As of July 19, 2018

Daiwa Office Investment Corporation
Earnings Announcement for the 25th Fiscal Period(Fiscal Period ended May 2018)

Securities Code: 8976

Contents
Overview of Daiwa Office Investment Corporation
Topics of the Fiscal Period ended May 2018 (25th FP)
3
Change in Major Portfolio Indices4
Use of 30 Billion Yen of Surplus Funds
5
Changes in Investment Unit Price for the Fiscal Period ended May
2018 onward
6

Section 1

23

Purpose of Large-scale Repair Work and Cases of Construction
Work in the Fiscal Period ended May 201824

Efforts on ESG

26

Section 3External GrowthFiscal Period ended May 2018 (25th Fiscal Period)
Performance Highlights and Forecasts
Highlights of the Fiscal Period ended May 2018 (25th FP)
Highlights of Forecasts for the Fiscal Periods ending November
2018 and May 2019 (26th and 27th FP)
Changes in Dividends
Changes in Rents and Common Area Fees

Properties Subject to Leasing Improvement in the Fiscal Period
ending November 2018 (26th FP)

9
10
11
12

Acquisition/Sale Policy and Status of Deliberation for
Property Acquisitions
Actual Results of Asset Replacement in the Fiscal Period
ended May 2018
Newly Acquired Properties in the Fiscal Period
ending November 2018
Changes in Asset Size and Trading Performance

29
30
31
33

Section 4

Section 2

Financial Strategy

Internal Growth
Leasing Market of Tokyo Office Buildings
15
Analyses of Leasing Income
16
Portfolio Map: Increase and Decrease in Unit Contract Rent
Compared with Previous Fiscal Period
20
Internal Growth Strategies
21
Occupancy Status of Properties Subject to Leasing Improvementin the Fiscal Period ended May 2018 (25th FP)
22

Status of Interest-bearing Liabilities
Unitholders as of the End of the May 2018 (25th) Fiscal Period
Change in Asset Management Fee System
Future Initiatives

35
38
39
40

Appendix

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

1Disclaimer

This material is solely for the purpose of providing information and is not intended for the purpose of offering or
soliciting investment, or as a recommendation to purchase or sell any specific product. Please refer any inquiries
on potential purchases of the investment units of Daiwa Office Investment Corporation to a securities dealer.
This document is not intended to provide information to meet the requirements of Japan’s Financial Instruments
and Exchange Act or Act on Investment Trusts and Investment Corporations, or any associated cabinet orders,cabinet office ordinances, rules, or any rules governing companies listed on the Tokyo Stock Exchange, or any
other applicable rules, nor is it a disclosure document or statement of financial performance prepared inaccordance with the provisions of any of the foregoing.
This document contains forward-looking statements. However, these forward-looking statements are based on
certain assumptions and judgments made using currently available information, and there are a number of
unknown risks and uncertainties. These forward-looking statements are not a guarantee of future performance ormanagement results of Daiwa Office Investment Corporation, and actual results may materially differ from any
explicit or implicit forecasts contained herein.
Although the information contained in this document is the best available at the time of publication, no assurances
can be given regarding the accuracy and certainty of this information. The content of this document may be
modified or withdrawn without prior notice.
Reproduction or use of the contents included in this document without prior approval is prohibited.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

2

Topics of the Fiscal Period ended May 2018 (25th FP)• Conducted large-scale asset replacement worth 117.4 billion yen in total for the
fiscal periods ended May 2018 and ending November 2018

Asset replacement andeffective use of 30 billion
yen of surplus funds• Allocated 23.32 billion yen out of approximately 30 billion yen secured throughasset replacement to the three scenarios (contribution to dividends is expected toincrease by 383 yen)
• Various major indices of the portfolio improved with the above measures• Occupancy rate as of the end of the fiscal period ended May 2018 was 99.0%, thehighest level ever (forecasted occupancy rate as of January 2018: 98.0%)

Steady internal growth• The growth rate of dividend resource remained at a high level with the renewal ofcontracts and occupancy by new tenants

Value enhancement throughlarge-scale repair work

• Strategically implement large-scale repair work by also considering additional
construction work in the case increase in unit rent and reduction of expenses canbe targeted through value enhancement, in addition to appropriate functional
maintenance and recovery of properties.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

3

Change in Major Portfolio Indices Various major indices increased in the portfolio for one and a half years from the fiscal period ended November

2017 through asset replacement, internal growth and effective use of 30 billion yen of surplus funds(Note 1) The sale of Shinjuku Maynds Tower in the 25th FP is a partial sale. Therefore, the remaining owned portion is counted as 1 property in the number of properties owned as of the end of the 27th FP. The number of properties owned as of the end of
the 27th FP reflects only properties for which contracts have been concluded and disclosed.
(Note 2) NOI yield is calculated using the following formula:
Numerator:
Annualized NOI does not include costs related to the Investment Corporation. Annualized actual NOI is used for the end of the 24th FP, annualized forecasted NOI for the 27th FP is used for NOI of assets acquired in the 25th FP and 26th FP,
annualized actual NOI for the 24th FP is used for NOI of assets sold in the 25th FP, and annualized forecasted NOI for the 27th FP is used for the end of the 27th FP.
Denominator:
Period-end book value is used for the book value for the end of the 24th FP and the book value for the end of the 27th FP is calculated by adding assets acquired (scheduled to be acquired) in the 26th FP to the book value for the end of the 25th FP.
(Note 3) The ratio of investment in Shinjuku Maynds Tower is the ratio of Shinjuku Maynds Tower’s acquisition price to the total acquisition price.
(Note 4) NAV per unit= (Unitholders’ capital +Total appraisal value at the end of fiscal period − Total property book value at the end of fiscal period) / Number of investment units issued and outstanding.
NAV per unit as of the end of the 27th FP is calculated based on NAV per unit as of the end of the 25th FP(Note 5) LTV as of the end of the 27th FP is calculated under the assumption total interest bearing liabilities for the 28th FP is 187,950 million yen based on the total assets as of the end of the 25th FP.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

4Use of 30 Billion Yen of Surplus Funds
 30 billion yen of surplus funds incurred with the asset replacement in the 25th FP Theamount of impact on dividend per unit was 383 yen in total as a result of utilizing a total of
approximately 23.32 billion yen
Use of funds

Calculation:
Amount of impact on dividend per unit
Fiscal period ending May 2019 (27th FP)＜Prime Kanda Building: Kanda-Sudacho, Chiyoda-ku (1-minute walk from Iwamotocho Station on the Toei Shinjuku
Line)＞

1. Allot toacquisition of
new properties

Acquisition price (Note 1): 1.8 billion yen, NOI yield: 3.8% (as of acquisition (Note 2)) → 4.2% (mid-term assumption (Note 3))
Structure/Floor: S/RC / B1 / 10F＜Kita-Shinagawa Gotenyama Building: Kita-Shinagawa, Shinagawa-ku (1-minute walk from Kita-Shinagawa Stationon the Keikyu Line)＞
Acquisition price (Note 1): 2.5 billion yen, NOI yield: 4.1% (as of acquisition (Note 4)) → 4.1% (mid-term assumption (Note 5))+146 yen

Structure/Floor: SRC/S / 8F

2. Allot to
repayment ofloans

3. Allot to sharebuybacks
Total＜Repayment/early repayment of a total of 15.35 billion yen to 8 lenders＞• Repayment of a total of 1.85 billion yen to three banks (February 28, 2018)• Early repayment of 2 billion yen to a bank (March 30, 2018)+103 yen• Early repayment of a total of 11.5 billion yen to five banks (April 27, 2018)• Acquisition period: March1, 2018 to May 18, 2018
• Number of acquired units: 5,992 units• Total acquisition amount: 3,675,523,000 yen

Approx. 23.32 billion yen+134 yen+383 yen(Note 1) Excluding expenses related to the acquisition and consumption tax.
(Note 2) Figures calculated by dividing the expected annual balance of payments under the assumed occupancy rate (100.0%) by the acquisition price, based on the lease agreement upon acquisition, etc. while taking into account the accrual of tax and publicdue, etc. are indicated. The figures do not represent forecast figures for the current period or the next period onward.
(Note 3) Figures calculated by dividing the estimated figures for normal operation period (with assumed occupancy rate of 96.0%) after acquisition, obtained by deducting rent business-related expenses from rent revenue assumed under rents over a medium
term, by the acquisition price are indicated. The figures do not represent forecast figures for the current period or the next period onward.
(Note 4) Figures calculated by dividing the expected annual balance of payments under the assumed occupancy rate (96.0%) by the acquisition price, based on the lease agreement upon scheduled acquisition, etc. while taking into account the accrual of tax
and public due, etc. are indicated. The figures do not represent forecast figures for the current period or the next period onward.
(Note 5) Figures calculated by dividing the estimated figures for normal operation period (with assumed occupancy rate of 96.0%) after acquisition, obtained by deducting rent business-related expenses from rent revenue assumed under rents over a medium
term, by the acquisition price are indicated. The figures do not represent forecast figures for the current period or the next period onward.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

5

Changes in Investment Unit Price for the Fiscal Period
ended May 2018 onward The investment unit price of Daiwa Office Investment Corporation outperformed the Tokyo Stock Exchange

REIT Index by conducting measures such as asset replacement and share buybacks

Comparison and Change in Investment Unit Price of Daiwa Office Investment Corporation and Tokyo Stock Exchange REIT Index (Note)(yen)

January 19, 2018

February 28, 2018

Held financial results briefing forthe fiscal period ended November 2017

Announced determination of sharebuybacks

May 23, 2018
Announced the acquisition ofPrime Kanda Building

June 18, 2018
Announced the acquisition of
Kita-Shinagawa Gotenyama Building
December 19, 2017
Announced asset replacement

2017

2018

(Note) The closing price of the Tokyo Stock Exchange REIT Index as of December 1, 2017 is indexed by assuming that it is the same as the closing price of the investment unit price of Daiwa Office Investment Corporation on the same day.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

6

MEMO

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

7Section 1

Fiscal Period ended May 2018 (25th Fiscal Period)
Performance Highlights and Forecasts

Highlights of the Fiscal Period ended May 2018 (25th FP)
Results of the 25th Fiscal Period

FactorItem
 Revenue (rents and common area fees) from properties acquired

Increaseduring period (2 properties)
 Gain on sale of properties during period (net 2 properties)
 Revenue (rents and common area fees) from 53 existing properties+756 million yen+481 million yen+337 million yen(Note 4)

 Dividend income

Decrease

Increase Utilities revenue-178 million yen Repair cost+237 million yen

period (2 properties)

 Tax and public due (general and administrative expenses)+57 million yen Utility Charges

Increase Insurance revenue+137 million yen

 Insurance-related expenses+125 million yen-97 million yen

 Expenses related to early repayment+82 million yen

Dividends per unit is calculated by dividing the amount obtained by subtracting provision for reserve for
reduction entry (403 million yen) from unappropriated retained earnings by the total number of investment
units issued and outstanding.*(Note 1) NAV per unit = (Unitholders’ capital +Total appraisal value at the end of fiscal period − Total property book value at theend of fiscal period) / Number of investment units issued and outstanding*.
(Note 3) NOI Yield (annualized) is calculated based on book value. NOI annualizes properties owned at the end of the period.

-737 million yen

Decrease

Increase(Note 2) Period average occupancy rate is calculated based on occupancies at the end of months during each fiscal period.

+48 million yen

 Revenue (rents and common area fees) from properties sold during⃰

In the current period, the number of investment units issued and outstanding is as follows after the acquisition andretirement of treasury investment units.
497,869 units as of the end of the 24th FP⇒ 491,877 units as of the end of the 25th FP(Reference) Comparison of Forecasts with Results of 25th Fiscal Period

Increase
Decrease Revenue (rents and common area fees) fromproperties (Note 5) Other operating revenue

55 existing Utilities revenue+91 million yen+17 million yen-52 million yen(Note 4) 53 existing properties are the 54 properties as of the end of the 24th FP less the 2 properties acquired and the 2properties sold during the 25th FP. The 3/7 ratio of Shinjuku Maynds Tower is incorporated.
(Note 5) 55 existing properties are the 55 properties held as of the end of the 25th FP (ended May 2018).

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

9

Highlights of Forecasts for the Fiscal Periods ending November 2018 and
May 2019 (26th and 27th FP)
The 26th Fiscal Period (Forecast)
26th FP Forecast
Ending Nov. 2018

FactorDifference from25th FP

Operating Revenue

13,029 million yen- 410 million yen

Operating Expense

6,570 million yen- 191 million yen

Operation Incom e6,459 million yen- 219 million yen

Non-operating revenue―- 139 million yen

Non-Operating Expense

628 million yen- 300 million yen

5,828 million yen- 58 million yen

11,850 yen+ 700 yen

Period End Occupancy Rate

98.0%

-0.8%

Period Average Occupancy Rate (Note 2)

98.7%

+0.4%

NOI Yield (annualized) (Note 3)

4.3%

+0.2%

Net Incom e
Dividend per Unit

27th FP Forecast
Ending May 2019

Difference from26th FP

 Revenue (rents and common area fees) from 53 existing properties+327 million yen Full contribution of revenue (rents and common area fees) from 2+199 million yen(Note 3)

Increase

properties acquired in the previous period
 Revenue (rents and common area fees) from properties acquired
during period (2 properties)
 Utilities revenue

 Revenue (rents and common area fees) from properties sold in the

Decrease

Increaseprevious period (2 properties)
 Gain on sale of properties in the previous period (net 2 properties)
 Dividend income for the previous period

Decrease

Decrease+58 million yen+109 million yen-524 million yen-481 million yen-48 million yen Utilities changes+63 million yen Tax and public due (Rent business-related expenses)

 Repair cost

-62 million yen-49 million yen-75 million yen-63 million yen-25 million yen

 Insurance revenue-137 million yen

 Insurance-related expenses

 Expenses related to early repayment
 Interest expenses-125 million yen-82 million yen-66 million yen

 Revenue (rents and common area fees) from 55 existing properties+13 million yen Tax and public due (general and administrative expenses)

Decrease

The 27th Fiscal Period (Forecast)Item Outsourcing expense Depreciation

Operating Revenue

12,964 million yen- 65 million yen

Operating Expense

6,432 million yen- 137 million yen

Operation Incom e6,531 million yen+ 71 million yen

Decrease Utilities revenue-112 million yen

Increase Depreciation+37 million yen Utilities changes-78 million yen-75 million yen-14 million yen

Non-operating revenue――

Non-Operating Expense

626 million yen- 2 million yen

5,902 million yen+ 74 million yen

12,000 yen+ 150 yen

Period End Occupancy Rate

97.6%

-0.4%

Period Average Occupancy Rate (Note 2)

96.7%

-2.0%

NOI Yield (annualized) (Note 3)

4.4%

+0.2%

Net Incom e
Dividend per Unit

Increase

Decrease

 Full contribution of revenue (rents and common area fees) from 2

properties acquired in the previous period Repair cost

 Tax and public due (Rent business-related expenses)+26 million yen(Note 1) Expected period average occupancy rate is calculated based on occupancies at the end of months during each fiscal
period.
(Note 2) Expected NOI Yield (annualized) is calculated based on the book value for the 25th FP.
(Note 3) 53 existing properties are the 54 properties as of the end of the 24th FP less the 2 properties acquired and the 2properties sold during the 25th FP. The 3/7 ratio of Shinjuku Maynds Tower is incorporated.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

10Changes in Dividends
Changes in Dividends per Unit (forecast/actual)
(yen)

(yen)

6,009

3,903

3,176

3,280

4,100

4,850

5,500

6,250

7,200

7,540

7,820

8,700

9,350

9,850

10,550 10,700 10,770 11,000 11,850

7,400

4,154

2,843

3,180

3,600

4,850

5,350

5,500

6,550

7,300

7,570

8,328

9,000

9,750

9,900

10,560 10,710 10,800 11,400 12,000

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

11Changes in Rents and Common Area Fees
Changes in increase/decrease of period-on-period rents and common area fees (external growth/internal growth)(Million yen)0
(Note) External growth (contribution by properties acquired/disposed excluding during-the-period contributions in the previous FP) indicates the full contribution to the revenue of current fiscal period by the change in rents and common area fees of properties acquiredor sold in the previous fiscal period.
External growth (During-the-period contribution by properties acquired/sold) indicates the full contribution to the revenue of current fiscal period by the change in rents and common area fees of properties acquired or sold in the current fiscal period.
Internal growth (increase/decrease of rents of existing properties) indicates the period-on-period change in revenue (rents and common area fees) of existing properties.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

12

MEMO

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

13Section 2
Internal Growth

Leasing Market of Tokyo Office Buildings
Trend of Office Rent and Vacancy Rate of
5 Central Wards of Tokyo

Leasing Market of Tokyo Office Buildings(Yen/Tsubo)

Rent and vacancy rate of large-scale office buildings (Note 1)of 5 Central Wards of Tokyo

Rent(Yen/Tsubo)

35,00019,877 yen

2.55%

Feb. 2008

33,00031,000(Note)

500,000

25,0006.0%

300,000
200,000
100,000
000-100,000

10.0%
8.0%

400,000

New supply (Grade A, etc.)

New supply (Other)

Floor area of new demands

Vacancy rate

New supply (Entire properties)

2000
2002
2004
2006
2008
2010
2012
2014
2016
2022
2018
2020
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021

(Data): CBRE “Office market medium term forecast 2018-2022(Note) Predicted figures as of July 2018

Jun. 2010
Jan. 2004

Jun. 2016

Office Building Market Medium-term Forecast
Predicted figures

Dec. 2017
Jun. 2017

27,000(Data): Miki Shoji(Tsubo)Rental Market Clock(conceptual chart)

Jun. 2018

29,000Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan. Jan.
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

(Rent)

23,000

1%

2%

3%

4%

5%

6%

7%

8%

Vacancy rate

Average rent and vacancy rate of entire office buildings(Note 2) of 5 Central Wards of Tokyo

20,000Sep. 2008

19,00018,0002.0%

16,000

-2.0%

0%

Rent
(Yen/Tsubo)

4.0%

0.0%

Jul. 2012

Dec. 2011

Sep. 2007

17,00015,000Dec. 2017
Jun. 2017

Jan. 2004

Jun. 2018

Jul. 2012

Jun. 2016

14,000
0%

1%

2%

3%

4%

5%

6%

7%

8%

9% Vacancy rate

(Data): Sanko Estate, compiled by Daiwa Real Estate Asset Management(Tallying method was changed in January 2017 to add tenant solicitation terms data acquired from building owners to theconventional tallies. Since rent was changed to “inclusive of common service fees” from “exclusive of common service
fees” along with this, figures for all periods presented have been modified retrospectively.)(Note 1) Large-scale office buildings: A floor area of 200 tsubos or more.
(Note 2) Entire office buildings: Ranging from large-scale buildings to small-scale buildings (less than 20 tsubos).

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

15

Analyses of Leasing Income (1)― Transition of Occupancy and New Leases / Cancellations Rates ―Transition of New Leases and Cancellations and
Its Reasons (Note 2)

Period-end Occupancy Rate(%)

(Cases)

8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd 23rd 24th 25th 26th 27th
FP FP FP FP FP FP FP FP FP FP FP FP FP FP FP FP FP FP FP
FP

Rate of New Leases and Cancellations (Note 1)

8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd 23rd 24th 25th
FP FP FP FP FP FP FP FP FP FP FP FP FP FP
FP
FP
FP
FP

Cost
Space
Consolidation
Space
Reduction Expansion
Space
Reduction

25th Period

8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd 23rd 24th 25th 26th 27th
FP FP FP FP FP FP FP FP FP FP FP FP FP FP FP FP FP FP FP
FP(Note 1) Transition of rate of new leases and cancellations areas to the total leasable area.

BetterLocation

Other

Total

New Leases

1

23

1

0

1

0

26

Cancellations

3

3

2

8

1

2

19

Previous number of leases 21(Note 2) Excluding new leases and cancellations by residence and warehouse tenants.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

16

Analyses of Leasing Income (2)― Improvement in Basic Strength ― Basic strength (profitability accompanied by realization of internal growth) is steadily improving due tocontract renewals and occupancy of new tenants Increase in rent revenue due to improved basic strength leads almost directly to an increase in dividend resource
Monthly Rent Increase Due to Contract Renewal/Occupancy of New Tenants(Thousand Yen/Month)
30,000Contract Renewal

25,528

Occupancy of new tenants

25,0006,680

20,00014,37615,00010,000

9,020

0

5,862
19th FP766

12,747
3,988

13,47921st FP

17,004
12,521

18,847

22nd FP

5,855

14,371

11,149

8,787

8,759

7,938
20th FP

21,309

7,432

6,438

3,157
5,000

14,24621,80423rd FP

24th FP

25th FP

Simpleaverage
averagefor
Simplefor the19thFPthefiscalperiodonwardended
May 2015
onwardIncrease in Dividend Resource Due to Improved Basic Strength
Simple average for19th FP

20th FP

21st FP

22nd FP

23rd FP

24th FP

25th FP

6 m onths

0.7%

1.0%

0.8%

0.7%

1.4%

1.2%

1.2%

1.0%

(Note 1)

Annualized

1.3%

2.0%

1.7%

1.5%

2.8%

2.4%

2.3%

2.0%

Growth rate of

6 m onths

1.5%

2.1%

1.8%

1.5%

2.9%

2.4%

2.3%

2.1%

Annualized

3.0%

4.3%

3.6%

2.9%

5.8%

4.9%

4.7%

4.2%

Percentage of Total
Rent Revenue

the fiscal period
ended May 2015 onward(rents and common
area fees)

dividend resource(Note 2)

(Note 1) Obtained by dividing the amount of rent increase (increased amount of monthly rent x 6 months) due to the improved basic strength in each fiscal period by rent revenue (rents and common area fees) in the previous fiscal period to the respective fiscal
period.
(Note 2) Obtained by dividing the amount of rent increase (increased amount of monthly rent x 6 months) due to the improved basic strength in each fiscal period by net income in the previous fiscal period to the respective fiscal period.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

17

Analyses of Leasing Income (3)― Changes in Rent Increase/Decrease Rate of Contract Renewal Tenants ―Realized upward rent revisions for
9 consecutive periods

Contract Renewal Area
The 25th Fiscal Period Contract Renewal Tenants

Changes in Rent Increase/Decrease Rate of Contract Renewal Tenants (sections)*The ratio of areas for which contract was renewed in the 25th FP (through May 2018) to the total leasablearea (332,594.35 m²) as of end of Nov. 2017.
(Properties transferred in the 25th FP are included in non contract renewal area)*2(Note) The above indicates rent increase/decrease rate to pre-renewal rents for lease contracts which reached renewed
agreements during each FP.
Rent increase/decrease rate is calculated based on net amount for increased/decreased rents.
*1

4.6%

Status of Upward Rent Revisions(Breakdown of upward revision magnitude for monthly rents in the 25th FP)*1 Of the increase in the 17th FP, 14.1% was due to some tenants’ switching from sublease to master lease agreements and7.9% was thanks to negotiations with tenants.
*2 The decrease in the 25th FP was due to some tenants’ switching from sublease to master lease agreements.

2% or less19%

Contract Renewal Periods (based on leased area)

Forecasts(Note) The ratio of areas scheduled for contract renewal in each period to the total leased area (336,760.45㎡) as of May 31, 2018.

 Shinjuku Maynds Tower

10% or more but
less than 15%
14%

Increase rateof monthly rent
6.6 %(Previous FP: 7.8%)
2% or more but
less than 5%
26%

Properties with rent increase

15% or more
12%

5% or more but
less than 10%29%(Note) Percentage figures are based on total monthly rent.

 Daiwa Nihonbashi Hongokucho Daiwa Shibuya Miyamasuzaka Integral Tower
 LAQUAS Higashi Shinjuku
 Glass City Shibuya
 Daiwa Meguro Square Daiwa Higashi-Nihonbashi

 CONCURRED Yokohama,etc.

Increased amount of monthly rent
12,519 thousand yen/monthThis document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

18

Analyses of Leasing Income (4)― Increase/Decrease in Rent Due to New Leases and Cancellations ―Monthly Rent Increase/Decrease and Increase/Decrease
Rate Due to Occupancy of New Tenants(compared to the previous tenant for the same leasing area)

Average Contract Rent and Market Rent
(Yen/Tsubo)

82.30 82.30
83.52
81.4181.41

80.16(Total Monthly Rent, Thousand Yen)

83,96291,394

83,772
96,294

19,21919,295
19,43719,437

69,26275,94355,05459,042

19,574
19,574

14.9%
9.6%

8.9%

4th 5th 6th 7th 8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd 23rd 24th 25th
FP FP FP FP FP FP FP FP FP FP FP FP FP FP FP FP FP FP FP FP FP FP
End
End

7.2%

(Note 1) Average contract rent is the average of monthly contract rent from tenants at the end ofeach fiscal period.

29,20329,970(Note 2) Unit rent index is the earning rates of unit rent of individual properties indexed with thefigure at the end of the 7th FP as 100.

2.6%

Increase/Decrease in Monthly Contract Rent*
Compared with the End of the Previous Fiscal Period(Million Yen)

Increase by
New Acquisition
Increase by
New Leases(Note) Percentage figures are based on total monthly rent.

Properties with rent increase due to occupancy of
new tenants during 25th fiscal period
 Daiwa Ginza

 Daiwa Akasaka

 Shinjuku Maynds Tower

 Daiwa Kitahama Daiwa Shinagawa North

 Daiwa Ebisu 4-chome

 E SPACE TOWER

 Daiwa Meguro Square,

Increase byRent Revisions

Decrease byRent Revisions

etc.

Increased amount of monthly rent
12,521 thousand yen/month

End of 24th FP
Monthly Contract Rent

Decrease by
Tenants’ Cancellations

Decrease by
Sales of
Properties

End of 25th FP
Monthly Contract Rent

(Note) Monthly Contact Rent is a total of final rent from contracting tenants at the end of the fiscal period. Monthly contract rent
for Shinjuku Maynds Tower was adjusted to 6/7 in the 24th FP and to 3/7 in 25th FP and monthly contract rent for
CONCURRED Yokohama was adjusted to 75/100 in the 25th FP.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

19

Portfolio Map: Increase and Decrease in Unit Contract Rent Compared with
Previous Fiscal Period
5 Central Wards of Tokyo
Comparison with Previous Fiscal Period
Increase and Decrease of Unit Contract Rent

Greater Tokyo

Unit rent increase: 26
The number in ● indicates increase for the consecutive period
2 indicates increase for the second consecutive period)(Ex: ●

Toshima
Ward

Unit rent maintained: 26

Daiwa Higashi-Ikebukuro
Integral Tower 4
Daiwa Ogikubo
Daiwa Meguro Square 3
2
Daiwa Osaki 3-chome

Unit rent decrease: 1

Daiwa
Shinagawa NorthLAQUAS
Higashi Shinjuku

Shinjuku Ward

Shinjuku West Building
Daiwa Nishi-Shinjuku
Shinjuku Maynds Tower 5

Daiwa Misakicho
Daiwa Sarugakucho
4 Daiwa Jimbocho
Daiwa Jinbocho 3-chome
Daiwa
Kanda
Mikuracho
ChiyodaWardshinyon curumu
Daiwa Nihonbashi
Hongokucho 2

Daiwa Kojimachi
4-chome

Shibuya Ward6

E SPACE TOWER 8
Shinsen Place
Glass City Shibuya 2
Square Daikanyama Building

Daiwa Kamiooka

Daiwa Nihonbashi Horidomecho

Daiwa Kayabacho
Build.
Chuo
WardKirin Nihonbashi Building Koto Ward
Daiwa Kyobashi
Daiwa River Gate
Daiwa Hatchobori ekimae 5
4Daiwa Hatchobori ekimae West3
Daiwa Ginza Annex
Daiwa Tsukijiekimae
Daiwa Aoyama
Daiwa Ginza 10
Daiwa Minami Aoyama
Daiwa Tsukiji
Daiwa
Shibuya Miyamasuzaka
Daiwa
Shimbashi 510
6
Daiwa Nishi-Shimbashi 3
Daiwa Tsukishima
Daiwa Onarimon
Daiwa Jingumae

Daiwa SHIBUYA EDGE

Daiwa Higashi-Nihonbashi
Daiwa Kodenmacho

Daiwa Azabudai

Minato Ward

Daiwa Ebisu 4-chomeTokyo

Daiwa Akasaka

Daiwa A Hamamatsucho
Daiwa Shibadaimon
Daiwa Shibaura

Daiwa Azabu Terrace
Daiwa Kitahama

2

Regional Cities

Shinagawa
Ward

As of May 31, 2018

(Note) Properties acquired or sold in the 25th FP are excluded from the target.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

20Internal Growth Strategies
Continuous Internal Growth andMaximization of Asset Value through “Bonji-Tettei”

Office Management Team (7 members)
Aims at maximizing asset value by means of specialist groups headed by personnel assigned toeach property in the Investment Corporation’s portfolio.

 Accurate understanding of the leasing market

Grasp ofpresent
situations

 Grasping of needs and trends of occupying

Hiroshi Udagawa

Takafumi Ushiku

Kotaro Ishii

Jun Arai

Asset management work history:
11 years 10 months

Asset management work history:
13 years 8 months

Asset management work history:
12 years 1 month

Asset management work history:
12 years 1 monthtenants through regular visits In-depth understanding of property features
 Information gathering from brokers

Activities forinternal growth Implementing tenant satisfaction surveys

and proposing improvement measures Periodical property examination

 Maintenance of a stable occupancy rate by

Realization ofinternal growth

promptly filling vacancies
 Realization of stable management throughsolid relationship with tenants
 Securement of revenue based on wellplanned management

Chie Kamimura

Yuuki Kobatake

Jun Iwasaki

Asset management work history:
11 years 11 months

Asset management work history:
5 years 7 month

Asset management work history:
1 year 7 month

Construction Management Team (5 members)
Engineering: Formulation and implementation of construction planning of the assets.

Koji Ozeki

Naoki Murayama

Kazuyoshi Ono

Takahiro Hirabayashi

Junpei Takaya

Asset management work history: Asset management work history: Asset management work history: Asset management work history: Asset management work history:
12 years 0 months
2 years 11 months
11 years 6 months
3 years 0 months
5 years 0 months

Aims to maximize asset value(Note) “Asset management work history” is the number of years engaged in the relevant work (as of end of May 2018) and does
not indicate the number of years employed at the asset management company.

Investment Planning Team (3 members)
Middle office work: Budget and performance management for the portfolios

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

21

Occupancy Status of Properties Subject to Leasing Improvement in
the Fiscal Period ended May 2018 (25th FP)
Daiwa Kyobashi(Acquisition Price: 3,460 million yen)

Daiwa Jinbocho 3-chome(Acquisition Price: 3,550 million yen)

Located a 3-minute walk from
Hatchobori Station on the JR Keiyo Lineand Tokyo Metro Hibiya Line as well as
a 6-minute walk from Kyobashi Stationon the Tokyo Metro Ginza Line.



Visibility is excellent as the property is
located at the intersection of Kajibashi
Dori street and Heisei Dori street.



A large-scale renovation was
implemented in 2005.



Located a 2-minute walk from Jimbocho
Station on the Tokyo Metro Hanzomon
Line and the Tokyo Municipal Subway
Shinjuku Line and Mita Line as well as a
3-minute walk from Kudanshita Station on
the Tokyo Metro Hanzomon Line andTokyo Municipal Subway Shinjuku Line.

The property is located along Yasukuni
Dori street and has a stylish exterior
covered with whole surface glass sash
which makes it highly visible.

Location

Hatchobori, Chuo-ku, Tokyo

Location

Kanda Jinbo-cho, Chiyoda-ku, Tokyo

Site Area

596.19 m²

Site Area

500.05 m²

Structure

SRC

Structure

S

Floor

B1/8F

Floor

9F

Use

OfficeUseStore/officeTotal Floor Area

4,069.15 m²

Total Floor Area

3,496.44 m²

Construction Date

October 1974

Construction Date

February 2010

Occupancy rate (%)

100.0
90.0

May
'17/5
2017

Aug.
'17/8
2017

Nov.
'17/11
2017

Feb.
'18/2
2018

100

88.1

80
May
'18/5
2018

 The Property is located near Tokyo Station and successfully obtained

expansion needs from IT companies as a result of utilizing thetransportation convenience of being accessible to multiple lines andtargeting needs for relocation and nearby sub-offices.

 Occupancy rate as of the end of May: 100%

Occupancy rate (%)

90

87.9

80.0
70.0

100.0

99.5

70

May
'17/5
2017

Aug.
'17/8
2017

Nov.
'17/11
2017（88.1）

Feb.
'18/2
2018

May
'18/5
2018

 The Property is located near Otemachi and successfully received

applications for occupancy from IT companies in December byshowcasing the transportation convenience of being accessible tomultiple lines, superior building age and high grade (100%occupancy). Although a tenant moved out in April, the occupancy
rate was maintained at 100% without downtime.

 Occupancy rate as of the end of May: 100%

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

22

Properties Subject to Leasing Improvement in
the Fiscal Period ending November 2018 (26th FP)
Daiwa Minami Aoyama(Acquisition Price: 4,550 million yen)

CONCURRED Yokohama(Acquisition Price: 38,100 million yen)

Located a 5-minute walk from
Gaiemmae Station on theTokyo Metro Ginza Line

A property located in an areawith local brand strength as
the forefront of culture andfashion where fancy shops
and cafes stand in line, andpreferred by tenants focusing
on design and trends.

Square Daikanyama(Acquisition Price: 2,280 million yen)

Located a 5-minute walk from
Yokohama Station where 12
lines are available including
the JR lines.



Located about a 7-minute
walk from Daikanyama
Station on the Tokyu Toyoko
Line.



The Yokohama East Exit
Area where the property is
located has higher officestock quality than the
Yokohama West Exit Area
where small and medium
buildings concentrate andtransportation convenience isevaluated higher than the
Minato Mirai Area as it offers
access to Yokohama Station.

Demand from various
companies including foreigncompanies focusing on arelaxing work environment,
centering on IT companies
located in the Shibuya area inlarge number, are assumed.

Location

Minami-Aoyama, Minato-ku, Tokyo

Location

Kinko-cho, Kanagawa-ku, Yokohama-shi,
Kanagawa

Location

Daikanyamacho, Shibuya-ku, Tokyo

Site Area

963.12 m²

Site Area

7,140.99 m²

Site Area

503.72 m²

Structure

S/SRC

Structure

S/SRC

Structure

S

Floor

B2/5F

Floor

B1/20F

Floor

6F

Use

Office/parking

Use

Office/store/assembly hall/parking

Use

Office/store

Total Floor Area

4,379.34 m²

Total Floor Area

53,772.50 m²

Total Floor Area

1,989.40 m²

OfficeOccupancy Rate

84.8% (as of May 31, 2018)⇒ 100.0% (Jun. 2018)

Occupancy Rate

93.2% (as of May 31, 2018)

Occupancy Rate

100.0% (as of May 31, 2018)⇒ 0% (scheduled for Feb. 2019)

Construction Date

September 1990

Construction Date

February 2008

Construction Date

March 2001

 Having strength in its suitably refined design in Aoyama and its

stately appearance. Succeeded in grasping and smoothly taking in
the needs for floor expansion in daily communication with tenants.

 Concluded contract with a downtime of about 2 weeks.

 Needs for visit-type office and business base due to its locational

characteristic of being located near Yokohama Station wheremultiple lines are available and needs for integration and relocation
due to sizable floor area are assumed.

 Aimsfor early conclusion of contracts by utilizing FR whennecessary and maintaining unit price.

 Needs for leasing the entire building from companies focusing on

the image and sensitivity of fashion at refined towns such as
apparel, advertising and design companies, industries that tend toconcentrate at specific regions in the Shibuya area including
foreign companies and telecommunication companies, andeducational institutions are assumed.

 Aims to appeal the building which can be leased in its entirety andtake in needs, in addition to the scarcity of having approximately
500 tsubos of vacant floors, while the vacancy rate is decreasing in
the Shibuya area and its surrounding areas.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

23

Purpose of Large-scale Repair Work and Cases of Construction Work in the
Fiscal Period ended May 2018
Purpose of large-scale repair work

Cases of construction work in the fiscal period ended May 2018
Integral Tower• Established medium- to long-term plans for the purpose ofmaintaining and restoring the functions of properties as well
as examined the following items and conducted large-scale
repair work in a timely and appropriate manner upon
considering construction work.
1.

 Conducted renewal work changing from central toindividual air conditioning system
 Realized rent increase by fulfilling tenant needs with
the improvement of convenience in the use of air
conditioners by tenants.
Lead to the reduction of utility charges of owners.

Cost reduction

 Construction work leading to the reduction of owner cost with the
reduction of utility charges by renewing air conditioners andutilization of reused water facilities
2.

Response to tenant needs

 CS construction work for improving environment of tenants including
air conditioners and toilets

4.

 Improvement of profitability was evaluated andincrease in appraisal value was also realized.

Value enhancement

 Construction work aiming to improve future profitability with thestrengthening of competitiveness of properties including renewal of
air conditioning facilities
3.

Value enhancement through renewal work of
air conditioners

Impact on unit rent

Impact on appraisal value⇒ Realized rent increase exceeding the increasein market unit price (large-scale buildings in the
23 wards of Tokyo) with the renewal work of air
conditioners.

⇒ Appraisal value increased by 4.1% from the endof the previous period as of the end of the 25th
Fiscal Period (no change in cap rate).
Contributed to the improvement of property
value with the improvement of profitability.

■ Integral Tower■ Large-scale buildings in the 23 wards of Tokyo* End of the 21st FP = 1

Response to qualitative improvement of the environment

 Construction work leading to the improvement of environmental
performance including the introduction of green leasing (installationof LED lighting in areas exclusively occupied by the tenant)5.

Response to social changes

 Construction work responding to social changes including IT-related
facilities and barrier-free layout

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

24Cases of Construction Work in the Fiscal Period ended May 2018 (2)Daiwa Kanda East

Value enhancement through construction work for changing use

 The expected mid-term NOI yield (4.5%) is calculated by assuming that the 9th floor isvacant as the 9th floor was used as a residence upon acquisition (January 2018).
 Conducted construction work for changing the 9th floor into a leasable office floor from
June to July 2018. Expected to be operated as an office during November 2018.
 The expected mid-term NOI yield is expected to increase from 4.5% (assumed
occupancy rate 90.4%) to 4.9% (assumed occupancy rate 98.1%) with this valueenhancement work.

Residential

Change of use

OfficeCollection period of expenses:
approx.3.3 years[9F floor layout]

Cost reduction with the utilization of unused water (utility charges)
Shinjuku Maynds Tower

Daiwa River Gate

• Reduced service water consumption by utilizing
rainwater as water for washing toilets and integrating
reused water facilities.

• Reduced service water consumption and improved the efficiency of water usage by using surplus drainage
in humidification for outdoor air conditioner on the rooftop.

Cost comparison(Million Yen)

Unused300
250

Existing

200

Expected value

Installed filtration deviceof unused water

Cost comparison(Million Yen)
35
30

Existing

25

Expected value

20

150

15

100

10

50

5
0

0
1st year

2nd year

3rd year

4th year

5th year

Reduced approximately 140 million yen of costs in five years(expected to reduce 28 million yen of costs per year)

1st year

2nd year

3rd year

4th year

5th year

Reduced approximately 21.5 million yen of costs in five years(expected to reduce 5.1 million yen of costs per year)

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

25

Efforts on ESG
Efforts for improving the environment surrounding the building<Before>Daiwa River Gate

Directly under the lighting: 1 lux<After>Directly under the lighting: 200 lux• Installation of Solar Wind Street LightIssue
The stairs under the bridge and the passage on the side of theriver are dark with low illuminance only with the existing lighting
Stairs: 1 lux

Measures

Stairs: 10 lux

Illuminance increased from 1 lux to 200 lux
at the portion directly under the lighting at
the passage on the side of the river and from
1 lux to 10 lux at the stairs, contributing to
the improvement in the environment
surrounding the building including crime
prevention.
Moreover, illuminance was improved at thestairs to clearly identify the difference in level.

Improved illuminance by installing solar wind street lights which
utilize strong winds and sufficient sunlight of the location near ariver, which also leads to natural renewable energy usage.

Progress in introduction of green leasing
Ratio of Areas with LED Lighting Installed

Shinjuku Maynds Tower(Forecast) As part of measures to protect the environment and raise tenantsatisfaction, the Investment Corporation has taken initiatives in which it
concludes a green leasing agreement with tenants and promotes
installing LED lighting in areas exclusively occupied by the tenants at
Shinjuku Maynds Tower since 2014.
 Around 80% of areas exclusively occupied by tenants is expected tohave LED lighting in the fiscal period ending November 2018.

Coexistence with Local Communities
Shinjuku Maynds Tower• Shinjuku-Minami GREEN LABYRINTH[Period] March 30, 2018 to April 1, 2018
Conducted an exhibition of books concerning biodiversity and environment of the United Nations, a performance of
acoustic instruments on stage without using power, and a charity of books that have been read at houses and offices at a
public open space of Shinjuku Maynds Tower and two Suica’s Penguin Parks.
This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

26

MEMO

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

27Section 3External Growth

Acquisition/Sale Policy and Status of Deliberation for Property Acquisitions
Acquisition/Sale Policy







Distribution Chart of Portfolio Properties

Places priority in the five central wards of Tokyo and equivalent area.
Thoroughly select properties in view of actual demand toward
location (distance to station, station power, crowd attraction,
surrounding environment), building specs, etc.
Target properties to improve growth potential and profitability ofexisting portfolio.
Invest in buildings less than 25 years of building age.
Consider replacements when necessary in consideration of futurecompetitiveness, profitability, etc. of properties.

Building Age (Year)

Sourcing Strategy Capitalizing on Status as Non-Real
Estate Sponsored REIT
Secure a sourcing route across a wide range by capitalizing on status
as an independent style REIT and establishing strong relations withbusiness companies, financial institutions, real estate brokers, etc.
 Target optimum expansion of portfolio based on in-depth data
analysis upon careful selection from among the wide-ranging
information on properties that comes from diverse sources.


Number of Properties Reviewed for Acquisition*Number of gross proposals.

Distance to station (minutes)
This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

29

Actual Results of Asset Replacement in the Fiscal Period ended May 2018
Total acquisition amount2 properties
42,300 million yen
CONCURRED Yokohama(75/100 of quasi co-ownership)

Total sales amount2 properties
70,800 million yen
Shinjuku Maynds Tower

Daiwa Kanda East (Note 1)(3/7 of co-ownership)

Daiwa Meiski

Asset replacement

Acquisition Date

January 11, 2018

January 12, 2018

Acquisition Price

38,100 million yen

4,200 million yen

Appraisal Value (Note 2)

39,300 million yen

5,000 million yen

Location/
Distance from Station

Kinko-cho, Kanagawa-ku,
Yokohama-shi, Kanagawa/
5.0 minutes

Construction Date/
Building Age (Note 3)
NOI yield (Note 4)

Transfer Date

February 28, 2018

December 20, 2017

42,300 million yen

Transfer Price

62,500 million yen

8,300 million yen

70,800 million yen

44,300 million yen

Appraisal Value (Note 5)

62,500 million yen

7,990 million yen

70,490 million yen

Kanda Higashi Matsushitacho,
Chiyoda-ku, Tokyo/
2.0 minutes

Location/
Distance from Station

Yoyogi, Shibuya-ku, Tokyo/
1.0 minute

Meieki-Minami, Nakamura-ku,
Nagoya-shi, Aichi/
7.0 minutes

February 29, 2008
/10.2 years

February 16, 2005
/13.2 years

Construction Date/
Building Age (Note 3)

September 23, 1995
/22.7 years

December 20, 2007
/10.4 years

4.0%

4.4％

NOI yield (Note 6)

3.0%

4.５％

4.1％

3.1％

(Note 1) “Nippon Manpower Building” was renamed “Daiwa Kanda East Building” as of July 1, 2018
(Note 2) As of December 1, 2017
(Note 3) As of May 31, 2018
(Note 4) Figures calculated by dividing the expected annual balance of payments under the occupancy rate as of the acquisition date by the acquisition price, based on the lease agreement upon acquisition, etc. while taking into account the accrual of tax
and public due, etc. are indicated.
(Note 5) As of November 30, 2017. The appraisal value of Shinjuku Maynds Tower is calculated by regarding 6/7 of co-ownership as equivalent to 3/7.
(Note 6) Figures calculated by dividing the NOI for the fiscal period ended November 2017 by the transfer price are indicated.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

30

Newly Acquired Properties in the Fiscal Period ending November 2018 (1)Acquisition

Prime Kanda Building

Acquisition price:
Acquisition date:

1,800 million yen
June 7, 2018

Transportation access• The Property is a 1-minute walk from Iwamotocho Station on the Toei Subway Shinjuku Line, a 7minute walk from Akihabara Station on the JR Yamanote Line and Keihin Tohoku Line, a 4-minute
walk from Akihabara Station on the Tokyo Metro Hibiya Line, an 8-minute walk from Kanda Station on
the JR Yamanote Line, Keihin Tohoku Line and Chuo Line as well as a 6-minute walk from Kanda
Station on the Tokyo Metro Ginza Line. As such, the area is highly convenient for transportation.
Property overview• The Property has 10 floors above ground and one below with a gross floor area of 2,435.80 m2 and aleasable area of approximately 70 tsubos per floor is secured. It is equipped with an OA floor,
individual air conditioning and other facilities. Since the office space is without pillars, flexible layout
and efficient use is possible.
• The property is 27 years old but is maintained and managed appropriately and is considered to beable to draw the attention of potential tenants to its excellent image within the area where there aremany office buildings that are 30 years old or older.

Location/Distance from Station

Construction Date
/Building Age

Structure/Floor

Occupancy Rate
Upon Acquisition (Note 2)

Appraisal(Note 1) As of May 1, 2018

Kanda-Sudacho, Chiyoda-ku, Tokyo
1.0 minute

Appraisal Value

August 30, 1990
27.7 years*

Land area(right of site)

Building area(compartmentalized
ownership)

S/RC / B1 / 10F

100.0% (as of acquisition)

Number of Tenant

NOI Yield

Occupancy Rate

3.8%

100.0%NOI Yield

Occupancy Rate

4.5%

95.0%

Mid-term (Note 3)

Depreciation (Note 4)

1,940 million yen (Note 1)
Site area of entire building

302.42 m²

Ratio of right of site to beacquired by theInvestment Corporation

1,519,380/1,814,520(approx. 83.73%)

Total floor area of entire
building

2,435.80 m²

Floor area of exclusive
space and co-ownershipinterest of common space
to be acquired by theInvestment Corporation

Floor area of exclusive
space:1,716.51㎡
Co-ownership interest ofcommon space: Approx.
77.27％

6 (as of acquisition)NOI Yield

Occupancy Rate

4.2%

96.0%

(Note 2) Figures calculated by dividing the expected annual
balance of payments under the assumed occupancy rate
(100.0%) by the acquisition price, based on the leaseagreement upon acquisition, etc. while taking into
account the accrual of tax and public due, etc. areindicated. The figures do not represent forecast figures
for the current period or the next period onward.
(Note 3) Figures calculated by dividing the estimated figures fornormal operation period (with assumed occupancy rateof 96.0%) after acquisition, obtained by deducting rent
business-related expenses from rent revenue assumed
under rents over a medium term, by the acquisition priceare indicated. The figures do not represent forecast
figures for the current period or the next period onward.
(Note 4) Depreciation indicates a figure obtained by dividing thetotal amount of depreciation (6month equivalent)
expected to be posted upon property acquisition anddepreciation (for 6 months) expected to be posted in thefollowing fiscal period by the acquisition price. The
figures do not represent forecast figures for the current
period or the next period onward.
* As of the end of May 2018

0.5%

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

31

Newly Acquired Properties in the Fiscal Period ending November 2018 (2)Acquisition

Acquisition price:
Acquisition date:

Kita-Shinagawa Gotenyama Building

2,500 million yen
September 13, 2018

Transportation access• The Property is a 10-minute walk from Shinagawa Station on the JR Yamanote Line, JR Keihin
Tohoku Line and JR Tokaido Line and a 1-minute walk from Kita-Shinagawa Station on the Keikyu
Line.
• The “Kita-Shinagawa” area where the Property is located has a large number of high-rise buildings
due to redevelopments and is adjacent to the Shinagawa Port South Exit area, which has developed
remarkably as a business area in recent years, and the Osaki area where large-scale office buildings
with a high level of equipped facilities are supplied. As for office demand in the “Kita-Shinagawa” area,
it is considered that needs for headquarters, branches and business offices in Tokyo from companies
developing businesses nationwide and emphasizing wide-area traffic convenience as well as demandfor back-offices from companies that have bases in large buildings in both areas can be expected.
Property overview• The Property has eight floors above ground with a total floor area of 2,897.64 m2 and a leasable areaof approximately 100 tsubos per floor is secured. It has 2,550 mm of typical floor celling height, 50
mm of OA floor and facilities including individual air conditioners. It has rectangle-shaped (roughly
regular-shaped) rental spaces with a side core design, thus offering excellent layout flexibility andusability.
Location/Distance from Station

Kita Shinagawa Shinagawa-ku, Tokyo
1.0 minute(Note 1) As of June 1, 2018

Appraisal Value

2,620 million yen (Note 1)

Construction Date
/Building Age

July 20, 1992
25.8 years*

Site Area

602.41 m²

Structure/Floor

SRC/S / 8F

Total Floor Area

2,897.64 m²

Occupancy Rate

86.2% (as of acquisition)

Number of Tenant

4 (as of acquisition)NOI Yield

Occupancy Rate

Upon Acquisition (Note 2)(Note 2) Figures calculated by dividing the expected annual
balance of payments under the assumed occupancy rate
(96.0%) by the acquisition price, based on the leaseagreement upon acquisition, etc. while taking into
account the accrual of tax and public due, etc. areindicated. The figures do not represent forecast figures
for the current period or the next period onward.

NOI Yield

Occupancy Rate

4.1%

96.0%

Mid-term (Note 3)
4.1%

96.0%

NOI Yield

Occupancy Rate

4.5%

96.0%

Appraisal

Depreciation (Note 4)

0.5%(Note 3) Figures calculated by dividing the estimated figures fornormal operation period (with assumed occupancy rateof 96.0%) after acquisition, obtained by deducting rent
business-related expenses from rent revenue assumed
under rents over a medium term, by the acquisition priceare indicated. The figures do not represent forecast
figures for the current period or the next period onward.
(Note 4) Depreciation indicates a figure obtained by dividing thetotal amount of depreciation (6month equivalent)
expected to be posted upon property acquisition anddepreciation (for 6 months) expected to be posted in thefollowing fiscal period by the acquisition price. The
figures do not represent forecast figures for the current
period or the next period onward.
* As of the end of May 2018

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

32

Changes in Asset Size and Trading Performance
Aim to Achieve Medium-Term Goal Asset Size of 500 Billion Yen

500.0

445.7

458.3

467.7

469.3

469.3
439.4

413.2
387.5
352.7

364.0

332.0
313.2

311.3

265.0

269.1

278.1

314.9

287.3

40.6%

43.0%

44.3%

Acquisition Property• Daiwa Shibuya Dogenzaka• Daiwa Akasaka• Daiwa Shibuya Miyamasuzaka

Acquisition Property• E SPACE TOWER
Acquisition Property• Daiwa Kayabacho• Daiwa Jinbocho 3-chome

Acquisition Property• Daiwa Nishi-Shimbashi• Daiwa Kudan• Daiwa Jimbocho

42.3% 42.2% 42.3%

Acquisition Property• Daiwa River Gate
• Daiwa Hatchobori ekimae• Daiwa Hatchobori ekimae West

28.9%

25.3% 25.5%

Acquisition Property

43.3%

40.5%

37.5%
34.4%
34.0% 34.2%

28.1%

41.7%

40.2%

Acquisition Property• shinyon curumu• Daiwa Meieki• Daiwa Kamiooka
Acquisition Property• Daiwa Osaki 3-chome
Acquisition Property• Daiwa Nihonbashi Hongokucho

Acquisition Property• Daiwa Ebisu 4-chome• LAQUAS Higashi Shinjuku• Daiwa Aoyama• Shinsen Place• Glass City Shibuya• Daiwa Meguro Square

Acquisition Property• Daiwa Azabu Terrace• Daiwa Kitahama
Acquisition Property• Integral Tower

Acquisition Property• CONCURRED Yokohama• Daiwa Kanda East

Acquisition Property• Daiwa Kanda Mikuracho
Acquisition Property• Daiwa Higashi-Nihonbashi• Square Daikanyama Building• Shinjuku West Building• Daiwa Ogikubo

Acquisition Property• Daiwa Nishi-Shinjuku• Kirin Nihonbashi BuildingThis document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

33Section 4
Financial Strategy

Status of Interest-bearing Liabilities (1)Loan to Value Trend

Status of Interest-bearing Liabilities(End of 25th Fiscal Period)(Billion Yen)

Ratio of
Fixed and Floating Borrowings

Ratio ofLong and Short-Term Borrowings
8.2％

23.8％

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

40.5%

76.2％

91.8％

Fixed interest

Long-term loans payable, etc.

Floating interest

Short-term loans payable andcurrent portion of long-termloans payable

Status of Rating
Japan Credit Rating Agency, Ltd. (JCR)

Long-term issuer rating
Rating outlook: Positive

Rating and Investment Information, Inc. (R&I)

Issuer rating(Note) LTV (based on total assets) = Total interest-bearing liabilities / Total assets

Rating outlook: Stable

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

35

Status of Interest-bearing Liabilities (2)Repayment Schedule(Million Yen)

Changes in Procured Years of Interest-Bearing Liabilities(Year)(Year)

 Investment Corporation Bond

4.2

7.9

1.4

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

36

Status of Interest-bearing Liabilities (3)As of End of the 25th Fiscal Period
Name of Financial Institutions
Sumitomo Mitsui Banking
Corporation.

Balance(Million Yen)

Comparison with
Previous Period

Balance Ratio

Name of Financial Institutions

Comparison with

Balance

Previous Period

Balance Ratio

36,400-6,000

19.8%

The Yamaguchi Bank, Ltd.

2,000

0

1.1%

22,500-2,35012.2%

ORIX Bank Corporation

1,500-1,0000.8%

Development Bank of Japan Inc.

21,7500

11.8%

Nippon Life Insurance Company

1,300

0

0.7%

MUFG Bank, Ltd.

20,500-4,000

11.2%

The Kagawa Bank, Ltd.

1,000

0

0.5%

Mizuho Corporate Bank, Ltd.

18,400-1,000

10.0%

The Higashi-Nippon Bank, Limited

1,000

-500

0.5%

Shinsei Bank, Ltd

14,000

0

7.6%

300

0

0.2%

Resona Bank, Limited

12,500

0

6.8%

200

0

0.1%

5,500

0

3.0%

183,850-15,350

100.0%

5,500

-500

3.0%

5,000

0

2.7%

Aozora Bank, Ltd.

3,000

0

1.6%

Nishi-Nippon City Bank, Ltd.

3,000

0

1.6%

The Gunma Bank, Ltd.

2,500

0

1.4%

The 77 Bank, Ltd.

2,000

0

1.1%

The Musashino Bank, Ltd.

2,000

0

1.1%

2,000

0

1.1%

Sumitomo Mitsui Trust Bank,
LimitedThe Bank of Fukuoka, Ltd.
Mizuho Trust and Banking Co.,Ltd.
Kansai Urban Banking
Corporation

Tokio Marine & Nichido Fire
Insurance Co., Ltd.

Taiyo Life Insurance Company
Fukoku Mutual Life Insurance
Company
Total (23 banks)

Issuance
No. 3 Unsecured Investment
Corporation Bond
No. 4 Unsecured Investment
Corporation Bond
Total Investment Corporation
Bonds

BalanceComparison with

Duration ofPrevious Period

Liabilities

3,000

0

5 years

2,100

0

10 years

5,100

0

-

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

37

Unitholders as of the end of the May 2018 (25th) Fiscal Period
Unitholders’ Share by Investor Type
Investor Type

Number of
Units
End of 24th
Fiscal Period

Number of
Units
End of 25th
Fiscal Period

List of Top 10 Investors
Rate (Note)
End of 25th
Fiscal Period

Change of
Units

Individuals

20,71817,144-3,574

3.49%

Financial
Institutions

182,502

171,532-10,970

34.87%

0

0

0

0.00%

14,13814,312

+174

2.91%

155,263

146,875-8,38829.86%

Commercial
Bank
Regional Bank

Trust Bank

Investor NameNo.

Non-life
Insurance

2,604
700

810
422

-1,794
-278

Units

0

26.21%

2 (Investment Trust Account)

61,555

65,125+3,57013.24%

3 Daiwa Securities Group Inc.

59,321

59,3210

12.06%

Japan Trustee Services Bank, Ltd.

48,89839,506-9,392

8.03%

Trust & Custody Services Bank, Ltd.

27,996

26,045-1,951

5.30%

The Nomura Trust and Banking Co., Ltd.

12,28912,606

+317

2.56%

4,767

8,699

+3,932

1.77%

ＳTATE STREET BANK AND TRUSTCOMPANY 505012

7,886

8,006

+120

1.63%

STICHTING PENSIOENFONDS METAAL EN

7,463

5,641

-1,822

1.15%

STATE STREET BANK - WEST PENSION

5,144

5,147

+3

1.05%

364,224

359,001-5,22372.99%The Master Trust Bank of Japan, Ltd.

4 (Trust Account)

6 (Investment Trust Account)
THE BANK OF NEW YORK,

7 NON-TREATY

Other Financial
Institutions

9,797

9,113

-684

1.85%

Other Dom estic
Corporation

191,803

190,961-842

38.82%

Foreigner

97,119106,453+9,33421.64%

9 TECHNIEKSecurities

5,727

5,787

+60

1.18%

10 FUND CLIENTS - EXEMPT 505233

Total

497,869

491,877-5,992100.00%(Note) Rounded to the second decimal place

Rate (Note)
End of 25th
Fiscal Period

Change of

128,905

0.16%
0.09%

Number of
Units
End of 25th
Fiscal Period

128,905

1 Daiwa Investment Management Inc.

5 (Securities Investment Trust Account)
Life Insurance

Number of
Units
End of 24th
Fiscal Period

JASDEC ACCOUNT

8

Total
(Note) Rounded to the second decimal place

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

38

Change of Asset Management Fee System
Change to an asset management fee system focusing on management results and enhancing
the incentive to increase the distributable amountManagement Fee Ⅰ（based on assets under management）

BeforeAfter

Basis of the calculation

Ratio

Cumulative Acquisition Price

0.1％

Total appraisal value of assets
under management

Management FeeⅢ
（based on distributable amount）

BeforeRatio

Distributable amount

2.0％

No Change

0.05％※Change from acquisition price tomarket value basis

Basis of the calculation

After

Distributable amount

3.5％※ Management Fee Ⅱ(Property-related operating revenue basis), Management fee Ⅳ(Asset Acquisition basis) & Management Fee Ⅴ(Asset Divestment basis) are not changed（wording amendments only）

Assumptions of this change for the past 2 periods and the forecasted 2 periods■■ Management Fee Ⅰ ■■ Management Fee Ⅱ ■■ Management Fee Ⅲ
FY2017/11 Before(24th period) After

118

716

221

Forecast

211

716

127

120

713

221

214

713

127
0

213

712

131

BeforeFY2019/5(27th period) After

120

712

231

BeforeFY2018/11(26th period) After

198

700

130

BeforeFY2018/5(25th period) After

111

700

236

200

400

600

800

1,000
（Mil Yen）(Note)The amount before change for the 24th Fiscal Period and 25th Fiscal Period are the actual value and the amount after change is the estimated value calculated by assuming thet there was a change in the asset management fee system from the beginning ofeach period. The amount before change for the 26th Fiscal Period and the amount after change for the 27th Fiscal Period are the forecast value of earnings announced in “REIT Financial Report for the 25th Fiscal Period” dated July 18, 2018 and the amountafter change 26th Fiscal Period is the estimated value calculated by assuming thet there was a change in the asset management fee system from beginning of the 26th Fiscal Period based on the assumptions of the earnings forecast and the amount beforechange for the 27th Fiscal Period is the estimated value when there are no changes in the asset management fee system. Furthermore, the amount of management fee I after change for the 26th Fiscal Period and 27th Fiscal Period are calculated byassuming that there will be no change in the appraisal value as of end of the 25th Fiscal Period. In addition, the above-mentioned forecast value and estimated value are based on certain assumptions and may differ from the actual amount.

Future Initiatives

Internal GrowthConnecting to internal growth through a thorough handson approach based on focusing the portfolio on the steadyTokyo office market.

Continue to carefully select and actively invest in competitive
properties including strategic asset replacement that
contributes to enhancement of portfolio value.

“Bonji-Tettei”

External Growth

Acquisition of carefully
selected properties

Work to further strengthen financial structure against the
backdrop of a favorable financial market.
 Conduct agile and flexible fund procurement by capitalizing
on strong relationships with lenders.
 Strengthen IR, aiming for increase in number of investors.


Financial Strategy

Continue to strengthen
financial structure

Corporate Governance
As a REIT on which strict governance is expected, further reinforce readiness concerning internal control,
legal compliance and risk management in order to further assure the trust of unitholders.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

40

Appendix

Summary of Results for the Fiscal Period ended May 2018 (25th FP) (1)― Balance Sheet ―Comparison with Results of the 24th Fiscal Period
24th Fiscal Period(%)

Million Yen

16,614

Cash and Deposits in Trust
Other Current Assets
Fixed Assets
Tangible Fixed Assets
Building and Others(including Trust Property )Land and Others(including Trust Property )AssetsOther Tangible Fixed Assets

Leasehold Rights and Leasehold
Rights in Trust
Other Intangible Fixed Assets

Million Yen

Million Yen

Million Yen(%)

32,64814,28928,687

1,668

3,383

655

577

458,57094.9

430,497

92.2

82,195373,075

347,477

1,522

824
0.6

2,730

2,705

2,705

28

25

Inv estment securities

3,951

-

113

113

1,002

903

166

128

Deposits

Long-term Prepaid Expenses
Other Inv estments and Other Assets

20

Def erred Assets
Inv estment Corporation Bond Issuance
Costs
Total Assets

Current Portion
Pay able

93.0

5,234

Security

Short-term Loans Pay able

434,373

Inv estments and Other Assets

Leasehold andPaid in Trust

Operating Accounts Pay ables

96.6

83,972

1.1

0.0

20
483,1731,145

17

467,040ofLong-term

Loans

Accounts Pay ables-Other
Adv ances Receiv ed
Other Current Liabilities

0.2

872

2,000

-

17,35015,500

425

534

2,046

2,073

562

821
42.1

193,561

179,850

168,350

Tenant Leasehold and Security Deposits

17,14017,709Tenant Leasehold and Security Deposits
in Trust

491

1,792

Other Fixed Liabilities

596

609

Total Liabilities

226,37746.9

213,363251,551

247,876

251,551

251,551

0-3,675

Unappropriated Retained Earnings

5,619

6,051

Valuation, Translation Adjustments andOthers-375-251

Unitholders' capital
Deduction f rom unitholders’ capital

Total Net Assets

100.0

19,802

5,100

Unitholders’ equity (net amount)

0.0

4.8

(%)

5,100

Long-term Loans Pay able

0.6

(%)

814

203,178

Fixed Liabilities
Inv estment Corporation Bonds

17
100.0

23,198Current Liabilities

7.0

466,538

2,733

Intangible Fixed Assets

25th Fiscal Period

Liabilities

Cash and Deposits

3.4

24th Fiscal Period

Net Assets

Current Assets

25th Fiscal Period

Total Liabilities and Net Assets

4.2

41.4

45.7

256,79653.1

253,67654.3

483,173100.0

467,040100.0This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

42

Summary of Results for the Fiscal Period ended May 2018 (25th FP) (2)― Income Statement ―Comparison with Results of the 24th Fiscal Period

Comparison with the 25th Fiscal Period Forecasts(Million Yen)

Effective Number of Days of Investment

24th Fiscal
Period25th Fiscal
Period183

182(Million Yen)

ChangeEffective Number of Days of Investment

Gain on Sale

464

481

+17

Operating Expenses (B)

6,775

6,761

-13

Expenses related to Rental Business(excluding depreciation)

3,626

3,638

+11

Depreciation

Operating Rev enues (A)

-

481

+481

6,557

6,761

+203

Expenses related to Rental Business(excluding depreciation)

3,510

3,638

+127

Depreciation

1,768

1,772

+3

1,784

1,772

-12

Gain and Loss f rom Rental Operations(excluding gain on sale)

7,436

7,499

+63

+501

Operating Income (A-B)

6,589

6,678

+88

+206

Non-operating Expenses

918

929

+11

566

558

-7

5,863

5,888

+24

Gain and Loss f rom Rental Operations(excluding gain on sale)

7,455

7,499

+43

Operating Income (A-B)

6,177

6,678

Non-operating Expenses

723

929

Interest Expense(including cap amortization)

182
+75

+705

Operating Expenses (B)182

Change13,44013,440Gain on Sale

25th Fiscal
Period13,365

12,735

Operating Rev enues (A)25th Fiscal Period
Forecast(Announced
January 18, 2018)

Interest Expense(including cap amortization)

564

558

-5

5,456

5,888

+432

Extraordinary Income

-

-

-

Extraordinary Income

-

-

-

Extraordinary Expenses

-

-

-

Extraordinary Expenses

-

-

-

Total Income Taxes(Includes income taxes def erred)

0

0

-

Total Income Taxes(Includes income taxes def erred)

2

0

-1

5,455

5,887

+432

5,861

5,887

+26

497,869 units 491,877 units- 5,992 units

497,869 units 491,877 units- 5,992 units

Ordinary Income

Net Income
Inv estment Units Issued and Outstanding
Div idend per Unit

10,957 yen

11,150 yen+ 193 yen

Ordinary Income

Net Income
Inv estment Units Issued and Outstanding
Div idend per Unit

11,000 yen

11,150 yen+ 150 yenThis document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

43Forecasts for the Fiscal Periods ending Nov. 2018 and May 2019
(26th and 27th FP)
Forecasts for the 26th and 27th Fiscal Periods(Million Yen)

Effective Number of Days of Investment

25th Period(May 31, 2018)

26th Period
Forecast (Nov. 30, 2018)

27th Period
Forecast (May 31, 2019)

182

183

182

13,44013,02912,964Gain on Sale

481

-

-

Operating Expenses (B)

6,761

6,570

6,432

Expenses related to Rental Business(excluding depreciation)

3,638

3,552

3,376

Depreciation

Operating Rev enues (A)

1,772

1,708

1,745

Gain and Loss f rom Rental Operations(excluding gain on sale)

7,499

7,769

7,841

Operating Income (A-B)

6,678

6,459

6,531

Non-operating Expenses

929

628

626

558

492

481

5,888

5,830

5,904

Extraordinary Income

-

-

-

Extraordinary Expenses

-

-

-

Total Income Taxes(Includes income taxes def erred)

-

2

2

5,887

5,828

5,902

491,877 units

491,877 units

491,877 units

11,150 yen

11,850 yen

12,000 yen

Interest Expense(including cap amortization)
Ordinary Income

Net Income
Inv estment Units Issued and Outstanding
Div idend per Unit (Note)(Note) Dividends per unit for the 25th FP is calculated by dividing the amount obtained by subtracting provision for reserve for reduction entry (403 million yen) from unappropriated retained
earnings by the total number of investment units issued and outstanding.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

44

Major Financial Data

Item

Number of days of investment

Number of properties at end of period

Unit

21st
Period22nd
Period23rd
Period24th
PeriodNOI

25th
Period

Day

183

183

182

183

182

Property

50

53

54

54

55

Rent revenue + Other operating revenue –Expenses
related to rent business + Depreciation
FFO
Net income + Depreciation – Gain on sale

Occupancy rate at end of period

%

98.7

97.7

97.7

98.2

99.0

ROA
Average acquisition priceMillion Yen

448,052

466,891

469,166

469,341

463,157

NOI(after deduction of gain on sale)

Million Yen

8,751

9,067

9,166

9,224

9,271

Funds from operation(FFO)

Million Yen

6,652

6,972

7,129

7,223

7,177

Return on asset
(ROA)

%

2.3

2.2

2.2

2.3

2.5

Return on equity
(ROE)

%

4.2

4.2

4.2

4.2

4.6

Capital adequacy ratio at end of period

%

52.0

53.1

53.0

53.1

54.3

Loan-to-Value (LTV) at end of period

%

43.3

42.3

42.2

42.3

40.5

Annualized ordinary income /(total assets at beginning of fiscal period+ total assets
at end of fiscal period) / 2
ROE
Annualized net income /(net assets at beginning of fiscal period+ net assets at
end of fiscal period) / 2
Loan-to-Value (LTV) at end of fiscal period
Interest-bearing liabilities at end of fiscal period / Total
assets at end of fiscal period

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

45

Status of Interest-bearing Liabilities (as of May 31, 2018) (1)Borrowings
Lender
The Kagawa Bank, Ltd.(*)
Aozora Bank, Ltd.(*)
Kansai Urban Banking Corporation
Dev elopment Bank of Japan Inc.
The Bank of Fukuoka, Ltd.(*)
Tokio Marine & Nichido Fire Insurance Co., Ltd.(*)(**)

The Bank of Fukuoka, Ltd.(*)
ORIX Bank Corporation
The Bank of Fukuoka, Ltd.(*)
MUFG Bank, Ltd.(*)
The Gunma Bank, Ltd.(*)

The Musashino Bank, Ltd.(*)(**)
Total current maturities of long-term borrowings
Sumitomo Mitsui Trust Bank, Limited(*)
Aozora Bank, Ltd.(*)
Resona Bank, Limited(*)
Sumitomo Mitsui Trust Bank, Limited(*)
Dev elopment Bank of Japan Inc.
Kansai Urban Banking Corporation(*)(**)
Kansai Urban Banking Corporation(*)(**)
Sumitomo Mitsui Banking Corporation.(*)
Shinsei Bank, Ltd.(*)(**)
The Higashi-Nippon Bank, Limited(*)

Long-term borrowings

Sumitomo Mitsui Trust Bank, Limited(*)
Sumitomo Mitsui Trust Bank, Limited(*)
Shinsei Bank, Ltd.(*)(**)
Shinsei Bank, Ltd.(*)(**)
MUFG Bank, Ltd.(*)
Sumitomo Mitsui Trust Bank, Limited(*)
Sumitomo Mitsui Banking Corporation.(*)
Mizuho Bank, Ltd.(*)
Sumitomo Mitsui Banking Corporation.(*)
Shinsei Bank, Ltd.(*)(**)
Resona Bank, Limited(*)
Resona Bank, Limited(*)
Sumitomo Mitsui Banking Corporation.(*)
Sumitomo Mitsui Banking Corporation.(*)
Mizuho Bank, Ltd.(*)
MUFG Bank, Ltd.(*)
Dev elopment Bank of Japan Inc.
MUFG Bank, Ltd.(*)
Mizuho Bank, Ltd.(*)
MUFG Bank, Ltd.(*)
Sumitomo Mitsui Banking Corporation.(*)
MUFG Bank, Ltd.(*)

Balance(million yen)

1,000
1,000
1,500
1,000
1,000
1,000
1,000
1,500
2,000
3,000
1,000
500
15,500
1,500
2,000
2,000
1,500
1,000
1,500
2,000
1,600
1,000
1,000
1,000
4,000
1,000
1,000
3,000
1,000
1,400
4,000
1,400
1,000
2,000
2,000
1,000
1,000
3,900
2,000
1,000
1,000
1,500
1,000
3,000
1,000

Interest
Type

Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed

Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed

Interest Rate(%)

Date of
AdvanceDue date

Term

Lender

0.814%
0.878%
0.893%
0.833%
0.681%
0.540%
0.681%
0.687%
0.662%
0.500%
0.500%
0.435%

13/2/28
13/4/12
13/6/28
13/7/3
13/7/813/8/913/8/913/9/30
13/9/30
14/3/31
14/3/31
14/5/29

19/2/28
19/5/31
18/8/31
18/8/31
18/8/31
18/7/31
18/8/31
19/2/28
19/3/29
19/3/29
19/3/29
19/5/31

Mizuho Trust and Banking Co., Ltd.(*)

0.896%
0.896%
0.896%
0.844%
0.963%
0.677%
0.794%
0.781%
0.787%
0.808%
0.824%
0.816%
0.836%
0.856%
0.761%
0.646%
0.629%
0.636%
0.636%
0.737%
0.571%
0.606%
0.606%
0.593%
0.606%
0.595%
0.742%
0.618%
0.585%
0.585%
0.378%
0.378%

13/2/1
13/2/28
13/3/1
13/4/12
13/4/12
13/6/28
13/6/28
13/7/3
13/7/3
13/7/3
13/7/8
13/7/8
13/7/31
13/7/31
13/8/913/8/913/8/913/9/27
13/9/27
13/11/29
14/3/18
14/3/18
14/3/25
14/3/25
14/3/31
14/5/29
14/5/29
14/5/29
14/5/29
14/5/29
14/5/29
14/5/29

20/2/28
20/2/28
20/2/28
19/11/29
19/11/29
19/8/30
20/8/31
20/8/31
20/11/30
20/11/30
19/11/29
20/5/29
21/5/31
21/8/31
20/8/31
21/2/26
21/5/31
21/3/31
21/3/31
20/11/30
19/9/30
21/3/31
21/3/31
22/2/28
21/3/31
20/5/29
20/11/30
21/11/30
22/5/31
22/5/31
22/11/30
22/11/30

Mizuho Bank, Ltd.(*)

Sumitomo Mitsui Banking Corporation.(*)
Sumitomo Mitsui Banking Corporation.(*)
Sumitomo Mitsui Banking Corporation.(*)
Shinsei Bank, Ltd.
Sumitomo Mitsui Banking Corporation.(*)
MUFG Bank, Ltd.(*)
Mizuho Bank, Ltd.(*)
Sumitomo Mitsui Banking Corporation.(*)
Shinsei Bank, Ltd.
Dev elopment Bank of Japan Inc.
MUFG Bank, Ltd.(*)
MUFG Bank, Ltd.(*)
Resona Bank, Limited(*)
Sumitomo Mitsui Trust Bank, Limited(*)
Sumitomo Mitsui Banking Corporation.(*)

Long-term borrowings

Current maturities of long-termborrowings

Term

Resona Bank, Limited(*)
Dev elopment Bank of Japan Inc.
Shinsei Bank, Ltd.
The 77 Bank, Ltd.(*)
Dev elopment Bank of Japan Inc.
The Bank of Fukuoka, Ltd.(*)
Sumitomo Mitsui Trust Bank, Limited(*)
Mizuho Bank, Ltd.(*)
Shinsei Bank, Ltd.
Resona Bank, Limited(*)
Sumitomo Mitsui Banking Corporation.
Mizuho Bank, Ltd.(*)
MUFG Bank, Ltd.(*)
The Musashino Bank, Ltd.(*)(**)
Nishi-Nippon City Bank, Ltd.
The 77 Bank, Ltd.(*)
Sumitomo Mitsui Banking Corporation.
MUFG Bank, Ltd.
Nippon Life Insurance Company(*)
Sumitomo Mitsui Trust Bank, Limited
MUFG Bank, Ltd.
Sumitomo Mitsui Banking Corporation.
The Gunma Bank, Ltd.(*)
Nippon Life Insurance Company(*)
Taiyo Life Insurance Company
Sumitomo Mitsui Banking Corporation.(*)
Dev elopment Bank of Japan Inc.
Mizuho Bank, Ltd.(*)

Balance(million yen)

3,000
2,000
3,500
4,000
1,000
2,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,500
1,500
1,000
1,500
2,500
2,000
1,500
1,000
1,500
1,500
1,500
1,500
1,500
1,500
3,000
2,000
500
1,000
2,000
1,000
500
1,000
1,000
1,000
1,000
1,000
1,000
300
300
1,500
1,500
1,000

Interest
Type

Fixed
Fixed
Fixed
Fixed
Float
Fixed
Fixed
Fixed
Fixed
Float
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed
Float
Fixed
Fixed
Fixed
Fixed
Fixed
Float
Fixed
Float
Fixed
Fixed
Fixed
Float
Fixed
Float
Fixed
Fixed
Float
Float
Float
Fixed
Fixed
Fixed
Fixed
Fixed
Fixed

Interest Rate(%)

0.530%
0.530%
0.618%
0.585%
L+0.325%
0.378%
0.560%
0.353%
0.458%
L+0.350%
0.692%
0.593%
0.560%
0.353%
0.353%
0.353%
0.458%
0.365%
0.710%
L+0.325%
0.479%
0.634%
0.408%
0.450%
0.450%
L+0.325%0.450%
T+0.350%0.450%
0.450%
0.349%
L+0.250%
0.281%
T+0.350%0.300%
0.281%
T+0.325%
T+0.325%
T+0.350%0.443%
0.281%
0.541%
0.290%
0.303%
0.290%

Date of
Advance

14/7/8
14/7/8
14/7/8
14/7/8
14/7/8
14/7/8
14/12/1
14/12/1
14/12/1
14/12/1
14/12/3
14/12/3
14/12/3
14/12/3
14/12/3
14/12/3
14/12/3
15/2/27
15/3/31
15/3/31
15/5/1
15/5/1
15/5/1
15/5/1
15/5/1
15/5/1
15/5/1
15/5/1
15/5/29
15/5/29
15/8/31
15/8/31
15/8/31
15/8/31
15/9/1115/9/1115/9/1115/9/1115/9/11
15/11/30
15/11/30
15/11/30
16/3/29
16/3/29
16/3/29

Due date

20/11/30
20/11/30
21/11/30
22/5/31
22/8/31
22/11/30
22/5/31
22/11/30
23/5/31
23/5/31
21/11/30
21/11/30
22/5/31
22/11/30
22/11/30
22/11/30
23/5/31
23/2/28
22/3/31
23/5/31
21/5/31
22/5/31
23/5/31
23/11/30
23/11/30
23/11/30
23/11/30
24/5/31
23/11/30
23/11/30
20/8/31
22/8/31
22/8/31
24/8/30
19/8/30
22/8/31
24/2/29
24/2/29
24/8/30
22/2/28
22/8/31
22/11/30
23/2/28
23/2/28
23/2/28(Note) Fixed Interest Rate and Floating Interest Rate are rounded to the third decimal place.
** Interest rates that were changed from a floating rate to a fixed rate by concluding the swap agreement are described as fixed interest rates.
** Interest rates are converted based on 1 year = 365 days and indicated.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

46

Status of Interest-bearing Liabilities (as of May 31, 2018) (2)Term

LenderResona Bank, Limited(*)
Mizuho Trust and Banking Co., Ltd.(*)
Shinsei Bank, Ltd.
Nishi-Nippon City Bank, Ltd.
MUFG Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Trust Bank, Limited
Sumitomo Mitsui Banking Corporation.

Long-term borrowings

Mizuho Bank, Ltd.
Shinsei Bank, Ltd.
Fukoku Mutual Life Insurance Company
The Yamaguchi Bank, Ltd.
Dev elopment Bank of Japan Inc.
Dev elopment Bank of Japan Inc.
Dev elopment Bank of Japan Inc.
Sumitomo Mitsui Banking Corporation.
Mizuho Trust and Banking Co., Ltd.
Sumitomo Mitsui Trust Bank, Limited
Sumitomo Mitsui Banking Corporation.
Dev elopment Bank of Japan Inc.
Sumitomo Mitsui Banking Corporation.
Mizuho Bank, Ltd.
Tokio Marine & Nichido Fire Insurance Co., Ltd.

Dev elopment Bank of Japan Inc.
The Yamaguchi Bank, Ltd.
Shinsei Bank, Ltd.
Sumitomo Mitsui Trust Bank, Limited
The Gunma Bank, Ltd.
The Musashino Bank, Ltd.

Total long-term borrowings
Total borrowings

Balance(million yen)

1,000
1,000
1,000
1,000
2,500
1,500
2,000
1,500
1,000
2,000
200
1,500
1,700
3,500
3,000
2,000
1,500
3,000
2,000
2,550
1,500
1,000
1,000
2,000
500
2,000
5,000
500
500

168,350
183,850

Interest
Type

Fixed
Fixed
Float
Float
Float
Float
Float
Float
Float
Float
Fixed
Fixed
Fixed
Fixed
Fixed
Float
Float
Float
Float
Fixed
Float
Float
Fixed
Fixed
Fixed
Float
Float
Float
Float

Interest Rate(%)

0.391%
0.391%
T+0.300%
T+0.300%
T+0.325%
T+0.325%
T+0.325%
T+0.350%
T+0.350%
T+0.325%
0.579%
0.450%
0.387%
0.437%
0.477%
T+0.300%
T+0.300%
T+0.325%
T+0.325%0.457%
T+0.350%
T+0.350%0.303%
0.498%
0.489%
T+0.325%
T+0.300%
T+0.225%
T+0.300%

Date of
Advance

16/3/29
16/3/29
16/3/29
16/3/29
16/3/29
16/3/29
16/5/26
16/5/26
16/5/26
16/5/31
16/5/31
16/8/31
17/5/10
17/5/22
17/5/22
17/5/31
17/5/31
17/5/31
17/5/31
17/8/31
17/8/31
17/8/31
17/11/30
17/11/30
17/11/30
17/11/30
18/2/28
18/5/31
18/5/31

Due date

23/8/31
23/8/31
24/2/29
24/2/29
24/8/30
24/8/30
24/11/29
25/5/30
25/5/30
24/11/29
26/5/29
26/8/31
23/11/30
24/5/31
24/11/29
25/5/30
25/5/30
25/11/28
25/11/28
25/5/30
26/8/31
26/8/31
22/11/30
25/5/30
25/11/28
26/5/29
26/2/27
25/5/30
26/5/29

Term
Long-term

Investment Corporation Bonds
No. 3 Unsecured Investment Corporation Bond
No. 4 Unsecured Investment Corporation Bond

Total investment corporation bonds

Balance(million yen)
3,000
2,100
5,100

Type
Fixed
Fixed

Interest
Rate (%)
0.420%
1.000%

Date of
Advance
14/9/12
14/9/12Due date
19/9/12
24/9/12(Note) Fixed Interest Rate and Floating Interest Rate are rounded to the third decimal place.
** Interest rates that were changed from a floating rate to a fixed rate by concluding the swap agreement are described as fixed interest rates.
** Interest rates are converted based on 1 year = 365 days and indicated.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

47

Analyses of Tenants
Major Tenants Top 10 List
Tenant Name

Property% Share of Industries (Note 1) of Top 100 Tenants (Note 2)
Leased Area(m2)

% of Total
Leased Area

(Note 2)

(Note 2)

Jupiter Shop Channel Co., Ltd.

Daiw a River Gate

6,211.30

1.8%

Tokio Marine & Nichido Anshin
Consulting Co., Ltd.

Integral Tow er

6,058.41

1.7%

Palsystem Consum ers'
Co-operative UnionLAQUAS Higashi Shinjuku

5,985.08

1.7%

Not disclosed (Note 1)

Daiw a Kayabacho

5,899.11

1.7%

Kirin Brew ery Com pany, Ltd.

Kirin Nihonbashi Building

5,630.17

1.6%

UCC Holdings Co., Ltd.

Daiw a Onarimon

5,049.92

1.4%

Glass City Shibuya

4,659.25

1.3%

Mitsubishi UFJ NICOS Co., Ltd.

Daiw a Kitahama

4,515.35

1.3%

Not disclosed (Note 1)

Daiw a Kitahama

4,421.40

1.3%

TKP Corporation

Daiw a Nishi-Shinjuku/
CONCURRED Yokohama (Note 2)

4,197.87

1.2%

52,627.86

15.6%

Not disclosed(Note 1)

Total

Other
15.2%
Schools
2.7%

Information &Communication
24.9%

Wholesale
3.2%
Electric Device
3.7%
Insurance
4.4%
Foods
4.6％
Real Estate
4.6%
Construction
6.3%

Services
21.8%
Retail Trade
8.0%(As of May 31, 2018)(Note 1) The leased area of top 100 tenants covers 61.2% of total leased area as of the end of the 25th Fiscal Period(Note 2) Industries are categorized according to TSE’s 33 industry groups.
(Note 3) The ratio is rounded down to the first decimal place(Note 1) Not disclosed due to tenant's request.
(Note 2) Leased area of the tenants in CONCURRED Yokohama are described as the figure equivalent to 75/100, ownership % of theInvestment Corporation.
(Note 3) Rounded down to the first decimal place.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

48

Appraisal Value Compared to the Previous Fiscal Period (1)(Unit: Million Yen)
Appraisal Value

Property Name

End of 24th Period

Compared to End of 24th Period

End of 25th Period

Difference

ChangeBook Value
End of 25th Period

Compared to Book Value at
End of 25th Period
Difference

Acquisition Price

ChangeCap Rate
End of 24th Period End of 25th Period

Daiw a Ginza

17,20017,400+200

1.2%

13,064+4,33533.2%

14,1003.5%

3.5%

Daiw a Ginza Annex

3,840

3,840

-

0.0%

2,767

+1,072

38.7%

3,050

3.4%

3.5%

Daiw a Shibaura

7,870

7,870

-

0.0%

8,014

-144

-1.8%

8,265

4.0%

4.0%

Daiw a Minam i Aoyam a

4,640

4,640

-

0.0%

4,425

+214

4.8%

4,550

3.8%

3.8%

Daiw a Sarugakucho

3,840

3,840

-

0.0%

3,194

+645

20.2%

3,190

4.4%

4.4%

Daiw a A Ham am atsucho

3,560

3,610

+50

1.4%

2,777

+832

30.0%

2,865

3.7%

3.7%

Daiw a Jingum ae

2,460

2,460

-

0.0%

2,711

-251

-9.3%

2,800

3.8%

3.8%

Daiw a Shibadaim on

3,090

3,110

+20

0.6%

2,398

+711

29.7%

2,578

3.6%

3.6%

Daiw a Misakicho

2,850

2,860

+10

0.4%

2,151

+708

32.9%

2,346

3.9%

3.9%

Daiw a Shim bashi 510

2,530

2,530

-

0.0%

2,141

+388

18.1%

2,080

4.0%

4.0%

Daiw a Tsukijiekim ae

1,880

2,000

+120

6.4%

1,289

+710

55.1%

1,560

4.2%

4.2%

Daiw a Tsukiji

1,610

1,610

-

0.0%

1,141

+468

41.0%

1,240

4.1%

4.1%

Daiw a Tsukishim a

10,10010,500

+400

4.0%

6,888

+3,611

52.4%

7,840

4.1%

4.1%

Daiw a Nihonbashi Horidom echo

2,660

2,660

-

0.0%

2,465

+194

7.9%

2,520

4.0%

4.0%

Daiw a Azabudai

1,930

1,930

-

0.0%

1,516

+413

27.3%

1,600

3.9%

3.9%

Daiw a Kyobashi

3,490

3,450

-40

-1.1%

3,225

+224

6.9%

3,460

3.9%

4.0%

Daiw a Kojim achi 4-chom e

2,830

2,810

-20

-0.7%

2,846

-36

-1.3%

2,910

3.7%

3.7%

Daiw a Onarim on

13,90013,700

-200

-1.4%

13,348+351

2.6%

13,860

3.7%

3.8%

Shinjuku Maynds Tow er(Note)

125,000

62,600+100

0.2%64,538-1,938-3.0%

66,9003.2%

3.2%

Daiw a SHIBUYA EDGE

5,190

5,190

-

0.0%

5,655

-465

-8.2%

5,900

3.7%

3.7%

Daiw a Kodem m acho

2,260

2,260

-

0.0%

2,374

-114

-4.8%

2,460

4.2%

4.2%

Daiw a Jim bocho

3,620

3,620

-

0.0%

4,003

-383

-9.6%

4,150

3.9%

3.9%

Daiw a Nishishim bashi

6,520

6,570

+50

0.8%

4,735

+1,834

38.7%

5,000

3.5%

3.5%

Daiw a Kayabacho Building

8,160

8,170

+10

0.1%

5,259

+2,910

55.3%

5,600

3.3%

3.3%

Daiw a Jinbocho 3-chom e

4,900

5,060

+160

3.3%

3,373

+1,686

50.0%

3,550

3.3%

3.3%

E SPACE TOWER

33,40033,500+100

0.3%

23,610+9,88941.9%

24,000

3.4%

3.3%

Daiw a Nihonbashi Hongokucho

2,470

2,560

+90

3.6%

1,592

+967

60.7%

1,721

3.9%

3.9%

shinyon curum u

15,50015,600

+100

0.6%

9,685

+5,914

61.1%

9,650

3.2%

3.2%

(Note) The appraisal value in the 24th Fiscal Period for Shinjuku Maynds Tower is indicated as co-ownership values equivalent to 6/7 of the total values for the building. The appraisal value in the 25th Fiscal Period is indicated as co-ownership values
equivalent to 3/7 of the total values for the building. 3/7 of co-ownership interest is indicated in the acquisition price.
As for the difference and change from the end of the 24th Fiscal Period, the portion sold in the 25th Fiscal Period has been adjusted.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

49

Appraisal Value Compared to the Previous Fiscal Period (2)(Unit: Million Yen)
Property Name

Appraisal Value
End of 24th Period

End of 25th Period

Difference

Compared to Book Value at
End of 25th Period

Book Value

Compared to End of 24th Period
ChangeEnd of 25th Period

Difference

Acquisition Price

ChangeCap Rate
End of 24th Period End of 25th Period

Daiw a Akasaka

13,70014,000

+300

2.2%

9,422

+4,577

48.6%

9,200

3.2%

3.2%

Daiw a Shibuya Miyam asuzaka

8,740

9,350

+610

7.0%

7,200

+2,149

29.8%

7,000

3.7%

3.6%

Daiw a Azabu Terrace

16,10016,600+500

3.1%

14,080+2,51917.9%

14,000

3.9%

3.8%

Daiw a Ebisu 4-chom e

5,950

6,040

+90

1.5%

4,254

+1,785

42.0%

4,135

3.7%

3.7%

LAQUAS Higashi Shinjuku

10,70010,800

+100

0.9%

8,484

+2,315

27.3%

8,450

3.3%

3.3%

Daiw a Aoyam a

12,40012,400-0.0%

10,031+2,368

23.6%

9,800

3.2%

3.2%

Shinsen Place

6,710

6,720

+10

0.1%

4,890

+1,829

37.4%

4,800

3.3%

3.3%

Glass City Shibuya

18,30018,300-0.0%

15,979+2,32014.5%

16,0003.5%

3.5%

Daiw a River Gate

30,20030,900+700

2.3%

28,001+2,89810.3%

28,0004.1%

4.0%

Daiw a Hatchobori ekim ae

3,300

3,320

+20

0.6%

2,944

+375

12.8%

2,871

3.5%

3.5%

Daiw a Hatchobori ekim ae West

1,850

1,850

-

0.0%

1,726

+123

7.2%

1,647

3.6%

3.6%

Daiw a Nishi-Shinjuku

15,50015,800+300

1.9%

13,947+1,852

13.3%

13,710

3.3%

3.3%

Kirin Nihonbashi Building

8,290

8,290

-

0.0%

8,278

+11

0.1%

8,180

4.0%

4.0%

Daiw a Higashi-Nihonbashi

6,780

6,780

-

0.0%

6,339

+440

7.0%

6,370

3.9%

3.9%

Square Daikanyam a Building

2,600

2,620

+20

0.8%

2,383

+236

9.9%

2,280

3.4%

3.4%

Shinjuku West Building

1,230

1,230

-

0.0%

981

+248

25.3%

942

3.7%

3.7%

Daiw a Kanda Mikuracho

1,710

1,710

-

0.0%

1,601

+108

6.8%

1,592

4.0%

4.0%

-

5,120

-

-

4,249

+870

20.5%

4,200

-

3.9%

Daiw a Higashi-Ikebukuro

3,880

4,050

+170

4.4%

2,661

+1,388

52.1%

2,958

4.1%

4.1%

Daiw a Shinagaw a North

6,170

6,170

-

0.0%

7,169

-999

-13.9%

7,710

4.2%

4.2%

Daiw a Osaki 3-chom e

2,340

2,340

-

0.0%

1,605

+734

45.7%

1,650

3.8%

3.8%

Daiw a Kam iooka

2,750

2,750

-

0.0%

1,911

+838

43.8%

2,000

4.5%

4.5%

Integral Tow er

19,70020,500+800

4.1%

15,917+4,58228.8%

15,2203.7%

3.7%

Daiw a Meguro Square

6,750

6,810

+60

0.9%

5,531

+1,278

23.1%

5,600

3.5%

3.5%

Daiw a Ogikubo

4,490

4,540

+50

1.1%

3,989

+550

13.8%

3,800

3.9%

3.9%

-

39,400--38,315+1,0842.8%

38,100-

4.3%

Daiw a Kanda East

CONCURRED Yokoham aDaiw a Kitaham a
Total (Note)

11,70011,700

-

0.0%

9,276

+2,423

26.1%

9,481

3.8%

3.8%

527,130

506,040+4,8801.1%

432,377+73,66217.0%

439,441--(Note) Difference and change in “Compared to End of 24th Period” do not include the impact of the properties acquired/sold in the 25th Period.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

50

Appraisal Value at End of Fiscal Period (1)(Unit: Million Yen)
Property Name

Appraisal Value at
End of 25th Period

Summary of Appraisal Report (End of 25th Period)
Direct Capitalization Method
Value

DCF Method

Cap Rate

Value

Discount Rate

Terminal Cap Rate

Integrated Value

Daiw a Ginza

17,40017,8003.5%

17,0003.3%

3.7%

17,900Daiw a Ginza Annex

3,840

3,850

3.5%

3,820

3.3%

3.7%

4,640

Daiw a Shibaura

7,870

7,900

4.0%

7,850

3.8%

4.2%

6,650

Daiw a Minam i Aoyam a

4,640

4,700

3.8%

4,570

3.6%

4.0%

4,060

Daiw a Sarugakucho

3,840

3,890

4.4%

3,780

4.2%

4.6%

1,780

Daiw a A Ham am atsucho

3,610

3,670

3.7%

3,580

3.5%

3.9%

2,230

Daiw a Jingum ae

2,460

2,500

3.8%

2,420

3.6%

4.0%

2,710

Daiw a Shibadaim on

3,110

3,180

3.6%

3,080

3.4%

3.8%

2,120

Daiw a Misakicho

2,860

2,900

3.9%

2,840

3.7%

4.1%

1,700

Daiw a Shim bashi 510

2,530

2,550

4.0%

2,500

3.8%

4.2%

2,170

Daiw a Tsukijiekim ae

2,000

1,990

4.2%

2,010

4.2%

4.4%

1,910

Daiw a Tsukiji

1,610

1,610

4.1%

1,610

4.1%

4.3%

1,620

Daiw a Tsukishim a

10,50010,600

4.1%

10,400

3.8%

4.3%

5,510

Daiw a Nihonbashi Horidom echo

2,660

2,710

4.0%

2,600

3.8%

4.2%

1,600

Daiw a Azabudai

1,930

1,970

3.9%

1,890

3.7%

4.1%

1,270

Daiw a Kyobashi

3,450

3,500

4.0%

3,390

3.8%

4.2%

2,160

Daiw a Kojim achi 4-chom e

2,810

2,830

3.7%

2,780

3.5%

3.9%

4,460

Daiw a Onarim on

13,70014,0003.8%

13,4003.6%

4.0%

12,700Shinjuku Maynds Tow er (Note)

62,600147,000

3.2%

144,000

3.0%

3.4%

117,000

Daiw a SHIBUYA EDGE

5,190

5,290

3.7%

5,090

3.5%

3.9%

3,630

Daiw a Kodem m acho

2,260

2,270

4.2%

2,240

4.0%

4.4%

1,100

Daiw a Jim bocho

3,620

3,690

3.9%

3,590

3.9%

4.1%

3,640

Daiw a Nishishim bashi

6,570

6,720

3.5%

6,510

3.3%

3.7%

4,590

Daiw a Kayabacho Building

8,170

8,320

3.3%

8,100

3.1%

3.5%

6,600

Daiw a Jinbocho 3-chom e

5,060

5,190

3.3%

5,010

3.1%

3.5%

4,160

E SPACE TOWER

33,50034,2003.3%

32,7003.1%

3.5%

34,200Daiw a Nihonbashi Hongokucho

2,560

2,590

3.9%

2,550

3.7%

4.1%

1,680

shinyon curum u

15,60015,9003.2%

15,4003.0%

3.4%

14,900(Note) The appraisal value for Shinjuku Maynds Tower is indicated as co-ownership values equivalent to 3/7 of the total values for the building. The other figures are indicated as 7/7 of the total values.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

51

Appraisal Value at End of Fiscal Period (2)(Unit: Million Yen)
Property Name

Appraisal Value at
End of 25th Period

Summary of Appraisal Report (End of 25th Period)
Direct Capitalization Method
Value

DCF Method

Cap Rate

Value

Discount Rate

Terminal Cap Rate

Integrated Value

Daiw a Akasaka

14,00014,3003.2%

13,9003.0%

3.4%

13,100Daiw a Shibuya Miyam asuzaka

9,350

9,490

3.6%

9,210

3.4%

3.8%

9,940

Daiw a Azabu Terrace

16,60016,9003.8%

16,3003.6%

4.0%

16,500Daiw a Ebisu 4-chom e

6,040

5,960

3.7%

6,070

3.8%

3.9%

4,340

LAQUAS Higashi Shinjuku

10,800

11,1003.3%

10,6003.1%

3.5%

10,800Daiw a Aoyam a

12,40012,7003.2%

12,2003.0%

3.4%

11,000Shinsen Place

6,720

6,820

3.3%

6,670

3.2%

3.5%

4,260

Glass City Shibuya

18,30018,4003.5%

18,1003.2%

3.6%

17,700Daiw a River Gate

30,90031,0004.0%30,700

3.7%

4.1%

29,600Daiw a Hatchobori ekim ae

3,320

3,450

3.5%

3,260

3.3%

3.7%

4,050

Daiw a Hatchobori ekim ae West

1,850

1,920

3.6%

1,820

3.4%

3.8%

2,050

Daiw a Nishi-Shinjuku

15,80016,4003.3%

15,6003.1%

3.5%

15,800Kirin Nihonbashi Building

8,290

8,460

4.0%

8,120

3.7%

4.1%

7,710

Daiw a Higashi-Nihonbashi

6,780

6,950

3.9%

6,700

3.7%

4.1%

5,120

Square Daikanyam a Building

2,620

2,650

3.4%

2,600

3.4%

3.6%

2,540

Shinjuku West Building

1,230

1,240

3.7%

1,220

3.5%

3.9%

950

Daiw a Kanda Mikuracho

1,710

1,740

4.0%

1,690

4.0%

4.2%

1,850

Daiw a Kanda East

5,120

5,140

3.9%

5,100

3.5%

3.9%

4,960

Daiw a Higashi-Ikebukuro

4,050

4,110

4.1%

4,030

3.9%

4.3%

2,240

Daiw a Shinagaw a North

6,170

6,270

4.2%

6,060

4.0%

4.4%

4,200

Daiw a Osaki 3-chom e

2,340

2,370

3.8%

2,330

3.6%

4.0%

1,570

Daiw a Kam iooka

2,750

2,760

4.5%

2,740

4.3%

4.7%

2,280

Integral Tow er

20,50020,8003.7%

20,4003.5%

3.9%

13,400Daiw a Meguro Square

6,810

6,970

3.5%

6,740

3.3%

3.7%

6,520

Daiw a Ogikubo

4,540

4,620

3.9%

4,500

3.7%

4.1%

3,120

CONCURRED Yokoham a

39,40040,8004.3%

38,800

4.1%

4.5%

33,400Daiw a Kitaham a

11,70012,0003.8%

11,6003.6%

4.0%

13,800506,040

598,640-

581,770--

511,490

Total

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

52

Change in the Portfolio’s Unrealized Gain/Loss(Billion Yen)

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

53

Properties Acquired after Sponsor Change (1)Acquisition
Period

9th Fiscal Period

10th Fiscal Period

11th Fiscal Period

12th Fiscal Period

13th Fiscal Period

14th Fiscal Period

15th Fiscal Period

Daiwa
Jimbocho

Daiwa
Nishi-Shimbashi

Daiwa
Kudan

Daiwa Kayabacho

Daiwa
Jimbocho 3-chome

E SPACE TOWER

Daiwa
Nihonbashi Hongokucho

Daiwa
Osaki 3-chome

shinyon curumu

Address

Chiyoda-ku, Tokyo

Minato-ku, Tokyo

Chiyoda-ku, Tokyo

Chuo-ku, Tokyo

Chiyoda-ku, Tokyo

Shibuya-ku, Tokyo

Chuo-ku, Tokyo

Shinagawa-ku, Tokyo

Shibuya-ku, Tokyo

Acquisition Price

4,150 million yen

5,000 million yen

4,000 million yen

5,600 million yen

3,550 million yen

24,000 million yen

1,721 million yen

1,650 million yen

9,650 million yen

Seller

ORIX JREIT Inc.

Japan Core
Asset II Ltd.

Shining Nova
the Fifth B TMK

Daiwa Property Co.. Ltd.

Tokyu Land Corporation

Endeavor Realty FundLtd.

Tosei Corporation

MCR Six GK

Two domestic industrial
companies

Acquisition date

March 10, 2010

August 13, 2010

September 2, 2010

March 25, 2011

March 29, 2011

July 8, 2011

May 11, 2012

September 18, 2012

December 3, 2012
April 12, 2013

Property Name

Acquisition
Period15th Fiscal Period

16th Fiscal Period

17th Fiscal Period

18th Fiscal Period

19th Fiscal Period

Daiwa
Meieki

Daiwa
Kamiooka

Daiwa
Shibuy a Dogenzaka

Daiwa
AkasakaDaiwa
Shibuy a
Miy amasuzaka

Integral Tower

Daiwa
Azabu Terrace

Daiwa
Kitahama

Daiwa
Ebisu 4-chome

Address

Nagoya-shi, Aichi

Yokohama-shi, Kanagawa

Shibuya-ku, Tokyo

Minato-ku, Tokyo

Shibuya-ku, Tokyo

Suginami-ku, Tokyo

Minato-ku, Tokyo

Osaka-shi, Osaka

Shibuya-ku, Tokyo

Acquisition Price

5,300 million yen

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

SellerDomestic special purpose
company

Shimizu Corporation

Domestic special purpose
company

Hakuba Capital 1 TMK

E Buildings Limited
Liability Company

Ogikubo Building
Y. K.

Azabu Green
Terrace GK

GK North Beach

Domestic industrial
company

Acquisition dateFebruary 1, 2013

March 1, 2013

July 3, 2013

August 9, 2013

September 27, 2013

May 29, 2014

July 4, 2014

August 1, 2014

December 1, 2014

Property Name

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

54

Properties Acquired after Sponsor Change (2)Acquisition Period

19th Fiscal Period

20th Fiscal Period

21st Fiscal Period

LAQUAS Higashi
Shinjuku

Daiwa
AoyamaShinsen Place

Glass City Shibuya

Daiwa
Meguro Square

Daiwa River Gate

Daiwa
Hatchobori ekimae

Daiwa
Hatchobori ekimae West

Daiwa
Nishi-Shinjuku Building

Kirin
Nihonbashi Building

Address

Shinjuku-ku, Tokyo

Shibuya-ku, Tokyo

Shibuya-ku, Tokyo

Shibuya-ku, Tokyo

Meguro-ku, Tokyo

Chuo-ku, Tokyo

Chuo-ku, Tokyo

Chuo-ku, Tokyo

Shinjuku-ku, Tokyo

Chuo-ku, Tokyo

Acquisition Price

8,450 million yen

9,800 million yen

4,800 million yen

16,000 million yen

5,600 million yen

28,000 million yen

2,871 million yen

1,647 million yen

13,710 million yen

8,180 million yen

SellerHigashi Shinjuku Building
TMK

Domestic special
purpose company

Domestic special
purpose company

Glass City TMK

Meguro Place TMK

Temuzu TMK

Domestic industrial
company

Domestic industrial
company

Oversea company

Kirin Beer
Marketing Co., Ltd.

Acquisition date

December 3, 2014

March 2, 2015

March 2, 2015

May 1, 2015

May 1, 2015

June 2, 2015

September 11, 2015

September 11, 2015

March 29, 2016

May 26, 2015

Property Name

Acquisition Period

22nd Fiscal Period
Daiwa Higashinihonbashi

Square Daikanyama
Building

23rd Fiscal Period

Shinjuku West Building

Daiwa Ogikubo

Daiwa
Kanda Mikuracho

25th Fiscal Period
CONCURRED
Yokohama

Daiwa
Kanda East

26th Fiscal Period
Prime Kanda
Building

Kita-Shinagawa
Gotenyama Building

Total

Property Name

Address

Yokohama-shi, Kanagawa

Chiyoda-ku, Tokyo

Chiyoda-ku, Tokyo

Shinagawa-ku, Tokyo

－

1,592 million yen

38,100 million yen

4,200 million yen

1,800 million yen

2,500 million yen

290,799 million yen

GK TC1OH Real EstateManagement Co., Ltd.

GK Yokohama Office
Management

Domestic company

Domestic company

Danke Holdings Co., Ltd.

－

July 21, 2016

December 21, 2016

January 11, 2018

January 12, 2018

June 7, 2018

September 13, 2018－

Chuo-ku, Tokyo

Shibuya-ku, Tokyo

Shinjuku-ku, Tokyo

Suginami-ku, Tokyo

Chiyoda-ku, Tokyo

Acquisition Price

6,370 million yen

2,280 million yen

942 million yen

3,800 million yen

SellerDomestic special purpose
company

Hulic Co., Ltd.

GK TC1

Acquisition dateJune 1, 2016

June 29, 2016

July 21, 2016

(Note) The sum of ; i) the total (scheduled) acquisition price from the time of the above sponsor change up to September 13, 2018 and ii) prices for additional acquisition of existing properties or of the site in existing properties during the same period, is 291,219
million yen. “Ltd.” and “TMK” (Tokutei Mokuteki Kaisha) in sellers’ names refer to a limited liability company and special purpose company, respectively.
⃰ Scheduled acquisition date only for Kita-Shinagawa Gotenyama BuildingThis document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

55

Portfolio Performance Summary (1)Fiscal Period ended May 2018 (25th FP Results by Property)
Daiwa Ginza

Daiwa Ginza Annex

Daiwa Shibaura

Daiwa Minami Aoyama

Daiwa Sarugakucho

Daiwa A Hamamatsucho

Daiwa Jingumae

Property Nam e

14,100Acquisition Price (million yen)

24th FP

3,050
25th FP

24th FP

8,265
25th FP

24th FP

4,550
25th FP

24th FP

3,190
25th FP

24th FP

2,865
25th FP

24th FP

2,800
25th FP

24th FP

25th FPBook Value (million yen)

13,134

13,064

2,776

2,767

8,040

8,014

4,437

4,425

3,210

3,194

2,791

2,777

2,719

Appraisal Value (million yen)

17,20017,400

3,840

3,840

7,870

7,870

4,640

4,640

3,840

3,840

3,560

3,610

2,460

2,460

89.3

95.0

100.0

100.0

99.1

99.1

100.0

84.8

100.0

100.0

100.0

100.0

100.0

100.0

4.53

4.53

3.97

3.97

3.82

3.82

9.19

9.19

7.14

7.14

3.79

3.79

13.33

13.33

Occupancy Rate (% )PML (% ) (Note 1)
Property Management Company(Note 2)

Best Property

Xymax AlphaBest Property

Property Partners

Best Property

Best Property

183

182

183

182

183

182

183

182

183

182

183

182

183

182

(1) Property-related Rev enues (thousand yen)

370,118

380,455

87,031

94,457238,130

259,169

131,445

137,607- (Note 6)- (Note 6)

134,360

135,078

64,83774,785

Rent (incl. common serv ice fees)

370,118

371,555

87,031

94,457

237,052

257,404

131,445

127,380- (Note 6)- (Note 6)

134,360

135,078

64,83774,785

0

8,900

0

0

1,078

1,764

0

10,226- (Note 6)- (Note 6)

0

0

0

0

103,11199,871

28,53921,29874,97859,93529,711

24,862- (Note 6)- (Note 6)

58,02359,477

19,065

15,682Administrativ e Expenses

17,626

18,635

7,938

3,837

21,653

12,217

3,822

3,710

- (Note 6)- (Note 6)

8,336

8,298

5,717

2,858

Utility Charges

26,51824,334

6,364

5,789

19,311

18,758

7,814

6,284

- (Note 6)- (Note 6)

8,694

8,566

4,843

4,690

Property Management Fee

5,681

5,446

1,275

1,467

3,572

3,931

2,031

2,154

- (Note 6)- (Note 6)

2,002

2,054

1,390

1,200

Tax and Public Due

27,91527,911

9,106

9,104

19,59919,588

11,931

11,931- (Note 6)- (Note 6)

8,775

8,770

6,357

6,357

Number of operating days

Profits from property-related activities

Best Property

2,711

Other Rev enues (Note 3)(2) Property-related Expenses (thousand yen)

Non-life Insurance Costs
Repair Expenses

370

369

86

86

339

338

135

134

- (Note 6)- (Note 6)

158

157

73

73

13,157

11,331

3,767

1,013

10,501

5,080

3,975

646

- (Note 6)- (Note 6)

656

2,231

675

496

11,841

11,841

0

0

0

20

0

0

- (Note 6)- (Note 6)

29,40029,40077(3) NOI (=(1)-(2)) (Note 4) (thousand yen)

267,007

280,584

58,49273,158163,151

199,234

101,734

112,745

67,38345,60776,33775,60045,772

59,102

Annualized NOI (thousand yen)

532,555

562,710

116,665

146,719

325,412399,562

202,913226,110

134,399

91,465

152,256

151,616

91,295

118,529

4.1%

4.3%

4.2%

5.3%

4.0%

5.0%

4.6%

5.1%

4.2%

2.9%

5.5%

5.5%

3.4%

4.4%

74,422

74,864

10,264

10,30028,842

29,682

14,041

14,273- (Note 6)- (Note 6)

15,111

15,119

9,204

9,221

0

8,900

0

0

167

271

0

0

- (Note 6)- (Note 6)

0

0

0

0

0

0

0

0

0

64

0

0

- (Note 6)- (Note 6)

0

0

0

0

Other Expenses(Reference)

NOI Yield(Note 5)

Depreciation and amortization (thousand yen)Repair Work (thousand yen)
Proceeds from Amortization of Leasehold andSecurity (thousand yen)

(Note 1) Sompo Risk Care Management Inc. has prepared the PML for the 25th fiscal period. The figures entered for PML are the figures in the Portfolio Earthquake PML Assessment Report (June 2018).
(Note 2) For profits from property-related activities, actual results are used and displayed by rounding down to the nearest thousand yen.
(Note 3) Other Revenues includes Proceeds for Restoration and Repair Work or Proceeds from Amortization of Leasehold and Security Deposits.
(Note 4) (3) NOI in this table is calculated by adjusting the Tax and Public Due for the “NOI (after deduction of gain on sale)”aforementioned in the Appendix “Major Financial Data” so the figures do not match.
(Note 5) NOI Yield is calculated by dividing annualized NOI in (3) on the table by the book value.
(Note 6) Not disclosed due to tenant's request.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

56

Portfolio Performance Summary (2)Fiscal Period ended May 2018 (25th FP Results by Property)
Daiwa Shibadaimon

Daiwa Misakicho

Daiwa Shimbashi 510

Daiwa Tsukijiekimae

Daiwa Tsukiji

Daiwa Tsukishima

Daiwa Nihonbashi Horidomecho

Property Nam e

2,578

Acquisition Price (million yen)

24th FP

2,346
25th FP

24th FP

2,080
25th FP

24th FP

1,560
25th FP

24th FP

1,240
25th FP

24th FP

7,840
25th FP

24th FP

2,520
25th FP

24th FP

25th FPBook Value (million yen)

2,410

2,398

2,163

2,151

2,128

2,141

1,301

1,289

1,144

1,141

6,937

6,888

2,469

2,465

Appraisal Value (million yen)

3,090

3,110

2,850

2,860

2,530

2,530

1,880

2,000

1,610

1,610

10,10010,500

2,660

2,660

Occupancy Rate (% )

100.0

100.0

100.0

100.0

89.4

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

PML (% ) (Note 1)

3.72

3.72

4.24

4.24

5.51

5.51

4.23

4.23

4.98

4.98

4.87

4.87

4.68

4.68

Property Management Company(Note 2)

Best Property

Property Partners

MS Building Support

Xymax Alpha

Property Partners

Best Property

183

182

183

182

183

182

183

182

183

182

183

182

183

182

(1) Property-related Rev enues (thousand yen)

86,875

86,155- (Note 6)- (Note 6)

79,144

66,20555,02758,61751,76351,876

183,601

270,637

84,642

84,185

Rent (incl. common serv ice fees)

86,875

86,155- (Note 6)- (Note 6)

79,144

66,20555,02758,61751,46351,726

183,601

270,637

84,642

84,18500- (Note 6)- (Note 6)

0

0

0

0

300

150

0

0

0

0

22,974

19,664- (Note 6)- (Note 6)

18,581

27,43917,226

15,33010,451

11,36742,213

43,10618,137

17,520Administrativ e Expenses

5,874

5,820

- (Note 6)- (Note 6)

3,817

5,413

4,590

3,071

2,371

2,342

8,492

8,186

4,126

3,841

Utility Charges

6,641

5,896

- (Note 6)- (Note 6)

6,415

5,039

6,164

5,853

2,764

2,849

14,088

14,277

5,192

4,967

Property Management Fee

1,302

1,294

- (Note 6)- (Note 6)

1,210

1,200

1,200

1,200

1,200

1,200

2,878

4,211

1,281

1,281

Tax and Public Due

6,254

6,254

- (Note 6)- (Note 6)

5,665

5,664

5,066

5,067

3,861

3,861

13,727

13,727

6,720

6,719

Number of operating days

Profits from property-related activities

Best Property

Other Rev enues (Note 3)(2) Property-related Expenses (thousand yen)

Non-life Insurance Costs
Repair Expenses

107

107

- (Note 6)- (Note 6)

110

109

86

86

56

55

257

256

117

116

2,793

291

- (Note 6)- (Note 6)

1,361

10,012

99

34

198

1,058

2,769

2,446

700

594

0

0

- (Note 6)- (Note 6)

0

0

18

18

0

0

0

0

0

0

(3) NOI (=(1)-(2)) (Note 4) (thousand yen)

63,90066,491

63,51463,00560,56338,76537,801

43,28741,31240,508141,387

227,530

66,504

66,664

Annualized NOI (thousand yen)

127,452

133,347

126,682

126,356

120,795

77,74475,39586,81282,39881,239282,003456,311

132,645

133,695

5.3%

5.6%

5.9%

5.9%

5.7%

3.6%

5.8%

6.7%

7.2%

7.1%

4.1%

6.6%

5.4%

5.4%

11,445

11,436- (Note 6)- (Note 6)

8,421

8,570

13,127

13,141

7,359

7,452

57,44857,484

14,71815,03200- (Note 6)- (Note 6)

0

0

0

0

0

0

0

0

0

0

0

0

- (Note 6)- (Note 6)

0

0

0

0

0

0

0

0

0

0

Other Expenses(Reference)

NOI Yield(Note 5)

Depreciation and amortization (thousand yen)Repair Work (thousand yen)
Proceeds from Amortization of Leasehold andSecurity (thousand yen)

(Note 1) Sompo Risk Care Management Inc. has prepared the PML for the 25th fiscal period. The figures entered for PML are the figures in the Portfolio Earthquake PML Assessment Report (June 2018).
(Note 2) For profits from property-related activities, actual results are used and displayed by rounding down to the nearest thousand yen.
(Note 3) Other Revenues includes Proceeds for Restoration and Repair Work or Proceeds from Amortization of Leasehold and Security Deposits.
(Note 4) (3) NOI in this table is calculated by adjusting the Tax and Public Due for the “NOI (after deduction of gain on sale)”aforementioned in the Appendix “Major Financial Data” so the figures do not match.
(Note 5) NOI Yield is calculated by dividing annualized NOI in (3) on the table by the book value.
(Note 6) Not disclosed due to tenant's request.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

57

Portfolio Performance Summary (3)Fiscal Period ended May 2018 (25th FP Results by Property)
Daiwa Azabudai

Daiwa Kyobashi

Shinjuku Maynds Tower

Daiwa Onarimon

Daiwa Kojimachi 4-chome

Daiwa SHIBUYA EDGE

(Note 6)

Daiwa Kodemmacho

Property Nam e

1,600

Acquisition Price (million yen)

24th FP

3,460
25th FP

24th FP

2,910
25th FP

24th FP

13,86025th FP

24th FP

25th FP133,800

66,90024th FP

25th FP

5,900
24th FP

2,460
25th FP

24th FP

25th FPBook Value (million yen)

1,515

1,516

3,244

3,225

2,843

2,846

13,36913,348129,391

64,538

5,672

5,655

2,383

2,374

Appraisal Value (million yen)

1,930

1,930

3,490

3,450

2,830

2,810

13,90013,700125,000

62,600

5,190

5,190

2,260

2,260

Occupancy Rate (% )

100.0

100.0

87.9

100.0

100.0

100.0

100.0

100.0

96.6

99.8

100.0

100.0

100.0

100.0

6.64

6.64

4.51

4.51

6.19

6.19

3.89

3.89

2.03

2.03

1.56

1.56

4.19

4.19

PML (% )(Note 1)

Property Management Company

Best Property

Best Property

Xymax Alpha

Xymax Alpha

Xymax Alpha

Property Partners

183

182

183

182

183

182

183

182

183

182

183

182

183

182

(1) Property-related Rev enues (thousand yen)

56,08356,444

81,53992,251

93,504

86,137353,113355,2192,574,643

1,861,881

127,518

126,961

65,11364,968Rent (incl. common serv ice fees)

56,08355,571

81,53992,251

93,504

86,137353,113355,2192,566,311

1,861,818

127,518

126,961

65,11364,968

0

872

0

0

0

0

0

0

8,331

62

0

0

0

0

13,157

12,172

21,87923,76429,66929,49984,292

101,352

725,784

603,265

33,73850,84420,995

13,732

Number of operating days

Profits from property-related activities(Note 2)

Best Property

Other Rev enues (Note 3)(2) Property-related Expenses (thousand yen)
Administrativ e Expenses

2,820

2,454

5,088

7,063

5,044

5,483

13,853

12,671

144,229

110,808

5,013

5,223

3,048

2,841

Utility Charges

3,421

3,134

7,308

7,395

7,692

6,765

24,89022,885

281,692

201,302

7,639

6,991

4,781

4,458

Property Management Fee

1,200

1,200

1,238

1,434

1,400

1,288

3,581

3,553

17,554

13,359

1,913

1,905

1,200

1,218

Tax and Public Due

4,916

4,916

7,111

7,110

14,946

14,94634,92534,925

253,488

253,508

7,227

7,226

3,642

3,642

Non-life Insurance Costs

66

65

114

112

127

126

356

355

3,242

2,399

93

92

83

82

Repair Expenses

733

402

1,018

596

458

889

6,685

26,961

18,691

20,068

11,851

29,404

7,415

666

0

0

0

50

0

0

0

0

6,885

1,819

0

0

822

822

(3) NOI (=(1)-(2)) (Note 4) (thousand yen)

42,92544,271

59,66068,487

63,83556,638268,821

253,866

1,848,859

1,258,615

93,78076,117

44,11851,235

Annualized NOI (thousand yen)

102,753

Other Expenses(Reference)

NOI Yield

85,61788,786

118,994

137,351

127,321

113,587

536,173

509,128

3,687,615

2,524,145

187,048

152,652

87,995(Note 5)

5.6%

5.9%

3.7%

4.3%

4.5%

4.0%

4.0%

3.8%

2.8%

2.6%

3.3%

2.7%

3.7%

4.3%

Depreciation and amortization (thousand yen)

8,900

9,173

19,99520,027

12,832

13,13731,287

31,529395,550

299,952

16,424

16,598

9,477

9,731

0

0

0

0

0

0

0

0

8,331

0

0

0

0

0

0

14

0

0

0

0

0

0

0

0

0

0

0

0

Repair Work (thousand yen)
Proceeds from Amortization of Leasehold andSecurity (thousand yen)

(Note 1) Sompo Risk Care Management Inc. has prepared the PML for the 25th fiscal period. The figures entered for PML are the figures in the Portfolio Earthquake PML Assessment Report (June 2018).
(Note 2) For profits from property-related activities, actual results are used and displayed by rounding down to the nearest thousand yen.
(Note 3) Other Revenues includes Proceeds for Restoration and Repair Work or Proceeds from Amortization of Leasehold and Security Deposits.
(Note 4) (3) NOI in this table is calculated by adjusting the Tax and Public Due for the “NOI (after deduction of gain on sale)”aforementioned in the Appendix “Major Financial Data” so the figures do not match.
(Note 5) NOI Yield is calculated by dividing annualized NOI in (3) on the table by the book value.
(Note 6) 3/7 of co-ownership interest was sold in 25th FP. The book value of Shinjuku Maynds Tower in (3) NOI Yield for 25th FP on the table is the weighted average of book value at the beginning of fiscal period and book value at the end of fiscal period.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

58

Portfolio Performance Summary (4)Fiscal Period ended May 2018 (25th FP Results by Property)
Daiwa Jimbocho

Daiwa Nishishimbashi

Daiwa Kayabacho Building

Daiwa Jinbocho 3-chome

E SPACE TOWER

Daiwa Nihonbashi Hongokucho

shinyon curumu

Property Nam e

Acquisition Price (million yen)

4,150

5,000

5,600

3,550

24,000

1,721

9,650
25th FP

24th FP

25th FP

24th FP

25th FP

24th FP

25th FP

24th FP

25th FP

24th FP

25th FP

24th FP

25th FP

24th FPBook Value (million yen)

4,024

4,003

4,767

4,735

5,287

5,259

3,393

3,373

23,58923,610

1,604

1,592

9,706

9,685

Appraisal Value (million yen)

3,620

3,620

6,520

6,570

8,160

8,170

4,900

5,060

33,40033,500

2,470

2,560

15,50015,600Occupancy Rate (% )

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

92.8

100.0

100.0

100.0

99.5

99.5

PML (% ) (Note 1)

5.05

5.05

3.76

3.76

4.50

4.50

5.33

5.33

3.11

3.11

3.80

3.80

4.44

4.44

Property Management Company

Profits from property-related activities(Note 2)

Number of operating days

Japan Property Solutions

Xy max Alpha

Property Partners

Japan Property Solutions

Xy max AlphaMS Building Support

MS Building Support

183

182

183

182

183

182

183

182

183

182

183

182

183

182

(1) Property-related Rev enues (thousand yen)

107,066

106,977

174,153

174,861- (Note 6)- (Note 6)

90,094

115,919765,656

742,540

65,44857,230361,496

370,014

Rent (incl. common serv ice fees)

107,066

106,977

174,153

174,861- (Note 6)- (Note 6)

90,094

104,483

765,656

742,540

64,01857,230361,496

370,014

0

0

0

0

- (Note 6)- (Note 6)0

11,436

0

0

1,429

0

0

0

28,22428,881

47,20849,754- (Note 6)- (Note 6)30,922

25,693

175,538

177,177

14,43013,681

92,92280,147Administrativ e Expenses

5,404

5,028

13,68814,039- (Note 6)- (Note 6)

10,3828,125

43,816

53,691

5,067

4,382

25,43018,745

Utility Charges

7,210

7,078

11,801

11,005- (Note 6)- (Note 6)

7,039

6,459

55,081

46,049

3,220

3,171

23,27021,963

Property Management Fee

1,200

1,200

2,303

2,311

- (Note 6)- (Note 6)

1,408

1,568

7,692

7,287

1,200

1,200

3,641

3,724

10,898

10,89815,751

15,750- (Note 6)- (Note 6)

9,366

9,366

56,76356,762

4,398

4,398

33,35733,357

Other Rev enues (Note 3)(2) Property-related Expenses (thousand yen)Tax and Public Due
Non-life Insurance Costs
Repair Expenses
Other Expenses(3) NOI (=(1)-(2)) (Note 4) (thousand yen)
Annualized NOI (thousand yen)

(Reference)

NOI Yield(Note 5)

Depreciation and amortization (thousand yen)Repair Work (thousand yen)
Proceeds from Amortization of Leasehold andSecurity (thousand yen)

119

118

215

214

- (Note 6)- (Note 6)

111

109

574

565

65

67

278

280

3,351

4,297

3,447

6,432

- (Note 6)- (Note 6)

2,614

64

11,53812,405

477

461

6,944

2,050

40

260

0

0

- (Note 6)- (Note 6)

0

0

72

416

0

0

0

25

78,84278,096

126,945

125,106

148,273

148,62159,171

90,225590,117565,363

51,01843,548

268,573

289,866

157,254

156,621

253,196

250,901

295,736

298,059

118,020

180,947

1,177,010

1,133,832

101,758

87,336535,679

581,326

3.9%

3.9%

5.3%

5.3%

5.6%

5.7%

3.5%

5.4%

5.0%

4.8%

6.3%

5.5%

5.5%

6.0%

21,05821,06934,70734,985- (Note 6)- (Note 6)

19,836

19,836

69,33370,347

13,187

13,27435,956

36,1160000- (Note 6)- (Note 6)

0

0

0

0

0

0

0

0

0

0

0

0

- (Note 6)- (Note 6)

0

0

0

0

0

0

0

0

(Note 1) Sompo Risk Care Management Inc. has prepared the PML for the 25th fiscal period. The figures entered for PML are the figures in the Portfolio Earthquake PML Assessment Report (June 2018).
(Note 2) For profits from property-related activities, actual results are used and displayed by rounding down to the nearest thousand yen.
(Note 3) Other Revenues includes Proceeds for Restoration and Repair Work or Proceeds from Amortization of Leasehold and Security Deposits.
(Note 4) (3) NOI in this table is calculated by adjusting the Tax and Public Due for the “NOI (after deduction of gain on sale)”aforementioned in the Appendix “Major Financial Data” so the figures do not match.
(Note 5) NOI Yield is calculated by dividing annualized NOI in (3) on the table by the book value.
(Note 6) Not disclosed due to tenant's request.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

59

Portfolio Performance Summary (5)Fiscal Period ended May 2018 (25th FP Results by Property)
Daiw a Shibuy a

Daiw a Akasaka

Daiw a Azabu Terrace

Miy amasuzaka

Daiw a Ebisu 4-chome

LAQUAS Higashi

Daiw a Aoy ama

Shinjuku

Shinsen Place

Property Nam e

9,200

Acquisition Price (million yen)

7,000
25th FP

24th FP

24th FP

14,00025th FP

24th FP

4,135

25th FP

24th FP

8,450
25th FP

24th FP

9,800
25th FP

24th FP

4,800
25th FP

24th FP

25th FPBook Value (million yen)

9,400

9,422

7,221

7,200

14,114

14,080

4,266

4,254

8,516

8,484

10,051

10,031

4,904

4,890

Appraisal Value (million yen)

13,70014,000

8,740

9,350

16,10016,600

5,950

6,040

10,70010,80012,40012,400

6,710

6,720

Occupancy Rate (% )

91.4

100.0

100.0

100.0

99.6

99.6

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

PML (% ) (Note 1)

7.14

7.14

5.64

5.64

2.67

2.67

2.44

2.44

4.46

4.46

4.42

4.42

6.21

6.21

Property Management Company

Japan Property Solutions

Best Property

MS Building Support

ITOCHU Urban Community

MS Building Support

MS Building Support

183

182

183

182

183

182

183

182

183

182

183

182

183

182

(1) Property-related Rev enues (thousand yen)

336,091

335,679

240,163

246,718

473,068

466,978- (Note 6)- (Note 6)

226,954

226,481

212,474

248,326- (Note 6)- (Note 6)

Rent (incl. common serv ice fees)

336,091

335,679

237,913

246,718

473,068

466,978- (Note 6)- (Note 6)

226,954

226,481

212,474

248,326- (Note 6)- (Note 6)

0

0

2,250

0

0

0

- (Note 6)- (Note 6)

0

0

0

0

- (Note 6)- (Note 6)- (Note 6)

Number of operating days

Profits from property-related activities(Note 2)

Xymax Alpha

Other Rev enues (Note 3)

115,332

110,522

67,21759,715

117,700

109,925- (Note 6)- (Note 6)

47,31852,791

40,71336,506- (Note 6)

Administrativ e Expenses

28,63623,242

23,344

19,84529,203

26,195- (Note 6)- (Note 6)

9,983

15,654

18,0389,182- (Note 6)- (Note 6)

Utility Charges

42,131

32,037

15,597

13,896

48,63945,773- (Note 6)- (Note 6)

13,66012,500

6,605

6,841

- (Note 6)- (Note 6)(2) Property-related Expenses (thousand yen)

Property Management Fee

3,654

3,763

2,907

2,951

4,191

4,212

- (Note 6)- (Note 6)

1,200

1,200

2,546

2,981

- (Note 6)- (Note 6)

Tax and Public Due

33,151

33,15020,06820,12931,73031,725- (Note 6)- (Note 6)

20,334

20,334

12,742

12,710- (Note 6)- (Note 6)

360

357

252

250

512

508

- (Note 6)- (Note 6)

264

262

132

129

- (Note 6)- (Note 6)

7,397

17,970

5,046

2,581

3,423

1,509

- (Note 6)- (Note 6)

1,717

2,613

648

4,661

- (Note 6)- (Note 6)

Non-life Insurance Costs
Repair Expenses

0

0

0

60

0

0

- (Note 6)- (Note 6)

158

226

0

0

- (Note 6)- (Note 6)(3) NOI (=(1)-(2)) (Note 4) (thousand yen)

220,758

225,156

172,946

187,002355,367

357,053

55,547-60,268

179,635

173,689

171,761

211,819

112,101

116,938

Annualized NOI (thousand yen)

440,311451,550

344,947

375,032

708,793

716,068

110,791-120,867

358,289

348,332

342,584

424,802223,589234,519

4.7%

4.8%

4.8%

5.2%

5.0%

5.1%

2.6%

-2.8%

4.2%

4.1%

3.4%

4.2%

4.6%

4.8%

26,19427,35021,96422,50050,97751,314- (Note 6)- (Note 6)

32,45932,466

19,541

19,554- (Note 6)- (Note 6)

0

0

2,250

0

0

0

- (Note 6)- (Note 6)

0

0

0

0

- (Note 6)- (Note 6)

0

0

0

0

0

0

- (Note 6)- (Note 6)

0

0

0

0

- (Note 6)- (Note 6)

Other Expenses(Reference)

NOI Yield(Note 5)

Depreciation and amortization (thousand yen)Repair Work (thousand yen)
Proceeds from Amortization of Leasehold andSecurity (thousand yen)

(Note 1) Sompo Risk Care Management Inc. has prepared the PML for the 25th fiscal period. The figures entered for PML are the figures in the Portfolio Earthquake PML Assessment Report (June 2018).
(Note 2) For profits from property-related activities, actual results are used and displayed by rounding down to the nearest thousand yen.
(Note 3) Other Revenues includes Proceeds for Restoration and Repair Work or Proceeds from Amortization of Leasehold and Security Deposits.
(Note 4) (3) NOI in this table is calculated by adjusting the Tax and Public Due for the “NOI (after deduction of gain on sale)”aforementioned in the Appendix “Major Financial Data” so the figures do not match.
(Note 5) NOI Yield is calculated by dividing annualized NOI in (3) on the table by the book value.
(Note 6) Not disclosed due to tenant's request.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

60

Portfolio Performance Summary (6)Fiscal Period ended May 2018 (25th FP Results by Property)
Glass City Shibuya

Daiwa River Gate

Daiwa Hatchobori ekimae

Daiwa Nishi-Shinjuku Building Kir in Nihonbashi Building

Daiwa Hatchobori ekimae West

Daiwa Higashi-nihonbashi Building

Property Nam e

16,000Acquisition Price (million yen)

24th FP

28,00025th FP

24th FP

2,871
25th FP

24th FP

1,647
25th FP

24th FP

13,71025th FP

24th FP

8,180
25th FP

24th FP

6,370
25th FP

24th FP

25th FPBook Value (million yen)

16,012

15,97928,11328,001

2,954

2,944

1,730

1,726

13,957

13,947

8,299

8,278

6,363

6,339

Appraisal Value (million yen)

18,30018,30030,20030,900

3,300

3,320

1,850

1,850

15,50015,800

8,290

8,290

6,780

6,780

Occupancy Rate (% )

100.0

100.0

98.1

99.4

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

PML (% ) (Note 1)

1.61

1.61

1.76

1.76

5.89

5.89

7.03

7.03

4.32

4.32

5.76

5.76

4.37

4.37

Property Management Company(Note 2)

Best Property

ITOCHU Urban Community

ITOCHU Urban Community

MS Building Support

Japan Property Solutions

ITOCHU Urban Community

183

182

183

182

183

182

183

182

183

182

183

182

183

182

(1) Property-related Rev enues (thousand yen)

397,641

419,281

913,419

1,038,944

76,95780,096

46,54546,583324,970

335,754- (Note 6)- (Note 6)

167,565

170,674

Rent (incl. common serv ice fees)

397,641

419,281909,946

1,035,249

76,95780,096

46,54546,583324,970

335,754- (Note 6)- (Note 6)

167,565

170,674

0

0

3,473

3,695

0

0

0

0

0

0

- (Note 6)- (Note 6)0080,694116,475

385,178

323,792

28,03323,716

11,676

11,75376,56470,635- (Note 6)- (Note 6)

33,37133,366

Administrativ e Expenses

15,176

11,80880,71573,288

8,407

6,618

3,250

3,351

15,565

13,373- (Note 6)- (Note 6)

5,931

9,962

Utility Charges

26,19323,238118,875

119,803

6,457

5,560

2,846

2,804

18,64916,847- (Note 6)- (Note 6)

9,966

9,309

Property Management Fee

4,605

4,397

9,061

10,587

1,200

1,200

1,200

1,200

2,309

2,343

- (Note 6)- (Note 6)

1,675

1,715

Tax and Public Due

27,19027,191

103,867

103,867

8,980

8,979

4,025

4,025

35,32035,320- (Note 6)- (Note 6)

11,337

11,337

316

313

1,537

1,517

110

109

57

56

266

267

- (Note 6)- (Note 6)

179

178

7,211

49,525

71,12014,606

2,878

1,248

296

315

4,452

2,483

- (Note 6)- (Note 6)

4,281

863

Number of operating days

Profits from property-related activities

Xymax Alpha

Other Rev enues (Note 3)(2) Property-related Expenses (thousand yen)

Non-life Insurance Costs
Repair Expenses

0

0

0

120

0

0

0

0

0

0

- (Note 6)- (Note 6)00(3) NOI (=(1)-(2)) (Note 4) (thousand yen)

316,947

302,805

528,241

715,152

48,92356,37934,86834,829248,405

265,119

160,691

108,940

134,193

137,308

Annualized NOI (thousand yen)632,162

607,274

1,053,596

1,434,234

97,580113,068

69,547

69,850495,454531,694

320,504

218,479

267,653

275,371

3.9%

3.8%

3.7%

5.1%

3.3%

3.8%

4.0%

4.0%

3.5%

3.8%

3.9%

2.6%

4.2%

4.3%

32,98633,054

163,993

166,152

10,216

10,310

5,247

5,239

18,371

18,359- (Note 6)- (Note 6)

25,12325,126

0

0

578

705

0

0

0

0

0

0

- (Note 6)- (Note 6)

0

0

0

0

550

222

0

0

0

0

0

0

- (Note 6)- (Note 6)00

Other Expenses(Reference)

NOI Yield(Note 5)

Depreciation and amortization (thousand yen)Repair Work (thousand yen)
Proceeds from Amortization of Leasehold andSecurity (thousand yen)

(Note 1) Sompo Risk Care Management Inc. has prepared the PML for the 25th fiscal period. The figures entered for PML are the figures in the Portfolio Earthquake PML Assessment Report (June 2018).
(Note 2) For profits from property-related activities, actual results are used and displayed by rounding down to the nearest thousand yen.
(Note 3) Other Revenues includes Proceeds for Restoration and Repair Work or Proceeds from Amortization of Leasehold and Security Deposits.
(Note 4) (3) NOI in this table is calculated by adjusting the Tax and Public Due for the “NOI (after deduction of gain on sale)”aforementioned in the Appendix “Major Financial Data” so the figures do not match.
(Note 5) NOI Yield is calculated by dividing annualized NOI in (3) on the table by the book value.
(Note 6) Not disclosed due to tenant's request.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

61

Portfolio Performance Summary (7)Fiscal Period ended May 2018 (25th FP Results by Property)
Square Daikanyama Building

Shinjuku West Building

Daiwa Kanda Mikuracho Building

Daiwa Kanda East

Daiwa Higashi-Ikebukuro

Daiwa Shinagawa North

Daiwa Osaki 3-chome

Property Nam e

2,280

Acquisition Price (million yen)

24th FP

942
25th FP

24th FP

1,592
25th FP

24th FP

4,200
25th FP

24th FP

2,958
25th FP

24th FP

7,710
25th FP

24th FP

1,650
25th FP

24th FP

25th FPBook Value (million yen)

2,389

2,383

983

981

1,604

1,601

-

4,249

2,679

2,661

7,185

7,169

1,617

Appraisal Value (million yen)

2,600

2,620

1,230

1,230

1,710

1,710

-

5,120

3,880

4,050

6,170

6,170

2,340

2,340

Occupancy Rate (% )

100.0

100.0

100.0

100.0

100.0

100.0

-

91.8

100.0

100.0

100.0

100.0

100.0

100.0

6.21

6.21

8.28

8.28

6.01

6.01

-

3.86

3.55

3.55

7.19

7.19

6.14

6.14

PML (% ) (Note 1)
Property Management Company
Number of operating days

Profits from property-related activities(Note 2)

(1) Property-related Rev enues (thousand yen)

Xymax Alpha

ITOCHU Urban Community

Best Property

ITOCHU Urban Community

Best Property

Best Property

1,605

Xymax Alpha

183

182

183

182

183

182

-

140

183

182

183

182

183

182

- (Note 6)- (Note 6)

37,99038,09824,95446,530-89,922

119,909

127,028

194,598

191,154

65,52665,42465,424

Rent (incl. common serv ice fees)- (Note 6)- (Note 6)

37,99038,09824,95446,530-87,622

119,909

127,028

194,598

191,154

65,526

Other Rev enues (Note 3)- (Note 6)- (Note 6)

0

0

0

0

-

2,300

0

0

0

0

0

0

- (Note 6)- (Note 6)

11,41531,23918,205

11,441-

16,38837,23937,11752,60051,842

11,198

11,295Administrativ e Expenses- (Note 6)- (Note 6)

2,075

2,004

8,736

4,463

-

7,585

12,124

9,159

12,922

14,667

2,716

2,512

Utility Charges- (Note 6)- (Note 6)

2,779

2,467

1,808

2,109

-

5,514

12,445

13,246

15,692

14,418

3,243

3,122

Property Management Fee- (Note 6)- (Note 6)

1,200

1,200

1,200

1,200

-

995

1,777

1,938

2,918

2,876

1,200

1,200

Tax and Public Due- (Note 6)- (Note 6)

3,113

3,113

3,370

3,373

-

8

8,580

8,580

18,32718,327

3,922

3,922

Non-life Insurance Costs- (Note 6)- (Note 6)

37

36

48

47

-

99

189

188

292

290

58

58

Repair Expenses- (Note 6)- (Note 6)

2,198

22,417

2,812

248

-

2,185

2,121

4,003

2,446

1,261

57

480

Other Expenses(2) Property-related Expenses (thousand yen)

- (Note 6)- (Note 6)

12

0

228

0

-

0

0

0

0

0

0

0

(3) NOI (=(1)-(2)) (Note 4) (thousand yen)

44,11049,681

26,574

6,859

6,748

35,089-73,53382,67089,911

141,998

139,31254,327

54,128Annualized NOI (thousand yen)

87,97999,63553,004

13,756

13,46070,371-

191,712

164,888

180,316

283,220

279,389

108,358

108,554

3.7%

4.2%

5.4%

1.4%

0.8%

4.4%

-

4.5%

6.2%

6.8%

3.9%

3.9%

6.7%

6.8%

Depreciation and amortization (thousand yen)

- (Note 6)- (Note 6)

2,185

2,248

4,935

4,952

-

13,47823,721

23,837

34,622

34,937

11,401

11,408

Repair Work (thousand yen)

- (Note 6)- (Note 6)

0

0

0

0

-

0

0

0

0

0

0

0

- (Note 6)- (Note 6)

0

0

0

0

-

0

0

0

0

0

0

0

(Reference)

NOI Yield(Note 5)

Proceeds from Amortization of Leasehold andSecurity (thousand yen)

(Note 1) Sompo Risk Care Management Inc. has prepared the PML for the 25th fiscal period. The figures entered for PML are the figures in the Portfolio Earthquake PML Assessment Report (June 2018).
(Note 2) For profits from property-related activities, actual results are used and displayed by rounding down to the nearest thousand yen.
(Note 3) Other Revenues includes Proceeds for Restoration and Repair Work or Proceeds from Amortization of Leasehold and Security Deposits.
(Note 4) (3) NOI in this table is calculated by adjusting the Tax and Public Due for the “NOI (after deduction of gain on sale)”aforementioned in the Appendix “Major Financial Data” so the figures do not match.
(Note 5) NOI Yield is calculated by dividing annualized NOI in (3) on the table by the book value.
(Note 6) Not disclosed due to tenant's request.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

62

Portfolio Performance Summary (8)Fiscal Period ended May 2018 (25th FP Results by Property)
Daiwa Kamiooka

Integr al Tower

Daiwa Megur o Squar e

Daiwa Ogikubo

Daiwa Meieki (Note 6)

CONCURRED Yokohama

Daiwa Kitahama

Total (Note 7)

Property Nam e

2,000

Acquisition Price (million yen)

15,22025th FP

24th FP

24th FP

5,600
25th FP

24th FP

3,800
25th FP

24th FP38,10025th FP

24th FP

5,300
25th FP

24th FP

9,481
25th FP

24th FP

25th FP

469,341

439,44124th FP

25th FPBook Value (million yen)

1,930

1,911

14,89815,917

5,553

5,531

4,001

3,989

-

38,315

5,222

-

9,321

9,276

459,753432,377

Appraisal Value (million yen)

2,750

2,750

19,70020,500

6,750

6,810

4,490

4,540

-

39,4007,990-

11,70011,700527,130

506,040

Occupancy Rate (% )

100.0

100.0

100.0

100.0

100.0

100.0

100.0

100.0

-

93.2

97.0

-

100.0

100.0

98.2

99.0

PML (% ) (Note 1)

6.29

6.29

1.18

1.18

1.68

1.68

6.41

6.41

-

0.92

10.31

-

3.48

3.48

2.06

1.96

Property Management Company

Profits from property-related activities (Note 2)

Xymax Alpha

Xymax Alpha

Xymax Alpha

ITOCHU Urban Community

Jones Lang LaSalle

Xymax Alpha

Japan Property Solutions

183

182

183

182

183

182

183

182

-

141

183

19

183

182

183

182

(1) Property-related Rev enues (thousand yen)

92,232

93,325604,576592,062

152,041

148,235

124,931

120,889-735,742

254,455

26,729339,071

310,496

12,735,226

12,910,074

Rent (incl. common serv ice fees)

92,232

93,325604,576592,062

152,041

148,235

124,931

120,889-735,742

254,455

24,729339,071

310,496

12,718,363

12,868,665

0

0

0

0

0

0

0

0

-

0

0

2,000

0

0

16,863

41,40919,734

20,646

189,584

257,037

34,94333,807

24,94426,073-110,876

65,597

27,465

101,399

99,622

3,507,492

3,635,334

Administrativ e Expenses

4,453

4,467

52,144

51,298

8,219

9,697

8,464

9,407

-

53,381

19,195

2,914

24,74928,315827,125

817,951

Utility Charges

7,601

7,981

76,772

71,746

8,753

7,948

6,167

5,752

-

47,026

16,6233,531

35,60029,902

1,095,647

998,451

Property Management Fee

1,203

1,213

6,650

6,573

1,938

1,849

1,373

1,548

-

4,389

3,050

336

5,051

4,703

141,924

144,270

Tax and Public Due

6,284

6,283

44,42644,423

13,524

13,523

7,773

7,772

-

1

20,16918,84032,771

32,7701,110,288

1,108,572

Number of operating days

Other Rev enues (Note 3)(2) Property-related Expenses (thousand yen)

Non-life Insurance Costs

101

100

746

743

148

147

127

126

-

594

327

34

497

492

14,77014,249Repair Expenses

89

600

8,664

81,822

2,359

640

1,037

1,466

-

5,132

6,225

1,808

2,634

3,340

267,966

505,704

0

0

180

430

0

0

0

0

-

350

7

0

96

96

49,76946,134(3) NOI (=(1)-(2)) (Note 4) (thousand yen)

72,49872,678414,992

335,025

117,098

114,427

99,987

94,816-

624,866

188,857-736

237,671

210,874

9,227,733

9,274,739

Annualized NOI (thousand yen)

144,600

145,756

827,716

671,891

233,556

229,483

199,428

190,153-

1,617,561

376,682-

474,045422,907

18,405,042

19,010,552

7.5%

7.6%

5.6%

4.2%

4.2%

4.1%

5.0%

4.8%

-

4.2%

7.2%

-

5.1%

4.6%

4.0%

4.1%

18,06518,06572,97386,72922,706

22,79012,817

12,881-

93,31035,583

5,949

53,67653,881

1,768,826

1,772,039

0

0

0

0

0

0

0

0

-

0

0

2,000

0

0

11,327

11,876

0

0

0

0

0

0

0

0

-

0

0

0

0

0

550

301

Other Expenses(Reference)

NOI Yield (Note 5)
Depreciation and amortization (thousand yen)Repair Work (thousand yen)
Proceeds from Amortization of Leasehold andSecurity (thousand yen)

(Note 1) Sompo Risk Care Management Inc. has prepared the PML for the 25th fiscal period. The figures entered for PML are the figures in the Portfolio Earthquake PML Assessment Report (June 2018).
(Note 2) For profits from property-related activities, actual results are used and displayed by rounding down to the nearest thousand yen.
(Note 3) Other Revenues includes Proceeds for Restoration and Repair Work or Proceeds from Amortization of Leasehold and Security Deposits.
(Note 4) (3) NOI in this table is calculated by adjusting the Tax and Public Due for the “NOI (after deduction of gain on sale)”aforementioned in the Appendix “Major Financial Data” so the figures do not match.
(Note 5) NOI Yield is calculated by dividing annualized NOI in (3) on the table by the book value at the end of fiscal period (weighted average of book value at the beginning of fiscal period and the book value at the end of fiscal period for Shinjuku
Maynds Tower in the 25th fiscal period).
(Note 6) Properties sold in 25th FP(Note 7) Annualized NOI and NOI yield for the 25th fiscal period do not include 3/7 of co-ownership interest in Shinjuku Maynds Tower and Daiwa Meieiki Building sold in the 25th fiscal period. The portfolio total of (2) Property-related Expenses in thetable does not include expenses related to the Investment Corporation.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

63

Overview of Asset Management Company (1)Company Overview

Directors(As of July 1, 2018)(As of July 1, 2018)

Company Name

Daiwa Real Estate Asset Management Co., Ltd.

President and Representative Director

Akira Yamanouchi

Address

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

Vice President and Representative Director

Yuji Shinotsuka

Established

October 21, 2004

Vice President and Representative Director

Yoshiki Nishigaki

Paid-in Capital

200 million yen

Executive Managing Director

Toshio Fukushima

Representative Director

Akira Yamanouchi

Director

Hajime Imbe

Director (non-executive)

Mikita Komatsu

Board of Directors

Executive directors: 5
Executive auditors: 1
10
Non-executive directors: 2
Non-executive auditors: 2

Director (non-executive)

Naoya Otani

AuditorTamaki Shibayama

No. of Employees

71 (excluding dispatched employees)

Auditor (non-executive)

Morimasa Matsuda

Auditor (non-executive)

Shinji Kiso

Registered Financial
Instruments Firm

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

Building Lots and Buildings
Transaction Business License

License No. (3)-83920, Governor of Tokyo

Discretionary Agent for Real
Estate Transaction Approval

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

Association Membership

Member of The Investment Trusts Association,
Japan
Member of Japan Investment Advisers
Association
Member of Type II Financial Instruments Firms
Association

REITs which Entrust Asset Management
to the Asset Management Company(As of July 1, 2018)
Daiwa Office
Investment
Corporation

Listed REIT focusing on office buildings
Asset size: approximately 441.2 billion yen (56 properties)

Daiwa Residential
Private Investment
Corporation

Unlisted REIT focusing on residential properties
Asset size: approximately 110.0 billion yen (71 properties)

Nippon Healthcare
Investment
Corporation

Japan’s first listed REIT focusing on healthcare facilities
Asset size: approximately 19.3 billion yen (22 properties)

Daiwa Hotel Private
Investment
Corporation

Private REIT focusing on hotels
Asset size: approximately 9.2 billion yen (3 properties)

This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

64

Overview of Asset Management Company (2)Organization Chart
Shareholders’ Meeting
Corporate Auditors
Board of Directors
Compliance Committee
Compliance Officer
Investment Committee(*)* Set up separately for each
investment corporation

President andRepresentative Director
Internal Control OfficeAcquisition and AssetManagement Division

Acquisition
Department

Origination
Department

Private Fund Division

Asset
Management
Department

Private FundManagement
Department

Corporate Division

Customer
Relations
Department

Finance
Department

Administration
Department

Office Investment Team

Office Management Team

Finance Team

Residential Investment Team

Residential Management Team

Accounting Team

Healthcare Investment Team

Healthcare Management TeamManagement Team

Hotel Investment Team

Hotel Management Team

Corporate
Planning
Department

Investment Planning Team
Construction Management Team
This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

65Real Estate and Infrastructure AM Business in Daiwa Securities Group Aims to respond to the changes in management environment and expand assets under management as well as investment fields toinfrastructure, logistics, hotel and overseas
Management environment
surrounding investors

Expansion of assets under management meeting various needs

Difficulty in management
due to low interest rate

Expansion and diversificationof assets under management• Internal and external growth of REITs under management, etc.
• Expanding new fields such as infrastructure, logistics andhotel• Considering investments in overseas assets and Debt
investment• Capturing significant growth opportunity through M&A, etc.

Diversification of investor needs

Development of a new fundprocurement method• Diversification of securitization scheme (overseas investment,
products for individuals)• Fund procurement utilizing FinTech in progress such as cloudfunding• Strengthening of base through collaboration and partnership

Expansion of targeted assets under management

OfficeResidential

Healthcare

Industrial infrastructure,energy, etc.

Hotel
Overseas2009441.2 billion yen

2012

110.0 billion yen

2014

225.5 billion yen

201881.5 billion yen*1

201419.3 billion yen

2016

69.0 billion yen*2

2016

Private real estate fund2018

11.0 billion yen
9.2 billion yen

Making consideration for formation of real estate financial instruments backed by overseas real estate(also considering alliance with a local leading real estate AM company)*1 Sub-sponsor*2 Amount of investment commitment(not included in real estate AUM)

Real Estate AUM of Daiwa Securities Group 897.9 billion yen (including sub-sponsor)
Real Estate AUM of Daiwa Real 590.8 billion yen (as of July 19, 2018)
This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it
intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment.

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