SEP TE M BER
2 0 05S E M I A N N UALR E P OR T
For the period f rom April 1, 2005 to September 30, 2005

Japan Real Estate Investment Corporation

Pro f ile
Japan Real Estate Investment Corporation (the “Company”) was established as oneof 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 growthand dividends in the 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 Japan Real Estate Investment Corporation, are special legal entities
incorporated and operated under the Investment Trust Law. Accordingly, the “shares” of such investment
corporations, including the shares of the Company, are governed by the Investment Trust Law andrepresent the equity interests in such investment corporations, which may differ in certain material respects
from the “shares” governed by the Commercial Code of Japan and representing the equity interests inJapanese ordinary corporations incorporated and operated under the Commercial Code 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 “shares” of the Company. “Shareholders”
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 consequences of an investment in theshares of the Company, with specific reference to their own legal, tax and other situation and any recentchanges in applicable laws, guidelines or their interpretation.

THE STRENGTHS OF JAPAN REAL ESTATE INVESTMENT CORPORATION
•
•
•

•
•
•
•
•

Steady growth — Total amount of acquisition prices reached ¥326.5 billion($2,885.1 million) at the end of September, 2005.
Decision to acquire “Kitanomaru Square” (Scheduled for acquisition in February 2006):
The largest single J-REIT-owned property, acquired for ¥81.6 billion ($720.5 million)
Revenues and profits have increased for eight consecutive periods. Operating revenues forthe eighth period achieved ¥13.1 billion ($115.9 million), and operating profits reached¥6.2 billion ($55.0 million).
Portfolio of 50 high-quality off ice buildings as of September 30, 2005
Superior geographic and tenant diversity with the highest period-end occupancy rate of
98.6% since IPO
Collaboration with Mitsubishi Estate Co., Ltd., Tokio Marine & Nichido Fire InsuranceCo., Ltd., The Dai-ichi Mutual Life Insurance Company, and Mitsui & Co., Ltd.
Highest issuer credit ratings of any office REIT in the world: A+ from Standard & Poor’s, A1
from Moody’s Investors Service and AA from Rating and Investment Information, Inc. (R&I)
Healthy financial strategy that supports strong growth through additional issues of sharesand bonds: Conducted the largest issue of additional shares in J-REIT history, totaling
approximately ¥70 billion ($620.3 million) on April 26, 2005 (85,000 shares); Became
the first J-REIT to issue investment corporation bonds with a maturity of 20 years and apar-value of ¥10 billion ($88.3 million) on September 29, 2005.

CONTENTS
Financial Highlights
Top 10 Shareholders
Share Price Performance
Additional Issue of Shares
Portfolio Highlights
New Portfolio Properties
History after IPO

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

TopicsTo Our Shareholders
The Portfolio of Japan Real Estate
Investment Corporation
Overview of Portfolio Properties
Financial Section
Corporate Data

p. 8
p.10
p.14
p.17
p.25
p.38

Financial Highlights
For the Period from April 1, 2005 to September 30, 2005
Thousands of U.S. dollars(Note 1)Millions of yen
For the period from
April 1, 2005 to
September 30, 2005

For the period from
October 1, 2004 to
March 31, 2005

For the period from
April 1, 2004 to
September 30, 2004

13,119
6,226
5,510
5,509

10,747
4,701
4,121
4,120

10,151
4,358
3,831
3,830

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

8,978
7,526
21.1 times

7,131
5,762
19.7 times

Cash Distribution
Number of Shares
Dividend per Share (Yen/U.S. dollars)

5,509
345,400
15,951

4,120
260,400
15,824

Operating Revenues
Operating Profits
Income before Income Taxes
Net Income

For the period from
October 1, 2003 to
March 31, 2004

For the period from
April 1, 2003 to
September 30, 2003

For the period from
April 1, 2005 to
September 30, 2005

9,560
4,341
3,803
3,802

8,965
3,898
3,408
3,407

115,91055,006
48,682
48,674

6,672
5,488
20.8 times

6,455
5,301
20.4 times

5,950
4,801
15.2 times

79,326
66,49521.1 times

3,830
260,400
14,711

3,802
260,400
14,602

3,407
225,400
15,117

48,674345,400
140.92

Notes: 1. Amounts in U.S. dollars are included solely for the convenience of readers outside Japan. The rate of ¥113.19 = US$1.00, the foreign exchange
rate on September 30, 2005, has been used for translation. The inclusion of such amounts is not intended to imply that Japanese yen has beenor could be readily converted, realized or settled into U.S. dollars at that rate or any other rate.
2. NOI = (Property-Related Revenues – Property-Related Expenses) + Depreciation
3. FFO = Net Income – Gains (Losses) from Sales of Specified Assets + Depreciation
4. FFO Multiple = Share Price at End of the Respective Term ÷ FFO per Share (Annualized)(Annualized portion of the calculation given in note 4 assumes a fiscal period of 183 days for the period ended September 30, 2003, 183 days
for the period ended March 31, 2004, 183 days for the period ended September 30, 2004, 182 days for the period ended March 31, 2005 and183 days for the period ended September 30, 2005.)

Top 10 Shareholders
As of September 30, 2005
Shares% of Total Shares
Outstanding

Japan Trustee Services Bank, Ltd. (Shintaku Acc.) ...............................................................................
The Master Trust Bank of Japan, Ltd. (Shintaku Acc.) .........................................................................
Trust & Custody Services Bank, Ltd. (Toshin Acc.) ..............................................................................
Mitsubishi Estate Co., Ltd. ...................................................................................................................
NikkoCiti Trust and Banking Corporation (Toshin Acc.) .....................................................................
The Chugoku Bank, Ltd. ......................................................................................................................
Tokio Marine & Nichido Fire Insurance Co., Ltd. ................................................................................
The Yamanashi Chuo Bank, Ltd. ..........................................................................................................
The Joyo Bank, Ltd. ..............................................................................................................................
The Dai-ichi Mutual Life Insurance Company ......................................................................................

23,396
18,681
12,928
10,160
9,684
9,495
8,120
7,300
7,138
4,920

6.77%
5.41%
3.74%
2.94%
2.80%
2.75%
2.35%
2.11%
2.07%
1.42%

Share Price Performance

Share Price

PO Price

Company

TOPIX

220 %

180%

140 %

100 %

60 %

Sept Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec

2001

2002

2003

2004

2005

Additional Issue of Shares
Issuance date: ...................................................April 26, 2005
Issue price: ............................................¥826,000 ($7,297.46)
Number of shares issued: .....................................85,000 shares

Aggregate amount of issue price : ....¥70, 210 million ($620.3 million)
Commencement date
for the calculation of cash dividends: .........................April 1, 2005
Japan Real Estate Investment Corporation 1

Portfolio Highlights
TRENDS IN THE STATE OF PORTFOLIO MANAGEMENT
Number ofbuildings

Total numberof tenants(Note 1)

Total leasable
floor space

20
20
21
22
23
24
24
24
25
25
26
27
27
28
29
29
29
29
30
30
30
30
30
32
32
33
34
34
34
34
36
37
37
37
37
38
39
39
40
40
42
43
46
47
47
48
49
49
50

198
197
248
266
269
325
328
326
329
334
333
340
339
340
347
345
348
351
359
356
356
356
362
386
384
396
400
401
403
407
444
447
448
446
447
457
466
463
471
476
534
557
609
610
611
634
636
639
742

133,927m 2
136,381m 2
164,883m 2
171,734m 2
178,698m 2
201,934m 2
201,884m 2
201,580m 2
207,914m 2
207,914m 2
212,194m 2
215,928m 2
215,928m 2
220,720m 2
223,771m 2
223,771m 2
223,771m 2
223,771m 2
236,693m 2
236,702m 2
236,702m 2
237,897m 2
237,897m 2
246,062m 2
246,062m 2
251,631m 2
253,806m 2
260,003m 2
260,032m 2
260,211m 2
273,157m 2
281,171m 2
281,171m 2
281,155m 2
281,155m 2
286,860m 2
293,105m 2
293,116m 2
298,362m 2
298,362m 2
311,530m 2
322,429m 2
336,026m 2
345,333m 2
345,333m 2
350,973m 2
355,468m 2
355,458m 2
364,610m 2

September 2001
October 2001
November 2001
December 2001
January 2002
February 2002
March 2002
April 2002
May 2002
June 2002
July 2002
August 2002
September 2002
October 2002
November 2002
December 2002
January 2003
February 2003
March 2003
April 2003
May 2003
June 2003
July 2003
August 2003
September 2003
October 2003
November 2003
December 2003
January 2004
February 2004
March 2004
April 2004
May 2004
June 2004
July 2004
August 2004
September 2004
October 2004
November 2004
December 2004
January 2005
February 2005
March 2005
April 2005
May 2005
June 2005
July 2005
August 2005
September 2005

Occupancy
rate

130,000

180,000

230,000

330,000

280,000

380,000

94.6%
93.9%
94.7%
93.8%
94.1%
94.0%
94.0%
93.3%
93.6%
94.4%
94.3%
95.2%
95.3%
94.8% (Note 2)
95.5%
95.3%
95.2%
95.6%
94.4%
94.4%
94.9%
94.4%
94.9%
95.3%
95.1%
95.4%
92.5%
93.2%
92.5%
93.2%
94.8%
94.7%
94.7%
91.7%
92.7%
92.8%
93.6%
93.7%
94,1%
94.6%
94.8%
95.5%
97.6%
97.7%
97.9%
97.8%
97.9%
98.2%
98.6%

Total leasable
floor space (m2)
Total leasable
floor space
Occupancy rate

65.0

70.0

75.0

80.0

85.0

90.0

95.0

100.0

Occupancy rate (%)

Notes: 1. In the event that the same tenant occupies several buildings, the tenant is calculated as one tenant in the total number of tenants.
2. Occupancy rate of “Genki Medical Plaza” is not considered in the calculation of October 2002, because the property was acquiredat the end of that month, and its rent contracts started at the beginning of November 2002.

PORTFOLIO BREAKDOWNAs of September 30, 2005

Proper ties bygeographicr eg ion(Percentage based on
acquisition price)

Tenants byindustr yt ype

Other major cities(18.8%)( Percentage basedon leased area)

Steel and metals 1.7%
Temporary staff agency
1.8%
Ceramics 2.1%
Transport services/ Travel 2.2%
Textiles 2.6%

Others10.6%Serviceindustries
17.8%

Communications 2.8%
Tokyo metropolitan area,
excluding 23 wards(3.8%)

Tokyo 23 wards(77.5%)

Construction 3.2%
Pharmaceuticals 4.2%

Machinery 5.4%

Information
services
13.8%
Finance,insurance
11.6%

Real estate 5.8%

2 Japan Real Estate Investment Corporation

Retail and restaurants 6.6%

Electric devices 7.7%

New Portfolio Properties
PROPERTIES ACQUIRED DURING THE PERIOD ENDED SEPTEMBER 30, 2005
Notes: 1. In “Property summary,” concerning real estate and other assets of which the Company is partial owner through co-ownership or sectional ownership, the figures for “Sitearea”and“Floor area of building” represent total site area and total floor space for the entire building.
2. In “Leasing Conditions,” the figures represent information of the portion owned by the Company unless otherwise stated.

Nibancho Garden
Property Summary
Type of specified asset:
Acquisition price:
Acquisition date:
Location:
Intended use:
Site area:
Floor area of building:
Structure:
Completion:

Ownership (Note)¥14,700 million ($129.9 million)
April 1, 2005
Chiyoda-ku, Tokyo
Office space, retail stores, residences
11,003.87m2 (118,444.56ft2)
57,031.06m2 (613,876.63ft2)
Above ground: 14 floors
Below ground: 2 floors
April 2004

Note: Land: Ownership (7 lots: 3,554.33m2 )Building: Co-ownership of compartmentalized building units*Ownership of the building: 31.345%

Leasing Conditions (As of September 30, 2005)
Number of tenants:
Off ice area: 1 tenant / Residences: 1 tenantLeasable floor space:
Off ice area: 9,316m2 (100,276ft2)
Residences: 1,686m2 (18,148ft2)
Leased area:
Office area: 9,316m2 (100,276ft2)
Residences: 1,686m2 (18,148ft2)
Occupancy rate:
Office area: 100.0% / Residences: 100.0%
Property Acquisition Merits

Shinjuku

ShibuyaTokyo

Shinagawa

The Bancho area has a limited
supply of office building spacedespite strong demand from foreigncompanies, law firms andaccounting firms. Only one year
old, this property is unique for its
large scale and convenience with afour-minute walk to Yotsuya
Station and a two-minute walk to
Kojimachi Station.

Tenjin Crystal Building
Proper ty Summar y
Type of specif ied asset: Ownership
Acquisition price:¥5,000 million ($44.2million)
Acquisition date:June 1, 2005
Location:
Fukuoka, Fukuoka Prefecture
Intended use:
Off ice space, retail stores, parking area
Site area:
1,835.17m2 (19,753.59ft2)
Floor area of building: 10,432.04m2 (112,289.44ft2)
Structure:
Above ground: 14 floors
Below ground: 1 floor
Completion:
August 1993
Leasing Conditions (As of September 30, 2005)
Number of tenants:
25 tenants
Leasable f loor space:
5,640m2 (60,708ft2)
Leased area:
5,567m2 (59,923ft2)
Occupancy rate:
98.7%

Property Acquisition Merits

Tokyo
FukuokaSituated in the Tenjin area, the mostdeveloped retail district in Fukuoka
City, this building is readily
noticeable making it ideal for
attracting customer traffic forretailers. The property has a highgrade image with open spaces andthe latest facility specifications tomeet tenant needs.

Japan Real Estate Investment Corporation 3

Burex Kojimachi Building
Property Summary
Type of specified asset:
Acquisition price:
Acquisition date:
Location:
Intended use:
Site area:
Floor area of building:
Structure:
Completion:

Ownership¥7,000 million ($61.8 million)
July 29, 2005
Chiyoda-ku, Tokyo
Office space, retail stores
967.67m2 (10,415.90ft2)
6,526.64m2 (70,252.10ft2)
Above ground: 11 floors
Below ground: 1 floor
January 2005

Leasing Conditions (As of September 30, 2005)
Number of tenants:
1 tenant
Leasable floor space:
4,495m2 (48,384ft2)
Leased area:
4,495m2 (48,384ft2)
Occupancy rate:
100.0%

Property Acquisition Merits

Shinjuku
Tokyo

Shibuya

Shinagawa

Located in the Kojimachi and
Kioicho area, known for its culturaland academic atmosphere, thisproperty offers convenient access tofive subway lines and JR Yotsuya
Station. A new building completed
in January 2005, the property is
expected to contribute to stableprofitability of the portfolio due tothe conclusion of a ten-year fixedterm rent contract with the seller.

Tokyo Opera City Building
Property Summary
Type of specified asset:
Acquisition price:
Acquisition date:
Location:
Intended use:
Site area:
Floor area of building:
Structure:
Completion:

Ownership (Note)¥9,350 million ($82.6 million)
September 13, 2005
Shinjuku-ku, Tokyo
Office space, retail stores, concert hall, and art
museum18,236.94m2 (196,300.60ft2)
232,996.81m2 (2,507,954.36ft2)
Above ground: 54 floors
Below ground: 4 floors
July 1996

Note: Land: Ownership (share of co-ownership: 26.71% of 5,565.18m 2 [1 lot])
Building: Share of co-ownership of the compartmentalized building units*Ownership of the building: 8.368%

Leasing Conditions (As of September 30, 2005)
Number of tenants:
106 tenants
Leasable floor space:
9,244m2 (99,501ft2)
Leased area:
8,879m2 (95,573ft2)
Occupancy rate:
96.0%
Property Acquisition Merits

Shinjuku

ShibuyaTokyo

Shinagawa4 Japan Real Estate Investment Corporation

With its superior location in the major
Nishi-Shinjuku business district and a
direct connection to Hatsudai Station,
this building boasts the nation's
leading classical music concert hall,designed in cooperation with the New
National Theatre, Tokyo. This easily
recognizable landmark soars amidst
other high rises and provides highly
competitive amenities in line with its
stature.

PROPERTIES TO BE ACQUIRED ON FEBRUARY 24, 2006 AND ON APRIL 3, 2006

Kitanomaru Square
Property Summary
Type of specified asset:
Acquisition price:
Acquisition date:
Location:
Intended use:
Site area:
Floor area of building:
Structure:
Completion:

Trust beneficiary right in trust of real estate¥81,555.5 million ($720.5 million)
February 24, 2006 (Planned)
Chiyoda-ku, Tokyo
Office space, retail stores, residences
5,821.03m2 (62,656.98ft2)
58,969.18m2 (634,738.36ft2)
Above ground: 26 floors
Below ground: 2 floors
January 2006 (Planned)

Leasing Conditions on Planned Acquisition Date (Forecast as of September 30, 2005)
Number of tenants:
Office area and retail stores: 5 / Residences : TBD
Leasable floor space:
Office area and retail stores: 25,637m2 (275,954ft2)
Residences: 11,694m2 (125,873ft2)
Leased area:
Office area and retail stores: 25,637m2 (275,954ft2)
Residences: 11,694m2 (125,873ft2)
Occupancy rate:
Office area and retail stores: 100.0% /Residences: TBD
Property Acquisition Merits

Shinjuku

ShibuyaTokyo

ShinagawaThis image was created based on design drawings. Accordingly, differences may exist
between the image and the completed building.

Prestigiously located near the
Imperial Palace, the property boasts
access to three subway lines and arich natural environment. Scheduled
for completion in January 2006, thisnew building offers the utmost inconvenience and luxury to corporate
and residential customers. The
conclusion of fixed-term rent
contracts with office and shop
tenants will contribute to stablerevenue streams in the mid term.

Sanno Grand Building
Property Summary
Type of specified asset: Ownership (Note)
Acquisition price:¥10,200 million ($90.1 million) /¥10,700 million ($94.5 million)
Acquisition date:
January 31, 2005 / April 3, 2006 (Planned)
Location:
Chiyoda-ku, Tokyo
Intended use:
Office space
Site area:
3,663.93m2 (39,438.18ft2)
Floor area of building: 33,875.95m2 (364,637.34ft2)
Structure:
Above ground: 10 floors
Below ground: 3 floors
Completion:
September 1966
Note: Co-ownership 50.0% as of January 31, 2005 → 99.0% after April 3, 2006

Leasing Conditions (Of the Entire Building as of September 30, 2005)
Number of tenants:
49 tenants
Leasable floor space:
21,146m2 (227,613ft2)
Leased area:
20,428m2 (219,885ft2)
Occupancy rate:
96.6%
Property Acquisition Merits

Shinjuku

ShibuyaTokyo

Located in front of AkasakaMitsuke Station, this property hasvery convenient access to several
subway lines. It is also a landmark
building in the Akasaka area. Largescale renewal work has brought thebuilding up to the latest standards
for earthquake-proof construction
and interior specifications.

ShinagawaJapan Real Estate Investment Corporation 5

History after IPO
Since listing on the Tokyo Stock Exchange (“TSE”) as the first J-REIT in Japan, the Company has established afirm track record over the past eight fiscal periods. While sustaining stable management, the Company has realized
steady growth and taken the initiative as a J-REIT pioneer. The size of our portfolio in terms of aggregateacquisition price was ¥305.2 billion ($2,696.4 million) as of April 1, 2005. Accordingly, the Company achieved its
target of expanding the total amount for acquisition of properties to ¥300 billion ($2,650.4 million) by March 2006
approximately one year in advance. As of September 30, 2005, this balance grew further to ¥326.6 billion ($2,885.1
million).
Sep. 2001
Listed on TSE as first J-REIT
Sep. 2001
IPO
May 2002
First Follow-On(First for a J-REIT)
2
133,927m
2

Oct. 2003
Second Follow-On(126,748m )198 Tenants

2
201,884m
2

Apr. 2005
Third Follow-On
Largest addit ional issue of shares since listing of J-REIT(total subscription of ¥70.2 billion ($620.3 million))(189,815m )328 Tenants

Period Ended
Sep. 2001

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

Our forecasts for the seve

Period Ended
Mar. 2002

Jun. 2002
First Investment Corporation Bond Issue (First credit
rated issue for an investment corporation bond)
Apr. 2003
Second/Third Investment Corporation Bond Issue
Nov. 2004
Moody’s upgraded its credit rating from A2 to A1 with outlook of stable.
Dec. 2004
R& I issued an AA issuer credit rating.
Mar. 2005
Acquisition of preferred capital contribution certificates(First for a J-REIT)
Sep. 2005
Fourth Investment Corporation Bond Issue (First J-REIT ever to issue investment
corporation bonds without a negative pledge clause or other financial covenants)

6 Japan Real Estate Investment Corporation

Period Ended
Sep. 2002
Period Ended
Mar. 2003
Period Ended
Sep. 2003
Period Ended
Mar. 2004

94.6%
94.0%
Stable management

95.3%
OCCUPANCY RATE(Trend in operating conditions)

94.4%
95.1%

Listed on
TSE¥ 144.7
Billion(24)¥ 92.8Billion(20)¥ 164.3
Billion
(27)

94.8%

¥ 183.5
Billion(30)¥ 192.6
Billion(32)¥218.4
Billion(36)

93.6%¥239.8Billion
(39)

97.6%

98.6%

¥290.5
Billion(46)¥326.6
Billion(50)

TOTAL ACQUISITION PRICE (TOTAL PROPERTIES ACQUIRED)

Steady growth(Acquisitions)2
215,928m
2(205,796m )339 Tenants

2
236,693m
2(223,410m )359 Tenants

TOTAL LEASABLE FLOOR SPACE ( LEASED AREA )2
246,062m
2(233,925m )384 Tenants

2
273,157m
2(258,885m )444 Tenants

2
293,105m
2(274,411m )466 Tenants

2336,026m
2(327,962m )609 Tenants

2364,610m
2(359,620m )742 Tenants
Period Ended
Sep. 2004

Forward-looking initiatives
Listing and issuanceof shares

Period Ended
Mar. 2005
Period Ended
Sep. 2005( J-REIT management)

Credit ratings,
diversificationof investment methods,etc.

Japan Real Estate Investment Corporation 7

Topics
For the Period from April 1, 2005 to September 30, 2005

The Company continues to adopt proactive measures to reinforce its balance sheet including assets,
liabilities and shareholders’ equity with the aim of securing stable and sustainable growth.
AssetsDECISION TO ACQUIRE “KITANOMARUSQUARE” (SCHEDULED FOR ACQUISITIONIN FEBRUARY 2006)
Acquisition of a leading property:●●●

The largest single J-REIT-owned property,acquired for ¥81.6 billion ($720.5 million)
Rare opportunity to acquire a large-scale newly constructed property in central Tokyo
The Company’s asset portfolio is expected to exceed ¥400.0 billion ($3,533.9 million), on an acquisition price basis,
with the purchase of “Kitanomaru Square.”
PROPERTY DETAILS
Address:

1-13-12 Kudan-kita,
Chiyoda-ku, Tokyo
Site area:
5,821.03m2 (62,656.98ft2)
Floor area of the building: 58,969.18m2 (634,738.36ft2)
Structure:
Steel-framed and partially steelreinforced concrete
26 stories with 2 basements
Completion:
January, 2006 (Planned)

Kudan Kaikan

Expressway

Nippon Budokan
Kitanomaru Park
Uchibori-dori

Science Museum
National Museumof Modern Art
Chidorigafuchi

Imperial Residence

Note: This image was created based on design drawings. Accordingly,
differences may exist between the image and the completed building.

ACQUISITION DETAILS
Seller:
Palace View, Ltd.
Acquisition price:¥81,555.5million ($720.5 million)
Planned acquisition date:February 24, 2006

External facade (underconstruction)

8 Japan Real Estate Investment Corporation

View from Kitanomaru Square of Kitanomaru Park and Nippon
BudokanLiabilities

ISSUANCE OF THE FOURTHINVESTMENT CORPORATION
BONDS

●

●

DETAILS OF INVESTMENTCORPORATION BOND ISSUANCE
Issue amount:
Issue date:
Maturity:
Coupon rate:
Secured mortgage /guarantee:
Financial covenants:
Credit ratings:

Use of proceeds:¥10,000 million ($88.3 million)
September 29, 2005
20 years
2.56% per annum

The first J-REIT to issue investment corporation bonds
with a maturity of 20 years
The first J-REIT to issue investment corporation bonds
without a negative pledge clause or other financial
covenants

SUCCESSFUL EFFORTS TOENHANCE FINANCIAL
SOUNDNESS AND STABILITY

Unsecured / unguaranteed
No negative pledge clause orother financial covenants
A+ Standard & Poor’s Rating Services
A1 Moody’s Investors Service
AA R & I
Repayment of loans●●

Reduction in interest-bearing debt ratio on total assets
after issue of additional shares: (As of March 31, 2005:
49.3%; as of September 30, 2005: 34.3%)
Financing by investment corporation bonds (without anegative pledge clause or other financial covenants)
BALANCE SHEETOther Liabilities

InterestBearing
Debt

Shareholders’ Equity

20-Year Investment
Corporation Bonds
Additional Shares

Total
Assets

THE THIRD ISSUE OF
ADDITIONAL SHARES AFTERPUBLIC OFFERING

CapitalDETAILS OF ADDITIONALSHARE ISSUANCE
Number of shares issued:
85,000 shares
Issue price:¥826,000 ($7,297.46) per share
Aggregate amountof issue price:¥70,210 million ($620.3 million)
Launch date:
April 4, 2005
Pricing date:
April 18, 2005
Payment date:
April 26, 2005
Commencement date for the
calculation of cash dividends: April 1, 2005
Use of proceeds:
Acquisition of additional
specified assets and therepayment of loans●●

The largest issue of additional shares among J-REITs
Cash distributions per share were maintained.
(Previous period: ¥15,824 ($139.80) per share; Period
under review: ¥15,951 ($140.92) per share)

Japan Real Estate Investment Corporation 9

To Our Shareholders“ B i g D e a l”

10 Japan Real Estate Investment Corporation

The Company enjoyed significant advances across every key facetof its business activities. Operating revenues and profits increased
for the eighth consecutive period, and the Company decided toacquire the largest new property ever held by a J-REIT. In
addition to the issue of additional shares, the Company also
became the first J-REIT to issue 20-year investment corporation
bonds. Underpinned by this broad-based "Big Deal" scenario,
the Company continues to cement a leading position in its field.

In its eighth fiscal period, the six months ended September 30,
2005, Japan Real Estate Investment Corporation (“the Company”)
continued to advance from strength to strength.

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

During the period under review, the Japanese economy

to distribute dividends of approximately 100 percent of taxable

remained on track for a recovery, with inventory adjustments inincome, in order to enjoy the tax benefit available under Article 67-

IT-related fields primarily coming to a finish, strong capital

15 of the Special Taxation Measures Law of Japan applicable to J-

investment and resilient consumer spending. A number of

REITs. For the period under review, we declared a cash dividend

uncertainties, however, including steep crude oil prices, slowedof ¥15,951 ($140.92) per share.

down the pace of the economic recovery.

As of September 30, 2005, the Company’s total asset balance

The market for leased office space received support from awas ¥356.0 billion ($3,144.9 million), its net worth was ¥207.0

recovery in corporate earnings, and improved vacancy rates led tobillion ($1,828.6 million), or ¥599,254 ($5,294.23) per share, andsigns of improvement in rents at some office buildings in central

its interest-bearing debt was ¥122.0 billion ($1,077.8 million).

Tokyo. In areas surrounding metropolitan Tokyo and in regional
urban centers, however, overall business conditions remained difficult

ACQUISITIONS AND MANAGEMENTin spite of signs of improvements in the balance of supply andIn an increasingly competitive market, the Company uses its own

demand. Accordingly, time is still required for a full-fledged recovery.

information network to collect data on the sales of numerous

Regarding the property market, bad-debt write-offs byproperties. We have made acquisitions based on meticulous

financial institutions and the adoption of asset-impairment

examination of these data, and after determining optimal prices

accounting have helped sustain active property sales. At the samefrom many perspectives, including profit stability of the entire

time, in addition to Japanese Real Estate Investment Trusts (J-Company and expected rates of return.

REITs), such entities as private funds, pension funds andDuring the period under review, the Company not only

institutional investors are stepping up their acquisition of real

participated in fierce bidding competitions, but also focused on

estate, increasing competition in the acquisition of prime properties

leveraging its own information network to engage in one-on-one

in urban centers.

transactions. As of September 30, 2005, following four new

We would like to highlight some of the Company’s major

property acquisitions during the period totaling ¥36.1 billion

achievements during the eighth period, and discuss our strategies($318.5 million), the Company’s property portfolio consisted ofand forecasts for the ninth period and beyond.

50 office buildings with a total value of ¥326.6 billion ($2,885.1
million), net leasable floor area of 364,610 m2 (3,924,626 ft2),

OVERVIEW OF THE EIGHTH PERIOD

and a total of 742 tenants.

The Company recorded operating revenues of ¥13.1 billion ($115.9

The Company attained a record occupancy rate of 98.6%

million), up 22.1 percent from the previous period. Operating(as of September 30, 2005) by (1) acquiring top-level properties

profits rose 32.4 percent to ¥6.2 billion ($55.0 million). Afterand upgrading building facilities through optimal refurbishment

deducting expenses for interest payments on borrowings, fees forin order to maintain and improve functions; and (2) developing

the issue of additional shares and other administrative costs, income

finely tuned building management policies from the perspective

before income taxes increased 33.7 percent to ¥5.5 billion ($48.7

of tenants while undertaking vigorous sales activities.

million) and net income advanced 33.7 percent to ¥5.5 billion($48.7 million).
The Company’s policy with regard to profit appropriation is

The Company is working to reduce costs with a view tofurther enhancing profit stability. Our basic policy is to lower
property management fees and utility expenses by 5 percent within
Japan Real Estate Investment Corporation 11

the first three years of new property acquisition.

($26.5 million) on July 29, 2005 in relation to the acquisition of

Of the total number of properties acquired up to the end

the Burex Kojimachi Building, and of ¥9.0 billion ($79.5 million)of the sixth fiscal period (six months ended September 2004),

on September 13, 2005 in relation to the acquisition of the Tokyo

thirty-nine properties are subject to this cost reduction program.

Opera City Building.

We have already reduced costs of those properties by 12.9 percent

On September 30, 2005 the Company had total interest-

per year, based on the results of our seventh and eighth fiscal

bearing liabilities of ¥122.0 billion ($1,077.8 million), including

periods (October 2004 to September 2005).

¥16.0 billion ($141.4 million) in short-term loans (down ¥47.0
billion ($415.2 million) from the previous fiscal period), ¥24.0

FUND-RAISING ACTIVITIES

billion ($212.0 million) in the current portion of long-term

In addition to a solid performance in terms of leading indicators,

borrowings (up ¥24.0 billion ($212.0 million) from the previous

the “Big Deal” scenario was also played out in the area of fundfiscal period), ¥27.0 billion ($238.5 million) in long-term loans

raising activities. During the fiscal period under review, the(down ¥24.0 billion ($212.0 million) from the previous fiscal

Company issued additional shares through a third follow-on.

period), and outstanding investment corporation bonds with a par

Through the issue of 85,000 additional shares, the Company

value of ¥55.0 billion ($485.9 million) (up ¥10.0 billion ($88.3

raised ¥68.0 billion ($601.0 million) on April 26, 2005. As of

million) from the previous fiscal period).

September 30, 2005, the Company’s total shares outstanding
numbered 345,400, with a total shareholder capital of ¥201.5
billion ($1,779.9 million).
In addition, with the aim of diversifying fund procurement
methods, in July 2005 the Company registered its intention to conduct
a public issue of investment corporation bonds with a maximum
limit of ¥100 billion ($883.5 million). Based upon a subsequentassessment of risks related to future interest rates and further funds
procurement, and based upon the earlier registration, on September

The Company has received the following credit ratings inrecognition of its overall performance and potential.
Rating Agency

Issuer Credit RatingStandard & Poor’s

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

Moody’s Investors Service Rating: A1; Outlook: Stable
Rating and Investment
Information, Inc.

Rating: AA

29, 2005 the Company became the first J-REIT to issue 20-year

GENERAL MEETING OF SHAREHOLDERS HELD

investment corporation bonds for a value of ¥10 billion ($88.3 million).

The Company held its Third General Shareholders’ Meeting on
May 10, 2005. The meeting ended successfully, with theOverview of Issue Registration
Maximum limit of issue

Within ¥100 billion ($883.5 million)

Date of issue registration

July 28, 2005

Planned period of issue

From August 5, 2005 to August 4, 2007

Overview of 20-Year Investment Corporation Bonds
Name of Investment
Corporation Bonds

The Fourth Investment
Corporation Bonds (without anegative pledge clause or otherfinancial covenants)

Total amount of
the bond issue¥10 billion ($88.3 million)

Issue date

September 29, 2005

Maturity

20 years

Coupon rate

2.56% per annum

Subscription method

Public offering

Secured mortgage/guarantee

Unsecured/unguaranteed

Through the issue of additional shares, the Company repaid¥59.0 billion ($521.2 million) in short-term loans in May 2005.
In addition, the Company secured short-term loans of ¥3.0 billion

12 Japan Real Estate Investment Corporation

Company’s proposals passed in their original form with a majority
approval by the shareholders.
OUTLOOK FOR THE NINTH PERIOD AND BEYOND

Operating Environment
Despite expectations for a sustained recovery in the Japanese
economy, uncertainties remain concerning further increases in crude
oil prices and the direction of the U.S. and Chinese economies.
In the office building leasing market, vacancy rates in central
Tokyo are improving and a portion of office buildings has seen
increases in rents. The overall market also continues to show signsof recovery. At the same time, when the market is viewed on anationwide level, property selection is evolving in terms of location
and building features, with trends toward a bipolarization of themarket likely to grow stronger.
Meanwhile, tenants have stringent demands not only withrespect to location, building quality and facilities, but also forhigh-quality building management and value-added services. For
these reasons, tenants have become more and more discriminatingwhen selecting buildings. It is anticipated that providing services
that correctly and promptly reflect the needs of tenants and deliver
added value that differentiates their buildings from the competition
will become even more important for suppliers.

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

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

In the real estate market, properties will continue being($129.9 million), income before income taxes of ¥5.3 billion ($46.8

sold to settle bad debts and due to asset-impairment accounting

million), net income of ¥5.3 billion ($46.8 million), and cash

measures. In light of recent increases in demand, the Company

dividends of ¥15,300 ($135.17) per share.

believes that competition will further intensify for the acquisitionof prime properties.

The above estimates for the ninth and tenth periods areunderpinned by conservative assumptions based on the portfolioof 50 properties as of September 30, 2005, and the Kitanomaru

New Property Acquisitions
The Company plans to acquire Kitanomaru Square for ¥81.6
billion ($720.5 million) on February 24, 2006, slated to become
the largest new property acquisition ever by a J-REIT. Scheduled
for completion in January 2006, this building is located in aprestigious area next to the Imperial Palace in central Tokyo.
The building is particularly competitive not only in terms of its
exceptional location and accessibility, but also offers the latest
specifications sought after in an office building and the features
expected of a luxurious condominium for leasing. Occupancy
rates for offices and shops shall be 100% on the date of acquisition.
In addition, the Company will purchase additional share of
co-ownership in the Sanno Grand Building for ¥10.7 billion ($94.5
million) on April 3, 2006, raising its share of the co-ownership in
this property from 50.0% to 99.0%. Boasting superior location ina popular area branded as a business town, the area is also next togovernment and other public offices, supporting a strong demandfor offices, especially from extra-governmental organizations, andthe rental office market is stable. This property has sufficient facilities
to meet tenants’ needs, and is identified as having earthquake-proof
construction to meet the new mandated standards to withstandtemblors. As of September 30, 2005, the occupancy rate of theentire building stood at 96.6%
Performance Forecasts
In the six-month period from October 1, 2005 to March 31, 2006
(the ninth fiscal period) we forecast operating revenues of ¥13.8
billion ($121.9 million), income before income taxes of ¥5.5 billion($48.6 million), and net income of ¥5.5 billion ($48.6 million).
We plan to declare a dividend of ¥15,950 ($140.91) per share.
Our forecasts for the tenth fiscal period (April 1, 2006 to
September 30, 2006) are operating revenues of ¥14.7 billion

Square scheduled for settlement on February 24, 2006 and Sanno
Grand Building (additional share) on April 3, 2006. Theseestimates are also based on the 345,400 shares outstanding as of
September 30, 2005.
In closing, we would like to thank all the trustworthy
professionals whose continued dedication has led to the Company’s
successes. And to our shareholders, we extend our sincere gratitude
for your steadfast confidence and support.
Having advanced steadily forward to surmount the “First
Summit” in the seventh period, the Company truly experienced
a “Big Deal” scenario in the eighth period, marked by growth inoperating revenues and profits, the attainment of a record occupancy
rate on an increased number of prime properties, and the issue ofadditional shares, while also becoming the first J-REIT to issue
20-year investment corporation bonds and arranging the acquisitionof Kitanomaru Square.
The Company will press on steadily with well-balanced,
quality management to prosper in the next stage of the J-REIT
market, which has grown out of its infancy stage. We arecommitted to following a proactive strategy, seeking out the best
opportunities available. We ask for your continued support andunderstanding as we move ahead into greater prosperity.

Taketo Yamazaki

Executive Director of Japan Real Estate Investment Corporation

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

Japan Real Estate Investment Corporation 13

The Portfolio of Japan Real Estate Investment Corporation
As of September 30, 2005

PROPERTIES ROSTER
NumberName of building

Location

Type ofspecified asset

Acquisitiondate

Acquisition
price(¥ millions)

10/31/2002
5/31/2002
8/15/2002
9/25/2001
4/1/2005
7/29/2005
1/31/2005
8/1/2003
9/25/2001
7/22/2002
3/10/2005
3/15/2005
3/14/2003
9/10/2001
9/25/2001
9/1/2004
9/13/2005
9/25/2001
11/1/2004
9/10/2001
9/10/2001
3/24/2004
4/1/2004
11/22/2002
10/9/2003
11/30/2001
11/14/2003
4/1/2004
total
2/28/2005
9/25/2001
9/25/2001
8/2/2004

5,000 (1.5%)
9,520 (2.9%)
4,810 (1.5%)
27,267 (8.3%)
14,700 (4.5%)
7,000 (2.1%)
10,200 (3.1%)
7,200 (2.2%)
3,173 (1.0%)
5,250 (1.6%)
16,830 (5.2%)
5,353 (1.6%)
7,680 (2.4%)
4,859 (1.5%)
2,808 (0.9%)
7,830 (2.4%)
9,350 (2.9%)
2,738 (0.8%)5,500 (1.7%)
1,362 (0.4%)
5,123 (1.6%)
6,670 (2.0%)8,700 (2.7%)
4,885 (1.5%)
12,200 (3.7%)
34,600 (10.6%)
3,740
360
4,100 (1.3%)
8,500 (2.6%)
3,541 (1.1%)
1,728 (0.5%)
4,500 (1.4%)

3/31/2005
9/25/2001
10/11/2001

3,300
1,232
1,342

(1.0%)

total
1/28/2002
9/25/2001

2,574
3,000
3,375

(0.8%)(0.9%)(1.0%)

Tokyo 23 wards

I- 1
I- 2
● I- 3● I- 4● I- 5● I- 6● I- 7● I- 8● 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

Genki Medical PlazaMD Kanda Building
Kandabashi Park Building
Mitsubishi Soken Building
Nibancho Garden
Burex Kojimachi Building
Sanno Grand Building
Yurakucho Denki Building
Kodenmacho Shin-Nihonbashi Building
Burex Kyobashi Building
Ginza Sanwa Building
Ryoshin Ginza East Mirror Building
Aoyama Crystal Building
Shiba 2Chome Daimon Building
Cosmo Kanasugibashi Building
Shinwa Building
Tokyo Opera City Building
Takanawadai Building
Higashi Gotanda 1Chome Building
JAL Travel Building
Omori-Eki Higashiguchi Building
Nippon Brunswick Building
Yoyogi 1Chome Buildingda Vinci Harajuku
Jingumae Media Square Building
Shibuya Cross Tower
Ebisu Neonato

Iidabashi, Chiyoda-ku
Kandamitoshirocho, Chiyoda-ku
Kandanishikicho, Chiyoda-ku
Otemachi, Chiyoda-ku
Nibancho, Chiyoda-ku
Kojimachi, Chiyoda-ku
Nagatacho, Chiyoda-ku
Yurakucho, Chiyoda-ku
Nihonbashikodenmacho, Chuo-ku
Kyobashi, Chuo-ku
Ginza, Chuo-ku
Ginza, 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
Shimomeguro, Meguro-ku
Omori Kita, Ota-ku
Sendagaya, Shibuya-ku
Yoyogi, Shibuya-ku
Jingumae, Shibuya-ku
Jingumae, Shibuya-ku
Shibuya, Shibuya-ku
Ebisu, Shibuya-ku

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

I- 28
I- 29
● I- 30● I- 31

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

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

Ownership
Trust
Trust
Ownership

●
●

●
●

Tokyo metropolitan area excluding 23 wards

II- 1
II- 2

Hachioji Dai-ichi-Seimei Building
Saitama Urawa Building

Hachioji, Tokyo
Saitama, Saitama Prefecture

Ownership
Ownership

II- 3● II- 4Shin-Yokohama First Building
Kawasaki Isago Building

Yokohama, Kanagawa Prefecture
Kawasaki, Kanagawa Prefecture

Ownership
Trust

●
●

●

Other major cities

III-1
III-2
● III-3● III-4

Jozenji Park Building
Sendai Honcho Honma Building
Niigata Ishizuecho Nishi-Bandaibashi Building
Kanazawa Park Building

Sendai, Miyagi Prefecture
Sendai, Miyagi Prefecture
Niigata, Niigata Prefecture
Kanazawa, Ishikawa Prefecture

Ownership
Trust
Trust
Ownership

III-5
III-6
● III-7● III-8● III-9Kanazawa Minamicho Building
Nagoya Hirokoji Building
Nagoya Misono Building
Kyoto Shijo Kawaramachi Building
Sakaisujihonmachi Building

Kanazawa, Ishikawa Prefecture
Nagoya, Aichi Prefecture
Nagoya, Aichi Prefecture
Kyoto, Kyoto Prefecture
Osaka, Osaka Prefecture

Trust
Ownership
Ownership
Ownership
Ownership

●
●

●
●

III-10 Midosuji Daiwa Building

Osaka, Osaka Prefecture

III-11
III-12● III-13● III-14● III-15

Kobe, Hyogo Prefecture
Hiroshima, Hiroshima Prefecture
Fukuoka, Fukuoka Prefecture
Fukuoka, Fukuoka Prefecture
Fukuoka, Fukuoka Prefecture●●●

Kobe Itomachi Building
NHK Hiroshima Broadcasting Center Building
Tosei Tenjin Building
Tenjin Crystal Building
Hinode Tenjin Building

14 Japan Real Estate Investment Corporation

Trust
Trust
Ownership
Ownership
OwnershipTrust

1/31/2005
9/25/2001
9/25/2001
2/28/2002
3/3/2003
total
9/25/2001
9/10/2001
8/8/2003
12/20/2001
9/25/2001
12/26/2003
total
9/25/2001
2/28/2002
total
9/25/2001
3/25/2004
9/25/2001
6/1/2005
9/10/2001
total

1,000 (0.3%)
2,924 (0.9%)
1,010 (0.3%)
2,880
1,700
4,580 (1.4%)
1,331 (0.4%)
14,533 (4.5%)
1,865 (0.6%)
2,650 (0.8%)
2,264
1,900
4,164 (1.3%)
6,934
7,380
14,314 (4.4%)
1,436 (0.4%)
1,320 (0.4%)
1,550 (0.5%)5,000 (1.5%)
3,657 (1.1%)
326,560 (100.0%)

Percentage ofownership of thebuilding (%)

Completion

Appraisal value
at the end of period(¥ millions)

100
100
56.76
100
31.345
100
50
10.78
100
100
70.95
100
100
100
100
100
8.368
100
100
100
100
100
100
100
100
100

1985
1998
1993
1970
2004
2005
1966
1975
1991
2002
1982
1998
1982
1984
1992
1989
1996
1991
2004
1991
1989
1974
2003
1987
1998
1976

6,200
8,460
4,920
30,40015,1006,880
10,900
7,230
3,320
5,940
16,900
4,540
7,920
5,900
3,110
7,830
9,350
2,590
6,130
1,480
5,390
7,570
9,300
5,660
13,48038,1004,791m2
6,269m2
3,687m2
18,006m2
9,316m2
4,495m2
10,573m2
4,694m2
3,897m2
4,279m2
4,329m2
2,875m2
4,916m2
9,643m2
4,062m2
6,197m2
9,244m2
4,067m2
5,205m2
3,383m2
7,708m2
7,347m2
7,772m2
3,109m2
5,558m2
29,828m2(51,570ft2)(67,479ft2)(39,686ft2)(193,815ft2)(100,276ft2)(48,384ft2)(113,807ft2)(50,526ft2)(41,947ft2)(46,059ft2)(46,597ft2)(30,946ft2)(52,915ft2)(103,796ft2)(43,723ft2)(66,704ft2)(99,501ft2)(43,777ft2)(56,026ft2)(36,414ft2)(82,968ft2)(79,082ft2)(83,657ft2)(33,465ft2)(59,826ft2)(321,066ft2)

4,791m2
6,269m2
3,687m2
18,006m2
9,316m2
4,495m2
10,214m2
4,694m2
3,897m2
4,279m2
4,329m2
2,875m2
4,916m2
9,559m2
4,062m2
6,197m2
8,879m2
4,067m2
5,205m2
3,383m2
7,708m2
7,298m2
7,772m2
3,109m2
5,558m2
29,675m2(51,570ft2)(67,479ft2)(39,686ft2)(193,815ft2)(100,276ft2)(48,384ft2)(109,942ft2)(50,526ft2)(41,947ft2)(46,059ft2)(46,597ft2)(30,946ft2)(52,915ft2)(102,892ft2)(43,723ft2)(66,704ft2)(95,573ft2)(43,777ft2)(56,026ft2)(36,414ft2)(82,968ft2)(78,555ft2)(83,657ft2)(33,465ft2)(59,826ft2)(319,419ft2)

1
2
7
4
1
1
49
15
5
1
13
8
8
27
8
9
106
1
4
1
19
18
1
5
9
51

221
293
172
1,063
484
56
465
281
150
150
366
98
250
312
131
259
36
115
214
86
255
332
283
200
373
1,478

(1.7%)(2.2%)(1.3%)(8.1%)(3.7%)(0.4%)(3.5%)(2.1%)(1.1%)(1.1%)(2.8%)(0.8%)(1.9%)(2.4%)(1.0%)(2.0%)(0.3%)(0.9%)(1.6%)(0.7%)(1.9%)(2.5%)(2.2%)(1.5%)(2.8%)(11.3%)

12.29939
29.253305
100
100
100

1994
1997
1987
1990
1989

4,450
9,100
3,410
1,450
4,580

2,462m2
10,929m2
7,114m2
2,186m2
5,797m2(26,501ft2)(117,639ft2)(76,574ft2)(23,530ft2)(62,398ft2)

2,462m2
10,929m2
6,732m2
2,186m2
5,797m2(26,501ft2)(117,639ft2)(72,463ft2)(23,530ft2)(62,398ft2)

3
17
9
9
8

128
416
169
65
203

(1.0%)(3.2%)(1.3%)(0.5%)(1.5%)

50.6611

1996

3,300

6,336m2(68,200ft2)

6,037m2(64,982ft2)

36

162

(1.2%)

100
100
100

1990
1992
1990

2,360
1,640
3,210

4,510m2
6,925m2
6,831m2(48,545ft2)(74,540ft2)(73,528ft2)

4,510m2
6,434m2
6,496m2(48,545ft2)(69,255ft2)(69,922ft2)

16
8
12

136
105
152

(1.0%)(0.8%)(1.2%)

50
93.39
100

1993
1991
1984

1,040
3,030
729

2,518m2
5,829m2
4,383m2(27,104ft2)(62,743ft2)(47,178ft2)

2,400m2
5,756m2
4,234m2(25,833ft2)(61,957ft2)(45,574ft2)

18
16
10

64
150
82

(0.5%)(1.1%)(0.6%)

89
100
100
100
100

1991
1987
1987
1991
1982

5,420
985
15,3001,860
2,020

21,343m2
3,794m2
21,631m2
3,470m2
6,800m2(229,734ft2)(40,838ft2)(232,834ft2)(37,351ft2)(73,195ft2)

20,514m2
3,622m2
21,431m2
3,470m2
6,800m2(220,811ft2)(38,987ft2)(230,681ft2)(37,351ft2)(73,195ft2)

66
15
29
9
31

543
76
769
114
140

(4.1%)(0.6%)(5.9%)(0.9%)(1.1%)

100

1992

4,230

11,574m2(124,581ft2)

11,335m2(122,009ft2)

17

185

(1.4%)

100
100
27.085
100
100
76.18
—

1991
1989
1994
1992
1993
1987
—

14,100
945
1,480
1,340
4,970
3,480
339,029

20,450m2
3,478m2
5,477m2
4,000m2
5,640m2
5,860m2
364,610m2(220,122ft2)(37,437ft2)(58,954ft2)(43,056ft2)(60,708ft2)(63,076ft2)(3,924,626ft2)

20,450m2
3,212m2
5,401m2
3,924m2
5,567m2
5,657m2
359,620m2(220,122ft2)(34,574ft2)(58,136ft2)(42,238ft2)(59,923ft2)(60,891ft2)(3,870,914ft2)

25
17
12
20
25
12
742

Total leasable
floor space

Leased area

Total
number oftenants

Revenue fromleasing operations(¥ millions)670(5.1%)
68(0.5%)
153(1.2%)
101(0.8%)
150(1.1%)
176(1.3%)
13,119 (100.0%)

Japan Real Estate Investment Corporation 15

MAJOR TENANTS ROSTER
Rank

1
2
3
4
5
6
7
8
9
10

Name of tenant

Name of building

Leased area

Mitsubishi Research Institute, Inc.
Mitsubishi Soken Building
14,529m2 (156,389ft2)
The Dai-ichi Mutual Life Insurance Company Midosuji Daiwa Building (also includes 8 other buildings) 10,387m2 (111,805ft2)
Ito Yokado Co., Ltd.
Nibancho Garden
9,316m2 (100,276ft2)
Space Design, Inc.
Burex Kojimachi Building (also includes 1 other building) 8,774m2 (94,442ft2)
Yamano Gakuen
Yoyogi 1Chome Building
7,772m2 (83,657ft2)
TOTO Ltd.
Midosuji Daiwa Building (also includes 1 other building) 6,800m2 (73,195ft2)
Toshiba Solutions Corporation
Takanawadai Building (also includes 2 other buildings)
5,331m2 (57,382ft2)
Asahi Kasei Pharma Corporation
MD Kanda Building
5,144m2 (55,370ft2)
Tokyo Kenbikyoin Foundation
Genki Medical Plaza
4,791m2 (51,570ft2)
Daiwabo Co., Ltd.
Midosuji Daiwa Building (also includes 1 other building) 4,490m2 (48,330ft2)

Percent of totalleased area

4.0%
2.9%
2.6%
2.4%
2.2%
1.9%
1.5%
1.4%
1.3%
1.2%

Note: Upon the acquisition of the Kitanomaru Square scheduled for February 24, 2006, leasing area for planned tenants includes 16,729 m2 (180,069ft2) for Banyu
Pharmaceutical Co., Ltd. and 8,446 m2 (90,912ft2) for FAST RETAILING CO., LTD.

LOCATIONS OF PORTFOLIO PROPERTIES
II-1-II-4: Tokyo metropolitan area
exc luding 23 wards

III-1-III-15: O ther major cities

II-2
II-1

III-1 III-2
III-4 III-5
III-8 III-7
III-6
III-12 III-11
III-9
III-13 III-14 III-10
III-15

II-4

III-3
II-3

I- 1- I- 31: Tokyo
23 wards

I-29

I-30
I-31

I-1
I-2
I-6
I-16
I-3
I-22 I-5
I-9
I-17
I-7 I-4
I-10
I-23 I-24
I-8
I-25
I-11
I-12
I-13
I-26
I-27
I-14
I-15
I-18
I-20

I-28

I-19

I-21

Tokyo Station

16 Japan Real Estate Investment Corporation

Overview of Portfolio Properties

As of September 30, 2005

Note: Concerning real estate and other assets of which the Company is partial owner through co-ownership or sectional ownership, the figures for “Site area” and “Floor area ofbuilding” represent total site area and total floor space for the entire building.

Genki Medical PlazaMD Kanda Building● I-1

Location :Site area :Floor area of building :Structure :Completion :Location :Site area :Floor area of building :Structure :Completion :Chiyoda-ku, Tokyo
1,052.80m2 (11,332.23ft2)
6,722.02m2 (72,355.15ft2)
Above ground: 8 floors
Below ground: 1 floor
September 1985

● I-2

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

Mitsubishi Soken
Building

● I-3

● I-4

Chiyoda-ku, Tokyo
1,218.56m2 (13,116.46ft2)
9,370.25m2 (100,860.43ft2)
Above ground: 10 floors
Below ground: 1 floor
July 1993

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

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

Chiyoda-ku, Tokyo
11,003.87m2 (118,444.56ft2)
57,031.06m2 (613,876.63ft2)
Above ground: 14 floors
Below ground: 2 floors
April 2004

Chiyoda-ku, Tokyo
3,441.35m2 (37,042.35ft2)
26,372.92m2 (283,875.47ft2)
Above ground: 15 floors
Below ground: 2 floors
July 1970

Burex Kojimachi
Building
● I-6

● I-5

Location:
Site Area:
Floor area of building :Structure :Chiyoda-ku, Tokyo
1,085.83m2 (11,687.77ft2)
8,185.11m2 (88,103.71ft2)
Above ground: 10 floors
February 1998

Location:
Site Area:
Floor area of building :Structure :Completion :Chiyoda-ku, Tokyo
967.67m2 (10,415.90ft2)
6,526.64m2 (70,252.10ft2)
Above ground: 11 floors
Below ground: 1 floor
January 2005

Sanno Grand
Building

Yurakucho Denki
Building

● I-7

● I-8

Chiyoda-ku, Tokyo
3,663.93m2 (39,438.18 ft2)
33,875.95m2 (364,637.34 ft2)
Above ground: 10 floors
Below ground: 3 floors
September 1966

Location :Site area :Floor area of building :Structure :Completion :Chiyoda-ku, Tokyo
5,749.91m2 (61,891.46ft2)
70,287.65m2 (756,569.24ft2)
Above ground: 20 floors
Below ground: 4 floors
September 1975
Japan Real Estate Investment Corporation 17

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

Kodenmacho ShinNihonbashi Building

Burex Kyobashi
Building● I-9● I-10Chuo-ku, Tokyo
773.28m2 (8,323.51ft2)
5,822.88m2 (62,676.90ft2)
Above ground: 9 floors
Below ground: 1 floor
November 1991

Location :Site area :Floor area of building :Structure :Completion :Ginza Sanwa Building

Ryoshin Ginza East
Mirror Building● I-11● I-12Chuo-ku, Tokyo
1,119.27m2 (12,047.71ft2)
8,851.00m2 (95,271.28 ft2)
Above ground: 9 floors
Below ground: 2 floors
October 1982

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

Aoyama Crystal
Building

Completion :Location :Site area :Floor area of building :Structure :Completion :Minato-ku, Tokyo
989.30m2 (10,648.73ft2)
8,094.36m2 (87,126.88ft2)
Above ground: 10 floors
Below ground: 4 floors
December 1982

Chuo-ku, Tokyo
615.25m2 (6,622.49ft2)
4,104.71m2 (44,182.69ft2)
Above ground: 8 floors
Below ground: 1 floor
October 1998

Shiba 2Chome
Daimon Building● I-13

Location :Site area :Floor area of building :Structure :Chuo-ku, Tokyo
756.03m2 (8,137.83ft2)
5,470.54m2 (58,884.35ft2)
Above ground: 8 floors
Below ground: 1 floor
February 2002

● I-14

Location :Site area :Floor area of building :Structure :Completion :Minato-ku, Tokyo
2,820.90m2 (30,363.89ft2)
16,235.10m2 (174,752.99ft2)
Above ground: 8 floors
Below ground: 2 floors
March 1984

Cosmo Kanasugibashi
Building

Shinwa Building● I-15● I-16

Minato-ku, Tokyo
758.54m2 (8,164.85ft2)
5,420.93m2 (58,350.35ft2)
Above ground: 9 floors
Below ground: 1 floor
March 1992

18 Japan Real Estate Investment Corporation

Location :Site area :Floor area of building :Structure :Completion :Shinjuku-ku, Tokyo
822.00m2 (8,847.93ft2)
8,291.69m2 (89,250.92ft2)
Above ground: 10 floors
Below ground: 1 floor
November 1989

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

Tokyo Opera City
Building

Takanawadai
Building● I-17● I-18

Shinjuku-ku, Tokyo
18,236.94m2 (196,300.60ft2)
232,996.81m2 (2,507.954.36ft2)
Above ground: 54 floors
Below ground: 4 floors
July 1996

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

JAL Travel Building● I-19● I-20Shinagawa-ku, Tokyo
1,539.95m2 (16,575.87ft2)
6,460.39m2 (69,538.99ft2)
Above ground: 8 floors
July 2004

Location :Site area :Floor area of building :Structure :Completion :● I-21

Completion :Location :Site area :Floor area of building :Structure :Completion :Ota-ku, Tokyo
2,199.30m2 (23,673.05ft2)
14,095.34m2 (151,720.83ft2)
Above ground: 11 floors
Below ground: 2 floors
July 1989

Meguro-ku, Tokyo
1,401.52m2 (15,085.82ft2)
5,269.58m2 (56,721.23ft2)
Above ground: 6 floors
Below ground: 1 floor
September 1991

Nippon Brunswick
Building

Omori-Eki
Higashiguchi Building

Location :Site area :Floor area of building :Structure :Shinagawa-ku, Tokyo
1,416.17m2 (15,243.51ft2)
5,762.70m2 (62,029.13ft2)
Above ground: 13 floors
January 1991

● I-22

Location :Site area :Floor area of building :Structure :Completion :Shibuya-ku, Tokyo
1,497.52m2 (16,119.16ft2)
11,957.38m2 (128,708.04ft2)
Above ground: 9 floors
Below ground: 2 floors
March 1974

Yoyogi 1Chome
Buildingda Vinci Harajuku● I-23● I-24

Shibuya-ku, Tokyo
1,755.75m2 (18,898.72ft2)
10,778.10m2 (116,014.39ft2)
Above ground: 14 floors
Below ground: 1 floor
October 2003

Location :Site area :Floor area of building :Structure :Completion :Shibuya-ku, Tokyo
839.66m2 (9,038.02ft2)
4,359.20m2 (46,921.99ft2)
Above ground: 7 floors
Below ground: 2 floors
December 1987
Japan Real Estate Investment Corporation 19

Location :Site area :Floor area of building :Structure :Completion :Location :Site area :Floor area of building :Structure :Completion :Jingumae Media
Square Building

Shibuya Cross Tower● I-25● I-26

Shibuya-ku, Tokyo
2,261.68m2 (24,344.50ft2)
9,420.42m2 (101,400.46ft2)
Above ground: 9 floors
Below ground: 2 floors
March 1998

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

Harmony Tower● I-27● I-28

Shibuya-ku, Tokyo
5,005.70m2 (53,880.85ft2)
36,598.38m2 (393,941.30ft2)
Above ground: 18 floors
Below ground: 2 floors
October 1994

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

Otsuka HigashiIkebukuro Building

Completion :Location :Site area :Floor area of building :Structure :Completion :Toshima-ku, Tokyo
2,121.39m2 (22,834.43ft2)
9,531.28m2 (102,593.74ft2)
Above ground: 8 floors
Below ground: 1 floor
November 1987

Nakano-ku, Tokyo
10,020.52m2 (107,859.88 ft2)
72,729.31m2 (782,851.02ft2)
Above ground: 29 floors
Below ground: 2 floors
March 1997

Ikebukuro 2Chome
Building● I-29Location :Site area :Floor area of building :Structure :Shibuya-ku, Tokyo
5,153.45m2 (55,471.22ft2)
61,862.33m2 (665,879.93ft2)
Above ground: 32 floors
Below ground: 3 floors
April 1976

● I-30Location :Site area :Floor area of building :Structure :Completion :Toshima-ku, Tokyo
397.26m2 (4,276.07ft2)
3,157.51m2 (33,987.12ft2)
Above ground: 9 floors
Below ground: 1 floor
May 1990

Ikebukuro YS
Building

Hachioji Dai-ichiSeimei Building● I-31● II-1

Toshima-ku, Tokyo
1,384.56m2 (14,903.27ft2)
7,464.64m2 (80,348.64ft2)
Above ground: 8 floors
Below ground: 1 floor
December 1989

20 Japan Real Estate Investment Corporation

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

Hachioji, Tokyo
2,989.33m2 (32,176.85ft2)
18,329.98m2 (197,302.07ft2)
Above ground: 12 floors
Below ground: 1 floor
July 1996

Location :Site area :Floor area of building :Structure :Completion :Saitama Urawa
Building

Shin-Yokohama First
Building● II-2● II-3

Saitama, Saitama Prefecture
1,533.06m2 (16,501.70ft2)
6,258.59m2 (67,366.84ft2)
Above ground: 8 floors
March 1990

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

Jozenji Park Building● II-4● III- 1

Kawasaki, Kanagawa Prefecture
1,594.50m2 (17,163.04ft2)
9,623.83m2 (103,589.94ft2)
Above ground: 12 floors
Below ground: 1 floor
December 1990

Location:
Site Area:
Floor area of building:
Structure:
Completion:● III- 2

Sendai, Miyagi Prefecture
1,437.47m2 (15,472.78ft2)
8,247.50m2 (88,775.27ft2)
Above ground: 11 floors
November 1991

● III- 3

Location :Site area :Floor area of building :Structure :Completion :Location :Site area :Floor area of building :Structure :Completion :Sendai, Miyagi Prefecture
1,566.68m2 (16,863.59 ft2)
7,648.33m2 (82,325.86ft2)
Above ground: 8 floors
Below ground: 1 floor
January 1993

Niigata Ishizuecho
Nishi-Bandaibashi
Building

Sendai Honcho
Honma Building

Location :Site area :Floor area of building :Structure :Completion :Yokohama, Kanagawa Prefecture
1,528.00m2 (16,447.24ft2)
10,403.41m2 (111,981.26ft2)
Above ground: 10 floors
Below ground: 2 floors
April 1992

Niigata, Niigata Prefecture
957.90m2 (10,310.74ft2)
6,410.33m2 (69,000.15ft2)
Above ground: 8 floors
Below ground: 1 floor
November 1984

Kanazawa Park
Building

Kanazawa Minamicho
Building● III- 4● III- 5

Kanazawa, Ishikawa Prefecture
6,642.71m2 (71,501.47ft2)
43,481.20m2 (468,027.29ft2)
Above ground: 12 floors
Below ground: 2 floors
October 1991

Location :Site area :Floor area of building :Structure :Completion :Kanazawa, Ishikawa Prefecture
887.17m2 (9,549.41ft2)
5,163.19m2 (55,576.06ft2)
Above ground: 9 floors
March 1987

Japan Real Estate Investment Corporation 21

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

Nagoya Misono
Building● III- 6● III- 7

Nagoya, Aichi Prefecture
4,095.81m2 (44,086.89ft2)
33,377.73m2 (359,274.55ft2)
Above ground: 18 floors
Below ground: 2 floors
May 1987

Location :Site area :Floor area of building :Structure :Completion :Kyoto Shijo
Kawaramachi Building

Sakaisujihonmachi
Building● III- 8● III- 9

Kyoto, Kyoto Prefecture
1,471.57m2 (15,839.83ft2)
9,701.04m2 (104,421.02ft2)
Above ground: 9 floors
Below ground: 1 floor
November 1982

Location :Site area :Floor area of building :Structure :Completion :● III-10

Completion :Location :Site area :Floor area of building :Structure :Completion :Osaka, Osaka Prefecture
3,044.65m2 (32,772.31ft2)
31,213.27m2 (335,976.52ft2)
Above ground: 15 floors
Below ground: 2 floors
September 1991

Osaka, Osaka Prefecture
2,036.22m2 (21,917.67ft2)
17,145.59m2 (184,553.42ft2)
Above ground: 13 floors
Below ground: 2 floors
October 1992

Kobe Itomachi
Building

Midosuji Daiwa
Building

Location :Site area :Floor area of building :Structure :Nagoya, Aichi Prefecture
805.04m2 (8,665.37ft2)
5,348.00m2 (57,565.34ft2)
Above ground: 7 floors
Below ground: 1 floor
September 1991

● III-11

Location :Site area :Floor area of building :Structure :Completion :Kobe, Hyogo Prefecture
808.55m2 (8,703.15ft2)
4,894.09m2 (52,679.50ft2)
Above ground: 10 floors
September 1989

NHK Hiroshima
Broadcasting Center
Building

Tosei Tenjin
Building● III-12● III-13

Hiroshima, Hiroshima Prefecture
3,296.46m2 (35,482.77ft2)
35,217.28m2 (379,075.28ft2)
Above ground: 23 floors
Below ground: 2 floors
August 1994

22 Japan Real Estate Investment Corporation

Location :Site area :Floor area of building :Structure :Completion :Fukuoka, Fukuoka Prefecture
1,221.31m2 (13,146.06ft2)
5,588.57m2 (60,154.81ft2)
Above ground: 8 floors
March 1992

Tenjin Crystal
Building

Hinode Tenjin
Building● III-14

Location :Site Area:
Floor area of building :Structure :Completion :Fukuoka, Fukuoka Prefecture
1,835.17m2 (19,753.59ft2)
10,432.04m2 (112,289.44ft2)
Above ground: 14 floors
Below ground: 1 floor
August 1993

● III-15

Location :Site area :Floor area of building :Structure :Completion :Fukuoka, Fukuoka Prefecture
1,452.15m2 (15,630.80ft2)
12,527.07m2 (134,840.13ft2)
Above ground: 10 floors
Below ground: 2 floors
August 1987

Japan Real Estate Investment Corporation 23

24 Japan Real Estate Investment Corporation

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

p.25
p.26
p.28
p.28
p.29
p.30
p.37

Selected Financial Data
Thousands of
U.S. dollars(Note 1)Millions of yen

Operating Revenues
Operating Expenses
Operating Profits
Income before Income Taxes
Net Income
Total Assets
Interest-Bearing Liabilities
Total Shareholders’ Equity
Shareholders’ Capital
Number of Shares
Total Shareholders’ Equity per Share(Yen/U.S. dollars)
Cash Distribution
Dividend Payout Ratio
Dividend Per Share (Yen/U.S. dollars)
Net Operating Income (NOI)
Funds from Operations (FFO)
Return on Assets (ROA) (Note 2)
Return on Equity (ROE) (Note 3)
EOP Equity Ratio (Note 4)
EOP Interest-Bearing Debt Ratioon Total Assets (Note 5)
FFO Multiple
Debt Service Coverage Ratio (Note 6)
Notes: 1.
2.
3.

4.
5.
6.

For the period from
April 1, 2005 to
September 30, 2005

For the period from
October 1, 2004 to
March 31, 2005

For the period from
April 1, 2004 to
September 30, 2004

¥ 13,119
6,893
6,226
5,510
5,509
355,968
122,000
206,982
201,472
345,400¥ 10,747
6,046
4,701
4,121
4,120
322,358
159,000
137,569
133,448
260,400¥ 10,151
5,792
4,358
3,831
3,830
257,372
99,000137,279
133,448
260,400

For the period from
October 1, 2003 to
March 31, 2004

¥

9,560
5,219
4,341
3,803
3,802
244,523
87,000137,250
133,448
260,400

For the period from
April 1, 2003 to
September 30, 2003

¥

8,965
5,067
3,898
3,408
3,407
209,581
76,000115,559
112,152
225,400

For the period from
April 1, 2005 to
September 30, 2005

$115,910
60,90355,006
48,682
48,674
3,144,874
1,077,833
1,828,628
1,779,952
345,400

599,254528,299
527,185
527,077
512,688
5,294.23
5,509
4,120
3,830
3,802
3,407
48,674
100%
99.9%
99.9%
99.9%
99.9%
100%
15,951
15,824
14,711
14,602
15,117140.92
8,978
7,131
6,672
6,455
5,950
79,326
7,526
5,762
5,488
5,301
4,801
66,495
1.6%
1.4%
1.5%
1.6%
1.7%
1.6%
(3.2% annualized) (2.9% annualized) (3.0% annualized) (3.2% annualized) (3.3% annualized) (3.2% annualized)
2.8%
3.0%
2.8%
2.8%
3.0%
2.8%
(5.6% annualized) (6.0% annualized) (5.6% annualized) (5.7% annualized) (5.9% annualized) (5.6% annualized)
58.1%
42.7%
53.3%
56.1%
55.1%
58.1%
34.3%
21.1 times
14.0 times

49.3%
19.7 times
11.2 times

38.5%
20.8 times
12.7 times

35.6%
20.4 times
13.9 times

36.3%
15.2 times
12.6 times

34.3%
21.1 times
14.0 times

Amounts in U.S. dollars are included solely for the convenience of readers outside Japan. The rate of ¥113.19 = US$1.00, the foreign exchange rate on
September 30, 2005, 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 Worth during the period(Annualized portions of the calculations given in notes 2 and 3 above assume a fiscal period of 183 days for the period ended September 30, 2003, 183
days for the period ended March 31, 2004, 183 days for the period ended September 30, 2004, 182 days for the period ended March 31, 2005 and 183
days for the period ended September 30, 2005.)
EOP Equity Ratio = (Net Worth at end of period ÷ Total Assets at end of period) x 100
EOP Interest-Bearing Debt Ratio on Total Assets = (Interest-Bearing Debt at end of period ÷ Total Assets at end of period) x 100
Debt Service Coverage Ratio = Net Income before Interest, Taxes, Depreciation and Amortization ÷ Interest Expenses

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

Balance Sheets
As of September 30, 2005 and March 31, 2005

Thousands of yen

U.S. dollars (Note 1)

As of September
30, 2005

As of March
31, 2005

As of September
30, 2005¥ 26,939,579¥ 29,361,925$ 238,003,172

Rental receivables

85,37335,275754,243

Consumption tax refundable

254,084

422,2032,244,758

Other current assets

649,529

200,129

5,738,392

27,928,565

30,019,532

246,740,565

Land

224,595,204

206,679,886

1,984,231,862

Buildings and structures

109,182,708

90,980,987

964,596,771

Machinery and equipment

1,732,022

1,538,663

15,301,897

Tools, furniture and fixtures

18,142

18,142160,279

Construction in progress

324,357

5,500

2,865,597

335,852,433

299,223,178

2,967,156,406(11,788,363)(9,783,957)(104,146,681)

324,064,070

289,439,221

2,863,009,725

Investment securities

958,798

956,000

8,470,691

Deposits

15,10914,234133,481Long-term prepaid expenses

10,90917,622

96,383

2,112,907

1,083,390

18,666,905

Easement

828,095

828,095

7,315,976

Deferred investment corporation bond issuance costs

49,860—440,498—599—¥355,968,313¥322,358,693$3,144,874,224

ASSETS
Current Assets:
Cash and bank deposits

Total current assets
Property and Equipment, at Cost:

SubtotalLess accumulated depreciation
Net property and equipment
Investments and Other Assets:

Leasehold rights

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

26 Japan Real Estate Investment Corporation

Thousands of yen

As of September
30, 2005

U.S. dollars (Note 1)

As of March
31, 2005

As of September
30, 2005

LIABILITIESCurrent Liabilities:
Trade accounts payable¥

382,468¥

708,285$

3,378,996

Other payables

932,365

714,368

8,237,167

Short-term loans

16,000,000

63,000,000

141,355,243

Current portion of long-term loan

24,000,000—

212,032,865

298,429

306,935

2,636,533

964

998

8,516

2,422,968

2,460,927

21,406,199

Accrued expenses
Accrued income taxes
Rent received in advance
Other current liabilities

10,495

15,17792,72244,047,689

67,206,690

389,148,241

Investment corporation bonds

55,000,000

45,000,000

485,908,649

Long-term loans

27,000,000

51,000,000

238,536,973

Deposits from tenants

22,644,218

20,994,943

200,054,937

Total current liabilities

Long-Term Liabilities:

294,000

588,000

2,597,403

Total long-term liabilities

Other

104,938,218

117,582,943

927,097,962

Total Liabilities

148,985,907

184,789,633

1,316,246,203

201,472,860

133,448,380

1,779,952,823

Retained earnings

5,509,546

4,120,680

48,675,198

Total shareholders’ equity

206,982,406

137,569,060

1,828,628,021

Total Liabilities and Shareholders’ Equity¥355,968,313¥322,358,693$3,144,874,224

SHAREHOLDERS’ EQUITY
Shareholders’ capital
Authorized: 2,000,000 shares
Issued: 345,400 shares as of September 30, 2005
and 260,400 shares as of March 31, 2005

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

Japan Real Estate Investment Corporation 27

Statements of Income and Retained Earnings
For the six months ended September 30, 2005 and March 31, 2005

Thousands of yen

U.S. dollars (Note 1)

For the period from
April 1, 2005 to
September 30, 2005

For the period from
October 1, 2004 to
March 31, 2005

For the period from
April 1, 2005 to
September 30, 2005

¥13,076,552
43,355
13,119,907¥10,708,353
39,522
10,747,875$115,527,449
383,027
115,910,476

6,158,114
392,914228,974
113,716
6,893,718
6,226,189

5,258,142
476,958
176,673
134,242
6,046,015
4,701,860

54,405,105
3,471,279
2,022,916
1,004,648
60,903,948
55,006,528

27
11,752

81
5,037

236
103,822

328,662
249,201
9,972
116,295
23,431
5,510,407

315,062
248,500——
21,813
4,121,603

2,903,630
2,201,620
88,1001,027,427
207,007
48,682,802969
25,509,436
110¥ 5,509,546

1,015
(3)
4,120,591
89¥ 4,120,680

8,562
20
48,674,220
978$ 48,675,198

SharesThousands of yen

U.S. dollars (Note 1)

260,400¥137,279,213

Cash dividends paid—

(3,830,744)

Net income—

4,120,591

Balance as of March 31, 2005

260,400¥137,569,060$1,215,381,750

Public offering

85,00068,024,480

600,976,058

Cash dividends paid—

(4,120,570)(36,404,007)

Net income—

5,509,436

48,674,220

345,400¥206,982,406$1,828,628,021

Operating Revenues and Expenses
Operating Revenues:
Rental revenues
Non-rental revenues
Total operating revenues
Operating Expenses:
Property-related expenses
Asset management fees
Administrative service fees
Other operating expenses
Total operating expenses
Operating profits
Non-Operating Revenues and Expenses
Non-Operating Revenues:
Interest income
Other non-operating revenues
Non-Operating Expenses:
Interest expense
Interest expense on investment corporation bonds
Amortization of investment corporation bond issuance costs
New share issuance costs
Other non-operating expenses
Income before Income Taxes
Income Taxes:
Current
Deferred
Net Income
Retained Earnings brought forward
Retained Earnings at end of period
The accompanying notes form an integral part of these financial statements.

Statements of Changes in Shareholders’ Equity
For the six months ended September 30, 2005 and March 31, 2005

Balance as of September 30, 2004

Balance as of September 30, 2005
The accompanying notes form an integral part of these financial statements.

28 Japan Real Estate Investment Corporation

Statements of Cash Flows
For the six months ended September 30, 2005 and March 31, 2005

Thousands of yen

U.S. dollars (Note 1)

For the period from
April 1, 2005 to
September 30, 2005

For the period from
October 1, 2004 to
March 31, 2005

For the period from
April 1, 2005 to
September 30, 2005

¥ 5,510,407
2,017,176
1,419
9,972
116,295(27)
577,863¥ 4,121,603
1,641,471
12,844——(81)563,562$ 48,682,802
17,821,149
12,536
88,1001,027,427(236)
5,105,250(50,098)
168,118
8,537(325,817)
213,997
4,000(37,959)
6,713(294,000)
3,071
7,929,667
27(586,369)(1,003)
7,342,322

27,277(383,982)(19,063)457,219(4,017)—265,319
6,713(294,000)(85,216)
6,309,649
81(514,337)(957)
5,794,436(442,599)
1,485,282
75,422(2,878,493)
1,890,597
35,339(335,357)
59,307(2,597,403)
27,12870,056,251
236(5,180,398)(8,865)64,867,224

Cash Flows from Investing Activities
Purchases of property and equipment
Purchases of intangible assets
Purchases of investment securities
Payments of deposits
Proceeds from lease deposits received
Repayment of lease deposits
Net cash used in investing activities(37,109,136)(1,028,918)(2,798)(875)
2,253,267(603,991)(36,492,451)(52,705,185)—(956,000)—
4,989,274(777,304)(49,449,215)(327,848,187)(9,090,187)(24,716)(7,729)19,906,942(5,336,079)(322,399,956)

Cash Flows from Financing Activities
Proceeds from short-term loans
Repayment of short-term loans
Proceeds from long-term loans
Proceeds from investment corporation bonds
Payments of investment corporation bond issuance costs
Proceeds from issuance of shares
Payment of new share issuance costs
Dividends to shareholders
Net cash provided by financing activities
Net Increase (decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at beginning of Period

14,000,000(61,000,000)—
10,000,000(59,832)
68,024,480(116,295)(4,120,570)
26,727,783(2,422,346)
29,361,925

61,000,000(8,000,000)
7,000,000————(3,830,744)
56,169,256
12,514,477
16,847,448

123,685,838(538,916,865)—
88,347,027(528,598)
600,976,058(1,027,427)(36,404,007)
236,132,026(21,400,706)
259,403,878

Cash and Cash Equivalents at end of Period¥ 26,939,579¥ 29,361,925$ 238,003,172

Cash Flows from Operating Activities
Income before income taxes
Depreciation and amortization
Loss on retirement of property and equipment
Amortization of investment corporation bond issuance costs
New share issuance costs
Interest income
Interest expense
Changes in assets and liabilities
Rental receivables and other receivables
Consumption tax refundable
Prepaid expenses
Trade accounts payable
Other payables
Accured expenses
Rent received in advanceLong-term prepaid expenses
Other long-term liabilities
Other
SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by operating activities

The accompanying notes form an integral part of these financial statements.
Japan Real Estate Investment Corporation 29

Notes to Financial Statements
September 30, 2005 and March 31, 2005

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 AssetManagement Co., Ltd. (“J-Rea”). J-Rea is currently owned 36% by Mitsubishi Estate Co., Ltd. (“MEC”), 27% by Tokio Marine &Nichido Fire Insurance Co., Ltd. (“TMN”), 27% by The Dai-ichi Mutual Life Insurance Company (“DL”) and 10% by Mitsui & Co.,Ltd.
On May 11, 2001, the Company was incorporated with ¥200 million of original capital contribution by MEC, TMN and DL under the
Law Concerning Investment Trusts and Investment Corporations of Japan, or the Investment Trust Law.
On September 10, 2001, the Company commenced operations when the Company was listed on the Tokyo Stock Exchange as one of thefirst real estate investment corporations in Japan (so-called “J-REITs”). The Company issued 160,000 shares at a price of ¥525,000,
generating gross proceeds of ¥84,000 million. The proceeds from the offering of the shares, net of underwriters’ discount, were ¥81,060
million.
On May 8, 2002, the Company completed a second offering of 65,000 shares at a price of ¥490,980, generating gross proceeds of ¥31,914
million. The proceeds from the offering of the shares, net of underwriters’ discount, were ¥30,892 million.
On October 25, 2003, the Company completed a third public offering of 35,000 shares at a price of ¥629,000, generating gross proceeds of¥22,015 million. The proceeds from the offering of the shares, net of underwriters’ discount, were ¥21,296 million.
On April 26, 2005, the Company completed a fourth public offering of 85,000 shares at a price of ¥826,000, generating gross proceeds of¥70,210 million. The proceeds from the offering of the shares, net of underwriters’ discount, were ¥68,024 million. As of September 30,
2005, the Company had total shareholders’ equity of ¥201,473 million with 345,400 outstanding shares.
At September 30, 2005, the Company owned a portfolio of 50 office properties concerning an aggregate of approximately 364,610 square
meters of leasable area.
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 Japanese Commercial Code, theSecurities and Exchange Law of Japan and the related regulations, which are different in certain respects as to the application anddisclosure requirements of International Financial Reporting Standards.
The accompanying financial statements are a translation of the audited financial statements of the Company, which were prepared inaccordance with Japanese 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 in a format that is more familiar to readers outside Japan. In addition, the notes to financial
statements include information that might not be required under Japanese 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 ¥113.19=US$1.00, the foreignexchange rate on September 30, 2005, 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. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESInvestment Security
Non-marketable security classified as other security is carried at cost. Cost of security 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 price of property, legal fees and acquisition costs. Depreciation is calculated on a straight-line basis over the estimated useful
lives of the assets ranging as stated below:

30 Japan Real Estate Investment Corporation

Buildings .............................................................................................................2–61 years
Structures ............................................................................................................5–50 years
Machinery and equipment...................................................................................3–18 years
Tools, furniture and fixtures ................................................................................3–15 years
Expenditures for repairs and maintenance are charged to operations as incurred. Significant renewals and betterments are capitalized.
Deferred charges
Deferred charges include investment corporation bond issuance costs and new share issuance costs.
Prior to April 1, 2005, investment corporation bond issuance costs were amortized using the straight-line method over one year. Effectivefrom April 1, 2005, investment corporation bond issuance costs are amortized using the straight-line method over three years. This change
in the amortization of investment corporation bond issuance costs was made to allocate periodic costs more appropriately, taking into
consideration that a benefit of the investment corporation bond issuance costs will be effective not only when incurred but also over theircontractual periods, since issuance costs may increase as investment corporation bonds are issued more frequently under a shelf registration
system. The effect of this change in the amortization method decreased non-operating expenses by ¥20 million ($176 thousand) andincrease income before income taxes by the same amount for the six months ended September 30, 2005.
New share issuance costs are charged to operations as incurred. The underwriters’ commissions of the public offering are not recognized as
new share issuance costs in the financial statements since such costs are not payable by the Company under the so-called “spread method”.
Under the spread method, the difference between the offering price (the price paid by the shareholder) and the purchase price (the pricereceived by the Company) is directly paid to the underwriters. The difference incurred at the fourth offering on April 26, 2005 was ¥2,186
million ($19,308 thousand).
Revenue recognition
Revenues from leasing of office space are recognized as rent accrued over the lease period.
Taxes on property and equipment
Property and equipment is subject to property taxes and city planning taxes on a calendar year basis. These taxes are generally charged to
expense during the period. The sellers of the properties were liable for property taxes for the calendar year including the period from thedate of purchase by the Company through the end of the year since the taxes are imposed on the owner registered in the record as ofJanuary 1 based on the assessment made by the local government. The Company paid the amount equivalent to the property taxes to thesellers applicable to the period since acquisition and included the amount equivalent to the taxes in the purchase price of each property andcapitalized 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 consists of cash on hand, deposits with banks and short-term investments which are highly liquid, readily
convertible to cash and with insignificant risk of price fluctuation, with original maturity of three months or less.
Accounting standard for impairment of fixed assets
On August 9, 2002, the Business Accounting Deliberation Council in Japan issued “Accounting Standard for Impairment of Fixed
Assets”. The standard requires the recognition of an impairment loss on certain assets, such as fixed assets, intangible assets andinvestments, individually or as a group, as the difference between the carrying amount and the fair value of the asset or present value using
a discounted cash flow model. The standard requires that an assessment for the impairment be carried out on an asset whenever events orchanges in circumstances indicate that the carried amount may not be recoverable. The Company adopted the new standard for an
impairment of long-lived assets in the current fiscal period ended September 30, 2005.
The adoption of this new standard had no effect on the statement of income and retained earnings for the fiscal period ended September
30, 2005.
Japan Real Estate Investment Corporation 31

3. INVESTMENT SECURITIESInvestment securities recorded at cost at September 30, 2005 and March 31, 2005 are summarized as follows:
Thousands of yen

U.S. dollars

As of September
30, 2005

As of March
31, 2005

As of September
30, 2005¥958,798¥956,000$8,470,691

Other securities
Non-listed stock

4. PROPERTY AND EQUIPMENT
Property and equipment at September 30, 2005 and March 31, 2005 consisted of the following:Thousands of yen

As of September 30, 2005
Acquisition Costs

Land

Book Value¥167,927,740 ¥167,927,740

U.S. dollars

As of March 31, 2005
Acquisition Costs

As of September 30, 2005

Book Value

Acquisition Costs

Book Value¥150,012,421 ¥150,012,421 $1,483,591,659 $1,483,591,659

Buildings and structures

84,710,571

Accumulated depreciation

7,248,141

Machinery and equipment

1,087,814

Accumulated depreciation

314,601

Tools, furniture and fixtures

8,516

Accumulated depreciation

2,470

6,046

1,917

6,599

21,82553,407

Construction in progress

324,357

324,357

5,500

5,500

2,865,597

2,865,597

Land in trust

56,667,464

56,667,464

56,667,465

56,667,465

500,640,203

500,640,203

Buildings and structures in trust

24,472,137

Accumulated depreciation

3,929,924

Machinery and equipment in trust

644,208

Accumulated depreciation

291,345

Tools, furniture and fixtures in trust

9,626

Accumulated depreciation

1,882

Total

32 Japan Real Estate Investment Corporation

66,547,731
77,462,430

5,764,875

748,392,713
60,782,856

894,455
773,213

256,051

638,404

257,472

20,931,074¥324,064,070

1,460

34,719,709

181,484,349

5,691,384
386,736

9,626
7,744

6,831,111

216,204,058

644,208352,8632,779,402
75,232

24,433,256
3,502,182

684,357,546

9,610,513

8,516

20,542,213

64,035,167

2,573,948

3,117,436

85,047
8,166¥289,439,221

16,63068,417$2,863,009,725

5. SHORT-TERM LOANS
Short-term loans at September 30, 2005 and March 31, 2005 consisted of the following:Thousands of yen

As of September
30, 2005

Unsecured loans from a bank and a trust bankwith variable interest, due on May 11, 2005¥

U.S. dollars

As of March
31, 2005

As of September
30, 2005—¥27,000,000

Unsecured loans from banks and another financial institution
with variable interest, due on May 18, 2005—

17,000,000—

Unsecured loans from banks with variable interest,
due on May 24, 2005—

4,000,000—

Unsecured loan from a trust bank with variable interest,
due on May 31, 2005—

11,000,000—

Unsecured loan from a bank with variable interest,
due on June 15, 2005—

2,000,000—

Unsecured loan from a bank with variable interest,
due on October 29, 2005

2,000,000

2,000,000

17,669,405

Unsecured loan from a bank with variable interest,
due on June 15, 2006

2,000,000—

17,669,405

Unsecured loan from a trust bank with variable interest,
due on July 31, 2006

3,000,000—

26,504,108

Unsecured loan from a trust bank with variable interest,
due on September 13, 2006

9,000,000—

79,512,325¥16,000,000¥63,000,000$141,355,243

Total

$

—

The weighted average interest rates applicable to the short-term loans at September 30, 2005 and March 31, 2005 were 0.22553% and0.30442%, respectively, per annum.
During the period ended September 30, 2005, the Company committed credit lines of ¥20,000 million ($176,694 thousand) with certain
financial institutions to reduce a refinancing risk. The unused amount of such committed credit lines was ¥20,000 million ($176,694
thousand) at September 30, 2005.

6. INVESTMENT CORPORATION BONDS
Details of total investment corporation bonds outstanding are summarized as follows:
As of September
30, 2005

As of March
31, 2005

As of September
30, 2005

Amount(thousands of yen)Interest rate(%)

Amount(thousands of yen)Interest rate(%)

Amount(U.S. dollars)

Unsecured bonds due on June 21, 2007

¥25,000,000

1.32%¥25,000,000

1.32%$220,867,568

Unsecured bonds due on April 30, 2008

10,000,000

0.69%

10,000,000

0.69%

88,347,027

Unsecured bonds due on April 30, 2010

10,000,000

0.98%

10,000,000

0.98%

88,347,027

Unsecured bonds due on September 29, 2025

10,000,000

2.56%

—

—

88,347,027

Total¥55,000,000¥45,000,000$485,908,649

Japan Real Estate Investment Corporation 33

7. LONG-TERM LOANS INCLUDING CURRENT PORTION OF LONG-TERM LOAN
Long-term loans at September 30, 2005 and March 31, 2005 consisted of the following:Thousands of yen

1.120% secured loan from banks, trust banks,
and an insurance company, due on June 23, 2006

U.S. dollars

As of September
30, 2005

As of March
31, 2005

As of September
30, 2005¥ 24,000,000¥24,000,000$ 212,032,865

0.90875% unsecured loan from a bank, due on June 15, 2007

3,000,000

3,000,000

26,504,108

0.78375% unsecured loan from a bank, due on August 31, 2007

3,000,000

3,000,000

26,504,108

1.0575% unsecured loan from a bank, due on March 24, 2009

2,000,000

2,000,000

17,669,405

1.015% unsecured loan from an insurance company,
due on March 30, 2009

5,000,000

5,000,000

44,173,514

1.47125% unsecured loan from an insurance company,
due on March 30, 2011

2,000,000

2,000,000

17,669,405

1.50125% unsecured loan from an insurance company,
due on August 31, 2011

5,000,000

5,000,000

44,173,514

1.55% unsecured loan from an insurance company,
due on October 29, 2012

2,000,000

2,000,000

17,669,405

1.33125% unsecured loan from another financial institution,
due on November 1, 2011

5,000,000

5,000,000

44,173,514

Subtotal

51,000,000

51,000,000

450,569,838

Less: current portion of long-term loan

(24,000,000)—(212,032,865)

Total¥ 27,000,000¥51,000,000$ 238,536,973

8. SECURED ASSETSAt September 30, 2005 and March 31, 2005, the following assets were pledged as collateral for the following loans:Thousands of yen

U.S. dollars

Pledged assets:

As of September
30, 2005

As of March
31, 2005

As of September
30, 2005

Bank deposits¥ 7,895,029¥ 7,854,568$ 69,750,232

Land and leasehold rights

47,765,093

47,765,093

421,990,398

Buildings and structures

16,099,186

16,398,223

142,231,520

Machinery and equipment

297,960

327,1432,632,387

Tools, furniture and fixtures

7,744

8,166

68,417

Total¥72,065,012¥72,353,193$636,672,954

Loans secured by the pledged assets:

As of September
30, 2005

Current portion of long-term loan

¥24,000,000

Thousands of yen

Long-term loan
Total

¥

U.S. dollars

As of March
31, 2005

As of September
30, 2005—$212,032,865—

24,000,000—¥24,000,000¥24,000,000$212,032,865

9. SHAREHOLDERS’ EQUITYThe Company is required to maintain net assets of at least ¥50 million ($442 thousand), as required pursuant to the Investment Trust
Law.

34 Japan Real Estate Investment Corporation

10. INCOME TAXESAt September 30, 2005, and March 31, 2005, the Company’s deferred tax assets consist mainly of the enterprise tax, which is notdeductible for tax purposes. The reconciliation of tax rate difference between the adjusted statutory tax rate and the effective tax rate forthe six months ended September 30, 2005, and March 31, 2005 were as follows:
For the period from April 1, 2005
to September 30, 2005

For the period from October 1, 2004
to March 31, 2005

Statutory tax rate ...................................................................................39.39% ............................................39.39%
Deductible dividend distribution ..........................................................(39.38%)..........................................(39.38%)
Others .....................................................................................................0.01% ..............................................0.01%
Effective tax rate......................................................................................0.02% ..............................................0.02%
The Company is subject to Japanese corporate income taxes on all of its taxable income. However, under the Special Taxation
Measures Law of Japan, or the STML, an investment corporation is allowed to deduct dividends of accounting profits, or dividend
distributions, paid to investors from its taxable income if certain tax requirements are satisfied. Such tax requirements include
dividend distributions in excess of 90% of its taxable income for the fiscal period as stipulated by Article 67-15 of the STML.
Based on the distribution policy provided by Article 32-2 of the Articles of Incorporation, the Company made a dividend
distribution of 100% of retained earnings in the amount of ¥5,509 million ($48,675 thousand) subsequent to September 30, 2005
and treated it as tax deductible dividend. The Company will not distribute the dividends in excess of accounting profit under
Article 32-3 of the Articles of Incorporation.

11. PER SHARE INFORMATION
The following table summarizes information about net assets per share and net income per share at September 30, 2005 and March 31,
2005, and for the periods then ended:Yen

For the period
from April 1, 2005
to September 30, 2005

U.S. dollars

For the period
from October 1, 2004
to March 31, 2005

For the period
from April 1, 2005
to September 30, 2005

Net assets at period end per share¥599,254¥528,299$5,294

Net income per share¥ 15,951¥ 15,824$ 141

In calculating the net assets per share, the amount of the net assets is adjusted for the cash distribution declared in the subsequent period.
Net income per share is computed by dividing net income by the weighted average number of shares outstanding during each period.
Diluted net income per share has not been presented since no warrants or convertible bonds were outstanding during the period.

12. RELATED PARTY TRANSACTIONSThe Company entered into the following related party transactions with MEC and certain affiliates of MEC, TMN, Mitsui & Co., Ltd.,and Mizuho Securities Co., Ltd.
Thousands of yen

For the period
from April 1, 2005
to September 30, 2005

Purchase of the properties¥14,700,000

Property management fees
Utilities

U.S. dollars

For the period
from October 1, 2004
to March 31, 2005¥

For the period
from April 1, 2005
to September 30, 2005—

$129,870,130

741,990

657,950

6,555,262

70,13965,528619,655

Insurance

2,037

57,27817,999Other operating expenses

7,054

1,889

62,319Repair and maintenance

267,945

198,557

2,367,216

Underwriting commission

45,000—397,562
Japan Real Estate Investment Corporation 35

13. BREAKDOWN OF PROPERTY-RELATED REVENUES AND EXPENSES
For the six months ended September 30, 2005 and March 31, 2005
Thousands of yen

U.S. dollars

For the period
from April 1, 2005
to September 30, 2005

For the period
from October 1, 2004
to March 31, 2005

For the period
from April 1, 2005
to September 30, 2005

Property-Related Revenues¥13,119,907¥10,747,875$115,910,476

Rental Revenues

13,076,552

10,708,353

115,527,449

Rental revenues

9,664,349

7,785,264

85,381,647

Common area charges

2,100,331

1,791,597

18,555,800

Parking revenues

451,950

412,547

3,992,847

Other rental revenues

859,922718,9457,597,155

43,35539,522

383,027

Cancellation charges

39,566

20,540349,550

Other miscellaneous revenues

3,789

18,98233,477

Non-Rental Revenues

Property-Related Expenses

6,158,114

5,258,142

54,405,105

Property management fees

1,554,810

1,277,345

13,736,285

Utilities expenses

1,012,500

855,487

8,945,135

Property and other taxes

1,035,966

937,696

9,152,455

Casualty insurance

33,111

27,864

292,529

Repairs and maintenance474,299471,973

4,190,288

2,017,176

1,641,471

17,821,149

30,252

46,306267,264¥ 6,961,793¥ 5,489,733$ 61,505,371

Depreciation
Other rental expenses
Profits

14. LEASESThe Company owns office buildings under leases and earns rent income. As of September 30, 2005 and March 31, 2005, the future lease
revenues under the non-cancelable operating leases are as follows:
Thousands of yen

Due within one year

U.S. dollars

As of September
30, 2005

As of March
31, 2005

As of September
30, 2005¥ 7,275,000¥ 6,297,045$ 64,272,458

Due after one year

27,329,530

20,166,472

241,448,273

Total¥34,604,530¥26,463,517$305,720,731

15. SUBSEQUENT EVENTSAppropriation of retained earnings
On November 18, 2005, the Board of Directors resolved to effect the payment of a cash distribution of ¥15,951 per share aggregating¥5,509 million ($48,675 thousand) to shareholders at the record date of September 30, 2005.

36 Japan Real Estate Investment Corporation

Japan Real Estate Investment Corporation 37

Corporate Data
As of September 30, 2005

Transfer Agent

Executives
Executive Director:
Supervisory Directors:

Taketo Yamazaki

The Sumitomo Trust & Banking Co., Ltd.

Kenji Kusakabe

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

Tomohiko Okanoya
Auditors
Paid-in Capital

Ernst & Young ShinNihon¥201,472,860,000

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

Number of Shares Issued
345,400

Incorporation
May 11, 2001

Number of Shareholders
18,655

Executive Office
Japan Real Estate Investment Corporation

Stock Listing

3-1, Marunouchi 3chome, Chiyoda-ku, Tokyo 100-0005, JapanTokyo Stock Exchange
For further information, please contact :Securities CodeJapan Real Estate Asset Management Co., Ltd.

8952

Planning Department, Manager
Toshiya Kobayashi

Type of Investment Corporation

Tel: 81-3-3211-7921

Closed-end corporate type fundFax: 81-3-3212-8886
E-mail: toshiya-kobayashi@j-rea.co.jp

38 Japan Real Estate Investment Corporation

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

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

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