NEWS RELEASE
Feb 02, 2016

R&I Affirms AA, Stable: Japan Real Estate Investment Corp.
Rating and Investment Information, Inc. (R&I) has announced the following:
ISSUER:

Japan Real Estate Investment Corp.
Issuer Rating: AA, Affirmed
Rating Outlook: Stable

RATIONALE:
Japan Real Estate Investment Corp. (JRE) is a real estate investment trust (J-REIT) that was listed inSeptember 2001. It specializes in investments in office buildings. Two companies, Mitsubishi Estate Co.,
Ltd. and Mitsui & Co., Ltd., are its sponsors.
JRE has created a quality portfolio through investments in competitive large buildings mainly located incentral Tokyo. Properties located in the central three wards of Tokyo account for the majority of its
portfolio on an acquisition value basis. The REIT has a number of prime buildings such as Shiodome
Building, Kitanomaru Square, and Akasaka Park Building.
In 2015, JRE additionally acquired compartmentalized ownership of Shiodome Building and acquiredlarge buildings at good locations in Osaka and Sendai externally. With an asset size exceeding 920 billion
yen on an acquisition value basis, JRE maintains a business base with the top-class strength in the JREIT industry.
The occupancy rate of its properties is trending at a high level of above 97%, and the level of contract
rents is increasing, albeit modestly. Given this, along with an upward trend in the market rent level, rent
revenues are expected to recover gradually going forward.
JRE's LTV ratio remains low, standing at 41.5% as of September 2015. The REIT has set it LTV target
at a very conservative level of 30-40%. Supported by these factors, as well as by good access to thecapital markets, the financial profile will likely continue to be sound. Thanks to improvements in theappraisal value, among other reasons, unrealized gains have expanded to over 100 billion yen.
The funding base is extremely solid. Debts are mostly long-term fixed-interest rate borrowings, and theaverage remaining term to maturity is as long as about 4 years (as of September 2015), with due dates
staggered sufficiently. Thanks to favorable relationships with major domestic financial institutions, JRE
receives better loan terms than other REITs. Having increased committed lines of credit to 50 billion yen,
the REIT ensures sufficient liquidity.
The Rating Outlook is Stable. Since JRE owns a number of large buildings in central Tokyo, the quality
and size of its portfolio is sufficient. The occupancy rate has been high, and the rent level is expected torecover gradually going forward. The REIT's conservative leverage management policy and highfundraising ability as well as its strong business base will likely underpin the current high rating.
The primary rating methodology applied to this rating is provided at "Rating Methodology for J-REIT".
The methodology is available at the web site listed below, together with other rating methodologies thatare taken into consideration when assigning the rating.
http://www.r-i.co.jp/eng/cfp/about/methodology/index.html■Contact: Investors Service Division
TEL.+81-(0)3-3276-3511■Media Contact : Corporate Planning Division (Public Relations) TEL.+81-(0)3-3276-3438

Rating and Investment Information, Inc.

E-mail. infodept@r-i.co.jp

Nihonbashi 1-chome Mitsui Bldg., 1-4-1, Nihonbashi, Chuo-ku, Tokyo 103-0027,

http://www.r-i.co.jp

Credit ratings are R&I's opinions on an issuer's general capacity to fulfill its financial obligations and the certainty of the fulfillment of its individual obligations as promised (creditworthiness) and are notstatements of fact. Further, R&I does not state its opinions about any risks other than credit risk, give advice regarding investment decisions or financial matters, or endorse the merits of any investment.
R&I does not undertake any independent verification of the accuracy or other aspects of the related information when issuing a credit rating and makes no related representations or warranties. R&I is notliable in any way for any damage arising in relation to credit ratings (including amendment or withdrawal thereof). As a general rule, R&I issues a credit rating for a fee paid by the issuer. For details,
please refer to http://www.r-i.co.jp/eng/policy/policy.html.
© Rating and Investment Information, Inc.

NEWS RELEASE
R&I RATINGS:ISSUER:RATING:

Japan Real Estate Investment Corp. (Sec. Code: 8952)
Issuer Rating
AA, Affirmed

RATING OUTLOOK:

StableUnsec. Str. Bonds No.4

Issue Date

Maturity Date

Issue Amount (mn)Sep 29, 2005

Sep 29, 2025

JPY 10,000

RATING:AA, Affirmed

Unsec. Str. Bonds No.9Issue Date

Maturity Date

Issue Amount (mn)

Aug 30, 2013

Aug 30, 2018

JPY 10,000■Contact: Investors Service Division
TEL.+81-(0)3-3276-3511■Media Contact : Corporate Planning Division (Public Relations) TEL.+81-(0)3-3276-3438

E-mail. infodept@r-i.co.jp

RATING:AA, Affirmed

Rating and Investment Information, Inc.

Nihonbashi 1-chome Mitsui Bldg., 1-4-1, Nihonbashi, Chuo-ku, Tokyo 103-0027,

http://www.r-i.co.jpCredit ratings are R&I's opinions on an issuer's general capacity to fulfill its financial obligations and the certainty of the fulfillment of its individual obligations as promised (creditworthiness) and are notstatements of fact. Further, R&I does not state its opinions about any risks other than credit risk, give advice regarding investment decisions or financial matters, or endorse the merits of any investment.
R&I does not undertake any independent verification of the accuracy or other aspects of the related information when issuing a credit rating and makes no related representations or warranties. R&I is notliable in any way for any damage arising in relation to credit ratings (including amendment or withdrawal thereof). As a general rule, R&I issues a credit rating for a fee paid by the issuer. For details,
please refer to http://www.r-i.co.jp/eng/policy/policy.html.
© Rating and Investment Information, Inc.