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Daiwa House Residential Investment Corp : Notice Concerning Issuance of New Investment Units and Secondary Offering of Investment Units

03/01/2013 | 02:23am US/Eastern
For Immediate Release

March 1, 2013
Investment Corporation: Daiwa House Residential Investment Corporation
7th Floor, Nissei Nagatacho Building
2-4-8 Nagatacho, Chiyoda-ku, Tokyo Michio Taki, Executive Director (Code Number: 8984)
Asset Manager: Daiwa House Asset Management Co., Ltd.
Yuji Yamada, CEO & President
Inquiries: Hirotaka Uruma, CFO & Director Finance & Corporate Planning Department TEL: +81-3-3595-1265

Notice Concerning Issuance of New Investment Units and Secondary Offering of Investment Units

Daiwa House Residential Investment Corporation ("DHI") announces that the resolution was passed at a board of directors meeting held on March 1, 2013 to issue new investment units and conduct secondary offering. The details are as follows.
1. Issuance of New Investment Units through Public Offering (Primary Offering)

(1)

Number of investment units to be offered:

28,000 units

(2)

Issue price (Offer price):

To be determined

The issue price (offer price) shall be determined by taking the price arrived at when the closing price in regular trading of the

investment units of DHI (the "DHI investment units") on the

Tokyo Stock Exchange, Inc. on any day between March 11,

2013 (Monday) and March 14, 2013 (Thursday) (the "Pricing Date") (when there is no closing price on that day, the closing price on the most recent day preceding that day) is multiplied by a factor between 0.90 and 1.00 (price shall be rounded down to the nearest 1 yen) as the provisional condition, in accordance with the method stated in Article 25 of the Regulations Concerning Underwriting, etc. of Securities provided by the Japan Securities Dealers Association, then taking the demand conditions and other factors into account.

<Disclaimer> This document is a press release to make a public announcement of the issuance of new investment units and secondary offering of investment units of Daiwa House Residential Investment Corporation, and has not been prepared as a solicitation for investment. DHI cautions investors to ensure that they refer to the prospectus for notification of the issuance of new investment units and secondary offering of investment units as well as amendments thereto prepared by DHI (if such have been prepared) before undertaking investments and investments be made at their own discretion and responsibility.


This English language notice is a translation of the Japanese language notice issued on the same day and was prepared solely for the convenience of, and reference by, overseas investors. DHI makes no warranties as to its accuracy or completeness.

(3)

(4)

Paid-in amount (Issue value):

Total paid-in amount (issue value):

To be determined

The paid-in amount (issue value) shall be determined on the Pricing Date in accordance with the method stated in Article 25 of the Regulations Concerning Underwriting, etc. of Securities provided by the Japan Securities Dealers Association. Please note that the paid-in amount (issue value) refers to the amount per DHI investment unit that DHI is to receive as the amount paid in for new investment units.

To be determined

(5)

(6)

Offering method:

Underwriting agreement details:

The offering shall be a primary offering in which all DHI

investment units subject to the primary offering shall be purchased and underwritten by an underwriting syndicate of which Daiwa Securities Co. Ltd., Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. and Nomura Securities Co., Ltd. are the joint lead managers (collectively referred to as the "Joint Lead Managers"). The underwriters other than the Joint Lead Managers shall be Mizuho Securities Co., Ltd., SMBC Nikko Securities Inc. and UBS Securities Japan Ltd. (collectively referred to with the Joint Lead Managers as the "Underwriters"). The Underwriters shall purchase and underwrite DHI investment

(7)

Subscription unit:

units at the issue value determined on the Pricing Date, and

conduct a primary offering at an amount that differs to the concerned issue value (issue price). DHI shall not pay an

underwriting fee to the Underwriters. However, the Underwriters

shall pay in the total paid-in amount (issue value) on the payment date stated in (9) below, and the difference between the total

issue price (offer price) and total paid-in amount (issue value)

shall be the proceeds of the Underwriters.

1 unit or more in multiples of 1 unit

(8)

Subscription period:

The subscription period shall be between the business day

following the Pricing Date and the date that marks two business days after the Pricing Date.

(9)

(10)

Payment date:

Transfer date:

The payment date shall be any day between March 18, 2013 (Monday) and March 22, 2013 (Friday). However, the date shall be five business days after the Pricing Date.

The transfer date shall be the business day following the

payment date.

(11) The issue price (offer price), paid-in amount (issue value) and other matters necessary for this issuance of

new investment units shall be determined at a future meeting of the board of directors.

(12) Each of the items above is subject to the condition that the securities registration document filed in accordancewith the Financial Instruments and Exchange Act takes effect.

2. Secondary Offering (Secondary Offering through Over-Allotment) (Please refer to <Reference> 1. below.)

(1) Seller: Daiwa Securities Co. Ltd.

<Disclaimer> This document is a press release to make a public announcement of the issuance of new investment units and secondary offering of investment units of Daiwa House Residential Investment Corporation, and has not been prepared as a solicitation for investment. DHI cautions investors to ensure that they refer to the prospectus for notification of the issuance of new investment units and secondary offering of investment units as well as amendments thereto prepared by DHI (if such have been prepared) before undertaking investments and investments be made at their own discretion and responsibility.


This English language notice is a translation of the Japanese language notice issued on the same day and was prepared solely for the convenience of, and reference by, overseas investors. DHI makes no warranties as to its accuracy or completeness.

(2)

(3)

Number of investment units to be sold:

Selling price:

2,800 units

The number of investment units to be sold above indicates the maximum number of investment units of the secondary offering through over-allotment. There may be cases where the number is reduced in light of demand conditions and other factors, or there may be cases where the secondary offering through over-allotment itself does not take place at all. The number of investment units to be sold shall be determined on the Pricing Date, taking the demand conditions and other factors into account.

To be determined

The selling price shall be determined on the Pricing

Date. Please note that the selling price shall be the same price as the issue price (offer price) of the primary offering.

(4)

Total selling price:

To be determined

(5)

(6)

Offering method:

Subscription unit:

Upon the primary offering, taking the demand

conditions and other factors of the primary offering into account, Daiwa Securities Co. Ltd. will conduct, separate from the primary offering, a secondary offering of DHI investment units that it is to borrow from DHI unitholder Daiwa House Industry Co., Ltd. with 2,800 units set as the maximum number.

1 unit or more in multiples of 1 unit

(7)

(8)

Subscription period:

Transfer date:

The subscription period is to the same as the

subscription period of the primary offering.

The transfer date shall be the same as the transfer

date of the primary offering.

(9) When the primary offering is suspended, the secondary offering through over-allotment is also

suspended.

(10) The number of investment units to be sold, selling price and other matters necessary for this secondary offering of investment units shall be determined at a future meeting of the board of directors.

(11) Each of the items above is subject to the condition that the securities registration document filed in accordance with the Financial Instruments and Exchange Act takes effect.

3. Issuance of New Investment Units by Way of Third-Party Allotment
(Please refer to <Reference> 1. below.)

(1) Number of investment units to be offered: 2,800 units

(2) Paid-in amount (Issue value): To be determined

The paid-in amount (issue value) is to be determined on the Pricing Date. Please note that the paid-in amount (issue value) shall be the same as the paid-in amount (issue value) of the primary offering.

(3) Total paid-in amount (issue value): To be determined

(4) Allottee and

number of investment units to be allotted:

Daiwa Securities Co. Ltd.

2,800 units

(5) Subscription unit: 1 unit or more in multiples of 1 unit

(6) Subscription period (Subscription date): April 16, 2013 (Tuesday)

(7) Payment date: April 17, 2013 (Wednesday)

<Disclaimer> This document is a press release to make a public announcement of the issuance of new investment units and secondary offering of investment units of Daiwa House Residential Investment Corporation, and has not been prepared as a solicitation for investment. DHI cautions investors to ensure that they refer to the prospectus for notification of the issuance of new investment units and secondary offering of investment units as well as amendments thereto prepared by DHI (if such have been prepared) before undertaking investments and investments be made at their own discretion and responsibility.

This English language notice is a translation of the Japanese language notice issued on the same day and was prepared solely for the convenience of, and reference by, overseas investors. DHI makes no warranties as to its accuracy or completeness.

(8) If some or all of the investment units are not applied for by the end of the subscription period (subscription date) set forth in (6) above, the issuance of those units not applied for shall be cancelled.

(9) When the primary offering is suspended, the issuance of new investment units by way of third-party allotment is also to be suspended.

(10) The paid-in amount (issue value) and other matters necessary for this issuance of new investment units shall be determined at a future meeting of the board of directors.

(11) Each of the items above is subject to the condition that the securities registration document filed in

accordance with the Financial Instruments and Exchange Act takes effect.

<Reference>
1. Secondary Offering through Over-Allotment, etc.
There may be cases where, upon the primary offering, taking the demand conditions and other factors of the primary offering into account, Daiwa Securities Co. Ltd. will conduct, separate from the primary offering, a secondary offering (secondary offering through over-allotment) of DHI investment units that it is to borrow from DHI unitholder Daiwa House Industry Co., Ltd. with 2,800 units set as the maximum number (the "borrowed DHI investment units"). The number of investment units to be sold through the secondary offering through over-allotment is planned to be 2,800 units, where said number of investment units to be sold indicates the maximum number of investment units to be sold. There may be cases where the number is reduced in light of demand conditions and other factors, or there may be cases where the secondary offering through over-allotment itself does not take place at all.
In relation to this, DHI passed a resolution at a meeting of the board of directors held on March 1, 2013 (Friday) to conduct, separate from the primary offering, an issuance of new investment units by way of third-party allotment of 2,800 DHI investment units with Daiwa Securities Co. Ltd. as the allottee (the "third-party allotment"), setting April 17, 2013 (Wednesday) as the payment date, for the purpose of Daiwa Securities Co. Ltd. acquiring the DHI investment units it requires to return the borrowed DHI investment units.
There may be cases where Daiwa Securities Co. Ltd. will conduct stabilizing transactions in conjunction with the primary offering and secondary offering through over-allotment. All or part of the DHI investment units acquired through said stabilizing transactions may be allocated to returning the borrowed DHI investment units.
In addition, theremay be cases during the period from the day following the date on which the subscription period for the primary offering and secondary offering through over-allotment ends to April 12, 2013 (Friday) (the "syndicate covering transaction period") where Daiwa Securities Co. Ltd. will purchase DHI investment units on the Tokyo Stock Exchange, Inc. up to the number of investment units of the secondary offering through over-allotment (the "syndicate covering transactions") for the purpose of returning the borrowed DHI investment units. The DHI investment units that Daiwa Securities Co. Ltd. acquires in the syndicate covering transactions will all be allocated to returning the borrowed DHI investment units. Please note that there may be cases during the syndicate covering transaction period where, at the discretion of Daiwa Securities Co. Ltd., no syndicate covering transaction is conducted at all, or syndicate covering transactions are terminated before the number of investment units purchased reach the number of investment units of the secondary offering through over-allotment.

<Disclaimer> This document is a press release to make a public announcement of the issuance of new investment units and secondary offering of investment units of Daiwa House Residential Investment Corporation, and has not been prepared as a solicitation for investment. DHI cautions investors to ensure that they refer to the prospectus for notification of the issuance of new investment units and secondary offering of investment units as well as amendments thereto prepared by DHI (if such have been prepared) before undertaking investments and investments be made at their own discretion and responsibility.


This English language notice is a translation of the Japanese language notice issued on the same day and was prepared solely for the convenience of, and reference by, overseas investors. DHI makes no warranties as to its accuracy or completeness.


Daiwa Securities Co. Ltd. plans to subscribe to DHI investment units through the third-party allotment for the number of investment units arrived at when the number of investment units acquired through stabilizing transactions and syndicate covering transactions that are to be allocated to returning borrowed DHI investment units is subtracted from the number of investments units of the secondary offering through over-allotment. Accordingly, there may be cases where all or part of the investment units to be issued by way of the third-party allotment may not be subscribed for, which may result in a decrease in the number of investment units planned to be issued by way of the third-party allotment, or the cancellation of the entire issuance due to forfeiture.
The transactions described above are to be conducted by Daiwa Securities Co. Ltd. upon consultation with Mitsubishi UFJ Morgan Stanley Securities Co., Ltd. and Nomura Securities Co., Ltd.
2. Changes in Total Number of Investment Units Issued After the Issuance of New Investment Units

Total number of outstanding investment units

321,070 units

(Note 1)

Number of investment units to be issued by issuance of new investment units through

primary offering

28,000 units

Total number of outstanding investment units after issuance of new investment units

through primary offering

349,070 units

Number of investment units to be issued by issuance of new investment units by way of

the third-party allotment

2,800 units

(Note 2)

Total number of outstanding investment units issued after issuance of new investment

units by way of the third-party allotment

351,870 units

(Note 2)

(Note 1) A 2-for-1 split of DHI investment units (the "Split") was implemented on March 1, 2013.

(Note 2) The number of investment units are based on the assumption that the new investment units to be issued by way of third-party allotment are all applied for by Daiwa Securities Co. Ltd.

3. Purpose and Reason for Issuance
Considerations made - while paying heed to market trends, DHI's LTV (ratio of interest-bearing liabilities to total assets) levels and cash distribution levels, and other factors - led to the decision to issue new investment units for the purpose of expanding asset size and enhancing portfolio quality through new acquisition of specified assets.
4. Total Amount to be Procured , Use of Funds and ScheduledOutlay Period
(1) Total Amount to be Procured (approximate net balance)
10,949,400,000 yen (maximum)

(Note) The sum total amount of 9,954,000,000 yen in proceeds from the primary offering and 995,400,000 yen in maximum proceeds from the issuance of new investment units by way of the third-party allotment is shown. In addition, the amount above is the estimated amount calculated based on the closing price in regular trading of DHI investment units on the Tokyo Stock Exchange, Inc. as of February 26, 2013 (Tuesday).

(2) Specific Use of Funds and ScheduledOutlay Period

<Disclaimer> This document is a press release to make a public announcement of the issuance of new investment units and secondary offering of investment units of Daiwa House Residential Investment Corporation, and has not been prepared as a solicitation for investment. DHI cautions investors to ensure that they refer to the prospectus for notification of the issuance of new investment units and secondary offering of investment units as well as amendments thereto prepared by DHI (if such have been prepared) before undertaking investments and investments be made at their own discretion and responsibility.


This English language notice is a translation of the Japanese language notice issued on the same day and was prepared solely for the convenience of, and reference by, overseas investors. DHI makes no warranties as to its accuracy or completeness.


Concerning procured funds, 6.2 billion yen will be used to fund the acquisition including such amounts as expenses related to acquisition of specified assets announced in the "Notice Concerning the Proposed Acquisition of Trust Beneficiary Rights in Real Estate" dated today, and 3.8 billion yen will be used to fund the repayment of a short-term loan accompanying the acquisition of "Castalia Nakameguro". Please note that, if there are any funds remaining, the funds will be used as cash reserves to fund part of future acquisition of specified assets or fund part of other repayment of loans.
5. Designation of Distributee
Not applicable.
6. Future Prospects
Please refer to the press release "Notice Concerning Revision of Operation Status Forecasts for the
15th Fiscal Period and Operation Status Forecasts for the 16th Fiscal Period" dated today.
7. Performance in the Most Recent Three Fiscal Periods and Equity Finance Status
(1) Performance in the Most Recent Three Fiscal Periods

11th Fiscal Period

(fiscal period ended in August 2011)

12th Fiscal Period

(fiscal period

ended in February 2012)

13th Fiscal Period

(fiscal period ended in August 2012)

Net income per unit

(Note 1) (Note 2)

5,903 yen [11,806 yen]

7,333 yen [14,665 yen]

8,151 yen [16,301 yen]

Distribution per unit (Note 1)

8,160 yen [16,320 yen]

8,000 yen [16,000 yen]

8,132 yen [16,264 yen]

Actual payout ratio (Note 3)

138.2%

109.1%

99.8%

Net assets per unit (Note 1)

311,552 yen [623,103 yen]

286,170 yen [572,339 yen]

286,320 yen [572,640 yen]

(Note 1) Factoring in the impact of the Split, the respective fiscal period's net income per unit, distribution per unit and net assets per unit (figure in brackets) are divided by 2, rounded to the nearest whole number.

(Note 2) Net income per unit (figure in brackets) is calculated by dividing net income by the weighted average number of investment units in the period (11th Fiscal Period: 118,735 units; 12th Fiscal Period: 152,350 units; 13th Fiscal Period: 160,535 units).

(Note 3) Actual payout ratio is rounded to one decimal place.

(2) Status of Recent Investment Unit Price

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