The 10th Fiscal Period Ended October 31, 2019 May 1, 2019 to October 31, 2019 SEKISUI HOUSE REIT, INC. Presentation Material December 16, 2019
Asset Management Company: Sekisui House Asset Management, Ltd. Registered by the Director of Kanto Local Finance Bureau, as a Financial Instruments Business Operator Registration (Kinsho) No. 2791. Member of the Investment Trusts Association, Japan
Contents
Summary
003
005 Growth Strategies Utilizing Sekisui House's Support 006 Sponsor’s Rating and AUM History of SHR’s AUM 008 009 010 Financial Results and Forecast 011 Results and Forecast of NOI and NOI Yield by Use
Portfolio of Shr
013 Changes in Occupancy Rate 014 Overview of Portfolio 015 Diversification Status of Commercial Properties Portfolio 016 Selection of a Lease Scheme for Commercial Properties Outline of Commercial Properties 018 020 Diversification Status of Residential Properties Portfolio 021 Occupancy Status of Residences 022 Rent Trends of Residences 024 Residential Properties Portfolio Map 025 Residential Properties Portfolio List
Financial Base
027 Financial Results 029 Overview of Interest-Bearing Liabilities GROWTH STRATEGY 033 Future Growth Strategy 034 Policy for Utilizing Internal Reserve 035 Sekisui House Sponsor's Pipeline 036 038 ESG initiatives of SHR ESG initiatives of Sekisui House 039 Changing Management Fee Structure for Investors
Appendix
041 Balance Sheet 042 Statement of Income and Retained Earnings 043 List of Portfolio 045 Continuous Investment in Prime Properties 046 Portfolio Development Policy Investment Policy for Hotel 047 048 051 Structure of Sekisui House Reit 052 Unitholders Composition 053 Changes in Unit Price 054 Overview of Asset Management Company Assets Acquisition and Replacement after the Merger Continuous Improvement of Unitholder Value 007 Estimated Value at the End of Period
Note 1: Money amounts less than the indicated figures are rounded down and percentage figures are rounded to the nearest first decimal place unless otherwise indicated in th Note 2: Unless otherwise indicated, the figures are as of December 16, 2019 Note 3: The "Inves Melor Melopoltan Areas" is Greater Tokyo, Oaka and Repova and "Greater Tokyo" indudes Tokyo, Kanaeva Pelecture, Pelecture and Saitama Pelecture, "Oaka are Prefecture; and "Nagoya area" includes Aichi Prefecture. The same shall apply hereinafter. 3
■ Corporate Profile: . Trade name . Asset management company Sponsor Sekisui House Reit, Inc. (TSE:3309) Sekisui House Asset Management, Ltd. Sekisui House, Ltd.
■   Owned Assets:
Aggregate acquisition price . • Number of properties
■ Distributions:
• Fiscal period ends •   Actual for 10th fiscal period • Forecast for 11th fiscal period • Forecast for 12th fiscal period
■ Net Asset Value:
Actual for 10th fiscal period
■ Financial information:
Number of investment units issued and outstanding Total interest-bearing liabilities Unitholders' capital • Long-term issuer rating JPY 527.0 billion 119 properties April and October of each year JPY 1,631 per unit JPY 1,623 per unit JPY 1,630 per unit JPY 81,958 per unit 4,288,666 units JPY 244.2 billion JPY 149.2 billion R&I: AA- (stable) JCR: AA (stable)
Highlight
Around a 2.6-fold expansion of asset size since the end of 7th FP through the merger with SHI and 4th follow on PO. (acquisition price) JPY billion) < Major Owned Assets>

Strength and Track record of Sekisui House’s Development Business
■ Sekisui House's Corporate Profile (As of January 31, 2019): • Corporation Name: Sekisui House, Ltd. [TSE:1928] •   Date of Establishment: August 1, 1960 • Capital Stock: JPY 202,591.2 million • Cumulative Number of Houses Built: 2,425,372 houses
■ How Sekisui House involved in J-REIT:
Since 2005, Sekisui House has been entered into the J-REIT field by acquiring an equity stake in Japan Excellent Asset Management Co., Ltd., the asset manager for Japan Excellent, Inc. ("JEI" [TSE: 8987]) • In May 2010, Sekisui House acquired 75% of Joint Capital Partners, asset manager of Joint Reit Investment Corporation, which is renamed Sekisui House SI Investment Corporation ("SSI" [TSE: 8973]). • In May 2014, Sekisui House withdrew from sponsorship of JEI. • In Dec. 2014, SHR was listed on the Real Estate Investment Trust Securities Market of Tokyo Stock Exchange, Inc. [TSE:3309] In Mar.  2017, Sekisui House became sole sponsor of SSI,    which is renamed to Sekisui House Residential Investment Corporation ("SHI"). • In May 2018, SHR merged with SHI. ■ Sekisui House Group Business Strategies: Our development business invests in the future growth of environmental creation development, aiming for stable growth through sustainable community development and an improved asset turnover rate. ■ Sekisui House's Consolidated Financial Statement (FY2018 (18/2-19/1)) (JPY billion) ■Other businesses mOverseas business ■ Development Business mSupplied Housing Business m Built-to Order Business
Note 2: Of all sponsors, main sponsor is indicated.

■ Changes in Asset Size

■ Unrealized capital gains as of the end of 10th FP (Oct. 31, 2019) Residences
4th follow-on PO Merger with SHI Hotels Entire portfolio Unrealized capital gains¹, 3 JPY 15.6 billion (+JPY 5.4 billion) JPY 55.1 billion (+JPY 12.8 billion) 22.9% ((0.7)pt.) JPY 1.5 billion (+JPY 0.2 billion) 4.3% (+0.7pt.) JPY 72.2 billion (+JPY 18.4 billion) 13.9% (+2.0pt.) Unrealized capital gains ratio¹, 3 6.4% (+2.1pt.) Note 1: 'Unvealized capital gains' is calculated by deducting the book value from the appraisal value at each point in time and 'Unrealized capital gains ratio' is calculat Note 2: 'Market capitalization' is calculated based on the closing price of investment units at each time point and the totalnumber of investment units issued and outstandin Note 3: The amounts in parentheses are the comparison between the amount as of the end of the 10thFP and the 9thFP. 7

Promote strengthen portfolio through acquisition and replacement
• Through the below acquisition and replacement, asset size has expanded and quality of the portfolio has been enhanced. • In addition, through the replacement conducted on the 10th FP, reserve for reduction entry has been reserved and enable to utilize it for stabilizing distribution level. • Aiming to improve NOI and make building age of the properties younger through future replacement. Acquisition ▷ Replacement on the Merger (8th FP) ▷  Disposition on 8th FP & Acquisition on 9th FP JPY 19.2 billion / 1 hotel and 2 residential properties from Sekisui House Group and Third party > Replacement on 10th FP
Total: + JPY 95.6 billion*
Disposition * acquisition price basis + JPY  9.4 billion* Disposition of older and low yield properties May 1 2018 + JPY 16.5 billion* Elimination of retail property + JPY 69.6 billion* Disposition due to tenant  withdrawal
■   Changes in DPU and NAV per unit —  — Distribution per unit (forecast)   Note 1: As a two-forcone spite of investment units was implimented on May 1, 2018, and in cossdaration of the impact of the spite "distribution porunit" and "NAV por unit" amounts are rounded down to the nearest decimal. The amounts in parentheses of "distribution per unit" are the DPU before the adjustment. Note 2: "NAV per unit" is calculated based on net assets on the balance sheet as of the end of each period plus unrealized capital gains, less total distributions (NAV).
(Reserve for Reduction Entry) Distribution aiming to stabilize distribution levels Backfill of rent during free rent period when office tenants are replaced  (cf. page 34) Note 1: Yeal à calculated by dividing annualized NOI or NOI after depreciation bocual depreciation of the application for calculating actual yeal and estimated depreciation acquisition price as of  December 16, 2019. Note 2. "Occupancy rate periodaverage" for each period indicates the average amount of occupancy rate (ratio of the total leasted area of the total leased area) as of the en 10
Sekisui House Cotenyama Project Garden City Shinagawa Gotenyama     All properties are SHR ownership Cotenyama SH Building • Prime Maison Cotenyama East • Prime Maison Cotenyama West
### tenyama

■  Occupancy Rate by Use

Note: The occupancy rate in the above graph records the ratio of the total leased area of the total leasable area of the total leasable area of the use for SHR and SHI as o In addition, "Total" in the above graph before the merger, prior to the end of 7th FP, shows the occupancy rate of entire portfolio for SHR before the merger.
Commercial properties (Office building and hotel) Residential properties (Residence) Total
75.4% JPY397.4 billion Sekisui House, Ltd. JPY380.8 billion 46 properties 57properties Sekisui House Real Estate Companies 4 JPY16.5 billion 11 properties Diversification by use² Diversification by area² (acquisition price basis) Diversification by building age². 5 Portfolio PML Value (as of  the end of 10th FP) 1.60% Note 1: Unless otherwise indicated, the figures are as of December 16, 2019. As ratios are rounded to the first decimal place, there are cases when the total ratio does not Note 2: In collulating "Dresification by use", "Homnachi Garden City" is recorded as one property each in an office building and a hotel but is calculated as one building wh "Acquisition from Sekisui House Group", "Diversification by area" and "Diversification by building age". Note 3. "Bation Frime Poperties" is calculated based on the scruisition price of steps that gually se Prime Properties hereinster not be referred as "PP"; the same that appl deemed to be a Prime Property, even though "Esty Maion Yokofamaaobadai North", which was acquried on June 10, 2019, qualifes as a Prime Property and "Esty Máron Yokohama-aob as a Prime Property, as the two buildings are location the same site and managed as single property, collectively referred b is "Exy Malion Yokohamaaobedar", However, in cal is deemed as a Prime Property. Note 4:  As of February 1, 2020, Sekiwa Real Estate Companies shall change the company name to Sekisui House Real Estate Companies Note 5. "Average building age" is weighted average by acquisition price. The building age of "Esty Maicon Yokohama-aobada" is situated for "Esty Maicon Yokohama-aobadai Sout separate buildings for calculating number of properties of "diversification of Building age". The same shall apply hereinafter. 14
(as of the date of this document) Diversification by area (acquisition price basis) Diversification by building age (acquisition price basis) Diversification by time to nearest station by walking (acquisition price basis) Diversification by floor area² (floor area basis)
Note 1: In calculating the diversification status of commercial properties portfolio, "Hommachi Garden City" is calculated as one building. Note 2: "Diversification by floor area" is based on the floor area stated in the registry for the entire building and the ratio is calculated based on the acquisition price Note 3: "Occupancy rate" is as of October 31, 2019.
(as of theFP ended Oct. 2019 (10th FP)) ■ Lease agreement for Office Buildings
Policy of the lease scheme at the end of the Fixed-Rent ML contract: Select either fixed rent ML or pass-through type ML at the expiration of the original contract based on the renewal status of the end tenant and the office market.
• Hommachi Minami Garden City: Changed to Pass-through type ML on Dec.1, 2019 • Garden City Shinagawa Gotenyama: Changing to Pass-through type ML on Feb.1, 2020 • Hommachi Garden City: To be decided by May 2020
◾ Office Buildings Rent Gap based on Monthly rent², 3
Rent Gap: Ratio of the contract rent regarding end tenant deviating from the market rent for each building assessed by the CBRE K.K as of the end of Oct. 2019 (excluding Gotenyama SH Building and Hommachi Gārden City) Rent Gap: Greater Tokyo 4.5% lower, Osaka area: 18.4% lower Rate of end tenant rent below market rent: Tokyo 94.2%, Osaka 98.0% Greater Tokyo ■ less than -10% ■ within 0-10% = -10% or more than and less than 0% ■ more than 10% Note 1: "Master lease" may be abbreviated as "ML". The same shall apply hereinafter. Note 2: "Office buildings rent gap based on monthly rent" is calculating based the compartments used for offices, excluding the compartment used for retails or others. Note 3: The compartments where there is no deviations  are included to "within 0.10%".
■ Office buildings contract form ratio by renewal period1 (excluding Gotenyama SH Building and Hommachi Garden City) (as of the end of Oct. 2019) 40,000 m ් ■ traditional lease contract ◾ the fixed-term lease contract 39,508.50 m² 30,000 ㎡ 19,784.29 m²

Lease agreement for Hotels
■
The St. Regis Osaka (Hommachi Garden City) The Ritz-Carlton, Kyoto · Leasable Area: 18,092.98 m² · Lease Scheme: Variable Rent +Fixed Rent (ML Contract Period: From May 2017 to May 2020) Calculation of Income-linked rent: Receiving income-linked rent from Nov. when the hotel’s annual revenue (from Oct. 1 to Sep. 30 of the following year) excesses to certain amount ◾ Forecast of replacement and renewal of tenants in 11th FP1 (excluding Gotenyama SH Building and Hommachi Garden City) Area of new tenants: 395.04㎡ (2 tenants) Area of tenants vacating: 197.52㎡ (1 tenant) Renewal area of lease contracts: 19,586.77㎡ (11 tenants) · For one leaving tenant (Akasaka Garden City), backfill is scheduled due to the  need to increase the floor of existing tenants. · There is a tenant candidate for the vacancy of 967.74 ㎡ at Garden City Shinagawa Gotenyama, but this has not been factored into the earnings forecast. Impact of replacement/renewal on revenues: JPY 2,488 thousand per month² *excluding the effect of a tenant candidate for the vacancy  at Garden City Shinagawa Gotenyama ・Leasable Area: 9,384.56 m² · Lease Scheme: Variable Rent +Fixed Rent (Contract Period: From Jan. 2019 to Apr. 2021) Calculation of Variable rent: Monthly rent for one year from May of the following year based on a one-year hotel revenue record form Jan.1 of each year (Variable rent of 12th FP is not definite value)
Note 1: "Office buildings contract form ratio by renewal period" and "forecast of replacement and renewal of tenants in 11° FP' is calculated based on the compartments used Note 2:  Excluding the effect of a tenant who move in the compartment which was vacant from the time of the acquisition. Note 3: Figures indicated in parentheses is income-linked rent for The St. Regis Osaka and variable rent for The Ritz-Carlton, Kyoto.
Note 2: As for Garden City Shingawa Gotenyama and Hommach Minami Garden City, the portions which have already owned at the time of frelsequestions of ornfroation have been has been granted those certifications. 18
(as of the date of this document) Diversification by area (acquisition price basis) Diversification by building age (acquisition price basis) Diversification by time to nearest station by walking (acquisition price basis) Diversification status by unit area (leasable units basis) ■ Sekisui House Group brands and nationwide marketing capabilities > Changed company name to Sekisui House Real Estate companies ▷ Covered all of the SHR's investment areas Sekisui House Real Estate Tohoku, Ltd. Sekisui House Real Estate Tokyo, Ltd.¹ Sekisui House Real Estate Chubu, Ltd. Sekisui House Real Estate Kansai, Ltd. Sekisui House Real Estate Chugoku&Shikoku, Ltd. Sekisui House Real Estate Kyushu, Ltd. ▷ Have a strong track record as a property management company . Housing management business started in 1976 Number of houses under management 630,709 units  (as of the end of July 2019) Occupancy Rate 97.8%  (as of the end of July 2019) Sekisui House Real Estate Companies are entrusted property management at 72.7% of SHR Residential Portfolio² ■ Representative properties of the Residential Properties Portfolio ▷  Largest appraisal price: Prime Maison Shirokanedai Tower >  Largest acquisition price in Tokyo Central 3 wards: Esty Maison Ginza
Note 1: As of February 1, 2020, Sekiwa Real Estate Companies shall change the company rame to Sekiwa Houre Real Estate Companies and at the same time, Sekiwa Real Estate, Lt Tokyo, Ltd Note 2: The ratio of residences which Sekisui House Real Estate Companies are entrusted property management of all residences owned by SHR on acquisition price basis.
■   Occupancy Rate for Residences by Investment Area¹
◾ Monthly Trends in Occupancy Rate for Residences by Investment Area¹

■ Changein Contract Rent

■ Changes in Renewal Rate 100% 86.7% 10th FP Note I: "Monthly rent" of new contract and renewal contract (including common struct free) are the total monthly rent at the time of new and renewal contracts in each perio at the time of new or renewal contracts to the total of the previous rent. The same shall apply hereinafter.

◾ Rent Trends by Investment Area (Unit Rent per tsubo)

■ Rent Trends in Contracts by Investment Area

■ Rent Gap
Rent Gap: Ratio of contract rents to end tenants deviating from market rents (assessed by Style Act Co., Ltd.) calculated for end tenants whose market rents exceed the contract rents as of the end of the 10th FP.
Note 1 : Ront and floor and for stores and offices in residences, as well as the rent and floor and of residences in which floor and the matter lease agreaments have been c included in calculating the above figures.
at major stations at Tokyo
Source : Based on the disclosure of each railway company (East Japan Railway Company, Tokyo Metro Co., Ltd., Toei Subway and other private railways companies) in 2017 or 2018, the asset management company aggregated. No - Acquisition from Sekisui House Group No: Acquisition from third-parties ■ Kodaira-shi, Tokyo  1 property  ■ Koganei-shi, Tokyo  1 property  ■ Hino-shi, Tokyo  1 property 33 91 40 14, 90, 92, 112 Source : Cabinet Office, Government of Japan
GREATER TOKYO (79 properties) Tokyo 23 wards  (70 properties) Major Cities Nationwide (32 properties) FUKUOKA AREA (9 properties) OSAKA AREA (9 properties)
Note 1: "PP" neters the asses that fall under the category of Prime Prime Prime the Fety Maion Yokohamaaobadai", which comprime two building: (horth and South) athough "Eny "Esty Maison Yokohama-aobadai North" falls under it. Therefore, "Esty Maison Yokohama-aobadai" is indicated as Prime Properties above. The same shall apply hereinafter.

■  Financial Indicators (as of the date of this document)

■ Recent Financial Activities (cf. page31)
△ Loans : • Fixed Interest Rate Borrowing: (Balance) JPY  16.31 billion², (Drawdown date) Sep. 30, 2019 Fixed Interest Rate Borrowing: (Balance) JPY  14.00 billion², (Drawdown date) Nov. 29, 2019 > Investment Corporation Bonds: Green Bonds: (Issue amount) JPY 6.5 billion, (Issue date) Jul.11, 2019 Green Bonds: (Issue amount) JPY 5.0 billion, (Issue date) Nov.1, 2019
■ Commitment Line Contracts

■  Credit Ratings (Issuer ratings)
▷ Rating and Investment Information, Inc. (R&I): AA-(Stable) Acquired in Nov. 2019 ▷ Japan Credit Rating Agency, Ltd. (JCR): AA(Stable) Upgraded from AA- to AA in Feb. 2019
■ Index, etc.
▷  FTSE EPRA/NAREIT Global Real Estate Index Series ▷  MSCI Japan Small Cap Index ▷  Thomson Reuters GPR / APREA Investable 100 Index ▷ S&P Global Property ▷ TSE REIT Core Index ▷ GPR 250 Index/ GPR 250 REIT Index ➤ BOJ Purchases
◾ Diversification of Repayment Dates (as of the date of this document)
1.50% 1.00% 0.00% (11th FP) (12th FP) (13th FP) (14th FP) (15th FP) (16th FP) (17th FP) (18th FP) (19th FP) (20th FP) (21st FP) (22nd FP) (23rd FP) (24th FP) (25th FP) (26th FP) (27th FP) (28th FP) (29th FP) (30th FP) Note 1: "Average interest rate" is annual rate which is calculated by websited the interest rate applicable as of the date of the document by the amount of interest-boteing agreement, the fixed rates are used for the calculation. Note 2: Including the floating-rate borrowings which have concluded interest rate swap agreement to fix the interest rate.

■ Distribution of Lenders (as of the date of this document)
■  Borrowing period (as of the date of this document)

Future Growth Strategy
Mid-term new target for DPU
▷ Reached the target of securing a distribution of JPY 1,600 at the time of the merger in 1.5 years ▷ Aiming to achieve sustainable growth and become a core diversified REIT in J-REIT markets Achieving distribution of JPY 1,800 level per unit  (3-year time horizon)
■  Management Stance
▷  Making maximum use of Sekisui House Group's sponsor support and group collaboration >  Active management considering distributions per unit and NAV per unit growth, which are considered to be key KPIs
■ Immediate Policy
▷ External Growth: • Continuing carefully selected investments centered on Prime Properties (also utilizing public offerings that take advantage of opportunities in capital markets) ▷ Internal Growth: • Considering actively increasing rents for office buildings and residences and replacing some properties (aiming to improve profitability by leveraging favorable real estate market conditions) ▷ Financial Strategy: • Promoting diversification of financing methods and reduction of financial costs (building a stronger financial base against the backdrop of the low interest rate environment) > ESG: Aiming to be included in major ESG-related indices by implementing various measures (responding to increasing requests from investors)
RTA prioritizes inconsistency between accounting and taxation purposes response, and flexibly utilizes reserve for reduction entry to respond to stabilization of distribution level, etc. Utilization policy 1. Utilizing to avoid taxable burden due to inconsistency between accounting and taxation purposes Expected reversal period of RTA: 17th FP Withdrawing and distributing the amount equivalent to inconsistency between accounting and taxation purposes related to the merger that are expected to be incurred on a continuing basis and other reasons from the balance of RTA. After completion of RTA, distributing as allowance for temporary difference adjustment (ATA). Expected reversal period of reserve for reduction entry : 17th FP (Period completion of RTA) 2. Utilizing for measures to stabilize or improve distribution levels Withdrawing and distributing the reserve for reduction entry preferentially, in cases where distributable profits are expected to decline temporarily. (Example) ・ Free rent applied for the replaced office tenants • Absence of rental business profit due to the disposition of owned properties • Large repair costs incurred in connection with temporary equipment upgrades, etc. *The Investment Trusts Actstipulates that distributions in excess of earnings by ATA is not allowed when reserve for reduction entry balances remains.
■ Distribution of Esty Maison Yokohama's gain on transfer
>   Sale of property with differences in taxation and accounting book values as a result of the Merger > Gain on transfer differs from gain on transfer in accounting and gain on transfer in taxation >   Differences in gains on transfer between the accounting and taxation will be distributed on 10th FP (Avoid tax burden by allocating RTA) •   Disposition price: JPY 3,000 million • Capital gains for tax purposes: JPY 1,055 million   ——→ •   Distribution on 10th FP: JPY 279 million •   Internal Reserves: JPY 775 million²  —→ Utilization policy 2 Internal Reserve as of the end of 12th FP: JPY 1,549 million (RTA: JPY 835 million, Reserve for Reduction Entry : JPY 714 million) Note 1 : In order to stablize discribation lonels, or in the event of reversal of RTA due to a new incorsistency between accounting and tacetion purpose arosing from the di Note 2: The above figures are estimated and any future distribution or distribution excess in earning is not guaranteed.
■ Supplying to J-REITs from Sekisui House Group ◾ Prime Maison Planned and Developed by Sekisui House¹ ▷  Sekisui House continues to focus on developing residential properties in Tokyo Completed properties Properties under construction² Properties 4 properties 747 units 6 properties  609 units 2 properties ■ SHR has Preferential Negotiation Rights from Sekisui House1
Note 1: As of the date of this document, there are no specific acquation plans for unicouline porties indicated as 'Pirme Maion Planned and Developed by Setsui House', "Sil Sekisui House's Urban Redevelopment Business' Note 2: The figures labeled "Properties under construction" and "Main future projects" are conceptual drawings created based on the drawing and specifications, and may diff Note 3: "Properties under planning" and "Main future projects" are currently under consideration by Sekisui House; subject to change or cancellation without notice. Note 4. "Unacquired quasico-ownership interests" refers to the percentage of unacquired quasi-co-ownership interests for whichSHR has a preferential negotiating right for t Note 5: The indicated properties include joint ventures with other companies and properties that have been sold. Note 6: SHR has acquired a portion of the quasi-co-ownership interests, but has a preferential negotiating right covering the quasi-co-ownership interests that have not yet
■ Participation in International Initiatives >  Signing of the Principles for Responsible Investment (PRI) in March 2019 by the asset management company of SHR >  Announced support for the 10 principles of the United Nations Global Compact by Sekisui House Group ■ Acquisition of external certification for ESG >  GRESB Real Estate Assessment, Selected as "Sector Leader" in Asia/Diversified - Office/Residential Sector Acquired “Green Star”, the high ranking in “GRESB Real Estate Assessment” conducted in 2019 in three consecutive years >  Acquired "S-Rank", the highest rating in "MUFG ESG Rating Certificate for J-REIT supported by JCR" >   Acquired DBJ Green Building certification for 51 of 119 properties, all 3 Stars or above (50.1%: acquisition price basis) Three residential properties acquired in June 2019 acquired DBJ Green Building certification >   Certification for CASBEE for Real Estate, for 4 of 7 office buildings, all with the highest appraisal "S (Superior)"
Environment   Initiatives for a Low-Carbon Society and the Efficient Use of Energy
Signatory of: Prime Maison Hongo 2019 CSS Acquired both DBJ Green Building certification and CASBEE property appraisal certification Prime Maison · Garden City Shinagawa Gotenyama (Owned) ·  Hommachi Minami Garden City (Owned) ・Hommachi Garden City (Office building portion) • Hirokoji Garden Avenue
Biodiversity Activities
that contributes to nature regeneration in the area, receiving "The Minister of Land, Infrastructure and Transport Prize" the highest-ranked award at the 11th "Competition for Rooftops, Wall Facings and New Green Spaces Note 1: The foures for each epected reduction above are estimated by the aget management compony based on materials provided by the nolucement work opecator of materials pu
Social
Initiatives of the Asset Manager
Encouraging male employees to take parental leave for more than one month In Sep. 2018, Sekisui House announced that it would fully take parental leave for at least one month for male employees. As a *Kids' First Company," Sekisui House is implementing initiatives to promote diversity as a leader in a society that supports child-rearing. As a member of the Sekisui House Group, the asset management company is encouraging male employees to take parental leave for at least one month Acquisition results: 100% for applicable employees Initiative for Creating Comfortable Workplace Environment > Employee Satisfaction Survey • Conducting Sekisui House Group's governance awareness survey once a year · Holding Health Committee including a occupational physician once a month • Promoting of improvement workplace environment by discussing employee request about once a month > Initiative for health ・Conducting stress check · Participating to "walking challenge" conducted by Sekisui House Group Comfort and Safety Measures Emergency electric supply unit    24-hour disaster prevention center
Contributing to Regions and Communities
Shinagawa Gotenyama Governance Decision making Process of the transaction with Interested Parties Proposing from each department in charge Compliance Officer/ Internal Control Promotion Department Investment Committee Compliance Committee Board of Directors Remanded Rejected Rejected Rejected Disapproved Checked by organization responsible for compliance The Internal Control Promotion Department conducts liminary reviews on items to be discussed prior to all meetings, under the command of the Compliance Officer. Investment Committee and Compliance Committee are indicated on page 54 Board of Directors of SHR is indicated on page 51
Checked by external professionals
As external members, external professionals are selected to the committee on investment decisions or compliance, and checks decision- making, etc. for transactions from the professional's perspective. • For the decision-making, attendance of the external members and agreement of all of the attended members are required.
Checked by SHR’s Supervisory Directors
Transaction with interested parties stipulated in the Internal Rules require approval from the board of directors meeting which is comprised HR's Executive Director and Supervisory Bike share

■ Development of Philosophy and Value Creation
Sekisui House made a "Declaration of Sustainability" in 2005 as the vision to aspire under the corporate philosophy of "a love of humanity," announcing  its vision to achieve balanced management based on four  key values – environmental, economic, social and homeowner. Moreover, 13 guidelines were established based on the four key values.
■ A leading company of ESG management
Sekisui House has, in 2008, announced its "2050 Vision", which targets zero CO 2 emissions from residences and having established a long-term vision for 2050, "Sustainability Vision 2050," in 2016. It has also displayed its medium-term initiativeswith an outlook for 2030 to share status of progress withstakeholdersin 2017. With the realization of "Sustainability Vision 2050" as the long-term goal of ESG management, Sekisui House is making steady progress toward the realization of a sustainable society with the aim of becoming the leader in ESG management.
2050 challenges

ESG Initiatives Aimed at Sustainable Growth
Environmental management
Net-zero-energy housing drives the world Contribute to the world by RE 100 > Global Warming Prevention Promoting the net-zero energy housings (ZEH) RE100 (100% electricity supply from renewable energy) SBT (Acquired certification for setting goals to limit temperature rise to less than 2°C) > Ecosystem Conservation Gohon no ki (Five trees) project FairWood procurement > Resource Recycling 100% Recycling Wastes
ocial improvement
Make diversity a driver of growth > Workstyle Reforms Creating exiting workplaces Fair evaluations and visualization Higher operational efficiency using IT • Achieving a work-life balance ⇒ Improved productivity > Diversity promotion Participating in the organization in your own way Promoting active female participation Support for people childrearing, providing nursing care and curing while working Creation of pleasant workplaces for people with disabilities
■ CSR management based on the Four key values and 13 Guidelines
The Four key values and 13 Guidelines set forth in the Sustainable Vision in 2005 share the same direction with "SDGs (Sustainable Development Goals," which is a common goal of the international community. Through the business to create residential environments, Sekisui House face the challenge of "sustainability" and are continually promoting the achievement of the "SDGs" goals. The Four Key Values, 13 Guidelines and SDGs (Direct and indire
Strengthen Governance
Innovation and communication
(Strengthening the Corporate Governance)
> New Actions
Ensuring independence and strengthening internal checks of Senior Manager of General Affairs Dept. in Sales Administration Headquarters and General Manager of General Affairs of Branch Improving the integrity of branch managers Introduction of restricted stock remuneration plan Abolishing officers' bonus system for external directors > Future Considerations Revision in directors' term of office to one year from two Drastic revision in officers' remunerations Appointment and dismissal of senior management
■ Introduction of SHR's Investment Unit Price Performance Linked Rate Create a price-performance component of total asset-based fee rate and Change fee level downward To be resolved at the next general meeting of unitholders to be held on January 29, 2020 (Adopting from 12th FP) .
■ Current rules
• Management Fee I (linked to total assets): Total assets × 0.15% (annual rate) (fixed) Management Fee II (linked to DPU and Operating income): DPU× Operating income×0.002% x 2 (split ratio) .
Revised Rate Calculation Process
■ New rules • Management Fee I (linked to total assets and investment units performance): Total assets × 0.12-0.16% (annual rate) (fixed) Depends on performance of SHR's investment unit price to TSE REIT index Management Fee II (linked to DPU and Operating income): No change Revised Rate (Annual Rate) = 0.14% +([A] −[B]) × 1/1,000  (rounded to the fifth decimal place) (A)- (B):  · Upper limit +0.02% (Outperform +20%) · Lower limit -0.02% (Underperform -20%) · Upper limit Zero if (a) <0 · Rate of the increase and decrease in SHR’s Investment unit prices (distribution inclusive): (A) Investment unit price for the previous FP + Distribution for previous FP– Investment unit price for the FP preceding the previous FP (A) = Investment unit price for the FP preceding the previous FP • Rate of the increase and decrease in TSE REIT Index (distribution inclusive): (B) TSE REIT Total Return Index for the previous FP – TSE REIT Total Return Index for the FP preceding the previous FP (B) = TSE REIT Total Return Index for the FP preceding the previous FP the increase and decrease in SHR's Investment unit prices: (a) (a) = Investment unit price at end of previous period -Investment unit price at end of the before previous period (Reference  I ) Calculated by replacing Management fee  I  on 10th FP with the applicable rates

(Reference II) Partial Amendments to the Articles of Incorporation
Management Fee  I : Total assets ×Base rate →(Change) Total assets ×(Base rate +Rate linked to TSE REIT Index) 0.14% shall be applied to the base rate set at the upper limit of 0.5% (A): +16.2%, (B): +10.5%, (a): +9,800     (A) −(B) = +5.7% Outperform and (a)>0 10th FP Revised Rate (Annual Rate) = 0.14% + 5.7%×1/1,000 ≒ 0.146% (Down 0.04% from the current rate of 0.15%) Management Fee II, III, IV and V are no changes → Management Fees on page 54 Appendix
Balance Sheet

Note 1 : As of the date of this document, audit procedures for the financial documents based on the Act on Investment frusts and Investment Corposations have been completed Exchange Act have yet to be completed. The same shall apply hereinafter.
Statement of Income and Retained Earnings

Appendix
Note 1: "PP ratio" refers the ratio of the assets that fall under the category of Prime Properties based on acquisition price. For Prime Properties, please refer to page 45 Note 2: As "Investment ratio" indicates the ratio of acquisition price of acquisition price of assets held, there is a case when the total of the investment ratio of resise Note 3: "Occupancy rate" is indicated based on the information as of October 31, 2019. Note 4: "Average building age" in the overview of portfolio is stated as the weighted average calculated on the basis of the building age as of the date of this document ba Note S: Data on "Hommachi Garden Chu" is stated as if the office building portion and hotel portion are separate buildings according to the use of exch portion, and when co Therefore, items in the total column of "Number of properties" and "Number of PP" in the overview of portfolio differ from the total for each item. Note 6: "Property No." is classified by use of properties held by SHR, whereby each property is qiven a number and any of the following letters: P representing residences, Note 7: "Acquisition price" is the appraisal value as of April 30, 2018, the day before the effective date of the merger, forthe assets succeeded from SHI. As for the asset Note 8: As for "Akasaka Garden City" and "The Ritz-Carlton, Kyoto", all figures other than "occupancy rate" and "completion date" reflect quasico-ownership interests which Note 9: "Esty Maison Kohoku Tsunashima" comprises three buildings (East, West, and Annex), and the "completion dates" are March 2002, October 2002, and September 2002, resp Note 10: "Esty Maison Yokohama-aobadai" comprises two buildings (North and South), and the completion dates are July 2018 and July 1990, respectively a
Priority investment in Prime Properties will be continued with the aim of enhancing the quality of the portfolio ◾ Prime Properties centered on "Strategic Location" and "High Quality"
◾ Elements of "Strategic Location" and "High Quality" Strategic Location Economic area
High Quality
Functionality/Livability Environmental consideration

◾ Portfolio Development Policy by Use
Build a portfolio with “residences” as “the bases of living for residents” and “office buildings” as “the bases of operation for business”, as core assets. Promote investment in hotels for which continuous growth is expected. (Changes) Serviced apartments from Hotel categories to Retail and other properties（No Serviced apartment as of the date of this document)

■ Investment Areas by Asset Category
Priority investment areas will be set in light of the characteristics of each asset category. Regarding investment in overseas real estate: investment in residences and commercial properties will be allowed, but we will maintain a cautious stance for now.
Note 1: Target of investment ratio in mid to long term. SHR does not guarantee or promise that these ratios will be realized, and actual ratios could drastically differe Note 2: Actual ratios may deviate from the above ratio temporarily in case of acquisition of properties meeting the investment criteria based on the growth strategy.

◾ Investment Policy for Hotel
• Invest in hotels that are expected to be highly competitive over the mid to long term (Simplified accommodations are not invested in principle) Plan to invest primarily in hotels regarded as Prime Properties, most of which we invest in Luxury or Upper Upscale hotels in Class S Area.

> Prime Properties • Strategic Location: Class S or A area •   High Quality: Luxury, Upper Upscale or Upscale >  Area Class: Independently selected by asset management company based on business and tourist demand •   Main investment Area: Class S Area: Tokyo 23 wards, Yokohama-shi, Hakone-machi, Kyoto-shi, Osaka-shi, Kobe-shi, Sapporo-shi, Fukuoka-shi, Nagoya-shi, Hiroshima-shi, Kanazawa-shi, Naha-shi and Urayasu-shi • Investable Area: Class A Area: Tokyo, Kanagawa, Osaka, Kyoto, Hyogo, Hokkaido, Fukuoka, Okinawa, Nara, Nagano, Shizuoka and Miyagi other than Class S Area, or areas where hotels that capture narrowed demand are located (ex. Airport Terminal Hotel, etc.) • Investment in other than Class S or A area is strictly selected >  Hotel Class: Selected independently by asset management company •   Main investment: · Luxury: Worldwide luxury hotel brands · Upper Upscale: Worldwide exclusive hotel brands • Investable class: · Upscale: Globally recognized standard hotel brands for higher end-level business / tourist use · Upper Midscale: Globally recognized standard hotel brands for general business / tourist use • Not invested in principle: · Midscale: Budget and economic hotel brands · Economy: Lower price range than Midscale
Estimated Value at the End of Period (2)
Note 1 "Termend on " signal control on " signal on " signal control on " signal hope that the signal control on " signal terment to signal " signal control on " signal term Nore 2 in contrine Product Product to the organization between the fact that the fact of the state of the fact that and the fact the fact the fact of the fact of the fact of Note 3: As for the "estimated value," "book walls," "unrealized capital gain/lost" and "appraisal NOT" of "Akasaka Garden Cty" and "The RizCarifori, Kyoto", the amounts ref Note 4 , Japanese prophies base you see the best for the set of content to "winn note best to "winn else" in the set offer based on the agreement period, for the sake of co Note 5: A fixed rent type metter loste agroment has been concluded with setwa Real Estate Chabu, Ltd with regard to "Say Makon Higoshiphirakabe". While dicount rates differ "discount raté" until the expiry of the agreement. kue 6 programs and services of the context of the con Note 7: "Esty Maison Kohoku Tsunashima" compress three buildings (Est, West and Annex), and the "estimated value," "book value" "unrealized capital gain/loss" and "appreisa Note of the selection is limited by the content of the content to the content to the selection in the fined is the indiated is insteam of the fined to the income period is Note 9: "Esty Maison Yokohama-aobadai" comprises two buildings (North and South), and the "estimated value," "book value," "unrellized capital gain/loss" and "appraisal NOI
■ Structure Diagram
(as of October 31,2019)
Parent Company of the Asset Management Company / Sponsor SEKISUI HOUSE, LTD. Holding approximately 4.7% of investment units 2 Asset Management Company SEKISUI HOUSE ASSET MANAGEMENT, LTD. 3 Pipeline Support Companies Sekisui House Real Estate Tohoku, Ltd. Sekisui House Real Estate Tokyo, Ltd. Sekisui House Real Estate Chubu, Ltd. Sekisui House Real Estate Kansai, Ltd. Sekisui House Real Estate Chugoku&Shikoku, Ltd. Sekisui House Real Estate Kyushu, Ltd. Investment Corporation 4 General Administrative Agent SEKISUI HOUSE REIT, INC. General Meeting of Unitholders Board of Directors Executive Director Junichi Inoue Supervisory Director Shigeru Nomura Supervisory Director Tatsushi Omiya Independent Auditor Ernst & Young ShinNihon LLC Asset Management Agreement Sponsor Support Agreement B Agreement on Preferential Negotiating Rights, etc. (4) General Administrative AgreementにAsset Custody Agreement Administrative Agreement (Administration of Investment Units) Financial Agency Agreement Mitsubishi UFJ Trust and Banking Corporation 6 Asset Custody Company Mitsubishi UFJ Trust and Banking Corporation (0 Transfer Agent Mizuho Trust & Banking Co., Ltd. (7) Administrator for Investment Corporation Bonds MUFG Bank, Ltd. 100% ownership
◾ Number of Unitholders and Investment Units by Unitholder Type
■ Change ratio in investment units
■ Fiscal Period Ended October 2019 - Top 5 Unitholders

figures of "Investment Unit Price" for April 24, 2018 and earlier being divided by two and actual figures of "Trading Volume" for April 24, 2018 being multiplied by two. Note 2. For easy comparison of closing price of substances is conserved by substance of the formal on situation designed and set between 3. Situation designed and set on th
President & Representative Director Junichi Inoue
◾ Overview of Asset Management Company
◾ Corporate name: Sekisui House Asset Management, Ltd. ◾ Head office: 4-15-1 Akasaka, Minato-ku, Tokyo ■ Capital: 400 million yen ◾ Number of Employees: 57 (As of the date of this document) ◾ Shareholder: Sekisui House, Ltd. (100%) ■ Licenses and registration, etc.: Licensed for building lots and buildings transaction business License No.(2) 96411 issued by the Governor of Tokyo Certified as an entrustment-based agency License No.82 issued by the Minister of Land, Infrastructure, Transportation and Tourism Registered as a financial instruments business operator Registration (Kinsho) No.2791 issued by the Director of Kanto Local Finance Bureau
■ Organization Chart
Real Estate Division Real Estate Real Estate Real Estate Real Estate Real Estate Engineering Investor Finance Investment Investment Management Management Management Real Estate No. 1 Dept. No. 2 Dept No. 1 Dept. No. 2 Dept. No. 3 Dept Managemen Accounting Department Department Department Relations Accounting General Department Affairs Department Internal Control Promotion Department conducts work related to the asset management company's risk management, work related to monitoring the status of legislation and regulations, and work related to internal auditing.
■  Asset Management Fee (Adopting from 12th FP)
◾ Management Fee I (linked to total assets and Investment units performance): Total assets × 0.12%-0.16% (Depends on performance ofSHR's investment unit price to TSE REIT index) ■ Management Fee II (linked to DPU and Operating income): DPU²× Operating income³×0.002%×2 (split ratio) ◾   Management Fee III (acquisition fees): Acquisition price × 0.3% (Transactions with related parties: None) ◾ Management Fee IV (disposition fees): Sale price × 0.3% (Transactions with related parties: None) ◾ Management Fee V (merger fees): Value of Real Estate-Related Assets held by counter party×0.4% Note 1: With regard to rates, applicable rates or expected rates are stated. Note 2: Calculated as the distributable amount before deduction of Management Fee II divided by the total number of issued investment units. Note 3: Operating Income before deduction of Management Fee II
◾ Compliance Structure
An organization that deliberates and makes decisions on matters related to management policy and other asset management issues Investment committee Committee members: The external committee members', President & Representative Director (chairman), all full-time Directors including ComplianceOfficer who has the statusas a Directorand General Manager of Real Estate Division, Chief Manager of BusinessStrategy Dept, Finance Dept, IR Dept, Accounting Dept  and General Affair Dept. While the selection and dismissal of the external committee members is conducted at the asset management company's Board of Directors Meeting, the approval of the SHR's board of directors' meeting is required either before or afterwards. Note 1: Currently a total of two membersare selected as the external committee members including one real estate appraiser and one attorney, who have no significant stakeholder relationship with the asset management company, the asset management company's officers and employees, nor its related parties. An organization that deliberates and makes decisions on matters related to compliance in assetmanagement Compliance committee Committee members: The external committee members?, Compliance Officer (chairman), President & RepresentativeDirector and all full-timeDirectors. While the selection and dismissal of external committee members is conducted at the asset management company's Board of Directors Meeting, the approval of SHR's board of directors meeting is requiredeither before or after wards. Note 2: Currently one attorney has been selected as an external committee member who has no significant relationship with the asset management company, the asset management company's officers and employees, nor its related
Organization responsible for compliance
Compliance officer Person responsible for the compliance of SHR and the asset management company in addition to the integration of the operations of Internal Control Promotion Department. Personnel with sufficient screening and surveillance capabilities are selected to observe compliance with legislation and norms. Internal Control Promotion Department The organization chart and administrative organs related to compliance of the asset management company are as below. Department SEKISUI HOUSE REIT, INC.