Building a richer future together[Provisional Translation Only]
This English translation of the original Japanese document is provided solely for information purposes.
Should there be any discrepancies between this translation and the Japanese original, the latter shall prevail.

May 9, 2016
REIT Issuer
Ichigo Office REIT Investment Corporation (8975)
1-1-1 Uchisaiwaicho, Chiyoda-ku, Tokyo
Representative: Yoshihiro Takatsuka, Executive Director
www.ichigo-office.co.jp/english
Asset Management Company
Ichigo Real Estate Investment Advisors Co., Ltd.
Representative: Wataru Orii, President & Representative Statutory Executive Officer
Inquiries: Hiroto Tajitsu, Head of Administration & Statutory Executive Officer
Tel: +81-3-3502-4891

Earnings and Dividend Forecast Revisions for the April 2016,October 2016, and April 2017 Fiscal Periods
Ichigo Office REIT has revised up its April 2016 earnings and dividend forecast and its October
2016 and April 2017 earnings and dividend forecasts. Ichigo Office REIT had announced theseprevious forecasts on December 16, 2015 and April 8, 2016, respectively.
1. April 2016 Earnings and Dividend Forecast Revision
OperatingRevenue(million yen)

Operating
Profit(million yen)

Recurring
Profit(million yen)

Net
Income(million yen)

Dividendper Share(yen)

6,346

2,813

2,176

2,175

1,720

6,689

3,184

2,516

2,455

1,730

Difference (B-A)+342+371+339

+279

+10

Change+5.3%+13.1%+15.6%+12.8%+0.5%

Reference:
October 2015 Actual

6,248

2,952

1,854

1,853

1,706

Previous
Announced
Forecast (A)Current
Amended
Forecast (B)Forecast number of shares outstanding at the end of the fiscal period: 1,416,323 shares.
The forecasts presented above are based on certain preconditions. The actual operating revenue,operating profit, recurring profit, net income, and dividend per share may vary due to changes incircumstances. These forecasts should not be construed as a guarantee of such performance orresults.

1

2. April 2016 Earnings and Dividend Forecast Revision Rationale
Ichigo Office REIT is raising its earnings and dividend forecast due to capital gains on four
asset sales in January/March and a reduction in interest expense due to loan repayments using
proceeds from the sales. These gains more than offset an extraordinary loss incurred on repair
expenses for the Ichigo Kumamoto Building due to April’s Kumamoto earthquake.1,2
The revised April 2016 forecast reflects a profit of 397 million yen from three of theJanuary/March asset sales (Ichigo Meieki Building, Ichigo Yokohama Nishiguchi Building, andIchigo Saga Building) and a loss of 54 million yen from the sale of Akita Sanno 21 Building.
Ichigo Office REIT continues to “achieve continuous NOI growth and strengthen the Ichigo
Office brand” as described in Stage V (“Lay Foundation for Sustainable Dividend Growth”) ofits Growth Strategy Roadmap. The forecast April 2016 NOI is now 4,507 million yen, up 30
million yen from the previous forecast, with a 20 million yen NOI decrease from theJanuary/March asset sales exceeded by a 50 million yen NOI increase across Ichigo Office
REIT’s portfolio.
Ichigo Office REIT is also forecasting one-off expenses of 53 million yen linked to theJanuary/March asset sales and loan repayments, and an extraordinary loss of 60 million yen forIchigo Kumamoto Building’s earthquake-related repairs. Nonetheless, strong operating
performance is expected to increase April 2016 recurring profit and net income.
Ichigo Office REIT expects to increase its April 2016 dividend to 1,730 yen, 10 yen above its
previous forecast, resulting in a total dividend paid to shareholders of 2,450 million yen. The
dividend assumes adding 397 million yen in profits from the January/March asset sales to thedividend reserve, which is almost entirely offset by releasing 391 million yen of existing
dividend reserves (331 million yen to offset one-off items that reduced net income during theperiod and 60 million yen of negative goodwill amortization). One-off dividend reserve
reversals include a capital loss and transaction costs on the Akita Sanno 21 Building (71 millionyen), early loan repayment fees (37 million yen), repair costs for the Ichigo Kumamoto Building(60 million yen), and performance fees to the asset management company (162 million yen).

1

For details regarding the January/March asset sales, please refer to the January 28, 2016
release “Sale of Portfolio Asset (Akita Sanno 21 Building),” the March 4, 2016 release “Saleof Portfolio Assets (Ichigo Meieki Building, Ichigo Yokohama Nishiguchi Building),” and theMarch 16, 2016 release “Sale of Portfolio Asset (Ichigo Saga Building).”2
For details regarding the loan repayments, please refer to the February 1, 2016 release “Noticeof Partial Repayment of Existing Loan,” the April 14, 2016 release “Notice of Partial
Repayment of Existing Loans,” and the April 28, 2016 release “Notice of Partial Repaymentof Existing Loan.”23. October 2016 Earnings and Dividend Forecast Revision
Operating
Revenue(million yen)

Operating
Profit(million yen)

RecurringProfit(million yen)

Net
Income(million yen)

Dividendper Share(yen)

6,601

2,946

2,199

2,198

1,850

7,152

3,410

2,407

2,407

1,890

Difference (B-A)+550+464+208+208+40

Change+8.3%+15.7%

+9.4%

+9.4%

+2.1%

Reference:
Initial Forecast1

6,472

2,944

2,301

2,300

1,760

Previous
Announced
Forecast (A)Current
Amended
Forecast (B)Forecast number of shares outstanding at the end of the fiscal period: 1,532,287 shares, which isthe sum of 1,416,323 shares issued and outstanding as of today, plus 110,166 shares to be issued
via public offering and a maximum of 5,798 shares through a underwriter new share allotment(should the over-allotment option be exercised). For details, please refer to today’s release“Issuance of New Shares and Secondary Share Offering.”
The forecasts presented above are based on certain preconditions set forth in “Preconditions for
the October 2016 Earnings Forecast” below. The actual operating revenue, operating profit,
recurring profit, net income, and dividend per share may vary due to changes in circumstancessuch as asset acquisitions and dispositions, tenant turnover, unexpected maintenance and repair
costs and other expenses, changes in interest rates, and the issuance of new shares. Theseforecasts should not be construed as a guarantee of such performance or results. Ichigo Office
REIT will make a forecast revision should there be a substantial discrepancy between theforecast and actual operating results.

4. October 2016 Earnings and Dividend Forecast Rationale
Ichigo Office REIT is acquiring eight office assets as announced in today’s release “Acquisitionof Eight Office Assets.” The acquisition is accretive to Ichigo Office REIT shareholders and will
be financed by proceeds from a public offering, Japanese megabank and other bank loans, andcash-on-hand.1 (For details of the public offering, please see today’s release “Issuance of New
Shares and Secondary Offering.”) Today’s acquisition, along with the January/March asset sales
and the acquisition of five mid-size office assets announced in the April 8, 2016 release“Acquisition of Five Office Assets,” accelerates Ichigo Office REIT’s strategic portfolio
restructuring and will drive further growth in earnings and dividends.
With today’s asset acquisition, Ichigo Office REIT is increasing its October 2016 earnings anddividend forecast, forecasting an increase in operating revenue, recurring profit, operating profit,
net income, and its dividend despite 124 million yen in one-off borrowing- related expenses and
54 million yen in new share issuance expenses. NOI is forecast to increase 615 million yen(+13.7%) relative to the initial October 2016 forecast.
Ichigo Office REIT expects to increase its October 2016 dividend to 1,890 yen, 40 yen per sharehigher than the previous forecast and 130 yen higher than the initial forecast, resulting in a total
dividend paid to shareholders of 2,896 million yen. The dividend includes a dividend reserve
reversal of 490 million yen, a 59 million yen increase from the previous forecast. The increasein the dividend reserve reversal is due to the above-mentioned one-off borrowing-related
expenses (124 million yen) and new share issuance expenses (54 million yen), plus an increasein negative goodwill amortization (19 million yen), that is partially offset by Ichigo Office REITno longer expecting to incur performance fees to the asset management company (139 million3yen) that it had included in its previous forecast for this period.2
1
2

Details of the bank loans will be announced as soon as they are available.
Ichigo Office REIT’s dividend includes a 200 million yen negative goodwill amortization ineach period from October 2016 going forward. This negative goodwill amortization is done
via a dividend reserve reversal, as detailed in the September 7, 2015 release “Ichigo Office
REIT Growth Strategy.”

5. April 2017 Earnings and Dividend Forecast Revision
OperatingRevenue(million yen)

Operating
Profit(million yen)

Recurring
Profit(million yen)

Net
Income(million yen)

Dividendper Share(yen)

6,564

2,942

2,288

2,287

1,860

7,188

3,244

2,503

2,503

1,900

Difference (B-A)+623+302+215+215+40

Change+9.5%+10.2%+9.4%+9.4%+2.1%

Previous
Announced
Forecast (A)Current
Amended
Forecast (B)Forecast number of shares outstanding at the end of the fiscal period: 1,532,287 shares, which isthe sum of 1,416,323 shares issued and outstanding as of today, plus 110,166 shares to be issued
via public offering and a maximum of 5,798 shares through an underwriter new share allotment(should the over-allotment option be exercised). For details, please refer to today’s release“Issuance of New Shares and Secondary Share Offering.”
The forecasts presented above are based on certain preconditions set forth in “Preconditions for
the April 2017 Earnings Forecast” below. The actual operating revenue, operating profit,
recurring profit, net income, and dividend per share may vary due to changes in circumstancessuch as asset acquisitions and dispositions, tenant turnover, unexpected maintenance and repair
costs and other expenses, changes in interest rates, and the issuance of new shares. Theseforecasts should not be construed as a guarantee of such performance or results. Ichigo Office
REIT will make a forecast revision should there be a substantial discrepancy between theforecast and actual operating results.

6. April 2017 Earnings and Dividend Forecast Rationale
Ichigo Office REIT is increasing its April 2017 earnings and dividend forecast due to NOI
growth from today’s eight office asset acquisition. NOI is forecast to be 5,119 million yen, a 518
million yen increase from the previous forecast, despite property and city planning tax paymentson the acquired assets that will be partially incurred during this period. The remainder of thesetax payments will occur in the October 2017 fiscal period.
Ichigo Office REIT expects to increase its April 2017 dividend to 1,900 yen, 40 yen above theinitial forecast, resulting in a total dividend paid to shareholders of 2,911 million yen. The
dividend forecast includes a dividend reserve reversal of 406 million yen, a 58 million yen
increase from the previous forecast, due to an expected increase in negative goodwill
amortization (32 million yen) and increase in performance fees to the asset managementcompany (26 million yen).

4Preconditions for the October 2016 Earnings Forecasts
Preconditions
PeriodOctober 2016 Fiscal Period: May 1, 2016 – October 31, 2016 (184 days)

Portfolio Assets• 86 assets, which is the total of 78 assets currently owned plus 8 newly acquired assets(financed by funds raised via public offering, new bank loans, and cash-on-hand), as
announced in today’s release “Acquisition of Eight Office Assets”.
• The forecast assumes there will be no additional acquisitions or sales through October
2016.
• The total number of portfolio assets may change due to acquisitions or sales.

Number of Shares• 1,532,287 shares: the sum of 1,416,323 shares issued and outstanding as of today plus
110,166 shares to be issued from a public offering and a maximum of 5,798 shares to beissued from a underwriter new share allotment (should the over-allotment option beexercised).
• The forecast assumes there will be no additional new issuance through October 2016.

Operating Revenue• Rental revenue is calculated conservatively based on lease contracts that are in effect as oftoday while taking into consideration such factors as historical rents, the competitiveness ofIchigo Office REIT assets, and market conditions.
• Portfolio-wide occupancy forecast for October 31, 2016: 96.5%

Operating Expenses• For rental expenses, Ichigo Office REIT’s principal operating expenses (other thandepreciation, see below) are calculated based on historical data while taking into
consideration variable expenses.
• Property and city planning taxes: 513 million yen. Pro-rated property and city planningtaxes related to acquisitions are included in acquisition cost and excluded from operating
expenses.
• Building maintenance and repair expenses: 99 million yen. However, expenses may differ
significantly from these estimated amounts for reasons including the variability ofmaintenance and repair expenses, costs due to unexpected building damage, etc.
• Service provider expenses including property management fees, etc.: 657 million yen.
• Depreciation: 921 million yen. Depreciation is calculated using the straight-line method,and includes the depreciation of future additional capital expenditures.
• Actual operating expenses may differ significantly from these assumptions due tounforeseeable factors.

Non-OperatingExpenses• Interest expenses: 553 million yen• Borrowing-related expenses: 396 million yen• Expenses related to the new share issuance: 54 million yen

Borrowings• Total borrowings: 97,911 million yen as of October 31, 2016

Dividend per Share• Dividend per share is based on the assumption that dividends will comply with the dividend
distribution policy stipulated in Ichigo Office REIT’s Articles of Incorporation.
• Dividends: 2,896 million yen, which is the total amount of unappropriated retained earningsof 2,407 million yen plus a dividend reserve reversal of 490 million yen (including 200
million yen corresponding to amortization of negative goodwill).
• The dividend per share amount is subject to change due to such factors as tenant turnover,property changes, unexpected maintenance and repair costs and other expenses, fluctuationsin interest rates, and the issuance of additional shares.

Dividend Distribution
in Excess of Earnings
per Share• Ichigo Office REIT does not plan on making any dividend distribution in excess of earnings
per share or in excess of retained earnings.

Other• The performance forecast is based on the assumption that revisions impacting the forecast
figures will not be made to laws and ordinances, the tax system, accounting standards,
listing rules, rules of the Investment Trust Association, Japan, and that there will be no
unexpected material change in general economic trends, real estate market conditions, etc.

5Preconditions for the April 2017 Earnings Forecasts
Preconditions
PeriodApril 2017 Fiscal Period: November 1, 2016 – April 30, 2017 (181 days)

Portfolio Assets• 86 assets, which is the total of 78 assets owned today plus 8 newly acquired assets(financed by funds raised via public offering, new bank loans, and cash-on-hand), as
announced in today’s release “Acquisition of Eight Office Assets”.
• The forecast assumes there will be no additional acquisitions or sales through April 2017.
• The total number of portfolio assets may change due to acquisitions or sales.

Number of Shares• 1,532,287 shares: the sum of 1,416,323 shares issued and outstanding as of today plus
110,166 shares to be issued from a public offering and a maximum of 5,798 shares to beissued from an underwriter new share allotment (should the over-allotment option beexercised).
• The forecast assumes there will be no additional new issuance through April 2017.

Operating Revenue• Rental revenue is calculated conservatively based on lease contracts that are in effect as oftoday while taking into consideration such factors as historical rents, the competitiveness ofIchigo Office REIT properties, and market conditions.
• Portfolio-wide occupancy for April 30, 2017: 95.9%

Operating Expenses• For rental expenses, Ichigo Office REIT’s principal operating expenses (other thandepreciation, see below) are calculated based on historical data while taking into
consideration variable expenses.
• Property and city planning taxes: 537 million yen. Pro-rated property and city planningtaxes related to acquisitions are included in acquisition cost and excluded from operating
expenses.
• Building maintenance and repair expenses: 118 million yen. However, expenses may differ
significantly from these estimated amounts for reasons including the variability ofmaintenance and repair expenses, costs due to unexpected building damage, etc.
• Service provider expenses including property management fees, etc.: 640 million yen• Depreciation: 923 million yen. Depreciation is calculated using the straight-line method,and includes the depreciation of future additional capital expenditures.
• Performance fees to asset management company: 153 million yen• Actual operating expenses may differ significantly from these assumptions due tounforeseeable factors.

Non-OperatingExpenses• Interest expenses: 552 million yen• Borrowing-related expenses: 189 million yen

Borrowings• Total borrowings: 97,764 million yen as of April 30, 2017.

Dividend per Share• Dividend per share is based on the assumption that dividends will comply with the dividend
distribution policy stipulated in Ichigo Office REIT’s Articles of Incorporation.
• Dividends: 2,911 million yen, which is the total amount of unappropriated retained earningsof 2,504 million yen plus a dividend reserve reversal of 406 million yen (including 200
million yen corresponding to amortization of negative goodwill).
• The dividend per share amount is subject to change due to such factors as tenant turnover,property changes, unexpected maintenance and repair costs and other expenses, fluctuationsin interest rates, and the issuance of additional shares.

Dividend Distribution
in Excess of Earnings
per Share• Ichigo Office REIT does not plan on making any dividend distribution in excess of earnings
per share or in excess of retained earnings.

Other• The performance forecast is based on the assumption that revisions impacting the forecast
figures will not be made to laws and ordinances, the tax system, accounting standards,
listing rules, rules of the Investment Trust Association, Japan, and that there will be nounexpected material change in general economic trends, real estate market conditions, etc.

6Reference: Increase in Dividend as a Result of Strategic Portfolio Restructuring

Post-Strategic Restructuring

1,890 yen

1,900 yen

October 2016
New Forecast

April 2017
New Forecast

1,760 yen

October 2016
Initial Forecast

The October 2016 initial forecast was 1,760 yen, and the first revised forecast was 1,850yen. The April 2017 initial forecast was 1,860 yen.
For the October 2016 initial forecast, please refer to the “Financial Report for the Fiscal
Period Ending October 2015” released on December 16, 2015. For the October 2016
revised forecast and April 2017 initial forecast, please refer to the April 8, 2016 release“Earnings and Dividend Forecast Revision for the October 2016 Fiscal Period andForecast for the April 2017 Fiscal Period.”7