91.0

70

1.0

1

91.2

69

1.0

Residence-97 Esty Maison TSURUMAI

1

100.0

155

2.3

1

100.0

155

2.2

Residence-98 Prime Maison MORISHITA

1

100.0

55

0.8

1

94.3

56

0.8

Residence-99 Prime Maison SHINAGAWA

1

100.0

55

0.8

1

98.3

56

0.8

Residence-100 Prime Maison ODORI KOEN

1

92.3

116

1.7

1

96.0

116

1.7

Residence-101 Prime Maison MINAMI 2-JO

1

99.1

68

1.0

1

96.5

69

1.0

Residence-102 Prime Maison KAMOKAMOGAWA

1

98.0

47

0.7

1

92.5

45

0.7

Residence-103 Prime Maison CENTRAL PARK

1

100.0

87

1.3

1

98.6

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

100.0

112

1.6

1

94.8

108

1.6
1.1

Residence-106 Esty Maison SHIBAURA

1

95.8

79

1.2

1

98.6

78

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

92.2

29

0.4

1

89.7

27

0.4

Residence-110 Esty Maison KOHOKU TSUNASHIMA

1

100.0

80

1.2

1

100.0

78

1.1

Residence-111 MAST LIFE HINO

1

98.1

47

0.7

1

100.0

48

0.7
2.0

Residence-112 Prime Maison YOKOHAMA NIHON-ODORI

1

98.1

143

2.1

1

92.8

135

Residence-113 KOBE Women's Student Housing

1

100.0

222

3.2

1

100.0

222

3.2

Residence-114 Prime Maison SHIBUYA

1

96.6

63

0.9

1

100.0

62

0.9
1.2

Residence-115 Prime Maison HATSUDAI

1

94.7

80

1.2

1

96.6

80

Residence-116 Esty Maison UEMACHIDAI

1

97.5

31

0.5

1

100.0

32

0.5

Residence-117 Esty Maison KOBE-SANNOMIYA

1

98.3

29

0.4

1

94.8

29

0.4
1.8

Residence-118 Prime Maison SHIROKANE-TAKANAWA

1

98.1

103

1.5

1

96.9

126

Residence-119 Prime Maison ICHIGAYAYAMABUSHICHO

1

93.9

85

1.2

1

99.4

106

1.5

Residence-120 Esty Maison MORISHITA

1

95.1

3

0.1

1

100.0

18

0.3

112

97.7

6,799

98.7

112

97.0

6,824

98.7

Residence subtotal

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(%)

HAMAMATSU Plaza

4

100.0

87

1.3

5

100.0

91

1.3

Other real estate in trust (Retail property) subtotal

4

100.0

87

1.3

5

100.0

91

1.3

116

97.8

6,886

100.0

117

97.1

6,916

100.0

Use Property No.

Other Real Estate in Trust (Retail property)

24th Fiscal Period (Apr. 1, 2017 – Sept. 30, 2017)

Retail-1

Property Name

Total

(Note 1) The “Number of Tenants” indicates the number of lessees (including master-lease companies) that are in direct lease agreement with the trustees for each asset already acquired as of the end of 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).

7. Capital Expenditures in the 24th 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 24th fiscal period. In addition, the capital expenditure for the fiscal period under review totaled 446 million yen. Combining this with the 211
million yen in repair expenses, which were classified as expenses for the fiscal period, the Investment Corporation conducted construction of 657 million yen.
Property Name
(Location)

PurposeExpenditures(million yen)

PeriodEsty Maison HAKATAHIGASHI(Fukuoka-shi, Fukuoka)

Large-scale renovation

From: December 2016
To: September 2017

167

Esty Maison SUGAMO(Toshima-ku, Tokyo)

Large-scale renovation

From: June 2017
To: September 2017

59

Esty Maison TSUTSUJIGAOKA(Chofu-shi, Tokyo)

Large-scale renovation

From: May 2017
To: September 201751

Prime Maison MOMOCHIHAMA and other 11 properties(Fukuoka-shi, Fukuoka and other )LED light fixture replacement work in common areas

From: April 2017
To: September 201722

Prime Maison FUJIMIDAI(Nagoya-shi, Aichi)

Large-scale renovation

From: June 2017
To: August 201719

Others

124
Total

446

8. Transactions with Interested Parties, Etc.
(1) Transaction Status
Not applicable.

(2) Amount of Fees, Etc.
Category

Property Management Fees

Brokerage Fees

Total Fees, Etc. (A)(thousand yen)494,658

143,812

Breakdown of Transactions with Interested Parties, Etc.
Paid Party

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

Paid Amount (B)(thousand yen)

Sekiwa Real Estate Ltd.

257,505

52.1

Sekiwa Real Estate Chubu, Ltd.

52,751

10.7

Sekiwa Real Estate Kansai, Ltd.

5,251

1.1

Sekiwa Real Estate Kyushu, Ltd.

16,863

3.4

Sekiwa Kanri Kansai Co., Ltd.

49,0399.9

Sekiwa Real Estate Ltd.

87,45360.8

Sekiwa Real Estate Chubu, Ltd.

6,577

4.6

Sekiwa Real Estate Kansai, Ltd.

1,281

0.9

Sekiwa Real Estate Kyushu, Ltd.

931

0.6

Sekiwa Kanri Kansai Co., Ltd.

4,225

2.9

(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.

Financial Statements(1) Balance Sheet(Thousand yen)
23rd Fiscal Period(As of March 31, 2017)24th Fiscal Period(As of September 30, 2017)

AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Deferred tax assets
Other
Allowance for doubtful accounts

3,793,152
5,096,818
146,649
150,392
32
87(2,628)5,259,432
4,658,956
115,509167,21076623(2,499)Total current assets

9,184,504

10,199,308

Property, plant and equipment
Buildings in trust
Accumulated depreciation

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

106,390,873(17,796,436)

Buildings in trust, net

89,697,745

88,594,437

Structures in trust
Accumulated depreciation

983,036(243,251)

987,265(269,583)

Non-current assets

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

739,785

717,682

2,022,031(618,529)

2,029,841(685,360)

1,403,501

1,344,481

298,133(100,337)

349,478(120,455)

197,795

229,023

Land in trust
Construction in progress in trust

107,827,854-

107,828,487
35,856

Total property, plant and equipment

199,866,683

198,749,967

Intangible assets
Leasehold rights in trust
Other

143,964
110

141,946
98

Total intangible assets

144,075

142,044242,672
473,891
152,239

242,662
438,169
158,778

868,802

839,609200,879,561

199,731,621

52,234
49,81344,68833,512

Investments and other assets
Lease and guarantee deposits
Long-term prepaid expenses
Other
Total investments and other assets
Total non-current assets
Deferred assets
Investment corporation bond issuance costs
Investment unit issuance costs
Total deferred assets
Total assets

102,048

78,201

210,166,114

210,009,131

(Thousand yen)
23rd Fiscal Period(As of March 31, 2017)24th Fiscal Period(As of September 30, 2017)

Liabilities
Current liabilities
Operating accounts payable
Current portion of investment corporation bonds
Current portion of long-term loans payable
Accounts payable – otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Other

314,916
4,000,000
4,805,000
569,457
54,222
1,261
11,147
230,640
10,332249,227
4,000,000
4,600,000
657,587
52,886
1,917
19,927
245,694
4,423

Total current liabilities

9,996,979

9,831,663

Investment corporation bonds

10,500,000

10,500,000

Long-term loans payable
Tenant leasehold and security deposits in trust

86,404,500
1,946,227

86,432,500
1,903,196

Total non-current liabilities

98,850,727

98,835,696

108,847,707

108,667,360

98,633,97898,633,978

183,091

214,718

183,091

214,718

2,501,336

2,493,073

Non-current liabilities

Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Surplus
Voluntary retained earnings
Reserve for reduction entry
Total voluntary retained earnings
Unappropriated retained earnings
Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets

2,684,427

2,707,792

101,318,406

101,341,771

101,318,406

101,341,771

210,166,114

210,009,131

See accompanying “Notes to Financial Statements.”

(2) Statement of Income and Retained Earnings(Thousand yen)
24th Fiscal Period(April 1, 2017 –September 30, 2017)

23rd Fiscal Period(October 1, 2016 –March 31, 2017)
Operating revenue
Rent revenue - real estate
Gain on sales of real estate properties

6,886,897
32,176

6,916,462-

Total operating revenue

6,919,074

6,916,462

3,259,096
360,581
16,13536,151
3,600
1,583
181,193

3,298,248
364,317
16,52937,232
3,600
1,672
193,109

Operating expenses
Expenses related to rent business
Asset management fee
Asset custody fee
Administrative service fees
Directors’ compensations
Provision of allowance for doubtful accounts
Other operating expenses
Total operating expenses

3,858,342

3,914,711

3,060,731

3,001,751

Interest income
Reversal of distributions payable
Settlement received
Other

46
616
18

44
255
30,000215

Total non-operating income

680

30,515Interest expenses

394,811

379,879

Interest expenses on investment corporation
bonds

56,06056,689

7,505

7,546

79,09921,211
117

76,787
16,301
108

Operating income
Non-operating income

Non-operating expenses

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

558,806

537,313

Ordinary income

Total non-operating expenses

2,502,606

2,494,953

Income before income taxes

2,502,606

2,494,953

Income taxes - current
Income taxes - deferred

1,268
2

1,923
(44)

Total income taxes

1,270

1,879

2,501,336

2,493,073

Net income
Retained earnings brought forward--

Unappropriated retained earnings

2,501,336

2,493,073

See accompanying “Notes to Financial Statements.”

(3) Statement of Changes in Net Assets
23rd fiscal period (from October 1, 2016 to March 31, 2017)(Thousand yen)
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

2,192,416

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

Total
surplusTotal
unitholders’equity(8,570)---(2,183,845)(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

24th fiscal period (from April 1, 2017 to September 30, 2017)(Thousand yen)
Unitholders’ equity
Surplus

Unitholders’capitalBalance as ofApril 1, 2017
Changes of items during
the fiscal period
Provision for reserve
for reduction entry
Distribution fromsurplus98,633,978

Voluntary retained
earnings

Unappropriatedretained
Reserve
Total
earnings
forvoluntary
reduction retainedentry
earnings

Total
surplus

Total Net
Assets183,091

183,091

2,501,336

31,626

31,626(31,626)---(2,469,709)(2,469,709)(2,469,709)(2,469,709)

2,493,073

2,493,073

2,493,073

2,493,073

23,36423,36423,364Net Income
Total changes of items
during the fiscal period
Balance as of
September 30, 2017

Total
unitholders’equity-31,626

31,626(8,262)

98,633,978214,718

214,718

2,493,073

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

2,707,792 101,341,771 101,341,771

See accompanying “Notes to Financial Statements.”

(4) Statement of Cash Distributions
23rd Fiscal Period(October 1, 2016 – March 31, 2017)24th Fiscal Period(April 1, 2017 – September 30, 2017)

I. Unappropriated retained earnings

2,501,336,041 yen

2,493,073,959 yen

II. Cash distributions

2,469,709,340 yen

2,492,925,050 yen(2,234 yen)

(2,255 yen)

III. Voluntary retained earnings
Provision for reserve for reduction
entry

31,626,701 yen

0 yen

IV. Retained earnings carried forward

0 yen

148,909 yen

As provided in Article 34-1-2 of its
Articlesof
Incorporation,
theInvestment Corporation makes it abasic policy to make cash distributions
in excess of the amount equivalent to
90% of the distributable income
amount as stipulated in Article 67-15 of
the Act on Special Measures
Concerning Taxation. Following thispolicy, and in consideration of the factthat individual unitholders must
calculate the capital gains or losses forcash distributions in excess ofearnings
whentheInvestment
Corporation distributes cash in excessof earnings as stipulated in Article
34-1-4 of its Articles of Incorporation,
the Investment Corporation distributed
2,469,709,340 yen, as distribution of
earnings, which is the entire amount of
the unappropriated retained earnings
after deducting the provision forreserve for reduction entry, as
stipulated in Article 66-2 of the Act on
SpecialMeasures
Concerning
Taxation.

As provided in Article 34-1-2 of its
Articlesof
Incorporation,
theInvestment Corporation makes it abasic policy to make cash distributions
in excess of the amount equivalent to
90% of the distributable income
amount as stipulated in Article 67-15 of
the Act on Special Measures
Concerning Taxation. Following thispolicy, and in consideration of the factthat individual unitholders must
calculate the capital gains or losses forcash distributions in excess ofearnings
whentheInvestment
Corporation distributes cash in excessof earnings as stipulated in Article
34-1-4 of its Articles of Incorporation,
the Investment Corporation distributed
2,492,925,050 yen, which is the entire
amount of the unappropriated retained
earnings excluding the fractionalamount where distribution per unit
would be less than 1 yen, as
distribution of earnings.

Item(Cash distributions per unit)

Method for calculating cash
distributions

(5) Statement of Cash Flows(Thousand yen)
23rd Fiscal Period(October 1, 2016 –March 31, 2017)24th Fiscal Period(April 1, 2017 –September 30, 2017)

Cash flows from operating activities

2,502,606
1,606,450

2,494,953
1,602,040

7,505

7,546

21,211(1,190)(46)
450,872(33,687)
23,708
1,264
24,544(141,153)
11,147(6,156)

16,301(128)(44)
436,568
31,140(16,368)(62,881)
4,769
8,779
15,053

1,168,045-

Other, net(28,452)(2,799)35,271(6,701)

Subtotal

5,603,871

4,566,300

Interest income received
Income taxes paid

46(452,590)(1,302)44(437,904)(1,268)Net cash used in operating activities

5,150,025

4,127,172(9,751,609)(125)(402,755)-

Proceeds from tenant leasehold and security deposits
in trust

155,193

119,201

Repayments of tenant leasehold and security deposits
in trust(143,522)(162,232)

Decrease (increase) in investments and other assets,
net(7,412)(6,528)(9,747,475)(452,315)(3,000,000)
9,500,000(9,500,000)
9,661,495(2,183,802)

2,528,000(2,705,000)(2,469,439)

4,477,693(2,646,439)

Net increase (decrease) in cash and cash equivalents(119,757)

1,028,417

Cash and cash equivalents at the beginning of period

9,009,728

8,889,971

Cash and cash equivalents at the end of period

8,889,971

9,918,388

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

Interest expenses paid

Cash flows from investing activities
Purchase of property, plant and equipment in trust
Purchase of intangible assets

Net cash used in investing activities
Cash flows from financing activities
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 used in financing activities

See accompanying “Notes to Financial Statements.”

Notes to Financial Statements
1. Organization
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
the Real Estate Investment Trust Section (J-REIT market) of the Tokyo Stock Exchange in July 2005 (security
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 24th fiscal period (September 30, 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
September of each year. The Investment Corporation does not prepare consolidated financial statements as it
has no subsidiaries.
Unless otherwise specified, amounts have been rounded down to the nearest thousand yen in theaccompanying financial statements and the notes thereto. As a result, the total shown in the financial
statements and notes thereto do not necessarily agree with the sum of the individual account balances.

3. Summary of Significant Accounting Policies
1. Depreciation method for
non-current assets(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
assets
Investment corporation bond issuance costs are amortized utilizing thestraight-line method over the redemption periods.
(2) Investment unit issuance costs
Investment unit issuance costs are amortized utilizing the straight-line
method (over 3 years).
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 seller inconnection 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 3,952 thousand yen for the 23rd fiscal period and 632
thousand yen for the 24th 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 consist
cash equivalents) in theof cash on hand and cash in trust; deposits that can be withdrawn at any timestatement of cash flows
and deposits in trust; and short-term investments with a maturity of 3 months
or less from the date of acquisition, which are readily convertible to cash andbear only an insignificant risk of value fluctuation.

7. Other significant items
fundamental to preparing
the financial statements(1) Accounting methods for trust beneficiary interests in real estate, etc. as
entrusted property
Regarding trust beneficiary interests in real estate, etc. as entrusted
property, all asset and liability accounts of the entrusted properties aswell as all revenue and expense accounts generated by the entrusted
properties are recorded in relevant accounts on the balance sheet andstatement of income 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, land in trust andconstruction in progress 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. Notes to Balance Sheet
Minimum total net assets designated in Article 67-4 of the Investment Trusts Act(Thousand yen)
24th Fiscal Period(As of September 30, 2017)

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)
23rd Fiscal Period(As of March 31, 2017)
Maximum commitment line amount

10,000,000

10,000,000--

10,000,000

10,000,000

Used commitment line balance
Difference

24th Fiscal Period(As of September 30, 2017)

5. Notes to Statement of Income and Retained Earnings
Breakdown of real estate rental revenues and expenses
23rd Fiscal Period(October 1, 2016 –March 31, 2017)(Thousand yen)
24th Fiscal Period(April 1, 2017 –September 30, 2017)

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

6,668,229

6,710,863

218,667

205,599

Total real estate rental revenue

6,886,897

6,916,462

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

656,606

641,120

Utilities expenses

84,38888,192

Insurance expenses

8,013

7,988

Repair expenses

201,751

211,070

Property and other taxes

377,346

427,505

Trust fees

43,19642,881

Other

281,374

277,462

1,606,420

1,602,027

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

3,259,096

3,298,248

3,627,800

3,618,213

Breakdown of gain on sales of real estate properties
23rd Fiscal Period (from October 1, 2016 to March 31, 2017)(Thousand yen)
Esty Maison YACHIYOMIDORIGAOKA
Revenue from sales of real estate
Cost of real estate sold
Other sales expenses

1,250,000
1,168,146
49,6761,217,823
32,176

Gain on sales of real estate properties

24th Fiscal Period (from April 1, 2017 to September 30, 2017)
Not applicable.

6. Notes to Statement of Changes in Net Assets
23rd Fiscal Period(October 1, 2016 –March 31, 2017)24th Fiscal Period(April 1, 2017 –September 30, 2017)

Total number of authorized investment
units and total number of investment units
issuedTotal number of authorized investment units

10,000,000 units

10,000,000 units

Total number of investment units issued

1,105,510 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(Thousand yen)
24th Fiscal Period(April 1, 2017 –September 30, 2017)

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

3,793,152

5,259,432

Cash and deposits in trust

5,096,818

4,658,956

Cash and cash equivalents

8,889,971

9,918,388

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

Due within one year

24,648(Thousand yen)
24th Fiscal Period(As of September 30, 2017)
24,648Due after one year

854,464

842,140

Total

879,112866,788

Due within one year

23rd Fiscal Period(As of March 31, 2017)
1,600,910(Thousand yen)
24th Fiscal Period(As of September 30, 2017)
1,668,267

Due after one year

5,422,695

5,141,374

Total

7,023,605

6,809,641

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

Operating lease transactions as lessor
Future lease receivable equivalents

9. Financial Instruments
1. Matters Concerning Status of Financial Instruments(1) Policy on Handling Financial Instruments
The Investment Corporation raises necessary funds (through additional issuance of investment units,
borrowings and issuance of investment corporation bonds) in light of its financial plans and surplus 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.
(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
the Investment Corporation may have to borrow funds under disadvantageous conditions in terms ofinterest 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.
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.
(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.

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
these amounts. The following tables do not include those for which determining the fair value is recognized to
be extremely difficult.
23rd Fiscal Period (As of March 31, 2017)
 (Thousand yen)Book Value Recordedon the Balance Sheet

Fair Value

Difference(1) Cash and deposits

3,793,152

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-(4) Operating accounts payable

314,916

314,916-(5) Current portion of investment
corporation bonds

4,000,000

4,013,033

13,033(6) Current portion of long-term loans
payable4,805,000

4,819,804

14,804(7) Investment corporation bonds

10,500,000

10,611,537

111,537(8) Long-term loans payable

86,404,500

87,034,282

629,782

Total of liabilities

106,024,416

106,793,575

769,158---(3) Operating accounts receivable
Allowance for doubtful accounts

Total of assets(9) Derivative transactions

24th Fiscal Period (As of September 30, 2017)
 (Thousand yen)Book Value Recordedon the Balance Sheet

Fair Value

Difference(1) Cash and deposits

5,259,432

5,259,432-(2) Cash and deposits in trust

4,658,956

4,658,956-

115,509

115,509-(2,499)(2,499)-113,009

113,009-

10,031,398

10,031,398-(4) Operating accounts payable249,227

249,227-(5) Current portion of investment
corporation bonds

4,000,000

4,001,341

1,341(6) Current portion of long-term loans
payable4,600,000

4,602,023

2,023(7) Investment corporation bonds

10,500,000

10,605,967

105,967(8) Long-term loans payable

86,432,500

86,936,457

503,957

Total of liabilities

105,781,727

106,395,018

613,291---(3) Operating accounts receivable
Allowance for doubtful accounts

Total of assets(9) Derivative transactions

(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
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.
(5) Current portion of investment corporation bonds and (7) Investment corporation bonds
As the investment corporation bonds of the Investment Corporation are traded over the counter throughnegotiations, it is difficult to indicate the fair value as the market price. The present value is based on themethod of calculating by discounting the combined total of principal and interest by a reasonably estimatedrate assumed as being applicable to a similar bond issuance.
(6) Current portion of long-term loans payable and (8) Long-term loans payable
The fair value of those with floating interest rates is based on the book value, as it reflects the market interest
rate within a short period of time and thus is considered to be nearly equal to the book value. (However, thefair value of certain long-term loans payable with floating interest rates that qualifies for the special
accounting of interest rate swaps [see Note “11. Derivative Transactions ”] is based on the method of
calculating by discounting the sum of its principal and interest payments net of any cash flows from theinterest-rate swap by a reasonably estimated rate assumed as being applicable to a new similar borrowing to
be made by the Investment Corporation.) The present value of those with fixed interest rates is based on themethod 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.
(9) Derivative transactions
See Note “11. Derivative Transactions.”(Note 2) Scheduled redemption amount of monetary claims
23rd Fiscal Period (As of March 31, 2017)(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

3,793,152

-

-

-

-

-

5,096,818

-

-

-

-

-

146,649

-

-

-

-

-

9,036,620

-

-

-

-

-

24th Fiscal Period (As of September 30, 2017)(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

5,259,432

-

-

-

-

-

4,658,956

-

-

-

-

-

115,509

-

-

-

-

-

10,033,898

-

-

-

-

-

(Note 3) Scheduled redemption and repayment amount of investment corporation bonds and borrowings
23rd Fiscal Period (As of March 31, 2017)  (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) Investment
4,000,000
2,500,000
2,000,000
6,000,000
corporation bonds(2) Long-term loans
6,792,500
17,000,000
14,230,000
37,500,000
4,805,000
10,882,000
payableTotal of liabilities

8,805,000

13,382,000

8,792,500

17,000,000

14,230,000

43,500,000

24th Fiscal Period (As of September 30, 2017)
Due in 1 Yearor Less(1) Investment
corporation bonds(2) Long-term loans
payableTotal of liabilities  (Thousand yen)
Due after 1
Due after 2
Due after 3
Due after 4
Due after
Year through Years through Years through Years through5 Years
2 Years
3 Years
4 Years
5 Years

4,000,000

2,500,000

2,000,000--

6,000,000

4,600,000

8,382,000

13,892,500

14,300,000

15,230,000

34,628,000

8,600,000

10,882,000

15,892,500

14,300,000

15,230,000

40,628,000(Note 4) Financial instruments for which discerning of fair value is recognized to be extremely difficult
 Category

23rd Fiscal Period(As of March 31, 2017)(Thousand yen)
24th Fiscal Period(As of September 30, 2017)(1) Lease and guarantee deposits

242,672

242,662(2) Tenant leasehold and security
deposits in trust

1,946,227

1,903,196

(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
23rd Fiscal Period (As of March 31, 2017)
Not applicable
24th Fiscal Period (As of September 30, 2017)
Not applicable

11. Derivative Transactions
1. Derivatives to which hedge accounting is not applied
23rd Fiscal Period (As of March 31, 2017)
Not applicable
24th Fiscal Period (As of September 30, 2017)
Not applicable2. Derivatives to which hedge accounting is applied
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
for interest rate
64,009,500
59,204,500 (Note 2)
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) (8) Long-term loans payable).

24th Fiscal Period (As of September 30, 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
for interest rate
61,304,500
59,204,500 (Note 2)
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) (8) Long-term loans payable).

12. Retirement Benefits
23rd Fiscal Period (As of March 31, 2017)
Not applicable as the Investment Corporation does not have any retirement benefit plan.
24th Fiscal Period (As of September 30, 2017)
Not applicable as the Investment Corporation does not have any retirement benefit plan.

13. Income Taxes
1. Deferred tax assets and deferred tax liabilities consisted of the following:(Thousand yen)
24th Fiscal Period(As of September 30, 2017)

23rd Fiscal Period(As of March 31, 2017)
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
Valuation allowance
Total deferred tax assets
Deferred tax assets, net

6,619

7,259

834

793

32

76

7,485

8,129

(7,453)(8,053)

32

76

32

76

2. Reconciliation of the statutory tax rate to the Effective Income Tax Rate
23rd Fiscal Period(As of March 31, 2017)
Statutory tax rate
(Adjustment)
Deductible cash distributions
Provision for reserve for reduction entry
Other
Effective income tax rate

24th Fiscal Period(As of September 30, 2017)31.74%

31.74%(31.32%)(0.40%)
0.03%(31.71%)
-%
0.05%

0.05%

0.08%

14. Equity Method Income and Retained Earnings
23rd Fiscal Period (from October 1, 2016 to March 31, 2017)
Not applicable as the Investment Corporation does not have any affiliated companies.
24th Fiscal Period (from April 1, 2017 to September 30, 2017)
Not applicable as the Investment Corporation does not have any affiliated companies.

15. Assets Retirement Obligations
23rd Fiscal Period (from October 1, 2016 to March 31, 2017)
Not applicable
24th Fiscal Period (from April 1, 2017 to September 30, 2017)
Not applicable

16. Transactions with Related Parties
1. Parent Company and Major Corporation Unitholders
23rd Fiscal Period (from October 1, 2016 to March 31, 2017)
Not applicable
24th Fiscal Period (from April 1, 2017 to September 30, 2017)
Not applicable
2. Subsidiaries and Affiliates
23rd Fiscal Period (from October 1, 2016 to March 31, 2017)
Not applicable
24th Fiscal Period (from April 1, 2017 to September 30, 2017)
Not applicable
3. Sister Companies
23rd Fiscal Period (from October 1, 2016 to March 31, 2017)
Not applicable
24th Fiscal Period (from April 1, 2017 to September 30, 2017)
Not applicable4. Directors and Major Individual Unitholders
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 ofIncorporation of 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 areincluded in the balance at the end of period.

24th Fiscal Period (from April 1, 2017 to September 30, 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 to364,317
Sekisui House Asset
Executive Director
payable 393,463(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
6,100
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 ofIncorporation of the Investment Corporation.
(Note 2) Since no property acquisition or disposition was made during the 24th fiscal period, there is no asset
management fees related to property acquisitions, which have been capitalized in the book value of individual
real properties; or asset management fees related to property disposition, which have been recorded in othersales 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 areincluded in 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]
23rd Fiscal Period (from October 1, 2016 to March 31, 2017)(1) Information by product and service
Descriptions are omitted as the Investment Corporation’s operating revenue under single product/service
classification for outside customers exceeds 90% of operating revenue recorded in the statement ofincome 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 andequipment 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.
24th Fiscal Period (from April 1, 2017 to September 30, 2017)(1) Information by product and service
Descriptions are omitted as the Investment Corporation’s operating revenue under single product/service
classification for outside customers exceeds 90% of operating revenue recorded in the statement ofincome 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 andequipment 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
24th Fiscal Period(October 1, 2016 –(April 1, 2017 –Item
March 31, 2017)
September 30, 2017)
Net assets per unit
91,648 yen
91,669 yen
Net income per unit
2,288 yen
2,255 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)

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

24th Fiscal Period(April 1, 2017 –September 30, 2017)
2,493,073--

2,501,336

2,493,073

1,093,070

1,105,510

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 3,627,800 thousand yen for the 23rd fiscal period and3,618,213 thousand yen for the 24th 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.
(Thousand yen)
24th Fiscal Period(April 1, 2017 –September 30, 2017)

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

Book value recorded on the balance sheet
Balance at the beginning of period
192,994,081
200,010,647
Amount of net change during period
7,016,565(1,154,590)
Balance at the end of period
200,010,647
198,856,057
Fair value at the end of period
226,015,800
229,438,000(Note 1) Book value recorded on the balance sheet indicates the book value less accumulated depreciation.
(Note 2) Net change during the 23rd fiscal period is comprised of increases primarily attributable to 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). Net change
during the 24th fiscal period is primarily comprised of decrease attributable to depreciation (1,602,027 thousandyen).
(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 March 31, 2017
and September 30, 2017.

20. Significant Subsequent Events
Not applicable

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      Contract Amount (Note 1)
Category

Type

Transaction other thanmarket transaction

Interest rate swap
transaction
Receivable floating;payable fixed

Total

Of Which,over 1 Year61,304,500

59,204,500

61,304,500

59,204,500(Thousand yen)
Fair Value(Note 2)-

(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(Million yen)
Accumulated Depreciation Net Balance
Balance Increase Decrease Balance
as ofduringduring
as of
as of
or
Depreciation
Type of Assets
Remarks
April 1,thethe
September Accumulated during the September
2017
PeriodPeriod30, 2017
30, 2017
Amortization
PeriodBuildings in trust 106,007
383
106,390
17,796
1,486
88,594Structures in trust
983
4
987
269
26
717
Machinery and
2,022
7
2,029
685
66
1,344
equipment in trust
Property,
Tools, furnitureplant andand fixtures in
298
51
349
120
20
229
equipment trust
Land in trust
107,827
0
107,828
107,828
Construction in
35
35
35
progress in trust
Total
217,138483
217,621
18,871
1,600
198,749
Leasehold rights
164
164
22
2
141
in trust
Intangible
Other
6
6
6
0
0
assets
Total
171
171
29
2
142

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

5. Schedule of Investment Corporation Bonds
NameFirst 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

Balance as ofApril 1, 2017
(million yen)February 28,
2013

4,000

Decrease Balance as of
Couponduring the
September
Rate
Period30, 2017(%)(million yen) (million yen)
-

4,000

Redemption
Date

0.630

February 28,
2018(Note 1)

Purpose Collateral(Note 2)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

14,500-14,500Unsecured(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 24th fiscal period.
(Note 2) The proceeds are used as funds for repayment of existing borrowings and acquisition of real estate trust
beneficiary interests, etc.
(Note 3) The proceeds are used as funds for repayment of existing 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

-

-

6. Schedule of Loans Payable
Category
LenderLong-term
loans
payableDevelopment 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 ofTokyo-Mitsubishi UFJ, Ltd.
Mizuho Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
The Bank ofTokyo-Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust andBanking Corporation
Resona Bank, Limited
The 77 Bank, Ltd.
The Hiroshima Bank, Ltd.
Mizuho Bank, Ltd.
The Bank ofTokyo-Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust andBanking Corporation
Aozora Bank, Ltd.
Mizuho Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Trust
Bank, Limited
The Bank ofTokyo-Mitsubishi 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.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust
Bank, Limited
The Bank ofTokyo-Mitsubishi 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

Balance Increase Decrease Balance 
as ofduringduringas ofAverage
April 1,thethe
September
Repayment Repayment
Interest Rate
Purpose2017
PeriodPeriod30, 2017
Date
Method(Note 1)(million (million (million(million
yen)
yen)
yen)
yen)
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

1,000
500

-

-

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

1.15475%

Remarks

February 28,
2019(Note 3)0.95750%

August 31,
2017

0.89900%

February 28,
20191.02225%

February 28,
2020

0.75600%

February 28,
2018(Note 2)

(Note 4)Lump-sumupon
maturity(Note 3)

1.17200%

August 31,
2020

0.45727%

August 31,
2018(Note 2)

1.17350%

February 28,
2022(Note 4)1.11000%

February 28,
2022(Note 3)

Unsecured/
UnguaranteedCategory
LenderThe 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
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
The Bank ofTokyo-Mitsubishi 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
Long-term
The Norinchukin Bankloans payable
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 ofTokyo-Mitsubishi 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.
Sumitomo Mitsui Banking
Corporation
The Bank ofTokyo-Mitsubishi 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

Balance Increase Decrease Balance 
as ofduringduringas ofAverage
April 1,thethe
September
Repayment Repayment
Interest Rate
Purpose2017
PeriodPeriod30, 2017
Date
Method(Note 1)(million (million (million(million
yen)
yen)
yen)
yen)
500
500
400
400
500

-

-

500

500

-

-

500
0.95225%

500

-

-

500

500

-

-

500

500
500
405

-

-

500
500
405

1,145

-

-

1,145

500
500
500
300

-

-

500
500
500
300

300

-

-

300

2,500

-

-

2,500

2,000

-

-

2,000

900

-

-

900

2,450

-

-

2,450

1,950

-

-

1,950

200
200
200
200
200
500
200
700
1,000

-

-

200
200
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
500
500
500
500
500
500
600

-

-

750
500
500
500
500
500
500
600

300

-

-

300

Remarks

February 26,
2021(Note 3)0.79614%February 28,
2020

0.97300%

February 26,
2021

0.96475%

August 31,
2022

0.83600%

August 31,
2021(Note 4)Lump-sumupon
maturity

0.86650%

Unsecured/
Unguaranteed

February 28,
2023(Note 3)0.85250%

February 28,
2023

0.73975%

February 28,
2022

0.62800%

February 26,
2021

Category
LenderMizuho 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 ofTokyo-Mitsubishi UFJ, Ltd.
The Yamaguchi Bank, Ltd.
Resona Bank, Limited
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
Development Bank ofJapan Inc.
Mizuho Bank, Ltd.
Long-termloans payable Sumitomo Mitsui Banking
Corporation
Mitsubishi UFJ Trust andBanking Corporation
The Bank ofTokyo-Mitsubishi UFJ, Ltd.
The Norinchukin Bank
Mizuho Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust
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 ofTokyo-Mitsubishi UFJ, Ltd.
Shinkin Central Bank
Mizuho Bank, Ltd.
Mizuho Trust & Banking
Co., Ltd.
Sumitomo Mitsui Trust
Bank, Limited
Resona Bank, Limited
The Bank ofTokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking
Corporation

Balance Increase Decrease Balance 
as ofduringduringas ofAverage
April 1,thethe
September
Repayment Repayment
Interest Rate
Purpose2017
PeriodPeriod30, 2017
Date
Method(Note 1)(million (million (million(million
yen)
yen)
yen)
yen)
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

100

-

-

100

100
100
100

-

-

100
100
100

600

-

-

600

100
200

-

-

100
200

450

-

-

450

400

-

-

400

800

-

-

800

0.68030%

August 31,
2023

0.67400%

August 31,2023

0.45503%

February 29,2024

Remarks(Note 4)0.50500%

February 29,
2024

0.59750%

August 29,2025

0.57000%

August 29,2025

0.49500%

August 30,
2024

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%

Lump-sumupon
maturity

Unsecured/
Unguaranteed(Note 3)0.77880%

February 27,
2026

0.72500%

February 27,
2026

0.67000%

February 28,
2025

February 28,
2025
August 31,
2020

Category
Lender
The Norinchukin Bank
Long-termloans payable Mizuho Bank, Ltd.
Total

Balance Increase Decrease Balance 
as ofduringduringas ofAverage
April 1,thethe
September
Repayment Repayment
Interest Rate
PurposeRemarks
2017
PeriodPeriod30, 2017
Date
Method(Note 1)(million (million (million(million
yen)
yen)
yen)
yen)
Lump-sum
㸫
㸫
2,352
2,352
August 29,
Unsecured/
0.61380%
upon(Note 3)2025
Unguaranteed
㸫
176
㸫
176
maturity
91,2092,528
2,705
91,032(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
conducted interest rate swap transactions for the purpose of hedging the interest rate fluctuation risk is the rate
obtained by taking into account the effect of interest rate swaps.
(Note 2) These loans are recorded in the current liabilities on the balance sheet as current portion of long-term loans
payable at the end of the 24th fiscal period.
(Note 3) These loans are used as funds for repayment of existing borrowings.
(Note 4) These loans are used as funds for the acquisition of real estate trust beneficiary interests, etc.
(Note 5) 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

4,600

Due after 1 Yearthrough 2 Years

8,382

Due after 2 Years
through 3 Years

13,892

Due after 3 Years
through 4 Years

14,300Due after 4 Years
through 5 Years

15,230