ESG-related information is posted on thewebsite to provide an opportunity for

ESG Website

unitholders and other stakeholders tolearn more about the various ESG
initiatives and approaches implemented
by DHR and the Asset Manager thus far.

For the34th Fiscal Period

Semi-Annual Report

From September 1, 2022 to February 28, 2023

Please visit our ESG website at the following URL or byusing the QR code.

https://www.daiwahouse-reit.co.jp/en/sustainability/

https://www.daiwahouse-reit.co.jp/en/

2 - 4 - 8 , N agat ac ho, Chiyoda-ku, Tokyo, Japanh t t p s : / / w w w. d a i w a h o u s e - re i t . c o . j p / e n /Securities Code: 8984

Overview of the 34th Fiscal Period Ended February 28, 2023

Financial Highlights for the Fiscal Period Ended February 28, 2023

We would like to report on the financial results and give an overview of operations of Daiwa House REIT Investment

Distributions

Corporation (hereinafter referred to as“DHR”) in the 34th fiscal period ended February 28, 2023.
Regarding financial results for the current fiscal period, we achieved a high level of occupancy in our portfolio and continued

Distributions per Unit (Note 1)

Forecast Distributions per Unit (Note 2)

success at maintaining stable rental revenues. As a result, DHR posted operating revenues of ¥29,489 million, operating
income of ¥12,740 million, and net income of ¥11,123 million. The total amount of distributions was ¥13,105 million (¥5,649
per unit). Our occupancy rate at the end of the current fiscal period was 99.7%.

5,649

An economic recovery is expected due to restrictions on socioeconomic activities caused by the spread of COVID-19 being
fledged interest rate hikes being implemented by central banks around the world, the risk of a global economic downturn, and￥(From March 1, 2023 to August 31, 2023)￥

relaxed. On the other hand, close attention needs to be paid to the impact on the domestic financial markets from the full-

5,600

35th period

34th Fiscal Period

5,600

36th period

￥

higher resource prices.

(From September 1, 2022 to February 28, 2023)*Distribution payments start date is May 15, 2023.

In the real estate trading market, while the trend of holding off on real estate investment spread due to rising interest(Note 1) Distributions per unit for the fiscal period ended February 28, 2023 include distributions in excess of earnings of ¥795 (which do not apply to return of capital).

rates, the appetite for property acquisition is firm overall among domestic and foreign real-estate investors with regard toprime logistics properties and residential properties, and expected yields on prime properties are trending at low levels.
Furthermore, we believe that acquisition and disposition of hotels, etc. will increase in activity in anticipation of therecovery of visitors to Japan in the future.

(From September 1, 2023 to February 29, 2024)(Note 2) Forecast distributions per unit are as of April 18, 2023, and actual distributions per unit may vary from the forecast. Furthermore, these forecasts do notguarantee the amount of distributions.
In addition, forecast distributions per unit include distributions in excess of earnings, and we forecast distributions in excess of earnings per unit of ¥802 (which do not
apply to return of capital) for the fiscal period ending August 31, 2023 and ¥850 (including return of capital of ¥41) for the fiscal period ending February 29, 2024.

Distributions per Unit

Under such circumstances, DHR acquired one hotel (acquisition price of approximately ¥3.1 billion) and disposed of one
residential property (disposition price of approximately ¥1.0 billion) in March 2023, which falls in the following fiscal period.
DHR will work to continuously improve unitholder value, with strategic implementation of the external growth and property
replacement that capitalizes on our strength as a diversified REIT.

（Yen）
7,000
6,000

In closing, we ask for the continued support of our unitholders and the investment community as we move forward.

5,046

5,000

5,427

5,773

6,040
5,427

5,856

6,118

5,822

5,617

5,649

Aug. 2022

Feb. 2023

4,000
3,000
2,000
1,000

0

Toshiharu Asada

Koichi Tsuchida

Executive Director

President and CEO

Daiwa House REIT
Investment Corporation

Daiwa House AssetManagement Co., Ltd.

CONTENTS
Overview of the 34th Fiscal Period Ended February 28, 2023････ 2

III. Statements of Income and Retained Earnings････････････ 48

Financial Highlights for the Fiscal Period Ended February 28, 2023････ 3

IV. Statements of Changes in Net Assets･･･････････････････ 49

Portfolio Highlights･････････････････････････････････････････ 4

V. Statements of Cash Flows･･･････････････････････････････ 51

Initiatives to Pursue Growth････････････････････････････････ 5

VI. Notes to Financial Statements･･････････････････････････ 52

ESG Initiatives･ ････････････････････････････････････････････ 5VII. Independent Auditor’s Report･ ････････････････････････ 74

I. Asset Management Report････････････････････････････････ 7

Investor Information･ ･･････････････････････････････････ 77

II. Balance Sheets･･････････････････････････････････････････ 46
2Aug. 2018

Feb. 2019

Aug. 2019Feb. 2020

Aug. 2020Feb. 2021

Aug. 2021

Feb. 2022

Operating Results
Fiscal period ended August 31, 2022

Fiscal period ended February 28, 2023

Operating revenues￥29,368 million￥29,489 million

Operating income￥12,661 million￥12,740 million

Net income￥11,049 million￥11,123 million

Asset size

(acquisition price basis)LTV(excluding goodwill)895.1billion

￥

44.9%

Period-end occupancy rate

Credit rating

99.7%

JCR : AA (Stable)
R&I : AA- (Stable)
3Portfolio Highlights

Initiatives to Pursue Growth(As of March 31, 2023)

Number of properties

Logistics

23 properties￥123.2 billion

Other assets

22.2 billion￥

By asset class
Hotel
2.5%

6 properties ￥41.6 billion

MIMARU Tokyo Akasaka

By area
Other assets
4.6%

Retail13.7%

Core assets

Other areas
23.1%
Greater
Osaka
area
7.8%

95.4％

GreaterTokyo area
65.8%

The three

Greater
Nagoya area
3.3%■…Asset size (acquisition price basis) (LHS)

99.5％

99.4％

99.4％

1,000

Less than 10 years

10 years ormore but lessthan 15 years
29.2%

5 years ormore but lessthan 10 years
21.3%

February 2018

Acquisition price¥3,116 million

Appraisal value (Note 1)¥3,330 million

NOI yield (Note 2)
NOI yield after
depreciation (Note 2)

Occupancy rate at the end of the fiscal period (RHS)

99.7％

99.7％

99.7％

（％）
100

・Reduction in GHG
Emissions・GRESB Rating
・CDP Score

Asset management
fees are calculated
according to thedegree of achievementof each index◦The first J-REIT
to purchase FIT non-fossil certificates98

700 ￥671.7 billion ￥683.4 billion

97

600

96

500
95

400

Feb. 2020

Aug. 2020Feb. 2021

Aug. 2021

Nakamura Ward,
Nagoya City, Aichi

Construction date

January 2007

Sale price¥1,001 million

Anticipated book value (Note 3)¥615 million

3.9%

NOI yield (Note 4)

3.7%

3.4%

NOI yield after
depreciation (Note 4)

2.3%

Feb. 2022

Aug. 2022

Castalia Meieki Minami(Note 1)“Appraisal value”of the acquired property is as of February 28, 2023.
(Note 2)“NOI yield”of the acquired property is calculated by dividing the Net Operating
Income (NOI) based on a direct capitalization method in the appraisal report byan acquisition price, and“NOI yield after depreciation”is calculated by dividing
the figure, calculated by deducting depreciation estimated by the Asset Manager
from the NOI as described above, by an acquisition price.
(Note 3)“Anticipated book value”of the sold property is as of the sale date.
(Note 4)“NOI yield”and“NOI yield after depreciation”of the sold property are calculatedby dividing the annualized actual NOI and NOI after depreciation for the period
ended February 28, 2023 by the sale price.

External certifications and evaluations
February2021

October
2021◦Remuneration for Executive Director of DHR is also linked￥744.8 billion ￥745.6 billion

Aug. 2019

Location◦ Obtained external certifications and evaluations as the first J-REIT, and engaged in leading-edge ESG initiatives◦The first J-REIT
to introduce Sustainability Index-linked Fees

99.3％

￥819.1 billion ￥820.1 billion ￥824.2 billion

Feb. 2019

March 30, 2023

Leading-edge ESG Initiatives

99

Aug. 2018 mall-scale residential property with anSacquisition price of less than ¥1.0 billion, withweakening rental demand in the surrounding area
Property age of approx. 16 years, withexpected increase in capex and repair costs
Sale date

Leading-edge initiatives￥895.1 billion ￥895.1 billion ￥895.1 billion

800

4Construction dateSale

ESG Initiatives

35.5％

900

0

Location

Akasaka, Minato
Ward, Tokyo

Less than
5 years
14.2%

15 yearsor more35.2%

major metropolitan

76.9％

99.4％

March 23, 2023

▪Apartment hotel suitable formedium- to long-term stays▪Equipped with mini-kitchen
and dining space withdishes and cooking utensils

Trends of Asset Size (Acquisition Price Basis) and Occupancy Rateat the End of the Fiscal Period

99.5％

Acquisition date

By property age

areas of Japan

Logistics
52.4%

Residential
26.8%（Yen in billions）
1,100
99.5％

 ejuvenating portfolio through theRacquisition of new property
Long-term and fixed-rent agreement with
Cosmos Initia (Daiwa House Group)

Acquisition

Retail129 properties￥240.3 billion

Hotel

6 properties

897.5 billion￥

Residential

66 properties ￥470.1 billion◦ Utilizing sponsor support, acquired a hotel in Akasaka, a prime location in Minato Ward
◦ Recording gain of ¥349 million on the sale of a small-scale residential property in Nagoya City

Asset size (acquisition price basis)

230 properties

Property Replacement (March 2023)

Improvement of portfolio quality

SummaryFeb. 2023

0

Achievement of net zerofor Scope 2◦The first J-REITto join“Race to ZERO”and“RE Action –Declaring 100% Renewable”◦Joined/signed on to total of 9 initiatives related
to climate change, human rights, diversity &inclusion, andbiodiversity◦The first J-REITto be named on“A List”(highest
recognition)(CDP Climate Change
Program)◦Recognition for
two consecutive
years

December
2021

March
2022

April
2022

October
2022◦The first J-REITto be certified by Science Based Targets
initiative (SBTi)◦The first J-REITto be named on Supplier Engagement
Leaderboard◦Recognition
for threeconsecutive
years◦The first J-REITto receive“ZEB”certification (highest
ZEB rating)◦Information disclosure based on TCFD
recommendations

DPL Nagareyama III◦For the first time,DHR wasawarded thehighest rating of“5 Stars”andselected as
Regional Listed
Sector Leader(Asia/Diversified)(Note) In chronological order of the date of announcements

5

AssetManagement
ManagementReport
ReportI.I. Asset

ESG Initiatives

1. Summary of Asset Management(1) Historical Operating Results

Initiatives Looking Ahead of ESG Trend (1)◦ Obtained an external evaluation regarding human capital, a new ESG theme, in addition to major domestic
and foreign external evaluations
CDP Climate Change Program◦ Evaluation of initiatives and information disclosure on climate change issues (Evaluation by CDP which runs the world’s environmental disclosure system)◦ Awarded the highest score of“A”and certified as a Climate Change“A List”company for two consecutive years (2022 CDP Climate Change Program)◦ Named as the only J-REIT to the“Supplier Engagement Leaderboard,”the highest rating, for three consecutive years(2022 CDP Supplier Engagement Rating)◦ Evaluation of information disclosure on environmental issues (Established by the Ministry of the Environment to promote ESG finance)◦ Became the first J-REIT awarded as an“Environmentally Sustainable Company”meeting certain standards in terms of disclosure quality

Certified Health & Productivity Management Outstanding Organization Recognition Program (Asset Manager)◦ Certification program of corporations that practice excellent health and productivity management (Promoted by the Ministry of
Economy, Trade and Industry and Nippon Kenko Kaigi)◦ Certified as one of the“Bright 500,”the top 500 corporations in the“2023 Health & Productivity Management Outstanding
Organizations (SME category)”

Initiatives Looking Ahead of ESG Trend (2)◦ Expanded the theme from climate change to natural resources and responded proactively
Joining the biodiversity initiatives as the first asset manager of J-REIT◦ JBIB is a group of Japanese corporations actively working to conserve
biodiversity, and aims to contribute to the conservation of biodiversity
in Japan and abroad by promoting joint research among various
corporations to produce
results that cannot be
achieved by a single
corporation

30 by 30 Alliance for Biodiversity◦ 30 by 30 is an initiative to halt the loss of biodiversity and put it on arecovery track (nature positive) by 2030. The goal is to effectively
conserve at least 30% of land and sea as healthy ecosystems by 2030
◦ 30 by 30 Alliance for
Biodiversity is a coalition ofvolunteers to promote efforts
to achieve this goal

Biodiversity certification obtained for properties owned by DHR

JHEP

ABINC

◦ JHEP is the only certification system in Japan to objectively andquantitatively evaluate and certify the degree of contribution tobiodiversity conservation◦ ABINC is a certification system to evaluate and certify biodiversityfriendly initiatives based on the“Promotion Guidelines for ABINC”
developed by JBIB

◦ Royal Parks Toyosu obtained an“A”rating for“conserving biodiversity
through abundant planting”
and“forming a network
connecting greenery in urban
areas”◦ Royal Parks Hanakoganei was highly evaluated for“maintaining adiverse environment with aset of trees, grassland andwaterfront areas, andrelatively large trees”and“making consideration to
rainwater cycle by placing arain garden”
Royal Parks Hanakoganei

Royal Parks Toyosu

31st period
August 2021

32nd period
February 2022

33rd period
August 2022

34th period
February 2023

Yen in millions

28,09729,57130,26429,36829,489

Yen in millions

27,26027,362

28,92829,36829,489

Yen in millions

15,525

16,455

16,854

16,707

16,748

Yen in millions

11,17912,081

12,431

12,183

12,283Operating income

Yen in millions

12,571

13,116

13,40912,661

12,740Ordinary income

Yen in millions

11,09911,619

11,685

11,05011,124

Net income

Yen in millions

11,098

11,619

11,685

11,04911,123

Total assets

Yen in millions

901,386

900,310964,669

963,566

960,621

Operating revenues (Note 1)
Of which, real estate rental revenues
Operating expenses
Of which, real estate rental expenses

Period-on-period changes

ESG Finance Awards Japan

Japan Business Initiative for Biodiversity (JBIB)

30th period
February 2021

Net assets
Period-on-period changes%
Yen in millions

(0.1)

7.1

(0.1)

(0.3)

489,467

524,178

521,820

520,049

(0.1)

(0.2)

7.1

(0.4)

(0.3)

Yen in millions

231,766

231,766

268,042

268,042

268,042

Total number of investment units issued

Units2,196,000

2,196,000

2,320,000

2,320,000

2,320,000

Net assets per unit

Yen

223,400

222,890

225,938

224,922

224,159

Total distributions

Unitholders’ capital%

0.2
490,586

Yen in millions

12,85913,435

13,507

13,031

13,105Distributions per unit
Of which, earnings distributions per unit

Yen
Yen

5,856
5,101

6,118
5,347

5,822
5,116

5,617
4,805

5,649
4,854

Of which, distributions in excess ofearnings per unit

Yen

755

771

706

812

795

Ordinary income to total assets ratio(Note 2)

%

1.2

1.3

1.3

1.1

1.2

%

2.5

2.6

2.5

2.3

2.3

%

2.3

2.4

2.3

2.1

2.1

%

4.6

4.7

4.6

4.2

4.3

%

54.4

54.4

54.3

54.2

54.1

(0.2)

(0.1)

(0.0)

(0.2)

(0.0)

%

100.9

101.1

101.5

100.9

101.3

Rental NOI (Note 4)

Yen in millions

21,352

20,552

22,122

22,83922,831

FFO per unit (Note 5)

Yen

7,982

7,594

7,746

8,061

8,081

FFO multiple (Note 6)

Times

17.4

21.6

19.9

20.1

17.3

Debt service coverage ratio (Note 7)

Times

16.6

16.8

16.6

15.6

15.5

378,558

378,558

407,550

407,550

407,550

42.0

42.0

42.2

42.3

42.4

Annualized
Return on equity (Note 3)
Annualized
Equity ratio
Period-on-period changes
Payout ratio<Other Reference Information>

Interest-bearing debt
Interest-bearing debt to total assets ratio(Note 8)(Notes) 1.
2.
3.
4.
5.
6.
7.
8.

Yen in millions%

Operating revenues, etc., do not include consumption taxes.
Ordinary income to total assets ratio = Ordinary income / ((Total assets at the beginning of period + Total assets at the end of period) / 2) × 100
Return on equity = Net income / ((Net assets at the beginning of period + Net assets at the end of period) / 2) × 100
Rental NOI = Real estate rental revenues – Real estate rental expenses + Depreciation and amortization during the period
FFO per unit = (Net income + Depreciation and amortization + Amortization of goodwill + Amortization of investment corporation bond issuance costs + Amortization of trademark
rights +/– Loss/gain on sale of real estate properties +/– Extraordinary loss/income) / Total number of investment units issued
FFO multiple = Investment unit price at the end of period / Annualized FFO per unit
Debt service coverage ratio = Net income before interest, depreciation and amortization / Interest expenses
Interest-bearing debt to total assets ratio = Interest-bearing debt at the end of period / Total assets at the end of period × 100

Initiatives Aimed at Social Contributions
Providing a place to hold a children’s cafeteria (Castalia Meguro Kamurozaka)◦ To make effective use of the space (about 65 m2) renovatedfrom a meeting room to a party room, we consulted with
Shinagawa Ward Council of Social Welfare and started providing
the place to hold a children’s cafeteria in December 2022
◦ The children’s cafeteria is a social welfare activity that provides
a warm social gathering place for the children and residents ofthe community, as well as inexpensive and nutritious meals◦ We support local activities by acting as a bridge between local
children and residents, and organizers of the children’s cafeteria

67

I. Asset Management Report
I. Asset Management Report

I. Asset Management Report(2) Asset Management during the Period(3) Summary of Capital Increasei)

Changes in DHR’s total number of investment units issued and unitholders’ capital for the most recent five years until February 28, 2023 are as
follows:

Transition of DHR

Daiwa House REIT Investment Corporation (hereinafter referred to as the “DHR”) is a real estate investment trust (J-REIT) whose sponsor is
Daiwa House Industry Co., Ltd. (hereinafter referred to as “Daiwa House”) and whose asset manager is Daiwa House Asset Management Co.,
Ltd. (hereinafter referred to as the “Asset Manager”), a wholly owned subsidiary of Daiwa House.
DHR was listed on the Real Estate Investment Trust (REIT) Market of Tokyo Stock Exchange, Inc. (hereinafter referred to as the “Tokyo Stock
Exchange”) on March 22, 2006, and then later merged with New City Residence Investment Corporation (hereinafter referred to as “NCR”) on
April 1, 2010 (hereinafter referred to as “the merger with NCR”). Subsequently on December 1, 2011, DHR changed its corporate name to Daiwa
House Residential Investment Corporation (the corporation prior to change of corporate name to “Daiwa House REIT Investment Corporation” ishereinafter referred to as the “former DHI”), and accordingly changed its investment targets to residential properties.
The former Daiwa House REIT Investment Corporation (the Daiwa House REIT Investment Corporation, which was dissolved upon having
merged with DHR as of September 1, 2016, is hereinafter referred to as the “former DHR”) was established on September 14, 2007, whose asset
manager was Daiwa House REIT Management Co., Ltd., a wholly owned subsidiary of Daiwa House. The former DHR was listed on the REIT
Market of Tokyo Stock Exchange on November 28, 2012, as a REIT that targets investment in logistics and retail properties.
As of September 1, 2016, the former DHI and the former DHR (hereinafter collectively referred to as the “Investment Corporations”) conducted
an absorption-type merger (hereinafter referred to as the “Merger”) whereby the former DHI was the surviving corporation and the former DHR
was the absorbed corporation. DHR shifted to a diversified portfolio strategy, targeting investment in new asset classes such as hotel and officeproperties, in addition to those that the Investment Corporations had targeted for investment in the past, and changed its corporate name from
Daiwa House Residential Investment Corporation to Daiwa House REIT Investment Corporation.

ii) Performance for the Current Fiscal Period
In terms of performance of assets held in the current fiscal period, the occupancy rate at the end of period was 99.7%, as we continued to maintainstable rental revenues. As a result, operating revenues totaled ¥29,489 million, exceeding our forecasts of operating results disclosed in our
financial results for the fiscal period ended August 31, 2022 (referred to below as “Forecasts of operating results” in “B. Performance for theCurrent Fiscal Period”) by ¥236 million.
In terms of rental expenses, we carried out some renovations, etc., which were planned for the next fiscal period onward, ahead of schedulefrom the perspective of reducing our future burden, but due to the improvement of occupancy rates, primarily at DHR’s residential properties,
operating income totaled ¥12,740 million, exceeding our forecasts of operating results by ¥106 million, and net income totaled ¥11,123 million,
exceeding our forecasts of operating results by ¥113 million.

iii) Overview of Financing
DHR 1) arranged refinancing of ¥1,000 million to provide for the repayment of ¥1,000 million in existing loans due on September 9, 2022; 2)
arranged refinancing of ¥4,000 million to provide for the repayment of ¥4,000 million in existing loans due on September 28, 2022; 3) arranged
refinancing of ¥3,000 million to provide for the repayment of ¥3,000 million in existing loans due on October 3, 2022; 4) issued its 19th Unsecured
Investment Corporation Bonds of ¥2,000 million on December 19, 2022 and arranged refinancing of ¥8,500 million on December 28, 2022 toprovide for the repayment of ¥10,500 million in existing loans due on December 28, 2022.
As a result, the balance of interest-bearing debt outstanding as of the end of the current fiscal period amounted to ¥407,550 million (loanbalance: ¥363,550 million, investment corporation bond balance: ¥44,000 million), the same amount as in the previous fiscal period. As of the endof the current fiscal period, its LTV (including goodwill)(Note 1) was 42.4%, and its LTV (excluding goodwill)(Note 2) was 44.9%.
(Notes) 1.
2.

“LTV (including goodwill)” is obtained using the following formula. The same shall apply hereinafter.
LTV (including goodwill) = total amount of interest-bearing debt (loans + investment corporation bonds) ÷ total assets (including goodwill) × 100“LTV (excluding goodwill)” is obtained using the following formula. The same shall apply hereinafter.
LTV (excluding goodwill) = total amount of interest-bearing debt (loans + investment corporation bonds) ÷ total assets (excluding goodwill) × 100

Date

Event

Total number ofinvestment units issued(Units)Unitholders’ capital(Yen in millions)RemarkChangeBalance

ChangeBalance

March 19, 2018

Capital increase through public offering

222,000

1,912,000

51,607

159,743(Note 1)

April 13, 2018

Capital increase through third-party allotment

15,0001,927,000

3,486

163,230(Note 2)

March 1, 2019

Capital increase through public offering

138,000

2,065,000

32,879196,110(Note 3)

March 26, 2019

Capital increase through third-party allotment

10,0002,075,000

2,382

198,492(Note 4)

March 2, 2020

Capital increase through public offering

121,000

2,196,000

33,273

231,766(Note 5)September 1, 2021

Capital increase through public offering

115,000

2,311,000

33,643

265,409(Note 6)

September 28, 2021

Capital increase through third-party allotment

9,000

2,320,000

2,632

268,042(Note 7)(Notes) 1.
2.
3.
4.
5.
6.
7.
8.

Investment units were issued by public offering with an issue price of ¥239,806 per unit (paid-in amount: ¥232,465) in order to raise funds for the acquisition of new properties, etc.
Additional investment units were issued with a paid-in amount of ¥232,465 per unit in order to raise funds for the acquisition of new properties, etc.
Investment units were issued by public offering with an issue price of ¥245,784 per unit (paid-in amount: ¥238,260) in order to raise funds for the acquisition of new properties, etc.
Additional investment units were issued with a paid-in amount of ¥238,260 per unit in order to raise funds for the acquisition of new properties, etc.
Investment units were issued by public offering with an issue price of ¥283,670 per unit (paid-in amount: ¥274,986) in order to raise funds for the acquisition of new properties, etc.
Investment units were issued by public offering with an issue price of ¥301,791 per unit (paid-in amount: ¥292,552) in order to raise funds for the acquisition of new properties, etc.
Additional investment units were issued with a paid-in amount of ¥292,552 per unit in order to raise funds for the acquisition of new properties, etc.
There are no investment units that do not have voting rights in accordance with the provisions of Article 308, paragraph 2 of the Companies Act, as applied mutatis mutandis pursuant
to Article 94 of the Investment Trust Act (treasury investment units), or investment units that do not have voting rights in accordance with the provisions of Article 160 of the Regulation
for Enforcement of the Act on Investment Trusts and Investment Corporations (Order of the Prime Minister’s Office No. 129 of 2000, as amended; hereinafter referred to as the“Regulation for Enforcement of Investment Trust Act”) (cross-held investment units).

[Changes in market price of investment securities]
The highest and lowest prices and the closing prices at the beginning and the end of the period in the REIT Market of Tokyo Stock Exchange, on
which DHR’s investment securities are listed, by period are as follows:
30th period

31st period

32nd period

33rd period

34th period

February 2021

August 2021

February 2022

August 2022

February 2023

Highest¥298,300¥340,000¥353,000¥335,500¥323,500

Lowest¥240,600¥272,100¥309,000¥290,000¥272,400

Beginning of period¥271,900¥279,300¥329,000¥315,000¥318,500

End of period¥279,600¥325,500¥311,500¥322,000¥281,100

Fiscal period ended

The credit ratings of DHR as of the date of this report are as follows:
Rating agency

Type

Rating/Outlook

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

Issuer rating

AA- Stable

Japan Credit Rating Agency, Ltd. (JCR)

Long-term issuer rating

AA Stableiv) Difference Between Real Estate Appraisal Value and Book Value
The total appraisal value of assets held at the end of the current fiscal period was ¥1,065,580 million, and the amount of unrealized gain(Note) on
the portfolio, which is the difference compared to the book value, was ¥219,035 million.
(Note)“Unrealized gain” is the positive valuation difference when the appraisal value exceeds the book value of real estate properties (excluding construction in progress and construction inprogress in trust) as of the last day of each fiscal period. (Negative valuation difference is referred to as unrealized loss.) The same shall apply hereinafter. Please note that unrealized
gain is not guaranteed to be realized as a result of the sale of real estate.

v) Overview of Financial Results
As a result of the investment management activities mentioned above, in the current fiscal period, DHR posted operating revenues of ¥29,489
million, operating income of ¥12,740 million, ordinary income of ¥11,124 million, and net income of ¥11,123 million. Based on its distribution policy,¥1,982 million in amortization of goodwill was added to net income, resulting in ¥13,106 million. From this amount, the total distributions was¥13,105 million (¥5,649 per investment unit) after the fractional parts of amounts less than ¥1 per investment unit for each type of distribution
listed in the breakdown of distributions below were adjusted.
Furthermore, the breakdown of distributions includes income of ¥11,261 million (¥4,854 per investment unit) as provided for in Article 136,
paragraph 1 of the Act on Investment Trusts and Investment Corporations (Act No. 198 of 1951, as amended. Hereinafter referred to as the“Investment Trust Act”) as earnings distributions and an allowance for temporary difference adjustments of ¥1,844 million (¥795 per investmentunit) as distributions in excess of earnings.

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I. Asset Management Report(4) Distributions(5) Future Operating Policies and Issues to Be Addressed

For the current fiscal period, of the total amount of ¥13,106,072,718 when combining net income of ¥11,123,846,132 and amortization of goodwillof ¥1,982,226,586, DHR decided to pay a total of ¥13,105,680,000 in distributions, for distributions per unit of ¥5,649, after adjusting the fractionalparts of amounts less than ¥1 per investment unit for each type of distribution listed in the breakdown of distributions below. The breakdown ofdistributions was ¥11,261,280,000 as earnings distributions (¥4,854 per unit) and ¥1,844,400,000 in allowance for temporary difference
adjustments as distributions in excess of earnings (¥795 per unit).
30th period
From
September 1, 2020
to February 28, 2021

31st period
From
March 1, 2021
to August 31, 2021

32nd period
From
September 1, 2021
to February 28, 2022

33rd period
From
March 1, 2022
to August 31, 2022

34th period
From
September 1, 2022
to February 28, 2023

Unappropriated retained
earnings(Yen in thousands)

11,877,987

12,295,795

12,238,902

11,419,562

11,395,808

Retained earnings carriedforward (Note)(Yen in thousands)

676,191

553,783

369,782

271,962

134,528

Total distributions(Yen in thousands)

12,859,776

13,435,128

13,507,040

13,031,440

13,105,680

5,856

6,118

5,822

5,617

5,649

Of the above, total earnings
distributions(Yen in thousands)

11,201,796

11,742,012

11,869,120

11,147,600

11,261,280

Earnings distributions per
unit
(Yen)

5,101

5,347

5,116

4,805

4,854

Of the above, total capitalrefunds(Yen in thousands)

1,657,980

1,693,116

1,637,920

1,883,840

1,844,400

Capital refunds per unit
(Yen)

755

771

706

812

795

Of total capital refunds, total
distributions deemed as
distributions from theallowance for temporary
difference adjustments(Yen in thousands)

1,657,980

1,693,116

1,637,920

1,839,760

1,844,400

Of capital refunds perunit, distributions deemed
as distributions from theallowance for temporary
difference adjustments
per unit
(Yen)

755

771

706

793

795

Of total capital refunds, total
distributions deemed as
distributions from capitalrefunds for tax purposes

–

–

–

44,080–Of capital refunds perunit, distributions deemed
as distributions from
capital refunds for tax
purposes per unit

–

–

–

19

–

Distributions per unit

(Note)(Yen)

Retained earnings carried forward indicates the retained earnings carried forward to the following period.

i)Investment Environment

During the current fiscal period, amid expectations for the Japanese economic recovery due to restrictions on socioeconomic activities caused by
the spread of COVID-19 being relaxed, the real GDP growth rate (the 2nd preliminary) was 0.0% from October to December 2022 compared withthe previous quarter (0.1% annualized). Meanwhile, we must be aware of the future impact on economic activities of factors including the impactof the world’s central banks going into full swing with regard to raising interest rates, the risk of downward pressure on the economy because of adownturn in overseas economies, and surging resource prices.
In the J-REIT market, the Tokyo Stock Exchange REIT Index was 1,843 points at the end of February 2023. While the overall Japanese financial
market has settled, given globally rising interest rates due to successive cases of monetary tightening, primarily in the U.S., we must be aware of
the impact of fluctuations in the financial and capital markets.
In the real estate trading market, while the trend of holding off on real estate investment spread due to rising interest rates, and investment
amounts decreased globally from October to December 2022, the appetite for property acquisition remains firm overall among domestic andforeign real-estate investors with regard to prime logistics properties and residential properties, and expected yields on prime properties aretrending at low levels. Furthermore, we believe that acquisition and disposition of hotels, etc. will increase in activity in anticipation of the recoveryof visitors to Japan in the future.

ii) Future Operating Policies and Issues to Be Addressed(a) Growth Strategy
Due to its shift to a diversified portfolio strategy as a result of the Merger, taking advantage of the expanded opportunities to acquire properties
from an extensive range of asset classes, DHR aims to steadily grow its asset size while maximizing unitholder value by securing stable income
over the long term.
With a diversified portfolio strategy, DHR’s portfolio includes a range of assets with varying risk-return profiles, and as of the date of this report,
maintains high occupancy rates for assets held. By investing in various types of assets, DHR deems that it will be able to diversify its portfolio andmitigate the risk of excessive reliance on a limited number of tenants in order to boost portfolio income and generate cash flows that are moreconsistent.
DHR carefully selects and acquires assets that contribute to increasing unitholder value mainly through the Daiwa House Group’s pipeline andplans to maintain its policy of selective investment going forward.
Furthermore, through continuous property replacement, DHR aims to increase the quality of its portfolio and realize increased unitholder value.
(b) ESG Initiatives
The Daiwa House Group’s basic approach is “Creating Dreams, Building Hearts.” As a group that co-creates value for individuals, communities
and people’s lifestyles, the group aims to build trust relationships with stakeholders and contribute to society through its businesses, and to realize
a sustainable society by meeting the challenge of achieving “zero environmental impacts.”
The Asset Manager shares the Daiwa House Group’s basic approach as DHR’s asset manager, and considers that including the environmental,social, and governance considerations in its real estate investment management operations contributes to DHR’s basic policy of ensuring stablerevenue and steady asset growth over the medium- to long-term. Therefore, we have established the “Sustainability Policy” to guide our realestate investment management.
The Asset Manager considers efforts such as energy conservation and reducing greenhouse gas emissions in relation to asset management
to be of paramount importance. It establishes individual policies for the matter and strives to reduce the burden it puts on the environment.
DHR set targets for reducing greenhouse gas (GHG) emissions by FY2030 and FY2050 and, in February and August 2022, became the first
J-REIT to acquire certification for its emission targets from the Science Based Targets initiative (SBTi), which certified that the targets are sciencebased targets consistent with the standards required by the Paris Agreement.
(c) Distribution Policy
DHR changed part of its distribution policy in the fiscal period ended February 28, 2017 and made it a policy to distribute the amount equivalent
to amortization of goodwill to top up net income, and distributions in excess of earnings in the amount equivalent to amortization of goodwill arepaid (distribution accounted as an allowance for temporary difference adjustments and other distributions in excess of earnings).
Furthermore, in the case of the occurrence of excess taxable income over accounting income associated with sale of properties that causes aneed for DHR to take action to maintain its favorable tax status, DHR plans to conduct additional distributions in excess of earnings (distribution
accounted as an allowance for temporary difference adjustments) to reduce the incurrence of corporate taxes.
However, where there is an occurrence of special gains such as gain on sale of real estate properties, other distributions in excess of earnings,
which is a part of the above-mentioned distributions in excess of earnings in the amount equivalent to amortization of goodwill, can be reduced
by an amount equivalent to part of the gain on sale of real estate properties.
DHR’s policy is to pay distributions in excess of earnings (distribution accounted as an allowance for temporary difference adjustments andother distributions in excess of earnings) to realize stabilization of distributions on a medium- to long-term basis (Note) while ensuring the level of
distributions not impacted by the amortization of goodwill that accompanied the Merger.
(Note)

Under the above distribution policy, DHR has the policy to stabilize distributions. However, it is not intended as a guarantee or promise of the payment of distribution and amounts thereof.

iii) Financial Strategy
DHR seeks as its basic policy to execute a well-planned and flexible financial strategy with the aim of ensuring sustainable income on a mediumto long-term basis, contributing to the steady growth and efficient management of its properties and creating management stability.
DHR is also working to improve the stability of its financial base by maintaining and expanding its strong lender formation, by diversifying
methods of raising capital through issuance of investment corporation bonds, and by promoting use of long-term fixed rates on interest-bearing
debt and staggering repayment dates.

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I. Asset Management Report

2. Overview of the Investment Corporation(6) Significant Events after Balance Sheet Date
A.

Acquisition of Assets(1) Status of Investment Units

DHR acquired the following property:

31st period
As of August 31,
2021

32nd period
As of February
28, 2022

33rd period
As of August 31,
2022

34th period
As of February
28, 2023

Total number of authorized investment units

8,000,000

8,000,000

8,000,000

8,000,000

8,000,000¥3,116,000 thousand

Total number of investment units issued

2,196,000

2,196,000

2,320,000

2,320,000

2,320,000

Fuyo General Lease Co., Ltd.

Unitholders’ capital(Yen in thousands)

231,766,153

231,766,153

268,042,601

268,042,601

268,042,601

19,05917,83918,264

17,915

17,591MIMARU Tokyo Akasaka

Asset type

Trust beneficiary interests in real estate

Asset class

Hotel properties

Acquisition price (Note 1)
Seller (Note 2)
Date of acquisition

March 23, 2023

(Notes) 1.
2.

B.

30th period
As of February
28, 2021

Asset name

This figure does not include expenses pertaining to acquisitions, settlement money such as taxes and public dues, consumption taxes, etc.
The seller falls neither under the category of a party having a special interest relationship with DHR or the Asset Manager, nor under the category of a related party of DHR or the
Asset Manager.

Disposition of Assets

Number of unitholders(2) Matters concerning Investment Units
The major unitholders as of February 28, 2023 are as follows:

DHR disposed of the following property:

Percentage of investment
units held against the total
number of investment units
issued (%) (Note)

Castalia Meieki Minami

Asset type

Trust beneficiary interests in real estate

Asset class

Residential properties

Custody Bank of Japan, Ltd. (Trust account)

520,267

22.4

Disposition price (Note 1)¥1,001,000 thousand

The Master Trust Bank of Japan, Ltd. (Trust account)

367,129

15.8

Buyer (Note 2)

A.D. Works Co., Ltd.

Daiwa House Industry Co., Ltd.

191,200

8.2

Date of disposition

March 30, 2023

Name

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

98,8144.3(Notes) 1. This figure does not include expenses pertaining to dispositions, settlement money such as taxes and public dues, consumption taxes, etc.
2. The buyer falls neither under the category of a party having a special interest relationship with DHR or the Asset Manager, nor under the category of a related party of DHR or the
Asset Manager.

SMBC Nikko Securities Inc.

54,546

2.4

State Street Bank West Client - Treaty 505234

45,081

1.9

C.

SSBTC CLIENT OMNIBUS ACCOUNT

40,797

1.8

JAPAN SECURITIES FINANCE CO., LTD.

29,551

1.3

State Street Bank and Trust Company 505103

27,3081.2

Mizuho Securities Co., Ltd.

26,3731.1

1,401,066

60.4

Debt Financing

DHR conducted debt financing for the funds for the repayments of ¥2,000 million in long-term loans due on March 27, 2023 and a total of ¥11,400
million in long-term loans due on March 31, 2023, as follows:
LenderSumitomo Mitsui Trust Bank, Limited
Sumitomo Mitsui Banking Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui Trust Bank, Limited
Mizuho Bank, Ltd.
Aozora Bank, Ltd.
Resona Bank, Limited
SBI Shinsei Bank, Limited
Mitsui Sumitomo Insurance Company,
Limited

Borrowingamount(Yen inmillions)
2,000

10,4001,000

Interest rate

0.79789%(Fixed interest rate)

0.98563%(Fixed interest rate)

0.62313%(Fixed interest rate)

Borrowing
date

March 27,2023

March 31,2023

March 31,2023

Repayment
date

March 29,2030

September
30, 2031

September
29, 2028

Method ofrepayment

Bulletrepayment

Bulletrepayment

Bulletrepayment

Collateral
Unsecuredand nonguaranteed

Total(Note)The percentages are rounded to the first decimal place.

(3) Officers
The following table provides information about the officers.
Total remuneration per title
during the 34th period(Yen in thousands)

Unsecured

Title and post

Nameand nonguaranteed

Executive Director

Toshiharu Asada

–

2,460

Hiroshi Ishikawa

Attorney, Ohhara Law OfficeOutside Director, Japan Medical Dynamic Marketing,
INC.

2,100

Junko Kogayu

Professor, Tohoku University Accounting School
Certified Public Accountant, Junko Kogayu Certified
Public Accountant Firm
Certified Public Tax Accountant, Ayako Takeuchi Certified
Public Tax Accountant Firm
Outside Director and Audit & Supervisory Committee
Member, NITCHO Corporation
Outside Director and Audit & Supervisory Committee
Member, Nisshin Corporation
Outside Director and Audit & Supervisory Committee
Member, CERES INC.
Outside Audit & Supervisory Board Member, Private
Finance Initiative Promotion Corporation of Japan
Outside Audit & Supervisory Board Member, The Shoko
Chukin Bank, Ltd.

2,100

Ernst & Young ShinNihon
LLC–

19,500Unsecuredand nonguaranteed

Supervisory
Directors

Accounting Auditor(Notes) 1.
2.
3.

12

Number of investment units
held (Units)

Asset name

Major concurrent position

The Executive Director and Supervisory Directors do not hold investment units of DHR under their own or another person’s name. Any Supervisory Director may serve as an
executive of a corporation other than those listed above, but such corporations including those listed above do not have any interest in DHR.
Dismissal or non-reappointment of the Accounting Auditor shall be discussed at DHR’s board of directors pursuant to the provisions of the Investment Trust Act for dismissal, taking
into full account all relevant factors for non-reappointment such as the quality of audits and remuneration for audits.
¥2,000 thousand of the remuneration for the Accounting Auditor is related to the preparation of a comfort letter.

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I. Asset Management Report

3. Portfolio of DHR(4) Liability Insurance Policy for Officers
The liability insurance policy for officers entered into by DHR is as follows:
Scope of insureds

Summary of the policy

Executive Directors and Supervisory
Directors(Outline of insured accidents to be covered)
The policy covers compensation for damages, legal costs, etc. incurred by insureds as a result of aclaim for damages arising from an act performed by insureds based on their position.
(Percentage of insurance premiums to be paid)
The entire amount is borne by DHR.
(Measures to ensure that the appropriateness of the execution of duties is not impaired)
Damages incurred by the insured due to criminal acts or acts committed with the knowledge that they
violate laws and regulations are not covered.

The following table provides information about the composition of assets.

Type of assets

Area(Note 1)

Asset class

Residential
properties(5) Asset Manager, Custodian and General Administrators
Business(1) Composition of Assets

Asset Manager

Daiwa House Asset Management Co., Ltd.

Custodian

Sumitomo Mitsui Trust Bank, Limited

General Administrator

Sumitomo Mitsui Trust Bank, Limited

Transfer agent / Special account administrator

Sumitomo Mitsui Trust Bank, Limited

Administrator of investment corporation bonds

Sumitomo Mitsui Trust Bank, Limited, MUFG Bank, Ltd.,
Sumitomo Mitsui Banking Corporation, Resona Bank, Limited

2.4

Greater
Nagoya area

886

0.1

881

0.1

Greater
Osaka area

13,077

1.4

13,077

1.4

Other

3,296

0.3

3,273

0.3

Other

1,471

0.2

1,471

0.2

Three major
metropolitan
areas of Japan

42,144

4.4

42,032

4.4

Greater Tokyo
area

330,108

34.3

328,618

34.2

Greater
Nagoya area

15,283

1.6

15,187

1.6

Greater
Osaka area

22,097

2.3

21,944

2.3

Three major
metropolitan
areas of Japan

85,626

8.9

84,9698.8

Greater Tokyo
area

163,69617.0

162,767

16.9

Greater
Nagoya area

5,684

0.6

5,655

0.6

Greater
Osaka area

5,910

0.6

5,883

0.6

Other
Trust beneficiaryinterests in realestateRetailproperties

Three major
metropolitan
areas of Japan

1,094

0.1

1,079

0.1

Greater Tokyo
area

31,8383.3

31,748

3.3

Greater
Nagoya area

2,390

0.2

2,390

0.2

Greater
Osaka area

22,817

2.4

22,693

2.4

Other

Hotel
properties

Three major
metropolitan
areas of Japan

62,275

6.5

62,105

6.5

Greater Tokyo
area

4,646

0.5

4,630

0.5

Greater
Nagoya area

5,381

0.6

5,344

0.6

Greater
Osaka area

1,415

0.1

1,406

0.1

8,104

0.8

8,047

0.8

3,165

0.3

3,147

0.3

Other
Other assets

Three major
metropolitan
areas of Japan

Greater Tokyo
area

Other
Subtotal(Notes) 1.
2.

3.

14

Percentage tototal assets(%) (Note 3)

23,329Other

Residential
properties

Total amount held
(Yen in millions)(Note 2)

2.4

Subtotal

Logistics
properties

Total amount held Percentage to(Yen in millions)
total assets(Note 2)(%) (Note 3)
23,412

Real estate
Retailproperties

34th period
February 28, 2023

Greater Tokyo
area

Three major
metropolitan
areas of Japan

Name

33rd period
August 31, 2022

37,134

3.9

36,896

3.8

808,67183.9

804,515

83.7

Deposits and other assets

112,750

11.7

114,072

11.9

Total assets

963,566

100.0

960,621100.0

Three major metropolitan areas of Japan in “Area” are the greater Tokyo area (Tokyo, Kanagawa, Saitama and Chiba), the greater Nagoya area (Aichi, Gifu and Mie) and the greater
Osaka area (Osaka, Kyoto, Hyogo, Nara and Shiga). The same shall apply hereinafter.
“Total amount held” represents the amounts recorded on the balance sheets as of the last day of each fiscal period (August 31, 2022 and February 28, 2023), which are rounded
down to the nearest million yen. For real estate properties and trust beneficiary interests in real estate (may be referred to as “real estate in trust” or “trust beneficiary interests inreal estate”), the amounts are their acquisition prices (including expenses associated with the acquisition) less accumulated depreciation. “Acquisition price” is the purchase pricestipulated in the respective purchase agreements of assets owned by DHR (not including expenses pertaining to acquisitions, settlement money such as taxes and public dues,
consumption taxes, or leasehold guarantee deposits, etc.), except as otherwise noted. However, the acquisition prices of properties previously owned by NCR have been presented
as the appraisal values as of February 28, 2010, which were the prices received at the time of the merger with NCR, and the acquisition prices of properties previously owned by
the former DHR have been presented as the appraisal values as of August 31, 2016, which were the prices received at the time of the merger with the former DHR. The same shallapply hereinafter.
“Percentage to total assets” is rounded to the first decimal place.

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I. Asset Management Report

I. Asset Management Report(2) Principal Assets Held
The overview of principal assets held by DHR as of February 28, 2023 (top ten properties in terms of book value at the end of period) is as follows:Book value
Leasable area
(Yen in millions)(m2)(Note 1)
(Note 2)

Property nameLeased area(m2)
(Note 3)

Occupancy
rate (%)(Note 4)Rate to total realestate rental
revenues (%)(Note 5)

Primary use

Property name

D Project Fukuoka Hakozaki

iias Tsukuba

33,680138,900.39

138,900.39

100.0

3.7

RetailD Project Kuki III

DPL Nagareyama I

31,929124,489.93

124,489.93

100.0(Note 6)

Logistics

D Project Kuki IV

DPL Nagareyama III

31,709106,859.16

106,859.16

100.0(Note 6)

Logistics

GRANODE Hiroshima

28,13029,915.08

29,772.47

99.5

3.4

D Project Urayasu II

25,17072,320.01

72,320.01

100.0(Note 6)

Logistics

D Project Kuki VI
D Project Yashio

DPL Misato

16,18255,864.47

55,864.47

100.0(Note 6)

Logistics

D Project Nishiyodogawa

D Project Hiratsuka

15,04965,272.52

65,272.52

100.0(Note 6)

Logistics

D Project Matsudo

D Project Hachioji

14,641

62,394.17

62,394.17

100.0(Note 6)

Logistics

DPL Fukuoka Kasuya

12,66073,754.20

73,754.20

100.0(Note 6)

Logistics

D Project Itabashi Shingashi

12,261

33,763.46

33,763.46

100.0(Note 6)

Logistics

221,414763,533.39

763,390.78

100.0

23.0

(Notes) 1.
2.

3.

4.
5.
6.

“Book value” is the amount recorded on the balance sheets as of February 28, 2023 (in the case of real estate and real estate in trust, “Book value” is the acquisition price (including
expenses associated with the acquisition) less accumulated depreciation), which is rounded down to the nearest million yen.
“Leasable area” means the leasable area of the building (or land in the case of land properties) in relation to each real estate or each real estate in trust and the figures stated referto the area DHR believes is leasable as indicated in the relevant lease agreement or drawing of the building, etc. in relation to each real estate or each real estate in trust as ofFebruary 28, 2023. In the cases of each co-owned real estate or quasi co-owned trust beneficiary interests, the leasable area of the entire real estate multiplied by the ratio of coownership of the real estate or quasi co-ownership of the trust beneficiary interests in real estate held by DHR is provided.
“Leased area” represents the leased area in the leasable area as indicated in the lease agreement in relation to each real estate or each real estate in trust as of February 28, 2023.
However, in the case of a pass-through type master lease agreement entered into with the master lease company, the leased area to end-tenants indicated in each subleaseagreement entered into between the master lease company and end-tenants for each real estate or each real estate in trust as of February 28, 2023 is provided. As some leaseagreements for each real estate or each real estate in trust may indicate leased area that includes portions not included in the gross floor area, the leased area may exceed thegross floor area. In particular, at logistics properties, when eaves are included in the leased area, the leased area may significantly exceed the gross floor area. In the cases of eachco-owned real estate or quasi co-owned trust beneficiary interests, the leased area of the entire real estate multiplied by the ratio of co-ownership of the real estate or quasi coownership of the trust beneficiary interests in real estate held by DHR is provided.
“Occupancy rate” represents occupancy rate (the percentage of leased area to the leasable area) of each property as of February 28, 2023, which is rounded to the first decimal
place.
“Rate to total real estate rental revenues” is the rental revenues from each real estate or each real estate in trust expressed as a percentage of the total rental revenues from theentire portfolio, rounded to the first decimal place.
Undisclosed as consent for disclosure has not been obtained from the lessee.

The overview of portfolio assets held by DHR as of February 28, 2023 (real estate and real estate in trust, etc.) is as follows:

Property name

D Project Machida
D Project Hachioji

Logistics properties

D Project Aikawa-Machi
D Project Urayasu I
D Project Urayasu II
D Project Akanehama
D Project Noda
D Project Inuyama
D Project Neyagawa
D Project Morioka
D Project Tsuchiura
D Project Fukuoka Umi
D Project Tosu
D Project Kuki I
D Project Kuki II
D Project Kawagoe I
D Project Kawagoe II
DPL Inuyama

Location (Note 1)

2-1-6, Oyamagaoka, Machida City, Tokyo
3-21-1, Minami-Osawa, Hachioji City, Tokyo
4020-12, Aza Sakuradai, Nakatsu, Aikawa-machi,
Aiko District, Kanagawa
12-1, Chidori, Urayasu City, Chiba
11-5, Chidori, Urayasu City, Chiba
3-2-8, Akanehama, Narashino City, Chiba
1-1, Aza Tamei, Futatsuka, Noda City, Chiba
5-5, Aza Takanebora, Inuyama City, Aichi
2-24-12, Shimeno, Neyagawa City, Osaka
3-18, Ogama-kazabayashi, Takizawa City, Iwate
20-29, Aza Harayama, Hongo, Tsuchiura City,
Ibaraki
384-15, Aza Noguchi, Oaza Ino, Umi-machi, Kasuya
District, Fukuoka
1624, Aza Hasuhara, Himekata-machi, Tosu City,
Saga
6004-2, Aza Taikoda, Shobu-cho Shobu, Kuki City,
Saitama
6201-1, Aza Kazarimen, Shobu-cho Sanga, Kuki
City, Saitama
3-2-3, Yoshinodai, Kawagoe City, Saitama
3-2-4, Yoshinodai, Kawagoe City, Saitama
1-8, Aza Nakahiratsuka, Oaza Haguroshinden,
Inuyama City, Aichi

Form of ownership

Leasablearea (m2)(Note 2)

D Project Hibiki Nada
D Project Morioka II
D Project Kawagoe III
D Project Kazo
D Project Urayasu III
D Project Tomisato
D Project Kyotanabe
D Project Sendai Izumi
D Project Oyama
D Project Sano–

(3) Description of Portfolio

Asset
class

D Project Kuki V

Other assets

Assessedvalue at theBook value
end of period(Yen in(Yen inmillions)
millions)(Note 4)(Note 3)
11,1009,098
18,70014,641

D Project Tatebayashi
D Project Kakegawa
D Project Hiroshima Seifu
Logistics properties

Total

16

Asset
class

D Project Tosu II
D Project Kawagoe IV
D Project Kuki VII
D Project Chibakita
D Project Matsudo II
D Project Tomisato II
D Project Osaka Hirabayashi
D Project Sendai Izumi II

Real estate in trust
Real estate in trust

50,490.39
62,394.17

Real estate in trust

14,240.84

4,730

3,611

Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust

36,515.81
72,320.01
11,663.39
29,232.53
54,197.80
11,151.51
9,558.32

10,60029,6003,280
7,210
12,800
7,080
1,200

9,113
25,1702,919
6,013
10,091
5,664
1,168

Real estate in trust

17,448.86

3,840

3,082

Real estate in trust

24,729.56

5,420

3,984

Real estate in trust

17,858.01

6,740

5,164

DPL Misato

D Project Kaminokawa
D Project Fuji
D Project Tosu III
D Project Kitahachioji I
D Project Kitahachioji II
D Project Kitahachioji III
D Project Itabashi Shingashi
D Project Sagamihara
D Project Kuki VIII
D Project Yokkaichi
D Project Ibaraki Ishioka
D Project Wako A
D Project Hiratsuka

Real estate in trust

22,708.72

4,890

3,641

DPL Fukuoka Kasuya

Real estate in trust

50,490.00

9,900

7,426

DPL Kitakyushu

Real estate in trust
Real estate in trust

16,150.88
19,872.00

4,320
6,010

3,319
4,569

DPL Nagareyama I

Real estate in trust

21,628.50

4,620

3,655

DPL Shin-Narashino
DPL Nagareyama III

Location (Note 1)

5-2-1, Hakozakifuto, Higashi Ward, Fukuoka City,
Fukuoka
6004-1, Aza Taikoda, Shobu-cho Shobu, Kuki City,
Saitama
6201-5, Aza Kazarimen, Shobu-cho Sanga, Kuki
City, Saitama
6201-6, Aza Kazarimen, Shobu-cho Sanga, Kuki
City, Saitama
48-3, Kiyoku-cho, Kuki City, Saitama
50-1, Oaza Shin-machi, Yashio City, Saitama
2-7-48, Nakashima, Nishiyodogawa Ward, Osaka
City, Osaka
700-3, Aza Nishinooda, Kamihongo, Matsudo City,
Chiba
3-1-5, Hibiki-machi, Wakamatsu Ward, Kitakyushu
City, Fukuoka
3-15, Ogama-kazabayashi, Takizawa City, Iwate
2-8-55, Yoshinodai, Kawagoe City, Saitama
2-16-1, Okuwa, Kazo City, Saitama
12-1, Chidori, Urayasu City, Chiba
7-2, Misawa, Tomisato City, Chiba
3-50-1, Kannabidai, Kyotanabe City, Kyoto
2-9-1, Akedori, Izumi Ward, Sendai City, Miyagi
2333-34, Aza Atago, Oaza Hari, Oyama City, Tochigi
570-9, Nishiura-cho, Sano City, Tochigi
110-8, Aza Uchiya, Shimosagawada-cho,Tatebayashi City, Gunma
653-14, Aza Oyabu, Sakagawa, Kakegawa City,
Shizuoka
2-2-1, Tomonishi, Asaminami Ward, Hiroshima City,
Hiroshima
1621, Aza Hasuhara, Himekata-machi, Tosu City,
Saga
3-2-1, Yoshinodai, Kawagoe City, Saitama
6004-3, Aza Taikoda, Shobu-cho Shobu, Kuki City,
Saitama
461-1, Naganumacho, Inage Ward, Chiba City,
Chiba
700-1, Aza Nishinooda, Kamihongo, Matsudo City,
Chiba
1-6, Misawa, Tomisato City, Chiba
2-6-15, Hirabayashikita, Suminoe Ward, Osaka City,
Osaka
3-1-1, Akedori, Izumi Ward, Sendai City, Miyagi
2568-1, Aza Minamihara, Oaza Tako,
Kaminokawamachi, Kawachi District, Tochigi
2261-6, Aza Shiroyama, Obuchi, Fuji City, Shizuoka
3-1-3, Yayoigaoka, Tosu City, Saga
2969-2, Ishikawamachi, Hachioji City, Tokyo
2969-18, Ishikawamachi, Hachioji City, Tokyo
2969-19, Ishikawamachi, Hachioji City, Tokyo
1-2-2, Shingashi, Itabashi Ward, Tokyo
1-2-31, Miyashimo, Chuo Ward, Sagamihara City,
Kanagawa
49-3, Kiyokucho, Kuki City, Saitama
1947-14, Nakamuracho, Yokkaichi City, Mie
6-4, Kashiwabara, Ishioka City, Ibaraki
5-7-5, Niikura, Wako City, Saitama
439-1, Aza Kasahari, Okami, Hiratsuka City,
Kanagawa
1-3-5, Inter-Minami, Misato City, Saitama
642-1, Aza Sanjyuroku, Oaza Uchihashi,
Kasuyamachi, Kasuya District, Fukuoka
5-14, Sonekitamachi, Kokuraminami Ward,
Kitakyushu City, Fukuoka
1374-1, Aza Taneishita, Nishifukai, Nagareyama
City, Chiba
1-7-1, Akanehama, Narashino City, Chiba
1597-1, Aza Waseda, Nishifukai, Nagareyama City,
Chiba
Logistics properties – Subtotal

Assessedvalue at theend of period(Yen inmillions)(Note 3)

Book value(Yen inmillions)(Note 4)Form of ownership

Leasablearea (m2)(Note 2)

Real estate in trust

34,710.80

5,070

4,071

Real estate in trust

26,937.41

9,270

7,075

Real estate in trust

26,460.00

6,720

5,093

Real estate in trust

47,320.89

11,8007,685Real estate in trust
Real estate in trust

29,244.66
21,965.04

6,240
7,220

4,714
6,173

Real estate in trust

39,584.80

12,4009,508Real estate in trust

26,776.67

8,480

6,973

Real estate in trust

23,933.75

2,290

1,898

Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust

4,481.00
39,572.32
18,437.60
39,441.32
36,113.25
10,965.68
10,764.05
14,106.91
15,668.44

1,320
8,800
4,000
10,200
5,870
4,150
1,720
2,160
1,960

1,180
6,769
3,128
8,391
4,594
3,331
1,390
1,852
1,621

Real estate in trust

13,521.56

3,470

2,855

Real estate in trust

39,341.44

6,510

5,598

Real estate in trust

19,004.72

4,430

3,567

Real estate in trust

13,012.50

2,090

1,554

Real estate in trust

24,684.47

6,500

5,603

Real estate in trust

3,225.46

1,280

1,011

Real estate in trust

24,368.86

9,110

7,359

Real estate in trust

25,305.82

9,200

7,843

Real estate in trust

40,870.56

7,870

6,479

Real estate in trust

22,485.08

4,320

3,439

Real estate in trust

39,580.46

8,320

6,774

Real estate in trust

52,239.75

6,410

7,434

Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust

23,795.40
65,215.07
16,523.82
21,402.20
26,275.05
33,763.46

3,780
10,400
4,790
6,450
8,330
14,300

3,360
8,604
4,191
5,573
7,132
12,261

Real estate in trust

16,599.30

4,500

3,760

Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust

29,410.54
6,185.46
24,493.54
39,258.06

6,980
1,610
4,470
11,850

5,864
1,440
3,879
10,682

Real estate in trust

65,272.52

16,20015,049Real estate in trust

55,864.47

19,90016,182

Real estate in trust

73,754.20

17,20012,660Real estate in trust

26,672.98

3,900

3,258

Real estate in trust

124,489.93

36,30031,929Real estate in trust

12,686.30

6,580

5,861

Real estate in trust

106,859.16

35,70031,7092,095,298.03

544,460

450,71417

I. Asset Management Report
I. Asset Management Report

Property nameQiz Ebisu
Castalia Azabujuban
Shichimenzaka
Castalia Shibakoen
Castalia Ginza
Castalia Hiroo
Castalia Nihonbashi
Castalia Hacchobori
Castalia Azabujuban
Castalia Azabujuban II
Castalia Shinjuku Natsumezaka
Castalia Ginza II
Castalia Shibuya Sakuragaoka
Castalia Nishi Azabu
Kasumicho
Castalia Ochanomizu
Castalia Sangubashi
Castalia Suitengu

Residential properties

Castalia Suitengu II
Castalia Shintomicho
Castalia Shintomicho II
Castalia Harajuku
Castalia Yoyogi Uehara
Castalia Sendagaya
Castalia Shinjuku 7 chome
Castalia Ningyocho
Castalia Ningyocho II
Castalia Shin-Ochanomizu
Castalia Higashi Nihonbashi II
Castalia Jinbocho
Castalia Shintomicho III
Castalia Shinjuku Gyoen
Castalia Takanawadai
Castalia Higashi Nihonbashi III
Castalia Shinjuku Gyoen II
Castalia Shintomicho IV
Castalia Takanawadai II
Castalia Minami Azabu
Castalia Ginza III
Castalia Kayabacho
Castalia Takanawa
Castalia Higashi Nihonbashi
Castalia Shinjuku
Castalia Ichigaya
Shibaura Island Bloom Tower
Castalia Hatsudai
Castalia Hatsudai II
Castalia Ebisu
Castalia Meguro Kamurozaka
Castalia Toritsudaigaku
Castalia Yukigaya
Castalia Yutenji
Castalia Otsuka
Castalia Kikukawa
Castalia Meguro
Castalia Otsuka II
Castalia Jiyugaoka
Castalia Mejiro
Castalia Ikebukuro
Castalia Kaname-cho
Castalia Tower Shinagawa
SeasideCastalia Yakumo
Castalia Togoshiekimae
Castalia Honjo Azumabashi

18

Leasablearea (m2)(Note 2)

Assessedvalue at theBook value
end of period(Yen in(Yen inmillions)
millions)(Note 4)(Note 3)
10,9007,322

Location (Note 1)

Form of ownership

4-3-1, Ebisu, Shibuya Ward, Tokyo

Real estate in trust

5,230.39

2-7-5, Azabujuban, Minato Ward, Tokyo

Real estate in trust

3,492.93

5,110

4,083

3-32-10, Shiba, Minato Ward, Tokyo
1-14-13, Ginza, Chuo Ward, Tokyo
3-13-3, Nishi Azabu, Minato Ward, Tokyo
11-2, Nihonbashi Kabuto-cho, Chuo Ward, Tokyo
3-27-5, Hacchobori, Chuo Ward, Tokyo
2-10-1, Azabujuban, Minato Ward, Tokyo
2-21-2, Azabujuban, Minato Ward, Tokyo
10-1, Kikui-cho, Shinjuku Ward, Tokyo
1-23-4, Ginza, Chuo Ward, Tokyo
29-21, Sakuragaoka-cho, Shibuya Ward, Tokyo

Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust

2,707.51
2,226.42
1,621.59
1,458.73
2,969.57
2,400.00
2,094.58
1,917.62
1,817.56
1,123.80

2,830
2,750
2,310
1,390
2,740
3,240
2,840
1,860
2,110
1,450

2,366
2,251
2,010
1,054
2,058
2,748
2,491
1,757
1,605
1,334

1-3-12, Nishi Azabu, Minato Ward, Tokyo

Real estate in trust

2,779.77

2,860

2,277

3-24-1, Kanda-Ogawamachi, Chiyoda Ward, Tokyo
4-52-12, Yoyogi, Shibuya Ward, Tokyo
2-8-13, Nihonbashi Kakigaracho, Chuo Ward, Tokyo
1-38-16, Nihonbashi Kakigaracho, Chuo Ward,Tokyo
3-10-10, Irifune, Chuo Ward, Tokyo
2-6-4, Irifune, Chuo Ward, Tokyo
3-55-3, Sendagaya, Shibuya Ward, Tokyo
1-17-16, Uehara, Shibuya Ward, Tokyo
2-9-10, Sendagaya, Shibuya Ward, Tokyo
7-17-16, Shinjuku, Shinjuku Ward, Tokyo
7-15, Nihonbashi Tomisawacho, Chuo Ward, Tokyo
8-12, Nihonbashi Tomisawacho, Chuo Ward, Tokyo
2-3-3, Kanda Awaji-cho, Chiyoda Ward, Tokyo
12-11, Nihonbashi Tomisawacho, Chuo Ward, Tokyo
2-40-8, Kanda-Jinbocho, Chiyoda Ward, Tokyo
2-8-8, Irifune, Chuo Ward, Tokyo
2-14-4, Shinjuku, Shinjuku Ward, Tokyo
3-4-12, Takanawa, Minato Ward, Tokyo
3-5-6, Higashi-Nihonbashi, Chuo Ward, Tokyo
1-29-15, Shinjuku, Shinjuku Ward, Tokyo
3-10-8, Irifune, Chuo Ward, Tokyo
3-5-6, Takanawa, Minato Ward, Tokyo
2-2-27, Minami Azabu, Minato Ward, Tokyo
8-18-2, Ginza, Chuo Ward, Tokyo
2-1, Nihonbashi Koami-cho, Chuo Ward, Tokyo
2-17-12, Takanawa, Minato Ward, Tokyo
9-14, Nihonbashi Yokoyama-cho, Chuo Ward, Tokyo
2-6-11, Shinjuku, Shinjuku Ward, Tokyo
14-4, Ichigaya Yakuoji-machi, Shinjuku Ward, Tokyo
4-20-2, 4-20-3, 4-20-4, Shibaura, Minato Ward,Tokyo
1-10-9, Honmachi, Shibuya Ward, Tokyo
1-33-7, Honmachi, Shibuya Ward, Tokyo
3-15-6, Ebisu, Shibuya Ward, Tokyo
4-31-23, Nishi Gotanda, Shinagawa Ward, Tokyo
1-4-1, Midorigaoka, Meguro Ward, Tokyo
2-13-3, Higashi Yukigaya, Ota Ward, Tokyo
2-14-21, Yutenji, Meguro Ward, Tokyo
3-17-4, Minami Otsuka, Toshima Ward, Tokyo
2-1-12, Kikukawa, Sumida Ward, Tokyo
2-1-13, Meguro, Meguro Ward, Tokyo
2-32-20, Higashi-Ikebukuro, Toshima Ward, Tokyo
1-20-1, Jiyugaoka, Meguro Ward, Tokyo
2-8-16, Takada, Toshima Ward, Tokyo
3-1-12, Nishi-Ikebukuro, Toshima Ward, Tokyo
5-26-10 Nishi-Ikebukuro, Toshima Ward, Tokyo
4-10-18, Higashi Shinagawa, Shinagawa Ward,Tokyo
2-20-5, Yakumo, Meguro Ward, Tokyo
1-7-16, Hiratsuka, Shinagawa Ward, Tokyo
3-7-11, Honjo, Sumida Ward, Tokyo

Real estate in trust
Real estate in trust
Real estate in trust

2,559.21
1,898.47
1,940.94

2,720
1,970
1,740

1,650
1,441
1,155

Real estate in trust

1,858.34

1,550

1,041

Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate
Real estate
Real estate in trust
Real estate
Real estate
Real estate in trust

1,444.52
1,244.54
1,225.26
811.95803.03957.601,747.90
1,826.80
1,308.38
2,117.46
1,628.80
972.51
3,594.16
1,147.44
1,105.20
668.79681.001,567.84
882.673,494.42
4,602.95
10,408.26
6,442.28
3,150.80
1,546.34

1,260
1,120
1,270
897
785
642
1,600
1,730
1,330
2,070
1,760
931
3,620
1,330
934
630
579
1,680
924
3,630
3,930
10,500
4,830
4,020
1,560

863
780
856
635
549
429
850
943
854
1,235
1,072
622
2,512
816
601
449
384
1,124
615
2,704
2,484
7,282
3,183
2,754
839

Asset
class

Residential properties

Asset
class

I. Asset Management Report

Property nameLocation (Note 1)

Form of ownership

Castalia Kitazawa
Castalia Monzennakacho
Castalia Kamiikedai
Castalia Morishita
Castalia Wakabayashikoen
Castalia Asakusabashi
Castalia Iriya
Castalia Kita Ueno
Castalia Morishita II
Castalia Minowa
Castalia Oyamadai
Castalia Nakano
Castalia Yoga
Castalia Sumiyoshi
Castalia Monzennakacho II
Castalia Oshiage
Castalia Kuramae
Castalia Nakanobu
Royal Parks Toyosu
Castalia Togoshi
Castalia Ooimachi
Castalia Omori
Castalia Mishuku
Castalia Arakawa
Castalia Omori II
Castalia Nakameguro
Castalia Meguro Chojyamaru
Castalia Meguro Takaban
Castalia Omori III
Castalia Meguro Tairamachi
Royal Parks SEASIR
Castalia Honkomagome

1-15-5, Kitazawa, Setagaya Ward, Tokyo
1-17-12, Fukuzumi, Koto Ward, Tokyo
1-4-15, Kamiikedai, Ota Ward, Tokyo
1-16-12, Morishita, Koto Ward, Tokyo
4-39-4, Wakabayashi, Setagaya Ward, Tokyo
2-16-21, Yanagi-bashi, Taito Ward, Tokyo
3-1-28, Shitaya, Taito Ward, Tokyo
1-15-5, Kita-Ueno, Taito Ward, Tokyo
2-12-11, Shin-Ohashi, Koto Ward, Tokyo
5-24-4, Negishi, Taito Ward, Tokyo
7-14-13, Todoroki, Setagaya Ward, Tokyo
2-12-13, Arai, Nakano Ward, Tokyo
1-3-12, Tamagawadai, Setagaya Ward, Tokyo
2-8-11, Sumiyoshi, Koto Ward, Tokyo
2-2-9, Tomioka, Koto Ward, Tokyo
3-5-2, Mukoujima, Sumida Ward, Tokyo
3-9-4, Kuramae, Taito Ward, Tokyo
4-7-11, Nakanobu, Shinagawa Ward, Tokyo
3-5-21, Toyosu, Koto Ward, Tokyo
5-2-1, Togoshi, Shinagawa Ward, Tokyo
4-2-11, Ooi, Shinagawa Ward, Tokyo
1-19-20, Omori kita, Ota Ward, Tokyo
1-3-39, Taishidou, Setagaya Ward, Tokyo
2-3-1, Arakawa, Arakawa Ward, Tokyo
1-8-13, Omori kita, Ota Ward, Tokyo
1-18-7, Aobadai, Meguro Ward, Tokyo
2-8-1, Kamiosaki, Shinagawa Ward, Tokyo
1-6-19, Takaban, Meguro Ward, Tokyo
5-21-11, Minami-ooi, Shinagawa Ward, Tokyo
1-23-8, Tairamachi, Meguro Ward, Tokyo
1-16-2, Nishiarai Sakae-cho, Adachi Ward, Tokyo
6-21-2, Honkomagome, Bunkyo Ward, Tokyo
2-8, Kizuki Ise-cho, Nakahara Ward, Kawasaki City,
Kanagawa
3-5-10, Tsurumi Chuo, Tsurumi Ward, Yokohama
City, Kanagawa
4-4-8, Honcho, Funabashi City, Chiba
4-19-16, Nishi Funa, Funabashi City, Chiba
1-8-1, Hinodecho, Naka Ward, Yokohama City,
Kanagawa
1-24-3, Ichikawa, Ichikawa City, Chiba
1-8-2, Hanakoganei, Kodaira City, Tokyo
2-21, Imaikami-cho, Nakahara Ward, Kawasaki City,
Kanagawa
2-1-1, Wakabadai, Inagi City, Tokyo
5-3-3, Minatomirai, Nishi Ward, Yokohama City,
Kanagawa
3-298-1, Koyasu-dori, Kanagawa Ward, Yokohama
City, Kanagawa

Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate
Real estate
Real estate
Real estate
Real estate
Real estate
Real estate
Real estate
Real estate
Real estate in trust
Real estate in trust
Real estate in trust
Real estate
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust

1,220.16
887.94414.45
1,383.90
1,425.43
1,537.84
1,415.15
4,197.66
1,275.60
2,406.41
857.32
1,613.86
1,472.38
1,362.60
3,038.98
1,785.24
1,994.93
2,421.82
18,112.03
2,629.59
1,413.75
2,046.36
2,640.86
3,797.92
2,818.70
3,166.71
2,123.77
1,961.52
2,004.80
1,278.52
17,269.74
2,224.41

Real estate in trust

4,208.83

2,430

1,636

Real estate in trust

1,452.09868

584

Real estate in trust
Real estate in trust

1,552.01
1,597.32

892
1,100

654
716

Real estate in trust

744.90412

298

Real estate in trust
Real estate in trust

876.8918,153.57

658
7,000

397
4,414

Real estate in trust

2,179.80

2,070

1,577

Real estate in trust

21,367.93

4,960

3,328

Real estate in trust

26,294.49

11,8007,087

Real estate in trust

3,009.74

2,410

1,559

Real estate in trust

3,808.97

1,370

870

Real estate in trust
Real estate in trust
Real estate
Real estate
Real estate
Real estate

3,471.39
3,279.90
10,920.75
2,836.00
3,061.60

2,100
1,930
6,530
1,400
1,210

1,302
1,199
3,999
881
830

8,747.40

5,280

2,790

Real estate
Real estate

3,071.60

1,700

1,042

1,684.10616

381

2,800.32

1,020

654

Cosmo Heim Musashikosugi
Castalia Tsurumi
Castalia Funabashi
Castalia Nishi Funabashi
Castalia Nogeyama
Castalia Ichikawa
Royal Parks Hanakoganei
Castalia Musashikosugi
Royal Parks Wakabadai
Pacific Royal Court Minatomirai
Urban Tower

Real estate in trust

16,849.50

10,000

6,007

Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust

3,077.05
2,339.42
1,659.71
4,967.97
863.701,542.30
1,380.35
1,871.70
1,168.18
1,414.73
1,784.50
1,472.47
1,658.90
3,644.35
1,624.06

2,780
2,420
1,840
5,390
553
1,330
1,530
1,850
983
1,400
1,570
1,730
1,300
3,410
1,490

1,929
1,815
1,357
3,939
560
962
1,293
1,315
717
852
945
1,159
920
2,366
1,062

L-Place Shinkoyasu

Real estate in trust

12,732.35

10,5006,628Castalia Omachi

809
1,413
944

Castalia Uemachidai

Real estate
Real estate
Real estate in trust

1,276.91
2,014.12
2,255.88

964
2,470
1,420

Assessedvalue at theBook value
end of period(Yen in(Yen inmillions)
millions)(Note 4)(Note 3)
1,000
723
712
449
254
173
1,230
756
1,000
754
1,110
706
761
497
3,570
2,369
969
577
1,850
1,269
696
502
1,540
959
1,310
848
1,170
824
3,300
1,912
1,340
925
1,720
1,077
2,730
1,596
11,700
5,328
2,750
1,489
1,750
1,084
2,070
1,361
2,740
1,734
2,580
1,481
3,250
2,226
5,150
3,698
2,750
1,966
2,180
1,705
1,950
1,415
1,470
1,163
5,240
3,647
2,010
1,447

Leasablearea (m2)(Note 2)

Royal Parks Musashikosugi
Castalia Sakaisuji Honmachi
Castalia Shin-Umeda
Castalia Abeno
Castalia Sakae
Castalia Higashi Hie
Castalia Tower Nagahoribashi
Castalia Sannomiya
Castalia Kotodaikoen
Castalia Ichibancho

Castalia Tower Higobashi
Castalia Fushimi

13-8, Aza Shinjuku-kochi, Nakamaruko, Nakahara
Ward, Kawasaki City, Kanagawa
1-3-7, Kyutarocho, Chuo Ward, Osaka City, Osaka
6-8-21, Nakatsu, Kita Ward, Osaka City, Osaka
2-4-37, Abeno-Suji, Abeno Ward, Osaka City, Osaka
4-16-10, Sakae, Naka Ward, Nagoya City, Aichi
5-31, Hie-cho, Hakata Ward, Fukuoka City, Fukuoka
1-15-25, Shimanouchi, Chuo Ward, Osaka City,
Osaka
3-2-31, Isobedori, Chuo Ward, Kobe City, Hyogo
3-10-24, Kokubun-cho, Aoba Ward, Sendai City,
Miyagi1-6-27, 1-6-30, Ichibancho, Aoba Ward, Sendai City,
Miyagi2-5-8, Omachi, Aoba Ward, Sendai City, Miyagi
4-1-12, Uehonmachi Nishi, Chuo Ward, Osaka City,
Osaka
1-2-24, Tosabori, Nishi Ward, Osaka City, Osaka
1-8-49, Nishiki, Naka Ward, Nagoya City, Aichi

Real estate
Real estate
Real estate

2,149.08891

564

5,415.39

3,140

1,960

Real estate
Real estate in trust

6,230.20
7,022.69

4,060
3,330

2,324
1,833

19

I. Asset Management Report
I. Asset Management Report

Property nameCastalia Meieki Minami
Castalia Yakuin
Residential properties

Castalia Mibu
Castalia Tsutsujigaoka
Royal Parks Namba
Castalia Shigahondori
Castalia Kyoto Nishioji
Castalia Ningyocho III
Royal Parks Umejima
Castalia Shinsakae II
Castalia Sumiyoshi II
ACROSSMALL Shinkamagaya
FOLEO Hirakata
QiZ GATE URAWA
UNICUS Takasaki
ACROSSPLAZA Miyoshi(Land)
DREAM TOWN ALi
ASOBOX (Land)
FOLEO Ome Imai
FOLEO Otsu Ichiriyama

Retail properties

FOLEO Hakata
ACROSSMALL Semboku(Land)
iias Tsukuba
LIFE Sagamihara Wakamatsu
FOLEO Sendai Miyanomori
ACROSSPLAZA Inazawa(Land)
Sports Depo and GOLF5
Kokurahigashi IC Store
Hiratsuka Retail Property(Land)
Royal Home Center
Morinomiya (Land)
Aoyama Tailor Bunkyo Sengoku
Ekimae StoreFOLEO Shobu
Hapias Kaita (Land)
COMBOX310

Hotel properties

Sports Plaza Ibaraki

Daiwa Roynet Hotel Yokohama
KannaiSuper Hotel JR Nara Station
Sanjo Street
Daiwa Roynet Hotel Nagoya
Shinkansenguchi
AMANEK Kanazawa
Candeo Hotels Nagasaki
Shinchi Chinatown

Location (Note 1)

1-12-22, Meiekiminami, Nakamura Ward, Nagoya
City, Aichi
2-3-13, Imaizumi, Chuo Ward, Fukuoka City,
Fukuoka
79, Mibu Aiai-cho, Nakagyo Ward, Kyoto City, Kyoto
4-2-35, Shintera, Wakabayashi Ward, Sendai City,
Miyagi2-2-40, Minato machi, Naniwa Ward, Osaka City,
Osaka
1-15-2, Wakabadori, Kita Ward, Nagoya City, Aichi
100-1, Shichijyo Goshonouchi Minamimachi,
Shimogyo Ward, Kyoto City, Kyoto
1-2-3, Nihonbashi Ningyocho, Chuo Ward, Tokyo
5-25-33, Umeda, Adachi Ward, Tokyo
1-29-21, Shinsakae, Naka Ward, Nagoya City, Aichi
1-16-1, Sumiyoshi, Koto Ward, Tokyo
Residential properties – Subtotal
2-12-1, Shin-Kamagaya, Kamagaya City, Chiba
1-20-10, Koyamichi, Hirakata City, Osaka
3720, Aza Fudodani, Oaza Nakao, Midori Ward,
Saitama City, Saitama
1150-5, Aza Nishikanai, Iizuka-machi, Takasaki City,
Gunma
855-403, Aza Kitashinno, Oaza Fujikubo, Miyoshimachi, Iruma District, Saitama
3-1-1, Hamada, Aomori City, Aomori
2-2-16, Nakatsuguchi, Kokura Kita Ward, Kitakyushu
City, Fukuoka
3-10-9, Imai, Ome City, Tokyo
7-1-1, Ichiriyama, Otsu City, Shiga
1-14-46, Higashinaka, Hakata Ward, Fukuoka City,
Fukuoka
5-456-67, Harayamadai, Minami Ward, Sakai City,
Osaka
5-19, Kenkyugakuen, Tsukuba City, Ibaraki
5-19-5, Wakamatsu, Minami Ward, Sagamihara City,
Kanagawa
4-14-5, Higashisendai, Miyagino Ward, Sendai City,
MiyagiReal estate in trust

1,822.10

Assessedvalue at theend of period(Yen inmillions)(Note 3)

Book value(Yen inmillions)(Note 4)

1,010

616

Real estate

2,784.83

1,300

842

Real estate in trust

2,828.39

1,710

1,010

Real estate in trust

4,471.11

1,920

1,079

Real estate in trust

10,354.15

3,050

2,371

Real estate in trust

5,086.69

2,480

1,465

Real estate

2,035.37

1,130

960

Real estate in trust
Real estate in trust

2,897.06
6,828.78
4,425.46
1,687.89
446,435.62
41,742.84
16,385.56

3,090
2,460
2,120
1,520
323,681
8,850
4,670

1,907
1,782
1,739
1,507
215,947
7,213
4,259

Real estate in trust

9,720.49

4,550

4,040

Real estate in trust

9,277.08

3,220

2,887

Real estate in trust

24,018.00

3,940

3,740

Real estate in trust

22,196.81

8,260

7,709

Real estate in trust

11,207.90

2,060

1,617

Real estate in trust
Real estate in trust

8,637.91
62,917.73

3,990
8,560

3,632
7,835

Real estate in trust

23,230.77

3,790

3,082

Real estate in trust

30,824.72

3,910

3,383

Real estate in trust

138,900.39

34,30033,680Real estate in trust

2,973.44

1,890

1,631

Real estate in trust

19,845.72

7,670

6,850

5-1-1, Otsuka Minami, Inazawa City, Aichi

Real estate in trust

31,981.70

2,620

2,390

2-18-17, Kamikuzuhara, Kokuraminami Ward,
Kitakyushu City, Fukuoka

Real estate in trust

8,899.89

2,450

2,079

1-2, Kuryozutsumi, Hiratsuka City, Kanagawa

Real estate in trust

28,002.92

6,720

5,857

1-540-1, Tamatsukuri, Chuo Ward, Osaka City,
Osaka

Real estate in trust

6,669.74

5,300

4,541

2-29-21, Honkomagome, Bunkyo Ward, Tokyo

Real estate in trust

1,066.95

779

761

Real estate in trust

19,104.17

5,250

4,871

Real estate
Real estate in trust

13,415.52
30,517.69

1,540
4,790

1,471
4,199

Real estate in trust

9,470.27

2,710

2,673

6006-1, Aza Terada, Shobu, Shobucho, Kuki City,
Saitama
2-1262-11, Une, Kaita-cho, Aki District, Hiroshima
1-107-1, Miyamachi, Mito City, Ibaraki
6-2, Eidai-cho, Ibaraki City, Osaka (Retail Building)
9-22, Eidai-cho, Ibaraki City, Osaka (Land of Parking
Garage)Retail properties – Subtotal
2-7-4, Hagoromocho, Naka Ward, Yokohama City,
Kanagawa
500-1, Sanjo-cho, Nara City, Nara
1-23, Tsubakicho, Nakamura Ward, Nagoya City,
Aichi
2-25-17, Katamachi, Kanazawa City, Ishikawa
3-12 Doza-machi, Nagasaki City, Nagasaki
Hotel properties – Subtotal

20

Form of ownership

Leasablearea (m2)(Note 2)

Real estate in trust
Real estate in trust
Real estate in trust
Real estate in trust

571,008.21

131,819

120,409

Real estate in trust

7,932.37

4,940

4,630

Real estate in trust

2,637.18

1,500

1,406

Real estate in trust

7,605.41

4,390

5,344

Real estate in trust

7,011.58

4,900

5,002

Real estate in trust

6,770.65

3,360

3,045

31,957.19

19,09019,429

Asset
class

Property name327-1, Sanno-cho, Inage Ward, Chiba City, Chiba
1523-1, Aza Shirasu, Misaki-machi Moroiso, Miura
City, Kanagawa

Real estate in trust

4,177.52

Real estate in trust

3,901.14

1,320

998

Naha Shin-Toshin Center
Building (Daiwa Roynet Hotel
Naha-Omoromachi)

1-1-12, Omoromachi, Naha City, Okinawa

Real estate in trust

13,480.00

8,140

6,990

Sharp Hiroshima Building

2-13-4, Nishihara, Asaminami Ward, Hiroshima City,
Hiroshima

Real estate in trust

3,064.89

1,970

1,775

Nursery Room Berry Bear
Omori Nishi Welcia Ota Omori
Nishi Store

5-25-21, Omorinishi, Ota Ward, Tokyo

Real estate in trust

1,345.60

1,380

1,377

Real estate in trust

29,915.08

32,40028,13055,884.23
3,200,583.28

46,5301,065,580

40,043
846,544GRANODE Hiroshima

2.

3.

4.
5.

Assessedvalue at theBook value
end of period(Yen in(Yen inmillions)
millions)(Note 4)(Note 3)1,320
771

Form of ownership

Aburatsubo Marina HILLS(Notes) 1.

Leasablearea (m2)(Note 2)

Location (Note 1)

Urban Living Inage

Other assets

Asset
class

I. Asset Management Report

3-5-7, Futabanosato, Higashi Ward, Hiroshima City,
Hiroshima
Other – Subtotal
Total“Location” means displayed address of each real estate or each real estate in trust. If a property does not have a displayed address, the address of the building in the register (whenthere is more than one address, any of them) is shown. For land properties, the address of the land in the register is shown as location.
“Leasable area” means the leasable area of the building (or land in the case of land properties) in relation to each real estate or each real estate in trust and the figures stated referto the area DHR believes is leasable as indicated in the relevant lease agreement or drawing of the building, etc. in relation to each real estate or each real estate in trust as ofFebruary 28, 2023. In the cases of each co-owned real estate or quasi co-owned trust beneficiary interests, the leasable area of the entire real estate multiplied by the ratio of coownership of the real estate or quasi co-ownership of the trust beneficiary interests in real estate held by DHR is provided.
“Assessed value at the end of period” is the appraisal value as of February 28, 2023 provided by real estate appraisers (Daiwa Real Estate Appraisal Co., Ltd., Chuo Real EstateAppraisal Co., Ltd., The Tanizawa Sōgō Appraisal Co., Ltd., Japan Real Estate Institute and JLL Morii Valuation & Advisory K.K.) in accordance with the Articles of Incorporation of
DHR as well as “Regulations on Accounting of Investment Corporations.” The amounts are rounded down to the nearest million yen. There is no special interest between DHR andeach real estate appraiser.
“Book value” is the amount recorded on the balance sheets as of February 28, 2023 (in the case of real estate and real estate in trust, “Book value” is the acquisition price (including
expenses associated with the acquisition) less accumulated depreciation), which is rounded down to the nearest million yen.
Separately from the building of this property, a part of the land of this property is leased to the lessee for the purpose of subleasing to Fukuoka Prefecture and other third parties asland for a police station, etc. Therefore, the area of such leased land is not included in the leasable area.

21

I. Asset Management Report
I. Asset Management Report

I. Asset Management Report

The status of rental business related to each asset held by DHR is as follows:
33rd period(From March 1, 2022 to August 31, 2022)

22

34th period(From September 1, 2022 to February 28, 2023)

Asset
class

Rate to total realestate rental
revenues(%) (Note 2)

Occupancy rate
(as of the end of
period)(%) (Note 1)

Rental revenues(during the period)(Yen inthousands)

Rate to total realestate rental
revenues(%) (Note 2)

100.0(Note 3)(Note 3)100.0

102,828

0.4

100.0

(Note 3)(Note 3)100.0

102,828

D Project Kuki VIII

100.0

(Note 3)0.3

(Note 3)100.0

(Note 3)(Note 3)(Note 3)

D Project Yokkaichi

100.0(Note 3)

D Project Ibaraki Ishioka

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)(Note 3)(Note 3)100.0

(Note 3)

D Project Wako A(Note 3)100.0

(Note 3)(Note 3)100.0

(Note 3)(Note 3)

D Project Hiratsuka

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

DPL Misato

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

DPL Fukuoka Kasuya

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

DPL Kitakyushu

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)(Note 3)

DPL Nagareyama I

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)(Note 3)(Note 3)

DPL Shin-Narashino

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)100.0

136,871

0.5

DPL Nagareyama III

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Logistics properties – Subtotal

100.0

13,877,585

47.3

100.0

13,937,632

47.3(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Qiz Ebisu

98.8

245,6670.8

98.1

244,303

0.8

100.0

(Note 3)(Note 3)100.0

(Note 3)(Note 3)

D Project Kawagoe I

100.0

102,938

0.4

100.0

102,933

0.3

Castalia Azabujuban
Shichimenzaka

93.0

111,880

0.4

96.8

115,315

0.4

D Project Kawagoe II

100.0

142,536

0.5

100.0

142,536

0.5

Castalia Shibakoen

97.6

67,831

0.2

94.2

68,2770.2

DPL Inuyama

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Ginza

97.3

70,7990.2

91.3

69,1690.2

D Project Fukuoka Hakozaki

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Hiroo

100.0

53,502

0.2

97.5

53,613

0.2

D Project Kuki III

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Nihonbashi

93.1

37,8470.1

100.0

38,2330.1

D Project Kuki IV

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Hacchobori

90.3

67,3920.2

96.8

68,7880.2

D Project Kuki V

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Azabujuban

96.7

72,6630.2

100.0

74,943

0.3

D Project Kuki VI

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Azabujuban II

95.7

60,5130.2

92.8

64,7790.2

D Project Yashio

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)90.5

45,752

0.2

92.9

46,934

0.2

D Project Nishiyodogawa

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Shinjuku
Natsumezaka

D Project Matsudo

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Ginza II

97.1

52,0860.2

98.6

53,196

0.2

D Project Hibiki Nada

100.0

(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Shibuya
Sakuragaoka

88.6

34,4640.1

91.4

34,5800.1

D Project Morioka II

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

D Project Kawagoe III

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Nishi Azabu
Kasumicho

100.0

76,9150.3

98.1

76,772

0.3

D Project Kazo

100.0

(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Ochanomizu

97.1

61,4000.2

92.4

58,876

0.2

D Project Urayasu III

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Sangubashi

95.4

49,1320.2

96.2

48,322

0.2

D Project Tomisato

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Suitengu

98.4

47,0360.2

98.4

46,6450.2

D Project Kyotanabe

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Suitengu II

98.3

42,6270.1

100.0

43,636

0.1

D Project Sendai Izumi

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Shintomicho

97.7

33,8320.1

95.2

34,5200.1

D Project Oyama

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Shintomicho II

97.3

29,6080.1

93.8

30,1480.1

D Project Sano

100.0

(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Harajuku

100.0

28,8160.1

100.0

29,052

0.1

D Project Tatebayashi

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Yoyogi Uehara

96.2

22,4580.1

100.0

23,0480.1

D Project Kakegawa

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Sendagaya

91.7

20,2520.1

100.0

20,9100.1

D Project Hiroshima Seifu

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Shinjuku 7 chome

94.8

18,8370.1

100.0

18,4230.1

D Project Tosu II

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Ningyocho

100.0

39,0080.1

100.0

39,792

0.1

D Project Kawagoe IV

100.0

161,059

0.5

100.0

161,023

0.5

Castalia Ningyocho II

100.0

41,6310.1

100.0

43,076

0.1

D Project Kuki VII

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Shin-Ochanomizu

91.8

33,5640.1

97.3

34,151

0.1

D Project Chibakita

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Higashi Nihonbashi II

100.0

50,6770.2

97.4

52,142

0.2

D Project Matsudo II

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Jinbocho

96.7

42,6090.1

100.0

42,0290.1

D Project Tomisato II

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Shintomicho III

93.0

25,1120.1

97.7

24,5380.1

D Project Osaka Hirabayashi

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Shinjuku Gyoen

100.0

83,7870.3

100.0

83,811

0.3

D Project Sendai Izumi II

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Takanawadai

93.5

29,1730.1

97.3

30,5290.1

D Project Kaminokawa

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)100.0

24,3520.1

100.0

24,336

0.1

D Project Fuji

100.0

(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Higashi Nihonbashi
III

D Project Tosu III

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Shinjuku Gyoen II

100.0

16,5950.1

96.3

16,8040.1

D Project Kitahachioji I

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Shintomicho IV

100.0

15,9110.1

100.0

16,8750.1

D Project Kitahachioji II

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Takanawadai II

100.0

40,0250.1

90.3

38,752

0.1

D Project Kitahachioji III

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Minami Azabu

100.0

22,201

0.1

96.9

21,911

0.1

Castalia Ginza III

95.4

84,8670.3

100.0

88,8870.3

Castalia Kayabacho

98.8

99,5170.3

97.8

102,489

0.3

Castalia Takanawa

98.5

260,3170.9

99.1

264,303

0.9

Rate to total realestate rental
revenues(%) (Note 2)

Occupancy rate
(as of the end of
period)(%) (Note 1)

Rental revenues(during the period)(Yen inthousands)

Rate to total realestate rental
revenues(%) (Note 2)

D Project Itabashi Shingashi

D Project Machida100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

D Project Sagamihara

D Project Hachioji

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

D Project Aikawa-Machi

100.0(Note 3)(Note 3)100.0

(Note 3)

D Project Urayasu I

100.0(Note 3)(Note 3)100.0

(Note 3)

D Project Urayasu II

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

D Project Akanehama

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

D Project Noda

100.0

(Note 3)(Note 3)100.0

(Note 3)(Note 3)

D Project Inuyama

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

D Project Neyagawa

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

D Project Morioka

100.0(Note 3)(Note 3)100.0

(Note 3)

D Project Tsuchiura

100.0(Note 3)(Note 3)100.0

D Project Fukuoka Umi

100.0

136,747

0.5

D Project Tosu

100.0

(Note 3)

D Project Kuki I

100.0

D Project Kuki II

Property name

Logistics properties

Rental revenues(during the period)(Yen inthousands)

Occupancy rate
(as of the end of
period)(%) (Note 1)

34th period(From September 1, 2022 to February 28, 2023)

Rental revenues(during the period)(Yen inthousands)

Property name

Occupancy rate
(as of the end of
period)(%) (Note 1)

Residential properties

Logistics properties

Asset
class

33rd period(From March 1, 2022 to August 31, 2022)

23

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I. Asset Management Report
33rd period(From March 1, 2022 to August 31, 2022)

24

Rental revenues(during the period)(Yen inthousands)

Rate to total realestate rental
revenues(%) (Note 2)

Occupancy rate
(as of the end of
period)(%) (Note 1)

Rental revenues(during the period)(Yen inthousands)

Rate to total realestate rental
revenues(%) (Note 2)

Castalia Higashi Nihonbashi

98.9

148,747

Castalia Shinjuku

100.0

92,5540.5

98.8

150,169

0.5

0.3

100.0

92,5620.3

Castalia Ichigaya

93.3

42,6980.1

93.3

41,023

Shibaura Island Bloom Tower

97.4

401,038

1.4

98.1

Castalia Hatsudai

96.4

69,581

0.2

Castalia Hatsudai II

96.9

60,890

Castalia Ebisu

95.1

Castalia Meguro Kamurozaka

Asset
class

34th period(From September 1, 2022 to February 28, 2023)

Occupancy rate
(as of the end of
period)(%) (Note 1)

Rental revenues(during the period)(Yen inthousands)

Rate to total realestate rental
revenues(%) (Note 2)

Occupancy rate
(as of the end of
period)(%) (Note 1)

Rental revenues(during the period)(Yen inthousands)

Rate to total realestate rental
revenues(%) (Note 2)

Castalia Tsurumi

100.0

28,7990.1

100.0

29,8030.1

Castalia Funabashi

98.9

31,3160.1

94.4

30,9770.1

0.1

Castalia Nishi Funabashi

97.5

34,9540.1

100.0

35,3120.1

406,033

1.4

Castalia Nogeyama

93.3

14,5920.0

100.0

14,8400.1

95.6

69,0690.2

Castalia Ichikawa

100.0

22,5390.1

100.0

19,680

0.1

0.2

97.7

60,157

0.2

Royal Parks Hanakoganei

100.0

246,630

0.8

100.0

245,900

0.8

44,3480.2

100.0

44,661

0.2

Castalia Musashikosugi

98.9

56,571

0.2

97.7

58,0130.2

97.0

133,169

0.5

94.6

132,978

0.5

Royal Parks Wakabadai

100.0

262,940

0.9

100.0

262,375

0.9

Castalia Toritsudaigaku

94.3

19,0280.1

100.0

18,8020.1

Castalia Yukigaya

96.4

35,7830.1

100.0

34,740

0.1

Pacific Royal Court
Minatomirai Urban Tower

100.0

532,029

1.8

100.0

531,798

1.8

Castalia Yutenji

92.5

35,1530.1

95.8

36,772

0.1

L-Place Shinkoyasu

100.0

56,9450.2

100.0

56,9270.2

Castalia Otsuka

95.9

46,6900.2

97.5

47,9200.2

Royal Parks Musashikosugi

100.0

69,6910.2

100.0

69,5440.2

Castalia Kikukawa

95.8

26,5660.1

94.0

26,0700.1

Castalia Sakaisuji Honmachi

95.9

60,2180.2

96.7

60,8800.2

Castalia Meguro

95.8

34,2750.1

100.0

33,241

0.1

Castalia Shin-Umeda

99.1

55,112

0.2

95.5

55,5480.2

Castalia Otsuka II

94.5

38,0150.1

98.3

38,5660.1

Castalia Abeno

100.0

183,348

0.6

100.0

182,744

0.6

Castalia Jiyugaoka

97.9

39,6050.1

94.5

39,4670.1

Castalia Sakae

96.3

44,7620.2

96.1

45,8380.2

Castalia Mejiro

92.4

35,1980.1

97.5

34,6440.1

Castalia Higashi Hie

98.0

45,1020.2

99.2

45,1920.2

Castalia Ikebukuro

97.4

87,9810.3

95.0

87,191

0.3

Castalia Tower Nagahoribashi

98.6

163,951

0.6

97.3

164,951

0.6

Castalia Kaname-cho

97.3

39,6080.1

100.0

39,851

0.1

Castalia Sannomiya

94.8

53,8350.2

98.2

54,6650.2

Castalia Tower Shinagawa
Seaside96.6

291,0231.0

98.5

293,892

1.0

Castalia Kotodaikoen

100.0

23,9910.1

100.0

24,2860.1

Castalia Ichibancho

100.0

38,9830.1

96.9

38,8550.1

Castalia Yakumo

100.0

24,2260.1

100.0

24,7380.1

Castalia Omachi

94.4

31,8490.1

95.8

32,6430.1

Castalia Togoshiekimae

100.0

53,8560.2

100.0

53,7170.2

Castalia Uemachidai

100.0

91,4930.3

100.0

91,6160.3

Castalia Honjo Azumabashi

96.5

39,6930.1

98.2

39,8740.1

Castalia Tower Higobashi

95.6

128,094

0.4

96.5

128,433

0.4

Castalia Kitazawa

100.0

27,6580.1

100.0

28,4780.1

Castalia Fushimi

92.9

104,5800.4

95.0

103,9420.4

Castalia Monzennakacho

100.0

17,6700.1

100.0

17,7000.1

Castalia Meieki Minami

95.6

31,3560.1

96.9

30,6900.1

Castalia Kamiikedai

82.2

5,847

0.0

82.2

5,553

0.0

Castalia Yakuin

100.0

44,3460.2

99.2

43,9150.1

Castalia Morishita

100.0

33,8010.1

97.1

33,7070.1

Castalia Mibu

92.1

47,8700.2

91.5

47,6660.2

Castalia Wakabayashikoen

100.0

29,0560.1

100.0

29,151

0.1

Castalia Tsutsujigaoka

97.6

59,9930.2

95.0

57,991

0.2

Castalia Asakusabashi

100.0

34,191

0.1

93.1

34,1090.1

Royal Parks Namba

100.0

140,079

0.5

100.0

140,0140.5

Castalia Iriya

100.0

24,0440.1

100.0

25,3230.1

Castalia Shigahondori

100.0

76,3230.3

93.3

74,3000.3

Castalia Kita Ueno

97.8

91,215

0.3

99.1

95,9980.3

Castalia Kyoto Nishioji

96.3

33,2370.1

95.2

32,471

0.1

Castalia Morishita II

97.6

27,3470.1

97.6

28,9600.1

Castalia Ningyocho III

98.1

70,3690.2

100.074,1440.3

Castalia Minowa

99.0

51,7230.2

99.0

51,111

0.2

Royal Parks Umejima

100.0

103,279

0.4

100.0

103,748

0.4

Castalia Oyamadai

100.0

17,2440.1

100.0

17,3770.1

Castalia Shinsakae II

100.0

60,3080.2

100.0

60,061

0.2

Castalia Nakano

100.0

37,4760.1

97.7

37,2160.1

Castalia Sumiyoshi II

93.8

36,2820.1

97.2

36,2060.1

Castalia Yoga

94.3

33,3670.1

93.2

33,232

0.1

Residential properties – Subtotal

98.1

9,274,028

31.6

98.3

9,335,129

31.7

Castalia Sumiyoshi

96.9

33,2780.1

93.1

33,5060.1

Castalia Monzennakacho II

100.0

69,5420.2

100.0

69,3080.2

ACROSSMALL
Shinkamagaya

100.0

280,500

1.0

100.0

280,500

1.0

Castalia Oshiage

94.0

36,5580.1

100.0

37,641

0.1

FOLEO Hirakata

94.3

253,501

0.9

94.3

254,1290.9

Castalia Kuramae

100.0

43,8070.1

100.0

43,831

0.1

QiZ GATE URAWA

100.0

206,799

0.7

100.0

207,576

0.7

Castalia Nakanobu

96.2

68,2490.2

95.9

65,226

0.2

UNICUS Takasaki

100.0

129,870

0.4

100.0

129,870

0.4Royal Parks Toyosu

100.0

346,199

1.2

100.0

346,208

1.2

100.0

94,2900.3

100.0

94,2900.3

Castalia Togoshi

96.7

73,3150.2

96.7

74,507

0.3

ACROSSPLAZA Miyoshi(Land)

Castalia Ooimachi

96.9

43,8720.1

98.5

39,8500.1

DREAM TOWN ALi

99.7

349,5631.2

99.7

350,580

1.2

Castalia Omori

98.5

53,0690.2

96.9

51,615

0.2

ASOBOX (Land)

100.0

47,0820.2

100.0

47,0880.2

Castalia Mishuku

93.7

67,7490.2

97.5

68,722

0.2

FOLEO Ome Imai

100.0

132,220

0.5

100.0

128,820

0.4

Castalia Arakawa

98.4

66,8610.2

100.0

69,703

0.2

FOLEO Otsu Ichiriyama

100.0

322,774

1.1

100.0

322,620

1.1

Castalia Omori II

96.5

79,5900.3

97.1

100,787

0.3

FOLEO Hakata

100.0

127,162

0.4

100.0

127,063

0.4

Castalia Nakameguro

97.5

118,021

0.4

100.0

118,811

0.4

ACROSSMALL Semboku(Land)

100.0

90,6120.3

100.0

90,6120.3

Castalia Meguro Chojyamaru

98.6

62,9020.2

92.4

64,9420.2

iias Tsukuba

100.0

1,075,133

3.7

100.0

1,078,155

3.7

Castalia Meguro Takaban

98.4

53,641

0.2

98.4

53,2620.2

LIFE Sagamihara Wakamatsu

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Castalia Omori III

91.9

47,7330.2

96.6

47,554

0.2

FOLEO Sendai Miyanomori

100.0

239,518

0.8

100.0

239,274

0.8

Castalia Meguro Tairamachi

98.0

34,8050.1

96.7

33,7690.1

Royal Parks SEASIR

100.0

248,296

0.8

100.0

248,550

0.8

ACROSSPLAZA Inazawa(Land)

100.0

69,8400.2

100.0

69,8400.2

Castalia Honkomagome

95.9

49,4900.2

96.2

50,1850.2

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Cosmo Heim Musashikosugi

100.0

60,2080.2

100.0

60,164

0.2

Sports Depo and GOLF5
Kokurahigashi IC Store

Property nameResidential properties

Occupancy rate
(as of the end of
period)(%) (Note 1)

33rd period(From March 1, 2022 to August 31, 2022)

Retail properties

Residential properties

Asset
class

34th period(From September 1, 2022 to February 28, 2023)
Property name25

I. Asset Management Report
I. Asset Management Report

I. Asset Management Report
33rd period(From March 1, 2022 to August 31, 2022)

Hotel properties

Retail properties

Asset
class

Occupancy rate
(as of the end of
period)(%) (Note 1)

Rental revenues(during the period)(Yen inthousands)

Rate to total realestate rental
revenues(%) (Note 2)

Occupancy rate
(as of the end of
period)(%) (Note 1)

Rental revenues(during the period)(Yen inthousands)

Rate to total realestate rental
revenues(%) (Note 2)

Hiratsuka Retail Property(Land)

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Royal Home Center
Morinomiya (Land)

100.0

104,340

0.4

100.0

104,880

0.4

Aoyama Tailor Bunkyo
Sengoku Ekimae Store

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

FOLEO Shobu

100.0

157,740

0.5

100.0

157,806

0.5

Hapias Kaita (Land)

100.0

38,4000.1

100.0

38,574

0.1

COMBOX310

100.0

148,800

0.5

100.0

150,150

0.5Sports Plaza Ibaraki

100.0

83,0410.3

100.0

82,8420.3

Property nameRetail properties – Subtotal

99.8

4,238,837

14.4

99.8

4,242,324

14.4

Daiwa Roynet Hotel
Yokohama Kannai

100.0

153,782

0.5

100.0

154,204

0.5

Super Hotel JR Nara Station
Sanjo Street

100.0

46,9560.2

100.0

51,4250.2

Daiwa Roynet Hotel Nagoya
Shinkansenguchi

100.0

120,838

0.4

100.0

126,000

0.4

AMANEK Kanazawa

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Candeo Hotels Nagasaki
Shinchi Chinatown

100.0

104,227

0.4

100.0

(Note 3)(Note 3)

Other assets

Hotel properties – Subtotal(Notes) 1.
2.
3.

(7) Status of Other Assets

34th period(From September 1, 2022 to February 28, 2023)

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Urban Living Inage

100.0

39,0600.1

100.0

39,0600.1

Aburatsubo Marina HILLS

100.0

43,7490.1

100.0

43,7490.1

Naha Shin-Toshin Center
Building (Daiwa Roynet Hotel
Naha-Omoromachi)

100.0

336,337

1.1

100.0

328,109

1.1

Sharp Hiroshima Building

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)

Nursery Room Berry Bear
Omori Nishi Welcia Ota
Omori Nishi Store

100.0(Note 3)(Note 3)100.0

(Note 3)(Note 3)GRANODE Hiroshima

99.5

1,001,329

3.4

99.5

995,549

3.4

Other – Subtotal

99.7(Note 3)(Note 3)

99.7

(Note 3)(Note 3)

Total

99.7

29,368,987

100.0

99.7

29,489,738

100.0Real estate and trust beneficiary interests in real estate are all listed in “(3) Description of Portfolio” presented earlier in this report. The following
are other specified assets as of February 28, 2023.
(Yen in thousands)

Type

Issue name

Total facevalueBook value

Accruedinterest

Prepaid
Fair value
accrued interest

Valuation
gain or loss

RemarkGovernment
bonds

30-year principalstripped government
bonds(Series 27)

10,000

9,497

–

–

8,536

(961)

Deposited asbusiness security
depositTotal

10,000

9,497

–

–

8,536

(961)

(8) Holding of Assets by Country and Region
Not applicable.

“Occupancy rate (as of the end of period)” is the leased area expressed as a percentage of the leasable area of each real estate or each real estate in trust as of August 31, 2022
and February 28, 2023, rounded to the first decimal place.
“Rate to total real estate rental revenues” is the rental revenues from each real estate or each real estate in trust expressed as a percentage of total rental revenues from the entire
portfolio, rounded to the first decimal place.
Undisclosed as consent for disclosure has not been obtained from the lessee. In addition, certain subtotals (rental revenues and rate to total real estate rental revenues for “Hotelproperties – Subtotal” and “Other – Subtotal”), disclosure of which would reveal items for which the consent for disclosure has not been obtained from the lessee, are undisclosed.

(4) Description of Renewable Energy Power Generation Facilities, etc.
Not applicable.

(5) Description of Operating Rights of Public Facilities, etc.
Not applicable.

(6) Summary of Outstanding Contracted Amount and Fair Value of Specified Transactions
The following summarizes contracted amount and fair value of specified transactions of DHR as of February 28, 2023.
Category
Transaction other thanmarket transaction(Notes) 1.
2.
3.

26

Type

Contracted amount (Yen in thousands) (Note 1)
Portion due after one year

Fair value(Yen in thousands)(Note 2) (Note 3)

Interest rate swap transaction
Receipt: floating interest rate
Payment: fixed interest rate

71,400,000

61,400,000

1,298,936

Total

71,400,000

61,400,000

1,298,936“Contracted amount” is based on the notional principal amount.
“Fair value” is quoted by counterparties based on the prevailing market interest rate.
With respect to fair value amounts, the transactions for which the special treatment for interest rate swap contracts under the accounting standard for financial instruments is applied
are not carried at fair value in the balance sheets.

27

I. Asset Management Report
I. Asset Management Report

I. Asset Management Report

4. Capital Expenditures for Properties Held

(2) Capital Expenditures during the Period(1) Schedule of Capital Expenditures
The following table shows major scheduled capital expenditures for planned renovation work, etc. for owned properties (real estate, real estate intrust, etc.) as of February 28, 2023. The estimated construction cost includes the portion charged to expenses.
Property name
(Location)

PurposeScheduled period

Total amountPayment during
the period

Total amount
paid

Property name
(Location)

PurposeConstruction cost
(Yen in thousands)

PeriodD Project Kawagoe IV(Kawagoe City, Saitama)

Large-scale renovations

From May 2022
to October 2022

229,172

D Project Urayasu I(Urayasu City, Chiba)

Replacement of indoor andoutdoor fire hydrants

From May 2023
to September 2023

108,900––

Large-scale renovations

Replacement of HVAC

From December 2022
to June 2023

From October 2022
to February 2023

30,858

D Project Urayasu II(Urayasu City, Chiba)

Castalia Shin-Ochanomizu(Chiyoda Ward, Tokyo)

75,900––Large-scale renovations

Installation of HVAC

From July 2023
to October 2023

From October 2022
to February 2023

37,150

D Project Kuki II(Kuki City, Saitama)

Castalia Shintomicho III(Chuo Ward, Tokyo)

524,139––

Intercom renewal

Replacement of indoor andoutdoor fire hydrants

From May 2023
to October 2023

From February 2023
to February 2023

10,855

D Project Urayasu III(Urayasu City, Chiba)

Castalia Honjo Azumabashi(Sumida Ward, Tokyo)

119,900––

Large-scale renovations

From October 2022
to February 2023

33,092

Replacement of LED lights

From June 2023
to August 2023

Castalia Monzennakacho II(Koto Ward, Tokyo)

60,390––Intercom renewal

From February 2023
to February 2023

10,078

Formation of fire compartments

From August 2023
to March 2024

Castalia Nishi Funabashi(Funabashi City, Chiba)

737,000––

Intercom renewal

From April 2023
to August 2023

From January 2023
to February 2023

24,165

Installation of solar power
generation equipment

Castalia Sakaisuji Honmachi(Osaka City, Osaka)

308,000––

Large-scale renovations

Large-scale renovations

From March 2023
to September 2023

From August 2022
to February 2023

68,741

Castalia Ginza(Chuo Ward, Tokyo)

Castalia Tower Higobashi(Osaka City, Osaka)

69,080––Intercom renewal

Large-scale renovations

From March 2023
to September 2023

From February 2023
to February 2023

12,514

Castalia Hiroo(Minato Ward, Tokyo)

Castalia Kyoto Nishioji(Kyoto City, Kyoto)

81,267––

Castalia Higashi Nihonbashi III(Chuo Ward, Tokyo)

Intercom renewal

From January 2024
to February 2024

12,184––Large-scale renovations

From November 2022
to April 2023

45,650––

Castalia Yoga
(Setagaya Ward, Tokyo)

Large-scale renovations

From April 2023
to September 2023

44,550––

Castalia Kuramae(Taito Ward, Tokyo)

Large-scale renovations

From April 2023
to September 2023

60,610––

Castalia Meguro Chojyamaru(Shinagawa Ward, Tokyo)

Large-scale renovations

From April 2023
to August 2023

57,860––

Balance of reserves atthe beginning of period

Castalia Higashi Hie(Fukuoka City, Fukuoka)

Intercom renewal

From July 2023
to September 2023

19,140––

Amount of reserves
during period

Castalia Kotodaikoen(Sendai City, Miyagi)

Large-scale renovations

From April 2023
to August 2023

77,407––

Amount of reversal ofreserves during period

Castalia Yakuin(Fukuoka City, Fukuoka)

Intercom renewal

From July 2023
to September 2023

17,600––ACROSSMALL Shinkamagaya
From May 2023
Exterior wall painting (first phase)(Kamagaya City, Chiba)
to August 2023

92,782––FOLEO Hakata(Fukuoka City, Fukuoka)

149,677––

D Project Kaminokawa(Kawachi District, Tochigi)
DPL Nagareyama III(Nagareyama City, Chiba)

Castalia Asakusabashi(Taito Ward, Tokyo)

28

Estimated construction cost (Yen in thousands)

For owned properties (real estate, real estate in trust, etc.), an overview of major construction work conducted during the current fiscal period that
falls into DHR’s capital expenditures is as follows: Capital expenditures during the current fiscal period were ¥1,589,631 thousand together with
¥1,021,773 thousand in repairs and maintenance expenses and ¥240,089 thousand in restoration costs classified as expenses for the current
fiscal period, making a total of ¥2,851,495 thousand in construction work.

Large-scale renovations (second
phase)

From March 2023
to September 2023

(3) Cash Reserves for Long-Term Repair and Maintenance Plans
DHR sets aside the following cash reserves for repair and maintenance in order to provide for payment of funds for future maintenance of thevalue of assets and the renewal of facilities and equipment.
(Yen in thousands)

Operating period

Reserves carried forward

30th period
From
September 1, 2020
to February 28, 2021

31st period
From
March 1, 2021
to August 31, 2021

32nd period
From
September 1, 2021
to February 28, 2022

33rd period
From
March 1, 2022
to August 31, 2022

34th period
From
September 1, 2022
to February 28, 2023

1,478,435

1,492,515

1,506,595

1,520,675

1,534,755

14,08014,08014,08014,08014,080

–

–

–

–

–

1,492,515

1,506,595

1,520,675

1,534,755

1,548,835

29

I. Asset Management Report
I. Asset Management Report

I. Asset Management Report

5. Expenses and Liabilities(2) Debt Financing
The status of loans per financial institution as of February 28, 2023 is as follows:(1) Expenses Incurred in Connection with Management of Assets

Classification(Yen in thousands)

33rd period
From March 1, 2022 to August 31, 2022

34th period
From September 1, 2022 to February 28, 2023

1,921,674

1,908,944

Asset custody fees

38,33838,362Administrative service fees

94,587

94,036

Directors’ remuneration

6,660

6,660

480,327

435,118

2,541,588

2,483,121

Item
Asset management fees

Other expenses
Total

LenderSumitomo Mitsui Banking
Corporation

Borrowingdate–

Method ofrepayment

Use

Note

October 3,
2022

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

0.65%(Note 2)September
28, 2022

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

0.59%(Note 2)

December28, 2022

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

1,000,000
1,000,000–

Sumitomo Mitsui Trust Bank,
Limited1,000,000–

1,000,000–

1,000,000–

Mizuho Bank, Ltd.

1,000,000–

Sumitomo Mitsui Banking
Corporation

1,800,000–

3,200,000–

1,800,000–

Mizuho Bank, Ltd.

1,800,000–

Resona Bank, Limited

1,400,000–

500,000–

Sumitomo Mitsui Banking
Corporation

September
28, 2015

MUFG Bank, Ltd.
Sumitomo Mitsui Trust Bank,
LimitedDecember28, 2015

SBI Shinsei Bank, Limited

Current portion of long-term loans

1,000,000

Averageinterest Repayment
rate
date
(Note 1)The Norinchukin BankMUFG Bank, Ltd.

Nippon Life Insurance Company

April 10,2018

1,000,000–

0.43%(Note 3)September
9, 2022

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

Sumitomo Mitsui Trust Bank,
LimitedMarch 27,2013

2,000,000

2,000,000

1.50%(Note 2)

March 27,
2023

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

1,000,000

1,000,000

1,000,000

1,000,000
1,000,000

May 31,
2023

Bulletrepayment(Note 5)1,000,000

0.71%(Note 2)

Unsecuredand nonguaranteed

Mizuho Bank, Ltd.

1,000,000

1,000,000

Sumitomo Mitsui Banking
Corporation

1,700,000

1,700,000

MUFG Bank, Ltd.

2,700,000

2,700,000

1,700,000

1,700,000

1,700,000

1,700,000

0.41%(Note 3)

March 31,2023

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

1,500,000

1,500,000

Resona Bank, Limited

800,000

800,000

SBI Shinsei Bank, Limited

300,000

300,000

Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.
Sumitomo Mitsui Trust Bank,
LimitedSumitomo Mitsui Trust Bank,
LimitedMizuho Bank, Ltd.

November30, 2015

September
30, 2016

Aozora Bank, Ltd.

Mitsui Sumitomo Insurance
Company, Limited

March 27,2018

1,000,000

1,000,000

0.44%(Note 3)

March 31,2023

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

Nippon Life Insurance Company

September
30, 2014–

1,000,000

1.00%(Note 3)September
29, 2023

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

Development Bank of JapanInc.

January
30, 2015–

2,000,000

0.88% January 31,(Note 3)2024

Bulletrepayment(Note 6)

Unsecuredand nonguaranteed–

1,000,000–

1,000,000

0.99%(Note 2)

Bulletrepayment(Note 4)

Mizuho Bank, Ltd.

–

1,000,000

Unsecuredand nonguaranteed

Resona Bank, Limited–

1,000,000

Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
Limited30

Balance attheend ofperiod(Yen inthousands)

0.87%– (Note 2)

Mizuho Bank, Ltd.

April 1,
2015

Balance atthebeginningof period(Yen inthousands)

April 1,2015

October 2,
2023

31

I. Asset Management Report
I. Asset Management Report

LenderBorrowingdate

Mizuho Bank, Ltd.
Sumitomo Mitsui Trust Bank,
LimitedCurrent portion of long-term loans

MUFG Bank, Ltd.

March 31,2017

Mizuho Trust & Banking Co.,Ltd.
The Dai-ichi Life Insurance
Company, Limited

September
27, 2018–

4,000,000–

4,000,000––

1,000,000–

1,000,000

MUFG Bank, Ltd.

–

Sumitomo Mitsui Banking
Corporation–

Mizuho Bank, Ltd.

March 31,2020–

800,000

The Norinchukin Bank–

500,000

The Chiba Bank, Ltd.

–

500,000

SBI Shinsei Bank, Limited–

300,000

35,900,000

42,100,000

1,000,000

1,000,000

1,000,000

1,000,000

Sumitomo Mitsui Trust Bank,
Limited

500,000
500,000

500,000

Sumitomo Mitsui Banking
Corporation

500,000

500,000

500,000

500,000

MUFG Bank, Ltd.
Sumitomo Mitsui Trust Bank,
LimitedApril 1,
2014

Development Bank of JapanInc.
September
Nippon Life Insurance Company
30, 2014
Development Bank of JapanInc.

January
30, 2015

Sumitomo Mitsui Banking
Corporation

Bulletrepayment

September
29, 2023–

Bulletrepayment–

April 1,
2024

April 1,
2026

Bulletrepayment

Bulletrepayment

1,000,000

September
29, 2023

Bulletrepayment

2,000,000

0.88% January 31,–(Note 3)2024

Bulletrepayment

1,000,000–

Resona Bank, Limited

1,000,000–

Sumitomo Mitsui Banking
Corporation

1,000,000

1,000,000

1,000,000

April 1,2015

September
29, 2023

1.00%–(Note 3)

Mizuho Bank, Ltd.

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

Mizuho Bank, Ltd.

1,000,000

1,000,000

Sumitomo Mitsui Banking
Corporation

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

Mizuho Bank, Ltd.

1,000,000

1,000,000

Sumitomo Mitsui Banking
Corporation

1,500,000

1,500,000

Sumitomo Mitsui Trust Bank,
Limited

1,500,000

1,500,000

MUFG Bank, Ltd.

2,000,000

2,000,000

Mizuho Bank, Ltd.

1,500,000

1,500,000

Method ofrepayment

Use

Note

0.73%
(Note 3)September
30, 2024

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

0.97%(Note 2)

May 30,2025

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

1.09%(Note 2)

May 29,2026

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

500,000

0.63%
500,000 (Note 3)

September
29, 2025

Bulletrepayment(Note 4)

Mizuho Trust & Banking Co.,Ltd.

Unsecuredand nonguaranteed

500,000

500,000

SBI Shinsei Bank, Limited

500,000

500,000

Shinkin Central Bank

500,000

500,000

The Bank of Fukuoka, Ltd.

500,000

500,000

1,000,000

1,000,000

0.69%(Note 3)September
28, 2026

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

MUFG Bank, Ltd.

2,800,000

2,800,000

Sumitomo Mitsui Trust Bank,
Limited

1,800,000

1,800,000

1,800,000

1,800,000

1,800,000

1,800,000

0.48%(Note 3)

March 29,
2024

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

0.87%(Note 3)

November30, 2026

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

Lender(Note 5)

Nippon Life Insurance Company

Unsecuredand nonguaranteed

Sumitomo Mitsui Banking
Corporation(Note 4)

Sumitomo Mitsui Trust Bank,
LimitedUnsecuredand nonguaranteed(Note 5)–

Sumitomo Mitsui Trust Bank,
LimitedUnsecuredand nonguaranteed–

Resona Bank, Limited

500,000–

Sumitomo Mitsui Trust Bank,
Limited

–500,000

1,000,000

April 1,
2015

0.27%

500,000–

September
28, 2015

Averageinterest Repayment
rate
date
(Note 1)Note

MUFG Bank, Ltd.

2.03%
500,000 (Note 2)

1,000,000

Sumitomo Mitsui Trust Bank,
Limited0.43%(Note 3)1.52%
500,000 (Note 2)

Development Bank of JapanInc.

Borrowingdate

Balance attheend ofperiod(Yen inthousands)

MUFG Bank, Ltd.

900,000

Resona Bank, Limited

April 1,
2014

Bulletrepayment

Use

1,900,000

900,000

MUFG Bank, Ltd.

September
29, 2023

Method ofrepayment

Balance atthebeginningof period(Yen inthousands)

Classification

900,000––

Averageinterest Repayment
rate
date
(Note 1)0.57%
1,000,000 (Note 3)–

Sumitomo Mitsui Banking
Corporation

Long-term loans

Balance attheend ofperiod(Yen inthousands)

Sumitomo Mitsui Trust Bank,
LimitedSubtotal

32

Balance atthebeginningof period(Yen inthousands)

0.99%(Note 2)October 2,
2023

Bulletrepayment(Note 4)(Note 4)

Unsecuredand nonguaranteed

Unsecuredand nonguaranteed(Note 4)

Unsecuredand nonguaranteed(Note 6)

Unsecuredand nonguaranteed(Note 4)

Unsecuredand nonguaranteed

Long-term loans

Classification

I. Asset Management Report

Development Bank of JapanInc.

Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.

November30, 2015

November30, 2015

September
28, 2016

September
28, 2016

September
30, 2016

Aozora Bank, Ltd.

1,500,000

1,500,000

Resona Bank, Limited

900,000

900,000

SBI Shinsei Bank, Limited

400,000

400,000

Sumitomo Mitsui Banking
Corporation

3,000,000

3,000,000

3,000,000

3,000,000

5,000,000

5,000,000

3,000,000

3,000,000

1,000,000

1,000,000

Mizuho Bank, Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Trust Bank,
LimitedNovember29, 2016

Resona Bank, Limited

MUFG Bank, Ltd.

1,000,000

1,000,000 1.23%(Note 2)
1,000,000

Mizuho Bank, Ltd.

1,000,000

1,000,000

October 1,
2025

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

MUFG Bank, Ltd.

April 1,
2015

3,000,000

3,000,000

1.18%(Note 3)October 1,
2025

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

Development Bank of JapanInc.

April 1,2015

1,500,000

1,500,000

1.46%(Note 3)

April 1,
2027

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

Development Bank of JapanInc.

March 9,2017

2,000,000

2,000,000

0.85%(Note 3)

March 31,2027

Bulletrepayment(Note 7)

Unsecuredand nonguaranteed

Mitsui Sumitomo Insurance
Company, Limited

March 9,2017

1,000,000

1,000,000

0.55%(Note 3)

March 29,
2024

Bulletrepayment(Note 7)

Unsecuredand nonguaranteed33

I. Asset Management Report
I. Asset Management Report
Classification
LenderBorrowingdate

Mizuho Bank, Ltd.
Sumitomo Mitsui Trust Bank,
Limited4,000,000–

4,000,000–

Averageinterest Repayment
rate
date
(Note 1)

Mizuho Trust & Banking Co.,Ltd.

1,000,000–

Sumitomo Mitsui Banking
Corporation

4,000,000

4,000,000

2,500,000

2,500,000

Bulletrepayment

Borrowingdate

Balance attheend ofperiod(Yen inthousands)

Use

April 10,2018

2,000,000

2,000,000

500,000

500,000

1,500,000

1,500,000

1,000,000

1,000,000

500,000

500,000

The Norinchukin Bank

500,000

500,000

SBI Shinsei Bank, Limited

500,000

500,000

Shinkin Central Bank

500,000

500,000

500,000

500,000

1,500,000

1,500,000

Mizuho Bank, Ltd.

500,000

500,000

Aozora Bank, Ltd.

500,000

500,000

Averageinterest Repayment
rate
date
(Note 1)

Method ofrepayment

Use

Note

0.65%
(Note 3)

April 30,
2026

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

0.52%(Note 3)

April 30,
2024

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

500,000

0.60%
500,000 (Note 3)

April 30,
2025

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

Resona Bank, Limited

500,000

500,000

SBI Shinsei Bank, Limited

500,000

500,000

Shinkin Central Bank

500,000

500,000

3,000,000

3,000,000

3,000,000

3,000,000

April 28,
2028

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

Note
Lender(Note 5)Development Bank of JapanInc.

Unsecuredand nonguaranteed

Sumitomo Mitsui Trust Bank,
LimitedSumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.

1,500,000

1,500,000

Resona Bank, Limited

1,000,000

1,000,000

Sumitomo Mitsui Banking
Corporation

1,800,000

1,800,000

Sumitomo Mitsui Trust Bank,
Limited

MUFG Bank, Ltd.

2,200,000

2,200,000

Mizuho Bank, Ltd.

1,200,000

1,200,000

Sumitomo Mitsui Banking
Corporation

1,100,000

1,100,000

SBI Shinsei Bank, Limited

1,000,000

1,000,000

The Bank of Fukuoka, Ltd.

1,000,000

1,000,000

Sumitomo Mitsui Trust Bank,
Limited

700,000

700,000

Sumitomo Mitsui Banking
Corporation

2,100,000

2,100,000

MUFG Bank, Ltd.

3,700,000

3,700,000

1,800,000

1,800,000

Mizuho Trust & Banking Co.,
Ltd.

Sumitomo Mitsui Trust Bank,
LimitedApril 11,2017

Mizuho Bank, Ltd.

1,800,000
600,000

600,000

Sumitomo Mitsui Trust Bank,
Limited

3,400,000

3,400,000

3,400,000

July 31,2017

April 28,
2028

Bulletrepayment

Bulletrepayment(Note 4)(Note 4)1,800,000

Mizuho Trust & Banking Co.,
Ltd.

Sumitomo Mitsui Banking
Corporation

1.02%(Note 3)

April 30,2026

(Note 5)

Unsecuredand nonguaranteed

Unsecuredand nonguaranteed

The Norinchukin Bank

Long-term loans

1,000,000

0.76%
1,000,000 (Note 3)

Bulletrepayment

Aozora Bank, Ltd.

MUFG Bank, Ltd.

April 11,2017

March 31,2025

Unsecuredand nonguaranteed

2,000,000

Resona Bank, Limited

March 31,2017

September
29, 2023

Method ofrepayment

Balance atthebeginningof period(Yen inthousands)

Classification

0.70%
2,000,000 (Note 3)

Shinkin Central Bank

Long-term loans

Balance attheend ofperiod(Yen inthousands)

1,000,000

Aozora Bank, Ltd.

Sumitomo Mitsui Banking
Corporation
Mizuho Bank, Ltd.

September
29, 2023

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

September
27, 2018

1,000,000

1,000,000

0.60%(Note 3)September
30, 2025

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

1,100,000

1,100,000

1,100,000

1,100,000

1,100,000

1,100,000

0.88%(Note 3)

December29, 2028

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

1,100,000

1,100,000

600,000

600,000

Sumitomo Mitsui Trust Bank,
Limited

2,200,000

2,200,000

Aozora Bank, Ltd.

1,500,000

1,500,000

The Norinchukin Bank

1,100,000

1,100,000

700,000

700,000

0.43%(Note 3)September
30, 2025

Bulletrepayment(Note 5)The Chiba Bank, Ltd.

600,000

600,000

Unsecuredand nonguaranteed

Mizuho Bank, Ltd.

500,000

500,000

The Bank of Fukuoka, Ltd.

500,000

500,000

The Shizuoka Bank, Ltd.

500,000

500,000

2,500,000

MUFG Bank, Ltd.

2,000,000

2,000,000

Sumitomo Mitsui Banking
Corporation

Development Bank of JapanInc.

3,000,000

3,000,000

Sumitomo Mitsui Trust Bank,
LimitedSumitomo Mitsui Trust Bank,
Limited

2,500,000

2,500,000

Japan Post Insurance Co., Ltd.

The Nishi-Nippon City Bank,
Ltd.

1,000,000

1,000,000

The Iyo Bank, Ltd.

500,000

500,000

The Bank of Kyoto, Ltd.

500,000

500,000

The Chugoku Bank, Limited

500,000

500,000

MUFG Bank, Ltd.

March 27,2018

1,500,000

0.75%
1,500,000(Note 3)

Mizuho Bank, Ltd.
(Note 5)

Unsecuredand nonguaranteed

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

December
7, 2018

MUFG Bank, Ltd.

Sumitomo Mitsui Banking
Corporation
September
30, 2027

500,000
0.43%(Note 3)2,500,000

Bulletrepayment

500,000–

Sumitomo Mitsui Banking
Corporation

November30, 2027

1,000,000

1,000,000

Taiyo Life Insurance Company(Note 5)1,000,000

September
27, 2018

1,900,000

1,000,000

Bulletrepayment

2,500,000

0.89%
2,500,000 (Note 3)

The Dai-ichi Life Insurance
Company, Limited

1,900,000

The 77 Bank, Ltd.

July 30,
2027

Unsecuredand nonguaranteed

3,400,000

2,500,000

April 10,
2018

Resona Bank, Limited

MUFG Bank, Ltd.

0.90%
2,500,000 (Note 3)
1,000,000

April 10,2018

Mizuho Trust & Banking Co.,Ltd.

Mizuho Bank, Ltd.

November29, 2017

April 10,2018

Sumitomo Mitsui Trust Bank,
Limited

3,400,000 0.89%(Note 3)3,400,000

Mizuho Bank, Ltd.

34

Balance atthebeginningof period(Yen inthousands)

0.57%– (Note 3)

MUFG Bank, Ltd.

March 31,2017

I. Asset Management Report

March 29,
2019

35

I. Asset Management Report
I. Asset Management Report

Borrowingdate

Balance atthebeginningof period(Yen inthousands)

Balance attheend ofperiod(Yen inthousands)

Mitsui Sumitomo Insurance
Company, Limited

April 5,2019

1,000,000

1,000,000

Nippon Life Insurance Company

April 5,
2019Classification
LenderDevelopment Bank of JapanInc.

1,500,000

Method ofrepayment

Use

0.45%
(Note 3)

April 30,
2026

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

0.50%
500,000(Note 3)

April 30,
2027

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed(Note 4)

Unsecuredand nonguaranteed

1,500,000

0.59%(Note 3)

April 28,
2028

Bulletrepayment

Borrowing
date

Note
LenderSumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
LimitedMizuho Trust & Banking Co.,Ltd.

1,200,000
900,000

900,000–

1,900,000–

900,000–

900,000–

Resona Bank, Limited

800,000–

The Norinchukin Bank

500,000–

The Chiba Bank, Ltd.

500,000–

300,000–

1,000,000

1,000,000

500,000

500,000

1,100,000

MUFG Bank, Ltd.

1,000,000

1,000,000

Sumitomo Mitsui Banking
Corporation

SBI Shinsei Bank, Limited

1,000,000

1,000,000

Mizuho Bank, Ltd.

Shinkin Central Bank

1,000,000

1,000,000

500,000

0.39% October 31,
500,000 (Note 3)
2024

The Chiba Bank, Ltd.

500,000

500,000

The 77 Bank, Ltd.

500,000

500,000

SBI Shinsei Bank, Limited

The Nishi-Nippon City Bank,
Ltd.

500,000

500,000

The Iyo Bank, Ltd.

500,000

500,000

Mitsui SumitomoCompany, Limited

The Chugoku Bank, Limited

500,000

500,000

Sumitomo Mitsui Banking
Corporation

2,500,000

2,500,000

Mizuho Bank, Ltd.

2,700,000

2,700,000

2,500,000

2,500,000

1,000,000

1,000,000

1,000,000

1,000,000

Resona Bank, Limited

April 10,2019

Mizuho Trust & Banking Co.,Ltd.
MUFG Bank, Ltd.
Sumitomo Mitsui Banking
Corporation
Sumitomo Mitsui Trust Bank,
Limited

700,000

2,000,000

2,000,000

2,000,000

2,000,000

April 27,2029

2,000,000

Mizuho Bank, Ltd.

2,000,000

2,000,000

Development Bank of JapanInc.

2,000,000

2,000,000

1,500,000

0.59% January 31,
1,500,000(Note 3)2029

Sumitomo Mitsui Banking
Corporation

1,000,000

1,000,000

Aozora Bank, Ltd.

2,400,000

2,400,000

Sumitomo Mitsui Trust Bank,
Limited1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

Mizuho Trust & Banking Co.,Ltd.

500,000

500,000

The Yamaguchi Bank, Ltd.

500,000

Development Bank of JapanInc.

MUFG Bank, Ltd.
Mizuho Bank, Ltd.
The Norinchukin Bank

January
31, 2020

January
31, 2020

500,000

April 1,
2020

The Norinchukin Bank

0.66%
2,000,000 (Note 2)

MUFG Bank, Ltd.

November29, 2019

700,000

Insurance

March 31,2020

Sumitomo Mitsui Trust Bank,
Limited0.75%(Note 2)

November30, 2029

Bulletrepayment

Bulletrepayment

Bulletrepayment(Note 4)(Note 5)(Note 5)

Unsecuredand nonguaranteed

Unsecuredand nonguaranteed

Unsecuredand nonguaranteed

1,000,000

1,000,000

The 77 Bank, Ltd.

700,000

700,000

The Chugoku Bank, Limited

700,000

700,000

Nippon Life Insurance Company

600,000

600,000

500,000

500,000

MUFG Bank, Ltd.

500,000

500,000

Mizuho Bank, Ltd.

500,000

500,000

The Chiba Bank, Ltd.

500,000

500,000

The Iyo Bank, Ltd.

500,000

500,000

Sumitomo Mitsui Banking
Corporation

April 3,2020

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

Method ofrepayment

Use

Note

0.61% January 31,(Note 2)2030

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

0.27%

September
29, 2023

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

0.40%(Note 3)

April 30,
2026

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

0.35% October 31,(Note 3)2024

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

April 3,2020

500,000

500,000

0.40%(Note 3)

March 31,2026

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

Mitsui Sumitomo Insurance
Company, Limited

April 3,2020

500,000

500,000

0.41%(Note 3)September
30, 2026

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

Development Bank of JapanInc.

April 3,2020

1,000,000

1,000,000

0.51%(Note 3)September
29, 2028

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

500,000

500,000

1,000,000

1,000,000

500,000

500,000

500,000

500,000

500,000

0.51%
500,000 (Note 2)

April 27,
2029

Bulletrepayment(Note 4)

SBI Shinsei Bank, Limited

500,000

500,000

Unsecuredand nonguaranteed

Shinkin Central Bank

500,000

500,000

The Bank of Fukuoka, Ltd.

500,000

500,000

The Nishi-Nippon City Bank,
Ltd.

500,000

500,000

Sumitomo Mitsui Trust Bank,
LimitedSumitomo Mitsui Banking
Corporation

July 30,
2027

Averageinterest Repayment
rate
date
(Note 1)

The Dai-ichi Life Insurance
Company, Limited

Resona Bank, Limited

0.46%(Note 3)3,400,000

900,000

1,100,000

Sumitomo Mitsui Trust Bank,
Limited

3,400,000

1,200,000

Sumitomo Mitsui Trust Bank,
LimitedUnsecuredand nonguaranteed

2,200,000

Mizuho Bank, Ltd.

The Norinchukin Bank

(Note 4)2,200,000

MUFG Bank, Ltd.

1,000,000

Bulletrepayment

Balance attheend ofperiod(Yen inthousands)

1,300,000

1,000,000

April 10,2019

January
31, 2020

Balance atthebeginningof period(Yen inthousands)

1,300,000

Sumitomo Mitsui Banking
Corporation

Long-term loans

Long-term loans

April 5,2019

500,000

Classification

Averageinterest Repayment
rate
date
(Note 1)

Sumitomo Mitsui Trust Bank,
LimitedThe Bank of Fukuoka, Ltd.

36

I. Asset Management Report

MUFG Bank, Ltd.
Mizuho Bank, Ltd.

April 3,
2020

37

I. Asset Management Report
I. Asset Management Report
Balance atthebeginningof period(Yen inthousands)

Balance attheend ofperiod(Yen inthousands)

MUFG Bank, Ltd.

2,000,000

2,000,000

Sumitomo Mitsui Trust Bank,
Limited2,000,000

2,000,000

Sumitomo Mitsui Banking
Corporation

2,000,000

2,000,000

2,000,000

2,000,000

LenderMizuho Bank, Ltd.
Mizuho Trust & Banking Co.,Ltd.

Borrowing
date

April 3,2020

1,000,000

1,000,000

The Bank of Kyoto, Ltd.

500,000

500,000

The Yamanashi Chuo Bank,
Ltd.

500,000

500,000

The Dai-ichi Life Insurance
Company, Limited

September
30, 2020

SBI Shinsei Bank, Limited

September
30, 2020

The Norinchukin Bank

January29, 2021

Sumitomo Mitsui Banking
Corporation

Long-term loans

Sumitomo Mitsui Trust Bank,
Limited0.62%(Note 2)

1,000,000

1,000,000

0.46%(Note 3)September
30, 2027

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed(Note 5)

Unsecuredand nonguaranteed

3,500,000

0.37% January 31,
3,500,000(Note 3)2028

1,200,000

600,000

600,000

600,000
600,000

0.28%
600,000 (Note 3)
600,000

The Norinchukin Bank

1,500,000

1,500,000

Nippon Life Insurance Company

1,000,000

1,000,000

Sumitomo Mitsui Banking
Corporation

1,000,000

1,000,000

Sumitomo Mitsui Trust Bank,
Limited1,000,000

MUFG Bank, Ltd.

1,000,000

1,000,000

Mizuho Bank, Ltd.

1,000,000

1,000,000

1,000,000

1,000,000

1,000,000

0.56%
1,000,000 (Note 3)

SBI Shinsei Bank, Limited

1,000,000

1,000,000

The Yamanashi Chuo Bank,
Ltd.

1,000,000

1,000,000

Kansai Mirai Bank, Limited

1,000,000

1,000,000

Shinkin Central Bank

500,000

500,000

The Bank of Kyoto, Ltd.

500,000

500,000

The Yamaguchi Bank, Ltd.

500,000

500,000

The Dai-ichi Life Insurance
Company, Limited

September
3, 20211,000,000

Bulletrepayment

April 1,
2031

September
30, 2026

Bulletrepayment

Bulletrepayment(Note 5)(Note 5)

Unsecuredand nonguaranteed

Unsecuredand nonguaranteed

1,000,000(Note 4)

August 31,
2033

Bulletrepayment(Note 4)(Note 4)

Unsecuredand nonguaranteed

0.37%(Note 3)September
29, 2028

Bulletrepayment(Note 4)

Unsecuredand nonguaranteed

0.45%(Note 3)

May 31,
2029

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

0.42%(Note 3)

July 31,2028

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

0.90%
1,000,000 (Note 3)

March 31,2032

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed

500,000

MUFG Bank, Ltd.

1,000,000

1,000,000

Mizuho Bank, Ltd.

1,000,000

1,000,000

The Norinchukin Bank

1,500,000

1,500,000

Sumitomo Mitsui Trust Bank,
Limited1,000,000

1,000,000

1,000,000

1,000,000

October 1,
2021

500,000

1,000,000

1,000,000

Aozora Bank, Ltd.

1,000,000

1,000,000

Resona Bank, Limited

1,000,000

1,000,000

The Nishi-Nippon City Bank,
Ltd.

1,000,000

1,000,000

The Keiyo Bank, Ltd.

1,000,000

1,000,000

Sumitomo Mitsui Banking
Corporation

1,000,000

1,000,000

1,000,000

1,000,000

Sumitomo Mitsui Trust Bank,
Limited
MUFG Bank, Ltd.

November30, 2021

3,000,000

3,000,000

Mizuho Bank, Ltd.

1,000,000

1,000,000

Resona Bank, Limited

1,000,000

1,000,000

900,000

900,000

1,600,000

1,600,000

1,550,000

1,550,000

1,100,000

1,100,000

Sumitomo Mitsui Banking
Corporation

January
31, 2022

700,000

700,000

MUFG Bank, Ltd.

500,000

500,000

Mizuho Trust & Banking Co.,Ltd.

400,000

400,000

The Chiba Bank, Ltd.

100,000

100,000

1,000,000

1,000,000

1,000,000

1,000,000

Sumitomo Mitsui Banking
Corporation
MUFG Bank, Ltd.

April 1,2022

1,000,000

Sumitomo Mitsui Trust Bank,
Limited

500,000

500,000

Sumitomo Mitsui Trust Bank,
Limited

1,950,000

1,950,000

1,300,000

1,300,000

Sumitomo Mitsui Banking
Corporation
0.80%(Note 3)

Bulletrepayment

500,000

Mizuho Bank, Ltd.

Unsecuredand nonguaranteed

March 31,2026

500,000

Mizuho Bank, Ltd.

Unsecuredand nonguaranteed

500,000

Note

500,000

Aozora Bank, Ltd.

Bulletrepayment

500,000

Use

The 77 Bank, Ltd.

Sumitomo Mitsui Trust Bank,
LimitedAugust 29,
2031

500,000

Method ofrepayment

500,000

The Norinchukin Bank

1,000,000

500,000

Averageinterest Repayment
rate
date
(Note 1)The Chiba Bank, Ltd.

Development Bank of Japan
Inc.

October 1,
2021

Balance attheend ofperiod(Yen inthousands)

Mizuho Bank, Ltd.

Sumitomo Mitsui Banking
Corporation

500,000

1,200,000

500,000

Borrowingdate

Balance atthebeginningof period(Yen inthousands)

0.28%
500,000 (Note 3)
500,000

MUFG Bank, Ltd.

Unsecuredand nonguaranteed(Note 4)

Sumitomo Mitsui Banking
Corporation

Mizuho Trust & Banking Co.,
Ltd.

(Note 4)1,000,000

1,000,000

September
3, 2021

Bulletrepayment

Unsecuredand nonguaranteed

1,000,000

Development Bank of JapanInc.

April 30,
2030

Bulletrepayment

1,000,000

MUFG Bank, Ltd.

LenderMarch 31,2026

Mizuho Bank, Ltd.

Mizuho Bank, Ltd.

Note

Sumitomo Mitsui Banking
Corporation

MUFG Bank, Ltd.

April 30,
2021

Use

Sumitomo Mitsui Trust Bank,
Limited

500,000 0.70%(Note 3)1,000,000

Sumitomo Mitsui Trust Bank,
Limited

Method ofrepayment

Classification

0.44%
1,000,000(Note 3)500,000
April 1,
2021

Averageinterest Repayment
rate
date
(Note 1)Long-term loans

Classification

38

I. Asset Management Report

Mizuho Bank, Ltd.

1,150,000

0.80% October 31,
1,600,000 (Note 3)2030
1,150,000

Aozora Bank, Ltd.

1,100,000

1,100,000

MUFG Bank, Ltd.

1,050,000

1,050,000

The Norinchukin Bank

April 28,2022

1,600,000

39

I. Asset Management Report
I. Asset Management Report
Balance atthebeginningof period(Yen inthousands)

Balance attheend ofperiod(Yen inthousands)

Mizuho Trust & Banking Co.,Ltd.

500,000

500,000

Nippon Life Insurance Company

500,000

500,000

Development Bank of JapanInc.

400,000

400,000

The Shizuoka Bank, Ltd.

250,000

250,000

The Chiba Bank, Ltd.

200,000

200,000

Sumitomo Mitsui Trust Bank,
Limited1,000,000

1,000,000

Sumitomo Mitsui Banking
Corporation

1,000,000

1,000,000

Mizuho Bank, Ltd.

500,000

500,000

The Shizuoka Bank, Ltd.

500,000

500,000

The Chiba Bank, Ltd.

500,000

500,000

500,000

500,000

500,000

500,000

The 77 Bank, Ltd.

500,000

500,000

The Chugoku Bank, Limited

500,000

500,000

The Iyo Bank, Ltd.

500,000

500,000

The Yamaguchi Bank, Ltd.

250,000

250,000

The Keiyo Bank, Ltd.

250,000

250,000

Classification
LenderThe Bank of Fukuoka, Ltd.

Long-term loans

The Nishi-Nippon City Bank,
Ltd.

Borrowing
date

April 28,
2022

Averageinterest Repayment
rate
date
(Note 1)0.75%
(Note 3)

April 30,2030

September
Nippon Life Insurance Company
9, 2022–

0.51% January 29,
1,000,000(Note 3)2027

Sumitomo Mitsui Trust Bank,
Limited–1,000,000–

1,000,000

MUFG Bank, Ltd.

–

1,000,000

Mizuho Bank, Ltd.

–

1,000,000

Sumitomo Mitsui Banking
Corporation–

1,000,000

Sumitomo Mitsui Banking
Corporation

September
28, 2022

October 3,
2022

0.96%
(Note 3)–0.87%
1,000,000 (Note 3)

The Norinchukin Bank–

1,000,000

Sumitomo Mitsui Banking
Corporation–

1,300,000–

2,700,000–

1,400,000–

1,300,000

Mizuho Bank, Ltd.

–1,300,000

SBI Shinsei Bank, Limited–

500,000

Mizuho Bank, Ltd.

MUFG Bank, Ltd.
Resona Bank, Limited
Sumitomo Mitsui Trust Bank,
Limited(Notes) 1.
2.
3.
4.
5.
6.
7.

40

I. Asset Management Report

December28, 2022

1.26%(Note 3)September
30, 2031

September
30, 2030

December26, 2031(3) Investment Corporation Bonds
Method ofrepayment

Use

Note

The status of investment corporation bonds issued as of February 28, 2023 is as follows:
Balance atBalance at thethe beginning
Issue dateend of periodof period(Yen in thousands)(Yen in thousands)

Interest
rate

Maturity

Method ofredemption

Daiwa House REIT
Investment Corporation
1st Unsecured Investment
Corporation Bonds (Note 1)

December24, 2014

2,000,000

2,000,000

0.826%

December24, 2024

Bullet(Note 2) Unsecured
repayment

Daiwa House Residential
Investment Corporation
3rd Unsecured Investment
Corporation Bonds (Note 1)

January
22, 2015

3,000,000

3,000,000

0.67%

January
22, 2025

Bullet(Note 3) Unsecured
repayment

Daiwa House REIT
Investment Corporation
6th Unsecured Investment
Corporation Bonds (Note 1)

December20, 2016

4,000,000

4,000,000

0.57%

December18, 2026

Bullet(Note 2) Unsecured
repayment

Daiwa House REIT
Investment Corporation
7th Unsecured Investment
Corporation Bonds (Note 1)

July 30,2018

2,000,000

2,000,000

0.69%

July 30,
2030

Bullet(Note 2) Unsecured
repayment

Daiwa House REIT
Investment Corporation
8th Unsecured Investment
Corporation Bonds (Note 1)

July 30,2018

1,000,000

1,000,000

1.03%

July 30,
2038

Bullet(Note 2) Unsecured
repayment

Daiwa House REIT
Investment Corporation
9th Unsecured Investment
Corporation Bonds (Note 1)(Green Bonds)

November25, 2019

6,000,000

6,000,000

0.53%

November22, 2029

Bullet(Note 4) Unsecured
repayment

Daiwa House REIT
Investment Corporation
10th Unsecured Investment
Corporation Bonds (Note 1)(Green Bonds)

May 27,2020

2,400,000

2,400,000

0.34%

May 27,2025

Bullet(Note 4) Unsecured
repayment

Daiwa House REIT
Investment Corporation
11th Unsecured Investment
Corporation Bonds (Note 1)(Green Bonds)

May 27,2020

1,600,000

1,600,000

0.64%

May 27,2030

Bullet(Note 4) Unsecured
repayment

Daiwa House REIT
Investment Corporation
12th Unsecured Investment
Corporation Bonds (Note 1)(Green Bonds)

May 27,2020

1,000,000

1,000,000

1.00%

May 25,2040

Bullet(Note 4) Unsecured
repayment

Daiwa House REIT
Investment Corporation
13th Unsecured Investment
Corporation Bonds (Note 1)

December24, 2020

3,000,000

3,000,000

0.60%

December24, 2032

Bullet(Note 5) Unsecured
repayment

Daiwa House REIT
Investment Corporation
14th Unsecured Investment
Corporation Bonds (Note 1)(Green Bonds)

April 15,2021

4,000,000

4,000,000

0.50%

April 15,2031

Bullet(Note 4) Unsecured
repayment

Daiwa House REIT
Investment Corporation
15th Unsecured Investment
Corporation Bonds (Note 1)(Sustainability Bonds)

November17, 2021

3,000,000

3,000,000

0.40%

November17, 2031

Bullet(Note 6) Unsecured
repayment

Daiwa House REIT
Investment Corporation
16th Unsecured Investment
Corporation Bonds (Note 1)(Sustainability Bonds)

November17, 2021

1,000,000

1,000,000

0.66%

November17, 2036

Bullet(Note 6) Unsecured
repayment

Daiwa House REIT
Investment Corporation
17th Unsecured Investment
Corporation Bonds (Note 1)

December16, 2021

4,000,000

4,000,000

0.24%

December16, 2027

Bullet(Note 5) Unsecured
repayment

Issue name

Bulletrepayment

Bulletrepayment

Bulletrepayment

Bulletrepayment

Bulletrepayment(Note 5)

Unsecuredand nonguaranteed(Note 5)

Unsecuredand nonguaranteed(Note 5)

Unsecuredand nonguaranteed(Note 5)(Note 5)

Unsecuredand nonguaranteedUnsecuredand nonguaranteedSubtotal–

329,650,000 321,450,000

–

–

–

–

–

Total

–

365,550,000 363,550,000

–

–

–

–

–

Average interest rate is the loan interest rate (weighted average during the applicable term) of the corresponding lenders, and is rounded to the second decimal place.
DHR currently uses interest rate swaps to hedge interest rate fluctuation risk; accordingly, the indicated interest rates are the figures reflecting the effect of the interest rate swaps.
This loan carries a fixed interest rate.
To be used to purchase trust beneficiary interests in real estate and related expenses.
To be used for repayment of existing loans (refinancing fund).
To be used for redemption of rehabilitation obligations (investment corporation bonds) and repayment of rehabilitation obligations (loans).
To be used for redemption of investment corporation bonds.

Use

Note

41

I. Asset Management Report
I. Asset Management Report

Issue name

Issue date

Daiwa House REIT
Investment Corporation
18th Unsecured Investment
Corporation Bonds (Note 1)(Sustainability-Linked
Bonds) (Note 7)

May 25,2022

Daiwa House REIT
Investment Corporation
19th Unsecured Investment
Corporation Bonds (Note 1)

December19, 2022

Total–(Notes) 1.
2.
3.
4.
5.
6.
7.
8.

I. Asset Management Report

Balance atBalance at thethe beginningend of periodof period(Yen in thousands)(Yen in thousands)

4,000,000

4,000,000

Interest
rate

Maturity

0.575%(Note 8)May 25,2029

Method ofredemption(4) Transactions with Interested Parties, etc.
Use

Note

i)

Status of Transactions

Not applicable for purchase and sale transactions, etc. with interested parties, etc. (Note) for the 34th period.

Bullet(Note 2) Unsecured
repaymentii)

Amount of Fees Paid
Classification–

2,000,000

0.77%

June 18,2032

42,000,000

44,000,000––

Total amount paid (A)(Yen in thousands)

Bullet(Note 2) Unsecured
repayment–––

The bonds have pari passu conditions among specified investment corporation bonds.
To be used for repayment of existing loans.
To be used for redemption of rehabilitation obligations (investment corporation bonds) and repayment of rehabilitation obligations (loans).
To be used for a part of the funds for the repayment of existing loans associated with “eligible green assets.”
To be used for redemption of investment corporation bonds.
To be used for a part of the funds for the repayment of existing loans associated with “eligible sustainability assets.”
A sustainability-linked bond is a bond whose terms vary depending on whether or not it meets a pre-defined Sustainability Performance Target (SPT).
The interest rate (per annum) from the following day of May 25, 2022 to May 25, 2023 is 0.575%. From the day after May 25, 2023 onward, the interest rate, which is determinedannually depending on the achieved level of the SPT on each reference date, will be applied.

Management fees

Repairs andmaintenance expenses

1,493,274

1,021,773(4) Short-Term Investment Corporation Bonds
Not applicable.

Restoration costs

240,089(5) Unit Acquisition Rights
Not applicable.

6. Status of Acquisition and Disposition during the Period(1) Status of Acquisition and Disposition of Properties and Asset-Backed Securities,
Infrastructure Assets, and Infrastructure Related Asset
Not applicable.

(2) Transaction of Other Assets
Not applicable. Other assets are mostly bank deposits or bank deposits in trust assets.

(3) Review on Value of Specified Assets

Other rental expenses(Note)

168,814

Breakdown of transactions with interested parties, etc. (Note)
Payment recipient

Amount paid (B)(Yen in thousands)

Rate to total amount
paid (B/A) (%)

Daiwa Living Co., Ltd.

541,01036.2

Daiwa House Realty Mgt. Co., Ltd.

334,530

22.4

Daiwa House Property Management Co., Ltd.

281,488

18.9

Daiwa LifeNext Co., Ltd.

34,995

2.3

Daiwa Lease Co., Ltd.

3,332

0.2

Daiwa Living Co., Ltd.

519,661

50.9

Daiwa House Property Management Co., Ltd.

163,232

16.0

Daiwa House Realty Mgt. Co., Ltd.

153,439

15.0

Daiwa LifeNext Co., Ltd.

9,340

0.9

Daiwa Lease Co., Ltd.

3,843

0.4

Daiwa Living Co., Ltd.

165,768

69.0

Daiwa House Realty Mgt. Co., Ltd.

9,400

3.9

Daiwa Living Co., Ltd.

82,632

48.9

Daiwa House Property Management Co., Ltd.

25,554

15.1

Daiwa House Realty Mgt. Co., Ltd.

14,787

8.8

Daiwa LifeNext Co., Ltd.

66

0.0

Daiwa Lease Co., Ltd.

15

0.0

“Interested parties, etc.” are interested parties, etc., of the Asset Manager with which DHR has concluded an asset management agreement as provided in Article 201, paragraph 1 ofthe Investment Trust Act, Article 123 of the Order for Enforcement of the Investment Trust Act, Article 244-3 of Regulation for Enforcement of Investment Trust Act and Article 26, Item
27 of The Investment Trusts Association, Japan’s Rules on Management Reports, etc., of Investment Trusts and Investment Corporations.

(5) Status of Transactions with Asset Manager Pertaining to Business Operated by AssetManager as Subsidiary BusinessNot applicable because the Asset Manager does not engage in any business as a subsidiary business that is a type I financial instruments business,
type II financial instruments business, real estate brokerage or real estate specified joint enterprise.

Not applicable.

4243

I. Asset Management Report
I. Asset Management Report

7. Accounting(1) Status of Assets, Liabilities, Principal and Income/Loss
Please refer to “Balance Sheets,” “Statements of Income and Retained Earnings,” “Statements of Changes in Net Assets,” “Notes to Financial
Statements” and “Distribution Information.”
Previous fiscal period information in the Balance Sheets, Statements of Income and Retained Earnings, Statements of Changes in Net Assets,
Notes to Financial Statements and Distribution Information is for reference only and is not subject to audit by the Accounting Auditor under Article
130 of the Investment Trust Act for the current fiscal period.
Also, since the Statements of Cash Flows are not subject to audit by an independent auditor under Article 130 of the Investment Trust Act, they
are not audited by the Accounting Auditor.

(2) Changes in Method to Calculate Depreciation Expenses
Not applicable.

(3) Changes in Method to Evaluate Properties and Infrastructure Assets
Not applicable.

(4) Status of Beneficiary Certificates of Investment Trust Established by DHR
Not applicable.

(5) Disclosure relating to Overseas Real Estate Holding Corporation and Real Estate Held by such
Corporation
Not applicable.

8. Other(1) Notice
The overview of conclusions and changes, etc., of major contracts approved by DHR’s board of directors during the current fiscal period is asfollows:
Date of the Board of
Directors meeting

November 25, 2022

Item

Conclusion of underwriting
agreement for investment
corporation bond issuance,etc.

Description
In line with a comprehensive resolution on the issuance of investment corporation
bonds approved on the same day, DHR resolved that the selection of an
administrator of the investment corporation bonds to be issued in the future would beat the discretion of the Executive Director. Based on this resolution, DHR entrusted
SMBC Nikko Securities Inc. with the relevant work for soliciting subscribers forinvestment corporation bonds, and entrusted Resona Bank, Limited with issuanceagent work, payment agent work, etc.

(2) Treatment of Fractions in Amounts and Rates
Unless otherwise specified, amounts less than the units indicated are truncated, while values of ratio are rounded up or down to the nearest valueof the last digit in this report.

44

45

II. Balance Sheets
Daiwa House REIT Investment Corporation

Daiwa House REIT Investment Corporation

As of August 31, 2022 and February 28, 2023

As of August 31, 2022 and February 28, 2023

BALANCE SHEETSBALANCE SHEETS

As of

As of
August 31, 2022

(Yen in thousands)
AssetsCurrent assets:
Cash and bank deposits (Note 3)
Operating accounts receivable
Prepaid expenses
Other current assets
Allowance for doubtful accounts
Total current assets¥50,030,174
314,491
731,649
4,087(2,035)51,078,366¥53,464,475
281,261
729,739
11,372(1,454)54,485,394

Investment properties (Notes 8 and 9)845,032,844

840,813,493

Other assets:
Goodwill (Note 7)
Leasehold rights in trust (Note 9)
Lease and guarantee deposits in trust
Guarantee deposits
Long-term prepaid expenses
Investment corporation bond issuance costs
Investment securities (Notes 4 and 5)
Trademark rights
Total other assets

55,502,344
5,782,810
3,547,353
99
2,403,601
209,2129,480
161
67,455,063¥963,566,274

Total assets

August 31, 2022

February 28, 2023

53,520,117
5,735,397
3,547,353
99
2,302,615
207,624
9,497
144
65,322,850¥960,621,737(Yen in thousands)

Liabilities
Current liabilities:
Operating accounts and other payable
Current portion of long-term loans (Notes 4, 6 and 16)
Accrued expenses
Accrued consumption taxes
Advances received
Unearned revenue
Deposits received
Derivative liabilities (Notes 4 and 6)
Other
Total current liabilities¥1,831,564
35,900,000
1,818,619
1,549,216
3,628,679
132,825
173,587
23,35067,52045,125,362¥1,937,580
42,100,000
1,810,661
484,068
3,644,153
108,530
166,337
16,67867,52050,335,530

Non-current liabilities:
Investment corporation bonds (Notes 4 and 15)
Long-term loans (Notes 4, 6 and 16)
Long-term unearned revenue
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Asset retirement obligations (Note 12)
Derivative liabilities (Notes 4 and 6)
Total non-current liabilities
Total liabilities

42,000,000
329,650,000
175,991
330,939
23,539,868
677,259
246,460
396,620,519
441,745,882

44,000,000
321,450,000
127,789332,205
23,526,583
683,696
116,006
390,236,281
440,571,812

Net assets (Notes 13 and 14)
Unitholders’ equity:
Unitholders’ capital

268,042,601

268,042,601

247,667,563

247,667,563(5,039,524)―(5,039,524)
242,628,039
11,419,562
254,047,602
522,090,203(6,879,284)(44,080)(6,923,364)
240,744,199
11,395,808
252,140,008
520,182,609(269,810)(269,810)
521,820,392¥963,566,274(132,684)(132,684)
520,049,925¥960,621,737

Units authorized:
8,000,000 units as of August 31, 2022 and February 28, 2023
Units issued and outstanding:
2,320,000 units as of August 31, 2022 and February 28, 2023

SurplusCapital surplus
Deductions from capital surplus:
Allowance for temporary difference adjustments
Other deductions from capital surplus
Total deductions from capital surplus
Capital surplus, net
Unappropriated retained earnings
Total surplus
Total unitholders’ equity
Valuation and translation adjustments
Deferred gains or losses on hedges (Note 6)
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets
The accompanying notes are an integral part of these financial statements.

1

46

February 28, 2023

2

47

III. Statements of Income and Retained Earnings

IV. Statements of Changes in Net Assets

Daiwa House REIT Investment Corporation

Daiwa House REIT Investment Corporation

STATEMENTS OF INCOME AND RETAINED EARNINGSSTATEMENTS OF CHANGES IN NET ASSETSFor the fiscal periods ended August 31, 2022 and February 28, 2023

For the fiscal periods ended August 31, 2022 and February 28, 2023

For the fiscal periods ended
August 31, 2022

Surplus(Yen in thousands)

Operating revenues:
Rental revenues (Notes 10 and 11)
Total operating revenues
Operating expenses:
Rental expenses (Note 10)
Asset management fees
Asset custody fees
Administrative service fees
Directors’ remuneration
Amortization of goodwill (Note 7)
Provision of allowance for doubtful accounts
Other operating expenses
Total operating expenses
Operating income
Non-operating revenues:
Interest income
Reversal of allowance for doubtful accounts
Gain on forfeiture of unclaimed distributions
Gain on adjustment of liabilities
Gain on receipt of donated non-current assets
Interest on tax refund
Other non-operating revenues
Total non-operating revenues
Non-operating expenses:
Interest expense
Interest expense on investment corporation bonds
Amortization of investment corporation bond issuance costs
Borrowing related expenses
Other non-operating expenses
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes-current (Note 18)
Net income
Retained earnings brought forward
Unappropriated retained earnings
The accompanying notes are an integral part of these financial statements.

3

48

Unitholders’ equity

February 28, 2023

Capital surplus¥29,368,987
29,368,987¥29,489,738
29,489,738

12,183,764
1,921,674
38,33894,587
6,660
1,982,226
1,577
478,750
16,707,579
12,661,408

12,283,588
1,908,944
38,362
94,036
6,660
1,982,226－
435,118
16,748,936
12,740,801

185
―
5,249
7,473
―
2,920
23
15,852
1,169,396
112,622
15,394
325,546
3,913
1,626,875
11,050,385
11,050,385
605¥11,049,780
369,782¥11,419,562

229
103
7,357
4,249
531
―
17
12,488
1,176,845
117,779
16,367
315,847
2,000
1,628,839
11,124,451
11,124,451
605¥11,123,846
271,962¥11,395,808

Deductions from capital surplus
Other
Allowance for
Numberdeductions
temporaryof units issued
from capitaldifference
and outUnitholders’surplusstanding
capitalCapital surplus adjustments(Units)Balance as of February 28, 2022

Total
deductions
from capitalsurplusCapitalsurplus, net(Yen in thousands)

2,320,000 ¥268,042,601¥247,667,563¥(3,401,604)¥―¥(3,401,604)¥244,265,959(1,637,920)

Changes during the period:
Distribution in excess of earnings
from allowance for temporary
difference adjustments

―

―

―

(1,637,920)―(1,637,920)

Distributions from surplus

―

―

―

―

―

―

―

Net income

―

―

―

―

―

―

―

―

―

―

―

―

―

―

―

―

―

(1,637,920)―(1,637,920)(1,637,920)

2,320,000 ¥268,042,601¥247,667,563¥(5,039,524)¥―¥(5,039,524) ¥242,628,039

Net changes of items other thanchanges of unitholders’ equity
Total changes during the period
Balance as of August 31, 2022
Changes during the period:
Distribution in excess of earnings
from allowance for temporary
difference adjustments
Other distributions in excess ofearnings―――(1,839,760)―(1,839,760)(1,839,760)

―

―

―

―

(44,080)(44,080)(44,080)

Distributions from surplus

―

―

―

―

―

―

―

Net income

―

―

―

―

―

―

―

―

―

―

―

―

―

―

―

―

―

(1,839,760)(44,080)(1,883,840)(1,883,840)

2,320,000 ¥268,042,601¥247,667,563¥(6,879,284)¥(44,080)¥(6,923,364) ¥240,744,199

Net changes of items other thanchanges of unitholders’ equity
Total changes during the period
Balance as of February 28, 2023

449

V. Statements of Cash Flows

IV. Statements of Changes in Net Assets
Daiwa House REIT Investment Corporation

Daiwa House REIT Investment Corporation

STATEMENTS OF CASH FLOWSSTATEMENTS OF CHANGES IN NET ASSETSFor the fiscal periods ended August 31, 2022 and February 28, 2023

For the fiscal periods ended August 31, 2022 and February 28, 2023

Unitholders’ equity
Surplus
Unappropriated retained
earnings

Total
unitholders’equityTotal surplus

For the fiscal periods ended

Valuation andtranslation
adjustments

Deferred gains orlosses on hedges

August 31, 2022

Total net
assets(Yen in thousands)¥12,238,902¥256,504,861¥524,547,463¥(369,449)¥524,178,013―(1,637,920)(1,637,920)―(1,637,920)

Distributions from surplus(11,869,120)(11,869,120)(11,869,120)―(11,869,120)

Net income

11,049,780

11,049,780

11,049,780―

11,049,780

―

―

―

99,63899,638

Balance as of February 28, 2022
Changes during the period:
Distribution in excess of earnings
from allowance for temporary
difference adjustments

Net changes of items other thanchanges of unitholders’ equity(819,339)(2,457,259)(2,457,259)

99,638(2,357,620)¥11,419,562¥254,047,602¥522,090,203¥(269,810)¥521,820,392―(1,839,760)(1,839,760)―(1,839,760)―(44,080)(44,080)―(44,080)

Distributions from surplus(11,147,600)(11,147,600)(11,147,600)―(11,147,600)

Net income

11,123,846

11,123,846

11,123,846―

11,123,846

―

―

―

137,126

137,126

Total changes during the period(23,753)(1,907,593)(1,907,593)

137,126(1,770,467)

Balance as of February 28, 2023

¥11,395,808¥252,140,008¥520,182,609¥(132,684)¥520,049,925

Total changes during the period
Balance as of August 31, 2022
Changes during the period:
Distribution in excess of earnings
from allowance for temporary
difference adjustments
Other distributions in excess ofearnings

Net changes of items other thanchanges of unitholders’ equity

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

Cash flows from operating activities:
Income before income taxes
Depreciation and amortization
Amortization of goodwill
Amortization of investment corporation bond issuance costs
Amortization of trademark rights
Loss on retirement of non-current assets
Interest income
Interest expense
Decrease in operating accounts receivable
Decrease in consumption taxes receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts and other payable
Increase (decrease) in accrued consumption taxes
Increase (decrease) in accrued expenses
Decrease in deposits received
Increase in advances received
Decrease (increase) in long-term prepaid expenses
Decrease in allowance for doubtful accounts
Other
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by operating activities
Cash flows from investing activities:
Acquisition of investment properties
Proceeds from tenant leasehold and security deposits
Repayment of tenant leasehold and security deposits
Proceeds from tenant leasehold and security deposits in trust
Repayment of tenant leasehold and security deposits in trust
Net cash used in investing activities
Cash flows from financing activities:
Proceeds from long-term loans
Repayment of long-term loans
Proceeds from issuance of investment corporation bonds
Distribution payment
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period (Note 3)

February 28, 2023

(Yen in thousands)¥11,050,385
5,654,048
1,982,226
15,394
227
7,538
(185)
1,282,019
15,6303,370,380(93,508)
212,282
1,549,216
25,704(4,390)24,893(371,786)(44)
71,717
24,791,751
185(1,359,520)(604)
23,431,812¥11,124,451
5,625,660
1,982,226
16,367
16
35,780(229)
1,294,624
33,230―1,909(114,042)(1,065,148)(9,174)(7,249)15,473
100,985(581)
15,487
19,049,789
229(1,365,904)(611)
17,683,503(1,604,315)
28,570(44,178)
271,107(439,706)(1,788,522)(1,177,482)
20,122(15,950)
481,660(514,611)(1,206,261)

20,000,000(24,000,000)
3,975,492(13,500,704)(13,525,212)
8,118,077
41,912,097¥50,030,174

16,500,000(18,500,000)
1,985,220(13,028,161)(13,042,940)
3,434,301
50,030,174¥53,464,475

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

5

50

6

51

VI. Notes to Financial Statements
Daiwa House REIT Investment Corporation

Notes to Financial Statements

amounts.
DHR’s fiscal period is a six-month period ending at end of February and August of each year.

As of and for the fiscal periods ended August 31, 2022 and February 28, 2023

Note 2 – Summary of Significant Accounting Policies
Note 1 – Organization and Basis of Presentation
Organization
Daiwa House REIT Investment Corporation (“DHR”) is a real estate investment trust whose sponsor is Daiwa
House Industry Co., Ltd. (“Daiwa House”) and whose asset manager is Daiwa House Asset Management Co., Ltd.
(the “Asset Manager”), a wholly owned subsidiary of Daiwa House.
DHR was listed on the Real Estate Investment Trust (“REIT”) Market of Tokyo Stock Exchange, Inc. (“TSE”) on
March 22, 2006, and then later merged with New City Residence Investment Corporation on April 1, 2010.
Subsequently on December 1, 2011, DHR changed its corporate name to Daiwa House Residential Investment
Corporation, and accordingly changed its investment targets to residential properties.
The former Daiwa House REIT Investment Corporation (the Daiwa House REIT Investment Corporation, which
was dissolved upon the merger with DHR as of September 1, 2016, and hereinafter referred to as the “former DHR”)
was established on September 14, 2007, whose asset manager was Daiwa House REIT Management Co., Ltd., awholly owned subsidiary of Daiwa House. The former DHR was listed on the TSE REIT Market on November 28,
2012, as a REIT that targeted investment in logistics and retail properties.
On September 1, 2016, DHR merged with the former DHR in an absorption-type merger with DHR as the surviving
corporation, and changed its corporate name from Daiwa House Residential Investment Corporation to Daiwa HouseREIT Investment Corporation.
After the merger, DHR shifted to a diversified portfolio strategy, targeting investment in new asset classes such as
hotel and office properties, in addition to those that DHR and the former DHR had targeted for investment in the past.
As of February 28, 2023, DHR’s portfolio included 230 properties at a total acquisition price of ¥895.1 billion.

Cash and cash equivalents consist of cash on hand and in trust, bank deposits and deposits in trust redeemable on
demand, and short-term investments, which are readily convertible to cash, with maturities of three months or lessfrom the date of acquisition, and insignificant risk of market value fluctuation.

(b) Investment Properties
Investment properties are stated at cost, net of accumulated depreciation. The cost of investment properties includes
the allocated purchase price, related costs and expenses for acquisition. Depreciation is calculated on a straight-line
basis over the estimated useful lives as stated below.

Buildings
Structures
Machinery and equipment
Tools, furniture and fixturesYears
2 – 693 – 63
7 – 282 – 28

Costs related to the renovation, construction and improvement of properties are capitalized. Expenditures for repairs
and maintenance, which do not add to the value or prolong the useful life of a property, are expensed as incurred.

(c) Intangible Assets
Intangible assets are amortized on a straight-line basis. The useful lives of major intangible assets are listed below.

Basis of Presentation
The accompanying financial statements have been prepared in accordance with the provisions set forth in the Act
on Investment Trust and Investment Corporations (the “Investment Trust Act,” Act No. 198 of 1951, as amended),the Financial Instruments and Exchange Act of Japan and its related accounting regulations, and in conformity withaccounting principles generally accepted in Japan (“Japanese GAAP”), which are different in certain respects as toapplication and disclosure requirements from International Financial Reporting Standards or accounting principles
generally accepted in the United States of America.
The accompanying financial statements have been reformatted and translated into English from the financial
statements of DHR prepared in accordance with Japanese GAAP. In preparing the accompanying financial statements,
relevant notes have been expanded and certain reclassifications have been made from the Japanese GAAP financial
statements. Certain supplementary information included in the statutory Japanese GAAP financial statements, but notrequired for fair presentation, is not presented in the accompanying financial statements.
DHR maintains its accounting records in Japanese yen, the currency of the country in which DHR operates. As
permitted by the regulations under the Financial Instruments and Exchange Act, amounts of less than one thousand
yen have been omitted. Unless otherwise specified, amounts of less than the units indicated are truncated, while valuesof ratios are rounded up or down to the nearest value of the last digit in the accompanying financial statements. As aresult, totals shown in the accompanying financial statements do not necessarily agree with the sums of the individual
752(a) Cash and Cash Equivalents

Goodwill

Years
20

Leasehold rights (general fixed-term land lease rights) are amortized on a straight-line basis over the life of eachcontract.

(d) Investment Corporation Bond Issuance Costs
Investment corporation bond issuance costs are amortized on a straight-line basis over the redemption periods.

(e) Investment Securities
Held-to-maturity bonds are stated at amortized cost using the straight-line method.

(f) Revenue Recognition
853

VI. Notes to Financial Statements
DHR recognizes rental revenues in accordance with Accounting Standards Board of Japan (“ASBJ”) Statement No.
13 “Accounting Standard for Lease Transactions.”
As for revenue from contracts with customers as defined in ASBJ Statement No. 29 “Accounting Standard for
Revenue Recognition,” DHR recognizes such revenue when DHR satisfies a performance obligation by transferringa control of a promised good or service to a customer, at the amount of consideration to which DHR expects to beentitled in exchange for transferring promised goods or services.
Details of major performance obligations related to revenue from contracts with customers and a typical point intime at which DHR satisfies a performance obligation and recognizes revenue are as follows:(1) Sale of investment properties
As to sale of investment properties, DHR recognizes revenue when a buyer, who is a customer, obtains a control
of a property by DHR’s satisfying the performance obligation to transfer the property as prescribed in the purchaseand sale contract of the property.
(2) Utilities expenses reimbursements (incidental revenue)
As to utilities expenses reimbursements, DHR recognizes revenue based on the supply amount of electricity,water, etc. to a tenant, who is a customer, in accordance with the property lease contract and related agreements.
When it is determined that DHR is regarded as an agent, the net amount received as utilities charges forelectricity, water, etc. supplied by another party, less the amount paid to the party, is recognized as revenue.

(g) Taxes on Property and Equipment
Property and equipment are subject to various taxes, such as property taxes and city planning taxes. An owner of aproperty is registered in a record maintained by the local government of the applicable jurisdiction, and taxes are
imposed on the owner registered in the record as of January 1, based on an assessment made by the local government.
The taxes are determined in April to June of each year and are paid in four installments during the year.
When a property is purchased prior to January 1 of any given calendar year, taxes for the previous year are imposedon the seller. DHR pays the seller the corresponding amount of the taxes for the period from the property’s acquisition
date to December 31 of the previous year as included in the purchase price of the property, and capitalizes this amountas an acquisition cost of the property.

(j) Non-Deductible Consumption Taxes
Non-deductible consumption taxes for acquisition of assets are added on to the acquisition cost of each asset.

(k) Trust Beneficiary Interests
For trust beneficiary interests in real estate, each of the trust assets and liabilities as well as all income generated
and expenses incurred in trusts are recorded in the relevant balance sheet and income statement accounts.

(l) Derivatives and Hedge Accounting
Deferral hedge accounting is applied for derivatives. DHR uses interest-rate swaps as hedging instruments in orderto hedge the risk of interest rate fluctuations related to borrowings. Pursuant to Japanese GAAP, DHR applies the
special accounting treatment to interest-rate swaps which qualify for hedge accounting and meet specific criteria.
Under the special accounting treatment, the related differentials paid or received under such swap contracts can berecognized and included in interest expenses or income of the hedged assets or liabilities, and the interest-rate swaps
are not required to be measured at fair value separately.
The assessment of hedge effectiveness is omitted when the significant terms of the hedged item and hedging
instrument, including the notional principal amount, are the same and changes in cash flows of the hedged item canbe expected to be offset in full from the commencement of a hedge relationship and continuously thereafter. The
assessment of hedge effectiveness is also omitted for all interest-rate swaps which meet the specific criteria under the
special accounting treatment.

Note 3 – Cash and Cash Equivalents
Cash and cash equivalents shown in the statement of cash flows consist of the following balance sheet items.

(h) Income Taxes
Deferred tax assets and liabilities are computed based on the differences between the financial reporting and income
tax basis of assets and liabilities using the enacted tax rates.

(i) Allowance for Doubtful Accounts
To cover possible losses on collection, allowance for doubtful accounts is provided based on past experience fornormal receivables and on an estimate of the collectability of receivables from companies in financial difficulty.

Cash and bank deposits
Cash and cash equivalents

As ofAugust 31, 2022
February 28, 2023
(Yen in thousands)¥50,030,174¥53,464,475¥50,030,174¥53,464,475

Note 4 – Financial Instruments(a) Qualitative Information on Financial Instruments
Policy on financial instruments
As a policy, when acquiring real estate and other properties, as well as when repaying its obligations, DHR raises
necessary funds through loans from financial institutions, issuance of investment corporation bonds and issuance ofinvestment units, etc. DHR carefully pays attention to ensure their financing to be long-term, cost effective and stable,
while considering applying various financial methods and dispersing repayment dates.
DHR may use derivative financial instruments for such purposes as hedging interest rate fluctuation risk, but does

9

54

10

55

VI. Notes to Financial Statements
not use them for speculative purposes. DHR currently uses interest-rate swaps to hedge interest rate fluctuation risk.
Surplus funds can be invested in securities or monetary claims; however, as a current policy of DHR, they aredeposited in interest-bearing accounts.
Nature and extent of risks arising from financial instruments and risk management
The Asset Manager stipulates basic provisions of risk management in its risk management rules.
Investment corporation bonds and loans are used to finance acquisitions of real estate and repayments of loans.
Although these financial instruments are exposed to liquidity risk, DHR controls such risk by maintaining the ratio ofinterest-bearing debt to total assets under a certain percentage, dispersing repayment dates, and retaining a certain
amount of highly liquid cash and deposits.
Floating rate loans are exposed to the risk of interest rate fluctuations. In order to reduce the impact caused by risinginterest rates, DHR closely monitors the movement of interest rates and intends to increase fixed rate loans.
Deposits are exposed to credit risks, including collapse of the financial institutions where deposits are made. DHR
manages such risks through the use of liquid deposits.
Supplemental explanation concerning fair value of financial instruments
Since certain assumptions and factors are reflected in estimating the fair value, different assumptions and factors
could result in a different value.

(b) Estimated Fair Value of Financial Instruments
Book value on the balance sheet, fair value and the difference as of August 31, 2022 and February 28, 2023 are asshown below. The disclosure for “Cash and bank deposits” is omitted since their fair value approximates their bookvalue due to short maturity. The disclosure for “Tenant leasehold and security deposits” and “Tenant leasehold andsecurity deposits in trust” is also omitted due to immateriality.
As of
August 31, 2022

(Yen in thousands)
DifferenceBook value

Fair value¥9,497¥9,497¥8,536¥8,536¥(961)¥(961)

42,100,000

42,139,285

39,28544,000,000 42,772,675
321,450,000 321,660,216¥407,550,000 ¥406,572,177¥(132,684) ¥(132,684)

Assets:(1) Investment securities
The fair value is based on reference statistical prices for OTC bond transactions.
For the book value on the balance sheet and the fair value of held-to-maturity bonds, and the difference between
the two values, please refer to Note 5 – “Investment Securities” below.
Liabilities:(2) Current portion of long-term loans and (4) Long-term loans
For long-term loans with floating interest rates, their fair value is approximately equal to their book value.
Thus, the book value is used as the fair value. However, for those which are hedged by interest rate swaps
meeting hedge accounting criteria, DHR employs a method to calculate the fair value by discounting the totalof the principal and interest accounted for under the special accounting treatment for interest rate swaps by aninterest rate assumed to be applied if similar types of loans are entered into.
For long-term loans with fixed interest rates, DHR employs a method to calculate the fair value by discounting
the total of the principal and interest by an interest rate assumed to be applied if similar types of loans areentered into.
(3) Investment corporation bonds
The fair value of these bonds is measured as the present value, which is calculated by discounting the total ofprincipal and interest by the interest rate assumed based on the remaining period until maturity and credit risk.
(5) Derivatives
Please refer to Note 6 – “Derivative Transactions” below.
2. Redemption schedule for monetary claims after August 31, 2022 and February 28, 2023 is as follows:

February 28, 2023

Book value
Fair value
Assets(1) Investment securities:
Held-to-maturity bonds¥9,480¥9,035¥(445)
Total¥9,480¥9,035¥(445)
Liabilities(2) Current portion of longterm loans
35,900,000
35,910,947
10,947(3) Investment corporationbonds
42,000,000
41,624,295 (375,704)(4) Long-term loans
329,650,000 331,646,778 1,996,778
Total¥407,550,000 ¥409,182,021 ¥1,632,021(5) Derivatives (*)¥(269,810)¥(269,810)¥―

Notes:
1. Methods to estimate fair value of financial instruments and matters regarding derivatives

Difference(1,227,324
210,216¥(977,822¥―

As of August 31, 2022

Investment securities
Total

As of February 28, 2023

Investment securities
Total

Due within
one year

Due after
one totwo years

¥―
¥―

¥―
¥―

Due within
one year

Due after
one totwo years

¥―
¥―

¥―
¥―

Due after
Due after
two tothree tothree years four years(Yen in thousands)

Due after
four to fiveyears

Due after
five years

¥―
¥―

¥―
¥―

¥10,000¥10,000

Due after
Due after
two tothree tothree years four years(Yen in thousands)

Due after
four to fiveyears

Due after
five years¥―¥―¥10,000¥10,000

¥―
¥―

¥―
¥―

¥―
¥―

(*) Amounts arising from derivative transactions are shown on a net basis with any amounts inside parentheses ( )indicating a net liability position.

11

56

12

57

VI. Notes to Financial Statements
3. Repayment schedule for investment corporation bonds and long-term loans after August 31, 2022 and February
28, 2023 is as follows:
Due after
Due within
one to two
one yearyears

Investment corporation bonds
Long-term loans (*)
Total

Due after
Due after
Due after
Due after five
two tothree to four four to five
years
three years
years
years
(Yen in thousands)¥―¥― ¥7,400,000¥― ¥4,000,000¥30,600,000
35,900,000 44,700,000 35,100,000 49,100,000 46,500,000
154,250,000¥35,900,000 ¥44,700,000 ¥42,500,000 ¥49,100,000 ¥50,500,000 ¥184,850,000

As of February 28, 2023

Due after
Due within
one to two
one yearyears

As of August 31, 2022

Due after
Due after
Due after
Due after five
two tothree to four four to five
years
three years
years
years
(Yen in thousands)¥― ¥5,000,000 ¥2,400,000 ¥4,000,000 ¥4,000,000¥28,600,000
42,100,000 35,100,000 44,600,000 47,500,000 46,500,000
147,750,000¥42,100,000 ¥40,100,000 ¥47,000,000 ¥51,500,000 ¥50,500,000 ¥176,350,000

Investment corporation bonds
Long-term loans (*)Total(*) The figures above include the current portion.

Note 5 – Investment Securities
Investment securities held by DHR are Japanese government bonds deposited with the Tokyo Legal Affairs Bureau
as business security deposits in accordance with the Building Lots and Building Transaction Business Act.
Book value on the balance sheet, fair value and the difference as of August 31, 2022 and February 28, 2023 are as
follows:
As ofAugust 31, 2022
Book value
Fair value exceeding the book value
Held-to-maturity bonds:
Government bonds¥―

Fair value not exceeding the book value
Held-to-maturity bonds:
Government bonds
9,480¥9,480Total

Fair value

¥―

9,035
¥9,03513

58

February 28, 2023
(Yen in thousands)
DifferenceBook value Fair value
Difference

¥―

(445)
¥(445)¥―

9,497¥9,497¥―8,536¥8,536¥―(961)¥(961)

Note 6 – Derivative Transactions(a) Derivative Transactions for Which Hedge Accounting Has Not Been Applied –– None(b) Derivative Transactions for Which Hedge Accounting Has Been Applied
Contract amount or notional principal amount of derivative transactions classified by hedge accounting method is
as follows:
As ofAugust 31, 2022
February 28, 2023
(Yen in thousands)
Contract amountContract amountType of derivative Hedged
Fair
Fair
Due after
Due aftertransaction
item
value
value
Total
Total
one year
one yearPrinciple method
Interest-rate swap
LongReceive floating/¥34,000,000 ¥21,000,000 ¥(269,810)¥27,000,000 ¥17,000,000 ¥(132,684)
term loan
Pay fixed(Note 1)
(Note 1)
Special treatment for interest-rate swaps
Interest-rate swap
LongReceive floating/
54,900,000 44,400,000(Note 2)term loan
Pay fixed¥88,900,000 ¥65,400,000 ¥(269,810)
Total

44,400,000

44,400,000(Note 2)

¥71,400,000 ¥61,400,000 ¥(132,684)

Notes:
1. Fair value is quoted by counterparties based on the prevailing market interest rates.
2. Under the special accounting treatment, interest-rate swaps are accounted for as part of the long-term loans, thehedged item; thus, the fair value is included in the fair value of the long-term loans. (Please refer to Note 4 –“Financial Instruments” above.)

Note 7 – Goodwill
On September 1, 2016, DHR merged with the former DHR in an absorption-type merger (the “Merger”) with DHR
as the surviving corporation and the former DHR as the absorbed corporation.
On the business combination date, consideration given for the acquisition was ¥219,425,976 thousand, which was
the amount equivalent to the fair value of DHR investment units allotted, while the fair value of the net assets acquired
from the former DHR was ¥140,136,912 thousand. The excess of the acquisition cost over the fair value of the net
assets acquired, in the amount of ¥79,289,063 thousand, was recognized as goodwill upon the Merger. The amount of
goodwill is amortized over 20 years using the straight-line method. As of August 31, 2022 and February 28, 2023, theunamortized balances of goodwill from the Merger were ¥55,502,344 thousand and ¥53,520,117 thousand,respectively.

1459

VI. Notes to Financial Statements
Note 8 – Investment Properties

Note 9 – Fair Value of Investment Properties

As of August 31, 2022 and February 28, 2023, investment properties consist of the following property andequipment and property and equipment in trust.

DHR owns logistics, residential, retail and hotel properties, and other assets for lease in the Tokyo metropolitan
area and other areas for the purpose of earning rental revenues. The book value of these investment properties
including leasehold rights in trust, net change in the book value and the fair value are as follows:

As ofAugust 31, 2022
Acquisition Accumulated
cost
depreciation

Property and equipment:
Land¥21,711,324
25,872,104
Buildings
246,523
Structures
478,657
Machinery and equipment
844,097
Tools, furniture and fixtures¥―
6,201,445
59,111
203,957
543,827

February 28, 2023
(Yen in thousands)
Acquisition AccumulatedNet
cost
depreciation¥21,711,324
19,670,659
187,412274,700
300,269

Property and equipment in trust:Land
421,990,449― 421,990,449
431,538,606 61,256,572 370,282,033
Buildings
10,127,725
1,914,446
8,213,278
Structures
2,665,397
1,417,998
1,247,399
Machinery and equipment
1,968,095
1,012,727
955,367
Tools, furniture and fixtures
Construction in progress
199,950―
199,950¥917,642,931 ¥72,610,086 ¥845,032,844
Total¥21,711,324
26,001,521
263,667
484,253881,294¥―6,460,002
62,288214,501
572,360

Net¥21,711,324
19,541,519
201,378
269,752
308,933

421,990,449― 421,990,449
432,623,303 66,118,041 366,505,261
10,182,640
2,112,985
8,069,655
2,649,669
1,470,540
1,179,129
2,162,410
1,130,901
1,031,508
4,580
―
4,580
¥918,955,116 ¥78,141,623 ¥840,813,493

For the period ended August 31, 2021, DHR received a subsidy for business expenses incurred for measures tocontrol carbon dioxide emission in fiscal year 2020 (the subsidy to support renovations for highly efficient facilities)
and recognized it as subsidy income. Most of the subsidy amount was allocated for part of acquisition cost of certain
property and equipment. In accordance with the Japanese tax law, a reduction entry was made by directly deducting
the allocated amount from the acquisition cost of the property and equipment and recognizing it as loss on tax purpose
reduction entry of non-current assets. The property and equipment for which the subsidy was allocated and the amountof the reduction entry are as follows:
For the fiscal periods ended
August 31, 2022
February 28, 2023
(Yen in thousands)¥17,328¥17,328

Buildings in trust

15

60

As of / For the fiscal periods ended
August 31, 2022
February 28, 2023
(Yen in thousands)

Book value:
Balance at beginning of the period
Net change during the period
Balance at end of the period¥855,137,285(4,321,630)¥850,815,655¥1,046,376,000

Fair value at end of the period¥850,815,655(4,266,764)¥846,548,890¥1,065,580,000

Notes:
1. The book value above includes leasehold rights in trust of ¥5,782,810 thousand and ¥5,735,397 thousand as ofAugust 31, 2022 and February 28, 2023, respectively.
2. For the periods ended August 31, 2022 and February 28, 2023, the decrease is mainly due to depreciation.
3. The fair value at end of the period represents the value assessed by third-party real estate appraisers.

Note 10 – Rental Revenues and Expenses
Rental revenues generated from investment properties and related expenses for the periods ended August 31, 2022
and February 28, 2023 are as follows:
For the fiscal periods ended
August 31, 2022
February 28, 2023
(Yen in thousands)

Rental revenues:
Rental revenues
Common area charges
Subtotal
Other revenues related to property leasing:
Facility charges
Incidental revenues
Other revenues
Subtotal
Total rental revenues¥27,524,798
560,731
28,085,530¥27,603,668
564,179
28,167,848

483,228
530,924
269,304
1,283,457¥29,368,987

482,648571,765
267,476
1,321,890¥29,489,738

16

61

VI. Notes to Financial Statements
For the fiscal periods ended
August 31, 2022
February 28, 2023
(Yen in thousands)

Rental expenses:
Management fees
Utilities
Taxes and public dues
Repairs
Restoration costs
Insurance premiums
Custodian fees
Depreciation and amortization
Other operating expenses
Total rental expenses
Operating income from property leasing activities¥1,614,583
581,659
2,396,533
892,040
268,558
51,58458,006
5,654,048
666,750¥12,183,764¥17,185,223¥1,493,274
698,672
2,395,903
1,021,773
240,089
53,89961,602
5,625,660
692,711¥12,283,588¥17,206,150

Note 11 – Revenue from Contracts with Customers(a) Information on disaggregated revenue from contracts with customers

Utilities expenses
reimbursements
Other
Total

For the fiscal periods ended
August 31, 2022
February 28, 2023
(Yen in thousands)
Revenue fromOperating revenue
Revenue fromOperating revenue
contracts withfrom external
contracts withfrom externalcustomers (Note 1)
customers (Note 1)
customers
customers¥512,387¥512,387¥554,109¥554,109―¥512,387

28,856,600¥29,368,987―¥554,109

28,935,629¥29,489,738

Note:
The amounts do not include rental revenues, etc. subject to ASBJ Statement No. 13 “Accounting Standard forLease Transactions” and transfer of real estate properties, etc. subject to the Japan Institute of Certified Public
Accountants Accounting Practice Committee Statement No. 15 “Practical Guidelines on Accounting by
Transferors for Securitization of Real Property by Using Special Purpose Companies” since these are notwithin the scope of application of the Accounting Standard for Revenue Recognition. Revenue from contracts
with customers in the above table mainly consist of proceeds from sale of investment properties and utilities
expenses reimbursements.

1762(b) Information on basis for understanding revenue from contracts with customers
Please refer to Note 2 – “Summary of Significant Accounting Policies, (f) Revenue Recognition.”(c) Information regarding relationship between fulfillment of performance obligations inaccordance with contracts with customers and cash flow arising from the contracts, as well asamounts and timing of revenue expected to be recognized in the following fiscal period onward
from contracts with customers existing at the end of the current fiscal period(1) Balance of contract assets and contract liabilities

Receivables arising from contracts with customers(Balance at beginning of the period)
Receivables arising from contracts with customers(Balance at end of the period)
Contract assets (Balance at beginning of the period)
Contract assets (Balance at end of the period)
Contract liabilities (Balance at beginning of the period)
Contract liabilities (Balance at end of the period)

For the fiscal periods ended
August 31, 2022
February 28, 2023
(Yen in thousands)¥161,837¥242,637

242,637

231,488

―
―
―
―

―
―
―
―

(2) Transaction price allocated to remaining performance obligations
Not applicable.
For utilities expenses reimbursements, DHR has the right to receive from customers the amount ofconsideration directly corresponding to the value to the lessee, who is the customer, for the portion for which
performance is completed by the fiscal period end. Therefore, in accordance with Paragraph 19 of the
Implementation Guidance on Accounting Standard for Revenue Recognition, revenue is recognized in theamount for which DHR has the right to request payment. Accordingly, DHR has applied the provision of
Paragraph 80-22 (2) of the Accounting Standard for Revenue Recognition and does not include utilities expenses
reimbursements in this note of the transaction price allocated to remaining performance obligations.

1863VI. Notes to Financial Statements
Note 12 – Asset Retirement Obligations
DHR recognizes asset retirement obligations associated with restoration obligations upon expiration of the fixedterm land lease agreements with some landowners and those associated with contractual and legal obligations forasbestos removal.
DHR estimates the useful life of applicable assets as the remaining period of the fixed-term land lease agreements(46 – 60 years), and uses 1.0 – 2.4% discount rates for the calculation of asset retirement obligations. For buildings
containing asbestos, DHR estimates the useful life to be 35 years, and uses a 0.6% discount rate. Changes in asset
retirement obligations for the periods ended August 31, 2022 and February 28, 2023 are as follows:
For the fiscal periods ended
August 31, 2022
February 28, 2023
(Yen in thousands)¥677,259¥670,889
―
―
6,436
6,369
¥683,696¥677,259

Balance at beginning of the period
Increase due to acquisitions of property and equipment
Accretion expense
Balance at end of the periodamount of ¥13,031,440,000 (¥5,617 per unit) by totaling net income of ¥11,049,780,436 and the amount equivalent
to goodwill amortization expenses of ¥1,982,226,586, adjusting the fractional parts of amounts less than ¥1 perinvestment unit. Of this cash distribution amount, ¥11,147,600,000 is distributed as distribution of earnings,¥1,839,760,000 as distribution in excess of earnings from allowance for temporary difference adjustments and¥44,080,000 as other distribution in excess of earnings.
For the distribution related to the fiscal period ended February 28, 2023, DHR determined the cash distribution
amount of ¥13,105,680,000 (¥5,649 per unit) by totaling net income of ¥11,123,846,132 and the amount equivalent
to goodwill amortization expenses of ¥1,982,226,586, adjusting the fractional parts of amounts less than ¥1 perinvestment unit. Of this cash distribution amount, ¥11,261,280,000 is distributed as distribution of earnings and¥1,844,400,000 as distribution in excess of earnings from allowance for temporary difference adjustments.
The changes in allowance for temporary difference adjustments are reflected on the balance sheet in the fiscal periodthat distributions are declared. Thus, as of August 31, 2022 and February 28, 2023, the balances of allowance fortemporary differences are ¥5,039,524 thousand and ¥6,879,284 thousand, respectively.
In principle, DHR will not reverse the allowance for temporary difference adjustments provided for amortizationof goodwill.
Distributions related to the period but declared after the balance sheet date are summarized as follows:
For the fiscal periods ended
August 31, 2022
February 28, 2023
(Yen)

Note 13 – Net Assets
DHR issues only non-par value units in accordance with the Investment Trust Act and all issue amounts of newunits are designated as stated capital. DHR maintains net assets of at least ¥50,000 thousand as required by Paragraph
4 of Article 67 of the Investment Trust Act.

Note 14 – Distribution Information
In accordance with Article 37.1.1 of the bylaws set forth by DHR for cash distributions, the amount of distributionof earnings is limited to the amount of income and more than 90% of income available for distribution as set forth in
Article 67.15 of the Special Taxation Measures Act of Japan (the “Measures”), which allows the REITs to deduct theamount of cash distributions from taxable income to avoid double taxation if certain requirements are met. In addition
to distribution of earnings, DHR will make distribution in excess of earnings in accordance with Article 37.2 of thebylaws.
DHR has a basic policy to distribute the amount equivalent to goodwill amortization expenses in addition to net
income for the fiscal period. When taxable income exceeds accounting profit associated with sale of investment
properties and it causes a need for DHR to take action to maintain its favorable tax status, DHR will increase theamount of distributions in excess of earnings (distribution from capital surplus as allowance for temporary difference
adjustments) to avoid corporate taxes. On the other hand, where special gains such as gain on sale of investment
properties are recognized, the amount of other distributions in excess of earnings, which is a part of the abovementioned distributions in excess of earnings in the amount equivalent to goodwill amortization expenses, may be
reduced by an amount equivalent to part of the gain on sale of investment properties. For distribution of the amountequivalent to goodwill amortization expenses, DHR distributes the amount equivalent to goodwill amortization
expenses as distribution in excess of earnings that can be treated as allowance for temporary difference adjustments
or other distributions in excess of earnings.

Unappropriated retained earnings
Deduction from capital surplus:
Allowance for temporary difference adjustments
Other deductions from capital surplus

Total¥11,419,562,690

1,839,760,000
44,080,000¥13,303,402,690

Cash distributions:¥11,147,600,000
Distribution of earnings
Distribution in excess of earnings from1,839,760,000
allowance for temporary difference adjustments
Other distribution in excess of earnings
44,080,000
Total cash distributions

Per unit¥13,031,440,000¥271,962,690

Retained earnings carried forward

Total¥11,395,808,822

Per unit

1,844,400,000―¥13,240,208,822¥4,805¥11,261,280,000¥4,854793

1,844,400,000

795

19

―

―

¥5,617¥13,105,680,000¥5,649¥134,528,822

For the distribution related to the fiscal period ended August 31, 2022, DHR determined the cash distribution
19

64

20

65

VI. Notes to Financial Statements
Note 15 – Investment Corporation Bonds
The following summarizes the status of the DHR’s unsecured investment corporation bonds with special pari passu
conditions among specified investment corporation bonds as of August 31, 2022 and February 28, 2023. The bonds
are to be repaid on a lump-sum basis on the maturity date.
As ofAugust 31, 2022 February 28, 2023
Interest
Bond series
Issue date
Maturity date
rate
(Yen in thousands)
Daiwa House REIT
Investment Corporation
1st Unsecured Bonds

December 24,
2014

December 24,
2024

Daiwa House Residential
Investment Corporation
3rd Unsecured Bonds

January 22,
2015

January 22,
2025

Daiwa House REIT
Investment Corporation
6th Unsecured Bonds

December 20,
2016

December 18,
2026

0.57

4,000,000

4,000,000

Daiwa House REIT
Investment Corporation
7th Unsecured Bonds

July 30, 2018

July 30, 2030

0.69

2,000,000

2,000,000

Daiwa House REIT
Investment Corporation
8th Unsecured Bonds

July 30, 2018

July 30, 2038

1.03

1,000,000

1,000,000

Daiwa House REIT
Investment Corporation
9th Unsecured Bonds(Green Bonds)

November 25,
2019

November 22,
2029

0.53

6,000,000

6,000,000

Daiwa House REIT
Investment Corporation
10th Unsecured Bonds(Green Bonds)

May 27, 2020

May 27, 2025

0.34

2,400,000

2,400,000

Daiwa House REIT
Investment Corporation
11th Unsecured Bonds(Green Bonds)

May 27, 2020

May 27, 2030

0.641,600,000

1,600,000

Daiwa House REIT
Investment Corporation
12th Unsecured Bonds(Green Bonds)

May 27, 2020

May 25, 2040

1.00

1,000,000

1,000,000

Daiwa House REIT
Investment Corporation
13th Unsecured Bonds

December 24,
2020

December 24,
2032

0.60

3,000,000

3,000,000

Daiwa House REIT
Investment Corporation
14th Unsecured Bonds(Green Bonds)

April 15, 2021

April 15, 2031

0.50

4,000,000

4,000,000

2166

0.826%

0.67¥2,000,000

3,000,000¥2,000,000

3,000,000

As of
August 31, 2022 February 28, 2023
(Yen in thousands)

Bond series

Issue date

Maturity date

Interestrate

Daiwa House REIT
Investment Corporation
15th Unsecured Bonds(Sustainability Bonds)

November 17,
2021

November 17,
2031

0.40

3,000,000

3,000,000

Daiwa House REIT
Investment Corporation
16th Unsecured Bonds(Sustainability Bonds)

November 17,
2021

November 17,
2036

0.66

1,000,000

1,000,000

Daiwa House REIT
Investment Corporation
17th Unsecured Bonds

December 16,
2021

December 16,
2027

0.24

4,000,000

4,000,000

Daiwa House REIT
Investment Corporation
18th Unsecured Bonds(Sustainability-Linked
Bonds) (Note 1)

May 25, 2022

May 25, 2029

0.575
(Note 2)4,000,000

4,000,000

Daiwa House REIT
Investment Corporation
19th Unsecured Bonds

December 19,
2022

June 18, 2032

0.77

―

2,000,000¥42,000,000¥44,000,000

Total

Notes:
1. The “Sustainability-Linked Bonds” refer to the bonds whose terms may change depending on whether or not thepredetermined SPT (Sustainability Performance Target) is achieved.
2 The initial interest rate applicable from the following day of May 25, 2022 to May 25, 2023 is 0.575% per annum.
After May 25, 2023, the interest rate, which is determined annually depending on the achieved level of the SPT
on each reference date, will be applied. The SPT is deemed to be achieved when DHR is certified as an “A-List”
company, the highest rating under the CDP Climate Change Program. The first reference date is the last day ofApril 2023, and subsequent reference dates will be the last day of April of each year until the redemption date.
The achievement of the SPT will be observed on the reference date every year, and the interest rate will bechanged according to the degree of achievement of the SPT as follows:
CDP ScoreA
AB / B- / C / C- / D / D- / FInterest rate
0.550% per annum (Initial interest rate -2.5bp)
0.585% per annum (Initial interest rate +1.0bp)
0.600% per annum (Initial interest rate +2.5bp)

2267

VI. Notes to Financial Statements
As ofNote 16 – Long-Term Loans
Long-term loans consist of borrowings from financial institutions under loan agreements. None of the loans are
secured by collateral or guaranteed. The following table summarizes long-term loans as of August 31, 2022 andFebruary 28, 2023.
As ofAugust 31, 2022
Interest(Yen in thousands)rate

Due date

Long-term loans:
Floating-rate loan (*)
Floating-rate loan (*)
Floating-rate loan (*)
Fixed-rate loan
Floating-rate loan (*)
Fixed-rate loan
Floating-rate loan (*)
Floating-rate loan (*)
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Floating-rate loan
Fixed-rate loan
Floating-rate loan (*)
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Floating-rate loan (*)
Fixed-rate loan
Floating-rate loan (*)
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Floating-rate loan (*)
Floating-rate loan (*)
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan

December 28, 2022
October 3, 2022
September 28, 2022
September 9, 2022
March 27, 2023
September 29, 2023
October 2, 2023
May 31, 2023
March 31, 2023
September 29, 2023
March 31, 2023
September 29, 2023
September 29, 2023
January 31, 2024
April 1, 2024
September 30, 2024
March 29, 2024
March 29, 2024
April 30, 2024
October 31, 2024
October 31, 2024
October 1, 2025
October 1, 2025
May 30, 2025
September 29, 2025
March 31, 2025
April 30, 2025
September 30, 2025
September 30, 2025
April 1, 2026
May 29, 2026
September 28, 2026
November 30, 2026
April 30, 2026
April 30, 2026
April 30, 2026
23

68

¥10,500,000
3,000,000
4,000,000
1,000,000
2,000,000
1,000,000
4,000,000
4,000,000
10,400,000
10,000,000
1,000,000
1,000,000
6,700,000
2,000,000
3,000,000
1,000,000
11,000,000
1,000,000
5,000,000
8,100,000
6,000,000
4,000,000
3,000,000
4,000,000
9,000,000
11,000,000
5,000,000
1,000,000
7,600,000
2,000,000
4,000,000
1,000,000
15,000,000
10,000,000
2,000,000
1,000,000

0.59%
0.87
0.65
0.43
1.50
1.00
0.99
0.71
0.41
0.57
0.44
0.43
0.29
0.88
1.52
0.73
0.48
0.55
0.52
0.39
0.35
1.23
1.18
0.97
0.63
0.70
0.60
0.60
0.43
2.03
1.09
0.69
0.87
0.76
0.65
0.45

February 28, 2023
Interest(Yen in thousands)
rate

¥―
―
―
―
2,000,000
1,000,000
4,000,000
4,000,000
10,400,000
10,000,000
1,000,000
1,000,000
6,700,000
2,000,000
3,000,000
1,000,000
11,000,000
1,000,000
5,000,000
8,100,000
6,000,000
4,000,000
3,000,000
4,000,000
9,000,000
11,000,000
5,000,000
1,000,000
7,600,000
2,000,000
4,000,000
1,000,000
15,000,000
10,000,000
2,000,000
1,000,000

―%
―
―
―
1.50
1.00
0.99
0.71
0.41
0.57
0.44
0.43
0.27
0.88
1.52
0.73
0.48
0.55
0.52
0.39
0.35
1.23
1.18
0.97
0.63
0.70
0.60
0.60
0.43
2.03
1.09
0.69
0.87
0.76
0.65
0.45

Due date

Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Floating-rate loan (*)
Floating-rate loan (*)
Fixed-rate loan
Floating-rate loan (*)
Fixed-rate loan
Floating-rate loan (*)
Floating-rate loan (*)
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Fixed-rate loan
Total long-term loans
Less: current portionLong-term loans, less current
portionApril 30, 2026
March 31, 2026
September 30, 2026
March 31, 2026
September 30, 2026
March 31, 2026
April 1, 2027
March 31, 2027
July 30, 2027
November 30, 2027
September 30, 2027
April 30, 2027
July 30, 2027
September 30, 2027
January 29, 2027
April 28, 2028
April 28, 2028
December 29, 2028
April 28, 2028
September 29, 2028
January 31, 2028
September 29, 2028
July, 31, 2028
April 27, 2029
November 30, 2029
January 31, 2029
April 27, 2029
May 31, 2029
January 31, 2030
April 30, 2030
October 31, 2030
April 30, 2030
September 30, 2030
April 1, 2031
August 29, 2031
September 30, 2031
December 26, 2031
March 31, 2032
August 31, 2033

August 31, 2022
Interest(Yen in thousands)
rate
1,000,000 0.40
500,000 0.40
500,000 0.41
1,000,000 0.44
5,500,000 0.28
3,000,000 0.28
1,500,000 1.46
2,000,000 0.85
12,100,000 0.89
16,000,000 0.90
1,500,000 0.75
500,000 0.50
8,400,000 0.46
1,000,000 0.46――
10,000,000 1.02
10,000,000 0.89
5,000,000 0.88
1,500,000 0.59
1,000,000 0.51
3,500,000 0.37
10,500,000 0.37
6,850,000 0.42
10,400,000 0.75
10,000,000 0.66
1,500,000 0.59
5,000,000 0.51
7,000,000 0.45
9,000,000 0.61
10,000,000 0.62
10,000,000 0.80
6,500,000 0.75――
3,000,000 0.70
10,500,000 0.56――――
3,500,000 0.90
1,000,000 0.80
365,550,000(35,900,000)¥329,650,000

February 28, 2023
Interest(Yen in thousands)
rate
1,000,000 0.40
500,000 0.40
500,000 0.41
1,000,000 0.44
5,500,000 0.28
3,000,000 0.28
1,500,000 1.46
2,000,000 0.85
12,100,000 0.89
16,000,000 0.90
1,500,000 0.75
500,000 0.50
8,400,000 0.46
1,000,000 0.46
1,000,000 0.51
10,000,000 1.02
10,000,000 0.89
5,000,000 0.88
1,500,000 0.59
1,000,000 0.51
3,500,000 0.37
10,500,000 0.37
6,850,000 0.42
10,400,000 0.75
10,000,000 0.66
1,500,000 0.59
5,000,000 0.51
7,000,000 0.45
9,000,000 0.61
10,000,000 0.62
10,000,000 0.80
6,500,000 0.75
3,000,000 0.87
3,000,000 0.70
10,500,000 0.56
4,000,000 0.96
8,500,000 1.26
3,500,000 0.90
1,000,000 0.80
363,550,000(42,100,000)¥321,450,000

24

69VI. Notes to Financial Statements(*) DHR entered into an interest-rate swap contract to hedge its exposure to interest rate fluctuation risk. The statedinterest rate includes the effect of the interest-rate swap.
The stated interest rate is the weighted average interest rate for the applicable fiscal period and is rounded to thesecond decimal place.
The repayment schedule for long-term loans subsequent to August 31, 2022 and February 28, 2023 is disclosed in
Note 4 – “Financial Instruments.”
DHR has entered into a commitment line agreement with four financial institutions in order to secure flexible andstable financing. The status of the commitment line agreement as of August 31, 2022 and February 28, 2023 is asfollows:

Note 18 – Deferred Income Taxes
DHR is subject to Japanese corporate income taxes on all of its taxable income. However, DHR may deduct theamount distributed to its unitholders from its taxable income when certain requirements, including a requirement to
distribute in excess of 90% of distributable profit for the fiscal period, are met under the Measures. If DHR does notsatisfy all of the requirements as specified in the Measures, the entire taxable income of DHR will be subject to regular
corporate income taxes in Japan.

(a) Significant Components of Deferred Tax Assets and Liabilities
As ofAugust 31, 2022
February 28, 2023
(Yen in thousands)

As ofAugust 31, 2022
February 28, 2023
(Yen in thousands)

Total amount of commitment line
Balance executed as loans
Unused line of credit¥25,000,000―¥25,000,000¥25,000,000―¥25,000,000

Note 17 – Lease Transactions
Future minimum lease revenues under existing non-cancelable operating leases as of August 31, 2022 and February
28, 2023 are as follows:
As ofAugust 31, 2022
February 28, 2023
(Yen in thousands)¥30,603,441¥30,619,812
178,327,692¥167,306,637¥208,931,133¥197,926,449

Due within one year
Due after one year
Total

Deferred tax assets:
Excess provision of allowance for doubtful accounts
Deferred interest income
Valuation difference at the time of merger(Land and buildings)
Asset retirement obligations
Deferred gains or losses on hedges
Amortization of fixed-term land lease rights
Other
Subtotal
Valuation reserve
Total deferred tax assets
Deferred tax liabilities:
Valuation difference at the time of merger(Investment securities)
Valuation difference at the time of merger(Land and buildings)
Asset retirement costs
Subtotal
Valuation reserve
Total deferred tax liabilities
Net deferred tax assets¥640
97,153¥457
74,3462,109,651

2,038,479

213,065
84,882
226,280
9,009
2,740,683(2,740,683)―

215,090
41,742
241,196
8,874
2,620,187(2,620,187)―¥(598)¥(578)(13,266,189)(13,229,530)(175,960)(13,442,748)
13,442,748―¥―(175,943)(13,406,053)
13,406,053―¥―

Based on the cash distribution policy set forth in Article 37 of the Articles of Incorporation, DHR may distributean amount of cash that exceeds profit in order to minimize taxable income. DHR does not assume corporate income
tax payments in future accounting periods; therefore, deferred tax liabilities are not recorded.

(b) Significant Differences Between the Statutory Tax Rate and the Effective Tax Rate After
Applying Deferred Income Tax Accounting
The following table summarizes the significant differences between the statutory tax rate and DHR’s effective tax
rate for financial statement purposes.
25

70

26

71

VI. Notes to Financial Statements
For the fiscal periods ended
August 31, 2022
February 28, 2023
31.46%
31.46%

Statutory tax rate
Adjustments:
Tax-deductible cash distributions paid
Amortization of goodwill
Change in valuation reserve
Other
Effective tax rate

(36.71)5.64(0.40)
0.01
0.01%(36.70)5.61(0.37)
0.01
0.01%

Note 21 – Segment Information(a) Segment Information
Since DHR has been engaged in a single segment of the real estate leasing business, and there is no other businesssegment for disclosure, segment information has been omitted.

(b) Related Information
Information about products and services

Note 19 – Per Unit Information
Earnings per unit for the periods ended August 31, 2022 and February 28, 2023 and net assets per unit as of August
31, 2022 and February 28, 2023 are as follows:
For the fiscal periods ended
August 31, 2022
February 28, 2023
(Yen)

Earnings per unit:
Net income per unit
Weighted average number of units outstanding (units)¥4,762
2,320,000¥4,7942,320,000

As of
August 31, 2022
February 28, 2023
(Yen)
¥224,159¥224,922

Net assets per unit

Net income per unit is calculated by dividing net income by the weighted average number of investment units
during the period. Net assets per unit are calculated by dividing net assets by the number of units outstanding at eachbalance sheet date. Diluted earnings per unit are not disclosed since there were no diluted units.

Note 20 – Related-Party Transactions

Since operating revenues from external customers for a single segment of product and service account for over 90%
of total operating revenues in DHR’s statements of income and retained earnings for the periods ended August 31,
2022 and February 28, 2023, information about products and services has been omitted.
Information about geographic areas(1) Operating revenues
Since operating revenues from external customers within Japan account for over 90% of total operating revenues
in DHR’s statements of income and retained earnings for the periods ended August 31, 2022 and February 28, 2023,
information about geographic areas has been omitted.
(2) Investment properties
Since over 90% of total investment properties on the balance sheets as of August 31, 2022 and February 28,
2023, are located within Japan, information about geographic areas on such investment properties has been omitted.
Information about major customers
Since there is not any customer accounting for 10% or more of total operating revenues in DHR’s statements ofincome and retained earnings for the periods ended August 31, 2022 and February 28, 2023, information about major
customers has been omitted.

Note 22 – Subsequent Events

Related-party transactions for the periods ended August 31, 2022 and February 28, 2023 are as follows:

Not applicable.

(a) Controlling Company and Major Corporate Investors –– None(b) Affiliates –– None(c) Transactions under Common Control –– None(d) Directors and Major Individual Investors –– None

27

72

28

73

VII. Independent Auditor’s Report

Independent Auditor’s Report

The Board of Directors
Daiwa House REIT Investment Corporation
OpinionWe have audited the accompanying financial statements of Daiwa House REIT Investment
Corporation (the Company), which comprise the balance sheets as at February 28, 2023 andAugust 31, 2022, and the statements of income and retained earnings, changes in net assets, andcash flows for the six-month periods then ended, and notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, thefinancial position of the Company as at February 28, 2023 and August 31, 2022, and its financial
performance and its cash flows for the six-month periods then ended in accordance withaccounting principles generally accepted in Japan.
Basis for Opinion

Management is responsible for the preparation and fair presentation of these financial statementsin accordance with accounting principles generally accepted in Japan, and for such internal control
as management determines is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s
ability to continue as a going concern and disclosing, as required by accounting principles
generally accepted in Japan, matters related to going concern.
Supervisory Directors are responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditor’sreport that includes our opinion. Misstatements can arise from fraud or error and are consideredmaterial if, individually or in the aggregate, they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:

We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for
the Audit of the Financial Statements section of our report. We are independent of the Company
in accordance with the ethical requirements that are relevant to our audit of the financial
statements in Japan, and we have fulfilled our other ethical responsibilities in accordance withthese requirements. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

・ Identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion.

Other Information

・ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.

The other information comprises the information included in the Semi-Annual Report that
contains audited financial statements but does not include the financial statements and our
auditor’s report thereon. Management is responsible for preparation and disclosure of the otherinformation. Supervisory Directors are responsible for overseeing the Company’s reporting
process of the other information.
Our opinion on the financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the otherinformation and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.

74

Responsibilities of Management and Supervisory Directors for the Financial Statements

・ Consider internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances for our risk assessments, while the purpose of the audit of
the financial statements is not expressing an opinion on the effectiveness of the Company’s
internal control.

・ Conclude on the appropriateness of management’s use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company’s ability tocontinue as a going concern. If we conclude that a material uncertainty exists, we are required
to draw attention in our auditor’s report to the related disclosures in the financial statements
or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor’s report. However, future events orconditions may cause the Company to cease to continue as a going concern.
・ Evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions andevents in a manner that achieves fair presentation in accordance with accounting principles
generally accepted in Japan.

We have nothing to report in this regard.

We communicate with Executive Director regarding, among other matters, the planned scope andtiming of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.

Ernst & Young ShinNihon LLC

Ernst & Young ShinNihon LLC

75

VII. Independent Auditor’s Report

Investor Information
Unitholders Data ■…Individuals / Other(As of February 28, 2023)■…Financial institutions■…Foreign corporations and individuals

We also provide Executive Director with a statement that we have complied with the ethicalrequirements regarding independence that are relevant to our audit of the financial statements inJapan, and to communicate with them all relationships and other matters that may reasonably bethought to bear on our independence, and where applicable, related safeguards.

371（2.1%）
203（1.2%）

Our firm and its designated engagement partners do not have any interest in the Company whichis required to be disclosed pursuant to the provisions of the Certified Public Accountants Act ofJapan.

May 22, 2023

金 子 秀 嗣Shuji Kaneko
Designated Engagement Partner
Certified Public Accountant

565（3.2%）
23（0.1%）

Number ofunitholders

Sei Eshita
Designated Engagement Partner
Certified Public Accountant

16,429（93.4%）

Shareholder

Daiwa House Industry Co., Ltd. (100%)

Date for determining
Last day of February and August of each year
distribution(Distributions are to be paid within three months of each date.)
payments
Unitholders’To be held at least once every two years
Meeting

133,691units（5.8%）

588,376units（25.4%）

97,324units（4.2%）

2,320,000units

Date for finalizing
Date set forth in Section 16.1 in the Articles ofgeneral meeting
Incorporation by DHR
voting rights

Listing

Number ofinvestment units

REIT section of the Tokyo Stock Exchange(Securities code: 8984)

Public notices The“Nikkei”newspaper (Nihon Keizai Shimbun)
1,267,362units（54.6%）

233,247units（10.1%）

4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo

Transfer agent 100-8233, JAPAN

Sumitomo Mitsui Trust Bank, Limited

Inquiries

8-4, Izumi 2-chome, Suginami-ku, Tokyo 168-0063, JAPAN
Stock Transfer Agency Business Planning Dept. of
Sumitomo Mitsui Trust Bank, Limited
TEL: 0120-782-031 (toll-free, available within Japan only)
Weekdays 9 a.m. to 5 p.m.

(Note) Ratios in parentheses are rounded to the nearest tenth.

Distribution Statement

DHR abolished the unitholder benefit program applicable for Daiwa
Royal Hotels and Royton Sapporo effective from the fiscal period
ended February 28, 2023 due to the transfer of shares of theoperating company, Daiwa Resort Co., Ltd. We sincerely appreciate
your understanding.
For details, please refer to the DHR press release“Notice Concerning Abolitionof Unitholder Benefit Program”dated February 3, 2023.

Please submit changes of address, name, etc., to yoursecurities company, etc. For procedures regarding investment
units registered in special accounts, please contact: Stock
Transfer Agency Business Planning Dept. of Sumitomo Mitsui
Trust Bank, Limited.

Receipt of Distributions
You can receive distributions when you bring your receipt for
distributions to the local office of the Japan Post Bank in Japan or toa post office (bank agent). If the period for receiving distributions
has elapsed, please contact the transfer agent Sumitomo Mitsui
Trust Bank, Limited.
If you would like to specify an account to which future distributions
will be transferred, please follow the procedures of your securities
company, etc.
We will not pay and have no obligation to pay cash distributions
not claimed within three years of the distribution date, as stipulated
in our Articles of Incorporation. Please receive your distributions assoon as possible.

Ernst & Young ShinNihon LLC

September 1, 2004

Paid-in Capital ¥300 million

Account closing
Last day of February and August of each year
date

Procedures for Changes of Address, etc.

76

Established

7th Floor, Nissei Nagatacho Building, 2-4-8,
Nagatacho, Chiyoda-ku, Tokyo 100-0014

Note for Unitholders

Abolition of Unitholder Benefit Program

江 下 聖

Corporate Name Daiwa House Asset Management Co., Ltd.
Location

17,591

Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan

Ernst & Young ShinNihon LLC
Tokyo, Japan■…Other domestic corporations■…Securities firms

Outline of the Asset Manager

The“Distribution Statement”delivered upon payment of distributions
includes the“Payment Notice,”referred to in the provisions of the
Act on Special Measures Concerning Taxation. This document may
be used as a document when declaring income for tax purposes.
However, for unitholders who have selected the system of dividend
allotment to securities company accounts in proportion to thenumber of shares held, the amount of withholding tax will becalculated by your securities company, etc. For supporting
documents when declaring income for tax purposes, please confirm
with your securities company, etc. Furthermore, unitholders who
receive distributions by way of a receipt for distributions also receive
a“Distribution Statement”enclosed with it.

Outline of the Social Security and Tax Number System Nicknamed“My Number System”with Regard to Investment Units
Residents in Japan are notified of their Social Security and Tax Number(nicknamed“My Number”) by their city, town or village. My Number isrequired when performing tax-related procedures with regard toinvestment units.

Use of the My Number for Investment Unit Related BusinessAs stipulated by laws and regulations, it is now required to state
the My Number of the unitholder on payment records that are
submitted to the tax office. Unitholders are therefore requested
to submit their My Number to their securities company, etc.
[Contact address for inquiries on submitting My Number]● Unitholders whose investment units are managed by a securities account➡ Please direct your inquiries to your securities company, etc.
● Unitholders not conducting transactions via a securities company➡ Please call the following toll-free phone number.
Stock Transfer Agency Business Planning Dept. of Sumitomo
Mitsui Trust Bank, Limited TEL: 0120-782-031
77