August 3, 2018
To All Concerned Parties
REIT Securities Issuer
3-8-11 Kudan Minami, Chiyoda-ku, Tokyo
Sakura Sogo REIT Investment Corporation
Representative: Makoto Muranaka,
Executive Director:(Securities Code 3473)
Asset Management Company:
Sakura Real Estate Funds Management, Inc.
Representative
Makoto Muranaka,/ Inquires:
Representative Director andPresident
Tel:+81-3-6272-6608

Notice Concerning Revision to Operating and Distribution Forecasts for the Fiscal Periods
Ending June 2018 and December 2018
Sakura Sogo REIT (hereinafter the “Investment Corporation”) announces revision to its operating
forecasts and distribution forecasts for the fourth fiscal period (from March 1, 2018 to June 30, 2018,
hereinafter “FP4”) and for the fifth fiscal period (from July 1, 2018 to December 31, 2018, hereinafter“FP5”) which were announced in the “Notice Concerning Revision to the Operating and Distribution
Forecasts Resulting from Change of Fiscal Period and Fiscal Term-End” dated May 10, 2018 as follows.
1. Details of revision to operating forecasts and distribution forecasts(1)
FP4

Previous forecast (A)Revised forecast (B)Increase/decrease（B-A）
Increase/decrease
rate

Distributions
per Unit(Yen)Distributions
in Excess ofEarnings
per Unit(Yen)

Operatingrevenue(mm yen)

Operatingincome(mm yen)

Ordinaryincome(mm yen)

Net income(mm yen)

1,628
1,768702
718

600
616600
616

1,801
1,848

00140

161616

47

0

8.5%

2.3%

2.7%

2.7%

2.6%

-(excluding
Distributions in
Excess ofEarnings)(Reference) FP4: number of investment units forecast on issue: 333,001 units, forecast net income per unit: 1,848 yen

(2)

FP5

Previous forecast (A)Revised forecast (B)Increase/decrease（B-A）
Increase/decrease
rate

Distributions
per Unit(Yen)Distributions
in Excess ofEarnings
per Unit(Yen)

Operatingrevenue(mm yen)

Operatingincome(mm yen)

Ordinaryincome(mm yen)

Net income(mm yen)

2,429
2,361

1,061
1,028

900
867

899
866

2,700
2,600

00-68

-33

-33

-33

-100

0

-2.8%

-3.1%

-3.7%

-3.7%

-3.7%

-

(excluding
Distributions inExcess ofEarnings)

(Reference) FP5: number of investment units forecast on issue: 333,001 units, forecast net income per unit: 2,600 yen(Note 1) A resolution was passed at the 2nd General Meeting of Shareholders held on May 31, 2018 to make apartial amendment to the Articles of Investment Corporation including changing the fiscal term-end of theInvestment Corporation from the last day of February and the last day of August of each year to the last dayof June and the last day of December of each year and the Investment Corporation's fiscal period ending
June 2018 (the fourth fiscal period) is the 4 month period from March 1, 2018 to June 30, 2018.
(Note 2) The operating forecasts and distribution forecasts for FP4 and FP5 are figures based on currently available
information calculated based on the assumptions described in the attachment “Assumptions for Operating
Forecasts for FP4 and FP5.” The actual operating revenue, operating income, ordinary income, net income
and distributions per unit excluding distributions in excess of earnings are subject to change due to factors
such as additional acquisition/disposition of real estate, fluctuations in rent income accompanying changesof tenants, changes in management environment including occurrence of unexpected repair, fluctuations ininterest rates, and issuance of new investment units in the future. In addition, the Investment Corporation
does not guarantee any actual cash distribution amount by announcing the forecast figures.
(Note 3) The forecasts remain subject to revision based on any material variance from assumptions attached.
(Note 4) Figures are rounded down. Percentages are rounded to the nearest decimal place.

2. Reason for the revision to operating forecasts and distribution forecasts
During the past few months, the Asset Management Company has been considering acquiring aportfolio comprised of several large-scale assets (hereinafter “Transaction”) which included an asset
from a pipeline support partner. As announced in “7. Future Outlook” in the “Notice ConcerningDisposition of Domestic Trust Beneficiary Right (Confomall Sapporo)” dated June 28, 2018, the AssetManagement Company investigated allocating a portion of the proceeds from the disposition ofConfomall Sapporo (hereinafter “Disposition”) to the Transaction. However, as the Investment
Corporation finally determined not to proceed with the Potential Reinvestments due to not being able
to reach agreement on certain terms and conditions with the vendors and Transaction timing, theoperating and distribution forecasts for FP4 and FP5 will be revised to reflect this, the effects of theDisposition, and the current operating status of the existing portfolio.
The main revisions to the forecast for FP4 are the increase in the operating revenue arising as aresult of recording a 142 million yen gain on sale from the Disposition and an increase in operating
expenses of 136 million yen associated with the Transaction. These expenses include third-party
consultant fees such as legal, tax, accounting and reports associated with completion of due diligenceand preparation of transaction documentation for a global public offer. As a result of the Disposition
there will be a decrease in rental income of 118 million yen and 23 million yen of other rental incomefor FP5.
The Investment Corporation plans to allocate 1,400 million yen of the 1,640 million yen of proceedsfrom the Disposition to repay borrowings due and payable on the last day of August 2018 after nettingout the gain on sale of 142 million yen, sales related expenses of 77 million yen and 21 million yen
retained as cash on hand.

This material is to be distributed to the Kabuto Club, the Ministry of Land, Infrastructure, Transportand Tourism Press Club, and the Ministry of Land, Infrastructure, Transport and Tourism Press Clubfor construction trade publications of the Ministry of Land, Infrastructure, Transport and Tourism.
Sakura Sogo REIT website address: http://sakurasogoreit.com/en/

[Attachment]
Assumptions for Operating Forecasts for FP4 and FP5

Item
Calculation periodWith regard to the real estate trust beneficiary interests of the properties(17 properties in total) (hereinafter the “Currently Owned Assets”), it isassumed that there will be no change (acquisition of new properties,
disposition of portfolio properties, etc.) in FP4 and FP5.

Rental revenues from the Currently Owned Assets are calculated basedon the rents described in the lease agreements that are effective as oftoday.
The forecast of operating revenues is made on the assumption that notenants will delay or default rental payments.
Gain on sale of real estate property from Disposition is expected to be 142
million yen for FP4.
The main items of operating expenses are as follows (rounded down to
the nearest specified unit; the same shall apply hereinafter):Investment Assets

Operating revenueAssumptions
FP4 (From March 1, 2018 to June 30, 2018) (122 days)
FP5 (From July 1, 2018 to December 31, 2018) (184 days)

Expenses related toleasing business[Total]Management fees
Of which:
Maintenance andmanagement fee
Of which: Property
management fee
Repair expenses
Taxes and dues
Depreciation
Other than expenses
related to leasing
business [Total]
Asset managementfee
Non-deductible
consumption tax
Transaction costs

Operating expenses





FP4
718 million yen

FP5
1,068 million yen

219 million yen
164 million yen

350 million yen
269 million yen

55 million yen

81 million yen

25 million yen
136 million yen
177 million yen
321 million yen

27 million yen
191 million yen
244 million yen
265 million yen

117 million yen

173 million yen

13 million yen

13 million yen

136 million yen-Of expenses related to the leasing business of the Currently Owned
Assets, which are the main operating expenses, expenses other thandepreciation are calculated on a historical data basis based on
information provided by the previous owners of the Currently Owned
Assets and by reflecting variable factors.
Repair expenses for buildings are projected to be, based on the repair
plans drawn by the Asset Management Company, 25 million yen for FP4
and 27 million yen for FP5. However, due to reasons such as repair
expenses that may urgently arise for building damages, etc. caused byunforeseeable factors, the amount generally varying considerably
depending on the fiscal year, and because it is not an amount that arises
periodically, each calculation period’s repair expenses may differ
materially from the forecast amount.



Non-operating
expenses

Debt financing

Investment unitsDistribution per Unit

Distributions inExcess of Earnings
per Unit

OtherDepreciation calculated using the straight-line method, including
incidental expenses, are projected to be 177 million yen for FP4 and 244
million yen for FP5 respectively.
Upon acquisition of real estate or trust beneficiary interest having realestate as trust assets, the Investment Corporation includes the amountequivalent to fixed property taxes, city planning taxes, depreciable assets
taxes, etc. (hereinafter the “Fixed Property Taxes, etc.”) that are settledwith previous owners on a pro rata based on the number of days ofownership in the acquisition cost during the fiscal year of the acquisition.
As to the Fixed Property Taxes, etc. on the owned real estate or trust
beneficiary interest having real estate as trust assets, the Investment
Corporation adopts the method to record the amount corresponding to
the calculation period, out of finalized taxation amount, as expenses
related to leasing business.
Interest expenses and other borrowing related expenses are projected
to be 102 million yen for FP4. Due to additional interest cost associatedwith refinance of short term borrowings and extension of loan maturity
profile, 161 million yen is projected for FP5.
The total of interest-bearing liabilities outstanding is assumed to be29,000 million yen at the end of FP4 a and 27,600 million yen at the endof FP5 after allocating 1,400 million yen from the 1,640 million yen
earned in proceeds from the Disposition to the repayment of 1,400 million
yen of the Investment Corporation’s borrowings due and payable on thelast day of August 2018.
LTV at end of FP4 is projected to be about 46.2% and LTV at the end ofFP5 is projected to be about 44.9 %.
The following formula is used in the calculation of LTV.
LTV = Total interest-bearing liabilities ÷ Total assets
It is assumed that there will be no changes in the number of investment
units due to issuance of new investment units, etc. from the 333,001 units
of investment units issued and outstanding as of today through to the endof FP5.
Distribution per unit (excluding distribution in excess of earnings) iscalculated on the assumption that distribution will be made in accordancewith the cash distribution policy provided in the Articles of Incorporationof the Investment Corporation.
Distribution per unit (excluding distribution in excess of earnings) may
vary due to various factors, including fluctuations in leasing revenue
accompanying changes in assets under management, changes intenants and other events, and occurrence of unexpected repairs.
The Articles of Incorporation of the Investment Corporation enable it toprovide for distribution in excess of earnings but considering the ratio ofcapital expenditures to depreciation and in an aim to conduct
conservative financial management, no distribution in excess of earnings
is scheduled to be implemented for the time being.
Forecasts assume there will be no material changes in laws, regulations,taxation systems, accounting standards, public listing requirements orrules of the investment trust association that could impact the forecastspresented herein.
Forecasts assume there will be no unforeseen material changes in general
economic and real estate market conditions.