http://www.top-reit.co.jp

Business Report for the 9th Fiscal Period

1-13-1 Nihonbashi, Chuo Ward, Tokyo(May 1, 2010 – October 31, 2010)

Leaping to the Next Stage

NEC Head Office Building

TOP REIT’S DECLARATION OF ITS BASIC POLICYAn Open LineA LETTER FROM THE EXECUTIVE OFFICER OF THE INVESTMENT CORPORATIONTOP REIT, Inc. (Top REIT) is committed to providing our investors with stable results and steady portfolio growth in themedium to long-term through the management of a diversified portfolio and optimal utilization of our sponsors.

Dear Investors,
In the Ninth Fiscal Period (May 1, 2010

dividends. Top REIT continues toa dividend per unit greater than the– October 31, 2010), the Japanesemaintain high occupancy of its portfolio

previous fiscal period at 14,220 yen.

economy escaped from its recessionary

and has both diversified fund raisingphase and entered a gradual recovery

methods and extended the averagephase, but the strength of theremaining length of interest-bearing

recovery has weakened recently due toliabilities by issuing its first investment

deceleration of the global economy andcorporation bond in June 2010.

Credibility

the impact of the sudden appreciation

Consequently, despite the continually

Property pipeline/warehousing functionof the yen. Under such circumstances,difficult real estate market and through

Personnel support

Top REIT has continued to steadily

the prudent management of Top REIT

manage its portfolio and prudently

Asset Management, Top REIT has

manage its finances as it strives toposted its second consecutive fiscal

expand the portfolio and maintain

period with an increase in revenue

BASIC POLICY

Optimal Utilization of Sponsors

SPONSORS
Sumitomo
Trust & Banking
Nippon Steel City Produce(Nippon Steel Group)

and income due to the following

Oji Real Estate

performance: operating revenue 6,060(Oji Paper Group)

Top REIT believes that time is stillneeded for a recovery of the Japanese
economy since overseas economic
conditions and Japanese politicalconditions remain uncertain and dueto the impact of the appreciation of theyen on Japanese companies. Althoughsigns of a recovery in the real estatemarket are also still difficult to find,
Top REIT plans to steadily continue
its pursuit of the “NEXT STAGE” byutilizing the strengths of our sponsors,

million yen (period-on-period increasea clear advantage of Top REIT, andof 4.2%), ordinary income of 2,204

focusing on prudent management of

million yen (period-on-period increase

the Top REIT portfolio and acquisitionof 5.4%) and net income of 2,204of new properties. We thank you andmillion yen (period-on-period increase

ask for your continued support andof 5.5%). Top REIT is also paying out

understanding.

Hiroaki Amano
Executive Officer
TOP REIT, Inc.

NINTH FISCAL PERIOD

Amano entered Sumitomo Trust and Banking Co., Ltd. in 1970. After serving as the General Manager of the Fukuoka
Branch, and Director and General Manager of Corporate Business Department I at the Head Office, he entered Wakachiku
Construction Co., Ltd. in 2001 and served as Managing Director. He was appointed as Corporate Advisor to TOP REIT AssetManagement Co., Ltd. in July 2009 and he has been Executive Officer of TOP REIT, Inc. since August 2009.

Performance Highlights
9TH FISCAL Period
Performance

Category

10TH Fiscal Period
Forecast

11TH Fiscal Period
Forecast(ANNOUNCED ON DECEMBER 15, 2010)(ANNOUNCED ON DECEMBER 15, 2010)

Period of asset management		

184 days		

181 days		

184 days

operating revenue¥

6,060 million¥

5,976 million¥

5,811 million

Operating income¥

3,019 million¥

2,951 million¥

2,845 million

1 TOP REIT’S DECLARATION OF ITS BASIC POLICY

13 PORTFOLIO SUMMARY

Ordinary income¥

2,204 million¥

2,169 million¥

2,047 million

1 NINTH FISCAL PERIOD PERFORMANCE HIGHLIGHTS

14 PORTFOLIO LIST

Net income¥

2,204 million¥

2,170 million¥

2,046 million

15 PORTFOLIO

Number of investment units

		 155,000 units

2 AN OPEN LINE: A LETTER FROM THE EXECUTIVEOFFICER OF THE INVESTMENT CORPORATIONDividend per unit¥

14,220

Portfolio size		

15 properties

		 155,000 units¥

		 155,000 units

14,000¥13,200		 15 properties		

15 properties

Note: The forecasts presented above are the current estimated figures calculated based on certain assumptions and actual figures[ CONTENTS ]3 AN OPEN LINE: A LETTER FROM THE PRESIDENT OF
THE ASSET MANAGEMENT COMPANY
9 FINANCIAL STANDING AND STRATEGY

17 TOP REIT ASSET MANAGEMENT
19 ASSET MANAGEMENT OVERVIEW: FINANCIAL OVERVIEW
20 UNIT PRICE PERFORMANCE AND VOLUME TABLE/
UNITHOLDERS/IR SCHEDULE

11 PROPERTY HIGHLIGHTS

may vary due to changes in circumstances. The forecasts should not be construed as a guarantee of the actual dividends.

1 Business Report for Ninth Fiscal PeriodBusiness Report for Ninth Fiscal Period 2

An Open LineA LETTER FROM THE PRESIDENT OF THE ASSET MANAGEMENTCOMPANY

LEAPING TO THE NEXT STAGE

1. Stable Income Secured

has become a particularly severe rental

property size and quality, facility grade,– A Management Strategy WITH EXTREME FOCUS ON DIVIDEND LEVEL –Despite Difficult Conditions

market. The occupancy rate was 90.6%

convenience of access, etc. Since its

Optimal Management of Portfolio
The following is an overview of TOP REIT, Inc.’s (Top REIT) performance over its

Maintains High Occupancy andNinth Fiscal Period (May 1, 2010 – October 31, 2010) from the perspective of
the asset manager. The overview is presented by Nobuhito Endo, President andRepresentative Director of Top REIT Asset Management Co., Ltd.

economy recovering, such as increased

levels of vacancy in areas outside ofinvestment that insists on the quality ofNinth Fiscal Period due to Top REIT

investment property and it is thus able

Asset Management taking steps ahead

to secure steady returns even in thisof its competitors to attract tenants

environment.

Steady Returns

President and Representative Director
TOP REIT Asset Management Co., Ltd.

Top REIT was able to record an

to the vacant areas. Further, a tenant

occupancy rate of over 99% for therenting an entire floor left the Kanda

entire Ninth Fiscal Period and continues

Park Plaza but the successor tenant

to maintain the high occupancy level

was advertised for and found so thatit has secured since the initial public

the occupancy rate was maintained atoffering. The luxury rental housing

100% without a vacant period.

Fukasawa House has tended to have its
occupancy rate fall below 90% during
summers within the present difficult
economic conditions. However, Top

rental market continues to record highinception, Top REIT has focused on

but was 96.9% as of the end of the

Nobuhito Endo

Endo entered Sumitomo Trust and Banking Co.,
Ltd. in April 1978. He was promoted to General
Manager of the Real Estate Management
Department in April 2004 and served as theGeneral Manager of the Real Estate Information
Development Department from April 2006. He wasappointed President and Representative Directorof TOP REIT Asset Management in July 2007 andExecutive Officer of TOP REIT in October 2007. He
resigned as Executive Officer in July 2009 to focus
on his asset management duties.

There have been signs of the Japanese

as of the end of the Eighth Fiscal Period,

Under these difficult conditions, Top
REIT managed to record increases in

REIT Asset Management was able

As for external growth, it is our position
that the present inability to verify atrue recovery in real estate conditions
is a chance to acquire new properties.
Therefore, we are utilizing sponsors’
pipelines as well as various information

As for the revision of rents during the

networks to gather information

Ninth Fiscal Period, the rents being

for new acquisitions centering on

revised during the Ninth Fiscal Period

office buildings in central Tokyo.

amounted to only a mere 2.3% of the

Unfortunately, however, we have been

total monthly rents, but Top REIT’s

to work closely with the responsible

unable to acquire new properties during

tenant first policy of seeking to raise

the Ninth Fiscal Period.

property management company tosatisfaction while understanding

focus on tenant advertising activities

tenant needs was highly appraised andand successfully post a high occupancy

the decreases in rent fell within thelevel of over 90% for the Ninth Fiscal

assumed scope for the rents despite the

Period, continuing from the Eighth

economic slump.

exports leading to improved corporate

central Tokyo and improvements inrevenue, income and dividends forearnings, but the improvement itself

the vacancy rate are only apparent

the second consecutive fiscal period –is moving at a gradual pace. Further,in some large and new buildings inEighth Fiscal Period (November 1, 2009

the economy remains in a severe

central Tokyo. On the other hand the– April 30, 2010) and Ninth Fiscal Period

condition due to the appreciation ofreal estate transaction market is seeing(May 1, 2010 – October 31, 2010). This

the yen and the end of the effects ofa gradual recovery in the investment

significant achievement is due to three

Fiscal Period.

economic stimulation measures while

desire of buyers due to improvement

primary factors: the high quality of oureconomic autonomy remains weakin the fund raising environment and a

and unemployment rate remains

Top REIT follows a policy of steady
operation and management based on
not only the competitive advantages ofthe portfolio quality but also based on
the policy of steady, deliberate activities

In central Tokyo’s real estate rental

to attract tenants and the tenant first

In addition, Top REIT Asset Management

portfolio (property grade and tenant

market there is a clear polarization

policy. This has enabled Top REIT toaimed to raise the occupancy rate ofsense of value in the real estate price.

attributes) centering on our flagshipby occupancy and rent levels forsecure steady revenues during the Ninthhigh. The real estate market is alsoThis has led to a spattering of real

properties of NEC Head Office Building

the Nittetsu Honmachi Building thatproperties according to the number of

Fiscal Period and also realize dividends

being directly impacted by the weak

estate transactions but the number ofand Harumi Island Triton Squareis located in the Osaka district, which

beneficial conditions they have such as

in excess of our forecast.

economic recovery, and even the officeproperties being sold remains small.

Office Towers Y and Z; the positive

History of Occupancy

results of our prudent management;
and the acquisition of a new property

DIVIDENDS

in the Eighth Fiscal Period that was(forecast*)(yen/unit)

14,22015,00012,65414,000(forecast*)

13,20013,484acquired by utilizing the strengths of

300,000（予想*）

our sponsors (pipeline for acquiring

14,000properties and 12,863
fund raising ability).
13,206

12,000(Gross rentable floor space: m2)

325,000

99.8

99.9 99.5 99.7 99.5 99.5

Occupancy (%)

Gross rentable floor space

275,000

99.2

99.4 99.3

99.5 99.6

100

99.4

99.5

99.4

291,647.88 291,647.88 291,647.88 291,647.88 291,647.88 291,627.72 291,627.72 291,627.72

276,833.20
261,671.68

250,000

7th FP

8th FP

9th FP

10th FP

11th FP

Note: The forecasts should not be construed as a guarantee of the actual dividends.
予想より+220円

第 10 期

第5 期

第6 期

75
70
178,104.46

65

150,000
125,00090

80

229,231.70

200,000
175,000

95

85

261,671.67

225,000

3,000
099.2 99.2

283,622.23 283,622.23 283,622.23

9,000
6,000

(Occupancy: %)

IPO
Mar.
2006
(End of)

Oct.
Apr.
Oct.
(1st FP) (2nd FP) (3rd FP)
2007

Apr.
(4th FP)
2008

Oct.
(5th FP)

Apr.
(6th FP)2009

Oct.
(7th FP)

Apr.
(8th FP)
2010

May

Jun.

Jul.

Aug.

9th FP

Sep.

Oct.
(9th FP)

Nov.

60

Business Report for Ninth Fiscal Period 4

3 Business Report for Ninth Fiscal Period
5th FPAn Open LineA LET TER FROM THE PRESIDENT OF THE ASSET MANAGEMENT COMPANY

Issuance of First Investment

unit of 14,000 yen for the Tenth Fiscal

Corporation Bonds

Period and 13,200 yen for the Eleventh
Fiscal Period. These forecasts are based

Top REIT filed a shelf registrationon the existing portfolio of fifteenstatement for the issuance of investment

properties (as of December 15, 2010).

corporation bonds in May 2010 (twoyear period, 100 billion yen) and issued

doing such.
As we come to the Tenth Fiscal Period,

In addition, in the case of Harumi

other areas to the Shinagawa area

The present lease agreement is an

Island Triton Square Office Tower Z,

around the summer of 2011.

ordinary lease agreement, which

the fixed-term lease agreement withthe future of the economic recovery

Obayashi Corporation terminates at thestill seems opaque and while some of

B. The termination of the leaseagreement of the Akasaka Oji

end of March 2011. In this instance,

our tenants have posted a recovery in

Building and the specific timing

we are planning to execute a new

their corporate earnings as a wholeof such are still undetermined.

lease agreement from April 2011 withmeans that SCE needs to give a noticeof termination six months in advanceor immediately terminate by paying
in lump sum an amount equivalent
to six months of rent. Therefore, SCE

its first investment corporation bonds

Doggedly Negotiate Rent Revisions

they are facing difficult times. Within

in June. The issuance was decidedwith Major Tenants to Reachthis economic climate, Top REIT is

because the debt market judged it to beAgreements within Assumptions

facing rent revision negotiations by the

The Tenth Fiscal Period is a criticalend of March 2011 with some of theagreement with rent guarantees so thatSCE was founded at the Akasaka Oji

period for Top REIT in which it faces

tenants in Harumi Island Triton Square

we can counter any risk of the tenant

Building and originally leased three

However, the fact that SCE notified Top

major biannual rent revisions. The lease

Office Tower Y, the Kanda Nishiki-

moving out or rents being reduced.

floors at the time of its establishment

REIT prior to making its detailed final

agreements with our tenants in Harumi

cho 3-chome Building (formerly:

in 1993. SCE increased the floor spacedecision is representative of the long-

Island Triton Square Office Tower Y call

Sumitomo Corporation Nishiki-cho

it rented as operations grew andterm relationship of trust that has been

for rent revisions to be made once every

Building) and Harumi Island Triton

eventually became the primary tenantcultivated between the two parties.

two years (as shown in the table at the

Square Office Tower Z. This equates toof the building where it rents about

Although it is truly regrettable thatbottom left). Despite the fact that theabout 30% of all of Top REIT’s monthly

94% of the floor space today. SCE

SCE is relocating, this building boasts

economy was facing difficult times

rent revenues. Clearly, this next roundhas been a resident of the Akasakastrong competitiveness with regard to

immediately after the Lehman Shock,of rental revisions will have a huge

Oji Building for 17 years including theits location, environment, specifications

period under the former owner andand other factors and we feel it willsponsor of Top REIT Asset Management

meet the needs of many potential new– Oji Real Estate.

tenants.

the optimal time to issue bonds due tothe recovery trend in the bond market.
The raising of funds via collateral free
investment corporation bonds with amaturity of five years enabled Top REIT
to diversify fund raising methods and toextend the average remaining period ofinterest bearing liabilities.

2. CONTINUE MANAGEMENTSTRATEGY WITH EXTREME FOCUS

Corporation. We plan to negotiate along-term lease agreement and a lease

Aiming To Primarily Acquire
Office Buildings In Central Tokyo
It is important to note that it isnecessary to obtain new revenue by
acquiring new properties to cover theloss of revenue and increase revenue

Top REIT was able to reach agreement

impact on dividends. Top REIT Assetto more or less leave rents as is in theManagement as the asset manager is

Top REIT has issued forecasts regarding

Sixth Fiscal Period. One key agreement

well aware that this is truly a time whenmanagement conditions for the Tenthat that time that was reached with one

its management ability is tested and we

Fiscal Period (November 1, 2010 – Aprilof the major tenants was to not only

are committed to doggedly negotiating

30, 2011) and Eleventh Fiscal Period

leave the rents as is but to spread out

with each tenant over their rent levels(May 1, 2011 – October 31, 2011). The

the periods for discussing the revising

to achieve agreements within our

forecasts have projected dividends perof rents by changing the schedule forassumptions.

ON DIVEDEND LEVELHistory of Rent Revisions
Monthly rent before revision

47.1%
yields that can contribute to improving

Akasaka Oji Building

9.7%

Harumi Island Triton Square

9.8%

3.4%

の特殊要因
7.7%

+2.1%

300
250
200

-5.8%
+0.2%

12th FP+14.9%+9.1%

10th FP

150

30.6%

100
50

60.4%

+7.8%
-1.4%

-6.5%

1st FP 2nd FP 3rd FP 4th FP 5th FP 6th FP 7th FP 8th FP 9th FP 10th FP0

11th FP

9.0%

AKASAKA OJI BUILDING

Sagamihara SC
Other

7.2%

1.8%

The above percentages are percentage that rents
which are subject to revision negotiations amountto versus total rents (based on monthly rents)

provides the six months advance notice.

Entertainment Inc. (SCE). On December
15, 2010, SCE notified Top REIT of its

・Has specifications comparable

relocation plans and the following are

Akasaka
Imperial Gardens

the key points.

head office from TK Minami-Aoyama
Building to Sony City located in

Akasaka-mitsuke Sta.

Akasaka Oji Building

Aoyamaitchome Sta.

ama

Aoy

St

The Houses of the Diet

Embassy of Canada
TBS
Tameike-sanno Sta.
Akasaka Sta.

Tokyo Midtown

Konan, Minato Ward, Tokyo. SCE
is also planning to move the offices246) to feature high visibility, while
standing adjacent to Akasaka
Imperial Gardens where Crown
Prince s Palace is located as well as
the Canadian Embassy, which provide
abundant greenery despite businesssurroundings
Aoyama 1-chome Station on
the Tokyo Metro Ginza Line andHanzomon Line and Toei Oedo Line,enjoying high convenience for access

Oji Building is Sony Computer

A. On August 23, 2010, SCE moved its

・Faces Aoyama-dori Street (Route・Located a four-minute walk from

*比率は賃料ベース割合です
The primary tenant of the Akasaka

晴海トリトンZ棟

Kanda Nishiki-cho 3-chome Building

100

six months period is up as long as it

Managing the Relocation Plan

Increase in monthly rentMonthly rent before revision

150

0

その他andbuildings in central Tokyo at pricesof the Primary Tenant of the

Other

once these are finalized.

new properties that are primarily office

Office Tower Y (partial)+0.5%

can terminate the agreement after the

REIT will continue to strive to acquire

Revised monthly rent

250

50

within assumptions. Therefore, Top

notice based on the lease agreement

dividend levels.

Office Tower Z+0.1%

revisions with major clients are realized

Harumi Island Triton Square

300

200

further, even in the event that the rent

Rent Revisions in Tenth Period and After

Rent revision results(%) =(mn yen)However, SCE will issue a termination

the present sublessee of Obayashi

Roppongi Sta.

ANAIntercontinentalHotel

to most modern office buildings,
including individually controlled air
conditioning systems (renewed in2006), office automation-compatible
ﬂoors and leasable to multiple
tenants
・Administration by staff / mechanicalsecurity at night and on holidays

leasing Akasaka Oji Building and

（百万円）

250

5 Business Report for Ninth Fiscal Period

250

Business Report for Ninth Fiscal Period 6

An Open LineA LET TER FROM THE PRESIDENT OF THE ASSET MANAGEMENT COMPANY

The early notice of the relocation

real estate market is also strong. In such

portfolio of about 210 billion yen. Thisand revenue generating ability that are

following sufficient consideration ofThis means a prudent examination

plan by SCE enables Top REIT Assettimes, it is easy to reach an agreementlevel was chosen because it will lower

located in excellent locations in central

the price and yields of the property orof the price and yield of the property

Management to study the needs ofwith tenants when negotiating their

the portfolio share of the NEC HeadTokyo. As for non-office buildings, Topproperties to be acquired and otheror properties to be acquired, thetenants in the area around this building,rent revisions to raise rents and this

Office Building, the trophy property

REIT will examine investing in residential

factors, Top REIT will examine a variety

investment unit price, stock market

launch preleasing activities including

increases income. Contrarily, duringof this portfolio, to under 20%.

properties primarily in the wards ofof financing methods in line with the

movements and the trends among both

approaching rental agents in the area

period of economic recession the

Furthermore, we are also working toTokyo that enjoy good access to themarket environment. These financing

Japanese and overseas investors.

and so we will endeavor to take steps

pressure from tenants to reduce rents

achieve a portfolio that can steadilynearest station or central Tokyo and formethods include using cash on hand,that will enable the replacement tenants

becomes stronger and leads to somemaintain a dividend per unit level ofwhich stable rent levels and occupancy

borrowings from banks, the issuance of

to move in promptly after SCE relocates.

cases where the reduction of rents has

between 13,000 yen and 14,000 yen.

levels can be projected. In the caseinvestment corporation bonds and theto be accepted in order to prevent the

Top REIT collectively calls these targets

of properties that are neither officeconducting a capital increase throughTop REIT Asset Management will

relocation of tenants. This, of course,

the NEXT STAGE.

buildings nor residential properties, Toppublic offering. The LTV (ratio of loans

continue to follow a management

REIT will consider investing in properties

to total assets) rate as of the end ofstrategy with an extreme focus on thethat can be projected to provide stable

the Ninth Fiscal Period is 50.5%. Our

dividend levels. Specifically, we willprofits.

financial policy calls for a ceiling ofspeedily respond to changes in the

60% for the LTV but for a target ofmarket environment, secure stablearound 50% in ordinary operations.

income through flawless management,

We are however holding talks with ourand acquire superior properties atlenders regarding potential increases

advantageous timing as we work

leads to a drop in income. Therefore,
in this present period where the real

The growth of an investment

estate market is slumping, an effective

corporation occurs through externalmeans for securing steady revenue

growth, which is the improvement

for investment corporations and toof revenue through the acquisition

stabilize dividends is the acquisition ofof properties; and internal growth,

new properties. Growth of asset size

which is the improvement of revenue

is also necessary to diversify the risk ofgenerated through the leasing ofrents being reduced and risk of certain
tenants holding a large amount of theproperties already in the portfolio.

portfolio share.

The source of an investment
corporation’s revenue is the rent andfor Leaping to the NEXT STAGE

tenant of the portfolio properties.
When the overall economy is strong, thethe size of the Top REIT portfolio
is 175 billion yen. This means that
achievement of the NEXT STAGE

Successful investing in the types ofrequires an additional investment ofproperties outlined above requires full

about 35 billion yen. Under the present

utilization of the networks possessed

portfolio the share of office buildings isabout 75% and the share of non-officebuildings (retail, residential, etc.) is about
25%. In the case of future acquisitions,
it is our intent to maintain the present

Top REIT’s Management Strategy

other income obtained from each

As of the end of the Ninth Fiscal Period,

Top REIT has set its next goal to be ashare of investment portfolio and wewill primarily look at investing in Classby our sponsors – Sumitomo Trust andBanking, Nippon Steel City Produce(Nippon Steel Group) and Oji Real
Estate (Oji Paper Group) – and successful
application of the information networkthat Top REIT Asset Management has
built on its own.

¥150bn¥160bnarw

fo

7 Business Report for Ninth Fiscal Period¥190bn¥200bnconducting a capital increase throughmanagement organization and teampublic offering. In the event of a capitalas we endeavor to provide prudent

increase through public offering,

management and growth of the Top
REIT portfolio. We are grateful for yourcounter any impact of possible dilution.

continued support.

¥210bnGrowth Methods
Property acquisition
targetPortfolioshare ully utilize the Top REIT Edge❙F
❙ Implement growth strategy with an extreme

focus on a dividend level of between ¥13,000
and ¥14,000

Central Tokyo✣H
 igh-quality
specifications
OfficesOther
thanofficesTargeting asset size of ¥210bn,
reducing NEC Head Office Building’s
share of the portfolio to 20%¥180bnto continue strengthening the

Top REIT will consider taking steps to✣E xcellent location in

Acquisitions of additional ¥35bn
Appropriately control LTV¥170bna level that it makes sense to consider

required for property acquisitions,

Futureinvestment
policy/stancerd

Asset size: ¥210bn
No. of properties: around 18 – 20
LTV: 40 – 50%

Asset size: ¥175.047bn
No. of properties: 15
LTV: 50.5%

of investors’ value. We also intend

As for the procurement of funds✣P roperties with strong
Expandasset size
whilemaintaining
present
shares in theportfolio

competitiveness(ability to attract tenants,
long-life and stable
operations)75%✣T arget residential
properties
Located in Central Tokyo
or Tokyo metropolitan
Approx.
area, close to railway
25%
stations and withexcellent transit accessStable occupancy rates
and rent levels●●(Asset size)

Approx.

Future Policy

ap

e

l
er

th

r
Fu

8th FP

Additionally, the LTV level is also at such

Future strategy for the Next Stage

Next stage

10

could temporarily raise the LTV level.

with the equivalent competitiveness(No. of properties)15

to provide Top REIT investors withstable dividends and a maximization

A office buildings or office buildings

Growth strategy for the next stage

20

in borrowings in the future that

Growth Strategy
 hile securing a foothold for revenues,❙W

acquire competitive and highly profitableproperties
 lexibly select fund raising methods according❙F

to the market environment
Bank loans:
Flexibly utilize strong bank formation
Investment corporation bonds:
Consider in view of market environment, etc.
●

Leaping for the NEXT STAGE
Current Management Policy

NEXT STAGE❙S ecure foothold for revenues through flawless management of existing properties
Minimize decrease in revenue through rent revisions
Continue to strengthen tenant relations and maintain high occupancy rates
Focus on securing tenants for vacant space⇒Realize management ability through cooperation between asset management
and property management companies●●●❙ External growth that perceives good acquisition opportunities for superior properties
Utilize the sponsors’ strengths (properties owned
Acquire blue-chipor brokered by sponsors)
properties
Utilize various information channels⇒Take full advantage of the sponsors’ strengths (brokerage and supply capabilities)●●❙ Select fund raising methods according to the market environment⇒Conduct financial operations that realize the sponsors’ strengths (credibility) anddynamic flexibility●●

 apital increases through public offerings:
C
Consider level of investment unit price andproperty returns, as well as amount of net
assets and dividend per unit

NEXT
STAGE

3. Preparing To Leap To The

Conclusion

Asset Size

Dividend Level

Implement ¥210.0bn

Maintain ¥13,000 – ¥14,000

Increase Investors' ValueBusiness Report for Ninth Fiscal Period 8

FINANCIAL STANDING AND STRATEGY:
DIVERSIFYING SOURCES TO ACHIEVE GREATER STABILITY

Top REIT has been conducting prudent financial management

The following key elements of Top REIT’s financial strategy

based on a financial policy that focuses on stable financial

were realized as a result of this issuance.

management.

STABLE FINANCIAL MANAGEMENT

1) E
 xtended average remaining period of interest-bearing

During the Ninth Fiscal Period, Top REIT f iled a shelfregistration statement for investment corporation bonds in
May 2010 (2-year period, up to 100 billion yen) and issued 8.5
billion yen investment corporation bonds in June and used
the procured funds to refinance 8.5 billion yen in borrowings
that matured in June. This was the first time for Top REIT
to issue investment corporation bonds. The issuance alsoenabled Top REIT to diversify its fund raising methods andextend the average remaining period of interest-bearing
liabilities. As a result of the issuance, the outstandingbalance of interest-bearing liabilities as of the end of theNinth Fiscal Period was 94.172 billion yen and consequently
the LTV was 50.5% (50.6% as of the end of the Eighth Fiscal
Period).

liabilities
The issuance of the 5-year investment corporation bonds
resulted in extending the average remaining period ofinterest-bearing liabilities to 2 years and 2 months as of thecompletion of refinancing at the end of June 2010.
2) Further diversified fund raising methods
The issuance of the investment corporation bonds enabled
Top REIT to directly access the capital markets and diversify
its fund raising methods from the indirect method ofborrowings from financial institutions. In this manner, Top
REIT diversified its fund raising methods.
3) Reduced fund raising costs
The superb market credibility of the J-REIT sponsors anda positive market environment enabled funds to be raisedthat only have an annual interest rate of 1%.

OVERVIEW OF INVESTMENT CORPORATION BOND

Name:

TOP REIT, Inc. No. 1 Unsecured Investment
Corporation Bonds (with special pari passu
conditions among specified Top REIT investment
corporation bonds)

Issued amount:

8.5 billion yen

Interest rate:

1.0% per annum

OUTSTANDING BALANCE OF LOANS BY LENDER

June 4, 2010
June 4, 2015

Interest payment
dates:

June 4 and December 4 of each year

Development Bank of Japan Inc.

A3 (Moody’s Investors Service, Inc.) andAA- (Rating and Investment Information, Inc.)

3) Manage interest fluctuation risks
 op REIT has constructed a well-balanced mix of stableT
fixed interest and floating interest loans to manageinterest fluctuation risks (see charts below).
Top REIT also has 23.4 billion yen of refinancing scheduled
for the Tenth Fiscal Period. Top REIT will seek to maximize
investors' value in the refinancing by primarily looking at
borrowing from financial institutions but also considering theissuing of investment corporation bonds and other financing
approaches.

 op REIT has focused on extending the averageTremaining period of interest-bearing liabilities and the
diffusion of repayment dates so that repayments andrefinancing do not overly concentrate on certain dates.

history of debt structure and ltv

250Bank of Tokyo-Mitsubishi UFJ , Ltd.

37.1%
27.8%

Sumitomo Mitsui Banking Corporation

14.7%

25.0
晴海アイランドトリトンスクエア
オフィスタワーY

18.9%

0

18.6%

37.3%

209.0

11.4%

Mizuho Corporate Bank, Ltd.

47.3%

47.3%

47.3%

103.0

93.0

132.8

132.8

684.6

684.6

IPO

727.0

727.0

334.0

1st FP(End of)2nd FP

50.5%
67.0

3rd FP

4th FP

5th FP

6th FP

(%)
60

45

874.7
30

Conduct operation with a target ratio ofloans to total assets (LTV) of around 50% in
contrast to the 60% ceiling

544.0

334.0

50.6%
67.0

875.4

28.0%

晴海アイランドトリトンスクエア
334.0
オフィスタワーZ

14.7%

47.4%

LTV

750

500

4.9%

Bond rating:2) E xtend remaining periods and spread out repayment
datesLong-term

Sumitomo Trust andBanking Co., Ltd.

The Chuo Mitsui Trust andBanking Company, Limited

No collateral or guaranteeIn addition to procuring loans from the three mega banks
and major trust banks, the bank formation includes theDevelopment Bank of Japan, a life insurer and othermajor banks. Top REIT has thus successfully secured
diverse lenders and financial flexibility (see preceding
page for chart on outstanding balance of loans bylender).

32.3%

4.8%

Collateral andguarantee:1) Maintain a stable bank formation and secure financial
flexibility(100 million yen)
1,000
Short-term

1.2%

Mitsubishi UFJ Trust andBanking Corporation

Issued date:

Top REIT has established the following policies to realize stable financial management.

Resona Bank, Limited 1.2%

Dai-Ichi Life
Insurance Company, Limited

7.7%

Maturity:

Financial Policy

7th FP

8th FP

15

9th FP

0

REFINANCING SCHEDULE AND SPREADING OUT REPAYMENT DATES(million yen)
25,000

REMAINING PERIOD OF INTEREST-BEARING LIABILITY
Short-termLong-term
Investment corporation bonds

6,700

20,000

1,670
4,908

15,000

1,273

10,000
5,000
0

9,000

11,189

9th
FP

8,500

6,300

8,500
4,000

1,823

10th 11th 12th 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd 23rd
FP
FP
FP
FP
FP
FP
FP
FP
FP
FP
FP
FP
FP
FP

*Scheduled repayment of 67.5 million yen each period between the 9th FP and 21st FP

9 Business Report for Ninth Fiscal Period

1 year and 10 months (avg.)

As of June 30,2010

2 years and 2 months (avg.)

Ratio of Long-term Loans

9th FP (as of Oct. 31, 2010)

1 year and 9 months (avg.)

(%)
100

Ninth Fiscal Period
June 2010 8.5 billion yen in long-term loans
Issued No. 1 Unsecured Investment Corporation
Bonds (5 years) for the repayment

7.0

Tenth Fiscal Period
February 2011
March 2011

6.7 billion yen in short-term loans
16.7 billion yen in long-term loan

12.4 11.3 16.2 16.2

Long-term

7.1 7.1

38.5

80
60

Ratio of Loans with Fixed Interest Rates
Short-term

REFINANCING SCHEDULES
No. 1 Unsecured
Investment
Corporation Bonds

3,000

16,700
8,500

9,800

Managing the Risk of Fluctuating Interest Rates

8th FP (as of Apr. 30, 2010)

100.0

61.5

92.9 92.9
83.8 83.8

IPO

1st FP 2nd FP 3rd FP 4th FP 5th FP 6th FP 7th FP 8th FP 9th FP(End of)

19.1

35.9

24.9

24.0

37.9

37.9

57.6

Fixed

52.8

52.8

47.2

47.2

60

100.0
80.9

40

64.1
42.4

20

20
0

Floating

80

100.0 87.6 88.7

93.0

40

(%)
100

0

IPO

75.1

76.0

62.1

62.1

1st FP 2nd FP 3rd FP 4th FP 5th FP 6th FP 7th FP 8th FP 9th FP(End of)Business Report for Ninth Fiscal Period 10

property HIGHLIGHTs

property HIGHLIGHTs
KANDA NISHIKI-CHO 3-CHOME BUILDING(former: Sumitomo Shoji Nishiki-cho Building)

HARUMI ISLAND TRITON SQUAREOFFICE TOWERS Y & Z
Address
Type of title

Land: Ownership; Building: Sectional ownership

Floor space

267,132.67m2 (Note)

Completion

October 2001

Acquisition pricePortfolio share

Address

1-8-11 Harumi, Chuo Ward, Tokyo

Office Tower Y: 33,000 million yen; Office Tower Z: 20,000 million yen
Office Tower Y: 18.9%; Office Tower Z: 11.4%

3-11-1 Kanda Nishiki-cho, Chiyoda Ward, Tokyo

Type of title

Ownership

Floor space

12,169.78m

Completion

March 1973

Acquisition pricePortfolio share

2

Hamarikyu
Onshi Teienum

10,635 million yen

Portfolio share

6.1%

302

r
ive

Fukasawa House Towers H & I are located in one of the mostprestigious housing areas in Setagaya Ward, Tokyo and lie adjacentto Komazawa Olympic Park. The site itself is rich in greeneryand landscaped to provide an excellent residential environment.
Fukasawa House is an immense housing project comprised ofthirteen residential towers and a retail zone. Tower H and Tower I
are the buildings designated for rental housing in the project, andhave 124 units ranging in size from two- to four-bedroom units withareas of 75m2 to about 120m2. The towers also boast strong antiseismic structures. The property is located a 15-minute walk from
Toritsu Daigaku Station on the Tokyu Toyoko Line, an 18-minute walkfrom Komazawa Daigaku Station on the Tokyu Den-en-toshi Line anda 20-minute walk from Jiyugaoka Station on the Tokyu Toyoko andTokyu Oimachi Lines. This site also enjoys good bus access.
Komazawa
Daigaku Sta.

Ogawamachi Stn.

R

S

Tsukishima Sta.

401

473

Takebashi Stn.

Marubeni

HARUMI ISLAND TRITON SQUAREOFFICE TOWERS Y & Z

a St.

azaw

Kom

463

Kachidoki Sta.

Komazawa
Park

Kanda Nishiki-cho
3-chome Building
403

301

Shuto Expr
essway304

Hamamatsucho Sta.

June 2004

Fukasawa House
Tower H
Tower ISt.

11 Business Report for Ninth Fiscal Period

The Tsukiji Market

a

id

204

Completion

Awajicho Stn.

50

Shinbashi Sta.

12,135.36m2

7.3%

450

Tsukiji Sta.

L and: Ownership, Building: Sectional ownership

Floor space

Jiyu

Note: Includes the floor space of the entire building (Western Zone).

316

2-1-2 Fukasawa, Setagaya Ward, Tokyo

12,700 million yen

Jimbocho Stn.

Ginza Sta.
15

Address
Type of title

Acquisition price

The Kanda Nishiki-cho 3-chome Building is very conveniently locatedonly a 3-minute walk from the Tokyo Metro Tozai Line Takebashi
Subway Station and a mere 5-minute walk from Jimbocho Station on
the Toei Shinjuku and Mita Subway Lines. Furthermore, it is withineasy walking distance of Japan’s largest CBD, the Otemachi andMarunouchi area. The building’s specifications have been upgradedwith large-scale renovations in 2001 and anti-seismic construction
in 2009, placing it on par with new office buildings in the area. The
tenant is a subsidiary of a listed firm and enjoys high credibility inthe market. Despite being an office building in Central Tokyo, theproperty boasts a high NOI yield and has contributed to both cash
flow and earnings since it was acquired.

Harumi Island Triton Square is a large-scale multi-use destination that is thefruit of a comprehensive redevelopment in Harumi, a bay-side gateway toTokyo. The signature of the project is the three landmark office skyscrapers
and it is also home to a concert hall, over 60 shops and restaurants, othercommercial facilities and a high-rise condominium Tower Y and Tower Z are“ intelligent” office buildings with a standard floor space of approximately
2,000m2 and 2.7m ceiling height. The property’s end tenants include listedcompanies. Harumi Island Triton Square is located about a six-minute walkfrom Kachidoki Station on the Toei Oedo Subway Line.

FUKASAWA HOUSE TOWERS H & I

Toritsu
Daigaku Sta.

.

Meguro St

Imperial Palace
Otemachi Stn.

Jiyugaoka Sta.

Business Report for Ninth Fiscal Period 12

PORTFOLIO SUMMARY

Portfolio list

BUILDING A SUPERIOR PORTFOLIO THAT GENERATES STEADY RESULTSTOP REIT HAS CONSTRUCTED A POWERFUL PORTFOLIO OF SUPERIOR PROPERTIES WITH EXCELLENT PERFORMANCE(end of Ninth Fiscal Period)

J - R E I T p o r t fo l i o m a n a g e m e nt c a n b e d e f i n e d a s t h equalitative improvement of assets based on a basic core

conducting of investment by an asset management company

policy of managing a diversified portfolio and optimallyfor its J-REIT in accordance with said J-REIT’s investment

utilizing sponsors’ strengths. Therefore, Top REIT Asset

pol icy and the management of said J-REIT’s por tfol ioManagement is devoted to creating a special value added forw ith the ai m of max i m i zing the value and prof itability

the existing portfolio by applying our management strengthof the overal l por tfol io. The basic pol icy of Top REIT

and optimally utilizing our sponsors.

Portfolio Data
Asset
Class

Area

Property Name
NEC Head Office Building

47,75027.2

33,00039,00022.2

20,00015,1008.6

12,70014,100

8.0

Akasaka Oji Building

9,660

13,300

7.6

Shiba-Koen Building

5,770

3,410

1.9

Kanda Park Plaza

5,156

4,959

2.8

Tokyo Metropolitan Area

Faret East Building

2,091

2,500

1.4

Kansai Area

Nittetsu Honmachi Building

1,100

1,380

0.8

131,427

141,499

80.7

Sagamihara Shopping Center

12,00010,3005.9

Ito-Yokado Higashi-Narashino
Store

8,900

5,568

3.2

Musashiurawa Shopping Square

4,335

3,810

2.2

25,235

19,678

11.2

Fukasawa House Towers H & I

10,6356,980

4.0

Ecology Toyosu Procentury

5,160

4,520

2.6

15,795

11,500

6.6

2,590

2,674

1.5

2,590

2,674

1.5

175,047

175,351

100.0

Harumi Island Triton Square OfficeTower Y
Harumi Island Triton Square OfficeTower Z
Kanda Nishiki-cho 3-chome
Building (former Sumitomo
Corporation Nishiki-cho Building)Central Tokyo

・Targeted areas are the three major metropolitan areas andcore regional cities nationwide
・Asset allocation is targeted at up to 80% (Note)・Targeted areas are the three major metropolitan areas andcore regional cities nationwide
・Asset allocation is targeted at up to 50% (Note)

OfficeBuildings

RetailProperties

Residential
Properties
Other
Assets・Targeted areas are the three major metropolitan areas andcities designated by government ordinance (and similar cities)
・Asset allocation is targeted at up to 50% (Note)(Note 4)

Office・Targeted areas are regions that are appropriate for each usageof the properties
・Asset allocation is targeted at up to 10% (Note)

Note: The actual investment ratios may surpass the targets described above temporarily or for a certain period of time, including the start of management due to giving priority to dynamicallysecuring investment opportunities for competitive properties and other reasons.

Subtotal (9 properties)

portfolio history
End of 1st Fiscal Period
Expansion of Portfolio

End of 4th Fiscal Period
Harumi Island Triton Square Office Tower Z

20 billion yen and 4 other properties

End of 9th Fiscal Period
Kanda Nishiki-cho 3-chome Building

RetailTokyo Metropolitan Area

12.7 billion yen and 1 other property

Subtotal (3 properties)

Residential
8 properties

13 properties

113.286 billion yen
Diversification of Uses

Residential 6.8% Other 1.6%

Retailfacilities

Retailfacilities

18.4%

Office buildings

Diversification of Property Share Risk

33.8%

NEC
Head Office
Building

37.0%

75.1%

NEC
Head Office
Building
Other

26.7%

Subtotal (1 property)

Note 3: Investment Breakdown indicates the proportion of each property’s appraised value to the total appraised value of all properties.
Note 4: Property name was changed on December 15, 2010.

24.0%
Other

39.6%

Harumi Island Triton Square
Office Tower Z 12.7%

OAK PLAZA

Note 2: Appraised Value at End of Period indicates the appraisal value (as of October 31, 2010) by real estate appraisal firms based on the asset evaluation method, a standard stipulated in the
Articles of Incorporation and rules by the Investment Trusts Association, Japan.

NEC
Head Office
Building

45.8%
Harumi Island
Triton Square
Office Tower Y

Harumi Island Triton Square
Office Tower Y 29.1%

Central Tokyo

Note 1: Acquisition Value indicates the transaction price (pre-tax price) described in the real estate sales agreement and the trust beneficiary interest transfer agreement concluded uponacquiring each of the properties.

Office buildings

75.5%

Other

Total

14.4%
Office buildings

81.6%

Residential 9.0% Other 1.5%

Tokyo Metropolitan Area

Subtotal (2 properties)

175.047 billion yen

Retailfacilities

16.1%

Other

15 properties

157.187 billion yen

INVESTMENT
BREAKDOWN(%) (Note 3)

41,950c onsist s of the pu r su it of both ext er na l g row th a nd

Diversified Portfolio

ACQUISITIONAPPRAISED VALUEVALUE (million AT END OF PERIOD
yen) (Note 1) (million yen) (Note 2)

21.0%

Harumi Island
Triton Square
Office Tower Y
Harumi Island Triton Square
Office Tower Z 11.4%

18.9%

Note: The charts represent rounded figures and so totals sometime do not equal 100.0%

13 Business Report for Ninth Fiscal PeriodBusiness Report for Ninth Fiscal Period 14

TOP REIT Remains Committed to Building a Strong,
Diversified Portfolio Centered on the Tokyo Area

Portfolio

tokyo
metropolitan
area

CentralKeisei Ueno

Tokyo

Asakusa

BUNKYOWARDSHINJUKU
WARD

Oshiage
Faret East
Building

Akihabara
KameidoOak plaza

NAKANO
WARD

Kanda

Shinjuku

CHIBA

TOKYO

Ueno

Takadanobaba

NakanoMusashiurawa
Shopping Square

SAITAMA(as of the end of January 2010)

Kinshicho

CHIYODA
WARD
Kanda Nishiki-cho
3-chome Building

Ito-Yokado HigashiNarashino StoreKANAGAWATokyo

Sagamihara Shopping
CenterSHIBUYA
WARD
Akasaka Oji
Building

MINATO
WARD

Shibuya
Shimokitazawa

CHUO
WARD

Hamamatsucho

SETAGAYAWARD
Sangenjaya

Kanda Park Plaza

Shimbashi

Ecology Toyosu
Procentury

AREA

Total acquisitions (as of October 31, 2010)

ToyosuShiba-Koen
Building¥175,047 million

Umeda
Osaka

KyobashiAppraised value (as of October 31, 2010)

Shinkiba

Sengakuji

MEGURO
WARD

Kansai¥175,351 million

Yodoyabashi

Properties

MeguroShinagawa

GotandaFukasawa House
Towers H & I

NEC Head Office
Building

Kintetsu Nanba

Harumi Island Triton
Square Office Towers
Y&Z

15

Nanba

Rentable area

Nittetsu Honmachi
Building

291,627.72m2

Top REIT boasts a diversified portfolio built around central Tokyo office properties
Geographic Area

Diversification of Assets in Portfolio

100%

Other
Retail

11.5%

80%
60%
40%

Retail

18.4%

2.0%

Residential 8.1%
Retail19.3%
Office

88.5%

1.6%

Other

Residential 6.8%
Retail

16.1%

Other

1.6%

Other

1.5%

Residential 9.7%

Residential 9.0%

RetailRetail

15.5%

14.4%

100%
80%
60%

Office

81.6%

Office70.6%

Office75.5%

Office73.1%

Office75.1%

40%

Osaka 1.1%

Osaka 1.0%

Osaka 0.8%

Osaka 0.7%

Osaka

Tokyo
Metropolitan Area

Tokyo
Metropolitan Area

Tokyo
Metropolitan Area

Tokyo
Metropolitan Area

Tokyo
Metropolitan Area

Tokyo
Metropolitan Area

Central Tokyo

Central Tokyo

Central Tokyo

4th FP

5th/6th/7th FP

8th/9th FP

13.0%

Central Tokyo

19.8%

86.0%

Central Tokyo

IPO

1st FP(End of)

79.2%

28.6%

Central Tokyo

70.6%

24.2%

75.1%

0.7%

26.6%

72.8%

Osaka

0.6%

24.6%

74.7%

20%

20%

0%

0%
IPO

15 Business Report for Ninth Fiscal Period

1st FP(End of)2nd/3rd FP

4th FP

5th/6th/7th FP

8th/9th FP

2nd/3rd FP

Business Report for Ninth Fiscal Period 16

TOP REIT ASSET MANAGEMENT CO., LTD. :Committed to making TOP REIT a leading J-REIT

Robust Support Key to Stability and Future GrowthA s t h e a s s e t m a n a g e r of Top R EI T, TOP R EI T A s s e tcontributing to achieving the sound growth and development

Top REIT enjoys the robust suppor t of th re e Japane s eof Nippon Steel; and Oji Real Estate (31%), the real estate

M a n a g e m e n t C o., L t d . ( T R A M ) i s c o m m i t t e d t o t h eof the real estate investment trust market and real estatebusiness leaders through TRAM. TRAM is sponsored anddeveloper and planner for the Oji Paper Group. The support

suc c essful management of the Top REIT por tfol io andm a rket , c ont r ibut i ng to t he g row t h of so c iet y a nd t heow ned by Sum itomo Tr ust and Bank ing (38%); Nippon

provided by these sponsors is outlined in the figure below.

t o d e l i v e r i n g o p t i m a l d i v i d e n d s a n d p e r fo r m a n c e t oeconomy, and the formation of a desirable city.

Steel City Produce (31%), the real estate development arm

investors. The management philosophy of the company

The operating philosophy that TRAM follows to achieve

calls for building Top REIT into a “top brand” for investors,

these goals is outlined in the figure below.

TOP REIT

Building an optimal portfolio with high quality properties
Implementing appropriate management

Mitigation of risk through diversified investment

An external growth strategy that applies
the pipeline function of the sponsors

Profitability

Optimal Application of Sponsors' Strengths

Growthpotential

Stability

Pipeline support
agreement

Building andManaging aBlue-chip Portfolio

Fairness

Corporate governancethat thoroughly
emphasizes complianceand risk management

Operating
Structure
Focused on
Investors

Transparency

Information disclosure
Proactive IR
Robust relationships with investors

17 Business Report for Ninth Fiscal Period

Capturing
Trust

Agreement on providing
warehousing support

Sumitomo
Trust & Banking

Financial Strategy
that Effectively
Flexibility
Implements
Financial Know-how

Soundness
Capturinga Top Brand
Position

TOP REIT ASSET MANAGEMENT

Flexible anddynamic
fund-raising

Maintenance of a soundfinancial condition

Nippon SteelCity Produce(Nippon Steel Group)

Oji Real Estate(Oji Paper Group)

Provision ofreal estate
investment
opportunities

Provision of
information
on properties
owned ordeveloped bysponsors or
their groups

Pipeline Function
Sponsors provide information
on available third party andsponsor group properties to
TOP REIT

Originationof structures
for acquiringproperties

Investment
andfinancing of
SPCs

Warehousing Function
Sponsors provide a temporary
ownership function for realestate to TOP REIT, enabling it
to secure blue-chip properties
in advanceReal estate
operation
andmanagementthat utilizes
the expertiseand riskmanagement
capabilities ofthe sponsors

Leasing
activities that
apply theinformationon leasing
demandpossessed bysponsorgroupsManagement Expertise
Sponsors provide value-add
property and othermanagement services

Business Report for Ninth Fiscal Period 18

Unit Price Performance and Volume Table
Unit Price (thousand yen)

Asset Management Overview:

10,000
Trading volume
on the first day

Financial summary

5th FPMay 1, 2008 –Oct. 31, 2008

6th FP
Nov. 1, 2008 –Apr. 30, 2009

7th FPMay 1, 2009 –Oct. 31, 2009

8th FP
Nov. 1, 2009 –Apr. 30, 2010

9th FPMay 1, 2010 –Oct. 31, 2011

mn yen

5,584

5,606

5,608

5,814

6,060

mn yen

5,584

5,606

5,608

5,814

6,060

mn yen

2,933

2,905

2,978

2,964

3,041

mn yen

2,371

2,346

2,429

2,405

2,451

Operating income

mn yen

2,651

2,700

2,630

2,849

3,019

Ordinary income

mn yen

1,994

2,047

1,960

2,091

2,204

Net income

mn yen

1,993

2,046

1,961

2,090

2,204

mn yen173,241

172,850

172,884

186,296

186,459

unit

Market capitalization

31,893 units

800

category

Trading Volume (unit)

1,000¥77,190.0 mn

Historical high¥998,000

Historical low¥208,000(based on closing price)(based on closing price)

Unit Price (based on closing price)
Trading Volume

8,000

as of Nov. 30, 2010

6,000

600
IPO Price (¥550,000)(1) Operating results
Operating revenue(Note 1)

(Of which, rent revenue)
Operating expense(Of which, expenses related to rent business)(2) Asset, etc. (end of period)
Total assets%(-1.1)(-0.2)

(0.0)

(7.8)

(0.1)

Interest-bearing liabilities

mn yen82,00081,74081,74094,24094,172

Net assets

mn yen84,141

84,20884,14084,28984,438

(0.1)

(0.1)

(-0.1)

(0.2)

(0.2)

82,26082,26082,26082,26082,260(Period-on-period variation)(Period-on-period variation)%

Unitholders’ capitalmn yen

400

4,000

200

2,000

0

0
3/1
2006

6/1

mn yen

1,993

2,046

1,961

2,090

2,204

Dividend payout ratio

%

100.0

100.0

100.0

100.0

100.0

unit

155,000

155,000

155,000

155,000

155,000yen

542,846543,280

542,842

543,805

544,768

Dividend per unit

yen

12,863

13,206

12,654

13,484

14,220(Earnings distribution per unit)

yen

12,863

13,206

12,654

13,484

14,220(Distribution in excess of earnings per unit)

yen

-

-

-

-

-

Number of Units outstanding(Note 2)(5) Financial indices(Note 3)%

1.1 (2.3)

1.2 (2.4)

1.1 (2.2)

1.2 (2.3)

1.2 (2.3)

Ratio of net income to unitholders’ equity (Note 3)%

2.4 (4.7)

2.4 (4.9)

2.3 (4.6)

2.5 (5.0)

2.6 (5.2)

48.6

48.7

48.7

45.2

45.3

Ratio of ordinary income to total assets

Ratio of unitholders’ equity to total assets(Period-on-period variation)
LTV
Rental NOI%%(Note 4)

(0.6)

(0.1)

(-0.0)(-3.5)

(0.1)

47.3

47.3

47.3

50.6

50.5

4,360

4,412

4,284

4,535

4,691

12/1 1/4 3/1
2008

6/1

No. of Units Held
1,000
Trading volume
7th Fiscal Period (Total No. of Units: 155,000)
on the first day
Individuals/other800

12/1 1/4 3/1
2010

6/1

9/1 11/30(based on closing price)

400

6,359 (94.4%)

132 (2.0%)
6,000
IPO Price (¥550,000)
8th Fiscal Period (Total No. of Unitholders: 6,879)
Financial institutions (including securities firms)

Other domestic corporations

6,513 (94.7%)
Overseas corporations/individuals

26,656 units (17.2%)

124 (1.8%)

9th Fiscal Period (Total No. of Units: 155,000)
Individuals/other
19,556 口 (12.6%)
6/1

4,000
144 (2.1%)

Individuals/other

Overseas corporations/individuals

3/1
2006

Other domestic
corporations

98 (1.4%)

14,220 units (9.2%)

94,155 units (60.7%)

0

8,000
145 (2.2%)

as of May 31, 2009

Financial institutions(including security firms)

200

Other domestic
corporations

97 (1.4%)

Overseas corporations/individuals

29,374 units (19.0%)

19,969 units (12.9%)

10,000Individuals/other¥208,000(based on closing price)

Individuals/otherTrading Volume (unit)¥998,000

Historical low

Overseas corporations/individuals

600

Financial institutions (including securities firms)

9/1

12/1 1/4 3/1
2008

Other domestic
corporations

105 (1.5%)

13,870 units (9.0%)

Financial institutions(including security firms)
9/1
12/1 1/4 3/1
6/1
100,973 units 2007
(65.1%)
Overseas corporations/individuals

2,000

9th Fiscal Period (Total No. of Unitholders: 6,830)
Other domestic corporations

20,601 units (13.3%)

6/1

9/1

Individuals/other12/1 1/4 3/1
6/1
9/1
12/1 1/4 3/1
6,473 (94.8%)
2009
2010
Overseas corporations/individuals

0
139 (2.0%)
5/31

113 (1.7%)

IR Schedule

14

14

15

15

October

42

42

44

46

283,622.23

283,622.23

283,622.23

291,647.88

291,627.72

November

m2
%

99.5

99.2

99.2

99.2

99.5

Depreciation and amortization at end of period

mn yen

1,147

1,151

1,105

1,127

1,081

Capital expenditure at end of period

mn yen

59

412

97

544

83

Note 1: Operating revenue, etc. do not include consumption taxes.
Note 2: Net assets per unit have been rounded to the nearest yen.
Note 3: The indices above are calculated using the following formulas. In addition, annualized figures derived from the management period are indicated in brackets.
Ratio of ordinary income to total assets = Ordinary income / ((Total assets at beginning of period + Total assets at end of period) / 2) × 100
Ratio of net income to unitholders’ equity = Net income / ((Net assets at beginning of period + Net assets at end of period) / 2) × 100
Note 4: Rental NOI (Net operating income) = Rent revenue – Expenses related to rental business + Depreciation and amortization
Note 5: 	Number of tenants at end of period indicates total number of tenants of each property as of the end of the period. In the case a master lease agreement is concluded, it is counted as 1
tenant. In the case 1 tenant rents multiple units, it is counted as 1 tenant if the units are in the same property and as multiple tenants if the units are in multiple properties.
Note 6: Occupancy rate at end of period = Total leased floor area at end of period / Total leasable floor area at end of period
When a pass-through type master lease agreement has been concluded, the area subleased to the end tenants have been used as the leased floor area.
Note 7: Unless otherwise mentioned in the report, fractions of figures not indicated are rounded off for monetary amounts and rounded for ratios.

9/1

Financial institutions (including securities firms)

13,206 units (8.5%)
Historical high93,805 units (60.5%)44(Note 6)

6/1

7th Fiscal Period (Total No. of Unitholders:
Unit Price6,733)(based on closing price)¥66,650.0 mn
Trading Volume

Market capitalization

Financial institutions(including security firms)

14

Total rentable area at period end

12/1 1/4 3/1
2009

No. of Unitholders

Other domestic corporations

31,893
units
18,615units(12.0%)

case(Note 5)

9/1

Unitholders

case

Number of properties at end of period

Occupancy at end of period

9/1

Top REIT Revises English Web Site

2010(6) Other referential information
Number of tenants at end of period

6/1

8th Fiscal Period (Total No. of Units: 155,000)(4) Per unit information
Net assets per unit

12/1 1/4 3/1
2007

Unit Price (thousand yen)

(3) Cash distributions
Total cash distributions

9/1

http://www.top-reit.co.jp/english

End of Ninth Fiscal Period

Top REIT has completely revised
its website to provide investors with

December Announce performance ofNinth Fiscal Period

up-to-date information on its activities.

2011
January
February

Payment of dividend forNinth Fiscal Period

March
APRIL

End of Tenth Fiscal Period

May
June
July
AugustAnnounce performance ofTenth Fiscal Period
Payment of dividend forTenth Fiscal Period

September

19 Business Report for Ninth Fiscal Period

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20

40

60

80

100

0

20

40

60

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Business Report for Ninth Fiscal Period 20