22
nd
Fiscal Period Business Report
(Statement of Financial Performance)
June 1, 2016 – November 30, 2016
6-2-1 Ginza, Chuo Ward, Tokyo http://www.daiwa-of_ce.co.jp/en/
I. Overview of Daiwa Office Investment Corporation
To Our Investors
We would like to express our deep gratitude to all our unitholders for your support of Daiwa Office Investment Corporation (DOI).
In the 22nd Fiscal Period, DOI posted operating revenues of 12,853 million yen and operating income of 6,143 million yen. Our
distribution per unit for the 22nd Fiscal Period is 10,695 yen, an increase by 187 yen from the 21st Fiscal Period
See page 4 for financial and management highlights
Average contract rent at the end of the 22nd Fiscal Period increased 114 yen from the end of the previous fiscal period to 19,219
yen, indicating an increase for the fourth consecutive fiscal period. Rent revisions contributed to 8.7 million yen increase in
monthly contracted rents from the end of the previous fiscal period, which was a 6.1% rate of increase for average monthly rent.
Furthermore, the rate of increase for average monthly rent stood at 7.2% due to replacement of tenants, and the occupancy rate was
97.7%. We will realize sustainable internal growth through the thorough implementation of the hands-on approach that continuously
applies “Bonji-Tettei” as the code of conduct.
See page 8 for details of internal growth
During the 22nd Fiscal Period, DOI acquired Heiwa Higashi-nihonbashi Building on June 1, 2016, Square Daikanyama Building
on June 29, 2016, Shinjuku West Building and Ogikubo TM Building on July 21, 2016 (total acquisition price: 13,392 million
yen) using funds obtained through the public offering announced in July 2016. DOI will continue
to selectively acquire office properties centering on the five central wards of Tokyo in an effort
to further improve the value of its portfolio.
See page 12 for details of external growth
In financial matters, DOI promoted diversification of repayment dates by taking out long-term
borrowings. DOI will continue striving to further strengthen financial structure while working to
reduce future refinancing risks.
See page 15 for details of financial conditions
DOI will continue to increase the competitiveness of its properties and aim to achieve
its medium- to long-term goal of continuous growth through the utilization of
investment capacity from capital increase, etc., while increasing long-term EPS (net
income after deducting gain on sales of properties). We wish for the continued
success of our unitholders and ask for your continued support of DOI.
Yoshimi Murakami
Executive Director of Daiwa Office Investment Corporation
Table of Contents
I. Overview of Daiwa Office Investment Corporation
To Our Investors……………………………………………… 2
II. Asset Management Report…………………………… 17
III. Balance Sheets… ……………………………………… 22
Characteristics and Strategies of
Daiwa Office Investment Corporation ………………………… 3
Financial and Management Highlights………………………… 4
IV. Statements of Income and Retained Earnings…… 24
V. Statements of Changes in Net Assets……………… 25
Overview of Portfolio (portfolio list)…………………………… 5
Overview of Portfolio (portfolio distribution)…………………… 6
Internal Growth Measures… ………………………………… 8
External Growth Measures…………………………………… 12
Financial Conditions… ……………………………………… 15
Description of Asset Manager………………………………… 16
2
VI. Statements of Cash Flows… ………………………… 26
VII. Notes to Financial Statements……………………… 27
VIII. Independent Auditor’s Report… …………………… 41
IX. Investor Information… ………………………………… 42
Characteristics and Strategies of Daiwa Office Investment Corporation
Characteristics of Daiwa Office Investment Corporation
Office Specialized
REIT
REIT Focused on the Five
Central Wards of Tokyo
Effective application of operational knowhow specialized in office
buildings
Places priority on owning office buildings in favorable locations for
which there is high demand
Office buildings 100.0%
Major Regional Cities 3.1%
Greater Tokyo
Five Central
Wards of Tokyo
88.6%
8.3%
Based on acquisition price
(Note) Please note that the percentages in the above graphs are as of December 21, 2016.
Growth Strategies
Activities for solid growth
・Continue acquiring
properties
Achievement of a 500 billion yen asset size
・Leverage borrowing
capacity
Keep the medium-to-long term, upper-limit
LTV target range within 40%~50%
(billion yen)
500
400
Investment in
selectively-chosen
competitive properties
364.0
387.5
413.2
445.7
500.0
467.7
458.3
300
Establishment of stable revenue base
・Property management
activities
Continuation of “Bonji-Tettei”
Thorough implementation of hands-on
approach
Further strengthen relations with tenants
・Maintain and
improve property
value
Capture tenant needs by reinforcing ties with
property managers
Strategic renewals and lease-up activities
・Financial activities
Reduce refinancing risk by extending
borrowing periods and diversifying
repayment dates
Distribution per Unit
200
100
0
Fiscal period Fiscal period Fiscal period Fiscal period Fiscal period Fiscal period Medium-term
ended
ended
ended
ended
ended
ended
goal
May 2014 November 2014 May 2015 November 2015 May 2016 November 2016
Fiscal period ended November 2016
(22nd Fiscal Period)
Fiscal period ending May 2017
(Note) The forecasts on distribution are calculated based
(23rd Fiscal Period)
on certain assumptions and may vary due to
changes in the status and other factors. Moreover,
the forecasts set forth herein should not be
construed as a guarantee of distribution amounts.
Fiscal period ending November 2017
(24th Fiscal Period)
10,695 yen
10,700 yen
10,710 yen
(actual)
(forecast)
(forecast)
I. Overview of Daiwa Office Investment Corporation
3
Financial and Management Highlights
Steady increase of distributions due to progress in internal growth
■ Operating Revenues
■ Operating Income
(million yen)
13,000
(million yen)
7,000
11,837
10,000
9,763
■ Net Income
(million yen)
6,000
12,853
12,363
10,387
6,108
5,614
5,000
7,000
5,250
6,143
4,770
4,438
3,641
3,000
5,324
4,688
4,000
4,031
2,000
4,000
0
0
0
18th Period 19th Period 20th Period 21st Period 22nd Period
18th Period 19th Period 20th Period 21st Period 22nd Period
18th Period 19th Period 20th Period 21st Period 22nd Period
■ Changes in Rental Revenues
(million yen)
11,000
External growth (acquisition/full contribution from properties sold) (Note 1)
10,000
9,000
External growth
(acquisition/during-the-period contribution from properties sold) (Note 2)
267
Internal growth (increase/decrease of rents of existing properties)
839
176
349
8,000
261
7,000
511
6
115
227
27
229
117
154
282
148
215
64
–55
6,000
0
17th Period
18th Period
19th Period
20th Period
21st Period
22nd Period
■ Distribution per Unit
(yen)
12,000
Forecast from one year earlier
10,000
8,000
6,000
Forecast from six months earlier
5,500
6,250
6,542
5,350
5,500
5,986
Actual dividends
6,550
7,200
7,478
7,300
7,540
7,621
16th Period
17th Period
8,328
8,700
9,142
7,570
7,820
8,256
(Note 1) Amount obtained by subtracting rents and
common area fees income in the previous
fiscal period of properties sold in the
previous fiscal period from the amount of
rents and common area fees income
increased compared to the previous period
due to full year contribution from properties
acquired in the previous fiscal period.
(Note 2) Amount obtained by subtracting rents and
common area fees income decreased in
the current fiscal period due to sales of
properties in the current fiscal period from
the amount of rents and common area fees
income increased in the current fiscal
period due to acquisition of properties in
the current fiscal period.
9,900
10,550
10,695
9,750
9,850
10,508
9,000
9,350
9,688
10,560
10,700
10,710
4,000
2,000
0
14th Period
15th Period
Operating revenues (million yen)
18th Period
19th Period
20th Period
21st Period
22nd Period
23rd Period 24th Period
22nd Period
21st Period
20th Period
19th Period
18th Period
(November 2016)
(May 2016)
(November 2015)
(May 2015)
(November 2014)
12,853
12,363
11,837
10,387
9,763
Operating income (million yen)
6,143
6,108
5,614
4,770
4,438
Ordinary income (million yen)
5,325
5,326
4,689
4,032
3,642
Net income (million yen)
5,324
5,250
4,688
4,031
3,641
Total number of units issued (units)
497,869
484,000
484,000
441,000
441,000
Net assets per unit (yen)
515,230
511,818
511,777
505,566
504,746
Distribution per unit (yen)
10,695
10,508
9,688
9,142
8,256
483,450
476,690
460,705
432,232
399,555
42.3
43.3
41.7
44.3
40.2
53
50
50
47
46
467.7
458.3
445.7
413.2
387.5
336,722.04
328,027.44
325,313.01
288,833.07
286,088.89
97.7
98.7
98.3
97.3
97.2
Total assets (million yen)
Loan-to-value (LTV) (based on total asset value) (%)
Number of investment properties
Asset size (billion yen)
Total rentable area (m2)
Occupancy rate (%)
(Note) Distribution per unit for the 22nd fiscal period is calculated by dividing the amount obtained by subtracting provision for reserve for reduction entry (164 million yen) from unappropriated retained earnings by the
total number of investment units issued.
4
Overview of Portfolio (portfolio list)
(as of December 21, 2016)
Property Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
Address
Five Central Wards of Tokyo (Note 1)
Daiwa Ginza
Ginza, Chuo-ku, Tokyo
Daiwa Ginza Annex
Ginza, Chuo-ku, Tokyo
Daiwa Shibaura
Shibaura, Minato-ku, Tokyo
Daiwa Minami-Aoyama
Minami Aoyama, Minato-ku, Tokyo
Daiwa Sarugakucho
Sarugakucho, Chiyoda-ku, Tokyo
Daiwa A Hamamatsucho
Hamamatsucho, Minato-ku, Tokyo
Daiwa Jingumae
Jingumae, Shibuya-ku, Tokyo
Daiwa Shibadaimon
Shibadaimon, Minato-ku, Tokyo
Daiwa Misakicho
Misakicho, Chiyoda-ku, Tokyo
Daiwa Shimbashi 510
Shinbashi, Minato-ku, Tokyo
Daiwa Tsukijiekimae
Tsukiji, Chuo-ku, Tokyo
Daiwa Tsukiji
Tsukiji, Chuo-ku, Tokyo
Daiwa Tsukishima
Tsukishima, Chuo-ku, Tokyo
Daiwa Nihonbashi Horidomecho Nihombashi-Horidomecho, Chuo-ku, Tokyo
Daiwa Azabudai
Azabudai, Minato-ku, Tokyo
Daiwa Kyobashi
Hatchobori, Chuo-ku, Tokyo
Daiwa Kojimachi 4-chome
Kojimachi, Chiyoda-ku, Tokyo
Daiwa Onarimon
Shinbashi, Minato-ku, Tokyo
Shinjuku Maynds Tower (Note 5)
Yoyogi, Shibuya-ku, Tokyo
SHIBUYA EDGE
Udagawacho, Shibuya-ku, Tokyo
Daiwa Kodenmacho
Nihombashi-Odenmacho, Chuo-ku, Tokyo
Daiwa Jimbocho
Kanda-Jimbocho, Chiyoda-ku, Tokyo
Daiwa Nishi-Shimbashi
Nishi-Shimbashi, Minato-ku, Tokyo
Daiwa Kayabacho Building
Nihombashi-Kayabacho, Chuo-ku, Tokyo
Daiwa Jinbocho 3-chome
Kanda-Jimbocho, Chiyoda-ku, Tokyo
E SPACE TOWER
Maruyamacho, Shibuya-ku, Tokyo
Daiwa Nihonbashi Hongokucho
Nihombashi Hongokucho, Chuo-ku, Tokyo
shinyon curumu
Shinjuku, Shinjuku-ku, Tokyo
Daiwa Akasaka
Akasaka, Minato-ku, Tokyo
Daiwa Shibuya Miyamasuzaka
Shibuya, Shibuya-ku, Tokyo
Azabu Green Terrace
Minami Azabu, Minato-ku, Tokyo
Daiwa Ebisu 4-chome
Ebisu, Shibuya-ku, Tokyo
LAQUAS Higashi Shinjuku
Okubo, Shinjuku-ku, Tokyo
Concept Aoyama
Jingumae, Shibuya-ku, Tokyo
Shinsen Place
Shinsen-cho, Shibuya-ku, Tokyo
Glass City Shibuya
Nanpeidaicho, Shibuya-ku, Tokyo
River Gate
Nihonbashi Hakozakicho, Chuo-ku, Tokyo
Daiwa Hatchobori ekimae
Hatchobori, Chuo-ku, Tokyo
Daiwa Hatchobori ekimae West
Hatchobori, Chuo-ku, Tokyo
Nikko Building
Nishishinjuku, Shinjuku-ku, Tokyo
Kirin Nihonbashi Building
Nihonbashi Koami-cho, Chuo-ku, Tokyo
Heiwa Higashi-nihonbashi Building Higashi Nihonbashi, Chuo-ku, Tokyo
Square Daikanyama Building
Daikanyamacho, Shibuya-ku, Tokyo
Shinjuku West Building
Nishishinjuku, Shinjuku-ku, Tokyo
Shin Kanda Mikuracho Building
Kanda Mikura-cho, Chiyoda-ku, Tokyo
Subtotal
Greater Tokyo Area (Note 1)
Daiwa Higashi-Ikebukuro
Higashi-Ikebukuro, Toshima-ku, Tokyo
Daiwa Shinagawa North
Kita-Shinagawa, Shinagawa-ku, Tokyo
Daiwa Osaki 3-chome
Osaki, Shinagawa-ku, Tokyo
Daiwa Kamiooka
Kamiooka Nishi, Konan-ku, Yokohama City, Kanagawa
Integral Tower
Kamiogi, Suginami-ku, Tokyo
Meguro Place Tower
Meguro, Meguro-ku, Tokyo
Ogikubo TM Building
Ogikubo, Suginami-ku, Tokyo
Subtotal
Major Regional Cities (Note 1)
Daiwa Meieki
Meieki-Minami, Nakamura-ku, Nagoya City, Aichi
Kitahama Grand Building
Awaji-cho, Chuo-ku, Osaka City, Osaka
Subtotal
Total
Acquisition
Appraisal
Execution
Rentable Structure and
Price
Value at End
Area (m2) No. of Floors Completion of Major
of Period
Share
(Note 2)
(Note 3)
Repairs mm yen
(%) (mm yen) (Note 4)
8,179.62
2,032.11
9,619.67
2,715.54
3,657.43
3,663.38
2,198.61
2,386.48
2,137.53
2,641.56
2,659.59
1,487.44
8,426.28
2,850.81
1,697.88
3,265.83
2,690.90
11,614.92
45,543.97
2,480.65
2,379.31
3,164.26
4,815.84
5,899.11
2,889.34
13,960.87
2,143.08
6,751.31
8,739.17
6,327.95
13,234.39
2,885.64
7,498.33
4,421.15
2,811.35
8,566.73
32,063.06
2,622.42
1,723.15
6,967.61
5,630.17
5,015.88
1,588.35
1,120.58
1,732.42
276,901.67
SRC B3/12F
SRC B3/8F
SRC B1/12F
S SRC B2/5F
SRC 8F
SRC B2/10F
RC B1/4F
SRC RC B1/7F
S 8F
SRC B1/8F
SRC 10F
SRC B1/7F
S 5F
SRC B2/7F
SRC B2/9F
SRC B1/8F
SRC B2/9F
SRC 9F
S SRC B3/34F
RC B1/9F
SRC 8F
S B1/8F
SRC B1/10F
S SRC B1/8F
S 9F
S SRC B1/15F
S 8F
S RC B2/11F
SRC B2/7F
S B1/12F
S RC B1/6F
SRC B1/9F
S10F
S RC B1/7F
RC B1/9F
S SRC B1/11F
S SRC RC B2/20F
S SRC B1/10F
SRC B1/9F
SRC RC S B2/11F
S SRC 7F
S 7F
S 6F
RC 4F
SRC S B1/7F
July 1963
Aug. 1972
Oct. 1987
Sept. 1990
June 1985
July 1993
Dec. 1997
Nov. 1996
July 1996
Apr. 1974
Jan. 1996
Jan. 1990
July 1996
Apr. 1993
Apr. 1984
Oct. 1974
Oct. 1987
Apr. 1973
Sept. 1995
Aug. 2006
Mar. 1985
Mar. 1997
July 1993
Apr. 2010
Feb. 2010
Oct. 2002
May 2010
Jan. 2012
Sept. 1990
Dec. 1988
Sept. 2009
Dec. 1997
Aug. 2010
Nov. 2001
Sept. 2001
Feb. 2004
Feb. 1994
Feb. 2006
Feb. 1996
Aug. 1991
Feb. 1999
Mar. 2008
Mar. 2001
Mar. 1989
Jan. 1991
4,461.47
6,548.17
1,786.06
2,630.30
17,778.14
3,519.50
3,849.63
40,573.27
SRC S B1/9F
SRC B1/11F
S RC B1/6F
S SRC B3/7F
S SRC B2/18F
S SRC B2/14F
SRC B1/7F
June 1993
July 1991
Sept. 2007
May 2011
June 1993
July 2009
Nov. 1990
7,461.90
S 12F
Dec. 2007
13,517.62 S SRC B1/16F Feb. 2008
20,979.52
338,454.46
2003
2003
14,100 3.0
3,050 0.6
8,265 1.8
4,550 1.0
3,190 0.7
2,865 0.6
2,800 0.6
2,578 0.5
2,346 0.5
2006
2,080 0.4
1,560 0.3
1,240 0.3
7,840 1.7
2,520 0.5
1,600 0.3
2005
3,460 0.7
2,910 0.6
2003 13,860 3.0
133,800 28.5
5,900 1.3
2,460 0.5
4,150 0.9
5,000 1.1
5,600 1.2
3,550 0.8
24,000 5.1
1,721 0.4
9,650 2.1
9,200 2.0
7,000 1.5
14,000 3.0
4,135 0.9
8,450 1.8
9,800 2.1
4,800 1.0
16,000 3.4
28,000 6.0
2,871 0.6
1,647 0.4
13,710 2.9
8,180 1.7
6,370 1.4
2,280 0.5
942 0.2
1,592 0.3
415,622 88.6
2,958
7,710
1,650
2,000
15,220
5,600
3,800
38,938
Ownership Type
Land
Building
simple and
16,700 Feeleasehold
Fee simple
3,500 Fee simple
Fee simple
7,670 Fee simple
Fee simple
4,410 Fee simple
Fee simple
3,340 Fee simple
Fee simple
3,380 Fee simple Compartmentalized
ownership
2,320 Fee simple
Fee simple
2,960 Fee simple
Fee simple
2,730 Fee simple
Fee simple
2,470 Fee simple
Fee simple
1,650 Fee simple
Fee simple
1,430 Fee simple
Fee simple
9,230 Fee simple
Fee simple
2,530 Fee simple
Fee simple
1,860 Fee simple
Fee simple
3,290 Fee simple Compartmentalized
ownership (100%)
2,750 Fee simple Compartmentalized
ownership (100%)
13,400 Fee simple Compartmentalized
ownership (100%)
122,000 Co-ownership Co-ownership
4,870 Fee simple
Fee simple
simple and
2,150 Feeleasehold
Fee simple
3,470 Fee simple
Fee simple
6,000 Fee simple
Fee simple
7,710 Fee simple
Fee simple
4,620 Fee simple
Fee simple
32,800 Fee simple
Fee simple
2,310 Fee simple
Fee simple
13,700 Right of site Compartmentalized
ownership (100%)
12,900 Fee simple
Fee simple
8,660 Fee simple
Fee simple
15,900 Fee simple
Fee simple
5,380 Fee simple
Fee simple
10,200 Fee simple Compartmentalized
ownership (100%)
11,800 Fee simple
Fee simple
6,260 Fee simple
Fee simple
17,800 Fee simple
Fee simple
30,100 Fee simple
Fee simple
3,210 Fee simple
Fee simple
1,800 Fee simple
Fee simple
14,800 Fee simple
Fee simple
8,230 Fee simple
Fee simple
6,560 Fee simple
Fee simple
2,470 Fee simple
Fee simple
1,160 Fee simple
Fee simple
1,680 Fee simple
Fee simple
444,160
0.6
1.6
0.4
0.4
3.2
1.2
0.8
8.3
3,650
6,010
2,320
2,600
18,500
6,410
4,300
43,790
Fee simple
Fee simple
Fee simple
Fee simple
Fee simple
Fee simple
Fee simple
Fee simple
Fee simple
Fee simple
Fee simple
Fee simple
Fee simple
Compartmentalized
ownership (100%)
5,300 1.1
9,481 2.0
14,781 3.1
469,341 100.0
7,660
11,500
19,160
507,110
Fee simple
Fee simple
Fee simple
Fee simple
PML (%)
4.53
3.97
3.82
9.19
7.14
3.79
13.33
3.72
4.24
5.51
4.23
4.98
4.87
4.68
6.64
4.51
6.19
3.89
2.03
1.56
4.19
5.05
3.76
4.50
5.33
3.11
3.80
4.44
7.14
5.64
2.67
2.44
4.46
4.42
6.21
1.61
1.76
5.89
7.03
4.32
5.76
4.37
6.21
8.28
6.01
3.55
7.19
6.14
6.29
1.18
1.68
6.41
10.31
3.48
(Note 1) The Five Central Wards of Tokyo are Chiyoda, Chuo, Minato, Shinjuku and Shibuya Wards (or ku).
The Greater Tokyo Area is Tokyo (excluding the Five Central Wards), and Kanagawa, Chiba and Saitama Prefectures.
Major Regional Cities are the Osaka area (Osaka, Kyoto and Hyogo prefectures), Nagoya area (Aichi, Mie and Gifu prefectures) and ordinance designated cities and core cities set forth in the Local Autonomy Act.
(Note 2) The Rentable Area is indicated as of November 30, 2016 (end of 22nd Fiscal Period).
(Note 3) Structure acronyms are S for steel, RC for reinforced concrete and SRC for steel-reinforced concrete.
(Note 4) The values entered in the Appraisal Value at End of Period column are the appraisal values in the real estate appraisal reports with a pricing point of December 1, 2016 for Shin Kanda Mikuracho Building and
of November 30, 2016 (end of 22nd Fiscal Period) for other properties.
(Note 5) The entrusted real estate corresponding to trust beneficiary interests that DOI owns regarding Shinjuku Maynds Tower is a co-ownership interest equal to 6/7 of the entire property. The figure shown for the
Rentable Area is the figure equivalent to 6/7 of the total rentable area of the entire building.
I. Overview of Daiwa Office Investment Corporation
5
Overview of Portfolio (portfolio distribution)
DOI concentrates its investment in the Five Central Wards of Tokyo (Chiyoda, Chuo, Minato, Shinjuku and Shibuya)
Shibuya-ku
7 Daiwa Jingumae
20 SHIBUYA EDGE
30 Daiwa Shibuya Miyamasuzaka
32 Daiwa Ebisu 4-chome
46 Daiwa Higashi-Ikebukuro
Ikebukuro Sta.
46
19 Shinjuku Maynds Tower
26 E SPACE TOWER
50
34 Concept Aoyama
Suginami-ku
35 Shinsen Place
36 Glass City Shibuya
43 Square Daikanyama Building
Nakano Sta.
52 Ogikubo Sta.
50 Integral Tower
Toshimaku
33
Higashi
Shinjuku Sta.
Shinjuku-ku
Shinjuku-ku
44
40
Shinjuku Sta.
28
19
Yotsuya Sta.
Honancho Sta.
52 Ogikubo TM Building
Tokyo Metro
Ginza Line
Marunouchi Line
Hibiya Line
Tozai Line
Chiyoda Line
Yurakucho Line
Hanzomon Line
Namboku Line
Fukutoshin Line
Toei Subway
28 shinyon curumu
33 LAQUAS Higashi Shinjuku
40 Nikko Building
44 Shinjuku West Building
Shibuya-ku
Minato-ku
34
20
26
3 Daiwa Shibaura
4 Daiwa Minami-Aoyama
35
6 Daiwa A Hamamatsucho
36
ine
hi L
Tos
n
e
Den
yu
Tok
Lin
e
To
kyu
To
yok
o
JR
8 Daiwa Shibadaimon
10 Daiwa Shimbashi 510
30
Shibuya Sta.
43
Naka-meguro Sta.
6
32
Ebisu Sta.
15 Daiwa Azabudai
51
Main investment area:
Five Central Wards of
Tokyo
Focused investment
area: Greater Tokyo
Major Regional Cities
Gaienmae Sta.
4
Omotesando Sta.
Oedo Line
Asakusa Line
Mita Line
Shinjuku Line
Yamanote Line
Saikyo Line
Chuo Line
Sobu Line
Keiyo Line
Yokosuka Line
and
Sobu Rapid Line
Aoyamaitchome Sta.
7
18 Daiwa Onarimon
23 Daiwa Nishi-Shimbashi
29 Daiwa Akasaka
31 Azabu Green Terrace
51 Meguro Place Tower
Meguro Sta.
Osaki Sta.
48
(as of December 21, 2016)
Chuo-ku
1 Daiwa Ginza
37 River Gate
2 Daiwa Ginza Annex
11 Daiwa Tsukijiekimae
12 Daiwa Tsukiji
13 Daiwa Tsukishima
14 Daiwa Nihonbashi Horidomecho
16 Daiwa Kyobashi
21 Daiwa Kodenmacho
24 Daiwa Kayabacho Building
Asakusa Sta.
Oshiage Sta.
Suidobashi Sta.
9
Akihabara Sta.
5
Kinshicho Sta.
25 22
Kudanshita Sta.
27 Daiwa Nihonbashi Hongokucho 38 Daiwa Hatchobori ekimae
39 Daiwa Hatchobori ekimae West
42
45
27
21
14
Otemachi Sta.
Chiyoda-ku
17
Ningyocho Sta.
Nihombashi Sta.
Tokyo Sta.
Akasakamitsuke Sta.
Hibiya Sta.
Akasaka Sta.
12
Toranomon Sta.
29
Shimbashi Sta.
23
10
18
Shibakoen Sta.
Chuo-ku
16
Ginza Sta.
12
6
15
24 Suitengumae37
41 Kirin Nihonbashi Building 42 Heiwa Higashi-nihonbashi Building
Sta.
41
Chiyoda-ku
39 38
Hatchobori
Sta.
11
Tsukishima Sta.
13
5 Daiwa Sarugakucho
9 Daiwa Misakicho
17 Daiwa Kojimachi 4-chome
22 Daiwa Jimbocho
25 Daiwa Jinbocho 3-chome
45 Shin Kanda Mikuracho Building
53 Daiwa Meieki
54 Kitahama Grand Building
8
Minato-ku
31
3
Shinagawa
Sta.
47
Shinagawaku
47 Daiwa Shinagawa North
48 Daiwa Osaki 3-chome
54 53
49
49 Daiwa Kamiooka
I. Overview of Daiwa Office Investment Corporation
7
Internal Growth Measures
Realizing rent increases upon contract renewal and tenant replacement while working to heighten tenant satisfaction
Office Market Trends
Further improvements in vacancy rate are observed and rent levels are showing signs of recovery.
■ Office Building Rental Market of Tokyo
■ Office Building Rental Market of 23 Wards of Tokyo
(yen/tsubo)
24,000
(%)
10.0
Average rents of existing buildings (left axis)
Vacancy rate of existing buildings (right axis)
22,000
(tsubo)
400,000
6.0
18,319
18,000
3.29
16,000
6.0
100,000
4.5
0
3.0
-100,000
1.5
Floor area of new supplies
Floor area of new demands
-200,000
0.0
Vacancy rate (right axis)
(Source) Miki Shoji
(Source) CBRE “Mid-term Office Market Outlook 2016~2020”
■ Occupancy Rate
■ Rate of New Leases and Cancellations*
(%)
100.0
(%)
20.0
97.7
95.0
0.0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
95.9
7.5
200,000
4.0
2.0
14,000
Predicted figures
300,000
8.0
20,000
(%)
9.0
96.3 96.4
96.4
95.4
97.2 97.3
98.3 98.7
97.7
97.5
95.0
97.3 97.6
13.4
10.0
96.8
9.8
7.2 7.4
3.9
94.3
8.2
3.3
3.2
5.7
4.4
6.1 6.2
2.0
4.3
0.0
92.8
92.4
90.0
-3.4
-3.9
-3.9
Occupancy rate (actual)
Occupancy rate (forecast)
Occupancy rate (forecast)
(as of disclosure in July 2016)
-10.0
-5.9
-5.3
-7.3 -6.3
-12.0
85.7
85.0
End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of
7th 8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd 23rd 24th
Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period
-2.4 -1.7 -1.6
-2.8
-6.1 -5.7
Rate of new leases
Rate of cancellations
-14.7
-20.0
3.5
1.8 2.9 2.6
-3.8 -3.2 -2.8
Expected rate of new leases
Expected rate of cancellations
End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of
7th 8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd 23rd 24th
Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period
*Transition of rate of new leases and cancellations areas to the total rentable area.
Rental Business Status
■ Average Contract Rent and Market Rent
■ Attribution Analysis/Monthly Contract Rent*
(Million Yen)
(yen/tsubo)
30,000
100
2,000
27,000
90
1,950
80
1,900
78.85 80.16
78.52 79.53
24,000
21,000
70
18,674
18,000
15,000
19,105
18,738
19,219 60
Average contract rents*
Unit rent index
(Period-on-period comparison, right axis)**
50
+59
1,863
+8
Decrease by
Rent Revisions
Increase by
Rent Revisions
–68
+57
Decrease by
Transfer
–15
1,905
0
Increase by
New Leases
Increase by
New Acquisition
1,800
1,750
40
12,000
End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of
4th 5th 6th 7th 8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd
Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period
(Note) Average contract rent of the existing 49 properties at the end of November 2016 is 19,331 yen
(amount of change from the previous period: +209 yen)
* Average contract rents are average monthly contracted rents with tenants at the end of each fiscal period.
** Unit rent index is the earning rates of unit rent of individual properties indexed with the 7th Fiscal Period
as 100.
8
1,850
Decrease by
Tenants’
Cancellations
1,700
End of 21st FP
Monthly Contract Rent
End of 22nd FP
Monthly Contract Rent
* Monthly Contact Rent is a total of final rent from tenants contracting at the end of the Fiscal Period.
Monthly Contract Rent for Shinjuku Maynds Tower was adjusted to 6/7 of the total.
Status of Contract Renewal
■ Monthly Rent Increase Due to Contract Renewal/New Lease
Contract Renewal
(Note 1)
(thousand yen /
month)
19th Fiscal Period (ended May 2015)
20th Fiscal Period (ended November 2015)
21st Fiscal Period (ended May 2016)
22nd Fiscal Period (ended November 2016)
New Lease
Total
(Note 2)
(thousand yen /
month)
(thousand yen /
month)
3,157
6,438
766
3,988
9,020
14,376
14,246
12,747
5,862
7,938
13,479
8,759
Increased Rent as Percentage of Rents and
Common Area Fees Income (Note 3)
Increased Rent as Percentage of Net
Income (Note 4)
6-month conversion 12-month conversion 6-month conversion 12-month conversion
0.7%
1.0%
0.8%
0.7%
1.3%
2.0%
1.7%
1.5%
1.5%
2.1%
1.8%
1.5%
3.0%
4.3%
3.6%
2.9%
(Note 1) “Contract renewal” indicates, for the portion of which lease contract was renewed during each fiscal period, the total of net increase in monthly rent calculated by subtracting the total of monthly rents before renewal from
the total of monthly rents at the end of the relevant fiscal period.
(Note 2) “New lease” indicates, for the portion for which a lease contract was concluded with a new tenant in each fiscal period, the total of net increase in monthly rent calculated by subtracting the total of monthly rents under the
lease contract with the immediately preceding tenant from the total of monthly rents at the end of the relevant fiscal period.
(Note 3) The figures are calculated by dividing the amount obtained by multiplying the total of net increase in monthly rents due to contract renewal and new lease by 6, by rents and common area fees income in the immediately
prior fiscal period, rounded to the first decimal place.
(Note 4) The figures are calculated by dividing the amount obtained by multiplying the total of net increase in monthly rents due to contract renewal and new lease by 6, by net income in the immediately prior fiscal period, rounded
to the first decimal place.
■ Changes in Ratios of Areas with Rent Increase/Decrease/
Unchanged and Cancellation upon Contract Renewal
■ Changes in Rent Increase/Decrease Rate of Contract
Renewal Tenants (sections)
(%)
22nd Period
42.6
53.4
3.9
15.0
0.2
21st Period
49.0
20th Period
50.1
37.5
19th Period
61.1
26.5
18th Period 4.8
0.7
70.8
8.6
8.5
16th Period
10.0 4.6
7.9*
5.0
2.7
66.7
17th Period
0.0
19.9
14.1*
9.0
10.0
57.4
12.1
77.1
0.0
4.5
-5.2
-5.0
-7.0
8.2
-10.0
15th Period
14.4
14th Period
3.1
18.9
13th Period
40.6
0.8
20.0
40.0
0.0
9.8
4.3
1.4
70.3
12.3
67.3
13.8
54.6
60.0
5.0
1.0
2.5
5.2
5.2
0.0
-6.5
-7.0
9.0
7.3
7.2
0.0
0.0
-4.9
6.1
6.1
-5.1
-10.2
-15.0
Increase rate
4.0
80.0
-20.0
100.0
(%)
-25.0
Decrease rate
-22.7
-22.7
Rent increase / decrease rate
* Of the increase in the 17th FP, 14.1% is due to some tenants switching from sublease agreements to
master lease agreements and 7.9% is due to negotiations with tenants.
14th
15th
16th
17th
18th
19th
20th
21st
22nd
Period Period Period Period Period Period Period Period Period
(Note 1) “Increase rate” and “Decrease rate” indicate the simple average of rent increase/decrease against
contract rents before renewals for lease contracts whose contract renewal periods have arrived in
the above periods and whose rent renewals have been agreed, rounded to the first decimal place.
(Note 2) “Rent increase / decrease rate” are obtained by dividing the total of contract rents after renewal for
lease contracts whose contract renewals have been agreed by the total of contract rents before
renewal, rounded to the fist decimal place.
■ Increase/Decrease in Monthly Rent due to New Lease and
Increase/Decrease Rate (compared to the previous tenant
for the same section)
■ Area of which Contract Ended/Will End In and After
the Fiscal Period Ended November 2016 (the 22nd fiscal period)
(based on rentable area)
Decrease
(Thousand yen)
60,000
Increase
New tenant (left axis)
Previous tenant (left axis)
Unchanged
Cancellation
Increase/decrease rate (right axis)
55,054
52,580
50,000
59,042
(%)
22.5
(%)
30.0
Scheduled
25.0
40,000
30,000
32,188
35,345
15.0
14.0
29,203 29,970
9.8
20,000
20.0
24.6
23.6
46,142
18.1
17.6
18.2
24th Period
25th Period
15.0
7.2
7.5
10,000
10.0
5.0
2.6
0
0.0
19th Period
20th Period
21st Period
22nd Period
(Note) “New tenant” refers to the tenant who concluded a new lease contract in the respective fiscal period,
and “Previous tenant” refers to the tenant, for the same section for which the new tenant concluded a
lease contract, which had been under a lease contract immediately before the new tenant.
0.0
22nd Period
23rd Period
26th Period
(Note) The ratio of areas of which lease contracts are scheduled to be renewed in each fiscal period to the
total rentable area (329,312.48m2) as of the end of November 2016 is indicated.
I. Overview of Daiwa Office Investment Corporation
9
Internal Growth Measures
“Bonji-Tettei”
Continuous internal growth and maximization of asset value through “Bonji-Tettei”
“Bonji-Tettei”
Accurate grasp of present
situations
◦In depth understanding of the leasing market
◦Capturing real opinions of occupying tenants
◦ Understanding of features of portfolio properties
◦ Determined budget control
Activities for internal growth
◦Proactive interactions with brokers
◦Accompanying new tenant candidate viewings
◦Frequent visit on tenants
◦ Conducting tenant satisfaction surveys
◦ Thorough examination of properties
◦ Solid numerical analysis in detail
Realization of internal growth
◦Prompt and appropriate strategic lease-up
◦Realizing stable revenue over a long-term by building up solid relationships with tenants
◦Reliable cost control based on rigorous repair plans, etc.
Aims to maximize asset value
Office Management Team
(7 members)
Aims to maximize asset value
through the organization of the
investment corporation’s portfolio
by assigning personnel in charge
and specialist groups to each
property.
Hiroshi Udagawa Takafumi Ushiku Kotaro Ishii
Jun Arai
Chie Kamimura
Investment Planning Team
Middle office work: Budget and performance management for the portfolio
Construction Management
Team (4 members)
Engineering: Formulation and implementation of construction planning for assets
(3 members)
Yuuki Kobatake
Jun Iwasaki
Asset management
Asset management
Asset management
Asset management
Asset management
Asset management
Asset management
work history:
work history:
work history:
work history:
work history:
work history:
work history: 1 month
10 years 4 months 12 years 2 months 10 years 7 months 10 years 7 months 10 years 5 months 4 years 1 month
(Note) “Asset Management work history” is the number of years engaged in the relevant work (as of end of Nov. 2016) and does not indicate the number of years employed at the asset management company.
Occupancy Status of Properties Subject to Leasing Improvement in the Fiscal Period Ended November 2016 (22nd FP)
■ Daiwa Tsukishima (Acquisition Price: 7,840 million yen)
100.0(%)
■ Daiwa Shimbashi 510 (Acquisition Price: 2,080 million yen)
100.0
100.0
99.6
100.0(%)
99.6
100.0
90.0
13.2
‘15/11
‘16/2
‘16/5
‘16/8
88.0
‘15/11
• Promoted to increase inquiries by holding property
viewings before and after the major renewal work and
raising recognition of the property among brokers.
• Visited brokers separately considering business
categories/styles that would match the property
characteristics and explained the property.
90.0
80.0
*
（82.2）
78.9
78.9
‘16/5
‘16/8
70.0
‘16/2
‘16/5
‘16/8
‘15/11
‘16/11
• Captured floor expansion motive of the existing tenants
through constant and good relationships and succeeded
in concluding a floor expansion agreement without
creating any downtime.
‘16/2
‘16/11
• With the property’s high scarcity value due to its
relatively new age and proximity to the station,
succeeded in drawing out the needs of major companies
by tapping into the needs for sub-offices/relocation of
100
companies with rent-paying capacity.
• As a result of negotiations, contracts were concluded at
an
90 early stage with favorable terms and conditions to
realize full occupancy.
100
Properties Subject to Leasing Improvement in the Fiscal Period ending May 2017 (23rd FP)
80
80
70
70
100
*Without the floor expansion from the existing tenant, the occupancy
rate would have fallen to 88.2%.
50
■ Daiwa Tsukishima (Acquisition Price: 7,840 million yen)
• Aim for securing tenants
centering on companies based in
the area, etc. by taking
advantage of favorable access to
central Tokyo and relatively low
rent level for the size and grade
of the property.
• Aim for early leasing of the
remaining vacancies by
launching campaigns targeting
tenants and brokers.
10
100.0
88.0
70.0
‘16/11
100.0
100.0
80.0
0.0
100.0(%)
99.6
56.7
50.0
■ Daiwa Osaki 3-chome (Acquisition Price: 1,650 million yen)
0
■ Concept Aoyama (Acquisition Price: 9,800 million yen)
• With the move-out of the main
tenant, implemented renovation
of facilities (air-conditioning,
plumbing-related) to enhance
the value of the building, which
had been left undone since
completion.
• Aim to take in needs of creative
businesses and/or needs from
Shibuya area where vacancies
are decreasing, capitalizing on
the brand strength of the
Aoyama area.
■ River Gate (Acquisition Price: 28,000 million yen)
• Aim for early securement of
tenants by taking advantage of the
property feature capable of
securing 600 tsubos or larger area
per floor at a reasonable rent in
Tokyo’s major three wards.
• For leasing sections scheduled to
be vacated but still occupied
(cancellation dates yet to arrive),
aim to conclude leasing contracts
before the cancellation dates by
conducting a property viewing
using currently vacant sections.
90
Measures to Increase Portfolio Value
■ Strategic Renewal Work
■ Coexistence with Local Societies
Daiwa Tsukishima
Shinjuku Maynds Tower
Entrance
Before
After
Elevator Hall
Before
Shinjuku Maynds Tower participated in “Shinjuku Minamirumi” (annual
event held for the fourth time) organized by Odakyu Electric Railway Co,
Ltd., Takashimaya Co., Ltd., East Japan Railway Company, Asahi Mutual
Life Insurance Company and Daiwa Securities, and arranged a delightful
space featuring shooting stars and snow crystals displayed in a row
from the snow-covered Christmas tree to the pedestrian deck and to
the main entrance.
Pedestrian Deck
Christmas Tree
Plants
Entrance
After
Restroom
Before
After
Concept Aoyama
Restroom
Before
After
Period: November 9, 2016 – February 14, 2017
Environmental Efforts
■ Progress in Introduction of Green Leasing at Shinjuku Maynds Tower
As part of measures to protect the environment and raise tenant satisfaction, the Investment
Corporation has taken initiatives in which it concludes green leasing agreements with tenants
and promotes installation of LED lighting in areas exclusively occupied by the tenants since
2014. Around 40% of areas exclusively occupied by the tenants are expected to have LED
lighting in the fiscal period ending May 2017.
Benefits for Tenants
•Reduction of utility charges and maintenance
costs
•Improvement of working environment in offices
•Contribution to corporate social responsibility
(CSR)
•Enhancement of the company’s image
Benefits for the Investment
Corporation
•Reduction of maintenance costs
•Enhancement of property value by making
energy-saving investments
•Receiving green lease fees
Ratio of Areas with LED Lighting Installed*
(%) 40.0
Shinjuku Maynds Tower
36.3
35.0
30.0
25.0
20.0
18.2
15.0
10.0
5.0
6.9
3.4
10.3
3.4
0.0
19th
20th
21st 22nd 23rd
18th
Period Period Period Period Period Period
*Forecast figure is indicated for the 23rd FP.
■ Acquired “Green Star” Rating for 5th Consecutive Year at GRESB 2016
Daiwa Real Estate Management participated in the Global Real Estate Sustainability Benchmark (GRESB)’s GRESB Real Estate Assessment in 2016,
targeting Daiwa Office Investment Corporation, and received a high evaluation on sustainability in both “management and policy” and “implementation
and measurement” and acquired Green Star, the highest category, for the fifth consecutive year.
I. Overview of Daiwa Office Investment Corporation
11
External Growth Measures
Investment in selectively-chosen, high-quality competitive properties even in a harsher acquisition environment
Current Portfolio and Acquisition Policy
DOI will invest in competitive properties based on in-depth data analysis upon careful selection from among the vast information on properties
obtained through diverse sourcing.
■ Distribution Chart of Portfolio Properties
■ Acquisition Policy
* Distance to station is indicated by calculating 80m as
one minute
Building age (years)
60
• Place priority on the Five Central Wards of Tokyo and equivalent areas.
• Thoroughly select properties in view of actual demand toward location (distance to
station, station power, crowd attraction, surrounding environment), building specs, etc.
55
• Target properties to improve stability and profitability of our existing portfolio.
50
Properties acquired in the 23rd FP
Properties acquired in the 22nd FP
Properties acquired after the sponsor change
Properties acquired before the sponsor change
Properties sold in the 22nd FP
• Invest in buildings with an age of less than 25 years.
45
■ Sale Policy
40
• Consider replacement of properties if necessary through sale in light of properties’
future competitiveness, profitability, etc.
35
Daiwa Kudan
30 Ogikubo
■ Number of Properties Reviewed for Acquisition
(cases)
500
400
300
300
268
200
25
100
0
* Number of gross proposals (cases)
Number of properties reviewed (left axis)
Number of properties reviewed
416
in detail (right axis)
100
393
356
264
28
17
296
289
15
26
23
9th Period
40
10th Period
Daiwa
Daiwa Kudan
Nishi-Shimbashi
Square Daikanyama Building
15
18
Heiwa Higashi-nihonbashi Building
10
20
5
0
0
Property Acquisitions after Sponsor Change
Daiwa Jimbocho
20
60
31
12
Shinjuku
West Building
80
344
14th Fiscal 15th Fiscal 16th Fiscal 17th Fiscal 18th Fiscal 19th Fiscal 20th Fiscal 21st Fiscal 22nd Fiscal
Period
Period
Period
Period
Period
Period
Period
Period
Period
Time of Acquisition
Shin Kanda Mikuracho Building
TM Building
25
0
1
2
3
4
5
6
7
11
8
9
10
Distance to station (minutes)
Total acquisition price: 244,199 million yen
11th Period
Daiwa
Daiwa
Kayabacho Building Jinbocho 3-chome
12th Period
13th Period
Daiwa Nihonbashi
Hongokucho
14th Period
Daiwa
Osaki 3-chome
Shibuya Ward, Tokyo
24,000 million yen
Chuo Ward, Tokyo
1,721 million yen
Shinagawa Ward, Tokyo
1,650 million yen
Tokyu Land Corporation Endeavor Realty Fund
YK (Note 1)
Tosei Corporation
MCR Six GK
July 8, 2011
May 11, 2012
Sept. 18, 2012
E SPACE TOWER
Property
name
Acquisition price
Chiyoda Ward, Tokyo
4,150 million yen
Minato Ward, Tokyo
5,000 million yen
Chiyoda Ward, Tokyo
4,000 million yen
Chuo Ward, Tokyo
5,600 million yen
Seller
ORIX JREIT Inc.
Japan Core Asset 2 YK
(Note 1)
Shining Nova No. 5 B
(SPC)
Daiwa Property Co.,
Ltd.
Acquisition
date
Mar. 10, 2010
Aug. 13, 2010
Sept. 2, 2010
Mar. 25, 2011
Mar. 29, 2011
shinyon curumu
Daiwa Meieki
Daiwa Kamiooka
Daiwa Shibuya
Dougenzaka
Daiwa Akasaka
Daiwa Shibuya
Miyamasuzaka
Integral Tower
Shinjuku Ward, Tokyo
9,650 million yen
Nagoya City, Aichi
5,300 million yen
Yokohama City, Kanagawa
2,000 million yen
Shibuya Ward, Tokyo
4,500 million yen
Minato Ward, Tokyo
9,200 million yen
Shibuya Ward, Tokyo
7,000 million yen
Suginami Ward, Tokyo
15,220 million yen
Seller
Two domestic industrial
companies
Domestic special
purpose company
Shimizu Corporation
Domestic special
purpose company
Hakuba Capital 1 TMK
(Note 1)
E Buildings Limited
Liability Company
Ogikubo Building YK
(Note 1)
Acquisition
date
Dec. 3, 2012
Apr. 12, 2013
Feb. 1, 2013
Mar. 1, 2013
July 3, 2013
Aug. 9, 2013
Sept. 27, 2013
May 29, 2014
Area
15th Period
Time of Acquisition
Chiyoda Ward, Tokyo
3,550 million yen
16th Period
17th Period
Property
name
Area
Acquisition price
(Note 1) "YK" stands for limited liability company and TMK (tokutei mokuteki kaisha) stands for special purpose company.
(Note 2) The sum of i) the total acquisition price from the time of the above sponsor change on December 21, 2016 and ii) prices for additional acquisition of owned properties or of the site in owned properties during the same period, is 244,619 million yen.
12
Changes in Asset Size and Trading Performance
Aim to achieve medium-term goal of an asset size of 500 billion yen by utilizing acquisition capability earned through capital increase
(billion yen) 550
80.0 (%)
Total Acquisition Price
LTV (based on total assets) (right axis)
500
Investment for competitive
properties after thorough selection
445.7
450
458.3
469.3
413.2
400
350
313.2
311.3
300
250
500.0
467.7
269.1
265.0
278.1
314.9
332.0
287.3
34.2
34.0
34.4
37.5
60.0
387.5
364.0
352.7
50.0
44.3
43.0
40.6
41.7
40.2
43.3
Acquisition properties
42.3
40.0
Acquisition properties
• River Gate
• Heiwa Higashi
Daiwa Hatchobori ekimae
nihonbashi Building
• Azabu Green Terrace •
• Square Daikanyama
•
Daiwa
Hatchobori
ekimae
• Kitahama
25.5
Acquisition properties
25.3
Building
West
Grand
Building
Acquisition property • Daiwa Shibuya Dougenzaka
• Shinjuku West Building
150
• Ogikubo TM Building
• Daiwa Akasaka
Acquisition properties
Acquisition property
• Daiwa Osaki
• Daiwa Shibuya Miyamasuzaka
Acquisition properties
3-chome
• Daiwa Nishi-Shimbashi • E SPACE TOWER
• Daiwa Ebisu 4-chome
• Daiwa Kudan
Acquisition property
100
• LAQUAS Higashi Shinjuku Acquisition properties
• Nikko Building
• Shin Kanda
• Concept Aoyama
Acquisition properties
Acquisition property
• Kirin Nihonbashi
Mikuracho Building
• Shinsen Place
Acquisition property
Acquisition properties
Acquisition property
• shinyon curumu
• Integral Tower
Building
•
Glass
City
Shibuya
50
• Daiwa Jimbocho
• Daiwa Kayabacho
• Daiwa Nihonbashi • Daiwa Meieki
• Meguro Place Tower
• Daiwa Kamiooka
• Daiwa Jinbocho 3-chome Hongokucho
28.1
200
70.0
Acquisition properties
28.9
30.0
20.0
10.0
0.0
0
8th
9th
10th
11th
12th
13th
14th
15th
16th
17th
18th
19th
20th
21st
22nd
As of Dec.
Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period Fiscal Period 31, 2016
18th Period
Kitahama Grand
Building
Azabu Green Terrace
19th Period
Mediumterm goal
20th Period
Daiwa
Ebisu 4-chome
LAQUAS Higashi
Shinjuku
Concept Aoyama
Shinsen Place
Glass City Shibuya Meguro Place Tower
River Gate
Minato Ward, Tokyo
14,000 million yen
Osaka City, Osaka
9,481 million yen
Shibuya Ward, Tokyo
4,135 million yen
Shinjuku Ward, Tokyo
8,450 million yen
Shibuya Ward, Tokyo
9,800 million yen
Shibuya Ward, Tokyo
4,800 million yen
Shibuya Ward, Tokyo
16,000 million yen
Meguro Ward, Tokyo
5,600 million yen
Chuo Ward, Tokyo
28,000 million yen
Azabu Green Terrace
GK
GK North Beach
Domestic industrial
company
Higashi Shinjuku
Building TMK (Note 1)
Domestic special
purpose company
Domestic special
purpose company
Glass City TMK
(Note 1)
Meguro Place TMK
(Note 1)
Thames TMK (Note 1)
July 4, 2014
Aug. 1, 2014
Dec. 1, 2014
Dec. 3, 2014
Mar. 2, 2015
Mar. 2, 2015
May 1, 2015
May 1, 2015
June 2, 2015
Ogikubo TM
Building
23rd Period
Shin Kanda
Mikuracho Building
20th Period
Daiwa
Daiwa Hatchobori
Hatchobori ekimae
ekimae West
21st Period
Kirin Nihonbashi
Building
Nikko Building
22nd Period
Heiwa Higashi
Square Daikanyama
Shinjuku West
nihonbashi Building
Building
Building
Chuo Ward, Tokyo
2,871 million yen
Chuo Ward, Tokyo
1,647 million yen
Shinjuku Ward, Tokyo
13,710 million yen
Chuo Ward, Tokyo
8,180 million yen
Chuo Ward, Tokyo
6,370 million yen
Shibuya Ward, Tokyo
2,280 million yen
Shinjuku Ward, Tokyo Suginami Ward, Tokyo Chiyoda Ward, Tokyo
942 million yen
3,800 million yen
1,592 million yen
Domestic industrial
company
Domestic industrial
company
Overseas company
Kirin Beer Marketing
Domestic special
purpose company
Hulic
GK TC1
GK TC1
OH Real Estate
Management
Sept. 11, 2015
Sept. 11, 2015
Mar. 29, 2016
May 26, 2016
June 1, 2016
June 29, 2016
July 21, 2016
July 21, 2016
Dec. 21, 2016
(Note 3) Total acquisition price above includes acquisition prices of Daiwa Shibuya Dougenzaka divested in the 21st fiscal period and Daiwa Kudan divested in the 22nd fiscal period.
I. Overview of Daiwa Office Investment Corporation
13
External Growth Measures
Newly Acquired Properties
■ 22nd Fiscal Period
Heiwa Higashi-nihonbashi Building [Acquired on June 1, 2016]
Location
Higashi-nihonbashi, Chuo-ku, Tokyo
Site Area
1,213.24m2
Square Daikanyama Building [Acquired on June 29, 2016]
Location
Site Area
Structure/Floor
Total Floor Area
Acquisition Price
Structure/Floor S/7F
Total Floor Area 6,724.10m2
Acquisition Price 6,370 million yen
Daikanyama-cho, Shibuya-ku, Tokyo
503.72m2
S/6F
1,989.40m2
2,280 million yen
Appraisal Value 2,420 million yen (as of June 1, 2016)
Appraisal Value 6,450 million yen (as of April 30, 2016)
Construction Date March 2008
Construction Date March 2001
Occupancy Rate 100.0% (as of June 1, 2016)
Occupancy Rate 100.0% (as of June 29, 2016)
Number of Tenants 5 (as of June 1, 2016)
Number of Tenants 1 (as of June 29, 2016)
• Located a 2-minute walk from Higashi-Nihonbashi Station on the
Toei Asakusa Subway Line and Bakuro-Yokoyama Station on the Toei
Shinjuku Subway Line and 3-minute walk from Bakurocho Station on
the JR Sobu Line (Rapid).
• Since the Horidomecho and Higashi-Nihonbashi area flourished
centering on textile industry for a long time, specific demands from
apparel companies and such are expected.
• Exterior with a modern façade mostly covered with glass.
• Located a 7-minute walk from Daikanyama Station on the Tokyu
Toyoko Line and Shibuya Station on the JR Yamanote Line.
• Faces Hachiman Dori which is a very busy street and an exclusive
residential area and apparel shops are located in the surrounding
areas.
• Highly flexible layout and efficient use is possible, and features
exterior with a modern façade mostly covered with glass.
Shinjuku West Building [Acquired on July 21, 2016]
Ogikubo TM Building [Acquired on July 21, 2016]
Location
Site Area
Structure/Floor
Total Floor Area
Acquisition Price
Nishishinjuku, Shinjuku-ku, Tokyo
623.78m2
RC/4F
1,438.16m2
942 million yen
Location
Site Area
Structure/Floor
Total Floor Area
Acquisition Price
Ogikubo, Suginami-ku, Tokyo
970.53m2
SRC/B1/7F
5,116.78m2
3,800 million yen
Appraisal Value 1,140 million yen (as of July 1, 2016)
Appraisal Value 4,230 million yen (as of July 1, 2016)
Construction Date March 1989
Construction Date November 1990
Occupancy Rate 100.0% (as of July 21, 2016)
Occupancy Rate 100.0% (as of July 21, 2016)
Number of Tenants 7 (as of July 21, 2016)
Number of Tenants 11 (as of July 21, 2016)
• Located a 2-minute walk from Nishi-Shinjuku Station on The Tokyo
Metro Marunouchi Line and a 7-minute walk from Shinjuku Station
which is the largest terminal station in Tokyo.
• Location amidst a concentration of various shop-visit type service
related industries such as temporary staffing businesses and
financial businesses for end users of insurance, etc.
• Can also accommodate the office needs for a sales base that
requires loading/unloading as flat parking in the premises as well as
warehouse sections on each floor are provided.
• Located a 1-minute walk from Ogikubo Station on the JR Chuo/Sobu
Lines and the Tokyo Metro Marunouchi Line.
• The property has high locational appeal among local residents to
service-related companies such as banks and securities companies,
cram schools and clinics since it is excellent in terms of proximity to
Ogikubo Station. Also, back office demands of large companies in
central Tokyo such as call centers are also assumed.
• Highly flexible layout and efficient use is possible, and it is well-lit.
■ 23rd Fiscal Period
Shin Kanda Mikuracho Building [Acquired on December 21, 2016]
• Located a five-minute walk from Kanda Station on the JR
Yamanote/Keihin Tohoku/Chuo Lines and the Tokyo Metro
Ginza Line and a four-minute walk from Shin-Nihonbashi
Station on the JR Sobu Line.
• Located a seven-minute walk from Mitsukoshimae Station
on the Tokyo Metro Ginza/Hanzomon Lines and
Kodenmacho Station on the Tokyo Metro Hibiya Line, and
Iwamotocho Station on the Toei Shinjuku Line.
• Rectangular-shaped (regular-shaped) rental space with no
pillars with highly flexible layout, so efficient use is
possible.
14
Location
Site Area
Structure/Floor
Total Floor Area
Acquisition Price
Kanda Mikuracho, Chiyoda-ku, Tokyo
365.65m2
SRC/S/B1/7F
2,167.76m2
1,592 million yen
Appraisal Value
1,680 million yen (as of December 1, 2016)
Construction Date January 1991
Occupancy Rate
43.4% (as of December 21, 2016)
Number of Tenants 3 (as of December 21, 2016)
Financial Conditions
Reduce refinancing risk by extending borrowing periods and diversifying repayment dates
Status of Interest-Bearing Liabilities
(as of November 30, 2016)
During the 22nd Fiscal Period, DOI took out short-term loans of 8 billion yen in total to raise funds for the acquisition of new properties,
and also conducted early repayment of existing loans (10 billion yen in total) including part of the aforementioned short-term loans.
In addition, DOI refinanced matured existing loans (1.5 billion yen), successfully diversifying repayment dates.
DOI will continue to focus on stable financial management.
■ Interest-Bearing Liabilities
■ Change in Remaining Years at Time of
Procurement of Interest-Bearing Liabilities
70.0 (%) (years) 10.0
(billion yen) 280
Interest-bearing liabilities (left axis)
240
60.0
LTV (based on acquisition price) (Note) (right axis)
200
50.0
Medium-to-long term, upper-limit LTV target range
160
40.0
9.0
8.0
7.0
Average year remaining at the period end (right axis)
Average remaining years at the time of
procurement during the 22nd Fiscal Period
(left axis)
10.0
5.0 (years)
4.5
4.5
4.1 4.0
7.1
6.0
3.5
3.0
5.0
2.5
120
30.0
4.0
2.0
80
20.0
3.0
1.5
2.0
40
10.0
0
0.0
End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of End of
7th 8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd
Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period
(Note) LTV (based on acquisition price): Total interest-bearing liabilities / Total acquisition price of properties
■ Diversification of Repayment Dates
2.4
1.0
0.5
0.0
0.0
8th 9th 10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd
Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period
(Note) Dotted line indicates average remaining years at the time of procurement during
the 22nd Fiscal Period excluding short-term borrowings
■ Balance of Borrowings by Financial Institution
(million yen)
25,000
Financial institution
Investment Corporation Bond
20,000
15,000
10,000
5,000
0
23rd 24th 25th 26th 27th 28th 29th 30th 31st 32nd 33rd 34th 35th 36th 37th 38th 39th 40th 41st 42nd
Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal Fiscal
Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period Period
■ Ratio of Fixed- to
Floating-Rate Borrowings
■ Ratio of Long- to
Short-Term Liabilities
End of 22nd
Fiscal Period 19.6%
End of 22nd
Fiscal Period
80.4%
1.0
14.3
%
85.7%
Fixed interest rates
Long-term loans payable, etc.
Floating interest rates
Short-term loans payable, etc.
Sumitomo Mitsui Banking Corporation
Sumitomo Mitsui Trust Bank
Development Bank of Japan
Mizuho Bank
The Bank of Tokyo-Mitsubishi UFJ
Shinsei Bank
Resona Bank
Mitsubishi UFJ Trust and Banking
Mizuho Trust and Banking
The Bank of Fukuoka
Kansai Urban Banking Corporation
Aozora Bank
Nishi-Nippon City Bank
ORIX Bank Corporation
The Gunma Bank
The 77 Bank
The Musashino Bank
Tokio Marine & Nichido Fire Insurance
The Yamaguchi Bank
The Higashi-Nippon Bank
Nippon Life Insurance Company
The Kagawa Bank
The Hiroshima Bank
Taiyo Life Insurance Company
Fukoku Mutual Life Insurance
Investment Corporation Bonds
Total
Balance (mm yen)
41,400
24,850
21,750
19,400
16,000
14,000
12,500
8,500
6,000
5,500
5,000
3,000
3,000
2,500
2,500
2,000
2,000
2,000
2,000
1,500
1,300
1,000
1,000
300
200
5,100
204,300
Share
20.3%
12.2%
10.6%
9.5%
7.8%
6.9%
6.1%
4.2%
2.9%
2.7%
2.4%
1.5%
1.5%
1.2%
1.2%
1.0%
1.0%
1.0%
1.0%
0.7%
0.6%
0.5%
0.5%
0.1%
0.1%
2.5%
100.0%
■ Status of Rating
Rating agency
Rating and Investment Information, Inc. (R&I)
Japan Credit Rating Agency, Ltd. (JCR)
Target rating
Rating
Rating outlook
Issuer rating
A+
Stable
Long-term issuer rating
AA−
Stable
I. Overview of Daiwa Office Investment Corporation
15
Description of Asset Manager
Organization of Asset Manager (as of December 31, 2016)
■ Description
■ Directors and Auditors
Company Name
Daiwa Real Estate Asset Management Co., Ltd
President and Representative Director
Akira Yamanouchi
Address
6-2-1 Ginza, Chuo-ku, Tokyo
Established
October 21, 2004
Vice President and Representative
Director
Yuji Shinotsuka
Paid-in Capital
200 million yen
Akira Yamanouchi
Vice President and Representative
Director
Yoshiki Nishigaki
President
Director
Naoyuki Owa
Director (non-executive)
Mikita Komatsu
Director (non-executive)
Akihiko Ogino
Auditor
Tamaki Shibayama
Auditor (non-executive)
Morimasa Matsuda
Auditor (non-executive)
Shinji Kiso
9
Executive directors: 4; Executive auditors: 1
Non-executive directors: 2; Non-executive auditors: 2
Board of Directors
No. of Employees
69 (excluding dispatched employees)
Registration of Financial
Instruments Business Operator
Registration No. 355 (Financial Instruments), Director-General,
Kanto Local Finance Bureau (Kinsho)
Building Lots and Buildings
Transaction Business License
License No. (3)-83920, Governor of Tokyo
Discretionary Agent for Real
Estate Transaction Approval
License No. 34, Minister of Land, Infrastructure, Transport and
Tourism
Association Membership
Member of The Investment Trusts Association, Japan
Member of Japan Investment Advisers Association
Member of Type II Financial Instruments Firms Association
■ Organizational Chart
Shareholders’ Meeting
Corporate Auditors
Board of Directors
Compliance Committee
Investment Committee（*）
President and
Representative Director
Compliance Officer
Internal Control Office
Acquisition
Department
Office
Investment Team
Origination
Department
Asset Management
Department
Office
Management Team
Private Fund
Management Department
Customer Relations
Department
Finance
Department
Administration
Department
Corporate Planning
Department
Finance Team
Residential
Investment Team
Residential
Management Team
Accounting Team
Healthcare
Investment Team
Healthcare
Management Team
Management Team
Infrastructure
Investment Team
Investment
Planning Team
Construction
Management Team
*Set up separately for each
investment corporation
Structure
Asset Manager
General Administrator
related to the operation of the
administrative instruments
Daiwa Real Estate Asset
Management Co., Ltd
④
①
Investment Corporation
②
General Administrator
Asset Custodian
Sumitomo Mitsui Trust Bank, Limited
General Meeting of Unitholders
Officers
Executive Director: Yoshimi Murakami
Supervisory Director: Takayuki Hiraishi
Supervisory Director: Hiroshi Sakuma
Supporting Company
Accounting Auditor
Daiwa Securities Group Inc.
KPMG AZSA LLC
① Asset management contract/General administration affairs contract related to operation
of administrative instruments
② General administrative affairs contract/Asset custodian contract
③ Unitholder register, etc. management contract/Special account management contract
③
⑤
Manager of Unitholder
Registry, etc.
Special Account Management
Institution
Sumitomo Mitsui Trust Bank, Limited
General Administrator
(Investment Corporation Bonds)
Sumitomo Mitsui Banking Corporation
Resona Bank, Ltd.
④ Sponsor support agreement
⑤ Fiscal agency agreement
(Note) The specified affiliated juridical person (meaning a specified affiliated juridical person as provided in Article 12, Paragraph 3 of the Cabinet Office Ordinance on Disclosure of Information, etc. on Specified
Securities (Ordinance of the Ministry of Finance No. 22 of 1993; including amendments thereto)) of DOI is Daiwa Securities Group Inc. Daiwa Securities Group Inc. is the Asset Management Company’s parent
company (meaning a parent company as stipulated in Article 8, Paragraph 3 of the Ordinance on Terminology, Forms and Preparation Methods of Financial Statements, etc. (Ordinance of the Ministry of Finance
No. 59 of 1963; including amendments thereto))
16
II. Asset Management Report
1. Management Status and Other Performance Highlights Data
Fiscal Period
22nd Period 21st Period 20th Period 19th Period 18th Period
June 1, 2016 From Dec. 1, 2015 From June 1, 2015 From Dec. 1, 2014 From June 1, 2014
( From
To Nov. 30, 2016 )( To May 31, 2016 )( To Nov. 30, 2015 )( To May 31, 2015 )( To Nov. 30, 2014 )
(1) Operating Performance
(Millions of yen, except per unit data or where otherwise indicated)
Operating revenues
12,853
12,363
11,838
10,387
9,764
Rental revenues
12,687
11,948
11,777
10,112
9,693
Operating expenses
6,710
6,255
6,223
5,617
5,325
Property-related expenses
5,433
5,014
5,026
4,487
4,325
Operating income
6,143
6,108
5,615
4,770
4,439
Ordinary income
5,325
5,327
4,690
4,032
3,642
Net income
5,325
5,250
4,689
4,032
3,641
(2) Properties, etc. (as of end of period)
Total assets
483,451
476,690
460,706
432,233
399,555
[period-on-period percentage changes]
[+1.4%]
[+3.5%]
[+6.6%]
[+8.2%]
[+4.9%]
Interest-bearing liabilities
204,300
206,300
192,300
191,300
160,800
Net assets
256,517
247,720
247,700
222,955
222,593
[period-on-period percentage changes]
[+3.6%]
[+0.0%]
[+11.1%]
[+0.2%]
[+10.4%]
Unitholders’ capital
251,552
243,404
243,404
219,156
219,156
(3) Distributions
Total distribution amount
5,325
5,086
4,689
4,032
3,641
Dividend payout
100.0%
96.9%
100.0%
100.0%
100.0%
(4) Per Unit Information
Total number of units issued (units)
497,869
484,000
484,000
441,000
441,000
Net assets per unit (yen)
515,231
511,819
511,778
505,566
504,746
Distribution per unit (yen)
10,695
10,508
9,688
9,142
8,256
Distribution amount from earnings per unit (yen)
10,695
10,508
9,688
9,142
8,256
Distribution amount in excess of earnings per unit (yen)
–
–
–
–
–
(5) Financial Indicators
1.1%
1.1%
1.1%
1.0%
0.9%
ROA
Notes 2
and
3
[annual rate]
[2.2%]
[2.3%]
[2.1%]
[1.9%]
[1.9%]
2.1%
2.1%
2.0%
1.8%
1.7%
ROE
Notes 3
and 4
[annual rate]
[4.2%]
[4.2%]
[4.0%]
[3.6%]
[3.4%]
Capital ratio
53.1%
52.0%
53.8%
51.6%
55.7%
[period-on-period percentage changes]
[+1.1%]
[−1.8%]
[+2.2%]
[−4.1%]
[+2.7%]
LTV (loan to value)
42.3%
43.3%
41.7%
44.3%
40.2%
Note 5
Property leasing cash flows (NOI)
9,004
8,660
8,455
7,180
6,866
(6) Other Referential Information
Number of investment properties
53
50
50
47
46
Note 6
558
543
558
450
479
Number of tenants
336,722.04 328,027.44 325,313.01 288,833.07 286,088.89
Total rentable area (m2)
Note
7
97.7%
98.7%
98.3%
97.3%
97.2%
Occupancy rate
Depreciation
1,750
1,726
1,704
1,554
1,497
Capital expenditures
993
517
1,087
905
570
(Note 1) Operating revenues, etc. do not include consumption taxes, etc.
(Note 2) ROA: Ordinary income ÷ [(Total assets at beginning of period + Total assets at end of period) ÷ 2] × 100
(Note 3) Figures for the 18th Fiscal Period are the annualized figures calculated based on 183 days of management.
Figures for the 19th Fiscal Period are the annualized figures calculated based on 182 days of management.
Figures for the 20th Fiscal Period are the annualized figures calculated based on 183 days of management.
Figures for the 21st Fiscal Period are the annualized figures calculated based on 183 days of management.
Figures for the 22nd Fiscal Period are the annualized figures calculated based on 183 days of management.
(Note 4) ROE: Net income ÷ [(Net assets at beginning of period + Net assets at end of period) ÷ 2] × 100
(Note 5) Property leasing cash flows (NOI): Rental revenues − Property-related expenses + Depreciation
(Note 6) Number of tenants is the number of end tenants. When there is a tenant occupying multiple buildings, the concerned tenant is
counted and stated for each individual building.
(Note 7) Occupancy rate: Total leased area ÷ Total rentable area
II. Asset Management Report
17
2. Developments in Asset Management in the Fiscal Period under Review
(1) Brief History of the Investment Corporation
Daiwa Office Investment Corporation (the former DA Office Investment Corporation; hereinafter referred
to as “DOI”) was established on July 11, 2005 in accordance with the Act on Investment Trusts and
Investment Corporations (Act No. 198 of 1951; including amendments thereto) with Daiwa Real Estate Asset
Management Co., Ltd. (former name K.K. daVinci Select) (the “Asset Manager”) as the organizer. After its
establishment, DOI implemented an additional issuance of investment units through a public offering (99,600
units) on October 18, 2005 and then listed on the Tokyo Stock Exchange, Inc. (TSE) Real Estate Investment
Trust Section (stock code: 8976) on the following day.
Though initial assets under management were 79,573 million yen (sum total of acquisition price),
subsequent activities, such as additional acquisition of properties and replacement of portfolio properties,
resulted in the assets under management amounting to 467,750 million yen as of the last day of November
2016.
DOI strives to secure stable revenue and sustained growth of the investment assets based on a clear
portfolio development policy of specializing in investment in office buildings, with a particular focus on
investment in a total floor area of more than about 2,000m2 situated in downtown Tokyo, as well as through
dedicated efforts to heighten tenant satisfaction levels.
(2) Investment Environment and Management Performance
(A)Investment Environment (from June 2016 to November 2016)
The Japanese economy during the fiscal period under review continued to show a modest recovery
trend with real GDP growth rate (Second Preliminary Estimates) for July to September 2016 at an annual
rate of 1.3%, recording a positive figure for three consecutive quarters under the ongoing quantitative/
qualitative monetary easing policy by the Bank of Japan.
In the office building leasing market in central Tokyo, with new supply having settled down, the vacancy
rate took a turn after peaking in June 2013, dropping to 3.75% at the end of November 2016. Led by
improvement in the vacancy rate for large buildings, the overall vacancy rate that includes small- to
medium-sized buildings also continues to be on an improving trend. The drop in the vacancy rate has led
to an increase in office rent in some areas, and the market as a whole continues to see increase in rent,
albeit slight.
For the office building transaction market, an appetite for property acquisitions continued to be strong
among real estate companies, funds (including J-REITs) and overseas investors with the continuing
proactive lending attitude by financial institutions backed by the forecast of an increase in property prices
in accordance with expectations for economic recovery.
(B)Management Performance
In view of increasing the long-term EPS (EPS (net income per unit) after deducting gain on sales of
properties) over the medium to long term, DOI continued to work on “external growth,” which aims to
boost revenue through acquisition of properties, and “internal growth,” which aims to maximize income
generating from owned properties.
Concerning external growth, DOI acquired “Heiwa Higashi-nihonbashi Building” (acquisition price: 6,370
million yen) and “Square Daikanyama Building” (acquisition price: 2,280 million yen) in June 2016, and
“Ogikubo TM Building” (acquisition price: 3,800 million yen) and “Shinjuku West Building” (acquisition
price: 942 million yen) in July 2016. In addition, DOI sold 1 property (Daiwa Kudan) during the fiscal period
under review. As a result, DOI’s assets under management as of the end of the 22nd Fiscal Period
(November 30, 2016) totaled 53 properties, the sum total of acquisition prices of which amounted to
467,750 million yen.
Concerning internal growth, while the office leasing market trended, DOI conducted proactive leasing,
such as capturing needs for floor expansion within the same property through strengthening relationships
with existing tenants and reinforcing collaboration with leasing brokers and property managers. As a
result, the occupancy rate as of the end of the 22nd Fiscal Period (November 30, 2016) was 97.7%.
18
(3) Overview of Capital Procurement
(A) Procurement of Capital for New Property Acquisitions
(a) In the 22nd Fiscal Period, DOI made the following borrowings and issued the following investment units
to fund the acquisition of new properties.
・DOI took out short-term loans of 6,000 million yen in total from Sumitomo Mitsui Banking
Corporation, Mizuho Bank, Ltd. and The Bank of Tokyo-Mitsubishi UFJ, Ltd. on June 1, 2016 to
partially fund the acquisition of a new property (Heiwa Higashi-nihonbashi Building) acquired on the
same day.
・DOI took out a short-term loan of 2,000 million yen from Sumitomo Mitsui Banking Corporation on
June 29, 2016 to partially fund the acquisition of a new property (Square Daikanyama Building)
acquired on the same day.
・A public offering with the payment date on August 2, 2016 (12,700 issued units, paid-in price of
587,489 per unit, a total paid-in price of 7,461,110,300 yen) and a third-party allotment with the
payment date on August 31, 2016 (1,169 issued units, paid in price of 587,489 per unit, a total
paid-in price of 686,774,641 yen) were implemented to repay part of the aforementioned short-term
loans totaling 8,000 million yen and to allocate the funds to cash on hand which decreased after
being used to acquire new properties (Ogikubo TM Building and Shinjuku West Building) acquired
on July 21, 2016.
(B) Procurement of Capital for Repayment of Borrowings
In the 22nd Fiscal Period, DOI made the following borrowings to fund the repayment of borrowings that
were due for repayment.
・A total amount of 1,500 million yen was borrowed from Yamaguchi Bank Ltd. on August 31, 2016
to fund the repayment of the same amount borrowed from Aozora Bank, Ltd. due the same day.
DOI made an early repayment on September 30, 2016 of 10,000 million yen out of 11,000 million yen in
total borrowings (long-term loans from Sumitomo Mitsui Banking Corporation and Sumitomo Mitsui Trust
Bank, Ltd. taken out on May 26, 2016; short-term loans from Sumitomo Mitsui Banking Corporation,
Mizuho Bank, Ltd. and The Bank of Tokyo-Mitsubishi UFJ, Ltd. taken out on June 1, 2016; and a short-term
loan from Sumitomo Mitsui Banking Corporation taken out on June 29, 2016).
(C) Status of Interest-Bearing Liabilities at End of the Fiscal Period under Review
As a result of the above, the balance of interest-bearing liabilities outstanding as of the end of the 22nd
Fiscal Period (November 30, 2016) stood at 204,300 million yen (short-term debt: 1,000 million yen; longterm debt: 198,200 million yen; investment corporation bonds: 5,100 million yen). The balance of the current
portion of long-term debt stood at 28,250 million yen.
The average remaining period of interest-bearing liabilities as of the end of the 22nd Fiscal Period stands
at 4.1 years.
(4) Capital Expenditures during the 21st Fiscal Period
The following summarizes the primary construction work that constitutes capital expenditures implemented
during the 22nd Fiscal Period. Capital expenditures for the 22nd Fiscal Period amounted to 992 million yen
and, when combined with the 456 million yen in repair expenses charged to the 22nd Fiscal Period expenses,
totals 1,449 million yen in construction work were implemented.
Name of real estate
properties
(Location)
Daiwa Tsukishima
(Chuo-ku, Tokyo)
Shinjuku Maynds Tower
(Shibuya-ku, Tokyo)
Daiwa Shibaura
(Minato-ku, Tokyo)
Purpose
Renovation work of common areas
Repair work of mechanical parking facility
Upgrading of elevators
Other
Total
Period
From:
To:
From:
To:
From:
To:
From:
To:
Apr. 2016
Jul. 2016
Jul. 2016
Oct. 2016
Aug. 2016
Nov. 2016
Jun. 2016
Nov. 2016
Construction
amount paid
(Millions of yen)
70
69
64
790
993
II. Asset Management Report
19
(5) Overview of Financial Performance and Distributions
As a result of the management described above, DOI posted financial performance for the 22nd Fiscal Period
of 12,583 million yen in operating revenues, 6,143 million yen in operating income, 5,325 million yen in ordinary
income and 5,325 million yen in net income.
Concerning distributions, it is planned that the amount equivalent to distributions from earnings would be
included in the amount of tax-deductible expenses based on application of special provisions for taxation of
corporation tax (Article 67-15 of the Act on Special Measures Concerning Taxation (Act No. 26 of 1957;
including amendments thereto) (the “Special Taxation Measures Act”)). Accordingly, DOI decided to distribute
the entire amount of unappropriated retained earnings (excluding fractions of the distribution amount per unit
that are less than 1 yen), and declared a distribution amount per unit of 10,695 yen.
3. Outlook for the Next Fiscal Period
(1) Investment Environment
The Japanese economy going forward is expected to see a moderate economic recovery through recovery
in personal spending against the backdrop of favorable employment environment and the improved income
environment while various economic measures, centering on the public works projects and financial policies
promoted by the Abe administration and the monetary easing policy implemented by Bank of Japan continue.
However, factors, such as policies to be set out by the U.S. President-elect Donald Trump, the downward
swing of the Chinese economy, upset in emerging markets accompanying the U.S. “exit strategy,” drop in
stock prices around the world due to geopolitical risks and downturn of the European economy, pose
potential risks of disrupting the Japanese real economy and financial environment, and are thus thought to
require attention.
In the Tokyo office building leasing market, while new supply is on a low note, factors such as improvement
in employment are stimulating demand, resulting in the vacancy rate dropping. Improvement in corporate
performance is forecasted to increase demand for office floor space and rent is expected to improve as a
consequence. In the office building transaction market, backed by the favorable financing environment and
expectations of rent rising, among other factors, property acquisition appetite among investors overseas, real
estate companies and funds (including J-REITs) is thought to grow even stronger.
(2) Future Management Policy and Tasks
(A) Strategy for Managing Existing Properties
Despite such office leasing market conditions as described above, the tenant side is also expected to
become more heavily selective with properties in terms of software such as crime/disaster prevention
measures and operations/management on top of location and building specifications. Consequently, DOI
will carry out operational management under the following policy with an aim to enhance the
competitiveness of existing properties and thereby increase the normal EPS over the medium to long
term.
(a) Maintain and raise occupancy rates
Concerning existing tenants, strive to reduce vacancy risks by improving the quality of buildings,
equipment and management system. In addition, concerning new tenants, strive to maintain and raise
occupancy rates through the provision of services that are of higher satisfaction levels than competing
properties through proactive participation in the market.
(b) Maintain and raise profitability
Aim to secure stable revenue over the medium to long term through further strengthening good
relationships with existing tenants, as well as proactively tapping the needs of new tenants by
discerning the market environment.
(c) Lower operational management costs
Strive to lower operational management costs based on maintaining office environments of high
tenant satisfaction levels by implementing efficient operational management and reviewing systematic
construction work by optimally leveraging the economies of scale achieved from proactively realizing
external growth.
20
(B) Strategy for New Property Investments
DOI will invest in office buildings that have a total floor area of about 2,000m2 or more based on various
external growth strategies, while maintaining a balance with the asset acquisition environment and
financing situation. In principle, considerations will focus on Tokyo as the investment target area, but DOI
will also consider investing in competitive properties in cities other than Tokyo from a viewpoint of
territorially-distributed investments.
As pipeline support, in addition to expanding its own information-sourcing channels, DOI will continue to
search for properties that meet its investment criteria by proactively gathering real estate transaction
market information through greater collaboration with the Asset Manager and Sponsor Group and utilizing
the Group’s extensive network of clients, partners, etc.
Furthermore, in the 22nd Fiscal Period, DOI acquired “Heiwa Higashi-nihonbashi Building,” “Square
Daikanyama Building,” “Shinjuku West Building” and “Ogikubo TM Building” which are located in Tokyo.
DOI believes that acquisition of these properties will contribute to further stabilization and enhancement of
the portfolio. DOI will continue to strive to acquire properties in line with the investment strategy described
above.
(C) Financial Strategy
DOI will conduct disciplined financial management of the following basic content.
(a)Control leverage by keeping the ratio of interest-bearing liabilities to total assets (LTV) within the range
of 40% to 50% at maximum, taking into consideration also the real LTV, etc., as a principle.
(b)Diversify repayment deadlines, targeting 30.0 billion yen as the maximum amount of interest-bearing
liabilities that shall become due during any single fiscal period as a principle.
(c)Aim to have long-term loans account for at least 70% of total loans as a principle.
(d)Achieve diversification of lenders, which shall mainly be Japanese financial institutions.
(e)Pursuant to its fund management rules, maintain stability in its financial standing by managing
necessary funds, such as the amount equivalent to distributions paid, separately from working capital.
(D) Schedule of Capital Expenditures
The following are the principal capital expenditures arising from renovation construction work, etc.
currently planned for existing portfolio properties. Please note that the expected construction amount
includes portions that are expensed as a separate account item of accounting costs.
Expected construction amount
(Millions of yen)
Name of real estate
properties
(Location)
Purpose
Scheduled
implementation
period
Total
amount
Amount
paid
during
current
period
Total
amount
already
paid
Daiwa Akasaka
(Minato-ku, Tokyo
Upgrading of air-conditioning
system
From: Nov. 2016
To: Jun. 2018
1,091
–
–
Ogikubo TM Building
(Suginami-ku, Tokyo)
Upgrading of air-conditioning
equipment
From: Feb. 2017
To: May 2017
88
–
–
Shinjuku Maynds Tower Changing lighting in exclusive
(Shibuya-ku, Tokyo)
areas to LED (green leasing)
From: Dec. 2016
To: May 2017
60
–
–
Daiwa Akasaka
(Minato-ku, Tokyo)
Upgrading of mechanical parking From: Oct. 2016
facility
To: May 2017
55
–
–
Daiwa Shibadaimon
(Minato-ku, Tokyo)
Upgrading of individual airconditioning equipment
54
–
–
From: Feb. 2017
To: May 2017
II. Asset Management Report
21
III. Balance Sheets
As of May 31, 2016 and November 30, 2016
(Thousands of yen)
As of
May 31, 2016
As of
November 30, 2016
Assets
Current Assets:
Cash and cash equivalents (Notes 3 and 4)
23,038,218
20,667,865
174,843
145,235
－
55,305
427,960
369,096
307
12
Other current assets
188,383
16,773
Total Current Assets
23,829,711
21,254,286
12,302,227
12,302,227
3,146,315
3,219,522
18,958
19,126
3,449
2,661
Land in trust accounts
351,272,600
359,306,652
Buildings and structures in trust accounts
102,387,897
104,787,007
Machinery and equipment in trust accounts
756,802
886,637
Tools, furniture and fixtures in trust accounts
187,063
228,556
42,086
399,430
4,337
4,337
(21,675,860)
(23,137,885)
2,407,102
2,398,276
306,884
306,884
451,159,860
460,723,430
596
542
113,685
113,684
Long-term prepaid expenses
1,189,162
1,074,159
Deferred tax assets (Note 13)
355,230
165,910
－
80,483
Deferred investment corporation bond issuance costs
29,436
26,482
Others
12,353
11,944
1,700,462
1,473,204
476,690,033
483,450,920
Tenant receivables
Consumption taxes receivable
Prepaid expenses
Deferred tax assets (Note 13)
Investment Properties, at cost (Notes 5 and 6):
Land
Buildings and structures
Tools, furniture and fixtures
Construction in progress
Construction in progress in trust accounts
Other tangible fixed assets in trust accounts
Less: accumulated depreciation
Leasehold rights
Leasehold rights in trust accounts
Total Investment Properties, net
Other Assets:
Trademark
Lease and guarantee deposits in trust
Derivative assets (Note 4)
Total Other Assets
Total Assets
The accompanying notes are an integral part of these financial statements.
22
(Thousands of yen)
As of
May 31, 2016
As of
November 30, 2016
Liabilities
Current Liabilities:
Accounts payable
988,221
1,996,737
－
1,000,000
21,200,000
28,250,000
494,490
456,273
970
831
534,191
89,141
2,051,728
2,028,281
Other current liabilities
365,653
264,660
Total Current Liabilities
25,635,253
34,085,923
5,100,000
5,100,000
180,000,000
169,950,000
16,870,266
16,952,100
1,364,329
845,574
203,334,595
192,847,674
228,969,848
226,933,597
243,403,874
251,551,759
－
164,163
5,250,226
5,324,776
248,654,100
257,040,698
Deferred gains or losses on hedges
(933,915)
(523,375)
Total valuation and translation adjustments
(933,915)
(523,375)
Total Net Assets
247,720,185
256,517,323
Total Liabilities and Net Assets
476,690,033
483,450,920
Short-term debt (Notes 4 and 9)
Long-term debt due within one year (Notes 4 and 9)
Accounts payable – other
Income taxes payable
Accrued consumption taxes
Rent received in advance
Long-Term Liabilities:
Investment corporation bonds (Notes 4 and 9)
Long-term debt (Notes 4 and 9)
Tenant security deposits including trust accounts (Note 4)
Derivative liabilities (Note 4)
Total Long-Term Liabilities
Total Liabilities
Net Assets (Notes 8 and 14)
Unitholders’ Equity:
Unitholders’ capital
Units authorized: 2,000,000 units
Units issued and outstanding: 484,000 units as of May 31,
2016 and 497,869 units as of November 30, 2016,
respectively
Reserve for reduction entry
Retained earnings
Total Unitholders’ Equity
Valuation and translation adjustments
The accompanying notes are an integral part of these financial statements.
III. Balance Sheets
23
IV. Statements of Income and Retained Earnings
For the fiscal periods ended May 31, 2016 and November 30, 2016
(Thousands of yen)
For the fiscal periods
ended May 31, 2016
Operating Revenues:
Rental revenues (Note 7)
Other revenues related to property leasing (Note 7)
Gain on sale of investment properties (Note 11)
Total Operating Revenues
Operating Expenses:
Property-related expenses (Note 7)
Asset management fees
Asset custody fees
Administrative service fees
Trust fees
Directors’ compensation
Other operating expenses
Total Operating Expenses
Operating Income
Non-Operating Revenues:
Interest income
Reversal of distribution payable
Other non-operating revenues
Total Non-Operating Revenues
Non-Operating Expenses:
Interest expense
Interest expense on investment corporation bonds
Borrowing expenses
New investment units issuance costs
Other non-operating expenses
Total Non-Operating Expenses
For the fiscal periods
ended November 30, 2016
11,947,802
91,981
323,700
12,687,269
63,616
102,139
12,363,483
12,853,024
5,014,202
994,954
23,183
73,682
5,433,014
1,043,441
24,159
82,492
19,720
5,400
123,887
18,936
6,300
101,197
6,255,028
6,108,455
6,709,539
6,143,485
132
689
4,902
45
624
10,357
5,723
11,026
597,307
16,892
166,855
603,225
16,708
173,072
31,339
4,738
－
6,154
787,208
829,082
Ordinary Income
Income Before Income Taxes
Income taxes – current
Income taxes – deferred
5,326,970
5,326,970
5,325,429
5,325,429
978
75,798
837
6
Total Income Taxes (Note 13)
Net Income
Retained Earnings Brought Forward
76,776
5,250,194
32
5,250,226
843
5,324,586
190
5,324,776
Retained Earnings at End of Period
The accompanying notes are an integral part of these financial statements.
24
IV. Statements of Income and Retained Earnings
V. Statements of Changes in Net Assets
For the fiscal periods ended May 31, 2016 and November 30, 2016
Number of
Units
(Units)
Balance as of
November 30, 2015
Cash distributions
declared
Net income
Net changes of
items other than
unitholders’ equity
Balance as of
May 31, 2016
Issuance of new
investment units
Provision of reserve
for reduction entry
Cash distributions
declared
Net income
(Thousands of yen)
Unitholders’ Equity
Reserve for
Unitholders’
Retained
Reduction
Capital
Earnings
Entry
Deferred Gains
or Losses on
Hedges
Total Net
Assets
484,000
243,403,874
－
4,689,024
(392,515)
247,700,383
－
－
－
(4,688,992)
－
(4,688,992)
－
－
－
5,250,194
－
5,250,194
－
－
－
－
(541,400)
(541,400)
484,000
243,403,874
－
5,250,226
(933,915)
247,720,185
13,869
8,147,885
－
－
－
8,147,885
－
－
164,163
(164,163)
－
－
－
－
－
(5,085,873)
－
(5,085,873)
－
－
－
5,324,586
－
5,324,586
410,540
410,540
(523,375)
256,517,323
Net changes of
items other than
－
－
－
－
unitholders’ equity
Balance as of
497,869 251,551,759
164,163
5,324,776
November 30, 2016
The accompanying notes are an integral part of these financial statements.
V. Statements of Changes in Net Assets
25
VI. Statements of Cash Flows
For the fiscal periods ended May 31, 2016 and November 30, 2016
(Thousands of yen)
For the fiscal periods
ended
May 31, 2016
For the fiscal periods
ended
November 30, 2016
Income before income taxes
5,326,970
5,325,429
Depreciation and amortization
1,726,590
1,750,179
Amortization of bond issuance costs
2,954
2,954
New investment units issuance costs
－
31,339
614,199
619,933
Decrease in tenant receivables
63,993
29,608
(Decrease) increase in accounts payable
(93,048)
382,297
110,704
(23,447)
9,127,507
3,795,174
Interest payments
(614,107)
(620,025)
Decrease (increase) in consumption taxes receivable
515,291
(55,305)
Other, net
582,002
(81,115)
17,363,055
11,157,021
(22,669,418)
(14,558,212)
－
(82,008)
Proceeds from tenant security deposits
882,544
1,152,741
Refunds of tenant security deposits
(549,537)
(1,070,907)
Net Cash Used in Investing Activities
(22,336,411)
(14,558,386)
Proceeds from short-term debt
－
8,000,000
Repayments of short-term debt
(5,500,000)
(7,000,000)
Proceeds from long-term debt
21,700,000
1,500,000
Repayments of long-term debt
(2,200,000)
(4,500,000)
－
8,116,546
(4,688,696)
(5,085,534)
Net Cash Provided by Financing Activities
9,311,304
1,031,012
Net Change in Cash and Cash Equivalents
4,337,948
(2,370,353)
Cash and Cash Equivalents at Beginning of Period
18,700,270
23,038,218
Cash and Cash Equivalents at End of Period (Note 3)
23,038,218
20,667,865
Cash Flows from Operating Activities:
Interest expense
Increase (decrease) in rent received in advance
Decrease in investment properties due to sale
Net Cash Provided by Operating Activities
Cash Flows from Investing Activities:
Payments for purchases of investment properties
Payments for purchases of intangible assets
Cash Flows from Financing Activities:
Proceeds from issuance of new investment units
Distributions paid
The accompanying notes are an integral part of these financial statements.
26
VI. Statements of Cash Flows
VII. Notes to Financial Statements
For the fiscal periods ended May 31, 2016 and November 30, 2016
Note 1 – Organization and Basis of Presentation
Organization
Daiwa Office Investment Corporation (the former DA Office Investment Corporation; hereinafter referred to as
“DOI”) was established on July 11, 2005 as an investment corporation under the Act on Investment Trusts and
Investment Corporations (Act No. 198 of 1951, including subsequent revisions, hereinafter referred to as the
“Investment Trust Act”) by the founder (the former daVinci Select; now, Daiwa Real Estate Asset Management
(hereinafter referred to as the “Asset Manager”)).
DOI is an externally managed real estate fund, established as an investment corporation. The Asset Manager,
as DOI’s asset management company, is engaged in acquiring, managing, leasing, and renovating office
properties. Daiwa Securities Group Inc. currently owns 100% of the shares of the Asset Manager.
On October 18, 2005, DOI had raised approximately 49,498,710 thousand yen through an initial public offering
of units. Those units were listed on the J-REIT section of the Tokyo Stock Exchange.
As of November 30, 2016, DOI had ownership or trust beneficiary interests in 53 office properties with
approximately 336,722m2 of rentable office space and had leased office space to 558 tenants engaged in a
variety of businesses. The occupancy rate for the office properties was approximately 97.7%.
Basis of Presentation
The accompanying financial statements have been prepared in accordance with the provisions set forth in the
Investment Trust Act, the Financial Instruments and Exchange Act and their related accounting regulations, and
in conformity with accounting principles generally accepted in Japan (“Japanese GAAP”), which are different in
certain respects as to application and disclosure requirements of International Financial Reporting Standards or
accounting principles generally accepted in the United States of America.
The accompanying financial statements have been reformatted and translated into English from the financial
statements of DOI prepared in accordance with Japanese GAAP and filed with the appropriate Local Finance
Bureau of the Ministry of Finance as required by the Financial Instruments and Exchange Act. In preparing the
accompanying financial statements, relevant notes have been expanded and certain reclassifications have been
made from the Japanese GAAP financial statements. Certain supplementary information included in the statutory
Japanese GAAP financial statements, but not required for fair presentation, is not presented in the
accompanying financial statements.
DOI maintains its accounting records in Japanese yen.
DOI’s fiscal period is a six-month period ending at the end of May and November of each year.
VII. Notes to Financial Statements
27
Note 2 – Summary of Significant Accounting Policies
(a) Cash and Cash Equivalents
Cash and cash equivalents consist of cash, demand deposits, and short-term investments which are highly
liquid, readily convertible to cash and with insignificant risk of market value fluctuation, with maturities of three
months or less from the date of acquisition.
(b) Investment Properties
Investment properties are recorded at cost, which includes the allocated purchase price, related costs and
expenses for acquisition of the office properties and the trust beneficiary interests in trust. Investment property
balances are depreciated using the straight-line method over the estimated useful lives as follows:
As of May 31, 2016
As of November 30, 2016
Buildings and structures
2-64 years
2-64 years
Machinery and equipment
4-23 years
7-23 years
Tools, furniture and fixtures
5-18 years
5-15 years
Cost related to the renovation, construction improvement of properties is capitalized. Expenditures for repairs and
maintenance which do not add to the value or prolong the useful life of property, are expensed as incurred.
(c) Deferred Investment Corporation Bond Issuance Costs
Deferred investment corporation bond issuance costs are amortized on a straight-line basis over the respective
terms of the bonds.
(d) New Investment Units Issuance Costs
The issuance costs of new investment units are expensed when incurred.
(e) Income Taxes
Deferred tax assets and liabilities are computed based on the difference between the financial statements and
income tax bases of assets and liabilities using the statutory rate.
(f) Real Estate Taxes
Investment properties are subject to various taxes, such as property taxes and city planning taxes. Owners of the
properties are registered by records maintained in each jurisdiction by the local government. The taxes are imposed
on the registered record owner as of January 1 of each year, based on an assessment made by the local government.
When a property is purchased within the calendar year, the taxes for corresponding calendar year are imposed on
the seller. DOI pays the seller the corresponding amount of the taxes for the period from property acquisition date to
December 31 of the calendar year and capitalizes these amounts as acquisition costs of the property, rather than
expensing them. In subsequent calendar years, such taxes on investment properties are charged as operating
expenses in each fiscal period.
The following is a summary of capitalized real estate taxes.
(Thousands of yen)
Capitalized real estate taxes
For the fiscal periods ended
May 31, 2016
53,870
For the fiscal periods ended
November 30, 2016
39,921
(g) Consumption Taxes
Consumption taxes are excluded from transaction amounts. Generally, consumption taxes paid are offset against the
balance of consumption taxes withheld. As such, the excess of payments over amounts withheld is included in the
current assets while the excess of amounts withheld over payments is included in the current liabilities. Non-deductible
consumption taxes relating to investment properties are amortized equally over five years.
(h) Hedge Accounting
DOI enters into derivative transactions for the purpose of hedging risks in the Articles of Incorporation of DOI in
accordance with its general risk management policy. DOI uses interest-rate swaps as hedging instruments in order to
hedge the risk of interest rate fluctuations related to borrowings. Pursuant to Japanese GAAP, DOI applies the special
accounting treatment to interest-rate swaps which qualify for hedge accounting and meet specific criteria. Under the
special accounting treatment, the related differentials paid or received under such swap contracts can be recognized
and included in interest expense or income of the hedged assets or liabilities, and the interest-rate swaps are not
required to be measured at fair value separately. The assessment of hedge effectiveness has been made each fiscal
period except for interest-rate swaps which meet the special criteria.
28
(i) Revenue Recognition
Operating revenues consist of rental revenues including base rents and common area charges, and other operating
revenues such as utility charge reimbursements, parking space rental revenues and other income. Rental revenues
are generally recognized on an accrual basis over the life of each lease. Utility charge reimbursements are recognized
when earned and their amounts can be reasonably estimated.
(j) Accounting Treatment of Trust Beneficiary Interests in Real Estate
For trust beneficiary interests in real estate, all assets and liabilities with respect to assets in trust, as well as all
income generated and expenses incurred with respect to assets in trust, are recorded in the relevant balance sheet
and income statement accounts of the accompanying financial statements.
Note 3 – Cash and Cash Equivalents
Cash and cash equivalents stated on the accompanying balance sheets and statements of cash flows as of
May 31, 2016 and November 30, 2016 consisted of the following:
(Thousands of yen)
Cash and deposits
Cash and deposits in trust
Cash and cash equivalents
As of May 31, 2016
20,940,425
2,097,793
23,038,218
As of November 30, 2016
19,070,683
1,597,182
20,667,865
Note 4 – Financial Instruments
(a) Qualitative Information for Financial Instruments
Policy for Financial Instrument Transactions
DOI raises funds through borrowings, issuance of investment corporation bonds and issuance of investment units
for acquisition and renovation of investment properties, cash distributions of dividends and repayment of bank
borrowings. In financing through interest-bearing debt, DOI raises funds with longer term, fixed-rate and welldiversified maturities to secure stable financing capacity and avoid potential risk of rising interest rates.
Surplus funds are managed considering risk and liquidity, by investing in highly liquid monetary assets and securities
(in principle, deposits).
DOI enters into derivative transactions only for the purpose of hedging interest rate risks arising from liabilities.
Nature and Extent of Risks arising from Financial Instruments and Risk Management
Proceeds from borrowings and investment corporation bonds are used mainly to acquire investment properties and
repay or redeem outstanding borrowings and bonds. These borrowings and bonds are exposed to liquidity risk. Such
risk is managed in ways such as maintaining the LTV ratio at low levels, diversifying maturities, keeping the ratio of
long-term debt to total debt at high levels, and diversifying lenders. For the floating-rate borrowings exposed to the
risk of future interest rate fluctuations, DOI uses derivative transactions (interest-rate swap) as hedging instruments, in
order to avoid interest rate fluctuations and to fix the amount of interest payments for floating-rate borrowings.
DOI evaluates the effectiveness of hedges by the correlation between the change in aggregated amount of cash
flow of the hedging instruments and the change in aggregated amount of cash flow of the hedged items. The
assessment of hedge effectiveness is omitted for the interest-rate swaps which meet the specific criteria under the
special accounting treatment.
Derivative transactions are executed and monitored in compliance with the rules and procedures set forth in the risk
management policy of DOI.
Tenant security deposits including trust accounts are exposed to liquidity risk arising from refunding deposits in the
event of vacating of properties by tenants. Such risk is managed by reserving some parts of the funds.
Bank deposits are used for investing DOI’s surplus funds. These bank deposits are exposed to credit risks such as
bankruptcy of the depository financial institutions. DOI manages credit risk by investing only in short-term deposit and
setting a minimum credit rating requirement for the depository financial institutions (excluding deposits for settlement
purposes).
Supplemental Explanation regarding Fair Value of Financial Instruments
The fair value of financial instruments is based on their quoted market price. When there is no quoted market price
available, fair value is reasonably estimated. Since certain assumptions and factors are reflected in estimating the fair
value, different assumptions and factors could result in a different value. Also, the contractual amounts of derivative
transactions do not represent the market risk involved in these derivative transactions.
VII. Notes to Financial Statements
29
(b) Estimated Fair Value of Financial Instruments
Book value, fair value and difference between the two as of May 31, 2016 and November 30, 2016 were as follows:
(Thousands of yen)
As of May 31, 2016
Assets
Book value
Fair value
Cash and cash
equivalents
Total
23,038,218
23,038,218
23,038,218
As of November 30, 2016
Difference
Book value
Fair value
Difference
–
20,667,865
20,667,865
–
23,038,218
–
20,667,865
20,667,865
–
–
–
–
1,000,000
1,000,000
–
21,200,000
21,292,250
92,250
28,250,000
28,320,007
70,007
5,100,000
5,221,170
121,170
5,100,000
5,184,930
84,930
Long-term debt
180,000,000
180,362,802
362,802
169,950,000
170,032,843
82,843
Total
206,300,000
206,876,222
576,222
204,300,000
204,537,780
237,780
(1,365,242)
(1,365,242)
–
(765,091)
(765,091)
–
Liabilities
Short-term debt
Long-term debt
due within one
year
Investment
corporation bonds
Derivative
transactions (*)
(*)The value of assets and liabilities arising from derivatives is shown at net value and with the amount in parenthesis indicating the net liability
position.
The financial instruments whose fair value is deemed extremely difficult to determine are excluded from the
above table (See Note 2 below).
Notes:
1. Methods to estimate fair value of financial instruments and derivative transactions
Assets:
(1) Cash and cash equivalents
Due to the short maturities, the book value of these assets is deemed a reasonable approximation of the fair
value.
Liabilities:
(1) Short-term debt, long-term debt due within one year and long-term debt
For short-term debt and long-term debt with floating interest rates, their fair value and book value are nearly
identical and there are no significant changes in DOI’s credit risk after borrowing. Therefore, for these items, their
book value is assumed as their fair value. For short-term debt and long-term debt with fixed interest rates, their
fair value is calculated based on the present value of principle and interest cash flows discounted at the current
interest rate which is estimated to be applied if similar new debt is entered into. However, the fair value of certain
floating-rate long term debt that qualifies for the special treatment of interest-rate swaps is calculated based on
the present value of principle and interest cash flows which are processed as a single unit with the interest-rate
swap.
(2) Investment corporation bonds
The fair value of investment corporation bonds are based on their quoted market price.
30
Derivative Transactions:
The Company applies the hedge accounting for all derivative transactions. Contractual amount and fair value
were as follows:
(Thousands of yen)
Hedge
accounting method
Type of
derivative
transaction
Hedged item
As of May 31, 2016
Contracted amount
Fair value (*1)
Due after one year
Total
Deferral hedge
accounting
method
Interest-rate swap
Receive floating/
Pay fixed
Long-term debt
82,800,000
81,300,000
(1,365,242)
Special treatment
for interest-rate
swaps
Interest-rate swap
Receive floating/
Pay fixed
Long-term debt
28,350,000
19,850,000
– (*2)
111,150,000
101,150,000
(1,365,242)
(Thousands of yen)
Hedge
accounting method
Type of
derivative
transaction
Hedged item
As of November 30, 2016
Contracted amount
Fair value (*1)
Due after one year
Total
Deferral hedge
accounting
method
Interest-rate swap
Receive floating/
Pay fixed
Long-term debt
99,600,000
99,600,000
(765,091)
Special treatment
for interest-rate
swaps
Interest-rate swap
Receive floating/
Pay fixed
Long-term debt
28,350,000
14,350,000
– (*2)
127,950,000
113,950,000
(765,091)
(*1)The fair value is provided by financial institutions.
(*2)Fair values of interest-rate swaps with the special treatment are included in fair values of related long-term debt as the interest-rate swaps are
processed as single unit with the hedged long-term debt.
2. Financial instruments whose fair value is deemed extremely difficult to determine
Tenant security deposits including trust accounts (with a book value of 16,870,266 thousand yen as of May 31,
2016 and 16,952,100 thousand yen as of November 30, 2016) that have been deposited by tenants were
excluded from the scope of fair value disclosure because they are not marketable, and the actual deposit period
is not estimable, which in turn makes it difficult to reasonably estimate the future cash flows.
VII. Notes to Financial Statements
31
3. Redemption schedule for monetary claims
(Thousands of yen)
As of May 31, 2016
Cash and cash equivalents
Total
Due after
Due after
Due after
Due after
one to two two to three three to four four to five
years
years
years
years
23,038,218
–
–
–
–
23,038,218
–
–
–
–
Due within
one year
Due after
five years
–
–
(Thousands of yen)
As of November 30, 2016
Cash and cash equivalents
Total
Due after
Due after
Due after
Due after
one to two two to three three to four four to five
years
years
years
years
20,667,865
–
–
–
–
20,667,865
–
–
–
–
Due within
one year
Due after
five years
–
–
4. Redemption schedule for short-term debt, investment corporation bonds and long-term debt
(Thousands of yen)
As of May 31, 2016
Investment corporation bonds
Long-term debt
Total
Due within
one year
Due after
Due after
Due after
Due after
one to two two to three three to four four to five
years
years
years
years
Due after
five years
–
–
– 3,000,000
– 2,100,000
21,200,000 19,400,000 21,500,000 25,000,000 33,300,000 80,800,000
21,200,000 19,400,000 21,500,000 28,000,000 33,300,000 82,900,000
(Thousands of yen)
As of November 30, 2016
Short-term debt
Investment corporation bonds
Long-term debt
Total
32
Due within
one year
Due after
Due after
Due after
Due after
one to two two to three three to four four to five
years
years
years
years
Due after
five years
1,000,000
–
–
–
–
–
–
– 3,000,000
–
– 2,100,000
28,250,000 17,350,000 22,000,000 31,600,000 24,200,000 74,800,000
29,250,000 17,350,000 25,000,000 31,600,000 24,200,000 76,900,000
Note 5 – Tangible Fixed Assets of Investment Properties
Investment properties as of May 31, 2016 and November 30, 2016 consisted of the following:
As of May 31, 2016
Acquisition
cost
Land
Accumulated
depreciation
(Thousands of yen)
As of November 30, 2016
Book value
Acquisition
cost
Accumulated
depreciation
Book value
12,302,227
–
12,302,227
12,302,227
–
12,302,227
3,146,315
(1,807,702)
1,338,613
3,219,522
(1,895,482)
1,324,040
Tools, furniture
and fixtures
18,958
(9,261)
9,697
19,126
(10,007)
9,119
Construction in
progress
3,448
–
3,448
2,661
–
2,661
Land in trust
accounts
351,272,600
–
351,272,600
359,306,652
–
359,306,652
Buildings and
structures
in trust accounts
102,387,898
(19,378,467)
83,009,430
104,787,007
(20,718,843)
84,068,164
Machinery and
equipment
in trust accounts
756,802
(389,890)
366,912
886,637
(411,720)
474,917
Tools, furniture
and fixtures
in trust accounts
187,063
(86,203)
100,860
228,556
(97,496)
131,060
Construction in
progress
in trust accounts
42,086
–
42,086
399,430
–
399,430
Other tangible
fixed assets
in trust accounts
4,337
(4,337)
–
4,337
(4,337)
–
470,121,734
(21,675,860)
448,445,873
481,156,155
(23,137,885)
458,018,270
Buildings and
structures
Total
VII. Notes to Financial Statements
33
Note 6 – Fair Value of Investment and Rental Properties
The book value, net changes in the book value and the fair value of the investment and rental properties were
as follows:
(Thousands of yen)
For the fiscal periods ended
May 31, 2016
For the fiscal periods ended
November 30, 2016
439,123,699
451,114,325
11,990,626
9,207,014
Balance at end of period
451,114,325
460,321,339
Fair value (Note 3)
483,390,000
505,430,000
Book value: (Note 1)
Balance at beginning of period
Change during the period (Note 2)
(Notes)
1. The book value represents the acquisition cost less accumulated depreciation.
2. Significant changes
For the fiscal period ended May 31, 2016, the major reasons of increase are acquisitions of two assets (21,890,000 thousand yen).
The major reason of decrease is sale of two assets (9,127,507 thousand yen) and depreciation (1,726,073 thousand yen).
For the fiscal period ended November 30, 2016, the major reasons of increase are acquisitions of four assets (13,392,000 thousand yen). The major
reason of decrease is sale of “Daiwa Kudan Building” (3,795,174 thousand yen) and depreciation (1,749,716 thousand yen).
3. The fair values as of May 31, 2016 and November 30, 2016 were determined by the sum of appraisal values provided by external real estate
appraisers.
Note 7 – Rental Revenues and Expenses
Rental revenues and expenses for the fiscal periods ended May 31, 2016 and November 30, 2016 were as
follows:
(Thousands of yen)
For the fiscal periods ended
May 31, 2016
For the fiscal periods ended
November 30, 2016
11,947,802
12,687,269
91,981
63,616
12,039,783
12,750,885
868,700
942,415
1,051,127
1,068,009
895,930
1,045,891
17,250
17,056
403,759
456,738
1,726,073
1,749,716
51,363
153,189
Total rental expenses
5,014,202
5,433,014
Income from property leasing
7,025,581
7,317,871
Revenues from property leasing:
Rental revenues
Other revenues related to property leasing
Total revenues from property leasing
Rental expenses:
Consignment expenses
Utilities expenses
Taxes and dues
Insurance expenses
Repair expenses
Depreciation
Other
34
Note 8 – Net Assets
DOI issues non-par value units in accordance with the Investment Trust Act and all of the amounts issued are
designated as stated capital. DOI maintains a minimum of 50 million yen of net assets as required by the
Investment Trust Act.
Note 9 – Short-Term Debt, Long-Term Debt Due Within One Year, Long-Term Debt and
Investment Corporation Bonds
Short-term debt, long-term debt due within one year, long-term debt and investment corporation bonds as of
May 31, 2016 and November 30, 2016 consisted of the following:
(Thousands of yen)
As of May 31, 2016
Unsecured loans due 2017 to 2026, principally
from banks and insurance companies with interest
rates mainly ranging from 0.2% to 1.0%
As of November 30, 2016
201,200,000
199,200,000
0.4% unsecured bond due 2019
3,000,000
3,000,000
1.0% unsecured bond due 2024
2,100,000
2,100,000
206,300,000
204,300,000
Total
(Note) The interest rates presented are daily weighted average interest rates. As for long-term debts which were hedged by interest-rate swaps for the
purpose of avoiding interest rate fluctuation risk, the swapped interest rates are used to calculate daily weighted average interest rates.
The annual maturities of short-term debt, long-term debt and investment corporation bonds as of November
30, 2016 were as follows:
(Thousands of yen)
Due within
one year
Due after
Due after
Due after
Due after
one to two two to three three to four four to five
years
years
years
years
Due after
five years
Short-term debt, long-term debt
29,250,000 17,350,000 25,000,000 31,600,000 24,200,000 76,900,000
and investment corporation bonds
Note 10 – Leases
As Lessor
The future minimum rental revenues under existing non-cancelable operating leases as of May 31, 2016 and
November 30, 2016 were as follows:
(Thousands of yen)
As of May 31, 2016
As of November 30, 2016
Due within one year
10,461,097
9,765,206
Due after one year
17,018,806
16,105,193
Total
27,479,903
25,870,399
VII. Notes to Financial Statements
35
Note 11 – Gain on Sale of Investment Properties
Gain on sale of investment properties for the fiscal period ended May 31, 2016 was as follows:
(Thousands of yen)
For the fiscal period
ended May 31, 2016
Daiwa Shibuya Dogenzaka Building:
Proceeds from sale of investment property
6,400,000
Cost of selling investment property
(4,474,587)
Other expenses related to sale
Gain on sale of investment property
(225,505)
1,699,908
Daiwa Minami-Senba Building:
Proceeds from sale of investment property
3,335,062
Cost of selling investment property
(4,652,920)
Other expenses related to sale
Loss on sale of investment property
(58,350)
(1,376,208)
Gain on sale of investment properties for the fiscal period ended November 30, 2016 was as follows:
(Thousands of yen)
For the fiscal period
ended November 30, 2016
Daiwa Kudan Building:
Proceeds from sale of investment property
4,048,485
Cost of selling investment property
(3,795,174)
Other expenses related to sale
(151,172)
Gain on sale of investment property
102,139
Note 12 – Reduction of Investment Properties Purchased with Government Subsidies
Government subsidies of 32,898 thousand yen were deducted from the acquisition cost of the buildings in
trust as of May 31, 2016 and November 30, 2016.
36
Note 13 – Income Taxes
DOI is subject to Japanese corporate income taxes on all of its taxable income. However, DOI may deduct the
amount distributed to its unitholders from its taxable income when certain requirements, including a requirement
to distribute in excess of 90% of distributable profit for the fiscal period, are met under the Special Taxation
Measure Act of Japan. If DOI does not satisfy all of the requirements as specified in the Act, the entire taxable
income of DOI will be subject to regular corporate income taxes in Japan.
DOI has made distribution in excess of 90% of its distributable profit for each fiscal period in order to be able
to deduct such amount from taxable income.
The following table summarizes the significant difference between the statutory tax rate and DOI’s effective tax
rate for financial statement purposes.
(%)
For the fiscal periods ended
May 31, 2016
For the fiscal periods ended
November 30, 2016
Statutory tax rate
32.31%
31.74%
Deductible cash distributions
(30.85)
(31.74)
Others
(0.02)
0.02
Effective tax rate
1.44%
0.02%
The significant components of deferred tax assets and liabilities as of May 31, 2016 and November 30, 2016
were as follows:
(Thousands of yen)
As of May 31, 2016
As of November 30, 2016
Deferred tax assets:
Accrued enterprise tax
Deferred losses on hedges
Total deferred tax assets
17
12
431,326
267,141
431,343
267,153
75,806
75,806
–
25,425
75,806
101,231
355,537
165,922
Deferred tax liabilities:
Reserve for reduction entry
Deferred gains on hedges
Total deferred tax liabilities
Net deferred tax assets
VII. Notes to Financial Statements
37
Note 14 – Per Unit Information
Information about earnings per unit for the fiscal periods ended May 31, 2016 and November 30, 2016 and net
assets per unit as of May 31, 2016 and November 30, 2016 were as follows:
(Yen)
For the fiscal periods ended
May 31, 2016
For the fiscal periods ended
November 30, 2016
10,847.51
10,800.73
484,000
492,984
Earnings per Unit:
Net income per unit
Weighted average number of units outstanding (units)
(Yen)
As of May 31, 2016
Net Assets per Unit
511,819
As of November 30, 2016
515,231
The computation of earnings per unit is based on the weighted average number of units outstanding during the
period. The computation of net assets per unit is based on the number of units outstanding at each period end
as stated on the balance sheets.
The diluted net income per unit is not stated as there are no diluted investment units.
There is no amount that is not available to ordinary unitholders.
Note 15 – Distribution Information
DOI’s Articles of Incorporation stipulate that DOI is required to make cash distribution in excess of 90% of
distributable profit as defined in the Special Taxation Measure Act of Japan for each fiscal period. Therefore, the
total amount of dividends that DOI has determined to pay out is 5,085,872,000 yen for the fiscal period ended
May 31, 2016 and 5,324,708,955 yen for the fiscal period ended November 30, 2016 that are the largest integral
multiple of 484,000 and 497,869, the number of units outstanding as of May 31, 2016 and November 30, 2016,
respectively, after deducting provision of reserve for reduction entry as stipulated in Article 66-2 of the Special
Taxation Measure Act of Japan. Furthermore, DOI does not pay out dividends that exceed accounting profits as
outlined in Article 32-2 of DOI’s Articles of Incorporation.
(Yen)
For the fiscal periods ended
May 31, 2016
For the fiscal periods ended
November 30, 2016
Ⅰ Unappropriated retained earnings
5,250,225,912
5,324,776,691
Ⅱ Cash distributions declared
5,085,872,000
5,324,708,955
164,162,797
–
191,115
67,736
Ⅲ Voluntary Retained Earnings
Provision of reserve for reduction entry
Ⅳ Retained earnings brought forward
38
Cash distributions are declared by the board of directors after the end of each period. Such distributions are
payable to unitholders of record at the end of each period. Information of cash distributions per unit and the
board of directors meeting dates when the distributions were proposed and approved were as follows:
(Yen)
For the fiscal periods ended
May 31, 2016
For the fiscal periods ended
November 30, 2016
10,508
10,695
July 15, 2016
January 20, 2017
Cash distributions per unit
Board of directors meeting dates
Note 16 – Related-Party Transactions
Not applicable.
Note 17 – Segment Information
For the fiscal periods ended May 31, 2016 and November 30, 2016
Segment Information
Segment information has been omitted as DOI has only one segment, which is property leasing business.
Related Information
Information about Products and Services
Disclosure of this information has been omitted as operating revenues to external customers for a single
product/service category account for more than 90% of the operating revenues on the statements of income
and retained earnings.
Information about Geographic Areas
(1) Operating revenues
Disclosure of this information has been omitted as domestic operating revenues account for more than 90% of
total operating revenues.
(2) Investment properties
Disclosure of this information has been omitted as domestic investment properties account for more than 90%
of the book value of the total investment properties.
Information about Major Tenants
Disclosure of this information has been omitted as there is no tenant that accounts for 10% or more of the
operating revenues recorded in the statements of income and retained earnings.
VII. Notes to Financial Statements
39
Note 18 – Significant Subsequent Events
Acquisition of Asset
DOI acquired the trust beneficial interest in real estate on December 21, 2016 as described below.
Overview of the asset
40
Asset type
Trust beneficial interest in domestic real estate
Property name
Shin Kanda Mikuracho Building
Location
5-1 Kanda Mikura-cho, Chiyoda-ku, Tokyo
Acquisition price
1,592,000 thousand yen (excluding acquisition-related costs, consumption taxes, etc.)
Agreement date
December 15, 2016
Acquisition date
December 21, 2016
Seller
OH Real Estate Management Co., Ltd.
VIII. Independent Auditor’s Report
VIII. Independent Auditor’s Report
41
IX. Investor Information
History of Investment Unit Price
18,000 (units)
(yen) 900,000
Investment unit price (left axis)
800,000
Trading volume (right axis)
16,000
700,000
14,000
600,000
12,000
500,000
10,000
400,000
8,000
300,000
6,000
200,000
4,000
100,000
2,000
0
0
2014 2015
Dec. Jan.
Feb.
Mar.
Apr.
May
June
July
Aug. Sept. Oct.
Nov.
2016
Dec. Jan.
Feb.
Mar.
Apr.
May
June
July
Aug. Sept. Oct.
Nov.
Overview of Investment Units and Unitholders (as of November 30, 2016)
■ No. of Investment Units by Investor Type
22nd
Fiscal Period
Individuals/others
22,035 units (4.4%)
Financial institutions
218,952 units (44.0%)
■ No. of Unitholders
by Investor Type
Foreigners 61,792 units (12.4%)
Total: 497,896 units
Other domestic corporations 191,428 units (38.4%)
21st
Fiscal Period
Individuals/others
20,292 units (4.2%)
Financial institutions
212,202 units (43.8%)
Securities firms 3,662 units (0.7%)
Foreigners 53,390 units (11.0%)
Total: 484,000 units
Other domestic corporations 191,340 units (39.5%)
Name of Investor
1. Daiwa Investment Management Inc.
128,905 25.89%
2. Japan Trustee Services Bank, Ltd. (Trust Account)
70,700 14.20%
3. Daiwa Securities Group Inc.
59,321 11.91%
5. The Master Trust Bank of Japan, Ltd. (Trust Account)
6.
The Nomura Trust and Banking Co., Ltd.
(Investment Trust Account)
52,849 10.62%
51,052 10.25%
17,676
3.55%
7. STATE STREET BANK AND TRUST COMPANY 505012
5,786
1.16%
8. CBLDN STICHTING PENSIOEN FONDS METAAL EN TECHNIEK
4,295
0.86%
BNP PARIBAS SECURITIES SERVICES
SYDNEY/JASDEC/AUSTRALIAN RESIDENTS
4,217
0.85%
STATE STREET BANK - WEST PENSION
10.
FUND CLIENTS - EXEMPT 505233
3,643
9.
0.73%
(Note) The percentage share figures are rounded to the second decimal place
42
101
(1.1%)
Other domestic
corporations
163
(1.8%)
Foreigners
216
(2.4%)
Securities firms
15
(0.2%)
Total
9,186
IR Calendar
Number of
Percentage
Units Owned
Share
(units)
Trust & Custody Services Bank, Ltd.
(Securities Investment Trust Account)
Financial institutions
Securities firms 6,776 units (1.4%)
Top Ten Unitholders (as of November 30, 2016)
4.
8,691
(94.6%)
Individuals/others
January 20, 2017 : Announcement of financial results
22nd Fiscal Period
February 14, 2017 : Sending of Japanese version Business
Report for 22nd Fiscal Period
(Statement of Financial Performance)
February 15, 2017 : Start paying distributions for
22nd Fiscal Period
Nov.
End of
fiscal period
Aug.
July
Jan.
End of
fiscal period
Feb.
May
July 2017: Announcement of financial results for
23rd Fiscal Period
August 2017 : Sending of Japanese version Business
Report for 23rd Fiscal Period
(Statement of Financial Performance)
August 2017 : Start paying distributions for
23rd Fiscal Period
Investor Memo
End of fiscal period
May 31 and November 30 of each year
General Meeting of Unitholders
Held at least once every two years
Date for finalizing Unitholders with voting rights
for the General Meeting of Unitholders
Date publicly announced beforehand
Reference date for finalizing payment of
distributions
May 31 and November 30 of each year
(distributions are paid within three months of this reference date)
Listed financial instruments exchange
Tokyo Stock Exchange (securities code: 8976)
Newspaper in which notice is posted
Nikkei Inc.
Manager of Unitholder Registry, etc.
Sumitomo Mitsui Trust Bank, Limited, 1-4-1 Marunouchi, Chiyoda-ku, Tokyo 100-8233
Office handling administrative affairs
Transfer Agency Department of Sumitomo Mitsui Trust Bank, Limited, 2-8-4 Izumi, Suginami-ku, Tokyo
168-0063 Phone 0120-782-031 (toll-free in Japan)
Service counter
Head Office and All branches of the Sumitomo Mitsui Trust Bank nationwide
Provision of Information via Website
Daiwa Office Investment Corporation conducts information distribution via its website as an important tool for IR activities. DOI also provides an
e-mail delivery service, “IR mail Delivery Service,” which informs the subscribers of updates in website content such as press release
announcements via e-mail free of charge. The website will be continually enhanced and enriched so that the current situation and future
strategies of DOI are clearly communicated.
Daiwa Office Investment Corporation
http://www.daiwa-office.co.jp/en/
Important information is
distributed via e-mail. Please
access and follow the simple
steps if you wish to receive
our IR mail Delivery Service.
IX. Investor Information
43
The Daiwa Office Investment Corporation logo symbolizes hospitality with an open door and the desire to be a bright
and open investment corporation. We will continue to aim to be a highly-transparent investment corporation that is
further cherished and trusted by our investors and tenants.