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23rd Fiscal PeriodResult08/01/2021–01/31/2022AdvanceResidenceInvestment CorporationTable of ContentsExecutive SummaryFinancial ResultsInternal GrowthExternal GrowthRepairs & RenovationsFinanceSustainabilityEarnings GuidanceMerger of Asset Management CompaniesAppendix34512162023293235© 2021 Advance Residence Investment Corporation All Rights Reserved2Executive Summary for FP Jan. 2022Net income +136 million yen from ForecastEarnings Per Unit EPU 5,640 yenchg. fr forecast: +98 yen +1.8%Dividend per unit DPU 5,692 yenchg. fr forecast: +92 yen +1.6%FFO / UnitNAV / UnitUnrealized gains7,390 yen318,125 yen217.9 bn yenChange from FP Jul. 2021+1.1%Change from FP Jul. 2021+3.5%Total Book Value Percentage:50.5%Internal GrowthExternal GrowthFinanceSustainabilityEased leasing termsOccupancy rates improvedAcquired carefully selected assets 440 million yen gain on salesNo change in financing statusFirm executionPeriod Average OccupancyReplacement Rent Increase*Renewal Rent Increase*96.2%−0.6%+0.6%* Rent change for pass-through units that went through replacement or renewal during the period.Amounts NOI Yield*Acquisitions 2 prop 3.7 bn yen4.9%Dispositons 2 prop 1.0 bn yen3.0%* Acquisition is calculated by dividing annual NOI on the appraisal report by the acquisition price.Sale is calculated by dividing NOI for the most recent 3 years by the disposition price. RepaymentProcurementAmount17.0 bn yen 19.2 bn yenAvg. InterestRate0.95%0.41%Avg. Initial Duration6.5 years8.2 years3rd time in 2 consecutive yearsSelected as GRESB Sector LeaderIssued new green bonds2 bonds (2.6 bn yen in total)Expanded scope of energy measurement 33.2%* (+18.2%)* Individual apartment units© 2021 Advance Residence Investment Corporation All Rights Reserved3Results for FP Jan. 2022① Forecast(Sep. 16, 2021)② Result(FP 01-2022)Changes*2 (② – ①)Internal GrowthFinancingExternal GrowthOperating revenue17,212(270 properties*1)Period Average Occupancy95.9%17,313(272 properties*1)Period Average Occupancy96.2%+101Rent incomeKey money incomeOther revenues+54−46+24Gain in rent revenue from properties acquired in the current FP+58Sale expenses+9Operating income8,577(Depreciation 2,863)(Property taxes 908)8,710(Depreciation 2,864)(Property taxes 907)+132(NOI +113)Repair costsGA costs, etc.+28+22Leasing expenses due to new acquisitions−17Ordinary income7,6767,813+136Interest rates, etc. +11Borrowing related expenses−9Net income7,6757,812+136Earnings Per Unit5,542 yen(Excl. gains on sales 5,230 yen)5,640 yen(Excl. gains on sales 5,321 yen)+98 yen(+91 yen)+60 yen+8 yen+30 yen(+23 yen)5,266 yen−312 yen−319 yen+7 yenThe entire amount of 0.44 bn yen (319 yen per unit) in gain on sales in the current FP is retained128 yen128 yenOut of 0.28 bn yen retained earnings outstanding after the last FP distribution, 0.17 bn yen (128 yen/unit) is distributed.242 yen242 yenReserve* after dividend: 29.8 bn yen––5,600 yen 5,692 yen +92 yenOutstanding number of units issued at end of period: 1,385,000 unitsOutstanding amount of retained earnings after distribution: 0.55 bn yen (398 yen per unit)5,646 yen48.1%48.4%*1 The number of properties as of the end of FP.*2 The increases and decreases in “Changes” denote the impact on operating income and ordinary income.*3 “Reserve” means “Temporary Difference Adjustment Reserve.”48.2%4© 2021 Advance Residence Investment Corporation All Rights ReservedPer Unit Retained EarningsPer Unit Distribution from Retained EarningsPer Unit Drawdown of Reserve*3Dividend Per UnitLTV (Total assets base)in million yenPrevious FP Results(FP 07-2021)16,884(272 properties*1)Period Average Occupancy95.9%8,224(Depreciation 2,835)(Property taxes 901)7,2947,294–137 yen242 yenInternal GrowthT-081 RESIDIA ShinagawaRental Property Management Results for FP Jan. 2022Occupancies Improved through Easing of Leasing TermsFP Jan. 2022(Average)(from Prev.)+0.1%+0.1%Occupancy rateFP Jan. 2022(Average)(from Prev.)96.2% +0.3pt95.9% +0.7pt98.4% −0.2pt96.1% −0.2ptPortfolioTokyo 23 WardsTokyo MetropolitanMajor Regional CitiesReplacement Rent IncreasePortfolio−0.6% −1.9ptSingle−4.6% −3.3ptCompactFamily & Large−0.7% −1.7pt+6.3% −0.5ptLeasing Expenses (in monthly rent)FP Jan. 2022(Average)(from Prev.)−0.92−0.16 months0.57(1.50)−0.21 months+0.05 monthsKey Money -Leasing ExpensesKey MoneyLeasing Expenses96.3%96.2%96.1%96.0%96.9%Improved occupancy rate98.2%96.4%98.0%96.2%98.4%98.5%95.8%95.8%95.8%95.8%95.8%95.7%98.9%96.8%96.5%96.0%98.5%96.1%95.5%6.5%-1.5%5.2%+0.8%-0.2%5.4%-0.4%-0.6%-0.4%4.7%-0.6%10.7%-1.2%-3.7%-3.1%-4.4%-4.2%Rent adjustment-2.0%5.8%-1.2%-5.2%-5.7%Easing of key money0.49 -1.000.60 -0.940.71 -0.770.78 -0.660.62 -0.880.35 -1.17(1.49)(1.54)(1.48)(1.44)(1.50)(1.52)© 2021 Advance Residence Investment Corporation All Rights Reserved8/20219/202110/202111/202112/20211/20226Rental Property Management Results for Past 3 YearsOccupancy rateFP-7-1997.1%97.0%PortfolioTokyo 23 WardsFP-1-2096.8%96.8%FP-7-2096.7%96.5%FP-1-21FP-7-21FP-1-2295.9%95.9%95.4%95.3%96.2%95.9%Decline due to the state of emergency declarationReplacement Rent IncreasePortfolioSingleCompactFamily & Large+2.7%Leasing ExpensesKey Money0.93 Leasing Expenses(1.51)Move-ins and Move-outs by Tenant Category (cases)CorporateIndividualMove-insMove-outs2,202 52%48%55%45%(2,147)(Ref.) Net migration inflow into Migration Stats Tokyo 23 wards (persons)(persons)+5.0%+4.6%+5.5%+1.2%+1.3%8.6%+5.7%6.0%+4.4%+3.6%7.1%+5.3%+4.7%Rent adjustment primarily for Single type units4.5%6.8%+1.0%Adjustment of key money+1.6%-1.2%0.85 (1.50)1,889 36%64%57%43%(2,009)0.82 (1.58)2,056 50%50%52%48%(2,177)Move-outs increased-1.3%0.78 (1.54)2,413 45%55%52%48%(2,384)0.86 (1.50)1,702 45%56%58%42%(1,717)InflowNet migration inflowOutflow231,746 56,450(175,296)139,302 13,117(126,185)219,923 42,556(177,367)126,279 -24,644(150,923)Net migration inflow declined211,182 13,141(198,041)© 2021 Advance Residence Investment Corporation All Rights ReservedImprovement in occupancy rate in Tokyo 23 wards-0.6%6.3%-0.7%-4.6%Family & Large have been steadyRent adjustment for Single & Compact type unitsEased leasing terms0.57 (1.50)2,103 30%(1,889)70%59%41%Compared with 2 years ago FP Jan. 2020, rate of corporate tenantswho moved in: down 15pt126,319 -19,421(145,740)Compared with last year FP 01-2021,net migration inflow is showing an improvingtrend7Moved-outs, Where To?While move-in areas shifted to suburbs for some ADR properties, its impact is smallDestinations of Tenants Moving-outs of 23 Ward PropertiesMove-ins to Tokyo 23 wards: -2ptMove-ins to major regional cities, etc.: +2pt22%27%13%20%18%24%28%11%20%16%Tokyo 23 wards: 62%Tokyo 23 wards: 63%Tokyo 23 wards: 65%4/2021～1/20224/2020～1/20214/2019～1/20205 km Radius10 km RadiusOther 23 Wards of TokyoOther municipalities in Tokyo and three neighboring prefecturesMajor Regional CitiesSurvey Periods & No. of Move-outs*Apr. 2021 to Jan. 2022: 1,071Apr. 2020 to Jan. 2021: 1,113Apr. 2019 to Jan. 2020: 1,068Tokyo Station 5 km radiusMove-out destination within 23 wards: 65%Move-ins to outside of Tokyo 23 wards: +5pt37%19%9%17%18%42%19%9%16%14%44%15%8%17%16%Tokyo Station 10 km radius12%39%10%23%16%13%38%13%17%18%Other areas of 23 wards10%15%27%27%21%6%22%22%26%23%10%16%33%21%21%4/2021～1/20224/2020～1/20214/2019～1/20204/2021～1/20224/2020～1/20214/2019～1/20204/2021～1/20224/2020～1/20214/2019～1/202025%25%14%18%18%13%36%13%21%18%* The data indicates the number of individual tenants who moved out from ADR’s properties managed by ITOCHU Urban Community Co., Ltd. within the 23 wards of Tokyo during the coverage period.© 2021 Advance Residence Investment Corporation All Rights Reserved8Rent Fluctuation by AreaAs of Jan. 31, 2022Replacement*1 Details By AreaReplacement Details By Unit TypePortfolio YieldFluctuation Rate(from Prev.)Rate of IncreaseRate of DeclinePrevious rent sharePortfolio−0.6% −1.9pt+7.2%−6.3%38%−0.5%−2.1pt+8.0%−6.4%37%+0.7%−1.0pt+6.5%−5.5%47%53%55%42%Sapporo+0.0%−0.6pt+3.1%−6.9%48%21%−1.1%−1.1pt+2.4%−5.1%39%40%−5.2%−2.7pt+3.8%−7.7%16%75%−0.5%−1.7pt+5.4%−5.0%37%Fukuoka+1.4%−1.3pt+3.3%−3.0%59%48%19%Share in rent riseShare in rent declineTokyo 23 WardsTokyo MetropolitanSendaiNagoyaKansaiRenewal*1 DetailsReplacement Contract Share*2Fluctuation Rate(from Prev.)Previous rent sharePortfolio+0.6%−0.0pt21%Tokyo 23 WardsTokyo Metropolitan+0.7%−0.1pt24%+0.6%+0.4pt27%Sapporo+0.0%+0.0ptSendaiNagoyaKansai+0.4%+0.2pt14%+0.0%+0.0pt2%+0.5%+0.0pt14%Fukuoka+0.7%+0.2pt27%FukuokaSendaiSapporoNagoya2%3%3%KansaiTokyo Metropolitan4%7%4%Tokyo 23 Wards77%Ratio of tenants accepting rent increase proposal (previous rent share: 34%): 64%*1 Rent change for pass-through units that went through replacement or renewal during the period.*2 Based on previous rent of replacement units in pass-through units, excluding the leasing of whole buildings.© 2021 Advance Residence Investment Corporation All Rights ReservedSingle(41.2% of portfolio)Fluctuation Rate(from Prev.)Rate of IncreaseRate of DeclinePrevious rent sharePortfolio/S −4.6%Tokyo 23 −5.3%WardsTokyo Metropolitan−1.3%SapporoSendaiNagoyaKansaiFukuoka−0.4%−1.8%−5.4%−3.1%+1.9%Portfolio/C −0.7%Tokyo 23 −0.9%WardsTokyo Metropolitan+1.6%SapporoSendaiNagoyaKansaiFukuoka−0.6%+1.5%−4.6%+1.5%+1.5%−3.3pt−3.4pt−2.3pt−0.5pt−0.8pt−2.3pt−3.2pt−1.6pt−1.7pt−1.8pt−3.5pt−1.4pt+0.1pt−3.7pt+0.2pt−1.3pt+4.7%+4.5%+5.8%+3.5%+2.2%+3.5%+5.1%+4.7%+4.5%+5.0%+4.2%+2.6%+2.7%+3.9%+3.7%+2.6%−6.9%15%−7.2%12%−6.0%35%76%81%55%−5.0%34%31%−5.2%19%43%−7.0%10%−5.2%−3.2%14%59%82%74%28%−5.3%42%−5.3%39%−2.2%53%−7.2%40%−3.3%79%−7.6%21%−3.4%62%−4.2%68%48%54%27%22%21%71%23%7%Compact(34.9% of portfolio)Fluctuation Rate(from Prev.)Rate of IncreaseRate of DeclinePrevious rent shareFamily & LargeFluctuation Rate(from Prev.)(23.9% of portfolio)Rate of IncreaseRate of DeclinePrevious rent sharePortfolio/F&L +6.3%+8.2%−0.5pt+10.3%−5.6%71%−0.6pt+11.2%−4.1%79%19%14%Tokyo 23 WardsTokyo MetropolitanSapporoSendaiNagoyaKansaiFukuoka+8.8%+0.9%−2.1%−5.3%+5.5%+0.5%+5.0pt+0.3pt−4.2pt−2.7pt−0.7pt−0.7pt+9.7%+3.4%+1.9%+3.9%–90%−8.0%62%−5.6%39%−8.5%19%+8.3% −12.4%71%+3.5%−2.1%36%36%16%52%71%3%9Rent Fluctuation in Tokyo 23 WardsAs of Jan. 31, 2022Replacement*1 Details By AreaBy Unit TypeTokyo 23 WardsFluctuation Rate(from Prev.)Rate of IncreaseRate of DeclinePrevious rent shareTokyo 23 Wards −0.5% −2.1pt+8.0%−6.4%37%5 km Radius−1.3%−1.2pt+8.3%−6.8%33%55%60%10 km Radius+1.0%−2.6pt+8.1%−5.7%45%47%Other23 Wards of Tokyo−2.8%−3.1pt+5.5%−6.5%28%66%Single(30.8% of portfolio)Fluctuation Rate(from Prev.)Rate of IncreaseRate of DeclinePrevious rent shareTokyo 23 Wards Total−5.3% −3.4pt +4.5% −7.2%12%5 km Radius−6.2% −2.7pt +4.1% −7.7%9%81%85%10 km Radius−4.3% −3.3pt +5.0% −6.8%15%75%Other23 Wards of Tokyo−5.4% −5.2pt +3.9% −7.0%12%83%Share in rent riseShare in rent declineCompact(27.8% of portfolio)Renewal*1 DetailsReplacement Contract Shareof Tokyo 23 Wards*2Fluctuation Rate(from Prev.)Previous rent shareTokyo 23 Wards +0.7% −0.1pt24%5 km Radius+0.7% −0.1pt24%10 km Radius+0.8% −0.2pt26%Other23 Wards of Tokyo+0.5% +0.1pt19%Ratio of tenants accepting rent increase proposal (previous rent share: 36%): 68%*1 Rent change for pass-through units that went through replacement or renewal during the period.*2 Based on previous rent of replacement units in pass-through units, excluding the leasing of whole buildings.Others12%10km Radius41%5km Radius47%Fluctuation Rate(from Prev.)Rate of IncreaseRate of DeclinePrevious rent shareTokyo 23 Wards Total−0.9% −1.8pt +5.0% −5.3%39%54%5 km Radius−2.1% −1.8pt +4.9% −6.0%32%61%10 km Radius+0.8% −1.7pt +5.3% −4.0%48%Other23 Wards of Tokyo−0.9%-0.7pt +3.7% −4.7%42%Family & Large(18.1% of portfolio)Fluctuation Rate(from Prev.)Rate of IncreaseRate of DeclinePrevious rent shareTokyo 23 Wards Total+8.2% −0.6pt +11.2% −4.1%79%5 km Radius+8.7% +1.5pt +12.2% −4.2%77%10 km Radius+7.7% −2.1pt +10.7% −4.1%78%Other23 Wards of Tokyo+9.1% +1.6pt +9.1%–100%45%50%14%14%15%© 2021 Advance Residence Investment Corporation All Rights Reserved10Rent Rise PotentialChange in Rents+1.1% +0.9% +1.6% +1.1% +1.5% +1.2%-0.2%+1.2% +1.3%-0.6%+2.2% +3.0%+5.0% +4.6%+5.5%FP-1-15 FP-7-15 FP-1-16 FP-7-16 FP-1-17 FP-7-17 FP-1-18 FP-7-18 FP-1-19 FP-7-19 FP-1-20 FP-7-20 FP-1-21 FP-7-21 FP-1-22Portfolio Rent Rise*10.2% 0.1% 0.0%Portfolio Rent Rose for 15 Consecutive Periods0.6% 0.5% 0.6%0.3%0.1%0.3% 0.2% 0.2%0.4%0.1%0.3%0.1%FP-1-15 FP-7-15 FP-1-16 FP-7-16 FP-1-17 FP-7-17 FP-1-18 FP-7-18 FP-1-19 FP-7-19 FP-1-20 FP-7-20 FP-1-21 FP-7-21 FP-1-22Ratio of Leasing Income to Total Assets*25.5%5.3% 5.2%5.4% 5.3%5.5% 5.5%5.6%5.5%5.7% 5.6% 5.7%5.6%5.7% 5.6%FP-1-15 FP-7-15 FP-1-16 FP-7-16 FP-1-17 FP-7-17 FP-1-18 FP-7-18 FP-1-19 FP-7-19 FP-1-20 FP-7-20 FP-1-21 FP-7-21 FP-1-22Portfolio Rent Increase Potential*3+4.2%+3.6% +3.8%+2.5%Temporary decline in rent rise potentialas a result of prioritizing occupancy over rent rise+1.4%+0.8%-0.1%【Current rent】FP-1-22 Contract Rent【Assumed Contract Rent】Calculated trial value based on lease payments for FP-1-22 FP-1-19 FP-7-19 FP-1-20 FP-7-20 FP-1-21 FP-7-21 FP-1-22PortfolioPortfolio Rent Increase Potential−1.7 mil yenRent (monthly)Rent Rise Potential+66 mil yen+8+12+44Rent Decline Potential−68 mil yen-40-18-9Family & LargeCompactSingle© 2021 Advance Residence Investment Corporation All Rights Reserved*1 Rent increase is calculated by comparing rent per tsubo at the beginning of each period to rent per tsubo at the end of the period for properties owned throughout the period.*2 NOI is calculated by annualizing the number of days under management and using the figure as of the end of the concerned FP for total assets.*3 The degree of impact on the overall portfolio rent if all contract rents in the fiscal year ending July 31, 2021 were replaced by the contracted rent level in the fiscal year ending January 31, 2022.11External GrowthT-118 RESIDIA Tsukishima IINew Acquisitions & DispositionsAcquired Two Properties (3,745 mil yen in total)/Disposed Two Properties (638 mil yen*1 in total)*1 Book value as of the date of disposal.Deliver Stable Dividends Using Gains on Sales of 442 mil yenSteadily Acquiring PropertiesProperty Sales for Stable DividendAcquired in FP Jan. 2022Acquisition in FP Jul. 2022 (including planned acquisitions)RESIDIA KunitachiIIRESIDIA Nishi-TenmaRESIDIA Bunkyo-KoishikawaRESIDIA Kanda-AwajichoRESIDIA OgikuboIIITotal / AverageRESIDIA YoyogiRESIDIA Nishi-ShinjukuTotal / Average795 mil yen2,950 mil yen694 mil yen1,490 mil yen2,388 mil yen8,317 mil yen504 mil yen586 mil yen1,090 mil yenTo be acquired from sponsors90.3%95.5%83.7%91.4%92.9%92.4%Gain on sales*4 +197 mil yen+245 mil yen +442 mil yen+37 mil yen+146 mil yen+30 mil yen+61 mil yen+102 mil yen+380 mil yen−15 mil yen−17 mil yen−33 mil yenNOI Yield *24.8%5.0%4.4%4.2%4.3%4.6%Building Age*36.0 yrs.22.5 yrs.4.0 yrs.6.4 yrs.6.3 yrs.11.8 yrs.4.8%3.1%4.9%3.0%4.8%3.0%Oct. 1, 2021Oct. 7, 2021Feb. 1, 2022Apr. 18, 2022Apr. 18, 2022Building Age*616.7 years16.7 years16.7 yearsDisposition PriceAnnualized NOI*5IncreaseNOI Yield*5(by acquisition price)NOI Yield*5(by disposition price)Acquisition Price (bn yen)Price / AppraisalAnnualized NOI*2IncreaseDate of Acquisition*2 Based on annual NOI listed on the appraisal report and acquisition price.*3 Building age is as of the acquisition date.Date of DisposalOct. 18, 2021Oct. 18, 2021*4 Gains on sales are net of transaction fees and other costs as of January 31, 2022.*5 Calculated based on the actual average NOI between FP Jul. 2018 and FP Jan. 2021.*6 Building age is as of the disposal date.© 2021 Advance Residence Investment Corporation All Rights Reserved13Sponsor Pipeline31 Properties in Total, Approx. 55.8 billion yen in Estimated Value*1As of Jan. 31, 2022(of which, properties equivalent to 43.6 billion yen have been completed)Properties Developed by Itochu GroupPipeline for ADRNo. of PropertiesNo. of UnitscompletedExpected ValueLocations within 23 Wards of TokyoTokyo Station 10 km radius7 properties267 units10.7 bn yen10.7 bn yenAdachiTokyo Station 5 km RadiusTokyo Station 10 km RadiusOther23 Wards of Tokyo11 properties738 units22.2 bn yen14.9 bn yen7 properties420 units11.7 bn yen11.7 bn yenOther Regions6 properties880 units11.1 bn yen6.2 bn yenTotal31 properties 2,305 units 55.8 bn yen 43.6 bn yenOther Regions20%5km radius19%Other23 Wards of Tokyo21%Tokyo Station 10km radius40%Family & Large15%Compact26%Single59%Tokyo 23 Wards 80%*2Single & Compact Type Units 85%*3ItabashiKitaNerimaArakawaKatsushikaToshimaBunkyoTaitoSumidaEdogawaNakanoSuginamiShinjukuChiyodaTokyo StationShibuyaMinatoChuoKotoSetagayaMeguroShinagawaOtaWithin a 5 km Radius of Tokyo Stationcompletedunder construction© 2021 Advance Residence Investment Corporation All Rights Reserved*1 The “Estimated Value” is based on the estimates made by ADIM and may differ from the actual acquisition price. There are no property on the list that ADR has decided on to acquire as of March 17, 2022, except for RESIDIA Kanda-Awajicho and RESIDIA Ogikubo III.*2 Calculated based on the estimated value. *3 Calculated based on total leasable area of completed properties.14External Growth PolicyAppraisal Direct Cap Rate TrendAppraisal Direct Cap Rate5.5%Cap Rate Remains on Declining Trend4.8%1H 20082H 20081H 20092H 2009FP 08-2010FP 7-17FP 1-18FP 7-18FP 1-19FP 7-19FP 1-20FP 7-20FP 1-21FP 7-21FP 1-22Sourcing Track Record6.2%6.0% 6.0% 6.1%5.7%Acquired from Third Party (bn yen)Acquired from Sponsor Group (bn yen)Appraisal NOI Yield*1Sourcing Record Since the Merger*228013987105237216432954.8%5.0%4.9%5.2%238062355519554.8%4.9%1106035*24.6%4438*2Third Party and Others71%～7/2011 ～7/2012 ～7/2013 ～7/2014 ～7/2015 ～7/2016 ～7/2017 ～7/2018 ～7/2019 ～7/2020 ～7/2021 ～7/2022*1 Based on annual NOI listed on the appraisal report and acquisition price.*2. Including two properties to be acquired on Apr. 18, 2022.© 2021 Advance Residence Investment Corporation All Rights Reserved153.9%3.8%The Sponsor Group29%T-150 RESIDIA Tower Kami-IkebukuroRepairs & RenovationsMaintaining the Competitiveness of PropertiesLarge-scale RepairsRepair works are carried out at around 15 years intervals on roofing, exteriors and entrances to maintain the basic functionality of the buildingsTrack Record Since the MergerNo. of Properties:Cost of Works (incl. taxes) 7,165 mil yen84 mil yenAve. Cost per Property:85 propertiesFP Jan. 2022 Depreciation 2,864 mil yenCapex (Value enhancement works of individual apartment units)Capex (Other Repairs)Capex (Large-scale Renovations)1,348574008901,508554511,0001,058147 3525591,463138413912923176568179ResultResultResultResultResultRepairs and maintenanceValue Enhancement (VE) WorksIn value enhancement works, floor plans, kitchens and bathrooms and are renovated to current taste, thereby making it possible to aggressively pursue rent increasesTrack Record Since the MergerNo. of Value Enhanced Units: 496 units478 unitsNo. Leased Out Units% Increase in Rents:*1 19.3%* 1 Average increase in monthly rents are calculated for the 478 leased out units that has gone through VE works as of Jan. 31, 2022, dividing the first contracted rent after the VE works by the previous rent before the VE works.in million yen2,0503385712,2373837772,0694055312,1052,1132,2144495115085425275271,1391,0761,1331,1431,0631,158FP 01-2020FP 07-2020FP 01-2021FP 07-2021FP 01-2022FP 07-2022FP 01-2023FP 07-2023FP 01-2024FP 07-2024FP 01-2025611727716729695845766795765819778FP 01-2020FP 07-2020FP 01-2021FP 07-2021FP 01-2022FP 07-2022FP 01-2023FP 07-2023FP 01-2024FP 07-2024FP 01-2025ResultResultResultResultResultPlan© 2021 Advance Residence Investment Corporation All Rights Reserved17Large-scale RepairsWorks Were Done to 11 Properties at the Total Cost of 947 mil yen* The amount includes consumption tax.afterValue enhancements of common areas (entrance, elevator hall, etc.)RESIDIA Odori-NishiLocationTotal floor space : 8-2-30 Odori-Nishi, Chuo-ku, Sapporo, Hokkaido: 6,870.12 m2 (building)Structure, scale: 15-story RC flat-roofed building with 1 floor undergroundBuilt: December 2006 (building age: 15 years old)Construction cost: 145,992 thousand yenConstruction period : July 2021 to December 2021 (6.0 months)before© 2021 Advance Residence Investment Corporation All Rights Reserved18Value Enhancement (VE) WorksValue Enhancement Works Track RecordIndividual apartment units of RESIDIA Nishi-AzabuAvg. Increase in Monthly Rent Since Merger+19.3%*1Similar rent rise as before the COVID-19 pandemicNo. of VE UnitsConstruction Costs*2IncreaseRate of IncreaseEstimated Recuperation Period*3No. of Leased Out Units496 units 478 units1,823 mil yen+15 mil yen +19.3%9.5 yrs.34 units 16 units78 mil yen +0.9 mil yen +28.1%*46.8 yrs.Maintained rent rise after the 2nd roundRent Rise of Initial ContractRent Rise 2nd Round OnwardsLayout change- 3LDK ⇒ 2LDKbeforeWork overview- Open kitchen design- New floor tiles- Feature wallpapers- Partially replaced with wall tiles, renovated the kitchen, bathroom, vanity, and toilet – Replaced joineryafterSince MergerFP Jan. 202230%20%10%0%-10%*1 Average increase in monthly rents are calculated for the 478 leased out units that has gone through VE works as of Jan.31, 2022, dividing the first contracted rent after the VE works by the previous rent before the VE works.*2 Construction cost includes all cost (excluding tax) spent on the leased out units.*3 Recuperation periods are derived by dividing the construction cost by the amount of initial rent increase. It assumes thatthe rent increase is maintained throughout the period.*4 The average increase in monthly rents of the 16 units under lease (as of Jan. 31, 2022), out of 34 units that had valueenhancement (VE) works done during the FP Jan. 2022, based on their monthly rent before the VE works and the monthlyrents in the first contract after the VE works.© 2021 Advance Residence Investment Corporation All Rights Reserved19FinanceT-168 RESIDIA Nihonbashi-Bakurocho IIIBuilding a Stable FinancialKey Figures on DebtsFP Jan. 2022 Debt FinancingCredit Ratings: JCR AA(Stable) R&I: AA-(Stable)Lowered Interest Rates & Extended DurationJul. 31, 2021Jan. 31, 2022ChangeRepaymentProcurementLoans186.5 bn yen186.1 bn yen83.6% −0.4 bn yenAmounts17.0 bn yen19.2 bn yenBonds34.0 bn yen36.6 bn yen16.4% +2.6 bn yenTotal220.5 bn yen222.7 bn yen100% +2.2 bn yenAvg. Interest RateAvg. Initial Duration0.95%6.5 yrs.0.41%8.2 yrs.49.9%39.0%LTV ManagementMaximum LeverageAs of March 17, 202247.9%48.0%48.1%48.2%48.4%53%50%Total assets LTV 53%, appraisal LTV 50%Lowered LTV through equity financing36.7%36.2%35.6%34.8%34.3%LTV (Total assets base)Appraisal LTVJul. 31, 2019Jan. 31, 2020Jul. 31, 2020Jan. 31, 2021Jul. 31, 2021Jan. 31, 2022Acquisition CapacityAcquisition capacity at total asset LTV 50%As of Jan. 31, 2022 14.5 bn yen© 2021 Advance Residence Investment Corporation All Rights Reserved21Aiming for Long-termLowering Interest RateExtending DurationFixing Interest RateAvg. Interest RateAvg. Procurement RateExtending DurationAvg. Initial DurationFloating Interest RateFixed Rate0.75% 0.73% 0.70% 0.69% 0.66%0.61%9.0 yrs8.7 yrs8.2 yrs8.2 yrs0.38% 0.36% 0.34%0.41%0.27%5.1 yrs4.8yrs4.6yrs4.8yrs4.8yrs4.9yrs5.0yrs98%98%97%98%98%99%FP 1-20FP 7-20FP 1-21FP 7-21FP 1-22FP 1-20FP 7-20FP 1-21FP 7-21FP 1-22financingfinancingfinancingfinancingfinancingfinancingfinancingfinancingfinancingfinancingFP 07-19 FP 01-20 FP 07-20 FP 01-21 FP 07-21 FP 01-22FP 07-19 FP 01-20 FP 07-20 FP 01-21 FP 07-21 FP 01-22FP 07-19 FP 01-20 FP 07-20 FP 01-21 FP 07-21 FP 01-22* The amount outstanding and interest rate applicable at the end of each period are used for calculating the average interest rate for financing during the periods.* The amount outstanding and interest rate applicable at the end of each period are used for calculating the average interest rate for financing during the periods.Maximum repayment per FP 15.0 bn yenCommitted line of credit 20.0 bn yenDiversifying Duration<0.86% 0.88%1.04%0.72%0.74%0.66%0.57%0.45%0.58% 0.55% 0.51%0.45%0.61% 0.61%0.38% 0.38% 0.44%0.37%0.52% 0.53%Average funding cost for the last five FPs 0.38%*Avg. Interest RateBondsLoans(bn yen)3.05.113.212.12.03.08.57.77.54.43.52.03.02.010.49.911.412.311.99.18.99.31.512.18.57.93.211.69.97.2FP 7-22 FP 1-23 FP 7-23 FP 1-24 FP 7-24 FP 1-25 FP 7-25 FP 1-26 FP 7-26 FP 1-27 FP 7-27 FP 1-28 FP 7-28 FP 1-29 FP 7-29 FP 1-30 FP 7-30 FP 1-31 FP 7-31 FP 1-32—© 2021 Advance Residence Investment Corporation All Rights Reserved* Weighted average of the applicable interest rates of interest-bearing liabilities, excluding short-term loans, raised in the last five FPs.22SustainabilityT-131 RESIDIA MejiroSustainability InitiativesCategoryLong-term visionRelated SDGsKPIsMeasures implementedMateriality(sustainability-related important issues)① Extension of useful life② Acquisition of environmental and energy-saving certifications③ Control of reduction of energy consumption, CO2 emissions, water consumption, and waste volume④ Cooperation with stakeholders① Improvement of tenant satisfaction, engagement with tenants② Contributing to local communities③ Utilization of diverse human resources, ability development④ Development of workplace environment that offers job satisfaction① Firm corporate governance structure② Pursuit of unitholder interest through customer-first business management③ Strengthening of resilienceEnvironmentClimate change-related initiatives (contribution to low-carbon society)SocietyTenants and local communitiesInitiatives for officers and other employeesGovernanceStrengthening of governanceRisk management for sustainable business growthRelated policies, etc.*1①, ②③①, ②, ③④, ⑤, ⑥③, ⑦③, ⑨⑧, ⑨③③③–⑩Reduction target based on the intensity(1) Energy consumption, CO2 emissions① Short term (1 year): 1% reduction② Medium to long term (5 years): 5% reduction(2) Water consumption, waste volume① Short term (1 year): Do not increase② Medium to long term (5 years): Do not increaseEnsuring all employees undergo regular health check-up- Large-scale repairs, value enhancement (VE) works- Acquisition of Green Building Certification and BELS(1) Introduction of energy-saving devices- Introduction of LED, water-saving toilets, car sharing(2) Electricity-related- Introduction of electric power measuring system(3) Educating tenants- Distribution of sustainability guidelines(1) Cooperation with tenants- Leasing contract w/ Green Lease Provision(2) Cooperation with PM, BM companies- Establishment, notification of green procurement guidelines- Implementation and evaluation of questionnaire surveys(3) Involvement with local communities- Questionnaire surveys and services for tenants- Installation of disaster prevention map, distribution of disaster prevention items- Repair of shared spaces, installation of hand sanitizers- Installation of AED and donation-type vending machines- Co-sponsoring of presentation contests- Promotion of positive actions, anti-harassment training- Establishment of childcare and nursing care leaves, voluntary work leave, paid leave by hour, etc.- Practice of health and productivity management- Establishment of Compliance Committee and Investment Committee- Establishment of Sustainability Promotion Committee and expert team- Formulation of and compliance with rules regarding conflicting interest transactions- Introduction of asset management compensation system linked to investment performance- Introduction of share investment system for officers- Identification of climate-related risks, opportunities, and strategies- Enhancement of disaster prevention measures and BCP structure© 2021 Advance Residence Investment Corporation All Rights Reserved① to ⑩ stipulate operating policies for practicing the matters addressed in the Sustainability Policy.* ① Energy-saving policy, ② GHG emission reduction policy, ③ sustainability promotion structure standards, ④ water saving policy, ⑤ waste control policy, ⑥ EMS operation manual, ⑦ green procurement policy, ⑧ health and productivity management policy, ⑨ human rights policy, ⑩ climate change and resilience policies24Sustainability InitiativesMaintain and Improve Medium- to Long-Term Asset Values through a Wide Range of InitiativesEnvironmentalAwareness-Raising ActivitiesSocialPosters Encouraging Energy SavingLarge-scale RepairsLED Lighting InstallationLED Lighting InstallationGovernanceDevelopment of Compliance and Risk Management SystemsCompensation System Closely Linked to PerformanceIntroduction of Share Investment System for Officers of Asset Management CompanyCompensation ILinked to NOI*NOI*× 7.00%Compensation IILinked to Adjusted FFO/share**Compensation I ×Adjusted FFO/share× 0.005%*NOI is an amount obtained by subtracting the total sum of property leasing expenses (excluding depreciation cost and loss onretirement of non-current assets) from the total sum of property leasing revenues**Adjusted FFO/share = Asset management compensation II FFO before deduction / number of outstanding shares as of the closing date© 2021 Advance Residence Investment Corporation All Rights Reserved(1) Contributing to Local CommunityDisaster Prevention MapDistribution of Disaster Prevention ItemsInstallation of Charity Vending MachinesInstallation of AEDs(2) Enhancing Tenant SatisfactionServices for TenantsQuestionnaire Surveys for TenantsTenantsInstallation of Apps for Disaster Prevention MapDistribution of Disaster Prevention ItemsCharity Vending MachinesAED Installed(3) Improving Employee Awareness and SatisfactionVarious Training ProgramsIntroduction of Share Investment System for EmployeesWork-style ReformEmployee Health-Promoting InitiativesExpansion of Benefit Programs24/365 Call Center ServiceInstallation of Tenant Applications25Environmental Measures (1)Reduction Target (Based on the Intensity*1)(1) Energy consumption(2) CO2 emissions(3) Water consumption (4) Waste weightShort-term target (annual)Long-term target (5 years)−1%−5%Do not increaseDo not increaseReduction in Energy Consumption, etc.*2(1) Energy consumptionElectricityFuelDistrict heating and coolingIntensity(2) CO2 emissions (Scope 1 + 2)scope1scope2Intensity(MWh)24,00018,00012,0006,0000(m3)12,0009,0006,0003,0000Reduction rate(intensity)FY2018–FY2019−0.5%FY202003 years−6.9%−7.4%Reduction rate(intensity)FY2018–FY2019−1.4%FY202003 years−5.3%−6.6%(3) Water consumptionWater consumptionIntensity(4) Waste weightWasteIntensity(MWh/m2)0.150.10.05(m3/m2)0.080.060.040.0203 years(t)12,0009,0006,0003,0000(t)8,0006,0004,0002,0000(t/m2)0.080.060.040.02(t/m2)0.020.0150.010.0050Reduction rate(intensity)FY2018–FY20190.4%FY2020FY2018FY2019FY20203 yearsー2.9%ー2.6%Reduction rate(intensity)-ー14.3%20.5%3.3%© 2021 Advance Residence Investment Corporation All Rights Reserved*1 The total of each category is divided by the total acquired areas (m2) related to data of the investment property.*2 For properties owned for the entire period of each fiscal year and from which the data of full-year consumption was obtained. Calculated for Scope 1 and 2 as follows: ①Scope 1: on a combustion basis, ② Scope 2: on an electric power and district heating and cooling basis26Environmental Measures (2)Measuring Energy ConsumptionEnvironmentally Friendly Asset ManagementSource of DataCommon areasIndividual apartment unitsEntire propertyEach apartment unit〇××Data Acquisition Ratio*1NowAfter installation〇〇×Properties with a device8 propertiesActionsNewly installed at 44 propertiesInstalled at 52 properties in totalFP Jul. 2021FP Jan. 2022ChangePortfolioIndividual apartment units34.7%15.0%49.8%+15.2%33.2%+18.2%*1 Calculated by dividing the total floor area of the space where data are acquired by the total floor area (or total floor area of residential units) of the investment property.LED Lighting InstallationWater Saving Toilet InstallationFP Jan. 2022Portfolio coverage*2Change109 properties40.2%+4.2pt443 units2.0%+0.1ptCar Sharing3 properties1.1% No change•Leasing contract w/ Green Lease Provision 62.2%(+2.3pt from previous FP)*2 The ratio of properties with LED lightings and car sharing in the entire portfolio is calculated on the basis of the number of properties, whereas the ratio of properties with a water saving toilet is calculated on the basis of the number of leasable properties.Seismic RiskProbable Maximum Loss (PML)Water stops2.4 %Covering the Financial DamageReplacement Cost238.8 bn yenAs of Jan. 31, 2022Funds Available for DamageRecoveryMaximum Amount of Loss5.6 bn yen <7.8 bn yen*4Issues to Deliberate When Acquiring Assets•If the PML*3 of the target asset is over 20%→ Consider adding earthquake insurance*3 The Probable Maximum Loss (PML) is a tool used to evaluate the seismic risk of a building and identify assets with high seismic risk. The PML report identifies the PML value, expressed as a percentage of the building’s replacement cost and estimates the potential damage during a 475-year earthquake.*4 Outstanding amount of cash and deposits (including trusts) minus payables, lease deposits (including trusts), working capital reserve and dividend for FP Jan. 2022, as of Jan. 31, 2022.© 2021 Advance Residence Investment Corporation All Rights Reserved27Recognitions for Sustainability MeasuresADR and ADIM are recognized by multiple parties for their sustainability measuresParticipated in GRESB SurveyWorking towards Inclusion in the MSCI Japan ESG Select Leaders IndexFirst residential J-REIT to participate in the survey in 2014In 2021, selected as Sector Leaderof Asia Listed Residential Sector(3rd time in 2 consecutive years)Green Star for 6 years runningESG Rating:BBBA (as of December 2021)Rating improved 3 notches from FY2018(Excluded from the index in FY2018*)FY2015FY2016FY2017FY2018FY2019FY2020FY2021Total PointsDisclosure Rating49–60D64C73A73A75A75A* ADR is currently included in the MSCI Japan IMI Index targeting listed stocks in Japan.Issuing Green BondIssued 2 bonds in October 2021 (2.6 bn yen)Acquisition of Environmental CertificationsTotal of 23 properties, or 29.9%, have environmental certificationAs of March 17, 2022by total floor spaceDBJ Green Building CertificationCASBEE real estate certification18 properties (15.7%) are certified5 properties (14.2%) are certifiedJCR Green Finance Framework AssessmentT-064 RESIDIA Tower NakameguroT-039 RESIDIA Tower Meguro Fudo-maeGreen 1 (F)© 2021 Advance Residence Investment Corporation All Rights Reserved28Earnings GuidanceR-066 RESIDIA NishijinEarnings Guidance① Results for FP 01-2022② Forecast for FP 07-2022Changes*2 (② - ①)Asset Management and FinancingExternal Growthin million yenForecast for FP 01-2023Operating revenue17,313(272 properties*1)Period Average Occupancy96.2%17,178(275 properties*1)Period Average Occupancy96.5%−135Rent incomeKey money incomeRenewal fee income, etc.+75+65+66Gain on salesFull-year gain in rent revenue from properties sold in FP 01-2022Full-year gain in rent revenue from properties acquired in FP 01-2022 and 07-2022−442−9+10917,088(275 properties*1)Period Average Occupancy96.4％Ordinary income7,369−444Claim compensation incomeBorrowing related expenses, etc.+30+60Borrowing related expenses, etc.Operating income8,710(Depreciation 2,864)(Property taxes 907)8,209(Depreciation 2,914)(Property taxes 911)−500(NOI +45)7,8137,812Net income7,368−444Earnings Per Unit5,640 yen(Excl. gains on sales 5,321 yen)5,320 yen −320 yen(-1 yen)Per Unit Retained Earnings−319 yen–+319 yenLeasing and renewal expensesAdvertising expensesRenovation and repair costsBuilding management feesOther expensesDepreciationGA costs, etc.−41−33−147−10−8−39−42Leasing expenses due to new acquisitionsLeasing expenses due to dispositionsGA costs, etc.Depreciation−23+3−12−10−328,235(Depreciation 2,964)(Property taxes 915)−19 yen−301 yen5,320 yenPer Unit Distribution from Retained EarningsPer Unit Drawdown of Reserve*3128 yen137 yen+9 yenOut of 0.55 bn yen retained earnings outstanding after the last FP distribution, 0.19 bn yen (137 yen per unit) is distributed.242 yen242 yen–Reserve*2 after dividend: 29.5 bn yenDividend Per Unit5,692 yen5,700 yen+8 yenOutstanding number of units issued at end of period: 1,385,000 unitsOutstanding amount of retained earnings after distribution: 0.36 bn yen (261 yen per unit)LTV (Total assets base)48.4%49.0%*1 The number of properties as of the end of FP.*2 The increases and decreases in “Changes” denote the impact on operating income and ordinary income.*3 “Reserve” means “Temporary Difference Adjustment Reserve.”© 2021 Advance Residence Investment Corporation All Rights Reserved7,3697,368–137 yen242 yen5,700 yen49.0%30Towards Achievement of FP Jan. 2023 TargetsDividend payout from earnings per unit (EPU)Dividend payout from periodic drawdown of reserves (RTA)An increase equivalent to +38 yenIn the case of external growthAcquisition equivalent to 4.5 bn yen*1orIn the case of internal growthA rise of occupancy rate by approximately 0.4%5,562 yenEPU5,320yenOccupancy rate96.4%RTA242 yenFP Jan. 2023DPU5,600 yenEPU5,358 yenOccupancy rate96.4%RTA242 yenTargetFP Jan. 2023Earnings Guidance>>>>>>>>>>>>The contents of this page are based on the assumption that the issued and outstanding amount of 1,385,000 ADR units as of January 31, 2022, will be unchanged. These are estimates made by ADR on the basis of certain assumptions.*1 Based on the acquisition of assets worth 4.5 bn yen in total utilizing borrowings and funds at hand with a yield after depreciation and funding cost estimated on the most recent figures.© 2021 Advance Residence Investment Corporation All Rights Reserved31Merger of Asset Management CompaniesR-052 RESIDIA TOWER SendaiOverview of Merger of Asset Management CompaniesMultiple fund management for improvement of the unitholders’ valueAs of March 17, 2022AD Investment Management Co., Ltd.(surviving an absorption-type merger)New company name: ITOCHU REIT Management Co., Ltd.Advance Residence Investment Corporation(listed, residence)Advance Private Investment Corporation(unlisted, general)Private funds(unlisted, general)MergerAs of June 1, 2022① Sharing of knowhow② Expansion of investment opportunities③ Human resource developmentJ-REIT[Residence][Logistics]*1Advance Residence Investment Corporation*1Advance Logistics Investment Corporation*2Private REIT, private funds[General]*1Advance Private Investment CorporationPrivate fundsITOCHU REIT Management Co., Ltd.(dissolving in an absorption-type merger)ITOCHU Advance Logistics Investment Corporation(listed, logistics)Principle of prioritizing listed REITs(scheduled on June 1, 2022)The properties that ADR has declined to consider for investment and ADP plans to acquire areThe rules stipulate that the reason for this must be reported to the ADR board of directors.1st priority2nd priority3rd priorityRental housing, etc.*4Logistics facilities, etc.*5ADR*3ADL*3ADPPrivate fundsADPPrivate fundsOthers*6ADP*3Private funds–*Exception: When one of the investment funds has been designated to have priority review by the seller, etc.*1 It is assumed that the logo will be changed effective June 1, 2022.*2 It is assumed that the resolution to change the company name to Advance Logistics Investment Corporation will be approved at the general meeting of unitholders of ITOCHU Advance Logistics Investment Corporation scheduled on April 27, 2022.*3 ADR denotes Advance Residence Investment Corporation, ADL Advance Logistics Investment Corporation (as of March 17, 2022), and ADP Advance Private Investment Corporation.*4 Denotes rental residences, student apartments, student dorms, and healthcare facilities in Japan that are target of investment for ADR. *5 Denotes logistics facilities, plants, data centers, communication facilities, research facilities, supply processing facilities, and renewable energy facilities that are target of investment for ADL.© 2021 Advance Residence Investment Corporation All Rights Reserved*6 Denotes real estates (commercial facilities, offices, hotels, logistics, etc.) in Japan other than rental residences and logistics facilities.33Organizational Structure of New Asset Management CompanyScheduled on June 1, 2022Compliance CommitteeInvestment CommitteeGeneral Unit Holders MeetingBoard of DirectorsRepresentative Director and PresidentStatutory Corporate AuditorInternal AuditorCompliance OfficerCompliance and Risk Management DepartmentGeneral Affairs and Management DivisionFinance & Accounting DivisionEngineering DivisionResidence DivisionLogistics DivisionPrivate Capital DivisionHuman Resources DepartmentSustainability Promotion DepartmentCorporate Management DepartmentFinance DepartmentAccounting DepartmentEngineering DepartmentConstruction Planning DepartmentLogistics Strategy DepartmentLogistics REIT DepartmentPrivate REIT DepartmentPrivate Fund DepartmentResidence Strategy DepartmentResidence Investment DepartmentResidence Management Department© 2021 Advance Residence Investment Corporation All Rights Reserved34T-048 RESIDIA Shibadaimon IIAppendixAdvance Residence’s StrengthDefensive with Stable DividendAs of Jan. 31, 2022AssetDebtLargest Portfolio Among Residential J-REITs*462.2 billion yenStability based on Long-term × Fixed Rate × DiversificationCredit RatingsJCR AA R&I AA-EquityOne of the Largest* Reserve Among All J-REITs29.8 billion yen(After FP Jan. 2022 dividend payout)* According to data compiled by ADIM from the latest disclosures made by other J-REITs as of March 17, 2022.© 2021 Advance Residence Investment Corporation All Rights Reserved36The Largest*1 Portfolio Among Residential J-REITsAs of Jan. 31, 2022272 properties807,050 m221,643 units462.2 billion yenNumber of PropertiesTotal Leasable AreaLeasable UnitsAUM(by acquisition price)Investment Location(by acquisition price)Major Regional Cities20%MetropolitanTokyo 23 Tokyo 9%Wards71%Building Age(by acquisition price)Under 5 y 2%Over 5 y to 10 y 7%Walking Minutes to Train Station(by acquisition price)Tenant Category(by no. of units)(by no. of units)Over 10 min. to 15 min. 6%Over 15 min. 0.2%Rent Guarantee Contract 6%Student Apartment Contract 8%Over 15 y46%Over 10 y to 15 y44%Within 5 min.Over 5 min. to 57%10 min.37%Individual51%Corporate35%Tokyo 23 Wards 71%Weighted Average Age 15.4 yrs.Under 10 min 94%Pass-through contract tenants 86%NOI Yields *2Tokyo 23 Wards TotalTokyo MetropolitanMajor Regional Cities5.4%4.3%6.0%4.3%6.1%4.6%Portfolio YieldOffices & Stores 4%Dormitory 1%Unit types(by floor (by floor space)space)Rents(by no. of units)(by no. of units)Under 300K yen 3%Under 500K yen 2%500K or over 0.6%NOI YieldYield after Depreciation5.6%4.4%0.0% 2.0% 4.0% 6.0% 8.0%Book Value NOI YieldYield on Acquisition Price after DepreciationLarge5%Family26%Single37%Compact27%Under 250K yen21%Under 150K yen23%Under 100K yen50%*1 According to data compiled by ADIM from the latest disclosures made by other J-REITs as of March 17, 2022.*2 NOI Yield is calculated as follows: annualized NOI for the properties owned in the FP under review ÷ their acquisition price.Yield after Depreciation is calculated as follows: annualized Operating Income from Property Leasing Activities for the properties owned in the current FP ÷ acquisition price.Single & Compact type units 64%Unit rents under 150K yen 74%© 2021 Advance Residence Investment Corporation All Rights Reserved37Solid Growth, Solid Track RecordPortfolioTokyo 23 WardsTokyo MetropolitanMajor Regional Cities96.2% 96.4% 96.2%95.9%96.6%96.4% 96.4%96.1%96.6% 96.5%96.8%96.5%97.0% 96.9% 97.0% 97.0% 97.1%96.8% 96.7%95.9% 95.9%96.2%7/2011 1/2012 7/2012 1/2013 7/2013 1/2014 7/2014 1/2015 7/2015 1/2016 7/2016 1/2017 7/2017 1/2018 7/2018 1/2019 7/2019 1/2020 7/2020 1/2021 7/2021 1/2022Occupancy Slightly Dropped Due to Impact of COVID-19 PandemicCurrently Showing Recovery Trend5.6%4.4%stessA5.4%5.2%5.1%5.4% 5.4% 5.5%5.5%5.4%5.6% 5.5%5.6% 5.5%5.7%5.6%5.7% 5.7% 5.7%5.6% 5.7% 5.6%NOI Yield*1Yield after Depreciation*25.8%4.5%4.2%4.1%4.2% 4.2% 4.3%4.3%4.2%3.9%4.4% 4.3% 4.4% 4.4% 4.5% 4.4%4.5% 4.5% 4.5%4.4% 4.4% 4.4%Stable Yield7/2011 1/2012 7/2012 1/2013 7/2013 1/2014 7/2014 1/2015 7/2015 1/2016 7/2016 1/2017 7/2017 1/2018 7/2018 1/2019 7/2019 1/2020 7/2020 1/2021 7/2021 1/2022*1 NOI Yield is calculated as follows: annualized NOI for the properties owned in the FP under review ÷ their acquisition price.*2 Yield after Depreciation is calculated as follows: annualized Operating Income from Property Leasing Activities for the properties owned in the FP ÷ acquisition price.AUM (billion yen)Tokyo 23 WardsTokyo MetropolitanMajor Regional Cities334 39 37 341 41 37 367 367 48 41 48 41 393 401 59 42 61 42 417 410 69 42 81 41 424 425 433 436 81 41 82 41 82 40 84 40 85 40 86 40 442 443 447 448 448 452 456 458 459 462 86 41 87 41 87 41 88 41 87 41 88 41 89 41 92 42 258 263 277 277 292 298 305 288 301 302 310 311 316 316 319 319 319 322 327 328 328 327 7/2011 1/2012 7/2012 1/2013 7/2013 1/2014 7/2014 1/2015 7/2015 1/2016 7/2016 1/2017 7/2017 1/2018 7/2018 1/2019 7/2019 1/2020 7/2020 1/2021 7/2021 1/2022The Largest Portfolio Among Residential J-REITsTopping460 bn yenetar ycnapuccOldeYiMUA© 2021 Advance Residence Investment Corporation All Rights Reserved38LTV (Total assets base)Appraisal LTV56.9% 57.7%56.2% 56.0%Maximum leverage will be 50% for appraisal LTV, 53% for Total Assets LTV52.4% 52.3%51.0% 50.1%51.6% 51.4% 52.2%49.6% 49.6% 49.4% 49.9% 49.9% 49.9% 47.9% 48.0% 48.1% 48.2% 48.4%53.5% 54.6%53.7% 53.8% 51.2% 52.1%The 2nd POThe 3rd PO50.1%The 4th PO47.2% 47.3%45.9% 46.0% 43.2%42.1% 41.5% 41.2% 40.2%The 5th PO39.0%36.7% 36.2%The 6th PO35.6% 34.8% 34.3%7/2011 1/2012 7/2012 1/2013 7/2013 1/2014 7/2014 1/2015 7/2015 1/2016 7/2016 1/2017 7/2017 1/2018 7/2018 1/2019 7/2019 1/2020 7/2020 1/2021 7/2021 1/2022Extending DurationFixed RateAvg. Interest Rate1.75%1.46%1.28%1.23%1.16%1.05%0.94%0.84%* Calculated based on interest rates after reflecting the impact of making it a fixed rate using interest rate swaps.0.75%0.70%0.66% 0.61%LTV to Maintain Flexibility in Preparation for Future Volatility53%50%Acquisition CapacityApprox.14.5 bn yen(Up to LTV of 50% on the total asset basis)(Projected as of Jan. 31, 2022)2.577%2.981%85%3.41.771%3.83.84.14.14.13.94.34.44.74.75.05.04.84.64.84.84.95.093%92%95%100%99%98%93%97%98%98%98%99%98%98%97%98%98%99%7/20111/20127/20121/20137/20131/20147/20141/20157/20151/20167/20161/20177/20171/20187/20181/20197/20191/20207/20201/20217/20211/2022Dividend Paid from Net Income Drawdown from Dividend Reserve Drawdown from Retained Earningsin yen / unit5,69210424210624211724213724212824242153224932920070602592492492492492494,0794,1924,2564,2684,4154,5235,0704,5724,5784,7744,7204,9205,0365,2505,1735,2555,2745,2855,2405,2665,3217/2011 1/2012 7/2012 1/2013 7/2013 1/2014 7/2014 1/2015 7/2015 1/2016 7/2016 1/2017 7/2017 1/2018 7/2018 1/2019 7/2019 1/2020 7/2020 1/2021 7/2021 1/20223,0661,434NAV/unit*in yen / unit156,867156,459155,966158,313164,311171,850182,367198,261207,496216,739223,586230,621237,213239,503248,686258,656270,750285,013288,991297,227307,372318,1257/2011 1/2012 7/2012 1/2013 7/2013 1/2014 7/2014 1/2015 7/2015 1/2016 7/2016 1/2017 7/2017 1/2018 7/2018 1/2019 7/2019 1/2020 7/2020 1/2021 7/2021 1/2022* NAV/Unit is calculated as follows: (FP-end net asset + FP-end unrealized gain or loss – dividend amount for the FP) ÷ FP-end number of issued and outstanding units.Lowered Interest Rate While Maintaining a Stable Base10th Consecutive FP DPU topping 5,000 yenReserve for dividend29.8 bn yen(after FP Jan. 2022dividend payout)Continued Increase in NAV per Unit39stbeDseitiuqEVTLstbeDtinu rep dnedvDii’lsredoh-tinUleuaVDemand Supply Stats75,000Inflows Drops Below Housing Start in Tokyo 23 Wards Due to COVID199,635 7,443 15,00010,0005,000036,925 20172018201920202021Net migration inflowHousing startsNet migration inflowHousing startsNet migration inflowHousing starts-5,000SapporoHokkaido Pref.NagoyaAichi Pref.FukuokaFukuoka Pref.No. of persons, units10,848 16,874 5,0003,7502,5001,25001,638 20,00015,00010,0005,0000-5,0000Net migration inflow−7,983Tokyo 23 WardsTokyoHousing startsNet migration inflowHousing starts-1,250SendaiMiyagi Pref.Net migration inflowHousing startsOsakaOsaka Pref.Source: “2021 Report on Internal Migration in Japan,” Statistics Division, Statistics Bureau, Ministry of Internal Affairs, and Communications“Housing Starts” (RC and SRC Construction Rented Collective Housing) (2021), Construction Statistics Office, Information Policy Division, Policy Bureau, Ministry of Land, Infrastructure, Transportation, and Tourism© 2021 Advance Residence Investment Corporation All Rights Reserved40Tokyo 23 Wards Migration StatsMonthly Migration StatsAnnual Migration by Age Bands20192020202120192020202190,000Net inflow in March and April but net outflow since May60,00030,0000No. of persons40,00030,00020,00010,0000-10,000Jan.Feb.Mar.Apr.May.Jun.Jul.Aug.Sep.Oct.Nov.Dec.-30,000Under 20 20-2930-3940 andaboveSource: “Report on Internal Migration in Japan” for 2019, 2020, 2021, Statistics Division, Statistics Bureau, Ministry of Internal Affairs, and Communications© 2021 Advance Residence Investment Corporation All Rights Reserved41Senior Housing* Calculated as FP Jan. 2022 Annualized NOI ÷ Acquisition PriceNumber of PropertiesAssets Under Management(Total Acquisition Value)Investment ratioLeasable UnitsOccupancyNOI Yield*As of Jan. 31, 20222 properties 2.7 billion yen0.6 %163 units100 %(Rent Guarantee Contract)6.8 %InvestmentHoldingsS-022 Life & Senior House Kohoku IIThere are units both for tenants needing nursing and tenants who are do not. Depending on the tenants condition they are able to transfer between the two type units.The neighborhood is filled with greenery a, are parks and trails.Keep Looking for Properties with Strong DemandTargeted AssetsAssets that can be expected to have continued demand.Equivalent locational requirements with good access to public transportation.Expected YieldTo insure future liquidity there should be some premium over normal residential assets.Population of Seniors Will Grow in Every Major Cities200NationwideTokyo 23 Wards150SapporoSendaiNagoyaOsakaFukuokaPopulation Trend of 65 Years or Older (Indexed using 2010 figure as 100)S-029 Cocofump HiyoshiLocated 8 min. walk away from Hiyoshi Honcho Station. Day service center and home nursing center is also located in the property.On the commercial space, there are medical clinics and drugstores.1002015202520352045Source: National Social Security and Population Research Center（March 2018）1 S-022Life & Senior House Kohoku 2Prop. No.Property NameLocationBuiltNOI Yield*2 S-029Cocofump HiyoshiYokohama, KanagawaYokohama, Kanagawa10/200301/20107.0%6.4%© 2021 Advance Residence Investment Corporation All Rights Reserved42Student Housing* Calculated as FP Jan. 2022 Annualized NOI ÷ Acquisition PriceNumber of PropertiesAssets Under ManagementInvestment ratio(Total Acquisition Value)Leasable UnitsOccupancyNOI Yield*As of Jan. 31, 202219 properties 18.0 billion yen 3.9 % 1,709 units 100 %6.1 %(Rent Guarantee Contract)DormitoriesStudent ApartmentsDormitories usually have in addition to individual rooms, kitchen serving breakfast and dinner, common dining room and common room, and operated under an operatorStudent apartments are normal apartments tenants are exclusively studentsR-008 RESIDIA Kobe Port IslandT-153 RESIDIA Shimurasakaue IIS-023 College Court TanashiProp. No.Property NameLocationBuiltNOI Yield*RESIDIA Shimurasakaue IIItabashi, TokyoRESIDIA Shimurasakaue IIIItabashi, TokyoRESIDIA NakameguroRESIDIA KomazawaRESIDIA OjiRESIDIA Shin-ItabashiRESIDIA TakashimadairaRESIDIA Shimurasakaue1 T-0022 T-0603 T-1144 T-1355 T-1516 T-1527 T-1538 T-1549 T-159RESIDIA Nerima10 T-162RESIDIA Ogikubo II11 S-015RESIDIA Okurayama12 S-030RESIDIA Sagamihara13 R-00214 R-00815 R-038RESIDIA ImadegawaRESIDIA Kobe Port IslandRESIDIA Hirosedori16 R-060RESIDIA Okayama-Ekimae17 R-061RESIDIA Kyoto-OkazakiMeguro, TokyoSetagaya, TokyoKita, TokyoItabashi, TokyoItabashi, TokyoItabashi, TokyoNerima, TokyoSuginami, TokyoYokohama, KanagawaSagamihara, KanagawaKyoto, KyotoKobe, HyogoSendai, MiyagiOkayama, OkayamaKyoto, Kyoto02/200510/200802/200508/200902/200702/200703/200703/200703/200503/200703/199805/200402/199909/200702/201003/200403/20055.0%5.9%5.8%6.2%5.6%5.7%5.9%5.8%5.4%5.2%6.0%6.7%6.0%6.0%7.7%7.6%6.2%43Prop. No.Property NameLocationBuiltNOI Yield*1 S-011Tokyo • Student House WakoWako, Saitama2 S-023College Court TanashiNishi-Tokyo, Tokyo04/199002/20106.6%7.3%© 2021 Advance Residence Investment Corporation All Rights ReservedPortfolio Diversification PolicyInvestment Regions and Investment RatioInvestment RegionsInvestment ratio*1Tokyo 23 Wards Total70 ～ 100%Unit typesInvestment ratio*2SingleCompactFamilyLarge～ 50%20 ～ 40%20 ～ 40%～ 10%*Notes1. Investment ratios are calculated based on acquisition price.2. Investment ratios are calculated based on leasable area.Other RegionsTokyo Metropolitan (ex. Tokyo 23 Wards)Major Regional Cities0 ～ 30%In addition to the above, we invest in the following unit type.Unit typesInvestment ratio*2Dormitory Type Unitsup to 20%Dormitory Type Units The dormitories generally have shared bathrooms and laundry spaces.Life & Senior House Kohoku 2, College Court Tanashi and Cocofump Hiyoshi are categorized as Dormitory type due to their characteristics.Unit-type DefinitionFloor Plan～30m2 ～40m2 ～50m2 ～60m2 ～70m2 ～80m2 ～90m2over 90m2Studio1 Bedroom2 Bedroom3 Bedroom4 Bedroom ～SS–––SCC––CCCF–CCFF–LLFFFLLFFFLLFFFLLLLLStudio1 Bedroom2 Bedroom3 Bedroom4 Bedroom 1R, 1K, STUDIO1DK, 1LDK2DK, 2LDK, 1LDK+S3DK, 3LDK, 2LDK+S4DK, 4LDK, 3LDK+S, or units with more roomsS = SingleC = CompactF = FamilyL = Largemostly for singles mostly for singles, couples, or small families mostly for families mostly for foreign executives© 2021 Advance Residence Investment Corporation All Rights Reserved44Building a High Quality PortfolioChanges in Portfolio Since the MergerAs of Jan. 31, 2022Acquisitions and Dispositions Since the MergerAcquisition Focused on Single-type UnitsAcquisitionsDispositionsSingleCompactFamilyLargeDormitoryOthersTotalNo. of Properties13753+3,162+694+403-145+0+19+4,133Total Value (Acquisition Price)199.1 bn yen78.3 bn yen+509+10-105+0-748-1-335Weighted Average NOI Yield5.7%*14.6%*2Weighted Average Building Age*35.4 yrs.13.3 yrs.+1,899+1,250+393+64+0+3+3,609Other Regions +2,408+1,260+288+64-748+2+3,274Total+5,570+1,954+691-81-748+21+7,407Changes in No. of UnitsTokyo 23 Wards TotalTokyo MetropolitanMajor Regional CitiesImproving Yield and Reducing Average AgeBook Value NOI YieldBuilding AgeAt the time of merger5.2%18.3 yrs.*5After all scheduled transactions5.6%*415.4 yrs.Unit Type Investment Ratio (by leasable area)At the time of merger30%26%29%9%3%3%1%After all scheduled transactions37%27%26%5%4%0%25%50%75%100%SingleCompactFamilyLargeDormitoryOthersBalanced and Diversified Acquisition SourcesTransactions Since MergerThe Sponsor Group*6BridgeFunds*7Third Party and OthersTotalNo. of PropertiesTotal Acquisition Value (bn yen)3154.94252.46491.7137199.1*1 Weighted average NOI yield of acquired assets = Total annual NOI of acquired assets as entered on the appraisal report at time of acquisitions ÷ Total of acquisition prices × 100*2 Weighted average NOI yield of sold assets = (annualized) total of actual annual NOI of sold assets in the latest period ÷ Total of acquisition prices × 100*3 Weighted average building age is acquisition price weighted average as of the time of acquisition or disposition.*4 Calculated as follows: actual annualized NOI of FP01-2022 ÷ acquisition price × 100 *5 Weighted average age of buildings based on the assumption that the buildings held at the time of the merger were held as of *6 The Sponsor Group applies to Itochu Corporation, who is the parent company of ADR’s asset management company, and its Share of Sources27.6%26.3%46.1%100%*7 Bridge Funds are property funds which are often TK and where ADR has a right of first refusal on the assets under January 31, 2022.subsidiaries.management.© 2021 Advance Residence Investment Corporation All Rights Reserved45Measures to Reduce Rent Declines Caused by AgingRents Decline due to AgingMeasures taken to prevent or reduce rent declinesEquipment’s performance declineBuilding MaintenanceTimely Capital ExpendituresDecrease in quality due to wearingChange in tenants’ needsDaily repairsDaily cleaningEquipment maintenanceLarge-scale renovations of common areas and exteriorsRenovations of individual apartment unitsGradual Decline in CompetitivenessProviding living environments that satisfy the tenants’ needsREIT = Assuming long-term ownershipUnder the medium- to long-term management plan, we aim to maintain and improve competitiveness1101009080tneR dexednI laciteroehT700Singles* Rent Index for Units Let Between 2009 to 2016Singles Rent Index for Units Let Between 2003 to 2008Recent Buildings have slower rate of decline in Rent510152025Building AgeFigures are indexed theoretical rent categorized by year and building age using actual rents provided by At Home Co., Ltd., of which Sumitomo Mitsui Trust Research Institute Co., Ltd. statistically processed using hedonic method.* Analysis was conducted on rent data from single-type units (18m2 to 30m2) of apartments in 23 wards of Tokyo.© 2021 Advance Residence Investment Corporation All Rights Reserved46Examples of Rents Maintained by RenovationBy taking proper measures competitiveness can be maintainedbeforeBuilding age30 yearsafterExamine the impact of renovationsBuilding age 10 yrs.Building age 20 yrs.Building age 30 yrs.February 2010Large-scale renovationRents for RESIDIA Kichijoji are indexed by basing the average per m2 rent during 2001 as 100.Units w/ standard restoration workUnits went under VE worksUnits having t/o more than twice after VE worksbeforeBuilding age27 yearsafterExamine the impact of renovationsBuilding age 10 yrs.Building age 20 yrs.RESIDIA ShibauraCommon area renovationCost: 137
