Advance Residence Investment : Notice Concerning Revision to Forecast of Financial Results

September 12, 2023

For Immediate Release

Advance Residence Investment Corporation

Securities Code：3269

1-105Kanda-Jinbocho,Chiyoda-ku, Tokyo

Wataru Higuchi, Executive Director

Asset Management Company:

ITOCHU REIT Management Co., Ltd.

Junichi Shoji, Representative Director,

President & CEO

Inquiries:

Isao Kudo, Executive Officer

TEL. [phone]

Notice Concerning Revision to

Forecast of Financial Results for the Period Ending January 31, 2024 (FP27) and

Forecast of Financial Results for the Period Ending July 31, 2024 (FP28)

Advance Residence Investment Corporation ("ADR") hereby announces its forecast of results for the fiscal period ending January 31, 2024 (27th fiscal period: August 1, 2023 to January 31, 2024), which was announced on March 16, 2023, as well as its new forecast of results for the fiscal period ending July 31, 2024 (28th fiscal period: February 1, 2023 to July 31, 2024).

1. Revised forecast of financial results for the fiscal period ending January 31, 2024 (27th period: August 1, 2023 to January 31, 2024)

1. Revision of operating forecast

						Distributions
						per unit	Dividend per
					Earnings	(excluding
	Operating	Operating	Ordinary	Net	unit in
	per unit	distributions
	excess of
	revenue	income	income	income
	(Note1)	in excess of	earnings
						earnings)
						(Note2)
Previous Forecast	million yen	million yen	million yen	million yen	yen	yen	yen
(A)	17,572	7,876	6,973	6,972	5,034	5,780	0
Revised forecast	million yen	million yen	million yen	million yen	yen	yen	yen
(B)	18,623	8,861	7,944	7,944	5,543	5,870	0
Increase/decrease	million yen	million yen	million yen	million yen	yen	yen	yen
(B) - (A)	1,051	984	971	971	509	90	0
Percentage change	%	%	%	%	%	%	%
+6.0	+12.5	+13.9	+13.9	+10.1	+1.6	0

1

Note: This document is a press release intended for general publication regarding ADR's revised forecast of business performance for the fiscal period ending January 31, 2024 (27th period) and forecast of business performance for the fiscal period ending July 31, 2024 (28th period), and has not been prepared for the purpose of soliciting investment. ADR asks that investors make investment decisions only after they have made sure to refer to the prospectus for the issuance of new investment units and secondary offering of investment units as well as amendments thereto (if any) prepared by ADR, and that they make investment decisions at their own discretion and responsibility.

（Note1） Earnings Per Unit is calculated by dividing the forecasted Net income by the forecasted number of investment units issued and outstanding at the end of the fiscal period. The number of investment units issued and outstanding at the end of the forecast period is assumed to be 1,385,000 units in the previous forecast and 1,433,000 units in the revised forecast.

（Note2） The source of funds for distribution payment includes the scheduled reversal of reserve for temporary difference adjustments. The reversal of reserve is assumed to be 841 million yen (607 yen per unit) in the previous forecast and 852 million yen (594 yen per unit) in the revised forecast. The "amount of FP under review" differs from the "amount of Net income" because a portion of Gain on sales (871 million yen) out of Net income is assumed to be retained instead of distributed and the reversal of Retained earnings (486 million yen in the period ending January 2024) is also assumed.

(2) Reason for revision

As described in the "Notice Concerning Issuance of New Investment Units and Secondary Offering of Investment Units" released today, the issuance of new investment units was resolved at the ADR's Board of Directors meeting held today, and the acquisition of properties described in the "Notice Concerning Property Acquisition (RESIDIA Shirokane-Takanawa II and 10 other properties)" released today, etc. The forecasted management situation for the fiscal period ending January 31, 2024, announced on March 16, 2023, has been revised in accordance with the following factors.

2. Forecast for the fiscal period ending July 31, 2024 (28th period: February 1, 2024 to July 31, 2024)

						Distribution
						s per unit	Dividend
	Operating	Operating	Ordinary	Net	Earnings	(excluding
	per unit
	per unit	distributions
	revenue	income	income	income	inexcess of
	(Note3)	in excess of
						earnings)	earnings
						(Note4)
Fiscal Period
ending July 31,	million yen	million yen	million yen	million yen	yen	yen	yen
2024	18,186	8,113	7,179	7,179	5,010	5,890	0
forecast

（Note3） Net income under review is calculated by dividing the forecasted Net income by 1,433,000 units, which is the number of investment units issued and outstanding at the end of the forecast period.

（Note4） The source for payment of distributions includes 854 million yen (596 yen per unit) scheduled to be reversed from the Reserve for temporary difference adjustments and is different from the "Amount of Earnings Per Unit" because it assumes reversal of Retained earnings (406 million yen).

2

Note: This document is a press release intended for general publication regarding ADR's revised forecast of business performance for the fiscal period ending January 31, 2024 (27th period) and forecast of business performance for the fiscal period ending July 31, 2024 (28th period), and has not been prepared for the purpose of soliciting investment. ADR asks that investors make investment decisions only after they have made sure to refer to the prospectus for the issuance of new investment units and secondary offering of investment units as well as amendments thereto (if any) prepared by ADR, and that they make investment decisions at their own discretion and responsibility.

Note

• The above amounts are rounded down to the indicated unit, unless otherwise indicated, and other figures or ratios are rounded to the indicated unit, unless otherwise noted. The same applies hereinafter.
• Dividend per unit" is the amount including the reversal of Reserve for temporary difference adjustments, etc., and differs from "Earnings Per Unit".
• The above revised and forecasted figures are the current figures calculated based on the assumptions described in "3. The actual figures may vary due to future acquisitions or dispositions of real estate, etc., changes in the real estate market, etc., changes in other circumstances surrounding ADR, etc. The above forecast is not a guarantee of distribution amount.
• The Company may revise its forecasts if it expects a certain degree of deviation from the above forecasts.
• Please refer to the attachment for details on dividend per unit.

3

Note: This document is a press release intended for general publication regarding ADR's revised forecast of business performance for the fiscal period ending January 31, 2024 (27th period) and forecast of business performance for the fiscal period ending July 31, 2024 (28th period), and has not been prepared for the purpose of soliciting investment. ADR asks that investors make investment decisions only after they have made sure to refer to the prospectus for the issuance of new investment units and secondary offering of investment units as well as amendments thereto (if any) prepared by ADR, and that they make investment decisions at their own discretion and responsibility.

3. Assumptions for the Revised Forecast of Management Situation for the Period ending January 31, 2024 and the Forecast of Management Situation for the Period ending July 31, 2024

(Data) Item				Prerequisite
Accounting period	・ Fiscal period ending January 31, 2024: August 1, 2023 - January 31, 2024 (184 days)
	・ Fiscal period ending July 31, 2024: February 1, 2024 - July 31, 2024 (182 days)
Assets under	・ The 276 properties owned as of the date of this document (277 properties owned as of the end of July
management	2023, excluding RESIDIA Azabudai (51% quasi co-ownership interest), which was sold on August 1,
	2023; hereinafter "existing owned properties") The acquisition of 11 assets-to-be-acquired① through
	⑪ in 【Assets-to-be-acquired】 below (the "Assets to be Acquired") is scheduled to be completed, in
	addition to the existing properties (the "Existing Properties"), as follows.
	【Assets-to-be-acquired】
	①	T-182	RESIDIA Shirokane-Takanawa II	... Acquisition on September 29, 2023
	②	T-183	RESIDIA Meguro IV		... Acquisition on September 29, 2023
	③	T-184	RESIDIA Bunkyo Koishikawa II(Note1)	... Acquisition on September 29, 2023
	④	T-185	RESIDIA Shinagawa Seaside(Note1)	... Acquisition on September 29, 2023
	⑤	T-186	Share Place Shimo-kitazawa		... Acquisition on September 29, 2023
	⑥	R-087	RESIDIA Kyudai-Gakkentoshi		... Acquisition on September 29, 2023
	⑦	R-088	RESIDIA Kyusandaimae(Note1)		... Acquisition on September 29, 2023
	⑧	T-187	RESIDIA Ochanomizu III		... Acquisition on April 18, 2024
	⑨	T-188	RESIDIA Sangenjaya III		... Acquisition on April 18, 2024
	⑩	T-189	RESIDIA Sendagi		... Acquisition on April 18, 2024
	⑪	S-036	Tokyo Student-HouseMusashi-Kosugi(Note1)	... Acquisition on April 18, 2024
		(Note1)	Since ADR plans to change the name of the property after the acquisition, the property name in this
		document is the name after the change.
	・ It is assumed that, except for the acquisition of the above 11 asset-to-be-acquired, there will be no changes
	in assets under management (e.g., acquisition of new properties or transfer of properties owned) until the
	end of the fiscal period ending July 31, 2024.
	・ The average occupancy rate at the end of each month during the period is expected to be as follows
	Fiscal period ending January 31, 2024: 96.5% Fiscal period ending July 31, 2024: 96.5%
Operating revenue	・ Rental revenues for existing properties are calculated based on historical figures and taking into account
	the leasing situation, while those for asset-to-be-acquired are calculated based on future forecasts, taking
	into account the market environment and the competitiveness of the property, among other factors.
	・ Operating revenue is based on the assumption that there are no delinquencies or nonpayment by tenants.
	・ Gain on sales of "RESIDIA Azabudai" is expected to be 871 million yen.
Operating	・ Of rental expenses, which are the principal operating expenses, administrative outsourcing expenses and
expenses	other expenses other than depreciation are calculated based on historical data and reflect factors that may
	cause expenses to fluctuate.
	・ Depreciation, including incidental expenses, is calculated on a straight-line basis and is expected to be as
	follows
	FP ending January 2024: 3,458 million yen	FP ending July 2024: 3,481 million yen
	・ The amount of property tax, city planning tax, etc. to be expensed is expected to be as follows.
	FP ending January 2024: 946 million yen	FP ending July 2024: 956 million yen
	Property taxes and city planning taxes for the year of acquisition on the acquired assets will not be

4

Note: This document is a press release intended for general publication regarding ADR's revised forecast of business performance for the fiscal period ending January 31, 2024 (27th period) and forecast of business performance for the fiscal period ending July 31, 2024 (28th period), and has not been prepared for the purpose of soliciting investment. ADR asks that investors make investment decisions only after they have made sure to refer to the prospectus for the issuance of new investment units and secondary offering of investment units as well as amendments thereto (if any) prepared by ADR, and that they make investment decisions at their own discretion and responsibility.

		recorded as expenses for the relevant period, as the equivalent amount to be reimbursed based on the
		number of days of ownership will be included in the acquisition cost.
		Accordingly, the following is the schedule for the start of recording property taxes and city planning taxes
		on the 11 asset-to-be-acquired properties as expenses.
				Start of expense			(Reference)
					recognition
						Estimated annual amount
					(Note1)
		7 properties to be acquired in		FP ending July 31,
		2023(Note2)			2024			Total 31 million yen
		4 properties to be acquired in		FP ending July 31,
		2024(Note3)			2025			Total 30 million yen
	（Note1）In the period in which the expense is to be recognized, the amount equivalent to 3 months will be recognized
		as expense, and in the following period and thereafter, the amount equivalent to 6 months will be recognized
		as expense.
	（Note2）The following properties are included in this category: RESIDIA Shirokane-Takanawa II, RESIDIA
		Meguro IV, RESIDIA Bunkyo Koishikawa II, RESIDIA Shinagawa Seaside, Share Place Shimo-kitazawa,
		RESIDIA Kyudai-Gakkentoshi, and RESIDIA Kyusandaimae.
	（Note3）The following properties are included in this category: RESIDIA Ochanomizu III, RESIDIA Sangenjaya
		III, RESIDIA Sendagi, and Tokyo Student-HouseMusashi-Kosugi.
	・ For building repair expenses, the amount expected to be required during the operating period is recorded
		as expenses. However, repair expenses for the relevant operating period may differ significantly from the
		forecasted amount due to the possibility of emergency repair expenses arising from damage to buildings
		caused by unforeseeable factors, etc.
Non-operating	・ The following amounts are expected to be used for interest expense and financing-related expenses.
expenses		FP ending January 2024: 855 million yen	FP ending July 2024: 903 million yen
	・ ADR expects to record one-time expenses of 29 million yen in the FP ending January 31, 2024, related
	to the issuance of new investment units, etc., as decided at ADR's Board of Directors meeting held today.
Debt	・ Although the total amount of Debt as of today is 231,809 million yen, ADR will (1) repay 1,000 million
		yen of existing loans maturing on October 24, 2023 on September 29, 2023 with the funds on hand, (2)
		redeem 1,000 million yen of Investment Corporation Bonds maturing on April 26, 2024 with the funds
		on hand, and (3) redeem 1,000 million yen of Investment Corporation Bonds maturing on November 15,
		2023 with the proceeds from the issuance of new investment units decided at the ADR's Board of
		Directors meeting held today. (3) ADR will use the proceeds from the issuance of new investment units
		decided at the ADR's Board of Directors meeting held today to repay existing Loans maturing on
		November 15, 2023 in the amount of 2,600 million yen on September 29, 2023. (4) Repay a total of 1,000
		million yen on the final repayment date against the existing loan whose final repayment date is December
		18, 2023 with the proceeds from the issuance of the said new investment units; (5) Borrow a total of 3,000
		million yen in September 2023 as part of the funds for the acquisition of the asset-to-be-acquired in
		September 2023; and (6) borrowing a total of 8,100 million yen in April 2024 as part of the funds for the
		acquisition of the asset-to-be-acquired.
	・ In addition to the above, it is assumed that loans and bonds that become due for repayment after the date
	of this document will be refinanced in full or that funds will be allocated through bonds.
	・ As a result of the above, total debt and LTV (total assets base) ratio as of the end of each fiscal period are
	expected to be as follows.
		FP ending January 2024: Total debt 230,209 million yen, LTV (total assets base) approx. 47.7%
		FP ending July 2024: Total debt: 237,309 million yen, LTV (total assets base): approx. 48.5%
	・ The following formula is used to calculate the LTV (total assets base) in this projection.
		LTV (total assets base) = (Total debt / Total assets base) x 100 (%)

5

Note: This document is a press release intended for general publication regarding ADR's revised forecast of business performance for the fiscal period ending January 31, 2024 (27th period) and forecast of business performance for the fiscal period ending July 31, 2024 (28th period), and has not been prepared for the purpose of soliciting investment. ADR asks that investors make investment decisions only after they have made sure to refer to the prospectus for the issuance of new investment units and secondary offering of investment units as well as amendments thereto (if any) prepared by ADR, and that they make investment decisions at their own discretion and responsibility.