Daiwa Office Investment Corporation

Transcription

1 As of July 18, 2014 Daiwa Office Investment Corporation Earnings Announcement for the 17th Fiscal Period (Fiscal Period ended May 2014)

2 Contents Section 1 17th Fiscal Period Performance Highlights and Forecasts 17th Fiscal Period Topics 4 Highlights of the 17th Fiscal Period 5 Highlights of Forecasts for the 18th and 19th Fiscal Periods 6 Changes in Dividends 7 Section 2 Highlights of Public Offering in June 2014 Changes in Major Indices due to Public Offering 9 Summary of Public Offering in June Section 3 Internal Growth Leasing Market of Tokyo Office Buildings 12 Analyses of Leasing Income 13 Internal Growth Strategies 17 Occupancy Rate of the Properties Subject to Leasing Improvement in the 17th FP 18 Value-up Properties in the 18th FP 19 Performance of Shinjuku Maynds Tower & E SPACE TOWER 20 Measures to Increase Portfolio Value 21 Actions Taken for Environmental Efforts 22 Section 4 External Growth Acquisition/Sale Policy and Status of Deliberation for Property Acquisitions 24 Changes in Asset Size and Trading Performance 25 Properties Acquired after Sponsor Change 26 Portfolio after Acquisition of Three Properties 27 Extensive Property Sourcing Route 28 Newly Acquired Property 29 Section 5 Financial Strategy Status of Interest-bearing Liabilities 32 Unitholders as of the End of the 17th Fiscal Period 35 Activities in the 18th Fiscal Period 36 Appendix 1

3 This document is provided for informational purposes and should not be construed as an offer or solicitation of an offer to buy or sell any specific product, including investment units. We advise you to inquire with each securities company with regards to the purchase of Daiwa Office Investment Corporation s investment units. This document is not intended to provide information meeting the requirements of Japan s new Financial Instruments and Exchange Law or Investment Trust and Investment Corporation Law, or by the associated cabinet orders, cabinet office ordinances, or rules, or by the rules governing companies listed on the Tokyo Stock Exchange, or any other applicable rules, nor is it a disclosure document or statement of financial performance prepared in accordance with the provisions of any of the foregoing. This document contains forward-looking statements. However, these forward-looking statements are based on certain assumptions and judgments made using currently available information, and there are a number of known and unknown risks and uncertainties. These forward-looking statements are not a guarantee of future performance or management results, and actual results may differ materially from any explicit or implicit forecasts contained herein. Although the information contained in this document is the best available at the time of publication, no assurances can be given regarding the accuracy and certainty of this information. The content of this document can be modified or withdrawn without prior notice. 2

4 Section 1 17th Fiscal Period Performance Highlights and Forecasts

5 17th Fiscal Period Topics Property Acquisition/Sale Property replacement in the 17th FP (Acquisition of 1 property; Sale of 1 property) Integral Tower (Acquisition date: May 29, 2014; Acquisition price: 15,220 million yen) Daiwa Shibuya SS Building (Delivery Date: May 30, 2014; Sale Price: 3,800 million yen) Property Management and Management Situation Occupancy Rate at the end of the 17th FP: 96.4% (17th FP Expected Occupancy Rate estimated in January 2014: 94.8% / Occupancy Rate at the end of the 16th FP: 96.3%) Average Contract Rent at the end of May 2014*: 18,215 yen (% and amount of change from the end of November 2013: -253 yen, -1.4%) <Average contract rent of the existing 43 properties(*) at the end of May 2014: 18,481 yen(% and amount of change from the end of November 2013: +9 yen, unchanged)> Financial Situation LTV (based on total assets): 43.0% (end of 16th FP: 40.6%) Average remaining years at the end of the Fiscal Period: 3.82 years (end of 16th FP: 3.43 years) Ratio of fixed interest: 80.3% (end of 16th FP: 83.8%) * Calculated based on properties excluding Integral Tower and Daiwa Shibuya SS Building (*) Average Contract Rent is, as a rule, calculated after excluding all non-office uses such as retail, residence, and warehouse. 4

6 Highlights of the 1 th Fiscal Period Results of the 17th Fiscal Period (Million Yen) 16th Fiscal Period 17th Fiscal Period Difference (44 properties) (44 properties) Operating Revenue 8,432 8, Operating Expense 4,755 4, Operation Income 3,677 3, Non-Operating expense Ordinary Income 2,955 3, Net Income 2,959 3, Dividend per Unit 7,478 yen 7,621 yen 143 yen NAV per unit 459,893 yen 467,984 yen 8,091 yen Occupancy Rate 96.3% 96.4% 0.1% NOI Yield (annualized)* 3.4% 3.4% 0.0% Increase factors: Gain on property sale (1 property) (+600 million) Rental revenues of property acquired during the period (1 property) (+300 million) Full contribution of rental revenues of acquired properties (3 properties) in the previous period (+261 million) Other lease business revenue (Proceeds for restoration and repairs, etc.) (+27 million) Decrease factors: Utilities revenues (-102 million) Rental revenues of existing properties (41 properties) (-55 million) (* Of which, -66 million for E SPACE TOWER, -46 million for Daiwa Ginza, -46 million for Daiwa Higashi Ikebukuro) Increase factors: Outsourcing expenses (+37 million) Depreciation (+26 million) Repair expenses (+21 million) Property-related taxes (+15 million) Asset management fees (+13 million) Utilities expenses (-34 million) Increase factors: Interest expenses NAV per unit = (Unitholders equity + Total appraisal value at the end of fiscal period Total property book value at the end of fiscal period) / Investment units issued and outstanding (+31 million) NOI Yield (annualized) calculated based on book value (Million Yen) (Reference) 17th Fiscal Period Increase factors: 17th Fiscal Period Rental revenues of property additionally Comparison of forecasts with Forecast (announced Difference (44 properties) acquired during the period (Integral Tower) (+6 million) results of 17th Fiscal Period January 2014) Rental revenues of existing properties Operating Revenue 8,441 8, ( (+44 million) Utilities revenue (+45 million) Operating Expense 4,685 4, Other lease business revenue (+40 million) Net Income 2,984 3, (Proceeds for restoration and repairs, cancellation penalty, etc.) Dividend per Unit 7,540 yen 7,621 yen 81 yen Increase factors: Utilities expenses (+60 million) Occupancy Rate 94.8% 96.4% 1.6% Repair expenses (+36 million) Outsourcing expenses (+24 million) This document is not material disclosed in compliance with the Financial Instruments Depreciation and Exchange Law or any regulation of similar nature, (+14 million) nor is it intended for the purposes of solicitation. Daiwa Office Investment Corporation Asset advises management reader to make fees investment decisions at their own judgment. (+8 million) 5

7 Highlights of Forecasts for the 18th and 19th Fiscal Periods The 18th Fiscal Period (Forecast) (Million Yen) 18th FP Forecast Difference compared to Ending November th FP (46 properties) Operating Revenue 9,692 1,105 Operating Expense 5, Operation Income 4, Non-Operating expense Net Income 3, Dividend per Unit 7,820 yen 199 yen Occupancy Rate 95.2% -1.2% NOI Yield (annualized)* 3.6% 0.2% Increase factors: Rental revenues of properties (2 properties) acquired during the period Full contribution of properties (1 property) acquired in the previous period Utilities revenue Rental revenues of existing properties (42 properties) Decrease factors: Rental revenues of sold property (1 property) Other lease business revenue Increase factors: Utilities revenue Depreciation Asset management fees Property-related taxes Outsourcing expenses Decrease factors: Repair expenses Increase factors: Investment Unit Issuance Expenses Interest expenses (+513 million) (+448 million) (+253 million) (+15 million) (-99 million) (-51 million) (+215 million) (+138 million) (+84 million) (+82 million) (+51 million) (-95 million) (+73 million) (+44 million) 19th FP Forecast Difference compared to Ending May th FP (46 properties) Operating Revenue 9, The 19th Fiscal Period (Forecast) (Million Yen) Operating Expense 5, Operation Income 4, Non-Operating expense Net Income 3, Dividend per Unit 8,328 yen 508 yen Occupancy Rate 95.8% 0.6% NOI Yield (annualized)* 3.7% 0.1% Increase factors: Full contribution of rental revenues of properties (3 properties) acquired in the previous period (+175 million) Rental revenues of existing properties (44 properties) (+114 million) Decrease factors: Utilities revenue (-103 million) Other lease business revenue (-41 million) Increase factors: Depreciation (+45 million) Other commission paid (+21 million) Asset management fees (+15 million) Property-related taxes (+6 million) Decrease factors: Utilities revenue (-26 million) Repair expenses (-10 million) Decrease factors: Investment Unit Issuance Expenses (-73 million) Decrease in costs in accordance with redemption of subordinated investment corporation bonds (-11 million) Interest expenses (-5 million) This document is not material disclosed in compliance with the *Expected Financial Instruments NOI Yield (annualized) and Exchange is Law calculated or any regulation based on of the similar book nature, value for the17th Fiscal nor is it intended for the purposes of solicitation. Daiwa Office Period Investment for existing Corporation properties, advises and reader based to make on acquisition investment price decisions for newly at their acquired own judgment. properties. 6

8 Changes in Dividends Changes in Dividends per Unit (Yen) (*) (*) (*) Forecast from six months earlier for 18th FP and forecast from year earlier for 19th FP are figures of revised distribution forecast announced on June 17,

9 Section 2 Highlights of Public Offering in June 2014

10 Changes in Major Indices due to Public Offering Major Indices End of the 16th FP (FP Ended November 2013) Properties Acquired Upon Public Offering After Public Offering Number of Properties 44 properties 3 properties 46 properties Total Assets (Total of (planned) acquisition prices) billion yen 38.7 billion yen billion yen NOI Yield (Annualized) 34.2% 47.6% 35.4% NAV per Unit 459,893 yen - 469,660 yen Average Building Age 21.6 years 11.5 years 21.0 years Number of Tenants 442 companies 26 companies 474 companies Occupancy Rate 96.3% 98.7% 96.7% LTV 40.6% % Acquisition Capability 68.2 billion yen billion yen Average Debt Remaining Period 3.4 years years (Note) Major indices After Public Offering exclude Daiwa Shibuya SS, which was sold during the 17th FP. Distribution Forecast per Unit 17th Fiscal Period Before Public Offering 7,540 yen After Public offering Up 10.5% 18th Fiscal Period 7,570 yen 7,820 yen 19th Fiscal Period 8,328 yen 9

11 Summary of Public Offering in June 2014 Summary of Public Offering Properties Acquired Upon Capital Increase through Public Offering Issuance type Public offering (Domestic offering) Issuance resolution date June 17, 2014 Price determination date June 25, 2014 Application period From June 26, 2014 to June 27, 2014 Payment date Number of units issued and outstanding before public offering Number of units offered Number of units offered Issue price Number of units offered Primary offering: July 2, 2014 Third-party allocation: July 30, 2014 (scheduled) 395,798 units Total: 45,202 units, Primary offering: 41,092 units, Third-party allocation: 4,110 units (maximum, scheduled) 441,000 units (including the maximum number of units by third-party allocation) 466,537 yen 20,374 million yen (including amounts of thirdparty allocation) <Azabu Green Terrace> Acquisition price: 14,000 million yen (Acquisition date: July 4, 2014) Expected NOI yield: 4.6% (yen) 600, , , ,000 <Kitahama Grand Building> Acquisition price: 9,481 million yen (Planned acquisition date: August 1, 2014) Expected NOI yield: 5.0% Changes in Investment Unit Price (daily) Issuance resolution date Price determination date Trading volume ( ) (right axis) Investment ( ) unit price (left axis) TSE REIT REIT ( ) Index (left axis) <Integral Tower> Acquisition price: 15,220 million yen (Acquisition date: May 29, 2014) Expected NOI yield: 4.8% (units) 14,000 12,000 10,000 8,000 6,000 4,000 2, ,000 0 Jun. Jun. Jun. Jun. Jun. Jun. Jun. Jul. Jul. Jul. Jul. Jul. Jul. This document is not material disclosed in compliance with the Financial 6/11 Instruments 6/13 6/17 and 6/19 Exchange 6/23 6/25 Law 6/27 or any 7/1 regulation 1 7/3 3 of 7/7 7similar 7/9 9 nature, 7/11 7/15 10

12 Section 3 Internal Growth

13 Leasing Market of Tokyo Office Buildings (Yen / Tsubo) Leasing Market of Tokyo Office Market Rent (Yen / Tsubo) Trend of Office Rent and Vacancy Rate of 5 Central Wards of Tokyo (Rent) 2008/9 (Vacancy Rate) B Class Bldg. 2007/9 2001/6 2000/1 A Class Bldg. Rental Market Clock (conceptual chart) Large scale buildings* of 5 Central Wards of Tokyo 2003/10 (Tsubo) (Data): Miki Shoji Predicted figures From 2012/6 2012/ /6 2013/12 To 2012/ /6 2013/ /6 Change in rent area 101,574 66,426 77, ,219 Change in percentage 2.4% 1.5% 1.7% 8.3% 2008/9 2007/9 2001/6 2011/ /6 2014/6 2013/ /6 Office Buildings of 5 Central Wards of Tokyo 2000/1 2003/10 (Data):Transition of the supply and demand balance (standard scenario) from CBRE Office market medium term forecast 2014 Tokyo's 23 wards 2011/ /6 2013/6 2013/12 (Data): Sanko Estate compiled by Daiwa Real Estate Asset Management (Vacancy Rate) * Large scale buildings: A floor area of 200 tsubo (661.2m 2 ) or more. 2012/6 12

14 Analyses of Leasing Income (1) - Changes in Occupancy and Cancellation Rates - Occupancy Rate Occupancy Rate and Forecast (1) The 17th Fiscal Period (Actual) 96.4 Occupancy rate of shinyon curumu increased from 67.5% to 96.3%. Occupancy rate of Daiwa Meieki increased from 81.3% to 98.4%. Occupancy rate of Daiwa Shibaura recovered from 90.2% to 98.7%. Daiwa Minami-Aoyama reached full occupancy. (2) The 18th Fiscal Period (Forecast) 95.2 Rate of New Leases / Cancellations* Cancellation of some tenants at Daiwa Onarimon and Akasaka Business Place, etc. are expected, so the forecast occupancy rate at the end of the 18th FP will be 95.2% with a 5.6% cancellation rate. Full occupancy expected for total of 4 properties including E Space Tower. (3) The 19th Fiscal Period (Forecast) 95.8 Full occupancy is expected for Daiwa Nihonbashi Horidomecho** and shinyon curumu, so the forecast occupancy rate for the end of the 19th FP will be 95.8%. ** The name of the asset under management was changed on April 1, *Ratio transition of new leases and cancellations areas to the total rentable area. 13

15 Analyses of Leasing Income (2) - Diversification of Tenants and Transition of New Lease and Cancellations - Tenant numbers (Cases) Diversification of Tenants Rent Area ( (Cases) Transition of New Leases and Cancellations and its Reasons * Previous number of leases: 19 * Office and retail are the target tenants (excluding residence and warehouse) 16th Period Cost Reduction Space Expansion Consolidation Space Reduction Better Location New Leases Cancellations * Excluding residence and warehouse tenants. Other Total 14

16 Analyses of Leasing Income (3) - Status of Contract Rent - (Yen/ Tsubo) Average Contract Rent and Market Rent * The contract rent of the existing 43 properties in the 17th Fiscal Period was 18,481 yen (period-onperiod change of +9 yen). Contract Renewal Area The 18th Fiscal Period Contract Renewal Tenants * The ratio of areas scheduled for contract renewal to the total rentable area (250, m 2 ) at the end of 17th Fiscal Period. The 17h Fiscal Period Contract Renewal * The ratio of areas which had contract renewal during 17h Fiscal Period to the total rentable area (235, m 2 ) at the end of 16th Fiscal Period. * Average Contract Rent is an average monthly rent of the tenants contracting at the end of the Fiscal period. ** Unit rent index is the comparison of existing properties rents with the existing properties rents in the preceding period for consecutive periods, indexed with the figure at the end of the 7th FP as 100. (Million Yen) Attribution Analysis / Monthly Contract Rent* Decrease by Rent Revisions Increase by Rent Revisions Increase by New Leases Decrease by Tenants Cancellations Increase by New Acquisition End of 16th FP Monthly Contract Rent End of 17th FP Monthly Contract Rent * Monthly Contact Rent is a total of final rent from tenants contracting at the end of the Fiscal Period. Monthly Contract Rent for Shinjuku Maynds Tower was adjusted on June 7. Cancellation 15

17 Analyses of Leasing Income (4) - Portfolio Map: Increase and Decrease in Unit Contract Rent Compared with Previous Fiscal Period - 5 Central Wards of Tokyo Comparison with previous Fiscal Period Increase and decrease of unit contract rent Unit rent increase : 11 buildings Unit rent decrease : 16 buildings Unit rent maintained : 16 buildings Greater Tokyo Daiwa Higashi Ikebukuro Daiwa Osaki 3-chome Daiwa Kinshicho Daiwa Shinagawa North Benex S-3 Shinjuku Maynds Tower Shibuya Ward SHIBUYA EDGE E SPACE TOWER Daiwa Shibuya Dogenzaka Shinjuku Ward Daiwa Misakicho Daiwa Sarugakucho Daiwa Jinbocho 3-chome Daiwa Jimbocho shinyon curumu Daiwa Kudan Daiwa Nihonbashi Hongokucho Daiwa Kodenmacho Daiwa Nihonbashi Horidomecho Daiwa Kojimachi 4-chome Daiwa Nihonbashi Honcho Chuo Daiwa Kayabacho Build. Daiwa Jingumae Chiyoda Ward Akasaka Business Place Ward Daiwa Kyobashi Daiwa Ginza Annex Daiwa Ginza 1-chome Daiwa Minami Aoyama Daiwa Ginza Daiwa Tsukijiekimae Daiwa Tsukiji Daiwa Shibuya Miyamasuzaka Daiwa Tsukiji 616 Daiwa Nishi-Shimbashi Daiwa Tsukishima Daiwa Onarimon Daiwa Shinbashi510 Daiwa A Hamamatsucho Daiwa Azabudai Minato Ward Daiwa Shibadaimon Daiwa Shibaura Daiwa Kamiooka Regional Cities Honshu Daiwa Meieki Meieki Daiwa Daiwa Minami-Senba As of November 30, 2013 As of May 31, 2014 (Note 1) The names of assets under management were changed on April 1, 2014 for Nihonbashi MS Building, Sunline Building No.7, Jimbocho Place, Nihonbashi-Hongokucho Tosei Building, Tosen Dogenzaka Daini Building, Nisseki Shibuya Building, West Park Osaki, Kamiooka Eye Mark This Building, document Honshu is Meieki not material Building. disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, (Note 2) Integral Tower is not indicated since they were acquired in nor the is 17th it intended Fiscal Period. for the purposes of solicitation. Daiwa Office Investment Corporation advises reader to make investment decisions at their own judgment. 16

18 Internal Growth Strategies (Cases) Leasing Activities Asset Management Department Office Management Team Residential Management Team Healthcare Investment Team Investment Planning Team Construction Management Team 8 members 3 members 2 members Leasing: Collection of broad and accurate leasing information Relations with Tenants: Emphasis on communication with tenants Engineering: Verification of Construction Plans and Environmental Responses Middle office work: Budget and performance management for the portfolios Engineering: Formulation and implementation of construction planning of the assets Office Management Team Aims to maximize asset value with the specialists group by placing personnel in charge of all properties in the investment corporation s portfolio. (Note) Asset management work history is the number of years engaged in the relevant work (as of end of June 2014) and does not indicate the number of years employed at the asset management company. Teruaki Saito Asset management work history: 8 years 6 months Keitaro Kumagai Asset management work history: 1 year 5 months Takafumi Ushiku Asset management work history: 9 years 10 months Taku Narahara Asset management work history: 7 years 10 months Hideki Kachi Asset management work history: 9 years 6 months Chie Kamimura Asset management work history: 7 years 7 months Tadashi Matsumoto Asset management work history: 3 years 8 months Yuuki Kobatake Asset management work history: 1 year 9 months Viewings held (number of times and of visitors) Period of viewings (December 2013 to May 2014) Number of viewings Number of visitors people total 17

19 Occupancy Rate of the Properties Subject to Leasing Improvement in the 17th FP shinyon curumu (Acquisition Price: 9,650 million yen) Highly convenient property located a 4-minute walk from the new south exit of Shinjuku Station on JR and directly connected to Shinjuku 3- chome Station on the Tokyo Metro Marunouchi Line and Fuku-toshin Line. Area expects to expand further with the development of the station bldg. scheduled for opening in Daiwa Meieki (Acquisition Price: 5,300 million yen) Property located a 6-minute walk from Exit 7 of Nagoya Station on JR and Nagoya city metro line and 2-minute walk from underground doorway leading to Nagoya Station underground shopping arcade. Area of business accumulation growing year by year with large scale redevelopment being planned. Daiwa Higashi-Ikebukuro (Acquisition Price: 2,958 million yen) Middle-scale property located a 10-minute walk from Higashi- Ikebukuro Station on the Tokyo Metro Yurakucho Line and a 12- minute walk from JR Ikebukuro Station. The property is close to Sunshine City and its exterior with a solid feel is characteristic. Time of Acquisition ( 12/12) Time of Acquisition ( 13/2) It is one of the low occupant properties acquired in the 15th Fiscal Period. A broad leasing strategy was implemented by expanding acceptable business types and categories with shift to building management considering locational characteristics. Achieved high occupancy rate by continuing to attract tenants selectively while focusing on unit rent, assuming that the area has growth potential with development in the Shinjuku new south exit. It is one of the low occupant properties acquired in the 15th Fiscal Period. Responded flexibly to various tenant needs by acting promptly for sectional divisions, provision of large parking space and such. Succeeded in taking in tenant needs while setting appropriate leasing terms for market situations by successively recognizing market conditions and focusing on leasing terms with view to the large supply expected in a few years. A certain level of cancellation of tenants was expected for the 17th Fiscal Period. After enhancing the equipment grade such as the renewal of security system, made a broad appeal to the market as a property that can function as a base covering Tokyo s Johoku Area and even some of Saitama. As a result of the above efforts, successfully attracted tenants with rents close to the market upper limit and achieved high occupancy rate. 18

20 Value-up Properties in the 18th FP Properties subject to leasing improvement Daiwa Minami-Senba (Acquisition price: 4,810 million yen) Address 6/ 4-chome, Minami-Senba, Chuo-ku, Osaka City, Osaka Site Area 1, m 2 Structure SRC Floors B1/8F Use Office / Store Total Floor Area 7,738.47m 2 Occupancy Rate 75.7% (May 2014) Completion September 1986 The property boasts high transportation convenience being located within a 3 minute-walk from Shinsaibashi Station on the Osaka City Subway Midosuji Line, Nagahori- Tsurumi Line and a 4 minute-walk from Yotsubashi Station on the Yotsubashi Line. The property houses renowned brand shops on the lower floors and stands in one of the most commercialized area in the Osaka office area. As a certain level of cancellation of tenants took place in the 17th Fiscal Period, it will be a property subject to leasing improvement. Will expand acceptable business types and categories taking locational characteristics into consideration, set appropriate level of rents, and provide information promptly and accurately to the market. Aim to realize early occupancy rate recovery by reinforcing an appeal to end tenants. Shinjuku Maynds Tower (Acquisition price: 133,800 million yen) Energy-saving Introduction of individual heat sources Introduction of LED lighting to common areas Visualization of energy (introduction of BEMS through the renewal of the central monitor) Scheduled to be completed in (scheduled) Strategic value-up properties <Concept of strategic value-up> Shinjuku Maynds Tower, which was completed in 1995, is approaching its first major challenge with the physical, economic and social degradation of various facilities. Upon updating that will inevitably be required due to aging degradation, we seek not simple replacement, but we promote strategic value-up plans that will lead to adding values to the property in various aspects including measures for energy-saving, CS improvement and BCP. CS Improvement Computerizing VAV control (air/temperature control) Scheduled to be completed in 2015 Renewal construction of underground shopping floors Renewal construction of common areas on office floors Renewal construction of common areas on office floors (until 2014) CS improvement Introduction of individual heat sources Energy-saving Long-term earthquake countermeasure construction on elevators BCP measures Installment of emergency disaster kit cabinets in elevators BCP measures Introduction of LED lighting to parking area Energy-saving Renewal construction on shopping floors CS improvement Introduction of LED lighting to underground entrance hall Energy-saving Visualization of energy (introduction of BEMS through the renewal of the central monitor) Energy-saving Computerizing air/temperature control (VAV control) CS improvement BCP measures Long-term earthquake countermeasure construction on elevators Installment of emergency disaster kit cabinets in elevators (Installment work of individual heating sources) (Long-term earthquake countermeasure construction) (Renewal construction of underground shopping floors) 19

21 Performance of Shinjuku Maynds Tower & E SPACE TOWER Acquisition Amount Ratio of Maynds Tower & E Space Tower Shinjuku Maynds Tower Occupancy Rate Other Properties: 59.3% Shinjuku Maynds Tower & E SPACE TOWER: 40.7% Office Building Supply in the 23 Wards of Tokyo E SPACE TOWER Occupancy Rate Others Chiyoda-ku 1510,000m ,000m 2 Shibuya-ku 190,000m 2 Shinjuku-ku 450,000m 2 Minato-ku 450,000m 2 Chuo-ku 520,000m 2 Others 930,000m 2 Chiyoda-ku 1400,000m 2 Shibuya-ku 190,000m 2 Shinjuku-ku 210,000m 2 Minato-ku 1050,000m 2 Chuo-ku 590,000m 2 Upon Acquisition Source: Mori Trust Large scale properties are offices with total floor area of 10,000m 2 or more. * E SPACE TOWER was acquired in July

22 Measures to Increase Portfolio Value BCP Measures (security enhanced) Surveillance cameras are added to 6 properties in the portfolio Energy Saving Measures Ceiling renovation at Daiwa A Hamamatsucho (Daiwa Kyobashi, Wind shelter) (Daiwa Minami-Aoyama, Service entrance) Strategic renewal works Renewal works for air conditioning system at Daiwa A Hamamatsucho and Daiwa Misakicho Before) After) Strategic tenant attraction Daiwa Ginza (Kagami Crystal) Coexistence with Local Societies Daiwa Onarimon Free coffee offered by UCC Holdings Co., Ltd. at the Tokyo Marathon (Daiwa A Hamamatsucho) (Daiwa Misakicho) Upgrading common area at E SPACE TOWER Before) After) 21

23 Actions Taken for Environmental Efforts Acquired Green Star rating for 2nd consecutive year at GRESB 2013 Following the participation in 2012, Daiwa Real Estate Asset Management participated in the 2013 Global Real Estate Sustainability Benchmark (GRESB) survey for the portfolio of Daiwa Office Investment Corporation and earned the best rating of Green Star from GRESB Survey Daiwa Real Estate Asset Management received a high evaluation on sustainability from both Management and Policy and Implementation and Measurement aspects for the second consecutive year. GRESB is an industry-led international organization which intends to evaluate sustainability performance of real estate portfolios. Daiwa Real Estate Asset Management will continue to make efforts to improve sustainability performance. Shinjuku Maynds Tower obtains A rank in CASBEE Property Appraisal Shinjuku Maynds Tower was awarded A rank in CASBEE for Market Promotion (2014 edition) certification system. Comprehensive Assessment System for Built Environment Efficiency (CASBEE) is a system established under the leadership of Ministry of Land, Infrastructure, Transport and Tourism in 2001 with an aim to comprehensively recognize and assess highly environmental and well-managed real estate properties such as office buildings. CASBEE for Market Promotion was developed for utilization of CASBEE s building assessment results when making appraisals, and evaluation standards are drawn up so that real estate developers and dealers would be able to utilize CASBEE. Evaluation items are comprised of five categories of energy/greenhouse gases, water, utilization of sources/safety, biodiversity/land and indoor environment. These are similar to environmental performance evaluation items in LEED, which is a global environmental assessment program. (Photo) Shinjuku Maynds Tower 22

24 Section 4 External Growth

25 Acquisition Policy Acquisition/Sale Policy and Status of Deliberation for Property Acquisitions Invest heavily in the five central wards of Tokyo and equivalent area. Thoroughly select properties in view of actual demand toward location (distance to station, station power, crowd attraction, surrounding environment), building specs, etc. Target properties to improve stability and profitability of our existing portfolio. Invest in buildings less than 25 years of building age. Sale Policy Consider replacement of properties if necessary by sales in light of properties future competitiveness, profitability, etc. Distance to station (minutes) Nearer Azabu Green Terrace Daiwa Meieki SHIBUYA EDGE Distribution Chart of Portfolio Properties Daiwa Nishishimbashi Daiwa Jingumae Daiwa Kinshicho Daiwa Higashi-Ikebukuro Daiwa Tsukiji 616 Daiwa Shibaura Daiwa Sarugakucho Daiwa Azabudai Daiwa Shimbashi 510 Daiwa Shibadaimon Daiwa Nihonbashi Horidomecho / Daiwa A Hamamatsucho Daiwa Nihonbashi Hongokucho Daiwa Shinagawa North Daiwa Misakicho Daiwa Shibuya Dogenzaka Daiwa Nihombashi Honcho Kitahama Grand Building Daiwa Minami-Senba Daiwa Osaki 3-chome Daiwa Tsukishima Bldg. Daiwa Shibuya Miyamasuzaka Daiwa Onarimon Daiwa Ginza Daiwa Minami Aoyama Benex S-3 Daiwa Kodemmacho Daiwa Ginza Annex Daiwa Kayabacho Building E SPACE TOWER Integral Tower Daiwa Tsukiji Daiwa Kyobashi Daiwa Jinbocho 3-chome Akasaka Business Place Daiwa Kudan Daiwa Tsukijiekimae Daiwa Kojimachi 4-chome Daiwa Ginza 1-chome Daiwa Kamiooka shinyon curumu Daiwa Jimbocho Shinjuku Maynds Tower Building Age (Year) Newer (Note 1) Building age indicates the age as of the date of this document. (Note 2) Distance to station indicates figures calculated based on the code of fair competition concerning property description, which assumes that one minute is required for every 80m of the distance from each property to the nearest station. (Note 3) indicates properties acquired before the sponsor change, indicates properties acquired after the sponsor change, and indicates properties acquired or planned to be acquired in the 17th FP. Initiatives for Continuous Property Acquisitions Information gathering capability Continuous acquisitions of competitive properties Acquisition capability Financing capability * Number of gross proposals. 24

26 Changes in Asset Size and Trading Performance Active investment for competitive properties after thorough selection Acquisition capability 32.0 Billion yen Acquisition capability 75.1 Billion yen 25

27 Properties Acquired after Sponsor Change (Note) The sum of ; i) the total (planned) acquisition price This from document the time is of not the material above disclosed sponsor in change compliance up to with the the end Financial of the current Instruments public and offering Exchange and Law ii) (planned) or any regulation prices for of similar additional nature, acquisition of existing properties or of the site in existing properties nor is during it intended the same for the period, purposes are of 126,442 solicitation. million Daiwa yen. Office Investment Corporation advises reader to make investment decisions at their own judgment. 26

28 Portfolio after Acquisitions of Three Properties Ratio of Major Properties in Portfolio after Public Offering (Note 1) (based on (planned) acquisition price) 46 properties, 387,557 million yen 44 properties 352,786 million yen as of the end of the 16th Fiscal Period Shinjuku Maynds Tower The ratio for top 10 properties expands to 65% The total of the three properties acquired upon the public offering accounted for 10% of the entire portfolio, and the ratio for top 10 properties expanded to 65%. We will make proactive investment in properties of various scales with the expanded investment capacity. Portfolio replacement One property was sold in the 17th Fiscal Period. We will consider portfolio replacement through sales of properties going forward by analyzing long-term profitability and costs for each property. E SPACE TOWER Integral Tower (Note 2) (Note 1) Portfolio after public offering refers to the assets of 46 properties, which include the assets (44 properties) held at the end of 16th Fiscal Period with addition of Integral Tower (acquired on May 29, 2014), Azabu 8 1 Daiwa SS Green Terrace (acquired on July 4, 2014) and Kitahama Grand Building (to be acquired on August 1, 2014), excluding Daiwa Shibuya SS Building (sold on May 30, 2014). (Note 2) The names and investment ratios of the top 10 properties on a (planned) acquisition price basis after the completion of public offering are indicated. Daiwa Shibuya SS Building Location Shibuya, Shibuya-ku, Tokyo Transfer Date May 30, 2014 Book Value* Sales Value 3,783 million yen 3,800 million yen Appraisal Value* 3,840 million yen Differences between Sales Value and Book Value** 17 million yen (+0.4% ) Completion July 8, 1977 * Prices are as of November 30, ** The difference between Sale Price and Book Value differs from loss on sale. 27

29 Extensive Property Sourcing Route Developers, general contractors, general trading companies and railway companies Real estate funds Sale of developed properties and owned properties Sale for off-balancing after change of accounting system Intimate exchange of information as non-real estate type sponsor Financial institutions, creditors and CMBS (commercial mortgage-backed securities) Forced sale of non-recourse loans Legal final redemption of CMBS Sourcing strategy utilizing status as nonreal estate type REIT Secure wide-ranging sourcing route using status as an independent type REIT to establish strong relations with business companies, financial institutions, leading real estate brokers and other parties. Target optimum expansion of portfolio based on in-depth data analysis upon careful selection from among the wide-ranging information on properties that comes from diverse sourcing. Exit for when funds investment periods end Withdrawal from foreign funds Loss cut sales Utilize financial technologies gained through sponsors experience in structured finance General business companies Slimming balance sheets Consolidation to core business Caching for new investment Utilize intimate relations as a financial institution sponsor Proposals based on sponsor relation established through many years 28

30 17th FP Property Acquisition (1) Azabu Green Terrace Acquisition Price: 14,000 million yen (Acquisition Date: July 4, 2014) Expected NOI: 4.6% Embassy of People s Republic of China Embassy of Lithuania in Japan Embassy of State of Qatar in Japan Features of the Property The Property has 770 tsubos of maximum floor space with individual air conditioning allowing fine adjustment, and boasts functionality responding to flexible sectional divisions. The Property has also been recognized for its stylish design, receiving the Good Design Award in 2011, etc. Initiatives for creating large-scale greenery, such as improving the environment by reducing the heat-island phenomenon and giving consideration to biodiversity, taken at the Property are highly evaluated leading to receiving several environmental awards including from the urban development section of the Top 100 Biodiversity Focused Properties organized by Organization for Landscape and Urban Green Infrastructure and supported by the Ministry of Land, Infrastructure, Transport and Tourism and the Ministry of the Environment, etc. Location Site Area Structure/ Floor Total Floor Area Appraisal Value , Minami Azabu, Minato-ku, Tokyo 3, S/RC/B1/6F 17, ,000 million yen Construction Date September, 2009 Occupancy Rate Number of Tenants (Note) At the time of the acquisition 100% (Note) 10 (Note) Characteristics of Local Area The Property is located in Minami-Azabu area, which is surrounded by the Moto-Azabu/Hiroo international area where a number of embassies and high-end residences for foreigners are situated and the Shirokane-takanawa area that is very popular as a residential area with a high class cultural environment. Tokyo Metro Subway Nanboku-Line and Tokyo Municipal Subway Mita-Line are available from Shirokane-takanawa Station, the nearest station, offering convenient access to major business districts such as Meguro, Roppongi, Nagatacho and Otemachi. As it stands in an area that is relatively disaster-free, stable and secure land, it is a highly evaluated office nor is it intended for property the purposes even of in solicitation. terms of its Daiwa BCP Office qualifications. Investment Corporation advises reader to make investment decisions at their own judgment. 29

31 17th FP Property Acquisition (2) Kitahama Grand Building Scheduled Acquisition Property Acquisition Price: 9,481 million yen (Scheduled Acquisition Date: August 1, 2014) Expected NOI: 5.0% Integral Tower Acquisition Price: 15,220 million yen (Acquisition Date: May 29, 2014) Expected NOI: 4.8% Seiyu Lumine Location Aw aji-cho, Chuo-ku, Osaka-shi, Osaka Appraisal Value 10,000 million yen Site Area 2, Construction Date February, 2008 Structure/Floor S/SRC/B1/16F Occupancy Rate 100.0% (Note) Total Floor Area 18, Number of Tenants 6 (Note) Transportation access The Property is located 300 meters south of or approximately a 4 minute-walk from Kitahama Station of Osaka Municipal Subway Sakaisuji Line. It stands in the area which is regarded as Sakaisuji- Honmachi business zone with office buildings around the junctions of Sakaisuji & Honnmachi-Dori and Chuo-Odori, and is also adjacent to the Kitahama zone. Transportation access (Note) At the time of the acquisition The Property is a 4-minute walk from Ogikubo Station on the JR Chuo, Sobu and Tokyo Metro Marunouchi lines and enjoys good access to major office districts such as Shinjuku, Akasaka, Ginza, Marunouchi and Otemachi. Features of the property The Ogikubo area may be sought as a sales/service base for the western Tokyo area or as a back-up office base with consideration to The Property has a spacious entrance hall with 5m of ceiling height, and BCP. Furthermore, since there is little supply of office buildings with the ceiling height for standard floor is This 2,800mm document with is not about material 260 disclosed tsubo in compliance of with the high Financial specifications Instruments and in the Exchange area, Law the or Property any regulation which of similar is situated nature, in front of standard orderly shape floor space without nor is it pillars. intended for the purposes of solicitation. Daiwa Office Ogikubo Investment Station Corporation and advises highly reader visible to make is a investment hard-to-find decisions property. at their own judgment. Features of the property (Note) At the time of the acquisition Location Kamiogi, Suginami-ku, Tokyo Appraisal Value 15,700 million yen Site Area 3, Construction Date June, 1993 Structure/Floor S/SRC/B2/18F Occupancy Rate 96.8% (Note) Total Floor Area 25, Number of Tenants 10 (Note) 30

32 Section 5 Financial Strategy

33 Status of Interest-bearing Liabilities (1) (Billion Yen) Loan to Value Trend Status of Interest-bearing Liabilities (End of 17th Fiscal Period, after the public offering) * After the public offering refers to after the refinancing conducted on July 8, Ratio of Fixed and Floating Borrowings Ratio of Long and Short-Term Borrowings Upper limit range LTV in the medium-term target After Public Offering End of 17th Fiscal Period After Public Offering End of 17th Fiscal Period Fixed interest Floating interest Status of Rating * Subordinated investment corporation bonds scheduled for redemption in September 2014 are included in Current position of borrowings. <Obtained on February 25, 2014> Japan Credit Rating Agency, Ltd. (JCR) Long-term issuer rating Rating outlook: Stable Long-term borrowings Current position of borrowings <Obtained on September 5, 2013> Rating and Investment Information, Inc. (R&I) *LTV( based on Total Asset) Total interest-bearing liabilities / Total Asset Issuer rating Rating outlook: Stable 32

34 Status of Interest-bearing Liabilities (1) (Million Yen) Repayment Dates (As of July 8, 2014) (Years) Changes in Procured Years of Interest-Bearing Liabilities (Years) Diversified borrowings of 19 billion yen (of which, 1.5 billion yen was repaid with cash on hand) 33

35 Status of Interest-bearing Liabilities (3) - Total Borrowing from Financial Institutions - Transacting Financial Institutions as of the 17th Fiscal Period: 26 Banks Name of Financial Institution Sumitomo Mitsui Banking Corporation. Sumitomo Mitsui Trust Bank, Limited Balance (million yen) Comparison with previous period Balance ratio Name of Financial Institution Balance (million yen) Comparison with previous period Balance ratio 33,400 3, % The Shizuoka Bank, Ltd 2, % 20,350 2, % Tokio Marine & Nichido Fire Insurance Co., Ltd. 2, % Development Bank of Japan Inc. 18,750 1, % The Musashino Bank, Ltd. 2, % Mizuho Bank, Ltd. 13,900 2, % The Bank of Tokyo-Mitsubishi UFJ, Ltd. The Higashi-Nippon Bank, Limited 1, % 11,500 6, % The Hiroshima Bank, Ltd. 1, % Shinsei Bank, Ltd. 11, % The Kagawa Bank, Ltd 1, % Resona Bank, Limited 9, % The 77 Bank, Ltd. 1, % Aozora Bank, Ltd. 6, % The Bank of Yokohama, Ltd % Mitsubishi UFJ Trust and Banking Corporation Kansai Urban Banking Corporation 5, % The Yamaguchi Bank, Ltd % 5, % Taiyo Life Insurance Company % Mizuho Trust & Banking Co., Ltd. 5, % Nippon Life Insurance Company % The Bank of Fukuoka, Ltd. 4, % Fukoku Mutual Life Insurance Company % ORIX Bank Corporation 2, % Total Borrowings 160,200 16, % The Gunma Bank, Ltd. 2, % Note: Balance is rounded down to less than million yen. Investment Corporation Bonds Subordinated investment corporation bonds Balance (million yen) Comparison with previous period 3,

36 Unitholders as of the End of the 17th Fiscal Period Unitholders Share by Investor Type List of Top 10 Investors Investor Type 16th Fiscal Period Number of Units 17th Fiscal Period Number of Units Change in Units Rate* No. Investor Name 16th Fiscal Period Number of Units 17th Fiscal Period Number of Units Change in Units Rate* Individuals 28,742 23,461-5, % Financial Institutions 151, ,137 9, % Commercial Bank % Regional Bank 1,648 2, % Trust Bank 145, ,207 10, % Life Insurance % Non-life Insurance 4,212 2,279-1, % Other Financial Institution % 1 Daiwa Investment Management Inc. 128, , % 2 Japan Trustee Services Bank, Ltd. (Trust Account) 62,707 74,008 11, % 3 Daiwa Securities Group Inc. 59,321 59, % The Master Trust Bank of Japan, Ltd. (Investment Trust Account) 32,259 32, % Trust & Custody Services Bank, Ltd. (Securities Investment Trust Account) 28,524 28, % The Nomura Trust and Banking Co,.Ltd. (Investment Trust Account) 20,857 19,164-1, % 7 Nomura Bank (Luxembourg) S.A. 4,969 3,128-1, % Other Domestic Corporation 190, , % Foreigner 23,041 19,237-3, % Securities 1,117 1, % Total 395, , % (*) Rounded to the second decimal place. The Fuji Fire and Marine Insurance 8 Co,.Ltd. State Street Bank and Trust Company BBH for Pyramis GR TR for Employee 10 Bene PL Pyramis Sel Int SM Cap Comm (*) Rounded to the second decimal place. 4,212 2,086-2, % 1, % % 35

37 Activities in the 18th Fiscal Period Internal Growth Bonji-Tettei Based on the portfolio centering on Tokyo, link the improvement in the Tokyo office market to internal growth by thoroughly implementing a hands-on approach. External Growth Continuous property acquisitions Aim for maximum utilization of acquisition capacity due to the capital increase by further strengthening acquisition activities towards the end of the fiscal year. Financial Strategy Strengthen financial structure Work to further strengthen financial structure against the backdrop of favorable financial market. Corporate Governances As a REIT in which strict governance is expected, further reinforce readiness concerning internal control, legal compliance and risk management in order to gain the trust of unitholders. 36

38 Appendix

39 Change in Investment Unit Price and NAV per Unit 8th FP 9th FP 10th FP 11th FP 12th FP 13th FP 14th FP 15th FP 16th FP 17th FP After Public Offering * NAV = (Total net assets [after distribution]) (book value of real estate, etc.) + (market value of real estate, etc. [real estate appraisal value]) 38

40 Summary of Results for the 17th Fiscal Period (1) - Balance Sheet - Comparison with Results of the 16th Fiscal Period 16th Fiscal Period Assets Million Yen (% ) Million Yen (% ) Million Yen (% ) Million Yen (% ) Current Assets Current Liabilities Cash and Deposits Operating Accounts Pay ables Cash and Deposits in Trust Short-term Loans Pay able Other Current Assets Current Portion of Long-term Loans Pay able Fixed Assets Current Portion of Inv estment C orporation Bond Tangible Fixed Assets Accounts Pay ables-other Building and Others (including Trust Property ) Adv ances Receiv ed Land and Others (including Trust Property ) Other Current Liabilities Liabilities Other Tangible Fix ed Assets Fixed Liabilities Intangible Fixed Assets Inv estment Corporation Bonds Leasehold Rights and Leasehold Rights in Trust Long-term Loans Pay able Other Intangible Fix ed Assets Tenant Leasehold and Security Deposits Investments and Other Assets Tenant Leasehold and Security Deposits in Trust Leasehold and Security Deposits Paid in Trust Other Fix ed Liabilities Long-term Prepaid Ex penses Total Liabilities Other Inv estments and Other Assets U nitholders' equity Deferred Assets Investment Corporation Bond Issuance Costs Total Assets Net Assets U nappropriated Retained Earnings Valuation, Translation Adjustments and Others Total Net Assets Total Liabilities and Net Assets 39

41 Summary of Results for the 17th Fiscal Period (2) - Income Statement Comparison with Results of the 16th Fiscal Period Comparison with the 17th Fiscal Period Forecasts Number of Properties (at period-end) 16th Fiscal Period 17th Fiscal Period 17th Fiscal Period Forecast 17th Fiscal Period C hange (January 17, 2014) Change Number of Properties (at period-end) Effective Number of Days of Investment Effective Number of Days of Investment Operating Revenues (A) 8,432 8, Operating Revenues (A) 8,441 8, Gain on Sale Gain on Sale Operating Expenses (B) 4,755 4, Operating Expenses (B) 4,685 4, Expenses related to Rental Business Expenses related to Rental Business 2,541 2, (excluding depreciation) (excluding depreciation) 2,443 2, Depreciation 1,328 1, Depreciation 1,341 1, Gain and Loss from Rental Operations Gain and Loss from Rental Operations 4,561 4, (excluding gain on sale) (excluding gain on sale) 4,656 4,652-3 Operating Income (A-B) 3,677 3, Operating Income (A-B) 3,756 3, Non-operating Expenses Non-operating Expenses Interest Expense (including cap amortization) Interest Expense (including cap amortization) Ordinary Income 2,955 3, Ordinary Income 2,986 3, Ex traordinary Income Ex traordinary Income Extraordinary Expenses Extraordinary Expenses Net Income 2,959 3, Net Income 2,984 3, Investment Units Issued and Outstanding 395, ,798 - Investment Units Issued and Outstanding 395, ,798 - Dividend per Unit (Unit: Yen) 7,478 7, Dividend per Unit (Unit: Yen) 7,540 7,

42 Forecasts (18th and 19th Fiscal Periods) Forecasts for the 18th and 19th Fiscal Periods 17th Fiscal Period (May 31, 2014) 17th Period Forecast (Nov. 30, 2014) Unit: Million Yen 18th Period Forecast (May 31, 2015) Number of Properties (at period-end) Effective Number of Days of Investment Operating Revenues (A) 8,587 9,692 9,842 Gain on Sale Operating Expenses (B) 4,826 5,340 5,398 Expenses related to Rental Business (excluding depreciation) 2,575 2,841 2,821 Depreciation 1,355 1,493 1,539 Gain and Loss from Rental Operations (excluding gain on sale) 4,652 5,357 5,481 Operating Income (A-B) 3,760 4,351 4,444 Non-operating Expenses Interest Expense (including cap amortization) Ordinary Income 3,005 3,450 3,674 Extraordinary Income Extraordinary Expenses Net Income 3,016 3,448 3,672 Investment Units Issued and Outstanding 395, , ,000 Div idend per Unit (U nit: Yen) 7,621 7,820 8,328 * Although we assume that rents will remain at the current level, actual rents may differ from the assumption depending on the status of assets under management. 41

43 Major Financial Data Item Unit 13th Period 14th Period 15th Period 16th Period 17th Period Number of days of investment Day Number of properties at end of period Property Occupancy rate at end of period % Average acquisition price Million Yen 311, , , , ,993 NOI (after deduction of gain on sale) Million Yen 5,265 5,270 5,395 5,890 6,008 Funds from operation (FFO) Million Yen 3,388 3,675 3,869 4,288 4,368 Return on asset (ROA) % Return on equity (ROE) % NOI Rent revenue + Other lease business revenue Expenses related to rent business + Depreciation FFO Net Income + Depreciation Gain on Sale ROA Annualized Net Income / Total Assets ROE Annualized Net Income / Total Investments Loan-to-Value (LTV) at end of Fiscal Period Interest-bearing liabilities at end of Fiscal Period / Total assets at end of Fiscal Period Capital adequacy ratio at end of period % Loan-to-Value (LTV) at end of period %

44 List of Interest-bearing Liabilities Term Lender Balance Type Interest Date of Due date (million yen) Rate (*) advance Sumitomo Mitsui Banking Corporation.(*) 13,500 Fixed 0.94% 11/7/8 14/7/8 Mizuho Trust and Banking Co., Ltd.(*) 3,000 Fixed 0.97% 11/7/8 14/7/8 Aozora Bank, Ltd.(*) 1,500 Fixed 0.97% 11/7/8 14/7/8 Shinsei Bank, Ltd.(*) 1,000 Fixed 0.97% 11/7/8 14/7/8 Resona Bank, Limited(*) 3,000 Fixed 0.88% 11/8/31 15/2/27 Development Bank of Japan Inc. 3,000 Fixed 1.09% 11/9/30 15/3/31 Shinsei Bank, Ltd.(*) 2,000 Fixed 0.89% 11/9/30 15/3/31 Mizuho Bank, Ltd.(*) 2,000 Fixed 0.67% 12/5/21 15/5/29 The Bank of Yokohama, Ltd.(*) 500 Fixed 0.67% 12/5/21 15/5/29 Sumitomo Mitsui Banking Corporation. 2,000 Float T+0.35% 13/11/29 14/9/17 Sumitomo Mitsui Trust Bank, Limited 1,000 Float T+0.35% 13/11/29 14/9/17 The Bank of Tokyo-Mitsubishi UFJ, Ltd. 1,500 Float T+0.30% 14/5/29 15/3/31 Sumitomo Mitsui Banking Corporation. 500 Float T+0.30% 14/5/29 15/3/31 Mizuho Bank, Ltd. 500 Float T+0.30% 14/5/29 15/3/31 Total current maturities of long term borrowings 35,000 Development Bank of Japan Inc. 1,700 Fixed 1.02% 12/5/11 17/5/10 Shinsei Bank, Ltd.(*) 2,000 Fixed 0.75% 12/5/21 16/5/31 Development Bank of Japan Inc. 6,500 Fixed 1.02% 12/5/21 17/5/22 Sumitomo Mitsui Banking Corporation.(*) 4,000 Fixed 0.86% 12/5/21 17/5/31 Sumitomo Mitsui Trust Bank, Limited(*) 3,000 Fixed 0.85% 12/5/21 17/5/31 Mizuho Trust and Banking Co., Ltd.(*) 1,500 Fixed 0.85% 12/5/21 17/5/31 The Shizuoka Bank, Ltd(*) 2,000 Fixed 0.52% 12/8/31 15/8/31 The Musashino Bank,Ltd.(*) 1,000 Fixed 0.61% 12/9/18 15/8/31 The 77 Bank, Ltd.(*) 1,000 Fixed 0.61% 12/9/18 15/8/31 Sumitomo Mitsui Banking Corporation.(*) 500 Fixed 0.61% 12/9/18 15/8/31 Development Bank of Japan Inc. 2,550 Fixed 0.96% 12/9/18 17/8/31 Sumitomo Mitsui Banking Corporation.(*) 1,500 Fixed 0.71% 12/9/18 17/8/31 Mizuho Bank, Ltd.(*) 1,000 Fixed 0.71% 12/9/18 17/8/31 The Hiroshima Bank, Ltd.(*) 1,000 Fixed 0.79% 12/9/18 17/8/31 Sumitomo Mitsui Trust Bank, Limited(*) 3,400 Fixed 0.69% 12/9/18 18/2/28 The Gunma Bank, Ltd.(*) 1,000 Fixed 0.57% 12/11/30 15/11/30 Taiyo Life Insurance Company 300 Fixed 0.60% 12/11/30 15/11/30 Nippon Life Inslance Company 300 Fixed 0.60% 12/11/30 15/11/30 Sumitomo Mitsui Trust Bank, Limited(*) 1,950 Fixed 0.60% 12/11/30 18/2/28 Development Bank of Japan Inc. 2,000 Fixed 0.85% 12/12/3 17/11/30 Shinsei Bank, Ltd.(*) 2,000 Fixed 0.60% 12/12/3 17/11/30 ORIX Bank Corporation(*) 1,000 Fixed 0.68% 13/1/10 18/2/28 Tokio Marine & Nichido Fire Insurance Co., Ltd. 1,000 Fixed 0.69% 13/2/1 17/11/30 The Yamaguchi Bank, Ltd. 500 Fixed 0.69% 13/2/1 17/11/30 The Higashi-Nippon Bank, Limited(*) 500 Fixed 0.73% 13/2/1 18/2/28 Sumitomo Mitsui Banking Corporation.(*) 2,000 Fixed 0.90% 13/2/1 20/2/28 Sumitomo Mitsui Trust Bank, Limited(*) 1,500 Fixed 0.90% 13/2/1 20/2/28 Aozora Bank, Ltd.(*) 1,500 Fixed 0.52% 13/2/28 16/8/31 The Kagawa Bank, Ltd.(*) 1,000 Fixed 0.81% 13/2/28 19/2/28 Aozora Bank, Ltd.(*) 2,000 Fixed 0.90% 13/2/28 20/2/28 Resona Bank, Limited(*) 2,000 Fixed 0.90% 13/3/1 20/2/28 Fukoku Mutual Life Insurance Company 200 Fixed 0.53% 13/3/29 16/5/31 The Gunma Bank, Ltd.(*) 500 Fixed 0.72% 13/4/12 18/5/31 The Musashino Bank,Ltd.(*) 500 Fixed 0.57% 13/4/12 18/5/31 Aozora Bank, Ltd.(*) 1,000 Fixed 0.88% 13/4/12 19/5/31 Sumitomo Mitsui Trust Bank, Limited(*) 1,500 Fixed 0.84% 13/4/12 19/11/29 Current maturities of long term borrowings Long term borrowings Investment Corporation Bonds (As of May 31, 2014) Term Lender Balance Type Interest Date of Due date (million yen) Rate (*) advance Development Bank of Japan Inc. 1,000 Fixed 0.96% 13/4/12 19/11/29 Kansai Urban Banking Corporation 1,500 Fixed 0.89% 13/6/28 18/8/31 Kansai Urban Banking Corporation(*) 1,500 Fixed 0.67% 13/6/28 19/8/30 Kansai Urban Banking Corporation(*) 2,000 Fixed 0.78% 13/6/28 20/8/31 Development Bank of Japan Inc. 1,000 Fixed 0.83% 13/7/3 18/8/31 Sumitomo Mitsui Banking Corporation.(*) 1,600 Fixed 0.78% 13/7/3 20/8/31 Shinsei Bank, Ltd.(*) 1,000 Fixed 0.78% 13/7/3 20/11/30 The Higashi-Nippon Bank, Limited(*) 1,000 Fixed 0.81% 13/7/3 20/11/30 The Bank of Fukuoka, Ltd.(*) 1,000 Fixed 0.68% 13/7/8 18/8/31 Sumitomo Mitsui Trust Bank, Limited(*) 1,000 Fixed 0.82% 13/7/8 19/11/29 Sumitomo Mitsui Trust Bank, Limited(*) 4,000 Fixed 0.82% 13/7/8 20/5/29 Shinsei Bank, Ltd.(*) 1,000 Fixed 0.82% 13/7/31 21/5/31 Shinsei Bank, Ltd.(*) 1,000 Fixed 0.84% 13/7/31 21/8/31 Tokio Marine & Nichido Fire Insurance Co., Ltd.(*) 1,000 Fixed 0.53% 13/8/9 18/7/31 The Bank of Tokyo-Mitsubishi UFJ, Ltd.(*) 2,000 Fixed 0.66% 13/8/9 18/8/31 The Bank of Fukuoka, Ltd.(*) 1,000 Fixed 0.68% 13/8/9 18/8/31 The Bank of Tokyo-Mitsubishi UFJ, Ltd.(*) 3,000 Fixed 0.76% 13/8/9 20/8/31 Sumitomo Mitsui Trust Bank, Limited 1,000 Float T+0.35% 13/8/9 21/2/26 Sumitomo Mitsui Banking Corporation. 1,400 Float T+0.35% 13/8/9 21/5/31 Mitsubishi UFJ Trust and Banking Corporation(*) 2,000 Fixed 0.62% 13/9/27 18/11/30 Mizuho Bank, Ltd. 4,000 Float T+0.33% 13/9/27 21/3/31 Sumitomo Mitsui Banking Corporation. 1,400 Float T+0.33% 13/9/27 21/3/31 ORIX Bank Corporation 1,500 Fixed 0.69% 13/9/30 19/2/28 The Bank of Fukuoka, Ltd.(*) 2,000 Fixed 0.66% 13/9/30 19/3/29 Shinsei Bank, Ltd.(*) 1,000 Fixed 0.73% 13/11/29 20/11/30 Resona Bank, Limited(*) 2,000 Fixed 0.57% 14/3/18 19/9/30 Resona Bank, Limited 2,000 Float T+0.30% 14/3/18 21/3/31 Sumitomo Mitsui Banking Corporation. 1,000 Float T+0.30% 14/3/25 21/3/31 Sumitomo Mitsui Banking Corporation. 1,000 Float T+0.35% 14/3/25 22/2/28 Mitsubishi UFJ Trust and Banking Corporation(*) 3,000 Fixed 0.50% 14/3/31 19/3/29 The Gunma Bank, Ltd.(*) 1,000 Fixed 0.50% 14/3/31 19/3/29 Mizuho Bank, Ltd.(*) 1,000 Fixed 0.64% 14/3/31 20/3/31 Mizuho Bank, Ltd. 3,900 Float T+0.30% 14/3/31 21/3/31 Sumitomo Mitsui Trust Bank, Limited 2,000 Fixed 0.47% 14/5/29 19/5/31 The Musashino Bank,Ltd.(*) 500 Fixed 0.43% 14/5/29 19/5/31 The Bank of Tokyo-Mitsubishi UFJ, Ltd.(*) 2,000 Fixed 0.60% 14/5/29 20/5/29 Mizuho Trust and Banking Co., Ltd.(*) 500 Fixed 0.60% 14/5/29 20/5/29 Development Bank of Japan Inc. 1,000 Fixed 0.74% 14/5/29 20/11/30 The Bank of Tokyo-Mitsubishi UFJ, Ltd. 1,000 Float T+0.30% 14/5/29 21/11/30 Mizuho Bank, Ltd. 1,500 Float T+0.33% 14/5/29 22/5/31 The Bank of Tokyo-Mitsubishi UFJ, Ltd. 1,000 Float T+0.33% 14/5/29 22/5/31 Sumitomo Mitsui Banking Corporation. 3,000 Float T+0.35% 14/5/29 22/11/30 The Bank of Tokyo-Mitsubishi UFJ, Ltd. 1,000 Float T+0.35% 14/5/29 22/11/30 Total long-term borrowings 125,200 Total borrowings 160,200 Note: Fixed Interest Rate is rounded to the second decimal place. (*) Interest rates that were changed from a floating rate to a fixed rate by concluding the swap agreement are described as fixed interest rates. Term Lender Balance Type Interest Date of Due date (million yen) Rate (% ) advance nor is it intended for the purposes of solicitation. * Daiwa The interest Office Investment rate will change Corporation to 6 month advises TIBOR reader to bps, make from investment the day after decisions the tenth at payment their own date judgment. until maturity, due to 5 year lapse step-up floating interest. 43

45 Analyses of Tenants Major Tenants Top 10 List (As of May 31, 2014) % Share of Industries* of Top 100 Tenants** Tenant Name (*1) Property Leased Space ( ) (*2) % of Total Leased Space (*3) Not disclosed Daiwa Tsukishima 6, % Trend Micro Incorporated Shinjuku Maynds Tower 6, % Not disclosed Daiwa Kayabacho Build. 5, % Fields Corporation E SPACE TOWER 5, % EMC Japan Shinjuku Maynds Tower 5, % Not disclosed Shinjuku Maynds Tower 5, % UCC Holdings Co.,Ltd. Daiwa Onariomon 5, % Sekisui House, Ltd. Shinjuku Maynds Tower 4, % Other 13.6% NPOs Precision Instruments 0.5% 3.4% Electric Appliances Foods 3.6% 3.7% Insurance 3.8% Schools 4.3% Banks 4.5% Real Estate 8.2% Wholesale 8.8% Services 25.3% Information & Communication 20.4% Tokio Marine & Nichido Anshin Consulting Co., Ltd. Integral Tower 4, % FreeBit Co., Ltd. E SPACE TOWER 3, % Total 53, % * The leased space of top 100 tenants covers 63.4% of total leased space as of the end of the 17th Fiscal Period. ** Industries are categorized according to TSE s 33 industry groups. *1 Not disclosed due to tenant's request. *2 Leased spaces of the tenants in Shinjuku Maynds Tower are described as the figure equivalent to 6/7, ownership % of the Investment Corporation. *3 Rounded down to first decimal place. 44

46 Appraisal Value Compared to the Previous Fiscal Period (1) Property Name Compared to End of 16th Period(*) Compared to Acquisition Price (Unit: Million Yen) Appraisal Value Acquisition Cap Rate Price End of 16th Period End of 17th Period Difference Change Difference Change 16th Period 17th Period Daiwa Ginza 14,900 15, % 14,100 +1, % 4.2% 4.2% Daiwa Ginza Annex 3,140 3, % 3, % 4.1% 4.1% Daiwa Shibaura 7,470 7, % 8,265-1, % 4.9% 4.8% Daiwa Minami Aoyama 4,100 4, % 4, % 4.5% 4.5% Daiwa Sarugakucho 3,160 3, % 3, % 5.0% 5.0% Daiwa A Hamamatsucho 2,850 2, % 2, % 4.6% 4.5% Daiwa Jingumae 2,100 2, % 2, % 4.4% 4.4% Daiwa Shibadaimon 2,640 2, % 2, % 4.5% 4.4% Daiwa Misakicho 2,450 2, % 2, % 4.8% 4.7% Daiwa Shimbashi 510 2,400 2, % 2, % 4.7% 4.7% Daiwa Tsukijiekimae 1,400 1, % 1, % 5.0% 4.9% Daiwa Tsukiji 1,460 1, % 1, % 4.9% 4.8% Daiwa Tsukiji 616 2,410 2, % 2, % 4.9% 4.8% Daiwa Tsukishima Bldg. 8,010 8, % 7, % 5.0% 4.9% Daiwa Nihonbashi Horidomecho 2,480 2, % 2, % 4.7% 4.7% Daiwa Azabudai 1,740 1, % 1, % 4.5% 4.6% Daiwa Nihombashi Honcho 7,130 7, % 7, % 4.6% 4.6% Daiwa Ginza 1-chome 4,590 4, % 4, % 4.4% 4.4% Daiwa Kyobashi 3,100 3, % 3, % 4.6% 4.6% Daiwa Kojimachi 4-chome 2,640 2, % 2, % 4.3% 4.3% Daiwa Onarimon 13,600 13, % 13, % 4.4% 4.4% Shinjuku Maynds Tower 113, , % 133,800-20, % 3.8% 3.8% SHIBUYA EDGE 4,260 4, % 5,900-1, % 4.3% 4.3% 45

47 Appraisal Value Compared to the Previous Fiscal Period (2) Compared to End of 16th Period(*) Compared to Acquisition Price *Difference and change in Compared to End of the 16th Period do not include the impact of the properties acquired/sold in the 17th Period. (Unit: Million Yen) Property Name Appraisal Value Acquisition Cap Rate Price End of 16th Period End of 17th Period Difference Change Difference Change 16th Period 17th Period Daiwa Kodemmacho 1,980 1, % 2, % 4.9% 4.9% Daiwa Jimbocho 2,860 2, % 4,150-1, % 4.9% 4.8% Daiwa Nishishimbashi 4,710 4, % 5, % 4.7% 4.6% Daiwa Kudan 2,920 2, % 4,000-1, % 4.7% 4.6% Daiwa Kayabacho Building 6,460 6, % 5,600 +1, % 4.3% 4.2% Daiwa Jinbocho 3-chome 3,760 3, % 3, % 4.3% 4.2% E SPACE TOWER 27,100 28,100 +1, % 24,000 +4, % 4.1% 4.1% Daiwa Nihonbashi Hongokucho 1,850 1, % 1, % 4.9% 4.8% shinyon curumu 10,300 10, % 9, % 4.2% 4.1% Daiwa Shibuya Dogenzaka 4,750 4, % 4, % 4.4% 4.3% Akasaka Business Place 10,400 10, % 9,200 +1, % 4.2% 4.1% Daiwa Shibuya Miyamasuzaka 7,280 7, % 7, % 4.3% 4.2% Daiwa Kinshicho 3,340 3, % 3, % 5.2% 5.1% Daiwa Higashi-Ikebukuro 3,330 3, % 2, % 5.1% 5.0% Benex S-3 3,290 3, % 4,950-1, % 5.5% 5.6% Daiwa Shinagawa North 5,890 5, % 7,710-1, % 4.9% 4.9% Daiwa Osaki 3-chome 1,980 2, % 1, % 4.7% 4.6% Daiwa Kamiooka 2,070 2, % 2, % 5.5% 5.4% Integral Tower - 15, , % - 4.6% Daiwa Minami-Senba 2,780 2, % 4,810-2, % 5.4% 5.4% Daiwa Meieki 6,370 6, % 5,300 +1, % 5.1% 5.0% Total 324, ,230 +2, % 364,076-21, %

48 Appraisal Value at End of Fiscal Period (1) (Unit: Million Yen) Summary of Appraisal Report (End of 17th Fiscal Period) Appraisal Value Direct Capitalization Method DCF Method Integrated Value Property Name (End of 17th period) Terminal Value Cap Rate Value Discount Rate Cap Rate Daiwa Ginza 15,400 15, % 15, % 4.4% 10,500 Daiwa Ginza Annex 3,150 3, % 3, % 4.3% 2,720 Daiwa Shibaura 7,180 7, % 7, % 5.0% 5,610 Daiwa Minami Aoyama 4,100 4, % 4, % 4.7% 3,400 Daiwa Sarugakucho 3,160 3, % 3, % 5.2% 1,510 Daiwa A Hamamatsucho 2,860 2, % 2, % 4.7% 1,790 Daiwa Jingumae 2,100 2, % 2, % 4.6% 2,090 Daiwa Shibadaimon 2,640 2, % 2, % 4.6% 1,620 Daiwa Misakicho 2,500 2, % 2, % 4.9% 1,320 Daiwa Shimbashi 510 2,380 2, % 2, % 4.9% 1,780 Daiwa Tsukijiekimae 1,470 1, % 1, % 5.1% 910 Daiwa Tsukiji 1,440 1, % 1, % 5.0% 661 Daiwa Tsukiji 616 2,480 2, % 2, % 5.0% 1,140 Daiwa Tsukishima Bldg. 8,140 8, % 8, % 5.1% 4,280 Daiwa Nihonbashi Horidomecho 2,490 2, % 2, % 4.9% 1,520 Daiwa Azabudai 1,700 1, % 1, % 4.8% 1,180 Daiwa Nihombashi Honcho 7,100 7, % 6, % 4.8% 3,960 Daiwa Ginza 1-chome 4,500 4, % 4, % 4.6% 3,940 Daiwa Kyobashi 3,110 3, % 3, % 4.8% 1,810 Daiwa Kojimachi 4-chome 2,660 2, % 2, % 4.5% 3,460 Daiwa Onarimon 13,000 13, % 12, % 4.6% 10,100 Shinjuku Maynds Tower 113, , % 129, % 4.0% 96,600 SHIBUYA EDGE 4,300 4, % 4, % 4.5% 2,860 *Appraisal value for Shinjuku Maynds Tower is indicated as 6/7 of the total appraisal value for the building, which is equivalent to the co-ownership interest DOI owns. 47

49 Appraisal Value at End of Fiscal Period (2) (Unit: Million Yen) Summary of Appraisal Report (End of 17th Fiscal Period) Appraisal Value Direct Capitalization Method DCF Method Integrated Value Property Name (End of 17th period) Terminal Value Cap Rate Value Discount Rate Cap Rate Daiwa Kodemmacho 1,980 2, % 1, % 5.1% 951 Daiwa Jimbocho 2,900 3, % 2, % 5.0% 2,680 Daiwa Nishishimbashi 4,800 4, % 4, % 4.8% 3,400 Daiwa Kudan 2,960 3, % 2, % 4.8% 1,970 Daiwa Kayabacho Building 6,610 6, % 6, % 4.4% 4,770 Daiwa Jinbocho 3-chome 3,860 3, % 3, % 4.4% 3,180 E SPACE T OWER 28,100 28, % 27, % 4.3% 21,300 Daiwa Nihonbashi Hongokucho 1,890 1, % 1, % 5.0% 1,330 shinyon curumu 10,400 10, % 10, % 4.3% 10,300 Daiwa Shibuya Dogenzaka 4,750 4, % 4, % 4.5% 3,980 Akasaka Business Place 10,700 10, % 10, % 4.3% 11,200 Daiwa Shibuya Miyamasuzaka 7,450 7, % 7, % 4.3% 7,770 Daiwa Kinshicho 3,570 3, % 3, % 5.3% 2,070 Daiwa Higashi-Ikebukuro 3,240 3, % 3, % 5.2% 2,030 Benex S-3 3,240 3, % 3, % 5.8% 3,040 Daiwa Shinagawa North 5,890 6, % 5, % 5.1% 4,280 Daiwa Osaki 3-chome 2,030 2, % 2, % 4.8% 1,300 Daiwa Kamiooka 2,120 2, % 2, % 5.6% 1,930 Integral T ower 15,700 16, % 15, % 4.8% 10,800 Daiwa Minami-Senba 2,770 2, % 2, % 5.6% 1,780 Daiwa Meieki 6,410 6, % 6, % 5.2% 7,010 Total 342, , , ,832 48

50 Portfolio Performance Summary (1) (16th-17th Fiscal Period Results by Property) Property Name Daiwa Ginza Daiwa Ginza Annex Daiwa Shibaura Daiwa Minami Aoyama Daiwa Sarugakucho Daiwa A Hamamatsucho Daiwa Jingumae Acquisition Price (million yen) 14,100 3,050 8,265 4,550 3,190 2,865 2,800 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period Book Value (million yen) 13,538 13,486 2,886 2,871 8,081 8,074 4,469 4,458 3,260 3,245 2,798 2,798 2,720 2,712 Appraisal Value (million yen) 14,900 15,400 3,140 3,150 7,470 7,180 4,100 4,100 3,160 3,160 2,850 2,860 2,100 2,100 Occupancy Rate (% ) PML (%) (*1) Property Management Company Best Property Best Property Xy max Properties Best Property Property Partners Best Property Best Property Number of operating days (1) Property-related Revenues 364, ,356 92,652 92, , , , ,056 - (*6) - (*6) 136, ,479 69,449 69,075 Rent (incl. common service fees) 350, ,524 92,652 92, , , , ,056 - (*6) - (*6) 136, ,479 69,449 69,075 Other Revenues (*3) 13,594 9, ,709 1, (*6) - (*6) (2) Property-related Expenses 99, ,293 24,682 21,421 66,276 75,692 28,292 28,292 - (*6) - (*6) 62,010 60,850 17,856 16,291 Administrative Expenses 14,346 25,541 5,292 3,788 14,122 23,098 3,640 5,244 - (*6) - (*6) 8,598 8,885 2,838 2,888 Utility Charges 34,160 28,289 6,989 6,739 21,774 20,465 10,056 8,464 - (*6) - (*6) 11,226 10,549 6,465 5,619 Property Management Fees 5,008 4,460 1,460 1,359 3,705 3,327 1,858 1,819 - (*6) - (*6) 2,049 1,998 1,384 1,200 Property-related Taxes 27,615 27,616 9,100 9,096 19,208 19,207 11,692 11,691 - (*6) - (*6) 8,640 8,640 6,302 6,302 Non-life Insurance Costs (*6) - (*6) Repair Expenses 6,348 8,102 1, ,035 9, (*6) - (*6) 1,897 1, Other Expenses 11,841 11, (*6) - (*6) 29,400 29, (3) NOI ( (1)-(2)) (*4) 264, ,063 67,969 70, , ,488 91,046 91,764 85,568 86,519 74,713 73,628 51,593 52,783 Annualized NOI 527, , , , , , , , , , , , , ,857 NOI Yield (*5) 3.9% 2.9% 4.7% 5.0% 4.0% 3.7% 4.1% 4.1% 5.2% 5.3% 5.3% 5.3% 3.8% 3.9% Depreciation and Amortization 69,946 70,384 18,278 17,892 25,120 24,992 11,614 11,930 - (*6) - (*6) 12,410 12,637 10,251 8,463 Proceeds for Restoration and (Refere 3,100 1, (*6) - (*6) Repair Work nce) Proceeds from Amortization of (*6) - (*6) Leasehold and Security (*1) Sompo Japan Nipponkoa Risk Management Inc. has prepared the PML for the 17th fiscal period. The figures entered for PML are the figures in the Portfolio Earthquake PML Assessment Report (June 2014). (*2) For profits from property-related activities, actual results are used and displayed by rounding down to the nearest thousand yen. (*3) Other Revenues includes Proceeds for Restoration and Repair Work or Proceeds from Amortization of Leasehold and Security Deposits. (*4) (3) NOI in this table is calculated by adjusting the Property-related Taxes for the NOI (after deduction of gain on sale) aforementioned in the Appendix Major Financial Data so the figures do not match. Profits from property-related activities (*2) (*5) NOI Yield is calculated by dividing annualized NOI in (3) on the table by the book value. (*6) Not disclosed due to tenant's request 49

51 Portfolio Performance Summary (2) (16th-17th Fiscal Period Results by Property) Property Name Daiwa Shibadaimon Daiwa Misakicho Daiwa Shimbashi 510 Daiwa Tsukijiekimae Daiwa Tsukiji Daiwa Tsukiji 616 Daiwa Tsukishima Bldg. Acquisition Price (million yen) 2,578 2,346 2,080 1,560 1,240 2,440 7,840 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period Book Value (million yen) 2,414 2,407 2,191 2,228 2,123 2,118 1,407 1,393 1,196 1,189 2,257 2,249 7,030 6,992 Appraisal Value (million yen) 2,640 2,640 2,450 2,500 2,400 2,380 1,400 1,470 1,460 1,440 2,410 2,480 8,010 8,140 Occupancy Rate (% ) PML (%) (*1) Property Management Company Best Property Best Property Property Partners MS Building Support Xy max Properties MS Building Support Property Partners Number of operating days (1) Property-related Revenues 88,007 76,623 - (*6) - (*6) 81,903 82,815 12,709 26,128 47,883 49,658 75,837 83, , ,196 Rent (incl. common service fees) 88,007 76,623 - (*6) - (*6) 80,103 82,815 12,679 26,128 47,883 49,658 75,837 83, , ,196 Other Revenues (*3) (*6) - (*6) 1, (2) Property-related Expenses 23,165 20,821 - (*6) - (*6) 20,101 17,823 37,269 16,032 12,310 11,693 22,883 20,035 78,275 53,343 Administrative Expenses 5,583 5,545 - (*6) - (*6) 4,391 3,816 18,184 3,005 2,534 2,566 3,957 3,540 8,468 8,150 Utility Charges 9,081 7,413 - (*6) - (*6) 7,638 6,732 4,030 6,634 3,533 3,463 8,003 7,262 31,403 27,146 Property Management Fees 1,301 1,201 - (*6) - (*6) 1,219 1,246 1,200 1,200 1,200 1,200 1,206 1,296 4,293 4,219 Property-related Taxes 6,249 6,249 - (*6) - (*6) 5,562 5,575 5,033 5,019 3,824 3,824 6,680 6,764 13,213 13,213 Non-life Insurance Costs (*6) - (*6) Repair Expenses (*6) - (*6) 1, , , ,904 1,046 20, Other Expenses (*6) - (*6) (3) NOI ( (1)-(2)) (*4) 64,842 55,801 68,814 62,799 61,802 64,992-24,560 10,096 35,573 37,965 52,953 63, , ,852 Annualized NOI 129, , , , , ,342-48,986 20,247 70,952 76, , , , ,956 NOI Yield (*5) 5.4% 4.6% 6.3% 5.7% 5.8% 6.2% -3.5% 1.5% 5.9% 6.4% 4.7% 5.7% 5.9% 6.5% Depreciation and Amortization 9,507 9,575 - (*6) - (*6) 6,615 6,772 14,175 14,233 7,100 7,160 20,277 20,253 54,506 48,783 Proceeds for Restoration and (Refere (*6) - (*6) Repair Work nce) Proceeds from Amortization of (*6) - (*6) 1, Leasehold and Security Profits from property-related activities (*2) (*1) Sompo Japan Nipponkoa Risk Management Inc. has prepared the PML for the 17th fiscal period. The figures entered for PML are the figures in the Portfolio Earthquake PML Assessment Report (June 2014). (*2) For profits from property-related activities, actual results are used and displayed by rounding down to the nearest thousand yen. (*3) Other Revenues includes Proceeds for Restoration and Repair Work or Proceeds from Amortization of Leasehold and Security Deposits. (*4) (3) NOI in this table is calculated by adjusting the Property-related Taxes for the NOI (after deduction of gain on sale) aforementioned in the Appendix Major Financial Data so the figures do not match. (*5) NOI Yield is calculated by dividing annualized NOI in (3) on the table by the book value. (*6) Not disclosed due to tenant's request 50

52 Portfolio Performance Summary (3) (16th-17th Fiscal Period Results by Property) Property Name Daiwa Nihonbashi Horidomecho Daiwa Azabudai Daiwa Shibuya SS (*6) Daiwa Nihombashi Honcho Daiwa Ginza 1-chome Daiwa Kyobashi Daiwa Kojimachi 4- chome Acquisition Price (million yen) 2,520 1,600 3,930 7,420 4,620 3,460 2,910 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period Book Value (million yen) 2,470 2,477 1,548 1,549 3,783 3,776 7,101 7,071 4,509 4,491 3,344 3,330 2,881 2,879 Appraisal Value (million yen) 2,480 2,490 1,740 1,700 3,840-7,130 7,100 4,590 4,500 3,100 3,110 2,640 2,660 Occupancy Rate (% ) PML (%) (*1) Property Management Company Best Property Best Property MS Building Support Xy max Properties Xy max Properties Best Property Best Property Number of operating days (1) Property-related Revenues 81,598 81,132 55,414 49, , , , , , ,770 91,359 96,255 90,675 86,851 Rent (incl. common service fees) 81,598 79,488 51,580 48, , , , , , ,655 91,359 96,255 90,675 86,851 Other Revenues (*3) 0 1,644 3,833 1, ,082 3,281 9, (2) Property-related Expenses 35,072 19,492 17,520 13,278 34,185 38,049 41,980 37,238 26,666 23,848 30,422 23,336 34,530 32,235 Administrative Expenses 4,074 4,051 3,790 2,589 4,113 3,989 7,305 5,712 6,446 4,915 4,954 4,930 5,031 5,571 Utility Charges 7,224 6,440 4,459 4,040 11,534 10,011 16,657 15,188 8,158 8,364 9,955 9,582 8,809 7,633 Property Management Fees 1,261 1,233 1,200 1,200 1,376 2,108 2,855 2,852 1,790 1,877 1,377 1,445 1,364 1,292 Property-related Taxes 6,556 6,556 4,812 4,812 9,276 16,835 11,692 11,840 7,784 7,784 6,948 6,964 13,467 13,475 Non-life Insurance Costs Repair Expenses 15,819 1,080 3, ,465 4,861 3,171 1,353 2, , ,732 4,128 Other Expenses (3) NOI ( (1)-(2)) (*4) 46,526 61,639 37,894 36,593 81,017 76, , , ,029 96,922 60,936 72,918 56,145 54,615 Annualized NOI 92, ,618 75,581 73, , , , , , , , , , ,531 NOI Yield (*5) 3.8% 5.0% 4.9% 4.7% 4.3% 4.5% 4.2% 4.5% 4.6% 4.3% 3.6% 4.4% 3.9% 3.8% Depreciation and Amortization 11,696 11,829 7,967 8,109 16,299 16,330 29,657 29,650 20,028 20,164 17,821 18,221 10,935 11,239 Proceeds for Restoration and (Refere 0 0 1, , Repair Work nce) Proceeds from Amortization of Leasehold and Security (*1) Sompo Japan Nipponkoa Risk Management Inc. has prepared the PML for the 17th fiscal period. The figures entered for PML are the figures in the Portfolio Earthquake PML Assessment Report (June 2014). (*2) For profits from property-related activities, actual results are used and displayed by rounding down to the nearest thousand yen. (*3) Other Revenues includes Proceeds for Restoration and Repair Work or Proceeds from Amortization of Leasehold and Security Deposits. (*4) (3) NOI in this table is calculated by adjusting the Property-related Taxes for the NOI (after deduction of gain on sale) aforementioned in the Appendix Major Financial Data so the figures do not match. (*5) NOI Yield is calculated by dividing annualized NOI in (3) on This the document table by the is book not value. material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, (*6) Book value for the 17th Fiscal Period indicates the book value nor at is the it intended time of sale, for the and purposes annualized of NOI solicitation. is calculated Daiwa after Office adjusting Investment with the property-related Corporation advises taxes. reader to make investment decisions at their own judgment. Profits from property-related activities (*2) 51

53 Portfolio Performance Summary (4) (16th-17th Fiscal Period Results by Property) Property Name Daiwa Onarimon Shinjuku Maynds Tower SHIBUYA EDGE Daiwa Kodemmacho Daiwa Jimbocho Daiwa Nishishimbashi Daiwa Kudan Acquisition Price (million yen) 13, ,800 5,900 2,460 4,150 5,000 4,000 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period Book Value (million yen) 13,571 13, , ,441 5,777 5,762 2,425 2,419 4,103 4,085 4,997 4,964 3,913 3,897 Appraisal Value (million yen) 13,600 13, , ,000 4,260 4,300 1,980 1,980 2,860 2,900 4,710 4,800 2,920 2,960 Occupancy Rate (% ) PML (%) (*1) Property Management Company Xy max Properties Xy max Properties Xy max Properties Property Partners Mitsui Fudosan Building Mitsui Fudosan Building Xy max Properties Management Management Number of operating days (1) Property-related Revenues 355, ,856 2,337,670 2,302,813 76, ,330 62,410 63,105 89,838 92, , ,769 76,008 97,802 Rent (incl. common service fees) 355, ,856 2,337,660 2,297,413 76, ,330 62,410 63,105 89,838 92, , ,659 76,008 92,083 Other Revenues (*3) , , ,719 (2) Property-related Expenses 93,934 79, , ,400 26,720 20,907 21,860 15,743 54,331 26,951 45,685 47,701 23,798 24,408 Administrative Expenses 12,604 13, , ,895 9,931 4,170 2,838 4,706 5,488 4,732 13,424 16,227 4,056 5,776 Utility Charges 29,892 27, , ,955 7,448 6,904 5,583 5,034 9,979 9,150 13,701 12,331 9,297 7,920 Property Management Fees 3,554 3,528 16,356 16,083 1,273 1,622 1,200 1,209 1,200 1,200 1,921 1,953 1,294 1,460 Property-related Taxes 33,659 33, , ,292 7,272 7,272 3,595 3,595 10,647 10,600 15,650 15,649 8,464 8,464 Non-life Insurance Costs ,947 3, Repair Expenses 13,789 1,511 29, , , , , Other Expenses 0 0 7,700 3, (3) NOI ( (1)-(2)) (*4) 261, ,922 1,579,392 1,423,412 49,825 82,422 40,550 47,362 35,507 65,970 98, ,067 52,209 73,393 Annualized NOI 521, ,345 3,150,154 2,854,646 99, ,298 80,879 94,984 70, , , , , ,191 NOI Yield (*5) 3.8% 4.0% 2.4% 2.2% 1.7% 2.9% 3.3% 3.9% 1.7% 3.2% 3.9% 4.5% 2.7% 3.8% Depreciation and Amortization 29,672 29, , ,206 16,541 16,569 8,465 8,677 24,604 21,756 40,071 34,936 24,328 24,199 Proceeds for Restoration and (Refere , Repair Work nce) Proceeds from Amortization of Leasehold and Security Profits from property-related activities (*2) (*1) Sompo Japan Nipponkoa Risk Management Inc. has prepared the PML for the 17th fiscal period. The figures entered for PML are the figures in the Portfolio Earthquake PML Assessment Report (June 2014). (*2) For profits from property-related activities, actual results are used and displayed by rounding down to the nearest thousand yen. (*3) Other Revenues includes Proceeds for Restoration and Repair This document Work or Proceeds is not material from Amortization disclosed of Leasehold in compliance and Security with the Deposits. Financial Instruments and Exchange Law or any regulation of similar nature, (*4) (3) NOI in this table is calculated by adjusting the Property-related nor is it Taxes intended for the for NOI the purposes (after deduction of solicitation. of gain on sale) aforementioned Daiwa Office Investment in the Appendix Corporation Major advises Financial reader Data to so make the figures investment do not match. decisions at their own judgment. (*5) NOI Yield is calculated by dividing annualized NOI in (3) on the table by the book value. 52

54 Portfolio Performance Summary (5) (16th-17th Fiscal Period Results by Property) Property Name Daiwa Kayabacho Building Daiwa Jinbocho 3-chome E SPACE TOWER Daiwa Nihonbashi H ongokucho shinyon curumu Daiwa Shibuya Dogenzaka Akasaka Business Place Acquisition Price (million yen) 5,600 3,550 24,000 1,721 9,650 4,500 9,200 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period Book Value (million yen) 5,507 5,479 3,547 3,528 23,923 23,864 1,706 1,693 9,969 9,941 4,539 4,522 9,290 9,280 Appraisal Value (million yen) 6,460 6,610 3,760 3,860 27,100 28,100 1,850 1,890 10,300 10,400 4,750 4,750 10,400 10,700 Occupancy Rate (% ) PML (%) (*1) Property Management Company Property Partners Mitsui Fudosan Building Management Xy max Properties MS Building Support MS Building Support Best Property Xy max Properties Number of operating days (1) Property-related Revenues - (*6) - (*6) 107,665 98, , ,134 61,352 61, , , , , , ,550 Rent (incl. common service fees) - (*6) - (*6) 107,665 98, , ,134 61,352 61, , , , , , ,550 Other Revenues (*3) - (*6) - (*6) , (2) Property-related Expenses - (*6) - (*6) 26,990 27, , ,293 12,430 12,889 72,409 73,260 22,055 27,508 48,911 77,740 Administrative Expenses - (*6) - (*6) 5,754 9,372 40,842 48,531 2,859 3,072 38,307 35,426 8,413 10,011 18,858 23,663 Utility Charges - (*6) - (*6) 9,186 7,112 63,924 51,351 3,853 3,715 14,675 18,026 10,942 13,839 25,553 46,373 Property Management Fees - (*6) - (*6) 1,614 1,410 7,594 6,869 1,200 1,200 1,200 1,697 1,427 1,749 2,637 3,594 Property-related Taxes - (*6) - (*6) 9,348 9,352 56,479 56,499 4,433 4,434 17,765 17, Non-life Insurance Costs - (*6) - (*6) Repair Expenses - (*6) - (*6) ,172 3, ,073 1,671 1,560 3,624 Other Expenses - (*6) - (*6) (3) NOI ( (1)-(2)) (*4) 148, ,128 80,675 70, , ,841 48,921 48,238 77,589 75,503 99, , , ,809 Annualized NOI 295, , , ,011 1,176,679 1,032,512 97,575 96, , , , , , ,975 NOI Yield (*5) 5.4% 5.4% 4.5% 4.0% 4.9% 4.3% 5.7% 5.7% 1.6% 1.5% 5.3% 5.3% 5.1% 5.3% Depreciation and Amortization - (*6) - (*6) 19,708 19,715 63,720 63,933 13,160 13,160 35,149 35,242 14,857 17,875 14,637 22,235 Proceeds for Restoration and (Refere - (*6) - (*6) Repair Work nce) Proceeds from Amortization of - (*6) - (*6) Leasehold and Security Profits from property-related activities (*2) (*1) Sompo Japan Nipponkoa Risk Management Inc. has prepared the PML for the 17th fiscal period. The figures entered for PML are the figures in the Portfolio Earthquake PML Assessment Report (June 2014). (*2) For profits from property-related activities, actual results are used and displayed by rounding down to the nearest thousand yen. (*3) Other Revenues includes Proceeds for Restoration and Repair Work or Proceeds from Amortization of Leasehold and Security Deposits. (*4) (3) NOI in this table is calculated by adjusting the Property-related Taxes for the NOI (after deduction of gain on sale) aforementioned in the Appendix Major Financial Data so the figures do not match. (*5) NOI Yield is calculated by dividing annualized NOI in (3) on This the table document by the is book not value. material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, (*6) Not disclosed due to tenant's request 53

55 Portfolio Performance Summary (6) (16th-17th Fiscal Period Results by Property) Property Name Daiwa Shibuya Miyamasuzaka Daiwa Kinshicho Daiwa Higashi-Ikebukuro Benex S-3 Daiwa Shinagawa North Daiwa Osaki 3-chome Daiwa Kamiooka Acquisition Price (million yen) 7,000 3,653 2,958 4,950 7,710 1,650 2,000 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period Book Value (million yen) 7,211 7,192 3,396 3,373 2,773 2,786 4,344 4,311 7,389 7,361 1,695 1,685 2,057 2,040 Appraisal Value (million yen) 7,280 7,450 3,340 3,570 3,330 3,240 3,290 3,240 5,890 5,890 1,980 2,030 2,070 2,120 Occupancy Rate (% ) PML (%) (*1) Property Management Company Japan Property Solution Best Property Best Property Xy max Properties Best Property Xy max Properties Xy max Properties Number of operating days (1) Property-related Revenues - (*6) 216, , , ,934 83, , , , ,800 58,814 64,357 80,651 89,728 Rent (incl. common service fees) - (*6) 216, , , ,934 78, , , , ,433 58,814 64,357 80,566 76,015 Other Revenues (*3) - (*6) 0 0 3, , , ,712 (2) Property-related Expenses - (*6) 45,217 57,711 41,912 44,099 47,120 58,507 56,904 89,263 55,019 14,582 12,305 11,845 21,718 Administrative Expenses - (*6) 18,534 11,607 13,460 12,674 14,269 16,628 15,376 12,210 13,140 2,497 2,592 4,562 5,271 Utility Charges - (*6) 19,039 15,936 13,020 19,891 11,276 21,504 21,228 19,172 17,190 4,530 4,010 5,603 5,886 Property Management Fees - (*6) 5,442 1,953 1,968 2,094 1,203 2,247 2,415 2,865 2,838 1,200 1,200 1,200 1,221 Property-related Taxes - (*6) 20 11,970 11,970 8,773 8,770 15,242 15,242 18,628 18,626 3,949 3, Non-life Insurance Costs - (*6) Repair Expenses - (*6) 1,843 15,977 1, ,357 2,489 2,266 36,000 2,865 2, ,217 Other Expenses - (*6) (3) NOI ( (1)-(2)) (*4) 59, ,272 76,476 93,452 93,834 36,702 90, , , ,780 44,232 52,051 68,805 68,009 Annualized NOI 332, , , , ,156 73, , , , ,311 88, , , ,392 NOI Yield (*5) 4.6% 4.8% 4.5% 5.6% 6.7% 2.6% 4.2% 4.8% 2.8% 3.7% 5.2% 6.2% 6.7% 6.7% Depreciation and Amortization - (*6) 19,943 29,031 29,622 22,138 22,615 39,544 38,915 32,789 32,685 10,957 11,009 17,705 17,709 Proceeds for Restoration and (Refere - (*6) 0 0 3, , , ,240 Repair Work nce) Proceeds from Amortization of - (*6) Leasehold and Security Profits from property-related activities (*2) (*1) Sompo Japan Nipponkoa Risk Management Inc. has prepared the PML for the 17th fiscal period. The figures entered for PML are the figures in the Portfolio Earthquake PML Assessment Report (June 2014). (*2) For profits from property-related activities, actual results are used and displayed by rounding down to the nearest thousand yen. (*3) Other Revenues includes Proceeds for Restoration and Repair Work or Proceeds from Amortization of Leasehold and Security Deposits. (*4) (3) NOI in this table is calculated by adjusting the Property-related Taxes for the NOI (after deduction of gain on sale) aforementioned in the Appendix Major Financial Data so the figures do not match. (*5) NOI Yield is calculated by dividing annualized NOI in (3) on This the table document by the is book not value. material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, (*6) Not disclosed due to tenant's request 54

56 Property Name Portfolio Performance Summary (7) (16th-17th Fiscal Period Results by Property) Integral Tower Daiwa Minami-Senba Daiwa Meieki Total 6 Acquisition Price (million yen) 15,220 4,810 5, , ,006 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period 16th Period 17th Period Book Value (million yen) 15,380 4,777 4,748 5,484 5, , ,560 Appraisal Value (million yen) 15,700 2,780 2,770 6,370 6, , ,230 Occupancy Rate (% ) PML (%) (*1) Property Management Company Xy max Properties Mitsui Fudosan Building Management Xy max Properties Number of operating days (1) Property-related Revenues 7, , , , ,202 8,432,069 8,583,887 Rent (incl. common service fees) 7, , , , ,202 8,367,068 8,491,129 Other Revenues (*3) , ,001 92,758 (2) Property-related Expenses ,451 58,352 42,501 47,934 2,539,091 2,572,904 Administrative Expenses ,698 14,900 23,836 25, , ,841 Utility Charges 0 13,557 9,891 15,428 14, , ,933 Property Management Fees 102 1,643 1,780 2,474 2, , ,291 Property-related Taxes 8 10,603 10, , ,980 Non-life Insurance Costs ,927 12,785 Repair Expenses , , , ,158 Other Expenses ,496 46,913 (3) NOI ( (1)-(2)) (*4) 6,288 82,464 84, , ,267 5,892,977 6,010,983 Annualized NOI 765, , , , ,410 12,188,679 12,824,553 NOI Yield (*5) 5.0% 3.4% 0 6.0% 5.9% 3.5% 3.6% Depreciation and Amortization 15,155 31,541 31,769 34,721 34,892 1,328,912 1,355,744 Proceeds for Restoration and (Refere , ,356 54,244 Repair Work nce) Proceeds from Amortization of ,800 0 Leasehold and Security (*1) Sompo Japan Nipponkoa Risk Management Inc. has prepared the PML for the 17th fiscal period. The figures entered for PML are the figures in the Portfolio Earthquake PML Assessment Report (June 2014). (*2) For profits from property-related activities, actual results are used and displayed by rounding down to the nearest thousand yen. (*3) Other Revenues includes Proceeds for Restoration and Repair Work or Proceeds from Amortization of Leasehold and Security Deposits. (*4) (3) NOI in this table is calculated by adjusting the Property-related Taxes for the NOI (after deduction of gain on sale) aforementioned in the Appendix Major Financial Data so the figures do not match. (*5) NOI Yield is calculated by dividing annualized NOI in (3) on This the table document by the is book not value. material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, (*6) The portfolio total in (2) property-related expenses does not nor include is it costs intended related for to the the purposes Investment of Corporation. solicitation. Daiwa Office Investment Corporation advises reader to make investment decisions at their own judgment. Profits from property-related activities (*2) 55

57 Organization of the Asset Management Company Organization Chart Company Overview Directors and Auditors (As of July 14, 2014) Auditors Compliance Committee Investment Committee Shareholders Meeting Board of Directors Representative Director Compliance Officer Internal Control Office President and Representative Director Vice President and Representative Director Vice President and Representative Director Director Director (non-executive) Director (non-executive) Auditor (non-executive) Auditor (non-executive) Akira Yamanouchi Yuji Shinotsuka (Head of Business Planning) Yoshiki Nishigaki (Head of Private Fund Management) Naoyuki Owa (Head of Administration) Toshihiro Matsui Mikita Komatsu Masaru Shirataki Shinji Kiso Company Name Daiwa Real Estate Asset Management Co. Ltd. Address Ginza, Chuo-ku, Tokyo Established October 21, 2004 Capitalization 200 million yen Representative Director Akira Yamanouchi Directors 8 (4 executives, 2 non-executives, 2 auditors) Employees 57 Registered Financial Instruments Firm Building Lots and Buildings Transaction Business License Discretionary Agent for Real Estate Transaction Approval Association Membership No. 355 (Financial Instruments), Director, Kanto Local Finance Bureau No. (2)-83920, Governor of Tokyo No. 34, Minister of Land, Infrastructure, Transport and Tourism A member of the Investment Trusts Association of Japan A member of Japan Securities Investment Advisers Association Investment Planning Department Office Investment Team Planning and formulation of policies concerning DOI s (*) investment Asset acquisition and disposal for DOI s investment management business Residential Investment Team Planning and formulation of policies concerning DRP s(**) investment Asset acquisition and disposal for DRP s investment management business Healthcare Investment Team Planning and formulation of policies concerning NHI s (***) investments Asset acquisition and disposal for assets NHI s investment management business Asset Management Department Office Management Team Planning and formulation of policies concerning the leasing, management and disposal of DOI s assets Residential Management Team Planning and formulation of policies concerning the leasing, management and disposal of DRP s assets Healthcare Investment Team Planning and formulation of policies concerning the leasing, management and disposal of NHI s assets, etc. Management Planning Team Budget and performance management for the investment corporations portfolios Construction Management Team Formulation and implementation of construction planning of the investment corporations assets Marketing Department Marketing activities for the Asset Management Company s entrustment business Investor marketing for private placement products Disclosure, IR and public relations for the investment corporations Operation of the investment corporations general meeting of unitholders Fund procurement (investment units) for the investment corporations Finance Department Finance Team Fund procurement (investment corporation bonds), ALM, surplus management and fund management for the Investment Corporation Accounting Team Financial results and accounting, cash allotment, accounting audit, budget Accounting and finance of the Asset Manager Management Team Management for the customers of the Private Fund Management Dept. Issuance and underwriting of DRP s investment securities General Administrative Department Management of executive officers meeting for the Investment Corporation Operation of the general meeting of shareholders, the board of directors and committees of the Asset Manager Revision/elimination of regulations, management of documents, information management and systems management Licensing, approval, registration and reporting stipulated by laws and regulations Litigation and handling of complaints Human resources and labor service Business Planning Department Analysis of real estate market, retail industry trends and the real estate investment trust market Analysis and management of the investment corporations managerial issues Development and revision of the investment corporations annual asset management plans and medium-term asset management plans Development and revision of the investment corporations Investment Guidelines Provision of new businesses General risk management of the Investment Corporation Private Fund Management Department Advisory Team Advisory concerning management for customers assets Operational Team Formulation of investment policies for discretionary funds Acquisition, disposal, leasing and management of assets of discretionary funds (*) DOI stands for Daiwa Office Investment Corporation. This document is not material disclosed in compliance with the Financial Instruments (**) DRP and stands Exchange for Daiwa Law or Residential any regulation Private of similar Investment nature, Corporation. nor is it intended for the purposes of solicitation. Daiwa Office Investment Corporation (***) NHI advises stands for reader Nippon to make Healthcare investment Investment decisions Corporation. their own judgment. 56

58 Support System Backed by Daiwa Securities Group Management platform based on the Daiwa Securities Group Daiwa Real Estate Asset Management Co. Ltd. Management by experienced professionals Disciplined management process Strict internal control/compliance system Provision of information and management know-how Provision of human resources We receive full-support from the Daiwa Securities Group to realize stable long-term management. Overview of the Daiwa Securities Group Company Name Established Representative Director Address Daiwa Securities Group, Inc. (Security code: 8601) May 1, 1902 (Note 1) Takashi Hibino, President and CEO (Note 1) GranTokyo North Tower 9-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo (Note 1) Fund procurement such as equity/debt financing Fund procurement Capturing the Daiwa Securities Group s clients needs of property sales, office relocations, etc. and collaborating with the Asset Management Company Property sourcing Tenant Leasing Full-scale support Daiwa Securities Group Recruitment and placement of human resources with expertise who can contribute to improvements in investment management and control capability Market Capitalization No. of Employees Assets under Custody No. of Shops No. of Cash Management Service Accounts 1,570.9 billion yen (as of the end of March 2014) (Note 1) 13,317 (as of the end of March 2014, No. of employees at the Group companies) 48.4 trillion yen (as of the end of March 2014) (Note 2) 132 (as of the end of March 2014) (Note 2) 3,603,000 accounts (as of the end of March 2014) (Note 2) (Note 1) Daiwa Securities Group, Inc. (Note 2) Daiwa Securities Co., Ltd. 57

59 Competitive Edge Establish highly-transparent business structure Strictly control conflicts of interest with sponsor Introduce financial institutions rigorous compliance framework Ensure high transparency and establish disciplined investment process Expand network of collaboration with the Daiwa Securities Group Remarkably expand financing capacity by capitalizing on the credit capability of the Daiwa Securities Group Reinforce leasing activities by capitalizing on the network of the Daiwa Securities Group Reinforce sourcing activities by capitalizing on the network of the Daiwa Securities Group Secure well-experienced, highly-professional human resources Develop team of outstanding professional staff by capitalizing on the human resources of the Daiwa Securities Group Employ excellent human resources from outside by drawing on the Daiwa Securities Group s brand power Increase number of employees with a high level of motivation to challenge new business stages 58

60 59