12th

Fiscal Period Business Report(Statement of Financial Performance)

June 1, 2011 ~ November 30, 2011

6-2-1 Ginza, Chuo Ward, Tokyo http://www.daiwa-office.co.jp/en/

I. Overview of Daiwa Office Investment Corporation

Enhancing Portfolio Management Focused Mainly
Daiwa Office Investment Corporation (DOI) is a REIT (real estate investment trust) specializing in investment in officebuildings, focused on the Five Central Wards of Tokyo (Chiyoda, Chuo, Minato, Shinjuku and Shibuya Wards). Through aportfolio comprised of A Class buildings (buildings with a total floor area of 30,000m2 or more) and B Class buildings(buildings with a total floor area of 2,000m2 or more, but less than 30,000m2), DOI strives to earn stable revenues bymeeting the diverse needs of a broad range of tenants and flexibly responding to market changes.

DOI is committed to constructing a portfolio composed mainly of well-located office buildings in Tokyo. DOI is bothfocused on growing the portfolio size to 350 billion yen and working to improve the competitiveness of existing
portfolio properties.

Contents
I.

Overview of Daiwa Office Investment Corporation
3 Characteristics of Daiwa Office Investment Corporation……… 3
To Our Investors……………………………………………… 4
Financial and Management Highlights………………………… 5
Internal Growth Measures… ………………………………… 6External Growth Measures…………………………………… 9
Overview of Portfolio (portfolio list)………………………… 11
Overview of Portfolio (portfolio distribution) ………………… 12
Financial Conditions… …………………………………… 14
Description of Asset Manager……………………………… 15

II. Asset Management Report………………………… 17
III. Balance Sheets… …………………………………… 22
IV. Statements of Income……………………………… 24
V.

Statements of Changes in Unitholders’ Equity …… 25

VI. Notes to Financial Statements…………………… 26
VII. Independent Auditors’ Report… ………………… 37
VIII. Statements of Cash Flows [Information Only] … … 38

Investment Unit and Investor Information…………………… 16

IX. Investor Information… ……………………………… 39

2

on Well-Located Office Buildings in Tokyo
Activities for solid growth・Continue acquiring properties

Achievement of a 350 billion yen
asset size

・Leverage borrowing capacity

Keep the medium-term, upper-limit
LTV target range within 40%~50%

Asset size

350

billion yen(medium-term target)

Asset size

Proactive investment in selectively
chosen competitive properties

311.3
billion yen(as of November 30, 2011)

Establishment of stable revenue base・Property management activities

Enhance Asset Management Team in theInvestment Management Department,
improve occupancy rate and increase
rent revenue
Further strengthen relations with tenants

・Maintain and improve property value

New establishment of Construction Manager
Capture tenant needs by reinforcing ties
with property managers
Strategic renewals aimed at improving
property specifications

・Lower borrowing costs

Heightened creditworthiness by achievinga status of all loans being unsecured

3 Characteristics of Daiwa Office Investment Corporation
Office Specialized REIT
Effective application of operational
know-how specialized in office buildings

Office buildings
0%50%

Five Central Wards of Tokyo
0%

92.3%

50%

100%
Based on acquisition price0

Portfolio comprised of
A Class and B Class buildings
Operates Shinjuku Maynds Tower
at the core and blue-chip medium-sized
office buildings

100%

Regional Cities 1.5%
Greater Tokyo 6.2%

REIT focused on theFive Central Wards of Tokyo
Places priority on owning
office buildings in favorable locations
for which there is high demand

100%

A Class buildings(Shinjuku Maynds Tower)

20

43.0%

0%

40

60

B Class buildings

80

57.0%

50%

100%
Based on acquisition priceNote: Please note that the percentages in the above graph are as of November 30, 2011.
0

20

40

60

I. Overview of Daiwa Office Investment Corporation

80

3

To Our Investors
Towards Further Growth

We would like to express our deep gratitude to all our unitholders for their support of Daiwa Office Investment Corporation (DOI).
In the 12th Fiscal Period, DOI posted increases in both sales and profit with operating revenues of 7,605 million yen andoperating income of 3,317 million yen. Despite the temporary expenses to have all borrowings unsecured, our distribution perunit for the 12th Fiscal Period is 4,464 yen, an increase by 793 yen from the 11th Fiscal Period.
The 12th Fiscal Period featured the acquisition of the E SPACE TOWER in July 2011. This property was acquired for 24 billion
yen and is the second largest property in our portfolio following Shinjuku Maynds Tower. This acquisition contributed to a
growth in the distribution per unit paid. DOI continues to have ample room to make further investments since our borrowing
ratio remains low even after the acquisition. Consequently, we continue to have many building owners who are considering thesale of their properties bring opportunities to us. DOI will analyze and grasp in detail information on the surrounding market for
properties we are introduced to and selectively invest in properties that can maintain competitiveness over the long-term.
The circumstances surrounding the management of existing assets remain severe with a new large supply of office buildings
being completed in 2011 and 2012. The occupancy of DOI as of the end of the 12th Fiscal Period dropped to 92.4% and theaverage contracted rent for the portfolio, excluding E SPACE TOWER, also declined gradually. Although there are already signs ofimprovement in the occupancy rate and rents of high quality and large-scale buildings like the Shinjuku Maynds Tower and E
SPACE TOWER, the impact of the large supply is expected to continue impacting small office buildings. The asset managementcompany of DOI has increased the staff of its management team and is committed to improving tenant satisfaction andimproving occupancy rates while also maintaining and improving rent revenue.
Thanks to the understanding of many financial institutions we were able to make improvements in the financing related area by
realizing a status of all borrowings being unsecured as of the end of September 2011. This has led to further diversification oflenders and an ability to diversify fund-raising methods. Consequently, our financial foundation has been reinforced.
The keys to further growth of DOI are not only a growth in the business through the acquisition ofproperties but also an improvement in the profitability of existing properties. It is our intent to proceed toa stage of further growth via leasing activities and reinforcing tenant relations.
We wish for the continued success of our unitholders and ask for your continued support of DOI.

Kazuo Otaka Executive Director of Daiwa Office Investment Corporation

12th Fiscal Period

Distribution per unit (actual)

13th Fiscal Period

Distribution per unit (forecast)

14th Fiscal Period

Distribution per unit (forecast)(ﬁscal period ended November 2011)(ﬁscal period ending May 2012)(ﬁscal period ending November 2012)(Note)

44,464 yen
4,850 yen
5,350 yen

The forecast on distribution above is calculated based on certain assumptions and may vary due to changes in the status and other factors. Moreover, the forecasts set forth herein should not be construed asa guarantee of distribution amounts.

Financial and Management Highlights
Steady growth in distribution through property acquisitions and reduced borrowing costs

Operating Revenues

Operating Income(million yen)(million yen)

10,000

4,000

7,500

3,903
7,744
6,986

2,000

2,500

1,000

8th Period

9th Period

10th Period

11th Period

012th Period

Net Income

(yen)

3,000

8,000
2,710

6,000

2,000

8th Period

9th Period

10th Period

11th Period

12th Period

6,847
5,246

1,767

4,000

1,453

1,282

1,000

4,464
3,240

3,671

2,000

500
8th Period

9th Period

10th Period

11th Period

012th Period

Asset Size

8th Period

9th Period

10th Period

11th Period

12th Period

Period End Occupancy Rate(billion yen)

(%)

350

100
90
311.3

300

250

2,482

2,076

1,500

0

2,824

Distribution Per Unit

(million yen)

2,500

2,959

6,759

6,424

5,000

0

3,317

3,000

7,606

265.0

95.4

92.4

85.7

80

287.3

278.1

269.1

95.9

92.8

4,464

70
60

200

8th Period

9th Period

10th Period

Operating revenues (million yen)
Operating income (million yen)
Ordinary income (million yen)
Net income (million yen)
Total number of units issued (units)
Net assets per unit (yen)Distribution per unit (yen)Total assets (million yen)

10000
8000
6000

Loan-to-value (LTV)(based on total asset value) (%)4000
Number of investment properties
Asset size (billion yen)
Total rentable area (m2)Occupancy rate (%)

2000
0

11th Period

50

12th Period

8th Period

9th Period

10th Period

11th Period

12th Period

12th Period

11th Period

10th Period

9th Period

8th Period(November 2011)(May 2011)(November 2010)(May 2010)(November 2009)

7,606
3,317
1,768
1,767
395,798
506,693
4,464
323,218

6,759
2,824
1,588
1,453
395,798
505,900
3,671
298,626

6,424
2,482
1,274
1,282
395,798
505,4693,240
294,562

34.0

28.9

28.1

36
311.3
205,318.62
92.4

35
287.3
191,346.43
95.4

33
278.1
182,548.82
95.9

6,986
2,959
1,774
2,076
395,798
4000
507,475
5,246
3000
283,867

7,744
3,903
2,711
2,710
395,798
509,075
6,847
286,901

25.5

25.3

31
269.1
174,928.31
0
85.7

30
265.0
171,951.76
92.8

2000

1000

I. Overview of Daiwa Office Investment Corporation

5

Internal Growth Measures
Committed to heightening tenant satisfaction and proactive leasing activities

Office Market Trends
Due to the massive completion of development projects in central Tokyo continuing until 2012, the vacancy rate remained high andoffered rents continued to be weak in the 12th Fiscal Period. However, there are emerging signs of improvements in vacancy rates andoffered rents centered on large-scale office buildings. On the other hand, the continued deterioration in the supply and demand balance
influenced properties that are not classified as large-scale office buildings, and we think property management will continue to remain
important.
◦ Offered Rents and Vacancy Rate in Five Central
Wards of Tokyo(yen/tsubo)

25,000Five Central Wards of Tokyo: Vacancy rate of large-scale office buildings (right axis)
Five Central Wards of Tokyo: Overall average vacancy rate (right axis)

(%)

10

◦ Large-scale Office Building (Note) Supply in 23 Wardsof Tokyo(thousand m2)

2,500

22,00082,000 1219,0006

1,500

16,000

4

1,000

2

500

10,0000Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec. Mar. Jun. Sep. Dec.
2008
2009
2010
2011
(Note) Large-scale buildings: Single floors have areas of 200 tsubos (661.2m2) or more
(Source) Sanko Estate0

13,000Five Central Wards of Tokyo: Rents of large-scale office buildings (left axis)
Five Central Wards of Tokyo: Overall rents (left axis)

24

32

41 40 36 44

42
46 47

21
29 30

15 14 16 19

28

28 26

21 25

31 34 2615

9 5Quantity of supply
Completed properties
Incomplete properties

86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 1550◦ Occupancy Rate

◦Average Contract Rents and Market Rents

(%)

40

(yen/tsubo)

100

99.0
97.0 97.4

98.2 98.3

25,00097.6 97.7
95.9

95.4

20
22000

92.8

92.4
90.8 90.7

90

85.7

End of End of End of End of End of End of End of End of End of End of End of End of End of End of
1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th 13th 14th
Period Period Period Period Period Period Period Period Period Period Period Period Period Period◦Changes and Reasons for Tenants Moving In/Out (Note)(No. of Cases)
40
33
30
24
20
5
10
0
-10
-20
-20
-19
-30
-40
-50
-53
-60
7th Fiscal
8th Fiscal
PeriodPeriodNumber of Move Ins

Breakdown of
12th PeriodMoving inMoving out

100 17

18

16
4

6

-24

10
19000

-2

0

15,000End of
End of
End of
End of
End of
End of
End of
End of
End of
4th Period 5th Period 6th Period 7th Period 8th Period 9th Period13000
10th Period 11th Period 12th Period(Note) Average monthly contracted rents with tenants at the end of each fiscal period◦ Industries of Top 50 Tenants (Companies) (Note)-20

90 Fiscal
9th Fiscal
10th
11th Fiscal
12th Fiscal
PeriodPeriodPeriodPeriodNumber of Move Outs
Difference

BetterLocation
2
2

Other

Total

5
5

18
20

(Note) Figures above exclude new moving in/out
40 for residential and warehouse properties
30
20
10
0

250
200
150

10000

Electronics 4.5%
Food Products

25000

Services 24.7%

Construction

4.8%

Banks 5.8%
Wholesale 8.1%

100
50

4.6%

-12

95 -14

Down85sizing0
7

19,585

Average contract rents (Note)
Average contract rents (excluding E SPACE TOWER) 16000
Average office rents (according to Miki Shoji for five central wards of Tokyo)

Precision
Equipment 5.7%

Space ConsoliExpansion dation
10
601
3
503

19,692Other 13.0%

3130

20,22620,00090.7 90.4
Occupancy rate (actual)
Occupancy rate (current forecast)Occupancy rate (previous forecast)

30

25000

95

6

19

(Note) Large-scale office buildings: Total office floor areas of 10,000m2 or more
(Source) Mori Building’s Market Trend Survey of the Large-scale Office Buildings in Tokyo’s 23
Wards

Rental Business Status

85

37

20000

Information andTelecommunication

20.5%
15000 Real Estate

8.3%(Note) The top 50 tenants comprise 58.3% of the total rentable area as of the end of the 12th Fiscal
Period. Furthermore, industry classifications have been prepared by DOI based on the 33
industries classified by the Tokyo Stock Exchange.

0Internal Growth Policy
DOI believes that, “People who cannot execute simple tasks can never execute difficult tasks, and in a workplace where people cannot executesimple tasks, people cannot execute thoroughly.” We are committed to the following internal growth policy based on the motto of "Bonji-Tettei"
meaning that accomplishing ordinary tasks thoroughly and carefully enables us to achieve extraordinary results.

Bonji-Tettei◦ Improve occupancy rate through lease-up•Strengthen collaboration with brokers
Hold regular meetings and regular visits with various brokers.

◦Implement strategic renewals aimed at boosting
competitiveness•New establishment of Construction Manager•Implement prompt and smooth leasing
Person in charge of asset management to be present at time of property
viewing, and establish a point of contact and collaboration and means ofcommunication with the property management company.

• Implement value enhancement of existing properties•Enhance property recognition with up-to-date information
Implement face-to-face leasing by visiting with regularly-updated vacancy
information and property information.

•Reduce energy costs by changing power supplier for newly-acquired
properties◦Prevent cancellations by strengthening relations
with existing tenants•Enhance tenant satisfaction by strengthening communication with existing
tenants•Visit all tenants on a regular basis and ensure timely response by deepening
interaction among people and respond to tenants face-to-face• Scrutinize construction content and ensure appropriate construction costs◦ Measures to reduce costs• Reduce costs by individualizing some heat sources for air-conditioning systems
at Shinjuku Maynds Tower◦ Strengthen collaboration with Daiwa
Securities Group• Reinforce leasing by utilizing Daiwa Securities’ branch network• Implement leasing that utilizes Daiwa Securities Group’s network of
corporate clients

Properties Subject to Leasing Improvement◦ Daiwa Sarugakucho
Address
Completion
Total floor area
End-of-period
occupancy◦ Daiwa Kyobashi
Address
Completion
Total floor area
End-of-period
occupancy

2-6-10 Sarugakucho, Chiyoda-ku
June 1985
4,303.97m2
0.0%

4-3-3 Hachobori, Chuo-ku
October 1974
4,069.15m2
53.7%•Tenant vacated the property in February 2011
due to group restructuring.

•Former tenant, to whom the entire building
was being leased, vacated the property in
September 2011 due to group restructuring.

•This is a property that continued to have a
low occupancy rate due to the impact of theGreat East Japan Earthquake, but inquiries toview the property, etc. have increased.

•DOI is targeting tenants that desire to be thesingle building tenant and that favorably view
characteristics of the local area.

•DOI has appealed the convenient access,good design of office space and high level ofvisibility.

◦ Sunline Building No. 7
Address
Completion
Total floor area
End-of-period
occupancy◦ Daiwa Jimbocho
4-7-2 Kojimachi, Chiyoda-ku
October 1987
3,942.61m2(total floor area of entire building)
68.1%•Foreign tenant vacated the property in June
2011 due to withdrawal of its business fromthe Japanese market.
•DOI has appealed the convenient access andproperty design in this area with few officebuildings.

Address
Completion
Total floor area
End-of-period
occupancy

2-4-63 Kanda-Jimbocho, Chiyoda-ku
March 1997
4,247.18m2
100.0%•Main tenant is scheduled to vacate theproperty during the 13th Fiscal Period due toimprovement of business efficiency.
Occupancy rate is expected to fallconsiderably.
•DOI has appealed the convenient access.

I. Overview of Daiwa Office Investment Corporation

7

Internal Growth Measures

Establishment of Environmental Policies and Tangible Approach◦ Environmental Policy
DOI recognizes the significance of environmental issues in the real estate sector and,as its corporate social responsibility, is committed to continuous efforts forenvironmental friendliness, alleviation of environmental burdens and other initiatives
in conducting real estate investment management operations and other corporate
activities.

1. Implementation of Resource and Energy Saving
2. Implementation of Environmental Conservation
3. Promotion of Environmental Disclosure/Communication
4. Establishment of Operation of Environmental
Management System
5. Adherence to Environment-related Laws andRegulations◦ Shinjuku Maynds Tower: Acquisition of DBJ Green Building Certification
Shinjuku Maynds Tower received the “Silver” rank of DBJ Green Building Certification from Development
Bank of Japan Inc. (DBJ) recognized as a building with excellent “environmental & social consciousness.”
The certification was in recognition of Shinjuku Maynds Tower incorporating environmental and energysaving technologies, while also enhancing building occupancy features by enriching facilities that are ofconvenience for tenants, such as incorporating restaurants and clinics.
Shinjuku Maynds Tower◦ Shinjuku Maynds Tower:
Implementation of Investment for Risk Mitigation in Times of Earthquakes
The glass plates of ceiling lighting in the airlock entrance (ceiling height: about 10m) at Shinjuku Maynds Tower were
found to have moved a little at the time of the Great East Japan Earthquake. DOI lightened the “glass” by switching toglass cloth and installed a wire system for preventing the fall of objects as a means to avoid secondary injury causedby the dropping of ceiling materials.

Airlock entrance at Shinjuku
Maynds Tower◦ Daiwa Nishi-Shimbashi:
Grant of Subsidies Decided for Introduction of Energy-saving Equipment
Sustainable open Innovation Initiative decided to grant subsidies to Daiwa Nishi-Shimbashi in recognition of energysaving performance in the upgrading of air-conditioning, lighting and central monitoring systems. A study of
construction techniques led to the realization of construction conducted while tenants continue to occupy the building.
In addition, it also reduces utility charges for tenants and thereby contributes to enhancement of tenant satisfaction.

Daiwa Nishi-Shimbashi

Strategic Renewals Focused on Improving Building Capability◦ Daiwa Ginza 1-chome: Renewal of common areas
beforeafter

Changed ceiling lighting material in◦ Shinjuku Maynds Tower: airlock entrance (ensuring safety)
before8

after

beforeafter◦ Daiwa Jimbocho: Renewal of common area (scheduled)present

image

External Growth Measures
Proactive investment in selectively chosen competitive properties

Real Estate Transaction Market and Acquisition Performance
During the 12th Fiscal Period, some real estate transactions were postponed immediately following the Great East Japan Earthquake, but thetransaction market has gradually stabilized. DOI believes that demand for acquisitions among real estate companies and funds (including REITs) willcontinue to be strong in light of the continued favorable financing stance of financial institutions.
Lending stance DI (real estate)

Lending stance DI (all industries)

30
20

600

10

500

0

400

-10

300

-20

200

-30

100

-40

0

2005
2006
2006
2007
2007
2008
2nd Half 1st Half 2nd Half 1st Half 2nd Half 1st Half(billion yen)
400

Total acquisition price

350
300
250

54.4

59.0

54.4

2008
2009
2009
2010
2010
2011
2011
2012
2012
2nd Half 1st Half 2nd Half 1st Half 2nd Half 1st Half 2nd Half 1st Half 2nd Half

Estimated LTV (based on acquisition price)
60.8

287.0
54.0

283.4

265.0

265.0

LTV (based on acquisition price)
265.0

269.1

278.1

287.3

350.0
311.3

52.2

200

42.4

150
100

79.5

110.8

130.4

138.4
26.4

22.6

27.4

50
0

IPO

700
(%)
80

600

70

400

60

300

50

200

26.9
Proactive investment in selectively
chosen competitive properties

20

End of
End of
End of
End of
End of
End of
End of
End of
End of
End of
End of
End of
1st Period 2nd Period 3rd Period 4th Period 5th Period 6th Period 7th Period 8th Period 9th Period 10th Period 11th Period 12th Period

500

100

40
30

30.0

800

-50

35.3

29.8

below zero is severe)

No. of transactions

700

DI (Above zero is favorable andNumber of transactions(transactions)
800

0

30

10

20

0

10
0

(Source) Prepared by DOI based on data from the Real Estate Transactions Study of Urban Research Institute Corporation (a think tank of Mizuho Trust and Banking) and thewebsite of the Bank of Japan.

-10
-20
-30

Current Portfolio and Acquisition Policy

-40
-50

DOI receives a large amount of information on potential acquisition opportunities because of our low LTV and huge capacity for further investment.
We intend to continue proactive and selective investment in properties that will remain competitive after discerning the long-term projections for rentof individual properties brought to us.
Chart of Distribution of Portfolio Properties
DOI portfolio properties(Total floor area: m2 )120,000

Investment breakdown
Share
92.3
%
Five
Central
Wards
Shinjuku Maynds Tower
6.2%
Greater Tokyo
1.5%
Regional Cities
Share
Classification
A Class buildings A Class buildings 43.0%
Presently targeted
B Class buildings 57.0%
investment zoneArea

100,000

80,00060,000E SPACE TOWER
40,0001
B Class buildings

20,000

2
0

10

20

30

40

50

Acquisition Policy
Focused investment on the Five Central Wards of Tokyo andequivalent areas
Focused investment on A Class buildings and B Class buildings in
Zone 1 that are less than 20 years old.
Acquisition of properties that will heighten the stability andprofitability of the existing portfolio.
Constantly study the replacement and sale of properties in Zone 2 .

DOI Measures for Acquiring Properties
Consistently maintain a rich amount of cash on hand to maintain acompetitively superior position for acquisitions and use the strengthof support by our sponsor to maintain an advantageous position in
negotiations compared to our competitors.
DOI sources diverse property information that lacks any relationshipto the sponsor since it has no business group affiliation with realestate companies, etc.
Study the cultivation of new pipelines such as the acquisition ofpreferred negotiation rights at the time a fund sells properties byinvesting in the debt portion of beneficiary interests that havemonetary debts placed in trust.
Reinforce the alliance with the Daiwa Securities Group anddemonstrate the power of the group through the sourcing of property
information and joint projects. DOI will proactively utilize themarketing ability of the Daiwa Securities Group.

4000
3500
3000
2500
2000
1500
1000
500
0
80
70
60
50
40
30
20
10
0

60 (Note) A Class buildings are buildings with a total floor area of 30,000m2 or more, and B Class(Age: years)
buildings are buildings with a total floor area of 2,000m2 or more, but less than 30,000m2.

I. Overview of Daiwa Office Investment Corporation

9External Growth Measures

Properties Acquired During the 12th Fiscal Period
During the 12th Fiscal Period, DOI acquired E SPACE TOWER for 24 billion yen. As a result, the average age of the portfolio properties at
the time of acquisition of E SPACE TOWER improved from 21.2 years to 20.3 years (weighted average base of acquisition prices).
Furthermore, the portfolio size after acquisition of the property rose to 311,345 million yen, the first time the assets under management
surpassed 300 billion yen since our inception. DOI will continue to strive to raise its presence in the J-REIT market by improving the
profitability in correlation with a further expansion in the assets under management.

E SPACE TOWER [acquired on July 8, 2011]•Tremendous office demand in the area
because a large number of vital IT-relatedcompanies, etc. are gathered in the
Shibuya Station vicinity

Address

Maruyamacho,
Shibuya-ku, Tokyo
Site area
2,998.38m2
Structure and floors S·SRC B1/15F
Total floor area
18,145.04m2
Rentable floor area 13,960.85m2
Completion
October 31, 2002
Acquisition price24.0 billion yen
Occupancy
100.0%(as of November 30, 2011)• About a 7-minute walk from Shibuya
Station on the JR Line and Tokyo Metrolines, and a 3-minute walk from Shinsen
Station of the Keio Inokashira Line

JR Yamanote Line

Tokyu Hands
Seibu
r-Ga Department B
i Stre Store
A
et

Cente

Tokyo Metro
Fukutoshin Line

Shibuya Edge

◦Highly Competitive and Rare
Property
The occupancy upon acquisition of thisproperty was 89.3% but the occupancy grewto 100.0% by responding to the need toincrease rented area among existing tenants to
expand their business. We are convinced thata large office building with advanced building
specs that is young and near Shibuya Station
will continue to maintain a high degree ofcompetitiveness.

roTokyo Met Line
Hanzomontro
Shibuya 109 Shibuya Excelo MeToky a Line
Hotel Tokyu
en et
Ginz
Dog a Stre
Shibuya Sta.
Zak
Mark City
Tok
Me
Keio shira Line
a
yu
k
i
o
In
Toy ji Str
oko eetCerulean Tower
3
Lin
Tokyu Hotele

BunkamuraTo
To kyush De
i L neine n

E SPACE TOWER

Shinsen Sta.

Acquisition of Properties after Sponsor Change
Acquisition
timing9th Period
Daiwa Jimbocho

10th Period
Daiwa NishiShimbashi

Daiwa Kudan

11th Period

12th Period

Daiwa Kayabacho Jimbocho Place
Building

E SPACE TOWER
Total

Property
name

Area

Kanda-Jimbocho,
Chiyoda-ku, Tokyo

Nishi-Shimbashi,
Minato-ku, Tokyo

Kudan Minami,
Chiyoda-ku, Tokyo

Nihombashi-Kayabacho,
Chuo-ku, Tokyo

Kanda-Jimbocho,
Chiyoda-ku, Tokyo

Maruyamacho, Shibuyaku, Tokyo-

Acquisition
price

4,150 million yen

5,000 million yen

4,000 million yen

5,600 million yen

3,550 million yen

24,000 million yen

46,300
million yen

Seller

ORIX JREIT Inc.

Japan Core Asset 2 YK

Shining Nova No. 5 B(SPC)

Daiwa Property KK

Tokyu Land KK

Endeavor Realty Fund YK-Acquisition
dateMar. 10, 2010

Aug. 13, 2010

Sep. 2, 2010

Mar. 25, 2011

Mar. 29, 2011

Jul. 8, 2011-

Age atacquisition

13.0 years

17.0 years

23.4 years

0.9 years

1.1 years

8.7 years

NOI yield at
acquisition

6.0%

5.5%

5.3%

5.1%

(Note) The age at acquisition and NOI return at acquisition are calculated using the weighted average of the acquisition price.

10

5.1%

4.8％

9.7 years(Note)

5.1%(Note)

Overview of Portfolio (portfolio list)
DOI has a portfolio comprised of one A Class building and 35 B Class buildings(as of November 30, 2011)
Property Name

Address

Rentable
Area (m2)(Note 2)

Structure andExecution
No. of Floors Completion of Major
Repairs(Note 3)Acquisition
Price

Appraisal
Value at End
of Period

Ownership TypePML (%)

mm
yen

Share

(mm yen)(Note 4)Land

Building(Note 5)

Five Central Wards of Tokyo (Note 1)

1 Daiwa Ginza

Ginza, Chuo-ku, Tokyo

8,273.05 SRC B3/12F

July 1963

2003

14,1004.5

13,900Fee simple andleaseholdFee simple

9.17

2 Daiwa Ginza Annex

Ginza, Chuo-ku, Tokyo

2,032.99

SRC B3/8F

Aug. 1972

2003

3,050

1.0

2,860

Fee simple

Fee simple

7.46

3 Daiwa Shibaura

Shibaura, Minato-ku, Tokyo

9,626.35 SRC B1/12F

Oct. 1987

8,265

2.7

7,380

Fee simple

Fee simple

5.09

4 Daiwa Minami-Aoyama

Minami Aoyama, Minato-ku, Tokyo

2,715.54 S·SRC B2/5F Sept. 1990

4,550

1.5

3,970

Fee simple

Fee simple

12.79

5 Daiwa Sarugakucho

Sarugakucho, Chiyoda-ku, Tokyo

3,657.43

June 1985

3,000

1.0

2,120

Hamamatsucho, Minato-ku, Tokyo

3,671.25 SRC B2/10F

July 1993

2,865

0.9

2,870

LeaseholdFee simple
Fee simple Compartmentalized
ownership

9.79

6 Daiwa A Hamamatsucho
7 Daiwa Jingumae

Jingumae, Shibuya-ku, Tokyo

2,198.61

Dec. 1997

2,800

0.9

2,010

Fee simple

Fee simple

12.01

8 Daiwa Shibadaimon

Shibadaimon, Minato-ku, Tokyo

2,384.70 SRC·RC B1/7F Nov. 1996

2,578

0.8

2,730

Fee simple

Fee simple

2.99

9 Daiwa Misakicho

Misakicho, Chiyoda-ku, Tokyo

2,137.53

S 8F

July 1996

2,346

0.8

2,470

Fee simple

Fee simple

6.68

10 Daiwa Shimbashi 510

Shimbashi, Minato-ku, Tokyo

2,803.80

SRC B1/8F

Apr. 1974

2,080

0.7

2,250

Fee simple

Fee simple

8.13

11 BPS SQUARE

Tsukiji, Chuo-ku, Tokyo

2,852.97

SRC 10F

Jan. 1996

1,560

0.5

1,560

Fee simple

Fee simple

7.67

12 Daiwa Tsukiji

Tsukiji, Chuo-ku, Tokyo

1,487.82

SRC B1/7F

Jan. 1990

1,240

0.4

1,370

Fee simple

Fee simple

9.70

13 Daiwa Tsukiji 616

Tsukiji, Chuo-ku, Tokyo

2,932.65

SRC B1/9F

Mar. 1994

2,440

0.8

2,400

Fee simple

Fee simple

7.69

14 Daiwa Tsukishima

Tsukishima, Chuo-ku, Tokyo

8,426.85

S 5F

July 1996

7,840

2.5

7,870

Fee simple

Fee simple

10.89

15 Nihombashi MS Bldg.

Nihombashi-Horidomecho, Chuo-ku, Tokyo

2,920.19

SRC B2/7F

Apr. 1993

2,520

0.8

2,330

Fee simple

Fee simple

7.84

16 Daiwa Azabudai

Azabudai, Minato-ku, Tokyo

1,705.44

SRC B2/9F

Apr. 1984

1,600

0.5

1,760

Fee simple

Fee simple

9.57

17 Daiwa Shibuya SS

Shibuya, Shibuya-ku, Tokyo

2,978.87 SRC·S B1/9F

July 1977

2003

3,930

1.3

3,810

Fee simple

Compartmentalized
ownership (100%)

8.67

18 Daiwa Nihombashi Honcho

Nihombashi-Honcho, Chuo-ku, Tokyo

7,419.75 SRC B1/10F

Jan. 1964

2006

7,420

2.4

6,740

Fee simple

Fee simple

8.49

19 Daiwa Ginza 1-chome

Ginza, Chuo-ku, Tokyo

3,757.77 SRC B2/11F

Jan. 1962

2005

4,620

1.5

4,190

Fee simple

Fee simple

10.16

20 Daiwa Kyobashi

Hachobori, Chuo-ku, Tokyo

3,233.37

SRC B1/8F

Oct. 1974

2005

3,460

1.1

2,880

Kojimachi, Chiyoda-ku, Tokyo

2,405.15

SRC B2/9F

Oct. 1987

2,680

0.9

2.250

22 Daiwa Onarimon

Shimbashi, Minato-ku, Tokyo

11,615.37

SRC 9F

Apr. 1973

13,8604.5

14,400Compartmentalized
Fee simple ownership (100%)
Co-ownership Compartmentalized
ownershipCompartmentalized
Fee simple ownership (100%)

10.04

21 Sunline Building No. 7

133,800 43.0

106,000

Co-ownership

Co-ownership

6.42

SRC 8FRC B1/4F

2006

2003

6.03

8.62
5.45

23 Shinjuku Maynds Tower (Note 7) Yoyogi, Shibuya-ku, Tokyo

45,544.04 S·SRC B3/34F Sept. 1995

24 SHIBUYA EDGE

Udagawacho, Shibuya-ku, Tokyo

2,480.65

RC B1/9F

Aug. 2006

5,900

1.9

4,060

Fee simple

Fee simple

3.14

25 Daiwa Kodenmacho

Nihombashi-Odenmacho, Chuo-ku, Tokyo

2,379.31

SRC 8F

Mar. 1985

2,460

0.8

1,920

Fee simple andleaseholdFee simple

7.71

26 Daiwa Jimbocho

Kanda-Jimbocho, Chiyoda-ku, Tokyo

3,166.84

S B1/8F

Mar. 1997

4,150

1.3

2,930

Fee simple

Fee simple

5.58

27 Daiwa Nishi-Shimbashi

Nishi-Shimbashi, Minato-ku, Tokyo

4,815.84 SRC B1/10F

July 1993

5,000

1.6

5,600

Fee simple

Fee simple

6.76

28 Daiwa Kudan

Kudan Minami, Chiyoda-ku, Tokyo

3,104.23

Mar. 1987

4,000

1.3

2,960

Fee simple Compartmentalized
ownership (100%)

7.96

29 Daiwa Kayabacho Building

Nihonbashi-Kayabacho, Chuo-ku, Tokyo

5,899.11 S·SRC B1/8F

Apr. 2010

5,600

1.8

6,110

Fee simple

Fee simple

5.58

30 Jimbocho Place

Kanda-Jimbocho, Chiyoda-ku, Tokyo

2,889.34

Feb. 2010

3,550

1.1

3,640

Fee simple

Fee simple

6.13

31 E SPACE TOWER

Maruyamacho, Shibuya-ku, Tokyo

13,960.85 S SRC B1/15F Oct. 2002

24,0007.7

25,900Fee simple

Fee simple

5.78

175,477.66

287,264 92.3

253,240

Subtotal
Greater Tokyo Area (Note 1)

SRC 9FS 9F

5,468.85

3,414

32 Daiwa Kinshicho

Kameido, Koto-ku, Tokyo

5,468.85

Jan. 1992

3,653

1.2

3,540

Fee simple

Fee simple

7.42

33 Daiwa Higashi-Ikebukuro

Higashi-Ikebukuro, Toshima-ku, Tokyo

4,630.94 SRC·S B1/9F June 1993

2,958

1.0

3,500

Fee simple

Fee simple

5.56

34 Benex S-3

Shin-Yokohama, Kohoku-ku, Yokohama City, Kanagawa

7,470.30 S·SRC B1/12F Feb. 1994

4,950

1.6

3,410

Fee simple

Fee simple

5.66

35 Daiwa Shinagawa North

Kita-Shinagawa, Shinagawa-ku, Tokyo

6,551.33 SRC B1/11F

7,710

2.5

5,670

Fee simple

Fee simple

5.56

19,271

6.2

16,120

4,810

1.5

2,940

Fee simple

Fee simple

11.56

4,810

1.5

2,940

311,345 100.0

272,300

Subtotal

S B1/5F

July 1991

24,121.42

Regional Cities (Note 1)

36 Daiwa Minami-Semba

Minami-Semba, Chuo-ku, Osaka City, Osaka

5,719.54

Subtotal

5,719.54

Total

205,318.62

SRC B1/8F

Sept. 1986

5.62 (Note 6)(Note 1) The Five Central Wards of Tokyo are Chiyoda, Chuo, Minato, Shinjuku and Shibuya Wards (or ku).
The Greater Tokyo Area is Tokyo (excluding the Five Central Wards), and Kanagawa, Chiba and Saitama Prefectures.
Regional Cities are the Osaka area (Osaka, Kyoto and Hyogo Prefectures), Nagoya area (Aichi and Mie Prefectures), ordinance designated cities (Sapporo, Sendai, Niigata, Shizuoka, Hamamatsu, Okayama,
Hiroshima, Kita Kyushu and Fukuoka), and the cities of Hakodate, Asahikawa, Aomori, Morioka, Akita, Koriyama, Iwaki, Utsunomiya, Maebashi, Toyama, Kanazawa, Nagano, Gifu, Otsu, Nara, Wakayama,
Kurashiki, Fukuyama, Shimonoseki, Takamatsu, Matsuyama, Kochi, Kurume, Nagasaki, Kumamoto, Oita, Miyazaki and Kagoshima.
(Note 2) The Rentable Area are indicated as of November 30, 2011 (end of 12th Fiscal Period).
(Note 3) Structure acronyms are S for steel, RC for reinforced concrete and SRC for steel-reinforced concrete.
(Note 4) The values entered in the Appraisal Value at End of Period column are the appraisal values in the real estate appraisal reports with a pricing point of November 30, 2011 (end of 12th Fiscal Period).
(Note 5) The figures entered for PML are the figures in the Portfolio Earthquake PML Assessment Report (December 2011) prepared by NKSJ Risk Management, Inc.
(Note 6) The PML total shows the portfolio PML.
(Note 7) The entrusted real estate corresponding to trust beneficiary interests that DOI owns regarding Shinjuku Maynds Tower is a co-ownership interest equal to 6/7 of the entire property. DOI acquired 3/7 of theco-ownership interest on July 13, 2007 for 65.1 billion yen and 3/7 of the co-ownership interest on November 26, 2007 for 68.7 billion yen. The figure shown for the Rentable Area is figure equivalent to 6/7
of the total Rentable area of the entire building.

I. Overview of Daiwa Office Investment Corporation 11

Overview of Portfolio (portfolio distribution)
DOI concentrates its investment in the Five Central Wards of Tokyo (Chiyoda, Chuo, Minato, Shinjuku
and Shibuya Wards)

Main investment area:
Five Central Wards of Tokyo
Focused investment area:
Greater Tokyo Area
Ikebukuro

33

Toshima-ku

2 Daiwa Ginza Annex

3 Daiwa Shibaura

Shinjuku-ku
Shinjuku Maynds Tower 23

Shinjuku

Shibuya-ku
1 Daiwa Ginza

5 Daiwa Sarugakucho

Daiwa Jingumae 7

6 Daiwa A Hamamatsucho

Daiwa Minami-Aoyama 4
SHIBUYA EDGE 24
Shibuya
E SPACE TOWER 31

Daiwa
Shibuya SS
17

Tokyo
7 Daiwa Jingumae

8 Daiwa Shibadaimon

9 Daiwa Misakicho

10 Daiwa Shimbashi 510

Shinagawa-ku

12

11 BPS SQUARE

12 Daiwa Tsukiji

13 Daiwa Tsukiji 616

16 Daiwa Azabudai

17 Daiwa Shibuya SS

19 Daiwa Ginza 1-chome

21 Sunline Building No. 7

25 Daiwa Kodenmacho

26 Daiwa Jimbocho

27 Daiwa Nishi-Shimbashi

28 Daiwa Kudan

29 Daiwa Kayabacho Building

31 E SPACE TOWER

(as of November 30, 2011)

JR Yamanote Line
JR Saikyo Line
JR Chuo Line
JR Yokosuka Line andSobu Rapid Line

Daiwa Higashi-Ikebukuro

4 Daiwa Minami-Aoyama

15 Nihombashi MS Bldg.

Daiwa Misakicho
5 Daiwa Sarugakucho
9
Jimbocho
30 26 Daiwa Jimbocho
Place
28
Daiwa Kudan

Chiyoda-ku

Daiwa
Nishi-Shimbashi

25 Daiwa Kodenmacho

Kameido

14 Daiwa Tsukishima

32

Daiwa Kinshicho

15 Nihombashi MS Bldg.

21 Sunline Building No. 7

BPS SQUARE
Daiwa Tsukiji
Daiwa Ginza Annex

Kinshicho

18 Daiwa Nihombashi HonchoTokyo

29 Daiwa Kayabacho Building

Chuo-ku

Koto-ku

18 Daiwa Nihombashi Honcho

19 20 Daiwa Kyobashi
2
1

11
12

Daiwa Ginza 1-chome

20 Daiwa Kyobashi

Daiwa Ginza
27
13 Daiwa Tsukiji 616
10
22
Shimbashi 14 Daiwa Tsukishima
Daiwa Onarimon
6
Daiwa Shimbashi 510
8
16
Daiwa A Hamamatsucho
Daiwa Azabudai
Daiwa Shibadaimon
3 Daiwa Shibaura
Minato-ku

24 SHIBUYA EDGE

22 Daiwa Onarimon

Shinagawa
35 Daiwa Shinagawa North

34
36

Benex S-3
Daiwa Minami-Semba

23 Shinjuku Maynds Tower

30 Jimbocho Place

32 Daiwa Kinshicho

33 Daiwa Higashi-Ikebukuro

34 Benex S-3

35 Daiwa Shinagawa North

36 Daiwa Minami-Semba

I. Overview of Daiwa Office Investment Corporation 13

Financial Conditions
Lowered debt costs by un-collateralizing all borrowings and refinancing borrowings with high costs

Financial Strategy
DOI successfully attained unsecured status for all borrowings as of the end of September 2011. Going forward, DOI will continue focusing
on stable financial management to support further growth.

Status of Interest-Bearing Liabilities (as of November 30, 2011)◦ Interest-Bearing Liabilities◦ Debt Cost Rate (Note)
70.0 (%)

Interest-bearing liabilities
59.0

60.8

LTV (based on acquisition price)
54.0

54.4

6.0

50.0

Medium-term, upper-limit LTV target range(billion yen)
160

5.0
40.0

35.3

120
22.6

26.4

27.4

26.9

4.0

30.0

29.8

30.0
3.0

80

20.0

40

10.0

0

0.0

End of End of End of End of End of End of End of End of End of End of End of End of
1st 2nd 3rd 4th
5th
6th
7th
8th
9th 10th 11th 12th
Period Period Period Period Period Period Period Period Period Period Period Period(Note) LTV (based on acquisition price) =Total interest-bearing liabilities / Total acquisition price of properties

2.0
1.0
0.0

◦ Diversification of Repayment Dates

25,00020,000125

Borrowed on
July 8, 2011 to acquire
property
Sumitomo Trustand Banking
Fukuoka BankORIX Bank

10,0003,500

Sumitomo Mitsui
Banking Corporation
Mizuho Trust and Banking
Aozora Bank
Shinsei Bank

2,000

41
15,0001,000

Borrowed on July 8,
2011 to acquire property

Borrowed on September 30,
2011 to unsecure borrowings
Mizuho Corporate Bank
Mitsubishi UFJ
Trust and Banking
Gunma Bank

3,925

Borrowed on September 30,
2011 to unsecure borrowings

85×56

6,000
8,900

19,600Development Bank of Japan
Shinsei Bank
Resona Bank

19,0005,000
11,843

5,000

0

5,481
1,000

4,000

3,000

13th Period 14th Period 15th Period 16th Period 17th Period 18th Period 19th Period◦ Ratio of Long- to
Short-Term Liabilities
End of 12th Fiscal Period

67.7%
Long-term borrowings, etc.

14

5,000

2,000
5,000

3,500
28th Period◦Ratio of Fixed- to
Floating-Rate Borrowings
Current portionof long-termborrowings

Fixedinterest rates

28.2
%
71.8
%

8
7

◦ Borrowing Total by Financial
Institution (including investment corporation bonds)

6

Balance(mm yen)

PeriodShare on-period

5

Financial institution
Aozora Bank

24,600

22.4%

6.5%

Sumitomo Mitsui Banking
Corporation

20,406

18.6%

194.7%

Sumitomo Trust and Banking

8,434

7.7%

144.7%

Resona Bank
2800
Shinsei Bank

7,000

6.4%

0.0%

6,000

5.5%

-40.6%Development Bank of Japan
2400
Kansai Urban Banking
Corporation

5,662

5.2%

106.8%

5,000

4.5%

-9.1%

Mizuho Corporate
2000 Bank

4,900

4.5%

-

Fukuoka Bank

3,000

2.7%

50.0%

Mizuho Trust1600
and Banking

3,000

2.7%

-

Mitsubishi UFJ Trust andBanking
1200
ORIX Bank

3,000

2.7%

-

2,500

2.3%

66.7%

Gunma Bank

1,985

1.8%

100.8%-0.4%

800 and
Chuo Mitsui Trust
Banking

End of 12th Fiscal Period

32.3%

1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th 13th 14th
Period Period Period Period Period Period Period Period Period Period Period Period Period Period(Note) Debt cost rate (annualized: ((Interest expense + Financial related
expenses) / Interest-bearing liabilities)(million yen)
30,000Aozora Bank

Debt cost rate
Expected debt cost rate

7.0

60.0

Expected ratio of interest-bearing liabilities(based on acquisition price)

52.2(%) 8.0

1,970

1.8%

Shizuoka Bank
400

1,000

0.9%

0.0%

Kagawa Bank

988

0.9%

-0.4%

77 Bank

985

0.9%

-0.8%

985

0.9%

-0.4%

8,500

7.7%

0.0%

109,916 100.0%-

0
Taiyo Life Insurance

Investment corporation
bonds 70
Total

(Note) Balances
60 less than a million yen have been rounded down.
The red frame indicates financial institutions providing newloans in the 12th Fiscal Period.
50

Floating interest rates
40
30

4
3
2
1
0

Description of Asset Manager

Organization of Asset Manager (as of February 1, 2012)◦Description◦ Directors and Auditor

Name

Daiwa Real Estate Asset Management Co., Ltd.

President and Representative Director

Akira Yamanouchi

Address

6-2-1 Ginza, Chuo-ku, Tokyo

Vice President and Representative Director

Yoshiki Nishigaki (Head of Advisory Dept.)

Established

October 21, 2004

Vice President and Representative Director

Paid-in Capital

200 million yen

Yuji Shinozuka(Head of Finance & Business Planning Dept.)

President and Representative Director Akira Yamanouchi

Director

Atsuko Takahashi (Construction Manager)

Directors

8 (5 executives, 2 non-executives, 1 auditor)

Director

Naoyuki Owa (Head of Administrative Dept.)

Employees

42

Director (non-executive)

Toshihiro Matsui

Registration of Financial Instruments
No. 355 (Kinsho), Director-General, Kanto Local Finance Bureau
Business Operator

Director (non-executive)

Hikaru Sakagami

Auditor (non-executive)

Toshihiko Onishi

Building Lots and Buildings
Transaction Business License

No. (2)-83920, Governor of Tokyo◦ Organizational Chart

Discretionary Agent for Real
Estate Transaction Approval

No. 34, Minister of Land, Infrastructure, Transport and Tourism

Association Membership

Member of The Investment Trusts Association, Japan
Member of Japan Securities Investment Advisers Association

Shareholders’ Meeting
Auditors
Board of Directors
Compliance Committee
Investment Committee
President andRepresentative Director

Construction Manager

Investment Management
Department

Marketing Department

Acquisitions Team

Marketing activities
concerning trust
beneficiary rights
business
Relation with tenantsof DOI owned
properties

Matters relating to theestablishment andexecution of
construction plans for
assets of DOI

Formulation of
investment policies
Asset acquisition anddisposalAsset Management
Team
Formulation of asset
leasing andmanagement policies
Asset leasing andmanagement

Administrative
Department

Business Planning
Department

Advisory Department

Finance and IR Team

Operation of DOI’s
General Meeting ofUnitholders and Boardof Directors
Operation of General
Meeting of
Shareholders, Board of
Directors andCommittees
Submission of
applications for various
permits, licenses,
approvals,
registrations, etc.
stipulated by laws andregulations
Storage andmanagement of
documents andinformation
Labor and humanresources matters

Research and analysisof the real estatemarket, retail industry,and real estate
investment trust
marketAnalysis of businesschallenges of DOI
Matters relating to thedevelopment of
medium-term asset
management plans
and annual asset
management plans
Development andrevision of theInvestment Guidelines
Matters relating to theprovision of new
businesses
Overseeing of DOI’s
risk management

Matters relating toadvisory concerning
formulation of
replacement plans orincome and expenseplans for customers’
assetsMatters relating toadvisory concerning
disposal of customers’
assetsMatters relating toadvisory concerning
management,
operation, leasing andmaintenance andrenovation ofcustomers’ assets
Matters relating toreporting and otherduties being conducted
for investors of private
funds

Matters relating tofinancing, asset liability
management andmanagement of surplus
funds
Matters relating todisclosure, IR activities
and formulation of the
IR strategy
Accounting Team

Budget andperformance
management of
portfolio

Internal Control OfficeFinance Department

Matters relating tofinancial results andaccounting, cash
allotment, accounting
audits, and preparationof financial documents
Management of budget
and performance
Matters concerning
accounting and financeof the Asset Manager

Investment
Planning Team

Compliance Officer

Support System Backed by Sponsor Cooperation
Sponsor Support

100% ownership
Sponsor support agreement

Asset Manager

Daiwa Real Estate
Asset Management
Instruction

Property Management
Companies

Optimal application of financial market
know-how possessedby Daiwa Securities Group

Daiwa Securities
Group Inc.
13.1% ownership

Assetmanagement
contract

Investment Corporation

Borrowings

General administrationaffairs contact

Daiwa Office
Investment Corporation

Interest

Management
contract

Listed on TSE REIT Market
Code: 8976

Manager of Unitholder Registry, etc.
Special account management institution

Chuo Mitsui
Trust and Banking

Investment
Distributions

Financial institutions

Individual investors
Institutional investors

General Administrator
Asset Custodian

Sumitomo
Trust and Banking
I. Overview of Daiwa Office Investment Corporation 15

Investment Unit and Investor Information

History of Investment Unit Price(yen) 400,000

8,000 (units)
Investment unit price (left axis)

Trading volume (right axis)

350,000

7,000

300,000

6,000

250,000

5,000

200,000

4,000

150,000

3,000

100,000

2,000

50,0001,000

02009 2010
Dec. Jan. Feb.

0
Mar.

Apr.

May

June

July

Aug. Sept.

Oct.

Nov.

2011
Dec. Jan. Feb.

Mar.

Apr.

May

June

July

Aug. Sept.

Oct.

Nov.

Overview of Investment Units and Unitholders (as of November 30, 2011)
146×57
Individuals/others 37,326 units (9.4%)
Foreigners 44,577 units (11.3%)
No. of investment
units by investor type
Total:

Financial institutions 126,308 units (31.9%)

395,798 units

Securities firms 55,027 units (13.9%)
Other domestic corporations 184 (1.5%)
Financial institutions 22 (0.2%)

No. of unitholders
by investor type
Total:

Other domestic
units (33.5%)
corporations 132,560

Individuals/others 11,589 (97.2%)

11,928Foreigners 111 (0.9%)
Securities firms 22 (0.2%)

Top Ten Unitholders (as of November 30, 2011)
Name of Investor

Number of Units Owned

Percentage Share

1.

K.K. Columbus

68,905 units

17.4%

2.

Daiwa PI Partners Co. Ltd.

60,000 units

15.2%

3.

Japan Trustee Services Bank, Ltd. (trust account)

58,514 units

14.8%

4.

Daiwa Securities Group Inc.

51,893 units

13.1%

5.

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

27,788 units

7.0%

6.

Trust & Custody Services Bank, Ltd. (securities investment trust account)

22,658 units

5.7%

7.

0 International
Goldman Sachs

8.
9.

8000

20

The Master Trust Bank of Japan, Ltd. (trust account)
Nomura Bank (Luxembourg) S.A.

10. The Fuji Fire and Marine Insurance Co., Ltd.

40

7000
6000
5000

80

3.3%

7,878 units

2.0%

4000

6,548 units

1.7%

3000

5,369 units

1.4%

2000

16

60 units
13,124

1000
0

100

Note: The percentage share figures are rounded to the first decimal place.

II.

Asset Management Report

1. Management Status and Other Performance Highlights Data
Settlement Period(

12th Period 11th Period 10th Period 9th Period
From June 1, 2011
To Nov. 30, 2011)(

From Dec. 1, 2010
To May 31, 2011)(

From June 1, 2010
To Nov. 30, 2010)(

From Dec. 1, 2009
To May 31, 2010)(

8th Period
From June 1, 2009
To Nov. 30, 2009)

(1) Operating Performance(Millions of yen, except per unit data or where otherwise indicated)
Operating revenues
7,606
6,759
6,424
6,986
7,744
Rental revenues
7,551
6,715
6,375
6,610
7,652
Operating expenses
4,289
3,935
3,942
4,027
3,841
Property-related expenses
3,472
3,166
3,195
3,249
3,010
Operating income
3,317
2,824
2,482
2,959
3,903
Ordinary income
1,768
1,588
1,274
1,774
2,711
Net income
1,767
1,453
1,282
2,076
2,710
(2) Properties, etc. (as of end of period)
Total assets
323,218
298,626
294,562
283,867
286,901[period-over-period percentage change][+8.2%][+1.4%][+3.8%][−1.1%][+4.0%]
Interest-bearing liabilities
109,917
86,25082,776
72,40972,531
Net assets
200,548
200,234
200,063
200,857
201,491[period-on-period percentage change][+0.2%][+0.1%][−0.4%][−0.3%][+5.0%]
Unitholders’ capital
198,781
198,781
198,781
198,781
198,781(3) Distributions
Total distribution amount
1,767
1,453
1,282
2,076
2,710
Dividend payout
100.0%
100.0%
100.0%
100.0%
100.0%(4) Per Unit Information
Total number of units issued (units)395,798
395,798
395,798
395,798
395,798
Net assets per unit (yen)506,693505,900
505,469
507,475
509,075
Distribution per unit (yen)
4,464
3,671
3,240
5,246
6,847
Distribution amount from earnings per unit (yen)
4,464
3,671
3,240
5,246
6,847
Distribution amount in excess of earnings per unit (yen)
–
–
–
–
–
(5) Financial Indicators
ROA
0.6%
0.5%
0.4%
0.6%
1.0%
Notes 2and3[annual rate][1.1%][1.1%][0.9%][1.2%][1.9%]
ROE
0.9%
0.7%
0.6%
1.0%
1.4%
Notes 3and 4[annual rate][1.8%][1.5%][1.3%][2.1%][2.7%]
Capital ratio
62.0%
67.1%
67.9%
70.8%
70.2%
[period-over-period basis points change][−5.0%][−0.9%][−2.8%][+0.6%][+0.6%]LTV (loan to value)
34.0%
28.9%
28.1%
25.5%
25.3%
Property leasing cash flows (NOI)
Note 5
5,427
4,830
4,416
4,546
5,822
(6) Other Referential Information
Number of investment properties
36
35
33
31
30
Number of tenants
Note 6
340
334
324
298
288
205,318.62 191,346.43 182,548.82 174,928.31 171,951.76
Total rentable area (m2)Occupancy rate
Note 7
92.4%
95.4%
95.9%
85.7%
92.8%
Depreciation
1,348
1,281
1,236
1,185
1,180
Capital expenditures
240
540
364
568
302
(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)

Consumption taxes are not included in operating revenues, etc.
ROA: Ordinary income ÷ [(Total assets at beginning of period + Total assets at end of period) ÷ 2] × 100
Figures for the 8th Fiscal Period are the annualized figures calculated based on 183 days of management.
Figures for the 9th Fiscal Period are the annualized figures calculated based on 182 days of management.
Figures for the 10th Fiscal Period are the annualized figures calculated based on 183 days of management.
Figures for the 11th Fiscal Period are the annualized figures calculated based on 182 days of management.
Figures for the 12th Fiscal Period are the annualized figures calculated based on 183 days of management.
ROE: Net income ÷ [(Net assets at beginning of period + Net assets at end of period) ÷ 2] × 100
Property leasing cash flows (NOI): Rental revenues − Property-related expenses + Depreciation
Number of tenants is the number of end tenants. When there is a tenant occupying multiple buildings, the concerned tenant iscounted and stated for each individual building.
Occupancy rate: Total leased area ÷ Total rentable area

II. Asset Management Report 17

2. Developments in Asset Management in the Fiscal Period under Review(1) Brief History of the Investment Corporation
Daiwa Office Investment Corporation (former DA Office Investment Corporation; hereinafter “DOI”) wasestablished on July 11, 2005 in accordance with the Act on Investment Trusts and Investment Corporations (ActNo. 198 of 1951; including amendments thereto) with Daiwa Real Estate Asset Management Co., Ltd.
(hereinafter “DREAM”; former, K.K. daVinci Select) as the organizer. After its establishment, DOI implemented an
additional issuance of investment units through a public offering (99,600 units) on October 18, 2005 and thenlisted on the Tokyo Stock Exchange, Inc. (“TSE”) Real Estate Investment Trust Section (securities code: 8976)
the following day.
Though initial assets under management were 79,573 million yen (sum total of acquisition prices), subsequent
activities, such as the additional acquisition of properties and replacement of portfolio properties, resulted in theassets under management amounting to 311,345 million yen (sum total of acquisition prices) as of the last dayof November 2011.
DOI strives to secure stable revenues and maximize returns for unitholders based on a clear portfolio
development policy of specializing in investment in office buildings, with a particular focus on investment in A
Class buildings (refers to buildings with a total floor area of 30,000m2 or more) and B Class buildings (refers tobuildings with a total floor area of 2,000m2 or more, but less than 30,000m2) situated in downtown Tokyo, as
well as through dedicated efforts to heighten tenant satisfaction levels.
(2) Investment Environment and Management Performance(A) Investment Environment (from June 1, 2011 to November 30, 2011)
Despite concerns over the sovereign risk in Europe, the Japanese business conditions were on amodest recovery during the fiscal period under review, partly due to an increase in demand forreconstruction following the Great East Japan Earthquake.
In terms of the office leasing market, supply and demand was not well-balanced because of
construction completion of development projects primarily in central Tokyo from 2011 to 2012. Vacancy
rates remain high and new advertised rents are on a downward trend due to uncertainty of forecasting on
the economy.
In the office transaction market, the purchase demand by real estate companies and funds (including
REITs) remained high as a result of financial institutions’ easing attitudes toward lending. Postponements
and such of transactions, etc. were seen immediately following the Great East Japan Earthquake, but themarket is gradually returning to a calm state and transactions have resumed.
(B) Management Performance
To increase the long-term EPS (EPS (net income per unit) after deducting gain on sales of properties)
over the medium to long term, DOI worked on “external growth” which aims to boost revenue throughacquiring and selling properties, and “internal growth” which aims to maximize income generating fromexisting properties.
Concerning external growth, DOI proactively engaged in property acquisition activities and purchased“E SPACE TOWER” (acquisition price: 24,000 million yen) on July 8, 2011. The acquisition contributed to
the long-term EPS.
As a result of the acquisition, DOI’s assets under management at the end of the 12th Fiscal Period (asof November 30, 2011) totaled 36 properties, the sum total of acquisition prices amounted to 311,345
million yen.
Concerning internal growth, in spite of the severe office leasing market conditions and occurrence oftenant relocations in part, DOI tried to improve tenant satisfaction through developing good relations withtenants and strengthening cooperation with leasing brokers and property managers. As a result, theoccupancy rate at the end of the 12th Fiscal Period was maintained at 92.4%.

18

(3) Overview of Capital Procurement
On June 30, 2011, DOI borrowed 5,000 million yen from Kansai Urban Banking Corporation to refinance theborrowing of 5,500 million yen on June 30, 2008. Further, on July 8, 2011, DOI borrowed 26,000 million yen in
total from Sumitomo Mitsui Banking Corporation, Mizuho Trust & Banking Co., Ltd., Aozora Bank, Ltd.,
Shinsei Bank, Limited, The Sumitomo Trust and Banking Co., Ltd., The Bank of Fukuoka, Ltd. and ORIX Bank
Corporation (former Orix Trust and Banking Corporation; hereinafter “ORIX Bank Corporation”) to acquire a
property, etc. Further, on August 31, 2011, DOI borrowed 3,000 million yen from Resona Bank, Limited torefinance the borrowing of 3,000 million yen on August 29, 2008.
On September 30, 2011, DOI borrowed 13,900 million yen in total from Development Bank of Japan, Inc.,
Shinsei Bank, Limited, Mizuho Corporate Bank, Ltd., Mitsubishi UFJ Trust and Banking Corporation and The
Gunma Bank, Ltd. to refinance the borrowing of 3,500 million yen from Mizuho Bank, Ltd. on September 30,
2008 and to repay in total of 12,100 million yen loans prior to their maturity, 7,100 million yen borrowed from
Shinsei Bank, Limited on February 20, 2009 and 5,000 million yen borrowed from American Life Insurance
Company on September 2, 2008. Moreover, the other repayments were paid using cash on hand.
In addition, contractual repayments of 41.25 million yen in total were made to Development Bank of Japan
Inc. and The Kagawa Bank, Ltd. on August 31, 2011, and 7.5 million yen was made to The 77 Bank, Ltd. on
September 16, 2011. Moreover, contractual repayments of 84.375 million yen in total were made to Sumitomo
Mitsui Banking Corporation, The Sumitomo Trust and Banking Co., Ltd., Development Bank of Japan Inc.,The Chuo Mitsui Trust and Banking Company, Limited, Taiyo Life Insurance Company and The Gunma Bank,
Ltd. on November 30, 2011.
As a result, the balance of interest-bearing liabilities outstanding at the end of the 12th Fiscal Period stoodat 109,916.875 million yen (long-term loans payable: 101,416.875 million yen; investment corporation bonds:
8,500 million yen). Furthermore, of long-term loans payable, the balance of the current portion of interestbearing liabilities outstanding stood at 35,535.625 million yen (including 166.875 million yen in contractual
repayments).
(4) Capital Expenditures During the 12th Fiscal Period
The following summarizes the major construction work that constitutes capital expenditures during the 12th
Fiscal Period. Capital expenditures amounted to 240 million yen and, combined with the 290 million yen in
repair expenses, totals 530 million yen in construction work implemented.
Name of Property(location)
Shinjuku Maynds Tower(Shibuya-ku, Tokyo)
Shinjuku Maynds Tower(Shibuya-ku, Tokyo)
Nihombashi MS Building(Chuo-ku, Tokyo)
Daiwa Ginza 1-chome(Chuo-ku, Tokyo)

Expenditure(millions of yen)

Purpose

PeriodConstruction work for replacement ofstairs passage guide light
Construction work for repair of ceiling ofwind shelter room in entrance
Construction work for repair of
humidification equipment
Construction work for replacement of
air-condition equipment on 2nd floor

From: Nov. 2011
To: Nov. 2011
From: July 2011
To: Nov. 2011
From: Oct. 2011
To: Nov. 2011
From: Sep. 2011
To: Oct. 2011
From: June 2011
To: Nov. 2011

Other
Total

24
16
12
12
176
240

(5) Overview of Financial Performance and Distributions
As a result of the management described above, for the 12th Fiscal Period, DOI recorded 7,606 million yen in
operating revenue, 3,317 million yen in operating income, 1,768 million yen in ordinary income and 1,767 million
yen in net income.
Concerning distributions, to ensure that the cash dividend would be deducted from taxable income (Article
67-15 of the Special Measures Concerning Taxation (Act No. 26 of 1957; including amendments, hereinafter“Special Taxation Measures Act”)), DOI decided to distribute the entire retained earnings at the current period
end, excluding fractions of the distribution amount per unit that are less than 1 yen. Accordingly, DOI declared a
distribution amount per unit of 4,464 yen.

II. Asset Management Report 19

3. Future Management Policy and Tasks(1) Investment Environment
Boosted by the increasing demand accompanying the post-earthquake reconstruction efforts, the Japanese
economy is expected to be on a gradual recovery, as production activities and consumption will recover fromthe drop caused by the Great East Japan Earthquake. On the other hand, there are still some risks inJapanese economy because of the increased sovereign risk in Europe, the rapid yen appreciation and thepower supply restrictions.
Under such an outlook, the office leasing market seems to maintain an excess of supply because lots ofdevelopment projects in central Tokyo will have been completed by 2012. In the office transaction market,
acquisition demand in real estate companies and funds (including REITs) is expected to be strong due tofinancial institutions’ easing attitudes toward lending.
(2) Management Policy and Tasks(A) Strategy for Managing Existing Properties
Under such office leasing market conditions, the tenant is also expected to be more selective withproperties. Consequently, DOI will carry out operational management under the following policy in an aim
to enhance the competitiveness of existing properties and thereby increase the long-term EPS over the
medium to long term.
(a) Maintain and raise occupancy rates
Strive to maintain and raise occupancy rates through the provision of office environments of hightenant satisfaction levels by maintaining the quality of buildings and equipment and proactively
implementing renovations, etc. of common-use areas and thereby lowering vacancy risks.
(b) Maintain and raise profitability
Aim to secure stable revenue over the medium to long term through further strengthening good
relationships with existing tenants, as well as proactively tapping the needs of new tenants bydiscerning the market environment.
(c) Lower operational management costs
Strive to lower operational management costs based on maintaining the high level of tenantsatisfaction with office environments. To achieve this, DOI will implement efficient operational
management and reviewing systematic construction work leveraging the economies of scale obtained
from external growth.
(B) Investment Strategy for New Properties
Based on various external growth strategies, DOI will concentrate its investment in A Class and B Classbuildings considering a balance between the financing and purchasing market situation. In principal, DOI
will invest in properties around Tokyo, but will also look into investment in competitive properties in theareas other than Tokyo from a viewpoint of territorially-distributed investments.
As pipelines, in addition to expanding its own information-sourcing channels, DOI will search forproperties that meet its investment criteria by proactively gathering real estate transaction market
information through expanding partnerships with DREAM and Sponsor Group and utilizing the Group’s
extensive network of clients.
During the 12th Fiscal Period, DOI acquired E SPACE TOWER, which is situated in the five central
wards of Tokyo. DOI believes the acquisition will contribute to further stabilization and enhancement of
the portfolio. DOI will continue to strive to acquire properties that are in line with the investment strategy
described above.

20

(C) Financial Strategy
DOI will conduct disciplined financial management based on the following:(a) In principle, control leverage by keeping LTV ratio within the range of 40% to 50% at maximum.
(b) In principle, diversify the payment date, targeting 30 billion yen as the maximum amount of interestbearing liabilities that shall become due during any single fiscal period.
(c) In principle, aim to have long-term loans at least 70% to total loans.
(d) Diversify lenders, which shall mainly be domestic financial institutions.
(e) Pursuant to its fund management rules, maintain stability in its financial standing by separatingnecessary funds, such as the amount of distributions paid, from working capital.
(D) Schedule of Capital Expenditures
The following table lists major capital expenditures in conjunction with the refurbishment or renewal work
planned for the future on the properties held as of November 30, 2011. Please note that the amounts
below include costs that will be recognized as expenses.

Name of Property(location)

Estimated Cost
(millions of yen)
Payment Cumulative
for theamountTotal
current
paid
periodPurposeEstimated Period

Daiwa Sarugakucho(Chiyoda-ku, Tokyo)

Renovation work for air
conditioning, lighting energy
conservation and common area

From: Jan. 2012
To: Mar. 2012

400

–

–

Shinjuku Maynds Tower(Shibuya-ku, Tokyo)

Introduction of heat source

From: Dec. 2011
To: May 2012

270

–

–

Daiwa Nishi-Shimbashi(Minato-ku, Tokyo)

Updating package air
conditioners

From: June 2011
To: Dec. 2011

150

–

–

Daiwa Jimbocho(Chiyoda-ku, Tokyo)

Renovation work for common
area

From: Dec. 2011
To: Jan. 2012

50

–

–

Shinjuku Maynds Tower(Shibuya-ku, Tokyo)

Construction work for energy
Conservation (lighting of parking)From: Jan. 2012
To: May 2012

21

–

–

II. Asset Management Report 21

III. Balance Sheets
As of November 30, 2011 and May 31, 2011
(Thousands of yen)

As ofNovember 30, 2011

As of
May 31, 2011

AssetsCurrent Assets:
Cash and cash equivalents [Notes 5 and 12]

16,235,183

14,535,324

Tenant receivables

185,289

174,669

Consumption taxes refundable

84,178–Prepaid expenses

391,089

626,451

Deferred tax assets

20

21

70,241

230,462

16,966,000

15,566,927

Land

244,177,050

225,160,518

Buildings and structures

68,103,138

62,680,143

Machinery and equipment

781,924755,291

Tools, furniture and fixtures

76,00074,031

Construction in progress

16,14927,739

Other

9,759

9,759

(12,237,707)(10,889,507)

4,970,291

4,970,291

305,896,604

282,788,265

1,286

1,250

Lease and guarantee deposits in trust

113,684

113,684

Long-term prepaid expenses

190,532

92,645

Deferred investment corporation bond issuance costs

33,91942,502Other

15,551

21,075

Total Other Assets

354,972

271,156

323,217,576

298,626,348

Other
Total Current Assets
Investment Properties, at cost: [Notes 4, 5 and 13]

Less: accumulated depreciation
Leasehold rights
Total Investment Properties, net
Other Assets:
Right of trademark

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

22

(Thousands of yen)

As ofNovember 30, 2011

As of
May 31, 2011

Liabilities
Current Liabilities:
Operating accounts payable

546,670875,740

35,535,625

38,958,750

309,642

245,157

988

850

Accrued consumption taxes

9,217

43,827

Rent received in advance

862,005

716,018–

63,721

173,277

236,082

37,437,424

41,140,145

Investment corporation bonds [Notes 7 and 12]8,500,000

8,500,000

Long-term debt [Notes 5, 7 and 12]

65,881,250

38,791,250

Tenant security deposits [Note 12]

10,849,254

9,956,757

1,622

4,075

85,232,126

57,252,082

122,669,550

98,392,227

198,780,951

198,780,951

1,767,075

1,453,170

200,548,026

200,234,121

Total Net Assets

200,548,026

200,234,121

Total Liabilities and Net Assets

323,217,576

298,626,348

Long-term debt due within one year [Notes 5, 7 and 12]
Accounts payable – other
Income taxes payable

Provision for loss on disaster
Other
Total Current Liabilities
Long-Term Liabilities:

Other
Total Long-Term Liabilities
Total Liabilities

Net Assets [Note 6]
Unitholders’ Equity:
Unitholders’ capital
Units authorized: 2,000,000 units
Units issued and outstanding: 395,798 units
Retained earnings
Total Unitholders’ Equity

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

III. Balance Sheets 23

IV. Statements of Income
For the six months ended November 30, 2011 and May 31, 2011
(Thousands of yen)

For the six months ended
November 30, 2011

For the six months ended
May 31, 2011

7,550,598
55,182

6,715,059
43,728

7,605,780

6,758,787

3,471,700
607,648
15,845

3,165,924
542,152
14,80966,47940,4605,400
81,22882,61336,2235,400
87,886

Total Operating Expenses
Operating Income
Non-Operating Revenues and Expenses
Non-Operating Revenues:
Interest income
Reversal of distribution payable
Other income
Total Non-Operating Revenues
Non-Operating Expenses:
Interest expense
Interest expense on investment corporation
bonds
Borrowing expenses
Other

4,288,760
3,317,020

3,935,007
2,823,780

712
5,492
5,269

1,465
6,029
1,686

11,4739,180

761,640

729,851

96,951

96,481

692,923
9,080

410,557
8,536

Total Non-Operating Expenses
Ordinary Income

1,560,594
1,767,899

1,245,425
1,587,535

–

610

–

610

–
–

70,34363,721–

134,064

Income Before Income Taxes
Income taxes – current
Income taxes – deferred

1,767,899

1,454,081

1,019
1

1,043
(3)

Total Income Taxes [Note 10]
Net Income
Retained Earnings Brought Forward

1,020
1,766,879
196

1,040
1,453,041
129

Retained Earnings at End of Period

1,767,075

1,453,170

Operating Revenues and Expenses
Operating Revenues: [Note 8]
Rental revenues
Other revenues related to property leasing
Total Operating Revenues
Operating Expenses:
Property-related expenses [Note 8]
Asset management fees
Asset custody fees
Administrative service fees
Trust fees
Directors’ compensation
Other operating expenses

Extraordinary Income:Gain on donation of investment property
Total Extraordinary Income
Extraordinary Losses: [Note 9]
Loss on disaster
Provision for loss on disaster
Total Extraordinary Losses

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

24

IV. Statements of Income

V.

Statements of Changes inUnitholders' Equity

For the six months ended November 30, 2011 and May 31, 2011
(Thousands of yen)

Number of
Units
Balance as of May 31, 2011

Unitholders’CapitalRetained
Earnings

Total

395,798

198,780,951

1,453,170

200,234,121

Cash dividends declared––(1,452,974)(1,452,974)

Net income––

1,766,879

1,766,879

395,798

198,780,951

1,767,075

200,548,026

Balance as of November 30, 2011		

(Thousands of yen)

Number of
Units
Balance as of November 30, 2010

Unitholders’CapitalRetained
Earnings

Total

395,798

198,780,951

1,282,515

200,063,466

Cash dividends declared––(1,282,386)(1,282,386)

Net income––

1,453,041

1,453,041

395,798

198,780,951

1,453,170

200,234,121

Balance as of May 31,2011

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

V. Statements of Changes in Unitholders’ Equity 25

VI. Notes to Financial Statements
For the six months ended November 30, 2011 and May 31, 2011

Note 1 – Organization and Basis of Presentation
Organization
Daiwa Office Investment Corporation (former DA Office Investment Corporation: hereinafter, “DOI”) wasestablished on July 11, 2005 as an investment corporation under the Law Concerning Investment Trusts andInvestment Corporations of Japan (hereinafter, the “Investment Trust Law of Japan”) by the founder (the former
daVinci Select; presently, Daiwa Real Estate Asset Management (hereinafter, “DREAM”)).
DOI is an externally managed real estate fund, established as an investment corporation. DREAM, as DOI’s
asset management company, is engaged in acquiring, managing, leasing, and renovating office properties.
Daiwa Securities Group Inc. currently owns 100% of DREAM.
On October 18, 2005, DOI had raised approximately 49,498,710 thousand yen through an initial public offeringof units. Those units are listed on the J-REIT section of the Tokyo Stock Exchange.
As of November 30, 2011, DOI had ownership or beneficiary interests in 36 office properties with approximately
205,319 square meters of rentable office space and had leased office space to 340 tenants engaged in a varietyof businesses. The occupancy rate for the office properties was approximately 92.4%
Basis of Presentation
The accompanying financial statements have been prepared in accordance with the provisions set forth in theInvestment Trust Law of Japan and its related accounting regulations, and in conformity with accounting
principles generally accepted in Japan (hereinafter, “Japanese GAAP”), which are different in certain respects as
to application and disclosure requirements of International Financial Reporting Standards.
The accompanying financial statements have been restructured and translated into English from the financial
statements of DOI prepared in accordance with Japanese GAAP. Some supplementary information included in
the statutory Japanese language financial statements, but not required for fair presentation, is not presented in
the accompanying financial statements. DOI does not prepare consolidated financial statements, as DOI has no
subsidiaries.

Note 2 – Summary of Significant Accounting Policies
Investment Properties
Investment properties are recorded at cost, which includes the allocated purchase price, related costs andexpenses for acquisition of the office properties and the beneficiary interests of properties in trust. Property andequipment balances are depreciated using the straight-line method over the estimated useful lives. The
estimated useful lives of the principal tangible fixed assets (including assets held in trust) are as follows:
Buildings and structures
Machinery and equipment
Tools, furniture and fixtures

As of November 30, 2011
2-56 years
2-23 years
3-18 years

As of May 31, 2011
2-50 years
2-23 years
3-18 years

Costs related to the renovation, construction and improvement of properties are capitalized. Expenditures forrepairs and maintenance which do not add to the value of a property or prolong its useful life are expensed as
incurred.
Deferred Investment Corporation Bond Issuance Costs
Deferred investment corporation bond issuance costs are amortized using the straight-line method over therespective terms of the bonds.
Provision for Loss on Disaster
Provision for loss on disaster is recorded at an estimated amount as of the fiscal period ended May 31, 2011 inorder to provide for expected expenditure for recovery costs, etc. related to the Great East Japan Earthquake.
Income Taxes
Income taxes are accounted for on the basis of income for financial statement purposes. The tax effect of
temporary differences between the amounts of assets and liabilities for financial statements and for income tax
purposes is recognized as deferred taxes.

26

Real Estate Taxes
Real estate taxes are imposed on properties on a calendar year basis and expensed when incurred. In terms of
newly purchased properties, DOI capitalizes a portion of the real estate taxes that relate to a period from thepurchase date of each property until the end of the calendar year as part of the acquisition cost of the relevant
property. Capitalized real estate taxes amounted to 57,362 thousand yen for the period ended November 30,
2011.
Revenue Recognition
Operating revenues consist of rental revenues including base rents and common area charges, and otheroperating revenues such as utility charge reimbursements, parking space rental revenues and other income.
Rental revenues are generally recognized on an accrual basis over the life of each lease. Utility charge
reimbursements are recognized when earned and their amounts are reasonably estimated.
Hedge Accounting
DOI conducts derivative transactions in order to hedge against risks defined in its Articles of Incorporation basedon its risk management policy. DOI utilizes derivative financial instruments such as interest-rate cap agreements
only for the purpose of hedging its exposure to changes in interest rates. DOI applies special treatment to theinterest-rate cap contract that meets the criteria for such special treatment. Under the special treatment, interestrate cap is not remeasured at fair value: instead, the net amount paid or received under the interest-rate cap
contract is recognized and included in interest expense. In addition, assessment of the effectiveness of thehedge has been omitted as the interest-rate cap agreement meets the criteria for the special treatment.
Accounting Treatment of Beneficiary Interests in Trust Assets Including Real Estate
For trust beneficiary interests in real estate, all accounts of assets and liabilities within assets in trust, as well as
all income generated and expenses incurred from assets in trust, are recorded in the relevant balance sheet andincome statement accounts.
Consumption Taxes
Consumption taxes received and paid are not included in the accompanying statements of income.

Note 3 – Additional Information
Accounting Standards for Accounting Changes and Error Corrections
DOI has applied the “Accounting Standard for Accounting Changes and Error Corrections” (AccountingStandards Board of Japan (hereinafter, “ASBJ”) Statement No. 24; December 4, 2009) and the “Guidance on
Accounting Standard for Accounting Changes and Error Corrections” (ASBJ Guidance No. 24; December 4,2009), starting with accounting changes and corrections of past errors to be conducted after the beginning of
the fiscal period ended November 30, 2011.

Note 4 – Schedule of Tangible Assets of Investment Properties
Investment properties as of November 30, 2011 and May 31, 2011 consisted of the following:
As of November 30, 2011

(Thousands of yen)

As of May 31, 2011

Acquisition
costs

Accumulated
depreciation

Book value

Acquisition
costs

Accumulated
depreciation

Book valueLand

244,177,050–

244,177,050

225,160,518–

225,160,518

Buildings andstructures
Machinery andequipment
Tools, furniture andfixtures
Construction inprogress

68,103,138(11,912,860)

56,190,278

62,680,143(10,598,765)

52,081,378

781,924(285,121)

496,803755,291(256,905)

498,386

76,000(29,967)

46,03374,031(24,078)

49,953

16,149–16,14927,739–27,739

Other

9,759

(9,759)–9,759(9,759)–Total

313,164,020(12,237,707)

300,926,313

288,707,481(10,889,507)

277,817,974

VI. Notes to Financial Statements 27

Note 5 – Schedule of Pledged Assets and Secured Liabilities
There are no pledged assets and secured liabilities as of November 30, 2011 as DOI released all security
interests on September 30, 2011.
For the period ended May 31, 2011 pledged assets and secured liabilities were as follows:
Pledged assets		(Thousands of yen)
As of May 31, 2011
Cash and cash equivalents

3,787,370

Land

163,817,609

Buildings and structures

33,321,441

Machinery and equipment

367,028

Tools, furniture and fixtures

35,124

Construction in progress

17,044

Leasehold rights
Total
Secured liabilities		

2,281,476
203,627,092(Thousands of yen)
As of May 31, 2011

Long-term debt due within one year

38,951,250

Long-term debt

20,806,250

Total

59,757,500

Note 6 – Net Assets
DOI issues only non-par value units in accordance with the Investment Trust Law of Japan and all of the issue
prices of new units are designated as stated capital. DOI maintains at least 50,000 thousand yen as the minimum
amount of net assets, as required by the Investment Trust Law of Japan.

Note 7 – Long-Term Debt
Long-term debt as of November 30, 2011 and May 31, 2011 consisted of the following:
As of
November 30,
2011
Secured loans due 2012 to 2013, principally from banks and insurance–companies with interest rates mainly ranging from 1.3% to 2.5%
Unsecured loans due 2012 to 2015, principally from banks and insurance
101,416,875
companies with interest rates mainly ranging from 0.7% to 2.5%

(Thousands of yen)

As of
May 31, 2011

17,992,500

2.8% unsecured bond due 20193,500,000

3,500,000

1.9% unsecured bond due 2013

5,000,000

5,000,000

109,916,875

86,250,000

Total[Note] The interest rate presented is the spot rate as of November 30, 2011.

The annual maturities of long-term debt as of November 30, 2011 were as follows:
Due within one year
Due after one to two years
Due after two to three years
Due after three to four years
Due after four to five years
Due after five years

28

59,757,500(Thousands of yen)

35,535,625
28,981,250
33,900,000
8,000,000–
3,500,000

Note 8 – Operating Revenues and Property-Related Expenses
Operating revenues and property-related expenses for the periods ended November 30, 2011 and May 31, 2011
(Thousands of yen)were as follows:A.

For the six months ended
November 30, 2011

For the six months ended
May 31, 2011

7,550,598

6,715,059

55,182

43,728

7,605,780

6,758,787

Consignment expenses

509,446

463,343

Utilities expenses

649,283

565,646

Taxes and dues

604,538

594,936

Non-life insurance expenses

12,752

12,091

Repair expenses

290,406

187,179

1,347,972

1,281,118

57,303

61,611

Total property-related expenses

3,471,700

3,165,924

Operating income from property leasing [A – B]

4,134,080

3,592,863

Operating revenues
Rental revenues
Other revenues related to property leasing
Total operating revenues

B.

Property-related expenses

Depreciation
Other property-related expenses
C.

Note 9 – Extraordinary Losses
The losses are the actual and expected expenditure for recovery costs, etc. related to the Great East Japan
Earthquake.

Note 10 – Income Taxes
DOI is subject to income taxes in Japan. The effective tax rate on DOI’s income based on applicable Japanese
tax law was estimated as 0.06% for the period ended November 30, 2011 and 0.07 % for the period ended May
31, 2011. The following table summarizes the significant differences between the statutory tax rates and DOI’s
effective tax rates for financial statement purposes.
For the six months ended
November 30, 2011

For the six months ended
May 31, 2011

Statutory tax rate

39.33%

39.33%

Deductible dividends(39.31)(39.30)

Others0.04

0.04

Effective tax rate

0.06%

0.07%

DOI was established as an investment corporation under the Investment Trust Law of Japan, and as long as
an investment corporation distributes to its unitholders at least 90% of earnings available for dividends for aperiod and other requirements prescribed in the Special Taxation Measures Law of Japan are met, theinvestment corporation is allowed to deduct the total amount of dividends in calculating its taxable income underJapanese tax regulations.

VI. Notes to Financial Statements 29

Note 11 – Tax Rate Changes After the End of the 12th Fiscal Period
The Act to Revise the Income Tax Act, etc., in Order to Construct a Tax System Addressing Changes in theSocio-Economic Structure (Act No. 114 of 2011) and the Act on Special Measures for Securing Necessary
Financial Resources to Implement Measures to Rebuild Areas Devastated by the Great East Japan Earthquake(Act No. 117 of 2011) were promulgated on December 2, 2011. In accordance with the promulgation, theeffective statutory tax rate used to calculate the deferred tax assets and deferred tax liabilities concerning the
temporary differences, etc. expected to be reversed from the fiscal period ended November 30, 2012 to thefiscal period ended May 31, 2015 will be changed to 36.59%, and the effective statutory tax rate used to
calculate the deferred tax assets and deferred tax liabilities concerning the temporary differences, etc. expected
to be reversed on or after the fiscal period ended November 30, 2015 will be changed to 34.16%, respectively.
These changes have no impact on the 12th Fiscal Period.

Note 12 – Financial Instruments(For the six months ended November 30, 2011 and May 31, 2011)(1) Status of Financial Instruments(A) Policy for financial instruments
DOI procures various financing methods (such as borrowings, issuance of investment corporation bonds,
issuance of investment units) for acquisition and repair of investment properties, payments of dividends
and reimbursement of bank borrowings.
In financing through interest-bearing debt, to secure stable financing capacity and reduce future risk ofrising interests, DOI secures long-term fixed-rate borrowings with well-diversified maturities.
DOI manages surplus funds through safe and highly liquid money claims and securities (in principle,
deposits).
Derivative transactions are only for the purpose of reducing risk of future interest rate fluctuations.
(B) Types and risks of financial instruments and related risk management system
Proceeds from the financing of debts and investment corporation bonds are used mainly to acquisition of
investment properties and reimbursement of current debts and bonds. While these debts and bonds are
exposed to liquidity risk, DOI manages the risk by maintaining the LTV ratio at low levels, diversifying
maturities, keeping the ratio of long-term debt to total debt at high levels, and diversifying lenders withparticular focus on domestic financial institutions. Bank borrowings with floating interest rates are
exposed to the risk of future interest rate fluctuations and DOI manages that using derivative transactions(IRS, etc.).
Security deposits represent funds deposited by tenants, and DOI is exposed to the risk of refunding
deposits in the event that a tenant terminates the contract. However, such risk is limited by reserving
some parts of the funds.
Deposits are used for investment of DOI’s surplus funds. These deposits are exposed to credit risks
such as bankruptcy of the depository financial institutions. DOI manages credit risk by restricting thetenor of the deposit relatively short and setting a minimum credit rating requirement for the depository
financial institutions.
(C) Supplementary explanation for fair value of financial instruments
The fair value of financial instruments is based on their quoted market price, if applicable. When there isno quoted market price available, fair value is reasonably estimated. As certain assumptions are used forthe estimation of fair value, the result of such estimation may differ if different assumptions are used. Also,
the contractual amounts of derivative transactions do not represent the market risk involved in thesederivatives.

30

(2) Estimated Fair Value of Financial Instruments
The book value, fair value and difference between the two as of November 30, 2011 and May 31, 2011 are as
follows. The financial instruments whose fair value is extremely difficult to estimate are excluded from thefollowing table.
(As of November 30, 2011)(Thousands of yen)

Cash and cash equivalents
Total
Long-term debt due within one year
Investment corporation bonds
Long-term debt
Total

Book Value
16,235,183
16,235,183
35,535,625
8,500,000
65,881,250
109,916,875

Fair Value
16,235,183
16,235,183
35,591,428
8,505,500
65,838,142
109,935,070

Difference––
55,8035,500(43,108)
18,195(As of May 31, 2011)(Thousands of yen)Book Value
Cash and cash equivalents
14,535,324
Total
14,535,324
Long-term debt due within one year
38,958,750
Investment corporation bonds
8,500,000
Long-term debt
38,791,250
Total
86,250,000
Derivative transactions
4,807
Notes:
1. Methods to estimate fair value of financial instruments

Fair Value
14,535,324
14,535,324
38,977,858
8,508,500
38,989,519
86,475,877
10

Difference––
19,1088,500
198,269
225,877(4,797)

Assets(1) Cash and Cash Equivalents
As these instruments are settled in short period of time, their fair value and book value are nearly identical.
Therefore, for these items, the book value is assumed as the fair value.
Liabilities(1) Long-Term Debt
For long-term debt with floating interest rates, their fair value and book value are nearly identical.
Therefore, for these items, their book value is assumed as their fair value. For long-term debt with fixedinterest rates, their fair value is based on the present value of principle and interest cash flows discounted at
the current interest rate estimated to be applied if similar new debt is entered into.
(2) Investment Corporation Bonds
The fair value of investment corporation bonds is based on their quoted market price, if available.
When there is no quoted market value available, their book value is assumed as their fair value, as their fairvalue and book value are nearly identical because their interest rates are floating rate.
Derivatives(1) Derivatives to which hedge accounting is not applied
Not applicable.
(2) Derivatives to which hedge accounting is applied(As of November 30, 2011)
Not applicable.
(As of May 31, 2011)(Thousands of yen)

Method of Hedge Accounting

Type of Derivative
Transaction

Hedged Item

Special treatment for interest rate
cap transaction

Interest rate cap
transaction

Long-term debt due
within one year

Contract Amount(over one year)

Fair Value(*)

7,100,000(–)

10*The fair value is provided by the financial institution.

VI. Notes to Financial Statements 31

2. Financial instruments for which it is very difficult to estimate the fair value
Tenant security deposits (with a book value of 10,849,254 thousand yen in November 30, 2011 and 9,956,757
thousand yen in May 31, 2011) that have been deposited from tenants are not marketable and the actual
deposit period cannot be reliably determined, thus making it impossible to reasonably estimate their future
cash flows, and therefore, it is considered to be extremely difficult to estimate their fair value.
3. Redemption schedule for money claims(As of November 30, 2011)

Cash and cash equivalents
Total(Thousands of yen)

Due within
1 yearDue after
1 to 2 years

Due after
2 to 3 years

Due after
3 to 4 years

Due after
4 to 5 years

16,235,183

–

–

–

–

16,235,183

–

–

–

–

(As of May 31, 2011)

Cash and cash equivalents
Total(Thousands of yen)

Due within
1 yearDue after
1 to 2 years

Due after
2 to 3 years

Due after
3 to 4 years

Due after
4 to 5 years

14,535,324

–

–

–

–

14,535,324

–

–

–

–

4. Redemption schedule for investment corporation bonds and long-term debt
(As of November 30, 2011)(Thousands of yen)

Due within Due after
Due after
Due after
Due after
1 year1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years

Long-term debt due within one year 35,535,625

–

–

–

–

–

5,000,000

Investment corporation bonds

–

–

–

–

3,500,000

Long-term debt

– 23,981,250 33,900,000

8,000,000––

35,535,625 28,981,250 33,900,000

8,000,000–

3,500,000

Total(As of May 31, 2011)(Thousands of yen)

Due within Due after
Due after
Due after
Due after
1 year1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years

Due after
5 years

Long-term debt due within one yea 38,958,750

–

–

–

–

–

Investment corporation bonds––

5,000,000––

3,500,000

Long-term debt

– 21,291,250 17,500,000

–

–

–

38,958,750 21,291,250 22,500,000––

3,500,000

Total

32

Due after
5 years

Note 13 – Investment and Rental Properties(For the six months ended November 30, 2011)
DOI owns office buildings (including land) for rent in Tokyo and other areas.
The book value, net changes in the book value and the fair value of the investment and rental properties are as
follows.
(Thousands of yen)Book Value
As of
May 31, 2011
282,758,576

Changeduring the period(*1)
23,120,157

As ofNovember 30, 2011
305,878,733

Fair value as ofNovember 30, 2011
272,300,000(For the six months ended May 31, 2011)
DOI owns office buildings (including land) for rent in Tokyo and other areas.
The book value, net changes in the book value and the fair value of the investment and rental properties are as
follows.
(Thousands of yen)Book Value
As of
November 30, 2010
274,219,900

Changeduring the period(*2)
8,538,676

As of
May 31, 2011
282,758,576

Fair value as of
May 31, 2011
249,930,000(Note 1) The book value represents the acquisition cost less accumulated depreciation.
(Note 2) Significant changes(*1) For the six months ended November 30, 2011, the major reason of increase is the acquisition of E SPACE TOWER (24,000,000
thousand yen). The major reason of decrease is depreciation (1,347,972 thousand yen).
(*2) For the six months ended May 31, 2011, the major reason of increase is the acquisition of Daiwa Kayabacho Building (5,600,000
thousand yen) and Jimbocho Place (3,550,000 thousand yen). The major reason of decrease is depreciation (1,281,118 thousandyen).
(Note 3) The fair values as of November 30, 2011 and as of May 31, 2011 represent the sum of appraisal values estimated by external realestate appraisers.

Income and loss from investment and rental properties for the period ended November 30, 2011 and May 31,
2011 are disclosed in Note 8.

VI. Notes to Financial Statements 33

Note 14 – Transactions with Related Parties(For the six months ended November 30, 2011)
Other affiliatedClassification company, interested
partyInterested party

Asset custodian

Name ofcompany,etc.

Daiwa Securities
Group Inc.

Endeavor Realty
Fund Ltd.

The Sumitomo Trust andBanking Co., Ltd.

Location

Chiyoda-ku, Tokyo

Minato-ku, Tokyo Osaka city, Osaka

Capital stock 247.3 billion yen

3.01 million yen

342 Billion yen

Business
description

Holding company

Real estate

Bank

Percentage
of votingrights, etc.
held byrelated party(held in DOI)

13.11%
directly held in DOI
15.16%
indirectly held in DOI––

Relationshipwith
Provision of capital
related party
Nature oftransaction

Payment of interest
expense on
investment
corporation bonds(Notes 1 and 2)

Purchase of trust
Payment Payment ofbeneficial interest Borrowing of capital of interest borrowing expense
in real estate
expense(Note 3)(Notes 2 and 3)(Note 3)

Amount oftransaction(thousandsof yen)49,94524,000,000

5,000,000

Account

Investment Other
corporation (current
bonds
liabilities)–

Longterm
Longdebt due term
withindebt
one year–

3,434,375 5,000,000 –Balance at
end of period 3,500,000 20,430(thousandsof yen)34

Purchase of trust
beneficial interest Provision of capitalin real estate

47,335

13,629–Prepaid
expenseLongterm
prepaid
expense26,2437,514

For the six months ended May 31, 2011)
Classification Other affiliated company

Subsidiary of other affiliated company

Name ofcompany,etc.

Daiwa Securities Group Inc.

Daiwa Property Co.,Ltd

Location

Chiyoda-ku, Tokyo

Chuo-ku, Tokyo

Capital stock 247.3 billion yen

100 million yen

Business
description

Holding company

Real estate rent business

Percentage
of votingrights, etc.
held byrelated party(held in DOI)

13.11%
directly held in DOI
15.16%
indirectly held in DOI–

Relationshipwith
Provision of capital
related party

Purchase of trust beneficial interest in realestateNature oftransaction

Payment of interest expense on investment
corporation bonds (Notes 1 and 2)

Purchase of trust beneficial interest in realestate(Notes 2 and 3)

Amount oftransaction(thousandsof yen)49,9875,600,000

Account

Investment corporation
bonds

Balance at
end of period
3,500,000(thousandsof yen)Other(current liabilities)–

20,497–

Consumption taxes are not included in transaction amounts.
(Note 1) Issuance conditions of the investment corporation bonds were decided by analyzing the spread ofsimilar bonds, the difference of spread between senior bonds and subordinated bonds and the past
track record of similar bonds.
(Note 2) Terms and conditions with interested parties were determined based on the assets manager’s officeregulation which was established to prevent the conflict of interest.
(Note 3) Terms of transaction were determined based on the market.

VI. Notes to Financial Statements 35

Note 15 – Per Unit Information
Information about net income per unit for the periods ended November 30, 2011 and May 31, 2011 and net
assets per unit as of November 30, 2011 and May 31, 2011 were as follows. The computation of net income perunit is based on the weighted average number of units outstanding during the period. The computation of net
assets per unit is based on the number of units outstanding at each period end.
As of
November 30, 2011

As of
May 31, 2011

Net assets per unit

506,693 yen

505,900 yen

Net income per unit

4,464.09 yen

3,671.17 yen

Net income per unit was calculated by dividing the net income by the daily weighted average number ofinvestment units issued and outstanding. The diluted net income per unit is not stated as there are no diluted
investment units.
(Note) The basis for calculating the net income per unit is as follows:

As ofNovember 30, 2011
Net income (thousands of yen)

1,766,879

1,453,041

Amount not available to ordinary unitholders(thousands of yen)––

Net income available to ordinary unitholders(thousands of yen)

1,766,879

1,453,041

395,798

395,798

Average number of units during the period (units)

Note 16 – Significant Subsequent Events
Not applicable.

36

As of
May 31, 2011

VII. Independent Auditors’ ReportVII. Independent Auditors’ Report 37

VIII. Statements of Cash Flows[Information Only]
For the six months ended November 30, 2011 and May 31, 2011
(Thousands of yen)

For the six months
ended
November 30, 2011

For the six months
ended
May 31, 2011

Income before income taxes

1,767,899

1,454,081

Depreciation and amortization

1,349,080

1,282,286

8,583

8,536

Interest expense

858,591

826,331

Increase (Decrease) in provision for loss on disaster(63,721)63,721(Increase) Decrease in tenant receivables(10,619)

2,250

Increase (Decrease) in accounts payable(49,763)(62,477)

Increase (Decrease) in rent received in advance

145,987(91,704)

Cash payments of interest expense(848,350)(823,838)(Increase) Decrease in consumption taxes refundable(84,178)

119,735

Other, net

191,173449,866

3,264,682

3,228,787––(24,671,360)(9,472,148)

(179)

–

Proceeds from tenant security deposits

1,573,021

652,313

Payments for tenant security deposits(680,524)(567,390)

Net Cash Used in Investing Activities(23,779,042)(9,387,225)

Cash Flows from Financing Activities:––

Proceeds from long-term debt

47,900,000

7,000,000

Repayments of long-term debt

(24,233,125)(3,525,625)

Payment of dividends(1,452,656)(1,284,580)

Net Cash Provided by Financing Activities

22,214,219

2,189,795

Net Change in Cash and Cash Equivalents

1,699,859(3,968,643)

Cash and Cash Equivalents at Beginning of Period

14,535,324

18,503,967

Cash and Cash Equivalents at End of Period

16,235,183

14,535,324

Cash Flows from Operating Activities:

Amortization of bond issuance costs

Net Cash Provided by Operating Activities
Cash Flows from Investing Activities:
Payments for purchases of investment properties
Payments for purchases of intangible assets

The statements of cash flows are not audited by any independent auditor.
Summary of Significant Accounting Policies [Information Only]
Cash and Cash Equivalents
DOI considers all highly liquid investments with original maturity of three months or less to be cash and cash
equivalents.

38

VIII. Statements of Cash Flows [Information Only]IX. Investor Information
Investor Memo
End of fiscal period
General Meeting of Investors
Date for finalizing Unitholders with voting rights for
the General Meeting of Unitholders
Reference date for finalizing payment of distributions
Listed financial instruments exchange
Newspaper in which notice is posted
Manager of Unitholder Registry, etc.
Office handling administrative affairs
Service counterMay 31 and November 30 of each year
Held at least once every two years
Date publicly announced beforehand
May 31 and November 30 of each year (distributions are paid within three months of this reference date)Tokyo Stock Exchange (securities code: 8976)
Nihon Keizai Shimbun
The Chuo Mitsui Trust and Banking Co., Ltd., 3-33-1 Shiba, Minato-ku, Tokyo 105-8574
Transfer Agency Department of The Chuo Mitsui Trust and Banking Co., Ltd., 2-8-4 Izumi,
Suginami-ku, Tokyo 168-0063 Phone 0120-78-2031 (toll-free in Japan)
All branches of the Chuo Mitsui Trust and Banking nationwide and the head office andbranches nationwide of Japan Securities Agents, Ltd.

IR Calendar
January 13, 2012 ・Announcement of financial results for12th Fiscal Period
February 10, 2012 ・Sending of Japanese version Business
Report for 12th Fiscal Period(Statement of Financial Performance)
February 13, 2012 ・Start paying distributions for 12th
Fiscal Period
February 28, 2012 ・Management Reporting Session for
Unitholders (scheduled)

November
End of fiscal period
January

August 2012

・Sending of Japanese version Business
Report for 13th Fiscal Period(Statement of Financial Performance)

August 2012

・Start paying distributions for 13th
Fiscal Period

August 2012

・Seventh General Meeting ofUnitholders (scheduled)

July 2012

・Announcement of financial resultsfor 13th Fiscal Period

February

AugustJuly
May
End of fiscal period

Provision of Information via Website
Daiwa Office Investment Corporation conducts information distribution via its website as an important tool for IR activities. DOI also provides
an e-mail delivery service, “IR mail Delivery Service,” which informs the subscribers of updates in website content such as press releaseannouncements via e-mail free of charge. The website will be continually enhanced and enriched so that the current situation and future
strategies of DOI are clearly communicated.

Daiwa Office Investment Corporation

http://www.daiwa-office.co.jp/en/

Important information is distributed via
e-mail. Please access and follow the simple
steps if you wish to receive our IR mailDelivery Service.

This section introduces the environmental
measures being taken by DOI and its asset
management company.

IX. Investor Information

39

The Daiwa Office Investment Corporation logo has been created. The logo symbolizes hospitality with an open door and thedesire to be a bright and open investment corporation. We will continue to aim to be a highly-transparent investment
corporation that is further cherished and trusted by our investors and tenants.