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Daiwa Office Investment CorporationEarnings Announcement for the 27th Fiscal Period(Fiscal Period ended May 2019)

Securities Code: 8976

As of July 19, 2019

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment. 1

Contents

Appendix

Topics of the Fiscal Period ended May 2019 (27th FP) 3 Change in Major Indices after Portfolio Replacement 4

Section 1Fiscal Period ended May 2019 (27th Fiscal Period) Performance Highlights and ForecastsHighlights of the Fiscal Period ended May 2019 (27th FP) 7 Highlights of Forecasts for the Fiscal Periods ending November 2019 and May 2020 (28th and 29th FP) 8Changes in Dividends 9

Internal GrowthLeasing Market of Tokyo Office Buildings 11Analyses of Leasing Income 12Portfolio Map: Increase and Decrease in Unit Contract Rent Compared with Previous Fiscal Period 16Internal Growth Strategies 17Occupancy Status of Properties Subject to Leasing Improvement in the Fiscal Period ended May 2019 (27th FP) 18

Highlights of Leasing for the Fiscal Period ended May 2019 (27th FP) 20

Cases of Value Enhancement Work in the Fiscal Period ended May 2019 21

Section 2

External GrowthAcquisition/Sale Policy and Status of Deliberation for Property Acquisitions 24Acquisition and Sale Scheme through the Exchange in the Fiscal Period ending November 2019 25Newly Acquired Properties in the Fiscal Period ended May 2019 27Changes in Asset Size and Trading Performance 29

Section 3

Financial StrategyStatus of Interest-bearing Liabilities 31Unitholders as of the End of the May 2019 (27th) Fiscal Period 34

Section 4

Efforts on ESGEfforts on ESG | Sustainable Development Goals (SDGs) 36Efforts on ESG | Environment 37Efforts on ESG | Social / Governance 38

Section 5


Disclaimer

This material is solely for the purpose of providing information and is not intended for the purpose of offering orsoliciting investment, or as a recommendation to purchase or sell any specific product. Please refer any inquirieson potential purchases of the investment units of Daiwa Office Investment Corporation to a securities dealer.

This document is not intended to provide information to meet the requirements of Japan’s Financial Instrumentsand Exchange Act or Act on Investment Trusts and Investment Corporations, or any associated cabinet orders,cabinet office ordinances, rules, or any rules governing companies listed on the Tokyo Stock Exchange, or anyother applicable rules, nor is it a disclosure document or statement of financial performance prepared inaccordance with the provisions of any of the foregoing.

This document contains forward-looking statements. However, these forward-looking statements are based oncertain assumptions and judgments made using currently available information, and there are a number ofunknown risks and uncertainties. These forward-looking statements are not a guarantee of future performance ormanagement results of Daiwa Office Investment Corporation, and actual results may materially differ from anyexplicit or implicit forecasts contained herein.

Although the information contained in this document is the best available at the time of publication, no assurancescan be given regarding the accuracy and certainty of this information. The content of this document may bemodified or withdrawn without prior notice.

Reproduction or use of the contents included in this document without prior approval is prohibited.


Topics of the Fiscal Period ended May 2019 (27th FP)

Value enhancement through large-scale repair work

• Conducted large-scale renovation work of exterior walls at Daiwa Shibuya Miyamasuzaka. Achieved internal growth largely exceeding the increase rate of market rent.

Increase rate of unit rent after value enhancement

+20%

Amount of increase in appraisal value after value enhancement

+31%

Increase in other revenues due to the installation of signboard

+19 million yen

• Occupancy rate as of the end of the fiscal period ended May 2019 was 97.1%. Occupancy rate excluding Glass City Harumi, which was acquired in February 2019, was 98.7%.(forecasted occupancy rate as of January 2019: 97.6%)

• Amount of monthly rent increase was at the highest level ever with the renewal of contracts and occupancy by new tenants.

• Growth at an annual rate of 5% or more from 12,559 yen of actual dividends for the 27th FP to 13,200 yen of forecasted dividends for the 29th FP is forecasted.

Percentage of rent increase upon contract renewal

57.4%

Rent increase/decrease rate upon contract renewal

+7.0%

Rent increase/decrease rate upon tenant replacement

+23.1%

Growth rate of dividend resource (annualized)

7.6%

For details, please refer to page 14



Continuously strong internal growth

Property replacement with an aim to improve profitability

• Acquired Sasazuka South Building and Glass City Harumi in the 27th FP and Sumitomo Fudosan Mita 2-chome Building in the 28th FP for a total of 16.8 billion yen while selling Daiwa Onarimon Building in the 27th FP and Daiwa Osaki 3-chome Building in the 28th FP for a total of 16.3 billion yen.

• Compression of book value utilizing the exchange scheme: Allotted part of gain on sale to the reduction of book value of newly acquired properties and contributed to the increase in unrealized gain.

Acquisition of new properties

16.8 billion yenProperty sale

16.3 billion yen

Increase in unrealized gain through exchange

0.7 billion yen → 1.6 billion yen


Change in Major Indices after Portfolio Replacementn It is forecasted that NOI yield will improve and dividend will make 5% annual increase or more from the 27th FP in the portfolio from

the fiscal period ended November 2018 (26th FP) to the fiscal period ending May 2020 (29th FP) due to asset replacement andinternal growth

(Note 1) NOI Yield (annualized) for the 26th FP and 27th FP are calculated based on book value. NOI annualizes properties owned at the end of the period. Expected NOI Yield (annualized) for the 28th FP and 29th FP are calculated by taking into account the properties acquired and sold during the 28th FP based on the book value for the 27th FP.

(Note 2) NAV per unit = (Unitholders’ capital +Total appraisal value at the end of fiscal period − Total property book value at the end of fiscal period) / Number of investment units issued and outstanding.

5.1% increase in annual rate


MEMO

Section 1Fiscal Period ended May 2019 (27th Fiscal Period)

Performance Highlights and Forecasts


(Note 1) NAV per unit = (Unitholders’ capital +Total appraisal value at the end of fiscal period − Total property book value at theend of fiscal period) / Number of investment units issued and outstanding.*

(Note 2) Period average occupancy rate is calculated based on occupancies at the end of months during each fiscal period.(Note 3) NOI Yield (annualized) is calculated based on book value. NOI annualizes properties owned at the end of the period.(Note 4) Existing properties (54 properties) are the 59 properties as of the end of the 27th FP less 3 properties acquired during

the 26th FP and 2 properties acquired during the 27th FP.

(Note 5) 58 existing properties are the 59 properties as of the end of the 27th FP less 1 property (Glass City Harumi) acquired in the 27th FP.

Results of the 27th Fiscal Period

(Reference) Comparison of Forecasts with Results of 27th Fiscal Period

Factor Item

Highlights of the Fiscal Period ended May 2019 (27th FP)

Decrease

n Full contribution of revenue (rents and common area fees) from 3 properties acquired in the previous period

n Revenue (rents and common area fees) from 54 existing properties (Note 4)n Gain on sale of real estaten Revenue (rents and common area fees) from properties acquired during period

(2 properties)

n Revenue (rents and common area fees) from property sold during period (1 property)

+369 million yen

+237 million yenIncrease

-184 million yen

+142 million yen+133 million yen

Decrease

n Outsourcing expensesn Depreciationn Asset management fee

n Repair cost

+134 million yen


-77 million yen

+78 million yen

n Revenue (rents and common area fees) from properties acquired during period (1 property)

n Revenue (rents and common area fees) from 58 existing properties (Note 5)

+64 million yen


Dividends per unit for the 27th FP is calculated by dividing the amount obtained by subtracting provision for reserve for reduction entry (142 million yen) from unappropriated retained earnings by the total number of investment units issued and outstanding.

The actual occupancy rate for the 27th FP excluding “Glass City Harumi” (occupancy rate at the time of acquisition: 47.3%) acquired during the 27th FP is 98.7%.

Operating Revenue 13,193 million yen 13,833 million yen +639 million yen

Operating Expenses 6,658 million yen 6,853 million yen +195 million yen

Operation Income 6,535 million yen 6,979 million yen +443 million yen

Non-Operating Expense 636 million yen 662 million yen +26 million yen

Net Income 5,901 million yen 6,320 million yen +418 million yen

Dividend per Unit

NAV per Unit (Note 1)

Period End Occupancy Rate

Period Average Occupancy Rate (Note 2)

NOI Yield (annualized) (Note 3)

99.1% 98.0% -1.1%

4.4% 4.4% +0.0%

673,841 yen 697,220 yen +23,379 yen

98.9% 97.1% -1.8%

26th Fiscal Period(ended Nov. 2018)

27th Fiscal Period(ended May 2019) Difference

11,997 yen 12,559 yen +562 yen


Operating Revenue 14,024 million yen +191 million yen

Operating Expense 6,966 million yen +112 million yen

Operation Income 7,058 million yen +79 million yen

Non-Operating Expense 661 million yen -1 million yen

Net Income 6,394 million yen +74 million yen

Dividend per Unit

Period End Occupancy Rate

Period Average Occupancy Rate (Note 1)

NOI Yield (annualized) (Note 2)

98.2% +0.2%

4.5% +0.1%

28th FP ForecastEnding November 2019

Difference from27th FP

13,000 yen +441 yen

99.0% +1.9%

Operating Revenue 13,979 million yen -45 million yen

Operating Expense 6,840 million yen -125 million yen

Operation Income 7,138 million yen +80 million yen

Non-Operating Expense 643 million yen -18 million yen

Net Income 6,493 million yen +98 million yen

Dividend per Unit

Period End Occupancy RatePeriod Average Occupancy Rate(Note 1)

NOI Yield (annualized) (Note 2) 4.5% +0.0%

13,200 yen +200 yen

98.4% -0.6%

98.2% +0.0%

29th FP ForecastEnding May 2020

Difference from28th FP

The 28th Fiscal Period (Forecast)

The 29th Fiscal Period (Forecast)

Highlights of Forecasts for the Fiscal Periods ending November 2019 and May 2020 (28th and 29th FP)

Factor Item

Decrease

n Tax and public due (rent-business related expenses)n Repair cost n Asset management fee

n Outsourcing expense

+81 million yen

+20 million yenIncrease +68 million yen

-82 million yen

(Note 1) Expected period average occupancy rate is calculated based on occupancies at the end of months during each fiscalperiod.

(Note 2) Expected NOI Yield (annualized) is calculated by taking into account the properties assumed to be acquired and soldduring the 28th FP based on the book value for the 27th FP.

(Note 3) 56 existing properties are the 59 properties as of the end of the 27th FP less 2 properties acquired in the 27th FP and 1property sold in the 28th FP.

(Note 4) 58 existing properties are the 59 properties as of the end of the 28th FP less 1 property acquired in the 28th FP.

Decrease

n Utilities revenue n Revenue (rents and common area fees) from 56 existing properties (Note 3)n Full contribution of revenue (rents and common area fees) from 2 properties

acquired in the previous period n Revenue (rents and common area fees) from property acquired during period

(1 property)n Gain on sale of property sold during period (1 property)

n Gain on sale of property sold in the previous period (1 property)n Revenue (rents and common area fees) from property sold in the previous period

(1 property)n Revenue (rents and common area fees) from property sold during period

(1 property)

+168 million yen

+63 million yen

+118 million yen

Increase

+20 million yen

+61 million yen

-142 million yen-134 million yen

-49 million yen

Decrease

n Depreciation

n Utilities charges n Outsourcing expense

+25 million yenIncrease-87 million yen-69 million yen

Decrease

n Revenue (rents and common area fees) from 58 existing properties (Note 4)n Full contribution of revenue (rents and common area fees) from 1 property acquired

in the previous period

n Other operating revenuen Utilities revenuen Gain on sale of property sold in the previous period (1 property)n Revenue (rents and common area fees) from property sold in the previous period

(1 property)


-121 million yen-20 million yen

-9 million yen

+12 million yen

-139 million yen


Changes in Dividends

Changes in Dividends per Unit (forecast/actual)

(yen) (yen)

10,80010,71010,5609,9009,7509,0008,3287,5707,3006,5505,5005,3504,8503,6003,1802,8434,154

3,903 3,176 3,280 4,100 4,850 5,500 6,250 7,200 7,540 7,820 8,700 9,350 9,850 10,550 10,700 10,770

11,400

11,000

12,000

11,850 12,300

12,400

13,000

13,2007,400

6,009

Section 2Internal Growth


Leasing Market of Tokyo Office Buildings

Predicted figures(Note)

Leasing Market of Tokyo Office Buildings

Office Building Market Medium-term Forecast

Trend of Office Rent and Vacancy Rate of 5 Central Wards of Tokyo

Data: Miki Shoji

21,287 yen

1.69%

(Yen/Tsubo)

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

-100,000

000

100,000

200,000

300,000

400,000

500,000(Tsubo)

New supply (Grade A, etc.)Vacancy rateNew supply (Other) New supply (Entire properties)

Data: CBRE “Office market medium term forecast 2019-2023(Note) Predicted figures as of June 2019

Rent and vacancy rate of large-scale office buildings (Note 1)of 5 Central Wards of Tokyo

Average rent and vacancy rate of entire office buildings (Note 2)of 5 Central Wards of Tokyo

23,000

25,000

27,000

29,000

31,000

33,000

35,000

0% 1% 2% 3% 4% 5% 6% 7% 8%

Jun. 2019

Dec. 2011

Feb. 2008

Jan. 2004

Jul. 2012

Jun. 2010

Jun. 2017

(Rent)

Rental Market Clock (conceptual chart)

Data: Sanko Estate, compiled by Daiwa Real Estate Asset Management(Note 1) Large-scale office buildings: A floor area of 200 tsubos or more.(Note 2) Entire office buildings: Ranging from large-scale buildings to small-scale buildings (less than 20 tsubos).

14,00015,00016,00017,00018,00019,00020,000

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% Vacancy rate

Sep. 2008

Jul. 2012

Sep. 2007

Jun. 2016

Jan. 2004

Rent(Yen/Tsubo)

Dec. 2017

Dec. 2017

Floor area of new demands

Rent(Yen/Tsubo)

Vacancy rate

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

14,000

16,000

18,000

20,000

22,000

24,000

Jun. 2018

Jun. 2018

Jun. 2019

Jan.2001

Jan.2002

Jan.2004

Jan.2007

Jan.2003

Jan.2005

Jan.2008

Jan.2010

Jan.2006

Jan.2009

Jan.2011

Jan.2012

Jan.2014

Jan.2016

Jan.2013

Jan.2015

Jan.2018

Jan.2017

Jan.2019

20012002 2004

20072003 20052008 20102006

2009 20112012 2014 2016

2013 2015 20172018 2020

2019 202120222000

2023

(Vacancy rate)


27th Period CostReduction

SpaceExpansion

Consolidation

Space

SpaceReduction

BetterLocation

Other Total

New Leases 0 16 0 0 2 5 23Cancellations 3 3 4 5 1 1 17

Analyses of Leasing Income (1) ― Transition of Occupancy and New Leases / Cancellations Rates ―

Period-end Occupancy Rate

Rate of New Leases and Cancellations (Note)

Transition of New Leases and Cancellations and Its Reasons (Note)

(Note) Transition of rate of new leases and cancellations areas to the total leasable area.

(Cases)

(Note) Excluding new leases and cancellations by residence and warehouse tenants.

Previous number of leases 19

(%)

85.0

90.0

95.0

100.0

(%)

-20.0

0.0

10.0

20.0

-10.0

26thFP

29thFP

13thFP

10thFP

11thFP

14thFP

16thFP

12thFP

15thFP

17thFP

18thFP

20thFP

22ndFP

19thFP

21stFP

23rdFP

24thFP

25thFP

27thFP

28thFP

(Note) The occupancy rate excluding “Glass City Harumi” (occupancy rate at the time of acquisition: 47.3%) acquired during the 27th FP is 98.7%.

26thFP

29thFP

13thFP

10thFP

11thFP

14thFP

16thFP

12thFP

15thFP

17thFP

18thFP

20thFP

22ndFP

19thFP

21stFP

23rdFP

24thFP

25thFP

27thFP

28thFP

98.7%（Except GC Harumi）

(Note)

26thFP

27thFP

13thFP

10thFP

11thFP

14thFP

16thFP

12thFP

15thFP

17thFP

18thFP

20thFP

22ndFP

19thFP

21stFP

23rdFP

24thFP

25thFP

0

10

20

30

40

50

-40

-30

-20

-10


4.7% 5.8% 7.6% 4.7%

6 months

Annualized

6 months

Annualized 3.0% 4.3% 3.6% 2.9% 5.8% 4.9%

2.9% 2.4% 2.3% 2.9% 3.8% 2.4%

2.4% 2.3% 3.0% 3.9% 2.1%

Growth rate ofdividend resource

(Note 2)

1.5% 2.1% 1.8% 1.5%

1.2% 1.2% 1.5% 1.9% 1.0%

1.3% 2.0% 1.7% 1.5% 2.8%

25th FP 26th FP 27th FPSimple averagefor the 19th FP

onward

Growth rate ofrevenue

(rents and common area fees)(Note 1)

0.7% 1.0% 0.8% 0.7% 1.4%

19th FP 20th FP 21st FP 22nd FP 23rd FP 24th FP

5,862 7,93813,479

8,75918,847 14,371

8,78719,087 19,123

12,9173,1576,438

7663,988

6,6807,432

12,521

9,13718,441

7,618

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

19th FP 20th FP 21st FP 22nd FP 23rd FP 24th FP 25th FP 26th FP 27th FP Simple averagefrom 19th FP

onward

Contract Renewal Occupancy of new tenants

Analyses of Leasing Income (2) ― Improvement in Basic Strength ―

n The amount of monthly rent increase due to contract renewal and occupancy of new tenants is at the highest level ever

n Increase in rent revenue due to improved basic strength leads almost directly to an increase in dividend resource

Monthly Rent Increase due to Contract Renewal/Occupancy of New Tenants

Increase Rate of Dividend Resource due to Improved Basic Strength

(Note 1) Obtained by dividing the amount of rent increase (increased amount of monthly rent x 6 months) due to the improved basic strength in each fiscal period by rent revenue (rents and common area fees) in the previous fiscal period to the respective fiscal period.(Note 2) Obtained by dividing the amount of rent increase (increased amount of monthly rent x 6 months) due to the improved basic strength in each fiscal period by net income in the previous fiscal period to the respective fiscal period.

(Thousand Yen/Month)

14,376 14,246 12,747

25,52821,804

37,565

9,020

21,30928,225

20,536


Analyses of Leasing Income (3) ― Changes in Rent Increase/Decrease Rate of Contract Renewal Tenants ―

*The ratio of areas for which contract was renewed in the 27th FP (through May 2019) to the total leasable area (357,153.44 m²) as of end of November 2018.

*1 Of the increase in the 17th FP, 14.1% was due to some tenants’ switching from sublease to master lease agreements and 7.9% was thanks to negotiations with tenants.

*2 The decrease in the 25th FP was due to some tenants’ switching from sublease to master lease agreements.*3 The decrease in the 27th FP was due to an agreement on decrease reached by the previous owner.

Forecasts

(Note) The ratio of areas scheduled for contract renewal in each period to the total leased area (354,005.35 m2) as of May 31, 2019.

Realized upward rent revisions for 11 consecutive periods

(Note) The above indicates rent increase/decrease rate to pre-renewal rents for lease contracts which reached renewed agreements during each FP.Rent increase/decrease rate is calculated based on net amount for increased/decreased rents.

(Breakdown of upward revision magnitude for monthly rents in the 27th FP)

Increase rate of monthly rent

7.2 %(Previous FP: 9.9%)

15% or more7%

10% or more but less than 15%12%

5% or more but less than 10%55%

2% or more butless than 5%

22%

2% or less5%

(Note) Percentage figures are based on total monthly rent.

Properties with rent increase

l Daiwa Ginzal Shinjuku Maynds Towerl Daiwa Nishishimbashil E SPACE TOWERl shinyon curumul Daiwa Shibuya Miyamasuzakal Glass City Shibuyal CONCURRED Yokohama

etc.

Increased amount of monthly rent 19,421 thousand yen/month

*1

*2

The 27th Fiscal Period Contract Renewal Tenants Changes in Rent Increase/Decrease Rate of Contract Renewal Tenants (sections)

Contract Renewal Periods (based on leased area)

Rent Increase Rate Upon Contract Renewal

*3

(%)

(%)


Analyses of Leasing Income (4) ― Increase/Decrease in Rent Due to New Leases and Cancellations ―

Average Contract Rent and Market Rent

Increase/Decrease in Monthly Contract Rent (Note)Compared with the End of the Previous Fiscal Period

Monthly Rent Increase/Decrease and Increase/Decrease Rate due to Occupancy by New Tenants

(Total Monthly Rent, Thousand Yen)

(Note) Comparison of monthly rent due to tenant replacement for the same leasing area.Ratio is based on total monthly rent.

Properties with Rent Increase due to Occupancy by New Tenants during 27th fiscal period

l Daiwa Jingumae

l Daiwa Higashi-Ikebukuro

l Daiwa Jimbocho

l Daiwa Nishishimbashi

l shinyon curumu

l Daiwa Shibuya Miyamasuzaka

l Glass City Shibuya

l Daiwa Daikanyama (Note), etc.

Increased amount of monthly rent18,441 thousand yen/month

(Yen/Tsubo)

(Note 1) Average contract rent is the average of monthly contract rent from tenants at the end of each fiscal period.(Note 2) Unit rent index is the earning rates of unit rent of individual properties indexed with the figure at the end of the 7th FP as 100.

(Million Yen)

Increase by Rent Revisions

End of 27th FPMonthly Contract Rent

End of 26th FPMonthly Contract Rent

(Note) Monthly Contact Rent is a total of final rent from contracting tenants at the end of the fiscal period. Monthly contract rent for Shinjuku Maynds Tower was adjusted to 3/7 and monthly contract rent for CONCURRED Yokohama was adjusted to 75/100.

98,24679,804

59,04255,054

75,94369,262

14.9%

23.1%

7.2%

9.6%

8.9%

91,39483,962

96,29483,772

7thFP

8thFP

10thFP

13thFP

9thFP

11thFP

14thFP

16thFP

12thFP

15thFP

17thFP

18thFP

20thFP

22ndFP

19thFP

21stFP

27th FPEnd

6thFPEnd

26thFP

25thFP

23rdFP

24th FP

19,295

83.52

19,237

84.7986.67

19,571

16.0%

66,10456,967

15,000

18,000

21,000

24,000

27,000

30,000

12,000

60

70

80

90

100

110

40

50

Increase byNew Acquisition

Increase byNew Leases

Decrease byTenants’ Cancellations

Decrease by Rent Revisions Decrease by

Property Sale

(Note) Square Daikanyama Building was renamed Daiwa Daikanyama as of May 1, 2019. The same hereinafter.


Toshima Ward

Koto Ward

Shinagawa Ward

Shibuya Ward

Chiyoda Ward

Chuo Ward

Minato Ward

Tokyo

Shinjuku Ward

Daiwa Aoyama

Daiwa Daikanyama

Shinjuku West BuildingDaiwa Misakicho Daiwa Sarugakucho

Daiwa Nihonbashi Horidomecho

Daiwa Ginza

Daiwa Tsukishima

Daiwa Shibaura

Daiwa ShibadaimonDaiwa Azabudai Daiwa A Hamamatsucho

DaiwaShimbashi 510

Daiwa Ginza Annex

Daiwa TsukijiDaiwa Tsukijiekimae

Daiwa Jingumae

Daiwa Minami Aoyama

Daiwa Kyobashi

Daiwa Kojimachi4-chome

Daiwa SHIBUYA EDGE

Shinjuku Maynds Tower Daiwa Kodenmacho

Daiwa Nishi-Shimbashi

Daiwa JimbochoDaiwa Jinbocho 3-chome

E SPACE TOWER

shinyon curumu

Daiwa Akasaka

Daiwa Shibuya Miyamasuzaka

Daiwa Azabu Terrace

LAQUAS Higashi Shinjuku

Shinsen PlaceGlass City Shibuya

Daiwa Ebisu 4-chome

Daiwa Hatchobori ekimae West

Daiwa Nishi-Shinjuku

Prime Kanda Building

Daiwa NihonbashiHongokucho

Daiwa Kayabacho Build.Daiwa River Gate

Daiwa Hatchobori ekimae

Kirin Nihonbashi Building

Daiwa Kanda Mikuracho

Daiwa Kitahama

Portfolio Map: Increase and Decrease in Unit Contract Rent Compared with Previous Fiscal Period

As of May 31, 2019

Comparison with Previous Fiscal Period Increase and Decrease of Unit Contract Rent

Unit rent increase: 36The number in ● indicates increase for the consecutive period(Ex: ● indicates increase for the second consecutive period)

Unit rent maintained: 21Unit rent decrease: 0

(Note) Properties acquired in the 27th FP and 28th FP are plotted with ●.

2

Regional Major Cities

Greater Tokyo Five Central Wards of Tokyo

Daiwa Higashi-Ikebukuro

Daiwa Shinagawa North

Daiwa Osaki 3-chome

Daiwa Kamiooka

Integral Tower

Daiwa Meguro Square

Daiwa Ogikubo

Sasazuka NA BuildingSasazuka South Building

Daiwa Kanda EastCONCURRED Yokohama

Kita-ShinagawaGotenyama Building

Daiwa Higashi-Nihonbashi

2

3

54

22

2

7

8

10

4

8

2

2

Sumitomo Fudosan Mita 2-Chome Building

2

5

3

2

2

6

2

12

Glass City Harumi


Internal Growth Strategies

Continuous Internal Growth and Maximization of Asset Value through “Bonji-Tettei”

Realization of internal growth

Activities for internal growth

Grasp of present

situations

l Accurate understanding of the leasing marketl Grasping of needs and trends of occupying

tenants through regular visitsl In-depth understanding of property features

l Information gathering from brokersl Implementing tenant satisfaction surveys

and proposing improvement measuresl Periodical property examination

l Maintenance of a stable occupancy rate by promptly filling vacancies

l Realization of stable management through solid relationship with tenants

l Securement of revenue based on well-planned management

Aims to maximize asset value

Aims at maximizing asset value by means of specialist groups headed by personnel assigned to each property in the Investment Corporation’s portfolio.

Engineering: Formulation and implementation of construction planning of the assets.

Office Management Team (8 members)

Hiroshi UdagawaAsset management work history:

13 years

Takafumi UshikuAsset management work history:

14 years 10 months

Kotaro IshiiAsset management work history:

13 years 3 months

Jun AraiAsset management work history:

13 years 3 months

Chie KamimuraAsset management work history:

13 years 1 month

Kosuke MizunaraAsset management work history:

5 years 3 months

Jun IwasakiAsset management work history:

2 year 9 months

Construction Management Team (6 members)

Kazuyoshi OnoAsset management

work history: 12 years 8 months

Takahiro HirabayashiAsset management


(Note) “Asset management work history” is the number of years engaged in the relevant work (as of July 19, 2019) and does notindicate the number of years employed at the asset management company.

Investment Planning Team (4 members)

Middle office work: Budget and performance management for the portfolios

Junpei TakayaAsset management


Hiroshi UdagawaAsset management

work history: 13 years

Naoki MurayamaAsset management

work history: 4 years 1 month

Takeshi MorikawaAsset management work history:

8 months

Naoyuki TakedaAsset management



Kita-Shinagawa Gotenyama Building(Acquisition Price: 2,500 million yen)

Daiwa Jingumae(Acquisition Price: 2,800 million yen)

Location Kita-Shinagawa, Shinagawa-ku, TokyoSite Area 602.41 m²Structure SRC/S

Floor 8FUse Office/Parking

Total Floor Area 2,897.64 m²Occupancy rate 58.6% (as of end of November 2018)

Construction Date July 1992

Occupancy rate (%)

n Advertised to a wide range of markets with its strength of a relatively low leasing cost despite its location within walking distance from Shinagawa Station, and successfully attracted tenants from a wide range of areas including the area between Shibuya Station and Shinagawa Station along the Yamanote Line and the southern part of Tokyo.

n Occupancy rate as of May 2019 is 100.0%.

Occupancy rate (%)

Occupancy Status of Properties Subject to Leasing Improvement in the Fiscal Period ended May 2019 (27th FP) (1)

n The property is a 10-minute walk fromShinagawa Station on the JR YamanoteLine, JR Keihin Tohoku Line and JRTokaido Line and a 1-minute walk fromKita-Shinagawa Station on the Keikyu Line.

n Needs for headquarters, branches andbusiness offices in Tokyo from companiesdeveloping businesses nationwide andemphasizing wide-area traffic convenienceas well as demand for back-offices fromcompanies that have bases in largebuildings in the neighboring areas can beexpected.

n Located a 7-minute walk fromGaienmae Station on the TokyoMetro Ginza Line.

n An office building with high visibilityfacing Gaien-Nishi Dori street. Ithas low-rise and well-designedexterior as well as a rectangle-shaped rental space with no pillars.

Upon acquisition

n The property is located in an area where redevelopments for the Tokyo Olympic Games are underway and features a refined design. It received multiple applications for occupancy and unit rent increased due to special demands associated with the Olympic Games. In addition, contracts were concluded with no free rent.

n Occupancy rate as of the end of February 2019 was 100%

Location Jingumae, Shibuya-ku, TokyoSite Area 887.69m²Structure RC

Floor B1/4FUse Office

Total Floor Area 2,673.88m²Occupancy rate 78.5% (as of end of November 2018)

Construction Date December 1997


Glass City Shibuya(Acquisition Price: 16,000 million yen)

Location Nanpeidaicho, Shibuya-ku, TokyoSite Area 2,452.64 m²Structure S/SRC

Floor B1/11FUse Office

Total Floor Area 10,639.97 m²Occupancy Rate 100.0% (as of November 30, 2018)

Construction Date February 2004

Occupancy rate (%)

n Contracts were concluded at a level which is 30.0% higher than the previous unit rent as a result of attracting companies which prefer the Shibuya area and focus on building image by utilizing the characteristics of the property such as its stylish appearance and the acquisition of “A rank” in CASBEE Property Appraisal.

n Advertised its size where a maximum of approximately 400 tsubos per floor can be secured against the backdrop of the scarcity of vacant rooms in the Shibuya area. Maintained an occupancy rate of 100.0% with no downtime although occupancy rate was initially expected to decrease to 49.0% at the end of November 2018.

Occupancy Status of Properties Subject to Leasing Improvement in the Fiscal Period ended May 2019 (27th FP) (2)

n Located a 9-minute walk from Shibuya Station on the JR Yamanote Line.

n Demand from various companies including IT-related companies, wholesalers and retailers as well as creative tenants such as offices attracting clients, worker dispatch business, designer offices and music and video-related tenants are assumed.

Forecasted figures as of November 2018

(Note 1) Calculated by dividing the newly contracted unit rent for the section subject to leasing by the previous unit rent.

(Note 2) Comparison with appraisal value as of the end of November 2018.

Change in appraisal value

(100 million yen)

Receipt of cancellation notice (around September 2018)

Occupancy Rate Maintained 100.0% occupancy rate

Downtime 0 months

Unit Rent UP 31.5% (Note 1)

Appraisal Value UP 15.8% (Note 2)

Leasing Results

Increase in net operating revenue

+24.6Decrease in

cap rate+5.4


Glass City Harumi(Acquisition Price: 11,200 million yen)

Location Harumi, Chuo-ku, Tokyo

Site Area 2,230.55m²

Structure S

Floor B1/12F

Use Office/Store

Total Floor Area 15,012.46m²

Occupancy Rate 47.3% (as of acquisition)

Construction Date January 2008

n Promoted leasing activities taking into account leasing by section in order to take in demand also from startups while targeting companies which need several floors as the main target by utilizing the characteristics of enjoying cost benefits while offering certain transportation convenience to central Tokyo.

n As a result, new contracts were concluded for a total of 2,652.54 tsubos in approximately 4 months after the acquisition and the occupancy rate is expected to be 100.0% as of September 1, 2019.

Highlights of Leasing for the Fiscal Period ended May 2019 (27th FP)

n The property is a 10-minute walk from Kachidoki Station on the Toei Subway Oedo Line

n The property can expect demand for back offices from companies which need several floors, with each sized at approximately 288 tsubos, or companies with headquarters located in the neighboring areas.

(Note) Calculated by dividing the actual contracted unit rent for the section subject to leasing on the typical floor by the previous unit rent.

Predicted figures

Leasing Results

Occupancy Rate 47.3%⟶100%

Leasing Period Approx. 4 months

Newly Leased Area 2652.54 tsubos

Unit Rent UP 23.1% (Note)

Occupancy rate (%)

May2019

Feb.2019

Aug.2019

Nov.2019


8794

103

114


Cases of Value Enhancement Work in the Fiscal Period ended May 2019

Value enhancement through large-scale renovation work of exterior wall

n Visibility, name recognition and asset value increased significantly with the large-scale renovation work of exterior walls conducted jointly with Tange Associates.

n Although the property is over 30 years old, average rent increased by 20% or more with the completion of construction work.

n Achieved rent increase by a little over 34% through tenant replacement.

n Annual amount of appraised NOI increased by approximately 19 million yen with the increase in signboard space.

Total construction costs: approximately 270 million yenConstruction period: approximately 1 year

×

after afterImpact on appraisal value

⇒ Appraisal value as of the end of the 27th FP increased by 31% from the 24th FPContributed to the improvement of property value with the improvement of profitability.

Change in appraisal value

Decrease in cap rate+7.9

Increase in net operating revenue+18.7

Impact on unit rent

⇒ Achieved rent increase largely exceeding the increase in market unit rent (existing buildings in Shibuya Ward).

Change in market rent

*Indexed with the figure at the 24th FP as 100.*Data: Miki Shoji

120

125

95

105

110

115

100

Announcement of construction work (from around November 2017)

Average in Shibuya Ward


110

120

90

100105

115

8085

95

25thFP

24thFP

26thFP

27thFP

25thFP

24thFP

26thFP

27thFP

(100 million yen)

before


MEMO

Section 3External Growth


Acquisition/Sale Policy and Status of Deliberation for Property Acquisitions

Acquisition/Sale Policy

Sourcing Strategy Capitalizing on Status as Non-Real Estate Sponsored REIT

n Places priority in the five central wards of Tokyo and equivalent area.n Thoroughly select properties in view of actual demand toward location

(distance to station, station power, crowd attraction, surrounding environment),building specs, etc.

n Target properties to improve growth potential and profitability of existingportfolio.

n Invest in buildings with a building age of less than 25 years.n Consider replacement when necessary in consideration of future

competitiveness, profitability, etc. of properties.

n Secure a sourcing route across a wide range by capitalizing on status as anindependent style REIT and establishing strong relations with businesscompanies, financial institutions, real estate brokers, etc.

n Target optimum expansion of portfolio based on in-depth data analysis uponcareful selection from among the wide-ranging information on properties thatcomes from diverse sources.

Number of Properties Reviewed for Acquisition

Distribution Chart of Portfolio Properties

Building Age (Year)

Distance to station (minutes)(Note) Number of gross proposals.

(Note)


Acquisition and Sale Scheme through the Exchange in the Fiscal Period ending November 2019

n Conducted property exchange in anticipation of the rejuvenation of portfolio and improvement of profitability over the medium to long term

n Allotted part of gain on sale to the compression of book value of newly acquired properties and contributed to the increase in unrealized gain

Acquisition

Sumitomo Fudosan Mita 2-Chome Building(1) Acquisition Price(2) Assumed Book Value

(1) 2,635 million yen(2) 1,567 million yen (Note 1)

Appraisal Value 3,240 million yen (as of June 1, 2019)

NOI Yield Against acquisition price: 4.7% (Note 2)

Against assumed book value: 7.9%

Appraisal NOI Yield 4.8%

Construction Date / Building Age March 2017 / 2.3 years (Note 3)

Occupancy Rate 100.0％

Seller Sumitomo Realty & Development Co., Ltd.

Transfer

Exchange

Effect of asset replacement

(Note 1) The Investment Corporation is scheduled to make a reduction entry for the land and building of the property acquired by applying the provisions of the “Inclusion in Deductible Expenses of the Amount of Advanced Depreciation of Assets Acquired by Exchange” in Article 50 of the Corporation Tax Act and deduct advanced depreciation amount of 1,067 million yen among the gain on sale of the property divested from the book value of the property acquired. As a result, the book value of the property acquired is expected to be 1,567 million yen before applying the acquisition cost, etc.

(Note 2) NOI yield against acquisition price is calculated based on the leasing agreement for the property acquired on the acquisition date by dividing the annual income with the assumption of the occupancy rate being 100.0% in consideration of the taxes and other costs that may be incurred by acquisition price. The figures are rounded to the first decimal place.

(Note 3) As of July 1, 2019(Note 4) Book value is as of November 30, 2018. (Note 5) NOI in the NOI yield is calculated based on the annualized NOI for the 26th FP.(Note 6) The difference between the appraisal value and assumed book value as of June 1, 2019 is calculated for the property acquired and the difference between the appraisal value

as of the end of the 26th FP and the book value as of November 2018 for the property transferred..

Daiwa Osaki 3-chome(1) Transfer Price(2) Book Value

(1) 2,685 million yen(2) 1,594 million yen (Note 4)

Appraisal value 2,350 million yen (as of Nov. 30, 2018)

NOI Yield (Note 5) Against sale price: 4.0%Against book value: 6.8%

Difference from exchange of property 50 million yen

Construction Date / Building Age September 2007 / 11.8 years (Note 3)

Buyer Sumitomo Realty & Development Co., Ltd.

l Aim to lower the book value of the property acquired by making a reduction entry of 1,067 million yen with the exchange scheme and improve profitability over the medium to long term. Also intend to improve NOI and rejuvenate the entire portfolio.

Increase in unrealized gain through exchange (Note 6)

0.7 billion yen → 1.6 billion yen

Properties acquiredAssumed book value NOI yield

7.9 %

Transferred a 11.8-year old property and acquired a 2.3-year old property

l Rejuvenation of portfolio -0.1 years


Properties Acquired and Transferred through Exchange in the Fiscal Period ending November 2019

Sumitomo Fudosan Mita 2-Chome Building Acquisition price: 2,635 million yen, Acquisition date: July 1, 2019

• The property is a 6-minute walk from Akabanebashi Station on the Toei Oedo Subway Line, a 7-minute walk from Mita Station on theToei Mita and Asakusa Subway Lines and a 10-minute walk from Tamachi Station on the JR Yamanote and Keihin Tohoku Line. Withtrain rides from Tamachi Station taking approximately 9 minutes to reach Tokyo Station and those from Mita Station taking approximately9 minutes to reach Otemachi Station, etc., the property enjoys excellent access to major stations in Tokyo.

• The Shibakoen, Shiba and Mita area where the property stands is adjacent to newly emerging office districts such as Shiodome andShinagawa and also offers excellent access to districts with a high concentration of business such as Otemachi and Hibiya. In addition, itis located along Sakurada-dori street on National Route 1 and offers high visibility.

Transportation access

• The property has 8 floors above ground with a gross floor area of 3,003.17 m2 and a leasable area of approximately 90 tsubos per flooris secured. It is equipped with 2,700 mm of typical floor celling height and 100 mm of OA floor. The exterior of the building features blackaluminum curtain wall delivering strong presence, and the grade and convenience have been enhanced by having a spacious entranceand multipurpose toilets on the first floor without any rental rooms.

Property overview

Location / Distance from Station

Osaki, Shinagawa-ku, Tokyo / 3 minutes Floor area 2,243.36 m²

Construction Date / Building Age

September 2007 / 11.8 years* Appraisal value

2,350 million yen (as of November 30, 2018)

Structure / Floor S/SRC / B1F/6F NOI Yield (Note) 4.0%

Daiwa Osaki 3-chome Transfer price: 2,685 million yen, Transfer date: July 1, 2019

Location /Distance from Station

Mita, Minato-ku, Tokyo /6-minute walk from Akabanebashi Station

Construction Date /Building Age March 2017 / 2.3 years*

Land Area(Ownership) 454.37m²

Building Area (Compartmentalized ownership 100%) 3,003.17m²

Structure / Floor S / 8F Number of Tenant 1 (as of acquisition)

After Reduction entryNOI Yield Assumed Book Value (Note 1) Depreciation (Note 2)

7.9% 1,567 million yen 0.5%

AppraisalNOI Yield (Note 3) Appraisal Value (Note 4) Occupancy Rate

4.8% 3,240 million yen 100.0%

Upon AcquisitionNOI Yield (Note 5) Acquisition Price Occupancy Rate

4.7% 2,635 million yen 100.0%

Mid-termNOI Yield (Note 6) Occupancy Rate

4.7% 100.0%

(Note 1) The Investment Corporation is scheduled to make a reduction entry for the land and building of the property by applying theprovisions of the “Inclusion in Deductible Expenses of the Amount of Advanced Depreciation of Assets Acquired by Exchange” inArticle 50 of the Corporation Tax Act and deduct advanced depreciation amount of 1,067 million yen among the gain on sale of theproperty sold from the book value of the property. As a result, the book value of the property is expected to be 1,567 million yenbefore applying the acquisition costs, etc.

(Note 2) The figure for depreciation is the total amount of the six-month depreciation conversion figure expected to accrue in the fiscal periodof acquisition and the appropriate expected depreciation charge for the next fiscal period (six-month period), which are divided by theacquisition price. The figures are rounded to the first decimal place. The figure is not the forecast for the current fiscal period or thenext fiscal period onward.

(Note 3) The figure for appraisal NOI yield is calculated based on net operating income used for the calculation of the income approach valueas per the direct reduction process as stipulated in the property appraisal report and divided by acquisition price. The figure isrounded to the first decimal place.

(Note 4) As of May 1, 2019

(Note 5) NOI yield at acquisition is calculated based on the leasing agreement for the property on the acquisition date by dividing the annualincome with the assumption of the occupancy rate being 100.0% in consideration of the taxes and other costs that may be incurredby acquisition price. The figures are rounded to the first decimal place.

(Note 6) Midterm NOI yield is calculated based on the assumption that after the property acquisition, the Investment Corporation will receiverent on an ongoing basis for the medium term (with the assumption of the occupancy rate being 100.0%). The estimated figureswhere the rental business expenses are deducted from the rental revenue are divided by the acquisition price. The figures arerounded to the first decimal place. The figure is not the forecast for the current fiscal period or the next fiscal period onward.

(*) As of July 1, 2019

(Note) NOI yield is calculated by dividing theactual annualized NOI for the 26th FP bythe transfer price.

(*) As of July 1, 2019

改良

Location /Distance from StationMita, Minato-ku, Tokyo /6-minute walk from Akabanebashi StationConstruction Date /Building AgeMarch 2017 / 2.3 years*

Land Area (Ownership)454.37 m²Building Area (Compartmentalized ownership 100%) 3,003.17 m²

Structure / FloorS / 8FNumber of Tenant1 (as of acquisition)

After Reduction entryNOI YieldAssumed Book Value (Note 1)Depreciation (Note 2)

7.90%1,567 million yen0.50%

AppraisalNOI Yield (Note 3)Appraisal Value (Note 4)Occupancy Rate

4.80%3,240 million yen100.00%

Upon AcquisitionNOI Yield (Note 5)Acquisition PriceOccupancy Rate

4.70%2,635 million yen100.00%

Mid-termNOI Yield (Note 6)Occupancy Rate

4.7%100.0%

元々

所在地/駅距離東京都港区三田/６分鑑定価格(注1)3,240百万円

建築時期/築年数2017年3月31日/2.3年*土地面積(所有権)454.37㎡

構造/階数S/8F建物面積(区分所有権100％)3,003.17㎡

稼働率100.0％（取得日時点）テナント数1（取得日時点）

取得時（注2）NOI利回り稼働率中期（注3）NOI利回り稼働率

4.7%100.0%4.7%100.0%

鑑定（注4）NOI利回り稼働率減価償却（注5）0.5%

4.8%100.0%

圧縮記帳後アッシュクキチョウゴNOI利回り想定帳簿価格ソウテイチョウボカカク

7.9%1,567百万円ヒャクマンエン

Sheet2

Sheet3


Newly Acquired Properties in the Fiscal Period ended May 2019

Glass City Harumi Acquisition price: 11,200 million yen, Acquisition date: February 27, 2019

• The property is a 10-minute walk from Kachidoki Station on the Toei Subway Oedo Line. With train ridesfrom Kachidoki Station taking approximately 13 minutes to reach Otemachi Station and approximately 22minutes to reach Shinjuku Station, etc., the property enjoys excellent access to major stations in Tokyo.

• The Kachidoki area where the property stands allows tenants to lease medium to large buildings with goodspecifications/equipment and relatively low rents while securing a certain level of transport convenience asit is located close to central Tokyo and thus has strong appeal for tenants. Given such, the property canexpect demand for back offices from companies which need several floors, with each sized atapproximately 288 tsubos, or companies with headquarters located in the neighboring areas.


• The property has 12 floors above ground and 1 floor below with a gross floor area of 15,012.46 m² and aleasable area of approximately 288 tsubos per floor is secured. It is equipped with 2,800 mm of typicalfloor celling height and 100 mm of OA floor. The exterior of the building features aluminum curtain walldelivering strong presence, and since it stands on a wide street, the property boasts high visibility.Equipped with an individual air-conditioning system, one floor can be air-conditioned in three parts.Therefore, the property is highly versatile in accommodating leasing by floor or by section. In addition, theproperty has acquired a GOLD level in LEED, an environmental performance evaluation/certificationprogram for use of buildings and land, etc., and can thus also be expected to attract companies that areenvironmentally conscious (foreign companies, etc.).

Property overview


Harumi Chuo-ku, Tokyo /10-minute walk from Kachidoki Station Appraisal Value

(Note 1) 12,000 million yen

Construction Date/Building Age

January 200811.1 years* Land Area 2,230.55m²

Structure/Floor S / B1/12F Building Area 15,012.46m²

Occupancy Rate 47.3% (as of acquisition) Number of Tenant 6 (as of acquisition)

Upon Acquisition (Note 2)NOI Yield Occupancy Rate

Mid-term (Note 3)NOI Yield Occupancy Rate

4.1% 95.0% 4.2% 95.0%

AppraisalNOI Yield Occupancy Rate

Depreciation (Note 4) 0.6%4.2% 95.0%

(Note 1) As of February 13, 2019

(Note 2) Figures calculated by dividing the expected annual balance of paymentsunder the assumed occupancy rate (95.0%) by the acquisition price,based on the lease agreement upon acquisition, etc. while taking intoaccount the accrual of tax and public due, etc. are indicated. The figuresdo not represent forecast figures for the current period or the next periodonward.

(Note 3) Figures calculated by dividing the estimated figures for normal operationperiod (with assumed occupancy rate of 95.0%) after acquisition,obtained by deducting rent business-related expenses from rent revenueassumed under rents over a medium term, by the acquisition price areindicated. The figures do not represent forecast figures for the currentperiod or the next period onward.

(Note 4) Depreciation indicates a figure obtained by dividing the total amount ofdepreciation (6-month equivalent) expected to be posted upon propertyacquisition and depreciation (for 6 months) expected to be posted in thefollowing fiscal period by the acquisition price. The figures do notrepresent forecast figures for the current period or the next period onward.

* As of end of February 2019


Sasazuka South Building Acquisition price: 3,000 million yen, Acquisition date: December 27, 2018

Properties Newly Acquired and Sold in the Fiscal Period ended May 2019

• The property is a 7-minute walk from Sasazuka Station on the Keio Line/Keio New Line and a 6-minute walk from DaitabashiStation. The location is excellent considering that Sasazuka Station is only five minutes from Shinjuku Station, and from thepoint of the proximity to the terminal station.

• The Sasazuka area where the property stands has head offices, laboratories, etc. of new IT startups. Being relatively close toShinjuku, the area is likely to expect demand for back offices from construction-related companies and companies which havehead offices in Shinjuku.


• The property has eight floors above ground and one below with a gross floor area of 5,400.7 m2 and a leasable area ofapproximately 167 tsubo per floor is secured. It is equipped with 2,600 mm of typical floor celling height, 70 mm of OA floor,individual air-conditioning system, etc. The office has no pillars within the rental space, which enables to offer excellent layoutflexibility and usability.

• Even after surpassing 25 years since its completion, the property has been appropriately maintained and managed, and willstay competitive from here on out without lagging behind properties in the surrounding area through systematic facility renewalafter the acquisition.

Property overview


Sasazuka Shibuya-ku, Tokyo /6-minute walk from Daitabashi Station Appraisal Value

(Note 1) 3,300 million yen

Construction Date/Building Age

December 199126.9 years*

Land Area (Ownership) 1,001.88m²

Structure/Floor SRC/S / B1/8F Building Area (Compartmentalized ownership 100%) 5,400.70m²

Occupancy Rate 100.0% (as of acquisition) Number of Tenant 9 (as of acquisition)

Upon Acquisition (Note 2)NOI Yield Occupancy Rate

Mid-term (Note 3)NOI Yield Occupancy Rate

4.2% 100.0% 5.0% 95.0%

AppraisalNOI Yield Occupancy Rate

Depreciation (Note 4) 0.6%4.9% 95.0%

Location / Distance from Station Shimbashi, Minato-ku, Tokyo / 2 minutes Floor area 13,805.18m²

Construction Date / Building Age April 1973 / 45.9 years* Appraisal value

13,700 million yen (as of November 30, 2018)

Structure / Floor SRC / 9F NOI Yield (Note) 3.6%

Daiwa Onarimon Transfer price: 13,700 million yen, Sale date: February 28, 2019

(Note 1) As of December 1, 2018

(Note 2) Figures calculated by dividing the expected annual balance of payments under theassumed occupancy rate (100.0%) by the acquisition price, based on the leaseagreement upon acquisition, etc. while taking into account the accrual of tax andpublic due, etc. are indicated. The figures do not represent forecast figures for thecurrent period or the next period onward.

(Note 3) Figures calculated by dividing the estimated figures for normal operation period (withassumed occupancy rate of 95.0%) after acquisition, obtained by deducting rentbusiness-related expenses from rent revenue assumed under rents over a mediumterm, by the acquisition price are indicated. The figures do not represent forecastfigures for the current period or the next period onward.

(Note 4) Depreciation indicates a figure obtained by dividing the total amount of depreciation(6-month equivalent) expected to be posted upon property acquisition anddepreciation (for 6 months) expected to be posted in the following fiscal period by theacquisition price. The figures do not represent forecast figures for the current periodor the next period onward.

* As of end of November 2018

(Note) NOI yield is calculated by dividing theactual annualized NOI for the 26th FP bythe transfer price.

(*) As of February 28, 2019


Changes in Asset Size and Trading Performance

Aim to Achieve Medium-Term Goal Asset Size of 500 Billion Yen

• Daiwa JimbochoAcquisition Property

• Daiwa Osaki 3-chomeAcquisition Property• Daiwa Nishi-Shimbashi

• Daiwa Kudan

Acquisition Property

• Daiwa River Gate• Daiwa Hatchobori ekimae• Daiwa Hatchobori ekimae West


• Daiwa Ebisu 4-chome• LAQUAS Higashi Shinjuku• Daiwa Aoyama• Shinsen Place• Glass City Shibuya• Daiwa Meguro Square


• Daiwa Kayabacho• Daiwa Jinbocho 3-chome


• Daiwa Nihonbashi HongokuchoAcquisition Property

• Integral TowerAcquisition Property

• Daiwa Kanda MikurachoAcquisition Property

• E SPACE TOWERAcquisition Property

• Daiwa Azabu Terrace• Daiwa Kitahama


• CONCURRED Yokohama• Daiwa Kanda East


• Daiwa Higashi-Nihonbashi • Daiwa Daikanyama• Shinjuku West Building• Daiwa Ogikubo


• Daiwa Shibuya Dogenzaka• Daiwa Akasaka• Daiwa Shibuya Miyamasuzaka


• shinyon curumu• Daiwa Meieki• Daiwa Kamiooka


• Daiwa Nishi-Shinjuku• Kirin Nihonbashi Building


• Prime Kanda Building• Kita-Shinagawa Gotenyama Building• Sasazuka NA Building


• Sasazuka South Building• Glass City Harumi


41.5

28.128.9

34.0 34.2 34.437.5

40.643.0

40.2

44.341.7

43.342.3 42.2

25.5

42.340.5

42.1

269.1 278.1287.3

311.3 313.2 314.9332.0

352.7364.0

387.5

413.2

445.7458.3

467.7 469.3

500.0

469.3

439.4 459.7 460.0 461.0

• Sumitomo Fudosan Mita 2-Chome BuildingAcquisition Property

Section 4Financial Strategy


Medium- to long-term, upper-limit target LTV range

Status of Interest-bearing Liabilities (1)

Loan to Value Trend

Ratio of Fixed and Floating Borrowings

Status of Interest-bearing Liabilities (End of 27th Fiscal Period)

Ratio of Long and Short-Term Borrowings

Status of Rating

(Note) LTV (based on total assets) = Total interest-bearing liabilities / Total assets

Fixed interest

Floating interest Short-term loans payable, current portion of long-term loans payable and current portion of investment corporation bonds

Long-term loans payable, etc.

42.1%

86.5%

13.5%

85.6%

14.4%

(Hundred Million Yen)

(Note)

26thFP

13thFP

11thFP

14thFP

16thFP

12thFP

15thFP

17thFP

18thFP

20thFP

22ndFP

19thFP

21stFP

23rdFP

24thFP

25thFP

27thFP

Japan Credit Rating Agency, Ltd. (JCR)

Rating and Investment Information, Inc. (R&I)

Long-term issuer ratingRating outlook: Stable

(As of February 5, 2019)

Issuer ratingRating outlook: Positive

(As of September 12, 2018)



Repayment Schedule Changes in Procured Years of Interest-Bearing Liabilities

(Million Yen)

n Investment Corporation Bond

4.0

8.3

4.1

(Year) (Year)

26thFP

16thFP

15thFP

17thFP

18thFP

20thFP

22ndFP

19thFP

21stFP

23rdFP

24thFP

25thFP

27thFP

46thFP

30thFP

28thFP

31stFP

33rdFP

29thFP

32ndFP

34thFP

35thFP

37thFP

39thFP

36thFP

38thFP

40thFP

42ndFP

44ndFP

47thFP

43rdFP

41stFP

45thFP



(Million Yen)

Name of Financial Institutions Balance Comparison withPrevious Period Balance Ratio Name of Financial Institutions BalanceComparison withPrevious Period Balance Ratio

Sumitomo Mitsui BankingCorporation 41,400 +2,000 20.8% The Yamaguchi Bank, Ltd. 2,000 - 1.0%

Sumitomo Mitsui Trust Bank,Limited 24,500 +1,000 12.3% The Norinchukin Bank 2,000 +2,000 1.0%

Development Bank of Japan Inc. 21,750 - 10.9% Nippon Life Insurance Company 1,300 - 0.7%

MUFG Bank, Ltd. 21,500 - 10.8% The Higashi-Nippon Bank, Limited 1,000 - 0.5%

Mizuho Corporate Bank, Ltd. 20,400 +1,000 10.2% The Hyakugo Bank, Ltd. 1,000 +1,000 0.5%

Shinsei Bank, Limited 14,000 - 7.0%The Yamanashi Chuo Bank,Ltd. 1,000 +1,000 0.5%

Resona Bank, Limited 12,500 - 6.3% Taiyo Life Insurance Company 300 - 0.2%

Mizuho Trust and Banking Co.,Ltd. 9,500 - 4.8%

Fukoku Mutual Life InsuranceCompany 200 - 0.1%

The Bank of Fukuoka, Ltd. 6,500 +1,000 3.3% ORIX Bank Corporation - -1,500 0.0%

Kansai Mirai Bank, Limited 5,000 - 2.5% The Kagawa Bank, Ltd. - -1,000 0.0%

Nishi-Nippon City Bank, Ltd. 3,000 - 1.5% Total (26 banks) 199,350 +5,500 100.0%

The Gunma Bank, Ltd. 2,500 - 1.3%

Aozora Bank, Ltd. 2,000 -1,000 1.0% Issuance Balance Comparison withPrevious PeriodDuration ofLiabilities

The 77 Bank, Ltd. 2,000 - 1.0%No. 3 Unsecured InvestmentCorporation Bond 3,000 - 5 years

The Musashino Bank, Ltd. 2,000 - 1.0%No. 4 Unsecured InvestmentCorporation Bond 2,100 - 10 years

Tokio Marine & Nichido FireInsurance Co., Ltd. 2,000 - 1.0%

TotalInvestment Corporation Bonds 5,100 - -

As of End of the 27th Fiscal Period


Unitholders as of the End of the May 2019 (27th) Fiscal Period

Unitholders’ Share by Investor Type List of Top 10 Investors

(Note) Rounded to the second decimal place (Note) Rounded to the second decimal place

Number ofUnits

End of 26thFiscal Period

Number ofUnits


Change ofUnits

Rate (Note)End of 27th

Fiscal Period

15,507 14,092 -1,415 2.86%

170,277 161,625 -8,652 32.86%

CommercialBank - - - 0.00%

Regional Bank 13,482 10,802 -2,680 2.20%

Trust Bank 145,874 136,995 -8,879 27.85%

Life Insurance 1,690 395 -1,295 0.08%

Non-lifeInsurance 444 5,366 +4,922 1.09%

Other FinancialInstitutions 8,787 8,067 -720 1.64%

191,021 190,743 -278 38.78%

109,735 108,524 -1,211 22.06%

5,337 16,893 +11,556 3.43%

491,877 491,877 - 100.00%Total

Investor Type

Individuals

FinancialInstitutions

Other DomesticCorporation

Foreigner

Securities

No. Investor NameNumber of

UnitsEnd of 26th

Fiscal Period

Number ofUnits


Change ofUnits

Rate (Note)End of 27th

Fiscal Period

1 Daiwa Investment Management Inc. 128,905 128,905 - 26.21%

2 The Master Trust Bank of Japan, Ltd.(Investment Trust Account) 65,790 60,945 -4,845 12.39%

3 Daiwa Securities Group Inc. 59,321 59,321 - 12.06%

4 Japan Trustee Services Bank, Ltd.(Trust Account) 40,651 41,979 +1,328 8.53%

5 Trust & Custody Services Bank, Ltd.(Securities Investment Trust Account) 20,941 16,752 -4,189 3.41%

6The Nomura Trust and Banking Co.,Ltd.(Investment Trust Account)

13,444 12,804 -640 2.60%

7 BNYM AS AGT/CLTS 10 PERCENT 9,017 9,671 +654 1.97%

8 Mitsubishi UFJ Morgan StanleySecurities Co., Ltd. 3,962 6,662 +2,700 1.35%

9 SSBTC CLIENT OMNIBUS ACCOUNT 6,061 6,240 +179 1.27%

10 Rakuten General Insurance Co., Ltd. - 5,310 +5,310 1.08%

348,092 348,589 +497 70.87%Total

Section 5Efforts on ESG


Efforts on ESG | Sustainable Development Goals (SDGs)

The Asset Management Company of the Investment Corporation is making efforts to realize the philosophy of “Sustainable Development Goals (SDGs)” based on “Passion for SDGs 2018~ Daiwa Securities Group’s SDGs Declaration~” announced by Daiwa Securities Group Inc., the sponsor group.

Sustainable Development Goals (SDGs)

SDGs are international goals unanimously adopted at the UN Summit in September 2015. It is composed of “17 goals, 169 targets and 232 indicators” effective until 2030 pledging that no one will be left behind to realize a society with diversity and inclusivity in sustainable development.

The following are the five characteristics

Universality All countries including developed countries shall act

Inclusivity Ensuring that no one will be left behind by reflecting the philosophy of security

Participatory All stakeholders shall play their roles

Integrity Making integrated efforts on society, the economy and environment

Transparency Conducting regular follow-up

Source: Website of Ministry of Foreign Affairs

Passion for SDGs 2018―Daiwa Securities Group’s SDGs Declaration―

Daiwa Securities Group Inc. regards “SDGs (Sustainable Development Goals)” adopted by the UN in 2015 as an important goal leading the world, and is making proactive efforts to realize an affluent society and enriched lives of citizens by achieving both the pursuit of economic value and the resolution of social issues through the Group’s business.

Creating both economic value and social value of corporations at the same time by making efforts to solve social issues with flexible ideas without being bounded by preconceived ideas as a comprehensive securities group providing a wide range of services satisfying the needs from various customers.

l Creation of shared value

Making efforts to realize various personnel training and work style by promoting work-life balance and supporting the success of female and veteran employees as well as creating an environment where all employees regardless of gender and age are satisfied and able to maximally demonstrate their skills.

l Realization of various personnel training and work style

Aiming to contribute to the resolution of a wide range of social issues through the partnership with each stakeholder by utilizing the characteristics of the Group which connects countries, companies, investors, etc.

l Partnership with stakeholders

Intending to provide and spread an understanding on SDGs to all executives and employees as well as contributing to the improvement of the awareness on SDGs of customers through the Group’s business as the leader in the financial and capital market.

l Improvement and spread of awareness

https://www.unicef.or.jp/sdgs/img/mainvisual_exp.pnghttps://www.unicef.or.jp/sdgs/img/mainvisual_exp.png


Efforts on ESG | Environment

The Investment Corporation participates in the GRESB Real Estate Assessment since 2011 and earned the best rating of Green Star for seventh consecutive year from 2012.

GRESB Real Estate Assessment

Environmental Certification

Glass City Harumi acquired a GOLD level in LEED

LEED Certification

Daiwa Jimbocho, Daiwa Kayabacho Building and shinyon curumu have newlyacquired a Building Energy-efficiency Labeling System (BELS) evaluation of★★★, ★★ and ★ respectively as of March 3, 2016

BELS Evaluation

Shinjuku Maynds Tower acquired 4Stars, evaluated for improving itsbuilding habitability by introducingvarious environmental and energyconserving technologies while providinga lot of restaurants, clinic and otherfacilities that facilitate convenience fortenants.

DBJ Green Building Certification

Daiwa Ginza earned "Gold" due to high evaluation for factors including "policy andimplementation of sustainable management," "sustainable utilization of site," and"risk management," despite the age of Daiwa Ginza approaching 50 years.

Certification Based on SMBC Sustainable Building Assessment Loan

E SPACE TOWER earned "Silver" dueto high evaluation for "policy andimplementation of sustainablemanagement," “sustainable utilizationof site," "indoor environment" and"water-saving."

In "MUFG ESG Rating Certificate for J-REIT supported by JCR"by MURC, the Investment Corporation received an “A Rank” forits wide range of activities in all areas of ESG.

Acquisition of rating in “MUFG ESG Rating Certificate for J-REIT supported by JCR”

Glass City Shibuya and ShinjukuMaynds Tower were awarded "Arank" in CASBEE for MarketPromotion certification system.

CASBEE Property Appraisal

The “LEED® Certification Mark” is aregistered trademark owned by theU.S. Green Building Council and isused with permission in this material.


Efforts on ESG | Social / Governance

[Target properties] Entrance floor, the first floor of Shinjuku Maynds Tower

[Period] Around December of each year

[Details]Give out annual Shinjuku Maynds Tower desk calendar. Aim is to improve sense of affinity among office workersof its tenants toward Shinjuku Maynds Tower.

Customer Satisfaction Survey Giving Out Novelty Goods

[Target properties] All properties

[Details]Conducted questionnaire survey concerning cleaning of common-useareas, cleaning of office areas, elevators, toilets/powder rooms, etc.targeting people in charge of general affairs and office workers of itstenants. The aim is to enhance tenant satisfaction by identifying issuesand making improvements.

Efforts for Enhancing Tenant Satisfaction

Shinjuku Minami Lumi

[Target properties] Shinjuku Maynds Tower

[Details]Held “Shinjuku Minami Lumi,” an event to illuminate Shinjuku South Exit area, jointly with Odakyu Electric Railway, Takashimaya, East Japan Railway and Asahi Mutual Life Insurance for sixth consecutive year since 2013. With dreamy illuminations, the event provides a space for office workers in the nearby companies and stores, visitors and local residents to communicate with each other while improving awareness of the Shinjuku South Exit area.

[Period] Annually early November to mid-February of next year

Coexistence with Local Communities

[Target] Asset Management Company

[Details]The Asset Management Company of the Investment Corporation introduced a system to subsidize expenses required to obtain qualifications, targeting a wide range from those related to real estate including real estate appraiser, ARES Certified Master and real estate notary to Securities Analyst and language-related qualifications.

Improving Work Environment Fostering of Human Resources[Target properties] Daiwa Ginza

[Period] Since October 2018

[Details]Substantially expanded open space and secured community space for employees to relax or have meetings. The aim is to enable fruitful communication among employees.

Efforts for Employees

[Period] August 2018 to September 2018

Establishment of Policy Regarding ESG

[Details] The Investment Corporation established the PolicyRegarding ESG on March 31, 2019 as follows,judging that emphasizing ESG (Environment, Socialand Governance) contributes to the enhancementof the Investment Corporation's medium- to long-term corporate value.

1. Initiatives on Environmental Protection (Environment)We will proactively promote initiatives on environmental protection such as resource and energy-saving measures such as the introduction of facilities and equipment contributing to environmental protection at owned properties.

2. Connection to Society (Social)We will proactively disclose information and fulfill accountability to all of stakeholders through IR activities, etc. We will accomplish social missions of a listed investment corporation by providing high-quality and comfortable residential spaces in partnership.

3. Corporate Governance (Governance)We will make highly transparent and reasonable decisions under the laws and regulations and various rules while being aware of the importance of corporate ethics and compliance.


MEMO

Appendix


Three Characteristics of the Investment Corporation (As of July 19, 2019)

Fiscal period ended Nov. 2018

(26th FP)Actual

Fiscal period ended May 2019

(27th FP)Actual

Fiscal period ending Nov. 2019

(28th FP)Forecast

Fiscal period ending May 2020

(29th FP)Forecast

Dividend per Unit 11,997 yen 12,559 yen 13,000 yen 13,200 yen

Office Specialized REIT

REIT focused on the Five Central Wards of

Tokyo

Steady Growth in Distribution

Five Central Wardsof Tokyo81.1％

Greater Tokyo16.9％ Regional Major Cities

2.1％

OfficeBuilding

100％

(Note) Based on acquisition price.


Percentage of Properties by Region and Status in Shinjuku and Shibuya Areas

Percentage of Properties by Region Shinjuku Maynds Tower

Large-scale Office Building Supply in the 23 Wards of Tokyo

E SPACE TOWER

Minato Ward11.4%

Shibuya Ward35.2％

Osaka City2.1％

Five Central Wards of Tokyo

81.1％

Greater Tokyo16.9％

Shibuya Ward/Shinjuku Ward

Ratio42.3％

Chuo Ward22.1%

Shinjuku Ward7.1％

Regional Cities2.1％

*1 Based on acquisition price *2 Percentage is rounded to the first decimal place (As of July 19, 2019)

Chuo Ward430,000 m²

Minato Ward2,040,000 m²

Other700,000 m²

ChiyodaWard1,030,000 m²

Total from 2019 to 20234,890,000 m²

2019―2023

Shibuya Ward460,000 m²

Shinjuku Ward230,000 m²

Source: Mori TrustLarge-scale properties: Offices with total floor areas of 10,000 m² or more

Chiyoda Ward5.3％

Other 23 Ward of Tokyo8.2％

Yokohama City8.7％

Shinjuku Maynds Tower Occupancy Rate

Location 2-chome, Yoyogi, Shibuya-ku

Acquisition price 66,900 million yen

（％）

E SPACE TOWER Occupancy Rate

Location 3 Maruyama-cho, Shibuya-ku

Acquisition price 24,000 million yen

（％）

(Note) Rent revenue is indexed as 11/11 = 100. Ownership interest of Shinjuku Maynds Tower is adjusted from the 25th FP.

12thFPEnd

26thFP

13thFP

27thFP

14thFP

16thFP

15thFP

17thFP

18thFP

20thFP

22ndFP

19thFP

21stFP

29th FP

End

25thFP

23rdFP

24th FP

28th FP

12thFPEnd

26thFP

13thFP

27thFP

14thFP

16thFP

15thFP

17thFP

18thFP

20thFP

22ndFP

19thFP

21stFP

29th FP

End

25thFP

23rdFP

24th FP

28th FP


Comparison with Results of the 26th Fiscal Period

Summary of Results for the Fiscal Period ended May 2019 (27th FP) (1) ― Balance Sheet ―

Million Yen (%) Million Yen (%) Million Yen (%) Million Yen (%)

24,203 5.1 30,716 6.3 25,796 5.4 32,632 6.7

19,008 26,663 1,255 981

4,301 3,479 0 5,000

892 572 3,000 3,000

454,994 94.9 454,908 93.7 18,000 19,500

451,179 94.2 451,185 92.9 583 567Building and Others(including Trust Property ) 85,199 85,865 2,177 2,323Land and Others(including Trust Property ) 365,554 364,489 779 1,261

Other Tangible Fixed Assets 425 831 199,291 41.6 198,543 40.9

2,728 0.6 2,725 0.6 2,100 2,100Leasehold Rights and LeaseholdRights in Trust 2,705 2,705 175,850 174,850

Other Intangible Fixed Assets 23 20 18,145 19,145

1,085 0.2 997 0.2 2,647 1,844Leasehold and Security DepositsPaid in Trust 113 113 549 603

Long-term Prepaid Expenses 884 791 225,088 47.0 231,175 47.6Other Inv estments and OtherAssets 87 92 247,876 247,876

14 0.0 11 0.0 251,551 251,551

14 11 -3,675 -3,675

479,212 100.0 485,636 100.0 6,468 6,887

-220 -303

254,124 53.0 254,460 52.4

479,212 100.0 485,636 100.0Total Liabilities and Net Assets

Total Assets Unappropriated Retained Earnings

Valuation, Translation Adjustments andOthers

Def erred Assets Unitholders' capital

Inv estment Corporation BondIssuance Costs

Deduction f rom unitholders’ capital

Other Fixed Liabilities

Total LiabilitiesN

et A

sset

sUnitholders’ equity (net amount)

Total Net Assets

Tenant Leasehold and SecurityDeposits

Inv estments and Other Assets Tenant Leasehold and SecurityDeposits in Trust

Intangible Fixed Assets Inv estment Corporation Bonds

Long-term Loans Pay able

Adv ances Receiv ed

Other Current Liabilities

Fixed Liabilities

Fixed Assets Current Portion of Long-term LoansPay able

Tangible Fixed Assets Accounts Pay ables-Other

Cash and Deposits in Trust Short-term loans pay able

Other Current Assets Current portion of inv estmentcorporation bonds

Asse

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