This translation of the original Japanese Notice is provided solely for information purposes. Should
there be any discrepancy between this translation and the Japanese original, the latter shall prevail.

REIT Financial Report for the 17th Fiscal Period
Name of REIT Issuer:
Stock Code No.:
Representative:
Name of Asset Manager:
Representative:
Inquiries to:July 17, 2014
Daiwa Office Investment Corporation
Stock Exchange Listing: TSE
8976
URL: http://www.daiwa-office.co.jp
Nobuaki Omura, Executive Director
Daiwa Real Estate Asset Management Co., Ltd.
Akira Yamanouchi, President and Representative Director
Yuji Shinotsuka, Vice President and Representative Director
TEL: +81-3-6215-9649
and Head of Finance Department

Scheduled date of submission of periodic securities report (yuka shoken hokokusho):Scheduled date of start of distribution payments:
Preparing presentation material:
Holding financial brief meeting:

August 25, 2014
August 5, 2014

Yes
Yes (for institutional investors and analysts)[Amounts are rounded down to the nearest million yen, except for per unit figures]

1. Status of Management and Assets for the 17th Fiscal Period
17th Fiscal Period: Fiscal period ended May 2014 (from December 1, 2013 to May 31, 2014)
16th Fiscal Period: Fiscal period ended November 2013 (from June 1, 2013 to November 30, 2013)(1) Management[% figures show the period-over-period increase (decrease)]

Operating revenue
17thPeriod16th
PeriodOperating income

Ordinary income

Net income¥8,587 million

1.8%¥3,760 million

2.3%¥3,005 million

1.7%¥3,016 million

1.9%¥8,432 million

10.7%¥3,677 million

11.1%¥2,955 million

14.1%¥2,959 million

14.3%

Net income
per unit
17th
Period16th
PeriodNet income tounitholders’ equity

Ordinary income tooperating revenue¥7,620

1.5%

0.8%

35.0%

¥7,478

1.5%

0.8%

35.1%

(2) Distributions
Distribution amount
per unit

Total distribution
amount(excluding distribution
amount in excess ofearnings)

17th
Period16th
PeriodOrdinary income tototal assets(excluding distribution
amount in excess ofearnings)

Distribution
amountin excess ofearnings
per unit

Total
distribution
amountin excess ofearnings

Dividend
payoutDistribution
amount to
net assets¥7,621¥3,016 million¥0¥– million

100.0%

1.5%¥7,478¥2,959 million¥0¥– million

100.0%

1.5%(3) Financial Position

17th
Period16th
PeriodUnitholders’ equity tototal assets

Net assets
per unit

Total assets

Net assets¥380,723 million¥201,655 million

53.0%¥509,490¥363,653 million¥201,683 million

55.5%¥509,560-1-

(4) Cash Flows

17th
Period16th
PeriodNet cashprovided by (used in)operating activities

Net cashprovided by (used in)investing activities

Net cashprovided by (used in)financing activities

Cash andcash equivalents
at end of period¥7,969 million(¥15,396 million)¥13,040 million¥22,537 million¥4,581 million(¥20,526 million)¥16,811 million¥16,924 million

2. Management Status Forecasts for the 18th Fiscal Period and 19th Fiscal Period
18th Fiscal Period: Fiscal period ending November 2014 (from June 1, 2014 to November 30, 2014)
19th Fiscal Period: Fiscal period ending May 2015 (from December 1, 2014 to May 31, 2015)[% figures show the period-over-period increase (decrease)]

Operating revenue
18th
Period19th
PeriodOperating income

12.9%¥4,351 million

15.7%¥3,450 million

14.8%¥3,448 million

14.3%¥9,842 million

1.6%¥4,444 million

2.1%¥3,674 million

6.5%¥3,672 million

6.5%

Distribution amount per unit

(Reference)

Net income¥9,692 million(excluding distribution amount in excess of earnings)

18th
Period19th
PeriodOrdinary income

Distribution amount in excess of earnings per unit

¥7,820¥0¥8,328¥0

Estimated net income per unit for the 18th Fiscal Period: ¥7,820; 19th Fiscal Period: ¥8,328

3. Other(1) Changes in Accounting Policies, Changes in Accounting Estimates and Retrospective Restatement(i) Changes in accounting policies due to amended accounting standards, etc.: None(ii) Changes in accounting policies other than (i):None(iii) Changes in accounting estimates:None(iv) Retrospective restatement:
None(2) Number of Investment Units Issued and Outstanding(i) Number of investment units issued and outstanding at end of period (including treasury units):
17th Fiscal Period: 395,798 units
16th Fiscal Period: 395,798 units(ii) Number of treasury units at end of period:
17th Fiscal Period:– units
16th Fiscal Period:– units(Note) Please refer to “Notes to Per Unit Information” on page 28 for the number of investment units used as the basis forcalculating the net income per unit.
*Explanation on the Appropriate Use of the Management Status Forecasts, and Other Matters of Special Note
The forecast figures set forth herein are the current prospects based on information currently available to the Investment Corporationand contain elements of uncertainty. Accordingly, the actual operating revenue, operating income, ordinary income, net income anddistribution amount per unit may vary due to changes in the status. Moreover, the forecasts set forth herein should not be construed asa guarantee of distribution amounts. For details on the assumptions underlying the forecast figures above, please refer to “2.
Management Policy and Management Status; 2.2. Management Status; Assumptions for the Management Status Forecasts for the 18th
Fiscal Period and 19th Fiscal Period” on page 10.

2

1. Affiliated Juridical Persons of the Investment Corporation
Disclosure is omitted because there are no significant changes from the “Structure of the Investment
Corporation” set out in the most recent periodic securities report (yuka shoken hokokusho) (submitted on
February 25, 2014).
The specified affiliated juridical person (meaning a specified affiliated juridical person as provided in Article
12, Paragraph 3 of the Cabinet Office Ordinance on Disclosure of Information, etc. on Specified Securities(Ordinance of the Ministry of Finance No. 22 of 1993; including amendments thereto)) of Daiwa Office
Investment Corporation (former name DA Office Investment Corporation) (the “Investment Corporation”) is
Daiwa Securities Group Inc.
Daiwa Securities Group Inc. is the asset management company’s parent company (meaning a parent
company as stipulated in Article 8, Paragraph 3 of the Ordinance on Terminology, Forms and Preparation
Methods of Financial Statements, etc. (Ordinance of the Ministry of Finance No. 59 of 1963; including
amendments thereto)).

2. Management Policy and Management Status
2.1. Management Policy
Disclosure is omitted because there are no significant changes from the “Investment Policy,” “Investment
Target” and “Distribution Policy” set out in the most recent periodic securities report (yuka shoken
hokokusho) (submitted on February 25, 2014) as at the date of this document.
The Investment Corporation plans to submit a proposal for partial amendments to the Articles ofIncorporation, including the “Targets and Policy of Asset Management,” for discussion at the 8th General
Meeting of Unitholders scheduled to be held on August 19, 2014.
The matters for amendment include the addition of the following assets to targets of asset management asassets that may be invested in cases where necessary in investing in real estate.
・Copyrights, etc. pursuant to the Copyright Act
・Investment equity in partnerships under the Civil Code・Various types of casualty insurance contracts and underlying rights or interests
・Rights to use source of hot springs and equipment/facilities, etc. of the concerned hot springs provided in the
Hot Springs Act
For the proposal for partial amendments to the Articles of Incorporation, please refer to the press release“Notice concerning Amendments to Articles of Incorporation and Election of Directors, etc.” dated July 17,
2014.
2.2. Management Status(1) Overview of the Fiscal Period under Review
A. Brief History of the Investment Corporation
Investment Corporation was established on July 11, 2005 in accordance with the Act on Investment Trusts
and Investment Corporations (Act No. 198 of 1951; including amendments thereto) with Daiwa Real Estate
Asset Management Co., Ltd. (former name K.K. daVinci Select) (the “Asset Manager”) as the organizer.
After its establishment, the Investment Corporation implemented an additional issuance of investment units
through a public offering (99,600 units) on October 18, 2005 and then listed on the Tokyo Stock Exchange,
Inc. (TSE) Real Estate Investment Trust Section (stock code: 8976) on the following day.
Though initial assets under management were 79,573 million yen (sum total of acquisition price),
subsequent activities, such as additional acquisition of properties and replacement of portfolio properties,
resulted in the assets under management amounting to 364,076 million yen as of the last day of May 2014.
The Investment Corporation strives to secure stable revenue and sustained growth of the investment
assets based on a clear portfolio development policy of specializing in investment in office buildings, with aparticular focus on investment in a total floor area of more than about 2,000m2 situated in downtown Tokyo,
as well as through dedicated efforts to heighten tenant satisfaction levels.
B. Investment Environment and Management Performancea. Investment Environment (from December 2013 to May 2014)
The Japanese economy during the fiscal period under review saw an economic recovery trend as businesssentiment, as well as corporate performance of primarily export-related companies, improved in line withdepreciation of the yen and rise in stock prices, against the backdrop of economic policies, centering on thefinancial policies promoted by the Abe administration, as well as the large-scale monetary easing policy
implemented by Bank of Japan, high level of public investment and other factors. While there wereconcerns of consumption decreasing on the rebound of the last-minute surge in demand associated with the3consumption tax hike, improvement in employment and other factors are expected to lead to steadyeconomic recovery going forward.
In the office building leasing market in central Tokyo, with new supply having settled down, the vacancy
rate took a turn after peaking in June 2013, dropping to 6.52% at the end of May 2014. Led by
improvement in the vacancy rate for large buildings, the overall vacancy rate that includes small- to
medium-sized buildings is also on an improving trend. While the drop in the vacancy rate is leading to astronger sense that office rent is also bottoming out, rent increases were seen for large buildings in someareas but was no more than a slight increase for the market as a whole.
On the other hand, the office rent for the market as a whole was on a slight downward trend although rent
increases were seen for large buildings in some areas. For the office building transaction market, an appetite
for property acquisitions continued to be strong among real estate companies and funds (including J-REITs)
with the continuing favorable equity procurement environment and proactive lending attitude by financial
institutions backed by the forecast of an increase in property prices in accordance with expectations for
economic recovery.
b. Management Performance
In view of increasing the long-term EPS (EPS (net income per unit) after deducting gain on sales ofproperties) over the medium to long term, the Investment Corporation continued to work on “external
growth,” which aims to boost revenue through acquisition of properties, and “internal growth,” whichaims to maximize income generating from existing properties.
Concerning external growth, the Investment Corporation acquired “Integral Tower” (acquisition price:
15,220 million yen) in May 2014 and divested “Daiwa Shibuya SS Building” (sale price: 3,800 million
yen) in May 2014. As a result, the Investment Corporation’s assets under management as of the end of the
17th Fiscal Period (May 31, 2014) totaled 44 properties, the sum total of acquisition prices of whichamounted to 364,076 million yen.
Concerning internal growth, while the office leasing market weakened, the Investment Corporation
conducted proactive leasing, such as capturing needs for floor expansion within the same property throughstrengthening relationships with existing tenants and reinforcing collaboration with leasing brokers andproperty managers. As a result, the occupancy rate as of the end of the 17th Fiscal Period (May 31, 2014)
was 96.4%.
C. Overview of Capital Procurementa. Status of Interest-Bearing Liabilities(i) Procurement of Capital for New Property Acquisitions
In the 17th Fiscal Period, the Investment Corporation made the following borrowings to fund theacquisition of Integral Tower.
• A total amount of 16,000 million yen was borrowed from Sumitomo Mitsui Banking Corporation, The
Bank of Mitsubishi-Tokyo UFJ, Ltd., Sumitomo Mitsui Trust Bank, Limited, Mizuho Bank, Ltd.,
Development Bank of Japan Inc., Mizuho Trust and Banking Co., Ltd. and The Musashino Bank, Ltd.
on May 29, 2014 (Integral Tower; May 29, 2014 delivery portion).
(ii) Procurement of Capital for Repayment of Borrowings (Refinancing)In the 17th Fiscal Period, the Investment Corporation made the following borrowings to fund therepayment of borrowings that were due for repayment.
• A total amount of 4,000 million yen was borrowed from Resona Bank, Ltd. on March 18, 2014 to fundthe repayment of the 4,000 million yen borrowed from said bank that was due for repayment on March
18, 2014.
• A total amount of 2,000 million yen was borrowed from Sumitomo Mitsui Banking Corporation on
March 25, 2014 to fund the repayment of the 2,000 million yen borrowed from said bank that was due
for repayment on March 25, 2014.
• A total amount of 8,900 million yen was borrowed from Mizuho Bank, Ltd., The Bank of
Mitsubishi-Tokyo UFJ, Ltd. and The Gunma Bank, Ltd. on March 31, 2014 to fund the repayment of a
total amount of 8,900 million yen borrowed from said banks that was due for repayment on March 31,
2014.
(iii) Status of Interest-Bearing Liabilities at End of the Fiscal Period under Review
As a result of the above, the balance of interest-bearing liabilities outstanding as of the end of the 17th
Fiscal Period (May 31, 2014) stood at 163,700 million yen (short-term loans payable: 5,500 million yen;long-term loans payable: 154,700 million yen; investment corporation bonds: 3,500 million yen). Thebalance of the current portion of long-term loans payable stood at 29,500 million yen.
4

Concerning borrowings in the 17th Fiscal Period, the Investment Corporation made borrowings,
centering on periods of between 5 years and 8 years and as long as 8.5 years, extending the averageremaining period from 3.43 years (16th Fiscal Period) to 3.82 years (17th Fiscal Period). Furthermore,
liabilities costs were lowered by reducing credit spreads. Meanwhile, the Investment Corporation
concluded the interest-rate swap agreement in the 17th fiscal Period to fixate future interest payment for
the total borrowing of 19,600 million yen in order to offset the risks of the possible increase of theinterest rate.

List of Borrowings in the 17th Fiscal Period
LenderResona Bank, Ltd.
Resona Bank, Ltd.
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Banking Corporation
Mitsubishi UFJ Trust and Banking Corporation
The Gunma Bank, Ltd.
Mizuho Bank, Ltd.
Mizuho Bank, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corporation
Mizuho Bank, Ltd.
Sumitomo Mitsui Trust Bank, Limited
The Musashino Bank, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Mizuho Trust and Banking Co., Ltd.
Development Bank of Japan Inc.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Mizuho Bank, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Loan amount(million yen)

Drawdown
date

Repayment
date

Loan
period2,000

2014/3/18

2019/9/30

5.5 years

2,000

2014/3/18

2021/3/31

7.0 years

1,000

2014/3/25

2021/3/31

7.0 years

1,000

2014/3/25

2022/2/28

7.9 years

3,000

2014/3/31

2019/3/29

5.0 years

1,000

2014/3/31

2019/3/29

5.0 years

1,000

2014/3/31

2020/3/31

6.0 years

3,900

2014/3/31

2021/3/31

7.0 years

1,500

2014/5/29

2015/3/31

0.8 years

500

2014/5/29

2015/3/31

0.8 years

500

2014/5/29

2015/3/31

0.8 years

2,000

2014/5/29

2019/5/31

5.0 years

500

2014/5/29

2019/5/31

5.0 years

2,000

2014/5/29

2020/5/29

6.0 years

500

2014/5/29

2020/5/29

6.0 years

1,000

2014/5/29

2020/11/30

6.5 years

1,000

2014/5/29

2021/11/30

7.5 years

1,500

2014/5/29

2022/5/31

8.0 years

1,000

2014/5/29

2022/5/31

8.0 years

3,000

2014/5/29

2022/11/30

8.5 years

1,000

2014/5/29

2022/11/30

8.5 years

Balance of Borrowings from Each Financial Institution (as of May 31, 2014)
End of the 17th Fiscal Period
Lender(million yen)
Sumitomo Mitsui Banking Corporation
33,400Sumitomo Mitsui Trust Bank, Limited
20,350Development Bank of Japan Inc.
18,750Mizuho Bank, Ltd.
13,900
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
11,500Shinsei Bank, Ltd.
11,000Resona Bank, Ltd.
9,000
Aozora Bank, Ltd.
6,000
Mitsubishi UFJ Trust and Banking Corporation
5,000
Kansai Urban Banking Corporation
5,000
Mizuho Trust and Banking Co., Ltd.
5,000
The Bank of Fukuoka, Ltd.
4,000
ORIX Bank Corporation
2,500
The Gunma Bank, Ltd.
2,500
The Shizuoka Bank, Ltd.
2,000
Tokio Marine & Nichido Fire Insurance Co., Ltd.
2,000
The Musashino Bank, Ltd.
2,000
5

Share
20.85
12.70
11.70
8.68
7.18
6.87
5.62
3.75
3.12
3.12
3.12
2.50
1.56
1.56
1.25
1.25
1.25

The Higashi-Nippon Bank, Limited
The Hiroshima Bank, Ltd.
The Kagawa Bank, Ltd.
The 77 Bank, Ltd.
The Bank of Yokohama, Ltd.
The Yamaguchi Bank, Ltd.
Taiyo Life Insurance Company
Nippon Life Insurance Company
Fukoku Mutual Life Insurance Company
Total

1,500

0.94

1,000

0.62

1,000

0.62

1,000

0.62

500

0.31

500

0.31

300

0.19

300

0.19

200

0.12

160,200

100.00%(Note 1) Share is rounded to two decimal places.
b. Rating Information (as of May 31, 2014)
Credit rating agency
R&I
Japan Credit Rating Agency

RatingA+
AA-

Outlook
StableStablec. Shelf Registration
The Investment Corporation filed a shelf registration statement on July 17, 2014 as below.
Investment corporation bonds (excluding short-term investment corporation bonds)
Planned issue amount 100 billion yen
Planned issue period
From July 25, 2014 to July 24, 2016
Funds for acquisition of specified assets, repayment of loans, redemption of
investment corporation bonds (including short-term investment corporation
Use of funds
bonds), refund of leasehold and security deposits, and payment of repairs, etc.;
funds for working capital; etc.
D. Overview of Financial Performance and Distributions
As a result of the management described above, the Investment Corporation posted financial performancefor the 17th Fiscal Period of 8,587 million yen in operating revenue, 3,760 million yen in operating income,
3,005 million yen in ordinary income and 3,016 million yen in net income.
Concerning distributions, to ensure that the amount equivalent to distributions from earnings would be
included in the amount of tax-deductible expenses based on application of special provisions for taxation of
corporation tax (Article 67-15 of the Act on Special Measures Concerning Taxation (Act No. 26 of 1957;
including amendments thereto) (the “Special Taxation Measures Act”)), the Investment Corporation
decided to distribute the entire amount of unappropriated retained earnings, excluding fractions of the
distribution amount per unit that are less than 1 yen. Accordingly, the Investment Corporation declared a
distribution amount per unit of 7,621 yen.

6(2) Outlook for the Next Fiscal Period
A. Investment Environment
The Japanese economy ahead is expected to see the ongoing various economic measures, centering on the
public works projects and financial policies promoted by the Abe administration, and the large-scalemonetary easing policy implemented by Bank of Japan as well as pickup in overseas economies, centering
on developed countries, lead to moderate economic recovery through improvement in corporate
performance, centering on public-investment- and exports-related companies, and recovery in personal
spending. However, factors such as turmoil in overseas economies / overseas financial markets with the
emergence of geopolitical risks pose potential risks of disrupting the Japanese real economy and financial
environment and are thus thought to require attention.
In the office building leasing market, while new supply is decreasing, factors such as improvement in
employment are stimulating demand, resulting in the vacancy rate dropping. Improvement in corporate
performance is forecast to increase demand for office floor space and rent is expected to improve as aconsequence. In the office building transaction market, backed by the favorable financing environment andexpectations of rent rising, among other factors, property acquisition appetite among real estate companies
and funds (including J-REITs) is thought to grow even stronger.
B. Future Management Policy and Tasks
a. Strategy for Managing Existing Properties
Under the office leasing market conditions described above, the tenant side is also expected to become
more selective with properties. Consequently, the Investment Corporation will carry out operational
management under the following policy with an aim to enhance the competitiveness of existing properties
and thereby increase the long-term EPS over the medium to long term.
(i) Maintain and raise occupancy rates
Concerning existing tenants, strive to reduce vacancy risks by improving the quality of buildings,
equipment and management system. In addition, concerning new tenants, strive to maintain and raiseoccupancy rates through the provision of services that are of higher satisfaction levels than competing
properties through proactive participation in the market.
(ii) 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.
(iii) Lower operational management costs
Strive to lower operational management costs based on maintaining office environments of hightenant satisfaction levels by implementing efficient operational management and reviewing
systematic construction work by optimally leveraging the economies of scale achieved fromproactively realizing external growth.
b. Strategy for New Property Investments
The Investment Corporation will invest in office buildings that have a total floor area of about 2,000m2 or
more based on various external growth strategies, while maintaining a balance with the asset acquisition
environment and financing situation. In principle, considerations will focus on Tokyo as the investment
target area, but the Investment Corporation will also consider investing in competitive properties in cities
other than Tokyo from a viewpoint of territorially-distributed investments.
As pipeline support, in addition to expanding its own information-sourcing channels, the Investment
Corporation will continue to search for properties that meet its investment criteria by proactively gathering
real estate transaction market information through greater collaboration with the Asset Manager andSponsor Group and utilizing the Group’s extensive network of clients, partners, etc.
In the 17th Fiscal Period, the Investment Corporation acquired “Integral Tower,” which is located inTokyo. The Investment Corporation believes that acquisition of this property will contribute to further
stabilization and enhancement of the portfolio. The Investment Corporation will continue to strive toacquire properties in line with the investment strategy described above.
c. Financial Strategy
The Investment Corporation will conduct disciplined financial management of the following basic content.
(i) Control leverage by keeping the ratio of interest-bearing liabilities (LTV) to total assets within therange of 40% to 50% at maximum, taking into consideration also the real LTV, etc., as a principle.
(ii) Diversify repayment deadlines, targeting 30.0 billion yen as the maximum amount of interest-bearing
liabilities that shall become due during any single fiscal period as a principle.
(iii) Aim to have long-term loans account for at least 70% of total loans as a principle.
7

(iv) Achieve diversification of lenders, which shall mainly be Japanese financial institutions.
(v) Pursuant to its fund management rules, maintain stability in its financial standing by managing
necessary funds, such as the amount equivalent to distributions paid, separately from working capital.
C. Significant Subsequent Events① Issuance of Investment Units
The Investment Corporation passed resolutions concerning issuance of new investment units as follows at
the meetings of the Board of Directors of the Investment Corporation held on June 17, 2014 and June 25,
2014. Payment for the issuance of new investment units through public offering was completed on July 2,
2014. In addition, payment for the issuance of new investment units by third-party allocation is scheduled
for July 30, 2014.
a. Issuance of new investment units through public offering (primary offering)(i) Number of units to be offered:
41,092 units(ii) Net price (paid-in price):
450,746 yen per unit(iii) Net amount (total paid-in amount): 18,522,054,632 yen(iv) Payment date:July 2, 2014(v) Use of proceeds:

Acquisition of the specified assets stated in ② below as well as the expenses associated with the acquisitions

b. Issuance of new investment units by third-party allocation(i) Number of units to be offered (upper limit):(ii) Net price (paid-in price):(iii) Net amount (total paid-in amount) (upper limit):(iv) Allottee and number of units to be issued (upper limit):(v) Payment date:(vi) Use of proceeds:

4,110 units
450,746 yen per unit
1,852,566,060 yen
Daiwa Securities Co., Ltd. 4,110 units
July 30, 2014

Acquisition of the specified assets stated in ② below as well as the expenses associated with the acquisitions(Note) The investment units to be issued by third-party allocation may not be subscribed in whole orin part, and as a result, the subscription right will be forfeited and the final number ofinvestment units issued with respect to the third-party allocation may be reduced to the same
extent, or such issuance itself may be cancelled.
② Acquisition of Assets
a. The Investment Corporation acquired a trust beneficial interest in real estate on July 4, 2014 as
follows.
Summary of Asset Acquired
Property name
Azabu Green Terrace
Type of asset

Trust beneficial interest in domestic real estate

Location

3-20-1 Minami Azabu Minato-ku, Tokyo
14,000 million yen

Acquisition price(excluding associated acquisition costs, consumption tax, etc.)

Date of conclusion of purchase agreement June 17, 2014
Date of delivery
SellerJuly 4, 2014
Azabu Green Terrace Goudou Kaisha (Limited Liability
Company)b. The Investment Corporation determined on June 17, 2014 to acquire a trust beneficial interest in realestate as follows.
Summary of Asset to be Acquired
Property nameKitahama Grand Building
Type of asset

Trust beneficial interest in domestic real estate

Location

2-2-14 Awajicho, Chuou-ku, Osaka
9,481.5 million yen

Acquisition price(excluding associated acquisition costs, consumption tax, etc.)

Date of conclusion of purchase agreement June 17, 20148

Date of delivery

August 1, 2014 (scheduled)

SellerGoudou Kaisha North Beach (Limited Liability Company)

D. Outlook for Management Status
The Investment Corporation forecasts the following management status for the 18th Fiscal Period (fiscal
period ending November 2014 (from June 1, 2014 to November 31, 2014)). For the assumptions underlying
the management status forecasts, please refer to the “Assumptions for the Management Status Forecasts forthe 18th Fiscal Period and 19th Fiscal Period” on page 10.
18th Fiscal Period (fiscal period ending November 2014 (from June 1, 2014 to November 30, 2014))
Operating revenue
9,692 million yen
Operating income
4,351 million yen
Ordinary income
3,450 million yen
Net income
3,448 million yen
Distribution amount per unit
7,820 yen
Distribution amount in excess of earnings per unit
0 yen
In addition, on the basis that the “Assumptions for the Management Status Forecasts for the 18th Fiscal
Period and 18th Fiscal Period” will remain unchanged, the Investment Corporation forecasts the following
management status for the 19th Fiscal Period (fiscal period ending May 2015 (from December 1, 2014 to
May 31, 2015)).
19th Fiscal Period (fiscal period ending May 2015 (from December 1, 2014 to May 31, 2015))
Operating revenue
9,842 million yen
Operating income
4,444 million yen
Ordinary income
3,674 million yen
Net income
3,672 million yen
Distribution amount per unit
8,328 yen
Distribution amount in excess of earnings per unit
0 yen
(Note) The forecast figures above are the current forecasts calculated based on certain assumptions.
Accordingly, the actual operating revenue, operating income, ordinary income, net income,
distribution amount per unit and distribution amount in excess of earnings per unit may vary due tochanges in the status. Moreover, the forecasts set forth herein should not be construed as aguarantee of distribution amounts.

9

Assumptions for the Management Status Forecasts for the 18th Fiscal Period and 19th Fiscal Period
Item
Assumptions• 18th Fiscal Period and 19th Fiscal Period:
Assets under management are assumed to be the 44 properties owned as of May 31, 2014,
Assets underplus the 2 properties acquired in July 2014 and scheduled to be acquired in August 2014,
management
to total 46 properties.
• The actual number of properties may vary due to changes in the assets under management.
• Rent revenue from existing properties is calculated based on historical data and taking into
Operatingaccount variable factors.
revenue• It is assumed that there is no gain (loss) on sales of real estate properties.
• Expenses related to rent business, which constitute a major component of operating
expenses, are calculated based on historical data and taking into account variable factors.
• Repair expenses for buildings are recorded as expenses in the amount expected to benecessary in the respective fiscal period based on the medium to long term repair planestablished by the Asset Manager.
• Operating income from property leasing (excluding gain on sales of real estate properties)
after deducting expenses related to rent business (including depreciation) is expected to beOperating
5,357 million yen in the 18th Fiscal Period and 5,481 million yen in the 19th Fiscal
expenses
Period.
• Consignment expenses are expected to be 743 million yen in the 18th Fiscal Period and744 million yen in the 19th Fiscal Period.
• Taxes and dues (fixed property tax, city planning tax, etc.) are expected to be 792 million
yen in the 18th Fiscal Period and 799 million yen in the 19th Fiscal Period.
• Depreciation is expected to be 1,493 million yen in the 18th Fiscal Period and 1,539
million yen in the 19th Fiscal Period.
• Non-operating expenses in the 18th Fiscal Period are expected to be 901 million yen, of
which the interest expenses, interest expenses on investment corporation bonds, andborrowing related expenses are expected to be 821 million yen.
Non-operating
expenses• Non-operating expenses in the 19th Fiscal Period are expected to be 769 million yen, of
which the interest expenses, interest expenses on investment corporation bonds, andborrowing related expenses are expected to be 762 million yen.
• The total amount of interest-bearing liabilities is assumed to be 162,200 million yen at theend of the 18th Fiscal Period and 162,200 million yen at the end of the 19th Fiscal Period.
• In the 18th Fiscal Period, of the 19,000 million yen in loans that became due forrepayment on July 8, 2014, 17,500 million yen was refinanced and 1,500 million yen was
repaid using cash reserves. The assumption is that the 3,000 million yen in loans that is tobecome due for repayment on September 17, 2014 will be refinanced in the entire amount.
Interest-bearing
In addition, the assumption for the 3,500 million yen in First Series Unsecured Investment
liabilities
Corporation Bonds with Early Redemption Clause is that early redemption will be
conducted by refinancing in the entire amount on September 17, 2014.
• In the 19th Fiscal Period, the assumption is that the 3,000 million yen in loans that is tobecome due for repayment on February 27, 2015, the 7,500 million yen in loans that is tobecome due for repayment on March 31, 2015 and the 2,500 million yen in loans that is tobecome due for repayment on May 29, 2015 will be refinanced in the entire amount.
• The number of investment units issued and outstanding is assumed to be the 395,798 units
issued and outstanding as of May 31, 2014, plus the 41,092 units from issuance of new
investment units through public offering and the 4,110 units from issuance of new
Number ofinvestment units by third-party allocation (upper limit) for which resolutions were passed
investment units
at the meetings of the Board of Directors of the Investment Corporation held on June 17,
issued and2014 and June 25, 2014, to total 441,000 units.
outstanding• There is assumed to be no change in the number of investment units from issuance of new
investment units, etc. other than the above through to the end of the 18th Fiscal Period and19th Fiscal Period.
• The distribution amount per unit is calculated based on the cash distribution policy as set
out in the articles of incorporation of the Investment Corporation.
Distribution amount•The distribution amount per unit may vary depending on a variety of factors, such as
per unitchanges in the assets under management, changes in the rent revenue due to tenantchanges and other causes, and incurrence of unforeseen repairs.
10

Item
Assumptions
Distribution amount• At present, there is no plan to make any distribution in excess of earnings (distribution
in excess of earnings
amount in excess of earnings per unit).
per unit• It is assumed that there are no changes to laws and ordinances, the tax system, accounting
standards, listing regulations, the rules of Tokyo Stock Exchange, Inc. and The Investment
Trusts Association, Japan, etc. that will affect the abovementioned forecast figures.
Other• It is assumed that there will be no major unforeseen changes in general economic trends,
real estate market conditions, etc.
2.3. Investment Risks
The following content will be added as “(c) Risk that asset to be acquired cannot be incorporated into theportfolio” to “Part I: Fund Information; Section 1: Fund Status; 3. Investment Risks; 3.3. Risk Factors; 3.3.6.
Other” set out in the most recent periodic securities report (yuka shoken hokokusho) (submitted on February
25, 2014).
(c) Risk that asset to be acquired cannot be incorporated into the portfolio
The Investment Corporation has concluded a purchase agreement for trust beneficial interest in Kitahama
Grand Building and future acquisition is scheduled.
However, the Investment Corporation may not be able to acquire the property above as scheduled
because of failure to fulfill certain terms and conditions provided in the agreement or because ofcancellation of the agreement due to such factors as significant changes in the market environment,
financing environment, etc. or individual circumstances of the seller or the Investment Corporation during
the period from the date of this document to asset acquisition. In such case, the Investment Corporation
may not be able to generate the projected operating revenue and, as a result, the distribution amount perunit may fall below the projected amount.
In addition, “Part I: Fund Information; Section 1: Fund Status; 3. Investment Risks; 3.3. Risk Factors; 3.3.4.
Risks concerning Real Estate and Beneficial Interest in Trust; (v) Risk concerning forward commitments” setout in the abovementioned periodic securities report (yuka shoken hokokusho) will be amended as follows(amendments are underlined).
(v) Risk concerning forward commitments
The Investment Corporation may use forward commitments (forward commitments is defined as “a saleand purchase agreement binding for forward and future transactions, with respect to which the settlementand delivery take place one or more months after the signing of the agreement”) to acquire real estate ortrust beneficial interest that have real estate as assets in trust. When the purchase agreement is cancelled
due to the buyer’s circumstances, the buyer will be liable for damages due to default in obligations.
Moreover, regardless of proof of the amount of damages, etc., there may be an agreement made to theeffect that a penalty that is a certain percentage of the purchasing price of the real estate or trust beneficial
interest that have real estate as assets in trust shall apply. In the event of forward commitments, there is acertain period of time from the signing of the agreement to the settlement and delivery. In cases where theInvestment Corporation fails to procure funds for the real estate acquisition due to such factors as changes
in the market environment or other cases leading to the need to cancel the purchase agreement during that
period, there is a possibility that the financial condition of the Investment Corporation will deteriorate due
to payment of the penalty, etc.
The Investment Corporation has concluded a purchase agreement for trust beneficial interest in
Kitahama Grand Building and future acquisition is scheduled. This purchase agreement falls under the
category of the forward commitments above.
If there is a violation of any of the provisions of the purchase agreement with the seller of the property
by either the Investment Corporation or the seller, the other party can cancel the purchase agreement anddemand an amount equivalent to 10% of the purchasing price as a penalty. The provision concerning thefunds required for purchase of the asset to be purchased states that the buyer’s obligation to execute thepurchase shall arise on the condition that either the funding for execution of the purchase is conducted orcertain to be conducted.

11

3. Financial Statements
3.1. Balance Sheets

AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Consumption taxes receivable
Prepaid expenses
Deferred tax assets
Other
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures in trust, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
LandConstruction in progress
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Other in trust
Accumulated depreciation
Land in trust
Construction in progress in trust
Total property, plant and equipment

16th Fiscal Period[As of Nov. 30, 2013](Unit: thousand yen)
17th Fiscal Period[As of May 31, 2014]

11,479,896
5,445,075
299,238－
289,694
7,426
108,600
17,629,931

16,842,863
5,694,864
292,388
135,051
307,951
3,729
80,83023,357,677

3,073,746(1,367,157)
1,706,588
10,296(2,192)
8,103
7,422(5,593)
1,828
12,302,226
2,457
75,848,965(15,550,718)
60,298,247
858,205(135,345)
722,860
861,301(399,705)
461,596
94,734(50,484)
44,2496,017(6,017)
266,787,276
39,544342,374,979

3,092,757(1,454,946)
1,637,811
10,296(2,461)
7,834
8,947(6,042)
2,905
12,302,226
3,871
80,499,042(16,541,892)
63,957,149
887,486(146,565)
740,921781,249(401,379)
379,869
108,841(57,254)
51,586
5,909(5,909)273,990,050
433,065
353,507,294

*1

12

*1

Intangible assets
Right of trademark
Leasehold rights
Leasehold rights in trust
Other
Total intangible assets
Investments and other assets
Lease and guarantee deposits in trust
Long-term prepaid expenses
Deferred tax assets
Other
Total investments and other assets
Total noncurrent assets
Deferred assets
Investment corporation bonds issuance costs
Total deferred assets
Total assets
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable
Current portion of long-term loans payable
Accounts payable – other
Income taxes payable
Accrued consumption taxes
Advances received
Other
Total current liabilities
Noncurrent liabilities
Investment corporation bonds
Long-term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Derivatives liabilities
Total noncurrent liabilities
Total liabilities
Net Assets
Unitholders’ equity
Unitholders’ capital
Surplus
Unappropriated retained earnings (undisposed loss)
Total surplus
Total unitholders’ equity
Valuation and translation adjustments
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

16th Fiscal Period[As of Nov. 30, 2013](Unit: thousand yen)
17th Fiscal Period[As of May 31, 2014]

1,448
2,407,101
306,884
2,818
2,718,252

1,259
2,407,101
306,884
4,925
2,720,171

113,684
778,748
23,705
10,020926,158
346,019,390

113,684
942,443
70,133
10,0201,136,282
357,363,748

4,585
4,585
363,653,907

1,717
1,717
380,723,143

772,4173,000,000
33,900,000
286,983811
96,308977,470
164,118
39,198,109

904,3165,500,000
29,500,000
461,153844
16,051
971,476
365,068
37,718,910

3,500,000
107,300,000
7,306,108
4,597,921
68,576
122,772,606
161,970,715

3,500,000
125,200,000
7,674,101
4,769,695
205,310
141,349,107
179,068,017

198,780,951

198,780,951

2,959,947
2,959,947
201,740,899

3,016,510
3,016,510
201,797,461(57,707)(57,707)
201,683,191
363,653,907(142,335)(142,335)
201,655,126
380,723,143

*2

13

*2

3.2. Statements of Income

16th Fiscal Period[From: June 1, 2013
To: Nov. 30, 2013]
Operating revenue
Rent revenue – real estate
Other lease business revenue
Gain on sales of real estate properties
Total operating revenue
Operating expenses
Expenses related to rent business
Asset management fees
Asset custody fees
Administrative service fees
Trust fees
Directors’ compensation
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Reversal of distribution payable
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Interest expenses on investment corporation bonds
Borrowing expenses
Other
Total non-operating expenses
Ordinary income
Extraordinary income
Gain on donation of noncurrent assets
Total extraordinary income
Income before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)(Unit: thousand yen)
17th Fiscal Period[From: Dec. 1, 2013
To: May 31, 2014]

*1
*1
*2

8,367,068
65,001
8,432,069

*1
*1
*2

8,491,129
92,7583,610
8,587,498*1

3,870,374
696,224
17,657
63,107
21,7175,400
80,5594,755,040
3,677,029*1

3,931,000
710,204
18,162
62,68622,026
5,400
77,284
4,826,763
3,760,734
931
630
4,068
5,630

1,423
1,101
2,464
4,989

*3

522,251
53,609144,284
5,935
726,080
2,955,938
4,884
4,884
2,960,822
992
(6)
986
2,959,835
111
2,959,947

14*3

554,143
47,448151,045
7,938
760,575
3,005,789
11,484
11,484
3,017,273
929
4
933
3,016,340
170
3,016,510

3.3. Statements of Unitholders’ Equity
16th Fiscal Period (from June 1, 2013 to November 30, 2013](Unit: thousand yen)
Total valuation and translation
adjustments

Unitholders’ equity
Surplus

Total valuation
Total unitholders’ Deferred gains or
and translation
equitylosses on hedges
adjustments

Total net assets

Unappropriatedretainedearnings(undisposed
loss)

Total Surplus

2,589,422

2,589,422

201,370,373

Dividends from surplus(2,589,310)(2,589,310)(2,589,310)(2,589,310)

Net income

2,959,835

2,959,835

2,959,835

2,959,835

Unitholders’capitalBalance at beginning ofcurrent period

198,780,951(25,003)(25,003)

201,345,370

Changes of items during theperiodNet changes of items otherthan shareholders’ equity(32,704)(32,704)(32,704)

Net changes of items otherthan shareholders’ equity－

370,525

370,525

370,525(32,704)(32,704)

337,821

Balance at end of current
period198,780,951

2,959,947

2,959,947

201,740,899(57,707)(57,707)

201,683,191

17th Fiscal Period (from December 1, 2013 to May 31, 2014](Unit: thousand yen)
Total valuation and translation
adjustments

Unitholders’ equity
Surplus

Total valuation
Total unitholders’ Deferred gains or
and translation
equitylosses on hedges
adjustments

Total net assets

Unappropriatedretainedearnings(undisposed
loss)

Total Surplus

2,959,947

2,959,947

201,740,899

Dividends from surplus(2,959,777)(2,959,777)(2,959,777)(2,959,777)

Net income

3,016,340

3,016,340

3,016,340

3,016,340

Unitholders’capitalBalance at beginning ofcurrent period

198,780,951(57,707)(57,707)

201,683,191

Changes of items during theperiodNet changes of items otherthan shareholders’ equity(84,627)(84,627)(84,627)

Net changes of items otherthan shareholders’ equity－

56,56256,56256,562(84,627)(84,627)(28,065)

Balance at end of current
period198,780,951

3,016,510

3,016,510

201,797,461(142,335)(142,335)

201,655,126

15

3.4. Statements of Cash Distributions

Item
I. Unappropriated retained earnings
II. Distribution amount[Distribution amount per unit]
III. Retained earnings carried forward
Method for calculating distribution amount16th Fiscal Period[From: June 1, 2013
To: Nov. 30, 2013]
Amount (yen)2,959,947,688
2,959,777,444[7,478]170,244
Pursuant to the policy that “theInvestment Corporation shall
distribute an amount in excess of
the amount equivalent to 90% of
its distributable earnings as
defined in Article 67-15 of the Act
on Special Measures Concerning
Taxation” but no more than theamount of earnings as specified in
Article 32, Item 1 of theInvestment Corporation’s articles
of incorporation, the Investment
Corporation decided the
distributions from earnings that itshall pay out shall be themaximum value of the integral
multiple of the number of units
issued and outstanding (395,798
units) in an amount that is not inexcess of unappropriated retained
earnings. Accordingly, theInvestment Corporation declared a
distribution amount of
2,959,777,444 yen. Furthermore,
the Investment Corporation shallnot distribute cash in excess ofearnings as stipulated in Article
32, Item 2 of its articles ofincorporation.

16

17th Fiscal Period[From: Dec. 1, 2013
To: May 31, 2014]
Amount (yen)3,016,510,262
3,016,376,558[7,621]
133,704
Pursuant to the policy that “theInvestment Corporation shall
distribute an amount in excess of
the amount equivalent to 90% of
its distributable earnings as
defined in Article 67-15 of the Act
on Special Measures Concerning
Taxation” but no more than theamount of earnings as specified in
Article 32, Item 1 of theInvestment Corporation’s articles
of incorporation, the Investment
Corporation decided the
distributions from earnings that itshall pay out shall be themaximum value of the integral
multiple of the number of units
issued and outstanding (395,798
units) in an amount that is not inexcess of unappropriated retained
earnings. Accordingly, theInvestment Corporation declared a
distribution amount of
3,016,376,558 yen. Furthermore,
the Investment Corporation shallnot distribute cash in excess ofearnings as stipulated in Article
32, Item 2 of its articles ofincorporation.

3.5. Statements of Cash Flows

16th Fiscal Period[From: June 1, 2013
To: Nov. 30, 2013]
Net cash provided by (used in) operating activities
Income before income taxes
Depreciation and amortization
Amortization of investment corporation bonds issuance costs
Interest income
Interest expenses(Increase) Decrease in operating accounts receivable(Increase) Decrease in consumption taxes refund receivable(Increase) Decrease in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable – other
Increase (decrease) in accrued consumption taxes
Increase (decrease) in advances received(Increase) Decrease in long-term prepaid expenses
Decrease from sales of property, plant and equipment in trust
Other, net
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust
Purchase of intangible assets
Proceeds from tenant security deposits
Proceeds from tenant security deposits in trust
Repayments of tenant security deposits
Repayments of tenant security deposits in trust
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Proceeds from short-term loans payable
Repayment of short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Redemption of investment corporation bonds redeemable
Dividends paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

17(Unit: thousand yen)
17th Fiscal Period[From: Dec. 1, 2013
To: May 31, 2014]

72,5485,196,784
1,423(615,390)(960)
4,581,857

3,017,273
1,357,076
2,867
(931)
601,592
6,849(135,051)(18,256)(74,232)
60,440(80,257)(5,993)(163,695)
3,776,563
226,2218,570,465
931(601,109)(896)
7,969,391(25,556)(21,370,401)－
372,769
835,362(332,947)(5,404)(20,526,177)(22,821)(15,910,756)(3,024)
615,668
755,378(670,820)(160,460)(15,396,834)

8,000,000(5,000,000)
38,900,000(17,500,000)(5,000,000)(2,588,480)
16,811,519
867,199
16,057,772
16,924,971

2,500,000－
28,400,000(14,900,000)－(2,959,802)
13,040,197
5,612,755
16,924,971
22,537,727

2,960,822
1,330,093
3,631(1,423)575,860(69,086)
248,781(26,739)
201,239
29,441
63,881
102,540(294,805)*1*1

3.6. Notes to the Going Concern
Not applicable.
3.7. Notes to Significant Accounting Policies
1.
Accumulated depreciation(1) Property, plant and equipment (including trust assets)method for noncurrent assets
The straight-line method is adopted.
The useful life of primary property, plant and equipment are as follows:
Buildings
2~64 years
Structures
4~56 years
Machinery and equipment
2~23 years
Tools, furniture and fixtures
5~18 years(2) Intangible assets
The straight-line method is adopted.
(3) Long-term prepaid expenses
The straight-line method is adopted.
2.
Accounting policies for
Investment corporation bonds issuance costs
deferred assets
Amortized using the straight-line method over the period up to
redemption.
3.
Accounting standards for
Accounting for fixed property tax, etc.
recording revenues and expenses
Concerning fixed property tax, city planning tax, depreciated asset tax,
etc. for owned real estate in trust, of the tax amount that has beenbroken down into installments, the method of accounting for the amountcorresponding to the concerned fiscal period as expenses related to rent
business is adopted.
Concerning the amount equivalent to fixed property tax, etc. for the
initial fiscal year that shall be borne by the Investment Corporation incorrelation with acquisitions of real estate or trust beneficial interest
that have real estate as assets in trust, the amount is not expensed but israther included in the cost of acquisition of the concerned real estate
property.
The amount equivalent to fixed property tax, etc. that was included in
the cost of acquisition of real estate properties in the 16th Fiscal Period
is 71,391 thousand yen and 17th Fiscal Period is 54,857 thousand yen.
4.
Hedge accounting approaches(1) Hedge accounting approach
Deferral hedge accounting is adopted.
Special accounting is adopted for interest rate swaps that meet therequirements for special accounting.
(2) Hedging instruments and hedged items
Hedging instruments:
Interest rate cap transactions
Hedged items:
Interest on loans(3) Hedging policy
The Investment Corporation conducts derivative transactions to hedge
risks stipulated in the Investment Corporation’s articles of incorporationin accordance with the Investment Corporation’s risk management
policy.
(4) Method for assessing the effectiveness of hedging
The effectiveness of hedging is assessed by the correlation between thechange in aggregated amount of cash flow of the hedging instruments
and the change in aggregated amount of cash flow of the hedged items.
Interest rate swaps that meet the requirements for special accounting are
omitted from assessment of the effectiveness.
5.
Scope of funds in the
The funds (cash and cash equivalents) in the statements of cash flows consist
statements of cash flows
of cash on hand and cash in trust; deposits that can be withdrawn at any timeand deposits in trust; and short-term investments with a maturity of 3 months
or less from the date of acquisition, which are readily convertible to cash andbear only an insignificant risk of price fluctuation.

18

6.

Other significant mattersforming basis for preparation offinancial statements(1) Accounting method for trust beneficial interest in real estate, etc.
Concerning owned trust beneficial interest that have real estate
properties as assets in trust, all accounts of assets and liabilities within
assets in trust as well as all accounts of revenues and expenses incurredfrom the assets in trust are recorded in the relevant account item of thebalance sheets and statements of income.
The following material items of the assets in trust recorded in therelevant account item are separately listed on the balance sheets.
(i) Cash and deposits in trust(ii) Buildings in trust, structures in trust, machinery and equipment intrust, tools, furniture and fixtures in trust, other tangible assets intrust, land in trust and construction in progress in trust(iii) Leasehold rights in trust(iv) Lease and guarantee deposits in trust(v) Tenant leasehold and security deposits in trust(2) Accounting method for consumption taxes
Consumption tax and local consumption tax are accounted for by the
tax-exclusion method and consumption taxes that are not tax-deductible
are expensed in the fiscal period under review.
The consumption taxes relating to noncurrent assets, etc. that are nottax-deductible are amortized in equal installments over 5 years.

3.8. Notes to Financial Statements
Concerning notes to lease transactions, securities, retirement benefits, tax-effect accounting and asset
retirement obligations, disclosure is omitted because there is no substantial need for such disclosure in thefinancial report (kessan tanshin).
[Notes to Balance Sheets]*1. Advanced depreciation amount for noncurrent assets acquired by government subsidies, etc.
16th Fiscal Period[As of November 30, 2013]
Buildings in trust
32,898 thousand yen

17th Fiscal Period[As of May 31, 2014]
Buildings in trust
32,898 thousand yen*2. Minimum net assets as provided in Article 67, Paragraph 4 of the Act on Investment Trusts and Investment
Corporations
16th Fiscal Period
17th Fiscal Period[As of November 30, 2013][As of May 31, 2014]
50,000 thousand yen
50,000 thousand yen

19

[Notes to Statements of Income]*1. Breakdown of operating income (loss) from property leasing

A. Property leasing revenue
Rent revenue – real estate
Other lease business revenue
Total property leasing revenue
B. Property leasing expenses
Consignment expenses
Utilities expenses
Taxes and dues
Non-life insurance expenses
Repair expenses
Depreciation
Other lease business expenses
Total property leasing expenses
C. Operating income (loss) fromproperty leasing [A – B]

16th Fiscal Period[From: June 1, 2013
To: Nov. 30, 2013](Unit: thousand yen)
17th Fiscal Period[From: Dec. 1, 2013
To: May 31, 2014]

8,367,068
65,001

8,491,129
92,7588,432,069

654,832
877,331
692,430
12,927251,073
1,328,912
52,866

8,583,887
692,132
842,933
705,980
12,785272,158
1,355,744
49,2653,870,374

3,931,000

4,561,695

4,652,887*2. Breakdown of gain on sales of real estate properties (Unit: thousand yen)
16th Fiscal Period [From: June 1, 2013 To: November 30, 2013]
Not applicable.
17th Fiscal Period [From: December 1, 2013 To: May 31, 2014]
Daiwa Shibuya SS Building
Proceeds from sales of real estate properties
Cost of sales of real estate properties
Other expenses on sales
Gain on sales of real estate properties

3,800,000
3,776,563
19,825
3,610*3. Transactions with major unitholders
16th Fiscal Period[From: June 1, 2013
To: Nov. 30, 2013]
Transactions other than business transaction
Interest expenses on investment corporation bonds

48,102(Unit: thousand yen)
17th Fiscal Period[From: Dec. 1, 2013
To: May 31, 2014]
47,448[Notes to Statements of Unitholders’ Equity]
16th Fiscal Period[From: June 1, 2013
To: Nov. 30, 2013]

17th Fiscal Period[From: Dec. 1, 2013
To: May 31, 2014]*1. Total number of investment units authorized andnumber of investment units issued and outstanding
Total number of investment units authorized
Number of investment units issued and outstanding

20

2,000,000 units

2,000,000 units

395,798 units

395,798 units

[Notes to Statements of Cash Flows]*1. Reconciliation of balance sheet items to cash and cash equivalents at end of period in the statements of cash
flows
(Unit: thousand yen)
16th Fiscal Period
17th Fiscal Period[From: June 1, 2013
[From: Dec. 1, 2013
To: Nov. 30, 2013]
To: May 31, 2014]
Cash and deposits
11,479,896
16,842,863
Cash and deposits in trust
5,445,075
5,694,864
Cash and cash equivalents
16,924,971
22,537,727[Notes to Financial Instruments](1) Matters Concerning Status of Financial Instruments(a) Policy for financial instruments
The Investment Corporation raises funds through bank borrowings, issuance of investment corporation
bonds and issuance of new investment units, etc. for the acquisition and repair of investment properties, thepayments of dividends and the reimbursement of bank borrowings.
As for debt finance, the Investment Corporation focuses on lengthening maturities, fixing interest rates,and dispersing maturity dates in order to secure financial stability and avoid future fluctuation risk ofinterest rates.
The Investment Corporation manages surplus funds through safe and highly liquid money claims andsecurities (in principle, deposits).
Derivative transactions are limited to hedge operations which hedge against interest rate risks.
(b) Contents and risk of financial instruments and policies and related risk management
The Investment Corporation uses the proceeds from the financing of debts and investment corporation
bonds for the acquisition of investment properties (such as trust beneficial interest in real estate) and thereimbursement of current debts and bonds. While these debts and bonds are exposed to liquidity risk, theInvestment Corporation manages the risk by maintaining the LTV ratio at low levels, dispersing maturity
dates, maintaining 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 interest rate risk and the risk is controlled byusing derivative instruments (interest swap transaction).
The effectiveness of hedging is assessed by the correlation between the change in aggregated amount ofcash flow of the hedging instruments and the change in aggregated amount of cash flow of the hedged items.
Interest rate swaps that meet the requirements for special accounting are omitted from assessment of theeffectiveness.
Enforcement and management of derivative transactions are carried out in accordance with the provisions
established by the basic policy of risk management.
Security deposits from tenants are exposed to liquidity risk upon tenants moving out and the Investment
Corporation reduces the risk by pooling funds to a certain degree.
Surplus funds by deposits are exposed to credit risk of counterparties (financial institutions and so on) andare managed by limiting the terms to short durations and establishing credit rating level of counterparties,etc.
(c) Supplementary explanation for fair value of financial instruments
The fair value of financial instruments is based on their market price. The fair value of financial instrumentswith no available market price is determined by using price reasonably estimated. As various factors areincorporated into these calculations, the resulting value may differ if different assumptions are provided.
Furthermore, the contractual amounts of derivative transactions do not represent the market risk involved inthese derivative transactions.
(2) Matters Concerning Fair Value, etc. of Financial Instruments
The carrying amounts and fair values and their differences are as follows. Please note that the following table
does not include those for which discerning of fair value is recognized to be extremely difficult (please refer to(Note 2)).

21

16th Fiscal Period [As of November 30, 2013](1) Cash and deposits(2) Cash and deposits in trust
Total assets(1) Short-term loans payable(2) Current portion of long-term loans payable(3) Investment corporation bonds(4) Long-term loans payable
Total liabilities
Derivative transactions (*)

Carrying amount
11,479,896
5,445,075
16,924,971
3,000,000
33,900,000
3,500,000
107,300,000
147,700,000(88,820)(Unit: thousand yen)
Fair value
Difference
11,479,896－
5,445,075－
16,924,971－
3,000,000－
33,902,829
2,829
3,500,000－
107,324,155
24,155
147,726,984
26,984(88,820)－

Carrying amount

Fair value

17th Fiscal Period [As of May 31, 2014](Unit: thousand yen)
Difference(1) Cash and deposits

16,842,863

16,842,863－(2) Cash and deposits in trust

5,694,864

5,694,864－

22,537,727

22,537,727－(1) Short-term loans payable

5,500,000

5,500,000－(2) Current portion of long-term loans payable

29,500,000

29,506,081

6,081(3) Investment corporation bonds

3,500,000

3,500,000－

125,200,000

125,287,009

87,009163,700,000

163,793,091

93,091(216,183)(216,183)－

Total assets(4) Long-term loans payable
Total liabilities
Derivative transactions (*)(*) The value of assets and liabilities arising from derivatives are indicated at net basis. The amount in parentheses
represents the net liability position.
(Note 1) Method of calculation of fair value of financial instruments and matters concerning derivatives.
Assets(1) Cash and deposits; (2) Cash and deposits in trust
As these are settled within a short period of time, the fair value is approximately the same as the book value
and thus is stated at that book value.
Liabilities(1) Short-term loans payable; (2) Current portion of long-term loans payable; (4) Long-term loans payable
As those with floating interest rates reflect market interest rates within a short period of time and theInvestment Corporation’s credit capability does not differ markedly from the execution, the fair value isapproximately the same as the book value and thus is stated at that book value. Those with fixed interest
rates, on the other hand, are based on the method of calculating by discounting the sum total amount ofprincipal and interest (*) by the reasonably estimated interest rate in the case that the same type ofborrowings are undertaken.
(*) For long-term loans payable that are subject to special accounting for interest rate swaps, the interest ishandled together with applicable interest rate swaps. (Please refer to [Notes to Derivative Transactions]below.)(3) Investment corporation bonds
Concerning the fair value of investment corporation bonds issued by the Investment Corporation, as theseare based on floating interest rates and reflect market interest rates within a short period of time and theInvestment Corporation’s credit capability does not differ markedly from the execution, the fair value isapproximately the same as the book value and thus is stated at that book value.
Derivative transactions
Please refer to [Notes to Derivative transactions] below.

22

(Note 2) Financial products for which it is extremely difficult to estimate fair value.
(Unit: thousand yen)
16th Fiscal Period[As of Nov. 30, 2013]

17th Fiscal Period[As of May 31, 2014]

Tenant leasehold and security deposits
7,306,108
7,674,101
Tenant leasehold and security deposits in trust
4,597,921
4,769,695
Total
11,904,029
12,443,797
Tenant leasehold and security deposits and tenant leasehold and security deposits in trust that are depositedby lessees of rental properties are not subject to disclosure of market price because discerning of the market
price is recognized to be extremely difficult as future cash flows cannot be reasonably estimated due tothere being no fair value and difficulty in calculation of the actual deposit period.
(Note 3) Amount of redemption of monetary claims scheduled to be due after the settlement of accounts.
16th Fiscal Period [As of November 30, 2013](Unit: thousand yen)
Within 1 year

Within 2 years,
but over 1 year

Cash and deposits

11,479,896

－

－

－

－

－

Cash and deposits in trust

5,445,075

－

－

－

－

－

16,924,971

－

－

－

－

－

Total

Within 3 years, Within 4 years, Within 5 years,
but over 2 years but over 3 years but over 4 years

Over 5 years

17th Fiscal Period [As of May 31, 2014](Unit: thousand yen)
Within 1 year

Within 2 years,
but over 1 year

Cash and deposits

16,842,863

－

－

－

－

－

Cash and deposits in trust

5,694,864

－

－

－

－

－

22,537,727

－

－

－

－

－

Total

Within 3 years, Within 4 years, Within 5 years,
but over 2 years but over 3 years but over 4 years

Over 5 years(Note 4) Amount of repayment of investment corporation bond and long-term loans payable scheduled to be due
after the settlement of accounts.
16th Fiscal Period [As of November 30, 2013](Unit: thousand yen)
Within 1 year

Within 2 years,
but over 1 year

Short-term loans payable

3,000,000

－

－

－

－

－

Current portion of
long-term loans payable

33,900,000

－

－

－

－

－

Investment corporation bonds

－

－

－

－

－

3,500,000

Long-term loans payable－

16,600,000

3,700,000

28,250,000

17,350,000

41,400,000

36,900,000

16,600,000

3,700,000

28,250,000

17,350,000

44,900,000

Total

Within 3 years, Within 4 years, Within 5 years,
but over 2 years but over 3 years but over 4 years

Over 5 years

17th Fiscal Period [As of May 31, 2014](Unit: thousand yen)
Within 1 year

Within 2 years,
but over 1 year

Short-term loans payable

5,500,000

－

－

－

－

－

Current portion of
long-term loans payable

29,500,000

－

－

－

－

－

Investment corporation bonds

－

－

－

－

－

3,500,000

Long-term loans payable－

8,300,000

18,200,000

19,400,000

21,500,000

57,800,000

35,000,000

8,300,000

18,200,000

19,400,000

21,500,000

61,300,000

Total

Within 3 years, Within 4 years, Within 5 years,
but over 2 years but over 3 years but over 4 years

23

Over 5 years

[Notes to Derivative Transactions](1) Transactions for which hedge accounting is not applied
16th Fiscal Period [As of November 30, 2013]
Not applicable.
17th Fiscal Period [As of May 31, 2014]
Not applicable.
(2) Transactions for which hedge accounting is applied
16th Fiscal Period [As of November 30, 2013]
About derivative transactions for which hedge accounting is applied, the contract amount, amount equivalent to
the principal provided in the contract, etc. as of the settlement of accounts for each hedge accounting approach
are as follows.
(Unit: thousand yen)Contract amount, etc.
Hedge
Main
Method ofType, etc. of
accounting
hedgedFair value
calculation of
Of which,
derivative transaction
approach
item
that fair value
over 1 year
Interest rate swap
Based on pricePrinciple
Long-termtransaction
quoted by partner
accounting
loans
65,400,000
34,500,000 （88,820）
Fixed payablefinancial institution
methodpayableFloating receivable
SpecialInterest rate swap
Long-term
accounting
transaction
loans
32,350,000(*)
32,350,000
for interest
Fixed payablepayablerate swaps
Floating receivable
Total
97,750,000 66,850,000(88,820)17th Fiscal Period [As of May 31, 2014]
About derivative transactions for which hedge accounting is applied, the contract amount, amount equivalent to
the principal provided in the contract, etc. as of the settlement of accounts for each hedge accounting approach
are as follows.
(Unit: thousand yen)Contract amount, etc.
Hedge
Main
Method ofType, etc. of
accounting
hedgedFair value
calculation of
Of which,
derivative transaction
approach
item
that fair value
over 1 year
Interest rate swap
Principle
Long-term
Based on pricetransaction
accounting
loans
quotedby partner
70,100,000
46,100,000(216,183)
Fixed payable
methodpayablefinancial institution
Floating receivable
SpecialInterest rate swap
Long-term
accounting
transaction
loans
35,350,000
32,850,000(*)
for interest
Fixed payablepayablerate swaps
Floating receivable
Total
105,450,000
78,950,000(216,183)(*) Since the derivative financial instruments qualifying for the special accounting for interest rate swaps areaccounted for as one transaction together with their hedged item, long-term loans payable, the fair value ofthese derivatives is included in that of related long-term loans payable. (Please refer to “Notes to Financial
Instruments (2) Matters Concerning Fair Value, etc. of Financial Instruments (Note 1) Liabilities (2) (4)”).

24

[Notes to Transactions with Related Parties](1) Transactions with related parties
16th Fiscal Period [From: June 1, 2013 To: November 30, 2013]
Name ofClassification company,etc.

Parentcompany

Location

Capital stockorBusiness
investments description
in capital

Daiwa
Chiyoda-ku,
247.3
SecuritiesTokyobillion yen
Group Inc.

Holdingcompany

Percentage ofAmount ofvoting rights, etc.
Balance at
Relationshipheld by related
Nature of transaction Accounting end of periodwith related
item
party (held in thetransaction (thousand(thousand
party
yen)
Investmentyen)
Corporation)
Payment of
Investment
interest
corporation
3,500,000(Held in the
expenses on
bonds
Investment
Provision of investment
Corporation)
48,102
corporation
capital
Other
Directly: 14.99%
bonds(current
19,358Indirectly: 32.57%(Notesliabilities)
1 and 2)Of the amounts above, the amount of transaction does not include consumption tax, etc.
(Note 1) Issuance terms, etc. for investment corporation bonds were determined by conducting a multifaceted
analysis, including the disparity in the spread of investment corporation bonds of other similar
investment corporation bonds and the spread of senior bonds and subordinated bonds in the market (bankbonds) and verification from the spread of subordinated investment corporation bonds issued in the pastin Japan.
(Note 2) Terms and conditions with interested persons were determined according to the regulation concerning
conflict of interest in the internal rule of the Asset Manager.
17th Fiscal Period [From: December 1, 2013 To: May 31, 2014]
Name ofClassification company,etc.

Parentcompany

Location

Capital stockorBusiness
investments description
in capital

Daiwa
Chiyoda-ku,
247.3
SecuritiesTokyobillion yen
Group Inc.

Holdingcompany

Percentage ofAmount ofvoting rights, etc.
Balance at
Relationshipheld by related
Nature of transaction Accounting end of periodwith related
item
party (held in thetransaction (thousand(thousand
party
yen)
Investmentyen)
Corporation)
Payment of
Investment
interest
corporation
3,500,000(Held in the
expenses on
bonds
Investment
Provision of investment
Corporation)
47,448
corporation
capital
Other
Directly: 14.99%
bonds(current
19,457
Indirectly: 32.57%(Notesliabilities)
1 and 2)Of the amounts above, the amount of transaction does not include consumption tax, etc.
(Note 1) Issuance terms, etc. for investment corporation bonds were determined by conducting a multifaceted
analysis, including the disparity in the spread of investment corporation bonds of other similar
investment corporation bonds and the spread of senior bonds and subordinated bonds in the market (bankbonds) and verification from the spread of subordinated investment corporation bonds issued in the pastin Japan.
(Note 2) Terms and conditions with interested persons were determined according to the regulation concerning
conflict of interest in the internal rule of the Asset Manager.
(2) Notes to parent company and significant affiliated companies
16th Fiscal Period [From: June 1, 2013 To: November 30, 2013]
Parent company’s information
Daiwa Securities Group Inc. (listed on the Tokyo Stock Exchange and Nagoya Stock Exchange)
17th Fiscal Period [From: December 1, 2013 To: May 31, 2014]
Parent company’s information
Daiwa Securities Group Inc. (listed on the Tokyo Stock Exchange and Nagoya Stock Exchange)

25

[Notes to Investment and Rental Properties]
The Investment Corporation has rental office buildings, etc. (including land) in Tokyo and other regions. The
carrying amount, amount of increase (decrease) during period and fair value for these rental properties are as
follows.
(Unit: thousand yen)
16th Fiscal Period
17th Fiscal Period[From: June 1, 2013
[From: Dec. 1, 2013
To: Nov. 30, 2013]
To: May 31, 2014]
Carrying amount
Balance at beginning of period

324,976,352

345,046,153

Amount of increase (decrease) during
period20,069,800

10,737,607

Balance at end of period

345,046,153

355,783,760

328,290,000

342,230,000

Fair value at end of period(Note 1) The carrying amount is the amount after accumulated depreciation is deducted from the cost of
acquisition.
(Note 2) Of the amount of increase (decrease) for rental properties during the 16th Fiscal Period, the amount of
increase is mainly attributable to acquisition of Tosen Dogenzaka Daini Building (4,500 million yen),
Akasaka Business Place (9,200 million yen), and Nisseki Shibuya Building (7,000 million yen), and theamount of decrease is mainly attributable to depreciation (1,328 million yen). Of the amount of increase(decrease) for rental properties during the 17th Fiscal Period, the amount of increase is mainly
attributable to acquisition of Integral Tower (15,220 million yen), and the amount of decrease is mainly
attributable to sales of Daiwa Shibuya SS Building (3,776 million yen) and to depreciation (1,355 million
yen).
(Note 3) The fair value at end of period presents the appraisal value estimated by an external real estate appraiser.
The income (loss) for investment and rental properties are as presented in “Notes to Statements of Income.”

26

[Segment Information, etc.](1) Segment Information
Segment information has been omitted because the Investment Corporation has no segment except the property
leasing business.
(2) Related Information
16th Fiscal Period [From: June 1, 2013 To: November 30, 2013]① Information about products and services
Information about products and services has been omitted because net sales to external customers for one
segment are in excess of 90% of the operating revenue on statements of income.
② Information about geographical areas
A. Net sales
Information about net sales has been omitted because net sales to external customers in Japan are inexcess of 90% of the operating revenue on statements of income.
B. Property, plant and equipment
Information about property, plant and equipment has been omitted because the amount of property,
plant and equipment located in Japan is in excess of 90% of the amount of property, plant andequipment on balance sheets.
③ Information about major customers
Information about principal customers has been omitted because each net sales to a single externalcustomer accounts for less than 10% of the operating revenue on statements of income.
17th Fiscal Period [From: December 1, 2013 To: May 31, 2014]① Information about products and services
Information about products and services has been omitted because net sales to external customers for one
segment are in excess of 90% of the operating revenue on statements of income.
② Information about geographical areas
A. Net sales
Information about net sales has been omitted because net sales to external customers in Japan are inexcess of 90% of the operating revenue on statements of income.
B. Property, plant and equipment
Information about property, plant and equipment has been omitted because the amount of property,
plant and equipment located in Japan is in excess of 90% of the amount of property, plant andequipment on balance sheets.
③ Information about major customers
Information about principal customers has been omitted because each net sales to a single externalcustomer accounts for less than 10% of the operating revenue on statements of income.

27

[Notes to Per Unit Information]
16th Fiscal Period
17th Fiscal Period[From: June 1, 2013 [From: Dec. 1, 2013
To: Nov. 30, 2013]
To: May 31, 2014]
Net assets per unit
509,560 yen
509,490 yen
Net income per unit
7,478.15 yen
7,620.91 yen(Note 1) The net income per unit was calculated by dividing the net income by the daily weighted average numberof investment units issued and outstanding. The diluted net income per unit is not stated as there are no
diluted investment units.
(Note 2) The basis for calculating the net income per unit is as follows.
16th Fiscal Period
17th Fiscal Period[From: June 1, 2013
[From: Dec. 1, 2013
To: Nov. 30, 2013]
To: May 31, 2014]
Net income (thousand yen)
2,959,835
3,016,340
Amounts not attributable to common unitholders (thousand yen)――
Net income attributable to common investment units (thousand
2,959,835
3,016,340
yen)
Average number of investment units during the period (unit)
395,798
395,798[Notes to Significant Subsequent Events](1) Issuance of Investment Units
The Investment Corporation passed resolutions concerning issuance of new investment units as follows at
the meetings of the Board of Directors of the Investment Corporation held on June 17, 2014 and June 25,
2014. Payment for the issuance of new investment units through public offering was completed on July 2,
2014. In addition, payment for the issuance of new investment units by third-party allocation is scheduled
for July 30, 2014.
a. Issuance of new investment units through public offering (primary offering)(i) Number of units to be offered:
41,092 units(ii) Net price (paid-in price):
450,746 yen per unit(iii) Net amount (total paid-in amount): 18,522,054,632 yen(iv) Payment date:July 2, 2014(v) Use of proceeds:
Acquisition of the specified assets stated in “(2) Acquisition of Assets” below as well as theexpenses associated with the acquisitions
b. Issuance of new investment units by third-party allocation(i) Number of units to be offered (upper limit):
4,110 units(ii) Net price (paid-in price):
450,746 yen per unit(iii) Net amount (total paid-in amount) (upper limit):
1,852,566,060 yen(iv) Allottee and number of units to be issued (upper limit): Daiwa Securities Co., Ltd. 4,110 units(v) Payment date:July 30, 2014(vi) Use of proceeds:
Acquisition of the specified assets stated in “(2) Acquisition of Assets” below as well as theexpenses associated with the acquisitions(Note) The investment units to be issued by third-party allocation may not be subscribed in whole orin part, and as a result, the subscription right will be forfeited and the final number ofinvestment units issued with respect to the third-party allocation may be reduced to the same
extent, or such issuance itself may be cancelled.

28

(2) Acquisition of Assets
a. The Investment Corporation acquired a trust beneficial interest in real estate on July 4, 2014 as
follows.
Summary of Asset Acquired
Property name

Azabu Green Terrace

Type of asset

Trust beneficial interest in domestic real estate

Location

3-20-1 Minami Azabu Minato-ku, Tokyo
14,000 million yen

Acquisition price(excluding associated acquisition costs, consumption tax, etc.)

Date of conclusion of purchase agreement June 17, 2014
Date of delivery
SellerJuly 4, 2014
Azabu Green Terrace Goudou Kaisha (Limited Liability
Company)b. The Investment Corporation determined on June 17, 2014 to acquire a trust beneficial interest in realestate as follows.
Summary of Asset to be Acquired
Property nameKitahama Grand Building

Type of asset

Trust beneficial interest in domestic real estate

Location

2-2-14 Awajicho, Chuou-ku, Osaka
9,481.5 million yen

Acquisition price(excluding associated acquisition costs, consumption tax, etc.)

Date of conclusion of purchase agreement June 17, 2014
Date of delivery

August 1, 2014 (scheduled)

SellerGoudou Kaisha North Beach (Limited Liability Company)

29

3.9. Increase (Decrease) in Number of Investment Units Issued and Outstanding
Number of investment units
Unitholders’ capitalissued and outstanding(million yen)(units)
Notes
Payment date
Description
Increase
Increase
Balance
Balance(Decrease)(Decrease)
Incorporation throughJuly 11, 2005
400
400
200
200 (Note 1)
private placement
Capital increase throughOctober 18, 2005
99,600100,000
49,49849,698 (Note 2)
public offering
Capital increase throughJuly 10, 2007
100,000
200,000
75,316125,015 (Note 3)
public offering
Capital increase by way of a
August 7, 2007
5,000
205,000
3,765
128,781 (Note 4)
third-party allotment
Capital increase by way of aJune 4, 2008
138,905
343,905
59,999188,780 (Note 5)
third-party allotment
Capital increase by way of a
July 1, 2009
51,893395,798
10,000198,780 (Note 6)
third-party allotment(Note 1) The Investment Corporation was incorporated at an issue price of 500,000 yen per unit.
(Note 2) The Investment Corporation issued new investment units through public offering at an issue price of
515,000 yen per unit (amount paid in: 496,975 yen) to procure funds for acquisition of properties to beacquired upon listing, etc.
(Note 3) The Investment Corporation issued new investment units through public offering at an issue price of
781,060 yen per unit (amount paid in: 753,165 yen) to procure funds for acquisition of acquisition
properties, etc.
(Note 4) The Investment Corporation issued new investment units by way of a third-party allotment at an issue priceof 753,165 yen per unit (amount paid in: 753,165 yen) to fund part of acquisition of acquisition properties,
etc.
(Note 5) The Investment Corporation issued new investment units by way of a third-party allotment at an issue priceof 431,949 yen per unit (amount paid in: 431,949 yen) to fund repayment of loans and redemption of
investment corporation bonds.
(Note 6) The Investment Corporation issued new investment units by way of a third-party allotment at an issue priceof 192,705 yen per unit (amount paid in: 192,705 yen) to fund repayment of loans, capital expenditure toenhance property value, acquisition of property, etc.

30

4. Changes in Directors
4.1. Changes in Directors at the Investment Corporation
Not applicable.
4.2. Changes in Directors at the Asset Manager
Shinji Kiso assumed the office of auditor (non-executive) on May 1, 2014.
The following is the status of directors at the Asset Manager as of the date of this document.
Title
President andRepresentative
Director

Name
Akira
Yamanouchi

Career summary
Apr. 1986
Apr. 2002
May 2002

Mar. 2003

Aug. 2004

Feb. 2008

Feb. 2009
Jul. 2009
Apr. 2010
May 2010
Vice-President andRepresentative
Director (Head ofBusiness Planning)

Yuji
Shinotsuka

Apr. 1989
Jun. 2009
Jul. 2009

Nov. 2009
Apr. 2011
Oct. 2012
Dec. 2012
Jan. 2014

Joined Marubeni Corporation
Joined Pacific Management Corporation
Temporarily transferred to Pacific Investment
Advisors Corporation (currently, AD Investment
Management Co., Ltd.)
President and Representative Director of PacificInvestment Advisors Corporation (with employmenttransfer)
Executive Director of Nippon Residential Investment
Corporation (currently, Advance Residence
Investment Corporation)
President and Representative Director of PacificInvestment Partners Inc. (currently, Cushman &Wakefield Asset Management K.K.)
Representative Director (part-time basis) of Pacific
Holdings, Inc.
Executive Managing Director of Cushman &Wakefield Asset Management K.K.
Advisor of Daiwa Real Estate Asset Management
Co., Ltd.
President and Representative Director (current
position)
Joined Daiwa Securities Co. Ltd. (currently, Daiwa
Securities Group Inc.)
Head of Corporate Planning Department
Temporarily transferred to Daiwa Real Estate AssetManagement Co., Ltd.
Vice-President and Representative Director (Head of
IR & Planning Department)
Vice-President and Representative Director (Head ofCorporate Planning Department)
Vice-President and Representative Director (Head ofBusiness Planning and Finance Department)
Vice-President and Representative Director (Head ofBusiness Planning) (current position)
Executive Office of Daiwa Residential Private
Investment Corporation (current position)
Executive Office of Japan Health Care Investment
Corporation (current position)

31

Number ofshares held――TitleName

Vice President
and Representative
Director (Head ofFund Management
Department)

YoshikiNishigaki

Career summary
Apr. 1992
May 2004
Feb. 2006
Mar. 2007
Mar. 2008
Nov. 2008

May 2008
Aug. 2010
Feb. 2011
Apr. 2012
Oct. 2013
Apr. 2014
Director (Head of
Administration
Department)

NaoyukiOwa

Apr. 1986
Apr. 1990
Jun. 2006

Oct. 2006
Jul. 2009

Director(non-executive)

Toshihiro
Matsui

Apr. 1985
May 2004

Apr. 2005
Oct. 2005
Oct. 2006
Apr. 2007
Oct. 2008
Apr. 2009
Jul. 2009
Apr. 2011
Apr. 2014

Joined Cititrust & Banking Corporation
Joined K.K. DaVinci Advisors
Transferred to K.K. DaVinci Select (currently, Daiwa
Real Estate Asset Management Co., Ltd.)
Head of IR & Business Planning Department
President and Representative Director
Executive Director, DA Office Investment
Corporation (currently, Daiwa Office Investment
Corporation)
Vice President and Representative Director, Daiwa
Real Estate Asset Management Co., Ltd.
Resigned from Executive Director, Daiwa Office
Investment CorporationVice-President and Representative Director (Head ofAdvisory Department)
Vice-President and Representative Director (Head ofFund management Department)
Vice-President and Representative Director (Head of
Sales Implement and Fund management Department)
Vice-President and Representative Director (Head ofFund management Department) (current position)
Joined Tokyo High Court as Court Administrative
Official
Joined Daiwa Securities Co. Ltd. (currently, Daiwa
Securities Group Inc.)
Head of Corporate Planning Department andTreasury Department of Daiwa Securities SMBC
Co., Ltd. (currently, Daiwa Securities CapitalMarkets Co. Ltd.)
Head of Corporate Planning Department of Daiwa
Securities Group Inc.
Temporarily transferred to Daiwa Real Estate AssetManagement Co., Ltd.
Director (Head of Administration Department)(current position)
Joined Daiwa Securities Co. Ltd. (currently, Daiwa
Securities Group Inc.)
Head of Corporate Institutions Department (V) of
Daiwa Securities SMBC Co., Ltd. (currently, Daiwa
Securities Capital Markets Co. Ltd.)
Head of Corporate Institutions Department (IV)
Head of Corporate Finance Department
Head of Corporate Finance Department (I)Head of Fixed Income, Currency and Commodities(FICC) Department
Head of Business Planning Department of Daiwa
Securities Group Inc.
Executive Officer
Director (non-executive) of Daiwa Real Estate AssetManagement Co., Ltd. (current position)
Executive Managing Director of Daiwa Securities
Group Inc.
Senior Managing Director of Daiwa Securities
Group Inc. (current position)

32

Number ofshares held―――TitleDirector(non-executive)

Name
MikitaKomatsu

Career summary
Apr. 1985
Oct. 2005
Oct. 2008
Apr. 2010
Apr. 2011
Apr. 2012
Apr. 2013

Auditor(non-executive)

MasaruShirataki

Apr. 1985
Apr. 2004
Oct. 2009
Apr. 2011
Apr. 2013

Jun. 2013
Auditor(non-executive)

Shinji Kiso

Apr. 2001
Dec. 2009
Jul. 2011
May 2014

Joined Daiwa Securities Co. Ltd. (currently, Daiwa
Securities Group Inc.)
Head of Finance Department, Daiwa Securities
Group Inc.
President of Daiwa Securities SMBC Europe Limited(currently Daiwa Capital Markets Europe Limited)
Senior Managing Director, Daiwa Securities CapitalMarkets Co. Ltd.
Senior Managing Director , Daiwa Securities GroupInc.
Director (non-executive) of Daiwa Real Estate AssetManagement Co., Ltd. (current position)
Executive Managing Director of Daiwa Securities
Group Inc. (current position)
Joined Daiwa Securities Co. Ltd. (currently, Daiwa
Securities Group Inc.)
General Manager of Corporate Planning Departmentof Daiwa Securities SMBC Co. Ltd.
General Manager of Legal Department of Daiwa
Securities Group Inc.
General Manager of Internal Audits of Daiwa
Securities Group Inc. (current position)
Director of Daiwa Securities Group Inc.
Auditor of Daiwa Real Estate Asset Management Co.
Ltd. (non-executive) (current position)
Director of Daiwa Securities Group Inc. (current
position)
Joined Daiwa Securities SMBC Co. Ltd. (currently,
Daiwa Securities Co. Ltd.)
Corporate Planning Department of Daiwa Securities
Group Inc. (current position)
Corporate Planning Department of Daiwa Securities
Co. Ltd. (current position)
Auditor of Daiwa Real Estate Asset Management Co.
Ltd. (non-executive) (current position)

33

Number ofshares held―――

Daiwa Office Investment Corporation (8976) Financial Report for the 17th Fiscal Period

5. Reference Information
5.1. Investment Status

Type of asset

Real estate
Trust beneficial
interest in real estate

17th Fiscal Period(As of May 31, 2014)
Total amount owned
As a percentage of(million yen)
total assets(Note 1)(%)

Use

RegionOfficeFive Central Wards of Tokyo

16,357

4.3

Five Central Wards of Tokyo

292,285

76.8

Greater Tokyo

36,9389.7

Major Regional Cities

10,2022.7

355,783

93.4

24,9396.6

380,723

100.0

OfficeTotal
Deposits and other assets
Total amount of assets (Note 2)[355,783][93.4](Note 1) The total amount owned is the carrying amount (the book value after deducting depreciation in the case ofreal estate and trust beneficial interest in real estate).
(Note 2) The figures in parentheses [ ] under “Total amount of assets” shows the portion of the applicable asset that,in effect, corresponds to the holding of real estate properties. The amount of construction in progress(including construction in progress in trust) is not included in the amount of real estate and trust beneficial
interest in real estate.

- 34 -

Daiwa Office Investment Corporation (8976) Financial Report for the 17th Fiscal Period
5.2. Investment Real Estate Properties (As of May 31, 2014)
5.2.1. Price and Investment Ratio of Investment Real Estate Properties
Type of Acquisition
pricespecified
RegionProperty nameCarrying
amountEstimated price Investment
ratio
at end of period(million yen)(%)
(Note 6)(Note 7)
15,4003.9(million yen)(million yen)

(Note 4)(Note 5)

14,10013,486

3,050

2,871

3,150

0.8

Daiwa Shibaura

8,265

8,074

7,180

2.3

Daiwa Minami-Aoyama

4,550

4,458

4,100

1.2

Daiwa Sarugakucho

3,190

3,245

3,160

0.9

Daiwa A Hamamatsucho (Note 8)

2,865

2,798

2,860

0.8

Daiwa Jingumae

2,800

2,712

2,100

0.8

Daiwa Shibadaimon

2,578

2,407

2,640

0.7

Daiwa Misakicho

2,346

2,228

2,500

0.6

Daiwa Shimbashi 510

2,080

2,118

2,380

0.6

Daiwa Tsukijiekimae

1,560

1,393

1,470

0.4

Daiwa Tsukiji

1,240

1,189

1,440

0.3

Daiwa Tsukiji 616

2,440

2,249

2,480

0.7

Daiwa Tsukishima

7,840

6,992

8,140

2.2

Daiwa Nihonbashi Horidomecho (Note 9)

2,520

2,477

2,490

0.7

1,600

1,549

1,700

0.4

7,420

7,071

7,100

2.0

4,620

4,491

4,500

1.3

3,460

3,330

3,110

1.0

2,910

2,879

2,660

0.8

Daiwa Onarimon

13,86013,54313,000

3.8

Shinjuku Maynds Tower (Note 8)

asset
Daiwa Ginza
Daiwa Ginza Annex

Daiwa Azabudai
FiveCentral Daiwa Nihombashi Honcho
Wards of Daiwa Ginza 1-chome
Tokyo Daiwa Kyobashi(Note 1)
Daiwa Kojimachi 4-chome (Note 9)

Real estate

Trustbeneficial
interest inreal estate

133,800

130,441

113,000

36.8

SHIBUYA EDGE

5,900

5,762

4,300

1.6

Daiwa Kodenmacho

2,460

2,419

1,980

0.7

Daiwa Jimbocho

4,150

4,085

2,900

1.1

Daiwa Nishi-Shimbashi

5,000

4,964

4,800

1.4

Daiwa Kudan

4,000

3,897

2,960

1.1

Daiwa Kayabacho

5,600

5,479

6,610

1.5

Daiwa Jimbocho 3-chome (Note 9)

3,550

3,528

3,860

1.0

E SPACE TOWER

24,00023,864

28,100

6.6

Daiwa Nihonbashi Hongokucho (Note 9)

1,721

1,693

1,890

0.5

shinyon curumu

9,650

9,941

10,400

2.7

Daiwa Shibuya Dougenzaka (Note 9)

4,500

4,522

4,750

1.2

Akasaka Business Place

9,200

9,280

10,700

2.5

Daiwa Shibuya Miyamasuzaka (Note 9)

7,000

7,192

7,450

1.9

315,825

308,642

297,260

86.7

Total for Five Central Wards of Tokyo (35 properties)- 35 -

Daiwa Office Investment Corporation (8976) Financial Report for the 17th Fiscal Period

RegionEstimated price Investment
ratio
at end of period(million yen)(%)
(Note 6)(Note 7)3,570
1.0

Acquisition
price

Carrying
amount(million yen)(million yen)

(Note 4)(Note 5)

3,653

3,373

2,958

2,786

3,240

0.8

4,950

4,311

3,240

1.4

7,710

7,361

5,890

2.1

1,650

1,685

2,030

0.5

Daiwa Kamiooka (Note 9)

2,000

2,040

2,120

0.5

Integral Tower

15,22015,38015,7004.2

38,14136,93835,790

10.5

4,810

4,748

2,770

1.3

5,300

5,453

6,410

1.5

10,110

10,2029,180

2.8

Property name

Type ofspecifiedasset

Daiwa Kinshicho
Daiwa Higashi-Ikebukuro
Greater Benex S-3
Tokyo Daiwa Shinagawa North(Note 2) Daiwa Osaki 3-chome (Note 9)

Total for Greater Tokyo (7 properties)
Major
Daiwa Minami-Senba
Regional
CitiesDaiwa Meieki (Note 9)(Note 3)
Total for Major Regional Cities (2 properties)

Trust
beneficial
interest inreal estate

Trustbeneficial
interest inreal estate

Total (44 properties)
364,076355,783
342,230100.0(Note 1) “Five Central Wards of Tokyo” means Chiyoda, Chuo, Minato, Shinjuku and Shibuya wards.
(Note 2) “Greater Tokyo” means Tokyo excluding the Five Central Wards of Tokyo, Kanagawa, Chiba and Saitama
prefectures.
(Note 3) “Major Regional Cities” means Osaka area (i.e., Osaka, Kyoto and Hyogo prefectures), Nagoya area (Aichi,
Mie and Gifu prefectures) and ordinance-designated cities and core cities under the Local Autonomy Act.
(Note 4) Acquisition price is excluding acquisition costs, fixed property tax, city planning tax, consumption tax andlocal consumption tax.
(Note 5) Carrying amount is the book value after deducting depreciation as of May 31, 2014.
(Note 6) Estimated price at end of period is the price as of May 31, 2014 stated in appraisal reports prepared by realestate appraisers of Tanizawa Sogo Appraisal Co., Ltd., Daiwa Real Estate Appraisal Co., Ltd., Morii
Appraisal & Investment Consulting, Inc. and Japan Real Estate Institute in accordance with the articles ofincorporation of the Investment Corporation and the rules of The Investment Trusts Association, Japan.
(Note 7) Investment ratio is the acquisition price of each property expressed as a percentage of the total amount ofacquisition prices, rounded to one decimal place.
(Note 8) For Daiwa A Hamamatsucho Building and Shinjuku Maynds Tower, the figures are those pertaining to theInvestment Corporation’s ownership interest.
(Note 9) The Investment Corporation changed the name of assets under management on April 1, 2014 from
“Nihombashi MS Building” to “Daiwa Nihonbashi Horidomecho,” “Sunline Building No. 7” to “Daiwa
Kojimachi 4-chome Building,” “Jimbocho Place” to “Daiwa Jinbocho 3-chome Building,” “Nihonbashi
Hongokucho Tosei Building” to “Daiwa Nihonbashi Hongokucho Building,” “Tosen Dogenzaka Building”
to “Daiwa Shibuya Dougenzaka Building,” “Nisseki Shibuya Building” to “Daiwa Shibuya Miyamasuzaka
Building,” “West Park Osaki” to “Daiwa Osaki 3-chome Building,” “Kamiooka Eye Mark Building” to“Daiwa Kamiooka Building” and “Honshu Meieki Building” to “Daiwa Meieki Building.”- 36 -

Daiwa Office Investment Corporation (8976) Financial Report for the 17th Fiscal Period
5.2.2. Summary of Building and Leasing of Investment Real Estate
RegionProperty nameDaiwa Ginza
Daiwa Ginza Annex
Daiwa Shibaura
Daiwa Minami-Aoyama
Daiwa Sarugakucho (Note 8)
Daiwa A Hamamatsucho
Daiwa Jingumae
Daiwa Shibadaimon
Daiwa Misakicho (Note 8)
Daiwa Shimbashi 510
Daiwa Tsukijiekimae
Daiwa Tsukiji
Daiwa Tsukiji 616
Daiwa Tsukishima
Five
CentralDaiwa Nihonbashi Horidomecho
Wards ofTokyo
Daiwa Azabudai
Daiwa Shibuya SS (Note 9)
Daiwa Nihombashi Honcho
Daiwa Ginza 1-chome
Daiwa Kyobashi
Daiwa Kojimachi 4-chome
Daiwa Onarimon
Shinjuku Maynds Tower (Note10)
SHIBUYA EDGE
Daiwa Kodenmacho
Daiwa Jimbocho
Daiwa Nishi-Shimbashi
Daiwa Kudan
Daiwa Kayabacho (Note 8)

Structure
LeasableandConstruction
floor area
number of completion(m2)
floors(Note 2)
(Note 3)(Note 1)SRC
8,175.26
July 1963
B3 / 12F
SRC
2,032.99
Aug. 1972
B3 / 8F
SRC
9,619.63
Oct. 1987
B1 / 12FS / SRC
Sept. 1990
2,715.53
B2 / 5F
SRC
June 1985
3,657.43
8F
SRC
July 1993
3,663.38
B2 / 10FRC
2,198.61
Dec. 1997
B1 / 4F
SRC / RC2,386.02
Nov. 1996
B1 / 7FS
2,137.53
July 1996
8F
SRC
Apr. 1974
2,676.14
B1 / 8F
SRC
Jan. 1996
2,659.59
10F
SRC
Jan. 1990
1,487.82
B1 / 7F
SRC
2,931.93
Mar. 1994
B1 / 9FS
8,426.85
July 1996
5F
SRC
2,850.81
Apr. 1993
B2 / 7F
SRC
Apr. 1984
1,697.38
B2 / 9F
SRC / S
July 1977
B1 / 9F
SRC
Jan. 1964
7,418.61
B1 / 10F
SRC
3,758.43
Jan. 1962
B2 / 11F
SRC
3,265.83
Oct. 1974
B1 / 8F
SRC
2,690.90
Oct. 1987
B2 / 9F
SRC
Apr. 1973
11,615.37
9F
S / SRC
Sept. 1995
45,543.98
B3 / 34FRC
2,480.65
Aug. 2006
B1 / 9F
SRC
2,379.31
Mar. 1985
8F
S
3,164.26
Mar. 1997
B1 / 8F
SRC
July 1993
4,815.84
B1 / 10F
SRC
Mar. 1987
2,882.61
9F
S / SRC
5,899.11
Apr. 2010
B1 / 8F- 37 -

Leasedfloor area(m2)
(Note 4)

Rent revenue
Total
Occupancy
duringnumber of
ratecurrent period
tenants(%)(thousand yen)
(Note 5)(Note 6)(Note 7)

7,573.41

27

92.6

294,524

2,032.99

7

100.0

92,3499,497.18

53

98.7

221,486

2,715.53

6

100.0

120,056

3,657.43

1

100.0

-

3,663.38

12

100.0

134,479

2,198.61

4

100.0

69,0752,386.02

7

100.0

76,623

2,137.53

1

100.0

-

2,660.92

6

99.4

82,8152,659.59

6

100.0

26,1281,487.82

5

100.0

49,6582,931.93

9

100.0

83,656

8,426.853

100.0

281,196

2,850.81

9

100.0

79,488

1,697.38

10

100.0

48,491---

114,4476,477.22

12

87.3

191,760

3,731.66

13

99.2

120,655

3,265.83

9

100.0

96,2552,690.90

7

100.0

86,851

11,615.37

9

100.0

352,856

43,166.51

37

94.7

2,297,413

2,480.65

5

100.0

103,330

2,379.31

8

100.0

63,105

3,164.26

7

100.0

92,921

4,815.84

12

100.0

151,659

2,882.61

6

100.0

92,0835,899.11

1

100.0

-

Daiwa Office Investment Corporation (8976) Financial Report for the 17th Fiscal Period
Structure
LeasableandConstruction
floor area
RegionProperty namenumber of completion(m2)(Note 2)floors(Note 3)(Note 1)
S
Feb. 2010
2,889.34
Daiwa Jimbocho 3-chome
9F
S / SRCE SPACE TOWER
Oct. 2002
13,960.87
B1 / 15F
S
2,143.08
Daiwa Nihonbashi Hongokucho
May 2010
8F
S / RC
6,751.31
shinyon curumu
Jan. 2012
B2 / 11F
SRC
4,144.90
Daiwa Shibuya Dougenzaka
Mar. 1988
B1/11F
SRC
Akasaka Business Place
Sept. 1990
8,794.51
B2/7F
S
Daiwa Shibuya Miyamasuzaka
Dec. 1988
6,327.95
B1/12F200,243.76
Total for Five Central Wards of Tokyo (35 properties)
S
5,347.27
Daiwa KinshichoJan. 1992
B1 / 5F
SRC / S
Daiwa Higashi-Ikebukuro
June 1993
4,461.48
B1 / 9FS / SRC
Benex S-3
Feb. 1994
7,470.18
B1 / 12F
SRC
Greater Daiwa Shinagawa North
July 1991
6,549.98
B1 / 11FTokyo
S / RC
1,786.58
Daiwa Osaki 3-chome
Sept. 2007
B1 / 6F
S / SRC
Daiwa Kamiooka
May 2011
2,630.30
B3 / 7F
Integral Tower (Note 11)

S/SRC
B2/18F

Major
Regional
CitiesDaiwa Minami-Senba
Daiwa Meieki

Rent revenue
Total
Occupancy
duringnumber of
ratecurrent period
tenants(%)(thousand yen)
(Note 5)(Note 6)(Note 7)2,545.95

7

88.1

98,186

12,448.65

689.1

683,134

2,143.08

6

100.0

61,1286,505.00

18

96.3

148,764

4,144.90

5

100.0

145,915

8,794.51

15

100.0

324,550

6,327.95

9

100.0

216,489

194,056.69

358

96.9

7,466,398

5,347.27

6

100.0

132,365

4,115.48

7

92.2

78,712

7,338.82

24

98.2

159,547

6,549.98

13

100.0

188,433

1,579.644

88.4

64,3572,248.34

7

85.4

76,015

17,710.63

17,140.81

10

96.7

7,061

45,956.42

44,320.34

71

96.4

706,493

Sept. 1986

5,719.54

4,333.61

6

75.7

111,035

Dec. 2007

7,461.90

7,348.48

23

98.4

207,202

13,181.44
259,381.62

11,682.09
250,059.12

29
458

88.6
96.4

318,237
8,491,129

June 1993

Total for Greater Tokyo (7 properties)
SRC
B1 / 8F
S
12F

Leasedfloor area(m2)
(Note 4)

Total for Major Regional Cities (2 properties)
Total (44 properties)(Note 1) “Structure and number of floors” are the entries in the real estate registry of the building of the applicable
investment real estate property. “S” refers to steel-framed structure, “RC” refers to reinforced concrete
structure, “SRC” refers to steel-framed reinforced concrete structure, “B” refers to floors below ground and“F” refers to floors above ground.
(Note 2) “Construction completion” is the entry in the real estate registry of the building of the applicable investment
real estate property.
(Note 3) “Leasable floor area” represents the floor area of the building of the applicable property that is leasable, notincluding the leasable area of the land (including level parking space), and is the floor area indicated in thelease contract, etc. as of May 31, 2014.
(Note 4) “Leased floor area” is the sum total of the floor area that is actually leased based on lease agreements, etc.
executed with end-tenants as of May 31, 2014.
(Note 5) “Total number of tenants” is the number of end-tenants (Properties excluding Daiwa Ginza and Daiwa Ginza
Annex have a master lease agreement). When there is a tenant occupying multiple buildings, the concerned
tenant is counted and stated for each individual building.
(Note 6) “Occupancy rate” is the figure arrived at when leased floor area is divided by leasable floor area, rounded
down to one decimal place.
(Note 7) “Rent revenue during current period” is rent income, common area charges income, parking lot income andother income generated from the applicable investment real estate property during the 17th Fiscal Period,
rounded down to the nearest thousand yen.

- 38 -

Daiwa Office Investment Corporation (8976) Financial Report for the 17th Fiscal Period(Note 8) Not shown for such reasons as consent was not obtained from major tenants to disclose the rent revenue
during current period for the properties.
(Note 9) The property was divested on May 30, 2014. This is reflected in the totals for only the rent revenue during
current period.
(Note 10) The real estate in trust pertaining to trust beneficial interest held by the Investment Corporation is thecommon ownership interest corresponding to six-sevenths of the entire property. Accordingly, leasable floorarea and leased floor area are the floor areas corresponding to six-sevenths of the entire building.
(Note 11) The buildings consist of three registrations. Of these, the details of the major building are shown here.

- 39 -

Daiwa Office Investment Corporation (8976) Financial Report for the 17th Fiscal Period
5.2.3. Capital Expenditures for Assets under Management
A. Capital Expenditures for 17th Fiscal Period
The following are the principal capital expenditures arising from renovation construction work, etc. currently
planned for existing portfolio properties. Please note that the expected construction amount includes portions thatare expensed as a separate account item of accounting costs.
Name of real estate properties(Location)

Upgrading of CVCF and

Shinjuku Maynds Tower(Shibuya-ku, Tokyo)

renovation work fordisaster-prevention equipment
Renovation work for central

Shinjuku Maynds Tower(Shibuya-ku, Tokyo)

supervisory system
Upgrading of main central

Shinjuku Maynds Tower(Shibuya-ku, Tokyo)

Expected construction amount (million yen)
Total
Amount paid
Total amountamount during current period already paid

Scheduled
implementation
periodPurposesupervisory system VAV andcontroller

From: Oct. 2013
To: Mar. 2015

406

254

6

From: Oct. 2013
To: Sept. 2015

297

54

5

From: Oct. 2013
To: Sept. 2015

110

14

1

Daiwa Tsukishima Building(Chuo-ku, Tokyo)

Upgrading of air-conditioning
system

From: Jul. 2014
To: Nov. 2014

101

－

－

Shinjuku Maynds Tower(Shibuya-ku, Tokyo)

Replacement of

From: Jun. 2014
To: Jul. 2014

56

－

－

separate-installation-type battery

B. Capital Expenditures during 17th Fiscal Period
The following summarizes the primary construction work that constitutes capital expenditures implemented
during the 17th Fiscal Period. Capital expenditures for the 17th Fiscal Period amounted to 453 million yen and,
when combined with the 272 million yen in repair expenses charged to 17th Fiscal Period expenses, totals 726
million yen in construction work implemented.
Name of real estate properties(Location)
Shinjuku Maynds Tower(Shibuya-ku, Tokyo)
DaiwaMisakicho Building(Chiyoda-ku, Tokyo)
Shinjuku Maynds Tower(Shibuya-ku, Tokyo)

Purpose

PeriodRenewal work for common area for shops on B1F
Upgrading of air-conditioning system
Renovation work for common area

Other

Construction amount paid
(million yen)

From: Jan. 2014
To: May 2014
From: Apr. 2014
To: May 2014
From: Jan. 2014
To: Feb. 2014
From: Dec. 2013
To: May 2014

98
47
27
280

Total

453

C. Reserve Amount for Long-Term Repair Plans (Reserve for Repairs)
The Investment Corporation sets aside the following reserve for repairs from cash flows during the fiscal period
for the payment of future major repairs.
(Unit: million yen)
13th
14th
15th
16th
17th
FiscalPeriodFiscalPeriodFiscalPeriodFiscalPeriodFiscalPeriodFiscal period[From: Dec. 1, 2011
To: May 31, 2012]

Balance of reserve at
beginning of previous
periodAmount of reserve incurrent period
Reversal of reserve incurrent period
Amount carried forward
to next period[From: June 1, 2012
To: Nov. 30, 2012][From: Dec. 1, 2012
To: May 31, 2013][From: June 1, 2013
To: Nov. 30, 2013][From: Dec. 1, 2013
To: May 31, 2014]

1,239

1,058

611

806

830

306

89

619

181

794

487

536

424

156

603

1,058

611

806

830

1,021

- 40 -

Daiwa Office Investment Corporation (8976) Financial Report for the 17th Fiscal Period

5.2.4. Summary of Estimated Price at End of Period (As of May 31, 2014)
Summary of Appraisal Report
Estimated price
DCF method
at end of period Direct capitalization method
Property nameDiscount Terminal(million yen)Price
Cap rate
Price
rate
cap rate(Note 1)(million yen)(%)(million yen)(%)(%)
15,40015,7004.2
15,000
4.0
4.4
Daiwa Ginza
3,150
3,200
4.1
3,100
3.9
4.3
Daiwa Ginza Annex
7,180
7,360
4.8
7,100
4.6
5.0
Daiwa Shibaura
4,100
4,180
4.5
4,020
4.3
4.7
Daiwa Minami-Aoyama
3,160
3,200
5.0
3,110
4.8
5.2
Daiwa Sarugakucho
2,860
2,910
4.5
2,840
4.3
4.7
Daiwa A Hamamatsucho (Note 2)
2,100
2,110
4.4
2,080
4.2
4.6
Daiwa Jingumae
2,640
2,700
4.4
2,610
4.2
4.6
Daiwa Shibadaimon
2,500
2,520
4.7
2,490
4.5
4.9
Daiwa Misakicho
2,380
2,430
4.7
2,320
4.5
4.9
Daiwa Shimbashi 510
1,470
1,510
4.9
1,450
4.9
5.1
Daiwa Tsukijiekimae (Note 3)
1,440
1,450
4.8
1,440
4.8
5.0
Daiwa Tsukiji
2,480
2,490
4.8
2,470
4.5
5.0
Daiwa Tsukiji 616
8,140
8,180
4.9
8,120
4.6
5.1
Daiwa Tsukishima
2,490
2,520
4.7
2,450
4.5
4.9
Daiwa Nihonbashi Horidomecho
1,700
1,730
4.6
1,660
4.4
4.8
Daiwa Azabudai
7,100
7,260
4.6
6,930
4.3
4.8
Daiwa Nihombashi Honcho
4,500
4,590
4.4
4,400
4.1
4.6
Daiwa Ginza 1-chome
3,110
3,160
4.6
3,050
4.4
4.8
Daiwa Kyobashi
2,660
2,800
4.3
2,600
4.1
4.5
Daiwa Kojimachi 4-chome
13,00013,2004.4
12,700
4.2
4.6
Daiwa Onarimon
113,000
139,000
3.8
129,000
3.6
4.0
Shinjuku Maynds Tower (Note 4)
4,300
4,400
4.3
4,200
4.1
4.5
SHIBUYA EDGE
1,980
2,010
4.9
1,950
4.7
5.1
Daiwa Kodenmacho
2,900
3,070
4.8
2,830
4.8
5.0
Daiwa Jimbocho
4,800
4,940
4.6
4,740
4.4
4.8
Daiwa Nishi-Shimbashi
2,960
3,170
4.6
2,890
4.6
4.8
Daiwa Kudan
6,610
6,710
4.2
6,560
4.0
4.4
Daiwa Kayabacho
3,860
3,960
4.2
3,810
4.0
4.4
Daiwa Jimbocho 3-chome
28,10028,5004.1
27,7003.8
4.3
E SPACE TOWER
1,890
1,920
4.8
1,870
4.6
5.0
Daiwa Nihonbashi Hongokucho
10,40010,600
4.1
10,300
3.9
4.3
shinyon curumu
4,750
4,910
4.3
4,680
4.1
4.5
Daiwa Shibuya Dougenzaka
10,70010,900
4.1
10,600
3.9
4.3
Akasaka Business Place
7,450
7,490
4.2
7,400
3.9
4.3
Daiwa Shibuya Miyamasuzaka
3,570
3,610
5.1
3,550
4.9
5.3
Daiwa Kinshicho
3,240
3,320
5.0
3,200
4.8
5.2
Daiwa Higashi-Ikebukuro
3,240
3,290
5.6
3,180
5.4
5.8
Benex S-3
5,890
6,010
4.9
5,760
4.7
5.1
Daiwa Shinagawa North
2,030
2,050
4.6
2,020
4.4
4.8
Daiwa Osaki 3-chome
2,120
2,120
5.4
2,120
5.2
5.6
Daiwa Kamiooka
15,70016,0004.6
15,6004.4
4.8
Integral Tower- 41 -

Daiwa Office Investment Corporation (8976) Financial Report for the 17th Fiscal Period

Property nameSummary of Appraisal Report
Estimated price
DCF method
at end of period Direct capitalization method
Discount Terminal(million yen)Price
Cap rate
Price
rate
cap rate(Note 1)(million yen)(%)(million yen)
(%)
(%)

2,770
2,810
5.4
2,720
5.2
5.6
Daiwa Minami-Senba
6,410
6,580
5.0
6,340
5.0
5.2
Daiwa Meieki
342,230
372,570
354,960
Total(Note 1) “Estimated price at end of period” is the price as of May 31, 2014 stated in appraisal reports prepared byreal estate appraisers of Tanizawa Sogo Appraisal Co., Ltd., Daiwa Real Estate Appraisal Co., Ltd., Morii
Appraisal & Investment Consulting, Inc. and Japan Real Estate Institute in accordance with the articles ofincorporation of the Investment Corporation and the rules of The Investment Trusts Association, Japan.
(Note 2) For Daiwa A Hamamatsucho, the prices are those pertaining to the Investment Corporation’s ownershipinterest.
(Note 3) Discount rate for Daiwa Tsukijiekimae is the figure after the 5th fiscal year. (4.7% in and before the 2nd
fiscal year, 4.8% in 3rd and 4th fiscal years.)(Note 4) For Shinjuku Maynds Tower, the estimated price at end of period is the price pertaining to the Investment
Corporation’s ownership interest, and the price indicated by the direct capitalization method and priceindicated by the DCF method are the prices pertaining to the entire Property.

- 42 -

Daiwa Office Investment Corporation (8976) Financial Report for the 17th Fiscal Period
5.2.5. Status of Income (Loss), etc. of Individual Properties
The following table lists the status of income (loss), etc. of each property for the 17th Fiscal Period (fromDecember 1, 2013 to May 31, 2014). Income (loss) information is presented in accordance with “3. Financial
Statements; 3.7. Notes to Significant Accounting Policies” outlined earlier.
RegionFive Central Wards of Tokyo
Daiwa
Ginza Annex

Daiwa
Shibaura

Daiwa
MinamiAoyama

Daiwa
Sarugakucho(Note 4)

Property name

Daiwa
Ginza

Acquisition date

Oct. 2005

Oct. 2005

Oct. 2005

Oct. 2005

Oct. 2005

Acquisition price (million yen)

14,100

3,050

8,265

4,550

3,190

Investment ratio (%)
Price
Carrying
amount (million yen)
information
Estimated price at end of period(million yen)
Number of tenants (Note 1)

3.9

0.8

2.3

1.2

0.9

13,486

2,871

8,074

4,458

3,245

15,400

3,150

7,180

4,100

3,160

27

7

53

6

1

Leasable floor area (m2)8,175.26

2,032.99

9,619.63

2,715.53

3,657.43

Leased floor area (m2)

7,573.41

2,032.99

9,497.18

2,715.53

3,657.43

End of May 2012

86.9

100.0

98.3

100.0

100.0

End of Nov. 2012

94.3

100.0

98.8

100.0

100.0

End of May 2013

96.4

100.0

87.4

94.1

100.0

End of Nov. 2013

86.9

100.0

90.2

94.1

100.0

End of May 2014

92.6

100.0

98.7

100.0

100.0

182

182

182

182

182

304,356

92,349223,181

120,056－

294,524

92,349221,486

120,056

－

9,831

－

1,695

－

－

176,678

39,314

100,684

40,222－30,002

5,148

26,426

7,064－

Utilities expenses

28,2896,739

20,465

8,464－

Taxes and dues

27,616

9,096

19,207

11,691

－

441

103

409

148

－

Repair expenses

8,102

333

9,164

924

－

Depreciation (C)70,384

17,892

24,992

11,930

－

20

－

－

Occupancy rate (%)
Leasing
information

Number of days of asset management
Total property leasing revenue (A)(thousand yen)
Rent revenue – real estate
Other lease business revenue
Total property leasing expenses (B)(thousand yen)
Consignment expenses
Income(loss)
information

Non-life insurance expenses

Other lease business expenses
Operating income (loss) from property
leasing (D) [(A) – (B)] (thousand yen)
NOI (E) [(D) + (C)] (thousand yen)

11,841－

127,678

53,034122,496

79,834－

198,063

70,927

147,488

91,76486,519

Capital expenditures (F) (thousand yen)

6,461

2,664

18,394

1,201

100

191,602

68,263129,094

90,562

86,419

58.05

42.57

45.11

33.50

－

55,06318,02137,881

22,975

13,273

128,190

34,770218,640

111,190

162,170

NCF [(E) – (F)] (thousand yen)
Expense rate (%) [(B) ÷ (A)]Annualamount of fixed property tax, etc.
Referenceforfiscal2014 (thousand yen)
information
Estimated long-term repair expenses(thousand yen) (Note 2)- 43 -

Daiwa Office Investment Corporation (8976) Financial Report for the 17th Fiscal Period

RegionFive Central Wards of Tokyo
Daiwa
Jingumae

Daiwa
Shibadaimon

Daiwa
Misakicho(Note 4)

Property nameDaiwa A
Hamamatsucho

Acquisition date

Oct. 2005

Oct. 2005

Oct. 2005

Oct. 2005

Oct. 2005

Acquisition price (million yen)

2,865

2,800

2,578

2,346

2,080

Investment ratio (%)
Price
Carrying
amount (million yen)
information
Estimated price at end of period(million yen)
Number of tenants (Note 1)

0.8

0.8

0.7

0.6

0.6

2,798

2,712

2,407

2,228

2,118

2,860

2,100

2,640

2,500

2,380

Daiwa
Shimbashi 510

12

4

7

1

6

Leasable floor area (m2)

3,663.38

2,198.61

2,386.02

2,137.53

2,676.14

Leased floor area (m2)

3,663.38

2,198.61

2,386.02

2,137.53

2,660.92

End of May 2012

100.0

100.0

78.0

100.0

99.7

End of Nov. 2012

100.0

100.0

100.0

100.0

99.7

End of May 2013

100.0

100.0

100.0

100.0

99.7

End of Nov. 2013

100.0

100.0

100.0

100.0

99.4

End of May 2014

100.0

100.0

100.0

100.0

99.4

182

182

182

182

182

134,479

69,07576,623－82,815

134,479

69,07576,623－82,815

－

－

－

－

－

73,48824,75530,397－

24,595

10,884

4,088

6,747

－

5,063

Utilities expenses

10,549

5,619

7,413

－

6,732

Taxes and dues

8,640

6,302

6,249

－

5,575

189

82

114

－

113

Repair expenses

1,186

192

297

－

339

Depreciation (C)Occupancy rate (%)
Leasing
information

Number of days of asset management
Total property leasing revenue (A)(thousand yen)
Rent revenue – real estate
Other lease business revenue
Total property leasing expenses (B)(thousand yen)
Consignment expenses
Income(loss)
information

Non-life insurance expenses

12,637

8,463

9,575

－

6,772

Other lease business expenses
Operating income (loss) from property
leasing (D) [(A) – (B)] (thousand yen)
NOI (E) [(D) + (C)] (thousand yen)

29,4007－－－60,991

44,32046,225－58,22073,62852,78355,801

62,79964,992

Capital expenditures (F) (thousand yen)

12,824－

2,974

48,093

1,355

NCF [(E) – (F)] (thousand yen)

60,80452,78352,827

14,70663,637
29.70

Expense rate (%) [(B) ÷ (A)]Annualamount of fixed property tax, etc.
Referenceforfiscal2014 (thousand yen)
information
Estimated long-term repair expenses(thousand yen) (Note 2)

54.65

35.84

39.67

－

17,073

12,60812,14810,306

11,049115,840

84,98098,390129,500

117,390- 44 -

Daiwa Office Investment Corporation (8976) Financial Report for the 17th Fiscal Period

RegionFive Central Wards of Tokyo
Daiwa
Tsukiji 616

Daiwa
Tsukishima

Daiwa
Nihonbashi
Horidomecho

Jan. 2006

Mar. 2006

Mar. 2006

May 2006

1,560

1,240

2,440

7,840

2,520

0.4

0.3

0.7

2.2

0.7

1,393

1,189

2,249

6,992

2,477

1,470

1,440

2,480

8,140

2,490

Property name

Daiwa
Tsukijiekimae

Acquisition dateJan. 2006

Acquisition price (million yen)
Investment ratio (%)
Price
Carrying
amount (million yen)
information
Estimated price at end of period(million yen)
Number of tenants (Note 1)

Daiwa
Tsukiji

6

5

9

3

9

Leasable floor area (m2)2,659.59

1,487.82

2,931.93

8,426.85

2,850.81

Leased floor area (m2)2,659.59

1,487.82

2,931.93

8,426.85

2,850.81

End of May 2012

0.0

100.0

89.7

100.0

100.0

End of Nov. 2012

Occupancy rate (%)
Leasing
information

0.0

100.0

100.0

100.0

100.0

End of May 2013

10.3

100.0

100.0

100.0

100.0

End of Nov. 2013

100.0

100.0

100.0

100.0

100.0

End of May 2014

100.0

100.0

100.0

100.0

100.0

182

182

182

182

182

26,12849,65883,656281,196

81,132

26,12849,65883,656281,196

79,488

－

－

－

－

1,644

30,26518,85440,288102,127

31,321

4,205

3,766

4,836

12,3695,285

Utilities expenses

6,634

3,463

7,262

27,146

6,440

Taxes and dues

Number of days of asset management
Total property leasing revenue (A)(thousand yen)
Rent revenue – real estate
Other lease business revenue
Total property leasing expenses (B)(thousand yen)
Consignment expenses
Income(loss)
information

5,019

3,824

6,764

13,213

6,556

Non-life insurance expenses

95

57

125

308

129

Repair expenses

61

582

1,046

306

1,080

Depreciation (C)14,233

7,160

20,25348,783

11,829Other lease business expenses
Operating income (loss) from property
leasing (D) [(A) – (B)] (thousand yen)
NOI (E) [(D) + (C)] (thousand yen)

15

－

－

－

－

(4,137)30,80443,367179,069

49,81010,09637,96563,620227,852

61,639

Capital expenditures (F) (thousand yen)548－

12,840

10,48518,281

9,548

37,96550,780217,366

43,358

－

37.97

48.16

36.32

38.61

10,024

7,587

13,19926,382

12,958

114,750

49,77073,410331,450

139,000

NCF [(E) – (F)] (thousand yen)
Expense rate (%) [(B) ÷ (A)]Annualamount of fixed property tax, etc.
Referenceforfiscal2014 (thousand yen)
information
Estimated long-term repair expenses(thousand yen) (Note 2)- 45 -

Daiwa Office Investment Corporation (8976) Financial Report for the 17th Fiscal Period

RegionFive Central Wards of Tokyo
Daiwa
Shibuya SS(Note 5)

Daiwa
Nihombashi
HonchoDaiwa
Ginza 1-chome

May 2006

May 2006

July 2006

July 2006

July 2006

Acquisition price (million yen)

1,600

－

7,420

4,620

3,460

Investment ratio (%)
Price
Carrying
amount (million yen)
information
Estimated price at end of period(million yen)
Number of tenants (Note 1)

0.4

－

2.0

1.3

1.0

1,549

－

7,071

4,491

3,330

1,700

－

7,100

4,500

3,110

Property nameAcquisition date

Daiwa
Azabudai

Daiwa
Kyobashi

10

－

12

13

9

Leasable floor area (m2)

1,697.38－

7,418.61

3,758.43

3,265.83

Leased floor area (m2)

1,697.38－

6,477.22

3,731.66

3,265.83

End of May 2012

100.0

87.0

85.2

96.9

88.6

End of Nov. 2012

80.2

100.0

97.6

98.8

100.0

End of May 2013

100.0

100.0

97.6

89.0

99.5

End of Nov. 2013

100.0

100.0

97.3

98.3

100.0

End of May 2014

100.0

－

87.3

99.2

100.0

182

180

182

182

182

49,872

114,447

195,041

120,770

96,25548,491

114,447

191,760

120,655

96,255

1,380

－

3,281

114

－

21,38854,38066,88844,01341,558

3,789

6,098

8,564

6,792

6,376

Utilities expenses

4,040

10,011

15,188

8,364

9,582

Taxes and dues

Occupancy rate (%)
Leasing
information

Number of days of asset management
Total property leasing revenue (A)(thousand yen)
Rent revenue – real estate
Other lease business revenue
Total property leasing expenses (B)(thousand yen)
Consignment expenses
Income(loss)
information

4,812

16,835

11,840

7,784

6,964

Non-life insurance expenses

83

244

290

141

135

Repair expenses

553

4,861

1,353

691

278

Depreciation (C)8,109

16,33029,65020,164

18,221Other lease business expenses
Operating income (loss) from property
leasing (D) [(A) – (B)] (thousand yen)
NOI (E) [(D) + (C)] (thousand yen)

－

－

－

74

－

28,48360,066

128,153

76,75754,69636,59376,397

157,803

96,922

72,918

Capital expenditures (F) (thousand yen)

9,075

－

－

1,599

4,945

NCF [(E) – (F)] (thousand yen)

27,51776,397

157,803

95,323

67,972

42.89

47.52

34.29

36.44

43.18

9,599

－

22,906

15,581

13,92767,880－116,900

191,730

61,450

Expense rate (%) [(B) ÷ (A)]Annualamount of fixed property tax, etc.
Referenceforfiscal2014 (thousand yen)
information
Estimated long-term repair expenses(thousand yen) (Note 2)- 46 -

Daiwa Office Investment Corporation (8976) Financial Report for the 17th Fiscal Period

RegionFive Central Wards of Tokyo
Daiwa
Kojimachi
4-chome

Property name

Daiwa
OnarimonShinjuku
Maynds Tower

SHIBUYAEDGE

Daiwa
Kodenmacho

Acquisition date

Oct. 2006

Dec. 2006

July 2007 andNov. 2007

July 2007

Aug. 2007

Acquisition price (million yen)

2,910

13,860133,800

5,900

2,460

Investment ratio (%)

0.8

3.8

36.8

1.6

0.7

2,879

13,543

130,441

5,762

2,419

2,660

13,000113,000

4,300

1,980

7

9

37

5

8

Leasable floor area (m )2,690.90

11,615.37

45,543.98

2,480.65

2,379.31

Leased floor area (m2)2,690.90

11,615.37

43,166.51

2,480.65

2,379.31

End of May 2012

88.4

100.0

99.9

100.0

100.0

End of Nov. 2012

100.0

100.0

98.3

100.0

100.0

End of May 2013

96.0

100.0

94.9

100.0

100.0

End of Nov. 2013

100.0

100.0

95.7

100.0

100.0

End of May 2014

100.0

100.0

94.7

100.0

100.0

182

182

182

182

182

86,851

352,856

2,302,813

103,330

63,10586,851

352,856

2,297,413

103,330

63,105

－

－

5,400

－

－

43,474

109,705

1,250,607

37,47624,421Price
information Carrying amount (million yen)
Estimated price at end of period(million yen)
Number of tenants (Note 1)
2

Occupancy rate (%)
Leasing
information

Number of days of asset management
Total property leasing revenue (A)(thousand yen)
Rent revenue – real estate
Other lease business revenue
Total property leasing expenses (B)(thousand yen)
Consignment expenses
Income(loss)
information

6,864

16,963

156,978

5,793

5,915

Utilities expenses

7,633

27,379295,955

6,904

5,034

Taxes and dues

13,47533,659253,292

7,272

3,595

132

419

3,711

104

83

Non-life insurance expenses
Repair expenses

4,128

1,511

165,822832

292

Depreciation (C)11,23929,772371,206

16,569

8,677

－

－

3,641

－

822

43,376

243,150

1,052,206

65,85338,68454,615272,922

1,423,412

82,42247,362Other lease business expenses
Operating income (loss) from property
leasing (D) [(A) – (B)] (thousand yen)
NOI (E) [(D) + (C)] (thousand yen)
Capital expenditures (F) (thousand yen)

9,071

2,172

185,978

1,354

3,557

NCF [(E) – (F)] (thousand yen)

45,544

270,749

1,237,434

81,06843,804

50.06

31.09

54.31

36.27

38.70

29,161

67,244

493,583

14,501

7,218

68,810236,800

2,502,610

48,29070,970

Expense rate (%) [(B) ÷ (A)]Annualamount of fixed property tax, etc.
Reference
information for fiscal 2014 (thousand yen)
Estimated long-term repair expenses(thousand yen) (Note 2)- 47 -

Daiwa Office Investment Corporation (8976) Financial Report for the 17th Fiscal Period

RegionFive Central Wards of Tokyo
Daiwa
NishiShimbashi

Daiwa
Kayabacho(Note 4)

Daiwa
Jimbocho
3-chome

Property name

Daiwa
Jimbocho

Acquisition dateMar. 2010

Aug. 2010

Sept. 2010

Mar. 2011

Mar. 2011

Acquisition price (million yen)

4,150

5,000

4,000

5,600

3,550

Investment ratio (%)
Price
Carrying
amount (million yen)
information
Estimated price at end of period(million yen)
Number of tenants (Note 1)

1.1

1.4

1.1

1.5

1.0

4,085

4,964

3,897

5,479

3,528

2,900

4,800

2,960

6,610

3,860

Daiwa
Kudan

7

12

6

1

7

Leasable floor area (m2)

3,164.26

4,815.84

2,882.61

5,899.11

2,889.34

Leased floor area (m2)

3,164.26

4,815.84

2,882.61

5,899.11

2,545.95

End of May 2012

20.6

79.6

88.0

100.0

100.0

End of Nov. 2012

86.7

80.7

100.0

100.0

100.0

End of May 2013

100.0

100.0

100.0

100.0

100.0

End of Nov. 2013

100.0

100.0

100.0

100.0

100.0

End of May 2014

100.0

100.0

100.0

100.0

88.1

182

182

182

182

182

92,921

158,769

97,802－

98,18692,921

151,659

92,083－98,186

－

7,109

5,719

－

－

48,70882,637

48,608－47,090

5,932

18,180

7,237－

10,782

Utilities expenses

9,150

12,331

7,920

－

7,112

Taxes and dues

Occupancy rate (%)
Leasing
information

Number of days of asset management
Total property leasing revenue (A)(thousand yen)
Rent revenue – real estate
Other lease business revenue
Total property leasing expenses (B)(thousand yen)
Consignment expenses
Income(loss)
information

10,60015,649

8,464

－

9,352

Non-life insurance expenses

142

245

120

－

127

Repair expenses

864

1,292

665

－

－

Depreciation (C)21,75634,93624,199－19,715

Other lease business expenses
Operating income (loss) from property
leasing (D) [(A) – (B)] (thousand yen)
NOI (E) [(D) + (C)] (thousand yen)

261

3

－

－

－

44,21376,13149,194－51,09565,970111,067

73,393

148,128

70,811

Capital expenditures (F) (thousand yen)

3,590

2,064

7,500

－

512

NCF [(E) – (F)] (thousand yen)

62,380109,00265,893

148,128

70,298
47.96

Expense rate (%) [(B) ÷ (A)]Annualamount of fixed property tax, etc.
Referenceforfiscal2014 (thousand yen)
information
Estimated long-term repair expenses(thousand yen) (Note 2) (Note 3)

52.42

52.05

49.70

－

20,93030,91816,86025,015

18,610126,090

187,140

141,450

38,44026,390- 48 -

Daiwa Office Investment Corporation (8976) Financial Report for the 17th Fiscal Period

RegionProperty nameFive Central Wards of Tokyo
Daiwa
Nihonbashi
E-SPACE
Hongokucho
TOWER
Tosei

shinyoncurumuDaiwa Shibuya
Akasaka
Dougenzaka Business Place

Acquisition dateJuly 2011

May 2012

Dec. 2012 andApr. 2013

July 2013

Aug. 2013

Acquisition price (million yen)

24,000

1,721

9,650

4,500

9,200

6.6

0.5

2.7

1.2

2.5

23,864

1,693

9,941

4,522

9,280

28,1001,890

10,4004,750

10,700Investment ratio (%)

Price
information Carrying amount (million yen)
Estimated price at end of period(million yen)
Number of tenants (Note 1)

6

6

18

5

15

Leasable floor area (m2)

13,960.87

2,143.08

6,751.31

4,144.90

8,794.51

Leased floor area (m2)

12,448.65

2,143.08

6,505.00

4,144.90

8,794.51

End of May 2012

100.0

100.0

－

－

－

End of Nov. 2012

100.0

100.0

－

－

－
－

Occupancy rate (%)
Leasing
information

End of May 2013

100.0

100.0

55.9

－

End of Nov. 2013

100.0

100.0

67.5

100.0

95.6

End of May 2014

89.1

100.0

96.3

100.0

100.0

182

182

182

182

182

683,134

61,128

148,764

145,915

324,550

683,134

61,128

148,764

145,915

324,550

－

－

－

－

－

232,226

26,049108,50245,384

99,97555,401

4,272

37,124

11,76027,257

Utilities expenses

51,351

3,715

18,026

13,83946,373

Taxes and dues

56,4994,434

17,800

22

57

671

78

309

214

427

Repair expenses

3,607

389

－

1,671

3,624

Depreciation (C)63,933

Number of days of asset management
Total property leasing revenue (A)(thousand yen)
Rent revenue – real estate
Other lease business revenue
Total property leasing expenses (B)(thousand yen)
Consignment expenses
Income(loss)
information

Non-life insurance expenses

13,16035,242

17,87522,235

Other lease business expenses
Operating income (loss) from property
leasing (D) [(A) – (B)] (thousand yen)
NOI (E) [(D) + (C)] (thousand yen)

761

－

－

－

－

450,908

35,07840,261

100,531

224,574

514,841

48,23875,503

118,406

246,809

Capital expenditures (F) (thousand yen)

4,541

－

7,059

1,150

12,014510,300

48,23868,444

117,256

234,795

33.99

42.62

72.94

31.10

30.80

112,633

8,825

66,706

27,071

65,420317,590

22,401

65,855230,176

430,612

NCF [(E) – (F)] (thousand yen)
Expense rate (%) [(B) ÷ (A)]Annualamount of fixed property tax, etc.
Reference
information for fiscal 2014 (thousand yen)
Estimated long-term repair expenses(thousand yen) (Note 2)- 49 -

Daiwa Office Investment Corporation (8976) Financial Report for the 17th Fiscal Period

RegionFive Central
Wards ofTokyo

Greater Tokyo

Property nameDaiwa Shibuya
Miyamasuzaka

Acquisition date

Daiwa
Kinshicho

Daiwa
Higashi-IkebukuroBennex S-3

Daiwa
ShinagawaNorth

Sept. 2013

Oct. 2005

Oct. 2005

May 2006

July 2007

Acquisition price (million yen)

7,000

3,653

2,958

4,950

7,710

Investment ratio (%)

1.9

1.0

0.8

1.4

2.1

7,192

3,373

2,786

4,311

7,361

7,450

3,570

3,240

3,240

5,890

Price
information Carrying amount (million yen)
Estimated price at end of period(million yen)
Number of tenants (Note 1)

9

6

7

24

13

Leasable floor area (m2)

6,327.95

5,347.27

4,461.48

7,470.18

6,549.98

Leased floor area (m2)

6,327.95

5,347.27

4,115.48

7,338.82

6,549.98

End of May 2012

－

100.0

90.1

96.6

100.0

End of Nov. 2012

－

100.0

100.0

88.0

100.0

End of May 2013

－

100.0

100.0

98.2

100.0

End of Nov. 2013

100.0

100.0

100.0

93.6

100.0

End of May 2014

100.0

100.0

92.2

98.2

100.0

182

182

182

182

182

216,489

135,365

83,822

159,547

191,800

216,489

132,365

78,712

159,547

188,433

－

3,000

5,110

－

3,366

65,161

71,53569,735

95,81987,70523,976

15,42915,473

17,792

15,97819,03913,02011,276

21,22817,19020

11,9708,770

15,242

18,626

Occupancy rate (%)
Leasing
information

Number of days of asset management
Total property leasing revenue (A)(thousand yen)
Rent revenue – real estate
Other lease business revenue
Total property leasing expenses (B)(thousand yen)
Consignment expenses
Utilities expenses
Income(loss)
information

Taxes and dues
Non-life insurance expenses

300

251

242

375

360

Repair expenses

1,843

1,239

11,357

2,266

2,865

Depreciation (C)19,94329,622

22,61538,91532,685

Other lease business expenses
Operating income (loss) from property
leasing (D) [(A) – (B)] (thousand yen)
NOI (E) [(D) + (C)] (thousand yen)

36

－

－

－

－

151,328

63,83014,08763,727104,095

171,272

93,45236,702

102,642

136,780

Capital expenditures (F) (thousand yen)

669

6,396

35,406

5,864

4,536

170,603

87,056

1,296

96,778132,243

30.10

52.85

83.19

60.06

45.73

40,49923,594

17,54630,53735,975416,816

285,600

141,210

402,880

191,640

NCF [(E) – (F)] (thousand yen)
Expense rate (%) [(B) ÷ (A)]Annual amount of fixed property tax, etc.
Reference
information for fiscal 2014 (thousand yen)
Estimated long-term repair expenses(thousand yen) (Note 2)- 50 -

Daiwa Office Investment Corporation (8976) Financial Report for the 17th Fiscal Period

RegionGreater Tokyo

Major Regional Cities

Property nameDaiwa Osaki
3-chomeDaiwa
Kamiooka

Integral Tower

Acquisition date

Sept. 2012

Mar. 2013

May 2014

Aug. 2007

Feb. 2013

Acquisition price (million yen)

1,650

2,000

15,220

4,810

5,300

Investment ratio (%)
Price
Carrying
amount (million yen)
information
Estimated price at end of period(million yen)
Number of tenants (Note 1)

0.5

0.5

4.2

1.3

1.5

1,685

2,040

15,380

4,748

5,453

2,030

2,120

15,700

2,770

6,410

Daiwa
Daiwa Meieki
Minami-Senba

4

7

10

6

23

Leasable floor area (m2)

1,786.58

2,630.30

17,710.63

5,719.54

7,461.90

Leased floor area (m2)

1,579.64

2,248.34

17,140.81

4,333.61

7,348.48

End of May 2012

－

－

－

100.0

－

End of Nov. 2012

100.0

－

－

92.7

－

End of May 2013

100.0

100.0

－

100.0

85.4

End of Nov. 2013

100.0

92.2

－

100.0

81.3

End of May 2014

88.4

85.4

96.7

75.7

98.4

182

182

3

182

182

64,35789,7287,110

142,378

207,20264,35776,015

7,061

111,035

207,202－13,71248

31,342－

23,31439,427

15,977

90,121

82,826

3,792

6,493

767

16,68027,556

Utilities expenses

4,010

5,886

－

9,891

14,471

Taxes and dues

Occupancy rate (%)
Leasing
information

Number of days of asset management
Total property leasing revenue (A)(thousand yen)
Rent revenue – real estate
Other lease business revenue
Total property leasing expenses (B)(thousand yen)
Consignment expenses
Income(loss)
information

3,945

0

8

10,6034

Non-life insurance expenses

70

121

14

242

388

Repair expenses

486

9,217

－

20,934

5,513

Depreciation (C)11,00917,70915,15531,76934,892Other lease business expenses
Operating income (loss) from property
leasing (D) [(A) – (B)] (thousand yen)
NOI (E) [(D) + (C)] (thousand yen)

－

－

30

－

－

41,04250,300(8,866)52,256124,375

52,05168,0096,288

84,025

159,267

Capital expenditures (F) (thousand yen)

1,039

651

－

2,949

4,051

NCF [(E) – (F)] (thousand yen)

51,012

67,357

6,288

81,076

155,215

36.23

43.94

－

63.30

39.97

7,878

12,884－

21,13339,68737,912

24,782

834,324

107,090

170,803

Expense rate (%) [(B) ÷ (A)]
Reference Annual amount of fixed property tax, etc.
information for fiscal 2014 (thousand yen)
Estimated long-term repair expenses(thousand yen) (Note 2)(Note 1) Number of tenants is the number of end-tenants. When there is a tenant occupying multiple buildings, theconcerned tenant is counted and stated for each individual building.
(Note 2) Estimated long-term repair expenses are the total amount of repair expenses and renewal expenses estimatedto arise over the 12-year period from the 1st year to the 12th year as stated in the building investigation
diagnosis report.

- 51 -

Daiwa Office Investment Corporation (8976) Financial Report for the 17th Fiscal Period(Note 3) Estimated long-term repair expenses of “Daiwa Kayabacho Building” are the total amount of repair
expenses and renewal expenses estimated to arise over the 10-year period from the 1st year to the 10th year
as stated in the building investigation diagnosis report.
(Note 4) Not disclosed for such reasons as consent was not obtained from major tenants to disclose the rent revenue,
etc. for the property.
(Note 5) “Daiwa Shibuya SS Building” was divested on May 30, 2014.

- 52 -