18th

Fiscal Period Business Report(Statement of Financial Performance)

June 1, 2014 – November 30, 2014

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

I. Overview of Daiwa Office Investment Corporation
To Our Investors
We would like to express our deep gratitude to all our unitholders for your support of Daiwa Office Investment Corporation (DOI).
In the 18th Fiscal Period, DOI posted operating revenues of 9,763 million yen and operating income of 4,438 million yen. Our
distribution per unit for the 18th Fiscal Period is 8,256 yen, an increase by 635 yen from the 17th Fiscal Period.
See page 4 for financial and management highlights
During the 18th Fiscal Period DOI acquired Azabu Green Terrace on July 4, 2014 for 14,000 million yen and Kitahama Grand Buildingon August 1, 2014 for 9,481 million yen through funds obtained in the July 2014 capital increase. DOI will continue to selectively
acquire office properties centering on the five central wards of Tokyo while considering from time to time replacements through thesale of properties in an effort to further improve the stability and profitability of its portfolio.
See page 8 for details of external growth
The overall portfolio occupancy rate was 97.2% with contribution from Daiwa Minami-Semba whose occupancy increased
significantly from 75.7% at the end of the previous fiscal period to 95.7% as well as from the full occupancy of 7 properties including
E Space Tower, Daiwa Jimbocho 3-chome, Daiwa Osaki 3-chome and Daiwa Higashi-Ikebukuro.
See page 12 for details of internal growthIn financial matters DOI promoted the lengthening of maturities, increase of rate of loans
with fixed interest rates, diversification of repayment dates and decrease of LTV.
DOI will continue striving to further strengthen financial structure while working to reduce
future refinancing risks.
See page 14 for details of financial condition
DOI will continue to increase the competitiveness of its properties and aim toachieve its medium- to long-term goal of an asset size of 500 billion yen
through the utilization of investment capacity from capital increase, etc.
while increasing long-term EPS (net income after deducting gain on sales ofproperties).
We wish for the continued success of our unitholders and ask for yourcontinued support of DOI.

Nobuaki Omura Executive Director of Daiwa Office Investment Corporation
Contents

I. Overview of Daiwa Office Investment Corporation
To Our Investors……………………………………………… 2
Characteristics and Strategies of
Daiwa Office Investment Corporation ………………………… 3
Financial and Management Highlights………………………… 4
Overview of Portfolio (portfolio list)…………………………… 5

II. Asset Management Report…………………………… 16
III. Balance Sheets… ……………………………………… 22
IV. Statements of Income………………………………… 24
V. Statements of Changes in Unitholders’ Equity ……… 25

Overview of Portfolio (portfolio distribution)…………………… 6

VI. Notes to Financial Statements……………………… 26

External Growth Measures…………………………………… 8VII. Independent Auditors’ Report……………………… 36

Internal Growth Measures… ………………………………… 12
Financial Conditions… ……………………………………… 14
Description of Asset Manager………………………………… 15

2

VIII. Statements of Cash Flows [Information Only]… …… 37
IX. Investor Information… ………………………………… 38

Characteristics and Strategies of Daiwa Office Investment Corporation

Characteristics of Daiwa Office Investment Corporation

Office Specialized
REIT

REIT Focused on the Five
Central Wards of Tokyo

Effective application of operational knowhow specialized in officebuildings

Places priority on owning office buildings in favorable locations forwhich there is high demand

Office buildings 100.0%

Major Regional Cities 5.1%
Greater Tokyo

Five Central
Wards of Tokyo

85.1%

9.8%

Based on acquisition price(Note) Please note that the percentages in the above graphs are as of November 30, 2014.

Growth Strategies

Activities for solid growth・Continue acquiringproperties

Achievement of a 500 billion yen asset size

・Leverage borrowing
capacity

Keep the medium-to-long term, upper-limit
LTV target range within 40%~50%(billion yen)
500

500.0

Proactive investment inselectively chosencompetitive properties

400

314.9

332.0

352.7

364.0

387.5

300

Establishment of stable revenue base・Property management
activities

Continuation of “Bonji-Tettei”
Thorough implementation of hands-on
approach
Further strengthen relations with tenants

・Maintain andimprove property
value

Capture tenant needs by reinforcing ties withproperty managers
Strategic renewals and lease-up activities

・Financial activities

Reduce refinancing risk by extending
borrowing periods and diversifying
repayment dates

Distribution per Unit
(Note) The forecasts on distribution are calculated based

200

100

0
Fiscal period Fiscal period Fiscal period
Fiscal period
ended
ended
ended
ended
November 2012 May 2013 November 2013 May 2014

Fiscal period ended November 2014
(18th Fiscal Period)on certain assumptions and may vary due tochanges in the status and other factors. Moreover,the forecasts set forth herein should not be

Fiscal period ending May 2015

construed as a guarantee of distribution amounts.

(19th Fiscal Period)

Dividend per unit in the 19th Fiscal Period assumes
that the amount whereby the reserved amount of
reduction entry (47 million yen) is deducted fromnet income will be distributed.

Fiscal period ending November 2015
(20th Fiscal Period)

Fiscal period
Medium-term
ended
goal
November 2014

8,256 yen
8,700 yen
9,000 yen(actual)(forecast)(forecast)

I. Overview of Daiwa Office Investment Corporation

3

Financial and Management Highlights
Steady increase of distributions even in a severe office market environment■ Operating Revenues■ Operating Income(million yen)
10,000(million yen)
5,000

9,763
7,615

7,566

4,000

8,587

8,432

7,500

4,438

3,000

3,308

3,146

5,000

3,677

3,760

16th Period

17th Period

2,000
2,500

1,000
0

0
14th Period

15th Period

16th Period

17th Period

18th Period

14th Period■ Net Income■ Asset Size(million yen)
4,000

(billion yen)
400

350

2,589

2,369

3,640

3,527

3,016

2,959
2,000

18th Period

3,875

3,641

3,000

15th Period

300

1,000

3,320

3,149

250

0

200
14th Period

15th Period

16th Period

17th Period

18th Period

14th Period

15th Period

16th Period

17th Period

18th Period■ Distribution Per Unit(yen)
10,000

Forecast from one year earlier

Forecast from six months earlier

8,000
6,000
4,000

3,180
3,280
3,671

2,843
3,176
3,240

4,850
4,850
5,107

3,600
4,100
4,464

Actual dividends

5,500
6,250
6,542

5,350
5,500
5,986

7,570
7,820
8,256

6,550
7,200
7,478

7,300
7,540
7,621

16th Period

17th Period

8,328
8,700

9,000

2,000
0
10th Period

11th Period

13th Period

14th Period

15th Period

18th Period

19th Period 20th Period

18th Period

17th Period

16th Period

15th Period

14th Period(November 2014)(May 2014)(November 2013)(May 2013)(November 2012)

Operating revenues (million yen)

9,763

8,587

8,432

7,615

7,566

Operating income (million yen)

4,438

3,760

3,677

3,308

3,146

Ordinary income (million yen)

3,642

3,005

2,955

2,590

2,364

Net income (million yen)

3,641

3,016

2,959

2,589

2,369

Total number of units issued (units)

441,000

395,798

395,798

395,798

395,798
508,132

Net assets per unit (yen)504,746

509,490

509,560

508,707

Distribution per unit (yen)

8,256

7,621

7,478

6,542

5,986

Total assets (million yen)

399,555

380,723

363,653

342,572

325,665

40.2

43.0

40.6

37.5

34.4

46

44

44

41

38

387.5

364.0

352.7

332.0

314.9

286,088.89

259,381.62

244,877.17

225,651.87

208,733.38

97.2

96.4

96.3

95.0

96.4

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

4

12th Period

Overview of Portfolio (portfolio list)
DOI has a portfolio comprised of one A Class building and 45 B Class buildings(as of November 30, 2014)
Property Name

Address

Acquisition
Appraisal
Execution
Rentable Structure andPrice
Value at End
Area (m2) No. of Floors Completion of Major
of Period(Note 2)
(Note 3)
Repairs mm yen Share (mm yen)(%)

Five Central Wards of Tokyo (Note 1)
Ginza, Chuo-ku, Tokyo
8,175.28 SRC B3/12F July 1963
Ginza, Chuo-ku, Tokyo
2,032.11 SRC B3/8F Aug. 1972
Shibaura, Minato-ku, Tokyo
9,619.67 SRC B1/12F Oct. 1987
Minami Aoyama, Minato-ku, Tokyo
2,715.53 S SRC B2/5F Sept. 1990
Sarugakucho, Chiyoda-ku, Tokyo
3,657.43
SRC 8F
June 1985
Hamamatsucho, Minato-ku, Tokyo
3,663.38 SRC B2/10F July 1993
Jingumae, Shibuya-ku, Tokyo
2,198.61 RC B1/4F
Dec. 1997
Shibadaimon, Minato-ku, Tokyo
2,386.48 SRC RC B1/7F Nov. 1996
Misakicho, Chiyoda-ku, Tokyo
2,137.53
S 8F
July 1996
Shinbashi, Minato-ku, Tokyo
2,676.52 SRC B1/8F
Apr. 1974
Tsukiji, Chuo-ku, Tokyo
2,659.59
SRC 10F
Jan. 1996
Tsukiji, Chuo-ku, Tokyo
1,487.82 SRC B1/7F
Jan. 1990
Tsukiji, Chuo-ku, Tokyo
2,888.17 SRC B1/9F Mar. 1994
Tsukishima, Chuo-ku, Tokyo
8,426.85
S 5F
July 1996
Nihombashi-Horidomecho, Chuo-ku, Tokyo
2,850.81 SRC B2/7F
Apr. 1993
Azabudai, Minato-ku, Tokyo
1,697.38 SRC B2/9F
Apr. 1984
Nihombashi-Honcho, Chuo-ku, Tokyo
7,418.61 SRC B1/10F Jan. 1964
Ginza, Chuo-ku, Tokyo
3,758.43 SRC B2/11F Jan. 1962
Hatchobori, Chuo-ku, Tokyo
3,265.83 SRC B1/8F
Oct. 1974
Kojimachi, Chiyoda-ku, Tokyo
2,690.90 SRC B2/9F
Oct. 1987
Shinbashi, Minato-ku, Tokyo
11,614.92
SRC 9F
Apr. 1973
Yoyogi, Shibuya-ku, Tokyo
45,543.98 S SRC B3/34F Sept. 1995
Udagawacho, Shibuya-ku, Tokyo
2,480.65 RC B1/9F
Aug. 2006
Nihombashi-Odenmacho, Chuo-ku, Tokyo
2,379.31
SRC 8F
Mar. 1985
Kanda-Jimbocho, Chiyoda-ku, Tokyo
3,164.26
S B1/8F
Mar. 1997
Nishi-Shimbashi, Minato-ku, Tokyo
4,815.84 SRC B1/10F July 1993
Kudan Minami, Chiyoda-ku, Tokyo
2,882.61
SRC 9F
Mar. 1987
Nihombashi-Kayabacho, Chuo-ku, Tokyo
5,899.11 S SRC B1/8F Apr. 2010
Kanda-Jimbocho, Chiyoda-ku, Tokyo
2,889.34
S 9F
Feb. 2010
Maruyamacho, Shibuya-ku, Tokyo
13,960.87 S SRC B1/15F Oct. 2002
Nihombashi Hongokucho, Chuo-ku, Tokyo
2,143.08
S 8F
May 2010
Shinjuku, Shinjuku-ku, Tokyo
6,751.31 S RC B2/11F Jan. 2012
Maruyamacho, Shibuya-ku, Tokyo
4,144.90 SRC B1/11F Mar. 1988
Akasaka, Minato-ku, Tokyo
8,794.51 SRC B2/7F Sept. 1990
Shibuya, Shibuya-ku, Tokyo
6,327.95 S B1/12F
Dec. 1988
Minami Azabu, Minato-ku, Tokyo
13,234.39 S RC B1/6F Sept. 2009
Subtotal
213,433.96
Greater Tokyo Area (Note 1)
Kameido, Koto-ku, Tokyo
5,347.27
S B1/5F
Jan. 1992
37 Daiwa Kinshicho
Higashi-Ikebukuro, Toshima-ku, Tokyo
4,461.47 SRC S B1/9F June 199338 Daiwa Higashi-Ikebukuro
Shin-Yokohama, Kohoku-ku, Yokohama City, Kanagawa 7,470.18 S SRC B1/12F Feb. 1994
39 Benex S-3
Kita-Shinagawa, Shinagawa-ku, Tokyo
6,549.98 SRC B1/11F July 1991
40 Daiwa Shinagawa North
Osaki, Shinagawa-ku, Tokyo
1,786.06 S RC B1/6F Sept. 200741 Daiwa Osaki 3-chome
Kamiooka Nishi, Konan-ku, Yokohama City, Kanagawa 2,630.30 S SRC B3/7F May 201142 Daiwa Kamiooka
Kamiogi, Suginami-ku, Tokyo
17,710.63 S SRC B2/18F June 1993
43 Integral Tower
Subtotal
45,955.89
Major Regional Cities (Note 1)
Minami-Senba, Chuo-ku, Osaka City, Osaka
5,719.52 SRC B1/8F Sept. 1986
44 Daiwa Minami-Senba
Meieki-Minami, Nakamura-ku, Nagoya City, Aichi 7,461.90
S 12F
Dec. 200745 Daiwa Meieki
Awaji-cho, Chuo-ku, Osaka City, Osaka
13,517.62 S SRC B1/16F Feb. 2008
46 Kitahama Grand Building
Subtotal
26,699.04
Total
286,088.89

1 Daiwa Ginza
2 Daiwa Ginza Annex
3 Daiwa Shibaura
4 Daiwa Minami-Aoyama
5 Daiwa Sarugakucho
6 Daiwa A Hamamatsucho
7 Daiwa Jingumae
8 Daiwa Shibadaimon
9 Daiwa Misakicho
10 Daiwa Shimbashi 510
11 Daiwa Tsukijiekimae
12 Daiwa Tsukiji
13 Daiwa Tsukiji 616
14 Daiwa Tsukishima
15 Daiwa Nihonbashi Horidomecho
16 Daiwa Azabudai
17 Daiwa Nihombashi Honcho
18 Daiwa Ginza 1-chome
19 Daiwa Kyobashi
20 Daiwa Kojimachi 4-chome
21 Daiwa Onarimon
22 Shinjuku Maynds Tower (Note 6)
23 SHIBUYA EDGE
24 Daiwa Kodenmacho
25 Daiwa Jimbocho
26 Daiwa Nishi-Shimbashi
27 Daiwa Kudan
28 Daiwa Kayabacho Building
29 Daiwa Jinbocho 3-chome
30 E SPACE TOWER
31 Daiwa Nihonbashi Hongokucho
32 shinyon curumu
33 Daiwa Shibuya Dougenzaka
34 Daiwa Akasaka
35 Daiwa Shibuya Miyamasuzaka
36 Azabu Green Terrace

2003
2003

2006

2006
2005
2005
2003

14,100 3.6
3,050 0.8
8,265 2.1
4,550 1.2
3,190 0.8
2,865 0.72,800 0.7
2,578 0.7
2,346 0.6
2,080 0.5
1,560 0.4
1,240 0.3
2,440 0.6
7,840 2.0
2,520 0.71,600 0.4
7,420 1.9
4,620 1.2
3,460 0.9
2,910 0.8
13,860 3.6
133,800 34.5
5,900 1.5
2,460 0.6
4,150 1.1
5,000 1.3
4,000 1.0
5,600 1.4
3,550 0.9
24,000 6.2
1,721 0.4
9,650 2.5
4,500 1.2
9,200 2.4
7,000 1.8
14,000 3.6
329,825 85.1
3,653
2,958
4,950
7,710
1,650
2,000
15,22038,141

0.9
0.8
1.3
2.0
0.4
0.5
3.9
9.8

4,810 1.2
5,300 1.4
9,481 2.4
19,591 5.1
387,557 100.0(Note 4)

Ownership TypeLand

Building

PML (%)(Note 5)

simple and15,600 Feeleasehold
Fee simple
3,200 Fee simple Fee simple
7,200 Fee simple Fee simple
4,170 Fee simple Fee simple
3,220 Fee simple Fee simple
2,870 Fee simple Compartmentalized
ownership
2,140 Fee simple Fee simple
2,690 Fee simple Fee simple
2,550 Fee simple Fee simple
2,430 Fee simple Fee simple
1,470 Fee simple Fee simple
1,390 Fee simple Fee simple
2,430 Fee simple Fee simple
8,260 Fee simple Fee simple
2,540 Fee simple Fee simple
1,720 Fee simple Fee simple
6,830 Fee simple Fee simple
4,170 Fee simple Fee simple
3,060 Fee simple Compartmentalized
ownership (100%)
2,760 Fee simple Compartmentalized
ownership (100%)
12,300 Fee simple Compartmentalized
ownership (100%)113,000 Co-ownership Co-ownership
4,400 Fee simple Fee simple
simple and Fee simple
2,030 Feeleasehold
3,010 Fee simple Fee simple
4,910 Fee simple Fee simple
3,090 Fee simple Compartmentalized
ownership (100%)
6,730 Fee simple Fee simple
3,950 Fee simple Fee simple
29,600 Fee simple Fee simple
1,920 Fee simple Fee simple
10,700 Right of site Compartmentalized
ownership (100%)
4,850 Fee simple Fee simple
10,800 Fee simple Fee simple
7,630 Fee simple Fee simple
15,300 Fee simple Fee simple
314,920

4.53
3.97
3.82
9.19
7.14
3.79
13.33
3.72
4.24
5.51
4.23
4.98
4.50
4.87
4.68
6.64
7.12
7.23
4.51
6.19
3.89
2.03
1.56
4.19
5.05
3.76
5.51
4.50
5.33
3.11
3.80
4.44
3.77
7.14
5.64
2.67

3,620
3,330
3,260
5,890
2,060
2,160
16,00036,320Fee simple
Fee simple
Fee simple
Fee simple
Fee simple
Fee simple
Fee simple

Fee simple
Fee simple
Fee simple
Fee simple
Fee simple
Fee simple
Fee simple

4.56
3.55
8.89
7.19
6.14
6.29
1.18

2,600 Fee simple
6,560 Fee simple
10,200 Fee simple
19,360370,600

Fee simple
Fee simple
Fee simple

5.25
10.31
3.48

(Note 1) The Five Central Wards of Tokyo are Chiyoda, Chuo, Minato, Shinjuku and Shibuya Wards (or ku).
The Greater Tokyo Area is Tokyo (excluding the Five Central Wards), and Kanagawa, Chiba and Saitama Prefectures.
Major Regional Cities are the Osaka area (Osaka, Kyoto and Hyogo prefectures), Nagoya area (Aichi, Mie and Gifu prefectures) and ordinance designated cities and core cities set forth in the Local Autonomy
Act.
(Note 2) The Rentable Area are indicated as of November 30, 2014 (end of 18th Fiscal Period).
(Note 3) Structure acronyms are S for steel, RC for reinforced concrete and SRC for steel-reinforced concrete.
(Note 4) The values entered in the Appraisal Value at End of Period column are the appraisal values in the real estate appraisal reports with a pricing point of November 30, 2014 (end of 18th Fiscal Period).
(Note 5) The figures entered for PML are the figures in the Portfolio Earthquake PML Assessment Report (December 2014) prepared by Sompo Japan Nipponkoa Risk Management Inc.
(Note 6) The entrusted real estate corresponding to trust beneficiary interests that DOI owns regarding Shinjuku Maynds Tower is a co-ownership interest equal to 6/7 of the entire property. DOI acquired 3/7 of theco-ownership interest on July 13, 2007 for 65.1 billion yen and 3/7 of the co-ownership interest on November 26, 2007 for 68.7 billion yen. The figure shown for the Rentable Area is figure equivalent to 6/7
of the total rentable area of the entire building.

I. Overview of Daiwa Office Investment Corporation

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

7 Daiwa Jingumae

23 SHIBUYA EDGE

38 Daiwa Higashi-Ikebukuro

Ikebukuro Sta.

38

Toshima-ku

22 Shinjuku Maynds Tower

30 E SPACE TOWER

43
Ogikubo Sta.

Suginami-ku

33 Daiwa Shibuya Dougenzaka

35 Daiwa Shibuya Miyamasuzaka

Nakano Sta.

Shinjuku-ku

Shinjuku-ku
Shinjuku Sta.
32

22
43 Integral Tower

32 shinyon curumu

Yotsuya Sta.

Honancho Sta.

Shibuya-ku

Minato-ku

Aoyamaitchome Sta.

7

4
Omotesando Sta.

23

Saikyo Line

Hibiya Line

Chuo Line

Tozai Line

Sobu Line

Chiyoda Line

JR Yokosuka Lineand
Sobu Rapid Line

Yurakucho Line
Hanzomon Line

3 Daiwa Shibaura

4 Daiwa Minami-Aoyama

6 Daiwa A Hamamatsucho

Fukutoshin Line
Oedo Line35
Shibuya Sta.

yu
Tok

Namboku Line

Toei Subway

Line

De

Marunouchi Line

30
33

Lin
e

Yamanote Line

ne n
-Tosh
i

JR

Ginza Line

To
kyu
To
yok
o

Tokyo Metro

8 Daiwa Shibadaimon

10 Daiwa Shimbashi 510

Naka-meguro Sta.

16 Daiwa Azabudai

Asakusa Line

Meguro Sta.

Mita Line
Shinjuku Line

Main investment area:
Five Central Wards of Tokyo
Focused investment area:
Greater Tokyo
Major Regional Cities

6

21 Daiwa Onarimon

26 Daiwa Nishi-Shimbashi

34 Daiwa Akasaka

36 Azabu Green Terrace

Osaki Sta.
41

(As of November 30, 2014)

Chuo-ku

1 Daiwa Ginza

2 Daiwa Ginza Annex

11 Daiwa Tsukijiekimae

12 Daiwa Tsukiji

13 Daiwa Tsukiji 616

14 Daiwa Tsukishima

15 Daiwa Nihonbashi Horidomecho

17 Daiwa Nihombashi Honcho

18 Daiwa Ginza 1-chome

19 Daiwa Kyobashi

24 Daiwa Kodenmacho

28 Daiwa Kayabacho Building

31 Daiwa Nihonbashi Hongokucho

Chiyoda-ku

Asakusa Sta.
Oshiage Sta.

Suidobashi Sta.

Kudanshita Sta.

9

Akihabara Sta.

5

37
31

24

Chiyoda-ku
Hibiya Sta.

Akasaka Sta.

12

Toranomon Sta.

34

18
Ginza Sta.

Shimbashi Sta.
26
10
21

6

16
Shibakoen Sta.

9 Daiwa Misakicho

20 Daiwa Kojimachi 4-chome

25 Daiwa Jimbocho

27 Daiwa Kudan

29 Daiwa Jimbocho 3-chome

39 Benex S-3

42 Daiwa Kamiooka

44 Daiwa Minami-Senba

45 Daiwa Meieki

Ningyocho Sta.

Nihombashi Sta.

Tokyo Sta.
Akasakamitsuke Sta.

5 Daiwa Sarugakucho

15

17

Otemachi Sta.

20

Kinshicho Sta.

29 25
27

12

28

19

37 Daiwa Kinshicho

Chuo-ku
11
13

Tsukishima Sta.

14

8Minato-ku
363

39
46 Kitahama Grand Building

44
ShinagawaSta.

40

Shinagawaku

40 Daiwa Shinagawa North

41 Daiwa Osaki 3-chome

46 45

42

I. Overview of Daiwa Office Investment Corporation

7

External Growth Measures
Proactive investment in selectively chosen competitive properties

Changes in Asset Size and Trading Performance
Aim to achieve medium-term goal of asset size of 500 billion yen by utilizing acquisition capability earned through capital increase(billion yen) 550

80.0 (%)
Total Acquisition Price

LTV (Total Asset)

500.0

500

70.0

Active investment for competitive
properties after thorough selection

450
400
350
300
250

287.3

278.1

269.1

265.0

25.5

25.3

150
100
50

28.9

28.1

42.1

40.2

40.0

30.0
Acquisition property

Acquisition property

Acquisition property• Daiwa Nishi-Shimbashi• Daiwa Kudan• E SPACE TOWER• Daiwa Osaki
3-chomeAcquisition property

Acquisition property

Acquisition property• Daiwa Jimbocho• Daiwa Kayabacho• Daiwa Jimbocho 3-chome• Daiwa Nihonbashi
Hongokucho

0

50.0

43.0

40.6

37.5

34.4

34.2

34.0

200

314.9

313.2

311.3

364.0

352.7

332.0

60.0

399.0

387.5

Acquisition property

Acquisition property• Daiwa Shibuya Dogenzaka• Daiwa Akasaka• Daiwa Shibuya Miyamasuzaka• Azabu Green Terrace• Kitahama
Grand Building

Acquisition property

Acquisition property• shinyon curumu• Daiwa Meieki• Daiwa Kamiooka• Integral Tower

20.0(Planned) Acquisition Property

10.0• Daiwa Ebisu 4-chome• LAQUAS Higashi Shinjuku• Concept Aoyama• Shinsen Place

8th
9th
10th
11th
12th
13th
14th
15th
16th
17th
18th
Mar. 2, 2015
Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period (planned)0Mediumterm goal

Current Portfolio and Acquisition Policy
DOI will invest in competitive properties based on in-depth data analysis upon careful selection from among the vast information on properties obtained
through diverse sourcing.
■ Acquisition Policy■ Distribution Chart of Portfolio Properties* is for properties acquired in the 17th and 18th Fiscal Periods,

is for properties acquired in the

Building age (year) 19th Fiscal Period, is for properties acquired after the sponsor change and is for properties soldin the 19th Fiscal Period. Distance to station is the distance from the nearest railway station.
60• Invest heavily in the five central wards of Tokyo and equivalent area.
• Thoroughly select properties in view of actual demand toward location (distance tostation, station power, crowd attraction, surrounding environment), building specs, etc.

55

• Target properties to improve stability and profitability of our existing portfolio.

50

Daiwa Ginza 1-chome
Daiwa Nihombashi Honcho• Invest in buildings less than 25 years of building age.
45
40

■ Sale Policy

35• Consider replacement of properties if necessary by sales in light of properties’ futurecompetitiveness, profitability, etc.

25

■ Number of Properties Reviewed for Acquisition* Number of gross proposals. (cases)(cases)500
400

Number of properties reviewed (left axis)
Number of properties reviewed in detail (right axis)

427
335

300
200
100
0

8

35

44

300

268

221
30

25

28

100

17

80
60

15

Daiwa
Kinshicho

Integral Tower

20

Daiwa Ebisu 4-chome

416

296

264

30

26

11th
12th
13th
14th
15th
16th
17th
18th
Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period

15

Shinsen Place
Concept Aoyama

10

40
20
0

Kitahama
Grand Building

5

Azabu Green Terrace

LAQUAS Higashi Shinjuku

0

0

1

2

3

4

5

6

7

8
9
10
11
Distance to station (minutes)

Newly Acquired Properties■ 18th Fiscal Period

Azabu Green Terrace (acquisition on July 4, 2014)

Kitahama Grand Building (acquisition on August 1, 2014)• Approx. 8-minute walk from Shirogane-Takanawa Station on
Tokyo Metro Namboku Line and Toei Subway Mita Line.
• It is located in Minami-Azabu area, which is surrounded by theMoto-Azabu/Hiroo international area where a number ofembassies and high-end residences for foreigners are situatedand the Shirokane-takanawa area that is very popular as aresidential area with a high class cultural environment.

• Located about 300 meters south of or a 4 minute-walk from
Kitahama Station on the Osaka Municipal Subway Sakaisuji Line.
• It stands in the area which is regarded as Sakaisuji Honmachi
business zone with office buildings around the junctions of Sakaisuji& Honmachi-Dori and Chuo-Odori, and is also adjacent to the
Kitahama zone, an area that has traditionally thrived as a hotspot forthe securities and pharmaceuticals industries and which to this day
is home to many bases of financial institutions and pharmaceuticalcompanies.

Acquisition price 14,000 million yen
Expected NOI yield 4.6%
3-20-1 Minami Azabu,
Address
Minato-ku, Tokyo
Site area
3,655.20m2
Structure and floors S RC B1/6F
Total floor area 17,127.05m2
Appraisal price 15,000 million yen (at the timeof the acquisition)
Completion
September 2009
Occupancy rate 100.0% (at the time of theacquisition)

Acquisition price 9,481 million yen
Expected NOI yield 5.0%
2-2-14 Awaji-cho, Chuo-ku,
Address
Osaka City, Osaka
Site area
2,078.62m2
Structure and floors S SRC B1/16F
Total floor area 18,762.97m2
Appraisal price 10,000 million yen (at the timeof the acquisition)
Completion
February 2008
Occupancy rate 100.0% (at the time of theacquisition)■ 19th Fiscal Period

Daiwa Ebisu 4-chome (acquisition on December 1, 2014)• Approx. 4-minute walk from Ebisu Station on the JR Yamanote, Saikyo and Shonan-Shinjuku lines as well as an approx. 6-minute walk from
Ebisu Station on the Tokyo Metro Hibiya Line.
• Transportation is convenient as access to Shibuya, Shinjuku, etc. is possible from JR Ebisu Station while access to Roppongi, Kasumigaseki,
Hibiya, etc. is possible from Tokyo Metro Ebisu Station.
4,135 million yen

Expected NOI yield

4.2%

Address

4-9-10 Ebisu, Shibuya-ku, Tokyo

Site area

650.05m2

Structure and floors

SRC B1/9F

Total floor area

3,964.00m2

Appraisal price

4,330 million yen (at the time of the acquisition)

Completion

December 1997

Occupancy rate

100.0% (at the time of the acquisition)

Rinsena-dori Elementary School

Komazawoetr
oM eky Lin
To ibiyaH
Ebisu Sta.

Mizuho Bank
Daiwa Ebisu 4-chome

and
ikyo
, Sa lines
note kuama hinju
JR Yonan-S
Sh

Acquisition price

Shibuya Ebisu
Post Office

Kakezuka
Elementary School

Ebisu Garden PlaceLAQUAS Higashi Shinjuku (acquisition on December 3, 2014)• Approx. 3-minute walk from Higashi-Shinjuku Station on the Tokyo Metro Fukutoshin Line and Toei Subway Oedo Line.
• Access towards Shibuya, Shinjuku and Ikebukuro is excellent due to the Fukutoshin Line while access to Iidabashi, Roppongi, etc. is excellent
due to the Oedo Line.

4.1%

Address

2-2-6 Okubo, Shinjuku-ku, Tokyo

Site area

1,548.77m2

Structure and floors

S 10F

Total floor area

9,958.09 m2

Appraisal price

9,030 million yen (at the time of the acquisition)

Completion

August 2010

Occupancy rate

100.0% (at the time of the acquisition)

Shinjuku Okubo
Post OfficeOkubo Library

Meiji-dori

8,450 million yen

Expected NOI yield

Higashitoyama
Kindergarten

Higashitoyama
Elementary School

LAQUAS
HigashiShinjuku

Okubo
Elementary School

HigashiShinjuku Sta.
Tokyo Me
Fukutos tro
Line hinAcquisition priceToei Oedo Line
Shinjuku
Eastside Square

I. Overview of Daiwa Office Investment Corporation

9External Growth Measures■ 19th Fiscal Period

Concept Aoyama (Scheduled to be acquired on March 2, 2015)• Approx. 4-minute walk from Gaienmae Station on the Tokyo Metro Ginza Line.
• Highly visible as it stands with an approx. 22m width along Gaien Nishi-Dori.
• Also an approx. 8-minute walk from Omotesando Station at which the Tokyo Metro Ginza, Hanzomon and Chiyoda lines can be used, andtransportation is therefore excellent.
Acquisition price9,800 million yen

Expected NOI yield

4.1%

Address

3-1-30 Jingumae, Shibuya-ku, Tokyo

Gaienmae Sta.
AoyamaElementary
SchoolAoyamaPark

Site area

1,439.04m2

Structure and floors

S RC B1/7FTo
kyo
kyo MetMe ro H
tro anz
Gin omoza
Lin n Linee

Concept Aoyama

Appraisal price

10,100 million yen (at the time of the acquisition)

Completion

November 2001

Occupancy rate

85.9% (at the time of the acquisition)

Sumitomo
Mitsui Banking

To

Total floor area

4,933.40 m2

Omotesando Sta.
T
Ch okyoiyo M
da etrLin oeMizuho Bank

Shinsen Place (Scheduled to be acquired on March 2, 2015)

Acquisition price4,800 million yen

Expected NOI yield

5.0%
9-1 Shinsen-cho, Shibuya-ku, Tokyo

Total floor area

3,956.84m2

Appraisal price5,460 million yen (at the time of the acquisition)oineTokyu Corporation

es
Lin

To
De kyu
ne
nto
shi
L

yok

yo

11th Period

Cerulean Tower
Tokyu Hotelaik

100.0% (at the time of the acquisition)

T
Linokyue To

Ya

September 2001

Occupancy rate

Shibuya Sta.

Shibuya Mark City
Keio ashiraTokyu Plaza
Inok
Line

Daiwa Shibuya Dogenzaka
Shinsen
Place

Completion

10th Period

Shibuya Sta.

E SPACE TOWER
Shinsen Sta.

,S

RC B1/9F

te
no589.45m2

ma

Site area

tro
Tokyo Men Line
HanzomoSeibu

JR

9th Period

109

Structure and floors

Acquisition of Properties after Sponsor Change
Acquisition
timing

Seibu

Tokyu

Address

Tokyo Metro
Fukutoshin
Line• Faces National Route 246 on the top of Dogenzaka hill, and is located an approx. 11-minute walk from Shibuya Station, one of the largest
terminal stations in central Tokyo.
• Multiple routes can be used including those of JR, Tokyo Metro, Tokyu Corporation and Keio Corporation.

Total acquisition price: 153,207 million yen

12th Period

13th Period

14th Period

Daiwa
Jimbocho
3-chomeE SPACE TOWER

Daiwa
Nihonbashi
Hongokucho

Daiwa
Osaki 3-chome

shinyon curumu

Daiwa Meieki

Shibuya-ku, Tokyo

Chuo-ku, Tokyo

Shinagawa-ku, Tokyo Shinjuku-ku, Tokyo

Nagoya-shi, Aichi

1,650 million yen

9,650 million yen

5,300 million yen
Domestic special
purpose company
Feb. 1, 2013

Daiwa Jimbocho

Daiwa
Nishi-Shimbashi

Daiwa Kudan

Daiwa
Kayabacho
Building

Chiyoda-ku, Tokyo

Minato-ku, Tokyo

Chiyoda-ku, Tokyo

Chuo-ku, Tokyo

Chiyoda-ku, Tokyo

Acquisition
4,150 million yen
price

5,000 million yen

4,000 million yen

5,600 million yen

3,550 million yen 24,000 million yen 1,721 million yen

15th Period

Property
name

Area

Seller

ORIX JREIT Inc.

Acquisition
dateMar. 10, 2010

Japan Core Asset 2 Shining Nova No. 5 Daiwa Property Co,
YK (Note 1)
B (SPC)
Ltd.
Aug. 13, 2010

Sept. 2, 2010

Mar. 25, 2011

Tokyu Land
Corporation

Endeavor Realty
Fund YK (Note 1)

Tosei Corporation

MCR Six GK

Two domestic
industrial
companies

Mar. 29, 2011

July 8, 2011

May 11, 2012

Sept. 18, 2012

Dec. 3, 2012
Apr. 12, 2013

(Note 1) "YK" stands for limited liability company and TMK (tokutei mokuteki kaisha) stands for special purpose company.

10■ Portfolio Replacement
Total acquisition price 4 properties Approx. 27.1 billion yen
Acquired on
December 1, 2014

Acquired on
December 3, 2014

Daiwa Ebisu
4-chomeLAQUAS
Higashi Shinjuku

Concept Aoyama

Shinsen Place

Building age: 17.2 years
4-minute walk from
Ebisu Station

Building age: 4.5 years
3-minute walk from
Higashi Shinjuku Station

Building age: 13.2 years
4-minute walk from
Gaienmae Station

Building age: 13.4 years
4-minute walk from
Shinsen Station

Total transfer price 3 properties 15.5 billion yen

Scheduled to be acquired on
March 2, 2015

Scheduled to be transferred on
February 2, 2015

Asset
replacement

Acquisition PriceAppraisal Value (Note)

Daiwa Ebisu 4-chome

4,135 million yen

4,330 million yen

LAQUAS Higashi Shinjuku

8,450 million yen

9,030 million yen

Concept Aoyama

9,800 million yen

10,100 million yen

Shinsen Place

4,800 million yen

5,460 million yen

27,185 million yen

28,920 million yen

Daiwa Ginza
1-chomeDaiwa Kinshicho

Building age: 51.1 years
3-minute walk from
Mitsukoshimae Station

Building age: 53.1 years
2-minute walk from
Ginza 1-chome Station

Building age: 23.1 years
9-minute walk from
Kinshicho Station

Property Name

Five central wards, close to stations, relatively new
Property Name

Daiwa Nihombashi
HonchoTransfer Price

Daiwa Nihombashi
HonchoDaiwa Ginza
1-chomeDaiwa KinshichoBook Value (Note 1) Appraisal Value (Note1)
7,045 million yen

6,830 million yen

4,472 million yen

4,170 million yen

3,355 million yen
15,500 million yen 14,873 million yen

3,620 million yen
14,620 million yen

Undisclosed (Note 2)(Note 1) Book values and appraisal values are as of November 30, 2014.
(Note 2) The individual transfer prices are undisclosed as consent was not obtained fromthe seller.

(Note) Appraisal values are as of the acquisitions.

■ Effects of Portfolio Replacement on the 19th Fiscal Period
Major Indices
Number of Properties
Total Assets (Note 1)
NOI Yield (Annualized) (Note 2)
NAV per Unit (Note 3)
Average Building Age (Note 4)
Occupancy Rate (Note 5)
LTV

Fiscal period ended
May 2014(17th Period)

Fiscal period ended
November 2014
(18th Period)

Fiscal period ending
May 2015 (19th Period)
Acquisition Properties

Fiscal period ending
May 2015 (19th Period)
Transfer Properties

After Portfolio
Replacement

44 properties
364.0 billion yen
3.60%
467,984 yen
22.5 years
96.4%
43.0%

46 properties
387.5 billion yen
3.73%
478,051 yen
21.5 years
97.2%
40.2%

4 properties
27.1 billion yen
4.29%
11.1 years
96.4%-

3 properties
15.6 billion yen
4.22%
45.1 years
88.1%-

47 properties
399.0 billion yen
3.75%
482,752 yen
19.9 years
97.7%
42.1%

(Note 1) Asset size is the total acquisition price.
(Note 2) NOI yield is calculated using the following formula: Numerator: Annualized NOI for the 17th and 18th fiscal periods do not include costs related to the Investment Corporation. Annualized NOI for the 17th Fiscal
Period is used for the 17th Fiscal Period, annualized NOI for the 18th Fiscal Period is used for the NOIs of properties transferred in the 18th and 19th fiscal periods and expected NOI announced in the press
release concerning property acquisition is used for the NOI of properties acquired in the 19th Fiscal Period. Denominator: Book value for the 17th Fiscal Period is used for the 17th Fiscal Period, book value asof the end of the 18th Fiscal Period is used for the end of the 18th Fiscal Period and after portfolio replacement, acquisition price is used for properties acquired in the 19th Fiscal Period and transfer price isused for properties transferred in the 19th Fiscal Period.
(Note 3) NAV per unit = (Unitholders’ equity + Total appraisal value at the end of fiscal period –Total property book value at the end of fiscal period) / Investment units issued and outstanding(Note 4) Average building ages are all as of January 23, 2015.
(Note 5) The occupancy rate for properties acquired in the 19th Fiscal Period are as of the acquisition while the occupancy rate for properties transferred in the 19th Fiscal Period are as of the end of the 18th Fiscal
Period.

15th Period

16th Period

17th Period

Daiwa
Kamiooka

Daiwa Shibuya
Daiwa Shibuya
Daiwa Akasaka
Miyamasuzaka
Dougenzaka

Integral Tower

Azabu Green
Terrace

Kitahama Grand
Building

Daiwa Ebisu
4-chomeLAQUAS Higashi
Shinjuku

Concept
AoyamaShinsen Place

Yokohama-shi,
Kanagawa

Shibuya-ku, Tokyo

Shibuya-ku, Tokyo Suginami-ku, Tokyo

Minato-ku, Tokyo

Osaka-shi, Osaka

Shibuya-ku, Tokyo

Shinjuku-ku, Tokyo

Shibuya-ku, Tokyo

Shibuya-ku, Tokyo

2,000 million yen 4,500 million yen 9,200 million yen 7,000 million yen

15,220 million
yen

14,000 million
yen

9,481 million yen 4,135 million yen 8,450 million yen 9,800 million yen 4,800 million yen

E Buildings
Limited Liability
Company

Ogikubo Building
YK (Note 1)

Azabu Green
Terrace GK

GK North Beach

Domestic
industrial
company

Higashi Shinjuku Domestic special Domestic special
Building TMK purpose company purpose company(Note 1)

Sept. 27, 2013

May 29, 2014

July 4, 2014

Aug. 1, 2014

Dec. 1, 2014

Dec. 3, 2014

Shimizu
Corporation
Mar. 1, 2013

Minato-ku, Tokyo

Domestic special Hakuba Capital 1
purpose company
TMK (Note 1)
July 3, 2013

Aug. 9, 2013

18th Period

19th Period

Mar. 2, 2015
(planned)

Mar. 2, 2015
(planned)(Note 2) The sum of i) the total (planned) acquisition price from the time of the above sponsor change on March 2, 2015 and ii) (planned) prices for additional acquisition of existing properties or of the site in existing
properties during the same period, is 153,627 million yen.

I. Overview of Daiwa Office Investment Corporation

11

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

Office Market Trends
Further improvements in vacancy rate are observed and rent levels are showing signs of recovery.

■ Office Building Rental Market of Tokyo■ Transition of the Supply and Demand Balance in 23 Wards of Tokyo(yen/tsubo)
25,000(yen/tsubo)
25,000

(%)
10.0
(%)
10.0

23,00023,0008.0

21,00021,0006.0

19,00019,000

4.0

8.0
6.0
4.0
2.0

17,00017,00015,00015,000

Average rents ofexisting buildings
Averagerents of (left axis)

2.0

Vacancy rate ofexisting buildings
Vacancyrate of (right axis)

0.0

existing buildings (left axis)
existing buildings (right axis)
0.02001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
(Source) Miki Shoji(tsubo)400,000(tsubo)400,000
300,000
300,000
200,000
200,000
100,000
100,00000-100,000-100,000-200,000-200,000

(%)
9.0
(%)
9.0
Supply and7.5
demandand
gap
Supply7.5
6.0
demand gap
6.0
4.5
4.5
3.0
3.0
Predicted figures
1.5
Floor area of new supplies
Predicted figures
1.5
Vacancy rate
Floor
0.0
Floor area
area ofof new
new demands
supplies
Vacancyrate 2011 2012 2013 2014 2015 2016 2017 2018 0.0
new demands
2001Floor
2002area
2003of2004
2005 2006 2007 20082009 2010
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

(Source) CBRE “Mid-term Office Market Outlook 2014 Tokyo 23 Wards”

Rental Business Status
We strived to improve the occupancy rate as well as diversifying tenants in leased areas.

■ Occupancy Rate Tokyo
(%)
100.0
(%)
100.0
97.7
97.7

(yen/tsubo)
25,000(yen/tsubo)
25,000
96.4
96.4

95.9
95.4
95.9
95.4

95.0
95.0
92.8
92.8

90.0
90.0

■ Average Contract Rents and Market Rents (monthly)

94.3
94.3

95.0
95.0

96.4
96.4

96.3
96.3

97.2
97.2
95.2
95.2

96.0
96.0
95.8
95.8

96.3
96.3

120
120

22,50090
78.22
78.119078.22 78.06 78.11
60
78.06
17,79960
17,79918,21522,50020,00020,00092.4
92.4

17,500Occupancy rate (actual)(actual)Occupancy rate (forecast)

17,500Occupancy rate (forecast)85.7(Asof disclosurein July 2014)
85.0
Occupancy
rate (forecast)
85.7
in July2014)
85.0
End of End of End of
End of End of End of End of End of End of End of (AsEndofofdisclosure
End of End
of Endof
7th
8th
9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20thEndof Endof Endof Endof Endof Endof Endof Endof Endof Endof Endof Endof Endof EndofPeriodPeriodPeriodPeriodPeriodPeriodPeriodPeriodPeriodPeriodPeriodPeriodPeriodPeriod7th
8th
9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th
Period Period Period Period Period Period Period Period Period Period Period Period Period Period

Unit rent index(Period-on-period
Unit rent index
comparison, right axis)*(Period-on-period
comparison,rightrents**axis)*
Averagecontract

18,215
16,768
16,76830
30

Average contract
rents**
office rents(according
to MikiShoji for five central wards of Tokyo)
16,2840
Average officerents
to MikiShojicentralwards
of Tokyo)
15,000End of End(accordingof End of End
of Endof forEndfiveof Endof Endof Endof End of End of End of End of16,284
End of End of End of0
4th 5th 6th 7th 8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19thEndof Endof Endof Endof Endof Endof Endof Endof Endof Endof Endof Endof Endof Endof Endof EndofPeriodPeriodPeriodPeriodPeriodPeriodPeriodPeriodPeriodPeriodPeriodPeriodPeriodPeriodPeriodPeriod
4th 5th 6th 7th 8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th
PeriodPeriodPeriodPeriodPeriodPeriod Period
PeriodPeriod Period
Period Period
Period* Unitrent
index
is theearning
rates of
unitPeriod
rent Period
of individual
properties
indexed
withPeriod
the 7th
15,000Fiscal Period as 100.
** Average monthly contracted rents with tenants at the end of each fiscal period.

■ Tenant Diversification in Leased Area

(No. of cases)(No. of700
cases)
700
600
600

25.5
25.5

28.6
28.6

28.4
28.4
24.9
24.4
24.9 23.4 24.4
23.4

22.8

500
500
400
400
300
300

8
24
8
24
115
100 115

200
200

100
0
0

25.2
22.8 25.2

27.5
27.5

97
97

3,000m2 or more (left axis)
1,000m22 oror moremore,(leftlessaxis)
than 3,000m2 (left axis)
3,000m
2 2
2 2300m
1,000mor
ormore,more,lesslessthanthan1,000m
3,000m(left(leftaxis)
axis)
2
Less
300m2less(leftthanaxis)1,000m2 (left axis)
or more,300mthan22
Ratio thanof tenants
3,000mLess
300mleasing(left axis)
or more(%) (rightleasingaxis) 3,000m2
11
Ratio
of tenants
11
or more (%) (right axis)10
11
27

8
8
34
34

9
34
9
34

10
32
32

127
127

127
127

133
133

145
145

105
105

107
107

103
103

110
110

11
30
30

27

159
159
119
119

10
10
31
31
174
174

139
139

27.1
27.1

■ Changes and Reasons for Tenants Moving In/Out (Note)(No. of cases)(No. of60
cases)
60
50
50
40
40
30
30
20
20
10

15
15
45

10
10
34
34

12
12
40
40

187
187

194
194

196
196

147
147

149
149

158
158

20
20

End of
End of
End of
End of
End of
End of
End of
End of
End of
End of
9th Period 10th Period 11th Period 12th Period 13th Period 14th Period 15th Period 16th Period 17th Period 18th Period
End of
End of
End of
End of
End of
End of
End of
End of
End of
End of
9th Period 10th Period 11th Period 12th Period 13th Period 14th Period 15th Period 16th Period 17th Period 18th Period

100
-100
-10
-20
-20
-30

45

(Note) Office and retail are the target tenants (excluding residence and warehouse)

12

(%)
30
(%)
30

10
10

-30
-40
-40
-50
-50
-60
-60

33
33

-20
-20

30
30

31
31
17

6
6

17

-24
-24

38
38
16
16
4
4
-12
-12

-14
-14

18
18
-2
-2
-20
-20

-25
-25

18
18

-26
-26

24
24
9
9

25
25
12
12

-15
-15

-13
-13

42
42
18
18

-24
-24

43
43
12
12

-31
-31

-53
-53

End of
End of
End of
End of
End of
End of
End of
End of
End of
End of
End of
8th Period 9th Period 10th Period 11th Period 12th Period 13th Period 14th Period 15th Period 16th Period 17th Period 18th Period
End of
End of
End of
End of
End of
End of
End of
End of
End of
End of
End of
8th Period 9thNumber
Period 10th
Period Ins
11th Period 12th Period
13th Period
14thOuts
Period 15th PeriodDifference
16th Period 17th Period 18th Periodof Move
Numberof Move
Number of Move Ins

0
0

13
13

44
44

Number of Move Outs

Difference

Breakdown of 18th
Cost
Space
BetterConsolidation Downsizing
Reduction Expansion
Location
PeriodMoving inMoving out

4
3

22
11

1
6

1
6

6
3

Other

Total

9
2

43
31

(Note) Figures above exclude new moving in/out for residential and warehouse properties

Occupancy Rate of the Properties Subject to Leasing Improvement in the 18th Fiscal Period■ Daiwa Minami-Senba (Acquisition price: 4,810 million yen)
Overview

Boasts goodtransportation
convenience being
located within a 3
minute-walk from
Shinsaibashi Station on
the Osaka City Subway
Midosuji Line, NagahoriTsurumi Line and a 4
minute-walk from
Yotsubashi Station on the
Yotsubashi Line.

Leasing Strategy

Occupancy rate
100.0(%)

100.0

100.0

95.7
75.7

50.0

0.0
End of 15th
PeriodEnd of 16th
PeriodEnd of 17th
PeriodEnd of 18th
Period• Consolidated the leasing window and gathered timely
information, establishing a system that can rapidly respond totenant needs.
• Changed management rules to be able to respond to a wide
range of tenant needs.
• Contracts were concluded in a short period as more potential
tenants than initially anticipated were obtained through thereconstruction of a local network which led to attracting
potential tenants from other areas.
100

Properties Subject to Strategic Leasing in the 19th Fiscal Period■ Daiwa Ebisu 4-chome (Acquisition price: 4,135 million yen)

50

Overview

Occupancy Status

Near to railway stations
being a 4-minute walkfrom Ebisu Station on
the JR Yamanote,
Saikyo and ShonanShinjuku lines as wellas an approx. 6-minute
walk from Ebisu Stationon the Tokyo Metro
Hibiya Line.

The seller company
was using the property
for itself but is expected
to leave the property
after the sale. The
periodical leasing
agreement with theseller will expire at theend of March 2015 (thecurrent occupancy rate
is 100.0%), after which
the occupancy rate willbe 0.0%.

Leasing Strategy

0• Advertise that 800+ tsubos of empty floor space is very rare in Shibuya Ward
where the vacancy rate is trending downwards (January 2014: 5.44% December
2014: 3.18%).
[Target potential tenants by features]
Foreign companies, information
Area feature andcommunications companies
and manufacturing
Property feature Service
companies including apparel
Other Educational institutions and various schools

Tendency to gather in areas specific tosame business type
Demand for using freight handling spaceand multi-purpose space
Demand for being the sole occupant of
the building• As a quake-absorbing structure is employed, emphasize the ability to take in theneeds of tenants that are conscious of BCP (Business Continuity Plan).
• Demand for both renting of floors and of the entire building will be explored.

Measures to Increase Portfolio Value■ Strategic renewal works■ Coexistence with Local Societies (Shinjuku Maynds Tower)

Renewal of restrooms of
Daiwa A Hamamatsucho,
Daiwa Shinagawa Northand Daiwa Shibadaimon

Participated in “Shinjuku
Minamirumi,” anillumination event in thesouth Shinjuku area, incollaboration with Odakyu
Electric Railway,
Takashimaya and the East
Japan Railway Company,
for the second fiscal year.

Daiwa A Hamamatsucho

BeforeAfter

Renewal works for air
conditioning machine at
Daiwa Tsukishima[Period] November 12, 2014 –February 25, 2015

■ Strategic tenant attraction (shinyon curumu)
Before■ Measures to Improve
Customer Satisfaction

Distribution of calendars
to office workers

Shinjuku Maynds Tower

After

Brought in tenants thatgive existing shop
tenants the opportunity
to increase customers.
Awareness of thebuilding will grow aswell with the increase ofvisitors.

Installation ofdigital signage

Daiwa Ginza

A new type of cafe by thecompany that operates
the SNS app LINE

Shinjuku’s largest private
aquarium dining kitchen

Caffice

LIME

I. Overview of Daiwa Office Investment Corporation

13

Financial Conditions
Reduce refinancing risk by extending borrowing periods and diversifying repayment dates

Status of Interest-Bearing Liabilities (as of November 30, 2014)
During the 18th Fiscal Period, DOI conducted refinancing through loans and issued unsecured investment corporation bonds for the repaymentof 22 billion yen of loans and early redemption of 3.5 billion yen of subordinated investment corporation bonds, in order to extend borrowing
periods and diversify repayment dates. DOI will continue to focus on stable financial management.
■ Interest-Bearing Liabilities■ Change in Remaining Years at the Time of70.0(%) (year) 8.0 Procurement of Interest-Bearing Liabilities

4.4 4.5 (year)(billion yen) 280
Interest-bearing liabilities (left axis)

240

60.0

LTV (based on acquisition price) (Note) (right axis)

200

50.0

Medium-to-long term, upper-limit LTV target range

160

7.0

3.8
Average remaining years at the time ofprocurement during the 18th Fiscal Period (left axis)

6.0

4.0

7.1

6.2

3.5

5.0

3.0

4.0

2.5

3.0

2.0

2.0

1.5
1.0

40.0

120

30.0

80

20.0

40

10.0

1.0

0.0

0.0

0

Average year remaining at the period end (right axis)

End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of
1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th
Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period

0.5
8th
9th 10th 11th 12th 13th 14th 15th 16th 17th 18th
Period Period Period Period Period Period Period Period Period Period Period(Note) LTV (based on acquisition price): Total interest-bearing liabilities / Total acquisition price of properties■ Diversification of Repayment Dates■ Balance of Borrowings by Financial Institution(million yen)
30,000Investment Corporation Bond

25,50020,00010,0000
18th 19th 20th 21st 22nd 23rd 24th 25th 26th 27th 28th 29th 30th 31st 32nd 33rd 34th 35th 36th 37th 38th
Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period■ Ratio of Fixed- to
Floating-Rate Borrowings■ Ratio of Long- to
Short-Term Liabilities

End of 18th
14.2%
FiscalPeriodEnd of 18th 11.9%
FiscalPeriod

85.8%

88.1%

Fixed interest rates

Long-term borrowings

Floating interest rates

Short-term borrowings, etc.

Financial institution

Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Trust Bank
Development Bank of Japan
Mizuho Bank
The Bank of Tokyo-Mitsubishi UFJ
Shinsei Bank
Resona Bank
Mitsubishi UFJ Trust and Banking
Kansai Urban Banking Corporation
Mizuho Trust and Banking
Aozora Bank
The Bank of Fukuoka
ORIX Bank Corporation
The Gunma BankThe Shizuoka Bank
Tokio Marine & Nichido Fire Insurance
The Musashino Bank
The Higashi-Nippon Bank
The Hiroshima Bank
The Kagawa Bank
The 77 Bank
The Bank of Yokohama
The Yamaguchi Bank
Taiyo Life Insurance Company
Nippon Life Insurance Company
Fukoku Mutual Life Insurance
No. 3 Unsecured Investment Corporation Bonds
No. 4 Unsecured Investment Corporation Bonds
Total

Balance (mm yen)

31,40019,35018,75013,90011,50011,000
9,000
5,000
5,000
5,000
4,500
4,000
2,500
2,500
2,000
2,000
2,000
1,500
1,000
1,000
1,000
500
500
300
300
200
3,000
2,100
160,800■ Status of Rating
Rating agency

Japan Credit Rating Agency, Ltd. (JCR)
Rating and Investment Information, Inc. (R&I)

14

Target rating

RatingRating outlook

Long-term issuer rating

AA−

StableIssuer rating

A+

Stable

Share

19.5%
12.0%
11.7%
8.6%
7.2%
6.8%
5.6%
3.1%
3.1%
3.1%
2.8%
2.5%
1.6%
1.6%
1.2%
1.2%
1.2%
0.9%
0.6%
0.6%
0.6%
0.3%
0.3%
0.2%
0.2%
0.1%
1.9%
1.3%
100.0%

Description of Asset Manager

Organization of Asset Manager (as of January 1, 2015)■ Description■ Directors and Auditor

Name

Daiwa Real Estate Asset Management Co., Ltd.

Address

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

Established

October 21, 2004

Paid-in Capital

200 million yen

Employees
Registration of Financial Instruments
Business Operator
Building Lots and Buildings Transaction
Business License
Discretionary Agent for Real EstateTransaction Approval

61
No. 355 (Kinsho), Director-General, Kanto Local
Finance Bureau

Association Membership

President and Representative
Akira Yamanouchi
DirectorNo. (3)-83920, Governor of Tokyo
No. 34, Minister of Land, Infrastructure, Transport andTourism
Member of The Investment Trusts Association, Japan
Member of Japan Investment Advisers Association■ Organizational Chart

Vice President andRepresentative Director

Yuji Shinotsuka (Head of Corporate Planning Dept.)

Vice President andRepresentative Director

Yoshiki Nishigaki (Head of Private Fund Management Dept.)

Director

Naoyuki Owa (Head of Administration Dept.)

Director (non-executive)

Toshihiro Matsui

Director (non-executive)

Mikita Komatsu

Auditor (non-executive)

Masaru Shirataki

Auditor (non-executive)

Shinji Kiso

Shareholders’ Meeting
Auditors
Board of Directors

Compliance Committee
Investment Committee

Compliance Officer

President andRepresentative Director

Acquisition
Department
Office Investment
Team
Residential Investment
Team
Healthcare Investment
Team

Asset Management
Department
Office Management
Team
Residential
Management Team
Healthcare
Investment Team
Investment
Planning Team
Construction
Management Team

Private FundManagement Department

Customer Relations
Department

Internal Control OfficeFinance Department

Advisory Team

Finance Team

Operational Team

Accounting Team

Administration
Department

Corporate Planning
Department

Management Team

Structure
Asset Manager
General Administrator
related to the operation of theadministrative instruments
Daiwa Real Estate AssetManagement Co., Ltd④①

Investment Corporation②

General Administrator
Asset Custodian
Sumitomo Mitsui Trust Bank, Limited

General Meeting of Unitholders
Officers
Executive Director: Nobuaki Omura
Supervisory Director: Takayuki Hiraishi
Supervisory Director: Hiroshi Sakuma

Supporting Company

Accounting Auditor

Daiwa Securities Group Inc.

KPMG AZSA LLC① Asset management contract / General administration affairs contract related to operationof administrative instruments② General administrative affairs contract / Asset custodian contract③ Unitholder register, etc. management contract / Special account management contract③⑤

Manager of Unitholder
Registry, etc.
Special Account Management
Institution
Sumitomo Mitsui Trust Bank, Limited

General Administrator(Investment Corporation Bonds)
Sumitomo Mitsui Banking Corporation④ Sponsor support agreement⑤ Fiscal agency agreement(Note) 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 DOI 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)).

I. Overview of Daiwa Office Investment Corporation15

II. Asset Management Report
1. Management Status and Other Performance Highlights Data
Fiscal Period

18th Period 17th Period 16th Period 15th Period 14th Period

June 1, 2014 From Dec. 1, 2013 From June 1, 2013 From Dec. 1, 2012 From June 1, 2012
( From
To Nov. 30, 2014 )( To May 31, 2014 )( To Nov. 30, 2013 )( To May 31, 2013 )( To Nov. 30, 2012 )(1) Operating Performance(Millions of yen, except per unit data or where otherwise indicated)
Operating revenues
9,764
8,588
8,432
7,615
7,566
Rental revenues
9,693
8,491
8,367
7,520
7,384
Operating expenses
5,325
4,827
4,755
4,306
4,419
Property-related expenses
4,325
3,931
3,870
3,499
3,602
Operating income
4,439
3,761
3,677
3,309
3,147
Ordinary income
3,642
3,006
2,956
2,590
2,365
Net income
3,641
3,016
2,960
2,589
2,369
(2) Properties, etc. (as of end of period)
Total assets
399,555
380,723
363,654
342,573
325,666[period-on-period percentage changes][+4.9%][+4.7%][+6.2%][+5.2%][+0.1%]
Interest-bearing liabilities
160,800
163,700
147,700
128,300
112,081
Net assets
222,593
201,655
201,683
201,345
201,118[period-on-period percentage changes][+10.4%][−0.0%][+0.2%][+0.1%][+0.2%]
Unitholders’ capital
219,156
198,781
198,781
198,781
198,781(3) Distributions
Total distribution amount
3,641
3,016
2,960
2,589
2,369
Dividend payout
100.0%
100.0%
100.0%
100.0%
100.0%(4) Per Unit Information
Total number of units issued (units)
441,000
395,798
395,798
395,798
395,798
Net assets per unit (yen)504,746
509,490
509,561
508,707508,132
Distribution per unit (yen)
8,256
7,621
7,478
6,542
5,986
Distribution amount from earnings per unit (yen)
8,256
7,621
7,478
6,542
5,986
Distribution amount in excess of earnings per unit (yen)
–
–
–
–
–
(5) Financial Indicators
ROA
0.9%
0.8%
0.8%
0.8%
0.7%
Notes 2and3[annual rate][1.9%][1.6%][1.7%][1.6%][1.5%]
ROE
1.7%
1.5%
1.5%
1.3%
1.2%
Notes 3and 4[annual rate][3.4%][3.0%][2.9%][2.6%][2.4%]
Capital ratio
55.7%
53.0%
55.5%
58.8%
61.8%
[period-on-period percentage changes][+2.7%][−2.5%][−3.3%][−3.0%][0.0%]LTV (loan to value)
40.2%
43.0%
40.6%
37.5%
34.4%
Property leasing cash flows (NOI)
Note 5
6,866
5,916
5,826
5,300
5,088
(6) Other Referential Information
Number of investment properties
46
44
44
41
38
Number of tenants
Note 6
479
458
442
410
376
286,088.89 259,381.62 244,877.17 225,651.87 208,733.38
Total rentable area (m2)Occupancy rate
Note 7
97.2%
96.4%
96.3%
95.0%
96.4%
Depreciation
1,497
1,356
1,329
1,280
1,306
Capital expenditures
570
454
294
278
357
(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)

16

Operating revenues, etc. do not include consumption taxes, etc.
ROA: Ordinary income ÷ [(Total assets at beginning of period + Total assets at end of period) ÷ 2] × 100
Figures for the 14th Fiscal Period are the annualized figures calculated based on 183 days of management.
Figures for the 15th Fiscal Period are the annualized figures calculated based on 182 days of management.
Figures for the 16th Fiscal Period are the annualized figures calculated based on 183 days of management.
Figures for the 17th Fiscal Period are the annualized figures calculated based on 182 days of management.
Figures for the 18th Fiscal Period are the annualized figures calculated based on 183 days of management.
ROE: Net income ÷ [(Net assets at beginning of period + Net assets at end of period) ÷ 2] × 100
Property leasing cash flows (NOI): Rental revenues − Property-related expenses + Depreciation
Number of tenants is the number of end tenants. When there is a tenant occupying multiple buildings, the concerned tenant iscounted and stated for each individual building.
Occupancy rate: Total leased area ÷ Total rentable area

2. Developments in Asset Management in the Fiscal Period under Review(1) Brief History of the Investment Corporation
Daiwa Office Investment Corporation (former DA Office Investment Corporation; hereinafter “DOI”) was establishedon 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. (hereinafter “DREAM”; former, K.K.
daVinci Select) as the organizer. After its establishment, DOI implemented an additional issuance of investment units
through a public offering (99,600 units) on October 18, 2005 and then listed on the Tokyo Stock Exchange, Inc. (“TSE”)
Real Estate Investment Trust Section (securities code: 8976) the following day.
Though initial assets under management were 79,573 million yen (sum total of acquisition prices), subsequent
activities, such as the additional acquisition of properties and replacement of portfolio properties, resulted in theassets under management amounting to 387,558 million yen (sum total of acquisition prices) as of the last day of
November 2014.
DOI strives to secure stable revenues and achieve sustainable growth of investment assets based on a clear
portfolio development policy of specializing in investment in office buildings, with a particular focus on investment inbuildings with a total floor area of 2,000m2 or more situated in downtown Tokyo, as well as through dedicated efforts
to heighten tenant satisfaction levels.
(2) Investment Environment and Management Performance(A) Investment Environment (from June 1, 2014 to November 30, 2014)
During the 18th Fiscal Period, corporate performance improved due to gradual increase in exports
mainly for the U.S. along with progressing depreciation of the yen, a recovery in consumer spending
brought on by high stock prices, advanced implementation of public investment, etc. in addition to thecontinuation of economic policies by the Abe administration and the large-scale monetary easing policyby the Bank of Japan. The unfavorable effects of the consumption tax hike on spending seems to havesubdued and the Japanese economy is expected to moderately recover due to the effects of rising wages
from the improved employment at companies and other factors.
In the office rental market in central Tokyo, vacancy rates took a turn after peaking in June 2013 anddeclined to 5.55% at the end of November 2014 due to the settling down in new supply. Led by the
improvement in vacancy rates of large buildings, overall vacancy rates including that of small andmedium-sized buildings were also on an improving trend. Since the drop in vacancy rates is leading to astronger sense that office rents are bottoming out, there was a rise in office rents of large buildings insome areas and a continual increase in the overall market.
In the office transaction market, property prices were anticipated to rise due to expectations of theeconomy recovering and property acquisitions by real estate companies and funds (including REITs)
remained high amid the ongoing favorable equity financing environment and proactive lending attitudes offinancial institutions.
(B) Management Performance
To increase the long-term EPS (EPS (net income per unit) after deducting gain on sales of properties)
over the medium to long term, DOI has sustained the strategy for “external growth” which aims toincrease revenue through property acquisitions, and “internal growth” which aims to maximize income
generated from existing properties.
For external growth, DOI proactively engaged in property acquisition activities and purchased “Azabu
Green Terrace” (acquisition price: 14,000 million yen) in July 2014 and “Kitahama Grand Building”(acquisition price: 9,482 million yen) in August 2014. As a result, DOI’s assets under management at theend of the 18th Fiscal Period (as of November 30, 2014) totaled 46 properties, the sum total of acquisition
prices amounted to 387,558 million yen.
For internal growth, with the improvement of the office rental market, DOI tried to meet the demands oftenants to expand rental space through developing good relations with existing tenants and strengthening
cooperation with leasing brokers and property managers. As a result of proactive leasing activities, theoccupancy rate at the end of the 18th Fiscal Period (as of November 30, 2014) was maintained at 97.2%.

II. Asset Management Report17

(3) Overview of Capital Procurement(A) Procurement of Funds for Acquisitions
DOI implemented the following financing activities during the 18th Fiscal Period to acquire the newproperties.
(a) DOI issued new investment units through public offering at 41,092 units and 450,746 yen per unit in theamount of 18,522,054,632 yen on July 2, 2014, and new investment units through third-party allotment
at 4,110 units and 450,746 yen per unit in the amount of 1,852,566,060 yen on July 30, 2014 to acquire
the new properties (“Azabu Green Terrace” delivered on July 4, 2014 and “Kitahama Grand Building”
delivered on August 1, 2014).
(B) Procurement of Funds for Repayment of Borrowings (Refinancing) and for Redemption of Investment
Corporation Bonds (Refinancing)
DOI implemented the following financing activities during the 18th Fiscal Period for repayment of borrowings
and for advanced redemption of investment corporation bonds.
(a) On July 8, 2014, DOI borrowed 17,500 million yen in total from Sumitomo Mitsui Banking Corporation,
Mizuho Trust & Banking Co., Ltd. and Shinsei Bank, Ltd. for a part of the repayment of 19,000 million
yen in total due on July 8, 2014 from Sumitomo Mitsui Banking Corporation, Mizuho Trust & Banking
Co., Ltd., Aozora Bank, Ltd. and Shinsei Bank, Ltd.
(b) On September 12, 2014, DOI issued the third series of unsecured investment corporation bonds at
3,000 million yen and the forth series of unsecured investment corporation bonds at 2,100 million yen
for repayment of 3,000 million yen in total due on September 17, 2014 from Sumitomo Mitsui Banking
Corporation and Sumitomo Mitsui Trust Bank, Limited and for advanced redemption of 3,500 million
yen of the first series of unsecured investment corporation bonds subject to advanced redemption on
September 17, 2014.
(C) Status of Interest-Bearing Liabilities
As a result of the above, the balance of interest-bearing liabilities outstanding at the end of the 18th Fiscal
Period (as of November 30, 2014) stood at 160,800 million yen (short-term debt: 2,500 million yen; long-term
debt: 153,200 million yen; investment corporation bonds: 5,100 million yen). The balance of long-term debt
due within one year stood at 16,600 million yen.
During the 18th Fiscal Period, the average remaining repayment period has been extended from 3.82 years(17th Fiscal Period) to 4.39 years (18th Fiscal Period) because DOI conducted borrowings mainly with periodsof between 6 years and 8 years. Furthermore, borrowing costs were reduced through the reduction of credit
spread interest. Meanwhile, DOI concluded interest-rate swap agreements in the 18th Fiscal Period to fix
future interest payments for borrowings of 20,300 million yen in total in order to offset the risks of the possible
increase of interest rates.

18

(4) Capital Expenditures During the 18th Fiscal Period
The following summarizes the major construction work that constitutes capital expenditures during the 18th
Fiscal Period. Capital expenditures amounted to 570 million yen, and combined with the 125 million yen in
repair expenses, total of 695 million yen in construction work was implemented.
Name of Property(location)

PurposeExpenditure(millions of yen)

PeriodDaiwa Tsukishima (Chuo-ku,
Renewal work for air conditioning
Tokyo)

From: Sep. 2014
To: Nov. 201475

Shinjuku Maynds Tower(Shibuya-ku, Tokyo)
Daiwa Nihonbashi
Horidomecho (Chuo-ku,
Tokyo)

Renewal work for DC power supply of
emergency lighting

From:
To:

Jul. 2014
Jul. 2014

56

Renewal work for air conditioning

From: Oct. 2014
To: Nov. 201442

From: Jun. 2014
To: Nov. 2014

397

Other Buildings
Total

570

(5) Overview of Financial Performance and Distributions
As a result of the management described above, for the 18th Fiscal Period, DOI recorded 9,764 million yen in
operating revenue, 4,439 million yen in operating income, 3,642 million yen in ordinary income and 3,641 million
yen in net income.
Concerning distributions, to ensure that the cash dividend would be deducted from taxable income (Article
67-15 of the Special Measures Concerning Taxation (Act No. 26 of 1957; including amendments, hereinafter“Special Taxation Measures Act”)), DOI decided to distribute the entire retained earnings at the 18th Fiscal
Period end, excluding fractions of the distribution amount per unit that are less than 1 yen. Accordingly, DOI
declared a distribution of 8,256 yen per unit.

II. Asset Management Report193. Future Management Policy and Tasks(1) Investment Environment
The Japanese economy is expected to recover gradually with the improvement of corporate performance
mainly focusing on export-related companies and public investment as well as a recovery in personal
spending due to the effects of various finance focused economic stimulus measures, centering on the public
works projects and financial policies promoted by the Abe administration, and the large-scale monetaryeasing policy implemented by the Bank of Japan as well as the recovery in overseas economies centering on
advanced countries. However, there still is a need to pay attention to the turmoil in the domestic financial
market which faced the postponement of the consumption tax hike and the turmoil in overseas economies
and financial markets with the emergence of geopolitical risks because they pose potential risks of disrupting
the Japanese real economy and financial environment.
In the office rental market, vacancy rates declined with the boost in demand from the decrease in the
supply of new office buildings and improvement of the employment situation. In addition, rents are anticipated
to continue gradual improvement as an increase in demand for office floor is expected along with the
improvement of corporate performance.
In the office transaction market, the appetite for acquisitions by real estate companies and funds (including
REITs) is expected to be even stronger against the backdrop of the favorable financing environment andexpectations for rents to rise, among other factors.
(2) Management Policy and Tasks(A) Strategy for Managing Existing Properties
Under the above office leasing market conditions, tenants are also expected to be more selective withproperties. Consequently, DOI will carry out operational management under the following policy in an aim
to enhance the competitiveness of existing properties and thereby increase the long-term EPS over the
medium to long term.
(a) Maintain and raise occupancy rates
For existing tenants, strive to reduce vacancy risks through improving the quality of buildings,
equipment and management systems. For new tenants, strive to maintain and raise occupancy rates
through the provision of more comfortable services than competitors by aggressively participating in
the market.
(b) Maintain and raise profitability
Aim to secure stable revenue over the medium to long term through further strengthening good
relationships with existing tenants, as well as proactively tapping the needs of new tenants bydiscerning the market environment.
(c) Lower operational management costs
Strive to lower operational management costs based on maintaining the high level of tenantsatisfaction with office environments. To achieve this, DOI will implement efficient operational
management by leveraging the economies of scale obtained from external growth and reviewing
planned construction work.
(B) Investment Strategy for New Properties
Based on various external growth strategies, DOI will concentrate its investment in buildings with a total
floor area of 2,000m2 or more considering a balance between the financing and purchasing market
situation. In principal, DOI will invest in properties around Tokyo, but will also look into investment incompetitive properties in areas other than Tokyo to diversify investments.
As pipelines, in addition to expanding its own information-sourcing channels, DOI will search forproperties that meet its investment criteria by proactively gathering real estate transaction market
information through expanding partnerships with DREAM and the Sponsor Group, and utilizing theGroup’s extensive network of clients.
During the 18th Fiscal Period, DOI additionally acquired “Azabu Green Terrace” which is situated inTokyo and “Kitahama Grand Building” which is situated in Osaka. DOI will continue to strive to acquire
properties that are in line with the investment strategy described above.

20

(C) Financial Strategy
DOI will conduct disciplined financial management based on the following content.
(a) In principle, control leverage by keeping the ratio of interest-bearing liabilities to total assets (LTV)(based on total asset value) within the range of 40% to 50% at maximum in consideration of thesubstantial LTV (ratio) and other factors.
(b) In principle, diversify the payment date, targeting 30 billion yen as the maximum amount of interestbearing liabilities that shall become due during any single Fiscal Period.
(c) In principle, aim to have long-term loans be at least 70% of total loans.
(d) Diversify lenders, which shall mainly be domestic financial institutions.
(e) Pursuant to its fund management rules, maintain stability in its financial standing by separatingnecessary funds, such as the amount of distributions paid, from working funds.
(D) Schedule of Capital Expenditures
The following table lists major capital expenditures in conjunction with the refurbishment or renewal
work planned for the future on the properties held as of November 30, 2014. Please note that theamounts below include costs that will be recognized as expenses.
Estimated Cost
(millions of yen)
Name of Property(location)

PurposeShinjuku Maynds Tower(Shibuya-ku, Tokyo)

Construction work for renewal of
CVCF and renovation work fordisaster-prevention equipment

From: Oct. 2013
To: Mar. 2015

406

54

261

Shinjuku Maynds Tower(Shibuya-ku, Tokyo)

Renovation work for central
supervisory system

From: Oct. 2013
To: Sep. 2015

297

72

59

Shinjuku Maynds Tower(Shibuya-ku, Tokyo)

Construction work for upgradingof main central supervisorysystem VAV and controller

From: Oct. 2013
To: Sep. 2015

110

33

17

Daiwa Akasaka (Minatoku, Tokyo)

New construction work forentrance on the open space side

From: Jan. 2015
To: May 2015

101

–

–

From: Feb. 2015
To: May 2015

96

–

–

Estimated Period
Total

Daiwa Tsukishima (Chuo- Renewal work for air
ku, Tokyo)
conditioning

Payment
Cumulative
for theamountcurrent
paid
periodII. Asset Management Report21III. Balance Sheets
As of November 30, 2014 and May 31, 2014
(Thousands of yen)

As ofNovember 30, 2014

As of
May 31, 2014

AssetsCurrent Assets:
Cash and cash equivalents [Note 11]17,767,864

22,537,727

Tenant receivables

303,995

292,388

Consumption tax refundable

243,389

135,052

Prepaid expenses

322,520

307,951

Deferred tax assets [Note 9]

1,489

3,729

Other current assets

62,83880,831

Total Current Assets

18,702,095

23,357,678

Land including trust accounts

302,218,997

286,292,278

Buildings and structures including trust accounts [Note 4]

93,148,161

84,489,584

Machinery and equipment in trust accounts

826,879

781,250

Tools, furniture and fixtures including trust accounts

135,401

117,789

Construction in progress including trust accounts

552,091

436,937

Other tangible fixed assets including trust accounts

5,909

5,909

(20,113,897)(18,616,452)

2,713,986

2,713,986

379,487,527

356,221,281

1,072

1,260

113,684

113,684

Long-term prepaid expenses

1,094,350

942,444

Deferred tax assets [Note 9]

104,136

70,134

Deferred investment corporation bond issuance costs

38,282

1,718

Others13,87914,945

1,365,403

1,144,185

399,555,025

380,723,144

Investment Properties, at cost: [Notes 3 and 12]

Less: accumulated depreciation
Leasehold rights including trust accounts
Total Investment Properties, net
Other Assets:
Right of trademark
Lease and guarantee deposits in trust

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

22

(Thousands of yen)

As ofNovember 30, 2014

As of
May 31, 2014

Liabilities
Current Liabilities:
Operating accounts payable

941,245904,316

Short-term debt [Notes 6 and 11]

2,500,000

5,500,000

Long-term debt due within one year [Notes 6 and 11]

16,600,000

29,500,000

336,673

461,153

975

844

–

16,051

Rent received in advance

1,156,701

971,477

Other current liabilities

95,502365,069

Total Current Liabilities

21,631,096

37,718,910

5,100,000

3,500,000

Long-term debt [Notes 6 and 11]

136,600,000

125,200,000

Tenant security deposits including trust accounts [Note 11]

13,325,899

12,443,797

304,938

205,310

155,330,837

141,349,107

176,961,933

179,068,017

219,155,572

198,780,951

3,641,156

3,016,511

222,796,728

201,797,462(203,636)(142,335)(203,636)(142,335)

Total Net Assets

222,593,092

201,655,127

Total Liabilities and Net Assets

399,555,025

380,723,144

Accounts payable – other
Income taxes payable
Accrued consumption taxes

Long-Term Liabilities:
Investment corporation bond [Notes 6 and 11]

Derivative liabilities [Note 11]
Total Long-Term Liabilities
Total Liabilities

Net Assets [Note 5 and 10]
Unitholders’ Equity:
Unitholders’ capital
Units authorized: 2,000,000 units
Units issued and outstanding: 441,000 units
Retained earnings
Total Unitholders’ Equity
Valuation and translation adjustments
Deferred gains or losses on hedges
Total valuation and translation adjustments

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

III. Balance Sheets

23

IV. Statements of Income
For the six months ended November 30, 2014 and May 31, 2014
(Thousands of yen)

Operating Revenues and Expenses
Operating Revenues:
Rental revenues [Note 7]

For the six months ended
November 30, 2014

For the six months ended
May 31, 2014

9,693,133

8,491,130

Other revenues related to property leasing [Note 7]
Gain on sale of investment property [Note 8]
Total Operating Revenues

70,578–92,7583,611

9,763,711

8,587,499

Operating Expenses:
Property-related expenses [Note 7]
Asset management fees
Asset custody fees

4,324,674
802,292
19,654

3,931,000
710,204
18,16371,491
22,67862,68622,026

5,400
78,5295,400
77,2855,324,718
4,438,993

4,826,764
3,760,735

611
638
1,689

932
630
4,068

2,938

5,630

546,61135,642
166,054
46,104
5,514

554,143
47,449151,045–7,939

799,925
3,642,006

760,576
3,005,789–

11,485–

11,485

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

3,642,006

3,017,274

987
(4)

930
4

Total Income Taxes [Note 9]
Net Income
Retained Earnings Brought Forward

983
3,641,023
133

934
3,016,340
171

Retained Earnings at End of Period

3,641,156

3,016,511

Administrative service fees
Trust fees
Directors’ compensation
Other operating expenses
Total Operating Expenses
Operating Income
Non-Operating Revenues and Expenses
Non-Operating Revenues:
Interest income
Reversal of distribution payable
Other non-operating revenues
Total Non-Operating Revenues
Non-Operating Expenses:
Interest expense
Interest expense on investment corporation bonds
Borrowing expenses
New investment units issuance costs
Other non-operating expenses
Total Non-Operating Expenses
Ordinary Income
Extraordinary Income:Gain on donation of tangible fixed asset
Total Extraordinary Income

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

24

IV. Statements of Income

V. Statements of Changes in Unitholders' Equity
For the six months ended November 30, 2014
(Thousands of yen)

Number of
Units

Unitholders’CapitalRetained
Earnings

Deferred Gains
or Losses
on Hedges

Total

Balance as of May 31, 2014

395,798

198,780,951

3,016,511(142,335)

201,655,127

Issuance of new investment units

45,202

20,374,621––

20,374,621

Cash dividends declared––(3,016,378)–(3,016,378)

Net income––

3,641,023–

3,641,023

Net changes of items other thanunitholders’ equity

–

–

–

(61,301)(61,301)

Balance as of November 30, 2014

441,000

219,155,572

3,641,156(203,636)

222,593,092

For the six months ended May 31, 2014
		

(Thousands of yen)

Deferred Gains
or Losses
on Hedges

Number of
Units

Unitholders’CapitalRetained
Earnings

395,798

198,780,951

2,959,948(57,707)

201,683,192

Cash dividends declared––(2,959,777)–(2,959,777)

Net income––

3,016,340–

3,016,340

Net changes of items other thanunitholders’ equity

–

–

–

(84,628)(84,628)

395,798

198,780,951

3,016,511(142,335)

201,655,127

Balance as of November 30, 2013

Balance as of May 31, 2014

Total

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

V. Statements of Changes in Unitholders' Equity

25

VI. Notes to Financial Statements
For the six months ended November 30, 2014 and May 31, 2014

Note 1 – Organization and Basis of Presentation
Organization
Daiwa Office Investment Corporation (former DA Office Investment Corporation: hereinafter, “DOI”) wasestablished on July 11, 2005 as an investment corporation under the Law Concerning Investment Trusts andInvestment Corporations of Japan (hereinafter, the “Investment Trust Law of Japan”) by the founder (the former
daVinci Select; presently, Daiwa Real Estate Asset Management (hereinafter, “DREAM”)).
DOI is an externally managed real estate fund, established as an investment corporation. DREAM, as DOI’s
asset management company, is engaged in acquiring, managing, leasing, and renovating office properties.
Daiwa Securities Group Inc. currently owns 100% of DREAM.
On October 18, 2005, DOI had raised approximately 49,498,710 thousand yen through an initial public offeringof units. Those units are listed on the J-REIT section of the Tokyo Stock Exchange.
As of November 30, 2014, DOI had ownership or beneficiary interests in 46 office properties with approximately
286,089 square meters of rentable office space and had leased office space to 479 tenants engaged in a varietyof businesses. The occupancy rate for the office properties was approximately 97.2%.
Basis of Presentation
The accompanying financial statements have been prepared in accordance with the provisions set forth in theInvestment Trust Law of Japan and its related accounting regulations, and in conformity with accounting
principles generally accepted in Japan (hereinafter, “Japanese GAAP”), which are different in certain respects as
to application and disclosure requirements of International Financial Reporting Standards.
The accompanying financial statements have been restructured and translated into English from the financial
statements of DOI prepared in accordance with Japanese GAAP. Some supplementary information included in
the statutory Japanese language financial statements, but not required for fair presentation, is not presented in
the accompanying financial statements. DOI does not prepare consolidated financial statements, as DOI has no
subsidiaries.

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

As of November 30, 2014
2-64 years
3-23 years
5-18 years

As of May 31, 2014
2-64 years
3-23 years
5-18 years

Costs related to the renovation, construction and improvement of properties are capitalized. Expenditures for repairs
and maintenance which do not add to the value of a property or prolong its useful life are expensed as incurred.
Deferred Investment Corporation Bond Issuance Costs
Deferred investment corporation bond issuance costs are amortized using the straight-line method over therespective terms of the bonds.
New Investment Units Issuance Costs
The issuance costs of new investment units are expensed when incurred.
Income Taxes
Income taxes are accounted for on the basis of income for financial statement purposes. The tax effect of temporary
differences between the amounts of assets and liabilities for financial statements and for income tax purposes isrecognized as deferred taxes.

26

Real Estate Taxes
Real estate taxes are imposed on properties on a calendar year basis and expensed when incurred. In terms of
newly purchased properties, DOI capitalizes a portion of the real estate taxes that relate to a period from the purchasedate of each property until the end of the calendar year as part of the acquisition cost of the relevant property.
Capitalized real estate taxes amounted to 59,352 thousand yen for the six months ended November 30, 2014 and54,857 thousand yen for the six months ended May 31, 2014.
Revenue Recognition
Operating revenues consist of rental revenues including base rents and common area charges, and otheroperating revenues such as utility charge reimbursements, parking space rental revenues and other income.
Rental revenues are generally recognized on an accrual basis over the life of each lease. Utility charge
reimbursements are recognized when earned and their amounts are reasonably estimated.
Hedge Accounting
DOI conducts derivative transactions in order to hedge against risks defined in its Articles of Incorporation
based on its risk management policy. DOI utilizes derivative financial instruments such as interest-rate swap
agreements only for the purpose of hedging its exposure to changes in interest rates. DOI deferred recognitionof gains or losses resulting from changes in fair value of interest-rate swap agreements because its interest-rateagreements met the criteria for deferral hedging accounting.
However, DOI applies special treatment to the interest-rate swap agreements that meet the criteria for suchspecial treatment. Under the special treatment, interest-rate swaps are not remeasured at fair value: instead, thenet amount paid or received under the interest-rate swap agreements is recognized and included in interest
expense. The hedge effectiveness for interest-rate swap agreements is assessed each fiscal period except for
those that meet the criteria of special treatment.
Accounting Treatment of Beneficiary Interests in Trust Assets Including Real Estate
For trust beneficiary interests in real estate, all accounts of assets and liabilities within assets in trust, as well
as all income generated and expenses incurred from assets in trust, are recorded in the relevant balance sheet
and income statement accounts.
Consumption Taxes
Consumption taxes are excluded from transaction amount. Non-deductible consumption taxes are recognized
as expenses.

Note 3 – Schedule of Tangible Fixed Assets of Investment Properties
Investment properties as of November 30, 2014 and May 31, 2014 consisted of the following:(Thousands of yen)Land

As of November 30, 2014
Acquisition
AccumulatedBook value
costs
depreciation
302,218,997– 302,218,997

As of May 31, 2014
Acquisition
AccumulatedBook value
costs
depreciation
286,292,278– 286,292,278

Buildings andstructures

93,148,161(19,611,866)

73,536,295

84,489,584(18,145,866)

66,343,718

Machinery andequipment

826,879(425,370)

401,509781,250(401,380)

379,870

Tools, furniture andfixtures135,401(70,752)

64,649117,789(63,297)

54,492

Construction inprogress

552,091–

552,091

436,937–

436,937

Other tangible
fixed assets

5,909(5,909)–5,909(5,909)–396,887,438(20,113,897)

376,773,541

372,123,747(18,616,452)

353,507,295

including trust accounts

including trust accounts

in trust accounts

including trust accounts

including trust accounts

including trust accounts

Total

Note 4 – Advanced Depreciation for Tangible Fixed Assets Acquired by Government Subsidies, Etc.
Government subsidies of 32,898 thousand yen are deducted from the acquisition cost of the buildings in trust
as of November 30, 2014 and May 31, 2014.
VI. Notes to Financial Statements

27

Note 5 – Net Assets
DOI issues only non-par value units in accordance with the Investment Trust Law of Japan and all of the issue
prices of new units are designated as stated capital. DOI maintains at least 50,000 thousand yen as the minimum
amount of net assets, as required by the Investment Trust Law of Japan.

Note 6 – Short-term debt, Long-Term Debt and Investment Corporation Bonds
Short-term debt, Long-term debt and investment corporation bonds as of November 30, 2014 and May 31,
2014 consisted of the following:(Thousands of yen)Unsecured loans due 2015 to 2022, principally from banks and insurancecompanies with interest rates mainly ranging from 0.4% to 1.1%
2.7% unsecured bond due 2019
0.4% unsecured bond due 2019
1.0% unsecured bond due 2024
Total

As of
November 30,
2014

As of
May 31,
2014

155,700,000

160,200,000–
3,000,000
2,100,000
160,800,000

3,500,000––
163,700,000[Note] The interest rate presented is the spot rate as of November 30, 2014. As for long-term debts which were hedged by interest-rate swaps
for the purpose of avoiding interest rate fluctuation risk, the swapped interest rates are used.

The annual maturities of short-term debt, long-term debt and investment corporation bonds as of November 30,
2014 were as follows:(Thousands of yen)			
Due within one year
19,100,000
Due after one to two years
3,700,000
Due after two to three years
28,250,000
Due after three to four years
17,350,000
Due after four to five years
24,000,000
Due after five years
68,400,000

Note 7 – Rental Revenues and Expenses
Rental revenues and expenses for the periods ended November 30, 2014 and May 31, 2014 were as follows:(Thousands of yen)		For the six months ended
For the six months ended
November 30, 2014
May 31, 2014
A. Revenues from property leasing
Rental revenues
9,693,133
8,491,130
Other revenues related to property leasing
70,57892,758
Total revenues from property leasing
9,763,711
8,583,888
B. Property-related expenses
Consignment expenses
769,361
692,132
Utilities expenses
1,072,401
842,933
Taxes and dues
792,627
705,981Non-life insurance expenses
14,425
12,785
Repair expenses
125,021272,159
Depreciation
1,497,218
1,355,744
Other property-related expenses
53,62149,266
Total property-related expenses
4,324,674
3,931,000
C. Operating income from property leasing [A – B]
5,439,037
4,652,888

Note 8 – Gain and Loss on Sale of Investment Properties
Gain and loss on sale of investment properties for the period ended May 31, 2014 were as follows. No
investment properties were sold during the period ended November 30, 2014.
For the six months ended May 31, 2014
(Thousands of yen)
Daiwa Shibuya SS Building
Proceeds from sale of investment property
3,800,000
Cost of sale of investment property
3,776,563
Other related sale expenses
19,826
Gain on sale of investment property
3,611

28

Note 9 – Income Taxes
DOI is subject to income taxes in Japan. The effective tax rate on DOI’s income based on applicable Japanese
tax law was estimated as 0.03% for the six months ended November 30, 2014 and 0.03% for the six months
ended May 31, 2014. The following table summarizes the significant differences between the statutory tax rates
and DOI’s effective tax rates for financial statement purposes.

Statutory tax rate
Deductible dividends
Others
Effective tax rate

For the six months ended
November 30, 201434.16%(34.15)0.02
0.03%

For the six months ended
May 31, 201436.59%(36.58)0.02
0.03%

DOI was established as an investment corporation under the Investment Trust Law of Japan, and as long as aninvestment corporation distributes to its unitholders at least 90% of earnings available for dividends for a period andother requirements prescribed in the Special Taxation Measures Law of Japan are met, the investment corporation isallowed to deduct the total amount of dividends in calculating its taxable income under Japanese tax regulations.
The significant components of deferred tax assets and liabilities as of November 30, 2014 and May 31, 2014 wereas follows:(Thousands of yen)

As of November 30, 2014
As of May 31, 2014
Deferred tax assets:
Accrued enterprise tax
19
15
Deferred losses on hedges
134,31273,848
Total deferred tax assets
134,33173,863
Deferred tax liabilities:
Deferred gains on hedges
28,706–
Total deferred tax liabilities
28,706–
Net deferred tax assets
105,62573,863
With the Act on Partial Amendment of the Local Taxation Act, etc. (Act No.4 of 2014) and the Local Corporation
Tax Act (Act No.11 of 2014) being promulgated on March 31, 2014, the local corporation tax has been
established and part of the local tax has become a national tax, effective for accounting periods starting on andafter October 1, 2014. In accordance with this amendment, the effective statutory tax rate used to calculate thedeferred income tax assets and liabilities concerning the temporary differences, etc. expected to be reversed in
the accounting periods starting on and after December 1, 2014 has been changed to 34.15%. The effect of thischange is immaterial.

Note 10 – Per Unit Information
Information about net assets per unit and net income per unit as of November 30, 2014 and May 31, 2014 andfor the periods then ended were as follows. The computation of net income per unit is based on the weighted
average number of units outstanding during the period. The computation of net assets per unit is based on thenumber of units outstanding at each period end.
For the six months ended
For the six months ended
November 30, 2014
May 31, 2014
Net assets at period end per unit
504,746 yen
509,490 yen
Net income per unit
8,414.41 yen
7,620.91 yen
Net income per unit is calculated by dividing the net income by the daily weighted average number of investment
units issued and outstanding. The diluted net income per unit is not stated as there are no diluted investment units.
(Note) The basis for calculating the net income per unit is as follows.

Net income (thousands of yen)Amount not available to ordinary unitholders(thousands of yen)
Net income available to ordinary unitholders(thousands of yen)
Average number of units during the period (units)

For the six months ended
November 30, 2014
3,641,023

For the six months ended
May 31, 2014
3,016,340––

3,641,023

3,016,340

432,713395,798

VI. Notes to Financial Statements

29

Note 11 – Financial Instruments(For the six months ended November 30, 2014 and May 31, 2014)(1) Status of Financial Instruments(A) Policy for financial instruments
DOI procures funds through various financing methods (such as borrowings, issuance of investment
corporation bonds, issuance of investment units) for acquisition and renovation of investment properties,
payments of dividends and reimbursement of bank borrowings.
In financing through interest-bearing debt, to secure stable financing capacity and reduce future risk ofrising interests, DOI secures long-term fixed-rate borrowings with well-diversified maturities.
DOI manages surplus funds with safe and highly liquid money claims and securities (in principle,
deposits).
Derivative transactions are conducted only for the purpose of reducing risk of future interest rate
fluctuations.
(B) Types and risks of financial instruments and related risk management system
Proceeds from the financing of debts and investment corporation bonds are used mainly to acquisitionof investment properties and reimbursement of current debts and bonds. While these debts and bonds
are exposed to liquidity risk, DOI manages the risk by maintaining the LTV ratio at low levels, diversifying
maturities, keeping the ratio of long-term debt to total debt at high levels, and diversifying lenders withparticular focus on domestic financial institutions. Bank borrowings with floating interest rates are
exposed to the risk of future interest rate fluctuations and DOI manages that by using derivativetransactions such as interest-rate swap agreements.
DOI evaluates the effectiveness of hedges by comparing the accumulated cash-flow changes ofhedged items and that of hedging items, and then verifies the ratio of both amounts of changes.
Furthermore, DOI omits assessment of hedge effectiveness for the interest-rate swap agreements whichmeet the criteria of special treatment.
Execution and management of derivative transactions have been carried out based on the regulations
defined in the basic policy of risk management.
Security deposits represent funds deposited by tenants, and DOI is exposed to the risk of refunding
deposits in the event that a tenant terminates the contract. However, such risk is limited by reserving
some parts of the funds.
Deposits are used for investing DOI’s surplus funds. These deposits are exposed to credit risks such as
bankruptcy of the depository financial institutions. DOI manages credit risk by restricting the tenor of thedeposit relatively short and setting a minimum credit rating requirement for the depository financial
institutions.
(C) Supplementary explanation for fair value of financial instruments
The fair value of financial instruments is based on their quoted market price, if applicable. When there isno quoted market price available, fair value is reasonably estimated. As certain assumptions are used forthe estimation of fair value, the result of such estimation may differ if different assumptions are used. Also,
the contractual amounts of derivative transactions do not represent the market risk involved in thesederivative transactions.
(2) Estimated Fair Value of Financial Instruments
The book value, fair value and difference between the two as of November 30, 2014 and May 31, 2014 are
as follows. The financial instruments whose fair value is extremely difficult to estimate are excluded from thefollowing table.
(As of November 30, 2014)(Thousands of yen)Book Value
Fair Value
Difference
Cash and cash equivalents
17,767,864
17,767,864–
Total
17,767,864
17,767,864–
Short-term debt
2,500,000
2,500,000–
Long-term debt due within one year
16,600,000
16,603,735
3,735
Investment corporation bond
5,100,000
5,121,660
21,660Long-term debt
136,600,000
136,741,916
141,916
Total
160,800,000
160,967,311
167,311
Derivative transactions(*)(309,242)(309,242)–(*) The value of assets and liabilities arising from derivatives is shown at net value and with the amount inparenthesis indicating the net liability position.

30

(As of May 31, 2014)(Thousands of yen)Book Value
Fair Value
Difference
Cash and cash equivalents
22,537,727
22,537,727–
Total
22,537,727
22,537,727–
Short-term debt
5,500,000
5,500,000–
Long-term debt due within one year
29,500,000
29,506,082
6,082
Investment corporation bond
3,500,000
3,500,000–
Long-term debt
125,200,000
125,287,010
87,010Total
163,700,000
163,793,092
93,092Derivative transactions(*)(216,183)(216,183)–(*) The value of assets and liabilities arising from derivatives is shown at net value and with the amount inparenthesis indicating the net liability position.
Notes:
1. Methods to estimate fair value of financial instruments and derivative transactions
Assets(1) Cash and cash equivalents
As these instruments are settled in short period of time, their fair value and book value are nearly identical.
Therefore, for these items, the book value is assumed as the fair value.
Liabilities(1)Short-term debt, long-term debt due within one year and long-term debt
For short-term debt and long-term debt with floating interest rates, their fair value and book value are nearly
identical and there are no significant changes in DOI’s credit risk after borrowing. Therefore, for these items,
their book value is assumed as their fair value. For short-term debt and long-term debt with fixed interest rates,
their fair value is based on the present value of principle and interest cash flows discounted at the current
interest rate estimated to be applied if similar new debt is entered into. However, the fair value of certain
floating-rate long term debt that qualifies for the special treatment of interest-rate swaps is determined bydiscounting the sum of its principal and interest payments net of any cash flows from the interest-rate swaps.
(2) Investment corporation bond
The fair value of investment corporation bond is based on their quoted market price, if available. When
there is no quoted market price available, their book value is assumed as their fair value, as their fair value
and book value are nearly identical because of floating interest rates and no significant changes in DOI’s
credit risk after issuing the bonds.
Derivative Transactions(1) Derivatives to which hedge accounting is not applied
Not applicable.
(2) Derivatives to which hedge accounting is applied(As of November 30, 2014)
Method of Hedge
Type of Derivative Transactions
Accounting
Deferral hedge
Interest rate swap transactions
accounting method
Receive floating and pay fixedSpecial treatment
rate swap transactions
for interest rate swap Interest
Receivefloating and pay fixedtransactions(Thousands of yen)

Hedged Items Contract Amount(due after one year)
71,400,000
Long-term debt
(64,400,000)

Fair
Value(*)

35,350,000(29,350,000)–(**)

106,750,000(93,750,000)(309,242)

Long-term debt

Total
(As of May 31, 2014)
Method of Hedge
Accounting
Deferral hedge
accounting method
Special treatment
for interest rate swap
transactions
Total(309,242)(Thousands of yen)Interest rate swap transactions
Receive floating and pay fixed

Hedged Items Contract Amount(due after one year)
70,100,000
Long-term debt
(46,100,000)(216,183)

Interest rate swap transactions
Receive floating and pay fixedLong-term debt

35,350,000(32,850,000)–(**)

105,450,000(78,950,000)(216,183)

Type of Derivative Transactions

Fair
Value(*)*The fair value is provided by the financial institution.
**The values of derivatives qualifying for special treatment of interest rate swap transactions are included in that of related long-term debt. Thisis because such swaps are handled together with hedged long-term debt.
VI. Notes to Financial Statements

31

2. Financial instruments whose fair value is extremely difficult to estimate.
Tenant security deposits including trust accounts (with a book value of 13,325,899 thousand yen as ofNovember 30, 2014 and 12,443,797 thousand yen as of May 31, 2014) that have been deposited fromtenants are not marketable and the actual deposit period cannot be reliably determined, thus making it
impossible to reasonably estimate their future cash flows, and therefore, it is considered to be extremely
difficult to estimate their fair value.
3. Redemption schedule for money claims(Thousands of yen)
(As of November 30, 2014)
Due within Due after
Due after
Due after
Due after
Due after
1 year1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years
5 years
Cash and cash equivalents
17,767,864
–
–
–
–
–
Total
17,767,864
–
–
–
–
–
(As of May 31, 2014)
Cash and cash equivalents
Total(Thousands of yen)

Due within Due after
Due after
Due after
Due after
1 year1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years
22,537,727––––
22,537,727––––

Due after
5 years––

4. Redemption schedule for short-term debt, investment corporation bond and long-term debt
(As of November 30, 2014)(Thousands of yen)

Due within Due after
Due after
Due after
Due after
Due after
1 year1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years
5 years
Short-term debt
2,500,000–––––
Long-term debt due within one year 16,600,000
–
–
–
–
–
Investment corporation bond–––
– 3,000,000 2,100,000
Long-term debt
– 3,700,000 28,250,000 17,350,000 21,000,000 66,300,000
Total
19,100,000 3,700,000 28,250,000 17,350,000 24,000,000 68,400,000(As of May 31, 2014)(Thousands of yen)

Due within Due after
Due after
Due after
Due after
Due after
1 year1 to 2 years 2 to 3 years 3 to 4 years 4 to 5 years
5 years
Short-term debt
5,500,000–––––
Long-term debt due within one year 29,500,000
–
–
–
–
–
Investment corporation bond––––
– 3,500,000
Long-term debt
– 8,300,000 18,200,000 19,400,000 21,500,000 57,800,000
Total
35,000,000 8,300,000 18,200,000 19,400,000 21,500,000 61,300,000

Note 12 – Investment and Rental Properties

DOI owns office buildings (including land) for rent in Tokyo and other areas.
The book value, net changes in the book value and the fair value of the investment and rental properties are as
follows.
(Thousands of yen)(For the six months ended November 30, 2014)
Book Value
Fair value as of
As of
Change
As ofNovember 30, 2014
May 31, 2014
during the period(*1)
November 30, 2014
355,783,760
23,151,321
378,935,081
370,600,000(For the six months ended May 31, 2014)
Book Value
As of
ChangeNovember 30, 2013
during the period(*2)
345,046,153
10,737,607(Thousands of yen)

As of
May 31, 2014
355,783,760

Fair value as of
May 31, 2014
342,230,000(Note 1)		 The book value represents the acquisition cost less accumulated depreciation.
(Note 2)		 Significant changes(*1) For the six months ended November 30, 2014, the major reasons of increase are acquisitions of “Azabu Green Terrace”(14,000,000 thousand yen) and “Kitahama Grand Building” (9,481,500 thousand yen). The major reason of decrease isdepreciation (1,497,218 thousand yen).
(*2) For the six months ended May 31, 2014, the major reason of increase is acquisition of “Integral Tower” (15,220,000 thousandyen). The major reasons of decrease are sale of “Daiwa Shibuya SS Building” (3,776,563 thousand yen) and depreciation(1,355,744 thousand yen).
(Note 3)		 The fair values as of November 30, 2014 and May 31, 2014 represent the sum of appraisal values estimated by external real estateappraisers.

Income and loss from investment and rental properties for the six months ended November 30, 2014 and May
31, 2014 are disclosed in Note 7.

32

Note 13 – Transactions with Related Parties(For the six months ended November 30, 2014)
Classification
Parent company, interested party Asset custodian
Name of company, etc. Daiwa Securities Group Inc.
Sumitomo Mitsui Trust Bank, Limited
Location
Chiyoda-ku, Tokyo
Chiyoda-ku, Tokyo
Capital stock247.3 billion yen
342 billion yen
Business description Holding company
Bank
Percentage of voting 13.45%
rights, etc. held bydirectly held in DOI–
related party
29.23%(held in DOI)
indirectly held in DOI
Relationship with
Provision of capital
Provision of capital
related party
Redemption Payment of interest
Payment of interestofexpense on
Nature of transaction investment investment
Repayment of capital
expensecorporation corporation bonds(Note 3)bonds)(Notes 1 and 2)
Amount of transaction 3,500,000 28,278
1,000,000
88,317(thousands of yen)Account–
Long-term debt
Other current liabilities
Balance at end of
period–19,350,000
563(thousands of yen)(For the six months ended May 31, 2014)
Classification
Parent company, interested party Asset custodian
Name of company, etc. Daiwa Securities Group Inc.
Sumitomo Mitsui Trust Bank, Limited
Location
Chiyoda-ku, Tokyo
Chiyoda-ku, Tokyo
Capital stock247.3 billion yen
342 billion yen
Business description Holding company
Bank
Percentage of voting 14.99%
rights, etc. held bydirectly held in DOI–
related party
32.57%(held in DOI)
indirectly held in DOI
Relationship with
Provision of capital
Provision of capital
related party
Payment of interest expense on
Payment of interest
Nature of transaction investment corporation bonds Borrowing of capital
expense(Notes 1 and 2)(Note 3)
Amount of transaction
47,4492,000,000
85,022(thousands of yen)
Investment
Other
Account
corporation
current
Short-term debt Long-term debt Other
current liabilities
bonds
liabilities
Balance at end of period 3,500,000
19,4571,000,000
19,350,000
349(thousands of yen)Consumption taxes are not included in transaction amounts.

(Note 1) Issuance conditions for the investment corporation bonds were decided by analyzing the spread of similar bonds, the difference of
spread between senior bonds and subordinated bonds, and the past track record of similar bonds.
(Note 2) Terms of transactions with interested parties were determined based on the assets manager’s office regulation which was establishedto prevent the conflict of interest.
(Note 3) Terms of transaction were determined based on market trends.

Note14 – Significant Subsequent Events(1) Acquisition of Assets(A) DOI acquired the trust beneficial interest in real estate on December 1, 2014.
Overview of the Asset(a) Type of asset acquired
Trust beneficial interest in real estate(b) Property nameDaiwa Ebisu 4-chome(c) Location
4-9-10 Ebisu, Shibuya-ku, Tokyo
4,135,200 thousand yen(d) Acquisition price(excluding acquisition costs and consumption tax, etc.)(e) Date of agreement
October 16, 2014(f) Date of delivery
December 1, 2014(g) Seller (Note)
Non-disclosed(Note) The seller is a domestic operational company. Its information is not disclosed since consent for disclosure has not been obtained from the seller.

VI. Notes to Financial Statements

33

(B) DOI acquired the trust beneficial interest in real estate on December 3, 2014
Overview of the Asset(a) Type of asset acquired
Trust beneficial interest in real estate(b) Property name
LAQUAS Higashi Shinjuku(c) Location
2-2-6 Okubo, Shinjuku-ku, Tokyo
8,450,000 thousand yen(d) Acquisition price(excluding acquisition costs and consumption tax, etc.)(e) Date of agreement
November 25, 2014(f) Date of delivery
December 3, 2014(g) Seller
Higashi Shinjuku Building Tokutei Mokuteki Gaisha(C) DOI decided to acquire trust beneficial interests in real estate on January 13, 2015
Overview of the Asset(a) Type of asset acquired

Trust beneficial interest in real estate

Trust beneficial interest in real estate(b) Property nameConcept Aoyama

Shinsen Place(c) Location

3-1-30 Jingumae Shibuya-ku, Tokyo

9-1 Shinsen-cho Shibuya-ku, Tokyo(d) Acquisition price9,800,000 thousand yen(excluding acquisition costs andconsumption tax, etc.)

4,800,000 thousand yen(excluding acquisition costs andconsumption tax, etc.)(e) Date of agreement

January 13, 2015

January 13, 2015(f) Date of delivery

March 2, 2015 (expected)

March 2, 2015 (expected)(g) Seller (Note)

Non-disclosed

Non-disclosed(Note) The seller is a domestic special purpose company. Its information is not disclosed since consent for disclosure has not been obtained from the seller.

(2) Sale of Assets(A) DOI sold trust beneficial interests in real estate on February 2, 2015.
Overview of the Asset(a) Type of asset divested

Trust beneficial interest Trust beneficial interest Trust beneficial interestin real estate
in real estate
in real estate(b) Property nameDaiwa Nihombashi
Honcho(c) Sale price (Notes 1 and 2)

Daiwa Ginza 1-chome

Daiwa Kinshicho

15,500,000 thousand yen(d) Date of agreement

January 13, 2015

January 13, 2015

January 13, 2015(e) Date of delivery

February 2, 2015

February 2, 2015

February 2, 2015(f) Purchaser

Hulic Co., Ltd.

Hulic Co., Ltd.

Hulic Co., Ltd.

(Note 1) Excluding settlement amounts of fixed assets tax and city planning tax, as well as consumption tax, etc.
(Note 2) The sale prices for each property have not been disclosed since consent for disclosure has not been obtained from the purchasers as such would affecttheir business plans after the acquisition.
(Note 3) As the sale was completed as planned and the funds received from the sale will be used for the acquisition, described in “(1) Acquisition of Assets (C),” theborrowing determined on January 13, 2015 was cancelled.
There was a special contract that the cancellation shall be possible without incurring any expenses when the borrowing is cancelled.

(B) DOI decided to sale trust beneficial interests in real estate on February 23, 2015.
Overview of the Asset(a) Type of asset divested

Trust beneficial interest in real estate Trust beneficial interest in real estate(b) Property nameDaiwa Tsukiji 616(c) Sale price (Notes 1 and 2)

Benex S-3
6,310,000 thousand yen(d) Date of agreement

February 23, 2015

February 23, 2015(e) Date of delivery

March 5, 2015 (expected)

March 5, 2015 (expected)(f) Purchaser (Notes 3)

Non-disclosed

Non-disclosed(Note 1) Excluding settlement amounts of fixed assets tax and city planning tax, as well as consumption tax, etc.
(Note 2) The expected sale prices for each property have not been disclosed since consent for disclosure has not been obtained from the purchasers as such
would affect their business plans after the acquisition.
(Note 3) The purchaser is a domestic company. Its information is not disclosed since consent for disclosure has not been obtained from the purchaser.

34

(3) Borrowing of Funds(A) DOI borrowed funds on December 1, 2014.
These funds were allocated to acquisition of the property described in “(1) Acquisition of Assets (A)” andits related costs.
LenderBalance
Date of(thousands
loanof yen)Sumitomo Mitsui
Banking Corporation

Dec. 1,
2014

The Bank of TokyoMitsubishi UFJ, Ltd.

Dec. 1,
2014

Mizuho Bank, Ltd.

Dec. 1,
2014

Shinsei Bank, Ltd.

Dec. 1,
2014

Interest rate

1 month1,000,000 Japanese Yen TIBOR+0.35% (Note 1)
1 month1,000,000 Japanese Yen TIBOR+0.30% (Note 1)
1 month1,000,000 Japanese Yen TIBOR+0.325% (Note 1)
3 month1,000,000 Japanese Yen LIBOR+0.35% (Note 2)

Date of Repayment
maturity method

Notes

May 31, Bullet
2023
payment

Unsecured

May 31, Bullet
2022
payment

UnsecuredNov. 30, Bullet
2022
payment

Unsecured

May 31, Bullet
2023
payment

Unsecured(Note 1) Interest payments shall be paid at the end of every month (if any such date is not a business day, it will be the following business day, if such datefalls within the next month, then the preceding business day will be the payment day) and the repayment date. Interest rate is calculated based on the 1month Japanese Yen TIBOR which the Japanese Bankers Association (“JBA”) announces two business days prior to the first day of the applicable period.
(Note 2) Interest payments shall be paid at the end of February, May, August and November (if any such date is not a business day, it will be the following businessday, if such date falls within the next month, then the preceding business day will be the payment day) and the repayment date. Interest rate is calculated
based on the 3 month Japanese Yen LIBOR which the ICE Benchmark Administration (“IBA”) announces two business days prior to the first day of theapplicable period.

(B) DOI borrowed funds on December 3, 2014.
These funds were allocated to acquisition of the property described in “(1) Acquisition of Assets (B)” andits related costs.
LenderBalance
Date of(thousands
loanof yen)Sumitomo Mitsui
Banking Corporation

Dec. 3,2014

The Bank of TokyoMitsubishi UFJ, Ltd.

Dec. 3,2014

Mizuho Bank, Ltd.

Dec. 3,2014

Sumitomo Mitsui Trust
Bank, Limited

Dec. 3,2014

Development Bank ofJapan Inc.

Dec. 3,
2014

Resona Bank, Limited

Dec. 3,2014

Mitsubishi UFJ Trustand Banking
Corporation

Dec. 3,
2014

Interest rate

1 month
1,500,000 Japanese Yen TIBOR+0.35% (Note)
1 month1,000,000 Japanese Yen TIBOR+0.30% (Note)
1 month
1,500,000 Japanese Yen TIBOR+0.325% (Note)
1 month1,000,000 Japanese Yen TIBOR+0.325% (Note)
1,000,000 0.692% (Fixed Rate)
1 month
1,500,000 Japanese Yen TIBOR+0.325% (Note)
1 month1,000,000 Japanese Yen TIBOR+0.275% (Note)

Date of Repayment
maturity method

Notes

May 31, Bullet
2023
payment

Unsecured

May 31, Bullet
2022
payment

UnsecuredNov. 30, Bullet
2022
payment

UnsecuredNov. 30, Bullet
2022
payment

UnsecuredNov. 30, Bullet
2021
payment

UnsecuredNov. 30, Bullet
2022
payment

UnsecuredNov. 30, Bullet
2021
payment

Unsecured(Note) Interest payments shall be paid at the end of every month (if any such date is not a business day, it will be the following business day, if such date falls within
the next month, then the preceding business day will be the payment day) and the repayment date. Interest rate is calculated based on the 1 month
Japanese Yen TIBOR which the Japanese Bankers Association (“JBA”) announces two business days prior to the first day of the applicable period.

VI. Notes to Financial Statements35

VII. Independent Auditors’ Report36

VII. Independent Auditors’ ReportVIII. Statements of Cash Flows [Information Only]
For the six months ended November 30, 2014 and May 31, 2014
(Thousands of yen)

For the six months
ended
November 30, 2014

For the six months
ended
May 31, 2014

Income before income taxes

3,642,006

3,017,274

Depreciation and amortization

1,498,702

1,357,077

Amortization of bond issuance costs

3,009

2,868

New investment units issuance costs

46,104–

Interest expense582,253

601,592(Increase) Decrease in tenant receivables(11,607)

6,850

Increase (Decrease) in accounts payable

60,918(13,793)

Increase (Decrease) in rent received in advance

185,224(5,994)–

3,776,563

Cash payments of interest expense(592,677)(601,109)(Increase) Decrease in consumption taxes refundable(108,337)(135,052)

Other, net(418,762)(36,885)

4,886,833

7,969,391(24,912,162)(15,933,578)–(3,024)

Proceeds from tenant security deposits

1,606,469

1,371,048

Payments for tenant security deposits(724,367)(831,280)(24,030,060)(15,396,834)

Proceeds from short-term debt–

2,500,000

Repayment of short-term debt

(3,000,000)–

Proceeds from long-term debt

17,500,000

28,400,000

Repayments of long-term debt

(19,000,000)(14,900,000)

Proceeds from issuance of investment corporation bonds

5,060,426–

Redemption of investment corporation bonds(3,500,000)–

Proceeds from issuance of new investment units

20,328,517–

Payment of dividends(3,015,579)(2,959,802)

Net Cash Provided by Financing Activities

14,373,364

13,040,198

Net Change in Cash and Cash Equivalents(4,769,863)

5,612,755

Cash and Cash Equivalents at Beginning of Period

22,537,727

16,924,972

Cash and Cash Equivalents at End of Period

17,767,864

22,537,727

Cash Flows from Operating Activities:

Decrease in investment property due to sale

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

Net Cash Used in Investing Activities
Cash Flows from Financing Activities:

The statements of cash flows are not audited by any independent auditor.
Summary of Significant Accounting Policies [Information Only]
Cash and Cash Equivalents
DOI considers all highly liquid investments with original maturity of three months or less to be cash and cash
equivalents.
VIII. Statements of Cash Flows [Information Only]37

IX. Investor Information
History of Investment Unit Price
14,000(units)(yen) 700,000
Investment unit price (left axis)

Trading volume (right axis)

600,000

12,000500,000

10,000400,000

8,000

300,000

6,000

200,000

4,000

100,000

2,000

0

0

2012 2013
Dec. Jan.

Feb.

Mar.

Apr.

May

June

July

Aug. Sept. Oct.

Nov.

2014
Dec. Jan.

Feb.

Mar.

Apr.

May

June

July

Aug. Sept. Oct.

Nov.

Overview of Investment Units and Unitholders (as of November 30, 2014)■ No. of investment units by investor type
Individuals/others
24,046 units (5.5%)

18th
Fiscal Period

146×57■ No. of unitholders
by investor type

Financial institutions
184,044 units (41.7%)

Foreigners 39,517 units (9.0%)

Total: 441,000 units
Securities firms 1,816 units (0.4%)

Other domestic corporations 191,577 units (43.4%)
Individuals/others
23,461 units (5.9%)

17th
Fiscal Period

Financial institutions
161,137 units (40.7%)

Foreigners 19,237 units (4.9%)

Total: 395,798 units

Top Ten Unitholders (as of November 30, 2014)

Financial institutions

53(0.5%)

Other domestic
corporations

182(1.8%)

Foreigners

175(1.8%)

Securities firms

16(0.2%)

Total

9,995

IR Calendar
Number ofUnits Owned

Percentage
Share

January 23, 2015 ・Announcement of financial results for
18th Fiscal Period

1.

Daiwa Investment Management Inc.

128,905 units

29.2%

February 12, 2015 ・Sending of Japanese version Business
Report for 18th Fiscal Period(Statement of Financial Performance)

2.

Japan Trustee Services Bank, Ltd. (Trust Account)

81,286 units

18.4%

February 13, 2015 ・Start paying distributions for
18th Fiscal Period

3.

Daiwa Securities Group Inc.

59,321 units

13.5%

4.

Trust & Custody Services Bank, Ltd.
(Securities Investment Trust Account)

42,518 units

9.6%

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

34,534 units

5.

0

20

6.

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

7.

Nov.
End offiscal period

Aug.

40

60

7.8%

17,933 units

4.1%

The Bank of New York, Non-Treaty Jasdec Account4,297 units

1.0%

8.

Nomura Bank (Luxembourg) S.A.

3,136 units

0.7%

9.

State Street Bank-West Pension Fund
Clients-Exempt

1,937 units

0.4%

10. State Street Bank West Client-Treaty

1,513 units

0.3%

80

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

38

9,569
(95.7%)

Securities firms 1,060 units (0.3%)

Other domestic corporations 190,903 units (48.2%)

Name of Investor

Individuals/others

July

100

Jan.
End offiscal period

Feb.

May

July 2015

・Announcement of financial results for
19th Fiscal Period

August 2015

・Sending of Japanese version Business
Report for 19th Fiscal Period(Statement of Financial Performance)

August 2015

・Start paying distributions for
19th Fiscal Period

Investor Memo
End of fiscal period

May 31 and November 30 of each year

General Meeting of Unitholders

Held at least once every two years

Date for finalizing Unitholders with voting rights
for the General Meeting of Unitholders

Date publicly announced beforehand

Reference date for finalizing payment of
distributions

May 31 and November 30 of each year
(distributions are paid within three months of this reference date)

Listed financial instruments exchangeTokyo Stock Exchange (securities code: 8976)

Newspaper in which notice is posted

Nihon Keizai Shimbun

Manager of Unitholder Registry, etc.

Sumitomo Mitsui Trust Bank, Limited, 1-4-1 Marunouchi, Chiyoda-ku, Tokyo 100-8233

Office handling administrative affairs

Transfer Agency Department of Sumitomo Mitsui Trust Bank, Limited, 2-8-4 Izumi, Suginamiku,
Tokyo 168-0063 Phone 0120-782-031 (toll-free in Japan)

Service counter

Head Office and All branches of the Sumitomo Mitsui Trust Bank nationwide

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

Daiwa Office Investment Corporation

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

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

IX. Investor Information

39

The Daiwa Office Investment Corporation logo symbolizes hospitality with an open door and the desire to be a brightand open investment corporation. We will continue to aim to be a highly-transparent investment corporation that isfurther cherished and trusted by our investors and tenants.