December 15, 2014

Summary of Earnings Results
for the Seventeenth Fiscal Period(From May 1, 2014 to October 31, 2014)
Top REIT, Inc. (listed on the Tokyo Stock Exchange with securities code 8982, hereinafter “Top REIT”) hereby
announces its earnings results for the fiscal period ended October 31, 2014 (Seventeenth fiscal period).

1. Earnings Results for the Seventeenth Fiscal Period
Seventeenth Fiscal Period (17th FP): From May 1, 2014 to October 31, 2014
Sixteenth Fiscal Period (16th FP): From November 1, 2013 to April 30, 2014
(1) Business Results
Operating
Revenue
Period ended
Oct 31, 2014 (17th FP)
Apr 30, 2014 (16th FP)

Period ended
Oct 31, 2014 (17th FP)
Apr 30, 2014 (16th FP)

Period-on-Period
ChangeMillions of yen

Operating
IncomePeriod-on-Period
ChangeMillions of yen

2.8%
9.4%

¥2,563¥2,528

1.4%
16.4%

Net
IncomePeriod-on-Period
ChangeNet
Incomeper Unit

Ratio ofNet Income toUnitholders’Equity2.1%
21.2%¥11,107¥11,056¥1,954¥1,913

Period-on-Period
ChangeMillions of yen¥5,792¥5,637

Millions of yen

Ordinary
Income¥1,955¥1,913

2.2%
21.0%

Ratio ofRatio of
Ordinary Income
Ordinary Income
to Operating
to Total Assets
Revenue

Yen

2.1%
2.2%

1.0%
1.0%

33.8%
33.9%

Dividend
Payout Ratio

Ratio of
Dividends to
Net Assets

100.0%
99.9%

2.1%
2.0%

(Note) Net income per unit is rounded down to the nearest yen.

(2) Dividends
Dividend(excluding dividend in excess ofearnings)
Per unit
Total
Period ended
Oct 31, 2014 (17th FP)
Apr 30, 2014 (16th FP)(Note 1)
(Note 2)
(Note 3)

Yen

¥11,107¥10,864

Dividend in Excess of Earning
Per unit

Millions of yen

Total
Yen

¥1,954¥1,912¥0¥0Millions of yen¥–¥–

Since fund procurement through public offering was conducted during the 16th FP and the number of investment units has changed accordingly,
Dividend Payout Ratio for the16th FP is calculated as below
Dividend Payout Ratio = Total Amount of Dividends (excluding dividend in excess of earnings) / Net Income ×100
The reason for the difference in Net Income and Total Amount of Dividends for the Period ended April 30 is due to the correction amount (1million yen) of deferred tax liability from the change in corporate tax rate following the tax system revisions in the fiscal year 2014 wasincluded in the reserve for reduction.
The reason for the difference in Dividend per Unit and Net Income per Unit is due to the impact from the change in corporate tax rate following
the tax system revisions in the fiscal year 2014 as mentioned in (Note 2), and that the Net Income per Unit is calculated based on the average
number of investment units issued and outstanding during the fiscal period.

(3) Financial Position
Total Assets
As of
Oct 31, 2014 (17th FP)
Apr 30, 2014 (16th FP)

Millions of yen¥200,551¥200,802

Net Assets

Ratio of
Unitholders’ Equity to
Total Assets

Net Assets per Unit

46.4%
46.4%

¥529,095¥528,873

Millions of yen¥93,120¥93,081(Note) Net assets per unit is rounded down to the nearest yen.

1Yen

(4) Cash FlowsNet Cash
Provided by (Used in)Operating Activities
Period ended
Oct 31, 2014 (17th FP)
Apr 30, 2014 (16th FP)

Net Cash
Provided by (Used in)Investing Activities

Millions of yen¥3,593¥2,976Net Cash
Provided by (Used in)
Financing Activities

Millions of yen

Cash and
Cash Equivalents
at End of Period

Millions of yen(¥584)(¥12,195)

Millions of yen(¥1,979)¥11,700¥8,353¥7,323

2. Earnings Forecasts for the Eighteenth Fiscal Period
Eighteenth Fiscal Period (18th FP): From November 1, 2014 to April 30, 2015
Operating
Revenue
Period ending
Apr 30, 2015 (18th FP)

Period ending
Apr 30, 2015 (18th FP)

Period-on-Period
ChangeMillions of yen

Operating
IncomePeriod-on-Period
ChangeMillions of yen¥2,424(3.3%)Net
IncomePeriod-on-Period
ChangeDividend per Unit
(excluding dividend in excess ofearnings)(5.9%)¥9,300¥1,839Period-on-Period
ChangeMillions of yen¥5,600(5.4%)

Millions of yen

Ordinary
Income¥1,840(5.9%)

Dividend in Excess of Earnings
per Unit

Yen

Yen

¥0

(Reference) Estimated net income per unit for the 18th FP: ¥10,451(Note) With regard to the Dividend per Unit, it is assumed that an approximately ¥300 million of gains on disposal of assets will be partially reserved asinternal reserve, etc. (approximately ¥200 million) and that the rest of gains on disposal of assets will be distributed.

3. Others(1) Changes in Accounting Policies, Changes in Accounting Estimates and Restatements of Revisions
a. Changes in accounting policies due to amended accounting standards: No
b. Changes in accounting policies due to other factors from a. above:Noc. Changes in accounting estimates:
Nod. Restatements of revisions:No(2) Number of Investment Units Issued and Outstanding
a. Number of investment units (including treasury investment units) issued and outstanding at end of fiscal
periodAs of October 31, 2014 (17th FP):
176,000 unitsth
As of April 30, 2014 (16 FP):
176,000 units
b. Number of treasury investment units issued and outstanding at end of fiscal period
As of October 31, 2014 (17th FP):
0 units
As of April 30, 2014 (16th FP):
0 units* Statement on Implementation Status of Audit Procedure
This Summary of Earnings Results (“Kessan Tanshin” in Japanese) report is outside the scope of theauditing procedure under the Financial Instruments and Exchange Act. As of the publication of this report,
no auditing procedure under the Financial Instruments and Exchange Act has been completed for theearnings results.
* Explanation on the Appropriate Use of Earnings Forecasts, and Other Matters of Special Note
The earnings forecasts and other forward-looking statements contained in this document are based on
information currently available to and certain assumptions deemed reasonable by Top REIT. Accordingly,
the actual results may differ materially due to a variety of factors. Moreover, the forecasts should not be
construed as a guarantee of the dividend amount.
This summary of earnings results is translated from the Japanese “Kessan Tanshin” report, dated December 15,
2014, which is prepared in accordance with generally accepted accounting principles in Japan and Japaneselaw.
Unless otherwise stated, fractions less than the specified unit are rounded down to the nearest specified unit formonetary amounts and rounded to the nearest specified unit for percentage figures.
24. Asset Management Performance(1) Operations during the Seventeenth Fiscal Period
A. Brief Background of Top REIT
Top REIT was founded on November 2, 2005 based on the Act on Investment Trusts and Investment
Corporations (Act No. 198 of 1951, as amended) with Top REIT Asset Management Co., Ltd. (AssetManager) as the incorporator, and listed on the Real Estate Investment Trust Section of the Tokyo Stock
Exchange (TSE) (Securities Code: 8982) on March 1, 2006 with the number of investment units issued andoutstanding totaling 145,500 units. As of the end of the seventeenth fiscal period (October 31, 2014), thetotal number of investment units issued and outstanding stands at 176,000 units as a result of the issuance ofadditional investment units through the public offering (20,000 units) on November 25, 2013 and the thirdparty allotment (1,000 units) on December 13, 2013.
Top REIT works to conduct management with the aim of maximizing the investment value for its unitholders
by securing stable revenues over the medium to long term and achieving steady growth of its portfolio. To doso, Top REIT focuses on the two strategies of “skilled management of a diversified portfolio” and “optimal
application of the sponsors’ strengths.” As of the end of the seventeenth fiscal period, its portfolio consists of
22 properties with a total acquisition value of ¥197,855 million.
B. Investment Environment and Asset Management Performance<Investment Environment>(a)Economy in General
The Japanese economy for the moment shows weakness, primarily in personal consumption and production,
as illustrated by the real GDP for the July – September period unexpectedly marking negative growth under
the impact of a decrease in demand in reaction to the hurried purchases ahead of the consumption tax hikein April this year, on top of unseasonable weather and other factors. Nevertheless, the economy has stayedon a modest recovery trend, amid ongoing improvements in corporate earnings as well as in theemployment and income environments.
While close attention must continuously be paid to the risk factors that may impact the Japanese businessclimate, such as downside swings in overseas economies, mainly in the U.S., and the trends of the emerging
and resource-rich economies, the Japanese economy is likely to continue to show a mild recovery going
forward, partly due to the effects of the additional monetary easing by the Bank of Japan (BOJ) and thegovernment’s various policies proving effective, along with the anticipated pickups in personal
consumption and capital investment associated with the postponement of the second consumption tax hike.
(b)Real Estate Leasing Market[Office Buildings]
The vacancy rate has remained on a downward trend, given that the new supply of office buildings has been
kept a low level in recent years, in addition to a notable increase in demand for relocations to expand spaces,
etc. associated with a recovery in corporate performance. Rents have also shown a trend of stopping to drop,with even a reversal being seen in some areas. As such, the market is gradually signaling a recovery,
including a reduction in rent-free periods, primarily for blue-chip office buildings in central Tokyo.
[Retail Properties]
Despite a temporary drop due to repercussions from the rush demand prior to the consumption tax hike andother factors being observed, personal consumption is anticipated to recover gradually and remain solid
going forward, backed by improvements in the employment and income environments. Meanwhile, delaysin the recovery of demand are observed in some industries, business types and locations, and retailers
continue to face harsh business conditions including the increased competition against online shopping
operators. Accordingly, disparities may arise in performance and the ability to bear rent burdens, dependingon the economic trends and the characteristics of individual retail properties.

3

[Residential Properties]
Demand for well-located and quality rental residential properties has remained solid, given the ongoing
population inflow into the Tokyo metropolitan area and other major urban areas around Japan. With theconstruction starts of new residential properties also been kept at a low level, the supply-demand conditions
continue to be favorable. Going forward, the rental residential property market is anticipated to see both theoccupancy rate and rent levels remain in good shape, primarily for single-person households and small
households.
(c) Real Estate Transaction Market
In the current real estate transaction market, not only J-REITs but also private placement funds, industrial
corporations and overseas investors who anticipate a full-on recovery of the Japanese economy continue tohave a proactive investment attitude, against the backdrop of a favorable fund procurement environment
including low interest rates as a result of the monetary easing. This, along with the activities of such core
investors as pension funds, has led to ongoing capital inflow into the market. On the other hand,competition over property acquisitions in the real estate transaction market has been increasingly intensified,
as information on properties for sale (especially those in central Tokyo and in other good locations) islimited. Since rents as income sources have not yet shown any full-on increase while sales prices ofproperties are soaring, it is expected that investment returns will continue to stay on a downward trend forsome time.
(d) Financial Market
During the fiscal period under review, the financial market saw the BOJ continue its “quantitative andqualitative monetary easing,” which kept both short-term and long-term interest rates at a low level. In
addition, the BOJ decided on additional monetary easing measures at its Monetary Policy Meeting held on
October 31, 2014. Due to this development, it is anticipated that interest rates will remain low in a stablemanner for a certain period of time, and that financial institutions will continue to maintain their proactive
lending attitude.
<Asset Management Performance >(a) Acquisition and Disposition of Assets
Top REIT began the seventeenth fiscal period with 22 properties (total acquisition value: ¥197, 855 million).
With an aim to acquire highly-competitive and highly-profitable properties, Top REIT considered possible
acquisition of properties through not only the “optimal application of the sponsors’ strengths” but also by
utilizing established information channels to collect and carefully select from property sale information,with excellent office buildings located in central Tokyo at the core, as well as other asset classes, bydrawing on the characteristics of being a diversified REIT. The number of properties owned by Top REIT
remained unchanged from the sixteenth fiscal period since Top REIT did not make a decision to acquire
properties in the seventeenth fiscal period.
After closing the seventeenth fiscal period, Top REIT executed sales agreements for Kanda Park Plaza andOAK PLAZA as of November 12, 2014, with their disposition being completed on November 13, 2014.
Top REIT used part of the proceeds from the disposition of these properties to repay existing borrowings,
making early repayment of certain borrowings on November 28, 2014.
(b) Management and Maintenance of Portfolio Assets
The basic asset management strategy of Top REIT is sustaining and increasing revenue over the medium tolong term by maintaining and improving tenant satisfaction (the “Tenants First” policy) and keeping
operational management costs at an appropriate level. Top REIT strived to improve tenant satisfaction andmaintain and improve high occupancy rates while sustaining trusted relationships with tenants anddiscerning tenant needs via property management companies. During the seventeenth fiscal period, Top
REIT continued to focus on tenant solicitation activities for successor tenants of Harumi Island Triton
Square Office Tower Y. As a result, the occupancy rate reached 93.6% at the end of the seventeenth fiscal
period (October 31, 2014), and is expected to further improve to 99.8% in February 2015. On the other hand,a tenant to whom the entire building of Kanda Nishiki-cho 3-chome Building has been leased notified its
intention to terminate the lease agreement as of January 2015. Of the spaces to be vacated, new lease4

agreements covering 965 tsubos have already been executed as of December 15, 2014, and Top REIT
continues its effort to solicit successor tenants for the remaining spaces.
Regarding maintenance, Top REIT followed up on ensuring that it had an appropriate grasp of theoperational management conditions and steady implementation of asset management plans for each
property. Based on asset management plans, Top REIT also carried out renewal construction and repair
work that contributed to enhancing the competitiveness of properties, maintaining and improving thefunctionality of properties, and construction that contributed to improving tenant satisfaction. It also took
steps to keep relevant costs at an appropriate level and conducted efficient management of resources.
Furthermore, with regard to Harumi Island Triton Square Office Tower Y, Top REIT is investigating
implementation of construction works to convert an entire floor, which has been used as cafeteria for theemployees of tenants, to office spaces for lease in order to increase the rent revenue.
C. Funding
Top REIT procures funds under a financial policy based on stable financial management. During theseventeenth fiscal period, Top REIT refinanced the ¥4,000 million in long-term loans due for repayment onJune 30, 2014 by borrowing ¥4,000 million in long-term loans (repayment date: March 29, 2019) as of thesame date. Top REIT also repaid ¥67.5 million in long-term loans as agreed upon on June 30, 2014 by using
cash on hand.
As a result, at the end of the seventeenth fiscal period, the balance of interest-bearing liabilities amounts to100,362 million (¥91,862 million in long-term loans (including the current portion) and ¥8,500 million in
investment corporation bonds), and the ratio of interest-bearing liabilities to total assets is 50.0%. Moreover,
the ratio of long-term interest-bearing liabilities (including the current portion) is 100%, while interestbearing liabilities with fixed interest rates account for 46.5%.
Furthermore, after closing the seventeenth fiscal period, Top REIT disposed Kanda Park Plaza and OAK
PLAZA as of November 13, 2014. Top REIT used the proceeds from the disposition and cash on hand to
make early repayments totaling ¥9,697 million for certain existing borrowings on November 28, 2014. This
resulted in the balance of interest-bearing liabilities amounting to ¥90,665 million (¥82,165 million in longterm loans (including the current portion) and ¥8,500 million in investment corporation bonds) as of thedate of the early repayment.
The credit rating of Top REIT as of October 31, 2014 is as follows:
Credit Rating Agency
Rating [Outlook]
Issuer rating: A+ [Negative]
Rating and Investment Information, Inc.
Unsecured investment corporation bond rating(R&I)(No. 1 Unsecured Investment Corporation Bonds): A+(Note) R&I changed the rating outlook of Top REIT’s issuer rating on August 8, 2014 as described above.
Moreover, Top REIT conducted shelf registration for investment corporation bonds, as indicated below, inorder to secure flexible procurement of long-term funds.
[Overview of Shelf Registration]
Object of Shelf Registration
Investment corporation bonds(excluding short-term corporation bonds)

Amount to be Issued

Scheduled Period of Issue¥100,000 million

From May 20, 2014 to May 19, 20165

D. Earnings Results and Dividends
As a result of the asset management and operations described above, Top REIT recorded asset management
performance during the seventeenth fiscal period of ¥5,792 million in operating revenue, ¥2,563 million in
operating income and ¥1,955 million in ordinary income after deducting expenses concerning borrowings,
etc., and net income was ¥1,954 million.
As for dividends, with the aim of having an amount equivalent to profit dividends deducted as expenses
based on the application of the special provision on taxation of investment corporations (Article 67-15 of
the Act on Special Measures Concerning Taxation [Act No. 26 of 1957, as amended; hereinafter, the“Special Taxation Measures Act”]), Top REIT decided that the maximum value arrived at when the numberof units issued and outstanding (176,000 units) is multiplied by an integer, within the limit of the balance ofunappropriated retained earnings of the seventeenth fiscal period and after deducting the amount of deferred
tax liabilities being corrected due to the change in tax rate which would be transferred to the reserve for
reduction entry, would be paid out. Consequently, Top REIT declared a dividend per investment unit of¥11,107.
(2) Outlook for the next fiscal periods
A. Management Policy and Issues to be addressed(a) Management Strategy for Existing Properties
Top REIT will continue to follow its basic asset management strategy that centers on sustaining andincreasing revenue over the medium to long term by maintaining and improving tenant satisfaction (the“Tenants First” policy) and keeping operational management costs at an appropriate level. Under thisstrategy, Top REIT will focus on sustaining relationships of trust with tenants, leasing vacant spaces andsuch, as well as striving to maintain stable occupancy rates over the medium to long term.
Furthermore, Top REIT will also work to ensure an appropriate perception of the operational management
conditions for each property while steadily implementing such measures as to sustain and improve revenues
and keep operational management costs at an appropriate level. In addition, Top REIT will carry out
systematic repair work and such to enhance the competitiveness of properties and to maintain and improve
the functionality of properties, in an aim to secure stable revenues over the medium to long term.
(b) Investment Strategy for New Properties
Top REIT aims to increase its dividends over the medium to long term by realizing external growth throughacquisition of new properties. Top REIT will continue to not only further utilize pipeline support functions
from sponsor companies, but also utilize various established information channels to collect information on
new properties based on detailed analysis of market environment of each asset classes, while placingemphasis on primarily highly competitive office buildings. By doing so, Top REIT aims to expand theportfolio size while improving its quality.
Furthermore, Top REIT makes it a management policy to keep the ratio of the investment amount perproperty at less than 20% of the entire portfolio as a target over the medium to long term. Going forward,
Top REIT will work to reduce the risk of concentration on specific properties by steadily advancing further
external growth.
(c) Financial Strategy
Top REIT will continue to implement diversified and flexible fund procurement operations in preparation
for acquisition of new properties and refinancing of existing loans, etc. While securing mobility andflexibility in fund procurement, Top REIT will work to reduce the risk involved in fund procurement byextending borrowing periods and spreading out the repayment dates. At the same time, Top REIT will
manage the risk of interest rate fluctuations by taking into account the balance of borrowings at floating andfixed interest rates, as it discerns the interest rate trends. Moreover, financial soundness will be maintainedby keeping the leverage at an appropriate level.

6

(d) Compliance and Risk Management, etc.
In addition to the supervision of the Executive Officer by Supervisory Directors at the Board of Directors
meetings and other occasions, Top REIT will continue its direction and supervision on the Asset Manager
that it can conduct management operations with full care given to market risks, including rent decreases,
and credit risks as well as with a focus on the protection of unitholders’ interests in conducting transactions
with interested parties and on other compliance issues.
(e) Significant Subsequent Events<Disposition of Properties>
Top REIT disposed of two properties on November 13, 2014 as described below.
Trust beneficiary interest in real estate in Japan(1) Property Type
Kanda Park Plaza(2) Name of Property
2-2-2 Kajicho, Chiyoda-ku, Tokyo(3) Address (Residential building address)¥5,350 million(4) Disposition Price¥5,052 million (as of October 31, 2014)(5) Book Value
Approx. ¥109 million(6) Gains on disposal
November 12, 2014(7) Sales Agreement dateNovember 13, 2014
(8) Disposition Date
Undisclosed(9) Purchaser
Trust beneficiary interest in real estate in Japan(1) Property TypeOAK PLAZA(2) Name of Property
2-10-6 Kanda Awajicho, Chiyoda-ku, Tokyo(3) Address (Residential building address)¥2,900 million(4) Disposition Price¥2,686 million (as of October 31, 2014)(5) Book Value
Approx. ¥191 million(6) Gains on disposal
November 12, 2014(7) Sales Agreement dateNovember 13, 2014
(8) Disposition DateNIPPON STEEL KOWA REAL ESTATE CO., LTD.
(9) Purchaser(Note) Disposition Price is the price for sale to be specified in the sales agreement for trust beneficiaryinterest in real estate (excluding consumption tax and equivalents) which does not include disposition
expenses, money adjustment such as taxes, etc.
[Reference Information]<Partial Early Repayment of Borrowings>
Top REIT made the partial early repayment of borrowings on November 28, 2014 with the proceedsfrom the disposition of Kanda Park Plaza and OAK PLAZA, etc. Outline of the partial early repaymentof borrowings is described below.
Long-term loan (Term Loan No. 15)(1) Lender(2) Balance of loans before repayment (A)(3) Amount of repayment (B)(4) Balance of loans after repayment (A-B)(5) Date of early repayment(6) Execution date
(7) Principal repayment date

Sumitomo Mitsui Trust Bank, Limited.
The Bank of Fukuoka, Ltd.
The Hiroshima Bank, Ltd.
The Yamaguchi Bank, Ltd.
¥6,700 million¥3,873 million¥2,827 million
November 28, 2014
March 31, 2011
February 29, 20167

Long-term loan (Term Loan No. 19-(1))(1) Lender(2) Balance of loans before repayment (A)(3) Amount of repayment (B)(4) Balance of loans after repayment (A-B)(5) Date of early repayment(6) Execution date
(7) Principal repayment date

Sumitomo Mitsui Trust Bank, Limited.
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo Mitsubishi UFJ, Ltd.
Resona Bank, Limited¥7,000 million¥4,046 million¥2,954 million
November 28, 2014
November 30, 2012
September 30, 2015

Long-term loan (Term Loan No. 20-(3))(1) Lender(2) Balance of loans before repayment (A)(3) Amount of repayment (B)(4) Balance of loans after repayment (A-B)(5) Date of early repayment(6) Execution date
(7) Principal repayment dateMizuho Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corporation¥3,075 million¥1,778 million¥1,297 million
November 28, 2014
March 27, 2013
September 30, 20158

B. Outlook for the Eighteenth and Nineteenth Fiscal Periods
The earnings forecasts for the eighteenth fiscal period (from November 1, 2014 to April 30, 2015) and thenineteenth fiscal period (from May 1, 2015 to October 31, 2015) are as follows:
Please refer to the next page for the assumptions of earnings forecasts.
Eighteenth Fiscal Period

Nineteenth Fiscal Period(From Nov 1, 2014 to Apr 30, 2015)(From May 1, 2015 to Oct 31, 2015)

Operating Revenue¥5,600million¥5,164million

Operating Income¥2,424million¥2,051million

Ordinary Income¥1,840million¥1,482million

Net Income¥1,839million¥1,481million

Dividend per Unit
(excluding dividend in excess of earnings)¥9,300 (Note 2)¥9,000 (Note 3)

Dividend in Excess of Earnings per Unit

(Note 1)

(Note 2)
(Note 3)¥0¥0The earnings forecasts represented above are the current estimated figures calculated based on
certain assumptions. Accordingly, the actual operating revenue, operating income, ordinary
income, net income, dividend per unit and dividend in excess of earnings per unit may vary
due to changes in the circumstances. Moreover, the forecasts should not be construed as aguarantee of the dividend amount.
With regard to the dividends of eighteenth fiscal period, it is assumed that part of the gain on
disposal of Kanda Park Plaza and OAK PLAZA will be reserved as internal reserves, etc.
It is assumed that Top REIT will reverse part of the internal reserves for dividend of thenineteenth fiscal period.

9

Assumptions for Earnings Forecasts for the Eighteenth Fiscal Period (from November 1, 2014 to April 30,2015) and the Nineteenth Fiscal Period (from May 1, 2015 to October 31, 2015)
Item
Assumptions
 Eighteenth fiscal period (18th FP): November 1, 2014 – April 30, 2015 (181 days)
Accounting
Period Nineteenth fiscal period (19th FP): May 1, 2015 – October 31, 2015 (184 days) The forecast is based on 20 properties comprising the 22 properties Top REIT owns as ofthe end of the seventeenth fiscal period (October 31, 2014) minus the 2 properties
Portfolio Assets
disposed as of November 13, 2014. The actual circumstances may change depending on
the acquisition or disposal of other properties.
Number of The number of investment units issued and outstanding is based on the number as ofInvestment Units
December 15, 2014, which is 176,000 units, and assumes that no issuance of new
Issued andinvestment units will be made through October 31, 2015.
Outstanding It is assumed that the balance of interest-bearing liabilities is ¥100,362 million, which isthe amount as of October 31, 2014.
 The balance of interest-bearing liabilities as of the date of this document stands at¥90,665 million, as a result of making early repayment of borrowing for ¥9,697 million on
November 28, 2014.
Interest-Bearing For the eighteenth fiscal period, it is assumed that the ¥67 million in long-term loans
Liabilities
payable will be repaid on December 30, 2014 as agreed upon.
 For the nineteenth fiscal period, it is assumed that the ¥8,500 million in investment
corporation bonds due for redemption on June 4, 2015 and the ¥4,251 million inborrowings due for repayment on September 30, 2015 will be fully refinanced throughborrowings or issuance of investment corporation bonds. It is also assumed that the ¥67
million in long-term loans payable will be repaid on June 30, 2015 as agreed upon.
 For rent revenue from existing properties, Top REIT takes into account the execution of
new lease agreements and cancellation of lease agreements that have been finalized andscheduled as of December 15, 2014, as well as such factors that may cause fluctuations asrisks associated with rent revision with tenants due for rent revision or contract renewal,
in light of recent real estate leasing market conditions.
Operating For Kanda Nishiki-cho 3-chome Building, the forecast assumes revenue for the spaces to be
Revenueleased for which lease agreements have been executed or planned to be executed as ofDecember 15, 2014. Furthermore, it is assumed that the occupancy rate of the property
stands at 49.7% as of April 30, 2015 and 49.7% as of October 31, 2015.
 For the eighteenth fiscal period, the forecast assumes approximately ¥300 million in
gains on disposal of properties associated with the disposition of two properties (Kanda
Park Plaza and OAK PLAZA).
 Top REIT adopts a method of treating property, city planning and depreciable asset taxes,
etc. (the “property tax, etc.”) on real estate, etc. it owns, as expenses related to the rent
business in the amount corresponding to the management period out of the assessed anddetermined taxation amount. In addition, as for the acquisition of real estate or
beneficiary interests in trust in real estate, the adjustments equivalent to property tax, etc.
for fiscal year of the acquisition paid to the transferor will be included in acquisition
costs, and thus will not be recorded as expenses in the corresponding period.
Operating It is assumed that the amount of property tax, etc. will be ¥637 million for the eighteenth
Expenses
fiscal period and ¥613 million for the nineteenth fiscal period.
 It is assumed that the depreciation and amortization will be ¥1,187 million for theeighteenth fiscal period and ¥1,190 million for the nineteenth fiscal period.
 Repair expenses for buildings, etc. may vary greatly from the forecasted amount due tovarious reasons, including that emergency repair expenses may possibly arise due to
unexpected factors causing building damage, etc. and that repair expenses vary largely
depending on the fiscal period as they are expenses not accrued periodically.
 Management operation fees are assumed by considering historical data and the detail of
10





Non-Operating
ExpensesDividend per
Unit(excluding dividend inexcess of earnings)

Dividend in
Excess ofEarnings per Unit

Other



management contracts.
For the eighteenth fiscal period, it is anticipated that ¥35 million will accrue for an
increase in taxes and dues (non-deductible consumption tax) in accordance with adecrease in the proportion of taxable sales as a result of property disposition.
It is assumed that non-operating expenses for the eighteenth fiscal period will be ¥585
million, of which interest expenses on loans and investment corporation bonds (including
related expenses) will be ¥576 million. Amortization of investment unit issuance
expenses will be ¥6 million.
It is assumed that non-operating expenses for the nineteenth fiscal period will be ¥569
million, of which interest expenses on loans investment corporation bonds (including
related expenses) will be ¥559 million. Amortization of investment unit issuance
expenses will be ¥6 million.
Dividends (dividend per unit) are calculated based on the dividend policy stipulated in
Top REIT’s Articles of Incorporation.
For the eighteenth fiscal period, approximately ¥300 million in gains on disposal ofproperties is forecasted to accrue in association with the disposition of Kanda Park Plazaand OAK PLAZA. Top REIT intends to reserve the gains on disposal of land as internal
reserve, etc. (approx. ¥200 million) by applying “The Special Measures on Taxation inCase Land or Other Property is Acquired in Advance in 2009 or 2010” as stipulated in
Article 66-2 of the Act on Special Measures Concerning Taxation, for the purpose ofstrengthening its financial standing. The actual amount of the internal reserve may vary,
though.
For the nineteenth fiscal period, it is assumed that part (approximately ¥100 million) of
the reserve for reduction entry totaling approximately ¥280 million (estimated balance asof April 30, 2015) will be reversed and added to net income for dividend. The reserve for
reduction entry has accrued as a result of applying to the above-mentioned Special
Measures on Taxation with regard to the gains on disposal of the land of Nittetsu
Honmachi Building disposed as of November 25, 2011 as well as Kanda Park Plaza andOAK PLAZA that were disposed as of November 13, 2014.



Top REIT does not currently anticipate dividends in excess of earnings (dividend inexcess of earnings per unit).



It is assumed that there will be no changes in legislation, taxation, accounting standards,
listing regulations of Tokyo Stock Exchange, rules and requirements imposed by The
Investment Trusts Association, Japan that would impact the aforementioned forecasts.
It is assumed that there will be no unpredictable material changes in general economic
trends and real estate market conditions, etc.

11

8. Financial Statements(1) Balance Sheets(Unit: thousand yen)
Sixteenth Fiscal Period(as of April 30, 2014)

Seventeenth Fiscal Period(as of October 31, 2014)

AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Deferred tax assets
Consumption taxes receivable
Other
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Total property, plant and equipment
Intangible assets
Leasehold right in trust
Other intangible assets in trust
Other
Total intangible assets
Investments and other assets
Lease and guarantee deposits
Long-term prepaid expenses
Other
Total investments and other assets
Total noncurrent assets
Deferred assets
Investment corporation bond issuance costs
Investment unit issuance expenses
Total deferred assets
Total assets

12

3,049,986
4,273,472
193,414353,139
16
137,402
1,830
8,009,261

4,427,277
3,926,308
219,407
360,75417－
08,933,766

1,153,573(225,614)
927,958
5,559(3,388)2,170
20,309(11,988)
8,320
5,717
(2,137)
3,579
4,888,525
66,712,538(16,038,443)
50,674,094
801,903(317,387)
484,516
307,426(156,723)
150,702
273,432(156,700)
116,731
134,748,836
192,005,437

1,158,083(241,752)
916,330
5,559(3,469)2,089
20,309(12,582)
7,726
6,609
(2,562)
4,047
4,888,525
66,838,553(17,163,781)
49,674,771
802,038(335,874)
466,164
312,926(182,083)
130,843
279,398(172,805)
106,593
134,748,836
190,945,929

7,348
2,198
63
9,610

7,348
1,924
42
9,315

10,000492,375
229,164
731,540
192,746,588

10,000372,029
246,400
628,429
191,583,674

12,86133,393
46,254200,802,104

7,349
26,71434,063
200,551,504

(Unit: thousand yen)
Sixteenth Fiscal Period(as of April 30, 2014)

Seventeenth Fiscal Period(as of October 31, 2014)

Liabilities
Current liabilities
296,523－
4,135,000
252,726
131,332853－
795,670
9,937
5,622,044

186,273
8,500,000
10,210,000
256,812110,509670
223,962
801,889
5,899
20,296,018

Investment corporation bondLong-term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Deferred tax liabilities
Long-term advances received
Derivatives liabilities
Total noncurrent liabilities

8,500,000
87,795,000
101,016
5,649,955
13,79979
38,429102,098,279－
81,652,500
127,4295,298,658
11,76435
44,377
87,134,766

Total liabilities

107,720,324

107,430,784

91,143,100

91,143,100

49,95849,95851,87351,873

Unappropriated retained earnings (undisposed loss)
Total surplus

1,913,997
1,963,956

1,954,943
2,006,816

Total unitholders’ equity
Valuation and translation adjustments
Deferred gains or losses on hedges
Total valuation and translation adjustments

93,107,056

93,149,916(25,275)(25,275)(29,195)

Operating accounts payable
Current portion of Investment corporation bondCurrent portion of long-term loans payable
Accounts payable – otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Other
Total current liabilities
Noncurrent liabilities

Net Assets
Unitholders’ equity
Unitholders’ capital
Surplus
Voluntary retained earnings
Reserve for reduction entry
Total Voluntary retained earnings

93,081,780
200,802,104

Total net assets
Total liabilities and net assets

13(29,195)
93,120,720
200,551,504

(2) Statements of Income(Unit: thousand yen)
Sixteenth Fiscal Period(November 1, 2013 –April 30, 2014)

Seventeenth Fiscal Period(May 1, 2014 –October 31, 2014)

Operating revenue
Rent revenue – real estate

5,590,221

5,762,641

Other lease business revenue

47,13529,981

Total operating revenue

5,637,356

5,792,623

2,622,805

2,721,218

Operating expenses
Expenses related to rent business

354,776

369,341

Asset custody fee

8,898

9,009

Administrative service fees

66,861

69,085

Directors’ compensations

6,300

6,300

Audit fee

10,00010,000Asset management fee

Other operating expenses
Total operating expenses
Operating income

38,92944,4603,108,571

3,229,416

2,528,785

2,563,206

Non-operating income
675

1,579

1,023

563

Insurance income

191

3,979

Other

－

820

1,891

6,942

Interest expenses

408,933

402,362Interest expense on investment corporation bonds

42,03442,965

Amortization of investment corporation bond issuance costs

5,511

5,511

150,072

154,614

6,678

6,678

Interest income
Reversal of dividends payable

Total non-operating income
Non-operating expenses

Borrowing related expenses
Amortization of investment unit issuance expenses

4,415

2,137

617,646614,271

Ordinary income

1,913,029

1,955,878

Income before income taxes

1,913,029

1,955,878

Income taxes – current

957

963

Income taxes – deferred(1,913)(9)

Total income taxes

(955)

954

1,913,985

1,954,924

12

19

1,913,997

1,954,943

Other
Total non-operating expenses

Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)

14

(3) Statements of Changes in Net Assets (Unitholders’ Equity)
For the period from November 1, 2013 to April 30, 2014 (16th fiscal period)(Unit: thousand yen)
Unitholders’ equity
Surplus
Unitholders’capitalBalance at the
beginning of theperiodChanges of items
during the period
Issuance of new
investment units
Dividends fromsurplus
Net income
Net changes of
items other thanunitholders’equity (net)Total changes of
items during theperiodBalance at the endof current period

82,260,100

Voluntary retained earnings
Total
Reserve for
Voluntary
reduction entry
retainedearnings
49,95849,958

Total surplus

Totalunitholders’equity1,579,617

1,629,576

83,889,676

8,883,000

8,883,000(1,579,605)(1,579,605)(1,579,605)

1,913,985

1,913,985

1,913,985

8,883,000－－

334,380

334,380

9,217,380

91,143,100

49,95849,958

1,913,997

1,963,956

93,107,056

Valuation and translation
adjustments

Balance at the
beginning of theperiodChanges of items
during the period
Issuance of new
investment units
Dividends fromsurplus
Net income
Net changes of
items other thanunitholders’equity (net)Total changes of
items during theperiodBalance at the endof current period

Unappropriatedretainedearnings(undisposed
loss)

Deferred gains
or losses onhedgesTotal valuationand translation
adjustments(18,376)(18,376)

Total net
assets

83,871,299

8,883,000(1,579,605)
1,913,985(6,899)(6,899)(6,899)(6,899)(6,899)9,210,480(25,275)(25,275)

93,081,780

15

For the period from May 1, 2014 to October 31, 2014 (17th fiscal period)(Unit: thousand yen)
Unitholders’ equity
Surplus
Unitholders’capitalBalance at the
beginning of theperiodChanges of items
during the period
Reserve for
reduction entry
Dividends fromsurplus
Net income
Net changes of
items other thanunitholders’equity (net)Total changes of
items during theperiodBalance at the endof current period

91,143,100

Voluntary retained earnings
Total
Reserve for
Voluntary
reduction entry
retainedearnings

Total surplus

Totalunitholders’equity49,95849,958

1,913,997

1,963,956

93,107,056

1,914

1,914

(1,914)－－(1,912,064)(1,912,064)(1,912,064)

1,954,924

1,954,924

1,954,924

－

1,914

1,914

40,94542,86042,86091,143,100

51,87351,873

1,954,943

2,006,816

93,149,916

Valuation and translation
adjustments

Balance at the
beginning of theperiodChanges of items
during the period
Reserve for
reduction entry
Dividends fromsurplus
Net income
Net changes of
items other thanunitholders’equity (net)Total changes of
items during theperiodBalance at the endof current period

Unappropriatedretainedearnings(undisposed
loss)

Deferred gains
or losses onhedgesTotal valuationand translation
adjustments(25,275)(25,275)

Total net
assets93,081,780－(1,912,064)
1,954,924(3,920)(3,920)(3,920)(3,920)(3,920)38,940(29,195)(29,195)

93,120,720

16

(4) Statements of Cash Distributions
For the period
from November 1, 2013
to April 30, 2014

For the period
from May 1, 2014
to October 31, 2014

Amount(yen)(Note 1)

Amount(yen)(Note 2)

I. Unappropriated retained earnings

1,913,997,778

1,954,943,312

II. Total Amount of Dividends

1,912,064,000

1,954,832,000(10,864)(11,107)

1,914,510

7,879

19,268103,433(Dividend per unit)
III. Voluntary retained earnings
Reserve for reduction entry
IV. Retained earnings brought forward(Note1)(Note2)

In accordance with the “cash distribution policy” stipulated in Article 34 of the Articles of Incorporation, the amountsof dividends are limited to the amounts of income. The article also stipulates the policy that “Top REIT shall
distribute amount in excess of the amount equivalent to 90% of its distributable profits as stipulated in Article 67-15
of the Act on Special Measures Concerning Taxation.” Based on these policies, Top REIT decided on a total
distribution of 1,912,064,000 yen as distribution of income for the period. This is the maximum value arrived at when
the number of units issued and outstanding (176,000 units) is multiplied by an integer, within the limit of the balanceof unappropriated retained earnings of the sixteenth fiscal period and after deducting the amount of deferred tax
liabilities being corrected due to the change in tax rate which would be transferred to the reserve for reduction entry.
Furthermore, Top REIT does not make cash distributions in excess of the profit as stipulated in Article 34-2 of the
Articles of Incorporation.
In accordance with the “cash distribution policy” stipulated in Article 34 of the Articles of Incorporation, the amountsof dividends are limited to the amounts of income. The article also stipulates the policy that “Top REIT shall
distribute amount in excess of the amount equivalent to 90% of its distributable profits as stipulated in Article 67-15
of the Act on Special Measures Concerning Taxation.” Based on these policies, Top REIT decided on a total
distribution of 1,954,832,000 yen as distribution of income for the period. This is the maximum value arrived at when
the number of units issued and outstanding (176,000 units) is multiplied by an integer, within the limit of the balanceof unappropriated retained earnings of the seventeenth fiscal period and after deducting the amount of deferred tax
liabilities being corrected due to the change in tax rate which would be transferred to the reserve for reduction entry.
Furthermore, Top REIT does not make cash distributions in excess of the profit as stipulated in Article 34-2 of the
Articles of Incorporation.

17

(5) Statements of Cash Flows(Unit: thousand yen)
Sixteenth Fiscal Period(November 1, 2013 –April 30, 2014)
Net cash provided by (used in) operating activities
Income before income taxes
Depreciation and amortization
Amortization of trademark
Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance expenses
Interest income and interest on securities
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable – other
Increase (decrease) in accrued consumption taxes
Increase (decrease) in advances received
Decrease (increase) in long-term prepaid expenses
Other, net
Subtotal

Seventeenth Fiscal Period(May 1, 2014 –October 31, 2014)

1,913,029
1,193,406
21
5,511
6,678
(675)
450,967(90,159)(137,402)(24,002)
15,641
13,142(61,670)
89,82870,327(17,394)
3,427,250

1,955,878
1,202,801
21
5,511
6,678
(1,579)445,328(25,992)
137,402(7,615)
15,974
4,086
223,962
6,218
120,345(29,376)
4,059,646

675(450,954)(963)
2,976,008

1,579(466,150)(1,145)
3,593,929

Net cash provided by (used in) investing activities
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust
Purchase of property, intangible assets in trust
Proceeds from tenant leasehold and security deposits
Proceeds from tenant leasehold and security deposits in trust
Repayments of tenant leasehold and security deposits in trust
Net cash provided by (used in) investing activities(2,951)(12,961,001)(8,450)－1,098,156(321,616)(12,195,863)(3,587)(255,766)－
26,413
160,435(511,732)(584,237)

Net cash provided by (used in) financing activities
Increase in short-term loans payable
Decrease in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from issuance of investment units
Payments for investment unit issuance expenses
Dividends paid
Net cash provided by (used in) financing activities

4,500,000(4,500,000)
4,500,000(67,500)
8,883,000(35,317)(1,579,605)
11,700,577－－
4,000,000(4,067,500)－－(1,912,064)(1,979,564)

Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period

2,480,722
4,842,736

1,030,128
7,323,458

Cash and cash equivalents at end of period

7,323,458

8,353,586

Interest income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities

189. Portfolio Data
As of the end of October, 2014
Asset Class

Area

Central Tokyo
OfficeBuilding

Property Name

Acquisition
Price

Appraisal Value at
End of Period

NEC Head Office Building
Harumi Island Triton Square Office Tower Y
Akasaka Oji Building
Kanda Park Plaza (Note 2)
Shiba-Koen Building
Harumi Island Triton Square Office Tower Z
Kanda Nishiki-cho 3-chome Building
Shinkawa Chuo Building
Shinjuku EAST Building
Ginza Oji Building(million yen)
41,95033,000
9,660
5,156
5,770
20,00012,700
5,610
5,800
2,000

(million yen)
53,15027,100
9,420
5,080
3,460
12,300
9,610
6,010
6,450
2,100

Investment
Breakdown(Note 1)
(%)
29.4
15.0
5.2
2.8
1.9
6.8
5.3
3.3
3.6
1.2

Tokyo
Faret East Building
2,091
2,570
1.4
Metropolitan Area
Subtotal (11 properties)
143,737
137,250
75.8
Sagamihara Shopping Center
12,0008,820
4.9
Ito-Yokado Higashi-Narashino Store
8,900
3,990
2.2
Tokyo
Metropolitan Area Musashiurawa Shopping Square
4,335
4,010
2.2
RetailKojima ×Bic Camera Kashiwa Store
4,500
4,890
2.7
Property
Other
MEL Building
1,210
1,300
0.7
Major Cities
Subtotal (5 properties)
30,94523,01012.7
Central Tokyo
Top Residence Nihonbashi Kayabacho
2,400
2,750
1.5
Fukasawa House Towers H&I
10,6357,410
4.1
Ecology Toyosu Procentury
5,160
5,340
3.0
Residential Tokyo
Property
Metropolitan Area Impress Musashi-Koganei
1,223
1,320
0.7
Top Residence Yoga
1,165
1,250
0.7
Subtotal (5 properties)
20,58318,070
10.0
Central TokyoOAK PLAZA (Note 2)
2,590
2,660
1.5
Other
Property
Subtotal (1 property)
2,590
2,660
1.5
Total (22 properties)
197,855
180,990100.0(Note 1) The investment breakdown is the ratio of the appraisal value at end of period for the applicable property or the applicable asset
class to the sum total of the appraisal value at end of period for all properties in the portfolio and is rounded to the first decimal
place.
(Note 2) Disposition of Kanda Park Plaza and OAK PLAZA has been completed on November 13, 2014.

19

For more information, please visit our website http://www.top-reit.co.jp/english/
Contact for inquiries in Japanese:
Top REIT Asset Management Co., Ltd.
Shusaku Ohashi, Director, General Manager, Finance Department+81-3-3243-2181
Contact for inquiries in English:
Top REIT Asset Management Co., Ltd.
E-mail address: info-top@top-reit-am.co.jp

DISCLAIMER:
Top REIT, Inc. makes no assurance or warranty with respect to the completeness or accuracy of this English
translation. In the event of any discrepancy between the Japanese original and this English translation, theJapanese original shall prevail. For complete and accurate information, please refer to the Japanese original.

20