Samty Residential Investment Corporation（Securities CODE：3459）

Financial Results for the 4 th Fiscal PeriodEnding July 2017

Contents
１. Features of Samty Residential Investment Corporation

P.3

２. Financial Overview for the 4th Fiscal Period

P.9

３. Managing Results

P.13

４. Future Growth Strategy

P.25

５. Operating Results and Distribution Information

P.33

６. Appendix

P.39

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

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

Properties developed by the Samty Group
Stable supply of the S-RESIDENCE series

Wide-ranging support from the sponsor

Grant of exclusive negotiating rights

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

Ｂ. Investment policy by geographical area

 Investing in accommodation facilities and otherfacilities, primarily in the residential asset class Focusing on investing in major regional cities

Residential
properties(Note1)

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 areas, medical facilities or national
universities located in the area.

GreaterTokyo area

Single Type

Investment ratio (Note3)

Major regional cities

Regional cities

Operatingfacilities(Note2)

Investment areas

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 1■Samty Residential has acquired 49 residential properties throughout Japan and successfully
composed more stable diversified portfolio concentrating in major regional cities
Owned Properties ･･･ ●A-21
A-23 ● A-20 A-09●● A-03
A-22●●●●●
A-19
A-02● ●
A-18
B-03
A-10
B-07 ●●●A-12● ●A-16
A-11

●
B-04

A-28
●
A-27
A-14 ●●●A-28
A-13 A-17● B-05●●
A-26 ●●
A-01● ● B-02
A-25●●A-08
A-08

A-29
●●
●A-07
A-15

Asset size
51.5 billion yen

Average building age
8.4 yearOccupancy rate
95.6％

Average appraisal
NOI yield
5.6％

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

●
B-01

C-09
● ●C-07
C-02 ●
C-11
●C-08
●
●
●
C-05
C-04

(No. of properties)

C-03 ●

●C-01
●
C-06

C-10
●

Major regional
cities29

Other regional
cities9Greater Tokyo
area

11

Total

49

(Note) The above figures are for 49 properties owned as of July 31, 2017.

6

Portfolio Overview 1
Investment structure of owned properties
Investment ratio by geographical area

Familytype
10.2%

GreaterTokyo area
17.5%

Kitakanto
1.2%

Kinki
32.0%

Hokkaido
5.3%
Other
Regional cities
15.1%

Ratio of average area per residential unit

Ratio ofregional cities
Kyusyu82.5%
12.2%

Tohoku
9.2%

Tokai
22.7%

Compact
type
36.0%

10 years toless than 15
years
31.0%

Averagebuilding age
8.4 yearSingle
type
53.7%

Major
Regional cities
67.4%

Ratio by building age
15 years toless than 20
years
7.6%

Ratio ofsingle andcompact type
89.8%

Investment ratio by
information/acquisition channel(Note2)

Third party
18.6%
Less than 5
years
31.0%
Bridge14.8%

5 years toless than 10
years
30.4%

Asset
Asset
Management Management
Company
Company
18.6%
20.0%
Asset
Management
CompaySponsorDeveloped,
14.8%
46.7%
Owned bysponsor or
Warehousing
66.7%(Note1) The above ratios are calculated based on acquisition prices for 49 properties owned as of today.
(Note2) The outer ring indicates the ratio of acquisition channel of owned properties while the inner ring indicates that of information channel of owned properties.

7２. Financial Overview for the 4 th Fiscal Period

Summary of Income Statement for 4th Fiscal Period
Comparison of Forecast and Actual Result
Actual result was generally as expected with increased operating revenue due to the increased revenues fromrents including common area expenses and key money, and the increased operating expenses due to posting of
fixed asset tax, repair and leasing costs of newly acquired properties, among other factors.
(million yen)

4th Period (July 31, 2017)

3rd Period

Forecast

results

Vs. 3rd andChange from

Results

4th results(January 31, 2017)(As of MarchOperating revenue

1,806

1,797

1,840

+42

+ 34

(out of which, real estate rental revenue)

1,805

1,797

1,840

+42

+ 34

Operating expenses

956

1,052

1,081

+29

+ 124

(out of which, real estate rental expenses)

766

809

838

+29

+ 72

Operating income

849

745

759

+13

-90

Forecast

15, 2017)■Management performance

Non-operating income and loss

-243

-148

-144

+4

+ 99

Ordinary income

606

596

614

+18

+8

Corporate tax, etc.

0

1

0

0

+0

605

595

613

+18

(yen)

Net income■Distributions(Note)

+8

(yen)

Distribution per unit
(Not including distribution

2,138

2,105

2,169

+64

+ 31

507

520

501

-19

-6

2,645

2,625

2,670

+45

+ 25

in excess of earnings)・・・①
Distribution in excess of earnings
per unit・・・②
Total distribution per unit ・・・① + ②(Note1) Calculated with the number of investment units issued at 283,000 for 3rd and 4th period.
(Note2) For more detaills, please refer to “Change in forecast actual forecast” on page 35.

Vs. 3rd fiscal period actual results

Operating income increased due to the rise in revenues fromrents including common area expenses, key money and renewal
fees. On the other hand, operating expenses increased as a resultof increase in taxes and dues, restoration expenses/leasing
expenses for tenant replacements for properties newly acquired inthe 3rd fiscal period, and the increase in selling, general andadministrative expenses in line with expansion of asset size. Nonoperating income and loss also significantly decreased as expenses
for issuance of new investment units were posted in the 3rd fiscal
period. As a result of these, ordinary income stood at 614 million
yen (+8 million yen from the previous fiscal period) and net
income at 613 million yen (+8 million yen from the previous fiscal
period).

Vs. 4th fiscal period forecast(+ indicates increase factors ,– indicates decrease factors)■ Increase in operating revenue+42 million yen■Increase in operating expenses:-29 million yen

・Increase in occupancy and rental revenues:+6 million yen
・Increase in other revenues(key money, renewal fees, restoration income, etc.):+35 million yen

・Decrease in utilities expenses:
・Increase in repair expenses due tovalue-adding work, etc.:
・Decrease in depreciation:■ Non-operating income and loss:+5 million yen-35 million yen+1 million yen+4 million yen

・Decrease in interest expenses:+3 million yen
・Other non-operating income and expenses:+1 million yen【Average occupancy rate】【Capital expenditures】
Forecast：95.5%
Forecast：million yen
Actual result ：96.4%
Actual result：41 million yen【Payout Ratio】
Forecast：72.0%

Actual result：72.0％

10

Summary of Income Statement for 4th Fiscal Period
Comparison of Forecasted Distribution with Actual Result
Comparison of forecast and actual results for 4 th fiscal period
Operating revenue factors

Operating expensed factors＋42 mn yen-29 mn yen（+151 yen）（-102yen）

Other income
6 mn yenKeymoney
7 mn yen

Total
distribution
742 mn yen（2,625 yen）

Renewal fee
8 mn yen

Decrease inreal estate
rentalexpenses＋5 mn yen（＋19 yen）

Restoratin income
11 mn yen

Distribution inexcess of
earnings
147 mn yen(520 yen)

Utilities income
1 mn yen

Increase inrental revenues
and common
area expenses
income＋6 mn yen（＋24 yen）

expense factors＋4 mn yen（＋16 yen）

Other expenses
1 mn yen

Total
distribution
755 mn yen（2,670 yen）

Leasing promotion
Expenses
2 mn yen
Restoration expenses

Payout ratio72%

17 mn yenRepair expenses
2 mn yen
Value-adding work
8 mn yen

Payout ratio
72%

Distribution
595 mn yen(2,105 yen)

Other expenses
1 mn yenTaxes and dues
2 mn yen
Utilities expenses
1 mn yen

Non-operating income andManagement service fee
2 mn yen
Increase in realestate expenses-35 mn yen（-126 yen）

Decrease indepreciation＋1 mn yen（＋3 yen）

Other 1 mn yen
Interest expenses
3 mn yen
Decrease in
non-operating
expenses＋4 mn yen（＋16 yen）

Increase inotherrevenues＋35 mn yen（＋126 yen）

Distribution inexcess of earnings
141 mn yen（501 yen）

Distribution
614 mn yen(2,169 yen）

Total
increase in
distribution＋18 mn yen（＋64 yen）

Increase/decrease in total distribution＋18 mn yen（＋64 yen）
4th period
forecast distribution（announced on March 15, 2017)(Note) The above figures are rounded down to the nearest whole number.

4th period
actual result11３. Managing Results

Management Summary Samty Residential secured growth opportunities by investing in a bridge fund through silent partnership.

External
GrowthContinuing to aim for expansion of asset size.

 Samty Residential secured properties through warehousing in cooperation with the sponsor.
 Samty Residential implemented appropriate management based on the property/location features ofowned properties to realize stable occupancy rates and rent unit prices.

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

measures including enhancement of usability and reduction of costs.

 Samty Residential acquired DBJ Green Building certification as part of its environmental andsocial efforts.

Financial
Strategy Samty Residential developed a solid financial base by diversifying repayment dates of andfixing the interest rates of interest-bearing liabilities, etc.

 Samty Residential conducted repayment of principal (150 million yen) for short-term loans payable using

cash on hand.

Portfolio highlights

No. of properties

End of 1st period

End of 2nd period

End of 3rd period

End of 4th period(January 31, 2016)(July 31, 2016)(January 31, 2017)(July 31, 2017)29 properties

29 properties

49 properties

49 properties

Total acquisition price

30,962 million yen

30,962 million yen

51,551 million yen

51,551 million yen

Appraisal value

32,434 million yen

32,975 million yen

55,693 million yen

56,490 million yen

Appraisal NOI yield

5.6%

5.6%

5.6%

5.6%

(Note1)

96,983 yen

101,151 yen

97,779 yen

101,449 yen

7.6 year

8.1 year

7.9 year

8.4 year

95.2%

95.4%(Note2)

97.5%

95.6%

2,345 units

2,345 units

3,754 units

3,754 units

NAV per unit

Average building age
Occupany rate
No. of rentable units(Note 1) Calculated by: Unitholdersʼ capital + Unrealized gain/loss (Appraisal value – Book value) / Number of investment units issued(Note 2) Occupancy rate for end of 2nd period does not include the 20 properties acquired in August 2016.

14

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 15-Mar-20

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
Occupancy
rate
92.0%

Location

Higashinari-ku, Osaka

Completion dateOct-16

Occupancy
rate
100.0%(ML)

Number of rentable units 148 units
Appraisal value

Location

Kanagawa-ku, Yokohama

Completion dateNov-16

Number of rentable units 36 units

1,950 million yen

Appraisal value

686 million yen

Approx. 2-minute walk from
AccessApprox. 6-minute walk from

Midoribashi Station on the Chuo

AccessTammachi Station on theLine and Imazatosuji Line of Osaka

Tokyu Toyoko Line■S-FORT (properties acquired from sources unrelated to the sponsor)
Samty
Nishinomiya Residence

Trois Bonheur
HonchoCollege Square
Hoya

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

Occupancy
rate
91.8%

Location

S-FORT
Toyohira Sanjo

Occupancy
rate
89.4%

S-FORT
Aoba Uesugi

Occupancy
rate
100.0%(ML)

Occupancy
rate
100.0%

Occupancy
rate
100.0%(ML)

CQ Residence
Tamagawagakuen

Occupancy
rate
93.3%

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 rentable units

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

Machida-shi, Tokyo

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(Note) The above tentative names are names planned to be used when Samty Residential acquires the properties.
(Note) Occupancy rates are as of the end of July 2017.
(Note) Fixed rent master lease agreements have been concluded for S-RESIDENCE Yokohama Tammachi, Trois Bonheur Honcho and College Square Hoya.

15

Internal Growth

Changes in the Occupancy Rates by Area
Occupancy rate for the entire portfolio has risen 2.8 point from the time of
IPO. Currently it stably keeps over 95%.

Began managementwith 28 properties
On July 1, 2015

Average occupancy rate：93.8％

Average occupancy rate：95.3％

Average occupancy rate：96.5％

2nd Fiscal Period(July 31, 2016)

3rd Fiscal Period(January 31, 2017)

1st Fiscal Period(January 31, 2016)

Occupancy rate(%)

1st Fiscal Period(January 31,
2016)

2nd Fiscal Period

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

Average occupancy rate：96.4％

4th Fiscal Period(July 31, 2017)

4th Fiscal Period (July 31, 2017)30-Jun31-Jan31-Jul31-Aug30-Sep31-Oct30-Nov

31-Dec31-Jan28-Feb31-Mar30-Apr31-May30-Jun31-JulMajor regional cities

92.7

95.6

95.3

95.6

96.5

96.4

96.4

96.7

97.8

97.7

98.0

96.1

95.0

94.4

95.2

Other regional cities

93.8

95.3

95.2

96.0

95.8

96.7

96.9

96.6

96.9

96.3

97.6

97.2

96.6

96.4

95.8

Greater Tokyo area

92.5

93.5

96.2

95.1

96.2

96.5

97.1

95.9

96.7

96.6

98.4

98.4

97.6

97.6

97.8

Overall

92.8

95.2

95.4

95.6

96.4

96.5

96.6

96.6

97.5

97.3

98.0

96.6

95.6

95.1

95.6

(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.

16

Internal Growth

Changes in unit rent after adjustment
Unit rent after adjustment of the entire portfolio remained stable,
maintaining earning potential of the portfolio

Began managementwith 28 properties
On July 1, 2015

1st Fiscal Period(January 31, 2016)

Rent unit price after
adjustmnet
End of June 2018 = 100

1st Fiscal Period(January 31,
2016)

2nd Fiscal Period(July 31, 2016)

2nd Fiscal Period

3rd Fiscal Period(January 31, 2017)

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

4th Fiscal Period(July 31, 2017)

4th Fiscal Period (July 31, 2017)30-Jun31-Jan31-Jul31-Aug30-Sep31-Oct30-Nov

31-Dec31-Jan28-Feb31-Mar30-Apr31-May30-Jun31-JulMajor regional cities

100.0

100.2

100.5

100.4

100.4

100.5

100.5

100.5

100.6

100.6

100.7

100.7

100.8

100.9

101.0

Other regional cities

100.0

100.0

100.2

100.1

100.2

100.5

100.5

100.5

100.5

100.6

100.7

100.8

100.8

100.9

101.0

Greater Tokyo area

100.0

100.1

100.4

100.4

100.4

100.4

100.3

100.4

100.4

100.4

100.6

100.6

100.6

100.7

100.7

Overall

100.0

100.1

100.5

100.3

100.4

100.5

100.5

100.5

100.5

100.6

100.7

100.7

100.8

100.9

100.9

(Note) Unit rent after adjustment is 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
Unit rent after adjustment for each area was calculated through simple averaging of unit rent after adjustment of each property in accordance with the numberof properties in the relevant area in the past presentation materials. However, starting in the current fiscal period, such is calculated through weighted
averaging of unit rent after adjustment of each property in accordance with the contracted area ratio of each property in the relevant area.

17

Internal Growth

Examples of Change in Unit Rent after Adjustment of
Owned Properties
Increase in unit rent after adjustment through management accommodating to property features
A-07 S-FORT Tsutsujigaoka Koen(%)

Change in unit rent after adjustmnet（June 2015 – July 2017)

In the eastern district of Sendai Station, Sendai Station East No.
2 Land Readjustment Project has brought development of urban
facilities and upgrading of urban environment and Sendai
Station East Exit Redevelopment Project has created more
shops and residences in the area surrounding the station which
had had few commercial facilities, transforming the district into
an attractive town. In light of such market trends, we have put
forth efforts to gain key money revenue during the transfer
season of companies with branches and offices in theneighboring Sendai Port/JR Sendai Station areas, andsuccessfully realized a more-than-expected increase in key
money revenue, leading to the improved unit rent after
adjustment.

A-13 S-RESIDENCE Kobe Isogamidori(%)

Change in unit rent after adjustmnet（July 2015 – July 2017)

Strong leasing demand mainly from singles, regardless of
individuals or corporations, exists as the property stands
close to the center of Kobe. In the 4th fiscal period, we
improved unit rent after adjustment by strategically aiming
to acquire key money, cooperating with PM companies andbrokers in advance for the peak season of March and April,while analyzing market rents of the surrounding areas andraising rents to meet the recent market demand.

B-03 S-FORT Yokkaichi motomachi(%)

Change in unit rent after adjustmnet（July 2015 – July 2017)

Corporate demand from a wide range of industries, frommanufacturing to IT and insurance as well as finance industries
such as securities firms, can be found in Yokkaichi City. As
supply of 1K type for single transferees remained particularly
short, we successfully increased unit rent after adjustment byreviewing rents and collecting key money upon move-ins andouts while considering neighboring market trends.

(Note) The base points of the above graphs are the time from which management of the respective property started.
(Note) Unit rent after adjustment is 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 area18

Internal Growth

Increase or Decrease of Unit Rent after adjustment at the time of
Tenant Replacement
The ratio if increase of unit rent after adjustment at the time of tenant replacement
has risen 1.1 point and the ratio of decrease has declined 1.2 point■ Increase or decrease of unit rent after adjustment at the time of tenant repacement (Note)(No. of units / Composition ratio)【Increase factors】
Increase exceeding 5%
Increaes of 5% or less
Unchanged
Decrease exceeding 5%

Decrease of 5% or lessTotal 465 units

500 units

30 units
400 units

Total 324 units
300 units

23 units

105 units

55 units

100 units

38 units

176 units

3rd fiscal period(As of January 31, 2017)

Unchanged
55 units/11.8%

Increase
275 units/59.1%(+87 units/+1.1P)

137 units

51 units
0 units(+37 units/▲1.2P)(+17 units/+0.1P)

75 units
200 units

Decrease
135 units/29.0%

99 units
4th fiscal period(As of July 31, 2017) The number of tenant replacements
significantly increased as it was a peak season
 Worked to increase rents by introducing
furniture/home appliances rentals and freeinternet service
 Promoted acquiring key money upon
replacement as part of sales strategy【Breakdown of increased cases/total
number of increased cases】(1) Increase/decrease due to installation offurniture/home appliances
18 units(2) Increase due to acquiring more key money
than the previous tenant
178 units(3) Increase due to elimination of rent gap
33 units(4) Other (introduction of internet service, etc.)
57 units【Decrease factors】
 Decreased rents upon soliciting new tenants
only when the rent from a former tenant(before replacement) differed from the mostrecent market conditions.

(Note) Unit rent after adjustment is 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

19

Internal Growth

Change in Renewal Status/Collection of Key Money of
Owned Properties

Renewal rate remained at a high level of around 90%■ Change in the number of renewals and renewal rates
1,000 units

No. of renewals

95.0%

913 units

94.3%

900 units

Renewal rates

92.0%

800 units

657 units

700 units

526 units

600 units
500 units

91.2%

90.0%

89.3%
493 units
85.0%

400 units
300 units
200 units

80.0%

100 units
1st Fiscal Period

2nd Fiscal Period

3rd Fiscal Period

4th Fiscal Period(January 31, 2016)(July 31, 2016)(January 31, 2017)(July 31, 2017)■ Change in the number of renewal fee collections
and the amounts collected
14,000,000(yen)

223 units(24.4%)

12,000,000
10,000,000
8,000,000

92 units(17.5%)(22.7%)

6,000,000
4,000,000

6,982
thousand yen

2,000,000
0

12,253thousand yen

112 units
99 units(15.1%)

6,471
thousand yen■ Change in the number of key money collections
and the amounts collected
30,000,000(yen)

269 units
25,000,000

186 units

20,000,000
15,000,000

133 units

15,451
thousand yen

10,000,000

4,178
thousand yen

5,000,000

1st Fiscal Period

2nd Fiscal Period

3rd Fiscal Period

4th Fiscal Period(January 31, 2016)(July 31, 2016)(January 31, 2017)(July 31, 2017)0

183 units

24,213thousand yen

17,510thousand yen

12,520thousand yen
1st Fiscal Period

2nd Fiscal Period

3rd Fiscal Period

4th Fiscal Period(January 31, 2016)(July 31, 2016)(January 31, 2017)(July 31, 2017)20

Internal Growth

Cost Reduction through Review of Management Expenses andContracts of Utilities
Reduction of expenditure by reviewing services in accordance with regional and property features
A-24 S-FORT Fukuoka Higashi

B-02 S-FORT Suminodo■Reduction of maintenance expenses possibly
arising in the future by changing gas suppliers
Reduced cost burden upon
malfunctioning or
replacement of equipment
by reviewing category of
maintenance expenses ofgas equipment such as
water heaters and stoves.

■Reduction of water bill through reviewing ofcontract details
Before changing
contract

Assumed cost
reduction per
fiscal period (Note)(Monthly average)

675,000
yen

192,000
yen(Note) Assumption for 135 units withassumed gas equipment renewal costs
per unit for 10 years of 100,000 yen.

After changing contract(Monthly
average)(Monthly
reduced amount)

133,000
yen

59,000yen

A-11 S-FORT Nakajima Koen
■Real-time monitoring of snowfall to control operationof snow-melting system

Effect of introductiong of snow-melting system(Estimated figures)

After introduction of snow-melting system (4 months: December to March)

Fiscal 2016

Fuel consumption over the 4

Amount of snowfall over the 4

Snow-melting coefficientmonths (liter)months (cm)(Note)

10,309

(1)

22.9

450

Before introduction of snow-melting system (4 months: December to March)
Fuel consumption overAmount of snowfall over Snow-melting coefficientthe 4 months (liter)

the 4 months (cm)(Note)

Fiscal 2012

33,088

601

55.1

Fiscal 2013

22,403499

44.9

Fiscal 2014

25,035

321

78.0

Fiscal 2015

17,897397

45.1

Average of the past 4 years

24,606

455

54.1

(2)

(Note) Snow-melting coefficient (Fuel consumption / amount of snowfall) is fuel consumption for 1cm snow-melting.
A Barometer which shows the efficiency of snow-melting. The higher the number is, the more waste fuel.

Actual fuel consumption (liter)(3)

10,309*Projected consumption (liter)(4)

24,345(1)×(2)*Effect of introduction (liter)(5)

14,036(4)－(3)*Reduction rate (%)

(6)

57.7

(5)÷(4)×100*Reduction amount (yen)(7)

982,520

Unit fuel price (yen)

(8)

70

(5)×(8)The above figures are projections which the snow-melting systemcompany has calculated using the following formulas.
*”Consumption” is the projected fuel consumption before snow-melting
system is introduced.
Amount of snowfall in fiscal 2016 x Average snow-melting coefficient*”Effect of introduction”: Projected consumption – Actual consumption*”Reduction rate”: Effect of introduction / Projected consumption x 100*”Reduction amount”: Effect of introduction x Unit fuel price“Unit fuel price” is in reference to the average fuel sales price at Co-op
Sapporo from December to March in the following year.

21Internal Growth

Improvement of Resident Convenience through Renovation ofCommon Areas
Measures to provide residents with safe, secure, comfortable living environment and to improve
property value■Installation of delivery boxes
In order to improve resident convenience, aim to install delivery boxes at all
properties where such installation is possible. Furthermore, dial-key delivery
boxes are planned to be replaced with electronic-key delivery boxes
sequentially for better security.

Electronic-key (liquid crystal panel)
After

Dial-key

Status of installation ofdelivery boxes

Status of installation ofelectronic-key delivery boxes(Before property
acquisition)(After property
acquisition)(Before property
acquisition)(After property
acquisition)

45
properties

48
properties

36
properties

39
properties(Note)

49
properties

 Inset-key highly
effective against
crimes (picking)

Before Human sensor
to prevent
being locked-in(Note)

49
properties■ Installation of security cameras

 Touch panel
with audio
assistanceRegistration
function for longterm
absence/being
home, etc.

■ Replacement using intercoms with monitors

Reinforce crime prevention capability and security
by sequentially installing security cameras at all
owned properties.
■In addition, introduce a remote monitoring system using
PC/mobile phones at two properties

Status of installation of
security cameras

As consideration for better living environment for residents, installintercoms at properties with no intercoms as well as changing
intercoms with no monitors to intercoms with monitors, after theproperty acquisition. Installation of intercoms with monitors isscheduled for all properties in the future.
Status of installation ofintercomes(Before property
acquisition)(After property
acquisition)(Before property
acquisition)(After property
acquisition)

43
properties

49
properties(Note)

48
properties

49
properties

49
properties(Note) The number also includes properties for which we are considering installation.

■ Entrance■ In dwelling units

49
properties

22

Financial Strategy

Financial highlight
Change in Financial status

End of 2nd period(July 31, 2016)（August 2, 2017)17.1 billion yen

17.0 billion yen(January 31, 2016)

Total interest-bearing debt

After 1st PO

End of 1st period

End of 3rd period

End of 4th period(January 31, 2017)（July 31, 2017）29.2 billion yen

28.7 billion yen

28.6 billion yen

Average remaining borrowing period

3.4 year

3.0 year

3.2 year

2.7 year

2.3 year

Ratio of long-term debt

93.2%

94.1%

96.5%

98.1%

81.1%

－%

－%

17.8%

18.1%

18.2%

50.6%

50.6%

52.5%(Note)

51.5%

51.5%

Ratio of fixed debt
Total asset based LTV

Status of Maturity ladder

Breakdown of the interest-bearing debt

(July 31, 2017)

Assumed partial
early repayment

Refinancing on
June 30, 2017
(repayment ofprincipal of
150 million yen)

The first investment corporation bonds (private)

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

1%
3%
1%
2%
2%
2%
3%
3%

SMBC:5.8

Risona Bank:2.4
Shinsei Bank :2.0

9%
8%
18%

Regional banks

The Kagawa Bank:2.0
The Tokyo Star Bank:1.7

6%

7%

53.2％

The Bank of Fukuoka:5.2

20%

6%

(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).

(billion yen)Aozora Bank:2.7

7%

Shinwa Bank:1.7
The Bank of Saga:1.0
Kumamoto Bank:1.0
Hiroshima Bank:0.6
The Mie Bank:0.5
Shizuoka Bank:0.5
The Chiba Bank:0.3
Oita Bank:0.2
Investment corporationg bonds:1.0

23

Appraisal Value Status
Summary of Appraisal Value

Major regional
citiesOther regional
citiesGreater Tokyo
area
Total

Appraisal Value Status of owned properties

Appraisal value

Book value(million yen)end of 4th
Increase/

Unrealized
gain

periodNo. of properties(million yen)

3rd period

4th period

37,69038,252562

36,049

2,202

8,303

8,402

99

8,099

302

9,700

9,836

136

9,279

556

55,69356,490797

53,428

3,061

decrease■ Change in appraisal value at the 4 th period(million yen)Compared to 3rd

Cap Rate Status of owned properties■ Change of Cap Rate at end of 4 th period

periodChange in Upward

36

appraisal

Unchanged

13

Downward

0value■ Change in Cap Rate of properties acquired in
the 1st and 3 rd fiscal period.

No. of properties
Compared to end of
3rd period
Change in
Cap Rate

Upward0

Unchanged

20

Downward(Note)

29(Note) Cap Rate has declined due to the rise in appraisal value.
(Note) Cap Rate is rounded off to one decimal place.
(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 2016 based on the report at the time of May 1, 2016.

24

４. Future Growth Strategy

Growth Strategy・Managed Target
External
growth strategy

Internal
growth strategy
Financialstrategy

1Expand the asset size and enhance the quality of the portfolio through continuous
acquisitions of the “S-RESIDENCE” properties developed by the sponsor

2

Acquire properties through sponsor support – Utilize the warehousing function

3

Acquire properties by taking advantage of the proprietary channels of the asset
management company

4

Implement the differentiated portfolio development policy

14Enhance the asset value and rate of return through reviewing existing facilities
and other measures
Reduce operating costs
Reinforce property competitiveness and enhance usability of residents byintroducing new facilities/equipment
Stabilize earnings by utilizing sublease agreement

1

Lengthen borrowing periods and reduce cost of debt

2

Expand the bank formation3

Acquire credit ratings in the future

2
3

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

150
100
50
0

30.5

0.4

30.9

20.5

51.5

Assets at IPO Asset acquired in Assets at end of Assets acquired Assets at end of(28 properties)
1st Period
1st Period
through PO in
4th Period(S-FORT(29 properties)
Aug. 2016(49 properties)
Gakuenmae)(20 properties)

Aim to achieve the 100
asset size of 100
billion yen over the
medium term

26

External Growth

External Growth(Steady enternal grwoth under the consistent investment policy (1))
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 touniversities
Major regional
cities

S-FORT
Katahira(July 2015)

Close to universities andmedical institutions
S-FORT
Fukuoka Kencho Mae(April 2015)

S-FORT
Hokudai mae(July 2015)

Close to medical
institutions
S-FORT
Rokuban-cho(July 2016)

Fixed-rent ML

SFORT
Gakuenmae(October 2015)

Other regional
citiesFixed-rent ML

S-FORT
Saga Honjo(August 2016)

S-FORT
Chion-in-mae(August 2016)

S-FORT
Tsurumai cube
(August 2016)

S-RESIDENCE
Yokosuka Chuo
(August 2016)

S-RESIDENCE
Kobe Motomachi(August 2016)

Fixed-rent ML

S-FORT Saga
Idaimae(August 2016)

The sponsor owns 14 warehousing properties across Japan that match the investment policy ofSamty Residential. Steady external growth in the future is kept within sight.
Overview of warehousing properties

No. of properties

14 properties

No. of rentable units

1,002 units

Total number of
warehousing properties
Area

No. ofproperties

Major regional cities

4

Other regional citis
Greater Tokyo area

7327

External Growth

External Growth(Steady enternal grwoth under the consistent investment policy (2))
List of warehousing properties
Information channel(sponsor)
M/U

AS Residence
Tsu City

Information channel(the asset management company)
M/U

Edobashi Tsu City,
Mie

No. ofrentable units

62 units

Completiondate

Feb-06

M/U

Location

Samty
Kumamoto
Keitokukomae

Close to universities

Samty
Nakahiro-dori

U

M/U

Samty
Noborimachi

Close to medical institution
and universities
M/U

Samty Tsurumi

Tsurumai Showa-ku,
Nagoya City

Nakahirodori-machi Nishi-ku,
Hiroshima City

Nobori-machi Naka-ku,
Hiroshima City

Tsurumi-cho Naka-ku,
Hiroshima City

No. ofrentable units

56 units

72 units

60 units

51 units

Completiondate

Jan-17Mar-07

Apr-08

Oct-08Location

Location

GRANDUKE
Tsurumai realeU

U

Uni Eʼterna
Nishinomiya Uegahara

GRANDUKE
Tsu Shinmachi

Samty Suizenji

M/USamty Honjo

Uegahara Nishinomiya City,
Hyogo

Shin-machi Tsu City,
Mie

Suizenji Chuo-ku,
Kumamoto City

Honjo Chuo-ku,
Kumamoto City

No. ofrentable units

62 units

69 units

119 units

99 units

Completiondate

Feb-07Jan-10Jul-06

Feb-18Studio Square
Takasagomachi

S-FORT
Kawaguchi Namiki

S-FORT Todakoen

CREST TOWER Kashiwa

Takasago-machi Oita City,
Oita

Namiki Kawaguchi City,
Saitama

Shimomae Toda City,
SaitamaKashiwa City,
Chiba

Location

Semba-machi
Chuo-ku,
Kumamoto City

No. ofrentable units

91 units

Location

Completion
date

Jan-08

No. ofrentable units

92 units

70 units

62 units

37 units

Completiondate

Dec-06

Jul-16

Jan-17Mar-0628

External Growth

External Growth(Utilization of abundant information/acquisition channels)
Status of pipeline

Status of information andacquisition channels

Property Name

Information
channels

Asset Management
Company

Sponsor

Acquisition
channels【Developed】

A

B

A

B

C

Third
party

【Owned・Warehousing】
C

BridgeDeveloppedOwned/
Ware
housing

Bridge

Third
party

D

Third
party

（SPC）】(Scheduled)units

completion date
Sep-17Naka-ku, Nagoya City

109 units② S-RESIDENCE Kikawa Higashi

Yodogawa-ku, Osaka City

Area
Major regional cities

177 units

Jan-18Major regional cities③ S-RESIDENCE Nagoyashi Higashiku Higashi-ku, Nagoya City

95 units

Dec-18Major regional cities④ S-RESIDENCE Suitashi Esakacho

Suita City, Osaka

153 units

Feb-19Other regional cities⑤ S-RESIDENCE Kawasaki Kaizuka

Kawasaki-ku, Kawasaki City

43 units

Feb-17

Greater Tokyo area

⑥ S-RESIDENCE Motoyawata

Ichikawa City, Chiba

81 units

Nov-18Greater Tokyo area

⑦ S-RESIDENCE Matsudo Honcho

Matsudo City, Chiba

52 units

Oct-18Greater Tokyo area

⑧ Samty Nakahiro-dori

Nishi-ku, Hiroshima City

72 units

Mar-08Major regional cities⑨ Samty Noborimachi

Naka-ku, Hiroshima City

60 units

Apr-08Major regional cities⑩ Samty Tsurumi

Naka-ku, Hiroshima City

51 units

Oct-08Major regional cities⑪ GRANDUKE Tsu Shinmachi

Showa-ku, Nagaya City

56 units

Jan-17

Major regional cities⑫ AS Residence Tsu City

Tsu City, Mie

62 units

Feb-06

Other regional cities
Other regional cities⑬ Samty Honjo

Chuo-ku, Kumamoto City

99 units

Feb-06⑭ Samty Suizenji

Chuo-ku, Kumamoto City

119 units

Jul-06

Other regional cities⑮ Studio Square Takasagomachi

Oita-City, Oita

92 units

Dec-06

Other regional cities⑯ Uni E'terna Nishinomiya Uegahara

Nishinomiya City, Hyogo

62 units

Feb-07

Other regional cities⑰ Samty Kumamoto Keitokukomae

Chuo-ku, Kumamoto City

91 units

Jan-08Other regional cities⑱ GRANDUKE Tsurumai reale

Tsu City, Mie

69 units

Jan-10

Other regional cities⑲ CREST TOWER Kashiwa

Kashiwa City, Chiba

37 units

Mar-06

Greater Tokyo area

⑳ S-FORT Kawaguchi Namiki

Kawaguchi City, Saitama

70 units

Jul-16

Greater Tokyo area

㉑ S-FORT Todakoen

Toda City, Saitama

62 units

Jan-17

Greater Tokyo area

Completion date

Area
Major regional cities

Total: 21 properties

B 【Bridge

No. of① S-RESIDENCE Nagoyashi Nakaku

Property Name

Sponser Support

Location

1,712 units

Location

No. ofunits① S-FORT Aoba Uesugi

Aoba-ku, Sendai City

66 units

Oct-07② S-FORT Toyohira Sanjo

Toyohira-ku, Sapporo City

63 units

Mar-08Major regional cities③ S-RESIDENCE Midoribashi SF

Higashinari-ku, Osaka City

148 units

Oct-16

Major regional cities④ Samty Nishinomiya Residence

Nishinomiya City, Hyogo

102 units

Mar-09Other regional cities⑤ College Square Hoya

Nishitokyo City, Tokyo

60 units

Mar-07

Greater Tokyo area

⑥ CQ Residence Tamagawagakuen

Machida City, Tokyo

60 units

Feb-08Greater Tokyo area

⑦ Trois Bonheur Honcho

Funabashi City, Chiba

117 units

Mar-08Greater Tokyo area

36 units

Nov-16

Greater Tokyo area⑧

S-RESIDENCE Yokohama

Kanagawa-ku,

TammachiYokohama City

Total: 8 properties

652 units

Properties owned by a third party,
considered for acquisition
Samty Residential Investment Corporation(Note) Acquisition of any properties described on this page
has not been decided as of the date of this document.

C【Third party's
properties whichconcluded sales
contract bysponsor】

Property Name

Location

No. of(Scheduled)units

completion dateArea

① Nagoyashi Nakaku Matsubara PJ

Naka-ku, Nagoya City

84 units

Feb-18Major regional cities② Niigata City Chuo PJ

Chuo-ku, Niigata City

83 units

Mar-18Other regional cities

Total: 2 properties

167 units

29

Internal Growth

Financial Strategy

Initiatives on Sustainability (1)Obtainment of DBJ Green Building Certification
The DBJ Green Building Certification

The DBJ Green Building Certification Program was launched by the Development Bank of Japan (DBJ)in April, 2011 for the purpose of supporting real estate properties with high environmental and social
awareness (Green Building).
The program evaluates, certifies and provides support for properties sought by society and theeconomy in performing comprehensive assessments of properties, while evaluating various factors
including communication with stakeholders, disaster prevention and proper care for surrounding
communities, in addition to the environmental performance of properties.

Future initiatives on sustainability

Recognizing the importance of environmental/social considerations as well as initiatives
to enhance tenant satisfaction, Samty Residential and Samty Asset Management aim tofurther improve unitholder value by promoting such initiatives.
Furthermore, in order to diversify fund procurement methods, we aim to proactively
obtain sustainability certifications for the S-RESIDENCE series, the sponsor-developed
properties we own, in particular, as well as for other properties we consider acquiring.

30

Internal Growth

Financial Strategy

Initiatives on Sustainability (2)Properties obtained DBJ Green Building Certification
A-11 S-FORT Nakajima Koen
Location：1-13-139, Minami Hachijo Nishi, Chuo-ku, Sapporo

Building with excellent
environmental
and social awarenessFirst obtainment of certification
for a residence in Hokkaido
Points recoganized:■Environmental consideration
through introduction of facilities
with high energy saving
performance, such as adoption of
LED lighting in common/exclusive
areas■Fully arranged facilities for
comfort of residents, such as floor
heating and perimeter heating

B-05 S-RESIDENCE Esaka
Location：12-31 Horoshiba-cho, Suita-shi, Osaka

Building with highenvironmental
and social awareness

Points recoganized:■Environmental consideration
through introduction offacilities with high energy
saving performance, such as
adoption of LED lighting incommon/exclusive areas31

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

Fix interest rates

Acquire credit ratings in the future32

５. Operating Results and Distribution Information

Management Forecast of the 5th and 6th Fiscal Periods(million yen)

Operating revenue
Operating income
Anonymous partnership revenue
Operating expenses
Real estate rental expenses
Miscellaneous rental expenses

5th fiscal period

Difference

4th fiscal period

Forecast

between 4th FP(July 31, 2017)(January 31,

results and 5th2018)

forecast

Assumptions for Management Forecastof the 5th and 6th Fiscal Periods

Difference■ Calculation period
The 5th fiscal period：
forecast and 6thAugust 1, 2017 to January 31, 2018
(July 31, 2018)
forecast
The 6th fiscal period :1,842
16Febuary 1, 2018 to July 31, 2018

6th fiscal period
Forecast

between 5th FP

1,840

1,826

-14

1,840

1,814

-26

1,820

-

11

11

22

1,081

1,047

-34

1,048

838

805

-32

807

1 ■ Period average month-end occupancy rate

288

254

-33

255

1

6 ■ Asset (No. of acquired properties
10
1

The 5th fiscal period：95.5%
The 6th fisca period : 95.5%

Taxes and dues

115

115

0

115

Depreciation

434

436

1

436

Real Estate rental income

1,001

1,008

6

1,013

Other operating expenses

242

241

-1

241

0 ■ No. of outstanding units

127

129

1

127

-1

Asset management fees
Other expenses
Operating income
Non-operating income and loss
Ordinary income
Corporate tax, etc.
Net income0

as of the date of this document）
The 5th fiscal period：49 properties
The 6th fisca period : 49 properties■ Balance of interest-bearing debt at end of period
The 5th fiscal period：28,600 million yen
The 6th fiscal period：28,600 million yen
5
0

114

112

-2

113

1 ■ Capital expenditures (planned amount)

759

778

19

794

15

-144

-163

-19

-179

-15

614

615

0

615

0

0

1

0

1

0

613

614

0

614

0
(yen)

Distribution per unit

2,670

2,670

-

2,670

2,169

2,170

1

2,170

501

500

-1

500

Distribution per unit
(Not including distribution in excess ofearnings)
Distribution in excess of earning per unit

(No. of investment units issued and outstanding
as of the date of this document)
The 5th fiscal period：283,000 units
The 6th fiscal period : 283,000 units(Note) Management forecasts for the 5th and 6th fiscal periods are the figures disclosed in the“Summary of Financial Results for Fiscal Period Ended July 2017” announced on September 14, 2017.

-

The 5th fiscal period：68 million yen
The 6th fiscal period : 68 million yen

Difference factors between 4th
FP results and 5th forecast■ Real estate rental revenue
Decrease in restoration income, key money, etc.
due to a decrease in tenant replacement during
the off-season:-26 million yen■ Real esate rental expenses
・Decrease in restoration expenses and leasing
promotion expenses due to a decrease in tenant
replacement during the off-season, decrease in otheroperating expenses:-22 million yen-

・Decrease in repair expenses due to value-adding work,
etc. conducted in the 4th fiscal period: -11 million yen■ Non-operating income and loss
Increase in borrowing related expenses assuming
partial refinancing of borrowings due for repayment
in the 6th fiscal period: -15 million yen

34

Outlook of Distribution
Continuing to pay stable distribution every fiscal period since listing
Aim to maintain/improve distribution level■Distribution policy
Distribution withpayout ratio aiming
for around 70%

Initial distribution

当初予想分配⾦
forecast (including

distribution in excessof earnings)

(yen)

507

592

予想

実績

2,138

第 期

予想

of earnings per unit

2,670

2,670

2,670

501

500

500

2,169

2,170

2170

実績

予想

予測

2,625

2,600
2,026

Distribution in excess
利益超過分配⾦

distribution in excessof earnings)

2,645

2,618

2,478

Distribution per unit

利益分配⾦
(Not including

実績
第 期

予想

第 期

第 期

第 期

35

Distribution Policy (1) Due to the characteristics of the portfolio, the ratio of depreciation to property acquisition price tends to be large, thus
Samty Residential aims to increase fund efficiency through optimal fund allocation and improvement of unitholder value overthe medium to long term.
 In regards to the 5th and the 6th Fiscal Period, Samty Residential determined that it is appropriate to conduct distributions inexcess of earnings in consideration of the market environment and financial conditions.
 Distribution amounts 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 capital and such, in
accordance with the situations of the time.

Cash will be allocated based on a comprehensive review of the external economic environment, real estatemarket 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[1st to 4th fiscal periods]
Distribution in excess of earnings per unit: 508 million yen

Reinforcement of the financial base by
reducing interest-bearing liabilities, etc.

[1st to 4th fiscal periods] Repaid amount: 1,412 million yen

Investment that should help enhance
the portfolioʼs profitability enhance[1st to 4th fiscal periods] Investment amount for Bridgefunds: 270 million yen

36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

Distribute payout ratio
aiming for 70%

Distribution(profits)

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

■6th fiscal period (July 2018)■5th fiscal period (January 2018)
1,500
1,000
500
0
(million yen)

FFO
1,050

Capex
68

AFFO
981

Distributions inexcess of earnings
141

225

Dipreciation
436

FFO
1,050

1,000

Dipreciation
436

500

Distributions
614

Net income
614

1,500

Capex
68

AFFO
981

Distributions inexcess of earnings
141

225

Distributions
614

Net income
614

0
FFO

CAPEX

AFFO

Total

Cash available

cash distribution

for use(million yen)

FFO

CAPEX

AFFO

Total

Cash available

cash distribution

for use37

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 8.4
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.

38

６. Appendix

Characteristics of Regional Residence Investments (1)Household growth rate (Year 2000 = 100%)＋23.0%＋20.1%＋25.0%＋20.4%＋19.2%＋14.0%＋18.6%＋16.7%＋17.1%＋30.0%Net Migration

Source: Prepared by Sumitomo Mitsui Trust Research Institute based on “Basic
Resident Registers,” Ministry of Internal Affairs and Communications

Growth rate from 2000 to 2016

Household growth rate of major
regional cities is comparable to thatof Greater Tokyo Area.
Growth rates of Sapporo City andFukuoka City surpass that of Tokyo
23 Wards.
Source: Prepared by Sumitomo Mitsui Trust Research Institute based on“Basic Resident Registers,” Ministry of Internal Affairs and Communications

Number of New Housing Starts(Year 2000＝100%）

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 Office40

Characteristics of Regional Residence Investments (2)Status of Investment into Residences by Listed J-REITs

After listing of Samty Residential (SRR) on June 30, 2015, the number of properties SRR acquired in areas other thanTokyo and Greater Tokyo Area accounts for 41.8% of that acquired by all listed J-REITs.

536
properties

Others351
24％(August 2017:1,668 properties）（January 2015:1,455 properties）

657
properties

Others434
26%＋83 properties（SRR:31 properties）
Aichi
111
7%

Aichi
92
6％
Osaka
93
7％

＋92 properties＋19 properties（SRR:10 properties）（SRR:3 properties）

Tokyo
1,011
60%

＋19 properties

Osaka （SRR:5 properties)

Tokyo
919
63％

112
7%

Number of properties owned by J-REIT(residence only)

Number of properties acquired
between January 2015 and August 2017

As of January 2015
(properties)

As of August 2017
(properties)

Tokyo

919

1,011

92

3

3.26%

Osaka

93

112

19

5

26.32%

Aichi

92

111

19

10

52.63%

Other

351

434

83

31

(Of which, Greater Tokyo area：Kanagawa・Saitama・Chiba）

(134)

(164)

(30)

(8)

Total

1,455

1,668

213

49

23.00%

402

493

91

38

41.76%Of which, Regional Cities
Source: Prepared by Samty Asset Management based on ARES J-REIT Property Database(Note）Total of each listed J-REITʼs owned residences at the end of January 2015 andend of the most recent fiscal period as of August 10, 2017.

All J-REIT(properties)

SRR (properties)

SRR share

37.35%

41

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

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.

Aim to realize dreams of all whom
Samty Group is involved with bycreating affluent urban
environments【Key StragtegyⅢ】
Roll-out of hotel
development business✓MoralContribute to society with sincerity
and a strong sense of ethics✓Passion
Never give up and work with passion✓Challenge
Open a new world with innovationand ingenuity【Key StragegyⅡ】【FinancialStrategy】

Strategic Investment inregional metropilitan
area

Maintain capital efficiency【Key StrategyⅠ】
Development ofbusiness model
centered on Samty
Residential Investment
Corporation

History and Operating Results

Change in the Operating Results of the Samty Group (Consolidated Basis)

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

Establish financila base

Established Fukuoka Branch Office(million yen)

Acquired shares in Samty AssetManagement Co., Ltd. to make ita wholly-owned subsidiary(million yen)

Established Sapporo Branch Office
Moved up to the First Section of
the Tokyo Stock Exchange.
Established Nagoya Branch Office

Established Tokyo Branch Office
Established Samty Kanri Co., Ltd.
that is engaged in property
management business

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

42

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 43

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

Property Name

No

LocationTypen Price(millionyen)Appraisal Value

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

rentableunits

Major regional cities
A-01

S-FORT Shin Osaka ravir

Yodogawa-ku, Osaka

Single / Compact

635

680

5.4

49

A-02

S-FORT Sanno

Nakagawa-ku, Nagoya

Single / Compact

2,890

3,260

6.2

230

A-03

S-FORT Fujigaoka

Meitou-ku, Nagoya

Single

750

830

6.0

80

A-04

S-FORT Chikushi Dori

Hakata-ku, Fukuoka

Compact

1,170

1,210

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

829

5.4

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

2,320

5.4

154

A-09

S-FORT Tsurumai marks

Naka-ku, Nagoya

Family

1,020

1,210

5.8

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

1,650

5.7

75

A-12

S-FORT Hokudai Mae

Kita-ku, Sapporo

Compact / Commercial

690

755

5.8

59

A-13

S-RESIDENCE Kobe Isogamidori

Chuo-ku, Kobe

Single / Compact

2,470

2,790

5.4

166

A-14

S-FORT Kyoto Nishioji

Shimogyo-ku, Kyoto

Single / Commercial

A-15

S-FORT Katahira

Aoba-ku, Sendai

Single / Compact

A-16

S-FORT Gakuenmae

Toyohira-ku, Sapporo

Single / Compact

462

485

5.9

48

A-17

S-RESIDENCE Shin Osaka Ekimae

Higashi Yodogawa-ku, Osaka

Single / Compact

2,489

2,760

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

992

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

742

5.6

40

A-22

S-FORT Tsurumai arts

Naka-ku, Nagoya

Family

680

804

5.8

28

A-23

S-FORT Tsurumai cubeNaka-ku, Nagoya

Compact / Family

570

670

5.7

32

A-24

S-FORT Fukuoka Higashi

Hakata-ku, Fukuoka

Compact

1,900

2,040

5.4

135

A-25

S-RESIDENCE Kobe Motomachi

Chuo-ku, Kobe

Single / Compact

1,200

1,370

5.6

81

A-26

S-FORT Kobe Kaguracho

Nagata-ku, Kobe

Single

1,858

2,160

6.2

168

A-27

S-FORT Nijo-jo mae

Nakagyo-ku, Kyoto

Single / Compact / Family

812

865

5.2

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 July 2017.

745

806

5.8

71

2,330

2,580

5.9

191

44

Portfolio List (2) Other Regional Cities / Greater Tokyo Area
List of acquired properties(Number of acquired properties as of the date of this document ）Acquisitio
Property
No

Property Name

LocationTypen Price(millionyen)Appraisal Value

Appraisal

Number of

at End of Period NOI yieldrentable(million yen)

(%)

units

Other regional cities
B-01

S-FORT Shizuoka HondoriAoi-ku, Shizuoka

Compact

B-02

S-FORT Suminodo

Daitou-shi, Osaka

Single / Compact

297

311

6.0

28

1,420

1,580

5.9

126

B-03

S-FORT Yokkaichi motomachi

Yokkaichi-shi, Mie

Compact

480

530

6.7

54

B-04

S-FORT Suzuka

Suzuka-shi, Mie

Compact

580

620

6.8

69

B-05

S-RESIDENCE Esaka

Suita-shi, Osaka

Single / Compact

2,323

2,540

5.3

138

B-06

S-FORT Utsunomiya

Utsunomiya-shi, Tochigi

Compact

612

642

6.1

52

B-07

S-FORT Yokkaichi Nishishinchi

Yokkaichi-shi, Mie

Compact / Family

630

715

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

C-01

S-FORT Maita Koen

Minami-ku, Yokohama

Single / Compact

987

1,050

5.2

70

C-02

S-FORT Nihombashi Hakozaki

Chuo-ku, Tokyo

Single / Compact

925

1,030

4.8

36

Greater Tokyo area

Total

C-03

S-FORT Itabashi Shimura

Itabashi-ku, Tokyo

Compact

645

685

4.8

32

C-04

S-FORT Shiomi

Koto-ku, Tokyo

Single

866

1,020

5.2

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

955

5.8

66

C-07

S-FORT Nishifunabashi

Funabashi-shi, Chiba

Single / Compact

C-08

S-FORT Maihama

Urayasu-shi, Chiba

Single

732

766

5.2

47

1,130

1,210

5.4

83

C-09

S-FORT Ichikawa

Ichikawa-shi, Chiba

Single / Commercial

809

869

5.2

51

C-10

S-RESIDENCE Yokosuka Chuo

Yokosuka-shi, Kanagawa

Single / Nursery

850

937

6.0

25

C-11

S-FORT Sagamihara

Sagamihara-shi, Kanagawa

Single

585

620

5.3

53

51,551

56,4905.6

3,754

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

45

Income and Expenditure by Property（1）Fiscal Period Ending July 2017 (As of July 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

S-FORT Sanno

S-FORT Fujigaoka

S-FORT Chikushi DoriApr-15, 2015

Apr-15, 2015

May-01, 2015

A-06

S-FORT Fukuoka

A-07

S-FORT Takamiya

Kencho Mae
Apr-15, 2015

May-01, 2015

S-FORT
Tsutsujigaoka Koen
Apr-15, 2015

635

2,890

750

1,170

979

794

1,340

(%)

1.2

5.6

1.5

2.3

1.9

1.5

2.6

Balance sheet amount(million yen)

645

2,957

757

1,193

1,007

809

1,383

(㎡)

1,290.84

8,138.40

1,960.00

3,706.56

2,566.72

2,105.13

3,609.49

Leased area(㎡)

1,134.00

7,745.02

1,886.50

3,664.96

2,468.00

2,055.45

3,443.85

Occupancy rate

(%)

87.8

95.2

96.3

98.9

96.2

97.6

95.4

181

181

181

181

181

181

181

20,902

114,444

29,45343,53435,86528,475

52,107

Real estate rental revenues

19,675

104,789

27,61939,523

33,66627,45845,467

Other lease business revenues

1,227

9,654

1,834

4,010

2,199

1,016

6,640

6,911

25,899

7,178

10,116

8,989

5,451

13,282

Management service fee

1,180

5,864

1,419

1,503

1,477

1,251

2,111

Taxes and dues

1,310

8,236

1,997

2,981

2,442

2,022

2,876

Utilities expenses

278

758

266

461

352

296

1,611

2,998

5,262

1,836

2,073

2,044

457

2,908

33

176

45

93

61

60

82

Total rentable area

(3) Regal estate rental expenses(thousand yen)

information

A-05(million yen)(thousand yen)expenses

A-04

Composition rate(1) Number of operating days

Income andA-03

Acquisition price(2) Total real estate rental income

（７）

A-02

Repair Cost
Insurance expenses
Trust fees

296

296

296

296

296

296

296

Other lease business expenses

814

5,304

1,316

2,707

2,315

1,066

3,396

(4) NOI(＝(2)-(3))(thousand yen)

13,99188,544

22,27433,417

26,87523,02338,825(5) Depreciation(thousand yen)

5,112

26,696

10,163

10,782

9,191

8,783

12,305

8,878

61,848

12,111

22,634

17,684

14,24026,519

-

-

-

2,157

-

1,844

-

13,99188,544

22,274

31,25926,875

21,17838,825(6) Real estate rental income（＝(4)-(5)）(thousand yen)
(7) Capital Expenditures(thousand yen)(8) NCF（＝(4)-(7))

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

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

S-FORT Tsurumai

S-FORT Rokuban-

S-FORT Nakajima

A-12

Namba Briller

marks

cho

Koen

Jul-01, 2015

Jul-01, 2015

Jul-01, 2015

Jul-01, 2015

S-FORT Hokudai Mae
Jul-01, 2015

A-13

A-14

S-RESIDENCE Kobe

S-FORT Kyoto

Isogamidori

NishiojiJul-01, 2015

Jul-01, 2015

2,020

1,020

722

1,590

690

2,470

745

(%)

3.9

2.0

1.4

3.1

1.3

4.8

1.4

Balance sheet amount(million yen)

2,081

1,081

736

1,647

722

2,543

769

(㎡)

3,631.60

2,772.00

1,833.29

5,292.65

2,287.22

4,372.45

1,657.31

Leased area(㎡)

3,534.25

2,640.00

1,448.20

4,786.53

2,250.25

4,372.45

1,454.11

Occupancy rate

(%)

97.3

95.2

79.0

90.4

98.4

100.0

87.7

181

181

181

181

181

181

181

70,66637,23322,02559,041

25,27887,22826,311

Real estate rental revenues

62,825

33,10920,52954,052

24,35578,02823,979Other lease business revenues

7,841

4,123

1,495

4,988

923

9,199

2,332

15,596

6,750

7,103

15,661

4,307

15,644

8,404Management service fee

2,547

2,287

1,199

2,661

1,039

2,695

1,720

Taxes and dues

5,022

1,683

1,693

4,818

1,620

5,422

1,464

Utilities expenses

837

175

201

1,244

358

445

1,096

2,053

1,023

2,258

4,398

463

2,529

2,151

Total rentable area

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

A-11

S-RESIDENCE(million yen)(thousand yen)

information

A-10

Composition rate(1) Number of operating days

Income andA-09

Acquisition price(2) Total real estate rental income

（７）

A-08

Repair Cost
Insurance expenses

103

55

38

120

52

115

45

Trust fees

394

296

296

394

296

394

296

4,638

1,229

1,416

2,024

476

4,040

1,629

(4) NOI(＝(2)-(3))

Other lease business expenses(thousand yen)

55,06930,482

14,922

43,37920,971

71,583

17,907(5) Depreciation(thousand yen)

13,803

9,736

7,480

13,378

5,291

18,371

7,811

41,266

20,746

7,441

30,001

15,67953,211

10,095

-

-

-

7,656

-

-

679

55,06930,482

14,92235,723

20,971

71,583

17,227(6) Real estate rental income（＝(4)-(5)）(thousand yen)
(7) Capital Expenditures(thousand yen)(8) NCF（＝(4)-(7))

47Income and Expenditure by Property（3）Fiscal Period Ending July 2017 (As of July 31, 2017)
Major regional cities(1) Area category
A-15(2) Property No.

A-16

A-17

(3) Property name

S-FORT Katahira

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

Oct-01, 2015

（５）
Price
information（６）
Leasing
information

A-21

S-FORT Aoi 1-Chome

S-FORT Aoi

S-FORT Kurumamichi

S-FORT Kamiotai

Aug-01, 2016

Aug-02, 2016

Aug-01, 2016

Aug-01, 2016

2,330

462

2,489

1,080

870

400

720

(%)

4.5

0.9

4.8

2.1

1.7

0.8

1.4

Balance sheet amount(million yen)

2,362

484

2,589

1,149

939

418

779

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(㎡)

5,054.35

1,717.71

4,510.60

2,062.90

1,842.68

1,153.73

2,361.96

Occupancy rate

(%)

92.2

97.7

99.5

94.4

100.0

95.0

90.0

181

181

181

181

181

181

181

87,463

17,67886,03632,851

28,351

15,29525,121

Real estate rental revenues

80,585

15,98778,947

29,201

26,481

13,912

22,771Other lease business revenues

6,877

1,690

7,088

3,649

1,869

1,382

2,349

20,090

4,630

16,241

9,540

6,880

3,539

8,571

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

A-20(million yen)(thousand yen)

information

Aug-02, 2016

A-19

Composition rate(2) Total real estate rental income

Income andOsaka Ekimae

A-18

Acquisition price(1) Number of operating days

（７）

S-RESIDENCE ShinManagement service fee

4,375

754

3,164

1,415

1,313

911

1,039

Taxes and dues

6,342

1,277

5,154

2,231

1,160

1,039

1,973

Utilities expenses
Repair Cost

666

327

879

336

179

154

266

5,752

952

2,558

1,936

162

1,153

2,149

Insurance expenses

144

31

92

44

31

24

48

Trust fees

296

276

296

296

-

-

296

2,511

1,011

4,096

3,278

4,033

257

2,799

(4) NOI(＝(2)-(3))

Other lease business expenses(thousand yen)

67,372

13,047

69,794

23,311

21,47011,755

16,549(5) Depreciation(thousand yen)

28,0204,680

18,993

7,368

4,869

2,380

6,261

39,351

8,367

50,801

15,942

16,601

9,375

10,287

687

-

161

-

-

-

10,172

66,685

13,047

69,63323,311

21,47011,7556,376(6) Real estate rental income（＝(4)-(5)）(thousand yen)
(7) Capital Expenditures(thousand yen)(8) NCF（＝(4)-(7))

48Income and Expenditure by Property（4）Fiscal Period Ending July 2017 (As of July 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
S-FORT Kobe

arts

cube

HigashiMotomachi

KagurachoAug-02, 2016

Aug-02, 2016

Aug-02, 2016

Aug-02, 2016

A-27

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

Composition rate

(%)

1.3

1.1

3.7

2.3

3.6

1.6

1.0

Balance sheet amount(million yen)

739

598

2,002

1,250

1,927

836

516

(㎡)

1,988.56

1,460.64

5,584.41

2,169.67

4,900.32

1,735.95

1,049.01

Leased area(㎡)

1,846.52

1,419.93

5,383.52

2,169.67

4,521.15

1,735.95

1,049.01

Occupancy rate

(%)

92.9

97.2

96.4

100.0

92.3

100.0

100.0

181

181

181

181

181

181

181

24,917

20,74564,59340,512

69,917

23,24914,797

Real estate rental revenues

23,065

19,39557,27339,222

67,087

23,248

14,797

Other lease business revenues

1,851

1,349

7,320

1,290

2,830

0

0

3,815

4,254

12,341

5,744

13,698

1,959

1,297

Management service fee

1,227

1,152

2,164

1,641

2,326

-

-

Taxes and dues

1,211

995

3,884

2,886

4,309

1,357

787

Utilities expenses

148

125

482

293

540

-

-

Repair Cost

586

335

3,622

123

4,980

269

182

Insurance expenses

33

29

98

47

76

28

18

Total rentable area

(3) Regal estate rental expenses(thousand yen)

information

A-25
S-RESIDENCE Kobe

Aug-02, 2016

(thousand yen)expenses

A-24
S-FORT Fukuoka(million yen)

(2) Total real estate rental income

Income and

A-23
S-FORT Tsurumai

Acquisition price(1) Number of operating days

（７）

A-22
S-FORT Tsurumai

Trust fees
Other lease business expenses

-

296

296

296

296

296

296

609

1,319

1,792

455

1,168

8

13

(4) NOI(＝(2)-(3))(thousand yen)

21,102

16,491

52,251

34,76856,21821,28913,499(5) Depreciation(thousand yen)

4,478

4,094

13,360

9,932

12,268

6,025

3,580

16,623

12,39738,891

24,83543,95015,263

9,919

-

-

351

-

-

107

-

21,102

16,491

51,89934,76856,21821,181

13,499(6) Real estate rental income（＝(4)-(5)）(thousand yen)
(7) Capital Expenditures(thousand yen)(8) NCF（＝(4)-(7))

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

Major regional cities(2) Property No.

A-29(3) Property name(4) Acquisition date
（５）
Price
information（６）
Leasing
information

Acquisition price(million yen)

Composition rate

S-FORT Miyamachi

S-FORT Miyamachi

S-FORT Suminodo

Aug-02, 2016

Apr-15, 2015

Apr-15, 2015

1,085

297

B-04

Motomachi
Jul-01, 2015

1,420

B-05

S-FORT Suzuka

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

304

1,442

509

613

2,406

642

Total rentable area(㎡)

2,213.12

911.403,332.16

1,691.28

2,286.69

3,739.30

2,330.64

Leased area(㎡)

2,093.28

813.75

3,091.97

1,691.28

2,090.73

3,632.67

2,017.29

Occupancy rate

(%)

94.6

89.3

92.8

100.0

91.4

97.1

86.6

181

181

181

181

181

181

181

38,884

11,46653,50922,62526,011

76,234

23,137

Real estate rental revenues

33,61910,943

46,584

19,17821,82372,29821,059Other lease business revenues

5,265

522

6,924

3,446

4,187

3,935

2,077

12,272

3,699

11,637

5,680

8,026

11,6297,636Management service fee

1,778

1,104

1,808

1,421

1,622

2,484

1,441

Taxes and dues

1,838

852

2,900

1,117

1,714

4,328

2,282

Utilities expenses

1,309

200

1,531

667

1,083

340

469

Repair Cost

5,013

940

2,837

833

1,313

1,516

1,454

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

B-03
S-FORT Yokkaichi

1,117(thousand yen)

information

B-02

(%)

(2) Total real estate rental income

（７）

B-01

(million yen)

Balance sheet amount(1) Number of operating days

Income andOther regional cities

Insurance expenses

34

24

87

37

53

79

42

Trust fees

296

296

296

296

296

296

296

2,001

281

2,176

1,306

1,942

2,582

1,650

(4) NOI(＝(2)-(3))

Other lease business expenses(thousand yen)

26,611

7,766

41,872

16,944

17,98464,605

15,500(5) Depreciation(thousand yen)

8,845

3,136

14,884

6,236

7,335

14,8405,253

17,766

4,629

26,987

10,708

10,64949,765

10,247

-

214

-

536

2,077

-

971

26,611

7,552

41,872

16,407

15,90664,605

14,529(6) Real estate rental income（＝(4)-(5)）(thousand yen)
(7) Capital Expenditures(thousand yen)(8) NCF（＝(4)-(7))

50Income and Expenditure by Property（6）Fiscal Period Ending July 2017 (As of July 31, 2017)
Other regional cities(1) Area category
B-07(2) Property No.

S-FORT Yokkaichi(3) Property name

（５）
Price
information（６）
Leasing
information

Aug-02, 2016

Aug-02, 2016

Apr-15, 2015

S-FORT Itabashi

C-04

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)

688

1,098

392

997

956

658

889

(㎡)

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

1,540.75

1,066.38

1,119.54

1,042.48

Occupancy rate

(%)

100.0

100.0

100.0

95.7

95.7

100.0

100.0

181

181

181

181

181

181

181

27,38536,153

12,89833,35427,98321,05529,220Real estate rental revenues

23,32935,537

12,64930,72924,191

19,88826,315

Other lease business revenues

4,055

616

249

2,625

3,791

1,167

2,905

6,084

3,870

1,427

7,018

6,968

5,153

5,721

Total rentable area

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

S-FORT Maita Koen

Idaimae

C-03

S-FORT Nihonbashi(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

Greater Tokyo area

B-08

Management service fee

1,515

-

-

2,444

1,564

1,294

1,878

Taxes and dues

1,419

3,021

961

1,993

1,291

1,298

1,349

Utilities expenses

854

-

-

338

426

277

438

Repair Cost

935

457

139

832

2,092

1,252

603

Insurance expenses

36

86

23

52

35

32

39

-

296

296

296

394

394

394

Trust fees

1,322

9

7

1,059

1,163

604

1,018

(4) NOI(＝(2)-(3))

Other lease business expenses(thousand yen)

21,30032,283

11,47026,33621,014

15,902

23,498(5) Depreciation(thousand yen)

6,098

13,866

4,584

9,207

5,082

4,144

6,070

15,202

18,416

6,886

17,12815,932

11,757

17,428

-

993

-

132

1,501

-

408

21,30031,28911,47026,203

19,513

15,90223,090(6) Real estate rental income（＝(4)-(5)）(thousand yen)
(7) Capital Expenditures(thousand yen)(8) NCF（＝(4)-(7))

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

Greater Tokyo area

(2) Property No.

C-05(3) Property name

S-FORT Noborito(4) Acquisition date
（５）
Price
information（６）
Leasing
information

Jul-01, 2015

Acquisition price(million yen)

Composition rate

Hiratsuka

Nishifunabashi

Jul-01, 2015
666

C-08

Jul-01, 2015
818

732

C-09

C-10

S-FORT Maihama

S-FORT Ichikawa

Jul-01, 2015

Jul-01, 2015

1,130

C-11

S-RESIDENCE

S-FORT Sagamihara

Yokosuka Chuo
Aug-02, 2016809

Aug-02, 2016

850

585

1.3

1.6

1.4

2.2

1.6

1.6

1.1

864

745

1,158

834

890

604

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(㎡)

996.601,663.10

1,353.89

1,705.68

1,234.08

1,492.09

1,153.63

Occupancy rate

(%)

97.5

96.8

96.9

98.8

98.3

100.0

96.3

181

181

181

181

181

181

181

20,654

34,051

25,48037,95028,30829,64020,390Real estate rental revenues

19,52630,50623,54833,53926,15729,52018,766

Other lease business revenues

1,128

3,545

1,932

4,411

2,151

120

1,623

5,252

6,942

6,614

7,738

6,914

3,717

6,024

Management service fee

1,277

2,549

1,530

1,911

2,213

1,392

1,572

Taxes and dues

1,088

1,907

1,356

1,381

1,504

2,286

1,332

Utilities expenses

220

202

294

612

790

-

431

Repair Cost

942

429

1,705

1,657

1,145

-

1,011

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

S-FORT

678(thousand yen)

information

S-FORT Shonan(%)(2) Total real estate rental income

Income andC-07(million yen)

Balance sheet amount(1) Number of operating days

（７）

C-06

Insurance expenses

31

42

34

44

39

34

26

Trust fees

394

394

394

394

394

-

197

1,297

1,416

1,299

1,735

827

4

1,452

(4) NOI(＝(2)-(3))

Other lease business expenses(thousand yen)

15,402

27,10818,86630,212

21,39425,922

14,365(5) Depreciation(thousand yen)

5,379

6,467

6,138

6,872

3,166

7,636

4,396

10,023

20,64012,727

23,33918,22718,285

9,968

579

-

-

2,786

7,954

-

-

14,822

27,10818,86627,426

13,43925,922

14,365(6) Real estate rental income（＝(4)-(5)）(thousand yen)
(7) Capital Expenditures(thousand yen)(8) NCF（＝(4)-(7))

52Financial Documents: Balance Sheet (1)(Unit：thousand yen）
Previous Fiscal Year
(January 31, 2017)(Unit：thousand yen）

Current Fiscal Year
(July 31, 2017)

Previous Fiscal Year
(January 31, 2017)

Current Fiscal Year
(July 31, 2017)

AssetsCurrent Assets
Cash and deposits

693,393649,743

Investments and other assets

1,012,187

991,688

Investment securities

Operating accounts receivable
Prepaid expenses

7,807
66,9605,175
67,979Lease and guarantee deposits
Long-term prepaid expenses

Consumption tax receivable

61,006-16

15

Total non-current assets

1,794

132

deferred assets

1,843,165

1,714,734

Cash and deposits in trust

deferred tax assets
Other
Total-current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net

2,197,790

2,204,081-25,180-50,553

2,172,609

2,153,527

686

686

-46

-136

640

549

1,521,625

1,523,123

Buildings in trust

29,808,193

29,829,883

Accumulated depreciation-1,016,837-1,413,203

Buildings in trust, net

28,791,355

28,416,680

518

7,638

Accumulated depreciation

-5

-131

513

7,507

Machinery and equipment in trust

468,125

468,125

Accumulated depreciation-30,290-41,580

Machinery and equipment in trust, net

437,835

426,544

Tools, furniture and fixtures in trust

11,25024,415

Accumulated depreciation-1,848-3,473Tools, furniture and fixtures in trust, net

9,401

20,942Land in trust

20,879,603

20,879,603

Total property, plant and equipment

53,813,584

53,428,479

Structures in trust, net

250,000
10,45583,008125,254

343,463

53,938,839

53,771,943

Investment unit issuance expenses

23,246

18,632

Investment corporation bond issuance costs

23,51620,188

Total deferred assets

Land

Structures in trust

Total investments and other assets

1,712
10,445
113,096

Total Assets

46,76338,821

55,828,768

55,525,499

53

Financial Documents: Balance Sheet (2)(Unit：thousand yen）
Previous Fiscal Year
(January 31, 2017)

Current Fiscal Year
(July 31, 2017)

Liabilities
Current liabilities
Operating accounts payable

113,842

94,166

Short-term loans payable

550,000

400,000-

5,000,000

Accounts payable – other

26,60017,588

Accrued expenses

6,300

6,512

Accrued dividend

3,719

9,616

-

8,001

Current portion of long-term loans payable

Accrued consumption taxes
Income taxes payable
Advances received
Deposits received
Total current liabilities

936

699

256,642

258,657

3,626

4,792

961,6675,800,034

Non-current liabilities
Investment corporation bonds

1,000,000

1,000,000

Long-term loans payable

27,200,000

22,200,000

Tenant leasehold and security deposits

30,44630,538Tenant leasehold and security deposits in trust

239,418

232,324

28,469,865

23,462,862

29,431,533

29,262,896

26,015,517

26,015,517-223,449-366,930

25,792,068

25,648,587

Unappropriated retained earnings

605,166

614,015

Total surplus

605,166

614,015

26,397,234

26,262,602

Total net assets

26,397,234

26,262,602

Total liabilities and net assets

55,828,768

55,525,499

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

54

Financial Documents：Statement of Income(Unit：thousand yen）
Previous Fiscal Year
(January 31, 2017)

Current Fiscal Year
(July 31, 2017)

Operating revenue
Rent revenue - real estate
Other lease business revenues

1,679,137

1,686,773

127,316

153,721

1,806,453

1,840,495

Expenses related to rent business

766,106

838,806

Asset management fee

76,246

127,808

Asset custody fee

3,591

4,941

Administrative service fees

36,53635,814

Total operating revenue
Operating expenses

Directorsʼ compensations

2,400

2,400

Remuneration for Accounting Auditors

10,00010,000

Other operating expenses

61,68061,605

Total operating expenses

956,561

1,081,377

849,892

759,118

Operating income
Non-operating income
Interest income

23Interest on refund-

88

Total non-operating income

2

91

100,948

99,225

3,843

3,864

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

130,983

33,354

Amortization of investment unit issuance
expenses

4,664

4,613

Amortization of investment corporation bondissuance costs

3,364

3,327

243,805

144,385

Ordinary income

Total non-operating expenses

606,089

614,824

Net income before income taxes

606,089

614,824

Income taxes – current

937

920

Deferred Income taxes

-4

0

933

921

605,156

613,902

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

9112605,166

614,01555

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

(Unit：thousand yen）
Previous Fiscal Year

Current Fiscal Year

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

Previous Fiscal Year

Current Fiscal Year

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

Cash flows from investing activities

Cash flows from operating activities
Net income before income taxes

606,089

614,824

Purchase of property, plant and equipment-3,720,102-7,788Depreciation

434,908

434,869

Purchase of property, plant and equipment in trust-18,183,309-29,826

-221

-10

60

-

Repayments of lease and guarantee deposits received-1,125-1,547

Proceeds from lease and guarantee deposits received

31,571

1,638-17,374-29,654

107,078

22,559--250,000Interest income-2-3

104,792

103,089

4,664

4,613

3,364

3,327

Decrease (increase) in operating accounts receivable-4,633

2,632

Decrease (increase) in consumption taxes receivable-61,006

61,006

Interest expenses
Amortization of investment unit issuance expenses
Amortization of investment corporation bond issuancecosts

Decrease (increase) in consumption taxes payable-4,5558,001

Decrease (increase) in prepaid expenses-21,846-1,019

Increase (decrease) in operating accounts payable

51,021-31,824

Increase (decrease) in accounts payable – other

16,194-9,012

Increase (decrease) in advances received

106,485

2,015

Decrease (increase) in long-term prepaid expenses-28,737

30,088Other, net

19,7802,958

1,226,520

1,225,567

23Interest expenses paid

-99,514-102,877

Income taxes – current-828-1,287

1,126,178

1,121,405

SubtotalInterest income received

Cash flows from operating activities

Payment for lease and guarantee deposits
Proceeds from collection of lease and guarantee
deposits

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

20,0001,712-21,763,420-292,915

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

400,000

Decrease in short-term loans payable-462,000-550,000

Proceeds from long-term loans payable

11,200,000-

973,118-

Proceeds from issuance of investment corporation
bonds
Proceeds from issuance of investment units

9,972,553-

Dividends paid

-426,000-742,638

21,257,672-892,638

Cash flows from financing activities
Net increase (decrease) in cash and cash equivalents

620,430-64,148

Cash and cash equivalents at the beginning of period

1,085,150

1,705,580

Cash and cash equivalents at the end of period

1,705,580

1,641,431

56

Unitholder Information (1)Number of Units and Number of Unitholders by Unitholder Type
Number of units by unitholder type and number of unitholders by unitholder typeEnd of 4th

Financial Institutions

period(including financial dealers)

31,195 units

6,730 units

149,464 units(July 31, 2017)95,611 units[11.0%][2.4%][52.8%]

283,000 units[33.8%]

0%

10%

Other domestic corporations Overseas investors

20%

30%

40%

50%

60%

Individuals / Other

70%

80%

90%

100%

Unitholder Information
Number of units by

As of July 31,

As of January

As of July 31,

Number of unitholders by

As of July 31,

As of January

As of July 31,

unitholder type2016

31, 2017

2017

unitholder type2016

31, 2017

2017

Financial Institutions

53,419 units

88,799 units

95,611 units

Other domestic corporations

19,699 units

28,285 units

31,195 units

Overseas investors

5,590 units

8,038 units

Individuals / Other

84,632 units

Total

163,340 units(including financial dealers)

Financial Institutions

51 people

59 people

53 people

Other domestic corporations

186 people

262 people

235 people

6,730 units

Overseas investors

46 people

53 people

53 people

157,878 units

149,464 units

Individuals / Other

10,999 people

16,906 people

16,725 people

283,000 units

283,000 units

Total

11,282 people

17,280 people

17,066 people(including financial dealers)57

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

Investment
units(units)

Ratio(%)

Japan Trustee Services Bank Ltd. (Trust Account)

24,554

8.67

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

13,177

4.65

Samty Co., Ltd.

12,374

4.37

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

12,208

4.31

Kinki Sangyo Credit Union

12,000

4.24

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

7,698

2.72

Osaka co-sei Shinkin Bank

5,820

2.05

Daido Shinyoukumiai

4,957

1.75

Daiwa PI Partners Co.Ltd.

4,244

1.49

Individual

3,632

1.28

Total of major unitholders (top 10)

100,664

35.57

Total of units

283,000

100.0058

Change in Investment Unit Price(June 30, 2015 to August 31 2017)

Source: Prepared by Samty Asset Management based on Tokyo Stock Exchange, Inc. Database59

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.

60