January 24, 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)

Real Estate Investment Trust Securities Issuer
Sekisui House Residential Investment Corporation
Representative:
Osamu Minami,
Executive Director(Securities Code: 8973)
Asset Management Company:
Sekisui House Asset Management, Ltd.
Representative:
Osamu Minami,
President & Representative Director
Inquiries:
Yoshiya Sasaki, General Manager
IR & Financial Affairs Department
TEL: +81-3-5770-8973(main)

Notice Concerning Acquisition of Trust Beneficiary Interests in Domestic Real Estate and Leases(Prime Maison Shirokanedai Tower and Five Other Properties) andSale and Cancellation of Leases (Esty Maison Machida and Eleven Other Properties) (After Correction)
Sekisui House Asset Management, Ltd. (“SHAM”), to which Sekisui House Residential Investment Corporation(“SHI”) entrusts management of its assets, hereby announces that it decided at the meeting of its board of directors held
today that SHI will acquire and sell the following assets (hereinafter respectively referred to as the “Asset Acquisition”
and the “Asset Sale”; the Asset Acquisition and the Asset Sale are hereinafter collectively referred to as the “Asset
Replacement”), and will commence and cancel leases in conjunction therewith.
Furthermore, at the time of the decision on the Asset Acquisition, SHAM obtained SHI’s consent through the approvalof SHI’s board of directors pursuant to the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951;as amended; the “Investment Trust Act”) and SHAM’s rules on transactions with interested parties.
In addition, as announced in the “Notice Concerning Conclusion of a Merger Agreement between Sekisui House Reit,
Inc. and Sekisui House Residential Investment Corporation” released today by SHI, Sekisui House Reit, Inc. (“SHR”;
hereinafter collectively referred to with SHI as the “Two Investment Corporations”) and SHI have, at the respective
meetings of their boards of directors held today, decided to implement an absorption-type merger (the “Investment
Corporation Merger”) on the effective date of May 1, 2018, having SHR as the surviving corporation and SHI as thedissolving corporation, and executed a merger agreement (the “Investment Corporation Merger Agreement”) today.
Taking advantage of the Investment Corporation Merger, the Asset Replacement will be implemented to bring about
To unitholders in the United States:
This exchange offer or business combination is made for the securities of a foreign company. The offer is subject to disclosure requirements of aforeign country that are different from those of the United States. Financial statements included in the document, if any, have been prepared inaccordance with foreign accounting standards that may not be comparable to the financial statements of United States companies.
It may be difficult for you to enforce your rights and any claim you may have arising under the federal securities laws, since the issuer islocated in a foreign country, and some or all of its officers may be residents of a foreign country. You may not be able to sue a foreign company
or its officers in a foreign court for violations of the U.S. securities laws. It may be difficult to compel a foreign company and its affiliates tosubject themselves to a U.S. court’s judgment.
You should be aware that the issuer may purchase securities otherwise than under the exchange offer, such as in open market or privately
negotiated purchases.
Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

1

further external growth and qualitative improvement in the portfolio. The settlement and delivery of the Asset
Replacement is scheduled to take place on May 1, 2018, which is the effective date of the Investment Corporation Merger.
Due to the Investment Corporation Merger, the surviving corporation after the merger (“New SHR”) is scheduled tosucceed to and perform the status of either purchaser or seller, and all rights and duties thereof, under the sale andpurchase agreements pertaining to the Asset Replacement.
1．Outline of the Asset Replacement(1) Outline of the Asset Acquisition
The assets SHI decided to acquire today (the “Assets to be Acquired”) are the real estate trust beneficiary interests forthe six residential properties set forth below.
As set forth above, on May 1, 2018, the effective date of the Investment Corporation Merger, New SHR is scheduled
to succeed to the status and all rights and duties of the purchaser under the sale and purchase agreements from SHI, andthen immediately acquire the Assets to be Acquired.
Furthermore, at the time of the acquisition of the Assets to be Acquired, the sale price for the assets SHI decided tosell today that are set forth in the following section “(2) Outline of the Asset Sale” (the “Assets to be Sold”), funds on
hand, and borrowings are scheduled to be appropriated to the funds for the acquisition and expenses appurtenant to theacquisition. The details of the borrowings will be announced when they are decided.
Property namePlanned acquisition price (Note 1)

Prime Maison Shirokanedai Tower

7,950 million yen

Prime Maison Otsuka

3,700 million yen

Prime Maison Asakusabashi

1,680 million yen

Prime Maison Daikanyama

2,520 million yen

Prime Maison Gotenyama West3,400 million yen

Esty Maison Toyosu Residence (Note 2)

6,050 million yen

Total planned acquisition price (Note 1)
Note 1:
Note 2:

Note 3:Note 4:

Sale and purchaseagreement execution
date and scheduledacquisition date
Sale and purchaseagreement execution
date
January 24, 2018

SellerSekisui House, Ltd.

Scheduled acquisitiondate
May 1, 2018

25,300 million yen

The “planned acquisition price” and “total planned acquisition price” do not include acquisition expenses, fixed asset tax, city planning tax,
consumption tax, and local consumption tax; the same hereafter.
The property name of the “Esty Maison Toyosu Residence” is “Toyosu Residence” as of today, but after its acquisition by New SHR, 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; the same hereafter.
Among the Assets to be Acquired, trusts have not been created for the five properties other than the Esty Maison Toyosu Residence as oftoday, so trusts are scheduled to be created on the scheduled acquisition date, upon which New SHR will acquire the trust beneficiaryinterests.
The sale and purchase agreements pertaining to the Assets to be Acquired (the “Asset Acquisition Agreements”) constitute forward
commitments by an investment corporation stipulated in the “Comprehensive Guidelines for Supervision of Financial Instruments Business
Operators, etc.” set forth by the Financial Services Agency (a forward commitment, etc. means a postdated sale and purchase agreement
under which the settlement and property delivery will be carried out after at least one month has passed from the execution of the agreement,
and similar agreements (including manifestations of the intent to purchase and reservation agreements, etc. that have substantial binding force
on a transaction); the same hereinafter). Please see the following section “12. Impact on the Finances of SHI and New SHR if Forward
Commitments, etc. Cannot be Performed (1) Asset Acquisition Agreements” regarding penalty clauses in the event the Asset Acquisition
Agreements are canceled and the impact on the Asset Acquisition if the Investment Corporation Merger is not implemented, and the
responses thereto.

(2) Outline of the Asset Sale
The Assets to be Sold are the real estate trust beneficiary interests for the 12 residential properties set forth below.
As set forth above, on May 1, 2018, the effective date of the Investment Corporation Merger, New SHR is scheduled
to succeed to the status and all rights and duties of the seller under the sale and purchase agreements from SHI, and then
immediately sell the Assets to be Sold. The price to be received by New SHR for the Assets to be Sold is scheduled tobe the price obtained by deducting sale expenses from the planned sale price, so in terms of accounting, New SHR is
not expected to record a gain or loss on sale of the Assets to be Sold. However, in terms of taxation, because New SHR
will take over the book value of the Assets to be Sold as of the last day of SHI’s final fiscal period (Note 1) (April 30,2018), for tax purposes New SHR is expected to recognize gain on sale of the Assets to be Sold in a net total of about

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

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1,756 million yen (projected amount as of today after deducting the cost method value of sale expenses). This gain onsale for tax purposes constitutes an inconsistency between accounting and taxation purposes (meaning a difference
between profit for accounting purposes and income for tax purposes; the same hereinafter) and will be a cause of
corporation tax and other taxation. However, if taken together with other inconsistencies between accounting andtaxation purposes, an inconsistency in excess income between accounting and taxation purposes ultimately occurs(meaning an inconsistency between accounting and taxation purposes in the event income for tax purposes exceeds
profit for accounting purposes; the same hereinafter), the policy (Note 2) of distributing the amount equal to theinconsistency in excess income between accounting and taxation purposes means it is expected to be possible to avoid
the occurrence of such tax burden as a result. For details of the impact of inconsistencies between accounting andtaxation purposes on New SHR’s results, please see the “Notice Concerning the Forecast of Operating Results andDistributions Subsequent to the Merger of Sekisui House Reit, Inc. and Sekisui House Residential Investment
Corporation for the Fiscal Periods Ending October 31, 2018 and April 30, 2019” announced by the Two Investment
Corporations today.
Note 1:

Note 2:

The final fiscal period means the final fiscal period (the seven-month period from October 1, 2017 until April 30, 2018) in the event the
proposal regarding the amendment of SHI’s articles of incorporation to change the ends of its fiscal periods from the current last days ofMarch and September to the last days of April and October, which SHI intends to submit to its general meeting of unitholders that isscheduled to be held on March 27, 2018, is approved by the general meeting of unitholders, and the Investment Corporation Merger comes
into effect.
The policy is, if goodwill occurs, to distribute excess profit as the reserve for temporary difference adjustments, and if negative goodwill
occurs, to distribute profit funded by the gain on negative goodwill.

Property namePlanned sale price(Note 1)

Book value as ofthe scheduledsale date for New(Note 2)
SHR

Amount ofdifference
between theplanned saleprice and theaforementioned
book value (Note 2)

Sale and purchaseagreement
execution dateand scheduledsale date

Purchaser(Note 1)

Esty Maison Machida
Esty Maison Shinkawasaki
Esty Maison Megurohoncho
Esty Maison Joto
Esty Maison Tenjinhigashi I
Esty Maison Tenjinhigashi II
Undisclosed

Undecided

Undecided

Esty Maison Shijonishinotoin

Sale and purchaseagreement
execution date
January 24, 2018

Undisclosed

Scheduled saledate
May 1, 2018

Esty Maison Hachiojiminamino
Esty Maison Nishinakajima
Esty Maison Kawaramachi
Esty Maison Shibaura
Esty Maison Tsutsujigaoka
Total planned sale price (Note 1)
Note 1:

Note 2:

16,400 million yen

Undecided

Undecided

The purchasers of the Assets to be Sold are multiple domestic limited liability companies, of which all are special purpose companies
established for the acceptance of assets. A single sale and purchase agreement is anticipated to be entered with these limited liability
companies to complete the acceptance of assets, since each limited liability company is planned to be financed by the same domestic special
purpose company and be managed by the same asset management company. Since the transaction reflects a bulk sale, and since neither thepurchasers of the Assets to be Sold nor the investor has given approval for disclosure, the planned sale price and purchaser information for
individual properties will remain undisclosed, In addition, the “total planned sale price” does not include sale expenses, fixed asset tax, city
planning tax, consumption tax, and local consumption tax; the same hereafter.
The price to be received by New SHR for the Assets to be Sold is scheduled to be the price obtained by deducting sale expenses from theplanned sale price, and as of today those sale expenses have not been decided, so “book value as of the scheduled sale date for New SHR”
and “amount of difference between the planned sale price and the aforementioned book value” in the preceding table are stated as being“undecided.” Furthermore, the projected amounts of the book values for the Assets to be Sold as of the last day of SHI’s final fiscal period(April 30, 2018) are as set forth below.

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

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Property nameEsty Maison Machida
Esty Maison Shinkawasaki
Esty Maison Megurohoncho
Esty Maison Joto
Esty Maison Tenjinhigashi I
Esty Maison Tenjingigashi II
Note 3:

Book value(projected amount)
1,115 million yen
966 million yen
1,137 million yen
958 million yen
367 million yen
689 million yen

Property nameEsty Maison Shijonishinotoin
Esty Maison Hachiojiminamino
Esty Maison Nishinakajima
Esty Maison Kawaramachi
Esty Maison Shibaura
Esty Maison Tsutsujigaoka

Book value(projected amount)
1,248 million yen
861 million yen
1,853 million yen
1,526 million yen
2,872 million yen
948 million yen

The sale and purchase agreements pertaining to the Assets to be Sold (the “Asset Sale Agreements”) constitute forward commitments, etc. by
an investment corporation stipulated in the “Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc.” set
forth by the Financial Services Agency. Please see “12. Impact on the Finances of SHI and New SHR if Forward Commitments, etc. Cannot
be Performed (2) Asset Sale Agreements” below regarding penalty clauses in the event the Asset Sale Agreements are canceled and theimpact on the Asset Sale if the Investment Corporation Merger is not implemented, and the responses thereto.

2．Reasons for the Asset Replacement
Sekisui House, Ltd. (“Sekisui House”), which is the sole parent company of Sekisui House Investment Advisors, Ltd.
(“SHIA”; hereinafter referred to collectively with SHAM as the “Two Asset Management Companies), the sponsor of
the Two Investment Corporations and to which SHAM and SHR entrust management of their assets, engages in thecreation of residences and environments with abundant humanity, and it aspires to be a company that creates living
environments that can contribute to the construction of a society where all people can live in comfort. To date, the Two
Investment Corporations have shared this philosophy with Sekisui House and managed their assets with it in mind.
After the merger of the Two Investment Corporations, based on this philosophy of Sekisui House, New SHR will
move forward with a growth strategy that utilizes the real estate development capacity and operational capacity, etc. of
the Sekisui House group to the maximum extent, with its primary investment targets being residential properties such as
residences, and commercial properties such as office buildings, hotels, etc. that are prime properties (Note) underpinned
by “strategic locations” and “high quality.” Additionally, with the objective of growing together with all of its
stakeholders, including unitholders and tenants, New SHR aims to “provide high-quality social infrastructure” and“maximize unitholder value” through management that focuses on ensuring stable income over the
medium-to-long-term and steady growth in assets under management.
Based on this basic philosophy and investment policy of New SHR, and because it is also in line with SHI’s current
investment policy, at this time SHI has decided on the Asset Acquisition, and it will exercise the preferential negotiatingright granted to it by Sekisui House and acquire the aforementioned six properties of the Assets to be Acquired for a
total planned acquisition price of 25.3 billion yen. Four of those properties (Prime Maison Shirokanedai Tower, Prime
Maison Otsuka, Prime Maison Asakusabashi, and Prime Maison Daikanyama) are rental housing that were overseen by
Sekisui House’s Development Department, which is its development division, and were planned and developed throughproperty planning meetings at which employees from SHAM’s investment department (the Real Estate Investment
Department) participate as observers.
Note:

At New SHR, a “prime property” means residential real estate or commercial real estate, etc. that is in a location suitable for a “sustainableliving base” for residents or a “sustainable base for business activities” for tenants (i.e., strategic location), and that has good basic performance
as a residence, for example in comfort and safety, and the functionality, etc. demanded by tenants (i.e., high quality). New SHR’s policy will be
to make prime properties its high-priority investment targets.

Furthermore, the characteristics of each Asset to be Acquired are as follows.
(1) Prime Maison Shirokanedai Tower
This property is a 23-story high-rise rental condominium, comprising 220 total residential units ranging from 1R to
2LDK, that is located about a five-minute walk from Meguro Station on the JR Yamanote Line, etc. and about aneight-minute walk from Shirokanedai Station on the Tokyo Metro Nanboku Line, etc.
The Shirokanedai area where this property exists spreads over both Minato Ward and Shinagawa Ward, and it haslong been widely known as a high-class residential district. There are also stylish retail stores and famous restaurants
scattered throughout the area, and it has strong regional brand power that merges residential and commercial elements
to a high degree. The property allows the use of multiple train lines and has highly convenient access to public transit.
For example, in addition to the JR Yamanote Line, the Tokyu Meguro Line, the Tokyo Metro Nanboku Line, and theToei subway Mita Line run through Meguro Station, which is the closest station, while the Tokyo Metro Nanboku Lineand the Toei subway Mita Line run through Shirokanedai Station. The property also has superior convenience for daily
life, in that, for example, there are a supermarket and various specialty stores in the commercial facility that connects
directly to Meguro Station, and a supermarket and other retail stores in front of Shirokanedai Station. The verdantInstitute for Nature Study of the National Museum of Nature and Science is also located in the surrounding area, whichforms a good residential environment.
Due to these factors, in terms of the main consumer demographics, stable rental demand is expected primarily fromsingle-person households seeking convenience, and dual-income households with no children (DINKs) seeking
convenience and the living environment.

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

4(2) Prime Maison Otsuka
This property is a rental condominium with attached retail stores, and is primarily made up of single-type residential
units. A roughly three-minute walk from Otsuka Station on the JR Yamanote Line, it is located in a region that has amix of retail store and office buildings and apartment housing with attached retail stores.
The Otsuka area where this property exists is located on the eastern end of Toshima Ward, which is centered around
Ikebukuro Station (a terminal station for the JR Yamanote Line and other lines), and it is filled withmedium-to-high-rise offices, retail store buildings, and condominiums and the like. The hinterlands of thisneighborhood form a comparatively quiet residential area. In addition to Otsuka Station, the closest station to thisproperty, being only one stop away from Ikebukuro Station via the JR Yamanote Line, because it is also possible toaccess Tokyo Station and other major terminal stations, this property has highly convenient access to public transit andgood proximity to the center of Tokyo.
Due to these factors, stable demand is expected primarily from single-person households, etc. who commute into thecenter of Tokyo for work or school.
(3) Prime Maison Asakusabashi
This property is a rental condominium that is primarily made up of single-type residential units, and it is locatedabout a seven-minute walk from Asakusabashi Station on the JR Chuo-Sobu Line, and about a five-minute walk from
Asakusabashi Station on the Toei subway Asakusa Line.
The Asakusabashi area where this property is located possesses the two major downtown areas of Ueno and Asakusa.
It is situated at the southern end of Taito Ward, which has the character of an international tourism destination thatleverages the historical, traditional, and cultural resources handed down from the Edo Period. Historically, it flourished
as a wholesale district handling a variety of products, particularly the area from Asakusabashi and Yanagibashi to
Nihonbashi Yokoyamacho and Bakurocho. Even today, the area retains the distinct flavor of a wholesale district in its
sprawl of retail stores handling general merchandise and fashions, and it maintains a comparatively high degree ofcommercial prosperity. Additionally, there are multiple small-scale retail stores, etc. in the surrounding area, which also
gives this property superior convenience for daily life.
Besides this convenience for daily life, the property has good proximity to the center of Tokyo by rail, including the
JR Line and the Toei Subway Line, so a certain amount of demand is expected from single-person households, etc.
seeking convenience for daily life and proximity to the center of Tokyo from a residential area.
(4) Prime Maison Daikanyama
This property is a rental condominium make up of residential units ranging from 1LDK to 3LDK that is located abouta nine-minute walk from Daikanyama Station on the Tokyu Toyoko Line.
The Daikanyama area that contains this property is located on the boundary between Shibuya Ward and Meguro
Ward. The area has a commercial nature in its procession of beauty and fashion-related stores and restaurants, which are
centered around commercial/residential complexes in front of train stations, and the numerous and varied retail stores
scattered throughout the back alleys. Meanwhile, the area also has a good living environment from the calm atmosphereof its residential area, due to the high-end residential neighborhoods in Daikanyamacho, Sarugakucho, Hachiyamacho,and Aobadai, and also being home to the embassies of various countries.
Due to these factors, demand is expected primarily from high-income DINKs households and families, underpinned
by good transportation and convenience in daily life, and the living environment.
(5) Prime Maison Gotenyama WestThis property is a high-end rental condominium that is made up of larger residential unit types and geared toward
high earners, located about a ten-minute walk from Kitashinagawa Station on the Keikyu Main Line and about atwelve-minute walk from Shinagawa Station on the JR Yamanote Line and other train lines.
Shinagawa Station, which is in the Shinagawa area that contains this property, is a major terminal station that boasts
some of the highest passenger numbers even in Greater Tokyo. Coupled with the good access to Haneda Airport, which
operates both domestic and international flights, this area has high appeal for leading Japanese companies as well as
global companies.
In addition, the expanse of quiet residential neighborhoods in Kitashinagawa 6-chome district, where this property is
located, is known as the Gotenyama district. That name originates in the Edo period, when it was the location of thepalace of the Tokugawa shoguns, giving this district an unparalleled pedigree. Additionally, there are multiple retailstores, etc. within walking distance, which gives this property superior convenience for daily life, and the conditions of
the living environment are also good.
Meanwhile, this property has high added value in its construction grade and equipment, and is targeted mainly at thewealthy and foreigners. It is considered to be highly competitive among equivalent properties in its sub-market.

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

5(6) Esty Maison Toyosu ResidenceThis property is a high-rise rental condominium with attached retail stores, and it is primarily made up ofcompact-type and family-type residential units. It is located about a five-minute walk from Toyosu Station on theTokyo Metro Yurakucho Line and the Tokyo Waterfront New Transit Waterfront Line (Yurikamome).
With the completion of Toyosu Station on the Tokyo Metro Yurakucho Line in 1988, the Toyosu area where thisproperty is located was supplied with a number of large buildings and became recognized as a major office area inTokyo due to leading companies moving into those buildings as tenants. Recent years have seen the progressive
development of super-high-rise condominiums, large commercial facilities, and government complexes, and theaccumulation of functions in the area has increased rapidly.
From these factors, strong residential demand is expected from single-person households and young families, etc.
who desire proximity to the center of Tokyo and convenience in daily life.
SHI has determined that each lessee of the Assets to be Acquired is compatible with the selection standards fortenants that are planned to be adopted by New SHR after the Investment Corporation Merger. Please see the following
section “3. Details of the Assets to be Acquired and Leases” for details regarding the leases for each Asset to be
Acquired.
Meanwhile, a considerable number of years have passed since construction for the aforementioned 12 properties of
the Assets to be Sold, and they are residential properties that are expected to have increasing repair costs, etc. in the
future, so SHI believes that the Asset Replacement can be expected to have the effects set forth below from a
medium-to-long-term perspective.
<Effects of the Asset Replacement>
・ Enhancement of the residential portfolio in Greater Tokyo (Tokyo, Kanagawa Prefecture, Chiba Prefecture,and Saitama Prefecture), which is the priority investment area (Note) of New SHR
・ Qualitative improvement of the portfolio by replacing properties for which a considerable number of years
have passed since construction with relatively new properties
・ Improvement of portfolio profitability by acquiring assets that exceed NOI yield after depreciation of theAssets to be Sold
Note: New SHR’s policy is to respectively set its priority investment areas as Greater Tokyo for residential properties and as the threemajor metropolitan areas (Greater Tokyo, the Osaka area (Osaka Prefecture, Kyoto Prefecture, Hyogo Prefecture, and Nara
Prefecture), and the Nagoya area (Aichi Prefecture)) for commercial properties, etc.

Based on the foregoing, as a result of consultations with uninterested third-party purchasers and their investor,
agreement was reached for a total planned sale price of 16.4 billion yen, which exceeds the total appraised value of the
12 properties of the Assets to be Sold, and the Asset Sale was decided upon.

Total planned acquisition (sale)
priceGreater Tokyo ratio(Note 1)

Average building age(Note 2)

(Before depreciation) NOI yield(Note 3)(After depreciation) NOI yield(Note 4)Note 1:

Note 2:

Note 3:

Assets to be Acquired(6 properties)

Assets to be Sold
(12 properties)

25.3 billion yen

16.4 billion yen

100.0%

51.7%

4.2 years

13.8 years

4.8%

4.4%

3.7%

2.7%

“Greater Tokyo ratio” states 100.0% for the Assets to be Acquired because all six properties of the Assets to be Acquired arelocated in Greater Tokyo. In addition, for the Assets to be Sold, the ratio of SHI’s total acquisition price for the Assets to be Sold
that are located in Greater Tokyo out of SHI’s total acquisition price for the twelve properties of the Assets to be Sold is stated,rounded off after the first decimal place.
“Average building age” calculates, with today as the record date, the weighted average of the number of years since construction
for each Asset to be Acquired or each Asset to be Sold using, respectively, the total planned acquisition price or SHI’s acquisition
price, which is rounded off after the first decimal place.
“(Before depreciation) NOI yield” is calculated, for the Assets to be Acquired, by dividing the total appraised NOI in the written
real estate appraisals that were acquired at the time of considering acquisition by the total planned acquisition price, and for the
Assets to be Sold, by dividing the total annualized amount of actual NOI in the fiscal period ended September 30, 2017 (24thfiscal period) by SHI’s total acquisition price, which are respectively rounded off after the first decimal place.
* “Appraised NOI” means net operating income (the amount obtained by deducting operating expenses from operating income)using the direct capitalization method in the written real estate appraisal, without taking depreciation expenses into account.

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

6Note 4:** “Actual NOI” means the figure calculated by deducting leasing business expenses from the leasing business income of theAssets to be Sold in the fiscal period ended September 30, 2017 (24th fiscal period), and then adding depreciation expenses.
“(After depreciation) NOI yield” is calculated by deducting, from the respective total NOIs set forth in (Note 3) above, anticipateddepreciation expenses with regard to the Assets to be Acquired, and with regard to the Assets to be Sold, the annualized amount of
actual depreciation expenses in that fiscal period, and then dividing by, respectively, the total planned acquisition price or SHI’s
total acquisition price, which are then rounded off after the first decimal place.
* “Anticipated depreciation expenses” is the figure calculated using the straight-line method in proportion to the expected usefullife adopted by New SHR in consideration of various information in the engineering reports acquired at the time of theacquisition of the Assets to be Acquired.

3．Details of the Assets to be Acquired and Leases(1) Prime Maison Shirokanedai Tower
Outline of specified asset (trust beneficiary interest)
Trustee
Location

Undecided

Trust term expiration date

Undecided(Address) 1-1-17 Kamiosaki, Shinagawa-ku, Tokyo(Lot number) 1-537-40 Kamiosaki, Shinagawa-ku, Tokyo
Form of ownershipLand use district

Ownership
Commercial district,
Category 1 residential
district

Area (m2)Form of ownership
Use

Apartment Complex

Total floor area
(m2)

1,786.53

Land

Floor-area ratio(Land use district
designation)
Building coverage
ratio(Land use district
designation)
Planned acquisition price(thousand yen)

Ownership

8,896.22

Building
500%/300%

Structure/numberof floorsRC, 23F

80%/60%Construction
completion date

May 20, 2016

7,950,000

Whether security is established

Total leasable area (m2)

6,772.89

Total number of tenants

Total leased area (m2)

5,980.33

None

Outline of leasing and management

Occupancy rate (area basis)

88.3%

Security deposit (thousand yen)

33,482

Property management company

Sekiwa Real Estate, Ltd.

Agreement term expiration date

Undecided

Number of leasable residential
units (units)
Number of leased residential
units (units)
Monthly lease revenue(thousand yen)
LesseeAppraised value (thousand yen)Time of valuation

220
192
32,902
Sekiwa Real Estate, Ltd.

Master lease agreement/pass-through-type
Outline of building engineering report (building condition
appraisal), etc.
Tokyo Bldg-Tech Center Co.,
Investigation report company
Ltd.
Leasing format

Outline of written appraisal
Appraisal method1

Appraisal by Tanizawa
Sogo Appraisal Co., Ltd.
8,340,000

Emergency
Repairexpenses(thousand yen)

Within one
year
2 to 12-year
periodBuilding replacement cost(thousand yen)
Probable maximum loss rate
(PML)

December 1, 2017

0
0
8,120
2,347,000
1.61%

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

7

Notes
1. The floor-area ratio and the building coverage ratio for the land pertaining to the trust real estate will differ due to differences in
the land use district, but when weighted averages are calculated using their subject area, they respectively become 394.46% and69.44%.
2. The foundation (underground installation) of the wall previously installed on the boundary line of the adjoining land on thenorth west side of this property encroaches on this property’s land. SHI has agreed with the seller that a memorandum of
understanding on encroachments will be executed, at the seller’s responsibility and expense, with the owner of the undergroundinstallation that encroachment.

(2) Prime Maison Otsuka
Outline of specified asset (trust beneficiary interest)
Trustee
Location

Undecided

Trust term expiration date

Undecided(Address) 1-15-1 Kitaotsuka, Toshima-ku, Tokyo(Lot number) 1-15-4 Kitaotsuka, Toshima-ku, Tokyo
Form ofownershipForm of ownership

Ownership

Land use district

Commercial district

Area (m2)Apartment complex and retail
store

Use
Total floor area(m2)

649.05Land

Floor-area ratio(Land use district
designation)
Building coverage
ratio(Land use district
designation)
Planned acquisition price(thousand yen)

Ownership

5,149.96

Building
700%/400%

Structure/numberof floors

RC・S, 19F

80%

Construction
completion date

January 11, 2017

3,700,000

Whether security is established

3,921.35

Total number of tenants

None

Outline of leasing and management
Total leasable area (m2)
Total leased area (m2)

3,336.23

Occupancy rate (area basis)

85.1%

Security deposit (thousand yen)

14,401

Property management company
Agreement term expiration date

Number of leasable residential
units (units)
Number of leased residential
units (units)
Monthly lease revenue(thousand yen)

Sekiwa Real Estate, Ltd.

LesseeAppraised value (thousand yen)Time of valuation

144 (excluding one retail store)
127 (excluding one retail store)
15,693
Sekiwa Real Estate, Ltd.

Master lease agreement
Leasing format/pass-through-type
Outline of building engineering report (building condition
appraisal), etc.
Tokyo Bldg-Tech Center Co.,
Investigation report company
Ltd.

Undecided

Outline of written appraisal
Appraisal method1

Appraisal by Tanizawa
Sogo Appraisal Co., Ltd.
3,860,000

Emergency
Repairexpenses(thousand yen)

Within one
year
2 to 12-year
periodBuilding replacement cost(thousand yen)
Probable maximum loss rate
(PML)

December 1, 2017

0
0
6,540
1,401,000
3.34%

Notes
1. The floor-area ratio of the land pertaining to the trust real estate is 700% in the range up to 20m from the west side and city
planning road, and is 400% in the range beyond 20m from the west side and city planning road. When a weighted average iscalculated using that subject area, it becomes 638.07%.

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

8(3) Prime Maison Asakusabashi
Outline of specified asset (trust beneficiary interest)
Trustee
Location

Undecided

Trust term expiration date

Undecided(Address) 2-21-8 Yanagibashi, Taito-ku, Tokyo(Lot number) 2-11-18 Yanagibashi, Taito-ku, Tokyo
Form of ownership

Ownership

Land use district

Commercial district

Area (m2)Form of ownership
Use
Total floor area(m2)

422.87

Floor-area ratio(Land use district
designation)
Building coverage
ratio(Land use district
designation)
Planned acquisition price(thousand yen)
Land

Ownership
Apartment complex

Building

500%

80%

2,652.02

Structure/numberof floorsRC, 13F

Construction
completion date

October 7, 2016

1,680,000

Whether security is established2,033.06

Total number of tenants

None

Outline of leasing and management
Total leasable area (m2)
Total leased area (m2)

1,917.15

Occupancy rate (area basis)

94.3%

Security deposit (thousand yen)

7,663

Property management company
Agreement term expiration date

Sekiwa Real Estate, Ltd.

LesseeUndecided

Appraisal by Tanizawa
Sogo Appraisal Co., Ltd.

Appraised value (thousand yen)Time of valuation

64
60
8,311
Sekiwa Real Estate, Ltd.

Master lease agreement
Leasing format/pass-through-type
Outline of building engineering report (building condition
appraisal), etc.
Tokyo Bldg-Tech Center Co.,
Investigation report company
Ltd.

Outline of written appraisal
Appraisal method1

Number of leasable residential
units (units)
Number of leased residential
units (units)
Monthly lease revenue(thousand yen)

1,760,000

Emergency

0

Repairexpenses(thousand yen)

Within one
year
2 to 12-year
periodBuilding replacement cost(thousand yen)
Probable maximum loss rate
(PML)

December 1, 2017

0
2,050
659,000
8.04%

Notes
1. The building coverage ratio of the land pertaining to the trust real estate should be 80%, but it is 90% because it is relaxed due tobeing a corner lot.

(4) Prime Maison Daikanyama
Outline of specified asset (trust beneficiary interest)
Trustee
Location

Undecided

Trust term expiration date

Undecided(Address) 1-9-6 Aobadai, Meguro-ku, Tokyo(Lot number) 1-143-6 Aobadai, Meguro-ku, Tokyo

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

9Form of ownership

Ownership

Land use district

Category 1 low-rise
exclusive residential district

Area (m2)Form of ownership
Use

Floor-area ratio(Land use district
designation)
Building coverage
ratio(Land use district
designation)
Planned acquisition price(thousand yen)

Apartment complex

Total floor area(m2)

1,041.02

Land

Ownership

Building

2,522.21

150%

Structure/numberof floorsRC, 3F/B2F

60%

Construction
completion date

January 12, 2017

2,520,000

Whether security is established1,779.17

Total number of tenants

None

Outline of leasing and management
Total leasable area (m2)
Total leased area (m2)

1,091.88

Occupancy rate (area basis)

61.4%

Security deposit (thousand yen)

19,920Property management company

Sekiwa Real Estate, Ltd.

Agreement term expiration date

Undecided

Lessee7,485
Sekiwa Real Estate, Ltd.

2,650,000

Time of valuation

17

Master lease agreement/
pass-through-type
Outline of building engineering report (building condition
appraisal), etc.
Tokyo Bldg-Tech Center Co.,
Investigation report company
Ltd.

Appraisal by Tanizawa
Sogo Appraisal Co., Ltd.

Appraised value (thousand yen)

27

Leasing format

Outline of written appraisal
Appraisal method1

Number of leasable residential
units (units)
Number of leased residential
units (units)
Monthly lease revenue(thousand yen)

Emergency

0

Repairexpenses(thousand yen)

Within one
year
2 to 12-year
periodBuilding replacement cost(thousand yen)
Probable maximum loss rate
(PML)

December 1, 2017

0
3,520
757,000
9.32%

Notes
1. No applicable matters.

(5) Prime Maison Gotenyama West
Outline of specified asset (trust beneficiary interest)
Trustee
Location

Undecided

Form of ownership

Ownership

Land use district

Category 1 low-rise
exclusive residential district

Area (m2)Land

Trust term expiration date

Undecided(Address) 6-5-8 Kitashinagawa, Shinagawa-ku, Tokyo(Lot number) 6-387-2 Kitashinagawa, Shinagawa-ku, Tokyo

Floor-area ratio(Land use district
designation)
Building coverage
ratio(Land use district
designation)

Form of ownership
Use

Ownership
Apartment complex

Total floor area(m2)

3,167.72
Building

5,520.41

150%

Structure/numberof floorsRC, 4F/B1F

60%

Construction
completion date

January 18, 2011

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

10Planned acquisition price(thousand yen)

3,400,000

Whether security is established

Total leasable area (m2)

3,569.73

Total number of tenants

Total leased area (m2)

3,039.10

None

Outline of leasing and management

Occupancy rate (area basis)

85.1%

Security deposit (thousand yen)

47,460Property management company

Sekiwa Real Estate, Ltd.

Agreement term expiration date

Undecided

Time of valuation

26
22
16,270
Sekiwa Real Estate, Ltd.

Master lease agreement/
pass-through-type
Outline of building engineering report (building condition
appraisal), etc.
Tokyo Bldg-Tech Center Co.,
Investigation report company
Ltd.
Leasing format

Appraisal by Tanizawa
Sogo Appraisal Co., Ltd.

Appraised value (thousand yen)

Number of leasable residential
units (units)
Number of leased residential
units (units)
Monthly lease revenue(thousand yen)
LesseeOutline of written appraisal
Appraisal method

13,560,000

Emergency

0

Repairexpenses(thousand yen)

Within one
year
2 to 12-year
periodBuilding replacement cost(thousand yen)
Probable maximum loss rate
(PML)

December 1, 2017

074,2601,851,000
6.85%

Notes
1

Part of the wall on the land adjoining the north side of this property is being encroached upon this property’s land. SHI has
agreed with the seller that, at the seller’s responsibility and expense, the encroachment will be removed, or a memorandum of
understanding on encroachments will be executed with the owner of the wall.

(6) Esty Maison Toyosu Residence
Outline of specified asset (trust beneficiary interest)
Trustee
Location

Sumitomo Mitsui Trust
Trust term expiration dateBank, Limited(Address) 3-5-3 Toyosu, Koto-ku, Tokyo(Lot number) 3-1-43 Toyosu, Koto-ku, Tokyo and one other plot
Ordinary fixed-term land
Form of ownership
Form of ownershiplease rightLand use district
Area (m2)

Industrial district

Use

Floor-area ratio(Land use district
designation)
Building coverage
ratio(Land use district
designation)
Planned acquisition price(thousand yen)

Ownership
Apartment complex, office,and retail store

Total floor area
(m2)

8,818.22

Land

September 26, 2023

26,364.53

Building
200%

Structure/numberof floorsRC, 14F

60%

Construction
completion dateFebruary 28, 2008

6,050,000

Whether security is established

23,538.73

Total number of tenants

None

Outline of leasing and management
Total leasable area (m2)
Total leased area (m2)Occupancy rate (area basis)

23,065.61
98.0%

Number of leasable residential
units (units)
Number of leased residential
units (units)1384 (excluding six retail stores)
375 (excluding six retail stores)

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

11Security deposit (thousand yen)

105,289

Property management company

Haseko Livenet, Inc.

Agreement term expiration dateJuly 31, 2018

LesseeAppraised value (thousand yen)Time of valuation

74,049Haseko Livenet, Inc.

Master lease agreement/
pass-through-type
Outline of building engineering report (building condition
appraisal), etc.
Tokyo Bldg-Tech Center Co.,
Investigation report company
Ltd.
Leasing format

Outline of written appraisal
Appraisal method

Monthly lease revenue(thousand yen)Appraisal by Tanizawa
Sogo Appraisal Co., Ltd.
6,440,000

Emergency
Repairexpenses(thousand yen)

Within one
year
2 to 12-year
periodBuilding replacement cost(thousand yen)
Probable maximum loss rate
(PML)

December 1, 2017

00452,510
6,605,000
4.37%

Notes
1. The floor-area ratio for the land relating to the trust real estate was to be 200%, but authorization was received for relaxation of
the floor-area ratio under the provisions of Article 68-3, Paragraph 1 of the Building Standards Act, and the floor-area ratio is283.08%.
2. Of the land relating to the trust real estate, Tokyo Gas Co., Ltd. has land surface rights to part of the land aimed at the ownershipof a gas governor and its incidental facilities.
3. Of the buildings relating to the trust real estate, because the sign installed in the E building retail store is in a fire prevention
district and is more than 3m high, it must be made of nonflammable materials under the Fire Service Act (Act No. 186 of 1948;
as amended), but as of today it has not been confirmed whether or not it satisfies this requirement. SHI and Seller agree that
Seller shall conduct negotiations with tenants and promptly conduct the appropriate measures regarding the matter set out aboveat Seller’s responsibility and expense.
4. Urban Renaissance Agency is the land owner and the lease is an ordinary fixed-term land lease right with a lease term of 65
years from March 17, 2006.
5. If selling the fixed-term land lease right, it is necessary to notify the land owner in advance of the details of the sale agreementin writing and to receive the written approval of the land owner. Further, the written approval of the land owner is also required
if desiring to establish rights for the purpose of sale, pledge, mortgage, or other security with respect to the ownership right ofthe subject building, and if desiring to reconstruct or make an addition or renovation to the building or to do other work on thebuildings, etc.
6. The land leaseholder and the land owner may each apply to the other for the sale of the subject land during the period from thedate on which 30 years has passed since the execution of the fixed-term land lease agreement to the date one year before theexpiry of the fixed-lease term, and if the other party’s application is approved, the land owner shall hand the subject land over tothe land leaseholder within one year. The purchase price and the other conditions of sale will be as provided by the land owner.

[Explanation of Matters Stated in the Above Tables]
(1)

(2)

(3)
(4)
(5)
(6)

(7)
(8)
(9)

For “Trustee”, as of today, the trustees and the trust term expiration dates for Assets to be Acquired except Esty Maison Toyosu Residence areundecided, but are scheduled to be decided before acquisition of the assets to be acquired is completed. Further, for Esty Maison Toyosu
Residence, we plan to continue to use the current trustee as of this day, and therefore the trustee and trust term expiration date as of today are
indicated.
“Location (Address)” indicates the residential address description, and for properties for which the residential address description has not been
made yet, the details in the location column for the building indicated in the registry (including the registration record; same below) are indicated(in cases of multiple lot numbers, that of one parcel). “Location (Lot number)” indicates the respective lot numbers indicated in the registration
record (in cases of multiple lot numbers, that of one plot).
“Form of ownership” for land and buildings indicates the type of right planned to be held by the Trustee for the trust real estate.
“Land use district” of the land indicates the type of land use district listed in Article 8, Paragraph 1, Item 1 of the City Planning Act (Act No. 100
of 1968; as amended) (“City Planning Act”).
“Area” for land indicates the land area indicated in the registration record (in cases of multiple areas, the total thereof).
“Floor-area ratio” for land indicates the value determined by City Planning in accordance with the land use district, etc. for the ratio of the total
area of the building to the site area, as set forth in Article 52 of the Building Standards Act (Act No. 201 of 1950; as amended)(the “BuildingStandards Act”).
“Building coverage ratio” for land indicates the value determined by City Planning in accordance with the land use district, etc. for the ratio of
the construction area of the structure to the site area, as set forth in Article 53 of the Building Standards Act.
“Use” for buildings indicates the principal usage among those listed in the registry.
“Total floor area” for buildings indicates the total floor area of the principal buildings indicated in the registry.

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

12(10) “Structure/Number of floors” for buildings indicates the structure and number of floors listed in the registry. The abbreviations used in“Structure/Number of floors” are set forth below.
RC: Steel-reinforced concrete construction, S: Steel frame construction, F: Number of floors, B: Basement(11) “Construction completion date” for buildings indicates the initial time of new construction indicated in the registry.
(12) “Whether security is established” indicates whether or not there are plans to establish security after acquisition by New SHR.
(13) The values in “Outline of leasing and management” indicate information as of the last day of December 2017, and are indicated based on values
and information provided by the current owner of the assets to be acquired. Furthermore, “Total leased area” is not indicated in the registry but isthe total leasing area indicated in lease agreements; provided, however, that if there is an obvious error in the indication in the lease agreements,
it is indicated based on the construction drawings, etc. In addition, because the Trustee plans to enter into a new master lease agreement with themaster lessee for the Assets to be Acquired except Esty Maison Toyosu Residence, “1” is indicated in “Total number of tenants” on theassumption that the consent of all end tenants has been obtained regarding the master lessee being the lessor. For the definition of Master Lease
Agreement, please refer to (17) below.
(14) “Monthly lease revenue” indicates the total amount of monthly rent under the lease agreements valid as of the end of December 2017 (including
administrative expenses, but excluding consumption tax relating to rent for the retail stores and offices), because the master lessee and theTrustee plan to enter into a master lease agreement/pass-through-type of lease agreement for the Assets to be Acquired except Esty Maison
Toyosu Residence, and for the Esty Maison Toyosu Residence there already exists a lease agreement between the current Lessee and the Trustee
which is planned to be continued, and the rent paid by the master lessee and the rent paid by tenant to the master lessee are anticipated to be thesame amount. For the definitions of master lease agreement/pass-through-type, please refer to (17) below.
(15) “Property management company” indicates the property management company anticipated to be selected as the delegatee of the property
management business for the trust real estate relating to the assets to be acquired except Esty Maison Toyosu Residence as of this date,. For the
Esty Maison Toyosu Residence, the current property management company is planned to continue its function, and as such the current property
management company is listed.
(16) “Lessee” indicates the lessee anticipated to enter into a master lease agreement with the Trustee for the Assets to be Acquired except Esty Maison
Toyosu Residence. For the Esty Maison Toyosu Residence, the current lessee is planned to continue its function as the master lessee, and as suchthe current lessee is listed.
(17) “Leasing format” indicates the leasing scheme anticipated to be entered into between the Lessee and the Trustee (direct lease, sublease, etc.) for
the Assets to be Acquired except Esty Maison Toyosu Residence. For the Esty Maison Toyosu Residence, the current leasing scheme is planned
to be continued, and as such the current leasing scheme is listed. Furthermore, “Master lease agreement” refers to a lease agreement for an entire
building to be entered into after acquisition by New SHR with a master lessee for the purpose of subleasing to third parties for the Assets to be
Acquired except Esty Maison Toyosu Residence, and refers to a lease agreement for an entire building currently entered into between the lessee
and trustee for the purpose of subleasing to third parties for Esty Maison Toyosu Residence. In addition, “Master leaseagreement/pass-through-type” means a master lease agreement whereby the master lessee pays the same amount of rent as the rent received fromthe parties leasing the property from the master lessee, such as the end tenants, etc.
(18) The value for “Probable maximum loss rate” is based on the earthquake PML evaluation report prepared by SOMPO Risk Management & HealthCare, Inc. The contents of the earthquake PML evaluation report indicate the opinions of the parties reporting on the investigation, and SHI and
New SHR do not guarantee the accuracy of those contents. “Probable maximum loss rate (PML)” means probable maximum loss rate due toearthquake, and here it means the level of damage that would be incurred due to an earthquake of the largest scale anticipated in a 50-year period(a large-scale earthquake with a recurrence period of 475 years, also equivalent to a 10% probability in 50 years), indicated as a percentage inrespect of the replacement cost for anticipated restoration of damage costs.
(19) The matters indicated in “Notes” are matters considered material in light of their impact on the valuation amount, profitability, and disposabilityof the property, as well as matters considered material in relation to the right relations and use, etc. of the property, including the following
matters.
(i) The main restrictions and regulations under laws and regulations and various rules;(ii) The main encumbrances and restrictions relating to right relations, etc.;(iii) The main cases if there are any structures, etc. that encroach over the boundaries between the trust real estate and adjacent land or issues
regarding boundary confirmations, etc., and agreements relating thereto; and(iv) The main agreed matters and agreements between co-owners or unit owners.

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

13

4．Details of the Assets to be Sold and Cancellation of Leases(1) Esty Maison Machida
Outline of specified asset (trust Beneficiary interest)
Trustee
Location

Mizuho Trust &Trust term expiration dateBanking Co., Ltd.
(Address) 2-1-17 Haramachida, Machida-shi, Tokyo(Lot number) 2-1272-6 Haramachida, Machida-shi, Tokyo and three other plots
Form of ownership

Ownership

Land use district

Commercial district

Area (m2)
Floor-area ratio
Land(Land use district
designation)
Building coverage ratio(Land use district
designation)
Outline of leasing and management

Form of ownership
Use
Building

Structure/number offloorsConstruction
completion date80%

Total leasable area (m2)

3,090.89

Total number of tenants

Total leased area (m2)

2,838.08

Property management company

Occupancy rate(area basis)

Last day of
September 2013
Last day of
September 2014
Last day of
September 2015
Last day of
September 2016
Last day of
September 2017

Ownership
Apartment complex

Total floor area (m2)

587.48600%

July 31, 2025

4,033.59
SRC, 15F
February 23, 2004

1
Sekiwa Real Estate, Ltd.

94.9%
95.5%
95.8%

Leasing format

Master lease agreement/
pass-through-type

90.8%
91.8%

Security deposit (thousand yen)

8,592

Lease income (thousand yen)

50,436

Outline of written appraisal
Appraised value (thousand yen)Time of valuation

1,530,000

Appraisal agency

Tanizawa Sogo Appraisal
Co., Ltd.

December 1, 2017(2) Esty Maison Shinkawasaki
Outline of specified asset (trust beneficiary interest)
Trustee
Location

Mizuho Trust &Trust term expiration dateBanking Co., Ltd.
(Address) 1-4 Furuichiba, Saiwai-ku, Kawasaki-shi, Kanagawa(Lot number) 1-4-1 Furuichiba, Saiwai-ku, Kawasaki-shi, Kanagawa
Form of ownershipLand use district
Land

Area (m2)
Floor-area ratio(Land use district
designation)
Building coverage ratio(Land use district
designation)
Outline of leasing and management

Ownership
Category 1
medium-to-high-rise
exclusive residential
district, category 1
residential district
1,992.09

Form of ownership

Use
Building

October 31, 2025

Ownership

Apartment complex

Total floor area (m2)200%

Structure/number offloors60%

Construction
completion date

Total leasable area (m2)3,737.47

Total number of tenants

Total leased area (m2)3,737.47

Property management company

3,737.47
RC, 5F
March 5, 1999

1-

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

14

Occupancy rate(area basis)

Last day of
September 2013
Last day of
September 2014
Last day of
September 2015
Last day of
September 2016
Last day of
September 2017100.0%
100.0%
100.0%

Leasing format

Direct lease agreement

100.0%
100.0%

Security deposit (thousand yen)

10,666

Lease income (thousand yen)

31,998Outline of written appraisal
Appraised value (thousand yen)Time of valuation

1,230,000

Appraisal agency

Morii Appraisal &Investment Consulting, Inc.

December 1, 2017(3) Esty Maison Megurohoncho
Outline of specified asset (trust beneficiary interest)
Trustee
Location

Mizuho Trust &Trust term expiration dateBanking Co., Ltd.
(Address) 4-8-21 Megurohoncho, Meguro-ku, Tokyo(Lot number) 4-170-22 Megurohoncho, Meguro-ku, Tokyo and one other plot
Form of ownershipLand use district

Area (m2)
Floor-area ratio(Land use district
designation)
Building coverage ratio(Land use district
designation)
Outline of leasing and management
Land

Ownership
Category 1
medium-to-high-rise
exclusive residential
district865.22Form of ownership
Use
Building

Total floor area (m2)200%

Structure/number offloors60%

Construction
completion date

Total leasable area (m2)

1,656.02

Total number of tenants

Total leased area (m2)

1,423.43

Property management company

Occupancy rate(area basis)

Last day of
September 2013
Last day of
September 2014
Last day of
September 2015
Last day of
September 2016
Last day of
September 2017

Security deposit (thousand yen)

October 31, 2025

Ownership
Apartment complex
1,975.84
RC, 3F/B1F
February 22, 2006

1
Sekiwa Real Estate, Ltd.

96.9%
100.0%
89.8%

Leasing format

Master lease agreement/
pass-through-type

93.0%
86.0%
6,355

Lease income (thousand yen)

29,057

Outline of written appraisal
Appraised value (thousand yen)Time of valuation

1,130,000

Appraisal agency

Daiwa Real EstateAppraisal Co., Ltd.

September 30, 2017

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

15

(4) Esty Maison Joto
Outline of specified asset (trust beneficiary interest)
Trustee
Location

Mizuho Trust &Banking Co., Ltd.
(Address) 2-11-8 Noe, Joto-ku, Osaka-shi, Osaka(Lot number) 2-59 Noe, Joto-ku, Osaka-shi, Osaka
Form of ownership

Ownership

Land use district

Category 1 residential
district

Area (m2)

Trust term expiration date

Form of ownership
Use
Building

Floor-area ratio(Land use district
designation)
Building coverage ratio(Land use district
designation)
Outline of leasing and management

Ownership
Apartment complex

Total floor area (m2)

740.49Land

October 31, 2025

300%

Structure/number offloors80%

Construction
completion date

2,232.26
RC, 9F

August 31, 2006

Total leasable area (m2)

2,065.92

Total number of tenants

Total leased area (m2)

1,933.44

Property management company

Sekiwa Kanri Kansai Ltd.

Leasing format

Master lease agreement/
pass-through-type

Occupancy rate(area basis)

Last day of
September 2013
Last day of
September 2014
Last day of
September 2015
Last day of
September 2016
Last day of
September 2017

1

97.0%
90.7%
93.6%
95.5%
93.6%

Security deposit (thousand yen)

4,232

Lease income (thousand yen)

32,181

Outline of written appraisal
Appraised value (thousand yen)Time of valuation

951,000

Appraisal agency

Japan Real Estate InstituteDecember 1, 2017(5) Esty Maison Tenjinhigashi I
Outline of specified asset (trust beneficiary interest)
Trustee
Location

Sumitomo Mitsui Trust
Trust term expiration dateBank, Limited(Address) 4-3 Susakimachi, Hakata-ku, Fukuoka-shi, Fukuoka(Lot number) 53 Susakimachi, Hakata-ku, Fukuoka-shi, Fukuoka
Form of ownership

Ownership

Land use district

Commercial district

Area (m2)
Floor-area ratio
Land(Land use district
designation)
Building coverage ratio(Land use district
designation)
Outline of leasing and management
Total leasable area (m2)
Total leased area (m2)Form of ownership
Use
Building

1,058.82

Structure/number offloorsConstruction
completion date80%

1,058.82

Ownership
Apartment complex

Total floor area (m2)

239.18500%

September 30, 2027

1,158.70
SRC, 15F
January 31, 2007

Total number of tenants
Property management company

1
Miyoshi Real Estate Co.,
Ltd.

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

16

Occupancy rate(area basis)

Last day of
September 2013
Last day of
September 2014
Last day of
September 2015
Last day of
September 2016
Last day of
September 2017

95.0%
97.8%
93.5%

Leasing format

Master lease agreement/
pass-through-type

97.8%
100.0%

Security deposit (thousand yen)-

Lease income (thousand yen)

14,842Outline of written appraisal
Appraised value (thousand yen)Time of valuation

364,000

Appraisal agency

Daiwa Real EstateAppraisal Co., Ltd.

September 30, 2017(6) Esty Maison Tenjinhigashi II
Outline of specified asset (trust beneficiary interest)
Trustee
Location

Sumitomo Mitsui Trust
Trust term expiration dateBank, Limited(Address) 6-12 Susakimachi, Hakata-ku, Fukuoka-shi, Fukuoka(Lot number) 109-1 Susakimachi, Hakata-ku, Fukuoka-shi, Fukuoka
Form of ownership

Ownership

Land use district

Commercial district

Area (m2)
Floor-area ratio
Land(Land use district
designation)
Building coverage ratio(Land use district
designation)
Outline of leasing and management

Form of ownership
Use

Ownership
Apartment complex

Total floor area (m2)

514.89400%

September 30, 2027

Building

Structure/number offloorsConstruction
completion date80%

2,108.69
SRC, 13F

May 23, 2007

Total leasable area (m2)

1,943.72

Total number of tenants

Total leased area (m2)

1,825.02

Property management company

Miyoshi Real Estate Co.,Ltd.

Leasing format

Master lease agreement/
pass-through-type

Occupancy rate(area basis)

Last day of
September 2013
Last day of
September 2014
Last day of
September 2015
Last day of
September 2016
Last day of
September 2017

1

97.5%
96.3%
95.1%
97.6%
93.9%

Security deposit (thousand yen)-

Lease income (thousand yen)

27,579Outline of written appraisal
Appraised value (thousand yen)Time of valuation

738,000

Appraisal agency

Daiwa Real EstateAppraisal Co., Ltd.

September 30, 2017

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

17

(7) Esty Maison Shijonishinotoin
Outline of specified asset (trust beneficiary interest)
Trustee
Location

Sumitomo Mitsui Trust
Trust term expiration dateBank, Limited(Address) 697 Myodenjicho, Nishinotoin-dori Shijosagaru, Shimogyo-ku, Kyoto-shi, Kyoto(Lot number) 697 Myodenjicho, Nishinotoin-dori Shijosagaru, Shimogyo-ku, Kyoto-shi, Kyoto
Form of ownership

Ownership

Land use district

Commercial district

Area (m2)
Floor-area ratio
Land(Land use district
designation)
Building coverage ratio(Land use district
designation)
Outline of leasing and management

Form of ownership
Use

Ownership
Apartment complex

Total floor area (m2)

400.59700%

April 24, 2018

Building

80%

3,374.74

Structure/number offloorsRC, 12F/B1F

Construction
completion date

April 8, 2008

Total leasable area (m2)2,261.28

Total number of tenants

Total leased area (m2)2,160.19

Property management company

Haseko Livenet, Inc.

Leasing format

Master lease agreement/
pass-through-type

Occupancy rate(area basis)

Last day of
September 2013
Last day of
September 2014
Last day of
September 2015
Last day of
September 2016
Last day of
September 2017

1

96.7%
100.0%
95.6%
92.9%
95.5%

Security deposit (thousand yen)

4,000

Lease income (thousand yen)

38,825Outline of written appraisal
Appraised value (thousand yen)Time of valuation

1,180,000

Appraisal agency

Japan Real Estate InstituteDecember 1, 2017(8) Esty Maison Hachiojiminamino
Outline of specified asset (trust beneficiary interest)
Trustee
Location

Mizuho Trust &Trust term expiration dateBanking Co., Ltd.
(Address) 3-2-8 Nishikatakura, Hachioji-shi, Tokyo(Lot number) 3-2-6 Nishikatakura, Hachioji-shi, Tokyo and four other plots
Form of ownership

Ownership

Land use district

Category 1 residential
district

Form of ownership
Use

Area (m2)Land
Floor-area ratio(Land use district
designation)
Building coverage ratio(Land use district
designation)
Outline of leasing and management

1,134.50

Total leasable area (m2)2,155.16

Total number of tenants

Total leased area (m2)2,105.04

Property management company

October 31, 2025

Ownership
Apartment complex

Total floor area (m2)
Building

200%

Structure/number offloors60%

Construction
completion date

2,243.06
RC, 5F
March 6, 2007

1
Sekiwa Real Estate, Ltd.

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

18

Occupancy rate(area basis)

Last day of
September 2013
Last day of
September 2014
Last day of
September 2015
Last day of
September 2016
Last day of
September 2017

93.0%
94.2%
95.3%

Leasing format

Master lease agreement/
pass-through-type

94.2%
97.7%

Security deposit (thousand yen)

5,922

Lease income (thousand yen)

33,249Outline of written appraisal
Appraised value (thousand yen)Time of valuation

875,000

Appraisal agency

Richi Appraisal Institute

September 30, 2017(9) Esty Maison Nishinakajima
Outline of specified asset (trust beneficiary interest)
Trustee
Location

Mizuho Trust &Trust term expiration dateJuly 31, 2027
Banking Co., Ltd.
(Address) 2-8-21 Higashi Nakajima, Higashi Yodogawa-ku, Osaka-shi, Osaka(Lot number) 2-8-10 Higashi Nakajima, Higashi Yodogawa-ku, Osaka-shi, Osaka and six other plots
Form of ownership

Ownership

Land use district

Commercial district

Area (m2)
Floor-area ratio
Land(Land use district
designation)
Building coverage ratio(Land use district
designation)
Outline of leasing and management

Form of ownership
Use

Apartment complex

Total floor area (m2)

969.02400%

Ownership

Building

Structure/number offloorsConstruction
completion date80%

3,947.24
RC, 14F
April 18, 2007

Total leasable area (m2)

3,643.42

Total number of tenants

Total leased area (m2)

3,353.96

Property management company

Sekiwa Kanri Kansai Co.,Ltd.

Leasing format

Master lease agreement/
pass-through-type

Occupancy rate(area basis)

Last day of
September 2013
Last day of
September 2014
Last day of
September 2015
Last day of
September 2016
Last day of
September 2017

Security deposit (thousand yen)

1

96.2%
92.9%
93.0%
96.4%
92.1%
5,876

Lease income (thousand yen)

61,750Outline of written appraisal
Appraised value (thousand yen)Time of valuation

1,900,000

Appraisal agency

Japan Real Estate InstituteDecember 1, 2017

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

19

(10) Esty Maison Kawaramachi
Outline of specified asset (trust beneficiary interest)
Mitsubishi UFJ Trust
Trusteeand Banking
Trust term expiration date
Corporation(Address) 3-2-10 Kawaramachi, Chuo-ku, Osaka-shi, Osaka
Location(Lot number) 3-17-2 Kawaramachi, Chuo-ku, Osaka-shi, Osaka
Form of ownershipLand use district

Ownership
Commercial district

Area (m2)Land
Floor-area ratio(Land use district
designation)
Building coverage ratio(Land use district
designation)
Outline of leasing and management

Use

Building
600%

Structure/number offloors80%

Construction
completion date

3,486.48

Total leased area (m2)

3,311.28

Last day of
September 2013
Last day of
September 2014
Last day of
September 2015
Last day of
September 2016
Last day of
September 2017

Ownership
Apartment complex andofficeTotal floor area (m2)655.89Total leasable area (m2)Occupancy rate(area basis)

Form of ownership

February 28, 2023

4,580.48
RC, 14F
October 17, 2006

Total number of tenants

1

Property management company

Sekiwa Kanri Kansai Co.,Ltd.

Leasing format

Master lease agreement/
pass-through-type

94.2%
95.1%
94.5%
96.3%
95.0%

Security deposit (thousand yen)

7,971

Lease income (thousand yen)

58,186

Outline of written appraisal
Appraised value (thousand yen)Time of valuation

1,930,000

Appraisal agency

Tanizawa Sogo Appraisal
Co., Ltd.

December 1, 2017(11) Esty Maison Shibaura
Outline of specified asset (trust beneficiary interest)
Trustee
Location

Mizuho Trust &Trust term expiration dateBanking Co., Ltd.
(Address) 2-8-3 Shibaura, Minato-Ku, Tokyo(Lot number) 2-1-68 Shibaura, Minato-Ku, Tokyo and three other plots
Form of ownership

Ownership

Land use district

Quasi-industrial
district

Area (m2)Form of ownership

Ownership
Apartment complex

Total floor area (m2)

1,217.25

Land

Floor-area ratio(Land use district
designation)
Building coverage ratio(Land use district
designation)
Outline of leasing and management

Use

March 31, 2025

Building
400%

Structure/number offloors60%

Construction
completion date

Total leasable area (m2)

3,795.82

Total number of tenants

Total leased area (m2)

3,744.32

Property management company

4,855.53
SRC, 10F
August 26, 1996

1
Sekiwa Real Estate, Ltd.

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

20

Occupancy rate(area basis)

Last day of
September 2013
Last day of
September 2014
Last day of
September 2015
Last day of
September 2016
Last day of
September 2017

91.6%

Leasing format

Master lease agreement/
pass-through-type

92.8%
98.6%

Security deposit (thousand yen)

12,615

Lease income (thousand yen)

75,708Outline of written appraisal
Appraised value (thousand yen)Time of valuation

2,910,000

Appraisal agency

Chuo Real Estate Appraisal
Co., Ltd.

December 1, 2017(12) Esty Maison Tsutsujigaoka
Outline of specified asset (trust beneficiary interest)
Trustee
Location

Sumitomo Mitsui Trust
Trust term expiration dateBank, Limited(Address) 1-14-19 Nishitsutsujigaoka, Chofu-shi, Tokyo and other(Lot number) 1-14-19 Nishitsutsujigaoka, Chofu-shi, Tokyo and two other plots
Form of ownershipLand use district

Area (m2)
Floor-area ratio(Land use district
designation)
Building coverage ratio(Land use district
designation)
Outline of leasing and management
Land

Ownership
Category 1
medium-to-high-rise
exclusive residential
district
1,503.25

Form of ownership
Use
Building

Total floor area (m2)2,456.48
RC, 5F/B1F

60%

Construction
completion date

March 9, 2002

1,849.70

Total number of tenants

1,658.70

Property management company

Security deposit (thousand yen)

Apartment complex

Structure/number offloorsTotal leased area (m2)Occupancy rate(area basis)

Ownership

200%

Total leasable area (m2)Last day of
September 2013
Last day of
September 2014
Last day of
September 2015
Last day of
September 2016
Last day of
September 2017

May 31, 2025

1
Sekiwa Real Estate, Ltd.

92.3%

Leasing format

Master lease agreement/
pass-through-type

100.0%
89.7%
6,127

Lease income (thousand yen)

27,051

Outline of written appraisal
Appraised value (thousand yen)Time of valuation

911,000

Appraisal agency

Tanizawa Sogo Appraisal
Co., Ltd.

December 1, 2017

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

21

[Explanation of Matters Stated in the Above Tables]“Location (Address)” indicates the residential address description, or for a property for which the residential address is not yet established, thelocation of the building as described in the registry (Including register records; the same hereinafter.) “Location (Lot number)” indicates the lot
number indicated in the land registry (in cases of multiple lot numbers, that of one parcel).
(2) “Form of ownership” for land and buildings indicates the type of right held by the Trustee for the trust real estate.
(3) “Land use district” for land indicates the type of land use district as set forth in Article 8, Paragraph 1, Item 1 of the City Planning Act.
(4) “Area” for land indicates the land area indicated in the registration record (in cases of multiple areas, the total thereof).
(5) “Floor-area ratio” for land indicates the value determined by City Planning in accordance with the land use district, etc. for the ratio of the total
area of the building to the site area, as set forth in Article 52 of the Building Standards Act.
(6) “Building coverage ratio” for land indicates the value determined by City Planning in accordance with the land use district, etc. for the ratio of
the construction area of the structure to the site area, as set forth in Article 53 of the Building Standards Act.
(7) “Use” for buildings indicates the principal usage among those listed in the registry.
(8) “Total floor area” for buildings indicates the total floor area of the principal buildings indicated in the registry.
(9) “Structure/Number of floors” for buildings indicates the structure and number of floors listed in the registry. The abbreviations used in“Structure/Number of floors” are set forth below.
RC: Steel-reinforced concrete structure, SRC: Steel frame and reinforced concrete structure, F: Number of floors, B: Basement(10) “Construction completion date” for buildings indicates the initial time of new construction indicated in the registry.
(11) Values indicated within “Lease and management overall condition” are based on information that is current as of September 30, 2017. However,“Lease income” reflects actual values for the fiscal period ended September 30, 2017 (April 1, 2017 to September 30, 2017). Furthermore, “Total
lettable area” and “Total leasing area” are not indicated in the registry but are totals of leasing area indicated in lease agreements.
(12) “Lease format” indicates the leasing scheme entered into between the Lessee and the Trustee (direct lease, sublease, etc.). Furthermore, “Master
lease agreement” refers to a lease agreement for an entire building entered into with a master lessee for the purpose of subleasing to third parties.
In addition, “Master lease agreement/pass-through-type” means a master lease agreement whereby the master lessee pays the same amount ofrent as the rent received from the parties leasing the property from the master lessee, such as the end tenants, etc.
(1)

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

22

5．Overview of Seller and Purchaser
The Seller of the Assets to be Acquired is the following:
(i)

Name

Sekisui House, Ltd.

(ii)

Location

1-1-88, Oyodonaka, Kita-ku, Osaka-shi, Osaka(iii)

Title and name ofrepresentatives(iv)

Business description

Chairman, Representative Director & CEO Isami Wada
President, Representative Director & COO Toshinori Abe
Industrialized housing design, construction, and contracting along with real estate sales,
brokerage, leasing, management, and related business.

(v)

Capital202,591 million yen (as of October 31, 2017)(vi)

Date established

August 1960

(vii)

Net assets

1,158,204 million yen (consolidated) (as of October 31, 2017)(viii)

Total assets

(ix)
(x)

2,405,285 million yen (consolidated) (as of October 31, 2017)
The Master Trust Bank of Japan, Ltd. (7.41%)
Major shareholders
Sekisui Chemical Co., Ltd. (6.11%)(Shareholding ratio)
Japan Trustee Services Bank, Ltd. (5.69%)(as of July 31, 2017 for each)
Relationship with the Two Investment Corporations and the Two Asset Management Companies
As of today, Sekisui House holds 3.52% of the total number of SHI investment units
outstanding and 6.72% of the total number of SHR investment units outstanding. In
Capital ties
addition, Sekisui House fully owns all of the Two Asset Management Companies’ total
outstanding shares, and as such falls under an Interested Person, etc. as defined in theInvestment Trust Act.
Sekisui House has currently dispatched one part-time director and one part-time corporate
auditor to SHAM and one-part director and one part-time corporate auditor to SHIA. In
Personnel ties
addition, two of SHAM’s officers and employees and 15 of SHIA’a officers andemployees are seconded from Sekisui House.
Sekisui House has entered into an agreement with SHI and SHAM concerning right offirst refusal, as well as a memorandum of understanding regarding use of trademarks with
SHI with the aim of establishing a pipeline for property information (primarily housing
properties), etc. and an memorandum with SHI concerning use of trademark. In addition,
Sekisui House has also entered with SHR and SHIA into a pipeline support agreement,
sponsor support agreement, memorandum of understanding regarding the holding ofinvestment units, and memorandum of understanding regarding use of trademarks.
Furthermore, Sekisui House has agreed on the date hereof that of the agreements noted
above, the agreement with SHI and SHAM for right of first refusal, etc. and theBusiness ties
agreements with SHR and SHIA for pipeline support and sponsor support are subject tothe Investment Corporation Merger coming into effect and shall be terminated on theeffective date of the Investment Corporation Merger. As a result, on the date hereof
Sekisui House entered into a new sponsor support agreement with SHR and SHIA (“NewSponsor Support Agreement”) to take effect on the effective date of the Investment
Corporation Merger (The New Sponsor Support Agreement effectively integrates thecontent of Sekisui House’s agreement with SHI and SHAM regarding the existing rightof first refusal, etc. along with the pipeline support agreement and sponsor support
agreement with SHR and SHIA.)
As sole parent company of the Two Asset Management Companies, Sekisui House is aConcerning Related Parties
related party.

The purchasers of the Assets to be Sold are multiple domestic limited liability companies financed by the same
domestic special purpose company and managed by the same asset management company which shall remain
undisclosed here as they and their investor have not given approval for such disclosure. Furthermore, those purchasers,
their investor, and the asset management company have no capital, personnel, or business ties worthy of mention with
the Two Investment Corporations or the Two Asset Management Companies, and do not constitute related parties to the
Two Investment Corporations or the Two Asset Management Companies.

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

23

6．Information on Property Acquirers, etc.
Prime Maison Shirokanedai Tower, Prime Maison Otsuka, Prime Maison Asakusabashi, Prime Maison Daikanyama, andPrime Maison Gotenyama West
Current Owner

Previous Owner

Company Name

Sekisui House

None.

Relationship with persons of special
interest

Please refer to “5. Overview of Seller andPurchaser” above.

-

Acquisition particulars, reason, etc.

Company development property-

Acquisition price--

Acquisition timing--

Current Owner

Previous Owner

Company Name

Sekisui House

Not a person of special interest

Relationship with persons of special
interest

Please refer to “5. Overview of Seller andPurchaser” above.
Acquired after entering into a real estatepurchase and sale agreement with theprevious owner in September 2013 with thegoal of investment, etc.
Omitted since the current owner has held theproperty for more than one year.

Esty Maison Toyosu Residence

Acquisition particulars, reason, etc.

Acquisition price
Acquisition timing

-

-

-

September 27, 2013-

7．Information Regarding the Design, etc. of the Assets to be Acquired
Property name

ClientBuilder

Building
inspection body

Building designer

Structural designer

Prime Maison
Sekisui House
Shirokanedai Tower

Takenaka
Corporation

Takenaka
Corporation

Takenaka
Corporation

UHEC

Prime Maison
OtsukaSekisui House

KK Kouken Sekkei

Matsuo Architects
OfficeKonoikeConstruction Co.,Ltd.

Juutaku Kinyuu
Fukyuu Kyoukai

Prime Maison
Asakusabashi

Sekisui House

Form Architect
Planning Co., Ltd.

Cross Factory Co.,Ltd.

Sekisui House

Juutaku Kinyuu
Fukyuu Kyoukai

Prime Maison
Daikanyama

Sekisui House

Form Architect
Planning Co., Ltd.

Cross Factory Co.,Ltd.

MabuchiConstruction Co.,Ltd.

Juutaku Kinyuu
Fukyuu Kyoukai

Prime Maison
Gotenyama West

Sekisui House

Nikken Housing
System Ltd.

Taisei Corporation

Taisei Corporation

UHEC

Esty Maison
Toyosu Residence

Sojitz Corporation

Haseko Corporation Haseko Corporation Haseko Corporation

Center for Better
LivingAmong the Assets to be Acquired, the building method for the Prime Maison Shirokanedai Tower has been approvedby the Minister of Land, Infrastructure and Transport under the provisions of Article 68-26 of the Building Standards
Act, and the approval letter has been confirmed. The Prime Maison Otsuka and the Prime Maison Asakusabashi havereceived structural calculation conformity judgments from designated structural calculation conformity judgment
bodies pursuant to the revision of the Building Standards Act enforced in June 2007, and it was confirmed that those
judgments were received at the time of the acquisition of the Assets to be Acquired. In addition, the Prime Maison
Daikanyama, the Prime Maison Gotenyama West, and the Esty Maison Toyosu Residence are not subject to such
structural calculation conformity judgments, so SHI delegated a structural calculation confirmation investigation to athird-party body (Tokyo Bldg-Tech Center Co., Ltd.), and it obtained a results report from that third-party body statingthat no particular improprieties, such as intentional alterations or falsifications, were found in structural calculations, etc.
to the extent of the verification under that investigation.

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

24

8．Outline of Intermediation
There is no applicable intermediation pertaining to the acquisition of the Assets to be Acquired.
The intermediary pertaining to the Assets to be Sold is a domestic general business company, which will remain
undisclosed here as such intermediary has not given approval for such disclosure. Furthermore, such intermediary has
no capital, personnel, or business ties worthy of mention with the Two Investment Corporations or the Two AssetManagement Companies, and does not constitute a related party to the Two Investment Corporations or the Two AssetManagement Companies.
9．Transactions with Interested Persons, etc.
Sekisui House, the seller of the Assets to be Acquired set forth above, constitutes an interested person, etc. as
described above, and it constitutes an interested person stipulated in SHI’s independent rules on conflict of interest
countermeasures. Consequently, upon the execution of the Asset Acquisition Agreements, in accordance with theInvestment Trust Act and the aforementioned independent rules, SHI’s consent has been obtained upon approval by
SHAM’s risk management and compliance office, and deliberation and decision or resolution by SHAM’s investmentcommittee, compliance committee and board of directors, and by SHI’s board of directors.
In addition, SHI constitutes an interested person, etc. in regard to five properties of the Assets to be Acquired otherthan the Esty Maison Toyosu Residence, and it plans to entrust property management business and business as themaster lease company to Sekiwa Real Estate, Ltd., which also constitutes an interested person. The delegation of suchbusiness is also scheduled to undergo procedures equivalent to the foregoing in accordance with the aforementioned
independent rules.
10. Settlement Method for the Assets to be Acquired and the Assets to be Sold
New SHR plans to pay the seller the acquisition price, etc. for the Assets to be Acquired in a lump sum on thescheduled acquisition date. New SHR also plans to settle the sale and purchase price for the Assets to be Sold in a lumpsum on the scheduled sale date.
11. Schedule of the Asset Acquisition and the Asset Sale
The schedule for the acquisition of the Assets to be Acquired and the sale of the Assets to be Sold is as follows.
Acquisition and sale decision date

January 24, 2018

Sale and purchase agreement execution date

January 24, 2018

Scheduled date of sale and purchase price payment and receipt

May 1, 2018

Scheduled date of trust beneficiary interest sale (scheduled acquisition and sale date)

May 1, 2018

12. Impact on the Finances of SHI and New SHR if Forward Commitments, etc. Cannot be Performed(1) Asset Acquisition Agreements
The Asset Acquisition Agreements constitute forward commitments, etc. by an investment corporation stipulated
in the “Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc.” set forth by the
Financial Services Agency.
Under the Asset Acquisition Agreements, if the Asset Acquisition Agreements have been canceled due to a breachof a material duty by SHI (or New SHR if New SHR has succeeded SHI’s rights and obligations) or on other grounds,
SHI (or New SHR if New SHR has succeeded SHI’s status, rights and duties of SHI under the Asset Acquisition
Agreement) must pay the amount equal to 20% of the sale and purchase price as a penalty. However, under the Asset
Acquisition Agreements, SHI (or New SHR if New SHR has succeeded to the status, rights and duties of SHI underthe Asset Acquisition Agreements) having completed the fundraising required to pay the sale and purchase price, etc.
has been made a condition for closing the sale and purchase. Furthermore, the Investment Corporation Merger
coming into effect is not a condition precedent under the Asset Acquisition Agreements. Accordingly, the Asset
Acquisition is scheduled to take place on the same date even if the Investment Corporation Merger is not
implemented due to the failure to obtain an approval of the Investment Corporation Merger Agreement at the general
meeting of unitholders of either SHI or SHR or due to other grounds. In that case, SHI will examine and discusschanging, by agreement with Sekisui House, all or part of the assets it will acquire through the Asset Acquisition or
the conditions for the sale and purchase under the Asset Acquisition Agreements (including, but not limited to,changing the acquisition price and the timing of the acquisition), or taking other appropriate measures,(Note) while
taking into consideration the impact of the Asset Replacement on the financial condition of SHI. Furthermore, inlight of the cash deposits held by SHI and SHI’s cash flow, etc. as of today, SHI believes that there is a low
possibility that it will be unable to raise the sale and purchase price under the Asset Acquisition Agreements, and it
believes that there is a low possibility of a material impact on its finances in relation to the Asset Acquisition
Agreements.

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

25

Note: The Asset Acquisition Agreements stipulate provisions to the effect that SHI and Sekisui House will consult in good faith
if the Investment Corporation Merger is not implemented.

s(2) Asset Sale Agreements
The Asset Sale Agreements constitute forward commitments, etc. by an investment corporation stipulated in the“Comprehensive Guidelines for Supervision of Financial Instruments Business Operators, etc.” set forth by the
Financial Services Agency.
Under the Asset Sale Agreements, if the Asset Sale Agreements have been canceled due to a breach of a material
duty by SHI (or New SHR if New SHR has succeeded SHI’s status, rights and duties of SHI under the Asset
Acquisition Agreement) or on other grounds, SHI (or New SHR if New SHR has succeeded SHI’s status, rights andduties of SHI under the Asset Acquisition Agreement) must pay the amount equal to 20% of the sale and purchaseprice as a penalty. Furthermore, the Investment Corporation Merger coming into effect is not a condition precedent
under the Asset Sale Agreements. Accordingly, the Asset Sale is scheduled to take place on the same date even if theInvestment Corporation Merger is not implemented due to the failure to obtain an approval of the Investment
Corporation Merger Agreement at the general meeting of unitholders of either SHI or SHR or due to other grounds.
Therefore, there is believed to be a low possibility of the Asset Sale Agreements having a material impact on thefinances of SHI.
13. Future Outlook
As set forth above, the settlement and delivery for the Asset Replacement is scheduled for May 1, 2018, which is theeffective date of the Investment Corporation Merger. For New SHR’s earnings forecasts that use the Asset Replacement
as part of their preconditions, please see the “Notice Concerning the Forecast of Operating Results and Distributions
Subsequent to the Merger of Sekisui House Reit, Inc. and Sekisui House Residential Investment Corporation for the
Fiscal Periods Ending October 31, 2018 and April 30, 2019” announced by the Two Investment Corporations today.
In addition, following the execution of the Investment Corporation Merger Agreement, SHI intends to submit a
proposal to its general meeting of unitholders, which is scheduled to be held on March 27, 2018, regarding theamendment of its Articles of Incorporation to change the ends of its fiscal period from the current last days of Marchand September to the last days of April and October. Provided that such amendment of the Articles of Incorporation isapproved by the general meeting of unitholders, SHI’s final fiscal period if the Investment Corporation Merger comes
into effect is scheduled to be the seven months from October 1, 2017 to April 30, 2018 (the “fiscal period ending April
30, 2018”). For details regarding earnings forecasts for the fiscal period ending April 30, 2018, which will be SHI’s
final fiscal period following the execution of the Investment Corporation Merger Agreement and in the event the
proposal to revise the articles of incorporation as described above is adopted and approved by the general meeting ofunitholders and the Investment Corporation Merger comes into effect, and forecasted merger consideration in the formof cash distributions to be paid as the proceeds of cash distributions for the final fiscal period, please see the “NoticeConcerning Forecast of Operating Results for the Fiscal Period Ending April 30, 2018 (Final Fiscal Period) and Merger
Consideration” announced by SHI today.

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

26

14. Summary of Appraisal Statements Regarding Assets to be Acquired
Property nameAppraisal price
Name of appraisal agency
Time of valuation
Items

Value based on income approach

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

Capitalization rate

Value based on DCF method
Discount rate

Final capitalization rate

Prime Maison Shirokanedai Tower
8,340,000,000 yen
Tanizawa Sogo Appraisal Co., Ltd.
December 1, 2017
(Unit: thousand yen)
Summary, etc.
It was determined that the value based on the income approach calculatedusing the DCF method, which calculates the value by defining fluctuations on
8,340,000 future net operating income, is more persuasive and convincing, so trial
calculations were performed using the direct capitalization method, based on
the income amount according to the DCF method.

Details

8,470,000
446,516
441,752

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

27,240Key money, renewal fee, vending machine income, and bicycle registration
fees recorded.
Assessed using vacancy rates and parking lots vacancy rates equalized over
-36,991
the medium- to long-term.
94,794
14,515

21,293 Assessed based on service agreements, etc.
2,194 Assessed based on expenditure records, etc.
7,467 Assessed based on engineering reports and similar cases.
12,960 Assessed based on service agreements (not including CM and LM fees).
Assessed based on a turnover rate deemed to be a stable standard, based on the
25,796competitiveness of the subject real property and similar properties, etc.
19,466 Assessed based on FY2017 tax materials.
703 Assessed using a standard rate (not enrolled in earthquake insurance).
4,911 Assessed based on expenditure records, etc.
351,722337 Assessed using an investment yield of 1.0%. Investment income recorded.
-4,692 Assessed based on engineering reports and similar cases.
347,367
The rate was compared to multiple transactions in neighboring areas andsimilar areas within the same supply and demand area, etc., we took into
4.1% account a comprehensive overview of the marketability of the subject real
property and trends in the real property market, etc., and took note of therelationship to the discount rate when performing our assessment.
8,290,000
We set a base yield for condominiums using the build up method, etc. basedon the yield for financial products, and carried out our assessment by
4.2%
incorporating the specified risks for the subject real property into that baseyield.
We carried out our assessment by incorporating future unpredictability, based
4.3%
on the capitalization rate.

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

27

Cost method value

9,180,000

Land ratio
Building ratio

72.0%
28.0%

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

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

*Comparison with the current rent unit price
Average rent unit price for theappraisal price
Average unit rent unit price forlease agreements

Prime Maison Shirokanedai Tower
5,435 yen/m2(17,970 yen/tsubo)
5, 501 yen/m2(18,187 yen/tsubo)

Property nameAppraisal price
Name of appraisal agency
Time of valuation

Prime Maison Otsuka
3,860,000,000 yen
Tanizawa Sogo Appraisal Co., Ltd.
December 1, 2017

Items

Value based on income approach

Value based on direct
capitalization method
Operating Revenue
Lease revenue(including common area
fee income)
Parking lot revenue
Other revenue
Vacant premises, etc.
loss, etc.
Operating Expenses
Maintenance andmanagement expenses
Water and utility fees
Repair expenses
Property manager fee
Tenant solicitation
expenses, etc.
Taxes and other publicchargesNon-life insurance
premiums
Other expenses(Unit: thousand yen)
Summary, etc.
It was determined that the value based on the income approach calculatedusing the DCF method, which calculates the value by defining fluctuations on
3,860,000 future net operating income, is more persuasive and convincing, so trial
calculations were performed using the direct capitalization method, based on
the income amount according to the DCF method.

Details

3,930,000
224,730
220,415

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

13,272
Renewal fees, trunk room income, and bicycle parking lot registration fees
recorded.
Assessed using vacancy rates and parking lots vacancy rates equalized over
-14,325
the medium- to long-term.
53,054
5,368

10,822 Assessed based on service agreements, etc.
2,352 Assessed based on expenditure records, etc.
4,270 Assessed based on engineering reports and similar cases.
6,609 Assessed based on service agreements (not including CM and LM fees).
Assessed based on a turnover rate deemed to be a stable standard, based on the
12,370competitiveness of the subject real property and similar properties, etc.
12,836 Assessed based on FY2017 tax materials, etc.
420 Assessed at standard rates.
3,370 Assessed based on expenditure records, etc.

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

28

Net Operating Income(NOI)
Revenue frominvestment of lump sum
payments
Capital expenditure
Net Income (NCF)

Capitalization rate

Value based on DCF method
Discount rate

Final capitalization rate
Cost method value
Land ratio
Building ratio

Other Matters Taken Into
Consideration by the Appraisal
Agency When Performing theAppraisal

171,676
218 Assessed using an investment yield of 1.0%. Investment income recorded.
-2,800 Assessed based on engineering reports and similar cases.
169,095
The rate was compared to multiple transactions in neighboring areas andsimilar areas within the same supply and demand area, etc., we took into
4.3% account a comprehensive overview of the marketability of the subject real
property and trends in the real property market, etc., and took note of therelationship to the discount rate when performing our assessment.
3,830,000
We set a base yield for condominiums using the build up method, etc. basedon the yield for financial products, and carried out our assessment by
4.4%
incorporating the specified risks for the subject real property into that baseyield.
We carried out our assessment by incorporating future unpredictability, based
4.5%
on the capitalization rate.
Calculated by making depreciation corrections to the cost of replacement of
3,940,000
the subject real property.
63.2%
36.8%
Based on a value forming process and request purpose in which a market participant (purchaser)
values profitability in the subject real property, as well as the typology as “a lease property andits site,” we used as our standard an income amount that appropriately reflected future
profitability for an investor to examine the cost method value and set the appraised value at thevalue based on the income approach.

*Comparison with the current rent unit pricePrime Maison Otsuka
4,659 yen/m2(15,400 yen/tsubo)
4,703 yen/m2(15,549 yen/tsubo)

Average rent unit price for theappraisal price
Average unit rent unit price forlease agreements

Property nameAppraisal price
Name of appraisal agency
Time of valuation

Prime Maison Asakusabashi
1,760,000,000 yen
Tanizawa Sogo Appraisal Co., Ltd.
December 1, 2017
(Unit: thousand yen)

Items

Value based on income approach

Value based on direct
capitalization method
Operating Revenue
Lease revenue(including common area
fee income)
Parking lot revenue

Details

Summary, etc.
It was determined that income approach value calculated using the DCF
method, which calculates the value by defining fluctuations on future net
1,760,000 operating income, is more persuasive and convincing, so trial calculations
were performed using the direct capitalization method, based on the income
amount according to the DCF method.
1,790,000
103,906
105,540

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

1,200

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

29Key money, renewal fees, etc., and bicycle parking lot initial registration fees
recorded.
Assessed using vacancy rates and parking lots vacancy rates equalized over
-5,337the medium- to long-term.
25,833

Other revenue
Vacant premises, etc.
loss, etc.
Operating Expenses
Maintenance andmanagement expenses
Water and utility fees
Repair expenses
Property manager fee
Tenant solicitation
expenses, etc.
Taxes and other publicchargesNon-life insurance
premiums
Other expenses
Net Operating Income(NOI)
Revenue frominvestment of lump sum
payments
Capital expenditure
Net Income (NCF)

Capitalization rate

Value based on DCF method
Discount rate

Final Capitalization rate
Cost method value
Land ratio
Building ratio

Other Matters Taken Into
Consideration by the Appraisal
Agency When Performing theAppraisal

2,503

6,562 Assessed based on service agreements, etc.
1,097 Assessed based on expenditure records, etc.
2,197 Assessed based on engineering reports and similar cases.
3,042 Assessed based on service agreements (not including CM and LM fees).
Assessed based on a turnover rate deemed to be a stable standard, based on the
6,076
competitiveness of the subject real property and similar properties, etc.
5,307 Assessed based on FY2017 tax materials.
198 Assessed at standard rates.
1,350 Assessed based on expenditure records, etc.
78,07377 Assessed using an investment yield of 1.0%. Investment income recorded.
-1,320 Assessed based on engineering reports and similar cases.
76,831
The rate was compared to multiple transactions in neighboring areas andsimilar areas within the same supply and demand area, etc., we took into
4.3% account a comprehensive overview of the marketability of the subject real
property and trends in the real property market, etc., and took note of therelationship to the discount rate when performing our assessment.
1,750,000
We set a base yield for condominiums using the build up method, etc. basedon the yield for financial products, and carried out our assessment by
4.4%
incorporating the specified risks for the subject real property into that baseyield.
We carried out our assessment by incorporating future unpredictability, based
4.5%
on the capitalization rate.
Calculated by making depreciation corrections to the cost of replacement of
1,920,000
the subject real property.
68.7%
31.3%
Based on a value forming process and request purpose in which a market participant (purchaser)
values profitability in the subject real property, as well as the typology as “a lease property andits site,” we used as our standard an income amount that appropriately reflected future
profitability for an investor to examine the cost method value and set the appraised value at thevalue based on the income approach.

*Comparison with the current rent unit pricePrime Maison Asakusabashi
4,326 yen/m2(14,300 yen/tsubo)
4,335 yen/m2(14,330 yen/tsubo)

Average rent unit price for theappraisal price
Average unit rent unit price forlease agreements

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

30

Property nameAppraisal price
Name of appraisal agency
Time of valuation
Items

Value based on income approach

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

Capitalization rate

Value based on DCF method
Discount rate

Final capitalization rate

Prime Maison Daikanyama
2,650,000,000 yen
Tanizawa Sogo Appraisal Co., Ltd.
December 1, 2017
(Unit: thousand yen)
Summary, etc.
It was determined that the value based on the income approach calculatedusing the DCF method, which calculates the value by defining fluctuations on
2,650,000 future net operating income, is more persuasive and convincing, so trial
calculations were performed using the direct capitalization method, based on
the income amount according to the DCF method.

Details

2,720,000
145,454
140,800

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

8,640
6,558 Key money, renewal fees, and bicycle parking lot registration fees recorded.
Assessed using vacancy rates and parking lots vacancy rates equalized over
-10,544
the medium- to long-term.
32,4595,337 Assessed based on service agreements, etc.
1,494 Assessed based on expenditure records, etc.
1,961 Assessed based on engineering reports and similar cases.
4,166 Assessed based on service agreements (not including CM and LM fees).
Assessed based on a turnover rate deemed to be a stable standard, based on the
8,476
competitiveness of the subject real property and similar properties, etc.
8,320 Assessed based on FY2017 tax materials, etc.
228 Assessed at standard rates.
2,472 Assessed based on expenditure records, etc.
112,995
227 Assessed using an investment yield of 1.0%. Investment income recorded.
-1,520 Assessed based on engineering reports and similar cases.
111,702
The rate was compared to multiple transactions in neighboring areas andsimilar areas within the same supply and demand area, etc., we took into
4.1% account a comprehensive overview of the marketability of the subject real
property and trends in the real property market, etc., and took note of therelationship to the discount rate when performing our assessment.
2,620,000
We set a base yield for condominiums using the build up method, etc. basedon the yield for financial products, and carried out our assessment by
4.2%
incorporating the specified risks for the subject real property into that baseyield.
We carried out our assessment by incorporating future unpredictability, based
4.3%
on the capitalization rate.

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

31

Cost method value

2,700,000

Land ratio
Building ratio

75.4%
24.6%

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

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

*Comparison with the current rent unit pricePrime Maison Daikanyama
6,595 yen/m2(21,800 yen/tsubo)
6,855 yen/m2(22,661 yen/tsubo)

Average rent unit price for theappraisal price
Average unit rent unit price forlease agreements

Property nameAppraisal price
Name of appraisal agency
Time of valuation
Items

Value based on income approach

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

Prime Maison Gotenyama West3,560,000,000 yen
Tanizawa Sogo Appraisal Co., Ltd.
December 1, 2017
(Unit: thousand yen)
Summary, etc.
It was determined that the value based on the income approach calculatedusing the DCF method, which calculates the value by defining fluctuations on
3,560,000 future net operating income, is more persuasive and convincing, so trial
calculations were performed using the direct capitalization method, based on
the income amount according to the DCF method.

Details

3,620,000
215,306
218,981

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

12,2403,649 Renewal fee income recorded.
Assessed using vacancy rates and parking lots vacancy rates equalized over
-19,565
the medium- to long-term.
62,98317,091 Assessed based on service agreements, etc.
3,426 Recorded based on expenditure records, etc.
5,091 Assessed based on engineering reports and similar cases.
6,349 Assessed based on service agreements (not including CM and LM fees).
Assessed based on a turnover rate deemed to be a stable standard, based on the
12,773competitiveness of the subject real property and similar properties, etc.
16,358 Assessed based on FY2017 tax materials.
599 Assessed at standard rates.
1,291 Assessed based on expenditure records, etc.

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

32

Net Operating Income(NOI)
Revenue frominvestment of lump sum
payments
Capital expenditure
Net Income (NCF)

Capitalization rate

Value based on DCF method
Discount rate

Final capitalization rate
Cost method value
Land Ratio
Building Ratio

Other Matters Taken Into
Consideration by the Appraisal
Agency When Performing theAppraisal

152,322520 Assessed using an investment yield of 1.0%. Investment income recorded.
-4,625 Assessed based on engineering reports and similar cases.
148,217
The rate was compared to multiple transactions in neighboring areas andsimilar areas within the same supply and demand area, etc., we took into
4.1% account a comprehensive overview of the marketability of the subject real
property and trends in the real property market, etc., and took note of therelationship to the discount rate when performing our assessment.
3,540,000
We set a base yield for condominiums using the build up method, etc. basedon the yield for financial products, and carried out our assessment by
4.2%
incorporating the specified risks for the subject real property into that baseyield.
We carried out our assessment by incorporating future unpredictability, based
4.3%
on the capitalization rate.
Calculated by making depreciation corrections to the cost of replacement of
3,860,000
the subject real property.
74.1%
25.9%
Based on a value forming process and request purpose in which a market participant (purchaser)
values profitability in the subject real property, as well as the typology as “a lease property andits site,” we used as our standard an income amount that appropriately reflected future
profitability for an investor to examine the cost method value and set the appraised value at thevalue based on the income approach.

*Comparison with the current rent unit price
Average rent unit price for theappraisal price
Average unit rent unit price forlease agreements

Prime Maison Gotenyama West5,112 yen/m2(16,900 yen/tsubo)
5,353 yen/m2(17,697 yen/tsubo)

Property nameAppraisal price
Name of appraisal agency
Time of valuation

Esty Maison Toyosu Residence
6,440,000,000 yen
Tanizawa Sogo Appraisal Co., Ltd.
December 1, 2017

Items

Value based on income approach

Price using the direct
capitalization method (revised
Inwood method)
Operating Revenue
Lease revenue(including common area
fee income)(Unit: thousand yen)
Summary, etc.
It was determined that the value based on the income approach calculatedusing the DCF method, which calculates the value by defining fluctuations on
6,440,000 future net operating income, is more persuasive and convincing, so trial
calculations were performed using the direct capitalization method (revised
Inwood method), based on the income amount according to the DCF method.

Details

6,640,000
898,593903,095 Assessed as standard and stable lease income.

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

33

Water and utility fee
revenue
Parking lot revenue
Other revenue
Vacant premises, etc.
loss, etc.
Operating Expenses
Maintenance andmanagement expenses
Water and utility fees
Repair expenses
Property manager fee
Tenant solicitation
expenses, etc.
Taxes and other publicchargesNon-life insurance
premiums
Other expenses
Net Operating Income(NOI)
Revenue frominvestment of lump sum
payments
Capital expenditure
Net Income (NCF)
Discount rate
Value based on DCF method
Discount rate (during theperiod held)
Discount rate (whenassessing the sale price)
Cost method value
Land ratio
Building ratio

Other Matters Taken Into
Consideration by the Appraisal
Agency When Performing theAppraisal

1,633 Assessed based on expenditure records, etc.
47,568 Assessed as standard and stable parking lot income.
12,892 Renewal fees and vending machine income, etc. recorded.
Assessed using vacancy rates and parking lots vacancy rates equalized over
-66,595
the medium- to long-term.
557,469
43,499 Assessed based on service agreements, etc.
7,344 Assessed based on expenditure records, etc.
22,318 Assessed based on engineering reports and similar cases.
26,524 Assessed based on service agreements (not including CM and LM fees).
Assessed based on a turnover rate deemed to be a stable standard, based on the
31,956competitiveness of the subject real property and similar properties, etc.
41,612 Assessed based on FY2017 tax materials.
1,980 Assessed based on similar cases.
382,234 Land rent, etc. assessed based on expenditure records, etc.
341,123-4,462

Assessed using an investment yield of 1.0%. Investment income recorded.
(Investment loss recorded for deposit guarantee money relating to land lease)-26,400 Assessed based on engineering reports and similar cases.
310,260
We set a base yield for condominiums using the build up method, etc. basedon the yield for financial products, and carried out our assessment by
4.5%
incorporating the specified risks for the subject real property into that baseyield and also examining case studies of transactions, etc.
6,360,000
We set a base yield for condominiums using the build up method, etc. basedon the yield for financial products, and carried out our assessment by
4.5%
incorporating the specified risks for the subject real property into that baseyield and also examining case studies of transactions, etc.
We carried out our assessment by incorporating future unpredictability, based
4.7%
on the discount rate during the period it was held.
Calculated by making depreciation corrections to the cost of replacement of
6,510,000
the subject real property.
37.8%
62.2%
Based on a value forming process and request purpose in which a market participant (purchaser)
values profitability in the subject real property, as well as the typology as “a building with afixed-term land lease (lease premises),” we used as our standard an income amount thatappropriately reflected future profitability for an investor to examine the cost method value andset the appraised value at thevalue based on the income approach.

*Comparison with the current rent unit price
Esty Maison Toyosu Residence
3,206 yen/m2(10,600 yen/tsubo)
3,219 yen/m2(10,644 yen/tsubo)

Average rent unit price for theappraisal price
Average unit rent unit price forlease agreements

Note 1: With respect to amounts of money, amounts under 1,000 yen were rounded down, so in some cases the total amount may not match the figures
for operating income, operating expenses, or other items.
Note 2: “Average rent unit price for the appraisal price” is based on the stated “monthly lease revenue unit price (including common area fee income)Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

34

calculated based on the “lease income (including common area fees income)” for the residential areas in the direct capitalization method in theabove appraisal.
Note 3: “Average unit rent unit price for lease agreements” was calculated based on the total monthly rent income for effective lease agreements for the
residential areas as of December 31, 2017.

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

35

15. Summary of Appraisal Statements Regarding Assets to be Sold
Property nameAppraisal price
Name of appraisal agency
Time of valuation
Items

Value based on income approach

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

Capitalization rate

Value based on DCF method

Esty Maison Machida
1,530,000,000 yen
Tanizawa Sogo Appraisal Co., Ltd.
December 1, 2017
Details

1,530,000(Unit: thousand yen)
Summary, etc.
It was determined that the value based on the income approach calculatedusing the DCF method, which calculates the value by defining fluctuations
on future net operating income, is more persuasive and convincing, so trial
calculations were performed using the direct capitalization method, based on
the income amount according to the DCF method.

1,540,000
105,857
105,108

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

3,240
3,088

Renewal fees, vending machine income, and antenna facility fees, etc. wererecorded.

-5,579Assessed using vacancy rates and parking lots vacancy rates equalized overthe medium- to long-term.

28,108
4,673

Assessed based on service agreements, etc.

1,780
4,065
3,108

Assessed based on expenditure records.
Assessed based on engineering reports and similar cases.
Assessed based on service agreements (not including CM and LM fees).
Assessed based on a turnover rate deemed to be a stable standard, based on
the competitiveness of the subject real property and similar properties, etc.

3,066
8,104
134
3,175

Assessed based on FY2017 tax materials.
Actual amount based on the list of non-life insurance premiums. Not enrolledin earthquake insurance.
Assessed based on expenditure records.

77,74978-3,93673,891

4.8%

Assessed using an investment yield of 1.0%. Investment income recorded.
Assessed based on engineering reports and similar cases.
The rate was compared to multiple transactions in neighboring areas andsimilar areas within the same supply and demand area, etc., we took into
account a comprehensive overview of the marketability of the subject real
property and trends in the real property market, etc., and took note of therelationship to the discount rate when performing our assessment.

1,530,000

Discount rate

4.7%

Final capitalization rate

5.0%

We set a base yield for condominiums using the build up method, etc. basedon the yield for financial products, and carried out our assessment byincorporating the specified risks for the subject real property into that baseyield.
We carried out our assessment by incorporating future unpredictability,
based on the capitalization rate.

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

36

Cost method value

1,580,000

Land ratio
Building ratio

33.8%
66.2%

Other Matters Taken Into
Consideration by the Appraisal
Agency When Performing theAppraisal

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

Property Name
Appraisal price
Name of appraisal agency
Time of valuation
Items
Value based on income approach
Value based on direct
capitalization method
Operating Revenue
Lease revenue(including common area
fee income)
Parking lot revenue
Other revenue
Vacant premises, etc.
loss, etc.
Operating Expenses
Maintenance andmanagement expenses
Water and utility fees

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

Esty Maison Shinkawasaki
1,230,000,000 yen
Morii Appraisal & Investment Consulting, Inc.
December 1, 2017
Details
1,230,000(Unit: thousand yen)
Summary, etc.
Calculated in correlation to the value based on the income approach amountusing the DCF method and income amount using the direct capitalization
method.

1,250,000
94,95689,542
9,720

Assessed based on rent levels recognized to be stable over the medium- tolong-term, while also referring to the current rent and rent levels for similar
real property.

3,635

Key money, utility pole site use fee, and internet electricity usage fee
income, etc. was recorded.

-7,941

Assessed taking into account standard vacancy rates and the individual
characteristics of the subject real property

25,771
8,140

Assessed based on levels, etc. for similar real property.

2,713

Repair expenses

2,442

Property manager fee
Tenant solicitation
expenses, etc.
Taxes and other publicchargesNon-life insurance
premiums

1,826

Assessed based on levels, etc. for similar real property.
Estimate in the engineering report recorded as 30% of the standardized
amount.
Assessed based on levels, etc. for similar real property.

1,492

Assessed based on levels, etc. for similar real property.

5,471

Assessed based on the FY2017 results, taking into consideration thevariability rate/depreciation with age.

Other expenses

3,558

Net Operating Income(NOI)
Revenue frominvestment of lumpsum payments
Capital expenditure
Net Income (NCF)

129

Recorded based on the past records for the subject real property.
Costs for restoration to original condition, renewal fees, and CATV
equipment usage fees recorded based on records, etc. for the subject real
property.

69,185
137

Assessed by adding 1.0% interest to the amount calculated by deducting anamount equivalent to the amount for vacant premises from the amount of thedeposits, etc. when all premises are occupied.

-5,699Estimate in the engineering report recorded as 70% of the standardized
amount.

63,623Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

37

Capitalization rate
Value based on DCF method

5.1%
1,200,000

Discount rate

3.9%

Final capitalization rate

5.3%

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

Value based on income approach

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

Assessed taking into account the unique characteristics of the subject real
property such as the location, the building, and rights relationships, while
also referring to the investment yield for similar real property transactions,etc.
Assessed by applying the unpredictability of net income at a given time in
the future, future building deterioration, and sale risks to the capitalization
rate.

987,000
72.5%
27.5%

We determined that the income amount is the amount that is most convincing and reflects theactual market conditions, so determined the appraisal price using the value based on the income
approach.

Property nameAppraisal price
Name of appraisal agency
Time of valuation
Items

Assessed taking into account the unique characteristics of the subject real
property such as the location, the building, and rights relationships, while
also referring to the investment yield for similar real property transactions,etc.

Esty Maison Megurohoncho
1,130,000,000 yen
Daiwa Real Estate Appraisal Co., Ltd.
September 30, 2017
Details

1,130,000(Unit: thousand yen)
Summary, etc.
It was determined that the value based on the income approach calculatedusing the DCF method, which calculates the value by defining fluctuations
on future net operating income, is more persuasive, so we examined theincome amount using the direct capitalization method and performed trial
calculations of the income amount using the direct capitalization method.

1,150,000
63,48965,513
1,251-3,275

We assessed the expected standardized income recognized to be stable overthe medium- to long-term, and recorded it.
Assessed using historical amounts for past fiscal years, and recorded.
We assessed the vacancy rate recognized to be stable over the medium- tolong-term, and recorded it.

14,2682,940
781

Repair expenses

1,912

Property manager fee

1,867

Tenant solicitation
expenses, etc.

2,450

Assessed using the current agreement amounts and maintenance andmanagement expenses for similar real property, and recorded it.
Assessed using the historical amounts for past fiscal years and maintenanceand management expenses for similar real property, and recorded it.
After examining the levels of repair costs for similar real property wedetermined that the average annual repair cost in the engineering report wasappropriate, and recorded it.
Based on the current agreement, we examined it using the levels of property
manager fees for similar real property, and recorded it.
Tenant solicitation expenses, etc. were assessed based on the levels for
similar real property, with reference to the turnover is the expected turnoverrate were applied and the actual historical amounts for past fiscal year, and it
was recorded.

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

38

Taxes and other publicchargesNon-life insurance
premiums
Other expenses
Net Operating Income
(NOI)

3,646
72
597
49,221

Revenue frominvestment of lumpsum payments

73

Capital expenditure-1,183Net Income (NCF)

Capitalization rate

Value based on DCF method

4.2%

We adjusted the spread using building conditions such as the location, age,and equipment standards of the subject real property and other conditions
such as the current rent compared to market standards, rights relationships,
and agreement terms, and performed the assessment in reference to thecapitalization rate for appraisal prices for other J-REIT properties in the same
demand area, etc.

1,120,000
4.0%

Final capitalization rate

4.4%

Other Matters Taken Into
Consideration by the Appraisal
Agency When Performing theAppraisal

We assessed the status of investment, etc. of lump sum payments taking into
comprehensive account perspectives of investment and procurement, andrecorded the amount calculated by multiplying such amount by the expectedamount of security deposits, etc., and recorded it.
After examining the levels of renewal costs for similar real property wedetermined that the average annual repair cost in the engineering report wasappropriate, and recorded the assessed capital expenditure amount after
taking into account the CM fee.

48,112

Discount rate

Cost method value
Land ratio
Building ratio

Based on the amount in records provided by the client, we performed ourassessment and recorded it after taking into account taxation, etc. levels andland price trends.
Assessed using estimated amounts years and non-life insurance premiums for
similar real property, and recorded it.
Assessed using historical amounts for past fiscal years, and recorded.

We performed the assessment using both comparisons appraisal cases for
similar real property and by incorporating the characteristics of the real
property into the financial asset yield in combination, and referred tointerviews, etc. with investors.
We referred to the transaction yield in similar transaction case studies, andperformed out assessment taking into comprehensive account future
investment yield trends, the risks of the subject real property as aninvestment target, general projections for future economic growth rates, andreal property price trends, etc. Using the subject real property’s capitalization
rate as our basis, we performed our assessment taking into comprehensive
account of the possibility of escalations in capital expenditure due todeterioration with age, the unpredictability of sales market trends, andunpredictable elements such as the effects of the passage of time on liquidity.

988,000
69.7%
30.3%

We determined that an income amount properly reflecting actual supply and demand trends inthe market and the motives of market participants is more persuasive, so we determined theappraisal price in reference to an estimate using the value based on the income approach.

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

39

Property nameAppraisal price
Name of appraisal agency
Time of valuation

Esty Maison Joto
951,000,000 yen
Japan Real Estate InstituteDecember 1, 2017
(Unit: thousand yen)

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

Details

Summary, etc.

951,000
962,000
66,195

Vacant premises, etc. loss, etc. deducted from potential gross revenues.

63,372

Recorded based on appropriate rent levels recognized to be stable over the
medium- to long-term.

3,922
3,133
-4,232

2,477
1,850
2,246

Property manager fee
Tenant solicitation
expenses, etc.
Taxes and other publicchargesNon-life insurance
premiums
Other expenses
Net Operating Income(NOI)
Revenue frominvestment of lumpsum payments

1,894

Net Income (NCF)

Capitalization rate

Value based on DCF method

Recorded taking into consideration historical amounts for past fiscal years.
Recorded on the assumption of occupancy rates stable over the medium- tolong-term.

15,510

Repair expenses

Capital expenditure

Both direct capitalization and DCF methodologies used in combination.

3,156
3,427
72
388

Recorded taking into consideration current maintenance and management
expenses, etc.
Recorded taking into consideration historical amounts for past fiscal years.
Recorded taking into consideration costs for restoration to original condition
and annual average amounts for repair and renewal expenses, etc. in theengineering report.
Recorded taking into consideration current agreement terms, etc.
Recorded with reference to agreement terms and lease terms for similar real
property.
Recorded based on taxes and other public charge related materials.
Recorded taking into consideration insurance premiums, etc. based on
current insurance policies.
Recorded taking into consideration historical amounts for past fiscal years.

50,68536-2,615

Recorded as investment income using an investment yield of 1.0%.
Recorded taking into consideration annual average amounts for repair andrenewal expenses, etc. in the engineering report.

48,106

5.0%

Assessed after taking into account against the yield that is the basis for eacharea the location of the subject real property, the circumstances of thebuilding, and other adjustment of the spread due to other conditions, as well
as future unpredictability and the transaction yield for similar real property,
etc.

940,000

Discount rate

4.8%

Final capitalization rate

5.2%

We referred to the investment yield for similar real property, and performedout assessment taking comprehensive account of matters such as the uniquecharacteristics of the subject real property.
We referred to the transaction yield, etc. for similar real property, andperformed out assessment taking into comprehensive account future
investment yield trends, the risks of the subject real property as aninvestment target, general projections for future economic growth rates, andreal property price and rent trends, etc.

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

40

Cost method value

698,000

Land ratio
Building ratio

36.5%
63.5%

Other Matters Taken Into
Consideration by the Appraisal
Agency When Performing theAppraisal

No applicable matters.

Property nameAppraisal price
Name of appraisal agency
Time of valuation
Items

Value based on income approach

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

Esty Maison Tenjinhigashi I
364,000,000 yen
Daiwa Real Estate Appraisal Co., Ltd.
September 30, 2017
Details

364,000(Unit: thousand yen)
Summary, etc.
It was determined that the value based on the income approach calculatedusing the DCF method, which calculates the value by defining fluctuations
on future net operating income, is more persuasive, so we examined theincome amount using the direct capitalization method and performed trial
calculations of the income amount using the direct capitalization method.

365,000
30,05729,784

We assessed the expected standardized income recognized to be stable overthe medium- to long-term, and recorded it.

900
205

Assessed using historical amounts for past fiscal years, and recorded.

738

Assessed using historical amounts for past fiscal years, and recorded.
We assessed the vacancy rate recognized to be stable over the medium- tolong-term, and recorded it.

-1,571
9,013
1,333
960
2,238

Property manager fee

883

Tenant solicitation
expenses, etc.

1,349

Taxes and other publiccharges

2,068

Non-life insurance
premiums
Other expenses

We performed our assessment by incorporating into the assessed land pricebased on the actual transaction price the building price revised downwards
from the replacement price, taking into account the unique characteristics ofthe subject building, and took into consideration the marketability of thebuilding and the site in combination (including incidental costs).

58
120

Assessed using the current agreement amounts and maintenance andmanagement expenses for similar real property, and recorded it.
Assessed using the historical amounts for past fiscal years and maintenanceand management expenses for similar real property, and recorded it.
After examining the levels of repair costs for similar real property wedetermined that the average annual repair cost in the engineering report wasappropriate, and recorded it.
Based on the current agreement, we examined it using the levels of property
manager fees for similar real property, and recorded it.
Tenant solicitation expenses, etc. were assessed based on the levels for
similar real property, with reference to the turnover is the expected turnoverrate were applied and the actual historical amounts for past fiscal year, and it
was recorded.
Based on the amount in records provided by the client, we performed ourassessment and recorded it after taking into account taxation, etc. levels andland price trends.
Assessed using estimated amounts years and non-life insurance premiums for
similar real property, and recorded it.
Assessed using historical amounts for past fiscal years, and recorded.

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

41

Net Operating Income(NOI)
Revenue frominvestment of lumpsum payments
Capital expenditure
Net Income (NCF)

Capitalization rate

Value based on DCF method

21,043--2,433
18,610

5.1%

4.9%

Final capitalization rate

5.3%

Other Matters Taken Into
Consideration by the Appraisal
Agency When Performing theAppraisal

We adjusted the spread using building conditions such as the location, age,and equipment standards of the subject real property and other conditions
such as the current rent compared to market standards, rights relationships,
and agreement terms, and performed the assessment in reference to thecapitalization rate for appraisal prices for other J-REIT properties in the same
demand area, etc.

364,000

Discount rate

Cost method value
Land ratio
Building ratio

After examining the levels of renewal costs for similar real property wedetermined that the average annual repair cost in the engineering report wasappropriate, and recorded the assessed capital expenditure amount after
taking into account the CM fee.

We performed the assessment using both comparisons appraisal cases for
similar real property and by incorporating the characteristics of the real
property into the financial asset yield in combination, and referred tointerviews, etc. with investors.
We referred to the transaction yield in similar transaction case studies, andperformed out assessment taking into comprehensive account future
investment yield trends, the risks of the subject real property as aninvestment target, general projections for future economic growth rates, andreal property price trends, etc. Using the subject real property’s capitalization
rate as our basis, we performed our assessment taking into comprehensive
account of the possibility of escalations in capital expenditure due todeterioration with age, the unpredictability of sales market trends, andunpredictable elements such as the effects of the passage of time on liquidity.

269,000
29.0%
71.0%

We determined that an income amount properly reflecting actual supply and demand trends inthe market and the motives of market participants is more persuasive, so we determined theappraisal price in reference to an estimate using the value based on the income approach.

Property nameAppraisal price
Name of appraisal agency
Time of valuation

Esty Maison Tenjinhigashi II
738,000,000 yen
Daiwa Real Estate Appraisal Co., Ltd.
September 30, 2017
(Unit: thousand yen)

Items
Value based on income approach
Value based on direct
capitalization method
Operating Revenue
Lease revenue(including common area
fee income)
Parking lot revenue
Other revenue
Vacant premises, etc.
loss, etc.

Details
738,000

Summary, etc.

743,000
55,71053,6362,400
2,571-2,897

We assessed the expected standardized income recognized to be stable overthe medium- to long-term, and recorded it.
Assessed using historical amounts for past fiscal years, and recorded.
We assessed the vacancy rate recognized to be stable over the medium- tolong-term, and recorded it.

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

42

Operating Expenses
Maintenance andmanagement expenses

15,005

Water and utility fees

1,058

Repair expenses

3,934

Property manager fee

1,642

Tenant solicitation
expenses, etc.

2,494

Taxes and other publiccharges

3,770

Non-life insurance
premiums
Other expenses
Net Operating Income(NOI)
Revenue frominvestment of lumpsum payments
Capital expenditure
Net Income (NCF)

Capitalization rate

Value based on DCF method

1,620

92
393

-

-2,829After examining the levels of renewal costs for similar real property wedetermined that the average annual repair cost in the engineering report wasappropriate, and recorded the assessed capital expenditure amount after
taking into account the CM fee.

37,875

5.1%

We adjusted the spread using building conditions such as the location, age,and equipment standards of the subject real property and other conditions
such as the current rent compared to market standards, rights relationships,
and agreement terms, and performed the assessment in reference to thecapitalization rate for appraisal prices for other J-REIT properties in the same
demand area, etc.

736,000
4.9%

Final Capitalization rate

5.3%

Other Matters Taken Into
Consideration by the Appraisal
Agency When Performing theAppraisal

Assessed using the historical amounts for past fiscal years and maintenanceand management expenses for similar real property, and recorded it.
After examining the levels of repair costs for similar real property wedetermined that the average annual repair cost in the engineering report wasappropriate, and recorded it.
Based on the current agreement, we examined it using the levels of property
manager fees for similar real property, and recorded it.
Tenant solicitation expenses, etc. were assessed based on the levels for
similar real property, with reference to the turnover is the expected turnoverrate were applied and the actual historical amounts for past fiscal year, and it
was recorded.
Based on the amount in records provided by the client, we performed ourassessment and recorded it after taking into account taxation, etc. levels andland price trends.
Assessed using estimated amounts years and non-life insurance premiums for
similar real property, and recorded it.
Assessed using historical amounts for past fiscal years, and recorded.

40,704

Discount rate

Cost method value
Land ratio
Building ratio

Assessed using the current agreement amounts and maintenance andmanagement expenses for similar real property, and recorded it.

We performed the assessment using both comparisons appraisal cases for
similar real property and by incorporating the characteristics of the real
property into the financial asset yield in combination, and referred tointerviews, etc. with investors.
We referred to the transaction yield in similar transaction case studies, andperformed out assessment taking into comprehensive account future
investment yield trends, the risks of the subject real property as aninvestment target, general projections for future economic growth rates, andreal property price trends, etc. Using the subject real property’s capitalization
rate as our basis, we performed our assessment taking into comprehensive
account of the possibility of escalations in capital expenditure due todeterioration with age, the unpredictability of sales market trends, andunpredictable elements such as the effects of the passage of time on liquidity.

529,000
28.6%
71.4%

We determined that an income amount properly reflecting actual supply and demand trends inthe market and the motives of market participants is more persuasive, so we determined theappraisal price in reference to an estimate using the value based on the income approach.

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

43

Property nameAppraisal price
Name of appraisal agency
Time of valuation
Items
Value based on income approach
Value based on direct
capitalization method
Operating Revenue
Lease revenue(including common area
fee income)
Parking lot revenue
Other revenue
Vacant premises, etc.
loss, etc.
Operating Expenses
Maintenance andmanagement expenses
Water and utility fees

Esty Maison Shijonishinotoin
1,180,000,000 yen
Japan Real Estate InstituteDecember 1, 2017
Details
1,180,000
1,190,000
85,258

Vacant premises, etc. loss, etc. deducted from potential gross revenues.

81,012

Recorded based on appropriate rent levels recognized to be stable over the
medium- to long-term.

5,147
5,898
-6,799

2,808
2,700
2,947

Property manager fee
Tenant solicitation
expenses, etc.
Taxes and other publicchargesNon-life insurance
premiums
Other expenses
Net Operating Income(NOI)
Revenue frominvestment of lumpsum payments

2,387

Net Income (NCF)

Capitalization rate

Value based on DCF method

Recorded taking into consideration historical amounts for past fiscal years.
Recorded on the assumption of occupancy rates stable over the medium- tolong-term.

22,653

Repair expenses

Capital expenditure(Unit: thousand yen)
Summary, etc.
Both direct capitalization and DCF methodologies used in combination.

3,137
5,504
99
3,071

Recorded taking into consideration current maintenance and management
expenses, etc.
Recorded taking into consideration historical amounts for past fiscal years.
Recorded taking into consideration costs for restoration to original condition
and annual average amounts for repair and renewal expenses, etc. in theengineering report.
Recorded taking into consideration current agreement terms, etc.
Recorded with reference to agreement terms and lease terms for similar real
property.
Recorded based on taxes and other public charge related materials.
Recorded taking into consideration insurance premiums, etc. based on
current insurance policies.
Recorded taking into consideration historical amounts for past fiscal years.

62,60540-4,483

Recorded as investment income using an investment yield of 1.0%.
Recorded taking into consideration annual average amounts for repair andrenewal expenses, etc. in the engineering report.

58,162

4.9%

Assessed after taking into account against the yield that is the basis for eacharea the location of the subject real property, the circumstances of thebuilding, and other adjustment of the spread due to other conditions, as well
as future unpredictability and the transaction yield for similar real property,
etc.

1,160,000

Discount rate

4.7%

Final Capitalization rate

5.1%

We referred to the investment yield for similar real property, and performedout assessment taking comprehensive account of matters such as the uniquecharacteristics of the subject real property.
We referred to the transaction yield, etc. for similar real property, andperformed out assessment taking into comprehensive account future
investment yield trends, the risks of the subject real property as aninvestment target, general projections for future economic growth rates, andreal property price and rent trends, etc.

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

44

Cost method value

1,060,000

Land ratio
Building ratio

41.5%
58.5%

Other Matters Taken Into
Consideration by the Appraisal
Agency When Performing theAppraisal

We performed our assessment by incorporating into the assessed land pricebased on the actual transaction price the building price revised downwards
from the replacement price, taking into account the unique characteristics ofthe subject building, and took into consideration the marketability of thebuilding and the site in combination (including incidental costs).

No applicable matters.

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

Esty Maison Hachiojiminamino
875,000,000 yen
Richi Appraisal Institute
September 30, 2017
Details
875,000(Unit: thousand yen)
Summary, etc.
Calculated centered on the value based on the income approach using the
DCF method and in correlation to the income amount using the direct
capitalization method.

885,000
66,14567,560Assessed based on rent standards recognized to be stable over the mediumto long-term, while also referring to the current rent and rent levels for
similar real property.

768
1,502
-3,685

Water and utility fee income, renewal fee income, vending machine
installation fee income, and motorcycle parking lot income recorded.
Assessed taking into account standard vacancy rates and the individual
characteristics of the subject real property.

15,343
2,736

Assessed based on levels and records, etc. for similar real property.

626
3,610
2,142

Assessed based on levels and records, etc. for similar real property.
Assessed based on levels, etc. for ER and similar real property.
Assessed based on levels and records, etc. for similar real property.
A stable turnover rate was assessed using similar real property and records,
etc., and recorded.

1,852
3,667

Recorded based on FY2017 records.

91

Recorded based on past records, etc.

617

Renewal administration fees recorded.

50,802
49-6,61844,2335.0%

Investment yield assessed as 1.0%, and Investment income recorded.
Assessed based on levels, etc. for ER and similar real property.
Assessed taking into comprehensive account the subject real property’s
location, unique characteristics, and market trends, etc.

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

45

Value based on DCF method

871,000

Discount rate

4.9%

Final Capitalization rate

5.1%

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

Assessed taking into comprehensive account the subject real property’s
location, unique characteristics, and market trends, etc.
Assessed taking into comprehensive account the impact of deterioration of
the building at the end of the period it is held, market trends, and future
unpredictability risks, etc. on the capitalization rate.

711,000
38.7%
61.3%

Recognized the appropriateness of an income amount that reflects the price forming process ofthe typical purchaser of the subject real property, and determined the appraisal price using thevalue based on income approach.

Property Name
Appraisal price
Name of appraisal agency
Time of valuation
Items
Value based on income approach
Value based on direct
capitalization method
Operating Revenue
Lease revenue(including common area
fee income)
Parking lot revenue
Other revenue
Vacant premises, etc.
loss, etc.
Operating Expenses
Maintenance andmanagement expenses
Water and utility fees

Esty Maison Nishinakajima
1,900,000,000 yen
Japan Real Estate InstituteDecember 1, 2017
Details
1,900,000
1,920,000
127,120

Vacant premises, etc. loss, etc. deducted from potential gross revenues.

124,970

Recorded based on appropriate rent levels recognized to be stable over the
medium- to long-term.

5,509
6,086
-9,445

3,245
2,900
4,540

Property manager fee
Tenant solicitation
expenses, etc.
Taxes and other publicchargesNon-life insurance
premiums
Other expenses
Net Operating Income(NOI)
Revenue frominvestment of lumpsum payments

3,637

Net Income (NCF)

Recorded taking into consideration historical amounts for past fiscal years.
Recorded on the assumption of occupancy rates stable over the medium- tolong-term.

28,807

Repair expenses

Capital expenditure(Unit: thousand yen)
Summary, etc.
Both direct capitalization and DCF methodologies used in combination.

7,513
6,366
132
474

Recorded taking into consideration current maintenance and management
expenses, etc.
Recorded taking into consideration historical amounts for past fiscal years.
Recorded taking into consideration costs for restoration to original condition
and annual average amounts for repair and renewal expenses, etc. in theengineering report.
Recorded taking into consideration current agreement terms, etc.
Recorded with reference to agreement terms and lease terms for similar real
property.
Recorded based on taxes and other public charge related materials.
Recorded taking into consideration insurance premiums, etc. based on
current insurance policies.
Recorded taking into consideration historical amounts for past fiscal years.

98,31360-4,466

Recorded as investment income using an investment yield of 1.0%.
Recorded taking into consideration annual average amounts for repair andrenewal expenses, etc. in the engineering report.

93,907

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

46

Capitalization rate

Value based on DCF method

4.9%

1,870,000

Discount rate

4.7%

Final capitalization rate

5.1%

Cost method value

1,380,000

Land ratio
Building ratio

35.7%
64.3%

Other Matters Taken Into
Consideration by the Appraisal
Agency When Performing theAppraisal

Value based on income approach

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

We referred to the investment yield for similar real property, and performedout assessment taking comprehensive account of matters such as the uniquecharacteristics of the subject real property.
We referred to the transaction yield, etc. for similar real property, andperformed out assessment taking into comprehensive account future
investment yield trends, the risks of the subject real property as aninvestment target, general projections for future economic growth rates, andreal property price and rent trends, etc.
We performed our assessment by incorporating into the assessed land pricebased on the actual transaction price the building price revised downwards
from the replacement price, taking into account the unique characteristics ofthe subject building, and took into consideration the marketability of thebuilding and the site in combination (including incidental costs).

No applicable matters.

Property Name
Appraisal price
Name of appraisal agency
Time of valuation
Items

Assessed after taking into account against the yield that is the basis for eacharea the location of the subject real property, the circumstances of thebuilding, and other adjustment of the spread due to other conditions, as well
as future unpredictability and the transaction yield for similar real property,
etc.

Esty Maison Kawaramachi
1,930,000,000 yen
Tanizawa Sogo Appraisal Co., Ltd.
December 1, 2017
Details

1,930,000(Unit: thousand yen)
Summary, etc.
It was determined that the value based on the income approach calculatedusing the DCF method, which calculates the value by defining fluctuations
on future net operating income, is more persuasive and convincing, so trial
calculations were performed using the direct capitalization method, based on
the income amount according to the DCF method.

1,960,000
122,121112,974
13,440
4,715-9,008

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

Key money, antenna installation fees, and electricity usage fees recorded.
Assessed using vacancy rates and parking lots vacancy rates equalized overthe medium- to long-term.

26,337
6,317

Assessed based on service agreements, etc.

1,296
2,952
3,522

Assessed based on expenditure records.
Assessed based on engineering reports and similar cases.
Assessed based on service agreements (not including CM and LM fees).
Assessed based on a turnover rate deemed to be a stable standard, based on
the competitiveness of the subject real property and similar properties, etc.
Assessed based on FY2017 tax materials.

1,448
7,568

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

47

charges
Non-life insurance
premiums
Other expenses
Net Operating Income(NOI)
Revenue frominvestment of lumpsum payments
Capital expenditure
Net Income (NCF)

Capitalization rate

Value based on DCF method

178
3,053

102
-3,53892,349

4.7%

Final capitalization rate

4.9%

Cost method value

2,110,000

Land ratio
Building ratio

62.5%
37.5%

Value based on direct
capitalization method
Operating Revenue
Lease revenue(including common area
fee income)
Parking lot revenue

Assessed based on engineering reports and similar cases.
The rate was compared to multiple transactions in neighboring areas andsimilar areas within the same supply and demand area, etc., we took into
account a comprehensive overview of the marketability of the subject real
property and trends in the real property market, etc., and took note of therelationship to the discount rate when performing our assessment.
We set a base yield for condominiums using the build up method, etc. basedon the yield for financial products, and carried out our assessment byincorporating the specified risks for the subject real property into that baseyield.
We carried out our assessment by incorporating future unpredictability,
based on the capitalization rate.
Calculated by making depreciation corrections to the cost of replacement of
the subject real property.

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

Property nameAppraisal price
Name of appraisal agency
Time of valuation

Value based on income approach

Assessed using an investment yield of 1.0%. Investment income recorded.

1,920,000
4.8%

Items

Assessed based on expenditure records.

95,784

Discount rate

Other Matters Taken Into
Consideration by the Appraisal
Agency When Performing theAppraisal

Assessed based on non-life insurance materials.

Esty Maison Shibaura
2,910,000,000 yen
Chuo Real Estate Appraisal Co., Ltd.
December 1, 2017
Details
2,910,000
3,040,000(Unit: thousand yen)
Summary, etc.
We mutually examined the value based on the income approach using the
DCF method and income amount using the direct capitalization method, andadopted the income amount using the DCF method.
Assessed upon capitalization using net income stable over the medium- tolong-term.

174,082
154,874

Taking into account the new rent if the subject real property were newly
leased and rent levels in the neighborhood, etc., we assessed a net incomethat is stable over the medium- to long-term.

19,488Other revenue

6,619

Vacant premises, etc.
loss, etc.

-6,899Key money, renewal fees, motorbike parking lot income, and electricity
charge income, etc. recorded.
Assessment was performed after setting a rate of utilization (occupancy rate)that is stable over the medium- to long-term taking into account theoccupancy records of the subject real property and similar real property, andthe unique characteristics of the subject real property, etc.

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

48

Operating Expenses
Maintenance andmanagement expenses

34,970

Water and utility fees

2,409

Repair expenses

2,878

Property manager fee

5,202

Tenant solicitation
expenses, etc.
Taxes and other publicchargesNon-life insurance
premiums
Other expenses
Net Operating Income(NOI)
Revenue frominvestment of lumpsum payments
Capital expenditure
Net Income (NCF)
Capitalization rate
Value based on DCF method

8,654

5,807

We used the latest actual amounts.

167

We used the latest actual amounts.

252

Security camera installation fees recorded.

139,112122-8,651

4.3%

Expenses expected to be incurred in future were equalized and recorded perannum. The annual average amount of the renewal cost estimate in theengineering report was used.
Assessed taking into account the unique characteristics of the subject real
property such as the location, the building, and rights relationships, while
also referring to the investment yield for similar real property transactions,etc.

2,910,000

Final capitalization rate

4.5%

Property nameAppraisal price
Name of appraisal agency
Time of valuation

Investment yield assessed as 1.0%.

130,583

4.1%

Other Matters Taken Into
Consideration by the Appraisal
Agency When Performing theAppraisal

Assessed taking into account cost levels of similar real property, based on
historical records.
Minor repair costs and costs for restoration to original condition expected to
be incurred going forward were recorded. The minor repair costs are basedon the average annual repair cost estimates provided in the engineering
report. Costs for restoration to original condition were assessed based on therecords, etc. for similar properties.
Assessment was performed taking into account the terms of current
agreements as well as cost levels, etc. for similar real property.
Assessed based on projected renewal rates and average tenant turnover
period, etc.

9,601

Discount rate

Cost method value
Land ratio
Building ratio

Assessment was performed taking into account the terms of current
agreements as well as cost levels, etc. for similar real property.

Assessed taking into account the unique characteristics of the subject real
property such as the location, the building, and rights relationships, while
also referring to the investment yield for similar real property transactions,etc.
Assessed taking into account the unique characteristics of the subject real
property such as the location, the building, and rights relationships, while
also referring to the investment yield for similar real property transactions,etc.

2,110,000
78.7%
21.3%

As potential purchasers of the subject real property are mainly investors who favor profitability,
we only used the cost method value as a reference, and adopted the value based on the income
approach.

Esty Maison Tsutsujigaoka
911,000,000 yen
Tanizawa Sogo Appraisal Co., Ltd.
December 1, 2017
(Unit: thousand yen)Disclaimer: This translation is for informational purposes only. If there is any discrepancy between the Japanese version of the English translation, the Japanese version shall prevail.

49

ItemsValue based on income approach

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

Capitalization rate

Value based on DCF method

Details

911,000

929,000
61,95557,755

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

5,832
3,005
-4,637

Key money, renewal fees, overhead power transmission line compensation,
FLETS Hikari electricity usage charges, etc. recorded.
Assessed using vacancy rates and parking lot vacancy rates equalized overthe medium- to long-term.

16,968
4,039

Assessed based on service agreements, etc.

932
2,629
1,768

Assessed based on expenditure records.
Assessed based on engineering reports and similar cases.
Assessed based on service agreements (not including CM and LM fees).
Assessed based on a turnover rate deemed to be a stable standard, based on
the competitiveness of the subject real property and similar properties, etc.

2,317
4,198

Assessed based on FY2017 tax materials.

91

Assessed based on non-life insurance materials.

991

Assessed based on expenditure records.

44,98688-3,261
41,813

4.5%

Assessed using an investment yield of 1.0%. Investment income recorded.
Assessed based on engineering reports and similar cases.
The rate was compared to multiple transactions in neighboring areas andsimilar areas within the same supply and demand area, etc., we took into
account a comprehensive overview of the marketability of the subject real
property and trends in the real property market, etc., and took note of therelationship to the discount rate when performing our assessment.

903,000

Discount rate

4.6%

Final capitalization rate

4.7%

Cost method value

850,000

Land ratio
Building ratio

57.4%
42.6%

Other Matters Taken Into
Consideration by the Appraisal
Agency When Performing theAppraisal

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

We set a base yield for condominiums using the build up method, etc. basedon the yield for financial products, and carried out our assessment byincorporating the specified risks for the subject real property into that baseyield.
We carried out our assessment by incorporating future unpredictability,
based on the capitalization rate.
Calculated by making depreciation corrections to the cost of replacement of
the subject real property.

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

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

50

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

*Addresses of the websites of the Two Investment Corporations
Sekisui House Reit, Inc.:
Sekisui House Residential Investment Corporation:

http://sekisuihouse-reit.co.jp/en/
http://www.shi-reit.co.jp/eng/

Attached Materials
Reference Materials 1
Reference Materials 2

Photos of the Appearance, and Maps, of the Assets to be Acquired
Summary of Portfolio After Asset Replacement

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

51

Reference Materials 1

Photos of the Appearance, and Maps, of the Assets to be Acquired(1) Prime Maison Shirokanedai Tower

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

52

(2) Prime Maison Otsuka

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

53

(3) Prime Maison Asakusabashi

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

54

(4) Prime Maison Daikanyama

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

55

(5) Prime Maison Gotenyama West

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

56

(6) Esty Maison Toyosu Residence

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

57

Reference Materials 2: Summary of Portfolio After Asset Replacement■ List of SHI’s Current Portfolio (excluding the Assets to be Sold)
Use

Property nameDate ofacquisition(Expected)
purchase price(million yen) (Note 1)(Expected)
investment ratio(%) (Note 2)

Esty Maison Ginza

Chuo-ku, Tokyo

August 2, 2005

6,390

1.5

Esty Maison Azabunagasaka

Minato-ku, Tokyo

August 2, 2005

1,760

0.4

August 2, 2005

2,000

0.5

August 2, 2005

855

0.2

August 2, 2005

1,570

0.4

August 2, 2005

1,550

0.4

August 2, 2005

2,140

0.5

August 2, 2005

2,360

0.5

February 28, 2007

2,130

0.5

January 31, 2006

1,580

0.4

February 1, 2006

1,060

0.2

March 9, 2007

1,590

0.4

Esty Maison Ebisu II
Esty Maison Ebisu
Esty Maison Kanda
Esty Maison Kitashinjuku
Esty Maison Asakusakomagata
Esty Maison Kawasaki
Esty Maison Yokohama
Esty Maison Kameido
Esty Maison Meguro
Esty Maison Sugamo

Residence

Location

Shibuya-ku,
TokyoShibuya-ku,
Tokyo
Chiyoda-ku,
TokyoShinjuku-ku,
Tokyo
Taito-ku, Tokyo
Kawasaki-shi,
Kanagawa
Yokohama-shi,
Kanagawa
Koto-ku, Tokyo
Meguro-ku,
TokyoToshima-ku,
Tokyo

Esty Maison Kyobashi

Osaka-shi, Osaka

April 3, 2006

2,970

0.7

Esty Maison Hakuraku

Yokohama-shi,
Kanagawa

April 3, 2006

932

0.2

Esty Maison Minamihorie

Osaka-shi, Osaka

March 9, 2007

1,040

0.2

Shinagawa-ku,
Tokyo
Shinagawa-ku,
Tokyo
Shinagawa-ku,
Tokyo

September 14,
2006

3,090

0.7

September 14,
2006

2,730

0.6

September 14,
2006

2,010

0.5

Esty Maison Minamiazabu

Minato-ku, Tokyo

October 23, 2006

1,220

0.3

Esty Maison Tsukamoto

Osaka-shi, Osaka

December 1, 2006

1,080

0.2

Esty Maison Kawasaki II

Kawasaki-shi,
Kanagawa

March 28, 2007

1,860

0.4

Esty Maison Azabujuban

Minato-ku, Tokyo

May 11, 2007

2,620

0.6

August 21, 2007

927

0.2

August 21, 2007

773

0.2

July 1, 2008

2,400

0.5

November 1, 2007

2,480

0.6

November 30,
2007

1,040

0.2

February 6, 2008

697

0.2

April 25, 2008

2,090

0.5

March 26, 2008

2,400

0.5

Esty Maison Gotanda
Esty Maison Oisendaizaka
Esty Maison Shinagawa Seaside

Esty Maison Itabashihoncho
Esty Maison Oizumigakuen
Esty Maison Higashishinagawa
Esty Maison
Itabashikuyakushomae
Esty Maison Musashikoyama
Esty Maison Sendagi
Esty Maison Yotsuyasakamachi
Esty Maison Hakatahigashi

Itabashi-ku,
Tokyo
Nerima-ku,
Tokyo
Shinagawa-ku,
Tokyo
Itabashi-ku,
Tokyo
Shinagawa-ku,
TokyoBunkyo-ku,
TokyoShinjuku-ku,
TokyoFukuoka-shi,
Fukuoka

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

58

Use

Property nameEsty Maison Kamigofuku
Esty Maison Sangenjaya
Prime Maison Musashinonomori

Fukuoka-shi,
Fukuoka
Setagaya-ku,
Tokyo
Kodaira-shi,Tokyo

Date ofacquisition(Expected)
purchase price(million yen) (Note 1)(Expected)
investment ratio(%) (Note 2)

April 25, 2008

821

0.2

December 15,
2008

824

0.2

October 1, 2010

1,860

0.4

Prime Maison Higashisakura

Nagoya-shi, Aichi

October 1, 2010

1,490

0.3

Prime Maison Kayabakoen

Nagoya-shi, Aichi

October 1, 2010

787

0.2

March 25, 2011

786

0.2

June 10, 2011

2,640

0.6

February 1, 2012

2,360

0.5

February 1, 2012

1,220

0.3

March 2, 2012

1,740

0.4

Esty Maison Sangenjaya II
Esty Maison Itabashi C6
MAST Hakata
Esty Maison Kinshicho
Esty Maison Musashikoganei

Residence

Location

Setagaya-ku,
Tokyo
Itabashi-ku,
TokyoFukuoka-shi,
Fukuoka
Sumida-ku,
Tokyo
Koganei-shi,Tokyo

Prime Maison Gokiso

Nagoya-shi, Aichi

April 2, 2012

1,890

0.4

Prime Maison Yuhigaoka

Osaka-shi, Osaka

April 2, 2012

909

0.2

Prime Maison Kitatanabe

Osaka-shi, Osaka

April 2, 2012

601

0.1

Prime Maison Momochihama

Fukuoka-shi,
Fukuoka

April 2, 2012

1,900

0.4

Esty Maison Akihabara

Taito-ku, Tokyo

June 29, 2012

1,980

0.5

Esty Maison Sasazuka

Shibuya-ku,
Tokyo

September 5, 2012

3,350

0.8

Prime Maison Ginza East

Chuo-ku, Tokyo

October 1, 2012

6,160

1.4

Prime Maison Takami

Nagoya-shi, Aichi

October 1, 2012

1,050

0.2

Prime Maison Yadaminami

Nagoya-shi, Aichi
Fukuoka-shi,
Fukuoka
Nagoya-shi, Aichi

October 1, 2012

821

0.2

October 1, 2012

1,360

0.3

October 1, 2012

1,580

0.4

February 8, 2013

1,360

0.3

February 8, 2013

2,280

0.5

February 8, 2013

1,730

0.4

March 1, 2013

1,680

0.4

March 1, 2013

2,390

0.5

May 1, 2013

1,640

0.4

May 1, 2013

1,510

0.3

May 1, 2013

842

0.2

May 1, 2013

1,040

0.2

May 1, 2013

1,870

0.4

May 1, 2013

1,020

0.2

May 1, 2013

967

0.2

Prime Maison Teriha
Esty Maison Higashishirakabe
Esty Maison Sengoku
Esty Maison Daizawa
Esty Maison Togoshi
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

Bunkyo-ku,
Tokyo
Setagaya-ku,
Tokyo
Shinagawa-ku,
Tokyo
Osaka-shi, Osaka
Shinagawa-ku,
TokyoShinjuku-ku,
Tokyo
Minato-ku, Tokyo
Meguro-ku,
TokyoShinagawa-ku,
Tokyo
Nakano-ku,
TokyoNakano-ku,
TokyoNakano-ku,
Tokyo

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

59

Use

Property nameEsty Maison Tetsugakudo
Esty Maison Koenji
Esty Maison Oshiage

Nakano-ku,
Tokyo
Suginami-ku,
Tokyo
Sumida-ku,
Tokyo(Expected)
purchase price(million yen) (Note 1)(Expected)
investment ratio(%) (Note 2)

May 1, 2013

1,170

0.3

May 1, 2013

1,140

0.3

May 1, 2013

2,440

0.6

Date ofacquisition

Esty Maison Akabane

Kita-ku, Tokyo

May 1, 2013

3,300

0.8

Esty Maison Oji

Kita-ku, Tokyo

May 1, 2013

1,660

0.4

Prime Maison Waseda

Shinjuku-ku,
Tokyo

October 1, 2013

1,580

0.4

Prime Maison Hatchobori

Chuo-ku, Tokyo

October 1, 2013

1,460

0.3

October 1, 2013

1,920

0.4

October 1, 2013

2,820

0.6

January 21, 2014

555

0.1

January 31, 2014

2,490

0.6

March 28, 2014

2,370

0.5

May 1, 2014

8,340

1.9

May 1, 2014

8,730

2.0

Prime Maison Jinbocho
Prime Maison Gotenyama East
MAST LIFE Akihabara
Esty Maison Aoi

Chiyoda-ku,
Tokyo
Shinagawa-ku,
Tokyo
Chiyoda-ku,
Tokyo
Nagoya-shi, Aichi

Esty Maison Ojima

Fukuoka-shi,
Fukuoka
Sumida-ku,
Tokyo
Koto-ku, Tokyo

Prime Maison Fujimidai

Nagoya-shi, Aichi

May 1, 2014

2,080

0.5

Esty Maison Tsurumai

Nagoya-shi, Aichi

May 1, 2014

4,500

1.0

Prime Maison Morishita

Koto-ku, Tokyo

November 4, 2014

1,920

0.4

November 4, 2014

1,980

0.5

November 4, 2014

3,160

0.7

November 4, 2014

1,940

0.4

November 4, 2014

1,250

0.3

November 4, 2014

2,309

0.5

November 4, 2014

1,910

0.4

January 15, 2015

4,360

1.0

April 2, 2015

1,090

0.2

April 2, 2015

830

0.2

July 10, 2015

2,751

0.6

Esty Maison Yakuin
Esty Maison Kinshicho II

Residence

Location

Prime Maison Shinagawa
Prime Maison Odorikoen
Prime Maison Minami 2-joPrime Maison Kamokamogawa
Prime Maison Central Park

MAST LIFE Yahiro
Prime Maison Ebisu
Granmast Kanazawa Nishiizumi
Granmast Unomori
Esty Maison Kohokutsunashima

Shinagawa-ku,
Tokyo
Sapporo-shi,
Hokkaido
Sapporo-shi,
Hokkaido
Sapporo-shi,
Hokkaido
Fukuoka-shi,
Fukuoka
Sumida-ku,
TokyoShibuya-ku,
TokyoKanazawa-shi,Ishikawa
Yokkaichi-shi,
MieYokohama-shi,
Kanagawa

MAST LIFE Hino

Hino-shi, Tokyo

October 1, 2015

1,390

0.3

Prime Maison Yokohama
Nihon-Odori

Yokohama-shi,
Kanagawa

January 29, 2016

4,790

1.1

Kobe Women’s Student Housing

Kobe-shi, Hyogo

March 1, 2016

5,880

1.3

Prime Maison Shibuya

Shibuya-ku,
Tokyo

April 1, 2016

2,360

0.5

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

60

Use

Residence(Expected)
purchase price(million yen) (Note 1)(Expected)
investment ratio(%) (Note 2)

April 1, 2016

2,940

0.7

Osaka-shi, Osaka

April 1, 2016

1,020

0.2

Kobe-shi, Hyogo

April 1, 2016

976

0.2

Minato-ku, Tokyo

November 1, 2016

4,800

1.1

November 1, 2016

4,220

1.0

March 17, 2017

643

0.1

210,876

47.9

2,891

0.7

2,891

0.7

213,767

48.6(Expected)
purchase price(million yen) (Note 1)(Expected)
investment ratio(%) (Note 2)

Property nameLocation

Prime Maison Hatsudai

Shibuya-ku,
Tokyo

Esty Maison Uemachidai
Esty Maison Kobe-Sannomiya
Prime Maison
Shirokane-Takanawa
Prime Maison
Ichigayayamabushicho
Esty Maison Morishita

Shinjuku-ku,
Tokyo
Sumida-ku,
Tokyo

Date ofacquisition

Residence – subtotal
Commercial
facility

Hamamatsu Plaza

Hamamatsu-shi,
Shizuoka

July 28, 2005

Commercial facility – subtotal
SHI’s current portfolio (excluding the Assets to be Sold) total■ List of SHR’s current portfolio
Use

Officebuilding

Property nameDate ofacquisition

Location

Garden City Shinagawa Gotenyama

Shinagawa-ku,
Tokyo

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

59,60013.6

Gotenyama SH Building

Shinagawa-ku,
Tokyo

December 3, 2014

51,50011.7

Hommachi Minami Garden City

Osaka-shi, Osaka

December 3, 2014

23,1005.3

Hommachi Garden City
(Office building portion)

Osaka-shi, Osaka

May 19, 2015

38,6008.8

HK Yodoyabashi Garden Avenue

Osaka-shi, OsakaMay 24, 2016

4,400

Hirokoji Garden Avenue

Nagoya-shi, Aichi

May 24, 2016

6,350

1.0
1.4
Office building – subtotal
Hotel

Hommachi Garden City
(Hotel portion)

Osaka-shi, OsakaMay 24, 2017

183,550

41.7

17,2003.9

Hotel – subtotal

17,200

3.9

SHR’s current portfolio total

200,75045.6

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

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■ Assets to be Acquired
Use

Property namePrime Maison Shirokanedai Tower
Prime Maison Otsuka
Prime Maison Asakusabashi

ResidencePrime Maison Daikanyama
Prime Maison Gotenyama West
Esty Maison Toyosu Residence

Scheduledacquisition date

Location(Expected)
purchase price(million yen) (Note 1)(Expected)
investment ratio(%) (Note 2)

7,950

1.8

3,700

0.8

1,680

0.4

2,520

0.6

3,400

0.8

6,050

1.4

25,300

5.8

Shinagawa-ku,
TokyoToshima-ku,
Tokyo
Taito-ku, Tokyo
May 1, 2018

Meguro-ku,
TokyoShinagawa-ku,
Tokyo
Koto-ku, Tokyo

Assets to be Acquired – total■ Assets to be Sold
Use

Property nameEsty Maison Machida

Esty Maison Megurohoncho

Machida-shi, Tokyo
Kawasaki-shi,
Kanagawa
Meguro-ku, Tokyo

Esty Maison Joto

Osaka-shi, Osaka

Esty Maison Tenjinhigashi I

Fukuoka-shi, Fukuoka

Esty Maison Tenjinhigashi II

Fukuoka-shi, Fukuoka

Esty Maison Shijonishinotoin

Kyoto-shi, Kyoto

Esty Maison Hachiojiminamino

Hachioji-shi, Tokyo

Esty Maison Nishinakajima

Osaka-shi, Osaka

Esty Maison Kawaramachi

Osaka-shi, Osaka

Esty Maison Shibaura

Minato-ku, Tokyo

Esty Maison Tsutsujigaoka

Chofu-shi, Tokyo

Esty Maison Shinkawasaki

Residence

Location

Scheduled sale date

Planned sale price(million yen) (Note 3)

May 1, 2018

Undisclosed

Assets to be Sold – total

16,400■ New SHR’s portfolio after Asset Replacement (as of May 1, 2018)
Use(Expected) purchase price(million yen) (Note 1)

Number of properties (Note 4)(Expected) investment ratio(%) (Note 2)

Residence

106 properties

236,176

53.7

Office buildings

6 properties

183,550

41.7

Hotel

1 property

17,200

3.9

Commercial facility, etc.

1 property

2,891

0.7

113 properties

439,817

100.0

Total
Note 1:

Note 2:

Note 3:Note 4:“(Expected) purchase price” uses the price calculated at the end of the most recent fiscal year (the fiscal year ended September 30, 2017 (24thbusiness year)) for assets held by SHI (excluding Assets to be Sold), and for assets held by SHR the planned acquisition price is used, and theassets to be acquired use planned acquisition price, which are all provided, and differ from the actual amounts received by New SHR. Please
note that amounts of less than one million yen are rounded down.
“(Expected) investment Ratio” sets forth the percentage that the respective asset’s (expected) acquisition price or the planned acquisition
price of assets to be acquired make up of the total (expected) acquisition price (rounded off to two decimal places) of assets held by New
SHR after the Asset Replacement.
The planned sale price for the Assets to be Sold has not been disclosed since the purchasers have not given approval for such disclosure.
Hommachi Garden City is listed separately as unit ownership of an office building and unit ownership of a hotel for the office and hotel
sections respectively, and listed as one whole building when calculating the total number of properties. Therefore, the figure given in the total
section differs from the total of all items.

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

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