Sekisui House Reit, Inc. announces that SHR has determined to change the master lease agreement of Sha Maison Stage Akihabara from a fixed-rent type master lease to a pass-through type master lease owned by SHR. SHR's policy is to select lease schemes for owned properties from the following: direct contract with tenants, pass-through type master lease or fixed-rent type master lease, based on a comprehensive consideration of factors such as the status of assets under management, stability of rental income, and efficiency of operation and management. Regarding the lease scheme for the Property, SHR has adopted a fixed-rent type master lease that emphasizes the stability of rental income.

However, in the current rental housing market, internal growth is expected as the occupancy rate remains strong for SHR's residential portfolio and the change in rent rate for new contracts is on an upward trend. As the Agreement is coming to an end as of January 20, 2024, SHR has reconsidered changes to its leasing scheme in light of the current operating environment, operating status, and other factors of the area surrounding the Property. As a result, SHR has concluded that pursuing internal growth opportunities will contribute to maximizing unitholder value and will change the leasing scheme from a fixed-rent type master lease to a pass-through type master lease (the "Change").

Summary of the Change: Master lease company; Master lease type; Contract period; Monthly rent; and Leasehold and security deposits. Before the Change: Sekisui House Real Estate Tokyo Ltd.; Fixed-rent type master lease; From January 21, 2019 to January 20, 2024; JPY 2,525,000; and JPY 4,799,000. After the Change: Sekisui House Real Estate Tokyo Ltd.; Pass-through type master lease; From January 21, 2024 to January 31, 2034; JPY 2,774,000; and JPY 3,367,000.