TSE Code

８９８２

Presentation on Business Results
for the 16th Fiscal Period
November 1, 2013 ～ April 30, 20140

IndexTOPICS. Overview since Listing
I. Overview of Business Results of the 16th FP (Ended April 30, 2014)
and Forecasts

IV. Details of 16th FP Results (Ended April 30, 2014)

I-1.

Highlights of 16th FP

I-2.

Summary of 16th FP

IV-1.

I-3.

Forecasts

IV-2.

Balance Sheets (Summary)

IV-3.

Results of Past Periods and Forecasts (Detail)IV-4.

Major Financial Indicators

IV-5.

Unitholders

IV-6.

Unit Price Performance and Trading Volume (Mar. 1, 2006-May. 31, 2014)

II. Management Results and Future Activities

Statements of Income (Summary)/Statements of Cash Distributions

II-1.

Market Prospects

II-2.

Strategic Policies

II-3.

Portfolio Management

II-4.

External GrowthII-5.

Investment Policy and Acquisition Target

V-1.

Portfolio Map

II-6.

Financial Management

V-2.

Portfolio Summary

V-3.

Portfolio Overview at End of 16th FP

V-4.

Operating Income by Property(16th FP)

V-5.

Property Details

III. Management Results in the 16th FP

V. Appendix: Portfolio Overview

III-1.

History of Occupancy Rate

III-2.

History of Asset GrowthIII-3.

Appraisal Value at End of Period

III-4.

Appraisal Cap Rate

VI-1.

Characteristics of Top REIT and Operational Strategies

III-5.

Issuer Rating and Loans at End of 16th FP

VI-2.

Overview of Asset Manager

VI. Appendix: Structure of Related Parties

1

TOPICS.

Overview since Listing（※）Including third-party allotment

9th FP
Jun. 2010
Issued Investment Corporation Bonds

Mar. 2006 IPO¥82.16bn（※）
Office(billion yen)
250

RetailResidential

Others
50.6%

47.3%

47.4%

200

47.3%

50.5%

LTV

50.5%

50.7%

51.5%

16th FP
Nov. 2013 / Dec. 2013
Issued New Investment Units through PO¥8.88bn（※）
51.4%

51.4%

51.6%

50.0%

47.3%

150

50%

40%
37.1%

100

37.3%
30%

28.0%
50

20%

0
IPO

1st FP

2nd FP

3rd FP

4th FP

5th FP

6th FP

7th FP

8th FP

9th FP 10th FP 11th FP 12th FP 13th FP 14th FP 15th FP 16th FP(yen)
21,000

Number of days in 1st FP:245 days

Dividend for16th FP
10,864円

18,00015,000(Forecast) (Forecast)
9,300
10,60012,000

9,000

6,000

3,000
1st FP
Oct. 2006

2nd FP
Apr. 2007

3rd FP
Oct. 2007

4th FP
Apr. 2008

5th FP
Oct. 2008

6th FP
Apr. 2009

7th FP
Oct. 2009

8th FP
Apr. 2010

9th FP
Oct. 2010

10th FP
Apr. 2011

11th FP
Oct. 2011

12th FP
Apr. 2012

13th FP
Oct. 2012

14th FP
Apr. 2013

15th FP
Oct. 2013

16th FP
Apr. 2014

17th FP
Oct. 2014

18th FP
Apr. 2015(Note) The forecasts are current calculation based on the certain assumption, and actual results may differ from the forecasts due to the change in market environments, etc.

2

I. Overview of Business Results of the 16th FP (Ended April 30, 2014) and Forecasts3I-1. Highlights of 16th FP
Portfolio Management

Property Acquisition

 Concluded lease agreement for Harumi Island
Triton Square Office Tower Y
・2 floors (approx. 1,170 tsubos)
・0.75 floor (approx. 430 tsubos)
・0.5 floor (approx. 296 tsubos)
Occupancy rate expected to recover to
97.9% by February 2015 (0.25 vacant floor)
 Early re-filling of other properties
・Kanda Park Plaza(Occupancy rate recovered 84.5%→90.2%)
・Shinkawa Chuo Building(Maintaining 100% occupancy rate)
・Ginza Oji Building(Full occupancy rate achieved 83.8%→100%)・Maintaining and improving occupancy rate ofresidential properties（Impress Musashi-Koganei and Top Residence
Yoga achieved 100% occupancy rate) Rent revision as planned
・ 34.9%of total rents with average increase of 3.1%
 Kanda Nishiki-cho 3-chome Building
・Received a lease agreement termination
notice from the tenant leasing the entire building
Plan for termination on Jan. 8, 2015

 Acquisition of 3 properties with capitalincreased through public offering(Chuo-ku, Tokyo)
・Ginza Oji Building(Shinjuku-ku, Tokyo)
・Shinjuku EAST Building
・Kojima×Bic Camera Kashiwa Store(Kashiwa-shi, Chiba)

Occupancy Rate for Harumi Island Triton
Square Office Tower Y

Change in Portfolio（％）

2 office
properties＋
1 retail property

87.5

・ Procured approx. ¥8.9 bn through capital increase・ New short-term borrowings of ¥4.5 bn
concurrently with the capital increase Refinancing borrowings
・ Short-term borrowings of ¥4.5bn→ Long-term borrowings (5 years)
Fixed interest rate via interest-rate swap agreement・ ¥4 bn with upcoming maturity dates→ Long-term borrowings of 4 years and 9 months
Concluded agreement for borrowings with
fixed interest rate Expansion of lenders
・ Newly started transactions with Aozora Bank LTV・ End of 15th FP 51.6%→ End of 16th FP 50.0%(1.6 point improvement)

Maturity dates of borrowings※Scheduled repayment of 67.5 million yen
each period from 16th FP to 21th FP

93.6

15th FP

16th FP

Number of Properties

19

22

Acquisition Price

185.55bn

197.85bn

Tokyo Metropolitan
Area

74.8%

74.1%

80
66.7

68.9

70.8

62.5

60

0.25 floor
vacant49.9
41.8
7 floors
vacated20

 Fund procurement

97.9

100

40

FinanceApr. 2013
Oct. 2013
Apr. 2014
Oct. 2014
14th FP
15th FP
16th FP
17th FP(Forecast)Jan. 2013
Jul. 2013
Jan. 2014
Jul. 2014
Feb. 2015(Forecast)(Forecast)NOI Yield(after depreciation)

Long-term
Bond

（mil）
25,0006,700

20,0003,075
15,0007,000

19,04010,000NOI Yield

Short-term

4.1%

4.3%
3.0%

4,000

8,500
4,500 4,000

-

1,230
2,355

5,000

2.9%

17,50016,7004,670

3,000 1,822

4,500

16th FP 17th FP 18th FP 19th FP 20th FP 21th FP 22th FP 23th FP 24th FP 25th FP 26th FP
2014/4

2014/10

2015/4

2015/10

2016/4

2016/102017/42017/10

2018/42018/10

2019/44

I-2. Summary of 16th FP
16th FP Results
November 1, 2013 April 30,2014
181

Items
Number of days in each FP

15th FP Results(Announced on
December 19,, 2013)
184

-3

-

16th FP Forecast(Announced on
December 19, 2013)
181

Net Change(16th Results vs. 15th Results)

Net Change(Results vs. Forecast)--

Operating revenue¥5,637mil¥5,154mil¥483mil

9.4%¥5,586mil¥50mil0.9%

Operating expenses¥3,108mil¥2,981mil¥126mil

4.3%¥3,120mil(¥11mil)(0.4%)¥580mil¥581mil(¥0mil)(0.1%)¥580mil

¥0mil

0.0%

Expenses related to rent business(Taxes and dues)(Repair expenses)¥99mil¥75mil¥24mil31.8%¥100mil(¥0mil)(0.7%)(Depreciation and amortization)¥1,193mil¥1,115mil¥77nil6.9%¥1,200mil(¥6mil)(0.6%)(Other)¥1,235mil¥1,209mil¥26mil2.2%¥1,239mil(¥3mil)(0.3%)¥2,528mil¥2,172mil¥356mil

16.4%¥2,466mil¥62mil

2.5%

¥1mil

¥11mil(¥9mil)(84.0%)

¥0mil

¥1mil

372.8%

Operating income
Non-operating income
Non-operating expenses¥617mil¥603mil¥13mil2.3%¥626mil(¥8mil)(1.4%)

Ordinary income¥1,913mil¥1,580mil¥332mil

21.0%¥1,840mil¥72mil4.0%

Net income¥1,913mil¥1,579mil¥334mil

21.2%¥1,839mil¥74mil4.1%

Number of units issued and outstanding(unit)

176,000

155,000

21,00013.5%

176,000--

Dividend per unit

¥10,864¥10,191

¥673

6.6%

¥10,450

¥414

4.0%

Capital expenditures¥511mil¥176mil¥334mil

189.2%¥520mil(¥9mil)(1.8%)

Operating Revenue¥483mil

Operating Revenue¥50milIncrease in rent revenue due to new acquisition of 3 properties
Increase in income from rent/common service fees due to improved occupancy rate

Revenue equivalent to expenses for restoring to original condition due to a tenant
moving out

Operating Income(Operating revenue with operating
expenses reflected (－126 million yen))

Increase in income due to key money, renewal fees and penalty fees for leasetermination at the time of tenant change for residential properties¥356mil

Increase in property management expenses due to new acquisition of 3 properties
Increase in depreciation and amortization due to new acquisition of 3 properties
Increase in repair expenses

Ordinary Income(Operating income with non-operating
income/expenses reflected (－23 million yen))¥332mil

Increase in interest expenses and loan-related fees (expenses)※Increase due to new borrowings and decrease due to low basic interest rate

Operating Income(Operating revenue with operating
expenses reflected (＋11million yen))¥62milDecrease in depreciation and amortization

Ordinary Income(Operating income with non-operating
income/expenses reflected ＋10 million yen))¥72milDecrease in interest expenses (expenses) due to low basic interest rate (TIBOR)

Increase in issuance amortization (expenses) due to issuance of new investment
units

5

I-3. Forecast*The forecast figures are calculated under certain preconditions as of the date of this material andare subject to change. Moreover, the dividend is not guaranteed.

Preconditions for Forecast
17th FP (Ending October, 2014)

18th FP (Ending April, 2015)

Preconditioned on 22 properties held by Top REIT as of June 16, 2014

Portfolio Assets
Number of Units Issued andOutstanding

176,000 units

Interest-Bearing Liabilities

As of end of 17th FP: ¥100,362 million
・Refinanced a long-term loan-payable of ¥4,000 million into long-term loan-payable（Loanagreement has already been concluded.）・Anticipated repayment of ¥67 million as agreed upon

As of end of 18th FP: ¥100,295 million
・Anticipated repayment of ¥67 million as agreed upon

Rent Revisions

For the 5.7% of total rents scheduled for rent revision, assuming in certain level of fluctuations in
rent.

For the 21.1% of total rents scheduled for rent revision, assuming in certain level of fluctuations in
rent.
・For Kanda Nishiki-cho 3-chome Building, it is assumed it will remain vacant after the termination.

Operating Expenses

It is assumed that property tax, etc. will be ¥638 million and depreciation and amortization will be¥1,203 million

It is assumed that property tax, etc. will be ¥638 million and depreciation and amortization will be¥1,216 million

Non-Operating Expenses¥621 million
Interest on loans, interest expenses on investment corporation bonds and related expenses: ¥610
millionAmortization of investment unit issuance expenses: ¥6 million¥617 million
Interest on loans, interest expenses on investment corporation bonds and related expenses: ¥607
millionAmortization of investment unit issuance expenses: ¥6 million

It is assumed that there is no reversal of internal reserves.

Dividend

7,000

3,000

(mil)

(mil)

12,000
(yen)

6,000

5,000

5,637

5,758

5,154

2,000

2,172

2,528

10,000

2,483

2,253

5,454
1,000

3,000
16th FP
Apr. 2014

17th FP
Oct. 2014(Forecast)

9,300

4,000
15th FP
Oct. 2013

16th FP
Apr. 2014

17th FP
Oct. 2014(Forecast)

4,000

3000

(mil)

(mil)

2,981

10,6006,000

018th FP
Apr. 2015(Forecast)

3,000

10,864

8,000

4,000

15th FP
Oct. 201310,191

3,108

3,275

3,200

15th FP
Oct. 2013

18th FP
Apr. 2015(Forecast)

16th FP
Apr. 2014

17th FP
Oct. 2014(Forecast)

18th FP
Apr. 2015(Forecast)

2000

2,000

1,913

1,866

16th FP
Apr. 2014

17th FP
Oct. 2014(Forecast)

1,580

1,637

1000
1,000

0
15th FP
Oct. 2013

16th FP
Apr. 2014

17th FP
Oct. 2014(Forecast)

18th FP
Apr. 2015(Forecast)0
15th FP
Oct. 2013

18th FP
Apr. 2015(Forecast)6

I-3. Forecast
16th FP Results
Nov. 1, 2013 Apr. 30,2014
(A)

Items
Number of days in each FP

17th FP Results(Forecast)
May 1, 2014 Oct. 31, 2014
(B)

18th FP
Results(Forecast)
Nov. 1, 2014 Apr. 30, 2015(C)

Net Change(16th Results vs. 17th Forecast)(B)-(A)Net Change(17th Forecast vs. 18th Forecast)(C)-(B)

181

184

3

-

181

(3)

-

Operating revenue¥5,637mil¥5,758mil¥121mil

2.2%¥5,454mil(¥303mil)(5.3%)

Operating expenses¥3,108mil¥3,275mil¥166mil

5.4%¥3,200mil(¥74mil)(2.3%)¥580mil¥638mil¥57mil10.0%¥638mil

¥0mil

0.0%

Expenses related to rent business(Taxes and dues)(Repair expenses)¥99mil¥133mil¥33mil33.7%¥118mil(¥14mil)(11.2%)(Depreciation and amortization)¥1,193mil¥1,203mil¥10mil0.8%¥1,216mil¥12mil1.1%(Other)¥1,235mil¥1,300mil¥65mil5.3%¥1,228mil(¥72mil)(5.6%)¥2,528mil¥2,483mil(¥45mil)(1.8%)¥2,253mil(¥229mil)(9.2%)(78.9%)

Operating income
Non-operating income

¥1mil

¥4mil

¥2mil

150.8%¥1mil(¥3mil)Non-operating expenses¥617mil¥621mil

¥3mil

0.6%

¥617mil(¥4mil)(0.7%)

Ordinary income¥1,913mil¥1,866mil(¥46mil)(2.4%)¥1,637mil(¥228mil)(12.3%)Net income¥1,913mil¥1,865mil(¥48mil)(2.5%)¥1,636mil(¥228mil)(12.3%)

Number of units issued and outstanding(unit)

176,000

176,000--

176,000--

Dividend per unit

¥10,864¥10,600(¥264)(2.4%)¥9,300(¥1,300)(12.3%)

Capital expenditures¥511mil¥141mil(¥369mil)(72.4%)¥614mil¥473mil+335.1%

Operating Revenue¥121mil

Operating Revenue(¥303mil)Increase in rent revenue from full year contribution due to the newly acquired 3
properties

Decrease in income from rent/common service fees with assumption of
decreased occupancy rate and fluctuation due to rent revision

Increase in income from rent/common service fees due to improved occupancyrate, upward rent revision, etc.

Decrease in utilities income

Increase in utilities income

Operating Income(Operating revenue with operating
expenses reflected (＋166 million yen))(¥45mil)

Taxes and dues for the newly acquired 3 properties recorded as expenses
Increase in utilities expenses

Operating Income(Operating revenue with operating
expenses reflected (－74 million yen))(¥229mil)Decrease in property management expenses with assumption of decreased
occupancy rate
Decrease in utilities expenses
Decrease in repair expenses

Increase in repair expenses

7II. Management Results and Future Activities8II-1. Market Prospects
Real Estate
Leasing Market

Real EstateTransaction Market

Financial/
Capital Market

 Vacancy rate is on the improving trend due
to refrained new supply As for office buildings, availability is scarce
despite existence of numerous buyers withrobust appetites such as REITs

 Lending attitude of financial institutions
continues to be strong, and with low
interest rates, debt financing environment isfavorable Office rent shows sign of bottoming out,
even turning up for some properties Business results of retail industry are within
expectations as backlash after the
consumption tax hike being minor.
Individual’s consumer sentiment remains
strong Studio and family residences with highconvenience in major cities maintain steady
performance due to inflow of population to
major cities and increase of divided
households

 Office rents are expected to bottom out due
to improved business results, but it is likely
to take time before full recovery
 Rents for retail properties are likely to differ
depending on the property characteristics
as consumers become more selective inpurchase method, leading to competitions
with online retailers
 Residential properties particularly in theTokyo Metropolitan Area, and also in thethree major metropolitan areas and cities
designated by government ordinance, willremain strong

 Prime properties well-located in Central
Tokyo are flooded with buyers, thus
decrease in cap rate and rise in purchaseprices are notable Trend to overheat is observed also in
residential properties, retail properties andland with leasehold interest, etc.

 Since large increase in availability cannot
be expected for all property types, prices ofhigh-grade properties are likely to remainhigh Due to expansion of investment target
areas and property types by buyers,competition for acquiring properties otherthan office buildings or in regional areas is
expected to intensify further (continuous
decline in cap rate) Fund inflow of individual investors to JREITs via investment trust is strong
 REIT Index remains stable in narrow range.
Fund procurement appetite through equity
by REITs, including IPO, is robust Short-term interest rates are expected toremain low due to continuous monetaryeasing by BOJ
 Though long-term interest rates are likely toalso remain low for some time, careful,ongoing attention should be paid to risinginterest rates
 J-REIT market is expected to become
more active, due to J-REITs gaining
credibility through organization of themarket, GPIF’s decision to invest in JREITs, etc.
 Favorable financing environment is
expected to continue going forward9II-2. Strategic Policies
Asset Management Strategy

Asset Acquisition Strategy

 Asset Management Policy Asset Acquisition Policy

 Kanda Nishiki-cho 3-chome Building
Conduct leasing activities to attract successor
tenants at early stages
 Improve occupancy rate of office buildings(Harumi Y, Shiba-Koen, Kanda Park) Financial Policy Secure investment opportunities in a flexible
manner while primarily focusing on office buildings
and continue making selective investments inhigh-grade properties

 For the time being, operate with approx. 50%
LTV(ratio of interest-bearing liabilities to total
assets) and with a little less than 50% ratio ofloans with fixed interest rate (present: 46.5%)

 For office buildings, focus on prime locations inCentral Tokyo and other major cities When acquiring properties, conduct capitalincrease through public offering, etc.
systematically with consideration to the market
trend.

 For retail properties, sufficiently verify
characteristics of individual assets

 Negotiate with major tenants subject to rent
revision and lease contract renewal planned in the
18th FP

Financial Strategy

 For residential properties, carefully consider
acquisitions as the transaction market shows
trends of overheating(Harumi Y, Harumi Z, IY Higashi-Narashino) Continue to conduct cost management such as forrepair expenses

 Replacement of properties that contribute to theenhancement of portfolio profitability should beconsidered Continue to implement measures to enhance
asset value and tenant satisfaction

 Consider the possibility of inviting new sponsors
and M&As with REITs【 Ensuring Stable Revenue and Steady Growth of Portfolio Over Medium to Long Term 】
(bn)
350

Further Growth

OfficeRetailResidential

Others300

Next Stage
Asset Size： ¥210.0bn
LTV：around 50%

250
200
150
100
50
0
IPO

5th FP

10th FP

15th FP

16th FP

2006/3

2008/10

2011/42013/10

2014/410

II-3. Portfolio Management
16th FP Results- Harumi Island Triton Square Office Tower Y
7 vacant floors• Progressed to 0.75 vacant floor
Occupancy rate at 93.6% (July 2014)• With conclusion of lease contract for 0.5
floor during 17th FP, occupancy rate is
expected to recover to 97.9% in Feb.,
2015, leaving 0.25 floor vacant

Floor
15
14
13
12
11
10
9
8

Leasing situation for each floor: Contract concluded in 14th FP (Conclusion based occupancy rate 62.5%): Contract concluded in 15th FP (Conclusion based occupancy rate 70.8%): Contract concluded in 16th FP (Conclusion based occupancy rate 93.6%): Contract concluded in 17th FP (Conclusion based occupancy rate 97.9%)
Vacant part under negotiation*Top REIT owns 3rd -15th floors in this property.

Vacant14th floor is a cafeteria space for tenants’ employees, therefore not includedin leasable area.

【 “Hanamasa” store in Shinkawa Chuo Building 】- Shinkawa Chuo Building -【 Representative “Hanamasa” store 】

1st floor (9.2% of the entire building)• Attracted Hanamasa by changing theasset class to retail• By filling the floor without vacantperiod, occupancy rate remains at
100%*1 tenant planned for move-out on Oct. 1(Occupancy rate at 97.6%)

Realized store appearance that is highly recognizable as a food supermarket
while retaining the high-grade quality of the building

Receipt of Notice of Lease Contract Termination for Kanda Nishiki-cho 3-chome Building

Name of tenant

Tenant leasing the entire building (Name not disclosed as the tenant’s consent has
not been obtained)

Leased floor space

8,025.65㎡ (Office 7,718.75㎡(2,335 tsubos) / Warehouse 306.90㎡(92 tsubos)*Ratio to the entire portfolio is 2.4%

Floors2 basement floors and 9 floors above ground

Lease termination date

January 8, 2015 (18th FP)

11

II-3. Portfolio Management

Large-scale redevelopment centering on Kanda Keisatu-dori Street

Kanda Nishiki-cho
3-chome Building

Rare office environment harmonizing a bustling town and nature
Office(Approx. 334m2)(Approx.100tsubo)

Office(Approx. 663m2)(Approx.200tsubo))

Standard Floor Plan

Regular rectangle shaped column-free space.
Responds to various use with flexible layouts.

Redevelopment area
 Redevelopment of area near former Hakuhodo
main building (to be completed in March, 2015)

Jinbocho Sta. Exit 4 min. walk・Tokyo Metro Hanzomon Line・ Toei Shinjuku Line / Toei Mita Line Redevelopment of area near former site of Tokyo
Denki University

Reorganization plans of roadside areas
 Reorganization plans progressing under theconcept of “Creating a town full of life”

Takebashi Sta. Exit 3 min. walk・ Tokyo Metro Tozai Line

Superiority of Kanda Nishiki-cho 3-chome Building
Location

 High transportation convenience with 8 stations of 8 lines including JR available within walking distance Situated in highly matured office area adjacent to the central business district, Otemachi and Marunouchi area
 Area with high anticipation for further bustles and convenience due to having an excellent natural environment withthe greenery surrounding the Imperial Palace and ongoing large-scale redevelopment projects and reorganization
plans

Building

 Approx. 300 tsubos of standard floor area and regular rectangle shaped column-free space responds to various use
with flexible layouts
 With a large-scale renovation undertaken in Nov. 2001, the level of facilities satisfies recent tenant needs. Ceilingheight of 2,600mm, office automation floors throughout (80mm) / floor load of 300kg/㎡ / Individually controllable air
conditioning Along with the large-scale renovation, construction work to improve the appearance was undertaken, as well as an
entrance hall using marble to give a grand impression
 Earthquake-proof reinforcement construction work was undertaken in October 2009 in compliance with the newearthquake resistant standards
 BCP Measures(Dedicated emergency power generators and oil tanks can be installed)

Otemachi Sta. Exit 7 min.
・Tokyo Metro Marunouchi Line/ Chiyoda Line/ Hanzomon Line/ Tozai Line・Toei Mita Line【 Leasing policy and activities status 】
Taking advantage of the superiority of the property and location, conduct leasing activities for successor tenants
Prioritize seeking needs to lease entire building while also considering possibility of leasing to multiple tenants12II-3. Portfolio Management

Monthly rent before
revision

Revised monthly
rent

(mil)
350

【NEC Head Office Building】

300

Up to Dec. 2017
Fixed rent

250

Up to Dec. 2017
Early termination is prohibited

16th FP Results
Rent revision results ＝Increase in monthly rentMonthly rent before revision(%)＋3.1 %

200
150

Future Activities

100
50
0
13th FP
Oct. 2012

14th FP
Apr. 2013

15th FP
Oct. 2013

16th FP
Apr. 2014

17th FP
18th FP
19th FP
Oct. 2014 Apr. 2015 Oct. 2015
(Forecast) (Forecast) (Forecast)

(mil)
150

Future Activities※ Based on monthly rent including common service fee(End of 16th FP)

125

Akasasa Oji Building(some tenants)

40

Shiba-Koen Building(some tenants)

30

Shinkawa Chuo Building(some tenants)

Harumi Island Triton Y(some tenants)
Harumi Island Triton Z

17th

20

FP

Kanda Park Plaza(some tenants)

10

Ginza Oji Building(some tenants)

0

Faret East Building(some tenants)

May. Jun. Jul. Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr.
2014 2014 2014 2014 2014 2014 2014 2014 2015 2015 2015 2015
17th FP

18th FP

Akasaka Oji Building(some tenants)

17
tenants

MEL Building(some tenants)

Shinjuku EAST Building(some tenants)

18th
FP

5.7％ oftotal rents

Shiba-Koen Building(some tenants)

15
tenants

Shinkawa Chuo Building(some tenants)
Ginza Oji Building(some tenants)
Faret East Building(some tenants)

21.1％ oftotal rents

Ito-Yokado Higashi-Narashino Store
MEL Building(some tenants)13II-4. External Growth
16th FP Results

Promotion of Growth
Strategy“Maintaining and improving dividend level through pursuing both
quality and investment return of assets under management”

High-grade multi-tenants office buildings in Central Tokyo with excellent transportation
convenience, location and advanced specifications, and ensure investment returns

Ginza Oji Building

(bn)

250
200

Additional
acquisition of¥12.3 bn

150

Promotion of Tenant Diversification
2.2％

OfficeRetail100

Kojima × Bic Camera Kashiwa Store

Shinjuku EAST Building

Expansion of Asset Size

Retail facility, located in a trading zone with alarge residential population, and occupied bytenants boasting high potential and a strong
ability to attract customers

3.4％
3.7％

5.2％

38.4％

49.0％
31.6％

Residential

4.6％
4.7％

24.8％

50

other

0

15th FP

16th FP

Oct. 2013

Apr. 2014

4.1％

34.4％

22.2％

4.2％
6.3％

End of 1st FP

End of 15th FP

End of 16th FP

Top 5 tenants 91.3%

Top 5 tenants 76.2%

Top 5 tenants 71.2%

14

II-5. Investment Policy and Acquisition Target
Establish a “Diversified Portfolio” with large office buildings in Central Tokyo as its core
～Pursue stability and growth potential of profitability by utilizing characteristic of diversified assets～～ Pursue both external growth and quality of assets under management～

Three Major Asset Types
OfficeRetailResidential

Rent rise expected during strong economy

Rise in rent and stable revenue are expected

Stable revenue expected regardless of
economic conditions••

Tokyo, the Tokyo Metropolitan Area
Other major cities(Sapporo, Sendai, Nagoya, Osaka, Fukuoka, etc.)
 Located in areas with high level of traffic
convenience High-quality specifications(*investigate properties for acquisition, eventhough they are rather old, as long as they havespecifications comparable with those of newer
buildings, or properties that are well managed andadministrated)•

Three major metropolitan areas and other major
cities• Urban retail properties• Mall-type and roadside retail properties• land with leasehold Stability and growth potential of the trade zone
itself Located in areas where ample demand isanticipated Verify characteristics of individual asset sufficiently

•
•





Tokyo, the Tokyo Metropolitan Area
Other major cities(Sapporo, Sendai, Nagoya, Osaka, Fukuoka, etc.)
Residences for singles targeting office workers
and families
High level of traffic convenience (proximity torailway stations)
Located in areas where ample demand isanticipated
Built relatively recently【Secure investment opportunities in a flexible manner taking into account the market environment, while placing emphasis on office buildings】【 Selective investment upon verifying characteristics of each property by taking advantage of diversified portfolio management】【 Considering property replacement that contributes to the reinforcement of earnings power 】
Ginza Oji Building

Shinkawa Chuo
Building

Kojima × Bic Camera
Kashiwa Store

MEL Building

Top Residence
Nihonbashi Kayabacho

Impress
Musashi-Koganei

Hard-to-find location as
being situated in Ginza
4-chomeStrong tenant needs andexcellent convenience totransportation

Abundant population in its
trading zone and tenant’s
strong ability to attract
customers

High potential ascommercial land

Steady demand
from businesspersons

Excellent convenience totransportation, superior
convenience for daily life15

II-6. Financial Management
Lender Formation
While maintaining bank formation centering on Sumitomo Mitsui Trust
Bank, the main sponsor, and other major banks, expand lenders by newly
starting transactions with Aozora Bank

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

Short-Term

LTV

1,500

1.5

Mizuho Bank, Ltd.

17,244

17.2

The Bank of Fukuoka,
Ltd.

3,200

3.2

Sumitomo Mitsui Banking
Corporation

14,20314.1 The Hiroshima Bank, Ltd.

1,000

1.0

40

The Bank of Tokyo
Mitsubishi UFJ, Ltd.

12,803

12.7

1,000

1.0

30

Mitsubishi UFJ Trust andBanking Corporation

4,340

4.3 Aozora Bank, Ltd.

500

0.5

Development Bank of Japan,
Inc.

5,515

5.5

8,500

8.5

Dai-Ichi Life Insurance Co.,
Ltd.

1,000

1.0 Total¥100,430

100.0

60

47.4 47.3 47.3 47.3 50.6 50.5 50.5 50.7 51.5 51.4 51.4 51.6 50.0
50

6.7

27.8 28.0

6.7

10.3 9.3 13.2 13.2

60

2.5

30

20.9

33.4 33.4 33.4
0

IPO

1st FP

54.4

2nd FP 3rd FP

72.7 72.7 68.4 68.4

4th FP

5th FP

6th FP

7th FP

87.5 87.4 94.1 94.0 96.9 96.9 96.0 95.9

100.4 2010

8th FP

9th FP 10th FP 11th FP 12th FP 13th FP 14th FP 15th FP 16th FP

The Yamaguchi Bank,
Ltd.

Investment Corporation
Bond

Issuer Rating

0

Rating and Investment Information, Inc. (R&I)

Ratio of Loans with Fixed Interest Rates

share
（％）

29.5 Resona Bank, Limited.

150

90

Balance（mil yen）

Lender29,625(%)

37.1 37.3

share
（％）

Sumitomo Mitsui Trust Bank,
Limited.

(bn)

120

Balance（mil yen）

LenderLong-Term

A＋(Stable)Average Remaining Period of
Borrowings and Average Interest Rate

floating
fixed（years）

100%
80%

47.4

49.0

49.1

55.9

56.0

53.5

60%

With current market interest rates
remaining low, reduce interest costsby reaping benefits from maintaining
the ratio of fixed rate loans ataround 50%

4

3

1.42

20%
0%

52.6

11th FP

51.0

12th FP

50.9

13th FPIn the meantime, extend remaining
borrowing periods

44.1

14th FP

44.0

15th FP

46.5

16th FP

Conduct financing after considering
costs

1

Interest Rate

2 years &6 months
3 years

2 years &10 months

1.25
1 year &10 months

2.0%

3 years &4 months

2 years &7 months

2

40%

Remaining Period

1.6%

1.2%

1.08
0.93

0.92

0.91

14th FP

15th FP

16th FP

0

0.8%

0.4%

11th FP

12th FP

13th FP

16

III. Management Results in the 16th FP

17

III-1. History of Occupancy Rate

Gross rentable floor space
(㎡)

99.8

99.9

99.5

99.7

99.5

99.5

Occupancy rate
99.2

99.2

99.2

99.5

99.7

400,000

97.3

98.5

(%)

99.2
94.5

96.7

96.9

96.8

96.9

98.2

98.3

98.1

98.3

100

350,000

90

300,00080

250,000

70

200,000

60

150,000

Mar. 2006
IPO

Oct. 2006
Apr. 2007
Oct. 2007
Apr. 2008
Oct. 2008
Apr. 2009
Oct. 2009
Apr. 2010
Oct. 2010
Apr. 2011
Oct. 2011
Apr. 2012
Oct. 2012
Apr. 2013
Oct. 2013
End of 1st FP End of 2nd FP End of 3rd FP End of 4th FP End of 5th FP End of 6th FP End of 7th FP End of 8th FP End of 9th FP End of 10th FP End of 11th FP End of 12th FP End of 13th FP End of 14th FP End of 15th FP

Occupied floor space
(㎡)

99.7

99.8

100.0 100.0 100.0

99.6

Nov. 2013

Jan. 2014

Feb. 2014

Mar. 2014

96.9

96.9

Apr. 2014
End of 16th FP

May. 2014

96.8

97.0

50

Occupancy rate
99.0

99.1

99.4

99.6

99.8
95.0

98.0

(%)

99.0
93.9

94.2

89.1

180,000

Dec. 2013

93.9

94.4

100
90

150,000

80

120,000

70

90,00060

60,000Mar. 2006
IPO

Oct. 2006
Apr. 2007
Oct. 2007
Apr. 2008
Oct. 2008
Apr. 2009
Oct. 2009
Apr. 2010
Oct. 2010
Apr. 2011
Oct. 2011
Apr. 2012
Oct. 2012
Apr. 2013
Oct. 2013
End of 1st FP End of 2nd FP End of 3rd FP End of 4th FP End of 5th FP End of 6th FP End of 7th FP End of 8th FP End of 9th FP End of 10th FP End of 11th FP End of 12th FP End of 13th FP End of 14th FP End of 15th FP

Nov. 2013

Dec. 2013

Jan. 2014

Feb. 2014

Mar. 2014

Apr. 2014
End of 16th FP

May. 2014

50

18

III-1. History of Occupancy Rate(㎡)

Occupied floor space
94.6

93.6

(%)

Occupancy rate

35,000
93.9

95.1

93.3

30,000

95.7

95.0

96.4
93.8

95.0

94.3

93.8

94.4

92.4

95.1

95.4

94.6

95.8

90

92.7
89.5

100

88.7

25,00080
20,00070
15,00060

10,0005,000

Apr. 2007
End of 2nd FP

Oct. 2007
End of 3rd FP

Apr. 2008
End of 4th FP

Oct. 2008
End of 5th FP

Fukasawa(%)

Apr. 2009
End of 6th FP

Oct. 2009
End of 7th FP

ToyosuApr. 2010
End of 8th FP

Oct. 2010
Apr. 2011
Oct. 2011
Apr. 2012
Oct. 2012
Apr. 2013
Oct. 2013
End of 9th FP End of 10th FP End of 11th FP End of 12th FP End of 13th FP End of 14th FP End of 15th FP

Musashi-Koganei

Yoga

Nov. 2013

Dec. 2013

Jan. 2014

Mar. 2014

Apr. 2014
End of 16th FP

100.0

100.0

97.8

97.4

96.5

97.1
96.2

May. 201450

Nihonbashi Kayabacho

100
98.4

97.8

96.5
95

94.4

96.3
95.0

94.4

94.5
93.8 93.8
90.7

93.3

98.5
96.2
95.5

94.9
92.1
91.3

90

85

Feb. 2014

91.9

92.4

97.5
95.5
94.6

92.9
92.1

90.2

Apr. 2007
End of 2nd FP

Oct. 2007
End of 3rd FP

Apr. 2008
End of 4th FP

Oct. 2008
End of 5th FP

Apr. 2009
End of 6th FP

Oct. 2009
End of 7th FP

Apr. 2010
End of 8th FP

Oct. 2010
Apr. 2011
Oct. 2011
Apr. 2012
Oct. 2012
Apr. 2013
Oct. 2013
End of 9th FP End of 10th FP End of 11th FP End of 12th FP End of 13th FP End of 14th FP End of 15th FP

Nov. 2013

Dec. 2013

Jan. 2014

Feb. 2014

Mar. 2014

Apr. 2014
End of 16th FP

May. 201419

III-2. History of Asset Growth
Left index :Acquisition price

Right index :Appraisal value

Unrealized profit/ loss = (Appraisal value – Book value)(billion yen)(billion yen)

220

30
25

200

20

180

15
10

160

5

140

0
(5)

120
100

(10)
1st FP

2nd FP

3rd FP

4th FP

5th FP

6th FP

7th FP

8th FP

9th FP

10th FP 11th FP 12th FP 13th FP 14th FP 15th FP 16th FP(15)(billion yen)

End of
1st FP
Oct. 2006

End of
2nd FP
April. 2007

End of
3rd FP
Oct. 2007

End of
4th FP
April. 2008

End of
5th FP
Oct. 2008

End of
6th FP
April. 2009

End of
7th FP
Oct. 2009

End of
8th FP
April. 2010

End of
9th FP
Oct. 2010

End of10th FP
April. 2011

End of11th FP
Oct. 2011

End of12th FP
April. 2012

End of13th FP
Oct. 2012

End of14th FP
April. 2013

End of15th FP
Oct. 2013

End of16th FP
April. 2014

Acquisition price¥113.286¥130.846¥130.846¥157.187¥162.347¥162.347¥162.347¥175.047¥175.047¥175.047¥177.435¥184.345¥184.345¥185.555¥185.555¥197.855Book value¥116.187¥133.576¥132.698¥159.585¥163.985¥163.245¥162.237¥174.618¥173.618¥172.994¥174.742¥181.405¥180.446¥181.003¥180.064¥192.015

Appraisal value¥127.442¥152.468¥155.923¥188.035¥189.441¥170.870¥164.948¥177.146¥175.351¥170.670¥172.440¥179.000¥173.800¥172.360¥170.470¥179.800

Unrealized
profits and loses¥11.254¥18.891¥23.224¥28.449¥25.455¥7.624¥2.710¥2.527¥1.732(¥2.324)(¥2.302)(¥2.405)(¥6.646)(¥8.643)(¥9.594)(¥12.214)* Details of acquisition price and appraisal value are provided on P21 to P22.
* Figures less than one million yen have been rounded down for the above-mentioned values. As for unrealized profits and loses, figures less than one million yen have been rounded down after
deducting book value (total) from appraisal value (total).

20

III-3. Appraisal Value at End of Period（million yen）
Asset
Class

Area

CentralTokyo
OfficeTokyo
Metropolitan Area

Tokyo
Metropolitan Area
RetailOther
major cities
CentralTokyo

Residential

Other

Tokyo
Metropolitan Area

CentralTokyo

Property

Acquisition
Price

Book Value at Appraisal Value Appraisal Value
End of 16th FP at End of 13th at End of 14th
(A)
FP
FP

Appraisal Value
Appraisal Valueat End of 15that End of 16thFP
FP (Ｃ）(B)

Difference
BetweenAppraisal Valueand Book Value（C）－（A）

Difference in Appraisal
Value from End of 15thFP(C) – (B)NEC Head Office Building

41,95042,76949,45049,50050,10051,900

9,130

1,800

Harumi Island Triton Square Office Tower Y

33,00030,155

32,10030,80029,50027,200(2,955)(2,300)

Harumi Island Triton Square Office Tower Z

20,00019,34814,30012,60012,60012,300(7,048)(300)

Kanda Nishiki-cho 3-chome Building

12,70012,655

14,10014,10014,20010,500(2,155)(3,700)Akasaka Oji Building

9,660

9,755

7,990

8,060

8,540

8,850

(905)

310

Shinjuku East Building

5,800

5,832

-

-

-

6,250

417

-

Shiba-Koen Building

5,770

5,830

3,420

3,470

3,540

3,410

(2,420)(130)

Shinkawa Chuo Building

5,610

5,773

5,790

5,780

5,790

5,990

216

200

Kanda Park Plaza

5,156

5,058

4,900

4,910

4,910

5,000

(58)

90

Ginza Oji Building

2,000

2,080

-

-

-

2,050

(30)

-

Faret East Building

2,091

1,635

2,390

2,410

2,450

2,530

894

80

Subtotal

143,737

140,895

134,440

131,630

131,630

135,980(4,915)(3,950)

Sagamihara Shopping Center

12,000

11,231

10,40010,500

8,330

8,480

(2,751)150

Ito-Yokado Higashi-Narashino Store

8,900

7,755

5,610

5,620

5,620

5,400

(2,355)(220)

Kojima × Bic Camera Kashiwa Store

4,500

4,641

-

-

-

4,730

88

-

Musashiurawa Shopping Center

4,335

3,816

3,860

3,880

3,880

3,870

53

(10)

MEL Building

1,210

1,219

-

1,260

1,280

1,280

60

-

Subtotal

30,94528,664

19,87021,26019,11023,760(4,904)(80)

Top Residence
Nihonbashi Kayabacho

2,400

2,376

2,580

2,580

2,580

2,640

263

60

Fukasawa House Towers H&I

10,635

10,058

7,060

7,030

7,120

7,230

(2,828)110

Ecology Toyosu Procentury

5,160

4,897

4,970

4,980

5,080

5,100

202

20

Impress Musashi-Koganei

1,223

1,237

1,270

1,260

1,270

1,280

42

10

Top Residence Yoga

1,165

1,193

1,160

1,170

1,180

1,200

6

20

Subtotal

20,583

19,763

17,04017,02017,23017,450(2,313)220

OAK PLAZA

2,590

2,692

2,450

2,450

2,500

2,610

(82)

110

Subtotal

2,590

2,692

2,450

2,450

2,500

2,610

(82)

110

197,855

192,014173,800

172,360

170,470

179,800(12,214)(3,700)Total(Note) Total of the Difference in Appraisal Value from End of 15th FP (C) – (B) above, excludes “Shinjuku EAST Building,” “Ginza Oji Building” and “Kojima × Bic Camera Kashiwa Store,“ which were acquired during the 16th FP (as of November 28, 2013).

21

III-4. Appraisal Cap Rate
12th Fiscal Period
Property

DirectCapitalization
Method:Cap Rate

13th Fiscal Period
DirectCapitalization
Method:Cap Rate

Discounted Cash Flow
MethodDiscount
Rate

Terminal
Cap Rate

NEC Head Office Building

3.7%(Next 1 year)
3.9%
4.2%
(2-5 years)
4.2%(afterward)

Harumi Island Triton Square
Office Tower Y

4.6%

Harumi Island Triton Square
Office Tower Z

14th Fiscal Period

Discounted Cash Flow
MethodDiscount
Rate

Terminal
Cap Rate

DirectCapitalization
Method:Cap Rate

15th Fiscal Period

Terminal
Cap Rate

DirectCapitalization
Method:Cap Rate

4.5%

4.2%

Discounted Cash Flow
MethodDiscount
Rate

16th Fiscal Period

Terminal
Cap Rate

DirectCapitalization
Method:Cap Rate

3.7%(Next 4 years)
4.2%(afterward)

4.4%

4.1%

3.6%
(Next 4 years)
4.1%(afterward)

4.3%

Discounted Cash Flow
MethodDiscount
Rate

Discounted Cash Flow
MethodDiscount
Rate

Terminal
Cap Rate

4.5%

3.7%
(Next 1 year)
3.9%
4.2%
(2-5 years)
4.2%(afterward)

4.5%

3.7%
(Next 1 year)
3.9%
4.2%
(2-5 years)
4.2%(afterward)

4.3%

4.8%

4.8%

4.3%

4.8%

4.8%

4.3%

4.8%

4.7%

4.3%

4.8%

4.6%

4.2%

4.7%

4.6%

4.3%

4.8%

4.6%

4.3%

4.8%

4.8%

4.3%

4.8%

4.8%

4.3%

4.8%

4.7%

4.2%

4.7%

Kanda Nishiki-cho 3-chome
Building

4.9%

4.6%

5.1%

4.9%

4.6%

5.1%

4.9%

4.6%

5.1%

4.8%

4.5%

5.0%

4.6%

4.3%

4.8%

Akasaka Oji Building

4.5%

4.4%

4.7%

4.5%

4.4%

4.7%

4.4%

4.3%

4.6%

4.3%

4.1%

4.4%

4.2%

4.0%

4.3%

-

-

-

-

-

-

-

-

-

-

-

-

4.9%

4.7%

5.1%

Shiba-Koen Building

4.8%

4.6%

5.0%

4.8%

4.6%

5.0%

4.9%

4.6%

5.0%

4.8%

4.5%

4.9%

4.7%

4.4%

4.8%

Shinkawa Chuo Building

4.9%

4.7%

5.1%

4.9%

4.7%

5.1%

4.9%

4.7%

5.1%

4.8%

4.6%

5.0%

4.7%

4.5%

4.9%

Kanda Park Plaza

5.2%

4.7%

5.5%

5.2%

4.7%

5.5%

5.2%

4.7%

5.5%

5.1%

4.6%

5.4%

4.9%

4.5%

5.1%

Shinjuku East Building

Ginza Oji Building

-

-

-

-

-

-

-

-

-

-

-

-

4.4%

4.2%

4.6%

Faret East Building

5.7%

5.4%

5.9%

5.7%

5.4%

5.9%

5.7%

5.4%

5.9%

5.6%

5.3%

5.8%

5.5%

5.2%

5.7%

Sagamihara Shopping Center

5.9%

5.7%

6.1%

5.9%

5.7%

6.1%

5.9%

5.7%

6.1%

5.6%

5.4%

5.8%

5.5%

5.3%

5.7%

6.3%

6.1%

6.6%

6.3%

6.1%

6.6%

6.3%

6.1%

6.6%

6.3%

6.1%

6.6%

6.3%

6.1%

6.6%

-

-

-

-

-

-

-

-

-

-

-

-

5.7%

5.4%

5.9%

5.7%

5.4%

6.0%

5.7%

5.4%

6.0%

5.7%

5.4%

6.0%

5.7%

5.4%

6.0%

5.6%

5.3%

5.9%

Ito-Yokado Higashi-NarashinoStore
Kojima × Biｃ Camera
Kashiwa Store
Musashiurawa Shopping
SquareMEL Building

-

-

-

-

-

-

6.2%

6.2%

6.6%

6.1%

6.1%

6.5%

6.1%

6.1%

6.5%

Top Residence Nihonbashi
Kayabacho

5.1%

4.9%

5.3%

5.0%

4.8%

5.2%

5.0%

4.8%

5.2%

5.0%

4.8%

5.2%

4.9%

4.7%

5.1%

Fukasawa House Towers H&I

5.0%

4.7%

5.2%

4.9%

4.6%

5.1%

4.9%

4.6%

5.1%

4.8%

4.5%

5.0%

4.7%

4.4%

4.9%

Ecology Toyosu Procentury

5.2%

5.0%

5.4%

5.1%

4.9%

5.3%

5.1%

4.9%

5.3%

5.0%

4.8%

5.2%

4.9%

4.7%

5.1%

Impress Musashi-Koganei

5.5%

5.3%

5.7%

5.5%

5.3%

5.7%

5.5%

5.3%

5.7%

5.4%

5.2%

5.6%

5.3%

5.1%

5.5%

Top Residence Yoga

5.0%

4.8%

5.2%

5.0%

4.8%

5.2%

5.0%

4.8%

5.2%

4.9%

4.7%

5.1%

4.8%

4.6%

5.0%

OAK PLAZA

5.1%

4.9%

5.4%

5.1%

4.9%

5.4%

5.1%

4.9%

5.4%

5.0%

4.8%

5.3%

4.8%

4.6%

5.1%

• The appraisals were conducted by the above real estate appraisers based on the asset assessment methods and standards specified in TOP REIT’s
articles of incorporation as well as the regulations set forth by The Investment Trust Association, Japan.

22III-5. Issuer Rating and Loans at End of 16th FP
Issuer Rating
Cate
gory

LenderCurrent Portion of Long-Term Loans

Development Bank of Japan

Balance¥135milA＋(Stable)Interest Rate
(Apr 30, 2013)

Execution
Date

Repayment
Date

Remaining
Period2.42%<fixed>Jan. 13,2010

Nov. 30,
2016

Scheduled Unsecured andrepayment unguaranteed

Sumitomo Mitsui Trust Bank

¥2,000mil

2.27%<fixed>Development Bank of Japan¥1,000mil

2.40%<fixed>Dai-Ichi Life Insurance¥1,000mil

2.40%<fixed>Jun. 29,
2007

Jun. 30,
2014¥4,000mil

2 months

2.34%<Average>¥7,000mil

0.63%<floating>

2 months<Average>
Sep. 30,2015

1 year &5 months

Unsecured andunguaranteed¥3,075mil

0.63%<floating>Mar. 27,2013

Sep. 30,2015

1 year &5 months

Unsecured andunguaranteed¥16,700mil

1.39%<fixed>Mar. 3,2011

Feb. 29,2016

1 year & Unsecured and
10 months unguaranteed

Long-Term Loans¥6,700mil

0.71%<floating>Mar. 31,2011

Feb. 29,2016

Remaining
PeriodNote¥19,040mil

0.53%<floating>Nov. 30,
2011

Nov. 30,2016

2 years &7 months

Unsecured andunguaranteed

Jun. 29,2012

Jun. 30,2017

3 years &2 months

Unsecured andunguaranteed

Mar. 27,2013

Mar. 27,2018

3 years &11 months

Unsecured andunguaranteed

0.75%<floating>Apr. 30,
2013

Apr. 30,2018

4 years

Unsecured andunguaranteed

0.82%<fixed>Mar. 31,2014

Mar. 29,2019

4 years &11 months

Unsecured andunguaranteed¥9,000mil

0.63%<floating>¥8,500mil

0.79%<fixed>¥4,670mil

0.75%<floating>

Development Bank of Japan¥2,355mil

1.08%<fixed>¥3,000mil¥2,025mil

Sumitomo Mitsui Trust Bank
Mizuho Bank
Sumitomo Mitsui Banking
Corporation
The Bank of Fukuoka
Aozora Bank

Mar. 30,
2012

Oct. 31,2016

2 years &6 months

Unsecured andunguaranteed

2.42%<fixed>Jan. 13,2010

Nov. 30,2016

2 years &6 months¥4,500mil¥4,500mil¥87,795mil

0.84%<Average>

2 years &7 months<Average>¥91,930mil

0.91%<Average>

2 years &6 months<Average>No 1 Unsecured Investment
Corporation Bonds¥8,500mil

1.00%<fixed>Total Interest bearing
liabilities¥100,430mil

0.92%<Average>

subtotal

0.63%<floating>¥1,230mil¥1,230mil

1 year & Unsecured and
10 months unguaranteed¥3,000mil
Development Bank of Japan

Repayment
Date¥7,025mil¥6,700mil
Sumitomo Mitsui Trust Bank
Mizuho Bank
Sumitomo Mitsui Banking
Corporation
The Bank of Tokyo
Mitsubishi UFJ
Mitsubishi UFJ Trust andBanking

Execution
Date

Sumitomo Mitsui Trust Bank
Mizuho Bank
Sumitomo Mitsui Banking
Corporation
The Bank of Tokyo
Mitsubishi UFJ

Sumitomo Mitsui Trust Bank
Resona Bank

¥16,700mil
Sumitomo Mitsui Trust Bank
The Bank of Fukuoka
The Hiroshima BankThe Yamaguchi BankInterest Rate
(Apr 30, 2013)¥17,500mil
Nov. 30,
2012¥3,075mil
Sumitomo Mitsui Trust Bank
Mizuho Bank
Sumitomo Mitsui Banking
Corporation
The Bank of Tokyo
Mitsubishi UFJ
Mitsubishi UFJ Trust andBanking

Balance¥19,040mil
Sumitomo Mitsui Trust Bank
Mizuho Bank
Sumitomo Mitsui Banking
Corporation
The Bank of Tokyo
Mitsubishi UFJ
Mitsubishi UFJ Trust andBanking

2 months¥4,135mil

LenderSumitomo Mitsui Trust Bank
Mizuho Bank
Sumitomo Mitsui Banking
Corporation
The Bank of Tokyo
Mitsubishi UFJ
Mitsubishi UFJ Trust andBanking

Unsecured andunguaranteed¥7,000mil
Mizuho Bank
Mitsubishi UFJ Trust andBankingCategoryLong-Term Loans

Sumitomo Mitsui Trust Bank
Sumitomo Mitsui Banking
Corporation
The Bank of Tokyo
Mitsubishi UFJ
Resona BankNote

5 months<Average>¥135milsubtotal

Rating and Investment Information, Inc. (R&I)

Total Loans

Unsecured andunguaranteed¥2,025mil

Note1 : Interest rates are rounded to the second decimal place, and the remaining periods are rounded to a whole number. The averages for interest rates
and remaining periods are weighted averages based on the balance at the end of fiscal period.
Note2 :On November 28, 2013, Top REIT has borrowed ¥4,500mn with maturity date of April 30, 2014.

Jun. 4,2010

Jun. 4,2015

1 year &1 monthUnsecured andunguaranteed

2 years &5 months<Average>23

IV. Details of 16th FP Results (Ended April 30, 2014)24

IV-1. Statements of Income (Summary) / Statements of Cash Distributions■ Statements of Income
Account■ Statements of Cash Distributions
15th FPMay 1, 2013 October 31, 2013(184 days)

16th FP
November 1, 2013 April 30, 2014
(181 days)

AmountAmountAccount

Operating revenue¥5,154mil¥5,637mil

Rent revenue - real estate¥5,125mil¥5,590mil¥28mil¥47milOther lease business revenue¥1,912mil

-

¥1mil

¥0mil

¥0mil

¥3,108mil¥2,622mil

Voluntary retained earnings¥8mil

Administrative service fees

¥64mil¥66milDirectors' compensations

¥6mil

¥6mil

Audit fee

¥10mil¥10milOther operating expenses¥46mil¥38mil¥2,172mil¥2,528mil¥11mil¥1mil

Interest income

¥0mil

¥0mil

Reversal of dividends payable

¥0mil

¥1mil

Insurance income¥10mil

¥0mil

Other

¥0mil

-

Non-operating expenses¥603mil¥617milInterest expenses¥406mil¥408milInterest expense on investment corporation bonds¥42mil¥42milAmortization of investment corporation bond issuance costs

¥5mil

¥5mil

¥143mil¥150mil-¥6mil

Operating income
Non-operating income

Borrowing related expenses
Amortization of investment unit issuance costs

¥4mil

¥4mil

Ordinary income

Other¥1,580mil¥1,913mil

Income before income taxes¥1,580mil¥1,913mil

Income taxes - current

¥0mil

¥0mil

Income taxes - deferred(¥0mil)(¥1mil)Net income¥1,579mil¥1,913mil

Unappropriated retained earnings¥1,579mil¥1,913mil¥1,913mil<¥10,864>¥2,438mil¥354mil¥1,579mil¥1,579mil¥2,981mil¥8mil

Amount<¥10,191>

Expenses related to rent business¥406milAmountTotal dividend amountOperating expenses

Asset custody fee

16th FP
November 1, 2013 April 30, 2014
(181 days)

Unappropriatedretained earnings<Dividend per unit>

Asset management fee

15th FPMay 1, 2013 October 31, 2013(184 days)

Retained earnings
carried forward【Expenses related to rent business】
 Depreciation and amortization：¥1,193mil

 Property management expenses ：¥452mil Utilities expenses¥248mil：and others25IV-2. Balance Sheets (Summary)
Account

15th FP(as of October 31, 2013)

16th FP(as of April 30, 2014)

AmountAmountCash and deposits
Cash and deposits in trust¥5,281mil¥903mil¥8,009mil¥3,049mil¥3,939mil¥4,273mil-¥137mil¥438mil¥548milII. Total noncurrent assets¥180,869mil¥192,746mil

1. Total property, plant andequipment¥180,063mil¥192,005mil

Consumption taxes receivable
Other

Buildings, etc.
Land

15th FP(as of October 31, 2013)

16th FP(as of April 30, 2014)

AmountAmountLiabilities

Assets
I. Total current assets

Account¥955mil¥942mil¥4,888mil¥4,888mil

Buildings, etc. in trust¥48,531mil¥51,426mil

Land in trust¥125,686mil¥134,748mil

2. Total intangible assets

¥1mil

¥9mil

Intangible assets

I. Total current liabilities¥5,413mil¥5,622mil¥136mil¥296mil--Current portion of long-termloans payable¥4,135mil¥4,135mil

Accounts payable － other¥239mil¥252mil

Accrued expenses¥131mil¥131mil

Accrued consumption taxes¥61mil-Advances received¥705mil¥795mil

Operating accounts payable
Short-term loans payable

Derivative liabilities
Other
II. Total noncurrent liabilities

-

-

¥3mil

¥10mil¥96,884mil¥102,098mil

Investment Corporation Bond

¥8,500mil¥8,500mil

Long-term loans payable¥83,362mil¥87,795mil

Tenant leasehold and security
deposits¥101mil¥101mil¥4,873mil¥5,649mil

¥1mil

¥9mil

3. Total investment andother assets¥804mil¥731milLease and guarantee deposits¥10mil¥10milTenant leasehold and security
deposits in trust

Long-term prepaid expenses¥562mil¥492milDeferred tax liabilities¥19mil¥13mil¥231mil¥229mil

Derivative liabilities¥27mil¥38mil¥18mil¥46milOther
III. Total deferred assets
Investment corporation bondissuance costs
Investment unit issuance
expenses
Total assets¥18mil¥12mil-¥33mil¥186,169mil¥200,802mil

Other noncurrent liabilities

¥0mil

¥0mil

¥102,297mil¥107,720mil

I. Total unitholders’ equity¥83,889mil¥93,107mil

1.Unitholders’ capital¥82,260mil¥91,143mil

2.Surplus¥1,629mil¥1,963mil¥49mil¥49mil

¥1,579mil¥1,913mil(¥18mil)(¥25mil)

Total liabilities
Net assets

Reserve for reduction entry
Unappropriatedretained earnings
II. Total valuation and translation
adjustments(¥18mil)(¥25mil)

Total net assets

Deferred gains or losses on hedge¥83,871mil¥93,081mil

Total liabilities and net assets¥186,169mil¥200,802mil

26

IV-3. Results of Past Periods and Forecasts (Detail)Item

11th Fiscal
Period(Actual)12th Fiscal
Period(Actual)13th Fiscal
Period(Actual)14th Fiscal
Period(Actual)15th Fiscal
Period(Actual)16th Fiscal
Period(Actual)17th Fiscal
Period(Forecast)

18th Fiscal
Period(Forecast)

184

182

184

181

184

181

184

181

Operating revenue¥5,812mil¥5,693mil¥5,636mil¥5,844mil¥5,154mil¥5,637mil¥5,758mil¥5,454mil

Rent revenue-real estate¥5,661mil¥5,420mil¥5,605mil¥5,370mil¥5,125mil¥5,590mil¥5,735mil¥5,434mil¥5,304mil¥5,097mil¥5,268mil¥5,107mil¥4,824mil¥5,255mil¥5,389mil¥5,115mil¥357mil¥322mil¥336mil¥262mil¥300mil¥334mil¥345mil¥318mil¥150mil¥17mil¥30mil¥474mil¥28mil¥47mil¥23mil¥20milOperating expenses¥3,033mil¥2,921mil¥2,939mil¥3,397mil¥2,981mil¥3,108mil¥3,275mil¥3,200mil

Expenses related to rent business（excluding depreciation and amortization）
Expenses related to rent business(Business consignment expenses)¥1,418mil¥1,310mil¥1,267mil¥1,726mil¥1,322mil¥1,429mil¥1,563mil¥1,494mil

Period of asset management (days)

Rental revenue
Other lease revenue
Other lease business revenue¥389mil¥398mil¥392mil¥400mil¥388mil¥452mil¥441mil¥428mil〃(Utilities expenses)¥208mil¥189mil¥230mil¥207mil¥244mil¥248mil¥298mil¥260mil〃(Taxes and dues)¥609mil¥608mil¥565mil¥564mil¥581mil¥580mil¥638mil¥638mil〃(Repair expenses)¥175mil¥80mil¥46mil¥522mil¥75mil¥99mil¥133mil¥118mil〃(sundry expenses)¥35mil¥34mil¥32mil¥32mil¥33mil¥48mil¥52mil¥50mil¥4,393mil¥4,126mil¥4,368mil¥4,117mil¥3,831mil¥4,207mil¥4,195mil¥3,959mil¥1,060mil¥1,072mil¥1,116mil¥1,121mil¥1,115mil¥1,193mil¥1,203mil¥1,216mil¥3,332mil¥3,310mil¥3,251mil¥2,996mil¥2,715mil¥3,014mil¥2,991mil¥2,743mil¥553mil¥538mil¥554mil¥548mil¥542mil¥485mil¥508mil¥489mil

Asset management fee¥424mil¥409mil¥430mil¥416mil¥406mil¥354mil¥364mil¥349mil

Other fees

¥88mil¥87mil¥88mil¥89mil¥89mil¥92mil¥93mil¥93milOther operating expenses¥40mil¥41mil¥36mil¥42mil¥46mil¥38mil¥50mil¥46mil¥2,779mil¥2,772mil¥2,697mil¥2,447mil¥2,172mil¥2,528mil¥2,483mil¥2,253mil

Net operating income from property leasing
depreciation and amortization
Operating income from property leasing
General and administrative expenses

Operating income
Non-operating income

¥8mil

¥4mil

¥3mil

¥3mil

¥11mil

¥1mil

¥4mil

¥1mil

Non-operating expenses¥801mil¥747mil¥697mil¥627mil¥603mil¥617mil¥621mil¥617milInterest expenses , borrowing related expenses¥749mil¥694mil¥645mil¥574mil¥550mil¥559mil¥562mil¥559milInterest expense on investment corporation bonds ,amortization of investment corporation bond issuance costs¥48mil¥47mil¥48mil¥47mil¥48mil¥47mil¥48mil¥47mil
¥6mil

-

-

-

-

-

¥6mil

¥6mil

¥3mil

¥5mil

¥4mil

¥5mil

¥4mil

¥4mil

¥4mil

¥3mil

Ordinary income¥1,986mil¥2,029mil¥2,002mil¥1,823mil¥1,580mil¥1,913mil¥1,866mil¥1,637mil

Income before income taxes¥1,637mil

Amortization of investment unit issuance costs
Other¥1,986mil¥2,029mil¥2,002mil¥1,823mil¥1,580mil¥1,913mil¥1,866mil

Income taxes¥1mil¥29mil

¥0mil

¥0mil

¥0mil

(¥0mil)

¥1mil

¥1mil

Net income¥1,985mil¥1,999mil¥2,001mil¥1,822mil¥1,579mil¥1,913mil¥1,865mil¥1,636mil

Number of units issued and outstanding (units)

155,000

155,000

155,000

155,000

155,000

176,000

176,000

176,000

Dividend per unit

¥12,809¥12,577¥12,912¥11,759¥10,191¥10,864¥10,600¥9,300¥3,046mil¥2,815mil¥3,117mil¥2,944mil¥2,695mil¥3,107mil¥3,069mil¥2,853mil¥19,654¥18,165¥20,113¥18,996¥17,390¥17,655¥17,438¥16,211FFO
FFO per unit

Note1: Net operating income from property leasing of 12th Fiscal Period does not include capital gains by disposition of property.
Note2: The above forecast figures are calculated under certain preconditions as of the date of this material and are subject to change. The forecasts should not be construed as a guarantee of the actual dividends

27

IV-4. Major Financial Indicators
14th Fiscal Period
November 1, 2012 –April 30, 2013

Item

Period of asset management

15th Fiscal Period
May 1, 2013 –October 31, 2013

16th Fiscal Period
November 1, 2013 –April 30, 2014

Remark181days184days

51.4%

51.6%

¥4,117mil¥3,831mil

4.4%

4.1%

¥2,944mil¥2,695mil¥18,996¥17,390

1.0%

0.8%

1.0% Total assets at end of period) / 2)

Annualized[2.0%][1.7%][2.0%]

Ratio of net income to unitholders'equity (return on equity (ROE))

2.2%

1.9%

2.2% assets at end of period) / 2)

Annualized[4.4%][3.7%][4.4%]

4.7%

4.5%

4.8% end of period (Total liabilities at end of period – Total

Ratio of interest-bearing liabilities tototal assets at end of period (LTV)
Rental NOI(Net operating income)Rental NOI yield
Funds from Operation (FFO)
FFO per unit

Ratio of ordinary income to total
assets (return on assets (ROA))

181daysInterest-bearing liabilities at end of period / Total assets at

50.0% end of period

Rent revenue – Expenses related to rent business +¥4,207mil Depreciation and amortization

Rental NOI x 2 / Sum total of the acquisition price of all

4.3% properties in the portfolio at end of period¥3,107mil Net income + Depreciation and amortization
FFO / Number of units issued and outstanding at end of¥17,655 period

Ordinary income / ((Total assets at beginning of period +Net income / ((Net assets at beginning of period + Net

NOI / ( Market capitalization at end of period +Net Debt at

Implied Cap Rate
NAV multiple
Ratio of unitholders' equity to total
assets at the end of period

1.07

0.95

45.0%

45.1%

current assets at end of period))
Market capitalization at end of period / (Net assets at end of
0.97 period + (Appraisal value at end of period – Book value at
end of period))

46.4% Net assets at end of period / Total assets at end of period28

IV-5. Unitholders
Composition of Unitholders (as of the end of 16th FP)
Category

Number of Units Held

Individuals / other
Financial institutions(incl. securities firms)
Other domestic
corporations
Overseas corporations /individuals

16.1%

8,747

95.5%

116,647

66.3%

108

1.2%

7.1%

175

18,458

10.5%

133

1.5%

176,000

100.0%

9,163

100.0%

15th FP
Total number ofunitholders:7,5901 Japan Trustee Service Bank (trust account)

48,101

27.3

2 The Master Trust Bank of Japan (trust account)

13,521

7.7

3 Trust and Custody Services Bank (securities investment trust account)

10,5836.0

4 Nomura Trust and Banking (investment trust account)

6,950

3.9

Rank

Component
Ratio (%)

14th FP
Total number ofunits issued andoutstanding:155,000

5 THE FUJI FIRE AND MARINE INSURANCE COMPANY,LIMITED

3,465

2.0

3,176

1.8

7 Oji Real Estate Co., Ltd.

3,162

1.8

7 NIPPON STEEL KOWA REAL ESTATE CO.,LTD.

3,162

1.8 units issued and9 MetLife Alico Life Insurance K.K GA Company JPY

2,075

1.2

10 The Asahi Fire & Marine Insurance Co., Ltd.

2,010

1.1

11 NOMURA BANK （LUXEMBOURG） S.A.

1,800

1.0

12 The Iyo Bank, Ltd.

1,500

0.9

1,424

0.8

14 The Gibraltar Life insurance Co., Ltd (general accounts J-REIT account)

1,393

0.8

15 The Minami Nippon Bank, Ltd.

1,270

0.7

103,59258.9

108 [1.2%]
175 [1.9%]
133 [1.5%]

Individuals / other 8,747[95.5%]

20%

40%

60%

80%

100%

Number of Units Held by Category (as of the end of each periods)

6 Sumitomo Mitsui Trust Bank, Limited

13 STATE STREET BANK-WEST PENSION FUND CLIENTS-EXEMPT

93 [1.2%]
150 [2.0%]
130 [1.7%]

Individuals / other 7,217[95.1%]

Financial institutions (incl. securities firms):
Other domestic corporations:
Overseas corporations / individuals:0%

98 [1.2%]
151 [1.9%]
113 [1.4%]

Individuals / other 7,510[95.4%]
Financial institutions (incl. securities firms):
Other domestic corporations:
Overseas corporations / individuals:

16th FP
Total number ofunitholders:9,163

Number ofUnits Held

Name

14th FP
Total numberof unitholders:7,872

1.9%

Major Unitholders (as of the end of 16th FP)

Total

Financial institutions (incl. securities firms):
Other domestic corporations:
Overseas corporations / individuals:

Number of Unitholders

28,351

12,544

Total

Number of Unitholders by Category (as of the end of each periods)

15th FP
Total number ofoutstanding:155,000

16th FP
Total number ofunits issued andoutstanding:176,000

0%

Other domestic corporations:
12,250 [7.9%]
Overseas
corporations /Financial institutions (incl. securities firms):
individuals:
101,431 [65.4%]
17,023 [11.0%]

Individuals / other:
24,296 [15.7%]

Other domestic corporations:
12,143[7.8%]
Individuals / other:Overseas
23,164 [14.9%]
corporations /Financial institutions (incl. securities firms):
individuals:
104,319 [67.3%]
15,374[9.9%]
Other domestic corporations
12,544[7.1%]
Overseas
corporations /Financial institutions (incl. securities firms):
individuals:
116,647[66.3%]
18,458[10.5%]

Individuals / other:
28,351[16.1%]

20%

40%

60%

80%

100%

(Note) Ratios on this page are rounded to the first decimal place.

29

IV-6. Unit Price Performance and Trading Volume （Mar. 1, 2006 – May. 30, 2014）
TOP REIT Trading Volume(yen)

TSE REIT Index

TOPIX

TOP REIT(unit)

1,000,000

10,00016th FP

17th FP

900,000
8,000
800,000

700,000

6,000

600,000
4,000

500,000

400,000
2,000
300,000

200,000

0
Mar.
2006

Oct.
2006

Apr.
2007

Oct.
2007

16th Fiscal Period End
Unit Price(closing price)

Apr.
2008

Oct.
2008

Apr.
2009

¥443,500(April 30, 2014)

Oct.
2009

Apr.
2010

Oct.
2010

Apr.
2011

Oct.
2011

Apr.
2012

Oct.
2012

Apr.
2013

Oct.
2013

IPO Price¥550,000

Mar. 1, 2006

2ndPO Price¥438,750

Nov. 26, 2013

Historical High since IPO(closing price)¥998,000Feb. 16, 2007

Historical Low since IPO(closing price)¥208,000

Oct. 28, 2008

Apr.
2014

30

V. Appendix：Portfolio Overview

31V-1. Portfolio Map
Tokyo Metropolitan Area
Musashiurawa
Shopping Square
Impress
Musashi-Koganei

NEC Head Office Building

Faret East Building
Top Residence
Yoga
Ginza Oji Building
Fukasawa House Towers H&I

Kojima×Bic Camera
Kashiwa Store

Fukasawa House
Towers H&I
Ito-Yokado
Higashi-Narashino Store

Sagamihara
Shopping Center

Harumi Island Triton Square

Sagamihara Shopping Center

Office Tower Y&Z

Central Tokyo

Kanda Nishiki-cho
3-chome Building

Sinjuku EAST Building
Shinjuku Sta.

Yotsuya
Sta.

Shibuya-ku

Akihabara Sta.

Iidabashi Sta.OAK PLAZA

Kanda Sta.
Kanda Park Plaza
Chiyoda-ku
Tokyo Sta. Top Residence
Nihonbashi Kayabacho

Minato-ku

Shinkawa Chuo Building

Ginza Oji Building

Akasaka Oji
Building

Chuo-ku
Shinbashi Sta.

Shibuya Sta.
NEC Head
Office Building

Shiba-Koen
Building

Ecology Toyosu
Procentury
Harumi Island
Triton Square
Office Tower Y & Z

MEL Building(Sendai-shi, Miyagi Pref.)Shinagawa-ku
Shinagawa Sta.

32

V-2. Portfolio Summary
Total Acquisition Price ：¥197.855 bn

Number of Properties ：22

Gross Rentable Floor Area ：331,677.14 ㎡
PML

Asset Class (property type)
100%
11.5%
80%

1.6%
6.8%

2.0%
8.1%

16.1%

19.3%

1.6%
9.7%
15.5%

Area

1.5%

1.5%

1.4%

1.4%

1.3%

9.0%

9.0%

11.2%

11.1%

10.4%

14.4%

14.4%

13.7%

2.7%

：

14.3%

15.6%

Other
Residential
Retail

60%

100%

0.8%
13.0%
28.6%

80%

0.7%

0.7%

0.6%

0.6%

0.0%

24.2%

26.6%

24.6%

24.6%

24.7%

0.7%

0.6%

24.5%

25.3%

Cities

40%

75.5%

70.6%

73.1%

75.1%

75.1%

73.7%

73.3%

Metropolitan
Central

40%

72.6%

Kansai Area
Tokyo

60%

Office88.5%

Other Major

Tokyo

86.0%
70.6%

75.1%

72.8%

74.7%

74.7%

75.3%

74.8%

74.1%

4th FP

6th FP

8th FP

10th FP

12th FP

14th FP

16th FP[ ]：20%[40.2%] [32.1%][25.8%] [25.8%][24.0%][23.6%][22.8%] [22.6%] [21.2%]

Share of20%

NEC Head
Office Building
0%

0%
IPO

2nd FP

4th FP

6th FP

8th FP

10th FP

12th FP

14th FP

IPO

16th FP

Asset size (based on total floor space)
100%

80%

6.0%

11.5%

26.8%

9.2%

60%

40%

6.8%

9.3%

22.7%
7.6%

12.2%

11.3%

11.3%

Age of Buildings
Less than

15.87%

16.3%

16.3%

7.4%

27.6%

6.9%

27.60%

6.86%

26.21%

49,999㎡
26.04%

29.63%

6.47%

6.07%

4.9%

49.4%

60.4%

58.5%

54.2%

54.24%

20%

51.17%

47.99%IPO

2nd FP

4th FP

6th FP

8th FP

10th FP

12th FP

14th FP

16th FP

45.3%

45.6%

37.5%

17.1%

20%

25.2%

33.7%

6.8%

17.1%

17.1%

0.0%

0.0%

39.3%

41.8%

2.5%

0.0%
10th FP

32.6%

31.6%

0%
Mar. 2006 Apr. 2007 Apr. 2008 Apr. 2009 Apr. 2010 Apr. 2011 Apr. 2012 Apr. 2013 Apr. 201441.2%

10-14 years

49.9%

5-9 years

years

11.4%

0%

15-20 years

41.2%

37.2%

14.6%

0.0%
51.51%

20 years more

10.7%

Less than 5

100,000㎡
40%

57.3%

40.3%

4.9%

At the announce date of 16th FP earnings：19.7 years

60%

or more
71.8%

5.9%

80%

50,00099,999㎡

6.51%

100%

10,000㎡
10,000-21.9%

2nd FP

Mar. 2006 Apr. 2007 Apr. 2008 Apr. 2009 Apr. 2010 Apr. 2011 Apr. 2012 Apr. 2013 Apr. 2014

Mar. 2006 Apr. 2007 Apr. 2008 Apr. 2009 Apr. 2010 Apr. 2011 Apr. 2012 Apr. 2013 Apr. 2014

IPO

2nd FP

9.5%

12.4%

4th FP

6th FP

8th FP

5.6%

12.5%

12.4%

28.8%

28.6%

32.0%

12.2%

12.8%

12.6%

1.3%

0.7%
14th FP

16th FP

12th FPMar. 2006 Apr. 2007 Apr. 2008 Apr. 2009 Apr. 2010 Apr. 2011 Apr. 2012 Apr. 2013 Apr. 2014

(Note) In the above graphs, percentage figures are calculated based on acquisition price and the average is a weighted average based on acquisition price.

33

V-3. Portfolio Overview at End of 16th FP
Asset
Class

Area

AcquisitionPrice(mm yen)Portfolio
Share
(%)

Jan. 1990

41,950

21.2

100.0

1

1.4

23,170.40

Oct. 2001

33,000

16.7

87.5

7

1.2

267,132.67

10,914.20

Oct. 2001

20,000

10.1

100.0

1(Note2)

1.5

Jan 13,2010

12,169.78

8,025.65

Mar.1973

12,700

6.4

100.0

1

7.0

Minato-ku, Tokyo

Mar 1, 2006

10,063.05

7,301.15

Apr. 1989

9,660

4.9

100.0

6

6.4

Shinjuku EAST Building

Shinjuku-ku, Tokyo

Nov 28, 2013

10704.44

7,523.04

Oct. 2002

5,800

2.9

99.4

4

6.4

Shiba-Koen Building

Minato-ku, Tokyo

Mar 19, 2008

4,958.29

3,060.43 May. 1991

5,770

2.9

62.4

2(Note3)

9.7

Shinkawa Chuo Building

Chuo-ku, Tokyo

Mar 30, 2012

7,981.27

6,032.24

Jul. 1987

5,610

2.8

100.0

1(Note2)

7.0

Kanda Park Plaza

Chiyoda-ku, Tokyo

Mar 1, 2006

5,511.83

4,537.66 Nov. 1959

5,156

2.6

90.2

9

14.1

Ginza Oji Building

Chuo-ku, Tokyo

Nov 28, 2013

3,251.03

Jan. 1991

2,000

1.0

83.8

2(Note3)

4.9

Faret East Building

Tachikawa-shi,Tokyo

Mar 1, 2006

16,206.34

5,850.23 Dec. 1994

2,091

1.1

100.0

1(Note2)

2.8－
Aug. 1993
etc.

143,737

72.6

96.8

35

12,000

6.1

100.0

2

3.6

Property
NEC Head Office Building
Harumi Island Triton Square
Office Tower Y
Harumi Island Triton Square
Office Tower Z
Kanda Nishiki-cho 3-chome
Building

Central Tokyo Akasaka Oji Building
OfficeTokyo Met.
Area

Acquisition
Date

Total Floor
Space (m2)Minato-ku, Tokyo

Mar 3, 2006

144,476.05

72,238.03

Chuo-ku, Tokyo

Mar 1, 2006

267,132.67

Chuo-ku, Tokyo

Mar 27, 2008

Chiyoda-ku, Tokyo

Subtotal （11 Properties）

Retail

61,763.28

Jun 30, 2006

45,338.37

51,098.42

Oct. 1994

8,900

4.5

100.0

1

7.7

Kashiwa-shi, Chiba

Nov 28, 2013

20,437.36

20,437.36 Sep. 2000

4,500

2.3

100.0

1

5.3

Saitama-shi,
Saitama

Mar 19, 2007

28,930.36

14,960.69

Oct. 2005

4,335

2.2

100.0

3

8.5

Sendai-shi, Miyagi

Apr 30, 2013

1,756.32

1,580.70

Jan. 1980

1,210

0.6

100.0

1(Note2)

3.8

149,840.45－

30,945

15.6

100.0

8

Chuo-ku, Tokyo

Feb 1, 2012

4,540.70

3,455.68 Feb. 2004

2,400

1.2

96.2

1(Note2)

6.6

Setagaya-ku,
Tokyo

Dec 8, 2006

12,135.36

11,357.44

10,6355.4

92.9

1(Note2)

1.6

Ecology Toyosu Procentury

Koto-ku, Tokyo

May 30, 2008

9,630.96

6,789.03

Jan. 2005

5,160

2.6

96.2

1(Note2)

10.6

Impress Musashi-Koganei

Koganei-shi, Tokyo
Setagaya-ku,
Tokyo

Aug 12, 2011

2,471.30

2,056.41

Jun. 2008

1,223

0.6

94.9

1(Note2)

6.4

Oct 14, 2011

1,894.35

1,512.38 Feb. 2008

1,165

0.6

95.5

1(Note2)

8.6－

25,170.94－

20,583

10.4

94.6

5

Chiyoda-ku, Tokyo

Mar 20, 2007

6,121.85

6,121.85

Apr. 1985

2,590

1.3

100.0

1(Note2)－

6,121.85

－

2,590

1.3

100.0

1

－

331,677.14－

197,855

100.0

98.1

49

Ito-Yokado Higashi-NarashinoStore
Kojima×Bic Camera Kashiwa
Store

Fukasawa House Towers H&I

Top Residence Yoga－

Subtotal （5 Properties）
Other

－

56,351.42

Musashiurawa Shopping SquareTokyo Met.
Area

150,543.90

PML
(%)

Mar 1, 2006

Other Major
MEL Building
CitiesSubtotal （5 Properties）
Top Residence Nihonbashi
Central Tokyo Kayabacho

Residential－(Note1)1,890.87

Occupancy
NumberRateof Tenants(%)

Sagamihara-shi,
Kanagawa
Narashino-shi,
Chiba

Sagamihara Shopping CenterTokyo Met.
Area

Rentable Floor Completion
Space (m2)Date

Address

Central Tokyo OAK PLAZA
Subtotal （1 Property）
Total（22 Properties）

Jun. 2004(Note1) Rentable floor space for Ginza Oji Building increased by 32.5m2 as of May 8, 2014.
(Note2) An entire property has been rented to master lessee and subleased to each tenant.
(Note3) An entire property has been rented to master lessee and subleased to each tenant excluding one tenant who rented directly from TOP REIT.

－

－
7.7
－
2.7

34

V-4. Operating Income by Property (16th FP)
Operating period

NEC Head Office
Building

Harumi Island
Triton Square
Office Tower Y

Harumi Island
Triton Square
Office Tower Z

Kanda
Nishiki-cho
3-chome Building

AkasakaOji Building

Shinjuku East Building

Shiba- Koen
Building

Shinkawa
Chuo Building

Kanda
Park Plaza

Ginza Oji Building

Faret East
Building

181days181days181days181days181days154days181days181days181days154days181days（million yen）

Total revenue from property
leasing

1,416

769

266

197

70

212

151

82

150

Rent revenue － real estate

1,416

769

266

197

70

201

151

75

150

Total expenses from property
leasing

214

368

84

36

26

59

42

26

72

1

177

22

17

7

20

9

9

36

205

85
89

17
38

16
-

7
9

16
13

12
13

3
0

22
11

Non-life insurance
expenses

1

2

0

0

0

0

0

0

0

Repair expenses

4

11

2

1

2

8

7

0

0

1
1,202
[5.7%]
235
966

2
401
[2.4%]
249
152

212[2.1%]
121
91

350[5.5%]
34
316

2
181
[3.8%]
33
147

0
161
[6.5%]
57
103

043[1.5%]
1726

0
153[5.5%]
35
117

0
108
[4.2%]
1494

13
55[6.6%]
748

178[7.5%]
22
55

329

31

12

-

28

0

3

19

9

1

32

Sagamihara Shopping
Center

Ito-Yokado
Higashi-NarashinoStore

Kojima ×BiｃCamera
Kashiwa Store

Musashi urawa
Shopping Square

MEL
Building

Top Residence
Nihonbashi
Kayabacho

Fukasawa House
Towers H&I

Ecology Toyosu
Procentury

Impress
Musashi-Koganei

Top
Residence
Yoga

OAK
PLAZA

181days181days154days181days181days181days181days181days181days181days181days

Property
management expenses
Utilities expenses
Taxes and dues

Other
NOI
[NOI yield]
Depreciation and amortization
Operating income

Capital expenditures

Operating period

332

236

129

58

89

231

168

44

37

94

Rent revenue － real estate

332

236

129

58

85

220

156

42

36

94

Total expenses from property
leasing

69

34

17

10

20

59

39

11

9

19

Property
management expenses

1

1

1

2

9

35

20

5

5

0

Utilities expenses

-

-

-

6

1

0

1

0

0

-

Taxes and dues

52

27

14

0

4

15

8

2

1

13

Non-life insurance
expenses

0

0

0

0

0

0

0

0

0

0

Repair expenses

13
1
263
[4.4%]
55

30201[4.5%]
66

127[6.7%]
1601
112[5.2%]
41

10
48[8.0%]
74069[5.8%]
2762
171[3.2%]
6280
128[5.0%]
443032[5.4%]
171
0
28[4.9%]
134174[5.8%]
12

Operating income

207

134

111

70

40

41

108

84

15

15

62

Capital expenditures

25

7

-

-

-

0

3

0

-

-

4

Other

[NOI yield]
Depreciation and amortization

Renewal of monitoring device
Renewal of gondola
Renewal of moving roof
and others【Harumi ITS Y】
Renewal of waterworks device
Renewal of external
wall and ceiling
Replacement of electric water
heater in cafeteria
and others【Akasaka Oji Building】
Renewal ofwaterproof equipment
Renewal of high voltage
incoming panel
and others

Total revenue from property
leasing

NOI【NEC Head Office
Building】【Faret East Buildin】
Renewal of external
wall and ceiling
Renewal of security
equipment
and others【Sagamihara Shopping
Center】
Renewal of air condition facility
Renewal of automatic
control device
and others(Note) Some figures for Harumi Island Triton Square Office Tower Z, Kanda Nishiki-cho 3-chome Building and Kojima × Bic Camera Kashiwa Store are not disclosed due to request by the tenants.

35

V-5. Property Details: Office Buildings

Property

NEC Head Office Building

Property

Harumi Island Triton Square Office Tower Y

Property

Harumi Island Triton Square Office Tower Z
Harumi, Chuo-ku, Tokyo

Address

Shiba, Minato-ku, Tokyo

Address

Harumi, Chuo-ku, Tokyo

Address

Floor Area

144,476.05 m2

Floor Area

267,132.67 m2

Floor Area

267,132.67 m2

Completion

January 1990

Completion

October 2001

Completion

October 2001

Title

Co-ownership (50%)

Title

Co-ownership (3rd – 15th floors)

Title

Co-ownership (a part of the 17th floor and 18th
– 22nd floors)

Acquisition Price 41.95 billion yen

Acquisition Price 33.00 billion yen

Acquisition Price 20.00 billion yen

36V-5. Property Details: Office Buildings

Property

Kanda Nishiki-cho 3-chome
Building

Address

Kanda Nishiki-cho, Chiyoda-ku,
Tokyo

Property

Akasaka Oji Building

Floor Area

12,169.78 m2

Address

Property

Shinjuku EAST Building

Property

Shiba-Koen Building

Akasaka, Minato-ku, Tokyo

Address

Tomihisa-cho, shinjuku-ku, Tokyo

Address

Shiba, Minato-ku, Tokyo

Floor Area

10,063.05 m2

Floor Area

10,704.44 m2

Floor Area

4,958.29 m2

resistant reinforcement construction
implemented in October 2009)

Completion

April 1989

Completion October 2002

Completion May 1991

Title

Ownership

Title

Ownership

Title

OwnershipTitle

Co-ownership (1st – 7th floors)

AcquisitionPrice

12.70 billion yen

AcquisitionPrice

9.66 billion yen

AcquisitionPrice

5.80 billion yen

AcquisitionPrice

5.77 billion yen

March 1973
(large-scale renovation undertaken inCompletion November 2001 and earthquake-37

V-5. Property Details: Office Buildings

Property

Kanda Park Plaza
Kajicho, Chiyoda-ku, Tokyo

Property

Shinkawa Chuo Building

Address

Address

Shinkawa, Chuo-ku, Tokyo

Floor Area 5,511.83 m2

Floor Area 7,981.27 m2
Completion July 1987
Title

Ownership

Acquisition
5.61 billion yen
Price

November 1959 (Repair work toCompletion enhance earthquake resistance in
2003)
Ownership
Title
Acquisition
5.156 billion yen
Price

Property

Faret East Building

Property

Ginza Oji Building

Address

Akebonocho, Tachikawa-shi,Tokyo

Address

Ginza, Chuo-ku, Tokyo

Floor Area

16,206.34 m2

Floor Area

3.251.03 m2

Completion

December 1994

Title

Co-ownership (2nd – 5th and a partof the 6th and 8th floors)

AcquisitionPrice

2.091 billion yen

Completion January 1991
Title

Ownership (leasehold interest forpart of the land)

AcquisitionPrice

2.00 billion yen

38

V-5. Property Details: Retail Properties
Property

Sagamihara Shopping Center

Address

Kobuchi, Minami-ku Sagamihara-shi, Kanagawa

Floor Area

56,351.42 m2

Completion

August 1993

Title

Ownership

Acquisition Price

12.00 billion yen

Property

Kojima×Bic Camera Kashiwa Store

Address

Oyamadai, Kashiwa-shi, Chiba

Floor Area

Building A：10,090.80 m2
Building B：10,346.56 m2

Completion

September 2000

Title

Ownership

Acquisition Price

4.50 billion yen

39V-5. Property Details: Retail Properties

Property

Ito-Yokado Higashi-Narashino Store

PropertyMusashiurawa Shopping Square

Property

MEL Building

Address

Higashinarashino, Narashino-shi, Chiba

Address

Bessho, Minami-ku, Saitama-shi, Saitama

Address

Chuo, Aoba-ku, Sendai-shi, Miyagi

Floor Area

45,338.37 m2

Floor Area

28,930.36 m2

Floor Area

1,756.32 m2

Completion

October 1994

Completion

October 2005

Completion

January 1980 (extended in July,2005)

Title

Co-ownership (50%)

Title

Ownership

AcquisitionPrice

4.335 billion yen

AcquisitionPrice

1.21 billion yen

Title

Ownership

AcquisitionPrice

8.90 billion yen

40V-5. Property Details: Residential

Fukasawa House Towers H&I

Property

Ecology Toyosu Procentury

Property

Top Residence Nihonbashi Kayabacho

Address

Fukasawa, Setagaya-ku, Tokyo

Address

Toyosu, Koto-ku, Tokyo

Address

Nihonbashi Kayabacho, Chuo-ku, Tokyo

Floor Area

12,135.36 m2

Floor Area

9,630.96 m2

Floor Area

4,540.70 m2

Completion

June 2004

Completion

January 2005

Completion

February 2004

Title

Co-ownership (H&I)

Title

Ownership

Title

Ownership

Property

Acquisition Price 10.635 billion yen

Acquisition Price 5.16 billion yen

Acquisition Price 2.40 billion yen

41V-5. Property Details：Residential and Other Properties

Property

Impress Musashi-koganei

Property

Top Residence Yoga

PropertyOAK PLAZA
Kanda Awajicho, Chiyoda-ku, Tokyo

AddressNakamachi, Koganei-shi, Tokyo

Address

Tamagawadai, Setagaya-ku, Tokyo

Address

Floor Area

2,471.30 m2

Floor Area

1,894.35 m2

Floor Area

6,121.85 m2

Completion

June 2008

Completion

February 2008

Completion

April 1985 (Completion of the conversion in 2007)

Title

Ownership

Title

Ownership

Acquisition Price

1.165 billion yen

Acquisition Price

2.59 billion yen

Title

Ownership

Acquisition Price 1.2234 billion yen

42VI. Appendix : Structure of Related Parties43

VI-1. Characteristics of Top REIT and Operational Strategies
Top REIT AssetManagement (TRAM)

Asset
Management

Top REIT

1. Skilled Management of a Diversified Portfolio(1) Pursue both external growth and quality of assets management

Diversified Portfolio(2) Pursue stability and growth potential of profitability by utilizing
characteristic of diversified assets

OfficeDevelopment

Brokerage

Capital+Property
Management

DNA

Human
Resources(3) Strategic application of commissioned reports from a think tankThree Major

RetailAsset Types

Residential

2. Maximum Use of Sponsor Strengths

Other Asset
Types

Asset

i.e., hotels andManagement

warehouses(1) Steady external growth through pipeline function(2) Agile acquisition of properties through warehousing function(3) Achieving internal growth through “management-added benefits”

Sponsors
Sumitomo Mitsui Trust
Bank, Limited.

SupportOji Real Estate
A wholly-owned subsidiary of
Oji Management Office Inc.

31%

Maximizing Unitholders’ ValueSponsors’Strengths

Utilizing Sponsor Strengths
Inheriting Sponsors’ DNASteady Growth ofPortfolio

Ensuring SteadyRevenue69%

Excellent personnel have been dispatched to TRAM from the sponsors to ensure realestate investment expertise as well as inheritance of their corporate groups’ assets, that
is, a long-term strategic view and diversified know-how acquired through each of thesponsor’s businesses.

Sponsor skills shall be utilized to achieve steady growth by applying their real estatedevelopment abilities, brokerage networks and management skills, including leasing
activities that utilize the leasing demand from sponsors’ groups/clients.
Number of group companies (as of Mar. 31, 2014)
Sumitomo Mitsui Trust Holdings Group104

Oji Holdings Corporation Group

347

44

VI-2. Overview of Asset Manager
Name

Top REIT Asset Management Co., Ltd.

Address

1-3-7 Yaesu, Chuo-ku, Tokyo

EstablishedOct. 22, 2004

Paid-in Capital¥300milShareholders

Sumitomo Mitsui Trust Bank, Limited. 69%
Oji Real Estate Co., Ltd. 31%

Business
Description

Investment management business(Registered Financial Instruments
Business Operator No. 365 (Kinsho), issued by the
Director-General of the Kanto Local Finance Bureau)

General Meeting of Stockholders
AuditorBoard of Directors
Investment and Management Committee

President andRepresentative
Director:

Directors

Risk and Compliance Committee

Representative
Director and President
Compliance Officer

Investment
Department

Asset
Management
Department

Finance
Department

Nobuhito Endo

Planning and
Administrative
Department

Compliance
Office※The head of the Compliance Officeconcurrently serves as the Compliance
Officer(Note 1) Proposals will be passed to the Risk and Compliance Committee if they fall under【 Decision-Making Process 】

Report of minority opinions(Note 1)either of the following:(Note 2)•

Material transactions with interested parties defined in the rules on transactions
with interested parties•

The head of the Compliance Office recognizes the discussion of the issues in
the Risk and Compliance Committee to be necessary.

(a unanimous vote is required in this case.)
Risk and

Department
incharge ofCompliance
Compliance

Committee

Officepreparing

Investment
andBoard ofDirectors

Management
Committee

proposalExamination

Examination
anddecision(Rejection)
ReturnExamination
anddecision(Rejection and/or Suspension)(Note 3)

Examination
anddecision(Rejection)

Final
Decision(Note 2) Proposals will be passed to the Board of Directors if they fall under any of the following:•

The price of the proposed acquisition or sale is over 10 billion yen and over
10% of Top REIT’s total assets.

•

Material transactions with interested parties defined in the rules on transactions
with interested parties•

Forward commitment transactions•

Capital raising plans (final decisions on raising capital shall be made by the
Board of Directors of Top REIT.)(Note 3) The head of the Compliance Office can suspend discussions and decisions andreturn the item to the Department in charge of the proposal if he or she judgesthat the item has legal problems in the process of discussions or decision making
at the Investment and Management Committee.

45

Contact

IR Contact
Shusaku Ohashi, Tsuyoshi Nakai, Junko Yoshii
Investor Relations
Top REIT Asset Management Co., Ltd. (Asset Manager)
Phone: +81-3-3243-2181
Fax:+81-3-3243-2182
E-mail: info-top@top-reit-am.co.jp
HP:
http://www.top-reit.co.jp/english/

The contents of this document, including summary notes, quotes, data and other information, are provided solely
for informational purposes and not intended to constitute an offer, solicitation and/or promotion of any specificproducts including investment units of Top REIT, Inc..
Forward looking statements in this document shall not be viewed as a guaranty of Top REIT’s future performance.
Although every attention has been paid to the contents of this document, the accuracy and appropriateness of theinformation included in this document is not guaranteed and the contents can be revised and/or cancelled without
notice.
All rights regarding use of these materials belong to Top REIT. No copy or use of the content shown in thesematerials shall be permitted without the prior consent of Top REIT.

46