Presentation Material for the Fourth Fiscal Period (Ended ...one-reit.com/file/en-term-cda370988be85e70c7955c7732d7525696c… · Dividends per unit were ¥11,822, ¥822 higher than

http://www.sia-reit.com/en/index.html Securities code: 3290

Presentation Material for the Fourth Fiscal Period (Ended August 2015) October 16, 2015

1 SIA REIT Presentation Material for the Fourth Fiscal Period (Ended August 2015)

Table of Contents

Fourth Fiscal Period Topics 1. Fourth Fiscal Period Topics (Ended August 2015) 3

Overview of Financial Results for the Fourth Fiscal Period (Ended August 2015)

1. Statement of Income 7

2. Balance Sheet 8

3. Management Status 9

4. Financial Status 17

Earnings Forecasts for the Fifth Fiscal Period (Ending February 2016) and Sixth Fiscal Period (Ending August 2016)

1. Earnings Forecasts for the Fifth Fiscal Period (Ending February 2016) and Sixth Fiscal Period (Ending August 2016)

19

2. Future Outlook 20

Future Growth Strategies 1. SIA REIT’s Growth Cycle, Challenges and Efforts 22

2. External Growth Strategy 23

3. Investment in Bridge Fund/Acquisition of Preferential Negotiation Rights 24

4. Financial Strategy 26

1

2

3

4

Appendix About the SIA Group 28 Support of Sponsor and Support Companies 32 Statement of Income 33 Balance Sheet 34 Characteristics of SIA REIT 35 Portfolio List 36 Portfolio Map 37 Overview of Individual Properties 38 Environmental Initiatives 42 List of Appraisal Values 43 Lease Business Revenue and Expenditure by Property 44 List of Borrowings 46 Unitholder Status 47 Governance System and Management Fee Scheme 48 Overview of SIA REIT 49 Overview of the Asset Management Company 50

5


F o u r t h F i s c a l P e r i o d To p i c s ( E n d e d A u g u s t 2 0 1 5 )

1

SIA REIT Presentation Material for the Fourth Fiscal Period (Ended August 2015) 3

1 – (1) Fourth Fiscal Period Topics (Ended August 2015) (1)

1 Fourth Fiscal Period Topics (Ended August 2015)

The portfolio (19 properties) occupancy rate was 96.3% at the end of the fourth fiscal period (up 4.9% from the end of third fiscal period). In terms of the 18 properties excluding J Tower, the occupancy rate remained at 96% or higher throughout the fourth fiscal period, realizing stable occupancy.

As to SIA Kanda Square, which was a property at issue, the office floors of 650 tsubos vacated have been leased at an early stage and office floors are scheduled to be fully occupied from December 2015.

Realized upward rent revisions in the fourth fiscal period by capturing bottoming out and recovering trend of rents. Moving forward, will continue making efforts to achieve upward rent revisions.

<Properties at issue going forward> For J Tower, at which occupancy rate had recovered to 94.7% at the end of the fourth fiscal period, a notice of termination was received from a

major tenant on September 30, 2015 (1,435 tsubos: 13.8% of the total leasable area of J Tower, scheduled for termination on March 31, 2016). Will focus on sourcing the next tenant at an early stage by showcasing its strengths such as being able to supply a large office space and having an excellent dining facility brought by the opening of a cafeteria.

As to three Minami-Shinagawa buildings, which have room for improving a total occupancy rate, will also re-strengthen leasing activities to raise the occupancy rate to an appropriate vacancy level.

Internal Growth

Obtained an opportunity to acquire Glass City Motoyoyogi through a unique route of the Asset Management Company. Utilizing the sponsor support, acquired the property in September 2015 through a bridge fund which was formed by the SIA Group.

SIA REIT gained preferential negotiation rights for property acquisition while investing in the bridge fund. Continued sourcing property information for future public offering, and aimed to develop a portfolio which could secure quality of properties and

yields (candidate properties for acquisition).

External Growth

The LTV at the end of the fourth fiscal period was 51.8% after scheduled repayment of ¥199 million yen during the fiscal period. (51.9% at the end of the third fiscal period).

Refinanced ¥4,895 million yen on October 13, 2015 and part of existing short-term borrowings were refinanced with long-term borrowings.

Financial Strategy


1 – (1) Fourth Fiscal Period Topics (Ended August 2015) (2) Dividends per unit were ¥11,822, ¥822 higher than the initial forecast of ¥11,000, continuing to achieve earnings forecasts since listing Balance of 19 properties in the portfolio excluding an impact of gain/loss on sale of real estate, etc. (¥58 million) in the third fiscal period showed

increases in revenue and profit compared to the fiscal period ended February 2015 (the third fiscal period)

Actual Performance and Dividends Dividends per Unit First Fiscal

Period (Ended Feb.

2014)

Second Fiscal Period (Ended Aug.

2014)

Third Fiscal Period

(Ended Feb. 2015)

Fourth Fiscal Period (Ended Aug. 2015)

Actual Actual Actual Forecast Actual

Operating revenue (millions of yen) 2,493 3,179 3,056 3,019 3,053

Operating profit (millions of yen) 1,199 1,326 1,227 1,143 1,198

Recurring profit (millions of yen) 368 1,034 916 827 888

Net income (millions of yen) 366 1,033 915 826 887

Dividends per unit (yen) 4,884 13,760 12,196 11,000 11,822

Number of properties at period end

(cases) 20 20 19 19

Total acquisition price (millions of yen) 74,726 74,726 74,347 74,347

Portfolio occupancy rate at period end 88.5% 91.4% 91.4% 96.3%

Leasing NOI (millions of yen) 1,641 1,891 1,878 1,913

1 Fourth Fiscal Period Topics (Ended August 2015)

(Unit: Millions of yen) (Unit: Yen)

4,327

13,331

11,800 11,000

4,884

13,760

12,196 11,822

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

1st FP 2nd FP 3rd FP 4th FP

Forecast Actual

Comparison with forecast +7.5%


BLANK PAGE


O v e r v i e w o f F i n a n c i a l R e s u l t s f o r t h e F o u r t h F i s c a l P e r i o d ( E n d e d A u g u s t 2 0 1 5 )

2


Overview of Financial Results for the Fourth Fiscal Period (Ended August 2015) 2

FP ended Aug. 2015 (4th FP)

earnings forecast


results (actual) Comparison Third fiscal period

results (actual)

Operating revenue 3,019 3,053 +34 3,056

Operating profit 1,143 1,198 +55 1,227

Recurring profit 827 888 +61 916

Net income 826 887 +61 915

Dividends per unit ¥11,000 ¥11,822 +¥822 ¥12,196

Comparison Major factors (breakdown)

Operating revenue +34 Other revenue +34

Expenses related to rent business +6

Utilities +32 Repairs -17

Property management fees -10

Depreciation +2

General and administrative expenses +11 Reduction of expenses +11

Operating profit +55

Non-operating income +2

Non-operating expenses +4 Difference with financial costs +4

Recurring profit +61

Corporate tax, etc. +0

Net income +61

(Unit: Millions of yen) (Unit: Millions of yen)

2 – (1) Statement of Income Dividends per unit were ¥11,822, ¥822 higher than the initial forecast of ¥11,000 (+7.5%) due to recording of revenue from restoration to original

conditions expenses, difference in utilities expenses, curbing of general and administrative expenses, etc.

(Unit: Yen)

(Note) Amounts are rounded down to the nearest million yen or nearest yen.

【Dividends per unit: Differences between 4th FP results and forecast】

Initial forecast for 4th FP

Results for 4th FP

Difference with expenses related to

rent business

Reduction of general and administrative

expenses

Other

Difference with lease business

revenues

11,000

11,822

+463 +85 +158 +57 +59

Difference with financial costs

Fourth Fiscal Period Results and Comparison with Earnings Forecast (April 14, 2014)

Factors in Profit Change (in comparison with forecast)


FP ended Feb. 2015 (3rd FP)


Comparison

Ass

ets

Current assets 6,267 6,204 -63

Cash and deposits 6,015 5,953 -61

Other 252 250 -1

Noncurrent assets 74,390 74,288 -102 Buildings and structures, buildings and structures in trust 32,755 33,148 +393

Accumulated depreciation -1,188 -1,619 -431

Land and land in trust 39,190 39,190 －

Other 3,633 3,568 -64

Total assets 80,658 80,492 -165

FP ended Feb. 2015 (3rd FP)


Comparison

Liab

ilitie

s

Current liabilities 6,458 6,460 +1 Short-term loans payable and current portion of long-term loans payable 5,295 5,282 -12

Other 1,163 1,177 +13

Noncurrent liabilities 40,645 40,506 -139

Long-term loans payable 36,597 36,410 -187

Tenant lease and security deposits 4,047 4,096 +48

Total liabilities 47,103 46,966 -137

Net

as

sets

Unitholders’ equity 33,554 33,526 -28

Unitholders’ capital 32,638 32,638 －

Surplus 915 887 -28

Total net assets 33,554 33,526 -28

Total liabilities and net assets 80,658 80,492 -165

(Note) Amounts are rounded down to the nearest million yen.

Noncurrent assets

Increase due to CAPEX (installment of cafeteria facility at J Tower) + ¥393 million

Liabilities

Balance of borrowings (LTV = Balance of borrowings ÷ Total assets × 100 = 51.8%) ¥41,692 million

Net assets

Net assets *Net assets per unit: ¥446,422 *NAV per unit(Note 2): ¥464,243

¥33,526 million

(Unit: Millions of yen)

2 – (2) Balance Sheet

Noncurrent assets

Balance sheet amounts for 19 properties (appraisal values at the end of the fourth fiscal period)

¥74,085 million (¥76,312 million)

Leasehold, etc. ¥3,365 million

(Note 2) Calculated with the formula: (Unitholders’ capital + Total appraisal value of real estate – Total book value of real estate) ÷ Fiscal period’s outstanding number of investment units

Balance Sheet Major Factors for Change

Main Content

Interest-bearing debt (current liabilities and noncurrent liabilities)

Decrease in interesting-bearing debt due to scheduled repayment - ¥199 million



2 – (3) Management Status: Occupancy Rate

Type/area No. Property name

First fiscal period

Second fiscal period

Third fiscal period Fourth fiscal period

End of Feb. 2014

End of Aug. 2014

End of Feb. 2015

End of Mar. 2015

End of Apr. 2015

End of May 2015

End of June 2015

End of July 2015

End of Aug. 2015

Offi

ce b

uild

ing

Toky

o m

etro

polit

an a

rea

OT-1 J Tower 76.0% 77.7% 76.4% 76.4% 76.4% 76.4% 92.1% 94.7% 94.7% OT-2 SIA Kanda Square 99.0% 100.0% 100.0% 100.0% 99.2% 99.2% 100.0% 59.1% 71.5% OT-3 Tachikawa Nishiki-cho Building 96.8% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% OT-4 CP10 Building 85.2% 100.0% 70.2% 70.2% 85.1% 100.0% 100.0% 100.0% 90.8% OT-5 Yokohama AP Building 100.0% 100.0% 100.0% 100.0% 88.3% 88.3% 100.0% 100.0% 100.0% OT-6 Yushima First Genesis Building 47.2% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% OT-7 Miyaji Building 100.0% 94.4% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% OT-8 36 Sankyo Building 86.9% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% OT-9 Minami-Shinagawa JN Building 93.8% 72.1% 85.2% 85.2% 88.6% 88.6% 88.6% 88.6% 88.6% OT-10 Minami-Shinagawa N Building 88.8% 81.4% 84.3% 92.9% 96.4% 96.4% 96.4% 96.4% 96.4% OT-11 Minami-Shinagawa J Building 93.9% 100.0% 100.0% 100.0% 100.0% 96.8% 96.8% 96.8% 100.0% OT-12 MY Atsugi Building 94.3% 96.2% 93.2% 94.6% 94.6% 94.6% 94.6% 97.1% 97.1% OT-13 Hachioji SIA Building 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Average occupancy rate 85.3% 87.3% 86.8% 87.4% 87.9% 88.4% 95.4% 94.0% 94.5%

Ord

inan

ce-

desi

gnat

ed

citie

s, e

tc. OO-1 Central Shin-Osaka Building 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

OO-2 Karasuma Plaza 21 79.1% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% OO-3 Stoke Building Nagoya 78.4% 87.9% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% OO-4 MY Kumamoto Building 95.7% 100.0% 100.0% 95.5% 100.0% 100.0% 100.0% 100.0% 98.1%

Average occupancy rate 88.3% 97.5% 100.0% 99.4% 100.0% 100.0% 100.0% 100.0% 99.7% Average occupancy rate 86.1% 89.8% 90.1% 90.4% 90.9% 91.2% 96.5% 95.5% 95.8%

Ret

ail

faci

litie

s

R-1 fab Minami-Osawa 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

R-2 Niigata Higashibori-dori Parking Building 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

R-3 NEXT21 94.3% 93.6% Average occupancy rate 97.5% 97.2% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Overall average occupancy rate 88.5% 91.4% 91.4% 91.7% 92.1% 92.4% 97.0% 96.1% 96.3%

Reference: Average occupancy rate excluding J Tower 92.4% 95.7% 96.7% 97.1% 97.7% 98.1% 98.7% 96.5% 96.9%


The portfolio occupancy rate at the end of the fourth fiscal period was 96.3% (up 4.9% from the third fiscal period). Leasing of J Tower by a major tenant contributed to the improvement in the portfolio occupancy rate

Moving forward, will focus on leasing of J Tower where a major tenant is scheduled to move out and of Minami-Shinagawa buildings where there is room for occupancy rate to improve

Occupancy Rate



Property Name J TOWER

Location Fuchu City, Tokyo

Completed March 1992

Number of Floors B2/18F

Total Leasable Floor Area 34,291.48m2

Occupancy Rate (end of 4th FP) 94.7%

2 – (3) Management Status: J TOWER (As of August 31, 2015)

Occupancy rate has improved to the 94% range. Focus on leasing of the section for which a notice of termination was received A lease agreement for 1,632 tsubos began in June 2015, raising the occupancy rate to

92.1%. In addition, a new agreement from an outside party (148 tsubos) and an agreement for

increased floor area from an existing tenant (296 tsubos) have been concluded in the fourth fiscal period. The occupancy rate is expected to reach 98.9% at the end of September 2015 when these agreements begin. Received a notice of termination at the end of March 2016 (1,435 tsubos, or 13.8% of

the total leasable area of J Tower). Will focus on sourcing the next tenant.

Status of Leasing and Tenants

There were some inquires and previewing at J Tower by a large relocation prospect and a middle-sized (several hundred tsubos) tenant prospect whom we kept collecting information on. Will work to source the tenant by advertising that it can offer a large space in the Fuchu

area and can adjust leasing area by half-floor (233 tsubos).

Future Policy

Opening of a cafeteria and continuation of renovation of common spaces A cafeteria with lounge features opened in August 2015. Aims to increase the number of

users going forward. Renovation of common spaces on the 2nd to 6th floors of the high-rise building will be

conducted to complete renewal of common spaces on all floors from the 2nd floor and above of the high-rise building by the end of the sixth fiscal period.

Strategic Value Enhancing Investment

76.4% 76.4% 76.4% 76.4%

92.1%

94.7% 94.7% 98.9%

96.7%

82.3%

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

Feb.2015

Mar.2015

Apr.2015

May2015

June2015

July2015

Aug.2015

Sept.2015

(forecast)

Dec.2015

(forecast)

Apr.2016

(forecast)

(Note) The forecast figure is calculated based on the assumptions of the earnings forecasts.


Space for tenants’ emergency power

generators

Hovering Space

Fan Room

Machine Room Emergency EV lobby

Air-conditioning Machine Room

Shop

Shop/Office

Cooling Tower Space

Freezer room Emergency power generator

Loop-type dual line power receiving equipment

District cooling and heating equipment

Parking

Renovation of common spaces

7F-18F

2F-6F

Completed

Scheduled

Parking facility ▪ Completed additional work (February 2015) ▪ Increased space for 12

vehicles

Completed

Installation of cafeteria facility ▪ Opened in August 2015

Completed


▌Minami-Shinagawa JN Building

Property Name Minami-Shinagawa JN Building

Location Shinagawa Ward, Tokyo

Completed July 1990



Occupancy Rate 88.6%

Property Name Minami-Shinagawa N Building


Completed July 1994




Property Name Minami-Shinagawa J Building


Completed July 1992




2 – (3) Management Status: Minami-Shinagawa JN Building/N Building/J Building

▌Minami-Shinagawa N Building ▌Minami-Shinagawa J Building (As of August 31, 2015)

Stable occupancy during the fourth fiscal period Lease agreements of new tenants at JN Building and N Building began in the fourth fiscal

period, and the overall occupancy rate for the three properties remained at 91% or higher. JN Building: The lease agreement for the first floor (147 tsubos) ended in September 2015.

Showcased the vacated section, which is directly accessible from outside, to those looking for showroom spaces or to businesses requiring frequent loading/unloading. N Building: Expected occupancy rate is likely to reach 98% with progress in leasing. J Building: Assumed to continue to maintain 100% occupancy.

Status of Tenants

Advertised its capability to accommodate small- (20 to 40 tsubos) to medium- (over 100 tsubos) scale leasing needs, its excellent access to both central Tokyo and Kawasaki/Yokohama areas, etc. A property tour was organized in October 2015 to boost attraction of outside tenants. Aims to

conclude agreements with a rent unit price level that will maintain the current average rent of each property.

Leasing Plan

(Note) The forecast figure is calculated based on the assumptions of the earnings forecasts.


85.2% 88.6%

81.0% 81.0%

84.3%

96.4% 98.0% 98.0%

100.0% 100.0% 100.0%

88.4% 91.4%

94.0% 93.3% 93.3% 93.3% 94.0%

91.5% 91.5%

75.0%

80.0%

85.0%

90.0%

95.0%

100.0%

Feb.2015

Mar.2015

Apr.2015

May2015

June2015

July2015

Aug.2015

Nov.2015

(forecast)

Feb.2016

(forecast)

Minami-Shingawa JN Building Minami-Shingawa N BuildingMinami-Shingawa J Building All 3 properties


Property Name SIA Kanda Square

Location Chiyoda Ward, Tokyo

Completed April 2007

Number of Floors 10F



Property Name CP10 Building

Location Taito Ward, Tokyo

Completed March 1989




2 – (3) Management Status: Status of Other Properties Subject to Leasing Enhancement

▌SIA Kanda Square ▌CP10 Building

Status of contracted leasing after tenant departure A leasing agreement for the section vacated by Yayoi at the end of June 2015 (650 tsubos) was concluded, and the

office floors (total of 1,238 tsubos) are scheduled to be fully occupied from December 2015. Leasing status of office floors saw improvements in tenant diversification as three tenants signed agreements for leasing

about 200-250 tsubos each, instead of the previous case of one tenant occupying a large floor area. Needs for relocation from a building owned by the parent company in the Kanda area, relocation for the consolidation

purpose, etc. were taken in. The property’s having had acquired the CASBEE certification was also recognized in the relocation case in the Kanda area.

Aims for early backfilling of the shop section on the first floor Although occupancy rate improved to 100% during the fourth fiscal period,

tenant of the shop on the first floor vacated at the end of July 2015, lowering the occupancy rate at the end of the fourth fiscal period to 90.8%. Negotiation with the next tenant candidate is ongoing. Aims for recovery to

full occupancy in the fifth period.

100.0%

59.1%

71.5% 71.5%

87.0% 87.0%

100.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

June2015

July2015

Aug.2015

Sept.2015

(forecast)

Oct.2015

(forecast)

Nov.2015

(forecast)

Dec.2015

(forecast)

(Note) The forecast figures are calculated based on the assumptions of the earnings forecasts.

(As of August 31, 2015)

70.2% 70.2%

85.1%

100.0% 100.0%

100.0%

90.8%

60.0%

70.0%

80.0%

90.0%

100.0%

Feb.2015

Mar.2015

Apr.2015

May2015

June2015

July2015

Aug.2015



SIA REIT Presentation Material for the Fourth Fiscal Period (Ended August 2015)

795

4,180

766

3,187

(1,663)

(2,916)

(705) (1,231)

(4,000)

(3,000)

(2,000)

(1,000)

0

1,000

2,000

3,000

4,000

5,000


Move-in Move-out Move-in/Move-out(deduction)

(Unit: Tsubo)

13

First Fiscal Period

Floor area (Number of tenants)

Second Fiscal Period Floor area

(Number of tenants)

Third Fiscal Period Floor area

(Number of tenants)

Fourth Fiscal Period Floor area

(Number of tenants)

Increased - ( - )

- ( - )

- ( - )

139 tsubos ( 2 )

Unchanged 726 tsubos (10)

5,798 tsubos (57)

4,777 tsubos (33)

5,763 tsubos ( 60 )

Decreased 232 tsubos (2)

2,431 tsubos (4)

255 tsubos (2)

142 tsubos ( 2 )

Total 959 tsubos (12)

8,229 tsubos (61)

5,033 tsubos (35)

6,044 tsubos ( 64 )

First Fiscal Period

Floor area (Number of tenants)

Second Fiscal Period Floor area

(Number of tenants)

Third Fiscal Period Floor area

(Number of tenants)

Fourth Fiscal Period Floor area

(Number of tenants)

Move-in 795 tsubos (17)

4,180 tsubos (25)

766 tsubos (13)

3,187 tsubos (18)

Move-out 1,663 tsubos (9)

2,916 tsubos (12)

705 tsubos (9)

1,231 tsubos (10)

Change -867 tsubos +1,264 tsubos +61 tsubos +1,955 tsubos

2 – (3) Management Status: Analysis of Tenant Trends

Move-In/Move-Out Rent Renewal Trends


24.3% 29.5% 5.1% 2.4%

75.7% 70.5%

94.9% 95.3%

2.3%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%


Decrease Unchanged

(Note) Ratios are calculated based on floor area.


Name of tenant Leased floor

area (m2) (Note 1)

% of total leasable floor

area (Note 2) Property occupied

1 KDDI Corporation(Note 3) 6,016.86 4.6% J Tower/Karasuma Plaza 21

2 TOHO Cinemas, Ltd. 5,725.14 4.4% fab Minami-Osawa

3 American Family Life Assurance Company of Columbus 5,396.58 4.1% J Tower

4 Tokyo Toshi Service Co., Ltd. 4,303.01 3.3% J Tower

5 Japan Radio Co., Ltd. 3,854.70 3.0% J Tower

6 Nakanihon Engineering Consultants Co., Ltd. 3,033.12 2.3% Stoke Building Nagoya

7 AGREX Inc. 2,544.00 2.0% J Tower

8 TDS Co, Ltd. 2,324.29 1.8% 36 Sankyo Building

9 National Federation of Workers and Consumers Insurance Cooperatives 2,312.82 1.8% J Tower

10 Yamazaki Baking Co., Ltd. 1,746.59 1.3% J Tower

Total of top 10 tenants 37,257.11 28.6%

(Note 1) The “Leased floor area” column shows the floor area indicated in the lease agreements with each tenant effective as of August 31, 2015. Leased floor area for Niigata Higashibori-dori Parking Building, parking spaces and land provided for other uses are not included.

(Note 2) The “% of total leasable floor area” column shows each tenant’s percentage of the total leasable floor area of all the assets SIA REIT owns and is rounded to the first decimal place.

(Note 3) The tenant leases 4,744.46m2 at J Tower and 1,272.40m2 at Karasuma Plaza 21 as of August 31, 2015. However, a notice of termination for all agreements pertaining to J Tower was received on September 30, 2015, and the lease agreement is scheduled to be terminated on March 31, 2016.

Office buildings

Retail facilities Entire portfolio Tokyo

metropolitan area Ordinance-

designated cities, etc.

End of 1st FP ¥14,309/tsubo ¥9,867/tsubo ¥13,187/tsubo ¥6,119/tsubo ¥11,522/tsubo

End of 2nd FP ¥13,892/tsubo ¥9,750/tsubo ¥12,785/tsubo ¥6,101/tsubo ¥11,265/tsubo

End of 3rd FP ¥13,755/tsubo ¥9,719/tsubo ¥12,650/tsubo ¥5,528/tsubo ¥11,624/tsubo

End of 4th FP ¥12,935/tsubo ¥9,738/tsubo ¥12,114/tsubo ¥5,521/tsubo ¥11,213/tsubo

Change from end of previous period - ¥820 + ¥19 - ¥536 - ¥73 -¥411


2 – (3) Management Status: Analysis of Tenant Trends

(Note) “Average Rent” is calculated by dividing the sum of each tenant’s monthly rent indicated in their lease agreements and the common space charges by the leased floor space and does not include floor area in which lease agreements are yet to begin or where lease agreements are not yet concluded.

Average Rent Top Tenants

¥13,187 ¥12,785 ¥12,650

¥12,114

¥6,119 ¥6,101 ¥5,528 ¥5,521

¥11,522 ¥11,265 ¥11,624

¥11,213

4,000

6,000

8,000

10,000

12,000

14,000

End of 1st FP End of 2nd FP End of 3rd FP End of 4th FP

Office buildings Retail facilities Entire portfolio



A. Initial quoted amount (Note 1)

B. Order amount (Note 2)

C. Amount of reduction

(C = A − B)

Reduction rate (C / A)

Approx. ¥530 million



Approx. ¥16.2%

(Note 1) The initial quoted amount is the quoted amount initially submitted by contractors upon implementing the work.

(Note 2) The order amount is the actual order amount produced following verification, assessment and negotiation.

(Note 3) Only constructions of more than ¥100,000 are subject to assessment.

2 – (3) Management Status: Efforts Toward Maintaining and Increasing Property Value

¥63 million in repairs and ¥393 million in CAPEX against ¥431 million in depreciation in the fourth fiscal period

Conducted strategic value enhancing investment with understanding of issues of each property, by taking advantage of sponsor’s know-how on facility management

Examples of Major Cases during the Fourth Fiscal Period

Effects of Assessment of Construction Costs, Etc. during the Fourth Fiscal Period


▌PLASIA KITCHEN opened in J Tower

Name PLASIA KITCHEN

Seating capacity 226 seats

Features

A space designed under the concept of making it an “oasis for people working in J Tower and people residing in the area” for use not only at lunchtime but also as a change of pace from work, etc. by setting up a lounge with sofas in an open space and offering not only a lunch menu of six daily specials but also a café, light meals, etc.

▌Air-conditioning renewal work at Tachikawa Nishiki-cho Building Reduction of costs due to renewal works Reduced power consumption through optimum operation in accordance with the

required load, by changing operational adjustment from entire-building control to control by half-floor space of every floor Reduced water consumption due to disappearance of a cooling tower Lowered maintenance costs of air-conditioning units

Before After

Operational adjustment of an entire-building

Operational adjustment by half-floor space of every floor


2 – (3) Management Status: Strengthening Earning Ability and Streamlining Property Operational Management

Along with efforts to improve occupancy rates, an issue since listing, worked to strengthen earning ability of the portfolio and to establish efficient property operational management


Reviewed electric supply companies for 18 properties out of a total of 19 properties owned by SIA REIT (excluding one property of which electricity bills are borne by tenants). Changed electric supply companies for 12 properties which could expect reduction in

electricity bills by changing companies. One property successfully reduced electricity bill by negotiating with a current electric supply company and reaching an agreement to review the contract electricity demand. According to an estimate, these efforts are likely to reduce electricity bills by around

2.9% (Note). Will change electric supply companies in the future when SIA RIET judges that such

can result in cost reduction.

Reviewing Electric Supply Companies

With property dispositions and other opportunities, property management of the properties owned by SIA REIT will be reviewed sequentially. Selected PM companies by considering both securement of high quality work and contribution to cash flow,

with criteria that included their track record of being entrusted with the property management operations for SIA REIT’s owned properties, emergency response capability, rationale behind fee levels, etc. 9 PM companies working with SIA REIT at the end of the fiscal period ended February 2014 (the first fiscal

period) was consolidated to 8 companies by the end of the fiscal period ended August 2015 (the fourth fiscal period) and will be consolidated to 7 companies by the end of the fiscal period ending February 2016 (the fifth fiscal period). This is likely to reinforce efficient operational management as well as reduce PM fees by about 7.4% (Note).

Consolidation of Property Management Companies (PM Companies)

(Note) Estimate calculated by the Asset Management Company based on the actual electricity bills through the year.

Number of properties

Changing of electric supply companies 12

Remaining with the current electric supply company

Electricity bills reduced 1

Electricity bills not reduced 5

Total 18

Fiscal period

ended Feb. 2014 (1st FP)

Fiscal period ended Aug. 2014

(2nd FP)

Fiscal period ended Feb. 2015

(3rd FP)

Fiscal period ended Aug. 2015

(4th FP)

Fiscal period ending Feb. 2016

(5th FP) (Plan)

No. of properties at the end of the fiscal period

20 20 19 19 19

No. of entrusting PM companies 9 9 9 8 7

(Note) Estimated reduction calculated by the Asset Management Company based on changes in PM fee rates in line with the change (including planned change) of PM companies.


4,907

13,363

5,486

13,198

1,743 2,992

0

5,000

10,000

15,000

20,000

4th FP2015

5th FP 6th FP2016

7th FP 8th FP2017

9th FP 10th FP2018

11th FP 12th FP2019

13th FP 14th FP2020

15th FP

17


2 – (4) Financial Status

(Note 1) LTV (%) = Period-end balance of interest-bearing debt ÷ Period-end net assets (Note 2) The following calculation is used for the % of long-term borrowings and, even if there is scheduled

repayment, repayment is considered to be made in full on the repayment date (maturity): % of long-term borrowings = Total amount of interest-bearing debt with more than one year left until the repayment date in each period ÷ Total amount of interest-bearing debt in each period.

(Note 3) Amounts are rounded down to the nearest million yen. The same applies to amounts indicated on this page.

End of first fiscal period

End of second fiscal period

End of third fiscal period

End of fourth fiscal period

Balance of interest-bearing debt 44,140 42,340 41,892 41,692

LTV (Note 1) 53.5% 52.0% 51.9% 51.8%

% of long-term borrowings (Note 2) 65.9% 68.2% 88.3% 88.2%

% of fixed-interest borrowings 45.9% 47.7% 68.3% 68.4%

Average interest rate 1.038% 1.032% 1.115% 1.115%

Average remaining period 2.69 years 2.25 years 2.68 years 2.17 years

Number of transacting financial institutions 7 banks 8 banks 9 banks 9 banks

With scheduled repayment (¥199 million) during the period, the balance of interest-bearing debt decreased to ¥41,692 billion by the end of the fourth fiscal period and LTV to 51.8%

Main Financial Indicators List of Balance of Borrowings

Diversification of Repayment Periods

[パーセンテー

ジ]

14.2%

11.8%

7.2%

4.8%

2.4%

2.4% 2.4%

2.4%


Sumitomo Mitsui Banking Corporation

52.6%

Aozora Bank, Ltd. 14.2%

Shinsei Bank, Limited 11.8%

Resona Bank, Limited 7.2%.

The Mie Bank, Ltd. 4.8%

The Bank of Fukuoka, Ltd. 2.4%

Sumitomo Mitsui Trust Bank, Limited 2.4%

Kansai Urban Banking Corporation 2.4%

ORIX Bank Corporation 2.4%



Sumitomo Mitsui Banking Corporation 21,916

Aozora Bank, Ltd. 5,920

Shinsei Bank, Limited 4,933

Resona Bank, Limited 2,981

The Mie Bank, Ltd. 1,984

ORIX Bank Corporation 997

The Bank of Fukuoka, Ltd. 986

Sumitomo Mitsui Trust Bank, Limited 986

Kansai Urban Banking Corporation 986

Total 41,692



E a r n i n g s F o r e c a s t s f o r t h e F i f t h F i s c a l P e r i o d ( E n d i n g F e b r u a r y 2 0 1 6 )

a n d S i x t h F i s c a l P e r i o d ( E n d i n g A u g u s t 2 0 1 6 )

3


Comparison Major factors

Operating revenues +26

Increase of rent revenue +35

Increase of utilities revenue +24

Decrease of other revenue -33

Expenses related to rent business

-42

Increase of utilities -23

Increase of depreciation -16

Increase of property management fees -6

General and administrative expenses

-2

Operating profit -18

Non-operating income/expenses

-5 Refinance related expenses -5

Net income -24

(Unit: Millions of yen) Fourth fiscal period results

Forecast for the fifth fiscal period

(ending Feb. 2016)

Forecast for the sixth fiscal period

(ending Aug. 2016) Comparison Comparison

Operating revenue 3,053 3,080 +26 2,971 -108 Lease business revenue 2,629 2,665 +35 2,555 -110 Other lease business revenue 424 415 -9 415 +0 Dividends received － 0 +0 1 +1

Operating profit 1,198 1,180 -18 1,110 -70 Recurring profit 888 864 -23 797 -67 Net income 887 863 -24 796 -67 Dividends per unit ¥11,822 ¥11,500 -¥322 ¥10,600 -¥900 Period-end occupancy rate 96.3% 97.9% +1.6% 93.1% -4.8% Leasing NOI 1,913 1,913 -0 1,853 -60

Change of NOI -60

Increase of depreciation -10

Change in non-operating income/expenses +2

Other +0

Net income -67


3 Earnings Forecasts for the Fifth Fiscal Period (Ending February 2016) and Sixth Fiscal Period (Ending August 2016)

3 – (1) Earnings Forecasts for the Fifth Fiscal Period (Ending February 2016) and Sixth Fiscal Period (Ending August 2016)

(Unit: Yen) 【Factors for change in cash distribution per unit】

(Note) Amounts are rounded down to the nearest million yen or nearest yen.

Forecast dividends per unit for the fifth fiscal period was revised from ¥11,000 to ¥11,500 due to effect of new tenants at J Tower, review of occupancy rates at other properties, etc.

Dividends per unit for the sixth fiscal period is forecast at ¥10,600 despite contribution from the concluded leasing of SIA Kanda Square due to the significant impact of tenant departure at J Tower

Major Factors for Change of Profit

▌Fifth fiscal period Sixth fiscal period

▌Fourth fiscal period Fifth fiscal period

4th FP 5th FP (forecast)

6th FP (forecast)

11,822 11,500

10,600

-216 -27 -75 -4

Increase of depreciation

-805

-140 +34 Change of

general and administrative

expenses +11

Other change

Change of NOI Increase of

depreciation

Fluctuation of financing costs

Other change

Fluctuation of financing costs



88.5% 91.4% 91.4%

96.3% 97.9% 93.1%

86.6% 84.2%

89.4% 88.9% 91.6% 88.6%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

20,000

30,000

40,000

50,000

60,000

2014年2月（第1期末） 2014年8月（第2期末） 2015年2月（第3期末） 2015年8月（第4期末） 2016年2月（第5期末）予想 2016年8月（第6期末）予想

20

(Note) The above is created based on the assumptions of earnings forecasts for the fifth fiscal period (ending February 2016) and the sixth fiscal period (ending August 2016)

3 – (2) Future Outlook

Leased floor that is not subject to FR and RH CF occupancy rate

Floor area that is subject to FR and RH Vacant area Occupancy rate

Floor area (tsubo)

Expected Trends in Occupancy Rate and CF Occupancy Rate ► Both the forecast occupancy rate and CF occupancy rate for the fiscal period ending August 2016 (the sixth fiscal period) are expected to fall due to

the departure of a major tenant of J Tower

► Will focus on attracting the next tenant of J Tower in order to improve the occupancy rate and the CF occupancy rate at an early stage

3 Earnings Forecasts for the Fifth Fiscal Period (Ending February 2016) and Sixth Fiscal Period (Ending August 2016)

End of 3rd FP (ended Feb. 2015)

End of 4th FP (ended Aug. 2015)

End of 5th FP (ending Feb. 2016)

Forecast

End of 1st FP (ended Feb. 2014)

End of 2nd FP (ended Aug. 2014)

End of 6th FP (ending Aug. 2016)

Forecast


F u t u r e G r ow t h S t r a t e g i e s 4


4

Increase and stabilization of dividends

Decrease of risk premium

Increase unitholder value

Acquire properties through public

offerings

Major issues for the time being Action plan

Internal growth strategy ▶ Leasing of properties with occupancy rates expected to decrease

▶ Efforts for increased rent

Focus on leasing at J Tower and Minami-Shinagawa buildings

Scrutinize situations of each property and pursue possibility of increasing rent

External growth strategy ▶ Property acquisitions that maintain and improve portfolio returns as well as improve the portfolio’s quality

Secure properties to acquire in the future by utilizing warehousing as well as bridge fund and bridge functions

Financial strategy ▶ Increase unsecured loans and decrease financial costs With the property acquisitions and other opportunities, enhance bank formation and negotiate for unsecured loans and lowering financial costs

External growth Maintain, increase and improve

quality of portfolio returns (raise investment ratio in the Tokyo metropolitan area and decrease concentration on J-Tower)

Increase opportunities for property acquisitions

Increase liquidity

Financial strategy Bring borrowings to unsecured

status Decrease financial costs Decrease LTV Longer maturity and fixed-rate

loans Enhance bank formation Acquire credit rating

Internal growth Improve and stabilize occupancy

rates Efforts for increased rent Maintain and increase

competitiveness of properties

Future Growth Strategies

4 – (1) SIA REIT’s Growth Cycle, Challenges and Efforts


1) Increase and stabilize dividends 2) Improve and enhance financial standing

Aim to achieve an asset size of ¥100 billion at an early stage

Aim to achieve an asset size of ¥200 billion by 2020

23

4

Information route Property information Property information

still being considered Number of properties Percentage Number of

properties Percentage

Seller 6 3.5% 0 0.0%

Sponsor/support companies 34 20.0% 6 60.0%

Brokers and others 130 76.5% 4 40.0%

Total 170 - 10 -

Property information available only from the Asset Management Company, and from the sponsor and the support companies

Consider property acquisitions through utilization of the sponsor’s warehousing, bridge fund and bridge functions

Avoid excessive price competition by pursuing negotiation or limited bidding opportunities

Sourcing for property acquisitions that take dividends into consideration

Category Property information Property information

still being considered Number of properties Percentage Number of

properties Percentage

Offices (Tokyo metropolitan area) 74 43.5% 4 40.0%

Offices (Ordinance-designated cities, etc.) 36 21.2% 2 20.0%

Retail facilities 60 35.3% 4 40.0%

Total 170 - 10 -

Target yield: NOI yield at lower 4%’s after depreciation Incorporate several candidate properties for acquisition centering on the

Tokyo metropolitan area, and secure yields in an aim to maintain and increase dividends

Future Growth Strategies

4 – (2) External Growth Strategy


External growth target: Aim to achieve an asset size of ¥100 billion at an early stage and of ¥200 billion by 2020

Efforts

▌Property Information by Information Route (During fourth fiscal period) (As of August 31, 2015)

Among the property information obtained before the end of the fourth fiscal period, information for 18 properties (total of around ¥40 billion) continues to be considered.

▌Property Information by Category (During fourth fiscal period)

Current At an early stage By 2020

Approx. 75 billion yen Additional acquisitions

(Glass City Motoyoyogi, etc.)

J Tower (33%)

100 billion yen

J Tower (24%)

200 billion yen

J Tower (12%)

Additional acquisitions


(Note 1) Appraisal date: September 1, 2015 (Note 2) As of August 31, 2015

Location Motoyoyogi, Shibuya-ku, Tokyo

Nearest Station Three-minute walk from Yoyogi-Hachiman Station on the Odakyu Line

Completed April 1992

Appraisal Value (Note 1) ¥7,700 million

Total leasable area (Note 2) 7,643.63m2

Leased area (Note 2) 7,643.63m2

Occupancy rate (Note 2) 100.0%

Total number of tenants (Note 2) 11

SIA REIT conducted 50 million yen of equity investment in silent partnership of a bridge fund on September 28, 2015. SIA REIT also gained the Preferential Negotiation Rights to the properties which the bridge fund acquires

Utilization of sponsor support: Fund formation was arranged by Simplex Real Estate Management Inc. and Simplex Investment Advisors Inc. invested ¥400 million in the fund

▌Overview of Glass City Motoyoyogi


▌Property Characteristic Office building standing on Yamate-dori with high visibility;

located a 3-minute walk from Yoyogi-Hachiman Station on the Odakyu Line and a 4-minute walk from Yoyogi-koen Station on the Tokyo Metro.

Enjoys excellent transportation convenience with easy access to Koshu-Kaido Road and the Central Circular Route with the Yamate Tunnel which opened in March 2015.

A property which can expect stable demand from tenants going forward since it is situated close to Shinjuku and Shibuya areas where demand for office leasing is strong, and renewal work has been implemented on its entrance, common areas, etc.

Exercise period September 29, 2015 – March 31, 2017

Period allowed for sale March 1, 2016 – March 31, 2017

Minimum purchase price

The following price is set according to the transaction date. However, for periods 1 and 2, if it is deemed appropriate to

lower the minimum purchase price due to taxation system and other reasons, SIA REIT and Simplex Real Estate Management Inc. are to discuss in good faith the possible reduction of the minimum purchase price by 20 million yen.

▌Outline of the Preferential Negotiation Rights

Transaction period Minimum purchase price

1. From March 1, 2016 to August 31, 2016 7,580 million yen

2. From September 1, 2016 to February 28, 2017 7,520 million yen

3. From March 1, 2017 to March 31, 2017 7,500 million yen

Shion Kindergarten

Motoyoyogi Post Office

Tomigaya Elementary School

Tomigaya Library

Yoyogi Hachimangu

Yoyogi-Hachiman City Hall

Fukusen-ji Temple

Yam

ate-

dori

Stre

et

Yoyogi Park

West gate

Glass City Motoyoyogi

Shim

o-Ki

taza

wa

St

atio

n

Omote-sando Station

Ohashi JCT Ebisu Station

Glass City Motoyoyogi

Yoyo

gi-u

ehar

a S

tatio

n

Shibuya Station

Yoyogi-Koen Sta.

Yoyogi Park

Harajuku Station

Meiji Jingu

Shinjuku Gyoen Yoyogi

Station

Shinjuku Station

Tokyo Metropolitan Government Building

Hatsudai Station

Yoyo

gi-H

achi

man

St

a. Hatsudai

Minami Gate

4 – (3) Investment in Bridge Fund/Acquisition of Preferential Negotiation Rights: Glass City Motoyoyogi

24


▌Effect of Acquisition of Glass City Motoyoyogi


▌Investment Ratio of 5 Central Wards of Tokyo

Status at the end of 4th FP (ended Aug. 2015) After the acquisition Effect of the acquisition

Investment ratio of the 5 central wards of Tokyo (Note 1) (Note 2)

13.1% (2 properties)

21.1% (3 properties)

+8.0% (+1 property)

Investment ratio of the Tokyo metropolitan area (Note 2) 83.5% 85.0% +1.5%

Investment ratio of J Tower (Note 2) 32.8% 29.8% -3.0%

Tenant diversification

Number of tenants (Note 3) 265 276 +11

Share of top 10 tenants (Note 4) 28.6% 27.0% -1.6%

(Note 1) “5 central wards of Tokyo” refers to Chiyoda, Chuo, Minato, Shinjuku and Shibuya wards. Properties that are owned by SIA REIT as of the end of the fourth fiscal period (ended August 2015) and are located in the five central wards of Tokyo are SIA Kanda Square (Chiyoda ward) and 36 Sankyo Building (Shinjuku ward)..

(Note 2) The figures in the “After the acquisition” column for each “Investment ratio” are calculated by adding ¥7,580 million, a deemed acquisition price of Glass City Motoyoyogi, to the acquisition price of the 19 properties (total of ¥74,347 million) owned by SIA REIT as of the end of the fourth fiscal period (ended August 2015), and are rounded to the first decimal place.

(Note 3) “Number of tenants” is calculated based on the number of tenants at the 19 properties owned by SIA REIT as of August 31, 2015 and the number of tenants at Glass City Motoyoyogi on the same date.

(Note 4) The figure in “After the acquisition” column for “Share of top 10 tenants” indicates the ratio of floor area leased to those tenants to the sum of the total leasable area of 19 properties owned by SIA REIT as of August 31, 2015 and the leasable area of Glass City Motoyoyogi.

▌Investment Ratio of J Tower

Addition of Glass City Motoyoyogi, for which preferential negotiation rights were acquired, to the portfolio will enhance the quality of the portfolio

4 – (3) Investment in Bridge Fund/Acquisition of Preferential Negotiation Rights: Effect of Acquisition of Glass City Motoyoyogi (provisional calculation)

▲3.0％

29.8％

13.1％

+8.0％


4,907 13,330

5,472

13,165

1,645 2,985

1,459

3,436

0

5,000

10,000

15,000

20,000

5th FP2015

6th FP2016

7th FP 8th FP2017

9th FP 10th FP2018

11th FP 12th FP2019

13th FP 14th FP2020

15th FP

26


4 – (4) Financial Strategy

(Note) Amounts are rounded down to the nearest million yen. The same applies to amounts indicated on this page.

End of first fiscal period

End of second fiscal period

End of third fiscal period

End of fourth fiscal period

After refinancing

Balance of interest-bearing debt 44,140 42,340 41,892 41,692 41,492

% of long-term borrowings 65.9% 68.2% 88.3% 88.2% 64.4%

% of fixed-interest borrowings 45.9% 47.7% 68.3% 68.4% 68.6%

Average interest rate 1.038% 1.032% 1.115% 1.115% 1.119%

Average remaining period 2.69 years 2.25 years 2.68 years 2.17 years 2.33 years

Number of transacting financial institutions 7 banks 8 banks 9 banks 9 banks 9 banks

Refinanced ¥4,895 million on October 13, 2015. Reduced debt dependency on the largest lender and refinanced part of existing short-term borrowings with long-term borrowings

Status After Refinancing List of Balance of Borrowings

Diversification of Repayment Periods

[パーセンテー

ジ]

13.0%

11.9%

7.2%

6.2%

3.4%

2.4% 2.4%

2.4%

(As of October 13, 2015)

Sumitomo Mitsui Banking Corporation

51.3%

Aozora Bank, Ltd. 13.0%

Shinsei Bank, Limited 11.9%

Resona Bank, Limited 7.2%.

The Mie Bank, Ltd. 6.2%

The Bank of Fukuoka, Ltd. 2.4%

Sumitomo Mitsui Trust Bank, Limited 2.4%

Kansai Urban Banking Corporation 2.4%

ORIX Bank Corporation 3.4%



Sumitomo Mitsui Banking Corporation 21,266 Aozora Bank, Ltd. 5,405 Shinsei Bank, Limited 4,921 Resona Bank, Limited 2,974 The Mie Bank, Ltd. 2,579 ORIX Bank Corporation 1,395 The Bank of Fukuoka, Ltd. 984 Sumitomo Mitsui Trust Bank, Limited 984 Kansai Urban Banking Corporation 984 Total 41,492

(Unit: Millions of yen) Refinancing part of existing short-term borrowings with long-term borrowings


A p p e n d i x 5


Simplex Real Estate Management Inc. （SRM）

Simplex Investment Advisors Inc. （SIA）

Simplex REIT Partners Inc. （SRP）

Line of business Real estate investment advisory services for investors in Japan and abroad

Group’s holding company, management of subsidiaries and principal investments Management of the Investment Corporation’s assets

Established September 10, 2007 June 6, 2002 July 1, 2005

Capital ¥100 million ¥100 million ¥50 million

Representative Kiyohiko Tsukada, CEO Kiyohiko Tsukada, CEO Hiroyuki Katsuno, President and Representative Director

Address of head office

Shin-Kasumigaseki Building 19th Floor, 3-3-2 Kasumigaseki, Chiyoda Ward, Tokyo



No. of directors/employees 34 (as of August 31, 2015)(Note 1) 28 (as of August 31, 2015)(Note 1) 20 (as of August 31, 2015)(Note 1)

Membership Japan Investment Advisors Association The Association for Real Estate Securitization The Investment Trusts Association, Japan

Licenses, etc.

1.First-class architect office: Governor of Tokyo No.57010

2.Real Estate Brokerage License: Governor of Tokyo (2) No.88355

3.Financial Instruments Business Operator (Type II Financial Instruments Business; Investment Advisory and Agency Business; Investment Management Business): Kanto Financial Bureau (Kinsho) No.1915

4.Real Estate Investment Management and Advisory Services Registration: MLIT Sogo No.41

5.Real Estate Specified Joint Enterprise Permission: The FSA Commissioner and the Minister of Land, Infrastructure, Transport and Tourism No.52

1.Real Estate Brokerage License: Governor of Tokyo (2) No.90775

2.Financial Instruments Business Operator (Type II Financial Instruments Business; Investment Advisory and Agency Business): Kanto Financial Bureau (Kinsho) No. 801

1.Real Estate Brokerage License: Issued by the Governor of Tokyo (3), No.84787

2.Financial Instruments Business Operator (Investment Management Business): Kanto Financial Bureau (Kinsho) No.342

3.License No. 46 issued by the Minister of Land, Infrastructure, Transport and Tourism (Trading Agency Etc., License)

Fully-owned

5 Appendix

About the SIA Group: Corporate Overview Fully-owned

(Note 1) Includes full time auditors, contracted employees and employees on postings from other companies, and excludes outside directors and temporary staff. Includes members holding concurrent positions among SIA Group companies.

(Note 2) Simplex Investment Advisors Inc., Simplex REIT Partners Inc. (the Asset Management Company) and Simplex Real Estate Management Inc. are collectively referred to as the “SIA Group.”


2002 June Nikko Cordial Securities Inc. (at the time) and Simplex Holdings Inc. establish Simplex Investment Advisors Inc. (SIA) to offer real estate investment advisory services

2005 June SIA listed on Tokyo Stock Exchange Mothers market

July Simplex REIT Partners Inc. established for entry in the J-REIT market

2007 September Simplex Real Estate Management Inc. established for the purpose of splitting up real estate investment advisory services

November Takeover bid of SIA shares by the Aetos Group and Goldman Sachs Group completed

2011 February Financial base strengthened through public offering with the Aetos Group’s underwriting and long-term refinancing with financial institutions; the Aetos Group acquires the Goldman Sachs Group’s SIA shares at the same time, becoming the sole shareholder

2013 October SIA REIT listed on the J-REIT section of the Tokyo Stock Exchange

5 Appendix

About the SIA Group: History


5 Appendix

About the SIA Group: Real Estate Developments (Partial)

(Note) The above developments show the developments of the SIA Group. SIA REIT is not scheduled to acquire these properties and there is no guarantee that any acquisition of these properties will take place. In addition, the above includes properties that have already been sold to third parties outside the SIA Group.

●

★

●

★

●

●

■

Zigzag (Chiyoda Ward, Tokyo)

SIA Aoyama Building (Shibuya Ward, Tokyo)

KINSIA (Sumida Ward, Tokyo)

Nihonbashi Central Square (Chuo Ward, Tokyo)

Tokyo Bay Maihama Hotel (Urayasu City, Chiba Prefecture)

SIA Toyosu Prime Square (Koto Ward, Tokyo)

●

SIA Shin-Otemachi Building (Chiyoda Ward, Tokyo)

mosia (Setagaya Ward, Tokyo)

★

KINSIA ANNEX (Sumida Ward, Tokyo)

★

★

●：Office building

★：Urban retail facilities

■：Other

SIA Kamata Front (Ota Ward, Tokyo)

SIA Machida Building (Machida City, Tokyo)

Saitama Prefecture

Chiba Prefecture

Kanagawa Prefecture

Tokyo


Office building

Urban retail

facilities

Total asset size

¥1,057 billion

【Sphere Tower Tennozu】・Period: December 2013 ・Location: Shinagawa Ward, Tokyo Central multi-purpose building in Tennozu Isle comprised of offices, shops and a sports club; directly connected to Tennozu Isle Station on the Tokyo Monorail line, located a 2-minute walk from Tennozu Isle Station on the Rinkai Line, 28 floors above ground and 2 floors below, total floor space of 43,477m²

5 Appendix

About the SIA Group: Asset Management Entrustment

Office buildings

Retail facilities

Residences

Hotel

Other

(Note 1) Calculated from the cumulative amount of acquisition prices as of the end of June 2015.

(Note 2) Includes funds that have ended and have returned equity interests.

【Shibuya 1717 Building (formerly Alive Nanpeidai 2)】・Period: April 2014 ・Location: Shibuya Ward, Tokyo Building near Shinsencho Intersection where National Route 246 and Kyu Yamate-dori meet; 13-minute walk from Shibuya Station on the JR, Tokyu and Tokyo Metro lines, 8-minute walk from Shinsen Station on the Keio Inokashira Line

【CR-VITE】・Period: March 2014 ・Location: Shibuya Ward, Tokyo Building with offices and shops along Miyamasuzaka next to Shibuya Post Office; 3-minute walk from Shibuya Station on the JR, Tokyu and Tokyo Metro lines, 11 floors

Fund management record with asset size of over ¥1 trillion since its founding in 2002

Ample track record of property acquisition arrangement and asset management entrustment recently as well

▌Fund Formations and Management ▌Property Acquisition Arrangements


Simplex Real Estate Management Inc.

Simplex Investment Advisors Inc.

【Sponsor】

Sponsor support agreement Provision of sale information of real estate, etc. (pipeline support) Provision of warehousing functions Provision of property acquisition arrangement services Provision of personnel and know-how Advisory for facility management, etc.

【Support company】

【SIA REIT】

SIA REIT, Inc.

【Asset Management Company】

Aetos Japan, LLC

【Support company】

Fully-owned

Sponsor support

Sponsor support

Pipeline support Provision of sale information of real estate, etc.

Aetos Japan, LLC (excerpt from the company’s website) Aetos Japan, LLC (“Aetos Japan”) provides a full range of asset management and advisory services relating to investment sourcing, acquisition, structuring, leasing and repositioning, disposition planning, and pricing recommendations on purchase and sale with respect to real estate and real-estate related assets in Japan.

Asset management

5 Appendix

Support of Sponsor and Support Companies

Simplex REIT Partners Inc.

Sponsor support agreement Provision of sale information of real estate, etc. (pipeline support) Provision of warehousing functions Provision of property acquisition arrangement services Provision and exchange of real estate market information Advisory for real estate management, operation, etc.


Third fiscal period (ended February 2015)

Fourth fiscal period (ended August 2015)

Operating revenue (total) 3,056,711 3,053,905 Lease business revenue 2,593,953 2,629,780

Other lease business revenue 404,653 424,125

Gain on sale of real estate 58,103 –

Operating expenses (total) 1,829,566 1,854,993 Expenses related to rent business 1,544,394 1,571,147

Asset management fees 223,805 221,810

Asset custody fees 3,530 3,562

Administrative service fees 15,798 15,311

Directors’ compensations 3,876 3,876

Other operating expenses 38,161 39,285

Operating profit 1,227,145 1,198,911 Non-operating income (total) 568 2,056

Interest income 568 572

Insurance income – 1,484

Non-operating expenses (total) 310,823 312,200

Interest expenses 228,595 234,692

Borrowing related expenses 82,227 77,507

Recurring profit 916,889 888,767 Net income before income taxes 916,889 888,767 Corporate, inhabitant and enterprise taxes 955 922

Adjustment of corporate tax, etc. -2 2

Total corporate tax, etc. 952 924

Net income 915,937 887,842 Profit brought forward 3 21

Unappropriated retained earnings (undisposed loss) 915,940 887,864

5 Appendix

Statement of Income (Unit: Thousands of yen)

(Note) Amounts are rounded down to the nearest thousand yen.




Liabilities

Current liabilities (total) 6,458,537 6,460,063

Operating accounts payable 156,641 187,760

Current portion of long-term loans payable 5,295,000 5,282,700

Accounts payable 334,192 336,241

Accrued expenses 142,244 144,697

Corporate taxes, etc. payable 839 806

Consumption taxes payable 56,110 25,283

Advances received 473,275 467,568

Other 234 15,005

Noncurrent liabilities (total) 40,645,419 40,506,370

Long-term loans payable 36,597,500 36,410,000

Tenant lease and security deposits 324,097 207,363

Tenant lease and security deposits in trust 3,723,822 3,889,007

Total liabilities 47,103,957 46,966,434



Assets

Current assets (total) 6,267,406 6,204,317

Cash and deposits 2,185,916 1,965,116

Cash and deposits in trust 3,829,236 3,988,421

Operating accounts receivable 91,300 98,837

Prepaid expenses 160,935 142,661

Deferred tax assets 17 14

Consumption tax receivable – 7,944

Other – 1,321

Noncurrent assets (total) 74,390,966 74,288,455

Property, plant and equipment (total) 70,757,787 70,720,124

Buildings 3,413,847 3,362,616

Structures 8,187 8,478

Machinery and equipment 44,460 38,258

Land 3,770,347 3,770,347

Buildings in trust 28,011,055 27,968,120

Structures in trust 30,290 30,687

Machinery and equipment in trust 40,398 76,141

Tools, furniture and fixtures in trust 19,025 45,298

Land in trust 35,420,175 35,420,175

Intangible assets (total) 3,367,914 3,367,619

Leasehold rights in trust 3,365,647 3,365,647

Other 2,267 1,972

Investment and other assets (total) 265,264 200,711

Lease and guarantee deposits 16,330 16,330

Long-term prepaid expenses 248,934 184,381

Total assets 80,658,373 80,492,773



Net assets

Unitholders’ equity (total) 33,554,415 33,526,339

Unitholders’ capital 32,638,475 32,638,475

Surplus (total) 915,940 887,864

Unappropriated retained earnings (undisposed loss) 915,940 887,864

Total net assets 33,554,415 33,526,339

Total liabilities and net assets 80,658,373 80,492,773

5 Appendix

Balance Sheet


(Unit: Thousands of yen)


Stable rental demand secured and relatively high returns expected for the portfolio 1

Support system with a sponsor that has ample experience in real estate development and real estate fund management 2

Initiatives for alignment with unitholder profits 3

Investment ratio by property

type

70% or more

Office buildings

30% or less

Retail facilities

2. With investment centering on the “Tokyo metropolitan area”, we will also carefully select investments in areas such as “ordinance-designated cities, etc.”

Tokyo metropolitan area Ordinance-designated cities, etc.

While centering on investment in the Tokyo metropolitan area which has a relatively large market and from which stable lease demand is expected in the mid to long term, we will also carefully select investments in areas such as ordinance-designated cities etc. at which relatively higher returns than in the Tokyo metropolitan area are expected

1. We will establish a portfolio centering on “Class-A and Class-B office buildings” and “urban retail facilities”

Office buildings Primary investment target:

Class-A and Class-B office buildings

Retail facilities Primary investment target:

Urban retail facilities

Acquisition opportunities for returns that are at a higher level relative to those of Class-S office buildings are expected

Relatively stable rental demand and rent level are expected due to large numbers of prospective tenants

Stability of profits through tenant diversification, etc. is expected as the number of prospective tenants is larger than for suburban retail facilities

Contracts tend to be of longer terms than those of office buildings

Investment ratio by property type

70% or more

Investment ratio by property type

30% or less

Investment ratio by region

70% or more


30% or less


70% or more

Tokyo metropolitan area

30% or less

Ordinance-designated cities, etc.

5 Appendix

Characteristics of SIA REIT SIA REIT will aim to maximize unitholder interests through the pursuit of “profitability” and “stability” by investing in office buildings and retail

facilities for which the SIA Group possesses ample management know-how

►Support from a sponsor which has managed more than ¥1 trillion of assets and which has ample experience in property acquisition arrangements and asset management entrustment

►Database of more than 10,000 construction records and staff with abundant expertise

►Sponsor owns 15% of investment units ► Introduced management fee system for the Asset Management Company linked to the rate of increase of the amount available for cash

distribution per unit




Office buildings Retail facilities

[Investment ratio(Note 1): By property type]

[Investment ratio(Note 1): By region]

Type/area No. Property name Location Acquisition price

Investment ratio (Note 1)

Appraisal value (Note 2)

Book value (Note 2)

Occupancy rate

(Note 2)

Offi

ce b

uild

ings

Toky

o m

etro

polit

an a

rea

OT-1 J Tower Fuchu City, Tokyo 24,394 32.8% 25,200 24,411 94.7%

OT-2 SIA Kanda Square Chiyoda Ward, Tokyo 7,350 9.9% 7,540 7,179 71.5%

OT-3 Tachikawa Nishiki-cho Building Tachikawa City, Tokyo 3,264 4.4% 3,600 3,399 100.0%

OT-4 CP10 Building Taito Ward, Tokyo 3,229 4.3% 3,100 3,224 90.8%

OT-5 Yokohama AP Building Yokohama City, Kanagawa Prefecture 3,110 4.2% 3,460 3,102 100.0%

OT-6 Yushima First Genesis Building Bunkyo Ward, Tokyo 2,751 3.7% 2,840 2,730 100.0%

OT-7 Miyaji Building Nakano Ward, Tokyo 2,880 3.9% 3,000 2,882 100.0%

OT-8 36 Sankyo Building Shinjuku Ward, Tokyo 2,395 3.2% 2,520 2,385 100.0%

OT-9 Minami-Shinagawa JN Building Shinagawa Ward, Tokyo 2,165 2.9% 1,944 2,166 88.6%

OT-10 Minami-Shinagawa N Building Shinagawa Ward, Tokyo 2,292 3.1% 2,100 2,281 96.4%

OT-11 Minami-Shinagawa J Building Shinagawa Ward, Tokyo 2,020 2.7% 2,100 1,996 100.0%

OT-12 MY Atsugi Building Atsugi City, Kanagawa Prefecture 1,240 1.7% 1,290 1,220 97.1%

OT-13 Hachioji SIA Building Hachioji City, Tokyo 730 1.0% 803 724 100.0%

Ord

inan

ce-

desi

gnat

ed c

ities

, et

c.

OO-1 Central Shin-Osaka Building Osaka City, Osaka Prefecture 4,612 6.2% 4,780 4,528 100.0%

OO-2 Karasuma Plaza 21 Kyoto City, Kyoto Prefecture 3,700 5.0% 3,390 3,732 100.0%

OO-3 Stoke Building Nagoya Nagoya City, Aichi Prefecture 2,381 3.2% 2,550 2,368 100.0%

OO-4 MY Kumamoto Building Kumamoto City, Kumamoto Prefecture 1,152 1.5% 1,280 1,134 98.1%

Subtotal・Average 69,665 93.7% 71,497 69,469 95.8%

Ret

ail

faci

litie

s R-1 fab Minami-Osawa Hachioji City, Tokyo 4,250 5.7% 4,310 4,186 100.0%

R-2 Niigata Higashibori-dori Parking Building

Niigata City, Niigata Prefecture 432 0.6% 505 429 100.0%

Subtotal・Average 4,682 6.3% 4,815 4,616 100.0%

Total・Average 74,347 100.0% 76.312 74,085 96.3%

36


Number of properties: 19 properties Asset size: ¥74.3 billion (based on acquisition price)

5 Appendix

Portfolio List

(Note 1) Investment ratios are calculated based on acquisition price. (Note 2) All figures are as of the end of August 2015 (end of the fourth fiscal period).


R-2

OO-1

OO-2

OO-3

OO-4

OT-10 OT-9

OT-11

OT-2 OT-4

OT-6 OT-7 OT-8

OT-5 OT-12

OT-1

OT-3

OT-13

R-1

Tokyo

Saitama Prefecture

Chiba Prefecture

Kanagawa Prefecture

OT-10 OT-9 OT-13 OT-11 OT-12 OT-8 OT-7 OT-6

OT-2 OT-3 OT-4 OT-5

OT-1

R-1

OO-1 R-2

OO-2

OO-3

OO-4

37

5

J-Tower

fab Minami-Osawa

SIA Kanda Square Tachikawa Nishiki-cho Building CP10 Building Yokohama AP Building

Yushima First Genesis Building

Miyaji Building 36 Sankyo Building MY Atsugi Building

Niigata Higashibori- dori Parking Building

Central Shin-Osaka Building

MY Kumamoto Building

Hachioji SIA Building Minami-Shinagawa JN Building

Minami-Shinagawa N Building

Minami-Shinagawa J Building

Karasuma Plaza 21

Stoke Building Nagoya



Appendix

Portfolio Map


Overview of Individual Properties (1)

38

5

Property Name OT-1

J-Tower OT-2

SIA Kanda Square OT-3

Tachikawa Nishiki-cho Building

OT-4 CP10 Building

OT-5 Yokohama AP

Building

Location Fuchu City, Tokyo Chiyoda Ward, Tokyo Tachikawa City, Tokyo Taito Ward, Tokyo Yokohama City, Kanagawa Prefecture

Nearest Station Fuchu Station on Keio Line

Kanda Station on JR Line

Tachikawa Station on JR Line

Okachimachi Station on JR Line

Yokohama Station on JR Line

Completed March 1992 April 2007 June 1991 March 1989 May 1983

Acquisition Price ¥24,394 million ¥7,350 million ¥3,264 million ¥3,229 million ¥3,110 million

Appraisal Value ¥25,200 million ¥7,540 million ¥3,600 million ¥3,100 million ¥3,460 million

Structure S/RC/SRC SRC SRC SRC RC

Number of Floors B2/18F 10F 8F B1/7F B1/8F

Total Floor Area 53,685.80m2 7,145.42m2 8,026.84m2 4,454.05m2 5,648.65m2

Total Leasable Area 34,291.48m2 5,263.30m2 5,633.29m2 3,506.66m2 4,480.98m2

PML 2.80% 6.06% 4.51% 3.51% 10.17%

Occupancy Rate 94.7% 71.5% 100.0% 90.8% 100.0%

Number of Tenants 30 28 21 6 10

Appendix



5

Property Name OT-6

Yushima First Genesis Building

OT-7 Miyaji Building

OT-8 36 Sankyo Building

OT-9 Minami-Shinagawa

JN Building

OT-10 Minami-Shinagawa

N Building

Location Bunkyo Ward, Tokyo Nakano Ward, Tokyo Shinjuku Ward, Tokyo Shinagawa Ward, Tokyo Shinagawa Ward, Tokyo

Nearest Station Hongo 3-chome Station on Tokyo Metro Line

Nakano Station on JR Line

Idabashi Station on JR Line

Aomono Yokocho Station on Keikyu Line

Aomono Yokocho Station on Keikyu Line

Completed August 1991 August 1994 October 1991 July 1990 July 1994

Acquisition Price ¥2,751 million ¥2,880 million ¥2,395 million ¥2,165 million ¥2,292 million

Appraisal Value ¥2,840 million ¥3,000 million ¥2,520 million ¥1,944 million ¥2,100 million

Structure SRC S/SRC RC SRC SRC

Number of Floors B1/7F B1/7F B2/4F B2/10F B2/10F



PML 7.00% 3.04% 8.85% 5.57% 5.50%

Occupancy Rate 100.0% 100.0% 100.0% 88.6% 96.4%


Overview of Individual Properties (2)

Appendix



5

Property Name OT-11


OT-12 MY Atsugi Building

OT-13 Hachioji SIA Building

OO-1 Central Shin-Osaka

Building

OO-2 Karasuma Plaza 21

Location Shinagawa Ward, Tokyo Atsugi City, Kanagawa Prefecture Hachioji City, Tokyo Osaka City, Osaka Prefecture Kyoto City, Kyoto Prefecture

Nearest Station Aomono Yokocho Station on Keikyu Line

Honatsugi Station on Odakyu Line

Hachioji Station on JR Line

Shin-Osaka Station on JR Line

Karasuma Station on Hankyu Line

Completed July 1992 September 1988 September 1993 June 1992 November 1986

Acquisition Price ¥2,020 million ¥1,240 million ¥730 million ¥4,612 million ¥3,700 million

Appraisal Value ¥2,100 million ¥1,290 million ¥803 million ¥4,780 million ¥3,390 million

Structure SRC RC/SRC SRC S SRC

Number of Floors B1/10F 8F 9F B1/12F B1/8F



PML 3.70% 7.69% 4.53% 12.72% 5.18%

Occupancy Rate 100.0% 97.1% 100.0% 100.0% 100.0%


Appendix

Overview of Individual Properties (3) (As of August 31, 2015)


5

Property Name OO-3

Stoke Building Nagoya OO-4

MY Kumamoto Building R-1

fab Minami-Osawa R-2

Niigata Higashibori-dori Parking Building

Location Nagoya City, Aichi Prefecture Kumamoto City, Kumamoto Prefecture Hachioji City, Tokyo Niigata City, Niigata Prefecture

Nearest Station Fushimi Station on Nagoya City Subway Line

Kumamoto Tram Kumamoto Castle/ City Hall Tram Stop

Minami-Osawa Station on Keio Line

Niigata Station on JR Line

Completed April 1991 October 1987 December 2001 March 1993

Acquisition Price ¥2,381 million ¥1,152 million ¥4,250 million ¥432 million

Appraisal Value ¥2,550 million ¥1,280 million ¥4,310 million ¥505 million

Structure S/SRC S/RC S S

Number of Floors B1/8F 9F 7F 10F

Total Floor Area 8,147.56m2 4,980.96m2 9,140.30m2 8,867.26m2

Total Leasable Area 5,801.80m2 3,754.29m2 8,409.23m2 8,725.90m2

PML 13.58% 5.08% 3.03% 6.08%

Occupancy Rate 100.0% 98.1% 100.0% 100.0%

Number of Tenants 5 17 14 1

Appendix

Overview of Individual Properties (4) (As of August 31, 2015)


Environmental Initiatives: Acquisition of Certification in CASBEE

J Tower SIA Kanda Square

Overview of Certification in CASBEE for Market Promotion CASBEE is a rating system which comprehensively evaluates the environmental performance of buildings with reduced environmental burden through energy-saving, resource-saving and recycling functions, and increased environmental quality and environmental functions such as in-door comfort and consideration of landscape. It is developed and managed primarily by the Institute for Building Environment and Energy Conservation (hereafter “IBEC”) under the direction of the Ministry of Land Infrastructure Transport and Tourism.

CASBEE for Market Promotion was developed for the purpose of being used for the evaluation of real estate. The evaluation standards are formulated assuming use by stakeholders engaged in the transaction of real estate and such and are thus limited to items that are closely related to real estate appraisal.

In addition, in order to secure appropriate management and proliferation of CASBEE as well as reliability and transparency of evaluation results, ratings in CASBEE for Market Promotion are conducted by third-party institutions certified by IBEC. Properties assessed to be appropriate for functional evaluation by the standards are given one of five ratings, “Rank S (excellent),” “Rank A (extremely good)”, “Rank B+ (good),” “Rank B- (somewhat inferior)” or “Rank C (inferior),” according to acquired points.

Reference

On April 2, 2014, SIA REIT’s assets J Tower and SIA Kanda Square acquired “Rank A (extremely good)” ratings in CASBEE (Comprehensive Assessment System for Built Environment Efficiency) for Market Promotion.

Low environmental risk location conditions, energy-saving functions, office space comfort, etc. were rated highly at J Tower while low environmental risk location conditions, long-term service lives of the structural framework and major equipment, office space comfort, etc. were highly evaluated at SIA Kanda Square, resulting in both acquiring Rank A ratings.

Acquisition of Certification in CASBEE for Market Promotion

5 Appendix


Property number Property name Acquisition price

(millions of yen)

End of fourth fiscal period (ended Aug. 2015) End of third fiscal period

Appraisal value (millions of yen) Direct cap rate

Book value (millions of yen)

Unrealized gain (loss)

(millions of yen)

Appraisal value (millions of yen) Direct cap rate Difference from

end of previous period

Difference from end of previous

period

OT-1 J Tower 24,394 25,200 0 5.2% -0.1% 24,411 788 25,200 5.3%

OT-2 SIA Kanda Square 7,350 7,540 0 4.3% -0.2% 7,179 360 7,540 4.5%

OT-3 Tachikawa Nishiki-cho Building 3,264 3,600 60 5.0% -0.1% 3,399 200 3,540 5.1%

OT-4 CP10 Building 3,229 3,100 50 4.6% -0.1% 3,224 -124 3,050 4.7%

OT-5 Yokohama AP Building 3,110 3,460 80 4.8% -0.1% 3,102 357 3,380 4.9%

OT-6 Yushima First Genesis Building 2,751 2,840 60 4.6% -0.1% 2,730 109 2,780 4.7%

OT-7 Miyaji Building 2,880 3,000 50 4.9% -0.1% 2,882 117 2,950 5.0%

OT-8 36 Sankyo Building 2,395 2,520 50 4.7% -0.1% 2,385 134 2,470 4.8%

OT-9 Minami-Shinagawa JN Building 2,165 1,944 30 4.9% -0.1% 2,166 -222 1,914 5.0%

OT-10 Minami-Shinagawa N Building 2,292 2,100 40 5.1% -0.1% 2,281 -181 2,060 5.2%

OT-11 Minami-Shinagawa J Building 2,020 2,100 40 5.1% -0.1% 1,996 103 2,060 5.2%

OT-12 MY Atsugi Building 1,240 1,290 0 5.9% -0.1% 1,220 69 1,290 6.0%

OT-13 Hachioji SIA Building 730 803 16 5.5% -0.1% 724 78 787 5.6%

OO-1 Central Shin-Osaka Building 4,612 4,780 40 4.9% -0.1% 4,528 251 4,740 5.0%

OO-2 Karasuma Plaza 21 3,700 3,390 20 5.2% -0.1% 3,732 -342 3,370 5.3%

OO-3 Stoke Building Nagoya 2,381 2,550 50 5.2% -0.1% 2,368 181 2,500 5.3%

OO-4 MY Kumamoto Building 1,152 1,280 20 6.2% -0.1% 1,134 145 1,260 6.3%

R-1 fab Minami-Osawa 4,250 4,310 10 5.3% -0.1% 4,186 123 4,300 5.4%

R-2 Niigata Higashibori-dori Parking Building 432 505 13 6.8% -0.1% 429 75 492 6.9%

Total 74,347 76,312 +629 - - 74,085 2,226 75,683 -

5 Appendix

List of Appraisal Values

(Note) Amounts are rounded down to the nearest million yen.


5

Property number OT-1 OT-2 OT-3 OT-4 OT-5 OT-6 OT-7 OT-8 OT-9 OT-10

Property name J-Tower SIA Kanda Square

Tachikawa Nishiki-cho

Building CP10 Building Yokohama AP

Building Yushima First

Genesis Building

Miyaji Building 36 Sankyo Building

Minami-Shinagawa JN Building

Minami-Shinagawa N Building

① Total property-related operating revenue (thousands of yen) 935,251 231,875 142,654 81,050 124,356 93,786 112,487 86,783 113,689 101,970

Lease business revenue 765,076 188,965 136,727 68,359 108,225 87,406 102,712 75,679 104,781 93,121

Other lease business revenue 170,174 42,909 5,926 12,690 16,131 6,379 9,774 11,104 8,908 8,849

② Total property-related operating expenses (thousands of yen) 423,234 55,945 41,324 26,660 33,235 24,437 25,981 24,747 72,062 40,277

Property management fees 108,647 13,649 16,246 9,261 12,922 7,613 8,006 5,610 17,266 6,723

Utilities expenses 232,867 10,560 10,910 9,672 9,539 7,553 9,032 10,134 26,918 10,291

Taxes and public dues 65,084 8,388 10,541 6,584 9,600 7,748 7,649 7,304 9,555 9,100

Insurance premiums 1,411 204 210 110 137 123 110 103 237 207

Repair expenses 14,723 23,142 2,915 532 534 598 683 793 2,097 1,310

Other expenses 500 – 500 500 500 800 500 800 15,987 12,644

③ Leasing NOI (= ① － ②) (thousands of yen) 512,017 175,929 101,329 54,389 91,120 69,348 86,505 62,036 41,627 61,693

④ Depreciation (thousands of yen) 114,575 70,190 21,834 15,299 10,268 12,607 10,171 8,298 14,261 13,393

⑤ Lease business profit (=③ - ④) (thousands of yen) 397,441 105,739 79,495 39,089 80,851 56,741 76,334 53,738 27,365 48,300

⑥ Capital expenditures (thousands of yen) 156,795 13,047 146,931 15,009 4,053 1,929 – 740 380 7,267

⑦ Leasing NCF(=③ － ⑥) (thousands of yen) 355,221 162,881 △45,602 39,380 87,066 67,419 86,505 61,295 41,246 54,426

Appendix

Lease Business Revenue and Expenditure by Property (1)



5

Property number OT-11 OT-12 OT-13 OO-1 OO-2 OO-3 OO-4 R-1 R-2

Total for 19 properties Property name


MY Atsugi Building

Hachioji SIA Building

Central Shin-Osaka

Building Karasuma Plaza 21

Stoke Building Nagoya

MY Kumamoto Building

fab Minami-Osawa

Niigata Higashibori-dori

Parking Building

① Total property-related operating revenue (thousands of yen) 95,763 64,890 51,218 202,852 195,914 116,530 70,658 3,053,905

Lease business revenue 87,942 59,307 45,979 177,478 178,611 99,230 65,220 2,629,780

Other lease business revenue 7,821 5,582 5,238 25,373 17,302 17,300 5,438 424,125

② Total property-related operating expenses (thousands of yen) 32,067 23,342 23,824 64,741 77,795 35,545 22,664 1,139,926

Property management fees 5,898 8,795 10,458 18,714 29,465 10,196 8,913 319,929

Utilities expenses 9,054 8,370 7,442 25,830 23,027 14,552 7,422 475,482

Taxes and public dues 5,593 4,825 4,565 16,172 22,697 9,686 4,781 220,191

Insurance premiums 131 129 89 299 297 192 130 4,380

Repair expenses 2,292 722 769 3,223 1,807 417 915 63,493

Other expenses 9,097 500 500 500 500 500 500 56,449

③ Leasing NOI (= ① － ②) (thousands of yen) 63,696 41,547 27,393 138,110 118,118 80,985 47,994 121,225 18,909 1,913,978

④ Depreciation (thousands of yen) 11,167 12,300 5,210 32,688 13,823 17,709 11,851 31,493 4,076 431,221

⑤ Lease business profit (=③ - ④) (thousands of yen) 52,529 29,246 22,183 105,422 104,294 63,276 36,142 89,732 14,832 1,482,757

⑥ Capital expenditures (thousands of yen) 294 1,561 530 4,435 16,458 8,055 200 15,868 – 393,558

⑦ Leasing NCF(=③ － ⑥) (thousands of yen) 63,402 39,985 26,863 133,675 101,660 72,930 47,794 105,356 18,909 1,520,420

Appendix

Lease Business Revenue and Expenditure by Property (2)

(Note 1) Amounts are rounded down to the nearest thousand yen. (Note 2) Lease business revenue and property-related expenses of fab Minami-Osawa and Niigata Higashibori-dori Parking Building are undisclosed due to unavoidable circumstances including a lack of

tenant consent for the disclosure of lease business revenue.


5 Appendix

Classification (Note) Lender Balance

(thousands of yen) Interest rate (Fixed/floating)

Repayment date

Short-Term Borrowings

Sumitomo Mitsui Banking Corporation Aozora Bank, Ltd. Sumitomo Mitsui Trust Bank, Limited The Bank of Fukuoka, Ltd.

4,907,700 0.73000% (Floating)

October 13, 2015

Long-Term Borrowings

Sumitomo Mitsui Banking Corporation Shinsei Bank, Limited Aozora Bank, Ltd. Resona Bank, Limited

13,363,750 1.16976% (Fixed)

October 10, 2016


Sumitomo Mitsui Banking Corporation Resona Bank, Limited Aozora Bank, Ltd. ORIX Bank Corporation

5,486,250 1.08473% (Fixed)

October 10, 2017


Sumitomo Mitsui Banking Corporation Aozora Bank, Ltd. The Mie Bank, Ltd.

6,505,375 0.93000% (Floating)

October 10, 2018


Sumitomo Mitsui Banking Corporation Kansai Urban Banking Corporation 6,693,375 1.38226%

(Fixed) October 10,

2018

Long-Term Borrowings Sumitomo Mitsui Banking Corporation 1,743,750 1.13000%

(Floating) October 10,

2019


Sumitomo Mitsui Banking Corporation The Mie Bank, Ltd. 2,992,500 1.35961%

(Fixed) October 13,

2020

Total 41,692,700

▌As of August 31, 2015 (end of fourth fiscal period)

List of Borrowings

Classification (Note) Lender Balance

(thousands of yen) Interest rate (Fixed/floating)

Repayment date


Sumitomo Mitsui Trust Bank, Limited Aozora Bank, Ltd. 1,459,130 0.72728%


2016


Sumitomo Mitsui Banking Corporation Shinsei Bank, Limited Aozora Bank, Ltd. Resona Bank, Limited

13,330,000 1.16976% (Fixed)

October 10, 2016


Sumitomo Mitsui Banking Corporation Resona Bank, Limited Aozora Bank, Ltd. ORIX Bank Corporation

5,472,500 1.08473% (Fixed)

October 10, 2017


Aozora Bank, Ltd. The Bank of Fukuoka, Ltd. The Mie Bank, Ltd. Sumitomo Mitsui Banking Corporation ORIX Bank Corporation

3,436,270 0.77728% (Floating)

October 10, 2017


Sumitomo Mitsui Banking Corporation Aozora Bank, Ltd. The Mie Bank, Ltd.

6,488,500 0.93000% (Floating)

October 10, 2018


Sumitomo Mitsui Banking Corporation Kansai Urban Banking Corporation 6,676,500 1.38226%

(Fixed) October 10,

2018

Long-Term Borrowings Sumitomo Mitsui Banking Corporation 1,645,000 1.13000%


2019


Sumitomo Mitsui Banking Corporation The Mie Bank, Ltd. 2,985,000 1.35961%

(Fixed) October 13,

2020

Total 41,492,900

▌After Refinance (as of October 13, 2015 )

(Note) “Short Term” refers to a period within one year to the repayment date and “Long Term” refers to a period of more than one year to the repayment date based on each point in time.


Main unitholders Number of investment units Percentage

Simplex Investment Advisors Inc. 11,265 15.00% Japan Trustee Services Bank, Ltd. (Trust Acct.) 8,142 10.84%

Trust and Custody Services Bank, Ltd. (Securities Investment Trust Acct.) 4,725 6.29%

The Master Trust Bank of Japan, Ltd. (Trust Acct.) 2,604 3.46%

GOLDMAN SACHS INTERNATIONAL 2,031 2.70% The Nomura Trust and Banking Co., Ltd. (Trust Acct.) 1,689 2.24%

MSCO CUSTOMER SECURITIES 899 1.19% Individual 768 1.02% SBI Securities Co., Ltd. 541 0.72% Japan Trustee Services Bank, Ltd. (Trust Acct. 9) 506 0.67%

Total 33,170 44.16%

End of the fourth fiscal period (as of Aug. 31, 2015)

Number of unitholders Percentage

Number of investment

units Percentage

Individuals, etc. 7,153 96.65% 32,738 43.59%

Financial institutions 17 0.23% 18,522 24.66%

Other domestic companies 148 2.00% 14,520 19.33%

Foreigners 59 0.80% 7,296 9.72%

Securities companies 24 0.32% 2,024 2.70%

Total 7,401 100.00% 75,100 100.00%

5 Appendix

Unitholder Status: As of August 31, 2015 (end of fourth fiscal period)

43.59%

24.66%

19.33%

9.72%

2.70%

Individuals, etc.

Financial institutions

Other domestic companies

Foreigners

Securities companies

▌Number of Investment Units

▌Number of Unitholders

Number of Unitholders and Investment Units by Unitholder Type

Main Unitholders

96.65%

0.23% 2.00% 0.80% 0.32%

Individuals, etc.

Financial institutions

Other domestic companies

Foreigners

Securities companies


5

Origination from the Investment & Asset Management Division

Approval by the Compliance Officer

Deliberation and resolution by the Compliance Committee

Deliberation and resolution by the Investment Committee

Consent of SIA REIT’s Board of Directors

Management fee system Calculation method Maximum

Management fees

Management fee 1 (Note 3) Total assets × 0.35% × (Number of months in the fiscal period / 12)

Management fee 2 (Note 3) NOI (Note 1) × 5.5%

Management fee 3 (Note 3) Total assets × DPU growth rate of management fee 3 before deductions (%) (Note 2) × (Number of months in the fiscal period / 12)

Acquisition fees Acquisition price × 1.0% (Transactions with interested parties: Acquisition price × 0.5%)

Transfer fees Transfer price × 1.0% (Transactions with interested parties: Transfer price × 0.5%)

(Note 1) NOI is the amount arrived at after deducting property-related expenses (excluding depreciation and loss on retirement of noncurrent assets) from the total of the fiscal period’s lease business revenues and silent partnership distributions.

(Note 2) “DPU growth rate of management fee 3 before deductions” is the number obtained from the following formula (however, if figures are negative, it is deemed as 0): The fiscal period’s DPU growth rate of management fee 3 before deductions ÷ the previous fiscal period’s DPU growth rate of management fee 3 before deductions – 1 Furthermore, “DPU growth rate of management fee 3 before deductions” is obtained by dividing “the amount obtained by deducting loss carried forward from the net income before income taxes of management fee 3 before deductions” by “the fiscal period’s outstanding number of investment units as of the period’s settlement.”

(Note 3) The rates of management fee 1 are 0.20% for the first and second fiscal periods. Management fee 2 will arise starting from the third fiscal period and management fee 3 from the fourth fiscal period.

Total assets × 0.55% (annual rate) Total assets × 0.65%

(annual rate)

Appendix

Governance System and Management Fee Scheme Governance System

▌The Asset Management Company’s procedures for making decisions concerning related-party transactions

Decisions on proposed acquisition or sale of assets are made by the Asset Management Company. They must originate from the Investment & Asset Management Division, be approved by the Compliance Officer, and be authorized by resolution of the Compliance Committee and the Investment Committee. However, if the acquisition or sale of an asset would constitute a related-party transaction, the consent of SIA REIT’s Board of Directors must also be obtained in addition to the above procedures.

Introduction of Management Fee System Linked to the Rate of Increase of the Amount Available for Dividends per Unit


5

Administrative Agent/Transfer Agent

Sumitomo Mitsui Trust Bank, Limited

Sponsor

Simplex Investment Advisors Inc.

Investment Corporation

Asset Custodian

Mitsubishi UFJ Trust and Banking Corporation

Accounting Auditor

Ernst & Young ShinNihon LLC

General Meeting of Unitholders

Board of Directors

Executive Director: Hiroyuki Katsuno Supervisory Director: Nobuhiro Nasu Supervisory Director: Gen Takizawa

Asset Management Company

Simplex REIT Partners Inc.

Supporting Companies

Simplex Real Estate Management Inc. Aetos Japan, LLC

１

2 3

4 5

１

2

3

4

5

Jun. 20, 2013 Notification of incorporation of SIA REIT by the organizer (Simplex REIT Partners Inc.) pursuant to Article 69 of the Investment Trusts Act

Jun. 25, 2013 Registration of incorporation pursuant to Article 166 of the Investment Trusts Act, SIA REIT incorporated

Jul. 8, 2013 Application for registration pursuant to Article 188 of the Investment Trusts Act

Jul. 23, 2013 Registration approved by the Prime Minister pursuant to Article 189 of the Investment Trusts Act (Director General of the Kanto Local Finance Bureau Registration No. 85)

Oct. 9, 2013 Listed on the real estate securities market of the Tokyo Stock Exchange

Appendix

Overview of SIA REIT

Asset management contract

Administrative agency entrustment, transfer agency entrustment

Asset custodian entrustment

Sponsor/support contract

Sponsor/support contract, pipeline support contract

History


5

Organization Name Simplex REIT Partners Inc.

Established July 1, 2005

Capital ¥50 million

Representative Hiroyuki Katsuno, President and Representative Director

Address of head office

Shin-Kasumigaseki Building 19th Floor, 3-3-2 Kasumigaseki, Chiyoda Ward, Tokyo 100-6019, Japan

No. of directors/employees 20 (As of August 31, 2015) (Note)

Shareholder Simplex Investment Advisors Inc. (100%)

Membership The Investment Trusts Association, Japan

Licenses, etc.

Investment Management Business: Director General of Kanto Local Finance Bureau (Financial Instruments) Registration No. 342

Real Estate Brokerage Business: Governor of Tokyo (3) Registration No. 84787

Trading Agency Etc. License: Minister of Land, Infrastructure, Transport and Tourism License No. 46

Investment Committee

Compliance Office

Compliance Committee

Internal Audit Office

Finance & Administration Division

Investment & Asset Management Division

CEO & President

General Meeting of Shareholders

Board of Directors

Corporate Auditor

(Note) Includes full-time auditors, contract employees, and employees on postings from other companies. Does not include outside directors or temporary staff. Includes members holding concurrent positions among SIA Group companies.

Appendix

Overview of the Asset Management Company


Disclaimer

51

The contents of this document are provided solely for informational purposes and are not intended for the purpose of soliciting investment in, or as a recommendation to purchase or sell, any specific products.

Besides descriptions of SIA REIT, Inc. (hereafter “SIA REIT) this document contains charts, data, etc. prepared by Simplex REIT Partners Inc. (hereafter the “Asset Management Company”) based on data, indices, etc. released by third parties as well as descriptions of the Asset Management Company’s analysis, judgments and other opinions as of the date of this document.

The content of this document is unaudited. SIA REIT does not guarantee the accuracy and completeness of the content. Moreover, analysis, judgments, etc. of the Asset Management Company indicate opinions as of the date of this document. Readers are cautioned that such may be changed or deleted without prior notice.

Neither SIA REIT nor the Asset Management Company bear any responsibility with regard to the accuracy of data, indices, etc. released by third parties (including data based on real estate appraisal reports).

This document contains forward-looking statements regarding forecasts and performance. The forward-looking statements do not guarantee SIA REIT’s future performance, financial conditions, etc.

Asset Management Company: Simplex REIT Partners Inc. License No. 342, Director-General, Kanto Finance Bureau (Financial Instruments and Exchange Act),

Financial Instruments Business Operator; Member, The Investment Trusts Association, Japan

Documents

Presentation Material for the Fourth Fiscal Period (Ended ...one-reit.com/file/en-term-cda370988be85e70c7955c7732d7525696c… · Dividends per unit were ¥11,822, ¥822 higher than