Earnings Presentation 11th Fiscal Period ended January 31, 2016 · 2016. 4. 11. · Advance...

Advance Residence Investment Corporation

August1,2015toJanuary31,2016

11thFiscalPeriodendedJanuary31,2016EarningsPresentation


©2016Advance Residence Investment CorporationAllRightsReserved

Index

　 TSETickerCode :3269　 Abbreviation :ADR　 FiscalPeriodEnd :EndofJanuary&July　 MainSponsor :ItochuCorporation　 AssetType :Residential

TheLargestPortfolioAmongResidentialJ-REITs 3

SolidTrackRecord,SolidGrowth 4-5

ExecutiveSummaryof11thFiscalPeriodResults 6-7

InternalGrowth 8-14

ExternalGrowth 15-18

Finances 19-21

ManagementPolicies&EarningsGuidance 22-25

Appendix 27-54

ThepurposeofthismaterialistopresentyouwithanupdateonthefinancialperformanceofAdvanceResidenceInvestmentCorporation(the“Corporation”).WedonotintendtoconductanyadvertisingorsolicitationwithrespecttoanyunitsoftheCorporationinconnectionwiththismaterial.Nothinginthismaterialshouldberegardedasanoffertosellorasolicitationofanoffertobuy,arecommendationtosellorbuy,oradirectorindirectofferorplacementof,anyunitsoftheCorporation,exceptforthepurposeofmeetingcertainrequirementsundertheEuropeanAlternativeInvestmentFundManagersDirective(EuropeanDirective2011/61/EU)(the”AIFMD”)asdescribedbelow.

DisclaimerforDutchInvestors：TheprospectuscontainingtheinformationrequiredunderArticle23(1)and(2)oftheAIFMDasimplementedintheNetherlands

isavailableat[http://www.adr-reit.com/en/financial/en/financial/sonota/].

Anyreproductionoruseofthismaterialotherthanforitsintendedpurposeisprohibitedwithoutpriorpermission.

2

TokyoCentral7Wards

CentralTokyoex7Wards

TokyoMetropolitan

MajorRegionalCities

0% 2.0% 4.0% 6.0% 8.0%

5.0%

4.4%

4.3%

4.1%

6.6%

6.1%

5.6%

5.0%

* AccordingtodatacollectedbyADIMfromthelatestdisclosuresmadebyeachresidentialJ-REITsasofJan.31,2016.



TheLargest*PortfolioAmongResidentialJ-REITs

*** BookvalueNOIiscalculatedas“annualizedNOI”÷“bookvalueattheendofFP2016/1”.NOIisannualizeaccordingtoactualnumberofdaysofoperationforeachpropertyduringFP2016/1.YieldafterDepreciationiscalculatedas(annualizedNOI-depreciation)÷bookvalueasofendofFP2016/1.

InvestmentLocation(byacquisitionpriceasofApril14,2016)

NumberofProperties TotalLeasableArea Leasableunits AssetsUnderManagement(AcquisitionPrice)

asofJan.31,2016

asofApr.14,2016**

251properties 760,453㎡　 20,231units 425.8billionyen

255properties 769,415㎡　 20,451units 433.8billionyen

3

NOIYields(%)***bylocation(asofJan.31,2016)

** Fourassets-to-be-acquiredasofMarch11,2016areincluded.

PortfolioYield5.6%4.4%

BookvalueNOIyieldYieldafterDepreciation

56%

Offices&StoresDormitory

2%Large2%

Family15%

Compact25%

Single56%

Over500KyenUnder500Kyen

1%Under300Kyen

2%

Under250Kyen21%

Under150Kyen23%

Under100Kyen52%

Unittype(byno.ofunitsasofJan.31,2016)

Single&Compacttypeunits80%

1% 0.4%

Rents(byno.ofunitsasofJan.31,2016)

Unitrentsunder250Kyen96%

MajorRegionalCities19%

TokyoMetropolitan10%

CentralTokyoex732%

TokyoCentral739%

Over15min1%

10minto15min6%

5to10min35% Under5min

58%

Students9%

Guranteedrent15%

Individuals46%

Corporate30%Over10yrs

38%

Over5yrsto10yrs59%

Under5yrs3%

Tokyo23Wards72%

BuildingAge(byacquisitionpriceasofJan.31,2016)

WeightedAverageAge10.1yrs

WalkingMinutestoTrainStation(byacquisitionpriceasofApril14,2016)

Under10min93%

TenantCategory(byno.ofunitsasofJan.31,2016)

Pass-throughcontracttenants76%

FP07-2013 FP01-2014 FP07-2014 FP01-2015 FP07-2015 FP01-2016

15.1%10.7%

29.3%

44.9%

15.2%10.5%

29.3%

44.9%

16.7%10.1%

28.8%

44.4%

19.8%

10.0%

30.8%

39.4%

19.1%

9.7%

31.5%

39.7%

19.3%

9.7%

31.3%

39.7%

85.0

90.0

95.0

100.0

%

96.5%



TheLargestPortfolioAmong

ResidentialJ-REITs

Topping425bnyen

MaintainingHigh

OccupancyRate

SolidTrackRecord,SolidGrowth

4

210 221 251249204

18,113 19,078 20,23120,12217,640

IncreasingEPSbyImplementingVariousMeasures

* NOIyield=annualizedNOI÷bookvalue.TheNOIareannualizedaccordingtothenumberofactualdaysofoperationforeachpropertiesduringtheperiods.* Yieldafterdepreciation=(annualizedNOI-depreciation)÷bookvalue.

Yield

AUM

TokyoCentral795.5%

MajorRegionalCities96.6%

CentralTokyoex797.1%

PeriodEndOccupancy

Portfolio96.7%

TokyoMetropolitan98.9%11thPeriod10thPeriod8thPeriod6thPeriod

417.6bn 424.1bn 425.8bn393.8bn

StableYieldLevels

7thPeriod

401.8bn

No.ofLeasableUnits

No.ofProperties

Occup

ancy

96.4% 96.6%96.6% 96.4%

71%

9thPeriod

96.1%

240

19,572

410.5bn

Assets

6thFP 7thFP 8thFP 9thFP 10thFP 11thFP

Portfolio Tokyo Central 7 Central Tokyo ex 7 Tokyo Metropolitan Major Regional Cities

FP07-2013 FP01-2014 FP07-2014 FP01-2015 FP07-2015 FP01-2016

4.3% 4.3% 4.4% 4.4% 4.5% 4.4%

5.5% 5.5% 5.6% 5.6% 5.7% 5.6%

Book-valueNOIYieldYieldafterDepreciation

TokyoCentral7CentralTokyoex7TokyoMetropolitanMajorRegionalCities

01-2013 07-2013 01-2014 07-2014 01-2015 07-2015 01-2016

FP07-2013 FP01-2014 FP07-2014 FP01-2015 FP07-2015 FP01-2016

4,5774,5725,070

4,5234,4154,267

4,500

50%

55%

GuidelineRange

FP07-2013 FP01-2014 FP07-2014 FP01-2015 FP07-2015 FP01-2016


LoweredLTVRangetoMaintainFlexibilityinPreparationforFutureFinancialVolatility

AcquisitionCapacity(@TotalAssetsLTVof53%)

approx.

7.0bnyen(estimateforFPendingJuly2016)

LoweredInterestRateWhileMaintainingDurationandFixedInterestRateDebt

Ratio

SteadilyGrowingEPU

OutstandingDividendReserve

33.5bnyen(afterFPJan.2016)

IncreasingNAVperUnit

inyen/unit

Liab

ilitie

s LTV

Deb

ts

Equitie

sDividen

dsNetAssetValue

* Incalculatingtheaverageinterestrate,theeffectofinterestrateswapsarereflected.Ifthereareanydiscrepanciesbetweentheprincipalamountoftheswapandtheunderliningamountofdebt,theswap’sprincipalamountwillbecappedattheunderliningamountofdebtinthecalculation.

* AppraisalLTV=(Outstandingamountofloanatthefiscalperiodend+Outstandingamountofbond)÷Appraisedvalueofthefiscalperiodendpropertyholdings

5

Fortheforeseeablefuture,maximumleveragewillbe50%forappraisalLTV,53%forTotalAssetsLTV.

max53%

5,130

4,5784,597 4,5934,615

* NAV/Unitiscalculatedasfollows.(FPendnetasset+FPendunrealizedgainorloss-dividendamountfortheFP)÷FPendnumberofissuedandoutstandingunits.

45.9%

52.4%52.3%

50.1%

47.2%47.3%

51.6%50.1%51.0%

52.1%51.2%

51.4%

max50%

6thFP 7thFP 8thFP 9thFP 10thFP 11thFP

AssetReplacements

4thFollow-OnOffering TotalAssetsLTVAppraisalLTV

AverageInterestRate*

FP07-2013 FP01-2014 FP07-2014 FP01-2015 FP07-2015 FP01-2016

92.7% 93.5%94.8%

99.8% 98.7% 98.4%3.8yrs 3.8yrs

4.1yrs 4.1yrs 4.1yrs 3.9yrs

DebtDurationFixedInterestRatio

1.28% 1.26% 1.23% 1.21%1.16% 1.14%

DividendPaidfromNetIncomeDrawdownfromDividendReserve

4,572NetGainonSales

503

FP07-2013 FP01-2014 FP07-2014 FP01-2015 FP07-2015 FP01-2016

216,739207,281198,261182,367171,850164,311

inyen/unit



ExecutiveSummaryCommittedinDeliveringStrongandStableDividend

ResultsforFiscalPeriodendedJan.31,2016

FiscalHighlights

ExternalGrowth

MaintainingHighOccupancywhileSucceedingtoRaiseRents

InternalGrowth FundRaisingActivities

4,578yen +48yenDividendperUnit* +6yen

chg.frominitialforecast chg.fromlastperiod

IncreaseinRevenue,ProfitsandDividend

SucceededinRaisingRents,MaintainedHighOccupancywhileAcquiringTwoRecentlyBuiltProperties

LoweredFinancingCostWhileMaintainingDurationandFixedInterestRateDebtRatio

6

* DividendperUnitmightbeabbreviatedasDPUhereafter.

取得価格

AcquiredTwoRecentlyBuiltPropertiesUsingOwnSourcingNetwork

AveragePeriodOccupancy

PortfolioRentChange

fromTennantReplacementsfromContractRenewals

96.5% +0.2%pt

+0.13% +0.12%+1.75% +1.34%+0.53% +0.21%

increasefromforecast

previousFPactualNo.ofProperties

AcquisitionPrice

NOIYield

2properties1.7billionyen

5.3%

AverageInterestRate

AverageDuration

FixedInterestRateDebtRatio

1.14% -0.02%pt3.9years -0.2years98.4% -0.3%pt

chg.onperviousFP

DuetoRiseinOccupancyandLowerFundingCost

NegativeGoodwillDrawdownPolicy

Drawdownofatleast335millionyenperFP

startingFPJan.2017

Equivalenttocompletelydrawingdown33.5billionyenoutstandingin100FiscalPeriodsorin50years’time



ResultsforFiscalPeriodendedJan.2016inmillionyen

fromAugust1,2015toJanuary31,2016

* Funding costs include interest payments for loans and bonds as well as other finance fees.** “RetainedEarnings”means“DividendReserve”.

(1)11thFPForecast

(2)11thFPResults (2)-(1)

(3)10thFPResults (2)-(3)

InitialForecastasofSept.8,2015

ResultsforFPJanuary2016

Changes Notes ResultsforFPJuly2015

Changes Notes

Revenue

15,015(250properties)

Periodavg.occupancy

96.3%


Periodavg.occupancy

96.5%+66

IncreaseinoccupancyIncomefrompenalty

Increasesinkeymoney&renewalfeeincome

+33+12+21


Periodavg.occupancy

96.6%+83

Fullperiodcontributionfrom2015/7acquisitionContributionfrom2016/1acquisition

DecreaseindividendfromSPCOff-peakdecreasesinkeymoney&renewal

feeincome

+176+19-33

-77

OperatingIncome7,454

(Depreciation:2,529)(Propertytaxes:811)

7,489(Depreciation:2,531)(Propertytaxes:811)

+34LeasingExpenses

IncreaseduetoriseinoccupancyDecreaseinutilityexpenses

G&AExpensesIncreasesinmanagementfeesduetohigherprofits

-15+27

-39


-11LeasingExpenses

Off-peakdecreasesinleasingexpensesIncreaseinpropertytaxesfrom2014acquisitionsG&AExpensesIncreaseinconsumptiontaxsettlementloss

+109-51

-46

OrdinaryIncome 5,889(Fundingcost*:1,560)

5,951(Fundingcost*:1,539)

+62 Decreaseinfundingcostsduetorepaymentofloansandbonds +22


+6 Decreaseinfundingcostsduetorefinancing +18

NetIncome 5,889 5,951 +62 5,944 +6

DrawdownofRetainedEarnings** 0 0 - Retainedearningsafterdividend:33.5bnyen33.5bnyen 0 - Retainedearningsafterdividend:33.5bnyen33.5bnyen

DividendAmount 5,889 5,951 +62 5,943 +7

EPU(yen) 4,530 4,577 +47 Unitsissuedandoutstanding1,300,000units

Unitsissuedandoutstanding 4,572 +5 Unitsissuedandoutstanding1,300,000units

Unitsissuedandoutstanding

Dividendperunit(yen) 4,530 4,578 +48 4,572 +6FFOperUnit(yen) 6,476 6,524 +48 6,497 +27

FFOPayoutRatio 70.0% 70.2% +0.2pt 70.4% -0.2pt

AppraisalLTV 47.4% 45.9% -1.5pt 47.3% -1.4pt

7

InternalGrowth

8

-0.6%

0%

0.6%

FP01-2013 FP07-2013 FP01-2014 FP07-2014 FP01-2015 FP07-2015 FP01-2016

-0.10% -0.20% -0.20% -0.10% +0.00%+0.20%

+0.53%



ThreeConsecutiveFiscalPeriodRiseinRent

RentRiseSeeninBothTenantReplacements&Renewals

Renewals*

9

No.ofUnits Ratio OldRent NewRent Difference %Change

Increase 608 units 54.7% 79 83 +3 +4.98%

Unchanged 172 units 15.5% 20 20 - -

Decrease 331 units 29.8% 37 35 -1 -4.18%

Total 1,111 units 100.0% 137 140 +2 +1.75%

No.ofUnits Ratio OldRent NewRent Difference %Change

Increase 451 units 22.4% 62 63 +1.3 +2.20%

Unchanged 1,552 units 77.1% 183 183 - -

Decrease 9 units 0.4% 1 1 -0.05 -3.35%

Total 2,012 units 100.0% 248 249 +1.3 +0.53%

inmillionyen inmillionyen

TokyoCentral7Wards+1.44% CentralTokyo+3.17% MetropolitanArea +0.65% MajorRegionalCities-0.04%

5thFP 6thFP 7thFP 8thFP 9thFP 10thFP 11thFP 5thFP 6thFP 7thFP 8thFP 9thFP 10thFP 11thFP

872units 1,169units 1,015units 1,221units 955units 1,460units 1,111unitsNo.ofreplacements 1,201units 1,952units 1,408units 2,251units 1,695units 2,646units 2,012unitsNo.ofrenewals

PortfolioRentChange**

0%

Threeconsecutivefiscalperiodriseinrent

FPJan.2016Results

ShareofRentChange(byno.ofunits)

RentChangesinTenantReplacements

FPJan.2016Results

ShareofRentChange(byno.ofunits)

RentChangesinTenantRenewals

-5%

0%

5%

FP01-2013 FP07-2013 FP01-2014 FP07-2014 FP01-2015 FP07-2015 FP01-2016

-3.70% -2.70%-1.00% -0.01% +0.30% +1.30% +1.75%

+1.75%

FP01-2013 FP07-2013 FP01-2014 FP07-2014 FP01-2015 FP07-2015 FP01-2016

54.7%56.1%43.8%47.4%32.3%28.1%26.4%

15.5%15.1%19.7%21.9%30.1%19.6%17.2%

29.8%28.8%36.5%30.7%37.5%52.4%56.4%DecreaseUnchangedIncrease

TenantReplacements*

+0.53%

FP01-2011 FP07-2011 FP01-2012 FP07-2012 FP01-2013 FP07-2013 FP01-2014 FP07-2014 FP01-2015 FP07-2015 FP01-2016

-0.97%

-0.53% -0.43% -0.55%-0.21% -0.30%

-0.12% -0.09% +0.05% +0.12% +0.13%+0.13%

* Rentchangeforpass-throughunitsthatarebothoccupiedatthebeginningandtheendoftheperiod.

TokyoCentral7Wards+0.78% CentralTokyo+0.54% MetropolitanArea +0.11% MajorRegionalCities+0.12%

**Rentchangeforallunitsthatarebothoccupiedatthebeginningandtheendoftheperiod.

0%

50%

100%

FP01-2013 FP07-2013 FP01-2014 FP07-2014 FP01-2015 FP07-2015 FP01-2016

22.4%8.4%1.8%0.4%

77.1%91.3%97.5%97.3%98.2%96.1%97.3%

0.4%0.3%0.6%2.3%1.8%3.9%2.7%

FP01-2011 FP07-2011 FP01-2012 FP07-2012 FP01-2013 FP07-2013 FP01-2014 FP07-2014 FP01-2015 FP07-2015 FP01-2016

1stFP 2ndFP 8thFP 9thFP 10thFP 11thFP

-1.56 -1.46-0.93 -0.98 -0.90 -1.00

Turnover&RenewalRate

FP01-2011 FP07-2011 FP07-2014 FP01-2015 FP07-2015 FP01-2016

85%86%87%86%79%74%

55mth41mth

56mth42mth40mth43mth

Inco

me

Expe

nse

100

100(93.8%)



RiseinNER

ImprovementinOccupancy

AchievingInternalGrowthintheResidentialSector

KeyMoneyIncomeGraduallyRisingYearonYear

Thefiguresarecalculatedbydividingmonthlykeymoneyandleasingexpensesbymonthlyrent.

LeasingRelatedIncomeandExpensesunit:monthrent

ChangesinNetEffectiveRent(NER)

101.3(95.0%)

101.4(95.0%) 101.0

(94.7%)

101.9(95.5%)

101.2(94.9%)

101.3

99.9100.6

100.4

99.0 IndexedPeriodAvg.Occupancy(Avg.Occupancyoftheincludedproperties)

×

AchievingInternalGrowth

‣ The 116propertiesthat are included in above chartsare propertiesheldsince the startof the FP01-2011.Followingproperties are excludedfromthe calculation.1) Propertieswithguaranteedrent or propertieswhere the whole buildingislet toone tenant.This is because fluctuationin“keymoney”and‘leasingrelatedexpensesdonoteffectADR’srentalincomefromthoseproperties.2)PropertiestargetedforExpats,wheretherearenokeymoneypractices.

‣ Numberofnewcontractsforeachfiscalperiodisasfollows,FP01-2011)1,754,FP07-2011)1,076,FP01-2012)872,FP07-2012)1,028,FP01-2013)981,FP07-2013)1,030,FP01-2014)796,FP07-2014)927,FP01-2015)837,FP07-2015)922,FP01-2016)792.‣ NetEffectiveRent Index iscalculatedasmonthly rentalofnew contractsandcommonfeespluskeyMoneyIncome dividedby 24 month,minusleasingrelated expensesdividedby24monthandweightedaveragedbyeach116propertiesrentable space foreachfiscal periodandindexedbyusing

theFP01-2011figureas100.

101.7

101.2(94.9%)

IndexedNetEffectiveRent

0

10

101.4

101.1(94.8%)

101.6(95.3%)

103.2

0.76

-1.87 -1.81

0.350.30

-1.66

0.58

-1.55 -1.67

0.73

FP1-2011 FP7-2011 FP7-2014 FP1-2016

-1.66

FP1-2015

0.66

FP7-2015>>>

>>>>>>

>>>

>>>

NER=MonthlyRent+(KeyMoney-LeasingExpense)÷24months

oneyearavg.47mth

PromotingInternalGrowthThroughImprovementinLeasingTermsandOccupancy

oneyearavg.86%

RenewalRate

TurnoverPeriod KeyMoney

LeasingExpenseExpensenetofkeymoney

100

102.2(95.9%)

104.7 104.0

101.8(95.5%)

85

90

95

100

03-2010

01-201107-20

1101-20

1207-20

1201-20

1307-20

1301-20

1407-20

1401-20

1507-20

1501-20

16

TokyoCentra

l7WardsCentra

lTokyo

MetropolitanAr

ea

MajorRegional

Cities Single Compact Family&LargePortfolio



ChangesinRents&RentGaps

RentsReboundEspeciallyinTokyoCentral7Wards

11

RentGapsfortheWholePortfolio+0.71%

* Rentchangeforpass-throughunitsheldatJan.31,2016.RentatMarch31,2010indexedas100.

95.5→95.7→95.8→95.9

RecentChangeinRentfortheWholePortfolio

2014/7 2015/1 2015/7 2016/1

RentChange*

byRegionRentChange*

byTypeofUnit

a) +0.1pt rise in rent index for the whole portfolio. ThirdconsecutiveFPriseinrent.

b) Therearemarked recovery in rents in TokyoCentral7Wardswhere it saw the largestrent declinein thepastespecially inareassuchasShibuya,Roppongi,Azabu,etc.

c) By being selective in the initial investments, rents for ADR’sregionalportfolio are stable as awhole.However, there arediscrepancies between cities, specifically, Sendai is boomingbutOsakaisweak.

UpwardRentChangesCanBeExpectedMainlyinTokyo23WardattheTimeofTenantReplacements

a) Rentsroseinalltypesofunits.b) Therewasalso rentrise in Single typeunits wherevolume in

demandislargestandrentsstable.c) AlthoughthenumberofunitsheldbyADRissmall,Largetype

units where the rent declined the most in the past, saw asignificantuptick.

ArentgapisagapbetweentheunitrentofnewtenantsofFPJan.2016(treatingthiscurrentrentasapproximationofmarketrent)andunitrentofexistingtenants,aggregatedforthewholeportfolioforleasingcontractsthatarepass-throughs.ThecalculationismadeoneachpropertyandbyeachunittypeforpropertiesheldattheendofFPJan.2016.A+0.71%gapmeansthat,ifthegapistobeclosedbyriseinexistingtenants’rents,thantheportfoliorentwillriseby+0.71%.

+0.53% +0.32%

-0.01% -0.12%MarketRent MarketRent+0.01%

+0.25%+0.45%

+0.71%

92

96

100

03-2010

01-201107-20

1101-20

1207-20

1201-20

1307-20

1301-20

1407-20

1401-20

1507-20

1501-20

16

PortfolioTokyoCentral7WardsCentralTokyoMetropolitanAreaMajorRegionalCities b)

c)PortfolioSingleCompactFamilyLarge



Large-ScaleRepairs&ConversionWorks

Large-scaleRenovationExecutedintheFPJan.2016

12

ExamplesofWorksCompletedinFPJuly2015

BeforeandAfterof“R-11RESIDIATenjinbashi”

C-18RESIDIAKami-Ikebukuro C-47RESIDIAKasai R-11RESIDIATenjinbashi

before

after

•Exteriorwallrepairs•Tilepeelingprevention•Entranceupgrades

•LEDlightingsincommonarea•Entrancehallupgrades

•Hallwayfloorsheetupgrades•Unitdoorrefurbishment

BuildingAge

14yrsBuildingAge

16yrsBuildingAge

16yrsTotalCost: 37,200thousandyen

TotalCost: 44,800thousandyen

TotalCost: 58,600thousandyen



EquipmentRenewalsandUpgrades

P-53RESIDIARoppongi-Hinokichokoen C-46RESIDIAMejiro

TotalCost: 5,080thousandyenUpgrades: 1,844thousandyenIncreaseinMonthlyRent: up28.2%ProjectedRecuperationPeriod: 6years

P-73RESIDIAShibaura

13

30unitsof9propertiesreceivedequipmentrenewalsandupgrades-AverageMonthlyRent+18.5%

BuildingAge

17yrsBuildingAge

16yrsBuildingAge

24yrs


*ProjectedRecuperationPeriodsareperiodsprojectedtorecuperatetheupgradecost.Thepercentageincreaseinmonthlyrentistheratioofrentagainsttheassumedaskingrentfornon-upgradedunits.


before

after

before

afterafter

before

ExamplesofWorksCompletedinFPJanuary2016

Openkitchenconversionmakingtheliving-dinningroomfeelmorespacious

Conversiontoamorecompactandmoderndesignkitchen

Convertedtoabetter2DKfloorplanbyJapanesetowesternstyleroomchange&kitchenrelocation

No.ofProperties: 18properties

TotalInvestment: 871millionyen

PerPropertyInvestment: 48millionyen

No.ofUpgradedUnits: 138units

No.ofUnitsLeased-out: 129units

%IncreaseinRent: 14.7%



MaintainingtheCompetitivenessofProperties

14

10YearPlannedWorks:Maximum43billionYen<10YearTotalProjectedDepreciationmillionyen

BySchedulingandExecutingProperMeasuresProperty’sCompetitivenessCanbeMaintained

4thFP 5thFP 6thFP 7thFP 8thFP 9thFP 10thFP 11thFP 12thFP 13thFP 14thFP 15thFP 16thFP 17thFP

DailyMaintenance

Large-scaleRenovation

EquipmentRenewalsandUpgradeWorks

Workscarriedoutataround15yearsintervals

Restorationworkscarriedoutatthetimeofeverytenantreplacement

Upgradesconsideredatthetimeofkitchen&bathroomequipmentrenewals(ataround15yearsintervals)

TrackRecordSincetheMerger(excludingdisposedproperties)

TrackRecordSincetheMerger(excludingdisposedproperties)asofMar.7,2016

FirstREITmanagementcompanytoberegisteredasFirst-Class-ArchitectOffice

0

400

800

1,200

1,600

FP07-2012 FP01-2013 FP07-2013 FP01-2014 FP07-2014 FP01-2015 FP07-2015 FP01-2016 (FP07-2016) (FP01-2017) (FP07-2017) (FP01-2018) (FP07-2018) (FP01-2019)

390310296134189165145112

2601526595

2328516485469440365332313352

228212185237

176117 625630597606558592576522452451387478330356

ExpensedRepairsCapEx(OtherRenovations)CapEx(Large-scaleRenovations)

P ro j e c t i o n

ExternalGrowth

15



NewAcquisitionsExecuteorAnnounced

* Acquisitionpricesareroundeddowntothenearestmillion.Theappraisalpricesatthetimeofacquisitionsarelisted.* NOIyields=appraisalNOI÷acquisitionprice×100%* Listedbuildingagesareasofthedateoftheacquisitionofeachproperty.

16

AcquiredPropertiesThroughOurOwnSourcingNetworkandfromtheSponsor’sPipeline

TokyoCentral7Wards MajorRegionalCities TokyoCentral7Wards TokyoCentral7Wards CentralTokyoex7 CentralTokyoex7

RESIDIAYoyogiII RESIDIASakae RESIDIANakanobuII RESIDIAOchanomizuII RESIDIABunkyo-HongoIII RESIDIAShin-OkachimachiII

Location Shibuya-ku,Tokyo Naka-ku,Nagoya Shinagawa-ku,Tokyo Chiyoda-ku,Tokyo Bunkyo-ku,Tokyo Taito-ku,Tokyo

Access 9min.walkfromJRYamanoteLineShinjukuStation

8min.walkfromMeijoLineYabachoStation

1min.walkfromAsakusaLineNakanobuStation

5min.walkfromGinzaLineSuehirochoStation

5min.walkfromMarunouchiLineHongo-3chomeStation

3min.walkfromOedoLineShin-OkachimachiStation

AcquisitionPrice 839million 868million 917million 821million 1,655million 4,650million

NOIYield 4.8% 5.7% 4.8% 4.9% 4.7% 4.6%

BuildingAge 7.7years 8.1years 2.0years 1.1years 1.7years 1.1years

LeasableUnits 31units 77units 44units 28units 48units 100units

Seller Third-partyThird-party ItochuCorporationItochuCorporationItochuCorporationItochuCorporation

AcquisitionsUsingOwnSourcingNetwork RecentlyBuiltSponsorDevelopedPropertiesLocatedwithintheTokyo23Wards

AcquisitionsExecutedinFPJan.2016 AcquisitionstobeExecutedinFPJuly.2016



PreparingforFutureExternalGrowth

17

* “ItochuGroupDevelopment Examples”arerental apartment property developmentsbyItochuCorporationand ItochuPropertyDevelopment Ltd.asof Feb.15,2016andlistedabove asa reference.Assuch,ADRisundernoobligationtoacquiretheproperties.

ExternalGrowthAchievedMainlyThroughSponsor’sPipeline

(basedonacquisitionprice)

SourcingfromThirdparties

* Original sellersto the bridge fundare re-categorized toeither “Sponsor Group”or“ThirdParty”

72％fromthirdparties

ChangesinVolumeofTradingInformation

PropertySourcesincetheMerger

Total19properties 1,610plannedunits approx.30billionyen

CentralTokyoex.7CentralTokyoex.7CentralTokyoex.7

LocationLocation PlannedUnits

⑨Minami-Kamata,Ota-ku 110⑩ Kameido,Koto-ku 129⑪ Kamata,Ota-ku 149⑫ Koenji-minami,Suginami-ku 58⑬ Kamiogi,Suginami-ku 58⑭ Koishikawa,Bunkyo-ku 43⑮ Ikegami,Ota-ku 42

7properties 589

OsakaOsakaOsaka


⑱ Toyotsucho,Suita 137⑲ Toyotsucho,Suita 60⑳ Oyodo-minami,Kita-ku,Osaka 84

3properties 281

DevelopmentsmostlyintheTokyo23Wards

Total6properties＋

TokyoCentral7TokyoCentral7TokyoCentral7


① Shimouma,Setagaya-ku 41②Minami-Shinagawa,Shinagawa-ku 83③ Kanda-Awajicho,Chiyoda-ku 28④ Sangenjaya,Setagaya-ku 70⑤Mita,Minato-ku 27⑥Meguro,Meguro-ku 51⑦ Soto-Kanda,Chiyoda-ku 35⑧ Shin-Ogawamachi,Shinjuku-ku 23

8properties 358

ItochuGroupDevelopmentExamples

Completedpropertiesareindicatedinredletters.

LandPlotsWaitingforBuildingPermit

no.ofprojects

(Basedonsigningdateoflandplottransactioncontract)

* FY:FiscalyearendingMarchinthefollowingcalendaryear.

CompletionPhotoof⑩Kameido,Koto-kuproject

TokyoMetropolitanTokyoMetropolitanTokyoMetropolitan


⑯ Nakahara-ku,Kawasaki 3911properties 391

BuildingCompletionScheduleandVolume RentalResidenceDevelopmentTrackRecord

Pipeline,Morethan20billionyenofCompletedDevelopments

TheSponsorisConsistentlyAcquiringLandplotsforDevelopment

12properties approx.20blnyen7properties approx.10blnyen6properties approx.10blnyen

ThirdParty72%

SponsorGroup28%

FP07-2013

FP01-2014

FP07-2014

FP01-2015

FP07-2015

FP01-2016

712765550948744

1,245

0

5

10

15

2010 2011 2012 2013 2014 2015

5

129

657

0

10

20

Completed FY2015 FY2016 FY2017

CompletedInDevelopmentPre-buildingPermit

billionyen

126 511

1H20082H2008

1H20092H2009

Mid-TermAug2010

FP01-2011

FP07-2011

FP01-2012

FP07-2012

FP01-2013

FP07-2013

FP01-2014

FP07-2014

FP01-2015

FP07-2015

FP01-2016



AppraisalValue

AppraisalDirectCapRate•UnrealizedProfitandLoss

SummaryofEndofFPJanuary2016Appraisal

＊ Book value NOI yield is calculated as follows. The total of actual NOI of properties at the end of eachperiodareannualized accordingtotheactualnumberofdaysofoperationdividedbythetotalbookvalueatendofeachperiods.

＊ Dotedlineexpressestheperiodsthatarebeforethemerger.

0

Unrealizedprofitof80billionyen

＊ ForAssetsacquiredduringtheFPJan.2016,appraisalvalueatthetimeofacquisitionisusedasthepreviousappraisalvalue.

4.8%4.9%

+=

19.4%ofPortfolioBook-value

18

5.6%

5.0%

NCFImpact +0.45billionyenRiseinAppraisalValue +10.22billionyen DCRImpact +9.77billionyen

5.6%

4.8%

inmillionyen

5.3%5.1%4.8%

4.6%4.6%

5.5% 5.5%

5.3% 5.3%

5.5%

5.4%

5.4%

5.3%

5.3% 5.4%

5.3%

5.3%

5.2%

5.5%

5.2%

5.5%

5.1%

5.7%

CapRateNowLowerthantheBottomBeforetheFinancialCrisis

Appraisal(inmillionyen)Appraisal(inmillionyen) AppraisalNCF(inmillionyen)AppraisalNCF(inmillionyen) DirectCapRate(%)DirectCapRate(%) ActualNOIYield(%) UnrealizedProfitandLoss(millionyen)UnrealizedProfitandLoss(millionyen)UnrealizedProfitandLoss(millionyen)

EndofFPJan.’16 diffvslastFP EndofFPJan.’16 diffvslastFP EndofFPJan.’16 diffvslastFP EndofFPJan.’16 BookValue(a)Differencefromtheappraisal

(b)(b)/(a)

TokyoCentral7Wards 189,263 +4,270 8,354 +13 4.35% -0.10pt 5.0% 163,655 +25,607 15.6%

CentralTokyoex.7Wards 158,394 +3,383 7,218 +15 4.49% -0.09pt 5.6% 129,983 +28,410 21.9%

Tokyo23WardsTotal 347,657 +7,653 15,573 +28 4.42% -0.09pt 5.3% 293,638 +54,018 18.4%

TokyoMetropolitan 47,298 +710 2,388 -7 5.02% -0.09pt 6.1% 39,020 +8,277 21.2%

MajorRegionalCities 98,290 +1,866 5,143 +1 5.18% -0.10pt 6.6% 80,534 +17,755 22.0%

PortfolioTotal 493,245 +10,229 23,105 +21 4.62% -0.10pt 5.6% 413,193 +80,051 19.4%

-Cap-rateCompression&IncreaseinUnrealizedProfit-

232propertiesoutof251properties(decreasedin8properties)

RiseinAppraisalValue

PropertieswithUnrealizedLoss

Totalunrealizedloss0.95billionyenin6properties

(Previousperiod1.24billionyenin10properties)

80,05167,75556,03135,29023,59614,0006,4603,604311

-2,144-6,678-8,053

UnrealizedProfit/Loss

Book-valueNOIYieldAppraisalDirectCapRate

5.6%

4.7% 4.6%

Finances

19

50%

55%

GuidelineRange

FP07-2013 FP01-2014 FP07-2014 FP01-2015 FP07-2015 FP01-2016



BuildingAStableFinancialBaseKeyFiguresonDebts

FP07-2015 Loan/BondRatio FP01-2016 Loan/Bond

Ratio

Loans 191.9bnyen 83% 187.7bnyen 83%

(Short-termloans) - - - -

Bonds 35.5bnyen 17% 38.5bnyen 17%

DebtOutstanding 227.4bnyen 100% 226.2bnyen 100%

TotalAssetLTV 51.6% 51.4%

AppraisalLTV 47.3% 45.9%

20

CreditRatings

JCR AA(Stable)

R&I A+(Stable)

DebtFinancingFPJanuary2016

Repayments DebtFinancing

AverageInterestRate

AverageInitialDuration

TotalAmount

*AmortizeddebtrepaymentsareincludedintheTotalAmountofRepayments.

11.0yen

1.02%

3.8years

LoweredFinancingCostWhileFinancinginLongerDebts

9.8bnyen

0.63%

7.7years

LTVManagement

max53%

45.9%

52.4% 52.3%

50.1%

47.2%

47.3%

51.6%50.1%

51.0%52.1%

51.2%

51.4%

max50%

Fortheforeseeablefuture,maximumleveragewillbe50%forappraisalLTV,53%forTotalAssetsLTV.

TotalAssetsLTVAppraisalLTV

AssetReplacements

4thFollow-OnOffering

FP07-2016FP01-2017

FP07-2017FP01-2018

FP07-2018FP01-2019

FP07-2019FP01-2020

FP07-2020FP01-2021

FP07-2021FP01-2022

FP07-2022FP01-2023

FP07-2023FP01-2024

FP07-2024FP01-2025

FP07-2025FP01-2026

3.52.0

2.5

3.01.54.02.0

8.04.08.0

1.85.5

1.82.47.96.88.4

11.712.211.46.5

14.8

6.0

12.97.5

19.1

9.413.511.0

16.7

0.63%0.73%0.82%

1.02%1.11%

FP07-2013 FP01-2014 FP07-2014 FP01-2015 FP07-2015 FP01-2016

1.28% 1.26% 1.23% 1.21% 1.16% 1.14% 7.7yrs7.9yrs7.7yrs7.9yrs7.0yrs

FP07-2013 FP01-2014 FP07-2014 FP01-2015 FP07-2015 FP01-2016

3.8yrs 3.8yrs 4.1yrs 4.1yrs 4.1yrs 3.9yrs



DiversifyingDuration,SettingUpaCommittedLineofCredit

LengthenedDuration,IncreasedRatioofFixedInterestDebtsandDiversifiedMaturityWhileLoweringFinancingCost

bnyen

Roundeddowntothenearest100millionyen

* Debtsprocuredduringtheperiodwhichwererepaidduringthesameperiodareexcluded.

* In Calculating the average interest rate for financing during the periods, amount outstanding and interest rate applicable at the end of each period is used.

FP01-2015Financing

* In Calculating the average debt duration for financing during the periods, amount outstanding at the end of each period is used to calculate the weighted average.

* In calculating the years to maturity, amortization is not counted.

FP07-20

14

Fina

ncing

* Short-term loans are excluded.

21

FP01-2016Financing

FP01-2014Financing

FP07-2014Financing

AverageInterestRate DebtDuration RatioofFixedInterestRateDebts

FP01-20

14

Fina

ncing

FP01-20

16

Fina

ncing

FP01-20

15

Fina

ncing

FP07--2015Financing FP

07-20

15

Fina

ncing

15billionyenContinuetostrengthenthefinancialbasebyfurtherflatteningthematurityladder

CommittedLineofCredit20billionyen

Avg.InterestRate Avg.RemainingDuration

FP07-2013 FP01-2014 FP07-2014 FP01-2015 FP07-2015 FP01-2016

1.6%1.3%0.2%5.2%6.6%7.3%

98.4%98.7%99.8%94.8%93.5%92.7%

FixedInterestRate FloatingInterestRateAvg.FundingRateDuringtheFP Avg.InitialDurationDuringtheFP

asofendofFP2016/1

1.38%1.25%

1.48%

1.01%1.18%

1.51%

1.18%1.05%

0.81% 0.83%0.98%

1.33%

0.94%1.06% 1.12%

1.00% 1.07% 1.18%0.98% 1.06%

LoansBondsAvg.InterestRateofMaturingDebt

FP2016/1AverageFundingInterestRate0.63%

ManagementPolicies&EarningsGuidance

22



DrawdownofReserveAccount

TheactualdividendswillbedecidedbytheADR’sboardbasedonacomprehensiveconsiderationofsuchfactorsasincrease/decreaseinportfoliorentandoccupancy,levelofcashreserves,levelofLTV,debtcosts.

23

Maximum50years(100FiscalPeriod)Drawdown

- Tooffsetrentincomelossduetoredevelopments&repairs- Tooffsetrentincomelossduetolossonsalesorimpairments- Tooffsetdilutionduetoincreaseinnumberofunits- Tooffsetlossduetounforeseenevents

● Tostabilizedividendreservewillbeusedforsuchpurposeas,

● ScheduleFPJuly2016 DividendreservetransferredtoTemporary

DifferencesAdjustmentReserveAccountFPJanuary2017 DividendfortheFPwillstartincludingthe

additionaldividend

DrawdownPayoutofAtLeast

335millionyenperFP

equivalentto259yenperunits@1,300,000units(asofFPJan.2016)

DPUFloorof4,500yenToBeMaintained

4,500yen

EPU+DrawdownPayout≥4,500yen EPU+DrawdownPayout<4,500yen

DrawdownPayout

EPUEPU

DrawdownPayout

Increasedrawdowntooffsetdeficit



EarningsGuidanceforFPJuly2016&Jan.2017inmillionyen

* Fundingcostsincludeinterestpaymentsforloansandbondsaswellasotherfinancefees.** “RetainedEarnings”means“DividendReserve”orafterendofFP2016/7“TemporaryDifferencesAdjustmentReserve”

(1)11thFPResults

(2)12thFPForecast (2)-(1)

ResultsforFPJan.2016

ForecastforFPJuly2016

(announcedMar.11,2016)

Changes NotesForecastforFPJan.2017

(announcedMar.11,2016)

Changes Notes

Revenue


Periodavg.occupancy

96.5%


Periodavg.occupancy

96.5%+280

NewlyAcquiredAssetsFullperiodcontributionfromFP2016/1&2016/7acquisition

SameStorePeakseasonincreaseinrentalincome

Peakseasonincreaseinkeymoney&renewalfee

+181

+10+88


Periodavg.occupancy

96.4%-66

NewlyAcquiredAssetsFullperiodcontributionfrom

FP2016/7acquisitionSameStore

Off-peakdecreaseinrentalincomePeakseasonincreaseinkeymoney&renewalfee

+71

-19-118

OperatingIncome7,489

(Depreciation:2,531)(Propertytaxes:811)


+20

LeasingExpensesIncreaseduetoassetsacquiredinFP2016/1&2016/7

PeakseasonincreaseIncreaseindepreciation

Expensingofpropertytaxesfrom2015acquisitionsGAExpenses

IncreaseinG&Aexpenses

-46-125-29-13

-44


-16

LeasingExpensesIncreaseduetoassetsacquiredinFP2016/7

Off-peakdecreaseIncreaseindepreciation

DecreaseinrepairsExpensingofpropertytaxesfrom2015acquisitionsGAExpenses

IncreaseinG&Aexpenses

-14+91-16+35-13

-31

OrdinaryIncome 5,951(Fundingcost*:1,539)


+15 Decreaseinnon-operatingincome -4 5,980(Fundingcost*:1,510)

+13 Decreaseinfundingcosts +29

NetIncome 5,951 5,967 +15 5,980 +13

DrawdownofRetainedEarnings** 0 0 - Retainedearningsafterdividend:33.5bnyen33.5bnyen 336 - Retainedearningsafterdividend:33.2bnyen33.2bnyen

DividendAmount 5,951 5,967 +15 6,316 +349

EPU(yen) 4,577 4,590 +13 Unitsissuedandoutstanding1,300,000units

Unitsissuedandoutstanding 4,600 +10 Unitsissuedandoutstanding1,300,000units

Unitsissuedandoutstanding

Dividendperunit(yen) 4,578 4,590 +12 4,859 +269FFOperUnit(yen) 6,524 6,569 +45 6,596 +27

FFOPayoutRatio 70.2% 69.9% -0.3pt 73.7% +3.8pt

AppraisalLTV 45.9% 46.7% +0.8pt 46.7% -

24

(3)13thFPForecast (3)-(2)

FP07-2016(forecast) FP01-2017(forecast) >>> >>> >>>

4,600 yen4,590 yen



DPUGrowthDriver

25

DPUof4,900yento5,000yenThroughPropertyAcquisitions,RentIncreasesandInterestPaymentReduction

EmphasisonDPU&NAV/UnitGrowthWhileRespondingtoChangesinBusinessEnvironment

PursueRentIncreaseWhileControllingLeasingExpenses

InternalGrowthLong-termFixedInterestRate

Borrowing,MaturityDiversification&ReduceFundingCost

AcquisitionMainlybySponsorSourcingandNegotiatedTransactions,Thereby,AvoidingtheHeatedMarket

FinancePolicyExternalGrowth

TotalDPUgrowthofaround100yen

*1 BecauseforecastfiguresofFPJan.2016andotherassumptionssuchasthatthenumberofoutstandingunitsweretostayunchangedtocalculatethefigures,actualfiguresmaydiffer.DepreciationonrepairsandrestorationworkprojectedinFP2017/7toFP2019/1.*2 AcquisitioncapacityiscalculatedusingtotalassetLTVof53%asalimitwhereacquisitionsarefinancedsolelyondebts.CalculationismadeonforecastfiguresoftotalassetsandoutstandinginterestbearingdebtsforFPJan.2017.*3 InterestpaymentreductionisbasedontheassumptionthatdebtsmaturinginFP2017/7&FP2018/1willberefinancedwithaninterestrateequivalenttowhatwasachievedinFP2016/1.

Increaseintaxesapprox.-60yen*1

(consumptiontax≒-30yenincreaseindepreciation≒-20yen)

FulluseofAcquisitionCapacity*2

40to50yen

ClosingofRentGap

60to70yen

InterestPaymentReduction

40to50yen*3

259yen

4,859yen

4,590yen

4,900yen

5,000yen

Target

DividendfromEPUDividendfromDrawdownTARGET



Note

26

Appendix

27



BalanceSheet

FiscalPeriodEndingJanuary31,2016FiscalPeriodEndingJanuary31,2016FiscalPeriodEndingJanuary31,2016FiscalPeriodEndingJanuary31,2016FiscalPeriodEndingJanuary31,2016FiscalPeriodEndingJanuary31,2016FiscalPeriodEndingJanuary31,2016　 AssetsAssetsAssetsAssets 　　　　 CurrentassetsCurrentassetsCurrentassetsCurrentassets 　

CashanddepositsCashanddepositsCashanddeposits 11,812,806CashanddepositsintrustCashanddepositsintrustCashanddepositsintrust 9,080,483OperatingaccountsreceivablesOperatingaccountsreceivablesOperatingaccountsreceivables 245,548Short-terminvestmentsecuritiesShort-terminvestmentsecuritiesShort-terminvestmentsecurities 3,000,000PrepaidexpensesPrepaidexpensesPrepaidexpenses 362,493OtherOther 8,847AllowancefordoubtfulaccountsAllowancefordoubtfulaccountsAllowancefordoubtfulaccounts △14,118CurrentassetsCurrentassetsCurrentassets 24,496,061

　　 FixedassetsFixedassetsFixedassetsFixedassetsProperty,plantandequipmentProperty,plantandequipmentProperty,plantandequipment

BuildingsBuildings 65,059,399StructuresStructures 16,812MachineryandequipmentMachineryandequipment 38,473Tools,furnitureandfixturesTools,furnitureandfixtures 83,075LandLand 69,855,727BuildingsintrustBuildingsintrust 129,471,548StructuresintrustStructuresintrust 95,100MachineryandequipmentintrustMachineryandequipmentintrust 100,496Tools,furnitureandfixturesintrustTools,furnitureandfixturesintrust 217,176LandintrustLandintrust 145,036,252ConstructioninprogressConstructioninprogress -Property,plantandequipmentProperty,plantandequipment 409,974,062

IntangibleassetsIntangibleassetsIntangibleassetsLeaseholdrightLeaseholdright 1,071,902LeaseholdrightintrustLeaseholdrightintrust 2,147,139OtherOther 130IntangibleassetsIntangibleassets 3,219,173

InvestmentsandotherassetsInvestmentsandotherassetsInvestmentsandotherassetsSecuritiesinvestmentsSecuritiesinvestments -Long-termprepaidexpensesLong-termprepaidexpenses 765,499GuaranteedepositsGuaranteedeposits 511,275GuaranteedepositsintrustGuaranteedepositsintrust 1,026,585OtherOther 1,632InvestmentsandotherassetsInvestmentsandotherassets 2,304,993

FixedassetsFixedassetsFixedassets 415,498,228　　 DeferredassetsDeferredassetsDeferredassetsDeferredassets

InvestmentunitissuanceexpensesInvestmentunitissuanceexpensesInvestmentunitissuanceexpenses 2,719InvestmentcorporationbondissuancecostsInvestmentcorporationbondissuancecostsInvestmentcorporationbondissuancecosts 111,024DeferredassetsDeferredassetsDeferredassets 113,743

　　 TotalAssetsTotalAssetsTotalAssetsTotalAssets 440,108,033

inthousandyen

inthousandyen

28

FiscalPeriodEndingJanuary31,2016FiscalPeriodEndingJanuary31,2016FiscalPeriodEndingJanuary31,2016FiscalPeriodEndingJanuary31,2016FiscalPeriodEndingJanuary31,2016FiscalPeriodEndingJanuary31,2016FiscalPeriodEndingJanuary31,2016

　 LiabilitiesLiabilitiesLiabilitiesLiabilities 　　　　 CurrentliabilitiesCurrentliabilitiesCurrentliabilitiesCurrentliabilities 　

OperatingaccountspayableOperatingaccountspayableOperatingaccountspayable 289,552

CurrentportionofinvestmentcorporationbondCurrentportionofinvestmentcorporationbondCurrentportionofinvestmentcorporationbond 8,000,000

Currentportionoflong-termloanspayableCurrentportionoflong-termloanspayableCurrentportionoflong-termloanspayable 27,725,822

Accountspayable-otherAccountspayable-otherAccountspayable-other 1,249,304

AccruedexpensesAccruedexpensesAccruedexpenses 193,799

AccruedconsumptiontaxesAccruedconsumptiontaxesAccruedconsumptiontaxes 40,690

AdvancesreceivedAdvancesreceivedAdvancesreceived 65,843

OtherOther 27,907

CurrentliabilitiesCurrentliabilitiesCurrentliabilities 37,592,920

　　 Long-termliabilities 　　Long-termliabilities 　　Long-termliabilities 　　Long-termliabilities 　　InvestmentcorporationbondInvestmentcorporationbondInvestmentcorporationbond 30,500,000

Long-termloanspayableLong-termloanspayableLong-termloanspayable 160,054,329

TenantleaseholdandsecuritydepositsTenantleaseholdandsecuritydepositsTenantleaseholdandsecuritydeposits 1,220,344

TenantleaseholdandsecuritydepositsintrustTenantleaseholdandsecuritydepositsintrustTenantleaseholdandsecuritydepositsintrust 3,079,261

Long-termliabilitiesLong-termliabilitiesLong-termliabilities 194,853,935

　　 LiabilitiesLiabilitiesLiabilitiesLiabilities 232,446,856

　 NetassetsNetassetsNetassetsNetassetsNetassets

　　 Unitholders'equityUnitholders'equityUnitholders'equityUnitholders'equity

Unitholders'capital,grossUnitholders'capital,grossUnitholders'capital,gross 114,936,698

SurplusSurplusSurplus

CapitalsurplusCapitalsurplus 53,220,279

ReservefordividendReservefordividend 33,552,162

Unappropriatedretainedearnings(undisposedloss)Unappropriatedretainedearnings(undisposedloss) 5,952,037

SurplusSurplus 92,724,479

Unitholders'equityUnitholders'equityUnitholders'equity 207,661,177　　 NetassetsNetassetsNetassetsNetassets 207,661,177　 LiabilitiesandnetassetsLiabilitiesandnetassetsLiabilitiesandnetassetsLiabilitiesandnetassetsLiabilitiesandnetassets 440,108,033

inthousandsyeninthousandsyen



FiscalPeriodEndingJanuary31,2016(fromAugust1,2015toJanuary31,2016)




A.RevenuefromPropertyLeasingA.RevenuefromPropertyLeasingA.RevenuefromPropertyLeasing

RentalRental

Rentincome 13,504,694Facilitycharge 654,669Parkingfee 446,853

Subtotal 14,606,218OtherrevenuesrelatedtopropertyleasingOtherrevenuesrelatedtopropertyleasing

Incomefromleasingrights,etc. 63,202Miscellaneousincome 413,073

Subtotal 476,275

Totalrevenuesfrompropertyleasing 15,082,493

B.RentalExpensesB.RentalExpensesB.RentalExpenses

TaxesandDuties 811,888Propertymanagementfees 1,024,528Utilities 252,971Repairsandmaintenance 576,129Insurance 24,828Trustfee 70,966Otherrentalexpenses 732,420Depreciationandamortization 2,531,022

Totalrentalexpenses 6,024,756

C.OperatingIncomefromPropertyLeasingActivities(A-B)C.OperatingIncomefromPropertyLeasingActivities(A-B)C.OperatingIncomefromPropertyLeasingActivities(A-B) 9,057,737






　Operatingrevenue 　　Operatingrevenue 　　Operatingrevenue 　　　Rentrevenue-realestateRentrevenue-realestate 15,082,493DividendincomeDividendincome -GainonsalesofrealestatepropertiesGainonsalesofrealestateproperties -OperatingrevenueOperatingrevenue 15,082,493

　Operatingexpenses 　　Operatingexpenses 　　Operatingexpenses 　　ExpensesrelatedtorentbusinessExpensesrelatedtorentbusiness 6,024,756AssetmanagementfeeAssetmanagementfee 1,039,662AssetcustodyfeeAssetcustodyfee 9,609AdministrativeservicefeesAdministrativeservicefees 63,032Directors'compensationsDirectors'compensations 3,600TaxesandduesTaxesanddues 260,119ProvisionofallowancefordoubtfulaccountsProvisionofallowancefordoubtfulaccounts 1,205BaddebtsexpensesBaddebtsexpenses -OtheroperatingexpensesOtheroperatingexpenses 191,307OperatingexpensesOperatingexpenses 7,593,292

　OperatingincomeOperatingincomeOperatingincome 7,489,201Non-operatingincomeNon-operatingincomeNon-operatingincome

InterestincomeInterestincome 11,066InterestonsecuritiesInterestonsecurities 1,552ClaimcompensationincomeClaimcompensationincome -ReversalofdistributionspayableReversalofdistributionspayable 2,912ReversalofallowancefordoubtfulaccountsReversalofallowancefordoubtfulaccounts 7,050Other 41Non-operatingincomeNon-operatingincome 22,623

Non-operatingexpensesNon-operatingexpensesNon-operatingexpensesInterestexpensesInterestexpenses 1,112,068InterestexpensesoninvestmentcorporationbondsInterestexpensesoninvestmentcorporationbonds 209,135AmortizationofinvestmentunitissuanceexpensesAmortizationofinvestmentunitissuanceexpenses 3,316InvestmentunitissuanceexpensesInvestmentunitissuanceexpenses 16,908BorrowingrelatedexpensesBorrowingrelatedexpenses 218,609OtherOther 133Non-operatingexpensesNon-operatingexpenses 1,560,172

　Ordinaryincome　Ordinaryincome　Ordinaryincome　 5,951,652　IncomebeforeincometaxesIncomebeforeincometaxesIncomebeforeincometaxes 5,951,652

Incometaxes-currentIncometaxes-currentIncometaxes-current 605IncometaxesIncometaxesIncometaxes 605

　NetincomeNetincomeNetincome 5,951,047RetainedearningsbroughtforwardRetainedearningsbroughtforwardRetainedearningsbroughtforward 989

　Unappropriatedretainedearnings(undisposedloss)Unappropriatedretainedearnings(undisposedloss)Unappropriatedretainedearnings(undisposedloss) 5,952,037

ProfitandLossStatement

inthousandsyeninthousandsyen

29

+24Samestorerentrevenueincrease



ResultsforFiscalPeriodendedJanuary2016

MaintainedHighOccupancy,DecreasedFundingCost

InternalGrowth

4,572 4,577

InitialDividendForecast

4,530ActualDividend

4,578

InitialGuidance

ActualDividend

4,572

+48

-4Increasein

restitutioncosts

FP2015/7Result

ChangesfromInitialEarningsGuidance(perunityen)

ChangesfromPreviousFiscalPeriodendedJuly2015Earnings(perunityen)

ExternalGrowth InternalGrowth Finance

inmillionyen

inmillionyen

EPU

Draw

down

perU

nit

+5

4,530

4,577

Increaseinrentrevenueduetoincreasein

occupancy

+51

No.ofProperties 250Occupancy 96.3%


One-offitem(Penaltyincome)

+14

Lowerfundingcost&increaseinnon-operating

profits

+14

30

FP2016/1Result

ActualDividend

4,578

fromAugust1,2015toJanuary31,2016

Decreaseininterestpaymentandincreaseinnon-operatingprofits

+15


FP2016/1Result

-32Increasein

managementfeeduetohigherprofit

-43Samestoreincreaseinrepairsanddepreciation

-39Fullperiod

expensingofpropertytaxesonproperties

acquiredin2014

-35Increasein

consumptiontaxsettlementloss,

etc.

FinanceNo.ofProperties 251

Occupancy 96.5%

InitialGuidance

FPJan.2016Results diff

Revenue

Operatingincome

Ordinaryincome

Netincome

Earningsperunit(yen)

Dividendperunit(yen)

15,015 15,082 +66

7,454 7,489 +34

5,889 5,951 +62

5,889 5,951 +62

4,530 4,577 +47

4,530 4,578 +48

FPJuly2015Results

FPJan.2016Results diff

Revenue

Operatingincome

Ordinaryincome

Netincome

Earningsperunit(yen)

Dividendperunit(yen)

14,998 15,082 +83

7,501 7,489 -11

5,945 5,951 +6

5,944 5,951 +6

4,572 4,577 +5

4,572 4,578 +6

+47

+84Rentrevenueincreaseduetonewlyacquired

properties

+6

4,6004,5904,577



EarningsGuidanceforFPJuly2016&Jan.2017

ExternalGrowth

AimingforEPUGrowth,DividendwithLowDownwardRisk

ActualDividend

4,578

DividendForecast

4,859DividendForecast

4,590

EPU+DrawdownPayout≥4,500yen

-10Expensingof

propertytaxesonproperties

acquiredin2015

Rentrevenueincreaseduetonewlyacquired

properties

+103

EPU+DrawdownPayout<4,500yenInternalGrowth

FP2017/1Result255properties

Occupancy96.4%


Occupancy96.5%

-43Declinein

operatingincomeduetooff-peak

season

inmillionyen FP2016/1Result(a) FP2016/7Forecast(b) diff(b-a) FP2017/1Forecast(b) diff(c-b)

Revenue 15,082 15,363 +280 15,296 -66

Operatingincome 7,489 7,509 +20 7,493 -16

Ordinaryincome 5,951 5,967 +15 5,980 +13

Netincome 5,951 5,967 +15 5,980 +13

Earningsperunit(yen) 4,577 4,590 +13 4,600 +10

Dividendperunit(yen) 4,578 4,590 +12 4,859 +269

31

-3Decreasein

non-operatingincome

4,500

Atleast335millionyenofretainedearningswillbedrawndowneveryFP

startingFP2017/1


Occupancy96.5%

-34Increasein

G&Aexpenses

259

inperunityen

EPU

DrawdownperUnit



PortfolioDiversificationPolicy

NumberofBedrooms ～30㎡～40㎡～50㎡～60㎡～70㎡～80㎡～90㎡ over90㎡

Studio S S C C L L L L

1Bedroom S C C C L L L L

2Bedroom - C C F F F F L

3Bedroom - - F F F F F L

4Bedroom～ - - - - F F F L

Unittypes Investmentratio*3

Single ～50%

Compact 20～40%Family 20～40%Large ～10%

Unittypes Investmentratio*3

Dormitory upto20%

InvestmentRegions*1InvestmentRegions*1Investmentratio*2Investmentratio*2

InvestmentRegions*1InvestmentRegions*1

Originally Revised

Tokyo23WardsTokyo23Wards70～

100%TokyoCentral7Wards 40～60%

70～

100%CentralTokyoex7Wards 20～40%

70～

100%

OtherRegionsOtherRegions

0～30%TokyoMetropolitan(ex.Tokyo23Wards) 5～20% 0～30%

MajorRegionalCities 5～20%

0～30%

Studio 1R,1K,STUDIO1Bedroom 1DK,1LDK2Bedroom 2DK,2LDK,1LDK+S3Bedroom 3DK,3LDK,2LDK+S

4Bedroom～ 4DK,4LDK,3LDK+S,orunitswithmorerooms

S = SingleTypeUnits mostlyforsingles C = CompactTypeUnits mostlyforsingles,couplesorsmallfamilies F = FamilyTypeUnits mostlyforfamilies L = LargeTypeUnits mostlyforforeignexecutives

DormitoryTypeUnits Theunitssharecommonbathroomsandlaundryspaceswithinintheproperty

■ In addition to theabove,weinvest in thefollowing unittype.

＊Note

1. OftheTokyo23Wards,Chiyoda,Shibuya,Shinjuku,Meguro,SetagayaandShinagawawardsareclassifiedasTokyoCentral7WardsandtheremainingwardsareclassifiedasCentralTokyo.OtherRegionsareTokyoMetropolitanArea(TokyoMetropolisexcludingtheTokyo23Wards,prefecturesofKanagawa,SaitamaandChiba)andMajorRegionalCities.

2. Investmentratiosarecalculatedbasedonacquisitionprice.

3. Investmentratiosarecalculatedbasedonleasablearea.

Unit-typeDefinition

Floorplan Unittypes

Life&SeniorHouseKohoku2,CollegeCourtTanashiandCocofumpHiyoshiarecategorizedasDormitorytypeduetotheircharacteristics

32

* Revisedtheinvestmentregionbysimplifyingthecategorytojusttwo,Tokyo23WardsandOtherRegionsandsettheInvestmentratioguidelineforeachregion.

Single

5.2% 5.6%*4BookValueNOIYield

12.5yrs*5 10.1yrsBuildingAge

atthetimeofmerger afterthetransactions

ImprovingYieldandReducingAverageAge

ThefiguresinthisslideareallbasedondataasofApril14,2016.*1 WeightedaverageNOIyieldofacquisitions

=TotalannualNOIasenteredontheappraisalofacquisitions+Totaloftheacquisitionprices×100%*2 WeightedaverageNOIyieldofdispositions=TotalactualannualNOI÷Totalofthehistoricalacquisitionprices×100*3 Weightedaveragebuildingageisacquisitionpriceweightedaverageasofthetimeofacquisitionordisposition.*4 The followingfiguresareusedtocalculatedthe BookValueNOIYield.AnnualizedNOI÷FPJan.2016endbook value,wherethe

NOI isannualizedusingthe actual days inoperationduringtheFPJan.2016.For the asset acquiredafter endof FPJan.2016toApril14,2016,theappraisalNOIisusedforannualizedNOIandtheacquisitionpriceisusedforbookvalue.

*5 WeightedAverageageofbuildingsheldatthetimeofmergerasofApril14,2016.*6 The SponsorGroupappliesto Itochu Corporation,whoisthe parent companyofADR’sasset management company,andits

subsidiaries.*7 The assetsacquired from the Sponsor Groupincludes 16propertiesdevelopedby the Sponsor Groupand6propertieswhich

were not developed but warehousedaccording toAdvance Residence’srequest.The 16properties’acquisitionprice total is28.7billionyen.The6properties’acquisitionpricetotalis9.1billionyen.

*8 Bridge Funds are property funds which are often TK and where ADR has a right of first refusal on the assets undermanagement.



BuildingaHighQualityPortfolio

Single Compact Family Large Dormitory Others Total

TokyoCentral7Wards +813 +5 -37 -170 0 -2 +609CentralTokyoex7 +1,725 +704 +430 +13 0 +12 +2,884

Tokyo23Wards +2,538 +709 +393 -157 0 +10 +3,493TokyoMetropolitan +398 +10 -72 0 -748 +1 -411MajorRegionalCities +1,809 +1,006 +263 +55 0 0 +3,133

OtherRegions +2,207 +1,016 +191 +55 -748 +1 +2,722TotalTotal +4,745 +1,725 +584 -102 -748 +11 +6,215

innumberofresidentialunits

TransactionssincetheMerger

TheSponsorGroup•6•7 BridgeFunds•8

ThirdpartyandOthers Total

No.ofProperties 22 42 45 109TotalAcquisitionValue(bnyen) 37.8 52.4 66.3 156.6

ShareofSources 24.2% 33.5% 42.3% 100.0%

AcquisitionFocusedonSingle-typeUnits

BalancedandDiversifiedAcquisitionSources

Acquisitions Dispositions

No.ofProperties 109 42

TotalValue(AcquisitionPrice) 156.6bnyen 68.7bnyen

WeightedAverageNOIYield 5.9%＊1 4.6%＊2

WeightedAverageBuildingAge*3 4.8yrs 13.1yrs

AcquisitionsandDispositionsSincetheMerger

33

asofApril.14,2016

UnittypeInvestmentRatio(byleasablearea)

attimeofMerger

asofApril14,2016

0% 25% 50% 75% 100%

4%

3%

2%

3%

5%

9%

26%

29%

27%

26%

36%

30%

Single Compact Family Large Dormitory Offices&Stores



SeniorHousingMarket

34

GrowingSeniorHousingMarketInvestmentPolicy

SeniorHousingHoldings

Advantages Specifics

Location

Feature

RentContract

Size

Operator

Residentialarea8minwalkfromYokohamaSubwayGreenline,Hiyoshi-HonchoStation

Facilitiestoprovidemedicalcare

Dayservice,homenursing,pharmacy,nursingoffice,medicalclinic

Lowupfrontpayment,reasonablerent Payonly2mth.depositupfront

Largerthanminimum500millionyen Acquisitionprice:1,050millionyen

PartofTSE1stSect.listedGroup GakkenCocofumpCorporation*

S-22Life&SeniorHouseKohoku2FP01-2016ActualNOIYield7.3%

S-29CocofumpHiyoshiFP01-2016ActualNOIYield6.7%

GrowingSeniorHousingMarket

RiskPremiumConsiderationConsideringoperationalrisksandpossibilityofissuesarisingfromoperatorcollectingupfrontlump-sum payment from tenants, certainamountofriskpremiummustbeaccounted.

Withtherecentriseinprice,reasonablypricedpropertiesarecurrentlynon-existent.

PreferenceTowardsRSHSSBetweenprivatenursinghomeandRegisteredSenior Housing with Supportive Servises(RSHSS), RSHSS are the preferred type ofasset.

They are easier to convert to regular rentalmultifamily residence andaremore stable tooperate having an affordable move-in fee (2month deposit) and a relatively low rentburden.

100

125

150

175

200

2010 2015 2020 2025 2030 2035 2040NationTotal Sapporo Sendai Tokyo23Wards YokohamaNagoya Kyoto Osaka Fukuoka

Populationtrendof65yearsorolder(Indexedusing2010figureas100)

Healthytoweak MinorNursingNeeds MajorNursingNeeds

PrivateRetirement/NursingHomes

PublicNursingHomesPublic

RetirementHomes

RegisteredSeniorHousingwithSupportiveServices

Area TokyoMetropolitan

Location Yokohama,Kanagawa

Acquisitionprice 1,670millionyen

No.ofrentableunits 78units

Operator SeikatsuKagakuUn-EiCo.,Ltd.

LevelofOut-of-pocketMonthlyBurden

Dependency

500Kyenandabove

400Kto500Kyen

300Kto400Kyen

250Kto300Kyen

160Kto250Kyen

130Kto160Kyen

100Kto130Kyen

60Kto100Kyen

* GakkenCocofumpCorporationisaleadingoperatorofRegisteredSeniorHousingwithSupportiveServices(RSHSS),operating71RSHSSasofMar.9,2016.

High

Low

Medium

C-50RESIDIAShin-Itabashi

P-3RESIDIANakameguro

C-28RESIDIAOji

P-85RESIDIAKomazawa

ActualNOIyield6.0%

ActualNOIyield6.1%

ActualNOIyield6.3%

ActualNOIyield6.5%

Location Itabashi-ku,Tokyo

Noofunits 67units

Completion Aug.2009

Location Kita-ku,Tokyo

Noofunits 61units

Completion Feb.2005

Location Setagaya-ku,Tokyo

Noofunits 59units

Completion Oct.2008

Location Meguro-ku,Tokyo

Noofunits 88units

Completion Feb.2005

ActualNOIyield5.6%Location Itabashi-ku,Tokyo

Noofunits 45units

Completion Feb.2007

C-66RESIDIATakashimadaira


Noofunits 44units

Completion Feb.2007

C-67RESIDIAShimurasakaue


Noofunits 94units

Completion Mar.2007

C-68RESIDIAShimurasakaueIIActualNOIyield5.6%


Noofunits 36units

Completion Mar.2007

C-69RESIDIAShimurasakaueIII



DormitoriesandStudentApartments

S-11TOKYOStudent-HouseWako

S-23CollegeCourtTanashi

ActualNOIyield

6.7%

* ActualNOIyield=FPJan.2016actualannualizedNOI÷bookvalue×100%.

Location Wako,Saitama

Noofunits 127unitsCompletionDate Apr.1990

Location Nishi-Tokyo,Tokyo

Noofunits 91unitsCompletionDate Feb.2010

No.ofproperties ActualNOIyield* Occupancy(Residentialportion) Noofrentableunits Totalofacquisitionprice Investmentratioof

portfolio

19properties 6.3% 100% 1,709units 18,099millionyen 4.2%*duetoguaranteedrentcontracts

35

asofApr.14,2016

ActualNOIyield

7.7%

No.ofdormitoriesservingbreakfast

anddinner 2properties

StudentapartmentsDormitories

S-30RESIDIASagamihara

C-74RESIDIANerima

S-15RESIDIAOkurayama

C-77RESIDIAOgikuboII

ActualNOIyield5.6%

ActualNOIyield5.0%

ActualNOIyield6.4%

ActualNOIyield6.4%

Location Sagamihara,Kanagawa

Noofunits 111units

Completion May2004

Location Yokohama,Kanagawa

Noofunits 64units

Completion Mar.1998

Location Suginami-ku,Tokyo

Noofunits 36units

Completion Mar.2007

Location Nerima-ku,Tokyo

Noofunits 34units

Completion Mar.2005

ActualNOIyield6.4%


Noofunits 45units

Completion Feb.2007

R-8RESIDIAKobePortIsland

ActualNOIyield8.0%

Location Kobe,Hyogo

Noofunits 404units

Completion Mar.2007/Feb.2008

R-38RESIDIAHirosedori

Location Okayama,Okayama

Noofunits 108units

Completion Mar.2004

R-60RESIDIAOkayama-EkimaeActualNOIyield7.1%

ActualNOIyield5.9%Location Kyoto,Kyoto

Noofunits 23units

Completion Mar.2005

R-61RESIDIAKyoto-Okazaki

ActualNOIyield6.9%Location Kyoto,Kyoto

Noofunits 154units

Completion Feb.1999

R-2RESIDIAImadegawa

Location Sendai,Miyagi

Noofunits 63units

Completion Feb.2010

Studentapartmentsarenormalapartmentsbutwherethenewtenantsareonthewholeexclusivelystudents. 17properties



InternalMigrationStatistics

PopulationInflowtoCentralTokyoandMajorRegionalCitiesContinues NetInflowisPre-dominantlyYoungerGeneration

Tokyo23Wards

MajorRegionalCities

TokyoMetropolitanAreaCity

ADR’sInvestmentRatio71%

TokyoPrefecture

Tokyo’sPopulationInflowbyAgeGroup

Single&CompactTypeUnits

* TheratioisfornumberofsingleandcompacttypeunitsinTokyo23wards.

ADR’sInvestmentRatio10% ADR’sInvestmentRatio*47%

ResidentialNeedsofYoungerGeneration

MigrationStatisticsofMajorCitiesinJapan

36

no.ofpeople50,000

60,000

70,000

Tokyo23Wards0

3,000

6,000

Yokohama

0

6,000

12,000

Sapporo Sendai Nagoya Kyoto Osaka Fukuoka

ADR’sInvestmentRatio19%

no.ofpeople no.ofpeople

no.ofpeople

Source:“ReportonInternalMigrationinJapan”StatisticsBureau,MinistryofInternalAffairsandCommunications(2015);“ReportonInternalMigration”StatisticsDivision

-35,000

0

35,000

70,000

agesunder20

ages20tound

er30

ages30tound

er6060orolder

201320142015



HousingStarts

HousingStartsHalvedfromthePeaksinceLehmanShock

Source:MinistryofLand,Infrastructure,TransportationandTourism,PolicyBureau,InformationPolicyDivision,ConstructionStatisticsOffice“HousingStarts”(RCandSRCConstructionRentedCollectiveHousing)(2015)

Tokyo23Wards MajorRegionalCities

TokyoMetropolitanArea

ADR’sInvestmentRatiointheRegion71%



Units

Units

Units

Units

Units

Units

Units

Units

37

0

6,500

13,000

2000 2005 2010 2015

Sapporo

0

3,250

6,500

2000 2005 2010 2015

Sendai

0

8,000

16,000

2000 2005 2010 2015

Nagoya

0

2,500

5,000

2000 2005 2010 2015

Kyoto

0

10,000

20,000

2000 2005 2010 2015

Osaka

0

6,500

13,000

2000 2005 2010 2015

Fukuoka0

3,500

7,000

2000 2005 2010 2015

Yokohama

0

22,500

45,000

2000 2005 2010 2015

Tokyo23Wards



60

80

100

120

140

0 5 10 15 20 25

Theo

retica

lInd

exed

Ren

t

BuildingAge(years)

Single-typeRentCompact-typeRent

MeasurestoReduceRentDeclinesCausedbyAging

GradualdeclineinCompetitiveness

Large-scalerenovationsofcommonareasandexteriors

Renovationsofindividualapartmentunits

* FiguresareindexedtheoreticalrentcategorizedbyyearandbuildingageusingactualrentsprovidedbyAtHomeCo.,Ltd.,ofwhichSumitomoMitsuiTrustResearchInstituteCo.,Ltd.statisticallyprocessedusinghedonicmethod.* Analysiswasconductedseparatelybetweenrentdatafromsingle-typeunits(18m2to30m2)andcompact-typeunits(30m2to60m2)ofapartmentin23wardsofTokyo.

Byhavingalong-termmanagementplanREITsaimtomaintainorevenimprovecompetitivenessofits

propertiesundermanagement.

Providinglivingenvironmentmatchingthetenants’needs

Supplyofnewproperties Equipmentsbecomeobsolete

Qualitydeclineduetowearing Changeintenants’needs DailyRepairsEquipmentMaintenance

BuildingMaintenance TimelyCapitalExpenditures

RentsDeclineduetoAging Measurestakentopreventorreducerentdeclines

DailyCleaning

38

2001/01 2004/10 2008/07 2012/04 2016/01

80

90

100

110

120

2001/01 2004/10 2008/07 2012/04 2016/01



RenovationExamplesinADR’sProperties

Individualapartmentunitupgradingrenovations

Cost:3,490thousandyen/unit(ofwhich887thousandyen

isfortheupgrade)

P-73RESIDIAShibaura Buildingage24years

CommonarearenovationCost:128millionyen

Individualapartmentunitupgradingrenovations

Cost;3,680thousandyen/unit(ofwhich1,097thousandyenisfortheupgrade)

CommonarearenovationCost:32millionyen

before

before

Bytakingpropermeasurescompetitivenesscanbemaintained

before

before

buildingage10yrs.

* RentsforRESIDIAShibauraareindexedbybasingtheaverageperm2rentduring2001as100.

S-19RESIDIAKichijoji Buildingage21years

buildingage15yrs.

buildingage15yrs. buildingage20yrs.

* RentsforRESIDIAKichijojiareindexedbybasingtheaverageperm2rentduring2001as100.

39

120

110

100

90

80

AcquiredDec.2004

Large-scalerenovationFeb.2010

Impactofthemeasurestaken

AcquiredJan.2005

Large-scalerenovationDec.2011

buildingage20yrs.

after

after

ExamplesofMeasuresTaken

after

after



BrandStrategy

IfRESIDIAtenantsmovetootherRESIDIAapartments,tenantsdonothavetopaykeymoneynorbrokerfee.Thereforetenantscan

savemovingcostandADRcankeephighoccupancy.

24hours,7daysaweek,RESIDIAcustomersupportfortenants.Providinghousekeepingservices(ex.cleaning)andemergency

responses(ex.waterleak,keylost),etc.

RESIDIALeasingWebsitehttp://www.residia.jp/

RESIDIAShibuyaBuildingSign

RESIDIACustomerSupport

MovingSupportfromRESIDIAtoRESIDIA

TheBrand

BrandingthroughLeasingWebsite&BuildingSigns

TenantServices

40

as of March 11, 2016(including to be acquired properties that are scheduled

to have their names changed to RESIDIA)

+

RESIDENCE“Residence” connotes quality and stateliness

ARCADIAa greek word representing

pastoral paradise

Residia is composed from the following words

239 properties which are mainly located in central Tokyo

KOBE

OSAKA

KANAGAWA

SAPPORO

CHIBAKYOTO

SENDAI

FUKUOKA

TOKYO

NAGOYA

OKAYAMAKAMEYAMA

Handedouttoanytenantswhorequested,provisions,helmets,portabletoilet,etc.HandingoutEmergencyKits(onlyfortenantsinMetropolitanAreaproperties)

“KAJITAKU”provideshousekeepingservices.KAJITAKU~TenantService~

q

GRESBisanindustry-drivenorganizationcommittedtoassessingthesustainabilityperformanceofrealestateportfolios(public,privateanddirect)aroundtheglobe.Thedynamicbenchmarkisusedbyinstitutionalinvestorstoengagewiththeirinvestmentswiththeaimtoimprovethesustainabilityperformanceoftheirinvestmentportfolio,andtheglobalpropertysectoratlarge.



Sustainability

41

DBJGreenBuildingCertification

MidtoLong-termMeasurestoRetain&IncreaseAssetValue&RaiseUnitholdersValue

EnvironmentalConsiderations ContributiontotheCommunity

InstallationofLEDLightings

Large-ScaleRepairsandEquipmentRenewalsandUpgrades

InstallationofAEDs

AEDsthatareopentopublicuseareinstalledin31properties.EmergencyMapsEmergency maps showing evacuation routes, available incommonareaof250properties.

Participated in the GRESB Survey in 2015 afterbeing the first residential J-REIT toparticipateinthesurveyin2014.

Propertieswithexceptionallyhighenvironmental&socialawareness

ParticipatedinGRESBSurvey2015

Lightingsforcommonareaof4propertiesreplacedwithenergyconservingLED.(LEDlightingsinstalledin27propertiesattheendofJan.2016)

5propertiesAwarded

P-76ParkTowerShibauraBaywardUrbanWing

*BasedonmaterialspublishedbyDevelopmentBankofJapansasofDec.31,2015andconsolidatedbyADInvestmentManagementCo.,Ltd.

Retainassetvalue,extendeconomiclifeandreducecarbonfootprintthroughrepairs,renewalsandupgrades.　DuringtheFiscalPeriodJan.2016large-scalerepairsdoneon3properties,upgradeson30unitsof9properties.

(Trackrecordsincethemerger:large-scalerepairson18properties,upgradeson16properties138units)

NO.1 HighestNumberofResidentialCertificateAwarded*

EmergencyKits

AED

EmergencyMap

DistributingEmergencyKits

Distributed1,034emergencykitstotenants.(thekitconsistsofemergencyrations,helmets,portabletoilets,etc.)

2015GRESBSurveyResult

NO.2AsiaResidentialSector

5つの認証スコアがありますが、表示する場合には､必ず貴社が日本政策投資銀行から通知を受けた「ＤＢＪ Green Building」ロゴマークを選択してください。下図の基本デザインから縮小または拡大して使用してください。.aiデータはCS3以下では使用しないでください。CS4以上が無い場合は必ず.jpgデータを使用してください。

●

●

●

※表示の表現については　　を参照してください。03

日本政策投資銀行が、環境・社会への配慮が優れた不動産を認証する「DBJ Green Building 認証」において、十分な「環境・社会への配慮」がなされたビルとして認証されました。

日本政策投資銀行が、環境・社会への配慮が優れた不動産を認証する「DBJ Green Building 認証」において、優れた「環境・社会への配慮」がなされたビルとして認証されました。

日本政策投資銀行が、環境・社会への配慮が優れた不動産を認証する「DBJ Green Building 認証」において、非常に優れた「環境・社会への配慮」がなされたビルとして認証されました。

日本政策投資銀行が、環境・社会への配慮が優れた不動産を認証する「DBJ Green Building 認証」において、極めて優れた「環境・社会への配慮」がなされたビルとして認証されました。

日本政策投資銀行が、環境・社会への配慮が優れた不動産を認証する「DBJ Green Building 認証」において、国内トップクラスの卓越した「環境・社会への配慮」がなされたビルとして認証されました。

DBJ Green Building2015




2015DBJ Green Building

基本デザイン_ 1

01

１２

３ 4

5

!

InstallationofVendingMachinew/DonationFunctionality

Thevendingmachinesareinstalledin26properties.VendingMachine

FourStarP-76ParkTowerShibauraBaywardUrbanWing

ThreeStarP-50RESIDIANishi-Azabu

P-55RESIDIATowerMeguro-FudomaeS-20PacificRoyalCourtMinatoMiraiOceanTower

TwoStarC-65RESIDIATowerKami-Ikebukuro



CostReductionsincetheMerger

PropertyManagement

Fees

Others

ElectricityBillforShared

Spaces

CustodialFees

BuildingManagement

Fees

AppraisalFees

20

LoweringCoststhroughEconomyofScale

　42total

■BuildingManagementFees

60

70

total

total

51

　84

totaltotal

total

■LEDLighting■AppraisalFees　

■PropertyManagementFees ■CustodialFees

■PropertyInsuranceFees

■ElectricityBillforSharedSpaces

Totalcostreductionsincethemerger 329millionyen/annumFPJuly2015costreduction 14millionyen/annum

■InternetProvider

inmillionyen/annum

*Allun-showndecimalsareroundeddown

42

FP01-2016 6PreviousFPs 77

FP01-2016 -PreviousFPs 51


FP01-2016 0.1PreviousFPs 42

FP01-2016 7PreviousFPs 63


LendersLoan

Outstanding(bnyen)

%share

SumitomoMitsuiTrustBank

TheBankofTokyo-MitsubishiUFJ

MizuhoBank

SumitomoMitsuiBankingCorporation

MitsubishiUFJTrust&Banking

DevelopmentBankofJapan

AozoraBank

MIzuhoTrust&Banking

ResonaBank

TheNorinchukinBank

ShinseiBank

TheBankofFukuoka

TaiyoLifeInsurance

TheNishi-NipponCityBank

TheYamaguchiBank

TokioMarine&NichidoFireInsurance

MitsuiSumitomoInsurance

TheTokyoTominBank

TheGunmaBank

TheKagawaBank

TheIyoBank

The77Bank

NipponLifeInsurance

TheHiroshimaBank

28.9 15.428.9 15.418.8 10.117.4 9.315.6 8.313.9 7.410.6 5.710.3 5.59.1 4.97.0 3.75.1 2.85.0 2.73.0 1.62.6 1.42.5 1.31.0 0.51.0 0.51.0 0.51.0 0.51.0 0.51.0 0.51.0 0.51.0 0.50.5 0.3

Total 187.7 100.0



LenderLine-up

TheLineupof24LendersIncludes3megabanks,3majortrustbanks

TotalInterestBearingDebt

226.2billionyen

Lenders TermOutstandingAmount(bnyen)

SumitomoMitsuiTrustBank,TheBankofTokyo-MitsubishiUFJ

MizuhoBank3y 20.0

InvestmentCorporationBonds Loans

CommittedLinesofCredit

43

IssueDateMaturity

Sept.2011

Apr.2012

Sept.2012

Apr.2013

Nov.2013

Apr.2014

Apr.2015

Oct.2015

3yrs #15*4bnyen0.86%

5yrs #138bnyen1.27%

#164bnyen1.08%

#178bnyen0.87%

#231.5bnyen0.326%

7yrs #142bnyen1.68%

#184bnyen1.23%

10yrs #193bnyen1.32%

#212.5bnyen1.04%

#222bnyen0.726%

#241.5bnyen0.846%

12yrs #202bnyen1.41%

FirstresidentialJ-REITtoissue10and12yearbonds

* #15hasbeenredeemedonApril2015.

asofJan.31,2016

InvestmentCorporationBonds17%

InsuranceCo.s3%

CentralCo-opBanks3%

RegionalBanks7%

OtherMajorBanks17% TrustBanks

24%

MegaBanks29%

0

100,000

200,000

300,000

400,000



UnitPriceChart

yen

2ndPublicOfferinglaunchedJanuary12,2012

closing@144,000

＊NAVandBPSareex-dividendfigures

BankofJapanannouncesassetpurchaseprogram

October5,2010

TSEListingMarch2,2010

1stPublicOfferinglaunched

June4,2010closing@120,600

3rdPublicOfferinglaunchedJanuary8,2013

closing@180,000

＊ TOPIX, TSE REIT Index and TSE REIT Residential Index are re-indexed by using Advance Residence’s March 2, 2010 closing price of 112,500 yen as base price.

KeyFigures FP01-2011 FP07-2011 FP01-2012 FP07-2012 FP01-2013 FP07-2013 FP01-2014 FP07-2014 FP01-2015 FP07-2015 FP01-2016

Marketcapitalization 168.8bnyenclosing@172,300

158.9bnyen

closing@162,200134.7bnyen









closing@260,500

DailyAverageTradingvolume 0.44bnyen3,247units

0.31bnyen1,917units

0.27bnyen1,907units

0.46bnyen3,160units

0.54bnyen3,208units

1.29bnyen6,055units

0.68bnyen3,174units

0.62bnyen2,684units

0.81bnyen2,922units

0.92bnyen3,181units

0.85bnyen3,344units

LTV(Totalassetsbase) 52.4% 53.5% 54.6% 53.7% 53.8% 51.2% 52.1% 51.0% 50.1% 51.6% 51.4%

NAVperUnit(yen) 152,749 154,360 156,459 155,966 158,313 164,311 171,850 182,367 198,261 207,281 216,739

exDividendPaymentReserve(yen) 113,307 117,984 120,504 124,465 127,061 136,917 144,656 156,497 172,452 181,686 190,929

BPS(yen) 159,564 156,548 156,140 152,689 152,440 153,020 152,821 155,220 155,160 155,161 155,161

exDividendPaymentReserve(yen) 120,122 120,172 120,185 121,188 121,188 125,626 125,626 129,351 129,351 129,351 129,351

ImpliedCAPrate 5.3% 5.5% 5.6% 5.4% 4.8% 4.7% 4.5% 4.3% 3.8% 4.1% 4.2%

4thPublicOfferinglaunchedJanuary9,2014

closing@224,800

FP01-2016EndJan.31,2016

closing@260,500

44

AnnouncedthereleaseofallcollateralJune15,2011

AcquiredcreditratingofAA-fromJCRJuly26,2011

IncludedintheFTSEEPRA/NAREITIndex

June7,2012

Proposedanintroductionofmanagementfeestructurelinkedtounit-holders’interest

Sept.9,2013

Themanagementco.becomesan100%subsidiaryofItochuGroup

June25,2015

CreditratingfromJCRupgradedtoAAfromAA-

January13,2015

ADRunitpriceTSEREITResidentialIndexTSEREITIndexTOPIX

2010/3 2010/7 2011/1 2011/7 2012/1 2012/7 2013/1 2013/7 2014/1 2014/7 2015/1 2015/7 2016/1



MajorUnitholders

IncreaseinOverseasOwnership asofJanuary31,2016

45

0%

25%

50%

75%

100%

FP07-2013 FP01-2014 FP07-2014 FP01-2015 FP07-2015 FP01-2016

8.9%9.2%9.9%11.1%12.0%13.4%15.1%14.7%15.0%18.3%19.6%23.2% 5.0%5.0%5.0%

5.5%5.6%6.0%

71.1%71.1%70.0%65.1%62.8%57.4%

JapaneseFinancialInstitutionsOtherJapaneseInstitutionsForeignInstitutionsandIndividualsDomesticIndividualsandOthers

Name of Unitholders Holdings (units) % share of issued and outstanding

　JapanTrusteeServicesBank,Ltd.(Tr.Acc.) 375,004 28.8%

TheMasterTrustBankofJapan,Ltd(Tr.Acc.) 125,511 9.7%

Trust&CustodyServicesBank,Ltd.(SecuritiesInv.Tr.Acc.) 74,721 5.7%

TheNomuraTrustandBankingCo.,Ltd.(Inv.Tr.Acc.) 45,758 3.5%

ITOCHUCorporation 34,800 2.7%

Trust&CustodyServicesBank,Ltd.(CashinTr.TaxableAcc.) 15,812 1.2%

NomuraSecuritiesCo.,Ltd.(ProprietaryAccount) 15,030 1.2%

StateStreetBank-WestPensionFundClients-Exempt 14,888 1.1%

TheFujiFireandMarineInsuranceCo.,Ltd. 13,278 1.0%

　MizuhoTrust&BankingCo.,Ltd. 11,528 0.9%

Number of UnitsNumber of Units Number of UnitholdersNumber of Unitholders

Units (%) Unit-holders (%)

Japanese Financial Institutions 924,015 71.1% 181 1.0%

TrustBanks 669,845 51.5% 14 0.1%RegionalBanks 126,760 9.8% 54 0.3%LifeInsurance 53,327 4.1% 11 0.1%

SecuritiesCompanies 30,537 2.3% 23 0.1%CasualtyInsurance 15,909 1.2% 6 0.0%

CreditUnions&Co-ops 11,068 0.9% 31 0.2%ShinkinBanks 13,830 1.1% 41 0.2%

CityBanks 2,739 0.2% 1 0.0%Other Japanese Corporations 65,031 5.0% 276 1.5%

Foreign Corporations andIndividuals 195,850 15.1% 264 1.4%

Domestic Individuals andOthers 115,104 8.9% 17,918 96.1%Total 1,300,000 100.0% 18,639 100.0%


©2016Advance Residence Investment CorporationAllRightsReserved 46

RentLevelsAreStableinCentralTokyoandMajorRegionalCitiesCap-RatesAreStableinTokyo23Wards

AppraisalValue(Indexed)

InvertedCap-rate(Indexed)

Cashflow(Indexed)

PortfolioAppraisalValueAnalyzedbyComponents

＊ Aboveindicesarecalculatedusingappraisalvalue,cashflowfiguresusedinthedirectcapitalizationmethodandtheinvertedcapitalizationratefrom145assetsheldfrom1sthalfof2008toendofJanuary2016.

Rent&CapRatebyRegion

TheCashflowofAssetsinCentralTokyoex7andMajorRegionalCitiesAreMoreStable

Aimingtohaveahighqualityportfoliothatrealizesstableprofitdistributionin

thelong-termbyformingbalancedportfoliowithassetsfromeachregion

withdifferentcharacteristics

VolatilityinCap-ratesofAssetsinTokyo23WardsAreSmallerComparedtoAssetsinTokyoMetropolitanAreaandMajorRegionalCities

70

80

90

100

110

1H2008

1H2009

02-2010 01-2

01101-2

01201-2

01301-2

01401-2

01501-2

016

Portfolio TokyoCentral7 CentralTokyoex7TokyoMetropolitan MajorRegionalCities

70

80

90

100

110

1H2008

1H2009

02-2010 01-2

01101-2

01201-2

01301-2

01401-2

01501-2

016


70

80

90

100

110

1H2008

1H2009

02-2010 01-2

01101-2

01201-2

01301-2

01401-2

01501-2

016


19 1020

4269

66

64

67

68Hakata

Hakata Ward Office

Fukuoka Prefectural Government Office

Chuo-ku

Hakata-ku

Sawara-ku

Fukuoka City Botanical Garden

Sanyo

Shinkansen Line

Kagoshima

Main Line

Chiyoda-ku

Chuo-ku

Minato-ku

Shinjuku-ku

Bunkyo-kuTaito-ku

Sumida-ku

Koto-ku

Shinagawa-ku

Meguro-ku

Ota-ku

Setagaya-ku

Shibuya-ku

Nakano-ku

Suginami-ku

Toshima-ku

Kita-ku

Arakawa-ku

Itabashi-ku

Nerima-ku

Adachi-ku

Katsushika-ku

Edogawa-ku

Ikebukuro

Shinjuku

Shibuya

ShinagawaMeguro

Kamata

Ueno

Kinshicho

Tokyo

5365

24

6260 66

263991

25

70

298151

389

75

45

31

92

4

6885

88

13

34

7

6319

90

15

21

96 7237

22 16 5267

2359

124 12

39 42

1745

4834

6371

51

47

159543

41

16

55

215826

1865

6867

69

66

28

50

70

56

60 36

36

5340

46 3562

29

7

1022 27

3361

32

2

38

6425

44 135981

414793

9

4287

32

33

69

84

10

56

79

6136

14

38

94

7455

4335

64

2

76

7386

95

3040

50

58 48

4998

99

97

19

23

49

3154

57

77

76

78

75

74

73

79

72

80

82 83

100

101

102

103

104105

106

108

37 524 8 84109 85

60

OkayamaOkayama

Tsuy

ama

Line

Kibi Line

Sanyo

Shinkansen Line

Uno Line

Okayama University

Okayama Prefectural Government

Okayama ity Office

Kounan Airport

Office

Fukuoka

Okayama

: Tokyo Central 7 Wards

: Tokyo 23 Wards

154950

29 2

111455 12

44

8

39

6

35

41

40

46

51

59

61

Mt. Maya

Osaka

Kyoto

Tokaido Main Line

Osaka

Kyoto

Kobe

Mt. Rokko

Mt. Myoken

Mt. Kenpi

Tokaido Main Line

Nara Line

Katamachi

Line

KansaiMain Line

Sanyo

Shinkansen Line

Sanin Main Line

13

38

37

56 54

52

57

62

Tohoku Shinkansen Line

Tohoku Main Line

Senzan Line

Taihaku-ku Wakabayashi-ku

Aoba-ku

SendaiAobayama Park

Tohoku University

Sendai City Athletic Stadium

2648

2531

34 24 5863

6545

Hakodate Main Line

Nishi-ku

Chuo-ku

Shiroishi-kuSapporo

JRA Sapporo Racecourse

Yanaga Hokkaido Museum

Clock Tower

Kita-ku

14

26

25 27

24

17

42

11

19

7

16

1528

5

22 29

12

23

3120

30

32

Kawaguchi

Kashiwa

Higashi-Matsudo

Musashikosugi

Kichijyoji

Tachikawa

Hachioji

Shin-Yokohama

Yokohama

Kawasaki

Tokyo

Chiba

Kanagawa

4

17

43

16

3027 32

362147

70

53Nagoya

Nagoya Castle

International Hotel Nagoya

Nagoya Dome

Higashi-ku

Naka-ku Chuo M

ain Li

ne

Tokaido Main Line

Tokaido

Shinkansen Line

Kansai

Main Line

Tsu

Yokkaichi

Kansai Main Line

5

KameyamaSuzuka Circuit

Kisei Main Line

Osaka

Kameyama

Nagoya

Sendai

Sapporo

:Major Regional Cities

:Tokyo Metropolitan Area



PortfolioMapasofApril.14,2016

47

No.ofProperties

255(includingassets-to-be-acquired)



Portfolio（asofJanuary31,2016）

48

No. PropertyName Location CompletionDate

RentableUnits

AcquisitionPrice

(milyen)

ShareofInvestment

(%)

AppraisalPrice

(milyen)

BookValue

(milyen)

UnrealizedProfitandLoss(%)

PML PeriodEndOccupancy

P-2 RESIDIAShimazuyama Shinagawa-ku,Tokyo 12-2004 115 2,860 0.7% 3,060 2,432 25.8% 4.3% 93.8%

P-3 RESIDIANakameguro Meguro-ku,Tokyo 2-2005 88 1,730 0.4% 1,990 1,464 35.9% 2.6% 100.0%

P-4 RESIDIASetagaya-Tsurumaki Setagaya-ku,Tokyo 3-2002 28 1,229 0.3% 1,190 1,152 3.2% 7.3% 96.8%

P-7 RESIDIAIkejiriohashi Setagaya-ku,Tokyo 8-2005 42 1,230 0.3% 1,350 1,182 14.2% 3.1% 100.0%

P-9 RESIDIAKudanshita Chiyoda-ku,Tokyo 3-2004 86 2,270 0.5% 2,490 2,078 19.8% 2.9% 100.0%

P-10 RESIDIAHatagaya Shibuya-ku,Tokyo 2-2006 35 1,130 0.3% 1,190 1,082 9.9% 7.3% 91.0%

P-13 RESIDIASakurajosui Setagaya-ku,Tokyo 7-2006 39 1,120 0.3% 1,250 1,077 16.0% 7.0% 97.9%

P-14 RESIDIAKita-Shinagawa Shinagawa-ku,Tokyo 2-2007 120 2,720 0.6% 2,920 2,589 12.8% 4.3% 100.0%

P-15 RESIDIAYoyoginomori Shibuya-ku,Tokyo 3-2007 22 732 0.2% 718 715 0.3% 4.4% 94.1%

P-16 RESIDIAShinjuku-EastIII Shinjuku-ku,Tokyo 2-2009 39 750 0.2% 850 735 15.5% 4.3% 100.0%

P-19 LeopalaceUdagawachoMansion Shibuya-ku,Tokyo 8-2001 30 588 0.1% 695 569 22.0% 8.2% 100.0%

P-21 RESIDIAShinjuku-EastII Shinjuku-ku,Tokyo 2-2004 54 1,380 0.3% 1,600 1,325 20.7% 4.8% 95.3%

P-22 RESIDIAShinjuku-East Shinjuku-ku,Tokyo 8-2000 48 941 0.2% 1,080 936 15.3% 5.3% 98.0%

P-23 RESIDIAKanda-Iwamotocho Chiyoda-ku,Tokyo 2-2004 65 1,520 0.4% 1,930 1,430 34.9% 4.1% 100.0%

P-24 RESIDIAAzabujubanII Minato-ku,Tokyo 2-2001 37 874 0.2% 974 887 9.8% 3.1% 97.1%

P-25 RESIDIAEbisu Shibuya-ku,Tokyo 1-2001 26 554 0.1% 631 567 11.2% 3.0% 93.9%

P-26 RESIDIAMeguro Shinagawa-ku,Tokyo 10-1999 20 722 0.2% 713 732 -2.7% 6.2% 83.8%

P-29 RESIDIAHirooII Shibuya-ku,Tokyo 11-2005 76 1,660 0.4% 1,980 1,560 26.9% 2.9% 94.1%

P-30 PianettaShiodome Minato-ku,Tokyo 2-2005 67 1,950 0.5% 2,130 1,835 16.0% 5.3% 98.7%

P-31 RESIDIAKomazawadaigaku Setagaya-ku,Tokyo 10-2004 18 333 0.1% 377 315 19.5% 8.5% 83.9%

P-32 RESIDIAYoyogi Shibuya-ku,Tokyo 2-2005 16 326 0.1% 382 313 21.9% 11.0% 100.0%

P-33 RESIDIANishi-Shinjuku Shinjuku-ku,Tokyo 2-2005 19 363 0.1% 410 349 17.2% 9.9% 100.0%

P-34 RESIDIAKyodo Setagaya-ku,Tokyo 2-2005 15 286 0.1% 327 271 20.5% 10.6% 100.0%

P-35 RESIDIAOimachi Shinagawa-ku,Tokyo 12-2005 48 947 0.2% 1,080 889 21.4% 4.3% 97.8%

P-36 RESIDIAEbisuII Shibuya-ku,Tokyo 1-2006 61 2,280 0.5% 2,680 2,238 19.7% 3.4% 97.7%

P-37 RESIDIAKamiochiai Shinjuku-ku,Tokyo 9-2006 70 1,180 0.3% 1,370 1,117 22.6% 4.8% 89.1%

P-38 RESIDIAHigashi-Shinagawa Shinagawa-ku,Tokyo 8-2006 122 2,040 0.5% 2,320 1,948 19.1% 4.0% 92.6%

P-39 RESIDIAMeguroII Meguro-ku,Tokyo 1-2006 34 1,190 0.3% 1,300 1,155 12.5% 6.5% 95.9%

P-40 RESIDIAToranomon Minato-ku,Tokyo 9-2006 63 1,320 0.3% 1,510 1,262 19.6% 3.3% 100.0%

P-41 RESIDIAShin-Ochanomizu Chiyoda-ku,Tokyo 3-2006 52 1,160 0.3% 1,420 1,116 27.2% 2.8% 100.0%

P-42 RESIDIAKagurazaka Shinjuku-ku,Tokyo 8-2006 52 918 0.2% 1,030 881 16.8% 2.1% 96.3%

P-43 RESIDIAOimachiII Shinagawa-ku,Tokyo 7-2007 40 1,050 0.2% 1,260 1,005 25.4% 4.8% 95.2%

P-45 RESIDIAJiyugaoka Meguro-ku,Tokyo 3-2002 28 1,050 0.2% 1,170 995 17.6% 7.3% 85.5%

P-47 RESIDIASuidobashi Chiyoda-ku,Tokyo 12-2004 65 2,310 0.5% 2,580 2,190 17.8% 2.3% 92.8%

P-48 RESIDIATOWERNogizaka Minato-ku,Tokyo 8-2004 68 3,660 0.9% 3,690 3,493 5.6% 3.5% 95.4%

P-49 RESIDIAAkasaka Minato-ku,Tokyo 5-2004 37 1,180 0.3% 1,300 1,123 15.7% 8.3% 97.7%

P-50 RESIDIANishi-Azabu Minato-ku,Tokyo 7-2004 125 6,780 1.6% 7,390 6,484 14.0% 2.8% 97.7%

P-51 RESIDIADaikanyama Shibuya-ku,Tokyo 7-2004 42 2,150 0.5% 2,050 2,025 1.2% 4.0% 93.6%

P-52 RESIDIAIchigaya Shinjuku-ku,Tokyo 8-2004 85 2,500 0.6% 2,850 2,373 20.1% 3.6% 100.0%

P-53 RESIDIARoppongi-Hinokichokoen Minato-ku,Tokyo 9-1999 89 3,570 0.8% 3,980 3,571 11.4% 6.8% 85.0%

P-55 RESIDIATOWERMeguro-Fudomae Shinagawa-ku,Tokyo 1-2007 358 16,500 3.9% 17,700 15,383 15.1% 1.8% 100.0%

P-56 RESIDIASangenjaya Setagaya-ku,Tokyo 1-2005 78 2,760 0.6% 3,310 2,586 28.0% 2.7% 98.2%

P-58 RESIDIAMinami-Aoyama Minato-ku,Tokyo 3-2005 13 728 0.2% 491 712 -31.1% 2.0% 100.0%

P-59 RESIDIAKanda-Higashi Chiyoda-ku,Tokyo 10-2003 64 1,620 0.4% 2,000 1,526 31.0% 3.4% 98.5%

P-60 RESIDIAHigashi-Azabu Minato-ku,Tokyo 4-2006 31 1,430 0.3% 1,430 1,364 4.8% 3.2% 90.7%

P-61 RESIDIAEbisu-Minami Shibuya-ku,Tokyo 3-2007 39 2,020 0.5% 2,080 1,960 6.1% 7.1% 97.9%

P-62 RESIDIATOWERAzabujuban Minato-ku,Tokyo 1-2003 113 6,190 1.5% 5,940 6,027 -1.4% 0.7% 90.4%


RentableUnits

AcquisitionPrice

(milyen)

ShareofInvestment

(%)

AppraisalPrice

(milyen)

BookValue

(milyen)



P-63 RESIDIAShibuya Shibuya-ku,Tokyo 6-2006 40 1,250 0.3% 1,470 1,215 20.9% 3.5% 97.4%P-64 RESIDIANakanobu Shinagawa-ku,Tokyo 11-2005 65 1,880 0.4% 2,280 1,790 27.3% 3.4% 96.9%

P-65 RESIDIAAzabudai Minato-ku,Tokyo 2-2006 47 1,610 0.4% 1,720 1,559 10.3% 4.6% 90.9%

P-66 RESIDIAShibadaimonII Minato-ku,Tokyo 8-2006 48 1,740 0.4% 1,800 1,695 6.2% 3.3% 97.9%

P-67 RESIDIAKanda Chiyoda-ku,Tokyo 6-2006 43 1,140 0.3% 1,340 1,100 21.7% 4.9% 97.9%

P-68 RESIDIASangenjayaII Setagaya-ku,Tokyo 3-2006 34 1,280 0.3% 1,450 1,232 17.6% 4.4% 94.3%

P-69 RESIDIANishi-ShinjukuII Shinjuku-ku,Tokyo 5-2007 74 1,830 0.4% 2,130 1,740 22.4% 10.9% 97.1%P-70 RESIDIAHiroo-Minami Shibuya-ku,Tokyo 8-2007 26 923 0.2% 987 884 11.6% 2.8% 100.0%P-72 RESIDIAMejiro-Otomeyama Shinjuku-ku,Tokyo 12-2002 19 974 0.2% 1,060 931 13.8% 4.9% 89.9%P-73 RESIDIAShibaura Minato-ku,Tokyo 9-1991 153 4,670 1.1% 5,450 4,470 21.9% 2.8% 94.7%P-74 RESIDIAGotenyama Shinagawa-ku,Tokyo 1-2007 16 930 0.2% 880 892 -1.4% 7.9% 86.6%P-75 RESIDIAYutenji Meguro-ku,Tokyo 8-2006 118 5,260 1.2% 5,700 5,097 11.8% 7.8% 91.2%

P-76 ParkTowerShibauraBaywardUrbanWing Minato-ku,Tokyo 5-2005 191 9,570 2.2% 10,800 9,089 18.8% 3.6% 95.0%

P-79 RESIDIAKamimeguro Meguro-ku,Tokyo 1-1993 16 878 0.2% 962 858 12.1% 7.7% 100.0%P-81 WindsorHouseHiroo Shibuya-ku,Tokyo 6-2003 12 1,750 0.4% 1,420 1,664 -14.7% 4.8% 100.0%P-84 RESIDIAKita-Shinjuku Shinjuku-ku,Tokyo 2-1997 26 1,460 0.3% 1,590 1,395 13.9% 8.8% 88.5%P-85 RESIDIAKomazawa Setagaya-ku,Tokyo 10-2008 59 870 0.2% 1,170 849 37.7% 10.0% 100.0%P-86 RESIDIAShibauraKAIGAN Minato-ku,Tokyo 1-2010 72 2,400 0.6% 2,920 2,380 22.7% 4.4% 95.1%P-87 RESIDIAIchigaya-Yakuoji Shinjuku-ku,Tokyo 8-2008 98 2,070 0.5% 2,480 2,040 21.5% 3.0% 100.0%P-88 RESIDIAYoga Setagaya-ku,Tokyo 6-2008 66 1,523 0.4% 1,820 1,579 15.2% 10.3% 93.1%P-89 RESIDIATOWERNakameguro Meguro-ku,Tokyo 3-2007 70 3,300 0.8% 4,190 3,389 23.6% 2.4% 90.4%P-90 RESIDIASasazukaII Shibuya-ku,Tokyo 1-2011 167 3,760 0.9% 4,430 3,771 17.5% 4.2% 96.4%P-91 RESIDIAMeguroIII Meguro-ku,Tokyo 1-2010 31 950 0.2% 1,230 972 26.5% 2.6% 100.0%P-92 RESIDIAJiyugaokaII Setagaya-ku,Tokyo 10-2007 17 778 0.2% 966 789 22.3% 5.4% 77.9%P-93 RESIDIAKudanshitaII Chiyoda-ku,Tokyo 1-2012 48 1,240 0.3% 1,600 1,255 27.4% 2.6% 98.4%P-94 RESIDIAOmoriII Shinagawa-ku,Tokyo 3-2012 90 1,620 0.4% 2,040 1,639 24.4% 2.2% 94.9%P-95 RESIDIAShirokane-Takanawa Minato-ku,Tokyo 3-2012 53 1,480 0.3% 1,920 1,499 28.1% 6.7% 93.0%

P-96 RESIDIANakaochiai Shinjuku-ku,Tokyo 3-2008 187 3,656 0.9% 4,240 3,815 11.1%A2.9%B2.9%C3.0%

94.8%

P-97 RESIDIANakameguroII Meguro-ku,Tokyo 8-2006 50 1,119 0.3% 1,350 1,137 18.6% 2.7% 95.8%P-98 ARTISCOURTMinamiaoyama Minato-ku,Tokyo 7-2008 23 1,720 0.4% 1,850 1,747 5.9% 3.9% 97.0%P-99 RESIDIAYotsuya-Sanchome Shinjuku-ku,Tokyo 5-2009 90 2,090 0.5% 2,630 2,127 23.6% 3.8% 96.1%P-100 RESIDIATakanawa-Katsurazaka Minato-ku,Tokyo 3-2006 45 900 0.2% 1,020 955 6.8% 5.4% 95.8%P-101 RESIDIAEbisuIII Shibuya-ku,Tokyo 3-2006 26 611 0.1% 729 655 11.2% 3.3% 96.7%P-102 RESIDIAShinjukugyoen Shinjuku-ku,Tokyo 10-2006 38 687 0.2% 807 731 10.4% 5.2% 97.5%P-103 RESIDIAMinami-Shinagawa Shinagawa-ku,Tokyo 10-2013 50 1,177 0.3% 1,320 1,221 8.0% 8.7% 95.9%P-104 ChesterCourtOchanomizu Chiyoda-ku,Tokyo 3-2007 118 3,117 0.7% 3,760 3,191 17.8% 2.4% 92.8%P-105 RESIDIAKanda-IwamotochoII Chiyoda-ku,Tokyo 4-2007 48 1,280 0.3% 1,520 1,321 15.0% 2.8% 98.3%P-106 RESIDIAShinagawa Shinagawa-ku,Tokyo 6-2007 36 980 0.2% 1,140 1,013 12.4% 4.0% 87.9%P-107 RESIDIAYoyogiII Shibuya-ku,Tokyo 1-2008 31 839 0.2% 924 905 2.0% 8.4% 93.4%C-1 RESIDIAMitsukoshimae Chuo-ku,Tokyo 2-2005 105 1,920 0.5% 2,370 1,627 45.7% 3.3% 99.3%C-2 RESIDIAKamata Ota-ku,Tokyo 3-2005 166 2,640 0.6% 3,420 2,207 55.0% 4.7% 97.6%C-3 RESIDIAIkebukuro Toshima-ku,Tokyo 3-2005 60 1,520 0.4% 1,730 1,421 21.7% 7.1% 100.0%C-4 RESIDIABunkyo-Hongo Bunkyo-ku,Tokyo 7-2005 65 1,680 0.4% 2,070 1,583 30.7% 4.6% 100.0%C-5 RESIDIAAsakusabashi Taito-ku,Tokyo 8-2005 47 1,060 0.2% 1,350 959 40.7% 2.9% 97.0%C-6 MaisonEclaireeEkoda Nerima-ku,Tokyo 3-1993 94 953 0.2% 1,060 926 14.4% 9.2% 94.7%C-7 RESIDIAUeno-Okachimachi Taito-ku,Tokyo 2-2006 127 3,160 0.7% 3,570 2,922 22.1% 2.1% 94.1%C-8 RESIDIABunkyo-HongoII Bunkyo-ku,Tokyo 1-2006 70 1,623 0.4% 1,750 1,569 11.5% 3.6% 97.8%C-9 RESIDIARyogoku Sumida-ku,Tokyo 2-2006 48 913 0.2% 1,110 866 28.1% 9.1% 100.0%



Portfolio

49


RentableUnits

AcquisitionPrice

(milyen)

ShareofInvestment

(%)

AppraisalPrice

(milyen)

BookValue(milyen)



C-10 RESIDIAHigashi-Ginza Chuo-ku,Tokyo 9-2006 169 5,251 1.2% 5,430 5,095 6.6% 4.3% 100.0%C-12 RESIDIANihonbashi-NingyochoII Chuo-ku,Tokyo 1-2007 137 3,180 0.7% 3,590 3,019 18.9% 4.6% 97.1%C-13 RESIDIAOmori-Higashi Ota-ku,Tokyo 8-2007 81 1,980 0.5% 1,980 1,877 5.5% 3.8% 97.9%C-15 RESIDIAKinshicho Sumida-ku,Tokyo 11-2007 157 4,200 1.0% 4,430 4,072 8.8% 7.2% 94.9%C-16 RESIDIANegishi Taito-ku,Tokyo 12-2005 28 856 0.2% 899 834 7.8% 7.7% 96.5%C-17 RESIDIAShinkawa Chuo-ku,Tokyo 2-2003 83 1,880 0.4% 2,160 1,788 20.8% 5.3% 90.9%C-18 RESIDIAKamiikebukuro Toshima-ku,Tokyo 12-2001 44 558 0.1% 683 555 22.9% 6.4% 92.9%C-19 RESIDIAShin-nakano Nakano-ku,Tokyo 6-2002 24 352 0.1% 466 329 41.6% 3.8% 96.7%C-21 RESIDIABunkyo-YushimaII Bunkyo-ku,Tokyo 3-2004 63 1,010 0.2% 1,140 947 20.3% 5.3% 98.4%C-22 RESIDIATsukiji Chuo-ku,Tokyo 12-2005 54 1,460 0.3% 1,760 1,358 29.6% 3.4% 100.0%C-23 RESIDIASasazuka Suginami-ku,Tokyo 3-2000 96 1,800 0.4% 2,040 1,813 12.5% 6.9% 93.7%C-24 RESIDIAKyobashi Chuo-ku,Tokyo 1-2005 52 1,220 0.3% 1,430 1,144 25.0% 3.4% 100.0%C-25 RESIDIATamagawa Ota-ku,Tokyo 9-2004 98 1,300 0.3% 1,570 1,206 30.2% 5.9% 100.0%C-26 RESIDIAKorakuen Bunkyo-ku,Tokyo 10-2004 31 603 0.1% 715 561 27.3% 3.5% 97.2%C-27 RESIDIAGinza-Higashi Chuo-ku,Tokyo 9-2004 94 2,000 0.5% 2,400 1,879 27.7% 4.0% 100.0%C-28 RESIDIAOji Kita-ku,Tokyo 2-2005 61 867 0.2% 1,000 799 25.0% 3.2% 100.0%C-29 RESIDIAMejiroII Toshima-ku,Tokyo 7-2005 63 1,050 0.2% 1,180 994 18.6% 2.3% 95.3%C-31 RESIDIATsukishima Chuo-ku,Tokyo 2-2006 40 1,100 0.3% 1,230 1,039 18.4% 6.8% 100.0%C-32 RESIDIAKamataII Ota-ku,Tokyo 9-2006 78 1,360 0.3% 1,590 1,295 22.7% 4.0% 96.5%C-33 RESIDIATsukishimaII Chuo-ku,Tokyo 9-2006 105 2,440 0.6% 2,790 2,332 19.6% 3.8% 95.4%C-34 RESIDIAKinshichoII Sumida-ku,Tokyo 1-2008 99 2,380 0.6% 2,580 2,272 13.6% 4.7% 94.0%C-35 RESIDIABunkyo-Otowa Bunkyo-ku,Tokyo 8-2003 104 3,380 0.8% 3,780 3,112 21.4% 4.7% 94.2%C-36 RESIDIABunkyo-Sengoku Bunkyo-ku,Tokyo 2-2003 33 707 0.2% 846 650 30.0% 5.0% 96.6%C-37 RESIDIABunkyo-Yushima Bunkyo-ku,Tokyo 2-2003 39 1,050 0.2% 1,270 975 30.2% 6.9% 100.0%C-38 RESIDIAIkegami Ota-ku,Tokyo 7-2003 19 378 0.1% 404 353 14.3% 8.5% 93.9%C-39 RESIDIANihonbashi-Ningyocho Chuo-ku,Tokyo 3-2004 25 557 0.1% 720 516 39.4% 5.6% 100.0%C-40 RESIDIABunkyo-SengokuII Bunkyo-ku,Tokyo 4-2005 45 1,440 0.3% 1,600 1,370 16.8% 4.1% 97.5%C-41 RESIDIAIriya Taito-ku,Tokyo 12-2004 49 990 0.2% 1,100 906 21.3% 5.4% 96.0%C-42 RESIDIANihonbashi-Hamacho Chuo-ku,Tokyo 8-2006 45 1,310 0.3% 1,480 1,264 17.0% 4.5% 93.4%C-43 RESIDIAShin-Okachimachi Taito-ku,Tokyo 3-2007 69 1,860 0.4% 2,070 1,780 16.2% 3.0% 96.7%C-44 RESIDIAChidoricho Ota-ku,Tokyo 9-2006 60 1,290 0.3% 1,380 1,227 12.4% 5.0% 96.7%C-45 RESIDIAShinkawaII Chuo-ku,Tokyo 2-2003 36 1,320 0.3% 1,470 1,225 19.9% 3.9% 95.1%C-46 RESIDIAMejiro Toshima-ku,Tokyo 1-1999 162 6,280 1.5% 7,170 6,171 16.2% 2.6% 95.4%C-47 RESIDIAKasai Edogawa-ku,Tokyo 1-2000 29 683 0.2% 789 680 16.0% 7.0% 93.4%C-48 RESIDIANihonbashi-Bakurocho Chuo-ku,Tokyo 2-2007 132 5,500 1.3% 6,580 5,193 26.7% 2.4% 100.0%C-49 RESIDIASuginami-Honancho Suginami-ku,Tokyo 2-2009 194 3,834 0.9% 5,140 3,714 38.4% 4.3% 100.0%C-50 RESIDIAShinItabashi Itabashi-ku,Tokyo 8-2009 67 888 0.2% 1,190 869 36.8% 8.6% 100.0%C-51 RESIDIAKiba Koto-ku,Tokyo 3-2008 155 1,950 0.5% 2,850 1,946 46.4% 7.2% 97.4%C-52 RESIDIABunkyo-Yushima Bunkyo-ku,Tokyo 12-2008 52 1,129 0.3% 1,450 1,115 30.0% 4.4% 96.9%C-53 RESIDIABunkyo-Honkomagome Bunkyo-ku,Tokyo 3-2008 98 2,340 0.5% 2,840 2,338 21.5% 3.5% 100.0%C-54 RESIDIATsukishimaIII Chuo-ku,Tokyo 2-2008 119 2,570 0.6% 3,500 2,534 38.1% 4.0% 94.1%C-55 RESIDIAMinamisenju Arakawa-ku,Tokyo 3-2007 175 2,580 0.6% 3,490 2,544 37.2% 5.3% 100.0%C-56 RESIDIAOgikubo Suginami-ku,Tokyo 3-2003 101 1,710 0.4% 2,170 1,778 22.0% 4.5% 97.0%C-57 RESIDIAMonzennakacho Koto-ku,Tokyo 2-2005 68 970 0.2% 1,270 994 27.8% 7.6% 98.5%C-58 RESIDIAOchanomizu Bunkyo-ku,Tokyo 9-2005 80 2,090 0.5% 2,730 2,089 30.7% 4.2% 95.4%C-59 RESIDIAOmori Ota-ku,Tokyo 3-2006 75 1,150 0.3% 1,420 1,148 23.6% 1.8% 97.4%C-60 RESIDIANakamurabashi Nerima-ku,Tokyo 2-2008 66 1,075 0.3% 1,340 1,067 25.5% 4.5% 90.5%C-61 RESIDIAKachidoki Chuo-ku,Tokyo 2-2008 55 1,805 0.4% 2,370 1,797 31.9% 4.9% 92.8%


RentableUnits

AcquisitionPrice

(milyen)

ShareofInvestment

(%)

AppraisalPrice

(milyen)

BookValue

(milyen)



C-62 RESIDIABunkyo-OtowaII Bunkyo-ku,Tokyo 2-2008 89 2,268 0.5% 2,880 2,328 23.7% 4.0% 96.4%C-63 RESIDIAKinshichoIII Koto-ku,Tokyo 2-2005 51 651 0.2% 823 669 22.9% 9.6% 100.0%C-64 RESIDIAKamataIII Ota-ku,Tokyo 3-2007 53 948 0.2% 1,210 950 27.4% 3.5% 95.2%

C-65 RESIDIATowerKami-Ikebukuro Toshima-ku,Tokyo 3-2009 472 8,250 1.9% 10,600 8,368 26.7%Twr5.7%Prk5.4%Anx2.9%

97.5%

C-66 RESIDIATakashimadaira Itabashi-ku,Tokyo 2-2007 45 502 0.1% 596 532 12.0% 4.8% 100.0%C-67 RESIDIAShimurasakaue Itabashi-ku,Tokyo 2-2007 44 580 0.1% 671 613 9.4% 3.4% 100.0%C-68 RESIDIAShimurasakaueII Itabashi-ku,Tokyo 3-2007 94 1,093 0.3% 1,310 1,142 14.6% 5.6% 100.0%C-69 RESIDIAShimurasakaueIII Itabashi-ku,Tokyo 3-2007 36 411 0.1% 481 436 10.1% 5.4% 100.0%C-70 RESIDIAIkebukuroWest Itabshi-ku,Tokyo 10-2007 72 1,115 0.3% 1,310 1,136 15.2% 3.0% 89.4%C-71 RESIDIAOjima Koto-ku,Tokyo 11-2007 87 1,282 0.3% 1,500 1,306 14.8% 6.1% 98.9%C-72 RESIDIAMachiya Arakawa-ku,Tokyo 8-2009 55 1,168 0.3% 1,260 1,206 4.4% 3.2% 98.1%C-73 RESIDIAUeno-Ikenohata Taito-ku,Tokyo 2-2004 71 1,700 0.4% 1,860 1,800 3.3% 3.8% 98.3%C-74 RESIDIANerima Nerima-ku,Tokyo 3-2005 34 502 0.1% 610 523 16.5% 3.9% 100.0%C-75 RESIDIAHigashi-Nihonbashi Chuo-ku,Tokyo 4-2006 22 378 0.1% 456 404 12.7% 5.8% 100.0%C-76 RESIDIANakano Nakano-ku,Tokyo 11-2006 30 652 0.2% 743 699 6.2% 4.1% 100.0%C-77 RESIDIAOgikuboII Suginami-ku,Tokyo 3-2007 36 460 0.1% 542 497 8.9% 5.1% 100.0%C-78 RESIDIAMinamiyukigaya Ota-ku,Tokyo 3-2008 58 1,299 0.3% 1,500 1,379 8.7% 4.4% 93.6%C-79 RESIDIAAkihabara Taito-ku,Tokyo 4-2007 40 977 0.2% 1,130 1,014 11.3% 5.1% 94.8%C-80 RESIDIAAsakusa-Azumabashi Sumida-ku,Tokyo 9-2007 60 876 0.2% 1,070 913 17.1% 3.5% 96.7%C-81 RESIDIAOomoriIII Ota-ku,Tokyo 12-2012 65 1,395 0.3% 1,560 1,441 8.2% 3.1% 88.1%C-82 RESIDIANihonbashi-BakurochoII Chuo-ku,Tokyo 4-2014 77 1,975 0.5% 2,260 2,043 10.6% 3.8% 98.3%C-83 RESIDIANihonbashi-BakurochoIII Chuo-ku,Tokyo 3-2008 55 1,833 0.4% 2,110 1,902 10.9% 3.7% 100.0%S-2 ChesterHouseKawaguchi Kawaguchi,Saitama 3-1991 39 770 0.2% 734 722 1.6% 5.5% 92.3%S-4 RESIDIAHigashi-Matsudo Matsudo,Chiba 4-2007 44 1,100 0.3% 1,180 1,054 11.9% 4.6% 97.7%S-5 RESIDIAShin-Yokohama Yokohama,Kanagawa 1-2007 131 1,920 0.5% 1,940 1,808 7.3% 5.6% 100.0%S-7 RESIDIAChofu Chofu,Tokyo 3-2007 41 1,143 0.3% 1,170 1,093 7.0% 5.0% 97.5%S-11 TOKYOStudent-HouseWako Wako,Saitama 4-1990 127 675 0.2% 731 695 5.1% 10.2% 100.0%S-12 RESIDIAKokubunji Kokubunji,Tokyo 2-2003 33 518 0.1% 572 515 10.9% 2.9% 97.0%S-14 RESIDIAYokohama-Kannai Yokohama,Kanagawa 8-2004 102 1,700 0.4% 1,770 1,562 13.3% 8.4% 95.6%S-15 RESIDIAOkurayama Yokohama,Kanagawa 3-1998 64 755 0.2% 878 730 20.2% 5.3% 100.0%S-16 RESIDIAMusashikosugi Kawasaki,Kanagawa 2-2007 68 1,580 0.4% 1,790 1,511 18.4% 7.2% 97.8%

S-17 RESIDIAFunabashiIandII Funabashi,Chiba 3-2007 172 2,730 0.6% 2,940 2,582 13.9% I3.6%Ⅱ3.4% 100.0%

S-19 RESIDIAKichijoji Musashino,Tokyo 3-1995 48 1,380 0.3% 1,550 1,431 8.3% 9.1% 98.0%

S-20 PacificRoyalCourtMinatoMiraiOceanTower Yokohama,Kanagawa 11-2007 416 14,000 3.3% 15,900 12,301 29.3% 4.5% 100.0%

S-21 MaisonYachiyodai Yachiyo,Chiba 8-1989 39 882 0.2% 822 821 0.1% 5.4% 100.0%S-22 Life&SeniorHouseKohokuII Yokohama,Kanagawa 10-2003 78 1,670 0.4% 2,200 1,574 39.7% 6.4% 100.0%S-23 CollegeCourtTanashi Nishi-Tokyo,Tokyo 2-2010 91 810 0.2% 1,090 786 38.5% 7.7% 100.0%S-24 RESIDIAUrayasu Urayasu,Chiba 9-2009 146 2,115 0.5% 2,750 2,126 29.3% 6.7% 95.5%S-25 RESIDIAMinami-Gyotoku Ichikawa,Chiba 2-2005 85 823 0.2% 1,040 840 23.7% 6.6% 96.5%S-26 RESIDIAUrayasuII Urayasu,Chiba 2-2005 74 802 0.2% 1,010 821 23.0% 7.5% 93.2%S-27 RESIDIAGyotoku Ichikawa,Chiba 2-2005 75 761 0.2% 958 776 23.3% 6.1% 97.3%S-28 RESIDIAKawasaki Kawasaki,Kanagawa 3-2007 104 1,670 0.4% 2,150 1,665 29.1% 4.7% 91.1%S-29 CocofumpHiyoshi Yokohama,Kanagawa 1-2010 85 1,050 0.2% 1,190 1,045 13.9% 7.5% 100.0%S-30 RESIDIASagamihara Sagamihara,Kanagawa 3-2005 111 1,050 0.2% 1,210 1,104 9.5% 6.8% 100.0%S-31 RESIDIAYokohama-Bashamichi Yokohama,Kanagawa 5-2004 28 735 0.2% 1,040 785 32.3% 11.5% 94.5%S-32 RESIDIAHon-Atugi Atugi,Kanagawa 1-2008 49 606 0.1% 683 660 3.4% 11.0% 96.2%

（asofJanuary31,2016）



Portfolio

PortfolioafterIncludingthePropertyAcquiredAftertheFP01-2016End

AreaAreaNo.of

PropertiesRentableUnits

AcquisitionPrice

(milyen)

ShareofInvestment

(%)AppraisalPrice

(milyen)BookValue(milyen)

UnrealizedProfitandLoss

(%)P TokyoCentral7Wards 86 5,323 169,113 39.7% 189,263 163,655 15.6%C CentralTokyoex7wards 79 6,237 133,469 31.3% 158,394 129,983 21.9%S TokyoMetropolitan 24 2,250 41,246 9.7% 47,298 39,020 21.2%R MajorRegionalCities 62 6,421 82,024 19.3% 98,290 80,534 22.0%

TotalTotal 251 20,231 425,854 100.0% 493,245 413,193 19.4%

AreaArea No.ofProperties RentableUnits AcquisitionPrice(milyen)

ShareofInvestment(%)

P TokyoCentral7Wards 88 5,395 170,851 39.4%C CentralTokyoex7wards 81 6,385 139,774 32.2%S TokyoMetropolitan 24 2,250 41,246 9.5%R MajorRegionalCities 62 6,421 82,024 18.9%

TotalTotal 255 20,451 433,897 100.0%

No. PropertyName LocationCompletion

DateRentableUnits

AcquisitionPrice(milyen)

AppraisalPrice(milyen)

P-108 RESIDIANakanobuII Shinagawa-ku,Tokyo 4-2014 44 917 980P-109 RESIDIAOchanomizuII Chiyoda-ku,Tokyo 3-2015 28 821 885C-84 RESIDIABunkyo-HongoIII Bunkyo-ku,Tokyo 7-2014 48 1,655 1,740C-85 RESIDIAShin-OkachimachiII Taito-ku,Tokyo 3-2015 100 4,650 4,980

220 8,043 8,585

（asofApril.14,2016）

50


RentableUnits

AcquisitionPrice

(milyen)

ShareofInvestment

(%)

AppraisalPrice

(milyen)BookValue(milyen)



R-2 RESIDIAImadegawa Kyoto,Kyoto 2-1999 154 1,671 0.4% 1,690 1,523 10.9% 10.9% 100.0%R-4 RESIDIAHigashi-Sakura Nagoya,Aichi 2-2006 91 1,290 0.3% 1,390 1,085 28.0% 3.4% 89.9%R-5 RESIDIAKameyama Kameyama,Mie 2-2007 182 1,610 0.4% 1,190 1,559 -23.7% 4.2% 97.1%R-6 RESIDIARyokuchiKoen Toyonaka,Osaka 5-2007 44 979 0.2% 963 913 5.5% 5.7% 86.0%

R-8 RESIDIAKobePortIsland Kobe,Hyogo 9-2007 404 3,740 0.9% 4,070 3,523 15.5%South&Center

6.8%North6.7%

100.0%

R-10 RESIDIAHakata Fukuoka,Fukuoka 3-2002 155 1,220 0.3% 1,340 1,159 15.5% 3.4% 98.8%R-11 RESIDIATenjinbashi Osaka,Osaka 2-2000 78 871 0.2% 1,060 869 21.8% 8.3% 96.3%R-12 RESIDIASannomiya-Higashi Kobe,Hyogo 11-2005 161 2,220 0.5% 2,710 2,018 34.3% 3.2% 98.4%R-13 KC21Building Sendai,Miyagi 3-1997 79 900 0.2% 1,010 897 12.5% 2.4% 91.8%R-14 RESIDIAUtubokoen Osaka,Osaka 1-2006 94 1,170 0.3% 1,420 1,078 31.6% 6.6% 100.0%R-15 RESIDIAKyoto-ekimae Kyoto,Kyoto 2-2006 116 1,970 0.5% 2,310 1,826 26.5% 9.9% 99.4%R-16 RESIDIATakaoka Nagoya,Aichi 8-2007 198 2,330 0.5% 3,020 2,185 38.2% 3.5% 98.0%R-17 RESIDIAHibino Nagoya,Aichi 4-1992 124 1,340 0.3% 1,470 1,190 23.5% 3.9% 98.4%R-19 RESIDIATenjin-Minami Fukuoka,Fukuoka 1-2004 56 936 0.2% 1,110 859 29.2% 4.9% 94.6%R-20 RESIDIAHakataeki-Minami Fukuoka,Fukuoka 1-2003 39 324 0.1% 375 291 28.8% 2.7% 92.6%R-21 RESIDIAHisaya-OdoriII Nagoya,Aichi 2-2005 38 685 0.2% 781 622 25.4% 5.0% 94.8%R-24 RESIDIAMinami-Ichijo Sapporo,Hokkaido 12-2006 179 1,640 0.4% 1,890 1,506 25.4% 0.9% 98.4%R-25 RESIDIAOdori-Nishi Sapporo,Hokkaido 12-2006 103 1,320 0.3% 1,370 1,234 11.0% 1.1% 100.0%R-26 RESIDIAKita-Sanjo Sapporo,Hokkaido 1-2007 100 1,130 0.3% 1,300 1,033 25.8% 1.4% 100.0%R-27 RESIDIAShirakabe-Higashi Nagoya,Aichi 5-2005 33 831 0.2% 857 775 10.4% 4.1% 97.2%R-29 RESIDIAUzumasa Kyoto,Kyoto 1-2000 48 701 0.2% 722 661 9.1% 13.5% 94.0%R-30 RESIDIAIzumi Nagoya,Aichi 11-2005 122 3,700 0.9% 4,120 3,424 20.3% 3.1% 93.4%R-31 RESIDIAMaruyamaKita-Gojo Sapporo,Hokkaido 2-2007 56 1,050 0.2% 1,160 978 18.5% 1.2% 91.3%R-32 RESIDIATokugawa Nagoya,Aichi 12-2006 27 751 0.2% 835 706 18.2% 3.9% 92.6%R-34 RESIDIAOdori-Koen Sapporo,Hokkaido 8-2007 109 2,010 0.5% 2,450 1,874 30.7% 0.9% 96.9%R-35 RESIDIATanimachi Osaka,Osaka 8-2008 108 1,100 0.3% 1,520 1,128 34.6% 7.5% 90.3%R-36 RESIDIAHisaya-Odori Nagoya,Aichi 2-2007 57 652 0.2% 885 649 36.3% 4.8% 90.9%R-37 RESIDIASendai-Miyamachi Sendai,Miyagi 1-2008 67 529 0.1% 715 523 36.7% 2.5% 100.0%R-38 RESIDIAHirosedori Sendai,Miyagi 2-2010 63 494 0.1% 630 490 28.4% 2.8% 100.0%R-39 RESIDIAEdobori Osaka,Osaka 2-2007 127 1,400 0.3% 1,840 1,434 28.2% 8.7% 95.4%R-40 RESIDIAKyomachibori Osaka,Osaka 3-2007 84 1,000 0.2% 1,340 1,030 30.0% 7.8% 97.8%R-41 RESIDIAEsaka Suita,Osaka 7-2007 68 989 0.2% 1,290 990 30.3% 4.8% 93.0%R-42 RESIDIANishijin Fukuoka,Fukuoka 1-2008 173 2,380 0.6% 2,950 2,349 25.5% 2.6% 96.3%R-43 RESIDIATsurumai Nagoya,Aichi 2-2008 122 1,206 0.3% 1,620 1,194 35.6% 3.6% 96.9%R-44 RESIDIAKobe-Isogami Kobe,Hyogo 3-2008 196 2,740 0.6% 3,710 2,704 37.2% 3.6% 97.7%R-45 RESIDIAKita-Nijyo-East Sapporo,Hokkaido 3-2006 56 894 0.2% 1,070 897 19.2% 1.1% 98.3%R-46 RESIDIAShinsaibashiWest Osaka,Osaka 2-2007 97 1,921 0.5% 2,320 1,931 20.1% 9.1% 97.0%R-47 RESIDIAMarunouchi Nagoya,Aichi 1-2007 86 972 0.2% 1,170 979 19.5% 2.8% 93.1%R-48 RESIDIASapporo-Ekimae Sapporo,Hokkaido 2-2007 168 1,483 0.3% 2,010 1,490 34.8% 0.7% 97.1%R-49 RESIDIAGosyo-Higashi Kyoto,Kyoto 9-2007 57 1,227 0.3% 1,530 1,235 23.8% 8.9% 96.1%R-50 RESIDIARakuhoku Kyoto,Kyoto 3-2008 75 874 0.2% 1,010 881 14.6% 12.4% 93.0%R-51 RESIDIAMiyakojimaI&II Osaka,Osaka 9-2006 178 3,232 0.8% 4,430 3,333 32.9% 7.1% 97.7%R-52 RESIDIATOWERSendai Sendai,Miyagi 1-2008 67 1,705 0.4% 1,990 1,780 11.7% 2.3% 97.0%R-53 RESIDIAHigashizakuraII Nagoya,Aichi 2-2006 127 2,862 0.7% 3,550 2,914 21.8% 3.1% 93.5%

R-54 RESIDIATsutsujigaoka Sendai,Miyagi 11-2006 168 1,796 0.4% 2,290 1,828 25.2% EAST2.6%WEST2.7% 98.1%

R-55 RESIDIAKobe-Motomachi Kobe,Hyogo 1-2007 85 1,052 0.2% 1,340 1,073 24.8% 5.8% 97.8%


RentableUnits

AcquisitionPrice

(milyen)

ShareofInvestment

(%)

AppraisalPrice

(milyen)

BookValue(milyen)



R-56 RESIDIASendai-Honcho Sendai,Miyagi 6-2007 105 1,117 0.3% 1,580 1,139 38.7% 2.3% 100.0%R-57 RESIDIASendai-Haranomachi Sendai,Miyagi 9-2007 72 593 0.1% 854 606 40.8% 2.1% 100.0%R-58 RESIDIAMinami-IchijoEast Sapporo,Hokkaido 1-2008 85 1,062 0.2% 1,310 1,088 20.3% 1.1% 100.0%R-59 RESIDIAShin-Osaka Osaka,Osaka 2-2014 208 2,644 0.6% 3,290 2,829 16.3% 6.2% 100.0%R-60 RESIDIAOkayama-ekimae Okayama,Okayama 3-2004 108 772 0.2% 929 813 14.2% 1.7% 100.0%R-61 RESIDIAKyoto-Okazaki Kyoto,Kyoto 3-2005 23 227 0.1% 295 240 22.7% 14.1% 100.0%R-62 RESIDIASendai-Ichibancho Sendai,Miyagi 3-2006 103 1,083 0.3% 1,310 1,132 15.7% 2.4% 100.0%R-63 RESIDIAKita-NijyoEastII Sapporo,Hokkaido 2-2007 51 538 0.1% 688 572 20.2% 1.2% 100.0%R-64 RESIDIATakamiya Fukuoka,Fukuoka 2-2007 51 488 0.1% 548 511 7.2% 6.1% 97.7%R-65 RESIDIASoen Sapporo,Hokkaido 2-2007 60 384 0.1% 506 411 23.0% 1.4% 100.0%R-66 RESIDIATenjin Fukuoka,Fukuoka 5-2007 88 1,122 0.3% 1,290 1,166 10.6% 3.4% 93.2%R-67 RESIDIAYakuin-Odori Fukuoka,Fukuoka 6-2007 91 1,123 0.3% 1,310 1,162 12.7% 4.5% 97.8%R-68 RESIDIAHakataII Fukuoka,Fukuoka 9-2007 124 1,358 0.3% 1,520 1,408 7.9% 1.8% 93.8%R-69 RESIDIAKego Fukuoka,Fukuoka 1-2008 86 834 0.2% 1,030 879 17.2% 2.3% 90.2%R-70 RESIDIAShirakabe Nagoya,Aichi 3-2008 70 907 0.2% 1,050 975 7.7% 4.4% 86.9%R-71 RESIDIASakae Nagoya,Aichi 12-2007 77 868 0.2% 957 948 0.9% 4.2% 92.2%

Total251propertiesTotal251properties 　　 20,231 425,854 100.0% 493,245 413,193 19.4% 2.4% 96.7%

（asofJanuary31,2016）

General Meeting of Unitholders

Board of Directors

Representative Director and President

Statutory Corporate Auditor

Investment Commitee

Internal Auditor

Compliance Commitee

Compliance and Risk Management Department

Administrations Division

Investment and Asset Management Division

Asset Management Department

Engineering Department

Corporate Management Department

Accounting Department

Compliance Officer

Financial Department

Investment Department



AssetManagementCompanyProfile

ADInvestmentManagementCo.,Ltd.　 http://www.adim.co.jp/AdvanceResidenceInvestmentCorporation http://www.adr-reit.com/en/

Organizational Chart

CompanyProfileName: ADInvestmentManagementCo.,Ltd.Address: 17FJimbochoMitsuiBldg.,1-105Kanda-Jimbocho,Chiyoda-ku,TokyoCompanyRepresentative: KenjiKousaka,RepresentativeDirectorandPresidentAmountofCapital: 300millionyenTypeofBusiness: AssetManagement

History: March1,2010 MergeswithPacificResidentialCorporation May17,2005 CompanynameischangedtoADInvestmentManagementCo.,Ltd.

February2,2005 EstablishedasJapanResidentialManagementCo.,Ltd.

RegistrationsandLicenses: Realestateagent'slicense(TheGovernorofTokyo(2)No.84325) Approvalforadiscretionarytransactionagent(MinisterofLand,Infrastructure,TransportandTourismApproval,No.37) Registeredforafinancialinstrumentsbusiness(KantoLocalFinanceBureauregistrationNo.309)

RegisteredasFirst-Class-ArchitectOffice(TheGovernorofTokyoNo.58856)

1

1

74 8161014

2

30incl.theDivisionHead 32incl.theDivisionHead

Total68excludingoutsidedirectors

Thenumberdenotesthenumberofpeopleworkingin

thesectionordivision

1

1

asofJanuary31,2016

asofJanuary31,2016

51

ImperialEastGarden

JimbochoStationToeiShinjukuLine

YasukuniDori

HakusanDori

ToeiMitaLine

MetropolitanHighway

TakebashiStation

TokyoParkTower

HitotsubashiSIBldg.

JapanMeteorological

Agency

MarubeniTokyoHeadquarterBldg.

TokyoMetroHanzom

onLine

UchiboriDori

TokyoMetroTozaiLine

KyoritsuWomen’sUniversity

Kowa

Hitotsubashi

Bldg.

KandaPoliceStation

JimbochoTaxOffice

GakushiKaikan

TerraceSquare

Nishikicho

TradSquare

JimbochoMitsuiBldg.

Fees FeeBase MaximumFeeRate

AMFeeI TotalAsset(Previousfiscalend) ×0.20%

AMFeeII NOI*1 ×3.00%

AMFeeIII (AMFeesI+II)×AdjustedEPU*2 ×0.008%

AcquisitionFee AcquisitionPrice ×1.00%

DispositionFee DispositionPrice ×0.50%

MergerFee AcquiredAssetValue ×0.50%



AssetManagementFeeStructureAnAssetManagementFeeStructureMoreInlinewithUnitholders’Interest

※1NOI=GrossOperatingIncomeminusGrossOperatingExpense(excludingdepreciationandlossfromfixedassetretirement.)※2AdjustedEPU=NetIncomeexcludingAMFeeIIIdividedbynumberofoutstandingassetatthefiscalperiodend.

IntroducinganAssetManagementFeethatisCoupledtoNOI*1andAdjustedEPU*2

52

moreinlinewithunitholders’interest

FeeLinkedtoNOI*1FeeLinkedtoTotalAssetSize FeeLinkedAdjustedEPU*2AMFeeI AMFeeIIIAMFeeII

(Previousfiscalend)



SponsorSupport

SupportfromITOCHUGroup

ShareholdersoftheADInvestmentManagementCo.,Ltd.

Being a member of a major conglomeratetrading house, the ITOCHU Group, ADInvestmentManagementCo.,Ltd.,theassetmanagement company, utilizes the supportof ITOCHUGroupto maximize theasset ofAdvance Residence through external andinternalgrowth.

ADInvestmentManagementCo.,Ltd.is100%heldbyITOCHUGroup.

AD Investment Management Co., Ltd

InternalGrowth

ExternalGrowth


SupplyofProperty,MarketInformation,andProperty

Warehousing

ITOCHUCorporation

ITOCHUPropertyDevelopment

Propertymanagement,BuildingManagement&

Leasing

Century21RealEstateofJapan

ITOCHUUrbanCommunity

Asset Management

ITOCHUCorporation ITOCHUPropertyDevelopment

Shareholding　80.6%

53

Shareholding　19.4%



JapaneseRealEstateLeasingContractPractices

InitialFeesandPayments

FeesandPaymentsatRenewal

PaymentsatTermination

KeyMoney Non-refundablepaymentwhichissometimescalled“thankyou”money.

generallyone-month’srent

Deposit Refundablepaymentwhichwillbeusedtocoverdelinquencyandrestorationcost.

generallyone-totwo-month’srent

Rent Paidmonthlyinadvance.Initialmaximumpaymentwillbeone-month’sand30days’rent. one-month’srent

RenewalFee Non-refundablefeetobepaidwhentenantsrenewtheleasecontracts.


AgentFeeNon-refundablefeetobepaidtotherealestateagent.

Industrystandardone-month’srent

Deposit Depositsarerefundedminusrestoration. generallyone-totwo-month’srent

AdvertisementFee

Feetobepaidtotherealestateagent.


ForRent

Real Estate Agent

Tenants

AdministrationFee

Feetobepaidtothepropertymanager.


• StandardleasetermsinJapanaremostlytwoyears.• Tenantsareabletoleavetheleasedspacebeforecontractexpirationwithoutpayingfortheremainingcontractperiod.• Japan’sLeaseLandandHouseLawmakesraisingrentsofexistingcontractsalmostimpossible.

Property Manager

54

A

dvan

ce

Inve

stm

ent C

orpo

ratio

nR

esid

ence



Note

55

Advance Residence Investment Corporation20140619

Thismaterialcontainforward-lookingstatementsonfutureoperatingresults,plans,businessobjectivesandstrategiesofthecompany.

Forward-lookingstatementsprovidecurrentexpectationsoffutureeventsbasedonnumberofassumptionsandincludestatementsthatdonotdirectlyrelatetoanyhistoricalorcurrentfacts.Forward-lookingstatementsarenotguaranteesoffutureperformanceandtheCompany'sactualresultsmaydiffersignificantlyfromtheresultsdiscussedintheforward-lookingstatements.

ThismaterialisbasedonJapaneseGAAPunlessotherwisestated.

Thismaterialwasnotcreatedforthepurposeofsolicitinginvestmentinthecompany.Investmentsshouldbebasedonyourownjudgmentandresponsibility.

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