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[Provisional Translation Only]
This English translation of the original Japanese document is provided solely for information purposes.
Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

April 8, 2016
REIT Issuer
Ichigo Office REIT Investment Corporation (8975)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Yoshihiro Takatsuka, Executive Director
www.ichigo-office.co.jp/english
Asset Management Company
Ichigo Real Estate Investment Advisors Co., Ltd.
Representative: Wataru Orii, President & Representative Statutory Executive Officer
Inquiries: Hiroto Tajitsu, Head of Administration & Statutory Executive Officer
Tel: +81-3-3502-4891

Earnings and Dividend Forecast Revision for the October 2016
Fiscal Period and Forecast for the April 2017 Fiscal Period
Ichigo Office REIT has amended its earnings and dividend forecast for the October 2016 fiscal
period that was announced in “Financial Report for the Fiscal Period Ending October 2015” on
December 16, 2015. It is also announcing its earnings and dividend forecast for the April 2017
fiscal period.
April 2016 fiscal period earnings will be announced on June 16, 2016, and the current forecast
is unchanged.
1. October 2016 Earnings and Dividend Forecast Revision
OperatingRevenue(million yen)

Operating
Profit(million yen)

Recurring
Profit(million yen)

Net
Income(million yen)

Dividendper Share(yen)

6,472

2,944

2,301

2,300

1,760

6,601

2,946

2,199

2,198

1,850

Difference (B-A)+129+1-101-101+90

Change

+2.0%

+0.1%

-4.4%

-4.4%

+5.1%

PreviousAnnounced
Forecast (A)Current
AmendedForecast (B)Forecast number of shares outstanding at the end of the fiscal period: 1,416,323 shares.
The forecasts presented above are based on certain preconditions set forth in“Preconditions for the October 2016 Earnings Forecast” below. The actual operating
revenue, operating profit, recurring profit, net income, and dividend per share (excluding
dividend distribution in excess of earnings per share) may vary due to changes incircumstances such as asset acquisitions and dispositions, tenant turnover, unexpectedmaintenance and repair costs and other expenses, changes in interest rates, and theissuance of new shares. These forecasts should not be construed as a guarantee of such1

performance or results. Ichigo Office REIT will make a forecast revision should there bea substantial discrepancy between the forecast and actual operating results.
2. October 2016 Earnings and Dividend Forecast Revision Rationale
This amended forecast reflects the acquisition of five high-quality, prime location assets as partof a strategic restructuring of Ichigo Office REIT’s portfolio, as announced today in the release“Acquisition of Five Office Assets.” (See also “Reference: Strategic Portfolio Restructuring”below.)
The sale of four lower-quality assets in the previous fiscal period (Akita Sanno 21 Building,Ichigo Meieki Building, Ichigo Yokohama Nishiguchi Building, and Ichigo Saga Building) will
decrease October 2016 operating revenue by 152 million yen and NOI by 85 million yen, buttoday’s five-asset acquisition will generate substantially higher operating revenue and NOI of
315 million yen and 244 million yen, respectively.1 As a result, October 2016 operating revenue
is forecast to increase by 129 million yen. However, due to one-off operating expenses related tothe five-asset acquisition, October 2016 operating profit will increase by just 1 million yen. On
an annualized basis, the NOI of the four disposed assets is 212 million yen and the NOI of thefive acquired assets is 473 million yen, generating a net increase in annual NOI for Ichigo
Office REIT of 261 million yen.2, 3
The on-going increase in NOI generated by this five-asset acquisition will be reflected in theOctober 2016 dividend. The October 2016 total dividend is thus forecast to be 2,630 million yen,which includes a dividend reserve reversal offsetting the 139 million yen in one-off operational
expenses related to the acquisition, 83 million yen in one-off borrowing costs, and 8 million yen
in other one-off operational expenses.
Dividend per share is thus forecast to be 1,850 yen, 90 yen higher than the April 2016 dividend.

For details regarding the four asset sales, please refer to the January 28, 2016 release, “Sale ofPortfolio Asset (Akita Sanno 21 Building),” the March 4, 2016 release, “Sale of Portfolio
Assets (Ichigo Meieki Building, Ichigo Yokohama Nishiguchi Building),” and the March 16,
2016 release, “Sale of Portfolio Asset (Ichigo Saga Building).”
2
The NOI of the assets sold is the annualized amount based on the results of October 2015
fiscal period.
3
The NOI of the assets acquired is the NOI employed in the direct capitalization valuation
method in the appraisal report at acquisition.
1

2

3. April 2017 Earnings and Dividend Forecast Rationale

April 2017

Operating
Revenue(million yen)

Operating
Profit(million yen)

RecurringProfit(million yen)

Net
Income(million yen)

Dividendper Share(yen)

6,564

2,942

2,288

2,287

1,860

Forecast number of shares outstanding at the end of the fiscal period: 1,416,323 shares.
The forecasts presented above are based on certain preconditions set forth in“Preconditions for the April 2017 Earnings Forecast” below. The actual operating revenue,operating profit, recurring profit, net income, and dividend per share (excluding dividend
distribution in excess of earnings per share) may vary due to changes in circumstancessuch as asset acquisitions and dispositions, tenant turnover, unexpected maintenance andrepair costs and other expenses, changes in interest rates, and the issuance of new shares.
These forecasts should not be construed as a guarantee of such performance or results.
Ichigo Office REIT will make a forecast revision should there be a substantial
discrepancy between the forecast and actual operating results.
4. April 2017 Earnings and Dividend Forecast Rationale
April 2017 operating revenue is expected to decrease by 36 million yen primarily due toseasonal factors such as lower utilities revenue from tenants. However, due to a forecast 32million yen decrease in operating expenses, the operating profit decline is expected to be limited
to 4 million yen. Recurring profit and net income are each forecast to increase by 88 million yen,because the one-off debt costs associated with today’s five-asset acquisition will not recur.
The April 2017 total dividend is thus forecast to be 2,634 million yen, which includes a
dividend reserve reversal of 21 million yen on gains on sale and 126 million yen in one-off
operational expenses related to today’s five-asset acquisition.
Dividend per share is thus forecast to be 1,860 yen, 10 yen higher than the October 2016
dividend.

3Preconditions for the October 2016 Earnings Forecasts
Item

Preconditions

PeriodOctober 2016 Fiscal Period: May 1, 2016 – October 31, 2016 (184 days)

Portfolio Assets• 78 assets, which is the total of 74 assets as of today and 5 newly acquired assets asannounced in today’s release “Acquisition of Five Office Assets,” minus 1 asset asannounced in the March 4, 2016 release “Sale of Portfolio Assets (Ichigo Meieki Building,
Ichigo Yokohama Nishiguchi Building)” transferred and settled on the scheduled date. The
forecast assumes there will be no additional acquisitions or sales until the end of October
2016.
• The total number of portfolio assets may change due to acquisitions or sales.

Number of Shares• 1,416,323 shares issued and outstanding, with no additional new issuance until the end ofOctober 2016.

Operating Revenue• Rent revenue is calculated conservatively based on lease contracts that are in effect as oftoday while taking into consideration such factors as historical rents, the competitiveness ofthe properties, and market conditions.
• The forecast of total occupancy for as of October 31, 2016 is 96.5%.

Operating Expenses• Among rental activity expanses, Ichigo Office REIT’s principal operating expenses otherthan depreciation are calculated based on historical data while taking into consideration
variable expenses.
• The anticipated amount of property tax and city planning tax is 511 million yen for theOctober 2016 period. The prorated property tax and city planning tax related to theseacquisitions will be included in the acquisition cost and shall be excluded from operatingexpenses.
• The amount for building maintenance and repair expenses is estimated to be 91 million yen
for the October 2016 period. However, expenses for each period may differ significantly
from these estimated amounts for reasons including the variability of maintenance andrepair expenses, costs due to unexpected building damage, etc.
• Service provider expenses including property management fees, etc. are estimated to be 609
million yen for the October 2016 period.
• Depreciation has been calculated using the straight-line method. Depreciation is calculated
by including the depreciation for future additional capital expenditures in the amortization
amount. Depreciation of 856 million yen has been anticipated for the October 2016 period.
• Incentive fees as part of asset management fees are estimated to be 139 million yen for theOctober 2016 period.
• Actual operating expenses may differ significantly from assumptions due to unforeseeable
factors.

Non-operatingExpenses• Interest expenses of 499 million yen are anticipated for the October 2016 period.
• Borrowing-related expenses of 247 million yen are anticipated for the October 2016 period.

Borrowings• Ichigo Office REIT’s balance of loans payable is estimated to be 86,223 million yen as ofOctober 31, 2016.

Dividend per Share• Dividends per share are based on the assumption that distributions will comply with thedividend distribution policy stipulated in Ichigo Office REIT’s Articles of Incorporation.
• Dividends for the October 2016 period are assumed to be 2,630 million yen, which is thetotal amount of unappropriated retained earnings of 2,199 million yen plus a dividend
reserve reversal of 430 million yen. The whole amount of 2,630 million yen will be
distributed excluding any fraction of less than 1 yen per share.
• The dividend per share amount is subject to change due to such factors as tenant turnover,property changes, unexpected maintenance and repair costs and other expenses, fluctuationsin interest rates, and the issuance of additional shares.

Dividend Distribution
in Excess of Earnings
per Share• Ichigo Office REIT does not plan on making any dividend distribution in excess of earnings
per share or retained earnings.

Other• The performance forecast are based on the assumption that revisions impacting the forecast
figures will not be mad to laws and ordinances, the tax system, accounting standards, listingrules, rules of the Investment Trust Association, Japan, etc.
• Performance forecasts are based on the assumption that there will be no unexpectedmaterial change in general economic trends, real estate market conditions, etc.

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Preconditions for the April 2017 Earnings Forecasts
Item

Preconditions

PeriodApril 2017 Fiscal Period: November 1, 2016 – April 30, 2017 (181 days)

Portfolio Assets• 78 assets, which is the total of 74 assets as of today and 5 newly acquired assets asannounced in today’s release “Acquisition of Five Office Assets,” minus 1 asset asannounced in the March 4, 2016 release “Sale of Portfolio Assets (Ichigo Meieki Building,
Ichigo Yokohama Nishiguchi Building)” transferred and settled on the scheduled date. The
forecast assumes there will be no additional acquisitions or sales until the end of April
2017.
• The total number of portfolio assets may change due to acquisitions or sales.

Number of Shares• 1,416,323 shares issued and outstanding, with no additional new issuance until the end ofApril 2017.

Operating Revenue• Rent revenue is calculated conservatively based on lease contracts that are in effect as oftoday while taking into consideration such factors as historical rents, the competitiveness ofthe properties, and market conditions.
• The forecast of total occupancy for as of April 30, 2017 is 96.1%.

Operating Expenses• Among rental activity expanses, Ichigo Office REIT’s principal operating expenses otherthan depreciation are calculated based on historical data while taking into consideration
variable expenses.
• The anticipated amount of property tax and city planning tax is 521 million yen for theApril 2017 period. The prorated property tax and city planning tax related to theseacquisitions will be included in the acquisition cost and shall be excluded from operating
expenses.
• The amount for building maintenance and repair expenses is estimated to be 110 million
yen for the April 2017 period. However, expenses for each period may differ significantly
from these estimated amounts for reasons including the variability of maintenance andrepair expenses, costs due to unexpected building damage, etc.
• Service provider expenses including property management fees, etc. are estimated to be 585
million yen for the April 2017 period.
• Depreciation has been calculated using the straight-line method. Depreciation is calculated
by including the depreciation for future additional capital expenditures in the amortization
amount. Depreciation of 858 million yen has been anticipated for the April 2017 period.
• Incentive fees as part of asset management fees are estimated to be 126 million yen for theApril 2017 period.
• Actual operating expenses may differ significantly from assumptions due to unforeseeable
factors.

Non-operatingExpenses• Interest expenses of 492 million yen are anticipated for the April 2017 period.
• Borrowing-related expenses of 162 million yen are anticipated for the April 2017 period.

Borrowings• Ichigo Office REIT’s balance of loans payable is estimated to be 86,087 million yen as ofApril 30, 2017.

Dividend per Share• Dividends per share are based on the assumption that distributions will comply with thedividend distribution policy stipulated in Ichigo Office REIT’s Articles of Incorporation.
• Dividends for the April 2017 period are assumed to be 2,634 million yen, which is the total
amount of unappropriated retained earnings of 2,287 million yen plus a dividend reserve
reversal of 347 million yen. The whole amount of 2,634 million yen will be distributed
excluding any fraction of less than 1 yen per share.
• The dividend per share amount is subject to change due to such factors as tenant turnover,property changes, unexpected maintenance and repair costs and other expenses, fluctuationsin interest rates, and the issuance of additional shares.

Dividend Distribution
in Excess of Earnings
per Share• Ichigo Office REIT does not plan on making any dividend distribution in excess of earnings
per share or retained earnings.

Other• The performance forecast are based on the assumption that revisions impacting the forecast
figures will not be mad to laws and ordinances, the tax system, accounting standards, listing
rules, rules of the Investment Trust Association, Japan, etc.
• Performance forecasts are based on the assumption that there will be no unexpectedmaterial change in general economic trends, real estate market conditions, etc.

5Reference: Strategic Portfolio Restructuring

4 Asset Sales

5 Asset Acquisitions

Sell Low-Upside Assets (Low Value-Add, High
Maintenance Costs, Low Occupancy) and Reinvest
Proceeds

Increase NOI, Dividend, & Portfolio Quality
with Prime Location Assets

Sale Price
JPY 3.3B
Profits on Sale JPY 300M

Acquisition Price JPY 8.3B

1) Akita Sanno 21 Building (Akita)
Strategic2) Ichigo Meieki Building (Nagoya)Portfolio3) Ichigo Yokohama Nishiguchi (Yokohama)
Restructuring
4) Ichigo Saga Building (Saga)

Annual NOI JPY 210M

1) Ichigo Shibuya East Building (CentralTokyo)
2) Ichigo Ningyocho Building (Central Tokyo)
3) Ichigo Nishi Honmachi Building (Osaka)4) Ichigo Hakata Building (Fukuoka)
5) Nishiki First Building (Nagoya)

Annual NOI JPY 470M

Notes: Profits on sale are calculated as the sales price minus expenses, less the book value as ofthe sale date. The NOI of the assets sold is the annualized amount based on the results ofOctober 2015 fiscal period. The NOI of the assets acquired is the NOI employed in the direct
capitalization valuation method in the appraisal report at acquisition.

6