平成18年4月●日 For Immediate Release

April 9, 2015
Investment Corporation: Daiwa House Residential Investment Corporation
7th Floor, Nissei Nagatacho Building
2-4-8 Nagatacho, Chiyoda-ku, Tokyo Tetsuji Tada, Executive Director (Code Number: 8984)
Asset Manager: Daiwa House Asset Management Co., Ltd.
Koichi Tsuchida, CEO & President
Inquiries: Hirotaka Uruma, CFO & Director Finance & Corporate Planning Department TEL: +81-3-3595-1265

Notice Concerning Revision of Operation Status Forecasts for the 19th Fiscal Period and 20th Fiscal Period

Daiwa House Residential Investment Corporation ("DHI") announces the following revision of
operation status forecasts for the fiscal period ending in August 2015 (19th Fiscal Period: from March 1,
2015 to August 31, 2015) and the fiscal period ending in February 2016 (20th Fiscal Period: from September 1, 2015 to February 29, 2016) from that announced in "Notice Concerning Cancellation of Issuance of New Investment Units and Secondary Offering of Investment Units, Cancellation of Debt Financing, Postponement of Acquisition and Leasing of Domestic Assets, and Revision of Operation Status Forecasts" dated March 18, 2015.
1. Reason for Revision
DHI is announcing the revision of operation status forecasts for the fiscal period ending in August 2015 and February 2016 from that announced on March 18, 2015, as a resolution was passed at a board of directors meeting held today to undertake the debt financing as well deciding to redetemine the scheduled acquisition date of assets (Pacific Royal Court Minatomirai Urban Tower, Royal Parks SEASIR, Royal Parks Musashikosugi, Castalia Honkomagome and L-Place Shinkoyasu).
2. Revision of Operation Status Forecasts for the 19th Fiscal Period and 20th Fiscal Period
(1) Revision of Operation Status Forecasts for the 19th Fiscal Period

This English language notice is a translation of the Japanese language notice and was prepared solely for the convenience of, and reference by,

overseas investors. DHI makes no warranties as to its accuracy or completeness.

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Operating revenue (million yen)

Operating income (million yen)

Ordinary income (million yen)

Net income (million yen)

Distribution per unit

(excluding distribution in excess of earnings) (yen)

Distribution in excess of earnings per unit

(yen)

19th Fiscal Period

Previous forecasts

(A)

19th Fiscal Period

Revised forecasts

(B)

9,252

3,924

3,132

3,132

4,440

Amount of increase

(decrease) (B-A)

Rate of increase

(decrease) (%)

(Note) Total distributions for the19th Fiscal Period Revised forecasts include the reversal of internal reserves (187 million yen).

(2) Revision of Operation Status Forecasts for the 20th Fiscal Period

Operating revenue (million yen)

Operating income (million yen)

Ordinary income (million yen)

Net income (million yen)

Distribution per unit

(excluding distribution

in excess of earnings) (yen)

Distribution in excess of earnings per unit

(yen)

20th Fiscal Period

Previous forecasts

(A)

20th Fiscal Period Revised forecasts (B)

9,532

3,954

3,151

3,150

4,480

Amount of increase

(decrease) (B-A)

Rate of increase

(decrease) (%)

(Note) Total distributions for the 20th Fiscal Period Revised forecasts include the reversal of internal reserves (198 million yen).

[Reference]

Forecasted number of outstanding investment units for the 19th Fiscal Period: 747,740 units

Forecasted number of outstanding investment units for the 20th Fiscal Period: 747,740 units

[Note]

(1) The above forecasts are the current operation status forecasts calculated based on the assumption in the attachment "Assumptions for Operating Forecasts of the 19th and 20th Fiscal Periods." Actual operating revenue, operating income, ordinary income, net income and distributions per unit may vary due to factors such as the future acquisition or sale of real estate, etc. changes in rent income due to changes in tenants, etc., unanticipated need for repairs, fluctuations in the real estate market, etc., fluctuations in interest rates, the actual decided number and issue value of new investment units to be issued, and changes in other conditions surrounding DHI. Moreover, these forecasts are not intended as a guarantee of distribution amount.

(2) Figures for monetary amounts are rounded down to the nearest specified unit, the same hereafter.

(3) The funds from which distributions are paid out for the 19th Fiscal Period as well as for the 20th Fiscal Period are the amounts including the reversal of internal reserves and differ from "net income."

This English language notice is a translation of the Japanese language notice and was prepared solely for the convenience of, and reference by,

overseas investors. DHI makes no warranties as to its accuracy or completeness.

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3. Basis for Calculation of Forecasts for Total Distributions and Distribution per Unit for the 19th
Fiscal Period and 20th Fiscal Period
(1) Distribution Policy
(i) With the amount where the amount equivalent to capital expenditure is deducted from the amount equivalent to depreciation and amortization as the upper limit, the amount which will be decided by DHI will be reversed from internal reserves (18.2 billion yen as of the end of February 2015) and used to add to net income.
Furthermore, as of today it is DHI's policy for the time being to set the target of the amount to be added to each fiscal period's net income to be the amount equivalent to 10% the amount equivalent to depreciation and amortization of each fiscal period. However, this amount to be added is subject to change with due consideration to the external environment such as the financial economy, the overall situation of the J-REIT market, the situation of DHI's owned assets and its financial situation, etc.
(ii) Stabilization (Note) of distributions will be aimed for by reversing internal reserves in case net income falls below the initially expected amount due to extraordinary losses such as loss from disposition of properties, in case of the dilution of distribution due to capital increase, in case sufficient revenues could not be secured due to short operation periods of properties acquired during a fiscal period along with a capital increase, or in the case of extraordinary expenses such as issuance expenses arising.
(iii) In case the operating performance results fall below forecasts, stabilization (Note) of distributions will be aimed by reversing internal reserves for the portion of the operating performance results that were lower than forecasts.
Furthermore, DHI's reversals of internal reserves are reversals of internal reserves (reserve in preparation of distribution) and do not fall under distributions in excess of earnings (return of unitholders' capital).

(Note) Under the new distribution policy, DHI has the policy to stabilize distributions. However, it is not intended as a guarantee or promise of the forecast distribution amounts.

(2) Forecasts for the 19th Fiscal Period

Net income (net income per unit)

3,132 million yen (4,189 yen)

Reversal of reserve in preparation of distribution

(reversal of reserve in preparation of distribution per unit)

187 million yen (251 yen)

Total distributions (distribution per unit)

3,319 million yen (4,440 yen)

This English language notice is a translation of the Japanese language notice and was prepared solely for the convenience of, and reference by,

overseas investors. DHI makes no warranties as to its accuracy or completeness.

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(3) Forecasts for the 20th Fiscal Period

Net income (net income per unit)

3,150 million yen (4,214 yen)

Reversal of reserve in preparation of distribution

(reversal of reserve in preparation of distribution per unit)

198 million yen (266 yen)

Total distributions (distribution per unit)

3,349 million yen (4,480 yen)

* This press release is (original Japanese version) to be distributed to the Kabuto Club (the press club of the Tokyo Stock Exchange); the Ministry of Land, Infrastructure, Transport and Tourism Press Club; and the Ministry of Land, Infrastructure, Transport and Tourism Press Club for Construction Publications.

* URL of the DHI's website: http://daiwahouse-resi-reit.co.jp/eng/

This English language notice is a translation of the Japanese language notice and was prepared solely for the convenience of, and reference by,

overseas investors. DHI makes no warranties as to its accuracy or completeness.

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Assumptions for Operating Forecasts of the 19th and 20th Fiscal Periods

Item

Assumptions

Period

Fiscal period ending in August 2015: March 1, 2015 to August 31, 2015 (184 days)

Fiscal period ending in February 2016: September 1, 2015 to February 29, 2016 (182 days)

Assets under

management

DHI owns 136 real estate and trust beneficiary rights in real estate ("real estate, etc.") as of

today.

The acquisition of 5 properties to be acquired announced today will bring the total to 141

properties (assets under management). DHI assumes there will be no changes in portfolio composition (new property acquisitions or sale of acquired properties, etc.) from the 141 properties through to February 29, 2016.

The actual assets under management may vary as a result of changes in the portfolio

composition, etc.

Investment Units

Issued and

Outstanding

DHI assumes that a total number of 747,740 units will not change through to February 29,

2016.

Operating Revenue

Operating revenue include rent income, common area charges income, parking space

income, incidental revenue, utilities income, key money, etc. Each of these items is calculated based on historical data and future projections.

The fiscal period average of month-end occupancy rates is expected to be 95.5% for the 19th

Fiscal Period and 95.5% for the 20th Fiscal Period.

Operating Expenses

Operating expenses include management fees, utilities expenses, non-life insurance

expenses, depreciation and amortization, trust compensations, repair expenses, etc. For property tax, urban planning tax and depreciative property tax, 495 million yen is forecast for the 19th Fiscal Period and 498 million yen is forecast for the 20th Fiscal Period. As for property tax and urban planning tax which are to be settled with the previous owner (previous beneficiary) according to the number of days owned in conjunction with the new acquisition of real estate, etc., they are calculated into the acquisition cost and are therefore not recorded as expense. Each of these items is calculated based on historical data and future projections.

Selling, general and administrative expenses are estimated based on actual values or rates,

etc. of each item individually.

Depreciation and amortization is calculated based on the straight-line method.

Depreciation and amortization is expected to be 1,890 million yen for the 19th Fiscal

Periods and 1,990 million yen for the 20th Fiscal Periods.

Balance of

Interest-bearing

Liabilities

DHI assumes the balance of interest-bearing liabilities as of February 28, 2015 of 122,463

million yen and assumes the following changes in this balance:

- New loan as the part of funds for the to-be-acquired assets on May 1, 2015 in the amount of 20,000 million yen; and

- Prepayment of the loan based on a commitment line agreement in the amount of 800 millon yen on June 30, 2015.

DHI assumes that there will be no subsequent change in the balance of interest-bearing

liabilities through to February 29, 2016.

Non-operating

Expenses

Interest expenses, etc. (including borrowing related expenses) are expected to be 789 million

yen for the 19th Fiscal Period and 804 million yen for the 20th Fiscal Period.

Distribution per Unit

DHI assumes it will pay out distributions (distributions per unit) of no more than the amount

of earnings pursuant to the cash distributions policy in its Articles of Incorporation. Moreover, based on "3. Basis for Calculation of Forecasts for Total Distributions and Distribution per Unit for the 19th Fiscal Period and 20th Fiscal Period" above, DHI assumes it will implement a reversal of part of internal reserves and make this the source of funds, aside from net income, and that it will implement a reversal of internal reserves (reserve in preparation of distribution) for the amount equivalent to 10% the amount equivalent to depreciation and amortization of each period (187 million yen for the 19th Fiscal Period

This English language notice is a translation of the Japanese language notice and was prepared solely for the convenience of, and reference by,

overseas investors. DHI makes no warranties as to its accuracy or completeness.

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(251 yen per unit) and 198 million yen for the 20th Fiscal Period (266 yen per unit)).

The amount of distributions per unit may vary due to factors such as acquisition or sale of

real estate, etc., changes in rent income in conjunction with changes in tenants, etc., unanticipated need for repairs, fluctuations in the real estate market, etc., fluctuations in interest rates, the actual decided number and issue value of new investment units to be issued, and changes in other conditions surrounding DHI.

Distribution in Excess

of Earnings per Unit

DHI does not currently anticipate distributions in excess of earnings per unit.

Others

DHI assumes that there will be no amendments to laws and regulations, the taxation system,

accounting standards, listing regulations, Investment Trusts Association rules, etc. that would affect the above forecasts.

DHI assumes that there will be no unforeseen material changes in general economic

conditions, real estate market conditions, etc.

This English language notice is a translation of the Japanese language notice and was prepared solely for the convenience of, and reference by,

overseas investors. DHI makes no warranties as to its accuracy or completeness.

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