For the36th Fiscal Period

Sustainability Report
Please visit our Sustainability Report website at the following URL or by using the QR code.
https://www.daiwahouse-reit.co.jp/file/en-esg_reportse7c77a55828626c9d757df03a50c80385e1e2ca6.pdf

https://www.daiwahouse-reit.co.jp/en/
Securities Code8984

Semi-Annual Report
From September 1, 2023 to February 29, 2024

Overview of the 36th Fiscal Period Ended February 29, 2024

Financial Highlights

We would like to report on the financial results and give an overview of operations of Daiwa House REIT Investment Corporation

Distributions(hereinafter referred to as “DHR”) in the 36th fiscal period ended February 29, 2024.
DHR acquired one hotel property (acquisition price of approximately ¥5.1 billion) in September 2023 and one logistics property

Distributions per Unit (Note 1)

Forecast Distributions per Unit (Note 2)(acquisition price of approximately ¥3.1 billion) in October 2023. As a result, DHR’s portfolio as of the end of the current fiscal period
consisted of 232 properties with an asset size of ¥905.7 billion (total acquisition price). Our occupancy rate at the end of the current
fiscal period was 99.8%. In addition, DHR acquired one logistics property (acquisition price of approximately ¥30.0 billion) in March
2024, which falls in the following fiscal period.

¥

Looking ahead, the Japanese economy, despite the current rise in prices, is expected to recover gradually due to factors that include
recovery in personal consumption amid rising wages, solid capital investment, and growth in inbound tourism. Meanwhile, we must

37th period

36th Fiscal Period

¥

5,750

¥

6,300

(From March 1, 2024 to August 31, 2024)

5,711

38th period
(From September 1, 2024 to February 28, 2025)

be aware of the future impact on economic activities from factors including trends in monetary policy by the Bank of Japan and other(From September 1, 2023 to February 29, 2024)*Distribution payments start date is May 13, 2024.

central banks in the world, the risk of economic recession in overseas economies, the trends of commercial real estate market in the(Note 1) Distributions per unit for the fiscal period ended February 29, 2024 include distributions in excess of earnings of ¥1,220 (including return of capital of ¥23).

United States, economic stagnation in China, and the surging resource prices.

(Note 2)	Forecast distributions per unit are as of April 16, 2024, and actual distributions per unit may vary from the forecast. These forecasts also do not guarantee the amount of distributions.
	In addition, distributions per unit include distributions in excess of earnings, and we forecast distributions in excess of earnings per unit of ¥497 (including return of capital of ¥62)
for the fiscal period ending August 31, 2024 and ¥1,395 (including return of capital of ¥35) for the fiscal period ending February 28, 2025.

DHR will work to continuously improve unitholder value by ensuring stable revenue and steady growth of its portfolio over the medium
to long term through full utilization of its sponsor Daiwa House Group’s comprehensive strengths and knowhow regarding real-estate

Distributions per Unit

development.
(Yen)
7,000

In closing, we ask for the continued support of our unitholders and the investment community as we move forward.

6,000

6,040

5,773

6,118

5,856

5,822

5,427

5,617

5,649

5,643

5,711

Aug. 2022

Feb. 2023

Aug. 2023

Feb. 2024

5,000
4,000
3,000
2,000
1,000

0

Tsuyoshi Saito

Koichi Tsuchida

Executive Director

President and CEO

Daiwa House REIT Investment Corporation

Daiwa House Asset Management Co., Ltd.

･ ･ ･ ･

2

III. Statements of Income and Retained Earnings

Financial Highlights•••••••••••••••••••••••••••••••••••••••••••••

3

IV. Statements of Changes in Net Assets

Portfolio Highlights••••••••••••••••••••••••••••••••••••••••••••••

4

V. Statements of Cash Flows••••••••••••••••••••••••••••••••••••

5

VI. Notes to Financial Statements•••••••••••••••••••••••••••••

59••••••••••••••••••••••••••••••••••••••••••••••••••

9

VII. Independent Auditor’s Report•••••••••••••••••••••••••••••

84••••••••••••••••••••••••••••••••••••••••

87

Initiatives to Pursue Growth
ESG Initiatives
I.

Asset Management Report

II. Balance Sheets2••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••••

10
53

Investor Information

Feb. 2020

Aug. 2020Feb. 2021

Aug. 2021

Feb. 2022

Operating Results

CONTENTS
Overview of the 36th Fiscal Period Ended February 29, 2024

Aug. 2019••••••••••••

55•••••••••••••••••••••

56•••••••••••••••••••••••••••••••••

58

Fiscal period ended August 31, 2023

Fiscal period ended February 29, 2024

Operating revenues¥29,920 million¥29,643 million

Operating income¥12,914 million¥12,138 million

Net income¥11,224 million¥10,378 million

Asset size
(acquisition price basis)LTV(excluding goodwill)¥905.7 billion
45.1%

Period-end occupancy rate Credit rating

99.8%

JCR : AA (Stable)
R&I : AA- (Stable)
3Portfolio Highlights

Initiatives to Pursue Growth

Summary (As of March 1, 2024)

Execution of Growth Strategy in Response to Changing Environment

Number of properties

Asset size (acquisition price basis) 

233 properties

Execution of growth strategy in response to shifts in the financial environment and economic trends romotion of property replacement to enhance internal growth and flexible execution of financeP
strategy with a focus on cost of capital

935.7 billion¥

Logistics

Residential

Retail68 properties ¥503.2 billion

129 properties ¥240.3 billion

23 properties ¥123.2 billion

Hotel

Other assets¥

27.3 billion

By asset class

6 properties¥

41.6 billion

By area

Hotel

Other assets

2.9%

4.5%

Other areas
Greater
Osaka
area

66.8%

95.5%
Logistics

25.7%

53.8%

4.1%
Less than
5 years

12.5%

Less than 10 years

33.3%

77.8%

Residential

20 years or more

40.3%

The threemajor metropolitan
areas of Japan

7.8%

Core assets

15 years ormore but lessthan 20 years

GreaterTokyo area

Greater
Nagoya area

3.2%

10 years ormore but lessthan 15 years

5 years ormore but lessthan 10 years

22.4%

20.7%

Current measures

Retail• Expanded asset size to over ¥900.0
billion by aggressive property
acquisitions in a low interest rateenvironment• Carefully selected and acquired
properties with focus on logistics
properties, utilizing sponsor pipeline

Internal growth

Financial strategy• Steadily increased rents mainly forresidential properties• Secured earnings even during
the COVID-19 pandemic by longterm contract of BTS type logistics
properties and fixed rent contract at
retail and hotel properties• Raised funds for growth by timely
capital increase through public
offerings• Lengthened and diversified debt
maturities and fixed interest rates
taking advantage of a low interest rateenvironment

By property age

22.2%

13.2%

Past measures

7 properties

External growth

Finance strategy capturingchanges in market environment

Portfolio restructuring

Strengthening internal growth• Promote property replacement moreproactively• Continue stable internal growth mainly
for residential properties• Control financing costs in refinancing• Acquire properties with internal growthpotential Sell properties withprospect for lower earnings• Pursue internal growth by increasing
variable rent for hotel properties• Add on to distributions per unit (DPU)
by utilizing gain on sale• Implement strategic CAPEX and repairs• Repurchase own investment units• Improve portfolio quality throughinitiatives for redevelopment andreconstruction• Control LTV appropriately

Trends of Asset Size (Acquisition Price Basis) and Occupancy Rateat the End of the Fiscal Period(Yen in billions)
1,100.0
99.4%

Asset size (acquisition price basis) (LHS)

99.5%

99.7%
99.4%

99.4%

Occupancy rate at the end of the fiscal period (RHS)

99.7%

99.7%

99.6%

99.8%

(%)
100

99.3%

1,000.099

98¥819.1 billion ¥820.1 billion ¥824.2 billion
800.0¥744.8 billion ¥745.6 billion

97

700.0
96
600.0
95

500.0
0

Acquisition:	Multi-tenant type logistics property ina prime location
Sale:
Three BTS type logistics properties

Total number ofinvestment units thatcan be repurchased

14,000 units (maximum)(0.60% of total units issued)

Total amount ofinvestment units tobe repurchased¥3,000 million (maximum)

Period of repurchase

From April 17, 2024
to July 12, 2024

Acquisition of quality
property utilizing pipeline

Improvement of portfolio quality
through rejuvenation of property age
D Project Tomisato

D Project Kaminokawa

D Project Kuki II

0Aug. 20194

Repurchase of own investment units

DPL Urayasu III

Actual measures¥895.1 billion ¥895.1 billion ¥895.1 billion ¥897.5 billion ¥905.7 billion

900.0

Property replacement with sponsor groupFeb. 2020

Aug. 2020Feb. 2021

Aug. 2021

Feb. 2022

Aug. 2022

Feb. 2023

Aug. 2023

Feb. 2024

5

Initiatives to Pursue Growth

Initiatives to Pursue Growth

Property replacement with sponsor group

Sale

Sale of three BTS type logistics properties

 cquired multi-tenant type logistics property in a prime location in the greater Tokyo area fromA
the sponsor partially financed by green loans on favorable terms

D Project Tomisato

D Project Kaminokawa

D Project Kuki II

Selling three BTS type logistics properties (¥22.5 billion) to the fund set up by the sponsor group

Acquisition

DPL Urayasu III

Urayasu City Athletic ParkTokyo
Disney D Project Urayasu I
Sea
D Project Urayasu III

DPL Urayasu III

Location

Urayasu City, Chiba

Location

Tomisato City, Chiba

Kawachi District, Tochigi

Kuki City, Saitama

Construction date

September 9, 2022

Construction date

April 23, 2015

December 24, 2010

June 21, 2013

Acquisition price¥30,000 million

Anticipated sale price¥5,970 million¥6,510 million¥10,100 million

Appraisal value¥31,100 million

Estimated gain orloss on sale

¥1,430 million¥(604) million¥2,330 million

Acquisition date

March 1, 2024

Anticipated sale dateAugust 30, 2024

August 30, 2024

September 2, 2024

Appraisal NOI yield

3.5%

NOI yield (Note)

4.6%

3.5%

3.1%

Forecast NOI yield (Note)

3.9%(Note) Actual annualized NOI for the fiscal period ended February 29, 2024 divided by anticipated sale price(Note) Annualized NOI (adjusted for property taxes) in the forecast for the fiscal period ending
August 31, 2024 divided by acquisition price

D Project Urayasu II

Significance of the sale
Selling the properties at appraisal value to the fund set up by the sponsor groupReplacing properties utilizing value chain of Daiwa House Group to improve portfolio quality

Located approximately 3 km from Urayasu IC on Metropolitan Expressway Wangan Route, highly convenient forcovering the entire greater Tokyo area ocated in the main area of concentrated large-scale logistics facilities and factories where the property can operateL
24 hours a day

Real estate development

Highly versatile multi-tenant type property equipped with refrigerating facilities on the first floor

Construction contract

Awarded environmental certifications of “5 Stars” for BELS and “A” rating for CASBEE for Buildings (New Construction)
Financed green loans of ¥5.0 billion at lower spreads than before for the acquisition
Financed short-term floating-rate loans of ¥10.0 billion to control LTV and financing costs

LenderAmountTerm(Yen in millions) (Interest rate type)

Mizuho Bank, Ltd.
The Chiba Bank, Ltd.
The Keiyo Bank, Ltd.
The Yamaguchi Bank, Ltd.
Kansai Mirai Bank, Limited
6

5,000

5.0 years(Fixed)LenderAmountPlanning /DesignFeedback

Management /Operation

Acquisition

Sale

Land for future
redevelopment

Daiwa House REIT

Term

(Yen in millions) (Interest rate type)

Sumitomo Mitsui Trust
Bank, Limited

2,500

Sumitomo Mitsui Banking
Corporation

2,500

MUFG Bank, Ltd.

2,500

Mizuho Bank, Ltd.

2,500

1.0 year(Floating)Construction

Tenant leasing

Sale

Acquisition

7

Initiatives to Pursue Growth

ESG Initiatives

Initiatives to Increase Unitholder Value

Improved External Evaluations by Promoting ESG Initiatives
CDP Climate Change ProgramImplementing our first repurchase of own investment units 023 CDP Climate Change Program: Awarded the highest score of “A” and named2
on the “A List” for three consecutive years

 iming to increase unitholder value by improvement of portfolio quality through property replacementAand flexible capital policy initiatives

External Growth / Property Replacement

2023 CDP Supplier Engagement Rating: Listed on the CDP Supplier Engagement
Rating Leaderboard (the highest rating) for four consecutive years

Finance Strategy / Capital Policy<CDP Score>

Acquisition
DPL Urayasu III

Mar. 1
Fiscal period ending August 31, 2024

Sale
D Project
Tomisato

Repurchase ofown investment units

D Project
Kaminokawa

D Project Kuki II

EffectMaximum 14,000 units

Period ofrepurchase(0.60% of total units issued)

A

A

A

2021

2022

2023

A-

AB
BC
CD
F

July 12

Improving portfolio quality:

Improving capital efficiency
Providing returns to unitholders

F
2019

2020

+approximately ¥30 (Note)
Effect of improvementin DPU level

First in J-REITs
Debt Repayment

Disclosed nature-related information alignedwith the “TNFD Recommendations”

First in J-REITs

Only J-REIT to be selected

Registered as a “TNFD Adopter”

Selected as “Environmentally Sustainable
Company” for two consecutive years andas “Progressive Company in Environmental
Disclosure” for the first time in ESG FinanceAwards Japan

Stable LTV control
Planning to allocate part ofthe proceeds from sale ofproperties to repayment of debt

EffectRejuvenating property age and acquiring
competitive properties

Included in “Dow Jones Sustainability Asia/
Pacific Index” for the first timeAwarded the “Best Recommendation Award
in Governance Category” in the “ARES ESG
Award 2023” for the first time

Certified as one of “Bright 500,” the top
500 corporations in the “2023 Health &Productivity Management Outstanding
Organizations (SME category)” for two
consecutive years (Asset manager)

Submitted PRI annual report for the first time
(Asset Manager)

Improving capital efficiency and providing
returns to unitholders:
Improving NAV per unit and DPU

Securing gain on sale:Controlling LTV:

Providing returns to unitholders while handling
unrealized loss

By repayment of debt, planning to reduce financing
costs and lower temporarily increased LTV

Promote property replacement
to enhance internal growthA

D-

Fiscal period ending February 28, 2025

Sale

Maximum ¥3.0 billion

After repurchase, planningto cancel the units during
the fiscal period ending
August 31, 2024

Aug. 30

Sept. 2

Repurchase and cancellationof own investment units at
discount to NAV

Apr. 17

Implement
initiatives
to increase
unitholder value

Continue flexible measuresattentive to capital cost

Policy, governance and strategy
Real estate
Confidence-building measures

Initiatives for Unitholders(Note) This is an estimated figure calculated based on financial results for the fiscal period ended February 29, 2024 and assuming the investment unit price at the end of
March 2024 as the average purchase price. Accordingly, the actual results may deviate from such estimated figure depending on the actual total amount and numberof investment units repurchased.
8 HR disclosed “Summary of Resolutions of the 14th General Meeting of Unitholders (Reference)” relating to the 14thD
General Meeting of Unitholders held in November 2023 on its website as the first initiative for DHR
9

AssetManagement
ManagementReport
ReportI.I. Asset

I. Asset Management Report

1. Summary of Asset Management(2) Asset Management during the Period(1) Historical Operating Resultsi)
32nd period
February 2022

33rd period
August 2022

34th period
February 2023

35th period
August 2023

36th period
February 2024

Yen in millions

30,26429,36829,48929,92029,643

Yen in millions

28,92829,36829,48929,57029,643

Yen in millions

16,854

16,707

16,74817,00517,505

Yen in millions

12,431

12,183

12,283

12,50912,145

Operating income

Yen in millions

13,40912,661

12,74012,914

12,138

Ordinary income

Yen in millions

11,685

11,05011,124

11,224

10,378Net income

Yen in millions

11,685

11,04911,123

11,224

10,378

Total assets

Yen in millions

964,669

963,566

960,621958,747

957,752

Operating revenues (Note 1)
Of which, real estate rental revenues
Operating expenses
Of which, real estate rental expenses

Period-on-period changes
Net assets
Period-on-period changes%
Yen in millions

(0.1)

(0.3)

(0.2)

(0.1)

521,820

520,049

518,173515,502

7.1

(0.4)

(0.3)

(0.4)

(0.5)

Yen in millions

268,042

268,042

268,042

268,042

268,042

Total number of investment units issued

Units2,320,000

2,320,000

2,320,000

2,320,000

2,320,000

Net assets per unit

Yen

225,938

224,922

224,159

223,350

222,199

Total distributions

Unitholders’ capital%

7.1
524,178

Yen in millions

13,507

13,031

13,105

13,091

13,249Distributions per unit
Of which, earnings distributions per unit

Yen
Yen

5,822
5,116

5,617
4,805

5,649
4,854

5,643
4,841

5,711
4,491

Of which, distributions in excess ofearnings per unit

Yen

706

812

795

802

1,220

Ordinary income to total assets ratio(Note 2)

%

1.3

1.1

1.2

1.2

1.1

%

2.5

2.3

2.3

2.3

2.2

%

2.3

2.1

2.1

2.2

2.0

Annualized
Return on equity (Note 3)
Annualized

Transition of DHR

Daiwa House REIT Investment Corporation (hereinafter referred to as the “DHR”) is a real estate investment trust (J-REIT) whose sponsor is
Daiwa House Industry Co., Ltd. (hereinafter referred to as “Daiwa House”) and whose asset manager is Daiwa House Asset Management Co.,
Ltd. (hereinafter referred to as the “Asset Manager”), a wholly owned subsidiary of Daiwa House.
DHR was listed on the Real Estate Investment Trust (REIT) Market of Tokyo Stock Exchange, Inc. (hereinafter referred to as the “Tokyo Stock
Exchange”) on March 22, 2006, and then later merged with New City Residence Investment Corporation (hereinafter referred to as “NCR”) on
April 1, 2010 (hereinafter referred to as “the merger with NCR”). Subsequently on December 1, 2011, DHR changed its corporate name to Daiwa
House Residential Investment Corporation (the corporation prior to change of corporate name to “Daiwa House REIT Investment Corporation” ishereinafter referred to as the “former DHI”), and accordingly changed its investment targets to residential properties.
The former Daiwa House REIT Investment Corporation (the Daiwa House REIT Investment Corporation, which was dissolved upon having
merged with DHR as of September 1, 2016, is hereinafter referred to as the “former DHR”) was established on September 14, 2007, whose asset
manager was Daiwa House REIT Management Co., Ltd., a wholly owned subsidiary of Daiwa House. The former DHR was listed on the REIT
Market of Tokyo Stock Exchange on November 28, 2012, as a REIT that targets investment in logistics and retail properties.
As of September 1, 2016, the former DHI and the former DHR (hereinafter collectively referred to as the “Investment Corporations”) conducted
an absorption-type merger (hereinafter referred to as the “Merger”) whereby the former DHI was the surviving corporation and the former DHR
was the absorbed corporation. DHR shifted to a diversified portfolio strategy, targeting investment in new asset classes such as hotel and officeproperties, in addition to those that the Investment Corporations had targeted for investment in the past, and changed its corporate name from
Daiwa House Residential Investment Corporation to Daiwa House REIT Investment Corporation.

ii) Performance for the Current Fiscal Period
DHR acquired one hotel property for an acquisition price(Note 1) of ¥5.1 billion in September 2023 using funds in hand. In addition, DHR acquired
one logistics property for an acquisition price of ¥3.1 billion in October 2023 using loans and funds in hand. As a result, DHR’s portfolio as of theend of the current fiscal period consisted of 232 properties with an asset value of ¥905.7 billion(Note 2).
(Notes) 1.

2.

iii) Overview of Financing
DHR 1) arranged refinancing of ¥18,700 million to provide for the repayment of ¥18,700 million in existing loans due on September 29, 2023; 2)
arranged refinancing of ¥4,000 million to provide for the repayment of ¥4,000 million in existing loans due on October 2, 2023; 3) conducted debt
financing of ¥2,000 million on October 2, 2023, to provide for part of the acquisition costs and related expenses for the property acquisition throughthe Daiwa House Group’s pipeline; and 4) arranged refinancing of ¥2,000 million to provide for the repayment of ¥2,000 million in existing loans
due on January 31, 2024.
As a result, the balance of interest-bearing debt outstanding as of the end of the current fiscal period amounted to ¥409,550 million (loanbalance: ¥365,550 million, investment corporation bond balance: ¥44,000 million). As of the end of the current fiscal period, its LTV (including
goodwill)(Note 1) was 42.8%, and its LTV (excluding goodwill)(Note 2) was 45.1%.

%

4.6

4.2

4.3

4.3

4.0

%

54.3

54.2

54.1

54.0

53.8

(0.0)

(0.2)

(0.0)

(0.1)

(0.2)

%

101.5

100.9

101.3

100.1

100.4

Rental NOI (Note 4)

Yen in millions

22,122

22,83922,831

22,66323,148(Notes) 1.

FFO per unit (Note 5)

Yen

7,746

8,061

8,081

7,963

8,153

2.

FFO multiple (Note 6)

Times

19.9

20.1

17.3

17.5

14.9

Debt service coverage ratio (Note 7)(Note 8)

Times

16.6

15.6

15.5

14.7

14.2

407,550

407,550

407,550

407,550

409,550

42.2

42.3

42.4

42.5

42.8

Equity ratio
Period-on-period changes
Payout ratio<Other Reference Information>

Interest-bearing debt
Interest-bearing debt to total assets ratio(Note 9)(Notes) 1.
2.
3.
4.
5.
6.
7.
8.
9.

Yen in millions%

Operating revenues, etc., do not include consumption taxes.
Ordinary income to total assets ratio = Ordinary income / ((Total assets at the beginning of period + Total assets at the end of period) / 2) × 100
Return on equity = Net income / ((Net assets at the beginning of period + Net assets at the end of period) / 2) × 100
Rental NOI = Real estate rental revenues – Real estate rental expenses + Depreciation and amortization during the period
FFO per unit = (Net income + Depreciation and amortization + Amortization of goodwill + Amortization of investment corporation bond issuance costs + Amortization of trademark
rights +/– Loss/gain on sale of real estate properties + Impairment losses+/– Extraordinary loss/income) / Total number of investment units issued
FFO multiple = Investment unit price at the end of period / Annualized FFO per unit
Debt service coverage ratio = Net income before interest, depreciation and amortization / Interest expense
Net income before interest, depreciation and amortization = Net income + Depreciation and amortization + Amortization of goodwill + Amortization of investment corporation bondissuance costs + Amortization of trademark rights + Interest expense and Interest expense on investment corporation bonds + Impairment losses
Interest-bearing debt to total assets ratio = Interest-bearing debt at the end of period / Total assets at the end of period × 100“Acquisition price” is the purchase price stipulated in the respective purchase agreements of assets owned by DHR (not including expenses pertaining to acquisitions, settlementmoney such as taxes and public dues, consumption taxes, or leasehold guarantee deposits, etc.), except as otherwise noted. However, the acquisition prices of properties previously
owned by NCR have been presented as the appraisal values as of February 28, 2010, which were the prices received at the time of the merger with NCR, and the acquisition prices
of properties previously owned by the former DHR have been presented as the appraisal values as of August 31, 2016, which were the prices received at the time of the merger
with the former DHR. The “total acquisition price” has been rounded down to the nearest unit. The same shall apply hereinafter.
“Asset size” is the aggregate total of the acquisition prices of respective assets owned by DHR at respective points in time, except as otherwise noted. The same shall apply
hereinafter.

“LTV (including goodwill)” is obtained using the following formula. The same shall apply hereinafter.
LTV (including goodwill) = total amount of interest-bearing debt (loans + investment corporation bonds) ÷ total assets (including goodwill) × 100“LTV (excluding goodwill)” is obtained using the following formula. The same shall apply hereinafter.
LTV (excluding goodwill) = total amount of interest-bearing debt (loans + investment corporation bonds) ÷ total assets (excluding goodwill) × 100

The credit ratings of DHR as of the date of this report are as follows:
Rating agency

Type

Rating/Outlook

Rating and Investment Information, Inc. (R&I)

Issuer rating

AA- Stable

Japan Credit Rating Agency, Ltd. (JCR)

Long-term issuer rating

AA Stableiv) Difference Between Real Estate Appraisal Value and Book Value
The total appraisal value of assets held at the end of the current fiscal period was ¥1,097,552 million, and the amount of unrealized gain(Note) on
the portfolio, which is the difference compared to the book value was ¥248,459 million.
(Note)“Unrealized gain” is the positive valuation difference when the appraisal value exceeds the book value of real estate properties (excluding construction in progress and construction inprogress in trust) as of the last day of each fiscal period. (Negative valuation difference is referred to as unrealized loss.) The same shall apply hereinafter. Please note that unrealized
gain is not guaranteed to be realized as a result of the sale of real estate.

v) Overview of Financial Results
As a result of the investment management activities mentioned above, in the current fiscal period, DHR posted operating revenues of ¥29,643
million, operating income of ¥12,138 million, ordinary income of ¥10,378 million, and net income of ¥10,378 million. Based on its distribution policy,¥1,982 million in amortization of goodwill and ¥889 million in impairment losses were added to net income, resulting in ¥13,250 million. From thisamount, the total amount of distributions was ¥13,249 million (¥5,711 per investment unit) after the fractional parts of amounts less than ¥1 perinvestment unit for each type of distribution listed in the breakdown of distributions below were adjusted.
Furthermore, the breakdown of distributions includes income of ¥10,419 million (¥4,491 per investment unit) as earnings distributions asprovided for in Article 136, paragraph 1 of the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951, as amended.
Hereinafter referred to as the “Investment Trusts Act”) and an allowance for temporary difference adjustments of ¥2,777 million (¥1,197 perinvestment unit) and other distributions in excess of earnings (return of capital) of ¥53 million (¥23 per investment unit) as distributions in excessof earnings.

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I. Asset Management Report

I. Asset Management Report(3) Summary of Capital Increase(4) Distributions

Changes in DHR’s total number of investment units issued and unitholders’ capital for the most recent five years until February 29, 2024 are as
follows:

For the current fiscal period, of the total amount of ¥13,250,021,130 when combining net income of ¥10,378,351,860, amortization of goodwill of¥1,982,226,586 and impairment losses of ¥889,442,684, DHR decided to pay a total of ¥13,249,520,000 in distributions (¥5,711 per unit) after
adjusting the fractional parts of amounts less than ¥1 per investment unit for each type of distribution listed in the breakdown of distributions below.

Date

Event

Total number ofinvestment units issued(Units)Unitholders’ capital(Yen in millions)RemarkChangeBalance

ChangeBalance

March 1, 2019

Capital increase through public offering

138,000

2,065,000

32,879196,110(Note 1)March 26, 2019

Capital increase through third-party allotment

10,0002,075,000

2,382

198,492(Note 2)

March 2, 2020

Capital increase through public offering

121,000

2,196,000

33,273

231,766(Note 3)September 1, 2021

Capital increase through public offering

115,000

2,311,000

33,643

265,409(Note 4)September 28, 2021

Capital increase through third-party allotment

9,000

2,320,000

2,632

268,042(Note 5)(Notes) 1.
2.
3.
4.
5.
6.

Investment units were issued by public offering with an issue price of ¥245,784 per unit (paid-in amount: ¥238,260) in order to raise funds for the acquisition of new properties, etc.
Additional investment units were issued with a paid-in amount of ¥238,260 per unit in order to raise funds for the acquisition of new properties, etc.
Investment units were issued by public offering with an issue price of ¥283,670 per unit (paid-in amount: ¥274,986) in order to raise funds for the acquisition of new properties, etc.
Investment units were issued by public offering with an issue price of ¥301,791 per unit (paid-in amount: ¥292,552) in order to raise funds for the acquisition of new properties, etc.
Additional investment units were issued with a paid-in amount of ¥292,552 per unit in order to raise funds for the acquisition of new properties, etc.
There are no investment units that do not have voting rights in accordance with the provisions of Article 308, paragraph 2 of the Companies Act, as applied mutatis mutandis pursuant
to Article 94 of the Investment Trust Act (treasury investment units), or investment units that do not have voting rights in accordance with the provisions of Article 160 of the Regulation
for Enforcement of the Act on Investment Trusts and Investment Corporations (Order of the Prime Minister’s Office No. 129 of 2000, as amended; hereinafter referred to as the“Regulation for Enforcement of Investment Trusts Act”) (cross-held investment units).

[Changes in market price of investment securities]
The highest and lowest prices and the closing prices at the beginning and the end of the period in the REIT Market of Tokyo Stock Exchange, on
which DHR’s investment securities are listed, by period are as follows:

The breakdown of distributions was ¥10,419,120,000 as earnings distributions (¥4,491 per unit), and of distributions in excess of earnings,¥2,777,040,000 as allowance for temporary difference adjustments (¥1,197 per unit) and ¥53,360,000 as other distributions in excess of earnings(¥23 per unit).
32nd period
33rd period
34th period
35th period
36th period
From
From
From
From
From
September 1, 2021
March 1, 2022
September 1, 2022
March 1, 2023
September 1, 2023
to February 28, 2022 to August 31, 2022 to February 28, 2023 to August 31, 2023 to February 29, 2024
Unappropriated retained
earnings(Yen in thousands)

12,238,902

11,419,562

11,395,808

11,358,853

10,506,085

Retained earnings carriedforward (Note)(Yen in thousands)

369,782

271,962

134,528

127,733

86,965

Total distributions(Yen in thousands)

13,507,040

13,031,440

13,105,680

13,091,760

13,249,520

5,822

5,617

5,649

5,643

5,711

Of the above, total earnings
distributions(Yen in thousands)

11,869,120

11,147,600

11,261,280

11,231,120

10,419,120

Earnings distributions per
unit
(Yen)

5,116

4,805

4,854

4,841

4,491

1,637,920

1,883,840

1,844,400

1,860,640

2,830,400

Distributions per unit

32nd period

33rd period

34th period

35th period

36th period

February 2022

August 2022

February 2023

August 2023

February 2024

Highest¥353,000¥335,500¥323,500¥299,900¥276,800

Of the above, total capitalrefunds(Yen in thousands)

Lowest¥309,000¥290,000¥272,400¥266,000¥238,800

Capital refunds per unit
(Yen)

706

812

795

802

1,220

Beginning of period¥329,000¥315,000¥318,500¥277,800¥265,500

End of period¥311,500¥322,000¥281,100¥276,200¥244,400

Of total capital refunds, total
distributions deemed as
distributions from theallowance for temporary
difference adjustments(Yen in thousands)

1,637,920

1,839,760

1,844,400

1,860,640

2,777,040

Of capital refunds perunit, distributions deemed
as distributions from theallowance for temporary
difference adjustments
per unit
(Yen)

706

793

795

802

1,197

Of total capital refunds, total
distributions deemed as
distributions from capitalrefunds for tax purposes(Yen in thousands)–

44,080––53,360Of capital refunds perunit, distributions deemed
as distributions from
capital refunds for tax
purposes per unit
(Yen)

–

19

–

–

23

Fiscal period ended(Note)

12(Yen)

Retained earnings carried forward indicates the retained earnings carried forward to the following period.

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I. Asset Management Report
I. Asset Management Report(5) Future Operating Policies and Issues to Be Addressedi)

Investment Environment

Looking ahead, the Japanese economy, despite the current rise in prices, is expected to recover gradually due to factors that include recovery inpersonal consumption amid rising wages, solid capital investment, and growth in inbound tourism. Meanwhile, we must be aware of the future
impact on economic activities from factors including trends in monetary policy by the Bank of Japan and other central banks in the world, the riskof economic recession in overseas economies, the trends of commercial real estate market in the United States, economic stagnation in China,
and the surging resource prices.
In the J-REIT market, the Tokyo Stock Exchange REIT Index was 1,698 points at the end of February 29, 2024. In March 2024, the Bank ofJapan decided to terminate its large-scale monetary easing measures, including those pertaining to negative interest rates, and made its first rate
hike in 17 years. Looking ahead, even greater attention needs to be paid to the impacts of fluctuations in the financial market.
In the real estate trading market, although negative interest rate policy has ended, an accommodative financial environment is expected to be
maintained for the time being, and transaction prices are remaining high. In addition, taking into account factors such as the rising price of landand persistently high construction costs, an investment environment is expected to remain challenging in the future.

ii) Future Operating Policies and Issues to Be Addressed(a) Growth Strategy
Due to its shift to a diversified portfolio strategy as a result of the Merger, taking advantage of the expanded opportunities to acquire properties
from an extensive range of asset classes, DHR aims to steadily grow its asset size while maximizing unitholder value by securing stable income
over the long term.
With a diversified portfolio strategy, DHR’s portfolio includes a range of assets with varying risk-return profiles, and as of the date of this report,
maintains high occupancy rates for assets held. By investing in various types of assets, DHR deems that it will be able to diversify its portfolio andmitigate the risk of excessive reliance on a limited number of tenants in order to boost portfolio income and generate cash flows that are moreconsistent.
DHR carefully selects and acquires assets that contribute to increasing unitholder value mainly through the Daiwa House Group’s pipeline andplans to maintain its policy of selective investment going forward.
Furthermore, through continuous property replacement, DHR aims to increase the quality of its portfolio and realize increased unitholder value.
(b) ESG Initiatives
DHR and the Asset Manager share the Daiwa House Group’s basic approach of “Creating Dreams, Building Hearts.” To attain a sustainable
society, it is essential that we include environmental, social, and governance (“ESG”) considerations in real estate investment management
operations. We also believe that this will contribute to DHR’s basic policy of ensuring stable revenue and achieving steady asset growth over the
medium to long term.
In line with this basic approach, the Asset Manager established the “Sustainability Policy (the ‘Policy’)” in April 2017, and has been putting it
into practice through the real estate investment management business. Furthermore, under DHR’s growth strategy, DHR has been making efforts
to maximize unitholder value by combining business value (financial value) and social value (non-financial value). As a strategy for enhancing
social value (non-financial value), DHR has put forward the following commitments.
a. Improvement of ESG ratings by third parties
For the third consecutive year, DHR gained recognition as a climate change A List company under the 2023 CDP Climate Change Program, upon
having received the highest-rated “A” score in recognition of exhibiting high standards internationally when it comes to addressing issues of climatechange and disclosing information in that regard. For the second consecutive year, DHR was awarded the highest rating of “5 Stars” for the 2023
GRESB Real Estate Assessment, and was also selected as “Global Listed Sector Leader” in the listed diversified real estate sector and as“Regional Sector Leader” in the Asia/diversified real estate sector. DHR was selected for the first time as a component company of the “Dow Jones
Sustainability Asia/Pacific Index,” covering the Asia-Pacific region in the “Dow Jones Sustainability Indices,” a leading global equity index onsustainability. Furthermore, at the Fifth ESG Finance Awards Japan, DHR was awarded as an “Environmentally Sustainable Company” for thesecond consecutive year as a company meeting certain standards in terms of level of disclosure, and became the first J-REIT awarded“Progressive Company in Environmental Disclosure,” as a company with a high degree of disclosure improvement and expected to make further
progress.
b. Reduction in greenhouse gas emissions
DHR set targets for reducing greenhouse gas (‘GHG’) emissions by FY2030 and FY2050 and, in February and August 2022, became the first JREIT to acquire certification for its emission targets from the Science Based Targets initiative (SBTi)(Note 1), which certified that the targets are
science-based targets consistent with the standards required by the Paris Agreement.
c. Promotion of biodiversity conservation
By promoting initiatives in business activities such as measures to mitigate climate change, reduction of surplus consumption, sustainableproduction and investments for biodiversity, DHR and the Asset Manager not only expect to contribute to the promotion of nature positivity but
also believe such efforts will lead to stronger competitiveness.
DHR has adopted the recommendations of the Taskforce on Nature-related Financial Disclosures (TNFD) and in December 2023, became thefirst J-REIT to register as a “TNFD Adopter(Note 2).” In addition, in January 2024, DHR became the first J-REIT to disclose nature-related informationaligned with the TNFD Recommendations.
d. The Asset Manager’s promotion of human capital management and health management
Under the Policy, the Asset Manager aims to establish an internal framework for promoting sustainability and take steps to develop personnel byconducting regular employee education and training. The Asset Manager also aims to create workplaces where people can work safely andhealthily, and workplaces where diverse employees can work flexibly.
Based on these goals, the Asset Manager expects that its initiatives for improving the health of employees will bring new vigor to the overall
organization in such forms as improved vitality of employees and enhanced productivity, and lead to improved financial results and enhanced
value as an organization. For the second consecutive year, the Asset Manager was certified as 2024 Health & Productivity Management
Outstanding Organization (SME category) by the Ministry of Economy, Trade and Industry in recognition of its various efforts in the field of healthmanagement such as management philosophy and guidelines and organizational structure, its measures to maintain and promote employee
health, and its initiatives regarding legal compliance and risk management, etc. In addition, for the second consecutive year, the Asset Manager
was certified as one of the “Bright 500,” the top 500 corporations in the Health & Productivity Management Outstanding Organizations (SME
category) in recognition of its community-based messaging regarding health management initiatives, and the number of compliant items in theevaluation items of health management.
e. Promoting ESG by introduction of sustainability index-linked fee
In November 2021, the Asset Manager introduced a provision to fluctuate the amount of asset management fees to the Asset Manager in
conjunction with the sustainability indices as the first initiative in J-REITs for the purpose of increasing unitholder value by encouraging the14

I. Asset Management Report
reduction of GHG emissions of DHR properties and enhancing the external evaluations of its sustainability initiatives. This is to increase or
decrease the amount of asset management fees based on the sum of indexed GHG emissions reduction ratio, GRESB Real Estate Rating and
CDP Climate Change Program Score multiplied by the total assets of DHR, and is aimed at strengthening the commitment to solving ESG issues
and improving governance. Additionally, DHR was awarded the “Best Recommendation Award in Governance Category” in the ARES ESG Award
2023 sponsored by the Association for Real Estate Securitization (“ARES”) in recognition of DHR’s introduction of sustainability index-linked asset
management fees as an effective initiative to expand and universalize ESG investment through the investment chain.
Furthermore, remuneration for Executive Director of DHR and remuneration for directors of the Asset Manager are linked to sustainability
indices including GHG emissions reduction ratio, GRESB Real Estate Rating and CDP Climate Change Program Score.
(Notes) 1.
2.

SBT refers to Science Based Targets (emissions reduction targets based on scientific reasoning).
“TNFD Adopter” refers to a company or organization that has registered on the TNFD website their intention to disclose information aligned with the TNFD Recommendations. TNFD
Adopters are required to make public disclosures aligned with the TNFD Recommendations in their corporate reporting in respect of their financial year 2024 or 2025.

(c) Distribution Policy
DHR changed part of its distribution policy in the fiscal period ended February 28, 2017 and made it a policy to distribute the amount equivalent
to amortization of goodwill to top up net income, and distributions in excess of earnings in the amount equivalent to amortization of goodwill arepaid (distribution accounted as an allowance for temporary difference adjustments and other distributions in excess of earnings).
Furthermore, in the case of the occurrence of excess taxable income over accounting income associated with sale of properties or recordingof impairment losses or the like that cause a need for DHR to take action to maintain its favorable tax status, DHR plans to conduct additional
distributions in excess of earnings (distribution accounted as an allowance for temporary difference adjustments) to reduce the incurrence ofcorporate taxes.
However, where there is an occurrence of special gains such as gain on sale of real estate properties, other distributions in excess of earnings,
which is a part of the above-mentioned distributions in excess of earnings in the amount equivalent to amortization of goodwill, can be reduced
by an amount equivalent to part of the gain on sale of real estate properties, etc. In addition, in cases where the excess taxable income overaccounting income is resolved mainly through the sale of properties for which impairment losses were recorded, distributions may be limited tothe amount of excess taxable income over accounting income, and other distributions in excess of earnings may not be carried out.
DHR’s policy is to pay distributions in excess of earnings (distribution accounted as an allowance for temporary difference adjustments andother distributions in excess of earnings) to realize stabilization of distributions on a medium- to long-term basis(Note) while ensuring the level of
distributions not impacted by the amortization of goodwill that accompanied the Merger.
(Note)

Under the above distribution policy, DHR has the policy to stabilize distributions. However, it is not intended as a guarantee or promise of the payment of distribution and amounts thereof.

iii) Financial Strategy
DHR seeks as its basic policy to plan and execute a well-planned and flexible financial strategy with the aim of ensuring stable income on a
medium- to long-term basis, contributing to the steady growth and efficient management of its properties and creating management stability.
DHR is also working to improve the stability of its financial base by maintaining and expanding its strong lender formation, by diversifying
methods of raising capital through issuance of investment corporation bonds, and by promoting use of long-term fixed rates on interest-bearing
debt and staggering repayment dates.

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I. Asset Management Report
I. Asset Management Report

I. Asset Management Report(6) Significant Events after Balance Sheet Date

C.

A.

Acquisition of Assets

DHR acquired the following property:
Asset name

DPL Urayasu III

Asset type

Trust beneficiary interests in real estate

Asset class

Logistics properties

Acquisition price (Note 1)¥30,000 million

Seller (Note 2)

Urayasu Facility Development Tokutei Mokuteki Kaisha

Date of acquisition

March 1, 2024

(Notes) 1.
2.

B.

This figure does not include expenses pertaining to acquisitions, settlement money such as taxes and public dues, consumption taxes, etc.
Urayasu Facility Development Tokutei Mokuteki Kaisha, the seller of DPL Urayasu III, is classified as an interested party, etc. as defined in the Investment Trusts Act. As such, theAsset Manager has gone through the necessary discussion and resolution procedures in accordance with its regulations on transactions with interested parties.

Debt Financing(a) DHR conducted debt financing for acquiring the property mentioned in “A. Acquisition of Assets” above, on March 1, 2024, as follows:
Borrowingamount(Yen inmillions)

Interest rate

Borrowingdate

Repayment
date

Method ofrepayment

Collateral

2,500

Base interest rate
(JBA 1-month yen
TIBOR)+0.175%(Floating interest
rate)

March 1,2024

February28, 2025

Bulletrepayment

Unsecuredand nonguaranteed

2,500

Base interest rate
(JBA 1-month yen
TIBOR)+0.175%(Floating interest
rate)

March 1,2024

February28, 2025

Bulletrepayment

Unsecuredand nonguaranteed

2,500

Base interest rate
(JBA 1-month yen
TIBOR)+0.175%(Floating interest
rate)

March 1,2024

February28, 2025

Bulletrepayment

Unsecuredand nonguaranteed

Mizuho Bank, Ltd.

2,500

Base interest rate
(JBA 1-month yen
TIBOR)+0.175%(Floating interest
rate)

March 1,2024

February28, 2025

Bulletrepayment

Unsecuredand nonguaranteed

Mizuho Bank, Ltd.
The Chiba Bank, Ltd.
The Keiyo Bank, Ltd.
The Yamaguchi Bank, Ltd.
Kansai Mirai Bank, Limited(Green Loan) (Note)

5,000

0.74354%(Fixed interest rate)

March 1,2024

February28, 2029

Bulletrepayment

Unsecuredand nonguaranteed

LenderSumitomo Mitsui Trust Bank, Limited

Sumitomo Mitsui Banking Corporation

Disposition of assets

DHR decided to dispose of the following properties as of April 16, 2024.
Asset name

D Project Tomisato

Asset type

Trust beneficiary interests in real estate

Asset class

Logistics properties

Planned disposition price(Note 1)

¥5,970 million

Buyer (Note 2)

DH Bridge 1 Godo Kaisha

Planned date ofdisposition

August 30, 2024

Asset name

D Project Kaminokawa

Asset type

Trust beneficiary interests in real estate

Asset class

Logistics properties

Planned disposition price(Note 1)

¥6,510 million

Buyer (Note 2)

DH Bridge 1 Godo Kaisha

Planned date ofdisposition

August 30, 2024

Asset name

D Project Kuki II

Asset type

Trust beneficiary interests in real estate

Asset class

Logistics properties

Planned disposition price(Note 1)

¥10,100 million

Buyer (Note 2)

DH Bridge 1 Godo Kaisha

Planned date ofdisposition

September 2, 2024

(Notes) 1.
2.

This figure does not include expenses pertaining to dispositions, settlement money such as taxes and public dues, consumption taxes, etc.
DH Bridge 1 Godo Kaisha, which is the buyer, is a limited liability company in which the sponsor, Daiwa House, plans to invest.

MUFG Bank, Ltd.

(Note) Financing for this debt financing has been carried out through a green loan in accordance with the Green Finance Framework developed by DHR. The Green Finance Framework has
obtained a rating of “Green 1 (F),” which is the highest rating offered in the JCR Green Finance Framework Evaluations conducted by Japan Credit Rating Agency, Ltd. (JCR), and thisgreen loan is in compliance with the “Green Loan Principles,” which is an international guideline. Furthermore, this debt financing received an evaluation of “Green 1” in the JCR Green
Loan Evaluation conducted by Japan Credit Rating Agency, Ltd. (JCR). For details regarding the JCR Green Loan Evaluation, please refer to the JCR website(https://www.jcr.co.jp/greenfinance/).

(b) DHR conducted debt financing for the funds for the repayments of a total of ¥12,000 million in long-term loans due on March 29, 2024 and¥3,000 million in long-term loans due on April 1, 2024, as follows:
LenderInterest rate

Borrowingdate

Repayment
date

Method ofrepayment

Collateral

Mitsui Sumitomo Insurance Company,
Limited1,000

1.00625%(Fixed interest rate)

March 29,2024

March 31,
2031

Bulletrepayment

Unsecuredand nonguaranteed

MUFG Bank, Ltd.
Sumitomo Mitsui Trust Bank, Limited
Sumitomo Mitsui Banking Corporation
Mizuho Bank, Ltd.
Aozora Bank, Ltd.
Resona Bank, Limited
SBI Shinsei Bank, Limited(Sustainability Linked Loan) (Note 1)

1.15375%
11,000 (Fixed interest rate)(Note 2)

March 29,2024

March 31,2032

Bulletrepayment

Unsecuredand nonguaranteed

Sumitomo Mitsui Banking Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui Trust Bank, Limited
Development Bank of Japan Inc.

3,000

0.91119%(Fixed interest rate)

April 1,2024

March 29,2030

Bulletrepayment

Unsecuredand nonguaranteed(Notes) 1.

2.

16

Borrowingamount(Yen inmillions)

The interest rate changes annually until the repayment date, according to the degree of achievement of the Sustainability Performance Target (“SPT”) as follows: after the last dayof April 2025, interest rates applicable on May 31 (the preceding business day if such date is not a business day) and thereafter will change according to the CDP score as of thelast day of April each year.
SPT: To achieve the “A List” status (the highest valuation) in the CDP Climate Change Program
CDP score “A” (SPT achieved): Initial interest rate –0.01%
CDP score “A-” (SPT not achieved): Initial interest rate ±0.00%
CDP score “B” or lower (B/ B-/ C/ C-/ D/ D-/ F) (SPT not achieved): Initial interest rate +0.01%
In addition, with regard to this loan, DHR has obtained an external review from Japan Credit Rating Agency, Ltd. (“JCR”) in alignment with the “Sustainability Linked Loan Guidelines”
issued by the Ministry of Environment of Japan and the Sustainability Linked Loan Principles (SLLP) issued by Asia Pacific Loan Market Association (APLMA), Loan Market
Association (LMA), and Loan Syndications and Trading Association (LSTA). For details, please refer to the website of JCR (https://www.jcr.co.jp/greenfinance/).
Initial interest rate applicable for the period from March 29, 2024 to May 30, 2025 is shown.

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I. Asset Management Report
I. Asset Management ReportD.

Reason for the Repurchase of Own Investment Units
As a result of comprehensively considering DHR’s status of cash on hand, its financial position, the market environment, and other factors,
DHR has judged that improving capital efficiency and providing returns to unitholders through the repurchase and cancellation of own
investment units will lead to enhancing unitholder value in the medium to long term.

(b)

2. Overview of the Investment Corporation

Decision on Repurchase of Own Investment Units

At the meeting of the Board of Directors held on April 16, 2024, DHR made a decision on matters concerning repurchase of own investment units
in accordance with the provisions of Article 80-2 of the Investment Trust Act as applied by replacing terms and phrases pursuant to the provisionsof Article 80-5, Paragraph 2 of the said act (the “Repurchase of Own Investment Units”). DHR plans to cancel all the repurchased investment units
in the fiscal period ending August 31, 2024.
(a)

I. Asset Management Report

Details of Matters Relating to the RepurchaseTotal number ofinvestment units that canbe repurchased
Total amount ofinvestment units to be
repurchased

14,000 units (maximum)
Ratio to total number of investment units issued (excluding treasury investment
units): 0.60%¥3,000 million (maximum)

Method of repurchaseMarket purchases on the Tokyo Stock Exchange based on a discretionary
trading agreement pertaining to the repurchase of own investment units with asecurities company

Period of repurchase

From April 17, 2024 to July 12, 2024

(1) Status of Investment Units
32nd period
As of February
28, 2022

33rd period
As of August 31,
2022

34th period
As of February
28, 2023

35th period
As of August 31,
2023

36th period
As of February
29, 2024

Total number of authorized investment units

8,000,000

8,000,000

8,000,000

8,000,000

8,000,000

Total number of investment units issued

2,320,000

2,320,000

2,320,000

2,320,000

2,320,000

268,042,601

268,042,601

268,042,601

268,042,601

268,042,601

18,264

17,915

17,591

17,326

19,768Unitholders’ capital(Yen in thousands)
Number of unitholders(2) Matters concerning Investment Units
The major unitholders as of February 29, 2024 are as follows:
Number of investment units
held (Units)

Name

Percentage of investment
units held against the total
number of investment units
issued (%) (Note)

Custody Bank of Japan, Ltd. (Trust account)

556,550

24.0

The Master Trust Bank of Japan, Ltd. (Trust account)372,286

16.0

Daiwa House Industry Co., Ltd.

91,200

3.9

The Nomura Trust and Banking Co., Ltd. (Investment trust account)

84,601

3.6

State Street Bank West Client - Treaty 505234

53,465

2.3

SMBC Nikko Securities Inc.

45,9752.0

JPMorgan Securities Japan Co., Ltd.

30,137

1.3

State Street Bank and Trust Company 505103

28,026

1.2

The Shinkumi Federation Bank

22,882

1.0

BNYM AS AGT/CLIENTS NON TREATY JASDEC

21,7200.9

1,306,842

56.3

Total
(Note)The percentages are rounded to the first decimal place.

(3) Officers
The following table provides information about the officers.
Title and post

Executive Director

Supervisory
Directors

Accounting Auditor(Notes) 1.

18

Name

Major concurrent position

Total remuneration per title
during the 36th period(Yen in thousands)

Tsuyoshi Saito (Note 2)

Corporate Advisor, Sumitomo Mitsui Trust General
Service Co., Ltd
Director and Chairman, UBS SuMi TRUST WealthManagement Co., Ltd.
Chairman, Sumitomo Mitsui Trust Club Co., Ltd.

1,260

Hiroshi Ishikawa

Attorney, Ohhara Law OfficeOutside Director, Japan Medical Dynamic Marketing,
INC.

2,100

Junko Kogayu

Professor, Tohoku University Accounting School
Certified Public Accountant, Junko Kogayu Certified
Public Accountant Firm
Certified Public Tax Accountant, Ayako Takeuchi Certified
Public Tax Accountant Firm
Outside Director and Audit & Supervisory Committee
Member, NITCHO Corporation
Outside Director and Audit & Supervisory Committee
Member, Nisshin Corporation
Outside Audit & Supervisory Board Member, Private
Finance Initiative Promotion Corporation of Japan
Outside Audit & Supervisory Board Member, The Shoko
Chukin Bank, Ltd.
Auditor, Culture Vision Japan Foundation Inc.

2,100

Ernst & Young ShinNihon
LLC–

18,000The Executive Director and Supervisory Directors do not hold investment units of DHR under their own or another person’s name. Any Supervisory Director may serve as an

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I. Asset Management Report
I. Asset Management Report
2.
3.
4.

I. Asset Management Report

executive of a corporation other than those listed above, but such corporations including those listed above do not have any interest in DHR.
Former Executive Director Toshiharu Asada retired on November 30, 2023, and on December 1, 2023, Tsuyoshi Saito was newly appointed as Executive Director.
Dismissal or non-reappointment of the Accounting Auditor shall be discussed at DHR’s board of directors pursuant to the provisions of the Investment Trusts Act for dismissal, taking
into full account all relevant factors for non-reappointment such as the quality of audits and remuneration for audits.
The amount of remuneration based on non-auditing duties paid to the Accounting Auditor was ¥2,100 thousand. In addition, the amount of remuneration based on non-auditing
duties paid to firms that belong to the same network as the Accounting Auditor was ¥10,163 thousand.

3. Portfolio of DHR(1) Composition of Assets
The following table provides information about the composition of assets.

(4) Liability Insurance Policy for Officers
The liability insurance policy for officers entered into by DHR is as follows:

Type of assets

Scope of insureds

Summary of the policy

Executive Directors and Supervisory
Directors(Outline of insured accidents to be covered)
The policy covers compensation for damages, legal costs, etc. incurred by insureds as a result of aclaim for damages arising from an act performed by insureds based on their position.
(Percentage of insurance premiums to be paid)
The entire amount is borne by DHR.
(Measures to ensure that the appropriateness of the execution of duties is not impaired)
Damages incurred by the insured due to criminal acts or acts committed with the knowledge that they
violate laws and regulations are not covered.

Area(Note 1)

Asset class

Residential
properties

Business
Asset manager

Daiwa House Asset Management Co., Ltd.

Custodian

Sumitomo Mitsui Trust Bank, Limited

General administrator

Sumitomo Mitsui Trust Bank, Limited

Transfer agent / Special account administrator

Sumitomo Mitsui Trust Bank, Limited

Administrator of investment corporation bonds

Sumitomo Mitsui Trust Bank, Limited, MUFG Bank, Ltd.,
Sumitomo Mitsui Banking Corporation, Resona Bank, Limited

Logistics
properties

2.4

Greater
Nagoya area

878

0.1

905

0.1

Greater
Osaka area

13,002

1.4

12,915

1.3

Other

3,279

0.3

3,284

0.3

Other

1,471

0.2

1,471

0.2

Three major
metropolitan
areas of Japan

41,905

4.4

41,792

4.4

Greater Tokyo
area

327,32234.1

326,406

34.1

Greater
Nagoya area

15,092

1.6

14,998

1.6

Greater
Osaka area

21,7892.3

24,817

2.6

Three major
metropolitan
areas of Japan

84,608

8.8

83,4608.7

Greater Tokyo
area

161,932

16.9

161,259

16.8

Greater
Nagoya area

5,009

0.5

4,974

0.5

Greater
Osaka area

5,850

0.6

5,818

0.6

Other
Trust beneficiaryinterests in realestateRetailproperties

Three major
metropolitan
areas of Japan

1,064

0.1

1,049

0.1

Greater Tokyo
area

31,7383.3

31,818

3.3

Greater
Nagoya area

2,390

0.2

2,390

0.2

Greater
Osaka area

22,592

2.4

22,495

2.3

Other

Hotel
properties

Three major
metropolitan
areas of Japan

61,852

6.5

61,591

6.4

Greater Tokyo
area

7,750

0.8

12,855

1.3

Greater
Nagoya area

5,307

0.6

5,276

0.6

Greater
Osaka area

1,397

0.1

1,388

0.1

7,991

0.8

7,934

0.8

3,133

0.3

3,103

0.3

Other
Other assets

Three major
metropolitan
areas of Japan

Greater Tokyo
area

Other
Subtotal(Notes) 1.
2.

3.

20

Percentage tototal assets(%) (Note 3)

23,215

Other

Residential
properties

Total amount held
(Yen in millions)(Note 2)

2.4

Subtotal
Name

Total amount held Percentage to(Yen in millions)
total assets(Note 2)(%) (Note 3)
23,274

Real estate(5) Asset Manager, Custodian and General Administrators

36th period
February 29, 2024

Greater Tokyo
area

Three major
metropolitan
areas of Japan

Retailproperties

35th period
August 31, 2023

36,645

3.8

36,3953.8

803,46983.8

808,034

84.4

Deposits and other assets

113,372

11.8

107,925

11.3

Total assets

958,747100.0

957,752

100.0

Three major metropolitan areas of Japan in “Area” are the greater Tokyo area (Tokyo, Kanagawa, Saitama and Chiba), the greater Nagoya area (Aichi, Gifu and Mie) and the greater
Osaka area (Osaka, Kyoto, Hyogo, Nara and Shiga). The same shall apply hereinafter.
“Total amount held” represents the amounts recorded on the balance sheets as of the last day of each fiscal period (August 31, 2023 and February 29, 2024), which are rounded
down to the nearest million yen. For real estate properties and trust beneficiary interests in real estate (may be referred to as “real estate in trust” or “trust beneficiary interests inreal estate”), the amounts are their acquisition prices (including expenses associated with the acquisition) less accumulated depreciation. “Acquisition price” is the purchase pricestipulated in the respective purchase agreements of assets owned by DHR (not including expenses pertaining to acquisitions, settlement money such as taxes and public dues,
consumption taxes, or leasehold guarantee deposits, etc.), except as otherwise noted. However, the acquisition prices of properties previously owned by NCR have been presented
as the appraisal values as of February 28, 2010, which were the prices received at the time of the merger with NCR, and the acquisition prices of properties previously owned by
the former DHR have been presented as the appraisal values as of August 31, 2016, which were the prices received at the time of the merger with the former DHR. The same shallapply hereinafter.
“Percentage to total assets” is rounded off to the first decimal place.

21

I. Asset Management Report
I. Asset Management Report

I. Asset Management Report(2) Principal Assets Held

(3) Description of Portfolio

The overview of principal assets held by DHR as of February 29, 2024 (top ten properties in terms of book value at the end of period) is as follows:
Property nameBook value
Leasable area
(Yen in millions)(m2)(Note 1)
(Note 2)

Leased area(m2)
(Note 3)

Occupancy
rate (%)(Note 4)Rate to total realestate rental
revenues (%)(Note 5)

Primary use

The overview of portfolio assets held by DHR as of February 29, 2024 (real estate and real estate in trust, etc.) is as follows:
Asset
class

Property nameiias Tsukuba

33,343

138,900.39

138,900.39

100.0

3.6

Retailproperties

DPL Nagareyama III

31,648106,859.16

106,859.16

100.0(Note 6)

Logistics

DPL Nagareyama I

31,603

124,489.93

124,489.93

100.0(Note 6)

Logistics

GRANODE Hiroshima

27,73429,915.08

29,915.08

100.0

3.4

D Project Urayasu II

25,14872,320.01

72,320.01

100.0(Note 6)

Logistics

DPL Misato

16,04455,861.44

55,861.44

100.0(Note 6)

Logistics

D Project Hiratsuka

14,88865,272.52

65,272.52

100.0(Note 6)

Logistics

D Project Hachioji

14,51262,394.17

62,394.17

100.0(Note 6)

Logistics

D Project Urayasu I
D Project Urayasu II
D Project Akanehama
D Project Noda
D Project Inuyama
D Project Neyagawa
D Project Morioka
D Project Tsuchiura

DPL Fukuoka Kasuya

12,50273,757.39

73,757.39

100.0(Note 6)

Logistics

D Project Fukuoka Umi

D Project Itabashi Shingashi

12,15533,763.46

33,763.46

100.0(Note 6)

Logistics

219,582

763,533.55

763,533.55

100.0

22.7

(Notes) 1.
2.

3.

4.
5.
6.

D Project Aikawa-Machi

Other assets

D Project Tosu–

“Book value” is the amount recorded on the balance sheets as of February 29, 2024 (in the case of real estate and real estate in trust, “Book value” is the acquisition price (including
expenses associated with the acquisition) less accumulated depreciation), which is rounded down to the nearest million yen.
“Leasable area” means the leasable area of the building (or land in the case of land properties) in relation to each real estate or each real estate in trust and the figures stated referto the area DHR believes is leasable as indicated in the relevant lease agreement or drawing of the building, etc. in relation to each real estate or each real estate in trust as ofFebruary 29, 2024. In the cases of each co-owned real estate or quasi co-owned trust beneficiary interests, the leasable area of the entire real estate multiplied by the ratio of coownership of the real estate or quasi co-ownership of the trust beneficiary interests in real estate held by DHR is provided.
“Leased area” represents the leased area in the leasable area as indicated in the lease agreement in relation to each real estate or each real estate in trust as of February 29, 2024.
However, in the case of a pass-through type master lease agreement entered into with the master lease company, the leased area to end-tenants indicated in each subleaseagreement entered into between the master lease company and end-tenants for each real estate or each real estate in trust as of February 29, 2024 is provided. As some leaseagreements for each real estate or each real estate in trust may indicate leased area that includes portions not included in the gross floor area, the leased area may exceed thegross floor area. In particular, at logistics properties, when eaves are included in the leased area, the leased area may significantly exceed the gross floor area. In the cases of eachco-owned real estate or quasi co-owned trust beneficiary interests, the leased area of the entire real estate multiplied by the ratio of co-ownership of the real estate or quasi coownership of the trust beneficiary interests in real estate held by DHR is provided.
“Occupancy rate” represents occupancy rate (the percentage of leased area to the leasable area) of each property as of February 29, 2024, which is rounded off to the first decimal
place.
“Rate to total real estate rental revenues” is the rental revenues from each real estate or each real estate in trust expressed as a percentage of the total rental revenues from theentire portfolio, rounded off to the first decimal place.
Undisclosed as consent for disclosure has not been obtained from the lessee.

D Project Kuki I
D Project Kuki II
D Project Kawagoe I
D Project Kawagoe II
DPL Inuyama
D Project Fukuoka Hakozaki
D Project Kuki III
D Project Kuki IV
Logistics properties

Total

D Project Machida
D Project Hachioji

D Project Kuki V
D Project Kuki VI
D Project Yashio
D Project Nishiyodogawa
D Project Matsudo
D Project Hibiki Nada
D Project Morioka II
D Project Kawagoe III
D Project Kazo
D Project Urayasu III
D Project Tomisato
D Project Kyotanabe
D Project Sendai Izumi
D Project Oyama
D Project Sano
D Project Tatebayashi
D Project Kakegawa
D Project Hiroshima Seifu
D Project Tosu II
D Project Kawagoe IV
D Project Kuki VII
D Project Chibakita
D Project Matsudo II
D Project Tomisato II
D Project Osaka Hirabayashi
D Project Sendai Izumi II

22

Assessedvalue at theBook value
end of period(Yen in(Yen inmillions)
millions)(Note 4)(Note 3)
11,5009,001
19,30014,512

Location (Note 1)

Form of ownership

Leasablearea (m2)(Note 2)2-1-6, Oyamagaoka, Machida City, Tokyo
3-21-1, Minami-Osawa, Hachioji City, Tokyo
4020-12, Aza Sakuradai, Nakatsu, Aikawa-machi,
Aiko District, Kanagawa
12-1, Chidori, Urayasu City, Chiba
11-5, Chidori, Urayasu City, Chiba
3-2-8, Akanehama, Narashino City, Chiba
1-1, Aza Tamei, Futatsuka, Noda City, Chiba
5-5, Aza Takanebora, Inuyama City, Aichi
2-24-12, Shimeno, Neyagawa City, Osaka
3-18, Ogama-kazabayashi, Takizawa City, Iwate
20-29, Aza Harayama, Hongo, Tsuchiura City, Ibaraki
384-15, Aza Noguchi, Oaza Ino, Umi-machi, Kasuya
District, Fukuoka
1624, Aza Hasuhara, Himekata-machi, Tosu City,
Saga
6004-2, Aza Taikoda, Shobu-cho Shobu, Kuki City,
Saitama
6201-1, Aza Kazarimen, Shobu-cho Sanga, Kuki
City, Saitama
3-2-3, Yoshinodai, Kawagoe City, Saitama
3-2-4, Yoshinodai, Kawagoe City, Saitama
1-8, Aza Nakahiratsuka, Oaza Haguroshinden,
Inuyama City, Aichi
5-2-1, Hakozakifuto, Higashi Ward, Fukuoka City,
Fukuoka
6004-1, Aza Taikoda, Shobu-cho Shobu, Kuki City,
Saitama
6201-5, Aza Kazarimen, Shobu-cho Sanga, Kuki
City, Saitama
6201-6, Aza Kazarimen, Shobu-cho Sanga, Kuki
City, Saitama
48-3, Kiyoku-cho, Kuki City, Saitama
50-1, Oaza Shin-machi, Yashio City, Saitama
2-7-48, Nakashima, Nishiyodogawa Ward, Osaka
City, Osaka
700-3, Aza Nishinooda, Kamihongo, Matsudo City,
Chiba
3-1-5, Hibiki-machi, Wakamatsu Ward, Kitakyushu
City, Fukuoka
3-15, Ogama-kazabayashi, Takizawa City, Iwate
2-8-55, Yoshinodai, Kawagoe City, Saitama
2-16-1, Okuwa, Kazo City, Saitama
12-1, Chidori, Urayasu City, Chiba
7-2, Misawa, Tomisato City, Chiba
3-50-1, Kannabidai, Kyotanabe City, Kyoto
2-9-1, Akedori, Izumi Ward, Sendai City, Miyagi
2333-34, Aza Atago, Oaza Hari, Oyama City, Tochigi
570-9, Nishiura-cho, Sano City, Tochigi
110-8, Aza Uchiya, Shimosagawada-cho,Tatebayashi City, Gunma
653-14, Aza Oyabu, Sakagawa, Kakegawa City,
Shizuoka
2-2-1, Tomonishi, Asaminami Ward, Hiroshima City,
Hiroshima
1621, Aza Hasuhara, Himekata-machi, Tosu City,
Saga
3-2-1, Yoshinodai, Kawagoe City, Saitama
6004-3, Aza Taikoda, Shobu-cho Shobu, Kuki City,
Saitama
461-1, Naganumacho, Inage Ward, Chiba City, Chiba
700-1, Aza Nishinooda, Kamihongo, Matsudo City,
Chiba
1-6, Misawa, Tomisato City, Chiba
2-6-15, Hirabayashikita, Suminoe Ward, Osaka City,
Osaka
3-1-1, Akedori, Izumi Ward, Sendai City, Miyagi

Real estate in trust
Real estate in trust

50,490.39
62,394.17

Real estate in trust

14,240.84

4,830

3,567

Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust

36,515.81
72,320.01
11,663.39
29,232.53
54,197.80
11,151.51
9,558.32
17,448.86

10,80030,9003,350
7,330
13,020
7,260
1,210
3,920

9,133
25,148
2,893
5,940
9,958
5,615
1,149
3,032

Real estate in trust

24,729.56

5,570

3,930

Real estate in trust

17,858.01

7,050

5,072

Real estate in trust

22,708.72

5,000

3,599

Real estate in trust

50,498.00

10,1007,825Real estate in trust
Real estate in trust

16,150.88
19,872.00

4,430
6,150

3,287
4,525

Real estate in trust

21,628.50

4,710

3,615

Real estate in trust

34,710.80

5,280

4,024

Real estate in trust

26,937.41

9,510

6,984

Real estate in trust

26,460.00

6,860

5,023

Real estate in trust

47,320.89

12,0007,584Real estate in trust
Real estate in trust

29,244.66
21,965.04

6,890
7,350

4,647
6,101

Real estate in trust

39,584.80

12,7009,386Real estate in trust

26,776.67

8,550

6,912

Real estate in trust

23,933.75

2,370

1,866

Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust

4,481.00
39,572.32
18,437.60
39,441.32
36,113.25
10,965.68
10,764.05
14,106.91
15,668.44

1,320
9,000
4,070
10,500
5,970
4,210
1,770
2,210
2,030

1,163
6,675
3,082
8,391
4,562
3,287
1,368
1,824
1,597

Real estate in trust

13,521.56

3,530

2,811

Real estate in trust

39,341.44

6,760

5,513

Real estate in trust

19,004.72

4,610

3,518

Real estate in trust

13,012.50

2,500

1,525

Real estate in trust

24,684.47

6,650

5,547

Real estate in trust

3,225.46

1,310

1,000

Real estate in trust

24,368.86

9,100

7,281

Real estate in trust

25,305.82

9,260

7,758

Real estate in trust

40,870.56

8,010

6,382

Real estate in trust

22,485.08

4,290

3,345

Real estate in trust

39,580.46

8,630

6,655

23

I. Asset Management Report
I. Asset Management Report

Property name

D Project Kaminokawa
D Project Fuji
D Project Tosu III
D Project Kitahachioji I
D Project Kitahachioji II
D Project Kitahachioji III
D Project Itabashi Shingashi

Logistics properties

D Project Sagamihara
D Project Kuki VIII
D Project Yokkaichi
D Project Ibaraki Ishioka
D Project Wako A
D Project Hiratsuka
D Project Kadoma I
DPL Misato
DPL Fukuoka Kasuya
DPL Kitakyushu
DPL Nagareyama I
DPL Shin-Narashino

Residential properties

DPL Nagareyama III

24

Qiz Ebisu
Castalia Azabujuban
Shichimenzaka
Castalia Shibakoen
Castalia Ginza
Castalia Hiroo
Castalia Nihonbashi
Castalia Hacchobori
Castalia Azabujuban
Castalia Azabujuban II
Castalia Shinjuku Natsumezaka
Castalia Ginza II
Castalia Shibuya Sakuragaoka
Castalia Nishi Azabu
Kasumicho
Castalia Ochanomizu
Castalia Sangubashi
Castalia Suitengu
Castalia Suitengu II
Castalia Shintomicho
Castalia Shintomicho II
Castalia Harajuku
Castalia Yoyogi Uehara
Castalia Sendagaya
Castalia Shinjuku 7 chome
Castalia Ningyocho
Castalia Ningyocho II
Castalia Shin-Ochanomizu
Castalia Higashi Nihonbashi II
Castalia Jinbocho
Castalia Shintomicho III
Castalia Shinjuku Gyoen
Castalia Takanawadai
Castalia Higashi Nihonbashi III
Castalia Shinjuku Gyoen II
Castalia Shintomicho IV
Castalia Takanawadai II
Castalia Minami Azabu
Castalia Ginza III
Castalia Kayabacho
Castalia Takanawa

Location (Note 1)

2568-1, Aza Minamihara, Oaza Tako,
Kaminokawamachi, Kawachi District, Tochigi
2261-6, Aza Shiroyama, Obuchi, Fuji City, Shizuoka
3-1-3, Yayoigaoka, Tosu City, Saga
2969-2, Ishikawamachi, Hachioji City, Tokyo
2969-18, Ishikawamachi, Hachioji City, Tokyo
2969-19, Ishikawamachi, Hachioji City, Tokyo
1-2-2, Shingashi, Itabashi Ward, Tokyo
1-2-31, Miyashimo, Chuo Ward, Sagamihara City,
Kanagawa
49-3, Kiyokucho, Kuki City, Saitama
1947-14, Nakamuracho, Yokkaichi City, Mie
6-4, Kashiwabara, Ishioka City, Ibaraki
5-7-5, Niikura, Wako City, Saitama
7-12-10, Okami, Hiratsuka City, Kanagawa
1-7, Kitajimahigashimachi, Kadoma City, Osaka
1-3-5, Inter-Minami, Misato City, Saitama
642-1, Aza Sanjyuroku, Oaza Uchihashi,
Kasuyamachi, Kasuya District, Fukuoka
5-14, Sonekitamachi, Kokuraminami Ward,
Kitakyushu City, Fukuoka
1374-1, Aza Taneishita, Nishifukai, Nagareyama City,
Chiba
1-7-1, Akanehama, Narashino City, Chiba
1597-1, Aza Waseda, Nishifukai, Nagareyama City,
Chiba
Logistics properties – Subtotal
4-3-1, Ebisu, Shibuya Ward, Tokyo

Assessedvalue at theend of period(Yen inmillions)(Note 3)

Book value(Yen inmillions)(Note 4)Form of ownership

Leasablearea (m2)(Note 2)

Real estate in trust

52,239.75

6,510

6,492

Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust

23,795.40
65,215.07
16,523.82
21,402.20
27,457.34
33,763.46

3,930
10,800
4,900
6,460
8,510
14,500

3,305
8,471
4,154
5,531
7,073
12,155

Real estate in trust

16,599.30

4,610

3,715

Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust

29,410.54
6,185.46
24,493.54
39,258.06
65,272.52
12,194.39
55,861.44

7,150
1,640
4,570
12,10016,5003,410
20,500

5,793
1,424
3,827
10,60014,8883,182
16,044

Real estate in trust

73,757.39

18,00012,502

Real estate in trust

26,672.98

4,020

3,196

Real estate in trust

124,489.93

36,90031,603

Real estate in trust

12,686.30

6,660

Asset
class

Shibaura Island Bloom Tower

5,796

Real estate in trust

106,859.16

36,80031,648562,140
11,300449,045
7,279

Real estate in trust

2,108,682.87
5,230.39

2-7-5, Azabujuban, Minato Ward, Tokyo

Real estate in trust

3,492.93

5,110

4,065

3-32-10, Shiba, Minato Ward, Tokyo
1-14-13, Ginza, Chuo Ward, Tokyo
3-13-3, Nishi Azabu, Minato Ward, Tokyo
11-2, Nihonbashi Kabuto-cho, Chuo Ward, Tokyo
3-27-5, Hacchobori, Chuo Ward, Tokyo
2-10-1, Azabujuban, Minato Ward, Tokyo
2-21-2, Azabujuban, Minato Ward, Tokyo
10-1, Kikui-cho, Shinjuku Ward, Tokyo
1-23-4, Ginza, Chuo Ward, Tokyo
29-21, Sakuragaoka-cho, Shibuya Ward, Tokyo

Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust

2,707.51
2,226.42
1,621.59
1,458.73
2,969.57
2,400.00
2,094.58
1,917.62
1,817.56
1,123.80

2,970
2,890
2,370
1,460
2,870
3,240
2,840
1,860
2,200
1,520

2,354
2,270
2,043
1,046
2,049
2,744
2,497
1,759
1,594
1,332

1-3-12, Nishi Azabu, Minato Ward, Tokyo

Real estate in trust

2,779.77

2,960

2,253

3-24-1, Kanda-Ogawamachi, Chiyoda Ward, Tokyo
4-52-12, Yoyogi, Shibuya Ward, Tokyo
2-8-13, Nihonbashi Kakigaracho, Chuo Ward, Tokyo
1-38-16, Nihonbashi Kakigaracho, Chuo Ward, Tokyo
3-10-10, Irifune, Chuo Ward, Tokyo
2-6-4, Irifune, Chuo Ward, Tokyo
3-55-3, Sendagaya, Shibuya Ward, Tokyo
1-17-16, Uehara, Shibuya Ward, Tokyo
2-9-10, Sendagaya, Shibuya Ward, Tokyo
7-17-16, Shinjuku, Shinjuku Ward, Tokyo
7-15, Nihonbashi Tomisawacho, Chuo Ward, Tokyo
8-12, Nihonbashi Tomisawacho, Chuo Ward, Tokyo
2-3-3, Kanda Awaji-cho, Chiyoda Ward, Tokyo
12-11, Nihonbashi Tomisawacho, Chuo Ward, Tokyo
2-40-8, Kanda-Jinbocho, Chiyoda Ward, Tokyo
2-8-8, Irifune, Chuo Ward, Tokyo
2-14-4, Shinjuku, Shinjuku Ward, Tokyo
3-4-12, Takanawa, Minato Ward, Tokyo
3-5-6, Higashi-Nihonbashi, Chuo Ward, Tokyo
1-29-15, Shinjuku, Shinjuku Ward, Tokyo
3-10-8, Irifune, Chuo Ward, Tokyo
3-5-6, Takanawa, Minato Ward, Tokyo
2-2-27, Minami Azabu, Minato Ward, Tokyo
8-18-2, Ginza, Chuo Ward, Tokyo
2-1, Nihonbashi Koami-cho, Chuo Ward, Tokyo
2-17-12, Takanawa, Minato Ward, Tokyo

Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate
Real estate
Real estate in trust

2,559.21
1,898.47
1,940.94
1,858.34
1,444.52
1,244.54
1,225.26
811.95803.03957.601,747.90
1,826.80
1,308.38
2,117.46
1,628.80
972.51
3,594.16
1,147.44
1,105.20
668.79681.001,567.84
882.673,494.42
4,602.95
10,408.26

2,750
2,050
1,810
1,620
1,290
1,140
1,280
905
793
642
1,620
1,730
1,350
2,080
1,770
932
3,710
1,330
934
636
583
1,680
925
3,740
4,100
11,000

1,642
1,432
1,142
1,028
860
775
855
629
548
425
840
933
848
1,220
1,067
616
2,515
817
605
445
383
1,127
609
2,696
2,453
7,251

Property nameCastalia Higashi Nihonbashi
Castalia Shinjuku
Castalia Ichigaya

Residential properties

Asset
class

I. Asset Management Report

Castalia Hatsudai
Castalia Hatsudai II
Castalia Ebisu
Castalia Meguro Kamurozaka
Castalia Toritsudaigaku
Castalia Yukigaya
Castalia Yutenji
Castalia Otsuka
Castalia Kikukawa
Castalia Meguro
Castalia Otsuka II
Castalia Jiyugaoka
Castalia Mejiro
Castalia Ikebukuro
Castalia Kaname-cho
Castalia Tower Shinagawa
SeasideCastalia Yakumo
Castalia Togoshiekimae
Castalia Honjo Azumabashi
Castalia Kitazawa
Castalia Monzennakacho
Castalia Kamiikedai
Castalia Morishita
Castalia Wakabayashikoen
Castalia Asakusabashi
Castalia Iriya
Castalia Kita Ueno
Castalia Morishita II
Castalia Minowa
Castalia Oyamadai
Castalia Nakano
Castalia Yoga
Castalia Sumiyoshi
Castalia Monzennakacho II
Castalia Oshiage
Castalia Kuramae
Castalia Nakanobu
Royal Parks Toyosu
Castalia Togoshi
Castalia Ooimachi
Castalia Omori
Castalia Mishuku
Castalia Arakawa
Castalia Omori II
Castalia Nakameguro
Castalia Meguro Chojyamaru
Castalia Meguro Takaban
Castalia Omori III
Castalia Meguro Tairamachi
Royal Parks SEASIR
Castalia Honkomagome
Cosmo Heim Musashikosugi
Castalia Tsurumi
Castalia Funabashi
Castalia Nishi Funabashi
Castalia Nogeyama
Castalia Ichikawa
Royal Parks Hanakoganei

Leasablearea (m2)(Note 2)

Assessedvalue at theBook value
end of period(Yen in(Yen inmillions)
millions)(Note 4)(Note 3)
5,020
3,152
3,960
2,737
1,560
830

Location (Note 1)

Form of ownership

9-14, Nihonbashi Yokoyama-cho, Chuo Ward, Tokyo
2-6-11, Shinjuku, Shinjuku Ward, Tokyo
16-24, Ichigaya Yakuoji-machi, Shinjuku Ward, Tokyo
4-20-2, 4-20-3, 4-20-4, Shibaura, Minato Ward,Tokyo
1-10-9, Honmachi, Shibuya Ward, Tokyo
1-33-7, Honmachi, Shibuya Ward, Tokyo
3-15-6, Ebisu, Shibuya Ward, Tokyo
4-31-23, Nishi Gotanda, Shinagawa Ward, Tokyo
1-4-1, Midorigaoka, Meguro Ward, Tokyo
2-13-3, Higashi Yukigaya, Ota Ward, Tokyo
2-14-21, Yutenji, Meguro Ward, Tokyo
3-17-4, Minami Otsuka, Toshima Ward, Tokyo
2-1-12, Kikukawa, Sumida Ward, Tokyo
2-1-13, Meguro, Meguro Ward, Tokyo
2-32-20, Higashi-Ikebukuro, Toshima Ward, Tokyo
1-20-1, Jiyugaoka, Meguro Ward, Tokyo
2-8-16, Takada, Toshima Ward, Tokyo
3-1-12, Nishi-Ikebukuro, Toshima Ward, Tokyo
5-26-10 Nishi-Ikebukuro, Toshima Ward, Tokyo
4-10-18, Higashi Shinagawa, Shinagawa Ward,Tokyo
2-20-5, Yakumo, Meguro Ward, Tokyo
1-7-16, Hiratsuka, Shinagawa Ward, Tokyo
3-7-11, Honjo, Sumida Ward, Tokyo
1-15-5, Kitazawa, Setagaya Ward, Tokyo
1-17-12, Fukuzumi, Koto Ward, Tokyo
1-4-15, Kamiikedai, Ota Ward, Tokyo
1-16-12, Morishita, Koto Ward, Tokyo
4-39-4, Wakabayashi, Setagaya Ward, Tokyo
2-16-21, Yanagi-bashi, Taito Ward, Tokyo
3-1-28, Shitaya, Taito Ward, Tokyo
1-15-5, Kita-Ueno, Taito Ward, Tokyo
2-12-11, Shin-Ohashi, Koto Ward, Tokyo
5-24-4, Negishi, Taito Ward, Tokyo
7-14-13, Todoroki, Setagaya Ward, Tokyo
2-12-13, Arai, Nakano Ward, Tokyo
1-3-12, Tamagawadai, Setagaya Ward, Tokyo
2-8-11, Sumiyoshi, Koto Ward, Tokyo
2-2-9, Tomioka, Koto Ward, Tokyo
3-5-2, Mukoujima, Sumida Ward, Tokyo
3-9-4, Kuramae, Taito Ward, Tokyo
4-7-11, Nakanobu, Shinagawa Ward, Tokyo
3-5-21, Toyosu, Koto Ward, Tokyo
5-2-1, Togoshi, Shinagawa Ward, Tokyo
4-2-11, Ooi, Shinagawa Ward, Tokyo
1-19-20, Omori kita, Ota Ward, Tokyo
1-3-39, Taishidou, Setagaya Ward, Tokyo
2-3-1, Arakawa, Arakawa Ward, Tokyo
1-8-13, Omori kita, Ota Ward, Tokyo
1-18-7, Aobadai, Meguro Ward, Tokyo
2-8-1, Kamiosaki, Shinagawa Ward, Tokyo
1-6-19, Takaban, Meguro Ward, Tokyo
5-21-11, Minami-ooi, Shinagawa Ward, Tokyo
1-23-8, Tairamachi, Meguro Ward, Tokyo
1-16-2, Nishiarai Sakae-cho, Adachi Ward, Tokyo
6-21-2, Honkomagome, Bunkyo Ward, Tokyo
2-8, Kizuki Ise-cho, Nakahara Ward, Kawasaki City,
Kanagawa
3-5-10, Tsurumi Chuo, Tsurumi Ward, Yokohama
City, Kanagawa
4-4-8, Honcho, Funabashi City, Chiba
4-19-16, Nishi Funa, Funabashi City, Chiba
1-8-1, Hinodecho, Naka Ward, Yokohama City,
Kanagawa
1-24-3, Ichikawa, Ichikawa City, Chiba
1-8-2, Hanakoganei, Kodaira City, Tokyo

Real estate
Real estate
Real estate in trust

6,442.28
3,150.80
1,546.34

Real estate in trust

16,849.50

9,970

5,843

Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust

3,077.05
2,339.42
1,659.71
4,967.97
863.701,542.30
1,380.35
1,871.70
1,168.18
1,414.73
1,784.50
1,472.47
1,658.90
3,644.35
1,624.06

2,780
2,500
1,890
5,390
553
1,370
1,520
1,860
1,010
1,410
1,570
1,730
1,310
3,410
1,570

1,913
1,803
1,347
3,907
560
957
1,281
1,301
714
841
935
1,152
925
2,346
1,055

Real estate in trust

12,732.35

11,100

6,593

Real estate
Real estate
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate
Real estate
Real estate
Real estate
Real estate
Real estate
Real estate
Real estate
Real estate
Real estate in trust
Real estate in trust
Real estate in trust
Real estate
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust

1,276.91
2,014.12
2,255.88
1,220.16
887.94414.45
1,383.90
1,425.43
1,537.84
1,415.15
4,197.66
1,275.60
2,406.41
857.32
1,613.86
1,472.38
1,362.60
3,038.98
1,785.24
1,994.93
2,421.82
18,112.03
2,629.59
1,413.75
2,046.36
2,640.86
3,797.92
2,818.70
3,166.71
2,123.77
1,961.52
2,004.80
1,278.52
17,269.74
2,224.41

993
2,420
1,430
1,030
727
87
1,230
1,000
1,110
761
3,720
1,020
1,890
713
1,540
1,380
1,240
3,300
1,390
1,770
2,730
11,400
2,770
1,810
2,070
2,760
2,630
3,280
5,230
2,830
2,230
2,000
1,510
5,280
2,060

803
1,405
929
721
442
172
757
747
725
493
2,342
604
1,254
498
951
860
814
1,891
913
1,104
1,577
5,251
1,568
1,072
1,355
1,744
1,465
2,206
3,687
2,012
1,698
1,415
1,155
3,497
1,430

Real estate in trust

4,208.83

2,430

1,632

Real estate in trust

1,452.09884

576

Real estate in trust
Real estate in trust

1,552.01
1,597.32

917
1,100

643
707

Real estate in trust

744.90412

296

Real estate in trust
Real estate in trust

876.8918,153.57

654
6,970

395
4,362

25

I. Asset Management Report
I. Asset Management Report

2-21, Imaikami-cho, Nakahara Ward, Kawasaki City,
Kanagawa
Royal Parks Wakabadai
2-1-1, Wakabadai, Inagi City, Tokyo
Pacific Royal Court Minatomirai 5-3-3, Minatomirai, Nishi Ward, Yokohama City,
Urban Tower
Kanagawa
3-298-1, Koyasu-dori, Kanagawa Ward, Yokohama
L-Place Shinkoyasu
City, Kanagawa
Castalia Musashikosugi

Royal Parks Musashikosugi
Castalia Sakaisuji Honmachi
Castalia Shin-Umeda
Castalia Abeno
Castalia Sakae
Castalia Higashi Hie

Residential properties

Castalia Tower Nagahoribashi
Castalia Sannomiya
Castalia Kotodaikoen
Castalia Ichibancho
Castalia Omachi
Castalia Uemachidai
Castalia Tower Higobashi
Castalia Fushimi
Castalia Yakuin
Castalia Mibu
Castalia Tsutsujigaoka
Royal Parks Namba
Castalia Shigahondori
Castalia Kyoto Nishioji
Castalia Ningyocho III
Royal Parks Umejima
Castalia Shinsakae II
Castalia Sumiyoshi II
ACROSSMALL Shinkamagaya
FOLEO Hirakata
QiZ GATE URAWA
UNICUS Takasaki
ACROSSPLAZA Miyoshi(Land)
DREAM TOWN ALi

Retail properties

ASOBOX (Land)
FOLEO Ome Imai
FOLEO Otsu Ichiriyama
FOLEO Hakata (Note 5)
ACROSSMALL Semboku(Land)
iias Tsukuba
LIFE Sagamihara Wakamatsu
FOLEO Sendai Miyanomori
ACROSSPLAZA Inazawa(Land)
Sports Depo and GOLF5
Kokurahigashi IC Store
Hiratsuka Retail Property(Land)

26

Form of ownershipBook value(Yen inmillions)(Note 4)

Real estate in trust

2,179.80

2,090

1,584

Real estate in trust

21,367.93

4,900

3,189

Real estate in trust

26,294.49

11,8006,743

Real estate in trust

3,009.74

2,410

1,528

Real estate in trust

3,808.97

1,390

839

1-3-7, Kyutarocho, Chuo Ward, Osaka City, Osaka
6-8-21, Nakatsu, Kita Ward, Osaka City, Osaka
2-4-37, Abeno-Suji, Abeno Ward, Osaka City, Osaka
4-16-10, Sakae, Naka Ward, Nagoya City, Aichi
5-31, Hie-cho, Hakata Ward, Fukuoka City, Fukuoka
1-15-25, Shimanouchi, Chuo Ward, Osaka City,
Osaka
3-2-31, Isobedori, Chuo Ward, Kobe City, Hyogo
3-10-24, Kokubun-cho, Aoba Ward, Sendai City,
Miyagi1-6-27, 1-6-30, Ichibancho, Aoba Ward, Sendai City,
Miyagi2-5-8, Omachi, Aoba Ward, Sendai City, Miyagi
4-1-12, Uehonmachi Nishi, Chuo Ward, Osaka City,
Osaka
1-2-24, Tosabori, Nishi Ward, Osaka City, Osaka
1-8-49, Nishiki, Naka Ward, Nagoya City, Aichi
2-3-13, Imaizumi, Chuo Ward, Fukuoka City,
Fukuoka
79, Mibu Aiai-cho, Nakagyo Ward, Kyoto City, Kyoto
4-2-35, Shintera, Wakabayashi Ward, Sendai City,
Miyagi2-2-40, Minato machi, Naniwa Ward, Osaka City,
Osaka
1-15-2, Wakabadori, Kita Ward, Nagoya City, Aichi
100-1, Shichijyo Goshonouchi Minamimachi,
Shimogyo Ward, Kyoto City, Kyoto
1-2-3, Nihonbashi Ningyocho, Chuo Ward, Tokyo
5-25-33, Umeda, Adachi Ward, Tokyo
1-29-21, Shinsakae, Naka Ward, Nagoya City, Aichi
1-16-1, Sumiyoshi, Koto Ward, Tokyo
Residential properties – Subtotal
2-12-1, Shin-Kamagaya, Kamagaya City, Chiba
1-20-10, Koyamichi, Hirakata City, Osaka
3720, Aza Fudodani, Oaza Nakao, Midori Ward,
Saitama City, Saitama
1150-5, Aza Nishikanai, Iizuka-machi, Takasaki City,
Gunma
855-403, Aza Kitashinno, Oaza Fujikubo, Miyoshimachi, Iruma District, Saitama
3-1-1, Hamada, Aomori City, Aomori
2-2-16, Nakatsuguchi, Kokura Kita Ward, Kitakyushu
City, Fukuoka
3-10-9, Imai, Ome City, Tokyo
7-1-1, Ichiriyama, Otsu City, Shiga
1-14-46, Higashinaka, Hakata Ward, Fukuoka City,
Fukuoka
5-456-67, Harayamadai, Minami Ward, Sakai City,
Osaka
5-19, Kenkyugakuen, Tsukuba City, Ibaraki
5-19-5, Wakamatsu, Minami Ward, Sagamihara City,
Kanagawa
4-14-5, Higashisendai, Miyagino Ward, Sendai City,
MiyagiReal estate in trust
Real estate in trust
Real estate
Real estate
Real estate
Real estate

3,471.39
3,279.90
10,920.75
2,836.00
3,061.60

2,150
1,970
6,700
1,410
1,260

1,282
1,180
3,942
905
829

8,747.40

5,310

2,768

3,071.60

1,700

1,023

1,684.10615

407

13-8, Aza Shinjuku-kochi, Nakamaruko, Nakahara
Ward, Kawasaki City, Kanagawa

Real estate
Real estate
Real estate

2,800.32

1,020

646

Real estate
Real estate

2,149.08891

552

5,415.39

3,140

1,941

Real estate
Real estate in trust

6,230.20
7,022.69

4,060
3,330

2,290
1,825

Real estate

2,784.83

1,350

848

Real estate in trust

2,828.39

1,710

1,002

Real estate in trust

4,471.11

1,920

1,049

Real estate in trust

10,354.15

3,020

2,352

Real estate in trust

5,086.69

2,480

1,436

Real estate

2,035.37

1,160

948

Real estate in trust
Real estate in trust

2,897.06
6,828.78
4,425.46
1,687.89
444,613.52
41,742.84
16,385.56

3,100
2,470
2,110
1,520
327,167
8,980
3,730

1,885
1,738
1,713
1,506
213,421
7,264
4,183

Real estate in trust

9,720.49

4,580

4,050

Real estate in trust

9,277.08

3,270

2,863

Real estate in trust

24,018.00

3,990

3,740

Real estate in trust

22,196.81

8,440

7,643

Real estate in trust

11,207.90

2,130

1,617

Real estate in trust
Real estate in trust

8,637.91
62,917.73

4,030
8,710

3,600
7,727

Real estate in trust

23,230.77

3,720

3,146

Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust

Real estate in trust

30,824.72

3,930

3,383

Real estate in trust

138,900.39

34,90033,343

Real estate in trust

2,973.44

1,930

1,626

Real estate in trust

19,845.72

7,630

6,806

5-1-1, Otsuka Minami, Inazawa City, Aichi

Real estate in trust

31,981.70

2,650

2,390

2-18-17, Kamikuzuhara, Kokuraminami Ward,
Kitakyushu City, Fukuoka

Real estate in trust

8,899.89

2,490

2,053

1-2, Kuryozutsumi, Hiratsuka City, Kanagawa

Real estate in trust

28,002.92

6,810

5,857

Asset
class

Property nameRoyal Home Center
Morinomiya (Land)
Aoyama Tailor Bunkyo
Sengoku Ekimae Store

Retail properties

Location (Note 1)

Assessedvalue at theend of period(Yen inmillions)(Note 3)

FOLEO Shobu
Hapias Kaita (Land)
COMBOX310
Sports Plaza Ibaraki

Daiwa Roynet Hotel Yokohama
KannaiSuper Hotel JR Nara Station
Sanjo Street
Daiwa Roynet Hotel Nagoya
Shinkansenguchi
AMANEK Kanazawa

Hotel properties

Property nameLeasablearea (m2)(Note 2)

3.

4.
5.

Book value(Yen inmillions)(Note 4)

1-540-1, Tamatsukuri, Chuo Ward, Osaka City,
Osaka

Real estate in trust

6,669.74

5,310

4,541

2-29-21, Honkomagome, Bunkyo Ward, Tokyo

Real estate in trust

1,066.95

785

759

Real estate in trust

19,104.17

5,350

4,826

Real estate
Real estate in trust

13,415.52
30,517.69

1,550
4,850

1,471
4,118

Real estate in trust

9,470.27

2,710

2,658

6006-1, Aza Terada, Shobu, Shobucho, Kuki City,
Saitama
2-1262-11, Une, Kaita-cho, Aki District, Hiroshima
1-107-1, Miyamachi, Mito City, Ibaraki
6-2, Eidai-cho, Ibaraki City, Osaka (Retail Building)
9-22, Eidai-cho, Ibaraki City, Osaka (Land of Parking
Garage)Retail properties – Subtotal
2-7-4, Hagoromocho, Naka Ward, Yokohama City,
Kanagawa
500-1, Sanjo-cho, Nara City, Nara
1-23, Tsubakicho, Nakamura Ward, Nagoya City,
Aichi
2-25-17, Katamachi, Kanazawa City, Ishikawa

571,008.21

132,475

119,672

Real estate in trust

7,932.37

5,000

4,584

Real estate in trust

2,637.18

1,500

1,388

Real estate in trust

7,605.41

4,390

5,276

Real estate in trust

7,011.58

5,150

4,935

3-12 Doza-machi, Nagasaki City, Nagasaki

Real estate in trust

6,770.65

3,440

2,998

7-9-6, Akasaka, Minato Ward, Tokyo

Real estate in trust

1,909.44

3,330

3,135

MIMARU Tokyo Hatchobori

3-8-8, Nihonbashi Kayabacho, Chuo Ward, Tokyo
Hotel properties – Subtotal
327-1, Sanno-cho, Inage Ward, Chiba City, Chiba
1523-1, Aza Shirasu, Misaki-machi Moroiso, Miura
City, Kanagawa

Real estate in trust
Real estate in trust

3,665.15
37,531.78
4,177.52

5,480
28,2901,340

5,135
27,455757

Real estate in trust

3,901.14

1,320

972

Naha Shin-Toshin Center
Building (Daiwa Roynet Hotel
Naha-Omoromachi)

1-1-12, Omoromachi, Naha City, Okinawa

Real estate in trust

13,480.00

8,440

6,900

Sharp Hiroshima Building

2-13-4, Nishihara, Asaminami Ward, Hiroshima City,
Hiroshima

Real estate in trust

3,064.89

Nursery Room Berry Bear
Omori Nishi Welcia Ota Omori
Nishi Store

5-25-21, Omorinishi, Ota Ward, Tokyo

Real estate in trust

1,345.60

1,380

1,374

Real estate in trust

29,915.08

33,00027,73455,884.23
3,217,720.61

47,4801,097,552

39,498849,092

GRANODE Hiroshima

2.

Form of ownership

Assessedvalue at theend of period(Yen inmillions)(Note 3)

MIMARU Tokyo Akasaka

Aburatsubo Marina HILLS(Notes) 1.

Location (Note 1)

Leasablearea (m2)(Note 2)

Candeo Hotels Nagasaki
Shinchi Chinatown

Urban Living Inage

Other assets

Asset
class

I. Asset Management Report

3-5-7, Futabanosato, Higashi Ward, Hiroshima City,
Hiroshima
Other – Subtotal
Total

2,000

1,759

“Location” means displayed address of each real estate or each real estate in trust. If a property does not have a displayed address, the address of the building in the register (whenthere is more than one address, any of them) is shown. For land properties, the address of the land in the register is shown as location.
“Leasable area” means the leasable area of the building (or land in the case of land properties) in relation to each real estate or each real estate in trust and the figures stated referto the area DHR believes is leasable as indicated in the relevant lease agreement or drawing of the building, etc. in relation to each real estate or each real estate in trust as ofFebruary 29, 2024. In the cases of each co-owned real estate or quasi co-owned trust beneficiary interests, the leasable area of the entire real estate multiplied by the ratio of coownership of the real estate or quasi co-ownership of the trust beneficiary interests in real estate held by DHR is provided.
“Assessed value at the end of period” is the appraisal value as of February 29, 2024 provided by real estate appraisers (Daiwa Real Estate Appraisal Co., Ltd., Chuo Real EstateAppraisal Co., Ltd., The Tanizawa Sōgō Appraisal Co., Ltd., Japan Real Estate Institute and JLL Morii Valuation & Advisory K.K.) in accordance with the Articles of Incorporation of
DHR as well as “Regulations on Accounting of Investment Corporations.” The amounts are rounded down to the nearest million yen. There is no special interest between DHR andeach real estate appraiser.
“Book value” is the amount recorded on the balance sheets as of February 29, 2024 (in the case of real estate and real estate in trust, “Book value” is the acquisition price (including
expenses associated with the acquisition) less accumulated depreciation), which is rounded down to the nearest million yen.
Separately from the building of this property, a part of the land of this property is leased to the lessee for the purpose of subleasing to Fukuoka Prefecture and other third parties asland for a police station, etc. Therefore, the area of such leased land is not included in the leasable area.

27

I. Asset Management Report
I. Asset Management Report

I. Asset Management Report

The status of rental business related to each asset held by DHR is as follows:
35th period(From March 1, 2023 to August 31, 2023)

28

36th period(From September 1, 2023 to February 29, 2024)

Asset
class

36th period(From September 1, 2023 to February 29, 2024)

Rental revenues(during the period)(Yen inthousands)

Rate to total realestate rental
revenues(%) (Note 2)

Occupancy rate
(as of the end of
period)(%) (Note 1)

Rental revenues(during the period)(Yen inthousands)

Rate to total realestate rental
revenues(%) (Note 2)

D Project Kuki VIII

100.0

(Note 3)(Note 3)100.0

(Note 3)(Note 3)

D Project Yokkaichi

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)(Note 3)

D Project Ibaraki Ishioka

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)(Note 3)(Note 3)

D Project Wako A

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)100.0

(Note 3)(Note 3)

D Project Hiratsuka

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)(Note 3)100.0

(Note 3)(Note 3)

D Project Kadoma I

–

–

–

100.0

(Note 3)(Note 3)(Note 3)(Note 3)100.0

(Note 3)(Note 3)

DPL Misato

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)100.0

(Note 3)(Note 3)100.0

(Note 3)(Note 3)

DPL Fukuoka Kasuya

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

D Project Inuyama

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

DPL Kitakyushu

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

D Project Neyagawa

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

DPL Nagareyama I

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

D Project Morioka

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

DPL Shin-Narashino

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

D Project Tsuchiura

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

DPL Nagareyama III

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

D Project Fukuoka Umi

100.0

136,880

0.5

100.0

136,871

0.5

Logistics properties – Subtotal

100.0

13,868,661

46.9

100.0

13,778,571

46.5

D Project Tosu

100.0

(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Qiz Ebisu

96.6

240,3620.8

95.7

240,820

0.8

D Project Kuki I

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

D Project Kuki II

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Azabujuban
Shichimenzaka

95.5

119,3960.4

95.3

116,466

0.4

D Project Kawagoe I

100.0

102,933

0.3

100.0

102,933

0.3

Castalia Shibakoen

94.9

69,3680.2

100.0

73,291

0.2

D Project Kawagoe II

100.0

142,536

0.5

100.0

142,6110.5

Castalia Ginza

93.8

70,3160.2

97.3

70,2650.2

DPL Inuyama

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Hiroo

96.4

53,3960.2

100.0

52,416

0.2

D Project Fukuoka Hakozaki

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Nihonbashi

93.4

40,7680.1

98.2

40,6740.1

D Project Kuki III

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Hacchobori

94.6

70,7580.2

100.0

69,191

0.2

D Project Kuki IV

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Azabujuban

95.9

74,332

0.3

98.4

74,9180.3

D Project Kuki V

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Azabujuban II

90.5

62,6550.2

95.7

64,0270.2

D Project Kuki VI

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

98.5

48,4100.2

97.7

49,1090.2

D Project Yashio

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Shinjuku
Natsumezaka

D Project Nishiyodogawa

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Ginza II

97.2

53,7490.2

98.5

54,2570.2

D Project Matsudo

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Shibuya
Sakuragaoka

100.0

35,4900.1

95.0

37,1300.1

D Project Hibiki Nada

100.0

(Note 3)(Note 3)100.0

(Note 3)(Note 3)

D Project Morioka II

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Nishi Azabu
Kasumicho

100.0

80,3030.3

96.0

79,0450.3

D Project Kawagoe III

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Ochanomizu

100.0

59,8630.2

96.4

63,746

0.2

D Project Kazo

100.0

(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Sangubashi

100.0

49,7250.2

100.0

49,992

0.2

D Project Urayasu III

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Suitengu

97.1

48,3430.2

100.0

49,036

0.2

D Project Tomisato

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Suitengu II

100.0

42,7390.1

100.0

44,1080.1

D Project Kyotanabe

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Shintomicho

97.7

35,1490.1

100.0

35,9700.1

D Project Sendai Izumi

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Shintomicho II

97.3

31,1640.1

100.0

30,9300.1

D Project Oyama

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Harajuku

95.1

27,5340.1

95.1

28,2300.1

Castalia Yoyogi Uehara

100.0

23,3930.1

100.0

22,9600.1

Castalia Sendagaya

95.8

21,6790.1

79.5

18,0020.1

100.0

19,8440.1

100.0

20,1900.1

Rental revenues(during the period)(Yen inthousands)

Rate to total realestate rental
revenues(%) (Note 2)

Occupancy rate
(as of the end of
period)(%) (Note 1)

Rental revenues(during the period)(Yen inthousands)

Rate to total realestate rental
revenues(%) (Note 2)

D Project Machida100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

D Project Hachioji

100.0(Note 3)(Note 3)100.0

(Note 3)

D Project Aikawa-Machi

100.0(Note 3)(Note 3)100.0

D Project Urayasu I

100.0(Note 3)(Note 3)

D Project Urayasu II

100.0(Note 3)

D Project Akanehama

100.0

D Project Noda

Property name

Logistics properties

Occupancy rate
(as of the end of
period)(%) (Note 1)

Occupancy rate
(as of the end of
period)(%) (Note 1)

Residential properties

Logistics properties

Asset
class

35th period(From March 1, 2023 to August 31, 2023)
Property name

D Project Sano

100.0

(Note 3)(Note 3)100.0

(Note 3)(Note 3)

D Project Tatebayashi

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

D Project Kakegawa

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Shinjuku 7 chome

D Project Hiroshima Seifu

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Ningyocho

95.0

40,2690.1

96.8

40,7950.1

D Project Tosu II

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Ningyocho II

100.042,3690.1

100.0

42,1930.1

D Project Kawagoe IV

100.0

161,023

0.5

100.0

161,023

0.5

Castalia Shin-Ochanomizu

100.0

34,4140.1

100.0

34,3780.1

D Project Kuki VII

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Higashi Nihonbashi II

98.8

53,476

0.2

98.5

54,103

0.2

D Project Chibakita

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Jinbocho

100.0

43,7800.1

98.2

44,0570.1

D Project Matsudo II

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Shintomicho III

95.6

23,9240.1

100.0

25,0200.1

D Project Tomisato II

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Shinjuku Gyoen

100.0

83,7870.3

100.0

83,8180.3

D Project Osaka Hirabayashi

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Takanawadai

100.0

31,0100.1

100.0

30,5480.1

D Project Sendai Izumi II

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)100.0

24,3520.1

100.0

24,336

0.1

D Project Kaminokawa

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Higashi Nihonbashi
III

D Project Fuji

100.0

(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Shinjuku Gyoen II

100.0

16,6370.1

96.3

16,386

0.1

D Project Tosu III

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Shintomicho IV

100.0

16,8100.1

100.0

17,1340.1

D Project Kitahachioji I

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Takanawadai II

94.3

36,1510.1

98.0

39,541

0.1

D Project Kitahachioji II

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Minami Azabu

94.2

21,1810.1

96.0

22,2300.1

D Project Kitahachioji III

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Ginza III

98.3

90,4580.3

98.7

89,826

0.3

D Project Itabashi Shingashi

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Kayabacho

96.6

103,174

0.3

98.8

105,380

0.4

D Project Sagamihara

100.0

102,828

0.3

100.0

102,828

0.3

Castalia Takanawa

97.4

264,579

0.9

97.8

266,446

0.9

Castalia Higashi Nihonbashi

99.1

150,058

0.5

97.4

149,475

0.5

29

I. Asset Management Report
I. Asset Management Report

I. Asset Management Report
35th period(From March 1, 2023 to August 31, 2023)

30

35th period(From March 1, 2023 to August 31, 2023)

Rental revenues(during the period)(Yen inthousands)

Rate to total realestate rental
revenues(%) (Note 2)

Occupancy rate
(as of the end of
period)(%) (Note 1)

Rental revenues(during the period)(Yen inthousands)

Rate to total realestate rental
revenues(%) (Note 2)

Castalia Shinjuku

100.0

92,5540.3

100.0

92,5700.3

Castalia Ichigaya

100.0

44,5890.2

89.8

40,842

0.1

Shibaura Island Bloom Tower

96.5

410,620

1.4

96.3

408,839

Castalia Hatsudai

96.5

69,9720.2

98.8

Castalia Hatsudai II

89.1

60,3780.2

Castalia Ebisu

88.9

44,061

Castalia Meguro Kamurozaka

96.6

Castalia Toritsudaigaku

Asset
class

36th period(From September 1, 2023 to February 29, 2024)

Occupancy rate
(as of the end of
period)(%) (Note 1)

Rental revenues(during the period)(Yen inthousands)

Rate to total realestate rental
revenues(%) (Note 2)

Occupancy rate
(as of the end of
period)(%) (Note 1)

Rental revenues(during the period)(Yen inthousands)

Rate to total realestate rental
revenues(%) (Note 2)

Castalia Funabashi

96.6

31,7930.1

94.2

31,0200.1

Castalia Nishi Funabashi

98.8

35,1290.1

98.8

34,0490.1

1.4

Castalia Nogeyama

93.3

15,371

0.1

96.7

14,6420.0

69,7250.2

Castalia Ichikawa

100.0

19,6920.1

100.0

19,6800.1

98.8

60,341

0.2

Royal Parks Hanakoganei

100.0

246,546

0.8

100.0

246,848

0.8

0.1

100.0

43,8250.1

Castalia Musashikosugi

94.4

56,7320.2

98.9

57,6420.2

132,6910.4

99.1

133,196

0.4

Royal Parks Wakabadai

100.0

261,681

0.9

100.0

262,326

0.9

100.0

18,6020.1

96.9

19,8360.1

Castalia Yukigaya

94.8

35,1600.1

94.7

35,840

0.1

Pacific Royal Court
Minatomirai Urban Tower

100.0

530,462

1.8

100.0

530,460

1.8

Castalia Yutenji

100.0

37,0390.1

97.4

38,296

0.1

L-Place Shinkoyasu

100.0

56,8680.2

100.0

56,8030.2

Castalia Otsuka

93.3

47,8800.2

97.1

48,3990.2

Royal Parks Musashikosugi

100.0

69,5480.2

100.0

69,5040.2

Castalia Kikukawa

94.1

27,6040.1

100.0

27,2290.1

Castalia Sakaisuji Honmachi

92.8

60,2650.2

99.1

65,901

0.2

Castalia Meguro

100.0

34,2830.1

95.8

35,7200.1

Castalia Shin-Umeda

99.2

54,6130.2

100.0

55,7780.2

Castalia Otsuka II

100.0

38,8880.1

100.0

39,5840.1

Castalia Abeno

99.4

182,8980.6

98.0

182,325

0.6

Castalia Jiyugaoka

95.6

40,0350.1

94.6

38,9430.1

Castalia Sakae

89.3

44,0280.1

94.8

43,2860.1

Castalia Mejiro

96.2

35,0960.1

100.0

34,4270.1

Castalia Higashi Hie

100.0

45,0980.2

99.2

44,7120.2

Castalia Ikebukuro

96.0

87,924

0.3

97.7

89,2620.3

Castalia Tower Nagahoribashi

96.2

165,978

0.6

98.8

165,521

0.6

Castalia Kaname-cho

98.6

40,5530.1

100.0

41,1140.1

Castalia Sannomiya

92.8

52,2660.2

99.1

52,8860.2

Castalia Tower Shinagawa
Seaside96.7

295,965

1.0

97.9

296,906

1.0

Castalia Kotodaikoen

98.2

24,1690.1

98.2

24,0740.1

Castalia Ichibancho

93.8

38,0950.1

98.4

38,8180.1

Castalia Yakumo

100.0

23,9000.1

100.0

23,9340.1

Castalia Omachi

98.6

32,1340.1

97.2

32,3640.1

Castalia Togoshiekimae

100.0

55,5510.2

100.0

53,7260.2

Castalia Uemachidai

97.2

93,1650.3

100.0

96,2780.3

Castalia Honjo Azumabashi

100.0

41,2130.1

100.0

40,0340.1

Castalia Tower Higobashi

95.6

130,6470.4

97.8

129,386

0.4

Castalia Kitazawa

93.4

25,9680.1

100.0

28,3220.1

Castalia Fushimi

93.7

103,5690.4

95.0

103,636

0.3

Castalia Monzennakacho

100.0

17,6700.1

100.0

17,7000.1

Castalia Kamiikedai

60.6

3,916

0.0

24.9

4,209

0.0

Castalia Meieki Minami(Note 4)

—

4,966

—

—

—

—

Castalia Morishita

97.8

33,5480.1

100.0

34,2070.1

Castalia Yakuin

97.5

43,981

0.1

98.3

44,0640.1

Castalia Wakabayashikoen

95.7

28,9260.1

100.0

28,2600.1

Castalia Mibu

95.1

48,2950.2

96.3

47,551

0.2

Castalia Asakusabashi

92.5

33,7670.1

98.0

34,8430.1

Castalia Tsutsujigaoka

96.4

57,9460.2

94.4

59,4850.2

Castalia Iriya

100.0

24,1560.1

100.0

24,985

0.1

Royal Parks Namba

100.0

140,353

0.5

100.0

140,426

0.5

Castalia Kita Ueno

98.4

96,4980.3

100.0

96,811

0.3

Castalia Shigahondori

95.5

74,275

0.3

97.2

74,9490.3

Castalia Morishita II

97.6

28,6020.1

100.0

29,1100.1

Castalia Kyoto Nishioji

97.5

33,9910.1

95.0

33,2690.1

Castalia Minowa

97.3

52,5930.2

99.0

52,9580.2

Castalia Ningyocho III

99.0

72,6330.2

99.0

71,4560.2

Castalia Oyamadai

100.0

17,3600.1

100.0

17,377

0.1

Royal Parks Umejima

100.0

104,684

0.4

100.0

103,589

0.3

Castalia Nakano

97.7

37,8840.1

97.7

36,9370.1

Castalia Shinsakae II

100.0

59,9660.2

100.0

59,9260.2

Castalia Yoga

91.0

33,1380.1

98.3

33,6050.1

Castalia Sumiyoshi II

97.2

34,1380.1

93.2

35,6630.1

Castalia Sumiyoshi

95.3

33,9870.1

100.0

34,1140.1

97.8

9,331,977

31.6

98.5

9,351,170

31.5

Castalia Monzennakacho II

100.0

69,8290.2

100.0

69,3080.2

Castalia Oshiage

97.7

41,8500.1

100.0

38,727

0.1

ACROSSMALL
Shinkamagaya

100.0

280,500

0.9

100.0

280,500

0.9

Castalia Kuramae

100.0

43,8070.1

100.0

43,831

0.1

FOLEO Hirakata

94.3

245,933

0.8

94.3

239,573

0.8

Castalia Nakanobu

96.8

65,7800.2

94.0

69,5060.2

QiZ GATE URAWA

100.0

204,629

0.7

100.0

226,2810.8

Royal Parks Toyosu

100.0

346,006

1.2

100.0

345,831

1.2

UNICUS Takasaki

100.0

129,870

0.4

100.0

129,870

0.4

Castalia Togoshi

97.4

74,7260.3

98.2

74,1850.3

Castalia Ooimachi

100.0

41,8180.1

100.0

41,143

0.1

ACROSSPLAZA Miyoshi(Land)

100.0

94,2900.3

100.0

94,2950.3

Castalia Omori

100.0

51,7830.2

100.0

52,2890.2

DREAM TOWN ALi

99.7

355,4981.2

99.7

359,204

1.2

Castalia Mishuku

100.0

72,472

0.2

98.9

71,036

0.2

ASOBOX (Land)

100.0

47,0880.2

100.0

47,0880.2

Castalia Arakawa

98.4

69,851

0.2

98.4

69,792

0.2

FOLEO Ome Imai

100.0

128,829

0.4

100.0

128,820

0.4

Castalia Omori II

96.3

80,784

0.3

98.5

80,936

0.3

FOLEO Otsu Ichiriyama

100.0

323,463

1.1

100.0

322,620

1.1

Castalia Nakameguro

93.9

119,130

0.4

94.7

117,958

0.4

FOLEO Hakata

100.0

126,816

0.4

100.0

126,816

0.4

Castalia Meguro Chojyamaru

94.0

64,5580.2

100.0

64,5730.2

100.0

90,6120.3

100.0

90,6120.3

Castalia Meguro Takaban

88.8

52,7090.2

98.4

52,674

0.2

ACROSSMALL Semboku(Land)

Castalia Omori III

95.0

47,8970.2

98.3

49,001

0.2

iias Tsukuba

100.0

1,094,509

3.7

100.0

1,075,000

3.6

LIFE Sagamihara Wakamatsu

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

FOLEO Sendai Miyanomori

100.0

239,477

0.8

100.0

239,274

0.8

ACROSSPLAZA Inazawa(Land)

100.0

69,8400.2

100.0

69,8400.2

Sports Depo and GOLF5
Kokurahigashi IC Store

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Meguro Tairamachi

94.3

34,2290.1

100.0

34,2780.1

Royal Parks SEASIR

100.0

248,634

0.8

100.0

249,030

0.8

Castalia Honkomagome

97.7

51,5200.2

96.6

51,811

0.2

Cosmo Heim Musashikosugi

100.0

60,2080.2

100.0

60,1640.2

Castalia Tsurumi

100.0

30,6100.1

100.0

30,252

0.1

Residential properties

Occupancy rate
(as of the end of
period)(%) (Note 1)

Property name

Property nameResidential properties –Subtotal

Retail properties

Residential properties

Asset
class

36th period(From September 1, 2023 to February 29, 2024)

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I. Asset Management Report

I. Asset Management Report
35th period(From March 1, 2023 to August 31, 2023)

Other assets

Hotel properties

Retail properties

Asset
class

(Notes) 1.
2.
3.
4.

(7) Status of Other Assets

36th period(From September 1, 2023 to February 29, 2024)

Occupancy rate
(as of the end of
period)(%) (Note 1)

Rental revenues(during the period)(Yen inthousands)

Rate to total realestate rental
revenues(%) (Note 2)

Occupancy rate
(as of the end of
period)(%) (Note 1)

Rental revenues(during the period)(Yen inthousands)

Rate to total realestate rental
revenues(%) (Note 2)

Hiratsuka Retail Property(Land)

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Royal Home Center
Morinomiya (Land)

100.0

104,880

0.4

100.0

105,960

0.4

Aoyama Tailor Bunkyo
Sengoku Ekimae Store

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

FOLEO Shobu

100.0

157,776

0.5

100.0

157,776

0.5

Hapias Kaita (Land)

100.0

38,5500.1

100.0

38,766

0.1

COMBOX310

100.0

151,500

0.5

100.0

151,500

0.5

Sports Plaza Ibaraki

100.0

82,8420.3

100.0

82,8420.3

Property nameRetail properties – Subtotal

99.8

4,254,585

14.4

99.8

4,254,291

14.4

Daiwa Roynet Hotel
Yokohama Kannai

100.0

156,094

0.5

100.0

157,200

0.5

Super Hotel JR Nara Station
Sanjo Street

100.0

49,6080.2

100.0

49,0380.2

Daiwa Roynet Hotel Nagoya
Shinkansenguchi

100.0

126,000

0.4

100.0

126,000

0.4

AMANEK Kanazawa

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Candeo Hotels Nagasaki
Shinchi Chinatown

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

MIMARU Tokyo Akasaka

0.2

100.0

61,4280.2

100.0

69,669MIMARU Tokyo Hatchobori

–

–

–

100.0

114,438

0.4

Hotel properties – Subtotal

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Urban Living Inage

100.0

39,0600.1

100.0

39,0600.1

Aburatsubo Marina HILLS

100.0

43,7490.1

100.0

43,7490.1

Naha Shin-Toshin Center
Building (Daiwa Roynet Hotel
Naha-Omoromachi)

100.0

345,474

1.2

100.0

348,032

1.2

Sharp Hiroshima Building

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Nursery Room Berry Bear
Omori Nishi Welcia Ota
Omori Nishi Store

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)GRANODE Hiroshima

98.6

1,027,803

3.5

100.0

1,000,657

3.4

Other – Subtotal

99.2(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Total

99.6

29,570,814

100.0

99.8

29,643,403

100.0Real estate and trust beneficiary interests in real estate are all listed in “(3) Description of Portfolio” presented earlier in this report. The following
are other specified assets as of February 29, 2024.
(Yen in thousands)

Type

Issue name

Total facevalueBook value

Accruedinterest

Prepaid
Fair value
accrued interest

Valuation
gain or loss

RemarkGovernment
bonds

30-year principalstripped government
bonds(Series 27)

10,000

9,532

–

–

8,661

(871)

Deposited asbusiness security
depositTotal

10,000

9,532

–

–

8,661

(871)

(8) Holding of Assets by Country and Region
Not applicable.

“Occupancy rate (as of the end of period)” is the leased area expressed as a percentage of the leasable area of each real estate or each real estate in trust as of August 31, 2023
and February 29, 2024, rounded to the first decimal place.
“Rate to total real estate rental revenues” is the rental revenues from each real estate or each real estate in trust expressed as a percentage of total rental revenues from the entire
portfolio, rounded to the first decimal place.
Undisclosed as consent for disclosure has not been obtained from the lessee. In addition, certain subtotals (rental revenues and rate to total real estate rental revenues for “Hotelproperties – Subtotal” and “Other – Subtotal”), disclosure of which would reveal items for which the consent for disclosure has not been obtained from the lessee, are undisclosed.
The disposition of property was completed on March 30, 2023.

(4) Description of Renewable Energy Power Generation Facilities, etc.
Not applicable.

(5) Description of Operating Rights of Public Facilities, etc.
Not applicable.

(6) Summary of Outstanding Contracted Amount and Fair Value of Specified Transactions
The following summarizes contracted amount and fair value of specified transactions of DHR as of February 29, 2024.
Category
Transaction other thanmarket transaction(Notes) 1.
2.
3.

32

Type

Contracted amount (Yen in thousands) (Note 1)
Portion due after one year

Fair value(Yen in thousands)(Note 2) (Note 3)

Interest rate swap transaction
Receipt: floating interest rate
Payment: fixed interest rate

61,400,000

58,400,000

922,792

Total

61,400,000

58,400,000

922,792“Contracted amount” is based on the notional principal amount.
“Fair value” is quoted by counterparties based on the prevailing market interest rate.
With respect to fair value amounts, the transactions for which the special treatment for interest rate swap contracts under the accounting standard for financial instruments is applied
are not carried at fair value in the balance sheets.

33

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I. Asset Management Report

4. Capital Expenditures for Properties Held

(2) Capital Expenditures during the Period(1) Schedule of Capital Expenditures
The following table shows major scheduled capital expenditures for planned renovation work, etc. for owned properties (real estate, real estate intrust, etc.) as of February 29, 2024. The estimated construction cost includes the portion charged to expenses.
Property name
(Location)
D Project Kawagoe I(Kawagoe City, Saitama)
D Project Kaminokawa(Kawachi District, Tochigi)

Estimated construction cost (Yen in thousands)
PurposeScheduled period

Total amountPayment during
the period

Total amountpaid

For owned properties (real estate, real estate in trust, etc.), an overview of major construction work conducted during the current fiscal period that
falls into DHR’s capital expenditures is as follows: Capital expenditures during the current fiscal period were ¥2,368,633 thousand together with
¥913,272 thousand in repairs and maintenance expenses and ¥225,970 thousand in restoration costs classified as expenses for the current fiscal
period, making a total of ¥3,507,876 thousand in construction work.
Property name
(Location)

Construction cost
(Yen in thousands)

PeriodD Project Kuki II(Kuki City, Saitama)

Installation of cubicles

From July 2023
to October 2023

179,139

D Project Kuki II(Kuki City, Saitama)

Replacement of HVAC

From July 2023
to October 2023

308,981

D Project Urayasu III(Urayasu City, Chiba)

Replacement of indoor and outdoor fire hydrant
pipes

From October 2023
to February 2024

101,788

Castalia Higashi Nihonbashi III(Chuo Ward, Tokyo)

Intercom renewal

From January 2024
to February 2024

10,605

Castalia Morishita II(Koto Ward, Tokyo)

Large-scale renovations

From September 2023
to February 2024

36,634Exterior wall repair work

From April 2024
to June 2024

57,024––

Formation of fire compartments

From August 2023
to March 2024

736,417368,500

589,600

D Project Kitahachioji I(Hachioji City, Tokyo)

Replacement of HVAC

From March 2024
to May 2024

99,253––

D Project Kuki VIII
(Kuki City, Saitama)

Construction of hazardous
materials storage

From April 2024
to July 2024

62,04029,92029,920DPL Fukuoka Kasuya(Kasuya District, Fukuoka)

Renewal of disaster prevention
equipment

From May 2024
to August 2024

117,040––

Large-scale renovations

Large-scale renovations

From February 2024
to August 2024

From September 2023
to February 2024

91,851

Castalia Shinjuku(Shinjuku Ward, Tokyo)

Castalia Togoshi(Shinagawa Ward, Tokyo)

122,980––

Large-scale renovations

Intercom renewal

From July 2024
to August 2024

From September 2023
to February 2024

29,812

Castalia Kaname-cho(Toshima Ward, Tokyo)

Castalia Mishuku(Setagaya Ward, Tokyo)

15,404––Large-scale renovations

Large-scale renovations

From February 2024
to March 2025

From September 2023
to February 2024

17,480Royal Parks Toyosu(Koto Ward, Tokyo)

Castalia Musashikosugi(Kawasaki City, Kanagawa)

616,000––

Large-scale renovations

Large-scale renovations

From September 2023
to August 2024

From September 2023
to February 2024

31,035

Castalia Tower Nagahoribashi(Osaka City, Osaka)

Castalia Sakae(Nagoya City, Aichi)

298,100––

Intercom renewal

Replacement of water supply
pump

From February 2025
to February 2025

From September 2023
to September 2023

18,115

Castalia Kotodaikoen(Sendai City, Miyagi)

Castalia Higashi Hie(Fukuoka City, Fukuoka)

6,578

–

–

Intercom renewal

Large-scale renovations

From April 2024
to October 2024

From September 2023
to September 2023

16,435

Castalia Omachi(Sendai City, Miyagi)

Castalia Yakuin(Fukuoka City, Fukuoka)

104,500––

Preventive maintenance of
mechanical parking equipment

From January 2025
to February 2025

From November 2023
to January 2024

100,122

Castalia Yakuin(Fukuoka City, Fukuoka)

ACROSSMALL Shinkamagaya
Replacement of HVAC (first phase)(Kamagaya City, Chiba)

11,871––

Exterior wall painting second
phase

From September 2023
to March 2024

139,700

75,90075,900Replacement of outdoor-air
ACROSSMALL Shinkamagaya handling units(Kamagaya City, Chiba)
Replacement of central monitor
deviceFrom February 2024
to August 2024

76,780––From May 2024
to August 2024

57,530––Replacement of HVAC second
phase

From October 2024
to December 2024

136,521––

FOLEO Otsu Ichiriyama(Otsu City, Shiga)

Replacement of fire alarm
monitor and disaster responsemonitor

From January 2024
to July 2024

93,500––iias Tsukuba(Tsukuba City, Ibaraki)

From February 2024
Exterior wall repair work phase III
to August 2024

217,470––(3) Cash Reserves for Long-Term Repair and Maintenance Plans
DHR accumulates the following cash reserves for repair and maintenance in order to provide for payment of funds for future maintenance of thevalue of assets and the renewal of facilities and equipment.
(Yen in thousands)

Operating period
Balance of reserves atthe beginning of period
Amount of reserves
during period
Amount of reversal ofreserves during period
Reserves carried forward

34

Purpose32nd period
From
September 1, 2021
to February 28, 2022

33rd period
From
March 1, 2022
to August 31, 2022

34th period
From
September 1, 2022
to February 28, 2023

35th period
From
March 1, 2023
to August 31, 2023

36th period
From
September 1, 2023
to February 29, 2024

1,506,595

1,520,675

1,534,755

1,548,835

1,562,915

14,08014,08014,08014,08014,080

–

–

–

–

–

1,520,675

1,534,755

1,548,835

1,562,915

1,576,995

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I. Asset Management Report

5. Expenses and Liabilities(2) Debt Financing
The status of loans per financial institution as of February 29, 2024 is as follows:(1) Expenses Incurred in Connection with Management of Assets
36th period
From September 1, 2023 to February 29, 2024

1,916,817

1,932,569

Asset custody fees

38,34938,360Administrative service fees

93,73095,013

Directors’ remuneration

6,720

6,720

Item
Asset management fees (Note)

Other expenses
Total(Note)

458,395

415,5072,514,013

2,488,171

Balance attheend ofperiod(Yen inthousands)–

1,000,000–

1,000,000

Mizuho Bank, Ltd.

–

1,000,000

Resona Bank, Limited–

1,000,000–

4,000,000

LenderShort-term loans

35th period
From March 1, 2023 to August 31, 2023

Balance atthebeginningof period(Yen inthousands)

Classification(Yen in thousands)

As for the asset management fees, in addition to the amount shown above, there were a management fee for property acquisition included in the cost of acquisition of individual
investment properties, etc. of ¥15,580 thousand and a management fee for disposition of properties of ¥5,005 thousand for the 35th period. For the 36th period, there were a management
fee for property acquisition included in the cost of acquisition of individual investment properties, etc. of ¥33,370 thousand and a management fee for disposition of properties of ¥10
thousand.

Borrowingdate

Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
LimitedSubtotal

October 2,
2023

–

Use

Note

0.23%

September
30, 2024

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

–

–

–

–

Nippon Life Insurance Company

September
30, 2014

1,000,000–

1.00%(Note 3)September
29, 2023

Bulletrepayment(Note 4)Development Bank of JapanInc.

January
30, 2015

2,000,000–

0.88% January 31,(Note 3)2024

Bulletrepayment(Note 6)

Unsecuredand nonguaranteed

1,000,000–

1,000,000–

0.99%(Note 2)October 2,
2023

Bulletrepayment(Note 4)

Mizuho Bank, Ltd.

1,000,000–

Unsecuredand nonguaranteed

Resona Bank, Limited

1,000,000–

Mizuho Bank, Ltd.

4,000,000–

4,000,000–

1,000,000

0.57%– (Note 3)

September
29, 2023

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

1,000,000–

1,000,000–

0.43%(Note 3)September
29, 2023

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

900,000–

1,900,000–

900,000–

900,000–

0.26%

September
29, 2023(Note 5)Resona Bank, Limited

800,000–

Bulletrepayment

Unsecuredand nonguaranteed

The Norinchukin Bank

500,000–

The Chiba Bank, Ltd.

500,000–

SBI Shinsei Bank, Limited

300,000–

Sumitomo Mitsui Banking
Corporation

1,000,000

1,000,000

1,000,000

1,000,000

April 1,
2024

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

March 29,
2024

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

Sumitomo Mitsui Trust Bank,
LimitedSumitomo Mitsui Trust Bank,
Limited
MUFG Bank, Ltd.

April 1,
2015

March 31,2017

Mizuho Trust & Banking Co.,Ltd.
Current portion of long-term loans

Method ofrepayment

Unsecuredand nonguaranteed

Sumitomo Mitsui Banking
Corporation

The Dai-ichi Life Insurance
Company, Limited

September
27, 2018

Sumitomo Mitsui Trust Bank,
Limited
MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.

MUFG Bank, Ltd.

March 31,2020

500,000

1.52%
500,000 (Note 2)

500,000

500,000

MUFG Bank, Ltd.

2,800,000

2,800,000

Sumitomo Mitsui Trust Bank,
Limited

1,800,000

1,800,000

1,800,000

1,800,000

1,800,000

1,800,000

1,500,000

1,500,000

Resona Bank, Limited

900,000

900,000

SBI Shinsei Bank, Limited

400,000

400,000

Sumitomo Mitsui Trust Bank,
LimitedApril 1,
2014

Development Bank of JapanInc.

Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
Aozora Bank, Ltd.

36

Averageinterest Repayment
rate
date
(Note 1)

September
30, 2016

0.48%(Note 3)37

I. Asset Management Report
I. Asset Management Report

LenderMitsui Sumitomo Insurance
Company, Limited

Borrowingdate

Balance atthebeginningof period(Yen inthousands)

Balance attheend ofperiod(Yen inthousands)

March 9,2017

1,000,000

1,000,000

500,000

500,000

1,500,000

1,500,000

Sumitomo Mitsui Trust Bank,
LimitedSumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.

1,000,000

1,000,000

500,000

500,000

The Norinchukin Bank

500,000

500,000

SBI Shinsei Bank, Limited

500,000

500,000

Shinkin Central Bank

500,000

500,000–

1,000,000

Sumitomo Mitsui Banking
Corporation–

1,000,000

The Norinchukin Bank–

1,100,000

Sumitomo Mitsui Trust Bank,
Limited–1,000,000

SBI Shinsei Bank, Limited–

1,000,000

Shinkin Central Bank–

1,000,000

Aozora Bank, Ltd.

Nippon Life Insurance Company

Current portion of long-term loans

April 10,2018

The Bank of Fukuoka, Ltd.

September
28, 2015

April 10,2019

The Chiba Bank, Ltd.

–

500,000

The Iyo Bank, Ltd.

–

500,000

The Chugoku Bank, Limited–

500,000

Sumitomo Mitsui Trust Bank,
Limited

–500,000

The Norinchukin Bank–

1,000,000

The 77 Bank, Ltd.

–

700,000–

700,000–

600,000–

500,000

MUFG Bank, Ltd.

–

500,000

Mizuho Bank, Ltd.

–

500,000

The Chiba Bank, Ltd.

–

500,000

The Iyo Bank, Ltd.

–

500,000

44,700,000

35,100,000

Sumitomo Mitsui Banking
Corporation

Subtotal–

Bulletrepayment(Note 7)

March 29,
2024

Note
LenderUnsecuredand nonguaranteed

0.52%(Note 3)

April 30,
2024

Bulletrepayment(Note 4)

MUFG Bank, Ltd.

Unsecuredand nonguaranteed

September
30, 2024

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

October 31,
2024

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

0.35%(Note 3)October 31,
2024

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed––

500,000

500,000

Use

Note

April 1,
2026

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

1.23%(Note 2)October 1,
2025

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

500,000

Sumitomo Mitsui Banking
Corporation

1,000,000

1,000,000

1,000,000

1,000,000

MUFG Bank, Ltd.

1,000,000

1,000,000

Mizuho Bank, Ltd.

1,000,000

1,000,000

April 1,2015

MUFG Bank, Ltd.

April 1,
2015

3,000,000

3,000,000

1.18%(Note 3)October 1,
2025

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

Development Bank of JapanInc.

April 1,2015

1,500,000

1,500,000

1.46%(Note 3)

April 1,
2027

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

September
28, 2015

1,000,000–

0.73%(Note 3)September
30, 2024

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

1,000,000

1,000,000

1,000,000

1,000,000
1,000,000

May 30,2025

Bulletrepayment(Note 5)1,000,000

0.97%(Note 2)

Unsecuredand nonguaranteed

Mizuho Bank, Ltd.

1,000,000

1,000,000

Sumitomo Mitsui Banking
Corporation

1,000,000

1,000,000

1,000,000

1,000,000
1,000,000

May 29,2026

Bulletrepayment(Note 5)1,000,000

1.09%(Note 2)

Unsecuredand nonguaranteed

Mizuho Bank, Ltd.

1,000,000

1,000,000

Sumitomo Mitsui Banking
Corporation

1,500,000

1,500,000

Sumitomo Mitsui Trust Bank,
Limited

1,500,000

1,500,000

MUFG Bank, Ltd.

2,000,000

2,000,000

1,500,000

1,500,000

September
29, 2025

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

0.69%(Note 3)September
28, 2026

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

0.87%(Note 3)

November30, 2026

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui Trust Bank,
Limited

MUFG Bank, Ltd.
Sumitomo Mitsui Trust Bank,
LimitedNovember30, 2015

November30, 2015

500,000

0.63%
500,000 (Note 3)

Mizuho Trust & Banking Co.,Ltd.

500,000

500,000

SBI Shinsei Bank, Limited

500,000

500,000

Shinkin Central Bank

500,000

500,000

The Bank of Fukuoka, Ltd.

500,000

500,000

1,000,000

1,000,000

3,000,000

3,000,000

3,000,000

3,000,000

5,000,000

5,000,000

3,000,000

3,000,000

1,000,000

1,000,000

Development Bank of JapanInc.

September
28, 2016

September
28, 2016

Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Trust Bank,
LimitedResona Bank, Limited

38

500,000

Method ofrepayment

500,000

Resona Bank, Limited–

500,000

Averageinterest Repayment
rate
date
(Note 1)Development Bank of JapanInc.

Mizuho Bank, Ltd.

–Balance attheend ofperiod(Yen inthousands)

500,000

Nippon Life Insurance Company
0.39%

April 1,
2014

Balance atthebeginningof period(Yen inthousands)

2.03%
500,000 (Note 2)

Sumitomo Mitsui Trust Bank,
Limited0.73%(Note 3)

Borrowingdate

Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
Limited

500,000
500,000

April 3,
2020

0.55%
(Note 3)––

Nippon Life Insurance Company

Use

500,000 (Note 3)

The Nishi-Nippon City Bank,Ltd.

The Chugoku Bank, Limited

Method ofrepayment–

The 77 Bank, Ltd.

Classification

Averageinterest Repayment
rate
date
(Note 1)Long-term loans

Classification

I. Asset Management Report

November29, 2016

39

I. Asset Management Report
I. Asset Management Report
Classification
LenderDevelopment Bank of JapanInc.

Borrowingdate

Balance atthebeginningof period(Yen inthousands)

Balance attheend ofperiod(Yen inthousands)

March 9,2017

2,000,000

2,000,000

4,000,000

4,000,000

2,500,000

2,500,000

Sumitomo Mitsui Banking
Corporation
Aozora Bank, Ltd.

Balance attheend ofperiod(Yen inthousands)

0.85%(Note 3)

Bulletrepayment(Note 7)

April 10,2018

2,000,000

2,000,000

500,000

500,000

1,500,000

1,500,000

Mizuho Bank, Ltd.

500,000

500,000

500,000

500,000

Note
LenderUnsecuredand nonguaranteed

Development Bank of JapanInc.
Sumitomo Mitsui Trust Bank,
LimitedUnsecuredand nonguaranteed

Sumitomo Mitsui Banking
Corporation

Use

Note

0.65%
(Note 3)

April 30,
2026

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

500,000

0.60%
500,000 (Note 3)

April 30,
2025

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

April 28,
2028

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

0.60%(Note 3)September
30, 2025

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

0.88%(Note 3)

December29, 2028

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

0.43%(Note 3)September
30, 2025

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

1,500,000

1,500,000

Resona Bank, Limited

1,000,000

1,000,000

Aozora Bank, Ltd.

Sumitomo Mitsui Banking
Corporation

1,800,000

1,800,000

The Norinchukin BankMUFG Bank, Ltd.

2,200,000

2,200,000

Resona Bank, Limited

500,000

500,000

Mizuho Bank, Ltd.

1,200,000

1,200,000

SBI Shinsei Bank, Limited

500,000

500,000

Resona Bank, Limited

1,100,000

1,100,000

Shinkin Central Bank

500,000

500,000

3,000,000

3,000,000

3,000,000

3,000,000

1,000,000

0.76%
1,000,000 (Note 3)

SBI Shinsei Bank, Limited

1,000,000

1,000,000

The Bank of Fukuoka, Ltd.

1,000,000

1,000,000

Sumitomo Mitsui Trust Bank,
Limited

700,000

700,000

Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui Trust Bank,
LimitedApril 11,2017

Mizuho Bank, Ltd.

April 30,
2026

Bulletrepayment

Method ofrepayment

MUFG Bank, Ltd.

April 11,2017

March 31,2025

Averageinterest Repayment
rate
date
(Note 1)2,000,000

Mizuho Trust & Banking Co.,Ltd.

Long-term loans

Use

Bulletrepayment(Note 5)(Note 4)

Unsecuredand nonguaranteed

Sumitomo Mitsui Banking
Corporation

2,500,000

0.89%
2,500,000 (Note 3)

1,000,000

1,000,000

500,000

500,000

1,000,000

1,000,000

1,100,000

1,100,000

1,100,000

1,100,000

1,100,000

1,100,000

1,100,000

1,100,000

600,000

600,000

Sumitomo Mitsui Trust Bank,
Limited

2,200,000

2,200,000

Aozora Bank, Ltd.

1,500,000

1,500,000

1,100,000

1,100,000

700,000

700,000

The Chiba Bank, Ltd.

600,000

600,000

Mizuho Bank, Ltd.

500,000

500,000

The Bank of Fukuoka, Ltd.

500,000

500,000

The Shizuoka Bank, Ltd.

500,000

500,000

Mizuho Bank, Ltd.

2,100,000

2,100,000

3,700,000

3,700,000

1,800,000

1.02%
1,800,000(Note 3)

April 28,
2028

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

Resona Bank, Limited
Taiyo Life Insurance Company

1,800,000

1,800,000

600,000

600,000

Sumitomo Mitsui Trust Bank,
Limited

3,400,000

3,400,000

3,400,000

3,400,000

Mizuho Bank, Ltd.

3,400,000

3,400,000

MUFG Bank, Ltd.

1,900,000

1,900,000

Sumitomo Mitsui Banking
Corporation

2,500,000

2,500,000

MUFG Bank, Ltd.

2,000,000

2,000,000

The Norinchukin Bank
Sumitomo Mitsui Banking
Corporation

July 31,2017

Development Bank of JapanInc.

3,000,000

3,000,000

Sumitomo Mitsui Trust Bank,
Limited

2,500,000

2,500,000

The 77 Bank, Ltd.

1,000,000

The Nishi-Nippon City Bank,
Ltd.

1,000,000

1,000,000

The Iyo Bank, Ltd.

500,000

500,000

The Bank of Kyoto, Ltd.

500,000

500,000

The Chugoku Bank, Limited

500,000

500,000

1,500,000

1,500,000

MUFG Bank, Ltd.

November29, 2017

0.89%(Note 3)0.90%
2,500,000 (Note 3)
1,000,000

Mizuho Bank, Ltd.

March 27,2018

2,500,000

April 10,2018

Mizuho Trust & Banking Co.,Ltd.

Mizuho Trust & Banking Co.,
Ltd.

Sumitomo Mitsui Banking
Corporation

April 10,2018

Sumitomo Mitsui Trust Bank,
LimitedLong-term loans

March 31,2017

Method ofrepayment

March 31,2027

Borrowingdate

Balance atthebeginningof period(Yen inthousands)

Classification

Averageinterest Repayment
rate
date
(Note 1)0.70%
2,000,000 (Note 3)

Shinkin Central Bank

40

I. Asset Management Report

0.75%(Note 3)

July 30,
2027

November30, 2027

September
30, 2027

Bulletrepayment

Bulletrepayment

Bulletrepayment(Note 5)(Note 5)(Note 4)

Unsecuredand nonguaranteed

Unsecuredand nonguaranteed

Unsecuredand nonguaranteed

September
27, 2018

Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
LimitedMizuho Bank, Ltd.

December
7, 2018

Japan Post Insurance Co., Ltd.
MUFG Bank, Ltd.

March 29,2019

Mitsui Sumitomo Insurance
Company, Limited

April 5,2019

1,000,000

1,000,000

0.45%(Note 3)

April 30,
2026

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

Nippon Life Insurance Company

April 5,2019

500,000

500,000

0.50%(Note 3)

April 30,
2027

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

Development Bank of JapanInc.

April 5,2019

1,500,000

1,500,000

0.59%(Note 3)

April 28,
2028

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed41

I. Asset Management Report
I. Asset Management Report
Balance atthebeginningof period(Yen inthousands)

Balance attheend ofperiod(Yen inthousands)

Sumitomo Mitsui Banking
Corporation

1,000,000–

The Norinchukin Bank

1,100,000–

Sumitomo Mitsui Trust Bank,
Limited1,000,000–

SBI Shinsei Bank, Limited

1,000,000–

Classification
LenderShinkin Central Bank

Borrowing
date

Use

Note
LenderMitsui Sumitomo Insurance
Company, Limited

Borrowingdate

Balance atthebeginningof period(Yen inthousands)

Balance attheend ofperiod(Yen inthousands)

April 1,2020

1,000,000

1,000,000

500,000–

Sumitomo Mitsui Trust Bank,
LimitedThe Norinchukin Bank–

1,000,000–

The 77 Bank, Ltd.

700,000–

The Chugoku Bank, Limited

700,000–

Nippon Life Insurance Company

600,000–

500,000–

500,000–

The 77 Bank, Ltd.

500,000–

The Nishi-Nippon City Bank,
Ltd.

Sumitomo Mitsui Banking
Corporation

500,000–

MUFG Bank, Ltd.

500,000–

The Iyo Bank, Ltd.

500,000–

Mizuho Bank, Ltd.

500,000–

The Chugoku Bank, Limited

500,000–

The Chiba Bank, Ltd.

500,000–

Sumitomo Mitsui Banking
Corporation

2,500,000

2,500,000

The Iyo Bank, Ltd.

500,000–

Mizuho Bank, Ltd.

2,700,000

2,700,000

2,500,000

2,500,000

1,000,000

1,000,000

1,000,000

1,000,000

700,000

700,000

2,000,000

2,000,000

2,000,000

2,000,000

Mizuho Trust & Banking Co.,Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
Limited
MUFG Bank, Ltd.

November29, 2019

Mizuho Bank, Ltd.
Development Bank of JapanInc.
Development Bank of JapanInc.

January
31, 2020

0.75%(Note 2)2,000,000

0.66%
2,000,000 (Note 2)

2,000,000

2,000,000

April 27,2029

November30, 2029

2,000,000

2,000,000

1,500,000

0.59% January 31,
1,500,000(Note 3)2029

Bulletrepayment

Bulletrepayment

Bulletrepayment(Note 4)(Note 4)(Note 5)(Note 5)

Unsecuredand nonguaranteed

Unsecuredand nonguaranteed

Unsecuredand nonguaranteed

Long-term loans

April 10,2019

Bulletrepayment

Unsecuredand nonguaranteed

The Chiba Bank, Ltd.

Resona Bank, Limited

Long-term loans

1,000,000

Method ofrepayment

Classification

500,000

Sumitomo Mitsui Trust Bank,
LimitedApril 10,2019

Averageinterest Repayment
rate
date
(Note 1)

0.39% October 31,– (Note 3)
2024

The Bank of Fukuoka, Ltd.

April 3,2020

0.35% October 31,(Note 3)2024

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

Unsecuredand nonguaranteed

Mitsui Sumitomo Insurance
Company, Limited

April 3,2020

500,000

500,000

0.41%(Note 3)September
30, 2026

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

Development Bank of JapanInc.

April 3,2020

1,000,000

1,000,000

0.51%(Note 3)September
29, 2028

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

500,000

500,000

1,000,000

1,000,000

500,000

500,000

500,000

500,000

500,000

0.51%
500,000 (Note 2)

April 27,
2029

Bulletrepayment(Note 4)

SBI Shinsei Bank, Limited

500,000

500,000

Unsecuredand nonguaranteed

Shinkin Central Bank

500,000

500,000

The Bank of Fukuoka, Ltd.

500,000

500,000

500,000

500,000

0.62%(Note 2)

April 30,
2030

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

Sumitomo Mitsui Trust Bank,
LimitedResona Bank, Limited
Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.
Mizuho Bank, Ltd.

April 3,2020

2,000,000

2,000,000

Sumitomo Mitsui Trust Bank,
Limited1,000,000

1,000,000

Sumitomo Mitsui Trust Bank,
Limited2,000,000

2,000,000

1,000,000

1,000,000

2,000,000

2,000,000

1,000,000

1,000,000

Sumitomo Mitsui Banking
Corporation

2,000,000

2,000,000

1,000,000

1,000,000

The Bank of Kyoto, Ltd.

500,000

500,000

500,000

500,000

The Norinchukin Bank

Unsecuredand nonguaranteed(Note 4)

MUFG Bank, Ltd.

Mizuho Bank, Ltd.

(Note 5)

Bulletrepayment

2,400,000(Note 5)

Bulletrepayment

April 30,2026

March 31,2026

2,400,000

Bulletrepayment

0.40%(Note 3)0.40%
(Note 3)

Aozora Bank, Ltd.

July 30,
2027

Note

500,000

1,000,000

0.46%(Note 3)Use

500,000

1,000,000

January
31, 2020

Method ofrepayment

April 3,2020

Sumitomo Mitsui Banking
Corporation

Unsecuredand nonguaranteed

Averageinterest Repayment
rate
date
(Note 1)

The Dai-ichi Life Insurance
Company, Limited

The Nishi-Nippon City Bank,Ltd.

MUFG Bank, Ltd.

Mizuho Bank, Ltd.

April 3,2020

1,000,000

1,000,000

Mizuho Trust & Banking Co.,Ltd.

500,000

500,000

The Yamaguchi Bank, Ltd.

500,000

500,000

Sumitomo Mitsui Banking
Corporation

2,200,000

2,200,000

The Yamanashi Chuo Bank,
Ltd.

Sumitomo Mitsui Trust Bank,
Limited

3,400,000

3,400,000

The Dai-ichi Life Insurance
Company, Limited

September
30, 2020

1,000,000

1,000,000

0.44%(Note 3)

March 31,2026

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

SBI Shinsei Bank, Limited

September
30, 2020

1,000,000

1,000,000

0.46%(Note 3)September
30, 2027

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

The Norinchukin Bank

January29, 2021

3,500,000

3,500,000

0.37% January 31,(Note 3)2028

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

Mizuho Trust & Banking Co.,
Ltd.

42

I. Asset Management Report

January
31, 2020

1,300,000

1,300,000

MUFG Bank, Ltd.

1,200,000

1,200,000

Mizuho Bank, Ltd.

900,000

900,000

Mizuho Trust & Banking Co.,Ltd.

0.61% January 31,(Note 2)2030

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed43

I. Asset Management Report
I. Asset Management Report
Classification
LenderBorrowingdate

Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
LimitedApril 1,
2021

MUFG Bank, Ltd.

Balance attheend ofperiod(Yen inthousands)

500,000

500,000

500,000

500,000

1,000,000

1,000,000

1,000,000

1,000,000

Sumitomo Mitsui Banking
Corporation

1,200,000

1,200,000

600,000

600,000

Mizuho Bank, Ltd.

April 30,2021

MUFG Bank, Ltd.

600,000
600,000

Averageinterest Repayment
rate
date
(Note 1)0.70%
(Note 3)0.28%
600,000 (Note 3)
600,000

April 1,
2031

September
30, 2026

Method ofrepayment

Bulletrepayment

Bulletrepayment

Classification
Use

Note
Lender(Note 5)(Note 5)

Unsecuredand nonguaranteed

Sumitomo Mitsui Trust Bank,
Limited
MUFG Bank, Ltd.

1,000,000

1,000,000

Mizuho Bank, Ltd.

1,000,000

1,000,000

Development Bank of JapanInc.

1,000,000

1,000,000

1,000,000

0.56%
1,000,000 (Note 3)

SBI Shinsei Bank, Limited

1,000,000

1,000,000

The Yamanashi Chuo Bank,
Ltd.

1,000,000

1,000,000

Kansai Mirai Bank, Limited

1,000,000

1,000,000

Shinkin Central Bank

500,000

500,000

The Bank of Kyoto, Ltd.

500,000

500,000

The Yamaguchi Bank, Ltd.

500,000

500,000

The Dai-ichi Life Insurance
Company, Limited

September
3, 20211,000,000

Sumitomo Mitsui Trust Bank,
Limited

500,000

Sumitomo Mitsui Banking
Corporation

500,000

October 1,
2021

0.80%
1,000,000(Note 3)

Bulletrepayment(Note 4)

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

0.90%
1,000,000 (Note 3)

March 31,2032

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

0.80% October 31,(Note 3)2030

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

0.75%(Note 3)

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

1,550,000

1,100,000

1,100,000

January
31, 2022

700,000

700,000

MUFG Bank, Ltd.

500,000

500,000

Mizuho Trust & Banking Co.,Ltd.

400,000

400,000

The Chiba Bank, Ltd.

100,000

100,000

1,000,000

1,000,000

1,000,000

1,000,000

Mizuho Bank, Ltd.

April 1,2022

1,000,000

Sumitomo Mitsui Trust Bank,
Limited

500,000

500,000

Sumitomo Mitsui Trust Bank,
Limited

1,950,000

1,950,000

Sumitomo Mitsui Banking
Corporation

1,300,000

1,300,000

The Norinchukin Bank

1,600,000

1,600,000

Mizuho Bank, Ltd.

1,150,000

1,150,000

Aozora Bank, Ltd.

1,100,000

1,100,000

1,050,000

1,050,000

500,000

500,000

MUFG Bank, Ltd.
Mizuho Trust & Banking Co.,Ltd.

April 28,2022

Nippon Life Insurance Company

500,000

500,000

500,000

Development Bank of JapanInc.

400,000

400,000

The Shizuoka Bank, Ltd.

250,000

250,000

The Chiba Bank, Ltd.

Mizuho Bank, Ltd.

500,000

The Chiba Bank, Ltd.

500,000

500,000

500,000

August 31,
2033

Unsecuredand nonguaranteed

July 31,2028

1,550,000

Sumitomo Mitsui Trust Bank,
LimitedUnsecuredand nonguaranteed

0.42%(Note 3)1,600,000

500,000

0.28%
500,000 (Note 3)
500,000

MUFG Bank, Ltd.

(Note 4)

Unsecuredand nonguaranteed

1,600,000

MUFG Bank, Ltd.
Bulletrepayment(Note 5)900,000

Sumitomo Mitsui Banking
Corporation

August 29,
2031

Bulletrepayment

900,000

The Norinchukin Bank

Long-term loans

September
3, 2021

May 31,2029

1,000,000

Mizuho Bank, Ltd.

MUFG Bank, Ltd.

0.45%
(Note 3)1,000,000

1,000,000

1,000,000

1,000,000

Note

Resona Bank, Limited

1,000,000

1,000,000

1,000,000

Use

1,000,000

Nippon Life Insurance Company

Sumitomo Mitsui Trust Bank,
Limited1,000,000

Method ofrepayment

3,000,000

Aozora Bank, Ltd.

1,000,000

1,000,000

Averageinterest Repayment
rate
date
(Note 1)1,000,000

Sumitomo Mitsui Banking
Corporation

Unsecuredand nonguaranteed

Balance attheend ofperiod(Yen inthousands)

3,000,000

1,500,000

1,000,000

November30, 2021

Balance atthebeginningof period(Yen inthousands)

Mizuho Bank, Ltd.

1,500,000

Sumitomo Mitsui Banking
Corporation

Borrowingdate

Sumitomo Mitsui Banking
Corporation

The Norinchukin Bank

Mizuho Trust & Banking Co.,Ltd.

Long-term loans

Balance atthebeginningof period(Yen inthousands)

Mizuho Bank, Ltd.

Sumitomo Mitsui Trust Bank,
LimitedMarch 31,2026

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

200,000

200,000

Sumitomo Mitsui Trust Bank,
Limited1,000,000

1,000,000

1,000,000

1,000,000

The 77 Bank, Ltd.

500,000

500,000

MUFG Bank, Ltd.

1,000,000

1,000,000

Sumitomo Mitsui Banking
Corporation

Mizuho Bank, Ltd.

1,000,000

1,000,000

Mizuho Bank, Ltd.

500,000

500,000

The Norinchukin Bank

1,500,000

1,500,000

The Shizuoka Bank, Ltd.

500,000

500,000

The Chiba Bank, Ltd.

500,000

500,000

500,000

500,000

500,000

500,000

The 77 Bank, Ltd.

500,000

500,000

The Chugoku Bank, Limited

500,000

500,000

The Iyo Bank, Ltd.

500,000

500,000

The Yamaguchi Bank, Ltd.

250,000

250,000

The Keiyo Bank, Ltd.

250,000

250,000

Sumitomo Mitsui Trust Bank,
LimitedSumitomo Mitsui Banking
Corporation
Development Bank of Japan
Inc.

44

I. Asset Management Report

October 1,
2021

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

Aozora Bank, Ltd.

1,000,000

1,000,000

Resona Bank, Limited

1,000,000

1,000,000

The Nishi-Nippon City Bank,
Ltd.

1,000,000

1,000,000

The Keiyo Bank, Ltd.

1,000,000

1,000,000

The Bank of Fukuoka, Ltd.
0.37%
(Note 3)September
29, 2028

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

The Nishi-Nippon City Bank,
Ltd.

April 28,
2022

April 30,2030

45

I. Asset Management Report
I. Asset Management Report

Lender

Nippon Life Insurance Company

Borrowingdate

Balance atthebeginningof period(Yen inthousands)

Balance attheend ofperiod(Yen inthousands)

Averageinterest Repayment
rate
date
(Note 1)

Method ofrepayment

Use

September
9, 20221,000,000

1,000,000

0.51% January 29,(Note 3)2027

Bulletrepayment(Note 5)1,000,000

1,000,000

Sumitomo Mitsui Trust Bank,
LimitedSumitomo Mitsui Banking
Corporation

September
28, 2022

1,000,000

1,000,000

MUFG Bank, Ltd.

1,000,000

1,000,000

Mizuho Bank, Ltd.

1,000,000

1,000,000

Sumitomo Mitsui Banking
Corporation

1,000,000

1,000,000

1,000,000

0.87%
1,000,000 (Note 3)

The Norinchukin Bank

1,000,000

1,000,000

Sumitomo Mitsui Banking
Corporation

1,300,000

1,300,000

2,700,000

2,700,000

1,400,000

1,400,000

1,300,000

1,300,000

1,300,000

1,300,000

500,000

500,000

2,000,000

2,000,000

Mizuho Bank, Ltd.

October 3,
2022

MUFG Bank, Ltd.
Resona Bank, Limited
Sumitomo Mitsui Trust Bank,
LimitedDecember28, 2022

Mizuho Bank, Ltd.

Long-term loans

SBI Shinsei Bank, Limited
Sumitomo Mitsui Trust Bank,
LimitedMarch 27,2023

Sumitomo Mitsui Banking
Corporation

1,700,000

1,700,000

MUFG Bank, Ltd.

2,700,000

2,700,000

1,700,000

1,700,000

1,700,000

1,700,000

1,500,000

1,500,000

Resona Bank, Limited

800,000

800,000

SBI Shinsei Bank, Limited

300,000

300,000

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

Sumitomo Mitsui Trust Bank,
LimitedMizuho Bank, Ltd.

March 31,
2023

Aozora Bank, Ltd.

Mitsui Sumitomo Insurance
Company, Limited

March 31,2023

Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.
MUFG Bank, Ltd.

May 31,
2023

Sumitomo Mitsui Trust Bank,
Limited
Nippon Life Insurance Company

September
29, 2023

Mizuho Bank, Ltd.
Sumitomo Mitsui Trust Bank,
Limited
MUFG Bank, Ltd.
Mizuho Trust & Banking Co.,
Ltd.

46

0.96%
(Note 3)September
29, 2023

1.26%(Note 3)0.80%
(Note 3)September
30, 2031

September
30, 2030

December26, 2031

March 29,2030

Bulletrepayment

Bulletrepayment

Bulletrepayment

Bulletrepayment

Balance atthebeginningof period(Yen inthousands)

Balance attheend ofperiod(Yen inthousands)

Sumitomo Mitsui Trust Bank,
Limited

–900,000

MUFG Bank, Ltd.

–

1,900,000–

900,000

Classification
Note
Lender(Note 5)(Note 5)(Note 5)(Note 5)

Unsecuredand nonguaranteed

Sumitomo Mitsui Banking
Corporation

Unsecuredand nonguaranteed

Unsecuredand nonguaranteed

Unsecuredand nonguaranteed

Unsecuredand nonguaranteed

0.99%(Note 3)September
30, 2031

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

0.62%(Note 3)September
29, 2028

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

1,000,000

1.03%
1,000,000 (Note 3)

May 31,
2032

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

1,000,000

1,000,000–

1,000,000

0.75%(Note 3)September
30, 2027

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed–

4,000,000–

4,000,000–

1.08%
1,000,000 (Note 3)

September
30, 2030

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed–

1,000,000

Borrowing
date

September
29, 2023

Averageinterest Repayment
rate
date
(Note 1)

Resona Bank, Limited

–

1.32%
900,000 (Note 3)
800,000

The Norinchukin Bank–

500,000

The Chiba Bank, Ltd.

–

500,000

SBI Shinsei Bank, Limited–

300,000

Mizuho Bank, Ltd.

Long-term loans

Classification

I. Asset Management Report–

Method ofrepayment

Use

Note

September
30, 2032

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

The Dai-ichi Life Insurance
Company, Limited

September
29, 2023–

1,000,000

1.40%(Note 3)September
30, 2033

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

SBI Shinsei Bank, Limited

October 2,
2023–

1,000,000

1.30%(Note 3)

March 31,2032

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

Kansai Mirai Bank, Limited

October 2,
2023–

1,000,000

1.30%(Note 3)

March 31,2032

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

Development Bank of JapanInc.

January
31, 2024–

2,000,000

1.43% January 31,(Note 3)2034

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

Subtotal–

318,850,000 326,450,000

–

–

–

–

Total

–

363,550,000 365,550,000

–

–

–

–

(Notes) 1.
2.
3.
4.
5.
6.
7.

Average interest rate is the loan interest rate (weighted average during the applicable term) of the corresponding lenders, and is rounded to the second decimal place.
DHR currently uses interest rate swaps to hedge interest rate fluctuation risk; accordingly, the indicated interest rates are the figures reflecting the effect of the interest rate swaps.
This loan carries a fixed interest rate.
To be used to purchase trust beneficiary interests in real estate and related expenses.
To be used for repayment of existing loans (refinancing fund).
To be used for redemption of rehabilitation obligations (investment corporation bonds) and repayment of rehabilitation obligations (loans).
To be used for redemption of investment corporation bonds.

47

I. Asset Management Report
I. Asset Management Report

I. Asset Management Report(3) Investment Corporation Bonds
Interestrate

Daiwa House REIT
Investment Corporation
1st Unsecured Investment
Corporation Bonds (Note 1)

December24, 2014

0.826%

Daiwa House Residential
Investment Corporation
3rd Unsecured Investment
Corporation Bonds (Note 1)

January
22, 2015

Daiwa House REIT
Investment Corporation
6th Unsecured Investment
Corporation Bonds (Note 1)

December20, 2016

4,000,000

4,000,000

0.57%

December18, 2026

Bullet(Note 2) Unsecured
repayment

Daiwa House REIT
Investment Corporation
7th Unsecured Investment
Corporation Bonds (Note 1)

July 30,2018

2,000,000

2,000,000

0.69%

July 30,
2030

Bullet(Note 2) Unsecured
repayment

Daiwa House REIT
Investment Corporation
8th Unsecured Investment
Corporation Bonds (Note 1)

July 30,2018

1,000,000

1,000,000

1.03%

July 30,
2038

Bullet(Note 2) Unsecured
repayment

Daiwa House REIT
Investment Corporation
9th Unsecured Investment
Corporation Bonds (Note 1)(Green Bonds)

November25, 2019

0.53%

November22, 2029

Bullet(Note 4) Unsecured
repayment

Daiwa House REIT
Investment Corporation
10th Unsecured Investment
Corporation Bonds (Note 1)(Green Bonds)

May 27,
2020

0.34%

May 27,2025

Bullet(Note 4) Unsecured
repayment

Daiwa House REIT
Investment Corporation
11th Unsecured Investment
Corporation Bonds (Note 1)(Green Bonds)

May 27,
2020

0.64%

May 27,2030

Bullet(Note 4) Unsecured
repayment

Daiwa House REIT
Investment Corporation
12th Unsecured Investment
Corporation Bonds (Note 1)(Green Bonds)

May 27,2020

May 25,2040

Bullet(Note 4) Unsecured
repayment

Daiwa House REIT
Investment Corporation
13th Unsecured Investment
Corporation Bonds (Note 1)

December24, 2020

December24, 2032

Bullet(Note 5) Unsecured
repayment

Issue name48

2,000,000

3,000,000

6,000,000

2,400,000

2,000,000

3,000,000

6,000,000

2,400,000

0.67%

Maturity

Method ofredemption

Use

Note

December24, 2024

Bullet(Note 2) Unsecured
repayment

January
22, 2025

Bullet(Note 3) Unsecured
repaymentInterest
rate

Maturity

Method ofredemption

4,000,000

0.55%(Note 8)May 25,2029

Bullet(Note 2) Unsecured
repayment

2,000,000

2,000,000

0.77%

June 18,
2032

Bullet(Note 2) Unsecured
repayment

44,000,000

44,000,000––

Issue date

Daiwa House REIT
Investment Corporation
18th Unsecured Investment
Corporation Bonds (Note 1)(Sustainability-Linked
Bonds) (Note 7)

May 25,2022

4,000,000

Daiwa House REIT
Investment Corporation
19th Unsecured Investment
Corporation Bonds (Note 1)

December19, 2022

Total–

The status of investment corporation bonds issued as of February 29, 2024 is as follows:
Balance atBalance at thethe beginning
Issue dateend of periodof period(Yen in thousands)(Yen in thousands)

Balance atBalance at thethe beginningend of periodof period(Yen in thousands)(Yen in thousands)

Issue name(Notes) 1.
2.
3.
4.
5.
6.
7.
8.

1,000,000

1,600,000

1,000,000

1.00%

3,000,000

0.60%

Daiwa House REIT
Investment Corporation
14th Unsecured Investment
Corporation Bonds (Note 1)(Green Bonds)

April 15,2021

Not applicable.

(5) Unit Acquisition Rights
Not applicable.

6. Status of Acquisition and Disposition during the Period(1) Status of Acquisition and Disposition of Properties and Asset-Backed Securities,
Infrastructure Assets, and Infrastructure Related Asset

Property nameDate of acquisition

Daiwa House REIT
Investment Corporation
15th Unsecured Investment
Corporation Bonds (Note 1)(Sustainability Bonds)

November17, 2021

3,000,000

3,000,000

0.40%

November17, 2031

Bullet(Note 6) Unsecured
repayment

Daiwa House REIT
Investment Corporation
16th Unsecured Investment
Corporation Bonds (Note 1)(Sustainability Bonds)

November17, 2021

1,000,000

1,000,000

0.66%

November17, 2036

Bullet(Note 6) Unsecured
repayment

Daiwa House REIT
Investment Corporation
17th Unsecured Investment
Corporation Bonds (Note 1)

December16, 2021

4,000,000

4,000,000

0.24%

December16, 2027

Bullet(Note 5) Unsecured
repayment

4,000,000

0.50%

April 15,2031

Bullet(Note 4) Unsecured
repayment

Disposition
Acquisition
price(Yen inmillions)(Note 1)

Date of disposition

Disposition
price(Yen inmillions)(Note 1)

Book value(Yen inmillions)

Gain or loss
on sale(Yen inmillions)(Note 2)

MIMARU Tokyo Hatchobori

September 1, 2023

5,114

–

–

–

–

D Project Kadoma I

October 2, 2023

3,120

–

–

–

–

November 30, 2023

2

1

0

2

1

0

Total
(Notes) 1.
2.

4,000,000–(4) Short-Term Investment Corporation Bonds

FOLEO Hirakata (part of the land)
3,000,000–

Note

The bonds have pari passu conditions among specified investment corporation bonds.
To be used for repayment of existing loans.
To be used for redemption of rehabilitation obligations (investment corporation bonds) and repayment of rehabilitation obligations (loans).
To be used for a part of the funds for the repayment of existing loans associated with “eligible green assets.”
To be used for redemption of investment corporation bonds.
To be used for a part of the funds for the repayment of existing loans associated with “eligible sustainability assets.”
A sustainability-linked bond is a bond whose terms vary depending on whether or not it meets a pre-defined Sustainability Performance Target (SPT).
The interest rate (per annum) from the following day of May 25, 2022 to May 25, 2023 is 0.575%. From the day after May 25, 2023 onward, the interest rate, which is determinedannually depending on the achieved level of the SPT on each reference date, will be applied.

Acquisition
1,600,000

–

Use

–

–
8,234

“Acquisition price” and “disposition price” are the amounts that do not include the various expenses required in the acquisition or disposition of the property, settlement money suchas taxes and public dues, consumption taxes, and leasehold guarantee deposits, etc.
“Gain or loss on sale” represents the disposition price less book value of disposed property and any related expenses.

(2) Transaction of Other Assets
Not applicable. Other assets are mostly bank deposits or bank deposits in trust assets.

49

I. Asset Management Report
I. Asset Management Report

I. Asset Management Report(3) Review on Value of Specified Assets
Properties, etc.
Acquisitionordisposition

Property nameAcquisition

MIMARU Tokyo Hatchobori

Acquisition

D Project Kadoma I

Disposition

FOLEO Hirakata(part of the land)(Notes) 1.
2.

(Notes) 1.

Acquisition priceor disposition Appraisal value
Transaction
Appraisal agency
Type of assets
price(Yen in millions)date(Note 2)
(Yen in millions)(Note 2)
(Note 1)
Trust
September beneficiary
The Tanizawa Sōgō
5,114
5,480
1, 2023 interests in realAppraisal Co., Ltd.
estate
Trust
October 2, beneficiary
Daiwa Real Estate
3,120
3,450
2023
interests in realAppraisal Co., Ltd.
estateTrust
November beneficiary
Japan Real Estate2
130, 2023 interests in real
Instituteestate2.

Date of value
appraised(Note 2)June 30, 2023

“Interested parties, etc.” are interested parties, etc., of the Asset Manager with which DHR has concluded an asset management agreement as provided in Article 201, paragraph 1of the Investment Trust Act, Article 123 of the Order for Enforcement of the Investment Trust Act, Article 244-3 of Regulation for Enforcement of Investment Trust Act and Article 26,
Item 27 of The Investment Trusts Association, Japan’s Rules on Management Reports, etc., of Investment Trusts and Investment Corporations.
“Transaction amount, etc.” is the amount that does not include the various expenses required in the acquisition or disposition of the property, settlement money such as taxes andpublic dues, consumption taxes, and leasehold guarantee deposits, etc.

(5) Status of Transactions with Asset Manager Pertaining to Business Operated by AssetManager as Subsidiary BusinessNot applicable because the Asset Manager does not engage in any business as a subsidiary business that is a type I financial instruments business,
type II financial instruments business, real estate brokerage or real estate specified joint enterprise.

July 31, 2023

August 31,
2023“Acquisition price or disposition price” is the amount that does not include the various expenses required in the acquisition or disposition of the property, settlement money such as
taxes and public dues, consumption taxes, and leasehold guarantee deposits, etc.
Appraisal value shown above is based on “Real estate appraisal standards, Chapter 3, Appraisal of the value of real estate that is subject to securitization.”(4) Transactions with Interested Parties, etc.
Purchase and sale transactions, etc. with interested parties, etc.(Note 1) for the 36th period are as follows:i)

Status of Transactions
Transaction amount, etc. (Note 2)Classification

Purchase

Total

Sale

¥8,234 million¥2 million

Breakdown of transactions withinterested parties
Daiwa House Industry Co., Ltd.

¥3,120 million(37.9%)¥– million

(–%)

Total

¥3,120 million(37.9%)¥– million

(–%)

ii)

Amount of Fees Paid
Classification

Management fees

Repairs andmaintenance expenses

Restoration costs

Other rental expenses

50

Total amount paid (A)(Yen in thousands)

1,555,068

913,272

225,970

182,559

Breakdown of transactions with interested parties, etc. (Note 1)
Payment recipient

Amount paid (B)(Yen in thousands)

Rate to total amount
paid (B/A) (%)

Daiwa Living Co., Ltd.

565,287

36.4

Daiwa House Realty Mgt. Co., Ltd.

331,486

21.3

Daiwa House Property Management Co., Ltd.

318,683

20.5

Daiwa LifeNext Co., Ltd.

36,317

2.3

Daiwa Lease Co., Ltd.

3,405

0.2

Cosmos Initia Co., Ltd.

1,683

0.1

Daiwa Living Co., Ltd.

455,495

49.9

Daiwa House Property Management Co., Ltd.

177,748

19.5

Daiwa House Realty Mgt. Co., Ltd.

93,905

10.3

Daiwa LifeNext Co., Ltd.

25,7292.8

Daiwa Lease Co., Ltd.

1,679

0.2

Cosmos Initia Co., Ltd.

398

0.0

Daiwa Living Co., Ltd.

160,009

70.8

Daiwa Living Co., Ltd.

73,884

40.5

Daiwa House Property Management Co., Ltd.

33,244

18.2

Daiwa House Realty Mgt. Co., Ltd.

18,29910.0

Daiwa House Industry Co., Ltd.

3,450

1.9

Daiwa LifeNext Co., Ltd.

28

0.0

Daiwa Lease Co., Ltd.

15

0.0

51

I. Asset Management Report
I. Asset Management Report

II. Balance Sheets
Daiwa House REIT Investment Corporation

7. Accounting

BALANCE SHEETS(1) Status of Assets, Liabilities, Principal and Income/Loss

As of August 31, 2023 and February 29, 2024

Please refer to “Balance Sheets,” “Statements of Income and Retained Earnings,” “Statements of Changes in Net Assets,” “Notes to Financial
Statements” and “Distribution Information.”
Previous fiscal period information in the Balance Sheets, Statements of Income and Retained Earnings, Statements of Changes in Net Assets,
Notes to Financial Statements and Distribution Information is for reference only and is not subject to audit by the Accounting Auditor under Article
130 of the Investment Trust Act for the current fiscal period.
Also, since the Statements of Cash Flows are not subject to audit by an independent auditor under Article 130 of the Investment Trust Act, they
are not audited by the Accounting Auditor.

(2) Changes in Method to Calculate Depreciation Expenses
Not applicable.

(3) Changes in Method to Evaluate Properties and Infrastructure Assets
Not applicable.

(4) Status of Beneficiary Certificates of Investment Trust Established by DHR
Not applicable.

(5) Disclosure relating to Overseas Real Estate Holding Corporation and Real Estate Held by such
Corporation
Not applicable.

8. Other(1) Notice
There were no conclusions or changes of major contracts approved by DHR’s board of directors during the current fiscal period.

(2) Treatment of Fractions in Amounts and Rates
Unless otherwise specified, amounts less than the units indicated are truncated, while values of ratio are rounded up or down to the nearest valueof the last digit in this report.

As ofAugust 31, 2023

February 29, 2024

(Yen in thousands)
AssetsCurrent assets:
Cash and bank deposits (Note 4)
Operating accounts receivable
Prepaid expenses
Other current assets
Allowance for doubtful accounts
Total current assets¥54,878,088
285,942
723,576
4,416(602)
55,891,421¥51,504,912
239,258
741,2595,583(530)
52,490,483

Investment properties (Notes 9 and 10)

839,686,634

843,348,633

51,537,891
5,687,984
3,547,332
99
2,195,416
190,867
9,515
127
63,169,234¥958,747,290

49,555,664
6,478,494
3,571,130
99
2,124,192
174,1119,532
110
61,913,334¥957,752,451

Other assets:
Goodwill (Note 8)
Leasehold rights in trust (Note 10)
Lease and guarantee deposits in trust
Guarantee deposits
Long-term prepaid expenses
Investment corporation bond issuance costs
Investment securities (Notes 5 and 6)
Trademark rights
Total other assets
Total assets

1

52

53

III. Statements of Income and Retained Earnings

II. Balance Sheets
Daiwa House REIT Investment Corporation

Daiwa House REIT Investment Corporation

BALANCE SHEETSSTATEMENTS OF INCOME AND RETAINED EARNINGS

As of August 31, 2023 and February 29, 2024

For the fiscal periods ended August 31, 2023 and February 29, 2024

For the fiscal periods ended

As ofAugust 31, 2023

February 29, 2024

(Yen in thousands)

Liabilities
Current liabilities:
Operating accounts and other payable
Short-term loans (Notes 5 and 17)
Current portion of investment corporation bonds (Notes 5 and 16)
Current portion of long-term loans (Notes 5, 7 and 17)
Accrued expenses
Accrued consumption taxes
Advances received
Unearned revenue
Deposits received
Derivative liabilities (Notes 5 and 7)
Other
Total current liabilities¥2,121,874――
44,700,000
1,810,542
493,337
3,598,896
85,431
173,101
15,36367,52053,066,067¥1,819,245
4,000,000
5,000,000
35,100,000
1,829,047
138,538
3,633,612
71,789160,6122,133
67,52051,822,500

Non-current liabilities:
Investment corporation bonds (Notes 5 and 16)
Long-term loans (Notes 5, 7 and 17)
Long-term unearned revenue
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Asset retirement obligations (Note 13)
Derivative liabilities (Notes 5 and 7)
Total non-current liabilities
Total liabilities

44,000,000
318,850,000
90,560331,684
23,432,886
690,200
112,293
387,507,625
440,573,692

39,000,000
326,450,000
56,000337,763
23,723,272
777,202
83,385
390,427,623
442,250,124

Net assets (Notes 14 and 15)
Unitholders’ equity:
Unitholders’ capital

268,042,601

268,042,601

247,667,563

247,667,563(8,723,684)(44,080)(8,767,764)
238,899,799
11,358,853
250,258,653
518,301,254(10,584,324)(44,080)(10,628,404)
237,039,159
10,506,085
247,545,245
515,587,846(127,656)(127,656)
518,173,597¥958,747,290(85,519)(85,519)
515,502,327¥957,752,451

Units authorized:
8,000,000 units as of August 31, 2023 and February 29, 2024
Units issued and outstanding:
2,320,000 units as of August 31, 2023 and February 29, 2024

SurplusCapital surplus
Deductions from capital surplus:
Allowance for temporary difference adjustments
Other deductions from capital surplus
Total deductions from capital surplus
Capital surplus, net
Unappropriated retained earnings
Total surplus
Total unitholders’ equity
Valuation and translation adjustments
Deferred gains or losses on hedges (Note 7)
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets
The accompanying notes are an integral part of these financial statements.

2

54

August 31, 2023

February 29, 2024

(Yen in thousands)

Operating revenues:
Rental revenues (Notes 11 and 12)
Gain on sale of investment properties (Notes 12 and 20)
Total operating revenues
Operating expenses:
Rental expenses (Note 11)
Impairment losses (Note 3)
Asset management fees
Asset custody fees
Administrative service fees
Directors’ remuneration
Amortization of goodwill (Note 8)
Other operating expenses
Total operating expenses
Operating income
Non-operating revenues:
Interest income
Reversal of allowance for doubtful accounts
Gain on forfeiture of unclaimed distributions
Gain on adjustment of liabilities
Gain on receipt of donated non-current assets
Subsidy income
Other non-operating revenues
Total non-operating revenues
Non-operating expenses:
Interest expense
Interest expense on investment corporation bonds
Amortization of investment corporation bond issuance costs
Borrowing related expenses
Other non-operating expenses
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes-current (Note 19)
Net income
Retained earnings brought forward
Unappropriated retained earnings
The accompanying notes are an integral part of these financial statements.

¥29,570,814
349,963
29,920,778¥29,643,403
71
29,643,474

12,509,714―
1,916,817
38,34993,7306,720
1,982,226
458,395
17,005,954
12,914,823

12,145,539
889,442
1,932,569
38,36095,0136,720
1,982,226
415,507
17,505,380
12,138,094

232
784
5,842
5,795
7,377
―
50
20,081

213
61
5,377
3,871
―
1,604
62
11,1901,248,815
125,652
16,756316,676
2,075
1,709,975
11,224,929
11,224,929
605¥11,224,324
134,528¥11,358,853

1,307,796
122,585
16,756
320,5262,663
1,770,327
10,378,956
10,378,956
605¥10,378,351
127,733¥10,506,085

3

55

IV. Statements of Changes in Net Assets
Daiwa House REIT Investment Corporation

Daiwa House REIT Investment Corporation

STATEMENTS OF CHANGES IN NET ASSETSSTATEMENTS OF CHANGES IN NET ASSETSFor the fiscal periods ended August 31, 2023 and February 29, 2024

For the fiscal periods ended August 31, 2023 and February 29, 2024

Unitholders’ equity
Surplus

Unitholders’ equity
SurplusCapital surplus

Unappropriated retained
earnings

Deductions from capital surplus
Other
Allowance for
Numberdeductions
temporaryof units issued
from capitaldifference
and outUnitholders’surplusstanding
capitalCapital surplus adjustments(Units)Balance as of February 28, 2023

Total
deductions
from capitalsurplusCapitalsurplus, net(Yen in thousands)

2,320,000 ¥268,042,601¥247,667,563¥(6,879,284)¥(44,080)¥(6,923,364) ¥240,744,199

Distribution in excess of earnings
from allowance for temporary
difference adjustments

―

―

―

(1,844,400)―(1,844,400)(1,844,400)

Distributions from surplus

―

―

―

―

―

―

―

Net income

―

―

―

―

―

―

―

―

―

―

―

―

―

―

―

―

―

(1,844,400)―(1,844,400)(1,844,400)

2,320,000 ¥268,042,601¥247,667,563¥(8,723,684)¥(44,080)

Total changes during the period
Balance as of August 31, 2023¥(8,767,764) ¥238,899,799

Changes during the period:
Distribution in excess of earnings
from allowance for temporary
difference adjustments

―

―

―

(1,860,640)―(1,860,640)(1,860,640)

Distributions from surplus

―

―

―

―

―

―

―

Net income

―

―

―

―

―

―

―

―

―

―

―

―

―

―

―

―

―

(1,860,640)―(1,860,640)(1,860,640)

Net changes of items other thanchanges of unitholders’ equity
Total changes during the period
Balance as of February 29, 2024

2,320,000 ¥268,042,601¥247,667,563 ¥(10,584,324)

4

56

Total
unitholders’equityTotal surplus

Deferred gains orlosses on hedges

Total net
assets(Yen in thousands)
Balance as of February 28, 2023

¥11,395,808¥252,140,008¥520,182,609¥(132,684)¥520,049,925

Changes during the period:

Changes during the period:

Net changes of items other thanchanges of unitholders’ equity

Valuation andtranslation
adjustments

Distribution in excess of earnings
from allowance for temporary
difference adjustments―(1,844,400)(1,844,400)―(1,844,400)

Distributions from surplus(11,261,280)(11,261,280)(11,261,280)―(11,261,280)

Net income

11,224,324

11,224,324

11,224,324―

11,224,324

―

―

―

5,027

5,027

(36,955)(1,881,355)(1,881,355)

5,027(1,876,327)¥11,358,853¥250,258,653¥518,301,254¥(127,656)¥518,173,597

Net changes of items other thanchanges of unitholders’ equity
Total changes during the period
Balance as of August 31, 2023
Changes during the period:
Distribution in excess of earnings
from allowance for temporary
difference adjustments―(1,860,640)(1,860,640)―(1,860,640)

Distributions from surplus(11,231,120)(11,231,120)(11,231,120)―(11,231,120)

Net income

10,378,351

10,378,351

10,378,351―

10,378,351

―

―

―

42,13742,137

Total changes during the period(852,768)(2,713,408)(2,713,408)

42,137(2,671,270)

Balance as of February 29, 2024

¥10,506,085¥247,545,245¥515,587,846¥(85,519)¥515,502,327

Net changes of items other thanchanges of unitholders’ equity

The accompanying notes are an integral part of these financial statements.

¥(44,080) ¥(10,628,404) ¥237,039,159

557

V. Statements of Cash Flows

VI. Notes to Financial Statements

Daiwa House REIT Investment Corporation

Daiwa House REIT Investment Corporation

STATEMENTS OF CASH FLOWS

Notes to Financial Statements

For the fiscal periods ended August 31, 2023 and February 29, 2024

As of and for the fiscal periods ended August 31, 2023 and February 29, 2024

For the fiscal periods ended
August 31, 2023
Cash flows from operating activities:
Income before income taxes
Depreciation and amortization
Amortization of goodwill
Amortization of investment corporation bond issuance costs
Amortization of trademark rights
Impairment losses
Loss on retirement of non-current assets
Gain on receipt of donated non-current assets
Interest income
Interest expense
Decrease (increase) in operating accounts receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts and other payable
Increase (decrease) in accrued consumption taxes
Increase in accrued expenses
Decrease in deposits received
Increase (decrease) in advances received
Decrease in long-term prepaid expenses
Decrease in allowance for doubtful accounts
Decrease in investment properties due to sale
Decrease (increase) in lease and guarantee deposits in trust
Other
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities:
Acquisition of investment properties
Proceeds from tenant leasehold and security deposits
Repayment of tenant leasehold and security deposits
Proceeds from tenant leasehold and security deposits in trust
Repayment of tenant leasehold and security deposits in trust
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from short-term loans
Proceeds from long-term loans
Repayment of long-term loans
Distribution payment
Net cash used in financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period (Note 4)
The accompanying notes are an integral part of these financial statements.

6

58

February 29, 2024

(Yen in thousands)¥11,224,929
5,602,550
1,982,226
16,756
16―
17,521(7,377)(232)
1,374,468(4,680)6,163
243,3289,269
3,290(11,662)(45,256)
107,199(852)
614,941
21
10,34621,142,968
232(1,438,207)(605)
19,704,388¥10,378,956
5,650,264
1,982,226
16,756
16
889,442
24,977―(213)
1,430,381
46,684(17,683)(357,906)(354,798)
22,203(12,488)
34,71571,223(71)
1,049(23,797)
114,641
19,896,581
213(1,482,281)(602)
18,413,911(5,124,463)
30,638(21,108)
442,979(519,120)(5,191,075)(10,888,767)
19,675(10,774)
786,738(607,813)(10,700,940)―
17,400,000(17,400,000)(13,099,699)(13,099,699)
1,413,612
53,464,475¥54,878,088

4,000,000
22,700,000(24,700,000)(13,086,146)(11,086,146)(3,373,175)
54,878,088¥51,504,912

Note 1 – Organization and Basis of Presentation
Organization
Daiwa House REIT Investment Corporation (“DHR”) is a real estate investment trust whose sponsor is Daiwa
House Industry Co., Ltd. (“Daiwa House”) and whose asset manager is Daiwa House Asset Management Co., Ltd.
(the “Asset Manager”), a wholly owned subsidiary of Daiwa House.
DHR was listed on the Real Estate Investment Trust (“REIT”) Market of Tokyo Stock Exchange, Inc. (“TSE”) on
March 22, 2006, and then later merged with New City Residence Investment Corporation on April 1, 2010.
Subsequently on December 1, 2011, DHR changed its corporate name to Daiwa House Residential Investment
Corporation, and accordingly changed its investment targets to residential properties.
The former Daiwa House REIT Investment Corporation (the Daiwa House REIT Investment Corporation, which
was dissolved upon the merger with DHR as of September 1, 2016, and hereinafter referred to as the “former DHR”)
was established on September 14, 2007, whose asset manager was Daiwa House REIT Management Co., Ltd., awholly owned subsidiary of Daiwa House. The former DHR was listed on the TSE REIT Market on November 28,
2012, as a REIT that targeted investment in logistics and retail properties.
On September 1, 2016, DHR merged with the former DHR in an absorption-type merger with DHR as the surviving
corporation, and changed its corporate name from Daiwa House Residential Investment Corporation to Daiwa HouseREIT Investment Corporation.
After the merger, DHR shifted to a diversified portfolio strategy, targeting investment in new asset classes such as
hotel and office properties, in addition to those that DHR and the former DHR had targeted for investment in the past.
As of February 29, 2024, DHR’s portfolio included 232 properties at a total acquisition price of ¥905.7 billion.

Basis of Presentation
The accompanying financial statements have been prepared in accordance with the provisions set forth in the Act
on Investment Trust and Investment Corporations (the “Investment Trust Act,” Act No. 198 of 1951, as amended),the Financial Instruments and Exchange Act of Japan and its related accounting regulations, and in conformity withaccounting principles generally accepted in Japan (“Japanese GAAP”), which are different in certain respects as toapplication and disclosure requirements from International Financial Reporting Standards or accounting principles
generally accepted in the United States of America.
The accompanying financial statements have been reformatted and translated into English from the financial
statements of DHR prepared in accordance with Japanese GAAP. In preparing the accompanying financial statements,
relevant notes have been expanded and certain reclassifications have been made from the Japanese GAAP financial
statements. Certain supplementary information included in the statutory Japanese GAAP financial statements, but notrequired for fair presentation, is not presented in the accompanying financial statements.
DHR maintains its accounting records in Japanese yen, the currency of the country in which DHR operates. As
permitted by the regulations under the Financial Instruments and Exchange Act, amounts of less than one thousand
yen have been omitted. Unless otherwise specified, amounts of less than the units indicated are truncated, while valuesof ratios are rounded up or down to the nearest value of the last digit in the accompanying financial statements. As aresult, totals shown in the accompanying financial statements do not necessarily agree with the sums of the individual
amounts.
759

VI. Notes to Financial Statements
DHR’s fiscal period is a six-month period ending at end of February and August of each year.

Note 2 – Summary of Significant Accounting Policies(a) Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand and in trust, bank deposits and deposits in trust redeemable on
demand, and short-term investments, which are readily convertible to cash, with maturities of three months or lessfrom the date of acquisition, and insignificant risk of market value fluctuation.

(b) Investment Properties
Investment properties are stated at cost, net of accumulated depreciation. The cost of investment properties includes
the allocated purchase price, related costs and expenses for acquisition. Depreciation is calculated on a straight-line
basis over the estimated useful lives as stated below.

Buildings
Structures
Machinery and equipment
Tools, furniture and fixturesYears
2 – 693 – 63
7 – 282 – 28

Costs related to the renovation, construction and improvement of properties are capitalized. Expenditures for repairs
and maintenance, which do not add to the value or prolong the useful life of a property, are expensed as incurred.

(c) Intangible Assets
Intangible assets are amortized on a straight-line basis. The useful lives of major intangible assets are listed below.

Goodwill

Years
20

As for revenue from contracts with customers as defined in ASBJ Statement No. 29 “Accounting Standard for
Revenue Recognition,” DHR recognizes such revenue when DHR satisfies a performance obligation by transferringa control of a promised good or service to a customer, at the amount of consideration to which DHR expects to beentitled in exchange for transferring promised goods or services.
Details of major performance obligations related to revenue from contracts with customers and a typical point intime at which DHR satisfies a performance obligation and recognizes revenue are as follows:(1) Sale of investment properties
As to sale of investment properties, DHR recognizes revenue when a buyer, who is a customer, obtains a control
of a property by DHR’s satisfying the performance obligation to transfer the property as prescribed in the purchaseand sale contract of the property.
(2) Utilities expenses reimbursements (incidental revenue)
As to utilities expenses reimbursements, DHR recognizes revenue based on the supply amount of electricity,water, etc. to a tenant, who is a customer, in accordance with the property lease contract and related agreements.
When it is determined that DHR is regarded as an agent, the net amount received as utilities charges forelectricity, water, etc. supplied by another party, less the amount paid to the party, is recognized as revenue.

(g) Taxes on Property and Equipment
Property and equipment are subject to various taxes, such as property taxes and city planning taxes. An owner of aproperty is registered in a record maintained by the local government of the applicable jurisdiction, and taxes are
imposed on the owner registered in the record as of January 1, based on an assessment made by the local government.
The taxes are determined in April to June of each year and are paid in four installments during the year.
When a property is purchased prior to January 1 of any given calendar year, taxes for the previous year are imposedon the seller. DHR pays the seller the corresponding amount of the taxes for the period from the property’s acquisition
date to December 31 of the previous year as included in the purchase price of the property, and capitalizes this amountas an acquisition cost of the property.

(h) Income Taxes
Deferred tax assets and liabilities are computed based on the differences between the financial reporting and income
tax basis of assets and liabilities using the enacted tax rates.

(i) Allowance for Doubtful Accounts

Leasehold rights (general fixed-term land lease rights) are amortized on a straight-line basis over the life of eachcontract.

(d) Investment Corporation Bond Issuance Costs
Investment corporation bond issuance costs are amortized on a straight-line basis over the redemption periods.

(e) Investment Securities
Held-to-maturity bonds are stated at amortized cost using the straight-line method.

(f) Revenue Recognition

To cover possible losses on collection, allowance for doubtful accounts is provided based on past experience fornormal receivables and on an estimate of the collectability of receivables from companies in financial difficulty.

(j) Non-Deductible Consumption Taxes
Non-deductible consumption taxes for acquisition of assets are added on to the acquisition cost of each asset.

(k) Trust Beneficiary Interests
For trust beneficiary interests in real estate, each of the trust assets and liabilities as well as all income generated
and expenses incurred in trusts are recorded in the relevant balance sheet and income statement accounts.

DHR recognizes rental revenues in accordance with Accounting Standards Board of Japan (“ASBJ”) Statement No.
13 “Accounting Standard for Lease Transactions.”
8

60

9

61

VI. Notes to Financial Statements(l) Derivatives and Hedge Accounting
Deferral hedge accounting is applied for derivatives. DHR uses interest-rate swaps as hedging instruments in orderto hedge the risk of interest rate fluctuations related to borrowings. Pursuant to Japanese GAAP, DHR applies the
special accounting treatment to interest-rate swaps which qualify for hedge accounting and meet specific criteria.
Under the special accounting treatment, the related differentials paid or received under such swap contracts can berecognized and included in interest expenses or income of the hedged assets or liabilities, and the interest-rate swaps
are not required to be measured at fair value separately.
The assessment of hedge effectiveness is omitted when the significant terms of the hedged item and hedging
instrument, including the notional principal amount, are the same and changes in cash flows of the hedged item canbe expected to be offset in full from the commencement of a hedge relationship and continuously thereafter. The
assessment of hedge effectiveness is also omitted for all interest-rate swaps which meet the specific criteria under the
special accounting treatment.

Note 3 – Significant Accounting Estimates
For impairment losses on investment properties, DHR discloses significant accounting estimates in the notes
effective from the period ended February 29, 2024 from the perspective of materiality. The amounts as of and for theperiod ended August 31, 2023 are shown as comparative information.

and the real estate trading market. Therefore, any change in the assumptions for the estimates may affect the DHR’s
financial position and operating results in the following fiscal period.
Based on the accounting estimates, DHR recognized impairment losses on the following asset group for theperiod ended February 29, 2024.

Property name

D Project Kaminokawa

Location

Kawachi District,Tochigi

Item
Buildings, etc. in trust
Land in trust
Total

For the fiscal period ended
February 29, 2024
(Yen in thousands)
Impairment losses¥539,598
349,844¥889,442

Since DHR plans to sell the property described above, its book value was reduced to the recoverable amountand the amount of reduction was then recognized as impairment losses under operating expenses. The recoverable
amount was measured using the net realizable value of the property (expected sale price minus the estimateddisposal costs). Impairment losses arising from sale are deemed to have the nature of operating expenses andclassified as operating expenses in accordance with Article 48, paragraph 2 of the “Regulations on Accounting ofInvestment Corporations.”(a) Impairment Losses on Investment Properties
DHR recognizes impairment losses on investment properties based on accounting estimates.
(1) Amount of an item subject to accounting estimates, and amount recognized based on accounting estimates

Investment properties
Impairment losses

As of/ For the periods ended
August 31, 2023
February 29, 2024
(Yen in thousands)¥839,686,634¥843,348,633―
889,442(2) Information on details of accounting estimates for an item identified
In accordance with accounting standards for the impairment of investment properties, DHR applies theaccounting treatment to reduce the book value of investment properties to their recoverable amount when it is nolonger expected to recover its investment value due to a decline in profitability.
For the application of this accounting treatment, DHR considers each investment property as a single asset groupand determines whether or not to recognize an impairment loss when it is certain that there are indications of
impairment, such as continuous operating losses, significant declines in market prices, significant deterioration of
the business environment and others.
The estimated cash flows are used to determine whether or not an impairment loss should be recognized. If an
impairment loss is determined to be necessary, the book value of the asset is reduced to its recoverable amount andthe amount of the reduction is recognized as an impairment loss.
The assumptions to estimate future cash flows, including rents, occupancy rates and rental expenses, aredetermined by comprehensively taking into account market trends, examples of transactions with similar properties
and other factors.
The performance and market price of each property may be affected by trends in the real estate leasing market
1062Note 4 – Cash and Cash Equivalents
Cash and cash equivalents shown in the statement of cash flows consist of the following balance sheet items.

Cash and bank deposits
Cash and cash equivalents

As ofAugust 31, 2023
February 29, 2024
(Yen in thousands)¥54,878,088¥51,504,912¥54,878,088¥51,504,912

Note 5 – Financial Instruments(a) Qualitative Information on Financial Instruments
Policy on financial instruments
As a policy, when acquiring real estate and other properties, as well as when repaying its obligations, DHR raises
necessary funds through loans from financial institutions, issuance of investment corporation bonds and issuance ofinvestment units, etc. DHR carefully pays attention to ensure their financing to be long-term, cost effective and stable,
while considering applying various financial methods and dispersing repayment dates.
DHR may use derivative financial instruments for such purposes as hedging interest rate fluctuation risk, but does
not use them for speculative purposes. DHR currently uses interest-rate swaps to hedge interest rate fluctuation risk.
Surplus funds can be invested in securities or monetary claims; however, as a current policy of DHR, they aredeposited in interest-bearing accounts.
1163

VI. Notes to Financial Statements
Notes:
1. Methods to estimate fair value of financial instruments and matters regarding derivatives

Nature and extent of risks arising from financial instruments and risk management
The Asset Manager stipulates basic provisions of risk management in its risk management rules.
Investment corporation bonds and loans are used to finance acquisitions of real estate and repayments of loans.
Although these financial instruments are exposed to liquidity risk, DHR controls such risk by maintaining the ratio ofinterest-bearing debt to total assets under a certain percentage, dispersing repayment dates, and retaining a certain
amount of highly liquid cash and deposits.
Floating rate loans are exposed to the risk of interest rate fluctuations. In order to reduce the impact caused by risinginterest rates, DHR closely monitors the movement of interest rates and intends to increase fixed rate loans.
Deposits are exposed to credit risks, including collapse of the financial institutions where deposits are made. DHR
manages such risks through the use of liquid deposits.
Supplemental explanation concerning fair value of financial instruments
Since certain assumptions and factors are reflected in estimating the fair value, different assumptions and factors
could result in a different value.

(b) Estimated Fair Value of Financial Instruments
Book value on the balance sheet, fair value and the difference as of August 31, 2023 and February 29, 2024 are asshown below. The disclosure for “Cash and bank deposits” and “Short-term loans” is omitted since their fair value
approximates their book value due to short maturity. The disclosure for “Tenant leasehold and security deposits” and“Tenant leasehold and security deposits in trust” is also omitted due to immateriality.

February 29, 2024
(Yen in thousands)
DifferenceBook value

Book value
Fair value
Assets(1) Investment securities:
Held-to-maturity bonds¥9,515¥8,625¥(890)
Total¥9,515¥8,625¥(890)
Liabilities(2) Current portion of
investment corporation
bonds
―
―
―
(3) Current portion of longterm loans
44,700,000
44,739,987
39,987(4) Investment corporationbonds
44,000,000
42,891,631 (1,108,368)(5) Long-term loans
318,850,000 320,048,555 1,198,555
Total¥407,550,000 ¥407,680,173 ¥130,173(6) Derivatives (*)¥(127,656)¥(127,656)¥―¥9,532¥9,532

Fair value¥8,661¥8,661

Difference¥(871)¥(871)

64(3) Current portion of long-term loans and (5) Long-term loans
For long-term loans with floating interest rates, their fair value is approximately equal to their book value.
Thus, the book value is used as the fair value. However, for those which are hedged by interest rate swaps
meeting hedge accounting criteria, DHR employs a method to calculate the fair value by discounting the totalof the principal and interest accounted for under the special accounting treatment for interest rate swaps by aninterest rate assumed to be applied if similar types of loans are entered into.
For long-term loans with fixed interest rates, DHR employs a method to calculate the fair value by discounting
the total of the principal and interest by an interest rate assumed to be applied if similar types of loans areentered into.

2. Redemption schedule for monetary claims after August 31, 2023 and February 29, 2024 is as follows:

As of August 31, 2023

Investment securities
Total
5,000,000
35,100,000

5,006,729
35,113,196

39,000,000 37,872,712
326,450,000 325,968,897¥405,550,000 ¥403,961,535¥(85,519)¥(85,519)

Due within
one year

Due after
one totwo years

¥―
¥―

¥―
¥―

Due within
one year

Due after
one totwo years

¥―
¥―

¥―
¥―

6,729
13,196(1,127,287(481,102)¥(1,588,464¥―(*) Amounts arising from derivative transactions are shown on a net basis with any amounts inside parentheses ( )indicating a net liability position.

12

Liabilities:(2) Current portion of investment corporation bonds and (4) Investment corporation bonds
The fair value of these bonds is measured as the present value, which is calculated by discounting the total ofprincipal and interest by the interest rate assumed based on the remaining period until maturity and credit risk.

(6) Derivatives
Please refer to Note 7 – “Derivative Transactions” below.

As ofAugust 31, 2023

Assets:(1) Investment securities
The fair value is based on reference statistical prices for OTC bond transactions.
For the book value on the balance sheet and the fair value of held-to-maturity bonds, and the difference between
the two values, please refer to Note 6 – “Investment Securities” below.

As of February 29, 2024

Investment securities
Total

Due after
Due after
two tothree tothree years four years(Yen in thousands)

Due after
four to fiveyears

Due after
five years

¥―
¥―

¥―
¥―

¥10,000¥10,000

Due after
Due after
two tothree tothree years four years(Yen in thousands)

Due after
four to fiveyears

Due after
five years¥―¥―¥10,000¥10,000

¥―
¥―

¥―
¥―

¥―
¥―

3. Repayment schedule for investment corporation bonds and long-term loans after August 31, 2023 and February
29, 2024 is as follows:

1365

VI. Notes to Financial Statements

As of August 31, 2023

Due after
Due within
one to two
one yearyears

Due after
Due after
Due after
Due after five
two to three three to four four to five
years
years
years
years
(Yen in thousands)¥― ¥7,400,000¥― ¥4,000,000 ¥4,000,000¥28,600,000
44,700,000 35,100,000 49,100,000 47,500,000 50,350,000
136,800,000¥44,700,000 ¥42,500,000 ¥49,100,000 ¥51,500,000 ¥54,350,000 ¥165,400,000

Investment corporation bonds
Long-term loans (*)Total(*) The figures above include the current portion.

As of February 29, 2024

Due after
Due within
one to two
one yearyears

Due after
Due after
Due after
Due after five
two to three three to four four to five
years
years
years
years
(Yen in thousands)¥5,000,000 ¥2,400,000 ¥4,000,000 ¥4,000,000¥―¥28,600,000
35,100,000 44,600,000 47,500,000 47,500,000 47,350,000
139,500,000¥40,100,000 ¥47,000,000 ¥51,500,000 ¥51,500,000 ¥47,350,000 ¥168,100,000

Investment corporation bonds
Long-term loans (*)Total(*) The figures above include the current portion.

Note 6 – Investment Securities
Investment securities held by DHR are Japanese government bonds deposited with the Tokyo Legal Affairs Bureau
as business security deposits in accordance with the Building Lots and Building Transaction Business Act.
Book value on the balance sheet, fair value and the difference as of August 31, 2023 and February 29, 2024 are as
follows:
As ofAugust 31, 2023
Book value
Fair value
Fair value exceeding the book value
Held-to-maturity bonds:
Government bonds¥―¥―

Fair value not exceeding the book value
Held-to-maturity bonds:
Government bonds
9,515¥9,515
Total

¥―

¥―

¥―

¥―

(a) Derivative Transactions for Which Hedge Accounting Has Not Been Applied –– None(b) Derivative Transactions for Which Hedge Accounting Has Been Applied
Contract amount or notional principal amount of derivative transactions classified by hedge accounting method is
as follows:
As ofAugust 31, 2023
February 29, 2024
(Yen in thousands)
Contract amountContract amountType of derivative Hedged
Fair
Fair
Due after
Due aftertransaction
item
value
value
Total
Total
one year
one yearPrinciple method
Interest-rate swap
LongReceive floating/¥21,000,000 ¥14,000,000 ¥(127,656)¥17,000,000 ¥14,000,000 ¥(85,519)
term loan
Pay fixed(Note 1)
(Note 1)
Special treatment for interest-rate swaps
Interest-rate swap
LongReceive floating/
44,400,000 44,400,000(Note 2)term loan
Pay fixed¥65,400,000 ¥58,400,000 ¥(127,656)
Total

44,400,000

44,400,000(Note 2)

¥61,400,000 ¥58,400,000¥(85,519)

Notes:
1. Fair value is quoted by counterparties based on the prevailing market interest rates.
2. Under the special accounting treatment, interest-rate swaps are accounted for as part of the long-term loans, thehedged item; thus, the fair value is included in the fair value of the long-term loans. (Please refer to Note 5 –“Financial Instruments” above.)

Note 8 – Goodwill
On September 1, 2016, DHR merged with the former DHR in an absorption-type merger (the “Merger”) with DHR
as the surviving corporation and the former DHR as the absorbed corporation.

8,625¥8,62514

66

February 29, 2024
(Yen in thousands)
DifferenceBook value
Fair value
Difference

Note 7 – Derivative Transactions(890)¥(890)

9,532¥9,532

8,661¥8,661(871)¥(871)On the business combination date, consideration given for the acquisition was ¥219,425,976 thousand, which was
the amount equivalent to the fair value of DHR investment units allotted, while the fair value of the net assets acquired
from the former DHR was ¥140,136,912 thousand. The excess of the acquisition cost over the fair value of the net
assets acquired, in the amount of ¥79,289,063 thousand, was recognized as goodwill upon the Merger. The amount of
goodwill is amortized over 20 years using the straight-line method. As of August 31, 2023 and February 29, 2024, theunamortized balances of goodwill from the Merger were ¥51,537,891 thousand and ¥49,555,664 thousand,respectively.

15

67

VI. Notes to Financial Statements
Note 9 – Investment Properties

Note 10 – Fair Value of Investment Properties

As of August 31, 2023 and February 29, 2024, investment properties consist of the following property andequipment and property and equipment in trust.

DHR owns logistics, residential, retail and hotel properties, and other assets for lease in the Tokyo metropolitan
area and other areas for the purpose of earning rental revenues. The book value of these investment properties
including leasehold rights in trust, net change in the book value and the fair value are as follows:

As ofAugust 31, 2023
Acquisition Accumulated
cost
depreciation

Property and equipment:
Land¥21,711,324
26,155,926
Buildings
265,497
Structures
486,908
Machinery and equipment
896,802
Tools, furniture and fixtures

Property and equipment in trust:Land
424,330,713
433,676,121
Buildings
10,245,541
Structures
2,677,580
Machinery and equipment
2,299,467
Tools, furniture and fixtures
Construction in progress
453,937¥923,199,820
Total

¥―
6,720,639
65,048
224,959
600,532

February 29, 2024
(Yen in thousands)
Acquisition AccumulatedNet
cost
depreciation¥21,711,324
19,435,287
200,448
261,949
296,269― 424,330,713
70,795,455 362,880,666
2,310,272
7,935,268
1,541,923
1,135,656
1,254,355
1,045,112―
453,937¥83,513,186 ¥839,686,634¥21,711,324
26,315,317
270,264
497,576
907,961Net¥― ¥21,711,324
6,980,878 19,334,438
68,308201,956
235,450
262,125
624,845
283,116

427,836,980― 427,836,980
438,190,385 75,648,299 362,542,086
10,356,802
2,512,716
7,844,085
3,072,989
1,620,015
1,452,973
2,530,755
1,385,493
1,145,262
734,283―
734,283¥932,424,640 ¥89,076,007 ¥843,348,633

As of / For the fiscal periods ended
August 31, 2023
February 29, 2024
(Yen in thousands)

Book value:
Balance at beginning of the period
Net change during the period
Balance at end of the period¥846,548,890(1,174,271)¥845,374,619¥1,085,829,000

Fair value at end of the period¥845,374,619
4,452,508¥849,827,127¥1,097,552,300

Notes:
1. The book value above includes leasehold rights in trust of ¥5,687,984 thousand and ¥6,478,494 thousand as ofAugust 31, 2023 and February 29, 2024, respectively.
2. For the period ended August 31, 2023, the increase is mainly due to the acquisition of MIMARU Tokyo
Akasaka (¥3,149,910 thousand), while the decrease is mainly attributable to the sale of Castalia Meieki
Minami (¥614,941 thousand) and depreciation. For the period ended February 29, 2024, the increase is mainly
due to the acquisition of two properties (¥8,289,451 thousand) including MIMARU Tokyo Hatchobori, while
the decrease is mainly attributable to the sale of a part of the land of FOLEO Hirakata (¥1,049 thousand),
impairment losses (¥889,442 thousand) and depreciation.
3. The fair value at end of the period represents the value assessed by third-party real estate appraisers.

For the period ended August 31, 2023, DHR received an insurance payment for emergency responses andrestoration work costs associated with a power outage. The insurance proceeds were mainly allocated for theacquisition cost of certain property and equipment. The corresponding book value was reduced by the deductible
amount allowable within the limit for the reduction entry from the acquisition cost. The amount of the reduction of
the book value was recorded as rental expenses under operating expenses.
The property and equipment for which the subsidy was allocated and the amount of the reduction entry are as
follows:
For the fiscal periods ended
August 31, 2023
February 29, 2024
(Yen in thousands)
Buildings in trust¥23,413¥23,413

16

68

17

69

VI. Notes to Financial Statements
Note 11 – Rental Revenues and Expenses

Note 12 – Revenue from Contracts with Customers

Rental revenues generated from investment properties and related expenses for the periods ended August 31, 2023
and February 29, 2024 are as follows:(a) Information on disaggregated revenue from contracts with customers

For the fiscal periods ended
August 31, 2023
February 29, 2024
(Yen in thousands)

Rental revenues:
Rental revenues
Common area charges
Subtotal
Other revenues related to property leasing:
Facility charges
Incidental revenues
Other revenues
Subtotal
Total rental revenues¥27,644,645
562,679
28,207,324¥27,798,141
576,806
28,374,947

479,529562,263
321,696
1,363,489¥29,570,814

481,928
503,599
282,928
1,268,456¥29,643,403

Rental expenses:
Management fees
Utilities
Taxes and public dues
Repairs
Restoration costs
Insurance premiums
Custodian fees
Depreciation and amortization
Other operating expenses
Total rental expenses
Operating income from property leasing activities¥1,559,184
635,792
2,422,910
1,177,408
258,696
54,80567,7385,602,550
730,626¥12,509,714¥17,061,100¥1,555,068
543,6222,420,966
913,272
225,970
54,80363,4375,650,264
718,133¥12,145,539¥17,497,863

Proceeds from sale ofinvestment properties
Utilities expenses
reimbursements
Other
Total

For the fiscal periods ended
August 31, 2023
February 29, 2024
(Yen in thousands)
Revenue fromOperating revenue
Revenue fromOperating revenue
contracts withfrom external
contracts withfrom externalcustomers (Note 1)
customers (Note 1)
customers
customers¥1,001,000¥349,963(Note 2)

¥2,131¥71(Note 2)544,220544,220

485,862

485,862―¥1,545,220

29,026,594¥29,920,778―¥487,993

29,157,541¥29,643,474

Notes:
1. The amounts do not include rental revenues, etc. subject to ASBJ Statement No. 13 “Accounting Standard forLease Transactions” and transfer of real estate properties, etc. subject to the Japan Institute of Certified Public
Accountants Accounting Practice Committee Statement No. 15 “Practical Guidelines on Accounting by
Transferors for Securitization of Real Property by Using Special Purpose Companies” since these are not within
the scope of application of the Accounting Standard for Revenue Recognition. Revenue from contracts withcustomers in the above table mainly consist of proceeds from sale of investment properties and utilities expenses
reimbursements.
2. Proceeds from sale of investment properties are shown in the statements of income and retained earnings as gain
(loss) on sale of investment properties (the net amount after deducting cost of investment properties sold andother sales expenses from proceeds from sale of investment properties). At DHR, gain on sale of investment
properties is recorded under operating revenues, while loss on sale of investment properties is recorded underoperating expenses. Therefore, in the above table, only the amount of gain on sale of investment properties ispresented.

(b) Information on basis for understanding revenue from contracts with customers
Please refer to Note 2 – “Summary of Significant Accounting Policies, (f) Revenue Recognition.”(c) Information regarding relationship between fulfillment of performance obligations inaccordance with contracts with customers and cash flow arising from the contracts, as well asamounts and timing of revenue expected to be recognized in the following fiscal period onward
from contracts with customers existing at the end of the current fiscal period

18

70

19

71

VI. Notes to Financial Statements(1) Balance of contract assets and contract liabilities

Receivables arising from contracts with customers(Balance at beginning of the period)
Receivables arising from contracts with customers(Balance at end of the period)
Contract assets (Balance at beginning of the period)
Contract assets (Balance at end of the period)
Contract liabilities (Balance at beginning of the period)
Contract liabilities (Balance at end of the period)

For the fiscal periods ended
August 31, 2023
February 29, 2024
(Yen in thousands)¥231,488¥235,342

235,342

186,380

―
―
―
―

―
―
―
―

(2) Transaction price allocated to remaining performance obligations
Not applicable.
For utilities expenses reimbursements, DHR has the right to receive from customers the amount ofconsideration directly corresponding to the value to the lessee, who is the customer, for the portion for which
performance is completed by the fiscal period end. Therefore, in accordance with Paragraph 19 of the
Implementation Guidance on Accounting Standard for Revenue Recognition, revenue is recognized in theamount for which DHR has the right to request payment. Accordingly, DHR has applied the provision of
Paragraph 80-22 (2) of the Accounting Standard for Revenue Recognition and does not include utilities expenses
reimbursements in this note of the transaction price allocated to remaining performance obligations.

Note 13 – Asset Retirement Obligations
DHR recognizes asset retirement obligations associated with restoration obligations upon expiration of the fixedterm land lease agreements with some landowners and those associated with contractual and legal obligations forasbestos removal.
DHR estimates the useful life of applicable assets as the remaining period of the fixed-term land lease agreements(46 – 60 years for the period ended August 31, 2023 and 44 – 60 years for the period ended February 29, 2024), anduses 1.0 – 2.4% discount rates for the calculation of asset retirement obligations. For buildings containing asbestos,
DHR estimates the useful life to be 35 years, and uses a 0.6% discount rate. Changes in asset retirement obligations
for the periods ended August 31, 2023 and February 29, 2024 are as follows:
For the fiscal periods ended
August 31, 2023
February 29, 2024
(Yen in thousands)¥690,200¥683,696―
79,811
7,190
6,503¥777,202¥690,200

Balance at beginning of the period
Increase due to acquisitions of property and equipment
Accretion expense
Balance at end of the period

Note 14 – Net Assets
DHR issues only non-par value units in accordance with the Investment Trust Act and all issue amounts of newunits are designated as stated capital. DHR maintains net assets of at least ¥50,000 thousand as required by Paragraph
4 of Article 67 of the Investment Trust Act.

Note 15 – Distribution Information
In accordance with Article 37.1.1 of the bylaws set forth by DHR for cash distributions, the amount of distributionof earnings is limited to the amount of income and more than 90% of income available for distribution as set forth in
Article 67.15 of the Special Taxation Measures Act of Japan (the “Measures”), which allows the REITs to deduct theamount of cash distributions from taxable income to avoid double taxation if certain requirements are met. In addition
to distribution of earnings, DHR will make distribution in excess of earnings in accordance with Article 37.2 of thebylaws.
DHR has a basic policy to distribute the amount equivalent to goodwill amortization expenses in addition to net
income for the fiscal period. When taxable income exceeds accounting profit associated with sale of investment
properties and it causes a need for DHR to take action to maintain its favorable tax status, DHR will increase theamount of distributions in excess of earnings (distribution from capital surplus as allowance for temporary difference
adjustments) to avoid corporate taxes. On the other hand, where special gains such as gain on sale of investment
properties are recognized, the amount of other distributions in excess of earnings, which is a part of the abovementioned distributions in excess of earnings in the amount equivalent to goodwill amortization expenses, may be
reduced by an amount equivalent to part of the gain on sale of investment properties. For distribution of the amountequivalent to goodwill amortization expenses, DHR distributes the amount equivalent to goodwill amortization
expenses as distribution in excess of earnings that can be treated as allowance for temporary difference adjustments
or other distributions in excess of earnings.
For the distribution related to the fiscal period ended August 31, 2023, DHR determined the cash distribution
amount of ¥13,091,760,000 (¥5,643 per unit) by totaling net income of ¥11,224,324,867 and the amount equivalent
to goodwill amortization expenses of ¥1,982,226,586, subtracting ¥114,714,568 that is the amount equivalent to partof gain on sale of investment properties and adjusting the fractional parts of amounts less than ¥1 per investment unit.
Of this cash distribution amount, ¥11,231,120,000 is distributed as distribution of earnings and ¥1,860,640,000 as
distribution in excess of earnings from allowance for temporary difference adjustments.
For the distribution related to the fiscal period ended February 29, 2024, DHR determined the cash distribution
amount of ¥13,249,520,000 (¥5,711 per unit) by totaling net income of ¥10,378,351,860, the amount equivalent togoodwill amortization expenses of ¥1,982,226,586 and impairment losses of ¥889,442,684, and adjusting thefractional parts of amounts less than ¥1 per investment unit. Of this cash distribution amount, ¥10,419,120,000 is
distributed as distribution of earnings, ¥2,777,040,000 as distribution in excess of earnings from allowance fortemporary difference adjustments and ¥53,360,000 as other distributions in excess of earnings.
The changes in allowance for temporary difference adjustments are reflected on the balance sheet in the fiscal periodthat distributions are declared. Thus, as of August 31, 2023 and February 29, 2024, the balances of allowance fortemporary differences are ¥8,723,684 thousand and ¥10,584,324 thousand, respectively.
In principle, DHR will not reverse the allowance for temporary difference adjustments provided for amortizationof goodwill.
Distributions related to the period but declared after the balance sheet date are summarized as follows:

20

72

21

73

VI. Notes to Financial Statements
For the fiscal periods ended
August 31, 2023
February 29, 2024
(Yen)

Unappropriated retained earnings
Deduction from capital surplus:
Allowance for temporary difference adjustments
Other deductions from capital surplus

Total¥11,358,853,689

Per unit

1,860,640,000―¥13,219,493,689

Cash distributions:¥11,231,120,000
Distribution of earnings
Distribution in excess of earnings from1,860,640,000
allowance for temporary difference adjustments
Other distributions in excess of earnings―¥13,091,760,000
Total cash distributions

Per unit

2,777,040,000
53,360,000¥13,336,485,549¥4,841¥10,419,120,000¥4,491802

2,777,040,000

1,197

―
¥5,64353,360,000

23¥5,711¥127,733,689

Retained earnings carried forward

Total¥10,506,085,549¥13,249,520,000¥86,965,549

Note 16 – Investment Corporation Bonds
The following summarizes the status of the DHR’s unsecured investment corporation bonds with special pari passu
conditions among specified investment corporation bonds as of August 31, 2023 and February 29, 2024. The bonds
are to be repaid on a lump-sum basis on the maturity date.
As ofFebruary 29, 2024
August31,
2023
Interest
Bond series
Issue date
Maturity date
rate
(Yen in thousands)

Issue date

Maturity date

Interestrate

Daiwa House REIT
Investment Corporation
10th Unsecured Bonds(Green Bonds)

May 27, 2020

May 27, 2025

0.34

2,400,000

2,400,000

Daiwa House REIT
Investment Corporation
11th Unsecured Bonds(Green Bonds)

May 27, 2020

May 27, 2030

0.641,600,000

1,600,000

Daiwa House REIT
Investment Corporation
12th Unsecured Bonds(Green Bonds)

May 27, 2020

May 25, 2040

1.00

1,000,000

1,000,000

Daiwa House REIT
Investment Corporation
13th Unsecured Bonds

December 24,
2020

December 24,
2032

0.60

3,000,000

3,000,000

Daiwa House REIT
Investment Corporation
14th Unsecured Bonds(Green Bonds)

April 15, 2021

April 15, 2031

0.50

4,000,000

4,000,000

Daiwa House REIT
Investment Corporation
15th Unsecured Bonds(Sustainability Bonds)

November 17,
2021

November 17,
2031

0.40

3,000,000

3,000,000

Daiwa House REIT
Investment Corporation
16th Unsecured Bonds(Sustainability Bonds)

November 17,
2021

November 17,
2036

0.66

1,000,000

1,000,000

Daiwa House REIT
Investment Corporation
17th Unsecured Bonds

December 16,
2021

December 16,
2027

0.24

4,000,000

4,000,000

Daiwa House REIT
Investment Corporation
18th Unsecured Bonds(Sustainability-Linked
Bonds) (Note 1)

May 25, 2022

May 25, 2029

0.55
(Note 2)4,000,000

4,000,000

December 19,
2022

June 18, 2032

0.77

2,000,000

2,000,000¥44,000,000¥44,000,000

December 24,
2014

December 24,
2024

0.826%

Daiwa House Residential
Investment Corporation
3rd Unsecured Bonds

January 22,
2015

January 22,
2025

0.67

Daiwa House REIT
Investment Corporation
6th Unsecured Bonds

December 20,
2016

December 18,
2026

0.57

4,000,000

4,000,000

Daiwa House REIT
Investment Corporation
7th Unsecured Bonds

July 30, 2018

July 30, 2030

0.69

2,000,000

2,000,000

Daiwa House REIT
Investment Corporation
19th Unsecured Bonds

Daiwa House REIT
Investment Corporation
8th Unsecured Bonds

July 30, 2018

July 30, 2038

1.03

1,000,000

1,000,000

Total

Daiwa House REIT
Investment Corporation
9th Unsecured Bonds(Green Bonds)

November 25,
2019

November 22,
2029

22

74

Bond series

Daiwa House REIT
Investment Corporation
1st Unsecured Bonds

0.53¥2,000,000

3,000,000

6,000,000¥2,000,000

3,000,000

6,000,000

As of
August 31, 2023 February 29, 2024
(Yen in thousands)

Notes:
1. The “Sustainability-Linked Bonds” refer to the bonds whose terms may change depending on whether or not thepredetermined SPT (Sustainability Performance Target) is achieved.
2 The initial interest rate applicable from the following day of May 25, 2022 to May 25, 2023 is 0.575% per annum.
After May 25, 2023, the interest rate, which is determined annually depending on the achieved level of the SPT
23

75

VI. Notes to Financial Statements
on each reference date, will be applied. The SPT is deemed to be achieved when DHR is certified as an “A List”
company, the highest rating under the CDP Climate Change Program. The first reference date is the last day ofApril 2023, and subsequent reference dates will be the last day of April of each year until the redemption date.
The achievement of the SPT will be observed on the reference date every year, and the interest rate will bechanged according to the degree of achievement of the SPT as follows:
CDP ScoreA
AB / B- / C / C- / D / D- / FInterest rate
0.55% per annum (Initial interest rate -2.5bp)
0.585% per annum (Initial interest rate +1bp)
0.60% per annum (Initial interest rate +2.5bp)

Note 17 – Short-Term and Long-Term Loans
Short-term and long-term loans consist of borrowings from financial institutions under loan agreements. None of
the loans are secured by collateral or guaranteed. The following table summarizes short-term and long-term loans asof August 31, 2023 and February 29, 2024.
As ofAugust 31, 2023
Interest(Yen in thousands)rate

Due date

Short -term loans:
Floating-rate loan
Total short-term loans
Long-term loans:
Fixed-rate loan
Floating-rate loan (*)
Fixed-rate loan
Fixed-rate loan
Floating-rate loan
Fixed-rate loan
Floating-rate loan (*)
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Floating-rate loan (*)
Fixed-rate loan
Floating-rate loan (*)
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan

September 30, 2024

¥―
¥―

―%

¥4,000,000¥4,000,000

0.23%

September 29, 2023
October 2, 2023
September 29, 2023
September 29, 2023
September 29, 2023
January 31, 2024
April 1, 2024
September 30, 2024
March 29, 2024
March 29, 2024
April 30, 2024
October 31, 2024
October 31, 2024
October 1, 2025
October 1, 2025
May 30, 2025
September 29, 2025
March 31, 2025
April 30, 2025
September 30, 2025
September 30, 2025

¥1,000,000
4,000,000
10,000,000
1,000,000
6,700,000
2,000,000
3,000,000
1,000,000
11,000,000
1,000,000
5,000,000
8,100,000
6,000,000
4,000,000
3,000,000
4,000,000
9,000,000
11,000,000
5,000,000
1,000,000
7,600,000

1.00%
0.99
0.57
0.43
0.26
0.88
1.52
0.73
0.48
0.55
0.52
0.39
0.35
1.23
1.18
0.97
0.63
0.70
0.60
0.60
0.43

¥―
―
―
―
―
―
3,000,000
1,000,000
11,000,000
1,000,000
5,000,000
8,100,000
6,000,000
4,000,000
3,000,000
4,000,000
9,000,000
11,000,000
5,000,000
1,000,000
7,600,000

―%
―
―
―
―
―
1.52
0.73
0.48
0.55
0.52
0.39
0.35
1.23
1.18
0.97
0.63
0.70
0.60
0.60
0.43

24

76

February 29, 2024
Interest(Yen in thousands)
rate

As of
Due date

Floating-rate loan (*)
Floating-rate loan (*)
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Floating-rate loan (*)
Floating-rate loan (*)
Fixed-rate loan
Floating-rate loan (*)
Fixed-rate loan
Floating-rate loan (*)
Floating-rate loan (*)
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan

April 1, 2026
May 29, 2026
September 28, 2026
November 30, 2026
April 30, 2026
April 30, 2026
April 30, 2026
April 30, 2026
March 31, 2026
September 30, 2026
March 31, 2026
September 30, 2026
March 31, 2026
April 1, 2027
March 31, 2027
July 30, 2027
November 30, 2027
September 30, 2027
April 30, 2027
July 30, 2027
September 30, 2027
January 29, 2027
September 30, 2027
April 28, 2028
April 28, 2028
December 29, 2028
April 28, 2028
September 29, 2028
January 31, 2028
September 29, 2028
July 31, 2028
September 29, 2028
April 27, 2029
November 30, 2029
January 31, 2029
April 27, 2029
May 31, 2029
January 31, 2030
April 30, 2030
October 31, 2030
April 30, 2030
September 30, 2030
March 29, 2030
September 30, 2030

August 31, 2023
Interest(Yen in thousands)
rate
2,000,000 2.03
4,000,000 1.09
1,000,000 0.69
15,000,000 0.87
10,000,000 0.76
2,000,000 0.65
1,000,000 0.45
1,000,000 0.40
500,000 0.40
500,000 0.41
1,000,000 0.44
5,500,000 0.28
3,000,000 0.28
1,500,000 1.46
2,000,000 0.85
12,100,000 0.89
16,000,000 0.90
1,500,000 0.75
500,000 0.50
8,400,000 0.46
1,000,000 0.46
1,000,000 0.51――
10,000,000 1.02
10,000,000 0.89
5,000,000 0.88
1,500,000 0.59
1,000,000 0.51
3,500,000 0.37
10,500,000 0.37
6,850,000 0.42
1,000,000 0.62
10,400,000 0.75
10,000,000 0.66
1,500,000 0.59
5,000,000 0.51
7,000,000 0.45
9,000,000 0.61
10,000,000 0.62
10,000,000 0.80
6,500,000 0.75
3,000,000 0.87
2,000,000 0.80――

February 29, 2024
Interest(Yen in thousands)
rate
2,000,000 2.03
4,000,000 1.09
1,000,000 0.69
15,000,000 0.87
10,000,000 0.76
2,000,000 0.65
1,000,000 0.45
1,000,000 0.40
500,000 0.40
500,000 0.41
1,000,000 0.44
5,500,000 0.28
3,000,000 0.28
1,500,000 1.46
2,000,000 0.85
12,100,000 0.89
16,000,000 0.90
1,500,000 0.75
500,000 0.50
8,400,000 0.46
1,000,000 0.46
1,000,000 0.51
1,000,000 0.75
10,000,000 1.02
10,000,000 0.89
5,000,000 0.88
1,500,000 0.59
1,000,000 0.51
3,500,000 0.37
10,500,000 0.37
6,850,000 0.42
1,000,000 0.62
10,400,000 0.75
10,000,000 0.66
1,500,000 0.59
5,000,000 0.51
7,000,000 0.45
9,000,000 0.61
10,000,000 0.62
10,000,000 0.80
6,500,000 0.75
3,000,000 0.87
2,000,000 0.80
10,000,000 1.08

25

77

VI. Notes to Financial Statements
As of
Due date

Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Total long-term loans
Less: current portionLong-term loans, less current
portionApril 1, 2031
August 29, 2031
September 30, 2031
December 26, 2031
September 30, 2031
March 31, 2032
May 31, 2032
September 30, 2032
March 31, 2032
March 31, 2032
August 31, 2033
September 30, 2033
January 31, 2034

August 31, 2023
Interest(Yen in thousands)
rate
3,000,000 0.70
10,500,000 0.56
4,000,000 0.96
8,500,000 1.26
10,400,000 0.99
3,500,000 0.90
4,000,000 1.03
―
―
―
―
―
―
1,000,000 0.80――――
363,550,000(44,700,000)¥318,850,000

February 29, 2024
Interest(Yen in thousands)
rate
3,000,000 0.70
10,500,000 0.56
4,000,000 0.96
8,500,000 1.26
10,400,000 0.99
3,500,000 0.90
4,000,000 1.03
6,700,000 1.32
1,000,000 1.30
1,000,000 1.30
1,000,000 0.80
1,000,000 1.40
2,000,000 1.43
361,550,000(35,100,000)¥326,450,000(*) DHR entered into an interest-rate swap contract to hedge its exposure to interest rate fluctuation risk. The statedinterest rate includes the effect of the interest-rate swap.

Note 18 – Lease Transactions
Future minimum lease revenues under existing non-cancelable operating leases as a lessor as of August 31, 2023
and February 29, 2024 are as follows:
As ofAugust 31, 2023
February 29, 2024
(Yen in thousands)¥29,888,319¥29,419,369¥157,350,871¥154,082,470¥187,239,191¥183,501,839

Due within one year
Due after one year
Total

Future minimum lease payments under existing non-cancelable operating leases as a lessee as of August 31, 2023
and February 29, 2024 are as follows:
As ofAugust 31, 2023
February 29, 2024
(Yen in thousands)¥–¥129,795¥–¥328,600¥–¥458,395

Due within one year
Due after one year
Total

The stated interest rate is the weighted average interest rate for the applicable fiscal period and is rounded to thesecond decimal place.
The repayment schedule for long-term loans subsequent to August 31, 2023 and February 29, 2024 is disclosed in
Note 5 – “Financial Instruments.”
DHR has entered into a commitment line agreement with four financial institutions in order to secure flexible andstable financing. The status of the commitment line agreement as of August 31, 2023 and February 29, 2024 is asfollows:
As ofAugust 31, 2023
February 29, 2024
(Yen in thousands)

Total amount of commitment line
Balance executed as loans
Unused line of credit¥25,000,000―¥25,000,000

26

78¥25,000,000―¥25,000,000

27

79VI. Notes to Financial Statements
Note 19 – Deferred Income Taxes
DHR is subject to Japanese corporate income taxes on all of its taxable income. However, DHR may deduct theamount distributed to its unitholders from its taxable income when certain requirements, including a requirement to
distribute in excess of 90% of distributable profit for the fiscal period, are met under the Measures. If DHR does notsatisfy all of the requirements as specified in the Measures, the entire taxable income of DHR will be subject to regular
corporate income taxes in Japan.

(a) Significant Components of Deferred Tax Assets and Liabilities
As ofAugust 31, 2023
February 29, 2024
(Yen in thousands)

Deferred tax assets:
Excess provision of allowance for doubtful accounts
Deferred interest income
Valuation difference at the time of merger(Land and buildings)
Asset retirement obligations
Deferred gains or losses on hedges
Amortization of fixed-term land lease rights
Impairment losses
Other
Subtotal
Valuation reserve
Total deferred tax assets
Deferred tax liabilities:
Valuation difference at the time of merger(Investment securities)
Valuation difference at the time of merger(Land and buildings)
Asset retirement costs
Subtotal
Valuation reserve
Total deferred tax liabilities
Net deferred tax assets¥189
55,366¥166
40,202

1,968,277

1,898,692

217,136
40,160256,112―8,292
2,545,536(2,545,536)―

244,507
26,904
273,691
279,818
7,540
2,771,525(2,771,525)―¥(558)¥(538)(13,192,979)(13,156,498)(175,927)(13,369,465)
13,369,465―¥―(201,019)(13,358,056)
13,358,056―¥―

For the fiscal periods ended
August 31, 2023
February 29, 2024
31.46%
31.46%

Statutory tax rate
Adjustments:
Tax-deductible cash distributions paid
Amortization of goodwill
Change in valuation reserve
Other
Effective tax rate

(36.69)5.56(0.33)
0.01
0.01%(39.88)
6.01
2.42
0.01
0.01%

Note 20 – Gain on Sale of Investment Properties
For the period ended August 31, 2023, DHR sold one investment property and reported a gain as follows:
For the fiscal period
endedAugust 31, 2023
(Yen in thousands)

Castalia Meieki Minami
Proceeds from sale of investment properties
Cost of investment properties sold
Other sales expenses
Gain on sale of investment properties¥1,001,000
614,941
36,095¥349,963

For the period ended February 29, 2024, DHR sold part of the land of one investment property and reported a gain
as follows:
For the fiscal period
ended
February 29, 2024
(Yen in thousands)

FOLEO Hirakata (part of the land)
Proceeds from sale of investment properties
Cost of investment properties sold
Other sales expenses
Gain on sale of investment properties¥2,131
1,049
1,010
¥71

Based on the cash distribution policy set forth in Article 37 of the Articles of Incorporation, DHR may distributean amount of cash that exceeds profit in order to minimize taxable income. DHR does not assume corporate income
tax payments in future accounting periods; therefore, deferred tax liabilities are not recorded.

(b) Significant Differences Between the Statutory Tax Rate and the Effective Tax Rate After
Applying Deferred Income Tax Accounting
The following table summarizes the significant differences between the statutory tax rate and DHR’s effective tax
rate for financial statement purposes.
28

80

29

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VI. Notes to Financial Statements
Note 21 – Per Unit Information

Note 23 – Segment Information

Earnings per unit for the periods ended August 31, 2023 and February 29, 2024 and net assets per unit as of August
31, 2023 and February 29, 2024 are as follows:(a) Segment Information

For the fiscal periods ended
August 31, 2023
February 29, 2024
(Yen)

Earnings per unit:
Net income per unit
Weighted average number of units outstanding (units)¥4,8382,320,000¥4,4732,320,000

As ofFebruary 29, 2024
(Yen)
¥222,199¥223,350

August 31, 2023

Net assets per unit

Net income per unit is calculated by dividing net income by the weighted average number of investment units
during the period. Net assets per unit are calculated by dividing net assets by the number of units outstanding at eachbalance sheet date. Diluted earnings per unit are not disclosed since there were no diluted units.

Note 22 – Related-Party Transactions
Related-party transactions for the periods ended August 31, 2023 and February 29, 2024 are as follows:(a) Controlling Company and Major Corporate Investors –– None(b) Affiliates –– None(c) Transactions under Common Control –– None(d) Directors and Major Individual Investors –– None

Since DHR has been engaged in a single segment of the real estate leasing business, and there is no other businesssegment for disclosure, segment information has been omitted.

(b) Related Information
Information about products and services
Since operating revenues from external customers for a single segment of product and service account for over 90%
of total operating revenues in DHR’s statements of income and retained earnings for the periods ended August 31,
2023 and February 29, 2024, information about products and services has been omitted.
Information about geographic areas(1) Operating revenues
Since operating revenues from external customers within Japan account for over 90% of total operating revenues
in DHR’s statements of income and retained earnings for the periods ended August 31, 2023 and February 29, 2024,
information about geographic areas has been omitted.
(2) Investment properties
Since over 90% of total investment properties on the balance sheets as of August 31, 2023 and February 29,
2024, are located within Japan, information about geographic areas on such investment properties has been omitted.
Information about major customers
Since there is not any customer accounting for 10% or more of total operating revenues in DHR’s statements ofincome and retained earnings for the periods ended August 31, 2023 and February 29, 2024, information about major
customers has been omitted.

Note 24 – Subsequent Events
None to report.

30

82

31

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VII. Independent Auditor’s Report

Independent Auditor’s Report

The Board of Directors
Daiwa House REIT Investment Corporation

The Audit of the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statementsin accordance with accounting principles generally accepted in Japan, and for such internal
control as management determines is necessary to enable the preparation of financial statementsthat are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s
ability to continue as a going concern and disclosing, as required by accounting principles
generally accepted in Japan, matters related to going concern.

OpinionSupervisory Directors are responsible for overseeing the Company’s financial reporting process.

We have audited the accompanying financial statements of Daiwa House REIT Investment
Corporation (the Company), which comprise the balance sheet as at February 29, 2024, and thestatements of income and retained earnings, changes in net assets, and cash flows for the sixmonth period then ended, and notes to the financial statements.

Auditor’s Responsibilities for the Audit of the Financial Statements

In our opinion, the accompanying financial statements present fairly, in all material respects, thefinancial position of the Company as at February 29, 2024, and its financial performance and its
cash flows for the six-month period then ended in accordance with accounting principles
generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company inaccordance with the ethical requirements that are relevant to our audit of the financial statements inJapan, and we have fulfilled our other ethical responsibilities in accordance with theserequirements. We believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Other Information
The other information comprises the information included in the Semi-Annual Report that
contains audited financial statements, but does not include the financial statements and our
auditor’s report thereon. Management is responsible for preparation and disclosure of the otherinformation. Supervisory Directors are responsible for overseeing the Company’s reporting
process of the other information.
Our opinion on the financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:・ Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion.
・ Consider internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances for our risk assessments, while the purpose of the audit of
the financial statements is not expressing an opinion on the effectiveness of the Company’s
internal control.
・ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
・ Conclude on the appropriateness of management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Company’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention
in our auditor’s report to the related disclosures in the financial statements or, if suchdisclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Company to cease to continue as a going concern.

In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.

・ Evaluate the overall presentation, structure and content of the financial statements, including thedisclosures, and whether the financial statements represent the underlying transactions andevents in a manner that achieves fair presentation in accordance with accounting principles
generally accepted in Japan.

If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.

We communicate with the Executive Director regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies ininternal control that we identify during our audit.

We have nothing to report in this regard.
84

Responsibilities of Management and Supervisory Directors for the Financial Statements

Ernst & Young ShinNihon LLC

Ernst & Young ShinNihon LLC

85

VII. Independent Auditor’s Report

Investor Information

Unitholders Data (As of February 29, 2024)

Individuals / Other
Financial institutions
Other domestic corporations
Foreign corporations and individuals
Securities firms

We also provide the Executive Director with a statement that we have complied with the ethicalrequirements regarding independence that are relevant to our audit of the financial statements inJapan, and to communicate with them all relationships and other matters that may reasonably bethought to bear on our independence, and where applicable, actions taken to eliminate threats or
safeguards applied to reduce threats to an acceptable level.

430(2.2%)

23(0.1%)

219(1.1%)

Number ofunitholders

Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Company whichis required to be disclosed pursuant to the provisions of the Certified Public Accountants Act ofJapan.
Ernst & Young ShinNihon LLC
Tokyo, JapanMay 21, 2024

Location

7th Floor, Nissei Nagatacho Building, 2-4-8,
Nagatacho, Chiyoda-ku, Tokyo 100-0014

Established

September 1, 2004

Paid-in Capital¥300 million

Shareholder

Daiwa House Industry Co., Ltd. (100%)

Account closing
date

18,497(93.6%)

120,139 units(5.2%)

636,687 units(27.4%)

Corporate Name Daiwa House Asset Management Co., Ltd.

Note for Unitholders

19,768

Fee-related Information
The fees paid or payable to us and other EY Member Firms for the audits of the financial
statements of the Company and other non-audit fees charged in the audit period to the Company
are presented in paragraph (3) titled “Officers” in Section 2 “Overview of the Investment
Corporation” included in the Semi-Annual Report for the six-month period ended February 29,
2024 of the Company.

599(3.0%)

Outline of the Asset Manager

119,796 units(5.2%)

2,320,000
units

Date for determining
Last day of February and August of each year
distribution(Distributions are to be paid within three months of each date.)
payments
Unitholders’Meeting

1,310,724 units(56.5%)

132,654 units(5.7%)REIT section of the Tokyo Stock Exchange(Securities code: 8984)

Public notices

The “Nikkei” newspaper (Nihon Keizai Shimbun)

Transfer agent

4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo
100-8233, JAPAN
Sumitomo Mitsui Trust Bank, Limited

Inquiries(Note) Ratios in parentheses are rounded to the nearest tenth.

To be held at least once every two years

Date for finalizing
Date set forth in Section 16.1 in the Articles ofgeneral meeting
Incorporation by DHR
voting rights
Listing

Number ofinvestment units

Last day of February and August of each year

8-4, Izumi 2-chome, Suginami-ku, Tokyo 168-0063, JAPAN
Stock Transfer Agency Business Planning Dept. of
Sumitomo Mitsui Trust Bank, Limited
TEL: 0120-782-031 (toll-free, available within Japan only)
Weekdays 9 a.m. to 5 p.m.

Procedures for Changes of Address, etc.
Please submit changes of address, name, etc., to your securities company, etc. For procedures regarding investment units registered in special accounts, pleasecontact: Stock Transfer Agency Business Planning Dept. of Sumitomo Mitsui Trust Bank, Limited.

下 田 琢 磨Takuma Shimoda
Designated Engagement Partner
Certified Public Accountant

Receipt of Distributions
You can receive distributions when you bring your receipt for distributions to the local office of the Japan Post Bank in Japan or to a post office (bank agent). If
the period for receiving distributions has elapsed, please contact the transfer agent Sumitomo Mitsui Trust Bank, Limited.
If you would like to specify an account to which future distributions will be transferred, please follow the procedures of your securities company, etc.
We will not pay and have no obligation to pay cash distributions not claimed within three years of the distribution date, as stipulated in our Articles of Incorporation.
Please receive your distributions as soon as possible.

Distribution Statement

江 下 聖
Sei Eshita
Designated Engagement Partner
Certified Public Accountant

The “Distribution Statement” delivered upon payment of distributions includes the “Payment Notice,” referred to in the provisions of the Act on Special Measures
Concerning Taxation. This document may be used as a document when declaring income for tax purposes. However, for unitholders who have selected thesystem of dividend allotment to securities company accounts in proportion to the number of shares held, the amount of withholding tax will be calculated by yoursecurities company, etc. For supporting documents when declaring income for tax purposes, please confirm with your securities company, etc. Furthermore,unitholders who receive distributions by way of a receipt for distributions also receive a “Distribution Statement” enclosed with it.

Outline of the Social Security and Tax Number System Nicknamed “My Number System” with Regard to Investment Units
Residents in Japan are notified of their Social Security and Tax Number (nicknamed “My Number”) by their city, town or village. My Number is required when
performing tax-related procedures with regard to investment units.

Use of the My Number for
Investment Unit Related BusinessAs stipulated by laws and regulations, it is now required to state the My Number of the unitholder on payment records
that are submitted to the tax office.
Unitholders are therefore requested to submit their My Number to their securities company, etc.

[Contact address for inquiries on submitting My Number]
Unitholders whose investment units are managed by a securities account Please direct your inquiries to your securities company, etc.
Unitholders not conducting transactions via a securities company Please call the following toll-free phone number.
Stock Transfer Agency Business Planning Dept. of Sumitomo Mitsui Trust Bank, Limited TEL: 0120-782-031
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Ernst & Young ShinNihon LLC

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