Samty Residential Investment Corporation（Securities CODE：3459）

Financial Results for the 3rd Fiscal PeriodEnding January 2017

Contents
１. Features of Samty Residential Investment Corporation

P.3

２. Financial Overview for the 3 rd Fiscal Period

P.7

３. Managing Result

P.10

４. Future Growth Strategy

P.22

５. Operating Results and Distribution Information

P.30

６. Appendix

P.36

2

１. Features of Samty Residential Investment Corporation

Investment Strategy of Samty Residential Investment Corporation
 Samty Residential Investment Corporation(“Samty Residential”) will invest in highquality residential assets suitable for respective regional conditions throughout
national cities with the sponsor support of the Samty Group(1) Features of Samty Residential

Samty Residential aims to build a portfolio which pursues stability, growth potential and earning potential by “investing
primarily in residential properties in major regional cities ” and “being supported from the Samty Group.”

Investing primarily in residential properties in major regional cities
Stability

GrowthEarning Potential▶ Diversified investing in carefully
screened residential properties ofJapan▶ Expanding portfolio size throughcontinual new investments
primarily in major regional cities▶ Realizing large earnings
収益性
anticipated through investing in
carefully screened residential
properties in major regional cities

Support from the Samty Group
Properties developed by the Samty Group
Stable supply of the S-RESIDENCE series
Grant of exclusive negotiating rights

Listed on the First Section of the Tokyo
stock Exchange on October 26, 2015

Wide-ranging support of the sponsor
Enhancing value through running a unified
brand

Stable supply of new developed properties(Note) “Samty Group” refers to Samty Co., Ltd., and its consolidated subsidiary companies (Ordinance on Terminology, Forms and Preparation Methods of Consolidated Financial
Statements (Ministry of Finance No. 28 of 1976. Including subsequent amendments.) Referred to as consolidated subsidiary company as stipulated by Article 2 (iii).) andspecial purpose companies which Samty Co., Ltd., invests in themselves, other than the consolidated subsidiary companies of Samty Co., Ltd., while excluding Samty
Residential.

4

Investment Strategy of Samty Residential Investment Corporation(2) Portfolio Development Policy
A. Investment policy by asset class Investing in accommodation facilities and otherfacilities, primarily in the residential asset class

Residential
properties(Note1)

 Focusing on investing in major regional cities
Investment areas

80% or more
20% or less

Focus on the Single andCompact type residences
Floor per unit of lessthan 30m2

Compact Type

Floor per unit ofbetween 30m2 and
60m2(Note1) “Residential properties“ represents the rental housing.
(Note2) “Operating facilities” represents the hotels and health care properties.

(Sapporo, Sendai, Nagoya, Kyoto, Osaka, Kobe,
Hiroshima and Fukuoka)
50% or more of all investments will be inproperties that are conveniently located nearbus terminals or railway stations linked withother major terminal stations.

50%

or moreAround70%

Other regional cities(Regional cities excluding
major regional cities)
20% or less of investments will be inresidential properties that can be anticipatedstable operation rental and income stability
because of their commutable location to core
office area, medical facilities or national
universities located in the area.

GreaterTokyo area

Single Type

Investment ratio (Note3)

Major regional cities

Regional cities

Operatingfacilities(Note2)

Ｂ. Investment policy by geographical area

20%
or less

Tokyo, Kanagawa, Saitama,
Chiba
Around 30% of investments will be inresidential properties primarily located inresidential communities within a 10-minute
walk of the nearest railway station (or busstop) that is located along a line connected
to a terminal station.

Around30%(Note3) “Investment ratio” is calculated based on the acquisition price.
The above is the target investment mix. Actual portfolio composition
may vary.

5

Portfolio Overview■Samty Residential has acquired 49 residential properties throughout Japan andsuccessfully composed more stable diversified portfolio concentrating in major
regional cities
Owned Properties ･･･ ●Investment ratio
by geographical area

A-21
A-23 ■
A-09
A-20
A-22■
■●
A-02●●■ ● A-03
B-03■■ A-19●A-10A-18
B-07 ■●
B-04

GreaterTokyo area
17.5%

●A-12
●●A-16
A-11

Hokkaido
5.3%
A-27 A-28■
A-14 ●■
A-13 A-17■ B-05
A-26 ■■●
A-01●■● B-02
●
A-25
A-08

A-24
A-05 ■
●
●A-04
●
B-09■
■ A-06
B-08

A-29
●A-07
A-15■
●

■
B-06
●
B-01

Asset size
No. of properties
Occupancy rate
Average building age
Average appraisal
NOI yield

Other
Regional cities
15.1%

C-09
C-03 ●●●C-07C-02 ● ●C-08
C-11
●
●
■
C-05 C-04
●C-01
C-10
● ■
C-06

51.5 billion yen
49 properties
97.5%
7.9 year
5.6%(Note) The above figures are for 49 properties owned as of today. Occupancy rateand Average building age are figures calculated as of January 31, 2017.

Raito by Building age

Kitakanto
1.2%

Kinki
32.0%

Ratio ofregional cities
Kyusyu 82.5%
12.2%
Tohoku
9.2%

Tokai
22.7%

10 years
to less
than 15
years
29.6%

Major
Regional cities
67.4%

Investment ratio by seller
Properties acquired
from sources
unrelated to thesponsor18.6%
Through
warehousing
17.8%

Properties
developed by
the sponsor
22.0%

Owned
by thesponsor23.2%

15 years
to less
than 20years
5.3%

Averagebuilding age
7.9 yearLess than
5 years
31.0%

5 years toless than
10 years
34.0%

Ratio of average area
per residential unit
Familytype
10.2%

Ratio ofsingle andCompact
compact type
type
89.8%
36.0%

ThroughbridgeProperties acquired
funds
through sponsor
18.4%
involvement
59.4%(Note) The above ratios are calculated based on acquisition prices for
49 properties owned as of today.

Single
type
53.7%

6

２. Financial Overview for the 3 rd Fiscal Period

Summary of Income Statement for 3 rd Fiscal Period
Comparison Forecast and Actual Result
Actual result was generally as expected with the increased revenue due to the rise of occupancy rate
and rental revenues including common area expenses; the lowered financing costs due to reduced
leasing and utilities cost as well as the lowered financing costs due to a fall in base interest rate;
the lowered depreciation and the increased investment volume due to value-adding work, etc.
(million yen)

3rd Period（January 31, 2017）
2nd Period

Forecast（July 31, 2016）（As of September 14,

Change from

Results

Forecast

2016）■Management performance
Operating revenue

1,110

1,790

1,806

+16

(out of which, real estate rental revenue)

1,109

1,790

1,805

+15

Operating expenses

693

955

956

+1

(out of which, real estate rental expenses)

538

768

766

-2

Operating income

417

834

849

+15

Non-operating income and loss

-85

-251

-243

Ordinary income

331

582

606

Corporate tax, etc.

0

1

0

330

581

605

2,026 yen

2,056 yen

2,138 yen

592 yen544 yen

507 yen2,600 yen

2,645 yen

Net income(Not including distribution
in excess of earnings)・・・①
Distribution in excess of earnings
per unit・・・②

Total distribution per unit ・・・① + ②

2,618 yen

（注2）(+ indicates increase factors ,– indicates decrease factors)

Operating income increased due to the rise in occupancy
and rental revenues including common area expenses, andthe reduction in costs from changing power suppliers, etc. As
to non-operating income and loss, ordinary income was 606
million yen (+23 million yen from the Forecast) and net
income was 605 million yen (+23 million from the Forecast)due to recording of expenses related to public offering andholding of the General Unitholdersʼ Meeting in the 3rd fiscal
period.

■ Increase in operating revenue: +16 million yen
・Increase in occupancy and rental revenues: +4 million yen
・Increase in other revenues+7(parking, restoration income, etc.): +11 millionyen+23 ■Increase in operating expenses: -1 million yen

・Decrease in real estate rental expenses
such as leasing expenses: +20 million yen
・Increase in repair expenses+23
due to value-adding work, etc.: -23 million yen
・Decrease in depreciation: +5 million yen
・Increase in selling,
general and administrative expenses: -3 million yen
0■Distributions(Note)
Distribution per unit

Vs. 3rd fiscal period Foreast+82 yen■ Non-operating income and loss: +7 million yen
・Decrease in interest expenses-37 yendue to the lowered base interest rates: +4 million yen
・Other non-operating income and expenses: +2 million yen+45 yen(Note1) Calculated with the number of investment units issued at 163,340 for 2nd period
and 283,000 for 3rd period.
(Note2) For more detaills, please refer to “Change in forecast actual forecast” on page 33.

【Average occupancy rate 【Capital expenditures】
during 3rd period】
Forecast：
95.4%
Forecast：
42 million yen
Actual result：96.5%
Actual result：26 million yen

8Summary of Income Statement for 3rd Fiscal Period
Comparison of Forecasted Distribution with Actual Result
Comparison between the forecast and the actual results of the 3rd fiscal period
Operating revenue factors

Operating expensed factors＋16 mn yen-1 mn yen（+58 yen）（-3 yen）

Non-operating income
and expense factors＋7 mn yen（＋27 yen）

Total distribution
748 mn yen（2,645 yen）

Restoration
Other expenses

expenses

2 mn yen

1 mn yen

Leasing promotion
expenses
9 mn yen

Total
distribution
735 mn yen(2,600 yen)

Payout ratio
72%

Value-adding

Distribution in excess

workof earnings

13 mn yen

143 mn yen

Utilities expenses

Other

5 mn yenManagement
service fee

Payout ratio72%

6 mn yen

Decrease in

Parking income

real estate

Increase inrentalrepairexpenses

expenses＋20 mn yen-23 mn yen（＋72 yen）（-82 yen）

2 mn yen
Restoration income
2 mn yen(544 yen)

Increase in

Increase in
Increase inotherDistribution

rentalrevenues

581 mn yen

revenues dut＋11 mn yen(2,056 yen)

to rise in（＋41 yen）

Interest expenses

8 mn yen

3 mn yenof earnings
154 mn yen

Repair expenses

Other income

Distribution in excess（507 yen）

3 mn yenselling,
Decrease ingeneral anddepreciation

administrativ＋5 mn yene expenses（＋18 yen）- 3 mn yen（-12 yen）

4 mn yen

Total

Decrease inDistribution

increase innon-

605 mn yen

operating(2,138 yen）

expenses

distribution＋23mn yen（＋82 yen）＋7 mn yen（＋27 yen）

occupancy＋4 mn yen（＋16 yen）

3 rd period

Increase/decrease of total distribution ＋23 mn yen（＋82 yen）

Forecast Distribution(announced on September 14, 2016)(Note) The above figures are rounded down to the nearest whole number.

3rd Period
Actual Result
93. Managing Result

Management Summary
External
Growth Samty Residential acquired 20 properties (20.5 billion yen) with public offering in August 2016 andhas enhanced portfolio stability through expanding its asset size.

 Samty Residential secured flexible growth opportunities by investing in silent partnership of a bridge

fund.

Internal
Growth Samty Residential implemented appropriate management based on the property/location features ofowned properties to realize stable occupancy rates and rent unit prices.

 Samty Residential promoted to materialize potential earning capabilities of properties through various

measures including enhancement of usability and reduction of costs.

 Samty Residential constructed a solid financial condition by expanding the bank formation,

diversifying repayment dates of and fixing the interest rates of interest-bearing liabilities, etc.

Financial
Strategy Samty Residential successfully diversified fund procurement methods by issuing investment

corporation bonds (private placement).

 Samty Residential realized lowering of LTV by making an early repayment of short-term loan

(462 million yen) with cash on hand.

Portfolio highlight
No. of properties

IPO

End of 1st period

End of 2nd period

End of 3rd period（July 1, 2015）(January 31, 2016)(July 31, 2016)(January 31, 2017)28 properties

29 properties

29 properties

49 properties

Total acquisition price30,500 million yen

30,962 million yen

30,962 million yen

51,551 million yen

Appraisal value

30,936 million yen

32,434 million yen

32,975 million yen

55,693 million yen

Appraisal NOI yield

5.6%

5.6%

5.6%

5.6%

Average building age

7.0 year

7.6 year

8.1 year

7.9 yearOccupany rate

92.8%

(Note)

95.2%

95.4%

97.5%

No. of rentable units

2,297 units

2,345 units

2,345 units

3,754 units(Note) The occupancy rate is the figure as of the end of June 2015 and excluding recently completed S-FORT Tsurumai marks, S-FORT Shonan Hiratsuka and
S-FORT Gakuenmae which was purchased on October 1, 2015.

11

External Growth

Overview of Public Offering in August 2016
Overview of public offering
１.Details ofoffering

Number of investment units offered:
119,660 units
Number of investment units offered throughover-allotment:
5,983 units

３.Price of offering

２.Schedule

Date of resolution of issurance: July 11, 2016
Payment date: August 1, 2016
Delivery date: August 2, 2016

86,686 yen per unit
(Final closing price on the determinationof the condition: 91,500 yen)

４.Total amountof offering

10.8 billion yen

５.Amount of
payment

10 billion yen

６.Lead Managers

Daiwa Securities Co., Ltd.
Nomura Securities Co., Ltd.

List of newly acquired properties
Property
number

Property Name

Acquisition

Appraisal

price

value

(million yen)(million yen)

Major Regional Cities

Property
numberAcquisition
Property Name

Appraisal

price

value

(million yen)(million yen)

Other Regional Cities
A-17

S-RESIDENCE Shin Osaka Ekimae

2,489

2,710

B-05

S-RESIDENCE Esaka

2,323

A-18

S-FORT Aoi 1-Chome

1,080

1,130

B-06

S-FORT Utsunomiya

612

642

A-19

S-FORT Aoi

870

976

B-07

S-FORT Yokkaichi Nishishinchi

630

711

A-20

S-FORT Kurumamichi

400

427

B-08

S-FORT Saga Honjo

1,050

1,070

A-21

S-FORT Kamiotai

720

741

B-09

S-FORT Saga Idaimae

375

394

A-22

S-FORT Tsurumai arts

680

767

925

2,500

Greater Tokyo Area

A-23

S-FORT Tsurumai cube

570

647

C-10

S-RESIDENCE Yokosuka Chuo

850

A-24

S-FORT Fukuoka Higashi

1,900

2,040

C-11

S-FORT Sagamihara

585

608

A-25

S-RESIDENCE Kobe Motomachi

1,200

1,360

20,58922,261

A-26

S-FORT Kobe Kaguracho

1,858

2,120

A-27

S-FORT Nijo-jo mae

812

858

A-28

S-FORT Chion-in mae

500

525

A-29

S-FORT Miyamachi

1,085

1,110

Total

20 properties

12External Growth

Steady enternal grwoth under the consistent investment policy
Secured stable earnings by continuously investing in properties close to medical institutions or
educational facilities such as universities and by adopting the fixed rent master lease (ML).
Close to medical
Close to universities andClose toinstitutions
medical institutions
universities
S-FORT Katahira

Major regional
citiesJuly 2015

S-FORTGakuenmae

October 2015

Fixed-rent ML

Fixed-rent ML

S-FORT
Fukuoka Kencho Mae

S-FORT
Chion-in-mae

April 2015

August 2016

S-FORT Tsurumai cube S-FORT Hokudai mae

July 2015

August 2016

S-RESIDENCE Yokosuka Chuo
Dormitory with a day
nursery for its
employees, provided aspart of an employee
benefits package of acorporation, and has
single-type units.
August 2016

S-RESIDENCE
Kobe Motomachi

S-FORT
Rokuban-cho

August 2016

July 2015

Fixed-rent ML

Other regional
cities

S-FORT Saga Honjo

S-FORT Saga Idaimae

August 2016

August 201613

Internal Growth

Changes in the Occupancy Rates by Area

Occupancy rate for the entire portfolio has risen 4.7% from the time of IPO.
Currently it stably keeps around 97%.

Began managementwith 28 properties
On July 1, 2015

2nd Fiscal Period (July 31, 2016)

1st Fiscal Period (January 31, 2016)

Occupancy rate(%)

1st Fiscal Period (January 31, 2016)30-Jun31-Jul

31-Oct

3rd Fiscal Period (January 31, 2017)

2nd Fiscal Period （July 31, 2016)
31-Jan29-Feb30-Jun

3rd Fiscal Period （January 31, 2017)31-Aug30-Sep30-Nov

31-Dec31-Mar30-Apr31-MayMajor regional cities

92.7

94.1

94.5

95.5

94.9

94.6

94.5

95.6

95.4

96.2

95.5

94.8

94.7

31-Jul95.3

31-Aug95.6

30-Sep96.5

31-Oct96.4

30-Nov

96.4

31-Dec96.7

31-Jan97.8

Other regional cities

93.8

94.1

95.0

94.4

92.8

94.6

94.3

95.3

93.5

97.2

95.2

94.5

92.7

95.2

96.0

95.8

96.7

96.9

96.6

96.9

Greater Tokyo area

92.5

92.7

92.8

92.1

91.9

93.2

92.4

93.5

93.7

96.1

96.3

95.8

95.9

96.2

95.1

96.2

96.5

97.1

95.9

96.7

Overall

92.8

93.9

94.3

94.8

94.2

94.4

94.1

95.2

94.9

96.3

95.6

94.9

94.6

95.4

95.6

96.4

96.5

96.6

96.6

97.5

(Note) Occupancy rates shows the ratio of total leased floor space to total rentable floor space as of each month end for each property, rounded off to one decimal place.
Occupancy rates from end of April 2015 to end of August 2015 excluding recently completed S-FORT Tsurumai marks and S-FORT Shonan Hiratsuka as well as S-FORT Gakuenmae which was
acquired on October 1, 2015.
The Occupancy rate for end of September 2015 includes S-FORT Tsurumai marks and S-FORT Shonan Hiratsuka, but excludes S-FORT Gakuenmae which had not been acquired.
The occupancy rate for end of July does not include the 20 properties acquired in August 2016.
The occupancy rate for end of August 2016 excludes recently completed S-FORT Tsurumai cube.

14

Internal Growth

Changes in unit rent after adjustment

Unit rent after adjustment of the entire portfolio and earning capability
including key money revenue have remained stable.

Began managementwith 28 properties
On July 1, 2015

1st Fiscal Period (January 31, 2016)

Rent unit price after

2nd Fiscal Period (July 31, 2016)

1st Fiscal Period (January 31, 2016)adjustment

3rd Fiscal Period (January 31, 2017)

2nd Fiscal Period （July 31, 2016)

3rd Fiscal Period （January 31, 2017)

End of June 2018 = 100

30-Jun31-Jul31-Aug30-Sep31-Oct30-Nov

31-Dec31-Jan29-Feb31-Mar30-Apr31-May30-Jun31-Jul31-Aug30-Sep31-Oct30-Nov

31-DecMajor regional cities

100.0

100.0

100.1

100.1

100.1

100.1

100.1

100.1

100.1

100.2

100.2

100.4

100.4

100.3

100.3

100.3

100.4

100.4

100.4

100.5

Other regional cities

100.0

100.0

99.8

99.8

99.9

99.8

99.7

99.8

99.7

99.9

99.7

99.7

99.8

99.8

100.0

100.1

100.4

100.4

100.4

100.4

31-JanGreater Tokyo area

100.0

100.0

99.8

99.8

99.8

99.8

100.0

100.1

100.1

100.3

100.4

100.4

100.5

100.5

100.4

100.4

100.4

100.4

100.4

100.4

Overall

100.0

100.0

99.9

100.0

100.0

100.0

100.0

100.1

100.0

100.2

100.2

100.3

100.4

100.3

100.2

100.3

100.4

100.4

100.4

100.4

(Note) Unit rent after adjustment are calculated using the following formula with the assumed contract period of 4 years.
Unit rent after adjustment={Monthly rent revenue + (Key money revenue ÷ Assumed contract period )} ÷ Contracted area

15

Internal Growth

Increase or Decrease of Unit Rent after adjustment at the Timeof Tenant Replacement
The ratio of increase of unit rent after adjustment at the time of tenant replacement has risen 2.4 %and the ratio of decrease has declined 1.1%
■ Increase or decrease of unit rent after
adjustment at the time of tenant replacement (Note)(composition ratio)
Increase exceeding 5%

Increase of 5% or less

Unchanged

Decrease of 5% or less

80.0%

60.0%

8.3%
23.1%
13.0%

Increase exceeding 5%

Increase of 5% or less

Unchanged

Decrease of 5% or lessDecrease exceeding 5%

Decrease exceeding 5%
100.0%■ Increase or decrease of unit rent after
adjustment at the time of tenant replacement (Note)(Number of units)

7.1%
23.1%
11.7%

400 units
Decrease
30.2%(▲1.1%)

350 units
300 units

Unchanged
11.7%(▲1.3%)

250 units
200 units

40.0%

36.1%

42.3%

20.0%

Increase
58.0%(＋2.4%)

150 units
100 units

Total 338 units

Total 324 units

28
units
78
units

23
units
75
units

Decrease
98 units

44
units

38
units

Unchanged
38units

122
units

137
units

(▲8 units)(▲6 units)

Increase
188 units(±0 units)

19.5%

15.7%

0.0%
2nd Fiscal Period

3rd Fiscal Period(As of July 31, 2016)(As of January 31, 2017)

50 units

66
units

0 units

51
units

2nd Fiscal Period

3rd Fiscal Period(As of July 31, 2016)(As of January 31, 2017)(Note) Unit rent after adjustment are calculated using the following formula with the assumed contract period of 4 years.
Unit rent after adjustment={Monthly rent revenue + (Key money revenue ÷ Assumed contract period )} ÷ Contracted area

16

Internal Growth

Examples of occupancy rate improvement
Leasing taking into account the property features, the market trends in the vicinity and area
characteristics
B-01 S-FORT Shizuoka Hondori
Struggled in the 2nd fiscal period due toappearance of a newly constructed rival
property.
Successfully raised the average occupancy
rate from 79.2% in the 2nd fiscal period to91.1% in the 3rd fiscal period throughsuch efforts as reconfirming the position of
the property in the market among the PMcompany,local brokers and affiliatecompanies; conducting multifaceted
analysis after regular interviews to captureneeds, target groups, etc.; increasing thenumber of viewing cases by setting up amodel unit and gaining further recognition
among increasing number of rivals; andimplementing strategic leasing activities
focusing on taking in the needs oftransferees or those starting a new life bypreparing units with furniture and home
appliances.

■Change in the Occupancy Rates (April 30, 2015 to March 31, 2017)

As of March 31, 2017
Assumed occupancy
rate：100.0%

A-18 S-FORT Aoi 1-Chome

A-23 S-FORT Tsurumai cube

With early improvement in name recognition as the important issue, we
implemented strategic leasing activities such as holding viewing events of themodel unit for brokers and prospective tenants. As a result, the occupancy
rate improved to 100% as of January 31, 2017 from 83.4% at the time ofacquisition by Samty Residential (August 31, 2016).

By conducting leasing activities centering on contacting proven brokers throughutilization of data obtained based on the actual leasing records in the neighboringareas gained through experience with S-FORT Tsurumai marks, the occupancy
rate improved steadily after the acquisition, and reached 100% by not missing
corporate demand accompanying transfers in the autumn.

■Change in the Occupancy Rates (August 31, 2016 to January 31, 2017)■Change in the Occupancy Rates (August 31, 2016 to January 31, 2017)(Note) Change in occupancy rates indicates such from the end of the month in which Samty Residential acquired each property through January 31, 2017.

17

Financial Strategy

Financial highlight
Change in Financial status

End of 1st period

End of 2nd period

Total interest-bearingdebt

17.1 billion yen

Average remaining
borrowing period

3.4 year

3.0 year

3.2 year

2.7 year

Ratio of long-term
debt

93.2%

94.1%

96.5%

98.1%

Ratio of fixed debt

－%

－%

17.8%

18.1%

Total asset based
LTV

50.6%

50.6%

52.5%(Note)

51.5%(January 31, 2016)(July 31, 2016)

1st PO(August 2, 2016)

End of 3rd period

17 billion yen

29.2 billion yen

28.7 billioin yen

Status of Maturity ladder(January 31, 2017)

Breakdown of theinterest-bearing debt (January 31, 2017)
The first investment corporation
bonds (private)1%
2%

Total issue amount: 1 billion yen
Maturity: 4 years
Financial agent: Shinsei Bank, Limited
Underwriter: DBJ Securities Co., Ltd.

3%

1%

SMBC:5.8

2%

Repaind as a early repayment
on August 31, 2016

Aozora Bank:2.7

2%

20%

3%
3%

Risona Bank:2.4
Shinsei Bank :2.0
The Bank of Fukuoka:5.2

6%
9%

6%

The Kagawa Bank:2.0
The Tokyo Star Bank:1.7
Shinwa Bank:1.7

8%

7%

The Bank of Saga:1.0
Kumamoto Bank:1.0

18%(Note)The total asset based LTV at the time of 1st PO is the forecast calculated by dividing interest-bearing
debt by total assets (the amount obtained by adding the total acquisition price related to the acquisitionof the 20 properties newly acquired on August 1 and August 2, 2106, including incidental expenses andconsumption taxes, to total assets at the end of the 2nd fiscal period).

7%

Hiroshima Bank:0.6
The Mie Bank:0.5
Shizuoka Bank:0.5

Regional
banks
53.2％

The Chiba Bank:0.3
Oita Bank:0.2
Investment corporationg bonds:1.0

18

Appraisal Value Status (1)Summary of Appraisal Value
2nd Fiscal Period

Acquisition

No. ofproperties

price(million yen)Book value

1st Fiscal Period(as of July 31, 2016)

3rd Fiscal Period(as of January 31, 2016)and(as of January 31, 2017)

1st PO in August 2016end of 3rd
period(million yen)

(as of May 1, 2016)

Appraisal

Cap

value

Rate

(million yen)Appraisal（％）(Note2)

Cap

Appraisal

Cap

value

Rate

(million yen)（％）(Note2)

value

Rate

(million yen)（％）

(Note1)(Note1)(Note2)【Properties acquired through the
1st Fiscal Period】
Major regional cities

16

20,607

21,36021,675

5.3

22,002

5.2

22,279

5.1

Other regional cities

4

2,777

2,898

2,935

5.8

2,951

5.8

2,986

5.7

Greater Tokyo area

9

7,578

7,823

7,824

4.8

8,022

4.8

8,167

4.7

29

30,96232,08332,434

5.2

32,975

5.1

33,432

5.1

Major regional cities

13

14,164

14,951--

15,172

5.0

15,411

4.9

Other regional cities

5

4,990

5,272

-

-

5,295

5.3

5,317

5.2

Greater Tokyo area

2

1,435

1,507

-

-

1,514

5.4

1,533

5.3

Subtotal

20

20,58921,730--21,981

5.1

22,261

5.0

Total

49

51,55153,81332,434

5.2

54,956

5.1

55,6935.0

Subtotal【Properties acquired through the
3rd Fiscal Period】(1st PO in August 2016)(Note1)The appraisal value and the Cap rate at time of 2nd fiscal period for properties acquired through the 1st fiscal period are based on real estate qppraisal
reports at the time of July 31, 2016 and for properties acquired n the 1st PO in August 2016 are based on the reports at the time of May 1, 2016.
(Note2) Cap Rate is calculated with the weighted average using the cap rate as per the direct capitalization method of the appraisal reports.

20

Appraisal Value Status (2)Appraisal Value Status of owned properties

Cap Rate Status of owned properties■ Change in appraisal value at the 3 rd period■ Change of Cap Rate at end of 3 rd period
No. of properties

No. of properties

Properties

Properties acquired

Properties acquired

throughthroughthe 1st fiscal period

the 3rd fiscal period

1st PO

end of 2nd period

Change inappraisal value(Note1)

Upward25

17

Unchanged

4

3

Downward

00Change in
Cap Rate

Major regional
citiesStatus of

Other regional

unrealized

citiesgain/loss

Greater Tokyo
area
Total

Acquisition

Book value

price end of

end of 3rd

3rd period

period(million yen)(million yen)

37,69036,311

9,700
55,6938,170
9,330
53,813Compared toCompared toCompared to

end of 1st

end of 2nd

1st PO

periodperiod(Note1)

Upward

0

0

0

0

4

2

29

25

18

Unchanged(Note2)

Downward■ Change in Cap Rate of properties acquired in
the 1st and 3 rd fiscal period.
主要地⽅都市（第1期取得物件）
Major
regional cities (acquired in 1st fiscal period)

その他地⽅都市（第1期取得物件）
Other regional cities (acquired in 1st fiscal period)

⾸都圏（第1期取得物件）
GreaterTokyo area (acquired in 1st fiscal period)

第1期取得物件全体
Overall (acquired in 1st fiscal period)

⾸都圏（第3期取得物件）
GreaterTokyo area (acquired in 3rd fiscal period)

第3期取得物件全体
Overall (acquired in 3rd fiscal period)

主要地⽅都市（第3期取得物件）
Major
regional cities (acquired in 3rd fiscal period)（％）

その他地⽅都市（第3期取得物件）
Other regional cities (acquired in 3rd fiscal period)

6.5

Unrealized
gain

6.1
5.9

6.0

(million yen)

5.5

5.8
5.5
5.4

1,378
5.0

8,303

through the 3rd(Note1) The figure is the comparison appraisal value for newly acquired 20 propterties in August
2016, based on the report at the time of May 1, 2016.
(Note2) Cap Rate has declined due to the rise in appraisal value.

(Note1) The figure is the comparison appraisal value for newly acquired 20 propterties inAugust 2016, based on the report at the time of May 1, 2016.

■Comparison of appraisal
value and book value at the 3 rd fiscal periodacquiredthe 1st fiscal period

fiscal period

Compared toCompared toProperties acquired through

5.0

132
369
1,879

5.7
5.4
5.3
5.3

4.9

4.5

IPO
上場時

5.8

End of interim
period
第1期(1st fiscal period)
中間期末

5.2

5.4
5.3
5.2
5.1
5.1
5.0

4.8

End第1期末
of 1stfiscal period

4.8

End of2nd
第2期末
fiscal period(第3期取得物件取得時）(1st PO)

5.3
5.2
5.1
5.1
5.0
4.9
4.7

End
of 3rd
第3期末
fiscal period(Note) Cap Rate is rounded off to one decimal place.
(Note) Cap Rate at time of IPO and end of interim period(1st fiscal period) excluding S-FORT Gakukenmae
which was acquired on October 1, 2015.
(Note)Cap Rate at the end of 2nd period for properties acquired through 3rd fiscal period was the figure for
newly acquired 20 properties in August 2016m based on the report at the time of May 1, 2016.

21

４. Future Growth Strategy

Growth Strategy・Managed Target
Expand the asset size and enhance the quality of the portfolio throughcontinuous acquisitions of the “S-RESIDENCE” properties developed by thesponsor
Acquire properties through sponsor support

1

External
growth strategy

2
34

Acquire properties by taking advantage of the proprietary channels of theasset management company
Implement the differentiated portfolio development policy

2

Enhance the asset value and rate of return through reviewing existing
facilities and other measures
Reduce operating costs

3

Stabilize earnings by utilizing sublease agreement

1

Lengthen borrowing periods and reduce cost of debt

2①

Expand the bank formation3

Acquire credit ratings in the futureInternal
growth strategy

1

Financialstrategy

Change in Asset size・Management Target (Based on acquisition price)
150

100

100
50
0
(billion yen)

30.5
Assets at IPO(28 properties)

0.4

30.9

20.5

51.5

Target of managed
assets:achieving the asset
size of 100 billion yen
within three years from theIPO (June 2015)

Asset acquired in Assets at end of Assets acquired Asset at end of
1st Period

1st Period

through PO in

3rd Period(S-FORT(29 properties)

Aug. 2016(49 properties)

Gakuenmae)(20 properties)

23

External Growth

Pipeline (Properties of which exclusive negotiating rights were granted andproperties under the negotiation for acquisition)■Properties under development or developed by the sponsor,
granted exclusive negotiating rights

Properties under development or developedby the sponsor, and properties owned by
the sponsor (including scheduled to acquire)considered for acquisition

Property Name

Location

Area

date

Higashinari-ku, Osaka144

Jan-17

Major regional cities② S-RESIDENCE Fukaebashi EASTⅡ

Higashinari-ku, Osaka96

Jan-17

Major regional cities③ S-RESIDENCE Shin Osaka WEST

Yodogawa-ku, Osaka224

Jan-17

Major regional cities④ S-RESIDENCE Tanimachi 5- chome

Chuo-ku, Osaka84

Jul-17

Major regional cities⑤ S-RESIDENCE Miyakojima

Miyakojima-ku, Osaka120

Jul-17

Major regional cities⑥ S-RESIDENCE Nagoya Chiyoda

Naka-ku, Nagoya

109

Aug-17

Major regional cities⑦ S-RESIDENCE Minami Horie

Nishi-ku, Osaka154

Sep-17

Major regional cities⑧ S-RESIDENCE Kikawa Higashi

Yodogawa-ku, Osaka187

Jan-18Major regional cities⑨ S-RESIDENCE Esaka Tarumicho

Suita-shi, Osaka75

Jun-17

Other regional cities⑩ S-RESIDENCE Kawasaki Kaizuka

Kawasaki-ku, Kawasaki

43

Jan-17

Greater Tokyo area

⑪ S-RESIDENCE Shinjyuku

Shinjuku-ku, Tokyo

65

Jan-18Greater Tokyo area

⑫ S-RESIDENCE Motoyawata

Ichikawa-shi, Chiba

81

Jan-18Greater Tokyo area

⑬ S-RESIDENCE Nihombashi Nakasu

Chuo-ku, Tokyo116

Mar-18Greater Tokyo area

⑭ S-RESIDENCE Matsudo Honcho

Matsudo-shi, Chiba

52

Mar-18Greater Tokyo area

Numberof units

1,550■ Properties owned by the sponsor
considered for acquisition(including scheduled to acquire)■Properties owned by the third
party, considered for acquisition

Prefectures where the 49 owned
properties are locatedof units

Scheduledcompletion① S-RESIDENCE Fukaebashi EAST

Total: 14 properties

Location

NumberScheduledcompletion

Area

Location

date

Numberuled completio

Area

62

Feb-06

Other regional cities

of units① Showa-ku, Nagoya

56

Jan-17

Major regional cities① Tsu-shi, Mie② Naka-ku, Nagoya

84

Feb-18Major regional cities② Oita-shi, Oita90

Dec-06

Other regional cities③ Nishinomiya-shi, Hyogo

62

Feb-07

Other regional cities③ Chuo-ku, Kumamoto

91

Jan-08Other regional cities④ Chuo-ku, Niigata

83

Feb-18Other regional cities④ Kawaguchi-shi, Saitama

70

Aug-16

Greater Tokyo area

⑤ Toda-shi, Saitama

62

Jan-17

Greater Tokyo area

Total: 4 properties

Total: 5 properties

347(Note) Acquisition of any properties described on this page has not been decided as of the date of this document.

313

24

Investment in Bridge Funds
Invested in silent partnership of a bridge fund (250 million yen) and acquired exclusive negotiating rights
for the 8 properties in the fund.

Bridge Forth GK

Date of acquisition of equity interest
Period for exercisingexclusive negotiating rights

13-Mar-17

Number of properties

8 properties

until March 15, 2020

Appraisal value

9,102 million yen

Exercise price of
exclusive negotiating rights

8,786 million yen(upper limit)■S-RESIDENCE (properties developed by the sponsor)

S-RESIDENCE Yokohama Tammachi

S-RESIDENCE Midoribashi SF
Location

Higashinari-ku, Osaka

Location

Kanagawa-ku, Yokohama

Completion dateOct-16

Completion dateNov-16

Number of rentable units 148 units

Number of rentable units 36 units

Appraisal value

Appraisal value

1,950 million yen
Approx. 2-minute walk from

AccessAccessMidoribashi Station on the Chuo

■S-FORT (properties acquired from sources unrelated to the sponsor)

Location

S-FORT
Toyohira Sanjo

S-FORT
Aoba Uesugi

Tammachi Station on the
Tokyu Toyoko Line

Line and Imazatosuji Line of Osaka
Samty
Nishinomiya Residence

686 million yen
Approx. 6-minute walk from

Trois Bonheur
HonchoCollege Square
Hoya

CQ Residence
Tamagawagakuen

Tentative nameTentative nameTentative nameTentative name:(S-FORT Nishinomiya)(S-FORT Funabashi Tsukada)(S-FORT Hoya)(S-FORT Tamagawagakuen)

Machida-shi, Tokyo

Nishinomiya-shi, Hyogo

Toyohira-ku, Sapporo-shi

Aoba-ku, Sendai-shi

Funabashi-shi, Chiba

Nishitokyo-shi, Tokyo

Completion dateMar-09Mar-08

Oct-07Mar-08Mar-07

Feb-08

Number of

102 units

63 units

66 units

117 units

60 units

60 units

1,920 million yen

Appraisal value

Access1,480 million yen

785 million yen

967 million yen

Approx. 3-minute walk fromApprox. 8-minute walk fromApprox. 3-minute walk from

Nishinomiya Station on the

Kikusui Station on the Tozai

Kita-Yobancho Station on the

Hanshin Main Line of Hanshin

Line of Sapporo Municipal

Namboku Line of Sendai

Electric Railway

SubwayMunicipal Subway

Approx. 6-minute walk from
Tsukada Station on the Noda
Line of Tobu Railway(Note) The above tentative names are names planned to be used when Samty Residential acquired the properties.

712 million yen

602 million yen

Approx. 10-minute walk fromApprox. 4-minute walk from

Hoya Station on the

Tamagawagakuen-mae

Ikebukuro Line of Seibu

Station on the Odawara Line

Railwayof Odakyu Railway

25

Internal Growth

Setting up of model units with furniturefrom major furniture brands creating a unified atmosphere
Presented ideas for the interior using furniture from major furniture brands
which are popular among various age groups■Presented ideas of high-quality lifestyles to prospective tenants after move-in by setting up a model unit
suitable for each property■Enabled early tenant sign-up by differentiating the property from other competitive properties and showcasing
such features to brokers

Major furniture andinterior brands inJapan and abroad

Company Bʼs plan:
S-FORT Gakuenmae, etc.

Company Aʼs plan:
S-FORT Rokuban-cho, etc.
Appeal to working
adults by setting welldesigned furniture
suited to the layout
and creating an“attractive property.”Company Cʼs plan:
S-FORT Nishifunabashi
Produce a space likethat in a designer
property by placing
simple furniturehighly popular among
young working adults
and accenting withsmall items.

Take in much of
relocation demand by
setting furniture thattakes advantage ofmore open living
spaces and showcasing
properties with suchappeal.
Number of units
that received

Property name

Occupancy rate at the time ofOccupancy rate after

application after model units introduction start

introduction of model units

introduction of(as of Feb. 28, 2017) (Note)/time of introduction

model units
Company A

Average vacantperiod before
introduction ofmodel units

Period taken to
receiveapplications after
introduction ofmodel units

A-10 S-FORT Rokuban-cho

5 units

93.1% (July 2016)

100.0%

183 days

55 days

A-18 S-FORT Aoi 1-Chome

9 units

81.5% (October 2016)

100.0%

121 days

44 days

A-16 S-FORT Gakuenmae
Company B B-01 S-FORT Shizuoka Hondori

C-01 S-FORT Maita Koen
Company C C-07 S-FORT Nishifunabashi

6 units

87.4% (July 2016)

94.7%

91 days

65 days

6 units

78.6% (July 2016)

96.4%

93 days

54 days

10 units

88.9% (August 2016)94.2%

116 days

42 days

1 units

92.0% (December 2016)

96.9%

81 days18 days(Note) Occupancy rates after introduction of model units are assumed occupancy rates as of February 28, 2017.

26

Internal Growth

Cost Reduction with LED lighting, Change of Power Suppliers, Etc.
Took various cost reduction measures that suited the property featuresand local environment■Cost reduction through introduction of LED lighting■ Cost reduction by changing power suppliers
Reviewed power suppliers of each property and reduced costby 1,764 thousand yen (annual) for the entirety of the 31
properties that changed power suppliers

Property which introduced

Reduced utilities expenses amount

LED lighting(annual) (thousand yen) (Note 2)

A-06 S-FORT Takamiya
Average reduction rate for

Before changing power
Property namesuppliers(annual) (thousand yen) (Note 1)

After changing power suppliers

properties changing power(annual) (thousand yen) (Note 1)

suppliers(annual) (thousand yen)

(Note 1)

A-04 S-FORT Chikushi Dori

1,188

1,079

B-06 S-FORT Utsunomiya

1,025

928

6.1%

C-11 S-FORT Sagamihara

1,008

907

(-1,764 thousand yen)

Total of 31 properties

28,80527,041

A-11 S-FORT Nakajima Koen

-267
-1,422

A-15 S-FORT Katahira-613

A-18 S-FORT Aoi 1-Chome-523

C-01 S-FORT Maita Koen

-108

C-08 S-FORT Maihama-240

C-11 S-FORT Sagamihara-63

Total of 7 properties

Introduced LED lighting
in the 7 properties on
the left. Reduced
utilities expenses by
3,237 thousand yen(annual).
Reduction rate of annual
usage fees after introducing
LED lighting(annual) (%) (Note 2)

46.1%(-3,237 thousand yen)

-3,237

A-11 S-FORT Nakajima Koen
■ Real-time monitoring of snowfall to control operation of snow-melting system
Fuel consumption (liter)

Last season(Nov. 2015 – Jan. 2016)

This season(Nov. 2016 – Jan. 2017)
Reduction rate

November

DecemberJanuary

Total

-

2,683

5,360

8,043

1,123

3,700

3,010

7,833

-

37.9%

-43.8%-2.6%

The amount of snowfall this season was around 35% more thanthat of last season. However, fuel consumption decreased 2.6%
due to the introduction of the system, and charges only
increased by around 20,000 yen this season despite an averageof around 4 yen in increase in unit fuel price.
(Note 1) The reduced amounts after changing power suppliers are forecast amounts provisionally calculated based on the presentation materials provided by the new power suppliers.
(Note 2) The reduced amounts after introducing LED lighting are forecast amounts calculated based on the actual amounts of usage before introduction.

27

Financial Strategy

Financial Highlight
Basic Policy
Equity Finance

The issuance of new investment units will be determined based on the financial environment
and with consideration given to dilution of unitholder value, following a comprehensive reviewof the profitability of the managed asset, timing of the acquisition, LTV level, and repayment
plan for interest-bearing debt, among other factors.

Debt Finance

Debt financing through execution of borrowings and issuance of investment corporation bonds(including short-term investment corporation bonds) will be carried out with consideration
given to the balance between financing flexibility and financial stability.

LTV

LTV levels will be determined with close consideration given to financial capacity.
LTV levels will generally be kept between 45% and 55%, while the ceiling will be set at 60%.

Future Action Plans
Develop new banking relation shipincluding regional banks

Diversify the source of financing acrossJapan as well as geographicaldiversification of assets

Extend remaining borrowing period withconsideration given to costs

Diversify repayment dates

Acquire credit ratings in the future29

５. Operating Results and Distribution Information

Management Forecast of the 4th Fiscal Period and the Actual Results of the 3rd
Fiscal Period, Comparison with the initial Forecast of the 4th Fiscal Period(million yen)

Assumptions for Management
Forecast of the 4th Fiscal Period

3rd fiscal
3rd fiscal period

4th fiscal period

4th fiscal period

Results

Initial Forecast

Forecast(January 2017)(July 2017)(July 2017)

period Results

Comparison

and Changewith 4th fiscalfrom 4th fiscal

period initialperiodforecast

Forecast
Operating revenue

1,806

Real estate rentalrevenue

1,791

1,797

-8

6

1,805

1,791

1,797

-7

6

Operating expenses

956

1,051

1,052

95

0

Real estate rental expenses

766

815

809

43

-5

260

257

255

-4

-1

70

117

117

46

0

Depreciation

434

440

436

1

-4

Real Estate rental income

1,040

975

988

-52

12

Other operating expenses

190

235

242

52

6

76

127

127

51

0

114

108

115

0

6

Operating income

849

740

745

-104

5

Non-operating income and loss

-243

-150

-148

95

1

Ordinary income

606

589

596

-9

6

Corporate tax, etc.

0

1

1

0

-

605

588

595

-9

6

2,645 yen

2,625 yen

2,625 yen

-20 yen-2,138 yen

2,081 yen

2,105 yen

-33 yen

24 yen507 yen544 yen520 yen

13 yen-24 yenMiscellaneous
rentalexpenses
Taxes and
dues

Asset
management■Calculation period
The 4th fiscal period：
Feburary 1, 2017 to July 31, 2017
■Assets
The 4th fiscal period：49 properties(Number of acquired properties
as of the date of this document）■Period average month-end occupancy rate
The 4th fiscal period: 95.5%■Balance of interest-bearing debt
at end of period
The 4th fiscal period：28,750 million yen■No. of outstanding units
The 4th fiscal period: 283,000 units(Number of investment units issued andoutstanding as of the date of this document)■Capital expenditures (planned amount)
The 4th fiscal period：55 million yen

fees
Other
expenses

Net income

Distribution per unit
Distribution per unit
(Not including distribution in excess of earnings)

Distribution in excess of earning per unit

(Note) The initial forecast of 4th fiscal period is the figure in “Notice Concerning Forecasts of Management Status and Distributioon per unit for Fiscal PeriodEnding January 2017 and Fiscal Period Ending July 2017” announced on July 11, 2016 and “Summary of Financial Results for Fiscal Period Ended July 2016”
announced on September 14, 2016.

Vs. 3rd fiscal period Results■ Real estate rental income
Differences arose because fixed asset tax
for acquired 20 properties in 3rd fiscal
period is recorded as an expenses.
+46 million yen■ Other operating expenses
Differences arose becase asset management
fees has risen due to the acquisitionin 3rd fiscal period. +51 million yen■ Non-operating income and loss
Differences arose because new borrowing
related expenses in 3rd fiscal period has
decreased. -95 million yen

32Outlook of Distribution(1) Continuing to conduct distribution that exceeds initial forecast every fiscal period since listing(2) Raising distribution in normal periods from 2,478 yen forecasted upon listing to 2,625 yen
Initial distribution

Distribution per unit

当初予想分配⾦
forecast (including

利益分配⾦(Not including

distribution in excessof earnings)

distribution in excessof earnings)■Distribution policy

Distribution in excess
利益超過分配⾦
of earnings per unit

Distribution at normal period+147 yen（+5.9％）

Maintain/improve
distribution

2,618

Distribution withpayout ratio aiming
for around 70%

592

(yen)

2,645

2,625

507

520

1,810
776

2,138

2,026
1,384

予想

実績

(January 2016)(Actual)

49.9%

2,105

1,034

(1st Period) Distribution

Payout ratio

2,625

2,600

2,478

55.6%

(2nd Period) Distribution

予想(July 2016)実績(Normal period)(Actual)

71.1%

70.4%

(3rd Period) Distribution

予想

実績(January 2017)(Actual)

72.0%

72.0%

(4th Period) Distribution

予想 (July 2017)
予想(Normal period)(Forecast)

72.2%

72.0%

33

Distribution Policy (1) Due to the characteristics nature of the portfolio, the ratio of depreciation to property acquisition price tends
to be large, Samty Residential aims to increase fund efficiency through optimal fund allocation andimprovement of unitholder value over the medium to long term.
 In regards to the 3 rd and the 4 th Fiscal Period, Samty Residential determined that it is appropriate to conduct
distributions in excess of earnings in consideration of the market environment and financial conditions.
 Amount of distribution amount are determined based on the target payout ratio aiming for 70%.

Cash Management Strategy

Based on the characteristics of the portfolio, Samty Residential will optimally distribute free cash flow after
allocating funds to reserves for capital expenditures to maintain the building functions, etc., working capitaland such, in accordance with the situations of the time.

Cash will be allocated based on a comprehensive review of the external economic
environment, real estate market conditions, and financial condition of Samty Residential

Capital expenditures to maintain thebuilding functions, etc.

Securement of working
capital on hand, etc.

Optimally allocate the free cash to each measure listed below after the fund allocation mentioned above

Return to unitholders including
distribution in excess of earnings
Reinforcement of the financial base by
reducing interest-bearing liabilities, etc.

Investment that should help enhance
the portfolioʼs profitability enhance34

Distribution Policy (2)Distributions in Excess of Earnings

Samty Residential may decide the amount of each fiscal period's cash distributions in excess of earnings, based on the
payout ratio as our management result. However, when deciding distribution in excess of earnings, the following
requirements are to be fulfilled, taking into account Samty Residentialʼs financial conditions, amount of future capital
expenditures, etc., in order to avoid undermining unitholder value.
■Conceptual diagram of distributions in excess of earnings
Expensesrelated torent business,sales, generalandadministrativ
e expenses,
non-operating
expenses, etc.

(1) Determination of distributions
With a view to enhancing unitholder value
over the medium to long term, distributions inexcess of earnings are authorized when
Samty Residentialʼs portfolio meets the below
conditions.

Total
appraisalvalue(2) Determination of amountAmount of distributions (including distributions inexcess of earnings) are determined for each fiscal
period based on future capital expenditures, capitaldemand, etc.

RentalrevenueCAPEX for thefollowing fiscal
periodPayout ratio = Total distribution amount (including distributions
in excess of earnings) / (Net income + Depreciation)）
Depreciation

Total adjusted
book value(Note)Net income

Distribution
in excess ofearnings
Distribution(profits)

Distribute payout ratio
aiming for 70%
However, distributions in excessof earnings will be up to 35% ofdepreciation

Note: Excluding amount equivalent to incidental expenses upon acquisition

Out look of cash flow

■4th fiscal period (July 2017)
1,500
1,000
500
0

(million yen)

FFO
1,031

Capex
55

AFFO
975

Dipreciation
436
Net income
595

FFO

232
Distributions
in excess of earnings
147
Distributions
595

CAPEX

AFFO

Total
cash distribution

Cash available
for use35

６. Appendix

Characteristics of Regional Residence Investments
Household growth rate
(Year 2000 = 100%)

Growth rate from2000 to 2014＋19.8%

Number of New Housing Starts(Year 2000＝100%）（%）＋17.8%＋22.5%＋18.2%＋16.7%＋12.5%＋16.1%＋15.6%＋14.9%＋25.9%
Source: Prepared by Sumitomo Mitsui Trust Research Institute based on “Basic
Resident Registers,” Ministry of Internal Affairs and Communications

Net Migration

Source: Prepared by Samty Asset Management based on “Housing Starts Statistics (yearly),”(house for rent/reinforced concrete structure, steel framed reinforced concrete structure/residential
complex)
Ministry of Land, Infrastructure, Transportation and Tourism, Information Policy Division,
Construction Research and Statistics Office

Status of Investment into Residencesby Listed J-REITs(number of buildings)

Others407
26%

Others
351
24%

Aichi
92
6%
Osaka
93
7%

Tokyo
919
63%
（2015:1,455 buildings）

Aichi
102
6%
Osaka
102
6%

Tokyo
985
62%
（2017:1,596 buildins）

Source: Prepared by Samty Asset Management based on ARES J-REIT Property Database
Source: Prepared by Sumitomo Mitsui Trust Research Institute based on “Basic
Resident Registers,” Ministry of Internal Affairs and Communications(Note）Total of each listed J-REITʼs owned residences at the end of January 2015
(1,455 buildings) and end of the most recent fiscal period as of February 10, 2017(1,596 buildings).

37

Overview of the Samty Group
History and Operating Results
History

Dec.
1982

Sep.
2002

Samty Development Co., Ltd.
(currently Samty Co., Ltd.)established at Nakajima 1-chome,
Higashi-Yodogawa Ward, Osaka
City
Launched the real estate
securitization business andconducted real estate securitizationthat was the first such operation
approved by the Kinki Local
Finance Bureau

Jun.
2012
Nov.
2012
May
2015

Mar.
2005

Launched the S-Residence seriesof rental condominiums for realestate funds and REITs

Oct.
2015
Mar.
2016

Jul.
2007

Shares listed on the Osaka
Securities Exchange's Hercules
market (currently the Tokyo Stock
Exchange's JASDAQ Standard).

Feb.
2011
Dec.
2011

Established Fukuoka Branch OfficeAcquired shares in Samty AssetManagement Co., Ltd. to make ita wholly-owned subsidiary

We will engage in strategic investment in regional metropolitan areas, development ofcondominiums and expansion of our hotel development business. We plan to sell ourdevelopment properties to Samty Residential Investment Corporation (SRR) and will utilize abusiness model centered on SRR in the aim of establishing a fee business. We will also put
together a financial strategy to maintain capital efficiency and establish a financial base.

【Key StragtegyⅢ】
Roll-out of hotel
development business

Established Sapporo Branch Office
Moved up to the First Section of
the Tokyo Stock Exchange.
Established Nagoya Branch Office【Financial
Strategy】【Key StragegyⅡ】
Strategic Investment inregional metropilitan
area

Maintain capital efficiency
Establish financila base

【Key StrategyⅠ】

Established Tokyo Branch Office

Development ofbusiness model
centered on Samty
Residential Investment
Corporation

Established Samty Kanri Co., Ltd.
that is engaged in property
management businessChange in the Operating Results of the Samty Group (Consolidated Basis)(million yen)

Revision of Samty Groupʼs “Challenge
40” medium-term management plan

(million yen)

Consolidation of property
management functions

With an aim to reinforce promotion of property management (PM) outsourcing, PM functions ofSamty Group were consolidated/reorganized to Samty Property Management Co., Ltd. on
December 1, 2016. The company accommodates to a broad range of condominium management
needs in the field of for-sale condominiums, rental condominiums and building maintenance,
capitalizing on the accumulated track record and experience in management service of for-salecondominiums.
Main service features of Samty Property Management(Leasing management service system)

Source: Financial Results (from the fiscal year ended November 2009 to the fiscal year ended November 2016)of Samty Co., Ltd.

Search: Samty Property Management website

38

Condominium Brand “S-RESIDENCE”
in Samty Residentialʼs Portfolio
S-RESIDENCE Brand

Washstand with modern taste

 “S-RESIDENCE” is a high quality, rental condominium brand developed by
Samty Group since 2005.

Double lock with dimple key
for high security

 “S-RESIDENCE” is a brand characterized by the opulent utilization offieldstones, entrances with open spaces, luxury hotel-like indirect lighting andcorridors, high quality plumbing which display a luxuriousness, etc., possesshigh quality designs which appeal mainly to students, workers, etc., andparticularly the high relative ratio of female tenants.

S-RESIDENCE
Shin Osaka EkimaeHigh-classelevator hall

Serene and massive
entrance hall

Bathroom heater/dryer/
ventilation system
Hands-freeassuring comfort whenintercomtaking a bath in winterwith a monitor
or drying clothes on rainy days

Bright and stylish
kitchen and bathroom

Safe flat flooringby eliminating difference inlevel on the floor to prevent trips
Flat-designed floors

Self-locking system that securesdaily peace of mind and safety
Security cameras that are effective
for preventing vandalism andcrimes are installed in the building
and elevators
Convenient home-delivery box forreceiving parcels around-the-clock
Toilet with variety of functions
such as self-cleaning and heater

Imageillustration

Cushioned flooring withexcellent sound-absorption 39

Portfolio List (1) Major Regional Cities
List of acquired properties(Number of acquired properties as of the date of this document ）Acquisition

Property

Property Name

No

LocationType

Appraisal Value

Appraisal Number ofat End of Period NOI yieldPrice(million yen)(million yen)rentable
units

(%)

Major regional cities
A-01

S-FORT Shin Osaka ravir

Yodogawa-ku, Osaka

Single / Compact

635

667

5.4

49

A-02

S-FORT Sanno

Nakagawa-ku, Nagoya

Single / Compact

2,890

3,150

6.1

230

A-03

S-FORT Fujigaoka

Meitou-ku, Nagoya

Single

750

807

6.0

80

A-04

S-FORT Chikushi Dori

Hakata-ku, Fukuoka

Compact

1,170

1,190

5.5

90

A-05

S-FORT Fukuoka Kencho Mae

Hakata-ku, Fukuoka

Single

979

1,080

5.8

104

A-06

S-FORT Takamiya

Minami-ku, Fukuoka

Single / Commercial

794

826

5.5

82

A-07

S-FORT Tsutsujigaoka Koen

Miyagino-ku, Sendai

Single / Compact / Family

1,340

1,410

5.7

94

A-08

S-RESIDENCE Namba Briller

Naniwa-ku, Osaka

Single

2,020

2,270

5.4

154

A-09

S-FORT Tsurumai marks

Naka-ku, Nagoya

Family

1,020

1,180

5.7

42

A-10

S-FORT Rokuban-cho

Atsuta-ku, Nagoya

Single / Commercial

722

762

5.3

56

A-11

S-FORT Nakajima Koen

Chuo-ku, Sapporo

Compact / Family

1,590

1,640

5.7

75

A-12

S-FORT Hokudai Mae

Kita-ku, Sapporo

Compact / Commercial

690

744

5.8

59

A-13

S-RESIDENCE Kobe Isogamidori

Chuo-ku, Kobe

Single / Compact

2,470

2,740

5.4

166

A-14

S-FORT Kyoto Nishioji

Shimogyo-ku, Kyoto

Single / Commercial

745

801

5.9

71

A-15

S-FORT Katahira

Aoba-ku, Sendai

Single / Compact

2,330

2,530

5.9

191

A-16

S-FORT Gakuenmae

Toyohira-ku, Sapporo

Single / Compact

462

482

5.9

48

A-17

S-RESIDENCE Shin Osaka Ekimae

Higashi Yodogawa-ku, Osaka

Single / Compact

2,489

2,710

5.3

167

A-18

S-FORT Aoi 1-Chome

Higashi-ku, Nagoya

Compact

1,080

1,130

5.2

54

A-19

S-FORT Aoi

Higashi-ku, Nagoya

Family

870

976

5.6

28

A-20

S-FORT Kurumamichi

Higashi-ku, Nagoya

Family

400

427

5.7

19

A-21

S-FORT Kamiotai

Nishi-ku, Nagoya

Family

720

741

5.6

40

A-22

S-FORT Tsurumai arts

Naka-ku, Nagoya

Family

680

767

5.6

28

570

647

5.6

32

1,900

2,040

5.4

135

A-23

S-FORT Tsurumai cubeNaka-ku, Nagoya

Compact / Family

A-24

S-FORT Fukuoka Higashi

Hakata-ku, Fukuoka

Compact

A-25

S-RESIDENCE Kobe Motomachi

Chuo-ku, Kobe

Single / Compact

1,200

1,360

5.7

81

A-26

S-FORT Kobe Kaguracho

Nagata-ku, Kobe

Single

1,858

2,120

6.2

168

A-27

S-FORT Nijo-jo mae

Nakagyo-ku, Kyoto

Single / Compact / Family

812

858

5.1

47

A-28

S-FORT Chion-in mae

Higashiyamaku, Kyoto

Compact / Family / Commercial

500

525

5.0

18

A-29

S-FORT Miyamachi

Aoba-ku, Sendai

Single / Compact

1,085

1,110

5.4

91

(Note) Appraisal values is the figure as of the end of January 2017.

40

Portfolio List (2) Other Regional Cities / Greater Tokyo Area
List of acquired properties(Number of acquired properties as of the date of this document ）PropertyNo

Acquisition
Property Name

Location

Type

Price

Appraisal Value

Appraisal Number ofat End of Period NOI yield(million yen)(million yen)rentable
units

(%)

Other regional cities
B-01

S-FORT Shizuoka HondoriAoi-ku, Shizuoka

Compact

B-02

S-FORT Suminodo

Daitou-shi, Osaka

Single / Compact

297

305

6.0

28

1,420

1,540

5.9

126

B-03

S-FORT Yokkaichi motomachi

Yokkaichi-shi, Mie

Compact

480

522

6.7

54

B-04

S-FORT Suzuka

Suzuka-shi, Mie

Compact

580

619

6.9

69

B-05

S-RESIDENCE Esaka

Suita-shi, Osaka

Single / Compact

2,323

2,500

5.3

138

B-06

S-FORT Utsunomiya

Utsunomiya-shi, Tochigi

Compact

612

642

6.0

52

B-07

S-FORT Yokkaichi Nishishinchi

Yokkaichi-shi, Mie

Compact / Family

630

711

6.6

60

B-08

S-FORT Saga Honjo

Saga-shi, Saga

Compact / Office

1,050

1,070

6.2

127

B-09

S-FORT Saga Idaimae

Saga-shi, Saga

Compact

375

394

6.5

46
70

Greater Tokyo area

Total

C-01

S-FORT Maita Koen

Minami-ku, Yokohama

Single / Compact

987

1,030

5.2

C-02

S-FORT Nihombashi Hakozaki

Chuo-ku, Tokyo

Single / Compact

925

1,030

4.7

36

C-03

S-FORT Itabashi Shimura

Itabashi-ku, Tokyo

Compact

645

678

4.8

32

C-04

S-FORT Shiomi

Koto-ku, Tokyo

Single

866

998

5.1

52

C-05

S-FORT Noborito

Tama-ku, Kawasaki

Single

666

694

4.8

40

C-06

S-FORT Shonan Hiratsuka

Hiratsuka-shi, Kanagawa

Single

818

920

5.6

66

C-07

S-FORT Nishifunabashi

Funabashi-shi, Chiba

Single / Compact

732

759

5.3

47

C-08

S-FORT Maihama

Urayasu-shi, Chiba

Single

1,130

1,190

5.4

83

C-09

S-FORT Ichikawa

Ichikawa-shi, Chiba

Single / Commercial

809

868

5.2

51

C-10

S-RESIDENCE Yokosuka Chuo

Yokosuka-shi, Kanagawa

Single / Nursery

850

925

6.1

25

C-11

S-FORT Sagamihara

Sagamihara-shi, Kanagawa

Single

585

608

5.3

53

51,551

55,6935.6

3,754

49 properties(Note) Appraisal values is the figure as of the end of January 2017.

41

Income and Expenditure by Property（1）Fiscal Period Ending January 2017 (As of January 31, 2017)（１）Area category

Major regional cities（２）Property No.

A-01
S-FORT Shin Osaka（３）Property nameravir（４）Acquisition date
（５）
Price
information（６）
Leasing
information

Apr-15, 2015

Acquisition price(million yen)

Composition rate

Apr-15, 2015

Apr-15, 2015

2,890

S-FORT Chikushi

S-FORT Fukuoka

DoriKencho Mae

May-01, 2015

750

A-06

Apr-15, 2015

1,170

A-07

S-FORT Takamiya

May-01, 2015

979

S-FORT
Tsutsujigaoka Koen
Apr-15, 2015

794

1,340

1.2

5.6

1.5

2.3

1.9

1.5

2.6

2,984

767

1,201

1,016

816

1,395

(㎡)

1,290.84

8,138.40

1,960.00

3,706.56

2,566.72

2,105.13

3,609.49

Leased area(㎡)

1,264.70

7,815.60

1,935.50

3,666.00

2,542.04

2,005.77

3,471.87

Occupancy rate

(%)

98.0

96.0

98.8

98.9

99.0

95.3

96.2

184

184

184

184

184

184

184

21,464112,360

27,83542,07833,547

28,68250,706

Real estate rental revenues

20,020104,006

26,081

38,551

31,70627,03945,100

Other lease business revenues

1,444

8,353

1,754

3,526

1,840

1,642

5,606

6,045

21,710

7,423

11,032

6,832

5,908

12,381

Management service fee

1,201

5,697

1,350

1,497

1,433

1,234

2,045

Taxes and dues

1,309

8,174

1,985

2,981

2,430

2,011

2,863

Utilities expenses

231

785

346

490

365

379

1,613

1,555

3,778

1,142

2,717

517

1,102

2,905

33

179

46

94

62

61

83

Total rentable area

(3) Regal estate rental expenses(thousand yen)

information

S-FORT Fujigaoka

A-05

650

(thousand yen)expenses

S-FORT Sanno

A-04

(%)

(2) Total real estate rental income

Income andA-03(million yen)

Balance sheet amount(1) Number of operating days

（７）

635

A-02

Repair Cost
Insurance expenses
Trust fees
Other lease business expenses

303

303

303

303

303

303

303

1,410

2,790

2,247

2,946

1,719

815

2,566

(4) NOI(＝(2)-(3))(thousand yen)

15,41890,64920,411

31,046

26,714

22,77338,325(5) Depreciation(thousand yen)

5,751

26,696

10,163

10,723

9,150

8,731

12,305

9,666

63,953

10,24820,322

17,563

14,04226,019

-

122

-

-

1,783

-

-

15,41890,526

20,411

31,04624,931

22,77338,325(6) Real estate rental income（＝(4)-(5)）(thousand yen)
(7) Capital Expenditures(thousand yen)(8) NCF（＝(4)-(7))(thousand yen)42

Income and Expenditure by Property（2）Fiscal Period Ending January 2017 (As of January 31, 2017)（１）Area category

Major regional cities（２）Property No.
（３）Property name（４）Acquisition date
（５）
Price
information（６）
Leasing
information

Acquisition price(million yen)

Composition rate

A-12

A-13

A-14

S-RESIDENCE

S-FORT Tsurumai

S-FORT Rokuban-

S-FORT Nakajima

S-FORT Hokudai

S-RESIDENCE Kobe

S-FORT Kyoto

Namba Briller

marks

cho

Koen

Mae

Isogamidori

NishiojiJul-01, 2015

Jul-01, 2015

Jul-01, 2015

Jul-01, 2015

2,020

Jul-01, 2015

1,020

Jul-01, 2015722

Jul-01, 2015

1,590

690

2,470

745

3.9

2.0

1.4

3.1

1.3

4.8

1.4

1,091

743

1,653

727

2,561

777

Total rentable area(㎡)

3,631.60

2,772.00

1,833.29

5,292.65

2,287.22

4,372.45

1,657.31

Leased area(㎡)

3,512.66

2,772.00

1,802.00

5,098.42

2,214.66

4,323.95

1,636.15

Occupancy rate

(%)

96.7

100.0

98.3

96.3

96.8

98.9

98.7

184

184

184

184

184

184

184

67,92938,397

23,17461,54425,17583,726

26,473

Real estate rental revenues

64,10034,173

21,73857,431

24,263

77,13924,782Other lease business revenues

3,829

4,224

1,436

4,113

912

6,587

1,690

13,039

5,040

5,418

17,214

4,589

13,8137,510

Management service fee

2,590

1,667

1,232

2,710

1,032

2,712

1,592

Taxes and dues

5,016

1,679

1,672

4,792

1,619

5,423

1,452

Utilities expenses

809

278

239

1,609

425

398

1,098

1,894

251

933

5,019

406

1,892

1,285

105

56

39

122

53

117

45

(3) Regal estate rental expenses(thousand yen)

information

A-11

2,095

(thousand yen)expenses

A-10

(%)

(2) Total real estate rental income

Income andA-09(million yen)

Balance sheet amount(1) Number of operating days

（７）

A-08

Repair Cost
Insurance expenses
Trust fees
Other lease business expenses

405

303

303

405

303

405

303

2,219

803

997

2,556

748

2,863

1,731

(4) NOI(＝(2)-(3))(thousand yen)

54,89033,356

17,75644,33020,586

69,912

18,963(5) Depreciation(thousand yen)

13,803

9,729

7,445

13,292

5,291

18,371

8,071

41,086

23,627

10,31031,037

15,29451,54010,891

-

1,332

1,228

1,262

-

-

-

54,89032,024

16,52843,06820,586

69,912

18,963(6) Real estate rental income（＝(4)-(5)）(thousand yen)
(7) Capital Expenditures(thousand yen)(8) NCF（＝(4)-(7))(thousand yen)

43

Income and Expenditure by Property（3）Fiscal Period Ending January 2017 (As of January 31, 2017)
Major regional cities（１）Area category（２）Property No.

A-15

A-16

（３）Property name

S-FORT Katahira

S-FORT Gakuenmae

Jul-01, 2015

Oct-01, 2015

（４）Acquisition date
（５）
Price
information（６）
Leasing
information

Acquisition price(million yen)

Composition rate
Balance sheet amount

Chome

Aug-02, 2016

Aug-01, 2016

S-FORT

S-FORT Aoi

S-FORT Kamiotai

Kurumamichi

Aug-02, 2016

1,080

A-21

Aug-01, 2016

870

Aug-01, 2016

400

720

4.5

0.9

4.8

2.1

1.7

0.8

1.4

489

2,608

1,157

941

419

775

Total rentable area(㎡)

5,483.22

1,757.28

4,534.98

2,185.20

1,842.68

1,214.20

2,624.40

Leased area(㎡)

5,483.22

1,565.69

4,509.63

2,185.20

1,842.68

1,214.20

2,427.57

Occupancy rate

(%)

100.0

89.1

99.4

100.0

100.0

100.0

92.5

184

184

184

184

184

184

184

87,884

15,78684,49030,18829,45014,95824,510Real estate rental revenues

82,956

14,42379,494

26,832

28,197

13,832

22,469Other lease business revenues

4,928

1,362

4,996

3,356

1,252

1,126

2,040

15,871

4,281

6,311

9,588

4,047

1,822

4,600

(3) Regal estate rental expenses(thousand yen)expenses

S-FORT Aoi 1-

Osaka Ekimae

A-20

2,389

(thousand yen)

information

S-RESIDENCE Shin

2,489

A-19

(%)

(2) Total real estate rental income

Income and

462

A-18

(million yen)

(1) Number of operating days

（７）

2,330

A-17

Management service fee

4,058

738

3,142

1,487

1,023

906

1,049

Taxes and dues

6,297

1,277

-

-

-

-

-

714

414

646

361

185

146

305

1,968

968

823

3,032

626

516

1,758

Utilities expenses
Repair Cost
Insurance expenses

146

31

93

45

31

24

49

Trust fees

303

283

302

303

-

-

303

2,381

566

1,303

4,358

2,180

228

1,133

(4) NOI(＝(2)-(3))

Other lease business expenses(thousand yen)

72,012

11,50478,17820,59925,402

13,136

19,909(5) Depreciation(thousand yen)

28,0004,646

18,884

7,351

4,836

2,325

6,023

44,012

6,857

59,294

13,24820,566

10,81013,886

405

1,471

-

450

-

985

2,329

71,607

10,03378,17820,14925,402

12,151

17,579(6) Real estate rental income（＝(4)-(5)）(thousand yen)
(7) Capital Expenditures(thousand yen)(8) NCF（＝(4)-(7))(thousand yen)44

Income and Expenditure by Property（4）Fiscal Period Ending January 2017 (As of January 31, 2017)（１）Area category

Major regional cities（２）Property No.
（３）Property name（４）Acquisition date
（５）
Price
information（６）
Leasing
information

A-26

A-27

S-FORT Tsurumai

S-FORT Tsurumai

S-FORT Fukuoka

S-RESIDENCE Kobe

S-FORT Kobe

arts

cube

HigashiMotomachi

KagurachoAug-02, 2016

Aug-02, 2016

Aug-02, 2016

Aug-02, 2016

Aug-02, 2016

A-28

S-FORT Nijo-jo mae

Aug-02, 2016

S-FORT Chion-inmae
Aug-02, 2016

680

570

1,900

1,200

1,858

812

500

(%)

1.3

1.1

3.7

2.3

3.6

1.6

1.0

Balance sheet amount(million yen)

741

602

2,015

1,260

1,939

842

520

(㎡)

1,988.56

1,460.64

5,584.41

2,169.67

4,900.32

1,735.95

1,049.01

Leased area(㎡)

1,988.56

1,460.64

5,507.45

2,169.67

4,900.32

1,735.95

1,049.01

Occupancy rate

(%)

100.0

100.0

98.6

100.0

100.0

100.0

100.0

184

184

184

184

184

184

184

24,347

19,95462,89639,36071,582

23,124

14,718

Real estate rental revenues

22,96518,72956,42438,94867,134

23,123

14,718Other lease business revenues

1,382

1,224

6,472

412

4,447

0

0

2,242

4,077

10,487

2,258

9,435

556

470

1,239

1,154

2,140

1,640

2,366

-

-

Total rentable area

(3) Regal estate rental expenses(thousand yen)Management service fee

information

A-25(million yen)(thousand yen)expensesA-24

Composition rate(2) Total real estate rental income

Income andA-23

Acquisition price(1) Number of operating days

（７）

A-22

Taxes and dues

-

-

-

-

-

-

-

Utilities expenses

160

126

481

244

629

-

-

Repair Cost

74

85

5,133

-

3,043

220

138

Insurance expenses

33

29

100

48

77

28

18

Trust fees
Other lease business expenses

-

301

302

302

302

302

302

734

2,380

2,330

22

3,016

5

11

(4) NOI(＝(2)-(3))(thousand yen)

22,104

15,87752,40937,102

62,14722,567

14,247(5) Depreciation(thousand yen)

4,447

4,062

13,246

9,879

12,175

5,955

3,539

17,656

11,815

39,162

27,222

49,971

16,612

10,708

-

362

499

-

534

392

266

22,104

15,51551,90937,102

61,612

22,175

13,981(6) Real estate rental income（＝(4)-(5)）(thousand yen)
(7) Capital Expenditures(thousand yen)(8) NCF（＝(4)-(7))(thousand yen)45

Income and Expenditure by Property（5）Fiscal Period Ending January 2017 (As of January 31, 2017)（１）Area category

Major regional cities（２）Property No.

A-29

B-01

B-02

（３）Property name

S-FORT Miyamachi

S-FORT Miyamachi

S-FORT Suminodo

Aug-02, 2016

Apr-15, 2015

Apr-15, 2015

（４）Acquisition date
（５）
Price
information（６）
Leasing
information

Acquisition price(million yen)

Composition rate
Balance sheet amount

S-FORT Suzuka

Motomachi
Jul-01, 2015

1,420

S-RESIDENCE Esaka S-FORT Utsunomiya

Jul-01, 2015
480

B-06

Aug-02, 2016
580

Aug-02, 2016

2,323

612

2.1

0.6

2.8

0.9

1.1

4.5

1.2

307

1,457

514

618

2,420

647

Total rentable area(㎡)

2,213.12

911.403,332.16

1,691.28

2,286.69

3,739.30

2,330.64

Leased area(㎡)

1,998.08

878.85

3,174.06

1,660.83

2,127.81

3,622.69

2,105.37

Occupancy rate

(%)

90.3

96.4

95.3

98.2

93.1

96.9

90.3

184

184

184

184

184

184

184

35,95910,94953,033

21,892

25,97275,69623,094

Real estate rental revenues

33,555

10,17046,43118,80622,201

70,61821,708Other lease business revenues

2,404

779

6,602

3,086

3,771

5,078

1,385

7,801

4,988

10,193

6,100

7,427

6,950

5,051

1,713

1,096

1,811

1,418

1,623

2,445

1,424

-

851

2,894

1,118

1,672

-

-

(3) Regal estate rental expenses(thousand yen)Management service fee
Taxes and dues

expenses

S-FORT Yokkaichi

B-05

1,126

(thousand yen)

information

297

B-04

(%)

(2) Total real estate rental income

Income and

1,085

B-03

(million yen)

(1) Number of operating days

（７）

Other regional cities

Utilities expenses

1,242

138

1,738

700

1,120

273

413

Repair Cost

3,874

1,061

1,949

1,327

2,234

1,442

1,718

Insurance expenses

34

25

88

38

54

80

42

Trust fees

302

303

303

303

303

302

302

634

1,511

1,407

1,192

418

2,405

1,149

(4) NOI(＝(2)-(3))

Other lease business expenses(thousand yen)

28,157

5,961

42,83915,791

18,54568,746

18,043(5) Depreciation(thousand yen)

8,783

3,133

14,875

6,206

7,284

14,7605,173

19,374

2,827

27,964

9,585

11,26053,985

12,869

171

-

121

-

-

-

230

27,985

5,961

42,71815,791

18,54568,746

17,812(6) Real estate rental income（＝(4)-(5)）(thousand yen)
(7) Capital Expenditures(thousand yen)(8) NCF（＝(4)-(7))(thousand yen)46

Income and Expenditure by Property（6）Fiscal Period Ending January 2017 (As of January 31, 2017)（１）Area category

Other regional cities（２）Property No.

B-07

Price
information（６）
Leasing
information

Aug-02, 2016

Aug-02, 2016

Apr-15, 2015

C-04

S-FORT Nihonbashi

S-FORT Itabashi

Hakozaki

ShimuraJul-01, 2015

Jul-01, 2015

S-FORT Shiomi
Jul-01, 2015

630

1,050

375

987

925

645

866

(%)

1.2

2.0

0.7

1.9

1.8

1.3

1.7

Balance sheet amount(million yen)

695

1,111

397

1,006

960

663

895

Total rentable area(㎡)

2,192.48

4,972.84

1,507.35

1,609.80

1,114.38

1,119.54

1,042.48

Leased area(㎡)

2,192.48

4,972.84

1,507.35

1,512.20

1,076.47

1,119.54

1,002.46

Occupancy rate

(%)

100.0

100.0

100.0

93.9

96.6

100.0

96.2

184

184

184

184

184

184

184

26,80435,953

12,82432,39527,322

20,75729,081

Real estate rental revenues

22,74535,34012,577

29,97524,56519,99426,454

Other lease business revenues

4,059

612

247

2,419

2,757

763

2,627

5,589

1,157

811

8,860

4,334

4,225

5,298

1,496

-

-

2,251

1,292

1,315

1,652

-

-

-

1,882

1,289

1,296

1,324

(3) Regal estate rental expenses(thousand yen)Management service fee
Taxes and dues

expenses

S-FORT Maita Koen

IdaimaeC-03(million yen)(thousand yen)

information

S-FORT Saga

C-02

Composition rate(2) Total real estate rental income

Income andAug-02, 2016

C-01

Acquisition price(1) Number of operating days

（７）

B-09

S-FORT Saga Honjo

Nishishinchi（４）Acquisition date
（５）

B-08

S-FORT Yokkaichi（３）Property nameGreater Tokyo area

Utilities expenses
Repair Cost
Insurance expenses
Trust fees
Other lease business expenses

817

-

-

370

454

271

437

1,551

762

480

2,188

472

278

853

36

87

23

53

36

32

40

-

302

302

303

405

405

405

1,687

5

5

1,809

383

626

585

(4) NOI(＝(2)-(3))(thousand yen)

21,21534,79512,01323,53422,988

16,532

23,783(5) Depreciation(thousand yen)

6,021

13,741

4,543

10,352

5,048

4,139

6,059

15,19321,054

7,469

13,182

17,94012,392

17,723

131

450

148

436

5,833

161

322

21,08434,344

11,86423,097

17,155

16,371

23,460(6) Real estate rental income（＝(4)-(5)）(thousand yen)
(7) Capital Expenditures(thousand yen)(8) NCF（＝(4)-(7))(thousand yen)47

Income and Expenditure by Property（7）Fiscal Period Ending January 2017 (As of January 31, 2017)（１）Area category

Greater Tokyo area（２）Property No.

C-05（３）Property name

S-FORT Noborito（４）Acquisition dateJul-01, 2015

（５）
Price
information（６）
Leasing
information

Nishifunabashi

Jul-01, 2015

Jul-01, 2015

C-10

S-FORT Maihama

S-FORT Ichikawa

Jul-01, 2015

Jul-01, 2015

C-11

S-RESIDENCE

S-FORT Sagamihara

Yokosuka Chuo
Aug-02, 2016

Aug-02, 2016

666

818

732

1,130

809

850

585

(%)

1.3

1.6

1.4

2.2

1.6

1.6

1.1

Balance sheet amount(million yen)

683

871

751

1,162

829

897

609

Total rentable area(㎡)

1,022.10

1,717.46

1,397.64

1,726.56

1,255.90

1,492.09

1,198.26

Leased area(㎡)

996.891,692.11

1,308.55

1,643.68

1,255.90

1,492.09

1,108.12

Occupancy rate

(%)

97.5

98.5

93.6

95.2

100.0

100.0

92.5

184

184

184

184

184

184

184

20,80831,64823,45235,97427,19829,48019,054

Real estate rental revenues

19,791

30,10722,44332,01826,13329,361

17,750

Other lease business revenues

1,016

1,540

1,009

3,955

1,065

119

1,303

4,073

5,685

6,334

8,877

6,758

1,300

5,360

Management service fee

1,154

1,556

1,239

1,839

2,214

1,262

1,324

Taxes and dues

1,081

1,905

1,356

1,370

1,506

-

-

Utilities expenses

212

205

275

707

796

-

393

Repair Cost

434

423

1,768

2,919

989

-

1,881

(3) Regal estate rental expenses(thousand yen)expenses

S-FORT

Hiratsuka

C-09(million yen)(thousand yen)

information

S-FORT Shonan

C-08

Composition rate(2) Total real estate rental income

Income andC-07

Acquisition price(1) Number of operating days

（７）

C-06

Insurance expenses

31

43

34

45

39

35

27

Trust fees

405

405

405

405

405

-

201

Other lease business expenses

753

1,146

1,254

1,588

807

3

1,532

(4) NOI(＝(2)-(3))(thousand yen)

16,73425,962

17,11827,097

20,43928,17913,693(5) Depreciation(thousand yen)

5,466

6,467

6,136

6,810

3,055

7,595

4,349

11,267

19,495

10,981

20,286

17,384

20,584

9,344

341

322

322

3,806

-

-

370

16,39225,64016,79523,291

20,43928,17913,323(6) Real estate rental income（＝(4)-(5)）(thousand yen)
(7) Capital Expenditures(thousand yen)(8) NCF（＝(4)-(7))(thousand yen)48

Financial Documents: Balance Sheet (1)(Unit：thousand yen）

(Unit：thousand yen）

Previous Fiscal Year

Current Fiscal Year

Previous Fiscal Year

Current Fiscal Year

(July 31, 2016)(January 31, 2017)(July 31, 2016)(January 31, 2017)

AssetsCurrent Assets
Cash and deposits

348,514693,393

Investments and other assets

Cash and deposits in trust

736,636

1,012,187

Investment securities

20,966

1,712

Operating accounts receivable

3,174

7,807

Lease and guarantee deposits

10,284

10,445Prepaid expenses

45,113

66,960Long-term prepaid expenses

84,358113,096-

61,006

Total investments and other assets

115,609125,254

Consumption tax receivable
deferred tax assets
Other
Total-current assets

11

16

20,841

1,794

1,154,291

1,843,165

Non-current assets--25,180-

2,172,609-

686

Accumulated depreciation--46

Tools, furniture and fixtures, net-

640

Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust

23,246

Investment corporation bond issuance costs-

23,516
46,76333,611,122

55,828,768

2,197,790

Buildings, net

Land53,938,839-

Total Assets-

Accumulated depreciation
Tools, furniture and fixtures

32,456,831

Investment unit issuance expenses
Total deferred assets

Property, plant and equipment
Buildings

Total non-current assets-

1,521,625

20,139,584

29,808,193-619,387-1,016,837

19,520,196

28,791,355-

518

Accumulated depreciation--5

Structures in trust, net-

513

Machinery and equipment in trust

358,415

468,125

Accumulated depreciation-19,013-30,290

Machinery and equipment in trust, net

339,401

437,835

Tools, furniture and fixtures in trust

5,355

11,250

Accumulated depreciation-899-1,848Tools, furniture and fixtures in trust, net

4,456

9,401

Land in trust

12,477,166

20,879,603

Total property, plant and equipment

32,341,221

53,813,584

49

Financial Documents: Balance Sheet (2)(Unit：thousand yen）
Previous Fiscal Year

Current Fiscal Year

(July 31, 2016)(January 31, 2017)

Liabilities
Current liabilities
Operating accounts payable

58,959113,842

Short-term loans payable

1,012,000

550,000

Accounts payable – other

10,406

26,600Accrued expenses

1,022

6,300

Accrued dividend

2,095

3,719

Accrued consumption taxes

4,555

-

827

936

Advances received

150,156

256,642

Deposits received

2,146

3,626

1,242,170

961,667

Income taxes payable

Total current liabilities
Non-current liabilities
Investment corporation bonds
Long-term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust-

1,000,000

16,000,000

27,200,000-

30,446

149,714

239,418

16,149,714

28,469,865

17,391,884

29,431,533

16,015,052

26,015,517-126,751-223,449

15,888,300

25,792,068

Unappropriated retained earnings

330,936

605,166

Total surplus

330,936

605,166

16,219,237

26,397,234

Total non-current liabilities
Total Liabilities
Net assets
Unitholdersʼ equity
Unitholdersʼ capital
Amount deducted from Unitholders' capital
Unitholdersʼ capital (Net amount)Surplus

Total unitholdersʼ equity
Total net assets

16,219,237

26,397,234

Total liabilities and net assets

33,611,122

55,828,768

50

Financial Documents：Statement of Income(Unit：thousand yen）
Previous Fiscal Year

Current Fiscal Year

From: February 1, 2016

From: August 31, 2016

To: July 31, 2016

To: January 31, 2017

Operating revenue
Rent revenue - real estate
Other lease business revenues
Dividents from anonymous partnership

1,012,267

1,679,137

97,383

126,570966

746

1,110,617

1,806,453

Expenses related to rent business

538,568

766,106

Asset management fee

76,04476,246

Asset custody fee

3,233

3,591

Administrative service fees

23,12836,536

Total operating revenue
Operating expenses

Directorsʼ compensations

2,400

2,400

Remuneration for Accounting Auditors

8,100

10,000

Other operating expenses

41,81961,680Total operating expenses

693,294

956,561

417,322849,8922

Operating income
Non-operating income
Interest income

77Interest on refund

305-

Total non-operating income

382

2

64,924

100,948

Non-operating expenses
Interest expenses
Interest expenses on investment corporation bonds
Borrowing related expenses

-

3,843

21,049130,983

Investment corporation bond issuance costs

-

3,364

Investment unit issuance costs

-

4,664

85,973

243,805

Ordinary income

Total non-operating expenses

331,731

606,089

Net income before income taxes

331,731

606,089

Income taxes – current

849

937

Deferred Income taxes

15-4

Total income taxes

865

933

330,866

605,156

Net income
Balance brought forward（-）
Unappropriated retained earnings (-)

70

9330,936

605,166

51

Financial Documents：Statement of Cash Flows(Unit：thousand yen）

(Unit：thousand yen）
Previous Fiscal Year

Current Fiscal Year

Previous Fiscal Year

Current Fiscal Year

From: February 1, 2016

From: August 31, 2016

From: February 1, 2016

From: August 31, 2016

To: July 31, 2016

To: January 31, 2017

To: July 31, 2016

To: January 31, 2017

Cash flows from investing activities

Cash flows from operating activities
Net income before income taxes

331,731

606,089

Purchase of property, plant and equipment

Depreciation

276,728434,908

Purchase of property, plant and equipment in trust

Interest income
Interest expenses
Investment corporation bond issuance costs
Investment unit issuance costs

-77

-2

64,924

104,792

-

3,364

-

4,664

Decrease (increase) in operating accounts receivable

1,069-4,633

Decrease (increase) in consumption taxes receivable

144,140-61,006

Decrease (increase) in consumption taxes payable

4,555-4,555Decrease (increase) in prepaid expenses-2,181-21,846

Increase (decrease) in operating accounts payable-13,785

51,021

Increase (decrease) in accounts payable – other-150,899

16,194

Increase (decrease) in advances received

6,606

106,485

Decrease (increase) in long-term prepaid expenses

13,968-28,737

Other, net-32,532

19,780Subtotal

644,247

1,226,520

Interest income received
Interest expenses paid
Income taxes – current
Cash flows from operating activities

77

2-65,068-99,514-1,603-828

577,652

1,126,178

Payment for lease and guarantee deposits
Proceeds from collection of lease and guarantee
deposits--3,720,102-10,561-18,183,309

-

-221

-

60

Repayments of lease and guarantee deposits received--1,125

Proceeds from lease and guarantee deposits received-

31,571-22,076-17,374

21,188107,078

Repayments of lease and guarantee deposits in trust
received
Proceeds from lease and guarantee deposits in trust
received
Purchase of investment securities
Proceeds from redemption of investment securities
Cash flows from investing activities-20,000--

20,000-31,449-21,763,420

Cash flows from financing activities
Increase in short-term bank loans

550,000-

Decrease in short-term loans payable-700,000-462,000-

11,200,000-

1,000,000

Proceeds from long-term loans payable
Proceeds from issuance of investment corporation
bonds
Payments for investment corporation bond issuance
costs
Proceeds from issuance of investment units
Payments for investment unit issuance expenses--26,881-

10,000,464--27,911

Dividends paid

-293,549-426,000

Cash flows from financing activities-443,549

21,257,672

Net increase (decrease) in cash and cash equivalents

102,653

620,430

Cash and cash equivalents at the beginning of period

982,496

1,085,150

1,085,150

1,705,580

Cash and cash equivalents at the end of period

52

Feature of Excess of Earnings and Portfolio
Feature of Investments in Residential Properties
Located in Regions outside Tokyo

Feature of Samty Residential Investment
Corporationʼs Portfolio

A feature of investing in residential properties located in regions is
its tendency to incur depreciation that is relatively large inproportion to the acquisition price of properties.

Samty Residential Investment Corporationʼs portfolio is mainlycomprised of relatively new properties.
Furthermore, in accordance with the sponsor support
agreement, exclusive negotiating rights of S-RESIDENCE
series, properties newly developed and conveniently located,
are granted to Samty Residential Investment Corporation by
the sponsor. Therefore, this feature is believed to remain going
forward.

■Ex.: Comparison between residential properties in regions andin Greater Tokyo area
(Assuming depreciation period as 50 years, NOI yield as 6.0%
and 5.0% for regions and Greater Tokyo area respectively.
These figures are examples and do not represent any specificproperty owned by Samty Residential Investment Corporation.)[Residential property
in a region]
Building: 3 billion yen
Land: 1 billion yen

Depreciation: 60 million yen/year
NOI yield： 6.0％
NOI yield after depreciation ：4.5％
Depreciation rate：1.5％

1[Residential property inGreater Tokyo area]
Building: 3 billion yen
Land: 3 billion yen

Depreciation： 60 million yen/year
NOI yield： 5.0％
NOI yield after depreciation ：4.0％
Depreciation rate: 1.0％

2

Portfolio composition withaverage building age of 7.9
years

Stable supply of newly
developed properties from thesponsor

Ratio of CAPEX to totalacquisition price ofproperties is expected toremain at a low level*Depreciation rate is the ratio of depreciation to the acquisition price of properties.

53

Unitholder Information (1)Number of Units and Number of Unitholders by Unitholder Type
Number of units by unitholder type and number ofunitholders by unitholder typeEnd of 3rd period(January 31, 2017)

Financial Institutionss

Other domestic

Overseas(including financial dealers)

corporations

investors

88,799 units【31.4%】

283,000 units（＋35,380 units）

0%

10%

157,878 units【55.8%】

28,285 units【10.0%】 8,038 units【2.8%】（+8,586 units）

20%

Individuals / Others

30%(+73,246 units)(+2,448 units)

40%

50%

60%

70%

80%

90%

100%

(Note) The above numbers in parentheses are the number of increased units
from the end of 2nd fiscal period (July 31, 2016)

Unitholder Information
Number of units by

As of July 31,

As of January 31,

Increase

Number of unitholders by

As of July 31,

As of January 31,

Increase /unitholder type

2016

2017

/decrease

unitholder type

2016

2017

decrease

53,419 units

88,799 units+ 35,380 units

Other domestic corporations

19,699 units

28,285 units+ 8,586 units

Overseas investors

5,590 units

8,038 units

Individuals / Other

84,632 units

Total

163,340 units

Financial Institutions(including financial dealers)

Financial Institutions

51 people

59 people

8 people

Other domestic corporations

186 people

262 people

76 people+ 2,448 units

Overseas investors

46 people

53 people

7 people

157,878 units+ 73,246 units

Individuals / Other

10,999 people

16,906 people

5,907 people

283,000 units+ 119,660 units

Total

11,282 people

17,280 people

5,998 people(including financial dealers)54

Unitholder Information (2)Major Unitholders
Major Unitholders (top 10) as of January 31, 2017
Investment
Unitholder

units(units)Japan Trustee Services Bank Ltd. (Trust Account)

Ratio
(%)

20,9477.40

13,531

4.78

Samty Co., Ltd.

12,374

4.37

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

10,998

3.88

9,482

3.35

Kinki Sangyo Credit Union

7,588

2.68

Osaka co-sei Shinkin Bank

5,820

2.05

Daido Shinyoukumiai

4,957

1.75

Individual

3,461

1.22

GMO CLICK Securities, Inc

2,062

0.72

Total of major unitholders (top 10)

91,22032.23

Total of units

283,000

100.00Trust & Custody Services Bank, Ltd.
(Securities Investment Trust Account)

The Nomura Trust and Banking Co., Ltd.
(Trust Account)55

Change in Investment Unit Price(June 30, 2015 to March 10, 2017)（yen）

Trading volume (right axis)（unit）

Unit price (left axis)

100,000

70,00060,00095,00050,00090,00040,00085,00030,00080,00020,00075,00070,000June. 30, 2015

10,000

September. 30, 2015

December. 31, 2015

March. 31, 2016

Source: Prepared by Samty Asset Management based on Tokyo Stock Exchange, Inc. Database

June. 30, 2016

September. 30, 2016

December. 31, 2016

056

Disclaimer
 This document has been prepared to provide information, and not for inviting investments in or recommendingtransaction of certain products. When purchasing the investment units of Samty Residential Investment Corporation,please contact and inquire respective securities companies. Further to the above, we request investors to make final
investment decisions by their own responsibility and judgment.

 This document does not constitute a disclosure document or a management report based on the Financial

Instruments and Exchange Act, the Act on Investment Trusts and Investment Corporations, the listing regulations of
the Tokyo Stock Exchange and other relevant laws and regulations.

 The data and analysis, etc. in this document are based on the actual results of a certain period in the past, and do notguarantee the management results or their fluctuations, etc. in the future. Further to the before mentioned, thecontents of this document include statements on future operating results. Such forward-looking statements do notconstitute a guarantee of future operating results. Furthermore, the investment return of a real estate investment
trust may become lower than the investment principal depending on the fluctuations in the price of the managed realestate properties and their profitability.

 Samty Residential Investment Corporation does not guarantee the accuracy or completeness of the information

provided in this document. In addition, please note that the contents of this document may be changed or removed
without prior notice.

 Neither Samty Residential Investment Corporation nor Samty Asset Management Co., Ltd. bears any responsibility forthe outcome of the investment actions taken in accordance with this document.

 Duplication and reproduction, etc. of the contents contained in this document without prior consent is prohibited.

Inquiries Regarding This Document

Samty Asset Management Co., Ltd.

(Financial instruments business operator (registration No. 2402 issued
by the Director-General of the Kanto Finance Bureau (Kinsho))(Member of The Investment Trusts Association, Japan)
Phone: +81-3-5224-5031

This document is not a disclosure material based on the Financial Instruments and Exchange Act.
We request investors to make final investment decisions based on their own judgment.

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