Sekisui House SI Investment Corporation
Business Results for the 10th Fiscal Period
From April 1, 2010 to September 30, 2010

November 16, 2010

8973

Sekisui House SI Investment Corporation

Prime Maison MUSASHINONOMORIContents
1. Overview of the Tenth Fiscal Period Ended September 30,
2010

4. Forecasts for the Eleventh Fiscal Period Ending March 31,
2011 and Future Policy・Highlights

3・Forecasts for the Eleventh Fiscal Period Ending March 31, 201122

・Summary of Business Results for the Tenth Fiscal
Period Ended September 30, 2010

4

・Future Policy

23・Business Results Summary

5・[Reference] Rental Housing Properties Owned by Sekisui House
and Loan Repayment Schedule24

・Occupancy Rates and NOI Yield

6

・[Reference] Growth Strategy for a New Stage25

2. Progress of Growth Strategy “Phase I”

5. Appendix

・Progress of Growth Strategy

8・Balance Sheets

27

・Financial Strategy

9・Statements of Income

29・External Growth Strategy

11・Statements of Cash Flows / Cash Distributions

30

・Internal Growth Strategy

14・Summary of Selected Financial Data

31

・Outline of Portfolio

32

3. Status of Portfolio Management
・Portfolio Summary

17・Portfolio at a Glance34

・Occupancy by Region and by Floor Space (Residential
Properties)

18

・Overview of Interest-Bearing Debt as of September 30, 201037

・Rent Revisions (Residential Properties)

19

・Key Financial Indices for Interest-Bearing Debt

38

・Implementation of Various Measures for Internal Growth(Residential and Retail Properties)

20

・Overview of Unitholders as of September 30, 2010

39

・Historical Investment Unit Price40

11. Overview of the Tenth Fiscal Period Ended
September 30, 2010

Prime Maison
HIGASHISAKURA

プライムメゾン東桜

Highlights
Business Results and Status of Operations for the Tenth Fiscal Period Ended September 30, 2010

◇ Operating revenue: ¥3,334 million, Ordinary income: ¥956 million, Net income: ¥938 million◇ Cash distributions per unit: ¥8,160 (up 0.5% from initial forecast)Financial Strategy◇ Refinanced loans that matured (Total ¥14.679 billion)◇ Promoted stabilizing of financial standing by utilizing the creditworthiness of Sekisui House◇ LTV: 48.9% as of March 31, 2010 → 47.1% as of September 30, 2010
External Growth Strategy◇ Decided to acquire 3 residential properties by utilizing the pipelines with Sekisui House(acquired on October 1, 2010)
Internal Growth Strategy◇ Occupancy rate as of March 31, 2010 was 96.6% → Occupancy rate as of September 30, 2010 was
96.9% (total portfolio)◇ Implemented various measures to raise the occupancy rates of residential properties◇ Implemented large renewal work on HAMAMATSU Plaza’s HAMAMATSU West Building and solicitedanchor tenants

3

Summary of Business Results for the Tenth Fiscal Period Ended September 30, 2010
Comparison with Forecasts◇Factors for differences between actual results andFiscal Period Ended
Sep. 30, 2010

Fiscal Period Ended
Sep. 30, 2010

(Forecasts as of May 14, 2010)(183 days) (Actual)

forecasts for the fiscal period ended September 30, 2010
Difference

Operating revenue¥3,296 million¥3,334 million¥38 million 1.2%

Operating income¥1,576 million¥1,576 million¥0 million 0.0%

Ordinary income¥937 million¥956 million¥19 million 2.0%

Net income¥934 million¥938 million¥4 million 0.5%

¥8,120¥8,160¥40 0.5%・ Operating income
Operating revenue
Increase in rent revenue:
Increase in other lease business revenue:+ ¥16 million+ ¥21 million

Operating expenses
Increase in expenses related to rent business:
Increase in other business expenses:+ ¥28 million+ ¥9 million

・ Ordinary income
Decrease in non-operating expenses:− ¥17 million

・ Net income
Cash distributions per unit

Increase in income taxes:+ ¥14 million

Comparison with Previous Fiscal Period
Fiscal Period Ended Fiscal Period Ended
Mar. 31, 2010
Sep. 30, 2010

◇Factors for period-on-period changes to actual results for(183 days) (Actual)

Operating revenue¥3,402 million¥3,334 million-¥68 million-2.0%

Operating income¥1,688 million¥1,576 million-¥111 million-6.6%

Ordinary income¥1,053 million¥956 million-¥97 million-9.2%

Net income¥1,052 million¥938 million-¥113 million-10.8%¥10,052¥8,160-¥1,892-18.8%

Total assets¥104,750 million¥104,422 million-¥328 million

Interest-bearing debt

¥51,208 million¥49,229 million-¥1,979 million

Net assets¥49,756 million¥51,462 million¥1,706 million¥235,000¥294,300

Cash distributions per unit

Period-end investment unit price
Number of investment units
issued and outstanding
Period-end market value

104,670 units

115,070 units¥24,597 million¥33,865 million

Cash distributions¥1,052 million¥938 million

Notes:

Change(182 days) (Actual)

1. Amounts less than the indicated unit are rounded down.

the fiscal period ended September 30, 2010

・ Operating income
Operating revenue
Increase in rent revenue:
Decrease in other lease business revenue:+ ¥10 million− ¥79 million

Operating expenses
Increase in expenses related to rent business:
Increase in other business expenses:+ ¥18 million+ ¥24 million

・ Ordinary income
Decrease in non-operating expenses:− ¥13 million

・ Net income
Increase in income taxes:+ ¥16 million

2. Percentage figures are rounded to the nearest first decimal place.

4

Business Results Summary
Cash Distributions per Unit

Operating Revenue, Ordinary Income and Net Income
Operating revenue(million yen)

4,000

Ordinary income

Net income(yen)Decreased income due to payment of settlement moneywith cancellation of planned property acquisitions

16,0003,500

14,0003,000

12,0002,500

10,000

2,000

8,000

1,500

6,000

1,000

4,000

500

2,000

0

0

Period ended

Sep. 2008

Mar. 2009

Sep. 2009

Mar. 2010

Sep. 2010

Decreased distribution due to the impact of payment of settlementmoney with cancellation of planned property acquisitions

Period ended

Sep. 2008

Mar. 2009

Sep. 2009

Mar. 2010

Sep. 2010

Fiscal Period Ended
Sep. 30, 2008
(183 days)

Fiscal Period Ended
Mar. 31, 2009(182 days)

Fiscal Period Ended
Sep. 30, 2009(183 days)

Fiscal Period Ended
Mar. 31, 2010
(182 days)

Fiscal Period Ending
Sep. 30, 2010(183 days)

Operating revenue (million yen)

3,362

3,432

3,391

3,402

3,334

Ordinary income (million yen)

1,167

1,140

1,075

1,053

956

Net income (million yen)

1,166

574

1,074

1,052

938

Cash distributions per unit (yen)11,147

5,485

10,262

10,052

8,160

Notes: Amounts less than the indicated unit are rounded down.

5Occupancy Rates and NOI Yield
Monthly Occupancy Rates at a Glance
Residential

Retail

Total

100%

95%

90%

85%

80%

75%
Sep.
2008

Oct.

End of Sixth
Fiscal Period

Nov.

Dec.

Jan.
2009

Feb.

Mar.

Apr.

May

End of Seventh
Fiscal Period

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

End of Eighth
Fiscal Period

Jan.
2010

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

End of TenthFiscal Period

End of NinthFiscal Period

Occupancy Rates

NOI Yields

Fiscal period ended September 30, 2010 (tenth fiscal period)

Fiscal period ended September
30, 2010 (tenth fiscal period)

As of September 30, 2010

Average for tenth fiscal period(Apr. 1, 2010 through Sep. 30, 2010)

Residential

96.5%

95.1%

4.9%

Retail

97.3%

95.7%

5.4%

Total

96.9%

95.4%

5.1%

Notes: 1. “Occupancy Rates” indicated in the graph describe the rate of total leased space to the total leasable space for assets held by the Investment Corporation as of the end of each month from September 2008 to
September 2010.
2. The average occupancy rate for the tenth fiscal period ended September 30, 2010 indicates the average of occupancy rates as of the end of each month for the fiscal period from Apr. 1, 2010 through Sep. 30, 2010.
3. The NOI yield in the table is obtained by dividing the annualized NOI by the total acquisition price for the fiscal period from Apr. 1, 2010 through Sep. 30, 2010.
4. Percentage figures are rounded to the nearest first decimal place.

62. Progress of Growth Strategy “Phase I”

Prime Maison
HIGASHISAKURA

プライムメゾン東桜Progress of Growth Strategy

Internal Growth
Strategy

External growth
Strategy

Financial Strategy

Progress of Phase I of the “Growth Strategy for a New Stage” proposed in May 2010
Phase I (1 to 2 years)

Status of Progress

Management Prioritize the promotion of
Policystabilizing our financial standing

Steadily implemented the management policy
and respective strategies

Utilization of the creditworthiness of the new sponsors

 Fix interest rates , extend the terms of loans anddiversify repayment dates
 Release assets from collateral security
 Strengthen and broaden bank relationships

Utilization of the pipelines of the new sponsors
 Enhance information collection through utilization of
the Pipeline Support Agreement
 Evaluate acquisition of property within existing
borrowing capacity
 Proactively exchange opinions with personnel incharge of property development at Sekisui House
Utilization of the know-how and networks of the new sponsors

 Utilize the leasing capability of Sekiwa Real Estate
concerning residential properties
 Enhance the overall management effectiveness bystrategically changing property managementcompanies of retail facilities

Promoted stabilizing of financial standing by utilizing the creditworthiness of Sekisui House Fixed interest rates, extended loan terms and diversified repayment
dates
 Released collateral from all loans Newly added 6 financial institutions as lenders and thereby strengthened
the bank formation
Resumed external growth with the first property acquisition from Sekisui House Acquired 3 properties of the Prime Maison series of high-quality urban
rental condominiums within our borrowing capacity

 Held regular meetings on development of rental residential properties
with personnel in charge of property development at Sekisui House

Implemented various measures in collaboration with the new sponsors

 Employed the Sekiwa Real Estate Group as property management companies
for newly-acquired properties, launching a system of collaboration in theleasing of residential properties Completed planned strategic change of property management companies asscheduled for 6 retail facilities
 Implemented large renewal work on HAMAMATSU Plaza’s HAMAMATSU
West Building and solicited anchor tenants

Strategic Goal
Aim to recover 6-monthly cash distributions
to the ¥10,000 level at an early stage
8

Financial Strategy ~ Initiatives to Promote Stabilizing of Financial Standing (1) ~Overview of Refinancing in July and August 2010
 Before Refinancing
Drawdown
BalanceDate(million yen)(Contract Date)

Aug. 2, 2007
(Jul. 31, 2007)

Mar. 31, 2008
(Mar. 25, 2008)

Jul. 31, 2009
(Jul. 28, 2009) After Refinancing
Repayment
Date (LoanTerm)

InterestRateAozora Bank
Sumitomo Trust and Banking
Chuo Mitsui Trust andBankingAug. 2, 2010*
6,587
Mizuho Corporate Bank
(3 years)
Sumitomo Mitsui Banking
Bank of Tokyo-Mitsubishi
UFJ

Fixed

Lender550

Bank of YokohamaAug. 31, 2010*(2 years 5
Floating
months)Aozora Bank
Sumitomo Trust and Banking Jul. 30, 2010
3,000
Mizuho Corporate Bank
(1 year)
Sumitomo Mitsui Banking

Feb. 26, 2010
(Feb. 23, 2010)

4,542

Total

14,679Floating

Aozora Bank
Aug. 31, 2010
Floating
Sumitomo Trust and Banking (6 months)--

Initiatives for Promoting
Stabilizing of Financial
Standing

1. Released collateral fromall loans
2. Fixed interest rates
3. Extended loan terms
4. Diversified repayment
dates
5. Strengthened bankformation(Invite new financial
institutions)↓
Reduction ofborrowing costs

Drawdown
BalanceDate(million yen)(Contract Date)

Jul. 30, 2010
(Jul. 27, 2010)

LenderSenshu Ikeda Bank
Sumitomo Trust and Banking
Mizuho Corporate Bank
Mizuho Trust & Banking Feb. 28, 2014
10,137 Sumitomo Mitsui Banking(3 years 7
Mitsubishi UFJ Trust andmonths)Banking
Yamaguchi Bank
Resona Bank

Aug. 31, 2010
(Jul. 27, 2010)

4,542

77 Bank
Hiroshima Bank
Bank of Tokyo-Mitsubishi
UFJ
Mitsubishi UFJ Trust andBanking

Total

14,679--

RepaymentInterest
Date
Rate(Loan Term)

Fixed

Feb. 28, 2013
(2 years 6 Floating
months)--*Repaid prior to the repayment date

Reduction of Borrowing Costs
Status of reduction of borrowing costs through such measures as utilizing the creditworthiness of Sekisui House

Period-end balance of interest-bearing debt
Interest expenses

Fiscal Period Ended Mar. 31, 2010
(Ninth Fiscal Period) Results¥51,208 million

Fiscal Period Ended Sept. 30, 2010
(Tenth Fiscal Period) Results¥49,229 million¥328 million

Interest expenses on investment corporation bonds¥85 million

Borrowing related expenses¥215 million

Borrowing costs total¥629 million

Fiscal Period Ending Mar. 31, 2011
Outlook(Eleventh Fiscal Period)¥51,874 million¥338 million
Achieved reductionof ¥17 million¥50 million¥222 million¥611 million¥341 million
Estimating reductionof ¥88 million¥50 million¥130 million¥523 million

Notes: 1. Amounts are rounded down to the nearest million yen.
2. The fiscal period ending March 31, 2011 (eleventh fiscal period) outlook are figures based on the assumption that there ar e no new borrowings other than the refinancing scheduled for February and March 2011.
3. Assumptions are made that the refinancing scheduled for the fiscal period ending March 31, 2011 (eleventh fiscal period) will be implemented under similar economic conditions as the refinancing implemented in the fiscal period ended
September 30, 2010 (tenth fiscal period).

9Financial Strategy ~ Initiatives to Promote Stabilizing of Financial Standing (2) ~Release Collateral from Loans
All loans were collateral loans as at the end of the fiscal period ended March 31, 2010

Released collateral from all loans(security interests granted for 88.4% of assets under management on an acquisition price basis)Fix Interest rates, Extend Loan Terms, and Diversify Repayment Dates
Ratio of Fixed/Floating Rate Loans
Payable (Notes 1 and 2)
Floating

Ratio of Long/Short-Term Loans Payable

Long-term

Fixed

100%

Diversification of Repayment Dates(Notes 3 and 5)(Notes 1, 2 and 5)
Long-term (current portion)

Short-term
20,000100%

Short-term loans payable
Investment corpoartion bonds

As of September 30, 2010
Long-term loans payable (Note 4)

16.9%
46.7%

34.6%

38.7%

26.8%
50%

61.3%

50%

27.4%

10,000
5,000

38.0%

Sep. 30, 2010

Increased the ratio of fixed
rate loans payable

10,137

6,900

6,300

5,000

Periodending Mar.
31, 2011

Sep. 30,
2011

Mar. 31,
2012

6,587

4,542

0

0%
Mar. 31, 2010

8,322

56.3%

53.3%
0%

15,000Mar. 31, 2010

Sep. 30, 2010

Increased the ratio of
long-term liabilities

Sep. 30,
2012

Mar. 31,2013

Sep. 30,
2013

Mar. 31,2014

Diversified repayment dates

Note: 1. Percentage figures are rounded to the nearest first decimal place. 2. Stated as the percentage of total interest-bearing debt. 3. Does not include interest-bearing tenant leasehold and security deposits.
4. Includes current portion of long-term loans payable. 5. The term loan that was drawn down on February 26, 2010 has a loan term that exceeds 1 year by several days, but is presented here under “Shortterm loans payable.” Please note that this is accounted for as “Current portion of long-term loans payable” on balance sheets.

Strengthen Bank Formation
Maintained a bank formation
comprised of major domestic financial institutions,centering on mega banks

New participation of 6 financial institutions,centering on lenders with which Sekisui House are on good terms
Newly-participating financial institutions: Senshu Ikeda Bank, 77 Bank, Hiroshima Bank,
Mizuho Trust & Banking, Mitsubishi UFJ Trust and Banking, and Yamaguchi Bank
10

External Growth Strategy ~ Resumed External Growth with the First Property Acquisition from Sekisui House (1) ~Properties Contracted in the Fiscal Period Ended September 30, 2010 (Tenth Fiscal Period)
Josuihoncho, Kodaira-shi, Tokyo

Completed

Dec. 2007

Closest station

19-min. walk from Kokubunji Station on
the JR Chuo Line

Total leasable floor
space

3,924.58m2

Construction andnumber of floors

RC, 3F

Total number ofleasable units

77

Residence - 50 Prime Maison MUSASHINONOMORI Location

Residence - 51 Prime Maison HIGASHISAKURA

Residence - 52 Prime Maison KAYABAKOEN

Site area

5,116.62m2

Acquisition date

Oct. 1, 2010

Total floor area

4,412.42m2

Acquisition price1.56 billion yen

Main residential
type

Compact and Family Types

Appraisal value

1.6 billion yen(as of Aug. 5, 2010)

Location

Higashisakura, Higashi-ku, Nagoya-shi, Aichi

CompletedFeb. 2008

Closest station

3-min. walk from Takaoka Station on the
Subway Sakura-dori Line

Total leasable floor
space

3,118.11m2

Construction andnumber of floors

SRC, 14F

Total number ofleasable units

64

Site area

846.05m2

Acquisition date

Oct. 1, 2010

Total floor area

3,517.62m2

Acquisition price1.14 billion yen

Main residential
type

Single and Compact Types

Appraisal value

1.23 billion yen(as of Aug. 5, 2010)

Location

Kayaba, Chikusa-ku, Nagoya-shi, Aichi

CompletedNov. 2006

Closest station

12-min. walk from Nagoya Dome-mae
Yada Station on the Subway Meijo Line

Total leasable floor
space

2,163.98m2

Construction andnumber of floors

RC, 10F

Total number ofleasable units

27

Site area

1,129.02m2

Acquisition date

Oct. 1, 2010

Total floor area

2,301.42m2

Acquisition price

640 million yen

Main residential
type

Family TypeAppraisal value

673 million yen(as of Aug. 5, 2010)11

External Growth Strategy ~ Resumed External Growth with the First Property Acquisition from Sekisui House (2) ~Significance of the Acquisition•First Property Acquisition from New Sponsor Sekisui House
Acquired the Prime Maison series of high-quality urban rental condominiums that are designed, developed and operated nationwide by the Sekisui House GroupAcquired 3 properties that will serve to enhance the portfolio’s quality and revenue-generating capacity(acquisition price total: approx. ¥3.3 billion) within our borrowing capacity
After the Acquisition
Before the Acquisition
Entire portfolio:
53 properties
Total acquisition price:
Approx. ¥99.9 billion

Entire portfolio:
56 properties
Total acquisition price:
Approx. ¥103.2 billion(as at October 1, 2010)

Expected Weighted Average NOI Yield for the
Fiscal Period Ending March 31, 2011 (Eleventh Fiscal Period) (Note)
Prime Maison MUSASHINONOMORI

6.9%

Prime Maison HIGASHISAKURA
Prime Maison KAYABAKOEN

Note: Expected NOI for the eleventh fiscal period is calculated for the respective properties based on the respective properties’ valid
lease agreements and factoring in also forecast changes in light of property competitiveness and other factors, the sum total
amount of that annualized amount is then divided by the sum total amount of the acquisition price of the respective properties, andthe ratio arrived at is then rounded to the nearest first decimal place.

・ Employed the Sekiwa Real Estate Group as Property Management Companies
Employed experienced property management companies of
the Sekisui House GroupThe Sekiwa Real Estate Group・6 companies across Japan within the Group (wholly-owned subsidiaries of Sekisui House)
・The real estate leasing division has conducted leasing management for about 460,000
property units throughout Japan, centering on Sekisui House’s rental housing(as of end of July 2010)
・94.9% occupied (portion leased as Sha-Maison*)Name of Acquired Asset

Property Management
Company

Prime Maison MUSASHINONOMORI

Sekiwa Real Estate, Ltd.

Prime Maison HIGASHISAKURA

Sekiwa Real Estate Chubu, Ltd.

*A rental housing brand of Sekisui House

Prime Maison KAYABAKOEN

Sekiwa Real Estate Chubu, Ltd.

Promoted building of a system of collaboration in the leasing of residential properties

・ Procured Funds for Acquisition with the Cooperation of Lending Financial Institutions
Newly procured a ¥2.8 billion long-term loan payable and applied it tofund the purchase of properties

Loan term: Oct. 1, 2010 to Feb. 28, 2013 (2 years 5 months)

LenderMizuho Corporate Bank
Mizuho Trust & Banking
Mitsubishi UFJ Trust and Banking
Resona Bank
Total

Loan Amount¥500 million¥500 million¥1,300 million¥500 million¥2,800 million
12External Growth Strategy ~ Resumed External Growth with the First Property Acquisition from Sekisui House (3) ~Prime Maison Series・ About Prime Maison
The Sekisui House Group independently
designs, develops and operates properties

A brand of high-quality urban rental condominiums that draw on the know-how of Sekisui
House in the solid experience it has accumulated as a leading manufacturer of housing
Based on the concept of delivering quality for permanent residences, Sekisui House has applied the comfort ithas cultivated through development of detached housing and the Grande Maison series of for-salecondominiums to also its rental housing. These are high-quality condominiums that give detailed attention to
not only facilities and specifications, but even the foundation, architectural structure and other points that are
beyond sight, and also consider for the living environment and are particular about location.

・ Case Examples of Facilities and Specifications
Walk-in closet

Elevator call security system

Living room with hot-water floor heating system

Key reader

Prime Maison HIGASHISAKURA

Parking lot shutter gate
A shutter gate
is installed at
the entry/exit
to the parking
lot to prevent
theft, etc.

Prime Maison KAYABAKOEN

Sekisui House, Ltd.

Operation

Sekiwa Real
Estate GroupMAST ClubThe double security at theentrance and elevator blocks
out unauthorized entries.
Contactless key

Development

・ Case Example of Tenant Services

Adopts the elevator call security system that links a contactless
key based personal authentication system with the elevator.

Prime Maison MUSASHINONOMORIDesignPrime Maison HIGASHISAKURA

Services for tenants of properties managed
by the Sekiwa Real Estate GroupMAST Points Service
Tenants of rental housing managed by the Sekiwa Real
Estate Group can earn points according to their rent and canreceive up to 3 months free rent when moving to anotherproperty managed by the Sekiwa Real Estate Group
There are also services available upon purchase ofreal estate or ready-built housing or upon constructionof custom-built housing

Concierge service
Door-to-door parcel delivery, arranging fora taxi, attending to visitors, guide to pet
hotels, etc.
Prime Maison HIGASHISAKURA

Prime Maison are high-quality rental housing that can be found widely in not only the Tokyo metropolitan area, but also Osaka, Nagoya, Fukuoka
and Sapporo. Their management and operation are entrusted to the Sekiwa Real Estate Group, which is comprised of 6 companies across Japan,
covering a broad target including single-person, DINKs and family households.
13Internal Growth Strategy ~ Implemented Large Renewal Work on HAMAMATSU Plaza and Solicited Anchor Tenants (1) ~Content of Renewal Work

Policy on Renewal Plan In an aim for early recovery of the occupancy rate of HAMAMATSU Plaza’s
HAMAMATSU West Building, reviewed and changed the concept of the facility

Before the Renewal
Facilities selling merchandise for daily use Target Mainly housewives and seniors

After the Renewal

Collaborated with new property
management company
XYMAX CUBE Corporation

Community-based area for communication through leisure and culture
TargetA broad range of age groups from students to working people in their 20s to 30s, families and seniors

Implemented renewal work in an effort to tap new target demographics;
Enhanced the attractiveness of the facility
Pursue greater ability to attract customers through synergistic effects with other HAMAMATSU Plaza
buildings by targeting a broad range of age groups and strengthening functions that make customers
want to stay

Aim to enhance the attractiveness of HAMAMATSU Plaza
on the whole and satisfaction of tenantsContent of main construction work
・Façade makeover to revamp the image of HAMAMATSU
West Building
・Changed leasable compartments to make the 2F portion
that used to be a single-tenant floor into a multi-tenant floor・Implemented other construction work, such as for
installation of a bowling alley

Estimated construction cost
Approx. ¥338 million(of which, repair expenses:
approx. ¥27 million)
To be accounted for in
fiscal period ending
March 31, 2011

Image of façade renewal

Soliciting of Anchor Tenants Signed into fixed-term building lease agreement for a
10-year term with Tokori Global Corporation

Layout Plan of
HAMAMATSU Plaza

HAMAPLA Frespo
Building

Agreement term

Akachan Honpo
Building

September 1, 2010 to November 19, 2020

Aim for synergistic effects
by strengthening functions
that make customers want
to stay

HAMAMATSU PlazaSports Building (ZEXIS)

Moved into 2F of HAMAMATSU West Building that
underwent renewal work

Tokori Global Corporation

Aim for synergistic effects
by strengthening functions
that make customers want
to stayXEBIO Building

HAMAMATSU West Building~ major renewal ~Ito-Yokado Building(Paid-in capital: ¥50 million; Incorporation: November 2001)
・Operates “T.T BOWL” and “Masters Bowl” bowling alleys.
Established the industry’s 2nd largest operational base interms of the number of stores in Japan by operating 24
stores nationwide, etc.
(as of September 2010)14

Internal Growth Strategy ~ Implemented Large Renewal Work on HAMAMATSU Plaza and Solicited Anchor Tenants (2) ~“T.T BOWL Hamamatsu Plaza West” Bowling Alley Store Overview
 Store Overview
・Opening: November 20, 2010
・Number of bowling lanes: 28 lanes
・Bowling alley with movable partitions, which Tokori Global was thefirst in Japan to install (supports private room specifications; room
service available and eating/drinking allowed in each private room
while bowling)・Also houses various amusement sections and food/drink sections
Golf simulation (2 booths), billiard tables (2 tables), darts (about 10
boards), restaurant, bar, etc.

Image of Bowling Alley

When in use with partitions

Status of Management of HAMAMATSU Plaza on the Whole (Tenth Fiscal Period Results and Eleventh Fiscal Period Outlook)
Fiscal Period Ended Sep. 30,
2010 (Tenth Fiscal Period)
Results

Fiscal Period Ending Mar. 31,
2011 (Eleventh Fiscal Period)
Outlook

Average occupancy
ratios for the period

92.0%

94.2%

NOI yields

5.1%

4.4%

The figures for the outlook for the fiscal period ending March 31, 2011 (eleventh fiscal period) arecalculated based on valid lease agreements as of November 15, 2010 and factoring in also forecastchanges. NOI yields for the respective fiscal periods is the ratio arrived at when the annualized
amount of NOI for the respective periods is divided by the initial acquisition price of the entire
HAMAMATSU Plaza (rounded to the nearest first decimal place).

Key Factors of Decrease in Expected NOI Yield■Renewal Related・Concerning compartments that became vacant in the fiscal period ended September 30, 2010 (tenthfiscal period) as of November 15, 2010 due to agreement cancellation by Nitori Co., Ltd., review oftenant composition, etc. (leasable floor space: 1,953.14m 2), conservative assumption is made that
there will be a certain period during which these compartments will remain vacant・Will account for ¥27 million in repair expenses for such renewal work

■Existing Tenants Related
・In light of the prolonged economic downturn, etc., assuming that there will be a certain
amount of decrease based on lease agreements for some tenants

Corresponding Policy
Inclusive of the compartments that became vacant in the fiscal
period ended March 31, 2010 (ninth fiscal period) (leasable floor
space: 2,861.95m2), aiming to solicit tenants during the fiscal
period ending March 31, 2011 (eleventh fiscal period) andcurrently in talks with potential tenants that will set up store

Corresponding Policy
Enhance relationships with existing tenants
While the basic policy is to keep the current rent, take acase-by-case approach depending on the status of tenants*Announcement was made in the press release dated September 30, 2010 that the leasable floor space will change as a result of increase in the common-use portion, etc. after renewal work is
implemented for such purposes as changing the leasable compartments and turning the floor into a multi-tenant floor for the 2F portion of HAMAMATSU West Building. Subsequent review of
the content of the construction work increased the leasable floor space by 2.66m2 to: ・Total for HAMAMATSU Plaza after renewal: 81,932.40m2 ・Total for retail facilities after renewal:
151,882.62m2 ・Total for portfolio after renewal: 271,378.48m2

15

3. Status of Portfolio Management

Prime Maison
HIGASHISAKURA

プライムメゾン東桜Portfolio Summary
As of September 30, 2010 (End of Tenth Fiscal Period)
Total Acquisition Price (Note 1)

Occupancy Rate

Average Property Age (Note 2)¥99,920 million

96.9%

6.3 years

Total Number of Properties

PML (Entire Portfolio)

Average Property Age (Note 2)

53 properties

5.2%

4.6 years

Diversification by Region (Note 3)

Diversification by Age (Note 3)(As of Oct. 1, 2010: ¥103,260 million)(As of Oct. 1, 2010: 56 properties)

Diversification by Asset Class (Note 3)
Residential
As of IPO

As of Sep. 30,
2010(End of
Tenth Fiscal Period)

As of Oct. 1,
2010(Note 4)49.0%

Retail51.0%(Residential Properties Only)

Less than 1 year
1 year to less than 5 years
5 years to less than 10 years
10 years or more

Central Tokyo / Jonan Area
Greater Tokyo
Major Regional Cities

37.9%

12.9%

49.2%

37.2%

56.1%

6.6%

70.9%

29.1%

37.6%

26.4%

36.0%

57.2%

35.0%

7.8%

71.9%

28.1%

36.4%

27.1%

36.5%

58.7%

33.8%

7.5%

Notes: 1. Concerning total acquisition prices, amounts of less than one million yen are rounded down.
2. Average property ages are the result of calculating the weighted average using investment ratios based on acquisition prices and rounded down to the nearest first decimal place.
3. Investment ratios by each category are calculated based on the acquisition price of each investment asset and rounded to the nearest first decimal place. Accordingly, ratio totals
may not add up to 100%.
4. Figures are inclusive of the trust beneficiary interests in real estate in Japan that were acquired on October 1, 2010 (Prime Maison MUSASHINONOMORI, Prime Maison
HIGASHISAKURA and Prime Maison KAYABAKOEN).

17
17

Occupancy by Region and by Floor Space (Residential Properties)

Central Tokyo /Jonan Area

105%
Fiscal Period End (Total): 87.4%

Greater Tokyo

30m2 to less than 50m2

50m2 or more

Fiscal Period End (Total): 94.0%

Fiscal Period End (Total): 95.9%

Regional Data

95%
90%
85%

Fiscal Period Average (Total)
Ninth: 90.1%; Tenth: 93.9%

80%
75%

Sep. 30, 2009(End of Eighth
Fiscal Period)

Dec. 31

Fiscal Period End (Total): 92.6%

Mar. 31, 2010(End of NinthFiscal Period)

June 30

Fiscal Period End (Total): 93.5%

Sep. 30, 2010(End of TenthFiscal Period)

Fiscal Period End (Total): 96.5%

95%
90%

Fiscal Period Average (Total)
Ninth: 92.2%; Tenth: 95.2%

85%
80%
75%

Sep. 30, 2009(End of Eighth
Fiscal Period)

Dec. 31

Fiscal Period End (Total): 95.5%

Mar. 31, 2010(End of NinthFiscal Period)

Fiscal Period End (Total): 96.5%

June 30

Sep. 30, 2010(End of TenthFiscal Period)

Fiscal Period End (Total): 97.1%

100%
95%
90%

Fiscal Period Average (Total)
Ninth: 94.4%; Tenth: 96.4%

85%
80%
75%

Sep. 30, 2009(End of Eighth
Fiscal Period)

Dec. 31Mar. 31, 2010(End of NinthFiscal Period)

June 30

Sep. 30, 2010(End of TenthFiscal Period)

20
49.4%
1,151 units
4.6 years

Through flexible review of advertised terms and various
other measures, the occupancy rate of residential unitsof 50m2 or more, which had dropped to the 76% level asof September 30, 2009, significantly improved(Sep. 30, 2009: 76.1% ⇒Sep. 30, 2010: 94.9%)

Regional Data
Number of properties:
Investment ratio:
Leasable residential units:
Average property age:

100%

105%

Total (incl. stores, etc.)

Number of properties:
Investment ratio:
Leasable residential units:
Average property age:

100%

105%

Major Regional
CitiesLess than 30m2

14
30.0%
1,155 units
5.3 years

The demand outflow from high-rent properties continues
to flow into this region and enhancement of property PR
and management led to contract closing and renewal,
resulting in the occupancy rate rising overall

Regional Data
Number of properties:
Investment ratio:
Leasable residential units:
Average property age:

11
20.5%
988 units
3.8 years

Addressing vacant residential units early by working
together with local property management companies led
to the Ninth Fiscal Period’s high occupancy rate being
maintained in the Tenth Fiscal Period, as well

Note: Occupancy rates by floor space do not include floor space for stores or offices in residential properties. Fiscal period average occupancy rates are the averages of the occupancy rates at the end of each month of the fiscal period.
Regional data are figures for only residential properties as of September 30, 2010 (the end of the tenth fiscal period). Investment ratios are calculated based on acquisition prices and rounded to the nearest first decimal place.
Accordingly, ratio totals may not add up to 100%. Average property ages are the result of calculating the weighted average using investment ratios based on acquisition prices and rounded down to the nearest first decimal place.

18

Rent Revisions (Residential Properties)
Central Tokyo /Jonan Area

Entire Portfolio(Residential Properties)

Total monthly contracted rent

110

100

102.4

102.8

100

99.2

97.9

Sep. 30, 2009(End of Eighth
Fiscal Period)

Mar. 31, 2010(End of NinthFiscal Period)

Sep. 30, 2010(End of TenthFiscal Period)

100

104.4

104.6

97.7

96.0

Greater Tokyo

Major Regional Cities

Average rent rate per contract

100

100.4

101.9

100

99.3

98.2

Sep. 30, 2009(End of Eighth
Fiscal Period)

Mar. 31, 2010(End of NinthFiscal Period)

Sep. 30, 2010(End of TenthFiscal Period)

100

101.0

100.3

100

99.8

98.6

Sep. 30, 2009(End of Eighth
Fiscal Period)

Mar. 31, 2010(End of NinthFiscal Period)

Sep. 30, 2010(End of TenthFiscal Period)

100

90

100

80
70
Sep. 30, 2009(End of Eighth
Fiscal Period)

Mar. 31, 2010(End of NinthFiscal Period)

Sep. 30, 2010(End of TenthFiscal Period)

Average rent rate per contract
Period-on-period change: −1.3 points
Total monthly contracted rent
Period-on-period change: +0.4 points

Average rent rate per contract
Period-on-period change: −1.7 points
Total monthly contracted rent
Period-on-period change: +0.2 points

Average rent rate per contract
Period-on-period change: −1.1 points
Total monthly contracted rent
Period-on-period change: +1.5 points

Average rent rate per contract
Period-on-period change: −1.2 points
Total monthly contracted rent
Period-on-period change: −0.7 points

Despite the average rent rate per contract
decreasing, the rise in occupancy rates inall regions led to a slight increase in the
total monthly contracted rent

The average rent rate per contract
decreased compared to at the end of
the Ninth Fiscal Period, but the degreeof the decrease has narrowed

Although the average rent rate percontract was lower than at the end of theNinth Fiscal Period, the marked rise inoccupancy rates resulted in an increase in
the total monthly contracted rent

Both indices fell compared to at the endof the Ninth Fiscal Period, but the totalmonthly contracted rent maintained at
the Eighth Fiscal Period’s level

Future Basic
PolicyAs well as aiming to maintain high levels of occupancy rates, we enhance revenue stability withappropriate rents based on respective property characteristics

Note: Figures on the above graph present changes from September 30, 2009 (the end of the Eighth Fiscal Period) based on the total contracted rent and average rent rate per contract asof September 30, 2009 being set as 100. Stores or offices in residential properties are not included.
19

Implementation of Various Measures for Internal Growth (Residential and Retail Properties)
Various Measures at Residential Properties

Measures to Reduce Costs
Measures to Reduce Costs by Maintaining or Increasing Contract Renewal Rates

Cost Reduction by Reviewing Basic Contracted Electric Capacity

With contract renewal rates in the Tenth Fiscal Period ended September 30, 2010
increasing slightly compared to the Ninth Fiscal Period ended March 31, 2009,
continue to aim to improve profitability by striving to reduce restoration and othercosts through maintaining and increasing contract renewal rates

Lowering of the basic contracted electric capacity by installing new equipment,
which has been implemented from the Eighth Fiscal Period ended September
30, 2009, was implemented in the Tenth Fiscal Period also
⇒ Aim to significantly reduce basic electricity costs in common-use areas【 Contract Renewal Rates 】
Properties at which installation work was implemented in theTenth Fiscal Period ended Sep. 30, 2010 (total of 4 properties)

90%
80%
70%
81.5%
60%

74.1%

80.3%

83.8%

79.2%

Note:

Sep. 30,
2008

Mar. 31,2009

Sep. 30,
2009

Mar. 31,
2010

J-FLATS SHIJONISHINOTOINPREGIO NISHINAKAJIMA

J-FLATS HAKATAHIGASHI

81.8%

50%
Mar. 31,
2008

J-FLATS MINAMIHORIE

Sep. 30,
2010

Renewal rate: The number of residential units for which contracts were renewed against the
number of residential units due for contract renewal during the fiscal period

Measures to Improve Cash Flows

Expects cost reduction of about ¥750,000 / year in total electricity costs(Expects cost reduction of about ¥3,530,000 / year when combinedwith that implemented in the Eighth and Ninth Fiscal Periods(about ¥2,780,000 / year))

Various Measures at Retail Properties
Held “Events” at Retail Properties to Boost the Ability to Attract Customers
and Contribute to the Community

Installation of Base Station for Mobile Phones
Installed a wireless base station for mobile phones on the roof of aportfolio property⇒ Aim to increase ancillary income

 Held a summer fireworks show at HAMAMATSU Plaza on July 10, 2010
 Held a music performance in tandem with a local festival at Joy Square YUGAWARA on August 3, 2010
 Held a festival in tandem with a special Buddhism day at Bell Plaza Shopping Center on August 7, 2010
←Event at HAMAMATSU PlazaProperty where installed: Spacia GINZA
Contract maturity: July 2015
Annual rent: ¥1,200,000 / year

Base Station
for Mobile Phones

Event at Joy Square YUGAWARA→↑Event at Bell Plaza
Shopping Center204. Forecasts for the Eleventh Fiscal PeriodEnding March 31, 2011 and Future Policy

Prime Maison
HIGASHISAKURA

プライムメゾン東桜Forecasts for the Eleventh Fiscal Period Ending March 31, 2011
Cash Distributions per Unit

Operating Revenue, Ordinary Income and Net Income
Operating revenue(million yen)

4,000

Ordinary income

Net income(yen)Decreased income due to payment of settlement money withcancellation of planned property acquisitions

16,0003,500

14,0003,000

12,0002,500

10,000

2,000

8,000

1,500

6,000

1,000

4,000

500

2,000

0

Period ended
Sep. 2008
Mar. 2009

Sep. 2009

Mar.2010

Sep. 2010

Period ending
Mar. 2011(outlook)

0

Decreased distribution due to the impact of payment of settlementmoney with cancellation of planned property acquisitions

Period ended
Sep. 2008
Mar. 2009

Sep. 2009

Mar. 2010

Sep. 2010

Period ending
Mar. 2011(outlook)

Fiscal Period Ended
Sep. 30, 2008
(183 days)

Fiscal Period Ended
Mar. 31, 2009(182 days)

Fiscal Period Ended
Sep. 30, 2009(183 days)

Fiscal Period Ended
Mar. 31, 2010
(182 days)

Fiscal Period Ending
Sep. 30, 2010(183 days)

Fiscal Period Ending
Mar.31, 2011 (outlook)(182 days)

Operating revenue (million yen)

3,362

3,432

3,391

3,402

3,334

3,448

Ordinary income (million yen)

1,167

1,140

1,075

1,053

956

1,088

Net income (million yen)

1,166

574

1,074

1,052

938

1,087

Cash distributions per unit (yen)11,147

5,485

10,262

10,052

8,160

9,450

<Assumptions for forecast of fiscal period ending March 31, 2011>◆Assets under management: 56 properties owned as of October 1, 2010 ◆Management fees: Approx. ¥322 million◆Noncurrent asset tax, etc. that will be allocated as expenses related to rent business: Approx. ¥203 million ◆ Depreciation and amortization: Approx. ¥642 million◆Interest expenses, loan origination fees, etc.: Approx. ¥523 million ◆Number of investment units issued and outstanding: 115,070 units
Notes: 1. Amounts less than the indicated unit are rounded down.
2. The above figures are calculated based upon specific assumptions as of November 15, 2010. Actual operating revenue, ordinary income, net income and cash distributions per unit may differ as a result ofsubsequent acquisitions or sales of real estate, trends in real estate markets, changes in the operating environment or other conditions affecting the Investment Corporation. The above forecasts are notintended to be guarantees of business results or cash distributions.

22

Future Policy
Various measures to achieve strategic goals

Phase I Strategic Goal

Aim to recover
cash distributions
to the ¥10,000 levelat an early stage

Measures to achieve cash distributions of a ¥10,000 level
1. Steady implementation of refinancing in February and March 2011
With prospects of stabilizing of financial standing, aim to implement at the sameor better terms compared to the refinancing in July and August 2010

2. Property acquisition utilizing borrowing capacity
Continue to consider property acquisitions with LTV targeted at no more thanthe low 50% level

3. Maintain and enhance the profitability of residential properties
Maintain high occupancy ratio and set appropriate rent level according to property
characteristics

4. Increasingly enhance the occupancy ratio of retail facilities
Promote soliciting of new tenants to HAMAMATSU Plaza’s HAMAMATSU West
Building

Fiscal Period Ending March 31, 2011
(Eleventh Fiscal Period)

Forecast cash distribution: ¥9,450
Key Factors of Increase in Forecast Cash Distributions
for the Fiscal Period Ending March 31, 2011 (Eleventh Fiscal Period)
・Operate throughout the fiscal period of the 3 properties acquired in
October 2010
・Lower borrowing costs from the refinancing in July and August 2010

Fiscal Period Ended September 30, 2010
(Tenth Fiscal Period)

Actual cash distribution: ¥8,160
Make the transition to Phase II. Aim to maintain and enhance cash distributions, and for full-scale increase in asset size.
23

[Reference] Rental Housing Properties Owned by Sekisui House and Loan Repayment Schedule
Rental Housing Properties Owned by Sekisui House

Residencia Ginza East

Prime Maison YUHIGAOKA Prime Maison YADAMINAMI
Osaka-shi, Osaka

Chuo-ku, Tokyo

Nagoya-shi, Aichi

Prime Maison GOKISO

Prime Maison TERIHA

Nagoya-shi, Aichi

Fukuoka-shi, Fukuoka

Note: There is no specific plan to acquire the above properties.

Schedule of Loan Repayments in the Eleventh and Twelfth Fiscal Periods
Loans to be Due for Repayment in the Eleventh Fiscal Period Ending March 31, 2011 and Twelfth Fiscal Period Ending September 30, 2011
As of Sep. 30, 2010

(Billion yen)

Eleventh Fiscal Period¥15.2 billion

14
12

Borrowed in Feb. 2010
Mizuho Corporate Bank
Sumitomo Mitsui Banking

108

Borrowed in Feb. and Mar. 2008
Aozora Bank
Sumitomo Trust and Banking
Chuo Mitsui Trust and Banking
Mizuho Corporate Bank
Sumitomo Mitsui Banking

6

4
2

Amortization

Twelfth Fiscal Period¥6.3 billion
Short-term loans payable

5.1(Note 1)

Borrowed in May 2008
Development Bank ofJapanMizuho Corporate Bank
Sumitomo Mitsui Banking

Borrowed in Mar. 2010
Mizuho Corporate Bank
Sumitomo Mitsui Banking
Bank of Tokyo-Mitsubishi UFJ

6.9
3.2

0.01

Long-term loans payable
Borrowed in July 2006
Mizuho Corporate Bank
Sumitomo Mitsui Banking
Resona Bank
Norinchukin Bank

3.4

2.8

0
Oct.2010

Nov.

Dec.

Jan.2011

Feb.

Mar.

Apr.

May

June

July

Aug.

Sep.

Notes: 1. The loan balance of a term loan borrowed on February 26, 2010 has a loan term that exceeds 1 year by a few days, but is presented here under “short-term loans payable”. The loanbalance is included in the current portion of long-term loans payable on balance sheets.
2. Amounts less than the indicated unit are rounded down.

24[Reference] Growth Strategy for a New Stage
Announced in May 2010 with additions in November 2010
Phase I (1 to 2 years)
Management
PolicyPrioritize the promotion ofstabilizing our financial standing- Assuming implementation of 3 to 5 years -Phase II (2 to 3 years)
Management
PolicyEnhance profitability bysignificantly increasing asset size

 Fix interest rates , extend the terms of loans
and diversify repayment dates
 Release assets from collateral security
 Strengthen and broaden bank relationships

 Enhance our financial standing by implementing
public offerings at an appropriate timing, size andstructure Discuss diversifying financing methods

External growth
Strategy

Utilization of the pipelines of the new sponsors
 Enhance information collection throughutilization of the Pipeline Support Agreement
 Evaluate acquisition of property within existing
borrowing capacity
 Proactively exchange opinions with personnel
in charge of property development at SekisuiHouse Add high quality residential properties to the portfolio
 Discuss utilizing the warehousing function of the newsponsors

Internal Growth
Strategy

Utilization of the know-how and networks of the new sponsors
 Utilize the leasing capability of Sekiwa Real
Estate concerning residential properties
 Enhance the overall management
effectiveness by strategically changing
property management companies of retailfacilities

Strategic
Goal

Aim to recover 6-monthly cash distributions
to the ¥10,000 level at an early stage*Thinking on “conversion to an integrated
REIT corporation focusing on housing”

 Utilize Sekiwa Real Estate Group as the property
management company of residential properties
acquired from the new sponsors
 Increase the value of retail facilities

Conversion to an integrated REIT corporation
focusing on housing*

Financial
Strategy

Utilization of the creditworthiness of the new sponsors

Aim to grow earnings based on doubling of asset size to ¥200
billion with due consideration given to cash distribution level

Aim to develop into a REIT that has a strong financial standing through increase of asset size focusedon maximizing unitholder returns by building a portfolio centering on high-quality residential properties.
25

5. Appendix

Prime Maison
HIGASHISAKURA

プライムメゾン東桜Balance Sheets (1)9th fiscal period (As of March 31, 2010)
Million yen

Percent of total

10th fiscal period (As of September 30, 2010)
Million yen

Percent of total

ChangeMillion yen

Period on period (%)

AssetsCurrent assets
Cash and deposits

2,380

2,539

Cash and deposits in trust

3,298

3,319

21

Operating accounts receivable

69

55

-13

Prepaid expenses

306

212

-94

Deferred tax assets

5

0

-5

Other

0

8

8

-15

-24

-9

Allowance for doubtful accounts
Total current assts

6,045

5.8

6,111

158

5.9

66

1.1

Noncurrent assets
Property, plant and equipment
Buildings in trust

41,10841,121

13

Accumulated depreciation-4,194-4,778-583

Buildings in trust, net

36,91336,343

-569

451

467

15

Accumulated depreciation

-114

-127

-13

Structures in trust, net

1

Structures in trust

337

339

Machinery and equipment in trust

421

421

-

Accumulated depreciation

-97

-111

-14

Machinery and equipment in trust, net

-14

323

309

Tools, furniture and fixtures in trust

23

24

0

Accumulated depreciation

-7

-9

-1
-0

Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Total property, plant and equipment

16

15

60,99760,997

-

-

110

110

98,588

94.1

98,115

93.9

-472

-0.5

Intangible assets
Other

1

Total intangible assets

1

5
0.0

5

4
0.0

4

397.1

Investments and other assets

Lease and guarantee deposits

10

10

-

Long-term prepaid expenses

22

93

71

Other

75

Total investments and other assets

107

0.1

182

0.2

75

69.8

98,69794.2

98,304

94.1

-392

-0.4

Total noncurrent assets

79

4

Deferred assets
Investment corporation bond issuance costs

8

Total deferred assets

8

0.0

5

0.0

-2

-25.7

104,750

100.0

104,422

100.0

-328

-0.3

Total Assets

5

-2

27

Balance Sheets (2)9th fiscal period(As of March 31, 2010)
Million yen

10th fiscal period(As of September 30, 2010)

Percent of total

Million yen

ChangePercent of total

Period on period(%)

Million yen

Liabilities
Current liabilities
Operating accounts payable

63

57

-5

Short-term loans payable

12,5543,200-9,354Current portion of long-term loans payable

19,18518,322-863

Accounts payable – other

271

269

-1

Accrued expenses

150

149

-1

Income taxes payable

5

11

6

Consumption taxes payable

3

18

14

Advances received

418

410

-8

Other

19

6

-13

Total current liabilities

32,67231.2

22,44621.5-10,226-31.3

Noncurrent liabilities
Investment corporation bond

5,000

5,000

-

Long-term loans payable

12,887

21,266

8,379

Tenant leasehold and security deposits in trust

4,434

Total noncurrent liabilities

22,321

21.3

30,512

29.2

8,191

36.7

54,994

52.5

52,95950.7-2,034-3.7

48,70446.5

50,523

48.4

1,819

3.7

Total Liabilities

4,246

-187

Net Assets
Unitholders’ equity
Unitholders’ capital
Surplus
Unappropriated retained earnings (undisposed loss)

1,052

939

-113

Total surplus

1,052

1.0

939

0.9

-113

-10.8

Total unitholders’ equity

49,75647.5

51,462

49.3

1,706

3.4

49,75647.5

51,462

49.3

1,706

3.4

104,750

100.0

104,422

100.0

-328

-0.3

Total Net Assets
Total Liabilities and Net Assets

28

Statements of Income
9th fiscal period
from October 1, 2009
to March 31, 2010

10th fiscal period
from April 1, 2010
to September 30, 2010

Percent of
total

Million yen

ChangePercent of
total

Million yen

Period on period(%)

Million yen

Operating revenue
Rent revenue - real estate

3,402

Total operating revenue

3,402

3,334
100.0

3,334

-68
100.0

-68

-2.0

Operating expenses
Expenses related to rent business

1,383

1,401

18

Asset management fee

212

207

-5

Asset custody fee

10

10

-0

Administrative service fees

28

26

-1

Directors’ compensations

6

5

-1

Provision of allowance for doubtful accounts

7

14

7

Other operating expenses

66

92

25

Total operating expenses

1,714

50.4

1,757

52.7

42

2.5

1,688

49.6

1,576

47.3

-111

-6.6

Operating Income
Non-operating income
Interest income

1

1

0

Reversal of distributions payable

0

0

-0

Other

-

Total non-operating income

1

0
0.1

1

0
0.1

0

28.5

Non-operating expenses

Interest expenses

328

338

10

Interest expenses on investment corporation bonds

85

50

-34

Amortization of investment corporation bond issuance costs
Borrowing related expenses
Other

Total non-operating expenses

4

2

-2

215

222

7

1

8

6

636

18.7

622

18.7

-13

-2.2

Ordinary Income

1,053

31.0

956

28.7

-97

-9.2

Income before Income Taxes

1,053

31.0

956

28.7

-97

-9.2

6

107.1

Income taxes - current

5

Income taxes - deferred-49-216.3

Total income taxes

1

0.1

17

0.5

16

1,121.7

1,052

30.9

938

28.2

-113

-10.8

0

0.0

0

0.0

-0

-0.1

1,052

30.9

939

28.2

-113

-10.8

Net Income
Retained earnings brought forward
Unappropriated Retained Earnings (undisposed loss)

12
5

29

Statements of Cash Flows / Cash Distributions
Statements of Cash Flows
9th fiscal period
from October 1,
2009
to March 31, 2010

10th fiscal period
from April 1, 2010
to September 30,
2010

9th fiscal period
from October 1, 2009
to March 31, 2010

10th fiscal period
from April 1, 2010
to September 30,
2010

Million yen

Million yen

Million yen

Million yen

Net cash provided by (used in) operating activities

Net cash provided by (used in) financing activities

Income before income taxes

1,053

956

Depreciation and amortization

612

613

Proceeds from short-term loans payable

9,554

-

Repayments of short-term loans payable-9,751-9,354

Proceeds from long-term loans payable

5,148

14,679-50-7,163

Investment unit issuance expenses-

7

Amortization of investment corporation bond issuance
costs

4

2

Increase (decrease) in allowance for doubtful accounts

3

9

Redemption of investment corporation bonds-5,000-Interest income-1-1

Proceeds from issuance of investment units

-

1,811

Interest expenses

Repayments of long-term loans payable

414

389

Dividends paid

-1,072-1,052

Decrease (increase) in operating accounts receivable

3

13

Net cash provided by (used in) financing activities-1,171-1,078Decrease (increase) in prepaid expenses

85

47

Increase (decrease) in operating accounts payable35-5Net increase (decrease) in cash and cash equivalents

336

179

Increase (decrease) in accounts payable - other

-18

-0

Cash and cash equivalents at beginning of period

5,342

5,678

Increase (decrease) in accrued expenses-6-0Cash and cash equivalents at end of period

5,678

5,858

Increase (decrease) in consumption taxes payable-914

Increase (decrease) in advances received

1

-8

-68

-23

Decrease (increase) in long-term prepaid expenses
Other, net
SubtotalInterest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities

6

-22

2,116

1,991

1

1

-417

-381

-2

-6

1,697

1,605

Cash Distributions

-19

-148

9th fiscal period
from October 1, 2009
to March 31, 2010

-

-5

Yen

92

92

-257

-280

-5

-4

Net cash provided by (used in) investment activities
Purchase of property, plant and equipment in trust
Purchase of intangible assets

Proceeds from tenant leasehold and security deposits intrust received
Repayments of tenant leasehold and security deposits intrust received
Decrease (increase) in investments and other assets
Net cash provided by (used in) investment activities

-190

-346

10th fiscal period
from April 1, 2010
to September 30,
2010
Yen

I Unappropriated retained earnings

1,052,220,109

939,029,614

II Cash Distributions

1,052,142,840

938,971,200(10,052)(8,160)77,26958,414

Cash distributions per unit
III Retained earnings brought forward30Summary of Selected Financial Data
9th fiscal period
from October 1, 2009
to March 31, 2010

10th fiscal period
from April 1, 2010
to September 30, 2010

182

183

Total assets

104,750 million yen

104,422 million yen

Net assets

49,756 million yen

51,462 million yen

Unitholders’ capital

48,704 million yen

50,523 million yen

Investment units outstanding

104,670 units

115,070 units

Net assets per unit

475,363 yen

447,227 yen

1,052 million yen

938 million yen

Business days

Total cash distributions

10,052 yen

8,160 yen

Ordinary income to total assets1(annualized)

2.0%

1.8%

Return on unitholders’ equity2(annualized)

4.2%

3.7%

Unitholders’ equity ratio3

47.5%

49.3%

53

53

263,196.48m2

262,169.15m2

96.6%

96.9%

Depreciation expense

611 million yen

612 million yen

Capital expenditures

44 million yen

29 million yen

2,631 million yen

2,545 million yen

1,664 million yen

1,552 million yen

15,903 yen

13,496 yen

51,208 million yen

49,229 million yen

48.9%

47.1%

51.3%

49.4%

3.9 times

3.7 times

Cash distributions per unit

Total number of properties
Total rentable floor area
Period-end occupancy rate

Leasing Net Operating Income4 (NOI)
5

Funds from Operation (FFO)
FFO per unit
Total interest-bearing debt
6

Loan to Value (LTV)Interest-bearing debt ratio

7

Debt Service Coverage Ratio8 (DSCR)(1) Ordinary income to total assets = Ordinary income (annualized) /Average total assets
Average total assets = (Period-beginning total assets + Period-end total
assets) / 2(2) Return on unitholders’ equity = Net income (annualized) / Average net
assetsAverage net assets = (Period-beginning net assets + Period-end net
assets) / 2(3) Unitholders’ equity ratio = Period-end net assets / Period-end total
assets(4) Leasing NOI = Leasing operating income (= Rent revenue-real estate –Expenses related to rent business) + Depreciation and amortization(Expenses related to rent business)(5) FFO = Net income + Depreciation and amortization(6) LTV = Period-end interest-bearing debt / Period-end total assets
Interest-bearing debt = Borrowings + Investment corporation bonds +Interest-bearing leasehold and security deposits(7) Interest-bearing debt ratio = Period-end interest-bearing debt / (Periodend interest-bearing debt + Unitholders’ capital)(8) DSCR = (Net income + Repayment of interest-bearing debt + Interest
expenses + Depreciation and amortization) / (Repayment of interestbearing debt + Interest expenses)
Note: Ratios are rounded to the nearest first decimal place.

31Outline of Portfolio (1)Primary Properties Owned (Residential Properties)
Central Tokyo / Jonan Area
Spacia GINZA

Spacia GOTANDA

Greater Tokyo
J-FLATS YOKOHAMA

Spacia OISENDAIZAKA

Spacia AZABUJUBAN III

Major Regional Cities
J-FLATSITABASHIKUYAKUSHOMAES-RESIDENCE
KYOBASHIJ-FLATS KAMIGOFUKU

32

Outline of Portfolio (2)Classification by Region (Retail Properties)

Properties Owned (Retail Properties)
Central Tokyo / Jonan Area

Major
Regional
Cities73.6%

Central Tokyo/
Jonan Areab-town JINGUMAE II

b-town MINAMIAOYAMA

8.9%
Greater
Tokyo

17.5%

As of Sep. 30, 2010

Greater Tokyob-toss IKEBUKURO

Major Regional Cities
KOJIMA NEW
KAMIFUKUOKA

Joy Square YUGAWARA

HAMAMATSU PlazaRINKU
HAGURAZAKI Plaza

Bell Plaza
Shopping Center

Note: Ratios are calculated based on the acquisition price of each property (retail facility) and are rounded to the nearest first decimal place. Accordingly, ratio totals may not add up to 100 percent.

33

Portfolio at a Glance (1)Properties Owned as of September 30, 2010
Acquisition Price

Core Assets

Property
No.

Property Name

Location

Site Area (m2)

Total Floor Area
(m2)

Price
(Million yen)

Ratio
(%)

Appraisal
Value at End
of Period(Million yen)Occupancy Rate (%)
As of Mar.
31, 2010

As of Sep.
30, 2010

Completion Date

Residence-1

Spacia GINZA

Ginza, Chuo-ku, Tokyo

636.36

7,836.57

5,290

5.3

5,080

95.1

97.7

February 07, 2005

Residence-3

Spacia AZABUJUBAN II

Roppongi, Minato-ku, Tokyo

677.452,317.87

1,730

1.7

1,480

88.6

94.7

January 16, 2004

Residence-4

Spacia EBISU II

Higashi, Shibuya-ku, Tokyo

561.582,452.69

1,960

2.0

1,750

83.6

92.3

June 13, 2003

Residence-5

Spacia EBISU III

Hiroo, Shibuya-ku, Tokyo

169.00871.90

700

0.7

745

96.8

96.1

October 20, 2004

Residence-6

Spacia KANDA

Kandatacho, Chiyoda-ku, Tokyo

307.692,028.19

1,360

1.4

1,250

91.1

94.4

February 20, 2004

Residence-7

Spacia SENDAGAYA

Daikyo-cho, Shinjuku-ku, Tokyo

340.49844.13

576

0.6

506

94.1

88.8

August 31, 2004

Residence-8

Spacia KITASHINJUKU

Kitashinjuku, Shinjuku-ku, Tokyo

504.412,204.07

1,290

1.3

1,330

95.2

100.0

August 06, 2004

Residence-9

Spacia MEGUROFUDOMAE

Nishigotanda, Shinagawa-ku, Tokyo

217.381,044.37

766

0.8

744

97.5

100.0

January 12, 2005

Residence-10

FITL KOMAGATA

Komagata, Taito-ku, Tokyo

663.54

3,406.10

1,870

1.9

1,830

95.5

96.2

July 28, 2004

Residence-11

Spacia MACHIDA

Haramachida, Machida-shi, Tokyo

587.484,033.59

1,360

1.4

1,300

95.5

99.2

February 23, 2004

Residence-12

Spacia KAWASAKI

Ogawa-cho, Kawasaki-ku, Kawasaki-shi,
Kanagawa

683.694,656.10

2,130

2.1

2,110

94.5

99.3

July 15, 2004

Residence-13

IMAIKE IRIS NIBANKAN

Imaike, Chikusa-ku, Nagoya-shi, Aichi

360.54

1,375.76

300

0.3

206

90.2

86.8

October 15, 1991

Residence-14

GRACIA FIS

Furuichiba, Saiwai-ku, Kawasaki-shi,
Kanagawa

1,992.09

3,737.47

1,018

1.0

953

100.0

100.0

March 05, 1999

Residence-15

J-FLATS YOKOHAMA

Tsuruya-cho, Kanagawa-ku, Yokohama-shi,
Kanagawa

611.41

3,076.45

2,090

2.1

1,850

100.0

100.0

January 23, 2007

Residence-16

FITL KAMEIDO

Kameido, Koto-ku, Tokyo

438.432,899.67

1,650

1.7

1,440

95.9

97.8

November 30, 2005

Residence-17

Spacia MEGURO

Mita, Meguro-ku, Tokyo

578.01

1,283.92

887

0.9

926

97.5

95.5

November 28, 2005

Residence-18

ACT HILLS YACHIYO

Midorigaoka, Yachiyo-shi, Chiba

1,289.14

5,420.53

1,348

1.3

1,030

77.5

88.8

January 10, 1998

Residence-19

J-FLATS SUGAMO

Sugamo, Toshima-ku, Tokyo

965.702,785.83

1,510

1.5

1,440

94.8

95.0

February 22, 2007

Residence-20

S-RESIDENCE KYOBASHI

Higashinoda-cho, Miyakojima-ku, Osaka-shi,
Osaka

799.685,995.82

2,774

2.8

2,560

98.7

96.0

March 02, 2006

Residence-21

EL CIELO MEGUROHONCHO

Megurohoncho, Meguro-ku, Tokyo

865.22

1,975.84

1,220

1.2

954

84.2

89.9

February 22, 2006

Residence-22

Spacia HAKURAKU

Rokkakubashi, Kanagawa-ku, Yokohama-shi,
Kanagawa

457.54

1,593.68

844

0.8

750

94.8

98.2

February 02, 2006

Residence-23

J-FLATS MINAMIHORIE

Minamihorie, Nishi-ku, Osaka-shi, Osaka

475.06

1,994.14

1,055

1.1

902

100.0

98.4

February 19, 2007

Residence-24

Spacia GOTANDA5

Nishigotanda, Shinagawa-ku, Tokyo

593.325,590.34

3,043

3.0

2,630

93.0

97.8

March 02, 2006

34

Portfolio at a Glance (2)Acquisition Price

Core Assets

Property
No.

Property Name

Location

Site Area(m2)

Total Floor
Area (m2)Price(Million
yen)

Ratio
(%)

Occupancy Rate (%)

Appraisal
Value at End
of Period(Million yen)

As of Mar.
31, 2010

As of Sep.
30, 2010

Completion Date

Residence-25

Spacia OISENDAIZAKA

Higashioi, Shinagawa-ku, Tokyo

558.393,440.73

2,440

2.4

2,160

97.0

97.9

August 10, 2006

Residence-26

FITL SHINAGAWA SEASIDE

Higashishinagawa, Shinagawa-ku,
Tokyo

1,049.00

3,127.48

2,200

2.2

1,920

96.1

94.8

June 23, 2006

Residence-27

FITL MINAMIAZABUMinamiazabu, Minato-ku, Tokyo

487.27

1,479.61

1,300

1.3

1,100

96.2

96.2

August 23, 2006

Residence-28

RARETE JYOUTOU

Noe, Jyoutou-ku, Osaka-shi, Osaka

740.492,232.26

1,075

1.1

921

98.3

95.1

August 31, 2006

Residence-29

Spacia TSUKAMOTO CROWN HEIM

Tsukamoto, Yodogawa-ku, Osaka-shi,
Osaka

808.542,565.66

1,250

1.3

1,060

96.9

97.9

August 10, 2006

Residence-30

Spacia KAWASAKI II

Ogawa-cho, Kawasaki-ku, Kawasaki-shi,
Kanagawa

601.383,193.14

1,900

1.9

1,760

96.9

97.6

February 27, 2007

Residence-31

Spacia AZABUJUBAN III

Azabujuban, Minato-ku, Tokyo

380.26

2,097.45

2,700

2.7

2,240

97.5

96.9

February 22, 2007

Residence-33

FITL ITABASHIHONCHO

Yamato-cho, Itabashi-ku, Tokyo

220.85

1,446.78

1,000

1.0

837

100.0

96.9

February 27, 2007

Residence-34

FITL OIZUMIGAKUEN

Higashi-Oizumi, Nerima-ku, Tokyo

618.001,542.16

871

0.9

694

89.4

96.6

February 22, 2007

Residence-35

J-FLATS TENJINHIGASHI I

Susaki-machi, Hakata-ku, Fukuoka-shi,
Fukuoka

239.18

1,158.70

445

0.4

343

100.0

97.8

January 31, 2007

Residence-36

J-FLATS TENJINHIGASHI II

Susaki-machi, Hakata-ku, Fukuoka-shi,
Fukuoka

514.892,108.69

840

0.8

641

86.6

96.4

May 23, 2007

Residence-37

J-FLATS SHIJONISHINOTOIN

Myodenji-cho, Shijo-sagaru, Nishinotoindori, Shimogyo-ku, Kyoto-shi, Kyoto

400.593,374.74

1,420

1.4

990

98.9

95.6

April 08, 2008

Residence-39

J-FLATS HIGASHISHINAGAWA

Higashi-Shinagawa, Shinagawa-ku,
Tokyo

1,028.92

3,338.12

2,610

2.6

2,070

96.9

93.4

May 23, 2008

Residence-40

J-FLATS HACHIOJIMINAMINO

Nishikatakura, Hachioji-shi, Tokyo

1,134.50

2,243.06

1,000

1.0

921

94.2

94.2

March 6, 2007

Residence-41

PREGIO NISHINAKAJIMA

Higashinakajima, Higashiyodogawa-ku,
Osaka-shi, Osaka

969.02

3,947.24

2,250

2.3

1,730

96.5

98.3

April 18, 2007

Residence-42

J-FLATS ITABASHIKUYAKUSHOMAE

Itabashi, Itabashi-ku, Tokyo

731.71

4,322.19

2,700

2.7

2,210

91.9

96.0

April 22, 2007

Residence-43

J-FLATS MUSASHIKOYAMA5

Ebara, Shinagawa-ku, Tokyo

512.62

1,616.87

1,012

1.0

882

92.5

95.6

November 5, 2007

Residence-44

J-FLATS SENDAGI5

Sendagi, Bunkyo-ku, Tokyo

250.44

1,239.10

757

0.8

629

97.3

90.9

January 9, 2008

Residence-45

J-FLATS YOTSUYASAKAMACHI5

Sakamachi, Shinjuku-ku, Tokyo

905.083,675.01

2,300

2.3

1,800

96.5

98.8

March 29, 2008

Residence-46

J-FLATS HAKATAHIGASHI

Yoshizuka, Hakata-ku, Fukuoka-shi,
Fukuoka

4,590.91

9,465.09

2,250

2.3

2,110

96.7

99.4

November 21, 2007

Residence-47

J-FLATS KAMIGOFUKUKamigofukumachi, Hakata-ku, Fukuokashi, Fukuoka

593.552,523.71

900

0.9

722

94.3

95.5

March 14, 2008

Residence-48

J-FLATS SANGENJAYASangenjaya, Setagaya-ku, Tokyo

153.83954.94

871

0.9

720

94.5

97.2

January 22, 2008

32,264.63

130,517.76

70,862

70.9

62,22694.5

96.5

Residential Subtotal

35

Portfolio at a Glance (3)Price(Million yen)

Ratio
(%)

Appraisal
Value at End
of Period(Million yen)

Acquisition Price

Core Assets

Property
No.

Property Name

Location

Retail-1

HAMAMATSU Plaza

Kaminishi-cho, Higashi-ku,
Hamamatsu-shi, Shizuoka, etc.

Retail-2

b-town JINGUMAE II

Jingumae, Shibuya-ku, Tokyo

Retail-3

RINKU HAGURAZAKI Plaza

Retail-4

Site Area(m2)

Total Floor
Area (m2)Occupancy Rate (%)
As of Mar.
31, 2010

As of Sep.
30, 2010

Completion Date

135,817.46

73,250.17

15,36015.4

12,90096.6

94.9(Note 6)283.83499.67

1,043

1.0

912

100.0

100.0

May 20, 2005

Tajiri-cho Oaza, Gashou-ji, Sennangun, Osaka, etc.

53,231.66

－

4,697

4.7

3,936

100.0

100.0

－

b-town MINAMIAOYAMAMinamiaoyama, Minato-ku, Tokyo

385.32797.63

1,530

1.5

1,290

94.7

100.0

February 28, 2006

Retail-5

KOJIMA NEW KAMIFUKUOKATEN

Kamifukuoka, Fujimino-shi, Saitama

4,877.90

3,413.40

1,300

1.3

1,120

100.0

100.0

October 14, 1996

Retail-7

b-toss IKEBUKURO

Nishi-Ikebukuro, Toshima-ku, Tokyo

223.381,474.21

1,980

2.0

1,550

100.0

100.0

November 12, 2005

Retail-8

Joy Square YUGAWARA

Chuo, Yugawaramachi, Ashigarashimogun, Kanagawa

5,425.13

6,326.53

1,810

1.8

1,590

100.0

100.0

September 22, 2006

Retail-9

Bell Plaza Shopping Center

Nakamaruko, Ueda-shi, Nagano

23,304.57

6,203.26

1,337

1.3

1,070

100.0

100.0

(Note 8)Retail Subtotal

223,549.25

91,964.87

29,05829.1

24,36898.2

97.3

As of September 30, 2010 Portfolio Total

255,813.88

222,482.63

99,920100.086,594

96.6

96.9

Owned as of March 31, 2010

53 properties

99,920 million yen

0 property－

53 properties

99,920 million yen

Acquired as of October 1

3 properties

3,340 million yen

Owned as of November 30, 2010

56 properties

103,260 million yen

Acquired in the period ended September 30, 2010
Owned as of September 30, 2010

Notes: 1. Based on information as of September 30, 2010. Occupancy rates are rounded to the nearest first decimal place.
2. Concerning acquisition prices, amounts of less than one million yen are rounded down, and percentages indicate the portion of the portfolio’s total acquisition price for properties owned and are rounded to
the nearest first decimal place.
3. The listed site area and total floor area figures are based on indications given in the register. As for Rinku Hagurazaki Plaza, its total floor area is not described because the Investment Corporationacquired only the land and leases it (the buildings on it are owned by the tenants).
4.The appraisal value at end of period is the amount appraised based on an appraisal by a real estate appraiser or the amount as found in a real estate price survey, rounded down to the nearest million yen.
5. The ratio of site rights (co-ownership rights) for Spacia GOTANDA, J-FLATS MUSASHIKOYAMA, J-FLATS SENDAGI and J-FLATS YOTSUYASAKAMACHI are 387,036/426,933, 117,678/127,609,
89,730/103,842 and 245,317/329,739, respectively. However, “Site Area” indicates the total land area of the real estate in trust, while “Total Floor Area” indicates the floor area of the entire building. The
exclusive portions of the total floor area that the Investment Corporation has acquired are 3,637.18m2, 1,148.58m2, 867.27m2 and 2,253.07m2, respectively.
6. HAMAMATSU Plaza is a shopping-complex-type facility, with Hamamatsu West completed on October 20, 1979, the Ito-Yokado and administration buildings completed on November 7, 2000, andAkachanhonpo and Xebio buildings completed on November 9, 2000.
7.The site area of RINKU HAGURAZAKI Plaza changed from 51,146.89m2 to 53,231.66m2 as a result of a national land survey in May 2010.
8. Bell-Plaza Shopping Center is a shopping-complex-type facility, with the Center building and Shop building completed on November 30, 1992 and the Restaurant building completed on July 12, 2006.

36

Overview of Interest-Bearing Debt as of September 30, 2010
Overview of Interest-Bearing Debt
Outstanding Balance

Period-on-Period Comparison of Interest-Bearing Debt

Short-term loans payable(Note 3)¥8,322 million

1.3%

Long-term loans payable(Note 4)¥34,466 million

1.5%Interest-bearing deposits¥1,440 million

2.0%

Investment corporation bonds¥5,000 million

2.0%¥49,229 million

1.5%

Total interest-bearing debt

(million yen)

Average Interest Rate on
Procurement (Note 2)

40,00020,000Share

Mizuho Corporate Bank, Ltd.

¥9,338 million

21.8%

Sumitomo Mitsui Banking Corporation¥9,279 million

21.7%

The Norinchukin Bank

¥3,852 million

9.0%

The Sumitomo Trust and Banking Co., Ltd.

¥3,500 million

8.2%

Development Bank of Japan Inc.

¥2,941 million

6.9%

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

¥2,800 million

6.5%

Mitsubishi UFJ Trust and Banking Corporation¥2,342 million

5.5%

Resona Bank, Ltd.

¥2,250 million

5.3%

Aozora Bank, Ltd.

¥1,500 million

3.5%

The Chuo Mitsui Trust and Banking Company,
Limited

¥1,500 million

3.5%

Mizuho Trust & Banking Co., Ltd.

¥1,484 million

3.5%

The Senshu Ikeda Bank, Ltd.

¥500 million

1.2%

The 77 Bank, Ltd.

¥500 million

1.2%

The Hiroshima Bank, Ltd.

¥500 million

1.2%

The Yamaguchi Bank, Ltd.

¥500 million

1.2%¥42,788 million

100.0%

Total Debt

5,000 (10.2%)

1,582(3.1%)

1,440(2.9%)

12,887(25.2%)

Interest-bearing
depositLong-term loans
payable21,266(43.2%)

30,000Loans Payable Outstanding by Financial Institution
Outstanding Balance

5,000(9.8%)

50,00010,000Financial Institution

Investment
corporation bonds

60,00014,037(27.4%)
Current portion of
long-term loans
payableShort-term loans
payable13,200(26.8%)

17,702(34.6%)

8,322(16.9%)(Note 3)(Note 3)0Mar. 31, 2010

Sep. 30, 2010

Shares by Financial Institution
1.2%
1.2%

1.2%

Mizuho Corporate Bank
Sumitomo Mitsui Banking

1.2%

Norinchukin Bank
Sumitomo Trust and Banking

3.5%
3.5%

Development Bank of Japan

3.5%

Bank of Tokyo-Mitsubishi UFJ

21.8%

5.3%

Mitsubishi UFJ Trust and Banking
Resona Bank

5.5%

Aozora Bank
Chuo Mitsui Trust and Banking

21.7%

6.5%

Mizuho Trust & Banking
Senshu Ikeda Bank

6.9%
8.2%

9.0%

77 Bank
Hiroshima Bank
Yamaguchi Bank

Notes: 1. Concerning figures in the graphs and tables above, amounts of less than one million yen are rounded down and percentage figures are rounded to the nearest first decimal place.
2. The average interest rate on procurement is the weighted average of applied interest rates as of September 30, 2010, and the figures are rounded to the nearest first decimal place
3.The term loan that was drawn down on February 26, 2010 has a loan term that exceeds 1 year by several days, but is presented here under “Short-term loans payable.” Please note that this is accounted
for as “Current portion of long-term loans payable” on balance sheets. 4. Includes current portion of long-term loans payable.

37

Key Financial Indices for Interest-Bearing Debt
Changes in Total Assets, Total Interest-Bearing Debt and LTV (Notes 1 and 2)

Diversification of Repayment Dates (Notes 3 and 6)
As of October 31, 2010

(million yen)

Total assets

ＬＴＶ

Interest-bearing debt

120,000
105,848

105,001

104,739

104,750

49.3%

49.3%

49.0%

60,00030,000

48.9%
47.1%

52,181

51,63951,449(million yen)60%

20,00055%

15,00050%

10,00045%

5,000

104,42290,00051,20840%
Sep. 30, 2008

Ratio of Fixed

Mar.31, 2009/

Sep. 30, 2009

Mar.31, 2010

Sep. 30, 2010

10,137
6,300

Period ending Mar. 31,
2011

Sep. 30,
2011

7,342

Mar. 31,2012

Sep. 30,
2012

Mar. 31,2013

Sep. 30,
2013

Mar. 31,
2014

Ratio of Long/Short-Term Loans Payable (Notes 2, 5 and 6)
Short-term

FixedLong-term(Note 4)

100%

100%

19.0%
80%

5,000

6,587

0

Floating Interest Rates (Notes 2 and 5)
Floating

Long-term loans payable (Note 4)

8,322

6,900

49,2290

Short-term loans payable
Investment corporation bonds

31.0%

36.8%

46.7%

38.7%

42.1%

24.8%

80%
16.7%

16.0%

26.8%

25.4%

83.1%

84.0%

Sep. 30, 2010

Oct. 31, 2010

23.7%

60%

60%

16.9%
34.6%

27.4%
40%

69.0%

40%
63.2%

53.3%

61.3%

81.0%

57.9%

75.2%

20%

20%
0%

65.4%

0%
Mar. 31, 2009

Sep. 30, 2009

Mar. 31, 2010

Sep. 30, 2010

Oct. 31, 2010

Mar. 31, 2009

Sep. 30, 2009

Mar. 31, 2010

Ratio of current portion of long-term loans payable and investment corporation bonds
Notes: 1. LTV = Interest-bearing debt / Total assets at end of the period (where interest-bearing debt is the sum of loans payable, investment corporation bonds and interest-bearing tenant leasehold and security deposits).
2. Percentage figures are rounded to the nearest first decimal place.
3. Does not include interest-bearing tenant leasehold and security deposits.
4. Includes current portion of long-term loans payable.
5. Stated as the percentage of total interest-bearing debt.
6.The term loan that was drawn down on February 26, 2010 has a loan term that exceeds 1 year by several days, but is presented here under “Short-term loans payable.” Please note that this is accounted for as“Current portion of long-term loans payable” on balance sheets.

38

Overview of Unitholders as of September 30, 2010
Major Unitholders

Diversification of Unitholders
Investment
Units Owned(units)Name / Company Name

Financial Institutions (including securities companies)

Ownership ofInvestment Units
Outstanding (%)

Goldman Sachs International

19,937

17.32

Japan Trustee Services Bank, Ltd.
(Trust Account)

17,55915.25

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

9,455

8.21

Sekisui House Ltd.

7,800

6.77

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

5,662

4.92

JOINT CORPORATION

5,400

4.69

Deutsche Bank AG London-PB Non-Treaty
Clients 613

4,857

4.22

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

4,769

4.14

Spring Investors Co., Ltd.

2,600

2.25

State Street Bank and Trust Company 505200

1,241

1.07

Total

79,28068.89■ Note: The status of large holdings as determined by the large share holdings reports(including Reports of Changes) submitted by November 11, 2010 is as follows.
Name

Tower
Investment
Management
Co., Ltd.

DaltonInvestments
LLC

Sumitomo Trust& BankingCo., Ltd.

DIAM
Co., Ltd.

MizuhoSecurities
Co., Ltd.

Total units
held

24,763 units

4,616 units

7,940 units

12,901 units

6.932 units

Total
percentageof ownership21.52%

4.01%

6.90%

11.21%

6.02%

Submission
date

Apr. 26, 2010

Aug. 3, 2010

Sep. 7, 2010

Nov. 4, 2010

Nov. 8, 2010

Other domestic firms

40 (0.70%)
Sep. 30,
2010
5,710
unitholders

Foreign firms
98 (1.72%)
70 (1.23%) Individuals and others

5,502 (96.36%)
45 (0.70%)
107 (1.66%)
77 (1.20%)

Mar. 31,2010
6,438
unitholders

6,209 (96.44%)
37 (0.60%)
108 (1.74%)
80 (1.29%)

Sep. 30,
2009
6,218
unitholders

5,993 (96.38%)

0%Sep. 30,2010
115,070
units

20%

41,503(36.07%)40%

18,332(15.93%)60%

80%

34,363(29.86%)100%

20,872(18.14%)Mar. 31,2010
104,670
units

32,975(31.50%)7,939(7.58%)

37,342(35.68%)26,414(25.24%)

Sep. 30,
2009
104,670
units

30,712(29.34%)8,391(8.02%)

40,887(39.06%)

24,680(23.58%)

0%

20%

40%

60%

80%

100%

39

Historical Investment Unit Price
Sekisui House SI Investment Corporation Investment Unit Price Summary(yen)

500,000

2,500

Sekisui House SI Investment Corporation investment unit price (left axis)
TSE REIT Index (right axis)

2,000

300,000

1,500

200,000

1,000

100,000

500

0

H…
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400,000

Oct.
2007

Mar.
2008

Sep.
2008

Mar.
2009

Sep.
2009

Mar.
2010

0

Sep.
2010

(units)5,000

Trading volume
4,000
3,000
2,000
1,000
0

Oct.
2007

Mar.
2008

Sep.
2008

Mar.
2009

Sep.
2009

Mar.
2010

Sep.
2010

40

40

◇ This document is provided for information purposes only and is not a solicitation for investment, nor arecommendation or invitation to make specific transactions. We caution readers to contact their securities
companies with regard to the purchase of investment units in Sekisui House SI Investment Corporation and toundertake investment decisions of their own volition.
◇ This document is not a disclosure document or report based upon the Financial Instruments and Exchange Law,
the Law Concerning Investment Trusts and Investment Corporations, public listing regulations of the Tokyo Stock
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◇ Strategies, goals and forward-looking statements contained herein are based upon specific assumptions andjudgments made as of the date of the document in accordance with information available to Sekisui House SI
Investment Corporation at the time. Information herein is subject to impact from risks, uncertainties, assumptions
and other factors. Accordingly, strategies, goals and forecasts regarding future dates do not guarantee theInvestment Corporation’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 Sekisui House SI Investment Corporation takes reasonable care in the preparation of this document, it does
not guarantee the accuracy and completeness of its content. Readers are also cautioned that the contents of thisdocument may be changed or deleted without prior notice.

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