Ninth Fiscal Period

Semi-Annual Report
November 1, 2007

April 30, 2008

Profile
Nomura Real Estate Office Fund, Inc. (referred to as “Nomura Office Fund” or the“Company” hereafter) was listed on the Tokyo Stock Exchange on December 4,
2003 as a real estate investment corporation formed to own and invest in officeproperties, subject to the Law Concerning Investment Trusts and Investment
Corporations of Japan. The Company’s basic investment policy is to assure stable
rent revenues and steady portfolio growth over the medium- to long-term.
Nomura Real Estate Asset Management Co., Ltd. (referred to as “NREAM”
hereafter), a wholly owned subsidiary of Nomura Real Estate Holdings, Inc. is incharge of asset management on behalf of Nomura Office Fund in accordance withthe basic investment policy as described above. Through coordination with
Nomura Real Estate Holdings, Inc. and other group companies, NREAM aims toachieve these goals and more.

Strength of Nomura Office FundJ-REIT with a large-capitalization specialized in office buildings• Portfolio of 37 properties at a total acquisition price of¥317.4 billion (as of April 30, 2008)• Market capitalization of ¥219.6 billion (as of April 30, 2008)• Constituent of MSCI Standard Index

Track records of stable managements• Nine consecutive fiscal periods of growth in operating revenues and net income• Steady growth in DPU

Collaboration with Nomura Real Estate Group• NREAM, in charge of the Company’s asset management,
belongs to Nomura Real Estate Group• Supported by the group companies throughprovision of sales information and management expertise

Rated A or more by domestic and foreign rating agencies
Rating and Investment Information, Inc.

Issuer rating: AA-Standard & Poor’s Ratings Services

Long-term rating: A
Short-term rating: A-1

Moody’s Investors Service, Inc.

Issuer rating: A2• Holding to conservative financial strategies

Unit Price (¥)

Contents

Market Capitalization (¥ mln)

1,600,000

To Our Investors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

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

Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

Performance Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Management Summary of the Ninth Fiscal Period . . . . . . .

4Financial Section

Portfolio Highlights................................

8

Business Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Financial Status of the Ninth Fiscal Period . . . . . . . . . . . . . .

9Profile of the Asset Management Company . . . . . . . . . . . . . 48

Summary of Portfolio Properties. . . . . . . . . . . . . . . . . . . . . 10

Portfolio Map . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

Corporate Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Back Cover

900,000

1,400,000

750,000

Operating Revenues (Lth)(¥ mln)15,000Net Income (Lth)15,905

15,63815,15011,968

14,114
10,739600,000

1,200,000

16,923

16,91816,75014,52012,500Cash Distribution per Unit (Rth)12,18315,00011,0909,810

10,000(¥)
17,00013,0008,641
1,000,000

450,000

7,500
10,273800,000

300,000

5,000 4,531

6,656

7,106

11,0003,484
600,000
400,000

Dec. 4
2003

Apr. 30
2004

Oct. 29
2004

Apr. 282005

Oct. 312005

Apr. 28
2006

Oct. 312006

Apr. 272007

Oct. 312007

150,000

2,500

0

0

Apr. 30
2008

2,606

3,596

4,229

4,466

4,486

4,499

2,681

9,000
7,000

1,526

5,000
1st
Period2nd
Period3rd
Period4th
Period5th
Period6th
Period7th
Period8th
Period9th
PeriodTo Our Investors

Financial Highlights

Dear Investors,

FINANCIAL SUMMARY

We are delighted to be able to present to you the financial results for the ninth fiscal period

9th Period

8th Period

7th Period

6th Period

5th Period

from Nov. 1, 2007
to Apr. 30, 2008

from May 1, 2007
to Oct. 31, 2007

from Nov. 1, 2006
to Apr. 30, 2007

from May 1, 2006
to Oct. 31, 2006

from Nov. 1, 2005
to Apr. 30, 2006

Operating Revenues¥ mln

12,183

11,968

11,09010,7399,810

Net Operating Income (NOI) (Note 1)

¥ mln

8,572

8,286

7,763

7,591

6,952

Income before Income Taxes

¥ mln

4,500

4,486

4,466

4,230

3,597

Net Income

¥ mln

4,499

4,486

4,466

4,229

3,596

“Toho Edogawabashi Building,” “JCB Sapporo Higashi Building” and “SORA Shin-Osaka 21.” As a result ofTotal Assets¥ mln

353,730

326,711315,402

288,060

268,559

these investments, the number of properties in the portfolio now totals 37, with total acquisition price ofUnitholders’ Capital¥ mln

156,767

156,767

156,767

156,767

124,610¥317.4 billion, promoting further diversification of the portfolio.

Number of Units Issued

unit

265,903

265,903

265,903

265,903229,970

Net Assets per Unit¥

606,488606,510606,315

605,499

557,492

¥ mln

4,499

4,498

4,453

4,229

3,596

(ended April 30, 2008) and report on our activities during the period herein.
We booked operating revenues for this period of ¥12,183 million, current profits of ¥4,500 million,
and net income of ¥4,499 million. Cash distribution per unit was ¥16,923.
Some of the major developments during the ninth period included new investments inConcerning property management, we focused on raising of rents reflecting the office leasing market
conditions that continue to be favorable. The average occupancy rate remained stable throughout this period,

Total Cash Distribution

reaching 97.6% at the end of the period.

Cash Distribution per Unit¥

16,923

16,91816,75015,905

15,638Funds from Operation (FFO) per Unit (Note 2)¥

23,06922,71422,50921,58521,889In terms of financing, regardless of the change in the funding environment, the Company has maintained
strong relationship with financial institutions and secured stable funding, and continues to maintain a healthybalance sheet.

Note 1: NOI (Net Operating Income) = Real Estate Rental Revenues — Real Estate Rental Expenses + Depreciation
Note 2: FFO per Unit = (Net Income + Depreciation + Amortization of Investment Corporation Bonds Issuance Costs — Real Estate Sale Profit/Loss) / Number of Units Issued

We will continue adhering to the conservative investment policies in future.
Lastly, we would like to thank you again for your patronage in the past periods, and would like to ask for

CHANGES IN KEY FIGURES

your continued support for the years to come.
Operating Revenues (¥ mln)

Total Assets (¥ mln)

Cash Distribution per Unit (¥)

400,000

14,00011,968 12,183

12,00010,739 11,090

300,000

268,559

288,060

315,402 326,711

353,730

18,00016,750 16,918 16,923
16,00015,638 15,905

9,810

10,000200,000

14,000100,000

12,000

8,000
6,000
4,000

0
5th
Period6th
Period7th
Period8th
Period9th
Period10,0005th
Period6th
Period7th
Period8th
Period9th
Period5th
Period6th
Period7th
Period8th
Period9th
PeriodCHANGES IN UNIT PRICE AND MARKET CAPITALIZATION
Unit Price (¥)

Market Capitalization (¥ mln)

1,600,000

900,000

1,400,000

750,000
Market capitalization (as of Apr. 30, 2008) ................ ¥ 219,635 mln
All-time high price ..................................................... ¥1,560,000 per unit
All-time low price ...................................................... ¥ 505,000 per unit

1,200,000

600,000

1,000,000

450,000

800,000

300,000

Mitsuharu Sato
Executive Director
Nomura Real Estate Office Fund, Inc.

600,000

400,000
Dec. 42003

2

2nd public offering¥588,000

4th public offering¥926,100

3rd public offering¥740,782

150,000

Initial public offering¥500,000
Apr. 302004

0Oct. 29
2004

Apr. 282005

Oct. 312005

Apr. 28
2006

Oct. 312006

Apr. 272007

Oct. 312007

Apr. 30
2008

3

Sapporo

M anagement Summary of the Ninth Fiscal Period

Toho Edogawabashi Building

NEW INVESTMENTS

Medium-sized office building in center of Tokyo• Good access to the Tokyo central business
district such as Iidabashi or Ikebukuro, etc.,
since it is located near Edogawabashi Station• Good visibility as the building faces the major
street, Shin Mejiro Dori• Appealing to tenants who seek a building
with the individual air conditioning system,
standard floor area of approximately
235 sq. meters, which is sufficient
for any type of layout, and moderate
floor size for one floor use

SORA Shin-Osaka 21
A landmark office building adjacent to “Shin-Osaka Station”
a terminal station in Osaka
Tokyo
Osaka

Ueno
Shinjukueo Lin

Four Seasons HotelTokyo at Chinzan-so

Kyoto

Tokyo

Shibuya

h
rakuc
way
o Yu
ress
Metr
Exp e
Tookyolitan o Lin
ropo kur
Met Ikebu
No.5• The landmark 21-story office building adjacent to Shin-Osaka Station
with two Shinkansen Lines and several other lines• The building, completed in 1994, with the individual air conditioning
system, 2,700 mm of ceiling height, and large scale car-parking of
202 lots, etc., is able to meet a wide range of tenant needs• Conditions of the location and the building have good prospects ofstable office demand for mid-to-long term

Ikebukuro

Mejiro DoriToho Edogawabashi Building

King Records Head Office
Plaza Edogawabashi
Bunkyo Sekiguchi Ichi
Post Office

Ka

nd

a

Ri

Edogawa Park

ve

Kobe

r

Ed

Shin MOsaka

ejiro D

ori

Higashimikuni Stn.

ab

as

hi

Stn

.

Sodai Dori

Edogawabashi

Gaien-Higashi Dori

Location:
Bunkyo-ku, Tokyo
Date Acquired:
March 2008
Acquisition Price: ¥2,080 million

aw

Dori

Comodi-iidaogMizuho Bank
The Bank ofTokyo-Mitsubishi UFJ

Dai Nippon Printing
Factory

Shin-Midosuji

Higashi-Yodogawa Stn.
Higashi-Yodogawa

SORA Shin-Osaka 21
Higashi-Yodogawa
High School
Shin-Osaka
Seni CityJCB Sapporo Higashi Building*

ACROS
Shin-Osaka

ansen
Shink
kaido
JR To

Bank ofTokyo-Mitsubishi
UFJ

Mielparque
Osaka

NisseiWacoalShin-Osaka
Osaka Building
Building
Shin-Osaka
Shin-Osaka
MT
Building
2nd
Dai-ichi Seimei
Building

Recruit Shin-Osaka
Building
Shin-Osaka
Washington
Hotel

JR Line

ine

JR L

.

Stn

sen
kan
Shin

SubwayMidosuji Line

o
any
JR S

aka

-Os

Shin

An office building of stable revenues
with long-term lease contract• Adjacent to Odori Station on the Subway Toho Line, Nanboku Line, and Tozai Line
• Good prospects for not only office demands but also commercial demands since
it is located in the central district of Sapporo City
• Executed a ten year Building Lease Agreement ending in February 7, 2018 withJCB Co., Ltd. as its Hokkaido Branch

Location:
Yodogawa-ku, Osaka City
Date Acquired:
April 25, 2008
Acquisition Price: ¥19,251 million
Stn.
SapporoSosei Ri

Ishikari
Subprefectural
OfficeHokkaido Pref.
Government Office

Sapporo North Plaza

ver

Stn.
Sapporo
Seibu
Dept.
Store

SapporoGrand Hotel

Hokkaido Pref.
Police Headquarters

Hotel New Otani
Sapporo

Clock
Tower

JCB Sapporo
Higashi Building

Sapporo
City OfficeNHK

Bank of Japan
Odori Park

Tozai Li

Otaru

KushiroOdori Stn.
Marui Imai
Mitsukoshi

Tomakomai
Hakodate

TV Tower

Subwayne
Toho Line
The Hokkaido Bank
Head OfficeortationspanTre Stn.
Cityn-chom
SapporoNishi Yo
SubwayAsahikawa

SapporoKita-Sanjo Building

ku LineSummary of Issuance
Amount of issuance¥20 billion
Date of issuance
April 24, 2008
Redemption Date
June 6, 2008
Collateral
None
Ratings
a-1+
(R&I)
A-1
(S&P)
Prime-1 (Moody’s)

Daimaru
Dept. StoreNambo

NOF has issued short-term investment
corporation bonds (aka commercial paper) for
the first time, aggregate amount of ¥20 billion
for the acquisition of SORA Shin-Osaka 21.

JR Tower

JR LineSubwayTopics:Issuance of Short-term Investment
Corporation Bonds

Location:
Chuo-ku, Sapporo City
Date Acquired:February 8, 2008
Acquisition Price: ¥3,700 million* Although the name of the Property is “Sapporo Higashi Building” as of now, it will be altered to the name above-mentioned hereafter.

4

5

M anagement Summary of the Ninth Fiscal Period
STRATEGIC RENEWALS ENHANCE PROPERTY COMPETITIVENESS
On certain floors of Shinjuku Nomura Building, rent level was improved by implementation of the latest functionalities suchas higher ceilings and customizable ceilings in the office space within the standard floor.

Points of renewal• Raised ceiling height (100mm)• OA floor implementation (75mm)• Implementation of customizableceiling that can accommodate
flexible layout changes

BeforePROPERTY MANAGEMENT CAPTURES BUSINESS OPPORTUNITIES PRESENTED
UNDER FAVORABLE OFFICE LEASING MARKET
Taking the opportunity presented by the notice of lease cancellation by the former tenant who occupied 100% of the NOF
Surugadai Plaza Building, the Company took advantage of the favorable office leasing market, and quickly secured a lease
contract with a new tenant. The new rent exceeds the former rental level, realizing improved profitability and property value.

Move-out

Move-inFormer Tenant

New Tenant

Building Occupancy: 100%Cancellation:
October 2007
Contract Type:
Normal Lease (2 years)

Building Occupancy: 100%Cancellation:
February 2008
Contract Type:
Fixed Term Lease (5 years)

After

Higher Rent Level, etc.

Rental level for latest lease contract (Shinjuku Nomura Building)Appraisal Value
Before renovation(Leased from February 2008)100(as of April 30, 2007)

After renovation(Leased from March 2008)

5% Difference

105(Note)

Appraisal Value

Up 25.7%¥5.6 billion(Note)(as of October 31, 2007)¥7.04 billion(Note) Rental unit price for the lease commencing in February 2008 = 100

Pick
Up

RENEWALS ENHANCE PORTFOLIO OCCUPANCY RATESThe renovation aimed differentiating from the surrounding buildings and enhancing the level of satisfaction of tenants has
resulted in an increased occupancy rate of approximately 10% of Hiroshima Tatemashi NOF Building.

A group of commercial buildings along
Chuo-ku Kaigan Dori, Kobe City including“NOF Kobe Kaigan Building”* was designated as“Heritage of Industrial Modernization” by the Ministryof Economy, Trade and Industry.
* The property has been designated under its original name “Kaigan Building.”

BeforeBefore

After

After

Occupancy Rate of Hiroshima Tatemachi NOF Bldg.
(%)

84.0

85
80.0
80

77.8
75.5

75.5

75.5

75.5

Nov. 30, 2007
(Beginning of 9th Period)

Dec. 31, 2007

Jan. 31, 2008

Feb. 29, 2008

75

70

6

Mar. 31, 2008

Apr. 30, 2008
(End of 9th Period)

May. 31, 2008

“Heritage of Industrial Modernization” is a designation offacilities etc., that played an innovative role during theindustrial development process within the region as new
and attractive tourist attractions, for the purpose ofrevitalizing the area.
The first to fourth floor of the property was built in
1918, and was used as the Kobe Branch of the Mitsui &Co., Ltd. In 1998, it was recreated as a state-of-the-art
16-story office building, adding the glass-walled high-rise
The certificate
tower while retaining the modernist appearance of theoriginal structure. (The Company acquired the building
in 2003.)
The beautiful exterior of the building that is registered as Tangible Cultural
Property by the Agency for Cultural Affairs and designated as Important
Landscape Building by the City of Kobe, also signifies the history of developmentof modern Japan, with remnants of machine-gun bullet holes from the World War
II period. We hope to see this nostalgic property, enhanced by new functions andoperating as a state-of-the-art office building, continue to play a role in thedevelopment of the community.

The certificate plateon the wall of the building

7

Portfolio Highlights

Financial Status of the Ninth Fiscal Period

CHANGES IN OCCUPANCY RATE (Average)

TURNING OF SHORT-TERM FLOATING-RATE DEBTS TO LONG-TERM FIXED-RATE DEBTS

The average occupancy rate maintained stable and high level throughout the ninth fiscal period.

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

Total leasable space (000m2)

Average occupancy rate (%)

100.0

97.9

97.2

97.3

97.2

98.3

98.2

362

362

362

362

371

373

90.0

97.6

500

395

400

80.0

300

70.0

200

60.0

100

50.0

Ratio of long-term and short-term interest-bearing debts
Long-term¥112.0 billon
67.6%

Ratio of fixed and floating interest-bearing debts
Fixed-rate¥147.0 billion
88.7%

Short-term¥53.7 billion
32.4%

Floating-rate¥18.7 billion
11.3%

0
Oct. 31,2007(End of 8th Period)

Nov 30,2007

Dec. 31,
2007

Jan. 31,2008

Feb. 29,
2008

Mar. 31,2008

Apr. 30,
2008(End of 9th Period)

Note: “Short-term” includes long-term debts
payable within one year.

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

CHANGES IN SIZE OF PORTFOLIO
As indicated below, diversification of the portfolio, which has steadily increased since listing, has also been promoted.

We have diversified the repayment dates of interest-bearing debts to avoid concentration on any specific period or timing,
thus reducing the refinance risk and stabilizing the cash flow.

37 bldgs(¥ bln)

350
300
250
12 bldgs

200
150

104.2

100

15 bldgs

18 bldgs

19 bldgs

23 bldgs

28 bldgs
240.8

30 bldgs
259.1

31 bldgs

DIVERSITY OF REPAYMENT DATES

34 bldgs

317.4
282.8

292.4
(¥ bln)40

210.1

Borrowings

Investment Corporation Bonds

Short-term Investment Corporation Bonds

38.7

184.6
127.2

151.5

35
30

50

25

0
Initial Listing
Dec. 2003

1st Period
Apr. 30, 2004

2nd Period
Oct. 31, 2004

3rd Period
Apr. 30, 2005

4th Period
Oct. 31, 2005

5th Period
Apr. 30, 2006

6th Period
Oct. 31, 2006

7th Period
Apr. 30, 2007

8th Period
Oct. 31, 2007

9th Period
Apr. 30, 2008

20

17.5
17
15

15

10

10

ALLOCATION BY AREA AND PROPERTY (as of Apr. 30, 2008)

16
13.5
8

6.5

5

3

2

5

4

5

4.5

0

Diversification by Location

Diversification by Property (Main Top 10 Properties)

Other Regional Cities

Other 27 Buildings

30.6%

38.1%
Central Tokyo
55.5%

NOF Shiba Bldg.
3.2%
Secom Medical Bldg.
3.6%
NOF Shibuya
Koen-dori Bldg.

Suburban Tokyo

3.8%

13.9%

NOF Midosuji Bldg.

13th

16th

19th

22th

25th

28th

31th

34th

37th

40th

43th

46th

49th
(period)

Shinjuku Nomura Bldg.
12.2%
JAL Bldg.
10.4%
Omron Kyoto
Center Bldg.
7.5%
NOF Nihonbashi
Honcho Bldg.

CREDIT RATINGS
We have obtained ratings from three domestic and foreign rating companies for the purpose of diversifying funding methods
such as issuance of investment corporation bonds, and improving creditworthiness in the capital market.

6.5%
SORA Shin-Osaka 21
6.1%
Tennozu Park Side Bldg.

4.1%

Note: Central Tokyo ..................Six central wards consisting of Chiyoda, Chuo, Minato, Shinjuku, Shinagawa and Shibuya
Suburban Tokyo ...............Other areas of Tokyo and the Surrounding three prefectures including Kanagawa, Saitama and Chiba
Other Regional Cities .......Major regional cities in other areas

8

10th

4.7%

Rating Company

RatingOutlookRating and Investment Information, Inc.

AA-:

Issuer rating

StableStandard & Poor’s Ratings Services

A:
A-1:

Long-term corporate credit rating
Short-term corporate credit rating

StableMoody’s Investors Service, Inc.

A2:

Issuer rating

Stable9

Summary of Portfolio Properties
Name of Property

Location

Portfolio Map
Leasable Floor
Space (m2)Date Acquired

Acquisition Price(¥ mln)Ratio(%)

Central Tokyo

JR Chuo Line

Shinjuku Nomura Building

Shinjuku-ku, Tokyo

31,589.26

Dec. 8, 2003

38,73012.2

JAL Building

Shinagawa-ku, Tokyo

42,084.11

Mar. 18, 2005

33,080

10.4

NOF Nihonbashi Honcho Building

Chuo-ku, Tokyo

19,233.25

Dec. 5, 2003

20,600

6.5

Tennozu Park Side Building

Shinagawa-ku,Tokyo

18,051.60

Feb. 27, 2004

14,8004.7

NOF Shibuya Koen-dori Building

Shibuya-ku, Tokyo

3,420.16

Sep. 28, 2004

12,000

3.8

Secom Medical Building

Chiyoda-ku, Tokyo

8,821.24

Sep. 1, 2006

11,5003.6

NOF Shiba Building

Minato-ku, Tokyo

8,165.10

May 25, 2004

10,000

3.2

Nishi-Shinjuku Showa Building

Shinjuku-ku, Tokyo

5,663.19

Nov. 30, 2005

8,800

2.8

NOF Tameike Building

Minato-ku, Tokyo

4,715.20

Sep. 29, 2005

7,400

2.3

NOF Shinagawa Konan Building

Shinagawa-ku, Tokyo

7,667.55

Dec. 8, 2003

5,500

1.7

NOF Surugadai Plaza Building

Chiyoda-ku, Tokyo

4,160.94

Feb. 27, 2004

5,150

1.6

Hatchobori NF Building

Chuo-ku, Tokyo

2,854.83

Aug. 10,2007

3,160

1.0

NOF Kanda Iwamoto-cho Building

Chiyoda-ku, Tokyo

4,076.38

Feb. 26, 2004

3,080

1.0

NOF Minami Shinjuku Building

Shibuya-ku, Tokyo

2,464.71

Jun. 25, 2004

2,280

0.7

176,080

55.5

Total Central Tokyo (14 Properties)

162,967.52

Shinjuku-ku

01 Shinjuku
1408
Shibuya-ku

05

Chiyoda-ku

06

Shibuya

Koto-ku, Tokyo

18,218.17

Dec. 5, 2003

7,550

2.4

Ota-ku, Tokyo

13,683.47

Dec. 5, 2003

6,416

2.0

Toho Edogawabashi Building

Bunkyo-ku, Tokyo

2,058.97

Mar. 28, 2008

2,080

0.7

Crystal Park Building

Musashino City, Tokyo

3,900.85

Feb. 28, 2006

3,700

1.2

Faret Tachikawa Center Square

Tachikawa City, Tokyo

6,853.38

Dec. 5, 2003

3,290

1.0

NOF Kawasaki Higashiguchi Building

Kawasaki City, Kanagawa

8,253.41

Jun. 30, 2005

9,500

3.0

NOF Yokohama Nishiguchi Building

Yokohama City, Kanagawa

6,817.76

May 12, 2005

5,050

1.6

NOF Shin-Yokohama Building

Yokohama City, Kanagawa

8,074.83

Dec. 5, 2003

3,600

1.1

Yokohama Odori Koen Building

Yokohama City, Kanagawa

4,236.46

Sep.28, 2007

2,993

0.9

44,179

13.9

Total Suburban Tokyo (9 Properties)

72,097.30

JR Sobu
Line

03
12

26
24 25

Chuo-ku

SapporoMinato-ku

07

JR
YamanoteLine
Shinagawa

1004

Shinagawa-ku

NOF Technoport Kamata Center Building

Tokyo

09

Suburban TokyoNOF Toyo-cho Building

13

11

02

Central Tokyo
01 Shinjuku Nomura Building
02 JAL Building
03 NOF Nihonbashi Honcho Building
04 Tennozu Park Side Building
05 NOF Shibuya Koen-dori Building
06 Secom Medical Building
07 NOF Shiba Building27

08 Nishi-Shinjuku Showa Building
09 NOF Tameike Building
10 NOF Shinagawa Konan Building
11 NOF Surugadai Plaza Building
12 Hatchobori NF Building
13 NOF Kanda Iwamoto-cho Building
14 NOF Minami Shinjuku Building

28 Utsunomiya
Tokyo

Other Regional Cities

Suburban TokyoNOF Toyo-cho Building 15

Sapporo North Plaza

Sapporo City, Hokkaido

13,623.94

Jun. 1, 2006

6,820

2.1

JCB Sappro Higashi Building

Sapporo City, Hokkaido

9,062.04

Feb. 8, 2008

3,700

1.2

Kita-Sanjo Building

Sapporo City, Hokkaido

5,060.45

Sep.28, 2007

3,430

1.1

NOF Sendai Aoba-dori Building

Sendai City, Miyagi

6,165.00

Nov. 30, 2005

3,200

1.0

NOF Utsunomiya Building

Utsunomiya City, Tochigi

5,887.40

Dec. 5, 2003

2,970

0.9

NOF Nagoya Yanagibashi Building

Nagoya City, Aichi

4,655.74

Sep. 29, 2005

3,550

1.1

Omron Kyoto Center Building

Kyoto City, Kyoto

34,616.84

Mar. 20, 2007

23,700

7.5

SORA Shin-Osaka 21

Osaka City, Osaka

21,653.31

Apr. 25, 2008

19,251

6.1

NOF Shin-Yokohama Building 22

NOF Midosuji Building

Osaka City, Osaka

12,240.88

Nov. 30, 2005

12,900

4.1

Yokohama Odori Koen Building 23

Nomura Osaka Building

Osaka City, Osaka

16,977.79

Dec. 5, 2003

6,410

2.0

Nomura Yotsubashi Building

Osaka City, Osaka

11,558.68

Dec. 5, 2003

3,940

1.2

NOF Kobe Kaigan Building

Kobe City, Hyogo

6,425.16

Dec. 5, 2003

3,280

1.0

Hiroshima Tatemachi NOF Building

Hiroshima City, Hiroshima

4,432.02

Nov. 30, 2005

2,100

0.7

Nomura Hiroshima Building

Hiroshima City, Hiroshima

7,906.92

Dec. 5, 2003

1,930

0.6

Total Other Regional Cities (14 Properties)

160,266.17

97,181

30.6

Grand Total (37 Properties)

395,330.99

317,440100.0

Note: The Company owns “Secom Medical Building,” “Toho Edogawabashi Building,” “Crystal Park Building,” “Yokohama Odori Koen Building,” “JCB Sapporo Higashi
Building,” “Kita-Sanjo Building” and “SORA Shin-Osaka 21” as real estate, and other properties in the form of beneficial interest in real estate trusts.
Note: “Ratio” refers to the ratio of each asset based on acquisition price to the entire portfolio (total of 37 properties). As the figures in the above table have been rounded to
the first decimal place, the total may not be 100.0%.
Note: Shinjuku Nomura Building is held through the quasi co-ownership of beneficial interest in real estate trust. The Company holds 50.1% of the quasi co-ownership. Total
leasable floor space and acquisition price in the above table indicates the figures related to the quasi co-ownership.
Note: NOF transferred a part of the land of NOF Technoport Kamata Center Building (co-owned area) on August 31, 2007. The acquisition price on the list is the amount
subtracting a book price of the asset to be transferred (13 million yen, rounded down to the nearest million yen) from the acquisition price before the transfer (6,430
million yen). The number of amount below unit is truncated.
Note: Although the name of “JCB Sapporo Higashi Building” is “Sapporo Higashi Building” as of now, it will be altered hereafter.

10

SendaiShin-Osaka

36
37 Hiroshima
Fukuoka

31 30
Kyoto

35

32
33
34

NagoyaNOF Technoport Kamata Center Building 16

29

Toho Edogawabashi Building 17
Crystal Park Building 18

Shin-Yokohama

Faret Tachikawa Center Square 19
NOF Kawasaki Higashiguchi Building 20
NOF Yokohama Nishiguchi Building 21

Saitama19
Tachikawa

Other Regional Cities
24 Sapporo North Plaza
25 JCB Sappro Higashi Building
26 Kita-Sanjo Building
27 NOF Sendai Aoba-dori Building
28 NOF Utsunomiya Building
29 NOF Nagoya Yanagibashi Building
30 Omron Kyoto Center Building
31 SORA Shin-Osaka 21

32 NOF Midosuji Building
33 Nomura Osaka Building
34 Nomura Yotsubashi Building
35 NOF Kobe Kaigan Building
36 Hiroshima Tatemachi NOF Building
37 Nomura Hiroshima Building

HachiojiTokyo

Kichijoji

15

18

Shin-Kiba

22

Kanagawa

Chiba

17

16

Kawasaki

20
21 Yokohama
2311

Major Properties
02

01

06

03

07

05

04

09

02 JAL Building
2-4-11 Higashi-Shinagawa, Shinagawa-ku, Tokyo

05 NOF Shibuya Koen-dori Building
20-17 Udagawa-cho, Shibuya-ku, Tokyo

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

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

04 Tennozu Park Side Building
2-5-8 Higashi-Shinagawa, Shinagawa-ku, TokyoNOF Nihonbashi Honcho Building 03
2-7-1 Nihonbashi Honcho, Chuo-ku, TokyoNOF Shiba Building 07
4-2-3 Shiba, Minato-ku, TokyoNOF Tameike Building 09
1-1-14 Akasaka, Minato-ku, Tokyo

12

13

Major Properties
19

15

10

11

19 Faret Tachikawa Center Square
2-36-2 Akebono-cho, Tachikawa City, Tokyo

10 NOF Shinagawa Konan Building
1-2-5 Higashi-Shinagawa, Shinagawa-ku, Tokyo

30

16

NOF Toyo-cho Building 15
1-6-35 Shinsuna, Koto-ku, TokyoNOF Technoport Kamata Center Building 16
2-16-1 Minami-Kamata, Ota-ku, TokyoNOF Surugadai Plaza Building 11
2-5-12 Kanda Surugadai, Chiyoda-ku, Tokyo

14

24

30 Omron Kyoto Center Building
801 Minami Fudodo-cho, Horikawa Higashi-iru,
Shiokoji-dori, Shimogyo-ku, Kyoto City, Kyoto

24 Sapporo North Plaza
4-2-2 Kitaichijo-Nishi, Chuo-Ku, Sapporo City, Hokkaido

20

22

21

NOF Kawasaki Higashiguchi Building 20
3-1 Ekimae-Honcho, Kawasaki-ku, Kawasaki City, Kanagawa

NOF Yokohama Nishiguchi Building 21
1-11-11 kita-Saiwai, Nishi-ku, Yokohama City, Kanagawa

NOF Shin-Yokohama Building 22
2-15-16 Shin-Yokohama, Kohoku-ku, Yokohama City, Kanagawa

15

Major Properties
34

Performance Report
35

29

Contents
Asset Management Report . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

34 Nomura Yotsubashi Building
1-4-4 Awaza, Nishi-ku, Osaka City, Osaka

Profile of the Company

NOF Kobe Kaigan Building 35. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Status of Investment Assets of the Company

3 Kaigan-dori, Chuo-ku, Kobe City, Hyogo

Capital Expenditures

29 NOF Nagoya Yanagibashi Building. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Expenses and Liabilities

1-16-28 Meieki-Minami, Nakamura-ku, Nagoya City, Aichi. . . . . . . . . . . 25

. . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

Trading during the Ninth Fiscal Period . . . . . . . . . . . . . . . . . 32
NOF Nagoya Yanagibashi Building

16

Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

17

Asset Management Report
1. CHANGES IN KEY INDICATORS

2. OUTLINE OF INVESTMENTS IN THE NINTH FISCAL PERIOD
9th Period

8th Period

7th Period

6th Period (Note 10)

5th Period

from Nov. 1, 2007
to Apr. 30, 2008

from May 1, 2007
to Oct. 31, 2007

from Nov. 1, 2006
to Apr. 30, 2007

from May 1, 2006
to Oct. 31, 2006

from Nov. 1, 2005
to Apr. 30, 2006

¥ mln

12,183

11,968

11,09010,739

9,810

¥ mln

12,183

11,958

11,09010,739

9,810

¥ mln

6,359

6,243

5,953

5,556

5,251

¥ mln

5,213

5,190

4,805

4,619

4,257

Operating Income

¥ mln

5,823

5,725

5,137

5,182

4,558

Current Profits

¥ mln

4,500

4,486

4,466

4,230

3,597

Net Income

¥ mln

4,499

4,486

4,466

4,229

3,596

Total Assets¥ mln

353,730

326,711315,402

288,060

268,559%(+8.3)(+3.6)(+9.5)(+7.3)(+12.3)

Interest-Bearing Debts¥ mln

165,700

140,000

130,000

106,000

120,000

Net Assets¥ mln

161,267

161,272

161,221161,004

128,206

Operating Revenuesof which Real Estate Rental Revenues
Operating Expenses
of which Real Estate Rental Expenses(Changes from Previous Period)(0.0)(+0.0)(+0.1)(+25.6)(+0.1)

Unitholders’ Capital¥ mln

156,767

156,767

156,767

156,767

124,610

Number of Units Issued

Units265,903

265,903

265,903

265,903229,970¥

606,488606,510606,315

605,499

557,492

¥ mln

4,499

4,498

4,453

4,229

3,596

(Changes from Previous Period)

Net Assets per Unit
Total Cash Distribution
Cash Distribution per Unit%¥

16,923

16,91816,75015,905

15,638of which Cash Distribution of Profits¥

16,923

16,91816,75015,905

15,638of which Cash Distribution in excess of Profits

¥

—

—

—

—

—

ROA (Return on Assets) (Note 1)

%

1.3

1.4

1.5

1.5

1.4

Annualized ROA (Note2)

%

2.7

2.8

3.0

3.0

2.9

ROE (Return on Equity) (Note 3)

%

2.8

2.8

2.8

2.7

2.8

Annualized ROE (Note 2)

%

5.6

5.5

5.6

5.4

5.7

Capital Adequacy Ratio (Note 4)

%

45.6

49.4

51.1

55.9

47.7

%

(3.8)(1.7)(4.8)(+8.2)(5.9)LTV (Loan-to-Value) (Note 5)

%

46.8

42.9

41.2

36.8

44.7

Number of Operating Days

days

182

184

181

184

181

Payout Ratio (Note 6)

%

99.9

100.2

99.7

99.9

100.0

(Changes from Previous Period)

Number of Properties Held

bldgs

37

34

31

30

28

Total Leasable Floor Spacem2

395,330.99

362,773.62

350,712.00

316,132.49

293,464.10

583

533

517

512

467

Number of Tenants
Occupancy Ratetenants
%

97.6

97.9

98.5

98.2

98.4

Depreciation

¥ mln

1,601

1,518

1,478

1,471

1,399

Capital Expenditures

¥ mln

1,346

1,252

757

588

934

NOI (Net Operating Income) (Note 7)

¥ mln

8,572

8,286

7,763

7,591

6,952

FFO (Funds from Operation) (Note 8)

¥ mln

6,134

6,039

5,985

5,739

5,034

¥

23,06922,71422,50921,58521,889FFO per Unit (Note 9)

Note 1: “ROA (Return on Assets)” = Current Profits / {(Total Assets at the beginning of the period + Total Assets at the end of the period) / 2} x 100
As for the 6th period, the Total Assets were time-adjusted due to the additional issuance of investment units.
Note 2: “ROA” and “ROE” are annualized using the following number of operating days. 5th period: 181 days, 6th period: 184 days, 7th period: 181 days, 8th period: 184 days,
and 9th Period: 182 days.
Note 3: “ROE (Return on Equity)” = Net Income / {(Net Assets at the beginning of the period + Net Assets at the end of the period) / 2} x 100
As for the 6th period, Net Assets is time-adjusted due to the additional issuance of investment units.
Note 4: “Capital Adequacy Ratio” = Net Assets / Total Assets x 100
Note 5: “LTV (Loan-to-Value)” = Interest-Bearing Debts / Total Assets x 100
Note 6: Rounded off to the first decimal place.
Note 7: “NOI (Net Operating Income)” = Real Estate Rental Revenues – Real Estate Rental Expenses + Depreciation
Note 8: “FFO (Funds from Operation) = Net Income + Depreciation + Amortization of Investment Corporation Bonds Issuance Costs – Real Estate Sale Profit/Loss
Note 9: “FFO per Unit” = FFO / Number of Units Issued
Note10: Accounting Standard for Presentation of Net Assets in the Balance Sheet” (Statement No. 5 issued by the Accounting Standards Board of Japan on December 9, 2005)
and the “Financial Accounting Standard Implementation Guidance” (Statement No. 8 issued by the Accounting Standards Board of Japan on December 9, 2005) havebeen implemented from the 6th period.

18

Nomura Real Estate Office Fund, Inc., incorporated on August 7, 2003 under the Law Concerning Investment Trusts andInvestment Corporations of Japan, listed the unit certificates in the Real Estate Investment Trust (REIT) Market of the Tokyo
Stock Exchange on December 4, 2003 (TSE code 8959). The Company’s basic investment policy is to assure stable income
from, and steady growth of, investment assets over the mid- to long-term. In accordance with this policy, we invest inproperties mostly for office use in three largest conurbations and other major cities, or in property-backed securities that arebacked by such properties.
Note: The Law Concerning Investment Trusts and Investment Corporations of Japan (Law No. 198 of 1951) is referred to as the “Investment Trust Law” hereinafter.
The term “unit certificates” are the securities issued by the Company and may be referred to as “investment units” or “units” hereinafter.
The term “investment assets” refers to those assets that belong to the Company.
Unless otherwise stated, for the purpose of this report, the concept of “property(ies)” is construed to include leasehold and superficies.
The term “property(ies)” refers to those assets defined in Section 27, Paragraph 1, Article (1) and (2), and “property-backed securities” refers to those assets defined in
Section 27, Paragraph 1, Article (3) respectively of the Articles of Incorporation of the Company.
The terms “property(ies)” and “property-backed securities” are collectively referred to as “property-related assets” hereinafter.
The properties and underlying properties of the property-related assets are collectively referred to as the “investment properties.”(1) Market Environments
During this period, the Japanese economy maintained a moderate recovery trend, with continued increase of capital
expenditure and improvement in employment and income environments supported by sustained strength in corporate
earnings.
However, in the environment surrounding real estate securitization market, the equity market including J-REITs
market continued to languish as the credit crunch accelerated, partly due to the effect of the subprime loan problems.
In addition, while the real estate investment market was refined by the implementation of the Financial Instruments
and Exchange Law, the prolonged building authorization procedures under the amended Building Standard Law caused asignificant impact to the real estate sector.
(a) Office Leasing Market
The office leasing market remained solid during the ninth fiscal period, as the demand for office space continued tobe sound along with the moderate Japanese economic recovery.
In Tokyo and other metropolitan areas, large-scale properties with superior convenience remain nearly fully
occupied. The office supplies continued to be tight, due to factors such as the stable demand for office space bycorporations and the relatively low number of new completions. Under these circumstances, overall level of rents ofoffice buildings continues to rise, with new asking rents continuing to surge, and rent increase for existing tenants
expanding smoothly, filling the gap between market rents and existing rents.
On the other hand, office market conditions appear to be easing for some of the regional cities that areexperiencing prolonged economic weakness as well as for those experiencing resurgence of new completions fromrecovery of regional economy. However, prime properties located in central business districts continue to enjoy
stable occupancy.
(b) Real Estate Sales Market
The real estate sales market during the ninth fiscal period saw an increase in the number of properties being sold, byreal estate funds facing refinancing due to the change in environment such as implementation of the Financial
Instruments and Exchange Law (Law No. 25 of 1948) and stricter lending practices by financial institutions, as well as
by real estate companies seeking to lock in profits by asset sales towards the fiscal year end.
On the other hand, the number of buyers decreased for the same reasons, and the tightness of profitable realestate sales market appear to be peaking out.
Nonetheless, large properties with central metropolitan location in particular continue to be difficult to acquire, as
they rarely become available due to the significant advantage in holding such properties against the backdrop of solid
trend in the office leasing market.
(2) Status of Managements for the Ninth Fiscal Period
To comply with the basic policy of acquiring only such properties that would generate stable cash flow over the mid- tolong-term, the Company continues to invest in properties with strong competitiveness both in terms of locations andbasic building features.
During the ninth fiscal period, we have proactively collected information in accordance with the above-mentioned
basic policy. As a result of careful investigation of a number of investment opportunities which obtained throughcollaboration with Nomura Real Estate Group, and the utilization of an asset management company’s own information
pipeline, we made new investments on JCB Sapporo Higashi Building (Chuo-ku, Sapporo City, ¥3.7 billion, real estate) in
February, 2008, Toho Edogawabashi Building (Bunkyo-ku, Tokyo, ¥2.08 billion, real estate) in March, 2008, SORA Shin-

19

Osaka 21 (Yodogawa-ku, Osaka City, ¥19.2 billion, real estate) in April, 2008, and NOF Tenjin-Minami Building (Chuo-ku,
Fukuoka City, ¥3.7~4.1 billion, beneficial interest in real estate trust). Concerning NOF Tenjin-Minami Building, theCompany has executed the agreement on purchase and sale of the trust beneficial interest and will acquire the Propertyon the date to be mutually agreed by March, 2009 between the Company and the Seller.
As a result of the above acquisition, the Company’s total assets under management (“portfolio”) as of the end of theninth fiscal period (April 30, 2008) has reached 37 properties totaling ¥317.4 billion (total acquisition price). We havesteadily increased the size of the portfolio, while seeking diversification of the assets.
In property management, we continued to focus on the growth of portfolio revenue (or internal growth of portfolio),
improved the level of satisfaction of the existing tenants through conducting the strategic renewals, and held proactive
rent negotiation reflecting the favorable rental market for property owners. For prospective tenants, we implemented
strategic marketing especially for properties in regional cities with room for improvement of occupancy. As a result, theaverage occupancy rate stayed stably around 98% throughout this period, reaching 97.6% at the end of the period.
Furthermore, approximately 47% of leases renewed with existing tenants during this period agreed to upwardrevision of rent, continuing the favorable performance from the previous period (50%).
Reflecting these results, the appraisal value of portfolio at the end of the period was ¥399.6 billion, up 2.1% from theprevious period. (Appraisal value at the end of the eighth period was used for the 34 properties held at the end of theeighth period, and appraisal price at the time of acquisition was used for the other properties acquired during the ninth
period.)Note 1:

Note 2:
Note 3:Note 4:“Nomura Real Estate Group” refers to a corporate group consisting of the consolidated subsidiaries of Nomura Real Estate Holdings, Inc. (referred to as Nomura
Real Estate Holdings hereinafter) including Nomura Real Estate Development Co., Ltd. but excluding Nomura Real Estate Asset Management Co., Ltd. (referred
to as the Asset Management Company hereinafter).
Although the name of “JCB Sapporo Higashi Building” is “Sapporo Higashi Building” as of April 30, 2008, it will be altered to the name mentioned hereafter.
Concerning the acquisition price of “NOF Tenjin-Minami Building”, it has not been determined as of April 30, 2008 as it will be determined within ¥3,750~4,100
million depending on the seller’s leasing status according to the agreement on purchase and sale of the trust beneficial interest.
The “trust beneficial interest in real estate” refers to a beneficial interest arising from a trust in which real estates are the primary underlying assets.

(3) Status of Funding
Concerning funding through interest-bearing debts, the Company has the basic financial policy of funding throughpromotion of long-term, diversified and fixed interest rate debts, for the purpose of securing financial stability andavoiding future interest rate risks. Based on this policy, the Company has implemented funding through long-term debts
and issuance of investment corporation bonds, while establishing a total of ¥40 billion of commitment line for the
purpose of flexible funding at the time of property acquisition and reduction of refinancing risks, from the perspective ofsecuring stable funding base.
During the ninth fiscal period, further diversification of funding methods have been achieved, including establishmentof the program for maximum issuance authority of ¥30 billion short-term investment corporation bonds (a financial tool
legalized last year) which resulted in ¥20 billion issuance for the acquisition of “SORA Shin-Osaka 21.” Including otherterm loan borrowings, total interest-bearing debts as of the end of ninth fiscal period was ¥165.7 billion.

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

Aug. 7, 2003
Dec. 4, 2003
May 19, 2004
Jun. 16, 2004
May 1, 2005
May 24, 2005
May 25, 2006
Jun. 23, 2006
Note 1:
Note 2:
Note 3:Note 4:Note 5:Note 6:Note 7:Note 8:Type of Issue

Initial private placement (Note 1)
Public offering (Note 2)
Public offering (Note 3)
Third-party allotment (Note 4)
Public offering (Note 5)
Third-party allotment (Note 6)
Public offering (Note 7)
Third-party allotment (Note 8)

Change400
148,200
35,0001,050
44,0001,320
34,8001,133

Balance400
148,600
183,600
184,650
228,650
229,970
264,770
265,903

Unitholders’ Capital (¥ mln)
Change200
71,506
19,866595
31,496944
31,143
1,013

Balance200
71,706
91,572
92,168
123,665
124,610
155,753
156,767

Initial private placement at the offer price of ¥500,000 per unit to incorporate the Company.
Public offering at the offer price of ¥500,000 (issue price of ¥482,500) to finance acquisition of new properties.
Public offering at the offer price of ¥588,000 (issue price of ¥567,600) to finance acquisition of new properties and to repay borrowings.
Third-party allotment to Nomura Securities Co., Ltd. at the offer price of ¥567,600 following the public offering on May 19, 2004.
Public offering at the offer price of ¥740,782 (issue price of ¥715,837) to finance acquisition of new properties and to repay borrowings.
Third-party allotment to Nomura Securities Co., Ltd. at the offer price of ¥715,837 following the public offering on May 1, 2005.
Public offering at the offer price of ¥926,100 (issue price of ¥894,915) to finance acquisition of new properties and to repay borrowings.
Third-party allotment to Nomura Securities Co., Ltd. at the offer price of ¥894,915 following the public offering on May 25, 2006.

The details of changes in the number of units issued and unitholder’s capital until the end of the ninth fiscal period is asshown in the above table. However, based on the resolutions adopted by the board meeting held on May 8, 2008 and May

20

20, 2008, the Company issued 37,000 units by public offering and 2,220 units by third-party allotment as described in “6.
Important Events Subsequent to the Fiscal Period” hereinafter. The payment concerning the investment units issued by the
public offering and third-party allotment have been completed on May 27, 2008 and June 24, 2008 respectively.
[Changes in Price at the Tokyo Stock Exchange]
Changes in prices of the Company’s investment units listed on the Tokyo Stock Exchange are as follows.

High
Low

(¥)
(¥)

9th Period

8th Period

7th Period

6th Period

5th Period

from Nov. 1, 2007
to Apr. 30, 2008

from May 1, 2007
to Oct. 31, 2007

from Nov. 1, 2006
to Apr. 30, 2007

from May 1, 2006
to Oct. 31, 2006

from Nov. 1, 2005
to Apr. 30, 2006

1,200,000
655,000

1,540,000
935,000

1,560,000
956,000

1,040,000
803,000

1,030,000
778,000

4. CASH DISTRIBUTION
In order to qualify for special tax treatment under Article 67-15 of the Special Taxation Measures Law (Law No. 26 of 1957)
to have maximum cash distribution amount treated as deductible dividends, the Company distributed the entire
unappropriated retained earnings except for fractional amounts smaller than one yen per each investment unit. As a result,the amount of cash distribution per unit for this fiscal period was ¥16,923.

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

9th Period

8th Period

7th Period

6th Period

5th Period

from Nov. 1, 2007
to Apr. 30, 2008

from May 1, 2007
to Oct. 31, 2007

from Nov. 1, 2006
to Apr. 30, 2007

from May 1, 2006
to Oct. 31, 2006

from Nov. 1, 2005
to Apr. 30, 2006

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

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

4,466,301
12,426
4,453,875(16,750)
4,453,875(16,750)—(—)

4,229,293
106
4,229,187(15,905)
4,229,187(15,905)—(—)

3,596,294
23
3,596,270(15,638)
3,596,270(15,638)—(—)

5. INVESTMENT POLICY AND FUTURE ISSUES(1) Investment Environments
For the time being, the effect of possible slowing of the US economy caused by the subprime loan problems, stronger
yen, and surging oil or other resource prices on corporate earnings which directly affect office demands, needs to be
determined.
Office leasing market in metropolitan Tokyo and other large cities are expected to see stable occupancy and rental
levels for the foreseeable future, against the backdrop of continued growth in corporate demands for expansion of spaceand establishment of new offices, supported by the positive business performance and growth in employment. In otherregional cities, although stable demand for office space is expected, supply conditions for each submarket must be
determined separately, as some cities are experiencing increase in new completions along with economic recovery.
As to the real estate sales market, although easing of the market is becoming apparent in some parts, overall
tightness in the market including for superior metropolitan properties is not expected to resolve quickly. Therefore, thetrend of cap rates and property liquidity caused by the changes in lending practices of the financial institutions and in thecapital market environment such as interest rate hikes, demands attention.
(2) Investment Policy and Future Issues
With such environments in mind, the Company will employ the following investment policies to ensure stable income
from, and steady growth of the portfolio over the mid- to long-term.
(a) Property Management in a Mid- to Long-Term View
In addition to enhancement of property management to satisfy the requirements of existing tenants, proper
recognition of the property features and market environments will help us market the potential tenants moreorganically. We will maintain and uplift the occupancy rate and level of rents in pursuit of sustainable and improved
profitability of portfolio, namely internal growth of portfolio, over the mid- to long-term.
By putting the know-how of Nomura Real Estate Group together, we seek to design the most suitablespecifications of how to manage and maintain each property in the most effective way, which in turn will ensurestable inflow of revenues.
In order to ensure stable revenues over the mid- to long-term, we will carry out strategic refurbishment andrenovation works to maintain and/or improve features of the properties, establishing their uniqueness and increasing
their competitiveness.

21

Profile of the Company(b) Continuation of Conservative Financial Policy
In order to assure stable financing capability and increase creditworthiness in the market over the mid- to long-term,
we will pay particular attention to debt finance. We will seek to continuously keep the LTV low by using more longterm funding at fixed rates, diversifying the repayment dates, and increasing the number of institutions we bank with.
We will closely monitor the conditions of financial markets, and carefully deliberate and choose the best means offunding, including the usage of commitment lines, issuance of investment corporation bonds and short-term
investment corporation bonds from a wide range of available sources of funding to ensure a well-balanced structureof interest-bearing debts.

1. STATUS OF UNITHOLDERS’ CAPITAL
9th Period

8th Period

7th Period

6th Period

5th Period(as of Apr. 30, 2008)(as of Oct. 31, 2007)(as of Apr. 30, 2007)(as of Oct. 31, 2006)(as of Apr. 30, 2006)

Maximum number of units allowed to issue Unit

2,000,000

2,000,000

2,000,000

2,000,000

2,000,000

Number of units issued

Unit

265,903

265,903

265,903

265,903229,970

Amount of unitholders’ capital¥ mln

156,767

156,767

156,767

156,767

124,610

11,12011,492

12,50015,205

13,129Number ofUnits HeldPortion in
the Total
Units Issued (%)

Number of unitholders

Note: “LTV (Loan-to-Value)” refers to ratio of interest-bearing debts over the total assets.

(c) Enlargement of Portfolio by Acquisition of New Properties
We will aim to increase the revenue by enlarging the size of the portfolio up to ¥500 billion in the medium term. The
larger the scale of the portfolio, the easier it will be to promote further diversity of investment, which in turn will
decrease the potential fluctuations in revenue, and enable us to control the cost of management and/or
administration more effectively.
We do not think it is wise to engage in overly heated competition in acquiring investment properties. In order for
us to make right investments in properties of good value, we need to collect information earlier about the investment
properties offered in the market, and conduct an in-depth due diligence to assess the potential risks involved in suchinvestments. To make this protocol function and increase the trading opportunities for us, we will improve our own
information-collecting capacity in cooperation with other companies of Nomura Real Estate Group. By combining theprofessional know-how such as market research and engineering organically, we believe we can strengthen ourability to appraise the properties and establish further creditworthiness in the market.
In making an investment decision, we will adhere to strict rules to ensure that the new property will bring stablerevenues to the entire portfolio in the light of mid- to long-term perspective.

6. IMPORTANT EVENTS SUBSEQUENT TO THE NINTH FISCAL PERIOD
The significant post-balance sheet events that took place after the end of the ninth fiscal period are as follows.
(1) Additional Issuances of Investment Units
The Company resolved to issue 37,000 units of new investment units through a primary offering, and 2,220 new
investment units (maximum) through a third-party allotment, at the Board of Directors’ meetings held on May 8, 2008,
and May 20, 2008. For those additional new investment units issued, payments were completed on May 27, 2008 andJune 24, 2008. As a result, the total unitholders’ capital is 185,455,446,935 yen, and the number of investment units
issued is 305,123 units.
(a) Primary offering of new investment units (Public offering)Number of units issued:
37,000 units
Total offering price:¥27,992,720,000 (¥756,560 per unit)
Total issue price:¥27,064,390,000 (¥731,470 per unit)
Payment date:
May 27, 2008
Initial date for dividend accrual:
May 1, 2008(b) Third-party allotment
Number of units issued:
Total issue price:
Payment date:
Initial date for dividend accrual:
Third-party allottee:

2. MATTERS CONCERNING THE INVESTMENT UNITS
The 10 largest unitholders as of April 30, 2008 were as follows.
Name(Unit)

Japan Trustee Service Bank, Ltd. (Trust Accounts)

20,228

7.61

NikkoCiti Trust and Banking Corp. (Trust Accounts)

19,686

7.40

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

16,742

6.30

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

16,111

6.06

Nomura Real Estate Development Co., Ltd.

13,326

5.01

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

7,162

2.69

Kawasaki Gakuen

7,000

2.63

North Pacific Bank, Ltd.

5,902

2.22

The State Street Bank and Trust Company

5,829

2.19

The Bank of Ikeda, Ltd.

5,229

1.97

117,215

44.08

Total

3. BREAKDOWN OF UNITHOLDERS
The breakdown of unitholders as of April 30, 2008 was as follows.
Number ofUnitholders

Portion (%)

10,506

94.5

25,670

9.7

Financial institutions (Including securities companies)

156

1.4

151,679

57.0

Other domestic corporate investors

184

1.7

25,363

9.5

Private and other investors

Foreign corporate investors, etc.
Total

Number of Units
per Unitholder

Portion (%)

274

2.5

63,191

23.8

11,120100.0

265,903100.0

2,220 units¥1,623,863,400 (¥731,470 per unit)
June 24, 2008
May 1, 2008
Nomura Securities Co., Ltd.

(c) Use of Proceeds
The net proceeds shall be used for the redemption of short-term investment corporation bonds (¥20.0 billion) and therepayment of short-term borrowings.

22

23

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

1. COMPOSITION OF ASSETS
9th Period (as of Apr. 30, 2008)

8th Period (as of Oct. 31, 2007)

Total AmountPortionTotal AmountPortion(¥ mln) (Note 2)(%) (Note 3)(¥ mln) (Note 2)(%) (Note 3)

11,4203.2

11,465

3.5

Suburban Tokyo

8,754

2.5

6,690

2.0

Other Regional Cities

26,680

7.5

3,446

1.1

Central Tokyo

164,82346.6

165,066

50.5

Suburban Tokyo

34,306

9.7

34,37910.5

71,01320.1

70,80421.7

316,99989.6

291,853

89.3

Name of directors and an auditor in the ninth fiscal period are as follows (Note 1).
Title

Executive Director

Name

Mitsuharu Sato

Other Major Title(s)Corporate Auditor, Nomura Real Estate Holdings, Inc.
Corporate Auditor, Nomura Real Estate Development Co., Ltd.

2,400

Supervisory Director

Shuhei Yoshida

Representative Lawyer, Yoshida Shuhei Law Office

2,400Supervisory Director

Eitoku Aikawa

Counsellor, Fair Appraisers, K.K.

2,400

Supervisory Director

Saneaki IchijoPartner, Anderson Mori & Tomotsune Law Firm

2,400

Supervisory Director

Motoharu Yokose

Advisor, Asahi Tax Partners

2,400

Accounting Auditor

Earnst & Young ShinNihon LLC––

12,000Note 1:
Note 2:No Executive Directors or Supervisory Directors are in possession of the Company’s investment units either under their own or other person’s name. Supervisory
Directors might serve as directors of other companies, but there are no mutual business interests whatsoever between such companies and the Company.
At the third General Unitholders’ Meeting held on July 23, 2007, Mr. Atsushi Ogata, Director of the Asset Management Company, Nomura Real Estate AssetManagement Co., Ltd., has been appointed as substitute Executive Director, to provide against vacancy of the Executive Director’s position or lack of statutory
quorum.

Area (Note 1)

Type of Assets

Total Amount of Fees Paid
during the 9th Period (¥000)

Central Tokyo
Real estate

Real estate in trust

Other Regional Cities
SubtotalCash, deposits and other assets
Grand Total
Note 1:
Note 2:
Note 3:36,731

10.4

34,85810.7

353,730100.0

326,711

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

5. ASSET MANAGEMENT COMPANY, CUSTODIANS AND ADMINISTRATORS
Asset Management Company, custodians and administrators as of April 30, 2008 are as follows:Business

Company Name(s)Asset Management Company

Nomura Real Estate Asset Management Co., Ltd.

Custodian of assets

Mitsubishi UFJ Trust and Banking Corporation

Custodian of unitholders’ register

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

Administrative agent (accounting, etc.)

Mitsubishi UFJ Trust and Banking Corporation

Administrative agent (investment corporation
bonds)The Bank of Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Banking Corporation,
Nomura Securities Co., Ltd., Nikko Citigroup Limited, Mizuho Securities Co., Ltd.

Administrative agent (short-term investment
corporation bonds)

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

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

2. BRIEF OF MAJOR PROPERTIES OWNED
The major components of assets (the 10 largest properties by book value) as of April 30, 2008 are as follows.
Book Value

Leasable Floor
Space (m2)

Leased Space

Occupancy Rate(¥mln)(m2)(%)

Shinjuku Nomura Bldg.

39,104

31,589.26

30,696.81

97.2

15.7

OfficeJAL Bldg.

33,38942,084.11

42,084.11

100.0(Note 1)

OfficeOmron Kyoto Center Bldg.

23,352

34,616.84

34,616.84

100.0(Note 1)

OfficeNOF Nihonbashi-Honcho Bldg.

20,582

19,233.25

19,233.25

100.0

7.2

OfficeSORA Shin-Osaka 21

19,41021,653.31

20,604.10

95.2

0.2

OfficeTennozu Park Side Bldg.

13,61918,051.60

18,051.60

100.0

6.4

OfficeNOF Midosuji Bldg.

12,903

12,240.88

11,415.98

93.3

4.0

OfficeNOF Shibuya Koen-dori Bldg.

12,5223,420.16

3,420.16

100.0

3.0

Secom Medical Bldg.

11,4208,821.24

8,821.24

100.0(Note 1)

OfficeMedical Office

NOF Shiba Bldg.

10,111

8,165.10

8,165.10

100.0

2.8

196,414

199,875.75

197,109.19

98.6

Name of Property

Total
Note 1:
Note 2:
Note 3:24

Portion of Rental
Revenues (%)

Primary Use(Note 2)

Office53.6(Note 3)Not disclosed due to compelling reasons.
Although this property is currently registered as “clinic/car park” on the registry book, it was originally designed to be used as offices. The Company’s Articles ofIncorporation allows us to invest in the non-office properties given that they can easily be converted into offices.
“Total” for “Portion of Rental Revenues” column include rental revenues for properties which do not disclose “Portion of Rental Revenues” due to unavoidable
reasons.

25

3. DETAILS OF PORTFOLIO PROPERTIESName of Property

Location(Postal Address)

Type ofOwnership

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

Appraisal Valueas of Apr. 30, 2008

Book Value(¥ mln) (Note 1)(¥ mln) (Note 2)

72,60039,10433,40033,38927,40020,582

22,90013,61914,00012,522Central Tokyo

Name of Property

Shinjuku Nomura Bldg. (Note 3)

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

JAL Bldg.

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

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

Tennozu Park Side Bldg.

2-5-8 Higashi-Shinagawa, Shinagawa-ku, TokyoNOF Shibuya Koen-dori Bldg.

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

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

Secom Medical Bldg.

7-7 Niban-cho, Chiyoda-ku, Tokyo (Note 5)

Real Estate

11,60011,420NOF Shiba Bldg.

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

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

10,900

10,111

Nishi-Shinjuku Showa Bldg.

1-13-12 Nishi-Shinjuku, Shinjuku-ku, TokyoNOF Tameike Bldg.

1-1-14 Akasaka, Minato-ku, TokyoNOF Shinagawa Kounan Bldg.

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

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

Hatchobori NF Bldg.

2-21-6 Hatchobori Chuo-ku, TokyoNOF Kanda Iwamoto-cho Bldg.

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

NOF Minami-Shinjuku Bldg.

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

10,400

8,752

8,470

7,634

6,980

5,479

7,260

5,100

3,210

3,167

3,900

3,101

2,980

2,258

236,000

176,243

9,020

7,128

NOF Technoport Kamata Center Bldg. 2-16-1 Minami-Kamata, Ota-ku, Tokyo

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

7,790

6,231

Toho Edogawabashi Bldg.

1-24-8 Sekiguchi, Bunkyo-ku, Tokyo

Real Estate

2,080

2,101

Crystal Park Bldg.

1-1-3 Gotenyama, Musashino City, Tokyo

Real Estate

4,290

3,670

Faret Tachikawa Center Square

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

5,660

3,048

10,300

9,523

7,933

5,022

Subtotal
Suburban TokyoNOF Toyo-cho Bldg.

1-6-35 Shinsuna, Koto-ku, TokyoNOF Shin-Yokohama Bldg.

2-15-16 Shin-Yokohama, Kohoku-ku, Yokohama City, Kanagawa

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

Yokohama Odori Koen Bldg.

2-4-1 Horai-cho, Naka-ku, Yokohama City, Kanagawa (Note 5)

Real Estate

NOF Kawasaki Higashiguchi Bldg. 3-1 Ekimae Honcho, Kawasaki-ku, Kawasaki City, Kanagawa (Note 5)
NOF Yokohama Nishiguchi Bldg. 1-11-11 Kita-Saiwai, Nishi-ku, Yokohama City, Kanagawa

Subtotal

4,530

3,352

2,870

2,982

54,47343,061Other Regional Cities
Interest in
4-2-2 Kitaichijo-nishi, Chuo-ku, Sapporo City, Hokkaido (Note 5) Beneficial
Real Estate Trust
JCB Sapporo Higashi Bldg. (Note 4) 1-1 Minamiichijo-Nishi, Chuo-ku, Sapporo City, Hokkaido (Note 5) Real Estate

Sapporo North Plaza
Kita-Sanjo Bldg.

3-1-25 Kitasanjo-nishi, Chuo-ku, Sapporo City, Hokkaido (Note 5) Real Estate

NOF Sendai Aoba-dori Bldg.

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

NOF Utsunomiya Bldg.

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

NOF Nagoya Yanagibashi Bldg.
SORA Shin-Osaka 21

1-16-28 Meieki-Minami, Nakamura-ku, Nagoya City, Aichi
801 Minami Fudodo-cho, Horikawa Higashi-iru, Shiokojidori, Shimogyo-ku, Kyoto City, Kyoto (Note 5)
2-1-3 Nishi-Miyahara, Yodogawa-ku, Osaka City, Osaka

NOF Midosuji Bldg.

3-5-7 Kawaramachi, Chuo-ku, Osaka City, Osaka

Nomura Osaka Bldg.

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

Nomura Yotsubashi Bldg.

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

NOF Kobe Kaigan Bldg.

3 Kaigan-dori, Chuo-ku, Kobe City, Hyogo (Note 5)

Omron Kyoto Center Bldg.

Hiroshima Tatemachi NOF Bldg. 1-20 Tatemachi, Naka-ku, Hiroshima City, Hiroshima
Nomura Hiroshima Bldg.

7,176

3,770

3,833

3,020

3,437

3,430

3,198

3,570

2,655

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

3,820

3,689

24,20023,352

Real Estate

18,60019,410Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust

14,90012,903

11,500

6,394

6,980

3,692

3,490

2,993

2,200

2,395

2,700

2,561

Subtotal

109,129

97,694Grand Total

399,602

316,999

Note 1:

Note 2:
Note 3:Note 4:Note 5:26

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

6,949“Appraisal Value as of Apr. 30, 2008” stands for the prices appraised by the estate surveyors in accordance with the provisions of the Company’s Articles ofIncorporation and the “Rules Concerning Calculations of Investment Corporations” (Cabinet Office Regulation No. 47 of 2006). The appraisal prices are calculated by
Tanizawa Sogo Appraisal Co., Ltd., HIRO & REAS Network, Inc., Appraisal Firm A-Square Co., Ltd., Japan Real Estate Institution, Daiwa Real Estate Appraisal, Co.,
Ltd., Morii Appraisal & Investment Consulting Inc., or Chuo Real Estate Appraisal Co., Ltd. using the capitalization approach, with the end of the ninth fiscal period, i.e.
April 30, 2008, being taken as the point of evaluation.
“Book Value” stands for the aggregate purchase price of lands, buildings, structures, machinery and equipments, tools and fixtures, and construction in progress,
owned directly or held in trust, less depreciation including expenses associated with these purchases.
The Company’s stake in this property is quasi co-ownership of 50.1% of entirety. The appraisal value and book value as of Apr. 30, 2008 accounted solely for the quasi
co-ownership.
Although the name of “JCB Sapporo Higashi Building” is “Sapporo Higashi Building” as of April 30, 2008, it will be altered to the name mentioned hereafter and thesame shall apply hereinafter.
Residential indication of the property is not available yet.

Central Tokyo
Shinjuku Nomura Bldg.
JAL Bldg.
NOF Nihonbashi-Honcho Bldg.
Tennozu Park Side Bldg.
NOF Shibuya Koen-dori Bldg.
Secom Medical Bldg.
NOF Shiba Bldg.
Nishi-Shinjuku Showa Bldg.
NOF Tameike Bldg.
NOF Shinagawa Kounan Bldg.
NOF Surugadai Plaza Bldg.
Hatchobori NF Bldg.
NOF Kanda Iwamoto-cho Bldg.
NOF Minami-Shinjuku Bldg.
Subtotal
Suburban TokyoNOF Toyo-cho Bldg.
Technoport Kamata Center Bldg.
Toho Edogawabashi Bldg.
Crystal Park Bldg.
Faret Tachikawa Center Square
NOF Kawasaki Higashiguchi Bldg.
NOF Yokohama Nishiguchi Bldg.
NOF Shin-Yokohama Bldg.
Yokohama Odori Koen Bldg.
Subtotal
Other Regional Cities
Sapporo North PlazaJCB Sapporo Higashi Bldg.
Kita-Sanjo Bldg.
NOF Sendai Aoba-dori Bldg.
NOF Utsunomiya Bldg.
NOF Nagoya Yanagibashi Bldg.
Omron Kyoto Center Bldg.
SORA Shin-Osaka 21
NOF Midosuji Bldg.
Nomura Osaka Bldg.
Nomura Yotsubashi Bldg.
NOF Kobe Kaigan Bldg.
Hiroshima Tatemachi NOF Bldg.
Nomura Hiroshima Bldg.
Subtotal
Grand Total
Note 1:

Note 2:
Note 3:Note 4:Note 5:Note 6:

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

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

82
1
12
15
3
1
9
21
13
4
1
8
8
5
183

97.2
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
87.9
100.0
100.0
100.0
100.0
98.9

1
13
7
10
17
27
31
3
14
123

100.0
87.7
100.0
100.0
100.0
98.8
100.0
100.0
94.0
97.2

40
1
18
29
24
12
1
20
15
27
17
32
25
16
277

87.8
100.0
95.6
100.0
99.6
100.0
100.0
95.2
93.3
99.1
97.8
93.8
80.0
96.0
96.4

583

97.6

1,917

15.7

(Note 2)

(Note 2)

871
784
366

7.2
6.4
3.0

(Note 2)

(Note 2)

339
321
224
253

2.8
2.6
1.8
2.1

(Note 2)

(Note 2)

105
153
104
6,744

0.9
1.3
0.9
55.4

(Note 2)

(Note 2)

426
12
131
238
333
257

3.5
0.1
1.1
2.0
2.7
2.1

(Note 2)

(Note 2)

110
1,999

0.9
16.4

338

2.8

(Note 2)

(Note 2)

116
170
172
144

1.0
1.4
1.4
1.2

(Note 2)

(Note 2)

20
486
533
324
176
97
207
3,439
12,183

0.2
4.0
4.4
2.7
1.4
0.8
1.7
28.2

(Note 6)100.0

at Period End
Number ofOccupancy
Tenants(Note 1)
Rate (%)

82
1
11
14
3
1
9
20
13
5
1
8
8
5
181

1,935

16.2

(Note 2)

(Note 2)

837
818
365

7.0
6.8
3.1

(Note 2)

(Note 2)

339
313
225
263

2.8
2.6
1.9
2.2

(Note 2)

(Note 2)

47
153
106

0.4
1.3
0.9

(Note 3)(Note 3)

1
100.0
14
100.0
—
—
11
100.0
17
100.0
26
95.7
31
100.0
3
100.0
1 (Note 4) 94.0 (Note 4)
104
99.1

(Note 2)

(Note 2)

455
—
131
242
322
253

3.8
—
1.1
2.0
2.7
2.1

(Note 2)

(Note 2)

44
91.6
—
—
10 (Note 5) 96.7 (Note 5)
28
95.6
24
97.3
11
91.3
1
100.0
—
—
16
100.0
28
100.0
18
100.0
29
87.5
24
77.6
15
92.4
248
96.5
533

95.3
100.0
97.3
100.0
100.0
100.0
100.0
93.9
100.0
100.0
100.0
100.0
100.0
100.0
98.6

RentalRevenues
Portion ofduring theRentalPeriod (¥ mln) Revenues (%)

97.9

21

0.2

(Note 3)(Note 3)

345
—
21
163
176
143

2.9
—
0.2
1.4
1.5
1.2

(Note 2)

(Note 2)

—
494
547
328
169
100
207

—
4.1
4.6
2.7
1.4
0.8
1.7

(Note 3)(Note 3)

11,958100.0(Note 6)In the case a master lease agreement is in place, in which the master tenant of the said lease agreement subleases a part or whole of the leased floor spaces to theend tenants, only the master tenant is counted as the number of tenants. In the case more than one space within the same building are leased by the same tenant,such spaces are combined to count for just one tenant. However, when the same tenant leased floor spaces in more than one building, such spaces are counted
separately for each building as if they are leased by different tenants. As for Shinjuku Nomura Building, the number of tenants in the entire building is taken into
account.
Not disclosed due to compelling reasons.
Subtotal of “Rental Revenues” and “Portion of Rental Revenues” for each area is not disclosed due to compelling reasons for the eighth fiscal period.
Former owner of the property had temporarily leased this property (building) entirely for the purpose of subleasing to the end-tenant by November 30, 2007.
Considering the foregoing, the occupancy rate as of end of eighth fiscal period in the above table indicates the occupancy rate based on leasing conditions with theend-tenant. Total number of end-tenants as of end of eighth fiscal period is 14.
Former owner of the property had temporarily leased part of this property (building) for the purpose of subleasing to the end-tenant by November 30, 2007.
Considering the foregoing, the occupancy rate as of end of eighth fiscal period in the above table indicates the occupancy rate based on leasing conditions with thetenants the Company is directly leasing to and end-tenants of according to the sublease by the former owners. Total number of end-tenants as of end of eighth fiscal
period (including direct tenants of the Company) is 17.
Grand Total includes those not disclosed due to compelling reasons.

27

4. OUTSTANDING AMOUNT AND CURRENT PRICE OF SPECIFIED TRANSACTIONS

2. CAPITAL EXPENDITURES DURING THE NINTH FISCAL PERIODThe outstanding amount and current price of the specified transactions as of April 30, 2008 are as follows.

The table below lists capital expenditures during the ninth fiscal period in conjunction with the major works of renovation.
During the period, we have conducted engineering works totalling ¥1,749 million: capital expenditures of ¥1,346 million andrepair expenses of ¥403 million combined all together.

Contract Amount (¥ mln) (Note 1)
Segment

Type of Transaction

Current Price

Longer than a Year(¥ mln) (Note 2)

Cost of Works

Interest rate swap
Transaction other than market transaction(Receiving floating-rate, paying fixed-rate)
Total
Note 1:
Note 2:56,00046,0001156,00046,00011

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

5. STATUS OF THE OTHER ASSETS
Other than the Trust Beneficial Interest and Real Estate listed in the table under the title “3. Details of Portfolio Properties”,
the Company had no other assets to integrate into the portfolio as at of April 30, 2008.

Capital Expenditures
1. PLAN OF CAPITAL EXPENDITURES

Shinjuku Nomura Bldg.
(Shinjuku-ku, Tokyo)

Renewal of exclusively owned area
(To increase revenues)

Estimated Period

From:
To:

Jul. 2008
Sep. 2008

Total

200

Paid during
9th Period—

Renewal of exclusively owned area
(To increase revenues)

From:
To:

Dec. 2007
Mar. 2008

134

Sapporo North Plaza(Chuo-ku, Sapporo City)

Renewal of air-conditioning system(To increase quality)

From:
To:

Nov. 2007
Dec. 2007

119

NOF Nagoya Yanagibashi Bldg.
(Nakamura-ku, Nagoya City)

Renewal of air-conditioning system(To increase quality)

From:
To:

Dec. 2007
Apr. 2008

62

NOF Midosuji Bldg.
(Chuo-ku, Osaka City)

Renewal of air-conditioning system and AHU(To increase quality)

From:
To:

Nov. 2007
Dec. 2007

45

Hiroshima Tatemachi NOF Bldg.
(Naka-ku, Hiroshima City)

Renewal of Entrance Hall
(To increase quality)

From:
To:

Nov. 2007
Dec. 2007

44

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

Renewal of air-conditioning system(To increase quality)

From:
To:

Nov. 2007
Apr. 2008

234

Other Properties

Improvement of features

From:
To:

Nov. 2007
Apr. 2008

703

From:
To:

May 2008
Oct. 2008

Sapporo North Plaza(Chuo-ku, Sapporo City)

Aseismic retrofitting(To increase quality) (Note 2)

From:
To:

May 2008
Aug. 2008

258

—

20

NOF Nagoya Yanagibashi Bldg.
(Nakamura-ku, Nagoya City)

Renewal of air-conditioning system(To increase quality) (Note 2)

From:
To:

May 2008
Jun. 2008

75

—

—

NOF Shiba Bldg.
(Minato-ku, Tokyo)

Renewal of air-conditioning system(To increase quality) (Note 2)

From:
To:

May 2008
Nov. 2008

93

—

—

NOF Technoport Kamata Center Bldg.
(Ota-ku, Tokyo)

Renewal of air-conditioning system(To increase quality)

From:
To:

Aug. 2008
Jan. 2010

400

—

—

196

—

—

Balance brought forward from the previous period

8th Period

7th Period

6th Period (10)5th Period

from May 1, 2007
to Oct. 31, 2007

from Nov. 1, 2006
to Apr. 30, 2007

from May 1, 2006
to Oct. 31, 2006

from Nov. 1, 2005
to Apr. 30, 2006

¥ mln

¥ mln

¥ mln

¥ mln

¥ mln

596

938

935

761

1,054

1,118

718

693

671

600

Amount used during the period

1,424

1,060

690

497

893

290

596

938

935

761

Balance brought forward to the next period

As for Shinjuku Nomura Building, the posted amount of cost represents 50.1%, our portion of quasi co-ownership, of the total cost of refurbishment of the entire
building.
These works have already been implemented as of the date of this report.

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

Amount reserved during the period

Expenses and Liabilities
1. EXPENSES RELATED TO ASSET MANAGEMENT
9th Period

8th Period

from Nov. 1, 2007
to Apr. 30, 2008

from May 1, 2007
to Oct. 31, 2007

¥000

¥000

Asset management fees (Note 1)

990,994

874,405of which Management Fee I

570,179

556,491

of which Management Fee II

327,802317,914of which Management Fee III

93,012—Custodian fees

26,001

25,577

General administrative fees

58,61459,671

Directors’ compensation

12,00010,800

Other expenses

58,986

81,9481,146,597

1,052,401

Total
Note 1:28

1,346

3. FUNDS RESERVED FOR THE LONG-TERM REPAIR PLANS—

Renewal of elevators(To increase quality) (Note 2)

Note 2:(¥ mln)Shinjuku Nomura Bldg.
(Shinjuku-ku, Tokyo)

Paid before
9th Period

NOF Nihonbashi-Honcho Bldg.
(Chuo-ku, Tokyo)

Note 1:

Period of Works

Subject to the long-term schedule for repairs and maintenance set down for each building, the Company has accounted forreserves from the operating cash flow to prepare for large-scale engineering works to be carried out in the future.

Estimated Cost (¥ mln) (Note 1)
Description of Works (Purpose)

Description of Works (Purpose)

Total

The table below lists major capital expenditures in conjunction with the refurbishment and/or renewal works scheduled forthe future (finished in part) on the properties held as of April 30, 2008. The estimated cost of works includes the amount tobe charged as “expenses” for accounting purposes.

Name of Property (Location)

Name of Property (Location)

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

29

2. STATUS OF BORROWINGS

Outstanding Outstanding
Financial Institutions

The status of borrowings from the financial institutions as of April 30, 2008 is as follows.
Outstanding Outstanding
Financial Institutions

Date
Borrowed

as of Apr. 30,
2008 (¥000)

Averageas of Oct. 31, Interest Rate
Date of2007 (¥000)(%) (Note 1)
Repayment

Short-term Borrowings
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
— 1,440,000
Sumitomo Mitsui Banking Corp.
—
800,000
The Mizuho Corporate Bank, Ltd. Aug. 9, 2007—
320,000
Mitsubishi UFJ Trust and Banking Corp.
—
320,000
Sumitomo Trust and Banking Co., Ltd.
—
320,000
The Bank of Tokyo-Mitsubishi UFJ, Ltd. Aug. 27, 2007
— 3,500,000
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
— 3,060,000
Sumitomo Mitsui Banking Corp.
— 1,700,000
The Mizuho Corporate Bank, Ltd. Sep. 27, 2007—
680,000
Mitsubishi UFJ Trust and Banking Corp.
—
680,000
Sumitomo Trust and Banking Co., Ltd.
—
680,000
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
1,000,000—
Sumitomo Mitsui Banking Corp.
1,000,000—
The Mizuho Corporate Bank, Ltd.
1,000,000—
Mitsubishi UFJ Trust and Banking Corp.
1,000,000—
Dec. 27, 2007
Sumitomo Trust and Banking Co., Ltd.
1,000,000—
The Chiba Bank, Ltd.
1,000,000—
The Iyo Bank, Ltd.
1,500,000—
The Chugoku Bank, Ltd.
1,000,000—
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
1,800,000—
Sumitomo Mitsui Banking Corp.
1,000,000—
Feb. 7, 2008
The Mizuho Corporate Bank, Ltd.
400,000—
Mitsubishi UFJ Trust and Banking Corp.
400,000—
Sumitomo Trust and Banking Co., Ltd.
400,000—
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
990,000—
Sumitomo Mitsui Banking Corp.
550,000—
The Mizuho Corporate Bank, Ltd. Mar. 27, 2008
220,000—
Mitsubishi UFJ Trust and Banking Corp.
220,000—
Sumitomo Trust and Banking Co., Ltd.
220,000—
Subtotal
14,700,000 13,500,000
Long-term Borrowings Due within a Year
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
— 4,000,000
Sumitomo Mitsui Banking Corp.
— 1,000,000
The Chiba Bank, Ltd.
500,000—
Dec. 8, 2004
The Hachijuni Bank, Ltd.
— 1,000,000
The Hiroshima Bank, Ltd.
— 1,000,000
The Keiyo Bank, Ltd.
— 1,000,000
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
— 2,000,000
Sumitomo Mitsui Banking Corp.
— 1,500,000
Mitsubishi UFJ Trust and Banking Corp. Feb. 26, 2004
— 2,500,000
The Chuo Mitsui Trust & Banking Co., Ltd.
— 1,000,000
The Iyo Bank, Ltd.
500,000—
The Dai-Ichi Mutual Life Insurance Company Feb. 26, 2004
— 3,000,000
The Yamanashi Chuo Bank, Ltd.
1,000,000 1,000,000
The Chugoku Bank, Ltd.
1,000,000 1,000,000
Dec. 9, 2005
The Bank of Fukuoka, Ltd.
1,000,000 1,000,000
The Aozora Bank, Ltd.
1,000,000 1,000,000
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
—2,000,000
Sumitomo Mitsui Banking Corp.
—
2,000,000
Mitsubishi UFJ Trust and Banking Corp. Dec. 8, 2003 1,000,000—
The Iyo Bank, Ltd.
—
1,000,000
The Norinchukin Bank, Ltd.
—2,000,000
Mitsui Life Insurance Company—
2,000,000
Taiyo Life Insurance Company—
1,000,000
Dec. 8, 2003
Daido Life Insurance Company—
1,000,000
Mitsui Sumitomo Insurance Co., Ltd.
—
1,000,000
The Chiba Bank, Ltd.
—1,500,000
Feb. 27, 2006
The Hachijuni Bank, Ltd.
—
500,000
Subtotal
19,000,000 23,000,000
Total Short-term Borrowings
33,700,000 36,500,000

1.22083

Dec. 27, 2007

1.13833

Dec. 27, 2007

1.24667

Use ofBorrowings

Note

Dec. 27, 2007

1.15333

Jun. 27, 2008

1.27583

Jun. 27, 2008

1.25917

Jun. 27, 2008

1.00625

Method of
Repayment

Balloonpayment(Note 2)

Unsecured/
UninsuredDec. 10, 2007

1.22500

Feb. 26, 2008

1.05250

Feb. 26, 2008

1.28583

Aug. 26, 2008

1.66750

Dec. 8, 2008

1.51625

Dec. 8, 2008

1.19000

Feb. 26, 2009

Balloonpayment(Note 2)

Unsecured/
Uninsured

as of Apr. 30,
2008 (¥000)

Note 2:Averageas of Oct. 31, Interest Rate
Date of2007 (¥000)(%) (Note 1)
Repayment

Long-term Borrowings
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
— 2,000,000
Sumitomo Mitsui Banking Corp.
— 2,000,000
Mitsubishi UFJ Trust and Banking Corp. Dec. 8, 2003
— 1,000,000
The Iyo Bank, Ltd.
— 1,000,000
The Norinchukin Bank, Ltd.
— 2,000,000
Mitsui Life Insurance Company— 2,000,000
Taiyo Life Insurance Company— 1,000,000
Dec. 8, 2003
Daido Life Insurance Company— 1,000,000
Mitsui Sumitomo Insurance Co., Ltd.
— 1,000,000
The Chiba Bank, Ltd.
— 1,500,000
Feb. 27, 2006
The Hachijuni Bank, Ltd.
—
500,000
Feb. 26, 2004
The Norinchukin Bank
3,000,000 3,000,000
Feb. 26, 2004
Mitsui Life Insurance Company
1,000,000 1,000,000
The Chiba Bank, Ltd.
1,000,000 1,000,000
Dec. 8, 2006
The Hiroshima Bank, Ltd.
500,000
500,000
Tokio Marine & Nichido Fire Insurance Co. Ltd.
1,000,000 1,000,000
Nippon Life Insurance Company
1,000,000 1,000,000
Nov. 30, 2006
Sompo Japan Insurance Inc.
1,000,000 1,000,000
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
1,000,000 1,000,000
The Mizuho Corporate Bank, Ltd.
1,000,000 1,000,000
Mitsubishi UFJ Trust and Banking Corp. Feb. 27, 2006
500,000
500,000
Sumitomo Trust and Banking Co., Ltd.
3,000,000 3,000,000
The Nomura Trust & Banking Co., Ltd.
2,000,000 2,000,000
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
—
4,000,000
Sumitomo Mitsui Banking Corp.
—
1,000,000
The Chiba Bank, Ltd.
—
500,000
Dec. 10, 2007
The Hachijuni Bank, Ltd.
—
1,000,000
The Hiroshima Bank, Ltd.
—
1,000,000
The Keiyo Bank, Ltd.
—
1,000,000
The Mizuho Corporate Bank, Ltd.
—
1,000,000
Mitsubishi UFJ Trust and Banking Corp.
—
1,000,000
Sumitomo Trust and Banking Co., Ltd. Apr. 25, 2008—
1,000,000
The Hachijuni Bank, Ltd.
—
1,000,000
The Yamanashi Chuo Bank, Ltd.
—
500,000
The Mizuho Corporate Bank, Ltd.
2,000,000 2,000,000
The Chuo Mitsui Trust & Banking Co., Ltd. Mar. 19, 2007 1,000,000 1,000,000
The Iyo Bank, Ltd.
1,000,000 1,000,000
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
2,000,000 2,000,000
Sumitomo Mitsui Banking Corp.
2,000,000 2,000,000
Mitsubishi UFJ Trust and Banking Corp.
1,000,000 1,000,000
Sumitomo Trust and Banking Co., Ltd. Dec. 8, 2006
2,000,000 2,000,000
The Chuo Mitsui Trust & Banking Co., Ltd.
1,000,000 1,000,000
The Nomura Trust & Banking Co., Ltd.
2,000,000 2,000,000
The Iyo Bank, Ltd.
1,000,000 1,000,000
Mitsui Life Insurance Co., Ltd.
1,000,000 1,000,000
Taiyo Life Insurance Company
1,000,000 1,000,000
Daido Life Insurance Company
1,000,000 1,000,000
Nov. 29, 2005
National Mutual Insurance Federation of
1,000,000 1,000,000
Agricultural Cooperative
Development Bank of Japan
1,000,000 1,000,000
National Mutual Insurance Federation of
Dec. 9, 2005
1,000,000 1,000,000
Agricultural Cooperative
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
—2,000,000
Sumitomo Mitsui Banking Corp.
—
1,500,000
Mitsubishi UFJ Trust and Banking Corp. Feb. 26, 2008 2,500,000—
The Chuo Mitsui Trust & Banking Co., Ltd.
—
1,000,000
The Iyo Bank, Ltd.
—
500,000
Mar. 17, 2005
Development Bank of Japan
1,000,000 1,000,000
The Daiichi Mutual Life Insurance Company Dec. 8, 2006
2,000,000 2,000,000
Taiyo Life Insurance Company
1,000,000 1,000,000
Mar. 19, 2007
Daido Life Insurance Company
1,000,000 1,000,000
Sumitomo Life Insurance Company
2,000,000 2,000,000
The Daiichi Mutual Life Insurance Company Feb. 26, 2008 3,000,000—
Subtotal
67,500,000 59,000,000
Total
101,200,000 95,500,000
Note 1:30

Date
Borrowed

1.66750

Dec. 8, 2008

1.51625

Dec. 8, 2008

1.19000

Feb. 26, 2009

1.77500
1.50625

Feb. 26, 2010
Feb. 26, 2010

1.48375

Feb. 26, 2010

1.65500

Aug. 26, 2010

1.68000

Feb. 26, 2011

1.43200

Jun. 10, 2011

1.44800

Aug. 25, 2011

1.63825

Aug. 26, 2011

1.89764

Feb. 26, 2012

1.43750

Aug. 26, 2012

1.53625

Aug. 26, 2012

1.46000

Aug. 26, 2012

1.75250
1.99250

Feb. 26, 2013
Feb. 26, 2013

1.98000

Mar. 19, 2014

1.91875

Feb. 26, 2015

Method of
Repayment

Use ofBorrowings

Balloonpayment(Note 2)

Note

Unsecured/
UninsuredThe average interest rate is weighted by the balance of each borrowing as at the end of the period and rounded to the nearest fifth decimal place. As for the
borrowings, which were hedged by interest rate swaps for the purpose of avoiding interest rate fluctuation risk, the swapped interest rates are used to calculate theweighted average of interest.
The use of borrowings is to purchase property-related assets, the related miscellaneous expenses and the repayment of borrowings.

31

3. STATUS OF INVESTMENT CORPORATION BONDS

3. PRICE INVESTIGATIONThe status of investment corporation bonds issued as of April 30, 2008 is as follows.

(1) Real Estates

Balance
Issue Date

Name of Bonds

First Series Unsecured Investment
Corporation Bonds

Balance

5,000

Mar. 16, 2005

Acquisition/Disposition

as of Oct. 31, Interest Rate
Method of2007 (¥ mln)(%)
Maturity Date Repayment

as of Apr. 30,
2008 (¥ mln)

5,000

1.85

Note

Mar. 16, 2015
(Note 2)

Second Series Unsecured Investment
Corporation Bonds

Mar. 16, 2005

5,000

5,000

2.47

Mar. 16, 2020

Third Series Unsecured Investment
Corporation Bonds

Nov. 28, 2005

10,00010,0001.19

Nov. 29, 2010

Fourth Series Unsecured Investment
Corporation Bonds

Nov. 28, 2005

10,00010,0002.05

Nov. 30, 2015

Fifth Series Unsecured Investment
Corporation Bonds

Mar. 19, 2007

5,000

5,000

1.61

Mar. 19, 2012

Sixth Series Unsecured Investment
Corporation Bonds

Mar. 19, 2007

5,000

5,000

2.21

Mar. 17, 2017

Seventh Series Unsecured Investment
Corporation Bonds

Mar. 19, 2007

4,500

4,500

2.90

Mar. 17, 2028

44,50044,500Acquisition/Disposition

Type of Asset

Name of Property

Acquisition

Real estate

Acquisition
Acquisition
Note 1:

Note 2:

Total
Note 1:
Note 2:
Note 3:Use ofProceeds

Balloonpayment

Appraisal Value

Date

Price (¥ mln)(¥ mln)JCB Sapporo Higashi Building

Feb. 8, 2008

3,700

3,740

Real estate

Toho Edogawabashi Building

Mar. 28, 2008

2,080

2,080

Real estate

SORA Shin-Osaka 21

Apr. 25, 2008

19,251

18,600The price investigation procedures were conducted by Ernst & Young ShinNihon LLC at the time of acquisition or disposition in accordance with the guidance under“Price Investigation of Specified Assets Held by Investment Trusts and Investment Corporations”, Industry Audit Committee Report No. 23 issued by The JapaneseInstitute of Certified Public Accountants. The Company has received detailed reports including the location and lot number to identify these properties.
“Acquisition price” and “Disposition price” do not include various costs (intermediary fees, taxes and duties, etc.) required for acquisition or disposition of theproperty (the purchase and sale price of the real estate, etc., as indicated in the Transfer Agreement of Trust Beneficial Interest or Real Estate).

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

(2) Others
With regard to the properties the Company has traded but not included in the above table “(1) Real Estates,” the priceinvestigation procedures were conducted by Ernst & Young ShinNihon LLC subject to the requirement by Article 201 of
the Investment Trust Law.
For the ninth fiscal period (from November 1, 2007 to April 30, 2008), three OTC derivatives transactions were
subject to investigation. Ernst & Young ShinNihon LLC was requested to investigate the details of three transactions
including the name of counterparty, issues, the number of execution, financial instruments/monetary indicators, put/call
options, exercise prices, the period of execution of right, the trading period, etc. The investigation report has been
received.

4. TRANSACTIONS WITH RELATED PARTIES AND MAJOR SHAREHOLDERS
4. STATUS OF SHORT-TERM INVESTMENT CORPORATION BONDS(1) Transactions
No sales transaction of specific assets with related parties and major shareholders has been made during the ninth fiscal
period.

The status of short-term investment corporation bonds issued as of April 30, 2008 is as follows.
BalanceMaturity Value(¥ mln)(¥ mln)Maturity Date

Note

June 6, 2008

Unsecured/
Uninsured

Issue DateFirst Series Short-term Investment
Corporation Bonds

Apr. 24, 2008

19,984

19,981

20,00019,984

19,981

20,000Total(Note)

Issue Price

Name of Bonds

as of Apr. 30, 2008(¥ mln)Related parties and major shareholders refer to those bodies that have business interest and major stake in the Asset Management Company defined by Article
29-4, Paragraph 2 of Financial Instruments and Exchange Law, with which the Company, stipulated by article 123 of Enforcement Order of Investment Trust
Law, has an Asset Management Agreement.

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

Trading during the Ninth Fiscal Period
Contract-out fees
Property management fees

1. STATUS OF REAL ESTATES AND ASSET-BACKED SECURITIES TRADING
Disposition

Acquisition
Price

Book Value

Gain (Loss)(¥mln) (Note)(¥mln)(¥mln)

Type of Asset

Name of Property

Date

Real estate

JCB Sapporo Higashi Bldg.

Feb. 8, 2008

3,700

—

—

—

—

Real estate

Toho Edogawabashi Bldg.

Mar. 28, 2008

2,080

—

—

—

—

Real estate

SORA Shin-Osaka 21

Apr. 25, 2008

19,251————

25,031————(¥mln) (Note)

Date

Price

Other expenses

Note:“Acquisition price” and “Disposition price” do not include various costs (intermediary fees, taxes and duties, etc.) required for acquisition or disposition of the property(the purchase and sale price of the real estate, etc., as indicated in the Transfer Agreement of Trust Beneficial Interest or Real Estate).

Total Amount Paid (B)Portion (A) / (B)(¥000)(¥000)(%)

Nomura Building Management Co., Ltd. (Note 1)

535,855

Flagship Properties, Inc. (Note 2)

Note 1:
Note 2:916

Nomura Real Estate Development Co., Ltd.

235,275

Nomura Building Management Co., Ltd.

19,127

Nomura Real Estate Development Co., Ltd.

43,773

Nomura Bulding Management Co., Ltd.

19,245

GEO-AKAMATSU CO., LTD.

Note 3:

Total

Amount Paid (A)Name of Related Party and Major Shareholders

239

935,502
325,079

57.3
0.1
72.4
5.9
46.3

94,48020.4
0.3

In addition to the Property Management Agreement, the Company has entrusted Nomura Building Management Co., Ltd. with daily maintenance of building andequipments, the cost of which is included in “Contract-out Fees”.
The Company has entrusted certain jobs such as receipt of rents, payment of disbursements and notification of repairs in conjunction with the sublease of JAL
Building to Flagship Properties. The Contract-out fees paid to Flagship Properties include remuneration for these services.
Besides the above, the Company has made the following payments for repair works during the ninth fiscal period.
Name of Related Party

Amount Paid (¥000)

Nomura Real Estate Development Co., Ltd.

37,389Nomura Building Management Co., Ltd.

566,690

2. STATUS OF OTHER ASSETS
Other than the above-mentioned properties and asset-backed securities, the Company’s assets are mostly comprised of
direct bank deposits and bank deposits in trust.

32

33

Financial Section

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

Shinjuku Nomura Bldg.
JAL Bldg.
Tennozu Park Side Bldg.
NOF Shibuya Koen-dori Bldg.
Secom Medical Bldg.
Nishi-Shinjuku Showa Bldg.
NOF Tameike Bldg.
NOF Shinagawa Konan Bldg.
NOF Surugadai Plaza Bldg.
Hatchobori NF Bldg.
NOF Minami-Shinjuku Bldg.
NOF Technoport Kamata Center Bldg.
Faret Tachikawa Center Square
NOF Yokohama Nishiguchi Bldg.
NOF Shin-Yokohama Bldg.
Omron Kyoto Center Bldg.
NOF Midosuji Bldg.
Nomura Osaka Bldg.
Nomura Yotsubashi Bldg.
Hiroshima Tatemachi NOF Bldg.
Nomura Hiroshima Bldg.
NOF Toyo-cho Bldg.
NOF Kawasaki Higashiguchi Bldg.
NOF Utsunomiya Bldg.
NOF Nagoya Yanagibashi Bldg.
Note 1:
Note 2:

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

Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Building Management Co., Ltd.

53,227
3,312
15,523
15,714
3,789
7,349
12,508
10,427
3,974
6,437
6,895
9,655
8,631
10,466
4,683
5,407
19,10019,322
10,703
2,596
5,549
2,365
7,703
4,900
4,158

“Property Management Fees” are the aggregated sum of the basic fee and the incentive fee.
Daily maintenance of building and equipments is entrusted to Nomura Building Management, but the fees associated with such works are not included here.

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

Other Information
1. NOTICE
Summary of execution/amendment of major agreements that have been approved by the Board of Directors are as follows:
Board of Directors Meeting
Approval Date

April 15, 2008

Approved Matter

Issuance of short-term investment
corporation bonds and execution of
relevant agreements(comprehensive resolution)

Summary

A comprehensive resolution concerning the issuance ofshort-term investment corporation bonds for the maximum
issuance amount of ¥30 billion has been adopted; and theappointment of Bank of Tokyo Mitsubishi UFJ, Ltd., as theadministrative agent for the offering, redemption andsettlement of the short-term investment corporation bonds,
as well as for private offering of the short-term investment
corporation bonds, have been approved.

Contents
Balance Sheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Statements of Income and Retained Earnings . . . . . . 38
Statements of Changes in Net Assets . . . . . . . . . . . . . 39
Statements of Cash Flows

2. OTHER MATTERS
For the purpose of this report, the numbers of amount below unit are truncated and the numbers in percentage are rounded
to unit unless otherwise mentioned specifically.
34. . . . . . . . . . . . . . . . . . . . . . 40

Notes to Financial Statements . . . . . . . . . . . . . . . . . . . 41

SORA Shin-Osaka 21

35

Balance Sheets
Thousands of Yen

As of April 30, 2008

As of October 31, 2007ASSETS

Rental receivables
Corporate taxes refundable

As of April 30, 2008

As of October 31, 2007

LIABILITIESCurrent Assets:
Cash and bank deposits

Thousands of Yen

Current Liabilities:¥ 35,583,622¥ 34,016,504

Trade accounts payable

200,059

210,234

Other accounts payable

1,844,192

1,474,216

5,527

5,341

Short-term investment corporation bonds

19,984,303—¥

737,287¥

807,777

Consumption taxes refundable

309,378

33,935

Short-term debt

33,700,000

36,500,000

Other current assets

254,625

203,722

Accrued expenses

563,800

523,706

36,353,211

34,469,736

Rent received in advance

2,100,767

1,950,418

Other current liabilities

27,125

213,595

58,957,474

41,469,712

Total current assets

Total current liabilities

Property and Equipment, at Cost:Land

221,645,728

205,186,870

Buildings and structures

105,534,282

95,326,975

Machinery and equipment

917,793896,784

Investment corporation bonds

44,500,000

44,500,000

Tools, furniture and fixtures

171,376

110,795

Long-term debt

67,500,000

59,000,000

Construction in progress
SubtotalLess accumulated depreciation
Net property and equipment

36,91537,233328,306,094

301,558,657(11,306,725)(9,704,837)

316,999,369

291,853,820

Long-term Liabilities:

21,506,082

20,469,198

Total long-term liabilities

133,506,082

123,969,198

Total Liabilities

192,463,556

165,438,910

Security deposits from tenants

Investments and Other Assets:
Intangible assets

1,726

1,827

Long-term prepaid expenses

27,376

11,394

Security deposits

211,250

211,250

Deferred investment corporation bond issuance costs

137,818

163,860

Unitholders’ capital

156,767,193

156,767,193¥ 353,730,750¥ 326,711,887

Retained earnings

4,500,001

4,498,623

Total unitholders’ equity

161,267,194

161,265,816

—

7,161

—

7,161

161,267,194

161,272,977¥ 353,730,750¥ 326,711,887

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

NET ASSETS
Unitholders’ Equity:

Valuation and Translation Adjustments:
Deferred hedge gains
Total valuation and translation adjustments
Total Net Assets
Total Liabilities and Net Assets
The accompanying notes to financial statements are an integral part of these statements.

36

37

Statements of Income and Retained Earnings

Statements of Changes in Net Assets
Thousands of Yen

For the period
from November 1, 2007
to April 30, 2008

For the period
from May 1, 2007
to October 31, 2007

For the period from November 1, 2007 to April 30, 2008
Thousands of Yen

Units

Operating Revenues and Expenses

Real estate rental revenues¥ 12,183,127¥ 11,958,966

Gain on sale of real estate

—

9,813

12,183,127

11,968,779

5,213,083

5,190,754

Asset management fees

990,995

874,405

Administrative service and custodian fees

84,61685,249Other operating expenses

70,98692,7486,359,680

6,243,156

Retained
Earnings

Total Valuation
Deferredand Translation
Hedge Gains
Adjustments

Total
Net Assets

265,903¥156,767,193¥4,498,623¥161,265,816¥7,161¥7,161¥161,272,977

Cash distribution paid——

(4,498,546)(4,498,546)——(4,498,546)

Net income——

4,499,925

4,499,925——

4,499,925

Balance as of October 31, 2007

Operating Revenues:

Unitholders’Capital

Total
Unitholders’EquityInterest-rate swaps
Balance as of April 30, 2008

—

—

—

—

(7,161)(7,161)(7,161)

265,903¥156,767,193¥4,500,001¥161,267,194——¥161,267,194

Operating Expenses:
Real estate rental expenses

Operating Profit

5,823,447

5,725,623

Non-Operating Revenues and Expenses

For the period from May 1, 2007 to October 31, 2007
Thousands of Yen

Units

Unitholders’CapitalRetained
Earnings

Total
Unitholders’Equity265,903¥156,767,193¥4,466,302¥161,233,495(¥12,305)(¥12,305)¥161,221,190

Cash distribution paid——

(4,453,875)(4,453,875)——(4,453,875)

Net income——

4,486,197

4,486,197——

4,486,197

Interest-rate swaps

—

—

—

—

19,466

19,466

19,466

265,903¥156,767,193¥4,498,623¥161,265,816¥ 7,161¥ 7,161¥161,272,977

Balance as of April 30, 2007

Balance as of October 31, 2007

Non-Operating Revenues:
29,751—

10,89453,77928,454

86,677

69,099Interest expense

743,444668,556

Loan arrangement fees

94,52093,613Compensation for the transfer of structures
Other non-operating revenues

Total
Net Assets

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

32,898Interest income

Total Valuation
Deferredand Translation
Hedge Gains
Adjustments

Non-Operating Expenses:

3,052

—

428,975

432,532

Amortization of investment corporation bond issuance costs

32,29545,066

Other non-operating expenses

106,884

68,153

1,409,170

1,307,920

4,500,954

4,486,802

Current

1,051

605

Deferred(22)—

4,499,925

4,486,197

76

12,426¥ 4,500,001¥ 4,498,623

Interest expense on short-term investment corporation bonds
Interest expense on investment corporation bonds

Income before Income Taxes
Income Taxes:

Net Income
Retained earnings brought forward
Retained Earnings at End of Period
The accompanying notes to financial statements are an integral part of these statements.

38

39

Statements of Cash Flows

Notes to Financial Statements
Thousands of Yen

For the period
from November 1, 2007
to April 30, 2008

For the period
from May 1, 2007
to October 31, 2007

¥ 4,500,954¥ 4,486,802

1,601,990

1,518,317

Amortization of long-term prepaid expenses

2,918

1,256

Amortization of investment corporation bond issuance costs

32,29545,066

Interest income(32,898)(29,751)

Interest expense

Cash Flows
Cash Flows from Operating Activities:
Income before income taxes
Depreciation

1,175,471

1,101,088

Compensation for the transfer of structures—(10,894)

Loss on disposal of property and equipment

—

1,607

10,174(41,823)(Increase) Decrease in consumption taxes refundable(275,442)

290,245(Decrease) Increase in trade accounts payable(70,490)

163,273

Increase (Decrease) in other accounts payable349,217(101,745)

Increase in rent received in advance

150,349

69,534—

13,906

Decrease (Increase) in rental receivables

Decrease in property and equipment due to sale
Changes in other current assets/liabilities(264,180)

108,544

Subtotal

7,180,358

7,615,425

Interest received

32,89829,751(1,131,556)(1,069,888)(1,238)(3,746)6,080,462

6,571,542

Interest paid
Income taxes paid
Net cash provided by operating activities
Cash Flows from Investing Activities:
Payments for purchases of property and equipment(26,733,587)(10,773,722)

Reimbursement of security deposits to tenants(1,081,136)(482,237)

Proceeds from security deposits from tenants

2,118,020

1,092,895

Payments of security deposits

—

(20)

Proceeds from compensation for the transfer of structures—

10,894(25,696,703)(10,152,190)

Proceeds from short-term debt

24,700,000

13,500,000

Repayment of short-term debt

(23,500,000)(1,500,000)

Proceeds from short-term investment corporation bonds

19,981,251—

Proceeds from long-term debt

23,500,000—

Repayment of long-term debt

(19,000,000)(2,000,000)

Distributions to unitholders(4,497,892)(4,453,663)

21,183,359

5,546,337

Net cash used in investing activities

1. ORGANIZATION
Nomura Real Estate Office Fund, Inc. (the “Company”) is a real estate investment corporation formed to own and invest
primarily in office properties. The Company is externally managed by a licensed asset management company, Nomura Real
Estate Asset Management Co., Ltd. (“NREAM”). NREAM is a wholly-owned subsidiary of Nomura Real Estate Holdings, Inc.
On August 7, 2003, the Company was incorporated under the Law Concerning Investment Trusts and Investment
Corporations (the “Investment Trust Law”) of Japan. On December 4, 2003, the Company was listed on the Tokyo Stock
Exchange as the 9th J-REIT and started operations on the following day. As of April 30, 2008, the Company owned aportfolio of 37 office properties containing an aggregate of approximately 395,330.99 square meters of leasable area andleased office space to 583 tenants.

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

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESCash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits placed with banks and short-term investments that arehighly liquid, readily convertible to cash, with an insignificant risk of market value fluctuation, and with a maturity of
three months or less when purchased.
Property and equipment
Property and equipment are stated at cost, which includes the purchase price and related costs for acquisition, lessaccumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the
fixed assets outlined below:
Buildings
3 - 69 years
Structures
2 - 45 years
Machinery and equipment
3 - 15 years
Tools, furniture and fixtures
3 - 15 years
Intangible assets
Intangible assets are amortized by the straight-line method.

Cash Flows from Financing Activities:

Net cash provided by financing activities
Net Increase in Cash and Cash Equivalents

1,567,118

1,965,689

Cash and Cash Equivalents at Beginning of Period

34,016,504

32,050,815¥ 35,583,622¥ 34,016,504

Cash and Cash Equivalents at End of Period
The accompanying notes to financial statements are an integral part of these statements.

40

Impairment of fixed assets
The Company reviews fixed assets for impairment whenever events or changes in circumstances indicate that thecarrying amount of its fixed assets may not be recoverable. An impairment loss is recognized if the carrying amount of
its fixed assets exceeds the respective aggregate of the estimated future cash flows. If the fixed assets are
determined to be impaired, it is written down to its recoverable amount and the write-down is recorded as an
impairment loss during the current period. No impairment losses have been recognized to date.
Deferred investment corporation bond issuance costs
Deferred investment corporation bond issuance costs are amortized over the respective terms of the bonds by thestraight-line method. Deferred investment corporation bond issuance costs that were reported on the balance sheetsat October 31, 2006 or prior to the six-month period then ended were amortized over a period of three years, with anequal amount amortized in each fiscal period based on the previous method of accounting.
Accounting treatment of beneficial interests in real estate
All assets and liabilities held in trust, for which the real estate in possession of the Company was entrusted, and all theearnings and expenses incurred from such trust are properly reflected in the accompanying balance sheets andstatements of income and retained earnings, respectively.
Revenue recognition
Operating revenues consist of rental revenues including base rents and common area charges, and other operating
revenues including utility charge reimbursements, parking space rental revenues and other income. Rental revenues
are generally recognized on an accrual basis over the life of each lease. Utility charge reimbursements are recognizedwhen earned and their amounts are reasonably estimated.

41

Property related taxes
Property related taxes including property taxes, urban planning taxes and depreciable property taxes imposed during
the fiscal period are charged as rental expenses.
On the other hand, the Company paid the amount equivalent to the property related taxes to the respective sellers
of properties applicable to the period since acquisition and capitalized such amounts as part of the costs to acquire
such properties or beneficial interests in real estate. The capitalized property related taxes amounted to ¥118,642
thousand for the six-month period ended April 30, 2008, and ¥14,593 thousand for the six-month period ended October
31, 2007.
Income taxes
Deferred tax assets and liabilities are computed based on the differences between the financial statements andincome tax bases of assets and liabilities using the applicable statutory tax rates.
Consumption taxes
Consumption taxes received and paid are not included in the accompanying statements of income and retained
earnings.
Derivative financial instruments
The Company utilizes interest-rate swap contracts as derivative financial instruments only for the purpose of hedging
its exposure to changes in interest rates. The Company deferred recognition of gains or losses resulting from changes
in the fair value of interest-rate swap contracts which meet the criteria for deferral hedge accounting.
Although the deferred hedge treatment is generally applied, effective September 1, 2006, the Company has applied
special treatment to those interest-rate swap contracts that meet the criteria for such special treatment based on therevised Investment Trust Law (effective beginning on May 1, 2006) and partial Amendment of the Articles ofIncorporation. Under the special treatment, interest-rate swaps are not remeasured at fair value; instead, the net
amount paid or received under the interest rate swap contract is recognized and included in interest expense or
income.

4. SCHEDULE OF PROPERTY AND EQUIPMENT
Property and equipment as of April 30, 2008 and October 31, 2007 consist of the following:Thousands of Yen
As of April 30, 2008Land
Buildings and structures
Accumulated depreciation
Machinery and equipment
Accumulated depreciation
Land in trust
Buildings and structures in trust
Accumulated depreciation
Machinery and equipment in trust
Accumulated depreciation
Tools, furniture and fixtures in trust
Accumulated depreciation
Construction in progress in trust
Total

Acquisition Costs

Book Value¥ 31,276,665
15,784,166(337,826)
154,538(22,462)
190,369,063
89,750,116(10,618,014)
763,255(293,381)
171,376(35,042)
36,915¥ 316,999,369¥ 31,276,665
15,446,340
132,076
190,369,063
79,132,102
469,874
136,334
36,915¥ 316,999,369

As of October 31, 2007
Acquisition Costs

Book Value¥ 14,817,807 ¥ 14,817,807
6,849,948(185,222)
6,664,726
133,529(13,314)120,215
190,369,063
190,369,063
88,477,027(9,229,641)
79,247,386
763,255(250,902)
512,353
110,795(25,758)
85,037
37,23337,233¥ 291,853,820 ¥ 291,853,820

5. SHORT-TERM DEBT
Short-term debt as of April 30, 2008 and October 31, 2007 consists of the following:
As of April 30, 2008
Amount(Thousandsof Yen)Unsecured loans from banks due on December 10, 2007
Unsecured loans from banks due on December 27, 2007
Unsecured loans from a bank due on December 27, 2007
Unsecured loans from banks due on December 27, 2007
Unsecured loans from banks due on February 26, 2008
Unsecured loans from an insurance company due on February 26, 2008
Unsecured loans from banks due on June 27, 2008
Unsecured loans from banks due on June 27, 2008
Unsecured loans from banks due on June 27, 2008
Unsecured loans from banks due on August 26, 2008
Unsecured loans from banks due on December 8, 2008
Unsecured loans from insurance companies due on December 8, 2008
Unsecured loans from banks due on February 26, 2009
Total

42

—
—
—
—
—
—
¥ 8,500,000
4,000,000
2,200,000
4,000,000
8,000,000
5,000,000
2,000,000¥ 33,700,000

Weightedaverageinterest rate

—
—
—
—
—
—
1.15333%
1.27583%
1.25917%1.28583%
1.66750%
1.51625%
1.19000%

As of October 31, 2007
Amount(Thousandsof Yen)¥ 8,500,000
3,200,000
3,500,000
6,800,000
7,500,000
3,000,000———
4,000,000———¥ 36,500,000

Weightedaverageinterest rate

1.00625%1.22083%
1.13833%
1.24667%
1.22500%
1.05250%———
1.29000%———

The Company entered into ¥40,000 million credit facilities in the form of commitment lines with five financial institutions forthe six-month periods ended April 30, 2008 and October 31, 2007. The total unused amount of such credit facilities was¥33,800 million as of April 30, 2008 and ¥30,000 million as of October 31, 2007.

6. LONG-TERM DEBT
Long-term debt as of April 30, 2008 and October 31, 2007 consists of the following:
As of April 30, 2008
Amount(Thousandsof Yen)Unsecured loans from banks due on December 8, 2008
Unsecured loans from insurance companies due on December 8, 2008
Unsecured loans from banks due on February 26, 2009
Unsecured loans from a bank due on February 26, 2010
Unsecured loans from an insurance company due on February 26, 2010
Unsecured loans principally from banks due on February 26, 2010
Unsecured loans from insurance companies due on August 26, 2010
Unsecured loans from banks due on February 26, 2011
Unsecured loans from banks due on June 10, 2011
Unsecured loans from banks due on August 25, 2011
Unsecured loans from banks due on August 26, 2011
Unsecured loans from banks due on February 26, 2012
Unsecured loans principally from insurance companies due on August 26, 2012
Unsecured loans from a financial institution due on August 26, 2012
Unsecured loans from banks due on August 26, 2012
Unsecured loans from a bank due on February 26, 2013
Unsecured loans from an insurance company due on February 26, 2013
Unsecured loans from insurance companies due on March 19, 2014
Unsecured loans from an insurance company due on February 26, 2015
Total

Weightedaverageinterest rate———
1.77500%
1.50625%
1.48375%
1.65500%
1.68000%
1.43200%
1.44800%
1.63825%
1.89764%1.43750%
1.53625%
1.46000%
1.75250%
1.99250%
1.98000%
1.91875%———¥ 3,000,000
1,000,000
2,500,000
2,000,000
7,500,000
8,500,000
4,500,000
4,000,000
11,000,000
5,000,000
1,000,000
7,500,000
1,000,000
2,000,000
4,000,000
3,000,000¥ 67,500,000

As of October 31, 2007
Amount(Thousandsof Yen)¥ 8,000,000
5,000,000
2,000,000
3,000,000
1,000,000
2,500,000
2,000,000
7,500,000——
4,000,000
11,000,000
5,000,000
1,000,000—
1,000,000
2,000,000
4,000,000—¥ 59,000,000

Weightedaverageinterest rate

1.66750%
1.51625%
1.19000%
1.77500%
1.50625%
1.48375%
1.65500%
1.68000%——
1.63825%
1.89764%1.43750%
1.53625%—
1.75250%
1.99250%
1.98000%—

7. INVESTMENT CORPORATION BONDS
Investment Corporation Bonds
Details of investment corporation bonds outstanding are summarized as follows:
As of April 30, 2008
Amount(Thousandsof Yen)First Series of Unsecured Investment Corporation Bonds
due on March 16, 2015
Second Series of Unsecured Investment Corporation Bonds
due on March 16, 2020
Third Series of Unsecured Investment Corporation Bonds
due on November 29, 2010
Fourth Series of Unsecured Investment Corporation Bonds
due on November 30, 2015
Fifth Series of Unsecured Investment Corporation Bonds
due on March 19, 2012
Sixth Series of Unsecured Investment Corporation Bonds
due on March 17, 2017
Seventh Series of Unsecured Investment Corporation Bonds
due on March 17, 2028
Total

Weightedaverageinterest rate

As of October 31, 2007
Amount(Thousandsof Yen)Weightedaverageinterest rate

¥ 5,000,000

1.85000%¥ 5,000,000

1.85000%

5,000,000

2.47000%

5,000,000

2.47000%

10,000,000

1.19000%

10,000,000

1.19000%

10,000,000

2.05000%

10,000,000

2.05000%

5,000,000

1.61000%

5,000,000

1.61000%

5,000,000

2.21000%

5,000,000

2.21000%

4,500,000

2.90000%

4,500,000

2.90000%¥ 44,500,000¥ 44,500,000

Short-term Investment Corporation Bonds
Details of short-term investment corporation bonds outstanding are summarized as follows:
As of April 30, 2008

First Series of Short-term Investment Corporation Bonds
due on June 6, 2008
Total

As of October 31, 2007

Amount(Thousandsof Yen)Redemption price(Thousandsof Yen)Amount(Thousandsof Yen)Redemption price(Thousandsof Yen)¥ 19,984,303¥ 20,000,000——¥ 19,984,303¥ 20,000,000

—

—

43

8. UNITHOLDERS’ EQUITY

13. LEASESThe Company issues only non-par value investment units in accordance with the Investment Trust Law. The entire amountof the issue price of new units is designated as stated capital. The Company is required to maintain net assets of at least¥50,000 thousand as set forth in the Investment Trust Law.

The Company, as lessor, has entered into lease agreements whose fixed monthly rents are due in advance with a lease termof generally two years for offices. The future minimum rental revenues under existing non-cancelable operating leaseagreements as of April 30, 2008 and October 31, 2007 are summarized as follows:
Thousands of Yen

9. PER UNIT INFORMATIONAs of October 31, 2007

¥ 4,773,371
32,986,020¥ 37,759,392¥ 4,429,671
33,407,917¥ 37,837,589

The net asset values per unit as of April 30, 2008 and October 31, 2007 were ¥606,488 and ¥606,510 respectively. Net
income per unit was ¥16,923 and ¥16,871 for the six-month periods ended April 30, 2008 and October 31, 2007,
respectively.

Due within one year
Due after one year
Total

10. INCOME TAXES

14. DERIVATIVES AND HEDGE ACCOUNTING

The Company, as an investment corporation, is subject to corporate income taxes at a statutory tax rate of approximately
40% for the six-month periods ended April 30, 2008 and October 31, 2007. However, the Company may deduct dividend
distributions paid to its unitholders from its taxable income amounts, provided such distributions meet the requirements
under the Special Taxation Measures Law of Japan. Under this law, an investment corporation must meet a number of tax
requirements, including a requirement to distribute in excess of 90% of its distributable income for the fiscal period, in orderto deduct such amounts. If the investment corporation does not satisfy all of the requirements, the entire taxable income of
the investment corporation will be subject to regular corporate income taxes.
Since the Company distributed approximately 100% of its distributable income in the form of cash distributions totaling¥4,499,876 thousand and ¥4,498,546 thousand for the six-month periods ended April 30, 2008 and October 31, 2007,
respectively, such distributions were treated as deductible distributions for purposes of corporate income taxes. The
following summarizes the significant differences between the statutory tax rate and the effective tax rates:

The Company has entered into interest-rate swap contracts with several Japanese financial institutions to hedge its variable
rate long-term debt obligations. The Company utilizes interest-rate swap contracts, which are derivative financial
instruments, only for the purpose of mitigating future risk of fluctuation of interest rates, but does not enter into suchtransactions for speculative or trading purposes. The Company entered into such derivative transactions to hedge risk inaccordance with its Articles of Incorporation and the established risk management policies of NREAM.
Beginning the fiscal period ended October 31, 2007, the Company has applied the “special treatment” set forth in theamended Investment Trust Law (effective beginning on May 1, 2006) and partial Amendment of the Articles ofIncorporation.
Consequently, the fiscal period ended October 31, 2007, total net assets increased by ¥96,848 thousand over theamount which would have been recorded under the previous method of accounting.
The following summarizes the notional amounts and the estimated fair value of the interest-rate related positions
outstanding as of April 30, 2008 and October 31, 2007:

For the period
from November 1, 2007
to April 30, 2008

For the period
from May 1, 2007
to October 31, 2007

39.39%(39.38)0.01
0.02%

39.39%(39.39)0.01
0.01%

Statutory tax rate
Deductible cash distributions
Other
Effective tax rates

11. BREAKDOWN OF REAL ESTATE RENTAL REVENUES AND EXPENSES
Real estate rental revenues and expenses for the six-month periods ended April 30, 2008 and October 31, 2007 consist of
the following:Thousands of Yen
For the period
from November 1, 2007
to April 30, 2008

For the period
from May 1, 2007
to October 31, 2007

¥ 12,183,127
11,057,640
8,991,314
2,066,326
1,125,487
255,389
795,928
74,1705,213,083
935,502
325,080
790,511
941,568
23,075403,143
1,601,962
192,242¥ 6,970,044¥ 11,958,966
10,694,615
8,688,418
2,006,197
1,264,351
239,567
953,671
71,113
5,190,754
890,482306,560
937,406
939,419
23,272
362,145
1,518,289
213,181¥ 6,768,212

Real estate rental revenues
Rental revenues
Rental revenues
Common area charges
Non-rental revenues
Parking revenues
Incidental income
Other miscellaneous revenues
Real estate rental expenses
Property management costs
Property management fees
Utility expenses
Property and other taxes
Casualty insurance
Repairs and maintenance
Depreciation
Other rental expenses
Profit12. BREAKDOWN OF GAIN ON SALE OF REAL ESTATE
Gain on sale of real estate for the six-month periods ended April 30, 2008 and October 31, 2007 consist of the following:Thousands of Yen

Proceeds from sale of real estate
Cost of sale of real estate
Other related sale expenses
Gain on sale of real estate
44

As of April 30, 2008

For the period
from November 1, 2007
to April 30, 2008

For the period
from May 1, 2007
to October 31, 2007

—
—
—
—

¥ 25,398
13,906
1,679¥ 9,813

Thousands of Yen

As of April 30, 2008
Interest-rate swaps:
Received/floating and paid/fixed
As of October 31, 2007
Interest-rate swaps:
Received/floating and paid/fixed

Notional amount

Estimated fair value

Unrealized loss

¥ 56,000,000(¥ 11,987)(¥ 11,987)¥ 51,500,000(¥ 147,976)(¥ 147,976)

15. SIGNIFICANT SUBSEQUENT EVENTS
Offering of new investment units
On May 8, 2008 and May 20, 2008, the Board of Directors of the Company approved resolution for the issuances of new
investment units as follows. The related payments were completed on May 27, 2008 and June 24, 2008. As a result, thetotal number of units increased from 265,903 to 305,123 and unitholders’ equity increased from ¥156,767 million to¥185,455 million.
(1) Primary offering of new investment units
Number of units issued
37,000 units
Offering price per unit
¥756,560
Total offering price¥27,992,720,000
Issue price per unit
¥731,470
Total issue price¥27,064,390,000
Payment date
May 27, 2008
The date from which the unitholders are
deemed to be eligible for dividends
May 1, 2008
(2) Third-party allotment
Number of units issued
Issue price per unit
Total issue price
Payment date
The date from which the unitholders are
deemed to be eligible for dividends
Third-party allottee

2,220 units¥731,470¥1,623,863,400
June 24, 2008
May 1, 2008
Nomura Securities Co., Ltd.

(3) Purpose of the issuances
The proceeds were used for the redemption of short-term investment corporation bonds (¥20 billion) and therepayment of existing short-term debt.

45

Business Structure
Asset Custodian
Administrator ofUnitholders Register

Asset Custody
Agreement

Nomura Real Estate
Office Fund, Inc.

Administration
Agreement, etc.

Financial
Institutions, etc. /Investors ofInvestment
Corporation Bonds

General Administration(Accounting, etc.)
Mitsubishi UFJ Trust andBanking Corporation

Debt Financing /Issue of Investment
Corporation Bonds

Unitholders’Meeting

AuditorBoard of Directors’Meeting

Ernst & Young
ShinNihon LLC
RepaymentofPrincipal &Interest

Liabilities

Unitholders

Trading

Investment

Asset
Office Buildings(Real Estate
Related Assets)

Rents, etc.

Capital Investment

Unitholders

EquityDistribution

Property
Management

Property
Management
Agreement

Property Management
Companies

Asset Management
Services Agreement

Information andResearch-related
Service Providers

Asset Management Company

Nomura Real Estate
Development Co., Ltd.
Nomura Building
Management Co., Ltd.
ITOCHU Urban
Community Ltd.
The Dai-ichi Building
Co., Ltd.
CB Richard Ellis Asset
Services K.K.

Instructions forRents andManagement
RentalStrategies,
Plans ofRepairs, etc.

Property
Information

Service
Agreement, etc.

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

XYMAX AXISCORPORATIONTaisei Building
Management Co., Ltd.

46

47

Profile of the Asset Management Company

Corporate Data

PROFILE AND HISTORY OF INCORPORATION

Corporate Name
Nomura Real Estate Office Fund, Inc.

Company:
Capital:Shareholder:
Incorporation:

Nomura Real Estate Asset Management Co., Ltd.
¥300 million (as of March 31, 2008)
Nomura Real Estate Holdings, Inc. (100%)January 24, 2003

Corporate Office8-5-1 Nishi Shinjuku Shinjuku-ku, Tokyo
160-0023, Japan
http://www.nre-of.co.jp/english/

PROCESS OF DECISION-MAKING
We have ensured transparency in the decision-making process by placing agenda through the Compliance Committee, in which
two external members with professional experience sit.

AGENDA

Date of Incorporation
August 7, 2003
Stock Listing
Tokyo Stock Exchange (Securities Code: 8959)

Proposal

COMPLIANCE OFFICER
When compliance is satisfied

COMPLIANCES COMMITTEE
Major objectives of the Compliance Committee are:to ensure compliance with the laws and regulations applicable tothe proposed agenda,
to deliberate the contents of trade with the related parties,
to check the legal matters for the Investment Committee inmaking investment decisions.

Fiscal Period
Six months ending on April 30 and October 31
Capital¥156,767,193,535 (as of April 30, 2008)
Number of Units Issued
265,903 (as of April 30, 2008)

Transfer Agent
Mitsubishi UFJ Trust and Banking Corporation
1-4-5 Marunouchi Chiyoda-ku, Tokyo 100-8212, Japan
Business Office of the Transfer Agent
Corporate Agency Department
Mitsubishi UFJ Trust and Banking Corporation
7-10-11 Higashisuna Koto-ku, Tokyo 137-8081, Japan
Tel: +81-3-5683-5111
Independent Auditors
Ernst & Young ShinNihon LLC
Hibiya Kokusai Bldg. 2-2-3 Uchisaiwai-cho Chiyoda-ku,
Tokyo 100-0011, Japan
Investor Relations
For further information, please contact the Asset Management
Company:
Nomura Real Estate Asset Management Co., Ltd.
8-5-1 Nishi Shinjuku, Shinjuku-ku, Tokyo 160-0023, Japan
Tel: +81-3-3365-0507

Number of Unitholders
11,120 (as of April 30, 2008)

INVESTMENT COMMITTEE
Investment Committee deliberates on such subjects as:
Formulation and revision of investment guidelines,
Selection of properties for investment,
Formulation and revision of investment planning for the fiscal year,
Policy making on material articles such as funding.

Disclaimer

DECISION MAKING
The entire process of deliberation and final decision is reported.

COMPLIANCE COMMITTEEThis semiannual report includes translations of certain Japanese documents originally filed under the Securities andExchange Law of Japan. This report was prepared in English solely for the convenience of and reference by readers
outside Japan and should not be considered as a disclosure statement. The original Japanese documents always govern

USE OF INFORMATION NETWORK OF NOMURA REAL ESTATE GROUP
In order to maximize opportunity to invest in better properties, we have collected as much information as possible not only
from the Asset Management Company but also from other companies of Nomura Real Estate group as listed below.

the meaning and interpretation.
In general, accounting principles and practices used by real estate investment corporations in Japan (“J-REITs”) in
preparing its financial statements conform with accounting principles generally accepted in Japan (“Japanese GAAP”).
However, they may differ from generally accepted accounting principles applied in certain other countries. Potential

Nomura Real Estate Office Fund, Inc.

investors should consult their own professional advisors for an understanding of the differences between Japanese
GAAP and generally accepted accounting principles in the United States (“U.S. GAAP”) or other jurisdictions and how

Nomura Real Estate Asset Management Co., Ltd.

those differences might affect the financial information contained herein.
Estimates for Nomura Office Fund’s future operating results contained in this semiannual report are forward-looking

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

statements and are based on information currently available to Nomura Office Fund and its asset management company
and are subject to risks and uncertainties. Consequently, these projections should not be relied upon as the sole basis forevaluating Nomura Office Fund. Actual results may differ substantially from the projections depending on a number offactors.

General Real Estate Market

48

Properties owned and developed by
Nomura Real Estate Urban Net andNomura Real Estate Development

Printed in JapanNOMURA REAL ESTATE OFFICE FUND, INC. Ninth Fiscal Period Semi-Annual Report

http://www.nre-of.co.jp/english/