Fiscal Results Briefing
8th Fiscal Period Ended October 31, 2018
The

8th
Fiscal Period

Presentation Material
May 1, 2018
to
October 31, 2018

December 17, 2018

<Notes for This Document>
Effective May 1, 2018, Sekisui House REIT, Inc. merged with Sekisui House Residential Investment Corporation.
Throughout this document, Sekisui House REIT, Inc. will be abbreviated as “SHR” while Sekisui House Residential Investment Corporation may be referred to
as “SHI.”In addition, with the merger, SHR has taken on the properties (residential and retail properties) of SHI, the dissolved company in the absorption-type merger,
and there are sections in this document where the operating results, etc., prior to the merger with SHI are recorded.
In this document, “22nd Fiscal Period Ended September 2016,” “23rd Fiscal Period Ended March 2017,” 24th Fiscal Period Ended September 2017,” and “25thFiscal Period Ended April 2018” refer to the calculation period of the four fiscal periods directly prior to the merger with SHI.
Moreover, for the most recent fiscal period, “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.

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

Contents
Summary
Executive Summary

1.

2.

3.

4.

5.

Appendix•••3

Overview of Portfolio

Balance Sheet

•••

31

Statement of Income and Retained Earnings

•••

32

(Reference)SHI’s Financial Statements for the 25th Fiscal Period

•••

33

Overview of Portfolio•••

7

Overview of Financial Results for Fiscal Period Ended October 2018 (8th FP)

•••

34

Diversification Status of Portfolio•••

8

Financial Forecast for Fiscal Period Ending April 2019 (9th FP) and Fiscal PeriodEnding October 2019 (10th FP)

•••

35

Change in NAV and Distribution Per Unit

•••

36

Sale of Hamamatsu Plaza (retail properties, etc.)

•••

37

Acquisition of Esty Maison Kokura (residence)

•••

38

Asset Replacement after the Merger

•••

39

Portfolio Map

•••

40

List of Portfolio

•••

41

Portfolio Development Policy

•••

43

Continuous Investment in Prime Properties

•••

44

Estimated Value at the End of Period

•••

45

Overview of Interest-Bearing Liabilities

•••

49

Unitholders Composition

•••

53

Changes in Unit Price (December 3, 2014 – November 30, 2018)

•••

54

Overview of Asset Management Company

•••

55

Operating Results of the 8th Fiscal Period
Change in Occupancy Ratios

•••

10

Occupancy Status of Residential Properties

•••

11

Rent Trends of Residential Properties (1)

•••

12

Rent Trends of Residential Properties (2)

•••

13

Rent Trends of Office Buildings and Hotel (1)

•••

14

Rent Trends of Office Buildings and Hotel (2)

•••

15

Results and Forecast of NOI and NOI Yield by Use

•••

16

Financial Results Beyond the 8th Fiscal Period
Financial Results

•••

18

Initiatives towards Issuance of Green Bonds

•••

19

Future Growth Strategy

•••

21

Current Operating Policy

•••

22

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

•••

23

ESG Initiatives (Acquisition of External Certifications)

•••

25

ESG Initiatives (Environment, Social)

•••

26

ESG Initiatives (Governance Structure)

•••

27

ESG Initiatives of Sekisui House

•••

28

Growth Strategy

ESG Initiatives

Executive Summary
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.

Current AUM(aggregate acquisition price)439.1 billion yen
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

Residences 54.3%
Office buildings 41.8%
Hotel 3.9%
Current Portfolio(area)(76.6%) and Commercial Properties located in major
metropolitan areas (100%); Greater Tokyo, the Osaka area andthe Nagoya area (acquisition price basis).

Tokyo, Osaka & Nagoya
94.8%

 Investing in Prime Properties featuring “strategic locations” andNAV per unit
(as of end of 8th FP)“high quality”.
Characteristic 3

Current Portfolio (asset type) Strong relationships with major domestic financial institutions.

75,517 yen

LTV(as of end of 8th FP)

43.3%
Note1: Money amounts less than the indicated figures are rounded down and percentage figures are rounded to the nearest first decimal place otherwise indicated in this document. The same shall apply hereinafter.
Note2: The figures are as of December 14, 2018.

3

Executive Summary
Profile of Sekisui House Reit, Inc.
Corporate Profile
Trade name
Asset management company
SponsorOwned Assets
Aggregate acquisition price
Number of properties

Distributions
Fiscal period ends
Actual for 8th fiscal period
Forecast for 9th fiscal period
Forecast for 10th fiscal period

Financial information
Total interest-bearing liabilities
Unitholders’ capital
Number of investment units
issued and outstanding
Long-term issuer rating

Sekisui House Reit, Inc. (securities code: 3309)
Sekisui House Asset Management, Ltd.
Sekisui House, Ltd.
＜Major Owned Assets＞
JPY 59.6 bil JPY 51.5 bil JPY 55.8 bil JPY 8.6 bil JPY 8.2 bil/OSAKA/TOKYO/TOKYO/TOKYO/TOKYOJPY 7.9 bil/TOKYO

JPY 439.1 bil
113 properties

1,554

April and October of each year
JPY 1,554 per unit
JPY 1,537 per unit
JPY 1,532 per unit

1,355

1,331

1,537

1,532

1,352

5th FP DPU 6th FP DPU 7th FP DPU 8th FP DPU 9th FP DPU 10th FP DPU(forecast)(actual)(actual)(actual)(forecast)(actual)Highlight

JPY 197.9 bil
JPY 110.1 bil
3,762,091 units
AA- (positive) [JCR]■Around a 30.7-fold expansion of asset size from the time of IPO■Achieved the target of 400 billion yen in asset size in around 4 years since IPO
500 (billion yen)around 4 years
439.1
bil

250
0

Seek 600 bil

114.3 bil

IPO

after the Merger

Note: The figures are as of December 14, 2018.

4

Executive Summary
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 July 31, 2018)[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 : 2,403,963 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 2017, Sekisui House Reit Inc. merged with Sekisui House Residential
Investment Corporation 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 Sekisui House Quality globally based on the environmental technologies
cultivated in Japan.

 Sekisui House’s Consolidated Financial Statements FY2017(Feb/17-Jan/18)
Net Sales

2,159.3

 Commitment of properties by Sekisui House Group to its
sponsored J-REITs (as of December 14, 2018)
Collaboration with our J-REIT platform within Sekisui House’s Development Businesshas become significantly more important.

Asset Type
Office(2007-2018)

Residential(2010-2018)

Total(2007-2018)

Number of Properties (Note)

OthersTotal Assets

2,419.0 billion yen

Net Sales

2,159.3 billion yen

Operating Income

195.5 billion yen

Net Income

133.2 billion yen

Transaction Price

8 properties

235.0 billion yen

61 properties

128.9 billion yen

63 properties

363.9 billion yen

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

(billion yen)

75.1
643.4
Development Businessand overseas business
626.7
Supplied Housing
Business
814.0

Built-to Order Business51. Overview of Portfolio

1. Overview of Portfolio

Overview of Portfolio
Asset size

Number of properties

Total

439.1 billion yen

113 properties

Average acquisition price

Forecast NOI yield (9th forecast)Acquisition fromthird-parties

Acquisition from Sekisui House Group

307.4 billion yen (70.0%)

50 properties

Asset size

per property

4.4%
After depreciation 3.4%

Ratio of prime properties

Portfolio PML value

89.8%

1.83%

(86 properties)(As of survey in October 2018)

3.8 billion yen

Before depreciation¥439.1 billion

54.3%

113 properties

291.2 billion yen

40 properties(Average acquisition price per property: 7.2 billion yen )45.7%
Commercial
properties

Sekiwa Real Estate Companies

16.2 billion yen

10 properties(Average acquisition price per property: 1.6 billion yen )Diversification status
by useDiversification status
by area

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

Hotel(1 property)

Nagoya area
(10 properties)

3.9%

41.8
%
Office building(6 properties)

Sekisui House

Residential
properties

Residence(107 properties)

Asset size

439.1
billion yen

54.3
%

22.7
%
Osaka area
(12 properties)

Others(13 properties)

5.2%
5.3%
Three Major
Metropolitan
Areas Note 2

94.8%

15 or more years(6 properties)

4.4%

Greater Tokyo(78 properties)

66.9%

10 or more to less than
15 years(62 properties)

29.5%

Under 5 years(13 properties)

10.6%

Averagebuilding age

9.2 years 55.4 5 or more to%less than 10
years(32 properties)

Note 1: Unless otherwise mentioned, information is recorded as of the date of this document.
Note 2: The “Three Major Metropolitan Areas” are Greater Tokyo, Osaka Area and Nagoya Area (here and hereinafter). “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 (here and hereinafter).
Note 3: In calculating “Diversification status by use age” “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” “Diversification status byarea” and “Diversification status by building age.”
Note 4: As ratios are rounded to the first decimal place, there are cases when the total ratio does not reach 100% (here and hereinafter).

7

1. Overview of Portfolio

Diversification Status of Portfolio
Averageacquisition price

Forecast NOI yield

107 properties

2.2 billion yen

Before depreciation 4.6%
After depreciation 3.4%

81.2% (80 properties)

6 properties

33.4 billion yen

Before depreciation 4.1%
After depreciation 3.4%

100.0% (all properties)

Asset size

Number of properties

Residential properties(residence)

Total 238.4
billion yen

Commercial properties(Office building, hotel)

Total 200.7
billion yen(acquisition price basis)(acquisition price basis)

Greater Tokyo(76 properties)

17.7%
Average
Building Age

10.3

90.4%

years
10 or more toless than 15 years(62 properties)

Osaka area
(3 properties)

100.0%

54.4%

And within

19.7
10 minutes% (34 properties)

More than
5 minutes
And within
10 minutes(3 properties)

Average
Building Age

7.9
Greater Tokyo(2 properties)

6.8%

93.2 %
33.6%

積和不動産各社

97.8
%

years
5 or more toless than 10 years(5 properties)

50 m² toless than 100 m²(2,328 units)
30 m² toless than 50 m²(2,411 units)More than 3 minutes
and within 5 minutes(31 properties)

58.5
%

24.2
%
Average49.9
area per unit%

38.4 m²
25.0%(acquisition price basis)

50,000 m² or more
(1 property)

3.2%
Within 3 minutes

41.5 (3 properties)
Within%10-minute walk

100.0 %

Less than 30 m²(4,806 units)

0.9%

Less than 10,000 m²(1 property)

Under 5 years(1 property)

2.2%

55.3
%

(based on the number of leasable residential units)

100 m² or more
Within 3 minutes(85 units)(32 properties)

35.8
More than 23.8%
Within
5 minutes % 10-minute walk

5 or more toless than 10 years(27 properties)

Nagoya area
(1 property)

3.2%
41.5 Three Major% Metropolitan
Areas

More than
10 minutes(10 properties)

Ratio of prime properties

Diversification status byfloor area Note 1, Note 2(acquisition price basis) Note 1

8.2%

9.6%
7.0%

Commercial properties

Diversification status
by time to nearest station by walking

Under 5 years(12 properties)

15 or more years(6 properties)

6.8% Three Major 76.6
Metropolitan %Osaka area
Areas

(9 properties)

per property

Diversification status
by building age

Others (13 properties)
Nagoya area
(9 properties)

per property

Diversification status
by area

Residential properties(9th FP forecast)

10,000 m² toless than
30,000 m²(2 properties)

27.8
%

Total
29.7
floor area%
30,000 m² or
more

69.0 %
39.3%

30,000 m² toless than 50,000 m²(2 properties)

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 and not as separatebuildings.
Note 2: “Diversification status by floor area” of commercial properties, etc. is based on the floor area stated in the registry for the entire building and the ratio is calculated based on the acquisition price.

8

2. Operating Results of the 8th Fiscal
Period

2. Operating Results of the 8th Fiscal Period

Changes in Occupancy Ratios■ Change in Occupancy Ratios by Month█ Office building█ Hotel█ Residence█ Retail Properties, etc.

100.0%

99.9%

Total of properties owned by SHI

100.0%

100.0%

Total of properties owned by SHR

97.9%

98.4%

97.9%

100%

97.8%

95%

97.4%

97.5%

3月 End Apr.
4月
of 7th FP

May
5月
Merger

97.1%

97.7%

98.3%

90%

85%

80%

75%

Oct.
10月
End of
4th FP
(SHR)

Nov.
11月

Dec.
12月

Jan.
1月
2017
2017年

Feb.

2月

Mar.
3月
End of23rd FP
(SHI)

Apr.
4月
End of
5th FP
(SHR)

May

5月

Jun.

Jul.

6月

7月

Aug.

8月

Sep.
9月
End of24th FP
(SHI)

Oct.
10月
End of
6th FP
(SHR)

Nov.
11月

Dec.
12月

Jan.
1月
2018
2018年

Feb.

2月

Mar.

Jun.

6月

Jul.

7月

Aug.

8月

Sep.

9月 End Oct.
10月
of 8th FP(SHR)
End of 25th FP
(SHI)

(SHR)

■ Occupancy Ratios by Use

Residential Properties

Commercial Properties

FP ended Apr. 2017 / FP ended Mar. 2017
(5th FP / 23rd FP)

FP ended Oct. 2017 / FP ended Sep. 2017
(6th FP / 24th FP)

As of
the end of
the FPAs of
the end of
the FP

Averageduring the FP

HighestAverageduring the FP

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

Averageduring the FP(End of Sep.)(End of Mar.)FP ended Oct. 2018
(8th FP)
HighestAs ofthe end of
the FP

Averageduring the FP(End of Mar.)Highest(End of Oct.)

Residence

97.7%

97.0%

97.7%

97.0%

96.8%

97.0%

97.2%

97.2%

97.8%

97.9%

97.3%

97.9%

Office building

100.0%

99.97%

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%

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%

100.0%

100.0%－

100.0%

100.0%

98.4%

97.9%

98.4%

Hotel
Retail property,
etc.

Entire portfolio

Note 1: The occupancy ratio in the above graph records the ratio of the aggregate leased area of the aggregate leasable area of operating assets that belong to the use for SHR and SHI as of the end of each month from October 2016 to October 2018.
Note 2: “Average during the FP” for each period in the above table’s occupancy ratio indicates the average value of occupancy ratio as of the end of each month that belongs to each period. In addition, “Highest” shows both the highest occupancy ratio
and the relevant date for each month that belongs to each period.
Note 3: Excluding the occupancy ratio of office buildings for the fiscal period ended April 2017 (5th FP), the values above are rounded to the first decimal place.

102. Operating Results of the 8th Fiscal Period

Occupancy Status of Residential Properties■ Occupancy Ratios for Residences by Investment Area
Greater Tokyo

Major Cities Nationwide
Total

23 wards of
Tokyo
FP ended Sep. 2017(24th FP)FP ended Apr. 2018
(25th FP)FP ended Oct. 2018
(8th FP)

NagoyaOsaka

Fukuoka

SapporoAs of the end of the FP

96.9%

96.9%

97.1%

95.0%

96.3%

98.7%

95.4%

97.0%

Average during the FP

96.6%

96.5%

97.0%

95.4%

96.4%

98.2%

95.2%

96.8%

As of the end of the FP

96.9%

96.7%

97.7%

96.4%

96.0%

99.1%

96.6%

97.2%

Average during the FP

97.0%

97.0%

97.4%

95.6%

95.5%

98.9%

97.2%

97.2%

As of the end of the FP

97.6%

97.5%

98.3%

97.4%

96.8%

99.1%

97.8%

97.9%

Average during the FP

96.8%

96.7%

97.9%

96.7%

96.0%

98.9%

97.6%

97.3%

■ Monthly Trends in Occupancy Ratios for Residences by Investment Area Note 1
Greater Tokyo

23 wards of Tokyo

Major Cities Nationwide

Entire residence

100%

97.7%

98.3%

97.1%

98.2%

96.9%

97.7%

97.9%

97.2%

97.0%

97.2%

97.6%

96.9%

97.0%

96.9%

97.5%

96.7%

95%

FP ended Sep. 2017 (24th FP)
Period-average occupancy ratio Note 2 96.8%

FP ended Apr. 2018 (25th FP)(7-month) Period-average occupancy ratio Note 2

FP ended Oct. 2018 (8th FP)
Period-average occupancy ratio Note 2 97.3%

97.2%

90%
End of Mar.
2017

End of Jun.

End of Sep.
2017

End of Dec.

End of Apr.
2018

End of Jul.

End of Oct.
2018

Note 1: “Occupancy ratio” is the ratio of the aggregate leased area of the aggregate leasable area at the end of each month broken down by investment area, based on residential properties owned as of the end of each month. The value above arerounded to the first decimal place.
Note 2: “Period-average occupancy ratio” is the average occupancy ratio for the end of each month within each period.

11

2. Operating Results of the 8th FP

Rent Trends of Residential Properties (1)■ Rent Trends in New Contracts■ Rent Trends in Contract Renewals

FP ended Sep.
2016 (22nd FP)

FP ended Mar.
2017 (23rd FP)

FP ended Sep.
2017 (24th FP)

FP ended Apr.
2018 (25th FP)

FP ended Oct.
2018 (8th FP)

No. of new contracts

885

944

880

1,030

859

Newly contracted rents(monthly rent) Note 1¥106,261¥112,843¥108,775¥122,367¥115,316

thousandthousandthousandthousandThousand¥1,472¥1,871¥1,913¥2,204¥1,541

thousandthousandthousandthousandthousand(327)-¥1,150(391)-¥1,220

(450)
-¥873

(522)

(480)

-¥1,336-¥789

thousandthousandthousandthousandthousand

Total increase
in rent(number of cases)
Total decrease
in rent(number of cases)(213)

Change in rent (net)(number of cases)

Rate of change
in rent against
previous rent Note 2

(184)

(159)

¥321

¥650

¥1,040¥868¥751

thousandthousandthousandthousandthousand

0.3%

0.6%

█ Increased rent contract ratio

1.0%█ No rent change contract ratio

(212)

0.7%

(129 )

19.5%

18.1%

FP ended Apr.
2018 (25th FP)

FP ended Oct.
2018 (8th FP)

No. of contract renewals

1,135

1,251

1,127

1,860

1,127

Renewed contracted rents(monthly rent) Note 1¥140,653¥150,085¥137,240¥214,506¥146,256

thousandthousandthousandthousandthousand

¥91

¥124

¥216

¥293

¥183

thousandthousandthousandthousandthousand

(29)
-¥17

(75)
-¥15

(69)

(145)

(82)

thousandthousand

( 4)

( 2)

(-)

-¥63

Total increase
in rent(number of cases)
Total decrease
in rent(number of cases)
Change in rent (net)(number of cases)

20.6%

39.0%

39.1%

28.7%

36.9%
22nd
FP
SHI
第22期

41.4%
23rd FP
第23期

¥74

¥109

¥216

¥230

¥183

thousandthousandthousandthousand

0.1%

0.1%

0.2%

0.1%

█ No rent change contract ratio

0.1%█ Decreased rent contract ratio

97.1%

0.4%
93.8%

0.2%

0.3%

93.9%

91.9%

92.7%

29.1%

51.1%
24th FP
第24期

25%

50.7%
25th FP
第25期

0%8th第8期FP
SHR
SHR

No. of new contracts

Change in rent (net)

682
618
64
177
859

¥692 thousand¥619 thousand¥73 thousand¥59 thousand¥751 thousand

6.0%

2.6%

55.9%

22nd
FP
SHI
第22期

23rd
FP
第23期

6.1%
24th FP
第24期

7.3%

7.8%
25th FP
第25期

SHI■ Rent Trends in New Contracts by Investment Area
Greater Tokyo
23 wards of Tokyo
OthersMajor Cities Nationwide
Total

( 5)

50%

SHI

FP ended Oct. 2018 (8th FP)

(-)

100%

15.0%

75%

30.8%

-

thousandthousand█ Increased rent contract ratio

25%
0%

FP ended Sep.
2017 (24th FP)█ Decreased rent contract ratio

75%
50%

FP ended Mar.
2017 (23rd FP)

Rate of change
in rent against
previous rent Note 2

0.7%

100%

24.1%

FP ended Sep.
2016 (22nd FP)

8th第8期FP
SHR
SHR■ Rent Trends in Contract Renewals by Investment Area
Rate of change in rent
Note 2

0.7%
0.7%
1.2%
0.3%
0.7%

FP ended Oct. 2018 (8th FP) No. of contract renewals
Greater Tokyo
23 wards of Tokyo
OthersMajor Cities Nationwide
Total

834
726
108
293
1,127

Change in rent (net)¥180 thousand¥160 thousand¥20 thousand¥3 thousand¥183 thousand

Rate of change in rent
Note 2

0.2%
0.2%
0.2%
0.0%
0.1%

Note 1: “Newly contracted rents (monthly rent)” and “Renewed contract rents (monthly rent)” are the total of monthly rents when contracts are newly conclude or renewed in each period, including common service fees.
Note 2: “Rate of change in rent against previous rent” and “Rate of change in rent” are the ratio of the total change in rent (net) for each fiscal period for new or renewed contracts against the total of previous rent, and both ratios are rounded to the firstdecimal place.

122. Operating Results of the 8th Fiscal Period

Rent Trends of Residential Properties (2)■ Trends in Rent for Occupied Space by Investment Area
Based on 100 residential properties owned as of the end of the 8th FP upon succeeding them due to the merger

Residences owned as of the end of the
8th FP (based on 106 properties)

End of FP ended October 2018(end of 8th FP)
Period-end unit rent per tsubo

End of FP ended April 2018(end of 25th FP)
Period-end unit rent per tsubo

End of FP ended October 2018(end of 8th FP)
Period-end unit rent per tsubo

Greater Tokyo¥13,240 per tsubo¥13,254 per tsubo

+¥14

+0.1%

¥13,346 per tsubo

23 Wards of Tokyo¥13,621 per tsubo¥13,639 per tsubo

+¥18

+0.1%

¥13,659 per tsubo

Others¥10,920 per tsubo¥10,909 per tsubo

-¥11

-0.1%

¥10,909 per tsubo

Major Cities Nationwide¥7,081 per tsubo¥7,089 per tsubo

+¥8

+0.1%

¥7,089 per tsubo

Total¥11,148 per tsubo¥11,159 per tsubo

+¥11

+0.1%

¥11,512 per tsubo

Amount of change in unit rent per tsubo/
rate of change in unit rent per tsubo(against the end of 25th FP)

Note: The rent and the floor area of shops and offices in residential properties, as well as the rent and the floor area of residential properties in which fixed-rent type master lease agreements have been concluded are not included in calculating the above
figures.

■ Changes in Key Money Acquisition Rate100%

■ Changes in Renewal Rate

Key money acquisition rate maintained a level of above

50%

100%

86.2%

66.3%
50%

54.2%

57.5%

59.2%

Renewal rate continuously maintained a level of above

55.3%

0%

84.5%

85.3%

23rd FP
第23期

24th FP
第24期

80%

87.2%

85.0%

25th FP
第25期

8th第8期
FP
SHR

75%

50%
22nd
FP
SHI
第22期
SHI

23rd
FP
第23期

24th
FP
第24期

25th FP
第25期

8th第8期
FP
SHR
SHR

22nd
FP
SHI
第22期
SHI

SHR

13

2. Operating Results of the 8th Fiscal Period

Rent Trends of Office Buildings and Hotel (1)With operations keying in stability centered around fixed-rent type master lease agreements, office buildings andhotel continue operations at an occupancy rate of 100% from the previous period.
■ Status of Lease Agreements of Portfolio Properties Note 1
Property Name

HommachiMinami GC

GC Shinagawa Gotenyama

Hommachi GC

Gotenyama
SH Building

HK Yodoyabashi
GA

Hirokoji GA-

Photo of Properties

Fixed-Rent Type
Master Lease

Lease Type

Contract Period

Period-end Contract
Unit Rent per Tsubo

Entire portfolio

Portion originally Portion additionally Portion additionallyacquiredacquiredacquiredDec. 2014
May 2016
May 2017
tototoDec. 2019
Dec. 2019
Dec. 2019¥23,250
per tsubo¥23,250
per tsubo¥23,250
per tsubo

Direct Lease

Pass-Through Type
Master Lease-

Dec. 2014
toDec. 2019

Office building
portionMay 2015
toMay 2020

HotelportionMay 2017
to
May 2020

Mar. 2011
toFeb. 2031

May 2016
to
May 2019

May 2016
to
May 2019-¥19,360
per tsubo¥29,280
per tsubo¥12,257
per tsubo¥30,000
per tsubo¥16,164
per tsubo¥23,557
per tsubo¥22,739
per tsubo■ Diversification of Lease Types (based on leased floor area) Note 2
Rent of Leases with Fixed Rent

92.0%
92.0% of leased floor area practicallyhas fixed-rent (including DL)■ Fixed-rent type ML (office building)■ Fixed-rent type ML (hotel)■ Direct lease (DL) Since being listed on the Tokyo Stock Exchange, there has been anawareness towards the issue of portfolio diversification, and in order todiminish risk regarding tenant agreement annulments, fixed-rent typemaster lease agreements have been widely utilized.

 Although the diversification of the portfolio progressed to a certain levelwith the merger, continued efforts will be made to diversify it by increasing
the number of office buildings and hotel properties.

■ Pass-through type ML

Note 1: Garden City may be abbreviated as “GC,” while Garden Avenue may be abbreviated as “GA” (here and hereinafter).
Note 2: The ratio of the leased floor area for each lease type under the relevant lease agreements (or, if a master lease agreement is concluded for the property, the master lease agreement), in respect of the properties, that are valid as of the date ofthis document, to the total sum of the leased floor areas indicated in such lease agreements is indicated, rounded to the first decimal place. In addition, master lease may be abbreviated as “ML,” while direct lease may be abbreviated as “DL” here
and here in after.

14

2. Operating Results of the 8th Fiscal Period

Rent Trends of Office Buildings and Hotel (2)■ Income-Linked Rent at Hommachi Garden City (hotel portion)
Income-linked rent generated as rent business revenue
from the fiscal period ended November 2018
to the fiscal period ending October 2019 (9th FP and 10th FP)<Reference: ＜参考
Change in
Number of Foreign Tourists to Osaka Prefecture>
大阪府の外国人旅行者数の推移＞
There was a year-on-yearincrease of 18% in 2017at 11.1 million people(million)
1,50015<How income-linked rent work> This property uses fixed-rent type master lease agreementsthat includes income linked rents as a portion of the fixed rent
 If the lessee, who is the master lessee, obtains income
exceeding a certain amount, a rent linked to the income(income linked rent) occurs

500 5

7.16
2.63

3.76

00
2013
2014
2015
2016
2017
Source: Compiled by the asset management company with data from the Osaka Prefectural
Government’s “Tourism Statistics Survey, Number of Foreign Tourists to Osaka”<Reference: Occupancy
Rate of Accommodation Facilities by Area in Japan>＜参考 国内エリア別宿泊施設の稼働率＞(%)
Osaka Prefecture’s occupancy rate remains stable100

ML company (lessee):Sekisui House (sponsor)

With a strong inbound demand in the background, the lessee,
who is the master lessee (Sekisui House), obtained income
exceeding a certain amountEnd tenant (hotel brand):The St. Regis Osaka<Topics>
On November 5, 2018, Wajo, a teppanyaki
restaurant, opened

11.10

9.40

1,00010

80

76.2

81.0

78.8

83.3

84.8

82.4
Osaka
Tokyo

82.6

78.8

80.0

59.7

60.5

60

40

In addition to securing stable cashflow, internal growth wasrealized through income-linked rent

81.1

Nationwide

55.2

57.4

60.3

2013
2014
2015
2016
2017
Source: Compiled by the asset management company with data from Japan Tourism Agency’s“Statistical Survey on Tourism with Lodging”■ Change in Period-end Contracted Unit Rent per Tsubo and Rent Business Revenue for Pass-through Properties<HK Yodoyabashi Garden Avenue><Hirokoji Garden Avenue>

Period-end contracted unit rent per tsubo(left axis/polygonal line graph)

Rent business revenue(right axis/bar graph)(yen)
16,175
16,164

16,15016,139137

16,164

139

16,164139

Period-end contracted unit rent per tsubo(left axis/polygonal line graph)

Rent business revenue(right axis/bar graph)(yen)(million yen)160

24,000120

22,00080

20,00023,36323,557(million yen)200

16,164139

18,0000

16,00020,733

170

171

150

19,497141

40

20,426

190

194

100
50

120
16,1250

FP ended2016年10月期
Oct.
2016
（第4期）

FP ended2017年4月期
Apr.
2017
（第5期）

FP ended2017年10月期
Oct.
2017
（第6期）

FP ended2018年4月期
Apr. 2018（第7期）

FP ended2018年10月期
Oct. 2018（第8期）

FP ended2016年10月期
Oct. 2016（第4期）

FP ended2017年4月期
Apr. 2017（第5期）

FP ended2017年10月期
Oct. 2017（第6期）

FP ended2018年4月期
Apr. 2018（第7期）

FP ended2018年10月期
Oct. 2018（第8期）(4th FP)(5th FP)(6th FP)(7th FP)(8th FP)(4th FP)(5th FP)(6th FP)(7th FP)(8th FP)15

2. Operating Results of the 8th Fiscal Period

Results and Forecast of NOI and NOI Yield by Use
Residence

FP ended October 2018
(8th FP)FP ended October 2018
(8th FP)

ChangeForecast (A)Results (B)(B) - (A)FP ending April 2019
(9th FP)
Forecast

FP ending October 2019
(10th FP)
Forecast

7,370 million yen

7,399 million yen+29 million yen

7,458 million yen

7,381 million yen

NOI / NOI Yield

5,435 million yen / 4.6%

5,499 million yen / 4.6%

+63 million yen

5,490 million yen / 4.6%

5,401 million yen / 4.5%

NOI after depreciation /NOI yield after depreciation

4,023 million yen / 3.4%

4,093 million yen / 3.4%

+69 million yen

4,065 million yen / 3.4%

3,954 million yen / 3.3%

96.6%

97.3%

+0.7pt

97.2%

96.4%

Operating revenue

Period-average occupancy ratio

Office buildings

FP ended October 2018
(8th FP)FP ended October 2018
(8th FP)

ChangeForecast (A)Results (B)(B) - (A)FP ending April 2019
(9th FP)
Forecast

FP ending October 2019
(10th FP)
Forecast

4,262 million yen

4,264 million yen+2 million yen

4,257 million yen

4,263 million yen

NOI / NOI Yield

3,795 million yen / 4.1%

3,813 million yen / 4.2%

+17 million yen

3,779 million yen / 4.1%

3,785 million yen / 4.1%

NOI after depreciation /NOI yield after depreciation

3,132 million yen / 3.4%

3,150 million yen / 3.4%

+18 million yen

3,114 million yen / 3.4%

3,119 million yen / 3.4%

100.0%

100.0%-

100.0%

100.0%

Operating revenue

Period-average occupancy ratio

Hotel

FP ended October 2018
(8th FP)FP ended October 2018
(8th FP)

ChangeForecast (A)Results (B)(B) - (A)FP ending April 2019
(9th FP)
Forecast

FP ending October 2019
(10th FP)
Forecast

402 million yen

402 million yen-

404 million yen

404 million yen

NOI / NOI Yield

334 million yen / 3.9%337 million yen / 3.9%

+2 million yen

326 million yen / 3.8%

338 million yen/ 3.9%

NOI after depreciation /NOI yield after depreciation

264 million yen / 3.1%

267 million yen / 3.1%

+2 million yen

256 million yen / 3.0%

268 million yen/ 3.1%

100.0%

100.0%-

100.0%

100.0%

Operating revenue

Period-average occupancy ratio

Total

FP ended October 2018
(8th FP)FP ended October 2018
(8th FP)

ChangeForecast Note 1 (A)Results Note 1 (B)(B) - (A)FP ending April 2019
(9th FP)
Forecast

FP ending October 2019
(10th FP)
Forecast

12,136 million yen

12,174 million yen+37 million yen

12,120 million yen

12,050 million yen

NOI / NOI Yield

9,637 million yen / 4.4%

9,729 million yen / 4.4%

+91 million yen

9,596 million yen / 4.4%

9,526 million yen / 4.3%

NOI after depreciation /NOI yield after depreciation

7,488 million yen / 3.4%

7,586 million yen / 3.4%

+98 million yen

7,436 million yen / 3.4%

7,342 million yen / 3.3%

97.5%

97.9%

+0.4pt

97.8%

97.2%

Operating revenue

Period-average occupancy ratio

Note 1: “Total” for “Fiscal period ended October 2018 (8th FP) forecast” and “Fiscal period ended October 2018 (8th FP) results” include figures for Hamamatsu Plaza (retail properties, etc.) which was sold during the 8th FP. However, “Results andForecast of NOI and NOI Yield by Use” does not include retail properties, etc.) , so the total will not add up when adding NOI by each use.
Note 2: The above forecast is calculated based on certain presumptions as of the date of this document, and real values can change based on future additional acquisitions or disposition of real estate, changes in real estate market, etc., and changes in
the operating environment and other situations that surround SHR, etc. Moreover, the forecasts do not guarantee actual results.

16

3. Financial Results
Beyond the 8th Fiscal Period

3. Financial Results Beyond the 8th Fiscal Period

Financial Results■ Financial Indices(as of the end of the fiscal period ended October 2018 (8th FP))
Total assets LTV

Total interest-bearing
liabilities

Long-term debt ratio

43.3%¥197.9 billion

100.0%

Average number ofyears spent financing

Fixed interest rate
debt ratio

Average financing
interest rate

6.9 years

93.7%

0.77%

■ Current Period Financial Activities
In the fiscal period ended October 2018 (8th FP) the improvement of the fixed interest rate debt
ratio was promoted while long-term debt ratio was maintained at 100% (May 31, 2018) A bridge loan (short term, floating) taken out on May 1, 2018 for property acquisition was refinanced and made longterm with fixed interest rates.

Before refinancing (at new loan)
Loan total:Interest rate:
Borrowing period:

After refinancing¥8.0 billion
Fixed(Average financing interest rate: 0.763%)
Approx. 9.3 years¥8.0 billion
Floating (Base rate +0.180%)
1 year (August 31, 2018) Reduction in interest rates through refinancing existing loans■ Credit Rating Information

After refinancing

Before refinancing

Rating agency

Long-term issuer rating

Japan Credit Rating Agency, Ltd.
(JCR)

AA- (Positive)

Loan total:Interest rate:
Borrowing period:¥2.5 billion
Floating (Base rate +0.170%)
3 years¥2.5 billion
Floating (Base rate +0.400%)
5 years

 (October 31, 2018) Hedge against the risk of rising interest rates within the remaining loan period through interest rate swap
agreements on existing loans■ Status of Commitment Line Agreement
Financial Institution

Contract Period

Maximum Commitment
Line AmountMUFG Bank, Ltd.
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking Corporation

November 1, 2018
to
October 31, 2019

Increased from 10 billion yen to
15 billion yen

After interest rate swap agreement

Relevant loans
Loan total:Interest rate:
Borrowing period:¥4.75 billion
Floating (Base rate +0.425%)
Approx. 7.9 years

Stabilized interest rates at 0.638%(relevant period: approximately 5.3 years)■ Status of Diversification of Repayment Dates (as of the end of the fiscal period ended October 2018 (8th FP))■ Loans with fixed interest rate
■ Loans with floating interest rate
■ Investment corporation bond(billion yen)
Refinanced on August 31, 2018

300
30
250
25

2.0

20
200
15
150

2.5

10
100

4.0

50
5
0

26.83

8.38
2.5

3.0

3.0

20.79
16.9
7.1

A short-term loan scheduled to
repay during the fiscal period
ending April 2019 was repaid
before maturity on May 31, 2018with refinancing it by a long-term
loan

October 31, 2018
Stabilized with interest rate swap
agreements

4.05

8.0

4.75
2.5
1.86
4.4

12.4

11.1

12.4

11.1
7.09

3.0
1.9

6.12

7.6

2.0

8.0

3.15

FP ended
FP ending
FP ending
FP ending
FP ending
FP ending
FP ending
FP ending 2022/10期
FP ending
FP ending 2023/10期
FP ending
FP ending 2024/10期
FP ending
FP ending 2025/10期
FP ending
FP ending 2026/10期
FP ending 2027/4期
FP ending 2027/10期
FP ending
2018/10期
2019/4期
2019/10期
2020/4期
2020/10期
2021/4期
2021/10期
2022/4期
2023/4期
2024/4期
2025/4期
2026/4期
Oct. 31, 2018 Apr. 30, 2019 Oct. 31, 2019 Apr. 30, 2020 Oct. 31, 2020 Apr. 30, 2021 Oct. 31, 2021 Apr. 30, 2022 Oct. 31, 2022 Apr. 30, 2023 Oct. 31, 2023 Apr. 30, 2024 Oct. 31, 2024 Apr. 30, 2025 Oct. 31, 2025 Apr. 30, 2026 Oct. 31, 2026 Apr. 30, 2027 Oct. 31, 2027

18

3. Financial Results Beyond the 8th Fiscal Period

Initiatives towards Issuance of Green Bonds
Purpose of issuing green bonds Note 1

 Further promotion of asset management considering ESG
 Strengthening capital procurement base through expanding investors who have an interest in ESG investment■ Intended Use of Green Bond Funds■ Eligibility of Green Bonds

For acquisition of Eligible Green Projects, refinancing loans and redemption of investment corporation
bonds<What are Eligible Green Projects?>

Properties which have been evaluated and selected by the asset management company’ssustainability committee which involves President & Representative Director and all executives, that
also hold or will acquire third-party certification of any of the following.
1.
2.

3, 4, or 5 stars from DBJ Green Building Certification
A or S Rank from CASBEE Real Estate Certification

SHR’s Eligible Green Projects
 48 of owned 133 properties(① DBJ Green Building Certification: 48 properties ② CASBEE Real Estate Certification: yet to be acquired)

5 Stars

3 Stars

from DBJ Green Building Certificationfrom DBJ Green Building Certification¥68.6 billion(32 properties)¥61.2 billion(2 properties)

 A Green Bond Framework was drawn up under the Green Bond Principles, etc.,
of International Capital Market Association (ICMA) The balance and procured funds, etc., from green bond issuances will be
managed based on the Green Bond Framework
 Scheduled disclosure of quantitative indices for green eligible assets (quantity ofelectricity consumption, quantity of water consumption, and quantity of CO2
emissions) and relevant status of procured funds based on Green Bond
Framework at the end of March, annually Obtained a second-party opinion for the eligibility of the Green Bond
Framework from Sustainalytics, an international ESG evaluationcompany Met the Green Bond Principles 2018 published by ICMA and Japan’sGreen Bond Guidelines, 2017
 Of the four criteria in the Green Bond Principles, aligned with marketbest practices in terms of the Process for Project Evaluation and
Selection and Reporting disclosure.

Eligible Green
Projects
48 properties¥243.0 billion Note 2

4 Stars
from DBJ Green Building Certification¥113.0 billion(14 properties)

 Approved to the 2018 Financial Support Programme for Green Bond
Issuance Note 3 by the Ministry of Environment
 For the costs associated with obtaining a second opinion
on the above Green Bond Framework, subsidy
considerations will be madeNote 1: Green bonds are bonds issued by companies, funds and municipalities, etc., to procure funds for green projects (environmental consideration-type investment and lending projects), and are generally issued under the Green Bond Principles
declared by ICMA. SHR submitted amendment of shelf registration statement towards green bond issuance on December 14, 2018.
Note 2: In calculating the acquisition price of Eligible Green Projects, the assets succeeded from SHI due to the merger with SHI effective May 1, 2018, the acquisition price is the acquisition price at the time SHI acquired the property (when a partial sale,etc., occurred after, it will reflect the relevant sale, etc.).
Note 3: The Financial Support Programme for Green Bond Issuance, presupposes that green bonds are issued within three years upon the decision of subsidy, and when an issuance supporter registered with Ministry of Environment’s Green Bond
Issuance Promotion Platform conducts issuance support operations, such as external revues, etc., the costs are provided to the relevant issuance supporter as subsidies to help costs.

19

4. Growth Strategy

4. Growth Strategy

Future Growth Strategy
Aim to maximize investor value by realizing growth while focusing on stability by maximizing strong sponsor support

Strategic goals

Aim to maintain stable and high-quality portfolio while aiming to expanding assets to 600 billion yen

Target achievement period

Considering the status of real estate and financial markets, a target achievement period will not be established and a stance of selective investments will
be maintained
Continue focused investments in prime properties rooted in “strategic location” and “high-quality”

Investment strategy

Asset size
Seek

¥600 billion
New SHR

Investment ratio target by use uponachieving asset size of
600.0 billion yen Note

¥439.1 billion
SHR

SHI

¥200.7 billion¥206.9 billion
MergerFP ended Apr. 2018
(7th FP)FP ended Apr. 2018
(25th FP)As of the date of this document(9th FP)

Target asset size

(Reference)
Investment ratio by use as ofthe date of this document

Residence

About 45%

54.3%

Office building

About 45%

41.8%

Hotel

About 10%

3.9%

Retail properties,
etc.

About 0 to10%－%

Note: See page 43 for details on Portfolio Development Policy.

■ Basic Ideas on Fund Procurement Methods•

Funds needed to expand asset scale will be procured with the optimum method considering distribution levels, NAV levels per unit, LTV levels, and the situation and environment at the time.

•

When conducting public offerings, consider the points listed above and focus on whether it would contribute to or detract from the improvement of investor value to appropriately makedecisions.
 Current environment recognition
The real estate market has further heated and cap rates continue to decline. It is recognized that the environment requires evenmore caution regarding the timing of selecting relevant investment targets and public offerings.

Highest priority matters inconsidering public offerings

With improving investor value as the highest priority, the “Asset Size: Seek ¥600 billion” for the “Medium-term asset size target” onpage 23 of the Presentation Materials of the fiscal period ended April 2018 (7th FP), remains the asset size target despite no
intent for early accomplishment.

Improving investor value
21

4. Growth Strategy

Current Operating Policy
Aim for the early accomplishment of distribution per unit on the 1,600-yen level•

Fiscal period ending April 2019 (9th FP) Distribution per unit forecast: up 4.1% or more from 1,537 yen•

Fiscal period ending October 2019 (10th FP) Distribution per unit forecast: up 4.4% or more from 1,532 yen

Intention to raise distribution levels■ Important Points in Accomplishing Distribution Targets


Property acquisition utilizing gain on sale of Hamamatsu Plaza
Steady external growth utilizing room for borrowing

Internal growthProactively raise rent prices centering on residential properties to improve profitability

FinancialstrategyDiversify fund procurement methods and reduce interest rate costs through refinancing
Improve credit rating “AA- (positive)” received from JCR

External growth[reference] Impact of consumption tax hike in and after
fiscal period ending April 2020 (11th FP)<Expected cost increases due to consumption tax hike>Per period 27 million yen (estimate)
Per unit approximately 7 yen per period(calculated based on the number of investment units issued and outstanding as of thedate of this document)■ LTV Control Principles•

Upper limit goal of around 45% was changed to around 50% for total-asset-basis LTV.

•

Cruising level goal for total-asset-basis LTV set at the middle of the 40% level, maintaining a
conservative policy for LTV control.

(Reason for change)

Room for borrowing based on total asset basis LTVApprox. ¥61.7 billion(Total asset basis LTV up to 50% which is target of upper limit goal)

Aiming to agilely secure acquisition opportunities of good properties within the heating real estate market
by continuing conservative LTV control and improving the flexibility of funds procurement methods.

■ Cash Management Policy•

Depending on the investment unit price of SHR, it may be recognized that utilizing surplus funds to acquire it’s own investment units is an effective method in terms ofcapital policy.

•

Make considerations agilely and flexibly for various measures to improve investor value such as the maintenance and improvement of portfolio profits andimprovements of an index per unit.

Note: There are no specific plans to acquire SHR’s investment unit as of the date of this document.

22

4. Growth Strategy

Increase of Varied Enhancement Opportunities by Utilizing the Integrated Corporate
Strength of the Sekisui House Group
Support from Sekisui House Group for External Growth Enhancing Growth Potential■ Sekisui House Group Business Strategies■ Property Transaction Results with Sekisui House GroupThe development business of the Sekisui House Group promotes the creation of quality
communities through environment creation-oriented development and stable growth byincreasing the asset turnover ratio.
• Custom detached houses• Rental housing• Remodeling• Real estate
management fees

Trip Base business

Built-to-OrderBusiness

Acquisitions
Use

Number of Properties/
Acquisition (planned) price

Use

Number of Properties/
Assignment (planned) price

Office Buildings,
Hotels6 properties / ¥200.7 billion

Retail Property

1 property / ¥10.8 billion
1 property / ¥0.7 billion

Residence Note1

44 properties / ¥95.4 billion

Residence

Total

50 properties / ¥296.1 billion

Total

Residential• Australia market• China market• U.S. market• Singapore market

Supplied
Development
Housing
Business
Business
Overseas
Business• Houses for sale
• Condominiums• Urban redevelopment

Sales

2 properties / ¥11.6 billion■ Prime Maison Planned and Developed by Sekisui House Note 2
Completed Properties

Properties Under
Construction Note 3

4 properties / 636 units

7 properties / 615 units

Planned Properties
Note 4

Source: Sekisui House■ Office Buildings Developed by Sekisui House for Which SHR
Has Preferential Negotiation Rights Note 2
Property Name

Location

Unacquired Floor Area Ratio Note 5

Garden City Shinagawa Gotenyama

Shinagawa-ku, Tokyo

19.0%

Hommachi Minami Garden City

Osaka-shi, Osaka

4 properties(All in 23 wards of Tokyo)
Prime Maison
Mita Tsunamachi(Minato-ku, Tokyo)

43.6%

Prime Maison
Egotanomori(Nakani-ku, Tokyo)

Prime Maison
Prime Maison
Prime Maison
Prime Maison
MeguroHongo
Nakameguro
Ryogoku(Meguro-ku, Tokyo) (Bunkyo-ku, Tokyo) (Meguro-ku, Tokyo) (Sumida-ku, Tokyo)■ Main Projects in Sekisui House’s Urban Redevelopment Business Note 2, Note 6
1993

2006

2010

Umeda Sky Building(Shinumeda City)

Akasaka
Garden City

Hommachi
Garden City
(Acquired property)

2011

Garden City
Shinagawa
Gotenyama(Acquired Property) Note 7

Gotenyama SH
Building(Acquired Property)

Hommachi
Hirokoji
Minami
Garden Avenue
Garden City
(Acquired Property)(Acquired Property) Note 7

2013

Grand Front Osaka

The Ritz-Carlton,
Kyoto

2015

HK Yodoyabashi
Garden Avenue(Acquired Property)

Main Future Projects

Otemon Tower (Provisional name) Note 3,Note 4 (Provisional name) Note 3,Note 4
JX Building
Akasaka 5-chome PJ
Minato Mirai 44 block plan

Note 1: As to acquisition prices of residential properties, SHI’s acquisition prices are indicated for those acquired by SHI and SHR’s acquisition prices are indicated for those acquired by SHR.
Note 2: As of the date of this document, there are no specific acquisition plans for the properties indicated as “Prime Maison Planned and Developed by Sekisui House”,” Office Buildings Developed by Sekisui House for which SHR has Preferential Negotiating
Rights” or “Main Projects in Sekisui House’s Urban Redevelopment Business”.
Note 3: The figures labeled “Properties under construction” and “Main future projects” are conceptual drawings created based on the drawing and specifications, and could differ from reality.
Note 4: Projects currently under consideration by Sekisui House; subject to change or cancellation without notice.
Note 5: The “unacquired floor area ratio” is the ratio of the unacquired floor area for which SHR has preferential negotiating rights to the total exclusive-use floor area of the building.
Note 6: The indicated properties include joint ventures with other companies and properties that have been sold.
Note 7: SHR has acquired a portion and has preferential negotiating rights for the remaining portion.

23

5. ESG Initiatives

5. ESG Initiatives

ESG Initiatives (Acquisition of External Certification)■ Acquisition of GRESB Assessment
 Acquired Green Star, the highest ranking, for the second year in a row during the 2018 GRESB real estate assessment.
 Gained GRESB membership in June 2018 as an asset management company (4th asset management company as a J-REIT).

<Evaluations acquired in 2018>GRESB assessment

Green StarGRESB rating★★★★
B

GRESB Public Disclosure
Health and Wellbeing Module

ParticipatedResilience Module

Participated■ Acquisition of DBJ Green Building Certification
 Received new certification for 16 residential properties for a total of 48 properties, or 58.6% of the portfolio (based on gross floor area).
 All certifications for the 48 properties are 3 Stars or above, and the total number of starsNote is top among J-REITs.

<Properties that acquired certification in June 2018>
4 stars
Total

3 properties<Properties that acquired certification in October 2018>

Prime Maison Shirokanedai Tower
Prime Maison Daikanyama
Prime Maison Gotenyama West
3 stars
Total

Prime Maison Higashisakura
Prime Maison Gokiso
Prime Maison Yuhigaoka
Prime Maison Kitatanabe
Prime Maison Yadaminami

Certification status as of the date of this document(based on gross floor area)

Prime Maison Waseda
Prime Maison Hachobori
Prime Maison Jimbocho
Prime Maison Fujimidai
Prime Maison Morishita

10 properties

5 stars
Total 2 properties

8.5%
Not yet acquired certification

41.4%
3 stars
Total

3 properties

Prime Maison Otsuka
Prime Maison Asakusabashi
Esty Maison Toyosu Residence

Properties that haveacquired certification

4 stars

Total 48 properties

21.9%

Total 14 properties

58.6%
3 stars
Total 32 properties

28.2%
Note: Total number of stars (162 stars) is calculated based on the total evaluation of properties that acquired certification (1-5 rating).

25

5. ESG Initiatives

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

Replacement of lights for common areas with LED
lighting in residential properties

Promotion of energy-saving of air conditioners for
exclusive areas in residential properties

Solar power generation panels

Garden City Shinagawa Gotenyama

Low-e double-glazed windows

Hommachi Minami Garden City

Prime Maison Gotenyama WestLED lighting

Conducted at 4 properties during the 8th FP

Installed 169 units during the 8th FP

Implemented at a total of 43 properties

Replaced a total of 932 A/C units

Electricity consumption

Electricity consumption

Expected total annual reduction of around 1,189,083 kwh Note

Expected total annual reduction of around 207,836 kwh Note

Greenhouse gas emissions

Greenhouse gas emissions

Expected total annual reduction of around 602 t-CO2 Note

Expected total annual reduction of around 96.0 t-CO2 Note

Contributing to Regions and Communities

Comfort and Safety Measures

HK Yodoyabashi Garden Avenue

Biodiversity Activities
Large-scale mixed-use developments by Sekisui House“Gotenyama Project”

Disaster-relief vending machines

Installing automated external defibrillators(AED)

Prime Maison Ginza East, etc.

Prime Maison Yokohama Nihon-odori, etc.

Concert held in entrance hall

Implementation of share cycle

Emergency electricity supply unit

24-hour disaster prevention center

Garden City Shinagawa Gotenyama

Garden City Shinagawa Gotenyama

Installing emergency cabinets forelevators

Distribution of stockpiled emergency
supplies to tenants

Prime Maison Gotenyama East, etc.

Esty Maison Ojima, etc.

“Gotenyama Project” was highly evaluated because it creates large scale green
land that contributes to nature regeneration in the area, receiving “The Minister ofLand, Infrastructure, Transport and Tourism Prize” the highest-ranked award at
the 11th “Competition for Rooftops, Wall Facings and New Green Spaces
Organizer.”“Gotenyama Project” is comprised of Garden City Shinagawa Gotenyama,
Gotenyama SH Building, Prime Maison Gotenyama East, and Prime Maison
Gotenyama West.

Hommachi Garden City

Garden City Shinagawa Gotenyama

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

26

5. ESG Initiatives

ESG Initiatives (Governance Structure)■ Decision-making Process
Compliance Officer/
Internal Control
Promotion Department

Ideas created ateach departments

Compliance Committee

Investment Committee

ReturnRejection

Board of Directors

When transactingwith related parties,
etc.

Rejection

Rejection

Approval at board of
directors’ meeting of theinvestment corporation

Rejection

Checked by organization responsible for compliance

Checked by external expert

Checked by the Investment Corporation’s Supervisory
Officers• The Internal Control Promotion Department conducts
preliminary reviews on items to be discussed prior to all
meetings, under the command of the Compliance Officer• As an external member, external experts are selected to thecommittee for investment decisions and compliance, andchecks are placed on decision-making etc., for transactions
from the experts’ perspective• Transactions with related parties require approval from theboard of directors’ meeting which is comprised of theInvestment Corporation’s Executive Director and Supervisory
Officers■ Standards for Transacting with Related parties
Type of transactions

Transaction standards

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 relevant assets such as real estate. Acquire third party opinions on whether
conditions are fair when needed.

Placing an order to related parties for construction, etc., which exceeds the amount
below

Compare and consider the estimated value indicated a third party and the details, etc., of service rendering, and approve when not costly to theinvestment corporation.

Residential properties: 5 million yen
Commercial properties, etc.: 30 million yen■ 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 tocontrol such risks and develop risk management plan.

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

②
4. Consider improvements to methods of risk control if needed, and continue initiatives todecrease risks.

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

27

5. ESG Initiatives

ESG initiatives of Sekisui House
Corporate Philosophy<Development of Philosophy and Value Creation><CSR management based on the Four key values and 13 Guidelines>

Sekisui House defined “a sustainable society” in 2005 as the vision toaspire under the corporate philosophy of “a love of humanity,”
announcing its vision to achieve balanced management based on four
values—environmental, economic, social and homeowner. Moreover, 13
guidelines were established based on the four key values .

The Four key values and 13 Guidelines contain the international establishment of“sustainability,” and is part of a plan that aims to contribute to accomplishing theSDGs, the Sustainable Development Goals, which are the shared goals ofinternational society, through creating living environments.

<A leading company of ESG management>
Sekisui House has announced its 2050 Vision, which targets zero CO2 emissions from residences,and having established a long-term vision for 2050, it has also displayed its medium-term initiatives
with an outlook for 2030.
In addition, it has also announced its vision to become an leading company for ESG management as
part of its long-term vision for BEYOND 2020.

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

Source: Sekisui House “Sustainability Report 2018”

Environmental management

Social improvement

Lead the world with zero-energy housing, contribute to the world
with RE100 initiative

Make diversity a driver of growth

Ｅ

Ｓ
Ｇ

Ｅ

Ｓ
Ｇ

Ｅ

Simultaneously selected by Switzerland’s RebecoSAM as“Gold Class” and “Industry Mover” in the housing
construction category of RobecoSAM Sustainability Award
2018.

Selected by U.S. S&P Dow Jones Indices and Swiss
RobecoSAM for inclusion in the Dow Jones Sustainability
World Index (DJSI World), as an “Industry Leader,” and forinclusion in the Dow Jones Sustainability Asia PacificIndex.
Obtained the first certification of “SBT（Science Based
Targets） Initiative” in Japan in the residential industry
concerning CO2 reduction.

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 participation of
women. (The only company that was selected five times in
the residential and construction industry).

Ｇ

Introduction of retirement system at the age of 70 for the
President and Representative Director.

Ｇ

Appointment of outside female executives.

Ｓ

Declared “Hello Papa Paid Leave” of paternal leave of one
month or more, encouraging complete paid childcare leave
for one month with full pay.

Ｇ

Transparency and revitalization of operation of theBoard of Directors.

Ｇ

Establishment of management meeting.

Ｓ

Start up “residential life research facility” that researches“happiness,” the first such facility in Japan.

Ｇ

Clarification of the divisions of directors.

Ｇ

Evaluation of effectiveness of the Board of Directors.

Ｓ

Ｅ

Ｓ
Ｇ

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

28

MEMO

Appendix

Appendix

Balance Sheet(unit: thousand yen)
7th Fiscal Period
April 30, 2018

8th Fiscal Period
October 31, 2018

7th Fiscal Period
April 30, 2018

Assets

8th Fiscal Period
October 31, 2018

Liabilities

Current assets
Cash and deposits

2,607,767

9,230,651

Current liabilities
Operating accounts payable

Cash and deposits in trust

7,005,235

12,859,502

Current portion of investment corporation bonds

18,804

145,522

Current portion of long-term loans payable

96,381

154,213

Accounts payable – other

133

5,114

Accrued expenses

91,512

195,311--499

Income taxes payable

1,048

590

9,728,322

22,394,506

318,392

200,653
311,576

Operating accounts receivable
Prepaid expenses
Other
Allowance for doubtful accounts
Total current assets

Accrued consumption taxes

143,489

640,450-

2,500,000-

12,382,000

414,997623,167

Non-current assets

Advances received-

Property, plant and equipment
Buildings in trust

Derivative debt-

15,009Other

0201,664

969,440

17,070,424

59,654,248

154,045,698

Accumulated depreciation-4,121,631-6,157,456

Buildings in trust, net

55,532,616

147,888,242

Structures in trust

684,357

1,483,975

Accumulated depreciation
Structures in trust, net-61,803-91,713

Total current liabilities

Non-current liabilities
Investment corporation bonds

5,000,000

13,000,000

Long-term loans payable

79,400,000

170,050,500

9,269,955

10,964,384-

511,956

622,554

1,392,261

Tenant leasehold and security deposits in trust

Machinery and equipment in trust921

2,093,637

Accumulated depreciation-93-45,276

Derivative debt
Other

Machinery and equipment in trust, net

827

2,048,361

Tools, furniture and fixtures in trust

3,053

59,994

Accumulated depreciation-638-3,391Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Total property, plant and equipment

2,414

56,602

141,218,283

279,918,555-

43,344

197,376,695

431,347,368-

2,526,599

Other

2,412

8,346

Total intangible assets

2,412

2,534,946

Investments and other assets

Capital surplus

7,403,117

112,810,796

246,190,826

Deferred hedging gain/loss--526,965

Total of valuation and translation adjustments--526,965

Total net assets

112,810,796

245,663,860

Total liabilities and net assets

207,450,193

457,588,497

Valuation and translation adjustments

267,1141,253,331

197,646,222

435,135,646

Investment corporation bond issuance costs
Investment unit issuance costs

32,12529,205

43,52329,139Total deferred assets

75,64858,344

207,450,193

457,588,497

Total non-current assets

128,598,415
136,001,532

Total unitholders’ equity

Total investments and other assets

2,621,502

279,284-

110,189,294

Total surplus
800,700

173,347

110,189,294

2,621,502

20,181-

211,924,636

Unappropriated retained earnings

246,911
21

94,639,396

Surplus

Long-term prepaid expenses
Other

194,854,211

Unitholders’ equity

Lease and guarantee deposits
Deferred tax assets

327,370

93,669,955

Net assets
Unitholders’ capital

Intangible assets
Leasehold rights in trust

Total non-current liabilities
Total liabilities-

Deferred assets

Total assets

Note: 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.

31

Appendix

Statement of Income and Retained Earnings(unit: thousand yen)
7th Fiscal Period
From November 1, 2017 to April 30, 2018

Operating revenue
Rent revenue - real estate
Other lease business revenue

8th Fiscal Period
From May 1, 2018 to October 31, 2018

4,629,845

11,913,550

25,742

252,879

Gain on sales of real estate properties

-

8,114

Total operating revenue
Operating expenses
Expenses related to rent business
Asset management fee
Asset custody fee
Administrative service fees
Directors’ compensations

4,655,588

12,174,544

1,223,022

4,579,453

370,434

517,151

Merger-related expenses
Provision of allowance for doubtful accounts

Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Reversal of distributions payable
Consumption tax refund
Interest on refund
Other

Total non-operating income
Non-operating expenses
Interest expenses
Interest expenses on investment corporation bond
Borrowing related expenses
Amortization of investment unit issuance costs
Amortization of investment corporation bond issuance costs
Other
Total non-operating expenses
Ordinary Income

3,786

8,486

12,732

49,959

3,600

3,600

-

941,174-324

47,548280,439

1,661,123

6,380,588

2,994,464

5,793,955

39

98

-

1,716

-

49,862

1,442

-

-

143

1,482

51,820296,306

599,481

6,959

51,21852,322

67,576

14,384

14,384

2,919

2,919

537

734

373,430

736,3142,622,516

5,109,461

Gain on negative goodwill-

2,293,923

Extraordinary income total-

2,293,923

2,622,516

7,403,385

1,054

605

Extraordinary income

Income before income taxes
Income taxes – current
Income taxes – deferred
Total income taxes
Net income
Retained earnings brought forward
Unappropriated retained earnings

-14

21

1,039

626

2,621,476

7,402,759

26

357

2,621,502

7,403,117

Note: 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.

32

Appendix(Reference) SHI’s Financial Statement for the 25th Fiscal Period■ Balance Sheet■ Statement of Income and Retained Earnings(unit: thousand yen)
25th Fiscal Period
April 30, 2018

Assets25th Fiscal Period
From October 1, 2017
to April 30, 2018

Liabilities

Current assets
Cash and deposits

5,882,205

Current liabilities
Operating accounts payable

Cash and deposits in trust

5,511,714

Current portion of investment corporation bonds

2,500,000

120,088

Current portion of long-term loans payable

14,882,000

197,009

Accounts payable – other611,873

Accrued expenses

102,291

Operating accounts receivable
Prepaid expenses
Deferred tax assets
Other
Allowance for doubtful accounts
Total current assets

81

Operating revenue
277,859

80,583

Income taxes payable

2,124-1,882

Accrued consumption taxes

9,905

11,789,799

Non-current assets

Advances received
Other

238,795

Total current liabilities

18,630,554

5,704

Property, plant and equipment
Buildings in trust

106,936,616

Non-current liabilities

Accumulated depreciation-19,540,950

Investment corporation bonds

8,000,000

Buildings in trust, net

87,395,666

Long-term loans payable

80,150,500
1,877,018

Structures in trust

987,605

Tenant leasehold and security deposits in trust

Accumulated depreciation
Structures in trust, net-300,730

Total non-current liabilities
Total liabilities

Machinery and equipment in trust

2,031,290

Accumulated depreciation-763,676

Machinery and equipment in trust, net

1,267,613

686,875

Tools, furniture and fixtures in trust

402,779

Accumulated depreciation-147,961

Tools, furniture and fixtures in trust, net

254,817

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

107,828,487
128,908
197,562,369

Other
Total intangible assets

90,027,518
108,658,073

139,591
83
139,675

Rent revenue - real estate

8,174,332

Total operating revenue

8,174,332

Operating expenses
Expenses related to rent business

3,885,818

Asset management fee

426,954

Asset custody fee

19,273Administrative service fees

43,110

Directors’ compensations

4,200

Merger-related expenses

129,226

Provision of allowance for doubtful accounts

212

Other operating expenses

221,863

Total operating expenses
Operating income

4,730,658
3,443,674

Non-operating income
Interest income

49

Reversal of distributions payable

747

Other
Total non-operating income

2799

Non-operating expenses

Net assets
Unitholders’ equity
Unitholders’ capital

98,633,978SurplusReserve for reduction entry

Interest expenses

436,750

Interest expenses on investment corporation bonds
Amortization of investment corporation bondissuance costs
Borrowing related expenses

61,123

Amortization of investment unit issuance costs

10,040Other

Voluntary retained earnings

Intangible assets
Leasehold rights in trust(unit: thousand yen)

25th Fiscal Period
April 30, 2018

214,718

Total non-operating expenses

214,718

7,945
84,919138
600,917

Ordinary Income

2,843,555

Unappropriated retained earnings

2,841,576

Income before income taxes

2,843,555

Total surplus

3,056,295

Income taxes – current

Total voluntary retained earnings

2,132

Investments and other assets
Lease and guarantee deposits

242,662

Total unitholders’ equity

101,690,274

Income taxes – deferredLong-term prepaid expenses

386,883

Total net assets

101,690,274

Total income taxes

Other

166,741

Net income

796,287

Retained earnings brought forward

148

198,498,332

Unappropriated retained earnings

2,841,576

Total investments and other assets
Total non-current assets

-4
2,127
2,841,427

Deferred assets
Investment corporation bond issuance costs
Investment unit issuance costs
Total deferred assets
Total assets

36,743
23,47260,215
210,348,347

Total liabilities and net assets

210,348,347

33

Appendix

Overview of Financial Results for Fiscal Period Ended October 2018 (8th FP)■ Comparison Between Forecast (announced June 15, 2018) and Actual Results of 8th Fiscal Period(million yen)
FP ended October 2018
(8th FP) forecast

FP ended October 2018
(8th FP) results

Operating revenue

12,136

12,174+37

Operating income

5,570

5,793

+223

Ordinary income

4,878

5,109

+230

Extraordinary income(Gain on negative goodwill)

2,300

2,293

-6

Net income

7,178

7,402

+224

(million yen)
Main causes of differences between
forecast and results of 8th FP

ChangeAmount affecting income and total distribution

Operating income and expenses-1,418-1,556-138

Total distribution

5,759

5,846

+86

1,531 yen

1,554 yen

+23 yen (+1.5%)+109

The anticipated loss on sale of ¥100 million at
the time of the sale of Hamamatsu Plaza did
not occur, and ¥8 million in gain on sale wasobtained instead of loss on sale.
• Increase in property-related operating income

Reserve for temporary
difference adjustment(RTA)

Distribution per unit

• Increased profit on real estate sales/lack ofloss on sale

Residential properties+69

Commercial properties, etc.

+28

• Decrease in SG&A
(Selling, general and administrative expenses)

+98

+16

Non-operating income and expenses

NOI

9,637

9,729

+91

NOI Yield

4.4%

4.4% Note 1

0pt

NOI after depreciation

7,488

7,586

+98

NOI yield after depreciation

3.4%

3.4% Note 1

0pt

Period-averageoccupancy rate

97.5%

97.9%

+0.4ptNote 1: Yield is calculated by dividing the annualized actual NOI amounts of the fiscal period ended October 2018 (8th FP) by the total acquisition price of
operating assets.
In addition, actual depreciation for the same period is used for calculating NOI yield after depreciation (here and hereinafter).
Note 2: Amounts of less than the indicated unit are rounded down, and percentages are rounded to the first decimal place.

• Increase in non-operating income• Decrease in non-operating expenses+1+6

Extraordinary income• Decrease in gain on negative goodwill
coinciding with closing accounts-6

Increase of reserve for temporary difference
adjustment• Because the expected loss on sale of realestate did not occur when Hamamatsu Plaza
was sold-94• Because there was decline in the amount of
discrepancies between accounting andtaxation purposes other than gain on negative
goodwill-50
34

Appendix

Financial Forecast for Fiscal Period Ending April 2019 (9th FP) andFiscal Period Ending October 2019 (10th FP)■ Comparison of the Results of the 8th FP and Forecast of the 9th FP, Comparison of the Forecasts for the 9th FP and the 10th FP(million yen)
Fiscal period ending April 2019 (9th FP)
Current forecast Note 1

Fiscal period ending October 2019 (10th FP)

Comparison withresults of 8th FP

Current forecast Note 1

Comparison with
forecast of 9th FP

Operating revenue

12,120-54

12,050-69

Operating income

6,353

+559

6,267

-86

Ordinary income

5,624

+515

5,538

-86

-

-2,293

-

-

5,624

-1,778

5,537-86

Extraordinary income(Gains on negative goodwill)
Net income

Amount affecting income

Operating income and expenses• Absence of gain on sale-8

• Decrease in property-related operating income-150

Absence of property-related operating income from
Hamamatsu Plaza-75
Residential properties-27
Commercial properties, etc.
(excluding Hamamatsu Plaza)-46• Decrease in SG&A

+718

Non-operating income and expenses

Reserve for temporary
difference adjustment
(RTA)

158

Total distribution amount

5,782

-63

5,763

-18

1,537 yen

-17 yen (-1.1%)

1,532 yen

-5 yen (-0.3%)

Distribution per unit

(million yen)
Main causes of differences between
results of the 8th FP and forecast of 9th FP+1,715225+67• Decrease in non-operating income-21• Increase in non-operating expenses-23

Main causes of differences between
forecast of 9th FP and 10th FP
Amount affecting income

Operating income and expenses

9,596

-132

9,526

-70

4.4% Note 20pt

4.3% Note 2-0.1pt

7,436

-150

7,342

-94

NOI yield after depreciation

3.4% Note 20pt

3.3% Note 2-0.1ptPeriod-averageoccupancy rate

97.8%

-0.1pt97.2%-0.6ptNOINOI Yield
NOI after depreciation

Note 1: For the current forecasts for the fiscal period ending April 2019 (9th FP) and the fiscal period ending October 2019 (10th FP), the period-end total
asset LTV premised around the same as the results of the fiscal period ended October 2018 (8th FP) at 43.3%, and the total number of investment
units issued and outstanding premised at 3,762,091, the number issued as of the date of this document.
Note 2: Yield is calculated by dividing the annualized forecasted NOI amounts of the fiscal period ending April 2019 (9th FP) and the fiscal period ending
October 2019 by total acquisition price of operating assets. In addition, forecasted depreciation for each period is used for calculating NOI yield after
depreciation (here and hereinafter)• Decline in property-related operating income
Residential properties-111

Commercial properties, etc.

+16

-94

• Decrease in SG&A

+7

Non-operating income and expenses• Increase in non-operating income+14• Increase in non-operating expenses-14[Reference]
Comparison to previous 9th FP forecast (announced June 15, 2018)

Previous 9th FP forecast

Current 9th FP forecast

Distribution per unit:¥1,526 yen

Upwards revision of+¥11 yen

35

Appendix

Change in NAV and Distribution Per Unit
Aiming to achieve distribution per unit of the 1,600-yen level at an early stage as well as improving NAV per unit.
Before fiscal period ended April 2018
(7th FP)
2,000

1,800
1,600

¥57,805

1,400

1,229

1,200
1,000

¥62,765¥1,229¥66,515¥69,442¥71,444

After fiscal period ended October 2018
(8th FP)¥75,775¥74,929¥75,517
1,554

1,238

¥1,238NAV per unit Note

80,000Distribution per unit Note

70,000

1,537

1,532

1,298

1,331

1,355

1,352

60,000¥1,298¥1,331¥1,355¥1,35250,000¥1,554801¥1,537¥1,532

800
600

¥801

400

Beforeadjustment¥1,603200
0(1st FP)（第1期）

40,00030,000

Beforeadjustment¥2,458Beforeadjustment¥2,477

Beforeadjustment¥2,596

Beforeadjustment¥2,663

Beforeadjustment¥2,710

Beforeadjustment¥2,705(2nd FP)（第2期）(3rd FP)（第3期）(4th FP)（第4期）(5th FP)（第5期）(6th FP)（第6期）(7th FP)（第7期）

20,00010,000(8th FP)（第8期）(9th FP)（第9期）
Forecast(10th
FP)（第10期）
Forecast0

Note: 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. In addition, values before adjustment in the brackets in the above graph indicate the actual distribution per unit value before the split.
NAV per unit is calculated based on the total investment amount at the end of each period, the total investment surplus, and unrealized capital gains (= appraisal value at each period-end, etc. - book value), and are rounded down to the nearestunit.

■ State by Use for Period-end for Fiscal Period Ended October 2018 (8th FP)
Residences

Office buildings

HotelsEntire portfolio(Reference) as of May 1, 2018
Entire portfolio

Number of properties Note 1

106 properties

6 properties

1 property

112 properties

113 properties

Total appraisal value

242.4 billion yen

219.0 billion yen

17.7 billion yen

479.1 billion yen

476.0 billion yen

Unrealized capital gains Note 2

5.2 billion yen

39.4 billion yen

0.5 billion yen

45.3 billion yen

37.9 billion yen Note 4

2.2%

22.0%

3.2%

10.4% (+1.7pt) Note 5

8.7%

Unrealized capital gains ratio Note 3

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 the entire portfolio (hereand hereinafter).
Note 2: “Unrealized capital gains” are calculated by subtracting the book value from the appraisal value, etc., which are rounded down values of less than one unit.
Note 3: “Unrealized capital gains ratio” are calculated by dividing unrealized capital gains at each point by the book value, and are rounded to the nearest first decimal place.
Note 4: In calculating unrealized capital gains as of May 1, 2018, the total appraisal value for SHR’s operating assets and SHI’s succeeded assets (excluding the 12 properties transferred as of May 1, 2018) is as of the end of April 2018, and for the six
properties acquired as of May 1, 2018 is based on the appraisal value as of April 1, 2018. In addition, the expected book value as of June 15, 2018, when the previous financial results were published, is used for the six properties acquired as of
May 1, 2018.
Note5: The values inside the brackets for “entire portfolio” and “unrealized capital gains ratio” records the comparison between the “unrealized capital gains ratio” as of the end of the fiscal period ended October 2018 (8th FP) and the “unrealized capitalgains ratio” as of May 1, 2018.

36

Appendix

Sale of Hamamatsu Plaza (retail properties, etc.)
In accordance with the anticipated sale of Hamamatsu Plaza published in the previous financial results, the entire
building was sold together with the portion owned by Sekisui House in the 8th FP.
<Key points of the sale> With the sale of the entire Hamamatsu Plaza, upon renovation of the entire facility in cooperation with the sponsor, gain on sale was obtained given a sale at the price exceeding the appraisal
value was realized.

 With the sale of a suburban-type retail property, the quality of portfolio whose core assets are residences and office buildings improved, targeted prime property as important investments.
 The disposition price will be utilized towards various measures that will contribute to investor profits such as property acquisitions, etc.

Retail properties, etc.

All regions of Japan
excluding the threemajor metropolitan areas

Sale date

2,729 million yen<Ownership breakdown as of sale date>
Hamamatsu Plaza West

Undisclosed Note 2

Buyer

Note 1

Building age Note 1
18.0 years

1020-1 Kaminishi-cho, Higashi-ku, Hamamatsu-shi,
Shizuoka and others

Location

Appraisal value

Quasi-co-ownership
49%

Management Building
Hamamatsu Plaza Sports
Building (Zexis)(own only the
proprietary right of land)

October 29, 2018

Disposition priceBook value

Gain on sales

Note 3Note 32,799 million yen

2,727 million yen

8 million yen

8th FP forecast

8th FP results

Difference

Rent business profits

101 million yen

100 million yen-1 million yen

Rent business costs

33 million yen

24 million yen-9 million yen

Rent business income

68 million yen

75 million yen+7 million yen

Hamamatsu Plaza East

Hamamatsu Plaza Frespo
Building(own only the proprietary right ofland)

Akachan Honpo
Building

Xebio
Building

Costco gas station
UNIQLO/GU
Building
ABC Mart Building

Mont-bell Building(own only the proprietary right ofland)

CostcoHamamatsu Warehouse(own only the proprietary right ofland)(own only the proprietary right ofland)

Owned by Sekisui House
100%

Sekisui House’squasi-co-ownership
51%

SHR’s
quasi-co-ownership
49%

While the sale date was earlier than anticipated, the rent business income exceeded
expectations with the decrease in leasing costs
Note 1: “Building age” is recorded as the age of the building as of the sale date rounded to the nearest first decimal place. Moreover, “Appraisal value” is recorded based on the real estate appraisal value as of April 30, 2018.
Note 2: “Buyer” is undisclosed as the buyer’s consent has not been obtained.
Note 3: “Book value” is the price as of the sale date and “Gain on sale” is the price after deducting sale expenses, etc., each rounded down to the nearest million yen.

37

Appendix

Acquisition of Esty Maison Kokura (residence)
Utilizing an asset management company’s own route, a residential property was acquired from a third party, which islocated in Kokura, a central location of Kitakyushu City
Acquisition priceAppraisal value

1,040 million yen

1,050 million yen

Note 1

Residential properties

Major cities throughout
Japan

Note 2After depreciation

5.4%

3.9%

Does not fit the criteria
as a prime property Note 3

Location

4-2-5 Kyo-machi, Kokura Kita-ku, Kitakyushu-shi,
Fukuoka

SellerUndisclosed Note 4

Appraised NOI yield
Before depreciation

Building age Note 1
12.8 years

Gross floor area

3,334.44 m²

Number of floors

RC structure/14 F

Acquisition dateNovember 29, 2018

Number of leasable residential units
Occupancy ratio

61 units
87.4% (as of end of October 2018)• Approximately a 6-minute walk to Kokura Station on the JR, the Sanyo Shinkansen Line andthe Kitakyushu Monorail.

Location• Kokura Kita-ku, Kitakyushi City, where the property is located, is the center of politics,
characteristics
economy, and administration of the city.
• The area surrounding Kokura Station is the leading commercial area within the city.
• The property carries room types that can meet the needs of bachelors, DINKs, and families.
Property
characteristics • All living rooms have an opening facing the south, making both sunlight and airflow pleasant.

Located near Kokura Station and with excellent accessibility, convenience as well as a quiet
living environment, demand from near Kokura Station and from commuters into Kitakyushu
City is expected.

Note 1: “Appraisal value” is recorded based on the real estate appraisal value as of November 1, 2018. Moreover, “Building age” is recorded as the age of the building as of the date of this document rounded to the nearest first decimal place.
Note 2: Of “Appraised NOI yield,” “Before depreciation” is the appraised NOI based on the direct capitalization approach of the real estate investment value, which does not include the depreciation of acquired assets, while “After depreciation” uses thesame appraised NOI and then subtracts the total expected depreciation of the fiscal period ending April 2019 (9th FP) and the fiscal period ending October 2019 (10th FP) and divide them by acquisition price (the appraisal NOI before
depreciation and the appraisal NOI after depreciation). Values are rounded to the nearest first decimal place.
Note 3: A prime property (sometimes abbreviated to “PP” hereinafter) is a name for high-quality residential or commercial properties in strategic locations (here and hereinafter). For details on prime properties, see page 44.
Note 4: “Seller” is undisclosed as the seller’s consent has not been obtained.

38

Appendix

Asset Replacement after the Merger
Realize further external growth and portfolio quality improvement simultaneouslywith the merger

Sale

Acquisition

Sale

Acquisition

May 1, 2018 (8th FP)

May 1, 2018 (8th FP)

October 29, 2018 (8th FP)

November 29, 2018 (9th FP)

Hamamatsu PlazaEM
Kokura1 property
2.7 billion yen

1 property
1.0 billion yen

PM
Shirokanedai
Tower

PM
OtsukaPM
Asakusabashi

12 properties
16.4 billion yen

PMDaikanyamaPM
GotenyamaWest

EMToyosuResidence

6 properties
25.3 billion yen

As of the date of this document(effective date of merger)

End of October
2018 (8th FP)

Entire portfolio

Residential properties

Office building

Hotel

Asset size

440.8 billion yen

438.1 billion yen

439.1 billion yen

238.4 billion yen

183.5 billion yen

17.2 billion yen

Number of Properties

113 properties

112 properties

113 properties

107 properties

6 properties

1 property

Beforedepreciation

Results of 8th FP
4.4%

Sale of Hamamatsu Plazain 8th FP

Forecast for 9th FP
4.4%

4.6%

4.1%

3.8%

After
depreciation

3.4%

3.4%

3.4%

3.4%

3.0%

9.2 years

10.3 years

7.9 years

8.6 years

89.8%

81.2%

100.0%

100.0%

May 1, 2018

Portfolio

Advance portfolio construction with residences and office buildings
as core assets

NOI Yield
Acquisition
price base

Average building age Note 1

8.6 years

Prime property ratio Note2

90.0%

Acquisition of EM Kokura
in 9th FP

Note 1: “Average building age” is the weighted average of age of buildings by acquisition price as of May 1, 2018 or the date of this document and each is recorded (here and hereinafter).
Note 2: “Prime property ratio” is calculated based on the ratio of prime properties of all assets based on acquisition price, and is rounded to the first decimal place (here and hereinafter).
However, as Hamamatsu Plaza sold during the 8th FP is not considered a prime property, it is excluded from the calculations of “Prime property ratio.”
Note 3: “Prime Maison” is sometimes abbreviated as “PM” (here and hereinafter).

39

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 69 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

65

Koganei-shi,Tokyo 1 property

61
62

Suginami-ku

40

Hirano-ku

Sumiyoshi-ku

６

99

57

63 Shinjuku

71

Yokkaichi-shi,Mie 1 property

53

14 90 92

Kawasaki-shi,Kanagawa 2 properties
8

94

Shibuya

1

22

19

87

32

106

98

Yamanote Line

11
Meguro-ku

101 56
105

Nagoya-shi 10 properties

85
50

59
Higashi-ku

Kita-kuMoriyama-ku

16
60
27

Shinagawa

72

２
１

81
25

54

18

Nishi-ku

30
44

Chuo-ku
38
75

Hakata-ku

Nishi-ku
Jonan-ku

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

Koto-ku

70
47

４

104

36

31

Chuo-ku

Edogawa-ku

80

21
Setagaya-ku

Fukuoka-shi 7 properties

２

Minato-ku

３

10

76

Tokyo

Shibuya-ku

58

９

39
100

77

Chiyoda-ku

89

Yokohama-shi,Kanagawa 4 properties

73
５

95
46

66

103

29

93 97

７

Shinjuku-ku

91

107

45

Sumida-ku

69

Hino-shi,Tokyo 1 property

88

Kobe-shi,Hyogo 2 properties

Kitakyushu-shi,
Fukuoka 1 property

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

Atsuta-ku

Shinagawa-ku

17

Ota-kuTokyo 23 wards ratio Note1 62.4%
Residence 67 properties
Office Building 2 properties

Mizuho-ku
Tempaku-ku

Minami-ku
Minato-ku
Minami-ku

Midori-ku
Sawara-ku

Residence
Office Building
Hotel

Portfolio Earthquake PML
Note2

1.83%

（outline characters: property number）

Note1："Tokyo 23 wards ratio" is calculated based on acquisition price and rounded to the second
decimal place.
Note2："Portfolio Earthquake PML" is stated based on the Portfolio Earthquake PML Evaluation Report,
which was acquired from the evaluation company as of October 2018.

40

Appendix

List of Portfolio (1)■ Properties Owned as of the Date of this Document
Acquisition Price(million yen)

Investment
Ratio
(%)

Leasable Area(m²)

Occupancy
Rate(%)

Chuo-ku, Tokyo

6,540

1.5

5,515.43

Minato-ku, Tokyo

1,790

0.4

2,019.10

Esty Maison Ebisu II

Shibuya-ku, Tokyo

2,040

0.5

Esty Maison Ebisu

Shibuya-ku, Tokyo

873

0.2

★

Esty Maison Kanda

Chiyoda-ku, Tokyo

1,610

★

Esty Maison Kitashinjuku

Shinjuku-ku, Tokyo

1,590

★

Esty Maison Asakusakomagata

Taito-ku, Tokyo

Esty Maison Kawasaki

Kawasaki-shi, Kanagawa

Property
No.

PP
Property

R001★

Esty Maison Ginza

R002

★

Esty Maison Azabunagasaka

R003

★

R004

★

R005
R006
R007

R008

Property nameLocation

Location

Acquisition Price(million yen)

Investment
Ratio
(%)

Leasable Area(m²)

Occupancy
Rate(%)

Prime Maison Gokiso

Nagoya-shi, Aichi

1,950

0.4

4,427.65

96.6

Oct. 2008

Prime Maison Yuhigaoka

Osaka-shi, Osaka

909

0.2

2,040.35

95.9

Feb. 2007★

Prime Maison Kitatanabe

Osaka-shi, Osaka

601

0.1

1,798.97

95.5

Jun. 2006★

Prime Maison Momochihama

Fukuoka-shi, Fukuoka

1,940

0.4

7,514.76

100.0

Feb. 1996★

Esty Maison Akihabara

Taito-ku, Tokyo

1,930

0.4

2,324.65

96.2

Feb. 2006

Esty Maison Sasazuka

Shibuya-ku, Tokyo

3,340

0.8

3,701.70

97.6

Sep. 2004★

Prime Maison Ginza East

Chuo-ku, Tokyo

6,250

1.4

6,177.20

98.6

Feb. 2006★

Prime Maison Takami

Nagoya-shi, Aichi

1,050

0.2

2,016.79

97.2

Aug. 2008

Completion Date

Property
No.

PP
Property

98.2

Feb. 2005

R041

★

90.0

Jan. 2004

R042★

2,062.10

97.8

Jun. 2003

R043

781.02100.0

Oct. 2004

R044

0.4

1,706.54

97.4

Feb. 2004

R045

0.4

1,881.19

96.9

Aug. 2004

R046

2,190

0.5

2,978.28

99.2

Jul. 2004

R047

2,400

0.5

3,741.01

98.7

Jul. 2004

R048

Property nameCompletion Date

Esty Maison Yokohama

Yokohama-shi, Kanagawa

2,110

0.5

2,823.73

100.0

Jan. 2007

R049★

Prime Maison Yadaminami

Nagoya-shi, Aichi

812

0.2

2,168.59

96.1

Jul. 2007

R010★

Esty Maison Kameido

Koto-ku, Tokyo

1,580

0.4

2,279.21

97.9

Nov. 2005

R050★

Prime Maison Teriha

Fukuoka-shi, Fukuoka

1,260

0.3

6,728.20

100.0

Aug. 2005

R011★

Esty Maison Meguro

Meguro-ku, Tokyo

1,060

0.2

1,070.13

95.0

Nov. 2005

R051★

Esty Maison Higashishirakabe

Nagoya-shi, Aichi

1,580

0.4

4,014.07

100.0

Feb. 2006

Esty Maison Sugamo

Toshima-ku, Tokyo

1,630

0.4

2,619.17

100.0

Feb. 2007

R052★

Esty Maison Sengoku

Bunkyo-ku, Tokyo

1,360

0.3

1,498.13

95.7

Aug. 2009

Esty Maison Kyobashi

Osaka-shi, Osaka

2,970

0.7

4,613.04

97.6

Mar. 2006

R053★

Esty Maison Daizawa

Setagaya-ku, Tokyo

2,270

0.5

2,352.90

100.0

Feb. 2010

Esty Maison Hakuraku

Yokohama-shi, Kanagawa

931

0.2

1,285.83

98.2

Feb. 2006

R054

Esty Maison Togoshi

Shinagawa-ku, Tokyo

1,770

0.4

1,943.17

98.8

Jun. 2009

Feb. 2007

R055★

Esty Maison Nishitemma

Osaka-shi, Osaka

1,680

0.4

2,877.90

96.1

Nov. 2007
Sep. 2003

R009

R012
R013

★

R014
R015

★

Esty Maison Minamihorie

Osaka-shi, Osaka

1,060

0.2

1,804.48

95.4

R016

★

Esty Maison Gotanda

Shinagawa-ku, Tokyo

3,110

0.7

3,871.15

96.4

Mar. 2006

R056★

Esty Maison Shirokanedai

Shinagawa-ku, Tokyo

2,400

0.5

2,675.11

96.2

R017

★

Esty Maison Oisendaizaka

Shinagawa-ku, Tokyo

2,720

0.6

2,979.85

98.4

Aug. 2006

R057★

Esty Maison Higashishinjuku

Shinjuku-ku, Tokyo

1,680

0.4

1,889.50

100.0

Apr. 2009

Esty Maison Shinagawa Seaside

Shinagawa-ku, Tokyo

2,050

0.5

2,602.30

93.3

Jun. 2006

R058★

Esty Maison Motoazabu

Minato-ku, Tokyo

1,540

0.4

1,199.86

85.2

Nov. 2009

Esty Maison Toritsudaigaku

Meguro-ku, Tokyo

861

0.2

1,035.78

100.0

Feb. 2009

Esty Maison Musashikoyama II

Shinagawa-ku, Tokyo

1,030

0.2

1,073.59

97.8

May 2009
Jun. 2009

R018
R019

★

Esty Maison Minamiazabu

Minato-ku, Tokyo

1,250

0.3

1,082.12

98.1

Aug. 2006

R059

R020

★

Esty Maison Tsukamoto

Osaka-shi, Osaka

1,080

0.2

2,321.04

95.8

Aug. 2006

R060

R021

Esty Maison Kawasaki II

Kawasaki-shi, Kanagawa

1,910

0.4

2,824.86

100.0

Feb. 2007

R061

Esty Maison Nakano

Nakano-ku, Tokyo

1,870

0.4

2,023.72

98.4

R022

Esty Maison Azabujuban

Minato-ku, Tokyo

2,690

0.6

1,755.31

94.0

Feb. 2007

R062

Esty Maison Shinnakano

Nakano-ku, Tokyo

1,020

0.2

1,107.57

98.0

Oct. 2009

R023

Esty Maison Itabashihoncho

Itabashi-ku, Tokyo

937

0.2

1,274.49

96.9

Feb. 2007

R063

Esty Maison Nakanofujimicho

Nakano-ku, Tokyo

984

0.2

1,299.60

97.7

Feb. 2009

R024★

Esty Maison Oizumigakuen

Nerima-ku, Tokyo

790

0.2

1,362.36

98.3

Feb. 2007

R064

Esty Maison Tetsugakudo

Nakano-ku, Tokyo

1,160

0.3

1,531.89

95.4

Oct. 2009

R025★

Esty Maison Higashishinagawa

Shinagawa-ku, Tokyo

2,390

0.5

2,936.72

97.2

May 2008

R065

Esty Maison Koenji

Suginami-ku, Tokyo

1,160

0.3

1,527.52

100.0

Mar. 2009

R026★

Esty Maison Itabashikuyakushomae

Itabashi-ku, Tokyo

2,540

0.6

3,915.81

92.0

Apr. 2007

R066★

Esty Maison Oshiage

Sumida-ku, Tokyo

2,490

0.6

3,180.90

97.7

Apr. 2010

Esty Maison Musashikoyama

Shinagawa-ku, Tokyo

1,050

0.2

1,176.78

95.6

Nov. 2007

R067★

Esty Maison Akabane

Kita-ku, Tokyo

3,290

0.7

4,302.84

97.6

Nov. 2009

R027
R028

★

Esty Maison Sendagi

Bunkyo-ku, Tokyo

698

0.2

897.30100.0Jan. 2008

R068

Esty Maison Oji

Kita-ku, Tokyo

1,650

0.4

2,289.44

98.9

Jul. 2010

R029★

Esty Maison Yotsuyasakamachi

Shinjuku-ku, Tokyo

2,090

0.5

2,453.17

98.2

Mar. 2008

R069★

Prime Maison Waseda

Shinjuku-ku, Tokyo

1,580

0.4

1,650.66

93.0

Nov. 2012

R030★

Esty Maison Hakatahigashi

Fukuoka-shi, Fukuoka

2,400

0.5

9,106.08

100.0

Nov. 2007

R070★

Prime Maison Hatchobori

Chuo-ku, Tokyo

1,460

0.3

1,382.32

96.2

Nov. 2012

Esty Maison Kamigofuku

Fukuoka-shi, Fukuoka

821

0.2

2,261.91

95.7

Mar. 2008

R071★

Prime Maison Jimbocho

Chiyoda-ku, Tokyo

1,960

0.4

1,819.90

100.0

Mar. 2013

R031
R032

★

Esty Maison Sangenjaya

Setagaya-ku, Tokyo

822

0.2

856.0897.2

Jan. 2008

R072★

Prime Maison Gotenyama East

Shinagawa-ku, Tokyo

2,910

0.7

2,512.91

100.0

Jan. 2011

R033★

Prime Maison Musashinonomori

Kodaira-shi, Tokyo

1,850

0.4

3,924.58

95.9

Dec. 2007

R073★

MAST LIFE Akihabara

Chiyoda-ku, Tokyo

555

0.1

803.36100.0

Oct. 2006

R034★

Prime Maison Higashisakura

Nagoya-shi, Aichi

1,500

0.3

3,118.11

100.0

Feb. 2008

R074★

Esty Maison Aoi

Nagoya-shi, Aichi

2,460

0.6

4,809.68

92.3

Oct. 2007

R035★

Prime Maison Kayabakoen

Nagoya-shi, Aichi

801

0.2

2,163.98

100.0

Nov. 2006

R075★

Esty Maison Yakuin

Fukuoka-shi, Fukuoka

2,430

0.6

5,213.51

96.1

Feb. 2006

R036★

Esty Maison Sangenjaya II

Setagaya-ku, Tokyo

785

0.2

894.64

97.0

Jan. 2008

R076★

Esty Maison Kinshicho II

Sumida-ku, Tokyo

8,250

1.9

9,469.65

98.7

Jan. 2008

R037★

Esty Maison Itabashi C6

Itabashi-ku, Tokyo

2,560

0.6

4,036.66

96.2

Mar. 2008

R077★

Esty Maison Ojima

Koto-ku, Tokyo

8,630

2.0

9,905.97

99.1

Sep. 2007

R038★

MAST Hakata

Fukuoka-shi, Fukuoka

2,360

0.5

9,614.80

100.0Jan. 2005

R078★

Prime Maison Fujimidai

Nagoya-shi, Aichi

2,070

0.5

5,704.63

92.2

Apr. 2007

R039★

Esty Maison Kinshicho

Sumida-ku, Tokyo

1,260

0.3

1,611.54

100.0

Sep. 2006

R079★

Esty Maison Tsurumai

Nagoya-shi, Aichi

4,490

1.0

13,812.40

100.0

Nov. 1999

R040★

Esty Maison Musashikoganei

Koganei-shi, Tokyo

1,790

0.4

2,275.24

98.0

Feb. 2005

R080★

Prime Maison Morishita

Koto-ku, Tokyo

1,930

0.4

2,180.78

98.8

May 2013

Note: Notes regarding this page can be found on the following page41

Appendix

List of Portfolio (2)Property
PP
No.
Property

Property nameLocation

Acquisition Price(million yen)

Investment
Ratio
(%)

Leasable Area(m²)

Occupancy
Completion Date
Rate
(%)

Property
PP
No.
Property

Location

Property nameAcquisition Price(million yen)

Investment
Ratio
(%)

Leasable Area(m²)

Occupancy
Rate(%)

Completion Date

R081

★

Prime Maison Shinagawa

Shinagawa-ku, Tokyo

1,960

0.4

2,107.88

100.0

Feb. 2014

O001★

Garden City Shinagawa Gotenyama

Shinagawa-ku, Tokyo

59,60013.6

31,236.34

100.0

Feb. 2011

R082★

Prime Maison Odorikoen

Sapporo-shi, Hokkaido

3,160

0.7

7,360.37

96.5

Dec. 2008

O002★

Gotenyama SH Building

Shinagawa-ku, Tokyo

51,50011.7

19,999.97

100.0

Feb. 2011

R083★

Prime Maison Minami 2-jo

Sapporo-shi, Hokkaido

1,930

0.4

6,019.09

99.3

Nov. 2009

O003★

Hommachi Minami Garden City

Osaka-shi, Osaka

23,1005.3

16,699.46

100.0

Feb. 2011

R084★

Prime Maison Kamokamogawa

Sapporo-shi, Hokkaido

1,250

0.3

4,102.08

98.1

Oct. 2009

38,6008.8

17,006.94

100.0

May 2010

R085★

Osaka-shi, Osaka

Prime Maison Central Park

Fukuoka-shi, Fukuoka

2,309

0.5

10,268.74

98.7

Feb. 2011

R086★

MAST LIFE Yahiro

Sumida-ku, Tokyo

1,910

0.4

3,409.16

100.0

R087

★

O004

★

Jan. 2011

O005★

HK Yodoyabashi Garden Avenue

Osaka-shi, Osaka

4,400

1.0

4,554.52

100.0

Jul. 2015

O006★

Hirokoji Garden Avenue

Nagoya-shi, Aichi

6,350

1.4

4,442.75

100.0

Mar. 2011

183,550

41.8

93,939.98

100.0

Location

Acquisition Price(million yen)

Investment
Ratio
(%)

Leasable Area(m²)

Occupancy
Rate(%)

Osaka-shi, Osaka

17,2003.9

18,092.98

100.0

17,2003.9

18,092.98

100.0

Leasable Area(m²)

Occupancy
Rate(%)

Prime Maison Ebisu

Shibuya-ku, Tokyo

4,360

1.0

3,010.66

98.2

Jun. 2014

R088

Granmast Kanazawa Nishiizumi

Kanazawa-shi, Ishikawa

1,080

0.2

4,634.50

100.0

Sep. 2007

R089

Granmast Unomori

Yokkaichi-shi, Mie

830

0.2

2,280.00

100.0

Apr. 2009

Esty Maison Kohoku Tsunashima

Yokohama-shi, Kanagawa

2,750

0.6

6,867.48

100.0

Note 6MAST LIFE Hino

Hino-shi, Tokyo

1,390

0.3

2,827.55

99.0

Jan. 2010

Prime Maison Yokohama Nihon-odori

Yokohama-shi, Kanagawa

4,870

1.1

5,461.13

93.6

Jun. 2014

Kobe Women’s Student Housing

Kobe-shi, Hyogo

5,880

1.3

15,341.68

100.0

Feb. 2002

R090
R091

★

R092

★

R093

Hommachi Garden City

R094

★

Prime Maison Shibuya

Shibuya-ku, Tokyo

2,430

0.6

1,972.59

96.6

Jul. 2014

R095★

Prime Maison Hatsudai

Shibuya-ku, Tokyo

3,010

0.7

2,879.20

98.2

Dec. 2014

R096

Esty Maison Uemachidai

Osaka-shi, Osaka

1,040

0.2

2,225.52

100.0

Aug. 2005

R097

Esty Maison Kobe-sannomiya

Kobe-shi, Hyogo

971

0.2

2,007.00

98.2

Mar. 2007
Jun. 2015(Office building portion)

Office Building Properties Subtotal

Property
PP
No.
Property

H001★

Property name

Hommachi Garden City
(Hotel portion)
Hotel Property Subtotal

Completion Date

May 2010

R098★

Prime Maison Shirokane-takanawa

Minato-ku, Tokyo

4,900

1.1

3,923.76

97.5

R099

★

Prime Maison Ichigayayamabushicho

Shinjuku-ku, Tokyo

4,220

1.0

4,099.04

95.4

Oct. 2015

R100★

Esty Maison Morishita

Sumida-ku, Tokyo

655

0.1

748.92100.0

Feb. 2017

R101★

Prime Maison Shirokanedai Tower

Shinagawa-ku, Tokyo

7,950

1.8

6,772.89

96.6

May 2016

R102★

Prime Maison Otsuka

Toshima-ku, Tokyo

3,700

0.8

3,921.35

94.9

Jan. 2017

R103★

Prime Maison Asakusabashi

Taito-ku, Tokyo

1,680

0.4

2,033.06

100.0

Oct. 2016

R104★

Prime Maison Daikanyama

Meguro-ku, Tokyo

2,520

0.6

1,779.17

91.8

Jan. 2017

Residence

107

80

81.2

238,43554.3

380,709.13

97.9

10.3 years

R105

★

Prime Maison Gotenyama West

Shinagawa-ku, Tokyo

3,400

0.8

3,569.73

95.9

Jan. 2011

Office Building

6

6

100.0

183,550

41.8

93,939.98

100.0

7.9 years

R106★

Esty Maison Toyosu Residence

Koto-ku, Tokyo

6,050

1.4

23,538.73

98.4

Feb. 2008

Hotel

1

1

100.0

17,2003.9

18,092.98

100.0

8.6 years

Esty Maison Kokura

Kitakyushu-shi, Fukuoka

1,040

0.2

3,062.59-

Feb. 2006

Retail Property, etc.

-

-

-

-

-

-

-

-

238,43554.3

380,709.13

97.9

Total

113

86

89.8

439,185100.0

492,742.09

98.4

9.2 years

R107

Residence Subtotal■ Overview of Portfolio
Type

Number ofproperties

Number of PP
Properties

AcquisitionPrice(million yen)

PP Ratio(%)

Investment
Ratio
(%)

Average
Building Age

Note 1: “PP Properties” are assets that fall under the category of Prime Properties. For Prime Properties, please refer to page 46.
Note 2: “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 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: “Investment Ratio” indicates the ratio of acquisition price of each asset to the total acquisition price of assets held. Figures are rounded to the nearest first decimal place.
Note 5: “Occupancy Rate” is indicated based on the information as of October 31, 2018. Therefore, “Esty Maison Kokura,” which was acquired on November 29, 2018, is 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: “PP Ratio” in the Overview of Portfolio indicates the ratio based on acquisition price.
Note 9: “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.

42

Appendix

Portfolio Development Policy■ Portfolio Development Policy by Use
Build a portfolio with “residential properties” as “bases and centers of human life” and “office buildings” as “business activity bases,” as core assets.
Promote investment in hotels that are expected to continue growing.

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 property,
etc.

As of the date ofthis document

Investment ratio target bytype upon achieving
an asset size of
600 billion yen (Note)

Residences
Student dormitories
Company housing

30‒55%

54.3%

Around 45%

Office buildings
Data centers30‒55%

41.8%

Around 45%

HotelsService apartments

0‒30%

3.9%

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: Target investment ratio by type upon achieving an asset size of 600 billion yen is not guaranteed or promised for respective ratios, and could drastically differ from real results.

■ 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

Not less than

70%

76.6%

Commercial Properties

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

Not less than

80%

100%

Note: These ratios may differ temporarily in case of acquisition of properties meeting the investment criteria based on the growth strategy.

43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 Zones

BCP/Safety

Functionality/Livability

Convenience

Brand

Environmental
consideration

44

Appendix

Estimated Value at the End of Period (1)■ Properties Owned as of the End of October 2018
Property No.

Property Name

Estimated Value at the End
of Period (million yen)
As of Oct. 31, 2018

Difference from
Previous Period

Book Value(million yen)

Discount Rate (%)

Direct Capitalization Rate (%)

Terminal Capitalization Rate (%)

Unrealized
Gain/Loss(million yen)

As of Oct. 31, 2018

Period on period

As of Oct. 31, 2018

Period on period

As of Oct. 31, 2018

Appraisal NOI(million yen)

Period on period

R001

Esty Maison Ginza

6,700

160

6,527

172

3.9

-0.1

4.1

-0.1

4.1

-0.1

272

R002

Esty Maison Azabunagasaka

1,840

50

1,785

54

4.0

-0.1

4.1

-0.1

4.2

-0.1

77

R003

Esty Maison Ebisu II

2,090

50

2,036

53

4.0

-0.1

4.1

-0.1

4.2

-0.1

88

R004

Esty Maison Ebisu

896

23

870

25

3.9

-0.1

4.0

-0.1

4.1

-0.1

37

R005

Esty Maison Kanda

1,650

40

1,601

48

4.0

-0.1

4.1

-0.1

4.2

-0.1

69

R006

Esty Maison Kitashinjuku

1,630

40

1,580

49

4.2

-0.1

4.2

-0.1

4.4

-0.1

70

R007

Esty Maison Asakusakomagata

2,240

50

2,175

64

4.2

-0.1

4.2

-0.1

4.4

-0.1

99

R008

Esty Maison Kawasaki

2,530

130

2,376

153

4.3

-0.1

4.3

-0.1

4.5

-0.1

116

R009

Esty Maison Yokohama

2,110

-

2,097

12

4.5

-

4.3

-

4.7

-

101

R010

Esty Maison Kameido

1,590

10

1,566

23

4.5

-

4.3

-

4.7

-

77

R011

Esty Maison Meguro

1,080

20

1,097

-17

4.1

-0.1

3.9

-0.1

4.3

-0.1

47

R012

Esty Maison Sugamo

1,660

30

1,624

35

4.1

-0.1

3.9

-0.1

4.3

-0.1

72

R013

Esty Maison Kyobashi

3,000

30

2,946

53

4.6

-0.1

4.5

-0.1

4.7

-0.1

144

R014

Esty Maison Hakuraku

932

1

925

6

4.6

-

4.4

-

4.8

-

46

R015

Esty Maison Minamihorie

1,070

10

1,056

13

4.4

-0.1

4.2

-0.1

4.6

-0.1

51

R016

Esty Maison Gotanda

3,130

20

3,098

31

4.4

-

4.1

-

4.6

-

143

R017

Esty Maison Oisendaizaka

2,720

-

2,705

14

4.2

-

4.0

-

4.4

-

120

R018

Esty Maison Shinagawa Seaside

2,080

30

2,042

37

4.1

-0.1

3.9

-0.1

4.3

-0.1

94

R019

Esty Maison Minamiazabu

1,270

20

1,247

22

3.8

-0.1

3.6

-0.1

4.0

-0.1

52

R020

Esty Maison Tsukamoto

1,080

-

1,071

8

4.9

-0.1

4.7

-0.1

5.1

-0.1

56

R021

Esty Maison Kawasaki II

1,950

40

1,895

54

4.3

-0.1

4.1

-0.1

4.5

-0.1

93

R022

Esty Maison Azabujuban

2,750

60

2,686

63

3.8

-0.1

3.6

-0.1

4.0

-0.1

108

R023

Esty Maison Itabashihoncho

955

18

930

24

4.2

-0.1

4.0

-0.1

4.4

-0.1

43

R024

Esty Maison Oizumigakuen

805

15

786

18

4.3

-0.1

4.1

-0.1

4.5

-0.1

38

R025

Esty Maison Higashishinagawa

2,330

-60

2,373

-43

4.4

0.1

4.2

0.1

4.6

0.1

110

R026

Esty Maison Itabashikuyakushomae

2,590

50

2,526

63

4.2

-0.1

4.0

-0.1

4.4

-0.1

117

R027

Esty Maison Musashikoyama

1,060

10

1,045

14

4.2

-0.1

4.0

-0.1

4.4

-0.1

48

R028

Esty Maison Sendagi

711

13

695

15

4.2

-0.1

4.0

-0.1

4.4

-0.1

32

R029

Esty Maison Yotsuyasakamachi

2,140

50

2,085

54

4.1

-0.1

3.9

-0.1

4.3

-0.1

91

R030

Esty Maison Hakatahigashi

2,420

20

2,375

44

5.0

-0.1

5.0

-0.1

5.1

-0.1

130

R031

Esty Maison Kamigofuku

816

-5

814

1

4.8

-0.1

4.8

-0.1

4.9

-0.1

44

R032

Esty Maison Sangenjaya

830

8

817

12

4.1

-0.1

4.2

-0.1

4.3

-0.1

37

R033

Prime Maison Musashinonomori

1,880

30

1,839

40

4.7

-0.1

4.6

-0.1

4.9

-0.1

96

R034

Prime Maison Higashisakura

1,530

30

1,488

41

4.7

-0.1

4.6

-0.1

4.9

-0.1

77

R035

Prime Maison Kayabakoen

819

18

794

24

4.9

-0.1

4.8

-0.1

5.1

-0.1

43

R036

Esty Maison Sangenjaya II

804

19

781

22

4.2

-0.1

4.3

-0.1

4.4

-0.1

36

R037

Esty Maison Itabashi C6

2,560

-

2,544

15

4.4

-

4.2

-

4.6

-

120

R038

MAST Hakata

2,400

40

2,327

72

5.0

-0.1

4.4

-0.1

5.2

-0.1

134

R039

Esty Maison Kinshicho

1,270

10

1,251

18

4.2

-

4.0

-

4.4

-

58

R040

Esty Maison Musashikoganei

1,870

80

1,783

86

4.3

-0.1

4.4

-0.1

4.5

-0.1

84

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

45

Appendix

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

Property Name

Estimated Value at the End
of Period (million yen)
As of Oct. 31, 2018

Difference from
Previous Period

Book Value(million yen)

Discount Rate (%)

Direct Capitalization Rate (%)

Unrealized
Gain/Loss(million yen)

As of Oct. 31, 2018

Period on period

As of Oct. 31, 2018

Terminal Capitalization Rate (%)

Period on period

As of Oct. 31, 2018

Appraisal NOI(million yen)

Period on period

R041

Prime Maison Gokiso

1,950

-

1,934

15

4.7

-

4.7

-

4.9

-

98

R042

Prime Maison Yuhigaoka

929

20

903

25

4.6

-0.1

4.4

-0.1

4.8

-0.1

44

R043

Prime Maison Kitatanabe

614

13

596

17

4.9

-0.1

4.7

-0.1

5.1

-0.1

32

R044

Prime Maison Momochihama

1,990

50

1,931

58

4.9

-0.1

4.6

-0.1

5.1

-0.1

110

R045

Esty Maison Akihabara

1,940

10

1,916

23

4.2

-

4.0

-

4.4

-

88

R046

Esty Maison Sasazuka

3,340

-

3,429

-89

4.2

-

4.0

-

4.4

-

146

R047

Prime Maison Ginza East

6,360

110

6,219

140

4.0

-

3.8

-

4.2

-

265

R048

Prime Maison Takami

1,050

-

1,042

7

4.5

-

4.6

-

4.7

-

51

R049

Prime Maison Yadaminami

820

8

809

10

4.9

-0.1

4.8

-0.1

5.1

-0.1

42

R050

Prime Maison Teriha

1,240

-20

1,247

-7

5.1

-

4.9

-

5.3

-

74

R051

Esty Maison Higashishirakabe

1,590

10

1,568

21

4.8

-0.1

4.7

-0.1

5.0

-0.1

80

R052

Esty Maison Sengoku

1,330

-30

1,355

-25

4.0

-

3.8

-

4.2

-

56

R053

Esty Maison Daizawa

2,240

-30

2,262

-22

4.0

-

3.8

-

4.2

-

93

R054

Esty Maison Togoshi

1,770

-

1,762

7

4.0

-0.1

4.1

-0.1

4.2

-0.1

74

R055

Esty Maison Nishitemma

1,650

-30

1,670

-20

4.5

-0.1

4.6

-0.1

4.7

-0.1

79

R056

Esty Maison Shirokanedai

2,400

-

2,392

7

4.1

-

3.9

-

4.3

-

103

R057

Esty Maison Higashishinjuku

1,720

40

1,669

50

4.0

-0.1

4.1

-0.1

4.2

-0.1

72

R058

Esty Maison Motoazabu

1,550

10

1,534

15

3.8

-0.1

3.9

-0.1

4.0

-0.1

61

R059

Esty Maison Toritsudaigaku

851

-10

857

-6

3.9

-0.1

4.0

-0.1

4.1

-0.1

35

R060

Esty Maison Musashikoyama II

1,030

-

1,024

5

4.1

-

3.9

-

4.3

-

44

R061

Esty Maison Nakano

1,810

-60

1,861

-51

4.1

-

3.9

-

4.3

-

79

R062

Esty Maison Shinnakano

995

-25

1,014

-19

4.2

-

4.0

-

4.4

-

44

R063

Esty Maison Nakanofujimicho

994

10

979

14

4.1

-0.1

4.2

-0.1

4.3

-0.1

43

R064

Esty Maison Tetsugakudo

1,140

-20

1,154

-14

4.2

-

4.0

-

4.4

-

50

R065

Esty Maison Koenji

1,170

10

1,154

15

4.0

-0.1

4.1

-0.1

4.2

-0.1

49

R066

Esty Maison Oshiage

2,440

-50

2,475

-35

4.2

-0.1

4.2

-0.1

4.4

-0.1

108

R067

Esty Maison Akabane

3,240

-50

3,266

-26

4.3

-

4.1

-

4.5

-

147

R068

Esty Maison Oji

1,620

-30

1,638

-18

4.3

-

4.1

-

4.5

-

74

R069

Prime Maison Waseda

1,610

30

1,570

39

4.0

-0.1

3.8

-0.1

4.2

-0.1

66

R070

Prime Maison Hatchobori

1,490

30

1,450

39

4.0

-0.1

3.8

-0.1

4.2

-0.1

61

R071

Prime Maison Jimbocho

1,970

10

1,948

21

4.1

-

3.9

-

4.3

-

83

R072

Prime Maison Gotenyama East

2,950

40

2,902

47

3.9

-

3.7

-

4.1

-

117

R073

MAST LIFE Akihabara

551

-4

552

-1

4.3

-

4.1

-

4.5

-

26

R074

Esty Maison Aoi

2,480

20

2,444

35

4.7

-0.1

4.7

-0.1

4.9

-0.1

121

R075

Esty Maison Yakuin

2,470

40

2,418

51

4.5

-0.1

4.6

-0.1

4.7

-0.1

116

R076

Esty Maison Kinshicho II

8,420

170

8,205

214

4.2

-0.1

4.0

-0.1

4.4

-0.1

365

R077

Esty Maison Ojima

8,790

160

8,583

206

4.2

-0.1

4.0

-0.1

4.4

-0.1

381

R078

Prime Maison Fujimidai

2,060

-10

2,061

-1

5.0

-

4.8

-

5.2

-

109

R079

Esty Maison Tsurumai

4,490

-

4,705

-215

5.0

-

4.8

-

5.2

-

234

R080

Prime Maison Morishita

1,970

40

1,917

52

4.2

-0.1

4.2

-0.1

4.4

-0.1

85

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

46

Appendix

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

Property Name

Estimated Value at the End
of Period (million yen)
As of Oct. 31, 2018

Difference from
Previous Period

Book Value(million yen)

Discount Rate (%)

Direct Capitalization Rate (%)

Unrealized
Gain/Loss(million yen)

As of Oct. 31, 2018

Period on period

As of Oct. 31, 2018

Terminal Capitalization Rate (%)

Period on period

As of Oct. 31, 2018

Appraisal NOI(million yen)

Period on period

R081

Prime Maison Shinagawa

1,970

10

1,950

19

4.2

-

4.0

-

4.4

-

86

R082

Prime Maison Odorikoen

3,200

40

3,154

45

4.8

-0.1

4.6

-0.1

5.0

-0.1

161

R083

Prime Maison Minami 2-jo

1,950

20

1,913

36

4.9

-0.1

4.7

-0.1

5.1

-0.1

101

R084

Prime Maison Kamokamogawa

1,280

30

1,237

42

4.9

-0.1

4.7

-0.1

5.1

-0.1

66

R085

Prime Maison Central Park

2,362

53

2,287

74

5.1

-0.1

4.9

-0.1

5.2

-0.1

131

R086

MAST LIFE Yahiro

1,910

-

1,897

12

4.5

-

4.3

-

4.7

-

89

R087

Prime Maison Ebisu

4,480

120

4,346

133

3.9

-0.1

3.7

-0.1

4.1

-0.1

179

R088

Granmast Kanazawa Nishiizumi

1,060

-20

1,068

-8

5.3

-

5.1

-

5.5

-

59

R089

Granmast Unomori

830

-

820

9

5.2

-

5.0

-

5.4

-

46

R090

Esty Maison Kohoku Tsunashima

2,814

64

2,742

71

4.6

-0.1

4.4

-0.1

4.8

-0.1

140

R091

MAST LIFE Hino

1,410

20

1,378

31

4.7

-0.1

4.5

-0.1

4.8

-0.1

69

R092

Prime Maison Yokohama Nihon-odori

4,880

10

4,837

42

4.2

-0.1

4.0

-0.1

4.4

-0.1

211

R093

Kobe Women’s Student Housing

5,880

-

5,795

84

5.2

-

5.0

-

5.4

-

325

R094

Prime Maison Shibuya

2,480

50

2,423

56

3.9

-0.1

3.7

-0.1

4.1

-0.1

99

R095

Prime Maison Hatsudai

3,070

60

2,997

72

4.0

-0.1

3.8

-0.1

4.2

-0.1

126

R096

Esty Maison Uemachidai

1,050

10

1,094

-44

4.5

-

4.2

-

4.7

-

51

R097

Esty Maison Kobe-sannomiya

971

-

964

6

4.7

-

4.5

-

4.9

-

51

R098

Prime Maison Shirokane-takanawa

5,010

110

4,884

125

3.9

-0.1

3.7

-0.1

4.1

-0.1

201

R099

Prime Maison Ichigayayamabushicho

4,250

30

4,204

45

4.0

-0.1

3.8

-0.1

4.2

-0.1

177

R100

Esty Maison Morishita

658

3

651

6

4.3

-

4.1

-

4.5

-

28

R101

Prime Maison Shirokanedai Tower

8,950

-

8,072

877

3.9

-

4.0

-

4.1

-

356

R102

Prime Maison Otsuka

4,090

-

3,775

314

4.1

-

4.2

-

4.3

-

173

R103

Prime Maison Asakusabashi

1,860

-

1,711

148

4.1

-

4.2

-

4.3

-

78

R104

Prime Maison Daikanyama

2,850

-

2,560

289

3.9

-

4.0

-

4.1

-

114

R105

Prime Maison Gotenyama West

3,850

-

3,459

390

3.9

-

4.0

-

4.1

-

155

R106

Esty Maison Toyosu Residence

6,510

-

6,218

291

-

-

4.4

-

-

-

338

Residence Total

242,437

2,232

237,160

5,276

-

-

-

-

-

-

11,038O001

Garden City Shinagawa Gotenyama

71,400100

58,667

12,732

3.3

-

3.0

-

3.5

-

2,434

O002

Gotenyama SH Building

60,1001,600

50,443

9,656

3.4

-0.1

3.4

-0.1

3.6

-0.1

2,064

O003

Hommachi Minami Garden City

29,900800

22,268

7,631

3.6

-0.1

3.3

-0.1

3.8

-0.1

1,128

O004

Hommachi Garden City

44,700-37,512

7,187

3.5

-

3.3

-

3.7

-

1,594

O005

HK Yodoyabashi Garden Avenue

5,750

160

4,346

1,403

3.9

-0.1

3.9

-0.1

4.0

-0.1

236

O006

Hirokoji Garden Avenue

7,160

10

6,286

873

4.2

-

4.0

-

4.4

-

308

Office Building Total

219,010

2,670

179,524

39,485

-

-

-

-

-

-

7,768

Hommachi Garden City

17,700-17,145

554

3.8

-

3.6

-

4.0

-

691

Hotel Total

17,700-17,145

554

-

-

-

-

-

-

691

Portfolio Total

479,147

4,902

433,830

45,316

-

-

-

-

-

-

19,498H001

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

47

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 ending in April are the amount recorded in appraisal reports as of the end of the relevant
period, while for each period ending in October they 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” indicatesthe amount recorded on the balance sheets as of October 31, 2018.
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, theabove 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 HIGASHI SHIRAKABE”. While discount rates differ based on the agreement period, for the sake of convenience, theabove 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 theleased land are established. Therefore, the above “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 of the 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 “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: In calculating “Difference from Previous Period” and “Period on Period,” the comparison between the figures as of April 30, 2010 and those as of October 31, 2018 is indicated. Residence Total, Office Building Total, Hotel Total, Retail Property,
etc. Total and Portfolio Total indicate the aggregate amount of changes of properties owned at each point in time.

48

Appendix

Overview of Interest-Bearing Liabilities (1)■ LoansCurrent portion of long-term loans payable
Balance(million yen)Interest Rate

Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Development Bank of Japan Inc.

3,882

1.15475% Note 2

Aug. 2, 2012

Feb. 28, 2019

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

4,500

0.89900% Note 2

Feb. 8, 2013

Feb. 28, 2019

14,000Note 2

Dec. 3, 2014

Nov. 30, 2019Feb. 27, 2018

Feb. 28, 2019

Lender

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,

As of the date of this document

4,000

0.65830%

Base Rate(JBA 1-month JPY TIBOR)+0.18000%

Drawdown Date

Repayment Date

Remarks

UnsecuredandUnguaranteed

Long-term loans payable
Balance(million yen)Interest RateMUFG Bank, Ltd., Mizuho Bank, Ltd., Mizuho Trust & Banking Co., Ltd., Resona Bank, Limited

5,242

1.02225% Note 2

Feb. 28, 2013

Feb. 28, 2020

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

5,500

1.17200% Note 2

Aug. 30, 2013

Aug. 31, 2020

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

1,800

1.17350% Note 2

Jan. 31, 2014

Feb. 28, 2022

Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation

1,550

0.79614% Note 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, The Senshu Ikeda Bank, Ltd., The Yamaguchi Bank, Ltd.

3,900

0.95225% Note 2

Feb. 28, 2014

Feb. 26, 2021

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

4,680

1.11000% Note 2

Feb. 28, 2014

Feb. 28, 2022

Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, The Bank of Fukuoka, Ltd., Shinkin Central Bank, The Shizuoka Bank

2,100

0.97300% Note 2

Mar. 28, 2014

Feb. 26, 2021

Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation

4,400

0.83600% Note 2

Aug. 29, 2014

Aug. 31, 2021

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

5,400

0.96475% Note 2

Aug. 29, 2014

Aug. 31, 2022

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

17,0000.94060% Note 2

Dec. 3, 2014

Nov. 30, 2021

MUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Limited, Development
Bank of Japan Inc.

10,0001.47450% Note 2

Dec. 3, 2014

Nov. 30, 2024

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.

3,900

0.62800% Note 2

Feb. 27, 2015

Feb. 26, 2021

MUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Resona Bank, Limited, The Norinchukin Bank, The
Bank of Fukuoka, Ltd.

3,350

0.73975% Note 2

Feb. 27, 2015

Feb. 28, 2022

Development Bank of Japan Inc.

1,000

0.85250%

Feb. 27, 2015

Feb. 28, 2023

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

Drawdown Date

Repayment Date

Remarks

UnsecuredandUnguaranteed49Appendix

Overview of Interest-Bearing Liabilities (2)Balance(million yen)Interest RateMUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Sumitomo Mitsui Trust Bank, Limited, Mizuho Trust &Banking Co., 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% Note 2

Feb. 27, 2015

Feb. 28, 2023

MUFG Bank, Ltd.

1,650

0.61760%

Jul. 31, 2015

Nov. 30, 2020

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

5,350

0.62760% Note 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% Note 2

Jul. 31, 2015

Nov. 30, 2022

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., Resona Bank, Limited

2,350

1.01850% Note 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

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

1,900

0.68030% Note 2

Jan. 29, 2016

Aug. 31, 2023

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

4,750

0.63800% Note 2

Apr. 01, 2016

Feb. 29, 2024

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.

1,750

0.50500%

Apr. 01, 2016

Feb. 29, 2024

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

1,900

0.49500%

Aug. 31, 2016

Aug. 30, 2024

600

0.57000%

Aug. 31, 2016

Aug. 29, 2025

MUFG Bank, Ltd., Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation, Development Bank of Japan Inc.

3,000

0.59750%

Aug. 31, 2016

Aug. 29, 2025

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

4,050

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

Sep. 09, 2016

Nov. 30, 2020

MUFG Bank, Ltd.

1,810

0.60500%

Sep. 09, 2016

Sep. 08, 2026

MUFG Bank, Ltd., Mizuho Bank, Ltd.

1,340

0.67000%

Sep. 09, 2016

Sep. 08, 2026

Sumitomo Mitsui Banking Corporation

1,600

0.31000%

Feb. 28, 2017

Aug. 31, 2020

600

0.61000%

Feb. 28, 2017

Feb. 28, 2025

1,800

0.67000%

Feb. 28, 2017

Feb. 28, 2025

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

MUFG Bank, Ltd.

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

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

Drawdown Date

Repayment Date

Remarks

UnsecuredandUnguaranteed50Appendix

Overview of Interest-Bearing Liabilities (3)Balance(million yen)Interest RateMUFG 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., 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

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.,
Resona Bank, Limited, The Norinchukin Bank

5,050

0.34800% Note 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

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.,
Resona Bank, Limited, The Norinchukin Bank

5,050

0.41800% Note 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

Mizuho Bank, Ltd., Sumitomo Mitsui Banking Corporation

6,100

0.78300% Note 2

May 31, 2018

Aug. 31, 2027

2,500

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

Aug. 31, 2018

Aug. 31, 2021

182,432---

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

MUFG Bank, Ltd.

MUFG Bank, Ltd.

MUFG Bank, Ltd.

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

Total Loans

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

Drawdown Date

Repayment Date

Remarks

UnsecuredandUnguaranteed-

51

Appendix

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

Current portion of investment corporation bonds
Name

Sekisui House Residential Investment Corporation Third 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)

2,500

Interest
Rate

0.37400%

Issue Date

Redemption Date

Feb. 28, 2014

Feb. 28, 2019

Remarks

UnsecuredandUnguaranteed

As of the date of this document
Financial institutions

Balance(million yen)

Ratio

MUFG Bank, Ltd.

43,642

23.9%

Sumitomo Mitsui Banking Corporation

35,01519.2%

Mizuho Bank, Ltd.

33,031

18.1%

Sumitomo Mitsui Trust Bank, Limited

16,3108.9%Mizuho Trust & Banking Co., Ltd.

12,220

6.7%

Resona Bank, Limited

10,5505.8%

Development Bank of Japan Inc.

10,481

5.7%

The Norinchukin Bank

8,982

4.9%

The Bank of Fukuoka, Ltd.

2,400

1.3%

Aozora Bank, Ltd.

1,700

0.9%

Shinkin Central Bank

1,600

0.9%

The Senshu Ikeda Bank, Ltd.

1,300

0.7%

The Shizuoka Bank, Ltd.

1,300

0.7%

The 77 Bank, Ltd.

1,300

0.7%

The Hiroshima Bank, Ltd.

1,300

0.7%

The Yamaguchi Bank, Ltd.

1,300

0.7%

Total Loans

182,432

100.0%

Investment corporation bonds with repayment period date exceeding one year
Name

Issue
Amount(millionyen)Interest
Rate

Issue Date

Redemption Date

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

2,000

1.00000%

Feb. 28, 2013

Feb. 28, 2020

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

1.06900%

Feb. 28, 2014

Feb. 28, 2024

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

0.34000%

Sep. 08, 2016

Sep. 08, 2026

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

0.24000%

Jul. 13, 2017

Jul. 13, 2022

Total Investment Corporation Bonds

Total Interest-Bearing Liabilities

15,5000.87100%-

Aug. 29, 2014-

197,932 million yen

Aug. 30, 2024-

Remarks

UnsecuredandUnguaranteed-

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.

52

Appendix

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

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

Ratio(%)

ChangeInvestmen
t Units(units)Ratio(%)

FP ended April 2018

Unitholder type(pt.)

Unitholders

FP ended October 2018

Ratio
(%)

Unitholders

ChangeRatio(%)

Unitholders(pt.)

Individuals and others

90,646

9.4

330,586

8.8

239,940-0.6

Individuals and others

12,38995.6

19,533

96.3

7,144

0.6

Financial institutions

651,30467.2

2,580,497

68.6

1,929,193

1.4

Financial institutions

144

1.1

190

0.9

46

-0.2

-

-

-

-

-

-

-

-

-

-

-

-

Regional banks

79,6108.2

397,800

10.6

318,190

2.4

Regional banks

25

0.2

48

0.2

23

0.0

Trust banks

507,59352.4

1,929,995

51.3

1,422,402-1.1

Trust banks

10

0.1

10

0.0

-

-0.0

Life insurers

11,573

1.2

38,9201.0

27,347-0.2Life insurers

5

0.0

7

0.0

2

-0.0

Casualty insurers

1,601

0.2

27,4920.7

25,891

0.6

Casualty insurers

2

0.0

4

0.0

2

0.0

Shinkin banks

32,2983.3

109,153

2.9

76,855-0.4

Shinkin banks

56

0.4

67

0.3

11

-0.1

Others

18,6291.977,137

2.1

58,5080.1

Others

46

0.4

54

0.3

8

-0.1

Non-financial corporations

88,182

9.1

280,219

7.4

192,037-1.7

Non-financial corporations

241

1.9

357

1.8

116

-0.1

Non-Japanese corporations, etc.

128,12813.2

517,580

13.8

389,452

0.5

Non-Japanese corporations, etc.

167

1.3

194

1.0

27

-0.3

Securities companies

10,7401.1

53,2091.4

42,4690.3

Securities companies

17

0.1

19

0.1

2

-0.0

969,000

100.0

3,762,091

100.0

2,793,091-

12,958100.0

20,293

100.0

7,335

-

City banks

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

City banks

Total■ As of the End of the Fiscal Period Ended October 2018—Top 5 Unitholders█ Non-Japanese corporations, etc.

█ Individuals and others
Company NameFP ended
October 2018

2,633,706 units(70.0%)

3,762,091
units

0%

20%

40%

517,580 units(13.8%)

60%

280,219 units(7.4%)

330,586 units(8.8%)

80%

100%

Number ofInvestment Units
Owned

Ratio

Japan Trustee Services Bank, Ltd. (Trust Account)

968,015 units

25.7%

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

600,269 units

16.0%

Sekisui House, Ltd.

194,750 units

5.2%

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

153,801 units

4.1%

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

112,152 units

3.0%

Note: The above percentage are indicated by rounding to the first decimal place.

53

Appendix

Changes in Unit Price (December 3, 2014 – November 30, 2018)
(yen)

出来高

80,000

東証REIT指数(units)本投資法人投資口価格

100,000

Trading Volume
TSE REIT Index

90,000Investment Unit Price of SHR
75,00080,00070,00070,00060,00065,00050,00040,00060,00030,00020,00055,00010,00050,000

0

12月
Dec.

3月
Mar.

20142015年
2015
2014年

6月
Jun.

9月
Sep.

12月
Dec.
2016
2016年

3月
Mar.

6月
Jun.

9月
Sep.

12月
Dec.

3月
Mar.

2017
2017年

6月
Jun.

9月
Sep.

12月
Dec.

3月
Mar.

6月
Jun.

9月
Sep.

12月
Dec.

2018
2018年
(出所)株式会社東京証券取引所

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 25, 2018 and earlier being divided by two and actual figures of “Trading Volume” 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.

54

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

60 (As of the date of this document)

Shareholder

Sekisui House, Ltd. (100%)
Licensed for building lots and buildings transaction business
License No.(1) 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 investment corporation×0.4%

A

B

Investment
Committee

C

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

Compliance
Committee

B

Compliance
OfficerInternal Control
Promotion
Department

Note: 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 Board of Directors, nor its related parties.

C
Real Estate Division

Real EstateManagement
No. 2 Dept.

Real EstateManagement
No. 3 Dept.

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

Compliance committee
It is comprised of the Compliance Officer (committee head) and all full-time Directors including the President &Representative Director, in addition to the external committee members (Note). While the selection anddismissal 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

Business Strategy
Department

An institution 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, the Real Estate Division Head, theFinancial Department Head, the Investor Relations Department Head, General Accounting Department Head,and the General Affairs Department Head and external committee members (Note). While the selection anddismissal of the external committee is conducted at the asset management company’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 purchase 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 of before deduction of Management Fee II divided by the total
number of issued investment units.
Note 3: Operating Income of before deduction of Management Fee II.

Statutory Auditor

Real Estate
Investment
No. 2 Dept.

(DPU Note 2× Operating income Note 3×0.002%) x 2 (split ratio)■ Compliance Structure

The organization chart and institutions related to complianceof the asset management company are as below.

Real Estate
Investment
No. 1 Dept.

Total assets × 0.15%

Institutions responsible for compliance

Compliance officer
Responsible for the compliance of SHR and the asset management company in addition to the integration of
the operations of Internal Control Promotion Department. Personnel with sufficient screening and surveillancecapabilities are selected to observe compliance with legislation and norms.

Real Estate
Accounting
Department

Engineering
Management
Department

Finance
Department

Investor
Relations
Department

General
Accounting
Department

GeneralAffairs
Department

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

55

MEMO

MEMO

MEMO