Twelfth Fiscal Period
May 1, 2009

October 31, 2009▲

Semi-Annual ReportWebsite
ProfileNomura Office Fund’s Website

Nomura Real Estate Office Fund, Inc. (referred to as“ Nomura Office Fund” or
the “ Company” hereafter) was listed on the Tok yo Stock Exchange on
December 4, 2003 as a real estate investment corporation formed to own andinvest in office properties, subject to the Law Concerning Investment Trusts
and Investment Corporations of Japan. The Company’s basic investment
policy is to assure stable rent revenues and steady portfolio growth over the
medium- to long-term.
Nomura Real Estate Asset Management Co., Ltd. (referred to as“NREAM”
hereafter), a wholly owned subsidiary of Nomura Real Estate Holdings, Inc. isin charge of asset management on behalf of Nomura Office Fund inaccordance with the basic investment policy as described above. Throughcoordination with Nomura Real Estate Holdings, Inc. and other groupcompanies, NREAM aims to achieve these goals and more.

The Company strives to provide accurate and timely disclosure of
information by utilizing the website.
Strength of NOF, Asset Management Policies, Corporate Profile
Portfolio Summary, Portfolio Data, Occupancy Rates, Major Tenents
News, Latest Data, Performance, Distributions, Calendar
We continue to provide information timely and strive to enhance thecontents of the website.
(English) http://www.nre-of.co.jp/english/(Japanese) http://www.nre-of.co.jp/

Contents
Posting the news by year andsubject

To Our Investors ......................................................................................................2
Highlights of the Twelfth Fiscal Period ...................................................................3
Management Summary of the Twelfth Fiscal Period ...........................................4
Portfolio Highlights .................................................................................................6
Financial Status of the Twelfth Fiscal Period .........................................................8
Summary of Portfolio Properties .........................................................................10
Major Properties ....................................................................................................12

Posting the latest information on the top page
*RSS compatible

Profile of the Asset Management Company .......................................................16
Performance Report ..............................................................................................17
Financial Section ...................................................................................................35

Posting summaries, maps, occupancy rates,
etc., of the portfolio

Posting the latest fund data

Business Structure/Corporate Data .....................................................................48
Website....................................................................................................Back CoverDisclaimer

This semiannual report includes translations of certain Japanese documents originally filed under the Securities and Exchange Law ofJapan. This report was prepared in English solely for the convenience of and reference by readers outside Japan and should not be
considered as a disclosure statement. The original Japanese documents always govern the meaning and interpretation.
In general, accounting principles and practices used by real estate investment corporations in Japan (”J-REITs”) in preparing its
financial statements conform with accounting principles generally accepted in Japan (”Japanese GAAP”). However, they may differ
from generally accepted accounting principles applied in certain other countries. Potential investors should consult their own
professional advisors for an understanding of the differences between Japanese GAAP and generally accepted accounting principles
in the United States (”U.S. GAAP”) or other jurisdictions and how those differences might affect the financial information contained
herein.
Estimates for Nomura Office Fund’s future operating results contained in this semiannual report are forward-looking statements andare based on information currently available to Nomura Office Fund and its asset management company and are subject to risks anduncertainties. Consequently, these projections should not be relied upon as the sole basis for evaluating Nomura Office Fund. Actual
results may differ substantially from the projections depending on a number of factors.

Printed in Japan

Highlights of the Twelfth Fiscal Period

To Our Investors

Twelfth period results

Dear Investors,
We are delighted to be able to present to you the financial results for the twelfth fiscal period

Cash distribution per unit¥

Portfolio

17,496

50 properties

Number of properties(ended October 31, 2009) and report on our activities during the period herein.
We booked operating revenues for this period of ¥14,203 million, current profits of ¥5,339 million,
and net income of ¥5,338 million. Cash distribution per unit was ¥17,496.

Operating revenues¥

14,203 million

435,901.82m²

Total leasable
floor space

The economic environment remained uncertain during this fiscal period, and we actively
participated in attracting tenants in order to maintain the average occupancy rate. The Company
maintained stable fund operation, with the average occupancy rate at the end of the twelfth fiscal

Operating profits¥

7,138 million

Total number of tenants

Net income¥

5,338 million

Total acquisition
price

666

period of 95.4%.
In terms of financing, the Company has maintained good relationship with financial institutions
and secured stable funding, and continues to enjoy a healthy balance sheet.

¥

374,557million

To satisfy our investors’ needs for high quality asset building, we will continue to make stable
investments with mid- to long-term vision in the future.

5.5 %Average occupancy rate

95.4%

Ratio of long-term debts

85.8%

Average remaining duration of
long-term fixed debts

4.1years

Ratio of fixed- rate debts

89.3%

Weighted average of interest
rate of all the debts

1.70 %NOI return of portfolio

Lastly, we would like to thank you again for your patronage in the past periods, and would like to
ask for your continued support for the years to come.

Finance

CHANGES IN UNIT PRICE AND MARKET CAPITALIZATION
Unit Price (¥)

Market Capitalization (¥ mln)
900,000

1,600,000

750,000

1,400,000
Market capitalization (as of Oct. 30, 2009).......................¥ 172,394 mln
All-time high price ............................................................¥1,560,000 per unit
All-time low price .............................................................¥ 407,000 per unit

Yuichi Maruko
Executive Director
Nomura Real Estate Office Fund, Inc.

1,200,000

600,000

1,000,000

450,000

800,000

300,000

400,000
Dec. 42003

2

2nd public offering¥588,000

600,000

4th public offering¥926,100

3rd public offering¥740,782

150,000
5th public offering¥756,560

Initial public offering¥500,000
Apr. 30
2004

Oct. 292004

0Apr. 282005

Oct. 312005

Apr. 28
2006

Oct. 312006

Apr. 272007

Oct. 312007

Apr. 30
2008

Oct. 312008

Apr. 30
2009

Oct. 30
2009

3

Management Summary of the Twelfth Fiscal Period

Utilized Ability ofAsset Management

ENHANCE PROFITABILITY THROUGH COST REDUCTION
The Company actively pursued reduction of ratio of building management costs to enhance the portfolio

Nomura Office Fund has maintained stable profits, through securing profits by utilizing
the know-how of the Nomura Real Estate Group to attract tenants and reduce asset
management expenses.

profitability through expansion of asset base and active reduction in various building management costs.

Ratio of Building Management Costs against Rental Revenues (Building management costs + Utility expenses/Rental business revenues)
(%)
25

20.0%

20

ACTIVE LEASING RECOVERS OCCUPANCY RATE
Example

23.8%
19.1%

18.8%

18.4%

17.4%

15

NOF Shin-Yokohama Building

A large tenant in NOF Shin-Yokohama Building cancelled its lease agreement in November 2008.
The Company engaged in strategic leasing activities including enhancement of the appeal of the building by

10
5

various renovations; open inspections in cooperation with the property management company and realestate agent; and advertisements targeting a wide range of prospective tenants. As a result, the occupancy
rate has returned to over 90%.

0Dec. 2003-Oct. 2004
(1st Period · 2nd Period)-Oct. 2005
(3rd Period · 4th Period)-Oct. 2006
(5th Period · 6th Period)-Oct. 2007
(7th Period · 8th Period)-Oct. 2008
(9th Period · 10th Period)-Oct. 2009
(11th Period · 12th Period)● Cost reduction plans for the building management costs … Improved efficiency of the property management company and the contents of theentrustment building management work, took advantages of economies of scale andincreased efficiency due to management commission of multiple buildings

Occupancy rate and renovations of NOF Shin-Yokohama Building● Cost reduction plans for the utility expenses … Changed the electric companies, replaced the normal lighting equipment to energy-saving lighting
equipment, installed energy-saving equipment at the time of renovations of large-scale facilities such as
elevators, etc.

(%)
100
90
80
70

July 2009
Renovation of the common areas of
the 5th, 6th, 8th, and 9th floor

November 200860

Evacuation of thelarge tenant

50

January 2009
Renovation of the entrance halls of the groundand 4th floor and the smoking room

40

Jan. 2009

Renovation of the entrance hall

Beforeprestigious Good Design Award 2009, sponsored by the Japan

4

Apr. 2009(End of 11th period)

Jul. 2009

Oct. 2009(End of 12th period)

Renovation of the common area

BeforeAfter

PMO-Series receives
the “Good Design Award 2009”

The PMO-Series, including ”PMO Nihonbashi Honcho” received the30
Oct. 2008(End of 10th period)

GOOD
DESIGN

After

Industrial Design Production Organization, for the Office, Retail and
Production Facilities Category.
”PMO (Premium MidSize Office)” isdeveloped by Nomura Real Estate
Development in response to thecustomers’ wishes to ”lease a compact
office building that has the qualities of alarge office building.”
PMO Nihonbashi Honcho, owned by theCompany, has been appreciated by thetenants for providing comfortable officespace with sophisticated designs andvarious facilities.
(Occupancy rate at the end of thetwelfth fiscal period: 100%)〈PMO Nihonbashi Honcho (interior)〉
Ground floor entrance area with indirect
lighting and complemented with aroma air
conditioning.

〈PMO Nihonbashi Honcho (exterior)〉
A sophisticated design that blends into thesurrounding area.

5Portfolio Highlights

Ongoing Portfolio Growth

CHANGES IN OCCUPANCY RATE (AVERAGE)

Nomura Office Fund has invested in properties focusing on the geographic diversificationand diversification within each property in order to reduce risk of income fluctuation.
The average occupancy rate at the end of the twelfth fiscal period: 95.4%.

The average occupancy rate maintained stable and high level throughout the twelfth fiscal period.
Average occupancy rate (%)

100.0

Total leasable space (000m2)

96.4

96.1

95.5

95.3

95.6

94.9

95.4

500

436

436

436

436

436

435

435

450

90.0

400

80.0

350

70.0
Apr. 30,
2009(End of 11th Period)

CHANGES IN SIZE OF PORTFOLIO
As indicated below, diversification of the portfolio, which has steadily increased since listing.
50 bldgs(¥bln)

500

46 bldgs

400
19 bldgs

300
12 bldgs

200

104.2

15 bldgs

127.2

18 bldgs

151.5

184.6

23 bldgs

210.1

28 bldgs

240.8

30 bldgs

259.1

31 bldgs

282.8

34 bldgs

292.4

50 bldgs

362.2

374.5

DIVERSIFICATION BY AREA AND PROPERTY
The area and property diversification as of the end of the twelfth period are as follows.
Property Diversification (Top 10 Properties and other)

Other Cities
26.8%

Central Tokyo
58.5%

Other 40 Bldg.
47.7%

Suburban Tokyo
14.7%
Note: Central Tokyo--- Six central wards consisting of Chiyoda, Chuo, Minato, Shinjuku,
Shinagawa and Shibuya
Suburban Tokyo --- Other areas of Tokyo, Kanagawa, Saitama and Chiba
Other Cities--- Major regional cities in other areas
Note: Based on the acquisition price6

NOF Shiba Bldg.
2.7%
Secom Medical Bldg.
3.1%
NOF Shibuya Koen-dori Bldg.
3.2%

Aug. 31,2009

Sep. 30,
2009

Oct. 31,2009(End of 12th Period)

MAJOR TENANTS

Shinjuku Nomura Bldg.
10.3%
JAL Bldg.
8.8%
Omron Kyoto
Center Bldg.
6.3%
NOF Nihonbashi
Honcho Bldg.
5.5%
SORA Shin-Osaka 21
5.1%
Tennozu Park Side Bldg.
4.0%
Shinjuku Sanshin Bldg.
3.3%

Property

Expiry ofcontract

Leasedspace(m²)

Weight in
portfolio (%)

Real Estate

JAL Bldg.

Mar. 31, 2015

42,084.11

10.1

Electronic Devices

Omron Kyoto Center Bldg.
NOF Toyo-cho Bldg.
NOF Tenjin-Minami Bldg.
Secom Medical Bldg.
NOF Sendai Aoba-dori Bldg.
JCB Sapporo Higashi Bldg.
Shinjuku Nomura Bldg.
NOF Utsunomiya Bldg.
NRE Yotsubashi Bldg.
NRE Hiroshima Bldg.
Shinjuku Nomura Bldg.
NRE Osaka Bldg.
NRE Yotsubashi Bldg.
NOF Technoport Kamata Center Bldg.
Faret Tachikawa Center Square
NOF Shin-Yokohama Bldg.
Shinjuku Nomura Bldg.
NRE Hiroshima Bldg.
NOF Surugadai Plaza Bldg.

Mar. 29, 2021
Nov. 30, 2014
Mar. 31, 2013
Feb. 28, 2025
Dec. 31, 2010
Feb. 7, 2018
May 31, 2011
Dec. 31, 2009
Nov. 30, 2009
Mar. 31, 2011
Nov. 30, 2013
Nov. 30, 2013
Nov. 30, 2013
Jul. 31, 2011
Dec. 31, 2009
Sep. 30, 2010
May.31, 2011
Feb. 28, 2010
Mar. 31, 2013

34,616.84
18,218.17
737.028,821.24
755.699,062.04
574.111,140.85
1,847.63
2,834.48
4,594.06
345.37
1,266.19
3,813.62
255.15
1,293.78
4,065.64
283.02
4,160.94
140,769.95

8.3
4.4
0.2
2.1
0.2
2.2
0.1
0.3
0.4
0.7
1.1
0.1
0.3
0.9
0.1
0.3
1.0
0.1
1.0
33.9

TenantIndustry2

Flagship Properties
Private Company
OMRON Corporation

3

XYMAX AXISCORPORATIONReal Estate

4

SECOM Co., Ltd.

Services

5

JCB Co., Ltd.

Financing

6

Nomura Facilities Co., Ltd.

Real Estate

7

Nomura Real Estate
Development Co., Ltd.

Real Estate

8

FUJITSU LIMITEDElectronic Devices

9

SOMPO JAPAN
INSURANCE INC.

Insurance

10

KYORIN Co., Ltd.
Total

Wholesale1

Initial Listing 1st Period 2nd Period 3rd Period 4th Period 5th Period 6th Period 7th Period 8th Period 9th Period 10th Period 11th Period 12th Period
Dec. 2003 Apr. 30, 2004 Oct. 31, 2004 Apr. 30, 2005 Oct. 31, 2005 Apr. 30, 2006 Oct. 31, 2006 Apr. 30, 2007 Oct. 31, 2007 Apr. 30, 2008 Oct. 31, 2008 Apr. 30, 2009 Oct. 31, 2009

Area Diversification

Jul. 31,
2009

374.5

100

0

Jun. 30,2009

Top 10 tenants in the leased space as of the end of the twelfth period are as follows.

37 bldgs

317.4

May. 31,2009

DIVERSIFICATION IN TENANTS’ BUSINESSThe ratio of diversification in tenants’ business by space as of the end of the twelfth period is as follows.

Total
666
Tenants

1. Services

19.1%

7. Retail

4.1%

2. IT

15.9%

8. Insurance

3.6%

3. Electronics

12.7%

9. Financing

3.2%

4. Airline

10.7%

10. Other (Public Administration, etc.)

2.4%

5. Wholesale

8.5%

11. Other 18 Businesses

15.5%

6. Real Estate

4.4%

7

Financial Status of the Twelfth Fiscal Period

Carried Out Steady Refinancing
Nomura Office Fund has the basic financial policy for the purpose of securing financial
stability and avoiding future interest rate risks. In this period, the Company completed therefinancing of ¥24.8 billion and outstanding interest-bearing debts as of the end of thetwelfth fiscal period is ¥188.7 billion.

DIVERSITY OF REPAYMENT DATES (as of the end of the Twelfth fiscal period)(¥ bln)

30

27.75

Debts

25
20

20.25
19.25
17.68

18.25

16.25

15

THE RATIO OF LONG- AND SHORT-TERM DEBT AND
FIXED- AND FLOATING-RATE DEBT (as of the end of the Twelfth fiscal period)

11.75
9.05

10

10.25
8.25 8.25
6.75
5

5

0.25

0.25

0
15th

13rd

Ratio of long-term and short-term interest-bearing debts(Apr. 2010) (Apr. 2011)

Ratio of fixed and floating interest-bearing debts

Short-term¥26.7 billion

10.7%

Long-term¥162.0 billon

Fixed-rate¥168.5 billon

85.8%

89.3%

17th

19th

21st

(Apr. 2013)

23rd(Apr. 2015)

25th

27th

(Apr. 2017)

29th

33rd

(Apr. 2020)

35th

37th

39th

41st

Average debt rates

43rd

45th

47th

(%)

(year)

5

3.8

4

4.4
3.3

3.9

3

LIST OF LENDERS

2The number of lenders as of the end of the twelfth period is 29 financial institutions.

1

LenderTotal Amountof Debt
Remaining

LenderTotal Amountof Debt
Remaining

Bank of Tokyo-Mitsubishi UFJ

25,450Norinchukin Bank

3,000

Hyakujushi Bank

1,500

Sumitomo Mitsui Banking Corp.

23,550

Taiyo Life Insurance

3,000

Keiyo Bank

1,000

Development Bank of Japan

16,000Chuo Mitsui Trust and Banking

3,000

Chugoku Bank

1,000

Mitsubishi UFJ Trust and Banking Corp.

12,100Mitsui Life Insurance

2,000Bank of Fukuoka

1,000

Sumitomo Trust & Banking Corp.

11,530Daido Life Insurance

2,000

Mitsui Sumitomo Insurance

1,000

Mizuho Corporate Bank

7,100

Hachijuni Bank

2,000

Sompo Japan Insurance Inc.

1,000

Dai-Ichi Mutual Life Insurance

5,000

National Mutual Insurance Federation ofAgricultual Cooperatives

2,000

Tokio Marine & Nichido Fire Insurance

1,000

Sumitomo Life Insurance Company

5,000

Chiba Bank

1,500

Nippon Life Insurance Company

1,000

Nomura Trust and Banking

4,000

Hiroshima Bank

1,500

The 77 Bank

1,000

Iyo Bank

3,500

Yamanashi Chuo Bank

1,500

Total borrowings

144,230

Investment Corporation Bonds

44,500(Reference)

Total Amountof Debt
Remaining

3.5

6.0
5.1

6

Note:“Fixed" includes floating-rate debts
with fixed-rates through interest-rate
swap transactions.

Lender49th(period)(Apr. 2028)

Average remaining duration of debts

7Note:“Short-term” includes long-term debts
to be repaid within one year.

31st

CHANGES IN AVERAGE DURATION OF LONG-TERM FIXED-RATE DEBTS
AND AVERAGE COST OF ALL DEBTS

Floating-rate¥20.2 billion

14.2%

8

4.5

5

The Company has secured financial stability through promotion of long-term, fixed-rate interest-bearing debt
to prepare for the future interest rate hikes.

Investment Corporation Bonds

1.00

1.10

1.10

1.10

5.5

5.4

4.6

4.9

3.0

4.5

4.1

2.5
2.0

1.30

1.40

1.65

1.63

1.56

1.68

1.68

1.70

1.5
1.0
0.5
0.0

0
Apr. 2004 Oct. 2004 Apr. 2005 Oct. 2005 Apr. 2006 Oct. 2006 Apr. 2007 Oct. 2007 Apr. 2008 Oct. 2008 Apr. 2009 Oct. 2009(End of 12th Period)

CREDIT RATINGS
Rating Company

RatingOutlookRating and Investment Information, Inc.

AA-: Issuer rating

StableStandard & Poor’s Ratings Services

A: Long-term corporate credit rating

Negative

Moody’s Investors Service, Inc.

A2: Issuer rating

Negative9Summary of Portfolio Properties

MAP
No.

JR Chuo Line
Shinjuku-ku

01
09

Shinjuku

21

05

23
07

Shibuya-ku

06
10

ShibuyaLine

12

Chiyoda-ku
Tokyo

11

37
36 38

18JR Sobu

14

Sapporo15 03 16
20 17

Chuo-ku

Leasable Floor
Space (m2)Date Acquired

Acquisition Price(¥mln)

Ratio(%)

Central Kyobashi Building

Chuo-ku, Tokyo

1,720.05

Jun. 25, 2008

2,550

0.7

21

NOF Minami Shinjuku Building

Shibuya-ku, Tokyo

2,464.71

Jun. 25, 2004

2,280

0.6

22

Central Shintomicho Building

Chuo-ku, Tokyo

2,467.14

Jun. 25, 2008

1,750

0.5

23

Sunworld Yotsuya Building

Shinjuku-ku, Tokyo

2,367.51

Jun. 25, 2008

Total Central Tokyo (23 Properties)

193,965.01

778

0.2

219,208

58.5

Minato-ku

JR Y

S u b u r b a n To k y o

am

08

ano
in
te L
e

Shinagawa

13 04
02

39

Shinagawa-ku

Sendai40 Utsunomiya
TokyoShin-Osaka
Hiroshima
Fukuoka

50

49

48

41

43 42

Nagoya

31

45

46

27

Shin-Yokohama

Kyoto

47

SaitamaTachikawa

44

Hachioji

29

Kanagawa

Name of Property

Location

Leasable Floor
Space (m2)

25

28

33
35

Chiba

24

Tokyo

30 Kichijoji

34

Shinkiba

26
Kawasaki

32

24

NRE Ueno Building

Taito-ku, Tokyo

4,873.20

Jan. 14, 2009

7,830

2.1

25

NOF Toyo-cho Building

Koto-ku, Tokyo

18,218.17

Dec. 5, 2003

7,550

2.0

26

NOF Technoport Kamata Center Building

Ota-ku, Tokyo

13,652.45

Dec. 5, 2003

6,416

1.7

27

Toho Edogawabashi Building

Bunkyo-ku, Tokyo

2,058.97

Mar. 28, 2008

2,080

0.6

28

Toshin Meguro Building

Meguro-ku, Tokyo

1,610.07

Jun. 25, 2008

1,340

0.4

29

Crystal Park Building

Musashino City, Tokyo

3,900.85

Feb. 28, 2006

3,700

1.0

30

Kichijoji Mark Building

Musashino City, Tokyo

1,936.40

Jan. 14, 2009

1,800

0.5

31

Faret Tachikawa Center Square

Tachikawa City, Tokyo

6,852.96

Dec. 5, 2003

3,290

0.9

32

NOF Kawasaki Higashiguchi Building

Kawasaki City, Kanagawa

8,266.67

Jun. 30, 2005

9,500

2.5

33

NOF Yokohama Nishiguchi Building

Yokohama City, Kanagawa

6,817.76

May 12, 2005

5,050

1.3

34

NOF Shin-Yokohama Building

Yokohama City, Kanagawa

8,074.83

Dec. 5, 2003

3,600

1.0

35

Yokohama Odori Koen Building

Yokohama City, Kanagawa

4,235.42

Sep. 28, 2007

2,993

0.8

55,149

14.7

Total Suburban Tokyo (12 Properties)

Yokohama

80,497.75

Other Cities

Acquisition Price
Date Acquired(¥mln)Ratio(%)

C e n t r a l To k y o

10Location

20

22

19

MAP
No.

Name of Property

01

Shinjuku Nomura Building

Shinjuku-ku, Tokyo

31,500.89

Dec. 8, 2003

38,730

10.3

02

JAL Building

Shinagawa-ku, Tokyo

42,084.11

Mar. 18, 2005

33,0808.8

03

NOF Nihonbashi Honcho Building

Chuo-ku, Tokyo

19,156.01

Dec. 5, 2003

20,6005.5

04

Tennozu Park Side Building

Shinagawa-ku,Tokyo

18,051.60

Feb. 27, 2004

14,8004.0

05

Shinjuku Sanshin Building

Shibuya-ku, Tokyo

6,685.52

Jun. 25, 2008

12,300

3.3

06

NOF Shibuya Koen-dori Building

Shibuya-ku, Tokyo

3,420.16

Sep. 28, 2004

12,0003.2

07

Secom Medical Building

Chiyoda-ku, Tokyo

8,821.24

Sep. 1, 2006

11,500

3.1

08

NOF Shiba Building

Minato-ku, Tokyo

8,165.10

May 25, 2004

10,0002.7

09Nishi-Shinjuku Showa Building

Shinjuku-ku, Tokyo

5,665.62

Nov. 30, 2005

8,800

2.3

10

NRE Shibuya Dogenzaka Building

Shibuya-ku, Tokyo

3,436.67

Sep. 26, 2008

7,660

2.0

11

NOF Tameike Building

Minato-ku, Tokyo

4,715.20

Sep. 29, 2005

7,400

2.0

12

Iwamoto-cho Toyo Building

Chiyoda-ku, Tokyo

4,117.26

Jun. 25, 2008

6,020

1.6

13

NOF Shinagawa Konan Building

Shinagawa-ku, Tokyo

7,667.55

Dec. 8, 2003

5,500

1.5

14

NOF Surugadai Plaza Building

Chiyoda-ku, Tokyo

4,160.94

Feb. 27, 2004

5,150

1.4

15

PMO Nihonbashi Honcho

Chuo-ku, Tokyo

2,450.06

Nov. 5, 2008

5,000

1.3

16

NRE Higashi-nihonbashi Building

Chuo-ku, Tokyo

4,554.98

Jan. 14, 2009

4,060

1.1

17

Hatchobori NF Building

Chuo-ku, Tokyo

2,854.83

Aug. 10,2007

3,160

0.8

18

NOF Kanda Iwamoto-cho Building

Chiyoda-ku, Tokyo

4,076.38

Feb. 26, 2004

3,080

0.8

19

MY Higashi Gotanda Building

Shinagawa-ku, Tokyo

3,361.48

Feb. 27, 2009

3,010

0.8

36

Sapporo North Plaza

Sapporo City, Hokkaido

13,624.12

Jun. 1, 2006

6,820

1.8

37

NRE Sapporo Building

Sapporo City, Hokkaido

6,559.34

Nov. 5, 2008

5,300

1.4

38

JCB Sapporo Higashi Building

Sapporo City, Hokkaido

9,062.04

Feb. 8, 2008

3,700

1.0

39

NOF Sendai Aoba-dori Building

Sendai City, Miyagi

6,154.45

Nov. 30, 2005

3,200

0.9

40

NOF Utsunomiya Building

Utsunomiya City, Tochigi

5,887.40

Dec. 5, 2003

2,970

0.8

41

NOF Nagoya Yanagibashi Building

Nagoya City, Aichi

4,655.74

Sep. 29, 2005

3,550

0.9

42

Omron Kyoto Center Building

Kyoto City, Kyoto

34,616.84

Mar. 20, 2007

23,700

6.3

43

SORA Shin-Osaka 21

Osaka City, Osaka

21,462.47

Apr. 25, 2008

19,251

5.1

44

NRE Osaka Building

Osaka City, Osaka

16,977.79

Dec. 5, 2003

6,410

1.7

45

NRE Nishi-Umeda Building

Osaka City, Osaka

5,213.02

Sep. 26, 2008

5,660

1.5

46

NRE Yotsubashi Building

Osaka City, Osaka

11,558.68

Dec. 5, 2003

3,940

1.1

47

NOF Kobe Kaigan Building

Kobe City, Hyogo

6,425.16

Dec. 5, 2003

3,280

0.9

48

NRE Hiroshima Building

Hiroshima City, Hiroshima

7,903.22

Dec. 5, 2003

1,930

0.5

49

EME Hakata Ekimae Building

Fukuoka City, Fukuoka

7,504.44

Jun. 27, 2008

6,750

1.8

50

NOF Tenjin-Minami Building

Fukuoka City, Fukuoka

3,834.35

Mar. 27, 2009

3,739

1.0

Total Other Cities (15 Properties)

161,439.06

100,200

26.8

Grand Total (50 Properties)

435,901.82

374,557

100.0

Note : The Company owns "Secom Medical Building", "NRE Shibuya Dogenzaka Building", "PMO Nihonbashi Honcho", "NRE Higashi-nihonbashi Building", "MY Higashi Gotanda
Building", "NRE Ueno Building", "Toho Edogawabashi Building", "Crystal Park Building", "Yokohama Odori Koen Building", "NRE Sapporo Building", "JCB Sapporo Higashi
Building", "SORA Shin-Osaka 21" and "NRE Nishi-Umeda Building" as real estate, and other properties in the form of beneficial interest in real estate trusts.
Note : "Ratio" refers to the ratio of each asset based on acquisition price to the entire portfolio (total of 50 properties). As the figures in the above table have been rounded to thefirst decimal place, the total may not be 100.0%.
Note : Shinjuku Nomura Building is held through the quasi co-ownership of beneficial interest in real estate trust. The Company holds 50.1% of the quasi co-ownership. Total
leasable floor space and acquisition price in the above table indicates the figures related to the quasi co-ownership.
Note : The Company transferred a part of the land of NOF Technoport Kamata Center Building (co-owned area) on August 31, 2007. The acquisition price on the list is the amount
subtracting a book price of the asset to be transferred (13 million yen) from the acquisition price before the transfer (6,430 million yen). The number of amount below unit istruncated.

11

Major Properties
01

24

07

45

25

32

01 Shinjuku Nomura Building
1-26-2 Nishi-Shinjuku Shinjuku-ku, Tokyo

24 NRE Ueno Building
1-14-4, Higashi-Ueno, Taito-Ku, Tokyo

1245 NRE Nishi-Umeda Building
2-1-22, Umeda, Kita-ku, Osaka City, Osaka

32 NOF Kawasaki Higashiguchi Building
3-1 Ekimae-Honcho Kawasaki-ku Kawasaki City, Kanagawa

07 Secom Medical Building
7-7 Nibancho Chiyoda-ku, Tokyo

25 NOF Toyo-cho Building
1-6-35 Shinsuna Koto-ku, Tokyo

41

29

41 NOF Nagoya Yanagibashi Building
1-16-28 Meieki-Minami Nakamura-ku Nagoya City, Aichi

29 Crystal Park Building
1-1-3 Gotenyama Musashino City, Tokyo

13

Major Properties
04

31

43

42

06

04 Tennozu Park Side Building

12 Iwamoto-cho Toyo Building

47

37

31 Faret Tachikawa Center Square

2-5-8 Higashi-Shinagawa Shinagawa-ku, Tokyo

3-1-2 Iwamoto-cho, Chiyoda-ku, Tokyo

2-36-2 Akebono-cho Tachikawa City, Tokyo

06 NOF Shibuya Koen-dori Building

47 NOF Kobe Kaigan Building

42 Omron Kyoto Center Building

20-17 Udagawa-cho Shibuya-ku, Tokyo

14

12

3 Kaigan-dori Chuo-ku Kobe City, Hyogo

801 Minami Fudodo-cho, Horikawa Higashi-iru, Shiokoji-dori,Shimogyo-ku, Kyoto City, Kyoto

37 NRE Sapporo Building
2-15-1, Kitashichijyo-Nishi, Kita-ku, Sapporo City, Hokkaido

43 SORA Shin-Osaka 21
2-1-3 Nishi-Miyahara Yodogawa-ku, Osaka City, Osaka

15

Profile of the Asset Management Company

Performance Report

The Company has appointed the asset management company, Nomura Real Estate AssetManagement, to provide full range of professional asset management services to the Company.
Company: Nomura Real Estate Asset Management Co., Ltd.
Capital: ¥300 million (as of October 31, 2009)
Shareholder: Nomura Real Estate Holdings, Inc. (100%)
Incorporation: January 24, 2003

Organization of the asset management company
Shareholders'Meeting

Auditors

Boand of Directors
President & CEO
Internal Audit

Compliance
Committee
Compliance & Risk
Management Group

Investment
Committee
Acquisition
Group

Office Management
Division

Asset
Management
Group

Fund
Management
Group

ResidenceManagement Division

Financial &Control Group●Specialized in investment and management ofoffice buildings●Started operation in 2003

Acquisition
Group

Asset
Management
Group

Fund
Management
Group

Investment
Committee
Financial &Control Group●Specialized in investment and management ofresidential facilities●Started operation in 2006

Profile of Directors
President & CEO

Tatsuo Inoue

Director and Manager

Atsushi Ogata
PMO Nihonbashi Honcho Building

Contents

Asset Management Report ......................................... 18
Profile of the Company ............................................... 23
Status of Investment Assets of the Company ............ 25
Capital Expenditures ................................................... 28
Expenses and Liabilities .............................................. 29

Apr. 1981
Jun. 1993
Jun. 1995
Mar. 2003
Jun. 2005

Apr. 2006

16

Entered NREDManager, Building Sales Division I
Manager, General Affairs Division
General Manager, Commercial Property Development &Management Dept.
Director and Deputy Company President of Corporate Real
Estate Service Company, and General Manager (temporary)of Commercial Property Development & Management
Dept.
President and Chief Executive Officer, NREAM (current position)

Apr. 1987
Nov. 1987
Dec. 1989
Apr. 1992
Apr. 2001
Jan. 2003
Apr. 2003
Jun. 2005
Apr. 2006

Entered NREDInternational Business Dept.
Overseas Project Dept.
Corporate Sales Division
External assignment, Nomura Real Estate Urban Net Co., Ltd.
Asset Management Division
External Assignment, NREAM
Director, NREAM (current position)
Manager, Office Management Division, NREAM (current position)

Trading during the Twelfth Fiscal Period ..................... 32
Other Information ....................................................... 34

17

Asset Management Report
1. CHANGES IN KEY INDICATORS

2. OUTLINE OF INVESTMENTS IN THE TWELFTH FISCAL PERIOD
12th Period
11th Period
10th Period
9th Period
8th Period
from May 1, 2009 from Nov. 1, 2008 from May 1, 2008 from Nov. 1, 2007 from May 1, 2007
to Oct. 31, 2009 to Apr. 30, 2009 to Oct. 31, 2008 to Apr. 30, 2008 to Oct. 31, 2007

Operating Revenues¥ mln

14,203

15,40913,925

12,183

11,968of which Real Estate Rental Revenues¥ mln

14,203

14,281

13,925

12,183

11,958Operating Expenses

¥ mln

7,065

8,331

6,993

6,359

6,243

of which Real Estate Rental Expenses

¥ mln

5,761

5,917

5,790

5,213

5,190

Operating Profits

¥ mln

7,138

7,078

6,932

5,823

5,725

Current Profits

¥ mln

5,339

5,393

5,256

4,500

4,486

Net Income

¥ mln

5,338

5,392

5,255

4,499

4,486

Total Assets¥ mln

408,312409,353

401,684

353,730

326,711(Changes from Previous Period)%(△0.3)(+1.9)(+13.6)(+8.3)(+3.6)

Interest-Bearing Debts¥ mln

188,730

188,730

182,100

165,700

140,000

Net Assets¥ mln

190,793

190,847

190,711161,267

161,272%(△0.0)(+0.1)(+18.3)(△0.0)(+0.0)

Unitholders’ Capital¥ mln

185,455

185,455

185,455

156,767

156,767

Number of Units Issued

Units305,123

305,123

305,123265,903

265,903¥625,301

625,478625,031

606,488606,510(Changes from Previous Period)

Net Assets per Unit

¥ mln

5,338

5,392

5,255

4,499

4,498

Cash Distribution per Unit¥

17,496

17,673

17,225

16,923

16,918

Total Cash Distributionof which Cash Distribution of Profits¥

17,496

17,673

17,225

16,923

16,918of which Cash Distribution in excess of Profits

¥

–

–

–

–

–

ROA (Return on Assets) (Note 1)

%

1.3

1.3

1.4

1.3

1.4

Annualized ROA (Note 2)

%

2.6

2.7

2.7

2.7

2.8

ROE (Return on Equity) (Note 3)

%

2.8

2.8

2.8

2.8

2.8

Annualized ROE (Note 2)

%

5.5

5.7

5.6

5.6

5.5

Capital Adequacy Ratio (Note 4)

%

46.7

46.6

47.5

45.6

49.4

(Changes from Previous Period)%(+0.1)(△0.9)(+1.9)(△3.8)(△1.7)LTV (Loan-to-Value) (Note 5)

%

46.2

46.1

45.3

46.8

42.9

Number of Operating Days

days

184

181

184

182

184

Payout Ratio (Note 6)

%

99.9

100.0

99.9

99.9

100.2

Number of Properties Held

bldgs

50

50

46

37

34

Total Leasable Floor Spacem2

435,901.82

436,094.41

430,487.81

395,330.99

362,773.62

tenants

666

661

676

583

533

%

95.4

96.4

97.3

97.6

97.9

Depreciation

¥ mln

1,835

1,862

1,793

1,601

1,518

Capital Expenditures

¥ mln

779

1,376

1,552

1,346

1,252

NOI (Net Operating Income) (Note 7)¥ mln

10,278

10,226

9,927

8,572

8,286

FFO (Funds from Operation) (Note 8)

¥ mln

7,180

7,167

7,087

6,134

6,039

¥

23,53423,48823,22823,06922,714

Number of Tenants
Occupancy Rate

FFO per Unit (Note 9)

Note 1: “ROA (Return on Assets)” = Current Profits / {(Total Assets at the beginning of the period + Total Assets at the end of the period) / 2} x 100
As for the 10th period, the Total Assets were time-adjusted due to the additional issuance of investment units.
Note 2: “ROA” and “ROE” are annualized using the following number of operating days. 8th period: 184 days, 9th Period: 182 days, 10th Period: 184 days, 11th Period: 181 days,
and 12th Period: 184 days.
Note 3: “ROE (Return on Equity)” = Net Income / {(Net Assets at the beginning of the period + Net Assets at the end of the period) / 2} x 100
As for the 10th period, Net Assets is time-adjusted due to the additional issuance of investment units.
Note 4: “Capital Adequacy Ratio” = Net Assets / Total Assets x 100
Note 5: “LTV (Loan-to-Value)” = Interest-Bearing Debts / Total Assets x 100
Note 6: Rounded off to the first decimal place.
Note 7: “NOI (Net Operating Income)” = Real Estate Rental Revenues – Real Estate Rental Expenses + Depreciation
Note 8: “FFO (Funds from Operation)” = Net Income + Depreciation + Amortization of Investment Corporation Bonds Issuance Costs – Real Estate Sale Profit/Loss
Note 9: “FFO per Unit” = FFO / Number of Units Issued

18

Nomura Real Estate Office Fund, Inc., incorporated on August 7, 2003 under the Law Concerning Investment Trusts and Investment
Corporations of Japan, listed the unit certificates in the Real Estate Investment Trust (REIT) Market of the Tokyo Stock Exchange on
December 4, 2003 (TSE code 8959). The Company’s basic investment policy is to assure stable income from, and steady growth of,investment assets over the mid- to long-term. In accordance with this policy, we invest in properties mostly for office use in threelargest conurbations and other major cities, or in property-backed securities that are backed by such properties.
Note: The Law Concerning Investment Trusts and Investment Corporations of Japan (Law No. 198 of 1951) is referred to as the "Investment Trust Law" hereinafter.
The term “unit certificates” are the securities issued by the Company and may be referred to as “investment units” or “units” hereinafter.
The term “investment assets” refers to those assets that belong to the Company.
Unless otherwise stated, for the purpose of this report, the concept of “property(ies)” is construed to include leasehold and superficies.
The term “property(ies)” refers to those assets defined in Section 27, Paragraph 1, Article (1) and (2), and “property-backed securities” refers to those assets defined in
Section 27, Paragraph 1, Article (3) respectively of the Articles of Incorporation of the Company.
The terms “property(ies)” and “property-backed securities” are collectively referred to as “property-related assets” hereinafter.
The properties and underlying properties of the property-related assets are collectively referred to as the “investment properties”.

(1) Market Environments
During this period, the Japanese economy is showing some signs of bottoming-out owing to the recovery of exports and effectsof the economic stimulus measures. However, recovery in capital expenditure and general consumption is taking time as corporations continue to review their business contents and make employment adjustments. As such, the future of the economy
remains unclear.
(a) Office Leasing Market
Due to the slowing of the Japanese economy, corporations actively sought to reduce costs through business rationalizationand down-sizing. With the decrease in overall demand for office space from corporations and decline in area occupancy rates
in most regions, tenants continue to have the advantage. On the other hand, while there is polarization in the market based on
location, size and basic facilities of the buildings, the occupancy rates seem to be bottoming out, with some tenants starting tosecure new office spaces. However, some cities have experienced further market easing from sharp increase in new supplies
combined with corporate moves to close or integrate regional offices. Due to the high levels of vacancies, the office rental
levels continue on a downward trend for new asking rents and the renewal levels of existing tenants. This trend is expected
to continue until a clear recovery is confirmed for the Japanese economy.
(b) Real Estate Sales Market
The real estate sales market in this period showed some signs of recovery despite the financial institutions’ continued conservativeness towards lending to the real estate sector, as witnessed through active investments by railway companies that havestable financial basis and ample funding capacities. However, the market remains weak due to the continued upward trend of
expected returns on profitable properties against the backdrop of decline in rental income caused by the deteriorating officeleasing market.
(2) Status of Managements for the Twelfth Fiscal Period
To comply with the basic policy of acquiring only such properties that would generate stable cash flow over the mid- to long-term,
the Company continues to invest in properties with strong competitiveness both in terms of locations and basic building features.
The Company’s total assets under management (“portfolio”) as of the end of the twelfth fiscal period (October 31, 2009)
was 50 properties (total leasable floor space: 435,901.82m2) totaling ¥374.5 billion (total acquisition price) as there were no changes in the portfolio.
In property management, against the backdrop of the environment described in ”(1) Market Environments (a) Office Leasing
Market” above, decrease in demand of office space resulted in a rise in the number of cancellation notices, partial cancellation ofleased space, and requests for decrease in rent from tenants. To minimize the decline in portfolio profitability, the Company concentrated on maintenance and improvement of the occupancy rate through aggressively approaching prospective tenants andpromoting lease renewals utilizing our close relationship with the existing tenants. At lease renewals, the Company engaged in
active negotiation to minimize the decrease in rent levels, while responding flexibly to the needs of each tenant, considering thedeviation from the market asking-rent, the size of leased space, leasing period, and the timing of rent renewal. As a result, theaverage rent for the 50 properties declined only 1.2% compared to the previous fiscal period, and the occupancy rate remained
high at 95.4% at the end of the period.
In addition, we have maintained stable profits, through securing profits by utilizing the know-how of the Nomura Real EstateGroup (Note) to reduce asset management expenses, such as reviewing utility expenses and property management specifications for each building.
Note : “Nomura Real Estate Group” refers to a corporate group consisting of the consolidated subsidiaries of Nomura Real Estate Holdings, Inc. (referred to as Nomura Real
Estate Holdings hereinafter) including Nomura Real Estate Development Co., Ltd. (referred to as “NRED” hereafter) but excluding Nomura Real Estate AssetManagement Co., Ltd. (referred to as the Asset Management Company hereinafter).

19

(3) Status of Funding
Concerning funding through interest-bearing debts, the Company has the basic financial policy of funding through promotion of
long-term, diversified and fixed-rate debts, for the purpose of securing financial stability and avoiding future interest rate risks.
Based on this policy, the Company has implemented funding through long-term debts and issuance of investment corporation
bonds, while establishing a total of ¥40 billion of commitment line for the purpose of flexible funding at the time of property
acquisition and reduction of refinancing risks, from the perspective of securing stable funding base.
As to debts, a total of ¥24.8 billion was borrowed as repayment funds for existing debts. As a result, outstanding interestbearing debt as of the end of the twelfth fiscal period was ¥188.7 billion, same as the previous fiscal period.

[Changes in Price at the Tokyo Stock Exchange]
Changes in prices of the Company’s investment units listed on the Tokyo Stock Exchange are as follows.
12th Period
11th Period
from May 1, 2009 from Nov.1, 2008
to Oct. 31, 2009
to Apr. 30, 2009

High
Low

(¥)
(¥)

683,000
495,000

645,000
431,000

10th Period
from May 1, 2008
to Oct. 31, 2008

874,000
407,000

9th Period
from Nov.1, 2007
to Apr. 30, 2008

8th Period
from May 1, 2007
to Oct. 31, 2007

1,200,000
655,000

1,540,000
935,000

4. CASH DISTRIBUTION

3. STATUS OF CAPITALNo changes in the number of units issued have been made during the twelfth fiscal period. Changes in the number of units issued
and unitholders’ capital until the twelfth fiscal period are as follows.
Number of Units Issued (Unit)

Unitholders’ Capital (¥ mln)

Date

Type of Issue

ChangeBalance

ChangeBalance

NoteAug. 7, 2003
Dec. 4, 2003
May 19, 2004
Jun. 16, 2004
May 1, 2005
May 24, 2005
May 25, 2006
Jun. 23, 2006
May 27, 2008
Jun. 24, 2008

Initial private placement
Public offering
Public offering
Third-party allotment
Public offering
Third-party allotment
Public offering
Third-party allotment
Public offering
Third-party allotment

400
148,200
35,0001,050
44,0001,320
34,8001,133
37,0002,220

400
148,600
183,600
184,650
228,650
229,970
264,770
265,903
302,903
305,123200
71,506
19,866595
31,496944
31,143
1,013
27,0641,623

200
71,706
91,572
92,168
123,665
124,610
155,753
156,767
183,831
185,455(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)(Note 9)(Note 10)Note 1: Initial private placement at the offer price of ¥500,000 per unit to incorporate the Company.
Note 2: Public offering at the offer price of ¥500,000 (issue price of ¥482,500) to finance acquisition of new properties.
Note 3: Public offering at the offer price of ¥588,000 (issue price of ¥567,600) to finance acquisition of new properties and to repay borrowings.
Note 4: Third-party allotment to Nomura Securities Co., Ltd. at the offer price of ¥567,600 following the public offering on May 19, 2004.
Note 5: Public offering at the offer price of ¥740,782 (issue price of ¥715,837) to finance acquisition of new properties and to repay borrowings.
Note 6: Third-party allotment to Nomura Securities Co., Ltd. at the offer price of ¥715,837 following the public offering on May 1, 2005.
Note 7: Public offering at the offer price of ¥926,100 (issue price of ¥894,915) to finance acquisition of new properties and to repay borrowings.
Note 8: Third-party allotment to Nomura Securities Co., Ltd. at the offer price of ¥894,915 following the public offering on May 25, 2006.
Note 9: Public offering at the offer price of ¥756,560 (issue price of ¥731,470) to redeem the short-term investment corporation bonds and to repay short-term borrowings.
Note 10:Third-party allotment to Nomura Securities Co., Ltd. at the offer price of ¥731,470 following the public offering on May 27, 2008.

In order to qualify for special tax treatment under Article 67-15 of the Special Taxation Measures Law (Law No. 26 of 1957) to havemaximum cash distribution amount treated as deductible dividends, the Company distributed the entire unappropriated retained
earnings except for fractional amounts smaller than one yen per each investment unit. As a result, the amount of cash distribution
per unit for this fiscal period was ¥17,496.
12th Period
11th Period
10th Period
9th Period
8th Period
from May 1, 2009 from Nov. 1, 2008 from May 1, 2008 from Nov.1, 2007 from May 1, 2007
to Oct. 31, 2009
to Apr. 30, 2009
to Oct. 31, 2008
to Apr. 30, 2008
to Oct. 31, 2007

Retained Earnings
Accumulated earnings
Total cash distribution(Cash distribution per unit)of which distribution of profits(Distribution of profits per unit)of which refund of capital(Refund of capital per unit)(¥000)(¥000)(¥000)(¥)(¥000)(¥)(¥000)(¥)

5,338,534
102
5,338,432(17,496)
5,338,432(17,496)–(–)

5,392,502
64
5,392,438(17,673)
5,392,438(17,673)–(–)

5,255,922
178
5,255,743(17,225)
5,255,743(17,225)–(–)

4,500,000
124
4,499,876(16,923)
4,499,876(16,923)–(–)

4,498,622
76
4,498,546(16,918)
4,498,546(16,918)–(–)

5. INVESTMENT POLICY AND FUTURE ISSUES(1) Investment Environments
Although there are some signs of a bottom for certain aspects, the Japanese economy is expected to search for the timing ofbottoming out and recovery amid the global economic downturn.
Under these circumstances, we believe that defensive asset management is important such as maintenance of funding
capacities through conservative financial management, flexible property management that minimizes the decrease in portfolio
profitability assuming further deterioration of the office leasing market, and paying close attention to movements in expected
yields and property liquidity in the real estate investment market.
(2) Investment Policy and Future Issues
With such environments in mind, the Company will employ the following investment policies to ensure stable income from, andsteady growth of the portfolio over the mid- to long-term.
(a) Property Management in a Mid- to Long-Term View
In addition to enhancement of property management to satisfy the requirements of existing tenants, proper recognition of theproperty features and market environments will help us market the potential tenants more organically. We will maintain anduplift the occupancy rate and level of rents in pursuit of sustainable and improved profitability of portfolio, namely internal
growth of portfolio, over the mid- to long-term.
By putting the know-how of Nomura Real Estate Group together, we seek to design the most suitable specifications of
how to manage and maintain each property in the most effective way, which in turn will ensure stable inflow of revenues.
In order to ensure stable revenues over the mid- to long-term, we will carry out strategic refurbishment and renovation
works to maintain and/or improve features of the properties, establishing their uniqueness and increasing their competitiveness.
(b) Continuation of Conservative Financial Policy
In order to assure stable financing capability and increase creditworthiness in the market over the mid- to long-term, we will
pay particular attention to debt finance. We will seek to continuously keep the LTV low by using more long-term funding atfixed-rates, diversifying the repayment dates, and increasing the number of institutions we bank with.

20

21

Profile of the Company
We will closely monitor the conditions of financial markets, and carefully deliberate and choose the best means of funding, including the usage of commitment lines, issuance of investment corporation bonds and short-term investment corporation bonds from a wide range of available sources of funding to ensure a well-balanced structure of interest-bearing debts.
(c) Enlargement of Portfolio by Acquisition of New Properties
Although the Company is targeting portfolio size of ¥500 billion in the medium term, we believe careful decisions are necessary for new property acquisition, having thoroughly considered the capital and real estate sales market conditions as well as
the financial status of the Company.

6. IMPORTANT EVENTS SUBSEQUENT TO THE TWELFTH FISCAL PERIOD
There is no relevant matter under this subject.

1. STATUS OF UNITHOLDERS’ CAPITAL
12th Period
11th Period
10th Period
9th Period
8th Period(as of Oct. 31, 2009) (as of Apr. 30, 2009) (as of Oct. 31, 2008) (as of Apr. 30, 2008) (as of Oct. 31, 2007)

Maximum number of units allowed to issue(Unit)

2,000,000

2,000,000

2,000,000

2,000,000

2,000,000

Number of units issued(Unit)

305,123

305,123

305,123265,903

265,903

Amount of unitholders’ capital(¥ mln)185,455

185,455

185,455

156,767

156,767

12,565

12,503

12,406

11,12011,492

Number ofUnits Held
(Unit)

Portion in
the Total
Units Issued (%)

Number of unitholders

2. MATTERS CONCERNING THE INVESTMENT UNITS
The 10 largest unitholders as of October 31, 2009 were as follows.

NameJapan Trustee Service Bank, Ltd.(Trust Accounts)

26,435

8.66

NikkoCiti Trust and Banking Corp. (Trust Accounts)

24,330

7.97

Trust & Custody Services Bank, Ltd. (Securities Trust Accounts)

20,901

6.85

The Master Trust Bank of Japan, Ltd.(Trust Accounts)

16,102

5.28

Nomura Real Estate Development Co., Ltd.

15,287

5.01

The Nomura Trust and Banking Co., Ltd. (Trust Accounts)

10,147

3.33

Kawasaki Gakuen

7,000

2.29

The Bank of Ikeda, Ltd.

5,669

1.86

The Chase Manhattan Bank 385036

5,137

1.68

North Pacific Bank, Ltd.

4,973

1.63

135,981

44.57

Total

3. BREAKDOWN OF UNITHOLDERS
The breakdown of unitholders as of October 31, 2009 was as follows.

Private and other investors

Portion (%)

Number of Units
per Unitholder

Portion (%)

11,91794.8

30,870

10.1

Financial institutions(Including sales agents for financial instruments firm)

151

1.2

169,017

55.4

Other domestic corporate investors

201

1.6

29,222

9.6

Foreign corporate investors, etc.

296

2.4

76,01424.9

12,565100.0

305,123

100.0

Total

22

Number ofUnitholders

23

Status of Investment Assets of the Company
4. DIRECTORS AND AUDITOR

1. COMPOSITION OF ASSETS(1) Name of directors and an auditor in the twelfth fiscal period are as follows (Note 1).

Title

Other Major Title (s)Executive Director

Mitsuharu Sato (Note 2)

Corporate Auditor, Nomura Real Estate Holdings, Inc.
Corporate Auditor, Nomura Real Estate Development Co., Ltd.

1,200

Executive Director

Yuichi Maruko (Note 3)

Corporate Auditor, MEGALOS, Co., Ltd.

1,200

Supervisory Director

Shuhei Yoshida (Note 3)

Representative Lawyer, Yoshida Shuhei Law Office
Supervisory Director, Nomura Real Estate Residential Fund, Inc.

2,400

Director, Fair Appraisers, K.K.
Supervisory Director, Nomura Real Estate Residential Fund, Inc.

2,400

Partner, Anderson Mori & Tomotsune Law Firm

2,400

Supervisory Director

Eitoku Aikawa (Note 3)

Supervisory Director

Saneaki Ichijo (Note 3)

Supervisory Director

Motoharu Yokose (Note 2) Advisor, Asahi Tax Partners

1,200Supervisory Director

Naohito Miya (Note 3)
Earnst & Young ShinNihon
LLC

Manager of Miya Naohito CPA Firm

1,200

–

14,500Accounting Auditor

Type of Assets

Total Amount of Fees Paid
during the 12th Period (¥000)

Name

Note 1: No Executive Directors or Supervisory Directors are in possession of the Company’s investment units either under their own or other person’s name other than Mr. Yuichi
Maruko possesses two units of the Company’s investment units as of October 31, 2009. Executive Directors and Supervisory Directors might serve as directors of othercompanies, but there are no mutual business interests whatsoever between such companies and the Company.
Note 2: Resigned as of August 7, 2009, at expiry of the term.
Note 3: Appointed as directors of the Company as of August 8, 2009, based on the resolution of the fourth General Unitholders’ Meeting held on July 27, 2009 (Supervisory
Directors Mr. Yoshida, Mr. Aikawa and Mr. Ichijo are reappointed, Executive Director Mr. Maruko and Supervisory Director Mr. Miya are newly appointed).
Note 4: At the fourth General Unitholders’ Meeting held on July 27, 2009, Mr. Atsushi Ogata, Director of the Asset Management Company, Nomura Real Estate Asset Management
Co., Ltd., has been appointed as substitute Executive Director, to provide against vacancy of the Executive Director’s position or lack of statutory quorum.

Real estate

5. ASSET MANAGEMENT COMPANY, CUSTODIANS AND ADMINISTRATORS
Asset Management Company, custodians and administrators as of October 31, 2009 are as follows:Business

Company Name (s)Asset Management Company

Nomura Real Estate Asset Management Co., Ltd.

Custodian of assets

Mitsubishi UFJ Trust and Banking Corporation

Custodian of unitholders’ register

Mitsubishi UFJ Trust and Banking Corporation (Note 1), The Bank of Tokyo-Mitsubishi
UFJ, Ltd. (Note 2), Sumitomo Mitsui Banking Corporation (Note 2)

Manager of special accounts

Mitsubishi UFJ Trust and Banking Corporation

Administrative agent (accounting, etc.)

Mitsubishi UFJ Trust and Banking Corporation

Administrative agent(investment corporation bonds)

The Bank of Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Banking Corporation, Nomura
Securities Co., Ltd., Citigroup Limited, Mizuho Securities Co., Ltd.

Administrative agent
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
(short-term investment corporation bonds)

12th Period (as of Oct. 31, 2009)
Portion (%)
Total Amount (¥ mln)
(Note 3)(Note 2)

11th Period (as of Apr. 30, 2009)
Total Amount (¥ mln)
Portion (%)(Note 2)
(Note 3)Central Tokyo

31,018

7.6

31,133

7.6

Suburban Tokyo

16,4894.0

16,539

4.0

Other Regional Cities

33,954

8.3

34,146

8.3

Central Tokyo

187,89746.0

188,379

46.0

Suburban Tokyo

37,513

9.2

37,524

9.2

Other Regional Cities

65,917

16.1

66,10916.1

Subtotal

372,79091.3

373,833

91.3

Cash, deposits and other assets

35,522

8.7

35,5198.7

408,312100.0

409,353

100.0

Real estate in trust

Grand Total

Note 1: “Central Tokyo” refers to Chiyoda, Chuo, Minato, Shinjuku, Shinagawa and Shibuya Wards; “Suburban Tokyo” refers to Tokyo excluding the Central Tokyo area, Kanagawa,
Saitama and Chiba: “Other Regional Cities” refers to areas other than Central Tokyo and Suburban Tokyo. The same applies hereafter.
Note 2: Total amount is taken from the balance sheet. (Real Estate and Real Estate in Trust represent the total book value after depreciation.)
Note 3: The percentage figures may not necessarily add up to 100.0 due to rounding to the nearest first decimal place.

2. BRIEF OF MAJOR PROPERTIES OWNED
The major components of assets (the 10 largest properties by book value) as of October 31, 2009 are as follows.

Name of Property(2) Policy on Determination of Dismissal and Denial of Reappointment of Accounting Auditors
In case an item listed under Article 105, Paragraph 1 of the Investment Trust Law becomes applicable to the accounting auditor,
and the Board of Directors determines that there is no likelihood of improvement, the Board of Directors shall dismiss theaccounting auditor by unanimous vote of all board members.
In addition, if the Board of Directors determines that the accounting auditor is inappropriate for the position having given thoroughconsideration to its business execution and other various reasons, the Board of Directors shall dismiss or deny reappointment of
the accounting auditor, and present an agenda for appointment of a new accounting auditor at the General Unitholders’ Meeting.

Area(Note 1)

Shinjuku Nomura Bldg.

Book Value(¥ mln)39,520

Leasable Floor
Space(m2) (Note1)

Leased Space(m2) (Note2)

31,500.89

29,470.90

Occupancy Rate
(%)

93.6

Portionof Rental
Revenues (%)

Primary Use

13.3

OfficeJAL Bldg.

32,962

42,084.11

42,084.11

100.0(Note 3)

OfficeOmron Kyoto Center Bldg.

22,897

34,616.84

34,616.84

100.0(Note 3)

OfficeNOF Nihonbashi-Honcho Bldg.

20,74919,156.01

15,215.46

79.4

5.8

OfficeSORA Shin-Osaka 21

19,237

21,462.47

19,227.45

89.6

4.0

OfficeTennozu Park Side Bldg.

13,17418,051.60

17,735.94

98.3

5.7

OfficeNOF Shibuya Koen-dori Bldg.

12,5933,420.16

3,420.16

100.0

2.6

OfficeShinjuku Sanshin Bldg.

12,314

6,685.52

6,685.52

100.0

2.3

OfficeSecom Medical Bldg.

11,284

8,821.24

8,821.24

100.0(Note 3)

Medical Office(Note 4)

NOF Shiba Bldg.

10,1128,165.10

8,165.10

100.0

2.5

Office194,846

193,963.94

185,442.72

95.6

48.4 (Note 5)

Total

Note 1: “Leasable Floor Space” refers to the total leasable space for each asset including offices and shops (for properties owned in compartments, this generally refers to exclusively owned area; however, common spaces will be included if they are being leased. For Shinjuku Nomura Building, the area calculated by multiplying the overall leasable
floor space by the quasi co-ownership ratio of the beneficial interest in real estate trust owned by the Company. For JAL Building, includes the area calculated by multiplying
the overall common space by the co-ownership ratio for the common spaces prescribed in the terms of management of the building owned by the Company through thetrustee.), at a certain time. Leasable floor space is calculated not based on the total floor space stated on the registry book, but based on the area stated on the building
completion drawing, etc. included in the lease agreement. As such, it may differ from and exceed the total floor space stated on the registry book.
Note 2: “Leased Space” refers to the area included in the leasable floor space of each asset and is actually leased based on a lease agreement (provided, however, it is limited to
office and shop spaces (where the entire leased floor space is being leased as a whole, the total area of the leased floor space.), and does not include leased parking spaces. For Shinjuku Nomura Building, the area calculated by multiplying the overall leased space by the quasi co-ownership ratio of the beneficial interest in real estate trust
owned by the Company. For JAL Building, includes the area calculated by multiplying the overall common space by the co-ownership ratio for the common spaces (as prescribed in the terms of management of the building) owned by the Company through the trustee.).
Note 3: Not disclosed due to compelling reasons.
Note 4: Although this property is currently registered as “clinic/parking” on the registry book, it was originally designed to be used as offices. The Company’s Articles ofIncorporation allows us to invest in the non-office properties given that they can easily be converted into offices.
Note 5: “Total” for “Portion of Rental Revenues” column include rental revenues for properties which do not disclose “Portion of Rental Revenues” due to unavoidable reasons.

Note 1: Administrates preparation, retention and other tasks related to the Unitholders’ Register.
Note 2: Administrates preparation, retention and other tasks related to the Investment Company Bond Register.

24

25

3. DETAILS OF PORTFOLIO PROPERTIESName of Property

Location(Postal Address)

Type ofOwnership

Appraisal Valueas of Oct. 31, Book Value2009 (¥ mln)(¥ mln)(Note 1)
(Note 2)Central Tokyo

2-23 Tatemachi, Naka-ku, Hiroshima City, Hiroshima

EME Hakata Ekimae Bldg.

1-15-20 Hakata Ekimae, Hakata-ku, Fukuoka City, Fukuoka

NOF Tenjin-Minami Bldg.

3-6-15 Watanabe Dori, Chuo-ku, Fukuoka City, Fukuoka

Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust

Subtotal
Grand total

2,180

2,658

4,740

6,704

2,350

3,748

89,094384,21499,871
372,790

52,80039,52032,20032,962

23,20020,74920,90013,174

10,50012,314

12,20012,593Note 1: “Appraisal Value as of Oct. 31, 2009” stands for the prices appraised by the estate surveyors in accordance with the provisions of the Company’s Articles of Incorporationand the “Rules Concerning Calculations of Investment Corporations” (Cabinet Office Regulation No. 47 of 2006). The appraisal prices are calculated by Japan Real Estate
Institution, Tanizawa Sogo Appraisal Co., Ltd., Daiwa Real Estate Appraisal, Co., Ltd., HIRO & REAS Network, Inc., Appraisal Firm A-Square Co., Ltd., Chuo Real EstateAppraisal Co., Ltd., or Morii Appraisal & Investment Consulting Inc. using the capitalization approach, with the end of the twelfth fiscal period, i.e. October 31, 2009, being
taken as the point of evaluation.
Note 2: “Book Value” stands for the aggregate purchase price of lands, buildings, structures, machinery and equipments, tools and fixtures, leased assets, construction in progress,
and leaseholds owned directly or held in trust, less depreciation including expenses associated with these purchases.
Note 3: The Company’s stake in this property is quasi co-ownership of 50.1% of entirety. The appraisal value and book value as of October 31, 2009 accounted solely for the quasi
co-ownership.
Note 4: Residential indication of the property is not available yet.
Note 5: In addition to the buildings in the table, the Fund acquired “NOF Nagoya Fushimi Bldg” on December 25, 2009. The appraisal value of the building is ¥2,370 million as of
October 31, 2009.

10,40011,28412th Period (from May 1, 2009 to Oct. 31, 2009)

Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Real Estate

10,200

10,112

8,960

8,716

6,370

7,665

7,420

7,592

5,170

5,975

6,380

5,431

6,690

5,028

4-12-20 Nihonbashi Honcho, Chuo-ku, Tokyo

Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Real Estate

4,360

4,972

1-1-7 Higashi-nihonbashi, Chuo-ku, Tokyo

Real Estate

3,860

4,064

Hatchobori NF Bldg.

2-21-6 Hatchobori, Chuo-ku, Tokyo

2,920

3,196

NOF Kanda Iwamoto-cho Bldg.

3-8-16 Iwamoto-cho, Chiyoda-ku, Tokyo

3,580

3,102

MY Higashi Gotanda Bldg.

2-20-4 Higashi Gotanda, Shinagawa-ku, Tokyo

Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Real Estate

2,780

3,030

Central Kyobashi Bldg.

1-4-13 Kyobashi, Chuo-ku, Tokyo

2,380

2,553

NOF Minami-Shinjuku Bldg.

5-32-7 Sendagaya, Shibuya-ku, Tokyo

2,670

2,313

Central Shintomocho Bldg.

3-5-10 Minato, Chuo-ku, Tokyo

1,510

1,772

Sunworld Yotsuya Bldg.

13-9 Araki-cho, Shinjuku-ku, Tokyo

Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust

Shinjuku Nomura Bldg. (Note 3)

1-26-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo

JAL Bldg.

2-4-11 Higashi-Shinagawa, Shinagawa-ku, TokyoNOF Nihonbashi Honcho Bldg.

2-7-1 Nihonbashi-Honcho, Chuo-ku, Tokyo

Tennozu Park Side Bldg.

2-5-8 Higashi-Shinagawa, Shinagawa-ku, Tokyo

Shinjuku Sanshin Bldg.

2-4-9 Yoyogi, Shibuya-ku, TokyoNOF Shibuya Koen-dori Bldg.

20-17 Udagawa-cho, Shibuya-ku, Tokyo

Secom Medical Bldg.

7-7 Niban-cho, Chiyoda-ku, Tokyo (Note 4)

NOF Shiba Bldg.

4-2-3 Shiba, Minato-ku, Tokyo

Nishi-Shinjuku Showa Bldg.

1-13-12 Nishi-Shinjuku, Shinjuku-ku, Tokyo

NRE Shibuya Dogenzaka Bldg.

2-16-4 Dogenzaka, Shibuya-ku, TokyoNOF Tameike Bldg.

1-1-14 Akasaka, Minato-ku, Tokyo

Iwamoto-cho Toyo Bldg.

3-1-2 Iwamoto-cho, Chiyoda-ku, TokyoNOF Shinagawa Kounan Bldg.

1-2-5 Higashi-Shinagawa, Shinagawa-ku, TokyoNOF Surugadai Plaza Bldg.

2-5-12 Kanda Surugadai, Chiyoda-ku, Tokyo

PMO Nihonbashi Honcho
NRE Higashi-nihonbashi Bldg.

Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Real Estate

Subtotal

659

789

238,109

218,915Suburban Tokyo
NRE Ueno Bldg.

1-14-4, Higashi-Ueno, Taito-Ku, Tokyo

Real Estate

7,110

7,870

NOF Toyo-cho Bldg.

1-6-35 Shinsuna, Koto-ku, Tokyo

7,102

2-16-1 Minami-Kamata, Ota-ku, Tokyo

7,330

6,514

Toho Edogawabashi Bldg.

1-24-8 Sekiguchi Bunkyo-ku, Tokyo

Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Real Estate

8,490

NOF Technoport Kamata Center Bldg.

1,530

2,088

Toshin Meguro Bldg.

2-20-28 Shimo Meguro, Meguro-ku, Tokyo

1,140

1,341

Crystal Park Bldg.

1-1-3 Gotenyama, Musashino City, Tokyo

Beneficial Interest in
Real Estate Trust
Real Estate

3,650

3,620

Kichijoji Mark Bldg.

1-10-31, Kichijoji Honcho, Musashino City, Tokyo

1,680

1,804

Faret Tachikawa Center Square

2-36-2 Akebono-cho, Tachikawa City, Tokyo

4,990

2,966

NOF Kawasaki Higashiguchi Bldg.

3-1 Ekimae Honcho, Kawasaki-ku, Kawasaki City, Kanagawa(Note 4)
1-11-11 Kita-Saiwai, Nishi-ku, Yokohama City, Kanagawa

Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Real Estate

8,730

9,462

6,061

4,998

3,980

3,321

2,320

2,909

57,01154,002NOF Yokohama Nishiguchi Bldg.
NOF Shin-Yokohama Bldg.
Yokohama Odori Koen Bldg.

2-15-16 Shin-Yokohama, Kohoku-ku, Yokohama City,
Kanagawa
2-4-1 Horai-cho, Naka-ku, Yokohama City, Kanagawa (Note 4)

Subtotal

Other Cities
4-2-2 Kitaichijo-nishi, Chuo-ku, Sapporo City, Hokkaido(Note 4)2-15-1, Kitashichijyo-Nishi, Kita-ku, Sapporo City, Hokkaido

Beneficial Interest in
Real Estate Trust
Real Estate

6,094

7,494

NRE Sapporo Bldg.

4,720

5,246

JCB Sapporo Higashi Bldg.

1-1 Minamiichijo-Nishi Chuo-ku, Sapporo City (Note 4)

Real Estate

3,190

3,738

NOF Sendai Aoba-dori Bldg.

2-1-2 Ichiban-cho, Aoba-ku, Sendai City, Miyagi

2,800

3,171

NOF Utsunomiya Bldg.

2-1-1 Baba-dori, Utsunomiya City, Tochigi

3,000

2,539

NOF Nagoya Yanagibashi Bldg.

1-16-28 Meieki-Minami, Nakamura-ku, Nagoya City, Aichi

Omron Kyoto Center Bldg.
SORA Shin-Osaka 21

801 Minami Fudodo-cho, Horikawa Higashi-iru, Shiokoji-dori,Shimogyo-ku, Kyoto City, Kyoto (Note 4)
2-1-3 Nishi-Miyahara, Yodogawa-ku, Osaka City

Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Real Estate

NRE Osaka Bldg.

1-8-15 Azuchi-cho, Chuo-ku, Osaka City, Osaka

NRE Nishi-Umeda Bldg.

2-1-22, Umeda, Kita-Ku, Osaka City, Osaka

Sapporo North Plaza26

NRE Hiroshima Bldg.

NRE Yotsubashi Bldg.

1-4-4 Awaza, Nishi-ku, Osaka City, Osaka

NOF Kobe Kaigan Bldg.

3 Kaigan-dori, Chuo-ku, Kobe City, Hyogo (Note 4)

3,170

3,688

20,10022,897

14,30019,237

Beneficial Interest in
Real Estate Trust
Real Estate

9,120

6,384

4,620

5,730

Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust

5,600

3,706

3,110

2,925

Name of Property
Central Tokyo
Shinjuku Nomura Bldg.
JAL Bldg.
NOF Nihonbashi Honcho Bldg.
Tennozu Park Side Bldg.
Shinjuku Sanshin Bldg.
NOF Shibuya Koen-dori Bldg.
Secom Medical Bldg.
NOF Shiba Bldg.
Nishi-Shinjuku Showa Bldg.
NRE Shibuya Dogenzaka Bldg.
NOF Tameike Bldg.
Iwamoto-cho Toyo Bldg.
NOF Shinagawa Kounan Bldg.
NOF Surugadai Plaza Bldg.
PMO Nihonbashi Honcho
NRE Higashi-nihonbashi Bldg.
Hatchobori NF Bldg.
NOF Kanda Iwamoto-cho Bldg.
MY Higashi Gotanda Bldg.
Central Kyobashi Bldg.
NOF Minami-Shinjuku Bldg.
Central Shintomicho Bldg.
Sunworld Yotsuya Bldg.
Subtotal
Suburban Tokyo
NRE Ueno Bldg.
NOF Toyo-cho Bldg.
Technoport Kamata Center Bldg.
Toho Edogawabashi Bldg.
Toshin Meguro Bldg.
Crystal Park Bldg.
Kichijoji Mark Bldg.
Faret Tachikawa Center Square
NOF Kawasaki Higashiguchi Bldg.
NOF Yokohama Nishiguchi Bldg.
NOF Shin-Yokohama Bldg.
Yokohama Odori Koen Bldg.
Subtotal
Other Cities
Sapporo North PlazaNRE Sapporo Bldg.
JCB Sapporo Higashi Bldg.
Kita-Sanjo Bldg. (Note 3)
NOF Sendai Aoba-dori Bldg.
NOF Utsunomiya Bldg.
NOF Nagoya Yanagibashi Bldg.
Omron Kyoto Center Bldg.
SORA Shin-Osaka 21
NOF Midosuji Bldg. (Note 3)
NRE Osaka Bldg.
NRE Nishi-Umeda Bldg.
NRE Yotsubashi Bldg.
NOF Kobe Kaigan Bldg.
Hiroshima Tatemachi NOF Bldg. (Note 3)
NRE Hiroshima Bldg.
EME Hakata Ekimae Bldg.
NOF Tenjin-Minami Bldg.
Subtotal
Grand Total

at Period End
RentalPortionRevenues
of Rental
Number of
Revenues
Tenants
Occupancy during the(%)(Note 1)
Rate (%) Period (¥ mln)

11th Period (from Nov. 1, 2008 to Apr. 30, 2009)

at Period End
Number of
Tenants
Occupancy
Rate (%)(Note 1)

RentalRevenues
during the
Period (¥ mln)

Portionof Rental
Revenues
(%)

82
1
11
15
15
3
1
8
21
6
11
7
5
1
7
6
7
7
13
8
4
6
1
246

93.6
100.0
79.4
98.3
100.0
100.0
100.0
100.0
100.0
100.0
90.7
100.0
100.0
100.0
100.0
100.0
100.0
90.6
97.1
100.0
100.0
91.3
100.0
96.2

1,883
(Note 2)
829
808
319
367
(Note 2)
358
325
180
201
172
250
(Note 2)
121
153
111
125
115
82
106
68
(Note 2)
8,011

13.3
(Note 2)
5.8
5.7
2.3
2.6
(Note 2)
2.5
2.3
1.3
1.4
1.2
1.8
(Note 2)
0.9
1.1
0.8
0.9
0.8
0.6
0.7
0.5
(Note 2)
56.4

83
1
12
16
14
3
1
9
21
6
12
7
5
1
6
6
7
7
13
8
5
7
1
251

97.3
100.0
95.9
98.3
94.8
100.0
100.0
100.0
100.0
100.0
90.7
100.0
100.0
100.0
87.5
100.0
100.0
90.6
100.0
100.0
100.0
100.0
100.0
98.2

1,990
(Note 2)
865
805
317
369
(Note 2)
353
325
194
220
154
230
(Note 2)
102
91
91
147
40
86
103
69
(Note 2)
7,989

13.9
(Note 2)
6.1
5.6
2.2
2.6
(Note 2)
2.5
2.3
1.4
1.5
1.1
1.6
(Note 2)
0.7
0.6
0.6
1.0
0.3
0.6
0.7
0.5
(Note 2)
55.9

9
1
14
7
1
9
6
15
22
28
7
14
133

100.0
100.0
97.2
100.0
100.0
92.7
100.0
91.4
86.5
88.6
87.3
94.0
94.5

231
(Note 2)423
64
(Note 2)
124
79
228
316
239
107
109
2,261

1.6
(Note 2)3.0
0.5
(Note 2)
0.9
0.6
1.6
2.2
1.7
0.8
0.8
15.9

8
1
14
6
1
9
6
16
24
29
7
13
134

96.8
100.0
97.2
88.7
100.0
100.0
100.0
94.2
91.7
93.1
87.3
90.9
95.3

141
(Note 2)427
67
(Note 2)
134
43
229
322
253
73
113
2,142

1.0
(Note 2)3.0
0.5
(Note 2)
0.9
0.3
1.6
2.3
1.8
0.5
0.8
15.0

36
6
1
–
29
22
11
1
27
–
24
13
17
32
–
14
36
18
287

84.5
100.0
100.0
–
90.9
94.1
100.0
100.0
89.6
–
92.8
100.0
97.8
93.8
–
93.3
93.1
95.6
94.8

2.3
1.4
(Note 2)
–
1.1
1.1
0.9
(Note 2)
4.0
–
3.6
1.3
2.2
1.3
–
1.4
1.3
0.4
27.7

39
6
1
–
28
23
11
1
25
–
25
11
16
34
–
11
33
12
276

89.4
100.0
100.0
–
90.4
96.2
91.3
100.0
91.5
–
93.6
100.0
94.7
97.2
–
94.1
87.6
82.2
94.8

95.4

100.0

661

96.4

338
130
(Note 2)
47
165
168
140
(Note 2)
586
169
510
202
311
190
69
179
189
8
4,149
14,281(Note 4)2.4
0.9
(Note 2)
0.3
1.2
1.2
1.0
(Note 2)
4.1
1.2
3.6
1.4
2.2
1.3
0.5
1.3
1.3
0.1
29.1

666

330
194
(Note 2)
–
157
161
128
(Note 2)
571
–
511
188
313
187
–
196
189
59
3,930
14,203(Note 4)100.0

Note 1: In the case a master lease agreement is in place, in which the master tenant of the said lease agreement subleases a part or whole of the leased floor spaces to the end
tenants, only the master tenant is counted as the number of tenants. For PMO Nihonbashi Honcho, which involves a “pass-through type” master lease agreement where
the amount of rent received from the master tenant is the same as the rent received by said master tenant from the end tenant, the total number of end tenants is shown.
In the case more than one space within the same building are leased by the same tenant, such spaces are combined to count for just one tenant. However, when the sametenant leased floor spaces in more than one building, such spaces are counted separately for each building as if they are leased by different tenants. As for Shinjuku
Nomura Building, the number of tenants in the entire building is taken into account.
Note 2: Not disclosed due to compelling reasons.
Note 3: The Company has disposed “Kita-Sanjo Bldg.” and “NOF Midosuji Bldg.” on January 14, 2009, “Hiroshima Tatemachi NOF Bldg.” on February 27, 2009.
Note 4: Subtotal of “Rental Revenues” and “Portion of Rental Revenues” for each area is not disclosed due to compelling reasons.

27

4. OUTSTANDING AMOUNT AND CURRENT PRICE OF SPECIFIED TRANSACTIONS

2. CAPITAL EXPENDITURES DURING THE TWELFTH FISCAL PERIODThe outstanding amount and current price of the specified transactions as of October 31, 2009 are as follows.

The table below lists capital expenditures during the twelfth fiscal period in conjunction with the major works of renovation. During
the period, we have conducted engineering works totalling ¥1,004 million: capital expenditures of ¥779 million and repair expensesof ¥225 million combined all together.

Contract Amount (¥ mln) (Note 1)
Segment

Longer than a Year

Current
Price (¥ mln)
(Note 2)84,50081,500△955

84,50081,500△955

Type of Transaction

Interest-rate swap
Transaction other than market transaction (Receiving
floating-rate, paying fixed-rate)
Total

Name of Property (Location)

Note 1: Presented based on notional principal of contract.
Note 2: Evaluated at the price provided by the counterparty based on the prevailing market rate.

NOF Shibuya Koen-dori Bldg.
(Shibuya-ku, Tokyo)

5. STATUS OF THE OTHER ASSETS
Other than the Trust Beneficial Interest and Real Estate listed in the table under the title “3. Details of Portfolio Properties”, theCompany had no other assets to integrate into the portfolio as of October 31, 2009.

6. STATUS OF ASSETS BY COUNTRY AND REGION
As of the end of the twelfth fiscal period, the real estate and beneficial interest in real estate trust held by the Company by country
and region are as follows.
Appraisal Value as of Oct. 31, 2009 (Note 2)

Number of
Properties

Country

Total Portfolio Amount (Note 1)Japan¥372,790 million¥384,214 million

100.0%

50

Total¥372,790 million¥384,214 million

100.0%

50

Portion of Total Portfolio

Note 1: Total portfolio amount stands for the book value after depreciation and amortization.
Note 2: Appraisal value as of Oct. 31, 2009 stands for the value appraised by the real estate appraisers.

The table below lists major capital expenditures in conjunction with the refurbishment and/or renewal works scheduled for the future(finished in part) on the properties held as of October 31, 2009. The estimated cost of works includes the amount to be charged as“expenses” for accounting purposes.

Description of Works (Purpose)

Estimated
PeriodRenewal of air-conditioning system(To increase quality) (Note 1)

From: Nov. 2009To:
Nov. 2009

NOF Technoport Kamata Center Bldg. Renewal of through the wall air-conditioning system(Ota-ku, Tokyo)(To increase quality) (Note 2)

From: Nov. 2009To:
Mar. 2010

Sapporo North Plaza(Chuo-ku, Sapporo City)

From: Apr. 2010
To:
Jun. 2010

Refurbishment of multistoriedparking facility(To increase quality)

Note 1: These works have already been completed as of the date of this report.
Note 2: These works have already been implemented as of the date of this report.

Renewal of air-conditioning system(To increase quality)

From: May 2009To:
Oct. 200959

NOF Technoport Kamata Center Bldg. Renewal of through the wall air-conditioning system(Ota-ku, Tokyo)(To increase quality)

From: May 2009To:
Oct. 2009

114

Sapporo North Plaza(Chuo-ku, Sapporo City)

Refurbishment of multistoried parking facility(To increase quality)

From: Sep. 2009To:
Oct. 200957

NRE Hiroshima Bldg.
(Naka-ku, Hiroshima City)

Renewal of elevators(To increase quality)

From: May 2009
To:
Aug. 200971

Other Properties

Improvement of features

From: May 2009To:
Oct. 2009

476

Total

779

3. FUNDS RESERVED FOR THE LONG-TERM REPAIR PLANS
Subject to the long-term schedule for repairs and maintenance set down for each building, the Company has accounted for reserves fromthe operating cash flow to prepare for large-scale engineering works to be carried out in the future.

Balance brought forward from the previous period
Amount reserved during the period
Amount used during the period
Balance brought forward to the next period

1. PLAN OF CAPITAL EXPENDITURESNOF Shibuya Koen-dori Bldg.
(Shibuya-ku, Tokyo)

Cost of
Works (¥ mln)

Period of Works

12th Period
11th Period
10th Period
9th Period
8th Period
from May 1, 2009 from Nov. 1, 2008 from May 1, 2008 from Nov. 1, 2007 from May 1, 2007
to Oct. 31, 2009 to Apr. 30, 2009 to Oct. 31, 2008 to Apr. 30, 2008 to Oct. 31, 2007

Capital Expenditures

Name of Property (Location)

Description of Works (Purpose)

Total

Estimated Cost (¥ mln)
Paid during
Paid before
12th Period
12th Period

63

–

–

83

–

–

120

–

–

¥ mln

¥ mln

¥ mln

¥ mln

¥ mln

368
1,570
1,502
436

238
1,894
1,764
368

290
1,716
1,768
238

596
1,118
1,424
290

938
718
1,060
596

Expenses and Liabilities
1. EXPENSES RELATED TO ASSET MANAGEMENT

Asset management fees (Note)of which Management Fee I
of which Management Fee IIof which Management Fee III
Custodian fees
General administrative fees
Directors’ compensation
Other expenses
Total

12th Period
from May 1, 2009
to Oct. 31, 2009¥000

11th Period
from Nov. 1, 2008
to Apr. 30, 2009¥000

1,100,252
722,256
377,996–
29,101
65,24512,00097,3591,303,957

1,159,373
703,874
381,171
74,327
28,81367,58012,000113,228
1,380,996

Note : In the Asset Management Agreement between the Company and the Asset Management Company, there is no provision for the acquisition fees, which are payable to the
Asset Management Company by the Company on acquisition of a new property, and such fees are non-existent.

28

29

2. STATUS OF BORROWINGS
Financial Institutions

The status of borrowings from the financial institutions as of Oct.31, 2009 is as follows.

Financial Institutions

Short-term Borrowings
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
The Mizuho Corporate Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Trust and Banking Co., Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
The Mizuho Corporate Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Trust and Banking Co., Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
The Mizuho Corporate Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Trust and Banking Co., Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Trust and Banking Co., Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
The Mizuho Corporate Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Trust and Banking Co., Ltd.
The Mizuho Corporate Bank, Ltd.
Sumitomo Trust and Banking Co., Ltd.
Subtotal

Date
Borrowed

Sep. 24, 2008

Sep. 25, 2008

Dec. 24, 2008

Dec. 24, 2008

Mar. 26, 2009

Jun. 24, 2009

Long-term Borrowings to be Repaid within a Year
The Norinchukin Bank, Ltd.
Feb. 26, 2004
Feb. 26, 2004
Mitsui Life Insurance Company
The Chiba Bank, Ltd.
The Hiroshima Bank, Ltd.
Dec. 8, 2006
Tokio Marine & Nichido Fire Insurance Co. Ltd.
Nippon Life Insurance Company
Nov. 30, 2006
Sompo Japan Insurance Inc.
Sumitomo Mitsui Banking Corp.
The Yamanashi Chuo Bank, Ltd.
Aug. 26, 2008
The Chugoku Bank, Ltd.
The Bank of Fukuoka, Ltd.
Development Bank of Japan
Jun. 25, 2009
Subtotal
Total Short-term Borrowings

Outstanding as of Outstanding as of
Average
Oct. 31, 2009
Apr. 30, 2009
Interest Rate(¥000)(¥000)(%) (Note 1)

–
–
–
–
–
–
–
–
–
–
1,750,000
1,750,000
500,000
500,000
500,000
1,200,000
1,800,000
500,000
430,000
900,000
500,000
200,000
200,000
200,000
1,400,000
1,400,000
13,730,000

5,250,000
5,250,000
1,500,000
1,500,000
1,500,000
4,410,000
2,450,000
980,000
980,000
980,000
1,750,000
1,750,000
500,000
500,000
500,000
1,200,000
1,800,000
500,000
430,000
900,000
500,000
200,000
200,000
200,000––
35,730,000

3,000,000
1,000,000
1,000,000
500,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
500,000
13,000,000
26,730,000

3,000,000
1,000,000
1,000,000
500,000
1,000,000
–
–
–
–
–
–
–
6,500,000
42,230,000

1.43500

1.33500

1.44333

1.17545

1.184171.22545

Date of
Repayment

Use of
Method of
Repayment Borrowings

Note

Jun. 24, 2009

Jun. 25, 2009

Dec. 24, 2009

Balloonpayment(Note 2)

Unsecured/
UninsuredDec. 24, 2009

Mar. 26, 2010

Jun. 24, 2010

1.77500
1.50625

Feb. 26, 2010
Feb. 26, 2010

1.48375

Feb. 26, 2010

1.65500

Aug. 26, 2010

1.01455

Aug. 26, 2010

1.97000(Note 3)

Balloonpayment(Note 3)(Note 2)

Unsecured/
UninsuredLong-term Borrowings
Nippon Life Insurance Company
Sompo Japan Insurance Inc.
Sumitomo Mitsui Banking Corp.
The Yamanashi Chuo Bank, Ltd.
The Chugoku Bank, Ltd.
The Bank of Fukuoka, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust and Banking Corp.
Mitsui Sumitomo Insurance Co. Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
The Mizuho Corporate Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Trust and Banking Co., Ltd.
The Nomura Trust & Banking Co., Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
The Chiba Bank, Ltd.
The Hachijuni Bank, Ltd.
The Hiroshima Bank, Ltd.
The Keiyo Bank, Ltd.
The Mizuho Corporate Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Trust and Banking Co., Ltd.
The Hachijuni Bank, Ltd.
The Yamanashi Chuo Bank, Ltd.
The Mizuho Corporate Bank, Ltd.
The Chuo Mitsui Trust & Banking Co., Ltd.
The Iyo Bank, Ltd.
The 77 Bank, Ltd.
The Hyakujushi Bank, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Trust and Banking Co., Ltd.
The Chuo Mitsui Trust & Banking Co., Ltd.
The Nomura Trust & Banking Co., Ltd.
The Iyo Bank, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
Mitsubishi UFJ Trust and Banking Corp.
The Hyakujushi Bank, Ltd.
Mitsui Life Insurance Co., Ltd.
Taiyo Life Insurance Company
Daido Life Insurance Company
National Mutual Insurance Federation of Agricultural Cooperative
Development Bank of Japan
National Mutual Insurance Federation of Agricultural Cooperative
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
Mitsubishi UFJ Trust and Banking Corp.
The Chuo Mitsui Trust & Banking Co., Ltd.
The Iyo Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Trust and Banking Co., Ltd.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Mitsui Banking Corp.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Trust and Banking Co., Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
The Mizuho Corporate Bank, Ltd.
Development Bank of JapanThe Daiichi Mutual Life Insurance Company
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
Mitsubishi UFJ Trust and Banking Corp.
The Iyo Bank, Ltd.
Taiyo Life Insurance Company
Daido Life Insurance Company
Sumitomo Life Insurance Company
The Daiichi Mutual Life Insurance Company
Taiyo Life Insurance Company
Sumitomo Life Insurance Company
Development Bank of Japan
Development Bank of Japan
Subtotal
Total

Date
Borrowed

Nov. 30, 2006
Aug. 26, 2008

Dec. 8, 2008

Feb. 27, 2006

Dec. 10, 2007

Apr. 25, 2008

Mar. 19, 2007
Sep. 25, 2008

Dec. 8, 2006

Jun. 24, 2009

Nov. 29, 2005
Dec. 9, 2005
Feb. 26, 2008

Sep. 25, 2008
Nov. 4, 2008

Jun. 27, 2008
Mar. 17, 2005
Dec. 8, 2006
Dec. 8, 2008

Mar. 19, 2007
Feb. 26, 2008
Jun. 24, 2008
Jun. 25, 2009

Outstanding as of Outstanding as of
Average
Oct. 31, 2009
Apr. 30, 2009
Interest Rate(¥000)(¥000)(%) (Note 1)

–
–
–
–
–
–
1,000,000
500,000
1,000,000
1,000,000
1,000,000
500,000
3,000,000
2,000,000
4,000,000
1,000,000
500,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
500,000
2,000,000
1,000,000
1,000,000
1,000,000
1,000,000
2,000,000
2,000,000
1,000,000
2,000,000
1,000,000
2,000,000
1,000,000
5,600,000
4,500,000
1,400,000
500,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
2,000,000
1,500,000
2,500,000
1,000,000
500,000
1,000,000
1,000,000
3,000,000
3,000,000
2,000,000
2,000,000
2,000,000
2,000,000
1,000,000
1,000,000
2,000,000
1,000,000
4,500,000
1,000,000
1,000,000
1,000,000
1,000,000
2,000,000
3,000,000
1,000,000
3,000,000
4,000,000
9,500,000
117,500,000
144,230,000

1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
500,000
1,000,000
1,000,000
1,000,000
500,000
3,000,000
2,000,000
4,000,000
1,000,000
500,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
500,000
2,000,000
1,000,000
1,000,000
1,000,000
1,000,000
2,000,000
2,000,000
1,000,000
2,000,000
1,000,000
2,000,000
1,000,000––––
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
2,000,000
1,500,000
2,500,000
1,000,000
500,000
1,000,000
1,000,000
3,000,000
3,000,000
2,000,000
2,000,000
2,000,000
2,000,000
1,000,000
1,000,000
2,000,000
1,000,000
4,500,000
1,000,000
1,000,000
1,000,000
1,000,000
2,000,000
3,000,000
1,000,000
3,000,000
4,000,000–
102,000,000
144,230,000

Date of
Repayment

1.65500

Aug. 26, 2010

1.12667

Aug. 26, 2010

1.12182

Dec. 8, 2010

1.68000

Feb. 26, 2011

1.43200

Jun. 10, 2011

1.44800

Aug. 25, 2011

1.63825

Aug. 26, 2011

1.43950

Sep. 25, 2011

1.89764

Feb. 26, 2012

Use of
Method of
Repayment Borrowings

Balloonpayment
1.39575

Jun. 24, 2012

1.43750

Aug. 26, 2012

1.53625

Aug. 26, 2012

1.46000

Aug. 26, 2012

1.61150

Sep. 25, 2012

1.51175

Nov. 4, 2012

1.87200

Dec. 27, 2012

1.75250
1.99250

Feb. 26, 2013
Feb. 26, 2013

1.68680

Dec. 8, 2013

1.98000

Mar. 19, 2014

1.91875

Feb. 26, 2015

2.31750

Jun. 24, 2015

1.97000(Note 3)(Note 2)

Note

Unsecured/
Uninsured(Note 3)Note 1: The average interest rate is weighted by the balance of each borrowing as at the end of the period and rounded to the nearest fifth decimal place. As for the borrowings,
which were hedged by interest-rate swaps for the purpose of avoiding interest rate fluctuation risk, the swapped interest rates are used to calculate the weighted averageof interest.
Note 2: The use of borrowings is to purchase property-related assets, the related miscellaneous expenses and the repayment of borrowings.
Note 3: Installments of ¥250 million will be made on the 25th of every sixth month starting on December 25, 2009, with the remaining payment of ¥6,750 million to be repaid on
June 25, 2016.

30

31

3. STATUS OF INVESTMENT CORPORATION BONDS

4. TRANSACTIONS WITH RELATED PARTIES AND MAJOR SHAREHOLDERS

The status of investment corporation bonds issued as of October 31, 2009 is as follows.

(1) Transactions
Not applicable.

Name of Bonds

Issue DateFirst Series Unsecured Investment
Corporation Bonds

Mar. 16,
2005

Balance as ofOct. 31, 2009(¥ mln)5,000

Balance as ofApr. 30, 2009(¥ mln)5,000

Interest
Rate
(%)

1.85

Maturity Date

Method of
Repayment

Use ofProceeds

Mar. 16,
2015

Balloon(Note 1) (Note 2)
payment

NoteMar. 16,
2005

5,000

5,000

2.47

Mar. 16,
2020

Balloon(Note 1) (Note 2)
payment

Third Series Unsecured Investment Nov. 28,
Corporation Bonds
2005

10,00010,0001.19

Nov. 29,2010

Balloon(Note 1) (Note 3)
payment

Fourth Series Unsecured
Investment Corporation Bonds

Nov. 28,
2005

10,00010,0002.05

Nov. 30,
2015

Balloon(Note 1) (Note 3)
payment

Fifth Series Unsecured Investment
Corporation Bonds

Mar. 19,
2007

5,000

5,000

1.61

Mar. 19,2012

Balloon(Note 1) (Note 3)
payment

Sixth Series Unsecured Investment Mar. 19,
Corporation Bonds
2007

5,000

5,000

2.21

Mar. 17,2017

Balloon(Note 1) (Note 3)
payment

2.90

Mar. 17,
2028

Balloon(Note 1) (Note 3)
payment

Second Series Unsecured
Investment Corporation Bonds

Seventh Series Unsecured
Investment Corporation Bonds
Total

Mar. 19,
2007

4,500

4,500

44,50044,500Note 1: The uses of proceeds are to purchase the property-related assets, pay for the costs, and to repay borrowings.
Note 2: Ranking Pari Passu among the investment corporation bonds for qualified institutional investors only.
Note 3: Ranking Pari Passu among the specified investment corporation bonds.

4. STATUS OF SHORT-TERM INVESTMENT CORPORATION BONDS
There are no outstanding short-term investment corporation bonds as of the end of the twelfth fiscal period.

Trading during the Twelfth Fiscal Period
1. STATUS OF REAL ESTATES AND ASSET-BACKED SECURITIES TRADING
Not applicable.

2. STATUS OF OTHER ASSETS
Not applicable. In addition, the Company’s assets other than the above mentioned real estates and asset-backed securities, aremostly comprised of direct bank deposits and bank deposits in trust.

3. PRICE INVESTIGATION(1) Real Estates
Not applicable.
(2) Others
With regard to the properties the Company has traded but not included in the above table”(1) Real Estates,” the priceinvestigation procedures were conducted by Ernst & Young ShinNihon LLC subject to the requirement by Article 201 of theInvestment Trust Law.
For the twelfth fiscal period (from May 1, 2009 to October 31, 2009), one OTC derivatives transaction was subject toinvestigation. Ernst & Young ShinNihon LLC was requested to investigate the details of one transaction including the name ofcounterparty, issues, the number of execution, financial instruments/monetary indicators, put/call options, exercise prices, theperiod of execution of right, the trading period, etc. The investigation report has been received.

32(2) Fees Paid to Related Parties and Major Shareholders
Table of fees paid to related parties and major shareholders during the twelfth fiscal period is as follows.
Name of Related Party and Major Shareholders

Contract-out fees
Property management fees
Other expenses

Amount Paid (A)(¥000)

Nomura Building Management Co., Ltd. (Note 1)
Flagship Properties, Inc. (Note 2)
Nomura Real Estate Development Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Building Management Co., Ltd.
PRIME X. Co., Ltd.

649,447916
174,396
23,86530,39432,452285

Portion(A) / (B)(%)

Total Amount Paid (B)(¥000)

59.7
0.1
66.5
9.1
31.4
33.5
0.3

1,088,143
262,147
96,844Note 1: In addition to the Property Management Agreement, the Company has entrusted Nomura Building Management Co., Ltd. with daily maintenance of building and equipments, the cost of which is included in “Contract-out Fees”.
Note 2: The Company has entrusted certain jobs such as receipt of rents, payment of disbursements and notification of repairs in conjunction with the sublease of JAL Building to
Flagship Properties. The Contract-out fees paid to Flagship Properties include remuneration for these services.
Note 3: Besides the above, the Company has made the following payments for repair works during the twelfth fiscal period.
Name of Related Party
Nomura Real Estate Development Co., Ltd.
Nomura Building Management Co., Ltd.

Amount Paid (¥000)
35,083400,375

The management fees paid to the property management companies, which are related parties, are broken down as follows.
Name of Property

Shinjuku Nomura Bldg.
JAL Bldg.
Tennozu Park Side Bldg.
NOF Shibuya Koen-dori Bldg.
Secom Medical Bldg.
Nishi-Shinjuku Showa Bldg.
NRE Shibuya Dogenzaka Bldg.
NOF Tameike Bldg.
NOF Shinagawa Konan Bldg.
NOF Surugadai Plaza Bldg.
PMO Nihonbashi Honcho
NRE Higashi-nihonbashi Bldg.
Hatchobori NF Bldg.
NOF Minami-Shinjuku Bldg.
NRE Ueno Bldg.
NOF Technoport Kamata Center Bldg.
Kichijoji Mark Bldg.
Faret Tachikawa Center Square
NOF Yokohama Nishiguchi Bldg.
NOF Shin-Yokohama Bldg.
NRE Sapporo Bldg.
Omron Kyoto Center Bldg.
NRE Osaka Bldg.
NRE Nishi-Umeda Bldg.
NRE Yotsubashi Bldg.
NRE Hiroshima Bldg.
Shinjuku Sanshin Bldg.
MY Higashi Gotanda Bldg.
Central Kyobashi Bldg.
Central Shintomicho Bldg.
Sunworld Yotsuya Bldg.
NOF Toyo-cho Bldg.
Toshin Meguro Bldg.
NOF Kawasaki Higashiguchi Bldg.
NOF Utsunomiya Bldg.
NOF Nagoya Yanagibashi Bldg.

Property Management Company

Property Management Fees(¥000) (Note 1) (Note 2)

Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd. (Note 3)
Nomura Building Management Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Building Management Co., Ltd.

37,0892,851
15,594
8,780
3,789
6,605
3,862
5,291
5,560
5,168
3,043
3,117
2,227
2,273
4,919
8,996
1,701
5,017
5,564
2,498
3,968
6,134
13,098
4,171
8,126
4,941
4,043
2,274
1,503
1,205
586
1,753
600
5,248
4,242
2,408

Note 1: “Property Management Fees” are the aggregated sum of the basic fee and the incentive fee.
Note 2: Daily maintenance of building and equipments is entrusted to Nomura Building Management, but the fees associated with such works are not included here.
Note 3: The Company has changed the property management company to Nomura Building Management Co., Ltd. as of November 1, 2009.

5. STATUS OF BUSINESS WITH THE ASSET MANAGEMENT COMPANY OVER ITS SUBSIDIARY BUSINESSThere is no relevant matter under this subject as Nomura Real Estate Asset Management Co., Ltd., the asset management companyof the Company, is not in any subsidiary business.

33

Other Information
Financial Section

1. NOTICE
The fourth General Unitholders’ Meeting was held on July 27, 2009. Summary of main items approved at the General Unitholders’Meeting are as follows:
AgendaSummary

The Articles of Incorporation were changed for the following reasons:• To make required amendments in conjunction with the enforcement of the Law concerning the partial
amendments of the Securities and Exchange Law (Law No. 65 of 2006) and the preparation/revision of
the Law concerning Investment Trusts and Investment.
• To make required amendments in conjunction with the tax reform, etc.
Partial Amendment of the• To make revisions in conjunction with computerizing the investment securities due to the partial
Articles of Incorporation
amendments of the Law concerning transfer of the corporate bonds, etc., in order to rationalize closingof the stock trading, etc., (Law No. 88 of 2004)• To limit the number of proxy for the unitholder who would be able to attend the General Unitholders’Meeting as one.
• Other, including deletion of provisions which are already unnecessary and revision of expressions, etc.
Appointment of an
Mr. Yuichi Maruko was appointed as the Executive Director. The term shall be two years from August 8,
Executive Director
2009.
Appointment of a
Substitute Executive
Mr. Atsushi Ogata was appointed as the Substitute Executive Director.
Director
Appointment of four
Mr. Shuhei Yoshida, Mr. Eitoku Aikawa, Mr. Saneaki Ichijo, and Mr. Naohito Miya were appointed as
Supervisory Directors
Supervisory Directors. The terms shall be two years from August 8, 2009.

2. STATUS OF BENEFICIAL INTEREST IN INVESTMENT TRUSTS ESTABLISHED BY THE COMPANY
Not applicable.

3. OTHER MATTERS
For the purpose of this report, the numbers of amount below unit are truncated and the numbers in percentage are rounded to unit
unless otherwise mentioned specifically.

SORA Shin-Osaka 21

Contents

Balance Sheets ........................................................... 36
Statements of Income and Retained Earnings............ 38
Statements of Changes in Net Assets ........................ 39
Statements of Cash Flows .......................................... 40
Notes to Financial Statements .................................... 41

34

35

Balance Sheets

As of October 31, 2009

Thousands of Yen
As of April 30, 2009ASSETS
Current Assets:
Cash and bank deposits
Rental receivables
Corporate taxes refundable
Other current assets
Total current assets¥

34,422,911
233,750
2,092
335,316
34,994,069¥

34,333,017
275,564
3,858
355,494
34,967,933

263,529,890
122,015,809
1,230,024
222,166
30,94682,141

263,516,082
121,357,088
1,172,733
214,744
31,42333,095

SubtotalLess accumulated depreciation
Net property and equipment

387,110,976(16,221,547)
370,889,429

386,325,165(14,393,003)
371,932,162

Total Assets
The accompanying notes to financial statements are an integral part of these statements.

As of April 30, 2009

LIABILITIESProperty and Equipment, at Cost:Land
Buildings and structures
Machinery and equipment
Tools, furniture and fixtures
Leased assets
Construction in progress

Investments and Other Assets:
Leasehold rights
Intangible assets
Long-term prepaid expenses
Security deposits
Deferred investment corporation bond issuance costs
Total investments and other assets

Thousands of Yen
As of October 31, 2009

1,900,905
2,909
24,626
410,850
90,1652,429,455

1,900,905
3,201
41,165
410,850
96,802
2,452,923¥ 408,312,953¥ 409,353,018

Current Liabilities:
Trade accounts payable
Other accounts payable
Short-term debt
Accrued expenses
Accrued consumption taxes
Rent received in advance
Other current liabilities
Total current liabilities¥

728,735
1,395,019
26,730,000
921,848
210,8222,270,821
185,018
32,442,263¥

739,721
1,530,105
42,230,000
918,51954,7532,286,617
79,70147,839,416

Long-term Liabilities:
Investment corporation bonds
Long-term debt
Security deposits from tenants
Other long-term liabilities
Total long-term liabilities

44,500,000
117,500,000
23,061,123
15,586
185,076,709

44,500,000
102,000,000
24,146,613
19,039170,665,652

Total Liabilities

217,518,972

218,505,068

Unitholders' Equity:
Unitholders' capital
Retained earnings
Total unitholders' equity

185,455,447
5,338,534
190,793,981

185,455,447
5,392,503
190,847,950

Total Net Assets

190,793,981

190,847,950¥ 408,312,953¥ 409,353,018

NET ASSETS

Total Liabilities and Net Assets
The accompanying notes to financial statements are an integral part of these statements.

36

37

Statements of Income and Retained Earnings

Statements of Changes in Net Assets

For the period
from May 1, 2009
to October 31, 2009

Thousands of Yen
For the period
from November 1, 2008
to April 30, 2009

For the period from May 1, 2009 to October 31, 2009
Unitholders'CapitalRetained
Earnings

305,123¥185,455,447¥5,392,503¥190,847,950––¥190,847,950

–
–

–
–

(5,392,439)
5,338,470(5,392,439)
5,338,470

–
–

–
–

(5,392,439)
5,338,470

305,123¥185,455,447¥5,338,534¥190,793,981––¥190,793,981

Unitholders'CapitalRetained
Earnings

Total
Unitholders'Equity305,123¥185,455,447¥5,255,922¥190,711,369––¥190,711,369

–
–

–
–

(5,255,744)
5,392,325(5,255,744)
5,392,325

–
–

–
–

(5,255,744)
5,392,325

305,123¥185,455,447¥5,392,503¥190,847,950––¥190,847,950

Units

Operating Revenues and Expenses
Balance as of April 30, 2009
Operating Revenues:
Real estate rental revenues
Gain on sales of real estate¥

14,203,926–¥

14,281,598
1,128,049

14,203,926

15,409,647

5,761,133–
1,100,252
94,346
6,119
103,241

5,917,157
1,033,415
1,159,373
96,394–125,229

7,065,091

8,331,568

7,138,835

7,078,079

8,946
20,73830,545
33,106

29,68463,651

1,179,077
145,409433,413
6,637
64,491

1,154,971
84,941
428,087
6,636
73,847

1,829,027

1,748,482

5,339,492

5,393,248

Income Taxes:
Current
Deferred

1,027
(5)

917
6

Net Income

5,338,470

5,392,325

64

178

Operating Expenses:
Real estate rental expenses
Loss on sales of real estate
Asset management fees
Administrative service and custodian fees
Bad debts expenses
Other operating expenses

Cash distribution paid
Net income
Balance as of October 31, 2009

Deferred
Total Valuation
Total
Hedge Gains and Translation(Losses)
Adjustments Net Assets

For the period from November 1, 2008 to April 30, 2009
Units

Balance as of October 31, 2008
Cash distribution paid
Net income
Balance as of April 30, 2009

Operating Profit

Thousands of Yen
Total
Unitholders'EquityThousands of Yen
Deferred
Total Valuation
Total
Hedge Gains and Translation(Losses)
Adjustments Net Assets

The accompanying notes to financial statements are an integral part of these statements.

Non-Operating Revenues and Expenses
Non-Operating Revenues:
Interest income
Other non-operating revenues

Non-Operating Expenses:
Interest expense
Loan arrangement fees
Interest expense on investment corporation bonds
Amortization of investment corporation bond issuance costs
Other non-operating expenses

Income before Income Taxes

Retained earnings brought forward
Retained Earnings at End of Period¥

5,338,534¥

5,392,503

The accompanying notes to financial statements are an integral part of these statements.

38

39

Statements of Cash Flows

Notes to Financial Statements

For the period
from May 1, 2009
to October 31, 2009

Thousands of Yen
For the period
from November 1, 2008
to April 30, 2009

Cash Flows
Cash Flows from Operating Activities
Income before income taxes
Depreciation
Amortization of long-term prepaid expenses
Amortization of investment corporation bond issuance costs
Interest income
Interest expense
Loss on disposal of property and equipment
Decrease in rental receivables(Decrease) in trade accounts payable
Increase in other accounts payable
Increase in accrued consumption taxes(Decrease) in rent received in advance
Decrease in tangible fixed assets due to sales
Decrease in tangible fixed assets in trust due to sales
Changes in other current assets/liabilities

5,339,492
1,835,796
16,566
6,637(8,946)
1,612,490
19,23041,813(10,986)
71,638156,069(15,796)––
133,259¥

5,393,248
1,862,688
16,5896,636(30,545)
1,583,058
879
19,185(81,450)
245,955
1,531(80,019)
3,411,999
15,272,662(29,792)

SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by operating activities

9,197,262
15,598(1,623,599)
739
7,590,000

27,592,624
23,893(1,371,542)
1,577
26,246,552

Cash Flows from Investing Activities
Payments into time deposits
Proceeds from time deposits
Payments for purchases of property and equipment
Payments for purchases of intangible assets
Reimbursement of security deposits to tenants
Proceeds from security deposits from tenants
Proceeds from security deposits
Net cash used in investing activities–
2,260,000(1,029,940)–(1,608,402)
522,913–
144,571(2,260,000)–(32,609,632)(1,901)(2,136,298)
2,877,520
450(34,129,861)

Cash Flows from Financing Activities
Proceeds from short-term debt
Repayment of short-term debt
Proceeds from long-term debt
Repayment of long-term debt
Distributions to unitholders
Net cash provided by financing activities

2,800,000(24,800,000)
22,000,000–(5,384,677)(5,384,677)

12,930,000(11,300,000)
20,000,000(15,000,000)(5,241,500)
1,388,500

Net Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period
Cash and Cash Equivalents at End of Period

2,349,894
32,073,017
34,422,911(6,494,809)
38,567,826
32,073,017

The accompanying notes to financial statements are an integral part of these statements.

40

¥

¥

¥

1. ORGANIzATION
Nomura Real Estate Office Fund, Inc. (the “Company”) is a real estate investment corporation formed to own and invest primarily in
office properties. The Company is externally managed by a licensed asset management company, Nomura Real Estate AssetManagement Co., Ltd. (“NREAM”). NREAM is a wholly-owned subsidiary of Nomura Real Estate Holdings, Inc.
On August 7, 2003, the Company was incorporated under the Law Concerning Investment Trusts and Investment Corporations(the “Investment Trust Law”) of Japan. On December 4, 2003, the Company was listed on the Tokyo Stock Exchange as the 9th
J-REIT and started operations on the following day. As of October 31, 2009, the Company owned a portfolio of 50 office properties
containing an aggregate of approximately 435,901.82 square meters of leasable area and leased office space to 666 tenants.

2. BASIS OF PRESENTATIONThe Company maintains its accounting records and prepares its financial statements in accordance with accounting principles
generally accepted in Japan (“Japanese GAAP”), including provisions set forth in the Investment Trust Law of Japan, the Corporation
Law of Japan, the Financial Instruments and Exchange Law of Japan and related regulations, which are different in certain respects
as to the application and disclosure requirements of International Financial Reporting Standards.
The accompanying financial statements are a translation of the audited financial statements of the Company, which wereprepared in accordance with Japanese GAAP and were presented in the Securities Report of the Company filed with the Kanto Local
Finance Bureau. In preparing the accompanying financial statements, certain reclassifications and modifications have been made to
the financial statements issued domestically in order to present them in a format that is more familiar to readers outside Japan. In
addition, the notes to financial statements include certain information that might not be required under Japanese GAAP but ispresented herein as additional information. Amounts have been rounded to the nearest thousand of yen in the accompanying
financial statements and the notes thereto, whereas amounts were truncated in the Japanese financial statements prepared inaccordance with Japanese GAAP.
The Company’s fiscal period is a six-month period which ends at the end of April or October. The Company does not prepare
consolidated financial statements because it has no subsidiaries.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESCash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits placed with banks and short-term investments that are highly
liquid, readily convertible to cash, with an insignificant risk of market value fluctuation, and with a maturity of three months orless when purchased.
Property and equipment (Except for leased assets)
Property and equipment are stated at cost, which includes the purchase price and related costs for acquisition, lessaccumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the fixed
assets outlined below:
Buildings
3 - 70 years
Structures
2 - 45 years
Machinery and equipment
3 - 15 years
Tools, furniture and fixtures
2 - 18 years
Intangible assets (Except for leased assets)
Intangible assets are amortized by the straight-line method.
Leased Assets
Depreciation of leased assets under finance lease transactions, excluding those in which the ownership of the leased assets isdeemed to be transferred to the lessee, is calculated by the straight-line method, over the lease term with no residual value.
Impairment of fixed assets
The Company reviews fixed assets for impairment whenever events or changes in circumstances indicate that the carrying
amount of its fixed assets may not be recoverable. An impairment loss is recognized if the carrying amount of an asset
exceeds the aggregate estimated future cash flows. If a fixed asset is determined to be impaired, it is written down to its
recoverable amount and the write-down is recorded as an impairment loss during the period in which it occurs. No impairment
losses have been recognized to date.
Deferred investment corporation bond issuance costs
Deferred investment corporation bond issuance costs are amortized by the straight-line method over the respective terms of
the bonds.
Accounting treatment of beneficial interests in real estate
All assets and liabilities held in trust, for which the real estate in possession of the Company was entrusted, and all related
earnings and expenses incurred are reflected in the accompanying balance sheets and statements of income and retained
earnings, respectively.
Revenue recognition
Operating revenues consist of rental revenues including base rents and common area charges, and other operating revenues
including utility charge reimbursements, parking space rental revenues and other income. Rental revenues are generally
recognized on an accrual basis over the life of each lease. Utility charge reimbursements are recognized when earned and theiramounts are reasonably estimated.

41

Property related taxes
Property and equipment is subject to property related taxes, urban planning taxes and depreciable property taxes on a calendar
year basis. These taxes are generally charged to income during the period. The sellers of the properties were liable for property
related taxes for the calendar year including the period from the date of purchase by the Company through the end of the year
since the taxes are imposed on the owner registered in the record as of January 1st based on the assessment made by the
local government. The capitalized property related taxes amounted to ¥86,862 thousand for the six-month period ended April
30, 2009. No such taxes were imposed for the six-month period ended October 31, 2009 as the Company did not acquire any
properties.

6. SHORT-TERM DEBT

Income taxes
Deferred tax assets and liabilities are computed based on the differences between the financial statements and income tax
bases of assets and liabilities using the applicable statutory tax rates.

Unsecured loans from banks due on June 24, 2009
Unsecured loans from banks due on June 25, 2009
Unsecured loans from banks due on December 24, 2009
Unsecured loans from banks due on December 24, 2009
Unsecured loans from a bank due on February 26, 2010
Unsecured loans from an insurance company due on
February 26, 2010
Unsecured loans principally from banks due on February 26,
2010
Unsecured loans from banks due on March 26, 2010
Unsecured loans from banks due on June 24, 2010
Unsecured loans from insurance companies due on August
26, 2010
Unsecured loans from banks due on August 26, 2010
Unsecured loans from a bank due on June 25, 2016 (Note 2)
Total

Consumption taxes
Consumption taxes received and paid are not included in the accompanying statements of income and retained earnings.
Derivative financial instruments
The Company utilizes interest-rate swap contracts as derivative financial instruments only for the purpose of hedging its
exposure to changes in interest rates. The Company deferred recognition of gains or losses resulting from changes in the fairvalue of interest-rate swap contracts which meet the criteria for deferral hedge accounting.
Although the deferred hedge treatment is generally applied, the Company applies special treatment to those interest-rate
swap contracts that meet the criteria for such special treatment. Under the special treatment, interest-rate swaps are notremeasured at fair value; instead, the net amount paid or received under the interest rate swap contract is recognized andincluded in interest expense or income.

4. CASH AND CASH EQUIVALENTS
Cash and cash equivalents as of October 31, 2009 and April 30, 2009 consist of the following:Thousands of Yen
For the period
from May 1, 2009
to October 31, 2009

For the period
from November 1, 2008
to April 30, 2009

¥ 34,422,911–¥ 34,422,911¥ 34,333,017(2,260,000)¥ 32,073,017

Cash and bank deposits
Bank deposits with original maturities of more than three months
Cash and cash equivalents

Short-term debt as of October 31, 2009 and April 30, 2009 consist of the following:Amount(Thousandsof Yen)Weightedaverageinterest rate
(Note 1)

Amount(Thousandsof Yen)––¥ 5,000,000
3,930,000
3,000,000––
1.44333%
1.17545%
1.77500%¥ 15,000,000
9,800,000
5,000,000
3,930,000
3,000,000

1.43500%
1.33500%
1.44333%
1.42167%
1.77500%

1,000,000

1.50625%

1,000,000

1.50625%2,500,000

1.48375%

2,500,000

1.48375%

2,000,000
2,800,000

1.18417%1.22545%

2,000,000–

1.18417%–2,000,000

1.65500%––

4,000,000
500,000¥26,730,000

1.01455%
1.97000%––¥42,230,000––

Note 1: The weighted–average interest rate is weighted by the balance of each borrowing as at the end of the period and rounded to the nearest fifth decimal place. As for the borrowings, which were hedged by interest–rate swaps for the purpose of avoiding interest rate fluctuation risk, the swapped interest rates are used to calculate the weighted
average of interest.
Note 2: Installments of ¥250 million will be made on the 25th day of every sixth month starting on December 25, 2009, with the remaining payment of ¥6,750 million to be repaid
on June 25, 2016.

The Company entered into ¥40,000 million credit facilities in the form of commitment lines with five financial institutions for thesix–month periods ended October 31, 2009 and April 30, 2009. The total unused amounts of such credit facilities were ¥33,000
million as of October 31, 2009 and ¥8,200 million as of April 30, 2009.

7. LONG–TERM DEBTAs of April 30, 2009

Acquisition Costs

Book Value

Acquisition Costs

Book Value¥ 54,948,317
25,611,320(1,403,845)
465,199(64,660)
4,911
(556)
208,581,573
96,404,489(14,288,144)
764,825(381,312)
217,255(73,700)
30,946(9,330)82,141¥370,889,429¥ 54,948,317¥ 54,934,510
25,545,536(986,467)
465,086(44,825)
4,790
(113)
208,581,573
95,811,551(12,950,872)
707,646(346,639)
209,954(57,670)
31,423(6,416)33,095¥371,932,162¥ 54,934,510

24,207,475
400,5394,355
208,581,573
82,116,345
383,513
143,555
21,61682,141¥370,889,429

24,559,069
420,261
4,677
208,581,573
82,860,679
361,007152,284
25,00733,095¥371,932,162

Weighted–
averageinterest rate
(Note 1)

Amount(Thousandsof Yen)Thousands of Yen
As of October 31, 2009

As of April 30, 2009

As of October 31, 2009

Property and equipment as of October 31, 2009 and April 30, 2009 consist of the following:

42

Weightedaverageinterest rate
(Note 1)

Long–term debt as of October 31, 2009 and April 30, 2009 consists of the following:

5. SCHEDULE OF PROPERTY AND EQUIPMENTLand
Buildings and structures
Accumulated depreciation
Machinery and equipment
Accumulated depreciation
Tools, furniture and fixtures
Accumulated depreciation
Land in trust
Buildings and structures in trust
Accumulated depreciation
Machinery and equipment in trust
Accumulated depreciation
Tools, furniture and fixtures in trust
Accumulated depreciation
Lease assets in trust
Accumulated depreciation
Construction in progress in trust
Total

As of April 30, 2009

As of October 31, 2009

Unsecured loans from insurance companies due on August
26, 2010
Unsecured loans from banks due on August 26, 2010
Unsecured loans principally from banks due on December 8,
2010
Unsecured loans from banks due on February 26, 2011
Unsecured loans from banks due on June 10, 2011
Unsecured loans from banks due on August 25, 2011
Unsecured loans from banks due on August 26, 2011
Unsecured loans from banks due on September 25, 2011
Unsecured loans from banks due on February 26, 2012
Unsecured loans from banks due on June 24, 2012
Unsecured loans principally from insurance companies due
on August 26, 2012
Unsecured loans from a financial institution due on August
26, 2012
Unsecured loans from banks due on August 26, 2012
Unsecured loans from banks due on September 25, 2012
Unsecured loans from banks due on November 4, 2012
Unsecured loans from banks due on December 27, 2012
Unsecured loans from a bank due on February 26, 2013
Unsecured loans from an insurance company due on
February 26, 2013
Unsecured loans from banks due on December 8, 2013
Unsecured loans from insurance companies due on March
19, 2014
Unsecured loans from an insurance company due on
February 26, 2015
Unsecured loans principally from insurance companies due
on June 24, 2015
Unsecured loans from a bank due on June 25, 2016 (Note 2)
Total

–

Amount(Thousandsof Yen)–¥2,000,000

Weighted–
averageinterest rate
(Note 1)1.65500%––

4,000,000

1.12667%2,500,000

1.12182%2,500,000

1.35750%

7,500,000
8,500,000
4,500,000
4,000,000
2,000,000
11,000,000
12,000,000

1.68000%
1.43200%
1.44800%
1.63825%
1.43950%
1.89764%
1.39575%

7,500,000
8,500,000
4,500,000
4,000,000
2,000,000
11,000,000–

1.68000%
1.43200%
1.44800%
1.63825%
1.43950%
1.89764%–5,000,000

1.43750%

5,000,000

1.43750%

1,000,000

1.53625%

1,000,000

1.53625%

7,500,000
2,000,000
10,000,000
5,000,000
1,000,000

1.46000%
1.61150%
1.51175%
1.87200%
1.75250%

7,500,000
2,000,000
10,000,000
5,000,000
1,000,000

1.46000%
1.61150%
1.51175%
1.87200%
1.75250%

2,000,000

1.99250%

2,000,000

1.99250%

7,500,000

1.68680%

7,500,000

1.68680%

4,000,000

1.98000%

4,000,000

1.98000%

3,000,000

1.91875%

3,000,000

1.91875%

8,000,000

2.31750%

8,000,000

2.31750%

9,500,000¥117,500,000

1.97000%–¥102,000,000

–

¥

43

Note 1: The weighted–average interest rate is weighted by the balance of each borrowing as at the end of the period and rounded to the nearest fifth decimal place. As for the borrowings, which were hedged by interest–rate swaps for the purpose of avoiding interest rate fluctuation risk, the swapped interest rates are used to calculate the weighted
average of interest.
Note 2: Installments of ¥250 million will be made on the 25th of every sixth month starting on December 25, 2009, with the remaining payment of ¥6,750 million to be repaid on
June 25, 2016.

The scheduled repayment amounts of long–term debt for each of the five years after the balance sheet date (excluding the long–term debt to be repaid within a year) are as follows.
Thousands of Yen

Long–term debt

1–2 years

2–3 years

3–4 years

4–5 years

29,500,000

39,000,000

18,500,000

12,000,000

8. INVESTMENT CORPORATION BONDS

12. INCOME TAXESThe Company, as an investment corporation, is subject to corporate income taxes at a statutory tax rate of approximately 40% for
the six–month periods ended October 31, 2009 and April 30, 2009. However, the Company may deduct dividend distributions paid to
its unitholders from its taxable income amounts, provided such distributions meet the requirements under the Special Taxation
Measures Law of Japan. Under this law, an investment corporation must meet a number of tax requirements, including arequirement to distribute in excess of 90% of its distributable income for the fiscal period, in order to deduct such amounts. If theinvestment corporation does not satisfy all of the requirements, the entire taxable income of the investment corporation will be
subject to regular corporate income taxes.
Since the Company distributed approximately 100% of its distributable income in the form of cash distributions totaling¥5,338,432 thousand and ¥5,392,438 thousand for the six–month periods ended October 31, 2009 and April 30, 2009, respectively,
such distributions were treated as deductible distributions for purposes of corporate income taxes. The following summarizes thesignificant differences between the statutory tax rate and the effective tax rates:

Details of investment corporation bonds outstanding are summarized as follows:
As of October 31, 2009
Amount(Thousandsof Yen)First Series of Unsecured Investment Corporation Bonds
Due on March 16, 2015
Second Series of Unsecured Investment Corporation Bonds
Due on March 16, 2020
Third Series of Unsecured Investment Corporation Bonds
Due on November 29, 2010
Fourth Series of Unsecured Investment Corporation Bonds
Due on November 30, 2015
Fifth Series of Unsecured Investment Corporation Bonds
Due on March 19, 2012
Sixth Series of Unsecured Investment Corporation Bonds
Due on March 17, 2017
Seventh Series of Unsecured Investment Corporation Bonds
Due on March 17, 2028
Total

Weighted–
averageinterest rate

As of April 30, 2009
Amount(Thousandsof Yen)Weighted–
averageinterest rate

For the period
from November 1, 2008
to April 30, 200939.33%(39.32)0.01
0.02%

39.33%(39.32)0.01
0.02%¥ 5,000,000

1.85000%¥ 5,000,000

1.85000%

5,000,000

2.47000%

5,000,000

2.47000%

13. BREAKDOWN OF REAL ESTATE RENTAL REVENUES AND EXPENSES

10,000,000

1.19000%

10,000,000

1.19000%

Real estate rental revenues and expenses for the six–month period ended October 31, 2009 and April 30, 2009 consist of thefollowing:

10,000,000

2.05000%

10,000,000

2.05000%

5,000,000

1.61000%

5,000,000

1.61000%

5,000,000

2.21000%

5,000,000

2.21000%

4,500,000

2.90000%

4,500,000

2.90000%¥44,500,000¥44,500,000

9. UNITHOLDERS’ EQUITYThe Company issues only non–par value investment units in accordance with the Investment Trust Law. The entire amount of theissue price of new units is designated as stated capital. The Company is required to maintain net assets of at least ¥50,000 thousandas set forth in the Investment Trust Law.

10. PER UNIT INFORMATIONThe net asset values per unit and the net income per unit as of October 31, 2009 and April 30, 2009 were as follows:
Net asset values per unit
Net income per unit

Statutory tax rate
Deductible cash distributions
Other
Effective tax rate

For the period
from May 1, 2009
to October 31, 2009

As of October 31, 2009

As of April 30, 2009

¥625,301¥ 17,496¥625,478¥ 17,672

The net income per unit is calculated by dividing net income by the weighted–average number of units outstanding for therespective six–month period.

Thousands of Yen

Real estate rental revenues
Rental revenues
Rental revenues
Common area charges
Non–rental revenues
Parking revenues
Incidental income
Other miscellaneous revenues
Real estate rental expenses
Property management costs
Property management fees
Utility expenses
Property and other taxes
Casualty insurance
Repairs and maintenance
Depreciation
Other rental expenses
Profit

For the period
from May 1, 2009
to October 31, 2009

For the period
from November 1, 2008
to April 30, 2009¥14,203,926
12,871,402
10,530,796
2,340,606
1,332,524
292,999
970,652
68,873
5,761,133
1,088,143
262,147
953,992
1,129,535
27,218225,282
1,835,578
239,238¥ 8,442,793¥14,281,598
13,022,991
10,668,132
2,354,859
1,258,607
306,928880,072
71,607
5,917,157
1,105,726
288,967
987,226
982,905
27,100374,258
1,862,469
288,506¥ 8,364,441

Note: The basis for calculating net income per unit is as follows.

Net income (Thousands of Yen)
Amount not available to ordinary unitholders (Thousands of Yen)
Net income available to ordinary unitholders (Thousands of Yen)
Average number of units during the period

As of October 31, 2009

As of April 30, 2009

¥5,338,470–¥5,338,470
305,123¥5,392,324–¥5,392,324
305,123

11. RELATED PARTY TRANSACTIONSParent Company, corporate shareholders and otherNot applicable
Directors, individual shareholders and otherNot applicable
Subsidiary companies and otherNot applicable
Fellow subsidiary companies and otherNot applicable44

45

14. BREAKDOWN OF GAIN AND LOSS ON SALES OF REAL ESTATE
Gain on sales of real estate for the six–month period ended October 31, 2009 and April 30, 2009 consist of the following:Thousands of Yen
For the period
from May 1, 2009
to October 31, 2009

For the period
from November 1, 2008
to April 30, 2009

–
–
–
–

¥ 14,000,000
12,838,587
33,364¥ 1,128,049

–
–
–
–

¥ 4,840,000
5,846,074
27,341¥ 1,033,415

Gain on sales of real estate
Proceeds from sales of real estate
Cost of sales of real estate
Other related sales expenses
Gain on sales of real estate
Loss on sales of real estate
Proceeds from sales of real estate
Cost of sales of real estate
Other related sales expenses
Loss on sales of real estate

15. LEASES
Finance lease agreements, excluding those in which the ownership of the leased assets is deemed to be transferred to the lessee,
are mainly for tools, furniture and fixtures in trust. Depreciation of leased assets under finance lease transactions excluding those inwhich the ownership of the leased assets is deemed to be transferred to the lessee are calculated by the straight–line method, overthe lease period with no residual value.
The Company, as lessor, enters into lease agreements for which fixed monthly rents are due in advance with a lease term ofgenerally two years for offices. The future minimum rental revenues under existing non–cancelable operating lease agreements as of
October 31, 2009 and April 30, 2009 are summarized as follows:
Thousands of Yen
As of October 31, 2009

As of April 30, 2009

Due within one year

¥ 5,339,508¥ 5,343,440

Due after one year

29,267,009

31,726,610¥34,606,517¥37,070,051

Total

16. DERIVATIVES AND HEDGE ACCOUNTING
The Company has entered into interest–rate swap contracts with several Japanese financial institutions to hedge its variable rate
long–term debt obligations. The Company utilizes interest–rate swap contracts, which are derivative financial instruments, only for the
purpose of mitigating future risk of fluctuation of interest rates, but does not enter into such transactions for speculative or trading
purposes. The Company entered into such derivative transactions to hedge risk in accordance with its Articles of Incorporation andthe established risk management policies of NREAM.
The following summarizes the notional amounts and the estimated fair values of the interest–rate related positions outstanding
as of October 31, 2009 and April 30, 2009:
Thousands of Yen

46

Notional amount

Estimated fair value

Unrealized loss

As of October 31, 2009
Interest–rate swaps:
Received/floating and paid/fixed¥84,500,000(¥955,814)(¥955,814)

As of April 30, 2009
Interest–rate swaps:
Received/floating and paid/fixed¥72,500,000(¥835,254)(¥835,254)47

WebsiteBusiness Structure
CustodianProfile Asset
Administrator ofUnitholders Register

Asset Custody
Agreement

Nomura Real Estate
Office Fund, Inc.

NomuraGeneral
Real Administration
Estate Office Fund, Inc. (referred to as“ Nomura Office Fund” or(Accounting,etc.)
the “ Company”
hereafter)
was listed on the Tok yo Stock Exchange on
Administration
December
4,
2003
asinvestment corporation formed to own and
Mitsubishi UFJ Trust a
andreal estate
Agreement, etc.
invest inBanking
officeCorporation
properties, subject to the Law Concerning Investment Trusts
and Investment Corporations of Japan. The Company’s basic investment
policy is to assure stable rent revenues and steady portfolio growth over the
medium- to long-term.
Nomura Real Estate Asset Management Unitholders’Co., Ltd. Meeting(referred to as“NREAM”
Auditorhereafter), a wholly owned subsidiary of Nomura Real Estate Holdings, Inc. is
Ernst & Young
Board of Directors’in charge of asset management on behalfofNomura OfficeShinNihon
Fund LLC
in
Meeting
accordance with the basic investment policy as described above. Throughcoordination with NomuraInvestment
Real Estate Holdings, Inc. and other group
Liabilities
companies, NREAM aims to achieve these goals and more.
Office Buildings(Real Estate
Related Assets)

Property
Management
Agreement

Instructions forRents andManagement

RepaymentofPrincipal &Interest

Unitholders

Trading

Management Co., Ltd., etc.

Repairs, etc.

We continue to provide information timely and strive to enhance thecontents of the website.
(English) http://www.nre-of.co.jp/english/(Japanese) http://www.nre-of.co.jp/

Unitholders

Asset Management
Services Agreement

Distribution
Information andResearch-related
Service Providers

Asset Management Company
Property
Information

Nomura Real
EstateDevelopment
Highlightsof theTwelfthFiscal Period
Rental ...................................................................3
Strategies,

Strength of NOF, Asset Management Policies, Corporate Profile
News, Latest Data, Performance, Distributions, Calendar

To Our Investors ......................................................................................................2
Co., Ltd.

The Company strives to provide accurate and timely disclosure of
information by utilizing the website.
Portfolio Summary, Portfolio Data, Occupancy Rates, Major Tenents

EquityContents Property
Management
Property Management
Companies

Nomura Office Fund’s Website
Financial Instituions,etc. / Investors ofInvestment
Corporation Bonds

Capital Investment

Asset

Rents, etc.

Debt Financing /Issue of Investment
Corporation Bonds

NomuraBuilding
Plans of Fiscal Period ...........................................4Management
Summaryof the Twelfth

Service
Agreement, etc.

Posting the news by year andsubject

Nomura Real Estate
Development Co., Ltd.
Nomura Real Estate
Urban Net Co., Ltd.
Nomura Real
Estate Investment
Management Co., Ltd.

Portfolio Highlights .................................................................................................6
Financial Status of the Twelfth Fiscal Period .........................................................8
Summary of Portfolio Properties .........................................................................10

Corporate Data

Major Properties ....................................................................................................12

Posting the latest information on the top page
*RSS compatible

Profile of the Asset Management Company .......................................................16
Corporate NameTransfer Agent

Performance
ReportNomura Real
Estate..............................................................................................17
Office Fund, Inc.
Mitsubishi UFJ Trust and Banking Corporation

1-4-5 Marunouchi Chiyoda-ku, Tokyo 100-8212, Japan
Financial
Section...................................................................................................35
Corporate
Office8-5-1 Nishi Shinjuku Shinjuku-ku, Tokyo

Business Office of the Transfer Agent

Posting summaries, maps, occupancy rates,
etc., of the portfolio

Posting the latest fund data

Business
Structure/Corporate Data .....................................................................48
160-0023, Japan
Corporate Agency Department

http://www.nre-of.co.jp/english/
Mitsubishi UFJCover
Trust and Banking Corporation
Website....................................................................................................Back
Date of Incorporation
August 7, 2003
Stock Listing
Tokyo Stock Exchange (Securities Code: 8959)
Fiscal Period
Six months ending on April 30 and October 31
Capital¥185,455,446,935 (as of October 31, 2009)
Number of Units Issued
305,123 (as of October 31, 2009)
Number of Unitholders
12,565 (as of October 31, 2009)7-10-11 Higashisuna Koto-ku, Tokyo 137-8081, Japan
Tel: +81-3-5683-5111
Independent Auditors
Ernst & Young ShinNihon LLC
Hibiya Kokusai Bldg. 2-2-3 Uchisaiwai-cho Chiyoda-ku,
Tokyo 100-0011, Japan
Investor Relations
For further information, please contact the Asset Management
Company:
Nomura Real Estate Asset Management Co., Ltd.
8-5-1 Nishi Shinjuku, Shinjuku-ku, Tokyo 160-0023, Japan
Tel: +81-3-3365-0507

Disclaimer

This semiannual report includes translations of certain Japanese documents originally filed under the Securities and Exchange Law ofJapan. This report was prepared in English solely for the convenience of and reference by readers outside Japan and should not be
considered as a disclosure statement. The original Japanese documents always govern the meaning and interpretation.
In general, accounting principles and practices used by real estate investment corporations in Japan (”J-REITs”) in preparing its
financial statements conform with accounting principles generally accepted in Japan (”Japanese GAAP”). However, they may differ
from generally accepted accounting principles applied in certain other countries. Potential investors should consult their own
professional advisors for an understanding of the differences between Japanese GAAP and generally accepted accounting principles
in the United States (”U.S. GAAP”) or other jurisdictions and how those differences might affect the financial information contained
herein.
Estimates for Nomura Office Fund’s future operating results contained in this semiannual report are forward-looking statements andare based on information currently available to Nomura Office Fund and its asset management company and are subject to risks anduncertainties. Consequently, these projections should not be relied upon as the sole basis for evaluating Nomura Office Fund. Actual
results may differ substantially from the projections depending on a number of factors.

48

Printed in Japanhttp://www.nre-of.co.jp/english/