English Translation
The following is an English translation of the Japanese original press
release and is being provided for information purposes only.

June 22, 2023

To All Concerned Parties

REIT Issuer: Daiwa Securities Living Investment Corporation
6-2-1 Ginza, Chuo-ku, Tokyo 104-0061
Yoshio Urata, Executive Director(Securities Code: 8986)
Asset Manager: Daiwa Real Estate Asset Management Co. Ltd.
Yoshiki Nishigaki, President and Chief Executive Officer
Inquiries: Kentaro Azumi, General Manager, Corporate Division
Tel: +81-3-6757-9680

Notice Concerning Acquisition of Asset (Partir Watanabedori)
Daiwa Securities Living Investment Corporation (hereinafter referred to as the “Investment Corporation”) hereby announcesthat Daiwa Real Estate Asset Management Co. Ltd. (hereinafter referred to as the “Asset Manager”), the asset manager of theInvestment Corporation, has resolved to acquire the asset (hereafter the “Asset to Be Acquired”) described below.

I. General Outline of the Acquisition

A general outline of the Asset to Be Acquired is detailed in the table below. As of June 22, 2023, the Investment Corporation
has concluded real estate purchase agreements with the seller for the Asset to Be Acquired, which is scheduled for acquisition
on July 3, 2023.

Name of property

Location

Property
type(Note 1)

Partir Watanabedori(Note 4)

Fukuoka-city,
FukuokaResidence(Studio)

Anticipatedacquisition price(A)(JPY thousand)(Note2) (Note 3)

Appraisal value(as of Feb. 2023)(B)(JPY thousand)(Note 3)

668,346

726,000

Difference between
anticipatedacquisition price andappraisal value(B)-(A)(JPY thousand)((A)/(B))(Note 3)57,653(92.1%)

Seller

UNITEDREALTY inc.

(Note 1) “Studio type” refers to residences in the 1R, 1K, 1DK, and 1LDK layouts. “Family type” refers to residences in the 2K, 2DK, 2LDK, and above layouts.
If there are multiple types of residences are mixed in one building, they are classified as belonging to the type with the largest number of units.
(Note 2) Anticipated acquisition price does not include acquisition expenses, adjustments to property tax and city planning tax, and consumption tax and local
consumption tax. The same applies hereinafter.
(Note 3) Amounts are rounded to the nearest unit and percentages are rounded to the first decimal place. Unless stated otherwise, the same applies hereinafter.
(Note 4) The name of the property will be changed to “Gran Casa Watanabedori” on July 3, 2023.
(Note 5) The intermediary of the Acquisition does not correspond to the interested party.

Ⅱ. Reason for the Acquisition and Leasing
Based on the asset management objectives and policies set forth in the Investment Corporations Agreement, we have decided
to acquire the Asset to Be Acquired in order to diversify and enhance the portfolio to achieve asset size growth and secure stableearnings.
The tenants of the Asset to Be Acquired meet the tenant selection criteria outlined in the Investment Corporation’s Management
System Report dated December 21, 2022.
Ⅲ. Details of Asset to Be Acquired and Leasing
The details of the Asset to Be Acquired are summarized in the following individual property tables. The description of theitems mentioned in the individual property tables is as follows.

<Description of Items>
a. Explanation of Overview of Properties
1.

“ Location (residential indication)” is stated based on the residential indication in principle. Where residential
indication is not shown, building location (if there is more than one, the location of one of the buildings) is shown inaccordance with either the housing number indication or the registry (including the Registration Record; the same
applies hereinafter).

1

English Translation
The following is an English translation of the Japanese original press
release and is being provided for information purposes only.
2.

“Form of ownership” for both Land and Building refers the type of rights held by the Investment Corporation for realestate and by the Trustee for real estate trust beneficiary interests.
3. “Zoning” for Land refers to the types of use districts stipulated by Item 1, Paragraph 1, Article 8 of the City Planning
Act (Law No. 100 of 1968, including later amendments) (hereinafter referred to as the “City Planning Act”).
4. “Area” for Land is shown in accordance with the registry and may not correspond to the current reality.
5. “FAR” for Land refers to the ratio of the sum of the floor space of the building to the land area as stipulated in Article
52 of the Building Standards Act (Law No. 201 of 1950, including later amendments) (hereinafter referred to as the“Building Standards Act”), and the upper limit of floor-to-area ratio (designated floor-to-area ratio) as determined bycity planning according to the use area. The designated floor-to-area ratio can be mitigated, increased, or reduced dueto the width of roads connected to the site and other reasons, and may differ from the floor-to-area ratio that is actuallyin use.
6. “Building-to-land ratio” for Land shows the ratio of the building area to the land area as stipulated in Article 53 of the
Building Standards Act, and the upper limit of building-to-land ratio (designated building-to-land ratio) as determinedby city planning according to the use area. The designated building-to-land ratio can be mitigated, increased, or
reduced due to fireproofed structures in a fire prevention districts and other factors, and may differ from the buildingto-land ratio that is actually in use.
7. “Use” for Building refers to the building type recorded in the registry.
8. “Structure/Floors” for Building is based on records in the registry.
9. “Number of leasable units” (in the case of residence) indicates the number of units that can be leased as of May 31,
2023 for the Asset to Be Acquired.
10. “Number of leasable compartments” (in case of healthcare facilities) indicates the number of compartments of abuilding where a lease contract has been concluded, and includes retail stores, offices, etc., if any.
11. “Total floor area” for Building is based on records in the registry and does not include the floor area of annexedbuildings.
12. “Construction completion” for Building refers to the date of completion recorded in the registry.
13. “Estimated emergency repair expenses,” “Estimated short-term repair expenses,” and “Estimated long-term repair
expenses” are rounded down to the thousands, while ratios are rounded to the first decimal place.
14. “PML” data was acquired from Tokyo Marine dR Co., Ltd. in June 2023.
15. “Property manager” is the property management company entrusted with, or scheduled to be entrusted with theproperty management operations.
16. “Master lessee” is the party that has, or is scheduled to enter into a master lease agreement concerning the asset inquestion.
17. “Type of master lease” is either “Pass through” or “Guaranteed rent” “Pass through” is a master lease agreement
where the master lessee passes on the rent equivalent to rent paid by the end tenant, and “Guaranteed rent” is a master
lease agreement in which the master lessee pays a fixed rent.
18. “Real estate rent revenue” is the monthly rental income (rent, common service fee, parking lot income, etc.) rounded
down to less than 1,000 yen based on the figures and information available as of May 31, 2023, of the Asset to Be
Acquired.
19. “Lease and guarantee deposits, etc.” are the lease or guarantee deposits (residences, retail stores, offices, parking lots,etc.) rounded down to less than 1,000 yen based on the figures and information available as of May 31, 2023, of theAsset to Be Acquired.
20. “Leasable area” shows the leasable area of each of the Asset to Be Acquired as of May 31, 2023, excluding area usedby storage spaces, parking spaces, custodian areas, signboards, vending machines, antennas and other spaces leased
to the lessee in addition to their main use, or other areas leased for the maintenance and supervision of the relevant
property (including loan for use). Furthermore, leasable area is calculated using the center line of the wall, and includes
the meter boxes and pipe spaces allotted to each unit.
21. “Number of tenants” shows the leasable area of each of the Asset to Be Acquired as of May 31, 2023, and shall be
one if a master lease agreement has been concluded with a master lessee.
22. “Total leased area” is the sum of the area leased through lease agreements with end tenants (however, in cases whereproperties are wholly leased to realtors through guaranteed rent agreements or where a master lessee wholly leases it
to another company, lease agreements where properties are wholly leased to a lessee) at the Asset to Be Acquired thatare in effect as of May 31, 2023.
23. “Occupancy rate” is the figure obtained by dividing the total leased area by the leasable area for the Asset to Be
Acquired as of May 31, 2023, rounded down to the first decimal place.
24. The “Collateral” section denote if there is collateral to be borne by the Investment Corporation for the asset to beacquired, or if there is collateral to be borne after the acquisition.
25. The “Features” sections have been prepared based on the analyses of the Asset Manager and the appraisal reports of
the real estate appraiser concerning the Asset to Be Acquired.
26. The “Special Notes” section denotes important factors upon considering the rights, appraisal values, the impact on
profitability and disposability, etc., concerning the Asset to Be Acquired.

2

English Translation
The following is an English translation of the Japanese original press
release and is being provided for information purposes only.

Category of anticipatedproperty for acquisition
Scheduled acquisition priceAppraisal value(appraisal date)
Location(Residential indication)
AccessLand
Building

Form of ownershipArea
Form of ownership
Structure/Floors

Total floor area
Building engineer
Constructor
Building inspection agency
Estimated emergency
repair expenses
Estimated long-term repair
expenses
Property manager
Master lessee
Real estate rent revenue
Lease and guarantee deposits
Total leasable area
Total leased area
Collateral

Overview of the Property
Real Estate
JPY 668 million
JPY 726 million(as of June, 2023)

Scheduled acquisition date
Appraisal firm

July 3, 2023
Tanizawa Sogo Appraisal
Co., Ltd.

2-6-4, Kiyokawa, Chuo-ku Fukuoka-shi, Fukuoka
Approximately 650 meters from Watanabe-dori Station on the Fukuoka City Subway
Nanakuma Line
Ownership
ZoningCommercial districts
297.82m²
FAR/Building-to-land ratio 400%／80%
Ownership
Use
Condominium
RC, 11-story building with
Number of leasable units
40 units
flat roof
1,322.65 m²
Construction completion
February 19, 2017MIRAIZU CONSTRUCTION CO.,LTD
MIRAIZU CONSTRUCTION CO.,LTD
Bureau Veritas Japan Co., Ltd.
Estimated short-term
JPY 0 thousand
JPY 0thousand
repair expenses
JPY 24,999 thousand

PML

HASEKO LIVENET, Inc.
G.K. Japan Rental Housing Type of master lease
Overview of Leasing
JPY 2,921 thousand
JPY 1,179 thousand
1,176.90m²
Number of tenants
1,176.90m²
Occupancy rate
None
Features

5.2%
Pass through1
100.0%

Site features:This property is a 1K/1LDK condominium completed in February 2017, located an 9-miunte walk from Watanabe-dori
Station on the Fukuoka City Subway Nanakuma Line. With good access to both the Hakata Station area and the Tenjin
Station area, this property is expected to have stable demand mainly from singles and DINKS with an emphasis on workliving proximity.
Property features:
The property is a 11-story reinforced concrete building, consisting of 20 of 1K units and 20 of 1LDK units. In addition tocommon facilities such as auto-locking door, intercom with monitor, security camera, delivery box, etc., in-house facilities
such as hot water heater with reheating function , and warm water washing toilet seat are standard equipment in each unit.
It is a property that provides high-quality and comfortable living to residents.
Special Notes
None
IV. Profile of the Counterparty
（1）
（2）
（3）
（4）
（5）
（6）
（7）
（8）

Company Name
Location
Title and Name ofRepresentative
Description ofBusinessAmount of Capital
Date of
Incorporation
Net Assets
Total Assets

UNITED REALTY inc.
1-14-22, Akasaka, Chuo-ku Fukuoka-shi, Fukuoka
Seiji Imura
Real estate planning and development. Real estate management and brokerage.
5 million yen
July 15, 2011
49 million yen
394 million yen

3English Translation
The following is an English translation of the Japanese original press
release and is being provided for information purposes only.

（9）
（10）

Major
Shareholders andSeiji Imura (100%)
Ownership Ratio
Relationship between the seller and the Investment Corporation/Asset Manager
There is no capital relationship required to be disclosed between the Investment
Corporation/Asset Manager and the seller. In addition, there is no capital
Capitalrelationship required to be disclosed between the affiliated parties and theRelationshipaffiliated companies of the Investment Corporation/Asset Manager and theaffiliated parties and the affiliated companies of the seller.
There is no personnel relationship required to be disclosed between theInvestment Corporation/Asset Manager and the seller. In addition, there is no
Personnel
personnel relationship required to be disclosed between the affiliated parties andRelationshipthe affiliated companies of the Investment Corporation/Asset Manager and theaffiliated parties and the affiliated companies of the seller.
There is no business relationship required to be disclosed between the Investment
Corporation/Asset Manager and the seller. In addition, there is no businessBusinessrelationship required to be disclosed between the affiliated parties and theRelationshipaffiliated companies of the Investment Corporation/Asset Manager and theaffiliated parties and the affiliated companies of the seller.
Status of
The seller is not classified as related party with Investment Corporation/AssetClassification as
Manager
Related Party

V. Profile of the Property Seller
The seller of the anticipated property is not classified as a special related party of the Investment Corporation and the AssetManager.
VI. Funds for Acquisition
Own funds
Ⅶ. Acquisition Schedule・ Decision of acquisition and conclusion of purchase agreement: June 22, 2023
・ Payment and delivery: July 3, 2023
Ⅷ. Payment Method, Etc.
Lump-sum payment at the time of transaction.
Ⅸ. Future Prospects
The Acquisition will have only a slight impact on the asset management condition for the fiscal period ending September 30,
2023 (April 1, 2023 to September 30, 2023) and the fiscal period ending March 31, 2024 (October 1, 2023 to March 31, 2024),
and there is no change in the asset management forecast.
Ⅹ. Summary of Appraisal Report
Property nameAppraisal value
Appraiser
Date of appraisal

Partir Watanabedori Ⅰ
726,000,000 yen
Tanizawa Sogo Appraisal Co., Ltd.
June 1, 2023

Item
Value indicated by income approach
Value indicated by the direct capitalization
method(1) Total Operating Income: (a) – (b)(a)

Rental revenues includingcommon service fees

Details
JPY thousand

726,000

JPY thousand

746,000

JPY thousand

38,428JPY thousand

37,594

4

Outline, etc.
Assessed by using the standardized net income value using the DCF method and by
conducting verification from the net income value using the direct capitalization
methodAssessed by capitalizing the standardized net income, which is recognized to bestable over the medium to long term, with the capitalization yield－
Rental revenue: Revenue that can be earned on an ordinary basis by leasing orcontracting the operation of all or part of the subject property (assuming fulloccupancy)
Common service fee revenue: Among the expenses required on a recurring basis
for the maintenance, management, and operation of the subject property, revenue

English Translation
The following is an English translation of the Japanese original press
release and is being provided for information purposes only.

Parking fees

JPY thousand

900

Other revenues

JPY thousand

1,240

Losses from vacancies

JPY thousand

1,307

JPY thousand
JPY thousand

0
9,343

Operation costs

JPY thousand

1,500

Utilities

JPY thousand

635

Repairs and maintenanceexpense

JPY thousand

1,630

Property management fees

JPY thousand

855

Tenant promotion fees, etc.

JPY thousand

805

Taxes and public dues

JPY thousand

2,885

Nonlife insurance

JPY thousand

109

Other expenses

JPY thousand922

JPY thousand

29,084

JPY thousand

9(5) Capital Expenditure

JPY thousand

1,480(6) Net Cash Flow (NCF): (3) + (4) – (5)JPY thousand

27,614(b)

Bad debt losses(2) Total Operating Expenses(3) Net Operating Income (NOI):(1) – (2)(4) Lump-Sum Investment Return(7) Capitalization Rate(%)

Value indicated by DCF method

JPY thousand

3.7
718,000

Discount rate

(%)

3.8

Terminal capitalization rate

(%)

3.9

Value indicated by cost approach
Land ratio
Property ratio

JPY thousand(%)(%)

Other items of note by appraiser

751,000
59.0
41.0
None.

URL: https://www.daiwa-securities-living.co.jp/en/

5

collected through contracts with lessees related to common areas (assuming fulloccupancy)
Income generated by leasing the parking lot attached to the subject property totenants, etc. and income generated by renting the parking lot by the hour
(assuming the lot is full)
Income from non-refundable lump-sum payments such as key money and renewal
fees and income from neighborhood association fees, installation of utility poles.
Decrease in each income based on the projected occurrence of vacancy andreplacement period, etc.
Decrease in each income based on the projected occurrence of bad debt－
Expenses required on a recurring basis for the maintenance and management of
the subject property, including building and facility management, security,
cleaning, etc.
Expenses required for electricity, water, gas, district heating and cooling heatsource, etc. in the operation of the subject property
Of the amount paid for repair or improvement of buildings, facilities, etc. related
to the subject property, the cost required for ordinary maintenance andmanagement of the said buildings, facilities, etc. or to restore the partiallydamaged buildings, facilities, etc. to their original state.
Expenses for the management of the subject property
Expenses required for intermediary services and advertising, etc. when recruiting
new tenants, as well as expenses required for the renewal of tenant lease contracts
and re-signing of lease contracts.
Property tax (land, buildings, depreciable assets), city planning tax (land andbuildings)
Charges for fire insurance for the subject property and attached facilities, liability
insurance to cover damage to third parties, etc. due to defects or accidents in the
management of the subject property, etc.
Other expenses such as internet usage fees, neighborhood association fees,
cleaning of miscellaneous wastewater pipes and periodic inspections of special
buildings, etc.
－
Investment income is recorded assuming an investment yield of 1.0%.
Expenses for repair or improvement of buildings, facilities, etc. related to thesubject property that are recognized to increase the value of the said buildings,
facilities, etc. or increase their durability－
Assessed by comprehensively considering the subject property's location,building conditions, and contract conditions.
－
Assessed by comparing with transaction examples of similar properties and byadding the individual characteristics of the property to the yield of the financial
assets.
Assessed by taking into account the nature of the net income employed for thecapitalization yield, future uncertainty, liquidity, marketability, etc.
－－－

English Translation
The following is an English translation of the Japanese original press
release and is being provided for information purposes only.

(Reference Material) Exterior and Map of the Asset to Be Acquired6English Translation
The following is an English translation of the Japanese original press
release and is being provided for information purposes only.

(Additional Material) Overview of Portfolio accompany the Acquisition<Number of Properties, Etc.>
Properties owned as of
today
(a)

Asset to Be Acquired(b)

Total number ofproperties

249 properties

1 property

250 properties

Total number ofleasable units

18,170 units

40 units

18,210 units

Total leasable area

766,775.97 m2

1,176.90 m2

767,952.87 m2

Properties owned as of
today
(a)

Asset to Be Acquired(b)

Total (anticipated)acquisition price

JPY 364.0 billion

JPY 0.6 billion

JPY 364.7 billion

Appraisal value(Note)

JPY 451.5 billion

JPY 0.7 billion

JPY 452.2 billion(a) + (b)<Asset Size, Etc.>(Note)(a) + (b)Appraisal value of the "Properties owned as of today” is calculated based on the appraisal value as of February 1, 2023 forGran Casa Kinshicho and the appraisal value as of the end of March 2023 for the other properties.

<Amount and Rate of Investment by Type (Based on (Anticipated) Acquisition Price>
Properties owned asof today(a)

Asset to Be Acquired(b)(a) + (b)StudioJPY 174.9 billion(48.1%)

JPY 0.6 billion

FamilyJPY 80.8 billion(22.2%)-

JPY 80.8 billion(22.2%)

Healthcare

JPY 108.2 billion(29.7%)-

JPY 108.2 billion(29.7%)

7

JPY 175.6 billion(48.2%)