M A RC H
2008
Semiannual
Report
For the period from October 1, 2007 to March 31, 2008

Japan Real Estate Investment Corporation
Japan Real Estate Investment Corporation 1

Profile
Japan Real Estate Investment Corporation (the “Company”) was established as one of
the f irst real estate investment corporations in Japan, following revisions to the Law
Concerning Investment Trusts and Investment Corporations of Japan, as amended, or
the Investment Trust Law. Its investments focus primarily on off ice buildings,
aiming to maintain geographical diversity while seeking stable growth and dividends inthe medium to long term. The Company was listed on the Tokyo Stock Exchange(“TSE”) on September 10, 2001. (Securities Code: 8952)
Note: Investment corporations, including the Company, are special legal entities incorporated and operated underthe Investment Trust Law. Accordingly, the “units” of such investment corporations, including the units of theCompany, are governed by the Investment Trust Law and represent the equity interests in such investment
corporations, which may differ in certain material respects from the “shares” governed by the Corporation Law ofJapan and representing the equity interests in Japanese ordinary corporations incorporated and operated under
the Corporation Law of Japan. Investors and readers are specifically reminded to pay attention to such differences
when reviewing this semiannual report and making any investment decision on or in respect of the “units” of
the Company. “Unitholders” of the Company may be construed accordingly. Each of the investors and readers
should consult their own legal, tax and other advisors regarding all Japanese legal, tax and other consequencesof an investment in the units of the Company, with specific reference to their own legal, tax and other situation
and any recent changes in applicable laws, guidelines or their interpretation.

The Strengths of Japan Real Estate Investment Corporation• Steady growth — Total amount of acquisition prices reached ¥518,969 million ($5,180
million) at the end of March 2008.
• Acquisition of Harumi Center Building in December 2007 for ¥26,800 million ($267 million),
NHK Hiroshima Broadcasting Center Building (additional share) and Hachioji First Square(additional share) for ¥1,450 million ($14 million) and ¥2,379 million ($24 million)
respectively, MM Park Building for ¥37,400 million ($373 million) and a portion of Musashi
Kosugi STM Building for ¥4,000 million ($40 million) in March 2008.
• Portfolio of 53 high-quality office buildings as of March 31, 2008
• Revenues and profits have continuously increased from IPO to the end of March 2008.
Operating revenues for the 13th period achieved ¥25,743 million ($257 million), and operating
income reached ¥14,218 million ($142 million).
• Superior geographic and tenant diversity with a 95.9% occupancy rate as of March 31, 2008
• LTV (Interest-bearing debt/Total assets) at the end of the 13th period was 33.6%.
The long- term, fixed-interest debt ratio stood at 87.0 %.
• Highest credit ratings in J-REIT: AA- from Standard & Poor's Ratings Services (S&P),
Aa3 from Moody's Investors Service, Inc. (Moody's) and AA from Rating and Investment
Information, Inc. (R&I).
S&P upgraded its rating to AA- from A+ on March 28, 2008 andMoody's upgraded its rating to Aa3 from A1 on June 6, 2008.
• Collaboration with sponsors of the asset management company, which comprise Mitsubishi
Estate Co., Ltd., Tokio Marine & Nichido Fire Insurance Co., Ltd., The Dai-ichi Mutual Life
Insurance Company, and Mitsui & Co., Ltd.

Contents
Financial Highlights
Top 10 Unitholders
Unit Price Performance
New Investment Unit Issue
Portfolio Highlights
New Portfolio Properties
History after IPO

p. 1
p. 1
p. 1
p. 1
p. 2
p. 3
p. 6

To Our Unitholders
The Portfolio of Japan Real Estate
Investment Corporation
Overview of Portfolio Properties
Financial Section
Corporate Data

p. 8
p.12
p.15
p.23
p.37

Financial Highlights
Thousands of U.S. dollars(Note 1)Millions of yen
For the period from
October 1, 2007 to
March 31, 2008

Operating Revenues
Operating Income
Income before Income Taxes
Net Income

For the period from
April 1, 2007 to
September 30, 2007

For the period from For the period from
October 1, 2006 to
April 1, 2006 to
March 31, 2007
September 30, 2006

25,743
14,21812,946
12,945

17,530
8,739
7,586
7,585

16,960
8,304
7,184
7,183

15,570
7,041
5,977
5,976

Net Operating Income ( NOI ) ( Note 2)
Funds from Operations (FFO) (Note 3)
FFO Multiple ( Note 4)

12,1978,078
31.9 times

12,073
10,02228.3 times

11,3009,441
33.8 times

10,3398,257
21.0 times

Cash Distribution
Number of Units
Dividend per Unit ( Yen / U.S. dollars)

12,945443,000
29,223

7,585
410,000
18,5007,183
410,000
17,521

5,976
345,400
17,302For the period from
October 1, 2005 to
March 31, 2006

For the period from
October 1, 2007 to
March 31, 2008

13,962
6,319
5,586
5,585

256,947
141,919
129,220
129,211

9,578
121,748
7,945
80,63022.1 times 31.9 times
5,585
345,400
16,172

129,212443,000
291.68Notes: 1. Amounts in U.S. dollars are included solely for the convenience of readers outside Japan. The rate of ¥100.19 = US$1.00, the foreign exchange rate on
March 31, 2008, has been used for translation. The inclusion of such amounts is not intended to imply that Japanese yen has been or could be readily
converted, realized or settled into U.S. dollars at that rate or any other rate.
2. NOI = (Property-Related Revenues – Property-Related Expenses) + Depreciation
Property-Related Revenues and Expenses exclude Gain or Loss on Transfer of Properties.
3. FFO = Net Income – Gain (Loss) on Transfer of Properties + Depreciation – Dividends Earned
4. FFO Multiple = Unit Price at End of the Respective Term ÷ FFO per Unit (Annualized)(Annualized portion of the calculation given in note 4 assumes a fiscal period of 182 days for the period ended March 31, 2006, 183 days for the period
ended September 30, 2006, 182 days for the period ended March 31, 2007, 183 days for the period ended September 30, 2007 and 183 days for theperiod ended March 31, 2008.)

Top 10 Unitho lde r s
As of March 31, 2008
Company

Units

NikkoCiti Trust and Banking Corporation (Toshin Acc.) .......................................................................................
Japan Trustee Services Bank, Ltd. (Shintaku Acc.) ..................................................................................................
Trust & Custody Services Bank, Ltd. (Toshin Acc.) .................................................................................................
The Master Trust Bank of Japan, Ltd. (Shintaku Acc.) ............................................................................................
The Nomura Trust and Banking Co., Ltd. (Toshin Acc.) .........................................................................................
The Chugoku Bank, Ltd. ........................................................................................................................................
Mitsubishi Estate Co., Ltd. .....................................................................................................................................
The Bank of New York, Treaty JASDEC Account ...................................................................................................
Goldman Sachs, International ..................................................................................................................................
Tokio Marine & Nichido Fire Insurance Co., Ltd. .................................................................................................

Unit Price Performance

TOPIX% of total units
outstanding

34,471
31,342
26,934
26,677
10,89910,706
10,160
8,883
8,734
8,120

7.78%
7.07%
6.08%
6.02%
2.46%
2.42%
2.29%
2.01%
1.97%
1.83%

The Company

PO Price

325%
300%
275%
250%
225%
200%
175%
150%
125%
100%
75%
50%

Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct. Nov. Dec. Jan. Feb. Mar. Apr.

2001

2002

2003

2004

2005

2006

2007

2008

New Investment Unit Issue
Issuance date ............................................................. March 12, 2008
Offer price................................................. ¥1,029,000 ($10,270.49)
Number of units issued ............................................... 33,000 units

Aggregate amount of offer price ..... ¥33,957 million ($339 million)
Commencement date
for the calculation of cash dividends .................. October 1, 2007
Japan Real Estate Investment Corporation 1

Portfolio Highlights

Trends in the state of portfolio management
Total leasable space (m 2)

Number ofbuildings

Total numberof tenants(Note)

Total leasable
space

Occupancy
rate

September 2001

20

213

133,927m 2

94.6%

Total leasable
space

March 2002

24

353

201,884m 2

94.0%

Occupancy rate

September 2002

27

362

215,928m 2

95.3%

March 2003

30

383

236,693m 2

94.4%

September 2003

32

407

246,062m 2

95.1%

March 2004

36

477

273,157m2

94.8%

September 2004

39

504

293,105m 2

93.6%

March 2005

46

669

336,026m 2

97.6%

September 2005

50

814

364,610m 2

98.6%

March 2006

52

866

400,090m2

98.7%

September 2006

49

835

396,173m 2

98.2%

March 2007

50

887

397,928m 2

97.8%

September 2007

50

879

406,605m 2

98.7%

October 2007

50

876

406,586m 2

98.5%

November 2007

50

879

406,578m 2

98.7%

December 2007

51

884

427,376m 2

97.7%

January 2008

51

883

427,798m 2

97.8%

February 2008

51

884

427,715m

2

98.1%

March 2008

53

931

479,877m 2

95.9%

Note: The total number of tenants is the gross number of tenants by building.

100,000

170,000

240,000

310,000

380,000

450,000

13th period

60.0

65.0

70.0

75.0

80.0

85.0

90.0

95.0

100.0

Occupancy rate (%)

Portfolio breakdown
As of March 31, 2008

Properties bygeographic
region(Percentage based on
acquisition price)

Tenants byindustry
type

Other major
cities15.0%(Percentage basedon leased space)

Transport services and travel 1.3%
Steel and metals 1.4%
Textiles 1.5%
Staffing agencies 1.7%

Others11.6%

Ceramics 1.7%
Communications 2.1%

Financeandinsurance
11.2%

Machinery 4.4%
Tokyo metropolitan area
excluding 23 wards
10.2%

Tokyo 23 wards
74.8%

Serviceindustries
14.7%

Information
services
11.1%

Real estate 6.5%

Pharmaceuticals 7.0%

Electric devices 7.0%
Construction 7.2%

2 Japan Real Estate Investment Corporation

Retail andrestaurants
9.5%

New Port folio Properties
For the period from October 1, 2007 to March 31, 2008

Shinjuku
Tokyo

Shibuya
ShinagawaHarumi Center Building

Property Acquisition Merits

Property Summary

The property is located in the Harumi area of Tokyo's
Chuo-ku, a new business district that features Harumi
Triton Square among other office buildings. It is a relatively large-scale and new building that was constructed in November 2006. The property is conveniently situated an 8-minute walking distance fromthe nearest subway station, and with the planned
extension of Harumi St., it will also be quickly accessible by car from the Ginza area, Odaiba and Haneda
Airport. With high specifications that meet various
tenants' facility needs, this property holds a competitive edge in Tokyo's office building market.

Type of specified asset:
Acquisition price:
Acquisition date:
Location:
Usage:
Site area:
Floor area of building:
Structure:

Real property¥26,800 million ($267 million)
December 18, 2007
Chuo-ku, Tokyo
Office, shop
4,664.63m2 (50,210ft2)
26,447.27m2 (284,676ft2)
Steel-framed structure, flat roof
Above ground: 10 floors
November 2006

Completion:

Leasing Conditions (As of March 31, 2008)
Number of tenants:
Leasable space:
Leased space:Occupancy rate:

7 tenants
20,812m 2 (224,022ft 2)
20,425m 2 (219,858ft 2)
98.1%

Dividends on Preferred Capital Contribution
The Company had concluded a preferred capital contribution contract with Harumi Front Tokutei Mokuteki Kaisha ("Harumi Front
TMK") on March 24, 2005. At the same time as the contract conclusion, the Company obtained the preferential purchase right toacquire the Harumi Center Building, which was constructed by Harumi Front TMK.
The Company exercised this preferential purchase right with the acquisition of the Harumi Center Building on December 18, 2007. As aresult of this acquisition, at Harumi Front TMK's general meeting of members held on March 31, 2008, a resolution was passed for thepayment of dividends on the Company's preferred capital contribution. Following this resolution, the Company recorded dividends of¥7,935 million ($79 million) as operating revenues for the 13th fiscal period.
Acquisition of the preferred capital contribution certificates is not only the first approach as a J-REIT in Japan but also an advanced
effort for the future.

Harumi Front Tokutei Mokuteki Kaisha(Harumi Front TMK)
The company's total

Specified corporate bonds

80%
Asset

($13 million)

Special purpose borrowing

The company's share of preferredPreferred capital contribution

Dividends on preferred capital contribution

contribution: ¥1,270 million

Specified capital contribution

capital contribution: 49.9%

20%¥7,935 million ($79 million)

Japan Real Estate Investment Corporation 3

NHK Hiroshima
Broadcasting Center Building(Additional share acquisition)
Property Summary
Type of specified asset:
Acquisition price:
Acquisition date:
Location:
Usage:
Site area:
Floor area of building:
Structure:

Completion:
Note:

Real property (Note)¥1,450 million ($14 million)
March 3, 2008
Hiroshima,
Hiroshima Prefecture
Office, shop
3,296.46m2 (35,483ft2)
35,217.28m2 (379,075ft2)
Steel-framed,
Steel-framed reinforced
concrete structure, flat roof
Above ground: 23 floors
Below ground: 2 floors
August 1994

Land: leasehold (quasi-co-ownership: 20.144%)
Building: compartmentalized building units (ratio ofshare of ownership: 21.668%)
This additional share acquisition raised the Company's shareof co-ownership from 27.085% to 48.753%.

HiroshimaTokyo

Leasing Conditions (As of March 31, 2008)
Number of tenants:
Leasable space:
Leased space:Occupancy rate:

12 tenants
9,860m 2 (106,134ft 2)
9,860m 2 (106,134ft 2)
100.0%

Property Acquisition Merits
Located in the business district in the center ofHiroshima, this building is a landmark for its location, size and artistic exterior. It boasts highintegrity specifications to meet a wide variety oftenant needs. This additional share acquisition
raised the Company's share of co-ownership to
48.753%, enabling the Company to manage theproperty more effectively.

Hachioji First Square(Additional share acquisition)
Property Summary
Type of specified asset:
Acquisition price:
Acquisition date:
Location:
Usage:
Site area:
Floor area of building:
Structure:

Completion:
Note:

Real property (Note)¥2,379 million ($24 million)
March 19, 2008
Hachioji, Tokyo
Office, shop
2,989.33m2 (32,177ft2)
18,329.98m2 (197,302ft2)
Steel-framed reinforced
concrete structure,flat roof
Above ground: 12 floors
Below ground: 1 floor
July 1996

Land:ownership (share of co-ownership)
Building: ownership (share of co-ownership)
This additional share acquisition raised the Company's
share of co-ownership from 50.6611% to 80.4%.

Tokyo
Hachioji

Leasing Conditions (As of March 31, 2008)
Number of tenants:
Leasable space:
Leased space:Occupancy rate:

40 tenants
10,068m 2 (108,378ft 2)
9,752m 2 (104,975ft 2)
96.9%

Property Acquisition Merits
Located in Hachioji City, the largest city in theTama district of the Tokyo metropolitan area,
it is a highly convenient transportation junction
with both railway and road access. The property is
within a one-minute walk from Keio Hachioji station and a 4-minute walk from JR Hachioji station, boasting an advanced security system and alarge-size parking lot which accommodates 126
vehicles. This additional share acquisition raised
the Company's share of co-ownership to 80.4%,
enabling the Company to manage the property
more effectively.

4 Japan Real Estate Investment Corporation

MM Park Building
Property Summary
Type of specified asset:
Acquisition price:
Acquisition date:
Location:
Usage:
Site area:
Floor area of building:
Structure:

Completion:

Real property¥37,400 million ($373 million)
March 24, 2008
Yokohama, Kanagawa Prefecture
Office, shop and clinic
6,825.77m2 (73,472ft2)
49,037.51m2 (527,835ft2)
Steel-framed,steel-framed reinforced
concrete structure, flat roof
Above ground: 15 floors
Below ground: 1 floor
December 2007

Tokyo
Yokohama

Leasing Conditions (As of March 31, 2008)
Number of tenants:
Leasable space:
Leased space:Occupancy rate:

20 tenants
38,665m 2 (416,189 ft 2)
27,430m 2 (295,261 ft 2)
70.9%

Property Acquisition Merits
Located in Minato Mirai district in Yokohama, which
has rapidly grown as business district in recent years. It
is directly connected to the Minatomirai station on the
Minatomirai Line and convenient to access to the central districts of Yokohama City and also to the Tokyo
metropolitan area. It offers superior layout efficiency
with its U-shaped design.

Musashi Kosugi STM Building
Property Summary
Type of specified asset:
Acquisition price:
Acquisition date:
Location:
Usage:
Site area:
Floor area of building:
Structure:

Completion:
Note:

Real property (Note)¥4,000 million ($40 million)
March 25, 2008
Kawasaki, Kanagawa Prefecture
Office, shop
3,552.15m2 (38,235ft2)
22,839.61m2 (245,843ft2)
Steel-framed reinforced,
steel-reinforced concrete
structure, flat roof
Above ground: 8 floors
Below ground: 2 floors
October, 1990

Land: ownership (share of co-ownership)
Building: compartmentalized building units(share of co-ownership[ratio of share of ownership: 34.32%])

Tokyo
Kawasaki

Leasing Conditions (As of March 31, 2008)
Number of tenants:
Leasable space:
Leased space:Occupancy rate:

25 tenants
5,394m 2 (58,070 ft 2)
5,394m 2 (58,070 ft 2)
100.0%

Property Acquisition Merits
Located facing Musashi-Kosugi Station, a transportation junction of Tokyu Line and JR Nanbu Line,
offering convenient access to central districts of theTokyo metropolitan area, Yokohama, Kawasaki andTama. It boasts a total floor space of 22,839. 61m2
(245,843ft2) and standard floor area of 2,046m2(22,023ft2).

Japan Real Estate Investment Corporation 5

Histor y after IPO
Since listing on the Tokyo Stock Exchange (“TSE”) as the first J-REIT in Japan, the Company has establisheda firm track record over the past 12 fiscal periods. As the Company concluded its 13th fiscal period ended
March 31, 2008, the total acquisition price for properties reached ¥518,969 million ($ 5,180 million).
Throughout its history, the Company has sustained stable management while realizing steady growth and taking the initiative as a J-REIT pioneer. During the fiscal period under review, the Company accelerated efforts
to streamline and strengthen its portfolio.

Listed on
TSE¥92,845
million(20)¥144,697
million(24)¥164,277
million(27)

Total acquisition price(Number of properties acquired)million(32)

million(30)¥218,437
million(36)

Steady growth(Acquisitions)

201,884m2
2

Total leasable space(Total leased space)
Total number of tenants¥192,607¥183,542

133,927m2(189,815m )353 tenants

215,928m2(205,796m2)
362 tenants

236,693m(223,410m2)
383 tenants2

246,062m2(233,925m2)
407 tenants

273,157m2(258,885m2)
477 tenants(126,748m2)
213 tenants(Note)

Period ended
Sep. 2001

Period ended
Mar. 2002

Period ended
Sep. 2002

Period ended
Mar. 2003

Period ended
Sep. 2003

Period ended
Mar. 2004

94.6%

94.0%

95.3%

94.4%

95.1%

94.8%

Occupancy rate

Feb. and Mar. 2002
Acquired Credit Rating (First for a J-REIT)
Standard & Poor’s: A+
Moody’s: A2

Credit ratings

Jun. 2002
First Investment Corporation
Bond Issue (First for a J-REIT)

Bond issue

Operations, etc.

Listing and issuanceof units

Started its asset managementat ¥92.8 billion in asset size.

Sep. 2001
Listed on TSE
as first J-REIT
Sep. 2001
IPO

Note: The total number of tenants is the gross number of tenants by building.

6 Japan Real Estate Investment Corporation

Apr. 2003
Second/Third Investment
Corporation Bond Issue

May 2002
First Follow-On(First for a J-REIT)

Oct. 2003
Second Follow-On

¥518,969¥290,510
million(46)¥239,827
million(39)

million(50)

479,877m2(460,182m2)
931 tenants
2400,090m
336,026m2
2

293,105m(274,411m2)
504 tenants

million(53)

million(50)

million(50)

million(49)

million(52)¥326,560¥441,276¥418,693¥412,766¥446,940

2(327,962m )669 tenants

364,610m

2(359,620m2)
814 tenants(394,764m2)
866 tenants

2396,173m

397,928m(389,012m2)
835 tenants

406,605m2

2(401,329m2)
879 tenants(389,112m2)
887 tenants

Stable management(Trend in operating conditions)

Period ended
Sep. 2004

Period ended
Mar. 2005

Period ended
Sep. 2005

Period ended
Mar. 2006

Period ended
Sep. 2006

Period ended
Mar. 2007

Period ended
Sep. 2007

Period ended
Mar. 2008

93.6%

97.6%

98.6%

98.7%

98.2%

97.8%

98.7%

95.9%
Mar. 2008
Standard & Poor’s
upgraded its
credit rating from
A+ to AA-.

Nov. 2004
Moody’s upgraded its credit ratingfrom A2 to A1.
Dec. 2004
R&I issued an AA credit rating.
Sep. 2005
Fourth Investment Corporation
Bond Issue (First J-REIT ever toissue investment corporation bonds
without a negative pledge clauseor other financial covenants)

Jun. 2007
Fifth Investment
Corporation Bond Issue
Sixth Investment
Corporation Bond Issue
Surpassed ¥500 billion
in asset size.

Surpassed ¥300 billion in asset size.
Mar. 2005
Acquisition of preferred capital
contribution certificates(First for a J-REIT)
Apr. 2005
Third Follow-On

Oct. 2006
Fourth Follow-On

Mar. 2008
Fifth Follow-On

Japan Real Estate Investment Corporation 7

To Our Unitholders

8 Japan Real Estate Investment Corporation

We are committed to implementing initiatives
enthusiastically to maximize unitholder value
through optimal investment management.

Kazuhiko Arahata
CEO & President of Japan Real Estate
Asset Management Co., Ltd.

BUSINESS PERFORMANCE FOR

upgrading building facilities through optimal refurbishment in

THE 13TH FISCAL PERIOD

order to maintain and improve functions; and (2) developing
finely tuned building management policies from the perspective

SUMMARY OF FINANCIAL RESULTS AND CASH
DIVIDEND
In the 13th fiscal period (six months ended March 31, 2008),
Japan Real Estate Investment Corporation ("the Company")
recorded operating revenues of ¥25,743 million ($257 million),up 46.9% compared to the previous period. Operating income
rose 62.7% to ¥14,218 million ($142 million). After deducting
expenses for interest payments on loans and other costs, income
before income taxes jumped 70.7% to ¥12,946 million ($129
million), and net income increased by the same percentage to¥12,945 million ($129 million).
During the period under review, the Company received
dividends of ¥7,935 million ($79 million) on its preferred capital
contribution from Harumi Front Tokutei Mokuteki Kaisha("Harumi Front TMK") as a result of the disposal of the Harumi
Center Building to the Company. Benefiting from such
extraordinary factors as the above, the Company is pleased toannounce that it posted record operating revenues and operating
income for the fiscal period. As a result of the aforementioned,
we declared a cash dividend of ¥29,223 ($291.68) per unit.

of tenants, while undertaking vigorous activities to attract new
tenants. Furthermore, the Company increased portfolio revenue
by upwardly revising rent levels for existing tenants to thebenchmark of market rent levels.
Turning to the property market, investment in competitive
prime properties in the central districts of Tokyo and Osakaremains robust not only from J-REITs but also private funds anddomestic and overseas institutional investors, sustaining a severe
climate for conducting acquisitions.
In this severe market environment, the Company
undertook the acquisition of competitive properties to further
strengthen the quality of its portfolio. Specifically, the Company
acquired three properties: the Harumi Center Building, acquiredfor ¥26,800 million ($267 million) on December 18, 2007; the
MM Park Building, acquired for ¥37,400 million ($373 million)
on March 24, 2008; and a portion of the Musashi Kosugi STM
Building, acquired for ¥4,000 million ($40 million) on March
25, 2008. Furthermore, the Company acquired additional shareof co-ownership in two properties: the NHK Hiroshima
Broadcasting Center Building, additional portion acquired for¥1,450 million ($14 million) on March 3, 2008; and Hachioji

OPERATING ENVIRONMENT AND PERFORMANCE
During the period under review, although the household sector
remained in a correction phase, the corporate sector maintained
its strong performance, led by major companies, with growth incapital expenditure activity. Despite signs of deceleration in thesecond half of the fiscal period, the economic climate held its

First Square, additional portion acquired for ¥2,379 million ($24
million) on March 19, 2008.
As a result, the Company's properties as of March 31, 2008
consisted of 53 office buildings with a total acquisition price of¥518,969 million ($5,180 million). Total leasable space was479,877 m2 (approximately 5,165,352 ft2), with a total of 931 tenants.

upward momentum.
In the market for leased office space, firm demand forcorporate office space mainly in central Tokyo kept vacancy rates
low and supported high rent levels for new tenants (whichindicates market rent levels).
The Company maintained a high occupancy rate of 95.9%
at the period-end by (1) acquiring top-level properties and

FINANCE ACTIVITIESFor the purposes of raising funds to purchase additional specified
assets and to repay a portion of existing borrowings, the Company
decided to issue 33,000 new investment units through a public
offering. At March 12, 2008, net proceeds from the offering
totaled ¥32,917 million ($329 million).

Japan Real Estate Investment Corporation 9

In this severe market environment, the Company undertook the acquisition ofcompetitive properties to further strengthen the quality of its portfolio.

On March 13, 2008, the Company used proceeds from

Nevertheless, in the market for leased office space, vacancy rates

the public offering totaling ¥25,000 million ($250 million) forand rent levels are expected to trend favorably, particularly inthe prepayment of short-term loans prior to principal repayment

central Tokyo. This expectation is based on the weakening

dates.

negative effects of the revised Building Standards Law, robust
In addition to the above, on March 24, 2008, the Company

demand for office space and limited supply of new office space.

procured ¥10,000 million ($100 million) in long-term loans andIn the real estate market, we anticipate the active stance¥23,000 million ($230 million) in short-term loans to be used

toward acquisition of prime office buildings in city centers—thefor the purchases of the MM Park Building and the Musashi

type of properties targeted by the Company—to remain

Kosugi STM Building. As a result of these finance activities, as

unchanged by well-financed J-REITs as well as domestic andof March 31, 2008, the Company's total interest-bearing debt

overseas institutional investors. Accordingly, we expect thatamounted to ¥177,500 million ($1,772 million), consisting ofcompetition to acquire such properties will become increasingly

long-term loans of ¥99,500 million ($993 million) (including

intense. Moreover, banking facilities have adopted a more

the current portion of ¥7,000 million [$70 million]), short-term

prudent stance toward financing for the real estate sector. In thisloans of ¥23,000 million ($230 million), and investment

context, we believe that improving the soundness of thecorporation bonds of ¥55,000 million ($549 million) (including

Company's financial standing and its ability to procure funds

the current portion of ¥10,000 million [$100 million]).

are the key strategies for acquiring prime properties.

As of March 31, 2008, the Company's long-term, fixedinterest debt ratio (ratio of long-term, fixed-interest debt

GROWTH STRATEGIES

including the current portion of long-term loans and investment

In accordance with the aforementioned, the Company adheres

corporation bonds to interest-bearing debt) stood at 87%, andto the following management policies in order to maintain andthe LTV ratio (ratio of interest-bearing debt to total assets) was

improve earnings.

33.6%. As these results indicate, the Company has been able tomaintain a sound and conservative financial standing.
The Company's credit ratings as of March 31, 2008 wereFirst, the Company will work to strengthen the relationshipof trust with existing tenants and strategically raise rent levels.
As of March 31, 2008, the Company had contracts with 11
property management companies. Most of these companies wereas follows.

already managing their respective buildings before the Company
Rating Agency

Credit RatingStandard & Poor's Ratings Services

Long-term: AA-*; Short-term: A-1+*;
Outlook: Stable

Moody's Investors Service, Inc.

Rating: A1**; Outlook: Stable

Rating and Investment
Information, Inc.

Rating: AA; Outlook: Stable* On March 28, 2008, Standard & Poor's Ratings Services raised the Company's long-term credit rating from A+
to AA-, and the short-term credit rating from A-1 to A-1+.
** On June 6, 2008, Moody's Investors Service raised the Company's rating from A1 to Aa3.

acquired them, and so have built relationships of trust with theirtenants. The Company will work to further strengthen these
relationships by anticipating tenants' needs and providing tailoredservices in order to increase tenant satisfaction, and subsequently
uncover additional demand for office space and raise rent levels.
In addition, we are endeavoring to raise rent levels for thosetenants whose rents are significantly below market value.
Second, we will implement effective initiatives to fill

OUTLOOK

vacancies in a prompt manner. In cooperation with the property
management companies mentioned above, the Company actively

TRENDS IN THE REAL ESTATE MARKET

seeks the most appropriate tenants for each property, based on

Against the backdrop of potential recessions in the U.S. andlocation and features, in order to fill current and anticipated

Europe's economies arising from the subprime loan crisis, along

vacancies as rapidly as possible. We are also working to uncoverwith the upward trend in crude oil prices, we cannot disregard

additional demand for office floor space among our existing

the possibility of an economic downturn on the domestic front.

tenants.

10 Japan Real Estate Investment Corporation

Taketo Yamazaki (Left)
Executive Director ofJapan Real Estate Investment Corporation

Kazuhiko Arahata (Right)
CEO & President of Japan Real Estate
Asset Management Co., Ltd.

Third, we will strive to stabilize our revenues. To this end,

PERFORMANCE FORECASTS FOR THE 14TH AND

the Company is endeavoring to apply fixed- and long-term leasing

15TH FISCAL PERIODS

agreements with its large-scale tenants.

For the 14th fiscal period (April 1, 2008 to September 30, 2008),

Lastly, we aim to continuously reduce management costs.

the Company forecasts operating revenues of ¥19,570 million

The Company has introduced sound competitive principles for($195 million), operating income of ¥9,520 million ($95

its multiple property management companies to follow. Thesemillion), income before income taxes of ¥8,110 million ($81companies are also revamping their management systems andmillion) and net income of ¥8,110 million ($81 million). We

cost structures on an ongoing basis.

plan to declare a dividend of ¥18,310 ($182.75) per unit.

With regard to the acquisition of properties, the Company
has adopted the following policies.

The Company's forecasts for the 15th fiscal period(October 1, 2008 to March 31, 2009) are operating revenues ofFirst, the Company will enhance its property information¥19,730 million ($197 million), operating income of ¥9,680

channels and develop new channels in order to access importantmillion ($97 million), income before income taxes of ¥8,240

information quickly.

million ($82 million) and net income of ¥8,240 million ($82

Second, in its acquisition activities, the Company willcontinue to meticulously monitor and examine economic,

million). We plan to declare a dividend of ¥18,610 ($185.75)
per unit.

physical and legal factors, including rights-related issues, while

As previously discussed above, the J-REIT market isalso taking business conditions into account when selecting

expected to continuously face a severe operating environment.

properties. Concerning the structure of buildings, we require

Such a forecast is supported by decreased funds flowing into thebuildings to meet or exceed new earthquake-resistance standards

J-REIT market attributable to the global-scale credit crunch

and are targeting properties capable of maintaining a competitive

triggered by the U.S. subprime loan crisis as well as by a prudent

edge in terms of the facilities they offer over the medium to longstance toward financing adopted by Japanese financial

term.

institutions. In such an environment, the Company — a J-REIT
Third, in accordance with its acquisition policies, theleader with exceptional management capabilities and financial

Company's general target for regional diversity of properties issoundness — is committed to implementing the aforementioned

for 70% or more of its properties to be located within the Tokyo

initiatives in a reliable and enthusiastic manner to maximize

metropolitan area, with the remaining 30% or less located inunitholder value through optimal investment management. We

other regional urban centers.

thank you and ask you, all our unitholders, for your continuing

Under these policies, the Company will continue to acquire

support and understanding.

highly competitive properties while also considering suitabletiming for the replacement of assets in order to further strengthen
the quality of its portfolio.

Taketo Yamazaki
Executive Director of Japan Real Estate Investment Corporation

Concerning the financing of property acquisitions, theCompany flexibly selects a variety of financial instruments, while
maintaining a sound and conservative financial standing andmonitoring trends in financial markets. When procuring a loan,

Kazuhiko Arahata
CEO & President of Japan Real Estate Asset Management Co., Ltd.

our policy is to minimize funding costs by negotiating with several
qualified institutional investors before settling on a lender.
Japan Real Estate Investment Corporation 11

The Portfolio of Japan Real Estate Investment Corporation
As of March 31, 2008

Properties Roster
NumberName of building

Location

Type ofspecified asset

Acquisitiondate

Acquisition price(¥ millions)

10/31/2002
02/24/2006
05/31/2002
08/15/2002
04/01/2005
03/28/2007
07/29/2005
01/31/2005
04/03/2006
total
08/01/2003
09/25/2001
07/22/2002
03/10/2005
03/15/2005
12/18/2007
03/14/2003
09/10/2001
09/25/2001
09/01/2004
09/13/2005
09/25/2001
11/01/2004
09/10/2001
03/24/2004
04/01/2004
11/22/2002
10/09/2003
11/30/2001
11/14/2003
04/01/2004
total
02/28/2005
09/25/2001
09/25/2001
08/02/2004

5,000
81,555
9,520
4,810
14,70044,7007,000
10,20010,70020,900
7,200
3,173
5,250
16,8305,353
26,800
7,680
4,859
2,808
7,830
9,350
2,738
5,500
5,123
6,670
8,700
4,885
12,20034,600
3,740
360
4,100
8,500
3,541
1,728
4,500

03/31/2005
03/19/2008
total
09/25/2001
10/11/2001
total
03/24/2008
09/25/2001
03/25/2008

3,300
2,379
5,679
1,232
1,342
2,574
37,4003,375
4,000

06/01/2007
01/31/2005
09/25/2001
06/28/2006
total
02/28/2002
03/03/2003
total
10/02/2006
11/01/2006
total
09/22/2006
09/10/2001
08/08/2003
12/20/2001
09/25/2001
12/26/2003
total
09/25/2001
02/28/2002
total
02/01/2006
03/25/2004
03/03/2008
total
09/25/2001
06/01/2005
09/10/2001

7,100
1,000
2,924
250
3,174
2,880
1,700
4,580
3,850
1,300
5,150
1,680
14,533
1,865
2,650
2,264
1,900
4,164
6,934
7,380
14,314
4,650
1,320
1,450
2,770
1,550
5,000
3,657
518,969

Tokyo 23 wards

I- 1
I- 2
● I- 3● I- 4● I- 5● I- 6● I- 7● I- 8Genki Medical Plaza
Kitanomaru Square
MD Kanda Building
Kandabashi Park Building
Nibancho Garden
Mitsubishi UFJ Trust and Banking Building
Burex Kojimachi Building
Sanno Grand Building

Iidabashi, Chiyoda-ku
Kudan-Kita, Chiyoda-ku
Kanda-Mitoshirocho, Chiyoda-ku
Kanda-Nishikicho, Chiyoda-ku
Nibancho, Chiyoda-ku
Marunouchi, Chiyoda-ku
Kojimachi, Chiyoda-ku
Nagatacho, Chiyoda-ku

Ownership
Ownership
Ownership
Ownership
Ownership
Ownership
Ownership
Ownership

I- 9
I- 10
● I- 11● I- 12● I- 13● I- 14● I- 15● I- 16● I- 17● I- 18● I- 19● I- 20● I- 21● I- 22● I- 23● I- 24● I- 25● I- 26● I- 27● I- 28

Yurakucho Denki Building
Kodenmacho Shin-Nihonbashi Building
Burex Kyobashi Building
Ginza Sanwa Building
Ryoshin Ginza East Mirror Building
Harumi Center Building
Aoyama Crystal Building
Shiba 2Chome Daimon Building
Cosmo Kanasugibashi Building
Shinwa Building
Tokyo Opera City Building
Takanawadai Building
Higashi-Gotanda 1Chome Building
Omori-Eki Higashiguchi Building
Nippon Brunswick Building
Yoyogi 1Chome Buildingda Vinci Harajuku
Jingumae Media Square Building
Shibuya Cross Tower
Ebisu Neonato

Yurakucho, Chiyoda-ku
Nihonbashi-Kodenmacho, Chuo-ku
Kyobashi, Chuo-ku
Ginza, Chuo-ku
Ginza, Chuo-ku
Harumi, Chuo-ku
Kita-Aoyama, Minato-ku
Shiba, Minato-ku
Shiba, Minato-ku
Nishi-Shinjuku, Shinjuku-ku
Nishi-Shinjuku, Shinjuku-ku
Higashi-Gotanda, Shinagawa-ku
Higashi-Gotanda, Shinagawa-ku
Omori-Kita, Ota-ku
Sendagaya, Shibuya-ku
Yoyogi, Shibuya-ku
Jingumae, Shibuya-ku
Jingumae, Shibuya-ku
Shibuya, Shibuya-ku
Ebisu, Shibuya-ku

Ownership
Trust
Ownership
Ownership
Ownership
Ownership
Ownership
Trust
Trust
Ownership
Ownership
Trust
Ownership
Trust
Ownership
Ownership
Ownership
Ownership
Ownership
Ownership

I- 29● I- 30● I- 31● I- 32

Harmony Tower
Otsuka Higashi-Ikebukuro Building
Ikebukuro 2Chome Building
Ikebukuro YS Building

Honcho, Nakano-ku
Higashi-Ikebukuro, Toshima-ku
Ikebukuro, Toshima-ku
Minami-Ikebukuro, Toshima-ku

Ownership
Trust
Trust
Ownership

Tokyo metropolitan area excluding 23 wards● II-1
Hachioji First Square

Hachioji, Tokyo

Ownership

II-2

Saitama Urawa Building

Saitama, Saitama Prefecture

Ownership

II-3● II-4● II-5

MM Park Building
Kawasaki Isago Building
Musashi Kosugi STM Building

Yokohama , Kanagawa Prefecture
Kawasaki, Kanagawa Prefecture
Kawasaki, Kanagawa Prefecture

Ownership
Trust
Ownership

Other major cities● III- 1
8.3 Square Kita Building● III- 2
Jozenji Park Building● III- 3
Sendai Honcho Honma Building

Sapporo, Hokkaido
Sendai, Miyagi Prefecture
Sendai, Miyagi Prefecture

Ownership
Ownership
Trust●

III- 4

Kanazawa Park Building

Kanazawa, Ishikawa Prefecture

Ownership●

III- 5

Nishiki Park Building

Nagoya, Aichi Prefecture

Ownership

III- 6● III- 7● III- 8● III- 9● III- 10

Hirokoji Sakae Building
Nagoya Hirokoji Building
Nagoya Misono Building
Kyoto Shijo Kawaramachi Building
Sakaisujihonmachi Building

Nagoya, Aichi Prefecture
Nagoya, Aichi Prefecture
Nagoya, Aichi Prefecture
Kyoto, Kyoto Prefecture
Osaka, Osaka Prefecture

Ownership
Ownership
Ownership
Ownership
Ownership

III- 11

Midosuji Daiwa Building

Osaka, Osaka Prefecture

Trust

●

III- 12● III- 13

Lit City Building
NHK Hiroshima Broadcasting Center Building

Okayama, Okayama Prefecture
Hiroshima, Hiroshima Prefecture

Ownership
Ownership

III- 14
III- 15● III- 16

Tosei Tenjin Building
Tenjin Crystal Building
Hinode Tenjin Building
Total

Fukuoka, Fukuoka Prefecture
Fukuoka, Fukuoka Prefecture
Fukuoka, Fukuoka Prefecture

Ownership
Ownership
Trust

●
●

●
●

●

●

●

●

●

●
●

12 Japan Real Estate Investment Corporation(1.0%)(15.7%)(1.8%)(0.9%)(2.8%)(8.6%)(1.3%)(4.0%)(1.4%)(0.6%)(1.0%)(3.2%)(1.0%)(5.2%)(1.5%)(0.9%)(0.5%)(1.5%)(1.8%)(0.5%)(1.1%)(1.0%)(1.3%)(1.7%)(0.9%)(2.4%)(6.7%)(0.8%)(1.6%)(0.7%)(0.3%)(0.9%)(1.1%)(0.5%)(7.2%)(0.7%)(0.8%)(1.4%)(0.2%)(0.6%)(0.9%)(1.0%)(0.3%)(2.8%)(0.4%)(0.5%)(0.8%)(2.8%)(0.9%)(0.5%)(0.3%)(1.0%)(0.7%)(100.0%)Percentage ofAppraisal value atownership of thethe end ofCompletion period (¥ millions)building

Leasable space

Leased space

Occupancy
rate

Numberof tenants

Revenues from leasing
operations (¥ millions)100.0%
100.0%
100.0%
56.76%
31.345%19.38402%
100.0%
99.0%

1985
2006
1998
1993
2004
2003
2005
1966

6,300
88,60012,1006,520
17,60050,0007,040
30,7004,791m2
25,678m2
6,269m2
3,687m2
9,316m2
11,923m2
4,495m2
20,865m2(51,577ft2)(276,402ft2)(67,480ft2)(39,695ft2)(100,282ft2)(128,341ft2)(48,384ft2)(224,594ft2)

4,791m2
25,678m2
5,799m2
3,687m2
9,316m2
11,923m2
4,495m2
20,845m2(51,577ft2)(276,402ft2)(62,425ft2)(39,695ft2)(100,282ft2)(128,341ft2)(48,384ft2)(224,382ft2)

100.0%
100.0%
92.5%
100.0%
100.0%
100.0%
100.0%
99.9%

1
5
1
7
1
10
1
46

224
1,933
353
185
492
996
162
1,047

(1.3%)(10.9%)(2.0%)(1.0%)(2.8%)(5.6%)(0.9%)(5.9%)

10.78%
100.0%
100.0%
70.95%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
8.368%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
12.29939%

1975
1991
2002
1982
1998
2006
1982
1984
1992
1989
1996
1991
2004
1989
1974
2003
1987
1998
1976
1994

8,600
4,200
7,070
18,0005,150
26,300
9,230
7,980
3,910
9,890
12,100
2,840
7,050
6,040
9,570
13,4006,420
16,10053,0005,710

4,694m2
3,897m2
4,279m2
4,329m2
2,875m2
20,812m2
4,898m2
9,631m2
4,062m2
6,197m2
9,246m2
4,067m2
5,205m2
7,708m2
7,356m2
7,772m2
3,147m2
5,558m2
29,734m2
2,462m2(50,531ft2)(41,950ft2)(46,068ft2)(46,604ft2)(30,949ft2)(224,022ft2)(52,724ft2)(103,671ft2)(43,726ft2)(66,708ft2)(99,528ft2)(43,783ft2)(56,035ft2)(82,972ft2)(79,180ft2)(83,660ft2)(33,876ft2)(59,832ft2)(320,059ft2)(26,511ft2)

4,694m2
3,897m2
4,279m2
4,329m2
2,875m2
20,425m2
4,898m2
9,631m2
4,062m2
6,197m2
9,127m2
4,067m2
5,205m2
7,708m2
7,310m2
7,772m2
3,147m2
5,558m2
28,063m2
2,462m2(50,531ft2)(41,950ft2)(46,068ft2)(46,604ft2)(30,949ft2)(219,858ft2)(52,724ft2)(103,671ft2)(43,726ft2)(66,708ft2)(98,247ft2)(43,783ft2)(56,035ft2)(82,972ft2)(78,685ft2)(83,660ft2)(33,876ft2)(59,832ft2)(302,068ft2)(26,511ft2)

100.0%
100.0%
100.0%
100.0%
100.0%
98.1%
100.0%
100.0%
100.0%
100.0%
98.7%
100.0%
100.0%
100.0%
99.4%
100.0%
100.0%
100.0%
94.4%
100.0%

15
7
1
12
8
7
7
19
8
10
105
1
4
19
18
7
5
9
54
3

304
164
150
394
140
428
262
327
138
266
527
119
220
254
334
414
203
370
1,425
155

(1.7%)(0.9%)(0.8%)(2.2%)(0.8%)(2.4%)(1.5%)(1.8%)(0.8%)(1.5%)(3.0%)(0.7%)(1.2%)(1.4%)(1.9%)(2.3%)(1.1%)(2.1%)(8.0%)(0.9%)

29.253305%
100.0%
100.0%
100.0%

1997
1987
1990
1989

13,600
4,000
1,650
5,670

10,929m2
7,143m2
2,186m2
5,797m2(117,646ft2)(76,892ft2)(23,532ft2)(62,401ft2)

10,929m2
6,239m2
2,186m2
5,797m2(117,646ft2)(67,163ft2)(23,532ft2)(62,401ft2)

100.0%
87.3%
100.0%
100.0%

18
8
9
8

457
179
76
216

(2.6%)(1.0%)(0.4%)(1.2%)

80.4%

1996

6,170

10,068m2(108,378ft2)

9,752m2(104,975ft2)

96.9%

40

179

(1.0%)

100.0%

1990

2,720

4,510m2(48,550ft2)

4,375m2(47,096ft2)

97.0%

15

130

(0.7%)

100.0%
100.0%
34.32%

2007
1990
1990

37,4003,360
4,000

38,665m2
6,831m2
5,394m2(416,189ft2)(73,537ft2)(58,070ft2)

27,430m2
6,541m2
5,394m2(295,261ft2)(70,411ft2)(58,070ft2)

70.9%
95.7%
100.0%

20
12
25

36
157
5

(0.2%)(0.9%)(0.0%)

100.0%
50.0%
100.0%

2006
1993
1991

7,210
1,130
3,690

12,265m2
2,518m2
6,241m2(132,030ft2)(27,106ft2)(67,185ft2)

12,078m2
2,414m2
5,989m2(130,014ft2)(25,985ft2)(64,468ft2)

98.5%
95.9%
96.0%

7
16
17

317
72
171

(1.8%)(0.4%)(1.0%)

89.0%

1991

6,590

20,889m2(224,855ft2)

18,970m2(204,196ft2)

90.8%

68

541

(3.0%)

57.04651%

1995

5,390

8,059m2(86,747ft2)

8,001m2(86,130ft2)

99.3%

50

294

(1.7%)

100.0%
100.0%
100.0%
100.0%
100.0%

1987
1987
1991
1982
1992

1,730
16,000
1,940
2,350
4,840

3,847m2
21,635m2
3,470m2
6,796m2
11,574m2(41,409ft2)(232,878ft2)(37,354ft2)(73,159ft2)(124,587ft2)

3,847m2
21,635m2
3,470m2
6,143m2
11,520m2(41,409ft2)(232,878ft2)(37,354ft2)(66,133ft2)(124,004ft2)

100.0%
100.0%
100.0%
90.4%
99.5%

14
27
9
31
16

102
735
97
136
265

(0.6%)(4.1%)(0.5%)(0.8%)(1.5%)

100.0%

1991

19,10020,450m2(220,127ft2)

20,450m2(220,127ft2)

100.0%

25678(3.8%)

27.7488%
48.753%

2005
1994

5,560
3,260

9,965m2
9,860m2(107,269ft2)(106,134ft2)

9,798m2
9,860m2(105,475ft2)(106,134ft2)

98.3%
100.0%

40
12

297
166

(1.7%)(0.9%)

100.0%
100.0%
74.4844%

1992
1993
1987

1,530
4,910
3,940
619,160

4,000m2
5,991m2
5,818m2
479,877m2(43,057ft2)(64,487ft2)(62,629ft2)(5,165,352ft2)

3,924m2(42,243ft2)
5,554m2(59,784ft2)
5,622m2(60,523ft2)
460,182m2 (4,953,357ft2)

98.1%
92.7%
96.6%
95.9%

19
24
10
931

93
216
176
17,807(0.5%)(1.2%)(1.0%)(100.0%)Japan Real Estate Investment Corporation 13

Major Tenants Roster
Rank

1
2
3
4
5
6
7
8
9
10

Name of tenant

Leased space% of totalleased space

17,014m2 (183,144ft2)
10,665m2 (114,802ft2)
9,316m2 (100,282ft2)
8,938m2 (96,212ft2)
8,774m2 (94,453ft2)
8,476m2 (91,245ft2)
7,673m2 (82,601ft2)
7,634m2 (82,178ft2)
6,906m2 (74,341ft2)
5,799m2 (62,425ft2)

3.7%
2.3%
2.0%
1.9%
1.9%
1.8%
1.7%
1.7%
1.5%
1.3%

Name of building

Banyu Pharmaceutical Co., Ltd.
Mitsubishi UFJ Trust and Banking Corporation
Seven & i Holdings Co., Ltd.
(Note)Space Design, Inc.
FAST RETAILING CO., LTD.
The Dai-ichi Mutual Life Insurance Company
JRI Solutions, Limited
TOTO LTD.
Asahi Kasei Pharma Corporation

Kitanomaru Square (also includes 1 other building)
Mitsubishi UFJ Trust and Banking Building
Nibancho Garden
MM Park Building
Burex Kojimachi Building (also includes 1 other building)
Kitanomaru Square
Midosuji Daiwa Building (also includes 6 other buildings)
Harumi Center Building
Midosuji Daiwa Building (also includes 1 other building)
MD Kanda Building

Note: Not disclosed due to the tenant's request

Locations of Portfolio Properties
II-1–II-5: Tokyo metropolitan area
excluding 23 wards

III-1–III-16: Other major cities

III-1

II-2
III-2

II-1

III-3

II-5

III-4

II-3

II-4

III-7
III-5
III-6
III-13
III-8
III-11
III-12
III-14
III-16 III-15

III-9
III-10I-1–I-32: Tokyo
23 wards

I-31
I-32 I-30
I-29

I-2

I-1

I-3
I-18
I-4
I-23
I-10
I-7
I-19
I-6
I-11
I-24 I-25
I-8
I-12
I-9
I-26
I-13
I-27
I-15
I-14
I-16
I-28
I-17
I-20
I-5

I-21

I-22

Tokyo Station

14 Japan Real Estate Investment Corporation

Over view of Portfolio Properties As of March 31, 2008
Note: Concerning real estate of which the Company is a partial owner through co-ownership or compartmentalized building units, the figures for “Site area” and “Floor area of building”
represent total site area and total floor space for the entire building.

Location :Site area :Floor area of building :Structure :Completion :Location :Site area :Floor area of building :Structure :Completion :Genki Medical Plaza

Kitanomaru Square

● I-1

● I-2

Chiyoda-ku, Tokyo
1,052.80m2 (11,332ft2)
6,722.02m2 (72,355ft2)
Above ground: 8 floors
Below ground: 1 floor
September 1985

Location :Site area :Floor area of building :Structure :Completion :MD Kanda Building

Kandabashi Park
Building

● I-3

● I-4

Chiyoda-ku, Tokyo
1,085.83m2 (11,688ft2)
8,185.11m2 (88,104ft2)
Above ground: 10 floors
February 1998

Location :Site area :Floor area of building :Structure :Completion :● I-5

Completion :Chiyoda-ku, Tokyo
11,003.87m2 (118,445ft2)
57,031.06m2 (613,877ft2)
Above ground: 14 floors
Below ground: 2 floors
April 2004

● I-6

Location :Site area :Floor area of building :Structure :Completion :Burex Kojimachi
Building

Completion :Chiyoda-ku, Tokyo
967.67m2 (10,416ft2)
6,526.64m2 (70,252ft2)
Above ground: 11 floors
Below ground: 1 floor
January 2005

Chiyoda-ku, Tokyo
8,100.39m2 (87,192ft2)
108,171.67m2 (1,164,349ft2)
Above ground: 29 floors
Below ground: 4 floors
February 2003

Sanno Grand Building● I-7

Location :Site area :Floor area of building :Structure :Chiyoda-ku, Tokyo
1,218.56m2 (13,116ft2)
9,370.25m2 (100,860ft2)
Above ground: 10 floors
Below ground: 1 floor
July 1993

Mitsubishi UFJ Trust andBanking Building

Nibancho Garden

Location :Site area :Floor area of building :Structure :Chiyoda-ku, Tokyo
5,821.03m2 (62,657ft2)
57,279.20m2 (616,548ft2)
Above ground: 26 floors
Below ground: 2 floors
January 2006

● I-8

Location :Site area :Floor area of building :Structure :Completion :Chiyoda-ku, Tokyo
3,663.93m2 (39,438ft2)
33,875.95m2 (364,637ft2)
Above ground: 10 floors
Below ground: 3 floors
September 1966
Japan Real Estate Investment Corporation 15

Location :Site area :Floor area of building :Structure :Completion :Yurakucho Denki
Building

Kodenmacho ShinNihonbashi Building● I-9● I-10Chiyoda-ku, Tokyo
5,749.91m2 (61,891ft2)
70,287.65m2 (756,569ft2)
Above ground: 20 floors
Below ground: 4 floors
September 1975

Location :Site area :Floor area of building :Structure :Completion :Burex Kyobashi
Building

Ginza Sanwa Building● I-11

Location :Site area :Floor area of building :Structure :Completion :Chuo-ku, Tokyo
756.03m2 (8,138ft2)
5,470.54m2 (58,884ft2)
Above ground: 8 floors
Below ground: 1 floor
February 2002

● I-12

Location :Site area :Floor area of building :Structure :Completion :Ryoshin Ginza East
Mirror Building

Completion :Chuo-ku, Tokyo
615.25m2 (6,622ft2)
4,104.71m2 (44,183ft2)
Above ground: 8 floors
Below ground: 1 floor
October 1998

● I-14

Location :Site area :Floor area of building :Structure :Completion :Aoyama Crystal
Building

Completion :Minato-ku, Tokyo
989.30m2 (10,649ft2)
8,094.36m2 (87,127ft2)
Above ground: 10 floors
Below ground: 4 floors
December 1982

16 Japan Real Estate Investment Corporation

Chuo-ku, Tokyo
4,664.63m2 (50,210ft2)
26,447.27m2 (284,676ft2)
Above ground: 10 floors
November 2006

Shiba 2Chome
Daimon Building● I-15

Location :Site area :Floor area of building :Structure :Chuo-ku, Tokyo
1,119.27m2 (12,048ft2)
8,851.00m2 (95,271ft2)
Above ground: 9 floors
Below ground: 2 floors
October 1982

Harumi Center Building● I-13

Location :Site area :Floor area of building :Structure :Chuo-ku, Tokyo
773.28m2 (8,324ft2)
5,822.88m2 (62,677ft2)
Above ground: 9 floors
Below ground: 1 floor
November 1991

● I-16

Location :Site area :Floor area of building :Structure :Completion :Minato-ku, Tokyo
2,820.90m2 (30,364ft2)
16,235.10m2 (174,753ft2)
Above ground: 8 floors
Below ground: 2 floors
March 1984

Location :Site area :Floor area of building :Structure :Completion :Cosmo Kanasugibashi
Building

Shinwa Building● I-17● I-18Minato-ku, Tokyo
758.54m2 (8,165ft2)
5,420.93m2 (58,350ft2)
Above ground: 9 floors
Below ground: 1 floor
March 1992

Location :Site area :Floor area of building :Structure :Completion :Takanawadai Building

Tokyo Opera City
Building● I-20● I-19Location :Site area :Floor area of building :Structure :Completion :Shinjuku-ku, Tokyo
18,236.94m2 (196,301ft2)
232,996.81m2 (2,507,954ft2)
Above ground: 54 floors
Below ground: 4 floors
July 1996

Location :Site area :Floor area of building :Structure :Completion :Higashi-Gotanda
1Chome Building

Shinagawa-ku, Tokyo
1,539.95m2 (16,576ft2)
6,460.39m2 (69,539ft2)
Above ground: 8 floors
July 2004● I-22

Location :Site area :Floor area of building :Structure :Completion :● I-24● I-23Completion :Shibuya-ku, Tokyo
1,497.52m2 (16,119ft2)
11,957.38m2 (128,708ft2)
Above ground: 9 floors
Below ground: 2 floors
March 1974

Ota-ku, Tokyo
2,199.30m2 (23,673ft2)
14,095.34m2 (151,721ft2)
Above ground: 11 floors
Below ground: 2 floors
July 1989

Yoyogi 1Chome
Building

Nippon Brunswick
Building

Location :Site area :Floor area of building :Structure :Shinagawa-ku, Tokyo
1,416.17m2 (15,244ft2)
5,762.70m2 (62,029ft2)
Above ground: 13 floors
January 1991

Omori-Eki Higashiguchi
Building● I-21

Location :Site area :Floor area of building :Structure :Completion :Shinjuku-ku, Tokyo
822.00m2 (8,848ft2)
8,291.69m2 (89,251ft2)
Above ground: 10 floors
Below ground: 1 floor
November 1989

Location :Site area :Floor area of building :Structure :Completion :Shibuya-ku, Tokyo
1,755.75m2 (18,899ft2)
10,778.10m2 (116,014ft2)
Above ground: 14 floors
Below ground: 1 floor
October 2003
Japan Real Estate Investment Corporation 17

Location :Site area :Floor area of building :Structure :Completion :da Vinci Harajuku

Jingumae Media
Square Building● I-25● I-26

Shibuya-ku, Tokyo
839.66m2 (9,038ft2)
4,359.20m2 (46,922ft2)
Above ground: 7 floors
Below ground: 2 floors
December 1987

Location :Site area :Floor area of building :Structure :Completion :Ebisu Neonato

Shibuya Cross Tower● I-27

Location :Site area :Floor area of building :Structure :Completion :Shibuya-ku, Tokyo
5,153.45m2 (55,471ft2)
61,862.33m2 (665,880ft2)
Above ground: 32 floors
Below ground: 3 floors
April 1976

● I-28Location :Site area :Floor area of building :Structure :Completion :● I-29Completion :Nakano-ku, Tokyo
10,020.52m2 (107,860ft2)
72,729.31m2 (782,851ft2)
Above ground: 29 floors
Below ground: 2 floors
March 1997

● I-30Location :Site area :Floor area of building :Structure :Completion :Ikebukuro 2Chome
Building

Completion :Toshima-ku, Tokyo
397.26m2 (4,276ft2)
3,157.51m2 (33,987ft2)
Above ground: 9 floors
Below ground: 1 floor
May 1990

18 Japan Real Estate Investment Corporation

Toshima-ku, Tokyo
2,121.39m2 (22,834ft2)
9,531.28m2 (102,594ft2)
Above ground: 8 floors
Below ground: 1 floor
November 1987

Ikebukuro YS
Building● I-31

Location :Site area :Floor area of building :Structure :Shibuya-ku, Tokyo
5,005.70m2 (53,881ft2)
36,598.38m2 (393,941ft2)
Above ground: 18 floors
Below ground: 2 floors
October 1994

Otsuka HigashiIkebukuro Building

Harmony Tower

Location :Site area :Floor area of building :Structure :Shibuya-ku, Tokyo
2,261.68m2 (24,344ft2)
9,420.42m2 (101,400ft2)
Above ground: 9 floors
Below ground: 2 floors
March 1998

● I-32

Location :Site area :Floor area of building :Structure :Completion :Toshima-ku, Tokyo
1,384.56m2 (14,903ft2)
7,464.64m2 (80,349ft2)
Above ground: 8 floors
Below ground: 1 floor
December 1989

Location :Site area :Floor area of building :Structure :Completion :Hachioji First
SquareSaitama Urawa
Building● II-1● II-2

Hachioji, Tokyo
2,989.33m2 (32,177ft2)
18,329.98m2 (197,302ft2)
Above ground: 12 floors
Below ground: 1 floor
July 1996

Location :Site area :Floor area of building :Structure :Completion :Kawasaki Isago
Building

MM Park Building● II-4● II-3

Location :Site area :Floor area of building :Structure :Completion :Location :Site area :Floor area of building :Structure :Completion :Yokohama, Kanagawa Prefecture
6,825.77m2 (73,472ft2)
49,037.51m2 (527,835ft2)
Above ground: 15 floors
Below ground: 1 floor
December 2007

Location :Site area :Floor area of building :Structure :Completion :8 . 3 Square Kita
Building● II-5● III-1

Kawasaki, Kanagawa Prefecture
3,552.15m2 (38,235ft2)
22,839.61m2 (245,843ft2)
Above ground: 8 floors
Below ground: 2 floors
October 1990

Location :Site area :Floor area of building :Structure :Completion :Sendai, Miyagi Prefecture
1,566.68m2 (16,864ft2)
7,648.33m2 (82,326ft2)
Above ground: 8 floors
Below ground: 1 floor
January 1993

Sapporo, Hokkaido
5,541.60m2 (59,649ft2)
16,096.97m2 (173,266ft2)
Above ground: 11 floors
Below ground: 1 floor
December 2006

Sendai Honcho
Honma Building● III-2

Completion :Kawasaki, Kanagawa Prefecture
1,594.50m2 (17,163ft2)
9,623.83m2 (103,590ft2)
Above ground: 12 floors
Below ground: 1 floor
December 1990

Musashi Kosugi
STM Building

Jozenji Park Building

Location :Site area :Floor area of building :Structure :Saitama, Saitama Prefecture
1,533.06m2 (16,502ft2)
6,258.59m2 (67,367ft2)
Above ground: 8 floors
March 1990

● III-3

Location :Site area :Floor area of building :Structure :Completion :Sendai, Miyagi Prefecture
1,437.47m2 (15,473ft2)
8,247.50m2 (88,775ft2)
Above ground: 11 floors
November 1991

Japan Real Estate Investment Corporation 19

Location :Site area :Floor area of building :Structure :Completion :Location :Site area :Floor area of building :Structure :Completion :Kanazawa Park
Building

Nishiki Park Building● III-4● III-5Kanazawa, Ishikawa Prefecture
6,642.71m2 (71,501ft2)
43,481.20m2 (468,027ft2)
Above ground: 12 floors
Below ground: 2 floors
October 1991

Location :Site area :Floor area of building :Structure :Completion :Hirokoji Sakae
Building

Nagoya Hirokoji
Building● III-6● III-7

Nagoya, Aichi Prefecture
786.79m2 (8,469ft2)
6,445.08m2 (69,374ft2)
Above ground: 9 floors
Below ground: 2 floors
September 1987

Location :Site area :Floor area of building :Structure :Completion :Nagoya Misono
Building

Completion :Location :Site area :Floor area of building :Structure :Completion :Nagoya, Aichi Prefecture
805.04m2 (8,665ft2)
5,348.00m2 (57,565ft2)
Above ground: 7 floors
Below ground: 1 floor
September 1991

Nagoya, Aichi Prefecture
4,095.81m2 (44,087ft2)
33,377.73m2 (359,275ft2)
Above ground: 18 floors
Below ground: 2 floors
May 1987

Kyoto Shijo
Kawaramachi Building● III-8

Location :Site area :Floor area of building :Structure :Nagoya, Aichi Prefecture
2,170.45m2 (23,363ft2)
25,091.91m2 (270,087ft2)
Above ground: 22 floors
Below ground: 4 floors
August 1995

● III-9Location :Site area :Floor area of building :Structure :Completion :Kyoto, Kyoto Prefecture
1,471.57m2 (15,840ft2)
9,701.04m2 (104,421ft2)
Above ground: 9 floors
Below ground: 1 floor
November 1982

Sakaisujihonmachi
Building

Midosuji Daiwa
Building● III-10● III-11

Osaka, Osaka Prefecture
2,036.22m2 (21,918ft2)
17,145.59m2 (184,553ft2)
Above ground: 13 floors
Below ground: 2 floors
October 1992

20 Japan Real Estate Investment Corporation

Location :Site area :Floor area of building :Structure :Completion :Osaka, Osaka Prefecture
3,044.65m2 (32,772ft2)
31,213.27m2 (335,977ft2)
Above ground: 15 floors
Below ground: 2 floors
September 1991

Location :Site area :Floor area of building :Structure :Completion :Lit City Building

NHK Hiroshima
Broadcasting Center
Building● III-12● III-13

Okayama, Okayama Prefecture
7,596.44m2 (81,767ft2)
52,653.19m2 (566,754ft2)
Above ground: 20 floors
Below ground: 2 floors
June 2005

Location :Site area :Floor area of building :Structure :Completion :Ten j in Cr ystal
Building

Tosei Tenjin Building● III-15● III-14

Location :Site area :Floor area of building :Structure :Completion :Fukuoka, Fukuoka Prefecture
1,221.31m2 (13,146ft2)
5,588.57m2 (60,155ft2)
Above ground: 8 floors
March 1992

Hiroshima, Hiroshima Prefecture
3,296.46m2 (35,483ft2)
35,217.28m2 (379,075ft2)
Above ground: 23 floors
Below ground: 2 floors
August 1994

Location :Site area :Floor area of building :Structure :Completion :Fukuoka, Fukuoka Prefecture
1,835.17m2 (19,754ft2)
10,432.04m2 (112,289ft2)
Above ground: 14 floors
Below ground: 1 floor
August 1993

Hinode Tenjin
Building● III-16

Location :Site area :Floor area of building :Structure :Completion :Fukuoka, Fukuoka Prefecture
1,452.15m2 (15,631ft2)
12,527.07m2 (134,840ft2)
Above ground: 10 floors
Below ground: 2 floors
August 1987

Japan Real Estate Investment Corporation 21

22 Japan Real Estate Investment Corporation

Financial Section
Selected Financial Data
Balance Sheets
Statements of Income and Retained Earnings
Statements of Changes in Unitholders’ Equity
Statements of Cash Flows
Notes to Financial Statements
Report of Independent Auditors

p.23
p.24
p.26
p.26
p.27
p.28
p.36

Selected Financial Data
Thousands of U.S. dollars

Millions of yen(Note 1)For the period from

For the period from

For the period from

October 1, 2006 to

April 1, 2006 to

October 1, 2005 to

October 1, 2007 to

March 31, 2007

September 30, 2006

March 31, 2006

March 31, 2008

¥ 17,530¥ 16,960¥ 15,570¥ 13,962

8,791

8,655

8,528

7,643

115,027

14,218

8,739

8,304

7,041

6,319

141,919

12,946

7,586

7,184

5,977

5,586

129,220

For the period from

For the period from

October 1, 2007 to

April 1, 2007 to

March 31, 2008

September 30, 2007

Operating Revenues¥ 25,743

Operating Expenses

11,524

Operating Income
Income before Income Taxes

For the period from$

256,947

Net Income

12,945

7,585

7,183

5,976

5,585

129,211

Total Assets

527,537

449,643

443,973441,163433,552

5,265,372

Interest-Bearing Debts

177,500

144,500

140,000

202,500

196,500

1,771,634

Net Assets

310,547

272,269

271,867

207,449

207,058

3,099,584

Unitholders’ Capital

297,601

264,683

264,683

201,472

201,472

2,970,371

Number of Units

443,000

410,000

410,000

345,400

345,400

443,000

Net Assets per Unit (Yen/U.S. dollars)

701,009664,071

663,091

600,605

599,475

6,996.80

Cash Distribution

12,945

7,585

7,183

5,976

5,585

129,212Dividend Payout Ratio

100.0%

99.9%

100.0%

99.9%

99.9%

100.0%

Dividend per Unit (Yen/U.S. dollars)

29,22318,50017,521

17,302

16,172291.68Net Operating Income (NOI)

12,197

12,073

11,30010,339

9,578

121,748

Funds from Operations (FFO)

8,078

10,022

9,441

8,257

7,945

80,630Return on Assets (ROA) (Note 2)

2.6%

1.7%

1.6%

1.4%

1.4%

2.6%

(5.3% annualized)

Return on Equity (ROE) (Note 3)

4.7％(9.3% annualized)

EOP Equity Ratio (Note 4)(3.4% annualized)

2.8%(5.6% annualized)(3.3% annualized)

2.7%(5.5% annualized)(2.7% annualized)

2.9%(5.8% annualized)(2.8% annualized)

2.7%(5.4% annualized)(5.3% annualized)

4.7%(9.3% annualized)

58.9%

60.6%

61.2%

47.0%

47.8%

58.9%

33.6%

32.1%

31.5%

45.9%

45.3%

33.6%

FFO Multiple

31.9 times

28.3 times

33.8 times

21.0 times

22.1 times

31.9 times

Debt Service Coverage Ratio (Note 6)

14.2 times

10.4 times

10.5 times

9.5 times

12.3 times

14.2 times

EOP Interest-Bearing Debt Ratioon Total Assets (Note 5)

Notes 1:

2:
3:

4:
5:
6:

Amounts in U.S. dollars are included solely for the convenience of readers outside Japan. The rate of ¥100.19 = US$1.00, the foreign exchange rate on March 31,
2008, has been used for translation. The inclusion of such amounts is not intended to imply that Japanese yen has been or could be readily converted, realized or
settled into U.S. dollars at that rate or any other rate.
ROA = Income before Income Taxes ÷ Average of Total Assets during the period
ROE = Net Income ÷ Average of Net Assets during the period(Annualized portion of the calculation given in note 2 and note 3 assumes a fiscal period of 182 days for the period ended March 31, 2006, 183 days for the period
ended September 30, 2006, 182 days for the period ended March 31, 2007, 183 days for the period ended September 30, 2007 and 183 days for the period ended
March 31, 2008.)
EOP Equity Ratio = (Net Assets at end of period ÷ Total Assets at end of period) × 100
EOP Interest-Bearing Debt Ratio on Total Assets = (Interest-Bearing Debt at end of period ÷ Total Assets at end of period) × 100
Debt Service Coverage Ratio = Net Income before Interest, Taxes, Depreciation and Amortization ÷ Interest Expenses

Japan Real Estate Investment Corporation

23

Balance Sheets
As of March 31, 2008 and September 30, 2007

As ofMarch 31, 2008

Thousands of yen
As ofSeptember 30, 2007

U.S. dollars (Note 1)
As ofMarch 31, 2008

¥ 13,124,551)¥ 16,419,825)$ ,130,996,619)

Rental receivables

125,811)104,093)

1,255,734)

Dividend receivables

6,348,610)―)

63,365,710)

Refundable income taxes

1,594,444)

3,802)

15,914,212)

Refundable consumption taxes

1,458,648)―)

14,558,823)―)

146,549)―)

ASSETS
Current Assets:
Cash and bank deposits

Other receivables
Other current assets
Total current assets

94,261)

72,545)940,830)

22,746,328)

16,746,815)

227,031,928)

Property and Equipment, at Cost:Land

336,310,231)

296,188,439)

3,356,724,539)

Buildings and structures

183,199,855)

149,740,602)

1,828,524,355)

Machinery and equipment

2,768,111)

2,196,639)

27,628,616)

Tools, furniture and fixtures

94,565)94,565)

943,860)

Construction in progress

1,315,581)

974,677)

13,130,866)

Subtotal

523,688,344)

449,194,923)

5,226,952,236)

Accumulated depreciation(23,832,007)(20,763,580)(237,868,129)

Total property and equipment

499,856,336)

428,431,343)

4,989,084,107)

1,272,797

1,272,797)

12,703,838)

23,57523,575)

235,307)

Investments and other Assets:
Investment securities
Deposits
Long-term prepaid expenses

4,801

1,866)

47,924)

2,691,724

2,204,134)

26,866,202)

Easement

828,095

828,095)

8,265,250)

Deferred investment corporation bond issuance costs

114,005

134,865)

1,137,897)¥527,537,666¥449,643,494)$5,265,372,454)

Leasehold rights

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

24 Japan Real Estate Investment Corporation

Thousands of yen

U.S. dollars (Note 1)
As ofMarch 31, 2008

As ofMarch 31, 2008

As of
September 30, 2007¥

2,084,823¥ 1,150,816)

Other payables

3,047,550

1,064,279)

30,417,708

Short-term loans

23,000,000―)

229,563,829

LIABILITIESCurrent Liabilities:
Trade accounts payable$ , 20,808,696

Current portion of long-term loans

7,000,000―)

69,867,252

Current portion of investment corporation bonds

10,000,000

10,000,000)

99,810,360

633,694629,266)

6,324,925

Accrued expenses
Accrued income taxes

38

61)

383

Accrued consumption taxes―

260,679)―

2,239,582

2,195,163)

22,353,352

1,425

2,432)

14,23248,007,114

15,302,699)

479,160,739

45,000,000

45,000,000)

449,146,621

Rent received in advance
Other current liabilities
Total current liabilities

Long-Term Liabilities:
Investment corporation bonds
Long-term loans

92,500,000

89,500,000)

923,245,833

Deposits received from tenants

31,483,194

27,571,602)

314,234,894

Total long-term liabilities

168,983,194

162,071,602)

1,686,627,349

Total Liabilities

216,990,308

177,374,302)

2,165,788,087

297,601,460

264,683,960)

2,970,370,895

NET ASSETS
Unitholders’ capital
Authorized:
Issued:2,000,000 units
443,000 units as of March 31, 2008 and
410,000 units as of September 30, 2007
12,945,897

7,585,231)

129,213,471

Total net assets

Retained earnings

310,547,357

272,269,191)

3,099,584,367

Total Liabilities and Net Assets¥527,537,666¥449,643,494)$5,265,372,454

The accompanying notes form an integral part of these financial statements.

Japan Real Estate Investment Corporation25

Statements of Income and Retained Earnings
For the six months ended March 31, 2008 and September 30, 2007
Thousands of yen

U.S. dollars (Note 1)

For the period
from October 1, 2007
to March 31, 2008

For the period
from April 1, 2007
to September 30, 2007

For the period
from October 1, 2007
to March 31, 2008

Operating Revenues and Expenses
Operating Revenues:
Rental revenues
Non-rental revenues
Dividends earned
Gain on sale of properties¥17,761,985
45,727
7,935,763―¥17,079,232)
53,172)―)397,770)$177,283,012
456,405
79,207,138―

Total operating revenues

25,743,475

17,530,174)

256,946,555

Operating Expenses:
Property-related expenses
Asset management fees
Administrative service fees
Other operating expenses

8,678,165
2,574,029
158,103
114,305

7,894,956)
661,347)
150,965)
83,797)86,617,079
25,691,485
1,578,038
1,140,887

Total operating expenses

11,524,604

8,791,065)

115,027,490

Operating income

14,218,871

8,739,108)

141,919,065

33,567
12

29,960)2,678)

335,034
128

773,348438,698
20,85952,848
20,113695,398)
413,838)
16,159)―)60,136)

7,718,817
4,378,664
208,200
527,480
200,755

12,946,583

7,586,213)

129,220,311

908
8

1,087)
(4)

9,066
89
129,211,156

Non-Operating Revenues and Expenses
Non-Operating Revenues:
Interest income
Other non-operating revenues
Non-Operating Expenses:
Interest expense
Interest expense on investment corporation bonds
Amortization of investment corporation bond issuance costs
New unit issuance costs
Other non-operating expenses
Income before Income Taxes
Income Taxes:
Current
Deferred
Net Income

12,945,665

7,585,130)

Retained Earnings Brought Forward

231

101)

2,315

Retained Earnings at End of Period¥12,945,897¥ 7,585,231)$129,213,471

Units

Unitholders’ capital

Retained earnings

Total

410,000¥264,683,960¥ 7,183,711)¥271,867,671)

Public offering

―

―

―)

―)

Cash dividends paid――

(7,183,610)(7,183,610)

Statements of Changes in Unitholders’ Equity
For the six months ended March 31, 2008 and September 30, 2007
Thousands of yen

Balance as of March 31, 2007――

7,585,130)

7,585,130)

Balance as of September 30, 2007

410,000¥264,683,960¥ 7,585,231)¥272,269,191)

Public offering

32,917,500)

Net income

33,00032,917,500―)

Cash dividends paid――

(7,585,000)(7,585,000)

Net income――

12,945,665)

12,945,665)

443,000¥297,601,460¥12,945,897)¥310,547,357)

Balance as of March 31, 2008

U.S. dollars (Note 1)
Units

Unitholders’ capital

Retained earnings

Total

Balance as of September 30, 2007

410,000$2,641,820,142$ 75,708,474)$2,717,528,615)

Public offering

328,550,754)

33,000328,550,754―)

Cash dividends paid――

(75,706,158)(75,706,158)

Net income――

129,211,156)

129,211,156)

443,000$2,970,370,895$129,213,471)$3,099,584,367)

Balance as of March 31, 2008
The accompanying notes form an integral part of these financial statements.

26 Japan Real Estate Investment Corporation

Statements of Cash Flows
For the six months ended March 31, 2008 and September 30, 2007

Thousands of yen

U.S. dollars (Note 1)

For the period
from October 1, 2007
to March 31, 2008

For the period
from April 1, 2007
to September 30, 2007

For the period
from October 1, 2007
to March 31, 2008

Income before income taxes¥12,946,583)¥ 7,586,213)$129,220,311)

Depreciation and amortization

3,068,427)

2,835,589)

30,626,088)

Amortization of investment corporation bond issuance costs

20,859)16,159)208,200)

New unit issuance costs

52,848)―)527,480)(79,207,138)

Cash Flows from Operating Activities

Dividends earned(7,935,763)―)

Interest income(33,567)(29,960)(335,034)

Interest expense

1,212,046)

1,109,237)

12,097,481)

Rental receivables(21,718)

39,217)(216,777)

Other receivables

146,549)

724,386)

1,462,721)

Refundable income taxes
Refundable consumption taxes(3,490)2,312)(34,836)(1,458,648)

165,977)(14,558,823)

Prepaid expenses(29,489)

11,818)(294,336)

Trade accounts payable632,194)(279,891)

6,309,959)

Other payables

1,951,478)

76,072)

19,477,776)

Accrued expenses(260,748)

260,816)(2,602,537)

44,418)92,556)443,344)―

1,334,569)―)(2,934)498)(29,290)

Rent received in advance
Decrease due to sale of property and equipment
Long-term prepaid expenses
Other
Sub-totalInterest received
Interest paid
Income taxes paid

(993)

(1,210)(9,912)

10,328,053)

13,944,365)

103,084,677)

41,317)23,872)

412,392)(1,207,550)(1,022,347)(12,052,600)(931)(1,075)(9,293)

9,160,890)

12,944,814)

91,435,176)

Payments of time deposits(3,745,000)(7,538,222)(37,378,980)

Proceeds from time deposits

9,165,000)

3,339,222)

91,476,195)(74,171,252)(8,083,745)(740,305,947)(486,375)―)(4,854,533)―(1,380)―)(1,008,112)(1,120,953)(10,062,009)

Net cash provided by operating activities

Cash Flows from Investing Activities

Purchases of property and equipment
Purchases of intangible assets
Payments of deposits
Repayment of lease deposits received
Proceeds from lease deposits received
Net cash used in investing activities

4,919,704)

1,616,667)

49,103,746)(65,326,036)(11,788,411)(652,021,528)

Cash Flows from Financing Activities
Proceeds from short-term loans

48,000,000)

2,000,000)

479,089,730)

Repayment of short-term loans(25,000,000)(2,000,000)(249,525,901)
99,810,360)

Proceeds from long-term loans

10,000,000)

10,500,000)

Repayment of long-term loans―(6,000,000)―)

Proceeds from investment corporation bond―

25,000,000)―)

Payments of investment corporation bond redemption―(25,000,000)―)

Payments of investment corporation bond issuance costs(1,472)(129,608)(14,700)

32,917,500)―)

328,550,754)(41,154)―)(410,764)(7,585,000)(7,183,610)(75,706,158)
581,793,321)

Proceeds from issuance of units
Payment of new unit issuance costs
Dividends to unitholders

58,289,872)(2,813,218)

Net Increase (Decrease) in Cash and Cash Equivalents

Net cash provided by (used in) financing activities

2,124,726)(1,656,815)

21,206,969)

Cash and Cash Equivalents at Beginning of Period

9,647,825)

11,304,640)

96,295,289)¥11,772,551)¥ 9,647,825)$117,502,258)

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

Japan Real Estate Investment Corporation

27

Notes to Financial Statements
March 31, 2008 and September 30, 2007

1. ORGANIZATION AND BASIS OF PRESENTATION
Organization
Japan Real Estate Investment Corporation (the “Company”) is a real estate investment corporation formed to own and invest primarily in a portfolio of
office properties. The Company is externally managed by a licensed asset management company, Japan Real Estate Asset Management Co., Ltd. (“J-Rea”).
J-Rea is currently owned 36% by Mitsubishi Estate Co., Ltd. (“MEC”), 27% by The Tokio Marine & Nichido Fire Insurance Co., Ltd. (“TMN”), 27% by
The Dai-ichi Mutual Life Insurance Company (“DL”) and 10% by Mitsui & Co., Ltd.
On May 11, 2001, the Company was incorporated with ¥200 million of original capital contribution by MEC, TMN and DL under the Law Concerning
Investment Trusts and Investment Corporations of Japan, or the Investment Trust Law.
On September 10, 2001, the Company commenced operations when the Company was listed on the Tokyo Stock Exchange as one of the first real estate
investment corporations in Japan (so-called “J-REITs”). The Company issued 160,000 units at a price of ¥506,625 ($5,057), generating gross proceeds of¥81,060 million ($809,063 thousand).
On March 12, 2008, the Company completed a sixth public offering of 33,000 units at a price of ¥997,500 ($9,956) generating gross proceeds of ¥32,917
million ($328,551 thousand). As of March 31, 2008, the Company had total unitholders’ capital of ¥297,601 million ($2,970,371 thousand) with 443,000
outstanding units.
At March 31, 2008, the Company owned a portfolio of 53 office properties concerning an aggregate of approximately 479,877 square meters of leasable
space.

Basis of presenting financial statements
The 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, the Corporation Law of Japan, the Financial Instruments and Exchange
Law of Japan and the related regulations, which are different in certain respects as to the application and disclosure requirements of International Financial
Reporting Standards.
The accompanying financial statements are a translation of the audited financial statements of the Company, which were prepared in accordance withJapanese 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 ina format that is more familiar to readers outside Japan. In addition, the notes to financial statements include information that might not be required underJapanese GAAP but is presented herein as additional information.
Amounts in U.S. dollars are included solely for the convenience of readers outside Japan. The rate of ¥100.19=US$1.00, the foreign exchange rate on
March 31, 2008, has been used for translation. The inclusion of such amounts is not intended to imply that Japanese yen has been or could be readily
converted, realized or settled into U.S. dollars at that rate or any other rate.
As permitted under the Japanese Financial Instruments and Exchange Law, amounts of less than one million yen have been omitted. As a result, the totals
shown in the accompanying financial statements do not necessarily agree with the sum of the individual amounts.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESInvestment securities
Non-marketable securities classified as other securities are carried at cost. Cost of securities sold is determined by the moving average method.

Property and equipment
Property and equipment is stated at cost, less accumulated depreciation. The costs of land, buildings and building improvements include the purchase priceof property, legal fees and acquisition costs. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets ranging as statedbelow:
Buildings………………………………………………………………………………………

2-61 years

Structures………………………………………………………………………………………

5-50 years

Machinery and equipment………………………………………………………………….….

3-18 years

Tools, furniture and fixtures…………………………………………..………………..……...

3-15 years

28 Japan Real Estate Investment Corporation

Expenditures for repairing expenses are charged to income as incurred. Significant renewals and betterments are capitalized.
The Company reviews fixed assets for impairment whenever events or changes in circumstances indicate that the carrying amount of its fixed assets may
not be recoverable. Companies are required to recognize an impairment loss in their statement of income if certain indicators of asset impairment exist andthe book value of an asset exceeds the undiscounted sum of future cash flows of the asset. The standard states that impairment losses should be measured
as the excess of the book value over the higher of (1) the fair market value of the asset, net of disposition costs and (2) the present value of future cash
flows arising ongoing utilization of the asset and from disposal after asset use. The standard covers land, factories, buildings and other forms of property,
plant and equipment as well as intangible assets. Fixed assets are grouped at the lowest level for which there is identifiable cash flows that are independentof cash flows of other groups of assets.
Deferred charges
Deferred charges include investment corporation bond issuance costs and new unit issuance costs.
Investment corporation bond issuance costs are amortized using the straight-line method over the amortization periods. Investment corporation bondissuance costs recorded on the balance sheets for the 11th fiscal period and before are amortized using the straight-line method over three years, with anequal amount amortized in each fiscal period.
New unit issuance costs are charged to income as incurred. The underwriters’ commissions of the public offering are not recognized as new unit issuancecosts in the financial statements since such costs are not payable by the Company under the so-called “spread method”. Under the spread method, thedifference between the offer price (the price paid by the unitholder) and the issue price (the price received by the Company) is directly paid to theunderwriters. The difference incurred at the sixth offering on March 12, 2008 was ¥1,039 million ($10,375 thousand).
Revenue recognition
Revenues from leasing of office space are recognized as rent accrued over the lease period.
Taxes on property and equipment
Property and equipment is subject to property taxes and city planning taxes on a calendar year basis. These taxes are generally charged to income during
the period. The sellers of the properties were liable for property taxes for the calendar year including the period from the date of purchase by the Company
through the end of the year since the taxes are imposed on the owner registered in the record as of January 1 based on the assessment made by the local
government. The Company paid the amount equivalent to the property taxes to the sellers applicable to the period since acquisition and included theamount equivalent to the taxes in the purchase price of each property and capitalized as cost of the property.
Consumption taxes
Consumption taxes withheld and consumption taxes paid are not included in the statements of income. The consumption taxes paid are generally offset
against the balance of consumption taxes withheld. As such, the excess of payments over amounts withheld are included in the current assets and the excess
of amounts withheld over payments are included in the current liabilities.
Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits with banks and short-term investments which are highly liquid, readily convertible to cash andwith insignificant risk of price fluctuation, with original maturity of three months or less.

3. INVESTMENT SECURITIESInvestment securities recorded at cost at March 31, 2008 and September 30, 2007 are summarized as follows:
U.S. dollars

Thousands of yen
As of
As of
March 31, 2008
September 30, 2007

As ofMarch 31, 2008

¥1,272,797$12,703,838

Other securities
Non-listed stock¥1,272,797

Japan Real Estate Investment Corporation

29

4. PROPERTY AND EQUIPMENT
Property and equipment at March 31, 2008 and September 30, 2007 consisted of the following:Thousands of yen
As of March 31, 2008

U.S. dollars
As of September 30, 2007

As of March 31, 2008

Acquisition Costs

Book Value

Acquisition Costs

Book Value

Acquisition Costs

Book ValueLand¥307,313,991)¥307,313,991¥267,192,199)¥267,192,199)$3,067,312,020)$3,067,312,020

Buildings and structures

162,694,804)

Accumulated depreciation(18,241,162)

Machinery and equipment

129,501,363)
144,453,641

2,215,416)

Accumulated depreciation

1,601,722

85,840)

Accumulated depreciation

113,951,248)(182,065,699)

1,643,944)(613,694)

Tools, furniture and fixtures（15,550,114)

1,623,862,703)(540,639)

1,441,797,005

22,112,154)
1,103,305)(6,125,307)

85,840)15,986,847

856,781)(30,157)

55,683(22,419)

63,421)(301,001)

555,779

Construction in progress

1,315,581)

1,315,581

974,677)974,677)

13,130,866)

13,130,866

Land in trust

28,996,240)

28,996,240

28,996,240)

28,996,240)

289,412,519)

289,412,519

Buildings and structures in trust

20,505,050)

Accumulated depreciation(4,595,432)

Machinery and equipment in trust

552,694)

Accumulated depreciation(348,391)

Tools, furniture and fixtures in trust

15,909,618(4,319,008)

204,661,652)
15,920,231)(45,867,173)

552,694)
204,303(328,486)

8,724)

Accumulated depreciation
Total

20,239,239)

5,516,462)
224,207)(3,477,304)

8,724)(3,170)5,554¥499,856,336)¥499,856,336(2,912)

158,794,478

2,039,158

87,079)5,811)(31,644)

55,435¥428,431,343)$4,989,084,107)$4,989,084,107

The compressed amount of tangible assets with government grants under the Corporation Tax Law of Japan was ¥50 million ($500 thousand) at March 31,
2008 and ¥50 million ($500 thousand) at September 30, 2007.

5. SHORT-TERM LOANS
Short-term loans at March 31, 2008 and September 30, 2007 consisted of the following:Thousands of yen
As of
As of
March 31, 2008
September 30, 2007

U.S. dollars
As ofMarch 31, 2008―

$ 44,914,662

0.9575% unsecured loan from a trust bank, due on September 24, 2008

4,000,000―

39,924,144

0.9575% unsecured loan from a bank, due on September 24, 2008

4,500,000―

44,914,662

0.9575% unsecured loan from a trust bank, due on September 24, 2008

4,000,000―

39,924,144

0.9575% unsecured loan from a bank, due on March 24, 2009

3,000,000―

29,943,108

1.0083% unsecured loan from a bank, due on March 24, 2009

2,000,000―

19,962,072

1,000,000―

9,981,036¥23,000,000―$229,563,829

0.9575% unsecured loan from a bank, due on March 24, 2009

0.9575% unsecured loan from a bank, due on March 24, 2009
Total

¥ 4,500,000¥

The Company has commitment lines of ¥25,000 million ($249,526 thousand) with four financial institutions to reduce a refinancing risk.
The unused amount of such commitment lines was ¥25,000 million ($249,526 thousand) at March 31, 2008.

30 Japan Real Estate Investment Corporation

6. INVESTMENT CORPORATION BONDS INCLUDING CURRENT PORTION OF INVESTMENT CORPORATION
BONDS
Details of total investment corporation bonds outstanding are summarized as follows:
As ofMarch 31, 2008

As of
September 30, 2007

Amount(thousands of yen)Interest rate(%)

Amount(thousands of yen)Unsecured bond due on April 30, 2008

¥10,000,000)

0.69%

Unsecured bond due on April 30, 2010

10,000,000)

0.98%

Unsecured bond due on September 29, 2025

10,000,000)

Unsecured bond due on June 18, 2012
Unsecured bond due on June 18, 2014

As ofMarch 31, 2008

Interest rate(%)

Amount(U.S. dollars)¥10,000,000)

0.69%$ 99,810,360)

10,000,000)

0.98%

99,810,360)

2.56%

10,000,000)

2.56%

99,810,360)

10,000,000)

1.67%

10,000,000)

1.67%

99,810,360)

15,000,000)

1.91%

15,000,000)

1.91%

149,715,540)

Subtotal¥55,000,000)―¥55,000,000)―$548,956,982)

Less: current portion of investment corporation bonds(10,000,000)―(10,000,000)―(99,810,360)

Total¥45,000,000)―¥45,000,000)―$449,146,621)

7. LONG-TERM LOANS INCLUDING CURRENT PORTION OF LONG-TERM LOANS
Long-term loans at March 31, 2008 and September 30, 2007 consisted of the following:
U.S. dollars

Thousands of yen
As of
As of
March 31, 2008
September 30, 2007

As ofMarch 31, 2008

¥ 2,000,000¥)2,000,000$ 19,962,072

5,000,000

5,000,000

49,905,180

5,000,000

5,000,000

49,905,180

2,000,000

2,000,000

19,962,072

1,500,000

1,500,000

14,971,554

5,000,000

5,000,000

49,905,180

2,000,000

2,000,000

19,962,072

due on November 1, 2011

5,000,000

5,000,000

49,905,180

1.63% unsecured loan from a trust bank, due on April 4, 2011

10,000,000

10,000,000

99,810,360

1.73% unsecured loan from a trust bank, due on June 1, 2011

22,000,000

22,000,000

219,582,793
239,544,865

1.0575% unsecured loan from a bank, due on March 24, 2009
1.015% unsecured loan from an insurance company,
due on March 30, 2009
1.86875% unsecured loan from an insurance company,
due on May 29, 2015
1.47125% unsecured loan from an insurance company,
due on March 30, 2011
1.86875% unsecured loan from an insurance company,
due on May 29, 2015
1.50125% unsecured loan from an insurance company,
due on August 31, 2011
1.55% unsecured loan from an insurance company,
due on October 29, 2012
1.33125% unsecured loan from another financial institution,

1.65925% unsecured loan from banks, trust banks, and an insurancecompany, due on June 23, 2011

24,000,000

24,000,000

1.2875% unsecured loan from a bank, due on December 15, 2009

2,000,000

2,000,000

19,962,072

1.6225% unsecured loan from a bank, due on June 15, 2010

3,000,000

3,000,000

29,943,108

1.10625% unsecured loan from a bank, due on March 24, 2010

2,000,000―

19,962,072

1.4925% unsecured loan from a bank, due on August 31, 2012

1,000,000

1,000,000

9,981,036

1.10625% unsecured loan from a bank, due on March 24, 2010

2,000,000―

19,962,072

1.10625% unsecured loan from a bank, due on March 24, 2010

3,000,000―

29,943,108

1.10625% unsecured loan from a bank, due on March 24, 2010

2,000,000―

19,962,072

1.10625% unsecured loan from a bank, due on March 24, 2010

1,000,000―

9,981,036¥99,500,000¥89,500,000$993,113,085

Subtotal
Less: current portion of long-term loans
Total

7,000,000(―)

69,867,252¥92,500,000¥89,500,000$923,245,833

Japan Real Estate Investment Corporation

31

8. NET ASSETSThe Company is required to maintain net assets of at least ¥50 million ($499 thousand), as required pursuant to the Investment Trust Law.

9. INCOME TAXESAt March 31, 2008 and September 30, 2007, the Company’s deferred tax assets consisted mainly of the enterprise tax, which is not deductible for tax
purposes. The reconciliation of tax rate difference between the adjusted statutory tax rate and the effective tax rate for the six months ended March 31,
2008 and September 30, 2007 were as follows:
For the period from October 1, 2007

For the period from April 1, 2007

to March 31, 2008

to September 30, 2007

Statutory tax rate…………………………………………………..……………39.39%………………………..39.39%
Deductible dividend distribution……………...……………………………….(39.39%) …………………….. (39.38%)
Others……….…………………………………… ……..….……………………0.01%…………………………0.00%
Effective tax rate………………………………… ……………………………...0.01%…………………………0.01%
The Company is subject to Japanese corporate income taxes on all of its taxable income. However, under the Special Taxation Measures Law of Japan, or
the STML, an investment corporation is allowed to deduct dividends of accounting profits, or dividend distributions, paid to investors from its taxable
income if certain tax requirements are satisfied. Such tax requirements include dividend distributions in excess of 90% of its taxable income for the fiscal
period as stipulated by Article 67-15 of the STML. Based on the distribution policy provided by Article 32-2 of the Articles of Incorporation, the Company
made a dividend distribution of integral multiple of number of units up to 100% of retained earnings in the amount of ¥12,945 million ($129,212 thousand)subsequent to March 31, 2008 and treated it as tax deductible dividend. The Company will not distribute the dividends in excess of retained earnings under
Article 32-3 of the Articles of Incorporation.

10. PER UNIT INFORMATION
The following table summarizes information about net assets per unit and net income per unit at March 31, 2008 and September 30, 2007, and for theperiods then ended:
U.S. dollars

Yen
For the period
from October 1, 2007
to March 31, 2008

For the period
from April 1, 2007
to September 30, 2007

Net assets at period end per unit

¥701,009¥664,071$6,997

Net income per unit

¥ 31,299¥ 18,500$6,312For the period
from October 1, 2007
to March 31, 2008

Net income per unit is computed by dividing net income by the weighted average number of units outstanding during each period. Diluted net income perunit has not been presented since no warrants or convertible bonds were outstanding during the period.

32 Japan Real Estate Investment Corporation

11. RELATED PARTY TRANSACTIONS
For the six months ended March 31, 2008 and September 30, 2007
For the period from April 1, 2007 to September 30, 2007
(1)

Parent Company and Major Corporation Unitholders“Not applicable”(2)

Directors and Major Individual Unitholders“Not applicable”(3)

Subsidiaries“Not applicable”(4)

Sister Companies“Not applicable”

For the period from October 1, 2007 to March 31, 2008
(1)

Parent Company and Major Corporation Unitholders“Not applicable”(2)

Directors and Major Individual Unitholders“Not applicable”(3)

Subsidiaries
Party type

Subsidiary

Party name

Harumi Front TMK

Address

Chuo-ku, Tokyo

CapitalBusiness(Millions of yen),¥2,545(U.S. dollars)$25,401,737

Management of specified asset％ of voting stock held (*2)
Relationships

Direct 49.90

Concurrent board appointment
Business relationship―

1. Portfolio investment of the Company
2. Acquisition of real estate and other assets in the Harumi Center
Building through the preferred capital contribution certificates

Details of transaction and transaction amount (*1)

Portfolio investment and acquisition of developed property (*3):(Thousands of yen)

¥26,800,000(U.S. dollars) $267,491,766
Dividend earned:

Year end balance of the account (*1)

Dividend receivables:(Thousands of yen)

¥7,935,763(U.S. dollars)$79,207,138,(Thousands of yen)

¥6,348,610(U.S. dollars)$63,365,710(*1) Neither transaction amount nor balance includes consumption taxes, etc.
(*2) “% of voting stock held” indicates ownership percentage of preferred capital contribution certificates issued by the TMK.
(*3) Transaction terms and policy for determining the terms;
The purchase price is adequately determined considering various factors such as property appraisal value and market.
(4)

Sister Companies“Not applicable”

Japan Real Estate Investment Corporation

33

12. BREAKDOWN OF PROPERTY-RELATED REVENUES AND EXPENSES
For the six months ended March 31, 2008 and September 30, 2007
Thousands of yen
For the period
For the period
from October 1, 2007
from April 1, 2007
to March 31, 2008
to September 30, 2007

U.S. dollars
For the period
from October 1, 2007
to March 31, 2008

Property-Related Revenues¥17,807,712¥17,132,404$177,739,417

Rental Revenues

17,761,985

17,079,232

177,283,012

Rental revenues

13,632,566

13,086,421

136,067,139

Common service charges

2,521,163

2,427,373

25,163,820

506,853504,046

5,058,925

1,101,401

1,061,389

10,993,129

45,72753,172456,405

Cancellation charges

18,68433,478

186,494

Other miscellaneous revenues

27,042

19,693269,911

Parking revenues
Other rental revenues
Non-Rental Revenues

Property-Related Expenses

8,678,165

7,894,956

86,617,079

Property management expenses

1,925,915

1,875,476

19,222,636

Utilities expenses

1,201,728

1,177,925

11,994,495

Property and other taxes

1,338,556

1,346,026

13,360,180

37,95437,391

378,827

Casualty insurance
Repairing expenses

991,096

580,466

9,892,173

3,068,427

2,835,589

30,626,088

114,485

42,0791,142,680¥ 9,129,547¥ 9,237,448$ 91,122,338

Thousands of yen
For the period
For the period
from October 1, 2007
from April 1, 2007
to March 31, 2008
to September 30, 2007

For the period
from October 1, 2007
to March 31, 2008

Depreciation
Other rental expenses
Property-Related Profits

13. BREAKDOWN OF GAIN ON SALE OF PROPERTIESFor the six months ended March 31, 2008 and September 30, 2007
U.S. dollars

Kobe-Itomachi Building―¥1,770,000

Cost of property―

1,334,569―

Other sale expenses―

37,660――¥ ,397,770

Revenue from sale of property

Gain on sale of property

34 Japan Real Estate Investment Corporation

¥

¥

$

$

―

―

14. SUPPLEMENTAL CASH FLOW INFORMATION
The following table represents a reconciliation of cash and cash equivalents at March 31, 2008 and September 30, 2007:
Thousands of yen
As ofMarch 31, 2008

Cash and deposits with banks

U.S. dollars

As ofSeptember 30, 2007

¥ 8,381,956)¥11,459,974)

As ofMarch 31, 2008

$ 83,660,609)

Cash and deposits with banks held in trust

4,742,594)

4,959,850)

47,336,010)

Time deposits with maturities of more than three months(1,352,000)(6,772,000)(13,494,361)

Cash and cash equivalents¥11,772,551)¥09,647,825)$117,502,258)

15. LEASESThe Company owns office buildings under leases and earns rent income. As of March 31, 2008 and September 30, 2007, the future lease revenues under
the non-cancelable operating leases are as follows:
Thousands of yen

Due within one year

U.S. dollars

As ofMarch 31, 2008

As of
September 30, 2007

As ofMarch 31, 2008

¥11,880,599¥ 8,428,079$118,580,693

Due after one year

36,470,031

25,494,616

364,008,700

Total¥48,350,631¥33,922,695$482,589,393

16. SUBSEQUENT EVENTS“Not applicable”

Japan Real Estate Investment Corporation

35

36 Japan Real Estate Investment Corporation

Corporate Data
As of March 31, 2008

Executives

Transfer Agent

Executive Director:

Taketo Yamazaki

The Sumitomo Trust & Banking Co., Ltd.

Supervisory Directors:

Kenji Kusakabe

4-5-33, Kitahama, Chuo-ku, Osaka 540-8639, Japan

Tomohiro Okanoya

Auditors
Paid-in Capital

Ernst & Young ShinNihon¥297,601,460,000

Hibiya Kokusai Bldg.
2-2-3, Uchisaiwaicho, Chiyoda-ku, Tokyo 100-0011, Japan

Number of Units Outstanding

Incorporation

443,000

May 11, 2001

Number of Unitholders

Executive Office

13,534

Japan Real Estate Investment Corporation
3-3-1, Marunouchi, Chiyoda-ku, Tokyo 100-0005, Japan

Stock Listing
Tokyo Stock Exchange

For further information, please contact:
Japan Real Estate Asset Management Co., Ltd.

Securities CodePlanning Department8952

Tel: 81-3-3211-7921
Fax: 81-3-3212-8886

Type of Investment Corporation

E-mail: j-rea-inquiry@j-rea.co.jp

Closed-end corporate type fundThis semiannual report includes translations of documents originally filed under the Financial Instruments and Exchange Law of Japan. This report was prepared in English solely for the convenience of readers outside Japan and should not be considered as a disclosure statement. The original Japanese documents
shall take precedence in the event of any discrepancies arising from the translations or interpretations contained in this report.
Estimates for Japan Real Estate Investment Corporation’s future operating results contained in this semiannual report are forward-looking statements and are
based on information currently available to the Company and its asset management company and are subject to risks and uncertainties. Consequently, theseprojections should not be relied upon as the sole basis for evaluating Japan Real Estate Investment Corporation. Actual results may differ substantially from the
projections depending on a number of factors.

Japan Real Estate Investment Corporation 37

http://www.j-re.co.jp/english/

Issued on August 31, 2008