Fourth Fiscal Period

Financial Results of the Fourth Fiscal Period (December 2005)

－ Ｃｏｎｔｅｎｔｓ －４．Fund Management Results

１．Fund Management Overview
・Highlights of the Fourth Fiscal Period2・Growth of Nomura Real Estate Office Fund (1)・Properties Acquired in the Fourth Fiscal Period“Changes in Performance”

3・Growth of Nomura Real Estate Office Fund (2)4

２．Future Management Policies
・Market Recognition

6・Future Growth Strategy (1)“Establishment of Management Cycle”

7・New Investments after Settlement“Investment focusing on Location Characteristics
and Risk Management Possibilities”

8

３．Details of the Financial Results
・Earnings Statement

10・Balance Sheet

11・Cash Distribution

12

・Financial Indicators

13

・Cash Flow Statement

14

・Debt Financing

15・Shareholder Status

16

・Fifth Fiscal Period Forecasts
17

・Property List

35

20

・Income and Expenditure per Property

36

・Portfolio Map

37

21
22

・Photos of Properties（27 Properties as of December 20, 2005）

38

・Portfolio Diversity (1) “Asset Data”

23

・Property Acquisition Channels

・Portfolio Diversity (2) “Tenant Data”

24

・Transition of Unit Price

40

・Results of the Asset Management Activities

25

・Overview of the Management Company

41

・Increase in Rental Revenues

26

・Increase of Rental Expense Efficiency andSecuring of Property Competitiveness・Future Growth Strategy (2)19・Investment Activities Taking Advantageof the Group Platform“Changes in Fund Management”(the Period Ending April, 2006)

・Investment Results

Appendix27

・Move-Ins/Outs

28

・Period-End Value（Appraisal Value)

29

・Results of Financial Activities

30

・Outline of the Capital Increase andthe Shelf Registration of the Investment
Corporation Bonds

31

・Financial Status
at the End of the Fourth Fiscal Period

32

・Financial Status after Settlement(As of December 20, 2005）

33

39

1. Fund Management Overview

1

Highlights of the Fourth Fiscal Period
Fourth Fiscal Period Results （Actual Operation: 184 days）
Difference from
Previous Period

Fourth Fiscal Period Results

Forecast（made on June 27, 2005）

Difference (Actual / Forecast)

Operating Revenue

8,641 mil. yen+ 1,535 mil. yen+ 21.6％

8,273 mil yen+ 367 mil yen+ 4.4％

Operating Profits

4,111 mil. yen+

882 mil. yen+ 27.3％

3,817 mil yen+ 293 mil yen+ 7.7％Net Income

3,484 mil. yen+

802 mil. yen+ 29.9％3,178 mil yen+ 305 mil yen+ 9.6％Cash Distribution *15,150 yen/unit+

630 yen/unit+ 4.3％

13,820 yen/unit+ 1,330 yen/unit+ 9.6％*Number of investment units issued
as of the end of the fiscal period

Fiscal Period 229,970: Fourth（An increase of 45,320 units / 24.5% compared to the previous period）

Reference
Period-end
Period-end LTV
LTV （Total（Total asset
asset base）
base） **Key Activities （May 1, 2005-October 31, 2005）
Investment in New Properties
Asahi Seimei Yokohama Nishiguchi Building
Kawasaki Higashiguchi Sanshin Building（5.05 billion yen）
（9.5 billion yen）
Toshin Tameike Building
Yanagibashi Sanshin Building（7.4 billion yen）
（3.55 billion yen）
Amount of integrated assets as of the end of the fourth fiscal period:
210.1 billion yen （23 properties） / Total asset: 239 billion yen

Portfolio Management
Increase in rental revenues: An increase of 4.4%
based on the 18 properties owned at the beginning of the third fiscal period
NOI return：Actual return was 6.2% against the budgeted return of 6.0%.
（based on the 20 properties owned as of June 27, 2005 when the forecast was made）

Financial activities

ROE
ROE （Annualized）（Annualized）

38.9％
38.9％
5.4％
5.4％

*The ratio of period-end interest bearing debts to period-end total assets

Fifth Fiscal Period Forecast （Actual Operation: 181 days）
Operating
Revenue

9,718 mil yen （1,077 mil yen / +12.5% ） *1

Operating
Profits

4,435mil yen （ 324 mil yen / + 7.9% ） *1

Net Income

3,518 mil yen （ 34 mil yen / + 1.0% ） *1

Cash
Distribution *2

15,300 yen/unit （ 150 yen / + 1.0%） *1

Second capital increase by public offering after listing （Amount raised: 32.4 billion yen）

*1 Values in parentheses are differences from the previous period（Period that ended October 2005）

Shelf registration of publicly-offered Investment Corporation Bonds（Maximum: 100 billion yen）

*2 Number of investment units issued as of the end of the fiscal period: 229,970（Difference from the previous period: None）

2

Growth of Nomura Real Estate Office Fund （１）“Changes in Performance”
Performance”＜ Operating Revenue ＞(mil. yen)

10,000(mil. yen)
9,718

＜ Operating Profit ＞

5,000
4,435

8,641

4,111

8,000

4,000
6,656

7,106
3,228

6,000

2,930

3,000
2,313

4,531

4,000

2,000

2,000

1,000
First Fiscal
PeriodSecond Fiscal
PeriodThird Fiscal
PeriodFourth Fiscal
PeriodFifth Fiscal Period（Forecast）＜ Net Income ＞(mil. yen)
4,000First Fiscal
Period(yen)
16,0003,484

Second Fiscal
PeriodThird Fiscal
PeriodFourth Fiscal
PeriodFifth Fiscal Period（Forecast）＜ Cash Distribution per Investment Unit ＞
15,1503,518
14,11414,00015,30014,520

3,000
2,606

2,681
12,0002,000
10,000

1,526

1,000

First Fiscal
PeriodSecond Fiscal
PeriodThird Fiscal
PeriodFourth Fiscal
PeriodFifth Fiscal Period（Forecast）

10,2738,000
First Fiscal
PeriodSecond Fiscal
PeriodThird Fiscal
PeriodFourth Fiscal
PeriodFifth Fiscal Period（Forecast）

3

Growth of Nomura Real Estate Office Fund （2）“Changes in Fund Management”
Management”
Changes in Asset Size （based on acquisition price）
2,371

2,500
（unit：100 mil yen）

1,500
1,000

1,042

Amount of additional investments during
the two years after listing 132.89 billion yen

2,101

Shinjuku Nomura Bldg.
2,000

1,846
1,515

Constant asset size increase of approx. 25 to 30 billion yen
per fiscal period (annual 50 to 60 billion yen)

1,272

Percentage of Shinjuku Nomura Bldg. accounts for in the portfolio
37.2% → 16.3%

500
0

37.2%

30.4%

25.6%

21.0%

18.4%

16.3%

December 2003

April 2004

October 2004

April 2005

October 2005

December 2005

（at listing）（End of First
Fiscal Period）（End of Second
Fiscal Period）（End of Third
Fiscal Period)（End of FourthFiscal Period)（Present）

Changes in the Ratio of Interest Bearing Debts /From Short-Term to Long-Term

Changes in Portfolio’s NOI Return(%)
1st Fiscal
Period

第1期

2nd Fiscal
Period第2期

3rd Fiscal
Period

第3期

4th Fiscal
Period

第4期

60%
50%

46.4%

40%
12 properties owned at listing
上場時12物件

15 properties owned at the end of

第1期末保有15物件
first fiscal period
18 properties at the end of
第2期末保有18物件
second fiscal period

7.4

6.4

6.6

6.6

7.2

6.5

6.7

6.6

6.2

6.3

6.4

*Unaudited

Changes in LTV （based on the total asset）

41.2%
36.2%

37.2%

April May
2004 2004*

October
2004

33.8% 33.8%

30.9%
30%
20%
December
2003*

April May
2005 2005*

第3期末保有19物件

6.1

6.2

4.8

4 year

4.4 4.3
3.9

3.9

3.8 3.7

3 year23 properties owned at the end of

第4期末保有23物件
fourth fiscal period

6.1

3.3

2 year
1.2%

Figures inare the NOI return of the entire portfolio for that particular period.（annualized）（For the properties acquired during the respective fiscal periods, the NOI return is obtained by getting the average investment amountfor the relevant period according to the number of operation days of that particular period.）

October December
2005
2005*

Changes in the duration and average rate of (all the) long-term debts with fixed interest rates
5 year19 properties owned at the end of
third fiscal period

44.9%
38.9%

December
2003

1.0%

1.1%

April May
2004 2004

1.1%
October
2004

1.1%

1.3%

April May
2005 2005

1.1%
October2005

1.2%
December
2005

4

2. Future Management Policies

5Market Recognition
Expansion of property investment management sector

Property Investment
MarketExpansion of property development business for future sales to investment funds
Increase in the number of liquidated properties
Increase in the number of investment
choices in the mid- to long-term

Well-chosen investments based oninvestment analysis and management capabilities

Layers of investors increasingly investing in J-REIT（Pension funds, FoFs, etc.）

J-REIT Investment
MarketRenewed awareness of J-REIT as an investment option taken into consideration
based on comparison with stocks / bonds
Carefully chosen as apotential object of investment

It is now in a critical stage of growth.

Improvement in corporate performance

Office Market

Office market upturn
Improvement in the environment for interest rate increase

Economic
Environment

Risk management capability is increasingly essential.

Increase of public anxiety concerning the falsified structural calculation statements

Social Issues

Increase of public anxiety concerning sprayed asbestos
Increased risk areas that should be managed

6

Future Growth Strategy （1） “Establishment of Management Cycle”
Cycle”
To work for midmid- to longlong-term growth
based on the internal growth promoted
by rent increase and financial
management capabilities

Mid- to
-Term
Mid
Long
MidtoLongLong-Term
Property
Management
Property Management

The blue arrows represent management
capabilities
Rent
Rent Increase
Increase

Maintenance/Upgrading
Maintenance/Upgradingof
ofPortfolio
PortfolioPerformance
Performance

Mid- to
-Term
Mid
Long
MidtoLongLong-Term
Property
PropertyManagement
Management

Setting
Settingof
of Conservative
Conservative
Financial
FinancialStrategies
Strategies

Setting
Settingof
ofConservative
Conservative
Financial
FinancialStrategies
Strategies

Risk
RiskDiversification
Diversification
Securing
Securingof
ofStable
StableEarnings
Earnings

Expansion
Expansioninin
Asset
AssetSize
Size

Expansion
Expansioninin
Asset
AssetSize
Size

Securing-Lasting
Long
Securingof
ofLongLong-Lasting
FundR
aisingCapabilities
Fund Raising Capabilities

733

Future Growth Strategy (2)“Investment focusing on Location Characteristics and Risk Management
Management Possibilities”
Possibilities”
Investment focusing on Location Characteristics and Risk Management Possibilities
Property Selection Criteria: Location/Basic characteristics of buildings + Degree of Risk
AccessAccessto
totransportation,transportation,everyday
everydayconvenience,
convenience,
concentration
concentrationof
ofoffice,
office,geographic
geographicproximity
proximityto
toresidential
residentialareas/laboratories,
areas/laboratories,etc.
etc.

Location（Convenience）

Priority

Building（Basic characteristics）

Specifications（Comfort）

Basic
Basicstructure,
structure,area/shapearea/shapeof
ofthe
thestandard
standard floor;
floor;
scenicscenicattraction,
attraction,risk
riskmanagement
managementpossibilities,
possibilities,etc.
etc.

Air-conditioning
Air-conditioningsystem,
system, IT
IT environment,
environment,
comfortablenesscomfortablenessin
incommoncommonareas,
areas,
external
externaldesign,design,etc.
etc.

Assessment
Assessment
precedingtheprecedingtheacquisitionis essential.
acquisition is essential.

Sophistication ofSophistication
corporatefacilityof
corporatestrategies
facility
management
management strategies

It is possible
It is possible
to addressthese withto addressthese withpropermanagement.
proper management.

Investment focusing on Changes in Urban Structure(A city is shown as a bunch of squares in different colors in the illustrations below.）
BeforeBeforeJapan’sJapan’s
Economic
EconomicBoom
Boom

Peak
Peakareaareaexpansion
expansion

・Increased demand basedon the economic boom
・Changes in land use, mainly
use for offices
・Improvement in transportation
infrastructure

A mixture of offices
and factories, etc.

Degree of corporate needs（Large

・Companies worked forincreased efficiency
・A tenants’ market wasestablished.

Rapid area expansion of premises used as offices
Japan’s myth of ever-increasing land prices;A large number of small-sized buildings stood side by side.
⇒ Existing business areas were created.
MediumSmall）

Changes
Changes
ininurban
urbanstructure
structure

Progress
Progressininpolarization
polarization

・Expansion of corporate
operations
・Sophistication of facility
management
・Progress in re-development

Progress in polarization
Falling office rents
Disparities occurring between
locations and basic characteristics

Concentration of needs for office premises
Concentration of real property values
Changes in land use

Increased importance of investment focusing on changes in urban structure8

3. Details of the Financial Results

9Earnings Statement

Rental Business Revenues
Rental Revenues
Common-area charges
Non-Rental Business Revenues
Monthly parking revenues
Incidental revenues
Other rental revenues
Miscellaneous
Total Rental Business Revenues
Property Management Fees
Property and Other Taxes
Utility Expenses
Insurance Expenses
Repairs and Maintenance
Other Expenses
Depreciation Allowance
Total Rental Business Expenses
Rental Profits
Asset Management Fees
Selling and Administrative Expenses
Operating Profits
Non-Operating Revenues
Non-Operating Expenses
Interest expense
Corporate bond interest
Amortization of issuance Cost of Corporate Bond
Financing fees
Issuance cost of new investment units
Rental B usin ess Exp en ses Rental Bus iness Rev enues

Operating Revenues and E xpenses
Non-Operating R ev. and Exp.

Recurring Profit and Loss

Item

Expenses related to public offering of the investment units

Expenses incurred in company formation
Other non-operating expenses
Non-Operating Revenues and Expenses
Current Profits
Net Income before Taxes
Corporate Tax, Residence Tax and Enterprise Tax
Adiusted Corporate Tax
Net Income
Retained Earning Carried over from Previous Period
Retained Earnings

Third Fiscal Period

Fourth Fiscal Period

Nov. 1, 2004 - Apr. 30, 2005

May. 1, 2005 - Oct. 31, 2005

Amount (1,000 y en)

Percentage (%)

Amount (1,000 y en)

Percentage (%)

6,339,782
4,890,846
1,448,935
766,379
135,003562,230
69,141
3
7,106,161
811,574
479,820575,823
20,581
110,900
137,292
1,023,298
3,159,291
3,946,869
576,611141,296
3,228,961
6,817
553,564
389,039
26,63014,85597,61425,424▲ 546,746
2,682,215
2,682,215
1,040▲3
2,681,178
46
2,681,225

89.2
68.8
20.4
10.8
1.9
7.9
1.0
0.0
100.0
11.4
6.8
8.1
0.3
1.6
1.9
14.4
44.5
55.5
8.1
2.0
45.4
0.1
7.8
5.4
0.4
0.2
1.4
0.4
▲ 7.7
37.7
37.7
0.0
0.0
37.7
0.0
37.7

7,709,467
6,138,529
1,570,938
931,881
156,428
707,782
67,58189
8,641,349
833,441
614,908
711,50921,809213,371
121,243
1,229,041
3,745,324
4,896,024
629,689
155,182
4,111,152
9,451
635,530
412,438
108,000
14,85548,78442,7698,682▲ 626,078
3,485,074
3,485,074
1,008
1
3,484,064
107
3,484,171

89.2
71.0
18.2
10.8
1.8
8.2
0.8
0.0
100.0
9.6
7.1
8.2
0.3
2.5
1.4
14.2
43.3
56.7
7.3
1.8
47.6
0.1
7.4
4.8
1.2
0.2
0.6
0.5
0.1
▲ 7.3
40.3
40.3
0.0
0.0
40.3
0.0
40.3

Rental Revenues
The fourth fiscal period started operation with 19 properties in the portfolio. Asahi Seimei
Yokohama Nishiguchi Building, Kawasaki Higashibuchi Sanshin Building, Toshin Tameike
Building and Yanagibashi Sanshin Building were added, increasing the total number ofproperties in the portfolio to 23 at the end of the fiscal period.
Occupancy rate was 98.1% at the end of the third fiscal year (as of Apr. 2005), and 97.3%(▲0.8%) at the end of the fourth fiscal period.

Property and Other Taxes
As for property and urban planning taxes during the fourth fiscal period, the amount that
corresponds to the period is recorded as expenses for 18 properties acquired by 2005.

Repairs and MaintenanceIncludes a 213 million yen capital expenditure in addition to 1,016 million yen in repairs andmaintenance fees. (1,016 million yen in repairs and maintenance fees includes 443 million
yen in initial reserve).

Rental Profits : 4,896 million yen (+949 million yen over the previous fiscal period)
1.Operation for the whole fiscal period of JAL Building
and acquisition of 4 properties+877 million yen
2.Profit increase for 18 other properties,
acquired by the beginning of the third fiscal period+72 million yen(Rental revenues + 268 million yen, rental expenses ▲ 196 million yen)

Incidental Revenues:

Revenues received as utility expense, facility usage charges,
signboard usage charges, etc.
Hourly parking charges, etc.
Revenues received as land rent, etc.
Trust fees, commission paid,
others including repairs and maintenance expense, etc.
Selling and Administrative Expenses： Asset custody/clerical work outsourcing fees,
accounting auditor’s compensation, etc.
Other Non-Operating Expenses：
Expense for the monitoring of ratings, etc.
Other Rental Revenues:
Other Miscellaneous Revenues：
Other Expenses：

10Balance Sheet
AssetsItem

AssetsCurrent Assets
Cash and Cash Equivalents
Entrusted Cash and Cash Equivalents
Other Current Assets
Fixed Assets
Tangible Assets
Properties in Trust
Buildings
Land
Other Tangible Assets
Other Tangible Assets
Intangible Assets
Intangible Assets in Trust and Others
Investment and Others
Rental Deposits
Other Investments and Assets
Deferred assets
Issuance Cost of Corporate Bonds
Total Assets

Third Fiscal Period

Fourth Fiscal Period

as of Apr. 30, 2005
as of Oct. 31, 2005
amount (1,000 yen) percentage (% ) amount (1,000 yen) percentage (% )22,021,750
4,826,415
16,541,136
654,197
185,907,752
185,406,754
185,399,196
57,321,914
128,077,281
7,557
7,557
2,079
2,079
498,917
10,780488,137
74,27574,275208,003,777

10.6
2.3
8.0
0.3
89.4
89.1
89.1
27.6
61.6
0.0
0.0
0.0
0.0
0.2
0.0
0.2
0.0
0.0
100.0

26,983,355
8,025,078
18,691,492
266,784
212,024,494
211,566,878
211,317,493
64,217,051
147,100,441
249,385
249,385
1,989
1,989
455,626
210,780
244,846
59,90559,905
239,067,755

11.3
3.4
7.8
0.1
88.7
88.5
88.4
26.9
61.5
0.1
0.1
0.0
0.0
0.2
0.1
0.1
0.0
0.0
100.0

Liabilities
Third Fiscal Period
Item
Current Liabilities
Trade Accout Payable
Short-term Borrowings

as of Apr. 30, 2005
as of Oct. 31, 2005
amount (1,000 yen) percentage (% ) amount (1,000 y en) percentage (% )Accounts Payable
Rent Received in Advance
Other Current Liabilities
Fixed Liabilities
Corporate Bonds
Long-Term Liabilities
Deposits From Tenants
Other Fixed Liabilities
Total Liabilities
Shareholders' Capital
Retained Earnings
Total Shareholders’ Equity

34,395,613
318,384
24,500,000
7,500,000
794,854
1,282,244
130
78,758,458
10,000,000
54,500,000
13,779,930
478,527
113,154,072
92,168,480
2,681,225
94,849,705

16.5
0.2
11.8
3.6
0.4
0.6
0.0
37.9
4.8
26.2
6.6
0.2
54.4
44.3
1.3
45.6

31,387,836
529,401
21,000,000
7,500,000
917,177
1,439,845
1,411
79,585,533
10,000,000
54,500,000
14,849,571
235,961
110,973,370
124,610,212
3,484,171
128,094,384

13.1
0.2
8.8
3.1
0.4
0.6
0.0
33.3
4.2
22.8
6.2
0.1
46.4
52.1
1.5
53.6

Total Liabilities and Unit Holder Equity

208,003,777

100.0

239,067,755

100.0

EquityLiabilities

Long-Term Debts to be Paid Back w ithin One Year

Shareholders'Fourth Fiscal Period

Cash and Cash Equivalents

Amount (million yen)

Deposits in Fund’s AccountRental Deposits
Capital Expenditure Reserved
Others

8,025
1,570
2,722
3,732

Deposits in the Name of the Trust Banks’ AccountRental Deposits
Capital Expenditure Reserved
Others

18,691
13,205250
5,234Tangible Assets

Amount (million yen)
Acquisition Cost

Properties in Trust
Buildings
Land215,185
68,084
147,100

Accumulated
Depreciation

Accumulated
Depreciation
for This Period

Terminal Book Value

3,867
3,867
-

(1,228)(1,228)211,317
64,217
147,100

Debt Financing
93,000Interest Bearing Debt (million yen)
Short-Term Liabilities + Long-Term Liabilities + Corporation Bonds

Asset to Interest Bearing Debt Ratio

Total Asset

Long-Term Interest Bearing Debt Ratio

Long-Term Liabilities + Short-Term Liabilities + Corporation Bonds

38.9 %

Long-Term Liabilities + Corporation Bonds

69.4%

11

Cash Distribution
Cash Distribution

Item

Third Fiscal Period

Fourth Fiscal Period

Nov. 1, 2004 Apr. 30, 2005

May 1, 2005 Oct. 31, 2005

Retained Earnings(1,000 yen)

2,681,225

3,484,171

Cash Distribution(1,000 yen)

2,681,118

3,484,045

14,52015,150107

126

Cash Distribution Per Unit

(Yen)

Retained Earnings Carried Forward(1,000 yen)

Cash Distribution
For the fourth fiscal period, substantially all of the retained earnings were
distributed to the 229,970 issued and outstanding investment units.
Dividend per unit was 15,150 yen.

Comparison with the Forecast
Item

Forecast

ActualAmount Announced on
Jun. 27, 2005

Results of the FourthFiscal Period

Difference

Difference (%)

Operating Revenue

Operating Revenue(mil. yen)

8,273

8,641

367

4.4

Current Profits(mil. yen)

3,179

3,485

305

9.6

Net Income(mil. yen)

3,178

3,484

305

9.6

( yen)

13,82015,1501,330

9.6

Cash Distribution Per Unit

Difference between Actual and Forecasts
Increase in operation revenue with the acquisition of
three new properties: Kawasaki Higashiguchi Sanshin Bldg.,
Toshin Tameike Bldg. and Yanagibashi Sanshin Bldg.
(276 million yen)
Revenue improvement due to new tenants in Nomura Osaka Bldg.
(27 million yen)
Increase in operation in 19 properties (64 million yen)12

Financial Indicators

Comparison of the First to Third Fiscal Periods

Financial Indicators

Details of the Financial Indicators

ROA = Current Profits / Average of Total Assets during the Period(Annualized actual days under management: 148 days for first fiscal period,
184 days for the second fiscal period, 181 days for the third fiscal period and
184 days for the fourth fiscal period)

Frist Fiscal Period

Second Fiscal Period

Third Fiscal Period

Fourth Fiscal Period

(%)

1.1

1.6

1.4

1.5

(%)

2.8

3.1

2.8

3.1

(%)

2.1

2.8

2.8

2.7

(%)

5.2

5.6

5.7

5.4

Capital Adequacy Ratio (Term End)

(%)

49.5

54.6

45.6

53.6

Loan to Value Ratio (LTV1)

(%)

41.2

37.2

46.4

38.9

Loan to Value Ratio (LTV2)

(%)

48.0

42.6

51.5

42.4

Capital Adequacy Ratio =Term-End Shareholder Equity / Term-end Total Assets

Debt Service Coverage Ratio (DSCR)

(x)

11.45

11.05

9.95

10.08

LTV 1

= Term-End Interest Bearing Debt / Term-end Total Assets

LTV 2= Term-End Interest Bearing Debt / Term-end Total Property Value

Return on Assets (ROA)(Annualized)
Return on Equity (ROE)(Annualized)

Net Operating Income (NOI)(mil yen)

3,350

4,451

4,970

6,125

Funds from Operation (FFO)(mil yen)

2,193

3,555

3,719

4,727

ROE = Net Income / Average Balance of Stockholders’ Equity for the Term
(Annualized actual days under management: 148 days for first fiscal period,
184 days for the second fiscal period, 181 days for the third fiscal period and
184 days for the fourth fiscal period)

DSCR = Net Income before Interest / Interest Expenses
NOI= Rental Income - Rental Expenses + Allowance of Depreciation

FFO= Net Income + Allowance of Depreciation+ Amortization of Issuance Cost of Corporation Bonds

13

Cash Flow Statement
Item
I. Cash Flow from Operating Activities
Income before income taxes
Depreciation and amortization
Amortization of long-term prepaid expenses
Amortization of issuance cost of corporate bonds
Interest income
Interest expense
Increase / decrease in rental receivables
Increase / decrease in consumption tax refundable
Increase / decrease in trade accounts payable
Increase / decrease in other payables
Increase / decrease in consumption tax refundable
Increase / decrease in prepayments received
Increase / decrease in deposits received
OthersSubtotalInterest received
Interest paid
Corporate tax paid
Cash Flow from Operating Activities
II. Cash Flow from Investing Activities
Payments for purchases of properties
Payments for purchases of entrusted tangible fixed assets

Purchases of intangible assets
Payments for lease deposits received
Payments for security deposits
Payments of long-term prepaid expense
Cash Flow for Invensment Activities
III. Cash Flow from Financing Activities
Proceeds from short-term borrowings
Payments for the repayment of short-term borrowings

Proceeds from long-term borrowings
Proceeds from the issuance of corporate bonds
Payments of the issuance cost of corporate bonds
Proceeds for investment unit issuance
Payments of dividends
Net Cash provided by Financing Activities
IV. Net Increases in Cash and Cash Equivalents
V. Cash and Cash Equivalents at beginning of Period
VI. Cash and Cash Equivalents at end of Period

Thrid Fiscal Period

Fourth Fiscal Period

Nov. 1, 2004 - Apr. 30, 2005

May 1, 2005 - Oct. 31, 2005

Amount (1,000 yen)Amount (1,000 yen)

2,682,215
1,023,261
604
14,855▲ 115
415,669
13,068▲ 399,402▲ 4,090▲ 64,581▲ 18,599
240,568▲ 910▲ 66,743
3,835,799
115▲ 361,105▲ 961
3,473,848

3,485,074
1,229,069
725
14,855▲ 130
520,438▲ 22,150
395,661
211,017
15,543
157,601
1,281
13,9006,022,886
130▲ 514,602▲ 1,043
5,507,370▲ 34,556,712▲ 98▲ 347,061
2,275,868▲ 10,214▲ 32,638,218▲ 27,286,701▲ 561,173
1,630,814▲ 200,000▲ 26,417,060

21,000,000▲ 10,500,000
11,500,000
10,000,000▲ 89,130▲ 2,596,397
29,314,472
150,10221,217,449
21,367,552

19,000,000▲ 22,500,000
32,441,732▲ 2,683,024
26,258,708
5,349,018
21,367,552
26,716,571

14

Debt Financing
As of the end of the fourth fiscal period (end of Oct. 2005)
LenderShort-term debt(includes the long-term
debt to be paid
w ithin one year)

Short-term debt total

Am ount(billion yen)

TypeInteres t Rate

Maturity

6 Finaicial
Ins titutions

3.0

Floating

0.49083% p.a.（Jun. 29, 2005 - Nov. 29, 2005）

Nov. 29, 2005

5 Finaicial
Ins titutions

5.0

Floating

0.36583% p.a.（Jun. 29, 2005 - Dec. 9, 2005 ）Dec. 9, 2005

6 Finaicial
Ins titutions

11.0

Floating

0.49000% p.a.（Sep. 28, 2005 - Dec. 28, 2005 ）Dec. 28, 2005

3 Finaicial
Ins titutions

2.0

Floating

0.47000% p.a.（Aug. 26, 2005 - Feb. 26, 2006 ）Feb. 26, 2006

5 Finaicial
Ins titutions

7.5

Floating

0.60000% p.a.（Aug. 26, 2005 - Feb. 26, 2006）

Feb. 26, 2006

15 Finaicial
Ins titutions―

Unsecured
Unguaranteed

28.5

―

9 Finaicial
Ins titutions

12.5

Fixed
(Note 1)1.14500% p.a. (Weighted av erage interest rate adjus ted with ef f ects of interes t rate
swap (adjus tm ent of interes t rate))

Dec. 8, 2006

2 Finaicial
Ins titutions

3.0

Fixed

1.04500% p.a.

Dec. 8, 2006

1 Finaicial
Ins titutions

2.0

Floating

0.65000% p.a （Aug. 29, 2005 - Feb. 28, 2006 ）Aug. 28, 2007

7 Finaicial
Ins titutions

8.5

Fixed
(Note 3)

1.00625% p.a. (Weighted av erage interest rate adjus ted with ef f ects of interes t rate
swap (adjus tm ent of interes t rate))

Dec. 8, 2007

6 Finaicial
Ins titutions

7.5

Fixed
(Note 2)1.22500% p.a. (Weighted av erage interest rate adjus ted with ef f ects of interes t rate
swap (adjus tm ent of interes t rate))Feb. 26, 2008

1 Finaicial
Ins titutions

3.0

Fixed

1.05250% p.a

Feb. 26, 2008

5 Finaicial
Ins titutions

8.0

Fixed
(Note 1)

1.66750% p.a. (Weighted av erage interest rate adjus ted with ef f ects of interes t rate
swap (adjus tm ent of interes t rate))

Dec. 8, 2008

4 Finaicial
Ins titutions

5.0

Fixed

1.51625% p.a

Dec. 8, 2008

1 Finaicial
Ins titutions

3.0

Fixed
(Note 2)

1.77500% p.a. (Weighted av erage interest rate adjus ted with ef f ects of interes t rate
swap (adjus tm ent of interes t rate))Feb. 26, 2010

1 Finaicial
Ins titutions

1.0

Fixed

1.50625% p.a

Feb. 26, 2010

1 Finaicial
Ins titutions

1.0

Fixed

1.75250% p.a

Feb. 26, 2013

Long-term debt total

20 Finaicial
Ins titutions

54.5

―

―

―

―

Subtotal

26 Finaicial
Ins titutions

83.0

―

―

―

―

Firs t corporate bondPrivately
subscribed

5.0

Fixed

1.85% p.aMar. 16, 2015

Second coporate bondPrivately
subscribed

5.0

Fixed

2.47% p.aMar. 16, 2020

Subtotal

―

10.0

―

―

―

―

Total

―

93.0

―

―

―

―

Long-term debt―

Rem arks―

Unsecured
Unguaranteed

Unsecured
Unguaranteed

Note 1 : Interest rate swap agreement effective as of Dec. 8, 2003.
Note 2 : Interest rate swap agreement effective as of May 27, 2004.
Note 3 : Interest rate swap agreement effective as of Dec. 8, 2004.

15

Shareholder Status
Breakdown of Financial Institutions

Number of Shareholders per Owner
Individuals
13,449(96.4%)End of the Third
fiscal period（as of the end of
Apr. 2005）（Unit: Number of shares）
Financial Institutions (incl. security companies) :Other domestic corporations :Overseas corporations :187(1.3%)
261(1.9%)57(0.4%)

Third Fis cal Period

Total investors
13,954
Individuals
15,284(96.2%)End of the Fourthfiscal period（as of the end ofOct. 2005）

Financial Institutions (incl. security companies) : 200(1.3%)
Other domestic corporations :258(1.6%)
Overseas corporations :142(0.9%)

Fourth Fiscal PeriodBanks49,88327.0%

53,38823.2%

Trust Banks

32,95217.8%

51,69122.5%

Lif e insurance campanies

6,781

3.7%

9,917

4.3%

Non-lif e insurance campanies

3,659

2.0%

4,488

2.0%

20,036113,311

10.9%
61.4%

21,181
140,665

9.2%
61.2%

Other f inancial institutions

Total

Top 10 Shareholders

Total investors
15,884

Ratio

Name of Shareholders

No. of share owned

1Japan Trustee Services Bank, Ltd.
(Trust Department)

22,96410.0%

2

Nomura Real Estate Development
個人その他 Co., Ltd.

11,5005.0%

3

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

8,518

3.7%

4

Trust & Custody Services Bank, Ltd.
(Security Investment Trust Department)

8,303

3.6%

5

Nikko Citi Trust and Banking Corporation(Investment Trust Department)

7,960

3.5%

（第3期末）

6

Kawasaki Gakuen

6,000

2.6%

units issued
184,650

7

American Life Insurance Company GAL

5,309

2.3%

8

The Gibraltar Life Insurance Co., Ltd.
(General Accounting and others)

4,811

2.1%

9

National Mutual Insurance Federation ofAgricultural Cooperatives

3,993

1.7%

10 The Chugoku Bank, Ltd.

3,479

1.5%

Total

82,837

36.0%

0%

25%

50%

75%

100%

Number of Investment Units per Owner
Individuals
38,258(20.7%)End of theThird fiscal period（as of05/4末
the end of
Apr. 2005）

Financial Institutions(incl. security companies)
140,665（61.2%）

Individuals
40,788(17.7%)End of the
Fourth fiscal period
05/10末（as ofthe end of
Oct.
2005）
（第4期末）

Other domestic Overseas
corporations corporations
24,002
9,079（13.0%）（4.9%）

Financial Institutions(incl. security companies)
113,311（61.4%）

Other domestic
corporations
25,621（11.1%）

Overseas
corporations
22,896（10.0%）

units issued
229,970

0%

25%

50%

75%

100%

30.8%

(Reference) Ration owned by the top 10 shareholders at the end of the third period: 35.5%

16

Fifth Fiscal Period Forecasts (the Period Ending April 2006)
Item
Rental Revenue
Other Rental Revenues
Total Rental Revenues
Outsourcing Expenses
Property and Other Taxes
Utility Expenses
Insurance Expenses
Repairs and Maintenance
Other Expenses
Depreciation
Total Rental Expenses
Rental Profits
Asset Management Revenues
Selling and Administrative Expenses

Operating Revenues and Expenses
Non-Operating Revenues
Non-Operating Expenses
Non-Operating Revenues and Expenses

Current Profit
Net Income before Taxes
Corporate Tax, Residence Tax, and Enterprise Tax

Adjusted Corporate Tax
Net Income
Retained Earnings
Retained Earning Carried over from Previous Period
Issued and Outstanding Units at End of Fiscal Period (units)

Cash Distribution Per Unit

Fourth Fiscal Period(million yen)

7,709
931
8,641
833
614
711
21
213
121
1,229
3,745
4,896
629
155
4,111
9
635
▲626
3,485
3,485
1
0
3,484
0
3,484

Fifth Fiscal Period Projection Compared to the Prev ious Period(million yen)(million yen)

8,777
941
9,718
1,042
673
710
22
318
112
1,432
4,310
5,408
805
167
4,435
915
▲915
3,519
3,519
1
0
3,518
0
3,518

229,970229,970

15,150 yen

15,300 yen

(%)

1,067
9
1,077
208
58
▲1
0
104
▲8
202
565
512
175
12
324
▲9
279
▲289
34
34
0
0
34
－
－

13.8
1.0
12.5
25.0
9.5
▲0.2
1.0
49.2
▲7.2
16.5
15.1
10.5
27.9
7.9
7.9
▲100.0
44.1
46.2
1.0
1.0
19.0
0.0
1.0
－
－

－
150 yen－
1.0

Rental Revenues
The forecast assumes that the fifth fiscal period will commencewith 23 properties in the portfolio and there will be no
acquisition during the period other than that of the Nishi
Shinjuku Showa Bldg., Sendai Chowa Bldg., Osaka Chowa
Bldg., and Hiroshima Chowa Bldg. on November 30, 2005 (27properties).

Property and Other Taxes
As for property and urban planning taxes during the fifth fiscal
period, amount that corresponds to the period is recorded as
expenses for the 24 of the 27 properties, which are properties
owned at the end of the fourth fiscal period and those acquired
after the end of the above period.

Other Rental Business Revenues：
Monthly parking revenues, revenues received asutility expense, facility usage charges, etc.
Other Expenses:
Trust fees, commission paid, others including repairs
and maintenance expense
Selling and Administrative Expenses:
Asset custody charge, clerical work outsourcing expense,
accounting auditor’s compensation, etc.
Non-Operating Revenues:
Interest on consumption tax refund, interest earned,
penalties received, etc.
Non-Operating Expenses:
Interests paid, Investment Corporation Bonds interest,
expense incurred in financing, etc.

17

4. Fund Management Results18Investment Results
Investment Environment in the Fourth Fiscal Period

Major Activities during the Fourth Fiscal Period

Decrease in the number of properties for sale offered by companies
affiliated with financial institutions
Increase in the amount of information on properties for future
development before implementation of the same (Information on land)
Increase in the number of properties owned by business corporations
due to lowering cap rates

Investment in 4 properties on which information was
obtained directly from the information network

Properties increasingly held by private funds

The Group’s Asset Management Business Platformworked successfully to its fullest potential.

The amount of information on properties has been mostly
the same as that during the previous fiscal period.

Promotion of regional diversification of theportfolio

Polarization is seen in “qualities” of properties.
＜Amount of information on properties obtained＞
obtained＞
2005

Number of information
on properties

Number of properties
considered

May

Jun.

Jul.

Aug.

Sep.

Oct.

127

253

219

101

126

108

96

Number of properties being
considered

10

Total for the (Ref.) Results
Fourth Fiscal of the Third
PeriodFiscal Period

934

1,018

AAdiverse
diverseinformation
informationnetwork
networkbased
basedononsensesenseofoftrust
trust
The
Thegroupgroupsystemsystemtaking
takingadvantage
advantageofofinformation
information
Management
capabilities
andportfolio
robustness
Management capabilities and portfolio robustnessthat
thatenableenablesoundsoundinvestment
judgment
investment judgment

19

Properties Acquired in the Fourth Fiscal Period
Toshin Tameike Bldg.

Yanagibashi Sanshin Bldg.

Asahi Seimei Yokohama Nishiguchi Bldg.

Kawasaki Higashiguchi Sanshin Bldg.

Property Features:

Property Features:

Property Features:

Property Features:

Located in one of the major business areas
near the west exit of Yokohama Station

Capable of meeting the demand for versatile officespaces in front of the Kawasaki Station

Office building suitable for urban business services

Located in the Meieki area where the demand fromtenants is rapidly growing

Location: Kitasaiwai, Nishi-ku, Yokohama,

Location: Ekimae Honcho, Kawasaki-ku,

Kanagawa

Kawasaki, Kanagawa

Total Floor Space: 10,055.13㎡（3,041.67 tsubo）

Total Floor Space: 10,932.69㎡（3,307.13 tsubo）

Acquisition Price: 5,050 mil. yen

Acquisition Price: 9,500 mil. yen

Location: Akasaka, Minato-ku, Tokyo
Total Floor Space: 6,478.50㎡（1,959.74 tsubo）
Acquisition Price: 7,400 mil. yen

Location: Meieki-Minami, Naka-ku, Nagoya,
Aichi

Total Floor Space: 7,363.25㎡（2,227.38 tsubo）
Acquisition Price: 3,550 mil. yen

20

Investment Activities Taking Advantage of the Group Platform
Platform for the Asset Management Business of Nomura Real Estate Groupcapable of addressing a wide variety of asset classes
Bulk Properties of Various Property Types

Core
Core Office
OfficeOthersOthers

NomuraNomura Real
Real Estate
Estate Asset
Asset Management
Management

NomuraNomura Real
Real Estate
Estate Investment
Investment Management
Management

Listed REIT

Privately Placed Real Estate
Investment Fund

N
NO
O FF

FundⅠ
FundⅠ

Fund
Fund ⅡⅡ

Object:Object: Offices
Offices
Type
Type :: MidMid- toto Long-Term
Long-Term
StableStable Fund
Fund

Object:Object: Residential
Residential Buildings
Buildings
Type:
MidType : Mid- toto Long-Term
Long-Term
StableStable Fund
Fund

Object:Object: Offices,
Offices, Commercial
Commercial
Buildings,
Buildings, andandOthers
OthersTypeType :: Opportunity
Opportunity Fund
Fund

Ⅲ
Ⅲ Ⅳ
Ⅳ ・・・
・・・

Platform for the Asset Management Business of Nomura Real Estate Group21

New Investments after Settlement
Nishi-Shinjuku Showa Bldg.

Sendai Chowa Bldg.

Osaka Chowa Bldg.

Hiroshima Chowa Bldg.

Property Features:

Property Features:

Property Features:

Property Features:

Located in one of the busy business districts
in front of the west exit of Shinjuku Station

Located at the center of Sendai’s major business district

Large scale building facing Midosuji Boulevard,
the prime business district in Osaka City

Located at the center of the business andcommercial district in Hiroshima City

Location: Nishi-Shinjuku, Shinjuku-ku, Tokyo

Location: Ichibancho, Aoba-ku, Sendai, Miyagi

Location: Kawaramachi, Chuo-ku, Osaka, Osaka

Location: Tatemachi, Naka-ku, Hiroshima, Hiroshima

Total Floor Space: 10,902.22㎡（3,297.92 tsubo）*1

Total Floor Space: 12,977.45㎡（3,925.67 tsubo)

Total Floor Space: 21,007.98㎡（6,354.9 tsubo)

Total Floor Space: 8,206.91㎡（2,482.59 tsubo)

Acquisition Price: 3,200 mil. yen

Acquisition Price: 12,900 mil. yen

Acquisition Price: 2,100 mil. yen

5,858.26㎡（1,772.12 tsubo）*2*1： Entire building *2： Exclusive area owned

Acquisition Price: 8,800 mil. yen

22

Portfolio Diversity (1) “Asset Data”
Location Diversity (based on acquisition price)
End of Third Fiscal PeriodEndof Third(endof Apr.Fiscal
2005)Period(end of Apr. 2005)
Other Regional Cities

End of Fourth Fiscal Period
End(endof Fourthof Oct.Fiscal
2005)Period(end of Oct. 2005)

Central Tokyo

10.0%

78.7%

Tokyo Suburbs

Fifth Fiscal Period
Fiscal(as Fifthof Dec.
20,Period
2005)(as of Dec. 20, 2005)

Other Regional Cities
Central Tokyo

10.5%

72.6%

Other Regional Cities

Central Tokyo

17.0%

68.1%

Tokyo Suburbs

11.3%

16.9%

Tokyo Suburbs

14.9%

Portfolio Diversity (top 10 and other properties / based on acquisition price)

Other
9 properties

End of Third Fiscal PeriodEndof Third(endof Apr.Fiscal
2005)Period(end of Apr. 2005)

16.0%

End of Fourth Fiscal Period
End(endof Fourthof Oct.Fiscal
2005)Period(end of Oct. 2005)

Shinjuku Nomura Bldg.

Shinagawa NF Bldg.

21.0%

3.0%

23.8%

Shinjuku Nomura Bldg.
18.4%

Shinjuku Nomura Bldg.

Other 17 properties

16.3%

29.2%

Technoport Kamata B

Nomura Osaka
Bldg.

3.1%
Toshin Tameike Bldg.

3.5%

T.T. Landic
Toyo-Cho Bldg

3.5%

Technoport
Kamata B

T.T. Landic
Toyo-Cho Bldg

3.5%
JAL Building

T.T. Landic
Toyo-Cho Bldg

17.9%

4.1%

3.6%
Kawasaki Higashiguchi
Sanshin Bldg.
4.5%

Isuzu Shiba Bldg.
5.4%
NOF Shibuya
Koen-Dori Bldg.
6.5%

Other 13 properties

Fifth Fiscal Period
Fiscal(as Fifthof Dec.
20,Period
2005)(as of Dec. 20, 2005)

Tennozu
Park Side Bldg.
8.0%

ItopiaNihonbashi Bldg.
11.2%

Isuzu Shiba Bldg.
4.8%
NOF Shibuya Koen-Dori Bldg.
5.7%

JAL Building
14.0%

3.2%
JAL Building
15.7%
ItopiaNihonbashi Bldg.
9.8%
Tennozu
Park Side Bldg.
7.0%

Nishi-Shinjuku
Showa Bldg.

ItopiaNihonbashi Bldg.

3.7%.
Kawasaki Higashiguchi
Sanshin Bldg.

8.7%
Tennozu
Park Side Bldg.

4.0%
Isuzu Shiba Bldg.
4.2%

6.2%
NOF Shibuya
Koen-Dori Bldg.
5.1%

Osaka Chowa Bldg.
5.4%

23

Portfolio Diversity (2) “Tenant Data”
Top 10 Tenants (per leased floor space)Industry Breakdown (per leased floor space)
As of end of fourth fiscal period (end of Oct. 2005)

As of end of fourth fiscal period (end of Oct. 2005)
TenantIndustry

Property

Expected contract
expiration date

Leased floors pace (m 2)Percentage in
portfolio (%)(ref.) As of the End of
Third Fiscal Period(%)

Other Financial 1.5%

1Flags hip Properties Private
Company

Real Es tate

JAL BuidlingMar. 31, 2015

42,084.11

16.5

18.1

2

XYMAX Corporation

Real Es tate

T.T. Landic
Toyo-cho Bldg.

Nov. 30, 2009

18,218.17

7.2

7.8

Electronic
Devices

Technoport
Kamata B
Faret Tachikawa
Center SquareShin-Yokohama
Nikko Bldg.
Nomura Os aka
Bldg.

3

FUJITSU LIMITED

Shinjuku Nomura Bldg.

45

Nomura Real Estate
Development Co., Ltd.

Nomura Facilities Co., Ltd

Real Es tate

Real Es tate

Nomura Os aka
Bldg.
NomuraYotsubashi Bldg.

1.6

Dec. 31, 2005

501.350.2

0.2

Sep. 30, 2006

6,547.74

2.6

2.8

Investment
Banking 2.3%

Dec. 31, 2006

809.150.3

0.3

Construction 2.4%

Nov. 30, 2013

3,601.65

1.4

1.6

Nov. 30, 2013345.370.1

0.1

Nov. 30, 2013

1,266.19

0.5

0.5

May 31, 2008

1,206.55

0.5

0.5

Utsunomiya NF Bldg.

Dec. 9, 2005

1,072.69

0.4

0.5

Nomura Hiroshima
Bldg.

Mar. 31, 2007

2,834.48

1.1

1.2

Wholes ale

Surugadai Plaza
Bldg.

Apr. 30, 2007

4,160.94

1.6

1.8

7

Ito-Yokado Co., Ltd.

RetailTechnoport
Kamata B

Oct. 31, 2005

3,652.38

1.4

1.6

IT

Tennozu Park Side
Bldg.

Feb. 28, 2007

3,598.83

1.4

1.5

Res idential Itopia Nihonbashi
Materials
Bldg.

Feb. 14, 2007

3,221.93

1.3

1.4

Shinagawa NF
Bldg.

Feb. 28, 2007

2,375.87

0.9-

99,196.79

39.0

9

DAIKEN CORPORATION

10CROSSCAT Co., Ltd.
Total

IT

11.2%

1.5

Shinjuku Nomura Bldg.

Other 15 Industries
IT/Communication

Other Manufacturing 1.9%

3,699.38

FUJI XEROX OFFICESUPPLY

Corporate Software Limited

Chemicals 1.7%

Mar. 31, 2007

6

8

Warehouse / Transport 1.7%

18.1%
Medical 2.1%

Air Transportation
17.4%

Insurance 3.3%

Retail 4.8%

Real Estate 4.8%

Services
9.7%

Wholesale
8.6%

Electronics
8.6%

Note: Breakdown based on sub-lessee’s industry in case the space is sublet.

Status of Stable Leasing Contracts
Percentage of stable contracts (remaining lease term of three years or longer)at the end of the fourth fiscal period (end of Oct. 2005): 27.2% (per leased floor space): 22.4% (per contract rent)24

Results of the Asset Management Activities

The rental revenue increased.

The effects of reduction in repairs and maintenance expenses andutility expense became apparent.

Renovation works were properly implemented.

The term-end appraised value increased.

Enhancement
Enhancementof
ofportfolio
portfoliocapabilities
capabilitiesto
to realize
realizestablestableearnings
earnings

25

Increase in Rental Revenues
Increase in Rental Revenues
Based on the 18 properties owned at the beginning of the Third Fiscal Period
A high portfolio occupancy rate has been successfully maintained.
Third
ThirdFiscal
FiscalPeriod
PeriodTotal
Totalamountamountof
ofrentalrentalrevenues
revenues

FourthFourthFiscal
FiscalPeriod
PeriodTotal
Totalamountamountof
ofrentalrentalrevenues
revenues

Approx. 6,395 mil. yen

Approx. 6,126 mil. yen

The effects of renovation of NOF Shibuya Koen-dori Building
have contributed positively throughout the fiscal period.

+ Approx. 268 mil. yen

Increase in the number of rent raise and decrease in the numberof rent reduction（ + Approx. 4.4%）

The level of rents for new tenants has been upgraded.
⇒ The average rents of 4 properties increased.

Trend of Rents for Tenantswith Renewed Lease Agreements
Number of rent revision
50
100%
4.0%

46
6.5%

54
1.9%

Securing of Stable Portfolio Occupancy Rate
48
Rents
Increased

Third Fiscal Period（Actual percentages）

100.0%

Fourth Fiscal Period（Actual percentages）

Fifth Fiscal Period（Prospects）

14.6%
80%

97.6%

52.0%
60%

97.2% 97.3%

96.9% 97.1%

97.3% 97.2% 97.4%

97.0%

94.9%

Rents
Unchanged

83.3%

97.7% 97.8% 97.8% 97.7%

95.7% 95.9% 96.0%

95.0%

69.6%

98.1%

72.9%
40%
90.0%

東京都心部
Central
Tokyo

20%

44.0%

Tokyo
Suburbs
東京周辺部
Other
Regional Cities
地方都市

23.9%
14.8%

12.5%

Rents
Decreased

Average
全体平均
85.0%

0%
First Fiscal Period

Second Fiscal Period

Third Fiscal Period

Fourth Fiscal Period

End of Nov. 2004
（Beginning of theThird Fiscal Period）

End of Apr. 2005
（End of the Third
Fiscal Period)

End of Oct. 2005
（End of the FourthFiscal Period）

End of Apr. 2006
（End of the Fifth
Fiscal Period）

26

Increase of Rental Expense Efficiency andSecuring of Property Competitiveness
Reduction of Repairs and Maintenance Expenses and Utility Expense
Based on the 15 properties owned at the beginning of the Second Fiscal Period
SecondSecondFiscal
FiscalPeriod
PeriodRepairs
Repairsand
and Maintenance
MaintenanceExpense
Expense Paid
Paid
Basic
Electricity
Rate
Basic Electricity Rate Paid
Paid

FourthFourthFiscal
FiscalPeriod
PeriodRepairs
Repairsand
and Maintenance
MaintenanceExpense
Expense Paid
Paid
Basic
Electricity
Rate
Basic Electricity Rate Paid
Paid

▲Approx. 45 mil. yen（ ▲ Approx. 6.2%）

Approx. 732 mil. yen

Approx. 687 mil. yen

Results of the discussions for expense reduction held up to the Third
Fiscal Period
Effects of the energy control system of the Shinjuku Nomura Bldg.
Improvement of the operation efficiency of the management union of
the compartmentalized ownership*The above amounts to about 2.9% reduction in rental expense (excluding the depreciation expense and property and other taxes) compared tothe expense for the first fiscal period for the 15 properties owned at the beginning of the second fiscal period on a semi-annualized basis.

Securing of Property Competitiveness（Examples of Renewal Works Conducted during the Fourth Fiscal Period ）Asahi-Seimei Yokohama Nishiguchi Bldg.
Renewal of the interior of the entrance andthe standard floor common area

Nomura Osaka Bldg.
Renewal of the interior of theentrance

Before Renewal

Before Renewal

Before Renewal

After Renewal

After Renewal

After Renewal

Major Works Scheduled during the Fifth
Fiscal Period or after*Including the works completed and paid before the end of the fourth fiscal period.
Estimate
Work DetailPurpose(million y en)
Renewals of the shop area /improv ement
Shinjuku Nomura Bldg.
common area of the f irstof earning450*
basement
capacity
improv ement
Renewals of the interior of the
Shinjuku Nomura Bldg.
of earning
435*
common area on standard f loors
capacity
improv ement
Shinjuku Nomura Bldg.
Renewals of plumbing
177*
of f unctions
Renewals of ducts f or heat
improv ement
Itopia Nihonbashi Bldg.
170
sources / AHUof f unctions
improv ement
Shinagawa NF Bldg.
Renewals of the wall-through unit
200of f unctions
improv ement
NOF Shibuy a Koen-dori Bldg.
Renewals of the main entranceof earning
25
capacity
improv ement
Kawasaki Higashiguchi Sanshin
Increasing electric capacityof earning
20
Bldg.
capacity
Renewals of thermal accumulation improv ement
Shin-Yokohama Nikko Bldg.
50
units f or air conditionersof f unctions
Renewals (promoting barrier-f ree
improv ement
Nomura Osaka Bldg.
env ironments) of the commonof earning
22
area
capacity
Property

Nomura Y otsubashi Bldg.

Renewals of outer wall seals

updating

56

Nomura Y otsubashi Bldg.

Renewals of the CMS (Central
Monitoring Sy stem)

improv ementof f unctions

40

27

MoveMove-Ins / Outs
Breakdown of Move-Ins / Outs Area

Portfolio Occupancy Rate (as the end of the fourth fiscal period)

Move-ins area: 906 tsubo (2,996m2)
1.2% of weighted average floor space during the period

19 properties at the beginning of the periodMove-outs area : 1,409 tsubo (4,660m2)
1.9% of weighted average floor space during the period

23 properties at the end of the period

97.5% ▲0.6 points compared to the previous period
97.3% ▲0.8 compared to the previous period

Area that corresponds to move-ins / outs during the period
move-ins exceeds move-outs by 503 tsubo (1,663m2)（tsubo） （坪）400

Nomura Hiroshima Bldg.

Kobe Kaigan Bldg.

Nomura Yotsubashi Bldg.

Nomura Osaka Bldg.

Yanagibashi Sanshin Bldg.

Utsunomiya NF Bldg.

Shin-Yokohama Nikko Bldg.

Kawasaki Higashiguchi Sanshin Bldg.

Faret Tachikawa Center SquareTechnoport Kamata B

T.T. Landic Toyocho Bldg.

Seiwa Shinjuku Bldg.

Surugadai Plaza Bldg.

Shinagawa NF Bldg.

Toshin Tameike Bldg.

Isuzu Shiba Bldg.

NOF Shibuya Koen-dori Bldg.

Tennozu Park Side Bldg.

-200

Itopia Nihonbashi Bldg.

-100

JAL Building

0

Shinjuku Nomura Bldg.

100

Kanda Iwamoto-cho Tosei Bldg.

200

Asahi Seimei Yokohama Nishiguchi Bldg.

300

-300

-400

入居

Move-ins

退去
Move-outs

28Period-End Value (Appraisal Value)

Other Cities

Vicinity of Tokyo

Central Tokyo

Property
Shinjuku Nomura Bldg.
JAL Bldg.
Itopia Nihonbashi Bldg.
Tennnozu Park Side Bldg.
NOF Shibuya Koen-dori Bldg.
Isuzu Shiba Bldg.
Toshin Tameike Bldg.
Shinagaw a NF Bldg.
Surugadai Plaza Bldg.
Kanda Iwamoto-cho Tosei Bldg.
Seiw a Shinjuku Bldg.
Central Tokyo Total
T.T. Landic Toyo-cho Bldg.
Technoport Kamata B
Faret Tachikaw a Center Square
Kawasaki Higashiguchi Sanshin Bldg.
Asahi Seimei Yokohama Nishiguchi Bldg.

Shin-Yokohama Nikko Bldg.
Vicinity of Tokyo Total
Utsunomiya NF Bldg.
Yanagibashi Sanshin Bldg.
Nomura Osaka Bldg.
Nomura Yotsubashi Bldg.
Kobe Kaigan Bldg.
Nomura Hiroshima Bldg.
Other Cities Total

Total

Acquisition Price

Amount on Balance Sheetat the end of the FourthFiscal Period

Amount at the End of
the Fourth Fiscal Period(million yen)(million yen)(million yen)

38,73033,08020,60014,80012,00010,000
7,400
5,500
5,150
3,080
2,280
152,620
7,550
6,430
3,290
9,500
5,050
3,600
35,420
2,970
3,550
6,410
3,940
3,280
1,930
22,080210,120(B) - (A)(million yen)

38,79334,081
20,51814,378
12,616
10,255
7,646
5,399
5,238
3,076
2,294
154,301
7,297
6,374
3,183
9,775
5,112
3,501
35,245
2,840
3,666
6,383
3,829
3,162
2,137
22,019211,566

41,00030,94021,40016,20014,00010,300
7,400
5,740
5,410
3,340
2,410
158,140
7,950
6,870
3,900
9,590
5,560
3,680
37,550
3,190
3,560
6,950
4,600
3,310
2,080
23,690219,380(A)(B)

Difference Betw een the amounts on thebalance sheet and the period-end value

Amount at the End of Dif f erence in Amounts between the
Third and Fourth Fiscal Period
the Third Fiscal Period

39,40030,94020,50014,90014,000
10,200*7,400
5,470
5,310
3,240
2,350
153,710
7,660
6,740
3,650
* 9,570* 5,050
3,470
36,1403,140* 3,560
6,820
4,340
3,200
1,960
23,020212,870(million yen)percentage

1,600
900
1,300
100
270
100
100
60
4,430
290
130
250
20
510
210
1,410
50
130
260
110
120
670
6,510

4.1%
4.4%
8.7%
1.0%
4.9%
1.9%
3.1%
2.6%
2.9%
3.8%
1.9%
6.8%
0.2%
10.1%
6.1%
3.9%
1.6%
1.9%
6.0%
3.4%
6.1%
2.9%
3.1%

* Appraisal value at acquisition

7,814(million yen)29

Results of Financial Activities
Fluctuations in Long-Term Yields （10-year JGB)（％）
1.8

Major Achievements in the Fourth Fiscal Period（2004/12/1～2005/12/16）

Capital increase(Issuance of additional investment units）

1.6
1.4

Implementation of shelf registration for theissuance of publicly-offered
Investment Corporation Bonds

1.2
1.0
2004/12

2005/4

2005/12

2005/8Source: Bloomberg

Progress in the discussion
on the effective use of security deposit

Purposes of Making a Well-Balanced Portfolioof Interest-Bearing Debts
To properly control the level of LTV ratio
To promote longer repayment periods and fixed interest rates
To avoid the concentration of debt maturity dates（Average remaining repayment period: 4-5 years)
To secure versatile fund-raising measures

Securing
Securing ofoffundfund raisingraising capabilities
capabilitiesthat
thatenablessustainableenables sustainablegrowth
growthTo efficiently manage the funds （Security deposits, etc.）30

Outline of the Capital Increase and the Shelf Registrationof the Investment Corporation Bonds
Issuance of Additional Investment Units(Capital Increase)

Shelf Registration Concerning
the Issuance of the Investment Corporation Bonds

Outline of the capital increase

Outline of the shelf registration

NumberNumber ofof new
new investment
investment units
units issued
issued public
public offeringoffering::
Third
Third party
party allotment
allotment::

44,00044,000
1,320
1,320

Offer
Offer priceprice(yen/unit)(yen/unit) ::Issue
Issue priceprice(yen/unit)(yen/unit) ::740,782
740,782
715,837
715,837

Total
Total amountamount raised
raised(million(million yen)yen) ::
Date
Date ofof resolution
resolution authorizing
authorizing thethe issuanceissuance ::32,44132,441
April
April 11 andand 18,18, 2005
2005
May
May 1,
1, 2005
2005 (public(public offering）
offering）

Payment
Payment datedate::May
May 24,24, 2005
2005(third(third party
party allotment)
allotment)

・Total・Total number
number ofof investment
investment units
units issued:
issued:・Totalamountofinvestment(million・Total amount of investment (million yen):
yen):

PeriodPeriod during
during which
which thethe bonds
bonds may
may bebe issued
issued ::October
October 7,
7, 2005
2005 -- October
October 6,
6, 2007
2007
Useofproceeds
:
Funds
for
acquiring,
specific
assets,funds
forrepayment
Use of proceeds : Funds for acquiring, specific assets, funds for repayment ofof
debt
debtfinancing,financing,funds
funds forfor redemption
redemption ofof thetheInvestment
InvestmentCorporation
Corporation
Bonds,
Bonds,funds
funds forfor repayment
repayment ofof thethedeposit
deposit andand guarantee
guarantee deposit,
deposit,funds
funds forfor repair
repair andand working
workingcapital,
capital, etc.
etc.

Name

Nomura Real Estate Office Fund, Inc.
Third Series Unsecured Investment
Corporation Bonds (Ranking Pari
Passu among the Specified
Investment Corporation Bonds)

Nomura Real Estate Office Fund,
Inc. Fourth Series Unsecured
Investment Corporation Bonds(Ranking Pari Passu among theSpecified Investment Corporation
Bonds)

Aggregate amountof the issuance

10 billion yen

10 billion yen

Security / guarantee

Unsecured / unguaranteed

Unsecured / unguaranteed

Interest rate

1.19％ per annum

2.05％ per annum

Maturity Date

November 29, 2010 （5-year bond）

November 30, 2015 (10-year bond)Use of proceeds

Funds for the acquisition of the 4 properties* acquired as of November 30,
2005, part of the acquisition expenses, and repayment of debt

229,970229,970
124,610
124,610

Changes in LTV ratio
End of Third Fiscal Period
End of Third Fiscal Period（End of April 2005）（End of April 2005）
46.4％
46.4％

September
September 29,
29, 2005
2005
100
100 billion
billion yen
yen

Brief summary of the Investment Corporation Bonds issued
after the end of the fourth fiscal period （Reference）

Status after the new issuance

Additional
issuance

FilingFiling date
date ofof thetheshelf
shelf registration
registration statement
statement ::Aggregate
Aggregate amountamount ofof thethebonds
bonds thatthat may
may bebe issued
issued ::End of Fourth Fiscal Period
End of Fourth Fiscal Period（End of October 2005）（End of October 2005）
38.9％
38.9％

Newly invested in four properties (with the total acquisition price of
25.5 billion yen) during the fourth fiscal period.

* Nishi-Shinjuku Showa Bldg., Sendai Chowa Bldg., Osaka Chowa Bldg., and Hiroshima Chowa Bldg.

31

Financial Status at the End of the Fourth Fiscal Period
Financial Status ( As of end of the fourth fiscal period）
LTV level （based on the ratio of interest-bearing debt to total assets）
Actual percentage at the end of the fourth fiscal period

38.9％

Average remaining repayment period of long-term debts(including Investment Corporation Bonds)

3.9
3.9years
years（Compared to the third fiscal period ▲7.5％）

Weighted average rate on interest-bearing debts（entire debts）
Continuation
Continuationofofmanagement
managementatataaconservative
conservativelevel
level

Ratios of long-term debt and fixed interest rate debt

1.13%
1.13%
List of Lenders （26 financial institutions in total)（Unit: million yen）
Lender■ Short-term/Long-term ratio

Long-term *64.5 billion yen（69.4%）

Short-term
28.5 billion yen（30.6%）*includes the Investment
Corporation Bonds■ Fixed/Floating ratio

Fixed interest rate *62.5 billion yen（67.2%）

Floating interest rate
30.5 billion yen（32.8%）*includes those converted to fixed rateusing interest rate swaps.

Total amount ofdebt remaining

LenderTotal amount ofdebt remaining

UFJ Bank Limited

10,000

The Hiroshima Bank, Ltd.

1,500

Sumitomo Mitsui Banking Corporation

10,000Mizuho Corporate Bank, Ltd.

1,000

Bank of Tokyo-Mitsubishi Ltd.

9,300

The Yamanashi Chuo Bank, Ltd.

1,000

Mitsubishi UFJ Trust and Banking Corporation

6,400

The Chugoku Bank

1,000

The Sumitomo Trust & Banking Co., Ltd.

6,400

The Bank of Fukuoka, Ltd.

1,000

The Norinchukin Bank

6,400

The Keiyo Bank, Ltd.

1,000

The Dai-Ichi Mutual Life Insurance Company

5,000

Aozora Bank, Ltd.

1,000

The Nomura Trust and Banking Co., Ltd.

4,000

Meiji Yasuda Life Insurance Company

1,000

The Chiba Bank, Ltd.

3,000

Taiyo Life Insurance Company

1,000

Mitsui Life Insurance Company Limited

3,000

Daido Life Insurance Company

1,000

The Iyo Bank, Ltd

2,500

Mitsui Sumitomo Insurance Co., Ltd.

1,000

The Chuo Mitsui Trust and Banking Company, Limited

2,000

Zenkyoren

1,000

The Hachijuni Bank, Ltd.

1,500

Development Bank of Japan
Total Amount of Debt

(Ref.) Investment Corporation Bonds

1,000
83,00010,00032

Financial Status after Settlement （as of Dec. 20, 2005 ）Financial Status （as of Dec. 20, 2005）
LTV level （based on the ratio of interest-bearing debt to total asset）

Average remaining repayment period of long-term debts(including Investment Corporation Bonds)

44.9% as of Dec. 20, 2005 （unaudited）**+6.0% over the end of the Fourth Fiscal Period, by investing
4 additional properties (total acquisition prices: 27 billion yen) in November, 2005.

4.8
4.8 years
years
Weighted average rate on interest-bearing debts（entire debts）

1.21
1.21%
%
Diversification of maturity dates（including Investment Corporation Bonds)

Ratios of long-term debt and fixed interest rate debt
(as of Dec. 20, 2005)■ Short-term/Long-term ratio

Long-term *94.5 billion yen(78.8％）

Short-term
25.5 billion yen（21.3％）■ Fixed/Floating ratio

Fixed interest rate *88.5 billion yen（73.8％）

Floating interest rate
31.5 billion yen（26.3％）（bil. yen）
20

15

10

15

*includes the Investment
Corporation Bonds

5th
Period7th
Period9th
Period11th
Period13th
Period15th
Period17th
19th
Period Period

21stPeriod23rd
Period～～*includes those converted to fixed rateusing interest rate swaps.

25thPeriod33rd
Period(repayment deadline)

33

Appendix

34

Property List
As of end of fourth fiscal period (end of Oct. 2005)
Property
Shinjuku Nomura Bldg.

Central Tokyo

1978.550

117,258.88(Entire building)(1) 81,421.13(2) 25,260.48

31,804.67

30,967.08

97.4%

85

1,262.37

42,084.11

42,084.11

100.0%

1

2,214.55

19,233.28

17,701.04

92.0%

12

2,615.23

18,051.61

18,051.61

100.0%

14

Air Conditioning
System(Coverage)

Each 1/4
floor
Each 1/6
floor

Ceiling
PML (Noteheight (mm)3)

Acquisition Acquisition
Date
Price (mil yen)

2,600

5%

2003.1238,7302,700

6%2005.333,080Each span

2,650

14%

2003.12

20,6001,331.14

Each 1/4
floor

2,650

6%

2004.214,800Tennozu Park Side Bldg.

1995.1

21

29,430.67(1) 43,893.46(2) 17,587.30

NOF Shibuya Koen-dori
Bldg.

Udagawa-cho,Shibuya-ku

1987.985,358.55

3,420.16

3,420.16

100.0%

3

442.38Each span

2,500

12%

2004.912,000Isuzu Shiba Bldg.

Shiba, Minato-ku

1991.3

7

11,425.20

8,165.10

7,675.73

94.0%

10

1,260.41

Each span

2,600

14%

2004.5

10,000Toshin Tameike Bldg.

Akasaka, Minato-ku

1959.896,478.50

4,766.33

4,766.33

100.0%

12

519.06

Each span

2,500

17%

2005.97,400

1987.118

10,077.02

7,850.99

7,850.99

100.0%

5928.2911%

2003.125,500

85,782.27

4,160.94

4,160.94

100.0%

1

626.33

Each floor
Each 1/2
floor

2,600

1997.42,700

6%

2004.2

5,150

1988.7

94,698.97

4,076.38

4,076.38

100.0%

8

480.07

Each floor

2,550

14%

2004.2

3,080

1986.38

3,160.05

2,464.71

2,464.71

100.0%

5

327.66

Each floor

2,500

12%

2004.62,280

1989.117

18,051.08

18,218.17

18,218.17

100.0%

1

1,986.46

Each span

2,550

14%

2003.127,550

13,683.46

13,673.75

99.9%

13

1,148.45

Each span

2,650

10%

2003.12

6,430

2,600

10%

2003.12

3,290

2,550

16%

2005.6

9,500

2,500

14%

2005.5

5,050

Itopia Nihonbashi Bldg.

Shinagawa NF Bldg.
Surugadai Plaza Bldg.
Kanda Iwamoto-cho
Tosei Bldg.
Seiwa Shinjuku Bldg.

Vincity of Tokyo

Nishi-Shinjuku,
Shinjuku-ku

Completion

Occupancy Total No. of Average Floor
2
Area (m )RateTenants

Higashi-Shinagawa,Shinagawa-ku
Nihonbashi Honcho,
Chuo-ku
Higashi-Shinagawa,Shinagawa-ku

JAL Bldg.

Other Cities

Location

No. of Floors
Total Building Area (m2) Rentable Area Leased Floor(above(Note 1)(Note 2)(m2)
Space (m2)ground)Higashi-Shinagawa,Shinagawa-ku
Kanda Surugadai,
Chiyoda-ku
Iwamoto-cho,
Chiyoda-ku
Sendagaya,
Shibuya-ku

T.T. Landic Toyo-cho
Bldg.

Shinsuna, Koto-ku

Technoport Kamata B

Minami-Kamata,Ota-kuFaret Tachikawa Center
SquareKawasaki Higashiguchi
Sanshin Bldg.
Asahi Seimei Yokohama
Nishiguchi Bldg.
Shin-Yokohama Nikko
Bldg.
Utsunomiya NF Bldg.

1996.6

26

1961.48extended in Apr. 1968

1990.9126,853.38

6,532.58

95.3%

16

1,099.32

1988.3

12

10,932.69

8,284.03

8,039.72

97.1%

24

684.62

1985.109

10,055.13

6,817.76

6,631.89

97.3%

27

794.75

1990.10

9

11,149.99

8,074.83

8,074.83

100.0%

3

940.84Each span

2,500

17%

2003.12

3,600

1999.12

10

10,479.63

5,887.40

5,819.24

98.8%

26

664.68Each span

2,700

5%

2003.12

2,970

2,460

14%

2005.9

3,550

2,500

19%

2003.12

6,410

2,650

13%

2003.12

3,940

1994.12

Kawasaki-ku,
Kawasaki-shi

Yanagibashi Sanshin
Bldg.
Nomura Osaka Bldg.

(Whole B bldg.)(1) 33,706.03(2) 6,865.80

Akebono-cho,Tachikawa-shi

Nishi-ku,
Yokohama-shi
Kohoku-ku,
Yokohama-shi
Baba-dori,
Utsunomiya-shi
Nakamura-ku,
Nagoya-shi

11

21,516.54

Each 1/4
floor
Each 1/3
floor
Each 1/8
floor

Each 1/2
floor
Each floor
Auxiliary
Each floor
Auxiliary

1991.312

7,363.25

4,655.74

4,056.9987.1%

6405.96Chuo-ku, Osaksa-shi

1983.12

12

23,522.82

16,977.79

15,851.80

93.4%

25

1,336.52

Nomura Yotsubashi Bldg. Nishi-ku, Osaka-shi

1991.1115

16,845.87

11,558.68

11,013.78

95.3%

16

797.35

Kobe Kaigan Bldg.

Chuo-ku, Kobe-shi

1998.2

16

10,292.93

6,427.01

5,623.22

87.5%

28

528.43

Each span

2,600

7%

2003.123,280

Nomura Hiroshima Bldg.

Naka-ku,
Hiroshima-shi

1,047.54

Each floor
Auxiliary

2,450

11%

2003.12

1,930

7.9%

210,120

Total

1976.7

9

11,950.37

7,911.97

7,628.95

96.4%

16

261,428.50 254,384.00

97.3%

357

Note 1: Total building area is based on the information in registry book.
Note 2: As for the compartmentalized ownership properties (except Technoport Kamata B) the areas are described as: (1) the area of the entire building; and (2) the area of the section exclusively ownedby the Fund.
Note 3: The PML (probable maximum loss) ratios of all the properties are based on the evaluation conducted by the Shimizu Corporation. The PML ratio of the portfolio is entered in the column showing the total.

35

Income and Expenditure per Property（1,000 yen）
Item

Number of Days in Operation
Rental Revenues
Rental revenues(incl. common area charges)

Other revenues

Rental Expenses
Property Management Fees
Property and other taxes
Utility expenses
Insurance espenses
Repairs and Maintenance
Otherexpenses
Depreciation

Rental Profits
Net Operating Income(NOI)
Item

Number of Days in Operation
Rental Revenues
Rental revenues(incl. common area charges)

Other revenues

Rental Expenses
Property Management Fees
Property and other taxes
Utility expenses
Insurance espenses
Repairs and Maintenance
Otherexpenses
Depreciation

Rental Profits
Net Operating Income(NOI)

Shinjuku
Nomura Bldg.

JAL Bldg.*

Itopia Nihonbashi
Bldg.

184 days
1,740,216
1,533,782
206,434
839,207
194,074
190,780
208,995
3,980
22,66339,437179,275
901,0091,080,285

184 days
－
－
－
－
－
－
－
－
－
－
－
－
－

184 days824,791
781,860
42,930277,541
67,066
39,59251,472
1,670
2,798
15,852
99,088547,250
646,338

Technoport
Kamata B

184 days422,218
356,693
65,525
254,853
53,84837,34952,2681,223
35,922
5,728
68,512
167,365
235,877

Tennozu Park
Side Bldg.

184 days792,361
658,400
133,961
412,832
142,862
56,152
41,943
1,863
7,208
2,373
160,429
379,529
539,958

NOF Shibuya
Koen-dori Bldg.

Isuzu ShibaBldg.

184 days
367,474
340,030
27,44383,73915,29723,933
13,151
337
2,110
2,217
26,690283,735
310,425

184 days327,355
286,731
40,624
128,660
20,04325,64922,915
691
7,430
4,679
47,250198,695
245,945

Asahi Seimei
Faret Tachikawa Kawasaki Higashiguchi
Shin-Yokohama
Yokohama Nishiguchi
Sahshin Bldg.
Center Square
Nikko Bldg.
Bldg.

184 days
225,949
203,572
22,377
124,359
34,122
14,61136,361
572
175
6,614
31,901
101,590
133,491

124 days
214,428
183,977
30,451
91,747
18,545－
17,849
461
165
2,378
52,346
122,680
175,027173 days
225,344
193,104
32,24065,202
20,08434
17,937
574
583
3,188
22,799160,142
182,941184 days
－
－
－
－
－
－
－
－
－
－
－
－
－

Utsunomiya
NF Bldg.

184 days
169,746
138,099
31,647
105,852
24,10916,507
17,942
714
3,848
3,842
38,88763,894
102,781

Toshin Tameike Shinagawa NF
Bldg.
Bldg.

33 days
40,604
36,103
4,501
12,346
2,344
0
2,681
66
135
732
6,386
28,25734,644
Yanagibashi
Sanshin Bldg.

33 days
21,42819,604
1,824
15,039
2,198
－
1,894
74
191
153
10,527
6,389
16,917

Surugadai Plaza Kanda Iwamoto- Seiwa Shinjuku
T.T. Landic
Bldg.*
cho Tosei Bldg.
Bldg.
Toyo-cho Bldg.*

184 days259,024
223,235
35,788
129,762
20,715
16,77524,126642
33,3352,307
31,860129,262
161,122184 days
－
－
－
－
－
－
－
－
－
－
－
－
－

184 days
149,382
132,498
16,88445,623
9,927
9,659
8,460
292
997
500
15,785
103,758
119,544

184 days
103,577
88,111
15,46537,993
8,044
8,382
8,711
207
2,007
1,822
8,818
65,58474,402184 days
－
－
－
－
－
－
－
－
－
－
－
－
－

NomuraOsaka Bldg.

NomuraYotsubashi Bldg.

Kobe Kaigan
Bldg.

NomuraHiroshima Bldg.

Total of 23
Properties

184 days
307,377
272,31735,059198,745
43,22332,40635,926982
40,2753,800
42,129108,632
150,761

184 days
192,117
158,419
33,698109,413
24,977
17,787
25,238
854
2,800
3,248
34,50682,704
117,211184 days
207,199
183,256
23,943
95,636
27,574
19,61419,752
679
6,540
9,504
11,970111,562
123,533

184 days
483,890402,728
81,162
237,90761,177
43,69061,777
1,419
16,683
3,497
49,661
245,982295,644

8,641,349
7,709,467
931,8813,745,235
833,441
614,908
711,50921,809213,371
121,243
1,228,952
4,896,114
6,125,066* Rental operating revenues and expenses are not disclosed for these properties as result of unavoidable circumstances.
However, the “total of 23 properties” includes the figures concerning the properties marked with an asterisk.

36

Portfolio Map

37

Photos of Properties （27 Properties as of December 20, 2005）
02

01

Shinjuku Nomura Bldg.

10

Surugadai Plaza Bldg.

19

03

JAL Building

11

Kanda Iwamoto-cho
Tosei Bldg.

20

Sendai Chowa Bldg.

Utsunomiya NF Bldg.

Itopia Nihonbashi Bldg.

12

13

Yanagibashi Sanshin Bldg.

06

NOF Shibuya
Koen-Dori Bldg.

Tennozu Park Side Bldg.

14

T.T. Landic
Toyo-cho Bldg.

Seiwa Shinjuku Bldg.

21

05

04

22

Osaka Chowa Bldg.

Isuzu Shiba Bldg.

15

Nomura Osaka Bldg.

08

Nishi Shinjuku Showa Bldg.

16

Faret Tachikawa
Center SquareTechnoport Kamata B

23

07

24

Nomura Yotsubashi Bldg.

Toshin Tameike Bldg.

17

Kawasaki Higashiguchi
Sanshin Bldg.

25

Shinagawa NF Bldg.

18

Asahi Seimei Yokohama
Nishiguchi Bldg.

26

Kobe Kaigan Bldg.

09

Hiroshima Chowa Bldg.

Shin-Yokohama
Nikko Bldg.

27

Nomura Hiroshima Bldg.

38

Property Acquisition Channels
Acquisition Channel

Properties owned byor developed by
Nomura Real Estate

Properties Acquired at Listing

Shinjuku Nomura Bldg.

Faret Tachikawa
Center Square

Nomura Osaka Bldg.

Properties Acquired in the First,
Second and Third Fiscal Periods

Properties Acquiredin the Fourth Fiscal Period

Properties Acquiredin the Fifth Fiscal Period

Tennozu Park Side Bldg.

Nomura Yotsubashi Bldg. Nomura Hiroshima Bldg.

Properties for which
information wasreceived from andproperties brokeredby Nomura Real
Estate Group *Properties for which
information wasreceived fromexternal sources

Itopia Nihonbashi
Bldg.

Shinagawa NF Bldg.

T.T. Landic
Toyo-cho Bldg.

Technoport Kamata B

Shin-Yokohama
Nikko Bldg.

Utsunomiya NF Bldg.

Kobe Kaigan Bldg.

Kanda Iwamoto-cho
Tosei Bldg.

Asahi Seimei
Yokohama
Nishiguchi Bldg.

Seiwa Shinjuku
Bldg.

JAL Building *Surugadai Plaza Bldg.

NOF Shibuya
Koen-Dori Bldg.

Isuzu Shiba Bldg.

Toshin Tameike
Bldg.

Yanagibashi
Sanshin Bldg.

Nishi Shinjuku
Showa Bldg.

Sendai
Chowa Bldg.

Osaka
Chowa Bldg.

Hiroshima
Chowa Bldg.

KawasakiHigashiguchi
Sanshin Bldg.

39

Transition of Unit Price（Units）（Yen）

8 ,0 00

90 0,000

80 0,000
6 ,0 00
70 0,000

4 ,0 00

60 0,000

50 0,000
2 ,0 00
40 0,00002003/12/4
20 03/1
2/4

2004/3/1
2 004/3/1 92004/6/1
200 4/7/ 1

2004/9/1
2004/6/12005 /8/2
2005/3/1
2004/9/1
2 004/ 10/12004/12/1
3 200 5/1/ 27
2 005/ 5/13
2
出来高
Turnover30 0,000
2005/12/16
20 05/1
2/5

終値
Closing Price

40

Overview of the Management Company
Organization Chart

Corporate Data
【Business Name】

Shareholder’smeeting

Nomura Real Estate Asset Management Co., Ltd.
【Address】

Board ofDirectors

8-5-1 Nishi-shinjuku, Shinjuku-ku, Tokyo【Incorporation】

AuditorJanuary 24, 2003
【Paid-in Capital】

Executive Director

300 million yen

Investment
Committee

Compliance
Committee【Shareholder】
Nomura Real Estate Holdings Co., Ltd. （100％）【Number of Employees】

Investment
Management
Division

26 (including directors)

Financial
Planning
Division【Business Description】
Real Estate Investment Trust (REIT)
asset management business

Real Estate
Investment Group

Asset Management Fund Management
Group
Group

- Gather information for
asset acquisition- Acquisition of assets- Due diligence forassets- Asset operation/
management/disposal- Making rental policies
and management
planning for assets
under management- Market research for
assets undermanagement- Portfolio management- Making financial
policies and plans- IR-related operation

Financial &Control Group

Compliant &Risk Management
Group- Market research forfinancing- Accounting, tax and fundadministration- Reporting related to assets- Human resources,
Accounting and Generalaffairs- Compliance and risk
management- Internal audit- Information
management,complaints handling◆ REIT Asset Management License:
Prime Minister’s Office Approval No. 28◆ Discretionary Representative License:
Land, Infrastructure and Transport Minister’s OfficeLicense No.18◆ Real Estate Broker’s License:
Tokyo Governor’s Office License(1) No. 81679

41

The following is the statement collaboratively made with the management company on December 4, 2003,
when this investment corporation went public.

We believe that a real-estate investment fund, when listed,
serves extensively as a repository of financial assets of citizens
and helps stabilize not only the property market but also theJapanese economy based on its long-term nature.
It is our investment policy to aim at mid to long-term stable
growth so as to satisfy the asset development needs of many
investors who prefer lower-risk asset management.
While playing our role of acting as a bridge that connects
personal financial assets with real properties, we exert constantand diligent efforts in order to make whatever contribution we
can to the growth of the Japanese economy.
We respect the trust and expectation of investors.
Investor satisfaction is our number one priority.

Investor Oriented

42

The purpose of this document is to provide information only, and it is not intended as an offer tosell or solicitation of offer to buy, or as a recommendation to purchase or sell any specificproducts. Prospective investors should contact their own securities broker/dealers in case ofpurchase of investment units in Nomura Real Estate Office Fund, Inc.
The information contained in this document includes certain forward-looking statements withrespect to the financial results. However, such statements do not guarantee future performance.
While the information in this document is intended to be thorough, there is absolutely no
assurance or warranty with respect to its accuracy or safety of the same. Please note that thecontents of this document may be changed or cancelled without prior notice.
You are prohibited from duplication, reproduction, distribution or any commercial use of any of
the information in this document without our prior written consent.

43