Materials for Analyst Meeting - IR Webcasting · 7/17/2015 · 3 1 Trajectory for Stable Growth of HEIWA REAL ESTATE REIT Inc 5 2 Highlights of the 27th Fiscal Period 6 3 Financial

July 17, 2015

Fiscal Period 27 Materials for Analyst Meeting

6 month ended May 2015

w w w . h e i w a - r e . c o . j p

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.

3

1 Trajectory for Stable Growth of HEIWA REAL ESTATE REIT Inc 5

2 Highlights of the 27th Fiscal Period 6

3 Financial Performance for the 27th Fiscal Period 7

4 Forecasts for 28th Fiscal Period Operations 8

Ⅱ Status of Operations

I Overview of the 27th Fiscal Period (ended in May 2015) Ⅲ Appendix

1 Balance Sheet 26

2 Profit and Loss Statement 27

3 List of Debt Outstanding 28

4 Diversification in Investment Areas 29

5 Office Portfolio Performance (Tenant Attributes, Property

Diversification by Office Size, Rent Share, Building Age) 30

6 Residential Portfolio Performance (Tenant Attributes, Property

Diversification by Rent Amount and Office Size, Building Age) 31

7 Profits from Rental Business 32

8 Portfolio Overview and Performance (Offices) 33

9 Portfolio Overview and Performance (Residential Properties) 39

10 Portfolio Overview and Performance (Hotels) 52

11 Historical Appraisal Values 53

12 Historical Actual NOI Return 54

13 Historical Monthly Occupancy Rates 55

14 Organization of the Asset Management Company 56

15 Status of Investment Unit Price 57

Table of Contents

1 Status of Portfolio 10

2 External Growth(1): Overview of December 2014 Public

Offering 11

3 External Growth(2): Portfolio Replacement 12

4 Internal Growth(1): Historical Occupancy Rates 13

5 Internal Growth(2): Status of Office Moving in/out 14

6 Internal Growth(3): Status of Office Operations 15

7 Internal Growth(4):Residential rental trends 16

8 Internal Growth(5): Status of Residential Operations 17

9 Internal Growth(6): Refurbishment Construction Work 18

10 Historical Appraisal Values 19

11 Financial Strategies(1): Financial Status(1) 20



14 Future Growth Strategy 23

Appendix Diversification of Property Acquisition Methods 24

I. Overview of the 27th Fiscal Period (ended in May 2015)

5

921.1 969.1 1,437.2 1,291.9 1,292.2 1,321.5 1,321.5 1,382.7 1,381.6 1,476.6 1,476.6 1,550.4

734

1,317

1,375

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

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

1,742

500

800

1,100

1,400

1,700

2,000

FP 162009/11

FP 172010/5

FP 182010/11

FP 192011/5

FP 202011/11

FP 212012/5

FP 222012/11

FP 232013/5

FP 242013/11

FP 252014/5

FP 262014/11

FP 272015/5

Assets Under Management(100million yen)

Distribution(yen)

1.90%

1.93%

2.06%

1.90% 1.86%

1.84%

1.61%

1.50%

1.40%

1.30% 1.28% 1.25%

Average Interest Rate

89.5%

89.0%

92.0%

94.5% 94.7%

95.6% 96.3%

96.6% 96.8% 96.5% 96.7%

97.3% 16thAverage Occupancy rate

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

３ Trajectory for Stable Growth ２

Re-establish a

Growth １ Re-establish Infrastructure

for Growth

S T A G E

■ Acquired 3 office properties

HF

SAKURADORI

BUILDING

HF Nihonbashi

Hamacho Building

HF Sendai

Honcho

Building

■ Acquired 3 office properties

Mita Heiwa

Building (Land)

Kobe

Kyukyoryuchi

Heiwa Building

Sakae Minami

Heiwa Building

2012 Public Offering

■ Acquired 3 office/1 Residence properties

Kojimachi

HF Building

Daiwa Ueno

Building

HF Kudan-

Minami

Building

HF Sendai

Residence

EAST

S T A G E S T A G E

2013 Public Offering 2014 Public Offering

October,1,2010

Merger

CRESCENDO InvestmentCorporation

Japan Single-residence REIT Inc.

6

2 Highlights of the 27th Fiscal Period

Achieved steady external growth through public offering for 3 consecutive years

・ Total value of 9.1 billion yen: 3 offices in central Tokyo and 1 residence in Sendai

・ Expanded operating earnings

・ Improved ratio of offices / ratio of Tokyo wards

Promoted tenant replacement strategy

・Sold low profitability properties (KCA Building ), improved NOI yield

External Growth（P11 – P12）

Average occupancy rate during the period was highest since company’s listing

Residential rents increased

・ Rent variation rate for new leases or lease renewals turned

into a positive figure

Rent gap for offices improved as a result of upward trend in market rents

Unrealized gain for portfolio increased

Internal Growth （P13 – P19）

Loan periods extended, terms of repayment staggered, and interest

charges lowered

Capital increase etc. resulted in lowering of appraisal LTV and expansion

of debt capacity

Improved credit rating / JCR: A- (stable) ⇒ A (Stable)

Financial Operations（P20 – P22）

Fiscal Period 26 AUM 147.6 billion yen Number of Properties 92

Fiscal Period 27 AUM 155.0 billion yen Number of properties 95

Fiscal Period 26 Unrealized Gain： 1,308 million yen

Fiscal Period 27 Unrealized Gain： 6,106 million yen

Fiscal Period 26 Average Occupancy rate during the period : 96.66％

Fiscal Period 27 Average Occupancy rate during the period: 97.27％

Average of Fiscal Period 26 Loan Term： 5.41years

Average of Fiscal Period 27 Loan Term： 5.76years

Average of Fiscal Period 26 Interest Rate：1.276%

Average of Fiscal Period 27 Interest Rate： 1.252%

Allocated increase for 6 consecutive Fiscal Periods

Losses on sales (5.59 million yen) occurred as a result of sale of

properties, but these were partially offset by appropriation of earnings carried forward. Distributions were made in accordance with initial forecasts.

Distribution Fiscal Period 26 1,703 yen/unit

Fiscal Period 27 1,742 yen/unit

7

3 Financial Performance for the 27th Fiscal Period

26th FP

Actual

Performance

27th FP

Actual

Performance

Change from

previous

period

Operating revenue 5,052 5,415 362

Operating expenses 2,903 3,654 750

Operating income 2,148 1,760 △388

Non-operating income 3 3 △0

Non-operating expenses 650 651 1

Ordinary income 1,502 1,112 △389

Net income 1,501 1,111 △389

EPU

(net income per unit) (yen) 1,703 1,169 △534

Appropriated retained

earnings － 545 545

Internal reserve －－－

DPU

(Distribution per unit) (yen) 1,703 1,742 39

Attributes for Change from Previous Period

(27th Fiscal Period – 26th Fiscal Period)

Attributes Amount

Operating

revenue

Office Earnings contribution from properties acquired during the period

(3 properties)

Existing properties

Earnings from properties sold during the period (1 property)

Residence Earnings contribution from properties acquired during the period

(1 property)

Existing properties

Increased revenue from key money and renewal fees during

busy season

Silent partnership Dividends

282

3

△14

60

21

15

△5

Operating

expenses

Office Properties acquired during the period (3 properties

Existing properties

Loss incurred with sale of properties during the

period

Residence Properties acquired during the period (1 property)

Existing properties

SGA

107

△30

559

24

51

39

Non-operating

expenses

Interest expenses

Loan-related expenses

Unit delivery expenses

△3

△3

6

Attributes for Change from Budget

(27th FP Actual – 27th FP Budget)

Attributes Amount

Operating

revenue

Office Increased rent revenue

Residence Increased rent revenue 8

27

Operating

expenses

Offices

Residences

SGA

6 △5

7

(Note)Forecasts for the 27th Fiscal Period are forecast figures announced on March 9, 2015

27th FP

Budget

Change

from

Budget

5,379 36

3,648 8

1,731 28

1 2

648 2

1,084 17

1,083 16

1,139 30

574 △29

－－

1,742 －

Expanded operating earnings through acquisition of new properties

Expanded rental revenue attributable to busy season for residential property and increased revenue from key money and renewal fees

Included realized loss incurred with the sale of KCA Building and appropriated earnings carried forward

(Unit: million yen)

8

27th Fiscal Period

Result (a)

28th Fiscal Period

Forecast (b)

Variation

(b-a)

Operating revenue 5,415 5,375 △40

Operating expenses 3,654 3,112 △542

Operating income 1,760 2,263 502

Non-operating income 3 5 2

Non-operating expenses 651 632 △18

Ordinary income 1,112 1,636 523

Net income 1,111 1,635 523

EPU

(net income per unit) (yen) 1,169 1,719 550

Appropriated retained earnings 545 － △545

DPU

(distribution per unit) (yen) 1,742 1,719 △23

4 Forecast for 28th Fiscal Period Operations

Forecast Dividend per Unit

28th Fiscal Period

1,719 yen

End of 26th FP Retained Earnings 3,063 million yen

End of 27th FP Appropriated Retained

Earnings △545 million yen

End of 27th FP Retained Earnings 2,518 million yen

Key assumptions for forecasts 27th FP (Actual) 28th FP

Occupancy rates Total of Portfolio 97.27％ 97.20％ Office 97.34％ 97.70％

Residence 96.98％ 96.63％

Hotel 100.00％ 100.00％

NOI yield Total of Portfolio 4.99％ 4.95％

Office 5.06％ 5.00％

Residence 4.86％ 4.84％

Hotel 6.20％ 6.23％

Allotment from Negative Goodwill 545 None

Outstanding investment Units 951,147 Units 951,147 Units

Decrease in revenue from key money and renewal fees caused by slow season for residential property

Expensed municipal tax and city planning tax for properties acquired during the 27th FP

Forecast sustained high occupancy rates and cost reductions (expenses for outsourced management and upkeep, cost of repairs, interest expenses)

Attributes for Change (28th Fiscal Period – 2th Fiscal Period)

Attributes Amount

Operating

revenue

Office

Rent/parking lot revenue

Utility expenses revenue

Residence

Rent/parking lot revenue

Key money / renewal fee revenue

△16

12

△16

△16

Operating

expenses

Office

Public charges and taxes

Utility expenses

Loss on property sales

Residence

Charges for outsourced Management

and upkeep

Public charges and taxes

Repairs

28

20

△559

△5

2

△21

Non-operating

expenses

Interest expenses

Loan-related expenses

Loss on disposal

0

△15

△3

(Unit: million yen)

(Note) Forecasted figures were announced on July 15, 2015. 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.

Ⅱ Status of Operations

10

5 years to 10 years

30.60%

10 years to 15 years

35.38%

15 years to 20 years 4.00%

More than 20 years

30.02%

(Note 1) NOI return = Actual NOI (Annualized) / Acquisition price.

(Note 2) BV Yield = Actual NOI (Annualized) ÷（（beginning of BV ÷end of BV)÷2）

(Note 3) Yield after depreciation = Actual Rental business profit (annualized) / Acquisition price

Central 5 Wards 44.18%

Tokyo 23 Wards 27.19%

Other 20.87%

Tokyo Area

71.37%

Tokyo Surrounding Areas

7.76%

Average

Building Age

15.31years

Summary of Portfolio

Portfolio Breakdown (as of the end of May 2015)

Property

Type Investment

Area

(Note 1) 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.

(Note 2) Silent partnership holdings are excluded from the portfolio breakdown.

26th Fiscal Period 27th Fiscal Period

Overall Office Residence Hotel Overall Office Residence Hotel

Asset size at end of period (million yen) 147,669 62,266 81,223 4,180 155,039 68,006 82,853 4,180

Number of properties (buildings) at end

of period 92 28 60 4 95 30 61 4

Occupancy rates:

(%)

End of period 97.31 96.91 97.34 100.00 96.84 97.25 96.30 100.00

Period average 96.66 96.27 96.63 100.00 97.27 97.34 96.98 100.00

Portfolio NOI yield (%) (Note 1) 4.90 4.87 4.85 6.13 4.99 5.06 4.86 6.20

Book Value Yield (%) (Note 2) 5.02 4.88 5.05 6.54 5.10 5.04 5.07 6.66

Yield after depreciation (%) (Note 3) 3.76 3.82 3.66 4.79 3.84 4.01 3.64 4.86

1 Status of Portfolio

NOI Yield trends

Average Office Building Age ：21.25 years

Average Residential Building Age ：10.86 years

Office 43.86%

Residence 53.44%

Hotel 2.70%

4.46%

4.37%

4.89%

4.59%

4.76% 4.82%

4.69% 4.71%

4.85%

4.95% 4.90%

4.99%

4.46%

4.37%

4.90%

4.61%

4.81% 4.87%

4.76% 4.80%

4.95%

5.06% 5.02%

5.10%

3.8%

4.0%

4.2%

4.4%

4.6%

4.8%

5.0%

5.2%

FP 16 FP 17 FP 18 FP 19 FP 20 FP 21 FP 22 FP 23 FP 24 FP 25 FP 26 FP 27

NOI Yield on Acquisition Price

NOI Yield on Book Value

11

Acquired 3 office properties (Tokyo) and 1 Residence property (Sendai) with the capital increase through public offering (December 2014)

Utilized warehousing functions and Bridge fund functions provided by our sponsors

2 External Growth(1)： Overview of December 2014 Public Offering

Launch Date November 7, 2014

Newly issued Units P.O.

O.A.

Total

Units outstanding prior to the offering 881,447 units

Units outstanding after

Issuance of new units 951,147 units

Offer price 86,790 yen

Issue price 83,852 yen

Total issue price 5,844 million yen

Pricing Date November 17, 2014

Property Acquisition Date December 4, 2014

Daiwa Ueno

Building

Kojimachi

HF Building

HF Kudan-

Minami

Building

HF Sendai

Residence

East

Total/

Average

Acquisition Price (¥million) 3,400 1,350 2,720 1,630 9,100

Construction Completion Date February1990 March 1994 March 1991 July 2008

NOI Yield (Note 5.39％ 5.44％ 5.00％ 6.26％ 5.44％

NOI Yield After Depreciation

(Note)

4.27％ 4.66％ 4.31％ 4.31％ 4.35％

Summary of acquired properties

66,400 Units

3,300 Units

69,700 Units

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

Ueno, Taito-ku, Tokyo Kojimachi, Chiyoda-ku, Tokyo Kudan-Minami,Chiyoda-ku,Tokyo

HF Kudan-Minami

Building

Kojimachi HF

Building Daiwa Ueno Building

Miyagino-ku, Sendai, Miyagi

HF Sendai

Residence EAST

12

3 External Growth(2): Portfolio Replacement

Sales of KCA Buildings: Sell low Profitability Properties, decrease latent losses, Improve asset operating efficiency

Strengthen the earnings power of the portfolio through the continuous acquisition of properties

Location Chiyoda-ku, Tokyo

Sales Price

(million yen) 1,200

Appraisal Value

(million yen) 1,086

Gain/Loss on transfer △ 559

Total Floor Space 1,562.3㎡

ＫＣＡ Improve NOI Yield

Improve average

property age

Decrease latent

losses

Improve

portfolio quality

FP22

(Nov 2012)

FP26

(Nov 2014）

po

rtfolio

Number of Properties 88 92

Asset size(¥million) 132,159 147,669

Office Ratio 35.30％ 42.2％

Residence Ratio 61.54％ 55.0％

NOI Yield 4.69％ 4.90％

Occupancy Rate 96.25％ 96.25％

Unrealized Gain/Loss(¥million) △9,157 1,308

Appraisal LTV 52.9％ 47.5％

Borrowing Rate 1.609％ 1.276％

Price of Investment Units at end

of Fiscal Period (yen) 54,000 90,200

Rating（R&I/JCR) BBB+/A- A-/A-

Effects of capital increase through public offering / transfer of properties

FP27

（May 2015)

95

155,039

43.9％

53.4％

4.99％

97.27％

6,106

45.4％

1.252％

95,000

A-/A

Public Offering

(Dec 2014）

KCA Building

（Mar 2015）

4 1

9,100 1,730

82.1％ 100.0％

17.9％ -

5.44％ 2.61％

－ 82.20％

600 △644

36.1％ -

0.835％ -

- -

- -

Construction Completion Date Nov. 1987

Occupancy Rate(Note)

82.2％

NOI Yield(Note) 2.61％

NOI Yield After

Depreciation( Note) 2.12％

Date of Transfer March 10, 2015

Note：As of November 2014

13

End of 22FP Overall Occupancy

Rate 96.63%


Rate 96.91%


Rate 96.79%

End of 25 FP Overall Occupancy

Rate 96.24%


Rate 97.31%


Rate 96.84%

80

85

90

95

100

FP222012/11

FP232013/5

FP242013/11

FP252014/5

FP262014/11

FP272015/5

Office Occupancy Rate

Residence Occupancy Rate

Hotel Occupancy Rate

Overall Occupancy Rate

Maintained stable and high occupancy rates throughout the period for Offices, Residential Properties , and Hotels.

The average occupancy rate for 27th FP was 97.27%, the highest since the company’s listing

4 Internal Growth (1) : Historical Occupancy Rates

0

Historical Data of Occupancy Rates

89.5% 89.0%

92.0%

94.5% 94.7%

95.6% 96.3%

96.6% 96.8% 96.5% 96.7%

97.27%

85%

90%

95%

100%

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

Overall Average Occupancy Rate During the Period

(%)

14

848.18㎡

（4）

1,126.61㎡

（6）

1,114.47㎡

（6）

2,035.45㎡

（8） 821.19㎡

（6）

146.78㎡

（1）

169.10㎡

（2）

300.50㎡

（2） 193.93㎡

（2）

466.87㎡

（3）

-0.23%

-0.63%

-0.33%

-0.70%

-0.15%

-1.00%

-0.80%

-0.60%

-0.40%

-0.20%

0.00%

0.20%

0.40%

-2500

-2000

-1500

-1000

-500

0

500

1000

FP232013/5

FP242013/11

FP252014/5

FP262014/11

FP272015/5

（㎡）

Downward rent revision(by leased area)

Upward rent revision(by leased area)

Percentage of office rents

1,925.09

（10）

2,334.71

（13） 1,849.78

（11）

2,849.39

（14） 1,585.83

（11） 1,765.03

（8）

1,718.87

（10）

2,313.09

（13）

1,740.54

（6）

2,179.55

（11）

5.3

2.8

4.2

3.4 3.4

0

1

2

3

4

5

6

0

500

1,000

1,500

2,000

2,500

3,000

FP 232013/5

FP 242013/11

FP 252014/5

FP 262014/11

FP 272015/5

（㎡） Move-in (area) Move-out (area) Average free rent duration

The number of properties for which rent increased at the time of tenant replacement rose

Long-term vacancies were utilized, and occupancy rates improved

5 Internal Growth(2): Status of Office Moving in/out

Status of rent revisions Reasons for moving in/out of our properties

Status of New Tenants Occupancy Rates and Vacancy Duration （number of months）

(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.

6.4

3.7 4.3

1.7

9.2

96.60 96.96

96.02 96.27

97.34

90.0

92.0

94.0

96.0

98.0

100.0

0.0

2.0

4.0

6.0

8.0

10.0

FP232013/5

FP242013/11

FP252014/5

FP262014/11

FP272015/5

(％) (Month) Average Vacancy Duration

Occupancy Rates

(Note) The average office vacancy duration is defined as the vacancy duration for offices with

new tenants.

FP25 FP26 FP27 FP25 FP26 FP27

Opening of New Offices 4 4 1

Expansion and Relocation 6 6 7 4 2

Improved location 1 3 2 1

Downsizing and relocation 2 1 3

Integration of bases 4 1 1

Cost reductions 1 2 3

Withdrawal from business 2 2

Eviction 1 1

Concerns about

earthquake resistance

etc 1

11 14 11 13 6 11

Positive

Negative

Reason for Move in Reason for Move out

15

57 58 91 105 129

20 20 28

33 27

122 125 142 129 124

9.71%

8.25% 7.38%

6.34%

4.10%

0%

20%

40%

60%

80%

100%

0%

2%

4%

6%

8%

10%

12%

FP 232013/5

FP 242013/11

FP 252014/5

FP262014/11

FP272015/5

Number of Positive tenants Number of No rent gap tenant

Number of negative gap tenants Deviation Rate(excluding supecific building)

Average rent at the end of the fiscal period rose as a result of acquisition of properties in central Tokyo

Rise in market rents resulted in reduction in rent gap: number of positive gap properties increased

Average Office Rent Trends Rent Gap Trends

（Note) “Positive gap” refers to the tenant’s rent being lower than the market rent.

(Note) “Negative gap” refers to the tenant’s rent being higher than the market rent.

6 Internal Growth (3) : Status of Office Operations

Lower than-10％

30.8％（13）

Between -10% to 0%

18.8%

（15）

±0 10.4%

（11）

Between 0% to +10%

11.7%

（18）

Over +10% 28.3%

（7）

Rent gap for tenants who are due to renew their lease in the 28th FP

(rent / market rent)

Status of Existing Tenant Rent Revision

（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) Based on the leasing contract floor space for office properties in the 27th FP, excluding store

districts and Kayabacho Heiwa Building.


15,608yen 15,453yen

14,854yen 14,732yen 14,793yen

16,358yen 16,518yen

16,098yen 16,022yen 15,981yen

13,569yen 13,401yen 13,371yen

13,181yen 13,105yen

FP 232013/5

FP 242013/11

FP 252014/5

FP 262014/11

FP 272015/5

12,000

13,000

14,000

15,000

16,000

17,000

18,000 Average Office rent Average rent for Tokyo 23 Wards

Average rent for Other Areas

-2.51% -1.40% -0.77%

-0.30%

-3.55%

0.20%

（7）

0.17%

（3）

0.09%

（5）

-0.02%

（1）

--0.24%

（4） -6.00%

-4.50%

-3.00%

-1.50%

0.00%

1.50%

-0.3%

-0.2%

-0.1%

0.0%

0.1%

FP 232013/5

FP 242013/11

FP 252014/5

FP 262014/11

FP 272015/5

Percentage of Office Area Percentage of Office Rent

（Note) Figures in parenthesis for the 27th FP indicate average office rent(including common

Service Charge) excluding the 3properties acquired of the 27th FP.

16

3.10%

（21）

1.33%

（9）

0.00%

（0）

0.00%

（0）

0.29%

（2）

96.02%

（651）

95.23%

（499）

93.52%

（765）

97.79%

（532）

96.08%

（613）

0.88%

（6）

2.36%

（16）

7.82%

（53）

1.77%

（12）

3.39%

（23）

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

FP272015/5

FP262014/11

FP252014/5

FP242013/11

FP232013/5

Rent Increase Rent Unchange Rent Decrease

Improved rent revision status: Turned residential rent variation rate when new tenants move in into a positive figure

7 Internal Growth (4) : Residential rental trends

Status of New Residence Tenants Status of Rent revisions


Rent

Variation

+1.09％

Tenants Turnover Trends

△1.68％

△1.69％

△0.82％

△0.23％

Rent

Variation

+0.05％

△4.49％

△3.68％

△0.11％

+0.01％

（Note) Figures in parenthesis for the 27th FP indicate average residence rent(including common Service Charge)

excluding the 1properties acquired of the 27th FP.

Average of Residence Rent Trends

(Note 1) Figures in parenthesis indicate the number of residential tenants that have moved in or departed.

(Note 2) The new tenant rate and terminated lease rate for the 24th Fiscal Period are calculated without including the

3 properties sold during the 24th Fiscal Period

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

(Note) New tenants in the 24th Fiscal Period exclude the 3 properties sold during the 24th Fiscal Period

28.04% (553)

22.50% (434)

29.57% (563)

23.75% (459)

25.20% (506)

27.48% (542)

23.28% (449)

28.73% (547)

21.93% (474)

27.64% (555)

0%

10%

20%

30%

40%

FP 232013/5

FP 242013/11

FP 252014/5

FP 262014/11

FP 272015/5

New tenant rate(annualized) Turnover rate(annualized)

13,414yen 13,343yen 13,324yen 13,327yen 13,310yen



8,519yen 8,648yen 8,641yen 8,660yen 8,608yen (8,674yen)


(11,361yen）

7,000yen

8,000yen

9,000yen

10,000yen

11,000yen

12,000yen

13,000yen

14,000yen

FP232013/5

FP242013/11

FP252014/5

FP262014/11

FP272015/5

Tokyo Central 5 Wards Tokyo 23 Wards

Tokyo Surrounding Areas Other Areas

Average residential rent

50.50% (255)

38.13% (175)

39.79% (224)

33.41% (145)

37.07% (205)

19.41% (98)

21.35% (98)

16.70% (94)

17.97% (78)

15.37% (85)

30.10% (152)

40.52% (186)

43.52% (245)

48.62% (211)

47.56% (263)

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

FP 272015/5

FP 262014/11

FP 252014/5

FP 242013/11

FP 232013/5

Rent Increase Rent Unchanged Rent Decrease

17

95.76% 96.05% 96.09% 96.53% 96.92%

96.04% 96.80% 96.26% 95.64% 96.53%

96.92% 95.35% 96.56% 97.53% 97.83%

97.15% 96.98% 97.25% 97.58% 97.30%

90%

95%

100%

FP 232013/5

FP 242013/11

FP 252014/5

FP 262014/11

FP 272015/5

Tokyo Central 5Wards Tokyo 23 Wards

Tokyo Surrounding Areas Other Areas

Reduced downtime, increase occupancy rate

Average Occupancy Rates of Residences by Investment Area Occupancy Rates and Vacancy Duration

Residence Occupancy Rate by Room Type

0%

8 Internal Growth (5) : Status of Residential Operations

Trends in key money, renewal fees

23rd FP

2013/5

24th FP

2013/11

25th FP

2014/5

26th FP

2014/11

27th FP

2015/5

No. of properties for which key

money obtained 202 119 171 112 169

Ratio of key money taken 36.53% 26.92% 30.37% 24.40% 33.47%

No. of months’ key money 1.11 1.12 1.07 1.04 1.08

No. of properties for which

rental contract was renewed 829 680 995 685 889

Renewal rate 78.41% 80.00% 82.21% 76.50% 76.27%

No. of months’ renewal fee 1.04 1.02 0.94 0.89 0.85

Room Type

(Floor space)

Percentage of

Holdings

(in number of

units)

23rd FP

Occupancy

Rate

24th FP

Occupancy

Rate

25th FP

Occupancy

Rate

26th FP

Occupancy

Rate

27th FP

Occupancy

Rate

Single Type

（Under 40㎡） 80.80% 96.69% 95.89% 97.20% 97.86% 96.39%

DINKS Type

（Between 40㎡to 60㎡）

14.64% 96.54% 96.50% 94.25% 95.98% 95.21%

Family Type

（Above 60㎡) 4.56% 98.02% 98.22% 93.01% 96.66% 97.44%

Total 100.00% 96.80% 96.29% 96.06% 97.31% 96.25%

(Note) Excluding shops and office areas.

21 23 18 15 16

38 39 37

52 30

96.4 96.5 96.5 96.6 97.0

90

92

94

96

98

100

0

20

40

60

80

FP232013/5

FP242013/11

FP252014/5

FP262014/11

FP272015/5

(％) (Day) Average Leasing Duration Average Restoration Duration

Occupancy Rates

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

restoration work completion.

18

Implemented renovation work

- Improved utilization rate and expand profitability

- Improved appraisal value

9 Internal Growth(6) : Refurbishment Construction Work

Change in Capital Expenditure

Of-32 HF Sendai Honcho Building Nature of renovation work ・ Improved communal corridors

・ Improved wet areas

・ Improved inside of elevator cage

Application status following renovation

・ 2/2015 11F (72.49m2) Apply to move in

・ 3/2015 10F(135.90m2) Apply to move in

Status of properties following renovation

・ NOI: 26th FP ¥ 85,054thousond⇒27thFP ¥ 87,761thousand ・ Occupancy Rate： 26th FP 93.04％ ⇒ 27th FP 97.31％・ Appraisal Value： 26th FP ¥3,050million ⇒27th FP ¥3,090 million

After

Before

7.7 7.7 8.3 8.4

9.0

2.7 3.3 3.2

5.1

3.5

0.0

2.5

5.0

7.5

10.0

FP232013/5

FP242013/11

FP252014/5

FP262014/11

FP272015/5

（100 million yen）

Depreciation Capital Expenditure Amount

19

(15,000)

(12,000)

(9,000)

(6,000)

(3,000)

0

3,000

6,000

9,000

FP16 FP17 FP18 FP19 FP20 FP21 FP22 FP23 FP24 FP25 FP26 FP27

（million yen）

New investment assets Existing assets Total

10 Historical Appraisal Values

Increase in latent profits for newly acquired properties, existing properties shift to latent profits

Appraisal value increase: 84 properties Appraisal value unchanged: 9 properties

Appraisal value decrease: 2 properties(compared to each respective prior period (note))

Appraisal Value at end of 27th FP

156,910 million yen

Unrealized Gain

6,106 million yen

FP 16 FP 17 FP 18 FP 19 FP 20 FP 21 FP 22 FP 23 FP 24 FP 25 FP26 FP 27

New Investment assets 790 804 1,384 1,617 2,976 3,365 4,602

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

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

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

77

52

83 90

84

3

26

5 2 9 8 10 4 0 2

0%

20%

40%

60%

80%

100%

FP23 FP24 FP25 FP26 FP27

Decrease

Unchanged

Increase

20

Financial position grew stronger

Raise the Rating : JCR A-(stable) → A(Stable)

11 Financial Strategies (1) : Financial Status (1)

Lenders and borrowing amounts End of 27th FP Interest-bearing Liabilities Summary

Shelf registration of investment corporation bonds

Shelf registration amount 10 billion yen

Effective period of comprehensive

resolution on issuance of bonds Until May 2, 2016

Credit Commitment Lines

（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 FPE / 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

Sumitomo Mitsui Banking Corporation

Loan Commitment

From: April 1, 2015To: May 31, 2016

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



billionyen 2.0 billion

yen 1.5 billionyen

Lender's name Amount Share Lender's name Amount Share

Sumitomo Mitsui Banking 17,222 24.1% Bank of Fukuoka 1,385 1.9%

Aozora Bank 15,894 22.3% Mitsubishi UFJ Trust and Banking 1,385 1.9%

Resona Bank 11,500 16.1% ORIX bank 1,280 1.8%

Bank of Tokyo-Mitsubishi UFJ 6,085 8.5% Shinsei Bank 1,185 1.7%

Mizuho Trust & Banking 6,017 8.4% Nomura Trust and Banking 985 1.4%

Sumitomo Mitsui Trust Bank 3,329 4.7% Mizuho Bank 800 1.1%

Development Bank of Japan 1,900 2.7% Sompo Japan Nipponkoa Insurance 469 0.7%

Norinchukin 1,477 2.1% The 77 Bank 400 0.6%

Average Interest

Rate

Average Loan

Term

Average Remaining

Term to MaturityLTV

(Note 1)

Appraisal-based

LTV(Note 2)

1.252% 5.76years 3.61years 43.1% 45.4%

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)

90.2% 83.7% 16.3% A- (Stable) A (Stable)

21

Lengthened maturities and diversified repayment dates

Lowered interest rates


Financing Status of the 27th Fiscal Period

Loan Maturity Diversification

Trends of average loan maturity and interest rate

Fixed Rate Interest ratio

Fixed ratio 90.2％

5,820 5,800 5,857 4,265 9,630 3,900 3,331 3,500 6,070 5,730 5,709 1,000 2,400

1,300

1,300

700

480

900

3,620

4,800

1,200

0

5,000

10,000

15,000

FP27 FP28 FP29 FP30 FP31 FP32 FP33 FP34 FP35 FP36 FP37 FP38 FP39 FP40 FP41 FP42 FP43

(million yen)

FP 27 Repayment

FP 27 refinanced Loans

Loans

Fixed rate 17.0%

Interest rate Swap 25.6%

Interest rate Cap

47.6%

Floating rate 9.8%

3.38 3.30

2.36 3.14

3.68 4.09 4.07

4.51 4.93 5.16 5.41 5.76

1.78 1.53 1.35 1.85 2.10 2.22 3.10 3.26 3.46 3.53 3.53 3.61

1.902% 1.932% 2.055%

1.896% 1.864% 1.836%

1.609% 1.497%

1.397% 1.297% 1.276% 1.252%

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

FP16 FP17 FP18 FP19 FP20 FP21 FP22 FP23 FP24 FP25 FP26 FP27

(year) Average Loan Term

Average Remaining Term to Maturity

Average Interest Rate Loan Amount

(million yen) Interest Rate

Borrowing

Date

Maturity

Date

Loan Term

(year)

Term Loan 25A 1,300 1M Tibor + 0.35% 04-Dec-14 31-May-18 3.49

Term Loan 25B 1,300 1M Tibor + 0.40% 04-Dec-14 31-Oct-18 3.91

Term Loan 25C 900 1.24348%(Fixed) 04-Dec-14 31-Oct-22 7.91

Term Loan 26A 700 1M Tibor + 0.35% 29-May-15 31-May-19 4.01

Term Loan 26B 480 1M Tibor + 0.60% 29-May-15 31-Oct-21 6.43

Term Loan 26C 3,620 1M Tibor + 0.75% 29-May-15 31-May-23 8.01

22

5,376

2,911

4,287 4,614 4,695

3,900 4,190

4,694 5,018

5,851

6,347 6,375

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

FP 162009/11

FP 172010/5

FP 182010/11

FP 192011/5

FP 202011/11

FP 212012/5

FP 222012/11

FP 232013/5

FP 242013/11

FP 252014/5

FP 262014/11

FP 272014/5

（million yen）

Continued to lower our LTV

Expanded investment capacity by borrowing


Trends in ratio of interest-bearing liabilities to total assets（LTV）

Composition of short term debt

Borrowing capacity until appraisal based LTV = 55%

Trends of free cash （FC） amount

（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 FPE / Appraised Value as of FP End

(Note) FC = (Total current assets - Allowance for doubtful accounts) - ((Total current liabilities - Current portion of long-term loans payable - short-term debt -

Current portion of investment corporation bonds repayable) + (Tenant leasehold and security deposits + Tenant leasehold and security deposits in trust))

18,000 24,540 27,830

44,360

25,940

39,110

50,900 51,880 53,770 58,480 58,392 59,692 20,100

15,420

42,430 17,820

36,090

24,830

12,950 13,050 11,430 10,530 10,620 11,620

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

FP 162009/11

FP 172010/5

FP182010/11

FP 192011/5

FP 202011/11

FP 212012/5

FP 222012/11

FP 232013/5

FP 242013/11

FP 252014/5

FP 262014/11

FP 272014/5

（million yen） Long-term Loan

Long-term Loan scheduled to mature within 1 year

13,413 13,413

1,327

5,623 5,996 4,587 5,511

13,930 14,484

20,811

24,034

33,308

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

FP 162009/11

FP 172010/5

FP182010/11

FP 192011/5

FP 202011/11

FP 212012/5

FP 222012/11

FP 232013/5

FP 242013/11

FP 252014/5

FP 262014/11

FP 272014/5

（million yen）

37.4 38.3

45.8

44.9 45.0 45.7 45.6 44.2 44.3 44.0 43.8

43.1

47.4 47.7

54.5 52.8 52.7 53.2 52.9

50.2 50.0 48.4

47.5

45.4

35

40

45

50

55

60

FP 162009/11

FP 172010/5

FP182010/11

FP 192011/5

FP 202011/11

FP 212012/5

FP 222012/11

FP 232013/5

FP 242013/11

FP 252014/5

FP 262014/11

FP 272014/5

(%)

ＬＴＶ Appraisal-based LTV

Borrowing Capacity

LTV=55% ¥33.3 billion

LTV=50% ¥14.3billion

23

14 Future 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, warehousing, bridging loans, bulk

sales, M&A, debt purchasing, CRE proposals, etc.

Continue switching strategies

・ In order to improve portfolio quality and

profitability, switch from low profitability

properties, regional small-scale residences, non-

core asset hotels, 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 Operations

Create a stable debt structure

・ Create a debt structure that is not vulnerable to

fluctuations in market interest rates, by extending

loan periods, staggering repayment terms, and

fixing interest rates on borrowings

Control of LTV

・ Create a strong financial base that will allow

ongoing expansion of the portfolio even when the

credit environment has deteriorated or during

periods when it is difficult to procure equity by

properly controlling LTV in accordance with the

financial environment and property acquisition

environment

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

Distribution：1,719yen/unit (forecast 28th FP)

Sustained dividend growth

Stabilization of dividend by utilizing retained earnings

・ 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

24

Diversify property acquisition methods by utilizing sponsors’ support

Increase opportunities to acquire assets through the diversification of property acquisition methods

Hirokoji Aqua

Place

HF

SAKURADORI

BUILDING

HF Nihonbashi

Hamacho Building

HF Sendai Honcho

Building

Kayabacho

Heiwa Building

Kobe

Kyukyoryuchi

Heiwa Building

Sakae Minami

Heiwa Building

HF WAKAMATSU KAWADA

RESIDENCE

Daiwa Ueno

Building

Kojimachi

HF Building

Mita Heiwa

Building (Land)

(Appendix) Diversification of Property Acquisition Methods

Total of acquisition prices

since strengthening of

sponsorship*

33,606 Million yen

（As of end of

June,2015)

Sponsors’ Support Direct acquisitions from sponsors

4properties 10,918million yen

Warehousing 6properties16,780million yen

Utilizing bridge funds

2properties 4,750million yen

Direct acquisitions from third

parties

1properties1,158million yen

HF Kudan- Minami

Building

HF Sendai

Residence

EAST

Ratio of acquisition from HEIWA REAL ESTATE

since strengthening of sponsorship 96.6％

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

Ⅲ Appendix

26

1 Balance Sheet

Share Share Share Share Share Share

（％）（％）（％）（％）（％）（％）

(Assets) (Liabilities)

Ⅰ　Current assets Ⅰ　Current Liabilities

Cash and deposits 6,472,394 6,073,141 (399,253) Accounts payable 615,028 479,937 (135,091)

Cash and deposits in trust 5,726,641 6,278,912 552,271 Current portion of long-term loans payable 10,620,000 10,620,000 0

Accounts receivable-trade 103,949 88,270 (15,679) Accured expenses 658,496 694,768 36,272

Prepaid expenses 250,304 229,357 (20,947) Income taxes payable 0 0 0

Consumption taxes receivable 0 144,396 144,396 Accrued consumption taxes 97,748 - (97,748)

Other 7,051 5,672 (1,379) Advances received 779,315 856,028 76,713

Allowance for doubtful accounts △ 387 △ 213 174 Other 8,284 8,567 283

Current assets 12,559,953 8.0 12,819,537 7.8 259,584 2.1 Total current liabilities 12,778,872 8.1 13,659,302 8.3 880,430 6.9

Ⅱ　Noncurrent assets Ⅱ　Noncurrent liabilities

1. Property, plant and equipment Note 1 Long-term loans payable 58,391,700 59,691,700 1,300,000

Buildings 9,178,448 8,803,359 (375,089) Tenant leasehold and security deposits 922,620 904,062 (18,558)

Structures 40,685 38,666 (2,019) Tenant leasehold and security deposits in trust 3,132,314 3,501,369 369,055

Machinery and equipment 119,481 118,180 (1,301) Derivatives liabilities 123,460 132,598 9,138

Tools, furniture and fixtures 63,286 62,204 (1,082) Total noncurrent liabilities 62,570,095 39.8 64,229,729 38.8 1,659,634 2.7

Land 27,452,042 25,945,334 (1,506,708) Total liabilities 75,348,968 47.9 77,889,032 47.1 2,540,064 3.4

Buildings in trust 34,896,392 37,763,471 2,867,079 (Net assets)

Structures in trust 237,657 238,900 1,243 Ⅰ　Unitholders' equity

Machinery and equipment in trust 250,244 267,664 17,420 1. Unitholders' caｐital Note 2 70,527,819 44.8 76,372,303 46.2 5,844,484 8.3

Tools, furniture and fixtures in trust 283,249 295,039 11,790 2. Surplus

Land in trust 67,315,435 73,240,003 5,924,568 Capital surplus 7,406,652 4.7 7,406,652 4.5 0

Total property, plant and equipment 139,836,924 88.9 146,772,826 88.7 6,935,902 5.0 Unappropriated retained earnings 4,564,300 2.9 4,175,031 2.5 (389,269) (8.5)

2. Intangible assets Total surplus 11,970,952 7.6 11,581,683 7.0 (389,269) (3.3)

Leasehold right 715,719 715,719 0 Total unitfolders' equity 82,498,771 52.4 87,953,987 53.2 5,455,216 6.6

Leasehold rights in trust 3,315,665 3,315,665 0 Ⅱ　Valuation and translation adjustments

Other 2,485 1,301 (1,184) Deferred gains or losses on hedges (464,957) (445,640) 19,317

Total intangible assets 4,033,871 2.6 4,032,686 2.4 (1,185) △ 0.0 Total valuation and translation adjustments (464,957) (0.3) (445,640) (0.3) 19,317 (4.2)

3. Investments and other assets Total net assets Note 3 82,033,814 52.1 87,508,346 52.9 5,474,532 6.7

Investment securities 143,061 1,000,083 857,022 Tatal liabilities and net assets 157,382,782 100.0 165,397,378 100.0 8,014,596 5.1

Guarantee deposits 10,016 10,016 0 Note 1 The cumulated depreciation is directly subtracted from property, plant and equipment

Long-term prepaid expenses 434,040 399,492 (34,548) cumulated depreciation

Derivatives 134,898 102,397 (32,501) 26th f iscal period： 9,858,918 thousand yen 27th f iscal period： 10,686,946 thousand yen

Other 195,396 207,556 12,160 Note 2 Total outstanding investment units

Total investments and other assets 917,413 0.6 1,719,546 1.0 802,133 87.4 26ｔｈ f iscal period： 881,447 units 27ｔｈ f iscal period： 951,147 units

Total noncurrent assets 144,788,209 92.0 152,525,060 92.2 7,736,851 5.3 Note 3 Net assets per investment unit

Ⅲ　Deferred assets 26th f iscal period： 93,067 yen 27th f iscal period： 92,002 yen

Investment unit issuance expenses 34,619 52,780 18,161

Total deferred assets 34,619 0.0 52,780 0.0 18,161 52.5

157,382,782 100.0 165,397,378 100.0 8,014,596 5.1

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

Total assets

May 31, 2015

Amount Amount Amount Amount Amount

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

　　　　　　　　　　　　　　　　　　　 Period

　

　　　　　　Category

26th Fiscal Period 27th Fiscal PeriodVariation Period

Category

26th Fiscal Period

Amount

27th Fiscal PeriodVariation

November 30, 2014 May 31, 2015 November 30, 2014

27

2 Profit and Loss Statement

Share Share Share

(％) (％) (％)

Operating revenue Note 1

Rent revenue-real estate 4,650,423 4,975,976

395,900 438,527

- -

6,395 5,052,718 100.0 1,031 5,415,535 100.0 362,817 7.2

Operating expenses

Note 2 2,269,925 2,421,026

0 559,833

455,872 486,101

19,346 19,347

39,575 41,953

8,006 8,006

9,664 9,660

101,572 2,903,964 57.5 108,968 3,654,898 67.5 750,934 25.9

Operating income (loss) 2,148,754 42.5 1,760,636 32.5 (388,118) (18.1)

Non-operating income

818 1,145

817 623

2,243 3,880 0.1 1,762 3,530 0.1 (350) (9.0)

Non-operating expenses

501,843 497,969

134,377 130,536

11,834 17,834

2,316 650,372 12.9 5,387 651,727 12.0 1,355 0.2

Ordinary income (loss) 1,502,261 29.7 1,112,439 20.5 (389,822) (25.9)

Income (Loss) before income taxes 1,502,261 29.7 1,112,439 20.5 (389,822) (25.9)

Income taxes-current 605 605

Income taxes 605 0.0 605 0.0 0 0.0

Net income (loss) 1,501,656 29.7 1,111,834 20.5 (389,822) (26.0)

Retained earnings brought forward 3,062,643 3,063,196 553

4,564,300 4,175,031 (389,269)

　* 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 26th f iscal period and 182 days for the 27th f iscal period.

Note 2 The depreciation costs of this total are 838,593 thousand yen for the 26th f iscal period and 838,194 thousand yen for the 27th f iscal period.

Amount

Variation

(unit: thousand yen)

Interest expenses

Dividends income

Other lease business revenue

Amount

　　　　　　　　　　　　　　　　　　　　　　　　　　　　Period

　　　　　Category

26ｔｈ Fiscal period 27ｔｈ Fiscal period

(Jun. 1, 2014-Nov 30, 2014) (Dec. 1, 2014-May 31, 2015)

Amount

Gain on sales of real estate properties

Loss on sales of real estate propertoes

Unappropriated retained earnings (undisposed loss)

Audit fee

Directors' compensations

Administrative service fees

Expenses related to rent

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

28

3 Debts

as of May 31, 2015

Aozora Bank, Ltd. Development Bank of Japan Inc.


Resona Bank, Limited. Sumitomo Mitsui Banking Corporation

Aozora Bank, Ltd.

Sumitomo Mitsui Banking Corporation Resona Bank, Limited.

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

Mizuho Trust & Banking Co., Ltd.

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

Resona Bank, Limited.

Sumitomo Mitsui Banking Corporation The Bank of Tokyo-Mitsubishi UFJ, Ltd.

Sumitomo Mitsui Trust Bank, Limited.

ORIX Bank Corporation


Aozora Bank, Ltd. Sumitomo Mitsui Banking Corporation

Resona Bank, Limited. The Norinchukin Bank

The Bank of Fukuoka

Sompo Japan Nipponkoa Insurance



Resona Bank, Limited. Aozora Bank, Ltd.

Mizuho Trust & Banking Co., Ltd.

Aozora Bank, Ltd. The Bank of Fukuoka



Sumitomo Mitsui Banking Corporation Sumitomo Mitsui Trust Bank, Limited.

Aozora Bank, Ltd. The Bank of Fukuoka

Resona Bank, Limited. Mitsubishi UFJ Trust and Banking Corporation

The 77 Bank, Ltd.



Shinsei Bank, Limited. Aozora Bank, Ltd.


Sumitomo Mitsui Banking Corporation The Bank of Fukuoka

Aozora Bank, Ltd. Mitsubishi UFJ Trust and Banking Corporation

Resona Bank, Limited. The 77 Bank, Ltd.


Development Bank of Japan Inc.



Resona Bank, Limited. Aozora Bank, Ltd.

Shinsei Bank, Limited.

ORIX Bank Corporation



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


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

Mizuho Bank, Ltd.

The Nomura Trust and Banking Co., Ltd.

Mitsubishi UFJ Trust and Banking Corporation


Aozora Bank, Ltd.



May 31, 2019

0.73000 May 29, 2015 October 31, 2021

0.88000 May 29, 2015 May 31, 2023

Unsecured and

Unguaranteed

Total 62,861.7

May 31, 2016

Term Loan26　TrancheA

700

Term Loan26　TrancheB480

Term Loan26　TrancheC

3,620.0

Subtotal 50,041.7

Term Loan22　TrancheB1,000 1.46168 December 20, 2013

May 31, 2021

6,070 1.07182

Term LoanG

October 25, 2012

Term Loan13　TrancheD

3,500 1.37182 October 25, 2012 October 31, 2017

Term Loan15

Term Loan23　TrancheB1,000 1.20000 May 30, 2014 October 31, 2021

October 31, 2022

October 31, 2022

0.48000 May 29, 2015

1.22182

Long-term

loans

payable

March 29, 2013 March 31, 2020

Term Loan11

5,857 1.37182 October 31, 2011 October 31, 2016

May 31, 2021

Term Loan201,230 1.20000 September 13, 2013

4,500 1.20000 October 31, 2013

Term Loan16

3,900 1.12982 October 31, 2012

Term Loan25　TrancheC900 1.24348 December 4, 2014

4,000 2.14200 May 31, 2011 May 31, 2016

Term Loan21　TrancheB

October 30, 2020


1,970

Breakdown Balance at

Period End

(million yen)

Interest Rate

(%)

Borrowing

Date

Repayment

DateDescription

Lender

Breakdown Balance at

Period End

(million yen)

Interest Rate

(%)

Borrowing

Date

Repayment

DateDescription

Lender

2,400 1.17500 October 31, 2014

Subtotal 12,820

Term Loan9

2,820 2.05909 October 27, 2010 October 31, 2015

Term Loan12

3,000 1.22182 March 30, 2012 October 30, 2015

6,130 1.89206


4,708.7 1.16500 May 30, 2014

Term Loan14

May 31, 2012

800 0.75000 October 31, 2014 May 31, 2019


2,531 0.61300 October 31, 2014 May 31, 2019

Long-term

loans

payable

Due within

One Year

Unsecured and

Unguaranteed

Long-term

loans

payable

Unsecured and

Unguaranteed

2,295 1.02982 October 31, 2012 May 31, 2017



May 31, 2018

Term Loan17

3,500 1.27182 October 31, 2012 October 31, 2019

Term Loan19

October 31, 2020

0.60700 October 31, 2013 May 31, 2017

October 31, 2017


3,000


1,300.0 0.48000 December 4, 2014 May 31, 2018


1,300.0 0.53000 December 4, 2014 October 31, 2018

29

Office Residence Hotel

4 Diversification of Investment Areas

7.7％

7properties 12.03billion yen

6.9% 10properties 10.73billion yen

Surrounding

Area of Tokyo

Kansai Nagoya 7.5％


Sendai

Metropolitan Area Total

79.1％

71 properties 122.67billion yen

1.7％


Tokyo 23 wards

71.4％

64 properties 110.64billion yen

The height of the bars indicates the asset size of each property type in each

area (as of the end of May 2015, based on acquisition price)

5.0％


Fukuoka

30

5 Office Portfolio Performance (Tenant Condition, Tenant Diversification by Area, Rent Share and Asset Age)

Office Tenant Condition

Ranking Tenant Property Name Share of total rent

1 Company A Kayabacho Heiwa Bldg 4.02%

2 Company B Super Hotel

(4 properties) 2.98%

3 Company C HIROKOJI AQUA PLACE 1.65%

4 Company D HF SAKURADORI

BUILDING 1.52%

5 Company E Funabashi Face Bldg. 1.29%

Total 11.45%

Tenants with Largest Rent Share (Includes Residence and Hotel)

Tenant Diversification by Area Office Asset Age

Average office asset age

21.25 years

Total number of office tenant

280 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 management status of offices below is calculated with figures as of May 31, 2015.

5 to 10 years 14.73%

(3)

10 to 15 years 13.41%

(4)

15 to 20 years 3.51%

(1)

20 years or more

68.35% (21)

Less than 50 tsubos 45.00%

（126）

50 to 100 tsubos 32.14%

（90）

100 to 200 tsubos, 15.00%

（42）

200 tsubos or more 7.86%

（22）

Manufacturing, 16.73%

Wholesale and retail trade, 16.73%

Scientific research, professional and

technical services, 15.30%

Information and communications, 14.59%

Construction, 6.41%

Finance and insurance, 5.69%

（Not elsewhere classified

） Services, 5.34%

Real estate and goods rental and leasing, 4.63%

Medical health care and welfare, 4.27%

Transport and postal activities, 3.56%

Accommodations, eating and drinking services,

2.85%

Education, Learning support, 1.78%

Living-related and personal services and amusement

services, 1.78%

Compound Services, 0.36%

31

Residence Types

Agreement Categories Gender Breakdown for Individual Contracts Age Distribution

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

Average residence asset age

10.86years

(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 May 31, 2015.

Number of residential tenants

3,889 tenants

Number of leasable units

4,016 units

(Note) Figures in parenthesis are the number of residential

properties by building age.

(Note) The management status of residences below is calculated with figures as of May 31, 2015.

6 Residential Portfolio Performance (Residence Types, Tenant Diversification by Rent, by Leasable Floor Space and by Asset Age)

Individual 68.64%

Corporate 31.36% Male

54.55% Female 45.45%

Teens 0.04%

20s 26.31%

30s 37.41%

40s 18.38%

50s or more

17.10%

Unknown 0.76%

Less than 100 thousand yen

55.34%

（2,152）

100 to 150 thousand yen

28.28%

（1,100）


11.31%

（440）


3.99%

（155）

300 thousand yen or more

1.08%

（42）

Less than 30㎡

65.81%

（2,643）

Less than 40㎡

14.99%

（602）

Less than 50㎡

9.51%

（382）

Less than 60㎡

5.13%

（206）

Less than 70㎡

1.74%

（70）

Less than 80㎡

1.32%

（53）

Less than 90㎡

1.17%

（47）

Less than 100㎡

0.20%

（8）

100㎡ or more

0.12%

（5）

5 to 10 years 42.08%

（29）

10 to 15 years 52.22%

（29）

15 to 20 years 4.60%

（2）

20 years or more 1.10%

（1）

32

Total 26th Fiscal Period 27th Fiscal Period

Rents and common expenses 4,650,423 4,975,976

Other income 395,900 438,527

Rental business income total 5,046,323 5,414,504

PM fees 534,423 556,222

Public charges and taxes 358,550 360,622

Utilities 230,298 237,898

Maintenance and repair fees 144,385 188,239

Insurance fees 4,955 5,366

Trust fees 46,307 47,513

Other expenses 112,411 123,908

Rental business expenses total 1,431,332 1,519,770

NOI 3,614,991 3,894,733

Depreciation 838,593 898,194

Rental business profit 2,776,397 2,996,538

Office 26th Fiscal Period 27th Fiscal Period


Other income 276,675 300,572


PM fees 250,252 267,348


Utilities 200,323 206,868



Trust fees 12,013 12,992


Rental business expenses total 806,641 842,200

NOI 1,515,244 1,751,160



Residence 26th Fiscal Period 27th Fiscal Period


Other income 119,224 137,955


PM fees 284,170 288,873


Utilities 29,974 31,030



Trust fees 31,993 32,221



NOI 1,971,568 2,014,007



Hotel 26th Fiscal Period 27th Fiscal Period

Rents and common expenses 148,758 148,758

Other income - -

Rental business income total 148,758 148,758

PM fees - -


Utilities - -

Maintenance and repair fees 1,590 -

Insurance fees 182 181

Trust fees 2,300 2,300

Other expenses - 342


NOI 128,178 129,565


Rental business profit 100,116 101,493

(unit: thousand yen)

7 Profits from Rental Business

33

Property Name

Of-01

HF GOTANDA BUILDING

Of-05

Suitengu Heiwa Building

Of-06

HF MONZENNAKACHO

BUILDING

Of-07

HF HAMAMATSUCHO

BUILDING

Of-08

Kokusai Tameike Building

Address Shinagawa-ku, Tokyo Chuo-ku, Tokyo Koto-ku, Tokyo Minato-ku, Tokyo Minato-ku, Tokyo

Lot Area (m2) 605.72 316.73 748.36 294.50 533.32

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

Constructed May 1980 August 1991 December 1990 December 1991 February 1992

Period-end occupancy rate (%) 100.00 100.00 100.00 100.00 100.00

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

Appraisal Price (mm yen) 1,308 1,303 2,350 1,520 2,510

Property Management Company Heiwa Real Estate Co., Ltd. Heiwa Real Estate Co., Ltd. Heiwa Real Estate Co., Ltd. Heiwa Real Estate Co., Ltd. Heiwa Real Estate Co., Ltd.

PML (%) 10.9 10.0 5.7 8.0 7.3

Rental business balance (Note 1) 26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

Operation days 183 182 183 182 183 182 183 182 183 182

Rents and common expenses 45,168 45,299 45,160 45,903 81,670 80,897 44,721 47,447 73,433 73,433

Other income 4,409 4,568 6,885 5,910 11,630 10,399 5,220 5,446 9,632 8,493

①Rental business income total

(unit: thousand yen) 49,577 49,868 52,046 51,814 93,301 91,297 49,941 52,893 83,066 81,927

PM fees 5,682 5,638 6,516 6,664 10,901 10,827 4,880 4,310 5,713 5,633

Public charges and taxes 5,446 5,517 4,878 4,896 5,915 5,975 6,499 6,602 7,177 7,219

Utilities 3,396 3,292 6,333 5,515 10,788 9,397 4,663 4,626 7,420 6,456

Maintenance and repair fees 850 1,786 4,916 424 1,805 2,745 237 2,628 1,180 3,683

Insurance fees 55 55 43 42 80 80 40 39 60 60

Trust fees 1,025 1,025 690 690 900 900 750 750 1,366 1,366

Other expenses 384 347 40 40 157 362 143 115 241 82

②Rental business expenses total


③NOI (①－②) 32,735 32,206 28,628 33,540 62,751 61,006 32,727 33,819 59,905 57,425

Depreciation 9,482 9,627 7,955 7,999 16,597 16,681 6,885 6,852 7,444 7,351

Rental business profit 23,253 22,578 20,673 25,540 46,153 44,325 25,842 26,967 52,461 50,074

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

8 Portfolio Overview and Performance (Office)

34

Property Name Of-09 Grace Building

Sengakujimae

Of-10 HF SHIN-

YOKOHAMA BUILDING

Of-11 Nihonbashi Daiichi

Building

Of-12 Hatchobori SF

Building Of-13 Shibuya AX Hills

Address Minato-ku, Tokyo Yokohama City, Kanagawa Chuo-ku, Tokyo Chuo-ku, Tokyo Shibuya-ku, Tokyo

Lot Area (m2) 538.50 668.00 520.69 543.31 160.42


Constructed June 1994 February 1993 March 1988 October 1991 March 2006




Property Management Company Heiwa Real Estate Co., Ltd. Heiwa Real Estate Co., Ltd. Heiwa Real Estate Co., Ltd. Building Management &

Strategy Inc. Heiwa Real Estate Co., Ltd.

PML (%) 7.5 13.3 16.5 12.5 5.1


Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

Operation days 183 182 183 182 183 182 183 182 183 182


Other income 9,055 8,011 8,017 8,427 9,153 8,623 6,818 6,462 3,419 5,489



PM fees 5,236 4,858 7,913 7,745 6,040 5,844 6,546 7,834 3,533 4,423


Utilities 6,600 5,635 4,670 4,935 5,945 5,458 5,903 5,432 2,856 2,805

Maintenance and repair fees 1,123 478 636 464 1,482 264 521 687 5,639 1,897

Insurance fees 49 49 78 77 63 63 68 67 25 25

Trust fees 699 699 - - 1,255 1,255 - - - -

Other expenses 5,104 5,104 258 141 316 183 145 213 67 70



③NOI (①－②) 41,473 42,433 22,102 22,675 39,935 40,522 53,145 51,232 18,881 24,525

Depreciation 6,658 6,747 18,209 18,277 12,765 13,190 8,817 8,800 4,838 4,747




35

Property Name Of-15 HF NAKAMEGURO

BUILDING

Of-16 Anwa Tsukasacho

Building

Of-17 Hatchobori MF

Building Of-18 M2 Harajuku

Of-20 Funabashi Face

Building

Address Meguro-ku, Tokyo Chiyoda-ku, Tokyo Chuo-ku, Tokyo Shibuya-ku, Tokyo Funabashi City, Chiba

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


Constructed February 1988 October 1990 January 1988 January 1970 April 2003



Appraisal Price (mm yen) 2,120 1,120 956 4,385 2,960

Property Management Company Heiwa Real Estate Co., Ltd. Heiwa Real Estate Co., Ltd. Heiwa Real Estate Co., Ltd. Heiwa Real Estate Co., Ltd. Building Management &

Strategy Inc.

PML (%) 14.5 9.2 14.7 9.8 5.9


Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

Operation days 183 182 183 182 183 182 183 182 183 182


Other income 12,418 12,419 4,733 4,965 2,627 2,883 8,735 7,843 4,375 5,420



PM fees 7,460 9,118 2,571 2,949 2,752 2,407 5,169 5,278 25,731 17,806


Utilities 7,256 6,694 3,402 3,405 2,862 2,991 5,682 4,872 7,058 8,435

Maintenance and repair fees 2,817 1,960 342 811 5,602 786 708 730 - -

Insurance fees 79 78 27 27 26 26 31 29 76 75

Trust fees - - - - - - 1,401 1,401 - -

Other expenses 212 311 373 79 145 53 49 46 9 8



③NOI (①－②) 43,641 46,166 23,362 25,614 17,569 23,451 80,283 80,074 71,910 77,297

Depreciation 16,538 16,914 8,613 8,789 4,222 4,324 8,726 8,747 20,015 20,015

Rental business profit 27,102 29,252 14,748 16,825 13,347 19,126 71,556 71,326 51,895 57,281 (Note 1) Figures for rental business balance are the actual numbers for each period where values below 1,000 yen are rounded off.


36

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

Address Minato-ku, Tokyo Minato-ku, Tokyo Toshima-ku, Tokyo Bunkyo-ku, Tokyo Chuo-ku, Tokyo

Lot Area (m2) 125.91 260.55 188.31 400.86 811.59

Total Floor Area (m2) 371.59 1,489.21 1,376.66 2,393.53 5,038.57

Constructed October 2003 November 1990 December 1993 July 1989 April 1992


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

Appraisal Price (mm yen) 457 1,294 1,130 1,420 5,950

Property Management Company Heiwa Real Estate Co., Ltd. MS Building Support Co., Ltd. MS Building Support Co., Ltd. MS Building Support Co., Ltd. Heiwa Real Estate Co., Ltd.

PML (%) 11.1 9.2 5.5 10.9 11.7


Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

Operation days 183 182 183 182 183 182 183 182 183 182


Other income 1,826 1,565 2,954 4,341 4,496 3,466 4,981 4,804 10,968 10,395



PM fees 868 958 3,437 2,898 3,807 2,617 4,710 5,019 8,935 8,768

Public charges and taxes 766 766 3,612 3,651 2,114 2,108 2,497 2,494 8,891 8,890

Utilities 1,852 1,626 2,221 2,720 3,836 3,071 3,516 3,316 10,966 10,389

Maintenance and repair fees 980 98 203 528 303 381 662 233 483 442

Insurance fees 9 9 30 30 26 26 43 43 103 103

Trust fees 391 391 - - - - - - 1,148 1,148

Other expenses 9 8 56 84 384 477 4,076 4,091 10 44



③NOI (①－②) 8,002 8,760 27,213 28,682 25,185 26,286 37,995 38,126 181,236 181,416

Depreciation 2,259 2,296 4,280 4,349 4,860 4,900 6,752 6,810 8,726 8,742




37

Property Name Of-26 HIROKOJI AQUA

PLACE

Of-27 Kobe Kyukyoryuchi

Heiwa Building

Of-28 Mita Heiwa Building

(leasehold land)

Of-29 Sakae Minami Heiwa

Building

Of-30 HF SAKURADORI

BUILDING

Address Nagoya City, Aichi Kobe City, Hyogo Minato-ku, Tokyo Nagoya City, Aichi Nagoya City, Aichi

Lot Area (m2) 1,389.39 1,008.86 4,441.79 707.05 1,662.49

Total Floor Area (m2) 9,521.09 7,743.98 － 3,959.12 13,160.83

Constructed May 2008 February 1998 － July 2002 February 2009




Property Management Company Heiwa Real Estate Co., Ltd. Heiwa Real Estate Co., Ltd. － Heiwa Real Estate Co., Ltd. Heiwa Real Estate Co., Ltd.

PML (%) 10.6 7.5 － 10.8 9.2


Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

Operation days 183 182 183 182 183 182 183 182 183 182


Other income 38,228 36,658 18,476 14,334 - - 12,176 11,141 40,199 36,525



PM fees 17,783 17,690 20,921 21,274 300 300 12,997 12,287 36,190 35,782


Utilities 16,832 15,600 20,756 15,312 - - 10,527 9,295 20,005 19,041

Maintenance and repair fees 2,418 2,596 3,732 2,072 - - 491 659 4,372 9,411

Insurance fees 189 189 167 166 - - 112 111 280 311

Trust fees 441 441 324 324 176 176 324 324 339 339

Other expenses 864 2,792 377 726 - - 185 301 76,574 76,310



③NOI (①－②) 118,706 116,813 83,517 83,827 53,524 53,524 52,431 54,114 146,898 140,602

Depreciation 29,249 29,708 20,668 20,966 - - 13,636 13,584 35,793 36,088


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


38

Property Name Of-31 HF Nihonbashi

Hamacho Building

Of-32 HFSendai Honcho

Building

Of-33 DAIWA UENO

BUILDING

Of-34 KOJIMACHI HF

BUILDING

Of-35 HF KUDAN MINAMI

BUILDING

Address Chuo-ku, Tokyo Sendai City, Miyagi Taito-ku, Tokyo Chiyoda-ku, Tokyo Chiyoda-ku, Tokyo

Lot Area (m2) 599.34 1,598.83 718.47 409.15 530.00


Constructed February 1987 September 2003 February 1990 March 1994 March 1991




Property Management Company Heiwa Real Estate Co., Ltd. Heiwa Real Estate Co., Ltd. Heiwa Real Estate Co., Ltd. Heiwa Real Estate Co., Ltd. Heiwa Real Estate Co., Ltd.

PML (%) 12.7 2.6 2.5 2.5 6.7


Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

Operation days 183 182 183 182 - 179 - 179 - 179

Rents and common expenses 65,785 70,484 110,891 112,040 - 109,158 - 55,375 - 84,810

Other income 11,441 12,398 23,450 25,898 - 19,481 - 6,097 - 7,909


(unit: thousand yen) 77,226 82,882 134,342 137,938 - 128,639 - 61,473 - 92,719

PM fees 9,701 8,710 18,841 19,361 - 13,755 - 5,620 - 8,234

Public charges and taxes 6,013 6,013 10,276 10,151 - 139 - 74 - -

Utilities 8,170 7,819 16,568 18,338 - 9,406 - 5,120 - 5,699

Maintenance and repair fees 8,526 390 1,548 877 - 12,346 - 6,351 - 2,180

Insurance fees 75 83 145 158 - 113 - 64 - 64

Trust fees 339 339 439 439 - 322 - 322 - 332

Other expenses 550 459 1,467 850 - 1,717 - 524 - 1,215


(unit: thousand yen) 33,376 23,815 49,287 50,177 - 37,800 - 18,078 - 17,726

③NOI (①－②) 43,850 59,067 85,054 87,761 - 90,838 - 43,394 - 74,993

Depreciation 9,075 9,380 28,968 30,532 - 19,171 - 5,323 - 9,447

Rental business profit 34,775 49,687 56,085 57,228 - 71,667 - 38,071 - 65,545

((Note 1) 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-03

HF ICHIKAWARESIDENCE

Re-05

HF MEGURO RESIDENCE

Re-09

HF KASAI RESIDENCE

Re-11 HF WAKABAYASHI-

KOEN RESIDENCE

Re-12

HF HIMONYA RESIDENCE

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

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

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

Constructed March 2003 April 2003 November 2002 February 2004 February 2004


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

Appraisal Price (mm yen) 499 618 684 3,850 1,541

Property Management Company Haseko Livenet, Inc. RA Asset Management Inc. Haseko Livenet, Inc. Haseko Livenet, Inc. Tokyu Housing Lease Corp

PML (%) 6.2 6.2 8.8 6.7 6.4


Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

Operation days 183 182 183 182 183 182 183 182 183 182


Other income 8 32 460 983 1,091 1,584 9,307 7,983 3,313 1,687



PM fees 1,064 1,064 2,154 2,980 1,777 2,335 12,158 8,339 4,778 3,941

Public charges and taxes 724 722 978 978 1,226 1,226 6,434 6,434 2,508 2,507

Utilities 226 221 260 293 289 286 1,233 1,293 375 378

Maintenance and repair fees 33 37 335 703 225 2,021 1,537 4,132 2,435 6,141

Insurance fees 13 13 15 15 19 19 113 113 37 37

Trust fees 577 577 603 603 603 603 879 879 655 655

Other expenses 110 194 50 193 216 347 1,067 910 264 422



③NOI (①－②) 14,538 14,480 14,453 13,680 19,555 17,146 85,998 89,347 34,815 30,011

Depreciation 2,808 2,822 3,682 3,693 4,280 4,315 23,212 23,314 7,543 7,662


9 Portfolio Overview and Performance (Residence)

40

Property Name

Re-14

HF MINAMIAZABU

RESIDENCE

Re-15

HF AZABUJUBAN

RESIDENCE

Re-16

HF GAKUGEIDAIGAKU

RESIDENCE

Re-17

HF HIGASHIKANDA

RESIDENCE

Re-18

HF HIGASHINIHONBASHI

RESIDENCE

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

Lot Area (m2) 279.73 499.24 268.70 262.07 312.76


Constructed April 2004 January 2005 March 2005 June 2005 June 2005



Appraisal Price (mm yen) 1,259 1,120 900 1,220 1,410

Property Management Company RA Asset Management Inc. Cosmos Initia Co., Ltd. Tokyu Housing Lease Corp. Haseko Livenet, Inc. Apamanshop Sublease Co., Ltd.

PML (%) 3.6 12.8 9.8 5.7 10.0


Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

Operation days 183 182 183 182 183 182 183 182 183 182


Other income 749 789 1,884 1,205 439 1,109 1,307 1,551 1,752 1,787



PM fees 5,038 3,900 5,587 3,797 2,302 3,029 3,167 3,335 3,404 3,476


Utilities 415 384 265 253 296 291 299 317 392 388

Maintenance and repair fees 1,341 725 688 1,809 1,039 2,067 289 3,062 1,318 2,064

Insurance fees 26 26 26 26 25 24 29 29 38 38

Trust fees 631 631 629 629 548 548 574 574 592 592

Other expenses 312 130 268 162 225 155 340 130 360 30



③NOI (①－②) 25,112 27,636 20,397 23,139 18,982 18,634 28,907 26,301 32,950 32,426

Depreciation 5,422 5,488 8,808 8,920 5,142 5,115 10,266 10,266 11,008 11,017



41

Property Name Re-19

HF NERIMA RESIDENCE

Re-20

HF SHIROKANETAKANAWA

RESIDENCE

Re-21

HF MEIDAIMAE RESIDENCE

Re-22

HF NIHONBASHI

RESIDENCE

Re-23

HF KAMISHAKUJII

RESIDENCE

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

Lot Area (m2) 368.67 922.21 485.01 222.40 536.09


Constructed May 2005 August 2005 June 2005 May 2005 May 2006


Acquisition Price (mm yen) 690 4,030 1,070 1,130 950

Appraisal Price (mm yen) 738 4,040 926 997 933

Property Management Company Apamanshop Sublease Co., Ltd. Cosmos Initia Co., Ltd. Haseko Livenet, Inc. Haseko Livenet, Inc. Haseko Livenet, Inc.

PML (%) 5.5 3.9 6.0 3.3 6.2


Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

Operation days 183 182 183 182 183 182 183 182 183 182


Other income 944 1,092 6,057 4,512 551 1,117 351 801 2,068 1,063

① Rental business income total


PM fees 2,285 2,731 14,694 9,147 3,212 3,530 2,888 3,138 3,830 2,819


Utilities 252 259 977 1,010 310 312 460 463 397 372

Maintenance and repair fees 212 2,034 3,584 4,237 544 908 693 1,664 1,875 1,271

Insurance fees 23 22 107 107 26 26 29 29 33 33

Trust fees 459 459 - - - - 752 752 - -

Other expenses 340 52 465 1,171 460 884 728 508 120 520



③NOI (①－②) 19,259 17,219 83,293 89,060 21,406 20,631 23,515 23,477 23,229 24,191

Depreciation 6,465 6,465 22,360 22,362 5,025 5,026 4,915 4,932 5,863 6,283



42

Property Name 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

Address Sumida-ku, Tokyo Chuo-ku, Tokyo Yokohama City, Kanagawa Bunkyo-ku, Tokyo Ota-ku, Tokyo

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


Constructed March 2005 March 2005 September 2006 January 2000 August 2001




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

PML (%) 10.1 5.7 13.2 4.4 4.6


Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

Operation days 183 182 183 182 183 182 183 182 183 182


Other income 1,485 1,378 7,869 11,988 6,146 7,354 3,460 3,254 3,913 5,104

① Rental business income total


PM fees 3,701 3,694 9,635 10,905 7,630 9,350 4,536 5,421 2,611 4,673


Utilities 362 355 1,233 1,246 459 441 627 605 484 484

Maintenance and repair fees 2,028 1,213 2,248 6,287 1,008 3,312 1,645 2,540 9,293 1,436

Insurance fees 29 29 116 116 89 89 66 66 58 58

Trust fees - - 1,750 1,750 - - - - - -

Other expenses 203 412 243 289 985 976 132 268 207 197



③NOI (①－②) 23,545 24,887 103,060 102,317 68,513 65,158 43,723 42,579 24,008 33,271

Depreciation 5,149 5,178 26,848 26,948 20,705 19,914 14,284 14,440 11,721 12,224




43

Property Name

Re-31

HF GAKUGEIDAIGAKU

RESIDENCE II

Re-33

HF KAMEIDO RESIDENCE

Re-34

HF TANASHI RESIDENCE

Re-36

HF SHIBA-KOEN

RESIDENCE

Re-36

HF MITA RESIDENCE

Address Meguro-ku, Tokyo Koto-ku, Tokyo Nishitokyo City, Tokyo Minato-ku, Tokyo Minato-ku, Tokyo

Lot Area (m2) 847.14 246.34 1,639.65 311.02 303.10


Constructed January 2005 January 2008 March 1989 August 2003 March 2004


Acquisition Price (mm yen) 1,650 1,050 911 836 1,080

Appraisal Price (mm yen) 1,130 1,030 758 809 1,160

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

PML (%) 14.6 7.6 8.6 7.8 2.6


Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

Operation days 183 182 183 182 183 182 183 182 183 182


Other income 2,131 2,117 40 274 1,189 2,090 1,451 1,035 1,311 923



PM fees 5,479 3,269 2,135 2,234 3,557 4,097 3,076 2,763 3,699 3,637


Utilities 260 282 410 402 397 400 532 525 452 448

Maintenance and repair fees 2,904 489 21 37 2,412 1,658 536 1,033 1,466 1,138

Insurance fees 33 32 33 33 50 50 27 27 33 33

Trust fees 1,061 1,061 - - - - 500 500 500 500

Other expenses 401 241 368 398 60 252 306 457 327 430



③NOI (①－②) 18,335 26,016 27,071 27,170 21,520 22,376 18,091 18,479 25,950 27,266

Depreciation 6,568 6,546 6,055 6,010 9,223 9,877 4,586 4,680 5,688 5,755



44

Property Name Re-37 HF TAKANAWA

RESIDENCE

Re-38 La Residence de

Shirokanedai

Re-39 HF GINZA

RESIDENCE EAST Ⅱ

Re-40 HF HATCHOBORI

RESIDENCE Ⅱ

Re-41 HF HATCHOBORI

RESIDENCE Ⅲ

Address Minato-ku, Tokyo Minato-ku, Tokyo Chuo-ku, Tokyo Chuo-ku, Tokyo Chuo-ku, Tokyo

Lot Area (m2) 432.36 344.25 368.35 427.32 203.98


Constructed February 2003 February 2004 February 1999 January 2002 January 2004


Acquisition Price (mm yen) 749 730 1,460 1,890 793

Appraisal Price (mm yen) 793 847 1,550 2,000 906

Property Management Company Apamanshop Sublease Co., Ltd. Tokyu Housing Lease Corp Apamanshop Sublease Co., Ltd. Apamanshop Sublease Co., Ltd. Nihon Housing Co., Ltd.

PML (%) 1.5 3.3 6.9 6.0 3.2


Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

Operation days 183 182 183 182 183 182 183 182 183 182


Other income 625 673 562 150 2,569 1,971 2,502 3,366 1,432 1,562



PM fees 2,351 3,557 3,162 2,955 5,285 5,501 7,272 6,202 3,776 3,282


Utilities - 35 12 - 450 449 763 754 394 394

Maintenance and repair fees 350 1,070 709 779 1,370 720 1,816 10,979 685 779

Insurance fees 24 24 89 67 42 42 59 59 32 32

Trust fees 500 500 420 404 454 457 450 450 375 375

Other expenses 141 272 244 130 40 185 266 141 238 269



③NOI (①－②) 20,536 16,659 18,719 18,865 39,886 40,761 46,847 40,737 20,012 21,712

Depreciation 4,562 4,568 2,855 2,898 9,011 9,033 12,483 12,948 6,820 6,919




45

Property Name 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 Setagaya-ku, Tokyo Osaka City, Osaka Osaka City, Osaka Osaka City, Osaka

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


Constructed July 2004 January 2001 August 2003 June 2001 March 2002


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

Appraisal Price (mm yen) 1,060 6,880 2,020 478 655

Property Management Company RA Asset Management Inc. Apamanshop Sublease Co., Ltd. Apamanshop Sublease Co., Ltd. Haseko Livenet, Inc. Apamanshop Sublease Co., Ltd.

PML (%) 3.0 2.7 6.2 8.6 6.0


Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

Operation days 183 182 183 182 183 182 183 182 183 182


Other income 366 1,574 9,613 10,422 2,300 2,588 550 838 871 765



PM fees 2,678 2,842 22,708 25,128 11,359 11,814 2,313 2,465 3,146 3,145


Utilities 414 457 3,956 4,012 2,157 2,275 365 395 51 -

Maintenance and repair fees 1,730 275 7,175 8,335 3,956 3,309 435 8,168 402 7,602

Insurance fees 24 24 200 299 118 117 27 27 35 35

Trust fees 500 500 581 581 625 625 450 450 483 451

Other expenses 16 167 2,142 2,630 340 527 268 733 76 256



③NOI (①－②) 24,808 27,145 161,289 154,087 54,462 55,202 13,689 5,028 18,973 10,890

Depreciation 8,424 8,480 30,859 32,523 21,355 22,300 4,041 4,485 6,397 6,523

Rental business profit 16,384 18,664 130,430 121,563 33,106 32,902 9,647 542 12,576 4,367 (Note 1) Figures for rental business balance are the actual numbers for each period where values below 1,000 yen are rounded off.


46

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

Address Nagoya City, Aichi Fukuoka City, Fukuoka Kyoto City, Kyoto Fukuoka City, Fukuoka Kyoto City, Kyoto

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


Constructed February 2004 March 2003 February 2005 August 2005 March 2007


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

Appraisal Price (mm yen) 679 1,850 530 565 2,100

Property Management Company 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


Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

Operation days 183 182 183 182 183 182 183 182 183 182


Other income 1,468 1,594 5,210 5,067 663 847 1,734 1,977 5,040 7,489



PM fees 3,195 3,194 8,450 8,287 2,344 2,635 2,979 3,798 6,437 7,702


Utilities 9 48 1,916 1,859 466 478 799 809 2,491 2,381

Maintenance and repair fees 874 4,434 1,876 2,215 208 2,972 1,173 477 1,127 1,445

Insurance fees 36 36 116 115 23 23 36 36 85 85

Trust fees 492 453 1,000 1,000 500 487 500 500 650 650

Other expenses 81 336 609 190 55 222 298 328 1,266 1,320



③NOI (①－②) 20,885 17,025 58,939 59,066 15,256 12,237 18,248 18,016 56,409 57,438

Depreciation 7,110 7,660 19,677 19,845 3,208 3,577 5,676 5,687 10,459 10,468




47

Property Name Re-54 La Residence de

Sendagi

Re-55 HF SENDAGI

RESIDENCE

Re-56 HF KOMAZAWA-KOEN

RESIDENCE

Re-57 HF MUSASHIKOYAMA

RESIDENCE

Re-58 HF KOKUBUNJI

RESIDENCE

Address Bunkyo-ku, Tokyo Bunkyo-ku, Tokyo Setagaya-ku, Tokyo Shinagawa-ku, Tokyo Kokubunji City, Tokyo

Lot Area (m2) 269.15 249.06 709.54 455.93 257.06


Constructed February 2006 February 2006 July 2006 November 2006 January 2006


Acquisition Price (mm yen) 820 870 615 842 839

Appraisal Price (mm yen) 901 963 653 1,000 907

Property Management Company Apamanshop Sublease Co., Ltd. Apamanshop Sublease Co., Ltd. Apamanshop Sublease Co., Ltd. Apamanshop Sublease Co., Ltd. Nihon Housing Co., Ltd.

PML (%) 4.4 9.2 4.3 6.3 6.3


Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

Operation days 183 182 183 182 183 182 183 182 183 182


Other income - 634 387 680 728 864 1,300 3,580 1,486 1,535



PM fees 2,521 2,951 3,082 3,696 2,698 2,563 3,185 3,684 2,537 2,785


Utilities - - - - 309 325 263 270 278 303

Maintenance and repair fees 335 280 491 659 731 2,910 275 643 636 961

Insurance fees 22 22 28 28 20 19 24 24 24 24

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

Other expenses 221 30 285 130 106 179 179 309 49 431



③NOI (①－②) 23,549 23,915 25,921 24,312 14,206 11,969 24,367 25,671 25,711 25,169

Depreciation 3,234 3,134 3,775 3,662 3,242 3,278 3,227 3,227 4,087 3,950



48

Property Name 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

Re-63 HF HIGASHI-

SHINJUKU RESIDENCE

Address Nagoya City, Aichi Kyoto City, Kyoto Shinjuku-ku, Tokyo Shinjuku-ku, Tokyo Shinjuku-ku, Tokyo

Lot Area (m2) 362.02 471.10 575.67 347.29 313.96


Constructed March 2006 March 2007 March 2006 March 2006 March 2007


Acquisition Price (mm yen) 1,080 572 1,990 1,170 1,360

Appraisal Price (mm yen) 1,180 633 2,270 1,300 1,500


PML (%) 9.3 9.9 4.6 3.5 2.6


Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

Operation days 183 182 183 182 183 182 183 182 183 182


Other income 1,146 1,306 842 2,030 2,581 2,734 1,131 1,905 1,487 1,813



PM fees 3,413 3,498 1,973 2,900 8,147 8,575 6,406 6,102 6,393 7,136


Utilities 436 424 569 574 9 15 4 11 4 11

Maintenance and repair fees 692 1,979 220 677 9,201 1,841 7,229 1,523 775 1,365

Insurance fees 56 56 23 23 55 55 34 34 39 39

Trust fees 750 750 650 650 750 750 600 600 600 600

Other expenses 328 586 20 270 528 1,219 521 1,088 60 130



③NOI (①－②) 37,392 35,404 16,749 15,989 43,990 51,062 22,474 28,411 39,368 38,131

Depreciation 6,099 6,250 2,935 2,947 6,558 7,060 4,216 4,493 6,614 6,693




49

Property Name 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

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

Lot Area (m2) 343.80 475.70 717.53 400.00 267.42


Constructed September 2006 January 2007 January 2007 January 2007 September 2006


Acquisition Price (mm yen) 566 809 684 426 771

Appraisal Price (mm yen) 608 982 819 464 859


PML (%) 10.3 1.0 1.0 1.0 6.3


Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

Operation days 183 182 183 182 183 182 183 182 183 182


Other income 313 162 1,182 1,507 1,989 1,849 795 858 504 861



PM fees 2,560 2,447 3,877 4,057 2,991 2,815 2,097 2,768 3,050 2,403


Utilities - 15 - 6 - 6 302 298 - 6

Maintenance and repair fees 488 429 658 3,719 891 1,010 130 844 558 467

Insurance fees 21 21 45 45 43 43 28 28 26 26

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

Other expenses 60 205 20 663 20 663 100 356 40 130



③NOI (①－②) 16,059 16,566 32,318 28,595 27,033 26,965 14,369 12,980 20,030 21,093

Depreciation 2,667 2,674 6,237 6,254 5,933 5,939 3,753 3,756 3,328 3,331




50

Property Name Re-69 HF ICHIBANCHO

RESIDENCE

Re-70 HF HIGASHI-NAKANO

RESIDENCE

Re-72 HF WASEDA

RESIDENCE

Re-73 HF WASEDA

RESIDENCE Ⅱ

Re-74

HF WAKAMATSUKAWADA

RESIDENCE

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

Lot Area (m2) 398.14 538.53 820.34 319.83 412.42


Constructed February 2007 February 2007 May 2007 May 2007 February 2004


Acquisition Price (mm yen) 834 942 2,090 872 1,158

Appraisal Price (mm yen) 986 1,010 2,280 932 1,240

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

PML (%) 1.1 3.0 4.0 3.6 5.0


Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

Operation days 183 182 183 182 183 182 183 182 183 182


Other income 1,666 1,984 1,339 832 2,561 2,506 597 721 2,383 2,530



PM fees 3,548 3,461 3,378 3,036 12,257 11,264 4,461 3,890 3,715 4,364


Utilities - 6 369 366 762 757 398 391 341 347

Maintenance and repair fees 767 1,410 398 477 1,434 1,616 353 485 1,326 481

Insurance fees 44 44 28 28 64 63 25 25 32 32

Trust fees 600 600 650 650 850 850 650 650 440 440

Other expenses 52 397 109 48 1,229 1,156 521 533 762 697



③NOI (①－②) 32,700 32,704 23,225 24,640 53,455 55,569 22,841 23,559 26,600 27,839

Depreciation 5,305 5,315 4,077 4,077 8,531 8,320 3,573 3,478 6,290 6,376




51

Property Name Re-75 HF SENDAI

RESIDENCE EAST

Address Sendai City, Miyagi

Lot Area (m2) 1,133.00

Total Floor Area (m2) 5,662.45

Constructed July 2008

Period-end occupancy rate (%) 96.82

Acquisition Price (mm yen) 1,630

Appraisal Price (mm yen) 1,660

Property Management Company Apamanshop Sublease Co., Ltd.

PML (%) 1.8


Period

27th Fiscal

Period

Operation days - 179

Rents and common expenses - 56,961

Other income - 3,342


(unit: thousand yen) - 60,303

PM fees - 4,342

Public charges and taxes - 2,012

Utilities - 817

Maintenance and repair fees - 947

Insurance fees - 58

Trust fees - 324

Other expenses - 130


(unit: thousand yen) - 8,633

③NOI (①－②) - 51,669

Depreciation - 15,525

Rental business profit - 36,144



52

Address Osaka City, Osaka Kyoto City, Kyoto Saitama City, Saitama Sendai City, Miyagi

Lot Area (m2) 490.65 337.23 597.25 549.10

Total Floor Area (m2) 2,486.39 2,144.02 2,946.55 3,251.77

Constructed January 2004 January 2004 July 2006 January 2007

Period-end occupancy rate (%) 100.00 100.00 100.00 100.00

Acquisition Price (mm yen) 1,080 900 1,050 1,150

Appraisal Price (mm yen) 1,170 989 1,130 1,270

Property Management Company Super Hotel Co., Ltd. Super Hotel Co., Ltd. Super Hotel Co., Ltd. Super Hotel Co., Ltd.

PML (%) 12.9 8.7 3.8 1.0


Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period

Operation days 183 182 183 182 183 182 183 182

Rents and common expenses 37,620 37,620 31,182 31,182 35,736 35,736 44,220 44,220

Other income - - - - - - - -


(unit: thousand yen) 37,620 37,620 31,182 31,182 35,736 35,736 44,220 44,220

PM fees - - - - - - - -

Public charges and taxes 3,512 3,470 3,075 3,055 4,348 4,311 5,570 5,529

Utilities - - - - - - - -

Maintenance and repair fees - - 1,590 - - - - -

Insurance fees 42 42 34 34 50 50 54 54

Trust fees 550 550 550 550 600 600 600 600

Other expenses - - - - - - - 342


(unit: thousand yen) 4,104 4,063 5,250 3,639 4,998 4,962 6,225 6,526

③NOI (①－②) 33,515 33,556 25,931 27,542 30,737 30,773 37,994 37,693

Depreciation 6,843 6,853 5,680 5,680 6,935 6,935 8,601 8,601

Rental business profit 26,671 26,703 20,250 21,861 23,801 23,837 29,392 29,091

Property Name Ho-01 Super Hotel Osaka

Tennoji

Ho-02 Super Hotel Kyoto

Karasumagojyo

Ho-03 Super Hotel

Saitama Omiya

Ho-04 Super Hotel Sendai

Hirose-dori


10 Portfolio Overview and Performance (Hotel)

53

11 Historical Appraisal Values

22nd

Fiscal

Period

23rd

Fiscal

Period

24th Fiscal

Period

25th Fiscal

Period

26th Fiscal

Period

27ｔh

Fiscal

Period(A)

22nd

Fiscal

Period

23rd

Fiscal

Period

24th Fiscal

Period

25th Fiscal

Period

26th Fiscal

Period

27th Fiscal

Period(A)

Of-01 HF GOTANDA BUILDING 1,290 1,197 1,201 1,237 1,263 1,283 1,308 1,351 (43) (3.20) Re-31 HF GAKUGEIDAIGAKU RESIDENCE Ⅱ 1,650 1,050 1,070 1,070 1,090 1,110 1,130 1,596 (466) (29.21)

Of-05 Suitengu Heiwa Bldg 1,550 1,225 1,226 1,202 1,225 1,246 1,303 1,459 (156) (10.72) Re-33 HF KAMEIDO RESIDENCE 1,050 953 972 989 984 1,010 1,030 1,036 (6) (0.59)

Of-06 HF MONZENNAKACHO BUILDING 2,500 2,230 2,220 2,240 2,280 2,310 2,350 2,389 (39) (1.61) Re-34 HF TANASHI RESIDENCE 911 759 738 738 741 753 758 964 (206) (21.40)

Of-07 HF HAMAMATSUCHO BUILDING 1,530 1,470 1,510 1,490 1,490 1,520 1,520 1,542 (22) (1.45) Re-35 HF SHIBA-KOEN RESIDENCE 836 750 772 773 780 793 809 805 4 0.44

Of-08 Kokusai Tameike Bldg 2,700 2,460 2,490 2,540 2,550 2,590 2,510 2,783 (273) (9.79) Re-36 HF MITA RESIDENCE 1,080 1,070 1,090 1,090 1,100 1,120 1,160 1,038 122 11.78

Of-09 Grace Building Sengakujimae 1,220 1,450 1,450 1,450 1,470 1,490 1,520 1,172 348 29.70 Re-37 HF TAKANAWA RESIDENCE 749 731 742 744 760 774 793 719 74 10.35

Of-10 HF SHIN-YOKOHAMA BUILDING 1,550 1,220 1,170 1,110 1,070 1,080 1,080 1,399 (319) (22.82) Re-38 La Residence de Shirokanedai 730 777 790 790 800 813 847 705 142 20.07

Of-11 Nihonbashi Daiichi Bldg 2,150 1,700 1,720 1,710 1,740 1,760 1,810 2,245 (435) (19.39) Re-39 HF GINZA RESIDENCE EAST Ⅱ 1,460 1,450 1,490 1,490 1,500 1,530 1,550 1,441 109 7.59

Of-12 Hatchobori SF Bldg *1 3,092 2,310 2,340 2,340 2,360 2,410 2,420 3,122 (702) (22.48) Re-40 HF HATCHOBORI RESIDENCE Ⅱ 1,890 1,860 1,890 1,910 1,940 1,970 2,000 1,849 151 8.17

Of-13 Shibuya AX Hills 1,860 1,330 1,340 1,350 1,360 1,400 1,420 1,826 (406) (22.23) Re-41 HF HATCHOBORI RESIDENCE Ⅲ 793 833 857 858 870 889 906 739 167 22.65

Of-15 HF NAKAMEGURO BUILDING 2,870 2,130 2,120 2,050 2,050 2,080 2,120 2,905 (785) (27.02) Re-42 HF GINZA RESIDENCE 944 964 988 990 1,010 1,030 1,060 872 188 21.51

Of-16 Anwa Tsukasacho Bldg 1,385 1,070 1,090 1,090 1,090 1,100 1,120 1,307 (187) (14.33) Re-43 HF KOMAZAWA-KOEN RESIDENCE TOWER 6,520 6,320 6,490 6,490 6,560 6,650 6,880 6,553 327 4.99

Of-17 Hatchobori MF Bldg 1,110 897 908 909 919 935 956 1,122 (166) (14.81) Re-44 HF UMEDA RESIDENCE TOWER 1,920 1,930 1,960 1,950 1,980 1,990 2,020 1,761 259 14.73

Of-18 M2 Harajuku *2 3,418 3,903 4,010 4,134 4,214 4,315 4,385 3,488 897 25.73 Re-45 HF NAKANOSHIMA RESIDENCE 453 456 462 462 466 472 478 452 26 5.72

Of-20 Funabashi Face Bldg 3,900 3,100 3,110 3,160 2,850 2,920 2,960 3,636 (676) (18.59) Re-46 HF AWAZA RESIDENCE 577 610 619 621 643 648 655 551 104 18.77

Of-21 Adesso Nishiazabu 640 430 430 448 446 456 457 623 (166) (26.60) Re-47 HF MARUNOUCHI RESIDENCE 624 639 647 647 658 673 679 570 109 19.17

Of-22 HF TORANOMON BUILDING 1,675 1,237 1,236 1,257 1,270 1,271 1,294 1,728 (434) (25.13) Re-48 HF HIRAO RESIDENCE 1,780 1,740 1,770 1,770 1,800 1,820 1,850 1,657 193 11.62

Of-23 HF IKEBUKURO BUILDING 1,314 1,040 1,070 1,090 1,090 1,110 1,130 1,328 (198) (14.89) Re-49 HF KAWARAMACHI NIJO RESIDENCE 534 519 506 493 504 514 530 509 21 4.06

Of-24 HF YUSHIMA BUILDING 1,434 1,320 1,340 1,360 1,380 1,410 1,420 1,458 (38) (2.60) Re-52 HF TENJIN-HIGASHI RESIDENCE 502 529 542 542 546 553 565 448 117 26.12

Of-25 Kayabacho Heiwa Bldg 4,798 5,230 5,410 5,500 5,610 5,770 5,950 4,807 1,143 23.78 Re-53 HF SHIJO KAWARAMACHI RESIDENCE 1,820 1,920 1,960 1,960 2,000 2,050 2,100 1,717 383 22.30

Of-26 HIROKOJI AQUA PLACE 2,930 3,756 3,848 3,946 4,024 4,097 4,279 2,826 1,453 51.39 Re-54 La Residence de Sendagi 820 839 852 852 872 883 901 791 110 13.96

Of-27 Kobe Kyukyoryuchi Heiwa Building 2,310 － 2,550 2,550 2,560 2,580 2,680 2,270 410 18.06 Re-55 HF SENDAGI RESIDENCE 870 903 913 912 935 946 963 835 128 15.31

Of-28 Mita Heiwa Building （leasehold land） 2,230 － 2,310 2,447 2,504 2,563 2,627 2,269 358 15.76 Re-56 HF KOMAZAWA-KOEN RESIDENCE 615 628 632 632 637 647 653 588 65 11.08

Of-29 Sakae Minami Heiwa Building 1,580 － 1,770 1,770 1,790 1,810 1,880 1,546 334 21.60 Re-57 HF MUSASHIKOYAMA RESIDENCE 842 899 918 938 960 974 1,000 810 190 23.42

Of-30 HF SAKURADORI BUILDING 4,900 －－－ 5,510 5,580 5,460 4,833 627 12.97 Re-58 HF KOKUBUNJI RESIDENCE 839 832 842 852 862 879 907 804 103 12.80

Of-31 HF Nihonbashi Hamacho Building 1,900 －－－ 2,110 2,150 2,190 1,922 268 13.95 Re-59 HF HISAYAODORI RESIDENCE 1,080 1,080 1,100 1,100 1,120 1,140 1,180 1,030 150 14.54

Of-32 HF Sendai Honcho Building 2,700 －－－ 2,990 3,050 3,090 2,738 352 12.87 Re-60 HF KARASUMA KURAMAGUCHI RESIDENCE 572 590 600 600 613 627 633 542 91 16.69

Of-33 DAIWA UENO BUILDING 3,400 －－－－－ 3,790 3,430 360 10.50 Re-61 HF NISHI-SHINJUKU RESIDENCE WEST 1,990 2,030 2,060 2,090 2,130 2,160 2,270 1,994 276 13.82

Of-34 KOJIMACHI HF BUILDING 1,350 －－－－－ 1,590 1,358 232 17.11 Re-62 HF NISHI-SHINJUKU RESIDENCE EAST 1,170 1,180 1,200 1,210 1,230 1,260 1,300 1,171 129 10.99

Of-35 HF KUDAN MINAMI BUILDING 2,720 －－－－－ 2,930 2,743 187 6.81 Re-63 HF HIGASHI-SHINJUKU RESIDENCE 1,360 1,390 1,420 1,420 1,460 1,480 1,500 1,302 198 15.23

68,006 40,705 47,869 48,380 59,215 60,286 69,549 67,626 1,923 2.84 Re-64 HF HIGASHI-SHINSAIBASHI RESIDENCE 566 590 598 596 602 602 608 544 64 11.71

Re-03 HF ICHIKAWA RESIDENCE 430 454 461 474 483 491 499 394 105 26.69 Re-65 HF KITA-YOBANCHO RESIDENCE 809 855 890 906 936 966 982 758 224 29.56

Re-05 HF MEGURO RESIDENCE 660 536 547 566 578 599 618 646 (28) (4.33) Re-66 HF ATAGOBASHI RESIDENCE 684 716 744 758 782 807 819 626 193 30.83

Re-09 HF KASAI RESIDENCE 650 619 623 639 653 664 684 592 92 15.46 Re-67 HF KYUDAIBYOINMAE RESIDENCE 426 427 434 435 444 456 464 396 68 17.16

Re-11 HF WAKABAYASHI－KOEN RESIDENCE 3,610 3,426 3,493 3,631 3,695 3,775 3,850 3,227 623 19.31 Re-68 HF ASAKUSABASHI RESIDENCE 771 790 794 800 816 827 859 740 119 16.15

Re-12 HF HIMONYA RESIDENCE 1,560 1,418 1,410 1,456 1,489 1,519 1,541 1,452 89 6.15 Re-69 HF ICHIBANCHO RESIDENCE 834 876 899 916 940 969 986 781 205 26.25

Re-14 HF MINAMIAZABU RESIDENCE 1,370 1,169 1,174 1,182 1,186 1,212 1,259 1,314 (55) (4.18) Re-70 HF HIGASHI-NAKANO RESIDENCE 942 938 943 958 976 991 1,010 905 105 11.60

Re-15 HF AZABUJUBAN RESIDENCE 1,260 1,020 1,040 1,040 1,070 1,080 1,120 1,175 (55) (4.71) Re-72 HF WASEDA RESIDENCE 2,090 2,100 2,190 2,190 2,230 2,280 2,280 2,020 260 12.90

Re-16 HF GAKUGEIDAIGAKU RESIDENCE 1,000 817 833 843 863 881 900 934 (34) (3.64) Re-73 HF WASEDA RESIDENCE Ⅱ 872 874 890 892 913 932 932 844 88 10.40

Re-17 HF HIGASHIKANDA RESIDENCE 1,100 1,090 1,120 1,140 1,160 1,190 1,220 958 262 27.39 Re-74 HF WAKAMATSUKAWADA RESIDENCE 1,158 －－ 1,170 1,190 1,210 1,240 1,202 38 3.14

Re-18 HF HIGASHINIHONBASHI RESIDENCE 1,210 1,260 1,280 1,310 1,340 1,370 1,410 1,061 349 32.92 Re-75 HF SENDAI RESIDENCE EAST 1,630 －－－－－ 1,660 1,676 (16) (0.96)

Re-19 HF NERIMA RESIDENCE 690 665 681 697 709 721 738 603 135 22.39 82,853 73,513 74,939 76,628 77,818 79,245 82,802 79,299 3,503 5.27

Re-20 HF SHIROKANETAKANAWA RESIDENCE 4,030 3,780 3,870 3,870 3,880 3,950 4,040 3,830 210 5.48 Ho-01 Super Hotel Osaka Tennoji 1,080 1,090 1,110 1,130 1,150 1,170 1,170 1,010 160 15.84

Re-21 HF MEIDAIMAE RESIDENCE 1,070 832 853 867 887 903 926 1,009 (83) (8.24) Ho-02 Super Hotel Kyoto Karasumagojyo 900 921 939 956 973 989 989 841 148 17.55

Re-22 HF NIHONBASHI RESIDENCE 1,130 918 941 934 960 975 997 1,084 (87) (8.01) Ho-03 Super Hotel Saitama Omiya 1,050 1,060 1,080 1,100 1,110 1,130 1,130 976 154 15.76

Re-23 HF KAMISHAKUJII RESIDENCE 950 852 859 865 885 897 933 900 33 3.66 Ho-04 Super Hotel Sendai Hirose-dori 1,150 1,180 1,210 1,230 1,250 1,270 1,270 1,052 218 20.71

Re-24 HF KINSHICHO RESIDENCE 1,100 990 990 1,000 1,020 1,040 1,060 1,096 (36) (3.29) 4,180 4,251 4,339 4,416 4,483 4,559 4,559 3,880 679 17.51

Re-25 HF GINZA RESIDENCE EAST 5,940 4,120 4,230 4,230 4,250 4,350 4,470 5,665 (1,195) (21.09) 155,039 127,232 129,103 141,777 144,340 51,094 156,910 150,804 6,106 4.50

Re-26 HF SHIN-YOKOHAMA RESIDENCE 3,350 2,390 2,450 2,470 2,470 2,520 2,600 3,129 (529) (16.91)

Re-29 HF HAKUSAN RESIDENCE 2,350 1,630 1,650 1,650 1,670 1,700 1,740 2,318 (578) (24.93) *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-30 HF MAGOME RESIDENCE 1,630 1,130 1,160 1,160 1,190 1,210 1,250 1,569 (319) (20.32) *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.

Property NameAcquisition

Prices

Total Hotels

Total Office Buildings

27th Fiscal

Period Book

Value (B)

Property NameAcquisition

Prices

27th Fiscal

Period Book

Value (B)

Latent Profits

and Losses

(A) – (B)

Appraisal Amount Appraisal Amount

Profit/Loss

Ratio (%)

Latent Profits

and Losses

(A) – (B)

Profit/Loss

Ratio (%)

Total Residential Properties

Total properties in portfolio

54

12 Historical Actual NOI Return

(%) (%)

22nd 23rd 24th 25th 26th 27th 22nd 23rd 24th 25th 26th 27th

Of-01 HF GOTANDA BUILDING 4.09 4.35 4.78 4.53 5.08 4.99 Re-31 HF GAKUGEIDAIGAKU RESIDENCE Ⅱ 3.45 3.00 3.37 3.03 2.22 3.15

Of-05 Suitengu Heiwa Bldg 0.82 4.28 4.27 4.20 3.69 4.33 Re-33 HF KAMEIDO RESIDENCE 5.20 5.08 4.83 5.73 5.16 5.18

Of-06 HF MONZENNAKACHO BUILDING 5.12 2.51 4.86 4.87 5.02 4.88 Re-34 HF TANASHI RESIDENCE 4.36 4.07 3.24 4.57 4.72 4.91

Of-07 HF HAMAMATSUCHO BUILDING 4.35 1.50 5.03 4.51 4.28 4.42 Re-35 HF SHIBA-KOEN RESIDENCE 3.86 4.00 4.54 3.41 4.33 4.42

Of-08 Kokusai Tameike Bldg 4.14 3.15 4.55 4.32 4.44 4.25 Re-36 HF MITA RESIDENCE 5.37 4.95 4.62 4.45 4.81 5.05

Of-09 Grace Building Sengakujimae 7.12 2.44 6.44 7.16 6.80 6.96 Re-37 HF TAKANAWA RESIDENCE 4.19 4.32 4.61 5.30 5.48 4.45

Of-10 Nisso Dai 15 Bldg 4.20 3.78 2.99 3.55 2.85 2.93 Re-38 La Residence de Shirokanedai 5.35 5.65 5.04 4.97 5.13 5.17

Of-11 Nihonbashi Daiichi Bldg 0.76 3.32 3.71 3.80 3.71 3.77 Re-39 HF GINZA RESIDENCE EAST Ⅱ 5.22 5.22 4.23 5.21 5.46 5.58

Of-12 Hatchobori SF Bldg 2.14 3.31 3.62 3.50 3.44 3.31 Re-40 HF HATCHOBORI RESIDENCE Ⅱ 4.27 4.77 5.03 5.16 4.96 4.31

Of-13 Shibuya AX Hills 3.06 2.66 2.19 2.24 2.03 2.64 Re-41 HF HATCHOBORI RESIDENCE Ⅲ 4.53 5.47 5.02 5.69 5.05 5.48

Of-14 KCA Bldg *4 2.80 2.84 2.44 2.40 2.61 2.33 Re-42 HF GINZA RESIDENCE 5.41 5.26 4.20 5.18 5.26 5.75

Of-15 Daiwa Nakameguro Bldg 4.23 1.67 3.35 2.87 3.04 3.22 Re-43 HF KOMAZAWA-KOEN RESIDENCE TOWER 4.52 4.59 4.05 3.70 4.95 4.73

Of-16 Anwa Tsukasacho Bldg 4.36 0.98 3.70 3.79 3.37 3.70 Re-44 HF UMEDA RESIDENCE TOWER 5.73 5.88 5.73 5.88 5.67 5.75

Of-17 Hatchobori MF Bldg 2.12 4.16 4.10 4.19 3.17 4.23 Re-45 HF NAKANOSHIMA RESIDENCE 5.36 5.50 5.96 5.20 6.04 2.22

Of-18 M2 Harajuku *1 5.16 5.47 4.35 4.62 4.70 4.69 Re-46 HF AWAZA RESIDENCE 5.23 6.50 6.86 6.44 6.58 3.78

Of-20 Funabashi Face Bldg 4.70 4.68 4.65 4.75 3.69 3.96 Re-47 HF MARUNOUCHI RESIDENCE 7.12 6.82 5.72 6.41 6.69 5.46

Of-21 Adesso Nishiazabu 2.61 1.96 2.44 2.67 2.50 2.74 Re-48 HF HIRAO RESIDENCE 5.11 6.28 6.62 6.32 6.62 6.64

Of-22 CIC Toranomon Bldg 3.14 3.26 3.72 3.41 3.25 3.42 Re-49 HF KAWARAMACHI NIJO RESIDENCE 5.79 5.02 4.20 5.04 5.71 4.58

Of-23 Aria Ikebukuro 1.63 2.37 4.01 4.12 3.83 4.00 Re-50 HF MINAMI 6JO RESIDENCE *2 7.51 7.95 8.07 - - -

Of-24 CIC Yushima Bldg 3.93 3.65 5.41 5.34 5.30 5.32 Re-51 HF TENJIN-MINAMI RESIDENCE *2 6.52 5.00 6.62 - - -

Of-25 Kayabacho Heiwa Bldg 7.50 6.17 7.53 7.50 7.55 7.56 Re-52 HF TENJIN-HIGASHI RESIDENCE 7.59 7.25 7.30 6.92 7.27 7.18

Of-26 HIROKOJI AQUA PLACE 8.76 8.64 8.22 8.14 8.10 7.97 Re-53 HF SHIJO KAWARAMACHI RESIDENCE 6.29 6.36 6.23 5.84 6.20 6.31

Of-27 Kobe Kyukyoryuchi Heiwa Building - 7.61 7.45 7.47 7.23 7.26 Re-54 La Residence de Sendagi 5.53 5.69 5.64 6.35 5.74 5.83

Of-28 Mita Heiwa Building （leasehold land） - 8.17 4.80 4.80 4.80 4.80 Re-55 HF SENDAGI RESIDENCE 5.86 5.89 5.75 6.37 5.96 5.59

Of-29 Sakae Minami Heiwa Building - 6.78 5.74 6.60 6.64 6.85 Re-56 HF KOMAZAWA-KOEN RESIDENCE 4.88 5.45 4.89 4.94 4.62 3.89

Of-30 HF SAKURADORI BUILDING - - - 6.10 6.00 5.74 Re-57 HF MUSASHIKOYAMA RESIDENCE 5.66 5.81 6.12 6.02 5.79 6.10

Of-31 HF Nihonbashi Hamacho Building - - - 5.84 4.62 6.22 Re-58 HF KOKUBUNJI RESIDENCE 5.87 6.06 5.78 5.71 6.13 6.00

Of-32 HF Sendai Honcho Building - - - 6.82 6.30 6.50 Re-59 HF HISAYAODORI RESIDENCE 6.62 6.53 6.64 6.51 6.92 6.56

Of-33 DAIWA UENO BUILDING - - - - - 5.45 Re-60 HF KARASUMA KURAMAGUCHI RESIDENCE 6.05 5.95 5.76 6.05 5.86 5.59

Of-34 KOJIMACHI　HF BUILDING - - - - - 6.55 Re-61 HF NISHI-SHINJUKU RESIDENCE WEST 5.42 5.35 5.21 5.28 4.42 5.13

Of-35 HF KUDAN MINAMI BUILDING - - - - - 5.62 Re-62 HF NISHI-SHINJUKU RESIDENCE EAST 4.85 5.09 5.16 5.22 3.84 4.86

4.37 4.35 4.84 5.06 4.87 5.06 Re-63 HF HIGASHI-SHINJUKU RESIDENCE 5.50 5.38 5.98 5.37 5.79 5.61

Re-03 HF ICHIKAWA RESIDENCE 5.93 5.94 5.46 6.68 6.76 6.74 Re-64 HF HIGASHI-SHINSAIBASHI RESIDENCE 5.74 5.92 6.20 5.56 5.67 5.85

Re-05 HF MEGURO RESIDENCE 4.69 4.08 3.84 3.74 4.38 4.15 Re-65 HF KITA-YOBANCHO RESIDENCE 7.51 7.51 7.67 7.37 7.99 7.07

Re-09 HF KASAI RESIDENCE 4.84 5.17 5.35 5.65 6.02 5.28 Re-66 HF ATAGOBASHI RESIDENCE 7.45 7.70 8.00 7.63 7.90 7.88

Re-11 HF WAKABAYASHI－KOEN RESIDENCE 5.16 4.84 5.11 4.96 4.76 4.95 Re-67 HF KYUDAIBYOINMAE RESIDENCE 5.57 6.00 5.20 5.76 6.75 6.09

Re-12 HF HIMONYA RESIDENCE 4.27 4.68 4.53 4.47 4.46 3.85 Re-68 HF ASAKUSABASHI RESIDENCE 5.59 5.59 4.48 5.60 5.20 5.47

Re-14 HF MINAMIAZABU RESIDENCE 3.97 4.30 4.17 4.02 3.66 4.03 Re-69 HF ICHIBANCHO RESIDENCE 7.39 7.58 7.63 7.97 7.84 7.84

Re-15 HF AZABUJUBAN RESIDENCE 4.09 3.69 3.91 3.58 3.24 3.67 Re-70 HF HIGASHI-NAKANO RESIDENCE 4.63 5.05 4.92 4.79 4.93 5.23

Re-16 HF GAKUGEIDAIGAKU RESIDENCE 3.72 3.88 3.86 3.76 3.80 3.73 Re-71 HF MINAMI 5JO RESIDENCE *3 4.27 5.21 5.26 - - -

Re-17 HF HIGASHIKANDA RESIDENCE 4.99 4.93 5.16 5.21 5.26 4.78 Re-72 HF WASEDA RESIDENCE 4.90 5.32 5.15 5.21 5.12 5.32

Re-18 HF HIGASHINIHONBASHI RESIDENCE 5.04 5.41 5.55 5.40 5.45 5.36 Re-73 HF WASEDA RESIDENCE Ⅱ 5.17 4.84 4.93 5.29 5.24 5.40

Re-19 HF NERIMA RESIDENCE 4.80 5.45 5.68 5.31 5.58 4.99 Re-74 HF WAKAMATSUKAWADA RESIDENCE - - 3.66 4.48 4.59 4.81

Re-20 HF SHIROKANETAKANAWA RESIDENCE 4.40 4.24 4.43 4.49 4.13 4.42 Re-75 HF SENDAI RESIDENCE EAST - - - - - 6.46

Re-21 HF MEIDAIMAE RESIDENCE 4.09 4.39 4.25 4.08 4.00 3.86 4.79 4.79 4.87 4.79 4.85 4.86

Re-22 HF NIHONBASHI RESIDENCE 4.53 4.01 4.12 3.90 4.16 4.16 Ho-01 Super Hotel Osaka Tennoji 6.20 6.15 6.18 6.21 6.21 6.21

Re-23 HF KAMISHAKUJII RESIDENCE 4.55 4.85 4.04 5.05 4.89 5.09 Ho-02 Super Hotel Kyoto Karasumagojyo 6.11 6.05 6.12 6.11 5.76 6.12

Re-24 HF KINSHICHO RESIDENCE 4.18 4.69 4.63 4.65 4.28 4.52 Ho-03 Super Hotel Saitama Omiya 5.85 5.85 5.85 5.85 5.85 5.86

Re-25 HF GINZA RESIDENCE EAST 3.21 3.19 3.40 3.27 3.47 3.45 Ho-04 Super Hotel Sendai Hirose-dori 6.61 6.59 6.60 6.61 6.61 6.56

Re-26 HF SHIN-YOKOHAMA RESIDENCE 4.04 3.99 3.71 3.89 4.09 3.89 6.20 6.17 6.20 6.21 6.13 6.20

Re-29 HF HAKUSAN RESIDENCE 3.19 3.64 3.11 3.31 3.72 3.62 4.69 4.71 4.85 4.95 4.90 4.99

Re-30 HF MAGOME RESIDENCE 3.82 3.90 4.47 4.29 2.95 4.08

Property Name


Total Hotels


Property Name


*Actual NOI return = Actual NOI （Annualized） / Acquisition price.

*1 Transferred part of asset on October 6, 2009

*2 Transferred on September 27, 2013

*3 Transferred on October 25, 2013

*4 Transferred on March 10,2015

55

13 Historical Occupancy (％) (％)

30-Nov-2014 31-Dec-2014 31-Jan-2015 28-Feb-2015 31-Mar-2015 30-Apr-2015 31-May-2015 30-Nov-2014 31-Dec-2014 31-Jan-2015 28-Feb-2015 31-Mar-2015 30-Apr-2015 31-May-2015

Of-01 HF GOTANDA BUILDING 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-29 HF HAKUSAN RESIDENCE 94.28 98.14 97.82 100.00 96.22 96.22 96.22

Of-05 Suitengu Heiw a Bldg 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-30 HF MAGOME RESIDENCE 93.99 93.99 100.00 97.40 100.00 100.00 100.00

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 91.04 91.04 96.28 96.28 96.28 91.72 91.72

Of-07 HF HAMAMATSUCHO BUILDING 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-33 HF KAMEIDO RESIDENCE 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Of-08 Kokusai Tameike Bldg 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-34 HF TANASHI RESIDENCE 94.54 94.54 97.39 100.00 97.15 94.15 97.00

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 89.65 94.13 100.00 100.00 100.00 100.00 97.28

Of-10 HF SHIN-YOKOHAMA BUILDING 80.01 80.01 80.01 80.01 80.01 80.01 80.01 Re-36 HF MITA RESIDENCE 100.00 97.77 93.64 95.71 97.92 100.00 95.86

Of-11 Nihonbashi Daiichi Bldg 100.00 100.00 100.00 92.22 92.22 92.22 92.22 Re-37 HF TAKANAWA RESIDENCE 100.00 96.27 88.55 92.36 93.01 93.27 93.44

Of-12 Hatchobori SF Bldg 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-38 La Residence de Shirokanedai 100.00 96.51 96.51 92.95 92.89 92.89 89.40

Of-13 Shibuya AX Hills 97.53 97.53 97.53 97.53 100.00 100.00 100.00 Re-39 HF GINZA RESIDENCE EAST Ⅱ 98.64 98.64 100.00 100.00 96.01 100.00 100.00

Of-14 KCA Bldg 　　　　　　　　　　　　　　　　　　　　　　　　 *1 82.20 82.20 82.20 82.20 - - - Re-40 HF HATCHOBORI RESIDENCE Ⅱ 98.90 97.38 98.69 96.50 99.01 95.20 95.20

Of-15 HF NAKAMEGURO BUILDING 88.55 88.55 100.00 100.00 100.00 88.61 100.00 Re-41 HF HATCHOBORI RESIDENCE Ⅲ 91.21 97.37 100.00 100.00 95.14 92.38 96.18

Of-16 Anw a Tsukasacho Bldg 85.29 85.29 85.29 100.00 100.00 100.00 100.00 Re-42 HF GINZA RESIDENCE 100.00 100.00 100.00 96.00 95.98 96.27 98.13

Of-17 Hatchobori MF Bldg 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-43 HF KOMAZAWA-KOEN RESIDENCE TOWER 95.31 94.60 93.98 96.62 96.72 96.62 97.64

Of-18 M2 Harajuku 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-44 HF UMEDA RESIDENCE TOWER 98.85 98.85 96.42 96.84 96.20 93.12 93.31

Of-20 Funabashi Face Bldg 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-45 HF NAKANOSHIMA RESIDENCE 93.42 93.42 91.38 86.27 85.84 87.88 89.92

Of-21 Adesso Nishiazabu 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-46 HF AWAZA RESIDENCE 98.32 98.32 93.59 93.27 93.43 90.25 88.71

Of-22 HF TORANOMON BUILDING 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-47 HF MARUNOUCHI RESIDENCE 98.61 95.84 98.61 98.61 98.61 95.82 97.21

Of-23 HF IKEBUKURO BUILDING 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-48 HF HIRAO RESIDENCE 98.98 98.41 99.43 98.98 100.00 98.53 98.06

Of-24 HF YUSHIMA BUILDING 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-49 HF KAWARAMACHI NIJO RESIDENCE 98.01 98.01 96.01 100.00 96.21 98.01 96.21

Of-25 Kayabacho Heiw a Bldg 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-52 HF TENJIN-HIGASHI RESIDENCE 97.40 94.81 97.40 97.40 100.00 97.40 100.00

Of-26 HIROKOJI AQUA PLACE 95.16 95.16 95.16 95.16 95.16 95.16 95.16 Re-53 HF SHIJO KAWARAMACHI RESIDENCE 96.31 96.31 97.49 99.37 96.91 97.57 98.78

Of-27 Kobe Kyukyoryuchi Heiw a Building 97.94 97.94 97.94 97.94 97.94 91.67 91.67 Re-54 La Residence de Sendagi 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Of-28 Mita Heiw a Building （leasehold land） 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-55 HF SENDAGI RESIDENCE 97.16 94.33 97.16 94.33 97.16 91.31 93.97

Of-29 Sakae Minami Heiw a Building 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-56 HF KOMAZAWA-KOEN RESIDENCE 94.44 91.66 91.66 97.22 97.23 94.45 88.89

Of-30 HF SAKURADORI BUILDING 97.69 97.69 97.69 97.69 97.69 97.69 97.69 Re-57 HF MUSASHIKOYAMA RESIDENCE 96.44 94.64 94.64 96.25 100.00 96.25 94.97

Of-31 HF Nihonbashi Hamacho Building 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-58 HF KOKUBUNJI RESIDENCE 98.36 100.00 100.00 96.38 100.00 98.06 98.11

Of-32 HF Sendai Honcho Building 93.04 93.04 93.04 93.04 93.04 95.10 97.31 Re-59 HF HISAYAODORI RESIDENCE 96.97 96.97 96.99 99.02 99.02 97.00 93.91

Of-33 DAIWA UENO BUILDING - 100.00 100.00 100.00 100.00 89.38 89.38 Re-60 HF KARASUMA KURAMAGUCHI RESIDENCE 95.95 95.26 97.29 97.29 93.93 89.77 91.79

Of-34 KOJIMACHI　HF BUILDING - 100.00 100.00 100.00 100.00 100.00 100.00 Re-61 HF NISHI-SHINJUKU RESIDENCE WEST 97.16 95.91 97.50 96.25 92.16 92.16 90.57

Of-35 HF KUDAN MINAMI BUILDING - 100.00 100.00 100.00 100.00 100.00 100.00 Re-62 HF NISHI-SHINJUKU RESIDENCE EAST 100.00 96.49 98.00 93.59 86.16 89.59 95.59

96.91 97.21 97.55 97.53 97.77 96.75 97.25 Re-63 HF HIGASHI-SHINJUKU RESIDENCE 98.60 97.19 97.22 98.62 100.00 98.60 95.75

Re-03 HF ICHIKAWA RESIDENCE 100.00 100.00 100.00 100.00 100.00 100.00 100.00 Re-64 HF HIGASHI-SHINSAIBASHI RESIDENCE 97.72 100.00 100.00 100.00 97.72 95.43 95.43

Re-05 HF MEGURO RESIDENCE 95.07 95.81 100.00 95.81 90.88 90.88 95.81 Re-65 HF KITA-YOBANCHO RESIDENCE 98.89 97.77 98.89 98.89 100.00 98.91 92.23

Re-09 HF KASAI RESIDENCE 97.87 97.87 97.94 95.81 95.88 97.94 97.94 Re-66 HF ATAGOBASHI RESIDENCE 98.75 100.00 100.00 98.75 98.75 97.49 98.75

Re-11 HF WAKABAYASHI－KOEN RESIDENCE 100.00 96.64 97.53 96.86 95.11 95.25 97.16 Re-67 HF KYUDAIBYOINMAE RESIDENCE 96.74 97.49 97.49 97.49 100.00 98.37 98.37

Re-12 HF HIMONYA RESIDENCE 96.72 97.27 98.36 92.89 97.80 93.64 93.64 Re-68 HF ASAKUSABASHI RESIDENCE 100.00 100.00 100.00 100.00 97.44 89.74 87.18

Re-14 HF MINAMIAZABU RESIDENCE 95.00 90.00 90.00 98.32 100.00 100.00 98.34 Re-69 HF ICHIBANCHO RESIDENCE 100.00 98.82 100.00 98.82 95.26 98.82 98.82

Re-15 HF AZABUJUBAN RESIDENCE 97.13 96.20 100.00 100.00 96.20 100.00 100.00 Re-70 HF HIGASHI-NAKANO RESIDENCE 96.76 96.86 96.86 98.43 96.75 96.86 98.43

Re-16 HF GAKUGEIDAIGAKU RESIDENCE 96.41 93.04 92.36 96.18 100.00 100.00 100.00 Re-72 HF WASEDA RESIDENCE 98.51 97.01 98.51 99.30 98.49 96.22 94.71

Re-17 HF HIGASHIKANDA RESIDENCE 98.44 100.00 98.44 98.44 98.44 93.83 96.88 Re-73 HF WASEDA RESIDENCE Ⅱ 100.00 98.27 98.27 100.00 96.21 94.48 94.48

Re-18 HF HIGASHINIHONBASHI RESIDENCE 98.80 98.80 98.80 97.36 100.00 98.80 100.00 Re-74 HF WAKAMATSUKAWADA RESIDENCE 84.70 90.14 96.35 96.35 97.85 94.19 94.19

Re-19 HF NERIMA RESIDENCE 100.00 96.16 94.24 100.00 100.00 96.16 96.16 Re-75 HF SENDAI RESIDENCE EAST - 98.79 99.39 99.39 100.00 98.64 96.82

Re-20 HF SHIROKANETAKANAWA RESIDENCE 98.75 98.75 96.22 99.35 96.77 96.77 97.74 97.34 97.02 97.35 97.82 97.27 96.16 96.30

Re-21 HF MEIDAIMAE RESIDENCE 95.80 94.01 92.20 92.22 94.59 94.60 94.55 Ho-01 Super Hotel Osaka Tennoji 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Re-22 HF NIHONBASHI RESIDENCE 96.32 94.60 94.60 100.00 98.28 95.31 93.35 Ho-02 Super Hotel Kyoto Karasumagojyo 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Re-23 HF KAMISHAKUJII RESIDENCE 98.60 98.60 98.60 98.64 98.64 93.94 96.65 Ho-03 Super Hotel Saitama Omiya 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Re-24 HF KINSHICHO RESIDENCE 98.25 98.25 96.55 94.53 98.23 98.23 98.23 Ho-04 Super Hotel Sendai Hirose-dori 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Re-25 HF GINZA RESIDENCE EAST 98.92 98.92 97.42 100.00 100.00 97.45 95.97 100.00 100.00 100.00 100.00 100.00 100.00 100.00

Re-26 HF SHIN-YOKOHAMA RESIDENCE 97.02 100.00 98.97 100.00 94.55 95.34 98.97 97.31 97.24 97.55 97.81 97.59 96.57 96.84

*1 Transferred on March 10,2015


Property Name Property Name



Total Hotels

56

14 Organization of the Asset Management Company

Name HEIWA REAL ESTATE Asset Management CO., LTD.

Head Office

Location 9-1, Nihonbashi-kabutocho, Chuo-ku, Tokyo, 103-0026

Date of

Establishment March 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 Manager Satoru 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

Activities Investment 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. (3) 79529,

Governor of Tokyo

Discretionary transaction Agent

Lic. No.8, Minister of

Land, Infrastructure,

Transportation and

Tourism

57

Financial Institutions(including securities firms),

70investors(0.46%)

Other Japanese corporations, 190investors(1.24%)

Foreign Corporations, etc, 116investors (0.75%)

Indivisual and others, 14,996investors

(97.55%)

15 Condition of Investment Unit Price

<Configuration of Investors at End of 25th Fiscal Period>

(As of May 31, 2015)

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

Based on number of investors (15,372investors)

<History of Investment Unit Price>

(Trading Value/Unit)

<Comparison with TSE REIT Index>

Heiwa Real Estate REIT

TSE REIT Index

Jun. 2,

2014

Jun. 30,

2014

Jul. 31,

2014

Aug 31,

2014

Sep. 30,

2014

Oct. 31,

2014

Nov. 30,

2014

Dec. 31,

2014

Jun. 31,

2015

Feb. 28,

2015

Mar. 31,

2015

Apr. 30,

2015

May 31,

2015

(Note) Figures as of Jun 2, 2014 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 May 31, 2015)

(Investment Unit Price/Yen)

Jun. 2,

2014

Jun. 30,

2014

Jul. 31,

2014

Aug 31,

2014

Sep. 30,

2014

Oct. 31,

2014

Nov. 30,

2014

Dec. 31,

2014

Jun. 31,

2015

Feb. 28,

2015

Mar. 31,

2015

Apr. 30,

2015

May 31,

2015

Based on quantity of investment units (951,147units)

Financial Institutions(including

securities firms), 520,914Units(54.77%)

Other Japanese corporations,

155,419Units(16.34%)

Foreign Corporations, etc, 138,059Units(14.52%)

Indivisual and others, 136,755Units(1438%)

Units Ow ned Share(Note)

(units) (%)

1 Japan Trustee Services Bank, Ltd. (trust account) 287,205 30.20

2 Heiw a Real Estate Co., Ltd. 135,845 14.28

3 The Master Trust Bank of Japan ,Ltd. (trust account) 92,075 9.68

4 NOMURA BANK (LUXEMBOURG)S.A. 70,380 7.40

5Trust & Custody Services Bank, Ltd.

(securities investment trust account)43,328 4.56

6 The Nomura Trust and Banking Co., Ltd. (trust account) 29,899 3.14

7 The Gibraltar Life Insurance Co., Ltd. (General Account J-REIT) 7,509 0.79

8 THE BANK OF NEW YORK MELLON 140030 6,900 0.73

9 Mitsubishi UFJ Morgan Stanley 6,485 0.68

10 BARCLAYS CAPITAL SECURITIES LIMITED 5,478 0.58

685,104 72.03Total

Name

Trading Value

Investment Unit Price （Closing Price）

Total market value: 90.3bn yen (as of May, 2015)

High during period (closing price): 104,600 yen (Jan 16, 2015)

Low during period (closing price): 82,400 yen ( Jun 2, Jun 9 2014)

End of period investment unit price

(closing price) : 95,000 yen

Documents

Materials for Analyst Meeting - IR Webcasting · 7/17/2015 · 3 1 Trajectory for Stable Growth of HEIWA REAL ESTATE REIT Inc 5 2 Highlights of the 27th Fiscal Period 6 3 Financial