Japan Real Estate Investment Corporation

M A RC H
2011

Semiannual
Report
For the period from October 1, 2010 to March 31, 2011

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

Contents
Financial Highlights

p. 1

Top 10 Unitholdersp. 1

Unit Price Performance

p. 1

The Strengths of Japan Real Estate
Investment Corporation

p. 2

Portfolio Highlights

p. 3

New Portfolio Properties

p. 4

Subsequent Events

p. 5

History after IPO

p. 6

To Our Unitholders

p. 8

The Portfolio of Japan Real Estate
Investment Corporation

p.12

Overview of Portfolio Properties

p.15

Financial Section

p.23

Corporate Datap.41

Financial Highlights
Thousands of U.S.dollars(Note 1)Millions of yen
For the period from
October 1, 2010 toMarch 31, 2011

Operating Revenues
Operating Income
Ordinary Income
Net Income

For the period from
April 1, 2010 to
September 30, 2010

For the period from
October 1, 2009 to
March 31, 2010

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

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

For the period from
October 1, 2010 toMarch 31, 201122,135
9,802
7,938
7,652

22,112
9,939
8,135
8,134

21,665
10,5388,876
8,875

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

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

266,217
117,892
95,47692,028Net Operating Income (NOI) (Note 2)
Funds from Operations (FFO) (Note 3)
FFO Multiple (Note 4)

14,95011,93816.1 times

15,091
12,35315.1 times

14,414
11,91416.3 times

13,95011,57714.1 times

14,575
12,21313.7 times

179,806
143,580
16.1 times

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

7,652
489,200
15,642

8,134
489,200
16,6288,826
489,200
18,0438,504
443,000
19,1988,425
443,000
19,02092,027489,200
188.12

Notes: 1. Amounts in U.S. dollars are included solely for the convenience of readers outside Japan. The rate of ¥83.15 = US$1.00, the foreign exchange rate on
March 31, 2011, has been used for translation. The inclusion of such amounts is not intended to imply that Japanese yen amounts have been or could bereadily converted, realized or settled into U.S. dollars at that rate or any other rate.
2. NOI = Property-Related Revenues – Property-Related Expenses (excluding Depreciation)
3. FFO = Net Income + Depreciation – Gain (Loss) on Transfer of Properties – Gain on Transfer of Development Rights of Floor Area
– Compensation for the Property Transfer
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, 2009, 183 days for the period ended
September 30, 2009, 182 days for the period ended March 31, 2010, 183 days for the period ended September 30, 2010 and 182 days for the period ended
March 31, 2011.)

Top 10 Unitholders
As of March 31, 2011
Company

Japan Trustee Services Bank, Ltd. (Shintaku Acc.) ..................................................................................................
The Nomura Trust and Banking Co., Ltd. (Toshin Acc.) .......................................................................................
Trust & Custody Services Bank, Ltd. (Toshin Acc.) ................................................................................................
The Master Trust Bank of Japan, Ltd. (Shintaku Acc.) ...........................................................................................
NOMURA BANK (LUXEMBOURG) S.A. ...........................................................................................................
Mitsubishi Estate Co., Ltd. .....................................................................................................................................
THE BANK OF NEW YORK, TREATY JASDEC ACCOUNT ..........................................................................
The Chugoku Bank, Ltd. ........................................................................................................................................
BBH FOR MATTHEWS ASIAN GROWTH AND INCOME FUND ...............................................................
North Pacific Bank, Ltd. .........................................................................................................................................

Units% of total units
outstanding

56,93242,89938,064
15,724
12,586
10,160
9,510
8,930
8,039
7,493

11.64%
8.77%
7.78%
3.21%
2.57%
2.08%
1.94%
1.83%
1.64%
1.53%

TOPIX

The Company

Unit Price Performance
TSE REIT Index
325%
300%
275%
250%
225%
200%
175%
150%
125%
100%
75%
50% Sept.

Mar.

2001

2002

Sept.

Mar.

2003

Sept.

Mar.

2004

Sept.

Mar.

2005

Sept.

Mar.

2006

Sept.

Mar.

2007

Sept.

Mar.

2008

Sept.

Mar.

Sept.

2009

Mar.

2010

Sept.

Mar.

2011

Japan Real Estate Investment Corporation 1

The Strengths of Japan Real Estate Investment Corporation

Strengths

Stable Dividends

Collaboration withSponsors— Actual dividend per unit for the 19th
fiscal period:¥15,642($188.12)*— Forecasted dividend per unit for the 20th
fiscal period:***¥15,740($189.30)*, **The foreign exchange rate of ¥83.15 = US$1.00, as of March 31, 2011,
has been used for this translation.
The forecasted dividend was disclosed with the announcement of the
19th fiscal period earnings results on May 17, 2011.

— Expertise of

Mitsubishi Estate Co., Ltd.,The Dai-ichi Life
Insurance Company, Limited
and Mitsui & Co., Ltd.
is being fully utilized

Steady Growth with Quality
Portfolio

Sound Financial Base

— Total acquisition price:— Highest credit ratings for a J-REIT:(as of March 31, 2011)

A1

AAAA

¥660,601million
57— LTV (Interest-bearing debt / Total assets):— The first listed J-REIT, showing steady
performance for 19 consecutive periods— Long-term, fixed-interest debt ratio***:($7,945 million)— Maintains

high-quality office buildings

from S&P,

from Moody’s,

from R&I

42.1%
90.8%
*** Long-term, fixed-interest loans + Investment corporation bonds (including
current portions of Long-term, fixed-interest loans and Investment
corporation bonds) / Total Interest-bearing debt

2 Japan Real Estate Investment Corporation

Portfolio Highlights

Trends in the state of portfolio management
Number ofbuildings

Total numberof tenants(Note)

Total leasable
space

Occupancy
rate
2

September 2001

20

213

133,927m

March 2002

24

353

201,884m 2

94.6%
94.0%

September 2002

27

362

215,928m 2

95.3%

March 2003

30

383

236,693m2

94.4%

September 2003

32

407

246,062m 2

95.1%

March 2004

36

477

273,157m 2

94.8%

September 2004

39

504

293,105m 2

93.6%

March 2005

46

669

336,026m

2

97.6%

September 2005

50

814

364,610m 2

98.6%

March 2006

52

866

400,090m 2

98.7%

September 2006

49

835

396,173m 2

98.2%

March 2007

50

887

397,928m2

97.8%

September 2007

50

879

406,605m 2

98.7%

March 2008

53

931

479,877m 2

95.9%

September 2008

54

970

508,296m 2

96.1%

March 2009

55

993

516,411m 2

95.5%

September 2009

55

977

516,421m

2

93.3%

March 2010

55

979

566,277m2

93.0%

September 2010

55

992

567,612m2

92.4%

October 2010

55

985

567,613m 2

91.7%

November 2010

55

987

567,613m 2

92.0%

December 2010

55

989

567,613m 2

92.2%

January 2011

55

983

567,617m 2

92.2%

February 2011

56

986

584,416m 2

92.4%

March 2011

57

1,004

589,002m

93.2%

2

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

Total leasable space (m 2)100,000

200,000

300,000

400,000

500,000

600,000

700,000

Total leasable
space

Occupancy rate

19th 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, 2011

Properties bygeographic
regionOther major
cities15.4%

Tokyo 23 wards

76.6%

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

OthersTransport services 12.1%
and travel
Steel and metals

1.1%

Serviceindustries

15.1%
Financeand insurance

1.1%

10.8%

Ceramics

1.3%
Tokyo metropolitan area
excluding 23 wards

8.0%Real estate

9.4%

Staffing agencies

1.5%
Textiles2.6%

Information
services

Machinery

4.1%

8.8%
Pharmaceuticals

Communications

7.8%

4.8%
Construction

5.6%

Retail and E lectric devices
restaurants 7.1%

6.9%

Japan Real Estate Investment Corporation 3

New Portfolio Properties
For the period from October 1, 2010 to March 31, 2011

t an
G o
O s
ak
Ik ih ir oe ga k o
m i ji
Li
ne

egu

ro

Ri

v e

r
Art Village Osaki

New Otani Inn
Tokyo
Osaki Front Tower

ki
O sa

Term leaseholdinterest
Building:
Ownership
Structure:
Steel-framed
Floors:15 floors
Completion:
June 2005
Property management company:
Mitsubishi Estate Co., Ltd.

M

yu

Site area:
Floor area of building:
Ownership:Land:

February 1, 2011¥12,300 million
1-2-1 Osaki,
Shinagawa-ku,
Tokyo
3,684.38m2
23,673.92m2

Tok

Acquisition date:
Acquisition price:
Location:d aOsaki Front Tower

Gate City
Ohsaki

Rinkai Line

Property Acquisition Merits
Located in the Osaki area of Tokyo, the property is situated in a prime, newly redeveloped office area and a 3-minute walk from Osaki
Station, which provides direct access to the bay area and the wider Kanto urban area as well as the greater Tokyo metropolitan area. The
property is comparatively new, boasting attractive specifications, and is expected to retain its competitive edge over time.

Kyodo Building (Kayabacho 2Chome)

Chuo Police
Station

yab

a ch

o

T oz

ai L

ine

K a

yab

a ch

o

K a

L in

e

Kyodo Building (Kayabacho 2Chome)

H i
biy
a

Floors:Above ground:
9 floors
Below ground:
1 floorCompletion:
April 1991
Property management company:
Bussan Real Estate Co., Ltd.

nl i taop o ay
et r r es s wp
E x

Site area:
Floor area of building:
Structure:

March 1, 2011
¥4,410 million
2-13-13
NihonbashiKayabacho,
Chuo-ku, Tokyo
754.26m2
5,505.80m2
Steel-framed
reinforced
concrete

M

Acquisition date:
Acquisition price:
Location:

Property Acquisition Merits
Located in the heart of Tokyo in the bustling Kayabacho financial district, the property enjoys a superior location close to Kayabacho
Station and is in walking distance of Nihonbashi Station, making it accessible by a number of subway lines. Having undergone a drastic
renovation in 2008 that encompassed work on the building exterior, interior and facilities, the property boasts competitive specifications
as an office building.

4 Japan Real Estate Investment Corporation

Subsequent Events
After the period ended March 31, 2011

Transfer of AssetIn addition to acquiring new properties, the Company transferred the following property in order to further enhance the quality of its portfolio.
Takanawadai Building
Transferred asset:
Transfer date:
Transfer price:
Acquisition date:
Acquisition price:
Profit on the sale:Transferee:

Trust beneficiary right in trust of domestic real estate (Takanawadai Building)(Note 1)
April 1, 2011
¥3,160 million (excluding any balance due or payment for fixed property and city planning taxes, etc.)
September 25, 2001
¥2,738 million
Approx. ¥540 million (Note 2)
Nomura Real Estate Development Co., Ltd.

Notes: 1. For an overview of the Takanawadai Building, please refer to the “Overview of Portfolio Properties” on page 17.
2. Profit on the sale of this property is a forecast amount disclosed in the earnings results for the 19th fiscal period (October 1, 2010 to March 31, 2011)
on May 17, 2011 and may be subject to future changes.

Partition of Co-Ownership Interest in the Mitsubishi UFJ Trust and Banking Building
On April 28, 2011, the Company partitioned property co-owned with Mitsubishi Estate Co., Ltd. with regard to the companies’ coownership interest in the Mitsubishi UFJ Trust and Banking Building.
Consequently, a portion of the co-ownership interest in the lower floors of the building (B3-12F) became the sole property of
Mitsubishi Estate Co., Ltd., while the Company’s co-ownership interest in the upper floors (13F-29F) increased from 22.6% to 34.7%.
Following the transaction, Mitsubishi UFJ Trust and Banking Corporation acquired a portion of the building (including
the surrounding site) that it had been renting from the sole owner, Mitsubishi Estate Co., Ltd.
Layout Diagram

Co-owned property before partition

Mitsubishi
Estate77.4%

Co-owned property after partition

JRE
22.6%

Partition ofco-owned
property

Mitsubishi
Estate65.3%

Mitsubishi
Estate100.0%The
IndustryClubof Japan

Mitsubishi
Estate
77.4%

The Industry Clubof Japan Hall

JRE
22.6%

Mitsubishi UFJ Trustand Banking Building

The
IndustryClubof Japan

Mitsubishi
Estate100.0%

13F-29F
JRE
34.7%

2-12F
5F
B1-1F
B4-B2

Mitsubishi
Estate
77.4%

JRE
22.6%

The Company’s Interest Before and After Partition
Land:

Ownership (2 lots comprising co-ownership interest of 226/1,000 and 1 lot comprising co-ownershipinterest of 2,795/10,000)

Building (Note 1):

Compartmentalized building units(co-ownership interest of a portion of
B4-7F and 8F-29F totaling 226/1,000)

Compartmentalized building units (co-ownership interestof a portion of B4-1F totaling 226/1,000 and co-ownershipinterest of 13F-29F totaling 347/1,000)

Appraisal value (Note 2):¥46,500 million¥46,500 million

Notes: 1. A description of co-ownership interest of the common area as set forth in the rules on management has been omitted.
2. All appraisal values as of March 31, 2011 made by Daiwa Real Estate Appraisal Co., Ltd. have been listed.

Japan Real Estate Investment Corporation 5

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

Occupancy rate
94.6%

95.3%

94.0%

95.1%

94.4%

94.8%

97.6%

98.6%

98.7%

93.6%

Total acquisition price(Number of properties)

Keep stable
occupancy rate

Steady growth inasset size
¥412,766
million(52)

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

¥326,560¥290,510¥144,697
million(24)¥92,845¥164,277¥183,542 ¥192,607
millionmillion(27)

million(30)(32)¥218,437 ¥239,827
millionmillion(36)(39)

million(50)

million(46)

million(20)

At IPO

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¥14,983¥12,853¥14,455¥15,117¥14,602¥14,711¥15,824¥15,951¥16,172

Dividend
per unit
Bond issues

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

Apr. 2003
Second/Third
Investment Corporation
Bond Issue

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

Listing and issuance of units
Sept. 2001
Listed on TSE
as first J-REIT
Sept. 2001
IPO

6 Japan Real Estate Investment Corporation

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

Oct. 2003
Second Follow-On

Apr. 2005
Third Follow-Onalready held. The size of the Company’s assets (total acquisition price) has grown from ¥92.8 billion at
IPO to ¥660.6 billion as of the 19th fiscal period end due to the steady achievement of external
growth strategies. However, in terms of internal growth strategies, ongoing efforts are being made insuch areas as maintaining stable occupancy rates and reducing building management costs.

95.9%
98.2%

96.1%

95.5%

98.7%

97.8%

93.3%

Built a portfolio that is worth
over ¥660 billion¥518,969¥418,693¥441,276 ¥446,940
millionmillion
(53)

93.0%

92.4%

93.2%

¥641,245 ¥643,891 ¥660,601
million(55)

million(55)

million(57)¥564,219¥542,969 ¥564,219
millionmillionmillion
(54)

(55)

(55)

million(50)(50)

Period ended

Period ended

Period ended

Period ended Period ended

Period ended

Period ended

Period ended

Period ended

Period ended

Sept. 2006

Mar. 2007

Sept. 2007

Mar. 2008

Sept. 2008

Mar. 2009

Sept. 2009

Mar. 2010

Sept. 2010

Mar. 2011¥17,302¥17,521¥18,500¥29,223¥19,072¥19,020¥19,198¥18,043¥16,628¥15,642

million(49)

June 2007
Fifth/Sixth Investment
Corporation Bond Issue

Apr. 2010
Seventh Investment
Corporation Bond Issue
July 2010
Eighth Investment
Corporation Bond Issue

Oct. 2006
Fourth Follow-On

Mar. 2008
Fifth Follow-On

Dec. 2009
Sixth Follow-On

Japan Real Estate Investment Corporation 7

To Our Unitholders

8 Japan Real Estate Investment Corporation

Amid these severe market conditions, the Company strived to improve
occupancy rates by aggressively promoting leasing activities that take into
account market trends. In addition, as part of its external growth strategy,
the Company acquired the Osaki Front Tower and the Kyodo Building(Kayabacho 2Chome). Through these acquisitions, the Company endeavoredto further reinforce its portfolio.
BUSINESS PERFORMANCEFOR THE 19TH FISCAL PERIOD
Summary of Financial Results and Cash Dividend
In the 19th fiscal period (October 1, 2010 to March 31, 2011),
Japan Real Estate Investment Corporation (“the Company”)
recorded operating revenues totaling ¥22,135 million, up 0.1%
compared with the previous period. On the earnings front,
operating income declined 1.4% to ¥9,802 million. After
deducting expenses for interest payments on loans and other costs,
ordinary income decreased 2.4% to ¥7,938 million. During theperiod under review, the Company also recorded a ¥281 million
extraordinary loss in the form of a provision for loss on disasterassociated with the Great East Japan Earthquake. As a result, net
income declined 5.9% to ¥7,652 million.
Accordingly, the amount of cash dividends for the period
under review resulted in a per-unit cash dividend of ¥15,642.

Operating Environment and Performance
During the period under review, the Japanese economy wasstagnant because of several factors, including deflation, severe
employment conditions, decreases in production and exports
due to the strong yen, and weak consumer spending. At the
beginning of 2011, there were signs of economic recovery,reflecting the global economy's getting back on track. However,the Great East Japan Earthquake on March 11, 2011, had atremendous impact, bringing Japan to the greatest crisis it has
faced in the post-war era as it confronted massive damage to
its economy, including precipitous drops in consumer spending
and industrial production.
In the market for leased office space, rent levels
continued to decrease despite the decline in occupancy rates forTokyo office buildings having bottomed out for the most part.
Although some regional business areas showed improvement,with a decrease in the number of new spaces coming available,
the overall trend of high vacancy rates coupled with low rent
levels prevailed amid stagnant demand for office space.
In the property market, the number of transactions

increased on the back of an upturn in the fund raising
environment as well as further adjustments in property prices.
Reflecting this, the REIT industry's acquisition volume increased.
Amid such circumstances, the Company strived to
improve occupancy rates by aggressively promoting leasing
activities that take into account market trends. In addition, as
part of its external growth strategy, the Company acquired theOsaki Front Tower and the Kyodo Building (Kayabacho
2Chome). Through these acquisitions, the Company
endeavored to further reinforce its portfolio.
As a result of these activities, the Company's portfolio
as of March 31, 2011, consisted of 57 office buildings with a
total acquisition price of ¥660,601 million. Total leasable spacestood at 589,002m2, with a total of 1,004 tenants.
As of the issuance date of this report, no significant
damage to the Company's business operations due to the Great
East Japan Earthquake on March 11, 2011 has been detected
at any of the 56 properties, including two office buildings in
Sendai (the Jozenji Park Building and the Sendai Honcho
Honma Building), held by the Company.

Financial Activities
To fund the repayment of existing loans, the Company procured¥1,000 million on December 20, 2010; ¥10,000 million on
December 21, 2010; ¥3,000 million on January 17, 2011;¥10,500 million on March 24, 2011; and ¥2,000 million on
March 30, 2011, through loans.
Furthermore, the Company procured ¥6,000 million on
February 1, 2011, and ¥4,000 million on March 1, 2011, to partly
fund the acquisitions of the Osaki Front Tower and the Kyodo
Building (Kayabacho 2Chome), respectively.
As a result of these financing activities, as of March 31,
2011, the Company's total interest-bearing debt amounted to¥272,400 million. This amount consists of long-term loans
totaling ¥192,400 million, which includes a current portion
totaling ¥68,100 million, short-term loans totaling ¥25,000
million, and investment corporation bonds totaling ¥55,000
million.

Japan Real Estate Investment Corporation 9

The Company intends to turn such severe conditions into an opportunity,
shifting its focus towards external growth based on overall growth that willcompensate for a fall in internal growth. Through such actions, the Company
will work to increase revenues and earnings and, in turn, maintain andimprove per-unit cash dividends.

As of March 31, 2011, the Company's long-term, fixedinterest debt ratio (ratio of long-term, fixed-interest debt,
including the current portion of long-term loans and investment
corporation bonds, to total interest-bearing debt) stood at 90.8%,
and the LTV ratio (ratio of interest-bearing debt to total assets)was 42.1%. As these figures indicate, the Company has been able
to maintain a sound and conservative financial standing.
The Company's credit ratings as of the date of this reportwere as follows.
Credit Rating Agency

Credit RatingStandard & Poor's Ratings Japan K.K.

Long-term: AA-;
Short-term: A-1+;
Outlook: Negative

Moody's Japan K.K.

Rating: A1; Outlook: Stable

Rating and Investment Information, Inc.

Rating: AA; Outlook: Stable

OUTLOOK
Trends in the Office Leasing Market
On top of the negative impact from shrinking production andspending due to the Great East Japan Earthquake, the Japanese
economy is facing a number of challenges, including power
shortages and issues regarding nuclear power plants, clouding
future prospects.
In the market for leased office space, vacancy rates areprojected to remain flat amid the stagnant economic recovery anda certain period of time will pass before rent levels regain upward
momentum. Moreover, concerns about decreasing demand for
office space persist as we look toward a future where thedecelerated economic conditions are exasperated by an expectedsupply-demand imbalance as the office building supply grows.
On the other hand, we expect that in the property market
transactions will stabilize thanks to an accommodative fundraising environment. However, the Company considers it
important to obtain and analyze more detailed property
information in order to acquire prime properties amid anincreasingly uncertain leasing market.

10 Japan Real Estate Investment Corporation

Growth Strategies
In accordance with the aforementioned, the Company adheresto the following management policies in order to maintain andimprove profitability.
First, the Company works to strengthen the relationshipof trust with existing tenants and strategically raise rent levels. Asof March 31, 2011, the Company had contracts with 11 property
management companies. Most of these companies were alreadymanaging their respective buildings before the Company acquired
them and have thus built relationships of trust with their tenants.
The Company works to further strengthen these relationships
by anticipating tenants' needs and providing tailored services toincrease tenant satisfaction and subsequently maintain occupancy
rates and restrain rent reduction requests.
Second, we 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, we constantly strive to stabilize our revenues andearnings. With the aim of stabilizing revenues and earnings, theCompany endeavors to apply 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. These
companies are revamping their management systems and cost
structures on an ongoing basis.
With regard to the acquisition of properties, the Company
has adopted the following policies.
First, the Company continually enhances its property
information channels and develops new channels in order toaccess important information quickly.
Second, in its acquisition activities, the Company
continues to meticulously monitor and examine economic,

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

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

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 newearthquake-resistance standards 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 maintains 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, in orderto further enhance the quality of its portfolio, the Company willremain open to the replacement of portfolio properties with due
consideration given to timing.

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% to 40%.
Concerning 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. Whenobtaining a loan, the Company strictly adheres to its financial
policies. More specifically, with the aim of minimizing 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 20th and 21st Fiscal Periods

For the 21st fiscal period (October 1, 2011, to March 31,2012), the Company forecasts operating revenues totaling¥22,190 million, operating income totaling ¥9,570 million,
ordinary income totaling ¥7,730 million, and net income totaling¥7,710 million. The Company plans to declare a cash dividend
totaling ¥15,770 per unit.
At present, economic conditions and real estate markets
in Japan remain severe.
When market conditions are difficult, there are concerns
over a fall in earnings primarily caused by increasing vacancy rates
and decreasing rents. Conversely, from a property acquisition
standpoint, such conditions lead to what is referred to as a buyer's
market, in which prime properties can be purchased at reasonable
prices. The Company intends to turn such severe conditions into
an opportunity, shifting its focus towards external growth basedon overall growth that will compensate for a fall in internal
growth. Through such actions, the Company will work to increase
revenues and earnings and, in turn, maintain and improve perunit cash dividends.
As a going concern bearing significant responsibility to
manage your invaluable investment, we appreciate you for yoursteadfast trust in us and ask for your resolute support.

Noritada Terasawa
Executive Director of Japan Real Estate Investment Corporation

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

For the 20th fiscal period (April 1, 2011, to September 30, 2011),
the Company forecasts operating revenues totaling ¥22,800
million, operating income totaling ¥10,090 million, ordinary
income totaling ¥8,260 million, and net income totaling ¥8,030
million. The Company plans to declare a cash dividend totaling¥15,740 per unit.

Japan Real Estate Investment Corporation 11

The Portfolio of Japan Real Estate Investment Corporation As of March 31, 2011
Properties Roster
Location

Type ofspecified asset

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

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

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

P I- 9P I- 10
P I- 11
P I- 12
P I- 13
P I- 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

P I- 15
P I- 16
P I- 17

Harumi Center Building
Aoyama Crystal Building
Shiodome Building

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

Real property
Real property
Trust

P I- 18
P I- 19
P I- 20
P I- 21

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

P I- 22
P I- 23
P I- 24
P I- 25
P I- 26
P I- 27
P I- 28
P I- 29
P I- 30

Takanawadai Building
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-Gotanda, Shinagawa-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

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

P I- 31
Harmony Tower
P I- 32
Otsuka Higashi-Ikebukuro Building
P I- 33
Ikebukuro 2Chome Building
P I- 34
Ikebukuro YS Building
Tokyo metropolitan area, excluding 23 wards
P II- 1
Hachioji First Square

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

Real property
Trust
Trust
Real property

10/31/2002
02/24/2006
05/31/2002
08/15/2002
04/01/2005
03/28/2007
07/29/2005
01/31/2005
04/03/2006
total
08/01/2003
09/25/2001
03/01/2011
07/22/2002
03/10/2005
03/15/2005
05/24/2010
total
12/18/2007
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
09/25/2001
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
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
26,8007,680
21,25054,60075,850
4,859
2,808
7,830
9,350
22,426
31,7762,738
5,500
12,300
5,123
6,670
8,700
4,885
12,20034,600
3,740
360
4,100
8,500
3,541
1,728
4,500

Hachioji, Tokyo

Real property

P II- 2

Saitama, Saitama Prefecture

Real property

P II- 3
MM Park Building
P II- 4
Kawasaki Isago Building
P II- 5
Musashi Kosugi STM Building
Other major cities
P III- 1
8.3 Square Kita Building
P III- 2
Jozenji Park Building
P III- 3
Sendai Honcho Honma Building

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

Real property
Real property
Trust

P III- 4

Kanazawa Park Building

Kanazawa, Ishikawa Prefecture

Real property

P III- 5

Nishiki Park Building

Nagoya, Aichi Prefecture

Real property

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

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

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

Real property
Real property
Real property
Real property
Trust
Real property

P III- 12

Midosuji Daiwa Building

Osaka, Osaka Prefecture

Trust

P III- 13
P III- 14

Lit City Building
NHK Hiroshima Broadcasting Center Building

Okayama, Okayama Prefecture
Hiroshima, Hiroshima Prefecture

Real property
Real property

P III- 15
P III- 16
P III- 17

Tosei Tenjin Building
Tenjin Crystal Building
Hinode Tenjin Building
Total

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

Real property
Real property
Trust

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

7,100
1,000
2,924
250
3,174
2,880
1,700
4,580
3,850
1,300
5,150
1,680
14,5331,865
2,650
24,000
2,264
1,900
4,164
6,934
7,380
14,314
4,650
1,320
1,450
2,770
1,550
5,000
3,657
660,601

NumberName of building

Saitama Urawa Building

Note: With regard to the 19th Period appraisal value of the Takanawadai Building transferred on April 1, 2011, the transfer price of the building is described.

12 Japan Real Estate Investment Corporation

Acquisition price(¥ mil)(0.8%)(12.3%)(1.4%)(0.7%)(2.2%)(6.8%)(1.1%)(3.2%)(1.1%)(0.5%)(0.7%)(0.8%)(2.5%)(1.2%)(4.1%)(1.2%)(11.5%)(0.7%)(0.4%)(1.2%)(4.8%)(0.4%)(0.8%)(1.9%)(0.8%)(1.0%)(1.3%)(0.7%)(1.8%)(5.2%)(0.6%)(1.3%)(0.5%)(0.3%)(0.7%)(0.9%)(0.4%)(5.7%)(0.5%)(0.6%)(1.1%)(0.2%)(0.5%)(0.7%)(0.8%)(0.3%)(2.2%)(0.3%)(0.4%)(3.6%)(0.6%)(2.2%)(0.7%)(0.4%)(0.2%)(0.8%)(0.6%)(100.0%)Percentage ofownership of thebuilding

Completion

Appraisal value atthe end of
period (¥ mil)

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

1985
2006
1998
1993
2004
2003
2005
1966

6,050
68,2008,980
4,720
16,00046,5006,220
28,4004,791m2
25,678m2
6,269m2
3,687m2
9,316m2
11,922m2
4,495m2
20,871m2(51,577ft2)(276,402ft2)(67,480ft2)(39,695ft2)(100,282ft2)(128,332ft2)(48,384ft2)(224,662ft2)

4,791m2
23,313m2
6,019m2
3,218m2
9,316m2
11,922m2
4,495m2
20,298m2

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

1975
1991
1991
2002
1982
1998

7,610
3,330
4,680
6,170
14,9005,540

4,694m2
3,897m2
4,538m2
4,279m2
4,329m2
4,253m2(50,531ft2)(41,950ft2)(48,852ft2)(46,068ft2)(46,604ft2)(45,784ft2)

100.0%
100.0%
40.0%

2006
1982
2007

20,6007,730
79,60020,812m2
4,898m2
32,155m2

100.0%
100.0%
100.0%
31.325%

1984
1992
1989
1996

6,180
2,830
6,240
32,000100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
12.29939%

1991
2004
2005
1989
1974
2003
1987
1998
1976
1994

29.253305%
100.0%
100.0%
100.0%

Occupancy
rate

Numberof tenants(51,577ft2)(250,948ft2)(64,796ft2)(34,641ft2)(100,282ft2)(128,332ft2)(48,384ft2)(218,487ft2)

100.0%
90.8%
96.0%
87.3%
100.0%
100.0%
100.0%
97.3%

1
4
7
9
1
10
1
43

224
1,579
282
86
481
984
162
1,011

(1.0%)(7.1%)(1.3%)(0.4%)(2.2%)(4.4%)(0.7%)(4.6%)

4,095m2
3,897m2
3,737m2
4,279m2
4,290m2
2,893m2(44,081ft2)(41,950ft2)(40,230ft2)(46,068ft2)(46,178ft2)(31,148ft2)

87.2%
100.0%
82.4%
100.0%
99.1%
68.0%

13
10
8
1
10
7

245
114
19
150
381
131

(1.1%)(0.5%)(0.1%)(0.7%)(1.7%)(0.6%)(224,022ft2)(52,724ft2)(346,118ft2)

20,425m2
4,898m2
32,052m2(219,858ft2)(52,724ft2)(345,009ft2)

98.1%
100.0%
99.7%

6
7
29

671
219
2,390

(3.0%)(1.0%)(10.8%)

9,632m2
4,062m2
6,133m2
35,043m2(103,684ft2)(43,726ft2)(66,026ft2)(377,203ft2)

9,501m2
4,062m2
6,133m2
32,763m2(102,277ft2)(43,726ft2)(66,026ft2)(352,665ft2)

98.6%
100.0%
100.0%
93.5%

19
8
10
95

313
98
174
1,767

(1.4%)(0.4%)(0.8%)(8.0%)

3,160
5,650
15,1705,250
7,260
10,200
6,090
10,40040,8002,840

4,067m2
5,205m2
16,856m2
7,708m2
7,356m2
7,745m2
3,147m2
5,558m2
29,795m2
2,462m2(43,783ft2)(56,035ft2)(181,446ft2)(82,972ft2)(79,180ft2)(83,373ft2)(33,876ft2)(59,832ft2)(320,718ft2)(26,511ft2)

0m2
5,205m2
16,856m2
7,394m2
7,356m2
7,745m2
3,147m2
5,558m2
29,363m2
1,231m2(0ft2)(56,035ft2)(181,446ft2)(79,591ft2)(79,180ft2)(83,373ft2)(33,876ft2)(59,832ft2)(316,065ft2)(13,255ft2)

0.0%
100.0%
100.0%
95.9%
100.0%
100.0%
100.0%
100.0%
98.5%
50.0%

0
4
1
18
21
8
4
7
58
2

6
198
191
253
305
317
196
347
1,393
68

(0.0%)(0.9%)(0.9%)(1.1%)(1.4%)(1.4%)(0.9%)(1.6%)(6.3%)(0.3%)

1997
1987
1990
1989

9,240
3,820
1,580
4,380

10,929m2
7,183m2
2,186m2
5,901m2(117,646ft2)(77,319ft2)(23,532ft2)(63,527ft2)

9,374m2
6,195m2
2,186m2
5,700m2(100,902ft2)(66,683ft2)(23,532ft2)(61,363ft2)

85.8%
86.2%
100.0%
96.6%

12
5
9
10

366
201
75
197

(1.7%)(0.9%)(0.3%)(0.9%)

80.4%

1996

4,450

10,068m2(108,378ft2)

9,216m2(99,206ft2)

91.5%

37

241

(1.1%)

100.0%

1990

2,080

4,510m2(48,550ft2)

4,510m2(48,550ft2)

100.0%

14

115(0.5%)

100.0%
100.0%
34.32%

2007
1990
1990

35,9002,850
3,520

38,496m2
6,831m2
5,394m2(414,374ft2)(73,537ft2)(58,071ft2)

37,282m2
6,831m2
4,671m2(401,309ft2)(73,537ft2)(50,279ft2)

96.8%
100.0%
86.6%

27
12
20

1,378
165
151

(6.2%)(0.7%)(0.7%)

100.0%
50.0%
100.0%

2006
1993
1991

6,630
890
2,490

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

12,265m2
2,518m2
5,448m2(132,030ft2)(27,106ft2)(58,646ft2)

100.0%
100.0%
87.3%

8
18
17

326
67
124

(1.5%)(0.3%)(0.6%)

89.0%

1991

5,330

20,848m2(224,408ft2)

17,276m2(185,957ft2)

82.9%

73

447

(2.0%)

57.04651%

1995

3,720

8,056m2(86,715ft2)

7,844m2(84,439ft2)

97.4%

52

256

(1.2%)

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

1987
1987
1991
1982
1995
1992

1,460
12,7001,090
1,720
16,6003,660

3,911m2
21,624m2
3,470m2
6,801m2
28,414m2
11,574m2(42,103ft2)(232,763ft2)(37,354ft2)(73,215ft2)(305,852ft2)(124,587ft2)

3,051m2
18,517m2
2,837m2
4,711m2
25,245m2
10,111m2(32,851ft2)(199,322ft2)(30,546ft2)(50,710ft2)(271,738ft2)(108,836ft2)

78.0%
85.6%
81.8%
69.3%
88.8%
87.4%

12
24
10
27
42
17

94
580
71
94
696
230

(0.4%)(2.6%)(0.3%)(0.4%)(3.1%)(1.0%)

100.0%

1991

14,10020,450m2(220,127ft2)

19,350m2(208,285ft2)

94.6%

34

569

(2.6%)

27.7488%
48.753%

2005
1994

4,220
2,970

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

9,286m2
9,368m2(99,961ft2)(100,846ft2)

93.2%
95.0%

37
11

255
253

(1.2%)(1.1%)

100.0%
100.0%
74.4844%

1992
1993
1987

1,320
2,480
3,720
642,220

4,000m2
5,973m2
5,852m2
589,002m2(43,057ft2)(64,296ft2)(62,995ft2)(6,339,965ft2)

3,924m2
5,637m2
5,482m2
549,114m2(42,243ft2)(60,682ft2)(59,015ft2)(5,910,616ft2)

98.1%
94.4%
93.7%
93.2%

18
30
6
1,004

88
143
175
22,135(0.4%)(0.6%)(0.8%)(100.0%)

Leasable space

Leased space

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

Major Tenants Roster
Rank

Name of tenant

Name of building

Leased space% of totalleased space

1
2
3
4
5
6
7
8
9
10

MSD K.K.
Mitsubishi Estate Co., Ltd.
NTT Communications Corporation
Mitsubishi UFJ Trust and Banking Corporation
Seven & i Holdings Co., Ltd.
Space Design, Inc.
JSOL Corporation(Note)TOTO LTD.
SANYO SHOKAI LTD.

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

23,126m2 (248,935ft2)
16,856m2 (181,446ft2)
11,813m2 (127,157ft2)
10,665m2 (114,802ft2)
9,316m2 (100,282ft2)
8,774m2 (94,453ft2)
8,567m2 (92,224ft2)
7,027m2 (75,643ft2)
6,118m2 (65,864ft2)
5,935m2 (63,889ft2)

4.2%
3.1%
2.2%
1.9%
1.7%
1.6%
1.6%
1.3%
1.1%
1.1%

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-17: Other major cities

III-1

II-2
II-1
III-2

III-3

II-5
II-3

III-4

II-4

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

I-1 to I-34: Tokyo
23 wards

I-33
I-34 I-32
I-31

I-2

I-1

I-3
I-5
I-20
I-4
I-25
I-10
I-7
I-21
I-6
I-12
I-26 I-27
I-13
I-8
I-9
I-11
I-28
I-14
I-29
I-16
I-17
I-15
I-18
I-30
I-19
I-22
I-23

I-24

Tokyo Station

14 Japan Real Estate Investment Corporation

Over view of Portfolio Properties As of March 31, 2011
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 PlazaP

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

Kitanomaru SquareI-1

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

P

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

MD Kanda BuildingP

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

P

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

Nibancho Garden

P

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

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

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

Completion:

I-6

Chiyoda-ku, Tokyo
8,100.39m2 (87,192ft2)
108,171.67m2 (1,164,349ft2)
Above ground: 29 floors
Below ground: 4 floors
February 2003

Sanno Grand Building

I-7

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

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

P

Burex Kojimachi
Building
P

I-4

Mitsubishi UFJ Trust andBanking Building

I-5

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

Chiyoda-ku, Tokyo
5,821.03m2 (62,657ft2)
57,279.20m2 (616,548ft2)
Above ground: 26 floors
Below ground: 2 floors
January 2006

Kandabashi Park
Building

I-3

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

I-2

P

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

I-8

Chiyoda-ku, Tokyo
3,663.93m2 (39,438ft2)
33,875.95m2 (364,637ft2)
Above ground: 10 floors
Below ground: 3 floors
September 1966

Japan Real Estate Investment Corporation 15

Yurakucho Denki
Building
P

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

Kodenmacho Shin-Nihonbashi
Building

I-9

Chiyoda-ku, Tokyo
5,749.91m2 (61,891ft2)
70,287.65m2 (756,569ft2)
Above ground: 20 floors
Below ground: 4 floors
September 1975

P

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

Kyodo Building(Kayabacho 2Chome)P

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

P

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

Ginza Sanwa BuildingP

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

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

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

Chuo-ku, Tokyo
864.91m2 (9,310ft2)
5,751.68m2 (61,911ft2)
Above ground: 8 floors
Below ground: 1 floor
October 1998

P

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

16 Japan Real Estate Investment Corporation

I-14

Aoyama Crystal
Building

I-15

Chuo-ku, Tokyo
4,664.63m2 (50,210ft2)
26,447.27m2 (284,676ft2)
Above ground: 10 floors
November 2006

Chuo-ku, Tokyo
756.03m2 (8,138ft2)
5,470.54m2 (58,884ft2)
Above ground: 8 floors
Below ground: 1 floor
February 2002

P

Harumi Center Building

P

I-12

Ryoshin Ginza East
Mirror Building

I-13

Chuo-ku, Tokyo
1,119.27m2 (12,048ft2)
8,851.00m2 (95,271ft2)
Above ground: 9 floors
Below ground: 2 floors
October 1982

Chuo-ku, Tokyo
773.28m2 (8,324ft2)
5,822.88m2 (62,677ft2)
Above ground: 9 floors
Below ground: 1 floor
November 1991

Burex Kyobashi
Building

I-11

Chuo-ku, Tokyo
754.26m2 (8,119ft2)
5,505.80m2 (59,264ft2)
Above ground: 9 floors
Below ground: 1 floor
April 1991

I-10

I-16

Minato-ku, Tokyo
989.30m2 (10,649ft2)
8,094.36m2 (87,127ft2)
Above ground: 10 floors
Below ground: 4 floors
December 1982

Shiodome BuildingP

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

Shiba 2Chome
Daimon Building

I-17

Minato-ku, Tokyo
12,046.00m2 (129,662ft2)
115,930.83m2 (1,247,868ft2)
Above ground: 24 floors
Below ground: 2 floors
December 2007

P

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

Cosmo Kanasugibashi
Building
P

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

P

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

Tokyo Opera City
Building
P

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

Shinjuku-ku, Tokyo
822.00m2 (8,848ft2)
8,291.69m2 (89,251ft2)
Above ground: 10 floors
Below ground: 1 floor
November 1989

Takanawadai Building

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

Higashi-Gotanda
1Chome Building

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

I-20

I-21

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

P

Minato-ku, Tokyo
2,820.90m2 (30,364ft2)
16,235.10m2 (174,753ft2)
Above ground: 8 floors
Below ground: 2 floors
March 1984

Shinwa Building

I-19

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

I-18

Osaki Front Tower

I-22

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

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

P

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

I-23

Shinagawa-ku, Tokyo
3,684.38m2 (39,658ft2)
23,673.92m2 (254,824ft2)
Above ground: 15 floors
June 2005

Japan Real Estate Investment Corporation 17

Omori-Eki Higashiguchi
Building
P

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

Nippon Brunswick
Building

I-24

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

P

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

Yoyogi 1Chome
Building
P

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

P

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

Jingumae Media
Square BuildingP

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

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

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

Completion:

18 Japan Real Estate Investment Corporation

I-29

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

Harmony Tower

I-30

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

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

P

Ebisu Neonato

P

I-27

Shibuya Cross Tower

I-28

Shibuya-ku, Tokyo
2,124.59m2 (22,869ft2)
9,420.42m2 (101,400ft2)
Above ground: 9 floors
Below ground: 2 floors
March 1998

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

da Vinci Harajuku

I-26

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

I-25

P

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

I-31

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

Otsuka Higashi-Ikebukuro
Building
P

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

Ikebukuro 2Chome
Building

I-32

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

P

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

Ikebukuro YS
Building
P

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

P

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

Saitama Urawa
Building
P

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

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

Kawasaki Isago
Building

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

II-3

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

Musashi Kosugi
STM Building

II-4

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

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

P

Completion:

P

II-1

MM Park Building

II-2

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

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

Hachioji First
SquareI-34

Toshima-ku, Tokyo
1,384.56m2 (14,903ft2)
7,464.64m2 (80,349ft2)
Above ground: 8 floors
Below ground: 1 floor
December 1989

I-33

P

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

II-5

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

Japan Real Estate Investment Corporation 19

8 . 3 Square Kita
Building
P

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

Jozenji Park Building

III-1

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

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

Sendai Honcho
Honma BuildingP

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

P

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

Nishiki Park BuildingP

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

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

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

Completion:

20 Japan Real Estate Investment Corporation

III-6

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

Nagoya Misono
Building

III-7

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

Kanazawa, Ishikawa Prefecture
6,642.71m2 (71,501ft2)
43,481.20m2 (468,027ft2)
Above ground: 12 floors
Below ground: 2 floors
October 1991

P

Nagoya Hirokoji
Building
P

III-4

Hirokoji Sakae
Building

III-5

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

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

Kanazawa Park
Building

III-3

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

III-2

P

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

III-8

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

Kyoto Shijo
Kawaramachi BuildingP

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

Shin-Fujita Building

III-9

P

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

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

Sakaisujihonmachi
Building
P

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

P

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

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

III-13
Location:
Site area:
Floor area of building:
Structure:

Tosei
TenjinBuilding

TenjinCrystal
Building

III-15

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

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

P

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

P

III-12

NHK Hiroshima
Broadcasting Center
Building

Lit City BuildingP

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

Midosuji Daiwa
Building

III-11

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

III-10Completion:P

III-16

Location:
Fukuoka, Fukuoka Prefecture
Site area:
1,835.17m2 (19,754ft2)
Floor area of building: 10,432.04m2 (112,289ft2)
Structure:
Above ground: 14 floors
Below ground: 1 floor
Completion:
August 1993

III-14Hiroshima, Hiroshima Prefecture
3,296.46m2 (35,483ft2)
35,217.28m2 (379,075ft2)
Above ground: 23 floors
Below ground: 2 floors
August 1994

HinodeTenjinBuildingP

III-17

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

Japan Real Estate Investment Corporation 21

22 Japan Real Estate Investment Corporation

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

p.23
p.24
p.26
p.26
p.27
p.28
p.40

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, 2010 toApril 1, 2010 to
October 1, 2009 to
April 1, 2009 to
October 1, 2008 to October 1, 2010 toMarch 31, 2011 September 30, 2010 March 31, 2010 September 30, 2009 March 31, 2009
March 31, 2011

Operating Revenues¥ 22,135¥ 22,112¥ 21,665¥ 21,524¥ 20,716$  266,217

Operating Expenses

12,333

12,173

11,127

11,46910,761

148,325

Operating Income

9,802

9,939

10,53810,054

9,955

117,892

Ordinary Income

7,938

8,135

8,876

8,505

8,426

95,476

Income before Income Taxes

7,657

8,135

8,876

8,505

8,426

92,094Net Income

7,652

8,134

8,875

8,504

8,425

92,028

Total Assets

646,847

634,974

637,326

564,528565,022

7,779,289

Interest-Bearing Debts

272,400

262,450

262,500

220,500

220,500

3,276,007

Net Assets

332,054332,536

333,228

306,106

306,027

3,993,437

Unitholders’ Capital

324,353

324,353

324,353

297,601

297,6013,900,819

Number of Units

489,200

489,200

489,200

443,000

443,000

489,200

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

678,770

679,755

681,170

690,984

690,806

8,163

7,652

8,134

8,826

8,504

8,425

92,027

Cash Distribution
Dividend Payout Ratio

99.9%

99.9%

99.4%

100.0%

99.9%

99.9%

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

15,642

16,62818,04319,19819,020188.12Net Operating Income (NOI)

14,95015,091

14,414

13,95014,575

179,806

Funds from Operations (FFO)

11,93812,353

11,914

11,577

12,213

143,580Return on Assets (ROA) (Note 2)

1.2%

1.3%

1.5%

1.5%

1.5%

(2.5% annualized)

Return on Equity (ROE) (Note 3)

2.3 %(4.6% annualized)(2.6% annualized)

2.4 %(4.9% annualized)(3.0% annualized)

2.7 %(5.5% annualized)(3.0% annualized)

2.8 %(5.5% annualized)(3.1% annualized)

2.8 %(5.5% annualized)

1.2%(2.5% annualized)

2.3%(4.6% annualized)

EOP Equity Ratio (Note 4)

51.3%

52.4%

52.3%

54.2%

54.2%

51.3%

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

42.1%

41.3%

41.2%

39.1%

39.0%

42.1%

FFO Multiple

16.1 times

15.1 times

16.3 times

14.1 times

13.7 times

16.1 times

Debt Service Coverage Ratio (Note 6)

7.5 times

7.8 times

9.0 times

9.0 times

8.9 times

7.5 times

Notes 1: Amounts in U.S. dollars are included solely for the convenience of readers outside Japan. The rate of ¥83.15 = US$1.00, the foreign exchange rate on March 31, 2011,
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, 2009, 183 days for the period ended
September 30, 2009, 182 days for the period ended March 31, 2010, 183 days for the period ended September 30, 2010 and 182 days for the period ended March
31, 2011.)
4: EOP Equity Ratio = (Net Assets at end of period ÷ Total Assets at end of period) × 100
5: EOP Interest-Bearing Debt Ratio on Total Assets = (Interest-Bearing Debt at end of period ÷ Total Assets at end of period) × 100
6: Debt Service Coverage Ratio = Net Income before Interest, Taxes, Depreciation and Amortization ÷ Interest Expenses

Japan Real Estate Investment Corporation 23

Balance Sheets

As of March 31, 2011 and September 30, 2010

Thousands of yen

U.S. dollars (Note 1)

As ofMarch 31, 2011

As of
September 30, 2010

As ofMarch 31, 2011

¥ 15,734,155¥ 19,312,117$  189,226,164

108,765

138,113

1,308,064

—

2,546

—

362,232—

4,356,379

ASSETS
Current Assets:
Cash and bank deposits
Rental receivables
Refundable income taxes
Refundable consumption taxes
Other current assets
Total current assets

133,948

139,939

1,610,922

16,339,102

19,592,717

196,501,529

Property and Equipment, at Cost:Land

426,447,459

423,146,654

5,128,652,550

Buildings and structures

238,722,465

224,862,344

2,870,985,760

Machinery and equipment

3,118,364

3,016,602

37,502,877

Tools, furniture and fixtures

121,685

119,144

1,463,443

Construction in progress
Subtotal—

226,224—

668,409,975

651,370,969

8,038,604,630

Accumulated depreciation(47,192,408)(42,912,152)(567,557,523)

Total property and equipment

621,217,566

608,458,816

7,471,047,107

577,168

577,168

6,941,288

1,069,330

29,33012,860,257

Investments and Other Assets:
Investment securities
Deposits
Long-term prepaid expenses
Leasehold rights

31,97019,178384,4886,644,277

5,306,643

79,907,124

Easement

828,095

828,095

9,959,054

Deferred investment corporation bond issuance costs

140,361

162,077

1,688,046¥646,847,871¥634,974,026$7,779,288,893

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

24 Japan Real Estate Investment Corporation

Thousands of yen

U.S. dollars (Note 1)

As ofMarch 31, 2011

As of
September 30, 2010

As ofMarch 31, 2011¥    968,355¥    373,669$   11,645,882

853,497855,510

10,264,554

LIABILITIESCurrent Liabilities:
Trade accounts payable
Other payables
Short-term loans

25,000,000

29,000,000

300,661,455

Current portion of long-term loans

68,100,000

64,100,000

819,001,804

872,457

846,510

10,492,572

4,005

—

48,168—686,855—

Rent received in advance

2,979,949

2,324,448

35,838,238

Provision for loss on disaster

281,195—

3,381,783

Accrued expenses
Income taxes payable
Accrued consumption taxes

Other current liabilities
Total current liabilities

9,597

5,832

115,429

99,069,057

98,192,826

1,191,449,885

Long-Term Liabilities:
Investment corporation bonds

55,000,000

55,000,000

661,455,201

Long-term loans

124,300,000

114,350,000

1,494,888,755

Deposits received from tenants

36,130,203

34,894,592

434,518,385

Asset retirement obligations

294,294—3,539,315

Total long-term liabilities

215,724,497

204,244,592

2,594,401,657

Total Liabilities

314,793,555

302,437,419

3,785,851,542

324,353,108

324,353,108

3,900,819,098

NET ASSETS
Unitholders’ capital   Authorized: 2,000,000 units   Issued:
489,200 units as of March 31, 2011 and489,200 units as of September 30, 2010  Retained earnings

7,701,207

8,183,499

92,618,253

Total net assets

332,054,315

332,536,607

3,993,437,351

Total Liabilities and Net Assets¥646,847,871¥634,974,026$7,779,288,893

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

Japan Real Estate Investment Corporation 25

Statements of Income and Retained Earnings
For the six months ended March 31, 2011 and September 30, 2010

Thousands of yen

U.S. dollars (Note 1)

For the period
from October 1, 2010
to March 31, 2011

For the period
from April 1, 2010
to September 30, 2010

For the period
from October 1, 2010
to March 31, 2011

Operating Revenues and Expenses
Operating Revenues:
Rental revenues
Non-rental revenues
Total operating revenues¥21,972,096
163,849
22,135,946¥21,946,264
166,508
22,112,773$264,246,503
1,970,532
266,217,035

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

11,471,604
538,569
187,915
60,95074,201
12,333,241
9,802,704

11,239,716
542,435
186,420
155,086
50,057
12,173,716
9,939,057

137,962,771
6,477,082
2,259,958
733,022892,380
148,325,213
117,891,822

7,215
—
—
8
2

11,255
19,724
8,110
7,607
0

86,775——
100
35

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

1,360,723
470,934
21,716
17,714
7,938,842

1,373,981
438,677
17,742
19,7888,135,564

16,364,690
5,663,670
261,175
213,037
95,476,160

Extraordinary Losses:
Provision for loss on disaster
Income before Income Taxes

281,195
7,657,647—
8,135,564

3,381,783
92,094,378

5,850
(329)
7,652,126
49,081¥ 7,701,207

1,208
(73)
8,134,430
49,068¥ 8,183,499

70,365(3,964)92,027,977
590,276$ 92,618,253

Non-Operating Revenues and Expenses
Non-Operating Revenues:
Interest income
Dividends income
Refund of property taxes
Interest on tax refund
Other non-operating revenues

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, 2011 and September 30, 2010

Thousands of yen

Balance as of March 31, 2010
Cash dividends paid
Net income
Balance as of September 30, 2010
Cash dividends paid
Net income
Balance as of March 31, 2011

Units

Unitholders’ capital

Retained earnings

Total

489,200——
489,200——
489,200¥324,353,108——¥324,353,108——¥324,353,108¥8,875,704(8,826,635)
8,134,430¥8,183,499(8,134,417)
7,652,126¥7,701,207¥333,228,812(8,826,635)
8,134,430¥332,536,607(8,134,417)
7,652,126¥332,054,315

Units

Unitholders’ capital

Retained earnings

Total

489,200——
489,200$3,900,819,098——$3,900,819,098$98,418,510(97,828,233)
92,027,977$92,618,253$3,999,237,608(97,828,233)
92,027,977$3,993,437,351

U.S. dollars (Note 1)

Balance as of September 30, 2010
Cash dividends paid
Net income
Balance as of March 31, 2011

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

26 Japan Real Estate Investment Corporation

Statements of Cash Flows

For the six months ended March 31, 2011 and September 30, 2010

Thousands of yen

U.S. dollars (Note 1)

For the period
from October 1, 2010
to March 31, 2011

For the period
from April 1, 2010
to September 30, 2010

For the period
from October 1, 2010
to March 31, 2011

Income before income taxes¥ 7,657,647¥ 8,135,564$ 92,094,378

Depreciation and amortization

4,286,516

4,218,759

51,551,614

21,716

17,742

261,175

Dividend income—(19,724)—

Interest income(7,215)(11,255)(86,775)

Interest expense

Cash Flows from Operating Activities:

Amortization of investment corporation bond issuance costs

1,831,658

1,812,658

22,028,359

Provision for loss on disaster

281,195—

3,381,783

Rental receivables

29,348

16,104352,956

Refundable income taxes

2,546

1,243

30,630(362,232)

819,013(4,356,379)

Refundable consumption taxes
Prepaid expenses(20,134)

44,105(242,147)

Trade accounts payable

186,316(230,525)

2,240,724

Other payables(88,081)

100,887(1,059,310)

Accrued expenses(686,992)

686,992(8,262,083)

Rent received in advance

655,500(69,316)

7,883,355

Long-term prepaid expenses(12,792)

4,591(153,843)

Other

28,206(10,730)

339,223

13,803,204

15,516,112

166,003,659  Sub-total
Interest and dividend income received
Interest paid
Income taxes paid
Net cash provided by operating activities

9,229

28,637110,996(1,805,573)(1,783,087)(21,714,657)(1,845)(1,208)(22,197)

12,005,014

13,760,454

144,377,801

Cash Flows from Investing Activities:
Payments of time deposits(10,936,000)(13,388,000)(131,521,347)

Proceeds from time deposits

15,436,000

4,388,000

185,640,409

Purchases of property and equipment(16,256,769)(2,584,262)(195,511,360)

Purchases of intangible assets(1,335,897)(13,658)(16,066,115)

Payments for lease and guarantee deposits(1,040,000)—(12,507,517)

Repayments of lease and guarantee deposits received(1,087,293)(2,282,590)(13,076,288)

Proceeds from lease and guarantee deposits received

2,322,904

659,215

27,936,312(12,897,056)(13,221,295)(155,105,906)

Net cash used in investing activities
Cash Flows from Financing Activities:
Proceeds from short-term loans

19,500,000

5,500,000

234,515,935

Repayments of short-term loans(23,500,000)(15,500,000)(282,621,768)

Proceeds from long-term loans

17,000,000

6,000,000

204,449,790

Repayments of long-term loans(3,050,000)(6,050,000)(36,680,698)—

Proceeds from issuance of investment corporation bonds—

20,000,000

Redemption of investment corporation bonds—(10,000,000)

—

(159)

(109,085)(1,924)(8,135,759)(8,821,561)(97,844,376)

1,814,080(8,980,647)

21,816,959

922,038(8,441,487)

11,088,854

Cash and Cash Equivalents at Beginning of Period

10,312,117

18,753,604

124,018,249

Cash and Cash Equivalents at End of Period¥11,234,155¥10,312,117$135,107,102

Payments of investment corporation bond issuance costs
Dividends to unitholders
Net cash provided by (used in) 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 27

Notes to Financial Statements
March 31, 2011 and September 30, 2010

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 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($6,093), generating gross proceeds of ¥81,060 million ($974,865 thousand) (Note 1). Since then, up until March 31, 2011, the Company
had issued 489,200 units as a total resulting in total unitholders’ capital of ¥324,353 million ($3,900,819 thousand) (Note).
As of March 31, 2011, the Company owned a portfolio of 57 office properties concerning an aggregate of approximately 589,002 square
meters of leasable space.
Note: The foreign exchange rate of ¥83.15=US$1.00, as of March 31, 2011, 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 ¥83.15=US$1.00, the foreignexchange rate on March 31, 2011, 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.............................................................................................................. 5–50 years
Machinery and equipment.................................................................................... 3–18 years
Tools, furniture and fixtures.................................................................................. 3–15 years

28 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.
Provision for loss on disaster
During this period, the Company posted “Provision for loss on disaster” incurred as a result of the Great East Japan Earthquake, which occurred on
March 11, 2011. That includes the reasonably estimated sum to restore the damaged properties (interiors, etc.) to their original state.
Deferred charges
Deferred charges include investment corporation bond issuance costs and new unit issuance costs.
Investment corporation bond issuance costs are amortized using the straight-line method over the amortization periods.
Revenue recognition
Revenues from leasing of office space are recognized as rent accrued over the lease period.
Taxes on property and equipment
Property and equipment is subject to property taxes and city planning taxes on a calendar year basis. These taxes are generally charged 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.

Japan Real Estate Investment Corporation 29

3. FINANCIAL INSTRUMENTS
For the six months ended March 31, 2011 and September 30, 2010
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
which may restrict the financial flexibility of the Company. To achieve these goals, the Company intends to further develop and reinforce 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 corporate bonds are applied mainly to acquire real estate properties and repayment of outstanding loans and bonds. While floating-rate short-term loans are exposed to the risk of interest-rate hike,such risk is mitigated by the Company’s low LTV and relatively high percentage of long-term fixed-rate debts within the total borrowing. Loans and investment corporate bonds involve liquidity risk at the time of maturity. To manage such liquidity risk, the Company
implements the measures such as (i) maintaining and strengthening its ability to access equity markets to secure funds, (ii) maintaining acommitment lines with major financial institutions (There is no outstanding under the facility as of March 31, 2011 and as of
September 30, 2010), 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, 2011 and asof September 30, 2010 are as follows.
The financial instruments whose fair values have extreme difficulty estimating are excluded from the following schedule (Note 2).
Thousands of yen

U.S. dollars
As of March 31, 2011

(1) Cash and bank deposits

Book value

Fair value

DifferenceBook value

Fair value

Difference¥ 15,734,155¥ 15,734,155¥      —$  189,226,164$  189,226,164$       —

(2) Short-term loans

25,000,000

25,000,000—

300,661,455

300,661,455—(3) Current portion of long-term loans

68,100,000

68,241,360

141,360

819,001,804

820,701,874

1,700,070(4) Investment corporation bonds

55,000,000

55,387,950

387,950

661,455,201

666,120,866

4,665,664(5) Long-term loans

124,300,000

125,886,120

1,586,120

1,494,888,755

1,513,964,171

19,075,416

30 Japan Real Estate Investment Corporation

Thousands of yen
September 30, 2010

(1) Cash and bank deposits

Book value

Fair value

Difference¥ 19,312,117¥ 19,312,117¥      —

(2) Short-term loans

29,000,000

29,000,000—(3) Current portion of long-term loans

64,100,000

64,483,149

383,149(4) Investment corporation bonds

55,000,000

56,122,950

1,122,950(5) Long-term loans

114,350,000

115,794,652

1,444,652

Note 1: 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
used as their fair values.
(3) Current portion of long-term loans and (5) long-term loans		The fair values of these liabilities 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 existing loans for the remaining period to maturity under the prevailing market conditions at March 31, 2011
and September 30, 2010.
(4) Investment corporation bonds		Their fair values are based on the values published by a financial data provider.
Note 2: Financial instruments whose faire values cannot be reliably measured.
Thousands of yen

U.S. dollars

As of March 31, 2011

As of September 30, 2010

As of March 31, 2011

(1) Non-listed stock (*1)¥   577,168¥   577,168$  6,941,288(2) Deposits received from tenants (*2)

36,130,203

34,894,592

434,518,385(*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.
Note 3: Redemption schedule for monetary claim after the closing dateThousands of yen

U.S. dollars
As of March 31, 2011

Cash andbank deposits

1 yearor less

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¥15,734,155

¥—

¥—

¥—

¥—

¥—

$189,226,164

$—

$—

$—

$—

$—

Thousands of yen
As of September 30, 2010

Cash andbank deposits

1 yearor less

1 to
2 years

2 to
3 years

3 to
4 years

4 to
5 yearsOver
5 years¥19,312,117

¥—

¥—

¥—

¥—

¥—

Japan Real Estate Investment Corporation 31

Note 4: Repayment schedule for investment corporation bonds, long-term loans and other interest-bearing debt after the closing dateThousands of yen
As of March 31, 2011

Short-term loans

1 year or less

1 to 2 years

2 to 3 years

3 to 4 years

4 to 5 years

Over 5 years¥25,000,000¥       —

¥       —

¥       —

¥       —

¥       —

—10,000,000—

15,000,000

20,000,000

10,000,000

Long-term loans

68,100,000

50,100,000

34,100,000

2,100,000

14,600,000

23,400,000

Total¥93,100,000¥60,100,000¥34,100,000¥17,100,000¥34,600,000¥33,400,000

Investment corporation bonds

U.S. dollars
As of March 31, 2011

Short-term loans

1 year or less

1 to 2 years

2 to 3 years

3 to 4 years

4 to 5 years

Over 5 years$  300,661,455$        —$        —$        —$        —$        —120,264,582—

120,264,582—

180,396,873

240,529,164

819,001,804

602,525,556

410,102,225

25,255,562

175,586,290

281,419,122$1,119,663,259$722,790,138$410,102,225$205,652,435$416,115,454$401,683,704

Investment corporation bonds
Long-term loans
Total

Thousands of yen
As of September 30, 2010
1 year or less

1 to 2 years

2 to 3 years

3 to 4 years

4 to 5 years

Over 5 years¥29,000,000¥       —

¥       —

¥       —

¥       —

¥       —

—10,000,000—

15,000,000

20,000,000

10,000,000

Long-term loans

64,100,000

8,100,000

69,100,000

13,100,000

16,600,000

7,450,000

Total¥93,100,000¥18,100,000¥69,100,000¥28,100,000¥36,600,000¥17,450,000

Short-term loans
Investment corporation bonds

4. PROPERTY AND EQUIPMENT
Property and equipment at March 31, 2011 and September 30, 2010 consisted of the following:Thousands of yen
As of March 31, 2011

U.S. dollars
As of March 31, 2011

As of September 30, 2010

Acquisition Costs

Book Value

Acquisition Costs

Book Value

Acquisition Costs

Book ValueLand¥319,465,931¥319,465,931¥319,465,931¥319,465,931$3,842,043,668$3,842,043,668

Buildings and structures

189,818,577

Accumulated depreciation
Machinery and equipment(37,122,350)

2,282,845,189

177,237,753
152,696,226

2,305,014(33,750,967)

143,486,785

1,836,394,790

Accumulated depreciation(1,059,108)

Tools, furniture and fixtures

110,338

Accumulated depreciation(67,776)

42,562(61,727)

48,145(815,110)——226,224

226,224——

Land in trust

106,981,528

106,981,528

103,680,723

103,680,723

1,286,608,881

1,286,608,881

Buildings and structures in trust

48,903,888

Accumulated depreciation(8,435,299)

39,989,571(101,446,774)

Machinery and equipment in trust

813,349

Accumulated depreciation(503,157)

Construction in progress

Tools, furniture and fixtures in trust
Accumulated depreciation
Total

1,245,905(446,450,398)
27,721,158

2,209,482(985,802)

1,223,679(7,635,019)

310,192(474,204)

511,872

486,693,797

9,781,719

807,120

11,346

14,983,833

588,140,572

47,624,591
40,468,589(12,737,325)
1,326,982

109,873

332,915(6,051,202)

3,730,517

136,462

9,271(4,715)

6,630(4,431)

4,839(56,714)

79,747¥621,217,566¥621,217,566¥608,458,816¥608,458,816$7,471,047,107$7,471,047,107

The compressed amount of tangible assets with government grants under the Corporation Tax Law of Japan was ¥50 million ($602 thousand) at March 31, 2011 and ¥50 million ($602 thousand) at September 30, 2010.

32 Japan Real Estate Investment Corporation

5. SHORT-TERM LOANS
Short-term loans at March 31, 2011 and September 30, 2010 consisted of the following
Thousands of yen

U.S. dollars

As of March 31, 2011

As of September 30, 2010

As of March 31, 2011¥       —

¥ 5,000,000$        —0.48139% unsecured loan from a trust bank, due on January 17, 2011—

3,000,000—

0.48138% unsecured loan from a trust bank, due on March 24, 2011—

500,000—

0.38% unsecured loan from a trust bank, due on December 21, 2011

5,000,000—

60,132,291

0.38% unsecured loan from a trust bank, due on November 1, 2011

1,500,000—

18,039,687

0.38% unsecured loan from a trust bank, due on September 26, 2011

500,000—

6,013,229

0.48247% unsecured loan from a bank, due on December 21, 2010—

5,000,000—

0.48138% unsecured loan from a bank, due on March 24, 2011—

2,000,000—

0.48138% unsecured loan from a bank, due on March 24, 2011—

2,000,000—

0.48170% unsecured loan from a bank, due on June 1, 2011

2,000,000

2,000,000

24,052,916

0.38% unsecured loan from a bank, due on August 1, 2011

1,500,000—

18,039,687

0.38% unsecured loan from a bank, due on March 26, 2012

4,000,000—

48,105,833—

1,000,000—

1,000,000—

12,026,458

0.48247% unsecured loan from a trust bank, due on December 21, 2010

0.48138% unsecured loan from a bank, due on March 24, 2011
0.38% unsecured loan from a bank, due on March 26, 2012—

1,000,000—

1,000,000—

12,026,458

0.48138% unsecured loan from a bank, due on March 24, 2011
0.38% unsecured loan from a bank, due on March 26, 2012—

2,000,000—

2,000,000—

24,052,916

0.64966% unsecured loan from a bank, due on March 24, 2011
0.38% unsecured loan from a bank, due on March 26, 2012—

2,000,000—

0.48170% unsecured loan from a bank, due on September 1, 2011

2,000,000

2,000,000

24,052,916

0.38% unsecured loan from a bank, due on August 1, 2011

1,500,000—

18,039,687

0.48170% unsecured loan from a trust bank, due on September 1, 2011

1,500,000

1,500,000

18,039,687

0.38% unsecured loan from a trust bank, due on August 1, 2011

1,500,000—

18,039,687¥25,000,000¥29,000,000$300,661,455

0.48138% unsecured loan from a bank, due on March 24, 2011

Total

The Company has commitment lines of ¥25,000 million ($300,661 thousand) with four financial institutions to reduce a refinancing risk.
The unused amount of such commitment lines was ¥25,000 million ($300,661 thousand) at March 31, 2011.

6. INVESTMENT CORPORATION BONDS
Details of total investment corporation bonds outstanding are summarized as follows:
As of March 31, 2011

As of March 31, 2011

As of September 30, 2010

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%$120,264,582

Unsecured bond due on June 18, 2012

10,000,000

1.67%

10,000,000

1.67%

120,264,582

Unsecured bond due on June 18, 2014

15,000,000

1.91%

15,000,000

1.91%

180,396,873

Unsecured bond due on April 23, 2015

10,000,000

1.26%

10,000,000

1.26%

120,264,582

Unsecured bond due on July 23, 2015

10,000,000

1.05%

10,000,000

1.05%

120,264,582

Total¥55,000,000—¥55,000,000—$661,455,201

Japan Real Estate Investment Corporation 33

7. LONG-TERM LOANS INCLUDING CURRENT PORTION OF LONG-TERM LOANS
Long-term loans at March 31, 2011 and September 30, 2010 consisted of the following:Thousands of yen

U.S. dollars

As of March 31, 2011

As of September 30, 2010

As of March 31, 2011

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

¥  2,000,000$          —1.50125% unsecured loan from an insurance company, due on August 31, 2011

5,000,000

5,000,000

60,132,291

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

5,000,000

5,000,000

60,132,291

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

10,000,000

10,000,000

120,264,582

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

22,000,000

22,000,000

264,582,081

1.65925% unsecured loan from banks, trust banks and an insurance company,
due on June 23, 2011

24,000,000

24,000,000

288,634,997

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

1,000,000—

0.8925% unsecured loan from a bank, due on December 15, 2011

2,000,000

2,000,000

24,052,916

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

1,900,000

1,950,000

22,850,271

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

2,000,000

2,000,000

24,052,916

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

5,000,000

5,000,000

60,132,291

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

5,000,000

5,000,000

60,132,291

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

1,500,000

1,500,000

18,039,687

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

1,000,000

1,000,000

12,026,458

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

2,000,000—

24,052,916

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

1,000,000

1,000,000

12,026,458

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

2,000,000

2,000,000

24,052,916

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

5,000,000

5,000,000

60,132,291

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

3,000,000

3,000,000

36,079,375

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

5,000,000

5,000,000

60,132,291

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

3,000,000

3,000,000

36,079,375

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

5,000,000

5,000,000

60,132,291

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

2,000,000

2,000,000

24,052,916

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

5,000,000—

60,132,291

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

5,000,000

5,000,000

60,132,291

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

5,000,000

5,000,000

60,132,291

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

11,000,000

11,000,000

132,291,040

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

2,000,000

2,000,000

24,052,916

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

2,000,000—

24,052,916

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

5,000,000

5,000,000

60,132,291

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

2,000,000

2,000,000

24,052,916

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

3,000,000—

36,079,375

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

2,000,000

2,000,000

24,052,916

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

2,000,000

2,000,000

24,052,916

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

1,000,000

1,000,000

12,026,458

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

5,000,000

5,000,000

60,132,291

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

5,000,000

5,000,000

60,132,291

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

2,000,000

2,000,000

24,052,916

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

1,000,000

1,000,000

12,026,458

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

1,000,000

1,000,000

12,026,458

0.73625% unsecured loan from a bank, due on December 20, 2012

1,000,000—

12,026,458

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

1,000,000

1,000,000

12,026,458

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

2,000,000

2,000,000

24,052,916

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

3,000,000

3,000,000

36,079,375

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

2,000,000

2,000,000

24,052,916

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

3,000,000

3,000,000

36,079,375

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

3,000,000

3,000,000

36,079,375

34 Japan Real Estate Investment Corporation

Thousands of yen
As of March 31, 2011

U.S. dollars

As of September 30, 2010

As of March 31, 2011

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

2,000,000

2,000,000

24,052,916

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

2,000,000—

24,052,916

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

2,000,000—

24,052,916

192,400,000

178,450,000

2,313,890,559

Subtotal
Less: current portion of long-term loans
Total

68,100,000

64,100,000

819,001,804¥124,300,000¥114,350,000$1,494,888,755(*) 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 ($601 thousand), as required pursuant to the Investment Trust Law.

9. INCOME TAXESAt March 31, 2011 and September 30, 2010, the Company’s deferred tax assets consisted mainly of the amortization of a term leaseholdinterest, the adjustment of the asset retirement obligations required over the period and the enterprise tax, which are not deductible for tax
purposes. The reconciliation of tax rate difference between the adjusted statutory tax rate and the effective tax rate for the six months ended
March 31, 2011 and September 30, 2010 were as follows:
For the period from October 1, 2010
to March 31, 2011

For the period from April 1, 2010
to September 30, 2010

Statutory tax rate

39.33%

39.33%

Deductible dividend distribution(39.30%)(39.32%)

Change in valuation allowance

0.03%

—

Others

0.01%

0.01%

Effective tax rate

0.07%

0.01%

The Company is subject to Japanese corporate income taxes on all of its taxable income. However, under the Special Taxation
Measures Law of Japan, or the STML, an investment corporation is allowed to deduct dividends of accounting profits, or dividend distributions, paid to investors from its taxable income if certain tax requirements are satisfied. Such tax requirements include dividend distributions in excess of 90% of its earnings available for dividend for the fiscal period as stipulated by Article 67-15 of the STML. Based on the
distribution policy provided by Article 32-2 of the Articles of Incorporation, the Company made a dividend distribution in the amount of¥7,652 million ($92,027 thousand) subsequent to March 31, 2011 and treated it as tax deductible. The amount represents the multiple ofnumber of units up to 100% of retained earnings net of the retained earnings at the beginning of this period. The Company will not distribute the dividends in excess of retained earnings under Article 32-3 of the Articles of Incorporation.

10. RELATED PARTY TRANSACTIONS
For the six months ended March 31, 2011 and September 30, 2010
For the period from October 1, 2010 to March 31, 2011
(1) Parent Company and Major Corporation Unitholders“Not applicable”(2) Subsidiaries“Not applicable”(3) Sister Companies“Not applicable”(4) Directors and Major Individual Unitholders“Not applicable”

Japan Real Estate Investment Corporation 35

For the period from April 1, 2010 to September 30, 2010
(1) Parent Company and Major Corporation Unitholders“Not applicable”(2) Subsidiaries“Not applicable”(3) Sister Companies“Not applicable”(4) Directors and Major Individual Unitholders“Not applicable”

11. SEGMENT INFORMATION
For the six months ended March 31, 2011 and September 30, 2010
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 of revenues
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, 2011 and September 30, 2010
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 the estimated 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.

36 Japan Real Estate Investment Corporation

Change in the amount of the asset retirement obligations as of March 31, 2011 and September 30, 2010 consisted of following
Thousands of yen

U.S. dollars

For the period from October 1, 2010
to March 31, 2011

For the period from April 1, 2010
to September 30, 2010

For the period from October 1, 2010
to March 31, 2011

Balance at the beginning of the period¥     —¥—

$      —

Increase in the tangible fixed assets

293,309—3,527,470

984—

11,845¥294,294¥—$3,539,315

Adjustment required over the period
Balance at the end of the period

13. INVESTMENT AND RENTAL PROPERTY
For the six months ended March 31, 2011 and September 30, 2010
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, 2011 and as of September 30, 2010 and the fair value as of March 31, 2011 are
as follows:

Thousands of yen
Book value

Fair value

As of September 30, 2010

Change during period(*1)

As of March 31, 2011

As of March 31, 2011

¥614,593,555¥14,096,384¥628,689,939¥642,220,000

U.S. dollars
Book value

Fair value

As of September 30, 2010

Change during period(*1)

As of March 31, 2011

As of March 31, 2011

$7,391,383,706$169,529,579$7,560,913,285$7,723,631,990

Thousands of yen
Book value

Fair value

As of March 31, 2010

Change during period(*2)

As of September 30, 2010

As of September 30, 2010

¥616,718,194¥(2,124,639)¥614,593,555¥632,112,000

Note 1: Book value on balance sheet means the acquisition cost less accumulated depreciation.
Note 2: Significant changes(*1) For the period ended March 31, 2011, the major reason of increase is acquisition of Osaki Front Tower (¥12,685,891 thousand or $152,566 thousand) and Kyodo
Building (Kayabacho 2Chome) (¥4,436,622 thousand or $53,357 thousand). The major reason of decrease is the depreciation.
(*2) For the period ended September 30, 2010, the major reason of increase is acquisition of the extension to Ryoshin Ginza East Mirror Building (¥752,185 thousand).
The major reason of decrease is the depreciation.
Note 3: 	Fair values as of March 31, 2011 and as of September 30, 2010 are defined as the appraised values provided by external qualified professional appraiser.
Regarding Takanawadai Building, the amount of the sales price as of April 1, 2011 is composed as substitute for fair value.

14. PER UNIT INFORMATION
The following table summarizes information about net assets per unit and net income per unit at March 31, 2011 and September 30, 2010
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, 2010
to March 31, 2011

For the period from April 1, 2010
to September 30, 2010

For the period from October 1, 2010
to March 31, 2011

¥678,770¥679,755$8,163

15,642

16,628188

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.

Japan Real Estate Investment Corporation 37

15. BREAKDOWN OF PROPERTY-RELATED REVENUES AND EXPENSES
For the six months ended March 31, 2011 and September 30, 2010
Thousands of yen

U.S. dollars

For the period from October 1, 2010
to March 31, 2011

For the period from April 1, 2010
to September 30, 2010

For the period from October 1, 2010
to March 31, 2011

$266,217,035

Property-Related Revenues¥22,135,946¥22,112,773 Rental Revenues

21,972,096

21,946,264

264,246,503  Rental revenues

16,668,011

16,675,451

200,457,148   Common service charges

3,303,526

3,313,297

39,729,718

562,495

565,990

6,764,824

1,438,063

1,391,525

17,294,814  Parking revenues   Other rental revenues
Non-Rental Revenues

163,849

166,508

1,970,532  Cancellation charges

122,261

39,575

1,470,377   Other miscellaneous revenues

41,587

126,932

500,155$137,962,771¥11,471,604¥11,239,716   Property management expenses

Property-Related Expenses

2,626,467

2,551,011

31,587,100  Utilities expenses

1,664,458

1,736,977

20,017,540   Property and other taxes

22,590,465

1,878,397

1,844,277  Casualty insurance

48,05249,601

577,907  Repairing expenses

833,405

790,390

10,022,914

4,286,516

4,218,759

51,551,614

134,306

48,6991,615,231¥10,664,342¥10,873,056$128,254,264  Depreciation   Other rental expenses
Property-Related Profits

16. SUPPLEMENTAL CASH FLOW INFORMATIONCash and cash equivalents
The following table represents a reconciliation of cash and cash equivalents at March 31, 2011 and September 30, 2010:
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, 2011

As of September 30, 2010

As of March 31, 2011

¥11,670,451¥15,383,805$140,354,196

4,063,704

3,928,312

48,871,969(4,500,000)(9,000,000)(54,119,062)¥11,234,155¥10,312,117$135,107,102

Significant non-cash transactions
During the six months ended March 31, 2011, the Company recognized the asset retirement obligations in an amount of ¥293,309 thousand ($3,527,470) with the equal amount of corresponding capital asset, under the term leasehold for business use agreement, which obligates the Company to restore the leased land to its original state at the expiry of the agreement, in connection with the acquisition of Osaki
Front Tower on February 1, 2011.

38 Japan Real Estate Investment Corporation

17. LEASESThe Company owns office buildings under leases and earns rent income. As of March 31, 2011 and September 30, 2010, the future lease
revenues under the non-cancelable operating leases are as follows:
Thousands of yen

U.S. dollars

As of March 31, 2011

As of September 30, 2010

As of March 31, 2011

$209,201,502

Due within one year

¥17,395,104¥16,699,184

Due after one year

31,115,669

29,581,496

374,211,295

Total¥48,510,774¥46,280,681$583,412,797

18. SUBSEQUENT EVENTSFor the six months ended March 31, 2011
Sale of a property
The Company completed the following sale of Takanawadai Building on April 1, 2011.
Summary of the sale
1. Asset sold:Takanawadai Building
2. Sales price:¥3,160,000 thousand ($38,004 thousand)3. Contract date:February 15, 2011
4. Delivery date:
April 1, 2011
5. Buyer:
Nomura Real Estate Development Co.,Ltd.
6. The gain on the sale: 	The gain on the sale in the amount of approximately ¥540 million ($6,494 thousand) was posted in the 20th
Period (period from April 1, 2011 to September 30, 2011).

Japan Real Estate Investment Corporation 39

40 Japan Real Estate Investment Corporation

Corporate Data
As of March 31, 2011

Executives
Executive Director:
Supervisory Directors:

Transfer Agent
Noritada Terasawa

The Sumitomo Trust & Banking Co., Ltd.

Kenji Kusakabe

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

Tomohiro Okanoya

Auditors
Paid-in Capital

Ernst & Young ShinNihon LLC¥324,353,108,000

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

Number of Units Outstanding

Incorporation

489,200

May 11, 2001

Number of Unitholders

Executive Office

13,802

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

Stock Listing
Tokyo Stock Exchange

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

Securities CodePlanning Department8952

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

Type of Investment Corporation

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

Closed-end corporate type fundThis semiannual report includes translations of documents originally filed under the Financial Instruments and Exchange Law of Japan. This report
was prepared in English solely for the convenience of readers outside Japan and should not be considered as a disclosure statement. The original
Japanese documents shall take precedence in the event of any discrepancies arising from the translations or interpretations contained in this report.
Estimates for the Company’s future operating results contained in this semiannual report are forward-looking statements and are based on
information currently available to the Company and its asset management company and are subject to risks and uncertainties. Consequently, 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 41

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

J-REIT

10 th
ANNIVERSARY