SEPTEMBER
2009
Semiannual
Report
For the period from April 1, 2009 to September 30, 2009

Japan Real Estate Investment Corporation

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, and it isaiming 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.

Contents
Financial Highlights

p. 1

Top 10 Unitholdersp. 1

Unit Price Performancep. 1

The Highlights of Japan Real Estate
Investment Corporation

p. 2

Portfolio Highlights

p. 3

Transfer of Unused Development Rights

p. 4

Subsequent Events

p. 5

History after IPO

p. 6

To Our Unitholders

p. 8

The Portfolio of Japan Real Estate
Investment Corporation

p.12

Overview of Portfolio Properties

p.15

Financial Section

p.23

Introduction of the Company's Website

p.38

Corporate Data

p.39

Financial Highlights
Thousands of U.S.dollars(Note 1)Millions of yen
For the period from
April 1, 2009 to
September 30, 2009

For the period from
October 1, 2008 to
March 31, 2009

For the period from
April 1, 2008 to
September 30, 2008

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
April 1, 2009 to
September 30, 2009

21,524
10,054
8,505
8,504

20,716
9,955
8,426
8,425

19,805
9,807
8,449
8,448

25,743
14,21812,946
12,945

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

238,603
111,461
94,287
94,276Net Operating Income (NOI) (Note 2)
Funds from Operations (FFO) (Note 3)
FFO Multiple (Note 4)

13,95011,57714.1 times

14,575
12,21313.7 times

14,173
12,00915.5 times

12,1978,078
31.9 times

12,073
10,02228.3 times

154,647
128,338
14.1 times

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

8,504
443,000
19,1988,425
443,000
19,0208,448
443,000
19,072

12,945443,000
29,223

7,585
410,000
18,50094,277443,000
212.81

Operating Revenues
Operating Income
Income before Income Taxes
Net Income

Notes: 1. Amounts in U.S. dollars are included solely for the convenience of readers outside Japan. The rate of ¥90.21= US$1.00, the foreign exchange rate on
September 30, 2009, has been used for translation. The inclusion of such amounts is not intended to imply that Japanese yen amounts have 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 (excluding Depreciation)
3. FFO = Net Income + Depreciation – Gain (Loss) on Transfer of Properties – Dividends Earned – Gain on Transfer of Development Rights of Floor Area
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 183 days for the period ended September 30, 2007, 183 days for the period
ended March 31, 2008, 183 days for the period ended September 30, 2008, 182 days for the period ended March 31, 2009 and 183 days for the period ended
September 30, 2009.)

Top 10 Unitholders
As of September 30, 2009
Company

Japan Trustee Services Bank, Ltd. (Shintaku Acc.) ..................................................................................................
NikkoCiti Trust and Banking Corporation (Toshin 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.) .......................................................................................
Mitsubishi Estate Co., Ltd. .....................................................................................................................................
THE BANK OF NEW YORK, TREATY JASDEC ACCOUNT .........................................................................
North Pacific Bank, Ltd. .........................................................................................................................................
The Chugoku Bank, Ltd. ........................................................................................................................................
RBC DEXIA INVESTOR SERVICES TRUST, LONDON-CLIENTS ACCOUNT ...........................................

Units% of total units
outstanding

36,38935,57134,33020,774
13,775
10,160
7,613
7,493
7,168
5,403

8.21%
8.03%
7.75%
4.69%
3.11%
2.29%
1.72%
1.69%
1.62%
1.22%

The Company

PO Price

Unit Price Performance
TSE REIT Index

TOPIX

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

Mar.

2001

2002

Sept.

Mar.

2003

Sept.

Mar.

2004

Sept.

Mar.

2005

Sept.

Mar.

2006

Sept.

Mar.

2007

Sept.

Mar.

2008

Sept.

Mar.

Sept.

2009

Japan Real Estate Investment Corporation 1

The Highlights of Japan Real Estate Investment Corporation

Highlights

Maintenance of Stable Dividends andSteady Performance— The first listed J-REIT, showing steady performance for 16 consecutive periods— Actual dividend per unit for the 16th fiscal period:¥19,198¥17,320($212.81)* 1— Forecasted dividend per unit for the 17th fiscal period:($192.00)*1, 2

Notes: 1. The foreign exchange rate of ¥90.21 = US$1.00, as of September 30, 2009, has been used for this translation.
2. The forecasted dividend was disclosed with the announcement of the 16th fiscal period earnings results on November 18, 2009.

Collaboration with Sponsors— Expertise of Mitsubishi Estate Co., Ltd., The Dai-ichi Mutual Life

Insurance Company and Mitsui & Co., Ltd. is being fully utilized.

Steady Growth with Quality Portfolio— Total acquisition price:— Maintains

55¥564,219million($6,255 million)

high-quality office buildings

Sound Financial Base— Highest credit ratings for a J-REIT:(as of September 30, 2009)AA-— LTV(Interest-bearing debt / Total assets):

A1
39.1%
78.2%
from S&P,

from Moody’s,AAfrom R&I— Long-term, fixed-interest debt ratio*:

Note: Long-term, fixed-interest loans + Investment corporation bonds (including current portions of Long-term, fixed-interest loans
and Investment corporation bonds) / Total Interest-bearing debt

2 Japan Real Estate Investment Corporation

Portfolio Highlights

Trends in the state of portfolio management
Number ofbuildings(Note 1)

Total numberof tenants(Notes 1, 2)

Total leasable
space(Note 1)

September 2001

20

213

March 2002

24

September 2002

27

March 2003

Occupancy
rate(Note 1)

133,927m

2

94.6%

353

201,884m

2

94.0%

362

215,928m 2

95.3%

30

383

236,693m 2

94.4%

September 2003

32

407

246,062m

2

95.1%

March 2004

36

477

273,157m 2

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

400,090m 2

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%

March 2008

53

931

479,877m 2

95.9%

September 2008

54

970

508,296m 2

96.1%

March 2009

55

993

516,411m 2

95.5%

2

95.5%

April 2009

55

992

516,440m

May 2009

55

987

516,441m2

95.2%

June 2009

55987

516,423m2

94.8%

July 2009

55979

516,421m2

93.9%

August 2009

55

977

516,421m2

93.6%

September 2009

55

977

516,421m2

93.3%

Notes: 1. The number of properties, total number of tenants, total leasable
space and occupancy rate do not include the land and building
adjacent to the Ryoshin Ginza East Mirror Building.
2. The total number of tenants is the gross number of tenants
by building.

Total leasable space (m 2)100,000

200,000

300,000

400,000

500,000

600,000

Total leasable
space
Occupancy rate

16th 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 September 30, 2009

Properties bygeographic
region(Percentage based on
acquisition price)

Tenants byindustry
type

Other major
cities18.0%(Percentage basedon leased space)

Steel and metals 1.2%
Transport services and travel 1.4%
Ceramics 1.5%
Staffing agencies 1.8%

Others12.4%

Textiles 1.9%

Serviceindustries
16.3%

Communications 3.0%

Information
services
11.0%
Financeandinsurance
10.4%

Machinery 4.3%
Tokyo metropolitan area
excluding 23 wards
9.4%

Tokyo 23 wards
72.6%
Pharmaceuticals 6.3%

Electric devices 6.5%

Construction 6.5%
Real estate 6.9%

Retail andrestaurants
8.4%

Japan Real Estate Investment Corporation 3

Transfer of Unused Development Rights
For the period from April 1, 2009 to September 30, 2009

Mitsubishi UFJ Trust and Banking Building Site
The Company sold its development rights for an unused floor area equivalent to 65% of the Mitsubishi UFJ Trust andBanking Building (see Note 1) to third parties and accordingly reallocated the unused floor area ratio to a new building
scheduled to be constructed under the Marunouchi 1-4 Plan (a combined reconstruction of the Togin Building, the Sumitomo
Trust & Banking Tokyo Building and the Mitsubishi UFJ Trust and Banking Tokyo Building) adjacent to said building site.
Outline of the transfer
Object of transaction:

Transfer price:Transfer date:
Transferees:

Unused floor area equivalent to 65% of
the Mitsubishi UFJ Trust and Banking Building site
(1,026.88 m2 in terms of floor space, held by the Company)¥729 million ($8 million)
September 17, 2009The Sumitomo Trust & Banking Co., Ltd. and
Mitsubishi Estate Co., Ltd.

The gain on the transfer, totaling¥728 million, was recorded in the
period under review.

Background of the unused floor area ratio
The standard floor area
ratio in the Marunouchi
area was 1,000% prior tothe construction of thisbuilding.

Following the formulation of anurban development plan for designated city blocks, the allowablefloor area ratio was increased by
234%, for a total of 1,234%.

In 2004, the standard
floor area ratio in
Marunouchi wasrevised to 1,300% .

Unused floorarea ratio of
6 6 % created

1,300%

Revised to(Standard floor area ratio in
Marunouchi)

Increase

1,000%

234%(Standard floor area
ratio in Marunouchi)

Mitsubishi UFJ Trustand Banking Building
completed with a floorarea ratio of 1,234%.
(2003)

1,000%

Building completed in 2003

1,234%

After revision to the standard
floor area ratio in 2004

Current designated floor area ratio

Marunouchi 1-Chome
Specified Blockat the time of construction 1,234% +Floor area ratio for underground passage
connection 1%)

combining the two building sites

1,235% (Designated floor area ratio

1%Standard floor area ratio

1,300%

Scheduled connection to the building under
the Marunouchi 1-4 Plan via undergroundpassage (floor area ratio equivalent to 1%)(see Note 2)

Industry Club of Japan Hall /Mitsubishi UFJ Trust andBanking Building<Joint owners>
Mitsubishi Estate Co., Ltd.
The Industry Club of JapanThe Company

ch in o u chO te m ai L in e

ch i

Mar u

65%

65%

O te m a

O te ma ch iTo z a i

L in eTo k yo(Standard floor area ratio − Designatedfloor area ratio) 1,300% − 1,235% =<Executing entities>
Mitsubishi Estate Co., Ltd.
The Sumitomo Trust & Banking Co., Ltd.
OthersC h iy oMarunouchi 1- 4 Plan

Unused floor area ratio

O te ma ch iTo e iM it aL in eTransfer of development rights for an
unused floor area equivalent to 65% of theIndustry Club of Japan Hall/Mitsubishi
UFJ Trust and Banking Building located in
the same block

O te m ach i
d a L ineTransfer scheme

Notes:1. The Mitsubishi UFJ Trust and Banking Building is a unified construction project with the Industry Club of Japan Hall.
2. Owing to the construction of an underground passage, it will be possible to directly access Tokyo Metro Otemachi Station from the Mitsubishi UFJ Trust andBanking Building via the new building scheduled to be constructed under the Marunouchi 1-4 Plan.

4 Japan Real Estate Investment Corporation

Subsequent Events
After the period ended September 30, 2009

Transfer of Asset (Part of Jingumae Media Square Building Site)

ae

ma

um

gu

ing

Me

iji

ijij

Tokyo City
Planning
Road Line

Jingumae Media Square
BuildingeSite (excluding
servient land)

Li nTransfer area:
Transfer price:Transfer date:

Land (part of Jingumae Media Square Building site)
Part of 6-25-7, 32, 40 and 50 Jingumae, Shibuya-ku, Tokyo
Whole part of 6-319-5, 28 and 30 Jingumae,
Shibuya-ku, Tokyo
137.01 m2 (1,475 ft2)
Site Map¥1,507 million ($17 million)
October 30, 2009

Me

hin

Object of transaction:
Location:

Ch iyo da Lin ejin

Outline of the transfere

In response to land expropriation aimed at expanding Meiji-Dori Street and for other purposes following project approvals granted
on March 31, 2004, the Company transferred its share of the Jingumae Media Square Building site to the Tokyo Metropolitan
Government on October 30, 2009.

Fu

eij
M

Transferred land
(137.01m 2 )

i-d

or

iS

t.

ku

tos

Building

The gain on the transfer, totaling¥880 million, will be recorded in the period
ending March 31, 2010. (see Note)

Note: The gain on the transfer stated above is an estimate made in line with the November 18, 2009 announcement of financial results for the 16th fiscal period,
ended September 30, 2009. Accordingly, the actual figure may differ from this estimate.

Acquisition of a Prime Property
Shiodome Building (Additional Acquisition)
Scheduled acquisition date: January 15, 2010
Acquisition price:¥54,600 million ($605 million)
Location:
1-2-20 Kaigan, Minato-ku, Tokyo
Site area:
Approx. 12,046 m2 (129,662 ft2) (total land area of the building site) (Note 1)
Floor area of building: 115,930.83 m2 (1,247,868 ft2) (total floor area of the entire building)
Ownership:
30.0% quasi-co-ownership of the trust beneficiary right of this property (Note 2)
Structure:
Steel-framed, steel-framed reinforced concrete , flat roof
Floors:Above ground: 24 floors
Below ground: 2 floors
Completion:
December 2007
Property managementcompany:
Mitsubishi Jisho Property Management Co., Ltd.
Notes: 1. As the property lies within an area designated for execution of the Shiodome Land Readjustment Project under
the Tokyo Metropolitan Urban Land Development Business Plan, the land area for the building site presented
above is the total of the land area of the designated provisional replotting.
2. As of November 18, 2009, the Company owns 10.0% of the quasi-co-ownership of the trust beneficiary right ofthe property. The Company plans to acquire the additional 30.0% quasi-co-ownership described above on
January 15, 2010. As a result, the Company will own 40.0% of the trust beneficiary right of the property.

Issue of New Investment Units
The Company’s Board of Directors held a meeting on November 18, 2009 and passed a resolution concerning the issue of new
investment units. Brief details are presented below. The per-unit offer price and other conditions are scheduled for determination ata Board of Directors meeting to be held in December 2009.
Issue of new investment units through public offering

Issue of new investment units through third-party allocation

Number of units to be issued:
42,000Starting date for dividend calculation: October 1, 2009

Number of units to be issued:
4,200
Starting date for dividend calculation: October 1, 2009
Allottee:
Nikko Cordial Securities Inc.
In the event that the units to be issued through this third-party allocation do not receive
an offer in whole or in part, due to forfeiture of the subscription right, the number ofunits to be issued through the third-party allocation may decrease to that extent, or thethird-party allocation may be cancelled entirely.

Japan Real Estate Investment Corporation 5

Histor y after IPO
In September 2001, the Company became the first J-REIT in Japan listed on the Tokyo Stock
Exchange (“TSE”). Since then, the Company has targeted stable management to fulfill its goal of
maintaining and increasing dividends per unit over the medium to long term. The Company’s growthis based on external growth strategies that aim to increase earnings through the acquisition and transfer of properties as well as internal growth strategies that seek to optimize earnings from properties

Occupancy rate
(Note)

94.6%

94.0%

95.3%

95.1%

94.4%

94.8%

97.6%
93.6%

Steady growth inasset size

First J-REIT in Japan listed on
TSE began with ¥92.8 billion in assets.

Total acquisition price¥290,510(Number of properties)(Note)¥144,697
million(24)¥92,845¥164,277
million(27)¥183,542 ¥192,607
millionmillion(30)(32)

Period ended
Mar. 2003

Period ended
Sept. 2003

¥218,437 ¥239,827
millionmillion(36)(39)

Period ended
Mar. 2004

Period ended
Sept. 2004

million(46)

million(20)

At IPO
Sept. 2001

Dividend per unit

Period ended
Mar. 2002

June 2002
First Investment
Corporation
Bond Issue(First for a J-REIT)
Sept. 2001
Listed on TSE
as first J-REIT

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

Apr. 2003
Second/Third Investment
Corporation Bond Issue

Oct. 2003
Second Follow-On

Sept. 2001
IPO
Note: Total acquisition price, number of properties and occupancy rate do not include the land and building adjacent to the Ryoshin Ginza East Mirror Building.

6 Japan Real Estate Investment Corporation

Period ended
Mar. 2005¥14,983 ¥12,853 ¥14,455 ¥15,117 ¥14,602 ¥14,711 ¥15,824

Bond issues

Listing and issuanceof units

Period ended
Sept. 2002

already held. The size of the Company’s assets (total acquisition price) has grown from ¥92.8 billion at
IPO to ¥564.2 billion as of the 16th fiscal period due to the steady achievement of external growthstrategies. However, in terms of internal growth strategies, ongoing efforts are being made in suchareas as maintaining stable occupancy rates and reducing building management costs.

95.9%
98.7%

98.6%

98.2%

97.8%

96.1%

95.5%

93.3%

98.7%

Built a portfolio that is worth
over ¥560 billion
Keep stable
occupancy rate
¥518,969¥412,766¥441,276¥446,940¥542,969
million(54)

million(53)¥564,219¥564,219

million(55)

million(55)

million(50)

million(50)

Period ended
Sept. 2006

Period ended
Mar. 2007

Period ended
Sept. 2007

Period ended
Mar. 2008

Period ended
Sept. 2008

Period ended
Mar. 2009

Period ended
Sept. 2009

¥17,302¥17,521¥18,500¥29,223¥19,072¥19,020¥19,198¥418,693

million(52)

million(49)

Period ended
Sept. 2005

Period ended
Mar. 2006¥15,951¥16,172¥326,560
million(50)

Sept. 2005
Fourth Investment Corporation
Bond Issue (First J-REIT ever toissue investment corporation bonds
without a negative pledge clauseor other financial covenants)
Apr. 2005
Third Follow-On

June 2007
Fifth/Sixth Investment
Corporation Bond Issue

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

Under unprecedentedly severe operating conditions,the Company transferred the unused development rightsof the Mitsubishi UFJ Trust and Banking Building site
as part of efforts to secure profitability.
Kazuhiko Arahata
CEO & President of Japan Real Estate
Asset Management Co., Ltd.

BUSINESS PERFORMANCEFOR THE 16TH FISCAL PERIOD
Summary of Financial Results and Cash Dividend
In the 16th fiscal period (April 1, 2009 to September 30, 2009),
Japan Real Estate Investment Corporation (“the Company”)
recorded operating revenues totaling ¥21,524 million ($239
million), up 3.9% compared with previous period. On theearnings front, operating income increased 1.0% to ¥10,054
million ($111 million). After deducting expenses for interest
payments on loans and other costs, income before income taxes
edged up 0.9% to ¥8,505 million ($94 million), and net income
also edged up 0.9% to ¥8,504 million ($94 million). Taking into
account these results, the Company declared a cash dividend
totaling ¥19,198 ($212.81) per unit for the period under review.

initiatives included the upgrading of building and facility
specifications through renovation work required to maintain andimprove the functions of existing portfolio properties as well as
aggressive activities to attract new tenants.
In addition, as summarized in the table below, theCompany transferred the unused development rights of the
Mitsubishi UFJ Trust and Banking Building site as part of efforts
to secure profitability. During the period under review, we did
not undertake new property acquisitions.
As a result of these activities, our portfolio as of September
30, 2009 consisted of 55 office buildings with a total acquisition
price of ¥564,219 million ($6,255 million). Total leasable spacestood at 516,421 m2 (5,558,706 ft2), with a total of 977 tenants.
(see Note)
Note: The number of portfolio properties, the total acquisition price, the total leasable space
and the number of tenants do not include the land and building that have been acquired
for the purpose of extending the adjacent Ryoshin Ginza East Mirror Building.

Operating Environment and Performance
During the period under review, the Japanese economy continued
to face severe conditions on the back of the rapid deceleration of
the global economy. Specifically, overall performance and capital
investment in the entire private sector continued to slow down,
while the unemployment rate gradually increased. Nevertheless,as inventory adjustments were steadily advanced in all industries
and the Japanese government’s economic stimulus package began
producing positive effects, the country started to see some signsof recovery in production and personal spending, which in turnfueled expectations for a turnaround in the Japanese economy.
However, in the rental office market, vacancy rates
continued to rise nationwide, and rent levels entered a declining
phase. Against the backdrop of withdrawals from unprofitablebusinesses due to weakened performance and the acceleration of
cost-reduction initiatives, many corporate tenants decreased theirleased floor space or canceled their leasing contracts.
Meanwhile, in the real estate market, the transaction
volume trended in a lower range, attributable to the economic
slowdown and the subsequent worsening of conditions in therental office market.
Under such harsh circumstances, the Company worked
strategically to keep reinforcing its competitiveness. Specific

Outline of development right transfer
Property name
Mitsubishi UFJ Trust and Banking Building
Location
Chiyoda-ku, Tokyo
Unuseddevelopment rights of the Mitsubishi
Object of transaction
UFJ Trust and Banking Building site
Transfer price¥729,984 thousand ($8 million)

Finance Activities
In order to provide funds to repay existing short-term loans, theCompany procured ¥5,000 million ($55 million), ¥7,000 million($78 million) and ¥10,500 million ($116 million)—all in shortterm loans—on June 1, 2009, September 1, 2009 and September
24, 2009, respectively. As a result, our total interest-bearing debt
amounted to ¥220,500 million ($2,444 million) as of September
30, 2009. This amount consists of long-term loans totaling¥127,500 million ($1,413 million), which includes the current
portion totaling ¥18,000 million ($200 million), short-termloans totaling ¥48,000 million ($532 million) and investment
corporation bonds totaling ¥45,000 million ($499 million),
which includes the current portion totaling ¥10,000 million($111 million).
As of September 30, 2009, the Company’s long-term,
fixed-interest debt ratio (ratio of long-term, fixed-interest debt

Japan
Japan Real
Real Estate
Estate Investment
Investment Corporation
Corporation 9

A J-REIT leader with exceptional management capabilities and financial
soundness, the Company is committed to implementing strategic initiatives ina reliable and enthusiastic manner even in time of difficulties, thereby
maximizing unitholder value through optimal investment management.

including the current portion of long-term loans and investment
corporation bonds to interest-bearing debt) stood at 78.2%, andthe LTV ratio (ratio of interest-bearing debt to total assets) was
39.1%. As these results indicate, we have been able to maintaina sound and conservative financial standing.
The Company’s credit ratings as of September 30, 2009were as follows.
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

OUTLOOK
Trends in the Rental Office Market
Despite the ongoing deterioration in employment conditions inJapan, the Japanese economy is expected to remain on a mild
recovery course for the time being, supported by improvementsin overseas economies. Nevertheless, there are risks that could
place downward pressure on the domestic economy, including
the further worsening of employment conditions, a possible
slowdown in overseas economies and unfavorable fluctuationsin international financial markets. Due to such risks, making
forecasts still requires a conservative approach.
In the rental office market, the rise in the vacancy rate incentral Tokyo seems to have slowed—at least for the time being.
However, the downward pressure on rents attributable to theslumping performance throughout the corporate sector remains
strong. Accordingly, the outlook provides no reason for optimism.
In the real estate market, banking facilities have slightly
eased their stance toward financing for real estate investments.
This situation is boosting expectations for a gradual recovery inthe volume of real estate transactions. However, the real estatemarket may remain stagnant, possibly due to unfavorable changes
in economic trends and financial conditions and to a persistentdecline in real estate prices, which reflect weak performance in

10 Japan Real Estate Investment Corporation

the rental office market. In order to take full advantage ofopportunities for acquiring prime properties in such an adverse
environment, the Company believes that both the soundness of
its financial standing and its ability to procure funds will be more
important than ever before.

The Company’s Management Policies
In order to maintain and improve profitability under these adverse
conditions, the Company will adhere to the following
management policies. First of all, the Company will work tostrengthen its relationship of trust with existing tenants. As of
September 30, 2009, the Company had contracts with 11
property management companies. Most of these companies werealready managing their respective buildings before we acquired
them and have thus built relationships of trust with their tenants.
The Company will work to further strengthen these relationships
by anticipating tenants’ needs and providing tailored services toincrease tenant satisfaction and subsequently maintain occupancy
rates and restrain rent reduction requests.
Second, we will fill vacancies in a prompt manner. In
cooperation with the property management companies
mentioned above, we will actively seek the most appropriate
tenants for each property, based on location and features, in order
to fill current and anticipated vacancies as rapidly as possible.
Furthermore, the Company will work to uncover additional needs
for floor space among existing tenants.
Third, the Company will stabilize revenues and earnings.
To this end, we will endeavor to apply fixed- and long-term
leasing agreements with our large-scale tenants.
Fourth, we will reduce management costs. The Company
has introduced sound competitive principles for its multiple
property management companies to follow. These companies
are revamping their management systems and cost structures on
an ongoing basis.
Meanwhile, the Company has adopted the following
policies for acquiring properties. First, to access important
information quickly, we continue to enhance our property
information channels while working to develop new channels.

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

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

Second, in its acquisition activities, the Company
continues to meticulously monitor and examine economic,
physical and legal factors, including rights-related issues, whenselecting properties. In particular, with regard to the structure ofbuildings, we require buildings to meet or exceed new earthquakeresistance standards and exclusively target properties capable ofmaintaining a competitive edge in terms of the facilities they offer
over the medium to long term.
Third, in accordance with our acquisition policies, weshall maintain our portfolio so that 70% or more of the portfolio
properties are located within the Tokyo metropolitan area, withthe remaining 30% or less located in other major cities.
Under these policies, the Company will continue toacquire highly competitive properties. At the same time, in orderto further enhance the quality of its portfolio, the Company willremain open to the replacement of portfolio properties with due
consideration given to the timing.

The Company’s Financial Strategy
In principle, the Company shall maintain an LTV ratio that does
not exceed 65%. To ensure an even lower interest-bearing debt
ratio, we adopt the conservative target level of 30% to 40%.
Concerning the financing of property acquisitions, theCompany shall use, in a flexible manner, a variety of funding
schemes—including the issue of investment corporation bonds—
while maintaining a sound and conservative financial standing
and closely monitoring trends in financial markets. Whenobtaining a loan, the Company shall strictly adhere to its financial
policies. More specifically, with the aim of minimizing funding
costs, the Company shall negotiate with several qualified
institutional investors (limited to those defined under the Special
Taxation Measures Law of Japan) before executing a loan
agreement.

million ($113 million), income before income taxes totaling¥8,470 million ($94 million) and net income totaling ¥8,470
million ($94 million). The Company plans to declare a cash
dividend totaling ¥17,320 ($192.00) per unit.
For the 18th fiscal period (April 1, 2010 to September
30, 2010), the Company forecasts operating revenues totaling¥21,320 million ($236 million), operating income totaling¥9,810 million ($109 million), income before income taxes
totaling ¥7,940 million ($88 million) and net income totaling¥7,940 million ($88 million). The Company plans to declare acash dividend totaling ¥16,240 ($180.02) per unit.
Although continuing to show a recovery trend, theJapanese economy—lacking a certain level of autonomy—is still
experiencing severe conditions, including a high unemployment
rate. Accordingly, the prospects for the J-REIT market are
expected to remain unpredictable for the time being.
In such an environment, the Company—a J-REIT leader
with exceptional management capabilities and financial
soundness—is committed to implementing the aforementioned
initiatives in a reliable and enthusiastic manner to maximize
unitholder value through optimal investment management.
We thank you and ask you, all of our unitholders, for yourunwavering support and understanding as we endeavor to remain
a winner in the J-REIT market.

Taketo Yamazaki
Executive Director of Japan Real Estate Investment Corporation

Performance Forecasts for the 17th and 18th Periods
For the 17th fiscal period (October 1, 2009 to March 31, 2010),
the Company forecasts operating revenues totaling ¥21,640
million ($240 million), operating income totaling ¥10,210

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

Japan
Japan Real
Real Estate
Estate Investment
Investment Corporation
Corporation 11

The Portfolio of Japan Real Estate Investment Corporation
As of September 30, 2009

Properties Roster
Location

Type ofspecified asset

Acquisition
dateTokyo 23 wards● I- 1Genki Medical Plaza● I- 2
Kitanomaru Square● I- 3
MD Kanda Building● I- 4
Kandabashi Park Building● I- 5
Nibancho Garden● I- 6
Mitsubishi UFJ Trust and Banking Building● I- 7
Burex Kojimachi Building● I- 8
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

Real property
Real property
Real property
Real property
Real property
Real property
Real property
Real property

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● I- 29

Yurakucho, Chiyoda-ku
Nihonbashi-Kodenmacho, Chuo-ku
Kyobashi, Chuo-ku
Ginza, Chuo-ku
Ginza, Chuo-ku
Harumi, Chuo-ku
Kita-Aoyama, Minato-ku
Kaigan, 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

Real property
Trust
Real property
Real property
Real property
Real property
Real property
Trust
Trust
Trust
Real property
Real property
Trust
Real property
Trust
Real property
Real property
Real property
Real property
Real property
Real property

Harmony Tower
Otsuka Higashi-Ikebukuro Building
Ikebukuro 2Chome Building
Ikebukuro YS Building
Tokyo metropolitan area excluding 23 wards● II- 1
Hachioji First Square

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

Real property
Trust
Trust
Real property

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
12/19/2008
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
26,8007,680
21,250
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

Hachioji, Tokyo

Real property

II- 2

Saitama, Saitama Prefecture

Real property

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
09/01/2008
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
14,5331,865
2,650
24,000
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
564,219

Number●Name of building

Yurakucho Denki Building
Kodenmacho Shin-Nihonbashi Building
Burex Kyobashi Building
Ginza Sanwa Building
Ryoshin Ginza East Mirror Building
Harumi Center Building
Aoyama Crystal Building
Shiodome 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

I- 30● I- 31● I- 32● I- 33●●

Saitama Urawa Building

II- 3
II- 4
● II- 5

MM Park Building
Kawasaki Isago Building
Musashi Kosugi STM Building
Other major cities● III- 1
8.3 Square Kita Building● III- 2
Jozenji Park Building● III- 3
Sendai Honcho Honma Building

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

Real property
Trust
Real property

Sapporo, Hokkaido
Sendai, Miyagi Prefecture
Sendai, Miyagi Prefecture

Real property
Real property
Trust

●

III- 4

Kanazawa Park Building

Kanazawa, Ishikawa Prefecture

Real property●

III- 5

Nishiki Park Building

Nagoya, Aichi Prefecture

Real property

III- 6● III- 7● III- 8● III- 9● III- 10● III- 11

Hirokoji Sakae Building
Nagoya Hirokoji Building
Nagoya Misono Building
Kyoto Shijo Kawaramachi Building
Shin-Fujita Building
Sakaisujihonmachi Building

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

Real property
Real property
Real property
Real property
Trust
Real property

III- 12

Midosuji Daiwa Building

Osaka, Osaka Prefecture

Trust

●

III- 13● III- 14

Lit City Building
NHK Hiroshima Broadcasting Center Building

Okayama, Okayama Prefecture
Hiroshima, Hiroshima Prefecture

Real property
Real property

III- 15● III- 16● III- 17

Tosei Tenjin Building
Tenjin Crystal Building
Hinode Tenjin Building
Total

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

Real property
Real property
Trust

●
●

●

●

●

Note : The land and building adjacent to the Ryoshin Ginza East Mirror Building (acquisition price: ¥1,800 million) are not included in the above list.

12 Japan Real Estate Investment Corporation

Acquisition price(¥ mil)(0.9%)(14.5%)(1.7%)(0.9%)(2.6%)(7.9%)(1.2%)(3.7%)(1.3%)(0.6%)(0.9%)(3.0%)(0.9%)(4.7%)(1.4%)(3.8%)(0.9%)(0.5%)(1.4%)(1.7%)(0.5%)(1.0%)(0.9%)(1.2%)(1.5%)(0.9%)(2.2%)(6.1%)(0.7%)(1.5%)(0.6%)(0.3%)(0.8%)(1.0%)(0.5%)(6.6%)(0.6%)(0.7%)(1.3%)(0.2%)(0.6%)(0.8%)(0.9%)(0.3%)(2.6%)(0.3%)(0.5%)(4.3%)(0.7%)(2.5%)(0.8%)(0.5%)(0.3%)(0.9%)(0.6%)(100.0%)Percentage ofownership of thebuilding

Completion

Appraisal value atthe end of
period (¥ mil)

100.0%
100.0%
100.0%
56.76%
31.345%19.38402%
100.0%
99.0%

1985
2006
1998
1993
2004
2003
2005
1966

6,050
78,1009,620
5,950
16,30047,3006,570
29,1004,791m2
25,678m2
6,269m2
3,687m2
9,316m2
11,922m2
4,495m2
20,865m2(51,577ft2)(276,402ft2)(67,480ft2)(39,695ft2)(100,282ft2)(128,332ft2)(48,384ft2)(224,594ft2)

4,791m2
25,678m2
5,735m2
3,224m2
9,316m2
11,922m2
4,495m2
20,450m2

10.78%
100.0%
100.0%
70.95%
100.0%
100.0%
100.0%
10.0%
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
2007
1984
1992
1989
1996
1991
2004
1989
1974
2003
1987
1998
1976
1994

8,470
3,780
6,630
16,0004,610
22,6008,790
19,900
6,890
3,410
8,290
10,400
2,370
6,690
5,750
8,230
11,9006,340
12,70043,7003,640

4,694m2
3,897m2
4,279m2
4,329m2
2,875m2
20,812m2
4,898m2
8,037m2
9,631m2
4,062m2
6,197m2
9,246m2
4,067m2
5,205m2
7,708m2
7,356m2
7,745m2
3,147m2
5,558m2
29,754m2
2,462m2(50,531ft2)(41,950ft2)(46,068ft2)(46,604ft2)(30,949ft2)(224,022ft2)(52,724ft2)(86,520ft2)(103,671ft2)(43,726ft2)(66,708ft2)(99,529ft2)(43,783ft2)(56,035ft2)(82,972ft2)(79,180ft2)(83,373ft2)(33,876ft2)(59,832ft2)(320,273ft2)(26,511ft2)

29.253305%
100.0%
100.0%
100.0%

1997
1987
1990
1989

11,800
3,820
1,600
4,590

10,929m2
7,172m2
2,186m2
5,797m2

80.4%

1996

5,670

100.0%

1990

100.0%
100.0%
34.32%

Occupancy
rate

Numberof tenants(51,577ft2)(276,402ft2)(61,734ft2)(34,705ft2)(100,282ft2)(128,332ft2)(48,384ft2)(220,131ft2)

100.0%
100.0%
91.5%
87.4%
100.0%
100.0%
100.0%
98.0%

1
5
6
6
1
10
1
42

223
1,829
206
196
485
984
162
1,075

(1.1%)(8.8%)(1.0%)(0.9%)(2.3%)(4.7%)(0.8%)(5.2%)

4,095m2
3,897m2
4,279m2
4,329m2
2,875m2
20,425m2
4,898m2
8,012m2
9,129m2
3,715m2
6,197m2
8,376m2
4,067m2
5,205m2
7,519m2
6,952m2
7,745m2
3,147m2
4,592m2
26,866m2
1,836m2(44,081ft2)(41,950ft2)(46,068ft2)(46,604ft2)(30,949ft2)(219,858ft2)(52,724ft2)(86,243ft2)(98,265ft2)(39,992ft2)(66,708ft2)(90,168ft2)(43,783ft2)(56,035ft2)(80,934ft2)(74,834ft2)(83,373ft2)(33,876ft2)(49,436ft2)(289,186ft2)(19,773ft2)

87.2%
100.0%
100.0%
100.0%
100.0%
98.1%
100.0%
99.7%
94.8%
91.5%
100.0%
90.6%
100.0%
100.0%
97.5%
94.5%
100.0%
100.0%
82.6%
90.3%
74.6%

13
10
1
11
8
7
7
29
18
7
10
98
1
4
18
20
7
5
6
57
2

309
160
150
389
145
769
268
593
343
140
287
499
117
221
263
323
415
203
384
1,438
111

(1.5%)(0.8%)(0.7%)(1.9%)(0.7%)(3.7%)(1.3%)(2.9%)(1.7%)(0.7%)(1.4%)(2.4%)(0.6%)(1.1%)(1.3%)(1.6%)(2.0%)(1.0%)(1.8%)(6.9%)(0.5%)(117,646ft2)(77,204ft2)(23,532ft2)(62,401ft2)

9,598m2
7,172m2
2,186m2
5,797m2(103,320ft2)(77,204ft2)(23,532ft2)(62,401ft2)

87.8%
100.0%
100.0%
100.0%

17
7
9
8

441
182
72
203

(2.1%)(0.9%)(0.3%)(1.0%)

10,068m2(108,378ft2)

9,412m2(101,314ft2)

93.5%

40

259

(1.2%)

2,320

4,510m2(48,550ft2)

3,993m2(42,985ft2)

88.5%

12

128

(0.6%)

2007
1990
1990

37,0003,100
3,680

38,584m2
6,831m2
5,394m2(415,315ft2)(73,537ft2)(58,071ft2)

36,612m2
6,448m2
5,303m2(394,098ft2)(69,411ft2)(57,082ft2)

94.9%
94.4%
98.3%

26
12
23

1,371
168
162

(6.6%)(0.8%)(0.8%)

100.0%
50.0%
100.0%

2006
1993
1991

1,080
59,5403,420

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

12,265m2
2,518m2
5,474m2(132,030ft2)(27,106ft2)(58,928ft2)

100.0%
100.0%
87.7%

8
18
18

334
69
161

(1.6%)(0.3%)(0.8%)

89.0%

1991

5,760

20,918m2(225,161ft2)

16,946m2(182,415ft2)

81.0%

68

486

(2.3%)

57.04651%

1995

4,520

8,059m2(86,747ft2)

7,828m2(84,262ft2)

97.1%

50

283

(1.4%)

100.0%
100.0%
100.0%
100.0%
100.0%
100.0%

1987
1987
1991
1982
1995
1992

1,610
14,6001,320
2,010
20,1004,390

3,911m2
21,624m2
3,470m2
6,798m2
28,414m2
11,574m2(42,103ft2)(232,763ft2)(37,354ft2)(73,180ft2)(305,852ft2)(124,587ft2)

3,338m2
20,895m2
3,116m2
4,613m2
22,952m2
11,350m2(35,941ft2)(224,920ft2)(33,542ft2)(49,655ft2)(247,063ft2)(122,176ft2)

85.4%
96.6%
89.8%
67.9%
80.8%
98.1%

13
26
9
25
37
16

104
734
81
118
808
277

(0.5%)(3.5%)(0.4%)(0.6%)(3.9%)(1.3%)

100.0%

1991

16,30020,450m2(220,127ft2)

17,446m2(187,788ft2)

85.3%

25

656

(3.2%)

27.7488%
48.753%

2005
1994

5,160
3,050

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

9,118m2
9,860m2(98,146ft2)(106,134ft2)

91.5%
100.0%

37
12

281
269

(1.4%)(1.3%)

100.0%
100.0%
74.4844%

1992
1993
1987

1,320
3,210
3,720
591,920

4,000m2(43,057ft2)
3,998m2(43,035ft2)
5,852m2(62,995ft2)
2
481,882m (5,186,930ft2)

100.0%
66.4%
100.0%
93.3%

20
21
9
977

91
163
181
20,795(0.4%)(0.8%)(0.9%)(100.0%)

Leasable space

4,000m2(43,057ft2)(64,839ft2)
6,023m2
5,852m2(62,995ft2)
2
516,421m (5,558,706ft2)

Leased space

Revenues from leasing
operations (¥ mil)Japan Real Estate Investment Corporation 13

Major Tenants Roster
Rank

Name of tenant

Name of building

Leased space% of totalleased space

1
2
3
4
5
6
7
8
9
10

Banyu Pharmaceutical Co., Ltd.
Mitsubishi UFJ Trust and Banking Corporation
Seven & i Holdings Co., Ltd.
Space Design, Inc.
FAST RETAILING CO., LTD. (Note 1)
JSOL Corporation(Note 2)
TOTO LTD.
JGC Corporation
Accenture Japan Ltd.

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

17,014m2 (183,144ft2)
10,665m2 (114,802ft2)
9,316m2 (100,282ft2)
8,774m2 (94,453ft2)
8,476m2 (91,245ft2)
7,634m2 (82,178ft2)
6,936m2 (74,665ft2)
6,906m2 (74,341ft2)
5,560m2 (59,853ft2)
5,470m2 (58,881ft2)

3.5%
2.2%
1.9%
1.8%
1.8%
1.6%
1.4%
1.4%
1.2%
1.1%

Notes: 1. The lease agreement with FAST RETAILING CO., LTD. is scheduled to terminate as of March 31, 2010.
2. Not disclosed as per tenant request

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

III-1 to III-17: Other major cities

III-1

II-2
II-1
III-2

III-3

II-5
II-3

III-4

II-4

III-7III-5
III-10
III-6
III-13 III-11
III-8
III-12 III-9
III-15 III-14
III-17 III-16

I-1 to I-33: Tokyo
23 wards

I-32
I-33 I-31
I-30

I-2

I-1

I-3
I-19
I-4
I-24
I-10
I-7
I-20
I-6
I-11
I-25 I-26
I-8
I-12
I-9
I-27
I-13
I-28
I-15
I-17 I-16 I-14
I-29
I-18
I-21
I-5

I-22

I-23

Tokyo Station

14 Japan Real Estate Investment Corporation

Over view of Portfolio Properties As of September 30, 2009
Note: Concerning real estate or trust beneficiary rights in trust of real estate of which the Company is a partial owner through co-ownership or compartmentalized building units or
quasi-co-ownership, 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 :Location :Site area :Floor area of building :Structure :Completion :Location :Site area :Floor area of building :Structure :Completion :Chiyoda-ku, Tokyo
5,821.03m2 (62,657ft2)
57,279.20m2 (616,548ft2)
Above ground: 26 floors
Below ground: 2 floors
January 2006

Chiyoda-ku, Tokyo
1,218.56m2 (13,116ft2)
9,370.25m2 (100,860ft2)
Above ground: 10 floors
Below ground: 1 floor
July 1993

Nibancho Garden

Mitsubishi UFJ Trust andBanking Building

● I-5

● I-6

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

Location :Site area :Floor area of building :Structure :Completion :Chiyoda-ku, Tokyo
8,100.39m2 (87,192ft2)
108,171.67m2 (1,164,349ft2)
Above ground: 29 floors
Below ground: 4 floors
February 2003

Burex Kojimachi
Building

Sanno Grand Building

● I-7

● I-8

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

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

Burex Kyobashi
Building

Ginza Sanwa Building● I-11● I-12Chuo-ku, Tokyo
756.03m2 (8,138ft2)
5,470.54m2 (58,884ft2)
Above ground: 8 floors
Below ground: 1 floor
February 2002

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

Ryoshin Ginza East
Mirror Building

Harumi Center Building● I-13● I-14Chuo-ku, Tokyo
615.25m2 (6,622ft2)
4,104.71m2 (44,183ft2)
Above ground: 8 floors
Below ground: 1 floor
October 1998

Location :Site area :Floor area of building :Structure :Completion :Chuo-ku, Tokyo
4,664.63m2 (50,210ft2)
26,447.27m2 (284,676ft2)
Above ground: 10 floors
November 2006

Aoyama Crystal
Building

Shiodome Building● I-15● I-16

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

Location :Site area :Floor area of building :Structure :Completion :Minato-ku, Tokyo
Approx. 12,046m2 (129,662ft2)
115,930.83m2 (1,247,868ft2)
Above ground: 24 floors
Below ground: 2 floors
December 2007

Location :Site area :Floor area of building :Structure :Completion :Location :Site area :Floor area of building :Structure :Completion :Location :Site area :Floor area of building :Structure :Completion :Location :Site area :Floor area of building :Structure :Completion :Shiba 2Chome
Daimon Building

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

Shinwa Building

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

Takanawadai Building

Higashi-Gotanda
1Chome Building● I-21● I-22

Shinagawa-ku, Tokyo
1,416.17m2 (15,244ft2)
5,762.70m2 (62,029ft2)
Above ground: 13 floors
January 1991

Location :Site area :Floor area of building :Structure :Completion :Shinagawa-ku, Tokyo
1,539.95m2 (16,576ft2)
6,460.39m2 (69,539ft2)
Above ground: 8 floors
July 2004

Omori-Eki Higashiguchi
Building

Nippon Brunswick
Building● I-23● I-24

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

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

Japan Real Estate Investment Corporation 17

Location :Site area :Floor area of building :Structure :Completion :Location :Site area :Floor area of building :Structure :Completion :Location :Site area :Floor area of building :Structure :Completion :Location :Site area :Floor area of building :Structure :Completion :Yoyogi 1Chome
Buildingda Vinci Harajuku● I-25● I-26

Shibuya-ku, Tokyo
1,755.75m2 (18,899ft2)
10,778.10m2 (116,014ft2)
Above ground: 14 floors
Below ground: 1 floor
October 2003

Location :Site area :Floor area of building :Structure :Completion :Shibuya-ku, Tokyo
839.66m2 (9,038ft2)
4,359.20m2 (46,922ft2)
Above ground: 7 floors
Below ground: 2 floors
December 1987

Jingumae Media
Square Building

Shibuya Cross Tower● I-27● I-28

Shibuya-ku, Tokyo
2,261.68m2 (24,344ft2)
9,420.42m2 (101,400ft2)
Above ground: 9 floors
Below ground: 2 floors
March 1998

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

Ebisu Neonato

Harmony Tower● I-29● I-30

Shibuya-ku, Tokyo
5,005.70m2 (53,881ft2)
36,598.38m2 (393,941ft2)
Above ground: 18 floors
Below ground: 2 floors
October 1994

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

Otsuka HigashiIkebukuro Building

Ikebukuro 2Chome
Building● I-31● I-32

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

18 Japan Real Estate Investment Corporation

Location :Site area :Floor area of building :Structure :Completion :Toshima-ku, Tokyo
397.26m2 (4,276ft2)
3,157.51m2 (33,987ft2)
Above ground: 9 floors
Below ground: 1 floor
May 1990

Location :Site area :Floor area of building :Structure :Completion :Location :Site area :Floor area of building :Structure :Completion :Ikebukuro YS
Building

Hachioji First
Square● I-33● II-1

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 :Saitama Urawa
Building

MM Park Building● II-2● II-3

Saitama, Saitama Prefecture
1,533.06m2 (16,502ft2)
6,258.59m2 (67,367ft2)
Above ground: 8 floors
March 1990

Location :Site area :Floor area of building :Structure :Completion :Location :Site area :Floor area of building :Structure :Completion :Location :Site area :Floor area of building :Structure :Completion :Hachioji, Tokyo
2,989.33m2 (32,177ft2)
18,329.98m2 (197,302ft2)
Above ground: 12 floors
Below ground: 1 floor
July 1996

Yokohama, Kanagawa Prefecture
6,825.77m2 (73,472ft2)
49,037.51m2 (527,835ft2)
Above ground: 15 floors
Below ground: 1 floor
December 2007

Kawasaki Isago
Building

Musashi Kosugi
STM Building● II-4● II-5

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

Location :Site area :Floor area of building :Structure :Completion :Kawasaki, Kanagawa Prefecture
3,552.15m2 (38,235ft2)
22,839.61m2 (245,843ft2)
Above ground: 8 floors
Below ground: 2 floors
October 1990

8 . 3 Square Kita
Building

Jozenji Park Building● III-1● III-2

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

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

Japan Real Estate Investment Corporation 19

Location :Site area :Floor area of building :Structure :Completion :Sendai Honcho
Honma Building

Kanazawa Park
Building● III-3● III-4

Sendai, Miyagi Prefecture
1,437.47m2 (15,473ft2)
8,247.50m2 (88,775ft2)
Above ground: 11 floors
November 1991

Location :Site area :Floor area of building :Structure :Completion :Location :Site area :Floor area of building :Structure :Completion :Location :Site area :Floor area of building :Structure :Completion :Location :Site area :Floor area of building :Structure :Completion :Kanazawa, Ishikawa Prefecture
6,642.71m2 (71,501ft2)
43,481.20m2 (468,027ft2)
Above ground: 12 floors
Below ground: 2 floors
October 1991

Nishiki Park Building

Hirokoji Sakae
Building● III-5● III-6

Nagoya, Aichi Prefecture
2,170.45m2 (23,363ft2)
25,091.91m2 (270,087ft2)
Above ground: 22 floors
Below ground: 4 floors
August 1995

Location :Site area :Floor area of building :Structure :Completion :Nagoya, Aichi Prefecture
786.79m2 (8,469ft2)
6,445.08m2 (69,374ft2)
Above ground: 9 floors
Below ground: 2 floors
September 1987

Nagoya Hirokoji
Building

Nagoya Misono
Building● III-7● III-8

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

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

Kyoto Shijo
Kawaramachi Building

Shin-Fujita Building● III-9● III-10

Kyoto, Kyoto Prefecture
1,471.57m2 (15,840ft2)
9,701.04m2 (104,421ft2)
Above ground: 9 floors
Below ground: 1 floor
November 1982

20 Japan Real Estate Investment Corporation

Location :Site area :Floor area of building :Structure :Completion :Osaka, Osaka Prefecture
6,159.61m2 (66,301ft2)
45,411.31m2 (488,803ft2)
Above ground: 21 floors
Below ground: 2 floors
April 1995

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

Midosuji Daiwa
Building● III-11● III-12

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

Location :Site area :Floor area of building :Structure :Completion :NHK Hiroshima
Broadcasting Center
Building

Lit City Building● III-13

Location :Site area :Floor area of building :Structure :Completion :Location :Site area :Floor area of building :Structure :Completion :Okayama, Okayama Prefecture
7,596.44m2 (81,767ft2)
52,653.19m2 (566,754ft2)
Above ground: 20 floors
Below ground: 2 floors
June 2005

Osaka, Osaka Prefecture
3,044.65m2 (32,772ft2)
31,213.27m2 (335,977ft2)
Above ground: 15 floors
Below ground: 2 floors
September 1991

● III-14

Location :Site area :Floor area of building :Structure :Completion :Hiroshima, Hiroshima Prefecture
3,296.46m2 (35,483ft2)
35,217.28m2 (379,075ft2)
Above ground: 23 floors
Below ground: 2 floors
August 1994

Tosei Tenjin Building

Tenjin Crystal
Building● III-15● III-16

Fukuoka, Fukuoka Prefecture
1,221.31m2 (13,146ft2)
5,588.57m2 (60,155ft2)
Above ground: 8 floors
March 1992

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-17

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.37

Selected Financial Data
Thousands of U.S. dollars

Millions of yen
For the period from

For the period from

(Note 1)For the period from

For the period from

For the period from

For the period from

April 1, 2009 to

October 1, 2008 to

April 1, 2008 to

October 1, 2007 to

April 1, 2007 to

April 1, 2009 to

September 30, 2009

March 31, 2009

September 30, 2008

March 31, 2008

September 30, 2007

September 30, 2009

¥ 21,524¥ 20,716¥ 19,805¥ 25,743¥ 17,530$5,238,603

Operating Expenses

11,46910,761

9,998

11,524

8,791

127,142

Operating Income

10,054

9,955

9,807

14,2188,739

111,461

Income before Income Taxes

8,505

8,426

8,449

12,946

7,586

94,287Net Income

8,504

8,425

8,448

12,945

7,585

94,276

Operating Revenues

Total Assets

564,528565,022542,920

527,537

449,643

6,257,941

Interest-Bearing Debts

220,500

220,500

199,500

177,500

144,500

2,444,297

Net Assets

306,106

306,027

306,050

310,547

272,269

3,393,262

Unitholders’ Capital

297,601

297,601

297,601

297,601

264,683

3,298,985

Number of Units

443,000

443,000

443,000

443,000

410,000

443,000

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

690,984

690,806

690,858

701,009664,071

7,660

Cash Distribution

8,504

8,425

8,448

12,945

7,585

94,277

Dividend Payout Ratio

100.0%

99.9%

100.0%

100.0%

99.9%

100.0%

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

19,19819,02019,072

29,22318,500212.81Net Operating Income (NOI)

13,95014,575

14,173

12,197

12,073

154,647

Funds from Operations (FFO)

11,577

12,213

12,0098,078

10,022

128,338

Return on Assets (ROA) (Note 2)

1.5%(3.0% annualized)

Return on Equity (ROE) (Note 3)

2.8㧑
(5.5% annualized)

EOP Equity Ratio (Note 4)

54.2%

1.5%
(3.1% annualized)

2.8㧑
(5.5% annualized)

54.2%

1.6%
(3.1% annualized)

2.7㧑
(5.5% annualized)

56.4%

2.6%
(5.3% annualized)

4.7㧑
(9.3% annualized)

58.9%

1.7%
(3.4% annualized)

2.8%(5.6% annualized)

60.6%

1.5%
(3.0% annualized)

2.8%(5.5% annualized)

54.2%

EOP Interest-Bearing Debt Ratio
39.1%

39.0%

36.7%

33.6%

32.1%

39.1%

FFO Multiple

on Total Assets (Note 5)

14.1 times

13.7 times

15.5 times

31.9 times

28.3 times

14.1 times

Debt Service Coverage Ratio (Note 6)

9.0 times

8.9 times

9.7 times

14.2 times

10.4 times

9.0 times

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 ¥90.21 = US$1.00, the foreign exchange rate on September 30,
2009, 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 183 days for the period ended September 30, 2007, 183 days for theperiod ended March 31, 2008, 183 days for the period ended September 30, 2008, 182 days for the period ended March 31, 2009 and 183 days for the period ended
September 30, 2009.)
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 September 30, 2009 and March 31, 2009

Thousands of yen

U.S. dollars (Note 1)

As of
September 30, 2009

As ofMarch 31, 2009

As of
September 30, 2009

¥ 21,420,595)¥ 18,349,167)$ 237,452,561)

181,137)

232,709)

2,007,952)

ASSETS
Current Assets:
Cash and bank deposits
Rental receivables
Refundable income taxes

3,705)

7,795)

41,072)

109,247)

111,784)

1,211,038)

21,714,685)

18,701,455)

240,712,623)

Land369,693,850)

369,634,614)

4,098,147,112)

Other current assets
Total current assets

Property and Equipment, at Cost:

Buildings and structures

200,774,443)

199,798,790)

2,225,634,001)

Machinery and equipment

2,835,882)

2,853,700)

31,436,452)

Tools, furniture and fixtures

103,472)

96,895)

1,147,018)

Construction in progress

511,316)

1,461,051)

5,668,071)

Subtotal

573,918,965)

573,845,052)

6,362,032,654) )Accumulated depreciation(34,747,806)(31,180,654)(385,187,964))

Total property and equipment

539,171,159)

542,664,398)

5,976,844,690)

Investments and Other Assets:
Investment securities

2,797

2,797

31,012)

Deposits

21,902

21,902

242,790)

Long-term prepaid expenses

17,091

19,505

189,469)2,691,724

2,691,724

29,838,431)

828,095

828,095

9,179,640)

Leasehold rights
Easement
Deferred investment corporation bond issuance costs
Total Assets
The accompanying notes form an integral part of these financial statements.

24 Japan Real Estate Investment Corporation

81,402

92,290902,369)¥564,528,859¥565,022,169$6,257,941,025

Thousands of yen

U.S. dollars (Note 1)

As of
September 30, 2009

As ofMarch 31, 2009

As of
September 30, 2009¥¥

LIABILITIESCurrent Liabilities:
680,632$ , 7,830,963

Other payables

Trade accounts payable

754,253755,420

8,361,084

Short-term loans

48,000,000

48,000,000

532,091,786

Current portion of long-term loans

18,000,000

12,000,000

199,534,420

Current portion of investment corporation bonds

10,000,000̆110,852,455

730,669

733,264

8,099,646

45

50

503

Accrued consumption taxes

343,337

424,264

3,805,978Rent received in advance

2,261,891

2,350,341

25,073,626

4,955

21,76354,93880,801,584

64,965,738

895,705,400

Investment corporation bonds

35,000,000

45,000,000

387,983,594

Long-term loans

109,500,000

115,500,000

1,213,834,386

Accrued expenses
Accrued income taxes

Other current liabilities
Total current liabilities

706,431

Long-Term Liabilities:

33,121,070

33,529,044

367,155,194

Total long-term liabilities

Deposits received from tenants

177,621,070

194,029,044

1,968,973,174

Total Liabilities

258,422,654

258,994,782

2,864,678,574

297,601,460

297,601,460

3,298,985,257

8,504,745

8,425,927

94,277,195

NET ASSETS
Unitholders’ capital
Authorized:
Issued:2,000,000 units
443,000 units as of September 30, 2009 and
443,000 units as of March 31, 2009

Retained earnings
Total net assets

306,106,205

306,027,387

3,393,262,451

Total Liabilities and Net Assets¥564,528,859¥565,022,169$6,257,941,025

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 September 30, 2009 and March 31, 2009
Thousands of yen

U.S. dollars (Note 1)

For the period

For the period

For the period

from April 1, 2009
to September 30, 2009

from October 1, 2008
to March 31, 2009

from April 1, 2009
to September 30, 2009

Operating Revenues and Expenses
Operating Revenues:
Rental revenues
Non-rental revenues
Gain on transfer of development rights of floor area

¥20,682,990)
112,800)
728,572)¥20,609,470)
107,266)̆

$229,276,033)
1,250,416)
8,076,400)

Total operating revenues

21,524,362)

20,716,737)

238,602,849)

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

10,646,300)
540,800)
174,534)
107,809)9,929,685)
537,912)
179,765)
113,888)

118,016,860)
5,994,906)
1,934,760)
1,195,097)

Total operating expenses

11,469,445)

10,761,252)

127,141,623)

Operating income

10,054,917)

9,955,484)

111,461,226)

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
Other non-operating expenses

24,514)
252)

39,861)
72)

271,747)
2,804)

1,139,585)
402,286)
10,887)
21,273)

1,132,259)
405,205)
10,828)20,228)

12,632,581)
4,459,444)
120,691)
235,823)

Income before Income Taxes

8,505,651)

8,426,897)

94,287,236)

971)
2)

1,014)(2)

10,764)24)
94,276,449)

Income Taxes:
Current
Deferred

8,504,678)

8,425,884)

Retained Earnings Brought Forward

Net Income

67)

42)

746)

Retained Earnings at End of Period¥ 8,504,745)¥ 8,425,927)$ 94,277,195)

Units

Unitholders’ capital

Retained earnings

Total

443,000¥297,601,460¥8,448,938)¥306,050,398)

Cash dividends paid̆

̆(8,448,896)(8,448,896)

Net incomĕ̆

8,425,884)

8,425,884)

443,000¥297,601,460¥8,425,927)¥306,027,387)

Cash dividends paid̆

̆(8,425,860)(8,425,860)

Net incomĕ̆

8,504,678)

8,504,678)

443,000¥297,601,460¥8,504,745)¥306,106,205)

Units

Unitholders’ capital

Retained earnings

Total

443,000$3,298,985,257$93,403,473)$3,392,388,730)

Cash dividends paid̆

̆(93,402,727)(93,402,727)

Net incomĕ̆

94,276,449)

94,276,449)

443,000$3,298,985,257$94,277,195)$3,393,262,451)

Statements of Changes in Unitholders’ Equity
For the six months ended September 30, 2009 and March 31, 2009
Thousands of yen

Balance as of September 30, 2008

Balance as of March 31, 2009

Balance as of September 30, 2009

U.S. dollars (Note 1)

Balance as of March 31, 2009

Balance as of September 30, 2009
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 September 30, 2009 and March 31, 2009

Thousands of yen

U.S. dollars (Note 1)

For the period
from April 1, 2009

For the period
from October 1, 2008

For the period
from April 1, 2009

to September 30, 2009

to March 31, 2009

to September 30, 2009

Income before income taxes¥ 8,505,651)¥ 8,426,897)$ 94,287,236)

Depreciation and amortization

3,801,232)

3,788,102)

42,137,593)

Amortization of investment corporation bond issuance costs

10,887)

10,828)120,691)

Interest income(24,514)(39,861)(271,747)

Cash Flows from Operating Activities

Interest expense

1,541,871)

1,537,464)

17,092,025)

Rental receivables

51,571)(24,637)

571,685)

Refundable income taxes

4,090)(1,694)45,339)Prepaid expenses

4,133)(9,680)45,826)(94,515)

303,541)(1,047,724)

Trade accounts payable
Other payables(6,511)

4,191)(72,176)

Accrued expenses(80,790)316,999)(895,584)(980,490)

Rent received in advance(88,450)

90,161)Long-term prepaid expenses

2,413)(858)

26,756)

Other

30,378)(26,202)336,754)

Sub-total

13,657,449)

14,375,251)

151,396,184)

Interest received

23,154)44,302)

256,678)(1,544,603)(1,532,284)(17,122,310)

Interest paid
Income taxes paid
Net cash provided by operating activities(976)(1,008)(10,824)

12,135,024)

12,886,260)

134,519,728)

Cash Flows from Investing Activities
Payments of time deposits(11,861,229)(6,643,000)(131,484,646)

Proceeds from time deposits

5,361,229)

13,643,000)

59,430,550)

Purchases of property and equipment(235,106)(22,722,001)(2,606,209)̆)̆)(1,288,351)(426)
2,100)(1,637,561)

̆)̆)(14,281,690)

Payments for lease and guarantee deposits
Proceeds from collection of lease and guarantee deposits
Repayment of lease and guarantee deposits received
Proceeds from lease and guarantee deposits received

880,377)

2,199,764)

9,759,198)(7,143,080)(15,158,125)(79,182,798)

Proceeds from short-term loans

22,500,000)

27,500,000)

249,418,025)

Repayment of short-term loans(22,500,000)(7,500,000)(249,418,025)

Net cash used in investing activities

Cash Flows from Financing Activities

Proceeds from long-term loans

̆)

8,000,000)

̆)

Repayments of long-term loans̆)(7,000,000)

   ̆)(8,420,515)(8,448,896)(93,343,487)(8,420,515)

12,551,104)(93,343,487)

Net (Decrease) Increase in Cash and Cash Equivalents(3,428,571)

10,279,238)(38,006,558)

Cash and Cash Equivalents at Beginning of Period

18,349,167)

8,069,928)

203,405,023)

Cash and Cash Equivalents at End of Period¥14,920,595)¥18,349,167)$165,398,465)

Dividends to unitholders
Net cash (used in) provided by financing activities

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

Japan Real Estate Investment Corporation

27

Notes to Financial Statements
September 30, 2009 and March 31, 2009

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 63% by Mitsubishi Estate Co., Ltd. (“MEC”), 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, Tokio Marine & Nichido Fire Insurance Co.,
Ltd. (“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 September 30, 2009, the Company had total unitholders’ capital of ¥297,601 million ($3,298,985 thousand) with
443,000 outstanding units.
On February 5, 2009, J-Rea approved the transfer of all 77,142 shares (which represents 27.0% of outstanding shares) of J-Rea stocks held by TMN to
MEC.
On March 27, 2009, the transfer of the stocks was completed and MEC’s ownership in J-Rea increased from 36.0% to 63.0%, which made J-Rea aconsolidated subsidiary of MEC. Consequently, MEC became as a “related party” of J-Rea, for the purpose of the Law Concerning Investment Trusts andInvestment Corporations of Japan. To deal with possible conflict of interest, J-Rea established a compliance committee on March 27, 2009 to provide
enhanced compliance measures including the prevention of such conflicts of benefits.
At September 30, 2009, the Company owned a portfolio of 55 office properties concerning an aggregate of approximately 516,421 square meters ofleasable 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 ¥90.21=US$1.00, the foreign exchange rate on
September 30, 2009, 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.

28 Japan Real Estate Investment Corporation

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

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.
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.

Japan Real Estate Investment Corporation29

3. INVESTMENT SECURITIESInvestment securities recorded at cost at September 30, 2009 and March 31, 2009 are summarized as follows:
U.S. dollars

Thousands of yen
As ofSeptember 30, 2009

As ofMarch 31, 2009

As of
September 30, 2009

Other securities
Non-listed stock¥2,797¥2,797$31,012

4. PROPERTY AND EQUIPMENT
Property and equipment at September 30, 2009 and March 31, 2009 consisted of the following:Thousands of yen
As of September 30, 2009

U.S. dollars
As of March 31, 2009

As of September 30, 2009

Acquisition Costs

Book Value

Acquisition Costs

Book Value

Acquisition Costs

Book ValueLand¥309,360,192)¥309,360,192¥309,300,955)¥309,300,955$3,429,333,692)$3,429,333,692

Buildings and structures

164,929,546)

Accumulated depreciation
Machinery and equipment
Accumulated depreciation
Tools, furniture and fixtures
Accumulated depreciation

164,104,236)(27,332,693)

137,596,852

2,197,598)(24,458,126)

1,828,284,528)
139,646,110

2,215,416)(839,404)

1,358,194

94,748)(782,102)(302,989,632)

1,525,294,896

24,360,922)
1,433,313

88,170)(9,305,005)

15,055,917

1,050,305)(50,614)

44,133(45,150)

43,020(561,076)

489,229

511,316)

511,316

1,461,051)

1,461,051

5,668,071)

5,668,071

Land in trust

60,333,658)

60,333,658

60,333,658)

60,333,658

668,813,420)

668,813,420

Buildings and structures in trust

35,844,895)

Accumulated depreciation(6,103,622)

Construction in progress

Machinery and equipment in trust

638,283)

Accumulated depreciation(417,525)

Tools, furniture and fixtures in trust
Accumulated depreciation
Total

35,694,554)
29,741,273(5,498,595)

220,758(392,992)

397,349,473)
30,195,959(67,660,155)

245,290(4,628,371)

638,283)

8,724)

329,689,318

7,075,530)

8,724)

2,447,159

96,713)(3,944)

4,780(3,686)

5,038(43,724)

52,989¥539,171,159)¥539,171,159¥542,664,398)¥542,664,398$5,976,844,690)$5,976,844,690

The compressed amount of tangible assets with government grants under the Corporation Tax Law of Japan was ¥50 million ($555 thousand) at September
30, 2009 and ¥50 million ($555 thousand) at March 31, 2009.

30 Japan Real Estate Investment Corporation

5. SHORT-TERM LOANS
Short-term loans at September 30, 2009 and March 31, 2009 consisted of the following:Thousands of yen
As ofSeptember 30, 2009

U.S. dollars
As ofMarch 31, 2009

As of
September 30, 2009

̆¥ 5,000,000

0.67257% unsecured loan from a bank, due on March 24, 2010

4,500,000

4,500,000

49,883,605

0.63900% unsecured loan from a bank, due on June 1, 2010

5,000,000

̆

55,426,228

̆

2,000,000

̆̆

3,000,000

̆

2,000,000̆

22,170,491

3,000,000̆

33,255,737

̆

5,000,000

0.55605% unsecured loan from a bank, due on June 1, 2009

¥

$

̆

0.51553% unsecured loan from a trust bank,due on September 1, 2009
0.52416% unsecured loan from a trust bank,due on September 24, 2009
0.64% unsecured loan from a trust bank,due on September 1, 2010
0.6327% unsecured loan from a trust bank,due on September 24, 2010
0.51553% unsecured loan from a bank, due on September 1,2009̆

0.52416% unsecured loan from a bank, due on September 24,
2009
0.64% unsecured loan from a bank, due on September 1, 2010

̆

2,500,000

5,000,000

̆

55,426,228

̆

2,500,000̆

27,713,114

̆

3,000,000

3,000,000

̆

0.6327% unsecured loan from a bank, due on September 24,
2010
0.52416% unsecured loan from a trust bank,due on September 24, 2009

̆

0.6327% unsecured loan from a trust bank,due on September 24, 2010

33,255,737

0.92227% unsecured loan from a bank, due on September 24,ʊ̆

2,000,000

0.8363% unsecured loan from a bank, due on March 24, 2010

2,000,000̆

22,170,491

0.67257% unsecured loan from a bank, due on March 24, 2010

1,000,000

1,000,000

11,085,246

2009

0.62303%unsecured loan from banks and trust banks,
due on December 21, 2009

20,000,000

20,000,000

221,704,911

Total¥48,000,000¥48,000,000$532,091,786

The Company has commitment lines of ¥25,000 million ($277,131 thousand) with four financial institutions to reduce a refinancing risk.
The unused amount of such commitment lines was ¥25,000 million ($277,131 thousand) at September 30, 2009.

6. INVESTMENT CORPORATION BONDS INCLUDING CURRENT PORTION OF INVESTMENT CORPORATION
BONDS
Details of total investment corporation bonds outstanding are summarized as follows:
As of
September 30, 2009

As ofMarch 31, 2009

As of
September 30, 2009

AmountInterest rate

AmountInterest rate

Amount(thousands of yen)(%)(thousands of yen)(%)

(U.S. dollars)

Unsecured bond due on April 30, 2010

¥10,000,000

0.98%¥10,000,000

0.98%$110,852,455

Unsecured bond due on September 29, 2025

10,000,000

2.56%

10,000,000

2.56%

110,852,455

Unsecured bond due on June 18, 2012

10,000,000

1.67%

10,000,000

1.67%

110,852,455

Unsecured bond due on June 18, 2014

15,000,000

1.91%

15,000,000

1.91%

166,278,683

Total¥45,000,000

̆

¥45,000,000

̆

$498,836,049

Japan Real Estate Investment Corporation

31

7. LONG-TERM LOANS INCLUDING CURRENT PORTION OF LONG-TERM LOANS
Long-term loans at September 30, 2009 and March 31, 2009 consisted of the following:Thousands of yen
As of
As of
September 30, 2009
March 31, 20091.2875% unsecured loan from a bank, due on December 15, 2009

¥ 2,000,000

U.S. dollars
As ofSeptember 30, 2009

¥ 2,000,000$ ,22,170,491

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

3,000,000̆

33,255,737

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

2,000,000

2,000,000

22,170,491
22,170,491

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

2,000,000

2,000,000

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

3,000,000

3,000,000

33,255,737

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

2,000,000

2,000,000

22,170,491

1.5725% unsecured loan from a bank, due on June 14, 2010

3,000,000̆

33,255,737

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

1,000,000

1,000,000

11,085,246

2,000,000

2,000,000

22,170,491

1,500,000

1,500,000

16,627,868

1,000,000

1,000,000

11,085,246

5,000,000

5,000,000

55,426,228

2,000,000

2,000,000

22,170,491

due on November 1, 2011

5,000,000

5,000,000

55,426,228

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

10,000,000

10,000,000

110,852,455

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

22,000,000

22,000,000

243,875,402

24,000,000

24,000,000

266,045,893

5,000,000

5,000,000

55,426,228
55,426,228

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
1.595% unsecured loan from an insurance company,
due on April 25, 2016
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
1.86875% unsecured loan from an insurance company,
due on May 29, 2015
1.54375% unsecured loan from an insurance company,
5,000,000

5,000,000

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

due on March 30, 2017

̆3,000,000

ʊ

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

1,000,000

1,000,000

11,085,246

1.42375% unsecured loan from a bank, due on April 24, 2013

5,000,000

5,000,000

55,426,228

1.42375% unsecured loan from a bank, due on April 24, 2013

5,000,000

5,000,000

55,426,228

1.4875% unsecured loan from a bank, due on September 2, 2013

3,000,000

3,000,000

33,255,737

3,000,000

33,255,737

1.42375% unsecured loan from a bank, due on April 24, 2013
1.5725% unsecured loan from a bank, due on June 14, 2010

3,000,000
      ̆3,000,000

ʊ

5,000,000

55,426,228

1.4875% unsecured loan from a trust bank, due on September 2, 2013

5,000,000

1.65% unsecured loan from a bank, due on September 1, 2015

2,000,000

2,000,000

22,170,491

1.10625% unsecured loan from a bank, due on December 20, 2010

1,000,000

1,000,000

11,085,246

1.31% unsecured loan from a bank, due on March 24, 2014
Subtotal
Less: current portion of long-term loans
Total

32 Japan Real Estate Investment Corporation

2,000,000

2,000,000

22,170,491¥127,500,000¥127,500,000$1,413,368,806

18,000,000

12,000,000

199,534,420¥109,500,000¥115,500,000$1,612,903,226

8. NET ASSETSThe Company is required to maintain net assets of at least ¥50 million ($554 thousand), as required pursuant to the Investment Trust Law.

9. INCOME TAXESAt September 30, 2009 and March 31, 2009, 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 September 30,
2009 and March 31, 2009 were as follows:
For the period from April 1, 2009

For the period from October 1, 2008

to September 30, 2009

to March 31, 2009

Statutory tax rate…………………………………………………..……………39.33%………………………..39.33%
Deductible dividend distribution……………...……………………………….(39.33%) …………………….. (39.33%)
Others……….…………………………………… ……..….……………………0.01%…………………………0.01%
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 earnings available fordividend 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 ofIncorporation, the Company made a dividend distribution of integral multiple of number of units up to 100% of retained earnings in the amount of ¥8,504
million ($94,277 thousand) subsequent to September 30, 2009 and treated it as tax deductible dividend. The Company will not distribute the dividends inexcess 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 September 30, 2009 and March 31, 2009, and for theperiods then ended:
U.S. dollars

Yen
For the period

For the period
from April 1, 2009
to September 30, 2009

For the period
from April 1, 2009
to September 30, 2009

from October 1, 2008
to March 31, 2009

Net assets at period end per unit

¥690,984¥690,806$7,660Net income per unit

¥ 19,197¥ 19,020$7,213

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.

Japan Real Estate Investment Corporation

33

11. RELATED PARTY TRANSACTIONS
For the six months ended September 30, 2009 and March 31, 2009
For the period from October 1, 2008 to March 31, 2009(1)

Parent Company and Major Corporation Unitholders(2)

Subsidiaries“Not applicable”“Not applicable”(3)

Sister Companies“Not applicable”(4)

Directors and Major Individual Unitholders“Not applicable”

For the period from April 1, 2009 to September 30, 2009(1)

Parent Company and Major Corporation Unitholders(2)

Subsidiaries“Not applicable”“Not applicable”(3)

Sister Companies“Not applicable”(4)

Directors and Major Individual Unitholders“Not applicable”

12. BREAKDOWN OF PROPERTY-RELATED REVENUES AND EXPENSES
For the six months ended September 30, 2009 and March 31, 2009
Thousands of yen

Property-Related Revenues
Rental Revenues

U.S. dollars

For the period
from April 1, 2009
to September 30, 2009

For the period
from October 1, 2008

¥20,795,790¥20,716,737$230,526,449

to March 31, 2009

For the period
From April 1, 2009
to September 30, 2009

20,682,990

20,609,470

229,276,033

Rental revenues

15,801,630

15,671,686

175,164,956

Common service charges

3,056,165

3,058,377

33,878,342

553,017568,982

6,130,332

1,272,177

1,310,423

14,102,404

Parking revenues
Other rental revenues
Non-Rental Revenues

112,800

107,266

1,250,416

Cancellation charges

63,23256,255700,953

Other miscellaneous revenues

49,56751,010549,463

10,646,300

9,929,685

118,016,860

Property-Related Expenses
Property management expenses

2,240,532

2,261,861

24,836,857

Utilities expenses

1,552,430

1,570,674

17,209,073

Property and other taxes

1,770,835

1,509,694

19,630,150

Casualty insurance

44,51944,090493,512

Repairing expenses

1,119,621

676,964

12,411,276

Depreciation

3,801,232

3,788,102

42,137,593

117,128

78,296

1,298,399¥10,149,490¥10,787,051$112,509,589

Other rental expenses
Property-Related Profits

34 Japan Real Estate Investment Corporation

13. BREAKDOWN OF GAIN ON TRANSFER OF UNUSED FLOOR AREA
For the six months ended September 30, 2009 and March 31, 2009
Thousands of yen
For the period
from April 1, 2009
to September 30, 2009

U.S. dollars
For the period

from October 1, 2008
to March 31, 2009

For the period
From April 1, 2009
to September 30, 2009

Mitsubishi UFJ Trust and Banking Building
Revenue from transfer of development rights of floor area
Transfer expenses
Gain on transfer of development rights of floor area

¥729,984

̆

$8,092,052

1,412

̆

15,652¥728,572

̆

$8,076,400

14. SUPPLEMENTAL CASH FLOW INFORMATION
The following table represents a reconciliation of cash and cash equivalents at September 30, 2009 and March 31, 2009:
Thousands of yen

U.S. dollars

As ofSeptember 30, 2009

As ofMarch 31, 2009

As of
September 30, 2009

¥18,360,347¥15,234,428$203,528,963

3,060,247

3,114,738

33,923,598

Cash and deposits with banks
Cash and deposits with banks held in trust
Time deposits with maturities of more than three months
Cash and cash equivalents

6,500,000

̆

72,054,096¥14,920,595¥18,349,167$165,398,465

15. LEASESThe Company owns office buildings under leases and earns rent income. As of September 30, 2009 and March 31, 2009, the future lease revenues under
the non-cancelable operating leases are as follows:
Thousands of yen

U.S. dollars

As ofSeptember 30, 2009

As ofMarch 31, 2009

As of
September 30, 2009

Due within one year

¥12,223,369¥12,205,731$135,499,054

Due after one year

26,543,498

31,172,069

294,241,195

Total¥38,766,867¥43,377,800$429,740,249

16. SUBSEQUENT EVENTSTransfer of a part of asset
The Company completed the following transfer of a part of Jingumae Media Square Building Site on October 30, 2009.
Outline of the transfer
1.

Transferred asset:

Real Property (a part of land)

2.

Transfer price:|¥1,507,411 thousand ($16,710 thousand)*3.

Contract date:

April 2, 2009

4.

Transfer date:

October 30, 20095.

Transferee:

The Tokyo Metropolitan Government

6.

Impact of transfer on gain or loss:

The gain on the transfer in the amount of ¥885,059 thousand ($9,811 thousand) and the non-rental revenues(compensation for the property transfer) in the amount of ¥21,795 thousand ($242 thousand) were posted in
the 17th Period (period from October 1, 2009 to March 31, 2010).

Japan Real Estate Investment Corporation

35

Issuance of new investment units
Based on the approval by the Board of Director’s meeting held on November 18 and December 1, 2009, the Company decided to make issuance of new
investment units, and completed a public offering on December 8, 2009 and third party allocation on December 22, 2009. As a result of the issuance ofadditional units, the Company has unitholders’ capital of ¥324,353,108 thousand ($3,595,534 thousand), with 489,200 units at the time of reporting.
Outline of the issuance of unitsA.

Public offerings of new investment units
1.

Subscription method:2.

Number of units newly issued:

Public offering (subscription by book-building and spread method*)
42,000 units

3.

Offer price (subscription price):¥597,520 ($6,624) per unit

4.

Aggregate amount of offer price (subscription price):¥25,095,840 thousand ($278,194 thousand)5.

Issue price (paid-in price): -¥579,040 ($6,419) per unit

6.

Aggregate amount of issue price (paid-in price):¥24,319,680 thousand ($269,590 thousand)

7.

Payment date:                 

December 8, 20098.

Starting date of computation for dividends:

October 1, 20099.

Specific use of proceeds of issue:

Acquisition of the trust beneficiary right in trust of real estate(quasi-co-ownership 30.0%) pertaining to Shiodome Building
and repayment of the existing loans.

* Under the so-called “Spread method”, the price difference between the aggregate amount of offer price and the aggregate amount of issue price shallbe the proceeds of each underwriter, and the Company will not pay an underwriting fee to underwriters. The underwriting fee is not recognized as newunit issuance cost in the financial statement.
B. Issuance of new investment units by third party allocation
1.

Subscription method:2.

Number of units newly issued:

4,200 units

3.

Issue price (paid-in price):|¥579,040 ($6,419) per unit

4.

Aggregate amount of issue price (paid-in price):¥2,431,968 thousand ($26,959 thousand)

5.

Payment date:

December 22, 20096.

Starting date of computation for dividends:

October 1, 20097.

Allottee:|Nikko Cordial securities Inc.

8.

Specific use of proceeds of issue:|Repayment of existing loans

36 Japan Real Estate Investment Corporation

Third party allocation

Japan Real Estate Investment Corporation

37

Introduction of the Company's Website

Visit the Company's English Website!
http://www.j-re.co.jp/english/

Main Functions

As any information posted on the website isclassified into these three categories, you caneasily obtain any desired information byclicking the appropriate icon.

You can download all the disclosure data of
the Company as an Excel file.

38 Japan Real Estate Investment Corporation

A summary of the latest data isavailable on this first page.

Corporate Data
As of September 30, 2009

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 LLC¥297,601,460,000 (See Note)

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

Number of Units Outstanding

Incorporation

443,000 (See Note)

May 11, 2001

Number of Unitholders

Executive Office

13,762

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 fundNote: Following the issue of new investment units through the public offering and third-party allocation conducted during the 17th fiscal period, as of December 22,
2009, the Company’s paid-in capital amounted to ¥324,353,108,000, and the number of the Company’s units outstanding totaled 489,200.

This 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 the Company’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 the Company. Actual results may differ substantially from the projections
depending on a number of factors.

Japan Real Estate Investment Corporation 39

JAPAN REAL ESTATE INVESTMENT CORPORATION

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

SEPTEMBER
2009
Semiannual
Report
For the period from April 1, 2009 to September 30, 2009

SEPTEMBER 2009 SEMIANNUAL REPORT

Japan Real Estate Investment Corporation