Fiscal Results Briefing
9th Fiscal Period Ended April 30, 2019

June 19, 2019

The

9th
Fiscal Period

Presentation Material

Garden City Shinagawa Gotenyama

Akasaka Garden City

Hommachi Minami Garden City

Prime Maison Mitatsunamachi

Esty Maison Yokohama-aobadai North

November 1, 2018
toApril 30, 2019

Prime Maison Hongo

Prime Maison Kuramae0

<Notes for This Document>
House Reit, Inc. (“SHR”) has conducted its fourth public offering since its listing on June 10, 2019 (the “4th PO”), and as of the date of this・ Sekisuidocument, it is scheduled to issue new investment units by way of third-party allotment related to the 4th PO on July 9, 2019 as a payment date.
As for the figures after the 4th PO which are stated in this document, unless otherwise stated, the figures calculated based on the total number ofinvestment units issued and outstanding (forecasted distribution per unit, NAV per unit, etc.) are calculated based on the total number of investment
units issued and outstanding of 4,288,666 units based on the assumption that the total number of investment units for issuance by way of third-party
allotment was 25,075 units for which subscription was fully made.

May 1, 2018, Sekisui House REIT, Inc. merged with Sekisui House Residential Investment Corporation.
・ Effective
Throughout this document, Sekisui House REIT, Inc. will be abbreviated as “SHR” while Sekisui House Residential Investment Corporation may bereferred to as “SHI.”In addition, with the merger, SHR has succeeded the properties (residential and retail properties) of SHI, the dissolved company in the absorption-typemerger, and there are sections in this document where the operating results, etc., prior to the merger are recorded.
In this document, “23rd Fiscal Period Ended March 2017,” 24th Fiscal Period Ended September 2017,” and “25th Fiscal Period Ended April 2018” referto the calculation period of the three fiscal periods of SHI directly prior to the merger.
Moreover, for the most recent fiscal period of SHI, “25th Fiscal Period Ended April 2018,” the operational period has been changed to seven months,
and figures between October 1, 2017 and April 30, 2018 are indicated.

Contents
Summary
Executive Summary

1.

2.

3.

•••

3

External Growth

ESG Initiatives
ESG Initiatives (Participation in International Initiatives and Obtaining ExternalCertification)

•••

32

ESG Initiatives (Environment and Social)

•••

33

ESG Initiatives (Governance Structure)

•••

34

ESG Initiatives of Sekisui House

•••

35

Further Expansion of Asset Size through the First Public Offering after the Merger•••

8

Continuous Improvement of Unitholder Value•••

9

Overview of New Acquisitions

•••

10

Overview of the Assets Acquired in 9th FP

•••

11

Appendix

Overview of the Assets Acquired in 10th FP by the 4th PO (1)

•••

12

Balance Sheet

•••

37

Overview of the Assets Acquired in 10th FP by the 4th PO (2)

•••

13

Statement of Income and Retained Earnings

•••

38

Overview of the Assets Acquired in 10th FP by the 4th PO (3)

•••

14

Overview of Financial Results for Fiscal Period Ended April 2019 (9th FP) (1)

•••

39

Overview of Portfolio

•••

15

Overview of Financial Results for Fiscal Period Ended April 2019 (9th FP) (2)

•••

40

Diversification Status of Portfolio

•••

16

Forecast of Performance for Fiscal Period Ending October 2019 (10th FP) and Fiscal
Period Ending April 2020 (11th FP)

•••

41

Portfolio Map

•••

42

List of Portfolio

•••

43

Portfolio Development Policy

•••

45

Continuous Investment in Prime Properties

•••

46

Estimated Value at the End of Period

•••

47

Overview of Interest-Bearing Liabilities

•••

51

Unitholders Composition

•••

55

Changes in Unit Price (December 3, 2014 – June 14, 2019)

•••

56

Overview of Asset Management Company

•••

57

Internal Growth
Changes in Occupancy Rate

•••

19

Occupancy Status of Residences

•••

20

Rent Trends of Residences

•••

21

Trends of Residences by Investment Area

•••

22

Selection of a Lease Scheme for Office Buildings

•••

23

Selection of a Hotel Lease Scheme

•••

24

Results and Forecast of NOI and NOI Yield by Use

•••

25

•••

27

Future Growth Strategy

•••

29

Increase of Varied Enhancement Opportunities by Utilizing the Integrated Corporate
Strength of the Sekisui House Group

•••

30

Financial BaseFinancial Results

4.

5.

Growth Strategy

Executive Summary (1)Characteristics of Sekisui House Reit, Inc. (“SHR”)
Characteristic 1◼ SHR’s sponsor is Sekisui House, Ltd. (“Sekisui House”), one of

the leading homebuilders in Japan.

Characteristic 2◼

SHR is a highly stable "diversified REIT" with core assets of highquality "residential properties and office buildings"◼ Investing in Residential properties located in Greater Tokyo

527.5 billion yen

Current Portfolio (asset type)

Residences 46.8%
Office buildings 46.5%
Hotel 6.6%
Current Portfolio(area)(77.3%) and Commercial Properties located in three major
metropolitan areas (100%); Greater Tokyo, the Osaka area andthe Nagoya area (acquisition price basis).

Three major
metropolitan areas
95.6%◼ Investing in Prime Properties featuring “strategic locations” andNAV per unit
(as of end of 9th FP)“high quality”.
Characteristic 3

Current AUM(aggregate acquisition price)◼ Strong relationships with major domestic financial institutions.

78,013 yen
LTV(as of end of 9th FP)

45.3%

Note1: Money amounts less than the indicated figures are rounded down and percentage figures are rounded to the nearest first decimal place unless otherwise indicated in this document. The same shall apply hereinafter.
Note2: The figures are as of June 19, 2019.

3

Executive Summary (2)Profile of Sekisui House Reit, Inc.
Corporate Profile
Trade name
Asset management company
SponsorSekisui House Reit, Inc. (securities code: 3309)
Sekisui House Asset Management, Ltd.
Sekisui House, Ltd.
＜Major Owned Assets＞
JPY 71.9 bil JPY 51.5 bil JPY 55.8 bil JPY 8.6 bil JPY 8.2 bil/OSAKA/TOKYO/TOKYO/TOKYO/TOKYO

Owned Assets
Aggregate acquisition price
Number of properties

JPY 527.5 bil
120 properties

Distributions
Fiscal period ends
Actual for 9th fiscal period
Forecast for 10th fiscal period
Forecast for 11th fiscal period

April and October of each year
JPY 1,594 per unit
JPY 1,587 per unit
JPY 1,616 per unit

1,554

1,594

1,587

JPY 7.9 bil/TOKYO

1,616

1,352

7th FP DPU 8th FP DPU 9th FP DPU 10th FP DPU 11th FP DPU(actual)(actual)(actual)(forecast)(forecast)Financial information
Total interest-bearing liabilities
Unitholders’ capital
Number of investment units
issued and outstanding
Long-term issuer rating

Highlight

JPY 246.0 bil
JPY 147.3 bil
4,263,591 units
AA (stable) [JCR]

Around a 2.6-fold expansion of asset size since the end of 7th
FP through the merger with SHI and 4th PO.
(billion yen)

500

527.5
bil yen

250

0

200.7
bil yenEnd of 7th FP

After 4th PO

Note 1: The figures are as of June 19, 2019.

4

Executive Summary (3)Growth Strategies Utilizing Sekisui House’s Support◼ Sekisui House’s Corporate Profile and Business Strategies
About Sekisui House

Priority strategies for each business modelSekisui House’s Corporate Profile (As of January 31, 2019)[Built-to-Order Business]
Promote stable growth and work to create quality housing stock by supplying high-valueadded houses.

Corporation Name : Sekisui House, Ltd.
Date of Establishment : August 1, 1960
Capital Stock : 202,591.20 million yen
Cumulative Number of Houses Built : 2,425,372 houses

How Sekisui House became involved in the field of J-REIT
Since 2005, Sekisui House entered the J-REIT field by acquiring an equity stake inJapan Excellent Asset Management Co., Ltd., the asset manager for Japan
Excellent Inc.（The capital ties have dissolved already.）
In 2010, Sekisui House acquired 75% of Joint Capital Partners Co., Ltd., the asset
manager of Joint Reit Investment Corporation, later changed its trade name to
Sekisui House Residential Investment Corporation.
In December 2014, Sekisui House Reit, Inc. was listed on the Tokyo Stock
Exchange as diversified REIT.
In 2018, Sekisui House Reit Inc. merged with Sekisui House Residential
Investment Corporation and started operation as a diversified REIT.

[Supplied Housing Business]
Develop business for the purpose of increasing the asset value of quality housing stock
created by the Built-to-Order Business.
[Development Business]
Promote the creation of quality towns through the environment creation-oriented
development and promote stable growth by increasing the asset turnover ratio.
[Overseas Business]
Provide Sekisuihouse Quality globally based on the environmental technologies cultivatedin Japan.

◼ Sekisui House’s Consolidated Financial Statements FY2018 (Feb/18-Jan/19)
Net Sales◼ Commitment of properties by Sekisui House Group to its
sponsored J-REITs (as of June 19, 2019)
Collaboration with our J-REIT platform within Sekisui House’s Development Businesshas become significantly more important.

2,160.3
73.0
OthersTotal Assets

2,413.0 billion yen

Asset Type

Number of Properties1

Transaction PriceNet Sales

2,160.3 billion yen

Commercial properties

9 properties

314.8 billion yen

Operating Income

189.2 billion yen

66 properties

137.5 billion yen

Net Income

128.5 billion yen

75 properties

452.3 billion yen(2007-2019)

Residential properties(2010-2019)

Total(2007-2019)

Note 1: 2 office properties have been acquired by Japan Excellent, Inc. and 55 residential properties have been acquiredby Sekisui House Residential Investment Corporation.

(billion yen)

657.8
Development Businessand overseas business
655.4
Supplied Housing
Business
774.0

Built-to Order Business

5

MEMO

6

1. External Growth7

1. External Growth

Further Expansion of Asset Size through the First Public Offering after the Merger
Through the utilization of borrowing capacity in the 9th FP and the first GPO in the 10th FP of June 2019 (the “4th PO”),
asset size has increased to 527.5 billion yen (10th largest1 among 63 J-REITs), and market capitalization has steadily expanded■ Changes in Asset Size
Acquisition price (billion yen)
700

600

500

Asset Acquiredin 10th FP by the 4th PO
8th FP

Merger with SHIAsset replacement
at the same time
Acquisition of 6 residences
Disposition of 12 residences

Disposition of
a suburban
retail property

440.8

Assets acquiredin 9th fiscal period

Acquisition of
3 office buildings
and 4 residences

Acquisition of a hoteland 2 residences

438.1

Aim to further
expandthe asset size

527.5
457.3
19.2

70.1

Assets acquired in 9th FP(3 properties 19.2 billion yen)
Hotel

Residence

Residence

The Ritz-Carlton Kyoto

Esty Maison Kokura

MAST Ijiri

Assets acquired in 10th FP by the 4th PO(7 properties 70.1 billion yen)

400

Officebuilding

Officebuilding

Officebuilding

Akasaka
Garden City

Garden City
Shinagawa Gotenyama

Hommachi Minami
Garden City

(Additional acquisition portion)(Additional acquisition portion)

300

200

Residence

Residence

100

Residence

Residence

200.7

0
End of 7th FP

At the time of merger(May 1, 2018)

End of 8th FP

End of 9th FP

After the 4th PO(10th FP)

Prime Maison
Mitatsunamachi

Comparison withthe end of 8th FP
Number ofproperties
Unrealized
capital gains2
Marketcapitalization3

Esty Maison
Prime Maison Prime Maison
Hongo
Kuramae Yokohama-aobadai North

Lower LTV due to the 4th PO

6 properties

113 properties

112 properties

115 properties

120 properties+8 properties¥36.6 billion-¥45.3 billion¥53.7 billion¥60.9 billion+¥15.6 billion

End of 9th FP¥136.6 billion¥266.7 billion¥265.2 billion¥302.0 billion¥341.5 billion+¥76.2 billion

45.3%

Note 1: The asset size of each J-REIT is based on the total acquisition price of each J-REIT stated in the financial results and press releases, etc. announced as of June 14, 2019.
Note 2: "Unrealized capital gains" is calculated by deducting the book value from the appraisal value at each point in time and rounded down to the nearest unit. However, unrealized
capital gains after the 4th PO is calculated by adding the unrealized capital gains on assets acquired in 10th FP by 4th PO ( = appraised value as of April 1, 2019 – acquisition
price) to the unrealized capital gains as of the end of the 9th FP. The same applies hereinafter.
Note 3: "Market capitalization" is calculated based on the closing price of investment units at each time point and the total number of investment units issued and outstanding. "Market
capitalization" after the 4th PO is calculated based on the closing price of investment units and the total number of investment units issued and outstanding as of June 14, 2019.
Note 4: With regard to “LTV after the 4th PO”, the estimated value is based on the assumption that the number of investment units issued by way of third-party allotment will be fully paid
and the loans will be partially early repaid. The same applies hereinafter.

0.6pt
declineAfter the 4th PO

44.7%4

Borrowing capacity up to LTV 50%
Approx. ¥57.3 billion
Maintaining a conservative LTV control policy
with the LTV ratio at mid-40% range8

1. External Growth

Continuous Improvement of Unitholder Value
Maximize utilizing the Sekisui House Group's support and promote DPU and NAV per unit steadily even after the merger
Before fiscal period ended April 2018 (7th FP)(before the merger)¥2,000Distribution per unit (forecast)Distribution per unit1¥1,800¥1,600¥1,400¥69,442¥66,515¥62,765

After fiscal period ended October 2018 (8th FP)(after the merger)
Estimated value
after the 4th PO

NAV prer unit1, 2¥74,929¥71,444¥75,791¥75,775¥78,013¥90,000¥79,198¥80,000¥70,000¥57,805¥1,554¥1,200¥1,594¥1,587¥1,616¥50,000¥1,000
¥800
¥600
¥400
¥200

¥60,000+20 yencompared to
the valueannounced
on January
29, 2019¥801¥1,229¥1,238¥1,298¥1,331¥1,355¥1,352

Beforeadjustment¥1,603

Beforeadjustment¥2,458Beforeadjustment¥2,477

Beforeadjustment¥2,596

Beforeadjustment¥2,663

Beforeadjustment¥2,710

Beforeadjustment¥2,705Ended Apr. 2015
(1st FP)

Ended Oct. 2015
(2nd FP)

Ended Apr. 2016
(3rd FP)

Ended Oct. 2016
(4th FP)

Ended Apr. 2017
(5th FP)

Ended Oct. 2017
(6th FP)

Ended Apr. 2018
(7th FP)+3 yencompared to
the valueannounced
on May 23,
2019¥40,000¥30,000¥20,000¥10,000¥0¥0Ended Oct. 2018
(8th FP)

Ended Apr. 2019
(9th FP)Ending Oct. 2019
(10th FP)Ending Apr. 2020
(11th FP)

(forecast)(forecast)

Note 1: As a two-for-one split of investment units was implemented on May 1, 2018, and in consideration of the impact of the split, “distribution per unit” and “NAV per unit” for each period before to the 7th FP are calculated by
dividing the actual figures by two, and the amounts are rounded down to the nearest decimal.
Note 2: "NAV per unit" is calculated based on net assets on the balance sheet as of the end of each period plus unrealized capital gains, less total distributions (NAV). However, the "NAV per unit" after the 4th PO is calculated based on
NAV at the end of the fiscal period ended April 2019 (9th FP) by taking into account the effect of the expected procurement amount including the third-party allotment by the 4th PO and the unrealized capital gain on assets
acquired in the 10th FP.

■ State by Use as of the end of Fiscal Period Ended April 2019 (9th FP)
Residences

Office buildings

HotelsEntire portfolio

Entire portfolio
as of end of 8th FP

Number of properties1

108 properties

6 properties

2 properties

115 properties

112 properties

Total appraisal value

248.0 billion yen

221.2 billion yen

36.3 billion yen

505.5 billion yen

479.1 billion yen

Unrealized capital gains

10.2 billion yen

42.3 billion yen

1.2 billion yen

53.7 billion yen

45.3 billion yen

3.6%

11.9% (+1.5pt)3

10.4%

Unrealized capital gains ratio2

4.3%

23.6%

Note 1: When calculating “Number of properties” by use, “Hommachi Garden City” is recorded as one property each in an office building and a hotel, but is calculated as one building when calculating the “Number of properties” for theentire portfolio. The same applies hereinafter.
Note 2: “Unrealized capital gains ratio” is calculated by dividing unrealized capital gains at each point by the book value.
Note 3: The values inside the brackets for “Entire portfolio” record the comparison between the “Unrealized capital gains ratio” as of the end of the fiscal period ended April 2019 (9th FP) and the “Unrealized capital gains ratio” as ofthe end of the fiscal period ended October 31, 2018 (8th FP).

9

1. External Growth

Overview of New Acquired Properties
Number of new acquired properties

Total acquisition priceTotal appraisal value

10 properties

89.3 billion yen

97.2 billion yen

Ratio of acquisition from Sekisui House Group1

Average appraisal NOI yield2

Ratio of Prime Prioerties3

98.8 %

before depreciation 4.0 %98.4 %

after depreciation 3.5 %■ Overview of New Acquired Properties＜Assets acquired in 9th FP＞
Asset type

Residence
Hotel

Property nameLocation

Acquisition price(million yen)Appraisal value(million yen)4

Appraisal NOI yield
Occupancy rate Building age（before depreciation）(%)5(years)6
2
(%)

Prime
Property

Esty Maison Kokura

Kitakyusyu-shi, Fukuoka

1,040

1,050

5.4

86.4

13.3

MAST Ijiri

Fukuoka-shi, Fukuoka

390

400

5.5

100.0

11.4

-

Kyoto-shi, Kyoto

17,80018,480

4.0

100.0

5.7

○

19,23019,930

4.1

97.0

6.2

-

The Ritz-Carlton, Kyoto
Total / Average-＜Assets acquired in 10th FP by the 4th PO＞
Asset type

Property nameAcquisition price(million yen)Appraisal value(million yen)4

Appraisal NOI yield
Occupancy rate Building age（before depreciation）(%)5(years)6
2
(%)

Prime
Property

Minatok-ku, Tokyo

28,70029,900

3.6

98.4

13.4

○

Shinagawa-ku, Tokyo

12,35015,000

4.2

100.0

8.3

○

Hommachi Minami Garden City
（additional acquisition portion）

Osaka-shi, Osaka

20,90023,800

4.3

100.0

8.3

○

Prime Maison Mitatsunamachi

Minato-ku, Tokyo

2,040

2,160

4.4

79.9

1.7

○

Prime Maison Hongo

Bunkyo-ku, Tokyo

2,600

2,700

4.3

91.7

1.3

○

Prime Maison Kuramae

Taito-ku, Tokyo

2,190

2,260

4.3

81.8

0.6

○

1,360

1,460

5.0

100.0

1.0

○

70,14077,280

4.0

97.4

9.6

-

Akasaka Garden City
Office building

Location

Garden City Shinagawa Gotenyama（additional acquisition portion）

Residence
Esty Maison Yokohama-aobadai North
Total / Average

Yokohama-shi, Kanagawa

Note1：“Ratio of acquisition from Sekisui House Group" is the ratio of the total acquisition price of assets acquired from Sekisui House Group to the total acquisition price of new acquired properties.
Note2：Among the “(Average) appraisal NOI yield," the "before depreciation" is the (total) appraisal NOI based on the direct capitalization method, which does not take into account the depreciation of each new acquired property, while the "after depreciation" is the (total) of theappraisal NOI after deducting the annualized estimated depreciation for the fiscal period ending Apr. 2020 (11th FP), and divided by the (total) acquisition price. The same applies hereinafter.
Note3：The “Ratio of Prime Property" is calculated based on the acquisition price of assets that qualify as Prime Properties. Prime Property (hereinafter referred to as "PP"; the same applies hereinafter) refers to high-quality residential and commercial properties located in strategic
locations. The same applies hereinafter. See page 46 for more information on the Prime Properties.
Note4：For “Esty Maison Kokura”, "The Ritz-Carlton, Kyoto" and "MAST Ijiri", and “Assets acquired in 10th FP by the 4th PO”, “Appraisal value” are indicated based on each real estate appraisal report as of Nov. 1, 2018, Dec. 31, 2018 and Apr. 1, 2019 respectively.
Note5：“(Average) occupancy rate" of each new acquired property is the ratio of (total) leased area to the (total) leasable area as of the end of Apr. 2019 for the assets acquired in 9th FP and as of the end of May 2019 for the assets acquired in 10th FP by the 4th PO.
The same applies hereinafter.
Note6：The “Building age" of each new acquired property is based on the date of this document, and the "average building age" of each new acquired property is weighted average by the acquisition price. The same applies hereinafter.

101. External Growth

Overview of the Assets Acquired in 9th FP
Hotel H-002

The Ritz-Carlton, Kyoto
A luxury brand hotel of Marriott International,
Inc. located in a scenic and a rare locationd

5-star hotels in Japan1
The Ritz-Carlton, Kyoto

Kyoto

Mandarin Oriental, Tokyo

Tokyo

Palace Hotel TokyoTokyo

The Peninsula Tokyo

Tokyo

Shangri-La Hotel, Tokyo

Tokyo

Note 1: Sited from Forbes Travel Guide 2019.

A luxury hotel rooted in culture and tradition of
Kyoto, rated “5-star” by “Forbes Travel Guide” forthe first time among the Kansai area hotels◼ Excellent and rare location which is highly suitable for an
urban resort, with a scenic view of the Higashiyama SanjuRoppo, and surrounded by many sightseeing places; Nijo
Castle, Kyoto Gyoen, Gion area and etc.
◼ Suitable for both sightseeing and business purposes

Appraisal value(As of Nov. 1, 2018)

Occupancy rate

23,461.39㎡
9,384.56㎡

Type of specified asset

40.0% co-ownership interest―

NOI yield

86.4%

MAST Ijiri◼ Good access to Tenjin and Hakata, the central area of Fukuoka-shi◼ Balanced mixture of rooms appealing to singles to families
Location
Structure
Completion
Total Leasable area
ML (ML type)

Before / After
depreciation

134 rooms

4.0% / 3.5%

Acquisition price

5.4% / 3.9%
(As of Apr. 30, 2019)

Number of rooms

Before / After depreciation

Residence R-108

Kyomachi, Kokurakita-ku,Kitakyushu-shi,Fukuoka
RC / 14F
Feb. 2006
3,062.59㎡ (61 units)
Haseko Livenet, Inc.(Pass-through type ML)¥1,050mn

Total floor area
Total leasable area2¥18,480mn◼ Located in Kokurakita-ku, the governmental and economic center of Kitakyushu-shi◼ Good sunlight and ventilation from southbound openings for all units

NOI yield

Oct. 2013

Note 2: “Total leasable area” reflects a ratio of co-ownership interest or compartmentalized ownership which SHR owns in each property.
The same applies hereinafter.

Esty Maison Kokura¥1,040mn

RC with stainless steel sheet roof / B3F, 5F(As of Dec. 31, 2018)¥17,800mn

Acquisition price

Structure
Completion

Appraisal value

Acquisition price

Location
Structure
Completion
Total Leasable area
ML (ML type)

Kamogawa Nijo-Ohashi Hotori, Nakagyo-ku,
Kyoto-shi, Kyoto

ML (ML type)◼ Top-quality hospitality and 134 luxury rooms with anaverage floor area of 50㎡

Residence R-107

Location

Appraisal value(As of Dec. 31, 2018)

Ijiri, Minami-ku, Fukuoka-shi, Fukuoka
RC / 11F
Jan. 2008
1,430.60㎡ (30 units)
Sekiwa Real Estate Kyushu, Ltd.(Fixed-rent type ML)¥390mnNOI yield¥400mnOccupancy rate

Before / After
depreciation

5.5% / 4.1%
(As of Apr. 30, 2019)100.0%

11

1. External Growth

Overview of the Assets Acquired in 10th FP by the 4th PO (1)Office Building
O-007

Akasaka Garden City
High-quality and eco-friendly office building located in Akasaka area, adowntown area in Tokyo

Acquisition price¥28,700mn

Appraisal value¥29,900mn

High-quality office building built in 2006

Occupancy rate

NOI yield(As of Apr. 1, 2019)(As of May 31, 2019)

Before / After depreciation

98.4%

3.6% / 3.4%

Elevator bank separated into high / low floors Eco-friendly office building with energy
conservation and nature＜Ownership by floor＞

Multi-tenant office building located in central Tokyo◼ In a location with convenient access to major areas in Tokyo via four train stations
and seven metro lines◼ The Akasaka area is a highly concentrated business district in the center of Tokyo,
adjacent to Kasumigaseki area and Nagata-cho area, where many government
offices are located.

High-quality office building developed by Sekisui House◼ Featured with a multi-purpose design with the dividable standard floor area ofaround 1,554㎡ or 470 tsubo of regular-shaped spaces without pillars, and open
and bright space with the ceiling height of 2,800mm and the raised floor of
100mm◼ Equipped with energy conserving facilities of Low-E double-glazed glass andelectric double blinds

19F
18F
17F
16F
15F
14F
13F
12F
11F
10F
9F
8F
7F
6F
5F
4F
3F
2F
1F
B1F
B2F

OfficeOfficeOfficeOfficeOfficeOfficeOfficeOfficeOfficeOfficeOfficeOfficeCommon space
RetailOfficeCommon space
Common space

Exclusive portions of the building, in which
co-ownership interest acquired
Owned by others

Location

Akasaka, Minato-ku, Tokyo

Structure

S・SRC・RC / B2F, 19F

Completion

Jan. 2006

Total floor area

46,776.76㎡

Total leasable area

12,472.80㎡Type of specified
asset

65.45% co-ownership interest in thecompartmentalized ownership of the floors
indicated above

ML (ML type)

Sekisui House (Pass-through type ML)

12

1. External Growth

Overview of the Assets Acquired in 10th FP by the 4th PO (2)Office Building
O-001

Garden City Shinagawa Gotenyama
Eco-friendly, house-like office building in harmony with historic streetscape

Office Building
O-003

Hommachi Minami Garden City
Landmark office building on Midosuji Street,main street of Osaka City

Located at the financial district in Chuo-ku, Osaka

Non-pile office with 2,800mm height and over 1,340㎡ or
400 tsubo of standard floor area

High-grade office building built in 2011

◼ Good convenience via four train stations including Shinagawa Station,and ten train lines◼ Located on Midosuji Street, which is an established office areawith a high concentration of financial institutions
and insurance companies◼ Designed to be an eco-friendly building with energy-saving features
and to meet tenant companies’ business continuity plans (BCPs)
through facilities such as a seismically-isolated structure, private
power generators, etc.

◼ Good convenience via a train station with three metro lines andeasy access to Shinkansen line and airports◼ We will own 100.0% of compartmentalized ownership after thisadditional acquisition◼ We will own 100.0% of compartmentalized ownership after thisadditional acquisition
Location

Kitashinagawa, Shinagawa-ku, Tokyo

Structure

RC / B1F, 9F

Completion

Feb. 2011

Appraisal value

Total floor area

62,975.42㎡(As of Apr. 1, 2019)

Total leasable area
Type of specified asset
ML (ML type)

Office building with sense of liberation and massive feelingbuilt in 2011

Approx. 2,044 tsubo of standard floor area, Eco-friendly office building with advancedenergy conservation system and nature
which is one of the largest in Japan

7,341.65㎡
Compartmentalized ownership(Approx. 19.0% of all)Sekisui House (Pass-through type ML)

Acquisition priceNOI yield
Occupancy rate
(As of May 31, 2019)¥12,350mn¥15,000mn
Before / After depreciation

4.2% / 3.7%
100.0%

Location

Kitakyuhojimachi, Chuo-ku, Osaka-shi, Osaka

Structure

S・SRC / B2F, 25F

Completion

Feb. 2011

Appraisal value

Total floor area

46,010.88㎡(As of Apr. 1, 2019)

Total leasable area
Type of specified asset
ML (ML type)12,958.07㎡
Compartmentalized ownership(Approx. 43.7% of all)Sekisui House (Pass-through type ML)

Acquisition priceNOI yield
Occupancy rate
(As of May 31, 2019)¥20,900mn¥23,800mn
Before / After depreciation

4.3% / 3.6%
100.0%
13

1. External Growth

Overview of the Assets Acquired in 10th FP by the 4th PO (3)Residence
R-109

Location

Mita, Minato-ku, Tokyo

Structure

RC / B1F, 5F

Completion

Oct. 2017

Total leasable area
ML (ML type)

Residence
R-110

Prime Maison Mitatsunamachi◼ Convenient access via three train stations andthree metro lines, an approx. six-minute walkfrom the nearest train station

1,387.12㎡ (18 units)

Before / After depreciation

Acquisition price¥2,040mn

NOI yield

Appraisal value¥2,160mn

Occupancy rate

Residence
R-111

Prime Maison Kuramae

Location

Kuramae, Taito-ku, Tokyo

Structure

RC / 14F

Completion

Nov. 2018

Total leasable area
ML (ML type)2,259.40㎡ (65 units)(As of May 31, 2019)4.4% / 3.8%
79.9%

◼ Convenient access via two train stations andtwo metro lines, an approx. three-minute walkfrom the nearest train station

RC / B1F, 14F

Completion

Mar. 2018

Total leasable area

Acquisition price¥2,190mn

NOI yield

Appraisal value¥2,260mn

Occupancy rate
(As of May 31, 2019)

Before / After depreciation

4.3% / 3.5%
81.8%

◼ Convenient access via three train stations andthree metro lines, an approx. four-minute walkfrom the nearest train station

2,423.46㎡ (67 units)
Sekiwa Real Estate, Ltd. (Pass-through type ML)

Acquisition price¥2,600mn

NOI yield

Before / After depreciation

Appraisal value¥2,700mn

Occupancy rate

91.7%

(As of Apr. 1, 2019)

Residence
R-112

Location

Aobadai, Aoba-ku, Yokohama-shi, Kanagawa
RC / B1F,3F

Completion

Jul. 2018

Total leasable area

(As of May 31, 2019)4.3% / 3.6%

Esty Maison Yokohama-aobadai North

Structure

ML (ML type)

Sekiwa Real Estate, Ltd. (Pass-through type ML)(As of Apr. 1, 2019)

Hongo, Bunkyo-ku, Tokyo

ML (ML type)

Sekiwa Real Estate, Ltd.(Pass-through type ML)(As of Apr. 1, 2019)

Location
Structure

Prime Maison Hongo◼ Approx. ten-minute walk from the nearest station,
enabling direct access to business and commercial
centers in Tokyo and Yokohama

2,723.24㎡ (32 units)
Sekiwa Real Estate, Ltd. (Pass-through type ML)

Acquisition price¥1,360mn

NOI yield

Before / After depreciation

Appraisal value¥1,460mn

Occupancy rate

100.0%(As of Apr. 1, 2019)(As of May 31, 2019)5.0% / 4.0%

14

1. External Growth

Overview of Portfolio
Asset size

Number of properties

Total

120 properties

527.5 billion yen

Acquisition fromthird-parties

Ratio of acquisition from Sekisui House Group

75.0% (¥395.8 billion)

57 properties

Asset size

Average acquisition price

Forecast NOI yield (10th forecast)Sekisui House¥527.5 billion

per property

4.3%
After depreciation 3.4%

Ratio of Prime Properties

Portfolio PML value

Residential
properties

91.4%

1.64%

46.8%

(92 properties)(As of survey in April 2019)

4.3 billion yen

Before depreciation

120 properties

46 properties(Average acquisition price per property: ¥8.2 billion)

Commercial
properties

53.2%

Seven Sekiwa Real Estate Companies¥16.5 billion

11 properties(Average acquisition price per property: ¥1.5 billion)

Diversification status
by useDiversification status
by area

Diversification status
by building age(acquisition price basis)(acquisition price basis)(acquisition price basis)

Hotel(2 properties)

Nagoya area
(10 properties)

6.6%

Asset size
46.5%

46.8%

26.2%

527.5

Others(14 properties)

15 or more years(8 properties)

4.4%
4.4%

Residence(112 properties)

Osaka area
(13 properties)

Under 5 years(15 properties)

4.3% 9.2%

Three Major
Metropolitan
65.0%
Areas3

30.7%

Greater Tokyo(83 properties)

Averagebuilding age

9.6 years 55.8%

95.6%

billion yen
Office building(7 properties)¥379.2 billion

10 or more toless than 15 years(68 properties)

5 or more toless than 10 years(29 properties)

Note 1: Unless otherwise mentioned, information is recorded as of the date of this document. As ratios are rounded to the first decimal place, there are cases when the total ratio does not reach 100%. The same applies hereinafter.
Note 2: In calculating “Diversification status by use”, “Hommachi Garden City” is recorded as one property each in an office building and a hotel, but is calculated as one building when calculating “Ratio of Prime Properties”, “Ratio of acquisition fromSekisui House Group”, “Diversification status by area” and “Diversification status by building age”.
Note 3: The “Three Major Metropolitan Areas” is Greater Tokyo, Osaka Area and Nagoya Area. “Greater Tokyo” includes Tokyo, Kanagawa Prefecture, Chiba Prefecture and Saitama Prefecture; “Osaka area” includes Osaka Prefecture, Kyoto Prefecture,
Hyogo Prefecture and Nara Prefecture; and “Nagoya area” includes Aichi Prefecture. The same applies hereinafter.

15

1. External GrowthDiversification Status of Portfolio
Averageacquisition price

Forecast NOI yield

112 properties

2.2 billion yen

Before depreciation 4.5%
After depreciation 3.4%

81.7% (84 properties)

8 properties

35.0 billion yen

Before depreciation 4.1%
After depreciation 3.5%

100.0% (all properties)

Asset size

Number of properties

Residential properties(residence)

Total 247.0
billion yen

Commercial properties(Office building and hotel)

Total 280.5
billion yen

per property

Diversification status
by building age

Diversification status
by time to nearest station by walking(acquisition price basis)(acquisition price basis)(acquisition price basis)

Others(14 properties)

Under 5 years(14 properties)

15 or more years
Greater Tokyo(8 properties)(80 properties)

9.3%

9.4%
6.8%

77.3%

Metropolitan
Areas

35.6%

24.3%

Within10-minute walk

30 m² toless than 50 m²(2,472 units)

93.4 %

5 or more toless than 10 years(23 properties)

50 m² toless than 100 m²(2,401 units)

Less than 30 m²(4,884 units)

0.9%

積和不動産各社

17.9%

10 or more toless than 15 years(67 properties)

Diversification status byfloor area

100 m² or more
Within 3 minutes(85 units)(34 properties)

6.6%

10.5

90.6%

Ratio of Prime Properties(based on the number of leasable residential units)More than
10 minutes(10 properties)

More than
Average
5 minutes
and within
Building Age 18.9%
10 minutes
53.9%(36 properties)
years

6.6% Three Major
Osaka area
(9 properties)

per property

Diversification status
by area
Residential properties

Nagoya area
(9 properties)(10th FP forecast)

24.4%

Averagearea per unit

49.6%

38.5 m²
25.1%

More than 3 minutes
and within 5 minutes(32 properties)

33.5%

Commercial properties
Nagoya area
(1 property)

1.6%
10.2%

2.3%
43.5% Three Major

Metropolitan
Areas
Osaka area
(4 properties)

Less than 10,000 m²(1 property)

Under 5 years(1 property)

54.2%

10 or more toless than
15 years(1 property)

37.1%

Average
Building Age
88.2%

Greater Tokyo(3 properties)

50,000 m² or more
(1 property)

2.3%

8.8 years

100.0%(acquisition price basis)

More than
5 minutes
and within
10 minutes(5 properties)

5 or more toless than 10 years(6 properties)

Within 3 minutes(3 properties)

Within10-minute walk

100.0 %
62.9%

10,000 m² or more toless than 30,000 m²(3 properties)

25.7%

Total
floor area
30,000 m² or
more

26.3%

71.5 %
45.8%

Note 1: In calculating the diversification status of commercial properties, “Hommachi Garden City” is calculated as if the building under sectional ownership of the office building portion and hotel portion was deemed a single property andnot as separate buildings.
Note 2: “Diversification status by floor area” of commercial properties is based on the floor area stated in the registry for the entire building and the ratio is calculated based on the acquisition price.

30,000 m² or moreto less than
50,000 m²(3 properties)

16

MEMO

17

2. Internal Growth18

2. Internal Growth

Changes in Occupancy Rate
■ Change in Occupancy Rate by Month
Residence

Office building

Hotel100.0％

Retail and other properties

Total

100.0％

100%
98.4％

97.5％

97.5％

95%

90%

May
2017

Jun.

Jul.

Aug.

Sep.

Oct.

End of24ｔｈ FP（SHI）End of6ｔｈ FP
（SHR）

Nov.

Dec.

Jan.
2018

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

End of 7ｔｈ FP Merger（SHR）
End of 25ｔｈ FP
（SHI）

Oct.

Nov.

End of8ｔｈ FP

Dec.

Jan.
2019

Feb.

Mar.

Apr.
End of9ｔｈ FP■ Occupancy Rate by Use
FP ended Oct. 2017 / FP ended Sep. 2017
(6th FP / 24th FP)

Residential
properties

Commercial
properties

As of
end of the FP

Averageduring the FP

Residence

97.0%

96.8%

Office building

100.0%

Hotel
Retail and otherproperties

FP ended Apr. 2018
(7th FP / 25th FP)
As of
end of the FP

Averageduring the FP

97.0%

97.2%

97.2%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

HighestFP ended Oct. 2018
(8th FP)As of
end of the FP

Averageduring the FP

97.8%

97.9%

97.3%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%（End of Sep.）

HighestAs of
end of the FP

Averageduring the FP

97.9%

96.7%

97.5%

97.8%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%

100.0%－

100.0%

100.0%－－（End of Mar.)

Entire portfolio after the merger on May 1, 2018

FP ended Apr. 2019
(9th FP)
Highest（End of Oct.）（End of Nov.）（End of Oct.）

98.4%

97.9%

98.4%

Highest－（End of Nov.）

97.5%

98.1%

98.3%

Note 1: The occupancy rate in the above graph records the ratio of the total leased area of the total leasable area of operating assets that belong to the use for SHR and SHI as of the end of each month from May 2017 to April 2019. In addition,“Total” in the above graph before the merger, prior to the end of 7th FP, shows the occupancy rate of entire portfolio for SHR before the merger.
Note 2： “Average during the FP” for each period indicates the average value of occupancy rate as of the end of each month that belongs to each period. The same applies hereinafter.

19

2. Internal Growth

Occupancy Status of Residences■ Occupancy Rate for Residences by Investment Area1
Greater Tokyo
23 wards of
Tokyo
FP ended Apr.
2018
(25th FP)FP ended Oct.
2018
(8th FP)FP ended Apr.
2019
(9th FP)As of
end of the FP
Average during
the FPAs of
end of the FP
Average during
the FPAs of
end of the FP
Average during
the FP

Major Cities Nationwide
Nagoya city

Osaka city

Fukuoka city

Sapporo city

Total

96.9%

96.7%

97.7%

96.4%

96.0%

99.1%

96.6%

97.2%

97.0%

97.0%

97.4%

95.6%

95.5%

98.9%

97.2%

97.2%

97.6%

97.5%

98.3%

97.4%

96.8%

99.1%

97.8%

97.9%

96.8%

96.7%

97.9%

96.7%

96.0%

98.9%

97.6%

97.3%

96.6%

96.5%

96.8%

95.7%

97.6%

97.9%

92.8%

96.7%

97.4%

97.4%

97.6%

96.6%

97.1%

99.1%

95.2%

97.5%

■ Monthly Trends in Occupancy Rate for Residences by Investment Area1
Greater Tokyo

23 wards of Tokyo

Major Cities Nationawaide

Entire Residence

100%

98.3％

97.7％

97.1％

97.9％

97.2％
96.9％

96.8％

97.0％

96.7％
97.6％

96.9％

96.9％

96.6％ 96.5％

97.5％
96.7％

95%

FP ended Apr. 2018 (25th FP)(7-month) Period-average occupancy rate2

FP ended Oct. 2018 (8th FP)

97.2%

Period-average occupancy rate2

FP ended Apr. 2019 (9th FP)

97.3%

Period-average occupancy rate2

97.5%

90%
End of Sep.
2017

End of Dec.

End of Apr.
2018

End of Jul.

End of Oct.
2018

End of Jan.

End of Apr.
2019

Note 1: “Occupancy Rate for Residences by Investment Area” is the rate of the total leased area of the total leasable area at the end of each month broken down by investment area, based on residences owned as of the end of each month.
Note 2: “Period-average occupancy rate” is the average occupancy rate for the end of each month within each period.

20

2. Internal Growth

Rent Trends of Residences■ Rent Trends in Renewal Contracts■ Rent Trends in New Contracts
FP ended Mar.
2017 (23rd FP)

FP ended Sep.
2017 (24th FP)

FP ended Apr.
2018 (25th FP)

FP ended Oct.
2018 (8th FP)

FP ended Apr.
2019 (9th FP)

944

880

1,030

859

814

¥112,843¥108,775¥122,367¥115,316¥104,912

thousandthousandthousandthousandthousand¥1,871¥1,913¥2,204¥1,541¥2,214thousandthousandthousandthousandthousand

/ 391

/ 450

/ 522

/ 480

/ 587

(¥1,220)(¥873)(¥1,336)(¥789)(¥ 370)thousandthousandthousandthousandthousand

/ 184
650

/159
1,040

/ 212
868

/ 129
751

/ 67
1,844

thousandthousandthousandthousandthousandNew contract rents(Monthly rent)1
Total increase in rent
/ number of cases

Total decrease in rent
/ number of cases

Change in rent (net)█ Increased rent contract ratio

19.5%
75.0%

50.0%

25.0%

1.0%
0.6%
39.1%

30.8%

20.6%

15.0%

0.7%

0.7%

28.7%

29.1%

50.7%

FP ended Apr.
2019 (9th FP)

1,251

1,127

1,860

1,127

1,361

¥150,085¥137,240¥214,506¥146,256¥170,609

thousandthousandthousandthousandthousand

Total increase in rent
/ number of cases

¥124

¥216

¥293

¥183

¥211

thousandthousandthousandthousandthousand

/ 75

/ 69

/ 145

/ 82

/ 126

Total decrease in rent
/ number of cases

(¥15)

-

(¥63)

-

-

thousand

/¥183

/¥211

thousandthousand/2//5¥109 ¥216 thousand ¥230 thousand

Change in rent (net)thousand█ Increased rent contract ratio

8.2%
1.8%
19.7%

2.0%

0.3%

0.2%
1.0%

75.0%

0.2%

24th FP

25th FP

66.3%

0.0%

50.0%

-1.0%

25.0%

SHR 8th FP

9th FP

55.3%

-2.0%

0.0%

68.9%
75%

0%

50%
24th FP

25th FP

0.1%

93.9%

93.8%

91.9%

92.7%

90.7%

SHR 8th FP

0.0%

9th FP

SHI 23rd FP

24th FP

25th FP

9.3% -0.2%

7.3%

7.8%

6.1%

SHR 8th FP

9th FP-0.3%■ Changes in Renewal Rate
Renewal rate continuously maintained a level of over 80%
100%

50%

SHI 23rd FP

0.1%

-0.1%

100%

59.2%

0.2%

0.1%

0.1%

55.9%

■ Changes in Key Money Acquisition Rate
Acquisition rate of key money increased to 68.9%
57.5%

0.3%

0.1%

41.4%

SHI 23rd FP█ No rent change contract ratio █ Decreased rent contract ratio

100.0%

6.0%
0.0%

thousandRate of change in rent against previous rent2

72.1%

51.1%

FP ended Oct.
2018 (8th FP)

Renewal contract rents(Monthly rent)1█ No rent change contract ratio █ Decreased rent contract ratio

18.1%

FP ended Apr.
2018 (25th FP)

Number of renewal
contracts

Rate of change in rent against previous rent2

100.0%FP ended Sep.
2017 (24th FP)

百Number of newcontracts

FP ended Mar.
2017 (23rd FP)

84.5%

85.3%

SHI 23rd FP

24th FP

Note 1: "New contract rents" and “Renewal contract rents" are the total monthly rent at the time of new and renewal contracts in each period and include common service fees.
Note 2: “Rate of change in rent against previous rent” represents the ratio of the total change in rent (net) at the time of new or renewal contracts to the total of the previous rent.

87.2%

25th FP

85.0%

86.2%

SHR 8th FP

9th FP21

2. Internal Growth

Trends of Residences by Investment Area
■ Rent Trends by Investment Area
Based on 108 residences
owned as of the end of the 9th FP

Based on 106 residences owned as of the end of the 8th FP
Period-end unit rent per tsubo
as of the end of FP ended Oct. 2018(end of 8th FP)

Period-end unit rent per tsubo
as of the end of FP ended Apr. 2019(end of 9th FP)

Change in unit rent per tsubo/
Rate of change in unit rent per tsubo2(against the end of 8th FP)

Period-end unit rent per tsubo
as of the end of FP ended Apr. 2019(end of 9th FP)

Greater Tokyo¥13,346 / tsubo¥13,374 / tsubo

+¥28

+0.2%

¥13,374 / tsubo

23 wards of Tokyo¥13,659 / tsubo¥13,685 / tsubo

+¥26

+0.2%

¥13,685 / tsubo

Others¥10,909 / tsubo¥10,952 / tsubo

+¥43

+0.4%

¥10,952 / tsubo

Major Cities Nationwide¥7,089 / tsubo¥7,096 / tsubo

+¥7

+0.1%

¥7,057 / tsubo

Total¥11,512 / tsubo¥11,552 / tsubo

+¥40

+0.3%

¥11,499 / tsubo

Note 1: Rent and floor area for stores and offices in residences, as well as the rent and the floor area of residences in which fixed-rent type master lease agreements have been concluded are not included in calculating the above figures.
Note 2: "Rate of change in unit rent per tsubo" represents the ratio of the change in unit rent per tsubo for each investment area in each period to the unit rent per tsubo at the end of the 8th FP.

■ Rent Trends in New Contracts by Investment Area

■ Rent Trends in Renewal Contracts by Investment Area

FP ended Apr. 2019 (9th FP)
Number of
new contracts

Change in rent (net)

FP ended Apr. 2019 (9th FP)

Rate of change in rent1

Number of renewal
contracts

Change in rent (net)Rate of change in rent1

1,004¥211 thousand

0.2%

622

¥1,582 thousand

1.9%

23 wards of
Tokyo

539

¥1,389 thousand

1.9%

23 wards of
Tokyo

868

¥131 thousand

0.1%

Other

83

¥193 thousand

2.3%

Other

136

¥80 thousand

0.6%

Major Cities
Nationwide

192¥262 thousand

1.3%

Major Cities
Nationwide

357

-

-

Total

814

¥1,844 thousand

1.8%

Total

1,361

¥211 thousand

0.1%

Greater Tokyo

Greater Tokyo

Note 1: "Rate of change in rent" represents the ratio of the sum total of change in rent (net) at the time of new or renewal contracts for each investment area in each period to the sum total of the previous rents.

22

2. Internal Growth

Selection of a Lease Scheme for Office Buildings
For properties that can be expected to improve profitability and stable operation,
pursue internal growth opportunities by adopting pass-through type master lease contracts.
⚫

As for the existing portion of Hommachi Minami Garden City, scheduled to change its lease scheme from a fixed-rent type ML to a pass-through type ML in Dec. 2019.

⚫

Regarding the existing portions of Garden City Shinagawa Gotenyama and Hommachi Garden City (office building portion), examine the type of a lease agreement
after confirming the status of the end tenant lease contract and the office market in the area where the property is located.

■ Type of Lease Agreement for Office Buildings
Property Name

Type of lease agreement
as of the end of 8th FP

Type of lease agreement
as of the date of this material

Rent of fixed-rent typeML agreement(Yen/tsubo)1

Rent ofend tenant(Yen/tsubo)2

End tenant
occupancy rate as ofthe end of 9th FP

Akasaka Garden City

New-

Pass-through type ML agreement−

28,473

98.4%

Garden city
Shinagawa Gotenyama

New-Pass-through type ML agreement−

23,432100.0%

Owned

Fixed-rent type ML agreement

Fixed-rent type ML agreement (due in Dec. 2019)23,25026,068

91.5%

New

-

Pass-through type ML agreement−

22,877100.0%

19,36021,321100.0%

29,28032,085

99.7%

Hommachi Minami
Garden City

Owned

Fixed-rent type ML
agreement

Fixed-rent type ML agreement

Scheduled to change to passthrough type ML agreementin Dec. 2019

Hommachi Garden City
(office building portion)

Fixed-rent type ML agreement

Fixed-rent type ML contract (due May 2020)

HK Yodoyabashi Garden Avenue

Pass-through type ML agreement

Pass-through type ML agreement−

16,164100.0%

Hirokoji Garden Avenue

Pass-through type ML agreement

Pass-through type ML agreement−

23,532100.0%

Gotenyama SH Building

Direct lease agreement

Direct lease agreement−

30,000100.0%■ Trends in Ratio of Type of Lease Agreement for Office Buildings (Leased Floor Area Base)3
Direct Lease
Agreement

Pass-throughtype MLagreement

21.3%

Fixed-rent
type MLagreement

69.1%

As of the endof 9th FP

Direct Lease
Agreement

Pass-throughtype MLagreement

15.8%

9.6%
Fixed-rent
type MLagreement

51.3%

As of the dateof this material

33.0%
Hommachi Minami Garden City
(Existing Portion) 13.2%* Scheduled to change to passthrough type ML agreement
In Dec. 2019.

Assumption of operating results of Hommachi Minami Garden City (existing portion)scheduled to change to pass-through type ML agreement
10th FP
Type of leaseagreement
NOI after
depreciation(Forecast)

Fixed-rent type ML

11th FP

12th FP

Pass-through type ML
Pass-through type ML(since Dec. 3, 2019)¥394 million4¥425 million4

435 million yen4(¥92 per unit)(¥99 per unit)(¥101 per unit)

Incorporated into the forecasted distribution announced on June 18, 2019

Note 1: “Rent of fixed-rent type ML agreement” is calculated based on the fixed-rent type master lease agreement with the master lessee in effect as of the end of 9th FP, by dividing the monthly rent for each property by the number of tsubo of theleased floor area of the building indicated in the fixed-rent type master lease agreement for each property. The master lease may be abbreviated as "ML". The same applies hereinafter.
Note 2: “Rent of end tenant” is calculated based on the respective lease agreements with each end tenant that were in effect as of the end of 9th FP, by dividing the monthly rent for each property (including common area charges but not including
costs relating to use of parking lots, warehouses, signs, etc.) by the number of tsubo of the leased floor area indicated in the respective lease agreements with each end tenant for each property. However, free rent as of the same date is notapplied, and the average rent for the past year is used for the sales-linked rent.
Note 3: Figures represent the ratio of the leased floor area of each type of lease agreement to the total leased floor area indicated in each lease agreement (provided, however, that in cases where a master lease agreement has been concluded forthe property, such master lease agreement) for each property in effect at each time point.
Note 4: Calculations are based on the assumption that there are no transfers of end-tenants as of the end of the 9th FP through the end of 12th FP. These assumptions are not guarantees of actual results.

23

2. Internal Growth

Selection of a Hotel Lease Scheme
Securing growth and stable cash flow by adopting a leasing scheme based on the characteristics
of each hotel in a good hotel market■ The Ritz-Carlton, Kyoto
Variable rent•

Enjoying earning upside potentials
by adopting variable rent•

Designed to eliminate seasonality by
calculating variable rent based on theprevious year’s annual revenue

Fixed rent
¥29,352 thousand
per month

Variable rent
Calculation of monthly rent for one year from May of thefollowing year based on a one-year hotel revenue record
from January 1 of each year
(10th FP forecast)¥29,352 thousand / month(11th FP forecast)¥29,352 thousand / month■ Hommachi Garden City (hotel portion)
Income-linked rent••

Securing stable earnings by adopting
master leases with higher fixed rent
ratio

Income-linked rent

Fixed rent
¥67,083 thousand
per monthCreating internal growth opportunities
by combining income-linked rent

When the amount of revenue earned by Sekisui House, which
is a master lessee, exceeds a certain amount, the amount iscalculated in conjunction with such revenue .
(10th FP forecast)¥395 thousand / month(11th FP forecast)1¥395 thousand / month

Note 1: As the income-linked rent factored in the 11th FP forecast has not yet been determined, it may differ from theactual figures.

<Total number and percentage increase of foreign guests in Osaka and Kyoto>
Kyoto (left)

Osaka (left)

Kyoto (right)

Nationwide

Osaka (right)(Thousand nights)
224.0

25,000

144.6
100.0

139.9

139.1

10,000
5,000

6,200
3,291

8,965
4,578

10,0084,602

150

13,89011,672

2015

2016

2017

100%

100

70%
60%

50

50%

0

40%

5,708

0
2014

Osaka

80%

173.5
168.8

5,556

Kyoto

200

161.4

15,000

250

Tokyo

90%

188.3

20,000<Changes in occupancy rates by area in Japan>

2018

Source: “Annual Travel and Lodging Statistics” by Japan Tourism Agency
Note 1: The total number of foreign guests is rounded down to the nearest unit, and the percentage increase is calculated
by setting the total number of foreign guests as of 2014 as 100 and rounded to the nearest first decimal place.

Jan. '17

Apr. '17

Jul. '17

Oct. '17

Jan. '18

Apr. '18

Jul. '18

Oct. '18

Source: “Annual Travel and Lodging Statistics” by Japan Tourism Agency

24

2. Internal Growth

Results and Forecast of NOI and NOI Yield by Use
Residence

FP ended April 2019
(9th FP)
Forecast announcedon December 14 2018 (A)FP ended April 2019
(9th FP)

ChangeFP ending October 2019
(10th FP)FP ending April 2020
(11th FP)

Results (B)(B) - (A)Forecast

Forecast

7,458 million yen

7,525 million yen+66 million yen

7,600 million yen

7,718 million yen

NOI / NOI Yield

5,490 million yen / 4.6%

5,613 million yen / 4.7%

+123 million yen

5,578 million yen / 4.5%

5,652 million yen / 4.6%

NOI after depreciation /NOI yield after depreciation

4,065 million yen / 3.4%

4,186 million yen / 3.5%

+121 million yen

4,106 million yen / 3.4%

4,154 million yen / 3.4%

97.2%

97.5%

+0.3pt

96.7%

97.2%

Operating revenue

Period-average occupancy rate

Office building

FP ended April 2019
(9th FP)
Forecast announcedon December 14 2018 (A)FP ended April 2019
(9th FP)

ChangeFP ending October 2019
(10th FP)FP ending April 2020
(11th FP)

Results (B)(B) - (A)Forecast

Forecast

4,257 million yen

4,260 million yen+3 million yen

5,491 million yen

5,920 million yen

NOI / NOI Yield

3,779 million yen / 4.1%

3,792 million yen / 4.1%

+12 million yen

4,818 million yen / 4.2%

5,109 million yen / 4.2%

NOI after depreciation /NOI yield after depreciation

3,114 million yen / 3.4%

3,127 million yen / 3.4%

+12 million yen

4,025 million yen / 3.5%

4,292 million yen / 3.5%

100.0%

100.0%

- pt

99.9%

99.9%

Operating revenue

Period-average occupancy rate

Hotel

FP ended April 2019
(9th FP)
Forecast announcedon December 14 2018 (A)FP ended April 2019
(9th FP)

ChangeFP ending October 2019
(10th FP)FP ending April 2020
(11th FP)

Results (B)(B) - (A)Forecast

Forecast

404 million yen

584 million yen+179 million yen

757 million yen

757 million yen

NOI / NOI Yield

326 million yen / 3.8%509 million yen / 3.9%+183 million yen

664 million yen / 3.8%

669 million yen / 3.8%

NOI after depreciation /NOI yield after depreciation

256 million yen / 3.0%

412 million yen / 3.3%

+156 million yen

552 million yen / 3.2%

556 million yen / 3.2%

100.0%

100.0%- pt

100.0%

100.0%

Operating revenue

Period-average occupancy rate

Total

FP ended April 2019
(9th FP)
Forecast announcedon December 14 2018 (A)FP ended April 2019
(9th FP)

ChangeFP ending October 2019
(10th FP)FP ending April 2020
(11th FP)

Results (B)(B) - (A)Forecast

Forecast

12,120 million yen

12,369 million yen+249 million yen

13,849 million yen

14,395 million yen

NOI / NOI Yield

9,596 million yen / 4.4%

9,915 million yen / 4.4%+319 million yen

11,060 million yen / 4.3%

11,432 million yen / 4.3%

NOI after depreciation /NOI yield after depreciation

7,436 million yen / 3.4%

7,726 million yen / 3.5%+289 million yen

8,685 million yen / 3.4%

9,002 million yen / 3.4%

97.8%

98.1%

+0.3pt

97.6%

98.0%

Operating revenue

Period-average occupancy rate

Note : The above forecast is calculated based on certain presumptions as of the date of this document, and actual amount may change based on future additional acquisitions or disposition of real estate, changes in real estate market, etc., andchanges in the operating environment and other situations that surround SHR, etc. Moreover, the forecasts are not guarantees of actual results.

25

3. Financial Base26

3. Financial BaseFinancial Results■ Financial Indicators (as of the date of this document)■ Overview of the 4th PO
Form

Global offering (Reg.S+144A)

Total number:
Domestic offering:International offering:
Third-party allotment:

Number ofinvestment units
issued526,575
371,356
130,144
25,075units1units
units
units1(upper limit)

Issue price¥76,537

Issue price¥74,103

Amount procured

Long-term
debt ratio

Fixed interest rate
debt ratio

Averagematurity

Average period
remaining tomaturity

Average interest
rate¥246.0 billion

84.7%

81.3%

6.1 years

3.3 years

0.73%

Date of resolution ofissuance

May 23, 2019

Pricing dateJune 3, 2019
Public Offerings :Third-party allotment:(As of end of 9th FP)■ Credit Ratings
Upgraded one notch from AA- to AA on February 15, 2019¥39.0 billion1(Proceeds including
third-party allotment)

Payment date

Total interestbearing liabilities

Rating agencies

Long-term issuer ratings

Japan Credit Rating Agency, Ltd.

AA (Stable)■ Commitment Line Contracts
Lender
MUFG Bank, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking Corporation

June 10, 2019
July 9, 2019

Contract period

Maximum amountFrom November 1, 2018
to October 31, 2019¥15.0 billion■ Diversification of Repayment Dates (as of the date of this document)(billions of yen)Fixed-rate

Floating-rate

Investment Corporation Bond

40
1.8
35
30

6.5

20

Amount of borrowing

Drawdown date

Repayment date

¥31.1 billion

June 10, 2019

May 29, 2020

※ Of the ¥31.1 billion in new borrowing, ¥1.8 billion will be prepaid by way of third-party allotment.
Consider lengthening borrowing period and fixing rate of the remaining amount of ¥29.3 billion
with the aim of diversifying repayment dates.

2.0

25

<Overview of new borrowing for the 10th FP>

29.3
4.0

15

26.8
20.7

10
5

16.9

7.1
Apr. 2020

Oct. 2020

12.4

3.0
11.1

13.8

11.8

3.0
9.8

Apr. 2021

Oct. 2021

Apr. 2022

Oct. 2022

Apr. 2023

Oct. 2023

Apr. 2024

Oct. 2024

2.0

12.4

4.4

0
Oct. 2019

4.3

3.0

Apr. 2025

6.1

7.6

7.1

Oct. 2025

Apr. 2026

Oct. 2026

4.0
Apr. 2027

8.0

6.6

Oct. 2027

Apr. 2028

Note 1: With regard to the number of investment units for subscription by way of third-party allotment in connection with the secondary offering by over-allotment pertaining to the 4th PO, it is assumed that all of the 25,075 units will beoffered and issued.

27

4. Growth Strategy

28

4. Growth Strategy

Future Growth Strategy
Aim to maximize unitholder value by promoting both internal and external growth by fully utilizing strong sponsor support
Immediate
distribution target

Aiming to secure stable distribution at ¥1,600 level per unit and to further accumulate upside factors

Attitude toward
external growth

Taking into account of real estate and financial markets, aim to expand asset size to ¥600 billion while
maintaining a carefully selected investment stance

Investment
strategy

Continuing focused on investment in prime properties centered on "strategic location" and "high quality"■ Key Points for Securing Stable Distributions and Accumulating Upside Factors◼

Acquisition of properties utilizing borrowing capacity
External growth◼ Maintaining an appropriate yield perspective◼

Aggressive rent increases for residences
Internal growth◼ Increase in rent for office buildings adopting pass-through type ML

Financialstrategy◼
◼

To reduce interest costs through refinancing
Diversification of financing methods (issue of green bonds, etc.)(Reference) When lease scheme of Garden City Shinagawa Goteyama (owned portion)is changed to pass-through type ML (under consideration)

NOI after
depreciation(forecast)Target of investment ratio by use at the time ofachieving asset size of ¥600 billion

Investment ratio asof the date of thisdocument

Residence

Around 45%

46.8%

Office building

Around 45%

46.5%

Hotel

Around 10%

6.6%

Retail and other properties

Around 0% to 10%-

Note 1: Please refer to page 45 for details on our portfolio development policy.

(Reference) Impact of property taxes, etc. to results of the 12th FP
ending Oct. 2020
Property taxes, etc. related to acquired assets since Jan. 2019 (9 properties)

In case of fixed-rent
type ML(current)

In case of changing topass-through type ML

Balance¥1,004 mil / year2(¥234 per unit)¥1,051 mil / year3(¥245 per unit)+¥46 mil(+¥10 per unit)

Increase total of ¥112 million(compared with the 11th FP)
Approx. ¥26 per unit in the 12th FP

Note 2: Average NOI after depreciation based on forecasts of operating results for the 10th FP and the 11th FP.
Note 3: Estimated NOI after depreciation per fiscal period calculated based on the end tenant occupancy rate assumption of 97.4%.

29

4. Growth Strategy

Increase of Varied Enhancement Opportunities by Utilizing the Integrated Corporate Strength of the
Sekisui House Group■ Prime Maison Planned and Developed by Sekisui House1■ Sekisui House Group Business Strategies
Our development business invests in the future growth ofenvironmental creation development, aiming for stable growththrough sustainable community development and an improved
asset turnover rate.

• Custom detached houses• Rental housing• Remodeling• Real estate
management fees
• Australia market• China market• U.S. market• Singapore market

Completed properties

Properties under construction2

4 properties 747 units

4 properties 422 units

Properties underplanning3

3 properties
All 23 wardsof Tokyo

Built-to-OrderBusiness

Trip Base business

Development
Business

Overseas
Business

Prime Maison
Egotanomori
Nakano-ku,
Tokyo

Prime Maison Prime Maison
MeguroItabashi
Meguro-ku,
Itabashi-ku,
Tokyo
Tokyo

Prime Maison
Daizawa
Setagaya-ku,
Tokyo

Prime Maison Prime Maison Prime Maison
Waseda2 Nakameguro
Yushima
Shinjuku-ku, Meguro-ku, Bunkyo-ku,
Tokyo
Tokyo
Tokyo

■ Office Building and Hotel Developed by Sekisui House for which SHR
has Preferential Negotiation Rights1

Residential
Supplied
Housing
Business

Prime Maison
Ryogoku
Sumida-ku,
Tokyo

Location

Unacquired quasi-coownership interests4

Akasaka Garden City

Minato-ku, Tokyo

34.55%The Ritz-Carlton, Kyoto

Kyoto-shi, Kyoto

60.00%• Houses for sale
• Condominiums• Urban redevelopment

Property nameSource: Sekisui House■ Main Projects in Sekisui House’s Urban Redevelopment Business1, 5
1993

2006

2010

2011

Umeda Sky
Garden City
Akasaka
Gotenyama SH Hommachi Minami
Hirokoji
Hommachi
Building
Garden City
Shinagawa Gotenyama
Building
Garden City
Garden Avenue
Garden city
6
(Shin Umeda City) (Acquired asset ) (Acquired asset)(Acquired asset)(Acquired asset) (Acquired asset) (Acquired asset)

2013

Grand Front Osaka

2015

The Ritz-Carlton, Kyoto HK Yodoyabashi Otemon Towor(Acquired asset6)
Garden Avenue
JX Building(Acquired asset)

Main future projects2, 3

Akasaka 5-chome
Project

Minato Mirai
Block 44 Project

Shinsaibashi
Hotel Project

Note 1: As of the date of this document, there are no specific acquisition plans for unacquired portions of the properties indicated as “Prime Maison Planned and Developed by Sekisui House”,”Office Building and Hotel Developed by Sekisui
House for which SHR has Preferential Negotiation Rights” or “Main Projects in Sekisui House’s Urban Redevelopment Business”.
Note 2: The figures labeled “Properties under construction” and “Main future projects” are conceptual drawings created based on the drawing and specifications, and may differ from actual ones. In addition, the name of each property is aprovisional name.
Note 3: Projects currently under consideration by Sekisui House; subject to change or cancellation without notice.
Note 4: "Unacquired quasi-co-ownership interests" refers to the percentage of unacquired quasi-co-ownership interests for which SHR has a preferential negotiating right for the acquisition of trust beneficiary interests.
Note 5: The indicated properties include joint ventures with other companies and properties that have been sold.
Note 6: SHR has acquired a portion of the quasi-co-ownership interests, but has a preferential negotiating right covering the quasi-co-ownership interests that have not yet been acquired.

30

5. ESG Initiatives

31

5. ESG Initiatives

ESG Initiatives (Participation in International Initiatives and Obtaining External Certification)■ Participation in International Initiatives➢ Signing of the Principles for Responsible Investment (PRI)The Asset Management Company (“SHAM”) signed this agreement in Mar. 2019 in support of the fundamental concept of the Principles for Responsible Investment (PRI), which advocates
incorporating ESG issues into the investment analysis and decision-making processes.
<The Six Principles for Responsible Investment (PRI)>(1) We will incorporate ESG issues into investment analysis and decision-making processes.
(2) We will be active owners and incorporate ESG issues into our ownership policies and practices.

(3) We will seek appropriate disclosure on ESG issues by the entities in which we invest.
(4) We will promote acceptance and implementation of the Principles within the investment industry.
(5) We will work together to enhance our effectiveness in implementing the Principles.
(6) We will each report on our activities and progress towards implementing the Principles.

■ Acquisition of external certification➢ Acquired “Green Star”, the highest ranking in “GRESB Real Estate Assessment” conducted in 2018 in two consecutive years .
➢ Acquired “S-Rank”, the highest rating in “MUFG ESG Rating Certificate for J-REIT supported by JCR”.

In Apr. 2019, SHR and SHAM were collectively granted the highest rank of “S” for its assessment and scoring of corporate ESG initiatives.
This rating is a service provided by Mitsubishi UFJ Research and Consulting Co., Ltd. and supported by Japan Credit Rating Agency, Ltd. (“JCR”).

Key Evaluation Points:
1) establishing ESG improvement systems, 2) promoting greenhouse gas (CO2) emission reduction activities proactively to its own assets, 3) striving tocooperate with residents, tenant companies and local communities, and 4) ensuring sense of compliance as a company.
➢ Aggressive acquisition of environmental certification (total of 48 properties, 52.5% of portfolio (total floor area basis)) (as of the date of this document)

・ Acquired DBJ Green Building certification for 48 properties, all 3 Stars or above<MUFG ESG Rating Certificate for J-REIT>

・ Certification for CASBEE for Real Estate for 4 office buildings, all with the highest appraisal "S (Superior)"
Environmental
certification

Number of properties
Evaluation rank

DBJ Green Building
Certification

Certification for
CASBEE for Real Estate

S (Superior)

Total
Residence

Office Buildings

2

1

3

2

4

6

7

-

7

12

-

12

20

-

20

-

4

4

<Garden City Shinagawa Gotenyama>

SHR acquired the highest valuation in DBJ Green Building Certification
and Certification for CASBEE for Real Estate32

5. ESG Initiatives

ESG Initiatives (Environment and Social)
Initiatives for a Low-Carbon Society and the Efficient Use of Energy
Efficient use of energy through environmentally conscious
facilities

Effects of the introduction of environmentally conscious
equipment in residential properties

Solar panels

Garden City Shinagawa Gotenyama

Prime Maison Gotenyama West

Low-e double-glazed glass

LED lighting

Installationequipment

Replacement of lights
for common areas
with LED

Promotion of energysaving of air
conditioners for
exclusive areas

Implemented in the
9th FP

6 properties

162 units

49 properties

1,094 units

already
implemented

already
implemented

Cumulative total
Expected annual
reduction for electricity
consumption1
Expected annual
reduction inGreenhouse gas
emissions1

Hommachi Minami Garden City

Biodiversity Activities

Approx.

Approx.

1,279,616 kWh

243,962 kWhApprox. 636t-CO2

Approx. 112t-CO2

In 2006, Sekisui House Group, to which SHAM belongs, declared as its
basic human resource policy “Human Resources Sustainability,”
supported by the three main pillars of“Encouraging female employees to pursue career development,”“Promoting a variety of work styles and work-life balance” and“Effective utilization of human resources.”
Under this policy, efforts have been made to create an environment andmechanisms where employees can achieve sustainable growthalongside companies.

Encouraging male employees to take parental leave formore than one month

Comfort and Safety Measures
Installation of emergency
electric supply unit

24-hour disaster prevention
center

Garden City Shinagawa Gotenyama

Garden City Shinagawa Gotenyama

Installation of disaster prevention
cabinets for elevators“Gotenyama Project” was highly evaluated because it creates large scale
green land that contributes to nature regeneration in the area, receiving “TheMinister of Land, Infrastructure and Transport Prize” the highest-ranked
award at the 11th “Competition for Rooftops, Wall Facings and New GreenSpaces.”“Gotenyama Project” is comprised of Garden City Shinagawa Gotenyama, Gotenyama
SH Building, Prime Maison Gotenyama East, and Prime Maison Gotenyama West.

HK Yodoyabashi Garden Avenue

Promoting Diversity and Working Style Reforms“Gotenyama Project”, large-scale complex developments
by Sekisui House

Distribution of disaster prevention
stockpiles to tenantsContributing to Regions and Communities
Disaster-relief Vending Machines

Prime Maison Ginza Eastand other 9 properties

Installment of AED(Automatic Exterior Defibrillator)

Prime Maison Yokohama Nihon-odori
and other 4 properties

Concert held at an entrance hallIntroduction of the share cycle

Honmachi Garden City

Garden City Shinagawa Gotenyama

In Sep. 2018, Sekisui House announced that it would fully take parental
leave for at least one month for male employees. As a "Kids' First
Company," Sekisui House is implementing initiatives to promote diversity
as a leader in a society that supports child-rearing.
As a member of the Sekisui House Group, SHAM is encouraging male
employees to take parental leave for at least one month.
(Acquisition results: 100% for applicable employees)

Prime Maison Gotenyama Eastand other 4 properties

Esty maison Ojima
and 5 other properties

Note 1: The figures for each expected reduction above are estimated by the asset management company based on materials provided by the replacement work operator or materials published by the Agency for Natural Resources and Energyof the Ministry of Economy, Trade and Industry; there is no guarantee that the expected reductions will be realized.

33

5. ESG Initiatives

ESG Initiatives (Governance Structure)
Decision-making Process
Ideas created ateach departments

Compliance Officer/
Internal Control
Promotion Department

Investment Committee

Compliance Committee

ReturnRejection

Rejection

When transactingwith related parties,
etc.

Rejection

Approval at board of
directors’ meeting of theinvestment corporation

Rejection

Checked by external expert

Checked by the Investment Corporation’s Supervisory Officers• As an external member, external experts are selected to thecommittee on investment decisions or compliance, and checks
are placed on decision-making etc., for transactions from theexperts’ perspective• Transactions with related parties require approval from the boardof directors’ meeting which is comprised of the Investment
Corporation’s Executive Director and Supervisory Officers

Checked by organization responsible for compliance• The Internal Control Promotion Department conducts
preliminary reviews on items to be discussed prior to all
meetings, under the command of the Compliance Officer

Board of Directors

Types and standards of transaction for Transacting with Related parties
Acquiring specified assets from related parties

Acquisition price (excluding tax, acquisition costs, etc.) is not more than the amount of appraisal value, etc.

Selling specified assets to related parties

Sales price (excluding tax, sales costs, etc.) is not less than the amount of appraisal value, etc.

Paying agency fee to related parties

Decided upon considering contract condition levels within the remuneration parameter set by the Building Lots and Buildings Transaction Business Law
and the difficulty of mediation.

Entrusting management, etc., of assets such as real estate to related parties

Subcontractor is selected upon evaluating results, financial structure, performance, etc., and payment is decided upon comprehensively considering
market standard on commission, the contents of labor provided, and the total quantity of work, etc. (once annually in principle, the appropriateness of thesubcontracted work is verified by an independent external evaluation organization).

Concluding leasing contracts of assets such as real estate to related parties

Consider the state of the market, and standard lease conditions for assets such as real estate. Acquire third party opinions on whether conditions are fairwhen needed.

Placing an order to related parties for construction, etc., which exceeds the amount below
Residential properties: 5 million yen
Commercial properties, etc.: 30 million yen

Compare and consider the estimated value and the contents of labor provided by the third party, and approve when not costly to the investment
corporation.

Risk Management Structure
Every fiscal year, initiatives to respond to discrete risks are conducted based on the below cycle at the asset management company. It works to clear “weaknesses” and “oversights” in operations.
1. After searching discrete risks and evaluating numerical value of risks, discuss
methods to control such risks and develop risk management plan.

2. Conduct initiatives for risk control at each department based on the risk management
plans.

4. Consider improvements to methods of risk control if needed, and continue②
initiatives to decrease risks.

3. Each department’s status of initiatives is examined by the Internal Control
Promotion Department and reported at meetings.

34

5. ESG Initiatives

ESG initiatives of Sekisui House
Corporate Philosophy<Development of Philosophy and Value Creation>
Sekisui House made a “Declaration of Sustainability” in 2005 as thevision to aspire under the corporate philosophy of “a love of humanity,”
announcing its vision to achieve balanced management based on four
key values – environmental, economic, social and homeowner.
Moreover, 13 guidelines were established based on the four key values.

<CSR management based on the Four key values and 13 Guidelines>
The Four key values and 13 Guidelines set forth in the Sustainable Vision in 2005
share the same direction with "SDGs (Sustainable Development Goals," which is acommon goal of the international community. Through the business to create
residential environments, Sekisui House face the challenge of "sustainability" andare continually promoting the achievement of the "SDGs" goals.

<A leading company of ESG management>
Sekisui House has, in 2008, announced its “2050 Vision”, which targets zero CO2 emissions fromresidences and having established a long-term vision for 2050, “Sustainability Vision 2050,” in 2016.
It has also displayed its medium-term initiatives with an outlook for 2030 to share status of progresswith stakeholders in 2017.
With the realization of "Sustainability Vision 2050" as the long-term goal of ESG management,
Sekisui House is making steady progress toward the realization of a sustainable society with the aimof becoming the leader in ESG management.

2050 challenges
Zero CO2 Emissions

Maximize Ecosystem Networks

within the Housing Lifecycle

through Business

Expanding Zero Emissions Initiatives

Maximizing AbundanceWithin the Housing Lifecyclein Housing and Communities

Ｅ

Environmental management

Social improvement

Promotion of net-zero-energy housing “Green First Zero”

Make diversity a driver of growth

Ｓ
Ｇ

Ｅ

Ｓ
Ｇ

Simultaneously selected by Switzerland’s RebecoSAM as“Silver Class” in the housing construction category of
RobecoSAM Sustainability Award 2019.

Selected by U.S. S&P Dow Jones Indices and Swiss
RobecoSAM for inclusion in the “Dow Jones Sustainability
World Index (DJSI World)”, and the “Dow Jones
Sustainability Asia Pacific Index”.

Ｓ

Ｓ

Ｅ

Obtained the first certification of “SBT（Science Based
Targets） Initiative” in Japan in the residential industry
concerning CO2 reduction.
Recognized as CDP "Climate Change A List" for its
climate change activities

Ｅ

Ｓ
Ｇ

Strengthen

Governance

Innovation and communication

Selected by the Ministry of Economy, Trade and Industry
and the Tokyo Stock Exchange for the “Nadeshiko brand2018” as a company that promotes the active participationof women. (five times in total).

Ｇ

Establishment of management meeting.

Ｇ

Clarification of the divisions of directors and the Head Office
restructuring.

Declared “Complete paid parental leave for one month ormore with full pay for male employees”, encouraging
complete paid parental leave for one month with full pay.

Ｇ

Reform the proposal system.

Ｇ

Transparency and revitalization of operation of the Board of
Directors.

Ｇ

Management succession planＧ

Revision of the Executive Compensation System

Ｇ

Ensuring the Independence of General Affairs Managers andStrengthening the Check-and-Check Function

Received the Gold Prize in the “PRIDE Index 2018”, anindicator for evaluating LGBT initiatives.

Ｓ

Ｅ

Source: Sekisui House “Sustainability Report 2019” (Japanese version)

Selected as brand of “MSCI Japan ESG Select Leaders
Index” and “MSCI Japan Empowering Women Index”
provided by MSCI.

35

Appendix

36

Appendix

Balance Sheet(unit: thousand yen)

8th Fiscal Period
October 31, 2018

9th Fiscal Period
April 30, 2019

8th Fiscal Period
October 31, 2018

Assets

9th Fiscal Period
April 30, 2019

Liabilities

Current assets

Current liabilities

Cash and deposits

9,230,651

7,657,644

Operating accounts payable

Cash and deposits in trust

12,859,502

13,301,529

Operating accounts receivable

145,522

157,133

Short-term loans payable
Current portion of investment corporation bonds

2,500,000

2,000,000

Prepaid expenses

154,213168,285

Current portion of long-term loans payable

12,382,000

20,792,500

Other

5,114

212,703

Accounts payable – other623,167

986,348

Allowance for doubtful accounts

(499)

(973)

Accrued expenses

195,311

189,758

22,394,506

21,496,324

590

590

Total current assets

Income taxes payable

640,450

751,690-

6,500,000

Non-current assets

Accrued consumption taxes

200,653-

Property, plant and equipment

Advances received

311,576

309,077

Buildings in trust

154,045,698

158,892,235

Derivative debt

15,00927,894

Accumulated depreciation(6,157,456)(8,236,920)

Other

201,664

189,700

Buildings in trust, net

147,888,242

150,655,315

17,070,424

31,747,560

1,483,975

1,500,004

Non-current liabilities

Structures in trust

Total current liabilities(91,713)(121,928)

Investment corporation bonds

13,000,000

11,000,000

Structures in trust, net

1,392,261

1,378,076

Long-term loans payable

170,050,500

174,640,000

Machinery and equipment in trust

2,093,637

2,153,877

Tenant leasehold and security deposits in trust(45,276)(91,694)

2,048,361

2,062,182

Tools, furniture and fixtures in trust

59,994

117,224

Accumulated depreciation(3,391)(10,983)

Tools, furniture and fixtures in trust, net

56,602

106,240

279,918,555

295,079,081

Accumulated depreciation

Accumulated depreciation
Machinery and equipment in trust, net

Land in trust
Construction in progress in trust
Total property, plant and equipment

43,344

98,534431,347,368

449,379,431

Other

11,148,044

511,956

515,034Other

327,370

239,015

Total non-current liabilities

194,854,211

197,542,094

Total liabilities

211,924,636

229,289,654

110,189,294

110,189,294

128,598,415

128,598,415-

1,556,827-

1,556,827

Net assets
Unitholders’ equity
Unitholders’ capital

Intangible assets

Leasehold rights in trust

10,964,384

Derivative debt

2,526,599

2,501,173

SurplusCapital surplus

8,346

6,894

2,534,946

2,508,068

Lease and guarantee deposits

800,700

790,700

Long-term prepaid expenses

279,284

396,558

Total voluntary retained earnings
Unappropriated retained earnings

Other

173,347

373,282

Total intangible assets
Investments and other assets

Total investments and other assets

Voluntary retained earnings
Reserve for temporary difference adjustments

7,403,117

5,894,142

Total surplus

136,001,532

136,049,385

Total unitholders’ equity

246,190,826

246,238,679(542,929)

1,253,331

1,560,540

435,135,646

453,448,040

Deferred hedging gain/loss(526,965)

Investment corporation bond issuance costs

29,20526,285

Total of valuation and translation adjustments(526,965)(542,929)

Investment unit issuance costs

29,13914,755

Total net assets

245,663,860

245,695,750

Total liabilities and net assets

457,588,497

474,985,405

Total non-current assets

Deferred assets

Total deferred assets
Total assets

58,34441,040457,588,497

474,985,405

Valuation and translation adjustments

Note 1: As of the date of this document, audit procedures for the financial documents based on the Act on Investment Trusts and Investment Corporations have been completed but audit procedures for the financial statements based on the Financial
Instruments and Exchange Act have yet to be completed. The same applies hereinafter.

37

Appendix

Statement of Income and Retained Earnings(unit: thousand yen)
8th Fiscal Period
From May 1, 2018 to October 31, 2018

9th Fiscal Period
From November 1, 2018 to April 30, 2019

Operating revenue
Rent revenue - real estate
Other lease business revenue

11,913,550
252,879

12,085,814
284,165

Gain on sales of real estate properties

Total operating revenue

8,114
12,174,544

12,369,980

Operating expenses
Expenses related to rent business

4,579,453

4,643,232

Asset management fee

517,151

826,100

Asset custody fee
Administrative service fees

8,486
49,9599,083
42,953

Directors’ compensations

3,600
941,174

3,600-

Other operating expenses

324
280,439483
216,612

Total operating expenses
Operating income

6,380,588
5,793,955

5,742,066
6,627,913

Merger-related expenses
Provision of allowance for doubtful accounts

Non-operating income
Interest income

98

111

Reversal of distributions payable

1,716

1,135

Consumption tax refund

49,862
143

30,680-Total non-operating income
Non-operating expenses

51,82031,927

Interest expenses
Interest expenses on investment corporation bond599,481
51,218607,995
48,755

Borrowing related expenses
Amortization of investment unit issuance costs

67,576
14,38489,904
14,384

Amortization of investment corporation bond issuance costs
Other
Total non-operating expenses
Ordinary Income

2,919
734

2,919
1,135

Other

736,314765,094

5,109,461

5,894,747

Extraordinary income total

2,293,923
2,293,923-

Income before income taxes
Income taxes – current

7,403,385
605

5,894,747
605

21
626

605

Net income
Retained earnings brought forward

7,402,759
357

5,894,142-

Unappropriated retained earnings

7,403,117

5,894,142

Extraordinary income
Gain on negative goodwill

Income taxes – deferred
Total income taxes

38Appendix

Overview of Financial Results for Fiscal Period Ended April 2019 (9th FP) (1)■ Comparison Between Actual Results for 8th Fiscal Period and 9th Fiscal Period(million yen)
Result of FP ended
October 2018 (8th FP)(A)
Operating revenue

12,174

Result of FP endedApril 2019 (9th FP)(B)

Main factors of differences between
actual result for the 8th FP and the 9th FP

Comparison(B) – (A)12,369(million yen)Amount affecting income and total distribution+195

Operating income and expenses
Operating income

5,793

6,627

+833

・Absence of gain on sale of real estate(8)(Gain on sale of Hamamatsu Plaza disposed
during the 8th FP)

5,109

5,894

+785

Extraordinary income(Gain on negative goodwill)

2,293

－

(2,293)

Absence of property-related operating incomeof Hamamatsu Plaza(75)

Net income

7,402

5,894

(1,508)Contribution of assets acquired in 9th FP(The Ritz-Carlton, Kyoto and 2 other properties)+162

Reserve for temporary
difference adjustment(RTA)(1,556)102+1,659Properties owned at the end of the 8th FP+53

Ordinary income

Total distribution

5,846

5,996
¥1,594+150

Distribution per unit

¥1,554

+¥40

NOI

9,729

9,915

+186

NOI Yield

4.4％

4.4％

0pt

NOI after depreciation

7,586

7,726

+139

NOI yield after depreciation

3.4％

3.5％

+0.1ptPeriod-averageoccupancy rate

97.9％

98.1％

+0.2pt・Increase in property-related operating income+139

Residential properties+80

Commercial properties(27)

・Decrease in SG&A

(Selling, general and administrative expenses)+702

Non-operating income and expenses
・Decrease in non-operating income(19)

・Increase in non-operating expenses(28)

Extraordinary income
・Absence of gain on negative goodwill arising frommerger(2,293)

Reserve for temporary difference adjustment (RTA)・Difference between a portion of gain on negative
goodwill reserved as RTA in the 8th FP and thereversal of the RTA in the 9th FP+1,65939

Appendix

Overview of Financial Results for Fiscal Period Ended April 2019 (9th FP) (2)■ Comparison of Results for the 9th Fiscal Period and Forecast for the 9th Fiscal Period (Announced on December 14, 2018)(million yen)(million yen)
Fiscal period ended Apr. 2019 (9th FP)
Forecast announcedon Dec. 14, 2018
(A)
Operating revenue

12,120Result(B)

12,369Comparison with
forecast for 9th FP(B) – (A)

(Reference)
Revised forecast
announced
on Jan. 29, 2019+249

12,311Main factors of differences between
forecast and actual result for the 9th FP
Amount affecting income and total distribution

Operating income and expenses
Operating income

6,353

6,627

+274

6,485

Ordinary income

5,624

5,894

+270

5,719

・Increase in property-related operating income
Contribution of assets acquired in 9th FP(The Ritz-Carlton, Kyoto and another property)

5,624

5,894

+270

5,719

Reserve for temporary
difference adjustment
(RTA)

158

102

(55)

100

Total distribution

5,782

5,996

+214

5,819

Distribution per unit

¥1,537¥1,594+¥57¥1,547

NOI

9,596

9,915

+319

9,775

NOI Yield

4.4％

4.4％

0pt

4.4％

Net income

Properties premised for the 9th FP forecast
announced on Dec. 14, 2018

+289
+153
+136

Residential properties+117

Commercial properties+19

・Increase in SG&A

(15)

Non-operating income and expenses
・Increase in non-operating income+1・Increase in non-operating expenses(5)

Reversal of the RTA
NOI after depreciation

7,436

7,726

+289

7,586

NOI yield after depreciation

3.4％

3.5％

+0.1pt3.4％

Period-averageoccupancy rate

97.8％

98.1％

+0.3pt97.9％

・Cancellation of Compensation for a decline in profit
of Hamamatsu Plaza in the 8th FP(55)

As a result of the acquisitions of The Ritz-Carlton, Kyoto,etc., compensation for the decline in profit has been
completed40

Appendix

Forecast of Performance for Fiscal Period Ending October 2019 (10th FP) andFiscal Period Ending April 2020 (11th FP)■ Comparison of Results for the 9th FP and Forecast for the 10th FP, and Comparison of Forecast for 10th FP and 11th FP(million yen)
FP ending Oct. 2019 (10th FP)
FP ending Apr. 2020 (11th FP)
Result for FP
Comparison withended Apr. 2019
Comparison withCurrent forecast
Current forecast
forecast for(9th FP)
result for 9th FP(B)(C)
10th FP(A)(B) – (A)(C) – (B)Operating revenue

12,36913,849+1,47914,395+546

Operating income

6,627

7,475

+847

7,678

+202

Ordinary income

5,894

6,636

+741

6,759

+123

Net income

5,894

6,635

+741

6,758

+123

Reserve for temporary
difference adjustment
(RTA)

102

170

+67

171

+1

Total distribution

5,996

6,806

+809

6,930

+124

(million yen)
Main factors of differences between
result for the 9th FP and current forecast for 10th FP
Amount affecting income and total distribution

Operating income and expenses
・Increase in property-related operating income
Contribution of assets acquired in 10th FP
by the 4th PO
Properties owned at the end of the 9th FP
Residential properties
Commercial properties+958+1,027
(69)
(197)
+128

・Increase in SG&A

(110)

Non-operating income and expenses
・Increase in non-operating income

Distribution per unit

+16
(122)

・Increase in non-operating expenses

Reversal of the RTA¥1,594¥1,587(¥7)¥1,616+¥29

・Increase in tax accounting inconsistencies
・Decline due to withdrawal of large tenant inEsty Maison Yokohama1

+11
+56

Main factors of differences between
current forecast for 10th FP and 11th FP
Amount affecting income and total distribution

Operating income and expenses
NOI
NOI Yield
NOI after depreciation
NOI yield after depreciation
Period-averageoccupancy rate

9,915
4.4％
7,726

3.5％
98.1％

11,060
4.3％
8,685

3.4％
97.6％

+1,144(0.1pt)+958(0.1pt)(0.5pt)11,432
4.3％
9,002

3.4％
98.0％

+371
0pt
+317

0pt
+0.4ptNote 1: For “Esty Maison Yokohama”, the amount of profit equivalent that is expected to decrease due to the vacation will be reduced of a tenant from RTA and will
be distributed who leases all housing units in a lump sum as of the end of May 2019.

・Increase in property-related operating income
Contribution of assets acquired in 10th FP
by the 4th PO
Properties owned at the end of the 9th FP
Residential properties
Commercial properties

・Increase in SG&A

+317
+284
+33
(5)
+38

(114)

Non-operating income and expenses
・Decrease in non-operating income
・Increase in non-operating expenses

(43)
(36)

Reversal of the RTA・Increase in tax accounting inconsistencies
・Decline due to withdrawal of large tenant inEsty Maison Yokohama1

+7
(6)

41

Appendix

Portfolio Map
As of the date of this document
Osaka-shi 11 properties
Asahi-ku

Kita-ku

Miyakojimaku

55

13

Adachi-ku

23

Sapporo-shi,Hokkaido
3 properties 82 83 84

20
Nishiyodogawa-ku

67

Tokyo 23 wards 73 properties

Higashiyodogawa-ku
Yodogawa-ku

Kita-ku

37

Itabashi-ku
Nerima-ku

Tsurumi-ku

26

24

Joto-ku

68

Katsushika-ku

Fukushima-ku

Arakawa-ku

Chuo-ku
Konohana-ku

Nishi-ku 15

５
１４
96
３

Ikebukuro

Higashinari-ku

64

Abeno-ku

Nakano-ku

Kanazawa-shi,Ishikawa
1 property

Nishinari-ku
Taisho-ku

43

33

Koganei-shi,Tokyo 1 property
88

61
62

Suginami-ku

40

Hirano-ku

Sumiyoshi-ku

65

６63 Shinjuku

71

107

Kitakyushu-shi,
Fukuoka 1 property

７

９

53

14 90 92 112

Setagaya-ku

109
98

106

101 56105

59
Higashi-ku

Kita-kuMoriyama-ku

16
60
27

Shinagawa

72

２
１

81
25

54

18

Nishi-ku

44

Chuo-ku
38
75

Nishi-ku

Hakata-ku

49
51
Higashi-ku 35 78
Meito-ku
34
Nakamura- ６
48 ChikusaNaka-ku 74
ku
ku79
Showa-ku
41
Nakagawa-ku

108

Jonan-ku

Atsuta-ku

Shinagawa-ku

17

Ota-kuTokyo 23 wards ratio

61.0%

Residence 70 properties
Office Building 3 properties

Yamanote Line

Mizuho-ku
Tempaku-ku

Minami-ku
Minato-ku
Minami-ku

Midori-ku
Sawara-ku

Koto-ku

70
47

11
Meguro-ku

Nagoya-shi 10 properties

85
50

30

Chuo-ku

Edogawa-ku

80

19

87

32
36

31

77

1

22

Minato-ku

３

10

76

21

Yokkaichi-shi,Mie 1 property

Fukuoka-shi 8 properties

２

４

104

Kawasaki-shi,Kanagawa 2 properties
8

94

Shibuya

39
100

Tokyo

Shibuya-ku

58

Yokohama-shi,Kanagawa 5 properties

Kyoto-shi,
Kyoto 1 property

73

Chiyoda-ku

95
89

66

５

91

46

７
103

99

57

Sumida-ku

111

Shinjuku-ku

29

２

45

110

69

Hino-shi,Tokyo 1 property

Kobe-shi,Hyogo 2 properties
93 97

Taito-ku

Bunkyo-ku

Kodaira-shi,Tokyo 1 property

Higashisumiyoshiku

Suminoe-ku

86

28
52

Tennoji-ku
Naniwa-ku
Ikuno-ku
42

Minato-ku

12102

Toshima-ku

Residence
Office Building
Hotel

Portfolio Earthquake PML1

1.64%

（outline characters: property number）
Note 1: Portfolio Earthquake PML" is stated based on the Portfolio Earthquake PML Evaluation Report, which was acquired from the evaluation company as of April 2019.

42

Appendix

List of Portfolio (1)■ Properties Owned as of the Date of this Document
Property
PP
No.
Property

Property nameLocation

Acquisition Price(million yen)

Investment
Ratio
(%)

Leasable Area(m²)

Occupancy
Rate(%)

Completion Date

Property
PP
No.
Property

Property nameLocation

Acquisition Price(million yen)

Investment
Ratio
(%)

Leasable Area(m²)

Occupancy
Rate(%)

Completion Date

R-001

★

Esty Maison Ginza

Chuo-ku, Tokyo

6,540

1.2

5,515.43

99.1

Feb. 2005

R-043

★

Prime Maison Kitatanabe

Osaka-shi, Osaka

601

0.1

1,798.97

96.6

Jun. 2006

R-002

★

Esty Maison Azabunagasaka

Minato-ku, Tokyo

1,790

0.3

2,019.10

96.4

Jan. 2004

R-044

★

Prime Maison Momochihama

Fukuoka-shi, Fukuoka

1,940

0.4

7,514.76

100.0

Feb. 1996

R-003

★

Esty Maison Ebisu II

Shibuya-ku, Tokyo

2,040

0.4

2,062.10

89.2

Jun. 2003

R-045

★

Esty Maison Akihabara

Taito-ku, Tokyo

1,930

0.4

2,324.65

98.7

Feb. 2006

R-004

★

Esty Maison Ebisu

Shibuya-ku, Tokyo

873

0.2

781.02100.0

Oct. 2004

R-046

Esty Maison Sasazuka

Shibuya-ku, Tokyo

3,340

0.6

3,701.70

98.9

Sep. 2004

R-005

★

Esty Maison Kanda

Chiyoda-ku, Tokyo

1,610

0.3

1,706.54

95.6

Feb. 2004

R-047

★

Prime Maison Ginza East

Chuo-ku, Tokyo

6,250

1.2

6,177.20

98.7

Feb. 2006

R-006

★

Esty Maison Kitashinjuku

Shinjuku-ku, Tokyo

1,590

0.3

1,881.19

97.7

Aug. 2004

R-048

★

Prime Maison Takami

Nagoya-shi, Aichi

1,050

0.2

2,016.79

88.8

Aug. 2008

R-007

★

Esty Maison Asakusakomagata

Taito-ku, Tokyo

2,190

0.4

2,978.28

97.7

Jul. 2004

R-049

★

Prime Maison Yadaminami

Nagoya-shi, Aichi

812

0.2

2,168.59

100.0

Jul. 2007

Esty Maison Kawasaki

Kawasaki-shi, Kanagawa

2,400

0.5

3,741.01

97.5

Jul. 2004

R-050

★

Prime Maison Teriha

Fukuoka-shi, Fukuoka

1,260

0.2

6,728.20

100.0

Aug. 2005

R-008

Esty Maison Yokohama

Yokohama-shi, Kanagawa

2,110

0.4

2,823.73

100.0

Jan. 2007

R-051

★

Esty Maison Higashishirakabe

Nagoya-shi, Aichi

1,580

0.3

4,014.07

100.0

Feb. 2006

R-010

★

Esty Maison Kameido

Koto-ku, Tokyo

1,580

0.3

2,279.21

99.0

Nov. 2005

R-052

★

Esty Maison Sengoku

Bunkyo-ku, Tokyo

1,360

0.3

1,498.13

97.3

Aug. 2009

R-011

★

Esty Maison Meguro

Meguro-ku, Tokyo

1,060

0.2

1,070.13

100.0

Nov. 2005

R-053

★

Esty Maison Daizawa

Setagaya-ku, Tokyo

2,270

0.4

2,352.90

95.4

Feb. 2010

Esty Maison Sugamo

Toshima-ku, Tokyo

1,630

0.3

2,619.17

90.1

Feb. 2007

R-054

Esty Maison Togoshi

Shinagawa-ku, Tokyo

1,770

0.3

1,943.17

97.9

Jun. 2009

Esty Maison Kyobashi

Osaka-shi, Osaka

2,970

0.6

4,613.04

94.4

Mar. 2006

R-055

★

Esty Maison Nishitemma

Osaka-shi, Osaka

1,680

0.3

2,877.90

96.9

Nov. 2007
Sep. 2003

R-009

R-012
R-013

★

Esty Maison Hakuraku

Yokohama-shi, Kanagawa

931

0.2

1,285.83

93.0

Feb. 2006

R-056

★

Esty Maison Shirokanedai

Shinagawa-ku, Tokyo

2,400

0.5

2,675.11

98.8

R-015

★

Esty Maison Minamihorie

Osaka-shi, Osaka

1,060

0.2

1,804.48

100.0

Feb. 2007

R-057

★

Esty Maison Higashishinjuku

Shinjuku-ku, Tokyo

1,680

0.3

1,889.50

100.0

Apr. 2009

R-016

★

Esty Maison Gotanda

Shinagawa-ku, Tokyo

3,110

0.6

3,871.15

98.9

Mar. 2006

R-058

★

Esty Maison Motoazabu

Minato-ku, Tokyo

1,540

0.3

1,199.86

100.0

Nov. 2009

R-017

★

Esty Maison Oisendaizaka

Shinagawa-ku, Tokyo

2,720

0.5

2,979.85

97.2

Aug. 2006

R-059

Esty Maison Toritsudaigaku

Meguro-ku, Tokyo

861

0.2

1,035.78

100.0

Feb. 2009

Esty Maison Shinagawa Seaside

Shinagawa-ku, Tokyo

2,050

0.4

2,602.30

94.9

Jun. 2006

R-060

Esty Maison Musashikoyama II

Shinagawa-ku, Tokyo

1,030

0.2

1,073.59

97.4

May 2009
Jun. 2009

R-014

R-018

★

R-019

★

Esty Maison Minamiazabu

Minato-ku, Tokyo

1,250

0.2

1,082.12

92.3

Aug. 2006

R-061

Esty Maison Nakano

Nakano-ku, Tokyo

1,870

0.4

2,023.72

96.8

R-020

★

Esty Maison Tsukamoto

Osaka-shi, Osaka

1,080

0.2

2,321.04

99.0

Aug. 2006

R-062

Esty Maison Shinnakano

Nakano-ku, Tokyo

1,020

0.2

1,107.57

92.9

Oct. 2009

R-021

Esty Maison Kawasaki II

Kawasaki-shi, Kanagawa

1,910

0.4

2,824.86

93.0

Feb. 2007

R-063

Esty Maison Nakanofujimicho

Nakano-ku, Tokyo

984

0.2

1,299.60

92.1

Feb. 2009

R-022

Esty Maison Azabujuban

Minato-ku, Tokyo

2,690

0.5

1,755.31

97.4

Feb. 2007

R-064

Esty Maison Tetsugakudo

Nakano-ku, Tokyo

1,160

0.2

1,531.89

91.6

Oct. 2009

R-023

Esty Maison Itabashihoncho

Itabashi-ku, Tokyo

937

0.2

1,274.49

100.0

Feb. 2007

R-065

Esty Maison Koenji

Suginami-ku, Tokyo

1,160

0.2

1,527.52

96.4

Mar. 2009

Esty Maison Oizumigakuen

Nerima-ku, Tokyo

790

0.1

1,362.36

96.6

Feb. 2007

R-066

★

Esty Maison Oshiage

Sumida-ku, Tokyo

2,490

0.5

3,180.90

97.5

Apr. 2010

R-025

★

Esty Maison Higashishinagawa

Shinagawa-ku, Tokyo

2,390

0.5

2,936.72

93.8

May 2008

R-067★

Esty Maison Akabane

Kita-ku, Tokyo

3,290

0.6

4,302.84

94.6

Nov. 2009

R-026

★

Esty Maison Itabashikuyakushomae

Itabashi-ku, Tokyo

2,540

0.5

3,915.81

100.0

Apr. 2007

R-068

Esty Maison Oji

Kita-ku, Tokyo

1,650

0.3

2,289.44

100.0

Jul. 2010

Esty Maison Musashikoyama

Shinagawa-ku, Tokyo

1,050

0.2

1,176.78

94.0

Nov. 2007

R-069

★

Prime Maison Waseda

Shinjuku-ku, Tokyo

1,580

0.3

1,650.66

94.5

Nov. 2012

R-024

R-027
R-028

★

Esty Maison Sendagi

Bunkyo-ku, Tokyo

698

0.1

897.30100.0Jan. 2008

R-070

★

Prime Maison Hatchobori

Chuo-ku, Tokyo

1,460

0.3

1,382.32

96.9

Nov. 2012

R-029

★

Esty Maison Yotsuyasakamachi

Shinjuku-ku, Tokyo

2,090

0.4

2,453.17

100.0

Mar. 2008

R-071

★

Prime Maison Jimbocho

Chiyoda-ku, Tokyo

1,960

0.4

1,819.90

100.0

Mar. 2013

R-030

★

Esty Maison Hakatahigashi

Fukuoka-shi, Fukuoka

2,400

0.5

9,106.08

98.9

Nov. 2007

R-072

★

Prime Maison Gotenyama East

Shinagawa-ku, Tokyo

2,910

0.6

2,512.91

100.0

Jan. 2011

Esty Maison Kamigofuku

Fukuoka-shi, Fukuoka

821

0.2

2,261.91

97.0

Mar. 2008

R-073

★

MAST LIFE Akihabara

Chiyoda-ku, Tokyo

555

0.1

803.36100.0

Oct. 2006

R-031
R-032

★

Esty Maison Sangenjaya

Setagaya-ku, Tokyo

822

0.2

856.0897.2

Jan. 2008

R-074

★

Esty Maison Aoi

Nagoya-shi, Aichi

2,460

0.5

4,809.68

85.7

Oct. 2007

R-033

★

Prime Maison Musashinonomori

Kodaira-shi, Tokyo

1,850

0.4

3,924.58

95.8

Dec. 2007

R-075

★

Esty Maison Yakuin

Fukuoka-shi, Fukuoka

2,430

0.5

5,213.51

96.3

Feb. 2006

R-034

★

Prime Maison Higashisakura

Nagoya-shi, Aichi

1,500

0.3

3,118.11

89.7

Feb. 2008

R-076

★

Esty Maison Kinshicho II

Sumida-ku, Tokyo

8,250

1.6

9,469.65

95.7

Jan. 2008

R-035

★

Prime Maison Kayabakoen

Nagoya-shi, Aichi

801

0.2

2,163.98

96.3

Nov. 2006

R-077

★

Esty Maison Ojima

Koto-ku, Tokyo

8,630

1.6

9,905.97

97.7

Sep. 2007

R-036

★

Esty Maison Sangenjaya II

Setagaya-ku, Tokyo

785

0.1

894.64100.0

Jan. 2008

R-078

★

Prime Maison Fujimidai

Nagoya-shi, Aichi

2,070

0.4

5,704.63

94.1

Apr. 2007

R-037

★

Esty Maison Itabashi C6

Itabashi-ku, Tokyo

2,560

0.5

4,036.66

97.0

Mar. 2008

R-079

★

Esty Maison Tsurumai

Nagoya-shi, Aichi

4,490

0.9

13,812.40

100.0

Nov. 1999

R-038

★

MAST Hakata

Fukuoka-shi, Fukuoka

2,360

0.4

9,614.80

100.0Jan. 2005

R-080

★

Prime Maison Morishita

Koto-ku, Tokyo

1,930

0.4

2,180.78

97.7

May 2013

R-039★

Esty Maison Kinshicho

Sumida-ku, Tokyo

1,260

0.2

1,611.54

97.2

Sep. 2006

R-081

★

Prime Maison Shinagawa

Shinagawa-ku, Tokyo

1,960

0.4

2,107.88

98.9

Feb. 2014

R-040

★

Esty Maison Musashikoganei

Koganei-shi, Tokyo

1,790

0.3

2,275.24

95.1

Feb. 2005

R-082

★

Prime Maison Odorikoen

Sapporo-shi, Hokkaido

3,160

0.6

7,360.37

89.2

Dec. 2008

R-041

★

Prime Maison Gokiso

Nagoya-shi, Aichi

1,950

0.4

4,427.65

96.5

Oct. 2008

R-083

★

Prime Maison Minami 2-jo

Sapporo-shi, Hokkaido

1,930

0.4

6,019.09

100.0

Nov. 2009

R-042

★

Prime Maison Yuhigaoka

Osaka-shi, Osaka

909

0.2

2,040.35

100.0

Feb. 2007

R-084

★

Prime Maison Kamokamogawa

Sapporo-shi, Hokkaido

1,250

0.2

4,102.08

88.8

Oct. 2009

Note: Notes regarding this page can be found on the following page.

43

Appendix

List of Portfolio (2)Property
PP
No.
Property

Property nameLocation

Acquisition Price(million yen)

Investment
Ratio
(%)

Leasable Area(m²)

Occupancy
Rate(%)

Completion Date

Property
PP
No.
Property

Property nameLocation

Acquisition Price(million yen)

Investment
Ratio
(%)

Leasable Area(m²)

Occupancy
Rate(%)

Completion Date

R-085

★

Prime Maison Central Park

Fukuoka-shi, Fukuoka

2,309

0.4

10,268.74

93.1

Feb. 2011

O-001

★

Garden City Shinagawa Gotenyama

Shinagawa-ku, Tokyo

71,95013.6

38,577.99

100.0

Feb. 2011

R-086

★

MAST LIFE Yahiro

Sumida-ku, Tokyo

1,910

0.4

3,409.16

100.0

Jan. 2011

O-002

★

Gotenyama SH Building

Shinagawa-ku, Tokyo

51,5009.8

19,999.97

100.0

Feb. 2011

R-087

★

Prime Maison Ebisu

Shibuya-ku, Tokyo

4,360

0.8

3,010.66

96.5

Jun. 2014

O-003

★

Hommachi Minami Garden City

Osaka-shi, Osaka

44,0008.3

29,657.53

100.0

Feb. 2011

R-088

Granmast Kanazawa Nishiizumi

Kanazawa-shi, Ishikawa

1,080

0.2

4,634.50

100.0

Sep. 2007

Osaka-shi, Osaka

38,6007.3

17,006.94

100.0

May 2010

R-089

Granmast Unomori

Yokkaichi-shi, Mie

830

0.2

2,280.00

100.0

Apr. 2009

O-004

★

Hommachi Garden City
(Office building portion)

Esty Maison Kohoku Tsunashima

Yokohama-shi, Kanagawa

2,750

0.5

6,867.48

100.0

Note 6O-005★

HK Yodoyabashi Garden Avenue

Osaka-shi, Osaka

4,400

0.8

4,554.52

100.0

Jul. 2015

R-091

★

MAST LIFE Hino

Hino-shi, Tokyo

1,390

0.3

2,827.55

100.0

Jan. 2010

O-006

★

Hirokoji Garden Avenue

Nagoya-shi, Aichi

6,350

1.2

4,442.75

100.0

Mar. 2011

R-092

★

Prime Maison Yokohama Nihon-odori

Yokohama-shi, Kanagawa

4,870

0.9

5,461.13

97.7

Jun. 2014

O-007

★

Akasaka Garden City

Minato-ku, Tokyo

28,7005.4

12,472.80-

Jan. 2006

Kobe Women’s Student Housing

Kobe-shi, Hyogo

5,880

1.1

15,341.68

100.0

Feb. 2002

245,500

46.5

126,712.50

96.2

Jul. 2014

Location

Acquisition Price(million yen)

Investment
Ratio
(%)

Leasable Area(m²)

Occupancy
Rate(%)

Completion Date

R-090

R-093
R-094

★

Prime Maison Shibuya

Shibuya-ku, Tokyo

2,430

0.5

1,972.59

R-095★

Prime Maison Hatsudai

Shibuya-ku, Tokyo

3,010

0.6

2,879.20

92.9

Dec. 2014

R-096

Esty Maison Uemachidai

Osaka-shi, Osaka

1,040

0.2

2,225.52

100.0

Aug. 2005

R-097

Esty Maison Kobe-sannomiya

Kobe-shi, Hyogo

971

0.2

2,007.00

100.0

Mar. 2007

R-098

★

Prime Maison Shirokane-takanawa

Minato-ku, Tokyo

4,900

0.9

3,923.76

96.3

Jun. 2015

R-099

★

Prime Maison Ichigayayamabushicho

Shinjuku-ku, Tokyo

4,220

0.8

4,099.04

97.9

Oct. 2015

R-100

★

Esty Maison Morishita

Sumida-ku, Tokyo

R-101

★

Prime Maison Shirokanedai Tower

R-102

★

Prime Maison Otsuka

R-103

★

R-104

★

R-105
R-106

Office Building Subtotal

Property
PP
No.
Property

Property name

H-001

★

Hommachi Garden City
(Hotel portion)

Osaka-shi, Osaka

17,2003.3

18,092.98

100.0

May 2010

H-002★

The Ritz-Carlton, Kyoto

Kyoto-shi, Kyoto

17,8003.4

9,384.56

100.0

Oct. 2013

35,0006.6

27,477.54

100.0

Investment
Ratio
(%)

Leasable Area(m²)

Occupancy
Rate
(%)

655

0.1

748.92

95.1

Feb. 2017

Shinagawa-ku, Tokyo

7,950

1.5

6,772.89

94.0

May 2016

Toshima-ku, Tokyo

3,700

0.7

3,921.35

96.1

Jan. 2017

Prime Maison Asakusabashi

Taito-ku, Tokyo

1,680

0.3

2,033.06

94.7

Oct. 2016

Prime Maison Daikanyama

Meguro-ku, Tokyo

2,520

0.5

1,779.17

69.3

Jan. 2017★

Prime Maison Gotenyama West

Shinagawa-ku, Tokyo

3,400

0.6

3,569.73

96.3

Jan. 2011★

Esty Maison Toyosu Residence

Koto-ku, Tokyo

6,050

1.1

23,538.73

95.4

Feb. 2008

R107

Esty Maison Kokura

Kitakyushu-shi, Fukuoka

1,040

0.2

3,062.59

86.4

Feb. 2006

R-108

MAST Ijiri

Fukuoka-shi, Fukuoka

390

0.1

1,430.60

100.0

Jan. 2008

Residence

112

84

81.7

247,01546.8

390,932.95

96.7

10.5 years

Minato-ku, Tokyo

2,040

0.4

1,387.12-

Oct. 2017

Office Building

7

7

100.0

245,500

46.5

126,712.50

100.0

9.0 years

R-109

★

Prime Maison Mitatsunamachi

R-110
R-111
R-112

★
★
★

Prime Maison Hongo

Bunkyo-ku, Tokyo

2,600

0.5

2,423.46-

Mar. 2018

Prime Maison Kuramae

Taito-ku, Tokyo

2,190

0.4

2,259.40-

Nov. 2018

Esty Maison Yokohama-aobadai North
Residence Subtotal

Yokohama-shi, Kanagawa

1,360

0.3

2,723.24

247,01546.8

390,932.95-

Jul. 2018

Hotel Subtotal■ Overview of Portfolio
Type

Number ofproperties

Number of PP
Properties

AcquisitionPrice(million yen)

PP Ratio(%)

Average
Building Age

Hotel

2

2

100.0

35,0006.6

27,477.54

100.0

7.4 years

Retail andother property

-

-

-

-

-

-

-

-

Total

120

92

91.4

527,515100.0

545,122.99

97.5

9.6 years

Note 1: “Property No.” is classified by use of properties held by the investment corporation, whereby each property is given a number and any of the following letters: R representing residences, O representing office buildings, and H representing hotels,
respectively.
Note 2: “PP Properties” are assets that fall under the category of Prime Properties. For Prime Properties, please refer to page 46.
Note 3: “Acquisition Price” is the appraisal value as of April 30, 2018, the day before the effective date of the merger, for the assets succeeded from SHI. As for the assets held by SHR, the acquisition price is indicated. Amounts are rounded down to thenearest million yen.

Note 4: As “Investment Ratio” indicates the ratio of acquisition price of each asset to the total acquisition price of assets held, there is a case when the total of the investment ratio of residences, office building and hotel does not reach 100%.
Note 5: “Occupancy Rate” is indicated based on the information as of April 30, 2019. Therefore, “Akasaka Garden City”, “Garden City Shinagawa Gotenyama (additional acquisition portion)”, “Hommachi Minami Garden City (additional acquisition portion)”,“Prime Maison Mitatsunamachi”, “Prime Maison Hongo”, “Prime Maison Kuramae” and “Esty Maison Yokohama-aobadai North”, which are assets acquired in 10th FP by the 4th PO, are not included.
Note 6: “Esty Maison Kohoku Tsunashima” comprises three buildings (East, West, and Annex), and the “completion dates” are March 2002, October 2002, and September 2002, respectively.
Note 7: Data on “Hommachi Garden City” is stated as if the office building portion and hotel portion are separate buildings according to the use of each portion, and when calculating the total number of properties, the property is treated as one property.
Therefore, items in the total column of “Number of Properties” and “Number of PP Properties” in the Overview of Portfolio differ from the total for each item.
Note 8: As for “Akasaka Garden City” and “The Ritz-Carlton, Kyoto”, all figures other than “Occupancy rate” and “Completion Date” reflect quasi-co-ownership interests which are owned by SHR.
Note 9: “PP Ratio” in the Overview of Portfolio indicates the ratio based on acquisition price.
Note 10: “Average Building Age” in the Overview of Portfolio is stated as the weighted average calculated on the basis of the building age as of the date of this document based on the acquisition price.

44

Appendix

Portfolio Development Policy■ Portfolio Development Policy by Use
Build a portfolio with “residences” as “the bases of living for residents” and “office buildings” as “the bases of operation for business”, as core assets.
Promote investment in hotels for which continuous growth is expected.

Asset Category

Type

Examples of Specific Asset Types

Investment Ratio byType(acquisition price basis)

Core Assets
Residential Properties

Residence

Office building

Commercial Properties

Hotel

Retail andother properties

As of the date ofthis document

Target of investment ratioby use at the time ofachieving asset size of¥600 billion1

Residences
Student dormitories
Company housing

30‒55%

46.8%

Around 45%

Office buildings
Data centers30‒55%

46.5%

Around 45%

HotelsService apartments

0‒30%

6.6%

Around 10%

Retail properties, Senior properties(Housing for the elderly with services,Fee-based homes for the aged,
Daycare centers)

0‒10%

0%

Around 0‒10%Note 1: Target of investment ratio in mid to long term. SHR does not guarantee or promise that these ratios will be realized, and actual ratios could drastically differ.

■ Investment Areas by Asset Category
Priority investment areas will be set in light of the characteristics of each asset category.
Regarding investment in overseas real estate: investment in residences and commercial properties will be allowed, but we will maintain a cautious stance for now.
Asset Category

Priority Investment Area

Investment Ratio by
Area(acquisition price basis)

As of the date ofthis document

Residential Properties

Greater Tokyo

70% or higher

77.3%

Commercial Properties

Three Major Metropolitan Areas(Greater Tokyo, Osaka Area, Nagoya Area)

80% or higher

100.0%

Note: Actual ratios may deviate from the above ratio temporarily in case of acquisition of properties meeting the investment criteria based on the growth strategy.

45

Appendix

Continuous Investment in Prime Properties
Priority investment in Prime Properties will be continued with the aim of enhancing the quality of the portfolio.
■ Prime Properties centered on “Strategic Location” and “High Quality”
Strategic Location

Residential Properties

Commercial Properties

High Quality

Sites suited for “bases for sustainable living” for residents.

As residences, provide high-class fundamental functionality, such as
comfort and safety, and give due consideration to the environment
as a societal request to make comprehensive determinations
regarding buildings suited to the neighborhoods and the like.

Sites suited for “sustainable bases of operation” of tenant companies.

In addition to the functionality sought by tenant companies, giveconsideration to the environment as a societal request and establish
specifications suitable for BCP sites to make comprehensive
determinations regarding buildings suited to the neighborhoods andthe like.

■ Elements of “Strategic Locations” and “High Quality”

Strategic Location
High Quality

Economic area

BCP/Safety

Functionality/Livability

Convenience

Brand

Environmental
consideration46

Appendix

Estimated Value at the End of Period (1)■ Properties Owned as of the End of April 2019
Property No.

Property Name

Estimated Value at the End
of Period (million yen)
As of Apr. 30, 2019

Book Value(million yen)

Difference from
Previous Period

Unrealized
CapitalGain/Loss(million yen)

Discount Rate (%)

Direct Capitalization Rate (%)
As of Apr. 30, 2019

As of Apr. 30, 2019

Period on period

Terminal Capitalization Rate (%)

Period on period

As of Apr. 30, 2019

Appraisal NOI(million yen)

Period on period

R-001

Esty Maison Ginza

6,870

170

6,514

355

3.8

(0.1)

4.0

(0.1)

4.0

(0.1)

273

R-002

Esty Maison Azabunagasaka

1,880

40

1,779

100

3.9

(0.1)

4.0

(0.1)

4.1

(0.1)

77

R-003

Esty Maison Ebisu II

2,120

30

2,031

88

3.9

(0.1)

4.0

(0.1)

4.1

(0.1)

88

R-004

Esty Maison Ebisu

880

(16)

869

10

3.8

(0.1)

3.9

(0.1)

4.0

(0.1)

36

R-005

Esty Maison Kanda

1,690

40

1,592

97

3.9

(0.1)

4.0

(0.1)

4.1

(0.1)

69

R-006

Esty Maison Kitashinjuku

1,650

20

1,573

76

4.1

(0.1)

4.1

(0.1)

4.3

(0.1)

70

R-007

Esty Maison Asakusakomagata

2,300

60

2,160

139

4.1

(0.1)

4.1

(0.1)

4.3

(0.1)

99

R-008

Esty Maison Kawasaki

2,600

70

2,516

83

4.2

(0.1)

4.2

(0.1)

4.4

(0.1)

115

R-009

Esty Maison Yokohama

2,070

(40)

2,084

(14)

4.5

-

4.2

(0.1)

4.6

(0.1)

99

R-010

Esty Maison Kameido

1,620

30

1,555

64

4.4

(0.1)

4.2

(0.1)

4.6

(0.1)

77

R-011

Esty Maison Meguro

1,110

30

1,093

16

4.0

(0.1)

3.8

(0.1)

4.2

(0.1)

47

R-012

Esty Maison Sugamo

1,690

30

1,618

71

4.0

(0.1)

3.8

(0.1)

4.2

(0.1)

72

R-013

Esty Maison Kyobashi

3,000

-

2,923

76

4.6

-

4.5

-

4.7

-

144

R-014

Esty Maison Hakuraku

952

20

918

33

4.5

(0.1)

4.3

(0.1)

4.7

(0.1)

46

R-015

Esty Maison Minamihorie

1,090

20

1,053

36

4.3

(0.1)

4.1

(0.1)

4.5

(0.1)

51

R-016

Esty Maison Gotanda

3,200

70

3,085

114

4.3

(0.1)

4.0

(0.1)

4.5

(0.1)

143

R-017

Esty Maison Oisendaizaka

2,790

70

2,693

96

4.1

(0.1)

3.9

(0.1)

4.3

(0.1)

120

R-018

Esty Maison Shinagawa Seaside

2,120

40

2,033

86

4.0

(0.1)

3.8

(0.1)

4.2

(0.1)

94

R-019

Esty Maison Minamiazabu

1,290

20

1,245

44

3.7

(0.1)

3.5

(0.1)

3.9

(0.1)

52

R-020

Esty Maison Tsukamoto

1,100

20

1,063

36

4.8

(0.1)

4.6

(0.1)

5.0

(0.1)

56

R-021

Esty Maison Kawasaki II

2,000

50

1,983

16

4.2

(0.1)

4.0

(0.1)

4.4

(0.1)

93

R-022

Esty Maison Azabujuban

2,820

70

2,730

89

3.7

(0.1)

3.5

(0.1)

3.9

(0.1)

108

R-023

Esty Maison Itabashihoncho

971

16

924

46

4.1

(0.1)

3.9

(0.1)

4.3

(0.1)

43

R-024

Esty Maison Oizumigakuen

818

13

782

35

4.2

(0.1)

4.0

(0.1)

4.4

(0.1)

38

R-025

Esty Maison Higashishinagawa

2,380

50

2,356

23

4.3

(0.1)

4.1

(0.1)

4.5

(0.1)

110

R-026

Esty Maison Itabashikuyakushomae

2,620

30

2,513

106

4.1

(0.1)

3.9

(0.1)

4.3

(0.1)

116

R-027

Esty Maison Musashikoyama

1,100

40

1,040

59

4.1

(0.1)

3.9

(0.1)

4.3

(0.1)

48

R-028

Esty Maison Sendagi

730

19

692

37

4.1

(0.1)

3.9

(0.1)

4.3

(0.1)

32

R-029

Esty Maison Yotsuyasakamachi

2,190

50

2,081

108

4.0

(0.1)

3.8

(0.1)

4.2

(0.1)

91

R-030

Esty Maison Hakatahigashi

2,410

(10)

2,350

59

5.0

-

5.0

-

5.1

-

130

R-031

Esty Maison Kamigofuku

815

(1)

805

9

4.8

-

4.8

-

4.9

-

44

R-032

Esty Maison Sangenjaya

850

20

813

36

4.0

(0.1)

4.1

(0.1)

4.2

(0.1)

37

R-033

Prime Maison Musashinonomori

1,920

40

1,828

91

4.6

(0.1)

4.5

(0.1)

4.8

(0.1)

96

R-034

Prime Maison Higashisakura

1,570

40

1,479

90

4.6

(0.1)

4.5

(0.1)

4.8

(0.1)

77

R-035

Prime Maison Kayabakoen

835

16

852

(17)

4.8

(0.1)

4.7

(0.1)

5.0

(0.1)

43

R-036

Esty Maison Sangenjaya II

822

18

777

44

4.1

(0.1)

4.2

(0.1)

4.3

(0.1)

36

R-037

Esty Maison Itabashi C6

2,620

60

2,528

91

4.3

(0.1)

4.1

(0.1)

4.5

(0.1)

120

R-038

MAST Hakata

2,450

50

2,294

155

4.9

(0.1)

4.3

(0.1)

5.1

(0.1)

134

R-039

Esty Maison Kinshicho

1,300

30

1,241

58

4.1

(0.1)

3.9

(0.1)

4.3

(0.1)

57

R-040

Esty Maison Musashikoganei

1,930

60

1,777

152

4.2

(0.1)

4.3

(0.1)

4.4

(0.1)

85

Note: Notes regarding this page can be found on page 50.

47

Appendix

Estimated Value at the End of Period (2)Property No.

Property Name

Estimated Value at the End
of Period (million yen)
As of Apr. 30, 2019

Book Value(million yen)

Difference from
Previous Period

Unrealized
CapitalGain/Loss(million yen)

Discount Rate (%)

Direct Capitalization Rate (%)
As of Apr. 30, 2019

As of Apr. 30, 2019

Period on period

Terminal Capitalization Rate (%)

Period on period

As of Apr. 30, 2019

Appraisal NOI(million yen)

Period on period

R-041

Prime Maison Gokiso

1,980

30

1,919

60

4.6

(0.1)

4.6

(0.1)

4.8

(0.1)

97

R-042

Prime Maison Yuhigaoka

951

22

897

53

4.5

(0.1)

4.3

(0.1)

4.7

(0.1)

44

R-043

Prime Maison Kitatanabe

624

10

592

31

4.8

(0.1)

4.6

(0.1)

5.0

(0.1)

32

R-044

Prime Maison Momochihama

2,050

60

1,923

126

4.8

(0.1)

4.5

(0.1)

5.0

(0.1)

110

R-045

Esty Maison Akihabara

2,000

60

1,902

97

4.1

(0.1)

3.9

(0.1)

4.3

(0.1)

88

R-046

Esty Maison Sasazuka

3,420

80

3,418

1

4.1

(0.1)

3.9

(0.1)

4.3

(0.1)

146

R-047

Prime Maison Ginza East

6,510

150

6,188

321

3.9

(0.1)

3.7

(0.1)

4.1

(0.1)

265

R-048

Prime Maison Takami

1,070

20

1,044

25

4.4

(0.1)

4.5

(0.1)

4.6

(0.1)

51

R-049

Prime Maison Yadaminami

848

28

880

(32)

4.8

(0.1)

4.7

(0.1)

5.0

(0.1)

43

R-050

Prime Maison Teriha

1,260

20

1,234

25

5.0

(0.1)

4.8

(0.1)

5.2

(0.1)

74

R-051

Esty Maison Higashishirakabe

1,620

30

1,557

62

4.7

(0.1)

4.6

(0.1)

4.9

(0.1)

80

R-052

Esty Maison Sengoku

1,360

30

1,351

8

3.9

(0.1)

3.7

(0.1)

4.1

(0.1)

56

R-053

Esty Maison Daizawa

2,300

60

2,255

44

3.9

(0.1)

3.7

(0.1)

4.1

(0.1)

93

R-054

Esty Maison Togoshi

1,820

50

1,754

65

3.9

(0.1)

4.0

(0.1)

4.1

(0.1)

75

R-055

Esty Maison Nishitemma

1,660

10

1,660

(0)

4.4

(0.1)

4.5

(0.1)

4.6

(0.1)

78

R-056

Esty Maison Shirokanedai

2,470

70

2,388

81

4.0

(0.1)

3.8

(0.1)

4.2

(0.1)

104

R-057

Esty Maison Higashishinjuku

1,720

-

1,658

61

4.0

-

4.1

-

4.2

-

73

R-058

Esty Maison Motoazabu

1,580

30

1,530

49

3.7

(0.1)

3.8

(0.1)

3.9

(0.1)

61

R-059

Esty Maison Toritsudaigaku

853

2

854

(1)

3.9

-

4.0

-

4.1

-

35

R-060

Esty Maison Musashikoyama II

1,050

20

1,019

30

4.0

(0.1)

3.8

(0.1)

4.2

(0.1)

44

R-061

Esty Maison Nakano

1,860

50

1,853

6

4.0

(0.1)

3.8

(0.1)

4.2

(0.1)

79

R-062

Esty Maison Shinnakano

1,020

25

1,008

11

4.1

(0.1)

3.9

(0.1)

4.3

(0.1)

44

R-063

Esty Maison Nakanofujimicho

995

1

974

20

4.1

-

4.2

-

4.3

-

43

R-064

Esty Maison Tetsugakudo

1,180

40

1,146

33

4.1

(0.1)

3.9

(0.1)

4.3

(0.1)

51

R-065

Esty Maison Koenji

1,170

-

1,149

20

4.0

-

4.1

-

4.2

-

49

R-066

Esty Maison Oshiage

2,510

70

2,461

48

4.1

(0.1)

4.1

(0.1)

4.3

(0.1)

109

R-067

Esty Maison Akabane

3,320

80

3,244

75

4.2

(0.1)

4.0

(0.1)

4.4

(0.1)

148

R-068

Esty Maison Oji

1,700

80

1,629

70

4.2

(0.1)

4.0

(0.1)

4.4

(0.1)

75

R-069

Prime Maison Waseda

1,610

-

1,561

48

3.9

(0.1)

3.7

(0.1)

4.1

(0.1)

66

R-070

Prime Maison Hatchobori

1,490

-

1,440

49

3.9

(0.1)

3.7

(0.1)

4.1

(0.1)

60

R-071

Prime Maison Jimbocho

1,970

-

1,936

33

4.0

(0.1)

3.8

(0.1)

4.2

(0.1)

82

R-072

Prime Maison Gotenyama East

2,970

20

2,895

74

3.8

(0.1)

3.6

(0.1)

4.0

(0.1)

117

R-073

MAST LIFE Akihabara

555

4

551

3

4.2

(0.1)

4.0

(0.1)

4.4

(0.1)

26

R-074

Esty Maison Aoi

2,510

30

2,427

82

4.6

(0.1)

4.6

(0.1)

4.8

(0.1)

120

R-075

Esty Maison Yakuin

2,430

(40)

2,406

23

4.4

(0.1)

4.5

(0.1)

4.6

(0.1)

116

R-076

Esty Maison Kinshicho II

8,600

180

8,160

439

4.1

(0.1)

3.9

(0.1)

4.3

(0.1)

364

R-077

Esty Maison Ojima

8,810

20

8,537

272

4.1

(0.1)

3.9

(0.1)

4.3

(0.1)

379

R-078

Prime Maison Fujimidai

2,080

20

2,051

28

4.9

(0.1)

4.7

(0.1)

5.1

(0.1)

110

R-079

Esty Maison Tsurumai

4,540

50

4,679

(139)

4.9

(0.1)

4.7

(0.1)

5.1

(0.1)

238

R-080

Prime Maison Morishita

2,010

40

1,904

105

4.1

(0.1)

4.1

(0.1)

4.3

(0.1)

85

Note: Notes regarding this page can be found on page 50.

48

Appendix

Estimated Value at the End of Period (3)Property No.

Property Name

Estimated Value at the End
of Period (million yen)
As of Apr. 30, 2019

Book Value(million yen)

Difference from
Previous Period

Unrealized
CapitalGain/Loss(million yen)

Discount Rate (%)

Direct Capitalization Rate (%)
As of Apr. 30, 2019

As of Apr. 30, 2019

Period on period

Terminal Capitalization Rate (%)

Period on period

As of Apr. 30, 2019

Appraisal NOI(million yen)

Period on period

R-081

Prime Maison Shinagawa

2,020

50

1,940

79

4.1

△ 0.1

3.9

△ 0.1

4.3

△ 0.1

86

R-082

Prime Maison Odorikoen

3,220

20

3,135

84

4.8

-

4.6

-

5.0

-

162

R-083

Prime Maison Minami 2-jo

1,990

40

1,899

90

4.8

△ 0.1

4.6

△ 0.1

5.0

△ 0.1

101

R-084

Prime Maison Kamokamogawa

1,310

30

1,227

82

4.8

△ 0.1

4.6

△ 0.1

5.0

△ 0.1

66

R-085

Prime Maison Central Park

2,363

1

2,266

96

5.1

-

4.9

-

5.2

-

131

R-086

MAST LIFE Yahiro

1,950

40

1,884

65

4.4

△ 0.1

4.2

△ 0.1

4.6

△ 0.1

89

R-087

Prime Maison Ebisu

4,580

100

4,332

247

3.8

△ 0.1

3.6

△ 0.1

4.0

△ 0.1

179

R-088

Granmast Kanazawa Nishiizumi

1,060

-

1,061

△1

5.2

△ 0.1

5.0

△ 0.1

5.4

△ 0.1

58

R-089

Granmast Unomori

830

-

814

15

5.2

-

5.0

-

5.4

-

46

R-090

Esty Maison Kohoku Tsunashima

2,877

63

2,732

144

4.5

△ 0.1

4.3

△ 0.1

4.7

△ 0.1

140

R-091

MAST LIFE Hino

1,410

-

1,366

43

4.7

-

4.5

-

4.8

-

69

R-092

Prime Maison Yokohama Nihon-odori

4,880

-

4,805

74

4.2

-

4.0

-

4.4

-

212

R-093

Kobe Women’s Student Housing

5,990

110

5,716

273

5.1

△ 0.1

4.9

△ 0.1

5.3

△ 0.1

325

R-094

Prime Maison Shibuya

2,540

60

2,417

122

3.8

△ 0.1

3.6

△ 0.1

4.0

△ 0.1

99

R-095

Prime Maison Hatsudai

3,120

50

2,984

135

3.9

△ 0.1

3.7

△ 0.1

4.1

△ 0.1

125

R-096

Esty Maison Uemachidai

1,060

10

1,088

△28

4.4

△ 0.1

4.1

△ 0.1

4.6

△ 0.1

50

R-097

Esty Maison Kobe-sannomiya

977

6

957

19

4.6

△ 0.1

4.4

△ 0.1

4.8

△ 0.1

50

R-098

Prime Maison Shirokane-takanawa

5,120

110

4,869

250

3.8

△ 0.1

3.6

△ 0.1

4.0

△ 0.1

201

R-099

Prime Maison Ichigayayamabushicho

4,250

-

4,189

60

4.0

-

3.8

-

4.2

-

177

R-100

Esty Maison Morishita

672

14

648

23

4.2

△ 0.1

4.0

△ 0.1

4.4

△ 0.1

28

R-101

Prime Maison Shirokanedai Tower

9,240

290

8,049

1,190

3.8

△ 0.1

3.9

△ 0.1

4.0

△ 0.1

360

R-102

Prime Maison Otsuka

4,200

110

3,760

439

4.0

△ 0.1

4.1

△ 0.1

4.2

△ 0.1

173

R-103

Prime Maison Asakusabashi

1,900

40

1,706

193

4.0

△ 0.1

4.1

△ 0.1

4.2

△ 0.1

78

R-104

Prime Maison Daikanyama

2,880

30

2,553

326

3.8

△ 0.1

3.9

△ 0.1

4.0

△ 0.1

112

R-105

Prime Maison Gotenyama West

3,950

100

3,449

500

3.8

△ 0.1

3.9

△ 0.1

4.0

△ 0.1

155

R-106

Esty Maison Toyosu Residence

6,560

50

6,150

409

-

-

4.3

△ 0.1

-

-

336

R-107

Esty Maison Kokura

1,050

-

1,097

△47

5.0

-

4.8

-

5.1

-

56

R-108

MAST Ijiri

409

-

405

3

4.7

-

4.5

-

4.9

-

21

Residence Subtotal

248,057

4,161

237,829

10,227

-

-

-

-

-

-

11,108O-001

Garden City Shinagawa Gotenyama

71,200△200

58,512

12,687

3.3

-

3.0

-

3.5

-

2,430

O-002

Gotenyama SH Building

61,9001,800

50,303

11,596

3.3

△ 0.1

3.3

△ 0.1

3.5

△ 0.1

2,064

O-003

30,300400

22,168

8,131

3.6

-

3.3

-

3.8

-

1,131

44,700-37,322

7,377

3.5

-

3.3

-

3.7

-

1,594

O-005

Hommachi Minami Garden City
Hommachi Garden City
(Office building portion)
HK Yodoyabashi Garden Avenue

5,930

180

4,324

1,605

3.8

△ 0.1

3.8

△ 0.1

3.9

△ 0.1

237

O-006

Hirokoji Garden Avenue

7,170

10

6,267

902

4.2

-

4.0

-

4.4

-

309

Office Building Subtotal

221,200

2,190

178,899

42,300

-

-

-

-

-

-

7,767

H-001

Hommachi Garden City (Hotel portion)

17,800100

17,082

717

3.7

△ 0.1

3.5

△ 0.1

3.9

△ 0.1

678

H-002

The Ritz-Carlton, Kyoto

18,520-17,971

548

3.3

-

3.1

-

3.5

-

711

Hotel Subtotal

36,320100

35,053

1,266

-

-

-

-

-

-

1,389

Portfolio Total

505,577

6,451

451,782

53,794

-

-

-

-

-

-

20,265O-004

Note: Notes regarding this page can be found on page 50.

49

Appendix

Estimated Value at the End of Period (4)Note 1: Amounts of less than one million yen are rounded down.
Note 2: “Estimated Value at the end of Period,” “Direct Capitalization Rate,” “Discount Rate,” “Terminal Capitalization Rate” and “Appraisal NOI” for each period ended in April are the amount recorded in appraisal reports as of the end of therelevant period, while for each period ended in October are the amount recorded in appraisal reports as of the end of the relevant period or the results of appraisal reports that do not conform to real estate appraisal standards. “Book
Value” indicates the amount recorded on the balance sheets as of April 30, 2019.
Note 3: A fixed-rent type master lease agreement has been concluded with Sekiwa Real Estate Kyushu, Ltd. with regard to “Prime Maison Momochihama”. While discount rates differ based on the agreement period, for the sake of convenience,
the above chart shows the discount rates until the expiry of the agreement.
Note 4: A fixed-rent type master lease agreement has been concluded with Sekiwa Real Estate Chubu, Ltd. with regard to “Esty Maison Higashishirakabe”. While discount rates differ based on the agreement period, for the sake of convenience,
the above chart shows the discount rates until the expiry of the agreement.
Note 5: Part of the land of “Prime Maison Central Park” (Lot: 23-32) is leased land and the income approach value for the leased land is calculated though the DCF method, thus no “Direct Capitalization Rate” or “Terminal Capitalization Rate”
for the leased land are established. Therefore, the above “Direct Capitalization Rate,” “Discount Rate” and “Terminal Capitalization Rate” only indicate those for the residential portion. Moreover, as mentioned above, because the DCF
method is used to calculate the income approach value for the leased land, the above “Estimated Value at the end of Period” is the result of adding the income approach value of the residential portion and the income approach value ofthe leased land portion calculated through the DCF method, and the above “Appraisal NOI” is the result of adding the appraisal NOI of the residential portion with the appraisal NOI of the first fiscal year of the leased land portion
calculated through the DCF method.
Note 6: “Esty Maison Kohoku Tsunashima” comprises three buildings (East, West and Annex), and the “Estimated Value at the end of Period” and “Appraisal NOI” are the total value of each building.
Note 7: As for “Esty Maison Toyosu Residence”, the capitalization method over a definite term is adopted as the right to use the land is a fixed-term land leasehold and thus the income period is limited. Therefore, no “Direct Capitalization Rate”
or “Terminal Capitalization Rate” are established. For the sake of convenience, the above chart shows the discount rates until the expiry of the agreements.
Note 8: As for “The Ritz-Carlton, Kyoto”, “Estimated Value at the End of Period”, “Book Value”, “Unrealized Capital Gain/Loss” and “Appraisal NOI” reflect a ratio of quasi-co-ownership interest which SHR owns.
Note 9: In calculating “Difference from Previous Period” and “Period on Period,” the comparison between the figures as of October 31, 2018 and those as of April 30, 2019 is indicated. Residence Subtotal, Office Building Subtotal, Hotel Subtotal,and Portfolio Total indicate the aggregate amount of changes of properties owned at each point in time.

50Appendix

Overview of Interest-Bearing Liabilities (1)■ Loans➢ Short-term loans payable

As of the date of this document
LenderBalance(million yen)

MUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation

6,500

MUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation

31,160Interest Rate
Base Rate(JBA 1-month JPY TIBOR)+0.17000%
Base Rate(JBA 1-month JPY TIBOR)+0.17000%

Drawdown Date

Repayment Date

Feb. 28, 2019Feb. 28, 2020

Jun. 10, 2019

May 29, 2020

Remarks

UnsecuredandUnguaranteed➢ Current portion of long-term loans payable
Balance(million yen)Interest Rate

5,242

1.02225%2

Feb. 28, 2013

Feb. 28, 2020

Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation

1,550

0.79614%2

Feb. 28, 2014

Feb. 28, 2020

MUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Limited, Mizuho Trust & Banking
Co., Ltd., Resona Bank, Limited., Development Bank of Japan Inc., The Norinchukin Bank

14,0000.65830%2

Dec. 3, 2014

Nov. 30, 2019

Balance(million yen)Interest Rate

5,500

1.17200%2

Aug. 30, 2013

Aug. 31, 2020

1,800

1.17350%2

Jan. 31, 2014

Feb. 28, 2022

3,900

0.95225%

2

Feb. 28, 2014

Feb. 26, 2021

4,680

1.11000%2

Feb. 28, 2014

Feb. 28, 2022

2,100

0.97300%

2

Mar. 28, 2014

Feb. 26, 2021

2

Lender
MUFG Bank, Ltd., Mizuho Bank, Ltd., Mizuho Trust & Banking Co., Ltd., Resona Bank, Limited.

Drawdown Date

Repayment Date

Remarks

UnsecuredandUnguaranteed➢ Long-term loans payable
Lender
MUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Trust Bank, Limited, Mizuho Trust & Banking Co., Ltd., Resona Bank, Limited., Aozora
Bank, Ltd.

MUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Limited
MUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Limited, Mizuho Trust & Banking
Co., Ltd., Resona Bank, Limited., The Senshu Ikeda Bank, Ltd., The Yamaguchi Bank, Ltd.
MUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Limited, Mizuho Trust & Banking
Co., Ltd., Resona Bank, Limited.
Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, The Bank of Fukuoka, Ltd., Shinkin Central Bank, The Shizuoka Bank, Ltd.

Drawdown Date

Repayment Date

Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation

4,400

0.83600%

Aug. 29, 2014

Aug. 31, 2021

MUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation

5,400

0.96475%2

Aug. 29, 2014

Aug. 31, 2022

17,0000.94060%2

Dec. 3, 2014

Nov. 30, 2021

10,0001.47450%2

Dec. 3, 2014

Nov. 30, 2024

3,900

0.62800%2

Feb. 27, 2015

Feb. 26, 2021

3,350

0.73975%2

Feb. 27, 2015

Feb. 28, 2022

Development Bank of Japan Inc.

1,000

0.85250%

Feb. 27, 2015

Feb. 28, 2023

MUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Limited, Mizuho Trust & Banking
Co., Ltd., Resona Bank, Limited., The Norinchukin Bank, The Bank of Fukuoka, Ltd., Aozora Bank, Ltd., Shinkin Central Bank, The Senshu
Ikeda Bank, Ltd., The Shizuoka Bank, Ltd., The 77 Bank, Ltd., The Hiroshima Bank, Ltd., The Yamaguchi Bank, Ltd.

7,100

0.86650%2

Feb. 27, 2015

Feb. 28, 2023

MUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Limited, Mizuho Trust & Banking
Co., Ltd., Resona Bank, Limited., Development Bank of Japan Inc., The Norinchukin BankMUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Limited, Development Bank ofJapan Inc.
Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, The Norinchukin Bank, Shinkin Central Bank, The Senshu Ikeda Bank, Ltd., The
Shizuoka Bank, Ltd., The 77 Bank, Ltd., The Hiroshima Bank, Ltd.
MUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Resona Bank, Limited., The Norinchukin Bank, The Bank ofFukuoka, Ltd.

Note: Notes regarding this page can be found on page 54.

Remarks

UnsecuredandUnguaranteed

51

Appendix

Overview of Interest-Bearing Liabilities (2)Lender
MUFG Bank, Ltd.

Balance(million yen)Interest Rate

Drawdown Date

Repayment Date

1,650

0.61760%

Jul. 31, 2015

Nov. 30, 2020

5,350

0.62760%

2

Jul. 31, 2015

Nov. 30, 2020

MUFG Bank, Ltd.

700

0.88470%

Jul. 31, 2015

Nov. 30, 2022

Development Bank of Japan Inc.

650

0.88500%

Jul. 31, 2015

Nov. 30, 2022

1,650

0.89470%

2Jul. 31, 2015

Nov. 30, 2022

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

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

750

1.00850%

Jul. 31, 2015

Nov. 30, 2023

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

2,350

1.01850%

2

Jul. 31, 2015

Nov. 30, 2023

Mizuho Bank, Ltd., Development Bank of Japan Inc.

2,200

0.67400%

Jan. 29, 2016

Aug. 31, 2023

1,900

0.68030%

2

Jan. 29, 2016

Aug. 31, 2023

4,750

0.63800%

2

Apr. 1, 2016

Feb. 29, 2024

1,750

0.50500%

Apr. 1, 2016

Feb. 29, 2024

1,900

0.49500%

Aug. 31, 2016

Aug. 30, 2024

600

0.57000%

Aug. 31, 2016

Aug. 29, 2025

3,000

0.59750%

Aug. 31, 2016

Aug. 29, 2025

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

4,050

Base Rate(JBA 1-month JPY TIBOR)+0.22500%

Sep. 9, 2016

Nov. 30, 2020

MUFG Bank, Ltd.

1,810

0.60500%

Sep. 9, 2016

Sep. 8, 2026

MUFG Bank, Ltd., Mizuho Bank, Ltd.

1,340

0.67000%

Sep. 9, 2016

Sep. 8, 2026

Sumitomo Mitsui Banking Corporation

1,600

0.31000%

Feb. 28, 2017

Aug. 31, 2020

600

0.61000%

Feb. 28, 2017

Feb. 28, 2025

Mizuho Bank, Ltd., Sumitomo Mitsui Trust Bank, Limited, Mizuho Trust & Banking Co., Ltd., Resona Bank, Limited., Shinkin Central Bank

1,800

0.67000%

Feb. 28, 2017

Feb. 28, 2025

MUFG Bank, Ltd.

1,500

0.72500%

Feb. 28, 2017

Feb. 27, 2026

MUFG Bank, Ltd., Mizuho Bank, Ltd., Development Bank of Japan Inc., The Bank of Fukuoka, Ltd., Aozora Bank, Ltd., The Yamaguchi Bank,
Ltd.

4,000

0.77880%

Feb. 28, 2017

Feb. 27, 2026

1,860

Base Rate(JBA 1-month JPY TIBOR)+0.20000%

Aug. 31, 2017

Aug. 31, 2021

990

0.37000%

Aug. 31, 2017

Nov. 30, 2023

MUFG Bank, Ltd., Mizuho Bank, Ltd., Mizuho Trust & Banking Co., Ltd., Development Bank of Japan Inc.

1,250

0.45254%

Aug. 31, 2017

Nov. 30, 2023

Mizuho Bank, Ltd., The Norinchukin Bank

2,528

0.61380%

Aug. 31, 2017

Aug. 29, 2025

Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Mizuho Trust & Banking Co., Ltd.
MUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Limited, Mizuho Trust & Banking
Co., Ltd., Resona Bank, Limited., The Norinchukin Bank, Aozora Bank, Ltd., The Yamaguchi Bank, Ltd.
MUFG Bank, Ltd., Development Bank of Japan Inc., The Bank of Fukuoka, Ltd., Shinkin Central Bank, The Senshu Ikeda Bank, Ltd., The
Shizuoka Bank, Ltd., The 77 Bank, Ltd., The Hiroshima Bank, Ltd.
Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Limited, Mizuho Trust & Banking Co., Ltd., Resona
Bank, Limited., The Norinchukin BankMUFG Bank, Ltd.
MUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Development Bank of Japan Inc.

MUFG Bank, Ltd.

Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Limited, Resona Bank, Limited., The Norinchukin BankMUFG Bank, Ltd.

Note: Notes regarding this page can be found on page 54.

Remarks

UnsecuredandUnguaranteed

52

Appendix

Overview of Interest-Bearing Liabilities (3)LenderBalance(million yen)Interest Rate

Drawdown Date

Repayment Date

750

0.32000%

Nov. 30, 2017

Jul. 13, 2022

Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Limited, Mizuho Trust & Banking Co., Ltd., Resona
Bank, Limited., The Norinchukin Bank

5,050

0.34800%

2

Nov. 30, 2017

Jul. 13, 2022

MUFG Bank, Ltd., Development Bank of Japan Inc.

1,200

0.35341%

Nov. 30, 2017

Jul. 13, 2022

MUFG Bank, Ltd.

750

0.34000%

Nov. 30, 2017

May 31, 2023

Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Limited, Mizuho Trust & Banking Co., Ltd., Resona
Bank, Limited., The Norinchukin Bank

5,050

0.41800%2

Nov. 30, 2017

May 31, 2023

MUFG Bank, Ltd., Development Bank of Japan Inc.

1,200

0.42622%

Nov. 30, 2017

May 31, 2023

500

0.56500%

Feb. 28, 2018

Feb. 27, 2026

MUFG Bank, Ltd., Mizuho Bank, Ltd., The 77 Bank, Ltd., The Hiroshima Bank, Ltd.

1,600

0.63500%

Feb. 28, 2018

Feb. 27, 2026

MUFG Bank, Ltd.

1,900

0.70000%

May 31, 2018

Aug. 31, 2027

6,100

0.78300%

2

May 31, 2018

Aug. 31, 2027

2,500

Base Rate(JBA 1-month JPY TIBOR)+0.17000%

Aug. 31, 2018

Aug. 31, 2021

Development Bank of Japan Inc.

376

0.28568%

Feb. 28, 2019

Aug. 30, 2024

MUFG Bank, Ltd.

300

0.34900%

Feb. 28, 2019

Aug. 30, 2024

3,619

0.35900%2

Feb. 28, 2019

Aug. 30, 2024

Development Bank of Japan Inc.

565

0.48000%

Feb. 28, 2019Feb. 26, 2027

MUFG Bank, Ltd.

450

0.56500%

Feb. 28, 2019Feb. 26, 2027

Feb. 28, 2019Feb. 26, 2027

Mar. 19, 2019

May 31, 2023

Mar. 19, 2019

May 31, 2023

MUFG Bank, Ltd.

MUFG Bank, Ltd.

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

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

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

3,072

0.57500%500

0.29900%2

Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Limited, Mizuho Trust & Banking Co., Ltd., Resona
Bank, Limited., The Norinchukin Bank

2,200

0.30900%

MUFG Bank, Ltd.

1,000

0.39580%

Mar. 19, 2019

Aug. 30, 2024

Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Limited, Mizuho Trust & Banking Co., Ltd., Resona
Bank, Limited., The Norinchukin Bank

2,700

0.40580%2

Mar. 19, 2019

Aug. 30, 2024

200

0.41388%

Mar. 19, 2019

Aug. 31, 2026

MUFG Bank, Ltd.

1,000

0.55600%

Mar. 19, 2019

Aug. 31, 2026

Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Limited, Mizuho Trust & Banking Co., Ltd., Resona
Bank, Limited., The Norinchukin Bank

2,800

0.56600%2

Mar. 19, 2019

Aug. 31, 2026

MUFG Bank, Ltd.

1,400

0.68500%

Mar. 19, 2019Feb. 29, 2028

Mar. 19, 2019Feb. 29, 2028

Shinkin Central Bank

Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Limited, Mizuho Trust & Banking Co., Ltd., Resona
Bank, Limited., The Bank of Fukuoka, Ltd., The Senshu Ikeda Bank, Ltd., The 77 Bank, Ltd., The Yamaguchi Bank, Ltd.

Total Loans
Note: Notes regarding this page can be found on page 54.

5,200

233,092

0.69500%

-

2

2

-

-

Remarks

UnsecuredandUnguaranteed-

53

Appendix

Overview of Interest-Bearing Liabilities (4)■ Investment Corporation Bonds➢

Current portion of investment corporation bonds
Name

Sekisui House Residential Investment Corporation Second
Series Unsecured Investment Corporation Bonds(with a clause that ranks them pari passu among specified
investment corporation bonds)➢■ Debt Balance by Financial Institution
As of the date of this document

Issue
Amount(million
yen)

2,000

Interest
Rate

1.00000%

Issue Date

Redemption Date

Feb. 28, 2013

Feb. 28, 2020

Remarks

UnsecuredandUnguaranteed

Investment corporation bonds with repayment period date exceeding one year
Name

Issue
Amount(millionyen)

Sekisui House Residential Investment Corporation Fourth
Series Unsecured Investment Corporation Bonds(with a clause that ranks them pari passu among specified
investment corporation bonds)

3,000

Sekisui House Residential Investment Corporation Fifth Series
Unsecured Investment Corporation Bonds(with a clause that ranks them pari passu among specified
investment corporation bonds)

3,000

Sekisui House Reit, Inc. First Series Unsecured Investment
Corporation Bonds(with a clause that ranks them pari passu among specified
investment corporation bonds)

2,000

Sekisui House Reit, Inc. Second Series Unsecured Investment
Corporation Bonds(with a clause that ranks them pari passu among specified
investment corporation bonds)

3,000

Total Investment Corporation Bonds

Total Interest-Bearing Liabilities

Interest
Rate

1.06900%

0.87100%

Issue Date

Redemption Date

Feb. 28, 2014

Aug. 29, 2014

13,0000.24000%-

Sep. 08, 2016

Jul. 13, 2017-

246,092 million yen

Financial institutions

Balance(million yen)

Ratio

MUFG Bank, Ltd.

60,952

26.1%

Mizuho Bank, Ltd.

49,472

21.2%

Sumitomo Mitsui Banking Corporation

46,225

19.8%

Sumitomo Mitsui Trust Bank, Limited

17,8107.6%

Mizuho Trust & Banking Co., Ltd.

13,620

5.8%

Resona Bank, Limited.

11,4504.9%

Development Bank of Japan Inc.

10,481

4.5%

The Norinchukin Bank

9,782

4.2%

The Bank of Fukuoka, Ltd.

2,700

1.2%

Shinkin Central Bank

1,800

0.8%

Aozora Bank, Ltd.

1,700

0.7%

The Senshu Ikeda Bank, Ltd.

1,500

0.6%

The 77 Bank, Ltd.

1,500

0.6%

The Yamaguchi Bank, Ltd.

1,500

0.6%

The Shizuoka Bank, Ltd.

1,300

0.6%

The Hiroshima Bank, Ltd.

1,300

0.6%

233,092

100.0%

Remarks

Feb. 28, 2024

Aug. 30, 2024
UnsecuredandUnguaranteed

0.34000%

As of the date of this document

Sep. 08, 2026

Jul. 13, 2022--

Total Loans

Note 1: Amounts of less than one million yen are rounded down.
Note 2: Interest rate swap agreements are concluded in order to avoid the risk of rising interest rates, and the interest rates indicated are the rates fixed with the interest rate swap agreements.

54Appendix

Unitholders Composition■ Number of Investment Units by Unitholder TypeFP ended October 2018
Investment
Units(units)Unitholder type

■ Number of Unitholders by Unitholder TypeFP ended April 2019
Investment
Units(units)

Ratio(%)

ChangeInvestment
Units(units)Ratio(%)

FP ended October 2018

Unitholder type(pt.)

Unitholders

FP ended April 2019

Ratio
(%)

Unitholders

ChangeRatio(%)

Unitholders(pt.)

Individuals and others

330,586

8.8

296,683

7.9(33,903)(0.9)

Individuals and others

19,533

96.3

17,97795.9(1,556)(0.4)

Financial institutions

2,580,497

68.6

2,458,934

65.4(121,563)(3.2)

Financial institutions

190

0.9

184

1.0

(6)

0.1

-

-

-

-

-

-

-

-

-

-

-

-

397,800

10.6

374,349

10.0(23,451)(0.6)

Regional banks

48

0.2

45

0.2

(3)

-

Trust banks

1,929,995

51.3

1,824,616

48.5(105,379)(2.8)

Trust banks

10

0.0

11

0.1

1

0.1

Life insurers

38,9201.0

46,219

1.2

7,299

0.2

Life insurers

7

0.0

7

0.0

-

-

Casualty insurers

27,4920.7

24,6460.7(2,846)-

Casualty insurers

4

0.0

2

0.0

(2)

-

Shinkin banks

109,153

2.9

104,758

2.8(4,395)(0.1)

Shinkin banks

67

0.3

66

0.4

(1)

0.1

Others77,1372.1

84,346

2.2

7,209

0.1

Others

54

0.3

53

0.3

(1)

-

Non-financial corporations

280,2197.4

268,030

7.1(12,189)(0.3)

Non-financial corporations

357

1.8

339

1.8

(18)

-

Non-Japanese corporations, etc.

517,580

13.8

616,753

16.4

99,173

2.6

Non-Japanese corporations, etc.

194

1.0

210

1.1

16

0.1

Securities companies

53,2091.4

121,691

3.2

68,482

1.8

Securities companies

19

0.1

26

0.1

7

-

3,762,091

100.0

3,762,091

100.0

-

-

20,293100.0

18,736100.0(1,557)-

City banks
Regional banks

Total█ Financial institutions (including stock companies)█ Non-financial corporations

City banks

Total■ As of the End of the Fiscal Period Ended April 2019 - Top 5 Unitholders█ Non-Japanese corporations, etc.

█ Individuals and others
Company NameFP ended
April 2019
3,762,091
units

0%

2,580,625 units(68.6%)

20%

40%

616,753 units(16.4%)

60%

268,030 units(7.1%)

296,683 units(7.9%)

80%

100%

Number ofInvestment Units
Owned

Ratio

Japan Trustee Services Bank, Ltd. (Trust Account)955,225 units

25.4%

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

556,487 units

14.8%

Sekisui House, Ltd.

194,750 units

5.2%

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

142,384 units

3.8%

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

75,523 units

2.0%

55

Appendix

Changes in Unit Price (December 3, 2014 – June 14, 2019)(Trading Volume: units)(Investment Unit Price: yen)

Trading Volume

90,000TSE REIT Index

Investment Unit Price of SHR

200,000

180,000
85,000160,000
80,000140,000
75,000120,000

70,000100,000

80,00065,00060,00060,00040,00055,00020,00050,000

0

Dec.

Mar.

2014 2015

Jun.

Sep.

Dec.
2016

Mar.

Jun.

Sep.

Dec.
2017

Mar.

Jun.

Sep.

Dec.
2018

Mar.

Jun.

Sep.

Dec.

Mar.

Jun.

2019
Source: Tokyo Stock Exchange

Note 1: As a two-for-one split of investment units was implemented on May 1, 2018, investment units have been traded at one-second (the ex-rights) unit price on and after April 25, 2018. In consideration of the impact of the split, the above graph is basedon actual figures of “Investment Unit Price” for April 24, 2018 and earlier being divided by two and actual figures of “Trading Volume” for April 24, 2018 being multiplied by two.
Note 2: For easier comparison with change in price of SHR, change in TSE REIT Index is converted by setting the closing price of TSE REIT Index on SHR’s listing date (December 3, 2014) as 66,000 yen, which is an amount obtained after applying adjustment for
the two-for-one split to the closing price of regular trading of SHR investment unit as of the same day. “TSE REIT Index” refers to the weighted average-type index of market capitalization of all REIT counters.

56

Appendix

Overview of Asset Management Company■ Overview of Asset Management Company■ Asset Management Fee

Corporate nameSekisui House Asset Management, Ltd.

Head office

4-15-1 Akasaka, Minato-ku, Tokyo

Capital

400 million yen

Number of Employees

56 (As of the date of this document)

Shareholder

Sekisui House, Ltd. (100%)
Licensed for building lots and buildings transaction business
License No.(2) 96411 issued by the Governor of Tokyo

Licenses and registration,
etc.

President &Representative Director

Certified as an entrustment-based agency
License No.82 issued by the Minister of Land, Infrastructure,
Transportation and Tourism
Registered as a financial instruments business operator
Registration (Kinsho) No.2791 issued by the Director of
Kanto Local Finance Bureau

Junichi Inoue■ Organization Chart

Management Fee I(linked to total assets)
Management Fee II(linked to performance)
Management Fee III(acquisition fees)
Management Fee IV(disposition fees)
Management Fee V(merger fees)A
General Meeting of
Shareholders

Value of Real Estate-Related Assets held by counter party×0.4%

A

B

Investment
Committee

C

Note 1: Currently a total of two members are selected as the external committee members including one real estate appraiser and one
attorney, who have no significant stakeholder relationship with the asset management company, the asset managementcompany’s officers and employees, nor its related parties.

Compliance
Committee

B

Compliance
OfficerInternal Control
Promotion
Department

Note 2: Currently one attorney has been selected as an external committee member who has no significant relationship with the asset
management company, the asset management company’s officers and employees, nor its related parties.

C
Real Estate Division

Real EstateManagement
No. 2 Dept.

Real EstateManagement
No. 3 Dept.

An organ that deliberates and makes decisions on matters related to compliance in asset
management

Compliance committee
It is comprised of the Compliance Officer (chairman) and all full-time Directors including the President &Representative Director, in addition to the external committee members2. While the selection and dismissal of
external committee members is conducted at the asset management company’s Board of Directors Meeting,the approval of SHR’s board of directors’ meeting is required either before or afterwards.

President &Representative
Director

Business Strategy
Department

An organ that deliberates and makes decisions on matters related to management policy andother asset management issues

Investment committee
It is comprised of the President & Representative Director (committee head) and all full-time Directors
including the Compliance Officer, who has the status as a Director, General Manager of Real Estate Division,
Chief Manager of Financial Department, Chief Manager of Investor Relations Department, Chief Manager of
Accounting Department, and Chief Manager of General Affairs Department and external committee members1.
While the selection and dismissal of the external committee members is conducted at the asset managementcompany’s Board of Directors Meeting, the approval of the SHR’s board of directors’ meeting is required either
before or afterwards.

Board of Directors

Real EstateManagement
No. 1 Dept.

Acquisition price × 0.3%
(Transactions with related parties: None)
Sale price × 0.3%
(Transactions with related parties: None)

Note 1: With regard to rates, applicable rates or expected rates are stated.
Note 2: Calculated as the distributable amount before deduction of Management Fee II divided by the total number
of issued investment units.
Note 3: Operating Income before deduction of Management Fee II.

Auditors

Real Estate
Investment
No. 2 Dept.

(DPU2× Operating income3×0.002%) x 2 (split ratio)■ Compliance Structure

The organization chart and administrative organs related tocompliance of the asset management company are as below.

Real Estate
Investment
No. 1 Dept.

Total assets × 0.15%

Organization responsible for compliance

Compliance officer
Person responsible for the compliance of SHR and the asset management company in addition to theintegration of the operations of Internal Control Promotion Department. Personnel with sufficient screening andsurveillance capabilities are selected to observe compliance with legislation and norms.

Real Estate
Accounting
Department

Engineering
Management
Department

Finance
Department

Investor
Relations
Department

Accounting
Department

GeneralAffairs
Department

Internal Control Promotion Department
Internal Control Promotion Department conducts work related to the asset management company’s risk
management, work related to monitoring the status of legislation and regulations, and work related to internal
auditing.

57

⚫

This document is provided for information purposes only and is not a solicitation for investment, nor a recommendation to enter into
specific transactions. Please contact your securities companies to purchase the investment units of SHR. We caution readers toundertake investment decisions of their own volition.

⚫

This document is not a disclosure document or a report under the Financial Instruments and Exchange Act, the Act on Investment
Trusts and Investment Corporations, public listing regulations of the Tokyo Stock Exchange or other related laws and regulations.

⚫

Strategies, goals and forward-looking statements contained herein are based on specific assumptions and judgments made as ofthe date of the document in accordance with information available to SHR at the time. Information herein is subject to impact fromrisks, uncertainties, assumptions and other factors. Accordingly, strategies, goals and forward-looking statements do not guarantee
SHR’s future performance, operating results or financial position. Actual results may differ significantly from explicit or implicit
statements made herein regarding future performance, operating results, financial position or other conditions.

⚫

While SHR has taken due care in the preparation of this document, it does not guarantee the accuracy, completeness, rationality or
fairness of its content. Readers are also cautioned that the contents of this document are subject to change or removal without priornotice.

⚫

Duplication and reproduction of the content contained herein without prior consent is prohibited.

⚫

The material containing the information required under Article 23(1) and (2) of the AIFMD is available at http://sekisuihousereit.co.jp/en/ir/library.html

Asset Management Company: Sekisui House Asset Management, Ltd.
Registered by the Director of Kanto Local Finance Bureau, as a Financial
Instruments Business Operator Registration (Kinsho) No. 2791.
Member of the Investment Trusts Association, Japan59