8973
Sekisui House SI
Investment Corporation

Business Results
for the 12th Fiscal Period
From April 1, 2011 to September 30, 2011

November 15, 2011

Contents
1. Overview of the Twelfth Fiscal Period Ended
September 30, 2011

4. Appendix

・Progress Highlights

4・Balance Sheets

28

・[Reference] Growth Strategy for a New Stage

5・Statements of Income

30・Summary of Business Results for Twelfth Fiscal Period

6・Statements of Cash Flows / Cash Distributions

31

・Occupancy Rates and NOI Yield

7

・Summary of Selected Financial Data

32

・ Response to Damage from Great East Japan Earthquake

8・Outline of Portfolio

33

・Portfolio at a Glance35

2. Business Results for the Twelfth Fiscal Period
Ended September 30, 2011
・Portfolio Summary

10・Portfolio Development Policy

38

・Changes in Asset Size and Financial Results

11・Overview of Unitholders as of September 30, 201139

・External Growth Results

12・Historical Investment Unit Price

40

・Internal Growth Results

13

・Financial Results

16

・Asset Management Company’s Management System

19

・Overview of Growth Strategy for a New Stage “Phase I”

20

3. Next Growth Strategy and Forecasts for the Thirteenth Fiscal
Period Ending March 31, 2012
・Transition to Growth Strategy for a New Stage “Phase II”

22・Growth Strategy for “Phase II”

23・Forecasts for the Thirteenth Fiscal Period2621. Overview of the Twelfth Fiscal Period
Ended September 30, 2011

Prime Maison HIGASHISAKURA

Progress Highlights
Twelfth Fiscal Period (Ended September 30, 2011) Cash Distributions Per Unit
Forecast cash distribution

Actual cash distribution¥9,870¥10,045

Strategic goal of Phase I of Growth Strategy for a New Stage:“6-month cash distributions to the 10,000 yen
level” – Accomplished

Business Results for the Twelfth Fiscal Period (Ended September 30, 2011)
External growth results

Internal growth results

Financial results

Acquired 1 residential property

Maintained and improved
occupancy rate

Promoted stability of financial
standing

Acquisition price¥2.26 billion

Occupancy rate

97.3%

Note: Figure is for the entire portfolio as of the fiscal period
end.

Ratio of fixed rate Ratio of long-termloans payableliabilities

LTV

62.9% 78.6% 49.3%
Note: Figures represent interest-bearing debt and are asof the fiscal period end.

Progress in “Growth Strategy for a New Stage”
Forecast cash distribution per unit for the thirteenth fiscal
period ending March 31, 2012 ¥10,150

Transition to Phase II

Projected that the strategic goal of Phase I “6-month cash distributions
to the 10,000 yen level” will be maintained

Aiming for significant increase in
asset size

4

[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 withpersonnel in charge of property development
at Sekisui House

 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-month 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.
5

Summary of Business Results for Twelfth Fiscal Period
Comparison with Forecasts
Fiscal Period Ended
Sep. 30, 2011
(Forecasts as of May 16,
2011)

Operating revenue

Fiscal Period Ended
Sep. 30, 2011

¥3,529 million◇ Factors for differences between actual results andforecasts for the fiscal period ended September 30,
2011

Difference・ Operating income(183 days) (Actual)¥3,533 million¥3 million

Operating revenue

0.1%

Operating income¥1,588 million¥1,622 million¥33 million

2.1%

Ordinary income¥1,136 million¥1,156 million¥19 million

1.8%

Decrease in rent revenue:-¥16 million

Increase in other lease business revenue:+¥20 million

Operating expenses
Decrease in expenses related to rent business: -¥16 million

Net income
Cash distributions
per unit¥1,135 million¥1,155 million¥20 million

1.8%¥9,870¥10,045

¥175

1.8%

Decrease in other business expenses:

・ Ordinary income

Comparison with Previous Fiscal Period
Fiscal Period Ended Fiscal Period Ended
Mar. 31, 2011
Sep. 30, 2011(183 days) (Actual)

Operating revenue¥3,462 million¥3,533 million¥70 million

2.0%

Operating income¥1,655 million¥1,622 million-¥33 million-2.0%

Ordinary income¥1,144 million¥1,156 million¥12 million

1.1%

Net income¥1,126 million¥1,155 million¥28 million

2.6%¥9,793¥10,045

¥252

2.6%

+¥2 million

Increase in non-operating expenses:+¥16 million

・ Operating income
Operating revenue
Increase in rent revenue:+¥35 million

Increase in other lease business revenue:+¥35 million

Operating expenses

Total assets¥107,352 million¥109,664 million¥2,312 million

Interest-bearing debt

¥51,874 million¥54,032 million¥2,158 million

Net assets¥51,650 million¥51,679 million¥28 million¥377,500¥286,400

115,070 units

115,070 units

Period-end market value¥43,438 million¥32,956 million

Cash distributions¥1,126 million¥1,155 million

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

Increase in non-operating income:◇ Factors for period-on-period changes to actual results
for the fiscal period ended September 30, 2011

Change(182 days) (Actual)

Cash distributions per unit-¥13 million

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

Increase in expenses related to rent business: +¥77 million
Increase in other business expenses:+¥27 million

・ Ordinary income
Increase in non-operating income:+¥1 million

Decrease in non-operating expenses:-¥44 million

・ Net income
Decrease in extraordinary losses:-¥16 million

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

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

Retail

Total

100%
96.5%

96.9%

96.6%

97.3%

96.6%

95%

90%

85%

80%

75%

Sep. Oct.
2009
End of Eighth
Fiscal Period

Nov.

Dec.

Jan.
2010

Feb.

Mar.

Apr.

May

Jun.

Jul.

Aug.

Sep.

Oct.

Nov.

Dec.

Jan.
2011

Mar.

Apr.

May

Jun.

End of Eleventh
Fiscal Period

End of TenthFiscal Period

End of NinthFiscal Period

Feb.

Jul.

Aug.

End of Twelfth
Fiscal Period

Occupancy Rates

NOI Yields

Fiscal period ended September 30, 2011 (twelfth fiscal period)

Fiscal period ended September 30,
2011 (twelfth fiscal period)

As of September 30, 2011

Average for twelfth fiscal period(Apr. 1, 2011 through Sep. 30, 2011)

Sep.

4.9%

Residential

96.8%

95.4%

Retail

97.8%

97.2%

5.3%

Total

97.3%

96.4%

5.0%

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 2009 to September
2011.
2. The average occupancy rate for the twelfth fiscal period ended September 30, 2011 indicates the average of occupancy rates as of the end of each month for the fiscal period from Apr. 1, 2011 through Sep. 30, 2011.
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, 2011 through Sep. 30, 2011.
4. Percentage figures are rounded to the nearest first decimal place.

7

Response to Damage from Great East Japan Earthquake
Repair Work Related to the Great East Japan Earthquake
All repair work was completed in the twelfth fiscal period ended September 30, 2011 for properties at which repairs were recorded as allowancefor disaster losses in the eleventh fiscal period ended March 31, 2011

Accounting Treatment of Cost of Repairs in the twelfth fiscal period ended
September 30, 2011
Example of repair work
Appropriated allowance fordisaster losses recorded in theeleventh fiscal period

Actual cost of repairs¥15,538 thousand
Difference between allowance for disasterlosses of ¥16,694 thousand and actual cost of
repairs above

J-FLATS ITABASHIKUYAKUSHOMAE
Repair work of tile on outer wall of bicycle
parking area

Recorded as reversal of allowance fordisaster losses (non-operating income)in the twelfth fiscal period¥1,155 thousand

BeforeAfter

The impact on the Investment Corporation’s status of operation was minor[Reference] Changes in Portfolio PML and the Number of Owned Properties

Number of owned
properties(%)(Number of

58 properties)

57

8

7.6

7.6

6.7

6

38
28

4

48

42

5.6

53

52

60

53

53

53

45

5.4

5.2

5.2

5.2

5.2

5.2

5.0

5.0

30

21
2

15

0

0
End of 1st FP
End of 2nd FP End of 3rd FP End of 4th FP End of 5th FP End of 6th FP
End of 7th FP End of 8th FP End of 9th FP End of 10th FP End of 11th FP End of 12th FP(Mar. 31, 2006) (Sep. 30, 2006) (Mar. 31, 2007) (Sep. 30, 2007) (Mar. 31, 2008) (Sep. 30, 2008) (Mar. 31, 2009) (Sep. 30, 2009) (Mar. 31, 2010) (Sep. 30, 2010) (Mar. 31, 2011) (Sep. 30, 2011)8

2. Business Results for the Twelfth Fiscal Period
Ended September 30, 2011

Prime Maison HIGASHISAKURAPortfolio Summary
As of September 30, 2011 (End of Twelfth Fiscal Period)
Total Acquisition Price (Note 1)

Occupancy Rate

Average Property Age (Note 2)¥106,234 million

97.3%

7.0 years

Total Number of Properties

PML (Entire Portfolio)

58 properties

5.0%

5.5 years

Diversification by Asset Class (Note 3)

Diversification by Region (Note 3)

Diversification by Age (Note 3)

Residential

As of IPO

As of Mar.
31, 2011(End of
Eleventh Fiscal
Period)As of Sep.
30, 2011(End of
Twelfth Fiscal
Period)Notes:

49.0%

Average Property Age (Note 2)(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/ Adjoining Cities
Major Regional Cities

Retail

51.0%

37.9%

12.9%

49.2%

72.1%

27.9%

36.8%

26.9%

36.3%

72.6%

27.4%

36.1%

28.4%

35.5%

37.2%

45.0%

36.2%

56.1%

34.3%

43.4%

6.6%

20.8%

20.3%

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%.

10Changes in Asset Size and Financial Results
Total
acquisition
price(million yen)
110,000

Assets acquired after change of sponsor
Assets acquired before change of sponsor

52 properties
99,048100,000

90,000Management after change ofsponsorManagement before change of sponsor

53 properties
99,91953 properties 53 properties 53 properties
99,92099,92099,920(Note 1)57 properties
103,974

58 properties
106,234

48 properties
91,818July 28, 2005
Listed on theTokyo Stock
Exchange

38 properties 42 properties
82,217
81,47380,00070,000

October 18, 2006
Public offering
28,500 units

October 24, 2007
Public offering
17,500 units

November 16, 2006
Third-party allotment
1,500 units

November 21, 2007
Third-party allotment
1,170 units

28 properties
61,70760,000April 2, 2010
Third-party allotment
10,400 units

21 properties
47,51650,000
16 properties
41,39240,000Change of trade
nameMarch 13, 2007
Investment
corporation bonds¥10,000 million

August 29, 2005
Third-party allotment
2,000 units

30,000
As of IPO

Unitholders’capital¥27,473
millionNumber of
54,000 units
investment units

End of 1st FP End of 2nd FP End of 3rd FP End of 4th FP End of 5th FP End of 6th FP End of 7th FP End of 8th FP End of 9th FP End of 10th FP End of 11th FP End of 12th FP(Mar. 31,
(Sep. 30,
(Mar. 31,
(Sep. 30,
(Mar. 31,
(Sep. 30,
(Mar. 31,
(Sep. 30,
(Mar. 31,
(Sep. 30,
(Mar. 31,
(Sep. 30,
2006)
2006)
2007)
2007)
2008)
2008)
2009)
2009)
2010)
2010)
2011)
2011)
¥28,491
million¥42,297
million¥48,704
million¥50,523
million56,000 units

86,000 units

104,670 units

115,070 units

Interest-bearing
debt (Note 2)―¥23,165
million¥34,724
million¥42,382
million¥43,090
million¥44,523
million¥52,181
million¥51,639
million¥51,449
million¥51,208
million¥49,229
million¥51,874
million¥54,032
millionLTV (Note 3)

―

41.7%

51.7%

47.3%

47.7%

45.2%

49.3%

49.3%

49.0%

48.9%

47.1%

48.3%

49.3%

Cash
distributions perunit (Note 4)―¥17,277(¥12,730)¥12,995¥13,035¥13,023¥14,402¥11,147¥5,485¥10,262¥10,052¥8,160¥9,793¥10,045

Notes: 1. With regard to the Bell Plaza Shopping Center acquired in the fiscal period ended March 31, 2008, adjacent signboards, etc. were additionally acquired at a total of ¥1 million during the fiscal period ended September 30, 2009.
2. Total interest-bearing debt = Borrowings + Investment corporation bonds + Interest-bearing tenant leasehold and security deposits
3. LTV = Period-end interest-bearing debt / Period-end total assets
4. The operating period for the first fiscal period was the 346 days between April 20, 2005 and March 31, 2006. The actual management period was the 247 days between July 28, 2005 and March 31, 2006. In order to compare with the successive fiscal periods, the figure calculated with the number ofmanagement days as 182 is indicated in parentheses.

11External Growth Results – Property Acquisition Utilizing the Unique Channels of the Asset Management Company –Properties Acquired in the Fiscal Period Ended September 30, 2011 (Twelfth Fiscal Period)
Utilizing the unique channels of asset management company, acquired one residential property in Greater Tokyo/ Adjoining Cities
Residence –54

MITEZZA C6【Property Overview】
A relatively new property mainly for single households which is close to the station. Equipped with bicycle
maintenance space, pollen removal device and a bicycle parking in the common use area of each unit. Full-fledged
shopping promenade. Good access to major city centers. Targets health-conscious singles and DINKS who value
living convenience and access to transportation for commuting.
Location

Oyamahigashicho, Itabashi-ku,
Tokyo

Closest station

3-min. walk from Itabashi Kuyakushomae Station on the Subway Mita Line Total leasable
10-min. walk from Oyama Station on floor space
the Tobu Tojo Line

Construction
and number offloorsRC, 14F

Total number ofleasable units

124 (including 4 offices)

Site area

773.48㎡

Acquisition dateJune 10, 2011

Total floor area

5,249.34㎡

Acquisition price2.26 billion yen

Main residential
type

Single type

Appraisal value

2.3 billion yen* (as of April 1,
2011)

Completed

March 2008

4,036.66㎡

The nearby Happy Road
Oyama Shopping Street*The amount as found in a real estate price survey as of the end of the fiscal period ended September 30, 2011 (twelfth
fiscal period) is the same amount.

Changed property manager / master lessee to Sekiwa Real Estate, Ltd. of the Sekisui HouseGroup
Anticipation of improvement of occupancy rate and business efficiency through soliciting tenants
utilizing the Sekisui House Group’s know-how and network ⇒ Aiming to enhance profitability

Master lease company

BS Property
Management
Corporation

Tozai Mitezza Lease
Godo Kaisha

MITEZZA C6After change

Before change
Property manager

Map

Property manager(Changed on
August 1, 2011)

Master lessee

Sekiwa Real Estate, Ltd.

12

Internal Growth Results (Residential) – Maintaining High Occupancy Rates and Continuing Stable Management –Strengthening Leasing
As a Result of Collaborating with the Property Manager and Implementing Various Measures, the Overall Residential Occupancy Rate Rose to 96.8% by the
End of the Fiscal Period Ended September 30, 2011 (Twelfth Fiscal Period)Example of Occupancy Rate Improvement

ACT HILLS YACHIYOMITEZZA C6・Changed property manager and master lessee to Sekiwa
Real Estate, Ltd. on August 1, 2011
・Installed a model room as part of leasing promotion
measures・Concluded a 3-year lease agreement with a corporate tenant(domestic life insurance company) at office compartment which
had been vacant for a long time
⇒ Contributed to 6.5% worth of[Contracted floor space]leasable floor space

313.23㎡

Significant
improvement

End of period ended
March 31, 2011

End of period ended
September 30, 2011

88.3%
Model room
Displaying image of how
residents might use

End of June 2011
88.1%

Significant
improvement

96.9%

・Conducted leasing promotion campaign such as with lump-sum
payment reduction as part of flexible solicitation strategy
End of period ended
September 30, 2011

End of period ended
March 31, 2011

94.7%

86.4%

Significant
improvement

EL CIELO MEGUROHONCHO

End of period ended
September 30, 2011

96.9%

Note: Acquisition date: June 10, 2011

Maintaining the Contract Renewal Rate
As a Result of Making Early and Individual Approaches to Tenants with Planned Contract Renewal, as well as Conducting Measures for Enhanced Tenant
Satisfaction by Promoting Cleaning and Beautification of Common-Use Areas and such, the Contract Renewal Rate Successfully Maintained a ConsistentLevel (Reduction of Restoration and Leasing Fees, etc. After Tenants Vacate)Example of Promotion of Cleaning and Beautification

Spacia MEGUROFITL OIZUMIGAKUEN【Contract Renewal Rates】

90%

81.5%
80%

80.3%

83.8%

79.2%

81.8%

78.7%

81.2%

74.1%

70%
60%

Maintained consistent level of renewal rates

50%

Conducted pruning and replanting ofplants at the entrance

Placed stones in the courtyard andbrightened up the image

FP Ended FP Ended FP Ended FP Ended FP Ended FP Ended FP Ended FP Ended
Mar. 31, Sep. 30, Mar. 31, Sep. 30, Mar. 31, Sep. 30, Mar. 31, Sep. 30,
2008
2008
2009
2009
2010
2010
2011
2011
Note: Renewal rate: The ratio of the number of residential units for which contracts were renewed against the
number of residential units due for contract renewal during the fiscal period

13Internal Growth Results (Residential) – Occupancy Status and Rent Trends –Occupancy Status by Region (Residential)
High Occupancy Rates Being Maintained in Each Area. Impact of Great East Japan Earthquake on Occupancy Status is Limited.
Occupancy Status of Twelfth Fiscal Period Ended
September 30, 2011

 Though occupancy rates temporarily dropped in

Residential Occupancy Rates

Central Tokyo / Jonan Area

Greater Tokyo / Adjoining Cities

Major Regional Cities

100%

April and May after the Great East Japan
Earthquake, it has been improving since then.
Average Occupancy Rates for Twelfth Fiscal Period

All Residential Properties

96.5%

96.5%

96.2
%

97.1%

94.5%

96.8%

97.3%

97.9%

95%

All Residential Properties
Central Tokyo / Jonan Area

95.4%
95.3%

95.9%

94.0%

96.5%

Major Regional Cities

90%
End of Mar. 2010(End of ninth fiscal
period)95.9%

Great East Japan Earthquake,
March 11, 2011

95.0%
96.1%

96.2%

94.7%
93.5%

Greater Tokyo / Adjoining Cities

96.9%

End of Jun.

End of Sep. 2010(End of tenth fiscal
period)End of Dec.

End of Mar. 2011(End of eleventh fiscal
period)End of Jun.

End of Sep. 2011(End of twelfth fiscal
period)Note: The fiscal period end occupancy rates and the average occupancy rates for the period of residential properties by region include stores and offices in residential properties in the base of calculation. In addition, the average occupancy rates for thetwelfth fiscal period are the averages of the occupancy rates at the end of each month of the fiscal period.

Rent Trends of Residential Properties Owned by Investment Corporation
Margins of Rent Decrease are on a Shrinking Trend for Rent in Each Area. We are Continually Closely Watching Leasing Market Trends.

Rate of Change of Rent Per Tsubo from End of Previous Period
Area

End of fiscal period ended March 31, 2011
(eleventh fiscal period)

Central Tokyo / Jonan Area

-0.8%

Greater Tokyo / Adjoining Cities-0.5%

Major Regional Cities-0.2%

All Residential Properties-0.5%(Improved 0.9 points fromprevious fiscal period)

End of fiscal period ended September 30, 2011
(twelfth fiscal period)
-0.5%
-0.2%
-0.2%

All Residential Properties-0.4%(Improved 0.1 points fromprevious fiscal period)

Note: The above chart shows by area the rate of change of rent per tsubo of properties owned as of the end of the fiscal period as compared to the end of the previous period. Stores and offices in residential properties
are not included in the base of calculation. The rate of change is rounded to the nearest first decimal place.

14

Internal Growth Results (Retail) – Status of HAMAMATSU Plaza and b-toss IKEBUKURO –Occupancy Status of HAMAMATSU Plaza
Occupancy Rate Improved Through Securing of New Tenants
100%

Occupancy rate of
HAMAMATSU Plaza
HAMAMATSU
Plaza

90%

88.1%

94.9%

94.3%

80%

End of Aug. 2010

New tenants secured
for 2 compartments
End of eleventh fiscal
period Vacantcompartments
Approx. 1,404 tsubos

End of Sep. 2010
(end of 10th fiscal period)

End of Dec. 2010

End of Mar. 2011
(end of 11th fiscal period)

Hokuriku Toyama Kaitensushi Kaio
Hamamatsu Plaza West Store opened on
October 5, 2011

96.2%

95.1%

94.3%

Securedanchor tenants

Vacantcompartments
Approx. 2,995
tsubosOpening of new tenant store

Fiscal period ended September 30, 2011
(twelfth fiscal period)

Tenth fiscal period to eleventh fiscal period

End of Jun. 2011

End of twelfth fiscal
periodVacantcompartments
Approx. 948
tsubosSecured contract with a tenant that attracts manycustomers and has potential to vitalize the facility

End of Sep. 2011
(end of 12th fiscal period) Sep. 2010 Began large scale renewal work with intention of  Jun. 2011 Secured new tenant“Hokuriku Toyama Kaitensushi Kaio
reviewing and transforming the facility concept
 Sep. 2010 Secured anchor tenants
Bowling alley “T.T BOWL Hamamatsu Plaza West”

 Nov. 2010 Completed the above major renewal work

Hamamatsu Plaza West Store”

Lease: Jun. 10, 2011 to Jun. 9, 2021 (10 years)

 Sep. 2011 Secured new tenant“Japan Pension Service”
Lease: Sep. 1, 2011 to Feb. 29, 2012 (6 months)*Use as temporary office

The store’s opening

Status of b-toss IKEBUKURO
Settlement reached in a lawsuit on rent decrease
June 2011 A settlement was reached with Tokyu Recreation Co., Ltd.,
which was a sublease tenant, in a lawsuit on rent decrease

Content of settlement

 The Investment Corporation approved partial rent decrease fromMay 1, 2009 for Tokyu Recreation Co., Ltd., and paid the difference
in rents due to revision of 39.98 million yen (paid in the twelfth fiscal
period).
 As part of the settlement, it was agreed that the lease agreement
between the master lessee and Tokyu Recreation Co, Ltd. would becanceled as of September 30, 2011.

 The Investment Corporation received a cancellation penalty fee of
45 million yen from Tokyu Recreation Co., Ltd. based on the leaseagreement (received in the twelfth fiscal period).

With Tokyu Recreation Co., Ltd.’s cancellation of the lease agreement, transitioned into a directcontract between the master lessee (Prime Place, Co., Ltd.) and the end tenant from October 1, 2011

New Scheme
Mizuho Trust &Banking Co., Ltd.
Trust
agreement

Master leaseagreement (passthrough type)

The Investment
Corporation

Prime Place
Co., Ltd.
Building subleaseagreement*(Dated October 1,
2011)Tokyu Recreation
Co., Ltd.
Building lease agreement(rent fixed type)(⇒Cancelled at end of
September 2011)

Building subleaseagreement

End tenants⇒ (With the above cancellation, the agreement is
succeeded to Prime Place Co., Ltd.)

15

Financial Results – Initiatives to Promote Stabilizing of Financial Standing (1) –Overview of Financing Activities
Continued to Conduct Steady Funding in this Period and Increased Stability of Financial Standing
Loan
AmountLenderLoan Term

Interest
Rate / Spread

Collateral¥2.85 billion

Three existing lenders including
Development Bank of Japan

Approx. 4 years
10 months

Fixed

0.8%

Unsecured

New borrowings In
June 2011¥2.3 billion

Six existing lenders including
Bank of Tokyo-Mitsubishi UFJ

Approx. 2 years
3 months

Floating

0.7%

Unsecured

Refinancing inJuly 2011¥3.45 billion

Four existing lenders including
The Norinchukin Bank

Approx. 3 years
7 months

Fixed

0.7%

Unsecured

Refinancing inMay 2011

Rating Status
As of September 30, 2011

■Rating agency
Rating and Investment
Information, Inc. (R&I)■Issuer rating
A (Rating outlook: Stable)

Entering into interest rate swap agreement
Interest rate swap agreement entered into relating to the refinancing in July 2011

Virtually Fix Interest rates and avoid risk of increasing interest rates

Status of Borrowing Costs
Borrowing Costs

Steadily Realized Significant Reduction of Borrowing Costs(million yen)・Most of the costly borrowings from before thechange of sponsors have been refinanced during
the twelfth fiscal period with the backdrop of thecreditworthiness of Sekisui House・Though the average balance of interest-bearing
debt for the period rose with new borrowings in
the twelfth fiscal period, borrowing costs in thethirteenth fiscal period are estimated to be
maintained at the same level as that in thetwelfth fiscal period

629

611

Borrowing related expenses
Interest expenses on investment corporation bonds
Interest expenses

600

215
400
200
0

222

509

85

50

126
50

328

338

332

Outlook

430

429

55
50

54
50

324

324

Fiscal Period Ended Mar. 31, Fiscal Period Ended Sep. Fiscal Period Ended Mar. 31, Fiscal Period Ended Sep.

Average balanceof interest-bearing
debt for the period

2010 (9th FP)

30, 2010 (10th FP)

2011 (11th FP)¥51,450¥49,369¥51,961

millionmillionmillion30, 2011 (12th FP)¥53,234
millionFiscal Period Ending Mar.
31, 2012 (13th FP)¥54,109
millionOutlookNotes: 1. Amounts are rounded down to the nearest million yen.
2. The fiscal period ending March 31, 2012 (thirteenth fiscal period) outlook figures are based on the assumption that all investment corporation bonds maturing during the fiscal period ending March 31, 2012 will be redeemed through the issuance of
new investment corporation bonds and that there will be no new borrowings, etc. other than this.

16

Financial Results – Initiatives to Promote Stabilizing of Financial Standing (2) –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(Notes 1 and 2)

Changes in average remaining term of loans(Note 4 and 5)

Long-termLong-term (current portion)

Fixed (Note 3)

100%(year)

100%

16.9%
46.7%

38.7%

37.1%

37.1%

34.6%
26.8%

61.3%

50%

62.9%

62.9%

27.4%

50%

2.0
21.4%

21.8%

1.5

78.6%

78.2%

0.5

38.0%

Mar. 31,2011

Sep. 30,
2011

1.0
years

0.0

0%

0%

years

1.5
years

1.0

56.3%

53.3%

2.0

2.0
years

Fiscal Period Ended
Mar. 31,2010

Sep. 30,
2010

Mar. 31,2011

Diversified Repayment Dates (Note 4)(million yen)Mar. 31,2010

Sep. 30,
2011

Sep. 30,
2010

Mar. 31,2011

Mar. 31,2010

Sep. 30,
2011

As of the end of the fiscal period ended September 30, 2011
(twelfth fiscal period)

Long-term loans payable (Note 6)

Sep. 30,
2010

Refinancing implemented in the fiscal period
ended March 2011
New loans borrowed in the fiscal period ended
March 2011
Refinancing implemented in the fiscal period
ended September 2011
New loans borrowed in the fiscal period ended
September 2011

Investment corporation bonds

12,000
9,000
2,300

6,000

2,800

10,137

6,587
3,000

5,000

8,000

5,700

9,509

7,342

3,450

2,850

0
Fiscal Period Ending
Mar. 31, 2011 Sep. 30, 2011

Mar. 31, 2012

Sep. 30, 2012

Mar. 31, 2013

Sep. 30, 2013

Mar. 31, 2014

Sep. 30, 2014

Mar. 31, 2015

Sep. 30, 2015

Mar. 31, 2016

Realize diversification within around 2 to 5 years
Notes: 1. Percentage figures are rounded to the nearest first decimal place. 2. Stated as the percentage of total interest-bearing debt (borrowings + investment corporation bonds + interest-bearing leasehold
and security deposits). 3. Includes borrowings virtually fixed with the interest rate swap agreement. 4. Does not include interest-bearing leasehold and security deposits. 5. The figures are the result of
calculation based on the weighted average using the remaining terms from each date to the repayment (redemption) dates of loans and investment corporation bonds, and their balances, and rounded
down to the nearest first decimal place. 6. Includes current portion of long-term loans payable.

17Financial Results – Overview of Interest-Bearing Debt as of September 30, 2011 –Period-on-Period Comparison of Interest-Bearing Debt

Overview of Interest-Bearing Debt
Outstanding Balance

Average Interest Rate on
Procurement (Note 2)(million yen)

60,000- million-%¥47,875 million

1.3%

50,000Interest-bearing deposits¥1,157 million

2.0%

40,000Investment corporation bonds(Note 3)

¥5,000 million

2.0%¥54,032 million

1.4%

Short-term loans payable
Long-term loans payable (Note3)

Total interest-bearing debt

LTV (Note 4)

5,000
1,157

5,000
1,298

30,000Investment
corporation bonds
due within one year
Interest-bearing
deposit

41,28839,275Long-term loans
payable20,00049.3%

Loans Payable Outstanding by Financial Institution
Financial Institution

Outstanding Balance

Share

Mizuho Corporate Bank, Ltd.

¥9,932 million

20.7%

Sumitomo Mitsui Banking Corporation¥9,773 million

20.4%

The Norinchukin Bank

¥3,852 million

8.0%

Mitsubishi UFJ Trust and Banking Corporation¥3,842 million

8.0%

The Sumitomo Trust and Banking Co., Ltd.

¥3,500 million

7.3%

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

¥3,400 million

7.1%

Resona Bank, Ltd.

¥3,250 million

6.8%

Development Bank of Japan Inc.

¥2,941 million

6.1%

Mizuho Trust & Banking Co., Ltd.

¥2,384 million

5.0%

Aozora Bank, Ltd.

¥1,500 million

3.1%

The Chuo Mitsui Trust and Banking Company, Limited¥1,500 million

3.1%

The Senshu Ikeda Bank, Ltd.

¥500 million

1.0%

The 77 Bank, Ltd.

¥500 million

1.0%

The Hiroshima Bank, Ltd.

¥500 million

1.0%

The Yamaguchi Bank, Ltd.

¥500 million

1.0%¥47,875 million

100.0%

Total Debt

Current portion of
long-term loans
payable10,000

6,300

6,587

Mar. 31, 2011

Sep. 30, 2011

0Mizuho Corporate Bank
Sumitomo Mitsui Banking

1.0%

1.0%

1.0%

1.0%

Norinchukin Bank
Mitsubishi UFJ Trust and Banking

3.1%3.1%

Sumitomo Trust and Banking

20.7%

5.0%

Bank of Tokyo-Mitsubishi UFJ
Resona Bank

6.1%

Development Bank of Japan
Mizuho Trust & Banking

6.8%

Aozora Bank

20.4%

7.1%

Chuo Mitsui Trust and Banking
Senshu Ikeda Bank

7.3%

77 Bank

8.0%

8.0%

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, 2011, and the figures are rounded to the nearest first decimal place.
3. Includes current portion of long-term loans payable and investment corporation bonds due within one year.
4. LTV = Period-end total interest-bearing debt / Period-end total assets (Interest-bearing debt = Borrowings + Investment corporation bonds + Interest-bearing leasehold and security deposits)

18

Asset Management Company’s Management System
Overview of the Asset Management Company
Sekisui House SI Asset Management, Ltd.
Financial Instruments Business Operator

Trade
name

Organization
chart

General Meeting of
Shareholders(Director of Kanto Local Finance Bureau (Kinsho) Number 337)

AuditorBoard of Directors

Capital¥200 million

Compliance Committee

Investment Committee

Compliance Officer

Established

July 28, 2004

President
Risk Management andCompliance Office

Number of
officers andemployees

32 (excluding part-time officers)

Real Estate Investment
Department

Asset Management
Department

Acquisition Section

Asset Management
SectionIR & Financial Affairs
Department
Financial
Affairs
IR Section
SectionManagement
Department
General
Accounting
Affairs
SectionSectionNote: Data is as of the end of September 2011.

Strengthening of Management Status
Personnel Reinforcement from Sekisui House: Six Seconded as of the End of September 2011
Breakdown of Seconded Staff
Full-time director (Real Estate Investment Department andManagement Department) : 1
Real Estate Investment Department: 2
Asset Management Department : 1
IR & Financial Affairs Department: 1
Management Department : 1

Strengthening communication and collaboration between
each section of the Asset Management Company andeach department of Sekisui House
Deepening the relationship from sponsor commitment
and personnel affairs

5 employees are seconded from Sekisui House
after the change of sponsor in March 201019

Overview of Growth Strategy for a New Stage “Phase I”
Having Promoted Each Measure Under a Management Policy that Prioritizes the Promotion of Stabilizing our Financial Standing, Achieved theStrategic Goal for Phase I

Measures for Phase I

Period ended September 30, 2010
(Tenth fiscal period)

Period ended March 31, 2011
(Eleventh fiscal period)

Period ended September 30, 2011
(Twelfth fiscal period)

Financial
Strategy

Utilization of the creditworthiness of the sponsors
 Fix interest rates , extend the termsof loans and diversify repayment
dates
 Release assets from collateral
security Strengthen and broaden bankrelationships

 Realized fixing of interest rates, extension of the terms ofloans and diversifying of repayment dates
 Realized releasing assets from collateral security for all
borrowings in July 2010
 Borrowed from six new financial institutions in July andAugust of 2010

Fixed interest ratio: 62.9%
Long-term ratio: 78.6%
Continuation of zero collateral
Since then, maintained bankformation of 15 institutions

Internal Growth
Strategy

External Growth
Strategy

Utilization of the pipeline of the sponsors
 Enhance information collection
through utilization of the Pipeline
Support Agreement
 Evaluate acquisition of property
within existing borrowing capacity
 Proactively exchange opinions withpersonnel in charge of property
development at Sekisui House Proactively gathering property information from othersources in addition to the information from the sponsor
 October 2010
Acquired 3 properties
 March 2011
Acquired 1 property

 Periodically holding planning meetings with Sekisui
House’s East Japan Development Department

Information providers/property
information on increasing trend June 2011
Acquired 1 property
Participated in Sekisui House’ssingle and compact type rental
condominium project for the Tokyo
metropolitan area.

Utilization of the know-how and networks of the sponsors
 Utilize the leasing capability of
Sekiwa Real Estate concerning
residential properties
 Enhance the overall management
effectiveness by strategicallychanging property managementcompanies of retail facilities

Strategic Goal
Aim to recover 6-month cash distributions tothe ¥10,000 level at an early stage

 Assigning Sekiwa Real EstateGroup as a property manager forthe 3 properties acquired fromSekisui House

 Assigning Sekiwa Real EstateGroup as property managementcompany for the property
acquired from outside

 Anchor tenant opened after Change of property managers
renewal of HAMAMATSU Westat 6 retail facilities
Building at HAMAMATSU Plaza
completed Settlement reached in a lawsuit
on rent decrease at b-toss
IKEBUKURO

Tenth fiscal period actual
cash distribution

Eleventh fiscal period
actual cash distribution

Twelfth fiscal period
actual cash distribution

8,160 yen

9,793 yen

10,045 yen

Achievement status

Reached the target
level set as thefinancial strategy
Realized reductionof borrowing costs
 Realized external
growth of 5 residential
properties (totalacquisition price of 6.3
billion yen)
 Development of property
acquisition channels for
Phase II “significantly
increasing asset size”

Occupancy rate ofentire portfolio has
been maintained athigh level
Focusing on leasing,aiming for fulloccupancy of retailfacilities

Realized recovery of
6-month cash
distributions to the
10,000 yen level203. Next Growth Strategies and Forecasts
for the Thirteenth Fiscal Period Ending March 31, 2012

Prime Maison HIGASHISAKURA

Transition to Growth Strategy for a New Stage “Phase II”
From Formulation and Announcement of Growth Strategy to Phase I
Fiscal Period Ended September 30, 2011
(twelfth fiscal period)

May 2010
Formulation and Announcement of Growth Strategy (partial additions in November 2010)
Management Policy: Prioritize the promotion of stabilizing our financial standing
Strategic Goal:
Aim to recover 6-month cash distributions to the 10,000 yen
level at an early stage

As a result of management based on
the management policy, achieved
strategic goal “6-month cash
distributions to the 10,000 yen level”
within expected period

Transition to Phase II
Fiscal Period Ending March 31, 2012 (thirteenth fiscal period)

Implementation period

In order to maintain and increase the cash distribution level, transition to Phase II with succeeding most of themeasures of Phase I

With regard to the initiallyassumed implementation period (2to 3 years), flexible deliberations
on extension will be madeaccording to market conditions

Management Policy: Enhance profitability by significantly increasing asset size
Strategic Goal:
Aim to grow earnings based on doubling of asset size to 200
billion yen with due consideration given to cash distribution level

Measures for Phase II
External Growth Strategy• Add high quality residential
properties to the portfolio• Discuss utilizing the warehousing
functions of the sponsors

Internal Growth Strategy• Utilize Sekiwa Real Estate Group as theproperty management company ofresidential properties acquired from thesponsors• Increase the value of retail facilities

Financial Strategy• Enhance our financial standing byimplementing public offerings at an
appropriate timing, size and structure• Discuss diversifying financing methods

Further Strengthening of Collaboration with Sponsors
Aim to develop into a REIT that has a strong financial standing through increase of asset size focused on
maximizing unitholder returns by building a portfolio centering on high-quality residential properties.
22

Growth Strategy for “Phase II” – External Growth Strategies –External Growth Strategy

 Add High Quality Residential Properties to the Portfolio

Raise investment ratio of residential
properties which have cash flow
with relatively high stabilityEnhance profitability by increasing asset size centering on utilization of the supply
capability of high-quality rental housing owned by Sekisui HouseContinue to discuss establishment of pipelines with Sekiwa Real Estate Group companies
which are Sekisui House’s fully-owned subsidiaries

Discuss replacement of properties for the improvement of the portfolio’s quality

Consider the submission of agenda
for change of Articles ofIncorporation (target of asset
management) at the general
meeting of unitholders(Review of core assets)

 Discuss Utilizing the Warehousing Functions of the Sponsors
Multilaterally discuss means of adjustment of property acquisition timing
including establishment of warehousing functions, according to needs[Reference] Rental Housing Properties Owned by Sekisui House and Rental Housing Properties Under Development
Owned Rental Housing Properties (Note 1)

Rental Housing Properties Under Development(Notes 1 and 2)

Residencia
Ginza East

Prime Maison
GOKISO

Prime Maison
YUHIGAOKA

Prime Maison
KITA TANABE

Prime Maison
TERIHA

Chuo-ku, Tokyo

Nagoya-shi, Aichi

Osaka-shi, Osaka

Osaka-shi, Osaka

Fukuoka-shi, Fukuoka

With its philosophy of “permanent residential quality” and “placing residents first,” leading residential property developer Sekisui Houseowns urban rental condominiums which are high-quality and score high in tenant satisfaction, starting with the Prime Maison Series that thecompany has either planned, developed or invested in with its know-how gained from years of working with for-sale condominiums.

(Tentative name) Prime
Maison HATCHOBORI
Chuo-ku, Tokyo(Tentative name) Prime
Maison WASEDA
Shinjuku-ku, Tokyo

Properties located in Central Tokyo for which theAsset Management Company is also participating
in development meetings

Notes: 1. There are no specific plans to acquire these properties. 2. Images are renderings based on design documents and may differ from the actual buildings.

23

Growth Strategy for “Phase II” – Internal Growth Strategy –Internal Growth Strategy

 Utilize Sekiwa Real Estate Group as the Property Management Company of
Residential Properties Acquired from the SponsorIn the case of an acquisition of a property developed by Sekisui House, the leading candidate for theproperty management company will be the Sekiwa Real Estate Group which would have a deeper
understanding of the characteristics of such a property⇒ The final decision will be made with rigorous evaluation according to the rules of the AssetManagement Company

Establish the Sekisui House SI brandStrengthen leasing by aiming toenhance recognition in the market

Conduct tenant solicitation and effective central management utilizing the Sekiwa Real Estate Group’s
nationwide network and know-how of property management

 Increase the Value of Retail FacilitiesConsidering on installing of new equipment and compartment renovation work, according to needs, forthe realization of a full occupancy of retail facilities at an early stage
An early and accurate understanding of the needs of tenants⇒ Appropriate responses to requests for rent revision and contract renewals

Aim for enhancement in profitability ofexisting portfolio

Proactively exchange opinions with Spring Investment concerning management of retail facilities[Reference] Sekiwa Real Estate Group・Fully funded by Sekisui House, the core is the 6 Sekiwa Real Estate companies conducting
business nationwide
・Expand Sekisui House’s real estate department (real estate sale and real estate leasing
business)
・The real estate leasing department has records of management of 480,000 units nationwide
centering on rental housing (Note 1)
・Occupancy rate for properties leased as Sha-Maison (Note 2) : 95.7% (Note 1)
Sekiwa Real Estate, Ltd.

Sekiwa Real Estate Tohoku, Ltd.

Sekiwa Real Estate Chubu, Ltd.

Sekiwa Real Estate Kansai, Ltd.

Sekiwa Real Estate Chugoku, Ltd.

Sekiwa Real Estate Kyushu, Ltd.

→ Promoting theestablishment of acollaborative structure forresidential leasing

Notes: 1. Figure is as of the end of July 2011.
2. “Sha-Maison” refers to the rental housing brand where construction is undertaken by Sekisui House and management by the
Sekiwa Real Estate Group.

“MAST CLUB” promoted by the Sekiwa Real Estate GroupAs part of its promotional measures for new residents,
the Sekiwa Real Estate Group is promoting the “MASTCLUB” to residents of rental housing managed by
Sekiwa Real Estate companies, which provides
members with life support and other services

MAST Point Service (free membership, no annual fees)
A maximum of 3 months of free rent will be given when relocating toa property managed by the Sekiwa Real Estate Group by giving
points back by turning rent into points. Furthermore, there are some
services for purchasing real estate.

24

Growth Strategy for “Phase II” – Financial Strategies –Financial Strategy

 Enhance Our Financial Standing by Implementing Public Offerings at an
Appropriate Timing, Size and StructureConsider implementing public offerings through comprehensive consideration of revenue outlook, NAV, LTV, etc.
Enhance profitability of portfolio
Increase market value (liquidity) ofinvestment units

Secure flexible and stable financing
methods according to market
conditions
Aim for reducing financing costs

Aim for maintaining and increasing
cash distribution level Discuss Diversifying Financing MethodsDiscuss setting a commitment line aiming for agile financing

Further strengthening of bank formation (diversification of lenders)

Discuss refinancing via issuance of investment corporation bonds and loans as redemption funds for theinvestment corporation bonds of March 2012 through comprehensive consideration of economic
conditions, etc.

Aim for further strengthening of our
financial standing

Re-registration is scheduled for the shelf registration of investment corporation bond which will
expire during the fiscal period ending March 2012 (thirteenth fiscal period)(Acquisition of new credit rating continues to be considered)

Basic Thinking on Financing Methods
Aim for implementing public offerings at appropriate timing from the point of view of maximizing unitholder returns, constantly
preparing for and discussing the best financing methods, toward enhancing profitability by significantly increasing asset size
■Our Understanding of Current Economic Environment
The Tokyo Stock Exchange REIT Index at the end of October 2011 was 902.22, down 14.5%
compared to the end of March 2011. The global market is in turmoil with the backdrop of theEuropean sovereign debt issues, etc.
We understand that in executing the growth strategy of “Phase II,” careful
deliberation is required for equity financing

Issue of Top Priority in Public Offering

Maintaining and increasing cash distribution level- Maintaining the current stance of focusing on
existing unitholders -25

Forecasts for the Thirteenth Fiscal Period
Operating Revenue, Ordinary Income and Net Income（million yen）

Operating revenue

Ordinary income

Cash Distributions per Unit(yen)

Net income

4,000

10,000

3,500
3,000

8,000

2,500
6,000

2,000
1,500

4,000

1,000
2,000

500
0

0
Period ended Period ended Period ended Period ended Period ended Period ending
Sep. 2009
Mar. 2010
Sep. 2010
Mar. 2011
Sep. 2011
Mar. 2012(outlook)

Period ended Period ended Period ended Period ended Period ended Period ending
Sep. 2009
Mar. 2010
Sep. 2010
Mar. 2011
Sep. 2011
Mar. 2012(outlook)

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

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

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

Fiscal Period Ended
Mar.31, 2011(182 days)

Fiscal Period Ended
Sep. 30, 2011(183 days)

Fiscal Period Ending
Mar.31, 2012(183 days) (outlook)

Operating revenue (million yen)

3,391

3,402

3,334

3,462

3,533

3,557

Ordinary income (million yen)

1,075

1,053

956

1,144

1,156

1,168

Net income (million yen)

1,074

1,052

938

1,126

1,155

1,167

Cash distributions per unit (yen)10,262

10,052

8,160

9,793

10,045

10,150<Assumptions for forecast of fiscal period ending March 31, 2012>◆Assets under management: 58 properties owned as of the fiscal period ended September 30, 2011 (twelfth fiscal period) ◆Management fees: Approx. ¥335 million◆Noncurrent asset tax, etc. that will be allocated as expenses related to rent business: Approx. ¥220 million ◆Depreciation and amortization: Approx. ¥680 million◆Interest expenses, loan origination fees, etc.: Approx. ¥429 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 14, 2011. Actual operating revenue, ordinary income, net income and cash distributions perunit may differ as a result of subsequent acquisitions or sales of real estate, trends in real estate markets, changes in the operating environment or other conditions affecting theInvestment Corporation. The above forecasts are not intended to be guarantees of business results or cash distributions.
26

4. Appendix

Prime Maison HIGASHISAKURA

Balance Sheets (1)11th fiscal period (As of March 31, 2011)
Million yen

12th fiscal period (As of September 30, 2011)

Percent of total

Million yen

Percent of total

ChangeMillion yen

Period on period (%)

AssetsCurrent assets
Cash and deposits

1,731

2,184

452

Cash and deposits in trust

3,348

3,408

60

Operating accounts receivable

52

44

-8

Prepaid expenses

103

170

66

Deferred tax assets

0

-

-0

Other

9

0

-9

-20

-2

18

Allowance for doubtful accounts
Total current assts

5,225

4.9

5,806

5.3

581

11.1

Noncurrent assets
Property, plant and equipment
Buildings in trust

43,402

44,781

1,378

Accumulated depreciation-5,389-6,020-630

Buildings in trust, net

38,01338,760

747

529

545

15

Accumulated depreciation

-142

-158

-15

Structures in trust, net

Structures in trust

386

386

-0

Machinery and equipment in trust

646

658

11

Accumulated depreciation

-132

-154

-22

Machinery and equipment in trust, net

513

503

-10

Tools, furniture and fixtures in trust

38

45

7

Accumulated depreciation

-11

-14

-3

27

30

3

Land in trust

Tools, furniture and fixtures in trust, net

62,96363,945982

Total property, plant and equipment

101,904

94.9

103,627

94.5

1,723

1.7

Intangible assets
Other

5

Total intangible assets

5

4
0.0

4

-0
0.0

-0

-11.5

Investments and other assets
Lease and guarantee deposits

10

10

-0

Long-term prepaid expenses

118

125

6

Other

84

87

Total investments and other assets

213

0.2

224

0.2

10

4.9

102,123

95.1

103,856

94.7

1,733

1.7

Total noncurrent assets

3

Deferred assets
Investment corporation bond issuance costs

3

Total deferred assets

3

0.0

1

0.0

-2

-52.6

107,352

100.0

109,664

100.0

2,312

2.2

Total Assets

1

-2

28

Balance Sheets (2)11th fiscal period (As of March 31, 2011)
Million yen

Percent of total

12th fiscal period (As of September 30, 2011)
Million yen

Percent of total

ChangeMillion yen

Period on period (%)

Liabilities
Current liabilities
Operating accounts payable

155

218

Investment corporation bond due within one year

5,000

5,000

-

Current portion of long-term loans payable

6,300

6,587

287

Accounts payable – other

284

288

4

Accrued expenses

84

76

-7

Income taxes payable

0

0

-

Consumption taxes payable

-

16

16

Advances received

420

432

11

Allowance for disaster losses

16

-

-16

Other
Total current liabilities

20
12,28263

3
11.4

12,624

-17
11.5

341

2.8

Noncurrent liabilities
Long-term loans payable

39,27541,288Tenant leasehold and security deposits in trust

4,143

4,072

Total noncurrent liabilities

43,41940.5

45,361

41.4

1,941

4.5

55,702

51.9

57,985

52.9

2,283

4.1

50,52347.1

50,523

46.1--

Total Liabilities

2,013
-71

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

1,126

Total surplus

1,126

1.0

1,155

1.0

28

2.6

Total unitholders’ equity

51,65048.1

51,679

47.1

28

0.1

51,65048.1

51,679

47.1

28

0.1

107,352

100.0

109,664

100.0

2,312

2.2

Total Net Assets
Total Liabilities and Net Assets

1,155

28

29

Statements of Income
11th fiscal period
from October 1, 2010
to March 31, 2011

12th fiscal period
from April 1, 2011
to September 30, 2011

Percent of
total

Million yen

ChangePercent of
total

Million yen

Period on period(%)

Million yen

Operating revenue
Rent revenue - real estate

3,462

Total operating revenue

3,462

3,533
100.0

3,533

70
100.0

70

2.0

Operating expenses
Expenses related to rent business

1,487

1,564

77

Asset management fee

207

215

7

Asset custody fee

10

10

0

Administrative service fees

24

24

0

Directors’ compensations

3

3

-

Provision of allowance for doubtful accounts

5

0

-5

Other operating expenses

68

Total operating expenses

1,806

52.2

1,911

54.1

104

5.8

1,655

47.8

1,622

45.9

-33

-2.0

Operating Income

9223

Non-operating income
Interest income

0

0

-0

Reversal of distributions payable

0

0

0

Reversal of allowance for disaster losses

-

1

1

Other

0

0

Total non-operating income

0

0.0

2

0
0.1

1

135.8

Non-operating expenses
Interest expenses

332

324

-7

Interest expenses on investment corporation bonds

50

50

-0

Amortization of investment corporation bond issuance costs

2

2

0

126

55

-71

Borrowing related expenses
Other
Total non-operating expenses
Ordinary Income

0

35

34

512

14.8

467

13.2

-44

-8.7

1,144

33.0

1,156

32.7

12

1.1

Extraordinary Losses
Provision of allowance for disaster losses

16

Total extraordinary losses

16

0.4

-

-

-16

-100.0

Income before Income Taxes

1,127

32.6

1,156

32.7

29

2.6

Income taxes - current

-

0

-16

0

-

Income taxes - deferred-

Total income taxes

0

0.1

0

0.0

0

39.3

1,126

32.5

1,155

32.7

28

2.6

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

0

0
1,126

0

0
32.5

1,155

0
32.7

28

2.6

30

Statements of Cash Flows / Cash Distributions
Statements of Cash Flows
11th fiscal period
from October 1,
2010
to March 31, 2011

12th fiscal period
from April 1, 2011
to September 30,
2011

11th fiscal period
from October 1,
2010
to March 31, 2011

12th fiscal period
from April 1, 2011
to September 30,
2011

Million yen

Million yen

Million yen

Million yen

Income before income taxes

1,127

1,156

Depreciation and amortization

650

672

Net cash provided by (used in) operating activities

Net cash provided by (used in) financing activities

Amortization of investment corporation bond issuance costs22

Increase (decrease) in allowance for doubtful accounts

-3

-18

Interest income-0-0Interest expenses

383

375

Provision of allowance for disaster losses

16-

Decrease (increase) in operating accounts receivable

28Decrease (increase) in prepaid expenses

69

-53

Increase (decrease) in operating accounts payable

81

54

Increase (decrease) in accounts payable - other7

12

Increase (decrease) in accrued expenses-55-

Increase (decrease) in consumption taxes payable

-18

16

Increase (decrease) in advances received

10

11

Decrease (increase) in long-term prepaid expenses

13

-19

Other, net
Subtotal

13

-9

2,300

2,207

Repayments of short-term loans payable-3,200-

Proceeds from long-term loans payable

18,0098,600

Repayments of long-term loans payable-12,022-6,300

Dividends paid

-939

-1,126

Net cash provided by (used in) financing activities

1,847

1,173

Net increase (decrease) in cash and cash equivalents

-778

513

Cash and cash equivalents at beginning of period

5,858

5,080

Cash and cash equivalents at end of period

5,080

5,593

0

0

-375

-382

Disaster losses paid-

-3

Income taxes paid

-11

-0

1,913

1,821

11th fiscal period
from October 1,
2010
to March 31, 2011

12th fiscal period
from April 1, 2011
to September 30,
2011-4,432-2,406

Yen

Yen

121

179

I Unappropriated retained earnings

1,126,993,023

1,155,971,124

-223

-251

II Cash Distributions

1,126,880,510

1,155,878,150(9,793)(10,045)

112,513

92,974

Interest income received
Interest expenses paid

Net cash provided by (used in) operating activities

Cash Distributions

Net cash provided by (used in) investment activities
Purchase of property, plant and equipment in trust
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-5-3

Net cash provided by (used in) investment activities-4,539-2,481(Cash distributions per unit)
III Retained earnings brought forward31

Summary of Selected Financial Data
11th fiscal period
from October 1, 2010
to March 31, 2011

12th fiscal period
from April 1, 2011
to September 30, 2011

182

183

Total assets

107,352 million yen

109,664 million yen

Net assets

51,650 million yen

51,679 million yen

Unitholders’ capital

50,523 million yen

50,523 million yen

Investment units outstanding

115,070 units

115,070 units

Net assets per unit

448,860 yen

449,112 yen

1,126 million yen

1,155 million yen

Business days

Total cash distributions

9,793 yen

10,045 yen

Ordinary income to total assets1(annualized)

2.2%

2.1%

Return on unitholders’ equity2(annualized)

4.4%

4.5%

Unitholders’ equity ratio3

48.1%

47.1%

57

58

272,273.12m2

276,314.61m2

96.6%

97.3%

Depreciation expense

649 million yen

672 million yen

Capital expenditures

346 million yen

49 million yen

2,625 million yen

2,641 million yen

1,777 million yen

1,828 million yen

15,445 yen

15,890 yen

51,874 million yen

54,032 million yen

48.3%

49.3%

50.7%

51.7%

4.3 times

4.5 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.
32

Outline of Portfolio ~Residential Properties~
Primary Properties Owned
Central Tokyo / Jonan Area
Spacia GOTANDA

Spacia GINZA

Greater Tokyo/ Adjoining Cities
J-FLATS YOKOHAMA

Prime Maison MUSASHINONOMORI

Spacia OISENDAIZAKA

Spacia AZABUJUBAN III

Major Regional Cities
S-RESIDENCE
KYOBASHI

Prime Maison
HIGASHISAKURA

33

Outline of Portfolio ~Retail Properties~
Ratio by Region (Retail Properties)

Properties Owned
Central Tokyo / Jonan Area

Central Tokyo/
Jonan Area
Major
Regional
Cities73.6%

b-town JINGUMAE II

b-town MINAMIAOYAMA

8.9%
Greater Tokyo/
Adjoining Cities

17.5%

As of Sep. 30, 2011

Greater Tokyo/ Adjoining Cities
b-toss IKEBUKURO

KOJIMA NEW
KAMIFUKUOKA

Joy Square YUGAWARA

Major Regional Cities
HAMAMATSU PlazaRINKU
HAGURAZAKI Plaza

Bell Plaza
Shopping Center

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

34

Portfolio at a Glance (1)Properties Owned as of September 30, 2011
Acquisition Price
Property No.

Core Assets

Residence-1

Property Name

Spacia GINZA

Location

Ginza, Chuo-ku, Tokyo

Site Area (m2)

636.36

Total Floor Area (m2)

7,836.57

Price(Million yen)Appraisal
Value at End of
Period(Million yen)

Ratio
(%)

Occupancy Rate (%)
As of Mar. 31,
2011

As of Sep. 30,
2011Completion Date

5,290

5.0

5,210

96.8

96.2

February 7, 2005

1,510

91.3

94.5

January 16, 2004

1,740

100.0

100.0

June 13, 2003

Residence-3

Spacia AZABUJUBAN II

Roppongi, Minato-ku, Tokyo

677.452,317.87

1,730

1.6

Residence-4

Spacia EBISU II

Higashi, Shibuya-ku, Tokyo

561.582,452.69

1,960

1.8

Residence-5

Spacia EBISU III

Hiroo, Shibuya-ku, Tokyo

169.00871.90

700

0.7

740

100.0

96.8

October 20, 2004

Residence-6

Spacia KANDA

Kandatacho, Chiyoda-ku, Tokyo

307.692,028.19

1,360

1.3

1,250

98.7

94.8

February 20, 2004

Residence-7

Spacia SENDAGAYA

Daikyo-cho, Shinjuku-ku, Tokyo

340.49844.13

576

0.5

514

94.7

93.7

August 31, 2004

Residence-8

Spacia KITASHINJUKU

Kitashinjuku, Shinjuku-ku, Tokyo

504.412,204.07

1,290

1.2

1,340

100.0

100.0

August 6, 2004

Residence-9

Spacia MEGUROFUDOMAE

Nishigotanda, Shinagawa-ku, Tokyo

217.381,044.37

766

0.7

767

97.8

97.8

January 12, 2005

Residence-10

FITL KOMAGATA

Komagata, Taito-ku, Tokyo

663.54

3,406.10

1,870

1.8

1,840

95.3

100.0

July 28, 2004

Residence-11

Spacia MACHIDA

Haramachida, Machida-shi, Tokyo

587.484,033.59

1,360

1.3

1,350

99.1

97.5

February 23, 2004

Residence-12

Spacia KAWASAKI

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

683.694,656.10

2,130

2.0

2,100

96.8

97.4

July 15, 2004

Residence-13

IMAIKE IRIS NIBANKAN

Imaike, Chikusa-ku, Nagoya-shi, Aichi

360.54

1,375.76

300

0.3

195

98.5

100.0

October 15, 1991

1,018

1.0

944

100.0

100.0

March 5, 1999

1,890

100.0

100.0

January 23, 2007

Residence-14

GRACIA FIS

Furuichiba, Saiwai-ku, Kawasaki-shi, Kanagawa

Residence-15

J-FLATS YOKOHAMA

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

1,992.09

3,737.47

611.41

3,076.45

2,090

2.0

Residence-16

FITL KAMEIDO

Kameido, Koto-ku, Tokyo

438.432,899.67

1,650

1.6

1,420

97.0

97.9

November 30, 2005

Residence-17

Spacia MEGURO

Mita, Meguro-ku, Tokyo

578.01

1,283.92

887

0.8

960

94.4

97.5

November 28, 2005

Residence-18

ACT HILLS YACHIYO

Midorigaoka, Yachiyo-shi, Chiba

1,289.14

5,420.53

1,348

1.3

1,050

88.3

96.9

January 10, 1998

Residence-19

J-FLATS SUGAMO

Sugamo, Toshima-ku, Tokyo

965.702,785.83

1,510

1.4

1,440

92.3

95.1

February 22, 2007

Residence-20

S-RESIDENCE KYOBASHI

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

799.685,995.82

2,774

2.6

2,550

100.0

98.1

March 2, 2006

Residence-21

EL CIELO MEGUROHONCHO

Megurohoncho, Meguro-ku, Tokyo

865.22

1,975.84

1,220

1.1

945

86.4

96.9

February 22, 2006

Residence-22

Spacia HAKURAKU

Rokkakubashi, Kanagawa-ku, Yokohama-shi,
Kanagawa

457.54

1,593.68

844

0.8

778

98.2

100.0

February 2, 2006

Residence-23

J-FLATS MINAMIHORIE

Minamihorie, Nishi-ku, Osaka-shi, Osaka

475.06

1,994.14

1,055

1.0

915

98.2

97.0

February 19, 2007

Residence-24

Spacia GOTANDA5

Nishigotanda, Shinagawa-ku, Tokyo

593.325,590.34

3,043

2.9

2,570

96.0

95.5

March 2, 2006

Residence-25

Spacia OISENDAIZAKA

Higashioi, Shinagawa-ku, Tokyo

558.393,440.73

2,440

2.3

2,240

98.7

98.4

August 10, 2006

Residence-26

FITL SHINAGAWA SEASIDE

Higashishinagawa, Shinagawa-ku, Tokyo

1,049.00

3,127.48

2,200

2.1

1,930

97.2

96.5

June 23, 2006

35

Portfolio at a Glance (2)Acquisition Price

Core Assets

Property No.

Property Name

Location

Site Area (m2)

Total Floor Area
(m2)

Price
(Million yen)Appraisal
Value at End of
Period(Million yen)

Ratio
(%)

Occupancy Rate (%)
Completion Date
As of Mar. 31,
2011

As of Sep. 30,
2011

Residence-27

FITL MINAMIAZABUMinamiazabu, Minato-ku, Tokyo

487.27

1,479.61

1,300

1.2

1,080

100.0

100.0

August 23, 2006

Residence-28

RARETE JYOUTOU

Noe, Jyoutou-ku, Osaka-shi, Osaka

740.492,232.26

1,075

1.0

912

98.5

95.1

August 31, 2006

Residence-29

Spacia TSUKAMOTO CROWN HEIM

Tsukamoto, Yodogawa-ku, Osaka-shi, Osaka

808.542,565.66

1,250

1.2

1,020

100.0

100.0

August 10, 2006

Residence-30

Spacia KAWASAKI II

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

601.383,193.14

1,900

1.8

1,780

92.1

100.0

February 27, 2007

Residence-31

Spacia AZABUJUBAN III

Azabujuban, Minato-ku, Tokyo

380.26

2,097.45

2,700

2.5

2,200

100.0

98.8

February 22, 2007

Residence-33

FITL ITABASHIHONCHO

Yamato-cho, Itabashi-ku, Tokyo

220.85

1,446.78

1,000

0.9

842

90.7

100.0

February 27, 2007

Residence-34

FITL OIZUMIGAKUEN

Higashi-Oizumi, Nerima-ku, Tokyo

618.001,542.16

871

0.8

705

96.4

92.9

February 22, 2007

1,158.70

445

0.4

352

97.2

100.0

January 31, 2007

Residence-35

J-FLATS TENJINHIGASHI I

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

239.18Residence-36

J-FLATS TENJINHIGASHI II

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

514.892,108.69

840

0.8

645

96.3

91.5

May 23, 2007

Residence-37

J-FLATS SHIJONISHINOTOIN

Myodenji-cho, Shijo-sagaru, Nishinotoin-dori,Shimogyo-ku, Kyoto-shi, Kyoto

400.593,374.74

1,420

1.3

1,020

93.2

94.3

April 08, 2008

Residence-39

J-FLATS HIGASHISHINAGAWA

Higashi-Shinagawa, Shinagawa-ku, Tokyo

1,028.92

3,338.12

2,610

2.5

2,130

96.7

93.1

May 23, 2008

Residence-40

J-FLATS HACHIOJIMINAMINO

Nishikatakura, Hachioji-shi, Tokyo

1,134.50

2,243.06

1,000

0.9

938

88.4

98.8

March 6, 2007

Residence-41

PREGIO NISHINAKAJIMA

Higashinakajima, Higashiyodogawa-ku, Osakashi, Osaka

969.02

3,947.24

2,250

2.1

1,840

99.1

94.4

April 18, 2007

Residence-42

J-FLATS ITABASHIKUYAKUSHOMAE

Itabashi, Itabashi-ku, Tokyo

731.71

4,322.19

2,700

2.5

2,280

91.1

100.0

April 22, 2007

Residence-43

J-FLATS MUSASHIKOYAMA5

Ebara, Shinagawa-ku, Tokyo

512.62

1,616.87

1,012

1.0

894

98.3

95.8

November 5, 2007

Residence-44

J-FLATS SENDAGI5

Sendagi, Bunkyo-ku, Tokyo

250.44

1,239.10

757

0.7

616

100.0

97.3

January 9, 2008

Residence-45

J-FLATS YOTSUYASAKAMACHI5

Sakamachi, Shinjuku-ku, Tokyo

905.083,675.01

2,300

2.2

1,770

96.0

92.4

March 29, 2008

Residence-46

J-FLATS HAKATAHIGASHI

Yoshizuka, Hakata-ku, Fukuoka-shi, Fukuoka

4,590.91

9,465.09

2,250

2.1

2,110

97.3

98.2

November 21, 2007

Residence-47

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

593.552,523.71

900

0.8

726

94.2

95.5

March 14, 2008

Residence-48

J-FLATS SANGENJAYASangenjaya, Setagaya-ku, Tokyo

153.83954.94

871

0.8

728

97.2

89.0

January 22, 2008

Residence-50

Prime Maison MUSASHINONOMORI

Josuihoncho, Kodaira-shi, Tokyo

5,116.62

4,412.42

1,560

1.5

1,660

96.9

95.8

December 19, 2007

Residence-51

Prime Maison HIGASHISAKURA

Higashisakura, Higashi-ku, Nagoya-shi, Aichi

846.053,517.62

1,140

1.1

1,230

93.6

93.7

February 15, 2008

Residence-52

Prime Maison KAYABAKOEN

Kayaba, Chikusa-ku, Nagoya-shi, Aichi

1,129.02

2,301.42

640

0.6

668

96.1

85.0

November 7, 2006

Residence-53

Tre Di Casa SANGENJAYA

Shimouma, Setagaya-ku, Tokyo

473.85

1,006.89

714

0.7

738

97.0

97.0

January 28, 2008

Residence-54

Mitezza C6

Oyama-higashi-cho, Itabashi-ku, Tokyo

773.485,249.34

2,260

2.1

2,300

-

94.7

March 12, 2008

40,603.65

147,005.45

77,17672.6

69,37296.2

96.8

Residential Subtotal

36

Portfolio at a Glance (3)Acquisition Price

Core Assets

Property
No.

Property Name

Location

Site Area(m2)

Total Floor
Area (m2)

135,817.46

Price(Million yen)

Ratio
(%)

73,250.17

15,36014.5

283.83499.67

1,043

53,231.66－

Appraisal
Value at
End ofPeriod(Millionyen)

Occupancy Rate (%)
Completion Date

As of Mar.
31, 2011

As of Sep.
30, 2011

11,90094.3

96.2(Note 6)

1.0

895

100.0

100.0

May 20, 2005

4,697

4.4

3,838

100.0

100.0

－

Retail-1

HAMAMATSU Plaza

Kaminishi-cho, Higashi-ku, Hamamatsushi, Shizuoka, etc.

Retail-2

b-town JINGUMAE II

Jingumae, Shibuya-ku, Tokyo

Retail-3

RINKU HAGURAZAKI Plaza

Tajiri-cho Oaza, Gashouji, Sennan-gun,Osaka, etc.

Retail-4

b-town MINAMIAOYAMAMinamiaoyama, Minato-ku, Tokyo

385.32797.63

1,530

1.4

1,260

100.0

73.3

February 28, 2006

Retail-5

KOJIMA NEW KAMIFUKUOKATEN

Kamifukuoka, Fujimino-shi, Saitama

4,877.90

3,413.40

1,300

1.2

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

1.9

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

1.7

1,500

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

1,110

100.0

100.0

Retail Subtotal

223,549.25

91,964.87

29,05827.4

23,173

96.9

97.8

Portfolio Total

264,152.90 238,970.32

106,234

100.0

92,545

96.6

97.3

Owned as of March 31, 2011
Acquired in the period ended September 30, 2011
Owned as of September 30, 2011
Notes:

57 properties

103,974 million yen

1 property

2,260 million yen

58 properties

106,234 million yen(Note 7)

1. Based on information as of September 30, 2011. 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, total floor area figures and completion dates are based on indications given in the register. As for Rinku Hagurazaki Plaza, its total floor area is not described because the Investment
Corporation acquired 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. 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.

37

Portfolio Development Policy
Investment Diversification by Asset Class and Geographical Region
As of the date of this material
Asset Class of Real Estate
Related Assets

Allocation
Rate

RegionAllocation Rate

Specific Areas

Approx. 50%(Note 2)Central Tokyo: Chiyoda Ward, Chuo Ward, Minato Ward,
Bunkyo Ward, Shibuya Ward and Shinjuku
Ward
Jonan area: Setagaya Ward, Meguro Ward, Shinagawa
Ward and Ota Ward

GreaterTokyo/
Adjoining
CitiesApprox. 80%
including Central
Tokyo and the
Jonan Area
(Note 2)

Tokyo: Areas other than Central Tokyo and the Jonan Area
(excluding islands)
Kanagawa Prefecture: Kawasaki City, Yokohama City andothersChiba Prefecture: Ichikawa City, Urayasu City, Funabashi
City, Matsudo City and others
Saitama Prefecture: Kawaguchi City, Toda City, Saitama
City and others
Additional areas within commuting distance

Major
Regional
Cities (Note 1)

Approx. 20%(Note 2)

Sapporo City, Sendai City, Nagoya City, Kyoto City, Osaka
City, Kobe City, Hiroshima City, Fukuoka City, Kitakyushu
City and others
Additional areas within commuting distanceCentralTokyo/
Jonan Area

Residences

70~85%Core
AssetsBalance
AssetsRetail Properties

15~30%

Based on an assessment of the specific characteristics of each property, region and trade zone

Office, etc.

0~15%

Based on an assessment of the specific characteristics of each property and region

Notes: 1. "Major Regional Cities" refers to cabinet-order designated cities and cities in major regional areas that, in principle, have a population exceeding 500,000, or a trade zone of equivalent standing.
2. “Approx.” means ±10%.

38Overview of Unitholders as of September 30, 2011
Major Unitholders

Diversification of Unitholders

Name / Company Name

Investment Units
Ownership of Investment
Owned
Units Outstanding (%)(units)Japan Trustee Services Bank, Ltd.
(Trust Account)

23,02420.00

Goldman Sachs International

13,163

11.43

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

10,6699.27

Sekisui House Ltd.

7,800

6.77

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

6,849

5.95

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

6,261

5.44

Deutsche Bank AG London-PB Non-Treaty
Clients 613

3,627

3.15

JOINT CORPORATION

3,000

2.60

Spring Investors Co., Ltd.

2,600

2.25

Nomura Bank (Luxembourg) S.A.

2,215

1.92

79,208

68.83

Financial Institutions (including securities companies)

Other domestic firms

Foreign firms

Individuals and others

52 (0.94%)
Sep. 30,
2011
5,547
unitholders

5,329 (96.07%)
44 (0.81%)
90 (1.66%)
75 (1.39%)

Mar. 31,2011
5,412
unitholders

5,203 (96.14%)

40 (0.70%)
98 (1.72%)
70 (1.23%)

Sep. 30,
2010
5,710
unitholders

5,502 (96.36%)

0%

Total

■Note: The status of large holdings as determined by the large share holdings reports(including Reports of Changes) submitted by November 10, 2011 is as follows.
Name

Tower Investment
Management Co.,Ltd.

Mizuho Trust &Banking Co., Ltd

DIAM
Co., Ltd.

17,278 units

12,965 units

15,439 units

Total percentage ofownership

15.02%

11.27%

13.42%

Submission dateMar. 7, 2011

May 31, 2011

Oct. 13, 2011

Total units held

90 (1.62%)
76 (1.37%)

20%

40%

60%

80%

100%

Sep. 30,2011
115,070
units

53,346(46.36%)

15,527(13.49%)27,488(23.89%)18,709(16.26%)

Mar. 31,2011
115,070
units

50,240 (43.66%)

17,885(15.54%)28,883(25.10%)18,062(15.70%)Sep. 30,2010
115,070
units

41,503 (36.07%)

0%

20%

18,332(15.93%)40%

34,363(29.86%)60%

20,872(18.14%)

80%

100%

39

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

400,000

2000

Sekisui House SI Investment Corporation investment unit price (left axis)
TSE REIT Index (right axis)
300,000

1500

200,000

1000

100,000

500

H20.9…
H20.1…
H20.1…
H20.1…
H20.1…
H20.1…
H20.1…
H20.1…
H21.1.8
H21.1…
H21.2.2
H21.2…
H21.2…
H21.3.9
H21.3…
H21.4.1
H21.4…
H21.4…
H21.5…
H21.5…
H21.6.2
H21.6…
H21.6…
H21.7.6
H21.7…
H21.7…
H21.8…
H21.8…
H21.9.1
H21.9…
H21.9…
H21.1…
H21.1…
H21.1…
H21.1…
H21.1…
H21.1…
H21.1…
H22.1.4
H22.1…
H22.1…
H22.2.8
H22.2…
H22.3.3
H22.3…
H22.3…
H22.4.7
H22.4…
H22.4…
H22.5…
H22.5…
H22.6.8
H22.6…
H22.6…
H22.7…
H22.7…
H22.8.4
H22.8…
H22.8…
H22.9.7
H22.9…
H22.1…
H22.1…
H22.1…
H22.1…
H22.1…
H22.1…
H22.1…
H22.1…
H23.1.7
H23.1…
H23.2.1
H23.2…
H23.2…
H23.3.8
H23.3…
H23.3…
H23.4…
H23.4…
H23.5…
H23.5…
H23.6.1
H23.6…
H23.6…
H23.7.5
H23.7…
H23.7…
H23.8.9
H23.8…
H23.8…
H23.9…
H23.9…

0

Sep. 2008

Mar. 2009

Sep. 2009

Sep. 2010

Mar. 2010

Mar. 2011

0Sep. 2011(units)5,000

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

H20.09.30

H20.10.31

H20.11.30

Sep. 2008

H20.12.31

H21.01.31 H21.02.28

H21.03.31

H21.04.30

Mar. 2009

H21.05.31

H21.06.30

H21.07.31

H21.08.31

H21.09.30

H21.10.31

Sep. 2009

H21.11.30

H21.12.31

H22.01.31 H22.02.28

H22.03.31

H22.04.30

Mar. 2010

H22.05.31

H22.06.30

H22.07.31

H22.08.31

H22.09.30

H22.10.31

Sep. 2010

H22.11.30

H22.12.31

H23.01.31 H23.02.28

H23.03.31

H23.04.30

Mar. 2011

H23.05.31

H23.06.30

H23.07.31

H23.08.31

H23.09.30

Sep. 201140

◇ This document is provided for information purposes only and is not a solicitation for investment, nor a recommendation
or invitation to make specific transactions. We caution readers to contact their securities companies with regard to thepurchase of investment units in Sekisui House SI Investment Corporation and to undertake 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
Exchange or other related laws or regulations.
◇ 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 andother factors. Accordingly, strategies, goals and forecasts regarding future dates do not guarantee the Investment
Corporation’s future performance, operating results or financial position. Actual results may differ significantly fromexplicit or implicit statements made herein regarding future performance, operating results, financial position or otherconditions.
◇ While Sekisui House SI Investment Corporation takes reasonable care in the preparation of this document, it does notguarantee the accuracy and completeness of its content. Readers are also cautioned that the contents of thisdocument may be changed or deleted without prior notice.
◇ Making a copy of, or appropriation of, the content contained herein without prior permission is prohibited.
◇ This English language document is an abridged translation of the Japanese language document issued on the same
day and was prepared solely for the convenience of, and reference by, overseas investors. Sekisui House SI
Investment Corporation gives no warranties as to its accuracy or completeness.