Alco Holdings Limited - Proxy Solicitation & Information Statement 2012

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in KECK SENG INVESTMENTS (HONG KONG) LIMITED , you should at once hand this circular to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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KECK SENG INVESTMENTS (HONG KONG) LIMITED 激成投資（香港）有限公司

(Incorporated in Hong Kong with limited liability) (Stock Code: 00184)

MAJOR TRANSACTION

DISPOSAL OF PROPERTIES

A letter from the Board is set out on page 2 to page 6 of this circular.

26 October 2012

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
LETTER FROM THE BOARD
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The Sale and Purchase Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Information on the Group and KSJ One . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Reasons for and Benefits of the Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Possible Financial Effects of the Disposal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Listing Rules Implication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Further Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
APPENDIX I – FINANCIAL INFORMATION OF THE GROUP. . . . . . . . . . . . . . . . . . 7
APPENDIX II – VALUATION REPORT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
APPENDIX III – GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

DEFINITIONS

In this circular, the following expressions shall have the meanings set out below unless the context requires otherwise:

“Board”	the board of Directors
“Company”	Keck Seng Investments (Hong Kong) Limited, a company incorporated
	in Hong Kong under the Companies Ordinance (Cap. 32), the shares of
	which are listed on the Stock Exchange
“connected person(s)”	has the meaning given to it under the Listing Rules
“Director(s)”	the director(s) of the Company
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Disposal”	the disposal of the interest in the Properties by KSJ One pursuant to the
	Sale and Purchase Agreement
“KSJ One”	Godo Kaisha KSJ One, a_godo-kaisha_(合同会社) incorporated in Japan,
	in which the Company owns a 96.79% indirect economic interest
“Latest Practicable Date”	22 October 2012, being the latest practicable date prior to the printing
	of this circular for the purpose of ascertaining certain information for
	inclusion in this circular
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock Exchange
“Properties”	two apartment buildings in Tokyo, Japan, known as Iris Ginza East and
	Iris Nihonbashi Suitengu respectively, the details on which as described
	in the paragraph “Subject Assets” in this circular
“Purchaser”	Godo Kaisha ABF1, a_godo-kaisha_(合同会社) incorporated in Japan
“Sale and Purchase	the sale and purchase agreement dated 26 September 2012 entered
Agreement”	into among the KSJ One and the Purchaser in relation to the sale and
	purchase of the interest in the Properties
“Shareholder(s)”	holder(s) of shares of the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“%”	per cent
“¥”	Japanese Yen, the lawful currency of Japan
“CA$”	Canadian Dollars, the lawful currency of Canada
“HK$”	Hong Kong Dollars, the lawful currency of Hong Kong
“US$”	United States Dollars, the lawful currency of the United States

In this circular, Japanese Yen (¥) has been translated into HK$ at the rate of ¥100 = HK$9.97 for reference purpose only.

LETTER FROM THE BOARD

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KECK SENG INVESTMENTS (HONG KONG) LIMITED 激成投資（香港）有限公司

(Incorporated in Hong Kong with limited liability) (Stock Code: 00184)

Executive Directors: Mr. HO Kian Guan (Executive Chairman) Mr. HO Kian Hock (Deputy Executive Chairman)

Mr. TSE See Fan Paul Mr. CHAN Lui Ming Ivan

Registered office: Room 2902 West Tower Shun Tak Centre 168-200 Connaught Road Central Hong Kong

Ms. YU Yuet Chu Evelyn

Mr. HO Chung Tao

Mr. HO Chung Hui

Mr. HO Chung Kain ( alternate to Mr. HO Chung Hui)

Non-Executive Directors:

Mr. HO Kian Cheong

Dr. CHAN Yau Hing Robin (Independent)

Mr. KWOK Chi Shun Arthur (Independent)

Ms. WANG Poey Foon Angela (Independent)

26 October 2012

Dear Sir or Madam

MAJOR TRANSACTION

DISPOSAL OF PROPERTIES IN JAPAN

INTRODUCTION

By an announcement dated 26 September 2012, the Board announced that KSJ One entered into the Sale and Purchase Agreement with the Purchaser to dispose of its interests in two freehold multi-family apartment buildings in Tokyo, Japan for a consideration of ¥4,900,000,000 (equivalent to approximately HK$488,530,000). The Company owns a 96.79% indirect economic interest in KSJ One. For IFRS reporting purposes, KSJ One has been categorized as a subsidiary of the Company.

The purpose of this circular is to provide you with further details of the Disposal, including the certain financial and general information on the Group and the Properties, together with a valuation report of the Properties.

LETTER FROM THE BOARD

THE SALE AND PURCHASE AGREEMENT

Date

26 September 2012

Parties

(1) KSJ One; and
(2) the Purchaser.

The Purchaser is principally engaged in acquisition and investment of real estate and real estate trust beneficiary interest.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, the Purchaser and its ultimate beneficial owner are third parties independent of the Company and its connected persons.

Subject assets

Pursuant to the Sale and Purchase Agreement, KSJ One agreed to dispose of, and the Purchaser agreed to acquire, its interest in the Properties. The Properties comprises two apartment buildings, Iris Ginza East and Iris Nihonbashi Suitengu.

Iris Ginza East is a 12-storey freehold multi-family apartment building built in 2005. It is located in Chuo-ku, one of the five central wards of Tokyo and has access to 3 major train lines within 4 to 8 minutes. It is 1 km to central Ginza, one of the most prestigious shopping districts in Japan, and 1.7 km to Tokyo Station.

Iris Nihonbashi Suitengu is a 12-storey freehold multi-family apartment building built in 2005. It is located in Chuo-ku, one of the five central wards of Tokyo and within a two-minute walk to the Suitengumae station, which is on the Tokyo Metro Hanzomon Subway Line. It is a four-minute subway ride from the Suitengumae station to Marunouchi, Tokyo’s premier business center, and an eight-minute ride to Ginza, one of the most prestigious shopping districts in Japan.

According to a valuation conducted by AS Management Inc., an independent valuer engaged by the Company, the value of the Properties as of 30 June 2012 is ¥4,780,000,000 (equivalent to approximately HK$476,566,000). For the purpose of this circular, the Company has engaged AS Management Inc. to conduct a further valuation of the Properties as of 31 July 2012, which represented the same valuation. Both of the valuations were based on the direct capitalisation and discounted cash flow approach. The Properties are accounted for as investment properties in the financial statements of the Company, and are stated at fair value in accordance with the Company’s accounting policies. As such, the book value of the Properties as at 30 June 2012 is ¥4,780,000,000 (equivalent to approximately HK$476,566,000).

LETTER FROM THE BOARD

According to the audited financial statements of KSJ One, the revenue attributable to the Properties was ¥220,080,355 (equivalent to approximately HK$21,942,011) and ¥321,074,007 (equivalent to approximately HK$32,011,078) respectively for the years ended 31 December 2010 and 2011, while the net profit attributable to the Properties after taxation was ¥108,793,722 (equivalent to approximately HK$10,846,734) and ¥132,447,334 (equivalent to approximately HK$13,204,999) respectively for the years ended 31 December 2010 and 2011. The amount of taxes paid amounted to ¥2,593,542 (equivalent to approximately HK$258,576) and ¥21,149,594 (equivalent to approximately HK$2,108,615) respectively for the years ended 31 December 2010 and 2011 and included property tax and other taxes.

Consideration

The consideration for the Disposal was in the amount of ¥4,900,000,000 (equivalent to approximately HK$488,530,000), which was payable to KSJ One by way of bank transfer on 27 September 2012 or any other dates which the parties to the Sale and Purchase Agreement may agree.

The consideration for the Disposal was arrived at after arm’s length negotiations among KSJ One and the Purchaser, with reference to the market price of other similar properties in the vicinity of the Properties.

Completion

The completion of the Disposal took place on 27 September 2012.

A penalty which equals to 20% of the purchase price of the Property shall be paid by the party which fails to complete the transaction. In case the actual damage suffered exceeds 20% of purchase price, the non-defaulting party can claim such excess amount the defaulting party separately. However, should there be a total destruction of the Property by an act of God (e.g. fire, earthquake, etc.), or a partial destruction of the Property which has not been repaired or restored in a manner that is reasonably acceptable to the Purchaser, the Purchaser shall be entitled to choose not to complete the Acquisition without incurring the said penalty.

Save as disclosed in the Sale and Purchase Agreement, KSJ One has provided a warranty against hidden defects (including defects in ownership of the titles or construction defects, if any) of the Properties for 2 years from the completion date of the Disposal.

INFORMATION ON THE GROUP AND KSJ ONE

The principal activities of the Group are hotel and club operations, property investment and development and the provision of management services. The Company’s principal activity is investment holding.

KSJ One is principally engaged in property investment.

LETTER FROM THE BOARD

REASON FOR AND THE BENEFITS OF THE DISPOSAL

The Disposal will allow the Group to rationalise its existing portfolio of investment properties to provide more balance and diversity. The Group expects to maintain its objective of building a portfolio of high-standard investment properties and will continue to seek investments in Japan and elsewhere.

The Directors (including the independent non-executive Directors) consider that the terms of the Sale and Purchase Agreement which were entered into by KSJ One to be fair and reasonable. Taking into account the expected gain to be realised from the Disposal, the Directors (including the independent nonexecutive Directors) consider that the Disposal is in the interests of the Company and the Shareholders as a whole.

POSSIBLE FINANCIAL EFFECTS OF THE DISPOSAL

It is estimated that the Group will realise a gain on disposal of approximately ¥99,000,000 (equivalent to approximately HK$9,870,300), being the difference between the net proceeds from the Disposal and the appraised value of the Properties as at 30 June 2012.

USE OF PROCEEDS

The Group intends to use part of the proceeds to reduce its Japanese yen-denominated bank borrowings. The balance will be kept as general working capital.

LISTING RULES IMPLICATION

As one or more applicable percentage ratios (as defined in the Listing Rules) for the Disposal exceed 25% but are less than 75%, the Disposal constitutes a major transaction for the Company under Chapter 14 of the Listing Rules and is subject to the notification, announcement and shareholders’ approval requirements under the Listing Rules.

The Directors confirm that, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Purchaser and the ultimate controller(s) of the Purchaser are third parties independent of the Company and any connected persons of the Company, and no Shareholder is required to abstain from voting if the Company were to convene a general meeting for the approval of the Disposal. As at the date of this circular, each of Goodland Limited and Kansas Holdings Limited, the two largest Shareholders holding 96,646,960 shares and 100,909,360 shares in the Company respectively, amounting to approximately 28.41% and 29.66% of the issued share capital of the Company, has given its written approval on the Disposal on 26 September 2012. Both Goodland Limited and Kansas Holdings Limited are wholly-owned subsidiaries of Ocean Inc., which in turn is held as to 50% by each of Mr Ho Kian Guan, Executive Chairman of the Company, and his brother Mr Ho Kian Hock, Deputy Executive Chairman of the Company. Owing to the common ownership of Goodland Limited and Kansas Holdings Limited, they form a closely allied group of Shareholders for the purpose of Rule 14.44 of the Listing Rules. As Goodland Limited and Kansas Holdings Limited together hold more than 50% of the issued shares of the Company and no Shareholder is required to abstain from voting, no general meeting for the Shareholders’ approval of the Disposal is required to be held.

LETTER FROM THE BOARD

FURTHER INFORMATION

Your attention is also drawn to the financial information of the Group, the valuation report, and the additional information set out in the appendices to this circular.

By Order of the Board Keck Seng Investments (Hong Kong) Limited HO Kian Guan Executive Chairman

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. INDEBTEDNESS

At the close of business on 31 August 2012, being the latest practicable date for the purpose of preparing the indebtedness statement, the Group had indebtedness as follows:

Borrowings

Note Secured Bank loans Unsecured Bank loans Loans from associates (i) Loans from non-controlling shareholders (ii) Loans and advances from an affiliated company (iii) Total borrowings	HK$’000 841,688 29,338 464 78,263 64,603
	172,668
	1,014,356

(i) Loans from associates are unsecured, interest-free and have no fixed terms of repayment.
(ii) Loans from non-controlling shareholders are unsecured, interest-free, and repayable on demand except for loans with nominal value of HK$51,559,000 (before the effect of discounting in the amount of HK$7,431,000) which are repayable on 30 April 2015.
(iii) Loans and advances from an affiliated company, Goodland Limited, are unsecured, interest-free and repayable on demand except for the (i) loans with nominal value of HK$54,445,000 (before the effect of discounting in the amount of HK$7,847,000) which are repayable on 30 April 2015; and (ii) advances of HK$2,302,000 which are interest-bearing at HIBOR+0.5%.

Commitments

At 31 August 2012, the Group had capital commitments of HK$55,353,000 which included the amount of HK$31,119,000 which was contracted for and the amount of HK$24,234,000 which was authorised but not contracted for.

Banking facilities

At 31 August 2012, the Group had total banking facilities of HK$1,236,924,000, of which HK$1,004,187,000 were secured by bank deposits, investment properties, a hotel property, properties held for sale and equity securities with carrying value in aggregate of HK$1,687,578,000. HK$871,026,000 of the banking facilities were utilised at 31 August 2012.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Contingent liabilities

(a) At 31 August 2012, there were outstanding counter indemnities relating to guarantees issued by a subsidiary’s bankers in favour of the Macau SAR Government in respect of properties held for sale amounted to HK$6,310,000.
(b) At 31 August 2012, guarantees given by a subsidiary and the Company to a bank to secure banking facilities made available to an associate amounted to HK$39,060,000 (CA$5,000,000).
(c) A subsidiary of the Group is involved in litigation arising in its hotel and club operation in Vietnam. The directors are of the opinion that it is too early to evaluate the outcome of the claims and that the amounts cannot be reliably estimated at this point of time.

Disclaimer

Save as aforesaid and apart from intra-group liabilities and normal trade payables, the Group did not have any loan capital issued or agreed to be issued, bank overdrafts, loans, debt securities issued and outstanding, and authorised or otherwise created but unissued and term loans or other borrowings, indebtedness in the nature of borrowings, liabilities under acceptance (other than normal trade bills) or acceptance credits, debentures, mortgages, charges, finance lease or hire purchase commitments, which are either guaranteed, unguaranteed, secured or unsecured, guarantees or other material contingent liabilities outstanding at the close of business on 31 August 2012.

2. WORKING CAPITAL

The Directors are of the opinion that, following completion of the Disposal, after taking into account the financial resources available to the Group, including internally generated funds and the available banking facilities, the Group has sufficient working capital for its present requirements for at least the next twelve months from the date of this circular, in the absence of unforeseeable circumstances.

3. FINANCIAL AND TRADING PROSPECTS

2012 is a year that started with critical sovereign risk issues emanating from Europe, which carried severe consequences for the world economy. The US economy is exhibiting signs of modest recovery, but employment and the housing market has remained weak. China has just announced a projected growth rate that is marginally below that of previous years, signaling the possibility of lower economic activity for China and Asia in general. Against this background, the Group is cautious about its prospects in 2012. The Group will continue to manage with a view towards sustainable growth for the long term, and will continue to prudently seek investments, which contributes to long-term shareholders value.

Despite global financial uncertainty, the major hotels in the Group’s portfolio have performed satisfactorily throughout the year due to the strength of their respective positioning in the markets they operate in. However, it is also expected that some of the hotels will report underperformance against budget, as a result of strong competition and reduced level of commercial activity in their respective markets. Overall, the Group is expected to report satisfactory results for this segment.

Property sales in Macau have remained strong during the year on the back of strong economic growth in the territory. This has also resulted in an increase in capital values in the property market and will have a positive impact on the Group’s properties held for investment.

VALUATION REPORT

APPENDIX II

The following is the text of two letters, setting out a summary of values and valuation certificates, prepared for the purpose of incorporation in this circular and received from AS Management Inc., an independent property appraiser, in connection with the valuation as of July 31, 2012 of the properties held by a subsidiary of Keck Seng Investments (Hong Kong) Limited.

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MG Tamachi Building 1F 4-3-7 Shiba, Minato-ku, Tokyo, Japan

26 October 2012

The Directors

Keck Seng Investments (Hong Kong) Limited

Dear Sirs:

In accordance with the instructions from Keck Seng Investments (Hong Kong) Limited (the “Company”) or its subsidiaries (hereafter together referred to as the “Group”), we have completed a valuation of the 77-room Iris Nihonbashi Suitengu (the “Subject”) located at 33-2, Nihonbashihakozakicho, Chuo-ku, Tokyo, Japan.

The purpose of this valuation is to estimate the market value “as is” of the freehold interest in the above-referenced property as of 31 July 2012 for incorporation in a circular to the shareholders of the Company. Our valuation of the property held by the Group is our opinion of its market value which we would define as “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion.” The market value is the best price reasonably obtainable in the market by the seller and the most advantageous price reasonably obtainable in the market by the buyer. The Subject is valued on a going-concern basis, including all rights in realty.

The scope of our work included an inspection of the Subject, analysis of local economic and market conditions, examination of the historical operating performance of the Subject, estimation of the Subject’s future operating performance, and derivation of value using the Income Capitalization Approaches to valuation. The Cost Approach was not utilized as it is not considered to be a meaningful indicator of value for the Subject.

To the best of our belief, this valuation conforms to requirements set forth in the Rules Governing the Listing of Securities issued by The Stock Exchange of Hong Kong Limited and the Valuation Standards on Properties (First Edition January 2005) published by the Hong Kong Institute of Surveyors. It is not the intent of this brief letter report to provide an extensive discussion of our research and analysis, but instead, to constitute a statement of final value. A complete discussion of our research and analysis is contained in our full narrative report of the Subject prepared for the Company.

VALUATION REPORT

APPENDIX II

Sources of information for the valuation included interviews with local realtors and brokers. Financial statements for the Subject were provided by the Company. Since these statements were not prepared by us, we do not take responsibility for their accuracy, but have assumed that they are correct. That being said, we have no reason to doubt the truth and accuracy of the information provided to us by the Company. We have also sought confirmation from the Company that no material facts have been omitted from the information provided.

No allowance has been made in our valuation for any charges, mortgages, local taxation or amounts owing on the Subject. Unless otherwise stated, it is assumed that the Subject is free from encumbrances, restrictions and outgoings of an onerous nature which could affect its market value.

Unless otherwise stated, all money amounts stated in our report are in Japanese Yen (JPY).

Neither the whole nor any part of this Valuation Certificate or any reference thereto may be included in any published document, circular or statement nor published in any way without the appraiser’s written approval of the form and context in which it may appear.

We declare hereby that we are independent of the Group, and are not beneficially interested in the share capital of any member of the Group and do not have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

Enclosed herein is our summary of value and valuation certificate.

Yours sincerely, AS Management Inc. By: Fumiaki Ishigami Director Japanese Licensed Real Estate Appraiser Registered 9268

Note: Fumiaki Ishigami has extensive experience in the valuation of residential properties in Tokyo for over 14 years.

VALUATION REPORT

APPENDIX II

SUMMARY OF VALUES

Property

Market Value “As Is” 31 July 2012

Property held by the Group as an investment

Iris Nihonbashi Suitengu 33-2, Nihonbashihakozakicho, Chuo-ku Tokyo, Japan

JPY 2,640,000,000

VALUATION CERTIFICATE

Property held by the Group as an investment

Market Value “As Is” Property Description and Tenure Particulars of Occupancy 31 July 2012 Iris Nihonbashi Suitengu The property is a 12-storey, 77The property is currently a JPY2,640,000,000 33-2, room, apartment built in 2005. 77-room apartment. Nihonbashihakozakicho, Chuo-ku Tokyo, Japan The gross building area of the The apartment is held in a apartment is 4,780.44 square freehold interest. meter. Under the applicable The registered site area of laws, no ground rent or the Subject is 740.36 square government rent is payable. meter.

Note:

The property was last inspected on 24 September 2012.
Based on a search at the local land registry, Mitsubishi UFJ Trust Bank is the title holder of the property while KSJ One holds the trust beneficiary interest in the property. As at 31 July 2012, the property is pledged to a bank for a loan.
The tenancy agreements with respect to the property provides for rental reviews as agreed by the lessor and the lessee in case of a significant change of economic condition.
Based on our review of documents provided to us by the Company, there are no options or rights of pre-emption concerning or other material that would adversely affect the market value of the property.
The Iris Nihonbashi Suitengu 33-2 is zoned Chuo-ku (central part in Tokyo). The Chuo-ku district allows for a wide variety of residential and commercial uses including office, retail, residential, entertainment and institutional. Apartments are a residential use. The Iris Nihonbashi Suitengu 33-2 is a legal, conforming use of the Chuo-ku district. The outgoing and disbursements from the rent include service charge, maintenance fee, utility charge, repair charge, etc.
As of end of July 2012, the Subject’s occupancy rate is approximately 93 percent. The annual rent in for 2011 and for the seven months ended 31 July 2012 are approximately JPY157 million and JPY98 million respectively, or JPY13,083,000 and JPY13,994,000 on a monthly basis respectively.
This valuation is subject to following key assumptions:

Key Valuation Assumptions Discount Rate 5.0% Capitalization Rate 5.2% Effective Gross Income JPY174,091,130 Net Cash flow JPY139,186,094

VALUATION REPORT

APPENDIX II

Real Estate Valuation Re ort p

Iris Nihonbashi Suiten u g

Tokyo, Japan

Submitted to:

Keck Seng Investments (Hong Kong) Ltd

Prepared by:

AS Management Inc. 4-3-7-1F Shiba, Minato-ku, Tokyo

VALUATION REPORT

APPENDIX II

Nature on the Assignment

Purpose

This report is prepared to undertake a market valuation of the subject property.

Property Rights Valued The property rights valued are the freehold interest in the property including land and building.

Discloser to Third Party No ✔ Yes ( THE STOCK EXCHANGE OF HONG KONG LIMITED) Public Announcement No ✔ Yes ( THE STOCK EXCHANGE OF HONG KONG LIMITED)

The reason for applying Valuation Report which is not fully based on Japanese appraisal standard.

The valuation report is used only internally.

No plan of public announcement and already acquired approval from disclosure attention(s).

✔ By judging not to have impact on the decision-making of submitted attention(s) or third parties if publicly announced. Other reason:

Instruction of approval from publisher if the valuation report is disclosed to other than original attention.

Prior to publicly announced or disclosed to other than original attention, it is required to get approval from our real estate appraiser in charge via submitting letter of approval request in advance.

Identification of the Subject Property Special Assumptions and None Limiting Conditions

As-is basis

Date of Value 2012/7/31

Land & Building Use Date of Report Identification of the Subject Property	The ownership interest in tenant-occupied building and its site. Site Inspection Yes (2012/9/24) Interior Inspection Yes(Common Area) Land Registered Surveyed Building Registered Surveyed Leased area Contract Rent-roll 2012/10/5 Physical Condition Size ✔ ✔ ✔

Information Utilized

Based on the material provided by the client and collected by AS Management

Statement Referred in General Factor ✔ Area-specific factor ✔ Property-specific factor This Report Methodology of the Cost Approach Sales Comparison ✔ Income Approach Valuation Approach Basis of Valuation The valuation is prepared in accordance with the International Valuation Standards Committee's (IVSC) definition of market value, which is

"The estimated amount for which an asset should exchange on the date of valuation between a willing buyer and a willing seller in an arm's length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion."

Any relationship or special interest between client and appraiser, appraisal company None Between the appraiser in charge, the appraisal company and the subject property None Between the appraiser in charge, the appraisal company and client None Between the appraiser in charge, the appraisal company and the attention of this report None

VALUATION REPORT

APPENDIX II

Attention: Keck Seng Investments (Hong Kong) Ltd

4-3-7-1F Shiba, Minato-ku, Tokyo AS Management Inc.

Licensed Real Estate Appraiser Fumiaki Ishigami

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As a result of investigation and analysis, the market value of the freehold interest of the property identified as the Iris Nihonbahi Suitengu in July 2012 is as follows.

Opinion of Value ¥2,640,000,000

Identification of subject property

1. Land

1. Land
Location	Lot Number	Category Registered	of Land Actual	Land Size	Owner
Nihonbashihakozakicho, Chuo-ku, Tokyo	33-2	Building Site	Building Site	740.36 ㎡	Mitsubishi UFJ Trust Bank

(Postal Adrress: 33-4 Nihonbashihakozakicho)

2. Building

2. Building
Building Number Category Structure, Completion date Location	Story Gross Floor Area Owner
33-2-2 Apartment Flat roof 2005/5/12 Reinforced concrete 33-2	12F 392.88 ㎡ 11F 392.88 ㎡ 10F 392.88 ㎡ 9F 392.88 ㎡ 8F 392.88 ㎡ 7F 392.88 ㎡ 6F 392.88 ㎡ 5F 392.88 ㎡ 4F 392.88 ㎡ 3F 392.88 ㎡ 2F 392.88 ㎡ 1F 458.76 ㎡ Total 4,780.44 ㎡ Mitsubishi UFJ Trust Bank

VALUATION REPORT

APPENDIX II

■ Property Description and Appliance of Valuation Method

The subject property comprises 77 rooms ranging from 1DK type to 3LDK type. The 1st floor is entrance hall and common area, 2nd to 12th floors are residence. Rooms are leased to individual or company. The property is also equipped with an automated car parking system that can accommodate up to 16 cars.

Current zoning use: Commercial Area, FAR 660%. The property is held for investment. To evaluate the subject property, income approach was applied. Direct Capitalization Method and DCF Method were applied as income approach. Market data such as rent and cap rate were analyzed before applying such methods.

■ Market Condition around the Subject Property

The subject property is located near the central business district of Tokyo. Based on Rent Comparables, Market- derived Cap rate and hearing from local broker, supply and demand for apartment and trends in property yield are stable at the submarket. Occupancy rates and rental rates for apartment are also stable in recent 6 months.

■ Other Conditions

Based on property management report and survey of appraiser, building conditions are good and building services are appropriately available.

As of July end, the property had a pledge. The property rights valued are the freehold interest without pledges.

There is a plan to dispose of the subject property on September 26th, 2012.

Apartment Inventory, Iris Nihonbahi Suitengu

Room	Type	Number	Floor	Room Size(sqm)
1DK		22	2F-12F	37.43-41.23
1LDK,	2LDK	44	2F-12F	54.37-62.65
3LDK		11	2F-12F	72.45
Total		77

Typical leasing term at this apartment is a 2-years lease with every 2 years renewal option.

Rent Comparables

Rent Comparables	Rent Comparables
Rent Comp #1 Rent Comp #2 Rent Comp #3 Rent Comp #4
Location 2chome Nihonbashi- Kakigaracho, Chuo- ku 1chome Nihonbashi- Kakigaracho, Chuo- ku Nihonbashi- Hakozakicho, Chuo-ku Nihonbashi- Hakozakicho, Chuo-ku
Property Type 1LDK 1LDK 1LDK 1LDK
Station/Distance Suitengumae 160m Suitengumae 240m Suitengumae 320m Suitengumae 560m
Level / Story 4F/10F 4F/12F 13F/13F 6F/11F
Completion Year 2003 2003 2003 1998
Date of Contract 2012/4/12 2012/5/31 2012/1/18 2012/7/26
Leased Area	㎡ 40.67 52.63 55.74 40.16
	Tusbo 12.30 15.92 16.86 12.15
@13,249 @11,934 @10,883 @11,442 Rent+CAM (per Tsubo)
Rent	Amount 158,000 180,000 173,500 129,000
	per Tusbo @12,843 @11,306 @10,290 @10,619
CAM	Amount 5,000 10,000 10,000 10,000
	per Tsubo @406 @628 @593 @823
SecurityDeposit(Months) 2.0 1.0 1.0 1.0
KeyMoney	1.0 1.0 1.0 1.0
Ranking Grade	Location Slightlysuperior Similar Similar Inferior
	Building Similar Similar Similar Inferior

VALUATION REPORT

APPENDIX II

■ Analysis of Discount Rate, Cap Rate and Terminal Cap Rate

Discount Rate

Determination by a Built-up Rate

	Rate	Description
Base Rate	4.0%
Property Type	0.8%	Residence
Area	0.2%	Nihonbashihakozakicho, Chuo-ku
Location	0.0%	Suitengumae (2 minutes walk from Suitengumae station)
Building Age	0.0%	7 years old
Building Grade	0.0%
Ownership	0.0%
Other	0.0%
Built-upRate	5.0%

Cap Rate

Market- derived Cap rate

Market- derived Cap rate	Market- derived Cap rate
Sales Comp#1 Sales Comp#2 Sales Comp#3 Sales Comp#4
Name of Building KDX Nihonbashi OdenmaResiden ce Top Residence Nihonbashi Kayabacho Park Axis Nihonbashi Stage NCR Nihonbashi Suitengu
Location Nihonbashi- Odenmacho, Chuo-ku 3chome Nihonbashi- Kayabacho, Chuo- ku 1chome Nihonbashi- Kakigaracho, Chuo-ku Nihonbashi- Koamicho, Chuo- ku
Property Type Residence Residence Residence Residence
Story B1F - 10F 1F - 14F 1F - 14F 1F - 12F
Year Built 2007 2004 2004 2005
Gross Building Area 3,009㎡ 4,541㎡ 12,488㎡ 5,762㎡
Rentable Area 2,353㎡ 3,456㎡ 10,025㎡ 4,603㎡
Transaction Date 2012/5/1 2012/2/1 2006/8/7 2006/4/27
Purchase Price ¥1,775,000,000 ¥2,400,000,000 ¥7,557,000,000 ¥3,332,000,000
Appraised NCF Cap Rate 5.10% 5.10% 4.90% 5.30%
Appraised NCF Discount Rate 4.90% 4.90% 4.80% 5.20%
Latest Appraisal Date 2012/7/31 2012/4/30 2012/2/29 2012/2/29
Latest Appraisal Value ¥1,850,000,000 ¥2,550,000,000 ¥6,640,000,000 ¥2,570,000,000
Latest Appraisal NCF Cap Rate 5.00% 5.10% 5.00% 5.20%
Ranking Grade	Location Slightly superior Slightly superior Superior Slightly inferior
	Building Similar Similar Superior Similar

■ Determination of Discount Rate, Cap Rate and Terminal Cap Rate

Discount Rate	5.00%
Cap Rate	5.20%
Terminal Cap Rate	5.40%

VALUATION REPORT

APPENDIX II

■ Operating Performance

Leasing Status, Iris Nihonbahi Suitengu

gu
Room	Type	Number	Average rent per tsubo*	Occupancy
1DK		22	@12,469	81.4%
1LDK,	2LDK	44	@11,432	95.3%
3LDK		11	@11,718	100.0%
Total		77	@11,674	93.3%

*As of July 2012, including CAM

Based on the monthly operation report provided from client, trailing 12 months operating performance is descried below.

is descried below.
Income	Past 1year	JPY/㎡*/month	JPY/tsubo*/month	Description
Rent+CAM	163,798,511	3,223	10,654
Rent	156,000,995	3,069	10,147
CAM	7,797,516	153	507
Utility	0	-	-
Parking Lot	5,597,225	-	-
Motor cycle parking	4,100	-	-
Other	228,709	-	-
Key Money	322,000	-	-
Contract Renewal Fee	3,830,000	-	-
Restoration Fee	2,540,287	-	-
Total Income	176,320,832	-	-

Area is net rentable area including vacant space

Expenses	Past 1year	JPY/㎡*/month	JPY/tsubo*/month
Maintenance	-4,019,640	-79	-261
Utility	-2,232,630	-44	-145
Repairs (Minor)	-2,035,090	-40	-132
Restoration Costs	-4,597,898	-90	-299
Property Management Fee	-5,035,039	-99	-327
Leasing Management Fee	-2,214,000	-44	-144
Tenant Recruitment	-6,500,500	-128	-423
Contract Renewal Commission	-2,521,000	-50	-164
Property Tax Land	-967,244	-19	-63
Property Tax Building	-6,989,911	-138	-455
Property Tax Depreciable Asset	-146,328	-3	-10
Insurance	-379,100	-7	-25
Other (CATV)	-554,400	-11	-36
Other	-450,020	-9	-29
Capital Expenditure	-300,000	-6	-20
Total Operating Expenses	-38,942,800	-766	-2,533
			* Area is net rentable area including vacant space
Net Income	137,378,032

VALUATION REPORT

APPENDIX II

■ Direct Capitalization Method

Rent assumption

Revenue is based on stabilized Mark-to-Market rent which is considered with Rent Comparables and actual rent.

Floor	Type	Rentable Area (Tsubo)	Monthly Rent (JPY / Tsubo)	Monthly Rent JPY	CAM (JPY / Tsubo)	Monthly CAM JPY	Security Deposit (Months)	Rent+CAM (JPY/Tsubo)
2F-12F	1DK	261.74	10,629	2,782,000	841	220,000	2	11,469
2F-12F	1LDK, 2LDK	778.37	10,623	8,269,000	848	660,000	2	11,471
2F-12F	3LDK	241.08	10,578	2,550,000	684	165,000	2	11,262
Total		1,281.19	10,616	13,601,000	816	1,045,000		11,432

Calculation of Effective Gross Income

Item	Amount				Assumptions	Assumptions
Rent	163,212,000	Yen	Monthly Rent		13,601,000	Yen	× 12 Month
CAM	12,540,000	Yen	Monthly CAM		1,045,000	Yen	× 12 Month
Utility	0	Yen	None
Parking Lot			# of Space			Yen/Space
	6,720,000	Yen	16	×		35,000	× 12 Month
Other	108,000	Yen	Motorcycle parking (assumed 3 units occupied @JPY3,000 per month)
Key Money	0	Yen	None
Contract Renewal Fee			Rate		Yearly Renewal Rate
1DK	695,500	Yen	1 month		rent	25%
1LDK, 2LDK	2,067,250	Yen	1 month		rent	25%
3LDK	637,500	Yen	1 month		rent	25%
Potential Gross Income	185,980,250	Yen
Vacancy Loss
1DK	2,161,440	Yen	36,024,000	×	6.0%
1LDK, 2LDK	6,428,880	Yen	107,148,000	×	6.0%
3LDK	1,954,800	Yen	32,580,000	×	6.0%
Parking Lot	1,344,000	Yen	6,720,000	×	20.0%
Utility	0	Yen	0	×	0.0%
Total	11,889,120	Yen

Collection Loss	0	Yen	Assumed none considered with the deposited money
Effective Gross Income	174,091,130	Yen

VALUATION REPORT

APPENDIX II

Calculation of Operating Expenses

Item		Amount		Assumptions
				260Yen/Tsubo × NRA × 12months
Maintenance		3,997,304	Yen	Based on track record (PM Report) provided by client and
				standard amount of similar size building.
				145Yen/Tsubo × NRA × 12months
Utility		2,229,266	Yen	Based on track record (PM Report) provided by client and
				standard amount of similar size building.
				215Yen/Tsubo × NRA × 12months
Repairs		3,305,463	Yen	Based on track record (PM Report) provided by client and
				standard amount of similar size building.
Property Management Fee		5,222,734	Yen	EGI (Excluding Key money & Renewal fee) × 3%
Tenant Recruitment		3,400,250	Yen	One month of new market rent for newly contracted area.
				Turnover ratio 1DK-2LDK 25% 3LDK 25%
Contract Renewal Commission		1,700,125	Yen	50% of Contract Renewal Fee
Property Tax	Land	967,244	Yen	Actual amount of year 2012 based on the information provided by client.
	Building	6,989,911	Yen	Actual amount of year 2012 based on the information provided by client.
Depreciable Asset		146,328	Yen	Actual amount of year 2012 based on the information provided by client.
Insurance		379,100	Yen	Based on actual amount of year 2012.
Other		2,310,000	Yen	Advertisement cost (120,000yen per room×turnover ratio× 77rooms)
OperatingExpenses		30,647,726	Yen
Calculation of Net Operating		Income
Effective Gross Income		174,091,130	Yen
Operating Expenses		30,647,726	Yen
Net Operating Income		143,443,404	Yen

Non-Operating Revenue and Expenses

Non-Operating Revenue and	Expenses
Operating profit on Deposit	550,690 Yen	Security deposit after	vacancy adjustment	Yield
		27,534,480	Yen	2.0%
Capital Expenditure	4,808,000 Yen	Based on Engineering Report provided by		client.
Net Cash Flow	139,186,094 Yen

■ Value indicated by the Direct Capitalization Method

Value was derived by dividing subject's Net Cash Flow with Cap Rate

Net Cash Flow			Cap Rate	Value
139,186,094	÷		5.20%	2,680,000,000

APPENDIX II

VALUATION REPORT

（Yen)	Year 10 Year 11	33,384,000 33,384,000	2,640,000 2,640,000	99,228,000 7,920,000 99,228,000 7,920,000	30,600,000 30,600,000	1,980,000 1,980,000	0 0	6,720,000 6,720,000	108,000 108,000	0 0	3,400,250 3,400,250	185,980,250 185,980,250	-2,161,440 -2,161,440	-6,428,880 -6,428,880	-1,954,800 -1,954,800	-1,344,000 -1,344,000	0 0	-11,889,120 -11,889,120	0 0	174,091,130 174,091,130	3,997,304 3,997,304	2,229,266 2,229,266	3,305,463 3,305,463	5,222,734 5,222,734	3,400,250 3,400,250	1,700,125 1,700,125	967,244 967,244	6,379,503 6,379,503	146,328 146,328	379,100 379,100	2,310,000 2,310,000	30,037,318 30,037,318	144,053,812 144,053,812	21,694,978 21,694,978	433,900 433,900	4,808,000 4,808,000	139,679,712 139,679,712	0.6139	85,749,375	17.25% 17.25%	(40.88％) 1,079,123,082	2,586,661,340	51,733,227 2,534,928,113	51,733,227 2,534,928,113	51,733,227 2,534,928,113	(59.12％) 1,556,192,369	(100.00％) 2,640,000,000
	Year 7 Year 8 Year 9	33,384,000 33,384,000 33,384,000	2,640,000 2,640,000 2,640,000	99,228,000 99,228,000 99,228,000 7,920,000 7,920,000 7,920,000	30,600,000 30,600,000 30,600,000	1,980,000 1,980,000 1,980,000	0 0 0	6,720,000 6,720,000 6,720,000	108,000 108,000 108,000	0 0 0	3,400,250 3,400,250 3,400,250	185,980,250 185,980,250 185,980,250	-2,161,440 -2,161,440 -2,161,440	-6,428,880 -6,428,880 -6,428,880	-1,954,800 -1,954,800 -1,954,800	-1,344,000 -1,344,000 -1,344,000	0 0 0	-11,889,120 -11,889,120 -11,889,120	0 0 0	174,091,130 174,091,130 174,091,130	3,997,304 3,997,304 3,997,304	2,229,266 2,229,266 2,229,266	3,305,463 3,305,463 3,305,463	5,222,734 5,222,734 5,222,734	3,400,250 3,400,250 3,400,250	1,700,125 1,700,125 1,700,125	967,244 967,244 967,244	6,576,807 6,576,807 6,576,807	146,328 146,328 146,328	379,100 379,100 379,100	2,310,000 2,310,000 2,310,000	30,234,622 30,234,622 30,234,622	143,856,508 143,856,508 143,856,508	21,694,978 21,694,978 21,694,978	433,900 433,900 433,900	4,808,000 4,808,000 4,808,000	139,482,408 139,482,408 139,482,408	0.7107 0.6768 0.6446	99,130,147 94,401,694 89,910,360	17.37% 17.37% 17.37%	①Total Present Value of annual NCF	②Resale Value (NCF in year11 ÷ TCR)	③Sales Cost (②×2%） ④Reversionary Value (②－③)			⑤Current Reversionary Value (④×Present Value Rate)	⑥ Value indicated by DCF (① ＋ ⑤ )
	Year 6	33,384,000	2,640,000	99,228,000 7,920,000	30,600,000	1,980,000	0	6,720,000	108,000	0	3,400,250	185,980,250	-2,161,440	-6,428,880	-1,954,800	-1,344,000	0	-11,889,120	0	174,091,130	3,997,304	2,229,266	3,305,463	5,222,734	3,400,250	1,700,125	967,244	6,780,214	146,328	379,100	2,310,000	30,438,028	143,653,102	21,694,978	433,900	4,808,000	139,279,002	0.7462	103,929,991	17.48%		Value indicated		by DCF	Method
	Year 5	33,384,000	2,640,000	99,228,000 7,920,000	30,600,000	1,980,000	0	6,720,000	108,000	0	3,400,250	185,980,250	-2,161,440	-6,428,880	-1,954,800	-1,344,000	0	-11,889,120	0	174,091,130	3,997,304	2,229,266	3,305,463	5,222,734	3,400,250	1,700,125	967,244	6,780,214	146,328	379,100	2,310,000	30,438,028	143,653,102	21,694,978	433,900	4,808,000	139,279,002	0.7835	109,125,098	17.48%
	Year 1 Year 2 Year 3 Year 4	Rent 35,572,944 34,825,912 34,094,568 33,384,000 CAM 2,366,640 2,456,572 2,549,922 2,640,000 1DK		Rent 100,618,380 100,115,288 99,614,712 99,228,000 CAM 6,134,520 6,686,627 7,288,423 7,920,000 1LDK, 2LDK	Rent 31,914,000 31,435,290 30,963,761 30,600,000 CAM 1,608,000 1,723,776 1,847,888 1,980,000 3LDK		0 0 0 0	7,020,000 6,914,700 6,810,980 6,720,000	108,000 108,000 108,000 108,000	0 0 0 0	3,502,194 3,466,177 3,430,688 3,400,250	188,844,678 187,732,342 186,708,941 185,980,250	-4,666,569 -2,236,949 -2,198,669 -2,161,440 1DK	-5,711,280 -6,408,115 -6,414,188 -6,428,880 1LDK, 2LDK	-1,005,660 -1,989,544 -1,968,699 -1,954,800 3LDK	-1,579,500 -1,382,940 -1,362,196 -1,344,000 Parking Lot	0 0 0 0 Utility	-12,963,009 -12,017,548 -11,943,752 -11,889,120 Total	0 0 0 0	175,881,669 175,714,794 174,765,189 174,091,130	3,997,304 3,997,304 3,997,304 3,997,304	2,229,266 2,229,266 2,229,266 2,229,266	3,305,463 3,305,463 3,305,463 3,305,463	5,276,450 5,271,444 5,242,956 5,222,734 EGI (excluding Key money & Renewal fee)×3.0%	3,400,250 3,400,250 3,400,250 3,400,250	1,751,097 1,733,088 1,715,344 1,700,125	967,244 967,244 967,244 967,244 Land	6,989,911 6,989,911 6,989,911 6,780,214 Building	146,328 146,328 146,328 146,328 Depreciable Asset	379,100 379,100 379,100 379,100	2,310,000 2,310,000 2,310,000 2,310,000	30,752,414 30,729,399 30,683,167 30,438,028	145,129,255 144,985,395 144,082,022 143,653,102	22,315,391 22,094,915 21,877,520 21,694,978 Balance of Deposit	446,308 441,898 437,550 433,900 Operating Profit	4,808,000 4,808,000 4,808,000 4,808,000	140,767,563 140,619,293 139,711,572 139,279,002	0.9524 0.9070 0.8638 0.8227	134,067,027 127,541,699 120,682,856 114,584,835	17.48% 17.49% 17.56% 17.48%	％ Comment	5.0% Assumes Real estate investment base rate and Subject's intrinsic characteristics.		5.4% Assumes uncertainty 10 years（Market Volatility Risk, Liquidity Risk etc).		2.0% Assumes a Sales cost of 2%	2.0% Based on Long Term Government Bonds
■ DCF Method	Item			① Rent and CAM		・ Key Money ・ Renewal Fee Effective Gross Income ④ Other ② Utility ③ Parking Lot ⑤ Potential Gross Income (① -④ Total) ⑥ Vacancy Loss													⑦ Collection loss	(1) Effective Gross Income	① Building Maintenance Fee	② Utility	⑥ Renewal Commission ③ Repair (Minor) Operating Expense ⑧ Insurance ④ PM Fee ⑤ Tenant Recruitment ⑦ Property Tax								⑨ Other	(2) Operating Expense	(3) Net Operating Income (NOI) (1)-(2)	(4) Operating Profit on Deposit		(5) Capital Expenditure (CAPEX)	(6) Net Cash Flow（ NCF) (3)+(4)-(5)	(7) Compound Interest Present Value Rate	(8) Present Value of NCF (6)×(7)	ＯＥＲ (2)÷(1)	Name	DR：Discount Rate Applied		Termin TCR：Terminal Cap Rate	S：Sales Cost ology		Investment Yield of Deposit

APPENDIX II

VALUATION REPORT

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（ Yen) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 25.0% 25.0% 25.0% 6.0% 6.0% 6.0% 20.0% 0.0% 0.0%
Year 11 @11,469 @11,471 @11,262
Year 10 0.0% 0.0% @11,469 0.0% 0.0% 0.0% @11,471 0.0% 0.0% 0.0% @11,262 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 25.0% 25.0% 25.0% 6.0% 6.0% 6.0% 20.0% 0.0% 0.0%
Year 9 0.0% 0.0% @11,469 0.0% 0.0% 0.0% @11,471 0.0% 0.0% 0.0% @11,262 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 25.0% 25.0% 25.0% 6.0% 6.0% 6.0% 20.0% 0.0% 0.0%
Year 8 0.0% 0.0% @11,469 0.0% 0.0% 0.0% @11,471 0.0% 0.0% 0.0% @11,262 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 25.0% 25.0% 25.0% 6.0% 6.0% 6.0% 20.0% 0.0% 0.0%
Year 7 0.0% 0.0% @11,469 0.0% 0.0% 0.0% @11,471 0.0% 0.0% 0.0% @11,262 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 25.0% 25.0% 25.0% 6.0% 6.0% 6.0% 20.0% 0.0% 0.0%
Year 6 0.0% 0.0% @11,469 0.0% 0.0% 0.0% @11,471 0.0% 0.0% 0.0% @11,262 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 25.0% 25.0% 25.0% 6.0% 6.0% 6.0% 20.0% 0.0% 0.0%
Year 5 0.0% 0.0% @11,469 0.0% 0.0% 0.0% @11,471 0.0% 0.0% 0.0% @11,262 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 25.0% 25.0% 25.0% 6.0% 6.0% 6.0% 20.0% 0.0% 0.0%
Year 4 -2.1% 3.5% @11,469 -1.7% -0.4% 8.7% @11,471 0.2% -1.2% 7.1% @11,262 -0.7% 0.0% 0.0% 0.0% 0.0% 0.0% 25.0% 25.0% 25.0% 6.0% 6.0% 6.0% 20.0% 0.0% 0.0%
Year 3 -2.1% 3.8% @11,667 -1.7% -0.5% 9.0% @11,445 0.1% -1.5% 7.2% @11,342 -1.1% 0.0% -1.3% 0.0% 0.0% 0.0% 25.0% 25.0% 25.0% 6.0% 6.0% 6.0% 20.0% 0.0% 0.0%
Year 2 -2.1% 3.8% @11,870 -1.8% -0.5% 9.0% @11,434 0.0% -1.5% 7.2% @11,462 -1.1% 0.0% -1.5% 0.0% 0.0% 0.0% 25.0% 25.0% 25.0% 6.0% 6.0% 6.0% 20.0% 0.0% 0.0%
Year 1 -2.1% 3.8% @12,079 -1.8% -0.5% 9.0% @11,429 0.0% -1.5% 7.2% @11,588 -1.1% 0.0% -1.5% 0.0% 0.0% 0.0% 25.0% 25.0% 25.0% 12.30% 5.35% 3.0% 22.5% 0.0% 0.0%
Beginning (Monthly) 3,028,000 190,000 @12,295 Volatility 8,427,000 469,000 @11,429 Volatility 2,700,000 125,000 @11,718 Volatility 0 585,000 9,000 0
Rent CAM Rent CAM Rent CAM
Rent+CAM (per Tsubo) Rent+CAM (per Tsubo) Rent+CAM (per Tsubo)
Assumptions 6months+6.0%×6months)
×
Year 1: Adopted actual rent (Assumed rent was used for vacant space) Year 2 onwards: The volatility rate was calculated based on the assumption that rent is stabilized to market rent considering average turnover rate of tenants, actual lease period and tenant type. Year 1: Adopted actual rent (Assumed rent was used for vacant space) Year 2 onwards: The volatility rate was calculated based on the assumption that rent is stabilized to market rent considering average turnover rate of tenants, actual lease period and tenant type. Year 1: Adopted actual rent (Assumed rent was used for vacant space) Year 2 onwards: The volatility rate was calculated based on the assumption that rent is stabilized to market rent considering average turnover rate of tenants, actual lease period and tenant type. None Assumed that rent will decrease to market level by year 3 Motorcycle parking (assumed 3 units occupied, 3,000yen per unit) None 1 month of renewed rent as a contract renewal fee. Year 1 onwards: Assumed one time every 4 year, which equals to 25%. Year 1 onwards: Assumed one time every 4 year, which equals to 25%. Year 1 onwards: Assumed one time every 4 year, which equals to 25%. Year 1: Adopted current vacancy rate (18.6%) for 6 month and adopted market vacancy rate for remaining 6 months. (12.30%=18.6% Year 2 onwards: The volatility rate was calculated based on the assumption that the vacancy rate will be stabilized to market rate considering current vacancy rate, average turnover rate of tenants. Year 1: Adopted current vacancy rate (4.7%) for 6 month and adopted market vacancy rate for remaining 6 months. (5.35%=4.7%×6months+6.0%×6months) Year 2 onwards: Assumed the vacancy rate to be stabilized to market rate considering current vacancy rate, average turnover rate of tenants. Year 1: Adopted current vacancy rate (0%) for 6 month and adopted market vacancy rate for remaining 6 months. (3.0%=0%×6months+6.0%× 6months) Year 2 onwards: Assumed the vacancy rate to be stabilized to market rate considering current vacancy rate, average turnover rate of tenants. Year 1: Adopted current vacancy rate (25.0%) for 6 month and adopted market vacancy rate for remaining 6 months. Year 2 onwards: Assumed the vacancy rate to be stabilized to market rate . None Assumed none considered with the deposited money
1DK 3LDK 1DK 3LDK Utility
1DK 3LDK
1LDK, 2LDK 1LDK, 2LDK 1LDK, 2LDK Parking Lot
Item
Key Money Renewal Fee
Rent and CAM Utility Parking Lot Other ・・ Vacancy Loss Collection loss
① ② ③ ④ Turnover rate ⑥ ⑦
Assumption of DCF Method (Effective Gross Income)
----- End of picture text -----

APPENDIX II

VALUATION REPORT

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----- Start of picture text -----

Yen) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
（
Year 11
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -3.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Year 10
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Year 9
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Year 8
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -3.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Year 7
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Year 6
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Year 5
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -3.0% 0.0% 0.0% 0.0% -2.1% -0.4% -1.2%
Year 4
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -2.1% -0.5% -1.5%
Year 3
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -2.1% -0.5% -1.5%
Year 2
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -3.0% 0.0% 0.0% 0.0% -2.1% -0.5% -1.5%
Year 1
Year amount / Volatility 3,997,304 2,229,266 3,305,463 967,244 6,989,911 146,328 379,100 2,310,000 3,664,000 13,646,000 5,229,000 4,808,000
3%
×
Assumptions
Year 1: Assumed same amount as Direct capitalization. Year 2 onwards: Assumed volatility rate to be flat. Year 1: Assumed same amount as Direct capitalization. Year 2 onwards: Assumed volatility rate to be flat. Year 1: Assumed same amount as Direct capitalization. Year 2 onwards: Assumed volatility rate to be flat. EGI (Excluding Key money & Renewal fee) One month of new market rent for newly contracted area. Assumed 50% of Renewal Fee to be paid to Property Manager. Year 1: Assumed same amount as Direct capitalization. Year 2 onwards: Assumed volatility rate to be flat. Year 1: Assumed same amount as Direct capitalization. Year 2 onwards: Assumed tax abatement of -3% in Yr 1, 4, 7 and 10. Year 1: Assumed same amount as Direct capitalization. Year 2 onwards: Assumed volatility rate to be flat. Year 1: Assumed same amount as Direct capitalization. Year 2 onwards: Assumed volatility rate to be flat. Assumed same amount as Direct capitalization. Advertisement cost (120,000yen per room × turnover ratio × 77rooms) Year 1: Beginning is based on actual deposit amount. Year 2 onwards: Assumed a volatility rate in line with rental levels. Based on Engineering Report provided from client.
1DK 3LDK Land Building Asset 1DK 3LDK
1LDK, 2LDK Depreciable 1LDK, 2LDK
Item
Building Maintenance Fee Utility Repair PM Fee Tenant Recruitment Renewal Commission Property Tax Insurance Other
① ② ③ ④ ⑤ ⑥ ⑦ ⑧ ⑨ Balance of Deposit Capital Expenditure (CAPEX)
Assumption of DCF Method (Expenses)
----- End of picture text -----

VALUATION REPORT

APPENDIX II

■ Correlation and Final Estimate of Value

The final step in the valuation process is the correlation of the indications of value derived by Direct Capitalization Method and DCF Method.

We have obtained following value indications.

Direct Capitalization Method	2,680,000,000 Yen
DCF Method	2,640,000,000 Yen

The purpose of the valuation, the type of property, and the adequacy of the data were taken into account throughout valuation process. Most important is which method most clearly reflects the actions of buyers and sellers in the market place.

The value indicated by the DCF Method correctly reflects the value of the subject property through consideration of its net income during holding period, discount rate and terminal cap rate. Although many assumptions are used throughout this approach, it is deemed to simulate cash flow forecast considering market rental levels and its actual rental levels.

Direct Capitalization Method indicates market value with stabilized cash flow estimation.

The value indicated by the income approach was based on the DCF Methods to consider the changeable cash flows, which is well supported by the direct capitalization method.

Value indicated by the income approach 2,640,000,000 Yen

■ Reconciliation of the Indicated Value and Determination of the Value

Determined final opinion of value by adopting above indicated value.

Final opinion of value 2,640,000,000 Yen

Appendix Rent-roll Wide Area Map Detailed Map Floor Plans

VALUATION REPORT

APPENDIX II

Actual Valuation Floor # Tenant Use Type Leased area Sqm Leased area Tsubo Rent CAM Rent +CAM per Tsubo Deposit Leased date Rent CAM Rent +CAM per Tsubo Vacancy Deposit 2 201 Individual Residence 1LDK 54.37 16.45 156,000 12,000 168,000 10,215 156,000 2011/12/17 164,000 15,000 179,000 10,883 6.00% 358,000 2 202 Individual Residence 1DK 41.23 12.47 137,000 10,000 147,000 11,786 137,000 2011/4/23 124,000 10,000 134,000 10,744 6.00% 268,000 2 203 Individual Residence 1DK 37.43 11.32 132,000 10,000 142,000 12,541 132,000 2010/11/28 113,000 10,000 123,000 10,863 6.00% 246,000 2 204 Individual Residence 2LDK 58.00 17.55 175,000 15,000 190,000 10,829 175,000 2010/9/30 175,000 15,000 190,000 10,829 6.00% 380,000 2 205 Company Residence 2LDK 62.65 18.95 188,000 15,000 203,000 10,711 188,000 2010/2/28 189,000 15,000 204,000 10,764 6.00% 408,000 2 206 Company Residence 2LDK 58.90 17.82 191,000 7,000 198,000 11,113 382,000 2012/2/25 178,000 15,000 193,000 10,832 6.00% 386,000 2 207 Individual Residence 3LDK 72.45 21.92 248,000 - 248,000 11,316 496,000 2005/8/20 219,000 15,000 234,000 10,677 6.00% 468,000 3 301 Individual Residence 1LDK 54.37 16.45 158,000 12,000 170,000 10,336 158,000 2009/8/8 169,000 15,000 184,000 11,188 6.00% 368,000 3 302 Individual Residence 1DK 41.23 12.47 138,000 10,000 148,000 11,867 138,000 2011/4/2 128,000 10,000 138,000 11,065 6.00% 276,000 3 303 Individual Residence 1DK 37.43 11.32 129,000 10,000 139,000 12,276 129,000 2009/9/18 117,000 10,000 127,000 11,217 6.00% 254,000 3 304 Company Residence 2LDK 58.00 17.55 175,000 15,000 190,000 10,829 350,000 2012/2/18 181,000 15,000 196,000 11,171 6.00% 392,000 3 305 Individual Residence 2LDK 62.65 18.95 190,000 15,000 205,000 10,817 190,000 2010/12/15 195,000 15,000 210,000 11,081 6.00% 420,000 3 306 Company Residence 2LDK 58.90 17.82 222,000 - 222,000 12,460 444,000 2008/9/20 183,000 15,000 198,000 11,113 6.00% 396,000 3 307 Individual Residence 3LDK 72.45 21.92 231,000 18,000 249,000 11,361 231,000 2010/12/26 224,000 15,000 239,000 10,905 6.00% 478,000 4 401 Individual Residence 1LDK 54.37 16.45 160,000 12,000 172,000 10,458 160,000 2012/2/26 171,000 15,000 186,000 11,309 6.00% 372,000 4 402 vacant Residence 1DK 41.23 12.47 - - - - - 130,000 10,000 140,000 11,225 6.00% 280,000 4 403 Company Residence 1DK 37.43 11.32 140,000 - 140,000 12,365 280,000 2011/5/13 118,000 10,000 128,000 11,305 6.00% 256,000 4 404 Individual Residence 2LDK 58.00 17.55 194,000 - 194,000 11,057 418,000 2008/7/13 182,000 15,000 197,000 11,228 6.00% 394,000 4 405 Individual Residence 2LDK 62.65 18.95 227,000 - 227,000 11,978 454,000 2008/2/20 197,000 15,000 212,000 11,186 6.00% 424,000 4 406 Individual Residence 2LDK 58.90 17.82 221,000 - 221,000 12,404 442,000 2006/11/26 185,000 15,000 200,000 11,225 6.00% 400,000 4 407 Company Residence 3LDK 72.45 21.92 228,000 18,000 246,000 11,225 456,000 2010/12/16 227,000 15,000 242,000 11,042 6.00% 484,000 5 501 Individual Residence 1LDK 54.37 16.45 162,000 12,000 174,000 10,579 162,000 2011/5/30 173,000 15,000 188,000 11,431 6.00% 376,000 5 502 Company Residence 1DK 41.23 12.47 145,000 - 145,000 11,626 290,000 2010/9/15 131,000 10,000 141,000 11,305 6.00% 282,000 5 503 vacant Residence 1DK 37.43 11.32 - - - - - 119,000 10,000 129,000 11,393 6.00% 258,000 5 504 Individual Residence 2LDK 58.00 17.55 181,000 15,000 196,000 11,171 181,000 2011/6/2 184,000 15,000 199,000 11,342 6.00% 398,000 5 505 Individual Residence 2LDK 62.65 18.95 194,000 15,000 209,000 11,028 194,000 2010/9/10 199,000 15,000 214,000 11,292 6.00% 428,000 5 506 Individual Residence 2LDK 58.90 17.82 188,000 15,000 203,000 11,393 564,000 2009/9/11 187,000 15,000 202,000 11,337 6.00% 404,000 5 507 Company Residence 3LDK 72.45 21.92 235,000 18,000 253,000 11,544 470,000 2011/3/20 229,000 15,000 244,000 11,133 6.00% 488,000 6 601 Individual Residence 1LDK 54.37 16.45 164,000 12,000 176,000 10,701 164,000 2012/6/22 173,000 15,000 188,000 11,431 6.00% 376,000 6 602 Individual Residence 1DK 41.23 12.47 141,000 10,000 151,000 12,107 141,000 2011/3/15 131,000 10,000 141,000 11,305 6.00% 282,000 6 603 Company Residence 1DK 37.43 11.32 136,000 10,000 146,000 12,895 272,000 2012/1/14 119,000 10,000 129,000 11,393 6.00% 258,000 6 604 Company Residence 2LDK 58.00 17.55 181,000 15,000 196,000 11,171 181,000 2010/1/30 184,000 15,000 199,000 11,342 6.00% 398,000 6 605 vacant Residence 2LDK 62.65 18.95 - - - - - 199,000 15,000 214,000 11,292 6.00% 428,000 6 606 Company Residence 2LDK 58.90 17.82 191,000 15,000 206,000 11,562 573,000 2012/1/21 187,000 15,000 202,000 11,337 6.00% 404,000 6 607 Company Residence 3LDK 72.45 21.92 237,000 18,000 255,000 11,635 474,000 2012/3/15 229,000 15,000 244,000 11,133 6.00% 488,000 7 701 Individual Residence 1LDK 54.37 16.45 166,000 12,000 178,000 10,823 166,000 2011/5/14 174,000 15,000 189,000 11,492 6.00% 378,000 7 702 Individual Residence 1DK 41.23 12.47 142,000 10,000 152,000 12,187 284,000 2012/6/2 132,000 10,000 142,000 11,385 6.00% 284,000 7 703 Individual Residence 1DK 37.43 11.32 137,000 10,000 147,000 12,983 137,000 2011/12/16 120,000 10,000 130,000 11,481 6.00% 260,000 7 704 vacant Residence 2LDK 58.00 17.55 - - - - - 186,000 15,000 201,000 11,456 6.00% 402,000 7 705 Company Residence 2LDK 62.65 18.95 198,000 15,000 213,000 11,239 198,000 2011/3/22 201,000 15,000 216,000 11,397 6.00% 432,000 7 706 Company Residence 2LDK 58.90 17.82 193,000 15,000 208,000 11,674 193,000 2011/9/30 189,000 15,000 204,000 11,450 6.00% 408,000 7 707 Company Residence 3LDK 72.45 21.92 257,000 - 257,000 11,727 520,000 2008/11/15 231,000 15,000 246,000 11,225 6.00% 492,000 8 801 Individual Residence 1LDK 54.37 16.45 168,000 12,000 180,000 10,944 168,000 2012/5/1 176,000 15,000 191,000 11,613 6.00% 382,000 8 802 Individual Residence 1DK 41.23 12.47 143,000 10,000 153,000 12,267 143,000 2012/2/10 134,000 10,000 144,000 11,546 6.00% 288,000 8 803 Individual Residence 1DK 37.43 11.32 135,000 10,000 145,000 12,806 135,000 2011/4/24 121,000 10,000 131,000 11,570 6.00% 262,000 8 804 Individual Residence 2LDK 58.00 17.55 187,000 15,000 202,000 11,513 187,000 2011/2/16 188,000 15,000 203,000 11,570 6.00% 406,000 8 805 Company Residence 2LDK 62.65 18.95 235,000 - 235,000 12,400 470,000 2005/7/31 203,000 15,000 218,000 11,503 6.00% 436,000 8 806 Individual Residence 2LDK 58.90 17.82 195,000 15,000 210,000 11,786 585,000 2010/10/1 191,000 15,000 206,000 11,562 6.00% 412,000 8 807 Individual Residence 3LDK 72.45 21.92 241,000 18,000 259,000 11,818 241,000 2012/3/10 234,000 15,000 249,000 11,361 6.00% 498,000 9 901 Individual Residence 1LDK 54.37 16.45 170,000 12,000 182,000 11,066 510,000 2011/12/9 178,000 15,000 193,000 11,735 6.00% 386,000 9 902 Individual Residence 1DK 41.23 12.47 144,000 10,000 154,000 12,348 288,000 2012/4/27 135,000 10,000 145,000 11,626 6.00% 290,000 9 903 Individual Residence 1DK 37.43 11.32 144,000 - 144,000 12,718 308,000 2006/2/15 122,000 10,000 132,000 11,658 6.00% 264,000 9 904 Company Residence 2LDK 58.00 17.55 180,000 15,000 195,000 11,114 360,000 2009/8/22 190,000 15,000 205,000 11,684 6.00% 410,000 9 905 Company Residence 2LDK 62.65 18.95 202,000 15,000 217,000 11,450 404,000 2011/6/25 205,000 15,000 220,000 11,609 6.00% 440,000 9 906 Company Residence 2LDK 58.90 17.82 198,000 15,000 213,000 11,955 198,000 2010/6/22 193,000 15,000 208,000 11,674 6.00% 416,000	Vacancy Deposit	6.00% 358,000	6.00% 268,000	6.00% 246,000	6.00% 380,000	6.00% 408,000	6.00% 386,000	6.00% 468,000	6.00% 368,000	6.00% 276,000	6.00% 254,000	6.00% 392,000	6.00% 420,000	6.00% 396,000	6.00% 478,000	6.00% 372,000	6.00% 280,000	6.00% 256,000	6.00% 394,000	6.00% 424,000	6.00% 400,000	6.00% 484,000	6.00% 376,000	6.00% 282,000	6.00% 258,000	6.00% 398,000	6.00% 428,000	6.00% 404,000	6.00% 488,000	6.00% 376,000	6.00% 282,000	6.00% 258,000	6.00% 398,000	6.00% 428,000	6.00% 404,000	6.00% 488,000	6.00% 378,000	6.00% 284,000	6.00% 260,000	6.00% 402,000	6.00% 432,000	6.00% 408,000	6.00% 492,000	6.00% 382,000	6.00% 288,000	6.00% 262,000	6.00% 406,000	6.00% 436,000	6.00% 412,000	6.00% 498,000	6.00% 386,000	6.00% 290,000	6.00% 264,000	6.00% 410,000	6.00% 440,000	6.00% 416,000
	Rent +CAM per Tsubo	179,000 10,883	134,000 10,744	123,000 10,863	190,000 10,829	204,000 10,764	193,000 10,832	234,000 10,677	184,000 11,188	138,000 11,065	127,000 11,217	196,000 11,171	210,000 11,081	198,000 11,113	239,000 10,905	186,000 11,309	140,000 11,225	128,000 11,305	197,000 11,228	212,000 11,186	200,000 11,225	242,000 11,042	188,000 11,431	141,000 11,305	129,000 11,393	199,000 11,342	214,000 11,292	202,000 11,337	244,000 11,133	188,000 11,431	141,000 11,305	129,000 11,393	199,000 11,342	214,000 11,292	202,000 11,337	244,000 11,133	189,000 11,492	142,000 11,385	130,000 11,481	201,000 11,456	216,000 11,397	204,000 11,450	246,000 11,225	191,000 11,613	144,000 11,546	131,000 11,570	203,000 11,570	218,000 11,503	206,000 11,562	249,000 11,361	193,000 11,735	145,000 11,626	132,000 11,658	205,000 11,684	220,000 11,609	208,000 11,674

VALUATION REPORT

APPENDIX II

		Deposit		502,000	390,000	292,000	268,000	414,000	444,000	420,000	506,000	392,000	296,000	270,000	416,000	448,000	422,000	510,000	396,000	298,000	272,000	420,000	452,000	426,000	516,000	29,292,000
		Vacancy		6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%
		per Tsubo		11,453	11,856	11,706	11,835	11,798	11,714	11,786	11,544	11,917	11,867	11,923	11,855	11,820	11,842	11,635	12,039	11,947	12,011	11,969	11,925	11,955	11,772	11,432
	Rent +CAM			251,000	195,000	146,000	134,000	207,000	222,000	210,000	253,000	196,000	148,000	135,000	208,000	224,000	211,000	255,000	198,000	149,000	136,000	210,000	226,000	213,000	258,000	14,646,000
		CAM		15,000	15,000	10,000	10,000	15,000	15,000	15,000	15,000	15,000	10,000	10,000	15,000	15,000	15,000	15,000	15,000	10,000	10,000	15,000	15,000	15,000	15,000	1,045,000
Valuation		Rent		236,000	180,000	136,000	124,000	192,000	207,000	195,000	238,000	181,000	138,000	125,000	193,000	209,000	196,000	240,000	183,000	139,000	126,000	195,000	211,000	198,000	243,000	13,601,000
		Leased date		2010/12/22	2012/7/13		2011/8/4	2005/8/18	2011/3/1	2005/9/10	2005/8/12	2011/4/2		2012/3/1	2010/4/24	2007/3/1	2011/2/24	2011/10/20	2011/7/9	2012/4/15	2011/7/26	2006/3/4	2005/7/25	2010/1/16	2005/10/31
		Deposit		486,000	172,000	-	280,000	448,000	204,000	702,000	798,000	170,000	-	134,000	190,000	484,000	603,000	247,000	348,000	294,000	142,000	456,000	488,000	406,000	810,000	22,539,000
		per Tsubo		11,863	11,188	-	13,248	11,969	11,556	12,011	12,137	11,066	-	12,718	11,684	11,714	12,123	12,092	11,309	12,588	13,425	12,995	12,875	12,235	12,183	11,674
	Rent +CAM			260,000	184,000	-	150,000	210,000	219,000	214,000	266,000	182,000	-	144,000	205,000	222,000	216,000	265,000	186,000	157,000	152,000	228,000	244,000	218,000	267,000	13,962,000					Deposit	-	-	38,000	38,000	35,000	35,000	35,000	35,000	35,000	-	-	-	-	-	-	38,000		289,000
		CAM		17,000	12,000	-	10,000	-	15,000	-	-	12,000	-	10,000	15,000	-	15,000	18,000	12,000	10,000	10,000	-	-	15,000	-	714,000					Monthly Rent	38,000	38,000	38,000	38,000	35,000	35,000	35,000	35,000	35,000	-	-	-	-	40,000	40,000	38,000	-	445,000
Actual		Rent		243,000	172,000	-	140,000	210,000	204,000	214,000	266,000	170,000	-	134,000	190,000	222,000	201,000	247,000	174,000	147,000	142,000	228,000	244,000	203,000	267,000	13,248,000					Rent per Lot	38,000	38,000	38,000	38,000	35,000	35,000	35,000	35,000	35,000	-	-	-	-	40,000	40,000	38,000	-	27,813
	Leased Leased	Floor # Tenant Use Type area area	Sqm Tsubo	9 907 Company Residence 3LDK 72.45 21.92	10 1001 Individual Residence 1LDK 54.37 16.45	10 1002 vacant Residence 1DK 41.23 12.47	10 1003 Company Residence 1DK 37.43 11.32	10 1004 Company Residence 2LDK 58.00 17.55	10 1005 Company Residence 2LDK 62.65 18.95	10 1006 Company Residence 2LDK 58.90 17.82	10 1007 Company Residence 3LDK 72.45 21.92	11 1101 Individual Residence 1LDK 54.37 16.45	11 1102 vacant Residence 1DK 41.23 12.47	11 1103 Individual Residence 1DK 37.43 11.32	11 1104 Company Residence 2LDK 58.00 17.55	11 1105 Company Residence 2LDK 62.65 18.95	11 1106 Individual Residence 2LDK 58.90 17.82	11 1107 Individual Residence 3LDK 72.45 21.92	12 1201 Company Residence 1LDK 54.37 16.45	12 1202 Company Residence 1DK 41.23 12.47	12 1203 Individual Residence 1DK 37.43 11.32	12 1204 Company Residence 2LDK 58.00 17.55	12 1205 Individual Residence 2LDK 62.65 18.95	12 1206 Company Residence 2LDK 58.90 17.82	12 1207 Individual Residence 3LDK 72.45 21.92	Total 77 units 4,235.33 1,281.19	Occupied Area 3,953.56 1,195.95	Vacant Area 281.77 85.24	Vacancy Rate 6.7%	Parking	Tenant # of Space	P01 Company 1	P02 Company 1	P03 Individual 1	P04 Company 1	P05 Individual 1	P06 Individual 1	P07 Individual 1	P08 Individual 1	P09 Company 1	P10 vacant 1	P11 vacant 1	P12 vacant 1	P13 vacant 1	P14 Company 1	P15 Individual 1	P16 Individual 1	Vacant Lot 4	Total Lots 16	Vacancy 4	Vacancy Rate 25.0%

VALUATION REPORT

APPENDIX II

==> picture [121 x 49] intentionally omitted <==

MG Tamachi Building 1F 4-3-7 Shiba, Minato-ku, Tokyo, Japan

26 October 2012

The Directors

Keck Seng Investments (Hong Kong) Limited

Dear Sirs:

In accordance with the instructions from Keck Seng Investments (Hong Kong) Limited (the “Company”) or its subsidiaries (hereafter together referred to as the “Group”), we have completed a valuation of the 77-room Iris Ginza East (the “Subject”) located at 16-1, 45, 3chome, Minato, Chuo-ku, Tokyo, Japan.

VALUATION REPORT

APPENDIX II

Unless otherwise stated, all money amounts stated in our report are in Japanese Yen (JPY).

Enclosed herein is our summary of value and valuation certificate.

Yours sincerely, AS Management Inc. By: Fumiaki Ishigami Director Japanese Licensed Real Estate Appraiser Registered 9268

Note: Fumiaki Ishigami has extensive experience in the valuation of residential properties in Tokyo for over 14 years.

VALUATION REPORT

APPENDIX II

SUMMARY OF VALUES

Property

Market Value “As Is” 31 July 2012

Property held by the Group as an investment

Iris Ginza East 16-1, 45, 3chome, Minato, Chuo-ku Tokyo, Japan

JPY 2,140,000,000

VALUATION CERTIFICATE

Property held by the Group as an investment

Market Value “As Is” Property Description and Tenure Particulars of Occupancy 31 July 2012 Iris Ginza East The property is a 12-storey, 77The property is currently a JPY2,140,000,000 16-1, 45, 3chome, room, apartment built in 2005. 77-room apartment. Minato, Chuo-ku Tokyo, The gross building area of the Japan apartment is 4,248.30 square The apartment is held in a meter. freehold interest. The registered site area of the Under the applicable Subject is 555.26 square meter. laws, no ground rent or government rent is payable.

Note:

The property was last inspected on 24 September 2012.
Based on a search at the local land registry, Mitsubishi UFJ Trust Bank is the title holder of the property while KSJ One holds the trust beneficiary interest in the property. As at 31 July 2012, the property is pledged to a bank for a loan.
The tenancy agreements with respect to the property provides for rental reviews as agreed by the lessor and the lessee in case of a significant change of economic condition.
Based on our review of documents provided to us by the Company, there are no options or rights of pre-emption concerning or other material that would adversely affect the market value of the property.
The Iris Ginza East is zoned Chuo-ku (central part in Tokyo). The Chuo-ku district allows for a wide variety of residential and commercial uses including office, retail, residential, entertainment and institutional. Apartments are a residential use. The Iris Ginza Eastis a legal, conforming use of the Chuo-ku district. The outgoing and disbursements from the rent include service charge, maintenance fee, utility charge, repair charge, etc.
As of end of July 2012, the Subject’s occupancy rate is approximately 94 percent. The annual rent in for 2011 and for the seven months ended 31 July 2012 are approximately JPY132 million and JPY78 million respectively, or JPY10,997,000 and JPY11,142,000 on a monthly basis respectively.
This valuation is subject to following key assumptions:

Key Valuation Assumptions
Discount Rate	4.9%
Capitalization Rate	5.1%
Effective Gross Income	JPY141,158,350
Net Cash flow	JPY110,937,744

VALUATION REPORT

APPENDIX II

Real Estate Valuation Re ort p

Iris Ginza East

Tokyo, Japan

Submitted to:

Keck Seng Investments (Hong Kong) Ltd

Prepared by:

AS Management Inc. 4-3-7-1F Shiba, Minato-ku, Tokyo

VALUATION REPORT

APPENDIX II

Nature on the Assignment

Purpose

This report is prepared to undertake a market valuation of the subject property.

Property Rights Valued

The property rights valued are the freehold interest in the property including land and building.

Discloser to Third Party No ✔ Yes ( THE STOCK EXCHANGE OF HONG KONG LIMITED) Public Announcement No ✔ Yes ( THE STOCK EXCHANGE OF HONG KONG LIMITED)

The reason for applying Valuation Report which is not fully based on Japanese appraisal standard.

The valuation report is used only internally.

No plan of public announcement and already acquired approval from disclosure attention(s).

✔ By judging not to have impact on the decision-making of submitted attention(s) or third parties if publicly announced.

Other reason:

Instruction of approval from publisher if the valuation report is disclosed to other than original attention.

Identification of the Subject Property

Special Assumptions and Limiting Conditions

As-is basis

None

Date of Value 2012/7/31

Land & Building Use The ownership interest in tenant-occupied building and its site.

Date of Report

Identification of the Subject Property

2012/10/5
Physical Condition		Site Inspection Interior Inspection	Yes (2012/9/24) Yes(Common Area)
	Land ✔	Registered	Surveyed
Size	Building ✔	Registered	Surveyed
	Leased area	Contract	Rent-roll ✔

Information Utilized

Based on the material provided by the client and collected by AS Management

Statement Referred in This Report Methodology of the Valuation Basis of Valuation

General Factor ✔ Area-specific factor ✔ Property-specific factor Cost Approach Sales Comparison ✔ Income Approach Approach The valuation is prepared in accordance with the International Valuation Standards Committee's (IVSC) definition of market value, which is

VALUATION REPORT

APPENDIX II

Attention: Keck Seng Investments (Hong Kong) Ltd

4-3-7-1F Shiba, Minato-ku, Tokyo AS Management Inc.

Licensed Real Estate Appraiser Fumiaki Ishigami

==> picture [159 x 25] intentionally omitted <==

As a result of investigation and analysis, the market value of the freehold interest of the property identified as the Iris Ginza East in July 2012 is as follows.

Opinion of Value ¥2,140,000,000

Identification of subject property

1. Land

1. Land
Location	Lot Number	Category Registered	of Land Actual	Land Size	Owner
3chome, Minato, Chuo- ku, Tokyo	16-1, 16-45	Building Site Building Site	Building Site Public Road	506.89 ㎡ 48.37 ㎡	Mitsubishi UFJ Trust Bank
(Postal Adrress: 3-1-3 Minato)			Total	555.26 ㎡

2. Building

2. Building
Building Number Category Structure, Completion date Location	Story Gross Floor Area Owner
16-1 Apartment 16-1 Steel-framed reinforced concrete Flat roof 2005/6/1	12F 354.34 ㎡ 11F 354.34 ㎡ 10F 354.34 ㎡ 9F 354.34 ㎡ 8F 354.34 ㎡ 7F 354.34 ㎡ 6F 354.34 ㎡ 5F 354.34 ㎡ 4F 354.34 ㎡ 3F 354.34 ㎡ 2F 354.34 ㎡ 1F 350.56 ㎡ Total 4,248.30 ㎡ Mitsubishi UFJ Trust Bank

VALUATION REPORT

APPENDIX II

■ Property Description and Appliance of Valuation Method

The subject property comprises 77 rooms ranging from 1DK type to 1LDK type. The 1st floor is entrance hall and common area, 2nd to 12th floors are residence. Rooms are leased to individual or company. The property is also equipped with an automated car parking system that can accommodate up to 17 cars.

Current zoning use: Commercial Area, FAR 700%. The property is held for investment. To evaluate the subject property, income approach was applied. Direct Capitalization Method and DCF Method were applied as income approach. Market data such as rent and cap rate were analyzed before applying such methods.

■ Market Condition around the Subject Property

■ Other Conditions

Based on property management report and survey of appraiser, building conditions are good and building services are appropriately available.

As of July end, the property had a pledge. The property rights valued are the freehold interest without pledges.

There is a plan to dispose of the subject property on September 26th, 2012.

Based on property management report and survey of appraiser, building conditions are good and building services are appropriately available. As of July end, the property had a pledge. The property rights valued are the freehold interest without pledges. There is a plan to dispose of the subject property on September 26th, 2012.	Based on property management report and survey of appraiser, building conditions are good and building services are appropriately available. As of July end, the property had a pledge. The property rights valued are the freehold interest without pledges. There is a plan to dispose of the subject property on September 26th, 2012.	Based on property management report and survey of appraiser, building conditions are good and building services are appropriately available. As of July end, the property had a pledge. The property rights valued are the freehold interest without pledges. There is a plan to dispose of the subject property on September 26th, 2012.
Apartment Inventory,Iris Ginza East
Room Type Number Floor Room Size(sqm) 1DK, 1LDK(Small) 55 2F-12F 40.08-42.91 1LDK(Large) 22 2F-12F 50.01-50.25 Total 77 Typical leasingterm at this apartment is a 2-years lease with every2years renewal option.		Room Type Number Floor Room Size(sqm)
		1DK, 1LDK(Small) 55 2F-12F 40.08-42.91 1LDK(Large) 22 2F-12F 50.01-50.25
Rent Comparables
Rent Comp #1 Rent Comp #2 Rent Comp #3 Rent Comp #4
Location 2chome Minato Chuo-ku 2chome Shinkawa Chuo-ku 3chome Irifune Chuo-ku 3chome Minato Chuo-ku
Property Type 2LDK 2DK 1LDK 1LDK
Station/Distance Shintomicho 700m Shintomicho 200m Shintomicho 330m Shintomicho 500m
Level / Story 7F/13F 8F/12F 6F/10F 2F/10F
Completion Year 2004 2003 2008 2004
Date of Contract 2012/6/26 2012/7/30 2012/4/29 2012/5/25
Leased Area	㎡ 50.38 47.35 42.58 40.24
	Tusbo 15.24 14.32 12.88 12.17
@11,352 @11,380 @12,810 @11,008 Rent+CAM (per Tsubo)
Rent	Amount 173,000 163,000 160,000 124,000
	per Tusbo @11,352 @11,380 @12,422 @10,187
CAM	Amount 0 0 5,000 10,000
	per Tsubo @0 @0 @388 @822
SecurityDeposit(Months) 3.0 3.0 1.0 1.0
KeyMoney	0.0 0.0 0.0 1.0
Ranking Grade	Location SlightlyInferior Similar Similar SlightlyInferior
	Building Similar Similar Similar Similar

VALUATION REPORT

APPENDIX II

■ Analysis of Discount Rate, Cap Rate and Terminal Cap Rate

Discount Rate

Determination by a Built-up Rate

	Rate		Description
Base Rate	4.0%
Property Type	0.8%	Residence
Area	0.1%	Minato, Chuo-ku
Location	0.0%	3chome, Minato (5	minutes walk from Shintomicho station)
Building Age	0.0%	7 years old
Building Grade	0.0%
Ownership	0.0%
Other	0.0%
Built-upRate	4.9%

Cap Rate

Market- derived Cap rate

Market- derived Cap rate	Market- derived Cap rate
Sales Comp#1 Sales Comp#2 Sales Comp#3 Sales Comp#4
Name of Building Residia Higashi Ginza Castalia Shintomicho II Park Axis Hacchobori We Will Hacchobori
Location 1chome Tsukiji Chuo-ku 2chome Irifune Chuo-ku 2chome Shinkawa Chuo-ku 4chome Hacchobori Chuo-ku
Property Type Residence Residence Residence Residence
Story B1F - 15F 1F - 12F B1F - 12F B2F - 14F
Year Built 2006 2003 2009 2008
Gross Building Area 6,608㎡ 1,419㎡ 3,241㎡ 4,082㎡
Rentable Area 4,871㎡ 1,245㎡ 2,416㎡ 3,066㎡
Transaction Date 2007/4/12 2004/12/15 2010/1/8 2011/6/1
Purchase Price ¥5,251,000,000 ¥968,000,000 ¥1,760,000,000 ¥2,370,000,000
Appraised NCF Cap Rate 4.60% 5.00% 5.50% 4.80%
Appraised NCF Discount Rate 4.40% 4.90% 5.30% 4.50%
Latest Appraisal Date 2012/7/31 2012/2/29 2012/2/29 2012/2/29
Latest Appraisal Value ¥4,780,000,000 ¥745,000,000 ¥1,870,000,000 ¥2,357,000,000
Latest Appraisal NCF Cap Rate 5.00% 5.20% 5.20% 4.80%
Ranking Grade	Location Similar Similar Slightly inferior Superior
	Building Similar Slightly inferior Slightly superior Slightly superior

■ Determination of Discount Rate, Cap Rate and Terminal Cap Rate

Discount Rate	4.90%
Cap Rate	5.10%
Terminal Cap Rate	5.30%

VALUATION REPORT

APPENDIX II

■ Operating Performance

Leasing Status, Iris Ginza East

Room Type	Number	Average rent per tsubo*	Occupancy
1DK, 1LDK(Small)	55	@12,362	92.8%
1LDK(Large)	22	@11,466	95.4%
Total	77	@12,062	93.7%

*As of July 2012, including CAM

Based on the monthly operation report provided from client, trailing 12 months operating performance is descried below.

descried below.
Income	Past 1year	JPY/㎡*/month	JPY/tsubo*/month	Description
Rent+CAM	131,497,963	3,263	10,786
Rent	126,135,933	3,130	10,346
CAM	5,362,030	133	440
Utility	0	-	-
Parking Lot	5,606,032	-	-
Motor cycle parking	94,516	-	-
Other	505,503	-	-
Key Money	3,411,000	-	-
Contract Renewal Fee	3,509,250	-	-
Restoration Fee	2,765,991	-	-
Total Income	147,390,255	-	-
			* Area is net rentable area including vacant space

Expenses	Past 1year	JPY/㎡*/month	JPY/tsubo*/month
Maintenance	-3,360,000	-83	-276
Utility	-1,659,026	-41	-136
Repairs (Minor)	-865,410	-21	-71
Restoration Costs	-4,161,943	-103	-341
Property Management Fee	-4,113,961	-102	-337
Leasing Management Fee	-3,907,500	-97	-321
Tenant Recruitment	-5,257,500	-130	-431
Contract Renewal Commission	-2,110,500	-52	-173
Property Tax Land	-550,009	-14	-45
Property Tax Building	-6,565,741	-163	-539
Property Tax Depreciable Asset	-335,558	-8	-28
Insurance	-386,310	-10	-32
Other (CATV)	-432,000	-11	-35
Other	-564,958	-14	-46
Capital Expenditure	-753,000	-19	-62
Total Operating Expenses	-35,023,416	-869	-2,873
			* Area is net rentable area including vacant space
Net Income	112,366,839

VALUATION REPORT

APPENDIX II

■ Direct Capitalization Method

Rent assumption

Revenue is based on stabilized Mark-to-Market rent which is considered with Rent Comparables and actual rent.

Floor	Type	Rentable Area (Tsubo)	Monthly Rent (JPY / Tsubo)	Monthly Rent JPY	CAM (JPY / Tsubo)	Monthly CAM JPY	Security Deposit (Months)	Rent+CAM (JPY/Tsubo)
2F-12F	1DK, 1LDK(Small)	682.37	11,127	7,593,000	806	550,000	1	11,933
2F-12F	1LDK (Large)	333.62	10,317	3,442,000	659	220,000	1	10,977
Total		1,015.99	10,861	11,035,000	758	770,000		11,619

Calculation of Effective Gross Income

Item	Amount			Assumptions	Assumptions	Assumptions
Rent	132,420,000	Yen	Monthly Rent	11,035,000		Yen	× 12 Month
CAM	9,240,000	Yen	Monthly CAM		770,000	Yen	× 12 Month
Utility	0	Yen	None
Parking Lot			# of Space			Yen/Space
	6,324,000	Yen	17	×		31,000	× 12 Month
Other	180,000	Yen	Motorcycle parking (assumed		3 units occupied @JPY5,000 per month)
Key Money		Yen	None
Contract Renewal Fee			Rate	Yearly Renewal Rate
1DK, 1LDK(Small)	1,898,250	Yen	1 month rent			25%
1LDK (Large)	860,500	Yen	1 month rent			25%
Potential Gross Income	150,922,750	Yen
Vacancy Loss
1DK, 1LDK(Small)	5,862,960	Yen	97,716,000	×	6.0%
1LDK (Large)	2,636,640	Yen	43,944,000	×	6.0%
Parking Lot	1,264,800	Yen	6,324,000	×	20.0%
Utility	0	Yen	0	×	0.0%
Total	9,764,400	Yen

Collection Loss	0	Yen	Assumed none considered with the deposited money
Effective Gross Income	141,158,350	Yen

VALUATION REPORT

APPENDIX II

Calculation of Operating Expenses

Item		Amount	Assumptions
			276Yen/Tsubo × NRA × 12months
Maintenance		3,360,000 Yen	Based on track record (PM Report) provided by client and
			standard amount of similar size building.
			130Yen/Tsubo × NRA × 12months
Utility		1,584,937 Yen	Based on track record (PM Report) provided by client and
			standard amount of similar size building.
			215Yen/Tsubo × NRA × 12months
Repairs		2,621,243 Yen	Based on track record (PM Report) provided by client and
			standard amount of similar size building.
Property Management Fee		4,234,751 Yen	EGI (Excluding Key money & Renewal fee)	× 3%
Tenant Recruitment		2,758,750 Yen	One month of new market rent for newly contracted area.
			Turnover ratio 1DK, 1LDK(Small) 25% 1LDK (Large)	25%
Contract Renewal Commission		1,379,375 Yen	50% of Contract Renewal Fee
Property Tax	Land	550,009 Yen	Actual amount of year 2012 based on the information provided by client.
	Building	6,565,741 Yen	Actual amount of year 2012 based on the information provided by client.
Depreciable Asset		335,558 Yen	Based on actual amount of year 2012.
Insurance		386,310 Yen	Based on actual amount of year 2012.
			Advertisement cost (120,000yen per room×turnover ratio×
Other		2,926,800 Yen	77rooms)
			CATV(36,000yenper month),Internet(15,400yenper month)
Operating Expenses		26,703,474 Yen
Calculation of Net Operating		Income
Effective Gross Income		141,158,350 Yen
Operating Expenses		26,703,474 Yen
Net Operating Income		114,454,876 Yen
Non-Operating Revenue and		Expenses
Operating profit on Deposit		443,868 Yen	Security deposit after vacancy adjustment	Yield
			Yen 22,193,400	2.0%
Capital Expenditure		3,961,000 Yen	Based on Engineering Report provided by client.
Net Cash Flow		110,937,744 Yen

■ Value indicated by the Direct Capitalization Method

Value was derived by dividing subject's Net Cash Flow with Cap Rate

Net Cash Flow			Cap Rate	Value
110,937,744	÷		5.10%	2,180,000,000

APPENDIX II

VALUATION REPORT

（Yen)	Year 10 Year 11	91,116,000 91,116,000	6,600,000 6,600,000	41,304,000 41,304,000	2,640,000 2,640,000	0 0	6,324,000 6,324,000	180,000 180,000	0 0	2,758,750 2,758,750	150,922,750 150,922,750	-5,862,960 -5,862,960	-2,636,640 -2,636,640	-1,264,800 -1,264,800	0 0	-9,764,400 -9,764,400	0 0	141,158,350 141,158,350	3,360,000 3,360,000	1,584,937 1,584,937	2,621,243 2,621,243	4,234,751 4,234,751	2,758,750 2,758,750	1,379,375 1,379,375	550,009 550,009	5,992,375 5,992,375	335,558 335,558	386,310 386,310	2,926,800 2,926,800	26,130,107 26,130,107	115,028,243 115,028,243	15,372,737 15,372,737	307,455 307,455	3,961,000 3,961,000	111,374,698 111,374,698	0.6198	69,030,038	18.51% 18.51%	(40.51％) 866,810,610	2,101,409,390	42,028,188 2,059,381,202	42,028,188 2,059,381,202	42,028,188 2,059,381,202	(59.49％) 1,276,404,469	(100.00％) 2,140,000,000
	Year 7 Year 8 Year 9	91,116,000 91,116,000 91,116,000	6,600,000 6,600,000 6,600,000	41,304,000 41,304,000 41,304,000	2,640,000 2,640,000 2,640,000	0 0 0	6,324,000 6,324,000 6,324,000	180,000 180,000 180,000	0 0 0	2,758,750 2,758,750 2,758,750	150,922,750 150,922,750 150,922,750	-5,862,960 -5,862,960 -5,862,960	-2,636,640 -2,636,640 -2,636,640	-1,264,800 -1,264,800 -1,264,800	0 0 0	-9,764,400 -9,764,400 -9,764,400	0 0 0	141,158,350 141,158,350 141,158,350	3,360,000 3,360,000 3,360,000	1,584,937 1,584,937 1,584,937	2,621,243 2,621,243 2,621,243	4,234,751 4,234,751 4,234,751	2,758,750 2,758,750 2,758,750	1,379,375 1,379,375 1,379,375	550,009 550,009 550,009	6,177,706 6,177,706 6,177,706	335,558 335,558 335,558	386,310 386,310 386,310	2,926,800 2,926,800 2,926,800	26,315,438 26,315,438 26,315,438	114,842,912 114,842,912 114,842,912	15,372,737 15,372,737 15,372,737	307,455 307,455 307,455	3,961,000 3,961,000 3,961,000	111,189,367 111,189,367 111,189,367	0.7154 0.6820 0.6502	79,544,873 75,831,148 72,295,326	18.64% 18.64% 18.64%	①Total Present Value of annual NCF	②Resale Value (NCF in year11 ÷ TCR)	④Reversionary Value (②－③) ③Sales Cost (②×2%）			⑤Current Reversionary Value (④×Present Value Rate)	⑥ Value indicated by DCF (① ＋ ⑤ )
	Year 6	91,116,000	6,600,000	41,304,000	2,640,000	0	6,324,000	180,000	0	2,758,750	150,922,750	-5,862,960	-2,636,640	-1,264,800	0	-9,764,400	0	141,158,350	3,360,000	1,584,937	2,621,243	4,234,751	2,758,750	1,379,375	550,009	6,368,769	335,558	386,310	2,926,800	26,506,502	114,651,848	15,372,737	307,455	3,961,000	110,998,303	0.7505	83,304,227	18.78%		Value indicated		by DCF	Method
	Year 5	91,116,000	6,600,000	41,304,000	2,640,000	0	6,324,000	180,000	0	2,758,750	150,922,750	-5,862,960	-2,636,640	-1,264,800	0	-9,764,400	0	141,158,350	3,360,000	1,584,937	2,621,243	4,234,751	2,758,750	1,379,375	550,009	6,368,769	335,558	386,310	2,926,800	26,506,502	114,651,848	15,372,737	307,455	3,961,000	110,998,303	0.7873	87,388,964	18.78%
	Year 1 Year 2 Year 3 Year 4	Rent 94,609,872 93,379,944 92,166,004 91,116,000 CAM 5,490,240 5,841,615 6,215,479 6,600,000 1DK, 1LDK(Small)		Rent 43,421,076 42,682,918 41,957,308 41,304,000 CAM 1,881,600 2,107,392 2,360,279 2,640,000 1LDK (Large)		0 0 0 0	6,084,000 6,084,000 6,084,000 6,324,000	180,000 180,000 180,000 180,000	0 0 0 0	2,875,645 2,834,643 2,794,236 2,758,750	154,542,433 153,110,512 151,757,306 150,922,750	-6,606,607 -5,953,294 -5,902,889 -5,862,960 1DK, 1LDK(Small)	-2,401,042 -2,687,419 -2,659,055 -2,636,640 1LDK (Large)	-1,143,792 -1,216,800 -1,216,800 -1,264,800 Parking Lot	0 0 0 0 Utility	-10,151,441 -9,857,513 -9,778,744 -9,764,400 Total	0 0 0 0	144,390,992 143,252,999 141,978,562 141,158,350	3,360,000 3,360,000 3,360,000 3,360,000	1,584,937 1,584,937 1,584,937 1,584,937	2,621,243 2,621,243 2,621,243 2,621,243	4,331,730 4,297,590 4,259,357 4,234,751 EGI (excluding Key money & Renewal fee)×3.0%	2,758,750 2,758,750 2,758,750 2,758,750	1,437,823 1,417,322 1,397,118 1,379,375	550,009 550,009 550,009 550,009 Land	6,565,741 6,565,741 6,565,741 6,368,769 Building	335,558 335,558 335,558 335,558 Depreciable Asset	386,310 386,310 386,310 386,310	2,926,800 2,926,800 2,926,800 2,926,800	26,858,901 26,804,260 26,745,823 26,506,502	117,532,091 116,448,739 115,232,739 114,651,848	16,033,787 15,802,035 15,573,692 15,372,737 Balance of Deposit	320,676 316,041 311,474 307,455 Operating Profit	3,961,000 3,961,000 3,961,000 3,961,000	113,891,767 112,803,780 111,583,213 110,998,303	0.9533 0.9088 0.8663 0.8258	108,573,022 102,516,076 96,664,537 91,662,399	18.60% 18.71% 18.84% 18.78%	％ Comment	4.9% Assumes Real estate investment base rate and Subject's intrinsic characteristics.		5.3% Assumes uncertainty 10 years（Market Volatility Risk, Liquidity Risk etc).		2.0% Assumes a Sales cost of 2%	2.0% Based on Long Term Government Bonds
■ DCF Method	Item		① Rent and CAM			② Utility ③ Parking Lot Income ④ Other			・ Key Money ・ Renewal Fee ⑥ Vacancy Loss Effective Gross ⑤ Potential Gross Income (① -④ Total)								⑦ Collection loss	(1) Effective Gross Income	① Building Maintenance Fee	② Utility	③ Repair (Minor) ④ PM Fee ⑤ Tenant Recruitment ⑥ Renewal Commission Operating Expense ⑧ Insurance ⑦ Property Tax								⑨ Other	(2) Operating Expense	(3) Net Operating Income (NOI) (1)-(2)	(4) Operating Profit on Deposit		(5) Capital Expenditure (CAPEX)	(6) Net Cash Flow（ NCF) (3)+(4)-(5)	(7) Compound Interest Present Value Rate	(8) Present Value of NCF (6)×(7)	ＯＥＲ (2)÷(1)	Name	DR：Discount Rate Applied		Termin TCR：Terminal Cap Rate	S：Sales Cost ology		Investment Yield of Deposit

VALUATION REPORT

APPENDIX II

==> picture [309 x 652] intentionally omitted <==

----- Start of picture text -----

（ Yen) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 25.0% 25.0% 6.0% 6.0% 20.0% 0.0% 0.0%
Year 11 @11,933 @10,977
Year 10 0.0% 0.0% @11,933 0.0% 0.0% 0.0% @10,977 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 25.0% 25.0% 6.0% 6.0% 20.0% 0.0% 0.0%
Year 9 0.0% 0.0% @11,933 0.0% 0.0% 0.0% @10,977 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 25.0% 25.0% 6.0% 6.0% 20.0% 0.0% 0.0%
Year 8 0.0% 0.0% @11,933 0.0% 0.0% 0.0% @10,977 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 25.0% 25.0% 6.0% 6.0% 20.0% 0.0% 0.0%
Year 7 0.0% 0.0% @11,933 0.0% 0.0% 0.0% @10,977 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 25.0% 25.0% 6.0% 6.0% 20.0% 0.0% 0.0%
Year 6 0.0% 0.0% @11,933 0.0% 0.0% 0.0% @10,977 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 25.0% 25.0% 6.0% 6.0% 20.0% 0.0% 0.0%
Year 5 0.0% 0.0% @11,933 0.0% 0.0% 0.0% @10,977 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 25.0% 25.0% 6.0% 6.0% 20.0% 0.0% 0.0%
Year 4 -1.1% 6.2% @11,933 -0.7% -1.6% 11.9% @10,977 -0.9% 0.0% 0.0% 0.0% 0.0% 0.0% 25.0% 25.0% 6.0% 6.0% 20.0% 0.0% 0.0%
Year 3 -1.3% 6.4% @12,015 -0.9% -1.7% 12.0% @11,070 -1.1% 0.0% 3.9% 0.0% 0.0% 0.0% 25.0% 25.0% 6.0% 6.0% 20.0% 0.0% 0.0%
Year 2 -1.3% 6.4% @12,117 -0.9% -1.7% 12.0% @11,188 -1.1% 0.0% 0.0% 0.0% 0.0% 0.0% 25.0% 25.0% 6.0% 6.0% 20.0% 0.0% 0.0%
Year 1 -1.3% 6.4% @12,225 -0.9% -1.7% 12.0% @11,316 -1.2% 0.0% 0.0% 0.0% 0.0% 0.0% 25.0% 25.0% 6.6% 5.3% 18.8% 0.0% 0.0%
Beginning (Monthly) 7,988,000 430,000 @12,336 Volatility 3,681,000 140,000 @11,453 Volatility 0 507,000 15,000
Rent CAM Rent CAM
Rent+CAM (per Tsubo) Rent+CAM (per Tsubo)
Assumptions
6months+6.0%×6months)
×
Year 1: Adopted actual rent (Assumed rent was used for vacant space) Year 2 onwards: The volatility rate was calculated based on the assumption that rent is stabilized to market rent considering average turnover rate of tenants, actual lease period and tenant type. Year 1: Adopted actual rent (Assumed rent was used for vacant space) Year 2 onwards: The volatility rate was calculated based on the assumption that rent is stabilized to market rent considering average turnover rate of tenants, actual lease period and tenant type. None Assumed that rent will be stibilized to market level by year 3 Motorcycle parking (assumed 3 units occupied, 5,000yen per unit) None 1month of renewed rent as a contract renewal fee. Year 1 onwards: Assumed one time every 4 year, which equals to 25%. Year 1 onwards: Assumed one time every 4 year, which equals to 25%. Year 1: Adopted current vacancy rate (7.2%) for 6 month and adopted market vacancy rate for remaining 6 months. (6.6%=7.2% Year 2 onwards: The volatility rate was calculated based on the assumption that the vacancy rate will be stabilized to market rate considering current vacancy rate, average turnover rate of tenants. Year 1: Adopted current vacancy rate (4.6%) for 6 month and adopted market vacancy rate for remaining 6 months. (5.3%=4.6%×6months+6.0%× 6months) Year 2 onwards: Assumed the vacancy rate to be stabilized to market rate considering current vacancy rate, average turnover rate of tenants. Year 1: Adopted current vacancy rate (17.6%) for 6 month and adopted market vacancy rate for remaining 6 months. (18.8%=17.6%×6months+20.0%×6months) Year 2 onwards: Assumed the vacancy rate to be stabilized to market rate . None Assumed none considered with the deposited money
1DK, 1LDK(Small) 1LDK (Large) 1DK, 1LDK(Small) 1LDK (Large) 1DK, 1LDK(Small) 1LDK (Large) Parking Lot Utility
Item
Key Money Renewal Fee
Rent and CAM Utility Parking Lot Other ・・ Vacancy Loss Collection loss
① ② ③ ④ Turnover rate ⑥ ⑦
Assumption of DCF Method (Effective Gross Income)
----- End of picture text -----

APPENDIX II

VALUATION REPORT

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Yen) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
（
Year 11
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -3.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Year 10
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Year 9
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Year 8
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -3.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Year 7
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Year 6
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Year 5
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -3.0% 0.0% 0.0% 0.0% -1.1% -1.6%
Year 4
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -1.3% -1.7%
Year 3
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -1.3% -1.7%
Year 2
0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% -3.0% 0.0% 0.0% 0.0% -1.3% -1.7%
Year 1
Year amount / Volatility 3,360,000 1,584,937 2,621,243 550,009 6,565,741 335,558 386,310 2,926,800 10,340,000 5,929,000 3,961,000
3%
×
Assumptions
Year 1: Assumed same amount as Direct capitalization. Year 2 onwards: Assumed volatility rate to be flat. Year 1: Assumed same amount as Direct capitalization. Year 2 onwards: Assumed volatility rate to be flat. Year 1: Assumed same amount as Direct capitalization. Year 2 onwards: Assumed volatility rate to be flat. EGI (Excluding Key money & Renewal fee) One month of new market rent for newly contracted area. Assumed 50% of Renewal Fee to be paid to Property Manager. Year 1: Assumed same amount as Direct capitalization. Year 2 onwards: Assumed volatility rate to be flat. Year 1: Assumed same amount as Direct capitalization. Year 2 onwards: Assumed tax abatement of -3% in Yr 1, 4, 7 and 10. Year 1: Assumed same amount as Direct capitalization. Year 2 onwards: Assumed volatility rate to be flat. Year 1: Assumed same amount as Direct capitalization. Year 2 onwards: Assumed volatility rate to be flat. Assumed same amount as Direct capitalization. Advertisement cost (120,000yen per room × turnover ratio × 77rooms) CATV (36,000yen per month), Internet (15,400yen per month) Year 1: Beginning is based on actual deposit amount. Year 2 onwards: Assumed a volatility rate in line with rental levels. Based on Engineering Report provided from client.
Land Building Asset
1DK, 1LDK(Small) 1LDK (Large) Depreciable 1DK, 1LDK(Small) 1LDK (Large)
Item
Building Maintenance Fee Utility Repair PM Fee Tenant Recruitment Renewal Commission Property Tax Insurance Other
① ② ③ ④ ⑤ ⑥ ⑦ ⑧ ⑨ Balance of Deposit Capital Expenditure (CAPEX)
Assumption of DCF Method (Expenses)
----- End of picture text -----

VALUATION REPORT

APPENDIX II

■ Correlation and Final Estimate of Value

The final step in the valuation process is the correlation of the indications of value derived by Direct Capitalization Method and DCF Method.

We have obtained following value indications.

Direct Capitalization Method	2,180,000,000 Yen
DCF Method	2,140,000,000 Yen

Direct Capitalization Method indicates market value with stabilized cash flow estimation.

The value indicated by the income approach was based on the DCF Methods to consider the changeable cash flows, which is well supported by the direct capitalization method.

Value indicated by the income approach 2,140,000,000 Yen

■ Reconciliation of the Indicated Value and Determination of the Value

Determined final opinion of value by adopting above indicated value.

Final opinion of value 2,140,000,000 Yen

Appendix Rent-roll Wide Area Map Detailed Map Floor Plans

APPENDIX II

VALUATION REPORT

Actual Valuation Floor # Tenant Use Type Leased area Sqm Leased area Tsubo Rent CAM Rent +CAM per Tsubo Deposit Leased date Rent CAM Rent +CAM per Tsubo Vacancy Deposit 2 201 Individual Residence 1LDK(2) 50.25 15.20 161,000 - 161,000 10,592 483,000 2005/7/12 147,000 10,000 157,000 10,329 6.00% 314,000 2 202 Individual Residence 1LDK(1) 40.17 12.15 146,000 - 146,000 12,015 146,000 2005/8/1 127,000 10,000 137,000 11,274 6.00% 274,000 2 203 Individual Residence 1DK 41.52 12.56 138,000 10,000 148,000 11,784 138,000 2012/3/10 131,000 10,000 141,000 11,226 6.00% 282,000 2 204 Company Residence 1LDK(2) 50.01 15.13 161,000 10,000 171,000 11,304 161,000 2010/12/22 147,000 10,000 157,000 10,378 6.00% 314,000 2 205 Individual Residence 1DK 40.39 12.22 137,000 10,000 147,000 12,031 137,000 2012/1/7 128,000 10,000 138,000 11,295 6.00% 276,000 2 206 Individual Residence LDK+DEN 40.08 12.12 136,000 10,000 146,000 12,042 136,000 2012/3/1 127,000 10,000 137,000 11,300 6.00% 274,000 2 207 Individual Residence LDK+DEN 42.91 12.98 143,000 10,000 153,000 11,787 143,000 2011/1/29 136,000 10,000 146,000 11,248 6.00% 292,000 3 301 Company Residence 1LDK(2) 50.25 15.20 170,000 - 170,000 11,184 340,000 2009/1/25 152,000 10,000 162,000 10,657 6.00% 324,000 3 302 Individual Residence 1LDK(1) 40.17 12.15 161,000 - 161,000 13,249 322,000 2008/8/2 131,000 10,000 141,000 11,604 6.00% 282,000 3 303 Individual Residence 1DK 41.52 12.56 136,000 10,000 146,000 11,624 136,000 2010/10/23 135,000 10,000 145,000 11,545 6.00% 290,000 3 304 Individual Residence 1LDK(2) 50.01 15.13 163,000 10,000 173,000 11,436 163,000 2011/3/11 151,000 10,000 161,000 10,642 6.00% 322,000 3 305 Individual Residence 1DK 40.39 12.22 135,000 10,000 145,000 11,868 135,000 2009/12/28 132,000 10,000 142,000 11,622 6.00% 284,000 3 306 Company Residence LDK+DEN 40.08 12.12 147,000 - 147,000 12,125 294,000 2005/8/12 131,000 10,000 141,000 11,630 6.00% 282,000 3 307 Individual Residence LDK+DEN 42.91 12.98 129,000 10,000 139,000 10,709 129,000 2009/8/27 140,000 10,000 150,000 11,556 6.00% 300,000 4 401 Individual Residence 1LDK(2) 50.25 15.20 162,000 10,000 172,000 11,315 162,000 2011/8/20 153,000 10,000 163,000 10,723 6.00% 326,000 4 402 Individual Residence 1LDK(1) 40.17 12.15 135,000 10,000 145,000 11,933 135,000 2011/1/8 132,000 10,000 142,000 11,686 6.00% 284,000 4 403 Individual Residence 1DK 41.52 12.56 136,000 10,000 146,000 11,624 136,000 2009/8/9 137,000 10,000 147,000 11,704 6.00% 294,000 4 404 Individual Residence 1LDK(2) 50.01 15.13 172,000 - 172,000 11,370 344,000 2009/1/17 153,000 10,000 163,000 10,775 6.00% 326,000 4 405 Individual Residence 1DK 40.39 12.22 139,000 10,000 149,000 12,195 139,000 2012/3/17 133,000 10,000 143,000 11,704 6.00% 286,000 4 406 Individual Residence LDK+DEN 40.08 12.12 138,000 10,000 148,000 12,207 138,000 2011/3/25 132,000 10,000 142,000 11,712 6.00% 284,000 4 407 Company Residence LDK+DEN 42.91 12.98 145,000 10,000 155,000 11,941 290,000 2012/2/10 141,000 10,000 151,000 11,633 6.00% 302,000 5 501 Individual Residence 1LDK(2) 50.25 15.20 146,000 10,000 156,000 10,263 146,000 2009/9/1 155,000 10,000 165,000 10,855 6.00% 330,000 5 502 Individual Residence 1LDK(1) 40.17 12.15 132,000 10,000 142,000 11,686 132,000 2009/9/25 134,000 10,000 144,000 11,850 6.00% 288,000 5 503 Individual Residence 1DK 41.52 12.56 138,000 10,000 148,000 11,784 138,000 2010/6/19 138,000 10,000 148,000 11,784 6.00% 296,000 5 504 Company Residence 1LDK(2) 50.01 15.13 165,000 10,000 175,000 11,568 330,000 2010/10/28 154,000 10,000 164,000 10,841 6.00% 328,000 5 505 Individual Residence 1DK 40.39 12.22 140,000 10,000 150,000 12,277 140,000 2011/1/27 134,000 10,000 144,000 11,786 6.00% 288,000 5 506 Individual Residence LDK+DEN 40.08 12.12 139,000 10,000 149,000 12,289 139,000 2012/3/21 133,000 10,000 143,000 11,795 6.00% 286,000 5 507 Company Residence LDK+DEN 42.91 12.98 159,000 - 159,000 12,249 318,000 2005/10/24 143,000 10,000 153,000 11,787 6.00% 306,000 6 601 Individual Residence 1LDK(2) 50.25 15.20 171,000 - 171,000 11,250 342,000 2005/9/1 155,000 10,000 165,000 10,855 6.00% 330,000 6 602 Individual Residence 1LDK(1) 40.17 12.15 140,000 10,000 150,000 12,344 140,000 2011/11/24 134,000 10,000 144,000 11,850 6.00% 288,000 6 603 vacant Residence 1DK 41.52 12.56 - - - 138,000 10,000 148,000 11,784 6.00% 296,000 6 604 Individual Residence 1LDK(2) 50.01 15.13 163,000 10,000 173,000 11,436 163,000 2012/1/15 154,000 10,000 164,000 10,841 6.00% 328,000 6 605 Individual Residence 1DK 40.39 12.22 141,000 10,000 151,000 12,359 141,000 2011/5/1 134,000 10,000 144,000 11,786 6.00% 288,000 6 606 Company Residence LDK+DEN 40.08 12.12 140,000 10,000 150,000 12,372 280,000 2012/3/10 133,000 10,000 143,000 11,795 6.00% 286,000 6 607 Individual Residence LDK+DEN 42.91 12.98 147,000 10,000 157,000 12,095 147,000 2011/3/20 143,000 10,000 153,000 11,787 6.00% 306,000 7 701 Company Residence 1LDK(2) 50.25 15.20 165,000 10,000 175,000 11,513 165,000 2012/3/18 157,000 10,000 167,000 10,986 6.00% 334,000 7 702 vacant Residence 1LDK(1) 40.17 12.15 - - - - - 135,000 10,000 145,000 11,933 6.00% 290,000 7 703 Individual Residence 1DK 41.52 12.56 143,000 10,000 153,000 12,182 143,000 2011/6/20 140,000 10,000 150,000 11,943 6.00% 300,000 7 704 Company Residence 1LDK(2) 50.01 15.13 167,000 10,000 177,000 11,700 334,000 2011/2/1 156,000 10,000 166,000 10,973 6.00% 332,000 7 705 Individual Residence 1DK 40.39 12.22 142,000 10,000 152,000 12,441 142,000 2012/1/31 136,000 10,000 146,000 11,950 6.00% 292,000 7 706 Individual Residence LDK+DEN 40.08 12.12 155,000 - 155,000 12,784 310,000 2006/9/16 135,000 10,000 145,000 11,960 6.00% 290,000 7 707 Individual Residence LDK+DEN 42.91 12.98 163,000 - 163,000 12,558 326,000 2006/1/14 144,000 10,000 154,000 11,864 6.00% 308,000 8 801 Individual Residence 1LDK(2) 50.25 15.20 166,000 10,000 176,000 11,578 166,000 2012/3/10 158,000 10,000 168,000 11,052 6.00% 336,000 8 802 Individual Residence 1LDK(1) 40.17 12.15 139,000 10,000 149,000 12,262 139,000 2011/2/1 136,000 10,000 146,000 12,015 6.00% 292,000 8 803 Individual Residence 1DK 41.52 12.56 144,000 10,000 154,000 12,261 144,000 2011/6/19 141,000 10,000 151,000 12,022 6.00% 302,000 8 804 Individual Residence 1LDK(2) 50.01 15.13 165,000 10,000 175,000 11,568 165,000 2011/3/23 157,000 10,000 167,000 11,039 6.00% 334,000 8 805 vacant Residence 1DK 40.39 12.22 - - - - - 137,000 10,000 147,000 12,031 6.00% 294,000 8 806 Company Residence LDK+DEN 40.08 12.12 142,000 10,000 152,000 12,537 568,000 2012/4/4 136,000 10,000 146,000 12,042 6.00% 292,000 8 807 Individual Residence LDK+DEN 42.91 12.98 149,000 10,000 159,000 12,249 149,000 2012/1/15 146,000 10,000 156,000 12,018 6.00% 312,000 9 901 vacant Residence 1LDK(2) 50.25 15.20 - - - - - 160,000 10,000 170,000 11,184 6.00% 340,000 9 902 Individual Residence 1LDK(1) 40.17 12.15 143,000 10,000 153,000 12,591 143,000 2012/6/30 138,000 10,000 148,000 12,180 6.00% 296,000 9 903 Individual Residence 1DK 41.52 12.56 140,000 10,000 150,000 11,943 140,000 2011/12/23 142,000 10,000 152,000 12,102 6.00% 304,000 9 904 Company Residence 1LDK(2) 50.01 15.13 176,000 - 176,000 11,634 176,000 2012/6/30 159,000 10,000 169,000 11,171 6.00% 338,000	Vacancy Deposit	6.00% 314,000	6.00% 274,000	6.00% 282,000	6.00% 314,000	6.00% 276,000	6.00% 274,000	6.00% 292,000	6.00% 324,000	6.00% 282,000	6.00% 290,000	6.00% 322,000	6.00% 284,000	6.00% 282,000	6.00% 300,000	6.00% 326,000	6.00% 284,000	6.00% 294,000	6.00% 326,000	6.00% 286,000	6.00% 284,000	6.00% 302,000	6.00% 330,000	6.00% 288,000	6.00% 296,000	6.00% 328,000	6.00% 288,000	6.00% 286,000	6.00% 306,000	6.00% 330,000	6.00% 288,000	6.00% 296,000	6.00% 328,000	6.00% 288,000	6.00% 286,000	6.00% 306,000	6.00% 334,000	6.00% 290,000	6.00% 300,000	6.00% 332,000	6.00% 292,000	6.00% 290,000	6.00% 308,000	6.00% 336,000	6.00% 292,000	6.00% 302,000	6.00% 334,000	6.00% 294,000	6.00% 292,000	6.00% 312,000	6.00% 340,000	6.00% 296,000	6.00% 304,000	6.00% 338,000
	Rent +CAM per Tsubo	157,000 10,329	137,000 11,274	141,000 11,226	157,000 10,378	138,000 11,295	137,000 11,300	146,000 11,248	162,000 10,657	141,000 11,604	145,000 11,545	161,000 10,642	142,000 11,622	141,000 11,630	150,000 11,556	163,000 10,723	142,000 11,686	147,000 11,704	163,000 10,775	143,000 11,704	142,000 11,712	151,000 11,633	165,000 10,855	144,000 11,850	148,000 11,784	164,000 10,841	144,000 11,786	143,000 11,795	153,000 11,787	165,000 10,855	144,000 11,850	148,000 11,784	164,000 10,841	144,000 11,786	143,000 11,795	153,000 11,787	167,000 10,986	145,000 11,933	150,000 11,943	166,000 10,973	146,000 11,950	145,000 11,960	154,000 11,864	168,000 11,052	146,000 12,015	151,000 12,022	167,000 11,039	147,000 12,031	146,000 12,042	156,000 12,018	170,000 11,184	148,000 12,180	152,000 12,102	169,000 11,171

VALUATION REPORT

APPENDIX II

		Deposit		296,000	294,000	314,000	342,000	298,000	308,000	340,000	300,000	298,000	316,000	346,000	300,000	310,000	344,000	302,000	300,000	320,000	348,000	304,000	312,000	348,000	304,000	302,000	322,000	23,610,000
		Vacancy		6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%	6.00%
		per Tsubo		12,113	12,125	12,095	11,250	12,262	12,261	11,237	12,277	12,289	12,172	11,381	12,344	12,341	11,370	12,359	12,372	12,326	11,447	12,509	12,421	11,502	12,441	12,454	12,403	11,619
	Rent +CAM			148,000	147,000	157,000	171,000	149,000	154,000	170,000	150,000	149,000	158,000	173,000	150,000	155,000	172,000	151,000	150,000	160,000	174,000	152,000	156,000	174,000	152,000	151,000	161,000	11,805,000
		CAM		10,000	10,000	10,000	10,000	10,000	10,000	10,000	10,000	10,000	10,000	10,000	10,000	10,000	10,000	10,000	10,000	10,000	10,000	10,000	10,000	10,000	10,000	10,000	10,000	770,000
Valuation		Rent		138,000	137,000	147,000	161,000	139,000	144,000	160,000	140,000	139,000	148,000	163,000	140,000	145,000	162,000	141,000	140,000	150,000	164,000	142,000	146,000	164,000	142,000	141,000	151,000	11,035,000
		Leased date		2009/12/18	2005/11/1	2008/8/22	2005/7/30	2009/4/15	2006/6/24	2005/12/14		2011/9/10	2011/12/13	2012/6/6	2012/7/29	2011/12/10	2011/3/23	2007/10/13	2009/12/25	2011/1/9	2011/7/1	2012/6/24	2009/10/22	2005/7/27	2010/6/6	2009/12/10	2008/12/13
		Deposit		142,000	318,000	167,000	358,000	348,000	320,000	537,000	-	280,000	151,000	507,000	145,000	294,000	168,000	322,000	146,000	151,000	170,000	292,000	147,000	549,000	146,000	280,000	358,000	16,269,000
		per Tsubo		12,441	13,114	12,866	11,776	14,319	12,739	11,832	-	12,372	12,403	11,776	12,756	12,500	11,766	13,177	12,867	12,403	11,842	12,838	12,500	12,097	12,768	12,372	13,790	12,062
	Rent +CAM			152,000	159,000	167,000	179,000	174,000	160,000	179,000	-	150,000	161,000	179,000	155,000	157,000	178,000	161,000	156,000	161,000	180,000	156,000	157,000	183,000	156,000	150,000	179,000	11,479,000					Deposit	42,000	25,000	25,000	25,000	-	25,000	-	-	25,000	25,000	25,000	25,000	-	42,000	25,000	25,000	38,000		372,000
		CAM		10,000	-	-	-	-	-	-	-	10,000	10,000	10,000	10,000	10,000	10,000	-	10,000	10,000	10,000	10,000	10,000	-	10,000	10,000	-	520,000					Rent per Lot	42,000	25,000	25,000	25,000	-	25,000	-	42,000	25,000	25,000	25,000	25,000	-	42,000	25,000	25,000	38,000	-	29,571
Actual		Rent		142,000	159,000	167,000	179,000	174,000	160,000	179,000	-	140,000	151,000	169,000	145,000	147,000	168,000	161,000	146,000	151,000	170,000	146,000	147,000	183,000	146,000	140,000	179,000	10,959,000					Monthly Rent	42,000	25,000	25,000	25,000	-	25,000	-	42,000	25,000	25,000	25,000	25,000	-	42,000	25,000	25,000	38,000	-	414,000
	Leased Leased	area area	Sqm Tsubo	40.39 12.22	40.08 12.12	42.91 12.98	50.25 15.20	40.17 12.15	41.52 12.56	50.01 15.13	40.39 12.22	40.08 12.12	42.91 12.98	50.25 15.20	40.17 12.15	41.52 12.56	50.01 15.13	40.39 12.22	40.08 12.12	42.91 12.98	50.25 15.20	40.17 12.15	41.52 12.56	50.01 15.13	40.39 12.22	40.08 12.12	42.91 12.98	3,358.63 1,015.99	3,145.91 951.64	212.72 64.35	6.3%		# of Space	1	1	1	1	1	1	1	1	1	1	1	1	1	1	1	1	1	3	17	3	17.6%
		Floor # Tenant Use Type		9 905 Individual Residence 1DK	9 906 Company Residence LDK+DEN	9 907 Company Residence LDK+DEN	10 1001 Individual Residence 1LDK(2)	10 1002 Individual Residence 1LDK(1)	10 1003 Individual Residence 1DK	10 1004 Company Residence 1LDK(2)	10 1005 vacant Residence 1DK	10 1006 Company Residence LDK+DEN	10 1007 Individual Residence LDK+DEN	11 1101 Individual Residence 1LDK(2)	11 1102 Individual Residence 1LDK(1)	11 1103 Company Residence 1DK	11 1104 Individual Residence 1LDK(2)	11 1105 Individual Residence 1DK	11 1106 Individual Residence LDK+DEN	11 1107 Individual Residence LDK+DEN	12 1201 Individual Residence 1LDK(2)	12 1202 Company Residence 1LDK(1)	12 1203 Individual Residence 1DK	12 1204 Individual Residence 1LDK(2)	12 1205 Individual Residence 1DK	12 1206 Company Residence LDK+DEN	12 1207 Individual Residence LDK+DEN	Total 77 units	Occupied Area	Vacant Area	Vacancy Rate	Parking	Tenant	P-1 Individual	P-2 Company	P-3 Company	P-4 Company	P-5 vacant	P-6 Company	P-7 vacant	P-8 Company	P-9 Company	P-10 Company	P-11 Company	P-12 Company	P-13 vacant	P-14 Individual	P-15 Company	P-16 Company	P-17 Company	Vacant Lot	Total Lots	Vacancy	Vacancy Rate

GENERAL INFORMATION

APPENDIX III

1. RESPONSIBILITY STATEMENT

This document, for which the directors of the issuer collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited for the purpose of giving information with regard to the issuer. The directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this document is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this document misleading.

2. DIRECTORS’ INTERESTS AND SHORT POSITIONS IN SHARES

As at the Latest Practicable Date, the interests of the Directors and chief executive of the Company in the shares, underlying shares (within the meaning of Part XV of the Securities and Futures Ordinance (Cap 571 of the Laws of Hong Kong) (the “ SFO ”) or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) which would be required to be: (i) notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests which a Director or chief executive of the Company would be taken or deemed to have under such provisions of the SFO); (ii) entered into the register kept by the Company pursuant to Section 352 of the SFO; or (iii) notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors or Listed Issuer (the “ Model Code ”) are as follows:

Number of ordinary shares (unless otherwise specified)

Long positions:

		Personal	Corporate
Name of Company	Name of Directors	Interests(1)	Interests	Total	% Interest
Keck Seng Investments	Ho Kian Guan	276,480	197,556,320(2)	197,832,800	58.15
(Hong Kong) Limited	Ho Kian Hock	480	197,556,320(2)	197,556,800	58.07
	Ho Kian Cheong	55,160,480	–	55,160,480	16.21
	Tse See Fan Paul	288,720	–	288,720	0.08
	Chan Yau Hing Robin	180,000	720,000(3)	900,000	0.26
	Kwok Chi Shun Arthur	202,000	–	202,000	0.06
Lam Ho Investments	Ho Kian Guan	–	32,410,774(4)	32,410,774	99.70
Pte Ltd	Ho Kian Hock	–	32,410,774(4)	32,410,774	99.70
	Ho Kian Cheong	96,525	–	96,525	0.30
Shun Seng International Ltd	Ho Kian Guan	–	83,052(5)	83,052	83.05
	Ho Kian Hock	–	83,052(5)	83,052	83.05
	Ho Kian Cheong	1,948	–	1,948	1.95
Hubei Qing Chuan Hotel	Ho Kian Guan	–	13,163,880(6)	13,163,880	80.76
Co Ltd – paid in registered	Ho Kian Hock	–	13,163,880(6)	13,163,880	80.76
capital in US$	Ho Kian Cheong	1,017,120	–	1,017,120	6.24
	Kwok Chi Shun Arthur	–	489,000(7)	489,000	3.00

APPENDIX III

GENERAL INFORMATION

		Personal	Corporate
Name of Company	Name of Directors	Interests(1)	Interests	Total	% Interest
Golden Crown Development	Ho Kian Guan	–	56,675,000(8)	56,675,000	80.96
Ltd – common shares	Ho Kian Hock	–	56,675,000(8)	56,675,000	80.96
	Ho Kian Cheong	1,755,000	–	1,755,000	2.51
	Tse See Fan Paul	50,000	–	50,000	0.07
Ocean Gardens Management	Ho Kian Guan	–	100,000(9)	100,000	100.00
Co Ltd	Ho Kian Hock	–	100,000(9)	100,000	100.00
Shun Cheong International	Ho Kian Guan	–	4,305(10)	4,305	43.05
Ltd	Ho Kian Hock	–	4,305(10)	4,305	43.05
	Ho Kian Cheong	195	–	195	1.95
	Kwok Chi Shun Arthur	–	5,500(11)	5,500	55.00
KSF Enterprises Sdn Bhd	Ho Kian Guan	–	9,010,000(12)	9,010,000	100.00
– ordinary shares	Ho Kian Hock	–	9,010,000(12)	9,010,000	100.00
KSF Enterprises Sdn Bhd	Ho Kian Guan	–	24,000,000(13)	24,000,000	100.00
– preferred shares	Ho Kian Hock	–	24,000,000(13)	24,000,000	100.00
Chateau Ottawa Hotel Inc	Ho Kian Guan	–	4,950,000(14)	4,950,000	55.00
– common shares	Ho Kian Hock	–	4,950,000(14)	4,950,000	55.00
Chateau Ottawa Hotel Inc	Ho Kian Guan	–	1,485,000(15)	1,485,000	55.00
– preferred shares	Ho Kian Hock	–	1,485,000(15)	1,485,000	55.00

Notes:

This represents interests held by the relevant directors as beneficial owners.
This represents 100,909,360 shares held by Kansas Holdings Limited and 96,646,960 shares held by Goodland Limited, in which companies each of Ho Kian Guan and Ho Kian Hock had 1/2 interest indirectly. Ho Kian Guan, Ho Kian Hock, Tse See Fan Paul and Chan Lui Ming Ivan are directors of Kansas Holdings Limited and Ho Kian Guan, Ho Kian Hock and Tse See Fan Paul are directors of Goodland Limited.
This represents interests held by United Asia Enterprises Inc controlled by Dr Chan Yau Hing Robin by virtue of the fact that United Asia Enterprises Inc or its directors were accustomed to act in accordance with the directions of Dr Chan.
This represents 29,776,951 shares (91.6%) indirectly held by the Company and 2,633,823 shares (8.1%) held by Goodland Limited in which each of Ho Kian Guan and Ho Kian Hock had 1/2 interest indirectly.
This represents 75,010 shares (75.01%) indirectly held by the Company and 8,042 shares (8.04%) held by Goodland Limited in which each of Ho Kian Guan and Ho Kian Hock had 1/2 interest indirectly.
This represents US$8,965,000 (55%) indirectly contributed by the Company and US$4,198,880 (25.76%) contributed by Goodland Limited in which each of Ho Kian Guan and Ho Kian Hock had 1/2 interest indirectly.
This represents interests held by AKAA Project Management International Limited which was wholly owned by Kwok Chi Shun Arthur.

GENERAL INFORMATION

APPENDIX III

This represents 49,430,000 shares (70.61%) indirectly held by the Company and 7,245,000 shares (10.35%) held by various companies in which each of Ho Kian Guan and Ho Kian Hock had 1/2 interest indirectly.
This represents 1 quota of Ptc99,000 (99%) indirectly held by the Company and 1 quota of Ptc1,000 (1%) held by Goodland Limited in which each of Ho Kian Guan and Ho Kian Hock had 1/2 interest indirectly.
This represents 3,501 shares (35.01%) indirectly held by the Company and 804 shares (8.04%) held by Goodland Limited in which each of Ho Kian Guan and Ho Kian Hock had 1/2 interest indirectly.
This represents interests held by Larcfort Incorporated in which Kwok Chi Shun Arthur had a controlling interest.
This represents 2,252,500 ordinary shares (25%) directly held by the Company, 2,252,499 ordinary shares (25%) held by Goodland Limited in which each of Ho Kian Guan and Ho Kian Hock had 1/2 interest indirectly and 4,505,001 ordinary shares (50%) held by Keck Seng (Malaysia) Bhd in which each of Ho Kian Guan and Ho Kian Hock was a substantial shareholder and a director.
This represents 6,000,000 preferred shares (25%) directly held by the Company, 6,000,000 preferred shares (25%) held by Goodland Limited in which each of Ho Kian Guan and Ho Kian Hock had 1/2 interest indirectly and 12,000,000 preferred shares (50%) held by Keck Seng (Malaysia) Bhd in which each of Ho Kian Guan and Ho Kian Hock was a substantial shareholder and a director.
This represents 4,500,000 common shares (50%) indirectly held by the Company and 450,000 common shares (5%) held by Allied Pacific Investments Inc in which each of Ho Kian Guan and Ho Kian Hock had 1/2 interest indirectly.
This represents 1,350,000 preferred shares (50%) indirectly held by the Company and 135,000 preferred shares (5%) held by Allied Pacific Investments Inc in which each of Ho Kian Guan and Ho Kian Hock had 1/2 interest indirectly.

Save as disclosed in this circular, as at the Latest Practicable Date, none of the Directors or chief executive of the Company had any interest or short position in the shares, underlying shares (within the meaning of Part XV of the SFO) or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which would be required to be (i) notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which a Director or chief executive of the Company would be taken or deemed to have under such provisions of the SFO); (ii) entered in the register kept by the Company pursuant to Section 352 of the SFO; or (iii) notified to the Company and the Stock Exchange pursuant to the Model Code.

3. DIRECTORS’ INTERESTS IN CONTRACTS

As at the Latest Practicable Date, there existed the following arrangements for an indefinite period:

(a) Pursuant to an agreement dated 1 January 1992, Goodland Limited (“ Goodland ”) acts as the project manager of Golden Crown Development Limited for its Ocean Gardens development in Taipa Island, Macau for a management fee and is also responsible for marketing the development.
(b) Pursuant to an agreement dated 1 January 1992, Goodland provides management services to Ocean Incorporation Ltd in return for a management fee.

The management fees with respect to the above arrangements amounted to HK$3,204,000 for the year ended 31 December 2011.

GENERAL INFORMATION

APPENDIX III

Messrs Ho Kian Guan and Ho Kian Hock were interested in the above arrangements as substantial shareholders and directors of Goodland.

4. DIRECTORS’ INTERESTS IN COMPETING BUSINESS

One of the direct competitors of the Group’s hotel in Wuhan, Holiday Inn Wuhan Riverside, is the Shangri-La Hotel, Wuhan whose majority owner and operator is Shangri-La Asia Limited (“ SAL ”).

Mr Ho Kian Guan is a non-executive director of SAL, a company whose shares are listed on the Hong Kong Stock Exchange and Mr Ho Kian Hock is his alternate on the board of SAL.

5. SERVICE CONTRACTS

As at the Latest Practicable Date, there was no existing or proposed service contract between any Director and any member of the Group which is not determinable within one year without payment of compensation other than by statutory compensation.

6. MATERIAL CONTRACTS

Save and except the Sale and Purchase Agreement, details of which are disclosed in the letter from the Board set out in this circular, no contracts, not being contracts entered in the ordinary course of business of the Group, have been entered into by members of the Group within two years immediately preceding the date of this circular and up to and including the Latest Practicable Date which are or may be material.

7. MATERIAL ADVERSE CHANGE

The Company is not aware of any material adverse change in the financial or trading position of the Group since 31 December 2011, being the date to which the latest published audited financial statements of the Company were made up.

8. LITIGATION

A subsidiary of the Group is involved in litigation arising in its hotel and club operation in Vietnam, where a customer claimed for winnings out of a malfunctioning slot machine. The directors are of the opinion that it is too early to evaluate the outcome of the claims and that the amounts cannot be reliably estimated at this point of time.

9. EXPERTS’ QUALIFICATION AND CONSENT

AS Management Inc. has given and has not withdrawn its respective written consent to the issue of this circular with the inclusion of its letter and reference to its name in the form and context in which it appears.

GENERAL INFORMATION

APPENDIX III

The following is the qualification of the expert who has given its opinion or advice which is contained in this circular:

Name Qualification

AS Management Inc. Japanese licensed real estate appraiser

10. DIRECTORS’ AND EXPERTS’ INTERESTS IN GROUP ASSETS

As at the Latest Practicable Date, each of the Directors and AS Management Inc. did not have any direct or indirect interest in any asset which had been acquired, disposed of by, or leased to any member of the Group, or was proposed to be acquired, or disposed of by, or leased to any member of the Group, since 31 December 2011, the date to which the latest audited financial statements of the Group was made up; and was not beneficially interested in the share capital of any member of the Group and did not have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

11. GENERAL

(a) The English text of this circular shall prevail over the Chinese text.
(b) The former company secretary of the Company, Ms YUEN Chiu Yuk, Ida, has ceased serving as the company secretary with effect from 31 August 2012. The Company is in the process of identifying a suitable candidate to take up the position of company secretary and further announcement will be made after confirmation of such appointment.
(c) The registered office of the Company is at Room 2902 West Tower, Shun Tak Centre, 168200 Connaught Road Central, Hong Kong.
(d) The share registrar of the Company is Tricor Tengis Limited of 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.

12. DOCUMENTS FOR INSPECTION

Copies of the following documents will be available for inspection at the principal place of business of the Company in Hong Kong at Room 2902 West Tower, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong during normal business hours on any business day (Saturdays excluded) from the date of this circular up to any including 9 November 2012 (14 days after the date of this circular):

(a) the memorandum and articles of association of the Company;
(b) the annual reports of the Company for each of the two years ended 31 December 2011;
(c) the valuation report issued by AS Management Inc. on the Properties as set out in Appendix II to this circular;

GENERAL INFORMATION

APPENDIX III

(d) the written consents referred to in the paragraph headed “Experts’ Qualification and Consent” in this Appendix;
(e) the Sale and Purchase Agreement; and
(f) this circular.

AI assistant

Alco Holdings Limited — Proxy Solicitation & Information Statement 2012

49130_rns_2012-10-25_eb8893b3-5d3c-44bd-9243-00cdd688cf6f.pdf

KECK SENG INVESTMENTS (HONG KONG) LIMITED 激成投資（香港）有限公司

MAJOR TRANSACTION

DISPOSAL OF PROPERTIES

CONTENTS

DEFINITIONS

KECK SENG INVESTMENTS (HONG KONG) LIMITED 激成投資（香港）有限公司

MAJOR TRANSACTION

DISPOSAL OF PROPERTIES IN JAPAN

INTRODUCTION

THE SALE AND PURCHASE AGREEMENT

Date

Parties

Subject assets

LETTER FROM THE BOARD

Consideration

Completion

INFORMATION ON THE GROUP AND KSJ ONE

LETTER FROM THE BOARD

REASON FOR AND THE BENEFITS OF THE DISPOSAL

POSSIBLE FINANCIAL EFFECTS OF THE DISPOSAL

USE OF PROCEEDS

LISTING RULES IMPLICATION

LETTER FROM THE BOARD

FURTHER INFORMATION

1. INDEBTEDNESS

Borrowings

Commitments

Banking facilities

Contingent liabilities

Disclaimer

2. WORKING CAPITAL

3. FINANCIAL AND TRADING PROSPECTS

The Directors

SUMMARY OF VALUES

Property

VALUATION CERTIFICATE

Nature on the Assignment

Purpose

Opinion of Value ¥2,640,000,000

1. Land

2. Building

■ Property Description and Appliance of Valuation Method

■ Market Condition around the Subject Property

■ Other Conditions

■ Analysis of Discount Rate, Cap Rate and Terminal Cap Rate

Discount Rate

Cap Rate

■ Determination of Discount Rate, Cap Rate and Terminal Cap Rate

APPENDIX II

■ Operating Performance

■ Direct Capitalization Method

Rent assumption

APPENDIX II

■ Value indicated by the Direct Capitalization Method

APPENDIX II

VALUATION REPORT

APPENDIX II

VALUATION REPORT

APPENDIX II

VALUATION REPORT

■ Correlation and Final Estimate of Value

■ Reconciliation of the Indicated Value and Determination of the Value

APPENDIX II

APPENDIX II

The Directors

SUMMARY OF VALUES

Property

Property held by the Group as an investment

VALUATION CERTIFICATE

Nature on the Assignment

Purpose

Property Rights Valued

Date of Report

Information Utilized

Opinion of Value ¥2,140,000,000

1. Land

2. Building

Alco Holdings Limited Proxy Solicitation & Information Statement 2012