Daiwa Securities Living Investment : Financial Report

Financial Results for the Fiscal Period Ended March 2024 (36th Fiscal Period)

Code：8986

May 22, 2024

Gran Casa Edogawabashi (Acquired on Oct 2023)

Topics

• Rent increase upon tenant turnover and maintaining high occupancy rate (Rental Housing)

(Refer page from 9 to 12)

Monthly rent for tenant turnover continues to increase, continuing from the previous term, record high

36th FP : +3.0％	36th FP Term End : 98.1%
(+JPY 4,010 thousand)	36th FP Average : 97.8%

• Strong leasing performance for newly acquired properties

(Refer page 18)

We achieved more leasing than expected for 16 new/recently built properties acquired between October last year and March this year.

The rental profit/loss for these properties was JPY 93 million higher than expected.

• Rating

(Refer page 21)

JCR's rating was upgraded from "AA- Stable" to "AA- Positive"

R&I's rating was upgraded from "A+ Positive" to "AA- Stable"

(Note) "DLI" used in this document refers to Daiwa Securities Living Investment Corporation, and "Asset Management Company" refers to Daiwa Real Estate Asset Management,	1
which is the asset management company of Daiwa Securities Living Investment Corporation.

Table of Contents

Section 1
Financial Results for the 36th (March 2024) Fiscal Period
Forecast for the 37th (September 2024) and the 38th (March 2025) Fiscal Periods	P 3
Section 2
Operation Status of Rental Housing	P 8
Section 3
Operation Status of Healthcare Facility	P 13
Section 4
Summary of External Growth	P 17
Section 5
Financial Strategy and Status	P 20
Section 6
Strategy	P 23

Section 7

Initiatives for ESG

Appendices

1. 28 P 30

Unless otherwise noted in this document, amounts are rounded down to the nearest whole number, percentage and average.

2

Section 1

Financial Results for the 36th (March 2024) Fiscal Period

Forecast for the 37th (September 2024) and the 38th (March 2025) Fiscal Periods

Results for the 35th Fiscal Period vs. the 36th Fiscal Period

(JPY million)	(1) 35th FP	(2) 36th FP	Difference	Key Factors of the Difference
	Results	Results	(2) - (1)
Operating Revenues	12,769	13,284	+514	Increase in rent, common area fees, gain on sale of real estate, etc. due
to property acquisition through public offering, etc.
Operating Expenses	6,533	6,684	+151	Increase in depreciation expense, AM fee, etc.
due to property acquisition through public offering, etc.
Non-operating	(712)	(785)	(72)	Increase in expenses due to interest expense and investment unit
Gain or Loss				issuance costs
Net Income	5,523	5,813	+290
Reversal of Temporary	79	79	－
Difference Adjustment /
－	－	－
Distribution Reserve
Total Distribution Amount	5,044	5,535	+491

(JPY per unit)

Operating	Operating	Non-operating
Revenue	Expense	Gain or Loss
+213	+62	(30)

Net Income

2,442

Issued

2,260,890 units

35th FP

Results

	Distribution
	2,231
Internal	Temporary	Diluted
due to PO
Reserves	Difference	148
Adjustment
246
35
	Net Income
	2,195

Rent +87	Gain on Sale of	Repair +38
Restoration	Real Estate	Restoration (50)
(23)	+142	Advertise +29
		Tax (15)
		Depreciation +16
			AM Fee2 +10
				Tax +20
		32
	142			30
71

• Minus expenses are added to distribution
• Only the major difference factors are listed

Interest Exp. +8
Issuance Cost +13
				36th FP
				Results
				Distribution
				2,300	Distribution
				Temporary
					+69
	30		Internal	Difference
			Reserves	Adjustment
			148	32
		Net Income
2,415		Net Income
				2,267
					Issued
				2,406,890 units

4

36th Fiscal Period: Initial Forecast vs. Results

(JPY million)	(1) Forecast	(2) 36th FP	Difference	Key Factors of the Difference
	(Nov 22, 2023)	Results	(2) - (1)
Operating Revenues	13,078	13,284	+205	Increase in rent and common expenses due to high occupancy
Operating Expenses	6,503	6,684	+181	Increase due to repair expense, restoration expense, and PM fee
Non-operating	(801)	(785)	+16
Gain or Loss
Net Income	5,772	5,813	+40
Reversal of Temporary	79	79	－
Difference Adjustment /
－	－	－
Distribution Reserve
Total Distribution Amount	5,535	5,535	－

(JPY per unit)

Operating	Operating	Non-operating
Revenue	Expense	Gain or Loss
+85	+75	+6

Internal

Reserves

131

Net Income

2,398

Issued

2,406,890 units

Rent +72

Other +10

Forecast

Distribution
2,300
Temporary	87
Difference
Adjustment
32

Net Income

2,267

Gain on Sale of	Repair +50
Real Estate (2)	Restoration +13
	PM Fee +10

Tax +5

2	70
	5

• Minus expenses are added to distribution
• Only the major difference factors are listed

Interest Exp. (2)
		36th FP
		Results
		Distribution
		2,300	Distribution
		Temporary	No change
6	Internal	Difference
	Reserves	Adjustment
	148	32
	Net Income
	2,415	Net Income
		2,267
			Issued
		2,406,890 units

5

Forecast for the 37th (Sep 2024) and the 38th Fiscal Periods (Mar 2025)

		(1)	(2)	(2)-(1)
		36th FP	37th FP	Differen	Key Factors of the Difference
		Results	Forecast	ce
	Operating	13,284	12,637	(646)	Rent and Common Benefit Revenue	+480
	Revenues	Restoration Income	+30
	Average Occ. Rate	97.8%	97.6%		Gain on sale of real estate properties	(1,144)
	Rent Per tsubo *	JPY 9,375	JPY 9,480
					(Differences in Operating Expenses)
					Tax Expense		+57
					Repair Expense		(105)
					Restoration Expense	+79
	Operating				Advertise Expense		(44)
	6,684	6,703	+18	Depreciation		+57
	Expenses
					(Differences in Other Expenses)
					Asset Management Fee 1,2	(26)
					Appraisal, ER Fee		+5
					Non-deductible consumption tax	(26)
	Non-operating				Interest Expense		+127
	(785)	(903)	(118)	Borrowing related expenses	+8
	Gain or Loss
				Unit Issuance Expense	(31)
	Net Income	5,813	5,030	(782)	Net Income	36th FP ：JPY 2,415
	per Unit	37th FP ：JPY 2,090
	Reversal of Temporary	79	505	+426	Reversal of reserve for temporary difference
	Difference Adjustment /				adjustments to realize JPY 2,300 per unit
	Distribution Reserve	-	-	-
	Total Distribution	5,535	5,535	-		-
	Amount
	Distribution	2,300	2,300	-	Maintained JPY 2,300 depending on distribution policy
	per Unit (JPY)

* Average Occupancy Rate and Rent Per tsubo are value only for Rental Housing.

(JPY million)

(3)	(3)-(2)			(JPY million)
38th FP	Differen	Key Factors of the Difference
Forecast	ce
12,667	+29	Rent and Common Benefit Revenue	+58
Renewal Revenue		(15)
97.7%		Restoration Income	(11)
JPY 9,504
		(Differences in Operating Expenses)
		Utility Expense		+21
		Repair Expense		(33)
		Restoration Expense	(43)
		Trust Fee		+6
6,619	(84)	Other Expense		(36)
		(Differences in Other Expenses)
		Asset Management Fee 1,2	+5
		Non-deductible consumption tax	(7)
		Interest Expense		(12)
(921)	(17)	Borrowing related expenses	+6
5,126	+96	Net Income	38th FP ：JPY 2,130
per Unit

409 (96) Reversal of reserve for temporary difference

-	-	adjustments to realize JPY 2,300 per unit
5,535	-	-
2,300	-	Maintained JPY 2,300 depending on distribution policy

6

Distribution Growth: Raising Capabilities Derived from External Growth

Maintaining distribution and achieving distribution growth through continuous external growth and flexible reversal of retained earnings since the merger with Nippon Healthcare Investment Corporation

(JPY)

2,300

2,200

2,100

2,000

1,900

1,800

0

Number of properties

Announced on	Announced on
Nov 22, 2023	May 22, 2024

Net income

Net income equivalent to capital gain

Reversal of retained earnings	2,300	2,300	2,300	2,300
※ All values are per unit
	32	32
	2,231 +3.1％
			209	169
	35
			(Additional Reversal)	(Additional Reversal)
				(176)	(137)
Before	108
		327
Merger		346
2,028
41	2,087
		1,920	1,939	2,090	2,130
1,987

March 31, 2020	September 30, 2023	March 31, 2024	March 31, 2024	September 30, 2024	March 31, 2025
28th FP	35th FP	36th FP	36th FP	37th FP	38th FP
(results)	(results)	(initial forecast)	(result)	(current forecast)	(current forecast)
193	238	253	253	253	253

Minimum value for the DPU is set to 2,300 yen from 36th period onwards by actively returning retained earnings.

Plan to continue transferring assets, and plan to further return profits through the realization of unrealized gains.

(Note) Other notes on this page are provided on the page 74.

7

Section 2

Operation Status of Rental Housing

[Residence] Rent Trends

Rent Trends at Tenant Turnover

• Rent fluctuation rate

100%

		Increase		Stay		Decrease

75%

65.6% 75.9% 79.7% 71.0% 65.0% 56.2% 60.9% 67.0% 71.9% 73.7%

50%

			13.8%					19.2%	20.4%
25%		12.0%		15.3%	19.1%		17.8%	17.8%	16.3%
				10.8%			24.5%
			20.5%				18.7%
			12.1%	9.5%	13.7%	15.9%	15.1%	10.3%	10.0%
	0%
Sep 2019	Mar 2020	Sep 2020	Mar 2021	Sep 2021	Mar 2022	Sep 2022	Mar 2023	Sep 2023	Mar 2024
			27th FP	28th FP	29th FP	30th FP	31st FP	32nd FP	33rd FP	34th FP	35th FP	36th FP

• Percentage Change（Including Common Service Fee）

4%										+3.0%
	+2.1%	+1.7%	+1.6%	+1.5%		+1.5%	+1.9%	+2.5%
2%	+0.9%
				+0.6%
0%
(2%)
Sep 2019	Mar 2020	Sep 2020	Mar 2021	Sep 2021	Mar 2022	Sep 2022	Mar 2023	Sep 2023	Mar 2024
	27th FP	28th FP	29th FP	30th FP	31st FP	32nd FP	33rd FP	34th FP	35th FP	36th FP

• Change in Rent（Including Common Service Fee）

	# of units	Share	Previous Rent	Previous Rent	Change	Change
	(JPY)	(JPY)	(JPY)
Increase	955	73.7%	99,459,048	103,936,900	4,477,852	4.5%
Stay	211	16.3%	22,137,800	22,137,800	-	-
Decrease	129	10.0%	10,426,641	9,959,200	(467,441)	(4.5%)
Total	1,295	100.0%	132,023,489	136,033,900	* 4,010,411	3.0%

(Note) Calculated by excluding residential units for which prior rents are unknown due to cancellation of the sublease agreement and other factors among the newly acquired 1,614 properties, and rental units with usages other than residential.*Result in year-ago period (34th FP): JPY 2,544,400

Rent Trends at Contract Renewal

• Rent fluctuation rate

100% 4.4% 9.8% 13.2% 13.5% 11.6% 11.8% 13.8% 10.1% 12.2% 16.3%

75%				Increase		Stay		Decrease

50% 95.6% 90.2% 86.8% 86.5% 88.4% 88.2% 86.2% 89.8% 87.8% 83.7%

25%

	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%	0.1%	0.0%	0.0%
0%
Sep 2019	Mar 2020	Sep 2020	Mar 2021	Sep 2021	Mar 2022	Sep 2022	Mar 2023	Sep 2023	Mar 2024
	27th FP	28th FP	29th FP	30th FP	31st FP	32nd FP	33rd FP	34th FP	35th FP	36th FP

• Percentage Change（Including Common Service Fee）

0.8%	+0.3%	+0.4%	+0.4%	+0.4%	+0.4%	+0.5%	+0.4%	+0.4%	+0.6%
0.4%
+0.1%

0.0%

(0.4%)
Sep 2019	Mar 2020	Sep 2020	Mar 2021	Sep 2021	Mar 2022	Sep 2022	Mar 2023	Sep 2023	Mar 2024
	27th FP	28th FP	29th FP	30th FP	31st FP	32nd FP	33rd FP	34th FP	35th FP	36th FP

• Change in Rent（Including Common Service Fee）

	# of units	Share	Previous Rent	Previous Rent	Change	Change
	(JPY)	(JPY)	(JPY)
Increase	353	16.3%	44,105,400	45,404,900	1,299,500	2.9%
Stay	1,809	83.7%	186,771,522	186,771,522	-	-
Decrease	-	-	-	-	-	-
Total	2,162	100.0%	230,876,922	232,176,422	1,299,500	0.6%

9