10th Fiscal Period
Semi - Annual Reportfrom September 1, 2023 to February 29, 2024

SANKEI REAL ESTATE Inc.

Message to Our Unitholders
We would like to express our sincere appreciation to all unitholders for your loyal patronage to SANKEI REAL ESTATE
Inc. (“SANKEI REAL ESTATE”).
Having settled the 10th fiscal period ended February 2024, we are pleased to report on the performance resultsof SANKEI REAL ESTATE. We would like to thank all of our unitholders for your continued support and cooperation.
SANKEI REAL ESTATE implemented a “large-scale portfolio rebalance” that is part of the “Revival Plan” announced in October 2023,
that is, it transferred two office buildings (“Shinagawa Seaside TS Tower” and “BREEZÉ TOWER”) and acquired three newer hotel
properties (“Hotel Intergate Kyoto Shijo Shinmachi,” “Hotel Intergate Kanazawa,” and “GRIDS PREMIUM Hotel Osaka Namba”) as
core asset group, in order to convert from an office building-focused REIT to a comprehensive REIT. With the aim of becoming a
REIT capable of sustainable growth, SANKEI REAL ESTATE will continue to maintain its portfolio and improve the portfolio quality
through continuous rebalancing in order to further strengthen the portfolio.

For the 10th fiscal period (ended February 2024), due to gains on sales of real estate properties, which were higher than initially
expected, and an increase in income from rental operations, we have decided to distribute 2,221 yen per unit (up 8.3% from theforecast), 171 yen more per unit than initially expected for the fiscal period.
In addition, the forecasted distribution per unit is 2,208 yen for the 11th fiscal period (ending August 2024) (down 0.6% from the10th fiscal period) and 2,217 yen for the 12th fiscal period (ending February 2025) (up 0.4% from the 11th fiscal period).
The Japanese economy continues to recover gradually after the coronavirus pandemic. Nevertheless, it is necessary to pay close
attention to the impact on Japan’s financial capital market and REIT market caused by the progress of domestic inflation, the shift inmonetary policy by the Bank of Japan, and monetary policies in each country based on the price and employment situation in Europe,
the United States, and other foreign countries. Accordingly, SANKEI REAL ESTATE will steadily implement the growth strategy
envisioned by it and strive to maximize unitholder value, while closely monitoring future economic and financial market trends.
We would like to ask our unitholders for their continued support and encouragement for many years to come.

Yuichi Ota
Executive Director, SANKEI REAL ESTATE Inc.
President and Chief Executive Officer, Sankei Building Asset Management Co., Ltd.

-2-

I.

Asset Management Report

1. Overview of Asset Management(1) Changes in Operating Results and Other Management Data
6th fiscal
7th fiscal
8th fiscal
9th fiscal
10th fiscal
periodperiodperiodperiodperiodFebruary 2022 August 2022 February 2023 August 2023 February 2024

Fiscal period
Closing of accounts
Operating revenue[Operating revenue from real estate rent
business]
Operating expenses[Operating expenses from real estate rent
business]
Operating income

million yen

2,778

3,028

2,891

2,751

7,778

million yen[2,778][3,028][2,891][2,586][2,361]

million yen

1,237

1,397

1,648

1,416

6,548

million yen[972][1,076][1,338][1,110][1,141]

million yen

1,540

1,630

1,243

1,334

1,229

Ordinary income

million yen

1,392

1,476

1,077

1,130

1,038

Net income

million yen

1,391

1,475

1,076

1,129

1,037

Unitholders’ capital (net) (Note 4)
Total number of investment units issued andoutstanding
Net assets

million yen

49,43549,43549,43549,43549,435

units

467,099

467,099

467,099

467,099

467,099

million yen

50,82750,91050,51250,56550,473%[35.3][0.2][(0.8)][0.1][(0.2)]

106,523

106,553

105,828

112,235

104,802[Period-on-period change]
Total assets

million yen[Period-on-period change]%[33.4][0.0][(0.7)][6.1][(6.6)]

Total interest-bearing liabilities

million yen

50,60050,20050,20057,00050,200Net assets per unit (Note 3)yen

108,814108,993108,140

108,253

108,056

Net income per unit (Note 2)

yen

2,983

3,158

2,304

2,418

2,220

Total distribution

million yen

1,391

1,475

1,076

1,129

1,037

Distribution per unit

yen

2,979

3,158

2,305

2,418

2,221

yen

[2,979][3,158][2,305][2,418][2,221][Distribution in excess of earnings per unit]
Ratio of ordinary income to total assets(Note 3)
Annualized

yen

[－]

[－]

[－]

[－]

[－]

Return on equity (Note 3)[Distribution of earnings per unit]

%

1.5

1.4

1.0

1.0

1.0

%

[3.0]

[2.7]

[2.0]

[2.1]

[1.9]

%

3.1

2.9

2.1

2.2

2.1

Annualized

%

[6.3]

[5.8]

[4.3]

[4.4]

[4.1]

Equity ratio (Note 3)

%

47.7

47.8

47.7

45.1

48.2

%

[0.7]

[0.1]

[(0.0)][(2.7)]

[3.1]

%

100.0

100.0

100.0

100.0

100.0

days

181

184

181

184

182

[Period-on-period change]
Payout ratio (Note 3)[Other reference information]
Days of operation
Number of investment properties at end of
periodDepreciation

properties

14

14

14

15

16

million yen

306

309

296

320

315

Capital expenditures

million yen

73

83

212

219

111

Leasing NOI (Net Operating Income) (Note 3)

million yen

2,112

2,260

1,849

1,797

1,535

FFO (Funds from Operation) (Note 3)

million yen

1,698

1,785

1,372

1,286

995

yen

3,635

3,821

2,938

2,753

2,131

%

47.5

47.1

47.4

50.8

47.9

FFO per unit (Note 3)
Ratio of interest-bearing liabilities to total
assets at end of period (LTV) (Note 3)(Note 1)
(Note 2)
(Note 3)

Consumption tax is not included in operating revenue, etc.
Net income per unit is calculated by dividing net income by daily weighted average number of investment units (6th fiscal period: 466,286 units; 7th fiscal period:
467,099 units; 8th fiscal period: 467,099 units; 9th fiscal period: 467,099 units; 10th fiscal period: 467,099 units).
The indicators are calculated by using the following formulas.
Net assets per unit

Net assets / total number of investment units issued and outstanding

Ratio of ordinary income to total assets

Ordinary income / [(total assets at beginning of period + total assets at end of period) / 2] × 100

Return on equity

Net income / [(net assets at beginning of period + net assets at end of period) / 2] × 100

Equity ratio

Net assets at end of period / total assets at end of period × 100
Distribution per unit (excluding distribution in excess of earnings) / net income per unit × 100
The payout ratio for the 6th fiscal period is calculated by the following formula, as the number of investment
units during the period changed due to issuance of new investment units in the period:
Total distribution (excluding distribution in excess of earnings) / net income × 100
Operating revenue from real estate rent business - operating expenses from real estate rent business +depreciation
Net income + depreciation - gain or loss on sale of real estate properties

Payout ratio

Leasing NOI (Net Operating Income)FFO (Funds from Operation)
FFO per unit
Ratio of interest-bearing liabilities to total
assets at end of period (LTV)(Note 4)(Note 5)

FFO / total number of investment units issued and outstanding
Balance of interest-bearing liabilities at end of period / total assets at end of period × 100

The amount obtained by subtracting the deduction from unitholders' capital from unitholders’ capital.
Unless otherwise stated, the figures less than the specified unit are rounded down for monetary amounts and rounded off to the nearest specified unit forpercentage figures in this report.

-3-

(2) Asset Management Review for the Fiscal Period
1) Brief History of the Investment Corporation
SANKEI REAL ESTATE was incorporated under the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951, as amended; hereinafter, the“Investment Trusts Act”) with Sankei Building Asset Management Co., Ltd. (hereinafter, the “Asset Management Company”) as the organizer and investments
in capital of 100 million yen (1,000 units) on November 19, 2018, and completed the registration with the Kanto Local Finance Bureau pursuant to Article
187 of the Investment Trusts Act on December 17, 2018 (Registration No. 140 with the Director-General of the Kanto Local Finance Bureau). Later, SANKEIREAL ESTATE was listed on the Real Estate Investment Trust Securities Market of Tokyo Stock Exchange, Inc. (hereinafter, the “Tokyo Stock Exchange”) on
March 12, 2019 (TSE code: 2972).
In October 2023, SANKEI REAL ESTATE converted from an office-building-oriented REIT to a comprehensive REIT due to some changes in its management
guidelines of the Asset Management Company.
As of the last day of the fiscal period under review (February 29, 2024), the total number of investment units issued and outstanding was 467,099 units
and unitholders’ capital (net) was 49,435 million yen.

2) Management Environment
In the fiscal period under review (fiscal period ended February 2024), although the Japanese economy continued to experience high prices due to the soaring
global prices of resources, energy, and raw materials, as well as the depreciation of the yen due to the difference in interest rates between Japan and theUnited States, the effects of these factors have been gradually subsiding. At the same time, the employment situation has been improving, and consumption
trends are also on a path to recovery. As a result of these changes in economic conditions, the accommodative monetary policy that had been in place formany years was overhauled, and in addition to the lifting of negative interest rates, yield curve control was also removed, making a step toward monetarynormalization. In response to these environmental changes, the Nikkei Stock Average has reached a new all-time high in the domestic financial instruments
market, while the TSE REIT index has shown a soft trend. The situation overseas is unpredictable, such as the situation in Ukraine and the Middle East, andthe slowing trend of the Chinese economy. In addition, price trends and employment conditions in the United States, which had been showing stable trend
for a time from the economic and financial side, are still unsettled, and therefore, the situation requires continued attention.
In this economic environment, the large-scale supply of new office buildings in the Tokyo metropolitan area last year in the office building market, whichis the main investment target of SANKEI REAL ESTATE, has been steadily clearing, and the vacancy rate has been improving in some regions, in combination
with the gradual increase in the number of re-locations for expansion and the increase in floor space within the facility due to the return to offices. However,such movements are limited, as there are regional differences, and due to concerns about potential secondary vacancies brought about by large amounts of
new supply, the level of contracted rents has not improved.
Among the core asset group (Note), SANKEI REAL ESTATE is currently investing in the hotel market and the logistics market. In the hotel market, the total
number of guests and the occupancy rate of guest rooms according to the government office survey on lodging and travel have remained strong, partly
exceeding the pre-COVID-19 levels, against the backdrop of a rapid recovery in inbound demand. As for the logistics market, it is necessary to pay close
attention to the so-called 2024 problem, which requires various measures due to the introduction of overtime work hour regulations for driving workers,
etc., but the logistics market continues to expand, as an increasing number of businesses are expanding their supply networks in response to this problem.
(Note) “Core asset group” refers to hotels, logistics facilities, and residential facilities (housing, student residences, health care facilities, and other asset
types with residential functions).

3) Management Performance
SANKEI REAL ESTATE started to review its portfolio in March 2023, and has implemented a large-scale portfolio rebalance following some changes to the
Asset Management Company’s management guidelines in October 2023. We transferred Shinagawa Seaside TS Tower in order to respond to anticipatedstructural changes in demand for office buildings and to mitigate and eliminate the risk of a decline in revenues, and also transferred BREEZÉ TOWER, which
has sufficient unrealized gains but is expected to see higher maintenance costs in the future (sale price (Note 1): a total of 34,095 million yen). Using this asa source of capital, we acquired three hotel properties (Hotel Intergate Kyoto Shijo Shinmachi, Hotel Intergate Kanazawa and GRIDS PREMIUM Hotel Osaka
Namba) for a total acquisition price (Note 1) of 16,850 million yen. As a result of these measures, the portfolio of SANKEI REAL ESTATE as of the end of thecurrent fiscal period is 16 properties and the size of assets (total acquisition price) is 86,077 million yen.
As of the end of the current fiscal period, we are still in the process of rebalancing our portfolio to convert to a comprehensive REIT. As for the management
performance at the end of the fiscal period, the occupancy rate (Note 2) was 96.3%, and operating revenue was 7,778 million yen, an increase of 182.7%
from the previous fiscal period, reflecting a gain on sale of real estate properties. The appraisal value as of the last day of the fiscal period under review was
90,280 million yen.
In addition, SANKEI REAL ESTATE decided to acquire “Vessel Hotel Campana Susukino” (40% co-ownership interest) and “S-GATE NIHONBASHI-HONCHO”(additional acquisition of 49% co-ownership interest) at a total acquisition price of 10,370 million yen on February 29, 2024, and acquired them on March 1,2024 and April 1, 2024, respectively.
SANKEI REAL ESTATE has sought to improve satisfaction through reinforcement and enhancement of relations with existing tenants, aiming at expansionof revenue and stable growth of earnings from assets under management as in the previous fiscal period. For existing tenants approaching contract renewal,
efforts were made to carefully explain the differences in the unique situation under the COVID-19 pandemic and the current trends of the leasing market,
and some tenants came to understand to a certain extent the upward rent revision. In addition, repairs and capital expenditures were narrowed down tothose that contribute to maintenance and improvement of the competitiveness of assets under management.
With the acquisition of three new properties during the period, the number of hotels owned by SANKEI REAL ESTATE is now five in total as of the end of
the period. The two properties we already own (Hotel Intergate Tokyo Kyobashi and Hotel Intergate Hiroshima) contribute to the stability of our portfolio
income by continuing to secure promised revenue even during the COVID-19 pandemic, based on the current contract for fixed rent. In addition, since all of
the three newly acquired properties (Hotel Intergate Kyoto Shijo Shinmachi, Hotel Intergate Kanazawa and GRIDS PREMIUM Hotel Osaka Namba) are locatedin high-profile tourist destinations and adopt both fixed and variable rents, they are expected to contribute to an increase in profitability depending onmarket conditions, such as a recovery in inbound tourism and increases in occupancy and the average unit price of guest rooms.
In the logistics market, demand for logistics facilities has been steadily increasing, not only because of activated distribution but also because of the needto develop logistics networks triggered by the 2024 problem. SANKEI REAL ESTATE will continue to strive to improve its presence by building on its
management performance in this field.
Further, SANKEI REAL ESTATE, along with the Asset Management Company, continued to implement management that carefully consider ESG, meaning
the Environment, Social and Governance, for the purpose of sustainability of society and increasing the medium- to long-term unitholder value based on the“Sustainability Policy” in the Asset Management Company’s management guidelines during the fiscal period.

-4-

In December 2023, three of our properties (S-GATE NIHONBASHI-HONCHO, S-GATE AKIHABARA and S-GATE AKASAKA) were evaluated by the BuildingHousing Energy-efficiency Labeling System (BELS). As a result, SANKEI REAL ESTATE has acquired environmental certification for a total of nine assets undermanagement (four properties certified by DBJ Green Building and five properties rated by BELS). And, as an investment corporation, we have received 2 stars
and a Green Star in the GRESB Real Estate Rating.
(Note 1)

(Note 2)“Acquisition price” and “sale price” indicate the purchase price of real estate and trust beneficiary rights stated in each purchase and sale agreement pertaining to the assets held by
SANKEI REAL ESTATE (real estate or trust beneficiary rights in real estate as trust assets; hereinafter collectively referred to as “Assets under Management”), rounded down to the nearest
one million yen. The sale and purchase prices do not include consumption tax, local consumption tax, and various expenses required for acquisition or transfer. The same shall apply
hereinafter.
“Occupancy rate” is the ratio of total leased area to total leasable area, rounded to one decimal place. The total leasable area and the total leased area are calculated from the area
equivalent to the equity interest of SANKEI REAL ESTATE in each asset under management.

4) Overview of Fund Procurement
During the fiscal period under review, we made a partial early repayment of short-term borrowings on September 29, 2023, using the partial transfer ofproperties carried out on August 31, 2023, as the source of repayment, and made an early repayment of short-term borrowings on February 29, 2024, using
the transfer of two properties carried out on January 31, 2024, as the source of repayment.
As a result, as of the end of the fiscal period under review, the balance of loans outstanding was 50,200 million yen and the ratio of interest-bearing
liabilities to total assets (hereinafter, “LTV”) was 47.9%.

5) Overview of Business Performance and Distribution
As a result of the management described above, business performance in the fiscal period under review was operating revenue of 7,778 million yen, operating
income of 1,229 million yen, ordinary income of 1,038 million yen, and net income of 1, 037 million yen.
Concerning distribution, in accordance with SANKEI REAL ESTATE’s cash distribution policy (Article 36 of the articles of incorporation), SANKEI REAL ESTATE
intends to have the maximum amount of distribution of earnings included in deductible expenses by application of special provisions for taxation on
investment corporations (Article 67-15 of the Act on Special Measures Concerning Taxation (Act No. 26 of 1957, as amended)). For the fiscal period underreview, the decision was made to distribute 1,037,426,879 yen, which is the entire amount of unappropriated retained earnings, excluding fractions of
distribution per unit of less than 1 yen. This resulted in distribution per unit of 2,221 yen.

(3) Capital Increases
Changes in the total number of investment units issued and outstanding and unitholders’ capital over the past five years are as follows:

Date

Description

Sep. 2, 2019
Sep. 26, 2019
Sep. 1, 2021
Sep. 29, 2021
Nov. 22, 2021
(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)

Total number of investment units
issued and outstanding (units)
Increase
Balance(Decrease)

Capital increase throughpublic offering
Capital increase throughthird-party allotment
Capital increase throughpublic offering
Capital increase throughthird-party allotment
Cash distribution in excessof earnings(contribution refund)Unitholders’ capital (net)(million yen) (Note 1)
Increase
Balance(Decrease)

Remarks

111,619

351,219

12,77735,902(Note 2)5,581

356,800

638

36,540(Note 3)105,047

461,847

12,287

48,828(Note 4)

5,252

467,099614

49,442(Note 5)－467,099(7)49,435(Note 6)

The amount obtained by subtracting the deduction from unitholders’ capital from unitholders’ capital.
New investment units were issued through public offering at an issue price of 118,734 yen (paid-in amount of 114,471 yen) per unit for the purpose of procuring funds for acquisition of new
properties.
New investment units were issued through third-party allotment accompanying the capital increase through public offering at a paid-in amount of 114,471 yen per unit.
New investment units were issued through public offering at an issue price of 121,327 yen (paid-in amount of 116,971 yen) per unit for the purpose of procuring funds for acquisition of new
properties.
New investment units were issued through third-party allotment accompanying the capital increase through public offering at a paid-in amount of 116,971 yen per unit.
A cash distribution in excess of earnings of 20 yen per unit (contribution refund that falls under distribution through the reduction in unitholders’ capital for tax purposes) as the cash
distribution for the 5th fiscal period (ended August 2021) resolved at SANKEI REAL ESTATE’s board of directors’ meeting held on October 15, 2021, and payment of the distribution commenced
on November 22, 2021.

[Changes in market price of investment certificates]
The highest and lowest (closing price) market prices on the Real Estate Investment Trust Securities Market of the Tokyo Stock Exchange, on which SANKEI REALESTATE’s investment certificates are listed, in each fiscal period are as follows:
Fiscal period

6th fiscal period

7th fiscal period

8th fiscal period

9th fiscal period

10th fiscal period

Closing of accounts

February 2022

August 2022

February 2023

August 2023

February 2024

Highest (yen)131,300

111,900

99,70096,30095,500

Lowest (yen)107,400

93,30086,40080,00084,800-5-

(4) Performance of Distribution, Etc.
Concerning distribution for the fiscal period under review, SANKEI REAL ESTATE decided to distribute the entire amount of unappropriated retained earnings,
excluding fractions of distribution per unit of less than 1 yen, with the intent of having the maximum amount of distribution of earnings included in deductible
expenses by application of special provisions for taxation on investment corporations (Article 67-15 of the Act on Special Measures Concerning Taxation). As
a result, the distribution per unit was 2,221 yen.
Fiscal period

6th fiscal period

7th fiscal period

8th fiscal period

9th fiscal period

10th fiscal periodBusiness period

From: Sep. 1, 2021 From: Mar. 1, 2022 From: Sep. 1, 2022 From: Mar. 1, 2023 From: Sep. 1, 2023
To: Feb. 28, 2022 To: Aug. 31, 2022 To: Feb. 28, 2023 To: Aug. 31, 2023 To: Feb. 29, 2024

Total unappropriated retained earnings(thousand yen)

1,391,567

1,475,277

1,076,805

1,129,754

1,037,578

Retained earnings(thousand yen)

80

178

141

309

151

Total cash distributions(thousand yen)

1,391,487

1,475,098

1,076,663

1,129,445

1,037,426[Distribution per unit](yen)[2,979][3,158][2,305][2,418][2,221]

1,391,487

1,475,098

1,076,663

1,129,445

1,037,426[Total distribution of earnings](thousand yen)[Distribution of earnings per unit](yen)[2,979][3,158][2,305][2,418][2,221][Total contribution refund](thousand yen)

－

－

－

－

－

[Contribution refund per unit]

(yen)

[－]

[－]

[－]

[－]

[－]

(thousand yen)

－

－

－

－

－

(yen)

[－]

[－]

[－]

[－]

[－]

(thousand yen)

－

－

－

－

－

(yen)

[－]

[－]

[－]

[－]

[－]

Of the total contribution refund, total
distribution of the reserve for temporary
difference adjustments[Of the contribution refund per unit,
distribution per unit of the reserve fortemporary difference adjustments]

Of the total contribution refund, total
distribution through the reduction inunitholders’ capital for tax purposes[Of the contribution refund per unit,
distribution per unit through the
reduction in unitholders’ capital for tax
purposes](Note)

Amounts are rounded down to the nearest unit.

(5) Future Asset Management Policy and Issues to Be Addressed
General Management Outlook
The imbalances in supply and demand and the economic recovery overseas have led to rapid price increases in goods and services, and the U.S. and Europe
have been quick to tighten monetary policy. As a result, the domestic economy has been plagued by cost-push inflation, but the effects are now starting toease.
However, the U.S. market, which had started to show stable trend for a while, has turned to a situation where the direction is uncertain again. Although
domestic monetary policy has also taken steps towards normalization, there has been some indication that it is not yet ready to engage in a full-scale rate
hike, while long-term interest rates are gradually rising.
In this situation where the international direction is uncertain, domestic real estate sales transactions, which can be done at relatively low costs, arebooming. But the management environment is starting to look tough, with expected yields on the decline.
Last year’s office building market showed signs of recovery, triggered by the removal of movement restrictions associated with reclassifying COVID-19 to a
Category 5 disease. There have been concerns about an oversupply of large new buildings as a so-called “2023 problem.” However, due to the trend of tenants
returning to offices and demand for improvements in the office environment resulting from work style reforms, such large new buildings have made relatively
good progress in attracting tenants. On the other hand, in existing buildings, we are seeing large-scale returns of floors due to office reorganization, and cases
are beginning to emerge where it is difficult to backfill secondary vacancies.
In 2024, a relatively stable supply-demand relationship is expected without a large new supply, and if the secondary vacancy clearing proceeds smoothly,
the rent for contracts due to tenant competition is expected to rise. However, in the next year, 2025, a large supply is expected again, and the supply-demand
trend needs to be monitored closely.
As for the hotel market, the number of foreign visitors to Japan has increased rapidly since October 2022. In November of last year, the number of visitors
to Japan for tourism purposes and the total number of visitors to Japan exceeded the same month of 2019 (provisional figures). Although some countries andregions, such as China, have yet to see the number of visitors to Japan recover, the businesses are returning to their pre-coronavirus boom. The businessenvironment is expected to continue to be favorable for the two hotel properties that SANKEI REAL ESTATE has owned so far, and stable revenues based on
fixed rents are expected. For the three newly acquired properties, revenues are expected to improve in accordance with market conditions by using both fixedand variable rents.
For the logistics market, further revitalization is expected, supported by the expansion of the e-commerce market and solid demand, and stable growth isexpected to continue, as efforts are being made to expand the distribution network in response to the 2024 problem related to labor issues in the logistics
market. The facilities owned by SANKEI REAL ESTATE have fixed rent based on fixed-term building lease agreements with tenants, and stable revenues are
expected.

-6-1) External Growth Strategy
As a result of the partial change in the management guidelines of the Asset Management Company implemented in October 2023, SANKEI REAL ESTATE
shifted from an office building-oriented REIT to a comprehensive REIT. And by reorganizing sub-assets that had previously served complementary roles into
the core asset group, it decided to aim for sustainable growth through these assets as well.
Based on the change in investment policy, the portfolio rebalancing implemented during the fiscal period changed the investment ratio by asset type from
82.3% for office buildings and 17.7% for sub-assets in the fiscal period ended August 2023 to 59.3% for office buildings and 40.7% for the core asset group.
Aiming to become a REIT that can achieve sustainable growth, we will strive to maintain our portfolio and improve portfolio quality through continuous
rebalancing in order to further strengthen our portfolio.
In addition, at the end of the fiscal period, SANKEI REAL ESTATE, with the support of its sponsor, concluded a contract to acquire a third-party property forthe first time. With regard to the acquisition of properties in the future, SANKEI REAL ESTATE will make maximum use of the sponsor support while carefully
monitoring real estate investment market conditions, etc., and will continue external growth by acquiring properties owned by third pa rties utilizing thesourcing capabilities of Sankei Building as well as Sankei Building’s portfolio.

2) Internal Growth Strategy
SANKEI REAL ESTATE aims for steady internal growth through reinforcement of the relations with existing tenants and improvement in tenant satisfaction.
Specifically, we will attempt to raise rents upon contract renewal if there is a significant deviation from market rent and continue to implement strategicleasing such as activities to extend the cancellation notification period from tenants and disperse end dates of rental contracts from the viewpoint oftermination risk for properties where the end dates of multiple tenants are the same. Furthermore, we will also continue to actively work to improve tenantsatisfaction by conducting customer satisfaction surveys, improving the quality of hygiene, and carrying out planned maintenance and repairs.
SANKEI REAL ESTATE will utilize the Sankei Building Group’s comprehensive operation and management functions ranging from real estate planning anddevelopment to lease-up, operation, and management through collaboration within the Sankei Building Group with Sankei Building at the core.
In addition, SANKEI REAL ESTATE will execute the following measures, etc. to aim for greater revenue and stable growth of earnings from assets undermanagement.
(a) Strive to provide services for tenants’ comfortable use while strengthening and enhancing tenant relations in order to maintain and improve tenantsatisfaction so as to maintain and improve the occupancy rate and rent of assets under management.
(b) Seek to maintain and improve the market competitiveness of assets under management through planning and implementation of repairs and capital
expenditures by taking into consideration the state and characteristics of assets under management, real estate market conditions, tenant needs, andother factors and carefully examining them.
(c) Strive to maintain and improve earnings by conducting agile leasing activities with a continual grasp of leasing market trends.
(d) Adopt ongoing initiatives to reduce operating and management costs and consider the environment by periodically verifying the validity of operations,management level, and costs of assets under management. In doing so, the balance with the market competitiveness of assets under management
and perspective of maintaining and improving tenant satisfaction are taken into consideration.
(e) Conduct investment conscious of ESG, such as reduction of the environmental impact of assets under management and cooperation with external
stakeholders.

3) Financial Strategy
SANKEI REAL ESTATE will conduct appropriate and sound financial management while considering agility of financing activities, stability of cash flows, andother matters in order to secure stable earnings and steady growth of assets under management over the medium to long term.
In addition, to secure financial soundness, the basic policy shall be to set the upper limit for the LTV at 60% in principle (however, the LTV may temporarily
exceed the upper limit for the purpose of new asset acquisition, etc.). As a rule, SANKEI REAL ESTATE will maintain an approximate range of 40% to 50%
during normal operations.
(a) Equity Financing
Issuance of new investment units shall be performed in an agile manner with due consideration to investment unit dilution while comprehensively
taking into account capital market trends, the financial environment, timing of acquisition of real estate, etc. to be newly acquired, ratio of interestbearing liabilities to total assets and other factors.
(b) Debt Financing
Upon borrowing, etc., fund procurement shall be executed in an appropriate manner by taking into account the balance between interest rate trends,
market levels, financial agility, long-term business relationships, and security, and by considering the borrowing period, fixed or floating interest rate,
provision of collateral or not, fees, and other terms and conditions of procurement of interest-bearing liabilities.

(6) Significant Subsequent Events
Not applicable.

-7-

(Reference Information)
Acquisition of Assets
SANKEI REAL ESTATE decided to acquire real estate trust beneficiary rights on February 29, 2024, as described below, and acquired them on April 1, 2024 andMarch 1, 2024, respectively.
Asset type

Property
numberOfficebuildings

A-3

Core asset
group

B-7

Location

Acquisition
asset

S-GATE NIHONBASHI-HONCHO(additional acquisition)

Chuo-ku, Tokyo

Real estate trust
beneficiary right

Vessel Hotel Campana Susukino

Chuo-ku, Real estate trust
Sapporo-shi beneficiary right

Property name

Total (2 properties)(Note 1)
(Note 2)

(Note 3)--Acquisition price(million yen)
(Note 1)

SellerAcquisition date

7,450
(Note 2)Not disclosed (Note 3)

April 1, 2024

2,920
(Note 2)The Sankei Building Co.,Ltd.

March 1, 2024

10,370--“Acquisition price” is the sale and purchase price of each trust beneficiary right stated in the trust beneficiary right sale and purchase agreement foreach acquired asset, rounded down to the nearest million yen. The sale and purchase prices do not include consumption tax, local consumption tax
and the various expenses required for the acquisition.
The acquisition price for S-GATE NIHONBASHI-HONCHO is the figure equivalent to the (49%)* co-ownership interest additionally acquired by SANKEIREAL ESTATE. The acquisition price of Vessel Hotel Campana Susukino is the figure equivalent to the co-ownership interest (40%) acquired by SANKEIREAL ESTATE.
*
Regarding S-GATE NIHONBASHI-HONCHO, SANKEI REAL ESTATE acquired 51% of the co-ownership interest in March 2019, and acquired an
additional 49% co-ownership interest after converting it into a trust beneficiary right. Therefore, as of the date of this document, SANKEI REALESTATE holds all of the trust beneficiary rights pertaining to S-GATE NIHONBASHI-HONCHO.
The information has not been disclosed due to unavoidable circumstances, as consent for disclosure has not been obtained from the Seller.

-8-2. Overview of the Investment Corporation(1) Summary of Unitholders’ Capital
6th fiscal period

7th fiscal period

8th fiscal period

9th fiscal period

10th fiscal period(as of Feb. 28, 2022) (as of Aug. 31, 2022) (as of Feb. 28, 2023) (as of Aug. 31, 2023) (as of Feb. 29, 2024)

Total number of investment
units authorized
Total number of investment
units issued and outstanding
Unitholders’ capital (net)(Note)(units)

10,000,000

10,000,000

10,000,000

10,000,000

10,000,000(units)467,099

467,099

467,099

467,099

467,099(million yen)

49,43549,43549,43549,43549,435(persons)

10,511

14,345

14,46914,366

13,121

Number of unitholders(Note) The amount obtained by subtracting the deduction from unitholders’ capital from unitholders’ capital.

(2) Matters Related to Investment Units
The following table shows the major unitholders (Note 1) of SANKEI REAL ESTATE as of February 29, 2024.

Name

Number of investment units held
(units)Ratio to the total number ofinvestment units issued andoutstanding(%) (Note 2)

Custody Bank of Japan, Ltd. (Trust Account)

104,288

22.32

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

94,443

20.21

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

26,491

5.67

The Sankei Building Co., Ltd.

17,4793.74

JP MORGAN CHASE BANK 385771

6,722

1.43

The Bank of Yokohama, Ltd.

5,691

1.21

The Hyakujushi Bank, Ltd.

3,500

0.74

JP MORGAN CHASE BANK 385794

3,319

0.71

JP MORGAN CHASE BANK 380755

3,139

0.67

Bell House Co., Ltd.

3,105

0.66

268,177

57.41

Total
(Note 1)
(Note 2)

“Major unitholders” refers to the ten largest entities among the unitholders according to the ratio of their investment units held to the total number of investment
units issued and outstanding.
Ratio to the total number of investment units issued and outstanding is rounded down to two decimal places.

-9-(3) Matters Related to Directors, etc.
The following table shows the directors, etc. of SANKEI REAL ESTATE as of February 29, 2024.

Position

Name

Executive
Director

Total remuneration foreach position during theperiod under review(thousand yen)

Major concurrent assignments
President and Chief Executive Officer, Sankei Building AssetManagement Co., Ltd.

Yuichi Ota－

Representative, Motoyoshi Total Accounting Office
Susumu Motoyoshi

1,800
Representative Partner, Motoyoshi Research Institute LLC
Joint Representative Lawyer, Utsunomiya Shimizu & Haruki

Supervisory
Director

Adjunct Professor, Hosei University Law School
Kohmei Shimizu

1,800
Independent Director, ROBOT PAYMENT INC.
Corporate Auditor, EDGE Technology, Inc.

Independent
Auditor(Note 1)

(Note 2)
(Note 3)(Note 4)

Ernst & Young
ShinNihon LLC－

13,700None of the Executive Director or Supervisory Directors own investment units in SANKEI REAL ESTATE, either in their own name or in someone else’s name. Moreover,although they may be officers of corporations other than those mentioned above, they have no conflict of interest with SANKEI REAL ESTATE at those and the above
positions.
The remuneration for the Executive Director and Supervisory Directors are the amounts paid to them in the fiscal period under review, and the remuneration to the
Independent Auditor is the amount payable to it for audits pertaining to the fiscal period under review.
The dismissal of the Independent Auditor shall be considered in accordance with the provisions of the Investment Trusts Act. The decision to not reappoint the
Independent Auditor shall be studied by SANKEI REAL ESTATE’s Board of Directors upon comprehensively considering the audit quality, audit fee and other various
conditions.
The remuneration for independent auditors includes those for the audit of financial statements in English. Furthermore, there is no remuneration based on nonaudit services to the Accounting Auditor or to persons belonging to the same network as the Accounting Auditor.

(4) Matters Related to Directors and Officers Liability Insurance Contract
The directors and officers liability insurance contract concluded by SANKEI REAL ESTATE is as follows:
Scope of insured parties

Summary of the content of the contract(Outline of insured events)
Insurance coverage is provided for damages incurred by the insured parties should claims be madeagainst the insured parties for compensation for damages arising from acts in their capacity as
directors of SANKEI REAL ESTATE.
(Share of burden of insurance expenses)
Executive directors and supervisory
The insurance contract contains a rider covering executive directors and supervisory directors, thedirectors
insurance expenses for which are borne by the executive directors and supervisory directors. The
insurance expenses other than these are borne by SANKEI REAL ESTATE.
(Measures to ensure not to impair the propriety of the execution of duties)
Insurance coverage is not provided for cases such as damages incurred by the insured parties from
criminal acts, intentional illegal acts, etc.

(5) Asset Management Company, Asset Custodian and Administrative AgentsThe following are the asset management company, asset custodian and administrative agents of SANKEI REAL ESTATE as of February 29, 2024.
Entrustment category

Name

Asset management company

Sankei Building Asset Management Co., Ltd.

Asset custodian

Sumitomo Mitsui Trust Bank, Limited

Administrative agent (unitholder register administrator)

Mizuho Trust & Banking Co., Ltd.

Administrative agent (operation of administrative instruments)

Mizuho Trust & Banking Co., Ltd.

Administrative agent (accounting, bookkeeping)Reiwa Accounting Holdings Co., Ltd.

Administrative agent (taxes)

Reiwakaikeisha Tax Corporation- 10 -

3. Status of Assets under Management of the Investment Corporation(1) SANKEI REAL ESTATE’s Asset Structure
9th fiscal period(as of Aug. 31, 2023)
Type ofasset

Real estate

Real estatein trust(Note 2)
(Note 3)(Note 4)

Total amountheld(million yen)
(Note 2)

Greater Tokyo, Greater Osaka andGreater Nagoya
Office buildings Cities designated by government
ordinance (excluding above), core cities
and major regional cities
Greater Tokyo, Greater Osaka andGreater Nagoya
Core asset group Cities designated by government
ordinance (excluding above), core cities
and major regional cities
Greater Tokyo, Greater Osaka andGreater Nagoya
Office buildings Cities designated by government
ordinance (excluding above), core cities
and major regional cities
Greater Tokyo, Greater Osaka andGreater Nagoya
Core asset group Cities designated by government
ordinance (excluding above), core cities
and major regional cities
Greater Tokyo, Greater Osaka andGreater Nagoya
HotelsCities designated by government
ordinance (excluding above), core cities
and major regional cities

As a percentage of
total assets(%) (Note 3)

Total amountheld(million yen)
(Note 2)

As a percentage of
total assets(%) (Note 3)

2,618

2.3

2,615

2.5

－

－

－

－

－

－

－

－

－

－

－

－

72,64664.7

38,87937.1

10,167

9.1

10,141

9.7

8,871

7.9

27,882

26.6

9,154

8.2

7,110

6.8

8,871

7.9

22,595

21.6

3,847

3.4

7,110

6.8

5,307

4.7

5,287

5.0

-

-

-

-

Subtotal

103,458

92.2

86,62982.7

Deposits and other assets

8,777

7.8

18,173

17.3

Total assets

112,235

100.0

104,802

100.0

Logistics
facilities(Note 1)

Geographic area
(Note 1)

Asset type10th fiscal period(as of Feb. 29, 2024)

Greater Tokyo, Greater Osaka andGreater Nagoya
Cities designated by government
ordinance (excluding above), core cities
and major regional cities“Greater Tokyo” refers to Tokyo, Kanagawa Prefecture, Saitama Prefecture and Chiba Prefecture.
The “Greater Osaka” refers to Osaka Prefecture, Hyogo Prefecture and Kyoto Prefecture, and is limited to ordinance-designated cities, core cities and major regional cities.
The “Greater Nagoya” refers to Aichi Prefecture, Gifu Prefecture and Mie Prefecture, and is limited to ordinance-designated cities, core cities and major regional cities.
“Core cities” refers to cities with a population of 200,000 or more (excluding Greater Tokyo, Greater Osaka and Greater Nagoya, and other cities designated by government
ordinance).
“Major regional cities” are cities, towns and villages with a population of less than 200,000 that have been determined by the Asset Management Company to have a certain levelof demand for specific asset types.
“Total amount held” is based on the carrying amount (in the case of real estate and real estate in trust, the depreciated book value), rounded down to the nearest million yen.
Furthermore, the total amount held for real estate in trust with hotel as the asset type includes the book value of movables incidental to hotels.
“As a percentage of total assets” is rounded to one decimal place.
These are stated based on the category after the change of the management guideline dated October 16, 2023. Accordingly, the “Total amount held” and “As a percentage of total
assets” for “SANKEILOGI Settsu,” which were listed in “Cities designated by government ordinance (excluding the above), core cities and major regional cities” in the previous period
are shown in the “Greater Tokyo, Greater Osaka and Greater Nagoya” for both the previous period and the current period.

- 11 -

(2) Major Assets Held
The following is an overview of the major assets (top 10 properties on a book value basis) held by SANKEI REAL ESTATE as of February 29, 2024.
Book value(million yen)
(Note 1)

Total leasable
area
(m2)
(Note 2)

Total leased
area
(m2)
(Note 2)

Occupancy
rate(%)(Note 2)

Ratio to total
rent businessrevenue (%)(Note 3)Main use

Hitachi Kyushu Building

10,141

26,513.33

26,513.33

100.0

Not disclosed(Note 6)

Office buildings

Hotel Intergate Tokyo Kyobashi

8,844

6,006.53

6,006.53

100.0

8.8

HotelsGRIDS PREMIUM Hotel Osaka Namba (Note 4)

7,883

4,353.79

4,353.79

100.0

1.3

Hotels
Office buildings

Property name

S-GATE AKASAKA

7,030

3,308.10

3,308.10

100.0

Not disclosed(Note 6)

S-GATE NIHONBASHI-HONCHO (Note 5)

6,617

3,171.83

3,171.83

100.0

6.9

Office buildings

Hibiya Sankei Building

6,054

3,439.61

3,439.61

100.0

8.5

Office buildings

Hotel Intergate Kyoto Shijo Shinmachi (Note 4)

5,867

6,029.40

6,029.40

100.0

0.8

Hotels

Omori Park Building

5,474

7,469.72

4,902.82

65.6

5.1

Office buildings

SANKEILOGI Settsu

5,287

14,748.33

14,748.33

100.0

5.1

Logistics facilities

Hatchobori Sankei Building
Total(Note 1)
(Note 2)

(Note 3)(Note 4)(Note 5)(Note 6)

4,979

5,594.90

5,594.90

100.0

7.5

Office buildings

68,18080,635.54

78,068.64

96.8

61.8

－

“Book value” is the depreciated book value for each portfolio assets of February 29, 2024, rounded down to the nearest million yen. The same shall apply hereinafter.
Figures for “total leasable area,” “total leased area” and “occupancy rate” are based on the data as of February 29, 2024. Furthermore, “total leasable area” is the area (excluding certain
incidental areas such as warehouses, signboards, parking lots, etc. which are not the main asset type) expected to be leasable based on the lease agreement, drawing, etc. of the buildings
for each portfolio asset, rounded down to two decimal places. “Total leased area” is the total leased area (excluding certain incidental areas such as warehouses, signboards, parking lots, etc.
which are not the main asset type) stated in the lease agreement (excluding lease agreements under which the lease period is yet to commence) for each portfolio asset, rounded down to
two decimal places. With respect to the portion which comes under the pass-through-type master lease agreement, the total area for which the lease agreement has actually been concluded
with the end tenant and for which the lease period has commenced is indicated, rounded down to two decimal places. “Occupancy rate” is the ratio of total leased area to total leasable areafor each portfolio asset, rounded to one decimal place. In addition, “occupancy rate” in the total column is the ratio of the sum total of total leased area to the sum total of total leasable areafor each portfolio asset, rounded to one decimal place. The same shall apply for occupancy rate hereinafter.
“Ratio to total rent business revenue” is rounded to one decimal place. The same shall apply hereinafter.
“GRIDS PREMIUM Hotel Osaka Namba” and “Hotel Intergate Kyoto Shijo Shinmachi” were acquired on February 1, 2024. “Ratio of rental revenue to total rental revenues” is calculated basedon the rental revenues received from each property from that date until February 29, 2024.
The book value, the total leasable area and the total leased area are the figures equivalent to the co-ownership interest (51% for “S-GATE NIHONBASHI-HONCHO”) held by SANKEI REALESTATE as of February 29, 2024.
Not disclosed because such contains information for which consent for disclosure has not been obtained from the tenant, relevant party, etc. or information from which confidential
information can be derived.

- 12 -

(3) Real Estate Assets in the Portfolio
The following table shows the overview of the assets held by SANKEI REAL ESTATE as of February 29, 2024.

Property nameTokyo Sankei Building (Note 3)

Form of ownership(Note 1)

Location

1-7-2 Otemachi, Chiyoda-ku, Tokyo

S-GATE NIHONBASHI-HONCHO (Note 3)

1-9-1 Nihonbashi-Honcho, Chuo-ku, Tokyo

S-GATE AKIHABARA

2-4-6 Higashi-Kanda, Chiyoda-ku, Tokyo

Hibiya Sankei Building

1-9-1 Yurakucho, Chiyoda-ku, Tokyo

Hatchobori Sankei Building

2-7-1 Hatchobori, Chuo-ku, Tokyo

Toyo Park Building

5-29-17 Toyo, Koto-ku, Tokyo

Omori Park Building

1-6-1 Omori-Honcho, Ota-ku, Tokyo

S-GATE AKASAKA

6-2-4 Akasaka, Minato-ku, Tokyo

Miyazakidai Garden Office2-6-10 Miyazaki, Miyamae-ku, Kawasaki-shi, Kanagawa

Hitachi Kyusyu Building

2-1-1 Momochihama, Sawara-ku, Fukuoka-shi, Fukuoka

Hotel Intergate Tokyo Kyobashi

3-7-8 Kyobashi, Chuo-ku, Tokyo

Hotel Intergate Hiroshima

5-16 Teppocho, Naka-ku, Hiroshima-shi, Hiroshima

SANKEILOGI Settsu

4-1-5 Tsuruno, Settsu-shi, Osaka

Hotel Intergate Kyoto Shijo Shinmachi

387 Mukadeyacho, Shinmachidori Nishikikojiagaru,
Nakagyo-ku, Kyoto-shi, Kyoto

Hotel Intergate Kanazawa

2-5 Takaokamachi, Kanazawa-shi, Ishikawa

GRIDS PREMIUM Hotel Osaka Namba

1-7-7 Nanbanaka, Naniwa-ku, Osaka-shi, Osaka
Total(Note 1)
(Note 2)

(Note 3)

Real estate
Real estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary rightReal estate trust
beneficiary right

Period-end
appraisal value(million yen)
(Note 2)

Book value(million yen)

2,560

2,615

7,790

6,617

2,720

2,014

6,740

6,054

5,150

4,979

3,490

3,871

5,260

5,474

7,400

7,030

2,710

2,837

10,30010,141

9,360

8,844

4,200

3,821

5,550

5,287

5,890

5,867

3,290

3,288

7,870

7,883

90,28086,629“Real estate trust beneficiary right” refers to trust beneficiary right that has real estate as main trust assets.
“Period-end appraisal value” indicates the appraisal value or the price in the price survey that is conducted using the method similar to that used by real estate appraisers, with the last dayof the fiscal period as the survey date, based on SANKEI REAL ESTATE’s articles of incorporation and the “Regulations on Calculations of Investment Corporations” (Cabinet Office Order No.
47 of 2006, as amended).
The period-end appraisal value and the book value are figures equivalent to the co-ownership interest (2% for “Tokyo Sankei Building” and 51% for “S-GATE NIHONBASHI-HONCHO”) held by
SANKEI REAL ESTATE as of February 29, 2024.

- 13 -

The following table shows the overview of the rent business for each of the assets under management held by SANKEI REAL ESTATE.

Property name

Number oftenants(at end of
period)(Note 1)

9th fiscal period
From: Mar. 1, 2023
To: Aug. 31, 2023
OperatingOccupancy revenue from Ratio to total
rate
real estate rent business(at end ofrent business revenue (%)
period)(during period)(%)(million yen)
(Note 2)

Number oftenants(at end of
period)(Note 1)

10th fiscal period
From: Sep. 1, 2023
To: Feb. 29, 2024
OperatingOccupancy revenue from
Ratio to total
rate
real estate
rent business(at end ofrent businessrevenueperiod)(during period)(%)(%)(million yen)
(Note 2)

Tokyo Sankei Building

48

99.8

59

2.3

48

99.8

62

2.6

BREEZÉ TOWER (Note 4)

41

96.7

525

20.3

－

－

437

18.5

S-GATE NIHONBASHI-HONCHO

2

100.0

157

6.1

2

100.0

163

6.9

S-GATE AKIHABARA

6

100.0

69

2.7

5

85.3

70

3.0

Hibiya Sankei Building

11

100.0

202

7.8

11

100.0

200

8.5

Hatchobori Sankei Building

10

100.0

177

6.9

10

100.0

176

7.5

Toyo Park Building

6

75.1

91

3.5

6

75.1

87

3.7

Shinagawa Seaside TS Tower(Note 4)1

9.6

Omori Park Building

8

79.2

S-GATE AKASAKA

2

100.0

Miyazakidai Garden Office

8

100.0

Not disclosed Not disclosed(Note 3)(Note 3)
137

92

1

100.0

Hotel Intergate Tokyo Kyobashi

1

100.0

206

Hotel Intergate Hiroshima

1

100.0

SANKEILOGI Settsu

1

100.0

－

Total
(Note 1)

(Note 2)
(Note 3)(Note 4)(Note 5)

3.6

Not disclosed Not disclosed(Note 3)(Note 3)

Hitachi Kyusyu Building

Hotel Intergate Kyoto Shijo
Shinmachi (Not 5)
Hotel Intergate Kanazawa (Not
5)
GRIDS PREMIUM Hotel Osaka
Namba (Not 5)

5.3

Not disclosed Not disclosed(Note 3)(Note 3)

－

－

7

65.6

2

100.0

8

100.0

Not disclosed Not disclosed(Note 3)(Note 3)121

5.1

Not disclosed Not disclosed(Note 3)(Note 3)92

3.9

Not disclosed Not disclosed(Note 3)(Note 3)

1

100.0

8.0

1

100.0

206

8.8

118

4.6

1

100.0

118

5.0

99

3.8

1

100.0

119

5.1

－

－

－

1

100.0

19

0.8

－

－

－

－

1

100.0

12

0.5

－

－

－

－

1

100.0

30

1.3

147

85.6

2,586

100.0

106

96.3

2,361

100.0

“Number of tenants” indicates the total number of tenants of the respective portfolio assets as of February 29, 2024, based on the lease agreement of the relevant assets. When a master leaseagreement has been concluded for the assets, however, the total number of end tenants is indicated for the portion covered by the pass-through-type master lease agreement among such
assets. In cases in which one tenant has concluded lease agreements of different use types for the same single asset, the tenant shall be counted as one for each use type.
Figures for “operating revenue from real estate rent business” are rounded down to the nearest million yen.
Not disclosed because such contains information for which consent for disclosure has not been obtained from the tenant, relevant party, etc. or information from which confidential information
can be derived.
“BREEZÉ TOWER” and “Shinagawa Seaside TS Tower” were transferred on January 31, 2024.
“Hotel Intergate Kyoto Shijo Shinmachi,” “Hotel Intergate Kanazawa” and “GRIDS PREMIUM Hotel Osaka Namba” were acquired on February 1, 2024. “Real estate rental revenue (during theperiod)” and “ratio of rental revenue to total rental revenues” are calculated based on the rental revenue received from each property from that date until February 29, 2024.

(4) Schedule of Renewable Energy Generation Facilities in the Portfolio
Not applicable.

(5) Schedule of the Rights to Operate Public Facilities, Etc. in the Portfolio
Not applicable.

(6) Status of Other Assets
Real estate and trust beneficiary rights that have real estate as trust assets, etc. held by SANKEI REAL ESTATE are listed altogether on the aforementioned (3)Real estate assets in the portfolio.

1) Schedule of Securities Incorporated in the Portfolio
Not applicable.

2) Status of Contract Amounts, Etc. and Fair Value of Specified Transactions
Not applicable.

(7) Status of Assets Held in Each Country/Region
Not applicable for any country or region outside Japan.

- 14 -

4. Capital Expenditures for Real Estate Held(1) Schedule of Capital Expenditures
Of scheduled capital expenditures associated with renovation work, etc. currently planned for Assets under Management held by SANKEI REAL ESTATE as ofFebruary 29, 2024, the major ones (10 million yen or more) are as follows: The estimated construction costs below may include the portion separately charged
to expenses in accounting.
Expected construction cost (million yen)
Name of real estate, etc.
(Location)

PurposeScheduled period
Total amountAmount of
Total amountpayment
already paid
during period

Hibiya Sankei Building(Chiyoda-ku, Tokyo)

Replacement of SP pump andsurrounding valves

From: Mar. 1, 2024
To: Mar. 31, 2024

22

－

－

Hibiya Sankei Building(Chiyoda-ku, Tokyo)

Air conditioner outdoor unit
update (11th floor)

From: May 1, 2024
To: May 31, 2024

15

－

－

Hibiya Sankei Building(Chiyoda-ku, Tokyo)

Air Conditioning Outdoor Unit
Update (4th floor)

From: Nov. 1, 2024
To: Nov. 30, 2024

17

－

－

Hatchobori Sankei Building(Chuo-ku, Tokyo)

Waterproofing (Tower
Houses, Roofs, etc.)

From: Dec. 1, 2024
To: Dec. 31, 2024

35

－

－

Omori Park Building(Ota-ku, Tokyo)

Individual air conditioning
renovation work 1 floor

From: Dec. 1, 2024
To: Dec. 31, 2024

18

－

－

Omori Park Building(Ota-ku, Tokyo)

Absorption cold/hot water
generator control panel
updateFrom: Feb. 1, 2025
To: Feb. 28, 2025

25

－

－

Miyazakidai Garden Office(Miyamae-ku, Kawasaki-shi)

Waterproofing work (rooftop
and tower)

From: Dec. 1, 2024
To: Dec. 30, 2024

17

－

－

Hitachi Kyusyu Building(Sawara-ku, Fukuoka-shi)

VCB replacement

From: Nov. 1, 2024
To: Nov. 30, 2024

12

－

－

Hitachi Kyusyu Building(Sawara-ku, Fukuoka-shi)

Updating district heating andcooling cold water intake
valvesFrom: Nov. 1, 2024
To: Nov. 30, 2024

15

－

－

Hitachi Kyusyu Building(Sawara-ku, Fukuoka-shi)

Updating the district heating
and cooling hot water intake
valve

From: Dec. 1, 2024
To: Dec. 31, 2024

13

－

－

(2) Capital Expenditures during the Fiscal Period
Construction works falling under the category of capital expenditures of 10 million yen or more conducted in the fiscal period under review for Assets underManagement held by SANKEI REAL ESTATE as of February 29, 2024, are as follows: For the fiscal period under review, capital expenditures amounted to 111
million yen and repair expenses separately charged to expenses amounted to 76 million yen for a combined total of 188 million yen of construction works
implemented.
Name of real estate, etc.
(Location)

PurposeAmount of payment(million yen)

PeriodOmori Park Building(Ota-ku, Tokyo)

DC Power Supply Body Update

From: Sep. 1, 2023
To: Jan. 28, 2024

15

Omori Park Building(Ota-ku, Tokyo)

Individual air conditioning renovation work 1 floor

From: Sep. 1, 2023
To: Feb. 12, 2024

16

Other

79

Total

111

(3) Cash Reserves for Long-Term Repair Plans
Based on long-term repair plans formulated on a property-by-property basis, SANKEI REAL ESTATE makes the following provision of reserve for repairs fromcash flows during the fiscal period for the purpose of allocating to medium- to long-term future large-scale repairs and other funds.

Business period
Balance of reserve at
beginning of period(thousand yen)
Provision of reserve during
period (thousand yen)
Reversal of reserve during
period (thousand yen)
Reserve carried forward(thousand yen)

6th fiscal period
From: Sep. 1, 2021
To: Feb. 28, 2022

7th fiscal period
From: Mar. 1, 2022
To: Aug. 31, 2022

8th fiscal period
From: Sep. 1, 2022
To: Feb. 28, 2023

9th fiscal period
From: Mar. 1, 2023
To: Aug. 31, 2023

10th fiscal period
From: Sep. 1, 2023
To: Feb. 29, 2024

209,678

262,349

303,132

324,485

370,00285,56759,80159,801

72,811

78,12432,89519,01938,44827,295

154,789

262,349

303,132

324,485

370,002

293,338- 15 -

5. Status of Expenses and Liabilities(1) Details of Expenses Related to Asset Management(Unit: thousand yen)

Item
Asset management fee

9th fiscal period
From: Mar. 1, 2023
To: Aug. 31, 2023

10th fiscal period
From: Sep. 1, 2023
To: Feb. 29, 2024

245,773244,680

Asset custody fee

2,192

2,198

Administrative service fees

8,170

7,975

Remuneration for directors (and other officers)

3,600

3,600

Other expenses

46,384

88,867306,120

347,321Total(2) Status of Loans
Regarding the status of loans from respective financial institutions as of February 29, 2024, refer to II Financial Statements (7) Supplementary Schedules.

(3) Investment Corporation Bonds
Not applicable.

(4) Short-Term Investment Corporation Bonds
Not applicable.

(5) Investment Unit Acquisition Rights
Not applicable.

- 16 -

6. Acquisitions and Sales during the Fiscal Period(1) Acquisition and sale of real estate, asset-backed securities, infrastructure assets, etc. and infrastructurerelated assets, etc.
Acquisition
Property nameAcquisition date

BREEZÉ TOWER

Book value(million yen)

Gain or loss on
sale(million yen)－

January 31, 2024

17,995

12,521

5,417

－

－

January 31, 2024

16,10021,156(5,060)February 1, 2024

5,800

－

－

－

－

February 1, 2024

3,250

－

－

－

－

February 1, 2024

7,800

－

－

－

－

－

16,850－34,09533,678357

Shinagawa Seaside TS Tower(50% quasi co-ownership interest)(Note)

Sale date

Sale price(million yen)－

(43.45% quasi co-ownership interest)

Hotel Intergate Kyoto Shijo
Shinmachi
Hotel Intergate Kanazawa
GRIDS PREMIUM Hotel Osaka
Namba
Total

Sale

Acquisition price(million yen)

Acquisition price and sale price are the sale and purchase price of each trust beneficiary right stated in the sale and purchase agreement, rounded down to the nearest million yen. The sale andpurchase prices do not include consumption tax, local consumption tax and the various expenses required for the acquisition and sale.

(2) Acquisition and Sale of Other Assets
Main assets other than the above real estate and asset-backed securities, etc. are bank deposits or bank deposits within trust assets.

(3) Survey on Prices of Specified Assets, Etc.
Acquisition or
sale

Sale

Sale

Property nameBREEZÉ TOWER(43.45% quasi coownership interest)

Shinagawa Seaside
TS Tower(50% quasi co-ownershipinterest)

Type of asset

Acquisition
price or saleprice (Note 1)(million yen)

Real estateappraisal value(Note 2)
(million yen)Appraisal
dateAppraiser

January
31, 2024

Real estate trust
beneficiary right

17,995

17,944January 1,
2024

Japan Real
Estate Institute

January
31, 2024

Real estate trust
beneficiary right

16,10016,050January 1,
2024

The Tanizawa
Sōgō Appraisal
Co., Ltd.

TransactiondateAcquisition

Hotel Intergate
Kyoto Shijo
Shinmachi

February
1, 2024

Real estate trust
beneficiary right

5,800

5,870

January 1,
2024

Japan Real
Estate InstituteAcquisition

Hotel Intergate
Kanazawa

February
1, 2024

Real estate trust
beneficiary right

3,250

3,280

January 1,
2024

Japan Real
Estate InstituteAcquisition

GRIDS PREMIUM
Hotel Osaka Namba

February
1, 2024

Real estate trust
beneficiary right

7,800

7,860

January 1,
2024

Japan Real
Estate Institute(Note 1) “Acquisition price or sale price” is the sale and purchase price of the trust beneficiary right stated in the sale and purchase agreement, rounded down to the nearest million yen. The sale andpurchase prices do not include consumption tax, local consumption tax and the various expenses required for the acquisition and sale.
(Note 2) The appraisal value indicated above was prepared by the appraiser based on the Real Estate Appraisal Standards, Specific Thesis Chapter 3: “Appraisal on Prices of Real Estate Subject toSecuritization.”(4) Transactions with Interested Parties, Etc.
1) Transaction Status
Category
Total

Transaction amount, etc. (million yen) (Note 2)
Purchase amount, etc.

Sale amount, etc.

16,85034,095

Breakdown of transactions with interested parties, etc. (Note 1)
The Sankei Building Co., Ltd.
Total

16,850(100.0%)34,095(100.0%)16,850(100.0%)34,095(100.0%)(Note 1) “Interested parties, etc.” refer to the interested persons, etc., of the asset management company with which SANKEI REAL ESTATE has entered into an asset management agreement as provided
in Article 123 of the Order for Enforcement of the Act on Investment Trusts and Investment Corporations and Article 26, Paragraph 1, Item 27 of the Rules on Management Reports of Investment
Trusts and Investment Corporations of The Investment Trusts Association, Japan.
(Note 2) “Transaction amount, etc.” is the sale and purchase price of each trust beneficiary right stated in each sale and purchase agreement, rounded down to the nearest million yen. The sale andpurchase prices do not include consumption tax, local consumption tax and the various expenses required for the acquisition and sale.
(Note 3) Figures in parenthesis represent the percentage (%) to the respective total amounts, rounded to one decimal place.

- 17 -

2) Amount of Fees Paid, Etc.
Category

Property management fees

Building management fees

Total Amount ofFees Paid, etc. (A)Breakdown of transactions with interested parties, etc.
Paid party

The Sankei Building Co., Ltd.
39,931 thousand yen Sankei Building Management
Co., Ltd.
Sankei Building Management
154,448 thousand yenCo., Ltd.

Paid amount (B)Percentage of total amount(B/A)

18,548 thousand yen

46.5%

11,646 thousand yen

29.2%

117,720 thousand yen

76.2%3) Major Payments to Other Interested Parties, Etc.
The amounts paid to interested parties, etc. other than the fees paid, etc. above are as follows:
Sankei Building Management Co., Ltd.

52,751 thousand yen (Repair expenses)

Sankei Shimbun Co., Ltd.
Fuji Media Holdings, Inc.

907 thousand yen (Land rent)
683 thousand yen (Land rent)

4) Leasing Transactions, Etc.
Leasing transactions conducted with interested parties, etc. are as follows:
GRANVISTA Hotels & Resorts Co., Ltd.
The Sankei Building Co., Ltd.

358,025 thousand yen (Rental revenue)
3,200 thousand yen (Rental revenue)(5) Transactions with the Asset Management Company regarding Concurrent Work Conducted by the AssetManagement Company
As of February 29, 2024, Sankei Building Asset Management Co., Ltd., the asset management company of SANKEI REAL ESTATE, concurrently conducts
investment advisory and agency business, type II financial instruments business and real estate brokerage under the Financial Instruments and Exchange Act,but has no such transactions with SANKEI REAL ESTATE.

- 18 -

7. Overview of Accounting(1) Assets, Liabilities, Principal, and Profits and Loss
Please refer to Balance Sheet, Statement of Income and Retained Earnings, Statement of Changes in Unitholders’ Equity, Notes to Financial Statements and Statement of
Cash Distributions on later pages of this report.

(2) Changes in Calculation Method of Depreciation
Not applicable.

(3) Changes in Valuation Method of Real Estate and Infrastructure Assets, Etc.
Not applicable.

(4) Status, Etc. of Self-Managed Investment Trust Beneficiary Certificates, Etc.
Not applicable.

8. Other(1) Notices
Not applicable.

(2) Disclosure on Corporation Owning Foreign Real Estate
Not applicable.

(3) Disclosure on Real Estate Owned by Corporation Owning Foreign Real Estate
Not applicable.

(4) Other
Unless otherwise stated, the figures less than the specified unit are rounded down for monetary amounts and rounded off to the nearest specified unit for percentage
figures in this report.

- 19 -

II.

Financial Statements(1) Balance Sheet(Unit: thousand yen)
9th fiscal period(as of Aug. 31, 2023)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Total property, plant and equipment
Intangible assets
SoftwareTotal intangible assets
Investments and other assets
Long-term prepaid expenses
Deferred tax assets
Lease and guarantee deposits
Total investments and other assets
Total non-current assets
Deferred assets
Investment unit issuance costs
Total deferred assets
Total assets- 23 -

10th fiscal period(as of Feb. 29, 2024)

5,687,713
2,649,835
62,64578,865
166,96382
8,646,106

15,252,088
1,762,519
953,754
73,876
5,486
18,047,724

189,040(29,088)
159,952
544
(81)
463
604
(40)
564
2,457,766
21,225,884(2,169,707)
19,056,176
105,457(6,304)99,152
14,326(3,008)
11,31876,121(21,723)
54,397
81,618,833
5,886
103,464,511

189,290(32,666)
156,623
544
(94)
449
604
(100)
504
2,457,766
20,401,544(1,483,517)
18,918,027
111,450(7,666)
103,783
39,317(3,821)35,49625,456(8,277)
17,17864,939,537
86,629,368

8,806
8,806

7,068
7,068

94,32617
10,000104,343
103,577,662

102,677
9
10,000112,687
86,749,123

12,05012,050112,235,819

6,025
6,025
104,802,873

(Unit: thousand yen)
9th fiscal period(as of Aug. 31, 2023)
Liabilities
Current liabilities
Operating accounts payable
Short-term loans
Long-term loans due within one year
Accounts payable - otherAccrued expenses
Income taxes payable
Consumption taxes payable
Advances received
Deposits received
Total current liabilities
Non-current liabilities
Long-term loans
Lease and guarantee deposits received
Lease and guarantee deposits received in trust
Total non-current liabilities
Total liabilities
Net assets
Unitholders’ equity
Unitholders’ capital
Deduction from unitholders’ capital
Unitholders’ capital (net)
Surplus
Unappropriated retained earnings(undisposed loss)
Total surplus
Total unitholders’ equity
Total net assets
Total liabilities and net assets- 24 -

10th fiscal period(as of Feb. 29, 2024)

217,790
6,800,000
9,200,000
295,160
56,973957
397,611
10,184
16,978,677

219,486
7,600,000
492,122
52,901
795
182,108
326,433
346
8,874,193

41,000,000
88,716
3,603,120
44,691,837
61,670,515

42,600,000
88,012
2,767,538
45,455,551
54,329,745

49,442,685(7,136)49,435,549

49,442,685(7,136)49,435,549

1,129,754

1,037,578

1,129,754
50,565,304*1 50,565,304
112,235,819

1,037,578
50,473,128*1 50,473,128
104,802,873

(2) Statement of Income and Retained Earnings(Unit: thousand yen)
9th fiscal period
From: Mar. 1, 2023
To: Aug. 31, 2023
Operating revenue
Rent business revenue
Other rent business revenue
Gain on sale of real estate properties
Total operating revenue
Operating expenses
Expenses related to rent business
Loss on sale of real estate properties
Asset management fee
Asset custody fee
Administrative service fees
Remuneration for directors (and other officers)
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Reversal of distributions payable
Insurance claim income
Interest on tax refund
Other
Total non-operating income
Non-operating expenses
Interest expenses
Borrowing related expenses
Amortization of investment unit issuance expenses
Other
Total non-operating expenses
Ordinary income
Net income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)

10th fiscal period
From: Sep. 1, 2023
To: Feb. 29, 2024

*1 2,343,152*1 2,214,154

243,748*2 164,424
2,751,326*2 5,417,202*1 1,110,607*1 1,141,048

245,773
2,192
8,170
3,600
46,384
1,416,727
1,334,598*3 5,060,134

40
639
9
689

42
545
462
427
9
1,487

139,180
57,5116,024
2,000
204,716
1,130,571
1,130,571
963
(4)
958
1,129,612
141
1,129,754

142,563
41,557
6,024
3,168
193,314
1,038,079
1,038,079
801
7
809
1,037,269
309
1,037,578*1- 25 -*1 147,053

7,778,411

244,680
2,198
7,975
3,600
88,867
6,548,504
1,229,906

(3) Statement of Changes in Unitholders’ Equity
9th fiscal period (from March 1, 2023 to August 31, 2023)(Unit: thousand yen)
Total net
assetsUnitholders’ equity
Deduction
Unitholders’fromcapitalunitholders’capitalBalance at beginning of
periodChanges in items during
period

1,076,805 50,512,354

50,512,354

Distributions of surplus(1,076,663)(1,076,663) (1,076,663)(1,076,663)

Net income

1,129,612

1,129,612

1,129,612

1,129,612

52,94952,94952,9491,129,754 50,565,304

50,565,304

Balance at end of period(7,136)

Total
Unappropriatedunitholders’retained earnings Total surplus
equity(undisposed loss)

Unitholders’capital (net)1,076,805

Total changes in items
during period

49,442,685

Surplus49,435,549

-

-

-

52,949*1 49,442,685(7,136)49,435,549

1,129,754

10th fiscal period (from September 1, 2023 to February 29, 2024)(Unit: thousand yen)
Unitholders’ equity
Deduction
Unitholders’fromcapitalunitholders’capitalBalance at beginning of
periodChanges in items during
period49,435,549

Total net
assets1,129,754 50,565,304

50,565,304

Distributions of surplus(1,129,445)(1,129,445) (1,129,445)(1,129,445)

Net income

1,037,269

1,037,269

1,037,269

1,037,269(92,175)(92,175)(92,175)

1,037,578 50,473,128

50,473,128

Balance at end of period(7,136)

Total
Unappropriatedunitholders’retained earnings Total surplus
equity(undisposed loss)

Unitholders’capital (net)1,129,754

Total changes in items
during period

49,442,685

Surplus---(92,175)*1 49,442,685(7,136)49,435,549

1,037,578- 26 -

(4) Statement of Cash Distributions(Unit: yen)
9th fiscal period
From: Mar. 1, 2023
To: Aug. 31, 2023
I.

Unappropriated retained earnings

II. Amount of distribution

10th fiscal period
From: Sep. 1, 2023
To: Feb. 29, 2024

1,129,754,634

1,037,578,855

1,129,445,382

1,037,426,879[Amount of distribution per unit][2,418][2,221]

III. Retained earnings carried forward

309,252

151,976

In accordance with the policy on
distribution specified in Article 36,
Paragraph 1 of SANKEI REAL ESTATE’s
articles of incorporation, the amount of
distribution shall be limited to theamount of net income in excess of theamount equivalent to 90% of
distributable profit, as stipulated in
Article 67-15 of the Act on Special
Measures Concerning Taxation. Based onsuch policy, the decision was made to
distribute 1,129,445,382 yen, which is
the largest integral multiple of the total
number of investment units issued andoutstanding (467,099 units) not in excess
of unappropriated retained earnings, as
distribution of earnings.
The distribution in excess of earnings
specified in Article 36, Paragraph 2 of
SANKEI REAL ESTATE’s articles ofincorporation will not be made.

In accordance with the policy on
distribution specified in Article 36,
Paragraph 1 of SANKEI REAL ESTATE’s
articles of incorporation, the amount of
distribution shall be limited to theamount of net income in excess of theamount equivalent to 90% of
distributable profit, as stipulated in
Article 67-15 of the Act on Special
Measures Concerning Taxation. Based onsuch policy, the decision was made to
distribute 1,037,426,879 yen, which is
the largest integral multiple of the total
number of investment units issued andoutstanding (467,099 units) not in excess
of unappropriated retained earnings, as
distribution of earnings.
The distribution in excess of earnings
specified in Article 36, Paragraph 2 of
SANKEI REAL ESTATE’s articles ofincorporation will not be made.

Method of calculation of amount of
distribution- 27 -

(5) Statement of Cash Flows(Unit: thousand yen)
9th fiscal period
From: Mar. 1, 2023
To: Aug. 31, 2023
Cash flows from operating activities
Net income before income taxes
Depreciation
Amortization of investment unit issuance expenses
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund
receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable - other
Increase (decrease) in consumption taxes payable
Increase (decrease) in advances received
Increase (decrease) in deposits received
Decrease (increase) in long-term prepaid expenses
Decrease in property, plant and equipment in trust
due to sale
Decrease (increase) in other assets
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust
Proceeds from lease and guarantee deposits received
Refund of lease and guarantee deposits received
Proceeds from lease and guarantee deposits received
in trust
Refund of lease and guarantee deposits received in
trust
Other
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term loans
Repayment of short-term loans
Proceeds from long-term loans
Repayments of long-term loans
Distributions paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period- 28 -

10th fiscal period
From: Sep. 1, 2023
To: Feb. 29, 2024

1,130,571
322,1126,024(40)
139,180
1,832

1,038,079
317,3126,024(42)
142,563(891,108)(166,963)

166,963(16,070)(83,458)
8,101(38,660)(52,153)
9,507
9,230

4,989
(33,749)
12,737
182,108(71,177)(9,837)(8,351)

447,918

33,678,715(82)
1,717,050
40(132,950)(861)
1,583,278(5,404)34,529,823
42(146,635)(963)
34,382,266(7,125)(7,014,566)
5,231(2,344)(249)(16,936,372)
1,301(3,730)306,551

549,773(554,915)(1,385,355)(8,000)(7,275,168)(17,774,632)

6,800,000
3,700,000(3,700,000)(1,077,059)
5,722,940
31,0508,306,499*1 8,337,549(6,800,000)
5,900,000(5,900,000)(1,130,575)(7,930,575)
8,677,058
8,337,549*1 17,014,608

(6) Notes to Financial Statements(Notes on the Going Concern Assumption)
Not applicable.
Notes on Matters Concerning Significant Accounting Policies
1. Method of depreciation of non(1) Property, plant and equipment (including trust assets)
current assets
The straight-line method is adopted. Furthermore, the useful lives of major property,
plant and equipment are as follows:
Buildings
3–69 years
Structures
6–59 years
Machinery and equipment
10–27 years
Tools, furniture and fixtures
3–10 years(2) Intangible assets
The straight-line method is adopted.
(3) Long-term prepaid expenses
The straight-line method is adopted.
2. Accounting for deferred assets
Investment unit issuance costs
They are amortized by the straight-line method over 3 years.
3. Standards for revenue and(1) Standards for revenue recognition
expense recognition
The details of performance obligations concerning revenue from contracts withcustomers of SANKEI REAL ESTATE and the timing when the performance obligations
are normally satisfied (the normal time to recognize revenue) are as follows.
i. Sale of real estate properties
Revenue is recognized for the sale of real estate properties at the time the buyer
who is a customer gains control of the real estate properties through theperformance of delivery obligations specified in a contract on the sale of realestate properties.
ii. Utilities reimbursement
Revenue is recognized for utilities reimbursement according to the supply ofelectricity, water, etc. to tenants who are customers based on the terms of leaseagreements for real estate and incidental agreements. For the utilities
reimbursement for which SANKEI REAL ESTATE is deemed to be an agent, the net
amount after deducting the amount to be paid to another party from the amountreceived from tenants as charges for electricity, gas, etc. provided by said party
is recorded as revenue.
(2) Accounting for non-current asset tax, etc.
For non-current asset tax, city planning tax, depreciable asset tax, etc. on real estateor trust beneficiary rights of real estate, the tax levied corresponding to the calculation
period is recorded as expenses related to rent business.
Furthermore, the amount equivalent to non-current asset tax, etc. in the initialfiscal period paid by SANKEI REAL ESTATE upon acquisition of real estate or trust
beneficiary rights of real estate is included in the cost of acquisition of the real estate,etc. and not recognized as expenses. In the previous fiscal period, the amountequivalent to non-current asset tax included in the acquisition cost of real estate, etc.
was 22,327 thousand yen. During the fiscal period under review, the amountequivalent to non-current asset tax included in the acquisition cost of real estate, etc.
was nil.
4. Scope of cash (cash and cash
Cash and cash equivalents in the statement of cash flows comprise cash on hand and cash
equivalents) in the statement ofin trust, demand deposits and deposits in trust, and short-term investments with a maturity
cash flowsof three months or less from the date of acquisition that are readily convertible to cash andthat are subject to an insignificant risk of changes in value.
5.

Other significant matters related
to the basis for preparation of
the financial statements

Accounting for trust beneficiary rights that have real estate, etc. as trust assets
Concerning trust beneficiary rights that have real estate, etc. as trust assets held, allaccounts of assets and liabilities within trust assets and all accounts of revenue andexpenses from the trust assets are recognized in the relevant account item of the balance
sheet and the statement of income and retained earnings.
Furthermore, the following material items of the trust assets recognized in the relevant
account item are separately listed on the balance sheet.
i.
Cash and deposits in trustii. Buildings in trust; Structures in trust; Machinery and equipment in trust; Tools,
furniture and fixtures in trust; Land in trust; Construction in progress in trustiii. Leasehold and guarantee deposits received in trust- 29 -

[Notes to the Balance Sheet]*1. Minimum net assets as provided in Article 67, Paragraph 4 of the Act on Investment Trusts and Investment Corporations(Unit: thousand yen)
9th fiscal period(as of Aug. 31, 2023)

10th fiscal period(as of Feb. 29, 2024)

50,00050,000[Notes to the Statement of Income and Retained Earnings]*1. Breakdown of operating income (loss) from real estate rent business(Unit: thousand yen)
10th fiscal period
From Sep. 1, 2023
To: Feb. 29, 2024

9th fiscal period
From: Mar. 1, 2023
To: Aug. 31, 2023
A. Operating revenue from real estate rent
business
Rent business revenue
Rental revenue

2,224,844

Common area maintenance revenue

118,308

2,117,288
96,866

2,343,152

2,214,154

113,684
33,632

98,31931,294-

Total rent business revenue
Other rent business revenue
Utilities reimbursement
Parking revenue
Termination penalties
Income from work to restore to theoriginal state
Other rental revenue
Total other rent business revenue
Total operating revenue from realestate rent business
B. Operating expenses from real estate
rent business
Expenses related to rent businessOutsourcing expenses

85,520420

Utilities expenses
Property taxes
Land rent
Repair expenses
Insurance premium
Trust fee
Depreciation
Other expenses related to rent
business
Total expenses related to rent businessTotal operating expenses from realestate rent business
C. Operating income (loss) from real estate
rent business [A−B]- 30 -

7,500

10,491
243,748
2,586,901

9,940
147,053
2,361,208

221,524
189,454
313,078
1,818
37,7047,097
4,090
320,905
14,933239,931
154,887
322,169
1,590
76,8096,987
4,924
315,574
18,173

1,110,607

1,141,048

1,110,607

1,141,048

1,476,293

1,220,160

*2. Breakdown of gain on sale of real estate properties
9th fiscal period (from March 1, 2023, to August 31, 2023)(Unit: thousand yen)
BREEZÉ TOWER(1.55% quasi co-ownership interest)
Revenue from sales of real estate properties
Cost of sale of real estate properties
Other expenses related to sale
Gain on sale of real estate properties

620,000
447,918
7,656
164,42410th fiscal period (from September 1, 2023 to February 29, 2024)(Unit: thousand yen)
BREEZÉ TOWER (43.45% quasi-co-ownership interest)
Revenue from sale of real estate properties
17,995,000
Cost of sale of real estate properties
12,521,932
Other expenses related to sale
55,865Gain on sale of real estate properties
5,417,202*3. Breakdown of loss on sale of real estate properties
9th fiscal period (from March 1, 2023 to August 31, 2023)
Not applicable.
10th fiscal period (from September 1, 2023 to February 29, 2024)(Unit: thousand yen)
Shinagawa Seaside TS Tower (50% quasi-co-ownershipinterest)
Revenue from sale of real estate properties
16,100,000
Cost of sale of real estate properties
21,156,783
Other expenses related to sale
3,351
Loss on sale of real estate properties
5,060,134[Notes to the Statement of Changes in Unitholders’ Equity]*1. Total number of investment units authorized and total number of investment units issued and outstanding
9th fiscal period
From: Mar. 1, 2023
To: Aug. 31, 2023
Total number of investment units
authorized
Total number of investment units issued
and outstanding(Unit: unit)
10th fiscal period
From: Sep. 1, 2023
To: Feb. 29, 2024

10,000,000

10,000,000

467,099

467,099[Notes to the Statement of Cash Flows]*1. Reconciliation of cash and cash equivalents at end of period to the amount of balance sheet items
9th fiscal period
From: Mar. 1, 2023
To: Aug. 31, 2023

(Unit: thousand yen)
10th fiscal period
From: Sep. 1, 2023
To: Feb. 29, 2024

Cash and deposits
Cash and deposits in trust

5,687,713
2,649,835

15,252,088
1,762,519

Cash and cash equivalents

8,337,549

17,014,608

9th fiscal period(as of Aug. 31, 2023)

10th fiscal period(as of Feb. 29, 2024)

Due within 1 year
Due after 1 year

3,143,165
15,588,904

2,470,177
16,679,094

Total

18,732,069

19,149,271[Notes on Lease Transactions]Operating lease transactions (as lessor)
Future minimum lease payments(Unit: thousand yen)

- 31 -

[Notes on Financial Instruments]
1. Matters concerning status of financial instruments(1) Policy for handling financial instruments
SANKEI REAL ESTATE shall procure funds in a well-balanced manner through borrowing from financial institutions,issuance of investment corporation bonds, issuance of new investment units, etc. to contribute to steady growth ofassets under management as well as efficient operation and stability of management.
Upon borrowing from financial institutions, issuance of investment corporation bonds, etc., the fund procurement
shall be in a manner that gives due consideration to the balance between agility in fund procurement and financial
stability, characteristics of to-be-acquired real estate, etc. Specifically, the procurement means, ratio of long-term debt,
ratio of fixed-rate debt, staggering of maturities, provision of collateral or not, etc. shall be considered. Upon borrowing,
lenders shall be limited to the qualified institutional investors provided in the Financial Instruments and Exchange Act(however, limited to the institutional investors provided in Article 67-15 of the Act on Special Measures Concerning
Taxation).
Issuance of new investment units shall be for the purpose of expansion of asset size and enhancement of profitability,
and implementation decided by taking into account the LTV ratio, dilution of existing unitholders’ rights andaccompanying decline in transaction price of investment units, etc. and in light of the financial environment.
Derivative transactions may be conducted for the purpose of hedging the risk of fluctuation in interest rates and otherrisks on SANKEI REAL ESTATE arising from the concerned liabilities. No derivative transactions were conducted in thefiscal period under review.
(2) Description of financial instruments and associated risks, and risk management system
Loans are mainly for the purpose of procuring funds for acquisition of assets and funds for repayment of obligations.
Loans are exposed to the risk of inability to refinance upon becoming due for repayment, risk of rise in the interest rate
payable, etc., but the risks are mitigated by considering fund procurement that is well balanced through issuance ofinvestment units, etc. while also diversifying fund procurement sources and staggering maturities. In addition, the riskof rise in interest rates on SANKEI REAL ESTATE’s operations is managed by closely watching interest rate trends andkeeping the LTV under control in an appropriate manner.
(3) Supplementary explanation to matters concerning fair value, etc. of financial instruments
Certain assumptions, etc. are adopted in the calculation of the value of financial instruments. Accordingly, the concernedvalues may vary when different assumptions, etc. are adopted.
2. Matters concerning fair value, etc. of financial instruments
The following are the carrying amount and fair value as of August 31, 2023, and the amount of difference between these.
The notes to “cash and deposits, “cash and deposits in trust” and “short-term loans” are omitted because their fair values
approximate the carrying amount because they are settled in cash and in a short period. Furthermore, “Leasehold andguarantee deposits received” and “Leasehold and guarantee deposits received in trust” are omitted because the amounts
are immaterial.
(Unit: thousand yen)
Carrying amount(1) Long-term loans due within one
year(2) Long-term loans
Total liabilities

Fair value

Amount of difference

9,200,000
41,000,000

9,207,868
40,720,139

7,868(279,860)

50,200,000

49,928,008(271,991)

The following are the carrying amount and fair value as of February 29, 2024, and the amount of difference between these.
Notes on “cash and deposits” and “cash and deposits in trust” are omitted as the fair value approximates the carrying
amount because they are cash or settled in a short period. Furthermore, “Leasehold and guarantee deposits received” and“Leasehold and guarantee deposits received in trust” are omitted because the amounts are immaterial.
(Unit: thousand yen)
Carrying amount(1) Long-term loans due within one
year(2) Long-term loans
Total liabilities

Fair value

Amount of difference

7,600,000
42,600,000

7,598,568
42,330,138(1,431)(269,861)

50,200,000

49,928,707(271,292)(Note 1) Method of calculation of the fair value of financial instruments.
(1) Long-term loans due within one year; (2) Long-term loans
Of long-term loans, because those with floating interest rates reflect market interest rates in a short period of time, the fair value approximates
the book value and thus they are stated at that book value. However, in the case of long-term loans with fixed interest rates, the fair value iscalculated based on the present value of their future cash flows discounted over the time to maturity and at the rate adjusted for credit risks- 32 -

(Note 2) Amount of repayment of loans scheduled to be due after the end of the fiscal period (August 31, 2023)(Unit: thousand yen)
Due within
1 yearLong-term loans due within one
year

Due after
1 to 2 years

Due after
3 to 4 years

Due after
4 to 5 years

Due after
5 years

9,200,000

-

-

-

-

-

-

9,100,000

10,500,000

12,100,000

9,300,000-

9,200,000

9,100,000

10,500,000

12,100,000

9,300,000-

Long-term loans
Total

Due after
2 to 3 years

Amount of repayment of loans scheduled to be due after the end of the fiscal period (February 29, 2024)
Due within
1 yearLong-term loans due within one
year

Due after
2 to 3 years

Due after
3 to 4 years

Due after
4 to 5 years(Unit: thousand yen)
Due after
5 years

7,600,000

-

-

-

-

-

-

11,000,000

16,400,000

9,600,000

5,600,000-

7,600,000

11,000,000

16,400,000

9,600,000

5,600,000-

Long-term loans
Total

Due after
1 to 2 years[Notes on Securities]
9th fiscal period (as of August 31, 2023)
Not applicable.
10th fiscal period (as of February 29, 2024)
Not applicable.
[Notes on Derivative Transactions]
9th fiscal period (as of August 31, 2023)
Not applicable.
10th fiscal period (as of February 29, 2024)
Not applicable.
[Notes on Retirement Benefits]
9th fiscal period (as of August 31, 2023)
Not applicable.
10th fiscal period (as of February 29, 2024)
Not applicable.
[Notes on Tax-Effect Accounting]
1. Breakdown of main causes for occurrence of deferred tax assets and deferred tax liabilities
9th fiscal period(as of Aug. 31, 2023)
Deferred tax assets
Non-deductible accrued enterprise tax
Total deferred tax assets
Deferred tax assets, net(Unit: thousand yen)
10th fiscal period(as of Feb. 29, 2024)

17

9

17

9

17

9

2. Reconciliation of significant differences between the statutory tax rate and the effective income tax rate
(Unit: %)Statutory tax rate
[Adjustments]

9th fiscal period(as of Aug. 31, 2023)
31.46

10th fiscal period(as of Feb. 29, 2024)
31.46(31.43)0.05(31.44)
0.06

0.08

0.08

Deductible distribution payable
Other
Effective income tax rate after applicationof tax-effect accounting- 33 -

[Notes on Share of Profit (Loss) of Entities Accounted for Using Equity Method]
9th fiscal period (from March 1, 2023, to August 31, 2023)
Not applicable.
10th fiscal period (from September 1, 2023, to February 29, 2024)
Not applicable.
[Notes on Related-Party Transactions]
1. Parent company, major corporate unitholder, etc.
9th fiscal period (from March 1, 2023, to August 31, 2023)
Not applicable.
10th fiscal period (from September 1, 2023, to February 29, 2024)
Not applicable.
2. Affiliated company, etc.
9th fiscal period (from March 1, 2023, to August 31, 2023)
Not applicable.
10th fiscal period (from September 1, 2023, to February 29, 2024)
Not applicable.
3. Fellow subsidiary, etc.
9th fiscal period (from March 1, 2023, to August 31, 2023)
Not applicable.
10th fiscal period (from September 1, 2023, to February 29, 2024)
Not applicable.

- 34 -

4. Director, major individual unitholder, etc.
9th fiscal period (from March 1, 2023, to August 31, 2023)
Description of
Share capital
Percentage ofrelationship
Balance atName ofor
voting rights,
Transaction
Description ofend ofConcurrent
company,
investments
etc. held by
Description of amountAccount
Attribute
Locationbusiness or
periodetc. or namein capital(in) SANKEI holding oftransaction (thousand
item
Business
occupation(thousandof person(thousand
REAL ESTATE positions, relationship
yen)
yen)
etc. byyen)(%)
directors
Executive
Director of
SANKEI REAL
Payment of
Executive Director of
ESTATE, andasset
SANKEI REAL ESTATE,
President andmanagement
Accounts
and President and Chief
318,393
Director Yuichi Ota
Chief Executive
fee to Assetpayable - 277,170
Executive Officer of(Note 4)
Officer ofManagement
other
Sankei Building Asset
Sankei Building
Company
Management Co., Ltd.
Asset
(Note 3)
Management
Co., Ltd.
(Note 1) Of the related-party transactions subject to disclosure, the related-party transactions including significant transactions are disclosed.
(Note 2) Of the amounts above, transaction amount does not include consumption tax, etc., while balance at end of period includes consumption tax, etc.
Amounts are rounded down to the nearest thousand yen.
(Note 3) The Payment of asset management fees is for transactions conducted by Yuichi Ota as representative of Sankei Building Asset Management Co., Ltd.,and the amount of the fees is subject to the terms and conditions provided in SANKEI REAL ESTATE’s articles of incorporation.
(Note 4) Asset management fees includes the fees related to the acquisition and transfer of properties (72,620 thousand yen) that are entered into the bookvalue of individual real estate, etc. or deducted from the sale price .
(Note 5) Trading conditions are determined based on prevailing market conditions.

10th fiscal period (from September 1, 2023 to February 29, 2024)
Description of
Share capital
Percentage ofBalancerelationshipTransaction
orvoting rights,
at end of
Description ofConcurrent Business
investments
etc. held by
Description of amount Account period
Attribute
Locationbusiness or
holding of relationshipin capital(in) SANKEItransaction (thousand
item (thousand
occupation
positions,(thousand
REAL ESTATE
yen)
yen)
etc. byyen)(%)
directors
Executive
Director of
SANKEI REAL
Payment of
Executive Director of
ESTATE, andasset
SANKEI REAL ESTATE, andPresident andmanagement
Accounts
President and Chief
467,165
Director Yuichi Ota
Chief Executive
fee to Assetpayable - 454,499
Executive Officer of(Note 4)
Officer ofManagement
other
Sankei Building Asset
Sankei Building
Company
Management Co., Ltd.
Asset
(Note 3)
Management
Co., Ltd.
(Note 1) Of the related-party transactions subject to disclosure, the related-party transactions including significant transactions are disclosed.
(Note 2) Of the amounts above, transaction amount does not include consumption tax, etc., while balance at end of period includes consumption tax, etc.
Amounts are rounded down to the nearest thousand yen.
(Note 3) The payment of asset management fees is for transactions conducted by Yuichi Ota as representative of Sankei Building Asset Management Co., Ltd.,and the amount of the fees is subject to the terms and conditions provided in SANKEI REAL ESTATE’s articles of incorporation.
(Note 4) Asset management fees include fees related to the acquisition and transfer of properties (222,485 thousand yen) that are entered into the book valueof individual real estate, etc. or deducted from the sale price.
(Note 5) Trading conditions are determined based on prevailing market conditions.
Name ofcompany,
etc. orname ofperson- 35 -

[Notes on Asset Retirement Obligations]
9th fiscal period (from March 1, 2023, to August 31, 2023)
Not applicable.
10th fiscal period (from September 1, 2023, to February 29, 2024)
Not applicable.
[Notes on Investment and Rental Properties]
SANKEI REAL ESTATE owns office buildings, etc. for the purpose of earning revenue from leasing. The carrying amount,amount of change during period and fair value of these investment and rental properties are as follows:(Unit: thousand yen)
9th fiscal period
From: Mar. 1, 2023
To: Aug. 31, 2023
Carrying amount
Balance at beginning of period

97,259,835

103,458,625

6,198,790(16,829,257)

103,458,625
108,340,000

86,629,368
90,280,000

Amount of change during period
Balance at end of period
Fair value at end of period

10th fiscal period
From: Sep. 1, 2023
To: Feb. 29, 2024

(Note 1) The carrying amount is the amount obtained by deducting the accumulated depreciation from the acquisition cost.
(Note 2) Of the amount of changes during the period, the main increase in the previous fiscal period was due to the acquisition of one new property
and the acquisition of one additional property (two properties total: 6,748,166 thousand yen (including incidental expenses related toacquisition)), the main decrease was due to the partial transfer of one property (447,918 thousand yen), while the main increase in thecurrent fiscal period was due to the acquisition of three new properties (three properties total: 17,053,244 thousand yen (including incidental
expenses related to acquisition)), and the main decrease was due to the transfer of two properties (two properties total: 33,678,715
thousand yen).
(Note 3) Fair value at end of period is the appraisal value by an external real estate appraiser.

Furthermore, the income (loss) concerning investment and rental properties is presented in “Notes to the Statement of
Income and Retained Earnings.”[Notes on Revenue Recognition]
1. Information breaking down revenue from contracts with customers
9th fiscal period (from March 1, 2023, to August 31, 2023)(Unit: thousand yen)

Sale of real estate properties
Utilities reimbursement
Other
Total

Revenue from contracts with customers(Note 1)620,000
113,684
733,684

Sales to external customers(Note 2) 164,424
113,684
2,473,216
2,751,326(Note 1) Rent business revenue, etc. subject to ASBJ Statement No. 13 “Accounting Standard for Lease Transactions” and the transfer of real estate,etc. subject to The Japanese Institute of Certified Public Accountants Accounting Committee Report No. 15 “Practical Guidelines on
Accounting of Transferors for the Securitization of Real Estate Utilizing Special Purpose Companies” are not included in the above amounts
because they are excluded from application of the Revenue Recognition Accounting Standard. The main revenues from contracts withcustomers are revenue from the sale of real estate properties and utilities reimbursement.
(Note 2) As for sale of real estate properties the amount obtained by deducting the cost of selling real estate properties and other selling expenses
from the income from the sale of real estate properties is recorded as gain or loss on sale of real estate properties in the statement of income
and retained earnings in accordance with Article 48, Paragraph 2 of the Regulations on Accounting for Investment Corporations (Cabinet
Office Ordinance No. 47 of 2006).

- 36 -

10th fiscal period (from September 1, 2023 to February 29, 2024)(Unit: thousand yen)

Sale of real estate properties

Revenue from contracts with customers(Note 1)
34,095,000

Utilities reimbursement

Sales to external customers(Note 2) 5,417,202

98,31998,319Other-

2,262,889

Total

34,193,319

7,778,411(Note 1) Rent business revenue, etc. subject to ASBJ Statement No. 13 “Accounting Standard for Lease Transactions” and the transfer of real estate,etc. subject to The Japanese Institute of Certified Public Accountants Accounting Committee Report No. 15 “Practical Guidelines on
Accounting of Transferors for the Securitization of Real Estate Utilizing Special Purpose Companies” are not included in the above amounts
because they are excluded from application of the Revenue Recognition Accounting Standard. The main revenues from contracts withcustomers are revenue from the sale of real estate properties and utilities reimbursement.
(Note 2) As for sale of real estate properties the amount obtained by deducting the cost of selling real estate properties and other selling expenses
from the income from the sale of real estate properties is recorded as gain or loss on sale of real estate properties in the statement of income
and retained earnings in accordance with Article 48, Paragraph 2 of the Regulations on Accounting for Investment Corporations (Cabinet
Office Ordinance No. 47 of 2006). SANKEI REAL ESTATE records a gain on sale of real estate properties as operating revenue and loss on saleof real estate properties as operating expenses, so the table above only shows the amount of gain on sale of real estate properties.

2. Information forming the basis for understanding revenue from contracts with customers
9th fiscal period (from March 1, 2023, to August 31, 2023)
As stated in Notes on Matters Concerning Significant Account Policies.
10th fiscal period (from September 1, 2023, to February 29, 2024)
As stated in Notes on Matters Concerning Significant Account Policies.
3. Information on relationship between satisfaction of performance obligations based on contracts with customers and cash
flows from such contracts, and the amount and timing of revenue expected to be recognized from the next fiscal period
from contracts with customers that exist at the end of the fiscal period under review(1) Balance of contract assets and contract liabilities, etc.
(Unit: thousand yen)
9th fiscal period
10th fiscal period
From: Mar. 1, 2023
From: Sep. 1, 2023
To: Aug. 31, 2023
To: Feb. 29, 2024
Receivables from contracts with customers (Balance
25,127
26,668at beginning of period)
Receivables from contracts with customers (Balance
26,66822,439at end of period)
Contract assets (Balance at beginning of period)
Contract assets (Balance at end of period)
Contract liabilities (Balance at beginning of period)
Contract liabilities (Balance at end of period)(2) Transaction price allocated to remaining performance obligations
9th fiscal period (from March 1, 2023, to August 31, 2023)
Revenue is recognized for utilities reimbursement using the amount for which there is a right to claim in accordancewith section 19 of the Implementation Guidance on Accounting Standard for Revenue Recognition because there is aright to receive an amount of consideration directly corresponding to the value for the lessee, who is a customer, forthe portion for which performance is completed by the end of the period. Therefore, the provisions of section 80-22(2)of the Revenue Recognition Accounting Standard apply, and the transaction prices allocated to remaining performanceobligations are not included in the notes.
10th fiscal period (from September 1, 2023, to February 29, 2024)
Revenue is recognized for utilities reimbursement using the amount for which there is a right to claim in accordancewith section 19 of the Implementation Guidance on Accounting Standard for Revenue Recognition because there is aright to receive an amount of consideration directly corresponding to the value for the lessee, who is a customer, forthe portion for which performance is completed by the end of the period. Therefore, the provisions of section 80-22(2)of the Revenue Recognition Accounting Standard apply, and the transaction prices allocated to remaining performanceobligations are not included in the notes.

- 37 -

[Notes on Segment Information, etc.]
1. Segment information
The information is omitted since SANKEI REAL ESTATE has a single segment—the real estate rent business.
2. Related information
9th fiscal period (from March 1, 2023, to August 31, 2023)(1) Information by product and service
The information is omitted since operating revenue to external customers for a single group of products and services
exceeds 90% of operating revenue on the statement of income and retained earnings.
(2) Information by geographic areai.
Operating revenue
The information is omitted since operating revenue to external customers in Japan exceeds 90% of operating
revenue on the statement of income and retained earnings.
ii. Property, plant and equipment
The information is omitted since the amount of property, plant and equipment located in Japan exceeds 90% of
the amount of property, plant and equipment on the balance sheet.
(3) Information by major customer(Unit: thousand yen)
Name of customer

Operating revenue

GRANVISTA Hotels & Resorts Co., Ltd.

325,755

Related segment
Real estate rent business10th fiscal period (from September 1, 2023 to February 29, 2024)(1) Information by product and service
The information is omitted since operating revenue to external customers for a single group of products and services
exceeds 90% of operating revenue on the statement of income and retained earnings.
(2) Information by geographic areai.
Operating revenue
The information is omitted since operating revenue to external customers in Japan exceeds 90% of operating
revenue on the statement of income and retained earnings.
ii. Property, plant and equipment
The information is omitted since the amount of property, plant and equipment located in Japan exceeds 90% of
the amount of property, plant and equipment on the balance sheet.
(3) Information by major customer(Unit: thousand yen)
Name of customer

Operating revenue

The Sankei Building Co., Ltd.

5,417,202

Related segment
Real estate rent business[Notes on Per Unit Information]
9th fiscal period
From: Mar. 1, 2023
To: Aug. 31, 2023

10th fiscal period
From: Sep. 1, 2023
To: Feb. 29, 2024

Net assets per unit

108,253 yen

108,056 yen

Net income per unit

2,418 yen

2,220 yen

(Note 1) Net income per unit is calculated by dividing net income by the period’s daily weighted average number of investment units (fiscal period
ended August 2023: 467,099 units; fiscal period ended February 2024: 467,099 units). In addition, diluted net income per unit is not stated,because there are no diluted investment units.

- 38 -

(Note 2) The basis for calculation of net income per unit is as follows:

Net income (thousand yen)Amount not available to common unitholders(thousand yen)
Net income attributable to common investment units(thousand yen)
Average number of investment units during period(units)[Notes on Significant Subsequent Events]
Not applicable.

- 39 -

9th fiscal period
From: Mar. 1, 2023
To: Aug. 31, 2023
1,129,612

10th fiscal period
From: Sep. 1, 2023
To: Feb. 29, 2024
1,037,269--

1,129,612

1,037,269

467,099

467,099

(7) Supplementary Schedules
1) Schedule of Securities
a. Shares
Not applicable.
b. Securities other than shares
Not applicable.
2) Status of Contract Amounts, Etc. and Fair Value of Derivative Transactions and Forward Exchange Transactions
Not applicable.
3) Schedule of Assets Related to Real Estate(Unit: thousand yen)
Balance at
beginning of
periodBuildings

189,040249-

189,290

32,666

3,578

156,623

Structures

544

-

-

544

94

13

449

Tools, furnitureand fixtures

604

-

-

604

100

60

504

Land

2,457,766--

2,457,766--

2,457,766

Buildings in trust

21,225,884

6,757,530

7,581,869

20,401,544

1,483,517

303,759

18,918,027(Note)

105,457

9,857

3,864

111,450

7,666

1,766

103,783(Note)

14,32625,254263

39,3173,821

910

35,496(Note)

76,121

9,579

60,24525,456

8,277

5,484

17,178(Note)

81,618,833

10,362,559

27,041,855

64,939,537--

64,939,537(Note)

5,886

-

5,886

-

-

-

-

(Note)

105,694,465

17,165,032

34,693,984

88,165,513

1,536,145

315,574

86,629,368

17,400--17,40010,331

1,738

7,068

Structures in
Property, trust
plant and Machinery andequipment equipment in
trust
Tools, furnitureand fixtures intrust
Land in trust
Construction inprogress in trust
Subtotal
Intangible
assetsSoftwareSubtotal
Total(Note)

Accumulated depreciation
Increase during Decrease during Balance at end
Net balance atorAmountperiodperiodof periodend of period
accumulated
during period
amortization

Type of asset

17,400--17,40010,331

1,738

7,068

105,711,865

17,165,032

34,693,984

88,182,913

1,546,477

317,31286,636,436

Remarks(Note)The increase during period is mainly due to new acquisition of a property and additional acquisition of three properties (17,053,244 thousand yen in
total). The decrease during period is mainly due to sale of two properties (33,678,715 thousand yen in total).

4) Schedule of Other Specified Assets
Not applicable.
5) Schedule of Investment Corporation Bonds
Not applicable.

- 40 -

6) Schedule of Loans
Category

ShorttermloansLongtermloans

LenderMizuho Bank, Ltd.
Subtotal

Balance atIncrease
Decrease Balance at end
beginning of
Averageduring period during period of period
Maturity date Use of
periodinterest rate
Remarks(thousand(thousand(thousand(Note 2)
funds
(thousand(Note 1)
yen)
yen)
yen)
yen)
0.40784%
Unsecured/Mar. 30, 2024
6,800,000
6,800,000(floating(Note 4)
Non(Note 3)interest rate)
guaranteed
6,800,000-

6,800,000-

Mizuho Bank, Ltd.
Sumitomo Mitsui Banking
Corporation

856,000--

856,000

639,000--

639,000

Development Bank of Japan Inc.

548,000--

548,000

Mizuho Trust & Banking Co., Ltd.

350,000--

Sumitomo Mitsui Trust Bank,
Limited

319,000--

0.49096%
Unsecured/
350,000 (fixed interest Mar. 12, 2024 (Note 4)
Nonrate)guaranteed
319,000

SBI Shinsei Bank, Limited

294,000--

294,000

Resona Bank, Limited

294,000--

294,000

Mizuho Bank, Ltd.

950,000-

950,000-

Sumitomo Mitsui Banking
Corporation

800,000-

800,000-

Development Bank of Japan Inc.

2,000,000-

2,000,000-

Mizuho Trust & Banking Co., Ltd.

620,000-

620,000

Sumitomo Mitsui Trust Bank,
Limited

550,000-

550,000

0.36200%- (fixed interest Sep. 3, 2023
rate)-

SBI Shinsei Bank, Limited

490,000-

490,000-

Resona Bank, Limited

490,000-

490,000-

Mizuho Bank, Ltd.

1,167,000--

1,167,000

Sumitomo Mitsui Banking
Corporation

832,000--

832,000

Development Bank of Japan Inc.

713,000--

713,000

Mizuho Trust & Banking Co., Ltd.

456,000--

Sumitomo Mitsui Trust Bank,
Limited416,000--

0.32923%
Unsecured/
456,000 (fixed interest Sep. 12, 2024 (Note 5)
Nonrate)guaranteed
416,000

SBI Shinsei Bank, Limited

358,000--

358,000

Resona Bank, Limited

358,000--

358,000

Mizuho Bank, Ltd.

(Note 4)

Unsecured/
Nonguaranteed

1,331,000--

1,331,000

Sumitomo Mitsui Banking
Corporation

929,000--

929,000

Development Bank of Japan Inc.

796,000--

796,000

Mizuho Trust & Banking Co., Ltd.

509,000--

Sumitomo Mitsui Trust Bank,
Limited

465,000--

0.36978%
Unsecured/
509,000 (fixed interest Mar. 12, 2025 (Note 5)
Nonrate)guaranteed
465,000

SBI Shinsei Bank, Limited

385,000--

385,000

Resona Bank, Limited

385,000--

385,000- 41 -

Category

LenderMizuho Bank, Ltd.

1,550,000--

1,550,000

Sumitomo Mitsui Banking
Corporation

1,000,000--

1,000,000

Development Bank of Japan Inc.

700,000--

700,000

Mizuho Trust & Banking Co., Ltd.

600,000--

600,000

Sumitomo Mitsui Trust Bank,
Limited

500,000--

500,000

SBI Shinsei Bank, Limited

500,000--

0.29655%(fixed interest Sep. 2, 2025
rate)
500,000

Resona Bank, Limited

400,000--

400,000

THE NISHI-NIPPON CITY BANK,
LTD.

500,000--

500,000

Kansai Mirai Bank, Limited

300,000--

300,000

The Chiba Bank, Ltd.

150,000--

150,000

Mizuho Bank, Ltd.

750,000--

750,000

Sumitomo Mitsui Banking
Corporation

700,000--

700,000

Development Bank of Japan Inc.

700,000--

700,000

Mizuho Trust & Banking Co., Ltd.

200,000--

200,000

Sumitomo Mitsui Trust Bank,
Limited

500,000--

500,000

SBI Shinsei Bank, Limited

500,000--

Resona Bank, Limited

0.35542%500,000 (fixed interest Sep. 2, 2026
rate)
400,000

400,000--

1,500,000--

1,500,000

THE NISHI-NIPPON CITY BANK,
LTD.

500,000--

500,000

Kansai Mirai Bank, Limited

300,000--

300,000

The Chiba Bank, Ltd.

150,000--

150,000

Mizuho Bank, Ltd.

Aozora Bank, Ltd.

Longterm
loans

Balance atIncrease
Decrease Balance at end
beginning of
Averageduring period during period of period
Maturity dateperiodinterest rate
(thousand(thousand(thousand(Note 2)(thousand(Note 1)
yen)
yen)
yen)
yen)

Use offunds

Remarks(Note 4)

Unsecured/
Nonguaranteed(Note 4)

Unsecured/
Nonguaranteed(Note 5)

Unsecured/
Nonguaranteed

1,100,000--

1,100,000

Sumitomo Mitsui Banking
Corporation

900,000--

900,000

Development Bank of Japan Inc.

700,000--

700,000

Mizuho Trust & Banking Co., Ltd.

300,000--

300,000

Sumitomo Mitsui Trust Bank,
Limited

300,000--

0.38044%(fixed interest Apr. 1, 2026
rate)
300,000

SBI Shinsei Bank, Limited

300,000--

300,000

Resona Bank, Limited

200,000--

200,000

Aozora Bank, Ltd.

500,000--

500,000

Mizuho Bank, Ltd.

1,574,000--

1,574,000

Sumitomo Mitsui Banking
Corporation

1,084,000--

1,084,000

Development Bank of Japan Inc.

929,000--

929,000

Mizuho Trust & Banking Co., Ltd.

593,000--

Sumitomo Mitsui Trust Bank,
Limited542,000--

0.77500%
Unsecured/
593,000 (fixed interest Mar. 14, 2028 (Note 5)
Nonrate)guaranteed
542,000

SBI Shinsei Bank, Limited

439,000--

439,000

Resona Bank, Limited

439,000--

439,000

Mizuho Bank, Ltd.

2,250,000--

2,250,000

Sumitomo Mitsui Banking
Corporation

1,500,000--

1,500,000

Mizuho Trust & Banking Co., Ltd.

620,000--

620,000

Sumitomo Mitsui Trust Bank,
Limited

550,000--

0.79285%
Unsecured/(fixed interest Mar. 5, 2027 (Note 5)
Nonrate)guaranteed
550,000

SBI Shinsei Bank, Limited

490,000--

490,000

Resona Bank, Limited

490,000--

490,000- 42 -

CategoryLongterm
loans

Balance atIncrease
Decrease Balance at end
beginning of
Averageduring period during period of period
Maturity dateperiodinterest rate
(thousand(thousand(thousand(Note 2)(thousand(Note 1)
yen)
yen)
yen)
yen)

LenderUse offunds

Remarks

Mizuho Bank, Ltd.

972,000--

972,000

Sumitomo Mitsui Banking
Corporation

716,000--

716,000

Development Bank of Japan Inc.

614,000--

614,000

Mizuho Trust & Banking Co., Ltd.

392,000--

Sumitomo Mitsui Trust Bank,
Limited358,000--

1.02763%
Unsecured/
392,000 (fixed interest Sep. 13, 2027 (Note 5)
Nonrate)guaranteed
358,000

SBI Shinsei Bank, Limited

324,000--

324,000

Resona Bank, Limited

324,000--

324,000

Mizuho Bank, Ltd.

-

950,000-

950,000

Sumitomo Mitsui Banking
Corporation-

800,000-

800,000

Development Bank of Japan Inc.

-

2,000,000-

2,000,000

Mizuho Trust & Banking Co., Ltd.

-620,000-

620,000

Sumitomo Mitsui Trust Bank,
Limited

-550,000-

550,000

SBI Shinsei Bank, Limited-

490,000-

490,000

Resona Bank, Limited-

490,000-

490,000

Subtotal

50,200,000

5,900,000

5,900,000

50,200,000

57,000,000

5,900,000

12,700,000

50,200,000

Total

0.44789%(floatingApr. 1, 2026
interest rate)(Note 5)

Unsecured/
Nonguaranteed(Note 1) The average interest rate is a weighted-average figure during the fiscal period and is rounded to five decimal places.
(Note 2) If the maturity date is not a business day, the immediately following business day shall be the maturity date; if such date falls in the next month, theimmediately preceding business day shall be the maturity date.
(Note 3) Short-term loans were repaid in full by February 29, 2024.
(Note 4) These funds are used for acquiring real estate or real estate trust beneficiary rights and accompanying expenses.
(Note 5) The funds are used to repay existing loans.
(Note 6) The total amounts of long-term loans to be repaid for each year within five years after the date of the balance sheet are as follows:(Unit: thousand yen)
Due within 1 year
Long-term loans

7,600,000

Due after 1 to 2 years Due after 2 to 3 years Due after 3 to 4 years Due after 4 to 5 years
11,000,000

16,400,000- 43 -

9,600,000

5,600,000