Financial Briefing for the 31 st Fiscal Period ended August 31, October 17, 2017 Prepared by ORIX Asset Management Corporation

Transcription

1 Financial Briefing for the 31 st Fiscal Period ended August 31, 2017 October 17, 2017 Prepared by ORIX Asset Management Corporation

2 Table of Contents 1 Our Management Philosophy Appendix Our Management Philosophy 2 Financial Highlights 28 Key Takeaways Key Takeaways 3 Performance Results Performance Highlights 5 Stable Growth of DPU 6 Initiatives for DPU Growth 7 Driving Growth of Unitholder Value 8 Growth Strategy Growth Responding to Environmental Changes 10 Overview of Public Offerings 33 New Acquisition 11 Portfolio Status 34 Sponsor Pipeline and Acquisition Track Record from Sponsor 12 Trend of Portfolio Growth 35 ORIX Group s Properties 13 Portfolio Summary 36 Internal Growth Strategy Portfolio Map 37 Internal Growth Utilized by Direct PM : Occupancy Rate and Tenant Turnover (Assumption of DPU forecasts) Portfolio Data 38 Overview of Appraisal Value 39 Internal Growth : Initiatives over Tenants Move-Out Risk 16 Appraisal Value List Internal Growth Utilized by Direct PM : Rent Renewals of Existing Tenants (Assumption of DPU forecasts) Appraisal Value List Status of Investment Units 42 Examples of Internal Growth 18 Sustainability Initiatives Financial Strategy Sustainability Initiatives Financial Strategy 21 Transactions with Sponsors and Compliance System 45 Financial Data 22 Organization of ORIX Asset Management Corporation 46 Future Management Strategy Terminology Management Tactics under Current Environment 24 Our Growth Strategy 25 Improvement of Portfolio Quality Comparison between Actual Result and Previous Forecast for FP31 and between Previous and New Forecast for FP32-1- Comparison between Actual Result and Previous Forecast for FP31 and between Previous and New Forecast for FP32-2- Period-Over-Period Comparison of Actual Result for FP31 and Forecasts for FP32 and for FP33-1- Period-Over-Period Comparison of Actual Result for FP31 and Forecasts for FP32 and for FP

3 Our Management Philosophy 2 We aim to create unitholder value by improving profitability and stability of our portfolio, reducing funding costs and increasing financial stability External Growth Strategy Broad investment opportunities as a diversified REIT Ability to replace assets Utilizing ORIX synergy Asset Debt Financial Strategy Reducing financing costs Improving financial stability Appropriate cash management Enhancing portfolio profitability and stability Equity Internal Growth Strategy Flexible leasing options distinctive to a diversified REIT (Note) Direct property management Utilizing ORIX synergy Sustainable growth of unitholder value Note: Ability to seek additional rent growth opportunities by altering use of properties. e.g. attracting retail tenants to office space.

4 Key Takeaways External growth Concerns Scarce quality properties Counter-measures against the concerns Selective investments leveraging ORIX Group s strength Capturing various growth drivers Specific initiatives 3 Acquired a highly scarce office with close proximity from Roppongi station from Sponsor CENTRUM ROPPONGI P11 Diversified growth opportunities responding to environmental changes P10 Internal growth Risk of tenant move-out due to significant supply of new offices Filling vacancies after major tenant move-out and driving to improve leasing conditions Mitigating impacts of major tenant move-out by expanding asset size and tenant diversification Actual results in Internal Growth utilizing direct property management P15-18 Leasing status of Seafort Square Center Building and ARK Hills South Tower P16 Diversification of tenants P16 Financial strategy Risk of future interest rate increase Improving financial stability Securing borrowing capacity for agile property acquisition Promoting fixed interest expense, extending and diversifing maturity P21-22 Expanding commitment line and extending duration P22 Trends on LTV and borrowing capacity P21

5 Performance Results

6 Asset Performance Highlights External growth - Selectively investing in properties from robust pipeline that can leverage our strengths - Selectively investing in a property with scarcity value and experienced operating track record by ORIX Group Acquired a middle-sized office CENTRUM ROPPONGI which is close from Roppongi station via sponser at 12.4 billion yen (See P11) Further enhanced portfolio stability with AUM now over 630 billion yen (See P10) Internal growth - Increasing occupancy rate and improving leasing conditions - Maintained office occupancy rate over 98%. (See P15) Improved rental conditions by replacing tenants and renewing rents in both offices and retail facilities. (See P15-18) Debt Reduce financing costs and increase financial stability Flexible borrowing capacity utilization and improving financial stability Utilized borrowing capacity to swiftly acquire a mid-size office with scarcity value and close proximity from Roppongi station (See P21) Expanded commitment line from 33.5 billion yen to 40.5 billion yen. In contrast to the existing commitment line of max.1 year maturity after drawdown, we successfully secured a new 10 billion yen commitment line with a max. 8-year maturity after drawdown. (See P22) Equity Execution of various strategies for sustainable growth of unitholder value 5 Key Performance Indicators AUM (Acquisition Price) 622, ,441 12, ,841 Number of properties NOI yield 5.1% 5.1% 3.7% 5.1% Yield after depreciation 4.1% 4.1% 3.2% 4.1% Unrealized gain/loss 94,591 94, ,697 Balance of interest-bearing liabilities End of FP30 (Feb. 2017) Previous financial announcement (Apr.14, 2017) Acquisition of "CENTRUM ROPPONGI" (Unit:million yen) End of FP31 (Aug. 2017) 295, ,117 12, ,517 LTV based on total assets 46.3% 42.6% 0.9% 43.6% DPU FP 31 (Aug. 2017) FP 32 (Feb. 2018) FP 33 (Aug. 2018) End of Feb Previous financial End of Aug (FP30) announcement (FP31) (Apr.14, 2017) 1,087 yen 1,024 yen 1,024 yen 2,745 million yen in total 2,745 million yen in total 2,745 million yen in total End of Feb (FP30) Previous financial announcement (Apr. 14, 2017) 3,040 yen 3,080 yen - Internal Reserves per Unit (Note1) Previous financial announcement (Apr.14, 2017) As of this financial announcement (Oct. 17, 2017) 3,230 yen(actual result) (+190 yen) 3,160 yen(forecast) (+80 yen) 3,160 yen(forecast) NAV per Unit in Consideration of Internal Reserves (Note2) End of Aug (FP31) 156,539 yen 156,947 yen 162,210 yen Note 1: Internal reserves per unit is calculated by dividing internal reserves at each given time by the number of investment units outstanding at each given time. The figures are rounded down to the nearest whole number. Note 2: NAV per unit in consideration of internal reserves refers to the amount calculated by the following formula at each given time. (The sum of unitholders capital + unrealized gain/loss + internal reserves) / number of investment units outstanding

7 3,300 3,252 3, ,100 3,000 2,900 2,800 2,700 2,600 2,500 2,400 DPU Stable Growth of DPU Increase in adjusted DPU (after deducting property-related tax) by 3.1% from forecast at DPU Trend (Note1) DPU (Yen) previous financial announcement 2,717 2,727 FP26 (Feb. 2015) FP33 (Aug. 2018) 2, FP27 (Aug. 2015) Property-related tax to be expensed per unit (estimate) Amount related to capital gains (Note2) 2,926 Previous financial announcement (Apr. 14, 2017) 15 yen 2, FP28 (Feb. 2016) As of this financial announcement (Oct. 17, 2017) 3,160 yen Adjusted DPU forecast 3,065 yen 3,160 yen +95 yen (+3.1%) Change and factor External growth:contribution from acquisition of CENTRUM ROPPONGI (58 yen) FP32 (Feb. 2018) 3,080 yen 3,160 yen +80 yen (+2.6%) Intenal growth:increase of rental revenue due to leasing progression and improved leasing conditions (22 yen) (Note 3) 3,000 FP29 (Aug. 2016) P ,205 FP30 (Feb. 2017) Period-over-period comparison of actual result for FP31 and forecasts for FP32 and for FP33 2,970 P29-30 Comparison between actual result and previous forecast 3,040 Forecast of Forecast of 1 y ear ago 6 months ago FP31 (Aug. 2017) 3,230 Actual P29-30 Comparison between previous and new forecast 3,080 Forecast of 6 months FP32 (Feb. 2018) External growth:contribution from acquisition of CENTRUM ROPPONGI (50 yen) 3,160 3,160 New forecast Intenal growth:increase of rental revenue due to leasing progression and improving leasing conditions (45 yen) ago New forecast FP33 (Aug. 2018) 6 Main initiatives for further DPU growth External growth strategy Internal growth strategy Financial strategy Agile property acquisition by using acquisition capacity Annual Free Cash Flow:Approx. 5 bil. yen Improving leasing conditions including rent increase Borrowing Capacity up to LTV50%:84.8 bil. yen Reduction of average funding costs through refinancing Note 1 : Forecast of 1 year ago refers to the DPU forecast as of the financial announcement in the second last fiscal periods and Forecast of 6 months ago refers to DPU forecasts as of the financial announcement for the last fiscal period. Note 2 : Amount related to capital gains is calculated by deducting both internal reserves and prepayment fees from capital gains from property dispositions and then by dividing the said calculation results by the number of investment units outstanding. The figures are rounded down to the nearest whole number. For FP 29 (Aug. 2016), there are no amount related to capital gains in the DPU, since internal reserves for the period exceeded capital gains from dispositions. Note 3: Property-related tax to be expensed per unit (estimated) of approx. 15 yen is calculated by dividing the total of property-related tax to be expensed for FP33 (Aug. 2018) as results of SUNROUTE PLAZA TOKYO acquired and HOTEL LiVEMAX NAGOYA SAKAE-EAST to be acquired by the number of investment units outstanding after the PO in Mar

8 Initiatives for DPU Growth 7 Aim for mid-to long-term stable growth of DPU by leveraging on broad variety of strategies An image of each initiative contributing to DPU growth Note: The following figures represent a hypothetical impact from each initiative effecting DPU according to the financial performance assumed by OAM based on certain assumptions. We, however, do not provide any guarantee with respect to the probability, the amount and the timing of such impact. In particular, we can not guarantee that the new acquisitions will be completed with the terms below, since the terms are subject to changes due to market conditions. DPU may also change due to other factors not listed below. Impacts on portfolio and financial position after the end of FP31 (Aug. 2017) (simulation). Impacts of external growth opportunities by utilizing diverse funding sources (simulation). Rate of change in rents of existing offices:0.5% Approx. 20 yen per unit Variable rate of average funding costs:0.02% pt. Approx. 10 yen per unit Property acquisition by utilizing FCF of 5 bil. yen Approx. 35 yen per unit Property acquisition by utilizing Borrowing Capacity of 10 bil. yen. Approx. 50 yen per unit Impact (Note1) on DPU by multiplying change in forecasted total office rental revenue of approx. 10 bil. yen by rent fluctuation rate of 0.5%. This 0.5% figure is taking into account actual results of change in rents attributable to tenants turnovers/rent renewals in offices from FP28 (Feb. 2016) to FP31 (Aug. 2017). Impact on DPU attributable to change in financingrelated cost calculated by multiplying balance of interest-bearing liabilities of bil. yen at the end of FP31 (Aug. 2017) with forecasted variable rate (0.02%) of average funding costs. Impact on DPU from full fiscal period contribution of earnings after deducting AM fees by utilizing 5 bil. yen out of FCF for 1 year and properties acquired at the same level of actual yield after depreciation of approx. 3.8 % in the portfolio from FP28 (Feb. 2016) to FP31 (Aug. 2017). Impact on DPU from full fiscal period contribution of earnings after deducting AM fees and funding costs by utilizing 10 bil. yen equivalent to approx. 1% of LTV based on total assets in borrowing capacity of 84.8 bil. yen at the end of FP31 (Aug. 2017) and properties acquired at the same level with actual yield after depreciation of approx. 3.8% in the portfolio from FP28 (Feb. 2016) to FP31 (Aug. 2017). Note1: Given frequency of the tenant replacements or rent renewals in each asset type, DPU impacts by change in rents of offices which account for approx. 50% of our total rental revenue are shown in the above simulation. Note2: OJR makes assumptions that DPU simulations are based on the total of 2,680,000 investment unit outstanding at the end of FP31 (Aug. 2017).

9 Driving Growth of Unitholder Value 8 Driving growth of unitholder value by diversifying growth opportunities Stable Growth of DPU Increase of NAV per Unit DPU: (Yen) FP31 (Aug. 2017) 3,230 yen NAV per Unit: In consideration of internal reserves (Yen) FP31 (Aug. 2017) 162,210 yen 3,400 3,200 3,000 2,800 2,600 2,400 (Note1) 2,411 2,352 2,479 2,604 2,929 (Note2) 2,717 2,727 2,989 3,000 2,926 (Note2) 3,252 3,230 3,205(Note2) 170, , , , , , , ,670(Note) 110, , , , , , , , ,210 2,200 FP22 (Feb. 2013) FP23 (Aug. 2013) FP24 (Feb. 2014) FP25 (Aug. 2014) FP26 (Feb. 2015) FP27 (Aug. 2015) FP28 (Feb. 2016) FP29 (Aug. 2016) FP30 (Feb. 2017) FP31 (Aug. 2017) 100,000 FP22 (Feb. 2013) FP23 (Aug. 2013) FP24 (Feb. 2014) FP25 (Aug. 2014) FP26 (Feb. 2015) FP27 (Aug. 2015) FP28 (Feb. 2016) FP29 (Aug. 2016) FP30 (Feb. 2017) FP31 (Aug. 2017) Note 1: As of the record date on Feb. 28, 2013 and effective Mar. 1, 2013, OJR conducted a one into fifth investment unit split. The above-mentioned DPU for FP 22 (Feb. 2013) = Actual Distributions for FP 22 (Feb. 2013) / (5*investment units outstanding at the end of Feb (FP 22)). The calculation result is rounded down to the nearest whole number. Note 2:Amounts related to capital gains are excluded in the foregoing figures. Note : As of the record date on Feb. 28, 2013 and effective Mar. 1, 2013, OJR conducted a one into fifth investment unit split. The above-mentioned NAV per unit in consideration of internal reserves as of FP22 (Feb. 2013)= NAV in consideration of internal reserves for the fiscal period / (5* investment units outstanding at the end of Feb (FP 22). The calculation result is rounded down to the nearest whole number. Internal Reserves: (million Yen) 3,000 End of FP22 (Feb. 2013) 68 mil. yen in total 47 yen per unit (Note) FP31 (Aug. 2017) 2,745 mil. yen in total 1,024 yen per unit 2,745 2,745 Capitalization: (bil. Yen) Enhanced Liquidity of Investment Units As of Sep. 29, bil. yen 2,000 1, ,536 1, FP22 (Feb. 2013) FP23 (Aug. 2013) FP24 (Feb. 2014) FP25 (Aug. 2014) FP26 (Feb. 2015) FP27 (Aug. 2015) FP28 (Feb. 2016) FP29 (Aug. 2016) FP30 (Feb. 2017) FP31 (Aug. 2017) Note : As of the record date on Feb. 28, 2013 and effective Mar. 1, 2013, OJR conducted a one into fifth investment unit split. The above-mentioned Internal reserves per unit for FP 22 (Feb. 2013) = Internal reserves for FP 22 (Feb. 2013) / (5* investment units outstanding at the end of Feb (FP 22) ). The calculation results is rounded down to the nearest whole number. 0 Feb Aug Feb Aug Feb Aug Feb Aug Feb Aug. 2017

10 Growth Strategy 2 決算概要及び業績予想

11 External environment Growth Responding to Environmental Changes OJR has successfully implemented and captured various growth opportunities taking in consideration of the external environment and OJR s asset growth and financial stability Enacted on property disposition with the understanding of the market environment and future competitiveness of each properties Inauguration of the 2nd Abe Cabinet in Dec QQE by BOJ in Apr Tokyo chosen to host 2020 Olympic games in Sep Consumption tax increase decision in Oct Implementation of consumption tax increase in Apr Additional monetary easing measures in Oct Nikkei reaches JPY20,000 level in Apr Launched Negative Interest Rate Policy in Jan US presidential election in Nov OJR condition Asset size JPY650bil- Offices Retail facilities Logistics facilities Residential properties Hotels and Others Exceeded JPY 500bil in asset JCR Upgrade in Jun S&P Upgrade in Jul Asset size trend End of Aug JPY600bil- intervillage OH! MAGARI R-Styles Musashi-Kosugi Central Crib Roppongi ORE Ohmiya Building Hamamatsu Act Tower JPY550bil- JPY500bil- GRAN MART Tegata Valor Suzuka Shopping Center Iwatsuki Logistics Center End of Feb Gaien Nishi-dori Building CENTRUM ROPPONGI JPY450bil- CROSS GARDEN KAWASAKI Belle Face Kanazawa Kohrinbo Belle Face Higashijujo Round-Cross Akihabara JPY400bil- Tecc Land Totsuka (Land) End of Feb MGShirokanedai Building ORE Nishiki 2-chome Bldg. DOJIMA PLAZA BLDG. Round-Cross Ginza 2-chome HOTEL KEIHAN SAPPORO ORIX Yodoyabashi Bldg. aune TENJIN SUNROUTE PLAZA TOKYO JPY300bil- JPY350bil- Diversified growth drivers Disposition of property considering market situation aune Yurakucho Profitable and stable retail facility Shibaura Island Bloom Tower Cross Avenue Harajuku SHIBUYA PINE Bldg. JouLe SHIBUYA West Park Tower IKEBUKURO Property near terminals in central Tokyo Note 1:The above line chart shows part of properties acquired by OJR in and after FP23 ended August Note 2: Trend of asset size refers to the total of acquisition prices as of the end of each fiscal period. aune Ikebukuro PRIME SQUARE HIROSE-DORI Lately-built office in convenient locations in major cities Belle Face Miyamachi Belle Face Bansui-street ARK Hills South Tower High class office located in central Tokyo Round-Cross Kamata VIA INN SHINSAIBASHI BLDG. Aoyama Suncrest Building (Additional Acquisition) Kita Aoyama Building TAKANAWA DUPLEX C s The Kitahama PLAZA Nihonbashi East Park Axis Nishi Azabu Stage Building Hotel and serviced apartment Hotel Nikko Himeji Toyo MK Building

12 New Acquisition An office located close to stations in Roppongi area where supply of middle-sized offices are limited CENTRUM ROPPONGI 11 Location features Total 28% 12% Acquisition price Appraisal value NOI yield 3.7% Yield after depreciation 3.2% Occupancy rate 100% 17% Type Address Land space Building space Construction 11% 12,400 million yen 12,600 million yen Office Minato-ku, Tokyo 1, m2 6, m2 Completion May 2009 Steel-reinforced concrete flat roof, 6 floors with 2 underground floor Located in a a highly convenient area within approx. 2-minute walk from Roppongi Station on the Tokyo Metro Hibiya Line and the Toei Oedo Line, in addition to Nogizaka Station on the Tokyo Metro Chiyoda Line and Roppongi-itchome Station on the Tokyo Metro Namboku Line available for use. The property commands scarcity value since it is relatively new, standing in an area where supply of middle-sized office buildings is especially limited among the major five wards of Tokyo. The property stands adjacent to quality residential areas such as Akasaka, Azabu and Aoyama. It has strong appeal to IT-related companies and foreign companies with a number of workers who are highly conscious of work-life balance and seek offices close to home. Needs from mass media/press-related companies are also strong as many broadcasting stations are located in this area. Rentable Space of New Supply by Grades (past 10 years) CENTRUM ROPPONGI : Grade B 19% Grade B : Offices in Tokto 23 wards with over 200 tsubo of standard floor space, between 2,000 and 7,000 tsubo of building space, and that comply with new quakeresistance standards. Total 15% 9% 6% Roppongi Akasaka Kamiya-cho Area 66% 5 Central Tokyo Wards (Chiyoda Chuo Minato Shinjuku Shibuya) Grade A Grade A - Grade B Under Grade B Prepared by OAM based on data from surveys conducted by CBRE Inc. 60% Tenant features Office floor tenants are composed of manufacturers, IT company, a mail-order business operator and visual creator. A convenience store as well as a restaurant and the other are housed on the lower floors to enhance convenience for office workers. Industry-classified Office Demand Others 8% Financial 6% Education, medical and public agencies 6% Trend of Average assumed achievable rent of grade B offices in Roppongi area and Vacancy rate /4Q 2008/4Q 2009/4Q 2010/4Q 2011/4Q 2012/4Q 2013/4Q 2014/4Q 2015/4Q 2016/4Q Reference : Data from CBRE Inc. Servies 7% Manufacturing 13% Average assumed achievable rent (left axis) (Indexed on a quarterly basis by setting the figure for 2007/1Q as 100) Roppongi Akasaka Aoyama Area Information, communications and IT 24% Mass media 19% Vacancy rate (right axis) Retail (wholesaler and retailer) 17% Prepared by OAM based on industry-classified aggregate data of contracted space by area from 2008 to 2012 surveyed by Sanko Estate Co., Ltd. 2017/2Q vacancy rate 2.4% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0%

13 Sponsor Pipeline and Acquisition Track Record from Sponsor 12 Driving external growth by utilizing ORIX Synergy ORIX Group s Real Estate Segment Assets (Note) based on book value as of Jun. 30, 2017 Rental Property Assets by Type and Operating assets etc. Rental Real Estate by Region (bil.yen) 250 Under development Under lease Rental real estate bil.yen bil.yen (bil.yen) 250 Under development Under lease Office Buildings Commercial Facilities 34.6 Rental Condos 20.0 Logistics Centers Others Operating Facilities Others 50 0 Tokyo 22.1 Kanto excl. Tokyo Osaka 8.0 Kansai excl. Osaka 29.2 Nagoya 11.5 Sapporo Sendai Fukuoka 31.9 Others Note: ORIX Group s real estate segment assets is prepared independently by OAM based on Consolidated Financial Results Supplementary Information for the Three-month Ended June 30, 2017 released by ORIX Corporation on July 31, The definitions of Type and Region are based on those of ORIX Corporation. OJR Track Record in Asset Acquisition from ORIX Group Property acquisition totaled billion yen in and after FP23 (Aug. 2013) during 9 consecutive fiscal period public offerings. Properties acquired from Sponsor account for approximately 88 % of the total properties acquired by OJR. 50,000 40,000 30,000 33,030 Other 28,025 Sponsor 48,825 42,243 31,624 48,572 26,142 45,233 20,000 10,000 12,400 0 FP23 Aug FP24 Feb FP25 Aug FP26 Feb FP27 Aug FP28 Feb FP29 Aug FP30 Feb FP31 Aug Note : The figure for FP23 (Aug. 2013) includes intervillage OH! MAGARI (Silent Partnership Equity Interest). The figure for FP27 (Aug. 2015) includes ARK Hills South Tower (Preferred Equity Securities).

14 ORIX Group s Properties Utilizing ORIX Group s comprehensive expertise such as development, leasing and management in various asset types. Hilton Okinawa Chatan Resort (Chatan-cho, Nakagami-gun, Okinawa) Hotel Opened in Jul A resort hotel jointly developed with Hilton Worldwide with 346 guest rooms. Resort wedding facility opened in autumn 2015, adjacent to the hotel. HOTEL UNIVERSAL PORT (Konohana-ku, Osaka-shi, Osaka) Hotel Opened in Jul Universal Studios Japan s official hotel with 600 guest rooms. Approx. 4-min walk from JR Universal Studio Station. Residential Hotel, serviced apartment Completed in Aug HUNDRED CIRCUS East Tower (Hyakunin-cho, Shinjuku-ku, Tokyo) A multi complex facility composed of rental units, hotel as well as serviced apartment and office. Naha Shin-Toshin Center Building (Naha-shi, Okinawa) Office Hotel Completed in Jul A dual complex facility located in Naha Shin-Toshin Omoromachi, jointly developed by Daiwa House Group and ORIX Group. Felicita Sanjokiyamachi Bldg (Nakagyo-ku, Kyoto-shi, Kyoto) Retail facility Hotel Completed in Jun Urban-type retail facility located between Kawaramachi and Kiaymachi, facing Sanjo Street. The upper floors house THE PRIME POD KYOTO, a new form of hotel managed by ORIX Group. CROSS OFFICE SHIBUYA (Shibuya, Shibuya-ku, Tokyo) Office Completed in Oct Serviced rental office with excellent access from Shibuya Station, located 4-min walk from the Miyamasuzaka Exit or 1-min walk on foot from the No. 11 Tokyo Metro Exit. Ueno 1-chome Building (Ueno, Taito-ku, Tokyo) Office Completed in Sep Office building with high consideration to both environmental performance and BCP located in central Tokyo facing Chuo Avenue from 6 stations on 6 train lines. ORIX Yaesu-Dori Building (Hatchobori, Chuo-ku, Tokyo) Office Completed in Aug Office building in central Tokyo facing Yaesu Dori. Approx. 4-min walk from Hatchobori Station of Tokyo Metro and within walking distance from JR Tokyo Station. S-GATE AKASAKA-SANNO (Akasaka, Minato-ku, Tokyo) Office Completed in Nov A central Tokyo office jointly developed by ORIX Group and THE SANKEI BUILDING CO., LTD, facing Sotobori-dori. Note : As of Oct. 17, 2017, the date of financial announcement, OJR has no plan to purchase the above-mentioned properties.

15 Internal Growth Strategy 2 決算概要及び業績予想

16 Internal Growth Utilized by Direct PM:Occupancy Rate and Tenant Turnover (Assumption of DPU forecasts) Occupancy rate in office is expected to hover over 98% after the end of FP31 ended Aug. 31, 2017 Assumptions for forecasts 15 Assumptions for tenant move-in Move-in spaces are forecasted based on confirmed contracts (both increase and decrease in rent renewals), as well as assumptions based on inquiries from tenants and leasing market conditions. Assumptions for tenant move-out Move-out spaces are forecasted based on confirmed contracts, as well as assumptions based on negotiation status with tenants and leasing market conditions. Occupancy Rates at the End of each Fiscal Period Total Offices Other facilities excl. offices Offices at the previous financial announcement Maintain high occupancy rate FP26 Feb ,700 9,700 6,800-8,600 10% FP27 Aug ,000-1% FP26 FP27 Feb Aug Note : Figures are rounded to the nearest 100m 2. FP28 Feb ,600 2% 5% FP28 Feb FP29 Aug ,500-17,900-17,300 FP29 Aug FP30 Feb Regarding both Offices and Retail Facilities, Above) Move-in / Move-out Space, Below) Rent Fluctuation Rate by Tenant Turnover Move-in (Only confirmed move-in in and after FP32) Move-out (Only confirmed move-out in and after FP32) Move-in (Forecast) Move-out (Forecast) Move-in forecasted at the previous financial announcement Move-out forecasted at the previous financial announcement Includes c. 4,300 m2 move-out spaces by a large tenant in Nihonbashi Honcho 1-chome Building. *The vacant space has been filled and the occupancy rate was approx. 97% at the end of FP31. Rent fluctuation rate by tenant turnover forecasted at the previous financial announcement Includes c. 5,300m2 move-out spaces by 2 large tenants in ARK Hills South Tower (25% co-ownership) (See P16) 18,100 19,700 9,400 12,000 13,900 7% FP30 Feb FP31 Aug Rent fluctuation rate by tenant turnover (Forecasts are shown in dotted line) Improvement of leasing conditions -10,000-11,000 14% 7% FP31 Aug Note : Dotted lines are forecasts FP32 Feb (Forecast) -16,500-19,700-16,000 18% -2% FP32 Feb (Forecast) FP33 Aug (Forecast) Includes c. 8,400 m2 move-out spaces by a large tenant in Seafort Square Center Building(See P16) 20,300 2% FP33 Aug (Forecast) (%) 30,000 20,000 10, ,000-20,000-30,000 20% 10% 0% 100 ( m2 ) -10% -20% -30%

17 Internal Growth:Initiatives over Tenants Move-Out Risk 16 Vacancies in Seafort Square Center Building and ARK Hills South Tower have been filled steadily. Impacts of move-out by large tenants have mitigated due to growth of asset size and tenant diversification. Status in Leasing after Move-Out Leasing status of Seafort Square Center Building (Office Area) Leasing status of ARK Hills South Tower All 9 floors (approx. 8,400 m2 ) of space for a major sporting goods manufacturer that is scheduled to move out in Jan is expected to be leased with zero downtime as of the date of this document (contracts signed with 2 companies, application received from 1 company). From the 30th fiscal period ended Feb. 28, 2017, to the date of this document, there has been a total of 6 cases of about 2% upward-rent. The average newly contracted rent for a total of 10 new tenants including area expansion during this period is approx. 15,000 yen/tsubo. Leasing is approx. 90% complete for 3 floors that have been moved out of by a major beverage manufacturer, as of the date of this document. Leasing is complete for all 8 floors that have been moved out of by a major IT company, as of the date of this document. The occupancy rate of the entire building is expected to recover from 57.2% after a major IT company moved out (Feb. 2017) to approx. 97% based on the contracts signed, as of the date of this document. Diversification of Office Tenants Based on Rents as of Aug. 31, 2017 Ranking 1 Telecom 2 Finance Tenant Property name Ratio in portfolio ORIX Real Estate Nishi Shinjuku Building ORIX Shiba2-chome Building 3 IT Gaien Nishi-dori building 4 Sporting goods manufacturer Seafort Square Center Building Under 2%, 1% Over Under 1% The number of total tenants in the whole portfolio:1,019 Total monthly rents:3,376 mil. yen Number of office tenants:856 Tenant diversification has also progressed in offices that account for the majority of the portfolio, and the tenants with the highest rents in offices account for less than 2% of the entire portfolio. As a result of the growth of asset size and the progressed tenant diversification, the impact of one tenant moving out has been mitigated. 5 Vocational school ORIX Ikebukuro Building

18 Internal Growth Utilized by Direct PM:Rent Renewals of Existing Tenants (Assumption of DPU forecasts) Actual results of upward rent renewal during Aug (FP31) and forecasts in Feb (FP32) far exceeded forecast compared to previous financial announcement Assumptions for forecasts 17 Assumptions for upward rent renewals and downward rent renewals Both upward rent renewals and downward rent renewals are forecasted based on confirmed contracts as well as rent gap between the market rent and negotiation status etc. Existing Tenants Rent Renewal in Offices and Retail Facilities only < FP31(Aug. 2017) > Upward rent renewal spaces: approx.25,000 m2 Ratio of upward renewals:8% Existing Tenants Rent Renewal Spaces in Offices and Retail Facilities only Upward(only confirmed upward in and after FP32) Downward(only confirmed downward in and after FP32) Upward (forecast at the previous financial announcement) Downward (forecast at the previous financial announcement) 19,800 19,700 Upward(forecast) Downward(forecast) 25,000 Increase of upward rent renewal spaces ( m2 ) 25,000 20,000 Renewals at the same rent 69% Rent renewals 31% Downward renewals 1% Upward renewals 99% 9,100 8,600 12,600 13,700 2,100 11,300 2,300 15,000 10,000 5,000 Renewals at the same rent 68% Total space: approx. 81,900 m2 < FP30(Feb. 2017) > Rent renewals 32% Downward rent renewal spaces: approx. 400 m2 Ratio of downward renewals:-24% Downward renewals 3% Upward renewals 97% FP26 Feb FP27 Aug Note : Dotted lines are forecasts Rent fluctuation rate 9% 5% FP28 Feb % FP29 Aug Rent fluctuation rate forecasted at the previous financial announcement 9% -700 FP30 Feb % ,400-1,200 FP31 Aug Note : Figures are rounded to the nearest 100m 2. Rent Fluctuation Rate from Rent Renewals in Offices and Retail Facilities only 7% 7% 6% FP32 Feb (Forecast) -1,900 FP33 Aug (Forecast) Improvement of leasing conditions 0-5,000 10% 8% 6% 4% Total area: approx.64,800 m2 FP26 Feb FP27 Aug FP28 Feb FP29 Aug FP30 Feb FP31 Aug % FP32 Feb (Forecast) 0% FP33 Aug (Forecast) 2% 0%

19 Examples of Internal Growth Progress has been made in internal growth in each region, particularly for medium-sized offices, underpinned by favorable office market conditions. Round-Cross Akihabara ORIX Meguro Building ORIX Yodoyabashi bldg. 18 Out of 10 floors (approx. 2,300 m2 ) of space leased to a preparatory school space scheduled to move out in Dec. 2017, 7 floors are already expected to be leased with zero downtime, as of the date of this document, with an upward rent renewal of 44% (contracts signed with 2 companies, applications received from 2 companies). From the 30th fiscal period, ended Feb. 28, 2017, to the date of this document, there has been a total of 5 cases of upwardrent tenant renewals including replacement (average of +11%). Acquired in May Recognized rent gap between contract rent and market rent since acquisition. From the 31st fiscal period, ended Aug. 31, 2017, to the date of this document, there has been a total of 5 cases of upward-rent renewals including replacement (average of +16%). Achieving internal growth in applications aside from offices Cross Avenue Harajuku Kita Aoyama Building aune Yurakucho Urban-type retail facility located in front of Harajuku Station. Harajuku is one of the leading source of trends in Japan, a tourist and shopping area that is also popular among inbound visitors. Achieved a 44% rent increase, or approx. 79 million yen annually through tenant replacement in B1 to 3F. Aoyama Suncrest Building Kita Aoyama Building Highly visible urban-type retail facility facing Aoyama Street located approx. 2-min walk from Tokyo Metro Gaienmae Station, and is adjacent to the Aoyama Suncrest Building owned by OJR. Initially acquired with the plan to improve the rent by leasing the entire building to one tenant (withheld leasing 2 floors out of 5 floors since acquisition). Scheduled to lease entire building to furniture store upon expiry with the existing fixedterm tenant. Urban-type retail facility located close to JR Yurakucho Station in the Ginza area, one of Japan s leading commercial districts. Succeeded in upward annual rent of approx. 29 million yen from tenant renewals and tenant replacement during 31st fiscal period (ended Aug. 2017) to the date of this document. Aoyama Street

20

21 Financial Strategy 2 決算概要及び業績予想

22 Financial Strategy Increased stability by extending and diversifying maturity Increased financial stability and improved acquisition agility through expansion of commitment line and adding a new commitment line with 8 year maturity (year) Average Financing Costs and Average Duration to Maturity FP22 Feb Average duration to maturity (left axis) FP23 Aug FP24 Feb FP25 Aug Average funding cost (right axis) Maturity and Duration of Interest-Bearing Liabilities as of Financial Announcement on Oct.17, FP26 Feb FP27 Aug FP28 Feb FP29 Aug FP30 Feb FP31 Aug As of this financial announcement (%) ,000 40,000 30,000 20,000 Long-term debts that matured/mature in and after FP31 (Aug.2017) Existing interest-bearing liabilities Refinancing Debts attributable to property acquisitions Commitment line: 40.5 billion yen Interest-bearing 274,117 liabilities:286,517 million yen Average duration to maturity : 4.5 years 10,000 (%) FP31 Aug Trends on LTV based on Total Assets and Borrowing Capacity FP22 Feb FP32 Feb Borrowing capacity (right axis) ,812 After the PO in Mar FP33 Aug ,055 14,480 FP23 Aug FP34 Feb After the PO in Oct FP35 Aug ,213 FP24 Feb FP36 Feb LTV based on total assets (left axis) ,717 30,407 After the PO in Mar FP37 Aug FP25 Aug Note: Please see Overview of Public Offerings regarding details of each PO on page 33. FP38 Feb ,676 After the PO in Sep FP39 Aug ,083 FP26 Feb FP40 Feb , FP41 Aug After the PO in Mar FP42 Feb ,995 43, FP27 Aug FP43 Aug After the PO in Sep FP44 Feb , FP28 Feb FP45 Aug ,139 53, After the PO in Mar FP46 Feb FP29 Aug FP47 Aug ,990 47, After the PO in Sep FP48 Feb FP30 Feb FP49 Aug , After the PO in Mar FP50 Feb , FP31 Aug FP51 Aug ,000 80,000 60,000 40,000 20,000 0 FP52 Feb. 2028

23 Financial Data Financial Indicators End of FP 31 Aug. 31, 2017 As of financial announcement on Oct. 17, 2017 Interest-bearing liabilities 286,517 million yen 286,517 million yen List of Long-term Debt Lenders Financial institution Balance Ratio Sumitomo Mitsui Trust Bank, Limited 41, % institutions/ 267,017 million yen in total As of financial announcement on Oct. 17, 2017 Financial institution Balance Ratio The 77 Bank, Ltd. 3, % LTV based on total assets 43.6 % 43.6 % LTV based on unitholders capital 47.0 % 47.0 % Average interest rate 0.84 % 0.82 % Average funding cost 1.01 % - Fixed-rate debt ratio 94.0 % 95.2 % Average duration to maturity 4.2 years 4.5 years Sumitomo Mitsui Banking Corporation 33, % Mitsubishi UFJ Trust and Banking Corporation 27, % Development Bank of Japan Inc. 26, % Mizuho Bank, Ltd. 26, % The Bank of Tokyo-Mitsubishi UFJ, Ltd. 23, % Resona Bank, Limited 11, % The Norinchukin Bank 11, % Shinsei Bank, Limited 11, % Mizuho Trust & Banking Co., Ltd. 10, % The Daishi Bank, Ltd. 3, % The Shinkumi Federation Bank 2, % ORIX Bank Corporation 1, % The Kagawa Bank, Ltd. 1, % Taiyo Life Insurance Company 1, % Tokio Marine & Nichido Fire Insurance Co., Ltd. 1, % The Hyakugo Bank, Ltd. 1, % THE HIROSHIMA BANK, LTD. 1, % Mitsui Sumitomo Insurance Company, Limited 1, % Investment Corporation Bonds Credit Ratings Total: 19,500 million yen As of financial announcement on Oct. 17, 2017 As of financial announcement on Oct. 17, 2017 Long-term rating: A S&P Outlook : Stable Short-term rating: A-1 R&I JCR Balance Issuer rating: A+ Interest rate Long-term issuer rating : AA Issue date Rating outlook : Stable Rating outlook : Stable Period The 5th unsecured bonds 5, % Feb. 8, yrs. The 6th unsecured bonds 5, % Jan. 20, yrs. The 7th unsecured bonds 2, % Jan. 20, yrs. The 8th unsecured bonds 2, % Aug. 11, yrs. The 9th unsecured bonds 3, % Aug. 11, yrs. The 10th unsecured bonds 2, % Dec. 19, yrs. Aozora Bank, Ltd. 6, % The Bank of Fukuoka, Ltd. 6, % National Mutual Insurance Federation of Agricultural Cooperatives 5, % THE NISHI-NIPPON CITY BANK, LTD. 3, % THE SHIZUOKA BANK, LTD. 3, % Status of Commitment Line As of financial announcement on Oct. 17, 2017 Financial institution Line limit Mizuho Bank, Ltd. 10,000 Aozora Bank, Ltd. 7,500 Sumitomo Mitsui Trust Bank, Limited 6,000 Mitsubishi UFJ Trust and Banking Corporation 6,000 Sumitomo Mitsui Banking Corporation 5,000 The Bank of Tokyo-Mitsubishi UFJ, Ltd. 4,000 Resona Bank, Limited 2,000 Total 40,500 Drawdown amount 0 Available commitment line 40,500 The Bank of Yokohama,Ltd. 1, % The Minato Bank, Ltd % ShinGinko Tokyo, Limited % THE SHIMANE BANK, LTD % This new 10 billion facility is extended to max. 8-year maturity after drawdown. (The existing commitment line has max. 1 year maturity after drawdown.) Expanded 7,000 million yen from 33,500 million yen

24 Future Management Strategy

25 Management Tactics under Current Environment 24 Aim for mid-to long-term sustainable growth of unitholder value by taking advantage of a variety of strategies Asset Internal Growth Strategy Environment Recognition Vacancy rates mainly in large city office buildings are low and rent levels are on a gradually rising trend. There are concerns regarding large supply of high class offices in central Tokyo. Mid-to long-term growth in hotels and others are expected resulting from increasing inbound visitors, despite temporary movement in exchange rates. Management Tactics OJR will utilize its strength in each asset types to strive to maintain high occupancy rates and improve leasing conditions. External Growth Strategy Environment Recognition Competition for property acquisition continues to be heated and opportunities to invest in quality properties are scarce. Investment Tactics Improve portfolio quality from perspectives of profitability, growth and stability by leveraging the 3 pillars of our strengths which are Diversified REIT, ORIX Synergy and Operating Expertise. OJR brings in diverse growth opportunities through selective investments. OJR is currently considering property acquisitions of mainly offices, hotels and complex facilities. Continue to consider agile replacement strategy (disposal of properties with concerns on future competitiveness or relatively low profitability). Debt Financial strategy Environment Recognition Future risk of interest rate increase in Japan is growing attributable to interest rate hike trend in both Europe and the U.S. Financing environment is good due to monetary easing policy. Management Tactics Reducing financing costs while emphasizing on strengthening financial stability. Secure borrowing capacity for agile future acquisitions; Controlling LTV and utilizing free cash flow for property acquisitions and strategic CAPEX. Equity Environment Recognition Unstable conditions are expanding in domestic and global economic and political circumstances. Policy Aim for mid-to long-term sustainable growth of unitholder value by leveraging internal/external growth strategies and financial strategy - Aim to enhance our DPU, NAV per unit and the liquidity of our units. - Consider withholding internal reserves from capital gains for future DPU stability.

26 Our Growth Strategy Implement various strategies backed by Diversified REIT, ORIX Synergy and Operating Expertise. Aim for sustainable growth of unitholder value by strengthening our portfolio as well as financial stability and diversifying our growth opportunities. Diversified REIT Expansion of investment opportunities Risk diversification Stable revenue growth ORIX Synergy Pipeline support Professional expertise Nationwide network Operating Expertise Fund management expertise (Note) Direct property management 25 Asset Debt External Growth Strategy Selective investment in properties that can leverage our strengths Various growth drivers Property acquisition by utilizing a variety of funds Property replacement responding to the market environment Agile property acquisition Financial Strategy Enhance financial stability including improvement in ratings Reduce financing costs Secure acquisition capacity Effectively use free cash flow for property acquisition and strategic CAPEX Strengthen profitability, stability and growth through operating expertise Internal Growth Strategy Operation by utilizing direct property management Opportunity expansion of rent increase Internal reserves by utilizing capital gain Equity Sustainable growth of DPU Enhancement of NAV per unit Enhancement of liquidity Note : Fund management expertise indicates our expertise in targeting sustainable growth of unitholder value by leveraging our external growth, internal growth and financial strategies.

27 Improvement of Portfolio Quality 26 Aim to improve portfolio quality by continuing selective investments in properties where we can maximize our strength ORIX Group s professional expertise (e.g. operation of hotels) Internal growth by utilizing direct property management Various growth drivers Corporate performance (offices) Consumer spending (retail facilities) Demand from travelers and tourism (hotels and others) Growth Stability Improve Portfolio Quality Profitability Diversification of asset types and tenant types ORIX Group s proprietary know-how in managing downside risk (Note) Flexible leasing such as property usage conversion and subdivision of lease space Strong relationships with various companies nationwide leveraged to tenant leasing Solid track record in operation of hotels and others for over 25 years including back-up operator Expansion of opportunities in property acquisition such as complex facilities as a diversified REIT Improving profitability through property replacement Note : Managing downside risk is to avoid or minimize the value decrease of our properties resulted from economy slowdown and cash flow subtraction due to tenants.

28 Appendix

29 Financial Highlights 28 FP27 (Aug. 2015) FP31 (Aug. 2017) Operating revenues 19,403 19,895 20,365 22,203 22,484 Operating income 9,121 9,369 9,155 10,650 10,192 Ordinary income 7,275 7,705 7,591 9,121 8,672 Net income 7,252 7,698 7,575 9,107 8,657 Unitholders' capital 252, , , , ,282 Net assets 259, , , , ,685 Total assets 532, , , , ,898 Number of investment units outstanding (unit) 2,235,735 2,320,701 2,421,323 2,524,623 2,680,000 Net assets per unit (yen) 116, , , , ,883 Distribution per unit (yen) 2,929 2,989 3,000 3,252 3,230 NAV per unit (yen) (Note1) 137, , , , ,186 NAV per unit (yen) in consideration of internal reserves (Note2) 137, , , , ,210 FP27 (Aug. 2015) FP28 (Feb. 2016) FP28 (Feb. 2016) FP29 (Aug. 2016) FP29 (Aug. 2016) FP30 (Feb. 2017) FP30 (Feb. 2017) FP31 (Aug. 2017) Acquisition price 515, , , , ,841 Number of properties NOI yield 5.0 % 4.9 % 5.1 % 5.1 % 5.1 % Yield after depreciation 3.8 % 3.8 % 4.0 % 4.1 % 4.1 % Unrealized gain/loss 54,293 69,837 82,635 94, ,697 Funds from operation 9,675 10,549 11,447 12,121 12,747 Depreciation expenses 3,629 3,718 3,860 3,956 4,015 Cost of finance lease of property CAPEX ,615 Free cash flow 3,467 3,010 3,479 3,364 2,474 Note1: NAV per unit refers to the amount calculated by the following formula at any given point in time. (The sum of unitholders capital + unrealized gain/loss) the number of investment units outstanding Note2: NAV per unit in consideration of internal reserves refers to the amount calculated by the following formula at any given point in time. (The sum of unitholders capital + unrealized gain/loss + internal reserves) the number of investment units outstanding

30 Comparison between Actual Result and Previous Forecast for FP31 and between Previous and New Forecast for FP Actual result for FP31 (Aug. 2017)(1) Forecast at previous financial announcment for FP31 (Aug. 2017) (2) Change (1)-(2) Forecast for FP32 (Feb. 2018) (3) Forecast at previous financial announcment for FP32 (Feb. 2018) (4) Change (3)-(4) Rental revenues 19,897 19, ,203 19, Other operating revenues 2,587 2, ,347 2, Gains on sale of real estate properties Total operating revenue 22,484 22, ,550 22, Property management fees 2,104 2, ,104 1, Utility charges 1,796 1, ,879 1, Property-related taxes 1,718 1, ,718 1,722-4 Repair cost Depreciation expenses 4,015 4, ,978 3, Others Property-related expense 10,564 10, ,775 10, Operating income 11,920 11, ,775 11, Asset management fee 1,396 1, ,447 1, Administrative service fee Other expense Expenses other than property-related expense 1,727 1, ,816 1, Total operating expense 12,291 12, ,591 12, Operating income 10,192 9, ,958 9, Non-operating income Financing-related costs (Note) 1,492 1, ,466 1, Issuance costs of new units Other expense Non-operating expense 1,523 1, ,474 1, Ordinary income 8,672 8, ,487 8, Extraordinary income or loss Income before income taxes 8,672 8, ,487 8, Provision for income taxes Net income 8,657 8, ,468 8, Number of investment units outstanding (unit) 2,680,000 2,680,000-2,680,000 2,680,000 - DPU (yen) 3,230 3, ,160 3, CAPEX 1,615 1, ,306 1, Note: Financing-related costs is the sum of interest expenses, interest on investment corporation bonds, depreciation of investment corporation bonds issuance costs and funding related expenses.

31 Comparison between Actual Result and Previous Forecast for FP31 and between Previous and New Forecast for FP Increase in rental revenue due to tenant [Reference] Increase in cancellation replacement at Cross Avenue Harajuku and Breakdown of above forecast progression of tenant leasing such as ARK penalty fee Ongoing operations (Note1) Hills South Tower Actual result for FP31 (Aug. 2017)(1) Forecast at previous financial announcment for FP31 (Aug. 2017) (2) Change (1)-(2) Forecast for FP32 (Feb. 2018) (3) Forecast at previous financial announcment for FP32 (Feb. 2018) (4) Change (3)-(4) Rental revenues 19,798 19, ,942 19, Other operating revenues 2,573 2, ,317 2, Gains on sale of real estate properties Total operating revenue 22,372 22, ,260 22, Property-related expenses 10,542 10, ,709 10, Property-related taxes 1,718 1, ,718 1,722-4 Depreciation expenses 4,002 4, ,947 3, Operating income 11,830 11, ,550 11, Total income or loss other than property-related expense (Note2) 3,241 3, ,236 3, Net income 8,588 8, ,313 8, Number of investment units outstanding (unit) 2,680,000 2,680,000-2,680,000 2,680,000 - DPU (yen) 3,204 3, ,102 3, Acquisition of CENTRUM ROPPONGI Decrease in utility charges -75 Decrease in repair cost -48 Decrease in depreciation expenses -18 Increase in property management related cost such as leasing fees +114 Increase in repair cost +40 Decrease in utility charges -18 Decrease in depreciation expenses -27 Actual result for FP31 (Aug. 2017)(1) Forecast at previous financial announcment for FP31 (Aug. 2017) (2) Change (1)-(2) Forecast for FP32 (Feb. 2018) (3) Forecast at previous financial announcment for FP32 (Feb. 2018) (4) Change (3)-(4) Rental revenues Other operating revenues Gains on sale of real estate properties Total operating revenue Property-related expenses Property-related taxes Depreciation expenses Operating income Total income or loss other than property-related expense (Note2) Net income Number of investment units outstanding (unit) DPU (yen) Note1: Ongoing operations refers to the operation of existing properties at the end of FP30 (Feb. 2017). Note2: Total income or loss other than property-related expense is the sum of expenses other than property-related expenses, income or loss other than operation income, extraordinary income or loss and provision for income taxes.

32 Period-Over-Period Comparison of Actual Result for FP31 and Forecasts for FP32 and for FP Actual result for FP30 (Feb. 2017)(1) Change (2)-(1) Actual result for FP31 (Aug. 2017)(2) Change (3)-(2) Forecast for FP32 (Feb. 2018)(3) Change (4)-(3) Forecast for FP33 (Aug. 2018)(4) Rental revenues 18,815 +1,081 19, , ,240 Other operating revenues 2, , , ,437 Gains on sale of real estate properties 1,016-1, Total operating revenue 22, , , ,678 Property management fees 1, , , ,998 Utility charges 1, , , ,988 Property-related taxes 1, , , ,819 Repair cost Depreciation expenses 3, , , ,899 Others Property-related expense 9, , , ,893 Operating income 12, , , ,784 Asset management fee 1, , , ,441 Administrative service fee Other expense Expenses other than property-related expense 1, , , ,798 Total operating expense 11, , , ,692 Operating income 10, , , ,985 Non-operating income Financing-related costs (Note1) 1, , , ,493 Issuance costs of new units Other expense Non-operating expense 1, , , ,500 Ordinary income 9, , , ,487 Extraordinary income or loss Income before income taxes 9, , , ,487 Provision for income taxes Net income 9, , , ,468 Internal reserves Distributable profit 8, , , ,469 Number of investment units outstanding (unit) 2,524, ,377 2,680,000-2,680,000-2,680,000 DPU (yen) 3, , ,160-3,160 CAPEX (Note2) 1, , ,295 Note1: Financing-related costs is the sum of interest expenses, interest on investment corporation bonds, depreciation of investment corporation bonds issuance costs and funding related expenses. Note2: Major factor of increase compared to previous period is 509 million yen for renovation of ball rooms and a chapel in SUNROUTE PLAZA TOKYO.

33 Period-Over-Period Comparison of Actual Result for FP31 and Forecasts for FP32 and for FP Full-period contribution from 4 properties acquired for FP Existing properties +232 Decrease in earnings due to disposition of Toyo MK Building -109 [Reference] Loss of capital gain on disposition of Increase in cancellation Decrease in cancellation Breakdown of above forecast penalty fee Ongoing operations (Note1) Toyo MK Building penalty fee -152 Actual result for FP30 (Feb. 2017)(1) Change (2)-(1) Actual result for FP31 (Aug. 2017)(2) Change (3)-(2) Forecast for FP32 (Feb. 2018)(3) Change (4)-(3) Forecast for FP33 (Aug. 2018)(4) Rental revenues 18, , , ,979 Other operating revenues 2, , , ,406 Gains on sale of real estate properties 1,016-1, Total operating revenue 22, , , ,386 Property-related expense 9, , , ,812 Property-related taxes 1, , , ,803 Depreciation expenses 3, , , ,868 Operating income 12, , , ,574 Total income or loss other than property-related expense (Note2) 3, , , ,241 Net income 9, , , ,333 Internal reserves Distributable profit 8, , , ,335 Number of investment units outstanding (unit) 2,524, ,377 2,680,000-2,680,000-2,680,000 DPU (yen) 3, , , ,110 Property-related taxes to be expensed regarding 11 properties acquired in Full-period contributions from 4 properties acquired for FP Increase in property management related cost such as leasing fees +79 Increase in loss on retirement Acquisition of CENTRUM ROPPONGI Building Actual result for FP30 (Feb. 2017)(1) Change (2)-(1) Increase in repair cost +87 Increase in utility charges +68 Actual result for FP31 (Aug. 2017)(2) Change (3)-(2) Increase in property-related taxes to be expensed due to fair value adjustments +46 Property-related taxes to be expensed regarding 2 properties acquired in 2017 (SUNROUTE PLAZA TOKYO and HOTEL LiVEMAX NAGOYA SAKAE-EAST) +39 Forecast for FP32 (Feb. 2018)(3) Change (4)-(3) Forecast for FP33 (Aug. 2018)(4) Rental revenues Other operating revenues Gains on sale of real estate properties Total operating revenue Property-related expense Property-related taxes Depreciation expenses Operating income Total income or loss other than property-related expense (Note2) Net income Assumption per periiod based on appraisal value at the time of acquisitions (Note3) Number of investment units outstanding (unit) DPU (yen) Note1: Ongoing operations refers to the operation of existing properties at the end of FP30 (Feb. 2017). Note2: Total income or loss other than property-related expense is the sum of expenses other than property-related expenses, income or loss other than operation income, extraordinary income or loss and provision for income taxes. Note3: Property-related taxes and Property-related expense excluding depreciation expenses are based on appraisal reports acquired at the time of property acquisition decision. Depreciation expenses refers to estimated depreciation expenses by OJR acquired at the time of property acquisition decision.

34 Overview of Public Offerings 33 Driving sustainable growth of unitholder value through public offerings by capturing favorable capital market Items FP23 (Mar. 2013) FP24 (Oct. 2013) FP25 (Mar. 2014) FP26 (Sep. 2014) FP27 (Mar. 2015) FP28 (Sep. 2015) FP29 (Mar. 2016) FP30 (Sep. 2016) FP31 (Mar. 2017) 168,947 units 96,377 units 278,680 units 154,710 units 114,851 units 84,966 units 100,622 units 103,300 units 155,377 units Number of new investment units issued Number of investment units issued (after thirdparty allotment) Base Price (closing price of pricing date) Breakdown Breakdow n Breakdown Breakdow n Breakdow n Breakdown Breakdow n Breakdown Breakdown Public Offering: Public Offering: Public Offering: Public Offering: Public Offering: Public Offering: Public Offering: Public Offering: Public Offering: 160,915 units 91,788 units 265,410 units 147,343 units 109,381 units 84,966 units 95,830 units 98,381 units 147,978 units Third-Party Allotment: Third-Party Allotment: Third-Party Allotment: Third-Party Allotment: Third-Party Allotment: Third-Party Allotment: Third-Party Allotment: Third-Party Allotment: Third-Party Allotment: 8,032 units 4,589 units 13,270 units 7,367 units 5,470 units 0 units 4,792 units 4,919 units 7,399 units # 1,591,117 units 1,687,494 units 1,966,174 units 2,120,884 units 2,235,735 units 2,320,701 units 2,421,323 units 2,524,623 units 2,680,000 units 125,800 yen 121,500 yen 126,000 yen 133,500 yen 164,500 yen 156,100 yen 168,800 yen 178,400 yen 176,300 yen Issue Price 122,655 yen 118,462 yen 122,850 yen 130,162 yen 160,387 yen 149,467 yen 164,580 yen 171,112 yen 168,850 yen Total amount of issue price 20,722 million yen 11,417 million yen 34,235 million yen 20,137 million yen 18,420 million yen 12,699 million yen 16,560 million yen 17,675 million yen 26,235 million yen Issue Value 118,629 yen 114,574 yen 118,818 yen 126,023 yen 155,287 yen 144,714 yen 159,347 yen 165,671 yen 163,568 yen Total issue Value 20,042 million yen 11,042 million yen 33,112 million yen 19,497 million yen 17,834 million yen 12,295 million yen 16,033 million yen 17,113 million yen 25,414 million yen Date of resolution of Issuance March 8, 2013 October 15, 2013 March 3, 2014 September 1, 2014 March 2, 2015 August 14, 2015 March 1, 2016 August 15, 2016 February 10, 2017 Pricing date March 18, 2013 October 23, 2013 March 11, 2014 September 9, 2014 March 10, 2015 August 24, 2015 March 9, 2016 August 23, 2016 February 20, 2017 Payment date (Public Offering) Payment date (Third-Party Allotment) March 26, 2013 October 30, 2013 March 18, 2014 September 17, 2014 March 17, 2015 September 1, 2015 March 16, 2016 September 1, 2016 March 1, 2017 April 24, 2013 November 27, 2013 April 16, 2014 October 9, 2014 April 10, 2015 ー April 12, 2016 September 28, 2016 March 28, 2017

35 Portfolio Status 34 Portfolio Profile End of FP31 (Aug. 31, 2017) ) Total acquisition price Number of Occupancy rate NOI yield Yield after (billion yen) properties (%) (%) depreciation(%) Offices Retail Facilities Residential Properties Logistics Facilities Hotels and Others Overall Portfolio Portfolio Composition Based on Acquisition Price End of FP31 (Aug. 31, 2017) Logistics Facilities 5.8% Hotels and Others 9.3% Other Areas 25.9% Greater Tokyo Area 74.1% Residential Properties 10.7% 6 Central Tokyo Wards 43.1% Offices 56.8% Retail Facilities 17.3% Other Parts of the Greater Tokyo Area 19.9% Remaining Tokyo Wards 11.2%

36 Trend of Portfolio Growth 35 Driving agile property replacements by capturing the market conditions Trend of Portfolio Growth (billion yen) Offices Logistics Facilities Retail Facilities Residential Properties Hotels and Others Dispositions End of FP1 (Aug. 2002) End of FP31 End (Aug. of FP ) (Aug. 2017) Note: The above chart indicates the accumulation of acquisition price of properties owned and disposed as of each fiscal period.

37 Offices Portfolio Summary Type Area Property Completion Logistics Facilities 6 Central Tokyo Wards Remaining Tokyo Wards Other Parts of the Greater Tokyo Area Other Areas Acquisition Price Ratio (%) Aoyama Suncrest Building Nov , Round-Cross Ichi-bancho Mar , Round-Cross Nishi Shinjuku Jun , DT Gaien Feb , Yoyogi Forest Building Jun , Round-Cross Minami Azabu May , Round-Cross Akasaka Oct , Round-Cross Mita May , Round-Cross Shiba Daimon Oct , Round-Cross Tsukiji May , ORIX Shiba 2-chome Building Jan , Aoyama 246 Building Nov , Round-Cross Shinjuku Oct , Seafort Square Center Building Jun , ORIX Akasaka 2-chome Building Nov , Round-Cross Shinjuku 5-chome Oct , Nihonbashi Honcho 1-chome Building Mar , Round-Cross Shibuya Mar , ORIX Suidobashi Building Oct , ORIX Shinagawa Building Jun , ORIX Real Estate Nishi Shinjuku Building Apr , OX Tamachi Building Jan , MG Shirokanedai Building May , SHIBUYA PINE Bldg. Oct , MG Ichigaya Building Jan , Round-Cross Ginza 2-chome Aug , ARK Hills South Tower Jul , Round-Cross Akihabara Feb , Gaien Nishi-dori Building Dec , CENTRUM ROPPONGI May , Carrot Tower Nov , Beside Kiba Aug , ORIX Ikebukuro Building Jul , KN Jiyugaoka Plaza Dec , ORIX Meguro Building Jan , Akihabara Business Center Oct , Neo City Mitaka Sep , Round-Cross Kawasaki Jan , Omiya Miyacho Building Sep , Omiya Shimocho 1-chome Building Aug , ORE Omiya Building Jul , Nagoya Itochu Building Feb , ORIX Koraibashi Building Jul , Lunar Sendai Feb , ORIX Nagoya Nishiki Building Jan , ORE Sapporo Building Nov , ORIX Kobe Sannomiya Building Sep , ORE Nishiki 2-chome Bldg. Aug , DOJIMA PLAZA BLDG. Feb , PRIME SQUARE HIROSE-DORI May , Hamamatsu Act Tower Aug , ORIX Yodoyabashi Bldg. Mar , SAPPORO BRICK CUBE May , Round-Cross Kagoshima Nov , Total of Offices 360, Other Parts of Toda Logistics Center Mar , the Greater Tokyo Ichikawa Logistics Center Jun , Area Iwatsuki Logistics Center Apr , Other Areas Sakai Logistics Center North Building Jul , Komaki Logistics Center Sep , Total of Logistics Facilities 37, Type Area Property Completion Retail Facilities Residential Properties Hotels and Others 6 Central Tokyo Wards 36 As of end of FP31 (Aug. 31) Nihon Jisho Minami Aoyama Building Nov , CUBE Daikanyama Jan , aune Yurakucho Feb , Cross Avenue Harajuku Jun , J-ONE SQUARE Feb , JouLe SHIBUYA May , SO-CAL LINK OMOTESANDO Apr , Kita Aoyama Building Apr Remaining Tokyo Wards aune Ikebukuro Aug , aune Kohoku Mar , aune Makuhari Feb , Other Parts of Maruetsu Sagamino Nov , the Greater Tokyo CROSS GARDEN KAWASAKI Feb , Area Tecc Land Totsuka (Land) - 6, Clio Fujisawaekimae Feb , Kobe Momoyamadai Shopping Center (Land) - 3, Okayama Kume Retail Facility Nov , Home Center Musashi Sendai Izumi (Land) - 2, aune Sapporo Ekimae Jul , Morioka Minami Shopping Center Sansa Nov , GRAN MART Tegata Jul Other Areas AEON TOWN Sendai-Izumiosawa (Land) - 3, Cross Mall Shimonoseki-Chofu May , intervillage OH! MAGARI Jun , Valor Suzuka Shopping Center Apr , aune Sendai Nov , Friend Town Fukaebashi (Land) - 2, KONAMI SPORTS CLUB KORIEN Nov , aune Tenjin Aug , Total of Retail Facilities 110, We Will Hatchobori Mar , Central Shibaura Island Air Tower Mar , Tokyo Wards Belle Face Togoshi Statio Nov , Belle Face Meguro Feb , Central Crib Roppongi Jan , Belle Face Kamata Nov , Belle Face Hongo Yumicho Nov , Remaining Belle Face Mishuku Jun , Tokyo Wards West Park Tower IKEBUKURO Dec , Belle Face Higashijujo Dec , Other Parts of the Greater Tokyo R-Styles Musashi-Kosugi Sep , Area Belle Face Osaka Shinmachi Feb , Other Areas Belle Face Amagasaki Feb , Belle Face Kanazawa Kohrinbo Oct , Total of Residential Properties 68, Central Tokyo Wards TAKANAWA DUPLEX C's Aug , Other Parts of Cross Gate Sep , the Greater Tokyo GOOD TIME LIVING Shin-urayasu Oct , Area SUNROUTE PLAZA TOKYO Jun , VIA INN SHINSAIBASHI BLDG. Mar , Other Areas HOTEL KEIHAN SAPPORO Apr , Richmond Hotel Yamagata Ekimae Dec , Hotel Nikko Himeji Sep , Total of Hotels and Others Total Acquisition Price Ratio (%) 58, , Note1: Ratio refers to the percentage in acquisition price of each property under management to the total acquisition price. Note2:Figures are rounded to the first decimal place for the Ratio. Totals for the Ratio may not tally due to this rounding. Note3:The property acquired in and after FP31 (Aug. 2017) is shown in red. Note4:OJR changed its property name from PRIZE TENJIN to aune Tenjin on Oct. 1, 2017.

38 Portfolio Map 37 End of FP31 (Aug. 31, 2017)

39 Portfolio Data 38 Average Acquisition/Disposition Price after IPO (Note1) Acquisition Price 6.00 billion yen 3.14 billion yen 1-5 billion yen 50.2% Under 1billion yen 7.2% Average 2.55 billion yen Over 10 billion yen 26.7% 5-10 billion yen 15.9% 1-5 billion yen 30.1% Under 1billion yen 0.3% Average 5.77 billion yen 5-10 billion yen 31.1% Over 10 billion yen 38.5% Acquisition after IPO Disposition after IPO End of FP 1 (Aug. 2002) End of FP31 (Aug. 2017) Building Age (Note2) 5-10yrs 24.8% Under 5yrs 19.0% Average 12.1 yrs Over 20yrs 20.4% 10-15yrs 29.6% 15-20yrs 6.2% 5-10yrs 27.4% Under 5yrs 5.0% Average 15.2 yrs 10-15yrs 33.5% Over 20yrs 26.0% 15-20yrs 8.1% End of FP 1 (Aug. 2002) End of FP31 (Aug. 2017) Note1: The figures exclude an additional acquisition of Aoyama Suncrest Building owned at IPO and dispositions of a part of properties. Note2: The figures of Kobe Momoyamadai SC (Land), Home Center Musashi Sendai Izumi (Land), Tecc Land Totsuka (Land), AEON TOWN Sendai-Izumiosawa (Land) and Friend Town Fukaebashi (Land) are not included in the pie charts.

40 Overview of Appraisal Value 39 FP22 Feb End FP23 Aug End FP24 Feb End FP25 Aug End FP26 Feb End FP27 Aug End FP28 Feb End FP29 Aug End FP30 Feb End FP31 Aug End Number of properties Appraisal value (billion yen) Book value (billion yen) Unrealized gain/loss (billion yen) (Note1) Unrealized gain/loss ratio (%) (Note2) (%) Unrealized gain/loss ratio Appraisal Value by Asset Type -5 FP22 Feb End FP23 Aug End (Note 3) FP24 Feb End FP25 Aug End FP26 Feb End FP27 Aug End FP28 Feb End FP29 Aug End FP30 Feb End FP31 Aug End FP31 (Aug. 2017) Change from FP30 (Feb. 2017) No.of Appraisal Change of Change of Property Book Value Gain/Loss Change of Change of Properties Value Cap Rate Appraisal Gain/Loss Appraisal Ratio Cap Rate Offices , , % 47,309 6, % -0.1% 7,875 Logistics Facilities 5 31,671 43, % 11, % -0.1% 1,292 Retail Facilities 24 88, , % 22,415 2, % -0.1% 2,895 Residential Properties 14 63,537 77, % 14, % -0.1% 1,507 Hotels and Others 8 53,878 63, % 9, % -0.0% 130 Total:excluding properties not appraised by the direct capitalization method(note 4) and acquired in and after FP31 (Aug. 2017) , , % 104,988 11, % -0.1% 13,702 <Reference> Properties not appraised by the direct capitalization method (Note 4) 6 28,018 31,600-3, Properties acquired in FP31 (Aug. 2017) 1 12,472 12, % Properties owned as of the end of FP31 (Aug. 2017) , , , Note 1: Unrealized gain/loss is calculated by subtracting the book value from the appraisal value at the same time. Note 2: Unrealized gain/loss ratio is calculated in dividing the unrealized gain/loss by the book value at the same time. Note 3: Figures for Cap Rate in Appraisal value by asset type are calculated on a weighted average basis according to appraisal values and rounded to the first decimal place. Note 4: The term refers to Aoyama Suncrest Building, Tecc Land Totsuka (Land), Kobe Momoyamadai Shopping Center (Land), Home Center Musashi Sendai Izumi (Land), AEON TOWN Sendai-Izumiosawa (Land) and Friend Town Fukaebashi (Land) for which the cap rate are not calculated based on the direct capitalization method.

41 Appraisal Value List -1- Appraisal Value of All Properties at the end of FP31 (Aug. 2017) *Area symbol: 6 Central Tokyo Wards Remaining Tokyo Wards Other Parts of the Greater Tokyo Area Other Areas FP31 (Aug. 2017) Change from FP30 (Feb. 2017) Appraisal Change of Change of Type Area Property Book Value Gain/Loss Change of Change of Value Cap Rate Appraisal Gain/Loss Appraisal Ratio Cap Rate Aoyama Suncrest Building(note) 10,210 12,690-2, % Round-Cross Ichi-bancho 3,001 3, % % -0.1% 92 Round-Cross Nishi Shinjuku 2,400 3, % 1, % -0.1% 39 DT Gaien 2,110 2, % % -0.1% 67 Yoyogi Forest Building 1,401 1, % % -0.1% 50 Round-Cross Minami Azabu 1,216 1, % % 0.0% 13 Round-Cross Akasaka 2,708 2, % % 0.0% 20 Round-Cross Mita 1,688 1, % % 0.0% 9 Round-Cross Shiba Daimon 2,182 3, % 1, % 0.0% 70 Round-Cross Tsukiji 3,061 3, % % 0.0% -140 ORIX Shiba 2-chome Building 6,193 9, % 2, % 0.0% 53 Aoyama 246 Building 5,300 8, % 3, % 0.0% 12 Round-Cross Shinjuku 7,413 10, % 2, % -0.1% 331 Seafort Square Center Building 16,524 13, % -2, % 0.0% 200 ORIX Akasaka 2-chome Building 19,754 22, % 2, % 0.0% 203 Round-Cross Shinjuku 5-chome 3,859 4, % % -0.1% 134 Nihonbashi Honcho 1-chome Building 9,481 8, % -1, % -0.2% 271 Round-Cross Shibuya 3,252 3, % % 0.0% 35 ORIX Suidobashi Building 2,718 3, % % -0.1% 84 ORIX Shinagawa Building 14,275 12, % -1, % 0.0% 154 ORIX Real Estate Nishi Shinjuku Building 13,063 14, % 1, % 0.0% 40 OX Tamachi Building 6,605 7, % 1, % -0.1% 196 MG Shirokanedai Building 8,524 8, % % 0.0% 135 SHIBUYA PINE Bldg. 3,481 4, % % -0.1% 112 MG Ichigaya Building 3,027 3, % % 0.0% 54 Round-Cross Ginza 2-chome 5,184 5, % % -0.1% 63 ARK Hills South Tower 21,911 24, % 2, % -0.1% 558 Offices Round-Cross Akihabara 4,344 4, % % -0.1% 107 Gaien Nishi-dori Building 9,047 9, % % -0.1% 479 CENTRUM ROPPONGI 12,472 12, % Carrot Tower 3,735 6, % 3, % -0.1% 115 Beside Kiba 1,962 2, % % -0.1% 51 ORIX Ikebukuro Building 8,163 12, % 4, % 0.0% 50 KN Jiyugaoka Plaza 3,058 3, % % 0.0% 36 ORIX Meguro Building 5,978 8, % 2, % -0.1% 489 Akihabara Business Center 4,526 6, % 1, % -0.1% 379 Neo City Mitaka 1,912 3, % 1, % -0.1% 87 Round-Cross Kawasaki 3,996 6, % 2, % 0.0% 315 Omiya Miyacho Building 3,764 5, % 1, % -0.1% 130 Omiya Shimocho 1-chome Building 3,294 4, % 1, % -0.1% 245 ORE Omiya Building 7,143 7, % % 0.0% 21 Nagoya Itochu Building 4,505 5, % 1, % -0.1% 101 ORIX Koraibashi Building 4,436 5, % % 0.0% 128 Lunar Sendai 7,335 6, % % -0.1% 205 ORIX Nagoya Nishiki Building 10,693 8, % -2, % -0.1% 304 ORE Sapporo Building 3,336 6, % 2, % 0.0% 232 ORIX Kobe Sannomiya Building 3,234 4, % 1, % -0.1% 179 ORE Nishiki 2-chome Bldg. 10,360 12, % 2, % -0.1% 608 DOJIMA PLAZA BLDG. 9,506 10, % % -0.1% 354 PRIME SQUARE HIROSE-DORI 7,076 8, % 1, % -0.1% 239 Hamamatsu Act Tower 12,468 12, % % 0.0% -93 ORIX Yodoyabashi Bldg. 5,027 5, % % 0.0% 97 SAPPORO BRICK CUBE 5,271 5, % % -0.1% 132 Round-Cross Kagoshima 1,302 1, % % 0.0% 8 Total of Offices 338, ,430-49, Note: For the Aoyama Suncrest Building, the appraisal value and cap rate of the property is not calculated based on the direct capitalization method. 40

42 Appraisal Value List *Area symbol: 6 Central Tokyo Wards Remaining Tokyo Wards Other Parts of the Greater Tokyo Area Other Areas Logistics Facilities Retail Facilities Residential Properties Hotels and Others Total FP31 (Aug. 2017) Change from FP30 (Feb. 2017) Appraisal Change of Change of Book Value Gain/Loss Change of Change of Value Cap Rate Appraisal Gain/Loss Appraisal Ratio Cap Rate Toda Logistics Center 8,391 11, % 2, % -0.1% 374 Ichikawa Logistics Center 7,127 9, % 2, % -0.1% 140 Iwatsuki Logistics Center 5,936 7, % 1, % -0.1% 220 Sakai Logistics Center North Building 7,985 12, % 4, % -0.1% 457 Komaki Logistics Center 2,230 3, % % -0.1% 101 Total of Logistics Facilities 31,671 43,380-11, Nihon Jisho Minami Aoyama Building 2,459 4, % 1, % 0.0% 14 CUBE Daikanyama 2,382 3, % 1, % 0.0% 305 aune Yurakucho 9,896 11, % 1, % -0.1% -18 Cross Avenue Harajuku 4,787 6, % 2,122 1, % -0.4% 1,126 J-ONE SQUARE 1,513 1, % % -0.1% 52 JouLe SHIBUYA 7,509 8, % 1, % 0.0% 175 SO-CAL LINK OMOTESANDO 2,310 2, % % -0.1% 71 Kita Aoyama Building % % -0.1% 13 aune Ikebukuro 6,215 7, % 1, % -0.1% 233 aune Kohoku 3,447 4, % 1, % 0.0% 46 aune Makuhari 3,083 4, % 1, % 0.0% 59 Maruetsu Sagamino 2,198 2, % % -0.1% 60 CROSS GARDEN KAWASAKI 12,096 15, % 3, % -0.1% 515 Tecc Land Totsuka (Land)(note) 6,073 6, % Clio Fujisawaekimae 3,855 4, % % -0.1% 97 Kobe Momoyamadai Shopping Center (Land)(note) 3,387 3, % - 1 Okayama Kume Retail Facility 2,396 3, % % 0.0% 39 Home Center Musashi Sendai Izumi (Land)(note) 2,381 2, % - 0 aune Sapporo Ekimae 1,852 2, % % 0.0% 47 Morioka Minami Shopping Center Sansa 2,680 3, % % -0.1% -31 AEON TOWN Sendai-Izumiosawa (Land)(note) 3,540 3, % - 0 GRAN MART Tegata 941 1, % % -0.1% 26 Cross Mall Shimonoseki-Chofu 2,292 2, % % 0.1% -230 intervillage OH! MAGARI 4,914 6, % 1, % 0.0% 71 Valor Suzuka Shopping Center 3,091 3, % % -0.1% 92 aune Sendai 1,993 2, % % 0.0% 7 Friend Town Fukaebashi (Land)(note) 2,424 2, % - 30 KONAMI SPORTS CLUB KORIEN 1,578 1, % % -0.1% 41 aune Tenjin 4,552 4, % % -0.1% 76 Total of Retail Facilities 106, ,320-23, We Will Hatchobori 2,120 2, % % 0.0% 29 Shibaura Island Air Tower 4,970 7, % 2, % 0.0% 122 Belle Face Togoshi Statio 2,374 3, % % 0.0% 28 Belle Face Meguro 3,138 3, % % -0.1% 122 Central Crib Roppongi 7,491 8, % % -0.1% 259 Belle Face Kamata 3,099 4, % 1, % 0.0% 46 Belle Face Hongo Yumicho 3,011 3, % % 0.0% 26 Belle Face Mishuku 1,919 2, % % 0.0% 13 West Park Tower IKEBUKURO 20,111 22, % 2, % -0.1% 491 Belle Face Higashijujo 2,898 3, % % -0.1% 41 R-Styles Musashi-Kosugi 4,173 5, % % -0.1% 179 Belle Face Osaka Shinmachi 3,046 4, % 1, % 0.0% 58 Belle Face Amagasaki 2,921 3, % % 0.0% 63 Belle Face Kanazawa Kohrinbo 2,258 2, % % 0.0% 23 Total of Residential Properties 63,537 77,720-14, TAKANAWA DUPLEX C's 2,875 2, % % 0.0% 37 Cross Gate 9,661 17, % 7, % -0.1% 487 GOOD TIME LIVING Shin-urayasu 1,487 1, % % -0.1% 27 SUNROUTE PLAZA TOKYO 27,379 26, % % 0.0% -401 VIA INN SHINSAIBASHI BLDG. 3,036 3, % % 0.0% 23 HOTEL KEIHAN SAPPORO 2,437 3, % % 0.0% 45 Richmond Hotel Yamagata Ekimae 2,203 2, % % 0.0% -109 Type Area Property Hotel Nikko Himeji 4,797 4, % % 0.0% 19 Total of Hotels and Others 53,878 63,250-9, , , , Note: For the Tecc Land Totsuka (Land), Kobe Momoyamadai Shopping Center (Land), Home Center Musashi Sendai Izumi (Land), AEON TOWN Sendai-Izumiosawa (Land) and Friend Town Fukaebashi (Land), the appraisal value and cap rate are not calculated based on the direct capitalization method.

43 Status of Investment Units 42 Ownership Ratio by Unitholder Top 10 Unitholders End of FP30 (Feb. 2017) 2,524,623 units End of FP31 (Aug. 2017) 2,680,000 units Individuals Other Japanese Corp. 7.7% 7.6% 65.1% 65.8% 2.2% 2.1% 24.9% 24.5% 0% 20% 40% 60% 80% 100% NOMURA BANK (LUXEMBOURG) S.A. 91, Number of Unitholders Ratio by Type Individuals Other Japanese Corp. Financial Institution including Securities Co. Foreign Corp. Foreign Individuals Financial Institution including Securities Co. Foreign Corp. Foreign Individuals 0.9% 1.6% 1.4% Top 10 Unitholders Japan Trustee Services Bank, Ltd. (Trust accounts) Trust & Custody Services Bank, Ltd. (Securities investment trust accounts) The Master Trust Bank of Japan, Ltd. (Trust accounts) The Nomura Trust and Banking Co., Ltd. (Investment accounts) STATE STREET BANK AND TRUST COMPANY STATE STREET BANK - WEST PENSION FUND CLIENTS - EXEMPT Number of Units End of FP31 (Aug. 2017) Share(%) (Note) 635, , , , , , End of FP30 (Feb. 2017) 20, % STATE STREET BANK AND TRUST COMPANY , THE BANK OF NEW YORK MELLON SA/NV 10 26, End of FP31 (Aug. 2017) 22, % 0.9% 1.5% 1.3% STATE STREET BANK WEST CLIENT - TREATY , % 20% 40% 60% 80% 100% Note: Each share in Top 10 Unitholders is rounded down to the nearest whole number.

44 Sustainability Initiatives -1- Obtained Green Star assessment from GRESB, an index developed by European institutional investors Obtained DBJ Green Building Certification for 18 properties, CASBEE for 1 property and BELS for 1 property as of FP31 financial announcement GRESB Global Real Estate Sustainability Benchmark (GRESB) is a benchmark developed by a group consisting primarily of European pension funds to evaluate environmental, social and other considerations of real estate companies and real estate managers. Major European, U.S. and Asian institutional investors utilize the benchmark in their investment decision-making processes. OJR has participated in the Global Real Estate Sustainability Benchmark (GRESB) survey since FY2013. OJR has received the highest rating Green Star among 4 ranks for its environmental and sustainability initiatives with high evaluation of its Management & Policy and Implementation & Measurement since 2015 and has acquired Three Stars in GRESB Rating by relative evaluation of total scores since DBJ Green Building Certification DBJ Green Building Certification is a system under which the objective of promoting an increase of real estate that demonstrates high consideration not only for environmental performance of the building but also disaster prevention and anticrime measures as well as societal demands from various stakeholders of real estate (Green Building), the Development Bank of Japan Inc. conducts an assessment based on a scoring model that it developed and then selects real estate that meets the needs of the times. Rank Property name Rank Property name 5 stars 4 stars 3 stars Office ARK Hills South Tower Office Round-Cross Shinjuku Logistics Sakai Logistics Center North Building 3 stars Office PRIME SQUARE HIROSE-DORI Office ORE Nishiki-2chome Building Residential West Park Tower IKEBUKURO Logistics Iwatsuki Logistics Center Logistics Toda Logistics Center Office ORIX Akasaka 2-chome Building Office Seafort Square Center Building Office ORE Sapporo Building Office Nihonbashi Honcho 1-chome Building Office ORIX Shinagawa Building 2 stars Retail CROSS GARDEN KAWASAKI Office ORIX Kobe Sannomiya Building Logistics Komaki Logistics Center Office ORIX Nagoya Nishiki Building Logistics Ichikawa Logistics Center 43 CASBEE BELS CASBEE (Comprehensive Assessment System for Built Environment Efficiency) is a comprehensive environmental performance assessment system that is under the initiative of the Ministry of Land, Infrastructure, Transport and Tourism for buildings being developed and promoted in Japan. There are 5 classifications for the 21 assessment items, namely energy/greenhouse gas, water, resource use/safety, biodiversity/land, and internal environment. Assessments are indicated based on a five-rank scale of 1 to 5 stars. ORE Omiya Building BELS is the third party certification system to rate houses and building in accordance with duty to make effort to label energy saving performance in the Act on Improving Energy Consumption Performance for Architectural structures. Houses and building are evaluated based on the government-designated energy consumption performance standard of architectural structures and given according to a scale of 1 to 5 stars. ORE Nishiki 2-chome Building

45 Sustainability Initiatives Pursuit of Tenant Comfort Environmental Care Attract restaurant tenant, install common rest space aune Kohoku Installation of solar panels Komaki Logistics Center Image drawing of renovation After renovation Installed on the roof of the office building Upon tenant replacement, we attracted a restaurant tenant with a high ability to attract customers. In order to improve the convenience of the customers, we also installed a common rest space. Balanced Pursuit of Increasing Tenant Satisfaction and Environmental Care Promotion of introduction of LED lighting Seafort Square Center Building MG Shirokanedai Building Belle Face Osaka Shinmachi Generates approximately half of the electricity consumed at the office building Connections with Communities We create lively communities by cooperating on events and strive to work together for mutual harmony and benefit with communities and activate communities. Seafort Square Center Building Hamamatsu Act Tower Conducted with purposes of increasing tenant satisfaction, improving building specifications, reducing costs, etc. There are cases where rents increase due to coinciding tenant s needs for installing LED lightings We have organized the summer event, Seafort Paradise, at Tennozu Seafort Square We have supported the summer event, "Act de yaramaika Hamamatsu matsuri."