Financial Results Briefing for the Fiscal Period Ended August 31, 2016 (5th Fiscal Period)

Transcription

1 Financial Results Briefing for the Fiscal Period Ended August 31, 216 (5th Fiscal Period) October 17, 216 Securities code:3295

2 Contents 1 I. Update Summary V. Appendix 1. Update Summary 3 1. Statements of Income Balance Sheets 29 II. Asset Management Results 3. Newly Acquired Properties 3 1. Portfolio Summary 5 4. List of Portfolio Properties at the End of the 5th Fiscal Summary of 3rd Public Offering 6 Period 3. Results of External Growth 7 5. Status of Appraisal Values by Property Results of Internal Growth 9 6. List of Appraisal Values by Property (Period-on-Period Financial Condition 11 Comparison) 7. Operating Revenues and Expenses by Property 46 III. Summary of Financial Results and Earnings Forecast 8. Main Tenants Steady Growth of Distribution and NAV per Unit Breakdown of Unitholders Statements of Income Hulic Reit s Basic Missions and Portfolio Composition 5 3. Balance Sheets 17 Policy 4. Overview of Appraisal Values Focused Investment in Tokyo Commercial Properties Investments in Next Generation Assets 52 IV. Future Strategy 13. Collaboration with the Hulic Group Strategy Framework Key Achievements and Plans of the Hulic Group External Growth Strategy Operating Structure that Ensures Unitholder Returns Internal Growth Strategy Structure of Hulic Reit Sustainability Initiatives Unit Price and Total Market Value 59

3 I. Update Summary 2

4 1. Update Summary １ 3 ４ External Growth Due to public offerings in 2 consecutive fiscal periods, assets grew to 23.1 billion No. of properties Assets End of 4th Fiscal Period (Feb. 29, 216) 32 \169. billion End of 5th Fiscal Period (Aug. 31, 216) 34 \2.8 billion Compared with End of 4th Fiscal Period 4th Fiscal Period (Feb. 216) 5th Fiscal Period (Aug. 216) 6th Fiscal Period (Feb. 217) 7th Fiscal Period (Aug. 217) 36 \23.1 billion +4 +\61.2 billion F'ca s t 2,84 Actua l 2,969 F'ca s t 3,2 Actua l 3,143 F'ca s t 3,22 F'ca s t 3,15 Tokyo Commerci a l Properti es Next Genera ti on As s ets Investment ratio 8% - 9% Target properties Offi ce properti es Reta i l properti es 1% - 2% Pri va te nurs i ng homes Network centers Hotel s Internal Growth Occupancy rate 1% (end of Sep. 216) End of 4th Fiscal Period (Feb. 29, 216) End of 5th Fiscal Period (Aug. 31, 216) Most Recent (Sep.31, 216) 99.4% 99.9% 1.% Occupancy rate Office rents revised upward (5th fiscal period, Aug. 31, 216) Re newa l wi th Increa s e Property ba s i s *1 ３ Renewa l wi th Decrea s e Approx. 4% Le a s ed a re a ba s i s Ra te of i ncrea s e *1 None Approx. 36% Approx. 4% Financial Strategy Financial indicators (end of 5th fiscal period, Aug. 31, 216) Total interest-bearing debt 81,47 million Long-term debt ratio Average interest rate 94.3%.71% Average period remaining to maturity 4.3 years LTV 38.2% After 3rd Public Offering LTV Increase in distribution per unit (DPU) After 3rd Public Offering Change in operational guidelines Higher investment ratio, greater focus on Tokyo Commercial Properties ２ Enhancing Unitholder Value Acquisition capacity before LTV reaches 45% 39.7% approx. 23 billion Japan Credit Rating Agency (JCR) raised Hulic Reit s rating as long-term issuer to AA- (April 216) Steady growth in NAV per unit 4th Fiscal Period (Feb. 216) 5th Fiscal Period (Aug. 216) After 3rd Public Offering*3 137,968 15, ,797 Through external and internal growth and our financial strategy, we aim to achieve growth in DPU and NAV per unit External Growth We will continue selectively investing in sponsordeveloped and sponsor-owned properties Achievement of 3 billion in assets is within sight Internal Growth Negotiations are underway to correct below-market rents We aim to maintain a high occupancy rate Financial Strategy We will continue our stable and sound financial management Appropriate LTV ratio control with one eye on asset expansion (ratio of approx. 4%-45% for the time being) *1 Property basis and Leased area basis refer to the share of office s rental leases renewed in the 5th fiscal period. The LTV (loan-to-value) ratio expresses the ratio of interest-bearing debt to total assets. LTV after 3rd public offering is based on the assumption that all units allocated to third parties have been paid in. Therefore, LTV could change according to the number of units allocated to third parties. *3 Based on the assumption that all units allocated to third parties have been paid in. LTV could change according to the number of units allocated to third parties.

5 II. Asset Management Results 4

6 1. Portfolio Summary １ 5 Total Assets and LTV since Stock Market Listing Due to fund procurement through the 2nd and 3rd public offerings, assets have grown steadily with appropriate LTV control Total assets 36 properties 23.1 billion 4.6%*1 Avg. NOI yield Avg. NOI yield after depreciation Tokyo Commercial Properties 4.1%*1 Next Generation Assets billion obtained Assets (Unit: billions of yen) 3 properties acquired with proceeds of 2nd public offering (Mar. 216) properties acquired with borrowings (Mar.-Apr. 215) 7 properties acquired with proceeds of 1st public offering (Oct. 214) 31 properties 12.7 LTV*4 (%) properties*3 acquired with proceeds of 3rd public offering (Sep. 216) 34 properties Acquisition capacity before LTV reaches 45%: Approx. 23 billion 3 End of 1st Fiscal Period End of 2nd Fiscal Period (Aug. 31, 214) *1 *4 36 properties properties 1 property acquired with borrowings (Dec. 215) 32 properties 28 properties properties billion (82.3%) 14 properties 4.8 billion (17.7%) (Feb. 28, 215) End of 3rd Fiscal Period (Aug. 31, 215) End of 4th Fiscal Period End of 5th Fiscal Period (Feb. 29, 216) (Aug. 31, 216) After 3rd Public Offering (Earnings announcement day) NOI yield = NOI/acquisition price (NOI based on the appraisal value at the end of each fiscal period (at time of acquisition for properties acquired by 3rd public offering), rounded to the 1st decimal place) Includes 1 additionally acquired property. *3 Includes 3 additionally acquired properties. The LTV (loan-to-value) ratio expresses the ratio of interest-bearing debt to total assets. LTV after 3rd public offering is based on the assumption that all units allocated to third parties have been paid in. Therefore, LTV could change according to the number of units allocated to third parties.

7 2. Summary of 3rd Public Offering Offering format Public offering (domestic) Units outstanding before this offering 957, Units offered Total 88, Public offering 83,8 3rd party allotment 4,2 Issuance resolution date September 14, 216 Pricing date September 26, 216 Subscription period September 27-28, 216 Payment date October 3, 216 Issue price (offer price) 17,625 per unit Payment amount (issue value) 164,937 per unit Total subscription (issuance) 14,514,456, ３ Overall ２ Portfolio Changes Since End of 5th Fiscal Period End of 5th Fiscal Period (Aug. 31, 216) Newly acquired assets*1 34 properties 5 properties 36 properties Tokyo Commercial Properties 22 properties 3 properties 22 properties Next Generation Assets 12 properties 2 properties 14 properties Average NOI yield Average NOI yield after depreciation billion 29.3 billion 23.1 billion Tokyo Commercial Properties Next Generation Assets Overall NAV per unit*3 15, ,797 Portfolio Changes After 3rd Public Offering Tokyo Commercial Properties*4 *4 By By usage usage By area Six central Tokyo wards Office Office properties Retail Properties Retail properties Properties Private nursing Private Homes Private Nursing Nursing homes Homes Private Nursing Homes Network centers Hotels Other Tokyo 23 wards Others By walking distance from nearest station Directly connected to station Within 1 min. By area Six central Tokyo wards Other Tokyo 23 wards Others 1 3 min. 3 5 min. Over 5 min. Within 1 min. Tokyo Commercial Properties *1 *3 *4 After 3rd public offering Overall No. of properties Outline of 3rd Public Offering Total assets １ 6 Includes 3 additionally acquired properties. NOI yield = NOI/acquisition price (NOI based on appraisal value at the end of each fiscal period (at time of acquisition for newly acquired assets), rounded to the 1st decimal place). NAV per unit after 3rd public offering is based on the assumption that all units allocated to third parties have been paid in. Therefore, the figure may change according to the number of units allocated to third parties. Shares shown in each graph are based on acquisition price of each property.

8 3. Results of External Growth List of Newly Acquired Properties (Tokyo Commercial Properties) １ 7 In the 6th fiscal period, 3 properties totaling 21.9 billion have been newly (additionally) acquired (5 properties totaling 29.3 billion, including Next Generation Assets) Acquisition date Sep. 1, 216 Acquired from Sep. 16, 216 Sponsor (Hulic) Use Property name Oct. 4, 216 Surugadai Funding, LLC Office properties Hulic Toranomon Bldg. (Additional acquisition) Rapiros Roppongi (Additional acquisition) Ochanomizu Sola City (Additional acquisition) Toranomon, Minato Ward, Tokyo Roppongi, Minato Ward, Tokyo Kandasurugadai, Chiyoda Ward, Tokyo Nearest station 1-minute walk from Toranomon Station, Tokyo Metro Ginza Line Directly connected to Roppongi Station, Tokyo Metro Hibiya Line, etc. Directly connected to Shin-Ochanomizu Station, Tokyo Metro Chiyoda Line Acquisition price 5,57 million 1,5 million 15,295 million 3.9% 4.5% 3.9% Completion of construction May 215 Aug Feb. 213 Construction S, B1/11F SRC/RC, B2/1F S, B2/23F 2, m2 (Equivalent to 3% of the ownership interest) m2 (Unit ownership interest) 5,582.2 m2 (Equivalent to 8.7% of the ownership interest) 1.% 1.% 1.% Photograph of property Location Appraisal NOI yield*1 Total leasable area Occupancy rate*3 *1 NOI yield = NOI/acquisition price (NOI based on appraisal value (time of acquisition) rounded to the 1st decimal place). Indicated figures are based on lease agreements or plans of buildings related to assets owned at the time of acquisition. (For co-owned properties, figures correspond to the owned portion.). *3 The values are at the time of acquisition.

9 3. Results of External Growth List of Newly Acquired Properties (Next Generation Assets) ２ In 6th fiscal period, 2 properties totaling 7.4 billion have been newly acquired (5 properties totaling 29.3 billion, including Next Generation Assets) Acquisition date Sep. 1, 216 Acquired from Use Sep. 16, 216 Sponsor (Hulic) Private nursing homes Hotels Trust Garden Tokiwamatsu Sotetsu Fresa Inn Ginza 7 Chome (Land) Higashi, Shibuya Ward, Tokyo Ginza, Chuo Ward, Tokyo Nearest station 13-minute walk from Omotesando Station, Tokyo Metro Ginza Line, etc. 5-minute walk from Ginza Station, Tokyo Metro Ginza Line, etc. Acquisition price 3,3 million 4,37 million 4.7% 3.9% Completion of construction Jan. 216 Construction RC, B1/6F 2, m m2 1.% 1.% Property name Photograph of property Location Appraisal NOI yield*1 Total leasable area Occupancy rate*3 *1 NOI yield = NOI/acquisition price (NOI based on appraisal value (time of acquisition) rounded to the 1st decimal place). Indicated figures are based on lease agreements or plans of buildings related to assets owned at the time of acquisition. (For co-owned properties, figures correspond to the owned portion.) *3 The values are at the time of acquisition. 8

10 4. Results of Internal Growth 9 １ Occupancy Rates and New Tenant Entry and Departure Totals at Fiscal Period End A high portfolio occupancy rate of 99.9% was maintained at the end of 5th fiscal period By leasing vacant and soon-to-be-vacant spaces, we achieved a 1% occupancy rate at the end of Sep Total (actual/forecast) (result/forecast) Tokyo Commercial Properties result/forecast Next Generation Assets (result/forecast.95 End of 1st Fiscal Period (Actual) 99.1% End of 2nd Fiscal Period (Actual) 99.% End of 3rd Fiscal Period (Actual) 98.2% End of 4th Fiscal Period (Actual) 99.4% End of 5th Fiscal Period (Actual) 99.9% End of 7th Fiscal Period (Forecast) 99.2% End of 6th Fiscal Period (Forecast) 99.2% Rapiros Roppongi.9 (Leased area in m2) New Tenant Entry area (actual/forecast)*1 4, Departure area (actual/forecast)*1 2, Actual Actual Actual Actual 1st Fiscal Period (Aug. 214) 2nd Fiscal Period (Feb. 215) 3rd Fiscal Period (Aug. 215) 4th Fiscal Period (Feb. 216) Forecast Actual Previous New Forecast Forecast A space departure at the end of a lease (approx. 59 ) in Sep. 216 was leased to a new tenant with no down time Hulic A vacant 2nd floor space Toranomon Bldg. used for retail purposes (approx. 7 ) was switched to office use and leased to a new tenant (2,) (4,) 5th Fiscal Period (Aug. 216) 6th Fiscal Period (Feb. 217) 7th Fiscal Period (Aug. 217) ２ Office Rents Renewals Within floor area with rents renewable in 5th fiscal period, (approx. 12,2 ), 36% was renewed with an average 4% rent increase (Leased area in m2) 6, Amount of increase (leased area) Amount of decrease (leased area) Percentage increase Percentage decrease 25% 4, 2, 8% 6% 5% 7% 4% % No decrease (2,) (4,) (Percentage change) No decrease No decrease -9% -2% 1st Fiscal Period (Aug. 214) Number/rate of Among the 2 office rents rent increases renewable in the 5th fiscal period (approx. 12,2m2), 8 (approx. 4,4m2) were renewed with an average approx. 4% rent increase. Number/rate of Rent did not decline in any rent reductions cases. -25% 2nd Fiscal Period (Feb. 215) 3rd Fiscal Period (Aug. 215) 4th Fiscal Period (Feb. 216) 5th Fiscal Period (Aug. 216) *1 New tenant entry and departure areas take into account assets (Tokyo Commercial Properties) newly acquired at the beginning of 6th fiscal period. Figures for the leased areas of co-owned properties reflect Hulic Reit s percentage ownership.

11 4. Results of Internal Growth 1 ３ Examples of Rent Increases (Hulic Kamiyacho Building) (Rapiros Roppongi) Location Toranomon, Minato Ward, Tokyo Nearest station 1-minute walk from Kamiyacho Sta., Tokyo Metro Hibiya Line Roppongi, Minato Ward, Tokyo Location Directly connected to Roppongi Sta., Nearest station Tokyo Metro Hibiya Line, etc. Floors B2/11F Floors B2/1F Leasable area 22,74.96 m2 Leasable area 6, m2 Highly valued by tenants for being only a 1-min. walk from Kamiyacho Sta. and one of the largest buildings in its area. In the 5th fiscal period (Aug. 216), 2 leases were renewed for an average rent hike of approximately 4%. From the 1st fiscal period (Aug. 214) to the 5th (Aug. 216), 8 rents were renewed for an average approximately 5% rent hike. (For the same period, only 2 leases in the 1st fiscal period were renewed for lower rents.) Direct connection to Roppongi Sta. is highly valued, and in the 5th fiscal period (Aug. 216) 2 rents were renewed for an average rent hike of approximately 1%. From the 1st fiscal period (Aug. 214) to the 5th (Aug. 216), 5 rents were renewed for an average 8% rent increase. ４ Example of Hulic Toranomon Building Location Toranomon, Minato Ward, Tokyo Nearest station 1-minute walk from Toranomon Sta., Tokyo Metro Ginza Line Floors B1/11F Leasable area 8, m2 (Renovation) A vacant retail space on the 2nd floor was converted to office use and 1% occupancy was achieved (Before renovation) (Cost-cutting initiatives) Building management expenses were reviewed, leading to an annual saving of approx. 5 million Note: Leasable area is the portion owned by Hulic REIT at the time of our earnings announcement in the 5th fiscal period (Aug. 216). (After renovation)

12 5. Financial Condition 11 １ Key Financial Indicators In long-term borrowings, no refinancing or new fund procurement was carried out, so the average interest rate was unchanged Short-term borrowings totaling 15,49 million were procured when a property was acquired with the proceeds of the 3rd public offering End of 1st Fiscal Period (Aug. 31, 214) End of 2nd Fiscal Period (Feb. 28, 215) End of 3rd Fiscal Period (Aug. 31, 215) End of 4th Fiscal Period (Feb. 29, 216) End of 5th Fiscal Period (Aug. 31, 216) 33, million 6,7 million 68,47 million 8,77 million 81,47 million 88.% 93.5% 94.2% 95.1% 94.3% Average interest rate*¹.85%.77%.77%.71%.71% Average interest rate*¹.98%.91%.91%.85%.84% 4.4 years 5.1 years 4.9 years 4.8 years 4.3 years Total interest-bearing debt Long-term debt ratio*¹ (Includes interest rates fixed by swap transaction) (including upfront fee) Average period remaining to maturity*¹ ２ LTV *1 ３ Diversification of Repayment Dates Since 3rd public offering, LTV has been maintained in approx. 4%-45% range Capacity for acquisition before LTV reaches 45%: approx. 23 billion (Unit: millions of yen) 12, Commitment line 1, million 1, 5% 45.2% Existing short-term borrowings Existing long-term borrowings Existing investment corporation bonds 8, 45% 6, *1 Figures for the long-term debt ratio and average period remaining to maturity are rounded to the 1st decimal place. Figures for average interest rates are rounded to the 2nd decimal place. Loan-to-value ratio (i.e., ratio of total interest-bearing debt to total assets). Regarding LTV after the 3rd public offering (expected), the total asset amount is the amount expected at the end of the 5th fiscal period, taking into account the acquisition price of a new property. The interest-bearing debt amount is reduced by the amount of an expected early loan repayment ( 7million)*3 to be made with the proceeds of a 3rd party allotment. *3 Based on the assumption that all units in the third party allotment are paid in. Early loan repayment and LTV may change according to the number of units issued in the third party allotment FPE endding Aug. FPE endding Feb. FPE endding Aug. FPE endding Feb. FPE endding Aug. FPE endding Feb. FPE endding Aug. FPE endding Feb. FPE endding Aug. FPE endding Feb. FPE endding Feb. FPE endding Aug. FPE endding Feb. After 3rd Public Offering (Forecast) FPE endding Aug. End of 5rd Fiscal Period (Aug. 31, 216) FPE endding Feb. End of 4th Fiscal Period (Feb. 29, 216) FPE endding Aug. End of 3rd Fiscal Period (Aug. 31, 215) FPE endding Feb. End of 2nd Fiscal Period (Feb. 28, 215) FPE endding Aug. End of 1st Fiscal Period (Aug. 31, 214) 2, FPE endding Feb. 3.3% 4, FPE endding Aug. Acquisition capacity before LTV reaches 45%: approx. 23 billion 35% 3% 39.7% FPE endding Aug. 38.2% 38.5% 4% FPE endding Feb. 41.2% 227

13 12 III. Summary of Financial Results and Earnings Forecasts

14 1. Steady Growth of Distribution and NAV per Unit １ 13 Distribution and NAV Per Unit While maintaining a high occupancy rate, we aim for steady growth of distribution and NAV per unit through selective investments for external growth and stable, sound financial management 3,22 3,15 DPU 3,143 (Unit: yen) 3, DPU 2,926 Forecast Actual 2,8 New forecast Fixed asset tax & city planning tax 2,969 2,95 2,83 3,2 3,15*3 3,1 3,14*3 15,256 15, 153,797 14, 137,968 2,5 2,383 2,35 129,958 13, 123,939 12, 11, 115,17 18,888*1 2, Actual occupancy rate Included at time of listing 21 properties 11.4 billion 99. 1st public offering 7 properties valued at 46.7 billion acquired properties valued at 8.1 billion acquired 99.4 t o p i c s 1, nd public offering, etc. 4 properties valued at 44.6 billion acquired JCR rating A+ (positive) Received Apr rd public offering 5 properties valued at 29.3 billion acquired Through selective investment, we aim to reach 3 billion in assets JCR rating AA- (stable) Raised Apr. 216 Included in FTSE Global Index (Mar. 216) M a i n Operational guidelines changed (Jul. 216) Departure of large tenants (HLC Kamiyacho, HLC Kanda) Vacancies left by tenants filled (HLC Kamiyacho, HLC Kanda) Included at time of listing & those acquired in 2nd fiscal period incur fixed asset tax & city planning tax At the time of listing 1st fiscal period (Aug. 214) 17, 16, 2,84 NAV per unit 18, NAV per unit (Unit: yen) 2nd fiscal period (Feb. 215) 3rd fiscal period (Aug. 215) Properties acquired in 3rd & 4th fiscal periods incur fixed asset tax & city planning tax 4th fiscal period (Feb. 216) 5th fiscal period (Aug. 216) Properties acquired in 5th & 6th fiscal periods incur fixed asset tax & city planning tax 6th fiscal period (Feb. 217) *1 NAV per unit at time of listing = (total issued value at time of listing (incl. at time of establishment, 3rd party allotment) + appraisal value at time of listing acquisition price at time of listing) No. of investment units issued Based on the assumption that all units in the 3rd party allotment are paid in. The figure may change according to the number of units issued in the 3rd party allotment. *3 The expected distribution per unit reflecting unexpensed fixed asset tax & city planning tax. 7th fiscal period (Aug. 217)

15 2. Statements of Income 14 １ Summary of Financial Results for the 5th Fiscal Period (Actual) With contribution from properties acquired with 2nd public offering, 5th fiscal period total real estate lease business revenues rose 1,5 million (+2.9%) from 4th fiscal period Due to higher occupancy rate and reduced repair expenses, 5th fiscal period profit came in 117 million (+4.%) above forecast (5th fiscal period results compared to 4th period results and 5th period forecast) (Unit: millions of yen) 4th Fiscal Period Results 4,819 Real estate lease business revenues Expenses related to real estate lease business (1,615) Main fluctuation factors 5th Fiscal Period 5,83 5, ,5 (1,885) (1,82) ,918 4, Operating income 2,667 3,283 3, Ordinary income 2,319 2,891 3, ,318 Profit 2,969 Cash distribution per unit (yen) 2,89 Difference from 4th Fis cal Period to 5th Fis cal Period Compared with Compared with 4th Fiscal Period Forecast * Forecast Results 3,23 Income from real estate lease business (Comparison of 4th and 5th fiscal period results) 3, ,2 3,143 +\123 +\174 (Unit: millions of yen) Main Factors +819 Income from real es tate leas e bus ines s Current owned portion +98 2nd public offering acquisition +721 Operating income Ordinary income New tenant entries +16 free rent disposal, etc Tenant depatures (29) Fixed asset & city planning taxes (22) Real estate lease business revenues Asset management fee (99) Others (5) +689 Interest paid, etc. (15) Amortization of investment unit issuance expenses (1) Note: Expense items indicated in parentheses as negative denote increases in expenses from 4th fiscal period; figures indicated as + denote decreases from 4th fiscal period. *Earnings forecast announced in April 14, 216 Main fluctuation factors (Differences between 5th fiscal period forecast and results) Cash distribution per unit (6) +19 3,143 3,1 3,2 Di fferences from Foreca s ts for 5th Fi s ca l Period (Unit: yen) 3,2 3, 2,9 5th fiscal period forecast Increase in real estate lease business revenues on current owned portion Decrease in real estate lease business revenues on current owned portion Lease income from 2nd public offering acquisition Other decreases in general and administrative expenses Increase in borrowing & new unit issuance expenses Opera ting i ncome Ordi nary i ncome 5th fiscal period result Main Factors +15 Income from rea l es tate lea s e bus i nes s +21 (Unit: millions of yen) Current owned portion +91 2nd public offering acquisition +14 Unexpected revenue from Total operating revenues +18 Repair expenses +38 Heat, water, electricity +17 Repair expenses Asset management fee (26) Others Interest paid, etc. +17 Note: Expense items indicated in parentheses as negative denote increases in expenses from the 5th fiscal period; figures indicated as + denote decreases from the 5th fiscal period. * Aside from main factors written in fluctuation factors and cash distribution per unit, figures below 1 million are truncated. * Current owned portion numbered 31 at the end of the 3rd fiscal period. Those acquired with the 2nd public offering are Hulic Toranomon Bldg., Hulic Kamiyacho Bldg. (additional acquisition), Leaf minatomirai (land), and Orchid Square. Those acquired with the 3rd public offering are Ochanomizu Sola City (additional acquisition), Hulic Toranomon Bldg. (additional acquisition), Rapiros Roppongi (additional acquisition), Trust Garden Tokiwamatsu, and Sotetsu Fresa Inn Ginza 7 Chome (Land).

16 2. Statements of Income 15 ２ 6th Fiscal Period Earnings Forecast (Comparison to 5th Period Results and 6th Period Previous Forecast) Due to contribution of properties acquired with 2nd public offering (full fiscal period) & 3rd public offering, 6th fiscal period real estate lease business revenues are forecast to rise by 821 million (+14.1%), and profit by 357 million (+11.9%) from 5th fiscal period result Contributions from properties acquired with 3rd public offering and increased revenue from current owned are expected position to raise 6th fiscal period real estate lease business revenues by 686 million (+11.5%), and profit by 397 million (+13.4%) compared to previous 6th fiscal period forecast (Comparison of 6th fiscal period new and previous forecasts) (6th fiscal period forecast compared to 5th fiscal period results and 6th fiscal Main fluctuation factors (Unit: millions of yen) period previous forecast) 5th Fiscal Period Results Real estate lease business revenues Expenses related to real estate lease business Income from real estate lease business 6th Fiscal Period Forecast Previous Forecast New Forecast Compared with 5th Fiscal Period Results 5,825 5,959 6, (1,82) (1,91) ( 2,91) (289) 4,23 Di fference from 6th Fi scal Peri od Previ ous to New Forecast 4,58 4, Operating income 3,382 3,371 3, Ordinary income 3,8 2,968 3, Profit 3,7 2,967 3, ,143 3,1 3,22 +\77 +\12 Cash distribution per unit (yen) 3,3 3, (78) Income from real es tate l ease busi ness 2,9 5th fiscal period result Other revenue decreases on current owned portion Full fiscal period contribution from 2nd public offering acquisition 3rd publ ic offering acquisi ti on +463 New tenant entry, etc. +5 Leasing-related cos ts (13) Real estate l ease bus ines s revenues Ass et management fee (57), Others (1) +397 Interest pai d, etc. (24), Amortizati on of i nvestment unit is suance expenses (8) Note: Expense items indicated in parentheses as negative denote increases in expenses from 6th fiscal period; figures indicated as + denote decreases from 6th fiscal period. Difference from 5th Fiscal Period Results to 6th Fiscal Period New Forecast (166) Increase in borrowing, unit delivery, depreciati on, etc. expenses (Unit: millions of yen) Ma in Factors ,22 Contribution from 3rd public offering acquisition -6 Ordi nary i ncome (Unit: yen) (33) Increase in expenses on 2nd public offering acquisition New tenant entries Other unexpected ｒeal estate lease busi ness revenues +16 Repair expens es (6) 2nd publi c offering acqui sition Operati ng income Income from rea l es ta te lea s e bus ines s 3,1 Real estate lease business revenues increase from current owned portion Current owned portion Main fluctuation factors (Differences between 5th fiscal period results and 6th fiscal period forecast) Cash distribution per unit +497 Compared with Previous Forecast +686 (Uni t: mi ll ions of yen) Main Factors Current owned portion 2nd public offering acquis ition 3rd public offering acquis ition Opera ting income 6th fiscal period new forecast Ordinary income -2 Free rent us e +64 Tena nt depa rtures (25) Repair expens es (35) Leas ing-rela ted cos ts (13) Full fis cal period contribution to ｒea l es ta te leas e +89 bus ines s revenues +12 Leas ing-related cos ts (17), Repair expens es (4) +463 Rea l es ta te lea s e bus ines s revenues As s et mana gement fee (79), Others (33) +357 Interes t pa id, etc. (53) Amortiza tion of unit delivery expens es (9) Note: Expense items indicated in parentheses as negative denote increases in expenses from 5th fiscal period; figures indicated as + denote decreases from 5th fiscal period. * Aside from main factors written in fluctuation factors and cash distribution per unit, figures below 1 million are truncated. * Current owned portion numbered 31 at the end of the 3rd fiscal period. Those acquired with the 2nd public offering are Hulic Toranomon Bldg., Hulic Kamiyacho Bldg. (additional acquisition), Leaf minatomirai (land), and Orchid Square. Those acquired with the 3rd public offering are Ochanomizu Sola City (additional acquisition), Hulic Toranomon Bldg. (additional acquisition), Rapiros Roppongi (additional acquisition), Trust Garden Tokiwamatsu, and Sotetsu Fresa Inn Ginza 7 Chome (Land).

17 2. Statements of Income 16 ３ 7th Fiscal Period Earnings Forecast (Comparison to 6th Fiscal Period Forecast) Due to full fiscal period contribution of properties acquired with 3rd public offering, 7th fiscal period real estate lease business revenues are forecast to rise Since properties acquired with 2nd and 3rd public offerings will incur fixed asset & city planning taxes, 7th fiscal period profit is forecast to decline (Comparison of 6th and 7th fiscal period forecasts) (7th fiscal period forecast compared to 6th fiscal period forecast) (Unit: millions of yen) 6th Fiscal Period Forecast 7th Fiscal Period Forecast Compared with 6th Fiscal Period Forecast 6, (2,91) (2,158) -67 Income from real estate lease business 4,555 4,56-49 Operating income 3,81 3, Ordinary income 3,366 3, Profit 3,365 3, ,22 3,15-7 Expenses related to real estate lease business Cash distribution per unit (yen) Ma i n Fa ctors -49 6,646 Real estate lease business revenues (Uni t: mi ll i ons of yen) Difference from 6th to 7th fi s ca l period foreca s t Income from rea l es tate lea s e bus i nes s Current owned porti on -4 2nd publ i c offeri ng acqui s i ti on -62 3rd publi c offering acqui s i ti on +17 Opera ting i ncome -65 Ordi nary i ncome Depa rture of exis ti ng tenant (36) Repa i r expens es +37, Lea s ing-rel a ted cos ts +1 Depa rture of exis ti ng tenant (25) Fixed asset & city planning tax (4), Leasing-related costs +15 Full fiscal period contribution to real estate lease business revenues +8 Fixed asset & city planning tax (47), Leasing-related costs +6 As s et ma nagement fee (19) Others Interes t pa id, etc. (7) Note: Expense items indicated in parentheses as negative denote increases in expenses from 6th fiscal period; figures indicated as + denote decreases from 6th fiscal period. (Differences between 6th and 7th fiscal period forecasts) Cash distribution per unit 3,3 3,22 (29) +26 (29) (3) (Unit: yen) +76 (6) (24) Effect of expensing fixed asset & city planning taxes on properties acquired with 2nd and 3rd public offerings* 3,15 3,1 2,9 6th fiscal period forecast Decrease in real estate lease business revenues from current owned portion Decrease in expenses on current owned portion Decrease in real estate lease business revenues from 2nd public offering acquisition Increase in fixed asset & city planning taxes on 2nd public offering acquisition Full-period real estate lease business revenues from 3rd public offering acquisition Increase in fixed asset & city planning taxes on 3rd public offering acquisition Approx. - 83/unit Increase in borrowing -related & other expenses 7th fiscal period forecast *Amount of fixed asset & city planning taxes that are forecast to be recorded as an expense in the 7th fiscal period (August 217) divided by number of investment units (1,45,) * Aside from main factors written in fluctuation factors and cash distribution per unit, figures below 1 million are truncated. * Current owned portion numbered 31 at the end of the 3rd fiscal period. Those acquired with the 2nd public offering are Hulic Toranomon Bldg., Hulic Kamiyacho Bldg. (additional acquisition), Leaf minatomirai (land), and Orchid Square. Those acquired with the 3rd public offering are Ochanomizu Sola City (additional acquisition), Hulic Toranomon Bldg. (additional acquisition), Rapiros Roppongi (additional acquisition), Trust Garden Tokiwamatsu, and Sotetsu Fresa Inn Ginza 7 Chome (Land).

18 3. Balance Sheets 17 １ Comparison of 4th and 5th Fiscal Periods 3 properties (including additional acquisition) were acquired with proceeds from a public offering at the beginning of the 5th fiscal period. Total assets reached 213. billion, up 34.3 billion from the end of 4th fiscal period In light of favorable fund procurement conditions, new investment units were issued, bringing unitholders capital to billion, up 3.9 billion from the end of the 4th fiscal period At the end of the 5th fiscal period, interest-bearing debt totaled 81.4 billion, up.7 billion from the end of the 4th fiscal period (Unit: millions of yen) End of 4th Fis cal Period Assets Current assets Cash and deposits Other Noncurrent assets Property, plant and equipment Other Deferred assets Total assets Liabilities Current liabilities Short-term loans payable Current portion of long-term loans payable Other Noncurrent liabilities Investment corporation bonds Long-term loans payable Tenant leasehold and security deposits in trust Total liabilities Net assets Unitholders' equity Unitholders' capital Surplus Total net assets Total liabilities and net assets * Figures less than 1 million are truncated. End of 5th Fis ca l Period Compared with End of 4th Fiscal Period 8,267 8, , ,477 9, ,813 1,877 1, , ,145 8, ,84 2,61 2,652 (42) 31,61 31,668 (57) 5 34,271 13,931 3,96 8,49 1,481 75,946 2, 66,32 7,626 89,877 15,391 4,66 8,49 2,241 77,148 2, 66,32 8,828 92,539 1, ,22 1,22 2,662 88,936 86,617 2,318 88, ,813 12, ,537 3,8 12, ,84 31,69 3, ,69 34,271 Assets increased through acquisition of Hulic Kamiyacho Building (additional acquisition), Leaf minatomirai (land), and Orchid Square In light of favorable fund procurement conditions, new investment units were issued

19 4. Overview of Appraisal Values １ 18 Comparison of Appraisal and Book Values at End of Fiscal Periods At the end of 5th fiscal period, unrealized gains were 26,26 million (up 5,12 million from the previous period). Steady growth has continued since listing At the end of 5th fiscal period, the unrealized gains/losses ratio was +13.% Office properties Retail properties Private nursing homes Network centers Total No. of properties Book value Appraisal value Return yield No. of properties Book value Appraisal value Return yield No. of properties Book value Appraisal value Return yield No. of properties Book value Appraisal value Return yield No. of properties Book value Appraisal value End of 1st Fiscal Period (August 31, 214) Unrealized gains/losses 8 58,71 61,2 4.2% 4 21,692 23,94 4.7% 4 14,451 15,68 5.4% 5 8,42 9,13 5.1% 21 12,635 19,743 +2,948 +2,247 +1, ,17 (Uni ts : mi l l i ons of yen) End of 2nd Fiscal Period (February 28, 215) Unrealized gains/losses 1 83,487 88,13 4.% 6 32,92 35,18 4.5% 4 14,386 16,28 5.2% 8 19,545 2,12 5.2% , ,692 +4,642 +3,87 +1, ,179 End of 3rd Fiscal Period (August 31, 215) Unrealized gains/losses 13 91,665 98,75 4.% 6 32,57 36, 4.4% 4 14,386 17,58 4.8% 8 19,463 2, % , ,454 +7,84 +3,942 +3, ,88 End of 4th Fiscal Period (February 29, 216) Unrealized gains/losses 14 14,28 115,67 3.8% 6 32,22 36,95 4.3% 4 14,338 17,95 4.7% 8 19,379 2, % , ,85 +11,461 +4,927 +3,611 +1, ,136 End of 5th Fiscal Period (August 31, 216) Unrealized gains/losses 14 12, ,13 3.8% 8 47,26 54,26 4.1% 4 14,299 17,95 4.7% 8 19,315 2, % 34 21, , ,388 +6,999 +3,65 +1, ,258 Unrealized gains/losses ratio (%) Unrealized gains/losses Unit: millions of yen 12.4% 25, Network centers Private nursing homes Retail properties Total 21, % 2, 15, 6.9% Total 7,17 1, Office properties 5, Unrealized gains/losses ratio(%) 682 1,228 2,247 2,948 End of 1st F iscal Period (August 31, 214) Total 14,88 6.8% Total 1, ,893 3,87 4,642 End of 2nd Fiscal Period (F ebruary 28, 215) 66 3,193 1,135 3,611 Total 26, % 1,219 3,65 6,999 4, % 9.% 6.% 3,942 11,461 14,388 3.% 7,84 End of 3rd Fisc al Period (August 31, 215) *1 In book values, units below 1 million are truncated. The return yield is calculated as a weighted average based on appraisal value by type of use at the end of each fiscal period. End of 4th F iscal Period (F ebruary 29, 216) End of 5th F iscal Period (August 31, 216).%

20 19 IV. Future Strategy

21 1. Strategy Framework １ 2 Distribution per Unit (DPU)-Focused Strategy External Growth Strategy Based on market conditions, we will continue investing carefully and selectively Seek appropriate return by continuing to selectively invest in sponsor-developed and sponsor-owned properties that hold a promise of future growth Asset size of 3 billion is within sight (Aim to grow assets under management to 3 billion in 3 5 years after listing) Internal Growth Strategy Seek fair rent, maintain high occupancy rate Continue rent negotiations with tenants who are paying below-market rents Maintain high occupancy rate by leveraging the attractive location of properties Financial Strategy Maintain stable and sound financial management Based on expansion of asset size, control LTV appropriately (aiming for approx. 4%-45% range) While monitoring interest rate trends, seek long-term fixed borrowings Diversify financing sources and methods Aim to consistently increase DPU

22 2. External Growth Strategy 21 Understanding the Real Estate Market Environment*1 １ The average expected NOI yield on Tokyo (Otemachi) offices has recently sunk to a record low of 3.65%, reflecting the low interest rates caused by the BoJ s negative interest rate policy. However, some market participants believe further downside room is limited, so the direction of investor interest will be closely watched. 5.% CBRE Real Estate Investor Survey Expected return on Tokyo (Otemachi) offices (NOI basis) Among B class buildings in central Tokyo, the vacancy rate continues to decline while rents rise. The rent uptrend is spreading to medium-sized buildings in central Tokyo and other favorable locations. Vacancy rate Vacancy rate Monthly rent (JPY/tsubo) 35,/tsubo Monthly rent 3,/tsubo 4.5% 25,/tsubo 2,/tsubo Jul % 3.65% 15,/tsubo 1,/tsubo 3.5% Jan. 28 Jan. 29 Jan. 21 Jan. 211 Jan. 212 Jan. 213 Jan. 214 Jan. 215 Jan. 216 Based on the BoJ s new monetary easing framework (QQE with yield curve control), the 1-year JGB yield is expected to remain stable at about %. The risk of a sudden yield rise has lessened. Source Sanko Estate (Vacancy Rate), Sanko Estate NLI Research Institute (Office Rent) ( ) 1-year Japanese government bond*3 1.2 Decline of office vacancy rate and rise of rents likely to continue With low, stable interest rates, funding environment is favorable.7 Real estate prices expected to stay in high range,.2 but further gains to be limited -.3 Jan. 21 Jan. 211 Jan. 212 Jan. 213 Jan. 214 Jan. 215 Jan. 216 *1 This is the opinion of the asset management company based on these materials. Expected NOI yields show the averages for office spaces in on Tokyo (Otemachi) offices area in the Japanese Real Estate Investor Survey conducted by CBRE, Inc.. *3 Outlook prepared by the Asset Manager based on information from vendors.

23 2. External Growth Strategy ２ 22 Operational Guideline Change The sponsor pipeline is centered on Tokyo Commercial Properties (TCP), and in light of the need to continually expand property acquisition opportunities that will contribute to raising investor value, we changed the TCP investment ratio from approximately 8% to approximately 8%-9%, and the Next Generation Asset (NGA) investment ratio to approximately 1%-2% Against the background of Tokyo s successful bid for the 22 Olympics and the government s various policies to make Japan a tourism superpower, we have added hotels to our NGA investment targets because stable tourism and business use can be expected, as well as use by a rising number of inbound foreign tourists (Main changes in operational guidelines) Before change ３ (NGA requirements and hotel selection reasons) After change*1 Investment ratio TCP: Approx. 8% NGA: Approx. 2% TCP: Approx. 8% - 9% NGA: Approx. 1% - 2% Investment targets TCP Offices properties Retail properties NGA Private nursing homes Network centers TCP Offices properties Retail properties NGA Private nursing homes Network centers Hotels Steady growth expected due to rising social need Against background of 22 Tokyo Olympics and government measures to increase tourism, stable tourism & business use is expected, as well as growing demand from inbound foreign tourists Conclusion of long-term leases Long-term leasing is possible Tenant management knowhow, etc. Sponsors focus on hotels as one of three growth industries (seniors, tourism, environment), so their know-how can be leveraged, and a sponsor pipeline can be established Current Investment Policy Office properties Selective investment in properties with superior locations (close to stations, etc.) in Tokyo s 23 wards, whose rental revenue will contribute to internal growth after acquisition Private nursing homes Properties from our sponsor pipeline will be considered based on their assumed monthly usage fee, which must be in a high range and other conditions of acquisition Retail properties Selective investment in retail properties located in Tokyo or its suburbs, where rental revenue growth or stable cash flow is expected Hotels Selective investment, mainly in sponsor-developed hotels that are convenient to transportation or near major tourist attractions, so that tourism or business demand can be expected 1 Underlined portions have changed. 2 Assumed monthly usage fee is the monthly usage fee + the initial lump-sum payment divided by 6 months (assumed lease term). This is a simplified version of the burden the resident feels. In some cases, initial lump-sum payments do not exist.

24 2. External Growth Strategy 23 Our Sponsor s Principal Development Results and Development Plans ４ By the end of FY218, the sponsordeveloped properties, mainly in Six central Tokyo wards*1, are planned for completion. Completed in Fiscal 215 Shinagawa Season Terrace Hulic Toranomon Building Ochanomizu Sola City Trust Garden Tokiwamatsu Private nursing home Jan. 216 Completed (2, ) Acquired Completed in Fiscal 216 Slated for Completion in Fiscal 217 Slated for Completion in Fiscal 218 Trust Garden Tokiwamatsu (Tentative) Ginza 7 Chome Sotetsu Hotel (Sotetsu Fresa Inn Ginza 7 Chome) Commercial Development Project near Omori Station Shinbashi 2 Chome Commercial Development Hulic Shibuya Inokashira-dori Building Roppongi 3 Chome Sotetsu Hotel Development Project Hulic Shibuya Koen-dori Building Project Yurakucho 2 Chome Development Project Tokyo Metro Roppongi 7 Chome Project Toranomon First Garden Office property Aug. 21 Completed (1,29.25 ) 1 minute from Toranomon Station Office property Directly connected to Shinochanomizu Station, 1 minute from Ochanomizu Station Feb. 213 Completed (96, ) Jointly owned with sponsor Hulic Toranomon Building May 215 Completed (12,94.79 ) Acquired Acquired (Wholly owned) Toshima Ward Hulic Shibuya Inokashira-dori Building Conceptual image Retail property Nakano Ward 5 minutes from Shibuya Station May 217 will be completed Shinjuku Ward (Approx.2, ) Omotesando Retail property Under Planning Toranomon Oct. 218 Chuo Ward will be completed <Tentative> Ginza 7 Chome Sotetsu Hotel (Sotetsu Festa Inn Ginza 7 Chome) Aug. 216 completed (Approx. 7, ) Shinagawa Shinagawa Ward (Approx. 5,3 ) Ota Ward <Tentative> Tokyo Metro Roppongi 7 Chome Project Sep. 218 will be completed (Approx 1,5 ) *1 *3 *4 Conceptual image <Tentative> Retail Property Roppongi 3 Chome & Sotetsu Hotel Healthcare Project mall Directly connected to Roppongi Station Sep. 217 will be completed (Approx 4,8 ) Conceptual image Hotel 1 minute from Roppongi Station Conceptual image Retail property & Hotel 1 minute from Ginza Station (Approx. 15,7 ) Ginza Meguro Ward 5 minutes from Shibuya Station 1 minute from Toranomon Station Minato Ward Uchisaiwaicho Shibuya <Tentative> Hulic Shibuya Koen-dori Building Project Oct. 217 will be completed Ochanomizu Shinochanomizu Chiyoda Ward Shibuya Ward <Tentative> Yurakucho 2 Chome Project Taito Ward Bunkyo Ward Office property Feb. 217 will be completed (Approx. 3,7 ) Jointly owned with sponsor Land partially acquired Omori Conceptual image <Tentative> Commercial Project near Omori Station Hotel 5 minutes from Ginza Station Retail property Shinagawa Season Terrace 2 minutes from Omori Station Feb. 215 completed (Approx. 25, ) Refers to Chiyoda, Chuo, Minato, Shinjuku, Shibuya and Shinagawa wards Figures in parentheses indicate total floor area. Completion drawings may differ from the actual completed structures in some details. On the day these materials were drafted, the investment corporation had not necessarily decided to acquire the above properties (except properties already acquired). Office & Retail property 6 minutes from Shinagawa Station <Tentative> Shinbashi 2 Chome Commercial Development Jun. 217 will be completed (Approx. 2, ) Conceptual image Retail property 3 minutes from Uchisaiwaicho Station

25 3. Internal Growth Strategy １ 24 Negotiate Appropriate Rents (Offices properties) Of 8 tenants whose rents were revised upward in the 5th fiscal period (Aug. 216), 5 had rents below the market rent rate. Progress was made towards appropriate rents Focus placed on early leasing at market rent rates of spaces expected to be vacated by tenants No rents were revised downward in the 5th fiscal period (Aug. 216) % 1% 2% 3% 4% Less than -1% -1%未満 Less than 1% 12.% 5% Between -1% and -5% -1%以上 -5%未満 Between 1% and 5% 24.2% Between 5% and ±% 11.5% Aim to revise rent rates upward 6% 7% 8% 9% Between -5% and ±% -5%以上 %未満 1% ±% or more %以上 ±% or more 52.3% Aim to maintain current rent rates Account of divergence from market rent levels Planned approach Tenants at ±% or more Maintain current rent rate Tenants between 5% and ±% Aim to revise rent rates upward Tenants at less than 5% Aim to revise to appropriate rent rates Divergence from office market rent levels and rent renewal schedule 2, (m2) Less than -1% -1%未満 Between -1% and -5% -1%以上 -5%未満 Between -5% and ±% -5%以上 %未満 2.2% 2.4% 2.4% 3.8% 15, 12.5% 1, 5, 2.2% 4.5% 6th fiscal period 第6期(217年2月期) (Feb, 217) Notes: *1 ±% or more %以上 3.2% 3.5% 1.5% 2.8% 2.7% 7.9% 8.5% 7th fiscal period 第7期(217年8月期) 8th fiscal period 第8期 218年2月期 (Aug, 217) (Feb, 218) 16.3% 9th fiscal period 第9期 218年8月期 (Aug, 218) Market rent levels are calculated on a trial basis by the Asset Manager and may differ from announced market rent levels. Each rate is a percentage of the total rentable area in office properties held by Hulic Reit at the earnings announcement day. Proprietary right of land, retail spaces, and residential spaces are not included.

26 25 V. Appendix

27 1. Statements of Income th and 5th Fiscal Period Results (Unit: thousands of yen) Operating revenues Lease business revenue Other lease business revenues Real estate lease business revenues Operating expenses Expenses related to real estate lease business Asset management fee Asset custody fee Administrative service fees Directors' compensation Other operating expenses Total operating expenses Operating income Non-operating income Interest income Interest on refund Total non-operating income Non-operating expenses Interest expenses Interest expenses on investment corporation bonds Borrowing related expenses Amortization of investment unit issuance costs Amortization of investment corporation bond issuance costs Total non-operating expenses Ordinary income Profit before income taxes Income taxes current Income taxes deferred Total income taxes Profit Retained earnings brought forward Unappropriated retained earnings * Amounts less than 1 thousand yen have been truncated. 4th fiscal period 5th fiscal period Difference (Feb. 216) (Aug. 216) (5th fiscal period - 4th fiscal period) 4,617,146 22,375 4,819,522 5,572, ,561 5,825, ,736 5,185 1,5,922 1,615,71 45,463 9,66 3,922 6, 84,764 2,152,459 2,667,63 1,82,36 54,977 1,171 32,377 6, 87,735 2,443,298 3,382, ,334 99, ,455 2,97 29, , (638) 59 (579) 258,611 9,448 79, ,88 2,319,655 2,319, ,318, ,318, ,287 9,5 7,198 1,363 1,5 373,355 3,8,892 3,8, (2) 941 3,7, ,8,134 23, (8,835) 1, , , , (4) ,18 (17) 689,162

28 1. Statements of Income th Fiscal Period Forecast & Results, 5th Fiscal Period Results & 6th Fiscal Period New Forecast (Unit: millions of yen) 5th Fiscal 5th Fiscal Period Period Forecast Result Real estate lease business revenues 5,83 5,825 Difference + 21 Main Factors Rent, land rental, common service fee income 6th Fiscal 5th Fiscal Period Period New Result Forecast 5,825 6,646 Main Factors Difference Rent, land rental, common service fee income Current owned portion +18 Current owned portion +57, 2nd public offering acquisition +12 Heat, water, electricity 3rd public offering acquisition +591 Current owned portion (11), 2nd public offering acquisition (4) Heat, water, electricity Current owned portion +13, 2nd public offering acquisition +9 3rd public offering acquisition +15 Expenses related to real estate lease business (Of which) Taxes and public dues Depreciation Repair expenses Leasing-related costs Other expenses related to real estate lease business (1,885) (1,82) + 83 (1,82) (2,91) (443) (573) (443) (574) (443) (574) (443) (665) (69) (111) -41 Current owned portion -35 (7) (43) -36 (77) (827) -119 Current owned portion -13, 2nd public offering acquisition -17 Heat, water, electricity -53 Current owned portion -24, 2nd public offering acquisition -8, 3rd public offering acquisition -21) (117) (69) + 47 (8) (7) +1 (742) (77) + 35 Current owned portion +38, 2nd public offering acquisition +1 Heat, water, electricity +3 Current owned portion +28, 2nd public offering acquisition +2 3rd public offering acquisition -86 Other expenses for 2nd public offering acquisition -4 Other expenses for 3rd public offering acquisition -58 Income from real estate lease business Operating expenses (excluding rent-related expenses) (Of which) Asset management fee Other operating expenses Operating income Non-operating income Non-operating expenses (Of which) Interest expenses, Borrowing-related expenses Amortization of investment unit issuance expenses Amortization of investment corporation bond issuance expenses Ordinary income Profit Cash distributions per unit (yen) 3,918 (634) 4,23 (641) (478) (54) -26 (156) (136) ,283 (392) 3,382 (373) (379) (12) (1) 2,891 2,89 3,2 (361) (1) (1) 3,8 3,7 3, Lawyer, accountant, and other specialist remuneration +4 2nd public offering acquisition +16 4,23 (641) 4,555 (753) (54) (583) (136) (169) -33 3,382 (373) 3,81 (435) (361) (1) (1) 3,8 3,7 3,143 (414) (19) (1) 3,366 3,365 3, Administrative service fees, Asset management fee -1 3rd public offering acquisition -51 Notes: * Aside from main factors written in fluctuation factors, figures below 1 million are truncated. * Current owned portion numbered 31 at the end of the 3rd fiscal period. Those acquired with the 2nd public offering are Hulic Toranomon Bldg., Hulic Kamiyacho Bldg. (additional acquisition), Leaf minatomirai (land), and Orchid Square. Those acquired with the 3rd public offering are Ochanomizu Sola City (additional acquisition), Hulic Toranomon Bldg. (additional acquisition), Rapiros Roppongi (additional acquisition), Trust Garden Tokiwamatsu, and Sotetsu Fresa Inn Ginza 7 Chome (Land).

29 1. Statements of Income th Fiscal Period Previous & New Forecasts, 6th & 7th Fiscal Period Forecasts (Unit: millions of yen) 6th Fiscal Period Previous Forecast Real estate lease business revenues 5,959 6th Fiscal Period New Forecast 6,646 Difference Main Factors Rent, land rental, common service fee income 6th Fiscal Period New Forecast 6,646 7th Fiscal Period Forecast 6,665 Main Factors Difference + 18 Rent, land rental, common service fee income Current owned portion +41, 2nd public offering acquisition +5 Current owned portion -32, 2nd public offering acquisition -3 3rd public offering acquisition rd public offering acquisition +71 Heat, water, electricity Heat, water, electricity Current owned portion +2 2nd public offering acquisition +2 Current owned portion +1, 3rd public offering acquisition +3 3rd public offering acquisition +15 Expenses related to real estate lease business (Of which) Taxes and public dues Depreciation Repair expenses (1,91) (2,91) -189 (2,91) (2,158) -67 (443) (443) (443) (53) -87 (579) (665) -85 (15) (111) -6 Other expenses related to real estate lease business (24) (43) -19 2nd public offering acquisition Heat, water, electricity -2 Current owned portion +3 2nd public offering acquisition -3) Leasing-related costs 3rd public offering acquisition -47 (749) (827) 3rd public offering acquisition -85 (665) (682) -16 3rd public offering acquisition -1 Current owned portion -6 (111) (82) + 29 (43) (12) + 3 (827) (851) -23 Current owned portion +37 2nd public offering acquisition -6 Current owned portion +1 2nd public offering acquisition +15 Heat, water, electricity -3 3rd public offering acquisition -3) Other expenses for 3rd public offering acquisition 7 3rd public offering acquisition -2) Other expenses for 3rd public offering acquisition -58 Income from real estate lease business Other expenses for current owned portion -13 4,58 (686) 4,555 (753) ,555 (753) 4,56 (77) (526) (159) 3,371 (43) (583) (169) 3,81 (435) (583) (169) 3,81 (435) (62) (167) 3,735 (442) Interest expenses, Borrowing-related expenses (39) (414) -24 (414) (422) -7 Amortization of investment unit issuance expenses (11) (1) 2,968 2,967 3,1 (19) (1) 3,366 3,365 3, (19) (1) 3,366 3,365 3,22 (19) (1) 3,293 3,292 3, Operating expenses (excluding rent-related expenses) (Of which) Asset management fee Other operating expenses Operating income Non-operating income Non-operating expenses (Of which) Amortization of investment corporation bond issuance costs Ordinary income Profit Cash distributions per unit (yen) 2nd public offering acquisition -4 2nd public offering acquisition +25 3rd public offering acquisition -49 3rd public offering acquisition -11 Notes: * Aside from main factors written in fluctuation factors, figures below 1 million are truncated. * Current owned portion numbered 31 at the end of the 3rd fiscal period. Those acquired with the 2nd public offering are Hulic Toranomon Bldg., Hulic Kamiyacho Bldg. (additional acquisition), Leaf minatomirai (land), and Orchid Square. Those acquired with the 3rd public offering are Ochanomizu Sola City (additional acquisition), Hulic Toranomon Bldg. (additional acquisition), Rapiros Roppongi (additional acquisition), Trust Garden Tokiwamatsu, and Sotetsu Fresa Inn Ginza 7 Chome (Land).

30 2. Balance Sheets 29 (Unit: thousands of yen) (Unit: thousands of yen) End of 4th Fiscal Period End of 5th Fiscal Period Difference End of 4th Fiscal Period End of 5th Fiscal Period Difference (Feb.28, 216) (Aug. 31, 216) (5th Fscal Period 4th Fiscal Period) (Feb. 28, 216) (Aug. 31, 216) (5th Fscal Period 4th Fiscal Period) As s ets Li abi l i ti es Current as s ets Current l i a bi l i ti es Cas h a nd depos i ts 4,51,142 6,38,255 1,798, ,934 42, ,384 Cas h a nd depos i ts i n trus t 3,665,614 4,52, ,623 Short-term l oans pa yabl e 3,96, 4,66, 7, Operati ng accounts recei va bl e 45,715 11,35-34,49 Current porti on of l ong-term l oans paya bl e 8,49, 8,49, Prepai d expens es 27,158 36,935 9, ,573 6,353 18,78 47,537 49,828 2, , ,632 13,39 Advances recei ved 776,731 1,3,53 253,771 Depos i ts recei ved 1,13 13,931,147 15,391,587 1,46,439 Deferred tax as s ets Cons umpti on taxes recei va bl e Other Total current as s ets ,725-16,725 1, ,267,96 1,877,614 2,61,517 Noncurrent as s ets Property, pl ant a nd equi pment 37,187,728 38,679,945 1,492,216 (1,71,944) (2,262,23) -551,258 Bui l di ngs i n trus t, net 35,476,784 36,417,742 94, , , Accumul ated depreci a ti on (36,78) (45,918) -9,839 Structures i n trus t, net 28,77 199,844-8,926 Ma chi nery and equi pment i n trus t 189,591 19, Accumul ated depreci a ti on (29,574) (41,529) -11,954 Machi nery a nd equi pment i n trus t, net 16,17 148,743-11,273 1,2 19,15 9,148 (2,67) (3,74) -1,7 7,934 16,76 8, ,623, ,362,3 3,738,426 Structures i n trus t Tool s, furni ture and fi xtures i n trus t Accumul ated depreci a ti on Tool s, furni ture and fi xtures i n trus t, net La nd i n trus t ,477, ,145,61 31,668,219 8,471,289 8,471,289 6,151 5,133-1,18 8,477,441 8,476,422-1,18 Cons tructi on i n progres s i n trus t Total property, pl ant a nd equi pment Inta ngi bl e as s ets Leas ehol d ri ghts i n trus t Other Total i nta ngi bl e as s ets Inves tments and other as s ets Leas e and guara ntee depos i ts Long-term prepa i d expens es Total i nves tments a nd other as s ets Total noncurrent as s ets 2, 2, 552,38 495,494-56, ,38 515,494 (56,886) 17,527,23 22,137,518 31,61,314 51,815 Deferred a s s ets 51,815 Inves tment corporati on bond i s s uance cos ts 18,962 17,956-1,5 Total deferred a s s ets 18,962 69,771 5,89 178,813, ,84,94 34,271,641 Inves tment uni t i s s uance expens es Tota l a s s ets Accounts payabl e - other Accrued expens es Income ta xes pa yabl e Accrued cons umpti on taxes Total current l i a bi l i ti es Accumul ated depreci a ti on Bui l di ngs i n trus t Opera ti ng accounts pa yabl e Note: Amounts less than 1 thousand yen have been truncated. Noncurrent l i a bi l i ti es 2,, 2,, 66,32, 66,32, 7,626,13 8,828,11 1,22,6 75,946,13 77,148,11 1,22,6 89,877,251 92,539,698 2,662,446 86,617,4 117,537,72 3,92,32 Unappropri a ted retai ned earni ngs 2,318,971 3,8, ,162 Total s urpl us 2,318,971 3,8, ,162 88,936,11 12,545,26 31,69,194 88,936,11 12,545,26 31,69, ,813, ,84,94 34,271,641 Inves tment corpora ti on bond Long-term l oans pa yabl e Tenant l eas ehol d a nd s ecuri ty depos i ts i n trus t Total non current l i abi l i ti es Tota l l i abi l i ti es Net as s ets Uni thol ders ' equi ty Uni thol ders ' capi ta l Surpl us Total uni thol ders ' equi ty Tota l net a s s ets Tota l l i a bi l i ti es a nd net as s ets

31 3. Newly Acquired Properties 1 Hulic Toranomon Building (Additional acquisition) Sponsordeveloped Location Minato Ward, Tokyo Nearest station 1 minute from Toranomon Station, Tokyo Metro GInza Line Floors 12,94.79 m2 (entire building) Leasable area 2, m2 (equivalent to 3%) Completion of construction May Highlights New office building in Toranomon, where infrastructure is improving The Toranomon area is rising in prominence with the opening of Toranomon Hills, the Shintora-dori roadway, and other large-scale redevelopment projects such as a new metro station. Hulic-developed property, now wholly-owned (1%) Previously Hulic REIT had a 7% quasi-co-ownership interest in this building, and now it has purchased the remaining 3% so that it wholly owns the building. This increases management freedom. Location characteristics Acquisition price 5,57 million Appraisal value*1 6,18 million Appraisal NOI yield 3.9% Acquisition date Sep. 1, 216 An office district adjoining Kasumigaseki This property is next to Toranomon Station along Sotobori-dori, and near Kasumigaseki, the administrative hub of the Japanese government. Since long ago, companies with government-related work, extra-governmental organizations, and professionals have clustered in this area. Property characteristics Advanced features: Seismic base isolation structure, energy savings equipment This office has advanced features, such as a seismic base isolation structure, standby generator, energy saving features, such as natural ventilation and natural light intake, which cater to the needs of the most demanding tenant. DBJ Green Building 5-star certified (highest rank) 5-star certification from DBJ Green Building, awarded for achieving the top domestic class in environmental and social considerations. *1 Appraisal value at the time of acquisition is shown. NOI yield = NOI/acquisition price (NOI based on appraisal value at the end of each fiscal period (at time of acquisition for newly acquired assets), rounded to the 1st decimal place).

32 3. Newly Acquired Properties 2 Rapiros Roppongi (Additional acquisition) 31 Highlights Location Minato Ward, Tokyo Nearest station Directly connected to Roppongi Station, Tokyo Metro Hibiya Line, etc. Floors 12,958.9 m2 (entire building) Leasable area m2 (Unit ownership interest) 1 Completion of construction Aug Acquisition price 1,5 million Appraisal value 1,11 million Appraisal NOI yield *3 4.5% Acquisition date Sep. 16, 216 Rare building directly connected to Roppongi Station This superior property is directly connected to Roppongi Station, and we have acquired an additional 6.8% of its land and 1.4% of the building, expanding our ownership to 86.4% of the land and 84.% of the building. Stable occupancy and record of rent increases Based on efforts to attract tenants, occupancy, once just above 9%, has been 1% since Feb From the 3rd fiscal period (Aug. 215), to the 5th fiscal period (Aug. 216), 4 leases were renewed for an average rent increase of 8%. Feb. 28 Aug. 31 Feb. 28 Aug. 31 Feb Location characteristics Located in commercial and business area above Roppongi Sta. Located above Roppongi St., a lively area long known for bars, restaurants, and shops. More recently, Roppongi has also become a popular base for foreign companies, IT ventures, and other companies. Property characteristics Approaches from station and main road designed with care Shops are laid out effectively on the concourse between building and station, and the street side of the building is supported on large pillars (piloti) for convenience and high visibility. *1 This additional acquisition of a unit owned building (shared land ownership which includes partial co-ownership interest) amounts to approx. 6.8% of the land and 1.4% of the floor area (B1F and part of 5F) in terms of the official register. Appraisal value at the time of acquisition is shown. *3 NOI yield = NOI/acquisition price (NOI based on appraisal value (at time of acquisition), rounded to the 1st decimal place).

33 3. Newly Acquired Properties 3 Ochanomizu Sola City (Additional acquisition) Sponsordeveloped 32 Highlights Additional acquisition of large-scale multipurpose building Location Chiyoda Ward, Tokyo Nearest station Directly connected to ShinOchanomizu Station, Tokyo Metro Chiyoda Line m2 Floors 96, Leasable area 5,582.2 m2 (equivalent to 8.7 %) Completion of construction Feb. 213 By acquiring another 8.7% of this building, Hulic REIT s quasi-coownership interest expanded to 21.7%. Hulic continues to hold another 9.3%, and our management is based on common goals. Improvement of this property s earning power Since the initial acquisition in Nov. 214, this property s earning power has been rising steadily in line with the average rent and its occupancy rate. (entire building) (Office revenue for November 214 = 1)(*3) Acquisition price 15,295 million Appraisal value*1 16,74 million Location characteristics 3.9% Office with directly connected to Shin-Ochanomizu Station Nov. 214 Feb. 215 Appraisal NOI yield Acquisition date Aug. 215 Feb. 216 Aug. 216 Directly linked to the Tokyo Metro s Shin-Ochanomizu Station and facing the functionally developing Hijiribashi-guchi Ekimae Square, this area has traditionally been home to publishing companies due to its convenient location, and more recently to IT companies. Oct. 4, 216 Property characteristics Large-scale multipurpose building with advanced features The building is equipped with a seismic base isolation structure and backup power generators, as well as environmentally friendly features like solar power generation and use of spring water from the subway. This multipurpose (mainly office) building has state-ofthe-art specs. DBJ Green Building 5-star certified (highest rank) 5-star certification from DBJ Green Building, awarded for achieving the top domestic class in environmental and social considerations. *1 Appraisal value at the time of acquisition is shown. NOI yield = NOI/acquisition price (NOI based on appraisal value (at time of acquisition), rounded to the 1st decimal place). *3 Calculated based on monthly rents for office sections (not including education-related facilities).

34 3. Newly Acquired Properties 4 Trust Garden Tokiwamatsu Sponsordeveloped Location Shibuya Ward, Tokyo Nearest station 13 minutes from Omotesando Station, Tokyo Metro Ginza Line, etc Floors 2, Leasable area 2, m2 Completion of construction Jan. 216 Highlights Private nursing home developed by Hulic This Hulic-developed property is newly constructed, and we have concluded a 2-year lease with Trust Garden, the operator. This nursing home has high scarcity value and asset value This home is located in the luxurious residential neighborhood of Tokiwamatsu, where the supply of private nursing homes is limited, so the demand environment is good. m2 Acquisition price 3,3 million Appraisal value*1 3,23 million Appraisal NOI yield 4.7 % Acquisition date 33 Sep. 1, 216 Private nursing home Location characteristics The time-honored low-rise neighborhood of Tokiwamatsu Shibuya Sta. Known by its old name of Tokiwamatsu, this area is a quiet residential neighborhood on the rise. Nowadays, it also has a high concentration of schools, so it is also known for education. Property characteristics Features befitting a high-grade facility Barrier-free design and wide hallways are employed, as well as environmentally friendly LED lighting throughout. A lounge facing a greenery-filled garden, a carriage porch, and other touches add to the high-grade appeal. *1 Appraisal value at the time of acquisition is shown. NOI yield = NOI/acquisition price (NOI based on appraisal value (at time of acquisition), rounded to the 1st decimal place).

35 3. Newly Acquired Properties 5 Sotetsu Fresa Inn Ginza 7 Chome (Land) Sponsor-deve loped Location Chuo Ward, Tokyo Nearest station 5 minutes from Ginza Station, Tokyo Metro Ginza Line, etc. Floors Leasable area m2 (equivalent to 5 %) Completion of construction 34 Highlights Hulic-developed properties in company s priority area Hulic holds 13 properties in the Ginza-Yurakucho area (end of Aug. 216), one of Japan s most fashionable commercial districts. Other development projects are being pursued in addition to this hotel. ➊ Hulic Ginza Bldg. ➋ Hulic Nishiginza No.2 Bldg. ➌ Hulic Nishiginza Bldg. ➍ Hulic Ginza 1 Chome Bldg. ➎ Hulic Ginza 2 Chome Bldg. (Mercure Hotel Tokyo Ginza) Acquisition price 4,37 million Appraisal value*1 4,5 million Appraisal NOI yield 3.9 % Acquisition date Sep. 16, 216 ➏ Hulic Ginza Sukiyabashi Bldg. ➐ (Tentative) Yurakucho 2 Chome Development Project (Gate Hotel (Expect)) ➑ Hulic Ginza World Town Bldg. ➒ Ginza Wall Bldg ➓ Hulic Ginza 7 Chome Bldg ⓫ (Tentative) Ginza 7 Chome Sotetsu Hotel (Sotetsu Fresa Inn Ginza 7 Chome) ⓬ Ｇ1 ⓭ Ginza Towa Bldg 3-year usage agreement concluded with co-owner Hulic We have agreed to lease this property (5% of the land) to Hulic, which owns the building and 5% of the land, for 3 years. Location characteristics/property characteristics Located in office and hotel area within Ginza Located where Ginza district are lined with high-rise offices, hotels, and commercial facilities. The nearby site of the former Matsuzakaya Dept. Store is being redeveloped. Land for lodging-oriented hotel Our land is the site of Sotetsu Fresa Inn Ginza 7 Chome(286 guest rooms), and the above long-term lease secures stable revenue. *1 Appraisal value at the time of acquisition is shown. NOI yield = NOI/acquisition price (NOI based on appraisal value (at time of acquisition), rounded to the 1st decimal place).

36 4. List of Portfolio Properties (Tokyo Commercial Properties) at the End of 5th Fiscal Period Property No. 35 OF-1 OF-2 OF-3 OF-4 Hulic Kamiyacho Building Hulic Kudan Building (Land) Toranomon First Garden Rapiros Roppongi Location Toranomon, Minato Ward, Tokyo Kudankita, Chiyoda Ward, Tokyo Toranomon, Minato Ward, Tokyo Roppongi, Minato Ward, Tokyo Nearest station 1 minute from Kamiyacho Station, Tokyo Metro Hibiya Line 1 minute from Kudanshita Station, Tokyo Metro Tozai Line, etc. 1 minute from Toranomon Station, Tokyo Metro Ginza Line Directly connected to Roppongi Station, Tokyo Metro Hibiya Line, etc. Acquisition price 36,75 million 11,1 million 8,623 million 5,16 million Appraisal NOI yield 1 4.3% 4.2% 4.5% 5.7% Completion of construction Apr Aug. 21 Aug Structures and construction SRC/S, B2/11F S/RC, B2/12F SRC/RC, B2/1F Total leasable area 2 22,74.96 m2 3,351.7 m2 5, m2 5, m2 1.% 1.% 1.% 1.% Located near Kamiyacho Station Has total floor area of approximately 4,99 m2, with space of typical floor more than 3,1 m2 Has recently undergone large-scale refurbishment Located in a peaceful urban area near many foreign embassies Located along Mejiro Dori near Kudanshita Station Kudanshita Station served by several subway lines Tokyo Metro s Tozai and Hanzomon lines and the Toei Shinjuku Line A rare office building located within a large-scale central metropolitan planning zone Located along Sakurada Dori near Toranomon Station Relatively new building reconstructed by Hulic to high specifications Building received a Minister of the Environment Award in the Wall/Specialty Greening Technology category of the Wall and Special Greening Technology Contest (212) Connected directly with Roppongi Station, along Roppongi Dori Unusually good access, being directly connected with a station served by the Tokyo Metro Hibiya Line and the Toei Oedo Line One of few relatively large buildings in an area with numerous smaller properties Property name Photograph of property Occupancy rate 3 Feature of properties *1 NOI yield = NOI/acquisition price (NOI based on appraisal value (at end of August 216), rounded to the 1st decimal place). Figures for individual properties indicate leasable areas according to building leasing agreements or building plans as of the end of the 5th fiscal period (ended August 31, 216). (Figures for co-owned properties correspond to the owned portion.) *3 Figures are as of the end of the 5th fiscal period (ended August 31, 216).

37 4. List of Portfolio Properties (Tokyo Commercial Properties) at the End of 5th Fiscal Period Property No. 36 OF-5 OF-6 OF-7 OF-8 Hulic Takadanobaba Building Hulic Kanda Building Hulic Kandabashi Building Hulic Kakigaracho Building Location Takada, Toshima Ward, Tokyo Kandasudacho, Chiyoda Ward, Tokyo Kandanishikicho, Chiyoda Ward, Tokyo Nihonbashi Kakigaracho, Chuo Ward, Tokyo Nearest station 6 minutes from Takadanobaba Station, JR Yamanote Line and Tokyo Metro Tozai Line, etc. 1 minute from Kanda Station, Tokyo Metro Ginza Line 3 minutes from Otemachi Station, Tokyo Metro Tozai Line, etc. 2 minutes from Suitengumae Station, Tokyo Metro Hanzomon Line Acquisition price 3,9 million 3,78 million 2,5 million 2,21 million Appraisal NOI yield 1 5.2% 4.7% 4.6% 5.7% Completion of construction Nov Sep. 28 Jun. 21 Mar Structures and construction SRC, B1/8F RC, 9F S/RC, B1/1F SRC, B1/9F Total leasable area 2 5, m2 3, m2 2, m2 2, m2 1.% 1.% 1.% 1.% Situated along Shin-Mejiro Dori Near Takadanobaba Station, served by multiple lines, including JR Yamanote, Tokyo Metro Tozai and Seibu Shinjuku lines Competitive because the surrounding area contains little new supply and limited stock of offices Located along Chuo Dori near Kanda Station on the Tokyo Metro Ginza Line Also within walking distance of several other stations, including Kanda Station on the JR Yamanote Line and Awajicho Station on the Tokyo Metro Marunouchi Line Located near Otemachi Station Also within walking distance of several other stations, including Ogawamachi Station on the Toei Shinjuku Line and Kanda Station on the JR Yamanote Line Located along Shin-Ohashi Dori near Suitengumae Station Also within walking distance of Kayabacho Station on the Tokyo Metro Tozai Line and Ningyocho Station on the Tokyo Metro Hibiya Line Property was reconstructed by Fujigin Building Co., Ltd. (currently Hulic) Property name Photograph of property Occupancy rate 3 Feature of properties *1 NOI yield = NOI/acquisition price (NOI based on appraisal value (at end of August 216), rounded to the 1st decimal place). Figures for individual properties indicate leasable areas according to building leasing agreements or building plans as of the end of the 5th fiscal period (ended August 31, 216). (Figures for co-owned properties correspond to the owned portion.) *3 Figures are as of the end of the 5th fiscal period (ended August 31, 216).

38 4. List of Portfolio Properties (Tokyo Commercial Properties) at the End of 5th Fiscal Period Property No. 37 OF-9 OF-1 OF-11 OF-12 Ochanomizu Sola City Hulic Higashi Ueno 1 Chome Building Sasazuka South Building Tokyo Nishi Ikebukuro Building Kandasurugadai, Chiyoda Ward, Tokyo Higashi-Ueno, Taito Ward, Tokyo Sasazuka, Shibuya Ward, Tokyo Nishiikebukuro, Toshima Ward, Tokyo Directly connected to ShinOchanomizu Station, Tokyo Metro Chiyoda Line 2 minutes from Shin-Okachimachi Station, Toei Oedo Line and Tsukuba Express Line 22,854 million 2,67 million 2,1 million 1,58 million Appraisal NOI yield 1 3.9% 4.8% 5.2% 5.2% Completion of construction Feb. 213 Jul Dec Oct. 199 Structures and construction S, B2/23F SRC, 8F SRC/S, B1/8F S/SRC/RC, B3/14F 8, m2 3,262.9 m2 3,611.8 m2 1, m2 1.% 1.% 1.% 1.% Located along Hongo Dori and directly connected to Shin-Ochanomizu Station Within a 1-minute walk of 5 stations served by 9 lines A relatively new, high-spec, large-scale, multipurpose building with megafloors featuring open designs free of structural support pillars with standard floor area of approximately 3, m2 Located along Kasuga Dori near ShinOkachimachi Station Also within walking distance of several other stations, including NakaOkachimachi Station on the Tokyo Metro Hibiya Line and Okachimachi Station on the JR Yamanote Line Recently remodeled, involving mainly common areas Located along Koshu Kaido In a corner location on an arterial road, ensuring high visibility Provides relatively large scale in an area populated by numerous small-scale properties Located near Ikebukuro Station, one of Japan s leading terminals Ikebukuro Station served by numerous lines, including various JR and Tokyo Metro lines, the Seibu Ikebukuro Line and the Tobu Tojo Line Provides relatively large scale in an area populated by numerous small-scale properties Property name Photograph of property Location Nearest station Acquisition price Total leasable area 2 Occupancy rate 3 Feature of properties 5 minutes from Daitabashi Station, Keio Line *1 NOI yield = NOI/acquisition price (NOI based on appraisal value (at end of August 216), rounded to the 1st decimal place). Figures for individual properties indicate leasable areas according to building leasing agreements or building plans as of the end of the 5th fiscal period (ended August 31, 216). (Figures for co-owned properties correspond to the owned portion.) *3 Figures are as of the end of the 5th fiscal period (ended August 31, 216). 3 minutes from Ikebukuro Station, JR Yamanote Line, Tokyo Metro Marunouchi Line

39 4. List of Portfolio Properties (Tokyo Commercial Properties) at the End of 5th Fiscal Period Property No. 38 OF-13 OF-14 RE-1 RE-2 Gate City Ohsaki Hulic Toranomon Building Oimachi Redevelopment Building (#2) Oimachi Redevelopment Building (#1) Location Osaki, Shinagawa Ward, Tokyo Toranomon, Minato Ward, Tokyo Higashi-Oi, Shinagawa Ward, Tokyo Nearest station 1 minute from Osaki Station, JR Yamanote, Rinkai Lines, etc. 1 minute from Toranomon Station, Tokyo Metro Ginza Line 1 minute from Oimachi Station, JR Keihin-Tohoku and Tokaido Main Lines Acquisition price 4,37 million 12,74 million 9,456 million 6,166 million 4.5% 4.% 5.8% 5.8% Property name Photograph of property Appraisal NOI yield 1 Completion of construction (Office and commercial building) Jan (Residential building) Dec May 215 Sep Sep Structures and construction (Office and commercial building) S/RC/SRC, B4/24F (Residential building) SRC/RC, B2/2F S, B1/11F SRC, B2/8F SRC, B3/1F 3, m2 6,2.26 m2 14, m2 1, m2 1.% 99.2% 1.% 1.% Directly connected to Osaki Station via a pedestrian deck Product of a mixed-use major redevelopment project combining numerous urban functions, with total floor area of approximately 35,45 m2 Extensive high-end features in common spaces, as well Located near Toranomon Station and facing Sotobori Dori A Hulic-developed property with the latest base isolation structure and energy-saving features Recipient of the highest 5-star rank in DBJ Green Building certification Total leasable area 2 Occupancy rate 3 Feature of properties Directly connected to Oimachi Station via a pedestrian deck Oimachi Station served by multiple lines, including JR Keihin Tohoku Line, Tokaido Main Line, Tokyu Oimachi Line and the Rinkai Line With a leading home electronics retailer as a core tenant, a large-scale facility divided into 2 buildings #1 and #2 and part of the property occupied by a food supermarket, conveniently meeting the lifestyle needs of station users and local residents *1 NOI yield = NOI/acquisition price (NOI based on appraisal value (at end of August 216), rounded to the 1st decimal place). Figures for individual properties indicate leasable areas according to building leasing agreements or building plans as of the end of the 5th fiscal period (ended August 31, 216). (Figures for co-owned properties correspond to the owned portion.) *3 Figures are as of the end of the 5th fiscal period (ended August 31, 216).

40 4. List of Portfolio Properties (Tokyo Commercial Properties) at the End of 5th Fiscal Period Property No. 39 RE-3 RE-4 RE-5 RE-6 Dining Square Akihabara Building Hulic Jingu-Mae Building Hulic Shinjuku 3 Chome Building Yokohama Yamashitacho Building Location Kandasakumacho, Chiyoda Ward, Tokyo Jingumae, Shibuya Ward, Tokyo Shinjuku, Shinjuku Ward, Tokyo Yamashita-cho, Naka Ward, Yokohama City, Kanagawa Prefecture Nearest station 1 minute from Akihabara Station, JR Yamanote Line, etc. 7 minutes from Meiji Jingumae Station, Tokyo Metro Chiyoda and Fukutoshin Lines 1 minute from Shinjuku Sanchome Station, Tokyo Metro Marunouchi Line, etc. 1 minute from Motomachi-Chukagai Station, Yokohama Minatomirai Railway Minatomirai Line Acquisition price 3,2 million 2,66 million 5,55 million 4,85 million 4.9% 4.7% 4.1% 5.3% Completion of construction Jun Sep. 2 Jun Jul Structures and construction RC, B2/9F RC/S, B2/6F S/SRC/RC, B1/7F SRC, B2/7F 2, m2 1, m2 1, m2 8,958.7 m2 1.% 1.% 1.% 1.% Located near Akihabara Station Akihabara Station served by 3 JR lines, Tokyo Metro Hibiya Line, Tsukuba Express, etc. Leased in full to one of Japan s leading karaoke companies (food and beverage establishment on middle and lower floors) Located along Cat Street, which is lined with fashion shops Retail stores on 1st and 2nd floors, housing on the 3rd and 4th floors, with weddingrelated facilities on the 5th to 7th floors Retail stores operated by leading domestic select shops, wedding-related facilities operated by company specializing in house weddings Located along Shinjuku Dori, near Shinjuku Sanchome Station Shinjuku Sanchome Station served by multiple lines, including Tokyo Metro Marunouchi Line and Fukutoshin Line, and Toei Shinjuku Line In a cluster of high-end retail facilities near Shinjuku Station, one of Japan s largest terminal hubs Located near Motomachi-Chukagai Station Located near Yamashita Park, a Yokohama Bayside symbol, in an area with numerous brand shops Leased entirely to a leading premium designer brand boutique firm Property name Photograph of property Appraisal NOI yield 1 Total leasable area 2 Occupancy rate 3 Feature of properties *1 NOI yield = NOI/acquisition price (NOI based on appraisal value (at end of August 216), rounded to the 1st decimal place). Figures for individual properties indicate leasable areas according to building leasing agreements or building plans as of the end of the 5th fiscal period (ended August 31, 216). (Figures for co-owned properties correspond to the owned portion.) *3 Figures are as of the end of the 5th fiscal period (ended August 31, 216).

41 4. List of Portfolio Properties (Tokyo Commercial Properties) at the End of 5th Fiscal Period Property No. RE-7 RE-8 Leaf Minatomirai (Land) Orchid Square Location Minatomirai, Nishi Ward, Yokohama, Kanagawa Prefecture Yurakucho, Chiyoda Ward, Tokyo Nearest station 3 minutes from Minatomirai Station, Yokohama Minatomirai Railway Minatomirai Line 3 minutes from Hibiya Station, Tokyo Metro Hibiya Line Acquisition price 11,7 million 3,52 million Appraisal NOI yield 1 4.3% 4.1% Completion of construction Jan. 29 Structures and construction RC, B1/8F 5,5.4 m2 1, m2 1.% 1.% Located near the center of the Minatomirai 21 area in a commercial development along Grand Mall Park Surrounded by streets on 3 sides and a park, visibility is high The porperty is a land of the large-scale retail facilities having a major interior design company as its key tenant. Located in a commercial district with ready access to multiple stations: Hibiya, Ginza, and Yurakucho In the Ginza-Yurakucho area, Orchid Square faces a street thronging with visitors to the bars and restaurants under the JR Yamanote Line The curtain wall on the front of the building attracts the eye and establishes a certain presence Property name Photograph of property Total leasable area 2 Occupancy rate 3 Feature of properties *1 NOI yield = NOI/acquisition price (NOI based on appraisal value (at end of August 216), rounded to the 1st decimal place). Figures for individual properties indicate leasable areas according to building leasing agreements or building plans as of the end of the 5th fiscal period (ended August 31, 216). (Figures for co-owned properties correspond to the owned portion.) *3 Figures are as of the end of the 5th fiscal period (ended August 31, 216). 4

42 4. List of Portfolio Properties (Next Generation Assets) at the End of 5th Fiscal Period Property No. Property name 41 NH-1 NH-2 NH-3 NH-4 Aria Matsubara Trust Garden Yoganomori Trust Garden Sakurashinmachi Trust Garden Suginami Miyamae Matsubara, Setagaya Ward, Tokyo Yoga, Setagaya Ward, Tokyo Tsurumaki, Setagaya Ward, Tokyo Miyamae, Suginami Ward, Tokyo 13 minutes from Komazawa University Station, Tokyu Den-entoshi Line 12 minutes from Fujimigaoka Station, Keio Inokashira Line Photograph of property Location Nearest station Acquisition price 1 minutes from Meidaimae Station, 14 minutes from Yoga Station, Tokyu Keio Line Den-en-toshi Line 3,244 million 5,39 million 2,85 million 2,76 million Appraisal NOI yield 1 6.% 6.% 5.9% 5.9% Completion of construction Sep. 25 Sep. 25 Aug. 25 Apr. 25 RC, 4F RC, 3F RC, 3F RC, 3F 5, m2 5, m2 3,7.26 m2 3, m2 1.% 1.% 1.% 1.% Located in a quiet residential area with numerous detached homes and low-rise condominiums Facility operated by one of Japan s largest private nursing home operators; the Aria brand represents the high-end range Reconstructed by Nihonbashi Kogyo Co., Ltd. (currently Hulic) Located in a quiet residential area with leafy boulevards Facility managed by a major operator of membership-type resort hotel and medical businesses Provides relatively large-scale nursingcare facilities Structures and construction Total leasable area 2 Occupancy rate 3 Feature of properties Located in a residential area with Located in a residential area amid numerous mid-sized condominium medium-sized condominium buildings, buildings within site of a shrine and school Facility managed by a major operator of Facility managed by a major operator of membership-type resort hotel and membership-type resort hotel and medical businesses medical businesses Property characterized by a comfortable, Features living quarters and a central family-style atmosphere courtyard *1 NOI yield = NOI/acquisition price (NOI based on appraisal value (at end of August 216), rounded to the 1st decimal place). Figures for individual properties indicate leasable areas according to building leasing agreements or building plans as of the end of the 5th fiscal period (ended August 31, 216). (Figures for co-owned properties correspond to the owned portion.) *3 Figures are as of the end of the 5th fiscal period (ended August 31, 216).

43 4. List of Portfolio Properties (Next Generation Assets) at the End of 5th Fiscal Period Property No. 42 NW-1 NW-2 NW-3 NW-4 Ikebukuro Network Center Tabata Network Center Hiroshima Network Center Atsuta Network Center Kami-Ikebukuro, Toshima Ward, Tokyo Tabata, Kita Ward, Tokyo Hikari-machi, Higashi Ward, Hiroshima City, Hiroshima Prefecture Hatano-cho, Atsuta Ward, Nagoya City, Aichi Prefecture 4,57 million 1,355 million 1,8 million 1,15 million Appraisal NOI yield 1 5.1% 5.7% 6.6% 6.% Completion of construction Jan. 21 Apr Oct. 21 May 1997 Structures and construction S/SRC, B1/6F RC, B1/4F S/SRC, 7F RC, B1/3F Total leasable area 2 12,773.4 m2 3, m2 5,28.54 m2 4,943.1 m2 1.% 1.% 1.% 1.% Property name Photograph of property Location Acquisition price Occupancy rate*3 *1 NOI yield = NOI/acquisition price (NOI based on appraisal value (at end of August 216), rounded to the 1st decimal place). Figures for individual properties indicate leasable areas according to building leasing agreements or building plans as of the end of the 5th fiscal period (ended August 31, 216). (Figures for co-owned properties correspond to the owned portion.) *3 Figures are as of the end of the 5th fiscal period (ended August 31, 216).

44 4. List of Portfolio Properties (Next Generation Assets) at the End of 5th Fiscal Period Property No. 43 NW-5 NW-6 NW-7 NW-8 Nagano Network Center Chiba Network Center Sapporo Network Center Keihanna Network Center Tsurugamidori-cho, Nagano City, Nagano Prefecture Muzaigakuendai, Inzai City, Chiba Prefecture Kitakujonishi, Kita Ward, Sapporo City, Hokkaido Kizukumo Mura, Kizugawa City, Kyoto Prefecture 35 million 7,6 million 2,51 million 1,25 million Appraisal NOI yield 1 8.8% 5.4% 5.5% 5.9% Completion of construction Sep Jun Jan. 22 May 21 Structures and construction S/RC, B1/6F SRC, B2/8F S, 5F SRC/S, 3F Total leasable area 2 2, m2 23,338. m2 9, m2 9, m2 1.% 1.% 1.% 1.% Property name Photograph of property Location Acquisition price Occupancy rate*3 *1 NOI yield = NOI/acquisition price (NOI based on appraisal value (at end of August 216), rounded to the 1st decimal place). Figures for individual properties indicate leasable areas according to building leasing agreements or building plans as of the end of the 5th fiscal period (ended August 31, 216). (Figures for co-owned properties correspond to the owned portion.) *3 Figures are as of the end of the 5th fiscal period (ended August 31, 216).

45 5. Status of Appraisal Values by Property 44 *1 Name ① Acquisition price Subtotal for Tokyo Commercial Properties 22 properties Subtotal for office properties (14 properties) OF-1 Hulic Kamiyacho Building OF-2 Hulic Kudan Building (Land) OF-3 Toranomon First Garden OF-4 Rapiros Roppongi OF-5 Hulic Takadanobaba Building OF-6 Hulic Kanda Building OF-7 Hulic Kandabashi Building OF-8 Hulic Kakigaracho Building OF-9 Ochanomizu Sola City OF-1 Hulic Higashi Ueno 1 Chome Building OF-11 Sasazuka South Building OF-12 Tokyo Nishiikebukuro Building OF-13 Gate City Ohsaki OF-14 Hulic Toranomon Building Subtotal for retail properties (8 properties) RE-1 Oimachi Redevelopment Building (#2) RE-2 Oimachi Redevelopment Building (#1) RE-3 Dining Square Akihabara Building RE-4 Hulic Jingu-Mae Building RE-5 Hulic Shinjuku 3 Chome Building RE-6 Yokohama Yamashitacho Building RE-7 Leaf Minatomirai (Land)*3 RE-8 Orchid Square Subtotal for Next Generation Assets (12 properties) Subtotal for private nursing homes (4 properties) NH-1 Aria Matsubara NH-2 Trust Garden Yoganomori NH-3 Trust Garden Sakurashinmachi NH-4 Trust Garden Suginami Miyamae Subtotal for netwrok centers (8 properties) NW-1 Ikebukuro Network Center NW-2 Tabata Network Center NW-3 Hiroshima Network Center NW-4 Atsuta Network Center NW-5 Nagano Network Center NW-6 Chiba Network Center NW-7 Sapporo Network Center NW-8 Keihanna Network Center Total (34 properties) 167,421 12,337 36,75 11,1 8,623 5,16 3,9 3,78 2,5 2,21 22,854 2,67 2,1 1,58 4,37 12,74 47,84 9,456 6,166 3,2 2,66 5,55 4,85 11,7 3,52 33,389 14,244 3,244 5,39 2,85 2,76 19,145 4,57 1,355 1,8 1, ,6 2,51 1,25 2,81 ② Book value (As of Aug. 31, 216) 168,2 12,741 36,911 11,191 8,493 5,532 3,87 3,76 2,515 2,29 22,543 2,674 2,173 1,634 4,543 12,741 47,26 9,475 6,247 3,215 2,661 5,564 4,81 11,765 3,518 33,614 14,299 3,221 5,41 2,876 2,791 19,315 4,565 1,374 1,7 1, ,167 2,577 1,234 21,616 Profit price (Direct capitalization method) 189,39 135,13 4,7 12,4 1,5 6,9 4,4 4,6 2,8 2,72 24,96 2,91 2,17 1,79 4,4 14,42 54,26 11,8 7,32 3,68 3,37 6,6 5,38 12,9 3,75 38,485 17,95 4,25 6,7 3,56 3,44 2,535 5,16 1,57 1,21 1, ,22 2,59 1,31 227, ,86 136,8 41,8 12,4 1,4 7,2 4,3 4,33 2,83 2,71 25,9 2,95 2,18 1,81 4,42 14,56 55,6 12,1 7,38 3,74 3,44 6,21 5,45 12,9 3,84 38,756 18,6 4,28 6,74 3,58 3,46 2,696 5,22 1,58 1,22 1, ,28 2,6 1,31 23,616 ③ Appraisal value (As of Aug. 31, 216) Profit price Cap rate Discount rate Final cap rate (DCF) 187,61 3.8% 133,83 3.5% 3.9% 3.7% 4,2 3.5% 3.9% 3.8% 12,4 3.4% 3.9% 3.7% 1,5 3.3% 3.8% 3.8% 6,78 3.5% 4.% 4.3% 4,44 4.1% 4.5% 4.1% 3,94 4.2% 4.3% 3.9% 2,79 3.7% 4.1% 4.4% 2,73 4.5% 4.6% 3.6% 24,7 3.3% 3.7% 4.2% 2,86 4.% 4.4% 4.8% 2,15 4.5% 5.% 4.5% 1,76 4.3% 4.7% 3.8% 4,37 3.4% 3.9% 3.5% 14,21 3.2% 3.6% 4.1% 53,78 4.1% 4.3% 4.3% 11,7 4.4% 4.5% 4.5% 7,29 4.6% 4.7% 4.2% 3,62 4.% 4.4% 3.6% 3,34 3.7% 3.8% 3.7% 5,91 3.3% 3.9% 4.7% 5,31 4.5% 4.9% 3.9% 12,9 3.9% 3.9% 3.7% 3,71 3.5% 3.9% 38, % 17,83 4.3% 4.9% 4.5% 4,22 4.1% 4.7% 4.8% 6,66 4.4% 5.% 4.7% 3,53 4.3% 4.9% 4.7% 3,42 4.3% 4.9% 5.1% 2, % 5.3% 4.5% 5,9 4.3% 4.7% 4.9% 1,55 4.7% 5.1% 5.8% 1,2 5.6% 6.% 5.4% 1,1 5.2% 5.6% 7.% % 7.2% 5.2% 7,16 5.% 5.4% 5.3% 2,57 5.1% 5.5% 5.6% 1,3 5.4% 5.8% 225,774 *1 Acquisition prices are rounded; appraisal values less than 1 million are truncated. Yields are calculated based on the weighted average of appraisal values by asset class as of August 31, 216. *3 The direct capitalization method is not applied in the appraisal value of RE-7, nor is the final cap rate employed in the DCF method. But for the sake of comparison, profit price and each cap rate subtotal and total in the direct capitalization method are substituted with profit price and the discount rate in the DCF method for calculations. Unit: millions of yen ④ Unrealized gains/losses Appraisal firm ③ ② 21,387 14,388 DAIWA REAL ESTATE APPRAISAL 3,788 1,28 CBRE 2,6 1,367 DAIWA REAL ESTATE APPRAISAL 529 The Tanizawa Sogo Appraisal 353 DAIWA REAL ESTATE APPRAISAL 284 The Tanizawa Sogo Appraisal 51 2, (3) 155 (143) 1,678 6,999 The Tanizawa Sogo Appraisal 2,324 The Tanizawa Sogo Appraisal 1, The Tanizawa Sogo Appraisal DAIWA REAL ESTATE APPRAISAL 1,134 DAIWA REAL ESTATE APPRAISAL 231 4,87 3,65 1,28 1, , ,258

46 6. List of Appraisal Values by Property (Period-on-Period Comparison) Name Subtotal for Tokyo Commercial Properties 22 properties Subtotal for office properties (14 properties) OF-1 Hulic Kamiyacho Building OF-2 Hulic Kudan Building (Land) OF-3 Toranomon First Garden OF-4 Rapiros Roppongi OF-5 Hulic Takadanobaba Building OF-6 Hulic Kanda Building OF-7 Hulic Kandabashi Building OF-8 Hulic Kakigaracho Building OF-9 Ochanomizu Sola City OF-1 Hulic Higashi Ueno 1 Chome Building OF-11 Sasazuka South Building OF-12 Tokyo Nishiikebukuro Building OF-13 Gate City Ohsaki OF-14 Hulic Tranomon Building Subtotal for retail properties (8 properties) RE-1 Oimachi Redevelopment Building (#2) RE-2 Oimachi Redevelopment Building (#1) RE-3 Dining Square Akihabara Building RE-4 Hulic Jingu-Mae Building RE-5 Hulic Shinjuku 3 Chome Building RE-6 Yokohama Yamashitacho Building RE-7 Leaf Minatomirai (Land) *3 RE-8 Orchid Square Subtotal for Next Generation Assets (12 properties) Subtotal for private nursing homes (4 properties) NH-1 Aria Matsubara NH-2 Trust Garden Yoganomori NH-3 Trust Garden Sakurashinmachi NH-4 Trust Garden Suginami Miyamae Subtotal for network centers (8 properties) NW-1 Ikebukuro Network Center NW-2 Tabata Network Center NW-3 Hiroshima Network Center NW-4 Atsuta Network Center NW-5 Nagano Network Center NW-6 Chiba Network Center NW-7 Sapporo Network Center NW-8 Keihanna Network Center Total (34 properties) ① Appraisal value ② As of Feb. 29, 216 As of Aug. 31, ,75 132,67 39,6 12,4 1, 6,3 4,27 3,94 2,71 2,67 24,96 2,91 2,17 1,79 4,53 14,42 53,8 11,5 7,17 3,68 3,29 6,4 5,27 12,5 3,63 38,465 17,95 4,25 6,7 3,56 3,44 2,515 5,16 1,56 1,21 1, ,22 2,59 1,3 224, ,39 135,13 4,7 12,4 1,5 6,9 4,4 4,6 2,8 2,72 24,96 2,91 2,17 1,79 4,4 14,42 54,26 11,8 7,32 3,68 3,37 6,6 5,38 12,9 3,75 38,485 17,95 4,25 6,7 3,56 3,44 2,535 5,16 1,57 1,21 1, ,22 2,59 1,31 227, (Unit: millions of yen) Appraisal firm Cap rate by direct capitalization method ④ ⑤ ⑥ Change *1 *1 As of Feb. 29, 216 As of Aug. 31, 216 ⑤ ④ ③ Change ② ① 3,64 2,46 1, , ,66 3.8% 3.8% 3.8% 3.7% 3.8% 4.4% 4.2% 4.% 4.5% 3.6% 4.2% 4.8% 4.5% 3.8% 3.5% 4.2% 4.4% 4.6% 4.2% 3.7% 3.7% 4.8% 4.% 3.8% 3.8% 3.7% 3.8% 3.7% 3.8% 4.3% 4.1% 3.9% 4.4% 3.6% 4.2% 4.8% 4.5% 3.8% 3.5% 4.1% 4.3% 4.5% 4.2% 3.6% 3.7% 4.7% 3.9% 3.7%.% -.1%.%.%.% -.1% -.1% -.1% -.1%.%.%.%.%.%.% -.1% -.1% -.1%.% -.1%.% -.1% 4.7% 4.5% 4.8% 4.7% 4.7% 5.1% 4.5% 4.9% 5.8% 5.4% 7.% 5.2% 5.3% 5.6% 4.7% 4.5% 4.8% 4.7% 4.7% 5.1% 4.5% 4.9% 5.8% 5.4% 7.% 5.2% 5.3% 5.6%.%.%.%.%.%.%.%.%.%.%.%.%.%.% *1 The capitalization rate is calculated as a weighted average based on appraisal value by type of use at the end of each fiscal period. Regarding assets acquired in the 5th fiscal period, figures noted under as of Feb. 29, 216 are for the time of acquisition, and these are used in various calculations (an additional acquisition is included in OF-1). *3 The direct capitalization method is not applied in the appraisal value of RE-7. But for the sake of comparison, the cap rate subtotal by type of use are substituted with the discount rate in the DCF method for calculations. DAIWA REAL ESTATE APPRAISAL CBRE DAIWA REAL ESTATE APPRAISAL The Tanizawa Sogo Appraisal DAIWA REAL ESTATE APPRAISAL The Tanizawa Sogo Appraisal The Tanizawa Sogo Appraisal The Tanizawa Sogo Appraisal The Tanizawa Sogo Appraisal DAIWA REAL ESTATE APPRAISAL -.1% DAIWA REAL ESTATE APPRAISAL

47 7. Operating Revenues and Expenses by Property 46 (Unit: thousands of yen) *1 Property No. Property name Days under management Lease business revenues OF-1 OF-2 Hulic Kamiyacho Building 184 days (*3) OF-3 OF-4 OF-5 OF-6 Hulic Kudan Building (Land) Toranomon First Garden Rapiros Roppongi Hulic Takadanobaba Building 184 days 184 days 184 days 184 days OF-7 OF-8 OF-9 OF-1 Hulic Kanda Building Hulic Kandabashi Building Hulic Kakigaracho Building Ochanomizu Sola City Hulic Higashi Ueno 1 Chome Building 184 days 184 days 184 days 184 days 184 days 866, ,2 283, ,65 174, ,723 88,191 14,775 99, 83, ,2 264, , ,74 16,931 8,67 94,855 88,593 63,9 19,352 17,72 2,234 9,791 8,123 9,92 1,47 Expenses related to rent revenue 29,841 32, ,929 12,9 69,13 62,44 45,545 41,84 38,431 Taxes and public dues 28,392 3,237 32,562 34,586 12,813 4,25 8,936 9,158 7,246 Utilities expenses 41,266 12,59 16,998 11,829 7,427 5,88 6,764 7,113 Lease business revenue Other lease business revenues Insurance expenses Repair expenses 22, , ,615 3,162 1,13 Property management fees 68,765 1,325 4,775 4,389 15,517 7,21 5,882 12,823 13,684 5,77 1,17 25,964 53,539 1,751 23,777 1,47 1,438 1,374 43,513 43,6 1,371 19,299 19,465 14,741 7,643 7,813 Income (loss) from lease business 656, , ,78 115,74 15,88 54,318 42,645 63,691 6,569 NOI 7,59 232,273 26, ,76 125,17 73,783 57,386 71, ,978 68,382 Other expenses related to rent business Depreciation Property No. Property name Days under management Lease business revenues OF-11 OF-12 Sasazuka South Building 184 days OF-13 Tokyo Nishiikebukuro Gate City Ohsaki Building 184 days 184 days OF-14 RE-1 RE-2 RE-3 RE-4 RE-5 RE-6 Hulic Toramonon Building Oimachi Redevelopment Building (#2) Oimachi Redevelopment Building (#1) Dining Square Akihabara Building Hulic Jingu-Mae Building Hulic Shinjuku 3 Chome Building Yokohama Yamashitacho Building 184 days days 184 days 184 days 184 days 184 days 89,851 55, , ,73 312, 218,931 84, ,79 Lease business revenue 77,566 54, ,912 31, , 218,931 79,94 145,443 Other lease business revenues 12,285 1,8 9,755 13,599 5,34 8,346 Expenses related to rent revenue 38,472 2,22 82,41 118,823 61,866 61,363 2,252 36,26 Taxes and public dues 8,276 2,459 14,293 35,284 29,984 32,96 5, Utilities expenses 9,817 9,668 13,979 5,324 5,88 Insurance expenses , Repair expenses ,288 9, ,583 6,24 4,378 3,163 4,99 11,922 2,961 42,541 1, , ,152 7,63 4,719 14,76 37,455 24,449 14,41 5,98 2,57 Income (loss) from lease business 51,378 35,21 7, ,25 25, ,567 64, ,53 NOI 58,442 39,92 84,73 233,75 274, ,977 7,55 12,37 Property management fees Other expenses related to rent business Depreciation *1 All amounts below 1, are truncated. Not disclosed because approval not obtained from the end tenant *3 Includes additional acquisition (quasi-co-ownership of 3.1%) (relevant additional acquisition was under management for 17 days). 79,46 124,63

48 7. Operating Revenues and Expenses by Property 47 (Unit: thousands of yen) *1 Property No. Property name Days under management Lease business revenues Lease business revenue RE-7 RE-8 NH-1 NH-2 NH-3 NH-4 NW-1 NW-2 NW-3 NW-4 Ikebukuro Network Center Tabata Network Center Hiroshima Network Center Atsuta Network Center 184 days 184 days 184 days 184 days Leaf Minatomirai (Land) Orchid Square Aria Matsubara Trust Garden Yoganomori Trust Garden Sakurashinmachi Trust Garden Suginami Miyamae 155 days 155 days 184 days 184 days 184 days 184 days 225,37 77, ,6 45,88 43,845 36, ,37 67, ,6 45,88 43,845 36,743 9,769 1,499 16,264 28,974 8,88 14,4 11,351 4,865 Other lease business revenues Expenses related to rent revenue Taxes and public dues 15,653 4,734 5,588 Utilities expenses 7, Insurance expenses Repair expenses ,127 2, , ,667 11,717 2,877 5,862 4,74 Income (loss) from lease business 223,871 6,887 16,625 36,28 29,84 25,391 NOI 223,871 66, ,343 39,85 35,73 3,132 Property management fees Other expenses related to rent business Depreciation Property No. Property name Days under management NW-5 NW-6 Nagano Network Center Chiba Network Center 184 days 184 days Lease business revenues 97,256 NW-7 162,413 NW-8 Sapporo Keihanna Network Network Center Center 184 days 184 days 17, ,633 83,76 47,47 17, ,633 83,76 47,47 Expenses related to rent revenue 6,872 76,931 26,219 18,582 Taxes and public dues 2,422 3,545 12,678 8, Lease business revenue Other lease business revenues Utilities expenses Insurance expenses Repair expenses 74 2,959 1,124 Property management fees 847 1, ,29 Other expenses related to rent business ,321 43,838 9,163 7,13 Income (loss) from lease business 1, ,71 57,486 28,465 NOI 13,36 19,539 66,65 35,595 Depreciation *1 All amounts below 1, are truncated. Not disclosed because approval not obtained from the end tenant 83,567 77,578

49 8. Main Tenants End-tenant 1 2 SoftBank Corp. Hulic Co., Ltd. Property name Ikebukuro Network Center Tabata Network Center Hiroshima Network Center Atsuta Network Center Nagano Network Center Chiba Network Center Sapporo Network Center Keihanna Network Center 48 Leased area (m2)*1 71, Hulic Kudan Building (Land) Oimachi Redevelopment Building (#2) Oimachi Redevelopment Building (#1) Leaf Minatomirai (Land)*4 33, Trust Garden Yoganomori Trust Garden Sakurashinmachi Trust Garden Suginami Miyamae 13,654. Yokohama Yamashitacho Building Area ratio (%)*1 Expiration date*1 Form of agreement*1 November 5, 227 (Ikebukuro Network Center, Hiroshima Network Center) November 5, 222 (Tabata Network Center, Atsuta Network Center, Keihanna 33.2 Fixed-term building lease agreement Network Center) November 5, 217 (Nagano Network Center) March 27, 228 (Chiba Network Center) May 22, 228 (Sapporo Network Center) 15.8 February 6, 263 Fixed-term business-use land lease agreement February 6, 219 Ordinary building lease agreement September 27, 217 Ordinary building lease agreement March 29, 246 Fixed-term business-use land lease agreement with special provisions for building transfer 6.3 January 24, 228 Ordinary building lease agreement 8, *3 3 Trust Garden Co., Ltd. 4 Barneys Japan 5 Benesse Style Care Co., Ltd. Aria Matsubara 5, September 3, 23 6 Mitsui Fudosan Co., Ltd. Gate City Ohsaki 3, January 5, J Trust Co., Ltd. Toranomon First Garden 3, November 3, Nippon Paper Industries Co., Ltd. Ochanomizu Sola City 2, *3 9 WELFARE AND MEDICAL SERVICE AGENCY Hulic Kamiyacho Building 2, March 31, 218 Ordinary building lease agreement 1 Oki Electric Industry Co., Ltd. Toranomon First Garden 2, February 28, 217 Ordinary building lease agreement *1 Information is as of the end of the 5th fiscal period (August 31, 216). Ratios of total leased area are rounded to the 1st decimal place. *3 Not disclosed because approval not obtained from the end tenant *4 The lease is in the name of Mizuho Trust & Banking Co., Ltd., but the trust beneficiary of the trust, i.e., the leasehold that is the trust asset on which the lease is based, is Hulic Co., Ltd. *3 Ordinary building lease agreement Ordinary building lease agreement*6 Ordinary building lease agreement Fixed-term building lease agreement

50 9. Breakdown of Unitholders 1 Number of Investment Units held by Unitholder Type *1 Individuals Financial institutions Major banks Regional banks Trust banks Life insurers Non-life insurers Shinkin banks Others Other domestic corporations Foreign investors Securities companies Total ２ ３ End of 4th Fiscal Period End of 5th Fiscal Period Change (Feb. 29, 216) (Aug. 31, 216) Ratio Ratio Ratio No. of Units No. of Units No. of Units (%) (%) (%) 46,72 6.% 6, % 13,879.4% 448, % 529, % 8, %.%.%.% 21,26 2.7% 39, % 18, % 48,9 52.4% 459, % 51,59-4.3% 8,146 1.% 8,472.9% %.%.%.% 7,83 1.% 15, % 7,518.6% 2,674.3% 5,567.6% 2,893.2% 115, % 134, % 19, % 158,1 12,44 781, 2.2% 1.6% 1.% 224,636 7,91 957, 23.5%.8% 1.% 66,635-4,53 176, 3.2% -.8% - Number of Unitholders by Type *1 Individuals Financial institutions Major banks Regional banks Trust banks Life insurers Non-life insurers Shinkin banks Others Other domestic corporations Foreign investors Securities companies Total End of 4th Fiscal Period End of 5th Fiscal Period (Feb. 29, 216) (Aug. 31, 216) No. of Ratio No. of Ratio Unitholders (%) Unitholders (%) 5,5 93.6% 7, % 7 1.2% %.%.% 18.3% 25.3% 9.2% 11.1% 5.1% 5.1%.%.% 25.4% 36.5% 13.2% 22.3% 49 Largest Top 1 Unitholders Name Number of Units Held Ratio of Total Units *3 1 Japan Trustee Services Bank, Ltd. (Trust account) 2, % 2 Trust & Custody Services Bank, Ltd. (Securities investment trust account) 123, % 3 Hulic Co., Ltd. 111, % 4 The Master Trust Bank of Japan, Ltd. (Trust account) 86,166 9.% 5 NOMURA BANK (LUXEMBOURG) S.A. 73, % 6 The Nomura Trust and Banking Co., Ltd. (Investment accounts) 37, % 7 STATE STREET BANK AND TRUST COMPANY 17, % 8 STATE STREET BANK AND TRUST COMPANY , % 9 STATE STREET BANK AND TRUST COMPANY 551 9,47.98% 1 RBC IST 15 PCT LENDING ACCOUNT-CLIENT ACCOUNT 7,895.82% Change No. of Unitholders 1, Ratio (%).1%.1%.%.%.%.%.%.%.1% % % 6.% , %.2% 1.% ,897 2.%.2% 1.% ,22 -.1%.% - *1 Ratios are rounded to the 2nd decimal place. Data is based on the unitholder registry as of the end of the 4th fiscal period (February 29, 216) and the end of the 5th fiscal period (August 31, 216.) *3 Ratio are truncated after 2 decimal places.

51 1. Hulic Reit s Basic Missions and Portfolio Composition Policy 1 5 Basic Missions (1) Maximizing Unitholder Value in the Medium to Long Term Our aim at Hulic Reit, Inc. is to make a contribution that benefits unitholders, tenants, and all other stakeholders. To this end, we are working to maximize unitholder value by maintaining and increasing income in the medium to long term and achieving growth in the size and value of our managed assets. (2) Sharing the Corporate Philosophy of Our Sponsor In common with our sponsor, Hulic Co., Ltd., we subscribe to a corporate philosophy that calls for the following: Total commitment to our customers and the community. Creating productive environments. Creating amenity. Promoting peace of mind. 2 Portfolio Composition Policy Office properties Retail properties Hulic Reit has identified the Tokyo commercial property market as a target for focused investment. This area, consisting of assets in commercial real estate, is one where Hulic has a strong operational track record and highly developed expertise. This area accounts for about 8%-9% of our portfolio. Private nursing homes Hotels Initiatives designed to achieve high levels at amenity and security in the society of the future are expected to expand infrastructural demand. Drawing on the expertise built up by Hulic in tenant management and other relevant areas, we allocate about 1%-2% of our investment portfolio to next generation assets, where we believe risk can be managed appropriately and attractive revenues secured. About Portfolio s About Portfolio s Network centers

52 11. Focused Investment in Tokyo Commercial Properties １ 51 Investment Policy Hulic Reit focuses on Tokyo Commercial Properties for which its sponsor Hulic offers extensive expertise and experience. 8%-9% of its portfolio consists of this asset class. 1. Tokyo s 23 wards 2. Less than 5-minute walk from nearest station (in principle) ２ 1. Tokyo and suburbs 2. Less than 5-minute walk from nearest station or located in area with high retail concentration (in principle) Rigorous Focus on Location: Superior Nature of Great Location (1) Portfolio (Office Properties) Walking Distance from Nearest Train Station*1 Within over 3 to 5 minutes 1.5% Over 5 minutes 2.7% (2) Tenant Leasing Needs Office tenants tend to prefer buildings that are conveniently located. By Area*1 Other Tokyo 23 wards 5.7% st 2nd 3rd Within over 1 to 3 minutes 6.3% Within 1 minute 89.5% Within 1 minute 89.5% Six central Tokyo wards 94.3% Six central Tokyo wards 94.3% 1st: Desire to expand business or workforce or establish new department 2nd: Desire to move to building in convenient location 3rd: Desire to move to building with better seismic design 4th 4th: Desire to move to building with larger space per floor 5th 5th: Desire to move to building with higher-grade facilities 6th 6th: Desire to move to building with lower rents 7th 8th 7th: Desire to move to building with better security 8th: Desire to move to building with better disaster preparedness or emergency backup system Source: Mori Building 215 Survey on Office Needs in Tokyo s 23 Wards *1 Ratio based on acquisition price in the portfolio after the 3rd public offering. Refers to Chiyoda, Chuo, Minato, Shinjuku, Shibuya and Shinagawa wards.

53 12. Investments in Next Generation Assets １ 52 Investment Policy By Term of Lease *1 Invest in assets for which strong future demand is expected given increasing needs in society Only facilities with a single tenant on long-term lease agreement Carefully evaluate operational capabilities of tenant, in addition to due diligence on the tenant s business and finances 1 years-under 15 yaers 2.4% 15 years-under 2 years 19.3% Over 15 years 97.6% 2 years and over 78.4% ２ Private Nursing Homes ３ Private nursing homes with lease usage rights that provide services to seniors in need of nursing care Initial lease term of at least 2 years per the guidelines of the MHLW Invest in assets with high-end lump-sum payments and monthly fees to avoid risk of change in nursing care insurance payout (Reference) Structure of Private Nursing Home Cash Flow Entrance fee Resident Insurer (local municipality) Monthly usage fee Nursing care insurance payout Nursing care operator (tenant) Long-term lease contract ４ Company B & C network center Company B & C network center Communication network among Japan s prefectures Relay station connected to telecom network of tenant A facility that acts as a node for the network centers of each telecom operator Leased by the SoftBank Group Bridging between the long-distance Company and regional A network communication center networks Intercompany communication network Link to mobile communication network Mobile communication network Regional communication networks (subscriber networks) NTT West regional communication network NTT East regional communication network Relay station Hotels Long-distance communication networks (broadcast networks) Rental fee Hulic Reit (lessor) Network Centers Relay station Exchange station Exchange station Exchange station Exchange station Subscrib ers Data center Subscrib ers Data center *1 Ratio based on leased area in the portfolio after the 3rd public offering. Ministry of Health, Labour and Welfare Guidelines for the Implementation of Private Nursing Home Facility Operation Standards Facilities where tourism and business demand are expected due to good transportation access or proximity to major domestic tourist attractions Assets where demand growth are expected from rising inbound tourist numbers, in addition to stable tourism and business demand supported by the 22 Tokyo Olympics and government tourism policies We will devote resources to hotels as one of three growth industries (seniors, tourism, environment) targeted by sponsor Hulic. Our knowhow and experience in tenant management can be put to good use.

54 13. Collaboration with the Hulic Group 1 53 Main Support Received from Sponsor (Asset Circulation Model) (Diagram) Properties Ownership Older properties Properties Ownership Purchase 1 Asset Circulation Model Properties for reconstruction / development Purchase 4 Older properties Reconstruction New investments M&A Domains closely related to leasing Development PPP CRE, etc. Ownership Properties Purchase 2 3 Market Purchase Properties About 3K businesses Ownership Leasing (Core Business) 1 3K businesses Seniors Tourism The environment Approach (extract) Seniors Develop new businesses in addition to existing businesses focused on nursing homes (1) Health and medical care, (2) Purpose in life, and (3) Inheritance Tourism Examine broader opportunities as they relate to real estate (1) Hotel operations, and (2) Real estate investment in hotels, luxury inns, etc. The environment Achieve the highest level of environmental technologies and commercialize them (1) Extension of the life of buildings, (2) Natural ventilation and natural light collection systems, and (3) Mega solar projects (1) Re-development support (Diagram ➍) The Asset Manager requests review/proposals for re-development plan of Sponsor before requesting to third parties. If the Sponsor accepts the redevelopment project, the Asset Manager has preferential negotiation rights for the redeveloped property. (2) Provision of warehousing function (Diagram ➌) The Asset Manager has the right to ask the Sponsor to take on temporary ownership (warehousing) of relevant real estate property or other assets with the understanding that the asset will subsequently be transferred to Hulic Reit. (3) Preferential negotiation rights (Diagram ➊) The Sponsor provides information to the Asset Manager whenever properties are sold by the Sponsor s group and the Asset Manager has preferential negotiation rights over other third parties. (4) Provision of sales information on properties owned by third parties (Diagram ➋) The Sponsor can provide information immediately to the Asset Manager as long as prior approval is obtained from the owner and other stakeholders.

55 14. Key Achievements and Plans of the Hulic Group １ 54 Reconstruction/Development*1 Achievements Plans Principal Use Classification Completion Property name Office properties Reconstruction 29 Hulic Hachioji Building 21 Hulic Ryogoku Building Toranomon First Garden Principal Use Classification Completion Office properties Reconstruction 218 Development 218 Nihonbashi 2 Chome Redevelopment Project 219 Akihabara Development Reconstruction 217 Kamata Project Development 217 Mejiro Project Acquired Hulic Kojimachi Building 211 Hulic Ginza Sukiyabashi Building Retail properties Hulic Ogikubo Building 212 Development Itabashi Project Hulic Komagome Building Commercial Development Project near Omori Station 214 Hulic Shinjuku Building Kyoto Shijo-dori Development Project 215 Hulic Asakusabashi Edo-dori Shimbashi 2 Chome Commercial Development 213 Hulic Asakusabashi Building 213 Ochanomizu Sola City 215 Hulic Shibuya Koen-dori Building Acquired Shinagawa season terrace Hulic Toranomon Building Reconstruction 218 Tokyo Metro Roppongi 7 Chome Project Retail property, Hotel Development 218 Hulic Yurakucho 2 Chome Development Hotels Development 216 <Tentative> Ginza 7 Chome Sotetsu Hotel (Sotetsu Fresa Inn Ginza 7 Chome (Land) ) Acquired Acquired 29 Sendai First Tower (commercial wing, atrium) 217 Roppongi 3 Chome Soutetsu Hotel Development Project 21 Kisarazu Home Center 218 Tsukiji 3 Chome Development 212 Hulic Shibuya No.2 Building 215 Gracia Chofu Ryokan Development 218 Kawaguchiko Fufu Development Project Pay nursing homes Reconstruction 217 Chofu Project Development 217 Nippon Sport Science University Fukazawa Development Project Hulic Shimura sakanoue Hotel Reconstruction 212 Hulic Kaminarimon Building Pay nursing homes Reconstruction 25 Aria Matsubara 21 Iris Garden Kitauawa 211 Granda Omori Sannou 212 Aristage Kyodo 213 Sunny Life Funabashi Tamagawa Denenchohu Development Project Acquired Ossuary Granda Gakugeidaigaku Aria Yoyogiuehara Hospitalment Musashino 214 Charm Suite Shakujii-park Sunny Life Tokyo Shinjuku Hospital Hulic Shibuya Inokashira-dori Building Hulic Head Office Building Nagatacho Hokkaido Square Retail properties Property name Fuchu Project 215 Charm Suite Shinjuku Toyama 216 Hospitalment Itabashi Tokiwadai Development 216 Trust Garden Tokiwamatsu Development 215 Shin-Sapporo Houwa Hospital Acquired *1 Hulic Reit has no plans to acquire any the properties indicated above (except those that have already been acquired) as of the date this document was prepared. Excluding cases where main use is residential. Development 218 Inamuragasaki Development Project 218 Ichigyo-in Development Project

56 14. Key Achievements and Plans of the Hulic Group ２ 55 New Investments*1 Achievements (since 212) Principal Use Year acquired Property name Office properties 212 Hulic Ginza 7 Chome Building 213 Rapiros Roppongi Acquired Hulic Kamiyacho Building Acquired 215 Hulic Ginza 1 Chome Building Hulic Nihonbashihoncho 1 Chome Building 3 office properties in Hatchobori area Principal Use Year acquired Property name Principal Use Year acquired Retail properties 213 Hulic Shinjuku 3 Chome Building Acquired Victoria Wardrobe Jimbocho Pay nursing homes 212 Hulic Jingumae Building 214 Hulic Ginza Wall Building Daiwa Yoyogi No.2 Building Primegate Iidabashi Acquired Trust Garden Sakurashinmachi Acquired Trust Garden Suginami Miyamae Acquired Acquired 213 Esperal Joto Tsurumi Fuga Toyosu Senior Residence Yokohama Yamashitacho Building Acquired 215 Charm Suite Nishinomiyahama 216 Asakusa Carepark Soyokaze 212 Lien Reve Yakumo Acquired G1 Tokyu Hands Ikebukuro Ikebukuro Network Center Acquired Ikebukuro GIGO Tabata Network Center Acquired Udagawacho Sigma No. 5 Building Hiroshima Network Center Acquired WINS Asakusa Building Atsuta Network Center Acquired Hulic Shibuya 1 Chome Building Asakusa Park Hall Building Nagano Network Center Acquired Toyosu Prime Square and other 7 properties Hulic Asakusa 1 Chome Chiba Network Center Acquired Sapporo Network Center Acquired 214 Keihanna Network Center Acquired 214 Hulic Ginza 2 Chome Building 215 Tokyo Bay Maihama Hotel Primegate Meguro Mita SENJU MILDIX II Ochanomizu S Building Vingt-sept Building Sankyo Meguro Building 216 Trust Garden Yoganomori Hulic Shibuya Udagawacho Building Orchid Square 215 Property name 216 Network centers 213 Hulic Jingumae 5 Chome Building Fuji Building 28 Path Omotesando Yamato Haneda Building Bleu Cinq Point Hotels Tokyo Bay Maihama Hotel Club Resort Hulic Shinkawasaki Building Ginza Towa Building Hulic Shibuya Miyashitakoen Building Sothern Beach Hotel & Resort Okinawa Realack No.1 Building 216 Grand Nikko Tokyo Daiba (Land) 215 Hakone Suishoen 216 ATAMI KAIHOUROU Ichigaya MS Building Ginza a Building Kyobashi South Building Hayama SCAPES THE SUITE Ryokans *1 Hulic Reit has no plans to acquire any the properties indicated above (except those that have already been acquired) as of the date this document was prepared. Excluding cases where main use is residential. Atami Fufu

57 15. Operating Structure that Ensures Unitholder Returns 1 Align Unitholders Interests with Those of Hulic Group (1) (2) Same boat investment (1) Co-ownership of certain properties with sponsor (1) (2) Management fee system of the Asset Manager (3) (4) Hulic holds approximately 11.5% of Hulic Reit s issued units. Under its sponsor support agreement, Hulic made the following representations to Hulic Management Co., Ltd. in respect of investment units issued by Hulic Reit. Hulic will consider in good faith acquiring part of any new investment units issued by Hulic Reit Continual holding of Hulic Reit s investment units It is Hulic Reit s policy to consider co-ownership with Hulic where necessary in view of the size and individual characteristics of the property. <Examples> Ochanomizu Sola City (quasi-co-ownership interest of approx. 21.7%) Hulic Kamiyacho Building (quasi-co-ownership interest of approx. 7.%) Hulic Toranomon Building (quasi-co-ownership interest of approx. 7.%) Sotetsu Fresa Inn Ginza 7 Chome (Land) (co-ownership interest of 5%) (1) Decision Making Procedures of Asset Manager for Related-Party Transactions Draft proposal by the Investment & Asset Management Department Approval by Compliance Officer Instructions to withdraw or change its content Deliberation and decision by the Compliance Committee The attendance and agreement of the outside committee members is a condition for the passing of the resolution Investment & Asset Management Department submits a draft plan to the Investment Committee Instructions to withdraw or change its content Deliberation and resolution by the Investment Committee Transactions not stipulated in Article 21-2 of the Act on Investment Trusts and Investment Corporations Report to the Board of Directors and Hulic Reit Management fee I: The total value of assets at end of the immediately previous fiscal period.5% (maximum %) Management fee II: Cash distribution per investment unit (DPU) prior to deduction of management fee II operating income before deduction of management fee II.4% (maximum %) Acquisition fee: Acquisition price 1.% (maximum %)* Transfer fee: Transfer price 1.% (maximum %)* * In case of a related-party transaction: Transfer price.5% (maximum %) Remuneration system for employees and officers of the Asset Manager 2 The Asset Manager has introduced an incentive pay system whereby part of the remuneration of executive officers is linked to the distribution per unit. 56 Transactions stipulated in Article 21-2 of the Act on Investment Trusts and Investment Corporations Report to the Board of Directors If not approved, instructions issued to cancel or change its content by the Board of Directors Pre-approval of Hulic Reit granted based on approval of the it s Board of Directors (1) (2) Report of results made to the Board of Directors The asset management committee appoints outside professionals as members of both the Investment Committee and Compliance Committee For resolutions on the acquisition of an asset, approval requires the consent of a majority of the members in attendance, including outside professionals, from the Investment Committee and Compliance Committee

58 16. Structure of Hulic Reit 1 57 Structure Custodian Mizuho Trust & Banking Co., Ltd. ➋ Transfer Agent Mizuho Trust & Banking Co., Ltd. ➌ General Administrator Mizuho Trust & Banking Co., Ltd. ➍ Administrative Agent for Investment Corporation Bonds Mizuho Bank, Ltd. ➎ Specified Related Corporation Sponsor and parent company of the Asset Manager Hulic Co., Ltd. Investment Corporation Hulic Reit, Inc. General Meeting of Unitholders Board of Directors Executive Officer: Eiji Tokita Supervisory Officer: Kunio Shimada Supervisory Officer: Shigeru Sugimoto Independent Auditor Ernst & Young ShinNihon LLC ➏ ➏ ➊ Asset management agreement ➋ Asset custody agreement ➌ Transfer agency agreement ➍ General administration agreement ➎ Fiscal agency agreement ➏ Sponsor support agreement ➊ Asset Manager Hulic Reit Management Co., Ltd. 2 Overview of Asset Manager Name Hulic Reit Management Co., Ltd. Capital 2 million Shareholder Hulic Co., Ltd. (1%) President and CEO Eiji Tokita Registrations, licenses, etc. Real Estate Brokerage Business: Governor of Tokyo (1) Registration No Trading Agency Etc. License: Minister of Land, Infrastructure and Transport License No. 76 Financial Instruments Business: Registration Director of the Kanto Local Finance Bureau, No. 2734

59 17. Sustainability Initiatives 1 Sustainability Policy 2 Believing that consideration for the Environment, Society and Governance leads to the maximization of medium- to long-term unitholder value, Hulic Reit enacted its Sustainability Policy on March 216.*1 58 Improvement of Energy Efficiency An air-conditioning upgrade now underway will lead to greater efficiency Expected electricity use reduction Sustainability Policy (Excerpt) Hulic Kandabashi Building Trust Garden Sakurashinmachi Approx. 41 % Approx. 31 % Compliance and Risk Laws and regulations will be respected Sustainability to be considered by assessment of risks to natural Management environment, risks posed by harmful substances Prevention of Global Improvement of energy efficiency Promotion of CO2 emission reduction Warming Recycling-Oriented Promotion of the three Rs: Reduce, reuse, and recycle Society Environmental Continual improvement in energy savings and CO2 emission Management System reductions Collaboration with Improvement of coordination with stakeholders through dialog Contribution to sustainable development of local communities Stakeholders 3 Participation in GRESB Assessment In FY216, first participation in GRESB assessment GRESB is a benchmark for assessing real estate companies and management bodies from the viewpoint of environmental, social, and governance (ESG) sustainability. Major American, European, and Asian institutional investors use GRESB results in selecting investments. *1 Enacted by the Asset Manager Ratios calculated by asset management company based on manufacturer s catalogue. 4 Assets Awarded Environmental Certifications Top 5-star rank obtained in FY215 DBJ Green Building certification Ochanomizu Sola City Main environmental capabilities Solar power generation equipment LED lighting in all leased offices Use of subway seep water Greening of ground-level open spaces and rooftop areas Emergency generator supplies Emergency supply warehouse in place Hulic Toranomon Building Main environmental capabilities Natural ventilation system Natural lighting equipment Reuse of rainwater Rooftop greening Emergency generator supplies Minato-ku emergency supply warehouse