materials for analyst meeting - ir webcasting 18 fp 2010/11 19 th 2011/5 20 2011/11 21 st 2012/5 22...

Fiscal Period

30Materials for Analyst

Meeting

6 month ended November 2016

www.heiwa-re.co.jp

January 17, 2017

This material has been prepared for the purpose of providing information and is not intended for soliciting,

encouraging, or marketing specific products.

This material is not a disclosure document, nor is it a report as defined in the Financial Instruments and Exchange

Act, Investment Trusts and Investment Corporations Act, public listing regulations of the Tokyo Stock Exchange or

other related laws or regulations.

The contents of this material includes forward looking statements. These statements are not a guarantee of future

performance, management results or financial results of Heiwa Real Estate REIT, Inc. In addition, Heiwa Real

Estate REIT, Inc. does not guarantee the accuracy or reliability of the contents of these materials. Please note that

the content of these materials may be changed or cancelled without any prior warning.

The contents of these materials may not be duplicated or transcribed without prior permission.

2

1 Trajectory for Stable Growth of HEIWA REAL ESTATE REIT Inc 4

2 Highlights of the 30th Fiscal Period 5

3 Financial Performance for the 30th Fiscal Period 6

4 Factors for Change in DPU (vs 29th Fiscal Period) 7

5 Forecasts for 31st Fiscal Period and 32nd Fiscal Period Operations 8

Ⅱ Status of Operations

I Overview of the 30th Fiscal Period (ended in November 2016) Ⅲ Appendix

1 Balance Sheet 26

2 Profit and Loss Statement 27

3 Debts 28

4 Diversification in Investment Areas 29

5 Office Portfolio Performance 30

6 Residential Portfolio Performance 31

7 Profits from Rental Business 33

8 Portfolio Overview and Performance (Offices) 34

9 Portfolio Overview and Performance (Residence) 38

10 Historical Appraisal Values 48

11 Historical Actual NOI Return 49

12 Historical Monthly Occupancy Rates 50

13 Organization of the Asset Management Company 51

14 Status of Investment Unit Price 52

Table of Contents

1 Status of Portfolio 10

2 External Growth :Overview of the New Properties 11

3External Growth: Outlook of the Acquisition and Portfolio

Replacement12

4External Growth: History of Property Acquisition and Sale

(after Main Sponsor Change)13

5Internal Growth: Progress of lease-up of properties with low

occupancy rates14

6 Internal Growth: Status of Office Operations(1) 15

7 Internal Growth: Status of Office Operations(2) 16

8 Internal Growth: Status of Residential Operations(1) 17

9 Internal Growth: Status of Residential Operations(2) 18

10 Internal Growth: Refurbishment Construction Work 19

11 Historical Appraisal Values 20

12 Financial Strategies: Financial Status(1) 21

13 Financial Strategies: Financial Status(2) 22

14 Growth Strategy 23

(Appendix) Diversified Property Acquisition Methods 24

I. Overview of the 30th Fiscal Period (ended in November 2016)

4

Ⅰ-1 Trajectory for Stable Growth of HEIWA REAL ESTATE Inc.

16th FP

2009/11

17th FP

2010/518th FP

2010/1119th FP

2011/5

20th FP

2011/1121st FP

2012/5

22nd FP

2012/11

23rd FP

2013/5

24th FP

2013/11

25th FP

2014/5

26th FP

2014/11

27th FP

2015/5

28th FP

2015/11

29th FP

2016/5

30th FP

2016/11

31st FP

2017/5

32nd FP

2017/11

Midterm Target

Number of Properties

Occupancy Rates

Average Interest Rate

LTV( Appraisal value Base)

Unrealized gain/ loss(mn yen)

Office Ratio Office Ratio Office Ratio Office Ratio Office Ratio Office Ratio Office Ratio Office Ratio Office Ratio Office Ratio Office Ratio Office Ratio Office Ratio Office Ratio Office Ratio

1,317

1,375

1,550 1,574 1,550 1,560

1,640 1,654 1,6701,703

1,742 1,719

1,808

1,884

1,980(forecast)

1,980(forecast)

DPU 2,000

AUM (JPY bn)

Total Acquisition Price

through PO

DPU（ＪＰＹ）

Re-establish Infrastructure

for GrowthRe-establish a Growth Trajectory for Stable Growth

A Phase of full-fledged growth through stable fund procurements

Our goal is to increase dividends through steady external and internal growth

Policy of carefully selective investment in blue-chip offices and residences１S T A G E

2S T A G E

3S T A G E

734

147.6138.1138.2132.1132.1

129.1129.1143.7

96.992.1

164.7156.1

155.0147.6

162.8

AUMJPY 200 bn

KOBE KYUKYORYUCHI HEIWA BUILDING

SAKAE MINAMI BUILDING

MITA HEIWA BUILDING (leasehold Land)

HIROKOJI AQUA PLACE

HF NIHONABASHI HAMACHO BUILDING

HF SENDAI HONCHO BUILDONG

HF SAKURADORI BUILDING

HF WAKAMATSUKAWADA RESIDENCE

HF SENDAI RESIDENCE EAST

HF KUDAN-MINAMI BUILDING

KOJIMACHI HF BUILDING

HF UENO BUILDING

HF NISHI-KOEN RESIDENCE

HF BANSUI-DORIRESIDENCE

HF KANDA OGAWAMACHI

BUILDING

HF MEIEKI-KITA RESIDENCE

HF HIGASHI-SAPPORO RESIDENCE

HF KANNAI RESIDENCE

NISSO 5 BUILDING

KAYABACHO HEIWA BUILDING

ACROSS SHINKAWA BUILDING

SENJU MILDIX ⅡBANKAN

HF HAKATA-HIGASHIRESIDENCE

31st Fiscal Period29th Fiscal Period28th Fiscal Period27th Fiscal Period25th Fiscal Period23th Fiscal Period 24th17th 21st

ACQUISITION

Sponsor's development

properties

Acquired by

Warehousing2012 Public Offering Asset Replacement 2013 Public Offering 2014 Public Offering Asset Replacement 2015 Public Offering Asset Replacement and New Acquisition

5

734

1,317

1,375

1,550 1,574

1,550 1,560

1,640 1,654 1,670 1,703

1,742 1,719

1,808

1,884

1,980 1,980

1,200

1,300

1,400

1,500

1,600

1,700

1,800

1,900

2,000

FP16th2009/11

FP17th2010/5

FP18th2010/11

FP19th2011/5

FP20th2011/11

FP21st2012/5

FP22nd2012/11

FP23rd2013/5

FP24th2013/11

FP25th2014/5

FP26th2014/11

FP27th2015/5

FP28th2015/11

FP29th2016/5

FP30th2016/11

FP31st2017/5

FP32nd2017/11

（yen） 30th Fiscal PeriodDPU:1,884yen

29th Fiscal PeriodDPU:1,808yen

Ⅰ-2 Highlights of the 30th Fiscal Period

Internal Growth

Improvement in occupancy rate: Average occupancy rate

for the 30th fiscal period recorded the highest level since

listing due to progress of lease-up of properties with low

occupancy rates. Improved profitability of propertie

Office: Increased the number of upward rent revisions and

expanded the range of revisions.

Residence: Improved the rent

level in a sustainable manner

External Growth Portfolio replacement: Sold properties that carried unrealized

loss and were unlikely to see improved profitability, while

acquiring properties in which high profitability and unrealized

gain can be expected (acquired during the 31st fiscal period).

Increase in unrealized gain: Appraisal values

increased due to the promotion of replacement

strategies upward rent revisions, and falling cap rates.

Sustained growth

of NAV.

Financial Operation

Borrowing costs continued to fall

Loan periods extended, terms of repayment staggered,

Appraised-based LTV continued to lower,

Increase of borrowing capacity

Borrowing costs are likely to fall in the future

History of NAV per Unit History of Distribution per Unit(DPU)

29th Fiscal PeriodUnrealized gain :15.6billion yenUnrealized gain margin:8.51%

30th Fiscal PeriodUnrealized gain :17.7billion yenUnrealized gain margin:11.25%

29th Fiscal Period : OfficeNumber of Upward Rent

Revision Tenants: 14Rate of upward Rent

Revision:5.05%

30th Fiscal Period : OfficeNumber of Upward Rent

Revision Tenants: 22Rate of upward Rent

Revision:5.79％

29th Fiscal PeriodAve. occupancy Rate：96.46%

NOI yield:5.09%

30th Fiscal PeriodAve. occupancy Rate：97.32%

NOI yield:5.14%

29th Fiscal PeriodAppraisal-based LTV: 43.8%

Borrowing Capacity:¥21.4 bn

30th Fiscal PeriodAppraisal-based LTV: 43.6%

Borrowing Capacity:¥22.4 bn

29th Fiscal PeriodAve. Interest Rate:1.033% Ave. Loan Term: 6.19years

30th Fiscal PeriodAve. Interest Rate:1.033% Ave. Loan Term: 6.19years

90,804

88,835

91,006

87,215 87,812 87,565 88,918 88,428

89,922 91,350

94,550

98,411

102,026

104,916

108,370

85,000

90,000

95,000

100,000

105,000

110,000

FP16th2009/11

FP17th2010/5

FP18th2010/11

FP19th2011/5

FP20th2011/11

FP21st2012/5

FP22nd2012/11

FP23rd2013/5

FP24th2013/11

FP25th2014/5

FP26th2014/11

FP27th2015/5

FP28th2015/11

FP29th2016/5

FP30th2016/11

（yen）

30th Fiscal PeriodNAV per Unit:108,370yen

29th Fiscal PeriodNAV per unit:104,916yen

31st Fiscal PeriodDPU:1,980yen

32nd Fiscal PeriodDPU:1,980yen

Unrealized gain and

loss ratio recorded

the highest levels

since listing.

6

Major Factors of Variance

(30th FP Actual vs 29th FP Actual)

Major Factors Amount

Operating

revenue

Office: Rent Revenue

Other lease business revenue

Revenue decrease by selling of

SHIBUYA AX HILLS

Residence: Rent Revenue


51

5

-6

35

-19

Operating

expenses

Office: Expenses related to rent business

Expenses decrease by selling of

SHIBUYA AX HILLS

Residence: Expenses related to rent business

SGA

Losses on sales of SHIBUYA AX HILLS

20

-2

5

9

52

Non-operating

expenses

Interest expenses

Loan-related expenses

-36

-10

Extraordinary

lossImpairment loss (HF NAKAMEGURO BUILDING) 734

Ⅰ-3 Financial Performance for the 30th Fiscal Period

Operating revenue increased mainly due to lease-up of four properties acquired during the 29th fiscal period and upward rent revisions.

Advanced reduction in costs, including interest expenses.

Booked losses on sales as well as losses from impairment at the time of sale of Shibuya AX Hills and HF NAKAMEGURO BUILDING.

Planning to set distribution at 1,884 yen/unit based on the potential by using reverse RTA (Reserve for Temporary difference Adjustment) to offset losses on sales at the time of portfolio

replacement.

29th FP

Actual

Performance

30th FP

Actual

Performance

Variance

Operating revenue 5,632 5,698 66

Operating expenses 3,237 3,324 86

Operating income 2,394 2,374 -20

Non-operating income 10 8 -2

Non-operating expenses 610 562 -47

Ordinary income 1,795 1,820 -24

Extraordinary loss - 734 734

Net income 1,794 1,085 -709

EPU (net income per unit)

(yen)1,768 1,069 -708

Reversal of retained

earnings carried forward- 495 495

Reversal of RTA 40 330 290

DPU (Distribution per unit)

(yen)1,808 1,884 76


(30th FP Actual vs 30th FP Forecasts)

Major Factors Amount

Operating

revenueResidence: Rent Revenue-real estate 3

Operating

expenses

Residence: Expenses related to rent business

SGA

-8

2

(Note) Forecasts for the 30th Fiscal Period are forecast figures announced on December 1,2016

30th FP

ForecastsVariance

5,695 3

3,330 -6

2,364 9

5 2

561 1

1,808 11

733 0

1,074 10

1,058 11

495 0

270 60

1,852 32

※29th FP : Acquired 1 Office building (December 21,2015) and 3 Residence (December 18,2015)

※30th FP : Sold 1 Office building (October 27, 2016)

(Unit: million yen)

7

1,808

1,884

45

5 34

44

18

19

5

9

1,800

1,810

1,820

1,830

1,840

1,850

1,860

1,870

1,880

1,890

FP29thDistribution

Rent Revenue Other leasebusinessrevenue

Expenses relatedto rent business

Rent Revenue Other leasebusinessrevenue

Expenses relatedto rent business

SGA Non-operatingprofit and loss

FP30thDistribution

Revenue for office operations increased mainly because of the increase in occupancy rates due to the lease-up of HF KANDA OGAWAMACHI BUILDING and upward rent

revisions.

One-time fees and renewal fees decreased because of an off-peak period for leasing residences, while the rent revenue increased due to the improved occupancy rate.

Advanced reduction in interest expenses.

0

(Note) In the table above, loss from sales and impairment due to the sale of Shibuya AX Hills and HF NAKAMEGURO BUILDING, the profit carried forward and the reverse RTA to offset them are not included. This table is intended to show the changes

in distribution based on the potential, excluding the impact of sales and purchase of properties.

Increase occupancy rate of HF KANDA OGAWAMACHI:

+24

Earnings contribution of NISSO 5 whole financial period

operation: +8

Utilities: +11

Penalty charges: -7

Public charges and taxes:

(HF KANDA OGAWAMACHI, NISSO 5)

+13

Utilities: +4

Increase occupancy rate and earnings contribution of

whole financial period operation: (HF KANNAI, HF

MEIEKI-KITA, HF HIGASHI-SAPPORO) +18

One time fee: -10

Renewal Fee: -13

Interest expenses -36

Loan-related expenses -10

Office Residence

（yen）

Public charges and taxes:

(HF NISHI-KOEN, HF BANSUI-DORI, HF KANNAI, HF

MEIEKI-KITA, HF HIGASHI-SAPPORO)

+8

Repair Fee: +19

Utilities: -3

PM Fee: -11

Ⅰ-4 Factors for Change in DPU (vs 28th Fiscal Period)

8

Ⅰ-5 Forecasts for the 31st Fiscal Period and 32nd Fiscal Period

30th FP

Actual

Performance (a)

31st FP

Forecasts(b)

32nd FP

Forecasts(b)

Variance

(b-a)

Variance

(b-a)

Operating revenue 5,698 5,809 5,804 110 -4

Operating expenses 3,324 3,324 3,309 - -14

Operating income 2,374 2,484 2,494 110 9

Non-operating income 8 5 1 -2 -3

Non-operating expenses 562 519 526 -42 6

Ordinary income 1,820 1,970 1,970 150 -

Extraordinary loss 734 - - -734 -

Net income 1,085 1,969 1,969 884 -

EPU(net income per unit) (yen) 1,069 1,940 1,940 871 -

Reversal of retained earnings

carried forward495 - - -495 -

Reversal of RTA 330 40 40 -290 -

DPU(Distribution per unit) (yen) 1,884 1,980 1,980 96 -

(Note) Forecasted figures were announced on January 16, 2017. These forecasted figures are calculated based on certain assumptions made as of this date, and actual net income and dividends may vary in accordance with changes in conditions. This forecast should not be construed as a guarantee of the dividend amount.

(Note) EPU is net income divided by the number of investment units at the fiscal period end (1,014,847 units) for the 30th fiscal period.

Forecast Dividend per Unit

31st Fiscal Period 32nd Fiscal Period

1,980 yen 1,980 yen

Outstanding amount of RTA

30th Fiscal Period Outstanding amount 2,457million yen

Reversal amount 330million yen

Amount after Reversal 2,126million yen

Key Assumption for forecasts30th FP

(Actual)31st FP 32ndFP

Occupancy Rate

Portfolio 97.32% 97.92% 97.37%

Office 98.15% 99.35% 98.31%

Residence 96.79% 96.98% 96.75%

NOI Yield

Portfolio 5.14% 5.24% 5.22%

Office 5.12% 5.35% 5.28%

Residence 5.16% 5.15% 5.17%

Reversal of RTA 330million yen 40million yen 40million yen

Outstanding investment Units 1,014,847units 1,014,847units 1,014,847units


Major Factors Variance Variance

Operating

Revenue

Office :

New properties (ACROSS SHINKAWA BUILDING,

SENJU MILDIX II)

Existing properties

Revenue decrease by selling properties

Residence :

New property (HF HAKATA-HIGASHI RESIDENCE)

Existing properties

135

17

-83

20

21

32

-11

-5

7

-27

Operating

Expenses

Office :

New properties (ACROSS SHINKAWA BUILDING,

SENJU MILDIX II)

Existing properties

Expenses decrease by selling properties

Residence:

New property (HF HAKATA-HIGASHI RESIDENCE)

Existing properties

SGA

Losses on sales of SHIBUYA AX HILLS

48

-14

-48

7

35

16

-52

11

11

-1

3

-33

-2

-

Non-

operating

expenses

Interest expenses

Loan-related expenses

Amortization of investment unit issuance expenses

-19

-15

-5

11

-5

-

Continued activities to increase the dividend in the 32nd fiscal period from the forecast level of 1,980 yen to the target level of 2,000 yen. ・Promoted portfolio replacement by combining the acquisition of new properties from sponsors and third parties with sales of properties with low yield rates and a low likelihood of future recovery.

・Expected further progress in the upward revision of office rent.

・Worked on continuous cost reduction (management fees and interest expenses).

(Unit: million yen)

Ⅱ Status of Operations

10

4.46%

4.37%

4.90%

4.61%

4.81%

4.87%

4.76%4.80%

4.95%

5.06%5.02%

5.12%5.08% 5.09% 5.14%

4.0%

4.2%

4.4%

4.6%

4.8%

5.0%

5.2%

16th 17th 18th 19th 20th 21st 22nd 23rd 24th 25th 26th 27th 28th 29th 30th

Office 93.59% 93.15% 91.82% 93.68% 96.04% 95.91% 96.42% 96.60% 96.96% 96.02% 96.27% 97.34% 97.70% 97.04% 98.15%

Residence 86.48% 85.96% 91.84% 94.28% 93.83% 95.05% 95.87% 96.37% 96.51% 96.51% 96.63% 96.98% 96.21% 96.07% 96.79%

Total 89.47% 88.97% 92.04% 94.48% 94.70% 95.55% 96.25% 96.64% 96.84% 96.50% 96.66% 97.27% 96.92% 96.46% 97.32%

80%

85%

90%

95%

100%

29ｔｈ Fiscal Period(2016/5) 30ｔｈ Fiscal Period(2016/11)

Overall Office Residence Overall Office Residence

Asset size at the end of period

(million yen)164,738 74,256 90,482 162,878 72,396 90,482

Number of properties (buildings) at the

end of the period98 32 66 97 31 66

Occupancy rates:

(%)

End of the period 96.66 97.69 95.99 97.75 98.94 96.98

Period average 96.46 97.04 96.07 97.32 98.15 96.79

Portfolio NOI yield (%) (Note 1) 5.09 5.00 5.15 5.14 5.12 5.16

Yield after depreciation (%) (Note 2) 3.88 3.94 3.83 3.94 4.06 3.85

Ⅱ-1 Status of Portfolio

History of NOI Yield

(Note 1) NOI Yield = Actual NOI (Annualized) ÷（（beginning of BV + end of BV)÷2）(Note 2) Yield after depreciation = Actual Rental business profit (annualized) / （（beginning of BV + end of BV)÷2）

Overall Average Occupancy Rate During the Period

The average occupancy rate for the fiscal period recorded the

highest level since listing.NOI yield recorded the highest level since the change of sponsor.

0％

Summary of Portfolio

11

Ⅱ-2 External Growth: Overview of the New Properties

Location Shinkawa Chuo-ku Tokyo

Acquisition Price 3,250 million yen

Appraisal Value 3,520 million yen

NOI Yield(Note) 4.97％

NOI Yield After Depreciation(Note) 4.64％

Land Area/ Total Floor Space 5,138.7㎡/17,818.0㎡

Construction Completion Date June 27,1994

Date of Acquisition January 20, 2017

Location Senju Adachi-ku Tokyo

Acquisition Price 1,650 million yen

Appraisal Value 1,820 million yen



Land Area/ Total Floor Space 2,905.5㎡/26,466.7㎡

Construction Completion Date February 1 ,2004

Date of Acquisition December 15, 2016

Location Fukuoka city, Fukuoka

Acquisition Price 880 million yen

Appraisal Value 900 million yen



Total Floor Space 2,702.02㎡

Construction Completion Date September 9,2008

Date of Acquisition January 23, 2017

ACROSS SHINKAWA BUILDING SENJU MILDIX ⅡBANKAN HF HAKATA-HIGASHI RESIDENCE

・It is a five-minute walk from Kayabacho Station on the Tokyo Metro

Tozai Line and Hibiya Line. Hatchobori Station on the Tokyo Metro

Hibiya Line and Suitengumae Station on the Tokyo Metro

Hanzomon Line are also within walking distance where it can be

accessed from multiple railroad lines and stations.

・Completed in June 1994, the property is located on Eitai Street, a

main road in Tokyo, it has a high level of visibility and subdued

atmosphere with impressive exteriors. The Kayabacho, Hatchobori,

and Shinkawa areas in which the property is located have many

small- and medium-sized office buildings, conceivably creating a high

level of demand for the property.

・Schedule to acquire the 4th to 6th floors and parts of the 2nd and

14th floors. The investment ratio in the entire building will be 28.84%.

・Very good access to the nearest station, Kita-Senju Station of the JR

Joban Line, the Tokyo Metro Chiyoda Line and Hibiya Line, the Tobu

Skytree Line and Tsukuba Express, within two minutes’ walk via the

pedestrian deck from the property.

・Part of the large-scale complex facility with commercial, office, medical

treatment and residential areas that consists of two buildings, Senju

Mildix I and Senju Mildix II, which were constructed in February 2004

under the urban redevelopment project for the area around the West Exit

of Kita-Senju Station.

・Already acquired the office areas on the 4th and 5th floors. The

investment ratio for the entire building is 10.98%.

This property is located about six minutes’ walk from Higashi-hie

Station on the Kuko Line of the City Subway and has good access

to a commercial district, with its nearest station just one station, or

about three minutes, from Hakata Station where there are

numerous offices and commercial facilities, and four stations, or

about nine minutes, from Tenjin Station.

In terms of equipment, the property takes security into

consideration, being equipped with a self-locking door and a door

phone with a TV monitor, in addition to other facilities such as a

bathroom laundry dryer, Washlet and a toilet that is separate from

the bathroom. The property is also strongly competitive compared

with neighboring properties because it meets the needs of single

people, who are the main residents of the property.

(Note) NOI Yield = Net operating income (NOI)* of each acquired asset ÷ Acquisition price of each acquired asset

NOI Yield After Depreciation = (Net operating income (NOI)* - Depreciation**) of each acquired asset ÷ Acquisition price of each acquired asset

* NOI is NOI for 12 months, which serves as the assumption for the value indicated by the income approach under the direct capitalization method shown in the appraisal report of each acquired asset,

**Depreciation is depreciation for 12 months, which we estimated by the depreciation ratio in the straight-line method corresponding to the service life, in the same way as for our existing assets under management

12

29th FP

（2016/5）Sale

SHIBUYA AX HILLS

30th FP

（2016/11）

SaleHF NAKAMEGURO

BUILDING

AcquisitionAfter

the transactionACROSS SHINKAWA

BUILDING

SENJU MILDIX

2BANKAN

HF HAKATA-HIGASHI

RESIDENCE

Number of Properties 98 ▲1 97 ▲1 1 1 1 99

Acquisition Price（mn yen） 164,738 1,860 162,878 2,870 3,250 1,650 880 165,788

Transfer Value（mn yen） - 1,820 - 2,200 - - - -

Appraisal Value（mn yen） 173,983 1,500 174,891 2,134 3,520 1,820 900 178,997

Unrealized Gain Loss（note）/

Realized Gain Loss（mn yen）13,650 ▲52 17,680 ▲734 270 170 20 18,140

NOI Yield 5.09% 2.96% 5.14% 3.04% 4.97% 5.90% 5.20% 5.25%

NOI Yield after Depreciation（note） 3.88% 2.46% 3.94% 1.83% 4.64% 4.60% 3.70% 4.05%

Total Interest –bearing debts（mn yen） 76,262 - 76,262 - - - - 79,262

Appraisal LTV 43.80% - 43.60% - - - - 44.28%

Impact on Distributions - ▲11.9 yen - ▲9.7yen +39.6yen +23.7yen +10.0 yen +51.7yen

Improving portfolio qualities via the assets replacement: Increasing unrealized gain, NOI, NOI after depreciation and NOI yield.

Ⅱ-3 External Growth: Outlook of the Acquisition and Portfolio Replacement

Acquisition(replacement)

SALE（replacement)

The Effect of the Portfolio Replacement

Performance of Acquired Assets and Disposed Assets after Main Sponsor Change

Of-38 ACROSS SHINAKAWA BUILDING

Of-39 SENJI MILDIX ⅡBANKAN

Of-13 SHIBUYA AX HILLS

Of-15 HF NAKAMEGUROBUILDING

Re-81 HF HAKATA- HIGASHI RESIDENCE

REPLACEMENT

(Note) NOI Yield = Net operating income (NOI)* of each acquired asset ÷ Acquisition price of each acquired asset

NOI Yield After Depreciation = (Net operating income (NOI)* - Depreciation**) of each acquired asset ÷ Acquisition price of each acquired asset

* NOI is NOI for 12 months, which serves as the assumption for the value indicated by the income approach under the direct capitalization method shown in the appraisal report of each acquired asset,

**Depreciation is depreciation for 12 months, which we estimated by the depreciation ratio in the straight-line method corresponding to the service life, in the same way as for our existing assets under management

(Note) Unrealized gain and loss: The unrealized gain and loss of HF NAKAMEGURO BUILDING shown in the table is the amount for the 29th fiscal period (ended May 2016). The appraisal value in the 30th fiscal period (ended November 2016) is the amount obtained by deducting the estimated disposal cost

from the transfer price in the sales contract dated December 1, 2016.

Acquisition

-50%

-30%

-10%

10%

30%

50%

70%

0% 2% 4% 6% 8% 10%

Unre

alized (

realizend)

Gain

/Loss

NOI Yield (NOI / Book Value)

ACROSS SHINKAWA Bldg.

HF HAKATA-HIGASHIRESIDENCE

Shibuya AX Hills

HF NAKAMEGURO Bldg.

SENJU MILDIX II

31st FP Acquisition Schedule Properties : 3 properties

Acquired Properties : 20 properties

Disposed Properties : 9 properties

Disposed Properties Extraordinary Asset : 4 properties

13

Ⅱ-4 History of Property Acquisition and Sale (after Main Sponsor Change）

物件取得Acquisition

FP31stFP16th FP27th FP28th FP29th FP30thFP23rd FP24th FP25thFP21stFP19thFP17th

Acquisition POAcquisition

POAcquisition

POAcquisition

POAcquisition

Sale SaleSalefor

Replacement

Salefor

Replacement

Salefor

Replacement

Acquisitionfor

Replacement

Acquisitionfor

Replacement

Acquisitionfor

Replacement

KAYABACHOHEIWA BUILDING

KOBE KYU-KYORYUCHIHEIWA BUILDINGHIROKOJI AQUA PLACE HF SAKURADORI BUILDING

MITA HEIWA BUILDING （leasehold land）

SAKAE MINAMIHEIWA BUILDING

ＨＦ NIHONBASHI HAMACHO BUILDING

HF SENDAIHONCHO BUILDING

HF WAKAMATSU-KAWADA RESIDENCE HF UENO BUILDING KOJIMACHI HF BUILDING

HF KUDAN MINAMI BUILDING

HF KANDAOGAWAMACHI BUILDING

HF SENDAIRESIDENCE EAST

HF NISHI-KOENRESIDENCE

HF BANSUI-DORI RESIDENCE

HF HIGASHI-SAPPORO RESIDENCE

HF MEIEKI-KITARESIDENCE

HF KANNAI RESIDENCENISSO 5 BUILDINGACROSS SHINKAWA

BUILDING

Sannomiya SanwaToyo Building

Glenpark Ikedayama

Rune Higashiterao

KCA Building

HF Minami 5 Jo Residence

HF Tenjin-MinamiResidence

HF Miami 6 Jo Residence Super HotelOsaka Tennoji

Super HotelKyoto Karasumagojyo

Super HotelSaitama Omiya

Super HotelSendai Hirose-dori

Shibuya AX Hills HF NakameguroBuilding

SENJU MILDIX Ⅱ

Acquisition

HF HAKATA-HIGASHI RESIDENCE

Replacement 1

Sold small residential

properties scattered in

rural cities and

replaced them with

property in central

Tokyo. Aimed to

increase the

management and

operation efficiency

while maintaining

profitability.

Replacement 2

Sold hotels that were exceptional assets and

replaced them with offices and residences that are

core assets. Aimed to increase and stabilize

profitability.

Replacement 3

Sold low-yielding assets with

a large unrealized loss and

replaced them with higher-

yielding assets with an

unrealized profit. Aim to

increase NAV, profitability,

and build a portfolio non-

susceptible to the risk of

business fluctuations.

14

Ⅱ-5 Internal Growth : Progress of lease-up of properties with low occupancy rates

Historical Occupancy RatesHF OGAWAMACHI BUILDING

HF MEIEKI-KITA RESIDENCE

The vacation of two floors of HF KANDA

OGAWAMACHI BUILDING was planned from the

time of acquisition, and it had been established that

the occupancy rate would fall to 57.6% in November

2015.

Immediately after acquisition, the REIT renamed the

building and at the same time stepped up leasing

activities. As a result, the occupancy rate improved to

81.4% by March 2016. With contracts concluded for

all the remaining space, 100% occupancy is expected

from July 2016.

Historical Occupancy Rates

（％）

（％）

Historical Occupancy RatesHF HAMAMATSUCHO BUILDING

The occupancy rate of HF HAMAMATSUCHO

BUILDING temporarily declined to 67.1% because

there were contract cancellations on three floors out

of nine by June 2016.

Worked on enhancing attractiveness for tenants and

raising awareness in the market by intermittently

conducting renovations on the restrooms and staff

kitchen on the vacant floors as well as holding

viewings for estate agents. As a result, the

occupancy rate has improved to 100%.

（％）

88.81

77.62 77.62 77.62 77.62 77.62

67.15

77.62

88.81 88.81 88.81

100.00

50

60

70

80

90

100

90.7 89.1

90.8

94.6

88.6

86.7

89.2

92.7 92.9

94.7

99.0 99.0

80

85

90

95

100

80.8

57.6 57.6 57.6 57.6

81.4 81.4 81.4 81.4

100.0 100.0 100.0 100.0 100.0

50

60

70

80

90

100

（Acquisition）

（Acquisition）

HF MEIEKI-KITA RESIDENCE was acquired in December 2015

at a lower occupancy rate than our assumed stable high level.

Although the occupancy rate temporarily declined to 86.7%, a

model room was set up, viewings for tenants and estate agents

were held, and units with furniture and household electronics were

provided. In addition, promotional activities in collaboration with

PM companies were conducted mainly for local major real estate

agents specializing in company residences, since there is a high

demand from corporations in this area. Consequently, the

occupancy rate smoothly improved.

It has been favorably operated and currently maintains a nearly

100% occupancy rate, which is higher than the stable high level

assumed at the time of acquisition.

15

2,849

1,586

2,882

3,972 3,851

1,741 2,180

1,618

3,658

2,589

0

1,000

2,000

3,000

4,000

5,000

26th FP2014/11

27th FP2015/5

28th FP2015/11

29th FP2016/5

30th FP2016/11

Move-ins Move-outs

-0.30%(1)

-3.55%(4) -0.73%

(2)-3.67%

(2)

-0.95%(3)

1.16%(4)

3.27%(14)

4.96%(22)

-0.02%

-0.24%

0.06%

-0.02%

0.30%

-0.30%

-0.20%

-0.10%

0.00%

0.10%

0.20%

0.30%

26th FP2014/11

27th FP2015/5

28th FP2015/11

29th FP2016/5

30th FP2016/11

-4.50%

-3.00%

-1.50%

0.00%

1.50%

3.00%

4.50%Percentage of Office Area

Percentage of Office Area

Percentage of Office Rent(right axis)

Status of Rent Revisions

Status of vacant period and free-rentStatus of monthly occupancy rates and office moving in/out

Status of Existing Tenant Rent Revision

Ⅱ-6 Internal Growth: Status of Office Operations(1)

(Note) Figures in parentheses indicate the number of tenants with rent revisions.

(Note) The rent ratio is the ratio of monthly office rent revenue.（Note) Figures in parentheses indicate the number of tenants with rent revisions.

（Note) The rent ratio is the ratio of monthly office rent revenue.

-2,035.45㎡

(8)-821.19㎡

(6)

-906.88㎡

(7)-1,057.00㎡

(5)-1,041.67㎡

(5)

193.93㎡

(3)

466.87㎡

(3)455.42㎡

(3)

1,944.63㎡

(8) 1,267.49㎡

(10)

-0.70%

-0.15% -0.04%

0.11%

-0.03%

-1.00%

-0.50%

0.00%

0.50%

1.00%

-3000

-2000

-1000

0

1000

2000

3000

26th FP2014/11

27th FP2015/5

28th FP2015/11

29th FP2016/5

30th FP2016/11

（㎡）Downward rent revision(by leased area)

Upward rent revision(by leased area)

Percentage of office rents

Downtime of rent including the vacancy duration and free-rent period was shortened, which has facilitated the monetization of vacant areas and contributed to an increase in revenue.

New rent: The average tenancy period of departed tenants was as long as 7.2 years. Therefore, the level of rent for new tenants was inevitably compared with the relatively high rent of the past.

However, contracts were concluded at almost the same level of rent as the former tenants, resulting in an unchanged level.

Existing rent: Upward rent revisions were conducted mainly for tenants who moved in at a time when market rents were at a relatively low level (average tenancy period: 5.8 years), which helped

raise rent levels across the portfolio.

1.7

9.27.9

2.6 2.3

3.4

3.4

3.3

2.31.7

0

2

4

6

8

10

12

14

26th FP2014/5

27th FP2015/5

28th FP2015/11

29th FP2016/5

30th FP2016/11

Average Vacancy Duration Average Free Rent Duration( Month)

90

92

94

96

98

100Occupancy Rate(right axis)( %)( ㎡)

16

15,453

14,85414,732

14,793 14,780

14,581 14,553

99.398.7 98.5 98.3 98.6

98.9

90

92

94

96

98

100

14,000

14,250

14,500

14,750

15,000

15,250

24th FP2013/11

25th FP2014/5

26th FP2014/11

27th FP2015/5

28th FP2015/11

29th FP2016/5

30th FP2016/11

Average Office rent Index

14,37414,408

14,44714,487

14,541 14,553

14,553

14,250

14,500

14,750

30th FP2016/11

31st FP2017/5

32nd FP2017/11

33th FP2018/5

34th FP2018/11

35th FP2019/5

Average office Rent(P/L) Average office Rent(end of FP)

Upward rent revisions for existing tenants were accelerated. The number of revisions and the range of revisions increased, which is expected to contribute to earnings in and after

the 31st fiscal period.

Due to the upward rent revisions at HF MONZENNAKACHO BUILDING, M2 Harajuku, ADESSO NISHIAZABU, and others, the rent index—the index of trends in rent unit price

excluding the impact of sales and purchases of properties—has improved on a continual basis.

The rent unit price when calculating profit and loss is expected to continually improve as it converges with the rent unit price under existing agreements over time.

Ⅱ-7 Internal Growth: Status of Office Operations(2)

Rent Index, Average Office Rent

Status of Agreement on Upward Rent Revisions

5.79%

22tenants5.05%

14tenants9.81%

4tenants

28th FP 29th FP

30th FP

After 31st FP

NISSO 5 Bldg.

When properties are purchased or sold, the average rent unit price can be affected because the rent levels for the relevant properties are included in

the calculation. When calculating the rent index, however, such an impact is excluded. The average rent unit price shows our rent level under

existing agreements at the end of each fiscal period, while the rent index shows the direction of rent revisions and the range of revisions. In this

calculation, store areas, Kayabacho Heiwa Building, and Mita Heiwa Building (leasehold land property) are excluded.

SHIBUYA AX HILLS

Over time, the rent unit price when calculating

profit and loss converges with the rent unit price

under existing agreements.

Less than 5%(7)

5% to 10%(11)

10% to 15%(3)

15% or more(1)

Average rent unit price at the end of the 30th fiscal period and prospects for

P/L rent unit price

Profit and loss of our free rent is calculated by obtaining the average values throughout the initial lease contract period. Therefore,

there is a deviation equivalent to the free rent between the rent unit price under existing agreements and when calculating profit and

loss. The deviation will be closed at the time of renewal of the agreement for the tenant. This table shows the range of deviation and

the schedule for closing as PL rent unit price.

Contribution of actual rent revisions to future revenue

(based on monthly rent)

(Note) The number of tenants subject to upward revision for the 31th FP indicates the number of

agreements on upward revision as of January 16, 2017.

(rent per tsubo/month)

Acquisition

Sale

HF UENO Bldg.KOJIMACHI HF Bldg.HF KUDAN-MINAMI Bldg.

Acquisition

HF KANDA OGAWAMACH Bldg.Acquisition

(rent per tsubo/month)

7.11%

7tenants243 -135

1,083

207 202

243 107

1,191 1,397

1,599

-200

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

28th FP2015/11

29th FP2016/5

30th FP2016/11

31st FP2017/5

32nd FP2017/11

(thousand yen)

Revision of 28th FP

Revision of 29th FP

Revision of 30th FP

Revision of 31st FP

Revision after 32nd FP

Total revision of each FP

(Note) Excludes the impact of properties sold in the 30th and 31st fiscal periods.

(Note) Shows the impact that the upward and downward rent revisions that were made (or will be made) each fiscal period have on total monthly rents

in each fiscal period.

17

96.53% 96.92% 95.77% 96.49% 96.87%

95.64% 96.53% 96.77% 95.76% 97.31%

97.53% 97.83% 97.32% 97.22% 95.31%

97.58% 97.30% 97.58% 95.73% 96.66%

90%

95%

100%

FP26th

2014/11

FP27th

2015/5

FP28th

2015/11

FP29th

2016/5

FP30th

2016/11

Tokyo Central 5Wards Tokyo 23 Wards

Tokyo Surrounding Areas Other Areas15 16 15 18 19

52

30 46 42 43

0

20

40

60

80

FP26th2014/11

FP27th2015/5

FP28th2015/5

FP29th2016/5

FP30th2016/5

(Day) Average Leasing Duration Average Restoration Duration

23.75%(459)

25.20%(506)

23.80%(487)

27.79%(637)

21.98%(504)

21.93%(424)

27.59%(554)

23.70%(485)

27.13%(622)

20.50%(470)

0%

10%

20%

30%

40%

26th FP2014/11

27th FP2015/5

28th FP2015/11

29th FP2016/5

30th FP2016/11

New tenant rate(annualized) Turnover rate(annualized)

The 30th FP was an off-peak period for leasing, but the occupancy rate shifted to a level exceeding the 29th FP, which was a busy period.

Occupancy rates in all areas and all types of properties exceeded 95.0%, and leasing has been in good form.

Average Occupancy Rates of Residence by Investment AreaOccupancy Rates and Vacancy Duration

Residence Occupancy Rates by Room Type

Ⅱ-8 Internal Growth : Status of Residential Operations（1）

Room Type

(Floor space)

Percentage of

Holdings

(in number of

units)

26th FP

Occupancy

Rate

27th FP

Occupancy

Rate

28th FP

Occupancy

Rate

29th FP

Occupancy

Rate

30th FP

Occupancy

Rate

Single Type（Under 40㎡)

82.07% 97.86% 96.39% 96.33% 96.07% 96.82%

Compact Type（Between 40㎡ to

60㎡)

13.92% 95.98% 95.21% 95.96% 95.57% 97.88%

Family Type（Above 60㎡)

4.01% 96.66% 97.44% 96.41% 95.74% 95.78%

Total 100.00% 97.31% 96.25% 96.26% 95.93% 96.94%

(Note) Excluding shops and office areas.

(Note) The average restoration duration is measured from the day of lease termination to the day of restoration work completion.

46

6761 60

History of Tenants Turnover

(Note) Figures in parentheses indicate the number of residential tenants that have moved in or departed.

0%

62

90%

92%

94%

96%

98%

100%Occupancy Rates(Right Axis)

18

11,374yen 11,354yen 11,360yen 11,255yen

11,179yen

10,945yen 10,956yen

99.9 99.9 100.0 100.1 100.2 100.2

92.0

94.0

96.0

98.0

100.0

102.0

10,000yen

10,500yen

11,000yen

11,500yen

24th FP2013/11

25th FP2014/5

26th FP2014/11

27th FP2015/5

28th FP2015/11

29th FP2016/5

30th FP2016/11

Average Residential rent Index

HF SENDAI RESIDENCE EAST

HF KANNAI RESIDENCEHF MEIEKI-KITA RESEIDENCEHF HIGASHI-SAPPORO RESIDENCE

HF NISHI-KOEN RESIDENCEHF BANSUI-DORI RESIDENCE

History of Residence Average Rents

Ⅱ-9 Internal Growth : Status of Residential Operations（2）

Trends in One Time Fees, Renewal Fees

26th FP

2014/11

27th FP

2015/5

28th FP

2015/11

29th FP

2016/5

30th FP

2016/5

Number of properties for which

one time fees obtained112 169 133 266 157

Ratio of one time fees taken 24.40% 33.47% 27.31% 41.76% 31.15%

One time fees (Number of months)

1.04 1.08 1.11 1.08 1.05

Number of properties for which

rental contract was renewed685 889 535 968 689

Renewal rate 76.50% 76.27% 78.10% 79.41% 79.93%

Renewal fees(Number of months)

0.89 0.85 0.86 0.69 0.72

Status of New Residence Tenants’ RentRent

Variation

+1.09%

- 0.23％

Rent

Variation

+0.05%

+0.01%

+0.50% +0.06%

Status of Rent revisions

(Note) Figures in parentheses indicate the number of tenants with rent revisions. (Note) Figures in parentheses are the number of tenants that apply to each category.

+0.70% +0.18%

（rent per tsubo/month）※includes effects of change in Portfolio

43.1%(217)

54.8%(349)

53.2%(259)

50.5%(255)

38.1%(175)

16.9%(85)

15.5%(99)

18.9%(92)

19.4%(98)

21.4%(98)

40.1%(202)

29.7%(189)

27.9%(136)

30.1%(152)

40.5%(186)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

30th FP2016/11

29th FP2016/5

28th FP2015/11

27th FP2015/5

26th FP2014/11

Rent Increase Rent Unchanged Rent Decrease

- 0.04％5.7%(39)

5.6%(54)

3.6%(19)

3.1%(21)

1.3%(9)

94.2%(649)

93.5%(905)

95.3%(510)

96.0%(651)

95.2%(499)

0.1%(1)

0.9%(9)

1.1%(6)

0.9%(6)

2.4%(16)

0% 20% 40% 60% 80% 100%

30th FP2016/11

29th FP2016/5

28th FP2015/11

27th FP2015/5

26th FP2014/11

Rent Increase Rent Unchange Rent Decrease

+0.18%

(Note)When properties are purchased or sold, the average rent unit price can be affected because the rent levels for the relevant properties are included in the calculation.

When calculating the rent index, however, such an impact is excluded. The average rent unit price shows our rent level under existing agreements at the end of each fiscal

period, while the rent index shows the direction of rent revisions and the range of revisions.

Rent rates of new tenants were revised downward at the time of the replacement of some tenants with higher existing rent. However, the increase in

the number of tenants with higher rent and the upward revision at the time of renewal supported rent levels, resulting in the nearly the same level of rent

variation.

Acquisition

Acquisition

Acquisition

19

95%

96%

97%

98%

99%

100%

Renovation Works: To strengthen the market competitiveness and to improve the asset value of properties

－Improved occupancy rate and expanded profitability

Ⅱ-10 Internal Growth: Refurbishment Construction Work

Change in Capital Expenditure

Historical Occupancy Rates (HF HIRAO RESEIDENCE)

Completion of Construction

28th FP Average

occupancy rate 96.9%

29th FP Average occupancy rate

98.4%

HF KASAI RESIDENCE

HF HIMONYA RESIDENCE

Renovation Works

・Improved outward

walls of building

-Building Frame

-Painter’s Work

-Waterproofing work

・Improved EV hall and

Entrance

90

91

92

93

94

95

96

97

98

99

100

Completion of Construction

29th FP Average

Occupancy Rate 96.2％

Historical Occupancy Rate (HF KASAI RESIDENCE)

Change in Capital Expenditure

8.49.0 9.1

9.6 9.6

5.1

3.54.3

3.8 3.8

0.0

2.5

5.0

7.5

10.0

26th FP2014/11

27th FP2015/5

28thFP2015/11

29thFP2016/5

30thFP2016/11

（100 million yen）Depreciation Capital Expenditure Amount

After

Before

30th FP Average

Occupancy Rate 99.0％

20

(15,000)

(12,000)

(9,000)

(6,000)

(3,000)

0

3,000

6,000

9,000

12,000

15,000

18,000

21,000

FP16th FP17th FP18th FP19th FP20th FP21st FP22nd FP23rd FP24th FP25th FP26th FP27th FP28th FP29th FP30th

（million yen）

New investment assets

Existing assets

Total

Ⅱ-11 Historical Appraisal Values

As a result of the progress of depreciation, portfolio replacement, and ongoing improvement in the market environment, unrealized gain have expanded continuously. The

unrealized gain ratio recorded the highest level since listing (11.25%).・Improvement factor of appraisal value included upward rent revisions and the falling cap rate.

・ACROSS SHINKAWA BUILDING, SENJU MILDIX II BANKAN, and HF HAKATA-HIGASHI RESIDENCE, which are planned to be acquired in the 31st fiscal period, are also expected to

contribute to the expansion of unrealized gain.

Appraisal Value at the end of FP30th

174,891million yenUnrealized Gain

17,680 million yen


New Investment assets 790 804 1,384 1,617 2,976 3,365 4,602 5,834 7,338 8,197

Existing assets -11,895 -13,181 -14,356 -10,410 -10,012 -10,932 -9,962 -7,523 -6,282 -4,572 -2,058 1,514 3,330 6,313 9,483

Total -11,895 -13,181 -14,356 -10,410 -10,012 -10,142 -9,158 -6,139 -4,665 -1,596 1,308 6,106 9,164 13,650 17,680

(Note) Increased, unchanged, and decreased status for each period compares properties against their appraisal values of the prior period.

Appraisal Value Comparison to Previous Periods(by number of properties)

90 84 83 91

80

2 9 7 7 13

2 4 4

0%

20%

40%

60%

80%

100%

FP26 FP27 FP28 FP29 FP30

Increase Unchanged Decrease

21

More solid financial characteristics: Increase in the capacity to acquire properties due to the continued decrease in borrowing costs and the decrease in

appraisal-based LTV.

Average borrowing rate:1.033%→0.983％ Average Loan Term:6.35years→6.45years Appraisal LTV:43.8%→43.6% Borrowing Capacity:¥21.4bn→¥22.4bn

Considered issuance of investment corporation bonds to further stabilize the financial position and prolong the period of fund procurement.

Ⅱ-12 Financial Strategies : Financial Status (1)

Lender Formation and Borrowing AmountsSummary of Interest-bearing Liabilities(end of 30th FP)

Financing Status of 30th FP

Average Interest

Rate

Average Loan

Term

Average Remaining

Term to MaturityLTV

(Note 1)

Appraisal-based

LTV(Note 2)

0.983% 6.45years 4.15years 43.4% 43.6%

Fixed Interest

Rate Ratio

Long-term Loan

Ratio

Long-term Loan

scheduled to

mature within 1

year Ratio

Rating:

R&I (Note3)

Rating:

JCR (Note4)

84.1% 85.0% 15.0% A- (Stable) A (Stable)

(Note 1) LTV = Interest-bearing liabilities as of FP End / Total Assets as of FP End

(Note 2) Appraisal-based LTV = Interest-bearing liabilities as of FP End / Appraised Value as of FP End

(Note 3) R&I is an abbreviation for Rating and Investment Information, Inc.

(Note 4) JCR is an abbreviation for The Japan Credit Rating Agency

Credit Commitment Lines

Sumitomo Mitsui Banking Corporation

Loan Commitment

From: June 1, 2016To: May 31, 2017

2.5

Unsecured, Unguaranteed

Committed Period

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Loan Commitment

Unsecured,Unguaranteed

Commitment Period

Mizuho Bank, Ltd.

Loan Commitment

Commitment Period

Unsecured,Unguaranteed

From: June 1, 2016To: May 31, 2017

From: June 1, 2016To: May 31, 2017

billionyen 2.0 billion

yen 1.5 billionyen

Shelf Registration of Investment Corporation Bonds

Shelf registration amount 10 billion yen

Effective period of comprehensive

resolution on issuance of bondsUntil May 27, 2018

Loan Amount

(mn yen)Interest Rate

Borrowing

Date

Maturity

Date

Loan Term

(year)

Term Loan 31A 2,000 1M Tibor + 0.20% 31-Oct-16 31-Oct-18 2.00

Term Loan 31B 3,857 1M Tibor + 0.80% 31-Oct-16 31-May-25 8.58

22

37.4 38.3

45.8

44.9 45.0 45.7 45.6 44.2 44.3 44.0 43.8

43.1 43.3 43.3 43.4

47.4 47.7

54.552.8 52.7 53.2 52.9

50.2 50.0 48.4

47.5

45.4 44.9 43.8 43.6

35

40

45

50

55

60

FP16th2009/11

FP17th2010/5

FP18th2010/11

FP19th2011/5

FP20th2011/11

FP21st2012/5

FP22nd2012/11

FP23rd2013/5

FP24th2013/11

FP25th2014/5

FP26th2014/11

FP27th2015/5

FP28th2015/11

FP29th2016/5

FP30th2016/11

(%)LTV

Appraisal-based LTV

Ⅱ-13 Financial Strategies : Financial Status (2)

History of Average Loan Maturity and Average Interest Rate

Loan Maturity Diversification and All-in Spread

0.00%

2.00%

Borrowing Capacity

LTV=55% 44.3 billion yen

LTV=50% 22.4 billion yen

*All-in spread includes the spread, the upfront fee and the arrangement fee but does not include the base rate and hedging cost.

4,265 7,180 5,200 2,150 4,031 6,000 5,520 5,180 5,709 3,820 4,300 3,620 4,700 4,880 3,850

2,000 5,857 3,857

0

5,000

10,000

15,000

FP30th FP31st FP32nd FP33rd FP34th FP35th FP36th FP37th FP38th FP39th FP40th FP41st FP42nd FP43rd FP44th FP45th FP46th FP47th

(million yen)

FP 30 Repayment FP 30 financed Loans Loans

Average All-in Spread of 30th FP Financed Loans

6.3 years： 0.660%

3.38 3.30

2.36 3.14

3.68 4.09 4.07

4.51 4.93 5.16 5.41 5.76

6.19 6.35 6.45

1.78 1.53 1.35 1.85 2.10 2.22 3.10 3.26 3.46 3.53 3.53 3.61 4.13 4.16 4.15

1.902% 1.932%2.055%

1.896% 1.864% 1.836%

1.609%1.497%

1.397%1.297% 1.276% 1.252%

1.179%1.033%

0.983%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0


(year) Average Loan Term Average Remaining Term to Maturity Average Interest Rate

History of Loan to Value(LTV)

(Note 1) LTV = interest –bearing liabilities as of FP End / Total Assets as of FP End

(Note 2) Appraisal-based LTV = Interest –bearing liabilities as of FP / Appraised Value as of FP End

Reduction in borrowing rate for the 12th consecutive period: The introduction of the negative interest rate policy by the Bank of Japan expanded the range of decline in

interest rates.

Since the borrowings with interest rates in the mid-to-high 1% range will reach maturity, the borrowing rate is expected to decline at the time of maturity.

Continual decline in appraisal-based LTV expanded the capacity to acquire properties, which allows for the stable expansion of asset size in the future.

23

Ⅱ-15 Growth Strategy

Internal Growth

Maintain and improve high occupancy rate

・ Collaborate with sponsors and PM in initiatives to create

tenant demand by implementing appropriate and timely

leasing measures

・ Prevent tenants from leaving through high quality

operation and management, and CS measures

・ Shorten downtime

Improve rent earnings through rent increases

・ Promote rent increases (revisions) when tenancy changes

or when lease is renewed

Implement strategic CAPEX investment

・ Systematically implement added value renovations

resulting in upward rent revisions and improved CS

Continue to increase subsidiary revenue and

make cost reductions

External Growth

Continued healthy and steady external growth

・ Carefully selective investment in properties that will

contribute to the improvement of portfolio quality and

profitability, without being swayed by an overheated market

・ Employ diverse methods to expand opportunities for

acquisition by collaborating with sponsors in development,

etc.

・ Utilize borrowing capacity to flexibly acquire

properties.

Continuous replacement strategies

・ In order to improve portfolio quality and profitability,

replacement from low profitability properties, small-scale

residences, etc. to blue-chip offices and residences

Purpose / Area

・ Policy of carefully selective investment in blue-chip offices

and residences

・ Retain Tokyo wards as main area, but also carry out

selective investment in large regional cities where support

from sponsors can be obtained

Financial Operation

Create a solid financial structure

・ Create a solid financial structure that is not vulnerable to

fluctuations in market interest rates, by extending loan

periods, diversifying debt maturities, and fixing interest

rates on borrowings

Control of LTV

・ Seek continuous expansion of portfolio and earnings

through the stable acquisition of properties not influenced

by the financial environment by property controlling LTV.

Diversify methods of procuring funds

・ Create access to various kinds of funds, such as equity

procurement through public offering, creation of a lender

formation comprising a wide range of industries, issuing

of investment corporation bonds, commitment lines, and

commitment-type term loans

Reduce financial costs

・ Implement strategic financial operations to ensure that the

current low interest rate environment can help reduce our

financial costs in the future.

31st FP Distribution：1,980yen/unit (forecast）

32nd FP Distribution：1,980yen/unit (forecast）

Sustained dividend growth

Will continue activities aiming at the distribution of 2,000 yen in the 32nd fiscal period.

Stabilization of dividend by utilizing retained earnings and RTA (reserve for temporary difference

adjustment)

・ When a loss occurs as a result of property sale, stabilize dividend by appropriating retained earnings in

respect of strategic large-scale expenditures, unexpected factors, and any other expenditures

Midterm Target

DPU: 2,000 yen

AUM: 200 billion yen

24

Diversified property acquisition methods by utilizing sponsors’ support.

Increased opportunities for acquiring assets through the diversified property acquisition methods.

Hirokoji Aqua Place

HF SAKURADORIBUILDING

HF NIHONBASHIHAMACHO BUILDING

HF SENDAIHONCHO BUILDING

KAYABACHO HEIWA BUILDING

KOBE KYUKYORYUCHI

BUILDING

SAKAE MINAMI BUILDING

HF WAKAMATSUKAWADA RESIDENCE MITA HEIWA

BUILDING(Land)

(Appendix) Diversified Property Acquisition Methods

Total of acquisition

prices since

strengthening of

sponsorship*

53,264Million yen

(As of January 31, 2017)

Direct acquisitions from sponsor

4properties 10,918million yen

Utilizing bridge fund


Direct acquisitions from third parties


HF KUDAN MINAMIBUILDING

HF SENDAIRESIDENCE EAST

Ratio of acquisition by HEIWA

REAL ESTATE’s support since

strengthening of sponsorship

96.2%

HF HIGASHI-SAPPORORESIDENCE

HF MEIEKI-KITARESIDENCE

HF KANNAIRESIDENCE

NISSO 5 Building

HF KANDAOGAWAMACHI

BUILDING

HF NISHIKOENRESIDENCE

HF BANSUIDORI RESIDENCE

Sponsor’s Support

Warehousing 12properties 30,308million yen

*“Since strengthening of sponsorship” means since the 16th fiscal period (fiscal period ended November 2009) when we undertook the strengthening of sponsorship.

HF UENO BUILDING KOJIMACHIHF BUILDING

HF HAKATA- HIGASHIRESIDENCE

ACROSS SHINKAWA BUILDING

SENJU MILDIX 2

Ⅲ Appendix

26

Ⅲ-1 Balance Sheet

Share Share Share Share Share Share

（％）（％）（％）（％）（％）（％）

(Assets) (Liabilities)

Ⅰ　Current assets Ⅰ　Current Liabilities

Cash and deposits 8,107,992 10,824,603 2,716,610 Accounts payable 448,271 535,067 86,795

Cash and deposits in trust 6,659,433 6,749,092 89,659 Current portion of long-term loans payable 10,122,000 11,445,000 1,323,000

Accounts receivable-trade 80,744 75,518 (5,225) Accured expenses 687,026 685,624 (1,401)

Prepaid expenses 193,230 175,713 (17,517) Income taxes payable 429 0 (429)

Consumption taxes receivable 127,422 0 (127,422) Accrued consumption taxes 0 170,317 170,317

Other 8,139 3,534 (4,604) Advances received 917,034 887,139 (29,894)

Allowance for doubtful accounts △ 417 △ 512 (94) Delivatives liabirities 4,829 1,874 (2,954)

Current assets 15,176,544 8.6 17,827,949 10.1 2,651,405 17.5 Other 11,857 11,499 (358)

Ⅱ　Noncurrent assets Total current liabilities 12,191,448 6.9 13,736,523 7.8 1,545,075 12.7

1. Property, plant and equipment Note 1 Ⅱ　Noncurrent liabilities

Buildings 8,495,164 7,975,931 (519,233) Long-term loans payable 66,139,700 64,816,700 (1,323,000)

Structures 35,330 30,529 (4,801) Tenant leasehold and security deposits 893,683 844,900 (48,783)

Machinery and equipment 114,796 108,516 (6,279) Tenant leasehold and security deposits in trust 3,731,742 3,738,130 6,388

Tools, furniture and fixtures 53,697 53,268 (429) Derivatives liabilities 454,949 320,783 (134,165)

Land 25,945,334 23,770,978 (2,174,356) Total noncurrent liabilities 71,220,074 40.4 69,720,514 39.7 (1,499,560) (2.1)

Buildings in trust 40,997,036 40,518,076 (478,959) Total liabilities 83,411,523 47.3 83,457,038 47.5 45,515 0.1

Structures in trust 226,213 220,184 (6,029) (Net assets)

Machinery and equipment in trust 249,645 301,443 51,798 Ⅰ　Unitholders' equity

Tools, furniture and fixtures in trust 325,436 342,498 17,062 1. Unitholders' capital Note 2 81,370,715 46.2 81,370,715 46.3 0 0.0

Land in trust 79,858,725 79,858,725 0 2. Surplus

Total property, plant and equipment 156,301,379 88.7 153,180,152 87.2 (3,121,227) △ 2.0 Capital surplus 7,406,652 4.2 7,406,652 4.2 0

2. Intangible assets Voluntary retained earnings

Leasehold right 715,719 715,719 0 Reserve for temporary difference adjustment 2,497,604 2,457,010 (40,593)

Leasehold rights in trust 3,315,665 3,315,665 0 Total Voluntary retained earnings 2,497,604 2,457,010 1.4 (40,593)

Other 242 242 0 Unappropriated retained earnings 2,290,094 1.3 1,581,316 0.9 (708,778) (30.9)

Total intangible assets 4,031,627 2.3 4,031,627 2.3 0 0 Total surplus 12,194,351 6.9 11,444,979 6.5 (749,372) (6.1)

3. Investments and other assets Total unitfolders' equity 93,565,066 53.1 92,815,694 52.8 (749,372) (0.8)

Guarantee deposits 10,252 10,252 0 Ⅱ　Valuation and translation adjustments

Long-term prepaid expenses 403,886 364,037 (39,848) Deferred gains or losses on hedges (741,425) (516,656) 224,769

Derivatives 20,741 55,285 34,543 Total valuation and translation adjustments (741,425) (0.4) (516,656) (0.3) 224,769 (30.3)

Other 236,413 250,096 13,683 Total net assets Note 3 92,823,640 52.7 92,299,038 52.5 (524,602) (0.6)

Total investments and other assets 671,293 0.4 679,672 0.4 8,378 1.2 Tatal liabilities and net assets 176,235,164 100.0 175,756,076 100.0 (479,087) (0.3)

Total noncurrent assets 161,004,301 91.4 157,891,452 89.8 (3,112,849) △ 1.9 Note 1 The cumulated depreciation is directly subtracted from property, plant and equipment

Ⅲ　Deferred assets cumulated depreciation

Investment unit issuance expenses 54,318 36,674 (17,643) 29th f iscal period： 12,226,822 thousand yen 30th f iscal period： 13,093,827 thousand yen

Total deferred assets 54,318 0.0 36,674 0.0 (17,643) (32) Note 2 Total outstanding investment units

176,235,164 100.0 175,756,076 100.0 (479,087) △ 0.3 29th f iscal period： 1,014,847 units 30th f iscal period： 1,014,847 units

* Figures below a thousand yen have been rounded off. Percentages are show n w ith f igures rounded to the tenth place. Note 3 Net assets per investment unit

29th f iscal period： 91,465 yen 30th f iscal period： 90,948 yen

Total assets

November 30, 2016

Amount Amount Amount Amount Amount

■　Assets (unit: thousand yen) ■　Liabilities and net assets (unit: thousand yen)

　　　　　　　　　　　　　　　　　　　 Period

　

　　　　　　Category

29th Fiscal Period 30th Fiscal PeriodVariation Period

Category

29th Fiscal Period

Amount

30th Fiscal PeriodVariation

May 31, 2016 November 30, 2016 May 31, 2016

27

Ⅲ-2 Profit and Loss Statement

Share Share Share

(％) (％) (％)

Operating revenue Note 1

Rent revenue-real estate 5,141,840 5,223,397

490,173 5,632,013 100 474,966 5,698,364 100

Operating expenses

Note 2 2,530,807 2,530,807

- 52,384

517,550 520,623

18,802 19,528

44,337 42,144

7,970 7,967

9,660 9,660

108,367 3,237,496 57 116,642 3,324,027 58 86,531 3

Operating income (loss) 2,394,516 43 2,374,336 42 (20,180) (1)

Non-operating income

4,148 2,706

552 847

6,194 3,973

48 10,943 0 522 8,049 0 (2,893) (26)

Non-operating expenses

482,724 445,747

106,754 95,896

17,643 17,643

2,888 610,010 11 3,018 562,306 10 (47,704) (8)

Ordinary income (loss) 1,795,449 32 1,820,080 32 24,630 1

Extraordinary expenses

Impairment loss - - 734,003 734,003 13 734,003

Income (Loss) before income taxes 1,795,449 32 1,086,076 19 (709,373) (40)

Income taxes-current 605 605

Income taxes 605 0 605 0 0 0

Net income (loss) 1,794,844 32 1,085,471 19 (709,373) (40)

Retained earnings brought forward 495,249 495,845 596

2,290,094 1,581,316 (708,778)

　* Figures below a thousand yen have been rounded off. Percentages are show n w ith f igures rounded to the tenth place.

Note 1 The management days of each period are 183 days for the 29th f iscal period and 183 days for the 30th f iscal period.

Note 2 The depreciation costs of this total are 960,871 thousand yen for the 29th f iscal period and 955,382 thousand yen for the 30th f iscal period.

Unappropriated retained earnings (undisposed loss)

Audit fee

Directors' compensations

Administrative service fees

Expenses related to rent business

New investment unit issuance costs

Asset management fee

Interest income

Other operating expenses

Other

Borrowing related expenses

Other

Asset custody fee

Reversal of dividends payable

Insurance income

Loss on sales of real estate properties

Amount

Variation

(unit: thousand yen)

Interest expenses


Amount

　　　　　　　　　　　　　　　　　　　　　　　　　　　　Period

　　　　　Category

29ｔｈ Fiscal period 30ｔｈ Fiscal period

(Dec 1, 2015 - May 31,2016) (Jun 1, 2016 - Nov 30, 2016)

Amount

28

Ⅲ-3 Debts

as of November 30, 2016

Term Loan15 Term Loan25　TrancheA

Sumitomo Mitsui Banking Corporation Sumitomo Mitsui Banking Corporation

Resona Bank, Limited. Sumitomo Mitsui Trust Bank, Limited.

Shinsei Bank, Limited. The Bank of Fukuoka

Term Loan21　TrancheA Mitsubishi UFJ Trust and Banking Corporation

The Nomura Trust and Banking Co., Ltd. The 77 Bank, Ltd.

Mitsubishi UFJ Trust and Banking Corporation Term Loan25　TrancheB

Term Loan13　TrancheD Sumitomo Mitsui Banking Corporation

Sumitomo Mitsui Banking Corporation Aozora Bank, Ltd.

Aozora Bank, Ltd. Sumitomo Mitsui Trust Bank, Limited.

Resona Bank, Limited. The Bank of Fukuoka

Term Loan14 Mitsubishi UFJ Trust and Banking Corporation

Aozora Bank, Ltd. The 77 Bank, Ltd.

Resona Bank, Limited. Term Loan25　TrancheC

Development Bank of Japan Inc.

Term Loan16 Term Loan26　TrancheA


Aozora Bank, Ltd. Aozora Bank, Ltd.

Resona Bank, Limited. Term Loan26　TrancheB

Sumitomo Mitsui Trust Bank, Limited. ORIX Bank Corporation

Term Loan17 Term Loan26　TrancheC


Aozora Bank, Ltd. Resona Bank, Limited.

Resona Bank, Limited. The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Shinsei Bank, Limited. Shinsei Bank, Limited.

Term Loan19 Mizuho Bank, Ltd.

Sumitomo Mitsui Banking Corporation Term Loan27　TrancheA

Resona Bank, Limited. Sumitomo Mitsui Banking Corporation

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

Term Loan20 The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Mizuho Trust & Banking Co., Ltd. Mizuho Trust & Banking Co., Ltd.

Term Loan21　TrancheB Sumitomo Mitsui Trust Bank, Limited.

Sumitomo Mitsui Banking Corporation Mizuho Bank, Ltd.

Aozora Bank, Ltd. Term Loan27　TrancheB

Resona Bank, Limited. Sumitomo Mitsui Banking Corporation

The Bank of Tokyo-Mitsubishi UFJ, Ltd. Aozora Bank, Ltd.

Term Loan22　TrancheB Resona Bank, Limited.

Development Bank of Japan Inc. The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Term Loan23　TrancheA Mizuho Trust & Banking Co., Ltd.

Sumitomo Mitsui Banking Corporation Sumitomo Mitsui Trust Bank, Limited.

Aozora Bank, Ltd. Mizuho Bank, Ltd.

Resona Bank, Limited. Term Loan28　TrancheA

The Bank of Tokyo-Mitsubishi UFJ, Ltd. Aozora Bank, Ltd.

Mizuho Trust & Banking Co., Ltd. Term Loan28　TrancheB

Sumitomo Mitsui Trust Bank, Limited. Sumitomo Mitsui Banking Corporation

Term Loan23　TrancheB Resona Bank, Limited.

The Bank of Tokyo-Mitsubishi UFJ, Ltd. The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Term Loan24　TrancheA Term Loan29　TrancheA

ORIX Bank Corporation Sumitomo Mitsui Banking Corporation

Term Loan24　TrancheB The Bank of Tokyo-Mitsubishi UFJ, Ltd.

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

The Norinchukin Bank Sumitomo Mitsui Trust Bank, Limited.

The Bank of Fukuoka The Nomura Trust and Banking Co., Ltd.

Sompo Japan Nipponkoa Insurance Term Loan29　TrancheB

Term Loan24　TrancheC Sumitomo Mitsui Banking Corporation

Sumitomo Mitsui Banking Corporation Aozora Bank, Ltd.

Aozora Bank, Ltd. The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Mizuho Trust & Banking Co., Ltd. Mizuho Bank, Ltd.

The Bank of Fukuoka Mizuho Trust & Banking Co., Ltd.

Shinsei Bank, Limited.

The Nomura Trust and Banking Co., Ltd.

Term Loan30　TrancheA

Aozora Bank, Ltd.

Term Loan30　TrancheB


Resona Bank, Limited.


Sumitomo Mitsui Trust Bank, Limited.

Term Loan31　TrancheA




Term Loan31　TrancheB


Aozora Bank, Ltd.



ORIX Bank Corporation

October 31, 2012 May 31, 2018

Long-term

loans

payable

Long-term

loans

payable

Unsecured and

Unguaranteed

December 18, 2015 October 31, 2019

1,400 0.58000 December 18, 2015 October 31, 2021

1,000 0.63000 May 31, 2016 October 31, 2022

Subtotal 11,445

May 31, 2017

October 31, 2020

May 31, 2021

May 31, 2021

October 29, 2021

Unsecured and

Unguaranteed

0.25000

3,850 0.83000

Breakdown Balance at

Period End

(million yen)

Interest Rate

(%)

May 31, 2017

May 31, 2018

October 31, 2019

March 31, 2020

September 30, 2020

May 31, 2019

0.26500

Breakdown Balance at

Period End

(million yen)

Interest Rate

(%)

Borrowing

Date

Repayment

DateDescription

Lender

Total 76,262

Long-term

loans

payable

Due within

One Year

2,500

Subtotal 64,817

October 31, 2012

October 31, 2013

0.91527

0.60700

1,300

1,000

800

1.20000

0.75000

October 31, 20121.15727

Borrowing

Date

Repayment

DateDescription

Lender

1.46168

1.16000

2,295

3,900

3,500

5,520

1,230

1,970

3,950

1,000

4,709

October 31, 2022

700

October 31, 2012

March 29, 2013

September 13, 2013

October 31, 2013

December 20, 2013

May 30, 2014

1.01527

0.95727

1.20000

1.20000

1.20800 October 30, 2015 October 31, 2024

0.14625 October 29, 2015 October 31, 2018

4,700 1.13300 October 29, 2015 October 31, 2023

940 0.58000 October 31, 2015

850

4,880

October 31, 2021

May 30, 2014

3,620 1.18750 May 29, 2015 May 31, 2023

2,531

2,400

0.61300

1.17500

October 31, 2014

October 31, 2014

May 31, 2019

October 31, 2022

October 31, 2014

December 4, 2014 May 31, 2018

1,300 0.29625 December 4, 2014 October 31, 2018

900 1.24348 December 4, 2014

0.23000 October 31, 2016 October 31, 2018

3,857 0.83000 October 31, 2016 May 31, 2025

Unsecured and

Unguaranteed

3,100 1.25727 October 25, 2012 October 31, 2017

4,080 1.89206 May 31, 2012 October 31, 2017

2,000

0.25200 May 29, 2015 May 31, 2019

480 0.63000 May 29, 2015 October 31, 2021

29

5 to 10years17.30%

10 to 15years43.05%

15 to 20years9.16%

More than

20years30.48%

Central 5 Wards42.8%

Tokyo 23

Wards25.9%

Other21.5%

Tokyo Area

68.7%

Tokyo Surrounding Areas, 9.8%

Ⅲ-4 Diversification of Investment Areas

Sendai: 5.4%

7 Properties, 8.77 billion yen

Surrounding Area of Tokyo: 9.7%


Nagoya: 8.1%

6 properties, 13.27 billion yen

Kansai: 5.4%


Fukuoka: 1.7%


Metropolitan Area Total78.5%

72 Properties 127.82 billion yen

Tokyo 23 wards68.7%


Sapporo: 1.0%

1 property, 1.56 billion yen

Office

Residence

Diversification of Investment Areas（As of November 30, 2016）

Portfolio Breakdown (As of November 30, 2016）

Average

Building Age

16.8years

Property

Type

Investment

Area

(Note) The figures in the graphs indicate the ratio of acquisition price of each item versus the total acquisition price of each category, and are rounded to the second decimal place.

Office44.5%

Residence55.6%

30

5 to 10 years15.65%

(3)

10 to 15 years

12.57%(4)

15 to 20 years3.29%

(1)

20 years or more

68.49%(22)

Less than 10,000yen

13.2％

10,000yen to 15,000yen

49.9％

15,000yen to 20,000yen

27.0％

20,000yen to 25,000yen

5.1％

25,000yen or more,

4.9％

Less than 50 tsubos, 43.6%

(123)

50 to 100 tsubos, 30.9%

(87)

100 to 200 tsubos, 17.4%

(49)

200 tsubos or more, 8.2%

(23)

Ⅲ-5 Office Portfolio Performance

Distribution by Tenant Industry Sector

Ranking Tenant Property Name Share of total rent

1 Company A Kayabacho Heiwa Bldg.. 3.80%

2 Company B HIROKOJI AQUA PLACE 1.55%

3 Company C NISSO 5 Bldg.. 1.50%

4 Company DHF SAKURADORI

BUILDING1.37%

5 Company E Funabashi Face Bldg.. 1.22%

Total 9.44％

Tenants with Largest Rent Share (Includes Residence)

Distribution by Tenant Leasing Area Distribution by Property Age

Average office asset age

22.7 years

Total number of office tenant

282 tenants

(Note) Figures in parenthesis indicate the number of office tenants by area. (Note) Figures in parenthesis indicate the number of office properties by

building age, excluding Mita Heiwa Building (leasehold land).

(Note) The following figures are calculated based on the data as of November 30, 2016

Distribution by Rent (per tsubo)

Wholesale and retail trade, 17.9%

Manufacturing, 15.4%

Information and communications,

14.7%Scientific research,

professional and technical services, 13.0%

Construction, 7.4%

（Not elsewhere classified）Services, 6.7%

Finance and insurance, 6.3%

Real estate and goods rental and leasing, 5.3%

Medical health care and welfare, 2.8%

Accommodations, eating and drinking services,

3.5%

Transport and postal activities, 3.2%

Living-related and personal services and amusement services,

2.1%

Education, Learning support, 1.4%

Compound Services, 0.4%

Average Rent of office tenant

14,339 yen

（Note) Based on the tenants’ monthly rent per tsubo. Tenants leasing more than one property are

counted as 1tenant for each building.

（Note）Average rent office tenant figures are calculated based on the data as of Dec 31, 2016

31

5 to 10years18.6%

（14）

10 to 15years66.2%

（46）

15 to 20years13.7%

（5）

20years or more1.0%

（1）

Teens0.0%

20s23.3%

30s38.6%

40s20.3%

50s or more17.10%

Unknown0.3%

0㎡ to 30㎡64.3%(2,934)

30㎡ to 40㎡17.8%(810)

40㎡ to 50㎡8.6%(392)

50㎡ to 60㎡5.3%(244)

60㎡ to 70

㎡1.5%…

70㎡ to 80㎡1.2%(53)

80㎡ to 90㎡1.0%(47)

90㎡ to 100㎡0.2%(8)

100㎡ or more0.1%(5)

Less than 100,000yen

59.8%

（2,644）

100,000 to 150,000yen

25.8%

（1,141）

150,000 to 200,000yen

10.1%

（448）

200,000 to 300,000yen

3.5%

（154）

300,000yen or more0.8%

（35）

Residence Types

Agreement Categories Gender Breakdown for Individual Contracts Age Distribution

Status by Monthly Rent Status by Leasable Floor Space Status by Asset Age

Average residence asset age

12.14years

(Note) Figures in parenthesis are the number of total leasable units by leasable

floor space. (Excluding shop areas.)

(Note) Figures in parenthesis and the total number of residential tenants are the

number of tenants as of November 30, 2016.

Number of residential tenants

4,422 tenants

Number of leasable units

4,563 units

(Note) Figures in parenthesis are the number of residential

properties by building age.

Ⅲ-6 Residential Portfolio Performance(Note) The following figures are calculated based on the data as of November 30, 2016

Individual65.4%

Corporate34.6% Male

55.3%

Female44.8%

32

Total 29th Fiscal Period 30th Fiscal Period

Rents and common expenses 5,141,840 5,223,397

Other income 490,173 474,966

Rental business income total 5,632,013 5,698,364

PM fees 614,568 603,332

Public charges and taxes 388,256 410,426

Utilities 218,763 219,633

Maintenance and repair fees 175,124 191,090

Insurance fees 5,645 5,576

Trust fees 45,292 44,385

Other expenses 122,283 125,249

Rental business expenses total 1,569,935 1,599,694

NOI 4,062,077 4,098,669

Depreciation 960,871 955,382

Rental business profit 3,101,206 3,143,286

Office 29th Fiscal Period 30th Fiscal Period


Other income 314,544 319,273


PM fees 285,910 286,216


Utilities 185,656 190,015



Trust fees 12,842 12,470


Rental business expenses total 873,759 894,537

NOI 1,840,716 1,870,778



Residence 29th Fiscal Period 30th Fiscal Period


Other income 175,628 155,692


PM fees 328,657 317,116


Utilities 33,106 29,618



Trust fees 32,450 31,915


Rental business expenses total 696,176 705,157

NOI 2,221,361 2,227,890



(unit: thousand yen)

Ⅲ-7 Profits from Rental Business

33

Property Name

Of-01

HF GOTANDA

BUILDING

Of-05

SUITENGU HEIWA

BUILDING

Of-06 HF

MONZENNAKACHO

BUILDING

Of-07HF HAMAMATSUCHO

BUILDING

Of-08

KOKUSAI TAMEIKE

BUILDING

Of-09

GRACE BUILDING

SENGAKUJIMAE

Of-10HF SHIN-YOKOHAMA

BUILDING

AddressShinagawa-ku,

TokyoChuo-ku, Tokyo Koto-ku, Tokyo Minato-ku, Tokyo Minato-ku, Tokyo Minato-ku, Tokyo

Yokohama City,

Kanagawa

Lot Area (m2) 605.72 316.73 748.36 294.50 533.32 538.50 668.00

Total Floor Area (m2) 2,921.56 2,177.81 4,558.01 2,184.76 3,089.73 2,401.74 4,321.23

Constructed May 1980 August 1991 December 1990 December 1991 February 1992 June 1994 February 1993

Period-end occupancy rate(%) 96.35 100 100 100 100 100 100

Acquisition Price (mm yen) 1,290 1,550 2,500 1,530 2,700 1,220 1,550

Appraisal Price (mm yen) 1,377 1,398 2,520 1,550 2,640 1,640 1,100

Property Management

Company

Heiwa Real Estate Co.,

Ltd.


Ltd.


Ltd.


Ltd.


Ltd.


Ltd.


Ltd.

PML (%) 10.9 10.0 5.7 8.0 7.3 7.5 13.3

Rental business balance (Note 1)29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

Operation days 183 183 183 183 183 183 183 183 183 183 183 183 183 183

Rents and common expenses 42,881 45,696 47,901 48,166 79,817 84,743 36,824 37,279 63,986 69,644 53,083 53,800 40,100 41,442

Other income 4,107 5,097 5,157 5,374 8,573 8,793 4,088 4,157 6,950 8,530 12,465 8,018 8,823 8,784

①Rental business income total

(unit: thousand yen)46,989 50,793 53,059 53,541 88,391 93,536 40,912 41,437 70,937 78,175 65,548 61,818 48,923 50,227

PM fees 6,255 5,681 6,749 6,560 13,322 11,480 4,403 6,299 6,877 6,051 6,510 4,826 8,820 8,729

Public charges and taxes 5,484 5,399 4,920 4,913 6,116 6,043 6,601 6,493 7,280 7,229 2,239 2,234 4,923 4,918

Utilities 2,517 2,844 4,680 4,857 7,403 7,622 3,485 3,184 5,164 5,992 4,587 4,733 4,754 4,175

Maintenance and repair fees 1,625 1,109 462 832 1,861 2,430 899 1,810 1,923 4,377 906 1,209 671 977

Insurance fees 57 57 44 44 83 83 41 41 62 62 50 50 79 80

Trust fees 1,025 1,025 690 690 900 900 750 750 850 850 535 535 - -

Other expenses 987 368 385 10 609 1,193 224 227 147 191 5,338 5,391 423 421

②Rental business expenses total


③NOI (①－②) 29,035 34,308 35,126 35,632 58,094 63,781 24,506 22,630 48,630 53,419 45,380 42,837 29,250 30,924

Depreciation 9,852 9,861 8,075 8,078 16,680 16,719 7,203 7,355 7,376 7,501 6,758 6,770 17,731 17,782

Rental business profit 19,182 24,446 27,050 27,554 41,414 47,062 17,302 15,275 41,254 45,917 38,622 36,066 11,518 13,141

(Note) Figures for rental business balance are the actual numbers for each period where values below 1,000 yen are rounded off.

Ⅲ-8 Portfolio Overview and Performance (Office)

34

Property Name

Of-11

NIHONBASHI

DAIICHI BUILDING

Of-12

HF HATCHOBORI

BUILDING

Of-15

HF NAKAMEGURO

BUILDING

Of-16 ANWA

TSUKASAMACHI

BUILDING

Of-17

HATCHOBORI MF

BUILDING

Of-18

M2 HARAJUKU

Of-20

FUNABASHI FACE

BUILDING

Address Chuo-ku, Tokyo Chuo-ku, Tokyo Meguro-ku, Tokyo Chiyoda-ku, Tokyo Chuo-ku, Tokyo Shibuya-ku, TokyoFunabashi City,

Chiba

Lot Area (m2) 520.69 543.31 1,078.04 251.95 205.83 264.36 488.13


Constructed March 1988 October 1991 February 1988 October 1990 January 1988 January 1970 April 2003

Period-end occupancy rate(%) 100 100 77.09 100 100 85.61 100


Appraisal Price (mm yen) 1,910 2,460 2,134 1,200 988 4,702 3,170

Property Management CompanyHeiwa Real Estate Co.,

Ltd.

Building Management &

Strategy Inc.


Ltd.


Ltd.


Ltd.


Ltd.

Building Management &

Strategy Inc.

PML (%) 16.5 12.5 14.5 9.2 14.7 9.8 5.9


Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

Operation days 183 183 183 183 183 183 183 183 183 183 183 183 183 183


Other income 7,792 7,617 13,134 5,534 11,989 11,171 5,384 4,878 2,313 2,003 8,116 7,268 5,542 5,271



PM fees 5,898 5,708 9,318 7,644 8,194 7,008 2,869 3,720 2,632 2,927 6,758 9,751 17,900 18,557


Utilities 4,680 4,449 4,507 4,376 5,285 4,602 2,986 2,739 2,508 2,321 4,422 4,244 8,800 8,328

Maintenance and repair fees 1,446 4,486 1,894 1,742 1,936 427 536 1,097 980 2,270 709 1,668 - 190

Insurance fees 65 65 70 70 80 81 28 28 26 27 30 30 77 77

Trust fees 1,055 650 - - - - - - - - 1,401 1,401 - -

Other expenses 190 279 264 293 176 169 83 171 53 56 418 52 8 33



③NOI (①－②) 42,558 40,279 50,696 41,240 43,555 38,642 27,677 24,945 23,164 21,262 80,269 73,974 77,483 79,607

Depreciation 14,064 14,075 8,911 9,057 17,329 17,399 8,869 8,962 4,432 4,508 8,852 8,859 20,015 20,015




35

Property Name

Of-21

ADESSO

NISHIAZABU

Of-22

HF TORANOMON

BUILDING

Of-23

HF IKEBUKURO

BUILDING

Of-24

HF YUSHIMA

BUILDING

Of-25

KAYABACHO

HEIWA BUILDING

Of-26

HIROKOJI AQUA

PLACE

Of-27 KOBE

KYUKYORYUCHI

HEIWA BUILDING

Address Minato-ku, Tokyo Minato-ku, Tokyo Toshima-ku, Tokyo Bunkyo-ku, Tokyo Chuo-ku, Tokyo Nagoya City, Aichi Kobe City, Hyogo

Lot Area (m2) 125.91 260.55 188.31 400.86 811.59 1,389.39 1,008.86

Total Floor Area (m2) 371.59 1,489.21 1,376.66 2,393.53 5,038.57 9,521.09 7,743.98

Constructed October 2003 November 1990 December 1993 July 1989 April 1992 May 2008 February 1998

Period-end occupancy rate(%) 100 100 100 100 100 100 97.94

Acquisition Price (mm yen) 640 1,675 1,314 1,434 4,798 2,930 2,310

Appraisal Price (mm yen) 507 1,377 1,280 1,410 6,250 4,648 2,850

Property Management

Company


Ltd.

MS Building Support

Co., Ltd.

MS Building Support

Co., Ltd.

MS Building Support

Co., Ltd.


Ltd.


Ltd.


Ltd.

PML (%) 11.1 9.2 5.5 10.9 11.7 10.6 7.5


Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

Operation days 183 183 183 183 183 183 183 183 183 183 183 183 183 183


Other income 1,189 1,122 2,873 2,610 3,738 8,887 4,214 4,341 9,063 8,690 35,973 37,819 13,866 16,536



PM fees 960 846 2,869 3,418 2,836 4,285 4,985 4,814 8,779 9,084 17,598 18,353 22,012 21,256

Public charges and taxes 759 756 3,671 3,676 2,104 2,105 2,566 2,558 8,930 8,937 11,797 11,788 11,180 11,184

Utilities 1,242 1,176 2,124 2,091 2,607 2,444 2,598 2,631 9,057 8,690 11,431 14,033 12,867 14,983

Maintenance and repair fees 53 185 1,325 1,330 255 4,943 1,086 865 1,996 846 1,224 2,684 3,773 1,436

Insurance fees 9 9 31 31 27 27 44 44 106 106 194 195 177 178

Trust fees 391 391 - - - - - - 1,148 1,148 441 441 324 324

Other expenses 8 10 182 152 439 436 4,174 4,080 94 230 760 700 702 643



③NOI (①－②) 9,321 9,881 28,163 27,286 27,706 27,654 33,696 36,667 179,758 180,453 124,278 122,134 82,562 88,456

Depreciation 2,313 2,313 4,490 4,491 4,926 4,971 7,264 7,349 8,804 8,860 29,887 29,033 18,229 12,772




36

Property Name

Of-28 MITA HEIWA

BUILDING

(leasehold land)

Of-29

SAKAE MINAMI

HEIWA BUILDING

Of-30

HF SAKURADORI

BUILDING

Of-31 HF NIHONBASHI

HAMACHO BUILDING

Of-32

HF SENDAI HONCHO

BUILDING

Of-33

HF UENO BUILDING

Of-34

KOJIMACHI HF

BUILDING

Address Minato-ku, Tokyo Nagoya City, Aichi Nagoya City, Aichi Chuo-ku, Tokyo Sendai City, Miyagi Taito-ku, Tokyo Chiyoda-ku, Tokyo

Lot Area (m2) 4,441.79 707.05 1,662.49 599.34 1,598.83 718.47 409.15

Total Floor Area (m2) － 3,959.12 13,160.83 4,226.25 8,988.49 6,212.84 3,314.53

Constructed － July 2002 February 2009 February 1987 September 2003 February 1990 March 1994

Period-end occupancy rate(%) 100 100 100 100 98.90 100 100


Appraisal Price (mm yen) 2,678 2,050 5,710 2,360 3,210 4,040 1,880

Property Management

Company－


Ltd.


Ltd.


Ltd.


Ltd.


Ltd.


Ltd.

PML (%) － 10.8 9.2 12.7 2.6 2.5 2.5


Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

Operation days 183 183 183 183 183 183 183 183 183 183 183 183 183 183


Other income - - 12,343 14,640 34,990 38,190 13,289 15,083 24,610 21,409 21,920 22,136 6,611 6,691



PM fees 300 300 12,267 13,184 35,587 36,633 8,890 9,037 18,616 18,381 15,254 14,439 6,990 6,195


Utilities - - 9,031 10,651 17,243 18,382 6,548 6,827 15,455 12,542 9,158 9,055 4,747 4,630

Maintenance and repair fees - - 990 1,183 1,413 1,080 2,683 5,360 1,566 1,871 7,887 2,394 549 970

Insurance fees - - 86 86 278 279 82 82 160 161 135 135 74 74

Trust fees 176 176 324 324 339 339 339 339 439 439 329 329 329 329

Other expenses - - 489 135 76,404 76,098 308 643 468 6,716 1,618 2,145 118 150



③NOI (①－②) 51,851 51,851 55,948 56,108 148,911 153,302 58,577 57,350 94,987 88,517 89,687 96,746 38,905 42,100

Depreciation - - 13,528 13,708 36,231 36,248 10,167 10,105 32,682 34,288 21,079 22,340 6,004 6,156




37

Property Name

Of-35

HF KUDAN MINAMI

BUILDING

Of-36 HF KANDA

OGAWAMACHI

BUILDING

Of-37

NISSO 5 BUILDING

Address Chiyoda-ku, Tokyo Chuo-ku, TokyoYokohama City,

Kanagawa

Lot Area (m2) 530.00 432.54 1,029.42

Total Floor Area (m2) 3,836.10 3,016.16 5,893.08

Constructed March 1991 March 2008 July 1987

Period-end occupancy rate(%) 100 100 100

Acquisition Price (mm yen) 2,720 3,150 3,100

Appraisal Price (mm yen) 3,140 3,870 3,330

Property Management

Company


Ltd.


Ltd.－

PML (%) 6.7 4.0 14.2


Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

Operation days 183 183 183 183 163 183

Rents and common expenses 85,410 85,410 61,564 86,687 70,892 79,433

Other income 9,578 10,251 7,068 9,837 3,962 4,440


(unit: thousand yen)94,989 95,662 68,632 96,525 74,854 83,873

PM fees 8,708 8,721 9,302 9,363 - 120

Public charges and taxes 9,756 9,770 - 10,403 4,406 8,812

Utilities 6,204 6,233 6,925 8,566 - -

Maintenance and repair fees 13,480 1,049 876 2,045 1,476 1,154

Insurance fees 78 79 45 47 112 113

Trust fees 339 339 414 414 296 329

Other expenses 620 783 1,777 1,617 300 14



③NOI (①－②) 55,801 68,685 49,291 64,066 68,263 73,328

Depreciation 10,240 10,711 7,602 7,664 15,805 15,833

Rental business profit 45,560 57,973 41,689 56,401 52,458 57,495



38

Property Name

Re-03

HF ICHIKAWA

RESIDENCE

Re-05

HF MEGURO

RESIDENCE

Re-09

HF KASAI

RESIDENCE

Re-11HF WAKABAYASHI-

KOEN RESIDENCE

Re-12

HF HIMONYA

RESIDENCE

Re-14

HF MINAMIAZABU

RESIDENCE

Re-15

HF AZABUJUBAN

RESIDENCE

Address Ichikawa City, Chiba Meguro-ku, Tokyo Edogawa-ku, Tokyo Setagaya-ku, Tokyo Meguro-ku, Tokyo Minato-ku, Tokyo Minato-ku, Tokyo

Lot Area (m2) 218.22 213.45 416.87 2,892.06 856.19 279.73 499.24

Total Floor Area (m2) 884.60 948.48 1,392.74 6,689.03 2,412.83 1,673.32 1,225.85

Constructed March 2003 April 2003 November 2002 February 2004 February 2004 April 2004 January 2005

Period-end occupancy rate (%) 100 90.88 100 99.11 96.67 98.34 96.20

Acquisition Price (mm yen) 430 660 650 3,610 1,560 1,370 1,260

Appraisal Price (mm yen) 518 662 728 4,022 1,591 1,316 1,190

Property Management Company Haseko Livenet, Inc.RA Asset Management

Inc. Haseko Livenet, Inc. Haseko Livenet, Inc.

Tokyu Housing Lease

Corp

RA Asset Management

Inc.Taisei Housy Property

PML (%) 6.2 6.2 8.8 6.7 6.4 3.6 12.8

Rental business balance(Note 1)

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

Operation days 183 183 183 183 183 183 183 183 183 183 183 183 183 183


Other income 32 - 633 578 2,225 1,268 10,256 11,290 2,653 2,453 1,529 1,489 1,662 2,426



PM fees 1,169 1,064 2,701 2,135 2,916 1,872 8,896 11,586 4,168 4,083 4,335 3,906 4,010 3,704

Public charges and taxes 718 715 989 982 1,224 1,214 6,452 6,398 2,535 2,544 1,923 1,918 1,818 1,805

Utilities 195 195 240 229 261 237 1,079 1,048 356 325 320 306 239 208

Maintenance and repair fees 188 167 838 303 12,827 532 3,590 3,090 11,387 1,228 777 1,193 993 578

Insurance fees 13 13 15 15 19 19 116 117 38 38 26 27 27 27

Trust fees 577 577 603 603 603 603 879 879 655 655 631 631 629 879

Other expenses 135 110 89 1,192 236 219 639 716 181 176 100 192 113 130



③NOI (①－②) 14,314 14,435 14,291 14,583 6,045 19,395 90,376 92,800 26,210 36,543 28,318 28,734 22,654 24,890

Depreciation 2,857 2,921 3,702 3,701 4,322 4,505 23,703 24,155 7,763 7,944 5,492 5,489 9,017 9,047


Ⅲ-9 Portfolio Overview and Performance (Residence)

(Note1) Figures for rental business balance are the actual numbers for each period where values below 1,000 yen are rounded off

39

Property Name

Re-16 HF

GAKUGEIDAIGAKU

RESIDENCE

Re-17

HF HIGASHIKANDA

RESIDENCE

Re-18 HF

HIGASHINIHONBA

SHI RESIDENCE

Re-19

HF NERIMA

RESIDENCE

Re-20 HF

SHIROKANETAKANA

WA RESIDENCE

Re-21

HF MEIDAIMAE

RESIDENCE

Re-22

HF NIHONBASHI

RESIDENCE

Address Meguro-ku, Tokyo Chiyoda-ku, Tokyo Chuo-ku, Tokyo Nerima-ku, Tokyo Minato-ku, Tokyo Setagaya-ku, Tokyo Chuo-ku, Tokyo

Lot Area (m2) 268.70 262.07 312.76 368.67 922.21 485.01 222.40


Constructed March 2005 June 2005 June 2005 May 2005 August 2005 June 2005 May 2005

Period-end occupancy rate (%) 96.93 96.91 100 94.24 98.14 96.11 100

Acquisition Price (mm yen) 1,000 1,100 1,210 690 4,030 1,070 1,130

Appraisal Price (mm yen) 941 1,300 1,500 767 4,370 958 1,070

Property Management CompanyTokyu Housing Lease

Corp.Haseko Livenet, Inc.

Apamanshop Sublease

Co., Ltd.

Apamanshop Sublease

Co., Ltd.Taisei Housy Property Haseko Livenet, Inc. Haseko Livenet, Inc.

PML (%) 9.8 5.7 10.0 5.5 3.9 6.0 3.3


29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

Operation days 183 183 183 183 183 183 183 183 183 183 183 183 183 183


Other income 956 437 2,105 1,897 1,309 1,888 1,033 995 6,665 7,788 1,488 1,229 1,375 804



PM fees 3,078 1,921 3,609 4,085 3,032 2,698 2,619 2,131 11,963 11,784 3,401 3,290 3,042 4,216


Utilities 264 246 274 241 338 325 243 222 903 882 270 258 426 412

Maintenance and repair fees 1,484 1,414 1,210 2,723 796 808 551 541 3,531 4,375 680 678 476 1,485

Insurance fees 25 25 30 30 39 40 23 23 110 111 27 27 30 30

Trust fees 426 426 426 426 426 426 376 376 - - - - 752 504

Other expenses 190 48 50 38 - - 7 3 890 702 268 248 374 266



③NOI (①－②) 17,450 20,339 28,975 26,181 34,355 35,425 18,995 19,675 87,103 90,457 22,372 22,785 26,464 22,898

Depreciation 5,065 5,056 10,236 10,261 10,998 11,001 6,478 6,493 22,360 22,457 5,157 5,182 4,958 4,979


(Note1) Figures for rental business balance are the actual numbers for each period where values below 1,000 yen are rounded off


40

Property Name

Re-23

HF KAMISHAKUJII

RESIDENCE

Re-24

HF KINSHICHO

RESIDENCE

Re-25

HF GINZA

RESIDENCE EAST

Re-26

HF SHIN-YOKOHAMA

RESIDENCE

Re-29

HF HAKUSAN

RESIDENCE

Re-30

HF MAGOME

RESIDENCE

Re-31 HF

GAKUGEIDAIGAKU

RESIDENCE II

Address Nerima-ku, Tokyo Sumida-ku, Tokyo Chuo-ku, TokyoYokohama City,

Kanagawa Bunkyo-ku, Tokyo Ota-ku, Tokyo Meguro-ku, Tokyo

Lot Area (m2) 536.09 256.23 822.01 805.00 1,390.68 2,357.97 847.14


Constructed May 2006 March 2005 March 2005 September 2006 January 2000 August 2001 January 2005

Period-end occupancy rate (%) 100 90.72 97.16 98.48 100 97.09 100

Acquisition Price (mm yen) 950 1,100 5,940 3,350 2,350 1,630 1,650

Appraisal Price (mm yen) 977 1,110 4,780 2,640 1,840 1,330 1,210

Property Management Company Haseko Livenet, Inc. Haseko Livenet, Inc. Haseko Livenet, Inc. Haseko Livenet, Inc. Haseko Livenet, Inc. Haseko Livenet, Inc. Haseko Livenet, Inc.

PML (%) 6.2 10.1 5.7 13.2 4.4 4.6 14.6


29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

Operation days 183 183 183 183 183 183 183 183 183 183 183 183 183 183


Other income 2,072 1,836 1,146 1,159 10,927 8,881 6,798 4,964 4,196 2,552 5,361 4,447 1,142 1,660



PM fees 3,901 3,255 3,870 3,777 12,907 8,713 8,884 7,188 5,474 5,486 4,982 4,398 3,768 3,637


Utilities 307 297 332 297 1,086 1,008 406 371 485 468 412 390 254 229

Maintenance and repair fees 1,115 1,463 1,304 1,989 3,818 3,554 1,789 2,694 885 2,962 2,773 2,057 952 442

Insurance fees 34 34 30 30 120 120 92 92 68 68 60 60 33 34

Trust fees - - - - 1,750 1,670 - - - - - - 1,061 1,013

Other expenses - - 152 19 280 138 907 942 362 127 176 56 207 154



③NOI (①－②) 23,695 24,910 24,545 23,311 100,231 105,216 67,423 67,195 44,936 41,008 29,834 31,226 23,632 27,244

Depreciation 6,310 6,310 5,233 5,263 27,166 27,348 19,308 19,332 14,600 14,831 12,315 12,469 6,522 6,528


(Note 1) Figures for rental business balance are the actual numbers for each period where values below 1,000 yen are rounded off.


41

Property Name

Re-33

HF KAMEIDO

RESIDENCE

Re-34

HF TANASHI

RESIDENCE

Re-36

HF SHIBA-KOEN

RESIDENCE

Re-36

HF MITA

RESIDENCE

Re-37 HF

TAKANAWA

RESIDENCE

Re-38

La Residence de

Shirokanedai

Re-39

HF GINZA

RESIDENCE EAST Ⅱ

Address Koto-ku, TokyoNishitokyo City,

TokyoMinato-ku, Tokyo Minato-ku, Tokyo Minato-ku, Tokyo Minato-ku, Tokyo Chuo-ku, Tokyo

Lot Area (m2) 246.34 1,639.65 311.02 303.10 432.36 344.25 368.35


Constructed January 2008 March 1989 August 2003 March 2004 February 2003 February 2004 February 1999

Period-end occupancy rate (%) 100 85.44 94.55 97.94 100 96.39 100

Acquisition Price (mm yen) 1,050 911 836 1,080 749 730 1,460

Appraisal Price (mm yen) 1,080 765 838 1,210 857 860 1,640

Property Management Company Haseko Livenet, Inc. Haseko Livenet, Inc. Haseko Livenet, Inc. Haseko Livenet, Inc.Apamanshop Sublease

Co., Ltd.Tokyu Housing Lease Corp

Apamanshop Sublease

Co., Ltd.

PML (%) 7.6 8.6 7.8 2.6 1.5 3.3 6.9


29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

Operation days 183 183 183 183 183 183 183 183 183 183 183 183 183 183


Other income 5,109 4 2,311 1,363 1,750 1,101 1,434 901 1,065 573 1,617 420 2,424 2,480



PM fees 4,665 2,134 3,703 3,907 2,441 2,707 4,255 4,910 3,493 3,017 3,754 3,431 5,436 4,642


Utilities 349 339 354 329 452 435 414 388 35 - - - 404 380

Maintenance and repair fees 222 281 862 3,539 885 10,355 2,501 2,019 821 153 832 1,457 1,078 348

Insurance fees 34 34 52 52 28 28 34 34 24 24 22 22 43 43

Trust fees - - - - 397 397 397 397 447 447 404 404 457 457

Other expenses 758 368 - 64 861 346 957 645 441 161 - 80 65 -



③NOI (①－②) 29,083 26,850 24,776 18,666 19,151 7,931 23,817 22,197 17,224 18,832 20,700 18,123 40,834 43,508

Depreciation 6,010 6,010 10,139 10,217 4,637 4,436 5,797 5,572 4,717 4,568 2,874 2,717 9,195 9,115




42

Property Name

Re-40

HF HATCHOBORI

RESIDENCE Ⅱ

Re-41

HF HATCHOBORI

RESIDENCE Ⅲ

Re-42

HF GINZA

RESIDENCE

Re-43 HF

KOMAZAWA-KOEN

RESIDENCE TOWER

Re-44

HF UMEDA

RESIDENCE TOWER

Re-45

HF NAKANOSHIMA

RESIDENCE

Re-46

HF AWAZA

RESIDENCE

Address Chuo-ku, Tokyo Chuo-ku, Tokyo Chuo-ku, Tokyo Setagaya-ku, Tokyo Osaka City, Osaka Osaka City, Osaka Osaka City, Osaka

Lot Area (m2) 427.32 203.98 175.16 2,425.44 631.79 375.95 296.88


Constructed January 2002 January 2004 July 2004 January 2001 August 2003 June 2001 March 2002

Period-end occupancy rate (%) 100 97.37 100 97.25 97.32 97.96 98.32

Acquisition Price (mm yen) 1,890 793 944 6,520 1,920 453 577

Appraisal Price (mm yen) 2,100 967 1,130 6,950 2,070 494 692

Property Management CompanyApamanshop Sublease

Co., Ltd.Nihon Housing Co., Ltd.

RA Asset Management

Inc. Apamanshop Sublease

Co., Ltd.

Apamanshop Sublease

Co., Ltd.Haseko Livenet, Inc.

Apamanshop Sublease

Co., Ltd.

PML (%) 6.0 3.2 3.0 2.7 6.2 8.6 6.0


29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

Operation days 183 183 183 183 183 183 183 183 183 183 183 183 183 183


Other income 3,328 3,033 1,454 2,083 1,879 780 9,387 10,318 1,765 1,413 1,004 719 631 590



PM fees 7,755 5,961 3,361 2,918 2,678 3,042 26,454 26,260 11,868 11,691 3,041 2,620 2,840 2,927


Utilities 608 582 353 334 407 374 3,287 2,951 2,181 2,025 378 350 - 51

Maintenance and repair fees 2,913 2,184 853 1,478 457 261 10,665 9,565 2,484 24,080 1,467 288 734 749

Insurance fees 60 61 33 33 25 25 305 206 121 121 28 28 36 36

Trust fees 450 450 372 372 447 447 581 581 502 502 450 450 451 451

Other expenses 50 - 238 238 386 37 2,007 1,782 559 343 329 248 20 60



③NOI (①－②) 46,320 50,194 21,533 22,422 27,096 26,969 151,935 155,670 53,848 33,324 12,798 14,464 18,894 18,404

Depreciation 13,807 13,939 7,096 6,848 8,756 8,837 35,218 36,006 23,322 22,562 5,003 5,212 6,631 6,697




43

Property Name

Re-47

HF MARUNOUCHI

RESIDENCE

Re-48

HF HIRAO

RESIDENCE

Re-49

HF KAWARAMACHI

NIJO RESIDENCE

Re-52

HF TENJIN-HIGASHI

RESIDENCE

Re-53 HF SHIJO

KAWARAMACHI

RESIDENCE

Re-54

La Residence de

Sendagi

Re-55

HF SENDAGI

RESIDENCE

Address Nagoya City, Aichi Fukuoka City,

Fukuoka Kyoto City, Kyoto

Fukuoka City,

Fukuoka Kyoto City, Kyoto Bunkyo-ku, Tokyo Bunkyo-ku, Tokyo

Lot Area (m2) 545.08 1,599.97 206.84 429.63 863.39 269.15 249.06


Constructed February 2004 March 2003 February 2005 August 2005 March 2007 February 2006 February 2006

Period-end occupancy rate (%) 93.04 98.95 96.41 97.40 97.54 98.19 93.97

Acquisition Price (mm yen) 624 1,780 534 502 1,820 820 870

Appraisal Price (mm yen) 710 1,960 567 611 2,210 940 1,010


Co., Ltd.

Apamanshop Sublease

Co., Ltd.

Apamanshop Sublease

Co., Ltd.

Apamanshop Sublease

Co., Ltd.

Apamanshop Sublease

Co., Ltd.

Apamanshop Sublease

Co., Ltd.

Apamanshop Sublease

Co., Ltd.

PML (%) 16.5 3.4 6.5 5.3 5.5 4.4 9.2


29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

Operation days 183 183 183 183 183 183 183 183 183 183 183 183 183 183


Other income 1,365 1,270 5,468 5,457 1,135 717 2,083 1,951 6,141 5,729 278 79 145 -



PM fees 2,783 3,117 8,506 8,417 2,703 2,926 3,198 2,842 6,532 6,243 2,823 3,498 3,100 3,751


Utilities 49 9 1,867 1,901 478 469 806 799 2,297 2,222 - - - -

Maintenance and repair fees 821 1,891 2,406 3,283 847 582 616 1,987 1,677 3,590 165 243 202 543

Insurance fees 37 38 119 119 24 24 37 38 88 88 19 19 26 26

Trust fees 452 452 527 527 450 450 452 452 650 650 570 422 570 422

Other expenses 106 87 435 461 506 385 40 368 1,385 1,470 28 100 26 -



③NOI (①－②) 21,466 19,621 59,067 57,038 13,664 13,335 18,616 17,274 57,655 55,991 23,950 22,742 26,426 24,553

Depreciation 7,508 6,826 20,690 20,653 3,530 3,342 5,602 5,240 10,213 9,214 3,023 3,028 3,540 3,540




44

Property Name

Re-56 HF

KOMAZAWA-KOEN

RESIDENCE

Re-57 HF

MUSASHIKOYAMA

RESIDENCE

Re-58

HF KOKUBUNJI

RESIDENCE

Re-59

HF HISAYAODORI

RESIDENCE

Re-60 HF KARASUMA

KURAMAGUCHI

RESIDENCE

Re-61 HF

NISHI-SHINJUKU

RESIDENCE WEST

Re-62

HF NISHI-SHINJUKU

RESIDENCE EAST

Address Setagaya-ku, TokyoShinagawa-ku,

Tokyo

Kokubunji City,

TokyoNagoya City, Aichi Kyoto City, Kyoto Shinjuku-ku, Tokyo Shinjuku-ku, Tokyo

Lot Area (m2) 709.54 455.93 257.06 362.02 471.10 575.67 347.29


Constructed July 2006 November 2006 January 2006 March 2006 March 2007 March 2006 March 2006

Period-end occupancy rate (%) 100 92.85 98.11 98.02 95.95 97.50 93.48

Acquisition Price (mm yen) 615 842 839 1,080 572 1,990 1,170

Appraisal Price (mm yen) 680 1,050 1,000 1,230 655 2,450 1,410


Co., Ltd.

Apamanshop Sublease

Co., Ltd.Nihon Housing Co., Ltd.

Apamanshop Sublease

Co., Ltd.

Apamanshop Sublease

Co., Ltd.

Apamanshop Sublease

Co., Ltd.

Apamanshop Sublease

Co., Ltd.

PML (%) 4.3 6.3 6.3 9.3 9.9 4.6 3.5


29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

Operation days 183 183 183 183 183 183 183 183 183 183 183 183 183 183


Other income 840 981 1,536 1,110 1,320 1,557 1,478 870 1,081 987 3,215 3,020 1,879 1,663



PM fees 2,179 2,405 3,472 3,764 2,681 3,259 4,742 4,285 2,417 2,250 8,611 8,951 5,054 5,562


Utilities 239 213 246 230 245 212 349 444 575 568 15 9 11 4

Maintenance and repair fees 1,252 1,070 1,372 785 1,713 1,271 2,262 1,372 138 557 2,087 1,390 1,040 761

Insurance fees 20 20 25 25 25 25 58 58 24 24 57 57 35 35

Trust fees 650 565 650 650 600 538 750 693 650 650 750 750 600 600

Other expenses 86 66 159 179 320 51 695 876 426 450 357 509 259 296



③NOI (①－②) 15,197 15,185 23,609 22,901 23,316 23,222 31,890 33,962 16,290 15,784 53,633 50,815 32,896 30,692

Depreciation 3,402 3,445 3,182 3,025 3,818 3,870 6,579 6,570 2,938 2,828 6,990 6,684 4,438 4,256




45

Property Name

Re-63 HF HIGASHI-

SHINJUKU

RESIDENCE

Re-64 HF HIGASHI-

SHINSAIBASHI

RESIDENCE

Re-65

HF KITA-YOBANCHO

RESIDENCE

Re-66

HF ATAGOBASHI

RESIDENCE

Re-67 HF

KYUDAIBYOINMAE

RESIDENCE

Re-68

HF ASAKUSABASHI

RESIDENCE

Re-69

HF ICHIBANCHO

RESIDENCE

Address Shinjuku-ku, Tokyo Osaka City, Osaka Sendai City, Miyagi Sendai City, Miyagi Fukuoka City,

Fukuoka Taito-ku, Tokyo Sendai City, Miyagi

Lot Area (m2) 313.96 343.80 475.70 717.53 400.00 267.42 398.14


Constructed March 2007 September 2006 January 2007 January 2007 January 2007 September 2006 February 2007

Period-end occupancy rate (%) 98.62 100 94.45 97.50 98.37 97.44 95.83

Acquisition Price (mm yen) 1,360 566 809 684 426 771 834

Appraisal Price (mm yen) 1,570 650 1,060 872 494 918 1,070


Co., Ltd.

Apamanshop Sublease

Co., Ltd.

Apamanshop Sublease

Co., Ltd.

Apamanshop Sublease

Co., Ltd.

Apamanshop Sublease

Co., Ltd.

Apamanshop Sublease

Co., Ltd.

Apamanshop Sublease

Co., Ltd.

PML (%) 2.6 10.3 1.0 1.0 1.0 6.3 1.1


29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

Operation days 183 183 183 183 183 183 183 183 183 183 183 183 183 183


Other income 1,258 1,087 158 85 2,327 1,490 2,410 1,990 769 806 662 883 3,483 2,276



PM fees 7,394 7,488 2,739 2,456 5,858 4,539 4,052 3,367 1,992 2,888 2,668 2,664 5,319 4,097


Utilities 11 4 16 - 6 - 6 - 286 271 6 - 6 -

Maintenance and repair fees 928 876 1,002 1,588 1,330 1,403 883 1,343 619 111 540 459 1,387 893

Insurance fees 40 40 22 22 47 47 45 45 28 28 27 27 45 45

Trust fees 600 600 600 600 600 600 600 600 650 650 600 600 600 600

Other expenses 410 54 235 410 426 3 424 - 470 363 55 58 438 -



③NOI (①－②) 35,112 35,002 15,556 14,896 30,657 32,371 25,529 27,076 13,365 12,426 20,782 21,328 31,950 33,483

Depreciation 6,572 6,028 2,659 2,613 6,266 6,005 5,876 5,528 3,734 3,591 3,269 3,054 5,284 5,018




46

Property Name

Re-70

HF HIGASHI-NAKANO

RESIDENCE

Re-72

HF WASEDA

RESIDENCE

Re-73

HF WASEDA

RESIDENCE Ⅱ

Re-74

HF WAKAMATSU-

KAWADA RESIDENCE

Re-75

HF SENDAI

RESIDENCE EAST

Re-76

HF NISHI-KOEN

RESIDENCE

Re-77

HF BANSUI-DORI

RESIDENCE

Address Nakano-ku, Tokyo Shinjuku-ku, Tokyo Shinjuku-ku, Tokyo Shinjuku-ku, Tokyo Sendai City, Miyagi Sendai City, Miyagi Sendai City, Miyagi

Lot Area (m2) 538.53 820.34 319.83 412.42 1,133.00 733.98 401.19


Constructed February 2007 May 2007 May 2007 February 2004 July 2008 February 2006 March 2006

Period-end occupancy rate (%) 98.86 98.59 97.94 100 96.97 90.17 86.36

Acquisition Price (mm yen) 942 2,090 872 1,158 1,638 1,310 790

Appraisal Price (mm yen) 1,050 2,430 1,010 1,440 1,810 1,430 882

Property Management Company Nihon Housing Co., Ltd. Haseko Livenet, Inc. Haseko Livenet, Inc.Tokyu Housing Lease

CorpApamanshop Sublease

Co., Ltd.Taisei Housy Property Taisei Housy Property

PML (%) 3.0 4.0 3.6 5.0 1.8 2.7 1.7


29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

Operation days 183 183 183 183 183 183 183 183 183 183 183 183 183 183


Other income 1,080 1,626 5,201 3,678 1,601 1,527 3,575 3,828 4,060 3,344 3,091 2,907 1,287 1,410



PM fees 3,181 3,805 12,719 12,517 5,523 5,976 3,857 3,921 4,516 4,412 3,967 4,225 1,763 2,546

Public charges and taxes 1,647 1,642 3,328 3,309 1,368 1,360 1,872 1,867 4,045 4,025 1,280 2,561 887 1,775

Utilities 279 260 664 626 350 339 325 299 715 697 559 376 368 267

Maintenance and repair fees 1,398 954 2,817 2,475 1,811 1,279 329 614 701 356 2,737 4,325 889 3,322

Insurance fees 29 29 65 65 26 26 34 35 80 80 39 40 25 25

Trust fees 650 650 850 850 650 650 440 440 331 331 416 416 416 416

Other expenses 408 32 1,052 1,521 549 932 551 435 76 - 502 750 223 60



③NOI (①－②) 22,244 23,369 54,598 53,584 19,626 20,841 30,946 31,376 52,933 54,676 33,466 31,544 24,847 19,987

Depreciation 4,066 3,853 8,023 8,037 3,372 3,380 6,299 6,382 16,039 16,058 12,115 12,223 7,188 7,282




47

Property Name

Re-78

HF KANNAI

RESIDENCE

Re-05

HF MEIEKI-KITA

RESIDENCE

Re-09 HF HIGASHI-

SAPPORO

RESIDENCE

AddressYokohama City,

KanagawaNagoya City, Aichi

Sapporo City,

Hokkaido

Lot Area (m2) 435.27 939.72 2,134.95

Total Floor Area (m2) 2,963.30 4,692.26 7,161.70

Constructed November 2006 August 2007 March 2008

Period-end occupancy rate (%) 93.20 99.03 95.17

Acquisition Price (mm yen) 1,800 2,160 1,560

Appraisal Price (mm yen) 1,960 2,260 1,650

Property Management Company Haseko Livenet, Inc. Taisei Housy PropertyApamanshop Sublease

Co., Ltd.

PML (%) 2.5 (W)12.8 (E)12.9 0.1

Rental business balance

(Note 1)

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

29th Fiscal

Period

30th Fiscal

Period

Operation days 166 183 166 183 166 183

Rents and common expenses 50,463 55,702 51,607 58,254 47,688 54,691

Other income 5,827 5,767 5,022 6,299 5,102 5,452



PM fees 5,417 4,888 4,716 6,751 5,675 4,177

Public charges and taxes 1,597 3,195 1,837 3,673 2,684 5,364

Utilities 798 772 1,238 1,245 2,354 624

Maintenance and repair fees 1,734 2,611 710 1,604 2,253 2,052

Insurance fees 51 51 58 59 67 67

Trust fees 358 391 292 320 312 340

Other expenses 207 450 1,218 1,271 312 269



③NOI (①－②) 46,125 49,107 46,556 49,626 39,130 47,246

Depreciation 11,916 12,082 12,976 13,090 12,851 12,858

Rental business profit 34,209 37,025 33,579 36,535 26,279 34,388



48

Ⅲ-10 Historical Appraisal Values

30th FP 29th FP Change 30th FP Change 30th FP Change 30th FP Change 30th FP 29th FP Change 30th FP Change 30th FP Change 30th FP Change

Of-01 HF GOTANDA BUILDING 1,377 1,356 21 4.4% -0.1% 4.4% -0.1% 4.6% -0.1% 1,323 53 Re-31 HF GAKUGEIDAIGAKU RESIDENCE Ⅱ 1,210 1,180 30 4.2% -0.1% 4.0% -0.1% 4.4% -0.1% 1,578 -368

Of-05 SUITENGU HEIWA BUILDING 1,398 1,378 20 4.4% -0.1% 4.4% -0.1% 4.6% -0.1% 1,436 -38 Re-33 HF KAMEIDO RESIDENCE 1,080 1,080 0 4.4% 0.0% 4.4% 0.0% 4.6% 0.0% 1,018 61

Of-06 HF MONZENNAKACHO BUILDING 2,520 2,510 10 4.6% 0.0% 4.6% 0.0% 4.8% 0.0% 2,340 179 Re-34 HF TANASHI RESIDENCE 765 758 7 5.0% 0.0% 5.0% 0.0% 5.1% 0.0% 945 -180

Of-07 HF HAMAMATSUCHO BUILDING 1,550 1,510 40 4.1% 0.0% 4.1% 0.0% 4.2% 0.0% 1,543 6 Re-35 HF SHIBA-KOEN RESIDENCE 838 823 15 4.4% -0.1% 4.2% -0.1% 4.6% -0.1% 815 22

Of-08 KOKUSAI TAMEIKE BUILDING 2,640 2,640 0 4.0% 0.0% 4.0% 0.0% 4.1% 0.0% 2,774 -134 Re-36 HF MITA RESIDENCE 1,210 1,190 20 4.4% -0.1% 4.2% -0.1% 4.6% -0.1% 1,027 182

Of-09 GRACE BUILDING SENGAKUJIMAE 1,640 1,590 50 4.7% -0.1% 4.7% -0.1% 5.0% -0.1% 1,152 487 Re-37 HF TAKANAWA RESIDENCE 857 838 19 4.2% -0.1% 4.0% -0.1% 4.4% -0.1% 729 127

Of-10 HF SHIN-YOKOHAMA BUILDING 1,100 1,090 10 5.0% 0.0% 5.0% 0.0% 5.1% 0.0% 1,358 -258 Re-38 La Residence de Shirokanedai 860 848 12 4.3% -0.1% 4.1% -0.1% 4.5% -0.1% 697 162

Of-11 NIHONBASHI DAIICHI BUILDING 1,910 1,900 10 4.2% 0.0% 4.2% 0.0% 4.3% 0.0% 2,216 -306 Re-39 HF GINZA RESIDENCE EAST Ⅱ 1,640 1,600 40 4.4% -0.1% 4.2% -0.1% 4.6% -0.1% 1,417 222

Of-12 HF HATCHOBORI BUILDING *1 2,460 2,460 0 3.9% 0.0% 3.9% 0.0% 4.0% 0.0% 3,101 -641 Re-40 HF HATCHOBORI RESIDENCE Ⅱ 2,100 2,060 40 4.3% -0.1% 4.1% -0.1% 4.5% -0.1% 1,825 274

Of-13 SHIBUYA AX HILLS *4 - 1,500 - - - - - - - - - Re-41 HF HATCHOBORI RESIDENCE Ⅲ 967 945 22 4.3% -0.1% 4.1% -0.1% 4.5% -0.1% 725 241

Of-15 HF NAKAMEGURO BUILDING *5 2,134 2,180 - - - - - - - 2,134 - Re-42 HF GINZA RESIDENCE 1,130 1,110 20 4.2% -0.1% 4.0% -0.1% 4.4% -0.1% 852 277

Of-16 ANWA TSUKASAMACHI BUILDING 1,200 1,180 20 4.3% -0.1% 4.1% -0.1% 4.5% -0.1% 1,287 -87 Re-43 HF KOMAZAWA-KOEN RESIDENCE TOWER 6,950 6,860 90 4.4% -0.1% 4.2% -0.1% 4.6% -0.1% 6,521 428

Of-17 HATCHOBORI MF BUILDING 988 981 7 4.1% 0.0% 4.1% 0.0% 4.2% 0.0% 1,116 -128 Re-44 HF UMEDA RESIDENCE TOWER 2,070 2,050 20 5.0% -0.1% 4.8% -0.1% 5.2% -0.1% 1,785 284

Of-18 M2 HARAJUKU *2 4,702 4,666 36 3.7% -0.1% 3.7% -0.1% 3.9% -0.1% 3,465 1,236 Re-45 HF NAKANOSHIMA RESIDENCE 494 490 4 5.1% -0.1% 4.9% -0.1% 5.3% -0.1% 449 44

Of-20 FUNABASHI FACE BUILDING 3,170 3,160 10 5.1% 0.0% 4.9% 0.0% 5.3% 0.0% 3,576 -406 Re-46 HF AWAZA RESIDENCE 692 680 12 5.1% -0.1% 4.9% -0.1% 5.3% -0.1% 536 155

Of-21 ADESSO NISHIAZABU 507 490 17 3.9% 0.0% 3.9% 0.0% 4.1% 0.0% 616 -109 Re-47 HF MARUNOUCHI RESIDENCE 710 698 12 5.2% -0.1% 5.0% -0.1% 5.4% -0.1% 548 161

Of-22 HF TORANOMON BUILDING 1,377 1,357 20 4.0% -0.1% 3.7% -0.1% 4.2% -0.1% 1,715 -338 Re-48 HF HIRAO RESIDENCE 1,960 1,930 30 5.3% -0.1% 5.1% -0.1% 5.5% -0.1% 1,693 266

Of-23 HF IKEBUKURO BUILDING 1,280 1,240 40 4.3% -0.1% 4.1% -0.1% 4.5% -0.1% 1,317 -37 Re-49 HF KAWARAMACHI NIJO RESIDENCE 567 557 10 5.1% -0.1% 4.9% -0.1% 5.3% -0.1% 499 67

Of-24 HF YUSHIMA BUILDING 1,410 1,420 -10 4.5% 0.0% 4.5% 0.0% 4.7% 0.0% 1,450 -40 Re-52 HF TENJIN-HIGASHI RESIDENCE 611 599 12 5.3% -0.1% 5.1% -0.1% 5.5% -0.1% 432 178

Of-25 KAYABACHO HEIWA BUILDING 6,250 6,130 120 5.0% -0.1% 5.0% -0.1% 5.1% -0.1% 4,787 1,462 Re-53 HF SHIJO KAWARAMACHI RESIDENCE 2,210 2,160 50 4.9% -0.1% 4.7% -0.1% 5.1% -0.1% 1,688 521

Of-26 HIROKOJI AQUA PLACE 4,648 4,574 74 5.1% -0.1% 5.3% -0.1% 5.3% -0.1% 2,744 1,903 Re-54 La Residence de Sendagi 940 922 18 4.7% -0.1% 4.5% -0.1% 4.9% -0.1% 782 157

Of-27 KOBE KYUKYORYUCHI HEIWA BUILDING 2,850 2,780 70 5.2% -0.1% 5.0% -0.1% 5.4% -0.1% 2,277 572 Re-55 HF SENDAGI RESIDENCE 1,010 987 23 4.8% -0.1% 4.6% -0.1% 5.0% -0.1% 825 184

Of-28 MITA HEIWA BUILDING （leasehold land） 2,678 2,678 0 3.7% 0.0% 4.2% 0.0% 3.9% 0.0% 2,269 408 Re-56 HF KOMAZAWA-KOEN RESIDENCE 680 663 17 4.6% -0.1% 4.4% -0.1% 4.8% -0.1% 581 98

Of-29 SAKAE MINAMI HEIWA BUILDING 2,050 1,960 90 5.1% -0.1% 4.9% -0.1% 5.3% -0.1% 1,511 538 Re-57 HF MUSASHIKOYAMA RESIDENCE 1,050 1,040 10 4.6% -0.1% 4.4% -0.1% 4.8% -0.1% 802 247

Of-30 HF SAKURADORI BUILDING 5,710 5,650 60 4.8% -0.1% 4.6% -0.1% 5.0% -0.1% 4,730 979 Re-58 HF KOKUBUNJI RESIDENCE 1,000 936 64 4.9% -0.1% 4.7% -0.1% 5.1% -0.1% 795 204

Of-31 HF NIHONBASHI HAMACHO BUILDING 2,360 2,290 70 4.5% -0.1% 4.3% -0.1% 4.7% -0.1% 1,925 434 Re-59 HF HISAYAODORI RESIDENCE 1,230 1,210 20 5.0% -0.1% 4.8% -0.1% 5.2% -0.1% 1,017 212

Of-32 HF SENDAI HONCHO BUILDING 3,210 3,160 50 5.3% -0.1% 5.1% -0.1% 5.5% -0.1% 2,768 441 Re-60 HF KARASUMA KURAMAGUCHI RESIDENCE 655 645 10 5.2% -0.1% 5.0% -0.1% 5.4% -0.1% 534 120

Of-33 HF UENO BUILDING 4,040 4,010 30 4.4% -0.1% 4.2% -0.1% 4.6% -0.1% 3,516 523 Re-61 HF NISHI-SHINJUKU RESIDENCE WEST 2,450 2,370 80 4.5% -0.1% 4.3% -0.1% 4.7% -0.1% 1,974 475

Of-34 KOJIMACHI　HF BUILDING 1,880 1,870 10 3.9% -0.1% 3.7% -0.1% 4.1% -0.1% 1,364 515 Re-62 HF NISHI-SHINJUKU RESIDENCE EAST 1,410 1,360 50 4.5% -0.1% 4.3% -0.1% 4.7% -0.1% 1,159 250

Of-35 HF KUDAN MINAMI BUILDING 3,140 3,070 70 4.0% -0.1% 3.8% -0.1% 4.2% -0.1% 2,754 385 Re-63 HF HIGASHI-SHINJUKU RESIDENCE 1,570 1,530 40 4.6% -0.1% 4.4% -0.1% 4.8% -0.1% 1,283 286

Of-36 HF KANDA OGAWAMACHI BUILDING 3,870 3,760 110 3.8% -0.1% 3.6% -0.1% 4.0% -0.1% 3,270 599 Re-64 HF HIGASHI-SHINSAIBASHI RESIDENCE 650 640 10 4.9% -0.1% 4.7% -0.1% 5.1% -0.1% 536 113

Of-36 NISSO 5 BUILDING 3,330 3,350 -20 4.1% 0.0% 3.9% 0.0% 4.3% 0.0% 3,201 128 Re-65 HF KITA-YOBANCHO RESIDENCE 1,060 1,050 10 5.1% -0.1% 4.9% -0.1% 5.3% -0.1% 741 318

79,379 79,890 71,050 8,329 Re-66 HF ATAGOBASHI RESIDENCE 872 855 17 5.3% -0.1% 5.1% -0.1% 5.5% -0.1% 609 262

Re-03 HF ICHIKAWA RESIDENCE 518 518 0 5.1% 0.0% 4.9% 0.0% 5.4% 0.0% 386 131 Re-67 HF KYUDAIBYOINMAE RESIDENCE 494 485 9 5.1% -0.1% 4.9% -0.1% 5.3% -0.1% 389 104

Re-05 HF MEGURO RESIDENCE 662 662 0 4.2% 0.0% 4.1% 0.0% 4.4% 0.0% 635 26 Re-68 HF ASAKUSABASHI RESIDENCE 918 900 18 4.6% -0.1% 4.4% -0.1% 4.8% -0.1% 729 188

Re-09 HF KASAI RESIDENCE 728 714 14 4.8% 0.0% 4.6% 0.0% 5.0% 0.0% 596 131 Re-69 HF ICHIBANCHO RESIDENCE 1,070 1,050 20 5.1% -0.1% 4.9% -0.1% 5.3% -0.1% 765 304

Re-11 HF WAKABAYASHI－KOEN RESIDENCE 4,022 4,022 0 4.3% 0.0% 4.3% 0.0% 4.5% 0.0% 3,183 838 Re-70 HF HIGASHI-NAKANO RESIDENCE 1,050 1,030 20 4.6% -0.1% 4.4% -0.1% 4.8% -0.1% 894 155

Re-12 HF HIMONYA RESIDENCE 1,591 1,590 1 4.3% 0.0% 4.3% 0.0% 4.5% 0.0% 1,448 142 Re-72 HF WASEDA RESIDENCE 2,430 2,380 50 4.3% -0.1% 4.1% -0.1% 4.5% -0.1% 1,996 433

Re-14 HF MINAMIAZABU RESIDENCE 1,316 1,308 8 4.2% 0.0% 4.2% 0.0% 4.4% 0.0% 1,298 17 Re-73 HF WASEDA RESIDENCE Ⅱ 1,010 987 23 4.3% -0.1% 4.1% -0.1% 4.5% -0.1% 834 175

Re-15 HF AZABUJUBAN RESIDENCE 1,190 1,140 50 4.4% -0.1% 4.2% -0.1% 4.6% -0.1% 1,150 39 Re-74 HF WAKAMATSUKAWADA RESIDENCE 1,440 1,390 50 4.2% -0.1% 4.0% -0.1% 4.4% -0.1% 1,186 253

Re-16 HF GAKUGEIDAIGAKU RESIDENCE 941 936 5 4.3% 0.0% 4.3% 0.0% 4.4% 0.0% 919 21 Re-75 HF SENDAI RESIDENCE EAST *3 1,810 1,760 50 5.3% -0.1% 5.1% -0.1% 5.5% -0.1% 1,648 161

Re-17 HF HIGASHIKANDA RESIDENCE 1,300 1,290 10 4.2% 0.0% 4.2% 0.0% 4.3% 0.0% 927 372 Re-76 HF NISHIKOEN RESIDENCE 1,430 1,430 0 5.3% -0.1% 5.1% -0.1% 5.5% -0.1% 1,388 41

Re-18 HF HIGASHINIHONBASHI RESIDENCE 1,500 1,500 0 4.2% 0.0% 4.2% 0.0% 4.3% 0.0% 1,028 471 Re-77 HF BANSUIDORI RESIDENCE 882 880 2 5.3% -0.1% 5.1% -0.1% 5.5% -0.1% 839 42

Re-19 HF NERIMA RESIDENCE 767 763 4 4.6% -0.1% 4.6% -0.1% 4.7% -0.1% 585 181 Re-78 HF KANNAI RESIDENCE 1,960 1,960 0 4.8% 0.0% 4.6% 0.0% 5.0% 0.0% 1,828 131

Re-20 HF SHIROKANETAKANAWA RESIDENCE 4,370 4,260 110 4.0% 0.0% 4.0% 0.0% 4.1% 0.0% 3,766 603 Re-79 HF MEIEKI-KITA RESIDENCE 2,260 2,260 0 4.9% 0.0% 4.7% 0.0% 5.1% 0.0% 2,188 71

Re-21 HF MEIDAIMAE RESIDENCE 958 962 -4 4.3% 0.0% 4.3% 0.0% 4.4% 0.0% 999 -41 Re-80 HF HIGASHI-SAPPORO RESIDENCE 1,650 1,640 10 5.4% -0.1% 5.2% -0.1% 5.6% -0.1% 1,587 62

Re-22 HF NIHONBASHI RESIDENCE 1,070 1,050 20 4.3% -0.1% 4.1% -0.1% 4.5% -0.1% 1,069 0 95,512 94,093 1,419 86,161 9,350

Re-23 HF KAMISHAKUJII RESIDENCE 977 962 15 4.8% -0.1% 4.6% -0.1% 5.0% -0.1% 881 95 174,891 173,983 1,419 157,211 17,680

Re-24 HF KINSHICHO RESIDENCE 1,110 1,110 0 4.3% 0.0% 4.3% 0.0% 4.4% 0.0% 1,082 27 *1 The acquisition price w as adjusted upw ard from 3,060 mm yen on August 25, 2011 due to partial acquisition of the asset.

Re-25 HF GINZA RESIDENCE EAST 4,780 4,730 50 4.1% 0.0% 4.1% 0.0% 4.2% 0.0% 5,590 -810 *2 The acquisition price w as adjusted dow nw ard from 4,760 mm yen on October 6, 2009 due to partial sales of the asset.

Re-26 HF SHIN-YOKOHAMA RESIDENCE 2,640 2,650 -10 4.7% 0.0% 4.5% 0.0% 4.9% 0.0% 3,071 -431 *3 The acquisition price w as adjusted upw ard from 1,630 mm yen on April 20, 2016 due to completion of the repolotting disposal.

Re-29 HF HAKUSAN RESIDENCE 1,840 1,810 30 4.3% -0.1% 4.1% -0.1% 4.5% -0.1% 2,292 -452 *4 Transferred on October 27, 2016

Re-30 HF MAGOME RESIDENCE 1,330 1,300 30 4.5% -0.1% 4.3% -0.1% 4.7% -0.1% 1,538 -208 *5Unrealized gain and loss: The latent profit and loss of HF NAKAMEGURO BUILDING show n in the table is the amount for the 29th f iscal period (ended May 2016). The appraisal value in the 30th f iscal period (ended November 2016) is the

amount obtained by deducting the estimated disposal cost from the transfer price in the sales contract dated December 1, 2016.

Total properties in portfolio

Unrealized

Profits and

Losses

Property NameAppraisal Value(mn yen) Direct cap(NCF cap)

30th FP Book

Value(mn yen)

30th FP Book

Value(mn yen)

Unrealized

Profits and

Losses

Total Office Buildings

Total Residence Properties

DCF discont rate DCF terminal capProperty Name

Appraisal Value(mn yen) Direct cap(NCF cap) DCF discont rate DCF terminal cap

49

Ⅲ-11 Historical Actual NOI Return(%) (%)

25th FP 26th FP 27th FP 28th FP 29th FP 30th FP 25th FP 26th FP 27th FP 28th FP 29th FP 30th FP

Of-01 HF GOTANDA BUILDING 4.35 4.85 4.77 4.80 4.34 5.17 Re-31 HF GAKUGEIDAIGAKU RESIDENCE Ⅱ 3.11 2.28 3.25 2.98 2.98 3.45

Of-05 SUITENGU HEIWA BUILDING 4.42 3.91 4.59 4.65 4.85 4.95 Re-33 HF KAMEIDO RESIDENCE 5.73 5.18 5.23 5.22 5.66 5.26

Of-06 HF MONZENNAKACHO BUILDING 5.02 5.20 5.09 5.24 4.91 5.43 Re-34 HF TANASHI RESIDENCE 4.35 4.47 4.63 4.62 5.19 3.94

Of-07 HF HAMAMATSUCHO BUILDING 4.44 4.22 4.38 4.60 3.17 2.93 Re-35 HF SHIBA-KOEN RESIDENCE 3.50 4.46 4.58 5.04 4.79 1.97

Of-08 KOKUSAI TAMEIKE BUILDING 4.16 4.29 4.12 3.20 3.51 3.85 Re-36 HF MITA RESIDENCE 4.58 4.97 5.24 4.88 4.62 4.32

Of-09 GRACE BUILDING SENGAKUJIMAE 7.38 7.04 7.22 7.27 7.81 7.42 Re-37 HF TAKANAWA RESIDENCE 5.45 5.67 4.62 3.06 4.68 5.15

Of-10 HF SHIN-YOKOHAMA BUILDING 3.84 3.10 3.22 3.28 4.23 4.52 Re-38 La Residence de Shirokanedai 5.11 5.28 5.34 4.91 5.90 5.19

Of-11 NIHONBASHI DAIICHI BUILDING 3.65 3.57 3.61 3.61 3.81 3.62 Re-39 HF GINZA RESIDENCE EAST Ⅱ 5.22 5.50 5.65 5.28 5.71 6.12

Of-12 HF HATCHOBORI BUILDING 3.45 3.40 3.28 3.29 3.26 2.66 Re-40 HF HATCHOBORI RESIDENCE Ⅱ 5.33 5.14 4.44 4.94 5.04 5.49

Of-13 SHIBUYA AX HILLS *4 2.28 2.06 2.68 2.92 3.03 3.06 Re-41 HF HATCHOBORI RESIDENCE Ⅲ 6.00 5.36 5.86 5.89 5.88 6.16

Of-14 KCA BUILDING *2 2.40 2.61 2.34 - - - Re-42 HF GINZA RESIDENCE 5.48 5.61 6.20 6.09 6.27 6.30

Of-15 HF NAKAMEGURO BUILDING 2.83 2.99 3.17 3.72 3.02 3.08 Re-43 HF KOMAZAWA-KOEN RESIDENCE TOWER 3.70 4.92 4.70 4.90 4.64 4.77

Of-16 ANWA TSUKASAMACHI BUILDING 3.98 3.55 3.91 4.12 4.28 3.87 Re-44 HF UMEDA RESIDENCE TOWER 6.35 6.15 6.25 5.69 6.19 3.79

Of-17 HATCHOBORI MF BUILDING 4.12 3.12 4.17 4.24 4.15 3.81 Re-45 HF NAKANOSHIMA RESIDENCE 5.43 6.31 2.27 5.43 5.66 6.41

Of-18 M2 HARAJUKU *1 4.50 4.59 4.59 4.68 4.61 4.26 Re-46 HF AWAZA RESIDENCE 6.82 7.02 4.00 5.27 6.94 6.83

Of-20 FUNABASHI FACE BUILDING 5.02 3.92 4.24 4.32 4.30 4.44 Re-47 HF MARUNOUCHI RESIDENCE 6.90 7.24 5.94 7.35 7.68 7.11

Of-21 ADESSO NISHIAZABU 2.72 2.56 2.81 2.95 3.01 3.20 Re-48 HF HIRAO RESIDENCE 6.66 7.00 7.09 3.80 6.86 6.70

Of-22 HF TORANOMON BUILDING 3.30 3.15 3.32 3.06 3.27 3.18 Re-49 HF KAWARAMACHI NIJO RESIDENCE 5.25 5.96 4.79 6.09 5.42 5.32

Of-23 HF IKEBUKURO BUILDING 4.04 3.78 3.95 4.11 4.19 4.19 Re-52 HF TENJIN-HIGASHI RESIDENCE 7.53 8.00 7.99 8.22 8.46 7.94

Of-24 HF YUSHIMA BUILDING 5.22 5.20 5.23 4.76 4.62 5.04 Re-53 HF SHIJO KAWARAMACHI RESIDENCE 6.10 6.51 6.67 6.78 6.77 6.61

Of-25 KAYABACHO HEIWA BUILDING 7.46 7.52 7.54 7.55 7.50 7.53 Re-54 La Residence de Sendagi 6.52 5.92 6.04 5.96 6.09 5.80

Of-26 HIROKOJI AQUA PLACE 8.28 8.31 8.23 8.56 8.92 8.85 Re-55 HF SENDAGI RESIDENCE 6.57 6.17 5.81 5.95 6.36 5.94

Of-27 KOBE KYUKYORYUCHI HEIWA BUILDING 7.51 7.30 7.36 6.92 7.34 7.82 Re-56 HF KOMAZAWA-KOEN RESIDENCE 5.12 4.81 4.06 4.46 5.19 5.21

Of-28 MITA HEIWA BUILDING （leasehold land） 4.72 4.72 4.72 4.57 4.57 4.57 Re-57 HF MUSASHIKOYAMA RESIDENCE 6.19 5.98 6.32 6.24 5.86 5.70

Of-29 SAKAE MINAMI HEIWA BUILDING 6.63 6.71 6.97 6.83 7.33 7.40 Re-58 HF KOKUBUNJI RESIDENCE 5.88 6.35 6.24 6.01 5.83 5.83

Of-30 HF SAKURADORI BUILDING 6.11 6.02 5.80 6.21 6.23 6.46 Re-59 HF HISAYAODORI RESIDENCE 6.77 7.23 6.86 6.63 6.23 6.66

Of-31 HF NIHONBASHI HAMACHO BUILDING 5.82 4.60 6.17 5.49 6.05 5.95 Re-60 HF KARASUMA KURAMAGUCHI RESIDENCE 6.30 6.13 5.88 5.61 6.05 5.89

Of-32 HF SENDAI HONCHO BUILDING 6.83 6.27 6.42 6.49 6.88 6.39 Re-61 HF NISHI-SHINJUKU RESIDENCE WEST 5.41 4.47 5.11 5.34 5.41 5.14

Of-33 HF UENO BUILDING - - 5.40 5.02 5.15 5.50 Re-62 HF NISHI-SHINJUKU RESIDENCE EAST 5.35 3.88 4.84 4.86 5.65 5.29

Of-34 KOJIMACHI　HF BUILDING - - 6.52 5.81 5.69 6.17 Re-63 HF HIGASHI-SHINJUKU RESIDENCE 5.55 6.01 5.85 5.49 5.44 5.44

Of-35 HF KUDAN MINAMI BUILDING - - 5.57 4.59 4.07 4.99 Re-64 HF HIGASHI-SHINSAIBASHI RESIDENCE 5.72 5.86 6.07 6.21 5.76 5.54

Of-36 HF KANDA OGAWAMACHI BUILDING - - - 2.60 3.01 3.91 Re-65 HF KITA-YOBANCHO RESIDENCE 7.71 8.43 7.52 8.26 8.18 8.70

Of-37 NISSO 5 BUILDING - - - - 4.76 4.57 Re-66 HF ATAGOBASHI RESIDENCE 8.15 8.52 8.58 8.35 8.27 8.85

5.06 4.88 5.08 4.97 5.00 5.12 Re-67 HF KYUDAIBYOINMAE RESIDENCE 6.05 7.16 6.52 7.18 6.82 6.36

Re-03 HF ICHIKAWA RESIDENCE 7.19 7.31 7.33 7.43 7.34 7.44 Re-68 HF ASAKUSABASHI RESIDENCE 5.78 5.38 5.69 5.05 5.66 5.83

Re-05 HF MEGURO RESIDENCE 3.84 4.44 4.22 4.44 4.46 4.58 Re-69 HF ICHIBANCHO RESIDENCE 8.37 8.30 8.35 8.48 8.26 8.72

Re-09 HF KASAI RESIDENCE 6.10 6.54 5.77 6.05 2.03 6.48 Re-70 HF HIGASHI-NAKANO RESIDENCE 4.93 5.10 5.43 5.49 4.94 5.21

Re-11 HF WAKABAYASHI－KOEN RESIDENCE 5.46 5.28 5.52 5.91 5.66 5.83 Re-72 HF WASEDA RESIDENCE 5.34 5.26 5.49 5.25 5.44 5.36

Re-12 HF HIMONYA RESIDENCE 4.77 4.77 4.13 5.04 3.61 5.03 Re-73 HF WASEDA RESIDENCE Ⅱ 5.41 5.38 5.57 5.37 4.68 4.99

Re-14 HF MINAMIAZABU RESIDENCE 4.16 3.81 4.20 4.28 4.34 4.42 Re-74 HF WAKAMATSUKAWADA RESIDENCE 4.27 4.40 4.62 4.97 5.18 5.28

Re-15 HF AZABUJUBAN RESIDENCE 3.79 3.44 3.92 3.42 3.90 4.31 Re-75 HF SENDAI RESIDENCE EAST - - 6.29 6.01 6.35 6.60

Re-16 HF GAKUGEIDAIGAKU RESIDENCE 3.99 4.04 3.98 4.17 3.77 4.41 Re-76 HF NISHIKOEN RESIDENCE - - - 5.26 4.77 4.53

Re-17 HF HIGASHIKANDA RESIDENCE 5.83 5.94 5.46 6.06 6.15 5.61 Re-77 HF BANSUIDORI RESIDENCE - - - 6.29 5.87 4.75

Re-18 HF HIGASHINIHONBASHI RESIDENCE 6.01 6.12 6.08 5.99 6.58 6.85 Re-78 HF KANNAI RESIDENCE - - - - 5.51 5.36

Re-19 HF NERIMA RESIDENCE 5.92 6.29 5.68 5.96 6.40 6.69 Re-79 HF MEIEKI-KITA RESIDENCE - - - - 4.65 4.52

Re-20 HF SHIROKANETAKANAWA RESIDENCE 4.66 4.31 4.64 4.60 4.59 4.79 Re-80 HF HIGASHI-SAPPORO RESIDENCE - - - - 5.39 5.93

Re-21 HF MEIDAIMAE RESIDENCE 4.28 4.21 4.08 4.52 4.45 4.55 4.98 5.05 5.07 5.09 5.15 5.16

Re-22 HF NIHONBASHI RESIDENCE 4.03 4.31 4.32 4.40 4.92 4.27 Ho-01 Super Hotel Osaka Tennoji *3 6.53 6.57 6.62 6.88 - -

Re-23 HF KAMISHAKUJII RESIDENCE 5.31 5.14 5.36 5.46 5.32 5.63 Ho-02 Super Hotel Kyoto Karasumagojyo *3 6.43 6.10 6.52 6.75 - -

Re-24 HF KINSHICHO RESIDENCE 4.62 4.27 4.53 5.10 4.51 4.30 Ho-03 Super Hotel Saitama Omiya *3 6.18 6.23 6.28 6.61 - -

Re-25 HF GINZA RESIDENCE EAST 3.40 3.62 3.60 3.42 3.56 3.76 Ho-04 Super Hotel Sendai Hirose-dori *3 7.07 7.13 7.14 6.96 - -

Re-26 HF SHIN-YOKOHAMA RESIDENCE 4.10 4.34 4.15 4.27 4.35 4.36 6.57 6.54 6.66 6.81 - -

Re-29 HF HAKUSAN RESIDENCE 3.32 3.75 3.66 3.71 3.90 3.57 5.06 5.02 5.12 5.08 5.09 5.14

Total Residential Properties

Total Hotels


Property Name Property Name


50

Ⅲ-12 Historical Occupancy(％) (％)

31-May-2016 30-Jun-2016 31-Jul-2016 31-Aug-2016 30-Sep-2016 31-Oct-2016 30-Nov-2016 31-May-2016 30-Jun-2016 31-Jul-2016 31-Aug-2016 30-Sep-2016 31-Oct-2016 30-Nov-2016

Of-01 HF GOTANDA BUILDING 96.35 96.35 96.35 96.35 96.35 96.35 96.35 Re-29 HF HAKUSAN RESIDENCE 96.18 94.00 98.08 94.35 96.28 94.29 100.00

Of-05 SUITENGU HEIWA BUILDING 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-30 HF MAGOME RESIDENCE 92.12 94.76 97.36 100.00 93.59 96.59 97.09

Of-06 HF MONZENNAKACHO BUILDING 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-31 HF GAKUGEIDAIGAKU RESIDENCE Ⅱ 95.42 95.42 100.00 100.00 95.44 95.44 100.00

Of-07 HF HAMAMATSUCHO BUILDING 77.62 67.15 77.62 88.81 88.81 88.81 100.00 Re-33 HF KAMEIDO RESIDENCE 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Of-08 KOKUSAI TAMEIKE BUILDING 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-34 HF TANASHI RESIDENCE 94.54 94.54 91.54 88.83 88.83 88.44 85.44

Of-09 GRACE BUILDING SENGAKUJIMAE 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-35 HF SHIBA-KOEN RESIDENCE 94.34 87.60 90.53 94.55 91.16 91.16 94.55

Of-10 HF SHIN-YOKOHAMA BUILDING 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-36 HF MITA RESIDENCE 91.66 85.29 87.34 93.63 93.84 100.00 97.94

Of-11 NIHONBASHI DAIICHI BUILDING 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-37 HF TAKANAWA RESIDENCE 92.53 92.53 96.27 96.71 100.00 100.00 100.00

Of-12 HF HATCHOBORI BUILDING 100.00 100.00 100.00 85.35 85.35 100.00 100.00 Re-38 La Residence de Shirokanedai 96.39 96.39 96.39 96.39 100.00 92.90 96.39

Of-13 SHIBUYA AX HILLS *1 100.00 100.00 100.00 100.00 100.00 - - Re-39 HF GINZA RESIDENCE EAST Ⅱ 100.00 100.00 100.00 100.00 100.00 98.75 100.00

Of-15 HF NAKAMEGURO BUILDING 77.09 77.09 77.09 77.09 77.09 77.09 77.09 Re-40 HF HATCHOBORI RESIDENCE Ⅱ 96.85 98.72 98.17 99.08 100.00 98.69 100.00

Of-16 ANWA TSUKASAMACHI BUILDING 95.83 100.00 100.00 100.00 100.00 85.29 100.00 Re-41 HF HATCHOBORI RESIDENCE Ⅲ 100.00 95.70 88.49 95.14 100.00 100.00 97.37

Of-17 HATCHOBORI MF BUILDING 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-42 HF GINZA RESIDENCE 94.11 97.87 98.13 100.00 100.00 100.00 100.00

Of-18 M2 HARAJUKU 100.00 100.00 100.00 85.61 85.61 85.61 85.61 Re-43 HF KOMAZAWA-KOEN RESIDENCE TOWER 95.07 96.00 97.74 97.43 97.64 97.44 97.25

Of-20 FUNABASHI FACE BUILDING 100.00 100.00 100.00 100.00 100.00 94.18 100.00 Re-44 HF UMEDA RESIDENCE TOWER 98.85 96.16 97.70 95.81 96.96 96.74 97.32

Of-21 ADESSO NISHIAZABU 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-45 HF NAKANOSHIMA RESIDENCE 91.38 100.00 100.00 100.00 97.96 97.96 97.96

Of-22 HF TORANOMON BUILDING 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-46 HF AWAZA RESIDENCE 98.48 100.00 98.34 95.30 96.66 98.32 98.32

Of-23 HF IKEBUKURO BUILDING 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-47 HF MARUNOUCHI RESIDENCE 98.62 98.62 98.62 94.44 97.23 95.82 93.04

Of-24 HF YUSHIMA BUILDING 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-48 HF HIRAO RESIDENCE 97.70 95.96 96.68 96.64 97.78 98.34 98.95

Of-25 KAYABACHO HEIWA BUILDING 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-49 HF KAWARAMACHI NIJO RESIDENCE 92.48 92.42 94.42 98.01 100.00 98.21 96.41

Of-26 HIROKOJI AQUA PLACE 95.16 95.16 95.16 95.16 95.16 95.16 100.00 Re-52 HF TENJIN-HIGASHI RESIDENCE 94.81 96.10 97.40 94.81 94.81 97.40 97.40

Of-27 KOBE KYUKYORYUCHI HEIWA BUILDING 96.95 97.94 97.94 97.94 97.94 97.94 97.94 Re-53 HF SHIJO KAWARAMACHI RESIDENCE 97.51 100.00 98.17 97.54 96.28 96.29 97.54

Of-28 MITA HEIWA BUILDING （leasehold land） 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-54 La Residence de Sendagi 100.00 100.00 100.00 98.18 98.18 96.37 98.19

Of-29 SAKAE MINAMI HEIWA BUILDING 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-55 HF SENDAGI RESIDENCE 100.00 100.00 100.00 96.98 93.97 93.97 93.97

Of-30 HF SAKURADORI BUILDING 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-56 HF KOMAZAWA-KOEN RESIDENCE 100.00 97.22 94.44 97.22 100.00 100.00 100.00

Of-31 HF NIHONBASHI HAMACHO BUILDING 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-57 HF MUSASHIKOYAMA RESIDENCE 96.33 90.96 92.76 98.20 100.00 96.45 92.85

Of-32 HF SENDAI HONCHO BUILDING 98.90 98.90 98.90 98.90 98.90 98.90 98.90 Re-58 HF KOKUBUNJI RESIDENCE 92.70 90.72 88.78 96.13 98.11 94.28 98.11

Of-33 HF UENO BUILDING 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-59 HF HISAYAODORI RESIDENCE 93.09 96.08 97.97 97.97 98.05 98.05 98.02

Of-34 KOJIMACHI　HF BUILDING 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-60 HF KARASUMA KURAMAGUCHI RESIDENCE 95.84 95.84 95.84 95.95 97.98 97.29 95.95

Of-35 HF KUDAN MINAMI BUILDING 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-61 HF NISHI-SHINJUKU RESIDENCE WEST 95.00 89.66 90.91 90.91 97.50 96.25 97.50

Of-36 HF KANDA OGAWAMACHI BUILDING 81.41 81.41 100.00 100.00 100.00 100.00 100.00 Re-62 HF NISHI-SHINJUKU RESIDENCE EAST 94.57 93.67 95.18 93.17 93.67 92.57 93.48

Of-37 NISSO 5 BUILDING 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-63 HF HIGASHI-SHINJUKU RESIDENCE 90.70 90.70 92.07 92.07 97.22 98.62 98.62

97.69 97.59 98.32 98.02 98.02 97.99 98.94 Re-64 HF HIGASHI-SHINSAIBASHI RESIDENCE 100.00 100.00 97.26 97.26 94.53 94.53 100.00

Re-03 HF ICHIKAWA RESIDENCE 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-65 HF KITA-YOBANCHO RESIDENCE 100.00 97.77 100.00 100.00 100.00 94.45 94.45

Re-05 HF MEGURO RESIDENCE 100.00 100.00 100.00 100.00 100.00 100.00 90.88 Re-66 HF ATAGOBASHI RESIDENCE 100.00 98.75 100.00 98.76 98.76 98.76 97.50

Re-09 HF KASAI RESIDENCE 97.94 97.94 95.88 100.00 100.00 100.00 100.00 Re-67 HF KYUDAIBYOINMAE RESIDENCE 85.05 91.73 96.74 96.74 98.37 94.22 98.37

Re-11 HF WAKABAYASHI－KOEN RESIDENCE 93.14 96.05 98.94 98.05 96.99 99.11 99.11 Re-68 HF ASAKUSABASHI RESIDENCE 100.00 97.44 97.44 97.44 100.00 94.87 97.44

Re-12 HF HIMONYA RESIDENCE 100.00 98.36 98.36 98.36 93.96 98.33 96.67 Re-69 HF ICHIBANCHO RESIDENCE 96.40 98.20 97.63 98.82 98.82 94.65 95.83

Re-14 HF MINAMIAZABU RESIDENCE 96.66 95.00 98.34 100.00 96.66 98.34 98.34 Re-70 HF HIGASHI-NAKANO RESIDENCE 91.89 98.33 96.60 93.46 95.19 95.19 96.86

Re-15 HF AZABUJUBAN RESIDENCE 97.13 100.00 96.20 92.40 92.40 92.40 96.20 Re-72 HF WASEDA RESIDENCE 97.13 97.06 96.27 97.06 97.78 95.66 98.59

Re-16 HF GAKUGEIDAIGAKU RESIDENCE 100.00 100.00 95.75 100.00 100.00 100.00 96.93 Re-73 HF WASEDA RESIDENCE Ⅱ 93.09 91.36 88.99 94.21 100.00 100.00 97.94

Re-17 HF HIGASHIKANDA RESIDENCE 98.47 98.47 96.94 90.74 95.34 98.45 96.91 Re-74 HF WAKAMATSUKAWADA RESIDENCE 93.06 94.56 100.00 93.06 93.06 100.00 100.00

Re-18 HF HIGASHINIHONBASHI RESIDENCE 98.77 98.73 100.00 100.00 98.80 100.00 100.00 Re-75 HF SENDAI RESIDENCE EAST 98.79 98.79 98.18 98.79 98.79 98.79 96.97

Re-19 HF NERIMA RESIDENCE 100.00 98.08 100.00 96.16 96.16 96.16 94.24 Re-76 HF NISHIKOEN RESIDENCE 93.20 91.14 94.05 95.99 91.99 93.08 90.17

Re-20 HF SHIROKANETAKANAWA RESIDENCE 95.43 97.71 95.86 98.94 98.94 100.00 98.14 Re-77 HF BANSUIDORI RESIDENCE 95.45 92.42 96.97 96.97 92.42 90.91 86.36

Re-21 HF MEIDAIMAE RESIDENCE 98.14 98.19 96.40 94.61 97.90 97.90 96.11 Re-78 HF KANNAI RESIDENCE 97.51 98.33 98.31 97.49 96.67 94.02 93.20

Re-22 HF NIHONBASHI RESIDENCE 98.10 100.00 89.39 92.35 91.13 100.00 100.00 Re-79 HF MEIEKI-KITA RESIDENCE 86.71 89.24 92.73 92.94 94.74 99.03 99.03

Re-23 HF KAMISHAKUJII RESIDENCE 95.30 96.66 96.66 96.66 100.00 100.00 100.00 Re-80 HF HIGASHI-SAPPORO RESIDENCE 95.42 94.87 96.51 97.05 97.05 96.44 95.17

Re-24 HF KINSHICHO RESIDENCE 96.46 94.82 96.59 96.55 93.01 92.51 90.72 95.99 96.18 96.72 96.76 96.98 97.10 96.98

Re-25 HF GINZA RESIDENCE EAST 96.29 98.12 98.45 97.71 98.52 100.00 97.16 96.66 96.74 97.36 97.26 97.39 97.45 97.75

Re-26 HF SHIN-YOKOHAMA RESIDENCE 98.20 99.23 97.71 98.48 97.46 97.67 98.48 *1 Transferred on October 27, 2016


Property Name Property Name


Total Residential Properties

51

Ⅲ-13 Organization of the Asset Management Company

Name HEIWA REAL ESTATE Asset Management CO., LTD.

Head Office

Location9-1, Nihonbashi-kabutocho, Chuo-ku, Tokyo, 103-0026

Date of

EstablishmentMarch 24, 2000

Paid-in Capital 295,575 thousand yen

Shareholders HEIWA REAL ESTATE CO.,LTD.(100%)

Directors

President & Representative Director Takaya Ichikawa

Executive Managing Director, Investment

Management Division General ManagerSatoru Yamanaka

Managing Director, Business Planning

Division General Manager, Business

Administration Dept. General Manager

Masanori Hirano

Managing Director (part time) Norio Iwasaki

Managing Director (part time) Tomoharu Nakao

Auditor (part time) Naoto Kato

Business

ActivitiesInvestment management Services

Registrations ,

licenses , etc..

Financial instruments business

Reg. No. 316,

Director-General,

Kanto Finance Bureau

(Financial Instruments

and Exchange Act)

Building Lots and Buildings Transaction

Business

Lic. No. (4) 79529,

Governor of Tokyo

Discretionary transaction Agent

Lic. No.8, Minister of

Land, Infrastructure,

Transportation and

Tourism

52

Financial Institutions(including

securities firms), 74investors(0.43%)

Other Japanese corporations,

223investors(1.30%)

Foreign Corporations, etc.., 116investors

(0.68%)

Individual and others,

16,752investors(97.59%)

Ⅲ-14 Condition of Investment Unit Price

Configuration of Investors at End of 29th Fiscal Period

(As of November 30, 2016)

(Note) Breakdown of investors are rounded down to the second decimal place.

Based on number of investors (17,165investors)

History of Investment Unit Price

(Trading Value/Unit)

Comparison with TSE REIT Index

Heiwa Real Estate REIT

TSE REIT Index

Nov 30,

2015

Dec 31,

2015

Jan 31,

2016

Feb 29,

2016

Mar 31,

2016

Apr 30,

2016

May 31,

2016

Jun 30,

2016

Jul 31,

2016

Aug 31,

2016

Sep 30,

2015

Oct 31,

2015

Nov 30,

2016

(Note) Figures as of November 30, 2015 for investment unit price and TSE REIT Index are indicated as 100%.

Condition of Unitholders

(Note) Share is the ratio of investment units owned against total investment units outstanding rounded down to

the second decimal place.

(As of November 30, 2016)

(Investment Unit Price/Yen)

Nov 30,

2015

Dec 31,

2015

Jan 31,

2016

Feb 29,

2016

Mar 31,

2016

Apr 30,

2016

May 31,

2016

Jun 30,

2016

Jul 31,

2016

Aug 31,

2016

Sep 30,

2015

Oct 31,

2015

Nov 30,

2016

Based on quantity of investment units (1,014,847units)

Trading Value

Investment Unit Price （Closing Price）

Total market value: 79.6bn yen (as of November 30, 2016)

High during period (closing price): 93,100yen (March,8, 2016)

Low during period (closing price): 75,300 yen ( Jan 20, 2016)

End of period investment unit price

(closing price) :78,500 yen

Units Ow ned Share(Note)

(units) (%)

1 Japan Trustee Services Bank, Ltd. (trust account) 339,268 33.43

2 Heiw a Real Estate Co., Ltd. 135,845 13.39

3 NOMURA BANK (LUXEMBOURG)S.A. 81,879 8.07

4 The Master Trust Bank of Japan ,Ltd. (trust account) 57,091 5.63

5Trust & Custody Services Bank, Ltd.

(securities investment trust account)40,511 3.99

6 The Nomura Trust and Banking Co., Ltd. (trust account) 29,284 2.89

7 Shikoku Railw ay Company 10,249 1.01

8 Japan Trustee Services Bank, Ltd. (trust account 9) 7,936 0.78

9 The Gibraltar Life Insurance Co., Ltd. (General Account J-REIT) 7,509 0.74

10 CBNY DFA INTERNATIONAL REAL ESTATE SECURITIES PORTFOLIO 6,219 0.61

715,791 70.53Total

Name

Financial Institutions(including

securities firms), 543,783Units(53.58%)

Other Japanese corporations,

165,656Units(16.32%)

Foreign Corporations, etc.,

140,649Units(13.6%)

Individual and others, 164,759Units(16.23%)

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