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

REIT Financial Report for the 23rd Fiscal Period
July 18, 2017
Daiwa Office Investment Corporation
Stock Exchange Listing: TSE
8976
URL: http://www.daiwa-office.co.jp
Yoshimi Murakami, Executive Director
Daiwa Real Estate Asset Management Co., Ltd.
Akira Yamanouchi, President and Representative Director
Kentaro Azumi, General Manager, Customer Relations Department
TEL: +81-3-6215-9649

Name of REIT Issuer:
Stock Code No.:
Representative:
Name of Asset Manager:
Representative:
Inquiries to:

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

August 24, 2017
August 10, 2017

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

1. Status of Management and Assets for the 23rd Fiscal Period
23rd Fiscal Period: Fiscal period ended May 2017 (from December 1, 2016 to May 31, 2017)
22nd Fiscal Period: Fiscal period ended November 2016 (from June 1, 2016 to November 30, 2016)(1) Management[% figures show the period-over-period increase (decrease)]

Operating revenue
23rd
Period22nd
PeriodOperating income

Ordinary income

Net income¥12,547 million(2.4%)¥6,133 million(0.2%)¥5,360 million

0.7%¥5,359 million

0.7%¥12,853 million

4.0%¥6,143 million

0.6%¥5,324 million(0.0%)¥5,324 million

1.4%

Net income
per unit
23rd
Period22nd
PeriodNet income tounitholders’ equity

Ordinary income tototal assets

Ordinary income tooperating revenue¥10,764

2.1%

1.1%

42.7%

¥10,800

2.1%

1.1%

41.4%

(Note) Net income per unit is calculated using the following daily weighted average number of investment units issued and outstanding:
23rd Period: 497,869 units; 22nd Period: 492,948 units(2) Distributions
Distribution amount
per unit(excluding distribution
amount in excess of earnings)

23rd
Period22nd
PeriodTotal distribution amount(excluding distribution
amount in excess of earnings)

Distribution
amountin excess ofearnings
per unit

Total
distribution
amountin excess ofearnings

Distribution
amount to
net assets

Dividend
payout¥10,764¥5,359 million¥0¥– million

100.0%

2.1%¥10,695¥5,324 million¥0¥– million

100.0%

2.1%(3) Financial Position
Total assets
23rd
Period22nd
PeriodUnitholders’ equity tototal assets

Net assets

Net assets
per unit¥483,730 million¥256,560 million

53.0%¥515,317¥483,450 million¥256,517 million

53.1%¥515,230-1-

This translation of the original Japanese financial report (kessan tanshin) is provided solely for information purposes.
Should there be any discrepancy between this translation and the Japanese original, the latter shall prevail.
(4) Cash FlowsNet cashprovided by (used in)operating activities
23rd
Period22nd
PeriodNet cashprovided by (used in)investing activities

Net cashprovided by (used in)financing activities

Cash andcash equivalents
at end of period¥7,510 million(¥2,875 million)(¥5,324 million)¥19,978 million¥11,157 million(¥14,558 million)¥1,031 million¥20,667 million

2. Management Status Forecasts for the 24th Fiscal Period and 25th Fiscal Period
24th Fiscal Period: Fiscal period ending November 2017 (from June 1, 2017 to November 30, 2017)
25th Fiscal Period: Fiscal period ending May 2018 (from December 1, 2017 to May 31, 2018)[% figures show the period-over-period increase (decrease)]

Operating revenue
24thPeriod25th
PeriodOperating income

Net income¥12,655 million

0.9%¥6,087 million(0.7%)¥5,364 million

0.1%¥5,362 million

0.1%¥12,684 million

0.2%¥6,075 million(0.2%)¥5,379 million

0.3%¥5,377 million

0.3%

Distribution amount per unit
(excluding distribution amount in excess of earnings)

24thPeriod25th
PeriodOrdinary income

Distribution amount in excess of earnings per unit

¥10,770¥0¥10,800¥0(Reference) Estimated net income per unit for the 24th Fiscal Period: ¥10,770; 25th Fiscal Period: ¥10,800

3. Other(1) Changes in Accounting Policies, Changes in Accounting Estimates and Retrospective Restatement(i) Changes in accounting policies due to amended accounting standards, etc.:
None(ii) Changes in accounting policies other than (i):None(iii) Changes in accounting estimates:None(iv) Retrospective restatement:
None(2) Total Number of Investment Units Issued and Outstanding(i) Total number of investment units issued and outstanding at end of period (including treasury units):
23rd Fiscal Period: 497,869 units
22nd Fiscal Period: 497,869
units(ii) Total number of treasury units at end of period:
23rd Fiscal Period:– units
22nd Fiscal Period:– units(Note) Please refer to “Notes to Per Unit Information” on page 28 for the number of investment units used as the basis for calculating the net
income per unit.
* Presentation of the status of implementation of audit proceduresThis financial report (kessan tanshin) is exempt from the audit procedures pursuant to the Financial Instruments and Exchange Act (Act No. 25 of
1948; including amendments thereto) (hereinafter referred to as the “Financial Instruments and Exchange Act”) and, at the time of disclosure ofthis financial report (kessan tanshin), the audit procedures pursuant to the Financial Instruments and Exchange Act have not been completed.
* Explanation of the appropriate use of the management status forecasts, and other matters of special note
The forecast figures are forward-looking statements based on information currently available to Daiwa Office Investment Corporation and involve
uncertainties. Accordingly, the actual operating revenue, operating income, ordinary income, net income and distribution amount per unit mayvary due to changes in the status. In addition, the forecast is not a guarantee of the distribution amount. For details on the assumptions underlying
the forecast figures above, please refer to “Assumptions for the Management Status Forecasts for the 24th Fiscal Period and 25th Fiscal Period” onpage 9.

-2-

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period

1. Affiliated Juridical Persons of the Investment Corporation
Disclosure is omitted because there are no significant changes from the “Structure of the Investment Corporation” set out inthe most recent periodic securities report (yuka shoken hokokusho) (submitted on February 21, 2017).

2. Management Policy and Management Status
2.1. Management Policy
Disclosure is omitted because there are no significant changes from the “Investment Policy,” “Investment Target” and“Distribution Policy” set out in the most recent periodic securities report (yuka shoken hokokusho) (submitted on February 21,2017) as of date of this document.
2.2. Management Status(1) Overview of the Fiscal Period under Review
A. Brief History of the Investment Corporation
Investment Corporation was established on July 11, 2005 in accordance with the Act on Investment Trusts and Investment
Corporations (Act No. 198 of 1951; including amendments thereto) with Daiwa Real Estate Asset Management Co., Ltd.
(former name K.K. daVinci Select) (the “Asset Manager”) as the organizer. After its establishment, the Investment
Corporation implemented an additional issuance of investment units through a public offering (99,600 units) on October18, 2005 and then listed on the Tokyo Stock Exchange, Inc. (TSE) Real Estate Investment Trust Section (stock code:8976) on the following day.
Though initial assets under management were 79,573 million yen (sum total of acquisition price), subsequent activities,
such as additional acquisition of properties and replacement of portfolio properties, resulted in the assets undermanagement amounting to 469,341 million yen as of the last day of May 2017.
The Investment Corporation strives to secure stable revenue and sustained growth of the investment assets based on aclear portfolio development policy of specializing in investment in office buildings, with a particular focus on investment
in a total floor area of more than about 2,000 m2 situated in downtown Tokyo, as well as through dedicated efforts toheighten tenant satisfaction levels.
B. Investment Environment and Management Performancea. Investment Environment (from December 2016 to May 2017)
The Japanese economy during the fiscal period under review continued to show a modest recovery trend with real GDP
growth rate (Second Preliminary Estimates) for January to March 2017 at an annual rate of 1.0%, recording a positive
figure for five consecutive quarters under the ongoing quantitative/qualitative monetary easing policy by the Bank ofJapan.
In the office building leasing market in central Tokyo, with new supply having settled down, the vacancy rate took aturn after peaking in June 2013, dropping to 3.41% at the end of May 2017. Led by improvement in the vacancy rate forexisting large buildings, the overall vacancy rate that includes small- to medium-sized buildings also continues to be on an
improving trend. The drop in the vacancy rate has led to an increase in office rent in some areas, and the market as awhole continues to see increase in rent, albeit slight.
For the office building transaction market, an appetite for property acquisitions continued to be strong among real estatecompanies, funds (including J-REITs) and oversea investors with the continuing proactive lending attitude by financial
institutions backed by the forecast of an increase in property prices in accordance with expectations for economic
recovery.
b. Management Performance
In view of increasing the long-term EPS (EPS (net income per unit) after deducting gain on sales of properties) over the
medium to long term, the Investment Corporation continued to work on “external growth,” which aims to boost revenue
through acquisition of properties, and “internal growth,” which aims to maximize income generating from owned
properties.
Concerning external growth, the Investment Corporation acquired “Shin Kanda Mikura-cho Building” (acquisition
price: 1,592 million yen) in December 2016. As a result, the Investment Corporation’s assets under management as of theend of the 23rd Fiscal Period (May 31, 2017) totaled 54 properties, the sum total of acquisition prices of which amounted
to 469,341 million yen.
Concerning internal growth, while the office leasing market trended recovering, the Investment Corporation conducted
proactive leasing, such as capturing needs for floor expansion within the same property through strengthening
relationships with existing tenants and reinforcing collaboration with leasing brokers and property managers.
Consequently, the occupancy rate as of the end of the 23rd Fiscal Period (May 31, 2017) was 97.7%.
C. Overview of Capital Procurementa. Procurement of Capital for Repayment of Borrowings
In the 23rd Fiscal Period, the Investment Corporation made the following borrowings to fund the repayment of borrowings-3-

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Periodthat were due for repayment.
・A total amount of 1,700 million yen was borrowed from Development Bank of Japan Inc. on May 10, 2017 to fund therepayment of the same amount borrowed from the bank due the same day.
・A total amount of 6,500 million yen was borrowed from Development Bank of Japan Inc. on May 22, 2017 to fund therepayment of the same amount borrowed from the bank due the same day.
・ A total amount of 9,500 million yen was borrowed from Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui
Trust Bank, Limited and Mizuho Trust & Banking Co., Ltd. on May 31, 2017 to fund the repayment of the sameamount borrowed from the respective banks due the same day.
Furthermore, in the 23rd Fiscal Period, the Investment Corporation concluded the interest-rate swap agreement for the
total borrowing of 13,000 million yen with floating interest rates in order to offset the risks of the possible increase of theinterest rate in the future.
b. Status of Interest-Bearing Liabilities at End of the Fiscal Period under Review
As a result of the above, the balance of interest-bearing liabilities outstanding as of the end of the 23rd Fiscal Period (May31, 2017) stood at 204,300 million yen (short-term loans payable: 1,000 million yen; long-term loans payable: 198,200
million yen; investment corporation bonds: 5,100 million yen). The balance of the current portion of long-term loans
payable stood at 19,400 million yen.
The average remaining period of interest-bearing liabilities as of the end of the 23rd Fiscal Period stands at 4.3 years.
List of Borrowings in the 23rd Fiscal Period
Loan amount(million yen)
1,700
3,500
3,000
1,000
2,000
1,500
3,000
2,000

LenderDevelopment Bank of Japan Inc.
Development Bank of Japan Inc.
Development Bank of Japan Inc.
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Banking Corporation
Mizuho Trust & Banking Co., Ltd.
Sumitomo Mitsui Trust Bank, Limited.
Sumitomo Mitsui Banking Corporation

Drawdown
date
2017/5/10
2017/5/22
2017/5/22
2017/5/31
2017/5/31
2017/5/31
2017/5/31
2017/5/31

Repayment
date
2023/11/30
2024/5/31
2024/11/29
2018/5/31
2025/5/30
2025/5/30
2025/11/28
2025/11/28

Balance of Borrowings from Each Financial Institution (as of May 31, 2017)
End of the 23rd Fiscal Period
Lender(million yen)
Sumitomo Mitsui Banking Corporation
41,400Sumitomo Mitsui Trust Bank, Limited
24,850Development Bank of Japan Inc.
21,750Mizuho Bank, Ltd.
19,400
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
16,000Shinsei Bank, Ltd.
14,000Resona Bank, Ltd.
12,500Mitsubishi UFJ Trust and Banking Corporation
8,500
Mizuho Trust and Banking Co., Ltd.
6,000
The Bank of Fukuoka, Ltd.
5,500
Kansai Urban Banking Corporation
5,000
Aozora Bank, Ltd.
3,000
The Nishi-Nippon City Bank Limited
3,000
ORIX Bank Corporation
2,500
The Gunma Bank, Ltd.
2,500
The 77 Bank, Ltd.
2,000
The Musashino Bank, Ltd.
2,000
Tokio Marine & Nichido Fire Insurance Co., Ltd.
2,000

-4-

Loan
period6.6 years
7.0 years
7.5 years
1.0 year
8.0 years
8.0 years
8.5 years
8.5 years

Share (%)
(Note)
20.78
12.47
10.92
9.74
8.03
7.03
6.28
4.27
3.01
2.76
2.51
1.51
1.51
1.26
1.26
1.00
1.00
1.00

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
The Yamaguchi Bank, Ltd.
The Higashi-Nippon Bank, Limited
Nippon Life Insurance Company
The Kagawa Bank, Ltd.
The Hiroshima Bank, Ltd.
Taiyo Life Insurance Company
Fukoku Mutual Life Insurance Company
Total(Note) Share is rounded to two decimal places.

2,000
1,500
1,300
1,000
1,000
300
200
199,200

1.00
0.75
0.65
0.50
0.50
0.15
0.10
100.00c. Rating Information (as of May 31, 2017)
Credit rating agency
R&I
Japan Credit Rating Agency

RatingA+
AA-

Outlook
StableStableD. Overview of Financial Performance and Distributions
As a result of the management described above, the Investment Corporation posted financial performance for the 23rd
Fiscal Period of 12,547 million yen in operating revenue, 6,133 million yen in operating income, 5,360 million yen in
ordinary income and 5,359 million yen in net income.
Concerning distributions, it is planned that the amount equivalent to distributions from earnings would be included in
the amount of tax-deductible expenses based on application of special provisions for taxation of corporation tax (Article
67-15 of the Act on Special Measures Concerning Taxation (Act No. 26 of 1957; including amendments thereto) (the“Special Taxation Measures Act”)). Accordingly, the Investment Corporation decided to distribute almost the entire
amount of unappropriated retained earnings (excluding fractions of the distribution amount per unit that are less than 1yen), and declared a distribution amount per unit of 10,764 yen.

-5-

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period(2) Outlook for the Next Fiscal Period
A. Investment Environment
The Japanese economy going forward is expected to see a moderate economic recovery through solid trends in personal
spending against the backdrop of favorable employment environment and the improved income environment whilevarious economic measures, centering on the public works projects promoted by the current administration and themonetary easing policy implemented by Bank of Japan continue. However, factors, such as policies to be set out by the
U.S. President Donald Trump, the downward swing of the Chinese economy, upset in emerging markets accompanying
the U.S. “exit strategy,” “risk off” due to geopolitical risks and political risks, the Brexit negotiations and deleveraging by
European financial institutions, pose potential risks of disrupting the Japanese real economy and financial environment,
and are thus thought to require attention.
In the Tokyo office building leasing market, factors such as improvement in employment are stimulating demand,
resulting in the vacancy rate dropping. Improvement in corporate performance is forecasted to increase demand for officefloor space and rent is expected to improve as a consequence. In the office building transaction market, backed by thefavorable financing environment and expectations of rent rising, among other factors, property acquisition appetite among
investors overseas, real estate companies and funds (including J-REITs) is thought to remain strong.
B. Future Management Policy and Tasks
a. Strategy for Managing Existing Properties
Despite such office leasing market conditions as described above, the tenant side is, as it has been, also expected to
become more heavily selective with properties in terms of software such as crime/disaster prevention measures andoperations/management on top of location and building specifications. Consequently, the Investment Corporation will
carry out operational management under the following policy with an aim to enhance the competitiveness of existing
properties and thereby increase the long-term EPS over the medium to long term.
(i) Maintain and raise occupancy rates
Concerning existing tenants, strive to reduce vacancy risks by improving the quality of buildings, equipment andmanagement system. In addition, concerning new tenants, strive to maintain and raise occupancy rates through theprovision of highly satisfactory services from gaining deeper understanding of tenant needs through proactive
participation in the market.
(ii) Maintain and raise profitability
Aim to secure stable revenue over the medium to long term through further strengthening good relationships withexisting tenants, as well as proactively tapping the needs of new tenants by discerning the market environment.
(iii) Lower operational management costs
Strive to lower operational management costs based on maintaining office environments of high tenant satisfactionlevels by implementing efficient operational management and reviewing systematic construction work by optimallyleveraging the economies of scale achieved from proactively realizing external growth.
b. Strategy for New Property Investments
The Investment Corporation will invest in office buildings that have a total floor area of about 2,000 m2 or more basedon various external growth strategies, while maintaining a balance with the asset acquisition environment and financing
situation. In principle, considerations will focus on Tokyo as the investment target area, but the Investment Corporation
will also consider investing in competitive properties in cities other than Tokyo from a viewpoint ofterritorially-distributed investments.
As pipeline support, in addition to expanding its own information-sourcing channels, the Investment Corporation willcontinue to search for properties that meet its investment criteria by proactively gathering real estate transaction market
information through greater collaboration with the Asset Manager and Sponsor Group and utilizing the Group’s
extensive network of clients, partners, etc.
Furthermore, in the 23rd Fiscal Period, the Investment Corporation acquired “Shin Kanda Mikura-cho Building,”
which is located in Tokyo. The Investment Corporation believes that acquisition of this property will contribute tofurther stabilization and enhancement of the portfolio. The Investment Corporation will continue to strive to acquire
properties in line with the investment strategy described above.
c. Financial Strategy
The Investment Corporation will conduct disciplined financial management of the following basic content.
(i) Control leverage by keeping the ratio of interest-bearing liabilities to total assets (LTV) within the range of 40% to
50% at maximum, taking into consideration also the real LTV, etc., as a principle.
(ii) Diversify repayment deadlines, targeting 30.0 billion yen as the maximum amount of interest-bearing liabilities thatshall become due during any single fiscal period as a principle.
(iii) Aim to have long-term loans account for at least 70% of total loans as a principle.
(iv) Achieve diversification of lenders, which shall mainly be Japanese financial institutions.
(v) Pursuant to its fund management rules, maintain stability in its financial standing by managing necessary funds,
such as the amount equivalent to distributions paid, separately from working capital.

-6-

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
C. Significant Subsequent Events
Not applicable.
(Reference Information)
The Investment Corporation acquired a silent partnership equity interest on June 1, 2017 as follows.
Summary of Asset Acquired
Godo kaisha Yokohama Office Management Silent Partnership Equity
Property nameInterest (Note 1)
Equity interest in silent partnership that invests in trust beneficial interest
Type of assetof domestic real estate
Real Estate in Trust

CONCURRED Yokohama (Note 2)

Acquisition Price

3,920 million yen (10% of total investment amount in the silent partnership)

Date of conclusion of purchase agreement

May 23, 2017

Date of Acquisition of Equity Interest

June 1, 2017

Funding for Acquisition of Equity Interest

Cash on hand

Payment Method

Lump-sum payment at the time of acquisition(Note1)(Note 2)
(Note 3)(Note 4)

The asset is a silent partnership equity interest operated by Godo kaisha Yokohama Office Management.
The above-mentioned Godo kaisha acquired a trust beneficiary interest having quasi co-ownership that is
75% of the above-mentioned real estate in trust as primary asset in trust on June 1, 2017.
In connection with the acquisition, the Investment Corporation has been granted a preferential negotiationright concerning the acquisition of the quasi co-ownership interest (period: until July 31, 2018). Accordingly,
the Investment Corporation is able to acquire the quasi co-ownership interest at 38,100 million yen (appraisal
value: 39,100 million yen, as of March 31, 2017), which is the condition on acquisition price upon
preferential negotiation.
The details of the silent partnership are as announced on May 23, 2017. However, the calculation period has
been changed to; from March 1 to August 31 and from September 1 to the last day of February in each year.
The first calculation period is from the date of conclusion of the Silent Partnership Agreement to the last day
of February, 2018.

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Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period

D. Outlook for Management Status
The Investment Corporation forecasts the following management status for the 24th Fiscal Period (fiscal period ending
November 2017 (from June 1, 2017 to November 30, 2017)). For the assumptions underlying the management status
forecasts, please refer to the “Assumptions for the Management Status Forecasts for the 24th Fiscal Period and 25th Fiscal
Period” on page 9.
24th Fiscal Period (fiscal period ending November 2017 (from June 1, 2017 to November 30, 2017))
Operating revenue
12,655 million yen
Operating income
6,087 million yen
Ordinary income
5,364 million yen
Net income
5,362 million yen
Distribution amount per unit
10,770 yen
Distribution amount in excess of earnings per unit
0 yen
In addition, on the basis that the “Assumptions for the Management Status Forecasts for the 24th Fiscal Period and 25th
Fiscal Period” will remain unchanged, the Investment Corporation forecasts the following management status for the 25th
Fiscal Period (fiscal period ending May 2018 (from December 1, 2017 to May 31, 2018)).
25th Fiscal Period (fiscal period ending May 2018 (from December 1, 2017 to May 31, 2018))
Operating revenue
12,684 million yen
Operating income
6,075 million yen
Ordinary income
5,379 million yen
Net income
5,377 million yen
Distribution amount per unit
10,800 yen
Distribution amount in excess of earnings per unit
0 yen
(Note) The forecast figures above are the current forecasts calculated based on certain assumptions. Accordingly, theactual operating revenue, operating income, ordinary income, net income, distribution amount per unit anddistribution amount in excess of earnings per unit may vary due to changes in the status. Moreover, the forecasts
set forth herein should not be construed as a guarantee of distribution amounts.

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Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
Assumptions for the Management Status Forecasts for the 24th Fiscal Period and 25th Fiscal Period
Item
Assumptions
 24th Fiscal Period and 25th Fiscal Period:
Assets under management are assumed to be the 54 properties owned as of May 31, 2017.
Assets under In addition to the above, the Investment Corporation owns a silent partnership equity interest.
management
 The actual number of properties may vary due to changes in the assets under management other thanabove.
 Rent revenue from existing properties is calculated based on historical data and taking into accountvariable factors.
Operatingrevenue It is assumed that there is no gain (loss) on sales of real estate properties.
 Dividend income is expected to be 100 million yen in the 25th Fiscal Period.
 Expenses related to rent business, which constitute a major component of operating expenses, arecalculated based on historical data and taking into account variable factors.
 Repair expenses for buildings are recorded as expenses in the amount expected to be necessary in therespective fiscal period based on the medium to long term repair plan established by the AssetManager.
 Operating income from property leasing (excluding gain on sales of real estate properties) after
deducting expenses related to rent business (including depreciation) is expected to be 7,364 million
yen in the 24th Fiscal Period and 7,258 million yen in the 25th Fiscal Period.
Operating Consignment expenses are expected to be 950 million yen in the 24th Fiscal Period and 882 million
expenses
yen in the 25th Fiscal Period.
 Taxes and dues (fixed property tax, city planning tax, etc.) are expected to be 1,109 million yen in the
24th Fiscal Period and 1,109 million yen in the 25th Fiscal Period.
 While, in general, fixed property tax, city planning tax, etc. in the transaction of real estate, etc. are
calculated on a pro rata basis and reimbursed at the time of acquisition with the current owner, but for
the Investment Corporation, the amount equivalent to the reimbursement is included in the cost of
acquisition and thus it is not recognized as expenses in the period of acquisition of properties.
 Depreciation is expected to be 1,769 million yen in the 24th Fiscal Period and 1,803 million yen in the
25th Fiscal Period.
 Non-operating expenses in the 24th Fiscal Period are expected to be 723 million yen, of which theinterest expenses, interest expenses on investment corporation bonds, and borrowing related expenses
Non-operating
are expected to be 719 million yen.
expenses Non-operating expenses in the 25th Fiscal Period are expected to be 695 million yen, of which theinterest expenses, interest expenses on investment corporation bonds, and borrowing related expenses
are expected to be 691 million yen.
 The total amount of interest-bearing liabilities is assumed to be 204,300 million yen at the end of the24th Fiscal Period and 204,300 million yen at the end of the 25th Fiscal Period
 In the 24th Fiscal Period, it is assumed that the entire amount of the 6,050 million yen and 5,500
million yen of borrowings due for repayment on August 31, 2017 and May 31, 2018, respectively,Interest-bearing
liabilities
will be refinanced.
 In the 25th Fiscal Period, it is assumed that the entire amount of the 6,850 million yen and 2,000
million yen of borrowings due for repayment on February 28, 2018 and May 31, 2018, respectively,
will be refinanced.
The
total number of investment units issued and outstanding is assumed to be 497,869 units as of May
Total number of31, 2017.
investment units
issued and It is assumed that there are no changes to the number of investment units other than stated above until
outstanding
the end of the 25th Fiscal Period through the issuance of new investment units, etc.
 The distribution amount per unit is calculated based on the cash distribution policy as set out in thearticles of incorporation of the Investment Corporation.
Distribution amount The distribution amount per unit may vary depending on a variety of factors, such as changes in the
per unit
assets under management, changes in the rent revenue due to tenant changes and other causes, andincurrence of unforeseen repairs.

-9-Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
Item
Distribution amountin excess of earnings
per unit

Assumptions
 At present, there is no plan to make any distribution in excess of earnings (distribution amount inexcess of earnings per unit).

Other It is assumed that there are no changes to laws and ordinances, the tax system, accounting standards,
listing regulations, the rules of Tokyo Stock Exchange, Inc. and The Investment Trusts Association,
Japan, etc. that will affect the abovementioned forecast figures.
 It is assumed that there will be no major unforeseen changes in general economic trends, real estatemarket conditions, etc.

2.3. Investment Risks
Disclosure is omitted because there are no significant changes from the “Part I: Fund Information; Section 1: Fund Status; 3.
Investment Risks” set out in the most recent periodic securities report (yuka shoken hokokusho) (submitted on February 21,2017).

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Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period

3. Financial Statements
3.1. Balance Sheets

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

22nd Fiscal Period[As of Nov. 30, 2016](Unit: thousand yen)
23rd Fiscal Period[As of May 31, 2017]

19,070,683
1,597,181
145,235
55,305369,096
11
16,773
21,254,286

18,280,633
1,697,781
145,154371,8452,087
44,307
20,541,810

3,205,177
1,891,204)
1,313,973
14,344
4,278)
10,066
19,126
10,006)
9,119
12,302,226
2,661
103,827,953
20,523,653)
83,304,300
959,053
195,189)
763,863886,637
411,719)474,917228,556
97,495)131,060
4,336(4,336)－359,306,652
399,429
458,018,269

3,245,133(1,981,221)
1,263,911
14,344
4,749
9,595
19,953
10,7899,163
12,302,226773
104,660,217
22,145,961
82,514,255
959,436
208,706
750,730
968,629441,667
526,961
242,357
111,213131,144－－－360,772,887
741,404
459,023,054*1- 11 -*1

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period

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

22nd Fiscal Period[As of Nov. 30, 2016](Unit: thousand yen)
23rd Fiscal Period[As of May 31, 2017]

541
2,398,275
306,884
1,924
2,707,626

487
2,398,275
306,884
31,7332,737,381

113,684
1,074,158
165,91080,482
10,0201,444,256
462,170,152

113,684
1,071,191
159,766
50,507
10,0201,405,169
463,165,605

26,481
26,481
483,450,920

23,54323,543
483,730,959

1,996,736
1,000,000
28,250,000
456,273
831
89,141
2,028,280
264,659
34,085,923

1,394,961
1,000,000
19,400,000
457,360
943
336,451
2,040,616
571,466
25,201,798

5,100,000
169,950,000
16,447,831
504,267
845,574
192,847,673
226,933,597

5,100,000
178,800,000
16,768,298
504,009796,226
201,968,535
227,170,333

251,551,759

251,551,759

164,162
164,162
5,324,776
5,488,939
257,040,698

164,162
164,162
5,359,285
5,523,447
257,075,206(523,375)
523,375)
256,517,323
483,450,920(514,581)
514,581
256,560,625
483,730,959*2- 12 -*2

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
3.2. Statements of Income

22nd Fiscal Period[From: June 1, 2016
To: Nov. 30, 2016]
Operating revenue
Rent revenue – real estate
Other lease business revenue
Gain on sales of real estate properties
Total operating revenue
Operating expenses
Expenses related to rent business
Asset management fees
Asset custody fees
Administrative service fees
Trust fees
Directors’ compensation
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Reversal of distribution payable
Miscellaneous income
Total non-operating income
Non-operating expenses
Interest expenses
Interest expenses on investment corporation bonds
Borrowing expenses
Investment unit issuance expenses
Other
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)- 13 -(Unit: thousand yen)
23rd Fiscal Period[From: Dec. 1, 2016
To: May 31, 2017]

*1
*1
*2

12,687,269
63,616102,138
12,853,024*1*1

12,513,018
33,995
12,547,014*1

5,433,014
1,043,440
24,15982,492
18,936
6,300
101,196
6,709,539
6,143,484*1

5,151,041
1,034,063
24,10475,571
18,606
7,200
103,258
6,413,845
6,133,168

45
624
10,357
11,026

140
603
6,548
7,292

603,225
16,707173,072
31,3384,738
829,082
5,325,428
5,325,428
836
6
843
5,324,585
191
5,324,776

587,969
16,892
170,990
4,433
780,286
5,360,175
5,360,175
964
(6)
957
5,359,217
67
5,359,285

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
3.3. Statements of Unitholders’ Equity
22nd Fiscal Period (from June 1, 2016 to November 30, 2016)(Unit: thousand yen)
Unitholders’ equity
Surplus

Voluntary retained earnings
Unitholders’capitalBalance at beginning of current
fiscal period

243,403,874

Reserve for
reduction entry

Total voluntary
retained earnings--

Total unitholders’equityUnappropriatedretained earnings(undisposed loss)

Total Surplus

5,250,225

5,250,225

248,654,100

Changes of items during theperiodIssuance of new investment
units

8,147,884

Provision of reserve for

8,147,884
164,162

164,162)--

Dividends from surplus(5,085,872)

5,085,872)

5,085,872)

Net income

5,324,585

5,324,585

5,324,585

reduction entry

164,162

Net changes of items otherthan shareholders’ equity
Total changes of items during
the period
Balance at end of current fiscal
period8,147,884

164,162

164,162

74,550238,713

8,386,598

251,551,759

164,162

164,162

5,324,776

5,488,939

257,040,698

Total valuation and translation adjustments

Balance at beginning of current
fiscal period

Deferred gains orlosses on hedges

Total valuation andtranslation
adjustments

Total net assets(933,915)(933,915)

247,720,184

Changes of items during theperiodIssuance of new investment

8,147,884

units
Provision of reserve for-

reduction entry
Dividends from surplus(5,085,872)

Net income

5,324,585

Net changes of items otherthan shareholders’ equity
Total changes of items during
the period
Balance at end of current fiscal
period410,540

410,540

410,540

410,540

410,540

8,797,138(523,375)(523,375)

256,517,323- 14 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
23rd Fiscal Period (from December 1, 2016 to May 31, 2017)(Unit: thousand yen)
Unitholders’ equity
Surplus

Voluntary retained earnings
Unitholders’capital

Total unitholders’equityUnappropriatedretained earnings(undisposed loss)

Total Surplus

5,324,776

5,488,939

257,040,698

Dividends from surplus(5,324,708)

5,324,708)

5,324,708)

Net income

5,359,217

5,359,217

5,359,217

Balance at beginning of current
fiscal period

251,551,759

Reserve for
reduction entry

Total voluntary
retained earnings

164,162

164,162

Changes of items during theperiodNet changes of items otherthan shareholders’ equity
Total changes of items during

-

-

-

34,50834,50834,508

251,551,759

164,162

164,162

5,359,285

5,523,447

257,075,206

the period
Balance at end of current fiscal
periodTotal valuation and translation adjustments

Balance at beginning of current
fiscal period

Deferred gains orlosses on hedges

Total valuation andtranslation
adjustments

Total net assets(523,375)(523,375)

256,517,323

Changes of items during theperiodDividends from surplus(5,324,708)

Net income

5,359,217

Net changes of items otherthan shareholders’ equity
Total changes of items during
the period
Balance at end of current fiscal
period

8,793

8,793

8,793

8,793

8,793

43,301(514,581)(514,581)

256,560,625- 15 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
3.4. Statements of Cash Distributions

Item
I.
II.

Unappropriated retained earnings
Distribution amount[Distribution amount per unit]
Ⅲ. Retained earnings carried forward
Method for calculating distribution amount22nd Fiscal Period[From: June 1, 2016
To: Nov. 30, 2017]
Amount (yen)5,324,776,691
5,324,708,955[10,695]
67,736
Pursuant to the policy that “theInvestment
Corporation
shall
distribute an amount in excess of theamount equivalent to 90% of its
distributable earnings as defined in
Article 67-15 of the Act on Special
Measures Concerning Taxation” butno more than the amount of earnings
as specified in Article 32, Item 1 ofthe Investment Corporation’s articles
of incorporation, the Investment
Corporation decided the distributions
from earnings that it shall pay out
shall be the maximum value of theintegral multiple of the total numberof units issued and outstanding(497,869 units) in an amount that is
not in excess of unappropriatedretained earnings. Accordingly, theInvestment Corporation declared a
distribution amount of 5,324,708,955
yen. Furthermore, the Investment
Corporation shall not distribute cash
in excess of earnings as stipulated in
Article 32, Item 2 of its articles ofincorporation.

- 16 -

23rd Fiscal Period[From: Dec. 1, 2017
To: May 31, 2018]
Amount (yen)5,359,285,070
5,359,061,916[10,764]
223,154
Pursuant to the policy that “theInvestment
Corporation
shall
distribute an amount in excess of theamount equivalent to 90% of its
distributable earnings as defined in
Article 67-15 of the Act on Special
Measures Concerning Taxation” butno more than the amount of earnings
as specified in Article 32, Item 1 ofthe Investment Corporation’s articles
of incorporation, the Investment
Corporation decided the distributions
from earnings that it shall pay out
shall be the maximum value of theintegral multiple of the total numberof units issued and outstanding(497,869 units) in an amount that is
not in excess of unappropriatedretained earnings. Accordingly, theInvestment Corporation declared a
distribution amount of 5,359,061,916
yen. Furthermore, the Investment
Corporation shall not distribute cash
in excess of earnings as stipulated in
Article 32, Item 2 of its articles ofincorporation.

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
3.5. Statements of Cash Flows

22nd Fiscal Period[From: June 1, 2016
To: Nov. 30, 2016]
Net cash provided by (used in) operating activities
Income before income taxes
Depreciation and amortization
Amortization of investment corporation bonds issuance costs
Investment unit issuance expenses
Interest income
Interest expenses(Increase) Decrease in operating accounts receivable(Increase) Decrease in consumption taxes refund receivable(Increase) Decrease in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable – other
Increase (decrease) in accrued consumption taxes
Increase (decrease) in advances received(Increase) Decrease in long-term prepaid expenses
Decrease from sales of property, plant and equipment in trust
Other, net
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust
Purchase of intangible assets
Proceeds from tenant security deposits
Proceeds from tenant security deposits in trust
Repayments of tenant security deposits
Repayments of tenant security deposits in trust
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Proceeds from short-term loans payable
Repayment of short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from issuance of investment units
Dividends paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period- 17 -*1(Unit: thousand yen)
23rd Fiscal Period[From: Dec. 1, 2016
To: May 31, 2017]

5,325,428
1,750,178
2,954
31,338(45)619,933
29,608(55,305)
58,864382,326
29)(445,049)(23,447)
115,0033,795,173
191,043
11,777,976
45(620,025)(975)
11,157,021

5,360,175
1,772,265
2,938
(140)
604,86180
55,305(2,749)(176,463)
6,759
247,30912,335
2,967
243,585
8,115,711
140(604,769)(852)
7,510,230

16,739)14,541,472)(82,008)
637,097515,643
683,992)
386,915)
14,558,386)

68,655
3,126,686
936,065
25,619641,475
2,875,133

8,000,000(7,000,000)
1,500,000
4,500,000)
8,116,546
5,085,533)
1,031,012(2,370,352)
23,038,217
20,667,865

1,000,000(1,000,000)
16,700,000
16,700,000
5,324,546(5,324,546)(689,449)
20,667,865
19,978,415*1

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
3.6. Notes to the Going Concern
Not applicable.
3.7. Notes to Significant Accounting Policies
1.
Accumulated depreciation method(1)
for noncurrent assets

2.
3.

Accounting policies fordeferred assets
Accounting standards for recording
revenues and expenses

4.

Hedge accounting approaches

5.

Scope of funds in thestatements of cash flows

Property, plant and equipment (including trust assets)
The straight-line method is adopted.
The useful life of primary property, plant and equipment are as follows:
Buildings
2~64 years
Structures
10~56 years
Machinery and equipment
7~23 years
Tools, furniture and fixtures
5~15 years(2) Intangible assets
The straight-line method is adopted.
(3) Long-term prepaid expenses
The straight-line method is adopted.
Investment corporation bonds issuance costs
Amortized using the straight-line method over the period up to redemption.
Accounting for fixed property tax, etc.
Concerning fixed property tax, city planning tax, depreciated asset tax, etc. forowned real estate in trust, of the tax amount that has been broken down into
installments, the method of accounting for the amount corresponding to theconcerned fiscal period as expenses related to rent business is adopted.
Concerning the amount equivalent to fixed property tax, etc. for the initialfiscal year that shall be borne by the Investment Corporation in correlation withacquisitions of real estate or trust beneficial interest that have real estate as
assets in trust, the amount is not expensed but is rather included in the cost of
acquisition of the concerned real estate property.
The amount equivalent to fixed property tax, etc. that was included in the costof acquisition of real estate properties is 39,920 thousand yen in the 22nd Fiscal
Period and is 188 thousand yen in the 23rd Fiscal Period.
(1) Hedge accounting approach
Deferral hedge accounting is adopted.
Special accounting is adopted for interest rate swaps that meet the requirements
for special accounting.
(2) Hedging instruments and hedged items
Hedging instruments:
Interest rate swap transactions
Hedged items:
Interest on loans(3) Hedging policy
The Investment Corporation conducts derivative transactions to hedge risks
stipulated in the Investment Corporation’s articles of incorporation inaccordance with the Investment Corporation’s risk management policy.
(4) Method for assessing the effectiveness of hedging
The effectiveness of hedging is assessed by the correlation between the change
in aggregated amount of cash flow of the hedging instruments and the change
in aggregated amount of cash flow of the hedged items.
Interest rate swaps that meet the requirements for special accounting are
omitted from assessment of the effectiveness.
The funds (cash and cash equivalents) in the statements of cash flows consist of cashon hand and cash in trust; deposits that can be withdrawn at any time and deposits intrust; and short-term investments with a maturity of 3 months or less from the date ofacquisition, which are readily convertible to cash and bear only an insignificant riskof price fluctuation.

- 18 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
6.

Other significant matters forming
basis for preparation of financial
statements

(1)

(2)

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

- 19 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
3.8. Notes to Financial Statements
Concerning notes to lease transactions, securities, retirement benefits, tax-effect accounting and asset retirement obligations,disclosure is omitted because there is no substantial need for such disclosure in the financial report (kessan tanshin).
[Notes to Balance Sheets]*1. Advanced depreciation amount for noncurrent assets acquired by government subsidies, etc.
22nd Fiscal Period[As of November 30, 2016]
Buildings in trust

23rd Fiscal Period[As of May 31, 2017]32,898 thousand yen

Buildings in trust

32,898 thousand yen*2. Minimum net assets as provided in Article 67, Paragraph 4 of the Act on Investment Trusts and Investment Corporations
22nd Fiscal Period[As of November 31, 2016]

23rd Fiscal Period[As of May 31, 2017]

50,000 thousand yen

50,000 thousand yen[Notes to Statements of Income]*1. Breakdown of operating income (loss) from property leasing(Unit: thousand yen)
22nd Fiscal Period[From: June 1, 2016
To: Nov. 30, 2016]
A.

B.

C.

Property leasing revenue
Rent revenue – real estate
Other lease business revenue
Total property leasing revenue
Property leasing expenses
Consignment expenses
Utilities expenses
Taxes and dues
Non-life insurance expenses
Repair expenses
Depreciation
Other lease business expenses

12,687,269
63,61623rd Fiscal Period[From: Dec. 1, 2016
To: May 31, 2017]
12,513,018
33,99512,750,885
942,415
1,068,008
1,045,891
17,056456,738
1,749,716
153,188

Total property leasing expenses
Operating income (loss) from property
leasing [A – B]

12,547,014
980,112985,941
1,034,433
14,657316,200
1,770,760
48,934

5,433,014

5,151,041

7,317,871

7,395,973*2. Breakdown of gain on sales of real estate properties (Unit: thousand yen)
22nd Fiscal Period [From: June 1, 2016 To: November 30, 2016]
Daiwa Kudan
Proceeds from sales of real estate properties
Cost of sales of real estate properties
Other expenses on sales

4,048,485
3,795,173
151,172
102,138

Gain on sales of real estate properties
23rd Fiscal Period [From: December 1, 2016 To: May 31, 2017]
Not applicable.

- 20 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period[Notes to Statements of Unitholders’ Equity]
22nd Fiscal Period[From: June 1, 2016
To: Nov. 30, 2016]
Total number of investment units authorized and number ofinvestment units issued and outstanding
Total number of investment units authorized
Total number of investment units issued and outstanding

2,000,000 units
497,869 units

23rd Fiscal Period[From: Dec. 1, 2016
To: May 31, 2017]

2,000,000 units
497,869 units[Notes to Statements of Cash Flows]*1. Reconciliation of balance sheet items to cash and cash equivalents at end of period in the statements of cash flows(Unit: thousand yen)
22nd Fiscal Period
23rd Fiscal Period[From: Dec. 1, 2016
[From: June 1, 2016
To: May 31, 2017]
To: Nov. 30, 2016]
Cash and deposits
19,070,683
18,280,633
Cash and deposits in trust
1,597,181
1,697,781
Cash and cash equivalents

20,667,865

19,978,415[Notes to Financial Instruments](1) Matters Concerning Status of Financial Instruments(a) Policy for financial instruments
The Investment Corporation raises funds through bank borrowings, issuance of investment corporation bonds and issuanceof new investment units, etc. for the acquisition and repair of investment properties, the payments of dividends and thereimbursement of bank borrowings.
As for debt finance, the Investment Corporation focuses on lengthening maturities, fixing interest rates, and dispersing
maturity dates in order to secure financial stability and avoid future fluctuation risk of interest rates.
The Investment Corporation manages surplus funds through deposits and safe and highly liquid money claims andsecurities (in principle, deposits).
Derivative transactions are limited to hedge operations which hedge against interest rate risks attributable to liabilitiesof the Investment Corporation.
(b) Contents and risk of financial instruments and related risk management
The Investment Corporation uses the proceeds from the financing of debts and investment corporation bonds for theacquisition of investment properties (such as trust beneficial interest in real estate) and the reimbursement of current debts
and bonds. While these debts and bonds are exposed to liquidity risk, the Investment Corporation manages the risk by
maintaining the LTV ratio at low levels, dispersing maturity dates, maintaining the ratio of long-term debt to total debt athigh levels, and diversifying lenders with particular focus on domestic financial institutions.
Bank borrowings etc. with floating interest rates are exposed to interest rate risk and the risk is controlled by using
derivative instruments (interest rate swap transaction) for some long-term borrowings to avoid interest rate rise and to fix
interest expense.
The effectiveness of hedging is assessed by the correlation between the change in aggregated amount of cash flow of
the hedging instruments and the change in aggregated amount of cash flow of the hedged items. Interest rate swaps thatmeet the requirements for special accounting are omitted from assessment of the effectiveness.
Enforcement and management of derivative transactions are carried out in accordance with the provisions establishedby the basic policy of risk management. Tenant leasehold and security deposits and tenant leasehold and security deposits
in trust are exposed to liquidity risk upon tenants moving out and the Investment Corporation reduces the risk by poolingfunds to a certain degree.
Surplus funds by deposits are exposed to credit risk of counterparties (financial institutions and so on) and are managed
by limiting the terms to short durations and establishing credit rating level of counterparties (except for checkable deposit),etc.
(c) Supplementary explanation for fair value of financial instruments
The fair value of financial instruments is based on their market price. The fair value of financial instruments with noavailable market price is determined by using price reasonably estimated. As various factors are incorporated into thesecalculations, the resulting value may differ if different assumptions are provided. Furthermore, the contractual amounts ofderivative transactions do not represent the market risk involved in these derivative transactions.

- 21 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period(2) Matters Concerning Fair Value, etc. of Financial Instruments
The carrying amounts and fair values and their differences are as follows. Please note that the following table does not include
those for which discerning of fair value is recognized to be extremely difficult (please refer to (Note 2)).
22nd Fiscal Period [As of November 30, 2016](1) Cash and deposits(2) Cash and deposits in trust
Total assets(3) Short-term loans payable(4) Current portion of long-term loans payable(5) Investment corporation bonds(6) Long-term loans payable
Total liabilities
Derivative transactions (*)

Carrying amount
19,070,683
1,597,181
20,667,865
1,000,000
28,250,000
5,100,000
169,950,000
204,300,000(765,091)

Fair value
19,070,683
1,597,181
20,667,865
1,000,000
28,320,007
5,184,930
170,032,842
204,537,780(765,091)(Unit: thousand yen)
Difference－－－－
70,00784,93082,842
237,780－

23rd Fiscal Period [As of May 31, 2017](Unit: thousand yen)
Carrying amount
Fair value
Difference(1) Cash and deposits
18,280,633
18,280,633－(2) Cash and deposits in trust
1,697,781
1,697,781－
Total assets
19,978,415
19,978,415－(3) Short-term loans payable
1,000,000
1,000,000－(4) Current portion of long-term loans payable
19,400,000
19,422,667
22,667(5) Investment corporation bonds
5,100,000
5,178,750
78,750(6) Long-term loans payable
178,800,000
178,786,894(13,105)
Total liabilities
204,300,000
204,388,312
88,312Derivative transactions (*)(752,224)(752,224)－(*)The value of receivables and payables arising from derivatives are indicated at net basis. The amount in parentheses
represents the net liability position.
(Note 1) Methods to estimate fair value of financial instruments and matters concerning derivative transactions.
Assets(1) Cash and deposits; (2) Cash and deposits in trust
As these are settled within a short period of time, the fair value is approximately the same as the book value and thus isstated at that book value.
Liabilities(3) Short-term loans payable; (4) Current portion of long-term loans payable; (6) Long-term loans payable
As those with floating interest rates reflect market interest rates within a short period of time and the Investment
Corporation’s credit capability does not differ markedly from the execution, the fair value is approximately the same as
the book value and thus is stated at that book value. Those with fixed interest rates, on the other hand, are based on themethod of calculating by discounting the sum total amount of principal and interest (*) by the reasonably estimatedinterest rate in the case that the same type of borrowings are undertaken.
(*) For long-term loans payable that are subject to special accounting for interest rate swaps, the interest is handled
together with applicable interest rate swaps. (Please refer to [Notes to Derivative Transactions] below.)(5) Investment corporation bonds
The fair value of the investment corporation bonds issued by the Investment Corporation is based on the market price.

- 22 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
Derivative transactions
Please refer to [Notes to Derivative transactions] below.
(Note 2) Financial products for which it is extremely difficult to estimate fair value.
(Unit: thousand yen)
23rd Fiscal Period[As of May 31, 2017]16,768,298
504,009

22nd Fiscal Period[As of November 30, 2016]
16,447,831
504,267

Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust

Total
16,952,099
17,272,308
Tenant leasehold and security deposits and tenant leasehold and security deposits in trust that are deposited by lessees ofrental properties are not subject to disclosure of fair value because discerning of the fair value is recognized to be
extremely difficult as future cash flows cannot be reasonably estimated due to there being no market price and difficulty incalculation of the actual deposit period, which is the period from tenants’ move-ins to move-outs.
(Note 3) Redemption schedule for monetary claims due after the settlement of accounts.
22nd Fiscal Period [As of November 30, 2016](Unit: thousand yen)
Within 1 year

Within 2 years,
but over 1 year

Within 3 years,
but over 2 years

Within 4 years,
but over 3 years

Within 5 years,
but over 4 years

Over 5 years

Cash and deposits

19,070,683

－

－

－

－

－

Cash and deposits in trust

1,597,181

－

－

－

－

－

20,667,865

－

－

－

－

－

Within 1 year

Within 2 years,
but over 1 year

Within 3 years,
but over 2 years

Within 4 years,
but over 3 years

Within 5 years,
but over 4 years

18,280,633

–

–

–

–

Total

23rd Fiscal Period [As of May 31, 2017](Unit: thousand yen)

Cash and deposits

Over 5 years–

Cash and deposits in trust

1,697,781

–

–

–

–

–

Total

19,978,415

–

–

–

–

–

(Note 4) Amount of repayment of short-term loans payable, current portion of long-term loans payable, long-term loans payable
and investment corporation bonds scheduled to be due after the settlement of accounts.
22nd Fiscal Period [As of November 30, 2016](Unit: thousand yen)
Within 1 year

Within 2 years,
but over 1 year

Within 3 years,
but over 2 years

Within 4 years,
but over 3 years

Within 5 years,
but over 4 years

Short-term loans payable

1,000,000

－

－

－

－

－

Current portion of
long-term loans payable

28,250,000

－

－

－

－

－

Over 5 years

Investment corporation bonds－－

3,000,000－－

2,100,000

Long-term loans payable－

17,350,000

22,000,000

31,600,000

24,200,000

74,800,000

29,250,000

17,350,000

25,000,000

31,600,000

24,200,000

76,900,000

Within 1 year

Within 2 years,
but over 1 year

Within 3 years,
but over 2 years

Within 4 years,
but over 3 years

Within 5 years,
but over 4 years

Over 5 years

Short-term loans payable

1,000,000

－

－

－

－

－

Current portion of
long-term loans payable

19,400,000

－

－

－

－

－

－

－

3,000,000－－

2,100,000－

21,500,000

25,000,000

33,300,000

21,500,000

77,500,000

20,400,000

21,500,000

28,000,000

33,300,000

21,500,000

79,600,000

Total

23rd Fiscal Period [As of May 31, 2017](Unit: thousand yen)

Investment corporation bonds
Long-term loans payable
Total- 23 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period[Notes to Derivative Transactions](1) Transactions for which hedge accounting is not applied
22nd Fiscal Period [As of November 30, 2016]
Not applicable.
23rd Fiscal Period [As of May 31, 2017]
Not applicable.
(2) Transactions for which hedge accounting is applied
22nd Fiscal Period [As of November 30, 2016]
About derivative transactions for which hedge accounting is applied, the contract amount, amount equivalent to the principal
provided in the contract, etc. as of the settlement of accounts for each hedge accounting approach are as follows.
(Unit: thousand yen)Contract amount, etc.
Hedge
Main
Method ofType, etc. of derivative
accounting
hedgedFair value
calculation of
Of which,transaction
approach
item
that fair value
over 1 year
Interest rate swap
Principle
Long-term
Based on pricetransaction
accounting
loans
quoted by partner
99,600,000
99,600,000(765,091)
Fixed payable
methodpayablefinancial institution
Floating receivable
SpecialInterest rate swap
Long-term
accounting
transaction
loans－
28,350,000
14,350,000(*)
for interest
Fixed payablepayablerate swaps
Floating receivable
Total－
127,950,000
113,950,000(765,091)
23rd Fiscal Period [As of May 31, 2017]
About derivative transactions for which hedge accounting is applied, the contract amount, amount equivalent to the principal
provided in the contract, etc. as of the settlement of accounts for each hedge accounting approach are as follows.
(Unit: thousand yen)Contract amount, etc.
Hedge
Main
Method ofType, etc. of derivative
accounting
hedgedFair value
calculation of
Of which,transaction
approach
item
that fair value
over 1 year
Interest rate swap
Principle
Based on priceLong-termtransaction
accounting
quoted by partner
loans
112,600,000
110,100,000(752,224)
Fixed payable
methodfinancial institution
payableFloating receivable
SpecialInterest rate swap
Long-term
accounting
transaction
(*)
loans
－
19,850,000
9,000,000
for interest
Fixed payablepayablerate swaps
Floating receivable
Total－
132,450,000
119,100,000
752,224)(*) Since the derivative financial instruments qualifying for the special accounting for interest rate swaps are accounted for as one
transaction together with their hedged item, long-term loans payable, the fair value of these derivatives is included in that ofrelated long-term loans payable. (Please refer to “Notes to Financial Instruments (2) Matters Concerning Fair Value, etc. of
Financial Instruments (Note 1) Liabilities (4) (6)”).

- 24 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period[Notes to Transactions with Related Parties]
22nd Fiscal Period [From: June 1, 2016 To: November 30, 2016]
Not applicable.
23rd Fiscal Period [From: December 1, 2016 To: May 31, 2017]
Not applicable.

- 25 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period[Notes to Investment and Rental Properties]
The Investment Corporation has rental office buildings, etc. (including land) in Tokyo and other regions. The carrying amount,amount of increase (decrease) during period and fair value for these rental properties are as follows.
(Unit: thousand yen)
22nd Fiscal Period[From: June 1, 2016
To: Nov. 30, 2016]

23rd Fiscal Period[From: Dec. 1, 2016
To: May 31, 2017]

Carrying amount
Balance at beginning of period
Amount of increase (decrease) during period
Balance at end of period
Fair value at end of period

451,114,325

460,321,339

9,207,014

664,697

460,321,339

460,986,036

505,430,000

518,560,000(Note 1) The carrying amount is the amount after accumulated depreciation is deducted from the cost of acquisition.
(Note 2) Of the amount of increase (decrease) for rental properties during the 22nd Fiscal Period, the amount of increase ismainly attributable to acquisition of 4 properties (13,392 million yen) and the amount of decrease is mainly attributableto sales of Daiwa Kudan (3,795 million yen) and depreciation (1,749 million yen). Of the amount of increase (decrease)for rental properties during the 23rd Fiscal Period, the amount of increase is mainly attributable to acquisition of Shin
Kanda Mikura-cho Building (1,592 million yen) and the amount of decrease is mainly attributable to depreciation (1,770
million yen).
(Note 3) The fair value at end of period presents the appraisal value estimated by external real estate appraisers.
The income (loss) for investment and rental properties are as presented in the aforementioned “Notes to Statements of Income.”- 26 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period[Notes to Segment Information, etc.](1) Segment Information
Segment information has been omitted because the Investment Corporation has no segment except the property leasing
business.
(2) Related Information
22nd Fiscal Period [From: June 1, 2016 To: November 30, 2016]① Information about products and services
Information about products and services has been omitted because net sales to external customers for one segment are inexcess of 90% of the operating revenue on statements of income.
② Information about geographical areas
A. Net sales
Information about net sales has been omitted because net sales to external customers in Japan are in excess of 90% of
the operating revenue on statements of income.
B. Property, plant and equipment
Information about property, plant and equipment has been omitted because the amount of property, plant andequipment located in Japan is in excess of 90% of the amount of property, plant and equipment on balance sheets.
③ Information about major customers
Information about principal customers has been omitted because each net sales to a single external customer accounts
for less than 10% of the operating revenue on statements of income.
23rd Fiscal Period [From: December 1, 2016 To: May 31, 2017]① Information about products and services
Information about products and services has been omitted because net sales to external customers for one segment are inexcess of 90% of the operating revenue on statements of income.
② Information about geographical areas
A. Net sales
Information about net sales has been omitted because net sales to external customers in Japan are in excess of 90% of
the operating revenue on statements of income.
B. Property, plant and equipment
Information about property, plant and equipment has been omitted because the amount of property, plant andequipment located in Japan is in excess of 90% of the amount of property, plant and equipment on balance sheets.
③ Information about major customers
Information about principal customers has been omitted because each net sales to a single external customer accounts
for less than 10% of the operating revenue on statements of income.

- 27 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period[Notes to Per Unit Information]
22nd Fiscal Period
23rd Fiscal Period[From: June 1, 2016
[From: Dec. 1, 2016
To: Nov. 30, 2016]
To: May 31, 2017]
Net assets per unit
515,230 yen
515,317 yen
Net income per unit
10,800.73 yen
10,764.31yen(Note 1) The net income per unit was calculated by dividing the net income by the daily weighted average number of investment
units issued and outstanding. The diluted net income per unit is not stated as there are no diluted investment units.
(Note 2) The basis for calculating the net income per unit is as follows.
22nd Fiscal Period
23rd Fiscal Period[From: June 1, 2016
[From: Dec. 1, 2016
To: Nov. 30, 2016]
To: May 31, 2017]
Net income (thousand yen)
5,324,585
5,359,217
Amounts not attributable to common unitholders (thousand yen)－－
Net income attributable to common investment units (thousand yen)
5,324,585
5,359,217
Average number of investment units during the period (unit)
492,984
597,869[Notes to Significant Subsequent Events]
Not applicable.

- 28 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
3.9. Increase (Decrease) in Number of Investment Units Issued and Outstanding
Since no capital increase, etc. were conducted in the 23rd Fiscal Period, there is no change to unitholders’ capital, etc.
The overview of capital increase in the most recent 5 years up to the end of the 23rd Fiscal Period is as follows.
Number of investment units
Unitholders’ capitalissued and outstanding(million yen)(units)Payment date
Description
Notes
Increase
Increase
Balance
Balance(Decrease)(Decrease)
Capital increase through public
July 2, 2014
41,092436,890
18,522
217,303 (Note 1)
offering
Capital increase by way of a
July 30, 2014
4,110
441,000
1,852
219,155 (Note 2)
third-party allotment
Capital increase through public
June 1, 2015
41,045
482,045
23,145242,301 (Note 3)
offering
Capital increase by way of aJune 24, 2015
1,955
484,000
1,102
243,403 (Note 4)
third-party allotment
Capital increase through public
August 2, 2016
12,700496,700
7,461
250,864 (Note 5)
offering
Capital increase by way of a
August 31, 2016
1,169
497,869686
251,551 (Note 6)
third-party allotment(Note 1) The Investment Corporation issued new investment units through public offering at an issue price of 466,537 yen per unit
(paid-in price: 450,746 yen) to procure funds for acquisition of properties, etc.
(Note 2) The Investment Corporation issued new investment units by way of a third-party allotment at an issue price of 450,746 yen
per unit (paid-in price: 450,746 yen) to procure funds for acquisition of properties, etc.
(Note 3) The Investment Corporation issued new investment units through public offering at an issue price of 583,050 yen per unit
(paid-in price: 563,914 yen) to procure funds for acquisition of properties, repayment of borrowings, etc.
(Note 4) The Investment Corporation issued new investment units by way of a third-party allotment at an issue price of 563,914 yen
per unit (paid-in price: 563,914 yen) to procure funds for acquisition of properties, repayment of borrowings, etc.
(Note 5) The Investment Corporation issued new investment units through public offering at an issue price of 607,425 yen per unit
(paid-in price: 587,489 yen) to procure funds for repayment of borrowings, etc.
(Note 6) The Investment Corporation issued new investment units by way of a third-party allotment at an issue price of 587,489 yen
per unit (paid-in price: 587,489 yen) to procure funds for repayment of borrowings, etc.

- 29 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
4. Changes in Directors
4.1. Changes in Directors at the Investment Corporation
Not applicable.
4.2. Changes in Directors at the Asset Manager
There were changes in Directors at the Asset Manager on March 31, 2017 and April 1, 2017.
The following is the directors at the Asset Manager as of the date of this document.

Title

Name

President andRepresentative
Director

Akira
YamauchiCareer summary
Apr. 1986
Apr. 2002
May 2002
Mar. 2003
Aug. 2004
Feb. 2008
Feb. 2009
Jul. 2009
Apr. 2010
May 2010

Vice-President
andRepresentative
Director (Headof Corporate
Division andBusiness
Planning
Department)

Yuji
Shinotsuka

Apr. 1989
Jun. 2009
Jul. 2009

Nov. 2009
Apr. 2011
Oct. 2012
Dec. 2012
Jan. 2014
Aug. 2014
Apr. 2016

Apr. 2017

Vice President
andRepresentative
Director (Headof Private Fund
Division andPrivate Fundmanagement
Department)

YoshikiNishigaki

Apr. 1992
May 2004
Feb. 2006
Mar. 2007
Mar. 2008
Nov. 2008
May 2010
Aug. 2010
Feb. 2011

Joined Marubeni Corporation
Joined Pacific Management Corporation
Temporarily transferred to Pacific Investment Advisors Corporation(currently, AD Investment Management Co., Ltd.)
President and Representative Director of Pacific Investment Advisors
Corporation (with employment transfer)
Executive Director of Nippon Residential Investment Corporation (currently,
Advance Residence Investment Corporation)
President and Representative Director of Pacific Investment Partners Inc.
(currently, Cushman & Wakefield Asset Management K.K.)
Representative Director (part-time) of Pacific Holdings, Inc.
Executive Managing Director of Cushman & Wakefield Asset Management K.K.
Advisor of Daiwa Real Estate Asset Management Co., Ltd.
President and Representative Director of Daiwa Real Estate AssetManagement Co., Ltd. (current position)
Joined Daiwa Securities Co. Ltd. (currently, Daiwa Securities Group Inc.)
Head of Corporate Planning Department of Daiwa Securities Group Inc.
Temporarily transferred to Daiwa Real Estate Asset Management Co., Ltd.
Vice-President and Representative Director (Head of IR & Planning
Department) of Daiwa Real Estate Asset Management Co., Ltd.
Vice-President and Representative Director (Head of Corporate Planning
Department) of Daiwa Real Estate Asset Management Co., Ltd.
Vice-President and Representative Director (Head of Business Planning and
Finance Department) of Daiwa Real Estate Asset Management Co., Ltd.
Vice-President and Representative Director (Head of Corporate Planning
Department) of Daiwa Real Estate Asset Management Co., Ltd.
Executive Director of Daiwa Residential Private Investment Corporation(current position)
Executive Director of Nippon Healthcare Investment Corporation
Resigned from office as Executive Director of Nippon Healthcare Investment
CorporationVice-President and Representative Director (Head of Corporate Planning
Department) of Daiwa Real Estate Asset Management Co., Ltd. (withemployment transfer)Vice-President and Representative Director (Head of Corporate Division andBusiness Planning Department) of Daiwa Real Estate Asset Management Co.,
Ltd. (current position)
Joined Cititrust & Banking Corporation
Joined K.K. DaVinci Advisors
Transferred to K.K. DaVinci Select (currently, Daiwa Real Estate AssetManagement Co., Ltd.)
Head of IR & Business Planning Department of Daiwa Real Estate AssetManagement Co., Ltd.
President and Representative Director Executive of Daiwa Real Estate AssetManagement Co., Ltd.
Director of DA Office Investment Corporation (currently, Daiwa Office
Investment Corporation)
Vice President and Representative Director of Daiwa Real Estate AssetManagement Co., Ltd.
Resigned from Executive Director of Daiwa Office Investment CorporationVice-President and Representative Director (Head of Advisory Department) of- 30 -

Numberof shares
owned(shares)－－－Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period

Apr. 2012
Oct. 2013

Apr. 2014
Apr. 2017

Director(Head of
Acquisition and
AssetManagement
Division, AssetManagement
Department andOrigination
Department)

ToshioFukushima

Director(Head of
Administration
Department)

HajimeImbe

Apr. 1992
Jul. 2004
Aug. 2009
Mar. 2011
Jun. 2013
Nov. 2015
Apr. 2016
Apr. 2017

Apr. 1988
Jun. 2006
Apr. 2009
Jan. 2010
Oct. 2010
Apr. 2012
Apr. 2013
Apr. 2017

Director(part-time)

MikitaKomatsu

Apr. 1985
Oct. 2005
Oct. 2008
Apr. 2010
Apr. 2011
Apr. 2012
Apr. 2013
Apr. 2016
Jun. 2016

Director(part-time)

Naoya
Otani

Apr. 1988
Jun. 2006
Apr. 2009
Jul. 2011

Apr. 2017
Jun. 2017

Daiwa Real Estate Asset Management Co., Ltd.
Vice-President and Representative Director (Head of Private Fund Management
Department) of Daiwa Real Estate Asset Management Co., Ltd.
Vice-President and Representative Director (Head of Customer Relations
Department and Private Fund Management Department) of Daiwa Real Estate
Asset Management Co., Ltd.
Vice-President and Representative Director (Head of Private Fund Management
Department) of Daiwa Real Estate Asset Management Co., Ltd.
Vice-President and Representative Director (Head of Private Fund Division andPrivate Fund Management Department) of Daiwa Real Estate AssetManagement Co., Ltd. (current position)
Joined Tokyu Land Corporation
Joined Pacific Management Corporation
Joined Mitsubishi Estate Co., Ltd.
Joined Daiwa Real Estate Asset Management Co., Ltd.
Head of Acquisition Department of Daiwa Real Estate Asset Management Co., Ltd.
Head of Acquisition Department and Origination Department of Daiwa Real
Estate Asset Management Co., Ltd.
Head of Asset Management Department and Origination Department of Daiwa
Real Estate Asset Management Co., Ltd.
Director and Head of Acquisition and Asset Management Division, AssetManagement Department and Origination Department of Daiwa Real Estate
Asset Management Co., Ltd. (current position)
Joined Daiwa Securities Co. Ltd. (currently, Daiwa Securities Group Inc.)
Managing Director of Human Resources Department of Daiwa Securities Group
Inc.
Managing Director of Investment Banking Strategic Planning Department of
Daiwa Securities SMBC Co. Ltd. (currently, Daiwa Securities Co. Ltd.)Managing Director of Global Investment Banking Planning Department of
Daiwa Securities Capital Markets Co. Ltd.
Managing Director of Corporate Division Planning Department of Daiwa
Securities Capital Markets Co. Ltd.
Managing Director of Corporate Division Planning Department of Daiwa
Securities Co. Ltd.
Managing Director of Corporate Business Planning Department of Daiwa
Securities Co. Ltd.
Temporarily transferred to Daiwa Real Estate Asset Management Co., Ltd.
Director and Head of Administration Department of Daiwa Real Estate AssetManagement Co., Ltd. (current position)
Joined Daiwa Securities Co. Ltd. (currently, Daiwa Securities Group Inc.)
Head of Finance Department of Daiwa Securities Group Inc.
President of Daiwa Securities SMBC Europe Limited (currently Daiwa CapitalMarkets Europe Limited)
Senior Managing Director of Daiwa Securities Capital Markets Co. Ltd.
Senior Managing Director of Daiwa Securities Group Inc.
Director (part-time) of Daiwa Real Estate Asset Management Co., Ltd. (current
position)
Executive Managing Director of Daiwa Securities Group Inc.
Senior Managing Director of Daiwa Securities Group Inc.
Director and Senior Managing Director of Daiwa Securities Group Inc. (current
position)
Joined Daiwa Securities Co. Ltd. (currently, Daiwa Securities Group Inc.)
Managing Director of Legal Department and Corporate Planning Department of
Daiwa Securities Group Inc.
Managing Director of Corporate Planning Department of Daiwa Securities
SMBC Co. Ltd. (currently, Daiwa Securities Co. Ltd.)Managing Director of Corporate Planning Department of Daiwa Securities
Group Inc. (current position)
Managing Director of Corporate Planning Department of Daiwa Securities Co.
Ltd. (current position)
Director of Daiwa Real Estate Asset Management Co. Ltd.(part-time) (current
position)
Auditor of Nippon Record Keeping Network Co., Ltd. (part-time) (current
position)- 31 -－－－－

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
AuditorTamaki
Shibayama

Apr. 1982
Sept. 1986
Apr, 2002
Oct. 2010
Apr. 2012

Auditor(part-time)

Morimasa
MatsudaApr. 2015
Apr. 1989
Jun. 2007
Dec. 2009
Apr. 2011
Apr. 2013
Apr. 2016

Auditor(part-time)

Shinji Kiso

Jun. 2016
Apr. 2001
Dec. 2009
Jul. 2011
Jun. 2013
May 2014
Jun. 2015
Jan. 2016

Joined the Japan Chamber of Commerce and Industry
Joined Daiwa Securities Co., Ltd. (currently Daiwa Securities Group Inc.)
General Manager of Initial Public Offering Department of Daiwa Securities
SMBC Co., Ltd. (currently Daiwa Securities Co. Ltd.)
Head of Corporate Auditor’s Office of Daiwa Securities Capital Markets Co.,Ltd.
Managing Director of Corporate Clients Banking Department (VII) of Daiwa
Securities Co., Ltd.
Auditor of Daiwa Real Estate Asset Management Co. Ltd. (current position)
Joined Daiwa Securities Co. Ltd. (currently, Daiwa Securities Group Inc.)
Managing Director of Corporate Planning Department of Daiwa Securities
SMBC Co. Ltd. (currently, Daiwa Securities Co. Ltd.)Managing Director of Asia Strategic Planning Department of Daiwa Securities
SMBC Co. Ltd. (currently, Daiwa Securities Co. Ltd.)Managing Director of Investor Relations Office of Daiwa Securities Group Inc.
Managing Director of Internal Audit Department of Daiwa Securities Group Inc.
Executive Director of Daiwa Securities Group Inc.
Auditor of Daiwa Real Estate Asset Management Co. Ltd. (part-time) (current
position)
Director of Daiwa Securities Group Inc. (current position)
Joined Daiwa Securities SMBC Co., Ltd. (currently, Daiwa Securities Co., Ltd.)
Corporate Planning Department of Daiwa Securities Group Inc. (current
position)
Corporate Planning Department of Daiwa Securities Co., Ltd. (current position)
Director (part-time) of ASTMAX Co., Ltd. (current position)
Auditor (part-time) of Daiwa Real Estate Asset Management Co. Ltd. (current
position)
Director (part-time) of Money Partners Group Co., Ltd. (current position)
Auditor (part-time) of IDI infrastructures, Inc. (current position)(Note 1) Naoyuki Owa left the office of Director on March 31, 2017.
(Note 2) Akihiko Ogino left the office of Director (part-time) on March 31, 2017.
(Note 3) Toshio Fukushima assumed office as Director on April 1, 2017.
(Note 4) Hajime Imbe assumed office as Director on April 1, 2017.
(Note 5) Naoya Otani assumed office as Director (part-time) on April 1, 2017.

- 32 -－－－

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period

5. Reference Information
5.1. Investment Status
Type of asset

Real estate

Trust beneficial interestin real estate

Use

OfficeOfficeRegion23rd Fiscal Period(As of May 31, 2017)
Total amount owned
As a percentage of total(million yen) (Note 1)
assets (%)

Five Central Wards of Tokyo

15,983

3.3

Five Central Wards of Tokyo

392,333

81.1

Greater Tokyo

38,0397.9

Major Regional Cities

14,6303.0

460,986

95.3

22,744

4.7

487,730100.0[460,986][95.3]

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

- 33 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
5.2. Investment Real Estate Properties (As of May 31, 2017)
5.2.1. Price and Investment Ratio of Investment Real Estate Properties
Acquisition
Carrying
Type ofprice
amountRegionProperty namespecified asset (million yen) (million yen)
(Note 4)(Note 5)
Daiwa Ginza
14,10013,198
Real estate
Daiwa Ginza Annex
3,050
2,784
Daiwa Shibaura
8,265
8,039
Daiwa Minami-Aoyama
4,550
4,443
Daiwa Sarugakucho
3,190
3,226
Daiwa A Hamamatsucho (Note 8)
2,865
2,806
Daiwa Jingumae
2,800
2,726
Daiwa Shibadaimon
2,578
2,420
Daiwa Misakicho
2,346
2,174
Daiwa Shimbashi 510
2,080
2,136
Daiwa Tsukijiekimae
1,560
1,314
Daiwa Tsukiji
1,240
1,151
Daiwa Tsukishima
7,840
6,994
Daiwa Nihonbashi Horidomecho
2,520
2,473
Daiwa Azabudai
1,600
1,523
Daiwa Kyobashi
3,460
3,262
Daiwa Kojimachi 4-chome
2,910
2,850
Daiwa Onarimon
13,86013,394
Shinjuku Maynds Tower (Note 8)
133,800
129,636SHIBUYA EDGE
5,900
5,681
Five
Daiwa
Kodenmacho
2,460
2,383
Central
Trust
4,150
4,045
Wards of Daiwa Jimbocho
beneficial
Tokyo
Daiwa Nishi-Shimbashi
5,000
4,791
interest in real
(Note 1)
Daiwa Kayabacho Building
5,600
5,315
estateDaiwa Jimbocho 3-chome
3,550
3,413
E SPACE TOWER
24,00023,617
Daiwa Nihonbashi Hongokucho
1,721
1,615
shinyon curumu
9,650
9,742
Daiwa Akasaka
9,200
9,415
Daiwa Shibuya Miyamasuzaka
7,000
7,222
Daiwa Azabu Terrace (Note 9)
14,00014,161
Daiwa Ebisu 4-chome
4,135
4,246
LAQUAS Higashi Shinjuku
8,450
8,548
Daiwa Aoyama (Note 9)9,800
10,070Shinsen Place
4,800
4,917
Glass City Shibuya
16,00016,042
Daiwa River Gate (Note 9)
28,00028,178Daiwa Hatchobori ekimae
2,871
2,958
Daiwa Hatchobori ekimae West
1,647
1,733
Nikko Building
13,71013,967
Kirin Nihonbashi Building
8,180
8,316
Daiwa Higashi-nihonbashi (Note 9)
6,370
6,389
Square Daikanyama Building
2,280
2,391

- 34 -

Estimated price at Investment
end of periodratio(million yen)(%)
(Note 6)(Note 7)
17,100
3.0
3,560
0.6
7,680
1.8
4,520
1.0
3,550
0.7
3,460
0.6
2,460
0.6
3,040
0.5
2,790
0.5
2,530
0.4
1,720
0.3
1,490
0.3
9,570
1.7
2,590
0.5
1,890
0.3
3,390
0.7
2,820
0.6
13,8003.0
125,000
28.5
5,050
1.3
2,200
0.5
3,530
0.9
6,350
1.1
7,880
1.2
4,760
0.8
33,300
5.1
2,320
0.4
14,8002.1
13,200
2.0
8,740
1.5
16,100
3.0
5,420
0.9
10,4001.8
12,000
2.1
6,520
1.0
18,3003.4
30,100
6.0
3,220
0.6
1,820
0.4
14,900
2.9
8,290
1.7
6,750
1.4
2,530
0.5

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
Shinjuku West Building
Shin Kanda Mikura-cho Building
Total for Five Central Wards of Tokyo (45 Properties)

942
1,592
415,622983
1,609
408,316

1,200
1,700
454,340

0.2
0.3
88.6

Daiwa Higashi-Ikebukuro
Daiwa Shinagawa North
Greater Daiwa Osaki 3-chomeTokyo
Daiwa Kamiooka(Note 2) Integral Tower
Daiwa Meguro Square (Note 9)
Daiwa Ogikubo (Note 9)
Total for Greater Tokyo (7 properties)
Major
Daiwa Meieki
Regional
CitiesDaiwa Kitahama (Note 9)(Note 3)
Total for Major Regional Cities (2 properties)
Total (54 properties)

2,958
7,710
1,650
2,000
15,2205,600
3,800
38,938

2,697
7,210
1,628
1,948
14,9685,574
4,012
38,039

3,690
6,020
2,320
2,700
19,2006,550
4,390
44,870

0.6
1.6
0.4
0.4
3.2
1.2
0.8
8.3

5,300

5,256

7,750

1.1

9,481

9,373

11,6002.0

14,781
469,341

14,630460,986

19,350518,560

3.1
100.0

Trust
beneficial
interest in realestateTrustbeneficial
interest in realestate(Note 1) “Five Central Wards of Tokyo” means Chiyoda, Chuo, Minato, Shinjuku and Shibuya wards.
(Note 2) “Greater Tokyo” means Tokyo excluding the Five Central Wards of Tokyo, Kanagawa, Chiba and Saitama prefectures.
(Note 3) “Major Regional Cities” means Osaka area (i.e., Osaka, Kyoto and Hyogo prefectures), Nagoya area (Aichi, Mie andGifu prefectures) and ordinance-designated cities and core cities under the Local Autonomy Act.
(Note 4) Acquisition price is excluding acquisition costs, fixed property tax, city planning tax, consumption tax and local
consumption tax.
(Note 5) Carrying amount is the book value after depreciation as of May 31, 2017.
(Note 6) Estimated price at end of period is the price as of May 31, 2017 stated in appraisal reports prepared by real estateappraisers of Tanizawa Sogo Appraisal Co., Ltd., Daiwa Real Estate Appraisal Co., Ltd., Morii Appraisal & Investment
Consulting, Inc. and Japan Real Estate Institute in accordance with the articles of incorporation of the Investment
Corporation and the rules of The Investment Trusts Association, Japan.
(Note 7) Investment ratio is the acquisition price of each property expressed as a percentage of the total amount of acquisition
prices, rounded to one decimal place.
(Note 8) For Daiwa A Hamamatsucho Building and Shinjuku Maynds Tower, the figures are those pertaining to the Investment
Corporation’s ownership interest.
(Note 9) The Investment Corporation changed the names of assets under management from River Gate to Daiwa River Gate,
Heiwa Higashi-nihonbashi to Daiwa Higashi-nihonbashi, Meguro Place Tower to Daiwa Meguro Square, Ogikubo TM
Building to Daiwa Ogikubo and Kitahama Grand Building to Daiwa Kitahama on April 1, 2017; from Concept Aoyama
to Daiwa Aoyama on May 1, 2017; and from Azabu Green Terrace to Daiwa Azabu Terrace on June 1, 2017. The same
applies hereinafter in this document.

- 35 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
5.2.2. Summary of Building and Leasing of Investment Real Estate
RegionProperty nameDaiwa Ginza
Daiwa Ginza Annex
Daiwa Shibaura
Daiwa Minami-Aoyama
Daiwa Sarugakucho (Note 8)
Daiwa A Hamamatsucho
Daiwa Jingumae
Daiwa Shibadaimon
Daiwa Misakicho (Note 8)
Daiwa Shimbashi 510
Daiwa Tsukijiekimae
Five Central Daiwa Tsukiji
Wards ofTokyo
Daiwa Tsukishima
Daiwa Nihonbashi Horidomecho
Daiwa Azabudai
Daiwa Kyobashi
Daiwa Kojimachi 4-chome
Daiwa Onarimon
Shinjuku Maynds Tower (Note 9)
SHIBUYA EDGE
Daiwa Kodenmacho
Daiwa Jimbocho
Daiwa Nishi-Shimbashi
Daiwa Kayabacho Building (Note 8)

Structureandnumber offloors(Note 1)SRC
B3 / 12F
SRC
B3 / 8F
SRC
B1 / 12FS / SRC
B2 / 5F
SRC
8F
SRC
B2 / 10FRC
B1 / 4F
SRC / RC
B1 / 7F
S
8F
SRC
B1 / 8F
SRC
10F
SRC
B1 / 7F
S
5F
SRC
B2 / 7F
SRC
B2 / 9F
SRC
B1 / 8F
SRC
B2 / 9F
SRC
9F
S / SRC
B3 / 34F
RC
B1 / 9F
SRC
8FS
B1 / 8F
SRC
B1 / 10F
S / SRC
B1 / 8F

Rent revenue
Occupancy
during current
rate
period(%)(thousand yen)
(Note 6)(Note 7)

Construction
completion(Note 2)

Leasable
floor area(m2)
(Note 3)

Leased floor
area
(m2)
(Note 4)

Total
number oftenants(Note 5)

July 1963

8,170.23

7,924.91

27

96.9

373,786

Aug. 1972

2,032.11

2,032.11

7

100.0

92,928Oct. 1987

9,619.67

8,688.11

55

90.3

241,800

Sept. 1990

2,715.54

2,715.546

100.0

119,154

June 1985

3,657.43

3,657.43

1

100.0

-

July 1993

3,663.38

3,663.38

12

100.0

130,390

Dec. 1997

2,198.61

2,198.61

4

100.0

69,217

Nov. 1996

2,386.48

2,386.48

6

100.0

84,910July 1996

2,137.53

2,137.53

1

100.0

-

Apr. 1974

2,641.56

2,633.16

7

99.6

77,071

Jan. 1996

2,659.59

2,659.59

6

100.0

56,621

Jan. 1990

1,487.44

1,487.445

100.0

47,982

July 1996

8,425.69

8,425.69

4

100.0

99,687

Apr. 1993

2,850.81

2,850.81

8

100.0

84,497

Apr. 1984

1,697.88

1,697.88

10

100.0

55,652

Oct. 1974

3,265.83

2,871.699

87.9

85,126

Oct. 1987

2,690.90

2,690.90

7

100.0

91,104

Apr. 1973

11,614.92

11,614.92

8

100.0

326,769

Sept. 1995

45,543.97

44,009.84

37

96.6

2,529,595

Aug. 2006

2,480.65

2,480.65

5

100.0

117,697

Mar. 1985

2,379.31

2,379.31

8

100.0

64,341Mar. 1997

3,164.26

3,164.267

100.0

105,712

July 1993

4,815.84

4,815.84

11

100.0

169,101

Apr. 2010

5,899.11

5,899.11

1

100.0

-

- 36 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period

RegionProperty nameDaiwa Jimbocho 3-chome
E SPACE TOWER
Daiwa Nihonbashi Hongokucho
shinyon curumu
Daiwa Akasaka
Daiwa Shibuya Miyamasuzaka
Daiwa Azabu Terrace
Daiwa Ebisu 4-chome (Note 8)
LAQUAS Higashi Shinjuku
Daiwa Aoyama
Shinsen Place (Note 8)
Glass City Shibuya
Daiwa River Gate
Daiwa Hatchobori ekimae
Daiwa Hatchobori ekimae West
Nikko Building
Kirin Nihonbashi Building (Note 8)
Daiwa Higashi-nihonbashi Building
Square Daikanyama Building (Note 8)
Shinjuku West Building
Shin Kanda Mikura-cho Building

Structureandnumber offloors(Note 1)S
9F
S / SRC
B1 / 15F
S
8F
S / RC
B2 / 11F
SRC
B2 / 7FS
B1 / 12F
S / RC
B1 / 6F
SRC
B1 / 9FS
10F
S / RC
B1 / 7FRC
B1 / 9FS / SRC
B1 / 11F
S / SRC /RC
B2 / 20FS / SRC
B1 / 10F
SRC
B1 / 9F
SRC / RC /S
B2 / 11F
S / SRC
7F
S
7F
S
6F
RC
4F
SRC
B1 / 7F

Leasable
floor area(m2)
(Note 3)

Leased floor
area
(m2)
(Note 4)

Total
number oftenants(Note 5)

Feb. 2010

2,889.34

2,889.34

8

100.0

107,334

Oct. 2002

13,960.87

13,960.87

7

100.0

733,592

May 2010

2,143.08

2,143.08

6

100.0

64,257Jan. 2012

6,751.31

6,720.81

17

99.5

337,540

Sept. 1990

8,739.17

8,739.17

20

100.0

354,816

Dec. 1988

6,327.95

6,327.958

100.0

244,736

Sept. 2009

13,234.39

13,192.63

11

99.6

441,054

Dec. 1997

2,885.64

2,885.64

1

100.0

-

Aug. 2010

7,498.33

7,498.33

4

100.0

224,590

Nov. 2001

4,424.48

3,802.63

6

85.9

126,890

Sept. 2001

2,811.35

2,811.35

1

100.0

-

Feb. 2004

8,566.73

8,566.73

10

100.0

409,131

Feb. 1994

32,063.06

28,962.35

79

90.3

1,032,701

Feb. 2006

2,622.42

2,622.429

100.0

78,618Feb. 1996

1,723.15

1,723.15

8

100.0

45,540Aug. 1991

6,967.61

6,924.71

7

99.3

299,338

Feb. 1999

5,630.17

5,630.17

1

100.0

-

Mar. 2008

5,015.88

5,015.88

5

100.0

166,398

Mar. 2001

1,588.35

1,588.35

1

100.0

-

Mar. 1989

1,120.58

1,120.58

8

100.0

34,589Jan. 1991

1,720.83

1,196.17

5

69.5

15,281

276,883.43

269,407.50

474

97.2

10,629,208

June 1993

4,461.47

4,461.477

100.0

120,777

July 1991

6,548.17

6,548.17

14

100.0

192,897

Sept. 2007

1,786.06

1,786.06

5

100.0

61,620

May 2011

2,630.30

2,630.30

9

100.0

85,666

June 1993

17,778.14

17,778.14

9

100.0

587,563

July 2009

3,519.50

3,519.50

16

100.0

146,092

Nov. 1990

3,849.63

3,849.63

11

100.0

125,404

Total for Five Central Wards of Tokyo (45 properties)
Daiwa Higashi-Ikebukuro
Daiwa Shinagawa North
Daiwa Osaki 3-chome
GreaterTokyo

Daiwa Kamiooka
Integral Tower (Note 10)
Meguro Place Tower
Daiwa Ogikubo

SRC / S
B1 / 9F
SRC
B1 / 11F
S / RC
B1 / 6F
S / SRC
B3 / 7FS / SRC
B2 / 18FS / SRC
B2 / 14F
SRC
B1 / 7F

Total for Greater Tokyo (7 properties)
Major
Regional
CitiesDaiwa Meieki
Daiwa Kitahama

S
12F
S / SRC
B1 / 16F

Rent revenue
Occupancy
during current
rate
period(%)(thousand yen)
(Note 6)(Note 7)

Construction
completion(Note 2)

40,573.27

40,573,27

71

100.0

1,320,021

Dec. 2007

7,461.90

7,461.90

26

100.0

225,455

Feb. 2008

13,517.62

13,364.78

6

98.8

338,332

20,979.52
338,436.22

20,826.68
330,807.45

32
577

99.2
97.7

563,788
12,513,018

Total for Major Regional Cities (2 properties)
Total (54 properties)- 37 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period(Note 1) “Structure and number of floors” are the entries in the real estate registry of the building of the applicable investment
real estate property. “S” refers to steel-framed structure, “RC” refers to reinforced concrete structure, “SRC” refers tosteel-framed reinforced concrete structure, “B” refers to floors below ground and “F” refers to floors above ground.
(Note 2) “Construction completion” is the entry in the real estate registry of the building of the applicable investment real estate
property.
(Note 3) “Leasable floor area” represents the floor area of the building of the applicable property that is leasable, not including
the leasable area of the land (including level parking space), and is the floor area indicated in the lease contract, etc. as of
May 31, 2017.
(Note 4) “Leased floor area” is the sum total of the floor area that is actually leased based on lease agreements, etc. executed with
end-tenants as of May 31, 2017.
(Note 5) “Total number of tenants” is the number of end-tenants. When there is a tenant occupying multiple buildings, theconcerned tenant is counted and stated for each individual building.
(Note 6) “Occupancy rate” is the figure arrived at when leased floor area is divided by leasable floor area, rounded down to one
decimal place.
(Note 7) “Rent revenue during current period” is rent income, common area charges income, parking lot income and otherincome generated from the applicable investment real estate property (excluding other lease business revenue) during the23rd Fiscal Period, rounded down to the nearest thousand yen.
(Note 8) Not shown for such reasons as consent was not obtained from major tenants to disclose the rent revenue during current
period for the properties.
(Note 9) The real estate in trust pertaining to trust beneficial interest held by the Investment Corporation is the common
ownership interest corresponding to six-sevenths of the entire property. Accordingly, leasable floor area and leased floorarea are the floor areas corresponding to six-sevenths of the entire building.
(Note 10) The buildings consist of three registrations. Of these, the details of the major building are shown here.

- 38 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
5.2.3. Capital Expenditures for Assets under Management
A. Scheduled Capital Expenditures for the 24th Fiscal Period
The following are the principal capital expenditures arising from renovation construction work, etc. currently planned forexisting portfolio properties. Please note that the expected construction amount includes portions that are expensed as aseparate account item of accounting costs.
Name of real estate properties(Location)
Daiwa Akasaka(Minato-ku, Tokyo)
Integral Tower(Suginami-ku, Tokyo)
Shinjuku Maynds Tower(Shibuya-ku, Tokyo)
Shinjuku Maynds Tower(Shibuya-ku, Tokyo)

PurposeUpgrading of air-conditioning system
Upgrading of air-conditioning system
Remodeling of gray water facility
Changing lighting in exclusive areas to
LED (green leasing)

Expected construction amount (million yen)
Scheduled
implementation
Amount paid
Total amount
Total amountperiodduring current period
already paid
From: Nov. 2016
1,091
327
－
To Jun. 2018
From: Mar. 2017
935
277
－
To Apr. 2018
From: Jul. 201784－－
To Nov. 2017
From: Aug. 201760－－
To Nov. 2017

B. Capital Expenditures during the 23rd Fiscal Period
The following summarizes the primary construction work that constitutes capital expenditures implemented during the 23rd
Fiscal Period. Capital expenditures for the 23rd Fiscal Period amounted to 823 million yen and, when combined with the 316
million yen in repair expenses charged to the23rd Fiscal Period expenses, totals 1,139 million yen in construction work were
implemented.
Name of real estate properties(Location)
Daiwa Ogikubo(Suginami-ku, Tokyo)
Daiwa Akasaka(Minato-ku, Tokyo)
Daiwa Shibadaimon(Minato-ku, Tokyo)

PurposeConstruction amount paid
(million yen)

PeriodUpgrading of air-conditioning equipment
Repair work of mechanical parking facility
Upgrading of individual air-conditioning equipment

Other

From:
To:
From:
To:
From:
To:
From:
To:

Mar. 2017
May. 2017
Feb. 2017
May 2017
Mar. 2017
May 2017
Dec. 2016
May 2017

Total

69
43
41
669
823

C. Reserve Amount for Long-Term Repair Plans (Reserve for Repairs)
The Investment Corporation sets aside the following reserve for repairs from cash flows during the fiscal period for thepayment of future major repairs.
(Unit: million yen)
19th
20th
21st
22nd
23rd
Fiscal Period
Fiscal Period
Fiscal Period
Fiscal Period
Fiscal Period
Fiscal period[From: Dec. 1, 2014
To: May 31, 2015]

Balance of reserve at
beginning of current period
Amount of reserve incurrent period
Reversal of reserve incurrent period
Amount carried forward to
next period[From: June 1, 2015
To: Nov. 30, 2015][From: Dec. 1, 2015
To: May 31, 2016][From: June 1, 2016
To: Nov. 30, 2016][From: Dec. 1, 2016
To: May 31, 2017]

1,199

2,742

1,060

1,843

2,043

1,678

－

1,255

524

84

135

1,682

472

324

227

2,742

1,060

1,843

2,043

1,900

- 39 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period

5.2.4. Summary of Estimated Price at End of Period (As of May 31, 2017)
Summary of Appraisal Report
Property nameDaiwa Ginza
Daiwa Ginza Annex
Daiwa Shibaura
Daiwa Minami-Aoyama
Daiwa Sarugakucho
Daiwa A Hamamatsucho (Note 2)
Daiwa Jingumae
Daiwa Shibadaimon
Daiwa Misakicho
Daiwa Shimbashi 510
Daiwa Tsukijiekimae (Note 3)
Daiwa Tsukiji
Daiwa Tsukishima
Daiwa Nihonbashi Horidomecho
Daiwa Azabudai
Daiwa Kyobashi
Daiwa Kojimachi 4-chome
Daiwa Onarimon
Shinjuku Maynds Tower (Note 4)
SHIBUYA EDGE
Daiwa Kodenmacho
Daiwa Jimbocho
Daiwa Nishi-Shimbashi
Daiwa Kayabacho Building
Daiwa Jimbocho 3-chome
E SPACE TOWER
Daiwa Nihonbashi Hongokucho
shinyon curumu
Daiwa Akasaka
Daiwa Shibuya Miyamasuzaka
Daiwa Azabu Terrace
Daiwa Ebisu 4-chome
LAQUAS Higashi Shinjuku
Daiwa Aoyama
Shinsen Place
Glass City Shibuya
Daiwa River Gate
Daiwa Hatchobori ekimae
Daiwa Hatchobori ekimae West
Nikko Building
Kirin Nihonbashi Building
Daiwa Higashi-nihonbashi Building
Square Daikanyama Building (Note 5)

Estimated priceat end of period(million yen)
(Note 1)

Direct capitalization method
Price(million yen)

Cap rate(%)

DCF method
Price(million yen)
16,700Discount Terminal
cap rate
rate
(%)
(%)

17,10017,400

3.6

3.4

3.8

3,560

3,640

3.5

3,470

3.3

3.7

7,680

7,710

4.1

7,670

3.9

4.3

4,520

4,560

3.9

4,480

3.7

4.1

3,550

3,620

4.5

3,480

4.3

4.7

3,460

3,510

3.8

3,440

3.6

4.0

2,460

2,490

3.8

2,430

3.6

4.0

3,040

3,100

3.7

3,010

3.5

3.9

2,790

2,820

4.0

2,770

3.8

4.2

2,530

2,580

4.1

2,470

3.9

4.3

1,720

1,740

4.3

1,710

4.3

4.5

1,490

1,450

4.2

1,510

4.2

4.4

9,570

9,670

4.2

9,530

3.9

4.4

2,590

2,650

4.1

2,530

3.9

4.3

1,890

1,930

4.0

1,850

3.8

4.2

3,390

3,450

4.0

3,330

3.8

4.2

2,820

2,830

3.7

2,810

3.5

3.9

13,80014,4003.8

13,5003.6

4.0

125,000

149,000

3.3

142,000

3.1

3.5

5,050

5,160

3.8

4,940

3.6

4.0

2,200

2,210

4.3

2,180

4.1

4.5

3,530

3,620

4.0

3,490

4.0

4.2

6,350

6,480

3.6

6,300

3.4

3.8

7,880

8,030

3.4

7,810

3.2

3.6

4,760

4,870

3.4

4,710

3.2

3.6

33,30034,0003.4

32,600

3.2

3.6

2,320

2,350

4.0

2,310

3.8

4.2

14,80015,1003.3

14,700

3.1

3.5

13,20013,5003.3

13,100

3.1

3.5

8,740

8,900

3.7

8,580

3.5

3.9

16,10016,3003.9

15,800

3.7

4.1

5,420

5,410

3.75

5,420

3.55

3.95

10,40010,700

3.4

10,200

3.2

3.6

12,00012,3003.3

11,800

3.1

3.5

6,520

6,620

3.4

6,480

3.3

3.6

18,30018,4003.5

18,1003.2

3.6

30,10030,2004.1

29,900

3.8

4.2

3,220

3,360

3.6

3,160

3.4

3.8

1,820

1,880

3.7

1,790

3.5

3.9

14,90015,5003.4

14,700

3.2

3.6

8,290

8,450

4.0

8,120

3.7

4.1

6,750

6,950

3.9

6,660

3.7

4.1

2,530

2,560

3.5

2,520

3.5

3.7

- 40 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
Summary of Appraisal Report
Property name

Estimated priceat end of period(million yen)
(Note 1)

Direct capitalization method
Price(million yen)

Cap rate(%)

DCF method
Price(million yen)

Discount Terminal
cap rate
rate
(%)
(%)

1,200
1,210
3.8
1,190
3.6
4.0
Shinjuku West Building
1,700
1,740
4.1
1,680
4.1
4.3
Shin Kanda Mikura-cho Building
3,690
3,740
4.2
3,670
4.0
4.4
Daiwa Higashi-Ikebukuro
6,020
6,090
4.3
5,950
4.1
4.5
Daiwa Shinagawa North
2,320
2,340
3.9
2,310
3.7
4.1
Daiwa Osaki 3-chome
2,700
2,690
4.6
2,700
4.4
4.8
Daiwa Kamiooka
19,20019,5003.8
19,1003.6
4.0
Integral Tower
6,550
6,750
3.6
6,460
3.4
3.8
Daiwa Meguro Square
4,390
4,470
4.0
4,350
3.8
4.2
Daiwa Ogikubo
7,750
7,930
4.2
7,670
4.2
4.4
Daiwa Meieki
11,60011,9003.8
11,500
3.6
4.0
Daiwa Kitahama
518,560
549,760
530,640
Total(Note 1) “Estimated price at end of period” is the price as of May 31, 2017 stated in appraisal reports prepared by real estateappraisers of Tanizawa Sogo Appraisal Co., Ltd., Daiwa Real Estate Appraisal Co., Ltd., Morii Appraisal & Investment
Consulting, Inc. and Japan Real Estate Institute in accordance with the articles of incorporation of the Investment
Corporation and the rules of The Investment Trusts Association, Japan.
(Note 2) For Daiwa A Hamamatsucho, the prices are those pertaining to the Investment Corporation’s ownership interest.
(Note 3) Discount rate for Daiwa Tsukijiekimae is the figure after the 2nd fiscal year (4.2% for the 1st fiscal year).
(Note 4) For Shinjuku Maynds Tower, the estimated price at end of period is the price pertaining to the Investment Corporation’sownership interest, and the price indicated by the direct capitalization method and price indicated by the DCF method
are the prices pertaining to the entire Property.
(Note 5) Discount rate for Square Daikanyama Building is the figure after the 11th fiscal year (3.6% up to the 10th fiscal year).

- 41 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
5.2.5. Status of Income (Loss), etc. of Individual Properties
The following table lists the status of income (loss), etc. of each property for the 23rd Fiscal Period (from December 1,
2016 to May 31, 2017). Income (loss) information is presented in accordance with “3. Financial Statements; 3.7. Notes to
Significant Accounting Policies” outlined earlier.
RegionPrice
information

Five Central Wards of Tokyo

Acquisition date

Oct. 2005

Oct. 2005

Oct. 2005

Oct. 2005

Oct. 2005

Acquisition price (million yen)

14,100

3,050

8,265

4,550

3,190

3.0

0.6

1.8

1.0

0.7

Carrying amount (million yen)

13,198

2,784

8,039

4,443

3,226

Estimated price at end of period(million yen)

17,100

3,560

7,680

4,520

3,550

Number of tenants (Note 1)

Daiwa
Shibaura

Daiwa
Sarugakucho(Note 4)

Daiwa
Ginza

Investment ratio (%)

Daiwa
Ginza Annex

Daiwa
MinamiAoyama

Property name

27

7

55

6

1

Leasable floor area (m2)

8,170.23

2,032.11

9,619.67

2,715.54

3,657.43

Leased floor area (m2)

7,924.91

2,032.11

8,688.11

2,715.54

3,657.43

End of May 2015

91.8

100.0

99.5

100.0

100.0

End of Nov. 2015

93.9

100.0

98.7

100.0

100.0

End of May 2016

93.9

100.0

99.1

84.8

100.0

End of Nov. 2016

94.9

100.0

97.6

100.0

100.0

End of May 2017

96.9

100.0

90.3

100.0

100.0

182

182

182

182

182

373,786

92,928244,041

119,154－373,786

92,928

241,800

119,154

－

－

－

2,241

－

－

173,390

40,50490,59239,083－

Consignment expenses

23,683

5,527

17,984

5,158－

Utilities expenses

23,387

5,641

17,234

5,780－

Taxes and dues

27,976

9,131

19,584

11,850－Occupancy rate (%)
Leasing
information

Number of days of asset management
Total property leasing revenue (A) (thousandyen)
Rent revenue – real estate
Other lease business revenue
Total property leasing expenses (B) (thousandyen)

Income (loss)
information

Reference
information

Non-life insurance expenses

366

85

336

134

－

Repair expenses

13,088

1,893

6,935

2,220

－

Depreciation (C)73,045

18,22528,497

13,939－Other lease business expenses

11,841

－

20

－

－

Operating income (loss) from property leasing(D) [(A) – (B)] (thousand yen)

200,395

52,423

153,448

80,070－NOI (E) [(D) + (C)] (thousand yen)

273,441

70,649181,945

94,00982,659

Capital expenditures (F) (thousand yen)

40,282

500

6,508

811

37,777

NCF [(E) – (F)] (thousand yen)

233,158

70,149175,437

93,19844,882

Expense rate (%) [(B) ÷ (A)]

46.39

43.59

37.12

32.80

－

55,78518,06738,64523,401

13,316

346,060

86,510347,210

185,215

171,199

Annual amount of fixed property tax, etc. forfiscal 2017 (thousand yen)
Estimated long-term repair expenses(thousand yen) (Note 2)- 42 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
RegionPrice
information

Five Central Wards of Tokyo

Property nameDaiwa A
Hamamatsucho

Daiwa Jingumae

Daiwa
Shibadaimon

Acquisition date

Oct. 2005

Oct. 2005

Oct. 2005

Oct. 2005

Oct. 2005

Acquisition price (million yen)

2,865

2,800

2,578

2,346

2,080

Daiwa Misakicho Daiwa Shimbashi(Note 4)510

Investment ratio (%)

0.6

0.6

0.5

0.5

0.4

Carrying amount (million yen)

2,806

2,726

2,420

2,174

2,136

Estimated price at end of period(million yen)

3,460

2,460

3,040

2,790

2,530

Number of tenants (Note 1)

12

4

6

1

7

Leasable floor area (m2)

3,663.38

2,198.61

2,386.48

2,137.53

2,641.56

Leased floor area (m2)

3,663.38

2,198.61

2,386.48

2,137.53

2,633.16

End of May 2015

100.0

100.0

100.0

100.0

99.6

End of Nov. 2015

100.0

100.0

100.0

100.0

99.6

End of May 2016

100.0

100.0

100.0

100.0

88.0

End of Nov. 2016

100.0

100.0

100.0

100.0

99.6

End of May 2017

100.0

100.0

100.0

100.0

99.6

182

182

182

182

182

130,390

69,217

84,910－77,071

130,390

69,217

84,910－77,071

－

－

－

－

－

74,71524,71039,645－24,606

Occupancy rate (%)
Leasing
information

Number of days of asset management
Total property leasing revenue (A) (thousandyen)
Rent revenue – real estate
Other lease business revenue
Total property leasing expenses (B) (thousandyen)

Income (loss)
information

Reference
information

Consignment expenses

11,943

4,310

7,063

－

4,993

Utilities expenses

8,085

4,654

5,662

－

5,485

Taxes and dues

8,795

6,365

6,240

－

5,673
109

Non-life insurance expenses

156

72

106

－

Repair expenses

1,203

172

10,442－338

Depreciation (C)15,131

9,127

10,129－8,006

Other lease business expenses

29,4007－－－

Operating income (loss) from property leasing(D) [(A) – (B)] (thousand yen)

55,67444,50745,264－52,465

NOI (E) [(D) + (C)] (thousand yen)

70,806

53,63455,39362,56060,471

Capital expenditures (F) (thousand yen)

3,558

928

45,937

11,39013,726

NCF [(E) – (F)] (thousand yen)

67,24752,706

9,455

51,17046,744

Expense rate (%) [(B) ÷ (A)]

57.30

35.70

46.69

－

31.93

17,366

12,714

12,173

10,32911,296

100,430

117,930

150,927

182,856

169,555

Annual amount of fixed property tax, etc. forfiscal 2017 (thousand yen)
Estimated long-term repair expenses(thousand yen) (Note 2)- 43 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
RegionPrice
information

Five Central Wards of Tokyo
Daiwa
Nihonbashi
Horidomecho

Daiwa AzabudaiMar. 2006

May 2006

May 2006

1,240

7,840

2,520

1,600

Property name

Daiwa
Tsukijiekimae

Daiwa
Tsukiji

Daiwa
Tsukishima

Acquisition dateJan. 2006

Jan. 2006

Acquisition price (million yen)

1,560

Investment ratio (%)

0.3

0.3

1.7

0.5

0.3

Carrying amount (million yen)

1,314

1,151

6,994

2,473

1,523

Estimated price at end of period(million yen)

1,720

1,490

9,570

2,590

1,890

Number of tenants (Note 1)

6

5

4

8

10

Leasable floor area (m2)2,659.59

1,487.44

8,425.69

2,850.81

1,697.88

Leased floor area (m2)2,659.59

1,487.44

8,425.69

2,850.81

1,697.88

End of May 2015

100.0

89.2

100.0

100.0

100.0

End of Nov. 2015

100.0

89.2

100.0

100.0

100.0

End of May 2016

100.0

89.2

100.0

100.0

100.0

End of Nov. 2016

100.0

100.0

56.7

100.0

100.0

End of May 2017

100.0

100.0

100.0

100.0

100.0

182

182

182

182

182

56,621

48,282

99,68784,49755,652

56,621

47,982

99,68784,49755,652

－

300

－

－

－

29,084

18,365

132,352

34,302

24,874

Occupancy rate (%)
Leasing
information

Number of days of asset management
Total property leasing revenue (A) (thousandyen)
Rent revenue – real estate
Other lease business revenue
Total property leasing expenses (B) (thousandyen)

Income (loss)
information

Consignment expenses

4,183

3,768

50,093

5,161

3,645

Utilities expenses

5,462

2,704

9,884

4,866

2,947

Taxes and dues

5,072

3,863

13,706

6,719

4,913

Non-life insurance expenses

86

55

255

116

65

Repair expenses

755

650

899

3,031

4,390

Depreciation (C)13,505

7,322

57,497

14,407

8,912

18

－

16

－

－

Operating income (loss) from property leasing(D) [(A) – (B)] (thousand yen)

27,537

29,917(32,664)

50,19430,778

NOI (E) [(D) + (C)] (thousand yen)

41,04337,24024,83264,602

39,690

Other lease business expenses

Capital expenditures (F) (thousand yen)

Reference
information

136

830

611

10,880

1,492

NCF [(E) – (F)] (thousand yen)

40,90736,41024,22153,722

38,198

Expense rate (%) [(B) ÷ (A)]

51.37

38.04

－

40.60

44.70

10,101

7,663

27,454

13,193

9,813

120,530

109,848

102,930

234,846

108,280

Annual amount of fixed property tax, etc. forfiscal 2017 (thousand yen)
Estimated long-term repair expenses(thousand yen) (Note 2)- 44 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
RegionPrice
information

Five Central Wards of Tokyo
Daiwa Kojimachi
Shinjuku Maynds
Daiwa Onarimon
4-chomeTower

SHIBUYAEDGE

Property nameDaiwa Kyobashi

Acquisition dateJuly 2006

Oct. 2006

Dec. 2006

July 2007 andNov. 2007

July 2007

Acquisition price (million yen)

3,460

2,910

13,860133,800

5,900

Investment ratio (%)

0.7

0.6

3.0

28.5

1.3

Carrying amount (million yen)

3,262

2,850

13,394

129,636

5,681

Estimated price at end of period(million yen)

3,390

2,820

13,800125,000

5,050

Number of tenants (Note 1)

9

7

8

37

5

Leasable floor area (m2)

3,265.83

2,690.90

11,614.92

45,543.97

2,480.65

Leased floor area (m2)2,871.69

2,690.90

11,614.92

44,009.84

2,480.65

End of May 2015

100.0

100.0

100.0

98.8

100.0

End of Nov. 2015

100.0

100.0

100.0

96.1

100.0

End of May 2016

100.0

100.0

100.0

98.8

100.0

End of Nov. 2016

88.2

100.0

100.0

99.2

100.0

End of May 2017

87.9

100.0

100.0

96.6

100.0

182

182

182

182

182

87,662

91,104340,499

2,529,595

117,697

Rent revenue – real estate

85,126

91,104

326,769

2,529,595

117,697

Other lease business revenue

2,535

－

13,730－－Occupancy rate (%)
Leasing
information

Number of days of asset management
Total property leasing revenue (A) (thousand
yen)

Total property leasing expenses (B) (thousandyen)

Income (loss)
information

50,43347,941

112,881

1,093,245

40,528

Consignment expenses

9,516

6,026

23,649160,905

8,632

Utilities expenses

6,591

6,368

20,892

262,064

6,529

Taxes and dues

7,114

14,952

34,932

253,767

7,240

Non-life insurance expenses

114

126

352

3,221

92

Repair expenses

7,128

7,850

1,888

18,486

1,692

Depreciation (C)19,96912,61531,165

392,653

16,341

－

－

－

2,146

－

Operating income (loss) from property leasing(D) [(A) – (B)] (thousand yen)

37,22943,163

227,618

1,436,350

77,168

NOI (E) [(D) + (C)] (thousand yen)

57,19955,779258,783

1,829,003

93,510

Other lease business expenses

Capital expenditures (F) (thousand yen)

Reference
information

180

7,020

1,830

67,083415

NCF [(E) – (F)] (thousand yen)

57,01948,758

256,953

1,761,920

93,095

Expense rate (%) [(B) ÷ (A)]

57.53

52.62

33.15

43.22

34.43

14,092

29,64669,800500,692

14,448140,200

169,753459,880

4,460,870

62,460

Annual amount of fixed property tax, etc. forfiscal 2017 (thousand yen)
Estimated long-term repair expenses(thousand yen) (Note 2)- 45 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
RegionPrice
information

Five Central Wards of Tokyo
Daiwa
NishiShimbashi

Daiwa
Kayabacho
Building(Note 4)

Property name

Daiwa
Kodenmacho

Daiwa Jimbocho

Acquisition dateAug. 2007

Mar. 2010

Aug. 2010

Mar. 2011

Mar. 2011

Acquisition price (million yen)

2,460

4,150

5,000

5,600

3,550

Daiwa Jimbocho3-chomeInvestment ratio (%)

0.5

0.9

1.1

1.2

0.8

Carrying amount (million yen)

2,383

4,045

4,791

5,315

3,413

Estimated price at end of period(million yen)

2,200

3,530

6,350

7,880

4,760

Number of tenants (Note 1)

8

7

11

1

8

Leasable floor area (m2)2,379.31

3,164.26

4,815.84

5,899.11

2,889.34

Leased floor area (m2)2,379.31

3,164.26

4,815.84

5,899.11

2,889.34

End of May 2015

100.0

100.0

96.3

100.0

100.0

End of Nov. 2015

100.0

100.0

100.0

100.0

100.0

End of May 2016

100.0

100.0

100.0

100.0

100.0

End of Nov. 2016

100.0

100.0

100.0

100.0

100.0

End of May 2017

100.0

100.0

100.0

100.0

100.0

182

182

182

182

182

64,341

105,712

169,101－

107,334

64,341

105,712

169,101－

107,334

－

－

－

－

－

23,56547,18280,341－

46,899

Occupancy rate (%)
Leasing
information

Number of days of asset management
Total property leasing revenue (A) (thousandyen)
Rent revenue – real estate
Other lease business revenue
Total property leasing expenses (B) (thousandyen)

Income (loss)
information

Consignment expenses

4,043

7,048

17,909－

9,722

Utilities expenses

4,102

6,675

9,940

－

6,296

Taxes and dues

3,646

10,875

15,766

－

9,375

82

118

214

－

110

1,451

836

2,272

－

1,569
19,825

Non-life insurance expenses
Repair expenses
Depreciation (C)Reference
information

9,415

21,36834,237－

Other lease business expenses

822

261

－

－

－

Operating income (loss) from property leasing(D) [(A) – (B)] (thousand yen)

40,77658,52988,760－60,435

NOI (E) [(D) + (C)] (thousand yen)

50,192

79,897

122,998

148,486

80,260Capital expenditures (F) (thousand yen)

1,138

1,153

12,509323

780

NCF [(E) – (F)] (thousand yen)

49,05378,744110,488

148,163

79,480

Expense rate (%) [(B) ÷ (A)]

36.63

44.63

47.51

－

43.69

7,285

21,506

31,19624,822

18,699100,234

128,200

187,580

125,988

82,470

Annual amount of fixed property tax, etc. forfiscal 2017 (thousand yen)
Estimated long-term repair expenses(thousand yen) (Note 2) (Note 3)- 46 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
RegionProperty namePrice
information

Five Central Wards of Tokyo
Daiwa
Nihonbashi
Hongokucho

E-SPACE
TOWER

shinyoncurumuDaiwa Akasaka

Daiwa Shibuya
Miyamasuzaka

Acquisition dateJuly 2011

May 2012

Dec. 2012 andApr. 2013

Aug. 2013

Sept. 2013

Acquisition price (million yen)

24,000

1,721

9,650

9,200

7,000

Investment ratio (%)

5.1

0.4

2.1

2.0

1.5

Carrying amount (million yen)

23,617

1,615

9,742

9,415

7,222

Estimated price at end of period(million yen)

33,3002,320

14,80013,2008,740

Number of tenants (Note 1)

7

6

17

20

8

Leasable floor area (m2)

13,960.87

2,143.08

6,751.31

8,739.17

6,327.95

Leased floor area (m2)

13,960.87

2,143.08

6,720.81

8,739.17

6,327.95

End of May 2015

96.4

100.0

100.0

85.8

100.0

End of Nov. 2015

100.0

100.0

100.0

88.4

100.0

End of May 2016

100.0

100.0

100.0

100.0

100.0

End of Nov. 2016

96.8

100.0

100.0

100.0

100.0

End of May 2017

100.0

100.0

99.5

100.0

100.0

182

182

182

182

182

733,592

64,257

341,791

354,816

244,736

733,592

64,257

337,540

354,816

244,736

－

－

4,250

－

－

Occupancy rate (%)
Leasing
information

Number of days of asset management
Total property leasing revenue (A) (thousandyen)
Rent revenue – real estate
Other lease business revenue
Total property leasing expenses (B) (thousandyen)

Income (loss)
information

231,964

24,914

122,733

132,186

84,278

Consignment expenses

54,022

3,910

33,45225,06521,311

Utilities expenses

42,643

3,034

19,35033,726

14,545

Taxes and dues

56,7894,407

33,52333,17920,001

Non-life insurance expenses

571

64

275

357

250

Repair expenses

10,148324

208

16,045

6,308

Depreciation (C)67,286

13,17435,924

23,611

21,765

502

－

－

200

96

Operating income (loss) from property leasing(D) [(A) – (B)] (thousand yen)

501,627

39,342

219,057

222,630

160,458

NOI (E) [(D) + (C)] (thousand yen)

568,91452,517

254,981

246,241

182,223

Capital expenditures (F) (thousand yen)

61,309350

400

57,087

480

NCF [(E) – (F)] (thousand yen)

507,604

52,167

254,581

189,154

181,743

Expense rate (%) [(B) ÷ (A)]

31.62

38.77

35.91

37.25

34.44

113,486

8,784

66,671

66,06740,089574,150

50,94065,855

430,612416,816

Other lease business expenses

Reference
information

Annual amount of fixed property tax, etc. forfiscal 2017 (thousand yen)
Estimated long-term repair expenses(thousand yen) (Note 2) (Note 3)- 47 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period
RegionProperty namePrice
information

Five Central Wards of Tokyo
Daiwa Azabu
TerraceDaiwa Ebisu

LAQUAS

4-chome(Note 4)

HigashiDaiwa Aoyama

Shinjuku

Shinsen Place(Note 4)

Acquisition dateJul. 2014

Dec. 2014

Dec. 2014

Mar. 2015

Mar. 2015

Acquisition price (million yen)

14,000

4,135

8,450

9,800

4,800

3.0

0.9

1.8

2.1

1.0

Carrying amount (million yen)

14,161

4,246

8,548

10,0704,917

Estimated price at end of period(million yen)

16,1005,420

10,40012,0006,520

Investment ratio (%)

Number of tenants (Note 1)

11

1

4

6

1

Leasable floor area (m2)

13,234.39

2,885.64

7,498.33

4,424,48

2,811.35

Leased floor area (m2)

13,192.63

2,885.64

7,498.33

3,802.63

2,811.35

Occupancy rate (%)
Leasing
information

End of May 2015

100.0

0.0

100.0

85.9

100.0

End of Nov. 2015

100.0

100.0

100.0

100.0

100.0

End of May 2016

94.9

100.0

100.0

91.4

100.0

End of Nov. 2016

99.6

100.0

100.0

100.0

100.0

End of May 2017

99.6

100.0

100.0

85.9

100.0

182

182

182

182

182

441,054－

224,590

126,890－441,054－

224,590

126,890

－

－

－

－

－

－

164,642－

80,294

95,890－Consignment expenses

31,430－

11,20821,008－

Utilities expenses

42,306－

11,846

5,869－

Taxes and dues

31,814－

20,426

12,748

－

508

－

262

132

－

Repair expenses

7,852

－

4,055

36,640－Depreciation (C)50,600－32,336

19,491－

Number of days of asset management
Total property leasing revenue (A) (thousandyen)
Rent revenue – real estate
Other lease business revenue
Total property leasing expenses (B) (thousandyen)

Income (loss)
information

Non-life insurance expenses

Other lease business expenses

Reference
information

130

－

158

－

－

Operating income (loss) from property leasing(D) [(A) – (B)] (thousand yen)

276,411－

144,296

30,999－

NOI (E) [(D) + (C)] (thousand yen)

327,012

116,454

176,632

50,490121,395

Capital expenditures (F) (thousand yen)

21,912

－

2,350

2,066

22,840

NCF [(E) – (F)] (thousand yen)

305,099

116,454

174,282

48,42498,554

Expense rate (%) [(B) ÷ (A)]

37.33

－

35.75

75.57

－

63,132

17,88640,35025,421

16,292

325,054

115,410

125,440

97,530112,510Annual amount of fixed property tax, etc. forfiscal 2017 (thousand yen)
Estimated long-term repair expenses(thousand yen) (Note 2)- 48 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period

RegionProperty nameAcquisition date
Acquisition price (million yen)
Investment ratio (%)

Five Central Wards of Tokyo
Glass City Shibuya

Daiwa River
Gate

Daiwa Hatchobori Daiwa Hatchobori
Nikko Building
ekimaeekimae WestMay 2015

Jun. 2015

Sep. 2015

Sep. 2015

Mar. 2016

16,00028,000

2,871

1,647

13,710Price
information Carrying amount (million yen)

3.4

6.0

0.6

0.4

2.9

16,042

28,178

2,958

1,733

13,967

Estimated price at end of period(million yen)

18,30030,100

3,220

1,820

14,900

Number of tenants (Note 1)

10

79

9

8

7

Leasable floor area (m2)

8,566.73

32,063.06

2,622.42

1,723.15

6,967.61

Leased floor area (m2)

8,566.73

28,962.35

2,622.42

1,723.15

6,924.71

End of May 2015

100.0

－

－

－

－

End of Nov. 2015

100.0

95.3

100.0

100.0

－

End of May 2016

100.0

98.6

100.0

100.0

99.3

End of Nov. 2016

100.0

95.1

100.0

100.0

99.3

End of May 2017

100.0

90.3

100.0

100.0

99.3

182

182

182

182

182

409,1311,038,014

78,61845,540299,338

409,131

1,032,701

78,61845,540299,338

－

5,312

－

－

－

Occupancy rate (%)
Leasing
information

Number of days of asset management
Total property leasing revenue (A) (thousandyen)
Rent revenue – real estate
Other lease business revenue
Total property leasing expenses (B) (thousandyen)

Income (loss)
information

97,906553,446

34,625

17,72958,062

Consignment expenses

14,726100,169

7,669

4,819

20,840Utilities expenses

22,400116,066

6,165

3,243

17,310

Taxes and dues

27,200103,211

8,998

4,029

214

Non-life insurance expenses

314

1,528

110

56

263

Repair expenses

408

70,922

1,618

326

1,739

Depreciation (C)32,856

161,427

10,062

5,254

17,690

Other lease business expenses

－

120

－

－

3

Operating income (loss) from property
leasing (D) [(A) – (B)] (thousand yen)311,224484,567

43,99327,811

241,275

NOI (E) [(D) + (C)] (thousand yen)

344,081645,995

54,05633,065258,966

2,608

180,476

2,100

2,653

14,800

NCF [(E) – (F)] (thousand yen)341,473465,518

51,95630,412

244,165

Expense rate (%) [(B) ÷ (A)]

23.93

53.32

44.04

38.93

19.40

53,883202,886

17,772

7,988

70,212

202,340

1,970,900

114,190

84,620284,170

Capital expenditures (F) (thousand yen)

Reference
information

Annual amount of fixed property tax, etc. forfiscal 2017 (thousand yen)
Estimated long-term repair expenses(thousand yen) (Note 2)

RegionFive Central Wards of Tokyo- 49 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period

Property nameAcquisition date

Price
information

Kirin Nihonbashi
Daiwa
Building
Higashi-nihonbashi(Note 4)
Building

SquareDaikanyama
Building(Note 4)

Shinjuku West
Building

Shin Kanda
Mikura-cho
Building

May 2016

June 2016

June 2016

July 2016

December 2016

Acquisition price (million yen)

8,180

6,370

2,280

942

1,592

Investment ratio (%)

1.7

1.4

0.5

0.2

0.3

Carrying amount (million yen)

8,316

6,389

2,391

983

1,609

Estimated price at end of period(million yen)

8,290

6,750

2,530

1,200

1,700

Number of tenants (Note 1)

1

5

1

8

5

Leasable floor area (m2)

5,630.17

5,015.88

1,588.35

1,120.58

1,720.83

Leased floor area (m2)

5,630.17

5,015.88

1,588.35

1,120.58

1,196.17

End of May 2015

－

－

－

－

－

End of Nov. 2015

－

－

－

－

－

End of May 2016

100.0

－

－

－

－

End of Nov. 2016

100.0

100.0

100.0

100.0

－

End of May 2017

Occupancy rate (%)
Leasing
information

100.0

100.0

100.0

100.0

69.5

Number of days of asset management

182

182

182

182

162

Total property leasing revenue (A) (thousandyen)－

166,398－

34,58916,814

Rent revenue – real estate－

166,398－

34,58915,281Other lease business revenue

－

－

－

－

1,532

－

49,122－

9,707

18,910Consignment expenses

－

7,618

－

4,889

10,882

Utilities expenses－

10,625

－

2,392

1,297

Taxes and dues

－

81

－

9

9

Non-life insurance expenses

－

178

－

36

42

Repair expenses

－

5,526

－

204

1,795

Depreciation (C)－25,087

－

2,165

4,872

Other lease business expenses

－

4

－

10

9

Operating income (loss) from property leasing(D) [(A) – (B)] (thousand yen)－

24,881(2,095)

Total property leasing expenses (B) (thousandyen)

Income (loss)
information－

117,276

NOI (E) [(D) + (C)] (thousand yen)

170,892

142,363

27,89827,046

2,777

Capital expenditures (F) (thousand yen)

16,867

1,403

24,662

1,298

2,246

NCF [(E) – (F)] (thousand yen)

154,025

140,960

3,235

25,748

530

－

29.52

－

28.07

－

21,272

22,479

9,096

6,198

6,704

216,720

158,880

45,044

79,33074,026

Expense rate (%) [(B) ÷ (A)]
Reference
information

Annual amount of fixed property tax, etc. forfiscal 2017 (thousand yen)
Estimated long-term repair expenses(thousand yen) (Note 2)- 50 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period

Price
information

RegionGreater Tokyo

Property name

Daiwa
Higashi-Ikebukuro

Acquisition date

Oct. 2005

July 2007

Sept. 2012

Mar. 2013

May 2014

Acquisition price (million yen)

2,958

7,710

1,650

2,000

15,220Daiwa
ShinagawaNorth

Daiwa Osaki
3-chomeDaiwa
Kamiooka

Integral Tower

Investment ratio (%)

0.6

1.6

0.4

0.4

3.2

Carrying amount (million yen)

2,697

7,210

1,628

1,948

14,968Estimated price at end of period(million yen)

3,690

6,020

2,320

2,700

19,200

Number of tenants (Note 1)

7

14

5

9

9

Leasable floor area (m2)

4,461.47

6,548.17

1,786.06

2,630.30

17,778.14

Leased floor area (m2)

4,461.47

6,548.17

1,786.06

2,630.30

17,778.14

End of May 2015

100.0

90.0

100.0

100.0

99.5

End of Nov. 2015

100.0

100.0

100.0

100.0

99.5

End of May 2016

100.0

100.0

78.9

89.8

99.5

End of Nov. 2016

100.0

100.0

100.0

93.7

100.0

End of May 2017

100.0

100.0

100.0

100.0

100.0

182

182

182

182

182

120,777

192,922

61,62085,666

587,563

120,777

192,897

61,62085,666

587,563

－

24

－

－

－

Occupancy rate (%)
Leasing
information

Number of days of asset management
Total property leasing revenue (A) (thousandyen)
Rent revenue – real estate
Other lease business revenue
Total property leasing expenses (B) (thousandyen)

Income (loss)
information

57,837

86,63022,20537,292

267,599

Consignment expenses

11,295

15,217

3,912

5,966

52,742

Utilities expenses

11,58913,950

2,848

6,827

66,397

Taxes and dues

8,598

18,375

3,935

6,333

44,311

Non-life insurance expenses

188

290

58

100

740

Repair expenses

2,809

4,474

37

－

12,249Depreciation (C)23,35634,313

11,39318,06590,773

－

9

20

－

384

Operating income (loss) from property leasing(D) [(A) – (B)] (thousand yen)

62,939106,291

39,414

48,373319,963

NOI (E) [(D) + (C)] (thousand yen)

86,296140,605

50,80866,439410,737

Capital expenditures (F) (thousand yen)

8,366

6,548

465

－

30,945

NCF [(E) – (F)] (thousand yen)

77,929134,056

50,34366,439379,791

Expense rate (%) [(B) ÷ (A)]

47.89

44.90

36.04

43.53

45.54

17,08435,553

7,845

12,56788,483228,260

331,160

37,912

24,782

834,324

Other lease business expenses

Reference
information

Annual amount of fixed property tax, etc. forfiscal 2017 (thousand yen)
Estimated long-term repair expenses (thousandyen) (Note 2)- 51 -

Daiwa Office Investment Corporation (8976) Financial Report for the 23rd Fiscal Period

Price
information

RegionGreater Tokyo

Major Regional Cities

Property name

Meguro Daiwa
SquareOgikubo Daiwa

Daiwa Meieki

Daiwa Kitahama

Acquisition date

May 2015

July 2016

Feb. 2013

Aug. 2014

Acquisition price (million yen)

5,600

3,800

5,300

9,481

Investment ratio (%)

1.2

0.8

1.1

2.0

Carrying amount (million yen)

5,574

4,012

5,256

9,373

Estimated price at end of period(million yen)

6,550

4,390

7,750

11,600

Number of tenants (Note 1)

16

11

26

6

Leasable floor area (m2)

3,519.50

3,849.63

7,461.90

13,517.62

Leased floor area (m2)

3,519.50

3,849.63

7,461.90

13,364.78

End of May 2015

100.0

－

98.5

100.0

End of Nov. 2015

100.0

－

100.0

100.0

End of May 2016

100.0

－

100.0

100.0

End of Nov. 2016

96.1

100.0

100.0

100.0

End of May 2017

100.0

100.0

100.0

98.8

182

182

182

182

146,092

125,404

225,455

342,400

146,092

125,404

225,455

338,332

－

－

－

4,068

Occupancy rate (%)
Leasing
information

Number of days of asset management
Total property leasing revenue (A) (thousandyen)
Rent revenue – real estate
Other lease business revenue
Total property leasing expenses (B) (thousandyen)

Income (loss)
information

59,71642,18893,879144,796

Consignment expenses

9,761

9,859

22,642

24,992

Utilities expenses

8,762

6,125

14,08330,816

Taxes and dues

13,57526

20,29232,864Non-life insurance expenses

146

126

324

493

Repair expenses

4,814

15,300

1,050

2,017

Depreciation (C)22,655

10,74635,48653,379

－

4

－

232

Operating income (loss) from property leasing(D) [(A) – (B)] (thousand yen)

86,375

83,215131,576

197,604

NOI (E) [(D) + (C)] (thousand yen)

109,030

93,961167,062

250,984

Other lease business expenses

Capital expenditures (F) (thousand yen)

Reference
information

1,218

76,4693,321

10,680

NCF [(E) – (F)] (thousand yen)

107,812

17,491

163,740

240,304

Expense rate (%) [(B) ÷ (A)]

40.88

33.64

41.64

42.29

26,671

15,46740,33465,541110,053

161,340

170,803

264,054

Annual amount of fixed property tax, etc. forfiscal 2017 (thousand yen)
Estimated long-term repair expenses (thousandyen) (Note 2)(Note 1) Number of tenants is the number of end-tenants. When there is a tenant occupying multiple buildings, the concerned tenant iscounted and stated for each individual building.
(Note 2) Estimated long-term repair expenses are the total amount of repair expenses and renewal expenses estimated to arise over the
12-year period from the 1st year to the 12th year as stated in the building investigation diagnosis report.
(Note 3) Estimated long-term repair expenses of “Daiwa Kayabacho Building” are the total amount of repair expenses and renewal
expenses estimated to arise over the 10-year period from the 1st year to the 10th year as stated in the building investigation
diagnosis report.
(Note 4) Not disclosed for such reasons as consent was not obtained from major tenants to disclose the rent revenue, etc. for the property.

- 52 -