Japan Real Estate Investment CorporationJ A P A N R E A L E S TAT E I N V E S T M E N T C O R P O R AT I O N

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

M A RC H 2 0 1 3
Semiannual Report
For the period from October 1, 2012 to March 31, 2013

MARCH 2013 SEMIANNUAL REPORTProfile

Corporate Data
As of March 31, 2013

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

Executives

Transfer Agent

Executive Director:

Noritada Terasawa

Sumitomo Mitsui Trust Bank, Limited

Supervisory Directors:

Kenji Kusakabe

1-4-1, Marunouchi, Chiyoda-ku, Tokyo 100-8233, Japan

Tomohiro Okanoya

Auditors
Paid-in Capital

Ernst & Young ShinNihon LLC¥396,018,317,000

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

Contents
Financial Highlights

p. 1

Top 10 Unitholdersp. 1

Unit Price Performance

p. 1

The Strengths of Japan Real Estate
Investment Corporation

p. 2

Portfolio Highlights

p. 3

Number of Units Outstanding

Incorporation

594,140

May 11, 2001

Number of Unitholders

Executive Office

15,867

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

Stock Listing
Tokyo Stock Exchange

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

Securities CodePlanning Department8952

Tel: 81-3-3211-7921

Asset Management Summaryp. 4

Asset Size, Property Acquisitions, andPerformance Trends

p. 6

Type of Investment Corporation

To Our Unitholders

p. 8

Closed-end corporate type fund

The Portfolio of Japan Real Estate
Investment Corporation

p.12

Overview of Portfolio Properties

p.15

Financial Section

p.21

Corporate Data

p.39

Fax: 81-3-3212-8886
E-mail: j-rea-inquiry@j-rea.co.jp

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

Japan Real Estate Investment Corporation 39

Financial Highlights
Thousands of
U.S. dollars (Note 1)

Millions of yen
For the period from
October 1, 2012 toMarch 31, 2013

For the period from
April 1, 2012 to
September 30, 2012

For the period from
October 1, 2011 toMarch 31, 2012

For the period from
April 1, 2011 to
September 30, 2011

For the period from
October 1, 2010 toMarch 31, 2011

For the period from
October 1, 2012 toMarch 31, 2013

Operating Revenues¥25,357¥24,222¥24,059¥22,829¥22,135$269,615

Operating Income

10,631

10,212

10,786

10,3809,802

113,044

Ordinary Income

8,749

8,372

8,863

8,603

7,938

93,029Net Income

8,824

8,448

8,934

8,268

7,652

93,830Net Operating Income (NOI) (Note 2)

16,76815,997

16,361

15,121

14,950178,297

Funds from Operations (FFO) (Note 3)

14,032

13,356

13,625

12,154

11,938149,20727.2 times

16.2 times

14.7 times

15.2 times

16.1 times

27.2 times

FFO Multiple (Note 4)
Cash Distribution

8,995

8,619

8,888

7,753

7,652

95,644

Number of Units

594,140

549,040

549,040489,200

489,200

594,140

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

15,14015,70016,19015,85015,642160.98Notes: 1. Amounts in U.S. dollars are included solely for the convenience of readers outside Japan. The rate of ¥94.05 = US$1.00, the foreign exchange rate on March 31, 2013,
has been used for translation. The inclusion of such amounts is not intended to imply that Japanese yen amounts have been or could be readily converted, realized or
settled into U.S. dollars at that rate or any other rate.
2. NOI = Property-Related Revenues – Property-Related Expenses (excluding Depreciation)
3. FFO = Net Income + Depreciation – Gain (Loss) on Sale of Properties
4. FFO Multiple = Unit Price at End of the Respective Term ÷ FFO per Unit (Annualized)(Annualized portion of the calculation given in Note 4 assumes a fiscal period of 182 days for the period ended March 31, 2011, 183 days for the period ended
September 30, 2011, 183 days for the period ended March 31, 2012, 183 days for the period ended September 30, 2012 and 182 days for the period ended March 31,
2013.)

Top 10 Unitholders
As of March 31, 2013
Units

% of total units
outstanding

89,92742,49933,19829,082
20,477
12,47010,160
9,611
8,820
8,220

15.14%
7.15%
5.59%
4.89%
3.45%
2.10%
1.71%
1.62%
1.48%
1.38%

Company

Japan Trustee Services Bank, Ltd. (Shintaku Acc.) ................................................................................................
Trust & Custody Services Bank, Ltd. (Toshin Acc.) ..............................................................................................
The Master Trust Bank of Japan, Ltd. (Shintaku Acc.) .........................................................................................
The Nomura Trust and Banking Co., Ltd. (Toshin Acc.) ......................................................................................
NOMURA BANK (LUXEMBOURG) S.A. ........................................................................................................
THE BANK OF NEW YORK, TREATY JASDEC ACCOUNT ........................................................................
Mitsubishi Estate Co., Ltd. ...................................................................................................................................
STATE STREET BANK AND TRUST COMPANY 505223 .............................................................................
The Chugoku Bank, Ltd. .......................................................................................................................................
SIX SIS LTD. ........................................................................................................................................................

Unit Price Performance
TSE REIT Index

TOPIX

The Company

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

Mar.

2001

2002

Sept.

Mar.

2003

Sept.

Mar.

2004

Sept.

Mar.

2005

Sept.

Mar.

2006

Sept.

Mar.

2007

Sept.

Mar.

2008

Sept.

Mar.

2009

Sept.

Mar.

2010

Sept.

Mar.

2011

Sept.

Mar.

2012

Sept.

Mar.

2013

Japan Real Estate Investment Corporation 1

The Strengths of Japan Real Estate Investment Corporation

Strengths
Stable Dividends

Collaboration withSponsors—Actual dividend per unit

— Expertise offor the 23rd fiscal period:¥15,140($160.98)*

The Dai-ichi Life

—Forecasted dividend per unit
for the 24th fiscal period:¥15,160***

Insurance Company, Limited($161.19)* ,**The foreign exchange rate of ¥94.05 = US$1.00, as ofMarch 31, 2013, has been used for this translation.
The forecasted dividend was disclosed with the announcement of the
23rd fiscal period earnings results on May 16, 2013.

Steady Growth with
Quality Portfolio—Total acquisition price:¥782,433 million
60

high-quality office buildings—The first listed J-REIT, showing steady
performance for 23 consecutive periods

2 Japan Real Estate Investment Corporationand Mitsui & Co., Ltd.
is being fully utilizedSound Financial Base(as of March 31, 2013)—Highest credit ratings for a J-REIT:

A1

from Moody’s,

AAA+

from S&P,

from R&I— LTV (Interest-bearing debt / Total assets):

40.6%($8,319 million)— Maintains

Mitsubishi Estate Co., Ltd.,— Long-term, fixed-interest debt ratio***:94.2%*** Long-term, fixed-interest loans + Investment corporation bonds(including current portions of Long-term, fixed-interest loans andInvestment corporation bonds) / Total interest-bearing debt

Portfolio Highlights

Trends in the state of portfolio management

September 2001

Total leasable space (m 2)

Number ofbuildings

Total numberof tenants(Note)

Total leasable
space

20

213

133,927m2

94.6%

2

94.0%

Occupancy
rate

March 2002

24

353

201,884m

September 2002

27

362

215,928m2

95.3%

March 2003

30

383

236,693m2

94.4%

September 2003

32

407

246,062m2

95.1%

March 2004

36

477

273,157m2

94.8%

2

93.6%

September 2004

39

504

293,105m

March 2005

46

669

336,026m2

97.6%

September 2005

50

814

364,610m2

98.6%

March 2006

52

866

400,090m2

98.7%

2

98.2%

September 2006

49

835

396,173m

March 2007

50

887

397,928m2

97.8%

September 2007

50

879

406,605m2

98.7%

March 2008

53

931

479,877m2

95.9%

2

96.1%

September 2008

54

970

508,296m

March 2009

55

993

516,411m2

95.5%

September 2009

55

977

516,421m2

93.3%

March 2010

55

979

566,277m2

93.0%

2

92.4%
93.2%

September 2010

55

992

567,612m

March 2011

57

1,004

589,002m2

September 2011

56

1,009

584,982m2

94.6%

March 2012

57

1,058

629,761m2

94.7%

September 2012

58

1,082

645,787m2

95.5%

October 2012

58

1,084

645,787m2

95.3%

November 2012

58

1,083

645,787m2

95.1%

December 2012

58

1,091

646,855m2

95.7%

2

96.0%

January 2013

60

1,118

700,751m

February 2013

60

1,119

700,759m2

96.2%

March 2013

60

1,131

700,759m2

96.7%

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

100,000

200,000

300,000

400,000

500,000

600,000

700,000
Total leasable
space

Occupancy rate

23rd period

60.0

65.0

70.0

75.0

80.0

85.0

90.0

95.0

100.0
Occupancy rate (%)

Portfolio breakdown
As of March 31, 2013

Properties bygeographic
regionOther major
cities14.3%

Tokyo 23 wards

78.9%

Tenants byindustrytype(Percentage basedon leased space)(Percentage based on
acquisition price)

Tokyo metropolitan area
excluding 23 wards

6.8%

Transport
services Others
Staffing and travel
agencies
1.2% 9.8%

Financeand insurance

17.2%

1.2%

TextilesServiceindustries

1.2%

15.1%

Steel and metals

1.3%

Information
services

Ceramics

10.4%

1.6%
Machinery

3.6%

Real estate

8.2%

Communications

4.6%

Electric devices

7.2%
Construction

4.8%

Retail and Pharmaceuticals
restaurants 6.7%

5.8%

Japan Real Estate Investment Corporation 3

Asset Management Summary
For the period from October 1, 2012 to March 31, 2013

Acquisition of New Real Estate
Harumi Front
Location:
Site area:
Floor area of building:
Structure:
Floors:2-1-40 Harumi, Chuo-ku, Tokyo
7,250.15 m2
45,458.90 m2
Steel-framed structure, flat roof
Above ground: 17 floors
Below ground: 1 floor
Completion:
February 2012
Acquisition date:
January 7, 2013
Acquisition price:¥31,300 million
Seller:Harumi Nichome Kaihatsu Special
Purpose Company (TMK)*
Property management company: Mitsubishi Estate Co., Ltd.

* Mitsubishi Estate Co., Ltd., which is categorized as a related party of JRE (i.e. ashareholder that holds a stake of the asset management company to which JRE
entrusts the management of its assets), has a preferred equity investment inHarumi Nichome Kaihatsu (TMK).

Certified “Platinum,” the Highest Grade of the DBJ Green Building Certification
The DBJ Green Building Certification System of the Development
Bank of Japan (“DBJ”) is used to rate buildings on the basis of how
well they fulfill such social requirements as environmental friendliness.
Harumi Front is the first J-REIT owned building certified as“Platinum,” the highest grade of the certification by the DBJ.

Rationale for the Certification
The building was highly rated for its advanced environmental
features, such as the lighting control system automatically adjusting
to the condition of sunlight, LED lighting in common areas, wide
green areas, enhanced disaster prevention features and flexibility
in meeting the needs of diverse tenants.
The Company, which is one of the first listed J-REIT specializing
in office buildings, intends to promote ecology-conscious, energysaving measures for the office buildings in its portfolio as well as
Business Continuity Plans (BCP) that meet tenant requirements
through collaboration with property management companies.

4 Japan Real Estate Investment Corporation

Properties with Japan’s top-classenvironmental & social awareness
DBJ Green Building Certification
The DBJ Green Building Certification System uses a scoringmodel originally developed by the DBJ to select buildings thatmeet the demands of the times. Its purpose is to promotebuildings that are friendly to the environment and sufficiently
equipped to prevent crime and mitigate disaster while meetingstakeholders’ various real-estate related social requirements.

Acquisition of New Real Estate
Higashi Nibancho Square
Location:
Site area:
Floor area of building:
Structure:
Floors:4-1-25 Ichibancho, Aoba-ku, Sendai City, Miyagi Prefecture
3,191.27 m2
27,680.45 m2
Steel-framed, steel-framed reinforced concrete structure, flat roof
Above ground: 14 floors
Below ground: 1 floor
Completion:
July 2008
Acquisition date:
January 7, 2013
Acquisition price:¥9,950 million
Seller:Hayate Special Purpose Company (TMK)*
Property management company: Mitsubishi Jisho Property Management Co., Ltd.

* Mitsubishi Estate Co., Ltd., which is categorized as a related party of JRE (i.e., a shareholder that holds a stakeof the asset management company to which JRE entrusts the management of its assets), has a preferred equity
investment in Hayate Special Purpose Company (TMK).

Harmony Tower (Additional Share)
Location:
Site area:
Floor area of building:
Structure:
Floors:Completion:
Ownership:

Acquisition date:
Acquisition price:
Seller:1-32-2 Honcho, Nakano-ku, Tokyo
10,020.52 m2(total land area of the building site)
72,729.31 m2(total floor area of the entire building)
Steel-framed, steel-framed reinforced concrete, reinforced concrete
structure, flat roof
Above ground: 29 floors
Below ground: 2 floors
March 1997
Land: Ownership (share of co-ownership 2,826,695/100,000,000)
Building: Compartmentalized building units and co-ownership ofcompartmentalized building units. (additional share ofownership of the building: 2.859811%) (Note 1)
December 19, 2012
¥520 million
4 individuals (Note 2)

Note 1: The Company acquired a share of ownership of the property (29.253305% of the share of ownership ofthe building) on February 28, 2005. Following the above acquisition, the Company’s share of ownershipof the building will be 32.113115%.
Note 2: Details of the sellers are not disclosed due to non-approval of disclosure by individuals of the sellers.

Issuance of New Investment Units
1. Issuance of new investment units by public offering
Number of units newly issued:
Offer price (subscription price):
Aggregate amount of issue price:
Offer price determination date:
Payment date:

41,000 units¥746,850 per unit
¥29,678,670,000
October 22, 2012
October 29, 2012

2. Issuance of new investment units by third-party
allocation
Number of units newly issued:
Issue price:
Aggregate amount of issue price:
Payment date:
Allottee:

4,100 units¥723,870 per unit
¥2,967,867,000
November 28, 2012
SMBC Nikko Securities Inc.

Japan Real Estate Investment Corporation 5

Asset Size, Property Acquisitions, and Performance Trends
In September 2001, the Company became the first J-REIT in Japan listed on the Tokyo Stock Exchange (“TSE”).
Since then, the Company has targeted stable management to fulfill its goal of maintaining and increasing
dividends per unit over the medium to long term. The Company’s growth is based on external growth strategies
that aim to increase earnings through the acquisition and transfer of properties as well as internal growth strategies
Occupancy rate
94.6%

94.0%

95.3%

94.4%

95.1%

94.8%

97.6%
93.6%

98.6%

98.7%

98.2%

97.8%

¥418

¥441

Keep stable occupancy rate

Major Portfolio Properties

Shibuya Cross Tower
The 1st fiscal period

Kitanomaru Square
The 9th fiscal period

Mitsubishi UFJ Trust andBanking Building
The 11th fiscal period

Shiodome Building
The 15th and 17th fiscal
periods

Tokyo Opera City Building
The 8th and 17th fiscal
periods

Harumi Center Building
The 13th fiscal period

MM Park Building
The 13th fiscal period

Shin-Fujita Building
The 14th fiscal period¥412

Total acquisition price (Number of properties)¥92

billion¥164
billionbillion

(52)

(49)

billion¥326

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

¥144

billion

¥290
¥183

¥192

billionbillion

(30)

(32)

¥218
billion¥239

billionbillionbillionbillion(20)
At IPO

(24)

(27)

(36)

(39)

(46)

(50)

(50)

Period ended Period ended Period ended Period ended Period ended Period ended Period ended Period ended Period ended Period ended Period ended

Sept. 2001 Mar. 2002 Sept. 2002 Mar. 2003 Sept. 2003 Mar. 2004 Sept. 2004 Mar. 2005 Sept. 2005 Mar. 2006 Sept. 2006 Mar. 2007

Dividend per unit
¥14,983 ¥12,853 ¥14,455 ¥15,117 ¥14,602 ¥14,711 ¥15,824 ¥15,951 ¥16,172 ¥17,302 ¥17,521
Listing and issuance of units
Sept. 2001
May 2002
Listed on TSE First Follow-On
as first J-REIT (First for a J-REIT)
Sept. 2001
IPO

6 Japan Real Estate Investment Corporation

Oct. 2003
Second Follow-On

Apr. 2005
Third Follow-On

Oct. 2006
FourthFollow-On

that seek to optimize earnings from properties already held. The size of the Company’s assets (total acquisition
price) has grown from ¥92.8 billion at IPO to ¥782.4 billion as of the 23rd fiscal period end due to the steadyachievement of external growth strategies. However, in terms of internal growth strategies, ongoing efforts arebeing made in such areas as maintaining stable occupancy rates and reducing building management costs.
95.9%

96.1%

95.5%

98.7%

93.3%

93.0%

92.4%

93.2%

94.6%

94.7%

95.5%

96.7%

Properties That Have Been Recently Acquired

Akasaka Park Building
The 21st fiscal period

TIXTOWER UENOThe 22nd fiscal period

Harmony Tower(Additional Share)
The 23rd fiscal period

Harumi Front
The 23rd fiscal period

Higashi Nibancho SquareThe 23rd fiscal period

¥782
¥718

Steady growth in asset size

¥518
billion¥542
billion

¥564

¥564

billionbillion

¥641

¥643

billionbillion¥660
billion¥657

billion¥740

billionbillionbillion¥446
billion

JRE’s asset size has
increased sevenfold since
being listed ten years ago.

(50)

(50)

(53)

(54)

(55)

(55)

(55)

(55)

(57)

(56)

(57)

(58)

(60)

Period ended Period ended Period ended Period ended Period ended Period ended Period ended Period ended Period ended Period ended Period ended Period ended

Sept. 2007 Mar. 2008 Sept. 2008 Mar. 2009 Sept. 2009 Mar. 2010 Sept. 2010 Mar. 2011 Sept. 2011 Mar. 2012 Sept. 2012 Mar. 2013¥18,500 ¥29,223 ¥19,072 ¥19,020 ¥19,198 ¥18,043 ¥16,628 ¥15,642 ¥15,850 ¥16,190 ¥15,700 ¥15,140
Mar. 2008
Fifth Follow-On

Dec. 2009
Sixth Follow-On

Feb. 2012
SeventhFollow-On

Oct. 2012
EighthFollow-On

Japan Real Estate Investment Corporation 7

To Our Unitholders

8 Japan Real Estate Investment Corporation

Continuing to pursue external growth-oriented operations in the 23rd fiscal period,
the Company acquired an additional share of Harmony Tower in December 2012
and acquired two properties, Harumi Front and Higashi Nibancho Square in
January 2013. The Company continues to strive to further strengthen its portfolio
through property acquisition and to raise the bar for revenues and earnings.
BUSINESS PERFORMANCEFOR THE 23RD FISCAL PERIOD
Summary of Financial Results and Cash Dividend
In the 23rd fiscal period (October 1, 2012 to March 31, 2013),
Japan Real Estate Investment Corporation (“the Company”)
recorded operating revenues totaling 25,357 million yen, up
4.7% compared with the previous period. On the earnings front,
operating income increased 4.1% to 10,631 million yen. After
deducting expenses for interest payments on loans and othercosts, ordinary income rose 4.5% to 8,749 million yen and net
income grew 4.5% to 8,824 million yen.
Turning to dividends, the Company applies Article
67-15 of the Special Taxation Measures Law of Japan. With theaim of maintaining a stable cash dividend level, the Company
augmented retained earnings for the period under review by
allocating a 170,569,366 yen reversal from a portion of reserve
for reduction entry accumulated in accordance with the “Special
Provisions for Taxation in the case of Advance Acquisition ofland, etc. in 2009 and 2010” under Article 66-2 of said law.
Therefore, the Company has determined to pay out cash
dividends of 8,995,279,600 yen from retained earnings for theperiod under review, which must be divisible by 594,140—thenumber of units outstanding as of March 2013. Accordingly, theper-unit cash dividend totaled 15,140 yen.

Operating Environment and Performance
During the period under review, in the Japanese economy, due tothe large-scale quantitative easing measures enacted after thechangeover of power in the Japanese government, there havebeen rapid changes, including a correction in the overvaluationof the yen, a lowering of interest rates and an increase in capitalflowing toward stocks and other risky investments. Thus,
although economic conditions remained severe in the beginningof the fiscal period under review, primarily due to the slowdownof the global economy, there were growing expectations forrecovery as, toward the end of the period, consumer spending
picked up and signs of improved corporate earnings began toemerge.
In the market for leased office space, occupancy rates inTokyo have continued to rebound due to a decrease in the supplyof new buildings. However, overall rent levels remained on a
gradual downward trend amid high vacancy rates, even as
advertised rent levels for some highly competitive buildings
appeared to rebound. In regional business areas, although there
were signs that occupancy rates as a whole were gradually
improving, high vacancy rates coupled with low rent levels

prevailed amid stagnant demand for office space. In the property
market, potential sellers were encouraged to hold on to theirproperties in light of a bottoming out of market conditions forleased office space, gradually increasing expectations of acontraction in real estate risk premiums and an accommodative
fund-raising environment. Amid this environment, buying wasaggressive from the beginning of the year, with REITs successively
listing on stock markets and raising capital thanks to a recovery
in investment unit prices while stepping up their property
acquisitions, especially of properties held by their sponsor
companies.
Reflecting the above circumstances in the market forleased office space for the period under review, the Company
strived to improve occupancy rates by aggressively promoting
leasing activities that take into account market trends. As a resultof these activities, the Company’s occupancy rate edged up from
95.5% as of September 30, 2012 to 96.7% as of March 31,
2013. However, rent levels continued to feel downward pressure
and property-related revenues, excluding those from newly
operating properties, declined further compared with theprevious period due to such factors as high tenant turnover.
At the same time, the Company continued to work tofurther strengthen its portfolio through external growth and toraise minimum revenues and earnings, and so in the period
under review, the Company acquired Harumi Front (Chuo-ku,
Tokyo) on January 7, 2013 and Higashi Nibancho Square(Sendai City) for 31,300 million yen and 9,950 million yen,respectively. The Company also made an additional acquisitionof a portion of Harmony Tower (Nakano-ku, Tokyo) for 520
million yen.
As a result of the above, the Company’s portfolio at theend of the fiscal period under review, March 31, 2013, consistedof 60 office buildings with a total acquisition price of 782,433
million yen. Total leasable space stood at 700,759 m2, with a
total of 1,131 tenants.

Financial Activities
To fund the repayment of existing loans, the Company procured
short-term loans totaling 5,000 million yen on January 15,
2013, as well as long-term loans amounting to 2,000 million yen
on October 29, 2012, 1,000 million yen on December 20, 2012,
10,000 million yen on December 21, 2012, 23,000 million yen
on January 15, 2013 and 7,000 million yen on March 25, 2013.
Moreover, the Company procured 9,000 million yen in
long-term loans and 13,000 million yen in short-term loans on
January 7, 2013 to partially fund the acquisition of Harumi
Front.
Japan Real Estate Investment Corporation 9

As it will take slightly more time for a real recovery in the market for leased officespace, in the 24th fiscal period, the Company intends to continue pursuing external
growth-oriented operations. Going forward, the Company will leverage its soundfinancial standing to achieve further external growth as well as to secure stable cash
dividends.
At the same time, the Company decided to issue 41,000
new investment units through public offering and 4,100 new
investment units through third-party allocation during theperiod under review. Through these new unit issuances, theCompany procured 29,678 million yen and 2,967 million yen
on October 29, 2012 and November 28, 2012, respectively.
Using these funds, the Company made scheduled repayments ofshort-term loans of 1,000 million yen on November 1, 2012 aswell as repayments prior to maturity of short-term loans andlong-term loans with variable interest rates in the amounts of
12,500 million yen and 2,000 million yen, respectively, while
allocating a portion of funds to acquisition capital for thepurchase of specified assets.
Moreover, the Company made scheduled payments oflong-term loans in the amount of 1,000 million yen on March 25,
2013.
As a result of these financing activities, as of March 31,
2013, the Company’s total interest-bearing debt amounted to311,200 million yen. This amount consists of long-term loans
totaling 248,200 million yen (including a current portion
totaling 34,100 million yen), short-term loans totaling 18,000
million yen and investment corporation bonds totaling 45,000
million yen.
As of March 31, 2013, the Company’s long-term, fixedinterest debt ratio (ratio of long-term, fixed-interest debt(including the current portion of long-term loans) to total interestbearing debt) stood at 94.2%, and the LTV ratio (ratio of interestbearing debt to total assets) was 40.6%. As these figures indicate,
the Company has been able to maintain a sound and conservative
financial standing.
The Company’s credit ratings as of March 31, 2013 wereas follows:
Rating Agency

Credit Rating
Long-term: A+;

Standard & Poor’s Ratings Japan K.K.

Short-term: A-1;
Outlook: Stable

Moody’s Japan K.K.

Rating: A1; Outlook: Negative

Rating and Investment Information, Inc.

Rating: AA; Outlook: Stable

OUTLOOK
Trends in the Office Leasing Market
Forecasts call for the Japanese economy to recover, buoyedmainly by rising exports thanks to the correction of the yen’s
appreciation along with a turnaround in consumption as the

10 Japan Real Estate Investment Corporation

effects of economic policies, starting with monetary policy, takehold and begin to pull the nation out of deflation. Despite
skepticism and wariness regarding the policies—as well as suchrisk factors as the global economic slowdown and international
tensions—individuals and corporations have regained
confidence, and Japan is expected to head toward real recovery.
In the market for leased office space, vacancy rates areprojected to continue to show moderate improvement. Having
almost bottomed out, market rent levels are set to begin rising,led by highly competitive properties. The improvement is
attributable to the increased affordability for tenants facilitatedby lower rents due to price adjustments made to date as well asa decrease in the supply of new buildings and vacancy rates.
Regarding property markets, the Company believes thatthe difficulties encountered in prime property acquisition willcontinue to increase due to a fund-raising environment thatremains accommodative along with a strong sense that property
prices will rise. In order to continue steadily acquiring prime
properties, the Company considers it important to maintain aframework that allows it to undertake the acquisition ofproperties based on agile and accurate decision making. Thisapproach is achieved by conducting detailed analyses of leasing
markets while acquiring sales information through a variety ofproperty information channels.

Growth Strategies
The Company adheres to the following management policies inorder to maintain and improve profitability.
First, the Company works to strengthen relationships oftrust with existing tenants. As of March 31, 2013, the Company
had contracts with 11 property management companies. Mostof these companies were already handling the management of
their buildings before the Company acquired them and had thus
built relationships of trust with their tenants. The Company will
work to further strengthen these relationships by anticipating
tenants’ needs and providing tailored services to increase tenantsatisfaction, thereby maintaining occupancy rates anddisincentivizing rent reduction requests.
Second, we endeavor to implement effective initiatives
to fill vacancies in a prompt manner. In cooperation with theproperty management companies mentioned above, theCompany actively seeks the most appropriate tenants for each
property, based on location and features, in order to fill current
and anticipated vacancies as rapidly as possible. Furthermore,
the Company works to uncover additional needs for floor spaceamong existing tenants.
Third, with the aim of stabilizing revenues and earnings,

Noritada Terasawa (Left)
Executive Director of Japan Real Estate Investment Corporation

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

the Company endeavors to secure fixed- and long-term leasing
agreements with its large-scale tenants.
Lastly, we aim to continuously reduce management costs.
The Company has introduced sound competitive principles for
its multiple property management companies to follow and isrevamping their management systems and cost structures on an
ongoing basis.
With regard to the acquisition of properties, theCompany has adopted the following policies.
First, to access information quickly, the Company
continues to enhance its property information channels whileworking to develop new channels.
Second, in its acquisition activities, the Company
continues to meticulously monitor and examine economic,
physical and legal factors, including rights-related issues, whenselecting properties. In particular, with regard to the structure ofbuildings, the Company requires buildings to meet or exceed
new earthquake-resistance standards, making appropriate
renovations based on engineering reports, and exclusively targets
properties capable of maintaining a competitive edge in terms of
the facilities they offer over the medium to long term.
Third, in accordance with its acquisition policies, theCompany shall maintain its portfolio so that 70% or more of theportfolio properties are located within the Tokyo metropolitanarea, with the remaining 30% or fewer located in other major
cities.
Under these policies, the Company will continue toacquire highly competitive properties. At the same time, tofurther enhance the quality of its portfolio, the Company willremain open to the replacement of portfolio properties with due
consideration given to timing.

funding costs, the Company negotiates with several qualified
institutional investors (limited to those defined under the Special
Taxation Measures Law of Japan) before executing a loan
agreement.

Performance Forecasts for the 24th and 25th Fiscal Periods
For the 24th fiscal period (April 1, 2013 to September 30, 2013),
the Company forecasts operating revenues totaling 25,980
million yen, operating income totaling 10,770 million yen,ordinary income totaling 9,020 million yen and net income
totaling 9,000 million yen. The Company plans to declare a cash
dividend totaling 15,160 yen per unit.
For the 25th fiscal period (October 1, 2013 to March 31,2014), the Company forecasts operating revenues totaling
25,720 million yen, operating income totaling 10,750 million
yen, ordinary income totaling 9,020 million yen and net income
totaling 9,000 million yen. The Company plans to declare a cash
dividend totaling 15,160 yen per unit.
Actual operating revenues, operating income, ordinary
income, net income and cash dividends per unit may varydepending on circumstances.
As previously stated in the Trends in the Office Leasing
Market section above, market rent levels are on the verge of aturnaround, but it is expected that the recovery of the existing
portfolio will lag slightly behind this recovery.
Looking ahead, the Company will continue to strive forfurther external growth while maintaining stable cash dividends,
leveraging its sound financial standing.
You have placed considerable trust in us. Going forward,
we seek to continue earning that trust through sustainablegrowth and performance. Thank you for your steadfast support.

Financing Strategies
In principle, the Company maintains an LTV ratio that does notexceed 65%. To ensure an even lower interest-bearing debt ratio,
the Company adopts the conservative target level of 30% to40%.
As for the financing of property acquisitions, theCompany uses, in a flexible manner, a variety of funding
schemes—including the issue of investment corporation
bonds—while maintaining a sound and conservative financial
standing and closely monitoring trends in financial markets.
When obtaining a loan, the Company strictly adheres to its
financial policies. Specifically, with the aim of minimizing

Noritada Terasawa
Executive Director of Japan Real Estate Investment Corporation

Hiroshi Katayama
CEO & President of Japan Real Estate Asset Management Co., Ltd.
Japan Real Estate Investment Corporation 11

The Portfolio of Japan Real Estate Investment Corporation As of March 31, 2013
Properties Roster
Number Name of building
Tokyo 23 wards
Genki Medical Plaza
쎲I- 1
Kitanomaru Square
쎲I- 2
MD Kanda Building
쎲I- 3
Kandabashi Park Building쎲I- 4
Nibancho Garden
쎲 I- 5
Mitsubishi UFJ Trust and Banking Building쎲I- 6
Burex Kojimachi Building
쎲I- 7
Sanno Grand Building쎲I- 8

Location

Type ofspecified asset

Acquisition
date

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

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

쎲I- 9
쎲I- 10쎲I- 11
쎲I- 12
쎲 I- 13
쎲I- 14

Yurakucho Denki Building
Kodenmacho Shin-Nihonbashi Building
Kyodo Building (Kayabacho 2Chome)
Burex Kyobashi Building
Ginza Sanwa Building
Ryoshin Ginza East Mirror Building

Yurakucho, Chiyoda-ku
Nihonbashi-Kodenmacho, Chuo-ku
Nihonbashi-Kayabacho, Chuo-ku
Kyobashi, Chuo-ku
Ginza, Chuo-ku
Ginza, Chuo-ku

Real property
Trust
Trust
Real property
Real property
Real property

쎲I- 15
쎲I- 16
쎲I- 17
쎲I- 18
쎲 I- 19

Harumi Front
Harumi Center Building
Akasaka Park Building
Aoyama Crystal Building
Shiodome Building

Harumi, Chuo-ku
Harumi, Chuo-ku
Akasaka, Minato-ku
Kita-Aoyama, Minato-ku
Kaigan, Minato-ku

Real property
Real property
Real property
Real property
Trust쎲I- 20쎲I- 21
쎲I- 22
쎲I- 23

Shiba 2Chome Daimon Building
Cosmo Kanasugibashi Building
Shinwa Building
Tokyo Opera City Building

Shiba, Minato-ku
Shiba, Minato-ku
Nishi-Shinjuku, Shinjuku-ku
Nishi-Shinjuku, Shinjuku-ku

Trust
Trust
Real property
Real property

쎲 I- 24
쎲 I- 25
쎲I- 26
쎲I- 27
쎲I- 28
쎲 I- 29
쎲 I- 30
쎲 I- 31
쎲I- 32
쎲I- 33

TIXTOWER UENO
Higashi-Gotanda 1Chome Building
Osaki Front Tower
Omori-Eki Higashiguchi Building
Nippon Brunswick Building
Yoyogi 1Chome Buildingda Vinci Harajuku
Jingumae Media Square Building
Shibuya Cross Tower
Ebisu Neonato

Higashi-Ueno, Taito-ku
Higashi-Gotanda, Shinagawa-ku
Osaki, Shinagawa-ku
Omori-Kita, Ota-ku
Sendagaya, Shibuya-ku
Yoyogi, Shibuya-ku
Jingumae, Shibuya-ku
Jingumae, Shibuya-ku
Shibuya, Shibuya-ku
Ebisu, Shibuya-ku

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

쎲I- 34Harmony Tower

Honcho, Nakano-ku

Real property

Otsuka Higashi-Ikebukuro Building쎲I- 35
Ikebukuro 2Chome Building쎲I- 36
Ikebukuro YS Building쎲I- 37
Tokyo metropolitan area, excluding 23 wards
Hachioji First Square쎲II- 1

Higashi-Ikebukuro, Toshima-ku
Ikebukuro, Toshima-ku
Minami-Ikebukuro, Toshima-ku

Trust
Trust
Real property

10/31/2002
02/24/2006
05/31/2002
08/15/2002
04/01/2005
03/28/2007
07/29/2005
01/31/2005
04/03/2006
total
08/01/2003
09/25/2001
03/01/2011
07/22/2002
03/10/2005
03/15/2005
05/24/2010
total
01/07/2013
12/18/2007
11/15/2011
03/14/2003
12/19/2008
01/15/2010
total
09/10/2001
09/25/2001
09/01/2004
09/13/2005
03/24/2010
total
06/15/2012
11/01/2004
02/01/2011
09/10/2001
03/24/2004
04/01/2004
11/22/2002
10/09/2003
11/30/2001
11/14/2003
04/01/2004
total
02/28/2005
12/19/2012
total
09/25/2001
09/25/2001
08/02/2004

5,000
81,555
9,520
4,810
14,70044,7007,000
10,20010,70020,900
7,200
3,173
4,410
5,250
16,830
5,353
2,645
7,999
31,30026,80060,8007,680
21,25054,60075,850
4,859
2,808
7,830
9,350
22,426
31,77622,0005,500
12,300
5,123
6,670
8,700
4,885
12,20034,600
3,740
360
4,100
8,500
520
9,020
3,541
1,728
4,500

Hachioji, Tokyo

Real property쎲 II- 2

Saitama, Saitama Prefecture

Real property

MM Park Building쎲II- 3
Kawasaki Isago Building쎲II- 4
Musashi Kosugi STM Building쎲II- 5
Other major cities
8.3 Square Kita Building
쎲 III- 1
Jozenji Park Building
쎲 III- 2
Higashi Nibancho Suqare
쎲 III- 3
Sendai Honcho Honma Building쎲III- 4

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

Real property
Trust
Real property

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

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

Sapporo, Hokkaido
Sendai, Miyagi Prefecture
Sendai, Miyagi Prefecture
Sendai, Miyagi Prefecture

Real property
Real property
Real property
Trust쎲III- 5

Kanazawa Park Building

Kanazawa, Ishikawa Prefecture

Real property

쎲III- 6

Nishiki Park Building

Nagoya, Aichi Prefecture

Real property

쎲III- 7
쎲III- 8
쎲III- 9
쎲III- 10
쎲 III- 11
쎲III- 12

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

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

Real property
Real property
Real property
Real property
Trust
Real property

쎲III- 13

Midosuji Daiwa Building

Osaka, Osaka Prefecture

Trust쎲III- 14
쎲III- 15

Lit City Building
NHK Hiroshima Broadcasting Center Building

Okayama, Okayama Prefecture
Hiroshima, Hiroshima Prefecture

Real property
Real property

쎲III- 16
쎲III- 17
쎲III- 18

Tosei Tenjin Building
Tenjin Crystal Building
Hinode Tenjin Building

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

Real property
Real property
Trust

06/01/2007
01/31/2005
01/07/2013
09/25/2001
06/28/2006
total
02/28/2002
03/03/2003
total
10/02/2006
11/01/2006
total
09/22/2006
09/10/2001
08/08/2003
12/20/2001
09/01/2008
09/25/2001
12/26/2003
total
09/25/2001
02/28/2002
total
02/01/2006
03/25/2004
03/03/2008
total
09/25/2001
06/01/2005
09/10/2001

7,100
1,000
9,950
2,924
250
3,174
2,880
1,700
4,580
3,850
1,300
5,150
1,680
14,5331,865
2,650
24,000
2,264
1,900
4,164
6,934
7,380
14,314
4,650
1,320
1,450
2,770
1,550
5,000
3,657

Saitama Urawa Building

Total

12 Japan Real Estate Investment Corporation

Acquisition price(¥ mil)782,433(0.6%)(10.4%)(1.2%)(0.6%)(1.9%)(5.7%)(0.9%)(2.7%)(0.9%)(0.4%)(0.6%)(0.7%)(2.2%)(1.0%)(4.0%)(3.4%)(7.8%)(1.0%)(9.7%)(0.6%)(0.4%)(1.0%)(4.1%)(2.8%)(0.7%)(1.6%)(0.7%)(0.9%)(1.1%)(0.6%)(1.6%)(4.4%)(0.5%)(1.2%)(0.5%)(0.2%)(0.6%)(0.7%)(0.3%)(4.8%)(0.4%)(0.5%)(0.9%)(0.1%)(1.3%)(0.4%)(0.6%)(0.7%)(0.2%)(1.9%)(0.2%)(0.3%)(3.1%)(0.5%)(1.8%)(0.6%)(0.4%)(0.2%)(0.6%)(0.5%)(100.0%)Percentage ofownership of thebuilding

Completion

Appraisal value atthe end of
period (¥ mil)Leasable space

Leased space

Occupancy
rate

Numberof tenants

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

1985
2006
1998
1993
2004
2003
2005
1966

6,330
70,6007,540
4,140
16,50045,0005,920
29,2004,791m2
25,678m2
6,269m2
3,687m2
9,316m2
11,904m2
4,495m2
20,871m2

4,791m2
25,678m2
6,269m2
3,687m2
9,316m2
11,904m2
4,495m2
20,020m2

100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
95.9%

1
4
8
10
1
10
1
36

225
1,680
210
124
479
983
150
960

(0.9%)(6.6%)(0.8%)(0.5%)(1.9%)(3.9%)(0.6%)(3.8%)

10.78%
100.0%
100.0%
100.0%
70.95%
100.0%

1975
1991
1991
2002
1982
1998

7,150
2,950
4,900
6,100
15,1005,190

4,694m2
3,897m2
4,538m2
4,279m2
4,329m2
4,255m2

4,182m2
3,604m2
4,538m2
4,279m2
4,329m2
4,255m2

89.1%
92.5%
100.0%
100.0%
100.0%
100.0%

12
9
9
1
10
12

227
118
179
150
370
167

(0.9%)(0.5%)(0.7%)(0.6%)(1.5%)(0.7%)

100.0%
100.0%
100.0%
100.0%
40.0%

2012
2006
1993
1982
2007

32,90019,80062,5007,210
77,20033,369m2
20,812m2
45,013m2
4,898m2
32,155m2

32,894m2
20,812m2
44,246m2
3,741m2
30,623m2

98.6%
100.0%
98.3%
76.4%
95.2%

5
9
25
5
34

528
612
2,282
184
2,051

(2.1%)(2.4%)(9.0%)(0.7%)(8.1%)

100.0%
100.0%
100.0%
31.325%

1984
1992
1989
1996

5,820
2,770
5,780
29,7009,606m2
4,062m2
6,134m2
35,050m2

9,606m2
4,062m2
6,134m2
33,734m2

100.0%
100.0%
100.0%
96.2%

22
7
12
97

281
100
212
1,557

(1.1%)(0.4%)(0.8%)(6.1%)

94.040229%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
12.29939%

2010
2004
2005
1989
1974
2003
1987
1998
1976
1994

23,3005,670
15,220
5,140
6,040
9,850
6,230
9,970
42,1002,910

15,020m2
5,205m2
16,856m2
7,754m2
7,356m2
7,745m2
3,147m2
5,558m2
30,532m2
2,462m2

14,853m2
4,540m2
16,856m2
7,193m2
6,871m2
7,745m2
3,147m2
5,558m2
28,034m2
2,462m2

98.9%
87.2%
100.0%
92.8%
93.4%
100.0%
100.0%
100.0%
91.8%
100.0%

19
3
1
17
18
9
4
5
63
5

678
168
748
228
241
289
192
287
1,005
112

(2.7%)(0.7%)(3.0%)(0.9%)(1.0%)(1.1%)(0.8%)(1.1%)(4.0%)(0.4%)

32.113115%

1997

10,30011,998m2

11,349m2

94.6%

16

355

(1.4%)

100.0%
100.0%
100.0%

1987
1990
1989

3,820
1,660
4,190

7,224m2
2,186m2
5,932m2

7,224m2
2,186m2
5,932m2

100.0%
100.0%
100.0%

6
9
11

196
71
154

(0.8%)(0.3%)(0.6%)

80.4%

1996

4,380

10,068m2

9,465m2

94.0%

41

232

(0.9%)

100.0%

1990

2,040

4,510m2

4,375m2

97.0%

16

101

(0.4%)

100.0%
100.0%
34.32%

2007
1990
1990

34,9002,470
3,630

38,496m2
6,831m2
5,378m2

37,108m2
6,831m2
5,263m2

96.4%
100.0%
97.9%

26
12
23

1,395
128
157

(5.5%)(0.5%)(0.6%)

100.0%
50.0%
100.0%
100.0%

2006
1993
2008
1991

6,730
890
11,5202,480

12,265m2
2,518m2
20,526m2
6,241m2

12,265m2
2,518m2
19,926m2
5,551m2

100.0%
100.0%
97.1%
88.9%

8
18
17
19

316
68
292
122

(1.2%)(0.3%)(1.2%)(0.5%)

89.0%

1991

4,280

20,889m2

19,792m2

94.7%

72

450

(1.8%)

57.04651%

1995

3,580

8,056m2

7,557m2

93.8%

59

228

(0.9%)

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

1987
1987
1991
1982
1995
1992

1,440
12,6001,110
1,790
16,4003,630

3,911m2
21,624m2
3,448m2
6,802m2
28,414m2
11,556m2

3,121m2
21,113m2
3,092m2
5,662m2
26,567m2
11,350m2

79.8%
97.6%
89.7%
83.2%
93.5%
98.2%

12
30
14
32
41
20

87
581
68
112
730
238

(0.3%)(2.3%)(0.3%)(0.4%)(2.9%)(0.9%)

100.0%

1991

13,70020,450m2

20,275m2

99.1%

39

556

(2.2%)

27.7488%
48.753%

2005
1994

4,220
2,450

9,965m2
9,860m2

9,965m2
9,860m2

100.0%
100.0%

42
12

256
261

(1.0%)(1.0%)

100.0%
100.0%
74.4844%

1992
1993
1987

1,260
2,470
3,540
758,2104,000m2
5,973m2
5,868m2

4,000m2
5,445m2
5,532m2
2
677,816m

100.0%
91.2%
94.3%

19
28
5

(0.3%)(0.6%)(0.7%)

96.7%

1,131

85
142
169
25,357700,759m2

Revenues from leasing
operations (¥ mil)(100.0%)Japan Real Estate Investment Corporation 13

Major Tenants Roster
Rank

1
2
3
4
5
6
7
8
9
10

Name of tenant

Name of building

The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Harumi Front (also includes 3 other buildings)(Note)
Kitanomaru Square (also includes 2 other buildings)
General Electric Company
Akasaka Park Building
Mitsubishi Estate Co., Ltd.
Osaki Front Tower (also includes 1 other building)
HAKUHODO DY HOLDINGS INCORPORATED Akasaka Park Building (also includes 1 other building)
NTT Communications Corporation
Shiodome Building
Mitsubishi UFJ Trust and Banking Corporation
Mitsubishi UFJ Trust and Banking Building
TOTO LTD.
Shiodome Building (also includes 2 other buildings)
Seven & i Holdings Co., Ltd.
Nibancho Garden
Space Design, Inc.
Burex Kojimachi Building (also includes 1 other building)Leased space% of totalleased space

33,901m2
26,061m2
18,842m2
17,213m2
11,999m2
11,813m2
10,598m2
10,570m2
9,316m2
8,774m2

5.0%
3.8%
2.8%
2.5%
1.8%
1.7%
1.6%
1.6%
1.4%
1.3%

Note: Not disclosed as per tenant request

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

III-1 to III-18: Other major cities

III-1

II-2
II-1
III-2 III-4
III-3

II-5
II-3

III-5

II-4

III-8III-6
III-11
III-7
III-14 III-12
III-10III-9
III-13
III-16 III-15
III-18 III-17

I-1 to I-37: Tokyo
23 wards

I-36
I-37 I-35
I-24
I-1

I-34

I-2
I-3
I-5
I-22
I-4
I-28
I-10
I-7
I-23
I-29 I-30 I-8 I-6 I-13 I-12
I-31 I-17 I-9 I-14 I-11
I-32
I-15
I-19
I-18
I-16
I-20
I-33
I-21
I-25
I-26

I-27

Tokyo Station

14 Japan Real Estate Investment Corporation

Overview of Portfolio Properties As of March 31, 2013
Note: Concerning real estate or trust beneficiary rights in trust of real estate of which the Company is a partial owner through co-ownership or compartmentalized building units or
quasi-co-ownership, the figures for “Site area” and “Floor area of building” represent total site area and total floor space for the entire building.

Genki Medical
Plaza

Kitanomaru
SquareMD Kanda
Building

쎲 I-1

쎲 I-2

쎲 I-3

Location:
Chiyoda-ku, Tokyo
Site area:
1,052.80m2
Floor area of building: 6,722.02m2
Structure:
Above ground: 8 floors
Below ground: 1 floor
Completion:
September 1985

Location:
Chiyoda-ku, Tokyo
Site area:
5,821.03m2
Floor area of building: 57,279.20m2
Structure:
Above ground: 26 floors
Below ground: 2 floors
Completion:
January 2006

Location:
Chiyoda-ku, Tokyo
Site area:
1,085.83m2
Floor area of building: 8,185.11m2
Structure:
Above ground: 10 floors
Completion:
February 1998

Kandabashi Park
Building

Nibancho Garden

Mitsubishi UFJ
Trust andBanking Building

쎲 I-4

쎲 I-5

쎲 I-6

Location:
Chiyoda-ku, Tokyo
Site area:
1,218.56m2
Floor area of building: 9,370.25m2
Structure:
Above ground: 10 floors
Below ground: 1 floor
Completion:
July 1993

Location:
Chiyoda-ku, Tokyo
Site area:
11,003.87m2
Floor area of building: 57,031.06m2
Structure:
Above ground: 14 floors
Below ground: 2 floors
Completion:
April 2004

Location:
Chiyoda-ku, Tokyo
Site area:
8,100.39m2
Floor area of building: 108,171.67m2
Structure:
Above ground: 29 floors
Below ground: 4 floors
Completion:
February 2003

Burex Kojimachi
Building

Sanno Grand
Building

Yurakucho Denki
Building

쎲 I-7

쎲 I-8

쎲 I-9

Location:
Chiyoda-ku, Tokyo
Site area:
967.67m2
Floor area of building: 6,526.64m2
Structure:
Above ground: 11 floors
Below ground: 1 floor
Completion:
January 2005

Location:
Chiyoda-ku, Tokyo
Site area:
3,663.93m2
Floor area of building: 33,875.95m2
Structure:
Above ground: 10 floors
Below ground: 3 floors
Completion:
September 1966

Location:
Chiyoda-ku, Tokyo
Site area:
5,749.91m2
Floor area of building: 70,287.65m2
Structure:
Above ground: 20 floors
Below ground: 4 floors
Completion:
September 1975

Kodenmacho
Shin-Nihonbashi
Building

Kyodo Building(Kayabacho
2Chome)Burex Kyobashi
Building

쎲 I-10쎲 I-11

쎲 I-12

Location:
Chuo-ku, Tokyo
Site area:
773.28m2
Floor area of building: 5,822.88m2
Structure:
Above ground: 9 floors
Below ground: 1 floor
Completion:
November 1991

Location:
Chuo-ku, Tokyo
Site area:
754.26m2
Floor area of building: 5,505.80m2
Structure:
Above ground: 9 floors
Below ground: 1 floor
Completion:
April 1991

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

Japan Real Estate Investment Corporation 15

Ginza Sanwa
Building

Ryoshin Ginza
East Mirror
Building

Harumi Front쎲 I-13

쎲 I-14

쎲 I-15

Location:
Chuo-ku, Tokyo
Site area:
1,119.27m2
Floor area of building: 8,851.00m2
Structure:
Above ground: 9 floors
Below ground: 2 floors
Completion:
October 1982

Location:
Chuo-ku, Tokyo
Site area:
864.91m2
Floor area of building: 5,751.68m2
Structure:
Above ground: 8 floors
Below ground: 1 floor
Completion:
October 1998

Location:
Chuo-ku, Tokyo
Site area:
7,250.15m2
Floor area of building: 45,458.90m2
Structure:
Above ground: 17 floors
Below ground: 1 floor
Completion:
February 2012

Harumi Center
Building

Akasaka Park
Building

Aoyama Crystal
Building

쎲 I-16

쎲 I-17

쎲 I-18Location:
Chuo-ku, Tokyo
Site area:
4,664.63m2
Floor area of building: 26,447.27m2
Structure:
Above ground: 10 floors
Completion:
November 2006

Location:
Minato-ku, Tokyo
Site area:
14,198.20m2
Floor area of building: 97,489.16m2
Structure:
Above ground: 30 floors
Below ground: 2 floors
Completion:
July 1993

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

Shiodome
Building

Shiba 2Chome
Daimon Building

Cosmo
Kanasugibashi
Building

쎲 I-19

쎲 I-20쎲 I-21

Location:
Minato-ku, Tokyo
Site area:
12,046.00m2
Floor area of building: 115,930.83m2
Structure:
Above ground: 24 floors
Below ground: 2 floors
Completion:
December 2007

Location:
Minato-ku, Tokyo
Site area:
2,820.90m2
Floor area of building: 16,235.10m2
Structure:
Above ground: 8 floors
Below ground: 2 floors
Completion:
March 1984

Location:
Minato-ku, Tokyo
Site area:
758.54m2
Floor area of building: 5,420.93m2
Structure:
Above ground: 9 floors
Below ground: 1 floor
Completion:
March 1992

Shinwa Building

Tokyo Opera
City Building

TIXTOWER
UENO쎲 I-22

쎲 I-23

쎲 I-24

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

16 Japan Real Estate Investment Corporation

Location:
Shinjuku-ku, Tokyo
Site area:
18,236.94m2
Floor area of building: 232,996.81m2
Structure:
Above ground: 54 floors
Below ground: 4 floors
Completion:
July 1996

Location:
Taito-ku, Tokyo
Site area:
2,412.80m2
Floor area of building: 23,727.48m2
Structure:
Above ground: 18 floors
Below ground: 1 floor
Completion:
July 2010

Higashi-Gotanda
1Chome Building

Osaki Front
Tower

Omori-Eki
Higashiguchi
Building

쎲 I-25

쎲 I-26

쎲 I-27

Location:
Shinagawa-ku, Tokyo
Site area:
1,539.95m2
Floor area of building: 6,460.39m2
Structure:
Above ground: 8 floors
Completion:
July 2004

Location:
Shinagawa-ku, Tokyo
Site area:
3,684.38m2
Floor area of building: 23,673.92m2
Structure:
Above ground: 15 floors
Completion:
June 2005

Location:
Ota-ku, Tokyo
Site area:
2,199.30m2
Floor area of building: 14,095.34m2
Structure:
Above ground: 11 floors
Below ground: 2 floors
Completion:
July 1989

NipponBrunswick
Building

Yoyogi 1Chome
Buildingda Vinci
Harajuku

쎲 I-28

쎲 I-29

쎲 I-30Location:
Shibuya-ku, Tokyo
Site area:
1,497.52m2
Floor area of building: 11,957.38m2
Structure:
Above ground: 9 floors
Below ground: 2 floors
Completion:
March 1974

Location:
Shibuya-ku, Tokyo
Site area:
1,755.75m2
Floor area of building: 10,778.10m2
Structure:
Above ground: 14 floors
Below ground: 1 floor
Completion:
October 2003

Location:
Shibuya-ku, Tokyo
Site area:
839.66m2
Floor area of building: 4,359.20m2
Structure:
Above ground: 7 floors
Below ground: 2 floors
Completion:
December 1987

Jingumae Media
Square Building

Shibuya Cross
Tower

Ebisu Neonato

쎲 I-31

쎲 I-32

쎲 I-33

Location:
Shibuya-ku, Tokyo
Site area:
2,124.59m2
Floor area of building: 9,420.42m2
Structure:
Above ground: 9 floors
Below ground: 2 floors
Completion:
March 1998

Location:
Shibuya-ku, Tokyo
Site area:
5,153.45m2
Floor area of building: 61,862.33m2
Structure:
Above ground: 32 floors
Below ground: 3 floors
Completion:
April 1976

Location:
Shibuya-ku, Tokyo
Site area:
5,005.70m2
Floor area of building: 36,598.38m2
Structure:
Above ground: 18 floors
Below ground: 2 floors
Completion:
October 1994

Harmony Tower

Otsuka HigashiIkebukuro
Building

Ikebukuro
2Chome Building쎲 I-34

쎲 I-35

쎲 I-36

Location:
Nakano-ku, Tokyo
Site area:
10,020.52m2
Floor area of building: 72,729.31m2
Structure:
Above ground: 29 floors
Below ground: 2 floors
Completion:
March 1997

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

Location:
Toshima-ku, Tokyo
Site area:
397.26m2
Floor area of building: 3,157.51m2
Structure:
Above ground: 9 floors
Below ground: 1 floor
Completion:
May 1990

Japan Real Estate Investment Corporation 17

Ikebukuro YS
Building

Hachioji First
SquareSaitama Urawa
Building

쎲 I-37

쎲 II-1

쎲 II-2

Location:
Toshima-ku, Tokyo
Site area:
1,384.56m2
Floor area of building: 7,464.64m2
Structure:
Above ground: 8 floors
Below ground: 1 floor
Completion:
December 1989

Location:
Hachioji, Tokyo
Site area:
2,989.33m2
Floor area of building: 18,329.98m2
Structure:
Above ground: 12 floors
Below ground: 1 floor
Completion:
July 1996

Location:
Saitama, Saitama Prefecture
Site area:
1,533.06m2
Floor area of building: 6,258.59m2
Structure:
Above ground: 8 floors
Completion:
March 1990

MM Park
Building

Kawasaki Isago
Building

Musashi Kosugi
STM Building쎲 II-3쎲 II-4

쎲 II-5

Location:
Yokohama, Kanagawa Prefecture
Site area:
6,825.77m2
Floor area of building: 49,037.51m2
Structure:
Above ground: 15 floors
Below ground: 1 floor
Completion:
December 2007

Location:
Kawasaki, Kanagawa Prefecture
Site area:
1,594.50m2
Floor area of building: 9,623.83m2
Structure:
Above ground: 12 floors
Below ground: 1 floor
Completion:
December 1990

Location:
Kawasaki, Kanagawa Prefecture
Site area:
3,552.15m2
Floor area of building: 22,839.61m2
Structure:
Above ground: 8 floors
Below ground: 2 floors
Completion:
October 1990

8•3 Square Kita
Building

Jozenji Park
Building

HigashiNibancho Square쎲 III-1

쎲 III-2

쎲 III-3

Location:
Sapporo, Hokkaido
Site area:
5,541.60m2
Floor area of building: 16,096.97m2
Structure:
Above ground: 11 floors
Below ground: 1 floor
Completion:
December 2006

Location:
Sendai, Miyagi Prefecture
Site area:
1,566.68m2
Floor area of building: 7,648.33m2
Structure:
Above ground: 8 floors
Below ground: 1 floor
Completion:
January 1993

Location:
Sendai, Miyagi Prefecture
Site area:
3,191.27m2
Floor area of building: 27,680.45m2
Structure:
Above ground: 14 floors
Below ground: 1 floor
Completion:
July 2008

Sendai Honcho
Honma Building

Kanazawa Park
Building

Nishiki Park
Building

쎲 III-4

쎲 III-5

쎲 III-6

Location:
Sendai, Miyagi Prefecture
Site area:
1,437.47m2
Floor area of building: 8,247.50m2
Structure:
Above ground: 11 floors
Completion:
November 1991

18 Japan Real Estate Investment Corporation

Location:
Kanazawa, Ishikawa Prefecture
Site area:
6,642.71m2
Floor area of building: 43,481.20m2
Structure:
Above ground: 12 floors
Below ground: 2 floors
Completion:
October 1991

Location:
Nagoya, Aichi Prefecture
Site area:
2,170.45m2
Floor area of building: 25,091.91m2
Structure:
Above ground: 22 floors
Below ground: 4 floors
Completion:
August 1995

Hirokoji Sakae
Building

Nagoya Hirokoji
Building

Nagoya Misono
Building

쎲 III-7

쎲 III-8

쎲 III-9Location:
Nagoya, Aichi Prefecture
Site area:
786.79m2
Floor area of building: 6,445.08m2
Structure:
Above ground: 9 floors
Below ground: 2 floors
Completion:
September 1987

Location:
Nagoya, Aichi Prefecture
Site area:
4,095.81m2
Floor area of building: 33,377.73m2
Structure:
Above ground: 18 floors
Below ground: 2 floors
Completion:
May 1987

Location:
Nagoya, Aichi Prefecture
Site area:
805.04m2
Floor area of building: 5,348.00m2
Structure:
Above ground: 7 floors
Below ground: 1 floor
Completion:
September 1991

Kyoto Shijo
Kawaramachi
Building

Shin-Fujita
Building

Sakaisujihonmachi
Building

쎲 III-10

쎲 III-11

쎲 III-12

Location:
Kyoto, Kyoto Prefecture
Site area:
1,471.57m2
Floor area of building: 9,701.04m2
Structure:
Above ground: 9 floors
Below ground: 1 floor
Completion:
November 1982

Location:
Osaka, Osaka Prefecture
Site area:
6,159.61m2
Floor area of building: 45,411.31m2
Structure:
Above ground: 21 floors
Below ground: 2 floors
Completion:
April 1995

Location:
Osaka, Osaka Prefecture
Site area:
2,036.22m2
Floor area of building: 17,145.59m2
Structure:
Above ground: 13 floors
Below ground: 2 floors
Completion:
October 1992

Midosuji Daiwa
Building

Lit City Building

NHK Hiroshima
Broadcasting
Center Building

쎲 III-13

쎲 III-14

쎲 III-15

Location:
Osaka, Osaka Prefecture
Site area:
3,044.65m2
Floor area of building: 31,213.27m2
Structure:
Above ground: 15 floors
Below ground: 2 floors
Completion:
September 1991

Location:
Okayama, Okayama Prefecture
Site area:
7,596.44m2
Floor area of building: 52,653.19m2
Structure:
Above ground: 20 floors
Below ground: 2 floors
Completion:
June 2005

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

Tosei Tenjin
Building

Tenjin Crystal
Building

Hinode Tenjin
Building

쎲 III-16

쎲 III-17

쎲 III-18

Location:
Fukuoka, Fukuoka Prefecture
Site area:
1,221.31m2
Floor area of building: 5,588.57m2
Structure:
Above ground: 8 floors
Completion:
March 1992

Location:
Fukuoka, Fukuoka Prefecture
Site area:
1,835.17m2
Floor area of building: 10,432.04m2
Structure:
Above ground: 14 floors
Below ground: 1 floor
Completion:
August 1993

Location:
Fukuoka, Fukuoka Prefecture
Site area:
1,452.15m2
Floor area of building: 12,527.07m2
Structure:
Above ground: 10 floors
Below ground: 2 floors
Completion:
August 1987

Japan Real Estate Investment Corporation 19

20 Japan Real Estate Investment Corporation

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

p.21
p.22
p.24
p.24
p.25
p.26
p.38

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

Millions of yen

For the period from For the period from For the period from For the period from For the period from For the period from
October 1, 2012 toApril 1, 2012 to
October 1, 2011 toApril 1, 2011 to
October 1, 2010 to October 1, 2012 toMarch 31, 2013 September 30, 2012 March 31, 2012 September 30, 2011 March 31, 2011
March 31, 2013

Operating Revenues¥ 25,357¥ 24,222¥ 24,059¥ 22,829

Operating Expenses

14,72514,00913,273

12,449Operating Income

10,631

10,212

10,786

10,3809,802

113,044

Ordinary Income

8,749

8,372

8,863

8,603

7,938

93,029

Income before Income Taxes

8,749

8,372

8,904

8,614

7,657

93,029Net Income

8,824

8,448

8,934

8,268

7,652

93,830Total Assets

765,628

724,851

703,085

643,949

646,847

8,140,654

Interest-Bearing Debts

311,200

305,750

284,300

269,350

272,400

3,308,878

Net Assets

405,280

372,429

372,869

332,670332,054

4,309,207

Unitholders’ Capital

396,018

363,371363,371324,353

324,353

4,210,721

Number of Units

594,140

549,040

549,040489,200

489,200

594,140

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

682,130

678,328

679,130

680,029

678,770

7,253

8,995

8,619

8,888

7,753

7,652

95,644101.9%

102.0%

99.4%

93.7%

99.9%

101.9%Cash Distribution
Dividend Payout Ratio$ 269,615
For ¥the22,135
period from October
1, 2010 to March 31,
2011156,571
12,333

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

15,14015,70016,19015,85015,642160.98Net Operating Income (NOI)

16,76815,997

16,361

15,121

14,950178,297

Funds from Operations (FFO)

14,032

13,356

13,625

12,154

11,938149,207

Return on Assets (ROA) (Note 2)

1.2%

1.2%

1.3%

1.3%

1.2%

(2.4% annualized)

Return on Equity (ROE) (Note 3)

2.2%(4.4% annualized)(2.3% annualized)

2.3%(4.5% annualized)(2.6% annualized)

2.6%(5.3% annualized)(2.7% annualized)

2.5%(5.0% annualized)(2.5% annualized)

2.3%(4.6% annualized)

1.2%(2.4% annualized)

2.2%(4.4% annualized)

EOP Equity Ratio (Note 4)

52.9%

51.4%

53.0%

51.7%

51.3%

52.9%

EOP Interest-Bearing Debt Ratio on
Total Assets (Note 5)

40.6%

42.2%

40.4%

41.8%

42.1%

40.6%

FFO Multiple

27.2 times

16.2 times

14.7 times

15.2 times

16.1 times

27.2 times

Debt Service Coverage Ratio (Note 6)

8.7 times

8.3 times

8.5 times

8.4 times

7.5 times

8.7 times

Notes 1: Amounts in U.S. dollars are included solely for the convenience of readers outside Japan. The rate of ¥94.05 = US$1.00, the foreign exchange rate on March 31, 2013,
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: ROA = Ordinary Income ÷ Average of Total Assets during the period
3: ROE = Net Income ÷ Average of Net Assets during the period(Annualized portion of the calculation given in Note 2 and Note 3 assumes a fiscal period of 182 days for the period ended March 31, 2011, 183 days for the period
ended September 30, 2011, 183 days for the period ended March 31, 2012, 183 days for the period ended September 30, 2012 and 182 days for the period ended
March 31, 2013.)
4: EOP Equity Ratio = (Net Assets at the end of period ÷ Total Assets at the end of period) × 100
5: EOP Interest-Bearing Debt Ratio on Total Assets = (Interest-Bearing Debt at the end of period ÷ Total Assets at the end of period) × 100
6: Debt Service Coverage Ratio = Net Income before Interest, Taxes, Depreciation and Amortization ÷ Interest Expenses

Japan Real Estate Investment Corporation 21

Balance Sheets
As of March 31, 2013 and September 30, 2012

Thousands of yen

U.S. dollars (Note 1)

As ofMarch 31, 2013

As of
September 30, 2012

As ofMarch 31, 2013ASSETS
Current Assets:
Cash and bank deposits¥ 23,276,582¥ 22,014,749$ 247,491,573

Rental receivables

104,865

160,820

1,115,000

Refundable consumption taxes

472,497—

5,023,896

Other current assets

148,460

109,335

1,578,525

24,002,405

22,284,905

255,208,994

Land

503,044,948

483,609,480

5,348,696,957

Buildings and structures

291,066,859

266,742,264

3,094,809,774

Machinery and equipment

3,564,066

3,287,724

37,895,440

Tools, furniture and fixtures

229,005

211,274

2,434,938

Total current assets

Property and Equipment, at Cost:

Construction in progress
Subtotal

225,278

3,050

2,395,309

798,130,158

753,853,793

8,486,232,417

Accumulated depreciation(65,638,017)(60,448,699)(697,905,551)

Total property and equipment

732,492,141

693,405,094

7,788,326,865

577,168

577,168

6,136,822

1,071,830

1,071,830

11,396,389

14,545

10,227

154,653

6,580,957

6,596,787

69,972,966

828,095

828,095

8,804,842

Investments and Other Assets:
Investment securities
Deposits
Long-term prepaid expenses
Leasehold rights
Easement
Deferred investment corporation bond issuance costs
Total Assets
The accompanying notes form an integral part of these financial statements.

22 Japan Real Estate Investment Corporation

61,38277,851

652,656¥765,628,526¥724,851,959$8,140,654,187

Thousands of yen

U.S. dollars (Note 1)

As ofMarch 31, 2013

As of
September 30, 2012

¥

¥

As of
March 31, 2013

LIABILITIESCurrent Liabilities:
Trade accounts payable

601,506

1,127,860$

6,395,609

Other payables

1,072,531

879,516

11,403,848

Short-term loans

18,000,000

13,500,000

191,387,560

Current portion of long-term loans

34,100,000

70,100,000

362,573,099

Accrued expenses

826,056

858,686

8,783,167

Income taxes payable

11,103

7,817

118,057—

179,150—

Rent received in advance

3,245,771

3,151,166

34,511,132

Other current liabilities

3,170

2,697

33,71457,860,141

89,806,894

615,206,185

Investment corporation bonds

45,000,000

45,000,000

478,468,900

Long-term loans

214,100,000

177,150,000

2,276,448,698

Deposits received from tenants

42,958,359

39,950,918

456,760,871

Deferred tax liabilities

122,812211,3091,305,825

Asset retirement obligations

306,334

303,279

3,257,146

Total long-term liabilities

302,487,507

262,615,507

3,216,241,438

Total Liabilities

360,347,648

352,422,401

3,831,447,623

396,018,317

363,371,780

4,210,721,074

Accrued consumption taxes

Total current liabilities

Long-Term Liabilities:

NET ASSETS
Unitholders’ Equity:
Unitholders’ capital
Authorized: 2,000,000 units
Issued:594,140 units as of March 31, 2013 and549,040 units as of September 30, 2012
Surplus
Voluntary reserve
Reserve for reduction entry

407,278

578,6144,330,450

8,855,281

8,479,163

94,155,040

9,262,560

9,057,778

98,485,490

Total unitholders’ equity

405,280,877

372,429,558

4,309,206,564

Total net assets

405,280,877

372,429,558

4,309,206,564

Total Liabilities and Net Assets¥765,628,526¥724,851,959$8,140,654,187

Retained earnings
Total surplus

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

Japan Real Estate Investment Corporation 23

Statements of Income and Retained Earnings
For the six months ended March 31, 2013 and September 30, 2012

Thousands of yen

U.S. dollars (Note 1)

For the period
from October 1, 2012
to March 31, 2013

For the period
from April 1, 2012
to September 30, 2012

For the period
from October 1, 2012
to March 31, 2013

OPERATING REVENUES AND EXPENSES
Operating Revenues:
Rental revenues
Non-rental revenues
Total operating revenues¥25,070,031
287,222
25,357,253¥24,130,936
91,747
24,222,684$266,560,675
3,053,931
269,614,606

Operating Expenses:
Property-related expenses
Asset management fees
Administrative service fees
Professional fee
Other operating expenses
Total operating expenses
Operating Income

13,796,651
592,000
198,583
73,57664,671
14,725,482
10,631,771

13,133,140
571,148
196,82151,732
57,05014,009,893
10,212,790

146,694,860
6,294,525
2,111,470
782,308
687,625
156,570,787
113,043,819

9,295
—
5,448
—

7,756
19,724
1,747
6,216

98,838—57,927—

Non-Operating Expenses:
Interest expense
Interest expense on investment corporation bonds
Amortization of investment corporation bond issuance costs
New unit issuance costs
Other non-operating expenses
Ordinary Income

1,419,873
386,112
16,46947,79826,901
8,749,359

1,407,717
421,732
18,837—
27,152
8,372,795

15,097,004
4,105,400
175,111508,225
286,030
93,028,813

Income before Income Taxes

8,749,359

8,372,795

93,028,813

13,169(88,519)
8,824,710
30,571¥ 8,855,281

12,899(88,696)
8,448,592
30,571¥ 8,479,163

140,028(941,201)
93,829,987
325,053$ 94,155,040

NON-OPERATING REVENUES AND EXPENSES
Non-Operating Revenues:
Interest income
Dividends income
Return of unclaimed distributions
Interest on tax refund

Income Taxes:
Current
Deferred
Net Income
Retained Earnings Brought Forward
Retained Earnings at End of Period

Statements of Changes in Unitholders’ Equity
For the six months ended March 31, 2013 and September 30, 2012

Balance as of April 1, 2012
Provision of reserve for reduction entry
Cash dividends paid
Net income
Balance as of September 30, 2012
Provision of reserve for reduction entry
New unit issuanceCash dividends paid
Net income
Balance as of March 31, 2013

Balance as of October 1, 2012
Provision of reserve for reduction entry
New unit issuanceCash dividends paid
Net income
Balance as of March 31, 2013

Units

549,040———
549,040—
45,100——594,140¥363,371,780———¥363,371,780—
32,646,537——¥396,018,317

Units

Unitholders’capitalReserve for reduction entry

549,040—
45,100——594,140$3,863,602,127—
347,118,947——$4,210,721,074$6,152,202(1,821,752)———$4,330,450

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

24 Japan Real Estate Investment Corporation

Thousands of yen
SurplusReserve for reduction entry Retained earnings

Unitholders’capital¥533,179
45,434——¥578,614(171,335)———¥407,278¥8,964,963(45,434)(8,888,957)
8,448,592¥8,479,163
171,335—(8,619,928)
8,824,710¥8,855,281

Total surplus

Total unitholders’equity¥9,498,143—(8,888,957)
8,448,592¥9,057,778——(8,619,928)
8,824,710¥9,262,560¥372,869,923—(8,888,957)
8,448,592¥372,429,558—
32,646,537(8,619,928)
8,824,710¥405,280,877

U.S. dollars (Note 1)
SurplusRetained earnings
Total surplus

Total unitholders’equity$90,155,912
1,821,752—(91,652,610)
93,829,987$94,155,040$3,959,910,240—
347,118,947(91,652,610)
93,829,987$4,309,206,564$96,308,114——(91,652,610)
93,829,987$98,485,490

Statements of Cash Flows
For the six months ended March 31, 2013 and September 30, 2012

Thousands of yen

U.S. dollars (Note 1)

For the period
from October 1, 2012
to March 31, 2013

For the period
from April 1, 2012
to September 30, 2012

For the period
from October 1, 2012
to March 31, 2013

Income before income taxes¥ 8,749,359¥ 8,372,795$ 93,028,813

Depreciation and amortization

55,376,960

Cash Flows from Operating Activities:
5,208,203

4,908,200

Amortization of investment corporation bond issuance costs

16,46918,837

175,111

New unit issuance costs

47,798—508,225

Dividends income—(19,724)—

Interest income(9,295)(7,756)(98,838)

Interest expense

1,805,986

1,829,449

19,202,404

Rental receivables

55,954(57,997)594,943(472,497)

448,257(5,023,896)

Supplies(3,121)(18,860)(33,187)

Prepaid expenses(39,736)

62,905(422,503)

Trade accounts payable

Refundable consumption taxes(647,712)

667,419(6,886,896)

Other payables

37,188(11,532)

395,409

Accrued expenses(179,032)

179,032(1,903,585)

Rent received in advance

94,605(5,627)

1,005,906

Long-term prepaid expenses(4,317)

180(45,906)

Other(82,510)534(877,308)

14,577,341

16,366,114

154,995,653

10,24425,413

108,923(1,838,733)(1,794,190)(19,550,597)

Sub-totalInterest and dividends income received
Interest paid
Payments for loss on disaster—(46,986)—(9,883)(20,178)(105,088)

12,738,968

14,530,173

135,448,890

Payments of time deposits(10,829,000)(8,816,000)(115,140,883)

Proceeds from time deposits

8,829,000

7,816,000

93,875,598(43,912,631)(24,064,671)(466,907,299)

Income taxes paid
Net cash provided by operating activities
Cash Flows from Investing Activities:

Purchases of property and equipment
Payments for lease and guarantee deposits
Repayments of lease and guarantee deposits received
Proceeds from lease and guarantee deposits received
Net cash used in investing activities—(2,500)—(1,013,145)(1,863,475)(10,772,409)

4,020,586

2,191,944

42,749,462(42,905,189)(24,738,702)(456,195,531)

Cash Flows from Financing Activities:
Proceeds from short-term loans

18,000,000

5,500,000

191,387,560

Repayments of short-term loans(13,500,000)(5,500,000)(143,540,670)

Proceeds from long-term loans

52,000,000

32,500,000

552,897,395

Repayments of long-term loans(51,050,000)(1,050,000)(542,796,385)—(10,000,000)—

32,646,537—

347,118,947

Redemption of investment corporation bonds
Proceeds from issuance of units
Payments of new unit issuance costs(47,798)(3,798)(508,225)(8,620,683)(8,884,373)(91,660,648)

29,428,054

12,561,828

312,897,974(738,167)

2,353,299(7,848,667)

Cash and Cash Equivalents at Beginning of Period

15,014,749

12,661,450

159,646,460

Cash and Cash Equivalents at End of Period¥14,276,582¥15,014,749$151,797,793

Dividends to unitholders
Net cash provided by financing activities
Net Increase (Decrease) in Cash and Cash Equivalents

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

Japan Real Estate Investment Corporation 25

Notes to Financial Statements
March 31, 2013 and September 30, 2012

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 63% by Mitsubishi Estate Co., Ltd. (“MEC”), 27% by The Dai-ichi MutualLife Insurance Company (currently renamed The Dai-ichi Life Insurance Company, Limited, “DL”) and 10% by Mitsui & Co., Ltd.
On May 11, 2001, the Company was incorporated with ¥200 million of original capital contribution by MEC, Tokio Marine &Nichido Fire Insurance Co., Ltd. (“TMN”) and DL under the Law Concerning Investment Trusts and Investment Corporations of Japan,
or the Investment Trust Law.
On September 10, 2001, the Company commenced operations when the Company was listed on the Tokyo Stock Exchange as oneof the first real estate investment corporations in Japan (so-called “J-REITs”). The Company issued 160,000 units at a price of ¥506,625($5,387), generating gross proceeds of ¥81,060 million ($861,882 thousand) (Note).
The Company completed the ninth public offering of 41,000 units at a price of ¥723,870 ($7,697) on October 29, 2012 and third
party allocation of 4,100 units at a price of ¥723,870 ($7,697) on November 28, 2012, generating gross proceeds of ¥29,678 million($315,563 thousand) and ¥2,967 million ($31,556 thousand), respectively. As of March 31, 2013, the Company had total unitholders’capital of ¥396,018 million ($4,210,721 thousand) with 594,140 units outstanding (Note).
At March 31, 2013, the Company owned a portfolio of 60 office properties with an aggregate of approximately 700,759 square meters ofleasable space.
Note: The foreign exchange rate of ¥94.05=US$1.00, as of March 31, 2013, has been used for translation.
Basis of presenting financial statements
The Company maintains its accounting records and prepares its financial statements in accordance with accounting principles generally
accepted in Japan (“Japanese GAAP”), including provisions set forth in the Investment Trust Law, the Corporation Law of Japan, theFinancial Instruments and Exchange Law of Japan and the related regulations, which are different in certain respects as to the applicationand disclosure requirements of International Financial Reporting Standards.
The accompanying financial statements are a translation of the audited financial statements of the Company, which were preparedin accordance 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 ¥94.05=US$1.00, the foreignexchange rate on March 31, 2013, has been used for translation. The inclusion of such amounts is not intended to imply that Japanese yen
has been or could be readily converted, realized or settled into U.S. dollars at that rate or any other rate.
As permitted under the Japanese Financial Instruments and Exchange Law, amounts of less than one million yen have been
omitted. As a result, the totals shown in the accompanying financial statements do not necessarily agree with the sum of the individual
amounts.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESInvestment securities
Non-marketable securities classified as other securities are carried at cost. Cost of securities sold is determined by the moving average method.
Property and equipment, depreciation and impairment
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:
Buildings ............................................................................................................... 2-61 years
Structures .............................................................................................................. 5-60 years
Machinery and equipment .................................................................................... 2-18 years
Tools, furniture and fixtures .................................................................................. 2-29 years

26 Japan Real Estate Investment Corporation

Expenditures for repairing expenses are charged to income as incurred. Significant renewals and betterments are capitalized.
The Company reviews fixed assets for impairment whenever events or changes in circumstances indicate that the carrying amountof its fixed assets may not be recoverable. According to the standard set by the Accounting Standards Board of Japan, companies are
required to recognize an impairment loss in their statement of income if certain indicators of asset impairment exist and the book value ofan asset exceeds the undiscounted sum of future cash flows of the asset. The standard states that impairment losses should be measured as
the excess of the book value over the higher of (1) the fair market value of the asset, net of disposition costs and (2) the present value of
future cash flows arising ongoing utilization of the asset and from disposal after asset use. The standard covers land, factories, buildings andother forms of property, plant and equipment as well as intangible assets. Fixed assets are grouped at the lowest level for which there is
identifiable cash flows that are independent of cash flows of other groups of assets.
Intangible assets
Intangible assets primarily consist of leasehold rights and easement, which are started at cost. Amortization of a term leasehold interest forbusiness use is calculated by the straight-line method based on the period of agreement.
Deferred charges
Investment corporation bond issuance costs are amortized using the straight-line method over the redemption periods.
New unit issuance costs are charged to income as incurred. The underwriters’ economic remunerations for underwriting theoffering are not recognized as new unit issuance costs in the financial statements since such costs are not paid by the Company ascommission under the so-called “spread-method”.
Under the spread-method, the difference between the offer price (the price paid by the unitholder) and the issue price (the pricereceived by the Company) is retained by the underwriters as remuneration.
Revenue recognition
Revenues from leasing of office space are recognized as rent accrues 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 toincome 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 consist 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.

3. FINANCIAL INSTRUMENTS
For the six months ended March 31, 2013 and September 30, 2012
1. Status of financial instruments(1) Policies for dealing financial instruments
Concerning the financing of property acquisitions, the Company shall use several funding sources including bank loans, issuance ofinvestment corporation bonds and issuance of investment units. When executing such financing activities, the Company endeavors toretain the ability to secure stable and low-cost financing by maintaining high credit rating and thereby limiting the financial covenants
Japan Real Estate Investment Corporation 27

which may restrict the financial flexibility of the Company. To achieve these goals, the Company intends to further develop andreinforce the confidence of debt holders and rating agencies in the Company by bolstering capital base and controlling loan-to-value
ratio (“LTV”) at adequate level.
In order to hedge against future interest-rate fluctuations, the Company may enter in derivative transactions, which shall be
executed solely for the purpose of controlling risks, and not for speculative purposes.
At the time of this report, the Company holds no position in derivative transactions.
With respect to management of excess fund, as a matter of policy the Company uses time deposit as its main vehicle, while
securities and monetary claims are also eligible for such investment.
(2) Characteristics, and risk profile of each financial instrument and risk management system
J-Rea regularly re-evaluates appropriateness and effectiveness of risk management system in order to improve on it.
Characteristics, and risk profile of financial instruments and risk management system are as follows:
Deposits which are typically large time deposit used to manage the excess funds, are exposed to credit risk of the deposit-taking financial
institutions. The Company manages credit risk by restricting the tenor of the deposit relatively short and setting a minimum credit
rating requirement for the deposit-taking financial institutions.
The fund proceeds from borrowings and issues of investment corporation bonds are applied mainly to acquire real estate properties
and repayment of outstanding loans and bonds. While floating-rate short-term and long-term loans are exposed to the risk of interestrate hike, such risk is mitigated by the Company’s low LTV and relatively high percentage of long-term fixed-rate debts within the totalborrowing. Loans and investment corporation bonds involve liquidity risk at the time of maturity. To manage such liquidity risk, theCompany implements the measures such as (i) maintaining and strengthening its ability to access equity markets to secure funds, (ii)maintaining a commitment lines with major financial institutions (There is no outstanding under the facility as of March 31, 2013 andas of September 30, 2012), and (iii) preparing monthly financial plan.
(3) Supplementary note regarding fair value of financial instruments
The fair values of financial instruments presented in this report are based on their market value, and in case where market values are notavailable, reasonably calculated values are presented. Since calculation of fair value is based on certain assumptions, the fair value could
differ depending on assumptions used.
2. Fair value of financial instruments
Fair value of financial instruments, their values carried on the balance sheet and the difference between them as of March 31, 2013 and asof September 30, 2012 are as follows.
The financial instruments whose fair values have extreme difficulty estimating are excluded from the following schedule (Note2)
Thousands of yen

U.S. dollars
As of March 31, 2013

Book value

Fair value¥ 23,276,582¥ 23,276,582(2) Short-term loans

18,000,000

18,000,000(3) Current portion of long-term loans

34,100,000(4) Investment corporation bonds

45,000,000(5) Long-term loans

214,100,000(1) Cash and bank deposits

DifferenceBook value

Fair value—$ 247,491,573$ 247,491,573—

191,387,560

191,387,560

34,252,501

152,501

362,573,099

364,194,598

1,621,499

46,413,050

1,413,050

478,468,900

493,493,355

15,024,455

219,327,980

5,227,980

2,276,448,698

2,332,035,941

55,587,243¥

Difference$——

Thousands of yen
As of September 30, 2012
Book value

Fair value¥ 22,014,749¥ 22,014,749(2) Short-term loans

13,500,000

13,500,000—(3) Current portion of long-term loans

70,100,000

70,323,318

223,318(4) Investment corporation bonds

45,000,000

46,078,150

1,078,150(5) Long-term loans

177,150,000

181,251,375

4,101,375(1) Cash and bank deposits

Difference¥—

Note1: Measurement of fair value of financial instruments(1) Cash and bank deposits
Due to short tenor, the book value of these assets are reasonable approximation of the present value of these assets and hence used as their fair value.
(2) Short-term loans
Since these loans’ tenor is short and rates are reset at short interval, the book values of these liabilities are reasonable approximation of their present value and hence usedas their fair values.
(3) Current portion of long-term loans and (5) long-term loans
For loans with floating interest rates since the interest rates on such loans reflect market rates reasonably well over the short term and their book values are good

28 Japan Real Estate Investment Corporation

approximation of their fair values, the book values are presented as their fair values. The fair values of the liabilities with fixed interest rates are calculated by discounting
the aggregated amounts of the principals and the interests of the loan by the rates that are reasonably estimated to be applicable if the Company refinances the existingloans for the remaining period to maturity under the prevailing market conditions as of March 31, 2013 and September 30, 2012.
(4) Investment corporation bonds
Their fair values are based on the values published by a financial data provider.
Note2: Financial instruments whose fair values cannot be reliably measured.
Thousands of yen
As of March 31, 2013

(1) Non-listed stock (*1)
(2) Deposits received from tenants (*2)

U.S. dollars

As of September 30, 2012

As of March 31, 2013

¥577,168¥577,168$6,136,822¥42,958,359¥39,950,918$456,760,871(*1) With regard to non-listed stocks which do not have quoted market price in active market and whose cash flows are not reasonably estimated, their fair value cannot be
reliably measured and therefore presented at their book value.
(*2) With regard to deposits received from tenants, which do not have quoted market price in active market, and their tenor cannot be reasonably estimated, their cash flows
cannot be reliably measured and therefore presented at their book value.
Note3: Redemption schedule for monetary claims after the closing dateThousands of yen

U.S. dollars
As of March 31, 2013

1 yearor less

Cash andbank deposits ¥23,276,582

1 to
2 years

2 to
3 years

3 to
4 years

4 to
5 yearsOver
5 years

1 yearor less

1 to
2 years

2 to
3 years

3 to
4 years

4 to
5 yearsOver
5 years

¥—

¥—

¥—

¥—

¥—

$247,491,573

$—

$—

$—

$—

$—

Thousands of yen
As of September 30, 2012

Cash andbank deposits

1 yearor less

1 to
2 years

2 to
3 years

3 to
4 years

4 to
5 yearsOver
5 years¥22,014,749

¥—

¥—

¥—

¥—

¥—

Note4: Repayment schedule for investment corporation bonds, long-term loans and other interest-bearing debt after the closing dateThousands of yen
As of March 31, 2013
1 year or less

Short-term loans

1 to 2 years¥18,000,000

Investment corporation bonds¥

2 to 3 years—¥

3 to 4 years—¥

4 to 5 years—¥

Over 5 years

—

¥

—

—

15,000,000

20,000,000——

10,000,000

Long-term loans

34,100,000

5,100,000

16,600,000

44,400,000

46,500,000

101,500,000

Total¥52,100,000¥20,100,000¥36,600,000¥44,400,000¥46,500,000¥111,500,000

U.S. dollars
As of March 31, 2013
1 year or less

Short-term loans
Investment corporation bonds

1 to 2 years$191,387,560—$

2 to 3 years—

159,489,633$

3 to 4 years—$

4 to 5 years—

212,652,844$

Over 5 years

—

—

—

$

—
106,326,422

Long-term loans

362,573,099

54,226,475

176,501,861

472,089,314

494,417,863

1,079,213,184

Total$553,960,659$213,716,108$389,154,705$472,089,314$494,417,863$1,185,539,607

Thousands of yen
As of September 30, 2012
1 year or less

Short-term loans
Investment corporation bonds¥13,500,000—

1 to 2 years¥—

15,000,000

2 to 3 years¥—
20,000,000

3 to 4 years¥——

4 to 5 years¥

Over 5 years

—

¥

—

10,000,000—

Long-term loans

70,100,000

15,100,000

19,600,000

30,100,000

42,850,000

69,500,000

Total¥83,600,000¥30,100,000¥39,600,000¥30,100,000¥42,850,000¥79,500,000

Japan Real Estate Investment Corporation 29

4. PROPERTY AND EQUIPMENT
Property and equipment at March 31, 2013 and September 30, 2012 consisted of the following:Thousands of yen
As of March 31, 2013

U.S. dollars
As of September 30, 2012

As of March 31, 2013

Acquisition costs

Book value

Acquisition costs

Book value

Acquisition costs

Book valueLand¥397,677,867¥397,677,867¥378,242,398¥378,242,398$4,228,366,477$4,228,366,477

Buildings and structures

242,536,712

Accumulated depreciation
Machinery and equipment
Accumulated depreciation(1,314,188)
204,941

Accumulated depreciation
Land in trust(48,279,017)

2,578,806,091
170,313,093(559,845,126)

2,492,463
1,454,616(1,242,085)

2,018,960,965

29,439,714
1,250,378(13,973,292)

187,920

15,466,421

2,179,071(93,266)

111,674(85,370)

102,549(991,673)

1,187,398

219,582

219,582986

986

2,334,746

2,334,746

105,367,081

105,367,081

105,367,081

105,367,081

1,120,330,480

1,120,330,480

37,508,384(10,297,949)

37,852,203(117,190,448)

Buildings and structures in trust

48,530,146

Accumulated depreciation(11,021,761)

Machinery and equipment in trust

795,261

Accumulated depreciation(548,373)

Tools, furniture and fixtures in trust

189,883,278

2,768,805

Tools, furniture and fixtures
Construction in progress

218,592,110(52,653,434)

48,150,153

516,003,682

795,261
246,887(538,326)

24,064

398,813,234

8,455,726
256,934(5,830,661)

23,353

2,625,066

255,867

Accumulated depreciation(6,992)

17,071(5,949)17,404(74,351)

Construction in progress in trust

5,695

5,695

2,063

2,063

60,56360,563¥732,492,141¥732,492,141¥693,405,094¥693,405,094$7,788,326,865$7,788,326,865

Total

181,515

The compressed amount of tangible assets with government grants under the Corporation Tax Law of Japan was ¥50 million ($533
thousand) at March 31, 2013 and ¥50 million ($533 thousand) at September 30, 2012.

5. SHORT-TERM LOANS
Short-term loans at March 31, 2013 and September 30, 2012 consisted of the following:Thousands of yen
As of March 31, 2013

0.33% unsecured loan from a trust bank, due on November 1, 2012
0.27527% unsecured loan from a trust bank, due on October 7, 2013
0.33% unsecured loan from a bank, due on March 26, 2013¥

U.S. dollars

As of September 30, 2012—

¥ 1,000,000

1,000,000—

As of March 31, 2013$—
10,632,642—

1,000,000—

1,000,000—

10,632,642

0.33% unsecured loan from a bank, due on March 26, 2013—

2,000,000—

0.33% unsecured loan from a bank, due on March 26, 2013—

4,000,000—

0.33% unsecured loan from a bank, due on March 1, 2013—

1,000,000—

0.28% unsecured loan from a bank, due on February 1, 2013—

1,000,000—

6,000,000—

63,795,853

0.28% unsecured loan from a bank, due on February 1, 2013—

1,500,000—

0.28% unsecured loan from a bank, due on March 4, 2013—

500,000—

2,000,000—

21,265,284

0.27527% unsecured loan from a bank, due on January 7, 2014

0.27527% unsecured loan from a bank, due on January 7, 2014

0.27527% unsecured loan from a bank, due on January 7, 2014
0.28% unsecured loan from a trust bank, due on February 1, 2013—

1,500,000—

0.27527% unsecured loan from a trust bank, due on January 7, 2014

1,500,000—

15,948,963

0.27461% unsecured loan from a trust bank, due on January 15, 2014

5,000,000—

53,163,211

0.27527% unsecured loan from a bank, due on January 7, 2014

1,500,000—

15,948,963¥18,000,000¥13,500,000$191,387,560

Total

The Company has commitment lines totaling ¥43,000 million ($457,204 thousand) with five financial institutions to reduce a refinancing risk.
The unused amount of such commitment lines was ¥43,000 million ($457,204 thousand) at March 31, 2013.

30 Japan Real Estate Investment Corporation

6. INVESTMENT CORPORATION BONDS INCLUDING CURRENT PORTION OF INVESTMENTCORPORATION BONDS
Details of total investment corporation bonds outstanding are summarized as follows:
As of March 31, 2013

As of September 30, 2012

As of March 31, 2013

Amount(thousands of yen)Interest rate(%)

Amount(thousands of yen)Interest rate(%)

Amount(U.S. dollars)

Unsecured bond due on September 29, 2025

¥10,000,000

2.56%¥10,000,000

2.56%$106,326,422

Unsecured bond due on June 18, 2014

15,000,000

1.91%

15,000,000

1.91%

159,489,633

Unsecured bond due on April 23, 2015

10,000,000

1.26%

10,000,000

1.26%

106,326,422

Unsecured bond due on July 23, 2015

10,000,000

1.05%

10,000,000

1.05%

106,326,422

Total¥45,000,000—¥45,000,000—$478,468,900

7. LONG-TERM LOANS INCLUDING CURRENT PORTION OF LONG-TERM LOANS
Long-term loans at March 31, 2013 and September 30, 2012 consisted of the following:Thousands of yen
As of March 31, 2013

U.S. dollars

As of September 30, 2012

As of March 31, 2013

Current Portion of Long-Term Loans
1.55% unsecured loan from an insurance company, due on October 29, 2012¥—

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

5,000,000

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

2,000,000$—

5,000,000

53,163,211
31,897,927

3,000,000

3,000,000

1.135% unsecured loan from a bank due on January 15, 2013—

5,000,000—

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

3,000,000

3,000,000

31,897,927

1.135% unsecured loan from a bank, due on January 15, 2013—

5,000,000—

1.2625% unsecured loan from a bank, due on March 24, 2014

2,000,000—

21,265,284

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

53,163,211

5,000,000

5,000,000

1.0925% unsecured loan from a bank, due on December 21, 2012—

5,000,000—

1.085% unsecured loan from a bank, due on January 15, 2013—

11,000,000—

1.2625% unsecured loan from a bank, due on March 24, 2014

2,000,000—

21,265,284

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

5,000,000

5,000,000

53,163,211

1.2625% unsecured loan from a trust bank, due on March 24, 2014

2,000,000—

21,265,284

1.31% unsecured loan from a bank, due on March 24, 2014

2,000,000—

21,265,284

1.06% unsecured loan from a bank, due on January 15, 2013—

1,000,000—

1.0925% unsecured loan from a trust bank, due on December 21, 2012—

5,000,000—

1.135% unsecured loan from a trust bank, due on January 15, 2013—

5,000,000—

1.2625% unsecured loan from a trust bank, due on March 24, 2014

2,000,000—

21,265,284

1.06% unsecured loan from a bank, due on January 15, 2013—

1,000,000—

1.0475% unsecured loan from a bank, due on March 25, 2013—

1,000,000—

0.73625% unsecured loan from a bank, due on December 20, 2012
1.2375% unsecured loan from a bank, due on March 24, 2014—

1,000,000—

1,000,000—

10,632,642

1.0475% unsecured loan from a bank, due on March 25, 2013—

2,000,000—

1.665% unsecured loan from a bank, due on March 24, 2017(*)

100,000

100,000

1,063,264

1.0475% unsecured loan from a bank, due on March 25, 2013—

2,000,000—

1.0475% unsecured loan from a bank, due on March 25, 2013—

3,000,000—

1.2625% unsecured loan from a bank, due on March 24, 2014

2,000,000—

21,265,284

34,100,000

70,100,000

362,573,099

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

5,000,000

5,000,000

53,163,211

1.54375% unsecured loan from an insurance company, due on March 30, 2017

5,000,000

5,000,000

53,163,211

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

1,500,000

1,500,000

15,948,963

1.595% unsecured loan from an insurance company, due on April 25, 2016

1,000,000

1,000,000

10,632,642

1.39625% unsecured loan from an insurance company, due on March 30, 2018

2,000,000

2,000,000

21,265,284

SubtotalLong-Term Loans

Japan Real Estate Investment Corporation 31

Thousands of yen
As of March 31, 2013

U.S. dollars

As of September 30, 2012

As of March 31, 2013

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

2,000,000

2,000,000

21,265,284

1.665% unsecured loan from a bank, due on March 24, 2017(*)

1,600,000

1,650,000

17,012,228

1.115% unsecured loan from a bank, due on January 6, 2023

3,000,000—

31,897,927

1.31% unsecured loan from a bank, due on March 24, 2014—

2,000,000—

0.66% unsecured loan from a bank, due on June 15, 2017

2,500,000

2,500,000

26,581,606

0.3825% unsecured loan from a bank, due on January 15, 2016

1,000,000—

10,632,642

1.2375% unsecured loan from a bank, due on March 24, 2014—

1,000,000—

0.615% unsecured loan from a bank, due on November 17, 2014

1,000,000

1,000,000

10,632,642

1.39875% unsecured loan from a bank, due on March 24, 2015

2,000,000

2,000,000

21,265,284

0.9025% unsecured loan from a bank, due on August 31, 2017

2,000,000

2,000,000

21,265,284

0.66% unsecured loan from a bank, due on June 15, 2017

2,500,000

2,500,000

26,581,606

0.57125% unsecured loan from a bank, due on August 31, 2017

1,000,000

1,000,000

10,632,642

1.2625% unsecured loan from a bank, due on March 24, 2014—

2,000,000—

1.30625% unsecured loan from a bank, due on December 21, 2016

5,000,000

5,000,000

53,163,211

1.2075% unsecured loan from a bank, due on November 1, 2019

6,000,000

6,000,000

63,795,853

1.13875% unsecured loan from a bank, due on November 15, 2019

3,000,000

3,000,000

31,897,927

1.07375% unsecured loan from a bank, due on June 15, 2021

4,000,000

4,000,000

42,530,569

0.96625% unsecured loan from a bank, due on January 17, 2022

5,000,000—

53,163,211—

2,000,000—

1.43375% unsecured loan from a trust bank, due on January 17, 2018

3,000,000

3,000,000

31,897,927

1.16% unsecured loan from a trust bank, due on September 26, 20195,500,000

5,500,000

58,479,532

0.98375% unsecured loan from a trust bank, due on November 15, 2018

3,000,000

3,000,000

31,897,927

0.9525% unsecured loan from a trust bank, due on June 15, 2020

4,000,000

4,000,000

42,530,569

1.2625% unsecured loan from a bank, due on March 24, 2014—

2,000,000—

1.3975% unsecured loan from a bank, due on March 26, 2018

2,000,000

2,000,000

21,265,284

1.13875% unsecured loan from a bank, due on November 15, 2019

3,000,000

3,000,000

31,897,927

1.1975% unsecured loan from a bank, due on June 15, 2022

4,000,000

4,000,000

42,530,569

0.80125% unsecured loan from a bank, due on December 21, 2020

5,000,000—

53,163,211

0.71% unsecured loan from a bank, due on January 15, 2020

5,500,000—

58,479,532

0.83625% unsecured loan from a bank, due on January 15, 2021

5,500,000—

58,479,532—

2,000,000—

5,000,000

5,000,000

53,163,211

1.2625% unsecured loan from a trust bank, due on March 24, 2014

1.2625% unsecured loan from a trust bank, due on March 24, 2014
1.0325% unsecured loan from a trust bank, due on April 4, 2016
1.205% unsecured loan from a trust bank, due on April 4, 2017

5,000,000

5,000,000

53,163,211

1.12625% unsecured loan from a trust bank, due on June 1, 2017

12,000,000

12,000,000

127,591,707

1.31125% unsecured loan from a trust bank, due on June 1, 2018

10,000,000

10,000,000

106,326,422

1.13875% unsecured loan from a trust bank, due on November 15, 2019

3,000,000

3,000,000

31,897,927

0.9525% unsecured loan from a trust bank, due on June 15, 2020

4,000,000

4,000,000

42,530,569

1.2725% unsecured loan from a trust bank, due on June 15, 2022

2,500,000

2,500,000

26,581,606

0.80125% unsecured loan from a trust bank, due on December 21, 2020

5,000,000—

53,163,211—

2,000,000—

1.255% unsecured loan from a bank, due on March 1, 2017

2,000,000

2,000,000

21,265,284

0.45% unsecured loan from a bank, due on March 26, 2018

3,000,000—

31,897,927

1.1875% unsecured loan from a bank, due on June 15, 2015

3,000,000

3,000,000

31,897,927

1.20875% unsecured loan from a bank, due on June 15, 2015

3,000,000

3,000,000

31,897,927

0.45% unsecured loan from a bank, due on March 26, 2018

2,000,000—

21,265,284

1.465% unsecured loan from an insurance company, due on March 1, 2018

2,000,000

2,000,000

21,265,284

0.90875% unsecured loan from banks and trust banks, due on June 23, 2016

24,000,000

24,000,000

255,183,413

1.0475% unsecured loan from a bank, due on August 31, 2018

3,000,000

3,000,000

31,897,927

0.66% unsecured loan from a bank, due on June 15, 2017

2,500,000

2,500,000

26,581,606

1.2725% unsecured loan from a bank, due on June 15, 2022

2,500,000

2,500,000

26,581,606

0.7525% unsecured loan from a bank, due on November 15, 2016

1,000,000

1,000,000

10,632,642

0.71375% unsecured loan from a bank, due on January 7, 2020

2,000,000—

21,265,284

1.2625% unsecured loan from a bank, due on March 24, 201432 Japan Real Estate Investment Corporation

Thousands of yen
As of March 31, 2013

U.S. dollars

As of September 30, 2012

As of March 31, 2013

0.71% unsecured loan from a bank, due on January 15, 2020

5,000,000—

53,163,211

0.98375% unsecured loan from a bank, due on November 15, 2018

3,000,000

3,000,000

31,897,927

0.98% unsecured loan from a bank, due on January 7, 2022

2,000,000—

21,265,284

0.645% unsecured loan from a bank, due on December 15, 2014

2,000,000

2,000,000

21,265,284

0.33% unsecured loan from a bank, due on June 16, 2014
0.49125% unsecured loan from a bank, due on January 9, 2018—

1,000,000—

1,000,000—

10,632,642—

1,000,000—

0.49125% unsecured loan from a bank, due on January 9, 2018

0.33% unsecured loan from a bank, due on June 16, 2014

1,000,000—

10,632,642

0.66% unsecured loan from a bank, due on June 15, 2017

1,000,000

1,000,000

10,632,642

0.45625% unsecured loan from a bank, due on December 20, 2017

1,000,000—

10,632,642

0.3825% unsecured loan from a bank, due on January 15, 2016

1,000,000—

10,632,642

0.45% unsecured loan from a bank, due on March 26, 2018

1,000,000—

10,632,642

0.8% unsecured loan from a bank, due on October 29, 2020

2,000,000—

21,265,284

0.945% unsecured loan from a bank, due on March 24, 2023

1,000,000—

10,632,642

Subtotal

214,100,000

177,150,000

2,276,448,698

Total¥248,200,000¥247,250,000$2,639,021,797(*) Repayments of principal shall be made by installments of ¥50 million for each 6 month period and ¥1,350 million on the final principal repayment date.

8. NET ASSETSThe Company is required to maintain net assets of at least ¥50 million ($532 thousand), as required pursuant to the Investment Trust Law.

9. INCOME TAXESThe Company is subject to Japanese corporate income taxes on all of its taxable income. However, under the Special Taxation Measures
Law of Japan (hereinafter the STML), an investment corporation is allowed to deduct dividends of accounting profits, or dividend
distributions, paid to investors from its taxable income if certain tax requirements are satisfied. Such tax requirements include dividend
distributions in excess of 90% of its earnings available for dividend for the fiscal period as stipulated by Article 67-15 of the STML. Basedon the distribution policy provided by Article 32-2 of the Articles of Incorporation, the Company made a dividend distribution in theamount of ¥8,995 million ($95,644 thousand) subsequent to March 31, 2013, which is the multiple number of units up to 100% of theunappropriated retained earnings after adding thereto ¥170 million ($1,814 thousand) arising from the reversal of the reserve for advanced
depreciation of non-current assets and deducting therefrom ¥30 million ($325 thousand) of retained earnings to be carried forward. The
Company will not distribute the dividends in excess of retained earnings under Article 32-3 of the Articles of Incorporation.
The significant components of deferred tax assets and liabilities as of March 31, 2013 and September 30, 2012 were as follows:
Thousands of yen
As of March 31, 2013

U.S. dollars

As of September 30, 2012

As of March 31, 2013

Deferred tax assets:
Accrued enterprise tax
Amortization of a term leasehold interest
Asset retirement obligations

¥

1,025
23,432¥

1,002
18,025$

10,902
249,150

4,449

3,405

47,31028,90722,433

307,363

Valuation allowance(27,882)(21,430)(296,460)

Total deferred tax assets

1,025

1,002

10,902

Reserve for advanced depreciation of non-current assets¥122,812¥211,309$1,305,825

Total deferred tax liabilities

122,812211,3091,305,825¥121,787¥210,307$1,294,922

Deferred tax liabilities:

Net deferred tax liabilities

Japan Real Estate Investment Corporation 33

The reconciliation of tax rate difference between the adjusted statutory tax rate and the effective tax rate for the six months ended March 31,
2013 and September 30, 2012 were as follows:
For the period from October 1, 2012
to March 31, 2013

For the period from April 1, 2012
to September 30, 2012

Statutory tax rate

39.43%

39.43%

Deductible dividend distribution(40.54%)(40.59%)0.09%

Change in valuation allowance

0.09%

Others

0.16%

0.16%

Effective tax rate

(0.86%)(0.91%)

Adjustment in deferred tax assets and deferred tax liabilities due to tax rate change
The “Act for Partial Revision of Income Tax Act, etc. in Response to the Changing Economic Structure” and the “Special Measures to
Secure the Funds to Realize the Restoration of the Damages following the Great East Japan Earthquake” were promulgated on December 2,
2011, went into effect on April 1, 2012 and resulted in a change of the statutory tax rate applicable to the deferred tax assets and deferred
tax liabilities arising from the temporary differences that reversed in the period ended September 30, 2012 to 36.59% Likewise, thestatutory tax rate applicable to the deferred tax assets and deferred tax liabilities concerning the temporary differences that are expected toreverse in the period ending September 30, 2012 (the 22nd fiscal period) through the period ending March 31, 2015 (the 27th fiscal
period) shall be 36.59% on a nominal tax rate basis, and with respect to the temporary differences that are expected to reverse on or after
the period ending September 30, 2015 (the 28th fiscal period) shall be 34.16%.

10. RELATED PARTY TRANSACTIONS
For the six months ended March 31, 2013 and September 30, 2012
(1) Parent Company and Major Corporation Unitholders
For the period from October 1, 2012 to March 31, 2013
“Not applicable”
For the period from April 1, 2012 to September 30, 2012
“Not applicable”(2) Subsidiaries
For the period from October 1, 2012 to March 31, 2013
“Not applicable”
For the period from April 1, 2012 to September 30, 2012
“Not applicable”(3) Sister Companies
For the period from October 1, 2012 to March 31, 2013
“Not applicable”
For the period from April 1, 2012 to September 30, 2012
“Not applicable”(4) Directors and Major Individual Unitholders
For the period from October 1, 2012 to March 31, 2013
“Not applicable”
For the period from April 1, 2012 to September 30, 2012
“Not applicable”

34 Japan Real Estate Investment Corporation

11. SEGMENT INFORMATION
For the six months ended March 31, 2013 and September 30, 2012
Since the Company has been engaged in real-estate leasing business using a single segment, segment information has been omitted.
Information about products and services
Since revenues from external customers for single segment of similar products and services accounted for more than 90% of total operating
revenues, information about products and services has been omitted.
Information about geographic area
(1) Revenues
Since 100% of the total operating revenues were generated from external customers within Japan, geographical breakdown ofrevenues has been omitted.
(2) Property and equipment
Since 100% of total property and equipment on the balance sheet are located within Japan, geographical breakdown of such property
and equipment has been omitted.
Information about major clients
Since no single external client represents 10% or more of the Company’s total operating revenues, information about major clients has been
omitted.

12. ASSET RETIREMENT OBLIGATIONS
For the six months ended March 31, 2013 and September 30, 2012
Asset retirement obligations reported on balance sheet
The Company acquired Osaki Front Tower on February 1, 2011 under the term leasehold for business use agreement which, at the expiryof the leasehold, obligates the Company to restore the leased land to its original state. At the inception of a lease with such obligation, theCompany recognized an asset retirement obligations and a corresponding capital asset in an amount equal to the present value of theestimated demolition cost required for the removal of the properties located on the leased land. The present value is calculated using
2.015% as the discount rate over 42 years which is the term of the leasehold.
Change in the amount of the asset retirement obligations as of March 31, 2013 and September 30, 2012 consisted of following
Thousands of yen

Balance at the beginning of the period

U.S. dollars

For the period from October 1, 2012
to March 31, 2013

For the period from April 1, 2012
to September 30, 2012

For the period from October 1, 2012
to March 31, 2013

$3,224,657¥303,279¥300,253

Increase in the tangible fixed assets

—

—

—

Adjustment required over the period

3,055

3,025

32,488¥306,334¥303,279$3,257,146

Balance at the end of the period

Asset retirement obligations other than those reported on balance sheet
Under the Road Act of Japan, the Company is obligated to remove the cable lines and the accompanying equipment originally installed forpreventing analog TV interference under the public roads close to Shibuya Cross Tower and to restore the public roads to their originalstates because analog TV broadcasting was discontinued.
Since the removal involves public roads currently in service and some of the location of the underground structures is potentiallyaffected by the ongoing redevelopment projects near Shibuya station, it is difficult to initiate such removal unilaterally without involving
other interested parties. Therefore, a reasonable estimate of the present value of asset retirement obligations cannot be made because themethod, the cost and the timing of the removal remains uncertain.
In consideration of such uncertainty, the asset retirement obligations are not reported in the financial statements, and instead notedherein.
Japan Real Estate Investment Corporation 35

13. INVESTMENT AND RENTAL PROPERTY
For the six months ended March 31, 2013 and September 30, 2012
The Company owns primarily a portfolio of office properties in Tokyo and other prefectures in order to gain rental revenue from them.
The book values on balance sheets as of March 31, 2013 and as of September 30, 2012 and the fair values as of March 31, 2013 and as of
September 30, 2012 are as follows:
Thousands of yen
Book value

Fair value

As of September 30, 2012

Change during period(*1)

As of March 31, 2013

As of March 31, 2013

¥700,829,977¥39,071,217¥739,901,194¥758,210,000

U.S. dollars
Book value

Fair value

As of September 30, 2012

Change during period(*1)

As of March 31, 2013

As of March 31, 2013

$7,451,674,397$415,430,276$7,867,104,673$8,061,775,651

Thousands of yen
Book value

Fair value

As of March 31, 2012

Change during period(*2)

As of September 30, 2012

¥681,970,939¥18,859,037¥700,829,977

As of September 30, 2012

¥712,888,000

Note1: Book value on balance sheet means the acquisition cost less accumulated depreciation.
Note2: Significant changes(*1) For the period ended March 31, 2013, the major reasons for the increase are the acquisition of Harumi Front (¥31,573,555 thousand or $335,710,322) and Higashi
Nibancho Square (¥10,074,680 thousand or $107,120,476) and the additional acquisition of Harmony Tower (¥547,366 thousand or $5,819,950).
The major reason for the decrease is the depreciation.
(*2) For the period ended September 30, 2012, the major reason for the increase is the acquisition of TIXTOWER UENO (¥22,296,355 thousand).
The major reason for the decrease is the depreciation.
Note3: Fair values as of March 31, 2013 and as of September 30, 2012 are defined as the appraised values provided by external qualified professional appraiser.

14. PER UNIT INFORMATION
The following table summarizes information about net assets per unit and net income per unit at March 31, 2013 and September 30, 2012
and for the periods then ended respectively:
Yen

Net assets at period end per unit
Net income per unit

U.S. dollars

For the period from October 1, 2012
to March 31, 2013

For the period from April 1, 2012
to September 30, 2012

For the period from October 1, 2012
to March 31, 2013

¥682,130¥678,328$7,253

15,045

15,387160

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

36 Japan Real Estate Investment Corporation

15. BREAKDOWN OF PROPERTY-RELATED REVENUES AND EXPENSES
For the six months ended March 31, 2013 and September 30, 2012
Thousands of yen

Property-Related Revenues

U.S. dollars

For the period from October 1, 2012
to March 31, 2013

For the period from April 1, 2012
to September 30, 2012

For the period from October 1, 2012
to March 31, 2013

$269,614,606¥25,357,253¥24,222,684

Rental Revenues

25,070,031

24,130,936

266,560,675

Rental revenues

19,305,060

18,650,347

205,263,805

Common service charges

3,501,305

3,375,097

37,228,130

592,263587,2076,297,321

1,671,401

1,518,283

17,771,419
3,053,931

Parking revenues
Other rental revenues
Non-Rental Revenues

287,222

91,747

Cancellation charges

28,46664,121

302,673

Gain on donation of non current assets

82,669—878,996

Other miscellaneous revenues

176,086

27,626

1,872,262$146,694,860

Property-Related Expenses¥13,796,651¥13,133,140

Property management expenses

3,067,242

2,876,682

32,612,892

Utilities expenses

2,079,394

2,032,959

22,109,461

Property and other taxes

24,480,703

2,302,410

2,311,538

Casualty insurance

55,40553,319589,110

Repairing expenses

886,640764,067

9,427,330

5,208,203

4,908,200

55,376,960

Depreciation
Other rental expenses
Property-Related Profits

197,354

186,372

2,098,403¥11,560,602¥11,089,543$122,919,746

16. SUPPLEMENTAL CASH FLOW INFORMATIONCash and cash equivalents
The following table represents a reconciliation of cash and cash equivalents at March 31, 2013 and September 30, 2012:
Thousands of yen

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

U.S. dollars

As of March 31, 2013

As of September 30, 2012

As of March 31, 2013

¥19,544,559¥18,112,321$207,810,306

3,732,023

3,902,428

39,681,268(9,000,000)(7,000,000)(95,693,780)¥14,276,582¥15,014,749$151,797,793

17. LEASESThe Company owns office buildings for lease and earns rent income. As of March 31, 2013 and September 30, 2012, the future lease
revenues under the non-cancelable operating leases are as follows:
Thousands of yen

U.S. dollars

As of March 31, 2013

As of September 30, 2012

As of March 31, 2013

$216,503,229

Due within one year

¥20,362,128¥16,591,317

Due after one year

49,028,903

24,535,086

521,306,784

Total¥69,391,031¥41,126,403$737,810,013

18. SUBSEQUENT EVENTSFor the six months ended March 31, 2013
“Not applicable”
Japan Real Estate Investment Corporation 37

38 Japan Real Estate Investment Corporation

Profile

Corporate Data
As of March 31, 2013

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

Executives

Transfer Agent

Executive Director:

Noritada Terasawa

Sumitomo Mitsui Trust Bank, Limited

Supervisory Directors:

Kenji Kusakabe

1-4-1, Marunouchi, Chiyoda-ku, Tokyo 100-8233, Japan

Tomohiro Okanoya

Auditors
Paid-in Capital

Ernst & Young ShinNihon LLC¥396,018,317,000

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

Contents
Financial Highlights

p. 1

Top 10 Unitholdersp. 1

Unit Price Performance

p. 1

The Strengths of Japan Real Estate
Investment Corporation

p. 2

Portfolio Highlights

p. 3

Number of Units Outstanding

Incorporation

594,140

May 11, 2001

Number of Unitholders

Executive Office

15,867

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

Stock Listing
Tokyo Stock Exchange

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

Securities CodePlanning Department8952

Tel: 81-3-3211-7921

Asset Management Summaryp. 4

Asset Size, Property Acquisitions, andPerformance Trends

p. 6

Type of Investment Corporation

To Our Unitholders

p. 8

Closed-end corporate type fund

The Portfolio of Japan Real Estate
Investment Corporation

p.12

Overview of Portfolio Properties

p.15

Financial Section

p.21

Corporate Data

p.39

Fax: 81-3-3212-8886
E-mail: j-rea-inquiry@j-rea.co.jp

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

Japan Real Estate Investment Corporation 39

Japan Real Estate Investment CorporationJ A P A N R E A L E S TAT E I N V E S T M E N T C O R P O R AT I O N

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

M A RC H 2 0 1 3
Semiannual Report
For the period from October 1, 2012 to March 31, 2013

MARCH 2013 SEMIANNUAL REPORT