As of July 19, 2018 Daiwa Office Investment Corporation Earnings Announcement for the 25th Fiscal Period (Fiscal Period ended May 2018) Securities Code: 8976 Contents Overview of Daiwa Office Investment Corporation Properties Subject to Leasing Improvement in the Fiscal Period ending November 2018 (26th FP) 23 Topics of the Fiscal Period ended May 2018 (25th FP) 3 Purpose of Large-scale Repair Work and Cases of Construction Change in Major Portfolio Indices 4 Work in the Fiscal Period ended May 2018 24 Use of 30 Billion Yen of Surplus Funds 5 Efforts on ESG 26 Changes in Investment Unit Price for the Fiscal Period ended May 2018 onward 6 Section 3 Section 1 External Growth Fiscal Period ended May 2018 (25th Fiscal Period) Acquisition/Sale Policy and Status of Deliberation for Performance Highlights and Forecasts Property Acquisitions 29 Highlights of the Fiscal Period ended May 2018 (25th FP) 9 Actual Results of Asset Replacement in the Fiscal Period Highlights of Forecasts for the Fiscal Periods ending November ended May 2018 30 2018 and May 2019 (26th and 27th FP) 10 Newly Acquired Properties in the Fiscal Period Changes in Dividends 11 ending November 2018 31 Changes in Rents and Common Area Fees 12 Changes in Asset Size and Trading Performance 33 Section 2 Section 4 Financial Strategy Internal Growth Status of Interest-bearing Liabilities 35 Leasing Market of Tokyo Office Buildings 15 Unitholders as of the End of the May 2018 (25th) Fiscal Period 38 Analyses of Leasing Income 16 Change in Asset Management Fee System 39 Portfolio Map: Increase and Decrease in Unit Contract Rent Future Initiatives 40 Compared with Previous Fiscal Period 20 Internal Growth Strategies 21 Occupancy Status of Properties Subject to Leasing Improvement Appendix in the Fiscal Period ended May 2018 (25th FP) 22 This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment. 1 Disclaimer This material is solely for the purpose of providing information and is not intended for the purpose of offering or soliciting investment, or as a recommendation to purchase or sell any specific product. Please refer any inquiries on potential purchases of the investment units of Daiwa Office Investment Corporation to a securities dealer. This document is not intended to provide information to meet the requirements of Japan’s Financial Instruments and Exchange Act or Act on Investment Trusts and Investment Corporations, or any associated cabinet orders, cabinet office ordinances, rules, or any rules governing companies listed on the Tokyo Stock Exchange, or any other applicable rules, nor is it a disclosure document or statement of financial performance prepared in accordance with the provisions of any of the foregoing. This document contains forward-looking statements. However, these forward-looking statements are based on certain assumptions and judgments made using currently available information, and there are a number of unknown risks and uncertainties. These forward-looking statements are not a guarantee of future performance or management results of Daiwa Office Investment Corporation, and actual results may materially differ from any explicit or implicit forecasts contained herein. Although the information contained in this document is the best available at the time of publication, no assurances can be given regarding the accuracy and certainty of this information. The content of this document may be modified or withdrawn without prior notice. Reproduction or use of the contents included in this document without prior approval is prohibited. This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment. 2 Topics of the Fiscal Period ended May 2018 (25th FP) • Conducted large-scale asset replacement worth 117.4 billion yen in total for the fiscal periods ended May 2018 and ending November 2018 Asset replacement and • Allocated 23.32 billion yen out of approximately 30 billion yen secured through effective use of 30 billion asset replacement to the three scenarios (contribution to dividends is expected to yen of surplus funds increase by 383 yen) • Various major indices of the portfolio improved with the above measures • Occupancy rate as of the end of the fiscal period ended May 2018 was 99.0%, the highest level ever (forecasted occupancy rate as of January 2018: 98.0%) Steady internal growth • The growth rate of dividend resource remained at a high level with the renewal of contracts and occupancy by new tenants • Strategically implement large-scale repair work by also considering additional Value enhancement through construction work in the case increase in unit rent and reduction of expenses can large-scale repair work be targeted through value enhancement, in addition to appropriate functional maintenance and recovery of properties. This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment. 3 Change in Major Portfolio Indices Various major indices increased in the portfolio for one and a half years from the fiscal period ended November 2017 through asset replacement, internal growth and effective use of 30 billion yen of surplus funds (Note 1) The sale of Shinjuku Maynds Tower in the 25th FP is a partial sale. Therefore, the remaining owned portion is counted as 1 property in the number of properties owned as of the end of the 27th FP. The number of properties owned as of the end of the 27th FP reflects only properties for which contracts have been concluded and disclosed. (Note 2) NOI yield is calculated using the following formula: Numerator: Annualized NOI does not include costs related to the Investment Corporation. Annualized actual NOI is used for the end of the 24th FP, annualized forecasted NOI for the 27th FP is used for NOI of assets acquired in the 25th FP and 26th FP, annualized actual NOI for the 24th FP is used for NOI of assets sold in the 25th FP, and annualized forecasted NOI for the 27th FP is used for the end of the 27th FP. Denominator: Period-end book value is used for the book value for the end of the 24th FP and the book value for the end of the 27th FP is calculated by adding assets acquired (scheduled to be acquired) in the 26th FP to the book value for the end of the 25th FP. (Note 3) The ratio of investment in Shinjuku Maynds Tower is the ratio of Shinjuku Maynds Tower’s acquisition price to the total acquisition price. (Note 4) NAV per unit= (Unitholders’ capital +Total appraisal value at the end of fiscal period − Total property book value at the end of fiscal period) / Number of investment units issued and outstanding. NAV per unit as of the end of the 27th FP is calculated based on NAV per unit as of the end of the 25th FP (Note 5) LTV as of the end of the 27th FP is calculated under the assumption total interest bearing liabilities for the 28th FP is 187,950 million yen based on the total assets as of the end of the 25th FP. This document is not material disclosed in compliance with the Financial Instruments and Exchange Law or any regulation of similar nature, nor is it intended for the purposes of solicitation. Daiwa Office Investment Corporation advises readers to make investment decisions at their own judgment. 4 Use of 30 Billion Yen of Surplus Funds 30 billion yen of surplus funds incurred with the asset replacement in the 25th FP The amount of impact on dividend per unit was 383 yen in total as a result of utilizing a total of approximately 23.32 billion yen Calculation: Use of funds Amount of impact on dividend per unit Fiscal period ending May 2019 (27th FP) ＜Prime Kanda Building: Kanda-Sudacho, Chiyoda-ku (1-minute walk from Iwamotocho Station on the Toei Shinjuku Line)＞ Acquisition price (Note 1): 1.8 billion yen, NOI yield: 3.8% (as of acquisition (Note 2)) → 4.2% (mid-term assumption (Note 3)) 1. Allot to Structure/Floor: S/RC / B1 / 10F acquisition of +146 yen new properties ＜Kita-Shinagawa Gotenyama Building: Kita-Shinagawa, Shinagawa-ku (1-minute walk from Kita-Shinagawa Station on the Keikyu Line)＞ Acquisition price (Note 1): 2.5 billion yen, NOI yield: 4.1% (as of acquisition (Note 4)) → 4.1% (mid-term assumption (Note 5)) Structure/Floor: SRC/S / 8F ＜Repayment/early repayment of a total of 15.35 billion yen to 8 lenders＞ 2. Allot to • Repayment of a total of 1.85 billion yen to three banks (February 28, 2018) repayment of • Early repayment of 2 billion yen to a bank (March 30, 2018) +103 yen loans • Early repayment of a total of 11.5 billion yen to five banks (April 27, 2018) • Acquisition period: March1, 2018 to May 18, 2018 3. Allot to share • Number of acquired units: 5,992 units buybacks +134 yen • Total acquisition amount: 3,675,523,000 yen Total Approx. 23.32 billion yen +383 yen (Note 1) Excluding expenses related to the acquisition and consumption tax. (Note 2) Figures calculated by dividing the expected annual balance of payments under the assumed occupancy rate (100.0%) by the acquisition price, based on the lease agreement upon acquisition, etc.