SEPTEMBER
2008
Semiannual
Report
For the period from April 1, 2008 to September 30, 2008

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

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

New Portfolio Properties

p. 4

Subsequent Eventp. 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

Corporate Datap.37

Financial Highlights
Thousands of U.S. dollars(Note 1)Millions of yen
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
October 1, 2006 to
March 31, 2007

For the period from
April 1, 2006 to
September 30, 2006

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

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

25,743
14,21812,946
12,945

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

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

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

191,229
94,69381,585
81,576Net Operating Income (NOI) (Note 2)
Funds from Operations (FFO) (Note 3)
FFO Multiple (Note 4)

14,173
12,00915.5 times

12,1978,078
31.9 times

12,073
10,02228.3 times

11,3009,441
33.8 times

10,3398,257
21.0 times

136,848
115,95415.5 times

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

8,448
443,000
19,072

12,945443,000
29,223

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

5,976
345,400
17,302

81,577443,000
184.15

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 ¥103.57 = US$1.00, the foreign exchange rate on
September 30, 2008, has been used for translation. The inclusion of such amounts is not intended to imply that Japanese yen has been or could be readily
converted, realized or settled into U.S. dollars at that rate or any other rate.
2. NOI = Property-Related Revenues – Property-Related Expenses (excluding Depreciation)
3. FFO = Net Income + Depreciation – Gain (Loss) on Transfer of Properties – Dividends Earned
4. FFO Multiple = Unit Price at End of the Respective Term ÷ FFO per Unit (Annualized)(Annualized portion of the calculation given in note 4 assumes a fiscal period of 183 days for the period ended September 30, 2006, 182 days for the period
ended March 31, 2007, 183 days for the period ended September 30, 2007, 183 days for the period ended March 31, 2008 and 183 days for the period ended
September 30, 2008.)

Top 10 Unitholders
As of September 30, 2008
Company

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

Unit Price Performance

TOPIX

Units

% of total units
outstanding

35,75533,13028,80725,906
11,503
10,677
10,160
10,13910,006
8,120

8.07%
7.48%
6.50%
5.85%
2.60%
2.41%
2.29%
2.29%
2.26%
1.83%

The Company

PO Price

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

Mar.

2001

2002

Sep.

Mar.

2003

Sep.

Mar.

2004

Sep.

Mar.

2005

Sep.

Mar.

2006

Sep.

Mar.

2007

Sep.

Mar.

Sep.

2008

Japan Real Estate Investment Corporation 1

The Highlights of Japan Real Estate Investment Corporation

Highlights

Acquisitions
A new initiative : Acquisition of the land and building—

adjacent to an existing building for the purpose of its extension— Acquisition of

Shin-Fujita Buildingfor ¥24,000 million($232 million) in September

Steady Growth— Total amount of acquisition price reached¥542,969 million($5,243 million).

— Revenues and profits continue to increase in its mainstay property-leasing business.

Quality Portfolio
54—

high-quality office buildings— Superior geographic and tenant diversity with a

96.1%

occupancy rate

Sound Financial Base— Highest credit ratings in J-REIT:

AA-

from S&P,

Aa3*

from Moody's,AAfrom R&I* On June 6, 2008, Moody's Investors Service Inc. raised the Company's rating from A1 to Aa3.
* On January 15, 2009, Moody's Investors Service Inc. has placed the rating of the Company under review for possible downgrade.

— LTV:

36.7%— The long-term , fixed-interest debt ratio:

86.0%

Collaboration with Sponsors— Expertise of Mitsubishi Estate Co., Ltd., Tokio Marine & Nichido

Fire Insurance Co., Ltd., The Dai-ichi Mutual Life Insurance
Company and Mitsui & Co., Ltd. is fully utilized.
2 Japan Real Estate Investment Corporation

Portfolio Highlights

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

Number ofbuildings(Note 1)

Total numberof tenants(Notes 1, 2)

Total leasable
space(Note 1)

Occupancy
rate(Note 1)

September 2001

20

213

133,927m 2

94.6%

Total leasable
space

March 2002

24

353

201,884m 2

94.0%

Occupancy rate

September 2002

27

362

215,928m 2

95.3%

March 2003

30

383

236,693m 2

94.4%

September 2003

32

407

246,062m

2

95.1%

March 2004

36

477

273,157m 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

400,090m2

98.7%

September 2006

49

835

396,173m 2

98.2%

March 2007

50

887

397,928m 2

97.8%

September 2007

50

879

406,605m

98.7%

March 2008

53

931

479,877m 2

95.9%

April 2008

53

930

479,934m 2

96.4%

May 2008

53

930

479,932m 2

96.3%

June 2008

53934

479,932m 2

96.3%

July 2008

53934

479,932m

2

95.5%

August 2008

53

934

479,881m 2

95.7%

September 2008

54

970

508,296m 2

96.1%

2

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.

100,000

180,000

260,000

340,000

420,000

500,000

14th 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, 2008

Properties bygeographic
region(Percentage based on
acquisition price)

Other major
cities18.8%

Tenants byindustry
type

Transport services and travel 1.2%
Steel and metals 1.3%
Textiles 1.6%
Ceramics 1.6%

(Percentage basedon leased space)

Staffing agencies 1.7%

Others12.2%

Communications 1.8%
Information
services
11.3%
Financeandinsurance
10.9%

Machinery 4.4%
Tokyo metropolitan area
excluding 23 wards
9.8%

Tokyo 23 wards
71.5%

Serviceindustries
15.9%

Pharmaceuticals 6.4%

Real estate 6.6%

Construction 6.8%
Electric devices 7.4%

Retail andrestaurants
8.8%Japan Real Estate Investment Corporation 3

New Portfolio Properties
For the period from April 1, 2008 to September 30, 2008

Extension Plan for Ryoshin Ginza East Mirror Building

Ch

uo

St
.

-it Ginch z a
om
e
aL

in

e

Yu
ra
ku
ch
o

Li

Gi

nz

ne

MatsuyaShtominicho

Sh
ow
aS
t.

a
nz
Gi

On July 4, 2008, the Company acquired a property comprising land and a building situatedadjacent to the previously acquired Ryoshin Ginza East Mirror Building for the acquisition
price of ¥1,800 million ($17 million). The Company plans to demolish the building on
the newly acquired land. After demolition is completed, the Company plans to construct
an extension to the Ryoshin Ginza East Mirror Building on the acquired land.
(For details concerning the Ryoshin Ginza East Mirror Building, please refer to page 16of this report.)

Chuo City
Office

ig
as

hi

gi

nz

a

Enhancement of the Competitiveness
H

ji

e

ar
H
t.

iS

um

3-15-15 and 3-15-9 Ginza, Chuo-ku, Tokyo
249.66m 2 (2,687ft 2)¥2,723 million ($26 million)(The figure includes the acquisition cost of the land and building,the demolition cost of the acquired building, and the amount ofextension building work costs, excluding overhead costs such as
brokerage commission, etc.)

Scheduled constructor:

in

an
lit
po wayor
et ss
M x p reE

Plan Overview
Address:
Site area:
Estimated total project cost:

aL

ki

ei s
To saku
A

KabukizaTsu• Its premium for size-based scarcity will be increased, given that most of theavailable properties in the Ginza area are small/medium in size.
• Its attractiveness to potential tenants and its ability to address existing
tenants' needs for additional office space will be increased.

Tsukiji
Hongwanji

Extension

SHIMIZU CORPORATION

Plan Schedule
July 2008
March 2009
February 2010

Acquisition of the land and building
Completion of building demolition
Completion of the extension and handover

Increase of property size
Site area:
Floor area of building:Standard floor area:

Ryoshin Ginza East Mirror Building

Existing portion

BeforeAfter615.25m2(6,622ft 2)
4,104.71m2(44,183ft 2)
377m2(4,059ft 2)

864.91m2(9,310ft 2)
Approx. 5,910m2(Approx. 63,615ft 2)
Approx. 575m2(Approx. 6,189ft 2)

BeforeExtension

AfterStandard floor area
Approx. 575m2 (approx. 6,189 ft2)

Standard floor area
377m2 (4,059 ft2 )Approx. 198m2(approx. 2,131 ft 2)

377m2 (4,059 ft 2)

Note : This illustration was drawn based on the relevant drawings and thespecifications, and may differ from the actuality.

4 Japan Real Estate Investment Corporation

Shin-Fujita Building
Property Summary
Type of specified asset:
Acquisition price:
Acquisition date:
Location:
Usage:
Site area:
Floor area of building:
Structure:

Completion:

Trust beneficiary right in trustof real estate¥24,000 million ($232 million)
September 1, 2008
Osaka, Osaka Prefecture
Office, shop
6,159.61m2 (66,301ft2)
45,411.31m2 (488,803ft2)
Steel-framed,steel-framed reinforced
concrete structure, flat roof
Above ground: 21 floors
Below ground: 2 floors
April 1995

Tokyo
Osaka

Leasing Conditions (As of September 30, 2008)
Number of tenants:
Leasable space:
Leased space:Occupancy rate:

36 tenants
28,414m2 (305,852ft2)
24,702m2 (265,891ft2)
86.9%

Property Acquisition Merits
The property is situated in the Dojima area, next to the Umeda area, Osaka's most concentrated business district. In recent years, a large-scale development project has focused on renewing the Dojima business district.
The property is close to several train stations, providing excellent transportation access. Along with high-gradebuilding specifications, the property is artistically designed, offering open public spaces, and is expected toremain a competitive office building. With multiple tenants, it is the largest of the Company's portfolio properties in a major regional city, and the Company expects tenant diversification will contribute to stable earnings.

Subsequent Event
After the period ended September 30, 2008

Acquired Property

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

Completion:

Trust beneficiary right intrust of real estate (Note)¥21,250 million($205 million)
December 19, 2008
Minato-ku, Tokyo
Office, shop
Approx.12,046m2(Approx.129,662ft2)
115,930.83m2 (1,247,868ft2)
Steel-framed, steel-framed
reinforced concrete structure,flat roof
Above ground: 24 floors
Below ground: 2 floors
December 2007

Note: Quasi-co-ownership 10%

Shinjuku
Tokyo

Shibuya
ShinagawaLeasing Conditions(As of December 19, 2008)

Number of tenants:
Leasable space:
Leased space:Occupancy rate:

26 tenants
8,037m2 (86,520ft2)
7,965m2 (85,742ft2)
99.1%

Property Acquisition Merits
Completed in December 2007, the building is only one year old. With a total floor space of 115,930.83m2(1,247,868ft2), the spaciousness of the property is rare among large buildings in three central wards of Tokyo.
The property is a three-minute walk from JR Hamamatsucho Station and Daimon Station on the
Toei Subway Line, from which multiple transportation routes are available. Moreover, the key Tokyo andShinagawa bullet train stations are reachable in only five or six minutes by train, with Haneda Airport
25 minutes away by monorail.
Japan Real Estate Investment Corporation 5

Histor y after IPO
Since listing on the Tokyo Stock Exchange (“TSE”) as the first J-REIT in Japan, the Company has establisheda firm track record over the past 13 fiscal periods. As the Company concluded its 14th fiscal period ended
September 30, 2008, the total acquisition price for properties reached ¥542,969 million ($5,243 million).
Throughout its history, the Company has sustained stable management while realizing steady growth and taking the initiative as a J-REIT pioneer. During the fiscal period under review, the Company accelerated efforts
to streamline and strengthen its portfolio.
Listed on
TSE¥92,845
million(20)¥164,277¥144,697

million(32)

million(30)

million(27)

million(24)¥192,607¥183,542

million(39)

million(36)

Steady growth

Total acquisition price(Number of properties)(Acquisition)2(Note 1)

2
236,693m 246,062m
2
2(233,925m )2
201,884m2 215,928m (223,410m )2

Total leasable space(Total leased space)
Total number of tenants¥239,827¥218,437

133,927m2(189,815m2)
353 tenants(205,796m2)
362 tenants

383 tenants

407 tenants

273,157m(258,885m2)
477 tenants

293,105m2(274,411m2)
504 tenants(126,748m2)
213 tenants(Notes 1, 2)

At IPO
Sep. 2001

Period ended
Mar. 2002

Period ended
Sep. 2002

Period ended
Mar. 2003

Period ended
Sep. 2003

Period ended
Mar. 2004

Period ended
Sep. 2004

94.6%

94.0%

95.3%

94.4%

95.1%

94.8%

93.6%

Occupancy rate
(Note 1)Feb. and Mar. 2002
Acquired Credit Ratings (First for a J-REIT)
Standard & Poor’s: A+
Moody’s: A2

Credit ratings

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

Bond issues

Operations, etc.

Listing and issuanceof units

Apr. 2003
Second/Third Investment
Corporation Bond Issue

Started its asset managementat ¥92.8 billion in asset size.

Sep. 2001
Listed on TSE
as first J-REIT

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

Oct. 2003
Second Follow-On

Sep. 2001
IPO
Notes: 1. Total acquisition price, number of properties, total leasable space, total leased space, total number of tenants and occupancy rate do not include the land andbuilding adjacent to the Ryoshin Ginza East Mirror Building.
2. The total number of tenants is the gross number of tenants by building.

6 Japan Real Estate Investment Corporation

¥542,969¥518,969¥412,766¥290,510¥326,560¥418,693
million(49)

million(52)¥441,276

million(54)

million(53)¥446,940
million(50)

million(50)

million(50)

million(46)

479,877m
400,090m2

336,026m2
2(327,962m )669 tenants

364,610m2(359,620m2)
814 tenants

2(394,764m )866 tenants

396,173m2(389,012m2)
835 tenants

397,928m2

406,605m2(389,112m2)
887 tenants(401,329m2)
879 tenants

2(460,182m2)
931 tenants

508,296m2(488,372m2)
970 tenants

Stable management(Trend in operating conditions)

Period ended
Mar. 2005

Period ended
Sep. 2005

Period ended
Mar. 2006

Period ended
Sep. 2006

Period ended
Mar. 2007

Period ended
Sep. 2007

Period ended
Mar. 2008

Period ended
Sep. 2008

97.6%

98.6%

98.7%

98.2%

97.8%

98.7%

95.9%

96.1%

Nov. 2004
Moody’s upgradedits credit ratingfrom A2 to A1.
Dec. 2004
R&I issued
an AA credit rating.

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

Jun. 2008
Mar. 2008
Moody’s upgradedStandard &Poor’s upgraded its credit rating
its credit rating from A1 to Aa3.
from A+ to AA-.
Jun. 2007
Fifth Investment
Corporation Bond Issue
Sixth Investment
Corporation Bond Issue

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

Surpassed ¥500 billion
in asset size.

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

As a new initiative aimed at reinforcing thecompetitiveness of its portfolio, the Company acquired theland and building adjacent to an existing property
for the purpose of its extension.
Kazuhiko Arahata
CEO & President of Japan Real Estate
Asset Management Co., Ltd.

BUSINESS PERFORMANCE FOR
THE 14TH FISCAL PERIOD
Summary of Financial Results and Cash Dividend
In the 14th fiscal period (April 1, 2008 to September 30, 2008),
Japan Real Estate Investment Corporation ("the Company")
recorded operating revenues of ¥19,805 million ($191 million),
down 23.1% compared with the previous period. Operating
income declined 31.0% to ¥9,807 million ($95 million). After
deducting expenses for interest payments on loans and othercosts, ordinary income contracted 34.7% to ¥8,449 million ($82
million), and net income decreased by the same percentage to¥8,448 million ($82 million).
In the previous period, the Company received, andrecorded as operating revenues, dividends of ¥7,935 million($77 million) on the Company's preferred capital contribution
from Harumi Front Tokutei Mokuteki Kaisha (“Harumi Front
TMK”) as a result of the December 18, 2007 acquisition of theHarumi Center Building from Harumi Front TMK. Benefitingfrom such extraordinary factors as the above, the Company posted
record-high operating revenues and operating income for the
fiscal period. However, due to the absence of extraordinary
factors—the posting of similar dividends received as in theprevious period and gain on sale of properties this period—theCompany's revenues and earnings declined in the fiscal period
under review. Nevertheless, revenues and earnings continue toincrease in its mainstay property-leasing business.
As a result of the aforementioned, the Company declareda cash dividend of ¥19,072 ($184.15) per unit.

Operating Environment and Performance
During the period under review (April 1, 2008 to September 30,2008), although the Japanese economy faced a downside riskover fears of a business recession in the United States owing to
the subprime crisis, fluctuating stock and exchange markets,trends in crude oil prices and other factors, having entered a more
settled period following the end of the disruption caused byrevisions to the Building Standards Law of Japan and an upward
trend in exports, a moderate economic recovery was expected.
Nevertheless, the subprime crisis has had a deep impact, and thecredit crunch at financial institutions has resulted in a prudent

stance toward the financing of real estate. This caused a flurry ofbankruptcies, primarily of cash-strapped real estate companies,
and triggered, through the end of the fiscal term, the businesscollapse of major financial institutions in the United States andthe tax-payer funded bail-out. As the resulting credit crisis spread
across the globe, the Japanese economy witnessed a precipitous
drop in stock prices and a rising yen, which had a substantial
impact on corporate performance.
In the market for leased office space, despite higher
vacancy rates, especially in regional cities, firm demand forcorporate office space, mainly in central Tokyo, kept occupancy
rates high.
The Company maintained a high occupancy rate of
96.1% at the end of the period. In addition to the acquisition of
top-level properties, this reflects the high quality of its existing
properties held and efforts to upgrade building facilities throughoptimal refurbishment in order to maintain and improvefunctions while implementing finely tuned, customer-oriented
building management policies and undertaking vigorous activities
to attract new tenants. Furthermore, the Company improved
portfolio profitability by upwardly revising rent levels for existing
tenants to the benchmark of market rent levels.
Turning to the property market, property prices polarizedagainst the backdrop of the prudent stance toward financing
adopted by domestic and overseas financial institutions in thewake of the continuing effects of the subprime crisis. While
willingness to invest in less-competitive properties such as thoselocated in regional areas and small- and medium-sized buildings
has diminished due to difficulty in financing, investments fromwell-financed real estate companies and institutional investors
both in Japan and overseas remain robust for competitive prime
properties in central Tokyo.
In this market environment, the Company undertook
the acquisition of competitive properties to further strengthen
the quality of its portfolio. In the period under review, one
property was acquired (the Shin-Fujita Building, for ¥24,000
million [$232 million]), on September 1, 2008. As a new
initiative, the Company acquired the land and building adjacent
to an existing building for the purpose of its extension.
Specifically, the land and building adjacent to the Ryoshin Ginza
East Mirror Building were acquired for ¥1,800 million ($17Japan
Japan Real
Real Estate
Estate Investment
Investment Corporation
Corporation 99In the midst of a severe economic slump, the Company has maintained a soundand conservative financial standing, which is exemplified by the successful raisingof its credit rating.
million) on July 4, 2008. The Company plans to construct anaddition to the Ryoshin Ginza East Mirror Building after tearing
down the existing building on the newly acquired land. Thanks
to the building extension, the leasable space of the Ryoshin Ginza
East Mirror Building will be expanded, efficiency will be
improved and the property will become more competitive.
As a result, the Company's properties as of September
30, 2008 consisted of 54 office buildings with a total acquisition
price of ¥542,969 million ($5,243 million). Total leasable space
was 508,296 m2 (5,471,249 ft2), with a total of 970 tenants*.
* The number of properties, total acquisition price and total leasable space do not include theland and building adjacent to the Ryoshin Ginza East Mirror Building acquired for the purpose ofbuilding extension.

Finance Activities
The Company procured ¥14,000 million ($135 million) on April
24, 2008 and ¥3,000 million ($29 million) on June 13, 2008 in
long-term loans for the redemption of its second investment
corporation bond (¥10,000 million) ($97 million) on April 30,
2008, while refinancing short-term loans to long-term loans.
Furthermore, the Company procured ¥22,000 million ($212
million) in total in both short- and long-term loans for theacquisition of the Shin-Fujita Building. As a result of these financeactivities, as of September 30, 2008, the Company's total interestbearing debt amounted to ¥199,500 million ($1,926 million),
consisting of long-term loans of ¥126,500 million ($1,221
million), which includes the current portion of ¥7,000 million($68 million), short-term loans of ¥28,000 million ($270
million), and investment corporation bonds of ¥45,000 million($434 million).
As of September 30, 2008, the Company's long-term,
fixed-interest debt ratio1 stood at 86.0%, and the loan-to-value(LTV) ratio2 was 36.7%. As these results indicate, the Company
has been able to maintain a sound and conservative financial
standing.
The Company's credit ratings as of September 30, 2008
were as follows:
Rating Agency

Credit RatingStandard & Poor's Rating Services

Long-term: AA-; Short-term: A-1+;
Outlook: Stable
Rating: Aa3*; Outlook: Stable

Moody's Investors Service Inc.
Rating and Investment
Information, Inc.

Rating: AA; Outlook: Stable* On June 6, 2008, Moody's Investors Service Inc. raised the Company's rating from A1to Aa3.
* On January 15, 2009, Moody's Investors Service Inc. has placed the rating of the Company underreview for possible downgrade.
Notes:
1. Long-term, fixed-interest debt ratio = Ratio of long-term, fixed-interest debt including the current
portion of long-term loans to interest-bearing debt
2. LTV ratio = Ratio of interest-bearing debt to total assets

10 Japan Real Estate Investment Corporation

OUTLOOK
Trends in the Rental Office Market
The U.S. subprime crisis that occurred in the summer of 2007
triggered the current turmoil in the global economy. Meanwhile,
Japan is approaching the end of economic expansion, after
enjoying the longest postwar period of economic expansion—
the expansion that has continued since 2002—and is plunging
into a recessionary phase. The real estate industry also experienced
a rapidly deteriorating fund-raising environment on the back ofshrinking investment funds, and it is going through an intensive
adjustment period. Therefore, it is difficult to foresee future
trends. Along with major cities in other regions, vacancy rates in
the 23 wards of Tokyo began to increase in the rental officemarket.
In the real estate market, we anticipate the active stancetoward acquisition of prime office buildings in city centers—thetypes of properties targeted by the Company—to remainunchanged by well-financed major real estate companies andinstitutional investors in Japan and abroad. Financial institutions
have adopted a more prudent stance toward financing for the realestate sector. In this context, we believe that both the soundnessof the Company's financial standing and its ability to procure
funds are increasingly the key strategies for acquiring prime
properties.

The Company's Management Policies
Under these conditions, the Company adheres to the following
management policies in order to maintain and improve earnings.
First, the Company will work to strengthen relationshipof trust with existing tenants and raise rent levels. As of September
30, 2008, the Company had contracts with 11 property
management companies. Most of these companies were alreadymanaging their respective buildings before the Company 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 inorder to increase tenant satisfaction and subsequently uncoveradditional demand for office floor space and raise rent levels. In
addition, we are endeavoring to raise rent levels for those tenants
whose rents are significantly below market value.
Second, we will fill vacancies in a prompt manner. In
cooperation with the property management companies
mentioned above, the Company actively seeks the mostTaketo Yamazaki (Left)
Executive Director ofJapan Real Estate Investment Corporation

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

appropriate tenants for each property, based on location andfeatures, in order to fill current and anticipated vacancies as
rapidly as possible. We are also working to uncover additional
demand for office floor space among our existing tenants.
Third, we will stabilize revenues. With the aim ofstabilizing revenues, the Company is endeavoring to apply fixedand long-term leasing agreements with its 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 also revamping their management systems and cost structureson an ongoing basis.
The Company has adopted the following policies foracquiring properties.
First, to access important information quickly, theCompany is enhancing its property information channels whileworking to develop new channels.
Second, in its acquisition activities, the Company willcontinue to meticulously monitor and examine economic,
physical and legal factors, including rights-related issues, while
also taking business conditions into account when selecting
properties. With regard to the structure of buildings, we requirebuildings to meet or exceed new earthquake-resistance standards
and are targeting properties capable of maintaining a competitiveedge in terms of the facilities they offer over the medium to longterm.
Third, in accordance with its acquisition policies, theCompany's general target for the regional diversity of properties
is for 70% or more of its properties to be located within the Tokyo
metropolitan area, with the remaining 30% or less located inother major cities.
Under these policies, the Company will continue toacquire highly competitive properties while also considering
suitable timing for the replacement of assets in order to further
strengthen the quality of its portfolio.
Concerning the financing of property acquisitions, theCompany flexibly selects a variety of financial instruments,
including the issue of investment corporation bonds, while
maintaining a sound and conservative financial standing andmonitoring trends in financial markets. When procuring a loan,
we are guided by prudent and stable financial policies. Working
to minimize funding costs, we also negotiate with several qualified

institutional investors before determining the various
components that encompass loan procurement.

Performance Forecasts for the 15th and 16th Periods
For the 15th fiscal period (October 1, 2008 to March 31, 2009),
the Company forecasts operating revenues of ¥20,280 million($196 million), operating income of ¥9,640 million ($93
million), ordinary income of ¥8,150 million ($79 million) andnet income of ¥8,150 million ($79 million). We plan to declarea cash dividend of ¥18,410 ($177.75) per unit.
For the 16th fiscal period (April 1, 2009 to September
30, 2009), the Company forecasts operating revenues of ¥20,580
million ($199 million), operating income of ¥9,470 million ($91
million), ordinary income of ¥7,900 million ($76 million) andnet income of ¥7,900 million ($76 million). We plan to declarea cash dividend of ¥17,830 ($172.15) per unit.
As previously discussed above, the J-REIT market is
expected to continuously face a severe operating environment.
Such a forecast is supported by decreased funds flowing into the
J-REIT market attributable to the global-scale credit crunch
triggered by U.S. financial instability as well as by a prudent stancetoward financing adopted by Japanese financial institutions. In
such an environment, the Company—a J-REIT leader withexceptional management capabilities and financial soundness—is committed to implementing the aforementioned initiatives ina reliable and enthusiastic manner to maximize unitholder value
through optimal investment management.
We thank you and ask you, all of our unitholders, foryour continuing support and understanding.

Taketo Yamazaki
Executive Director of Japan Real Estate Investment Corporation

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

Japan
Japan Real
Real Estate
Estate Investment
Investment Corporation
Corporation 11
11

The Portfolio of Japan Real Estate Investment Corporation
As of September 30, 2008

Properties Roster
Location

Type ofspecified asset

Acquisitiondate

Acquisition price(¥ mil)Tokyo 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

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

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

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

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

06/01/2007
01/31/2005
09/25/2001
06/28/2006
total
02/28/2002
03/03/2003
total
10/02/2006
11/01/2006
total
09/22/2006
09/10/2001
08/08/2003
12/20/2001
09/01/2008
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
542,969

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

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

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

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

I- 29● I- 30● I- 31● I- 32

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

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

Real property
Trust
Trust
Real property

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

Hachioji, Tokyo

Real property

II- 2

Saitama Urawa Building

Saitama, Saitama Prefecture

Real property

II- 3● II- 4● II- 5

MM Park Building
Kawasaki Isago Building
Musashi Kosugi STM Building

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

Real property
Trust
Real property

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

Sapporo, Hokkaido
Sendai, Miyagi Prefecture
Sendai, Miyagi Prefecture

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(0.9%)(15.0%)(1.8%)(0.9%)(2.7%)(8.2%)(1.3%)(3.8%)(1.3%)(0.6%)(1.0%)(3.1%)(1.0%)(4.9%)(1.4%)(0.9%)(0.5%)(1.4%)(1.7%)(0.5%)(1.0%)(0.9%)(1.2%)(1.6%)(0.9%)(2.2%)(6.4%)(0.8%)(1.6%)(0.7%)(0.3%)(0.8%)(1.0%)(0.5%)(6.9%)(0.6%)(0.7%)(1.3%)(0.2%)(0.6%)(0.8%)(0.9%)(0.3%)(2.7%)(0.3%)(0.5%)(4.4%)(0.8%)(2.6%)(0.9%)(0.5%)(0.3%)(0.9%)(0.7%)(100.0%)Percentage ofAppraisal value atownership of thethe end ofbuilding
Completion period (¥ mil)Leasable space

Leased space

Occupancy
rate

Numberof tenants

Revenues from leasing
operations (¥ 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

6,300
88,60012,1006,520
17,60050,2007,040
30,7004,791m2
25,678m2
6,269m2
3,687m2
9,316m2
11,923m2
4,495m2
20,865m2(51,577ft2)(276,402ft2)(67,480ft2)(39,695ft2)(100,282ft2)(128,341ft2)(48,384ft2)(224,594ft2)

4,791m2
25,678m2
2,522m2
3,224m2
9,316m2
11,923m2
4,495m2
20,544m2(51,577ft2)(276,402ft2)(27,156ft2)(34,705ft2)(100,282ft2)(128,341ft2)(48,384ft2)(221,139ft2)

100.0%
100.0%
40.2%
87.4%
100.0%
100.0%
100.0%
98.5%

1
5
1
6
1
10
1
45

222
1,906
221
182
488
990
162
1,053

(1.1%)(9.6%)(1.1%)(0.9%)(2.5%)(5.0%)(0.8%)(5.3%)

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

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

8,810
4,200
7,150
18,0005,190
26,300
9,300
7,980
3,910
9,890
12,100
2,840
7,050
6,150
9,570
13,5006,610
16,20053,0005,710

4,694m2
3,897m2
4,279m2
4,329m2
2,875m2
20,812m2
4,898m2
9,631m2
4,062m2
6,197m2
9,246m2
4,067m2
5,205m2
7,708m2
7,356m2
7,772m2
3,147m2
5,558m2
29,684m2
2,462m2(50,531ft2)(41,950ft2)(46,068ft2)(46,604ft2)(30,949ft2)(224,022ft2)(52,724ft2)(103,671ft2)(43,726ft2)(66,708ft2)(99,529ft2)(43,783ft2)(56,035ft2)(82,972ft2)(79,180ft2)(83,660ft2)(33,876ft2)(59,832ft2)(319,516ft2)(26,511ft2)

4,081m2
3,726m2
4,279m2
4,329m2
2,875m2
20,425m2
4,898m2
9,631m2
4,062m2
6,197m2
9,092m2
4,067m2
5,205m2
7,519m2
7,356m2
7,772m2
3,147m2
5,075m2
28,506m2
2,462m2(43,933ft2)(40,116ft2)(46,068ft2)(46,604ft2)(30,949ft2)(219,858ft2)(52,724ft2)(103,671ft2)(43,726ft2)(66,708ft2)(97,866ft2)(43,783ft2)(56,035ft2)(80,934ft2)(79,180ft2)(83,660ft2)(33,876ft2)(54,634ft2)(306,838ft2)(26,511ft2)

86.9%
95.6%
100.0%
100.0%
100.0%
98.1%
100.0%
100.0%
100.0%
100.0%
98.3%
100.0%
100.0%
97.5%
100.0%
100.0%
100.0%
91.3%
96.0%
100.0%

13
7
1
11
8
7
7
19
9
10
103
1
4
18
20
7
5
8
57
3

286
164
150
394
145
777
266
340
144
291
531
121
222
258
333
416
203
498
1,537
156

(1.4%)(0.8%)(0.8%)(2.0%)(0.7%)(3.9%)(1.3%)(1.7%)(0.7%)(1.5%)(2.7%)(0.6%)(1.1%)(1.3%)(1.7%)(2.1%)(1.0%)(2.5%)(7.8%)(0.8%)

29.253305%
100.0%
100.0%
100.0%

1997
1987
1990
1989

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

10,929m2
7,163m2
2,186m2
5,797m2(117,646ft2)(77,106ft2)(23,532ft2)(62,401ft2)

10,929m2
7,163m2
2,186m2
5,797m2(117,646ft2)(77,106ft2)(23,532ft2)(62,401ft2)

100.0%
100.0%
100.0%
100.0%

18
8
9
8

458
190
76
203

(2.3%)(1.0%)(0.4%)(1.0%)

80.4%

1996

6,170

10,068m2(108,378ft2)

10,068m2(108,378ft2)

100.0%

43269(1.4%)

100.0%

1990

2,720

4,510m2(48,550ft2)

4,510m2(48,550ft2)

100.0%

14

136(0.7%)

100.0%
100.0%
34.32%

2007
1990
1990

37,4003,360
4,000

38,665m2
6,831m2
5,394m2(416,189ft2)(73,537ft2)(58,071ft2)

36,694m2
6,831m2
5,394m2(394,972ft2)(73,537ft2)(58,071ft2)

94.9%
100.0%
100.0%

25
13
25

1,081
168
162

(5.5%)(0.9%)(0.8%)

100.0%
50.0%
100.0%

2006
1993
1991

7,210
1,130
3,690

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

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

100.0%
100.0%
100.0%

8
17
19

326
69
169

(1.6%)(0.4%)(0.9%)

89.0%

1991

6,590

20,889m2(224,855ft2)

18,066m2(194,470ft2)

86.5%

68

509

(2.6%)

57.04651%

1995

5,390

8,056m2(86,719ft2)

8,056m2(86,719ft2)

100.0%

51

295(1.5%)

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

1987
1987
1991
1982
1995
1992

1,730
16,0001,570
2,350
25,2004,840

3,847m2
21,635m2
3,470m2
6,800m2
28,414m2
11,574m2(41,409ft2)(232,878ft2)(37,354ft2)(73,195ft2)(305,852ft2)(124,587ft2)

3,847m2
21,635m2
3,113m2
5,839m2
24,702m2
11,520m2(41,409ft2)(232,878ft2)(33,513ft2)(62,854ft2)(265,891ft2)(124,004ft2)

100.0%
100.0%
89.7%
85.9%
86.9%
99.5%

14
26
9
30
36
16

116
740
85
132
132
277

(0.6%)(3.7%)(0.4%)(0.7%)(0.7%)(1.4%)

100.0%

1991

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

20,275m2(218,247ft2)

99.1%

24

682

(3.4%)

27.7488%
48.753%

2005
1994

5,560
3,260

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

9,511m2
9,860m2(102,376ft2)(106,134ft2)

95.4%
100.0%

39
12

296
274

(1.5%)(1.4%)

100.0%
100.0%
74.4844%

1992
1993
1987

1,440
4,610
3,940
644,700

3,524m2(37,936ft2)
4,886m2(52,597ft2)
5,721m2(61,588ft2)
2
488,372m (5,256,788ft2)

88.1%
81.6%
97.8%
96.1%

18
23
9
970

93
199
186
19,805(0.5%)(1.0%)(0.9%)(100.0%)4,000m2(43,057ft2)(64,487ft2)
5,991m2
5,852m2(62,995ft2)
2
508,296m (5,471,249ft2)

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.
(Note)FAST RETAILING CO., LTD.
The Dai-ichi Mutual Life Insurance Company
JRI Solutions, Limited
TOTO LTD.
JGC Corporation

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

17,014m2 (183,144ft2)
10,665m2 (114,802ft2)
9,316m2 (100,282ft2)
8,774m2 (94,453ft2)
8,664m2 (93,258ft2)
8,476m2 (91,245ft2)
7,673m2 (82,601ft2)
7,634m2 (82,178ft2)
6,906m2 (74,341ft2)
5,560m2 (59,853ft2)

3.5%
2.2%
1.9%
1.8%
1.8%
1.7%
1.6%
1.6%
1.4%
1.1%

Note: Not disclosed due to the tenant's request

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

III-1–III-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-9 III-8
III-12
III-15 III-14
III-17 III-16

I-1–I-32: Tokyo
23 wards

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

I-2

I-1

I-3
I-5
I-18
I-4
I-23
I-10
I-7
I-19
I-6
I-11
I-24 I-25
I-8
I-12
I-9
I-26
I-13
I-27
I-15
I-14
I-16
I-28
I-17
I-20
I-21

I-22

Tokyo Station

14 Japan Real Estate Investment Corporation

Over view of Portfolio Properties As of September 30, 2008
Note: Concerning real estate of which the Company is a partial owner through co-ownership or compartmentalized building units, the figures for “Site area” and “Floor area of building”
represent total site area and total floor space for the entire building.

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

Kitanomaru Square

● I-1

● I-2

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

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

Kandabashi Park
Building

● I-3

● I-4

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

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

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

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

Location :Site area :Floor area of building :Structure :Completion :Tokyo Opera City
Building

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

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

Higashi-Gotanda
1Chome Building

Omori-Eki Higashiguchi
Building● I-21● I-22

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

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

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

Nippon Brunswick
Building

Yoyogi 1Chome
Building● I-23● I-24

Shibuya-ku, Tokyo
1,497.52m2 (16,119ft2)
11,957.38m2 (128,708ft2)
Above ground: 9 floors
Below ground: 2 floors
March 1974

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

Japan Real Estate Investment Corporation 17

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

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

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

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

Shibuya Cross Tower

Ebisu Neonato● I-27● I-28

Shibuya-ku, Tokyo
5,153.45m2 (55,471ft2)
61,862.33m2 (665,880ft2)
Above ground: 32 floors
Below ground: 3 floors
April 1976

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

Harmony Tower

Otsuka HigashiIkebukuro Building● I-29● I-30Nakano-ku, Tokyo
10,020.52m2 (107,860ft2)
72,729.31m2 (782,851ft2)
Above ground: 29 floors
Below ground: 2 floors
March 1997

Location :Site area :Floor area of building :Structure :Completion :Toshima-ku, Tokyo
2,121.39m2 (22,834ft2)
9,531.28m2 (102,594ft2)
Above ground: 8 floors
Below ground: 1 floor
November 1987

Ikebukuro 2Chome
Building

Ikebukuro YS
Building● I-31● I-32

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

18 Japan Real Estate Investment Corporation

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

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

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

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

MM Park Building

Kawasaki Isago
Building● II-3● II-4

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

Location :Site area :Floor area of building :Structure :Completion :Kawasaki, Kanagawa Prefecture
1,594.50m2 (17,163ft2)
9,623.83m2 (103,590ft2)
Above ground: 12 floors
Below ground: 1 floor
December 1990

Musashi Kosugi
STM Building

8 . 3 Square Kita
Building● II-5● III-1

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

Location :Site area :Floor area of building :Structure :Completion :Sapporo, Hokkaido
5,541.60m2 (59,649ft2)
16,096.97m2 (173,266ft2)
Above ground: 11 floors
Below ground: 1 floor
December 2006

Jozenji Park Building

Sendai Honcho
Honma Building● III-2● III-3

Sendai, Miyagi Prefecture
1,566.68m2 (16,864ft2)
7,648.33m2 (82,326ft2)
Above ground: 8 floors
Below ground: 1 floor
January 1993

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

Japan Real Estate Investment Corporation 19

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

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

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

Hirokoji Sakae
Building

Nagoya Hirokoji
Building● III-6● III-7

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

Location :Site area :Floor area of building :Structure :Completion :Nagoya, Aichi Prefecture
4,095.81m2 (44,087ft2)
33,377.73m2 (359,275ft2)
Above ground: 18 floors
Below ground: 2 floors
May 1987

Nagoya Misono
Building

Kyoto Shijo
Kawaramachi Building● III-8● III-9

Nagoya, Aichi Prefecture
805.04m2 (8,665ft2)
5,348.00m2 (57,565ft2)
Above ground: 7 floors
Below ground: 1 floor
September 1991

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

Shin-Fujita Building

Sakaisujihonmachi
Building● III-10● III-11

Osaka, Osaka Prefecture
6,159.61m2 (66,301ft2)
45,411.31m2 (488,803ft2)
Above ground: 21 floors
Below ground: 2 floors
April 1995

20 Japan Real Estate Investment Corporation

Location :Site area :Floor area of building :Structure :Completion :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 :Midosuji Daiwa
Building

Lit City Building● III-12● III-13

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

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

Tosei Tenjin Building● III-14

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

Okayama, Okayama Prefecture
7,596.44m2 (81,767ft2)
52,653.19m2 (566,754ft2)
Above ground: 20 floors
Below ground: 2 floors
June 2005● III-15

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

Tenjin Crystal
Building

Hinode Tenjin
Building● III-16● III-17

Fukuoka, Fukuoka Prefecture
1,835.17m2 (19,754ft2)
10,432.04m2 (112,289ft2)
Above ground: 14 floors
Below ground: 1 floor
August 1993

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

Japan Real Estate Investment Corporation 21

22 Japan Real Estate Investment Corporation

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

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

Selected Financial Data
Thousands of U.S. dollars

Millions of yen
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, 2008 to

October 1, 2007 to

April 1, 2007 to

October 1, 2006 to

April 1, 2006 to

April 1, 2008 to

September 30, 2008

March 31, 2008

September 30, 2007

March 31, 2007

September 30, 2006

September 30, 2008

Operating Revenues¥ 19,805¥ 25,743¥ 17,530¥ 16,960¥ 15,570$2,191,229

Operating Expenses

9,998

11,524

8,791

8,655

8,528

96,536

Operating Income

9,807

14,218

8,739

8,304

7,041

94,693

Income before Income Taxes

8,449

12,946

7,586

7,184

5,977

81,585Net Income

8,448

12,945

7,585

7,183

5,976

81,576

Total Assets

542,920

527,537

449,643

443,973441,1635,242,060

Interest-Bearing Debts

199,500

177,500

144,500

140,000

202,500

1,926,233

Net Assets

306,050

310,547

272,269

271,867

207,449

2,955,010

Unitholders’ Capital

297,601

297,601

264,683

264,683

201,472

2,873,433

Number of Units

443,000

443,000

410,000

410,000

345,400

443,000

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

690,858

701,009664,071

663,091

600,605

6,670.45

Cash Distribution

8,448

12,945

7,585

7,183

5,976

81,577

Dividend Payout Ratio

100.0%

100.0%

99.9%

100.0%

99.9%

100.0%

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

19,072

29,22318,50017,521

17,302

184.15Net Operating Income (NOI)

14,173

12,197

12,073

11,30010,339136,848

Funds from Operations (FFO)

12,0098,078

10,022

9,441

8,257

115,954

Return on Assets (ROA) (Note 2)

1.6%

2.6%

1.7%

1.6%

1.4%

1.6%

(3.1% annualized)

Return on Equity (ROE) (Note 3)

2.7㧑
(5.5% annualized)

EOP Equity Ratio (Note 4)(5.3% annualized)

4.7㧑
(9.3% annualized)(3.4% annualized)

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

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

2.9%(5.8% annualized)(3.1% annualized)

2.7%(5.5% annualized)

56.4%

58.9%

60.6%

61.2%

47.0%

56.4%

36.7%

33.6%

32.1%

31.5%

45.9%

36.7%

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

15.5 times

31.9 times

28.3 times

33.8 times

21.0 times

15.5 times

Debt Service Coverage Ratio (Note 6)

9.7 times

14.2 times

10.4 times

10.5 times

9.5 times

9.7 times

Notes 1:

2:
3:

4:
5:
6:

Amounts in U.S. dollars are included solely for the convenience off readers outside Japan. The rate of ¥103.57 = US$1.00, the foreign exchange rate on September 30,
2008, has been used for translation. The inclusion of such amounts is not intended to imply that Japanese yen has been or could be readily converted, realized or
settled into U.S. dollars at that rate or any other rate.
ROA = Income before Income Taxes ¸ Average of Total Assets during the period
ROE = Net Income ¸ Average of Net Assets during the period(Annualized portion of the calculation given in note 2 and note 3 assumes a fiscal period of 183 days for the period ended September 30, 2006, 182 days for theperiod ended March 31, 2007, 183 days for the period ended September 30, 2007, 183 days for the period ended March 31, 2008 andd 183 days for the period ended
September 30, 2008.)
EOP Equity Ratio = (Net Assets at end of period ¸ Total Assets at end of period)  100
EOP Interest-Bearing Debt Ratio on Total Assets = (Interest-Bearing Debt at end of period ¸ Total Assets at end of period)  100
Debt Service Coverage Ratio = Net Income before Interest, Taxes, Depreciation and Amortization ¸ Interest Expenses

Japan Real Estate Investment Corporation 23
Japan Real Estate Investment Corporation 23

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

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

U.S. dollars (Note 1)
As of
September 30, 2008ASSETS
Current Assets:
Cash and bank deposits
Rental receivables
Dividend receivables
Refundable income taxes
Refundable consumption taxes¥ 15,069,928)¥ 13,124,551)$, 145,504,763)

208,071)

125,811)2,008,994)

̆)6,348,610)

̆)6,100)

1,594,444)

58,906)

̆)

1,458,648)

̆)105,135)

94,261)

1,015,118)

15,389,236)

22,746,328)

148,587,781)

Land

351,928,258)

336,310,231)

3,397,974,885)

Buildings and structures

195,015,937)

183,199,855)

1,882,938,471)

Machinery and equipment

2,798,477)

2,768,111)

27,020,154)

Other current assets
Total current assets

Property and Equipment, at Cost:

Tools, furniture and fixtures

95,277)

94,565)919,937)

Construction in progress

1,417,571)

1,315,581)

13,687,084)

551,255,522)

523,688,344)

5,322,540,531) )Subtotal
Accumulated depreciation(27,392,551)(23,832,007)(264,483,455)

Total property and equipment

523,862,971)

499,856,336)

5,058,057,076)

Investment securities

2,797

1,272,797

27,011)

Deposits

23,57523,575

227,628)

Investments and Other Assets:Long-term prepaid expenses

18,6474,801

180,044)2,691,724

2,691,724

25,989,426)

Easement

828,095

828,095

7,995,514)

Deferred investment corporation bond issuance costs

103,118

114,005

995,639)¥542,920,166¥527,537,666$5,242,060,120)

Leasehold rights

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

Estate Investment Corporation
24 Japan Real24 Japan Real Estate Investment Corporation

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

U.S. dollars (Note 1)
As of
September 30, 2008¥

$ ,LIABILITIESCurrent Liabilities:
Trade accounts payable,446,273¥ 2,084,823

4,308,902

Other payables

814,518

3,047,550

7,864,426

Short-term loans

28,000,000

23,000,000

270,348,557

Current portion of long-term loans

7,000,000

7,000,000

67,587,139

Current portion of investment corporation bonds
Accrued expenses
Accrued income taxes̆

10,000,000

̆

728,221633,694

7,031,197

44

38

430

Accrued consumption taxes

107,128̆

1,034,360

Rent received in advance2,260,179

2,239,582

21,822,728

Other current liabilities

46,5601,425

449,555

39,402,926

48,007,114

380,447,295

Investment corporation bonds

45,000,000

45,000,000

434,488,752

Long-term loans

119,500,000

92,500,000

1,153,809,018

Deposits received from tenants

32,966,841

31,483,194

318,304,931

Total long-term liabilities

197,466,841

168,983,194

1,906,602,700

Total Liabilities

236,869,768

216,990,308

2,287,049,996

297,601,460

297,601,460

2,873,433,040

Total current liabilities

Long-Term Liabilities:

NET ASSETS
Unitholders’ capital
Authorized:
Issued:2,000,000 units
443,000 units as of September 30, 2008 and
443,000 units as of March 31, 2008
8,448,938

12,945,897

81,577,084

Total net assets

Retained earnings

306,050,398

310,547,357

2,955,010,125

Total Liabilities and Net Assets¥542,920,166¥527,537,666$5,242,060,120

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

Japan Real Estate Investment Corporation 25
Japan Real Estate Investment Corporation 25

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

U.S. dollars (Note 1)

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, 2008
to September 30, 2008

Operating Revenues and Expenses
Operating Revenues:
Rental revenues
Non-rental revenues
Dividends earned¥19,716,477)
89,147)
̆)¥17,761,985
45,727
7,935,763$190,368,613)
860,751)
̆)Total operating revenues

19,805,625)

25,743,475

191,229,363)

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

9,192,859)
531,583)
173,810)100,009)8,678,165
2,574,029
158,103
114,305

88,759,868)
5,132,606)
1,678,198)
965,625)

Total operating expenses

9,998,264)

11,524,604)

96,536,297)

Operating income

9,807,360)

14,218,871)

94,693,067)

38,252)
9,653)
2,777)

33,567̆
12369,336)
93,208)26,817)970,200)
408,045)
10,887)
̆)
19,126)773,348438,698
20,85952,848
20,1139,367,579)
3,939,801)
105,123)
̆)
184,676)

8,449,784)

12,946,583

81,585,250)

956)
(2)

908
8

9,238)(23)
81,576,035)

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

8,448,829)

12,945,665

Retained Earnings Brought Forward

108)

231

1,049)

Retained Earnings at End of Period¥ 8,448,938)¥12,945,897$ 81,577,084)

Units

Unitholders’ capital

Retained earnings

Total

Balance as of September 30, 2007

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

Public offering

32,917,500)

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

33,00032,917,500

̆)Cash dividends paid̆

̆(7,585,000)(7,585,000)

Net incomĕ̆

12,945,665)

12,945,665)

Balance as of March 31, 2008

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

Cash dividends paid̆

̆(12,945,789)(12,945,789)

Net incomĕ̆

8,448,829)

8,448,829)

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

Units

Unitholders’ capital

Retained earnings

Total

443,000$2,873,433,040$124,996,598)$2,998,429,639)

Cash dividends paid̆̆(124,995,549)(124,995,549)

Net incomĕ̆

81,576,035)

81,576,035)

443,000$2,873,433,040$ 81,577,084)$2,955,010,125)

Balance as of September 30, 2008

U.S. dollars (Note 1)

Balance as of March 31, 2008

Balance as of September 30, 2008
The accompanying notes form an integral part of these financial statements.

Estate Investment Corporation
26 Japan Real266 Japan Real Estate Investment Corporation

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

Thousands of yen

U.S. dollars (Note 1)

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, 2008
to September 30, 2008

Income before income taxes¥ 8,449,784)¥12,946,583)$ 81,585,250)

Depreciation and amortization

3,560,543)

3,068,427)

34,378,137)

10,887)

20,859)105,123)

New unit issuance costs

̆)

52,848)

̆)Dividends earned̆)(7,935,763)

̆)Interest income(38,252)(33,567)(369,336)

Cash Flows from Operating Activities

Amortization of investment corporation bond issuance costs

Interest expense

1,378,245)

1,212,046)

13,307,380)

Rental receivables(82,259)(21,718)(794,241)

Other receivables̆)

146,549)

̆)1,191)(3,490)11,503)

1,458,648)(1,458,648)

14,083,697)(8,080)(29,489)(78,021)

Trade accounts payable(1,439,810)

632,194)(13,901,806)

Refundable income taxes
Refundable consumption taxes
Prepaid expenses
Other payables(2,109,451)

1,951,478)(20,367,401)

Accrued expenses

107,197)(260,748)

1,035,022)

Rent received in advance

20,597)44,418)

198,876)

Long-term prepaid expenses(13,845)(2,934)(133,684)

Other

46,656)(993)

450,485)

11,342,052)

10,328,053 )

109,510,981)

Interest received

33,938)41,317)

327,691)

Dividends received

7,935,763)

̆

76,622,218)

Interest paid

(1,283,786)(1,207,550)(12,395,355)

(950)

(931)

(9,179)18,027,016)

9,160,890)

174,056,356)

Payments of time deposits(7,740,000)(3,745,000)(74,732,065)

Proceeds from time deposits

2,092,000)

9,165,000)

20,198,899)(27,876,590)(74,171,252)(269,156,996)

Sub-total

Income taxes paid
Net cash provided by operating activities

Cash Flows from Investing Activities

Purchases of property and equipment
Purchases of intangible assets(1,214)(486,375)(11,726)

Proceeds from investment securities redemption

1,270,000)̆

12,262,238)

Repayment of lease deposits received(1,089,333)(1,008,112)(10,517,844)

Proceeds from lease deposits received

2,572,980)

4,919,704)

24,842,915)(30,772,156)(65,326,036)(297,114,579)

Net cash used in investing activities

Cash Flows from Financing Activities
Proceeds from short-term loans

20,500,000)

48,000,000)

197,933,765)

Repayment of short-term loans(15,500,000)(25,000,000)(149,657,237)

Proceeds from long-term loans

27,000,000)

10,000,000)

260,693,251)

Payments of investment corporation bond redemption(10,000,000)

̆

(96,553,056)

Payments of investment corporation bond issuance costs̆)(1,472)̆)Proceeds from issuance of units̆)32,917,500)

̆)(11,693)(41,154)(112,907)(12,945,789)(7,585,000)(124,995,549)

9,042,517)

58,289,872)

87,308,267)(3,702,622)

2,124,726)(35,749,956)

Payment of new unit issuance costs
Dividends to unitholders
Net cash provided by financing activities
Net (Decrease) Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period

11,772,551)

9,647,825)

113,667,580)

Cash and Cash Equivalents at End of Period¥ 8,069,928)¥11,772,551)$ 77,917,624)

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

Japan Real Estate Investment Corporation 27
Japan Real Estate Investment Corporation 27

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

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 Managementt Co., Ltd. (“J-Rea”).
J-Rea is currently owned 36% by Mitsubishi Estate Co., Ltd. (“MEC”), 27% by The Tokio Marine & Nichido Fire Insurance Co., Ltd. (“TMN”), 27% by
The Dai-ichi Mutual Life Insurance Company (“DL”) and 10% by Mitsui & Co., Ltd.
On May 11, 2001, the Company was incorporated with ¥200 million off original capital contribution by MEC, TMN and DL under the Law Concerning
Investment Trusts and Investment Corporations of Japan, or the Investment Trust Law.
On September 10, 2001, the Company commenced operations when the Company was listed on the Tokyo Stock Exchange as one of the ffirst 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, 2008, the Company had total unitholders’ capital of ¥297,601 million ($2,873,433 thousand) with
443,000 outstanding units.
At September 30, 2008, the Company owned a portfolio of 54 office properties concerning an aggregate of approximately 508,296 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 Corporationr
Law of Japan, the Financial Insttruments 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 preparedd 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 ¥103.57=US$1.00, the foreign exchange rate on
September 30, 2008, has been used for translation. The inclusion of such amounts is nott intended to imply that Japanese yen has been or could be readily
converted, realized or settled into U.S. dollars at that rate or any other rate.
As permitted under the Japanese Financial Instruments and Exchange Law, amounts of less than one million yen have been omitted. As a result, the totals
shown in the accompanying financial statements do not necessarily agree with the sum of the individual amounts.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESInvestment securities
Non-marketable securities classified as other securities are carried at cost. Cost of securities sold is determined by the moving average method.
Property and equipment
Property and equipment is stated at cost, less accumulated depreciation. The costs of land, buildings and building improvements include the purchase priceof property, legal fees and acquisition costs. Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets ranging as statedbelow:
Buildings………………………………………………………………………………………

2-61 years

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

5-50 years

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

3-18 years

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

3-15 years

Estate Investment Corporation
28 Japan Real28 Japan Real Estate Investment Corporation

Expenditures for repairing expenses are charged to income as incurred. Significant renewals and betterments are capitalized.
The Company reviews fixed assets for impairment whenever events or changes in circumstances indicate that the carrying amount of its fixed assets may
not be recoverable. Companies are required to recognize an impairment loss in their statement of income if certain indicators of asset impairment exist andthe book value of an asset exceeds the undiscounted sum of future cash flows of the asset. The standard states that impairment losses should be measured
as the excess of the book value over the higher of (1) the fair market value of the asset, net of disposition costs and (2) the present value of future cash
flows arising ongoing utilization of the asset and from disposal after asset use. The standard covers land, factories, buildings and other forms of property,
plant and equipment as well as intangible assets. Fixed assets are grouped at the lowest level for which there is identifiable cash flows that are independentof cash flows of other groups of assets.
Deferred charges
Deferred charges include investment corporation bond issuance costs and new unit issuance costs.
Investment corporation bond issuance costs are amortized using the straight-line method over the amortization periods. Investment corporation bondissuance costs recorded on the balance sheets for the 11th fiscal period and before are amortized using the straight-line method over three years, with anequal amount amortized in each fiscal period.
New unit issuance costs are charged to income as incurred. The underwriters’ commissions of the public offering are not recognized as new unit issuancecosts in the financial statements since such costs are not payable by the Company under the so-called “spread method”. Under the spread method, thedifference between the offer price (the price paid by the unitholder) and the issue price (the price received by the Company) is directly paid to theunderwriters. The difference incurred at the sixth offering on March 12, 2008 was ¥1,039 million ($10,375 thousand).
Revenue recognition
Revenues from leasing of office space are recognized as rent accrued over the lease period.
Taxes on property and equipment
Property and equipment is subject to property
t 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
m investments which are highly liquid, readily convertible to cash andwith insignificant risk of price fluctuation, with original maturity of three months or less.

3. INVESTMENT SECURITIESInvestment securities recorded at cost at September 30, 2008 and March 31, 2008 are summarized as follows:
Thousands of yen
As of
As of
September 30, 2008
March 31, 2008

U.S. dollars
As ofSeptember 30, 2008

Other securities
Non-listed stock¥2,797¥1,272,797$27,011

Japan Real Estate Investment Corporation 29
Japan Real Estate Investment Corporation 29

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

U.S. dollars
As of March 31, 2008

As of September 30, 2008

Acquisition Costs

Book Value

Acquisition Costs

Book Value

Acquisition Costs

Book ValueLand¥309,238,853)¥309,238,853¥307,313,991)¥307,313,991$2,985,795,634)$2,985,795,634

Buildings and structures

163,164,783)

Accumulated depreciation

162,694,804)(21,363,481)

Machinery and equipment

141,801,302

2,215,416)

Accumulated depreciation(18,241,162)

1,517,452(613,694)(37,738)

48,814

Construction in progress

1,417,571)

Land in trust

42,689,405)

Buildings and structures in trust

31,851,154)

Accumulated depreciation(4,921,122)(364,381)

471,318

1,417,571

1,315,581)

1,315,581

13,687,084)

13,687,084

42,689,405

28,996,240)

28,996,240

412,179,251)

412,179,251(3,428)5,296¥523,862,971)¥523,862,971

307,532,629)
15,909,618(47,514,942)

204,303(3,561,038)(3,170)5,554(33,103)

51,135¥499,856,336)¥499,856,336$5,058,057,076)$5,058,057,076

552,694)

8,724)

Accumulated depreciation

14,651,472

835,699)

20,505,050)(348,391)

Tools, furniture and fixtures in trust

Total

55,68385,840)214,243

583,060)(368,816)

21,390,525)(30,157)(4,595,432)

Accumulated depreciation

1,369,134,904(6,739,053)

26,930,031

Machinery and equipment in trust(206,270,938)

1,601,722

86,553)

Accumulated depreciation

144,453,641

2,215,416)(697,963)

Tools, furniture and fixtures

1,575,405,842)

260,017,687

5,629,629)

8,724)

2,068,590

84,238)The compressed amount of tangible assets with government grants under the Corporation Tax Law of Japan was ¥50 million ($483 thousand) at September
30, 2008 and ¥50 million ($483 thousand) at March 31, 2008.

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

0.84035% unsecured loan from a bank, due on March 24, 2009

U.S. dollars
As ofSeptember 30, 2008

¥ 4,500,000¥ 4,500,000$ 43,448,875

5,000,000

̆

48,276,528

0.84173% unsecured loan from a trust bank, due on September 24, 2008

̆4,000,000

̆

0.9058% unsecured loan from a trust bank, due on September 1, 2009

2,000,000

̆

19,310,611

0.9325% unsecured loan from a trust bank, due on September 24, 2009

3,000,000

̆

28,965,917

0.84812% unsecured loan from a bank, due on September 24, 2008

̆

4,500,000

̆

0.9058% unsecured loan from a bank, due on September 1, 2009

5,000,000

̆

48,276,528

0.9325% unsecured loan from a bank, due on September 24, 2009

24,138,264

0.9058% unsecured loan from a bank, due on June 1, 2009

2,500,000

̆

0.84173% unsecured loan from a trust bank, due on September 24, 2008

̆4,000,000

̆

0.9325% unsecured loan from a trust bank, due on September 24, 2009

3,000,000

̆

28,965,917

0.86195% unsecured loan from a bank, due on March 24, 2009

̆

3,000,000

̆

1.00116% unsecured loan from a bank, due on March 24, 2009

2,000,000

2,000,000

19,310,611

0.84035% unsecured loan from a bank, due on March 24, 2009

1,000,000

1,000,000

9,655,306¥28,000,000¥23,000,000$270,348,557

Total

The Company has commitment lines of ¥25,000 million ($241,383 thousand) with four financial institutions to reduce a refinancing risk.
The unused amount of such commitment lines was ¥25,000 million ($241,383 thousand) at September 30, 2008.

Estate Investment Corporation
30 Japan Real30 Japan Real Estate Investment Corporation

6. INVESTMENT CORPORATION BONDS INCLUDING CURRENT PORTION OF INVESTMENT CORPORATION
BONDS
Details of total investment corporation bonds outstanding are summarized as follows:
As of
September 30, 2008
Amount(thousands of yen)Unsecured bond due on April 30, 2008

¥

As of
March 31, 2008

As of
September 30, 2008

Interest rate(%)

Amount(thousands of yen)Interest rate(%)

Amount(U.S. dollars)̆̆¥10,000,000)

0.69%

Unsecured bond due on April 30, 2010

10,000,000

0.98%

10,000,000)

0.98%

96,553,056

Unsecured bond due on September 29, 2025

10,000,000

2.56%

10,000,000)

2.56%

96,553,056

Unsecured bond due on June 18, 2012

10,000,000

1.67%

10,000,000)

1.67%

96,553,056

Unsecured bond due on June 18, 2014

15,000,000

1.91%

15,000,000)

1.91%

144,829,584

Subtotal¥45,000,000

̆

¥55,000,000)̆

$434,488,752

̆(10,000,000)

̆̆¥45,000,000)

̆

Less: current portion of investment corporation bonds
Total

̆

¥45,000,000

$

̆

̆

$434,488,752

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

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

As of
September 30, 2008

¥122,000,000¥ 2,000,000$1,19,310,611

5,000,000

5,000,000

48,276,528

2,000,000

2,000,000

19,310,611

1,500,000

1,500,000

14,428,958

1,000,000

̆

9,655,306

5,000,000

5,000,000

48,276,528

2,000,000

2,000,000

19,310,611

due on November 1, 2011

5,000,000

5,000,000

48,276,528

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

10,000,000

10,000,000

96,553,056

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

22,000,000

22,000,000

212,416,723

company, due on June 23, 2011

24,000,000

24,000,000

231,727,334

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

2,000,000

2,000,000

19,310,611

1.0575% unsecured loan from a bank, due on March 24, 2009
1.015% unsecured loan from an insurance company,
due on March 30, 2009
1.47125% 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 insurance

1.86875% unsecured loan from an insurance company,
due on May 29, 2015

5,000,000

5,000,000

48,276,528

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

3,000,000

3,000,000

28,965,917

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

2,000,000

2,000,000

19,310,611

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

1,000,000

1,000,000

9,655,306

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

2,000,000

2,000,000

19,310,611

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

3,000,000

3,000,000

28,965,917

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

2,000,000

2,000,000

19,310,611

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

3,000,000

̆

28,965,917

Japan Real Estate Investment Corporation 31
Japan Real Estate Investment Corporation 31

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

U.S. dollars
As ofSeptember 30, 2008

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

1,000,000

1,000,000

9,655,306

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

5,000,000

̆

48,276,528

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

5,000,000

̆

48,276,528

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

3,000,000

̆

28,965,917

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

3,000,000

̆

28,965,917

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

5,000,000

̆

48,276,528

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

2,000,000

̆

19,310,611¥126,500,000¥99,500,000$1,221,396,157

Subtotal
Less: current portion of long-term loans
Total

7,000,000

7,000,000

67,587,139¥119,500,000¥92,500,000$1,153,809,018

8. NET ASSETSThe Company is required to maintain net assets of at least ¥50 million ($483 thousand), as required pursuant to the Investment Trust Law.

9. INCOME TAXESAt September 30, 2008 and March 31, 2008, 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,
2008 and March 31, 2008 were as follows:
For the period from April 1, 2008

For the period from October 1, 2007

to September 30, 2008

to March 31, 2008

Statutory tax rate…………………………………………………..……………39.39%………………………..39.39%
Deductible dividend distribution……………...……………………………….(39.39%) …………………….. (39.39%)
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 taxable income for the fiscal
period as stipulated by Article 67-15 of the STML. Based on the distribution policy provided by Article 32-2 of the Articles off Incorporation, the Company
made a dividend distribution of integral multiple of number of units up to 100% of retained earnings in the amount of ¥8,448 million ($81,577 thousand)subsequent to September 30, 2008 and treatedd it as tax deductible dividend. The Company will not distribute the dividends in excess of retained earnings
under Article 32-3 of the Articles of Incorporation.
Tax rate change after the closing date
Due to the latest Japanese corporate income tax rate revision and the introduction of a new local corporate special tax, which applies to accounts for fiscal
periods commencing on or after October 1, 2008, the revised statutory tax rate of 39.33% will be used in the calculation of deferredf
tax assets with respect
to the temporary differences that are scheduled for elimination after October 1, 2008. The projectedd impact of this tax rate change on the Company’sdeferred tax assets as of the end of the fiscal period under review is estimated to be minor.

Estate Investment Corporation
32 Japan Real32 Japan Real Estate Investment Corporation

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

Yen
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, 2008
to September 30, 2008

Net assets at period end per unit

¥690,858¥701,009$6,670Net income per unit

¥ 19,071¥ 31,299$ ,184

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.

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

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

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

Subsidiaries
Party type

Subsidiary

Party name

Harumi Front TMK

Address

Chuo-ku, Tokyo

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

Management of specified asset

䋦 of voting stock held (*2)
Relationships

Direct 49.90

Concurrent board appointment
Business relationship㵪

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

Details of transaction and transaction amount (*1)

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

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

Year end balance of the account (*1)

(Thousands of yen)

¥7,935,763(U.S. dollars)$79,207,138

Dividend receivables:,(Thousands of yen)

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

Sister Companies“Not applicable”
Japan Real Estate Investment Corporation 33
Japan Real Estate Investment Corporation 33

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

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

Subsidiaries
Party type

Subsidiary

Party name

Harumi Front TMK

Address

Chuo-ku, Tokyo

CapitalBusiness(Millions of yen),¥2,545(U.S. dollars)$24,572,753

Management of specified asset

䋦 of voting stock held (*2)
Relationships

Business relationshipDirect 49.90
1. Portfolio investment of the Company
2. Acquisition of real estate and other assets in the Harumi Center
Building through the preferred capital contribution certificates

Details of transaction and transaction amount (*1)

Redemption of preferred capital contribution certificates (*3):(Thousands of yen)

¥1,270,000(U.S. dollars) $12,262,238
Redemption of dividend receivable:(Thousands of yen)

¥6,348,610(U.S. dollars) $61,297,775(*1) Neither transaction amount nor balance includes consumption taxes, etc.
(*2) “% of voting stock held” indicates ownership percentage of preferred capital contribution certificates issued by the TMK.
(*3) Transaction terms and policy for determining the terms;
The preferred capital contribution certificates were determined to be redeemed at the special meeting held on March 31, 2008, followedfby
the redemption of ¥1,267,050 thousand ($12,233,755), as well as the remaining ¥2,950 thousand ($28,483), in response to the decision
made at the general meeting of the members held on September 17, 2008, to liquidate the TMK.
(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, 2008 and March 31, 2008
Thousands of yen
For the period
For the period
from April 1, 2008
from October 1, 2007
to September 30, 2008
to March 31, 2008

U.S. dollars
For the period
from April 1, 2008
to September 30, 2008

Property-Related Revenues¥19,805,625¥17,807,712$191,229,363

Rental Revenues

19,716,477

17,761,985

190,368,613

Rental revenues

15,068,093

13,632,566

145,487,045

Common service charges

2,908,862

2,521,163

28,085,959

537,350

506,853

5,188,284

1,202,170

1,101,401

11,607,325

89,14745,727860,751

Cancellation charges

7,008

18,684

67,666

Other miscellaneous revenues

82,13927,042793,085

Parking revenues
Other rental revenues
Non-Rental Revenues

34 Japan Real Estate Investment Corporation
34 Japan Real Estate Investment Corporation

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

Property-Related Expenses

U.S. dollars
For the period
from April 1, 2008
to September 30, 2008

9,192,859

8,678,165

88,759,868

Property management expenses

2,052,418

1,925,915

19,816,731

Utilities expenses

1,452,724

1,201,728

14,026,497

Property and other taxes

1,509,505

1,338,556

14,574,735

Casualty insurance

41,99837,954

405,508

Repairing expenses

511,214

991,096

4,935,932

3,560,543

3,068,427

34,378,137

64,454

114,485

622,329¥10,612,765¥ 9,129,547$102,469,496

Depreciation
Other rental expenses
Property-Related Profits

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

Cash and deposits with banks

U.S. dollars

As ofSeptember 30, 2008

As ofMarch 31, 2008

As of
September 30, 2008

¥12,826,745)¥ 8,381,956)$123,846,146)

Cash and deposits with banks held in trustt

2,243,182)

4,742,594)

21,658,617)

Time deposits with maturities of more than three months(7,000,000)(1,352,000)(67,587,139)

Cash and cash equivalents¥ 8,069,928)¥11,772,551)$177,917,624)

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

U.S. dollars

As ofSeptember 30, 2008

As ofMarch 31, 2008

As of
September 30, 2008

Due within one year

¥10,884,356¥11,880,599$105,091,789

Due after one year

32,170,897

36,470,031

310,619,847

Total¥43,055,254¥48,350,631$415,711,635

15. SUBSEQUENT EVENTS“Not applicable”

Japan Real Estate Investment Corporation 35
Japan Real Estate Investment Corporation 35

36 Japan Real Estate Investment Corporation

Corporate Data
As of September 30, 2008

Transfer Agent

Executives
Executive Director:
Supervisory Directors:

Taketo Yamazaki

The Sumitomo Trust & Banking Co., Ltd.

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

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

Number of Units Outstanding

Incorporation

443,000

May 11, 2001

Number of Unitholders

Executive Office

12,673

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

Stock Listing
Tokyo Stock Exchange

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

Securities CodePlanning Department8952

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

Type of Investment Corporation

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

Closed-end corporate type fundThis semiannual report includes translations of documents originally filed under the Financial Instruments and Exchange Law of Japan. This report was prepared in English solely for the convenience of readers outside Japan and should not be considered as a disclosure statement. The original Japanese documents
shall take precedence in the event of any discrepancies arising from the translations or interpretations contained in this report.
Estimates for 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, these projections 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 37

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

Issued on January 28, 2009