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OFFON

DAIWA SECURITIES LIVING INVESTMENT CORPORATION

(8986)
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Daiwa Securities Living Investment : Supplementary Materials to the Press Release for Announced Today

09/10/2021 | 02:32am EDT

Supplementary Materials

"Notice Concerning Revision to Forecasts of Operating Results and Distribution for the Fiscal Period Ending March 2022 (32nd Fiscal Period) and Forecasts of Operating Results and Distribution for the Fiscal Period Ending September 2022 (33rd Fiscal Period)"

Securities Code: 8986 | https://www.daiwa-securities-living.co.jp/en/

Disclaimer

This document is a summary of the information contained in the "Notice Concerning Revision to Forecasts of Operating Results and Distribution for the Fiscal Period Ending March 2022 (32nd Fiscal Period) and Forecasts of Operating Results and Distribution for the Fiscal Period Ending September 2022 (33rd Fiscal Period)" announced on September 10, 2021, as well as additional information in accordance with the listing rules of the Tokyo Stock Exchange.

This document does not constitute an offer to sell or solicitation of an offer to buy any investment unit or other financial instruments of Daiwa Securities Living Investment Corporation (below, the "Investment Corporation"). Investors should exercise their own judgment and take full responsibility for making investment decisions after reviewing the prospectus, including any amendments thereto, in relation to the issuance of any new investment units.

There is a possibility that losses may be incurred due to fluctuations in the price of the investment units when trading, etc. the investment units of the Investment Corporation.

This document is not a disclosure document or an asset management report under the Financial Instruments and Exchange Act or Act on Investment Trusts and Investment Corporations.

The Investment Corporation and Daiwa Real Estate Asset Management Co. Ltd. (below, the "Asset Manager"), which is entrusted with the management of its assets, have made every effort to ensure the accuracy of the information provided in this document. However, the accuracy, adequacy and completeness of the information, whether prepared by the Investment Corporation or the Asset Manager or received from a third party, are not guaranteed.

Of the information contained in this document, all statements other than those relating to past or present facts are forward-looking statements that are based on the assumptions and premises of the Investment Corporation or the Asset Manager in light of the information available as of the date of preparation of this document (however, any date specifically noted in this document shall be the date of record. The same applies hereinafter.). There is no guarantee that such assumptions and premises are correct. The forward-looking statements are based on the Investment Corporation's investment policy, applicable laws and regulations, market environment, interest rate situation, practices and other facts as of the date of preparation of this document, and do not reflect or take into account any changes in circumstances that occurred after the date of preparation of this document. Forward-looking statements, whether explicit or implied, involve known risks and uncertainties or unknown risks and other factors, which may cause the actual results, performance, achievements or financial position of the Investment Corporation to materially differ from the actual results, performance, achievements or financial position. The forward-looking statements in this document are not guarantees of future performance or prospects.

This document contains statements about the future performance of the Investment Corporation, as well as charts, graphs, data, etc. prepared by the Asset Manager based on information, etc. provided to the Investment Corporation or the Asset Manager by third parties or published by third parties, and includes analyses, judgments and other opinions of the Investment Corporation and the Asset Manager concerning said information. There are varying views on these matters, and the Investment Corporation and the Asset Manager may alter their views in the future.

The contents of this document are subject to change or deletion without notice. The Investment Corporation and the Asset Manager are under no obligation to update or announce the contents of this document (including forward-looking statements).

No part of this document may be reproduced or transmitted in any form or by any means, without the prior consent of the Investment Corporation and the Asset Manager.

REIT Issuer: Daiwa Securities Living Investment Corporation (securities code: 8986)

Asset Manager: Daiwa Real Estate Asset Management Co. Ltd. (Financial Instruments Firm: Director-General of the Kanto Local Finance Bureau (Kinsho) No. 355;

member association: The Investment Trusts Association, Japan)

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it

1

intended for the purposes of solicitation. The Investment Corporation advises readers to make investment decisions at their own judgment.

Distributions (Impact on Distribution Per Unit)

Since its merger with Nippon Healthcare Investment Corporation, Daiwa Securities Living Investment Corporation (the "Investment Corporation") has aimed to maintain distributions while pursuing growth through continuous external growth as well as agile reversal of internal reserves

Announced on May 20, 2021

Announced on September 10, 2021

JPY 2,200

JPY 2,150

JPY 2,100

JPY 2,050

JPY 2,000

JPY 1,950

JPY 1,900

Forecast net income

Forecast reversal of

internal reserves

* All represents a per-unit figure

JPY 2,160JPY 2,160

JPY 98

JPY 81

(JPY 61)

(JPY 44)

(equivalent of

(equivalent of

additional

additional

reversal)

reversal)

JPY 2,078

JPY 2,061

*1

*1

32nd FP

Comparison (with

initial forecast)

+20 yen

JPY 2,180

JPY 2,180

JPY 93

JPY 78

(JPY 57)

(JPY 42)

(equivalent of

(equivalent of

additional

additional

reversal)

reversal)

32nd FP

Comparison (with

initial forecast)

+1.1%

JPY 2,101

JPY 2,086

*2

*2

LTV *3

50.94444(down 0.4% from end of Aug. 2021)

Acquisition capacity to LTV after the Public Offering, etc.

(assuming maximum LTV of 52%)*4

Approx. 7.8 billion yen

Free Cash Flow*5

3 billion yen / year

Pipeline*6

Total of more than

10 billion yen

Balance of internal reserves

at period end*7

As of the end of 30th FP (end of Mar. 2021)

JPY 0

No. of

properties

Number of investment units issued

FP ending

FP ending

FP ending

FP ending

Approx. 8.1 billion yen

September 2021

March 2022

March 2022

September 2022

31st FP

32nd FP

32nd FP

33rd FP

(forecast)

(Initial forecast)

(New Forecast)

(New Forecast)

We will continue

231

231

238

238

properties

properties

properties (planned)

properties (planned) pursuing increase of

units

units

units

units

unitholder value

2,131,546

2,131,546

2,205,546

2,205,546

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it

2

intended for the purposes of solicitation. The Investment Corporation advises readers to make investment decisions at their own judgment.

Explanatory Notes

*1: Graphs and figures are prepared/calculated based on the assumptions of the forecast figures announced in the 30th Fiscal Period Financial Report (REIT) dated May 20, 2021. The forecast figures, etc. are based on certain assumptions at present, and the actual figures could fluctuate due to the future acquisition and disposition of properties as well as changes in the real estate market and other conditions surrounding the Investment Corporation. In addition, these forecasts do not guarantee the distribution amounts.

*2: Graphs and figures are prepared/calculated based on the preconditions for the forecast figures stated in "Notice Concerning Revision to Forecasts of Operating Results and Distribution for the Fiscal Period Ending March 2022 (32nd Fiscal Period) and Forecasts of Operating Results and Distribution for the Fiscal Period Ending September 2022 (33rd Fiscal Period)" separately announced on September 10, 2021. The forecast figures, etc. are based on certain assumptions at present, and the actual figures could fluctuate due to the future acquisition and disposition of properties as well as changes in the real estate market and other conditions surrounding the Investment Corporation. In addition, these forecasts do not guarantee the distribution amounts.

*3: This indicates the total assets LTV after the Public Offering, etc. and is calculated by rounding the figure obtained in the following formula to the nearest first decimal place. In the following formula, "Public Offering" refers to the primary offering indicated in the press release "Notice Concerning the Issuance of New Investment Units and Secondary Offering" dated September 10, 2021, while "Third-Party Allotment" refers to the third- party allotment as defined in the same press release. LTV after the Public Offering, etc. = [Total interest-bearing debt after the Public Offering, etc. (*) / (Total assets in the balance sheet as of the end of the 30th FP ended Mar. 2021 + Interest-bearing debt net change total assets amount from April 1, 2021, to the end of August 2021 + Net change in interest-bearing debt from the Public Offering, etc. + Total issue price of the Public Offering (**))] × 100

  • "Total interest-bearing debt after the Public offering, etc." is sought by applying the net change in interest-bearing debt from April 1, 2021, to the end of August 2021 as well as the net change in interest-bearing debt from April 1, 2021, to November 30, 2021, assuming that the Borrowing (for details of the Borrowing, see the press release "Notice Concerning Borrowing of Funds and Early Repayment of Loans" dated September 10, 2021) is implemented, that 950 million yen of the Borrowing which comprise long-term loans will be allotted to the early repayment of existing short-term loans which is scheduled for September 30, 2021, and that 370 million yen of the Borrowing which comprise short-term loans will be repaid before maturity as of November 30, 2021, using the proceeds from the Public Offering and Third-Party Allotment (these will collectively be referred to as the "Public Offering, etc."), to the amount of interest-bearing debt as of the end of the 30th Fiscal Period ended March 2021. The final loan amount of the Borrowing may change before the execution of borrowing.
  • "Total issue price of the Public Offering" is sought by adding up the total issue price of 8,090 million yen of the Primary Offering (***) and the total issue price of 404 million yen of the Third-Party Allotment.
  • The total issue price (maximum) of the primary offering and the Third-Party Allotment are estimates calculated based on the closing price for regular trading of investment units on the Tokyo Stock Exchange as of August 27, 2021 (Friday). Moreover, for the Third-Party Allotment, it is assumed that all the investment units to be offered will be subscribed and paid by Daiwa Securities Co., Ltd. If the actual issue price of the Public Offering is lower than the expected amount stated above, the actual LTV may be higher than the figure above to a corresponding degree. Furthermore, if the actual issue price of the Public Offering is higher than the expected amount stated above, the actual LTV may be lower than the figure above to a corresponding degree.

*4: This is the estimated amount of debt that can be additionally procured through borrowings from financial institutions and issuance of investment corporation bonds, etc. assuming that the LTV after the Public Offering, etc. can be raised to 52%. The actual figure may differ from the indicated amount. Furthermore, with regard to the indicated amount, there is no guarantee that such an amount of debt can be procured or that properties can be acquired with the debt. As of the date of this document, there are no properties other than assets to be acquired released in "Notice Concerning Acquisition and Leasing of Assets (2 Rental Apartments and 4 Healthcare Facilities)" and "Notice Concerning Acquisition of Asset ((Temporary Name) Kuramae Project)" that the Investment Corporation has decided to acquire.

*5: "Free cash flow" refers to the amount of depreciation for each fiscal period, excluding the amount of capital expenditures and the amount allocated to distributions by reversing retained earnings. The total actual amount for the 29th and 30th fiscal periods (April 1, 2020 to March 31, 2021) is 3 billion yen.

*6: "Pipeline" is part of the sponsor support and refers to the portfolio comprising of properties owned by bridge funds wholly owned by Daiwa Securities Group or in which Daiwa Securities Group plans to invest as well as bridge funds wholly owned by wholly owned subsidiaries of Daiwa Securities Group or in which wholly owned subsidiaries of Daiwa Securities plan to invest, or of which agreements for acquisition have been concluded by the above bridge funds (in cases of development projects in which the bridge fund or wholly owned subsidiary of Daiwa Securities Group is the party ordering the construction of building, then rights for the lot to be developed are to be owned or an agreement for acquisition to have been concluded) and for which the Investment Corporation has preferential negotiation rights, and the total amount is based on the amounts indicated in documents that the Investment Corporation has submitted to indicate its intensions for purchase. As of the date of this document, the acquisition of these properties by the Investment Corporation has not been determined, nor is there any guarantee that the Investment Corporation will be able to acquire the pipeline properties. Furthermore, if the acquisitions are made by the Investment Corporation there is no guarantee that the acquisitions can be made with the indicated amount.

*7: This is the amount sought by applying "reversal of voluntary reserves" and "voluntary reserves" in the account concerning cash distributions for the 30th Fiscal Period ended March 2021 to "voluntary reserves" in the balance sheet for the same period. Furthermore, "(equivalent of additional reversal)" indicated in "forecast reversal of internal reserves" within the graph refers to the portion of forecast reversal of internal reserves that is the equivalent of the reversal of the amount above the minimum reversal required by laws and regulations.

This document is not material disclosed in compliance with the Financial Instruments and Exchange Act or any regulation of similar nature, nor is it

3

intended for the purposes of solicitation. The Investment Corporation advises readers to make investment decisions at their own judgment.

Disclaimer

Japan Rental Housing Investments Inc. published this content on 10 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 September 2021 06:31:06 UTC.


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Sales 2022 22 096 M 194 M 194 M
Net income 2022 9 107 M 80,1 M 80,1 M
Net Debt 2022 - - -
P/E ratio 2022 27,1x
Yield 2022 3,81%
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Last Close Price 113 400,00 
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Managers and Directors
Toshio Fukushima President & Representative Director
Akira Yamanouchi Chairman
Kouhei Yabuta Supervisory Officer
Jun Nagamine Supervisory Officer
Ikuo Shoda Executive Officer