2012/1/16

Daiwa Office Investment Corporation
Earnings Announcement
for the 12th Fiscal Period(Fiscal Period Ended November 2011)

Contents
Section 1

Section 3

Performance Highlights and Forecasts

External Growth 12th Fiscal Period Topics

4 The Real Estate Market and Trading Performance22

 Highlights of the 12th Fiscal Period5 Portfolio and Acquisition Policy

23

 Highlights of Forecasts for the 13th and 14th Fiscal Period6 Acquisition of Properties Under Review

24 Issue and Activities of the Investment Corporation

7

 Recent Property Acquisition25

 Properties Acquired after The Sponsor Change

26

Section 2

Section 4

Internal Growth

Financial Strategy

 Market Environment of Office Building9 Portfolio Map

11 Status of Interest-bearing Liabilities28 Analyses of Leasing Income12 Unitholders

32

 Performance of Shinjuku Maynds Tower & E SPACE TOWER

15

 Activities in the 13th Fiscal Period33

 Internal Growth Strategies

16 Properties Subject to Leasing Improvement

17

Section 5

 Strategic Renewals Aimed at Improving in Building Capability

18

 Establishment of Environmental Policies

Appendix19

 Tangible Approach

20

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

1This document is provided for informational purposes and should not be construed as an offer orsolicitation of an offer to buy or sell any specific product, including investment units. We advise
you to inquire with each securities company with regards to the purchase of Daiwa Office
Investment Corporation’s investment units.
This document is not intended to provide information meeting the requirements of Japan’s new
Financial Instruments and Exchange Law or Investment Trust and Investment Corporation Law, orby the associated cabinet orders, cabinet office ordinances, or rules, or by the rules governingcompanies listed on the Tokyo Stock Exchange, or any other applicable rules, nor is it adisclosure document or statement of financial performance prepared in accordance with theprovisions of any of the foregoing.
This document contains forward-looking statements. However, these forward-looking statements
are based on certain assumptions and judgments made using currently available information, andthere are a number of known and unknown risks and uncertainties. These forward-looking
statements are not a guarantee of future performance or management results, and actual results
may differ materially from any explicit or implicit forecasts contained herein.
Although the information contained in this document is the best available at the time of
publication, no assurances can be given regarding the accuracy and certainty of this information.
The content of this document can be modified or withdrawn without prior notice.

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

2Section 1
Performance Highlights and Forecasts
12th Fiscal Period (June 1, 2011 ~ November 30, 2011)

12th Fiscal Period Topics
12th Fiscal Period Topics
 Properties Acquisition¾

E SPACE TOWER (Date of Delivery: 2011/7/8 Acquisition Price: 24,000 million yen)

 Property Management and Management Situation¾

Occupancy Rate at the end of Nov. 2011 : 92.4% ( at the end of May 2011 : 95.4%)¾

Average Contract Rent as of end-Nov. 2011 : 20,226 yen (% change from previous period: +2.7%)
Average Contract Rent at the end of May 2011 : 19,692 yen
Average Contract Rent except for E SPACE TOWER as of end-Nov.2011 : 19,585 yen¾

Establishing a new role: Construction Manager

 Financial Situation¾ Interest-bearing liabilities at the end of Nov. 2011 : 109,916 million yen ( LTV (based on acquisition price) at the end of

Nov. 2011: 35.3%)¾

All borrowings of Daiwa Office Investment Corporation were unsecured in September 2011.

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

4

Highlights of the 12th Fiscal Period
Results of the 12th Fiscal Period
11th Fiscal Period(ended May 2011)(35properties)

12th Fiscal Period(ended Nov. 2011)(36 properties)(million yen)
ChangeMain Reason

Operating Revenue

6,758

7,605

+ 846

Acquisition of E SPACE TOWER(+539mil yen), increasing in the rent revenue ( by the termination of free rent period, etc.)of Shinjuku Maynds Tower (+192mil yen) ,the full contribution of the properties acquired in 11th Fiscal Period (+177mil
yen).

Operating Cost

3,935

4,288

+ 353

Expenses related to rent business of E SPACE TOWER (+135mil yen), expenses related to rent business of theproperties in 11th Fiscal Period(+50mil yen), repair expenses (+103mil yen), utilities expenses, etc.

Operating Income

2,823

3,317

+ 493

Non-operating expenses

1,245

1,560

+ 315

Ordinary Income

1,587

1,767

+180

Net Income

1,453

1,766

+ 313

395,798 unit

395,798 unit－

Dividend per Unit

3,671 yen

4,464 yen

+793yenOccupancy Rate

95.4％

92.4％

NOI Yield (annualized)

3.5％

3.6％

Number of Investment Unit

(Reference)Previous Forecast of
12th Fiscal Period(36 properties)

12th Fiscal Period(ended Nov. 2011)(36 properties)

ChangeExpenses related to release of security interest and new borrowings for the acquisition of E SPACE TOWER.

Main Reason

Operating Revenue

7,420

7,605

+185

Utilities income (+128mll yen), other lease business revenue (+55mil yen)

Operating Cost

4,238

4,288

+50

Utilities expenses (+133mll yen), consignment expenses (-19mil yen), depreciation (-20mil yen), and general andadministrative expenses (-41mil yen).

Net Income

1,622

1,766

+143

Dividend per Unit

4,100 yen

4,464 yen

+364yenOccupancy Rate

90.7％

92.4％

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

5

Highlights of Forecasts for the 13th and 14th Fiscal Period
Forecasts

13th Fiscal Period Forecast(million yen)
12th FP(Nov. 2011)(36 properties)

13th FP
Forecast(May 2012)(36properties)

Operating Revenue

7,605

Operating Cost

Differencecompared to12th FP

14th FP
Forecast(Nov. 2012)(36properties)

Differencecompared to13th FP

7,269

-336

7,055

-213

4,288

4,264

-24

4,128

-136

Operating Income

3,317

3,004

-312

2,927

-77

Non-Operating expenses

1,560

1,082

-477

807

-275

Ordinary Income

1,767

1,921

+153

2,119

+197

Net Income

1,766

1,919

+152

2,117

+197

395,798 口

395,798 口

Dividend per Unit

4,464 円

4,850円Expected Occupancy Rate

92.4 ％

90.8 ％

90.7 %

Expected NOI Yield

3.6 ％

3.3 ％

3.2 %



Number of Investment Unit

14th Fiscal Period Forecast

Tenant cancellations and rent reductions are expected to continue due toeconomic uncertainty and massive supply of office buildings, resulting inoperating revenue in the 14th Fiscal Period of 7,055 million yen (−213 millionyen)Decrease in expenses related to rental business and asset management
fees, etc. will result in operating expenses in the 14th Fiscal Period of 4,128
million yen (−136 million yen)Improvement in borrowing costs through refinancing of borrowings due forrepayment in May 2012, etc. will result in non-operating expenses in the 14th
Fiscal Period of 807 million yen (−275 million yen)

395,798 口+386 円

5,350 円Despite full contribution of rent revenue of E SPACE TOWER acquired in the
12th Fiscal Period, operating revenue in the 13th Fiscal Period will decrease
due to major tenants’ moving out of Daiwa Sarugakucho Building, Daiwa
Jimbocho Building, etc. and Considerable decrease in utility charges (−139million yen) will result in operating revenue in the 13th Fiscal Period of 7,269
million yen (−336 million yen)
Although utility charges and repair expenses, etc. will decrease, outsourcing
expenses, etc. will increase. As the result, operating expenses in the 13th
Fiscal Period will be 4,264 million yen (−24 million yen)
Cost reductions accompanying the refinancing of borrowings and no
expenses for attaining unsecured status for borrowings, which were incurred in
the 12th Fiscal Period, will lead to significant decrease in non-operating
expenses in the 13th Fiscal Period to 1,082 million yen (−477 million yen)

+500円

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

6

Issues and Activities of the Investment Corporation
Balance
Balance Sheet
Sheet ofof thethe 12th
12th Fiscal
Fiscal Period
Period(Fiscal(Fiscal Period
Period ended
ended May,
May, 2011)2011)（Unit：million yen）

Asset Issues and Activities

Liability Issues and Activities Diversify Financing Means Measures to Improve Profitability

Î Diversify lenders and financing means
upon completion of attaining unsecured
status for borrowings.

Î Improve occupancy rate through lease-up

Liabilities

Î Prevent cancellations by strengthening
relations with existing tenants
Î Implement strategic renewals aimed atboosting competitiveness Strengthen Collaboration with GroupÎ Strengthen leasing through collaboration
with Daiwa Securities

122,669
Financial Strategy
Status of interestbearing liabilities

Internal Growth
Leasing
Improvement
P12~18Assets

P28~31

 Reduce Interest Rate Costs

Î Continually strive to reduce financial costs
through improvement of financial structure
upon completion of attaining unsecured
status for borrowings

323,217
Net Assets

 Measures to Reduce Costs

Î Reduce energy consumption costs

200,548

Î Individualize some heat sources for airconditioning systems
Î Ensure appropriate construction costs

 Selective Purchases of PropertiesÎ Acquired E SPACE TOWER, second
largest in scale following Shinjuku
Maynds Tower, in the 12th Fiscal Period
Î Proactively invest in high-competitive
properties after thorough consideration

External Growth
Growth through asset
acquisitions

Forecast
Forecast EPS
EPS forfor thethe 13th
13th Fiscal
Fiscal Period
Period4,850 yen

P22~25

Forecast
Forecast EPS
EPS forfor thethe 14th
14th Fiscal
Fiscal Period
Period5,350 yenThis document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it intended for the purposes of solicitation. Daiwa Office Investment Corporation advises reader to make investment decisions at their own judgment.

7Section 2
Internal GrowthMarket Environment of Office Building (1)Office-scale building
large
Office Rent
Rent andand Vacancy
Vacancy Rate
Rate ofof largelarge-scalebuilding inin 55 Central
Central
Wards
of
Tokyo
Wards of Tokyo

Supply-scale officelargeSupply ofof largelarge-scale
office buildingbuilding inin TokyoTokyo(yen/tsubo)(thousand ㎡）
5 Central Wards of Tokyo, Large-scale Builg. Rent (Left axis)

50,00010.00％

2,500

5 Central Wards of Tokyo, All Builg. Rent (Left axis)
5 Central Wards of Tokyo, Large-scale Builg. Vacancy Rate (right axis)

45,0009.00％

5 Central Wards of Tokyo, All Builg. Vacancy Rate (right axis)

32
24

40,000

8.00％

2,000

Number of Completion

41 40 44 46 47

12

36

42

37

29 30
21
19
15
14 16

28

28 26
19

31 34

21 25

26
15

9
5

Construction Completion

12/11

8/11

10/11

6/11

4/11

2/11

12/10

0.00％
8/10

0
10/10

1.00％

6/10

5,000

4/10

2.00％

2/10

10,000

12/09

3.00％

8/09

15,000

10/09

4.00％

6/09

20,000

4/09

5.00％

2/09

25,000

12/08

6.00％

8/08

30,000

10/08

7.00％

6/08

35,000(Data) Sanko Estate * Large-scale building : over 200 tsubo (661.2㎡)** Office rent : excluding common area charge and store rents on the 1st and 2nd Floor

Construction Incompletion

1,500

1,000

500

0
86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15(Data) Mori Building (“Research for Large-scale office building in Tokyo Market Trend” announced on Sep. 15, 2011)* Large-scale office building : over 10,000㎡ of total floor area

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

9Market Environment of Office Building (2)（Rent）

Rent (yen/tsubo)

Trend
o
Toky
Trend ofof Office
Office Rent
Rent andand Vacancy
Vacancy rate
rate ofof 55 Central
Central Wards
Wards ofof TokyoTokyo（（2000/1～2011/12）
2000/1～
2000/1～2011/12）
2011/12）28,000（Vacancy Rate）
2008/926,000

Ｂ Class Bldg.

Large-scale Buildings of 5 Central Wards of TokyoA Class Bldg.

24,0002007/92001/6

Rental Market Clock(conceptual chart)

2000/1

22,0002003/10

20,00018,0002011/12
2008/916,0002007/9

Office Buildings of 5 Central Wards of Tokyo
2000/1

2001/6

2003/10

14,0002011/12

12,0000％1％(Data) Sanko Estate
Daiwa Real Estate Asset Management

2％3％

compiled by

4％

5％

6％

7％

* Large-scale Building : over 200 tsubo (661.2㎡) of 1 floor** Rent:

8％

9％

10％

(Vacancy Rate)

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

10Portfolio Map ~ Up or down in occupancy rate compared with previous Fiscal Period ~55 Central
Central Wards
Wards ofof TokyoTokyo andand Tokyo
Tokyo Metropolitan
Metropolitan Area
Area
As of Nov. 30, 2011
Occupancy rate compared withprevious Fiscal PeriodUp: 5 buildingsDown: 8 buildings

Unchanged : 23 buildings
Daiwa Misakicho

Shinjuku Ward

Daiwa Jimbocho
Jimbocho Place
Sunline Bldg. No.7
Shinjuku Maynds Tower

ShibuyaWard
SHIBUYAEDGEE SPACE TOWER*(acquisition in July 2011)

Daiwa Sarugakucho

Regional
Regional Cities
CitiesDaiwa Kudan

Tokyo
StationDaiwa Jingumae
Daiwa Ginza Annex

Daiwa Minami Aoyama

Daiwa Ginza
Daiwa Nishishimbashi
Daiwa Shibashi510
Daiwa Onarimon
Daiwa A Hamamatsucho

Daiwa Shibuya SS
Shibuya Station

Daiwa Kodenmacho
Nihonbashi MS Bld.

Chiyoda Ward
Chuo
Ward

Daiwa Nihonbashi Honcho
Daiwa Kayabacho Build.

Daiwa Kyobashi
Daiwa Ginza 1-chome
BPS Square
Daiwa Tsukiji
Daiwa Tsukiji616
Daiwa Tsukishima

Daiwa Shibadaimon
Daiwa Azabudai
Daiwa Shibaura

Minato Ward

Benex S-3

Daiwa Minami-Senba
Tokyo

Daiwa Shinagawa North•The occupancy rate of E SPACE TOWER increased compared to the occupancy rate

at the time of acquisition

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

11Analyses of Leasing Income (1)Occupancy
Occupancy Rate
Rate

Occupancy Rate and Forecast

100%
99.0%
97.0%

97.4%

(1) 12thth Period (Actual)
98.2% 98.3%

97.6% 97.7%
95.9%

95%

 The occupancy rate at the end of 12th Period recovered from 90.7%(F)* expected at
the announcement of 11th Period to 92.4%.

95.4%

 Occupancy rate of Daiwa Ginza Annex was up from 86.4%(F)* to 100.0%.

Occupancy Rate (Ex pected in 11th Period) 92.8%

92.4%
90.8% 90.7%

Occupancy Rate (Ex pected in 12th Period)
90%

92.4％

Occupancy Rate (Actual)

90.7%

 Occupancy rate of Daiwa Ginza 1chome was up from 76.4%(F)* to 88.1%.
 Occupancy rate of E SPACE TOWER was up from 82.6%(F)* to 100.0%.

90.4%(F)*: expected at the time of announcement of 11th Period
85.7%

85%
1st

2nd

3rd

4th

5th

6th

7th

8th

9th

10th

11th

12th

13th

14th

Period Period Period Period Period Period Period Period Period Period Period Period Period Period

13.4%

10.0%
7.2%
5.0%

7.4%

3.9%

3.2%

-5.0%

8th Period

9th Period-3.9%

10th Period

11th Period

-3.4%

-3.9%

-10.0%

Ex pected ratio of Moving-out
Ex pected ratio of Moving-in
Ratio of Moving-out
Ratio of Moving-in
5.2%
3.3%

3.8%

12th Period

13th Period

14th Period
-4.0%

-5.9%
-6.9%

(3) 14thth Period (Forecast)

90.7％

 The occupancy rate of 14th Period is expected to be 90.7%.
 Ratio of move-in: 3.8%, Ratio of move-out 4.0%
 Occupancy rate of Daiwa Kudan is supposed to be worse.

-12.0%-15.0%

 The occupancy rate of 13th Period is expected to be 90.8%.

 Major tenant of Ｄａｉｗａ Jimbocho is scheduled to leave in January 2012.

0.0%
7th Period

90.8％

 Ratio of move-in: 5.2%, Ratio of move-out:6.9%

Ratio
Ratio ofof Move
Move In
In // Out
Out
15.0%

(2) 13thth Period (Forecast)-14.7%

 The occupancy rate of 14th Period is estimated conservatively because of large
supply of office buildings and uncertain outlook of economy.

-20.0%* Ratio of Moving-in and Moving-out to Rentable Area

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

12Analyses of Leasing Income (2)Reasons
tenants
Reasons forfor mainmain tenants’tenants’’ leaving
leavingthth
betweenbetween 12
12th andand 1313th Period
PeriodNo.
(Leaving Area
Order)New
New Leases
Leases andand Cancellations
Cancellations **（Case)

Location

Reasons for leaving

1

Chiyoda

Reviewing sales branch by group
restructuring2

ChiyodaFloor consolidation for operational
efficiency

New Location
Chuo andothersChiyoda

40
30

Chuo

Downtrend of business environment

31

30

24
17

20
10

3

33

6

5

18

16
4

TBD

-2

0

4

MinatoConsolidation with intention from parent
company

5

MinatoMoving of headquarter for intention from
Chuo
parent company and cost cut

6MinatoMoving of headquarter by acquiring its
own building

Shinagawa

Koto

-10
-20
-20

-12

-14

-19

-20

-24

-30
-40

7

ShibuyaMoving to neighborhood for cost cut

Meguro-50

8ToshimaMoving to better location and space
expansion by good business conditions

9

MinatoMoving to neighborhood for cost cut

10

Chuo

Space expansion at the time of fulloccupancy

MinatoNeighboring
Building(Minato)Neighboring
Building(Chuo)-53-60
7th Period

8th Period

9th Period

New Leases
12th Period
New Leases
Cancellations

10th Period

11th Period

Cancellations

Space
Space
Space
Expansion Consolidation Reduction
10
1
0
3
3
7

12th Period

Difference
BetterLocation

Other
2
2

T otal5
5

18
20* Excluding residence and warehouse

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

13

Analyses of Leasing Income (3)Average
Average Contract
Contract Rent
Rent andand Market
Market Rent
Rent(yen/tsubo)

Contract
Contract Renewal
Renewal

25,000█ 13th Period Contract Renewal Target

Renewal Target Area
23.3%

20,22620,00019,692

The rate of Contract Renewal Target Area to total rentableare(189,755.60㎡) at the end of 12th Period
Exception of Renewal
Target Area 76.7%█ 12th Period Contract Renewal

19,585CancelledArea(Renewal target)
3.5%

Average Contract Rent*
Average Contract Rent exculding E Space Tower

Cancelled Area
(except Renewal
target) 3.2%

The rate of Contract Renewal Area during 12th Period to total
rentable are (182,593.36㎡) at the end of 11th Period

Miki Shoji Tokyo 5 Central Wards Office Rent

RenewalArea 14.4%

15,0004th
Period5th
Period6th
Period7th
Period8th
Period9th
Period10th
Period11th
PeriodException of Renewal
Area 78.9%

12th
Period* Average of rent that tenants contracted by the end of each Period pay(Million yen)Contract
Contract Rent*
Rent* Increase
Increase andand Reduction
Reduction

1,200

1,150

Increase by
New
Acquisition

Increase from New
LeasesDecrease from
Tenants’Cancellations

Decreasefrom Rent
Revisions

28.4%

48.4%

19.6%

3.5%
11th
Period

1,100

1,050

12th
Period

4.7%

40.8%

10th

45.0%

53.9%

Period

9.5%

34.0%

12.1%

1,000

End of Nov. 2011
End of May 2011
Monthly Contract Rent
Monthly Contract Rent
* Monthly Contact Rent means a total final ret from tenants who contracted by the end of the
Fiscal Period.

0%

10%
20%
Decrease

30%

40%
Increase

50%

60%
70%
Unchanged

80%

90%
Cancell

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

100%

14

Performance of Shinjuku Maynds Tower & E SPACE TOWER
Shinjuku
Shinjuku Maynds
Maynds Tower
Tower andand EE SPACESPACE TOWER
TOWER█ Ratio of Acquisition Price

Move
Move inin andand out
out ofof EE SPACESPACE TOWER
TOWER█ Ratio of Total Floor Area

Shinjuku Maynds Tower
E SPACE TOWER：
50.7％
Other Properties:
49.3％

Shinjuku Maynds Tower
E SPACE TOWER：
35.3％

Shinjuku Maynds Tower *Total Floor Area
83,981.77㎡

998.35㎡

18,145.04㎡

E SPACE TOWER* The figure shown for the total floor area of Shinjuku Maynds Tower is described figure equivalent to 6/7

100.0%

9 6.6%

99 .9 %

99 .1 %

99 .9 %

99 .9 %

100.0%

Occupied Room
(Move-out in Sep. 2011)

8th Floor

Vacant Room

5th Floor

Vacant Room

1st Floor

Occupaied Room
(Move-out in Sep. 2011)

Occupied Room
(Move-in of new tenant in
Oct. 2011)
Occupied Room
(Space Expansion of Existing
tenant "B" in Nov. 2011)
Occupied Room
(Move-in of new tenant in
Sep. 2011)
Occupied Room
(Space Expansion of Existing
tenant "A" in Oct. 2011)

EE SPACESPACE TOWER
TOWER Occupancy
Occupancy Rate
Rate

99.9%

100.0%

1 00%
99 .6 % 9 8.0%

78 .1 %

89.3%

11th Floor（0.5 Floor）

Shinjuku
Shinjuku Maynds
Maynds Tower
Tower Occupancy
Occupancy Rate
Rate
99.4%

the end of November 2011

Occupancy Rate

Other Properties
64.7％

Standard Floor Area
1,685.95㎡

As of Acquisition

80%

100%

92.8%

100.0% 100.0% 100.0% 100.0% 100.0%

96.5% 100.0% 100.0% 98.7%

80%

60%

60%
E SPACE TOWER Expected Occupancy Rate
Sh injuku Maynds Tower Expected O ccup ancy Rate

40%

40%

E SPACE TOWER Occupancy Rate

Sh injuku Maynds Tower Occupa ncy Rate
20%

20%

0%
4 th
P eriod

5th
Pe riod

6th
Pe riod

7th
Per iod

8th
Per iod

9th
Per iod

1 0thPeri od

1 1thPeri od

12 th
Perio d13 th
Perio d14th
P erio d0%
4thPeriod5th
Period6th
Period7th
Period8th
Period9th
Period10th
Period11th
Period12th
Period13th
Period14th
PeriodThis document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it intended for the purposes of solicitation. Daiwa Office Investment Corporation advises reader to make investment decisions at their own judgment.

15

Internal Growth Strategies
Improve occupancy rate through lease-upÎ Strengthen collaboration with brokers.
Hold regular meetings and regular visits with various brokers.
Î Implement prompt and smooth leasing.
Person in charge of asset management to be present at time ofproperty viewing, and establish a point of contact and collaborationand means of communication with the property managementcompany.
Î Enhance property recognition with up-to-date information.
Implement face-to-face leasing by visiting with regularly-updated
vacancy information and property information.

Prevent cancellations bystrengthening relations withexisting tenants
Î Enhance tenant satisfaction bystrengthening communication with existing
tenants.
Î Visit all tenants on a regular basis andensure timely response by deepening
interaction among people and respond totenants face-to-face.

Implement strategic renewals
aimed at boosting
competitivenessÎ Establish Construction Manager.
Î Implement value enhancement of existing
properties.
Î Scrutinize construction content and ensure
appropriate construction costs.

“Boji-Tettei”
Accomplishing ordinary tasks thoroughly and carefully enables
us to achieve extraordinary results
Measures to reduce costs

Strengthen collaboration with
Daiwa Securities GroupÎ Reduce energy costs by changing power
supplier for newly-acquired properties.
Î Reduce costs by individualizing some heatsources for air-conditioning systems at
Shinjuku Maynds Tower.

Î Reinforce leasing by utilizing Daiwa
Securities’ branch network.
Î Implement leasing that utilizes Daiwa
Securities Group’s network of corporateclients.

*Bonji Tettei : Focus on basic operations with thorough consideration.

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

16

Properties Subject to Leasing Improvement
Daiwa Sarugakucho
Address
Completion
Total Floor Area
Occupancy Rate

Daiwa Kyobashi
Address
Completion
Total Floor Area
Occupancy Rate

2-6-10 Sarugakucho Chiyoda-ku, Tokyo
June 1985
4,303.97㎡
0.0％

 3-minute walk from Hachobori Station on the JR Keiyo Line

 6-minute walk from Suidobashi Station on the JR Sobu Lineand the Tokyo Metro Hibiya Line, and 3-minute walk fromTakaracho Station on the Toei Subway Asakusa Line.

 Located in a business area with many universities and various

types of schools

 Former tenant, to whom the entire building was being leased, vacated the property in

September 2011 due to group restructuring.
 Aim for early recovery of the occupancy rate by implementing tenant targeting that takes

into consideration leasing the entire building and the characteristics of the area.

Sunline Building No.7
Address
Completion
Total Floor Area
Occupancy Rate

4-3-3 Hachobori, Chuo-ku, Tokyo
October 1974
4,069.15㎡
53.7％

 Tenant vacated the property in February 2011 due to group restructuring. This is aproperty that continued to have a low occupancy rate due to the impact of the Great
East Japan Earthquake, but inquiries to view the property, etc. have increased.
 Aim to recover the occupancy rate by promoting the property’s convenience oftransportation, appealing design of office space, high level of visibility, etc.

Daiwa Jimbocho
4-7-2 Kojimachi, Chiyoda-ku, Tokyo
October 1987
3,942.61㎡ (the whole building)
68.1％

Address
Completion
Total Floor Area
Occupancy Rate 2-minute walk from Kojimachi Station on the Tokyo Metro 1-minute walk from Jinbocho Station on the Tokyo Metro

Yurakucho Line.

Hanzomon Line ,Toei Subway Mita Line and Toei Subway
Shinjuku Line.

 High visibility property located in Shinjuku Street.
 Foreign tenant vacated the property in June 2011 due to withdrawal of its business fromthe Japanese market.
 Aim for early recovery of the occupancy rate by promoting the property’s area as one

that has a small supply of office space, convenience of transportation and excellence inproperty design.

2-4-63 Kanda Jimbocho, Chiyoda-ku, Tokyo
March 1997
4,247.18㎡
100.0％

 Main tenant is scheduled to vacate the property during the 13th Fiscal Period due toimprovement of business efficiently. Occupancy rate is expected to fall considerably.
 Aim for early recovery of the occupancy rate by promoting the property’s convenienceof transportation.

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

17Strategic Renewals Aimed at Improving in Building Capability
RenewalRenewal Case
Case implemented
implemented inin 12
12thth Period
PeriodCapitalCapital Expenditures
Expenditures forfor 13th
13th Fiscal
Fiscal Period
Period█ Daiwa Ginza 1chome :Common Area Renewal（Before)（After)（After)（Before)█ Shinjuku Maynds Tower: (Ensuring Safety)
Change of glass plate of ceiling lights in wind shelter of the entrance（Before)PurposeScheduled
implementation
periodTotal
Amount(million yen)

Daiwa
Sarugakucho

Renovation work for air
conditioning, lighting energy
conservation and common area

2012/1~2012/3

400

Shinjuku Maynds
Tower

Introduction of heat source

2011/12~2012/5

270

Daiwa NishiShimbashi

Updating package air
conditioners

2011/6/~2012/1

150

Daiwa Jimbocho

Renovation work for commonarea

2011/12~2012/1

50

Shinjuku Maynds
Tower

Construction work for energy
conservation (lighting ofparking)

2012/1~2012/5

21

Name of realestate properties（After)█ Daiwa Jimbocho :Common Area Renewal(Present)(Image)This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it intended for the purposes of solicitation. Daiwa Office Investment Corporation advises reader to make investment decisions at their own judgment.

18

Establishment of Environmental Policies█ Environmental Policies
Daiwa Office Investment Corporation recognizes the significance of environmental issues in the real estate sector and, as its corporate social
responsibility, is committed to continuous efforts for environmental friendliness, alleviation of environmental burdens and other initiatives in
conducting real estate investment management operations and other corporate activities.
1. Implementation of Resource and Energy Saving
Daiwa Office Investment Corporation will proactively promote efficient use of resources and energy, and contribute to realizing a lowcarbon society through such measures as employing technologies and systems designed to save resources and energy.
2. Implementation of Environmental Conservation
Daiwa Office Investment Corporation will work to contribute to realizing a recycling oriented society through efforts for saving water, reducing
waste generation, re-using and recycling as it continuously conducts corporate activities.
Daiwa Office Investment Corporation will also work to promote green procurement, greening office buildings and improving the officeenvironment, among other efforts, to address biological diversity and achieve environmental symbiosis.
3. Promotion of Environmental Disclosure/Communication
Daiwa Office Investment Corporation will work to proactively disclose environment-related information, as well as aim to broadly communicate
with society, and to coordinate and cooperate with tenants, communities, business partners and other stakeholders.
4. Establishment and Operation of Environmental Management System
Daiwa Office Investment Corporation will establish an environmental management system and work to continuously enhance its
environmental activities. Daiwa Office Investment Corporation will also work to further improve the awareness of officers and employees inenvironmental preservation by conducting environmental education and enlightenment activities.
5. Adherence to Environment-Related Laws and Regulations
Daiwa Office Investment Corporation will adhere to its internal environmental policies and guidelines as well as to environment-related laws
and regulations, in an effort to preserve the environment.
This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it intended for the purposes of solicitation. Daiwa Office Investment Corporation advises reader to make investment decisions at their own judgment.

19

Tangible Approach█ Shinjuku Maynds Tower:
Acquisition of DBJ Green Building Certification
Shinjuku Maynds Tower received the “Silver” rank of DBJ Green Building Certificationfrom Development Bank of Japan Inc. (DBJ) recognized as a building with excellent“environmental & social consciousness.”
The certification was in recognition of Shinjuku Maynds Tower incorporating environmental
and energy-saving technologies, while also enhancing building occupancy features by enrichingfacilities that are of convenience for tenants, such as incorporating restaurants and clinics.

(Photo) Shinjuku Maynds Tower█ Shinjuku Maynds Tower:
Implementation of Investment for Risk Avoidance in Times of Earthquakes
The glass plates of ceiling lighting in the wind shelter of the entrance (ceiling height: about 10m) at Shinjuku Maynds Tower
were found to have moved a little at the time of the Great East Japan Earthquake. Reduction of weight using glass cloth andinstallment of a system for preventing falling objects using wires will realize avoidance of secondary damage from falling ceilingmaterials.

█ Daiwa Nishi-Shimbashi Building :Grant of Subsidies Decided for Introduction of Energy-saving Equipment(Photo) Wihd Shelter of Shinjuku Maynds Tower

Sustainable open Innovation Initiative decided to grant subsidies to Daiwa Nishi-Shimbashi Building in recognition of energysaving performance in the upgrading of air-conditioning, lighting and central monitoring systems. A study of construction
techniques led to the realization of construction conducted while tenants continue to occupy the building. In addition, it also
reduces utility charges for tenants and thereby contributes to enhancement of tenant satisfaction.

(Photo) Nishishimbashi

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

20Section 3External GrowthThe Real Estate Market and Trading Performance
The
The Real
Real Estate
Estate Market
Market andand Trading
Trading Performance
Performance（Number）
800

30

Number of Transactions

Number of Transactions
Lending Stance DI (Real Estate)
Lending Stance DI (All Industries)

700
600
500
400
300
200

20
10
0
-10
-20
-30
-40
-50

100
0
2005 2nd 2006 1st 2006 2nd 2007 1st 2007 2nd 2008 1st 2008 2nd 2009 1st 2009 2nd 2010 1st 2010 2nd 2011 1st 2011 2nd 2012 1st 2012 2nd
Half
Half
Half
Half
Half
Half
Half
Half
Half
Half
Half
Half
Half
Half
Half

DI=Diffusion Index (Aboveis easy (accommodating),
whereas below
is severe)

Source: Compiled by the Investment Corporation based on data from the “Real Estate Transaction Survey” of the
Urban Research Institute (Mizuho Trust and Banking’s think tank) and information from the Bank of Japan’s website

00（Bollion yen）
80%

400
350.0
350
59.0%
300

54.4%

54.4%
Total Acquisition Price

250

150

70%

311.3
54.0%

52.2%

287.0

283.4

Estimated LTV （Acquisition Price）
LTV （Acquisition Price）
138.4
130.4
110.8

200

100

60.8%
265.0

265.0

265.0

269.1

278.1

287.3

60%
42.4%
35.3%

22.6%

26.4%

27.4%

79.5

26.9%

29.8%

40%

30.0%

30%
20%

Invest aggressively forthe competitive properties
screened carefully

50

50%

10%
0%

0
Listed1st
Period2nd
Period3rd
Period4th
Period5th
Period6th
Period7th
Period8th
Period9th
Period10th
Period11th
Period12th
Period13th
Period14th
PeriodThis document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it intended for the purposes of solicitation. Daiwa Office Investment Corporation advises reader to make investment decisions at their own judgment.

22

Portfolio and Acquisition Policy
Acquisition Policy

Distribution
Distribution Chart
Chart ofof Portfolio
Portfolio Properties
Properties(Total Floor Area (㎡) Investing heavily in the five central wards of Tokyo equivalent area.

Portfolio Properties

120,000

 For the time being, invest heavily in younger A class buildings and younger B classbuildings (1) within 20 years of building age.
 Aim to improve stability and profitability of our portfolio by achieving new buildings

A Class Buildings

100,000

Investment
Investment Ratio
Ratio

Shinjuku Maynds Tower

Area
Area
80,000 Consider property replacement, such as selling Zone (2) properties and purchasing
Zone (1) properties.

55Central
CentralWards
Wards
Tokyo
Tokyo
Metropolitan
Metropolitan
Regional
RegionalCities
CitiesInvestment Target

60,000

Ratio
Ratio
92.3%

Approach for the Property Acquisition

6.2%
1.5%

Classification
Classification
Ａ
Class
ＡClass

Ratio
Ratio
43.0%

Ｂ
Class
ＢClass57.0%

 Gain advantage in the purchase competition by constantly maintaining abundant cash
reserves and utilize the support capacity of our sponsor, etc. to lead to negotiation at moreadvantageous terms than competitors
 Not belonging to a group comprised of real estate companies, etc., allows for collecting
various types of property information

40,000 Expanding new pipelines by acquiring debt portions of beneficiary rights for which money
claims are held in trust and where real estate have been established as collateral.

(1)
E SPACE TOWER
20,000(2)

 Strengthen alliance with the Daiwa Securities Group and exert the Group’s strengths in
the areas of property information collection and joint projects, etc. to proactively takeadvantage of the marketing ability of the Daiwa Securities Group Aim to improve stability
and profitability of our portfolio by achieving new buildings

50.0** B class buildings: Total floor area over 2,000㎡ but less than 30,000㎡

B Class Buildings*A class buildings: Total floor area is over 30,000㎡

0
0.0

10.0

20.0

30.0

40.0

60.0
(Building Age)

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

23

Acquisition of Properties Under Review
Number of Property Acquisition

Real Estate Property Selling Needs
General Business Companies（Case）（Case）

50

500
Number of properties under review（ left axis）
Number of consideration under review in detail（ right axis）

 Selling properties taken off the balance sheet to improve the balance
sheet, financial restructuring, etc. or selling properties due to change
in corporate strategy of the parent company, etc.

Developers
400

40

300

30

200

20

 Selling properties, after development and progress is made in leaseup, for the purpose of recouping the funds for properties that haveentered into operation as revenue-generating property.

Lenders, etc.
 Selling properties for which the recoupment of funds would be promoted dueto there being no prospect of repayment of borrowings. In addition, in thecase of foreign lenders, etc., selling properties for which the recoupment offunds would be promoted for the purpose of foreign exchange gains or selling
properties due to withdrawal of business operations from the Japanesemarket.

Funds
10

100

 Selling properties for repayment of loans becoming due or businessplans reaching the end of the investment term.

Individuals, and Small-sized Business Companies
Small- to MediumMedium
Medium-sized00
10th Fiscal Period

11th Fiscal Period

12th Fiscal Period

 Selling properties for the purpose of liquidating and disposing ofproperties for inheritance tax measures, balance sheet improvements
or other reasons.

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

24

Recent Property Acquisition
E SPACE TOWER (acquiring in July 8, 2011)
Acquisition Price

24.00 Billion yen

Expected NOI*

1,151 Million yen

 Convenient location in Tokyo
The property is located within about a 7-minute
walk to Shibuya Station on the JR Lines and on
the Tokyo Metro Lines and a 3-minute walk to
Shinsen Station on the Keio Inokashira Line.

 Competitive rare property
The Occupancy Rate of E SPACE TOWER was
89.3% at the time of acquisition, but increased to100.0% for space expansion of existing tenants.
The large-scale, high quality and new buildings
near Shibuya station are possible to maintain acompetitive edge.

LocationMaruyamacho Shibuya-ku, Tokyo

Site Area

2,998.38㎡

Structure

S/SRC

Floor

B1/15F

Total Floor Area

18,145.04㎡

Leasable Floor Area 13,960.85㎡* Expected NOI is described as the figure released on June 30, 2011

Construction

October 31, 2002

Acquisition Price

24.00 Billion yen

Occupancy Rate

100.0％ (as of Nov. 30,2011)

Settlement Date

July 8, 2011

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

25

Properties Acquired after The Sponsor Change
Acquisition
time

Property name

9th Fiscal Period
Daiwa Jimbocho

10th Fiscal Period
Daiwa NishiShimbashi

Daiwa Kudan

11th Fiscal Period
Daiwa Kayabacho
Building

Jimbocho Place

12th Fiscal Period
E-SPACE TOWER
Total

Address

Acquisition Price

SellerAcquisition date
Building age
at the time ofacquisition
NOI yield
at the time ofacquisition

Kanda Jimbocho,
Chiyoda-ku, Tokyo

Nishi-Shimbashi,
Minato-ku, Tokyo

Kudan Minami,
Chiyoda-ku, Tokyo

NihonbashiKayabacho,
Chuo-ku, Tokyo

Kanda Jimcocho,
Chiyoda-ku, Tokyo

Maruyamacho
Shibuya-ku, Tokyo－

5,000 million yen

4,000 million yen

5,600 million yen

3,550 million yen

24,000 million yen

46,300
million yen

Japan Core Asset II
Ltd.

Shining Nova theFifth B TMK

Daiwa Property Co.,Ltd.

Tokyu Land
Corporation

Endeavor Realty
Fund Ltd.

－March 10, 2010

August 13, 2010

September. 2, 2010

March 25, 2011

March 29, 2011

July 8, 2011－13.0 years

17.0 years

23.4 years

0.9 years

1.1 years

8.7 years

9.7years*

6.0％

5.5％

5.3％

5.1％

5.1％

4.8％

5.1％*

4,150 million yen

ORIX JREIT Inc.

* Building age and NOI yield at the time of acquisition is calculated by the weighted average acquisition priceThis document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it intended for the purposes of solicitation. Daiwa Office Investment Corporation advises reader to make investment decisions at their own judgment.

26

Section 4
Financial Strategy

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

Ratio
-to Short-Term Borrowings
Ratio ofof LongLong-toShort-Term
Borrowings（Billion yen）

280

70%

11th Fiscal Period

12th Fiscal Period

Interest-bearing Liabilities

32.3%

LTV (based on acquisiton price)240

Expected LTV

60%

45.2%
54.8%

200

67.7
%

50%

Upper limit range LTV in themedium-term target
160

40%

Current position of long-term borrowings
120

30%

80

20%

40

10%

Ratio
Ratio ofof Fixed
Fixed –– toto Floating
Floating Borrowings
Borrowings
11th Fiscal Period

52.8%

12th Fiscal Period

28.2
%

38.9%
71.8
%

0%

1s
t

Pe
2n rioddPe
3r rioddPe
4t riodhPe
5t riodhPe
6t riodhPe
7t riodhPe
8t riodhPe
9t riodhP
10 erio
d
th
Pe
rio
11
d
th
Pe
ri o
12
d
th
Pe
ri o
d

0

Long-term borrowings* LTV( based on acquisition price) ＝Total interest-bearing liabilities / Total acquisition price ofproperties held at the end the Fiscal Period

8.2%
Fixed interest

Floating interest (capped)

Floating interest

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

28

Status of Interest-bearing Liabilities (2)Continuous decline in debt cost by refunding from high-cost borrowingsand decreasing in financial related expenses is estimatedRepayment
Repayment Dates
Dates(Million yen）

Debt
Debt Cost
Cost Rate*
Rate* (annualized)(annualized)

25,000Borrowed on 30.Sep 2011
Release of Security

Aozora Bank
(T+2.19%)
Borrowed on 8.July 2011
Acquisition of the property
Sumitomo Trust & Banking
Fukuoka Bank
Orix Bnak

3,500

5.0%

Borrowed on 8.July 2011
Acquisition of the property

2,000

SMBC
Mizuho Trust & Banking
Aozora Bank
Shinsei Bank

6,000

Borrowed on 30.Sep 2011
Release of Security

41
15,000

4.0%

3,925

10,0003.0%

8,900
19,60019,000Development Bank of Japan
Shinsei Bank
Resona Bank

5,000

1.0%

11,843
5,000

2,000

◆

Debt Cost Rate◆

Expected Debt Cost Rate

5,000

5,481

0.0%

4,000

3,000

3,500

1s
t

5,000

0

2.0%

1,000
13ｔｈ Period 14th Period 15th Period 16th Period 17th Period 18th Period 19th Period（ May.12） （ Nov.12） （ May.13） （ Nov.13） （ May.14） （ Nov.14） （ May.15）

Pe
rio
d
P
er
io
3r
d
d
Pe
r
io
4t
d
h
P
er
io
5t
d
h
P
er
io
6t
d
h
P
er
io
7t
d
h
P
er
io
8t
d
h
P
er
io
9t
d
h
P
er
10
io
d
th
Pe
r
11
io
d
th
Pe
r
12
i
th od
Pe
ri
13
th od
Pe
rio
14
d
th
Pe
rio
d

125

Mizuho Corporate Bank
Mitsubishi UFJ Trust & Banking
Gunma Bank

1,000

28th Period（ Nov.19）2nd20,000

6.0%* Debt Cost Rate (annualized): (Interest Expense + Financial Related Expenses)/
Interest-bearing Liabilities)

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

29

Status of Interest-bearing Liabilities (3)List of Interest-bearing Liabilities
LenderAozora Bank, Ltd.

TypeInterest Rate(%)

Date ofadvanceDue date

19,600 Float

T+2.19%09/5/21

12/5/21Mizuho Corporate Bank, Ltd.

4,900 Float

T+0.40%11/9/30

14/3/31

7 FloatT+1.00%10/2/26

12/8/31

Mitsubishi UFJ Trust and Banking Corporation.

3,000 Fixed

0.96%

11/9/30

14/3/31

4,906 Fixed

1.81%

09/9/18

12/9/18

The Gunma Bank, Ltd.

1,000 Float

T+0.40%11/9/30

14/3/31

Sumitomo Mitsui Banking Corporation.

13,500 Float

T+0.60%11/7/8

14/7/8Mizuho Trust and Banking Co., Ltd.

3,000 Float

T+0.60%11/7/8

14/7/8

Aozora Bank, Ltd.

1,500 Float

T+0.60%11/7/8

14/7/8

Shinsei Bank, Ltd.

1,000 Float

T+0.60%11/7/8

14/7/8Resona Bank, Limited.

3,000 Float

T+0.50%11/8/31

15/2/27

Development Bank of Japan, Inc.

3,000 Fixed

1.09%

11/9/30

15/3/312,000 Float

T+0.50%11/9/30

15/3/31

Tha Kagawa Bank Ltd.(*)
Sumitomo Mitsui Banking Corporation. (*)
The Sumitomo Trust and Banking Co., Ltd. (*)

3,434 Fixed

1.81%

09/9/18

12/9/18

Development Bank of Japan, Inc. (*)

2,662 Fixed

1.54%

09/9/18

12/9/18

The 77 Bank Ltd. (*)

985 Fixed

1.81%

09/9/18

12/9/18

The Chuo Mitsui Trust and Banking Co., Ltd. (*)

1,970 Fixed

1.79%

09/11/30

12/11/30

Taiyo Life Insurance Company. (*)

985 Fixed

1.79%

09/11/30

12/11/30

The Gunma Bank, Ltd. (*)

Total current maturities of long term borrowings

Term

Lender

985 Float

T+1.00%09/11/30

Balance(million yen)Term

12/11/30

LenderBalance(million yen)

Shinsei Bank, Ltd.

35,535TypeInterest Rate(%)

Date ofadvanceDue date

ORIX Bank Corporation.

1,000 Float

T+0.40%11/7/8

13/1/10

Aozora Bank, Ltd.

3,500 Float

T+1.00%10/2/26

13/2/28

The Shizuoka Bank, Ltd

1,000 Float

T+1.00%10/2/26

13/2/28

Tha Kagawa Bank Ltd.(*)
Long term borrowings

Balance(million yen)Long term borrowings

Current maturities of long term borrowings

Term(As of Nov 30, 2011)981 Float

T+1.00%10/2/26

13/2/28

Kansai Urban Banking Corporation.

5,000 Fixed

0.98%

11/6/30

13/6/28

Sumitomo Mitsui Banking Corporation.

5,000 Float

T+0.50%11/7/8

13/7/8Tha Bank of Fukuoka, Ltd.

1,000 Float

T+0.50%11/7/8

13/7/8

Shinsei Bank, Ltd.

2,000 Float

T+0.90%10/9/2

13/7/31

Type

Total long-term borrowings

65,881

Total borrowings

101,416

Interest Rate(%)

Date ofadvanceDue date（*）Balance is rounded down to less than million yen.
Fixed Interest Rate is rounded to the second decimal.
（**）Portions of long-term installment loans that are due within 1 year have been categorized as current
maturities of long term borrowings.

Investment Corporation Bonds
Term

LenderBalance(million y en)

Ty pe(As of Nov 30, 2011)
Interest Rate

Date of(%)

adv ance

Due date

Long-term No. 1 Unsecured and Subordinated

3,500

Float

T+240bps

09/9/17

19/9/17Long-term No. 2 Unsecured Inv estment Corporation

5,000

Fix ed1.87%

10/6/24

6/24/13

Total investment corporate bonds

8,500This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it intended for the purposes of solicitation. Daiwa Office Investment Corporation advises reader to make investment decisions at their own judgment.

30

Tha Bank of Fukuoka, Ltd.

2,000 Float

T+0.85%

10/9/30

13/9/30

ORIX Bank Corporation.

1,500 Float

T+0.85%

10/9/30

13/9/30

Shinsei Bank, Ltd.

1,000 Float

T+0.55%

11/5/25

13/11/29

Resona Bank, Limited.

2,000 Float

T+0.70%11/3/18

14/3/18

Resona Bank, Limited.

2,000 Float

T+0.70%11/3/25

14/3/18

Sumitomo Mitsui Banking Corporation.

2,000 Float

T+0.60%11/3/25

14/3/25

Status of Interest-bearing Liabilities (4)Balance by interest-bearing liabilities (Including Investment Corporation Bonds)
112th
2th Fiscal
Fiscal Period
Period11th Fiscal
11th
Fiscal Period
PeriodName of Financial Institution

Balance(million yen)

Share (%)

Name of Financial Institution

Balance(million yen)

Share (%)

Period over
Period（%）

Aozora Bank

23,100

26.8%

Aozora Bank

24,600

22.4%

6.5%

Shinsei Bank

10,100

11.7%

Sumitomo Mitsui Banking Corporation

20,406

18.6%

194.7%

Resona Bank

7,000

8.1%

Sumitomo Trust and Banking

8,434

7.7%

144.7%

Sumitomo Mitsui Banking Corporation

6,925

8.0%

Resona Bank

7,000

6.4%

0.0%

Kansai Urban Banking Corporation

5,500

6.4%

Shinsei Bank

6,000

5.5%

-40.6%

American Life Insurance Company

5,000

5.8%

Development Bank of Japan

5,662

5.2%

106.8%

Mizuho Bank

3,500

4.1%

Kansai Urban Banking Corporation

5,000

4.5%

-9.1%

Sumitomo Trust and Banking

3,447

4.0%

Mizuho Corporate Bank.

4,900

4.5%

－

Development Bank of Japan

2,737

3.2%

Fukuoka Bank

3,000

2.7%

50.0%

Fukuoka Bank

2,000

2.3%

Mizuho Trust and Banking.

3,000

2.7%

－

Chuo Mitsui Trust and Banking

1,977

2.3%

Mitsubishi UFJ Trust and Banking

3,000

2.7%

－

Orix Trust Bank

1,500

1.7%

Orix Bank

2,500

2.3%

66.7%

Shizuoka Bank

1,000

1.2%

Gunma Bank

1,985

1.8%

100.8%

77 Bank992

1.2%

Chuo Mitsui Trust and Banking

1,970

1.8%

-0.4%

Kagawa Bank

992

1.2%

Shizuoka Bank

1,000

0.9%

0.0%

Taiyo Life Insurance

988

1.1%

Kagawa Bank

988

0.9%

-0.4%

Gunma Bank

988

1.1%

77 Bank

985

0.9%

-0.8%

Investment corporation bonds

8,500

9.9%

Taiyo Life Insurance

985

0.9%

-0.4%

Total

86,250100.0%

Investment corporation bonds

8,500

7.7%

0.0%

109,916100.0%－

Total（*） Balance is rounded down to less than million yen.
During 12th Period, borrowed from new financial institution in Red box.
This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it intended for the purposes of solicitation. Daiwa Office Investment Corporation advises reader to make investment decisions at their own judgment.

31

Unitholders
Unitholders’ Share by Investor Type

Investor Type11th Fiscal
PeriodNumber ofUnit

12th Fiscal
PeriodNumber of
Unit

Change of
Unit

List of Top 10 Investors
No.

Investor Name

Rate

Individuals

36,74637,326

+580

9.43%

Financial Institutions

134,610

126,308-8,30231.91%

Commercial Bank

0

0

0

0.00%

Regional Bank

1,534

1,534

0

0.39%

Trust Bank

127,211

118,524-8,68729.95%

11th Fiscal 12th Fiscal
PeriodPeriodChange of
Unit
Number of Number of
Unit
Unit

Rate

1

K.K. Columbus

68,90568,905017.41%

2

Daiwa PI Partners Co. Ltd.

60,00060,000015.16%

3

Japan Trustee Services Bank, Ltd.
(Trust Account)

59,64658,514-1,132

14.78%

4

Daiwa Securities Group Inc.

51,89351,8930

13.11%

5

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

30,57927,788-2,791

7.02%

Life Insurance

223

438

+215

0.11%

Non-life Insurance

5,369

5,369

0

1.36%

6

Trust & Custody Services Bank, Ltd.
(Securities Investment Trust Account)

25,13622,658-2,478

5.72%

Other Financial Institutions

273

443

+170

0.11%

7

Goldman Sachs International

7,055

13,124+6,069

3.32%

Other Domestic Corporation

132,640

132,560-80

33.49%

8

The Master Trust Bank of Japan, Ltd.
(Investment Trust Account)

10,341

7,878-2,463

1.99%

Foreigner

37,84044,577+6,737

11.26%
9

Nomura Bank (Luxembourg) S.A.

9,893

6,548

-3,345

1.65%

Securities

53,96255,027+1,06513.90%

395,798

395,7980

100.00%10

The Fuji Fire and Marine InsuranceCo., Ltd.

5,369

5,369

0

1.36%

Total

（*）Rounded to the second decimal.

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

32

Activities in the 13th Fiscal Period█

Internal Growth →¾“Bonji-Tettei”「Accomplishing ordinary tasks thoroughly and carefully enables us to achieve
extraordinary results.」

In order to recover internal growth revenue-generating capacity, focus on decreasing the number of tenant move-outs. Strengthen relations withtenants and promptly respond to tenant demands so as not to cause tenant dissatisfaction. Increase the frequency of contact with all tenants anddeepen interaction among people and respond to tenants face-to-face.

█¾

Increasingly strengthen collaboration with various brokers to improve occupancy rate through lease-up.

¾

Implement strategic renewal investments aimed at enhancing property value as well as maintaining and increasing tenant satisfaction.

External Growth¾→ Proactively invest in competitive properties after thorough consideration

LTV (based on acquisition price) at the end of the 12th Fiscal Period was 35.3%. By taking advantage of the low LTV, expeditiously acquire highlycompetitive properties.

█¾

Aim for early achievement of the medium-term target total acquisition price of 350 billion yen (expected LTV (based on acquisition price): 42.4%).

¾

Strive to improve the existing portfolio by acquiring relatively-new and highly-competitive properties.

Financial Strategy → Continue to strengthen financial structure and reduce debt costs¾

Strengthen ties with our financial institutions for further reduction of debt costs.

¾

Increasingly build on bank formation.

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

33Section 5
AppendixSummary of Results for the 12th Fiscal Period (1) ~Balance Sheet~
Comparison with Results of the 11th Fiscal Period
11th Fiscal Period

12th Fiscal Period

11th Fiscal Period

12th Fiscal Period

As of May 31, 2011

As of Nov.30, 2011

As of May 31, 2011

As of Nov.30, 2011

Million Yen
Current Assets

15,566

5.2%

Million Yen(% )16,966

Million Yen
Current Liabilities

5.2%

9,164

10,818Operating Accounts Payables

Cash and Deposits in Trust

5,370

5,416

Current Portion of Long-term Loans Payable

－

84

1,031

646

Fixed Assets
Tangible Fixed Assets

283,01694.8%

306,21794.7%

277,81793.0%

300,926

93.1%

Buildings Held in Trust

52,62756,731

Land Held in Trust

225,160

244,177

29

17

Other Tangible Fixed Assets
Intangible Fixed Assets
Leasehold Rights in Trust
Other Intangible Fixed Assets
Investments and Other Assets

4,977

1.7%

4,977

4,970

4,970

7

6

221

0.1%

314

Leasehold and Security Deposits Paid in Trust

113

113

Long-term Prepaid Expenses

92

190

Other Investments and Other Assets

14

10

Deferred Assets

Total Assets

41,140

13.8%

Million Yen(% )37,437875

546

38,95835,535

Accounts Payables-Other

245

309

Advances Received

716

862

Other Current Liabilities

344

183

Fixed Liabilities

57,25219.2%

85,232

Investment Corporation Bonds

8,500

8,500

Long-term Loans Payable

38,791

65,881

Tenant Leasehold and Security Deposits

5,339

6,250

Tenant Leasehold and Security Deposits in Trust

4,617

4,598

4

1

Other Fixed Liabilities

0.1%

(% )

Total Liabilities

98,392Unitholders' equity

198,780

198,780

1,453

1,767

Unappropriated Retained Earnings
Total Net Assets

32.9%

122,669

11.6%

26.4%

38.0%

200,234

67.1%

200,548

62.0%

298,626

100.0%

323,217100.0%

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

35

42

Investment Corporation Bond Issuance Costs

1.5%

Net Assets

Other Current Assets

Liabilities

Cash and Deposits

Consumption Taxes Receivable

Assets

(% )

0.0%

42
298,626

33

Total Liabilities and Net Assets
0.0%

33
100.0%

323,217100.0%

Summary of Results for the 12th Fiscal Period (2) ~Income Statemen
Comparison with Results of the 11th Fiscal Period

Comparison with Forecasts

Unit: Million Yen (excluding the number of investment units and cash dividends)

Unit: Million Yen (excluding the number of investment units and cash dividends)

11th Period

12th Period

12th Period Forecast

12th Period(May 31, 2011)(Nov. 30, 2011)(July 13, 2011)(Nov. 30, 2011)

Number of Properties (at period-end)

35

36

Number of Properties (at period-end)36

36

Effective Number of Days of Investment

182

183

Effective Number of Days of Investment

183

183

Operating Revenues (A)Change

6,758

7,605

+ 846

Operating Revenues (A)

―

―

―

Gain on Sale

3,935

4,288

+ 353

Operating Expenses (B)

1,884

2,123

+ 238

1,281

1,347

+ 66

3,592

4,134

+ 541

Operating Income (A-B)

2,823

3,317

+ 493

Non-operating Expenses

1,245

1,560

+ 315

Interest Expense (including cap amortization)

826

858

+ 32

Borrowing expenses

410

692

+ 282

1,587

1,767

+ 180

Extraordinary Income

0

―

0

Extraordinary Expenses

134―

Net Income

1,453

1,766

395,798unit

395,798unit

3,671

4,464

Gain on Sale
Operating Expenses (B)Expenses related to Rental Business(excluding depreciation)
Depreciation
Gain and Loss from Rental Operations(excluding gain on sale)

Ordinary Income

Investment Units Issued and Outstanding
Dividend per Unit (Unit: Yen)

Change

7,420

7,605

+ 185

―

―

―

4,238

4,288

+ 50

2,011

2,123

+ 112

1,368

1,347

- 20

4,041

4,134

+ 92

Operating Income (A-B)

3,182

3,317

+ 134

Non-operating Expenses

1,557

1,560

+3

Interest Expense (including cap amortization)

882

858

- 24

Borrowing expenses

663

692

+ 29

1,624

1,767

+ 142

Extraordinary Income

―

―

―

- 134

Extraordinary Expenses

―

―

―

+ 313

Net Income

1,622

1,766

+ 143

395,798unit

395,798unit

4,100

4,464

Expenses related to Rental Business(excluding depreciation)
Depreciation
Gain and Loss from Rental Operations(excluding gain on sale)

Ordinary Income

Investment Units Issued and Outstanding+ 793

Dividend per Unit (Unit: Yen)

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

+ 364

36

Forecasts (13th and 14th Fiscal Period)
Forecast for the 13th and 14th Fiscal Period
Unit: Million Yen (excluding the number of investment units and cash dividends)

12th Period(Nov. 30, 2011)

13th Period
Forecast(May 31, 2012)

14th Period
Forecast(Nov. 30, 2012)

Number of Properties (at period-end)

36

36

36

Effective Number of Days of Investment

183

183

183

7,605

7,269

7,055

―

―

―

4,288

4,264

4,128

Expenses related to Rental Business (excluding depreciation)

2,123

2,085

2,032

Depreciation

1,347

1,376

1,290

Gain and Loss from Rental Operations (excluding gain on sale)

4,134

3,806

3,732

Operating Income (A-B)

3,317

3,004

2,927

Non-operating Expenses

1,560

1,082

807

Interest Expense (including cap amortization)

858

806

674

Borrowing expenses

692

266

123

1,767

1,921

2,119

Extraordinary Income

―

―

―

Extraordinary Expenses

―

―

―

1,766

1,919

2,117

395,798unit

395,798unit

395,798unit

4,464

4,850

5,350

Operating Revenues (A)Gain on Sale
Operating Expenses (B)Ordinary Income

Net Income
Investment Units Issued and Outstanding
Dividend per Unit (Unit: Yen)

* Although we assume that rents will remain at the current level, actual rents may differ from the assumption depending on the status ofassets under management.
This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it intended for the purposes of solicitation. Daiwa Office Investment Corporation advises reader to make investment decisions at their own judgment.

37

Major Financial Data
Item
Number of days of investment
Number of properties at end of period
Occupancy rate at end of period

Unit

8th Period 9th Period 10th Period 11th Period 12th Period

Day

183

182

183

182

183

Property

30

31

33

35

36

%

92.8

85.7

95.9

95.4

92.4

 NOI

Rent revenue + Other lease business revenue –Expenses related to rent business + Depreciation
 FFO

Net Income + Depreciation – Gain on Sale
 ROA

Average acquisition priceMillion yen

265,045

266,937

274,167

281,535

306,492

NOI (after deduction of gain on sale)

Million yen

5,915

4,922

4,465

4,873

5,482

 ROE

Funds from operation (FFO)

Million yen

3,890

3,261

2,518

2,734

3,114

 Loan-to-Value (LTV) at end of Fiscal Period

Return on asset (ROA)

%

1.9

1.3

0.9

1.1

1.1

Return on equity (ROE)

%

2.7

2.1

1.3

1.5

1.8

Capital adequacy ratio at end of period

%

70.2

70.8

67.9

67.1

62.0

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

%

25.3

25.5

28.1

28.9

34.0

Annualized Net Income / Total Assets
Annualized Net Income / Total Investments
Interest-bearing liabilities at end of Fiscal Period / Total
assets at end of Fiscal Period

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

38

Analyses of Tenant
Pie
Pie Chart
Chart ofof Industries
Industries ofof TopTop 5050 TenantTenantMajor
Major Tenants
Tenants Top
Top 1010 List
List

Tenant Name

Leased Space** (m2)

Property% of Total Leased
Space ***

Not disclosed *Daiwa Tsukishima

6,379.88

3.3%

Fields Corporation

E SPACE TOWER

6,336.26

3.3%

Electric Appliances
4.5%

Other
Shinjuku Maynds Tower
13.0%
Services

6,309.84

3.3%

Foods
4.6%

Daiwa Kayabacho Build.

5,899.11

3.1%

Daiwa Onarimon

5,100.06

2.6%

Trend Micro Incorporated
Not disclosed *Construction
UCC Holdings Co., Ltd.

24.7%

4.8%
Precision
Information &Instruments
Shinjuku Maynds Tower
4,980.78
EMC Japan
Communication
5.7%
Banks
20.5%
5.8% Shinjuku Maynds Tower
Sekisui House, Ltd.
4,498.57
Real Estate
wholesale
8.3%
4,316.90
Not disclosed *8.1% Shinjuku Maynds Tower

2.6%
2.3%
2.2%

Shinjuku Maynds Tower

4,114.50

2.1%

FreeBit Co., Ltd.

E SPACE TOWER

3,513.41

1.8%-

51,449.31

27.1%

•*

Services
24.7%

Foods
4.6%
Construction
4.8%
Precision
Instruments
5.7%
Banks

Information &Communication
20.5%

5.8%

Not disclosed *

Total

Other
13.0%

Electric Appliances
4.5%

Wholesale
8.1%

Real Estate
8.3%* The leased space of top 50 tenant covers 58.3% of total leased space as of theend of the 12th Fiscal Period** Industries are categorized according to TSE’s 33 industry group.

Not disclosed due to tenant's request•** Leased spaces of the tenants in Shinjuku Maynds Tower are described as the figure equivalent to 6/7, ownership % of the Investment Corporation.

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

39

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

Appraisal Value at
End of 11th Period

Appraisal Value at
End of 12th Period(May 31, 2011)(Nov.30, 2011)

Compared to
End of 11th Period
Difference

Major
ReasonAcquisition
Price

ChangeCompared to
Acquisition Price
Difference

ChangeCap Rate
11th Period 12th Period

Daiwa Ginza

13,90013,9000

0.0%

14,100

-200

-1.4%

4.6%

4.6%

Daiwa Ginza Annex

2,900

2,860

-40

-1.4%

3,050

-190

-6.2%

4.5%

4.5%

Daiwa Shibaura

7,290

7,380

90

1.2%

8,265

-885

-10.7%

5.2%

5.1%

Daiwa Minami Aoyama

3,980

3,970

-10

-0.3%

4,550

-580

-12.7%

4.9%

4.9%

Daiwa Sarugakucho

2,490

2,120

-370

-14.9%

3,000

-880

-29.3%

5.3%

5.3%

Daiwa A Hamamatsucho

2,910

2,870

-40

-1.4%

2,865

5

0.2%

4.9%

4.8%

Daiwa Jingumae

2,020

2,010

-10

-0.5%

2,800

-790

-28.2%

4.7%

4.7%

Daiwa Shibadaimon

2,820

2,730

-90

-3.2%

2,578

152

5.9%

4.8%

4.7%

Daiwa Misakicho

2,410

2,470

60

2.5%

2,346

124

5.3%

5.2%

5.1%

Daiwa Shimbashi 510

2,540

2,250

-290

-11.4%

2,080

170

8.2%

5.2%

5.2%

BPS Square

1,660

1,560

-100

-6.0%

1,560

0

0.0%

5.3%

5.3%

Daiwa Tsukiji

1,370

1,370

0

0.0%

1,240

130

10.5%

5.2%

5.2%

Daiwa Tsukiji 616

2,410

2,400

-10

-0.4%

2,440

-40

-1.6%

5.1%

5.0%

Daiwa Tsukishima Bldg.

7,710

7,870

160

2.1%

7,840

30

0.4%

5.3%

5.2%

Nihombashi MS Bldg.

2,420

2,330

-90

-3.7%

2,520

-190

-7.5%

5.0%

5.0%

Daiwa Azabudai

1,830

1,760

-70

-3.8%

1,600

160

10.0%

5.0%

5.0%

Daiwa Shibuya SS

3,940

3,810

-130

-3.3%

3,930

-120

-3.1%

5.0%

5.0%

Daiwa Nihombashi Honcho

6,980

6,740

-240

-3.4%

7,420

-680

-9.2%

5.1%

5.1%

①

③

Major Reason : (1) Decrease in market rent (2) Increase in cap-rate (3) Increase in cancellation notices

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

40

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

Appraisal Value at
End of 11th Period

Appraisal Value at
End of 12th Period(May 31, 2011)(Nov.30, 2011)

Compared to
End of 11th Period
Difference

Major
ReasonAcquisition
Price

ChangeCompared to
Acquisition Price
Difference

ChangeCap Rate
11th Period 12th Period

Daiwa Ginza 1-chome

4,190

4,190

0

0.0%

4,620

-430

-9.3%

4.8%

4.8%

Daiwa Kyobashi

3,130

2,880

-250

-8.0%

3,460

-580

-16.8%

5.0%

5.0%

Sunline Building No. 7

2,280

2,250

-30

-1.3%

2,680

-430

-16.0%

5.0%

5.0%

Daiwa Onarimon

14,40014,4000

0.0%

13,860

540

3.9%

4.9%

4.9%

Shinjyuku Maynds Tower

106,000

106,0000

0.0%

133,800-27,800-20.8%

4.0%

4.0%

SHIBUYA EDGE

4,060

4,060

0

0.0%

5,900

-1,840-31.2%

4.6%

4.6%

Daiwa Kodemmacho

1,920

1,920

0

0.0%

2,460

-540

-22.0%

5.3%

5.3%

Daiwa Jimbocho

3,820

2,930

-890

-23.3%

4,150-1,220-29.4%

5.2%

5.2%

Daiwa Nishishimbashi

5,680

5,600

-80

-1.4%

5,000

600

12.0%

5.0%

4.9%

Daiwa Kudan

3,990

2,960

-1,030-25.8%

4,000-1,040-26.0%

5.0%

5.0%

Daiwa Kayabacho Building

5,980

6,110

130

2.2%

5,600

510

9.1%

4.6%

4.5%

Jimbocho Place

3,660

3,640

-20

-0.5%

3,550

90

2.5%

4.6%

4.5%

-

25,900--24,000

1,900

7.9%

-

4.3%

Daiwa Kinshicho

3,570

3,540

-30

-0.8%

3,653

-113

-3.1%

5.5%

5.4%

Daiwa Higashi-Ikebukuro

3,570

3,500

-70

-2.0%

2,958

542

18.3%

5.3%

5.2%

Benex S-3

3,410

3,410

0

0.0%

4,950

-1,540-31.1%

5.8%

5.8%

Daiwa Shinagawa North

5,770

5,670

-100

-1.7%

7,710

-2,040-26.5%

5.2%

5.3%

Daiwa Minami-Senba

2,920

2,940

20

0.7%

4,810

-1,870-38.9%

5.5%

5.5%

249,930

272,300-3,530-1.4%

311,345-39,045-12.5%--E SPACE TOWER

Total

**

**

③

③

* Major Reason : (1) Decrease in market rent (2) Increase in cap-rate (3) Increase in cancellation notices** Total of Compared to End of 11th Period excludes the properties acquired in 12th Period.
This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it intended for the purposes of solicitation. Daiwa Office Investment Corporation advises reader to make investment decisions at their own judgment.

41

Portfolio Performance Summary (1) (11th-12th Fiscal Period Results by Property)
Daiwa Ginza

Daiwa Ginza Annex

Daiwa Shibaura

Daiwa Minami Aoyama

Daiwa Sarugakucho

Daiwa A Hamamatsucho

Daiwa Jingumae

Property Name

Acquisition Price (million yen)Book Value (million yen)Appraisal Value (million yen)Occupancy Rate (% )PML (% ) (*6)
Property Management Company (*8)
Number of operating days
Profits from property-related activities (*1)

(1) Property-related Revenues
Rent (incl. common service fees)
Other Revenues (*2)(2) Property-related Expenses
Administrative Expenses
Utility Charges
Property Management Fees
Property-related Taxes (*3)
Non-life Insurance Costs
Repair Expenses
Other Expenses(3) NOI ( ＝(1)-(2))
Annualized NOINOI Yield (*4)
Depreciation and Amortization(Reference) Proceeds for Restoration and Repair Work
Proceeds from Amortization of Leashold and Security Deposits

14,100
3,050
8,265
4,550
3,000
2,865
2,800
11th Period 12th Period 11th Period 12th Period 11th Period 12th Period 11th Period 12th Period 11th Period 12th Period 11th Period 12th Period 11th Period 12th Period
13,625
13,571
2,935
2,920
8,148
8,145
4,503
4,497
2,964
2,953
2,822
2,810
2,759
2,755
13,90013,900
2,900
2,860
7,290
7,380
3,980
3,970
2,490
2,120
2,910
2,870
2,020
2,010
80.1
84.9
88.0
100.0
98.8
99.1
100.0
100.0
100.0
0.0
100.0
100.0
78.5
78.5
9.17
9.17
7.46
7.46
5.09
5.09
12.79
12.79
9.79
9.79
6.03
6.03
12.01
12.01
Best Property
Best Property
Xymax Axis
Best Property
Property Partners
Best Property
Best Property
182
183
182
183
182
183
182
183
182
183
182
183
182
183
329,343
313,360
101,70385,170234,983
259,030
127,423
128,889- (※ 7)- (※ 7)142,078
141,900
38,60345,017329,343
313,360
101,70385,170233,066
258,115
127,423
128,889- (※ 7)- (※ 7)142,078
141,900
38,60345,017
0
0
0
0
1,917
915
0
0
- (※ 7)- (※ 7)000
093,53586,723
20,15324,157
117,558
65,24924,60830,560- (※ 7)- (※ 7)
58,20462,864
15,724
16,58815,591
13,3994,193
5,556
13,043
12,922
3,443
4,054- (※ 7)- (※ 7)
8,317
8,726
2,678
2,625
23,113
26,6344,391
4,677
19,011
21,0766,565
7,821- (※ 7)- (※ 7)
8,634
9,041
4,450
4,800
6,781
5,206
1,551
1,238
7,312
3,855
1,862
2,034
- (※ 7)- (※ 7)
2,144
2,117
1,274
1,200
24,91326,357
8,206
8,806
20,293
20,588
11,388
11,883- (※ 7)- (※ 7)
9,071
9,207
6,488
6,601
522
509
125
122
507
497
184
181
- (※ 7)- (※ 7)
233
229
91
89
10,222
2,548
1,668
3,483
57,390
6,309
1,161
4,585
- (※ 7)- (※ 7)
404
4,141
652
1,180
12,391
12,067
17
272
0
0
2
0
- (※ 7)- (※ 7)
29,40029,40089
89
235,808
226,636
81,54961,012
117,425
193,780
102,814
98,328100,254
61,78883,87379,03622,87828,429472,912452,035
163,546
121,692
235,495
386,503206,194
196,120
201,059
123,238
168,207
157,641
45,88356,703
3.4%
3.2%
5.4%
4.0%
2.8%
4.7%
4.5%
4.3%
6.7%
4.1%
5.9%
5.5%
1.6%
2.0%
67,45967,934
17,673
17,731
23,78824,342
11,077
11,343- (※ 7)- (※ 7)
12,236
11,418
9,829
9,901
0
0
0
0
882
602
0
0
- (※ 7)- (※ 7)
0
0
33
0
0
0
0
0
0
0
0
0
- (※ 7)- (※ 7)0000(*1) For profits from property-related activities, actual results (excluding Other Revenues and Property-related Taxes) are used and displayed by rounding down to the nearest thousand yen.
(*2) Other Revenues does not include Proceeds for Restoration and Repair Work or Proceeds from Amortization of Leasehold and Security Deposits.
(*3) Fixed property taxes, city planning taxes and depreciable asset taxes recorded in Property-related Taxes are calculated by converting the actual amount to the number of operating days.
(*4) NOI Yield is calculated by dividing annualized NOI in (3) on the table by the acquisition price.
(*5) NOI in this table is calculated by accounting for Property-related Taxes for “NOI (after deduction of gain on sale)” found on p.38 and so does not equal that figure.
(*6) NKSJ Risk Management, Inc. has prepared for the PML. The figures entered for PML are the figures in the Portfolio Earthquake PML Assessment Report (December 2011).
(*’7) Not disclosed due to tenant's request(*’8) UNHEX Co. merged with BEST PROPERTY Co. and changed the name to BEST PROPERTY Co.

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

42

Portfolio Performance Summary (2) (11th-12th Fiscal Period Results by Property)
Daiwa Shibadaimon

Daiwa Misakicho

Daiwa Shimbashi 510

BPS Square

Daiwa T sukiji

Daiwa T sukiji 616

Daiwa T sukishima Bldg.

Property Name

Acquisition Price (million yen)Book Value (million yen)Appraisal Value (million yen)Occupancy Rate (% )PML (% ) (*6)
Property Management Company (*8)
Number of operating days
Profits from property-related activities (*1)

(1) Property-related Revenues
Rent (incl. common service fees)
Other Revenues (*2)(2) Property-related Expenses
Administrative Expenses
Utility Charges
Property Management Fees
Property-related Taxes (*3)
Non-life Insurance Costs
Repair Expenses
Other Expenses(3) NOI ( ＝(1)-(2))
Annualized NOINOI Yield (*4)
Depreciation and Amortization(Reference) Proceeds for Restoration and Repair Work
Proceeds from Amortization of Leashold and Security Deposits

2,578
2,346
2,080
1,560
1,240
2,440
7,840
11th Period 12th Period 11th Period 12th Period 11th Period 12th Period 11th Period 12th Period 11th Period 12th Period 11th Period 12th Period 11th Period 12th Period
2,466
2,460
2,247
2,233
2,145
2,139
1,401
1,384
1,224
1,217
2,340
2,323
7,346
7,282
2,820
2,730
2,410
2,470
2,540
2,250
1,660
1,560
1,370
1,370
2,410
2,400
7,710
7,870
100.0
100.0
100.0
100.0
100.0
97.4
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
2.99
2.99
6.68
6.68
8.13
8.13
7.67
7.67
9.70
9.70
7.69
7.69
10.89
10.89
Best Property
Best Property
Property Partners
Best Property
Xymax Axis
Property Partners
Property Partners
182
183
182
183
182
183
182
183
182
183
182
183
182
183
99,77686,083- (※ 7)- (※ 7)
91,194
94,338- (※ 7)- (※ 7)47,742
48,65380,591
83,399284,270
286,383
97,38986,083- (※ 7)- (※ 7)
91,194
94,338- (※ 7)- (※ 7)47,742
48,65380,591
83,399284,270
286,383
2,387
0- (※ 7)- (※ 7)00- (※ 7)- (※ 7)00
0
0
0
0
26,09521,705- (※ 7)- (※ 7)
16,685
17,916- (※ 7)- (※ 7)
12,952
11,227
21,382
22,11849,61258,3948,891
5,861- (※ 7)- (※ 7)3,833
3,801- (※ 7)- (※ 7)
3,586
2,346
4,858
4,850
8,120
8,485
6,178
6,752
- (※ 7)- (※ 7)4,969
5,828- (※ 7)- (※ 7)
2,814
3,104
6,750
7,627
22,382
26,2641,434
1,303- (※ 7)- (※ 7)1,423
1,391- (※ 7)- (※ 7)
1,350
1,200
1,804
1,501
4,312
4,295
6,014
6,295
- (※ 7)- (※ 7)5,965
5,667- (※ 7)- (※ 7)
4,182
4,143
7,453
7,214
13,37813,802141
139- (※ 7)- (※ 7)139
136- (※ 7)- (※ 7)
69
68
155
152
374
367
3,434
1,354
- (※ 7)- (※ 7)294
1,030- (※ 7)- (※ 7)
948
365
359
773
1,044
5,178
0
0
- (※ 7)- (※ 7)60
61- (※ 7)- (※ 7)00000073,68164,377
69,283
68,84974,50876,422
49,11041,63834,79037,42559,20961,280234,657
227,988
147,767
128,403138,948
137,322
149,426
152,427
98,49083,04969,771
74,647
118,744
122,226
470,605
454,732
5.7%
5.0%
5.9%
5.9%
7.2%
7.3%
6.3%
5.3%
5.6%
6.0%
4.9%
5.0%
6.0%
5.8%
14,395
14,542- (※ 7)- (※ 7)6,416
6,430- (※ 7)- (※ 7)
7,022
7,039
28,772
20,28867,526
67,8353,450
0- (※ 7)- (※ 7)00- (※ 7)- (※ 7)
0
0
0
0
0
0
0
0
- (※ 7)- (※ 7)00- (※ 7)- (※ 7)
0
0
0
0
0
0

(*1) For profits from property-related activities, actual results (excluding Other Revenues and Property-related Taxes) are used and displayed by rounding down to the nearest thousand yen.
(*2) Other Revenues does not include Proceeds for Restoration and Repair Work or Proceeds from Amortization of Leasehold and Security Deposits.
(*3) Fixed property taxes, city planning taxes and depreciable asset taxes recorded in Property-related Taxes are calculated by converting the actual amount to the number of operating days.
(*4) NOI Yield is calculated by dividing annualized NOI in (3) on the table by the acquisition price.
(*5) NOI in this table is calculated by accounting for Property-related Taxes for “NOI (after deduction of gain on sale)” found on p.38 and so does not equal that figure.
(*6) NKSJ Risk Management, Inc. has prepared for the PML. The figures entered for PML are the figures in the Portfolio Earthquake PML Assessment Report (December 2011).
(*’7) Not disclosed due to tenant's request(*’8) UNHEX Co. merged with BEST PROPERTY Co. and changed the name to BEST PROPERTY Co.

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

43

Portfolio Performance Summary (3) (11th-12th Fiscal Period Results by Property)
Nihombashi MS Bldg.

Daiwa Azabudai

Daiwa Shibuya SS

Daiwa Nihombashi Honcho

Daiwa Ginza 1-chome

Daiwa Kyobashi

Sunline Building No. 7

Property Name

Acquisition Price (million yen)Book Value (million yen)Appraisal Value (million yen)Occupancy Rate (% )PML (% ) (*6)
Property Management Company (*8)
Number of operating days
Profits from property-related activities (*1)

(1) Property-related Revenues
Rent (incl. common service fees)
Other Revenues (*2)(2) Property-related Expenses
Administrative Expenses
Utility Charges
Property Management Fees
Property-related Taxes (*3)
Non-life Insurance Costs
Repair Expenses
Other Expenses(3) NOI ( ＝(1)-(2))
Annualized NOINOI Yield (*4)
Depreciation and Amortization(Reference) Proceeds for Restoration and Repair Work
Proceeds from Amortization of Leashold and Security Deposits

2,520
1,600
3,930
7,420
4,620
3,460
2,680
11th Period 12th Period 11th Period 12th Period 11th Period 12th Period 11th Period 12th Period 11th Period 12th Period 11th Period 12th Period 11th Period 12th Period
2,501
2,503
1,576
1,570
3,851
3,837
7,218
7,197
4,545
4,545
3,394
3,381
2,651
2,646
2,420
2,330
1,830
1,760
3,940
3,810
6,980
6,740
4,190
4,190
3,130
2,880
2,280
2,250
100.0
100.0
100.0
100.0
100.0
100.0
73.5
73.5
97.9
88.1
42.1
53.7
79.7
68.1
7.84
7.84
9.57
9.57
8.67
8.67
8.49
8.49
10.16
10.16
10.04
10.04
8.62
8.62
Best Property
Best Property
Best Property
Xymax Axis
Xymax Axis
Best Property
Best Property
182
183
182
183
182
183
182
183
182
183
182
183
182
183
81,582
83,40165,47465,863
134,613
128,490
113,178
140,378
118,811
116,578
72,10749,37572,99870,37381,582
83,40165,47465,863
134,613
128,490
113,178
140,378
118,811
111,947
72,10749,37571,93961,553
0
0
0
0
0
0
0
0
0
4,631
0
0
1,059
8,819
17,424
18,59312,361
12,47926,48028,121
36,82860,61628,05936,224
20,67641,02140,81229,098
3,704
3,819
2,306
2,433
4,109
5,086
6,947
6,037
4,857
7,395
6,033
4,806
4,435
4,468
4,863
5,303
2,964
3,171
8,453
9,143
11,816
12,969
6,777
7,573
5,452
5,311
4,999
5,220
1,320
1,257
1,200
1,200
2,187
1,684
3,160
2,069
1,803
1,794
1,414
1,200
1,352
1,209
7,189
7,059
5,280
5,199
11,007
10,65812,73912,089
7,839
8,390
6,994
7,176
14,643
14,341
157
155
102
100
169
166
355
348
173
170
164
161
158
155
188
998
508
373
554
1,382
1,808
27,101
6,533
10,900618
22,366
15,223
3,702
0
0
0
0
0
0
0
0
74
0
0
0
0
0
64,15864,80853,11253,384
108,133
100,369
76,35079,76290,75280,35451,4308,354
32,186
41,274
128,669
129,262
106,516
106,477
216,860
200,190
153,119
159,088
182,003160,269
103,143
16,66264,54982,324
5.1%
5.1%
6.7%
6.7%
5.5%
5.1%
2.1%
2.1%
3.9%
3.5%
3.0%
0.5%
2.4%
3.1%
11,241
11,365
7,353
7,736
15,477
15,94828,51628,60818,442
18,536
16,853
16,903
9,363
9,592
0
0
0
0
0
570
0
0
0
13,666
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

(*1) For profits from property-related activities, actual results (excluding Other Revenues and Property-related Taxes) are used and displayed by rounding down to the nearest thousand yen.
(*2) Other Revenues does not include Proceeds for Restoration and Repair Work or Proceeds from Amortization of Leasehold and Security Deposits.
(*3) Fixed property taxes, city planning taxes and depreciable asset taxes recorded in Property-related Taxes are calculated by converting the actual amount to the number of operating days.
(*4) NOI Yield is calculated by dividing annualized NOI in (3) on the table by the acquisition price.
(*5) NOI in this table is calculated by accounting for Property-related Taxes for “NOI (after deduction of gain on sale)” found on p.38 and so does not equal that figure.
(*6) NKSJ Risk Management, Inc. has prepared for the PML. The figures entered for PML are the figures in the Portfolio Earthquake PML Assessment Report (December 2011).
(*’7) Not disclosed due to tenant's request(*’8) UNHEX Co. merged with BEST PROPERTY Co. and changed the name to BEST PROPERTY Co.

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

44

Portfolio Performance Summary (4) (11th-12th Fiscal Period Results by Property)
Daiwa Onarimon

Shinjyuku Maynds Tower

SHIBUYA EDGE

Daiwa Kodemmacho

Daiwa Jimbocho

Daiwa Nishishimbashi

Daiwa Kudan

Property Name

4,000
13,860133,800
5,900
2,460
4,150
5,000
11th Period 12th Period 11th Period 12th Period 11th Period 12th Period 11th Period 12th Period 11th Period 12th Period 11th Period 12th Period 11th Period 12th Period
13,707
13,680132,218
131,775
5,851
5,835
2,454
2,446
4,162
4,140
5,116
5,072
4,015
3,993
Book Value (million yen)
14,40014,400106,000
106,000
4,060
4,060
1,920
1,920
3,820
2,930
5,680
5,600
3,990
2,960
Appraisal Value (million yen)
100.0
87.1
99.9
99.9
100.0
100.0
100.0
100.0
100.0
100.0
79.1
55.0
100.0
88.1
Occupancy Rate (% )
5.45
5.45
6.42
6.42
3.14
3.14
7.71
7.71
5.58
5.58
6.76
6.76
7.96
7.96
PML (% ) (*6)
Mitsui Fudosan Building Management
Mitsui Fudosan Building Management
Xymax Axis
Xymax Axis
Xymax Axis
Property Partners
Xymax Axis
Property Management Company (*8)
182
183
182
183
182
183
182
183
182
183
182
183
182
183
Number of operating days
441,543
417,593
2,348,714
2,541,293
116,564
115,806
62,61864,935160,377
161,481
173,867
137,671
118,550
127,697(1) Property-related Revenues
441,543
417,593
2,346,390
2,538,947
111,206
115,806
62,61864,935160,377
161,481
163,664
137,671
118,550
127,697
Rent (incl. common service fees)
0
0
2,323
2,346
5,357
0
0
0
0
0
10,2020
0
0Other Revenues (*2)
113,514
77,904
723,474
829,826
26,731
21,707
13,146
13,28821,07933,63041,77988,29813,86323,511(2) Property-related Expenses
12,24913,743135,080
133,528
7,616
4,962
2,786
2,775
6,033
6,274
16,31012,3074,693
4,684
Administrative Expenses
19,522
19,873274,128
292,440
5,678
6,080
4,190
4,248
10,244
11,627
9,717
10,830
7,068
7,166
Utility Charges
4,429
4,073
16,92017,826
1,943
1,733
1,238
1,200
1,603
1,614
2,918
1,743
1,856
1,868
Property Management Fees
36,722
36,682
265,758
263,549
7,210
7,456
3,848
3,824
0
11,212
77
17,0408
8,987
Property-related Taxes (*3)
527
518
4,544
4,463
132
130
95
93
185
181
308
303
156
153
Non-life Insurance Costs
40,062
3,013
19,221
113,960
4,149
1,344
165
323
2,774
2,678
12,44446,07080652
Repair Expenses
0
0
7,820
4,057
0
0
822
822
238
40
3
3
0
0
Other Expenses
328,029
339,688
1,625,239
1,711,466
89,832
94,09849,47151,647139,297
127,850132,087
49,372
104,686
104,185(3) NOI ( ＝(1)-(2))
657,860
677,521
3,259,409
3,413,581
180,159
187,683
99,214
103,013279,360
255,003
264,901
98,475
209,948
207,802
Annualized NOINOI Yield (*4)
4.7%
4.9%
2.4%
2.6%
3.1%
3.2%
4.0%
4.2%
6.7%
6.1%
5.3%
2.0%
5.2%
5.2%
29,371
29,443515,729528,283
16,642
16,662
8,150
8,177
22,99923,062
46,667
46,97623,92623,961
Depreciation and Amortization(Reference) Proceeds for Restoration and Repair Work
0
0
0
0
5,000
0
0
0
0
0
11,11500
0Proceeds from Amortization of Leashold and Security Deposits
0
0
0
0
0
0
0
0
0
0
0
0
0
0
(*1) For profits from property-related activities, actual results (excluding Other Revenues and Property-related Taxes) are used and displayed by rounding down to the nearest thousand yen.
(*2) Other Revenues does not include Proceeds for Restoration and Repair Work or Proceeds from Amortization of Leasehold and Security Deposits.
(*3) Fixed property taxes, city planning taxes and depreciable asset taxes recorded in Property-related Taxes are calculated by converting the actual amount to the number of operating days.
(*4) NOI Yield is calculated by dividing annualized NOI in (3) on the table by the acquisition price.
(*5) NOI in this table is calculated by accounting for Property-related Taxes for “NOI (after deduction of gain on sale)” found on p.38 and so does not equal that figure.
(*6) NKSJ Risk Management, Inc. has prepared for the PML. The figures entered for PML are the figures in the Portfolio Earthquake PML Assessment Report (December 2011).
(*’7) Not disclosed due to tenant's request(*’8) UNHEX Co. merged with BEST PROPERTY Co. and changed the name to BEST PROPERTY Co.

Profits from property-related activities (*1)

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

45

Portfolio Performance Summary (5) (11th-12th Fiscal Period Results by Property)
Daiwa Kayabacho Build.

Jimbocho PlaceE Space Tower

Daiwa Kinshicho

Daiwa Higashi-Ikebukuro

Benex S-3

Daiwa Shinagawa North

Property Name

3,550
5,600
3,653
2,958
24,0004,950
7,710
11th Period 12th Period 11th Period 12th Period 11th Period 12th Period 11th Period 12th Period 11th Period 12th Period 11th Period 12th Period 11th Period 12th Period
5,625
5,618
3,630
3,626
24,141
3,495
3,470
2,862
2,840
4,501
4,469
7,539
7,508
Book Value (million yen)
5,980
6,110
3,660
3,640
25,900
3,570
3,540
3,570
3,500
3,410
3,410
5,770
5,670
Appraisal Value (million yen)
100.0
100.0
100.0
100.0
100.0
100.0
100.0
97.9
97.9
95.6
89.5
100.0
100.0
Occupancy Rate (% )
5.58
5.58
6.13
6.13
5.78
7.42
7.42
5.56
5.56
5.66
5.66
5.56
5.56
PML (% ) (*6)
Mitsui Fudosan Building Management
Property Partners
Xymax Axis
Best Property
Best Property
Xymax Axis
Best Property
Property Management Company (*8)
68
183
64
183
146
182
183
182
183
182
183
182
183
Number of operating days
- (※ 7)- (※ 7)
29,61490,942539,461
149,522
151,854
143,306
151,083
158,773
163,025
158,658
180,917(1) Property-related Revenues- (※ 7)- (※ 7)
29,61490,942539,461
149,522
151,854
143,306
145,311
158,773
160,166
158,658
180,917
Rent (incl. common service fees)- (※ 7)- (※ 7)
0
0
0
0
0
0
5,771
0
2,858
0
0
Other Revenues (*2)
- (※ 7)- (※ 7)2,877
13,798
83,12441,30041,272
36,97945,43951,661
56,94050,994
52,976(2) Property-related Expenses- (※ 7)- (※ 7)
1,602
6,315
47,104
12,452
12,937
9,518
10,221
15,052
15,637
14,003
12,219Administrative Expenses- (※ 7)- (※ 7)507
5,814
28,50010,676
11,64315,013
15,59016,274
16,983
13,52715,155
Utility Charges- (※ 7)- (※ 7)
644
1,388
6,248
2,637
2,272
2,224
2,123
2,430
2,423
2,792
2,742
Property Management Fees
- (※ 7)- (※ 7)1
6
13
13,046
13,067
9,678
9,632
16,28816,32019,365
19,645
Property-related Taxes (*3)
- (※ 7)- (※ 7)
55
155
632
308
303
297
292
463
455
416
409
Non-life Insurance Costs- (※ 7)- (※ 7)
40
118
490
2,179
1,049
247
7,579
1,151
5,120
879
2,805
Repair Expenses- (※ 7)- (※ 7)
27
0
135
0
0
0
0
0
0
9
0
Other Expenses
58,587
159,796
26,737
77,144456,336
108,222
110,582
106,326
105,643
107,112106,084
107,664
127,940(3) NOI ( ＝(1)-(2))
314,478
318,719
152,485
153,866
1,140,841
217,038
220,560
213,236
210,710214,813
211,589
215,919
255,182
Annualized NOINOI Yield (*4)
5.6%
5.7%
4.3%
4.3%
4.8%
5.9%
6.0%
7.2%
7.1%
4.3%
4.3%
2.8%
3.3%
- (※ 7)- (※ 7)
9,808
19,70852,07828,40028,28623,524
22,25456,47345,202
34,86633,332
Depreciation and Amortization(Reference) Proceeds for Restoration and Repair Work
- (※ 7)- (※ 7)
0
0
0
0
0
0
4,900
0
0
0
0
Proceeds from Amortization of Leashold and Security Deposits- (※ 7)- (※ 7)
0
0
0
0
0
0
0
0
0
0
0
(*1) For profits from property-related activities, actual results (excluding Other Revenues and Property-related Taxes) are used and displayed by rounding down to the nearest thousand yen.
(*2) Other Revenues does not include Proceeds for Restoration and Repair Work or Proceeds from Amortization of Leasehold and Security Deposits.
(*3) Fixed property taxes, city planning taxes and depreciable asset taxes recorded in Property-related Taxes are calculated by converting the actual amount to the number of operating days.
(*4) NOI Yield is calculated by dividing annualized NOI in (3) on the table by the acquisition price.
(*5) NOI in this table is calculated by accounting for Property-related Taxes for “NOI (after deduction of gain on sale)” found on p.38 and so does not equal that figure.
(*6) NKSJ Risk Management, Inc. has prepared for the PML. The figures entered for PML are the figures in the Portfolio Earthquake PML Assessment Report (December 2011).
(*’7) Not disclosed due to tenant's request(*’8) UNHEX Co. merged with BEST PROPERTY Co. and changed the name to BEST PROPERTY Co.

Profits from property-related activities (*1)

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

46

Portfolio Performance Summary (6) (11th-12th Fiscal Period Results by Property)
Daiwa Minami-Senba

Property Name

Acquisition Price (million yen)

PML (% ) (*6)
Property Management Company (*8)

Mitsui Fudosan Building Management

Book Value (million yen)Appraisal Value (million yen)Occupancy Rate (% )Number of operating days
(1) Property-related Revenues
Profits from property-related activities (*1)

4,810
11th Period 12th Period
4,907
4,879
2,920
2,940
91.7
91.7
11.56
11.56

Rent (incl. common service fees)
Other Revenues (*2)(2) Property-related Expenses
Administrative Expenses
Utility Charges
Property Management Fees
Property-related Taxes (*3)
Non-life Insurance Costs
Repair Expenses
Other Expenses(3) NOI (＝(1)-(2))
Annualized NOINOI Yield (*4)
Depreciation and Amortization(Reference) Proceeds for Restoration and Repair Work
Proceeds from Amortization of Leashold and Security Deposits

182
106,209106,209035,857
12,904
9,399
1,560
11,586278
129
070,351141,0882.9%

183
108,522
108,5220
36,766
12,22810,501
1,643
11,622273
497
071,756
143,119
3.0%

33,9900031,87100(*1) For profits from property-related activities, actual results (excluding Other Revenues and Property-related Taxes) are used and displayed by rounding down to the nearest thousand yen.
(*2) Other Revenues does not include Proceeds for Restoration and Repair Work or Proceeds from Amortization of Leasehold and Security Deposits.
(*3) Fixed property taxes, city planning taxes and depreciable asset taxes recorded in Property-related Taxes are calculated by converting the actual amount to the number of operating days.
(*4) NOI Yield is calculated by dividing annualized NOI in (3) on the table by the acquisition price.
(*5) NOI in this table is calculated by accounting for Property-related Taxes for “NOI (after deduction of gain on sale)” found on p.38 and so does not equal that figure.
(*6) NKSJ Risk Management, Inc. has prepared for the PML. The figures entered for PML are the figures in the Portfolio Earthquake PML Assessment Report (December 2011).
(*’7) Not disclosed due to tenant's request(*’8) UNHEX Co. merged with BEST PROPERTY Co. and changed the name to BEST PROPERTY Co.

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

47

Organization of the Asset Management Company(As of Jan. 2012)

Organization Chart

Company Overview

Shareholders’Shareholders’ Meeting
Meeting
Auditors
Auditors
Board
Board ofof Directors
Directors
Compliance
Compliance
Committee
Committee

Representative
Representative
Director
Director
Internal
Internal Control
Control Office
Office Formulation and

Implementation of construction
project of the properties.

Akira Yamanouchi

Vice President andRepresentative Director

Yoshiki Nishigaki(Head of Advisory Department)

Vice President andRepresentative Director

Yuji Shinozuka(Head of Finance & Business Planning)
Atsuko Takahashi(Construction Manager )Compliance
Compliance Officer
Officer

Investment Management
Department
Acquisitions Team
policies

Director (non-executive)

Hikaru Sakagami

AuditorToshihiko Onishi

Finance Department
Finance and IR Team Formulation of policies on

leasing and management ofassets Matters relating to the leasing

and management of assets
Investment Planning Team

October 21, 2004
200 million yen

Representative Director

Akira Yamanouchi

Directors

8 ( 5 executive, 2 non-executive, 1 auditor)

Employees

41

Registered Financial
Instruments Firm
Building Lots and Buildings
Transaction Business License
Discretionary Agent for Real
Estate Transaction Approval Analysis of real estate market,

retail industry trends and thereal estate investment trust
market Matters relating to disclosure, Matters relating to the operationand finance of the Asst
Manager

A member of the Investment Trusts Association of Japan
A member of Japan Securities Investment Advisers
Association

 Matters relating to the operation

asset liability management
and management of surplus
fund Matters concerting accounting

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

Business Planning
Department

 Relation with tenants whose theresults and accounting, cash
allotment, accounting audit,
budget and performance
management

No. (2)-83920, Governor of Tokyo

General Administrative
Departmentof the general meeting ofinvestors and the executive
officers of the Investment
Corporation

 Matters relating to financial

No. 355 (Financial Instruments), Director, Kanto Local Finance
Bureau Matters relating to financing,IR activities, formulation of the
IR strategy and Public
Relations
Accounting Team

Asset Management Team

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

Established
Capitalization

trust beneficiary rights business
Investment Corporation owns
the properties

acquisition and disposal of
assetsmanagement of the portfolio

Toshihiro Matsui Marketing activities concerning Matters relating to the Budget and performance

Director (non-executive)

Marketing Department

 Formulation of investment

Naoyuki Owa(Head of Administration)

Director

Daiwa Real Estate Asset Management Co. Ltd.

Address

President andRepresentative Director

Director

Investment
Investment Committee
Committee

Construction Manager

Company Name

Board of Directors and Auditorsof the general meeting ofshareholders, the board of
directors and committees of theAsset Manager
 Submission of applications forvarious permits, licenses,
approvals, registrations, etc.
stipulated by laws andregulations
 Storage and management of

the important documents andinformation
 Matters relating to human Research and analysis of thebusiness challenge of theInvestment Corporation
 Matters relating to thedevelopment of annual asset
management plans andmedium-term asset
management plans Development and revision of

the Investment Guidelines
 Matters relating to the provisionof new businesses General risk management of theInvestment Corporation

Advisory Department
 Matters relating to advisoryconcerning formulation of
replacement, disposal, orincome and expense plans forcustomers’ assets
 Matters relating to advisoryconcerning management,
operation, leasing, andmaintenance and renovation ofcustomers’ assets
 Agency or intermediary ontransactions or leasing, etc. of
assets by customers (excluding
businesses pertaining to beType II financial instruments
business)
 Matters relating to reporting andother duties being conducted
for investors of private funds

resources and labor service

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

48

Positioning of Asset Manager within Daiwa Securities Group
Group Structure of Daiwa Securities Group
Daiwa Securities Group Inc.
RetailGlobal markets

Daiwa Securities

Global Investment
Banking

Asset Management

Investment

OthersDaiwa Asset

Daiwa Corporate
Investment

Daiwa Next Bank, Ltd.

Daiwa Securities
Capital Markets（Daiwa Securities CM)

Management

Daiwa CM
Europe Limited

Daiwa SB Investments

Daiwa CM
Asia Holdings B.V.
Daiwa CM
America Holdings Inc.

Daiwa Securities
SMBC Principal
Investments

Daiwa Institute of
Research Holdings
Daiwa Institute of
Research
DIR Business
Innovations

Daiwa Real Estate
Asset Management

Daiwa PI Partners

Daiwa Securities
Business Center Co. Ltd.
Daiwa Property Co., Ltd.

 Daiwa Real Estate Asset Management aims for long-term and stable provision of attractive management products as the real estate asset management company of

the Daiwa Securities Group

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

49

Competitive Edge
Establish highly-transparent business structure Strictly control conflicts of interest with sponsor
 Introduce financial institutions’ rigorous compliance framework
 Ensure high transparency and establish disciplined investment process

Expand net work of collaboration with the Daiwa Securities Group Remarkably expand financing capacity by capitalizing on the credit capability of the Daiwa Securities Group Reinforce leasing activities by capitalizing on the network of the Daiwa Securities Group Reinforce sourcing activities by capitalizing on the network of the Daiwa Securities Group

Secure well-experienced, highly-professional human resources Develop team of outstanding professional staff by capitalizing on the human resources of the Daiwa Securities Group Employ excellent human resources from outside by drawing on the Daiwa Securities Group’s brand power Increase number of employees with a high level of motivation to challenge new business stages

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

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

51