SANKEI REAL ESTATE Inc.

March 11, 2024

Supplementary Materials on the Following Press Releases Issued on February 29
I. "Notice Concerning Portfolio Rebalancing Part 3(Acquisition and Leasing of Domestic Real Estate Trust Beneficiary Rights)"

II. "Notice Concerning Additional Acquisition of Investment Units by The Sankei Building Co., Ltd.
(Follow-up Report)"

Asset
Management
Company0

SANKEI REAL ESTATE Inc.

Disclaimer
This document summarizes the information contained in the “Notice Concerning Portfolio Rebalancing Part 3 (Acquisition and Leasing of Domestic Real Estate Trust Beneficiary Rights)”
and the “Notice Concerning Additional Acquisition of Investment Units by The Sankei Building Co., Ltd. (Follow-up Report)" announced by SANKEI REAL ESTATE Inc. (hereinafter,“SANKEI REAL ESTATE”) on February 29, 2024, and information associated with these.
This document is not a disclosure document or asset management report pursuant to the Financial Instruments and Exchange Act, the Act on Investment Trusts and Investment
Corporations, associated Cabinet Orders, Cabinet Office Orders and Regulations and the Securities Listing Regulations of the Tokyo Stock Exchange. Furthermore, this document is notintended for the purpose of soliciting investment in or recommending the trading of specific products. When making any investment, investors do so solely at their own risk anddiscretion.

This document contains certain forward-looking statements on the financial condition, management results and operations of SANKEI REAL ESTATE, statements on the plans andtargets of Sankei Building Asset Management Co., Ltd. (hereinafter, the “Asset Management Company”), which is the asset management company of SANKEI REAL ESTATE, andforward-looking statements and forecasts on future plans, management targets, strategies, etc., of SANKEI REAL ESTATE. These forward-looking statements are based on information
available to SANKEI REAL ESTATE and the Asset Management Company on the date of preparation of the document (or the relevant date if otherwise specified in the document), andare based on certain suppositions and assumptions at the present time that were formulated based on multiple assumptions concerning various internal and external environmental
factors such as financial, economic, market, political and international conditions surrounding the operations of SANKEI REAL ESTATE. However, there is no assurance that the above
suppositions and assumptions are correct. Therefore, please be aware that such forward-looking statements contain known and unknown risks and uncertainties that could cause theactual performance, management results, financial condition, etc., of SANKEI REAL ESTATE to significantly differ from explicitly or implicitly stated forecasts. Therefore, this document
does not provide any assurances of future performance, investment results or fluctuations, etc., with respect to SANKEI REAL ESTATE, and actual results may differ significantly due to avariety of factors.
In addition to statements on SANKEI REAL ESTATE, this document contains diagrams and data, etc., prepared by the Asset Management Company based on information provided to
SANKEI REAL ESTATE and the Asset Management Company by a third party or information published by a third party, and contains analyses, judgments and other views of SANKEI REALESTATE and the Asset Management Company on these. There may be different views on these, and SANKEI REAL ESTATE and the Asset Management Company may change their viewsin the future.
Careful attention has been given to the information provided in this document, but there are no assurances on the accuracy, fairness and completeness of the information regardlessof whether the information was prepared by SANKEI REAL ESTATE or the Asset Management Company, or is information received from a third party.
The content of this document may be changed or abolished without notice. SANKEI REAL ESTATE and the Asset Management Company do not have an obligation to update or publish
the content of this document (including forward-looking statements).
All rights to any part of this document belong to Sankei Building Asset Management, and no part of this document shall be used, cited, reproduced, altered, disassembled, transmitted,
etc., by any means, electronic or mechanical, for any purpose without permission.
Please use the contact below if you have any inquiries concerning this document.

Sankei Building Asset Management Co., Ltd.
Finance & IR Department
Phone: +81-3-5542-1316
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SANKEI REAL ESTATE Inc.

I.

“Notice Concerning Portfolio Rebalancing Part 3(Acquisition and Leasing of Domestic Real Estate Trust Beneficiary Rights)”

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SRE

Overview of the Transaction

REVIVAL PLAN

 Acquired one office building and one of the core asset group (hotel)
1. Overview of office building acquisition(1) Asset to be acquired
A-3 S-GATE NIHONBASHI-HONCHO (co-ownership interest 49%)
(2) Planned acquisition price: 7,450 million yen(3) Contract date: February 29, 2024
(4) Planned acquisition date: April 1, 2024

(5) Seller: (Not disclosed*)
2. Overview of acquiring core asset group (hotel)(1) Asset to be acquired
B-7 VESSEL HOTEL CAMPANA SUSUKINO (co-ownership interest 40%)(2) Planned acquisition price: 2,920 million yen(3) Contract date: March 1, 2024
(4) Planned acquisition date: March 1, 2024
(5) Seller: THE SANKEI BUILDING CO., LTD.
* Unless otherwise specified, the figures in this document are rounded down to the nearest unit.
* "Not disclosed" information is not disclosed due to unavoidable circumstances, as it includes information for which consent for disclosure has not been obtained
from the seller, or information that makes it possible to calculate confidential information.

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Overview of the Asset to be Acquired (1)A-3

REVIVAL PLAN
Asset Management
Company's unique route
Office building

S-GATE NIHONBASHI-HONCHO(co-ownership interest 49%)

 Located in the Nihonbashi area, a traditional business hub with access to four stations and six lines
 The 4th property in the “S-GATE” series aiming for 100% of the interest through additional
acquisitions[Official Website] https://www.s-gate-office.com/nihonbashi-honcho/
This is the fourth property in the “S-GATE” series of high-grade, mid-sized officebuildings developed and managed by The Sankei Building Co., Ltd., the Sponsor, withunified design, specifications and service levels to offer superior comfort, peace of mind,
safety, environmental performance, BCP (business continuity planning) measures andtenant services, etc. in terms of intangible factors.

Sponsor brandHigh-grade, mid-sized officebuilding “S-GATE”"S-GATE" is a high-grade, mid-sized office that has beendeveloped from the perspective of people who will lead the next
generation of entrepreneurs, pursuing and sublimating various
factors that businesses require in an office, such as future work
styles and the environment.
Office space filled with natural lighting from multiple angles

RefreshcornerCorridor

OfficeEmergency
EV(186.56 tsubo)

Storagearea

Tenant separation line
Heavy-duty zone
Floor load 800 kg/m2

The entrance features pleasant aromas,
wall greening, and digital signage
With the appearance of a heavy grid design (a lattice-likedesign on the exterior of the building), it is located on acorner facing Showa-dori Street and boasts high visibility.

Located in the Nihonbashi area, a traditional
business hub where long-established shops,
department stores, and pharmaceuticalcompanies have stores and offices.

Planned acquisition price7,450 million yen

Location

Chuo-ku, Tokyo

Appraisal value

7,480 million yen

Total floor area

8,174.43 m2

Appraisal NOI yield

3.3%

Construction completion

October 2018

Contract form

Fixed-term lease

Structure / size

Steel Construction, 11 floors above ground

Terrace on the rooftop
offering pleasant breezes

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Overview of the Asset to be Acquired (2)B-7REVIVAL PLAN
Sponsor support
Core asset group

VESSEL HOTEL CAMPANA SUSUKINOVESSEL HOTEL CAMPANA(Co-ownership interest 40%)

 Acquisition of property developed by the Sponsor (acquisition of co-ownership interest throughjoint development) Located in the Susukino area, the largest entertainment district in Hokkaido, 4 minutes walkfrom Susukino station on the municipal subway

Reward yourself and your family.
Relax after a hard days work.
Breakfast made with local ingredients.
Large bath for the whole family.
We want three generations of parents andchildren to enjoy a slightly richer resort feeling.
A stay away to reward yourself and your family.

[Official Website] https://www.vessel-hotel.jp/campana/susukino/
The ultimate space for relaxation with a Japanese feel
Art and Japanese culture comes to life
In addition to a modern hearth, the building also boasts artwork depicting the beautiful
natural environment of Hokkaido by artists who are active in Japan and overseas. The
hotel pursues "beauty and delicacy," a culture unique to Japanese hotels, and offers arelaxing space with a simple expression of Japanese elements, such as the use of woodfor a calming feel and bronze plating as accent points.

Premier deluxeStandard twin

Large bath
Breakfast"Breakfast forthe senses_Hokkaido"

Planned acquisition price

2,920 million yen

Location

Chuo-ku, Sapporo

Appraisal value

2,930 million yen

Total floor area

9,950.91 m2

Appraisal NOI yield

4.2%

Construction completion

March 2019

Contract form

Fixed-term lease (fixed)

Structure / size

Steel Construction, 13 floors above ground

Operator

Vessel Hotel Development
Co., Ltd.

Number of guest rooms

296 rooms

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Changes in Portfolio Rebalancing

Rebalancing part 1
Acquired

Rebalancing part 3
Current transaction

February 2024

March 2024

Acquired












Acquisition price:
2,920 million yen

Core asset group(Hotel)100% owned

10 office buildings

Acquired

VESSEL HOTEL CAMPANASUSUKINO(Co-ownership interest 40%)

Acquisition price:
5,800 million yen

Acquisition price:
1,400 million yen

After rebalancing part 3

Core asset group(Hotel)Hotel Intergate Kyoto Shijo
Shinmachi

S-GATE AKASAKA(Quasi-co-ownership interest 20%)

April 2024

Rebalancing part 2
Large-scale portfolio rebalancing

Core asset group(Hotel)Office building

Quasi-coownershipinterest 80%

From March 2024

From January 2024

From March 2023

March 2023

REVIVAL PLAN

Hotel Intergate Kanazawa

April 2024

Acquisition price:
3,250 million yen

Core asset group(Logistics facility)
SANKEILOGI Settsu

Core asset group(Hotel)Acquisition price:
Approx. 5,200 million yen

Grids Premium Hotel
Osaka Namba

Acquired

7 properties in the core asset group

Office building Hotel Intergate Tokyo Kyobashi
 Hotel Intergate Hiroshima
 SANKEILOGI Settsu
 Hotel Intergate Kyoto Shijo Shinmachi
 Hotel Intergate Kanazawa
 Grids Premium Hotel Osaka Namba
 VESSEL HOTEL CAMPANA SUSUKINOS-GATE NIHONBASHI-HONCHO(Co-ownership interest 49%)
Acquisition price:
7,450 million yen
Co-ownershipinterest
51%

Acquisition price:
7,800 million yen

Tokyo Sankei Building
S-GATE NIHONBASHI-HONCHO
S-GATE AKIHABARA
Hibiya Sankei Building
Hatchobori Sankei Building
Toyo Park Building
Omori Park Building
S-GATE AKASAKA
Miyazakidai Garden OfficeHitachi Kyusyu Building

100% owned

Asset replacement
Asset replacement

August 2023
Office building
BREEZÉ TOWER(Quasi-co-ownership interest
1.55%)

Transfer price: Approx. 620
million yen

Disposition

January 2024
Office building
BREEZÉ TOWER(Quasi-co-ownership interest 43.45%)
Transfer price:
Approx. 17,900 million yen

Transferred all interest
Office building
Shinagawa Seaside TS Tower(Quasi-co-ownership interest 50%)
Transfer price: 16,100 million yen

Disposition

Replacement of approximately 35% (based on acquisition price) of
the asset size before rebalancing

Implementation of rebalancing
Acquisition price: 33,800 million yen
Asset size
96,600 million yen(Before rebalancing)

Asset replacement

Asset size
96,400 million yen(After rebalancing)* The total does not match due tothe recording of gains on sales, etc.

Transfer price: 34,700 million yen

Transferred all interest

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Portfolio Status After the Transaction

REVIVAL PLAN
After rebalancing part 3

 Asset type diversification (on an acquisition price basis)
Rebalancing part 3

Rebalancing part 2

Currenttransaction

Large-scale portfolio
rebalancing

Sub assets(Core asset group)Core asset group
40.7%

17.7%

Core asset group
39.4%

After
rebalancing
part 2February 1,
2024

Beforerebalancing
part 2January 30,
2024

Office buildings
82.3%

April 1, 2024
(Scheduled)

Office buildings
59.3%

Office buildings
60.6%

 Geographic diversification (on an acquisition price basis)
Rebalancing part 3

Rebalancing part 2
Other
13.6%
Greater
Osaka
17.4%

Beforerebalancing
part 2January 30,
2024

Currenttransaction

Large-scale portfolio
rebalancing

Other
20.0%

Greater
Tokyo
69.0%

Greater
Osaka
21.9%

* Unless otherwise specified, the ratios in this document were rounded to one decimal place.
Therefore, numbers such as totals may not match. The same applies below.

Afterrebalancing
part 2February 1,
2024

Greater
Tokyo
58.1%

Other
20.9%

April 1, 2024
Greater (Scheduled)
Osaka
19.5%

Greater
Tokyo
59.6%

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Portfolio Status After the Transaction

REVIVAL PLAN

 Changes in portfolio resulting from rebalancing*1 Changes in financial condition resulting
from rebalancing*1

Beforerebalancing
part 2After rebalancing
part 2 and early
repayment *4

Afterrebalancing
part 3

Beforerebalancing
part 2After
rebalancing
part 2

Rebalancing
part 3: Current
transaction

Afterrebalancing
part 3102.8 billion yen

86.0 billion yen

10.3 billion yen

96.4 billion yen

Balance ofinterest-bearing
liabilities

56.6 billion yen

50.2 billion yen

50.2 billion yen

Number ofproperties

15

16(Of which one property
was additionallyacquired)

17

LTV*5

50.6%

48.1%

47.9%

Acquisition priceper property

6.8 billion yen

5.3 billion yen

5.1 billion yen

5.6 billion yen

Ratio of longterm debt

75.3%

84.9%

81.9%

4.0%

4.1%

3.5%

4.0%

Ratio of fixedinterest rate

78.3%

88.2%

88.2%

Occupancy rate

87.6%

96.3%

100.0%

96.6%*3

Averageremaining period

2.0 years

2.1 years

2.3 years

Sponsor support
rate

100.0%

100.0%

28.2%

92.3%

Averagefinancinginterest rate *6

0.5%

0.5%

0.6%

Asset size
(acquisition price basis)

Average appraisal
NOI yield *22(acquisition price basis)(acquisition price basis)

Average buildingage

19.5 years

16.9 years

5.3 years

15.8 years*1 Regarding the timing, "Before rebalancing part 2" is January 30, 2024, "After rebalancing part 2" is February 1, 2024, and"After rebalancing part 2 and early repayment" is February 29, 2024, and "After rebalancing part 3" is April 1, 2024.
*2 For the assets acquired and transferred in the rebalancing part 2, figures as of January 1, 2024 are employed, for assets
scheduled to be acquired in rebalancing part 3, those as of February 1, 2024, and for other assets, those as of the end of
August 2023.

*3 Estimated value based on figures as of February 1, 2024.
*4 “Early repayment” is the premature repayment of 6,400 million yen in borrowings executed on
February 29, 2024.
*5 Regarding LTV, "Before rebalancing part 2" is the figure as of September 29, 2023, and "After
rebalancing part 3" is the estimated figure as of the end of August 2024 (end of the 11th period) asof the date of this document.
*6 The average financing interest rate is the estimated figure as of the date of this document.

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II. "Notice Concerning Additional Acquisition of Investment Units by
The Sankei Building Co., Ltd. (Follow-up Report)"

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II. Additional Acquisition of SANKEI REAL ESTATE’s Investment Units by the Sponsor

REVIVAL PLAN

 Expressing a strong commitment as the Sponsor to the "Revival Plan" implemented by SANKEI REAL ESTATE.
Clarifying once again the Sponsor's support stance toward SANKEI REAL ESTATE
1.

Details of additional acquisitions notified by the Sponsor(1) Total number of investment units to be acquired• Up to 46,652 units (approximately 10.0% of the issued investment units)* If the price of the investment units exceeds the initially set maximum price during the acquisition period, the number of units to be acquired may not reach the
maximum, or the acquisition may not take place at all.

• Up to 64,131 units (approximately 13.7% of the issued investment units), including the current number of units held (17,479 units)(2) Acquisition period• Up to 220 working days from March 6, 2024
* It may be terminated during this period if the number of investment units acquired reaches the maximum number of investment units, or as a result of othercircumstances.

(3) Acquisition method• The Sponsor will acquire SANKEI REAL ESTATE’s investments units through open market purchases in accordance with a sale transaction
agreement to be entered into with a securities company.

2.

Significance of additional acquisition• The intention of additional acquisitions is an expression of a strong commitment as the Sponsor to the "Revival Plan" implemented by SANKEIREAL ESTATE, as well as clarification of the Sponsor's support stance once again toward SANKEI REAL ESTATE• It is expected that the interests of SANKEI REAL ESTATE’s unitholders and the Sponsor will align through further same-boat investments by theSponsor, which will ensure not only the steady implementation of the "Revival Plan" but also support from the Sponsor that will result insustainable growth of SANKEI REAL ESTATE

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