November 18, 2004
JAPAN REAL ESTATE INVESTMENT CORPORATIONANNOUNCEMENT OF SIXTH FISCAL PERIOD RESULTS
1. Summary of Financial Results
In the sixth fiscal period (six months ended September 30, 2004), Japan Real Estate
Investment Corporation (“JRE”) recorded operating revenues of 10,151 million yen, up
6.2 percent from the previous period. Operating profits rose 0.4 percent, to 4,358
million yen, and income before income taxes increased 0.7 percent, to 3,831 million yen.
Net income was up 0.7 percent, to 3,830 million yen.
JRE’s policy with regard to profit appropriation is to distribute dividends ofapproximately 100 percent of taxable income, in order to enjoy the tax benefit available
under Article 67-15 of the Special Taxation Measures Law of Japan applicable to
J-REITs. For the period under review, we declared a cash dividend of 14,711 yen perunit.
As of September 30, 2004, JRE’s total asset balance was 257,372 million yen
and its net worth was 137,279 million yen, or 527,185 yen per unit. On its balance sheet,
JRE had interest-bearing debt of 99,000 million yen.

2. Results of Operations(1) Property Management and Acquisition
During the period under review, the Japanese economy remained on track for a recovery,
emboldened by robust capital investment on the back of strong corporate earnings,
resilience in consumer spending and a decline in the unemployment rate.
In the market for leased office space, the supply of new office buildings incentral Tokyo decreased from the previous fiscal period, leading to a gradual correctionin the oversupply of office buildings toward equilibrium in supply and demand. In
addition, vacancy rates began to improve in competitive office buildings. Demand for
office floor space in regional urban centers, however, remains weak overall despite
renewed vitality in some major cities such as Nagoya. In general, therefore, theoperating environment remains difficult.
JRE maintained a high occupancy rate of 93.6 percent (as of September 30,2004) by (1) acquiring top-level properties and upgrading building facilities throughoptimal refurbishment in order to maintain and improve functions; (2) developing finely
tuned building management policies from the perspective of tenants while undertaking
vigorous sales activities; and (3) raising its emphasis on fixed-term and long-term lease
contracts. JRE is working to reduce costs with a view to further enhancing profit
stability. Our basic policy is to lower property management fees and utility expenses by
5 percent within the first three years of new property acquisitions. Of the total numberof properties acquired up to the end of the fourth fiscal period and including properties
acquired during the six-month period April 1, 2003 through September 30, 2003,
twenty-eight properties are subject to this cost reduction program. Despite being
midway through the program period, we have already reduced costs of those properties
by 11.4 percent per year, based on the results of our fifth and sixth fiscal periods(October 2003 to September 2004).
Regarding the property market, bad-debt write-offs by financial institutions andthe adoption of asset-impairment accounting have helped sustain active property sales.
At the same time, in the face of difficult fund-management conditions stemming from
low interest rates, such entities as private funds, pension funds, and qualifiedinstitutional investors are stepping up their acquisition of real estate, besides JapaneseReal Estate Investment Trusts (J-REITs).
In an increasingly competitive market, JRE uses its own information network
to collect data on the sales of numerous properties. We have made acquisitions based on
meticulous examination of these data, and after determining optimal prices from many
perspectives, including profit stability of the entire company and expected rate of return.
On April 1, 2004, we acquired additional ownership shares in the Yoyogi 1-Chome
Building (8,700 million yen investment) and the Ebisu Neonato (360 million yen
investment for additional 1.2% ownership, bringing JRE’s total ownership to 12.3%). In
addition, we acquired the Ikebukuro YS Building (4,500 million yen investment) on
August 2, 2004, and the Shinwa Building (7,830 million yen) on September 1, 2004. Asof September 30, 2004, JRE’s assets consisted of 39 office buildings, with a total valueof 239,827 million yen, net rentable floor area of 293,105 m2 (approximately 89,000
tsubo), and a total of 466 tenants.

(2) Fund-Raising Activities
During the fiscal period under review, JRE raised funds through borrowings to acquire
properties. To mitigate the risks of higher interest rates and refinancing in the future,
JRE focused on stabilizing its financing over the medium and long term by increasing
funds through fixed-interest long-term loans. In an effort to further stabilize its financial
position, JRE established a new commitment line totaling 20 billion yen on July 21,
2004, with a view to ensuring a flexible and secure means of procuring funds.
On September 30, 2004, JRE had total borrowings of 54 billion yen, including 10
billion yen in short-term loans (up 1 billion yen from the previous fiscal period), 44

billion yen in long-term loans (up 11 billion yen from the previous fiscal period), andoutstanding corporate bonds valued at 45 billion yen (unchanged from previous fiscal
period).
JRE has received the following credit ratings.
Rating Agency

Issuer Credit RatingStandard & Poor’s

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

Moody’s Investors Service

Rating: A1; Outlook: Stable* On November 11, 2004, Moody’s Investors Service raised its rating on JRE’s issuer
credit rating and rating for unsecured corporate bonds from A2 to A1.

3. Outlook(1) Operating Environment
Despite expectations for a full-scale recovery in the Japanese economy, some points ofconcern have emerged relating to the external demand that has driven the Japanese
economy so far, such as projections for a slowdown in the United States economy.
Accordingly, the pace of economic recovery in Japan may weaken.
In the office building leasing market, despite signs of improvement in some
occupancy rates and a slowing decline in leasing rates, a broad-based recovery remains
distant, and in the context of the trend towards polarization, high quality officebuildings will see a rise in occupancy rates, while the rate in other buildings will fall.
Meanwhile, tenants have stringent demands not only with respect to location,building quality, and facilities, but also for high-quality building management andvalue-added services. For these reasons, tenants have become more and more
discriminating when selecting buildings. To meet these needs, suppliers must provide

services that correctly and promptly reflect the needs of tenants and deliver added valuethat differentiates their buildings from the competition.
In the real estate market, properties will continue being sold to settle
non-performing loans and for asset impairment accounting purposes. In light of recent
increases in demand, JRE believes that competition will further intensify for theacquisition of prime properties.

(2) Property Management
In accordance with the aforementioned, we expect conditions in the office building
leasing market to soften, despite expectation for some improvement. JRE is adopting
the following management policies in order to maintain and improve earnings.

(i) Strengthen relationships of trust with existing tenants
As of September 30, 2004, JRE had contracts with nine property managementcompanies. Most of these companies were already managing their respective buildings
before they were acquired by JRE, and so have built relationships of trust with theirtenants. Strengthening these relationships by anticipating tenants’ needs and providing
tailored services helps increase tenant satisfaction, prevent cancellation of contracts,
reduce turnover, and curb demands for reduced rents.

(ii) Fill vacancies promptly
In cooperation with the property management companies mentioned above, JRE
actively seeks the best tenants for each property, based on location and features, in order
to fill current and anticipated vacancies as rapidly as possible. We are also working touncover additional demand for office floor space among our existing tenants.

(iii) Promote fixed-term and long-term lease contracts
While considering overall balance, JRE is gradually shifting to fixed-term andlong-term contracts.

(iv) Reduce management costs
JRE has introduced sound competitive principles for its nine property managementcompanies to follow. Those companies are also revamping their management systems
and cost structures. Our target for properties owned as of March 31, 2004, is to reduce
the sum of property management fees and utility expenses by 5 percent within three
years of acquisition.

(3) Property Acquisition
JRE has adopted the following policies for acquiring properties in order to improveearnings through steady asset expansion increase and growth.

(i) To access important information quickly, JRE is enhancing its property information
channels, including strengthening its relationship with building owners, with whom it
has previously conducted business. We are also working to develop new channels.

(ii) In its acquisition activities, JRE will continue to meticulously monitor and examine
economic, physical, and legal factors, including rights-related issues. We will also takebusiness conditions into account when selecting properties. With regard to the structure

of buildings, we require buildings to meet or exceed new earthquake-resistant standards,
and we are targeting properties capable of maintaining a competitive edge over the
medium and long terms.

(iii) JRE’s general target for regional diversity of property ownership, in accordancewith its acquisition policies, is for 60 percent to 80 percent of properties to be locatedwithin the Tokyo metropolitan area, with the remaining 20 percent to 40 percent locatedin regional urban centers. It is possible, however, that future trends in office demand
may prompt JRE to temporarily depart from these ratios and increase the proportion of
its holdings in the greater Tokyo area.

The appropriate timing for property acquisition cannot be ascertained in advance. Whenfunding property acquisition, therefore, JRE's policy is to take out short-term loans at
the time of purchase and later select various options for capital procurement, including
corporate unit issues, according to trends in financial markets. When effecting a loan,
our policy is to minimize funding costs by negotiating with several qualified
institutional investors before settling on a lender.

4. Performance Forecasts
In the six-month period from October 1, 2004, to March 31, 2005, we forecast operating
revenues of 10,400 million yen, income before income taxes of 4,000 million yen, andnet income of 4,000 million yen. We plan to declare a dividend of 15,400 yen per unit.
Actual figures for operating revenues, income before income taxes, net income, andcash dividends may vary due to changes in business conditions.

These estimates are based on conservative assumptions of the portfolio of 39
properties as of September 30, 2004, and the Higashi Gotanda 1-Chome Building newly
acquired as of November 1, 2004, and excludes any other additional acquisitions.
Under the same scenario, our forecasts for the eighth fiscal period (April 1,
2005, to September 30, 2005) are operating revenues of 10,400 million yen, income
before income taxes of 4,000 million yen, net income of 4,000 million yen, and cash
dividends of 15,400 yen per unit.

After September 30, 2004, JRE acquired the following office building.

Higashi Gotanda 1-Chome Building

Transaction Summary
Acquired asset: Real estate (ownership rights for land and building)Acquisition price: 5,500 million yen
Acquisition date: November 1, 2004

Property Summary
Location: 24-2, Higashi Gotanda 1-chome, Shinagawa-ku, Tokyo
Use: Offices and storesLand area: 1,539.95 m2
Floor area: 6,460.39 m2
Structure: Steel-framed reinforced concrete structure with flat roof, eight floors above
groundConstruction completed: July 2004
Tenants: 3
Net rentable area: 5,205 m2
Net rented area: 1,790 m2
Occupancy rate: 34.4 percent

Note: The above figures for the number of tenants, net rentable area, net rented area,
and occupancy rate are current as of the date of acquisition. The figures are based ondata provided by the vendor.

This notice is a translation in English of the announcement of Sixth Fiscal Period
Results in Japanese on November 18, 2004 on our Web site. No assurance or warranties
are given for the completeness or accuracy of this English translation.

Contact Information:

Takuro Yamanaka
Planning Department
Japan Real Estate Asset Management Co., Ltd.
Tel: +81-3-3211-7921

Income Statement for the 6th Period(In millions of yen)
5th Period

6th Period (183 days)
Item

Operating Revenue
Rental revenue
Other rental revenues
Operating Expenses
Property management fees
Utility charges
Property and other taxes
Insurance expenses
Maintenance expenses
Other operating expenses
NOI
Depreciation and amortization
Operating Profit
Administrative expenses
Asset management fees
Other administrative expenses
Net Operatng Profit
Non-Operating Revenue
Interest received
Other non-operating revenues
Non-Operating Expenses
Interest expenses
Bond interest expenses
Deferred bond-issuance cost
Other non-operating expenses
Recurring Profit
Gross Income
Taxes
Net Income
Retained Earnings

36 existing
properties

9,770
9,724
46
3,458
1,217
876
936
26
363
38
6,311
1,558
4,754

Newly acquired
properties*

381
380
1
20
17
2
0
1
0
0
361
99
261

Total

(183 days)

10,151
10,104
47
3,478
1,234
878
936
27
363
38
6,672
1,657
5,015
656
362
293
4,358
2
0
2
529
221
248
0
59
3,831
3,831
0
3,830
3,830

9,560
9,461
98
3,105
1,127
779
791
24
365
16
6,455
1,498
4,956
615
325
290
4,341
0
0
0
538
163
248
61
64
3,803
3,803
1
3,802
3,802

FFO (Net Income＋Depreciation)

5,488

5,301

Dividends per Unit

14,711

14,602

Change % Change

591

6.2%

373

12.0%

217

3.4%

59
41

1.2%
6.7%

17
2

0.4%

△9

△ 1.7%

28
28

0.7%
0.7%

28

0.7%

187

3.5%

* Newly acquired properties are the Yoyogi 1-Chome Building, Ikebukuro YS Building, Shinwa Building andEbisu Neonato (additional shares).

Balance Sheet for the 6th Period
In millions of yen
6th Fiscal Year-end

5th Fiscal Year-end（Sep 30, 04)(Mar 31, 04)

16,847

24,779△ 7,932

352

666

△ 314

17,19925,445△ 8,246

Buildings
Structures
Machinery and equipment
Land

77,095478
1,417
167,381

68,700394
1,270
153,254

8,395
84
147
14,127

Accumulated depreciation△ 8,149△ 6,496△ 1,653

Total Property and equipment

238,222

217,122

21,100

1,912
1,912

1,912
1,912

0
0

38

46

△8

38

46

△8

Total Fixed Assets

240,173

219,078

21,095

Total Assets

257,372

244,523

12,849Item

ChangeReason for Change

Current Assets
Cash and entrusted cash
Other current assets
Total current assets
Fixed Assets
Property and equipment

Intangible Assets
Leasehold rights
Total Intangible Assets
Investments and Others
Long-term prepaid expenses, etc.

Total Investments and Others

Increased due to property
物件取得（神宮前メディアスク
acquisitions(Yoyogi 1-Chome
エア、恵比寿ネオナート他）にBuilding,
Ikebukuro YS
よる増加 Shinwa Building, etc.
Building,
and capital expenditureＵＰＤＡＴＥ

In millions of yen
Item

6th Fiscal Year-end

5th Fiscal Year-end(Sep 30, 04)(Mar 31, 04)

ChangeReasons for Change

Liabilities
Current Liabilities
Short-term borrowing

10,000

9,000

1,000

Rent received in advance

2,196

1,582

614

Other current liabilities

1,232

1,777

△ 545

13,42812,3591,069

Investment Corporation Bonds

45,00045,000−Long-term borrowing

44,00033,00011,000

Deposits from tenants

16,783

16,914

△ 131

882

−

106,665

94,914

11,751

120,093

107,273

12,820Unitholder capital

133,448

133,448−

Retained earnings

3,831

3,802

29

Total Unitholder Equity

137,279

137,250

29

Total Liabilities and Unitholder Equity

257,372

244,523

12,849Total Current Liabilites

Increased due to borrowings throughcommitment line, etc.

Long-term Liabilities

Other Long-term Liabilities

Total Long-term liabilities
Total Liabilities

Increased due to borrowings from MitsuiLife Insurance Co., Ltd, etc.

Increased due to long-term rent
882 received in advance for Yoyogi 1Chome Building

Unitholder Equity

Portfolio Summary
In millions of yen

Area

Name

23 WardsTokyo
Metropolitan
Area

6th Period
Appraisal
Value

5th Period
Appraisal
Value

6th Period
Book Value

Acquisition
Price

Year Built

RentableArea(m2)

Occupancy
Rate(Sep 30, 04)(Sep 30, 04)（Sep 30, 04)(Mar 31, 04)（Sep 30, 04)

Genki Medical Plaza

5,700

5,510

5,249

5,000

1985

4,791

100.0%MD Kanda Building

8,130

8,110

9,425

9,520

1998

6,269

100.0%

Kandabashi Park Building

4,840

4,940

4,773

4,810

1993

3,687

100.0%

Mitsubishi Soken Building

30,40030,40027,05827,2671970

18,006100.0%

Yurakucho Denki Building

6,820

6,780

7,573

7,200

1975

4,694

100.0%

Kodenmacho Shin-Nihonbashi Building

3,240

3,240

3,034

3,173

1991

3,897

100.0%

Burex Kyobashi Building

5,290

5,110

5,326

5,250

2002

4,279

100.0%

Aoyama Crystal Building

7,330

7,170

7,742

7,680

1982

4,916

100.0%

Shiba 2-Chome Daimon Building

5,250

5,110

5,023

4,859

1984

9,643

100.0%

Cosmo Kanasugibashi Building

2,920

2,840

2,714

2,808

1992

4,062

100.0%

Takanawadai Building

2,530

2,830

2,639

2,738

1991

4,091

100.0%JAL Travel Building

1,420

1,390

1,303

1,362

1991

3,383

100.0%

Omori-Eki Higashiguchi Building

5,180

5,180

4,841

5,123

1989

7,708

100.0%

Nippon Brunswick Building

7,170

6,930

6,728

6,670

1974

7,347

99.3%

da Vinci Harajuku

5,140

5,010

5,017

4,885

1987

3,051

100.0%

Jingumae Media Square Building

12,67012,41012,301

12,200

1998

5,558

91.3%

Shibuya Cross Tower

34,40034,10035,532

34,6001976

29,775

99.9%

Ebisu Neonato

3,851

3,760

4,107

3,740

1994

2,462

100.0%

Otsuka Higashi-Ikebukuro Building

3,410

3,370

3,345

3,541

1987

7,114

91.0%

Ikebukuro 2-Chome Building

1,420

1,490

1,685

1,728

1990

2,186

100.0%

Saitama Urawa Building
Excluding 23
Shin-Yokohama First Building
Wards
Kawasaki Isago Building

2,360

2,390

2,514

2,574

1990

4,510

92.1%

1,620

1,700

3,039

3,000

1992

6,925

75.4%

Sendai Honcho Honma Building
Niigata Ishizuecho Nishi-bandaibashi Building

Kanazawa Park Building

Other Major Cities

3,110

3,146

3,375

1990

6,831

100.0%

2,970

2,769

2,924

1991

5,829

100.0%

755

771

1,013

1,010

1984

4,383

95.8%

5,390

5,460

4,669

4,580

1991

21,343

90.5%

Kanazawa Minamicho Building

1,010

1,090

1,295

1,331

1987

3,782

84.0%

Nagoya Hirokoji Building

14,60014,60014,194

14,533

1987

21,59098.3%

Nagoya Misono Building

1,840

1,840

1,818

1,865

1991

3,470

100.0%

Kyoto Shijyo Kawaramachi Building

2,050

2,130

2,964

2,650

1982

6,800

88.8%

Sakaisuji-honmachi Building*

4,170

4,560

4,199

4,164

1992

11,574

40.1%

Midosuji Daiwa Building

13,50013,50014,022

14,314

1991

20,449

96.1%
96.2%

Kobe Itomachi Building

966

999

1,394

1,436

1989

3,478

NHK Hiroshima Broadcasting Center Building

1,350

1,350

1,348

1,320

1994

5,470

80.6%

Tosei Tenjin Building

1,370

1,400

1,497

1,550

1992

4,080

92.0%

3,470

3,600

3,500

3,657

1987

5,902

84.3%

217,632

217,150
7,772

100.0%

Hinode Tenjin Building
Subtotal
Yoyogi 1-Chome Building
Properties acquired in the
6th Period

3,140
2,930

8,710

-

8,817

8,700

2003

369

-

added to theexisting shares

360

1994

Ikebukuro YS Building

4,450

-

4,566

4,500

1989

5,715

Shinwa Building

7,800

-

7,934

7,830

1989

6,265

88.0%

238,961

217,150

240,134

239,827

293,105

93.6%

Ebisu Neonato (additional shares)

Total (39 properties)

added to the existing shares

90.5%*The name of Fukusuke Sakaisuji-honmachi Building was changed to Sakaisuji-honmachi Building on July 1, 2004.

Appraisal
Value(beforeacquisition)

Area

Name

Property to be acquired inthe 7th Period

Higashi Gotanda 1-Chome Building*

5,200

Total

5,200

*The Higashi Gotanda 1-Chome Building was acquired on November 1, 2004.
*The occupancy rate of the building is expected to be 100 % on November 20, 2004.
*Appraisal Firms : Daiwa Real Estate Appraisal Co., Ltd. and Appraisal Firm A square Co., Ltd.

--

Acquisition
Price

Year Built

Rentable
Area (m2)(Acquisition
Date)

Occupancy
Rate(Acquisition
Date)

5,500

2004

5,205

34.4%

-

-

5,500