JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

FINANCIAL RESULTS FOR THE FISCAL PERIOD ENDED SEPTEMBER 2015
(REIT)
November 16, 2015
Japan Real Estate Investment Corporation
Tokyo Stock Exchange8952
http://www.j-re.co.jp/english
Hiroshi Nakajima, Executive Director
Japan Real Estate Asset Management Co., Ltd.
Hiroshi Katayama, CEO & President
Ryuta Yoshida, Executive Officer, General Manager, Planning Department/ TEL +81-3-3211-7951
Scheduled Date of Filling Securities Report: December 24, 2015
Scheduled date of dividend payment:
December 11, 2015
Supplementary materials for financial results: Yes
Holding of a briefing on financial results:
Yes (primarily for institutional investors and analysts)

Name of Issuer:
Stock Exchange Listing:
Securities Code:
URL:
Representative:
Asset Management Company:
Representative:
Contact:(Amounts are rounded down to the nearest million yen)

1. Financial Results for the September 2015 period (April 1, 2015 – September 30, 2015)(Percentages represent increases/decreases compared with results for the previous fiscal period)(1) Operating Results

Operating Revenues
Period ended

September 30, 2015
March 31, 2015

Millions of yen

Operating Income%

29,98028,314

Millions of yen

5.9
2.0

12,054
11,243

Profit per Unit
Period ended

September 30, 2015
March 31, 2015

Ordinary Income

Profit%Millions of yen%

Millions of yen

%

7.2
(0.1)

10,487
9,625

9.0
0.4

10,476
9,619

8.9
0.5

ROE

ROA

(Profit to Unitholders’Equity Ratio)(Ordinary Income toTotal Assets Ratio)

Ordinary Income toOperating Revenues Ratio

Yen

%

%

%

8,015
7,686

2.2
2.2

1.2
1.2

35.0
34.0

Note: As the company issued new investment units, the ROE for the September 2015 period is calculated by using the average of unitholders’ equity
that takes into account the number of days from the beginning of the period to one day prior to the date of new unit issuance and the number ofdays from the new unit issuance to the end of the period. The ROE for the March 2015 period is calculated by using the average of unitholders’equity for the beginning and end of the period.

(2) Dividends
Dividend per Unit
Excluding Excess of
Accounting Profits

Period ended

September 30, 2015
March 31, 2015

Total Cash Dividends Dividend in Excess
Excluding Excess of of Accounting Profits
Accounting Profits
per Unit

Total Dividends in
Excess of
Accounting Profits

Payout Ratio

Ratio of Dividends
to Net Assets

Yen

Millions of yen

Yen

Millions of yen

%

%

8,001
7,681

10,475
9,613

0
0

0
0

99.9
99.9

2.3
2.2

Note 1: The payout ratio is rounded down to the first decimal place.
Note 2: As the Company issued new investment units, the dividend payout ratio for the September 2015 period is calculated by using the following
formula: Dividend payout ratio = Total cash dividends / Profit × 100
Note 3: In the September 2015 period, the cause of differences in dividend per unit and profit per unit is the fact that as the Company issued newinvestment units, profit per unit is calculated based on the average number of units during the period. In the March 2015 period, the cause ofdifferences in dividend per unit and profit per unit is revisions to tax effects that accompanied changes in the corporate tax rate.

(3) Financial Standing
Total Assets
As of

September 30, 2015
March 31, 2015

Net Assets

Equity Ratio

Net Assets per Unit

Millions of yen

Millions of yen%

Yen

899,938
852,679

468,767
436,67152.1
51.2

358,026
348,909

Reference: Total unitholders’ equity is 468,767 million yen for the September 2015 period and 436,671 million yen for the March 2015 period.

1

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(4) Cash Flows
Cash Flows fromOperating Activities
Period ended

Cash Flows from
Investing Activities

Cash Flows from
Financing Activities

Cash and Cash Equivalents
at End of Period

Millions of yen

Millions of yen

Millions of yen

Millions of yen

16,975
13,741(49,829)(41,960)

34,01427,87821,40920,248September 30, 2015
March 31, 2015

2. Performance Forecasts for the March 2016 period (October 1, 2015 to March 31, 2016)
and the September 2016 period (April 1, 2016 to September 30, 2016)(Percentages represent projected increases/decreases compared with the results for the preceding fiscal period)
Operating Revenues
Millions of yen
Period ending
March 31, 2016
30,380
September 30, 2016
30,870Operating Income

Ordinary Income

Dividend per Unit Dividend in Excess of
Excluding Excess of Accounting Profits per
Accounting Profits
Unit

Profit% Millions of yen% Millions of yen% Millions of yen

%

Yen

Yen

1.3
1.6

0.8
1.3

1.0
1.6

1.0
1.5

8,080
8,210

0
0

12,15012,31010,59010,760

10,58010,740

Reference:Profit per unit forecast = Profit forecast / Number of total investment units forecast for the end of the period(the March 2016 period ): 8,080 yen; (the September 2016 period): 8,210 yen.

*Other(1) Changes in Accounting Policy/Changes in Accounting Estimates/Restatements
Changes in accounting policy following revisions to accounting standards, etc.:
Other changes in accounting policy:
Changes in accounting estimates:
Restatements:

None
None
None
None

(2) Number of Units Outstanding
Number of Units Outstanding at End of Period (Including Treasury Units)
As of September 30, 2015
1,309,310 units
As of March 31, 2015
1,251,530 units
Number of Treasury Units at End of Period
As of September 30, 2015
0 units
As of March 31, 2015
0 units
Note: Please refer to the notes regarding per unit information on page 23 for the number of investment units on which the calculations ofprofit per unit are based.

* The Implementation Status of Statutory Audit
At the time of disclosure of these financial results, the audit procedures for the financial statements pursuant to the Financial
Instruments and Exchange Act have not yet finished.

* Explanation regarding the appropriate use of business operations forecasts, and other special remarks
1. Estimates for the Company’s future operating results contained in the financial results are forward-looking statements and are basedon information currently available to the Company and certain assumptions deemed reasonable. Actual results may differ
substantially from the projections depending on a number of factors. In addition, these forecasts do not guarantee the stateddividends. As for assumptions underlying performance forecasts, please refer to the table entitled “Assumptions Underlying
Performance Forecasts for the March 2016 period (October 1, 2015 to March 31, 2016) and the September 2016 period (April 1,2016 to September 30, 2016)” on pages 7 and 8.

2

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

1. Related Corporations
Due to the fact that there have been no important changes to the “Structure and Formation” section in the most recent securities report(released June 25, 2015), information concerning it has been omitted.

2. Business Policy and Operations
a. Business Policy
Due to the fact that there have been no important changes to investment policies, investment targets, or dividend polices, in themost recent securities report (released June 25, 2015), information concerning them has been omitted.
b. Business Operations(1)Results for Period
Japan Real Estate Investment Corporation (“the Company”) was established on May 11, 2001, following revisions to the Act
on Investment Trusts and Investment Corporations of Japan, or the ITA. The Company was listed on the real estate investment
trust market of the Tokyo Stock Exchange (“TSE”) on September 10, 2001. (Securities Code: 8952) Since its IPO, the size of
the Company’s assets (total acquisition price) has grown steadily, expanding from 92.8 billion yen to 927.7 billion yen*, as of
September 30, 2015. In the same period, the Company has continued to grow steadily with the number of properties in its
portfolio growing from 20 to 70 properties.
During the September 2015 period (April 1, 2015 – September 30, 2015), the Japanese economy continued on a gradualtrend toward improvement due to improved corporate earnings and a recovery in capital investment, as well as steadypersonal consumption supported by improvement in employment conditions.
In addition, in the market for leased office space, there was further improvement in the supply-demand balance,
primarily within the central Tokyo, and advertised rents continued to rise modestly, mainly for relatively new buildings
located in excellent locations. Furthermore, in other major cities, a gradual improvement in occupancy rates was seen.
In the investment market for real estate, against a backdrop of continued favorable conditions in the financing
environment and anticipation of further improvement in the market for office buildings, the desire of domestic and overseas
investors to acquire properties has been strong and, as a result, competition to acquire properties is becoming increasingly
more severe.
Under such market conditions, the Company made sound investments under the Investment Guideline of providing
stable dividends to unitholders, which was set forth at the time of the Company’s listing on the TSE and remains unchanged tothis date. Accordingly, the Company was able to set its dividend at the 8,000 yen level for the first time in three and a halfyears (seven periods) for the current period under review.
*Note: The part of the Jingumae Media Square Building site (acquisition price: 614 million yen) that was expropriated by the
Tokyo Metropolitan Government on October 30, 2009, is included in the total acquisition price. The total acquisition price inthe subsequent sections follows the same convention.
(2) Results of Operations① Property Management and Acquisition
In the market for leased office space in the period under review, as a result of our efforts to maintain and improve
occupancy rates through meticulous property leasing, the Company’s occupancy rate was 97.7% as of September 30,
2015, remaining at nearly the same level as the 97.8% occupancy rate as of March 31, 2015.
As for external growth, the Company acquired the Umeda Square Building (Osaka City, Osaka Prefecture), locatedin the Umeda area—the center of Osaka’s business district—for 15,523 million yen on April 1, 2015. In addition, theCompany also acquired an additional 5.0% quasi-co-ownership interest of trust beneficiary right in trust of real estate
pertaining to the Shiodome Building (Minato-ku, Tokyo) for 10,100 million yen on May 1, 2015, in an effort to acquire
additional interest in existing portfolio properties. Accordingly, the Company’s quasi-co-ownership percentage of the
Shiodome Building rose from 40.0% to 45.0%. Furthermore, on September 1, 2015, the Company acquired a55.35443% share of ownership of the AER (Sendai City, Miyagi Prefecture) for 18,640 million yen,a large-scale
multi-functional building that is directly connected to the JR Sendai Station via elevated pedestrian walkways. In thisway, the Company is working to improve the quality and expand the size of its portfolio.
As a result of the above, the Company’s portfolio at the end of the fiscal period under review, September 30, 2015,
consisted of 70 properties, with a total acquisition price of 927,778 million yen. Total leasable space stood at 832,030㎡, with a total of 1,461 tenants.
*Note: The Nippon Brunswick Building (land with leasehold interest), whose building ownership was transferred on
August 23, 2013, is included in the above number of properties and total acquisition price, but is not included in total
leasable space or total number of tenants.
3

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）② Finance Activities
In addition to maintaining a LTV ratio (ratio of interest-bearing debt to total assets) of 30% to 40% under normal
business conditions, the Company strives to maintain a sound and conservative financial profile by raising its long-term
fixed interest-bearing debt ratio (ratio of long-term fixed interest-bearing debt (including the current portion of
long-term loans and investment corporation bonds) to total interest-bearing debt).
Concerning new loans related to property acquisition and the refinance of existing loans, the Company carries out
loans strategically and flexibly after giving close consideration to borrowing cost and the relationship the Company has
with the lenders. The Company also takes into consideration such factors as staggering maturities, extended durations,diversity of stable lenders, and the possibility of repayment with funds procured from issuing new investment units.
Moreover, in the event that interest rate fluctuation occurs on a long-term loan, the Company reduces future risk ofinterest rate fluctuation by making use of interest-rate swap transactions.
As for funding activities in the fiscal period under review, at the Board of Directors’ meetings held on March 18,
2015, and March 30, 2015, the Company decided to issue new investment units (54,000 units by public offering and
3,780 units by third-party allocation). As a result of this issuance, the Company procured approximately 29,189 million
yen on April 6, 2015, from the public offering portion and approximately 2,043 million yen on May 11, 2015, from thethird-party allocation portion.
The funds procured from issuing new investment units by public offering were used to repay short-term loans andredeem the 7th investment corporation bond totaling 10,000 million yen, which matured on April 23, 2015. The funds
were also allocated to the additional acquisition of co-ownership interest pertaining to the Shiodome Building
mentioned above. Funds procured from issuing new investment units by third-party allocation were also used to repay
short-term loans. Also, in regard to the 8th investment corporation bond totaling 10,000 million yen, which matured on
July 23, 2015, the Company temporarily used funds procured from short-term loans to carry out the bond’s redemption.
Afterwards, the Company made a partial repayment of these short-term loans using borrowings through generalsyndication (6,500 million yen) and cash reserves (2,000 million yen).
As a result of these financing activities, as of September 30, 2015, the Company’s total interest-bearing debt was
373,450 million yen. This amount consists of long-term loans totaling 316,750 million yen (including the current
portion of long-term loans totaling 32,100 million yen), short-term loans totaling 36,700 million yen, and investment
corporation bonds totaling 20,000 million yen (there is no current portion of investment corporation bonds).
As of September 30, 2015, the Company’s long-term fixed interest-bearing debt ratio stood at 90.2%, maintaining
a level of over 90%. In addition, the LTV ratio stood at 41.5%.
Also, on September 18, 2015, the Company increased the commitment line from 43,000 million yen to 50,000
million yen.

The Company’s credit ratings as of September 30, 2015 were as follows:
Rating Agency

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

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

Moody’s Japan K.K.

Rating: A1; Outlook: Negative

Rating and Investment Information, Inc.

Rating: AA; Outlook: Stable

4

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(3) Summary of Financial Results
As a result of the above operations, in the period under review, the Company’s operating revenues increased 5.9%
compared with the previous period, to 29,980 million yen. On the earnings front, operating income increased 7.2%, to12,054 million yen. After deducting expenses for interest payments on loans and other costs, ordinary income
increased 9.0 %, to 10,487 million yen, and profit increased 8.9%, to 10,476 million yen.
Turning to dividends, the Company will make cash distributions using accounting profits based on the dividend
policy outlined in Article 32-2 of the Company’s Articles of Incorporation, in an amount that exceeds 90% of earnings
available for dividends as required by Article 67-15 of the Special Taxation Measures Law of Japan. Based on thispolicy, the Company was able to maintain retained earnings brought forward as the amount of dividends did notexceed earnings available for distribution at the end of the period. Therefore, the total amount of dividends that theCompany has determined to pay out is 10,475,789,310 yen for the period under review, which is a multiple of
1,309,310—the number of units outstanding as of September 30, 2015. Accordingly, the per-unit cash dividend is8,001 yen.
c. Outlook(1) Operating Environment
In the Japanese economy, amid a continued trend toward improvement in corporate earnings, employment, andpersonal income, it is anticipated that the introduction of various political policies will support further economic
recovery. However, depending on such factors as monetary policy in the United States and deceleration of Chinese
economy and other emerging nations in Asia, it is still necessary to bear in mind the risk of economic downturn.
In the market for leased office space, although the pace of declining vacancy rates is expected to slow down,
thanks to steady demand for office spaces, it is anticipated that the gradual rise in rent levels will continue, especiallyfor buildings with a strong competitive edge.
Meanwhile, in the investment market for real estate, intensifying competition to acquire properties andtransactions carried out at higher valuation is likely to continue as the financing market are expected to remainfavorable.
① Property Management
Based on the conditions stated above, the Company will adhere to the following management policies in order tomaintain and improve profitability.
(i) Strengthen relationships of trust with existing tenants
The Company has contracts with numerous property management companies. Most of these companies were alreadyhandling the management of their buildings before the Company acquired them and had thus built relationships oftrust with their tenants. The Company will work to further solidify these relationships by anticipating tenants’ needs
and providing tailored services to increase tenant satisfaction, thereby maintaining and improving occupancy rates,
raising rent levels, and curtailing demands for rent reduction.
(ii) Fill vacancies promptly
In cooperation with the property management companies mentioned above, the Company will actively seek the mostappropriate tenants for each property, based on location and features, in order to fill current and anticipated vacancies
as rapidly as possible. Furthermore, the Company will work to uncover additional needs for floor space among theexisting tenants.
(iii) Stabilize revenues and earnings
With the aim of stabilizing revenues and earnings, the Company will endeavor to secure fixed and long-term leasing
agreements with its large-scale tenants.
(iv) Reduce management costs
The Company has introduced sound competitive principles for its multiple property management companies tofollow and is revamping their management systems and cost structures on an ongoing basis.

5

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）② Property Acquisitions and Sales
The Company has adopted the following policies for acquiring properties.
(i) To access information quickly, the Company continues to enhance its property information channels while working todevelop new channels.
(ii) In its acquisition activities, the Company continues to meticulously monitor and examine economic, physical, and legal
factors, including rights-related issues, when selecting properties. In particular, with regard to the structure of buildings,
the Company requires buildings to meet or exceed new earthquake-resistance standards, verifies the need forrenovations by appropriately grasping current conditions based on engineering reports, and exclusively targets
properties capable of maintaining a competitive edge in terms of the facilities they offer over the medium to long term.
(iii) In accordance with its acquisition policies, the Company shall maintain its portfolio so that 70% or more of theportfolio properties are located within the Tokyo metropolitan area, with the remaining 30% or fewer located in othermajor cities.
Under these policies, the Company will continue to acquire highly competitive properties. At the same time, in orderto further improve the quality of its portfolio, the Company will remain open to the replacement of portfolio properties
with due consideration given to timing.
③ Financial Policy(i) In principle, the Company shall maintain an LTV ratio that does not exceed 65%. To ensure an even lower
interest-bearing debt ratio, the Company adopts the conservative target level of 30% to 40%.
(ii) The Company shall set the ceiling for the combined total of loans and investment corporation bonds at 1 trillion yen.
(iii) When obtaining a loan, the Company shall only negotiate with qualified institutional investors (limited to those defined
under Article 67-15 of the Act on Special Measures Concerning Taxation ) before executing a loan agreement.
(iv) With the purpose of maintaining liquidity at an appropriate level, the Company may establish preliminary borrowing
frameworks such as overdraft agreements and commitment line agreements, or may conclude preliminary contracts forloans, as needed.
(v) The Company aims for the best possible execution of financial transactions by negotiating with numerous financial
institutions.

(2) Performance Forecasts
For the March 2016 period (October 1, 2015 to March 31, 2016), the Company forecasts operating revenues totaling
30,380 million yen, operating income totaling 12,150 million yen, ordinary income totaling 10,590 million yen, andprofit totaling 10,580 million yen. The Company plans to declare a cash dividend is 8,080 yen per unit.
For the September 2016 period (April 1, 2016 to September 30, 2016), the Company forecasts operating
revenues totaling 30,870 million yen, operating income totaling 12,310 million yen, ordinary income totaling 10,760
million yen, and profit totaling 10,740 million yen. The Company plans to declare a cash dividend is 8,210 yen perunit.
Regarding the assumptions set for these forecasts, please see pages 7 and 8 entitled “Assumptions Underlying
Performance Forecasts for the March 2016 period (October 1, 2015 to March 31, 2016) and the September 2016
period (April 1, 2016 to September 30, 2016).” Operating revenues, operating income, ordinary income, profit, andcash dividend per unit may vary depending on changes in the market situation.

6

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Assumptions Underlying Performance Forecasts for the March 2016 period (October 1, 2015 to March 31, 2016)
and the September 2016 period (April 1, 2016 to September 30, 2016)
Item
Accounting period
Number ofproperties held by
the Company
Number of units
outstanding

Assumption
・The March 2016 period: October 1, 2015 to March 31, 2016 (183 days)
・The September 2016 period: April 1, 2016 to September 30, 2016 (183 days)
・The Company assumes its property portfolio consists of 70 properties at the end of the September 2015 period.
The actual portfolio may differ from this assumption due to additional property acquisitions and dispositions.
・As of November 16, 2015, the Company does not have any forward or other commitments as set forth in the
Financial Services Agency’s Guidelines for Supervision.
・The Company assumes that the total number of units outstanding as of November 16, 2015, is 1,309,310.
・The Company assumes an LTV ratio in the 30% to 40% range as an operational guideline under normal
business conditions.
・The Company carried out a long-term loan of 2.5 billion yen on October 1, 2015, to serve as funds for
repayment of existing short-term loan. In addition, the Company made a repayment of 0.5 billion yen on due date
which fell on the same date. As a result, the balance for interest-bearing debt is 372, 950 million yen as ofNovember 16, 2015.
・In the March 2016 period, as of November 16, 2015, the Company presumes it will refinance the long-term

Interest-bearing
debtloans due for repayment during the period totaling 2.0 billion yen (repayment date: January 15, 2016) and theshort-term loans due for repayment during the period totaling 17.2 billion yen (repayment dates: January 7, 2016,
March 2, 2016, March 25, 2016, and March 31, 2016). There are no investment corporation bonds to mature in
the March 2016 period.
・In the September 2016 period, as of November 16, 2015, the Company presumes it will refinance the long-termloans due for repayment during the period totaling 30 billion yen (repayment dates: April 4, 2016, April 25, 2016,
and June 23, 2016) and the short-term loans due for repayment during the period totaling 16.5 billion yen(repayment dates: April 1, 2016, August 24, 2016, and September 1, 2016). There are no investment corporation
bonds to mature in the September 2016 period.

Operating revenues

・Revenues from portfolio properties held by the Company are calculated by taking into consideration newcontract conclusions and existing contract cancellations fixed as of November 16, 2015, and by factoring in
potential variables that reflect recent market conditions for leased office space, such as a rent levels andoccupancy rates.

7

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Item

OperatingexpensesNon-operating
expensesAssumption
・Of the taxes the Company is subject to, property taxes, city planning taxes and depreciable property taxes
corresponding to the relevant fiscal period have been recorded as property-related expenses. However, when aproperty is acquired at a point during the period used for the calculation of property tax, a property tax adjustment islevied that takes into account the date of the transfer of the new acquisition. The amount of the adjustment isfactored into the acquisition price and therefore not recorded as an expense in the relevant fiscal period. In addition,
the Company assumes the 2016 property taxes, city planning taxes, and depreciable property taxes for properties
acquired in 2015 to be the following amounts: 12 million yen for the Clover Shiba-koen, 21 million yen for Ginza
1Chome East Building, 50 million yen for the Amagasaki Front Building, 18 million yen for the additional interest
acquired for Harmony Tower, 96 million yen for the Umeda Square Building, 32 million yen for the additional
interest acquired for the Shiodome Building, and 124 million yen for the AER.
・The Company assumes that property and other taxes will be 2,760 million yen in the March 2016 period and 2,950
million yen in the September 2016 period.
・The Company assumes that depreciation will be 6,490 million yen in the March 2016 period and 6,510 million yen
in the September 2016 period.
・Property management expenses are assumed to take past operational results into consideration.
・Repair expenses may vastly differ from the projected amounts as there may be large differences in costs incurredfrom one fiscal period to another and because such costs are not recurring.
・The Company assumes that non-operating expenses, such as interest expenses on loans and investment corporation
bonds, will be 1,550 million yen in the March 2016 period and 1,560 million yen in the September 2016 period.
・The Company presumes that dividends in excess of accounting profits will not be distributed. Reflecting this, under
the Company’s Articles of Incorporation, the Company assumes that it will make cash distributions using accounting
profits, distributing said profit in an amount in excess of 90% of earnings available for dividends.
・The Company assumes that dividend amounts in the March 2016 and the September 2016 periods will not be

Dividend
amounts

Other

appropriated from internal reserves.**Internal reserves (projected for the September 2015 period) shall comprise the residual amount of 390 million yen,reflecting a dividend payout of 519 million yen for the September 2012 and the March 2013 periods subtracted
from the balance of internal reserves at the end of the March 2012 period (as of March 31, 2012), which totaled 909
million yen, comprising retained earnings brought forward of 30 million yen and the amount apportioned to internal
reserves from the gain on sale of land as a result of the sale of the Takanawadai Building as of April 1, 2011, under
the application of the Special Provisions for Taxation in the case of Advanced Acquisition of Land, etc., in 2009 and2010 (total of 878 million yen which consists of reserve for reduction entry and associated income taxes deferred).
・The Company presumes that revisions that could impact the abovementioned forecasts will not be made in suchareas as laws, tax systems, accounting standards, and listing rules as well as regulations of the Investment Trusts
Association, Japan.
・The Company assumes that there will be no unprecedented or significant changes in general market trends or realestate market conditions or other factors.
・In addition to the abovementioned income taxes deferred, the Company calculates the amount of its corporate andother taxes, taking into consideration asset retirement obligations as well as the amortization of term leaseholdinterest for buildings.

8

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

3. Financial Statements(1) Balance Sheets
Thousands of yen
As of March 31, 2015
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Deferred tax assets
Consumption taxes receivable
Other
Total current assets
Non-current assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
LandConstruction in progress
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Construction in progress in trust
Total property, plant and equipment
Intangible assets
Leasehold rights
Leasehold rights in trust
Easement
Total intangible assets

9

As of September 30, 2015

15,561,878
4,687,042
127,501
155,505
979
833,719
27,314
21,393,942

20,564,934
5,844,989
209,386
393,532953

260,036,543
ሺ70,005,181)
190,031,361
3,169,570
ሺ589,318)
2,580,252
2,929,200
ሺ1,638,100)
1,291,099
365,608
ሺ163,901)
201,706
439,594,248
1,310
71,500,994
ሺ14,792,492)
56,708,501
613,238
ሺ125,661)
487,577
963,001
ሺ604,071)
358,929
34,030
ሺ12,401)
21,629130,818,405
1,278
822,096,301

266,361,565
ሺ74,720,230)
191,641,335
3,193,164
ሺ643,744)
2,549,420
2,944,813
ሺ1,721,977)
1,222,835
376,537
ሺ187,315)
189,222452,965,989
1,310
76,541,120
ሺ16,201,956)
60,339,163
645,610
ሺ139,759)
505,851
939,320
ሺ615,178)
324,141
35,772
ሺ14,470)
21,302
151,935,120
1,278
861,696,973

6,080,662
444,160
828,095
7,352,918

6,064,832
444,160
828,095
7,337,088－

23,84827,037,645

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Thousands of yen
As of March 31, 2015
Investments and other assets
Investment securities
Lease and guarantee deposits
Long-term prepaid expenses
Other
Total investments and other assets
Total non-current assets
Deferred assets
Investment corporation bond issuance costs
Total deferred assets
Total assets
Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable
Current portion of investment corporation bonds
Current portion of long-term loans payable
Accounts payable - otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Other
Total current liabilities
Non-current liabilities
Investment corporation bonds
Long-term loans payable
Deposits received from tenants
Deferred tax liabilities
Asset retirement obligations
Other
Total non-current liabilities
Total liabilities
Net assets
Unitholders' equity
Unitholders' capital
Surplus
Voluntary retained earnings
Reserve for reduction entry
Total voluntary retained earnings
Unappropriated retained earnings
Total surplus
Total unitholders' equity
Total net assets
Total liabilities and net assets

As of September 30, 2015

577,168
1,071,830
145,061
1,794,059
831,243,279

577,168
1,573,641
814,254869,447
3,834,511
872,868,573

41,873
41,873852,679,094

32,23932,239899,938,458

1,491,516
32,500,000
20,000,000
16,600,000
1,233,343
768,834
11,1501,478,287
36,700,000－

3,346,275
60,02476,011,145
20,000,000
271,900,000
47,637,990
116,161
318,867
23,781
339,996,800
416,007,946

20,000,000
284,650,000
49,573,768
116,161
322,080
20,074354,682,084
431,171,221

426,783,117

458,016,096

236,745
236,745
9,651,286
9,888,031
436,671,148
436,671,148
852,679,094

243,360
243,360
10,507,781
10,751,141
468,767,237
468,767,237
899,938,458

－

10

－

32,100,000
1,346,666
664,500
9,466
610,379
3,478,134
101,701
76,489,136

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(2) Statements of Income
Thousands of yen
For the period
from October 1, 2014
to March 31, 2015
Operating revenues
Rent revenues
Other lease business revenues
Total operating revenues
Operating expenses
Expenses related to rent business
Asset management fee
Asset custody fee
Administrative service fees
Directors' compensations
Commission fee
Other operating expenses
Total operating expenses
Operating income
Non-operating income
Interest income
Dividend income
Reversal of distribution payable
Refund of property taxes
Income on settlement of management associationaccounts
Other
Total non-operating income
Non-operating expenses
Interest expenses
Interest expenses on investment corporation bonds
Amortization of investment corporation bondissuance costs
Investment unit issuance expenses
Other
Total non-operating expenses
Ordinary income
Income before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
ProfitRetained earnings brought forward
Unappropriated retained earnings

For the period
from April 1, 2015
to September 30, 2015

28,048,535
266,377
28,314,912

29,886,578
94,31429,980,892

15,911,920
772,029
59,387140,5137,800
106,448
73,712
17,071,812
11,243,100

16,642,681
926,559
60,569143,924
7,800
78,433
66,897
17,926,866
12,054,026

3,979

4,611
6,494
3,520

－

3,486
21,718－37,0373,281
32,466

5,448
57,111

1,332,133
270,090

1,329,408
191,891

16,398

9,633－

56,541
36,074
1,623,550
10,487,587
10,487,587
11,44925
11,475
10,476,112
31,66910,507,781

31,412
1,650,034
9,625,531
9,625,531
12,292
ሺ6,641)
5,650
9,619,880
31,4059,651,286

11－

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(3) Statements of Changes in Unitholders’ Equity
For the period from October 1, 2014 to March 31, 2015
Thousands of yen
Unitholders' equity
Surplus
Unitholders'
capitalBalance at beginning ofcurrent period
Changes of items
during period
Provision of reserve
for reduction entry

426,783,117

Voluntary retained
earnings
Reserve for
reduction
entry

Unappropriated retained
earnings

Total
voluntary
retainedearnings

Total
net assets

236,709236,7099,603,143

9,839,852

436,622,969

436,622,969

35

35

(35)

－

－

－

ሺ9,571,701)(9,571,701)(9,571,701)(9,571,701)

9,619,880

9,619,880

9,619,880

9,619,880

Dividends of surplus
ProfitTotal changes of items
during period
Balance at end ofcurrent period

Total
surplusTotal
unitholders'equity－35

35

48,143

48,17948,17948,179426,783,117

236,745

236,745

9,651,286

9,888,031

436,671,148

436,671,148

For the period from April 1, 2015 to September 30, 2015
Thousands of yen

Unitholders' equity
Surplus
Voluntary retained
earnings

Total
surplusTotal
unitholders'equityTotal
net assets

9,888,031

436,671,148

436,671,148－

31,232,979

31,232,979

ሺ6,615)－－－

Dividends of surplus(9,613,001)

ሺ9,613,001)

ሺ9,613,001)(9,613,001)

Profit10,476,112

10,476,112

10,476,112

10,476,112

Unitholders'
capitalBalance at beginning ofcurrent period
Changes of items
during period
Issuance of new
investment units
Provision of reserve
for reduction entry

Total changes of items
during period
Balance at end ofcurrent period

426,783,117

Reserve for
reduction
entry
236,745

Total
voluntary
retainedearnings
236,745

Unappropriated retained
earnings

9,651,286

31,232,979
6,615

6,615

31,232,979

6,615

6,615

856,494

863,110

32,096,089

32,096,089

458,016,096

243,360

243,360

10,507,781

10,751,141

468,767,237

468,767,237

12

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(4) Basis of Calculations Used to Determine Cash Distributions

Item

For the period
from October 1, 2014
to March 31, 2015

For the period
from April 1, 2015
to September 30, 2015

Amount (Yen)Amount (Yen)I Retained earnings

9,651,286,262

10,507,781,132

II Cash distribution

9,613,001,930

10,475,789,310(7,681)(8,001)

Provision of reserve for reduction
entry

6,615,210－

IV Retained earnings brought forward

31,669,122

31,991,822

Computation Method for Determining

The Company will make cash distributions

The Company will make cash distributions

Dividends

using accounting profits based on the cash
distribution policy outlined in Article 32-2of the Company’s Articles of Incorporation,in an amount that exceeds 90% of the“amount of distributable profit” as set forthin Article 67-15 of the Act on Special
Measures Concerning Taxation. Based on
this policy, transferring the revised amountfor deferred tax liabilities, whichaccompanied changes to the statutory tax
rate, to the reserve for reduction entry, theCompany was able to maintain retained
earnings brought forward. Therefore, thetotal amount of dividends that the Company
has determined to pay out is 9,613,001,930
yen for the period under review, which is amultiple of 1,251,530 — the number ofunits outstanding as of March 31, 2015.

using accounting profits based on the cash
distribution policy outlined in Article 32-2of the Company’s Articles of Incorporation,in an amount that exceeds 90% of the“amount of distributable profit” as set forthin Article 67-15 of the Act on Special
Measures Concerning Taxation. After
maintaining retained earnings brought
forward in an amount not exceeding
unappropriated retained earnings, the total
amount of dividends that the Company has
determined to pay out is 10,475,789,310
yen for the period under review, which is amultiple of 1,309,310 — the number ofunits outstanding as of September 30, 2015.
Furthermore, the Company does not pay out
dividends that exceed accounting profits asoutlined in Article 32-3 of the Company’s

Furthermore, the Company does not pay out
dividends that exceed accounting profits asoutlined in Article 32-3 of the Company’s
Articles of Incorporation.

Articles of Incorporation.

(Dividend per investment unit)
III Voluntary retained earnings

13

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(5) Statements of Cash Flows
Thousands of yen
For the period
from October 1, 2014
to March 31, 2015
Cash flows from operating activities
Income before income taxes
Depreciation
Amortization of investment corporation bondissuance costs
Investment unit issuance expenses
Dividend income
Interest income
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) in consumption taxes refund
receivable
Decrease (increase) in supplies
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable - other
Increase (decrease) in accrued consumption taxes
Increase (decrease) in accrued expenses
Increase (decrease) in advances received
Decrease (increase) in long-term prepaid expenses
Other, net
SubtotalInterest and dividend income received
Interest expenses paid
Income taxes paid
Net cash provided by (used in) operating activities
Cash flows from investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust
Payments for lease and guarantee deposits
Repayments of tenant leasehold and security deposits
Proceeds from tenant leasehold and security deposits
Net cash provided by (used in) investing activities
Cash flows from financing activities
Proceeds from short-term loans payable
Repayments of short-term loans payable
Proceeds from long-term loans payable
Repayments of long-term loans payable
Redemption of investment corporation bonds
Proceeds from issuance of investment units
Payments for investment unit issuance expenses
Dividends paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

For the period
from April 1, 2015
to September 30, 2015

9,625,531
6,009,647

10,487,587
6,332,545

16,398

9,633－(3,979)1,602,224
19,15656,541(6,494)
ሺ4,611)
1,521,300
ሺ81,885)

ሺ833,719)

833,719

ሺ409)
31,781
ሺ34,944)
188,917
ሺ1,323,301)
117
65,525(59,466)
6,632
15,310,110
5,619
ሺ1,567,622)
ሺ6,147)
13,741,960(238,026)
315,567
135,172
610,379367
131,859(669,193)
ሺ829,188)
18,605,274
9,716(1,626,001)
ሺ13,133)
16,975,856－

ሺ2,463,000)
7,463,000
ሺ27,617,071)
ሺ21,214,962)－(1,068,104)
2,939,845(41,960,294)
34,200,000
ሺ33,200,000)
41,500,000(5,050,000)－－－(9,571,836)
27,878,163
ሺ340,170)
20,589,091
20,248,921

14－(7,519,000)
2,519,000(19,705,392)(26,558,326)(501,810)(833,198)
2,768,976(49,829,752)
33,000,000(28,800,000)
42,800,000(14,550,000)
ሺ20,000,000)
31,232,979(56,541)
ሺ9,611,537)
34,014,899
1,161,003
20,248,921
21,409,924

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(6) Notes Concerning Going Concerns Assumption“Not applicable”(7) Summary of Significant Accounting Policies
Investment securities
Non-marketable securities classified as other securities are carried at cost. Cost of securities sold is determined by the moving averagemethod.
Property and equipment, depreciation and impairment (except for leased assets)
Property and equipment is stated at cost, less accumulated depreciation. The cost of land, buildings and building improvements includes
the purchase price of property 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...................................................................... 2-60 years
Machinery and equipment............................................ 2-18 years
Tools, furniture and fixtures......................................... 2-29 years
Expenditures for repairing expenses are charged to income as incurred. Significant renewals and betterments are capitalized.
The Company reviews fixed assets for impairment whenever events or changes in circumstances indicate that the carrying amount of
its fixed assets may not be recoverable. 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 valueof an asset exceeds the undiscounted sum of future cash flows of the asset. The standard states that impairment losses should bemeasured as the excess of the book value over the higher of (i) the fair market value of the asset, net of disposition costs, and (ii) the
present value of future cash flows arising from ongoing utilization of the asset and from disposal after asset use. The standard covers
land, factories, buildings and other forms of property, plant and equipment as well as intangible assets. Fixed assets are grouped at thelowest 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 stated at cost. Amortization of a term leasehold interestfor business use is calculated by the straight-line method based on the period of agreement.
Leased assets
Leased assets under finance lease transactions that do not transfer ownership of the leased assets to the lessees are capitalized anddepreciated by the straight-line method over the lease term with no residual value.
Deferred charges
Investment corporation bond issuance costs are amortized using the straight-line method over the redemption periods.
New unit issuance costs are charged to income as incurred. The underwriters’ economic remunerations for underwriting the offering
are not recognized as new unit issuance costs in the financial statements since such costs are not paid by the Company as commission
under the so-called “spread-method”.
Under the spread-method, the difference between the offer price (the price paid by the unitholder) and the issue price (the pricereceived by the Company) is retained by the underwriters as remuneration.
Revenue recognition
Revenues from leasing of office space are recognized as rent accrues over the lease period.
Taxes on property and equipment
Property and equipment is subject to property taxes and city planning taxes on a calendar year basis. These taxes are generally charged
to income during the period. The sellers of the properties are 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 on the record as ofJanuary 1 based on the assessment made by the local government. The Company pays the amount equivalent to the property taxes to thesellers applicable to the period since acquisition and includes the amount equivalent to the taxes in the purchase price of each property
and capitalizes it as a 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 areincluded in Current assets and the excess of amounts withheld over payments are included in 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.
Hedge accounting
The Company enters into derivative transactions to hedge against interest-rate risk and other forms of risk based on the risk
management policies outlined in the Company’s Articles of Incorporation. The Company uses interest-rate swap transactions forhedging fluctuations in interest rates on floating-rate loans. The Company has also executed interest-rate and currency swap
15

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

transactions as a method of hedging against currency exchange and interest-rate fluctuation risks. Deferred hedge accounting is
generally used for such interest-rate swaps and interest-rate and currency swap transactions, and the effectiveness of hedging ismeasured by comparing the total cash flow fluctuation of the hedged item and that of the hedging instrument since the inception of thehedge.
For interest-rate swaps that qualify for hedge accounting and meet certain criteria provided under Japanese GAAP, however, theCompany applies special accounting treatment. Under such special accounting treatment, the differentials paid or received under theswap agreements are recognized and included in interest expense of the hedged loans, and the interest-rate swaps are not required to be
separately valued. For interest-rate swaps that meet the specific criteria for such special accounting treatment, ongoing assessments ofhedge effectiveness are not required and hence not performed.
In addition, for interest-rate and currency swap transactions that meet certain criteria provided under Japanese GAAP, the Integrated
Treatment is applied. Under such Integrated Treatment, the interest-rate and currency swaps that hedge foreign currency denominatedfloating rate payments into yen-denominated fixed rate payments are treated as an integral part of the hedged foreign currency
borrowing, and the loan is accounted for as a yen-denominated fixed-rate borrowing.

16

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(8) Notes to Financial Statement(Notes to Balance Sheet)a.
Compressed amount of tangible assets with government grants
Thousands of yen
As of March 31, 2015

Buildingsb.

As of September 30, 2015

50,08650,086

Commitment line agreement
For the period from October 1, 2014 to March 31, 2015
The Company has signed commitment line agreements with five banks.
For the period from April 1, 2015 to September 30, 2015
The Company has signed commitment line agreements with four banks.
Thousands of yen
As of March 31, 2015c.

As of September 30, 2015

Total amount of commitment line agreement
Debt financing balance

43,000,000—

50,000,000—

Balance

43,000,000

50,000,000

Minimum net assets required by Article 67, Paragraph 4 of the ITA
Thousands of yen
As of March 31, 2015

As of September 30, 2015

50,00050,000(Breakdown of Property-Related Revenues and Expenses)
Thousands of yen
For the period from October 1, 2014
to March 31, 2015

For the period from April 1, 2015
to September 30, 2015

Property-Related Revenues
Rent revenues
Rental revenues
Common service charges
Parking revenues
Other rental revenues
Other lease business revenues
Cancellation charges
Other miscellaneous revenues

28,314,912
28,048,535
21,748,842
3,458,878
741,840
2,098,973
266,377
229,61736,75929,980,892
29,886,578
23,246,606
3,647,677
790,0632,202,231
94,31481,455
12,858Property-Related Expenses
Property management expenses
Utilities expenses
Property and other taxes
Casualty insurance
Repairing expenses
Depreciation
Other rental expenses
Property-Related Profits

15,911,920
3,447,650
2,694,344
2,531,043
55,609983,138
6,009,647
190,486
12,402,991

16,642,681
3,549,250
2,869,139
2,766,013
58,020881,171
6,332,545
186,539
13,338,211

17

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(Changes in Unitholders’ Equity)
Total number of investment units issuable
and number of units outstanding

As of March 31, 2015

As of September 30, 2015

Total number of investment units issuable

4,000,000 units

4,000,000 units

Number of units outstanding

1,251,530 units

1,309,310 units(Supplemental Cash flow Information)
Cash and cash equivalents
The following table represents a reconciliation of cash and cash equivalents at March 31, 2015 and September 30, 2015:
Thousands of yen
As of March 31, 2015
As of September 30, 2015

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

15,561,878
4,687,042－
20,248,921

20,564,934
5,844,989(5,000,000)
21,409,924(Financial Instruments)
For the six months ended March 31, 2015 and September 30, 2015
a. Status of financial instruments(i) 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
to retain the ability to secure stable and low-cost financing by maintaining high credit ratings and thereby limiting the financial
covenants that 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 the capital base and controlling theloan-to-value ratio (“LTV”) at an adequate level.
In order to hedge against future interest-rate fluctuations, the Company may enter into derivative transactions, which shall be
executed solely for the purpose of hedging against interest-rate fluctuation and other risks, and not for speculative purposes.
With respect to management of excess funds, as a matter of policy the Company uses time deposits as its main vehicle, while
securities and monetary claims are also eligible for such investment.
(ii) Characteristics and risk profile of each financial instrument and risk management system
The Company regularly re-evaluates the appropriateness and effectiveness of its risk management system in order to improve on it.
The characteristics and risk profile of financial instruments and the system in place to manage such risks are as follows:
The deposits, which are typically large time deposits used to manage excess funds, are exposed to the credit risk of thedeposit-taking financial institutions. The Company manages credit risk by restricting the tenor of the deposit to relatively shortperiods and setting a minimum credit rating requirement for the deposit-taking financial institutions.
The funding proceeds from borrowings and issues of investment corporation bonds are applied mainly to acquire real estate
properties and repay outstanding loans and bonds. While floating-rate short-term and long-term loans are exposed to the risk ofinterest-rate hikes, such risk is mitigated by the Company’s low LTV and relatively high percentage of long-term fixed-rate debts
within the total borrowing. The Company also utilizes derivative transactions (interest-rate swap transactions) as a hedge againstinterest-rate risk derived from floating-rate long-term loans, thereby maintaining the overall interest rates on the loans at aneffectively fixed level. Foreign currency-denominated loans are also exposed to currency exchange and interest-rate fluctuation risk.
However, the Company uses derivative transactions as a method of hedging against these risks (interest-rate and currency swap
transactions). For more detailed information on the hedge accounting method, hedging instruments, hedged items, hedge policies
and the evaluation method of hedge effectiveness, please refer to the previous section (7) Summary of Significant Accounting
Policies: Hedge accounting.
Loans and investment corporation bonds involve liquidity risk at the time of maturity. To manage such liquidity risk, theCompany implements measures such as ① maintaining and strengthening its ability to access equity markets to secure funds, ②maintaining commitment lines with major financial institutions (There is no amount outstanding under the facility as of March 31,
2015 and September 30, 2015) and ③ preparing monthly financial plans.
(iii) 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 cases where market values
are not available, reasonably calculated values are presented. Since calculation of fair value is based on certain assumptions, the fairvalue could differ depending on the assumptions used. In addition, the contract value of derivative transactions, which is presented
in the following section entitled Derivative Transactions, is not an exact representation of market risk attributable to derivativetransactions.

18

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

b. Fair value of financial instruments
Fair value of financial instruments, their values carried on the balance sheet and the differences between them as of March 31, 2015 and
September 30, 2015 are as follows.
The financial instruments whose fair values are extremely difficult to estimate are excluded from the following schedule (Note 2):
Thousands of yen
As of March 31, 2015

(1) Cash and deposits(2) Cash and deposits in trust(3) Short-term loans(4) Current portion of investment corporation bonds(5) Current portion of long-term loans(6) Investment corporation bonds(7) Long-term loans(8) Derivative transactions

Book value
15,561,878
4,687,042
32,500,000
20,000,000
16,600,000
20,000,000
271,900,000－

Fair value
15,561,878
4,687,042
32,500,000
20,034,500
16,649,373
21,795,300
276,786,681－

Difference－－－
34,50049,373
1,795,300
4,886,681－

Thousands of yen
As of September 30, 2015

(1) Cash and deposits(2) Cash and deposits in trust(3) Short-term loans(4) Current portion of investment corporation bonds(5) Current portion of long-term loans(6) Investment corporation bonds(7) Long-term loans(8) Derivative transactions

Book value
20,564,934
5,844,989
36,700,000－
32,100,000
20,000,000
284,650,000－

Fair value
20,564,934
5,844,989
36,700,000－
32,260,394
21,692,400
289,975,910－

Difference－－－－
160,394
1,692,400
5,325,910－

Notes: 1. Measurement of fair value of financial instruments and matters concerning derivative transactions(1) Cash and deposits and (2) Cash and deposits in trust
Due to short tenor, the book values of these assets are reasonable approximations of the present value of these assets and hence
used as their fair value.
(3) Short-term loans
Since these loans’ tenor is short and rates are reset at a short interval, the book values of these liabilities are reasonableapproximations of their present value and hence used as their fair values.
(4) Current portion of investment corporation bonds and (6) Investment corporation bonds
Their fair values are based on the values published by a financial data provider.
(5) Current portion of long-term loans and (7) Long-term loans
For loans with floating interest rates, since the interest rates on such loans reflect market rates reasonably well over the short term
and their book values are good approximations of their fair values, the book values are presented as their fair values. (However, thefair values of floating-rate long-term loans hedged by an interest-rate and currency swap subject to integrated treatment or by aninterest-rate swap subject to special accounting treatment are calculated by discounting the aggregated principal and the interest on
such loans, after taking into account the effect of said interest-rate and currency swaps or interest-rate swaps, using reasonableestimates of the rates that would be applicable if the Company were to refinance the existing loans for the remaining period tomaturity under the prevailing market conditions as of March 31, 2015 and September 30, 2015. Such floating-rate long-term loans
are presented in the following section entitled Derivative Transactions.) The fair values of the liabilities with fixed interest rates arecalculated by discounting the aggregated amounts of the principal and the interest of the loans by the rates that are reasonably
estimated to be applicable if the Company were to refinance the existing loans for the remaining period to maturity under theprevailing market conditions as of March 31, 2015 and September 30, 2015.
(8) Derivative transactions
Please refer to the following section entitled Derivative Transactions.
2. Financial instruments whose fair values cannot be reliably measured
Thousands of yen
As of March 31, 2015
(1) Non-listed stock (*1)
(2) Deposits received from tenants (*2)

577,168
47,637,990

As of September 30, 2015
577,168
49,573,768(*1) With regard to non-listed stock, which does not have a quoted market price in an active market and whose cash flows are notreasonably estimated, fair value cannot be reliably measured and it is therefore presented at book value.
(*2) With regard to deposits received from tenants, which do not have a quoted market price in an active market and reasonably
estimated tenor, their cash flows cannot be reliably measured and they are therefore presented at their book value.

19

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）
3. Redemption schedule for monetary claims after the closing dateThousands of yen
As of March 31, 2015
1 year or less

Cash and deposits
Cash and deposits in trust
Total

1 to 2 years

15,561,878
4,687,042
20,248,921

2 to 3 years———

3 to 4 years———

4 to 5 years———

Over 5 years

—
—
—

—
—
—

Thousands of yen
As of September 30, 2015
1 year or less

Cash and deposits
Cash and deposits in trust
Total

1 to 2 years

20,564,934
5,844,989
26,409,924

2 to 3 years———

3 to 4 years———

4 to 5 years———

Over 5 years

—
—
—

—
—
—

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, 2015
1 year or less

Short-term loans
Investment corporation bonds
Long-term loans
Total

32,500,000
20,000,000
16,600,000
69,100,000

1 to 2 years

2 to 3 years

3 to 4 years

4 to 5 years

Over 5 years——
44,400,000
44,400,000——
46,500,000
46,500,000—
10,000,000
25,000,000
35,000,000——
39,000,000
39,000,000—
10,000,000
117,000,000
127,000,000

Thousands of yen
As of September 30, 2015
1 year or less

Short-term loans
Investment corporation bonds
Long-term loans
Total

36,700,000—
32,100,000
68,800,000

1 to 2 years

2 to 3 years

3 to 4 years

4 to 5 years

Over 5 years——
42,850,000
42,850,000—
10,000,000
36,000,000
46,000,000——
25,000000
25,000,000——
44,500,000
44,500,000—
10,000,000
136,300,000
146,300,000(Derivative Transactions)a. Derivatives not designated as hedging instruments
For the period from October 1, 2014 to March 31, 2015
“Not applicable”
For the period from April 1, 2015 to September 30, 2015
“Not applicable”
b. Derivatives designated as hedging instruments
For the period from October 1, 2014 to March 31, 2015
The contract amount or the equivalent principal amount set out in the contract as of the closing date for each derivative
designated as a hedging instrument is as follows.
(Thousands of yen)

Derivative accounting
methodHedge accounting
Integrated Treatment(Special Treatment andAllocation Treatment) forinterest-rate and currency
swap transactions

Contract value

Type ofderivative transaction

Hedged item

Receive floating,pay fixed interest-rate swap
transactions

Long-term loans

47,500,000

Receive floating USD,
pay fixed JPY, interest-rate
and currency swap transaction (with initial and final
exchange)

Long-term loans

10,000,000

20

Fair value

Measurementof fair value

47,500,000*―

10,000,000*―

Over one year

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

For the period from April 1, 2015 to September 30, 2015
The contract amount or the equivalent principal amount set out in the contract as of the closing date for each derivative
designated as a hedging instrument is as follows.
(Thousands of yen)

Derivative accounting
methodType ofderivative transaction

Hedged item

Hedge accounting

Receive floating,pay fixed interest-rate swap
transactions

Long-term loans

Integrated Treatment

Receive floating USD,

Contract valueOver one year

60,800,000

60,800,000

Fair value

Measurementof fair value*―

pay fixed JPY, interest-rate(Special Treatment and―Long-term loans
10,000,000
10,000,000
Allocation Treatment) for and currency swap trans*interest-rate and currency
action (with initial and final
swap transactions
exchange)*Because the derivative transactions eligible for the Special Treatment of interest-rate swaps and Integrated Treatment (Special Treatment forinterest-rate swaps and Allocation Treatment for currency swaps) are accounted for as integral parts of the hedged loans, the fair value of thosederivative transactions is included in that of the underlying long-term loans as of March 31, 2015 and September 30, 2015. Please refer to themeasurement of fair value of financial instruments in Note 1 of the section entitled “b. Fair value of financial instruments” under “Financial
Instruments” as well as subheadings (5) and (7) of Note 1 concerning derivative transactions.

(Income Taxes)
The Company is subject to Japanese corporate income taxes on all of its taxable income. However, under the Special Taxation Measures
Law of Japan (hereinafter the STML), an investment corporation is allowed to deduct dividends of accounting profits, or dividend
distributions, paid to unitholders 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 dividends 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 will make a dividend
distribution in the amount of ¥10,475 million subsequent to September 30, 2015, which is the multiple number of units up to 100% of
the unappropriated retained earnings after deducting therefrom ¥31 million of retained earnings to be carried forward. The Company
will not distribute dividends in excess of retained earnings under Article 32-3 of the Articles of Incorporation. The significant
components of deferred tax assets and liabilities as of March 31, 2015 and September 30, 2015 were as follows:
Thousands of yen
For the period from October 1, 2014
For the period from April 1, 2015
to March 31, 2015
to September 30, 2015

Deferred tax assets:
Accrued enterprise tax
Amortization of a term leasehold interest
Asset retirement obligations
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Reserve for advanced depreciation of non-current assets
Total deferred tax liabilities
Net deferred tax liabilities

979
42,622
8,257
51,860(50,880)979

953
47,736
9,295
57,986(57,032)
953

116,161
116,161
115,181

116,161
116,161
115,207

The reconciliation of tax rate difference between the adjusted statutory tax rate and the effective tax rate for the six months ended
March 31, 2015 and September 30, 2015 was as follows:
For the period from October 1, 2014
to March 31, 2015

For the period from April 1, 2015
to September 30, 201537.11%(37.06%)0.07%(0.06%)
0.06%

35.36%(35.32%)
0.06%
0.01%
0.11%

Statutory tax rate
Deductible dividend distribution
Change in valuation allowance
Others
Effective tax rate

21

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(Asset Retirement Obligations)
For the six months ended March 31, 2015 and September 30, 2015a. Asset retirement obligations reported on balance sheet
The Company acquired Osaki Front Tower on February 1, 2011 under the term leasehold for business use agreement which, at the
expiry of the leasehold, obligates the Company to restore the leased land to its original state. At the inception of a lease with such an
obligation, the Company recognized an asset retirement obligation 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 iscalculated using 2.015% as the discount rate over 42 years, which is the term of the leasehold.
Change in the amount of the asset retirement obligations as of March 31, 2015 and September 30, 2015 consisted of the following:Thousands of yen
For the period from October 1, 2014
to March 31, 2015

For the period from April 1, 2015
to September 30, 2015

315,687—
3,180
318,867

318,867—
3,212
322,080

Balance at the beginning of the period
Increase in tangible fixed assets
Adjustment required over the period
Balance at the end of the periodb. Asset retirement obligations other than those reported on balance sheet
Under the Road Act of Japan, the Company is obligated to remove the cable lines and the accompanying equipment originally installed
for preventing analog TV interference under the public roads close to Shibuya Cross Tower and to restore the public roads to their
original states because analog TV broadcasting was discontinued.
Since the removal involves public roads currently in service and some of the locations of the underground structures are potentiallyaffected by the ongoing redevelopment projects near Shibuya Station, it is difficult to initiate such removal unilaterally without
involving other interested parties. Therefore, a reasonable estimate of the present value of asset retirement obligations cannot be madebecause the method, the cost and the timing of the removal remains uncertain.
In consideration of such uncertainty, the asset retirement obligation is not reported in the financial statements, and instead notedherein.

(Investment and Rental Property)
For the six months ended March 31, 2015 and September 30, 2015
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, 2015 and September 30, 2015 and the fair values as of March 31, 2015 and
September 30, 2015 are as follows:
Thousands of yen

As of September 30, 2014
786,106,624

Book value
Change during period(*1)
43,342,594

As of March 31, 2015
829,449,219

Book value
Change during period(*2)
39,584,842

As of March 31, 2015
829,449,219

Fair value
As of March 31, 2015
912,125,000

Thousands of yen

As of September 30, 2015
869,034,061

Fair value
As of September 30, 2015
977,666,000

Notes: 1. Book value on balance sheet means the acquisition cost less accumulated depreciation.
2. Significant changes(*1) As for increases/decreases for the period, the major reasons for the increase were the acquisitions of Shinjuku Eastside Square (¥23,396,427
thousand), the Clover Shiba-koen (¥4,675,038 thousand), the Ginza 1Chome East Building (¥6,708,693 thousand), and the Amagasaki Front
Building (¥9,390,082 thousand), as well as the additional acquisition in Harmony Tower (¥2,191,941 thousand). The major reason for decrease
was depreciation.
(*2) As for increases/decreases for the period, the major reasons for the increase were the acquisitions of the Umeda Square Building (¥15,677,942
thousand) and the AER (¥18,889,617 thousand), as well as an additional 5.0% co-ownership interest of trust beneficiary right of real estate
pertaining to the Shiodome Building (¥10,173,888 thousand). The major reason for decrease was depreciation.
3. Fair values as of March 31, 2015 and September 30, 2015 are defined as the appraised values provided by an external qualified professional
appraiser.

Profits and losses related to investment and rental property are listed in the “Breakdown of Property-Related Revenues and Expenses”.

22

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(Segment Information)
For the six months ended March 31, 2015 and September 30, 2015
Since the Company has been engaged in real estate leasing business using a single segment, segment information has been omitted.
Information on products and services
Since revenues from external customers for a single segment of similar products and services accounted for more than 90% of total
operating revenues, information on products and services has been omitted.

Information on geographic area
a. Revenue
Since 100% of total operating revenues was generated from external customers within Japan, a geographical breakdown ofrevenues has been omitted.
b. Property and equipment
Since 100% of total property and equipment on the balance sheet was located within Japan, a geographical breakdown of suchproperty and equipment has been omitted.
Information on major clients
Since no single external client represents 10% or more of the Company’s total operating revenues, information on major clients has
been omitted.

(Per Unit Information)
The following table summarizes information about net assets per unit and profit per unit at March 31, 2015 and September 30, 2015 andfor the periods then ended, respectively:
Yen

Net assets at period end per unit
Profit per unit

For the period from October 1, 2014
to March 31, 2015

For the period from April 1, 2015
to September 30, 2015

348,909
7,686

358,026
8,015

Notes: 1. Profit per unit is computed by dividing profit by the weighted average number of units outstanding during each period.
Diluted profit per unit has not been presented since no warrants or convertible bonds were outstanding during the period.
2. The basis for the computation of profit per unit is as follows.
Thousands of yen
For the period from October 1, 2014
to March 31, 2015

ProfitAmount not attributable tonormal unitholders
Profit applicable tonormal investment units
Average number of units

9,619,880―

For the period from April 1, 2015
to September 30, 2015

10,476,112―

9,619,880

10,476,112

1,251,530 units

1,307,008 units(Subsequent Events)“Not applicable”[Disclosure Omissions]Because it is not considered necessary to disclose information on lease transactions, securities, retirement benefits, and related party
transactions in the financial report, annotations concerning them have been omitted.

23

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(9) Increase/Decrease in Total Number of Units Outstanding
In April and May of 2015, the Company issued 54,000 units through public offering and 3,780 units through third-party allocation,
procuring approximately 31,232 million yen. Changes in the number of units outstanding and total unitholders’ capital for the past five
years are as follows.
Total Unitholders’ Capital
Number of Units Outstanding(Million Yen)
Date
Remarks
Notes
Increase/Decrease Balance Increase/Decrease Balance
February 28, 2012

Issuance of new investment
units (public offering)

54,400543,600

35,471

359,824*1

March 27, 2012

Issuance of new investment
units (third-party allocation)

5,440

549,040

3,547

363,371*2

October 29, 2012

Issuance of new investment
units (public offering)

41,000590,040

29,678393,050*3November 28, 2012

Issuance of new investment
units (third-party allocation)

4,100

594,140

2,967

396,018*4

January 1, 2014

Split of investment units

594,140 1,188,280－

396,018＊

April 15, 2014

Issuance of new investment
units (public offering)

57,500 1,245,780

27,968423,986＊

May 14, 2014

Issuance of new investment
units (third-party allocation)

5,750 1,251,530

2,796

426,783＊

April 6, 2015

Issuance of new investment
units (public offering)

54,000 1,305,530

29,189455,972

＊

*2.
*3.
*4.
*5.
*6.
*7.
*8.

*9.

6
7
8

Issuance of new investment
3,780 1,309,310
2,043
458,016*9units (third-party allocation)
New investment units were issued at 672,750 yen per unit (underwriting price of 652,050 yen) with the purpose of funding therepayment of short-term loans used to acquire new specified assets and, in the event there is any remaining, the repayment ofother loans.
New investment units were issued at 652,050 yen per unit with the purpose of funding the repayment of short-term loans used toacquire new specified assets and, in the event there is any remaining, the repayment of other loans.
New investment units were issued at 746,850 yen per unit (underwriting price of 723,870 yen) with the purpose of funding therepayment of loans and the acquisition of new specified assets.
New investment units were issued at 723,870 yen per unit with the purpose of funding the acquisition of new specified assets.
With December 31, 2013 as the date of record, and January 1, 2014 as the effective date, the Company implemented a 2-for-1
split of the investment units held by unitholders stated or recorded on the final unitholders registry for December 31, 2013.
New investment units were issued at 501,760 yen per unit (underwriting price of 486,400 yen), for the purpose of assigning funds
to repayment debt.
New investment units were issued at 486,400 yen per unit, for the purpose of compensating decreases in cash reserves assigned to
repayment debt.
New investment units were issued at 557,620 yen per unit (underwriting price of 540,550 yen) for the purpose of funding thepartial repayment of short-term loans, the redemption of investment corporation bonds, the acquisition of specified assets, and, inthe event there are any funds remaining, cash reserves.
New investment units were issued at 540,550 yen per unit for the purpose of funding the partial repayment of short-term loans and,in the event there are any funds remaining, cash reserves.

May 11, 2015
*1.

5

24

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

4. Changes in Officers
Change in officers shall be disclosed in a timely manner once the decision is made.

5. Reference Dataa.

Composition of the Company’s Assets
As of March 31, 2015

Asset type

Real property

Region, etc.

Total ofnet book value*1(¥ million)

Ratio tototal assets(%)

Tokyo 23 wards

528,16961.9

525,189

58.4

Tokyo metropolitan area
(excluding Tokyo 23 wards)*2

44,905

5.3

44,5495.0

Regional cities

67,5347.9

85,7249.5

640,608

75.1

655,463

72.8

Tokyo 23 wards

109,00212.8

118,627

13.2

Tokyo metropolitan area
(excluding Tokyo 23 wards)*2

19,938

2.3

19,781

2.2

Regional cities

59,8997.0

75,161

8.4

188,84022.1

213,571

23.7

23,2292.7

30,904

3.4

(－)

(－)

(－)

(－)

852,679

100.0

899,938100.0(829,449)(97.3)(869,034)(96.6)

Total

Trust

As of September 30, 2015

Total
Savings and other assets

Total ofnet book value*1(¥ million)

Ratio tototal assets(%)

Total amount of assets*1. Total of net book value as of March 31, 2015 is based on total amounts from the balance sheet as of March 31, 2015, and total of net
book value as of September 30, 2015 is based on total amounts from the balance sheet as of September 30, 2015. Real property andreal property held in trust are the book values after depreciation and amortization.
*2. Here, and throughout this document, Tokyo metropolitan area encompasses the prefectures of Tokyo, Kanagawa, Chiba andSaitama.
*3. The figures in parentheses indicate the value of real property held. Ratios are rounded to the first decimal place.

25

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）b.

Real Estate Investment Property and Trust Beneficiary Rights in Trust of Real Estatei) Outline of real estate and other assets included in the Company's holdings (quick reference guide)
The table below is a quick reference guide outlining the real estate and other assets included in the Company’s holdings as of
September 30, 2015.
Book value at

GenkiMedical Plaza

Realproperty

1

4,791

100.0%

6,890

4,830

5,000,000

0.5%

Kitanomaru
SquareRealproperty

5*5

25,678*5100.0%*578,30073,99281,555,500

8.8%

MD Kanda
Building

Realproperty

9

6,269

100.0%

7,940

8,831

9,520,000

1.0%

Kandabashi
Park Building

Realproperty

9

3,687

100.0%

4,320

4,525

4,810,000

0.5%

OtemachiFinancial City
North Tower

Realproperty

2

5,112

100.0%

17,80015,455

15,462,900

1.7%Nibancho
GardenRealproperty

1*5

9,316
*5

100.0%*5

17,40012,824

14,700,000

1.6%Mitsubishi
UFJ Trust andBanking
Building

Realproperty

10

11,904100.0%

47,70029,20144,700,000

4.8%

Burex
Kojimachi
Building

Realproperty

1

4,495

100.0%

6,430

5,857

7,000,000

0.8%

2.3%

Ratio
*2

Ratio by 2*regionLeasable space(m2)

the end of period(¥ mil)Number oftenants*1

Appraisal value
at the end of
period (¥ mil)*3

Type ofspecified asset

Occupancy rate*2

Name ofbuilding

RegionTokyo metropolitan area

Tokyo
23
wards

(¥ thousand)Acquisition price*4

74.2%

Sanno Grand
Building

Realproperty

36

20,83097.7%

31,50021,114

10,200,000
10,700,000
Total:
20,900,000

Yurakucho
Denki
Building

Realproperty

12

4,697

94.8%

7,800

7,740

7,200,000

0.8%

Kodenmacho
Shin-Nihonba
shi Building

Trust

10

3,897

100.0%

2,760

2,804

3,173,000

0.3%

Kyodo
Building(Kayabacho
2Chome)

Trust

10

4,464

100.0%

4,780

4,263

4,410,000

0.5%

Burex
Kyobashi
Building

Realproperty

1

4,279

100.0%

7,300

4,533

5,250,000

0.6%

Ginza
1 Chome East
Building

Trust

6

4,513

64.8%

6,800

6,640

6,459,000

0.7%

26

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Harumi Center
Building
Akasaka Park
Building
AoyamaCrystal
Building
CloverShiba-koen
Shiodome
Building
Tokyo metropolitan area

Tokyo
23
wards

Shiba 2Chome
DaimonBuilding
Cosmo
Kanasugibashi
Building
Shinjuku
Eastside
SquareShinwaBuilding

100.0%

16,80017,114(¥ thousand)

Ratio
*2

16,830,000

1.8%

0.9%

12

4,255

100.0%

5,700

7,522

5,353,500
2,645,922*6
Total:
7,999,422

8

33,369100.0%

38,700*7

29,86731,300,000

3.4%

9

20,812100.0%

20,50023,23426,800,000

2.9%

28
*5

45,013*5100.0%*5

69,20060,72060,800,000

6.6%

Real
property

7

4,898

100.0%

7,670

7,173

7,680,000

0.8%

Trust

8

2,550

100.0%

4,600
*14

4,639

4,500,000

0.5%

9.3%

Real
propertyRealpropertyRealpropertyRealproperty

Trust

35

36,174

97.7%

94,10082,991

21,250,000
54,600,000
10,100,000
Total:
85,950,000

Trust

25

9,606

100.0%

6,100

5,100

4,859,000

0.5%

Trust

6

4,062

100.0%

2,910

2,558

2,808,000

0.3%

Real
property

41

16,365

95.7%

25,200*14

23,13923,100,000

2.5%

Real
property

13

5,997

100.0%

6,360

7,507

7,830,000

0.8%

3.4%

Real
property

99

35,08295.7%

30,40028,9189,350,000
22,426,831
Total:
31,776,831

TIXTOWER
UENO
Higashi-Gotan
da 1Chome
Building

Realproperty

17

15,020100.0%

25,30020,71322,000,000

2.4%

Real
property

4

5,205

100.0%

5,770

4,607

5,500,000

0.6%

Osaki Front
Tower*9Realproperty

1

16,856100.0%

16,300*7

10,36812,300,000

1.3%

Trust

23

7,756

100.0%

5,360

4,561

5,123,000

0.6%

5,572

6,670,000(1,170,000)*11
Total:
5,500,000

0.6%Tokyo OperaCity
Building*8

Omori-Eki
Higashiguchi
Building
NipponBrunswick
Building(Land withleaseholdinterest)

Realproperty

*10

*10

27

*10

5,490

Ratio by 2*regionHarumi Front

Book value at theend of period(¥ mil)Ryoshin Ginza
East Mirror
Building

4,329

Appraisal value
at the end of
period (¥ mil)*3

Number oftenants*1
10

Occupancy rate*2

Type ofspecified asset
Realproperty

Leasable space(m2)

Name of building

RegionGinza Sanwa
Building

Acquisition price*4

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Appraisal value
at the end of
period (¥ mil)*3

Book value atthe end of period(¥ mil)94.8%

10,7007,2048,700,000

0.9%

Real
property

4

3,147

100.0%

6,720

4,871

4,885,000

0.5%

JingumaeMedia Square
Building

Realproperty

5

5,558

100.0%

10,00010,708

12,200,000
*12

1.3%

Shibuya Cross
Tower

Real
property

58

30,532

95.7%

48,70038,27734,600,000

3.7%

14,3303,740,000
360,000
10,512,000
Total:
14,612,000

1.6%

1.2%

Ebisu Neonato

Realproperty

Harmony
Tower

Realproperty

20

14,34097.3%

13,60010,2108,500,000
520,000
2,100,000
Total:
11,120,000

OtsukaHigashi-Ikebu
kuro Building

Trust

7

7,224

100.0%

4,150

3,479

3,541,000

0.4%

Ikebukuro
2ChomeBuilding

Trust

9

2,186

100.0%

1,650

1,587

1,728,000

0.2%

Ikebukuro YS
Building

Realproperty

10

5,932

100.0%

4,310

4,218

4,500,000

0.5%

Hachioji First
SquareRealproperty

5,020

3,300,000
2,379,112
Total:
5,679,112

0.6%

Saitama
Urawa
Building

Realproperty

17

4,510

95.0%

2,290

2,474

1,232,000
1,342,000
Total:
2,574,000

0.3%

MM Park
Building

Realproperty

28

38,42696.4%

37,90033,11937,400,000

4.0%

Queen’sTower A

Trust

51

26,66796.3%

18,500*14

16,766

17,200,000

1.9%

Kawasaki
Isago Building

Trust

13

6,831

100.0%

2,530

3,015

3,375,000

0.4%

Musashi
Kosugi STM
Building

Realproperty

26

5,378

100.0%

4,050

3,934

4,000,000

0.4%

Tokyo
23
wards

Tokyo metropolitan areaTokyo
metropo
litan

area,
excludi
ng
Tokyo
23
wards

6

50

8,700

100.0%

10,06899.4%

28

15,100

4,720*2

Occupancy rate*2

7,745

Ratio
*2

Ratio byregionNumber oftenants*1
8

Yoyogi 1
Chome
Buildingda Vinci
Harajuku

Leasable space(m2)

Type ofspecified asset
Real
Property

Name ofbuilding

Region(¥ thousand)Acquisition price*4

7.6%

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Type ofspecified asset

Number oftenants*1

Leasable space(m2)

Occupancy rate*2

Appraisal value
at the end of
period (¥ mil)*3

Book value atthe end of period(¥ mil)Real
property

9

12,265100.0%

7,340

6,224

7,100,000

0.8%

Jozenji Park Building

Realproperty

17

2,518

100.0%

956

1,012

1,000,000

0.1%

Higashi Nibancho
SuqareRealproperty

21

20,526

98.7%

13,200*7

9,521

9,950,000

1.1%

0.3%

(¥ thousand)

Ratio
*2

Other major cities

Sendai Honcho Honma
Building

Trust

25

6,234

100.0%

2,300

2,919

2,924,000
250,000
Total:
3,174,000

AER

Real
property

61

23,612

97.3%

19,00018,862

18,640,000

2.0%

Kanazawa Park Building

Realproperty

4,339

2,880,000
1,700,000
Total:
4,580,000

0.5%

0.6%

0.9%

78

20,942

95.5%

4,540

Nishiki Park Building*13

Realproperty

61
*5

9,850
*5

98.8%
*5

4,700

5,051

3,850,000
1,300,000
650,000
Total:
5,800,000

Nagoya Hirokoji Place

Trust

27

13,200100.0%

9,970
*14

8,376

8,567,000

18.2%

Hirokoji Sakae Building

Realproperty

17

3,911

97.2%

1,620

1,691

1,680,000

0.2%

Nagoya Hirokoji
Building

Realproperty

32

21,63695.9%

12,40015,366

14,533,000

1.6%

Nagoya Misono
Building

Realproperty

16

3,448

100.0%

1,210

1,345

1,865,000

0.2%

Shijo Karasuma Center
Building

Realproperty

9

6,634

95.0%

4,820
*14

4,228

4,400,000

0.5%

Kyoto Shijo
Kawaramachi Building

Realproperty

34

6,805

93.3%

1,860

2,514

2,650,000

0.3%

Umeda Square
Building*16

Trust

38

10,36996.8%

16,20015,597

15,523,520

1.7%

Shin-Fujita Building

Trust

42

28,41484.1%

17,60022,411

24,000,000

2.6%

Sakaisujihonmachi
Building

Realproperty

22

11,520100.0%

3,180

3,688

2,264,000
1,900,000
Total:
4,164,000

0.4%

29

Ratio by 2*regionName ofbuilding

Region8･3 Square Kita
Building

Acquisition price*4

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Type ofspecified asset

Number oftenants*1

Leasable space(m2)

Occupancy rate*2

Appraisal value
at the end of
period (¥ mil)*3

Book value atthe end of period(¥ mil)Trust

43

20,450100.0%

13,50013,187

6,934,000
7,380,000
Total:
14,314,000

1.5%

Amagasaki Front
Building

Trust

31

15,500

99.0%

9,510

9,250

9,300,000

1.0%

Lit City Building

Realproperty

39

9,965

100.0%

4,530

3,408

4,650,000

0.5%

NHK Hiroshima
Broadcasting Center
Building

Realproperty

12

9,860

100.0%

2,610

2,844

1,320,000
1,450,000
Total:
2,770,000

0.3%

Tosei Tenjin Building

Realproperty

21

3,995

98.1%

1,320

1,394

1,550,000

0.2%

Tenjin Crystal Building

Realproperty

31

5,973

100.0%

2,540

4,228

5,000,000

0.5%

Hinode Tenjin Building

Trust

4

5,841

100.0%

3,660

3,418

3,657,000

0.4%

Total

1,461

832,030

97.7%

977,666

869,034

927,778,286*1.

(¥ thousand)

Ratio
*2

Ratio by 2*regionName ofbuilding

RegionMidosuji Daiwa
Building

Acquisition price*4

100.0%The total number of tenants is based on the gross number of tenants in each building. Each instance of occupancy of a single
tenant leasing space is considered separately on a per property basis even if said tenant leases space in multiple properties.
*2. Occupancy rate, ratio of acquisition price and ratio by region are rounded to the nearest first decimal place.
*3. Appraisal value at the end of period is, as a rule, the value assessed by real estate appraisers based on the Company's Articles ofIncorporation and the Cabinet Office Ordinance on Accountings of Investment Corporations. The book closing date is used as theappraisal date and the appraisal value is calculated by Daiwa Real Estate Appraisal Co., Ltd.
*4. Incidental expenses arising from acquisitions are not included in the acquisition price.
*5. Residential portions are not included in the total number of tenants, the occupancy rate or the leasable space for Kitanomaru
Square, Nibancho Garden, Akasaka Park Building or Nishiki Park Building. The residential portions for these properties are as
follows: Kitanomaru Square, leasable space: 11,694m2, occupancy rate: 95.5%; Nibancho Garden, leasable space: 1,686m2,
occupancy rate: 100.0%; Akasaka Park Building, leasable space: 10,780m2, occupancy rate: 97.7%; Nishiki Park Building,leasable space: 954m2, occupancy rate: 72.9%.
*6. This includes the acquisition price of the land and building adjacent to Ryoshin Ginza East Mirror Building dated July 4, 2008,
the cost of the adjacent building’s demolition and the total expense of the construction and expansion of the Ryoshin Ginza East
Mirror Building (excluding brokerage fees and other acquisition-related expenses) after its completion on May 24, 2010.
*7. Appraisal values by Chuo Real Estate Appraisal Co., Ltd.
*8. Accompanying the acquisition of Tokyo Opera City Building on September 13, 2005, the Company acquired 33 shares of Tokyo
Opera City Building Co., Ltd. (the business that maintains, services and operates the building) at a total acquisition price of 2,797
thousand yen and inherited the 874 thousand yen deposit made to Tokyo Opera City Building Co., Ltd. by the seller. In an
additional acquisition, on March 24, 2010, the Company acquired 91 shares of Tokyo Opera City Building Co., Ltd. at a totalacquisition price of 7,539 thousand yen. Concurrently, the Company acquired 4,931 shares of Tokyo Opera City Heat Supply Co.,
Ltd. (the supplier of heat to the building) at a total acquisition price of 566,831 thousand yen, inheriting the 2,360 thousand yen
deposit made to Tokyo Opera City Building Co., Ltd. by the seller.
Regarding the appraisal value at the end of the fiscal period of the above-mentioned shares and deposits, the 4,931 shares ofTokyo Opera City Heating Co., Ltd. are valued at 566,831 thousand yen, the total deposits of 3,235 thousand yen are valued at
3,235 thousand yen, and the 124 shares of Tokyo Opera City Building Co., Ltd. are valued at 10,336 thousand yen.
*9. On acquiring Osaki Front Tower, the Company inherited the land renter’s lease deposit of 1,040,000 thousand yen held by theseller of the building. The value of the lease deposit was appraised at the end of the fiscal period and remained unchanged.
*10. Because the building portion of the Nippon Brunswick Building was transferred on August 23, 2013, no total number of tenants,
leasable space or occupancy rate are provided. Furthermore, the 1,497m2 portion of land still held is being rented to the transfereeof the building, Mitsubishi Estate Co., Ltd.
*11. Because the building was transferred on August 23, 2013, the acquisition price of the building at the time of the land and building
purchase dated March 24, 2004, has been deducted.
30

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）*12. This is the acquisition price dated October 9, 2003, and includes a portion of the site transferred on October 30, 2009 (cost ofinvestment sold, 614 million yen).
*13. On acquiring Nishiki Park Building, the Company inherited the 9,000 thousand yen lease deposit made by the land renters held by
the seller of the building. The value of the lease deposit was appraised at the end of the fiscal period and remained unchanged.
*14. Appraisal values by Japan Real Estate Institute.
*15. In the above quick reference guide, if the real estate or other assets are classified as shared ownership or compartmental
ownership, only the real estate or other assets owned by the Company are presented and the portions owned by the other sharedowners or compartmental owners are excluded.
*16. On acquiring the Umeda Square Building, the Company inherited 500,000 thousand yen of deposit for construction to connect tounderground shopping centers given to Osaka Shigaichi Kaihatsu Co., Ltd., which was held by the seller of the building. The
value of deposit for construction was appraised at the end of the fiscal period and remained unchanged.
*17. The properties presented in the above quick reference guide do not include properties that have falsified structural calculation
reports as reported by the local government authorities and the Ministry of Land, Infrastructure, Transport and Tourism.

31

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

ii) Breakdown of property-related revenues and expenses for real estate and other assets included in the Company's holdings
The table below is a quick reference guide outlining the revenues and expenses on each real estate and other asset for the
September 2015 period (April 1, 2015 – September 30, 2015). Furthermore, the income summary is presented based on thepreviously mentioned “Summary of Significant Accounting Policies.”(Millions of Yen)
Revenues / Expenses (April 1, 2015 – September 30, 2015)
Property- Propertyrelated related
revenues expenses
Property and other
taxes

72

12

16

17

0

2

20

2

151

172

-

172

Kitanomaru Square

1,658

758

121

82

94

2

45

410

-

900

1,311

3

1,308

221

90

17

20

20

0

2

28

-

131

160

12

147

111

37

1

-

16

0

1

16

-

73

90

9

81

354

180

25

20

45

0

-

88

0

173

262

-

262

479

240

60

31

53

0

3

90

-

239

330

0

330

999

366

52

64

136

1

1

109

1

632

742

7

734

150

78

-

-

13

0

2

62

-

72

134

-

134

889

354

99

63

105

1

7

77

-

535

612

26

585

240

130

33

21

41

0

2

31

-

109

140

3

136

106

69

16

9

11

0

14

12

3

37

50

4

45

142

59

9

12

11

0

3

21

-

82

104

-

104

150

52

-

-

11

0

2

38

-

97

135

0

135

98

81

14

5

0

0

0

61

-

16

77

3

74

383

135

28

20

64

0

1

19

0

247

267

8

259

160

85

14

15

14

0

1

38

0

75

113

2

111

1,235

740

159

124

74

1

19

360

0

495

855

0

855

Mitsubishi UFJ
Trust and Banking
Building
Burex Kojimachi
Building
Sanno Grand
Building
Yurakucho Denki
Building
Kodenmacho
Shin-Nihonbashi
Building
Kyodo Building(Kayabacho
2Chome)Burex Kyobashi
Building
Ginza 1Chome East
Building
Ginza Sanwa
Building
Ryoshin Ginza East
Mirror Building
Harumi Front

Depreciation①

Nibancho Garden

Casualty insurance

MD Kanda
Building
Kandabashi Park
Building
Otemachi Financial
City North Tower

Other expenses

Utilities expenses

224

Repairing expenses

Property management
expenses

PropertyCapital
relatedNOI
expendit NCF
profits③－④③(①+②) ures②④*2

Genki Medical
Plaza

Name of building

Harumi Center
Building
Akasaka Park
Building
Aoyama Crystal
Building

606

394

70

51

47

1

11

212

0

212

424

0

424

2,227

1,239

234

282

273

3

68

372

3

987

1,360

38

1,322

202

103

20

16

29

0

6

30

0

99

129

9

119

Clover Shiba-koen

102

40

8

7

0

0

0

23

-

62

85

-

85

Shiodome Building

2,008

750

142

132

126

2

10

332

3

1,257

1,590

2

1,588

Shiba 2Chome
Daimon Building

276

145

35

32

38

0

2

35

0

131

166

4

162

32

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Revenues / Expenses (April 1, 2015 – September 30, 2015)
Property- Propertyrelated related
revenues expenses
PropertyCapital
relatedNOI
expendit NCF
profits③－④③(①+②) ures②④*2

Other expenses

Depreciation①

Repairing expenses

Casualty insurance

Property and other
taxes

Cosmo
Kanasugibashi
Building
Shinjuku Eastside
SquareUtilities expenses

Property management
expensesName of building

109

46

10

8

13

0

0

13

-

62

75

-

75

458

285

46

54

49

0

0

132

0

173

305

5

300

202

107

20

20

19

0

21

25

-

94

119

2

117

1,455

1,114

673

386

59

48

38

1

0

237

-

286

524

0

524

185

96

13

22

14

0

1

43

0

89

133

2

130

697

510

71

52

27

0

9

256

92

187

444

0

443

232

122

28

24

25

0

17

27

-

109

137

3

134

60

20

-

-

20

-

-

-

-

39

39

-

39

290

148

22

24

23

0

9

67

-

141

209

-

209

192

61

10

12

16

0

6

14

-

131

146

-

146

301

152

22

34

41

0

16

36

0

148

185

29

156

1,390

1,043

175

144

123

2

176

419

0

346

766

485

281

Ebisu Neonato

443

217

50

26

36

2

7

94

-

225

319

10

309

Harmony Tower

464

161

43

-

47

1

12

56

-

303

360

-

360

195

97

19

24

12

0

2

38

-

97

136

6

129

65

30

9

6

5

0

0

7

0

34

42

1

40

185

114

16

18

14

0

33

30

-

71

102

0

101

239

122

50

4

25

0

8

32

-

116

149

8

141

105

49

14

9

9

0

0

15

0

55

70

1

69

MM Park Building

1,263

742

135

195

78

1

38

293

0

520

814

2

811

Queen’s Tower A

982

703

210

116

111

3

7

247

6

279

527

4

522

144

90

24

17

13

0

12

21

-

53

75

107

ሺ32)

159

65

21

3

10

0

1

27

-

94

122

0

121

318

184

28

56

22

0

6

69

-

134

204

-

204

63

35

9

8

6

0

0

10

0

27

37

6

31

Shinwa Building
Tokyo Opera City
Building*1
TIXTOWER
UENO
Higashi-Gotanda
1Chome Building
Osaki Front Tower
Omori-Eki
Higashiguchi
Building
Nippon Brunswick
Building
Yoyogi 1Chome
Buildingda Vinci Harajuku
Jingumae Media
Square Building
Shibuya Cross
Tower

OtsukaHigashi-Ikebukuro
Building
Ikebukuro 2Chome
Building
Ikebukuro YS
Building
Hachioji First
SquareSaitama Urawa
Building

Kawasaki Isago
Building
Musashi Kosugi
STM Building
8･3 Square Kita
Building
Jozenji Park
Building

340

33

41

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Revenues / Expenses (April 1, 2015 – September 30, 2015)
Property- Propertyrelated related
revenues expenses
Property and other
taxes

74

52

40

0

2

127

-

268

395

0

395

131

66

16

14

15

0

3

16

0

65

82

2

80

95

50

13

10

0

0

-

26

-

45

71

-

71

434

366

106

52

64

1

76

63

0

68

132

35

96

263

162

52

25

23

0

4

48

6

101

149

3

145

379

200

39

39

33

0

7

79

-

178

258

1

256

91

57

13

13

11

0

8

10

0

34

44

8

35

553

367

90

58

60

1

14

141

0

186

327

35

292

72

54

9

8

6

0

8

21

-

18

39

4

35

145

113

24

17

11

0

0

59

0

31

90

2

88

121

86

20

14

11

0

11

28

0

35

63

1

62

425

164

39

37

0

0

4

80

1

260

341

-

341

655

524

88

102

75

1

40

214

-

131

346

166

179

233

145

41

34

35

0

10

22

-

88

110

0

109

539

288

63

47

73

1

40

62

0

250

313

5

307

432

220

63

29

0

0

6

121

0

211

332

2

330

260

150

31

26

19

1

5

65

0

110

176

-

176

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

264

170

50

27

23

0

4

39

24

93

133

2

130

81

40

12

7

7

0

2

10

0

40

51

2

48

153

126

22

18

18

0

4

61

0

27

88

3

85

169

71

20

15

14

0

1

19

0

98

117

0

116

Total

16,642 3,549 2,869 2,766

58

881 6,332

186

13,33819,6701,140

18,53029,980Depreciation①

Lit City Building

Casualty insurance

AER
Kanazawa Park
Building
Nishiki Park
Building
Nagoya Hirokoji
Place
Hirokoji Sakae
Building
Nagoya Hirokoji
Building
Nagoya Misono
Building
Shijo Karasuma
Center Building
Kyoto Shijo
Kawaramachi
Building
Umeda Square
Building
Shin-Fujita
Building
Sakaisujihonmachi
Building
Midosuji Daiwa
Building
Amagasaki Front
Building

Other expenses

Utilities expenses

298

Repairing expenses

Property management
expenses

Higashi Nibancho
SuqareSendai Honcho
Honma Building

PropertyCapital
relatedNOI
expendit NCF
profits③－④③(①+②) ures
②
④*2

566

Name of building*1. Disclosure of NOI and NCF in the breakdown of the expenses of the property leasing business for Tokyo Opera City Building has
been withheld at the request of the joint owners of the real estate.
*2. Construction expenses that correspond to capital expenditures incurred during the period under review are listed under capital
expenditures. This does not include expenses capitalized as construction in progress, expenses capitalized as furniture, etc., or such
expenses included in the book value as brokerage fees for acquiring real estate or other assets, real estate acquisition taxes or otheracquisition-related expenses.

34

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

c. Condition of Other Assets(i) Shares/Investment Securities

Securities
Tokyo Opera City
Building Co., Ltd.
Tokyo Opera City Heat
Supply Co., Ltd.
Total

Appraisal Value(¥ thousand)Unit Price

AmountUnit Price

AmountValuation
Gain/Loss(¥ thousand)

124

83

10,336

83

10,336

－

*

4,931

114

566,831114

566,831

－

*

－

－

577,168－

577,168－

Number of
SharesAcquisition Price (¥ thousand)Notes* Unit prices for relevant non-listed stock are defined as acquisition costs.
(ii) Marketable Securities Other Than Shares

Asset TypeAppraisal Value(¥ thousand)Unit Price

AmountUnit Price

AmountValuation
Gain/Loss(¥ thousand)Book Value (¥ thousand)
Quantity

Trust beneficiaryrights in deposits

1

870,527

870,527

870,527

870,527

－

Total

－

－

870,527－

870,527

－

Notes

－

(iii) Other Specified Assets

Asset TypeAppraisal Value(¥ thousand)Unit Price

AmountUnit Price

AmountValuation
Gain/Loss(¥ thousand)Book Value (¥ thousand)
Quantity

Monetary claim

1

1,040,000

1,040,000

1,040,000

1,040,000

－

Total

－

－

1,040,000－

1,040,000

－

Notes
－

* Trust beneficiary rights, the principal trust asset of real estate, are included in the previous section b. "Real Estate Investment Property
and Trust Beneficiary Rights in Trust of Real Estate."

35

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

d. Capital Expenditures(i) Schedule for Capital Expenditures
The significant scheduled capital expenditures, such as current plans for repair, maintenance and renovation work on existing
properties, are listed below.
The following scheduled capital expenditures include those accounted for as expenses.
Estimated Cost (¥ million)

Name of Properties
Total
AmountPayment Amount for
the fiscal underreview period

Total Amount
Already Paid

From April 2015
To March 2016

253

－

－

From June 2015
To March 2016

250

－

－

PurposeScheduled Period

Upgrade of air
conditioners
Upgrade of air
conditioners(Location)
Nagoya Misono Building(Nagoya, Aichi Prefecture)

Midosuji Daiwa Building(Osaka, Osaka Prefecture)

Shinwa Building(Shinjuku-ku,Tokyo)

Omori-Eki Higashiguchi
Building(Ota-ku,Tokyo)

Omori-Eki Higashiguchi
Building(Ota-ku,Tokyo)

NHK Hiroshima Broadcasting
Center Building(Hiroshima, Hiroshima Prefecture)

Ryoshin Ginza East Mirror
Building(Chuo-ku, Tokyo)

Saitama Urawa Building(Saitama, Saitama Prefecture)
Nishiki Park Building(Nagoya, Aichi Prefecture)

Otsuka Higashi-Ikebukuro
Building(Toshima-ku, Tokyo)

Burex Kyobashi Building(Chou-ku, Tokyo)

Shiba 2Chome Daimon
Building(Minato-ku, Tokyo)

NHK Hiroshima Broadcasting
Center Building(Hiroshima, Hiroshima Prefecture)

Jozenji Park Building(Sendai, Miyagi Prefecture)

Upgrade of air
conditioning
facilities
Upgrade of air
conditioning
facilities
Upgrade of air
conditioning
facilities

From April 2016
To September 2016

146

－

－

From October 2015
To March 2016

118

－

－

From April 2016
To September 2016

100

－

－

Upgrade of air
conditioners

From September 2015
To January 2016

91

－

－

Upgrade of air
conditioners

From October 2015
To February 2016

84

－

－

Construction work

From October 2015
To February 2016

83

－

－

Upgrade of disasterprevention facilities

From October 2015
To February 2016

73

－

－

Upgrade of air
conditioners

From October 2015
To December 2015

60

－

－

Upgrade ofelectricalequipment

From August 2015
To March 2016

59

－

－

Upgrade of air
conditioners

From April 2016
To September 2016

50

－

－

Upgrade of disasterprevention facilities

From June 2015
To February 2016

49

－

－

Construction work

From June 2015
To December 2015

1236

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(ii) Capital expenditures during the period under review
For acquired real estate and other assets, capital expenditures incurred in the period under review totaled ¥1,140 million and repair,maintenance and renovation expenses classified as expenses in the period under review totaled ¥881 million, for a total of ¥2,021
million worth of construction that has been carried out.
One of the significant capital expenditures for the period under review was the repair, maintenance, and renovation work on common
areas of the Kawasaki Isago Building.
Name of Building(Location)

Purpose

PeriodKawasaki Isago Building

Construction work

From March 2015
To August 2015

(Kawasaki, Kanagawa Prefecture)

Expenditures forConstruction (¥ million)
106

other real estate

1,033

Total

1,140

(iii) Money Saved for Long-term Repair Plans
Based on mid-to-long term repair plans, the Company has reserved funds for every property to prepare for expenditures such as
maintaining future property value and upgrading equipment.
(Millions of yen)
For the period from
April 1, 2013 to
September 30,2013

For the period from
October 1, 2013 toMarch 31, 2014

For the period from
April 1, 2014 toSeptember 30, 2014

For the period from
October 1, 2014 toMarch 31, 2015

For the period from
April 1, 2015 to
September 30, 2015

2,237

2,486

2,431

2,463

2,519

2,304

2,469

2,470

2,531

2,804

2,055

2,524

2,438

2,475

2,561

2,486

2,431

2,463

2,519

2,762

Balance of reserved funds
at the start of period
Reserved funds
for the period
Reversal of reserved
funds for the period
Balance carried overto next periode.

Expenses and Liabilities(i) Details on Operation-related Expenses

Item(a) Asset management fee*(breakdown) Fees for the period
Incentive fees(b) Asset custody fee(c) Administrative service fees(d) Directors' compensations(e) Commission fee(f) Other operating expenses
Total

For the period
from October 1, 2014
to March 31, 2015

For the period
from April 1, 2015
to September 30, 2015

¥772,029¥647,752¥124,276¥59,387¥140,513¥7,800¥106,448¥73,712¥1,159,891¥926,559¥687,741¥238,818¥60,569¥143,924¥7,800¥78,433¥66,897¥1,284,184

thousandthousandthousandthousandthousandthousandthousandthousandthousandthousandthousandthousandthousandthousandthousandthousandthousandthousand*In addition to the asset management fee listed above, in the case that a property is acquired, an “acquisition fee” is included in theacquisition cost of the property and paid to the asset management company.
In the case that a property is sold, a “disposition fee” is included in the loss on sale and paid to the asset management company. These
fees are calculated by multiplying the buying/selling price of the property by a fee rate.
In the period ended March 31, 2015, acquisition fees amounted to ¥227,295 thousand, and in the period ended September 30, 2015,
acquisition fees amounted to ¥221,317 thousand.

37

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(ii) Loans
The condition of loans by financial institutions as of September 30, 2015, is as follows.
Segment
LenderMizuhoBank, Ltd.

The Bank ofTokyoMitsubishi
UFJ, Ltd.

Short-term loans

Sumitomo
Mitsui Trust
Bank, Limited

Shinsei Bank,
LimitedDrawdown
Date

Balance at
Beginning ofCurrent
Period(¥ million)

Balance at
End ofCurrent
Period(¥ million)

Average
Interest
Rate *1(%)

Repayment
Date

Repayment
MethodUse ofProceeds

Notes

October 1,
2014

3,500

2,500

0.18

October 1,
2015

Bullet*2

Purchasereal estate

Floating
interest rate

January 7,
2015

2,000

―

0.18

January 7,
2016

Bullet*3

Repay
existing shortterm loans

Floating
interest rate

March 25,
2015

5,500

5,500

0.18

March 25,
2016

BulletPurchase realestate trust
beneficiaryrightsFloating
interest rate

March 31,
2015

2,000

2,000

0.18

March 31,2016

BulletRepay
existing shortterm loans

Floating
interest rate

April 1,
2015

―

5,500

0.18

April 1,
2016

BulletPurchase realestate trust
beneficiaryrightsFloating
interest rate

October 1,
2014

3,500

―

0.18

October 1,
2015

Bullet*4

Purchasereal estate

Floating
interest rate

BulletPurchase realestate trust
beneficiaryrightsFloating
interest rate

March 2,
2015

3,500

3,500

0.18

March 2,
2016

March 27,
2015

2,000

―

0.18

March 28,
2016

Bullet*3

Purchasereal estate

Floating
interest rate

April 1,
2015

―

3,500

0.18

April 1,
2016

Bullet*5

Purchase realestate trust
beneficiaryrightsFloating
interest rate

September 2,
2014

3,800

―

0.18

September 2,
2015

BulletRepay
existing shortterm loans

Floating
interest rate

March 31,
2015

3,700

3,700

0.18

March 31,2016

BulletRepay
existing shortterm loans

Floating
interest rate

August 24,
2015

―

1,500

0.17

August 24,
2016

BulletRepay
existing shortterm loans

Floating
interest rate

September 1,
2015

―

2,000

0.17

September 1,
2016

BulletPurchasereal estate

Floating
interest rate

BulletPurchasereal estate andRepay
existing shortterm loans

Floating
interest rate

Resona Bank,
Limited

September 1,
2015

―

2,000

0.17

September 1,
2016

ShinkinCentral Bank

September 1,
2015

―

2,000

0.17

September 1,
2016

BulletRepay
existing shortterm loans

Floating
interest rate

The Daishi
Bank, Ltd.

January 7,
2015

1,500

1,500

0.18

January 7,
2016

BulletRepay
existing shortterm loans

Floating
interest rate

The 77
Bank, Ltd.

January 7,
2015

1,000

1,000

0.18

January 7,
2016

BulletRepay
existing shortterm loans

Floating
interest rate

October 1,
2014

500

500

0.18

October 1,
2015

BulletPurchasereal estate

Floating
interest rate

32,50036,700Mitsubishi
UFJ Trust andBanking
Corporation
Subtotal

38

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Segment
LenderMitsubishi
UFJ Trust andBanking
Corporation
MizuhoBank, Ltd.
Sumitomo
Mitsui Trust
Bank, Limited
The Bank ofTokyoMitsubishi
UFJ, Ltd.
Mitsubishi
UFJ Trust andBanking
Corporation

Drawdown
Date

June 23,2011

Balance at
Beginning ofCurrent
Period(¥ million)

Balance at
End ofCurrent
Period(¥ million)

―

6,000

―

6,000

Average
Interest
Rate *1(%)

Repayment
Date

Repayment
MethodUse ofProceeds

Notes

0.90875

June 23,2016

BulletRepay
existing loans

Fixed interest rateLong-term loans to be repaid within 1 year

―

6,000

―

6,000

April 4,
2011

―

5,000

1.0325

April 4,2016

BulletRepay
existing loans

Fixed interest rate

The Hachijuni
Bank, Ltd.

January 15,
2013

1,000

1,000

0.3825January 15,
2016

BulletRepay
existing loans

Fixed interest rate

The IyoBank, Ltd.

January 15,
2013

1,000

1,000

0.3825January 15,
2016

BulletRepay
existing loans

Fixed interest rate

May 31,
2007

1,500

―

1.86875

May 29,2015

BulletPurchasereal estate

Fixed interest rate

April 24,
2008

―

1,000

1.595

April 25,
2016

BulletSeptember 1,
2008

2,000

―

1.65

September 1,
2015

BulletMarch 24,
2010

100

100

1.665

March 24,
2017

Repaymentininstallments*6

Purchasereal estate

Fixed interest rate

The Chugoku
Bank, Limited

June 15,
2010

3,000

―

1.20875

June 15,2015

BulletRepay
existing loans

Fixed interest rate

The Dai-ichi
Life Insurance
Company,
LimitedMay 31,
2007

5,000

―

1.86875

May 29,2015

BulletPurchasereal estate

Fixed interest rate

The Hiroshima Bank, Ltd.

June 14,
2010

3,000

―

1.1875June 15,2015

BulletRepay
existing loans

Fixed interest rate

Taiyo Life
Insurance
Company

Development
Bank ofJapan Inc.

Subtotal
Total

16,60032,10049,10068,80039

Redeeminvestment
corporation
bonds
Purchase realestate trust
beneficiaryrightsFixed interest rate

Fixed interest rate

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Segment
LenderMitsubishi
UFJ Trustand Banking
Corporation

Long-term loans
The Bank ofTokyoMitsubishi

Drawdown
Date

Balance at
Beginning ofCurrent
Period(¥ million)

Balance at
End ofCurrent
Period(¥ million)

Average
Interest
Rate *1(%)

Repayment
Date

Repayment
MethodUse ofProceeds

Notes

April 4,
2011

5,000

―

1.0325

April 4,2016

BulletRepay
existing loans

Fixed interest rate

April 4,
2011

5,000

5,000

1.205

April 4,2017

BulletRepay
existing loans

Fixed interest rate

June 1,
2011

12,00012,0001.12625

June 1,
2017

BulletRepay
existing loans

Fixed interest rate

June 1,
2011

10,00010,0001.31125

June 1,
2018

BulletRepay
existing loans

Fixed interest rate

November 15,
2011

3,000

3,000

1.13875

November 15,
2019

BulletPurchasereal estate

Fixed interest rate

June 15,
2012

4,000

4,000

0.9525June 15,
2020

BulletPurchasereal estate

Fixed interest rate

June 15,
2012

2,500

2,500

1.2725June 15,
2022

BulletRedeeminvestment
corporation
bonds

Fixed interest rate

December 21,
2012

5,000

5,000

0.80125

December 21,
2020

BulletRepay
existing loans

Fixed interest rate

January 31,
2014

4,000

4,000

0.64225*7

January 29,
2021

BulletPurchase realestate trust
beneficiaryrightsFloating
interest rate
*7

December 19,
2014

10,00010,0000.42375*8

December 19,
2023

BulletRepay
existing shortterm loans

Floating
interest rate
*8September 1,
2015

―

3,500

0.63

September 2,
2024

BulletPurchasereal estate

Fixed interest rate

March 24,
2011

2,000

2,000

1.3975

March 26,2018

BulletRepay
existing shortterm loans

Fixed interest rate

November 15,
2011

3,000

3,000

1.13875

November 15,
2019

BulletPurchasereal estate

Fixed interest rate

June 15,
2012

4,000

4,000

1.1975June 15,
2022

BulletPurchasereal estate

Fixed interest rate

December 21,
2012

5,000

5,000

0.80125

December 21,
2020

BulletRepay
existing loans

Fixed interest rate

January 15,
2013

5,500

5,500

0.71

January 15,
2020

BulletRepay
existing loans

Fixed interest rate

January 15,
2013

5,500

5,500

0.83625

January 15,
2021

BulletRepay
existing loans

Fixed interest rate

April 24,
2013

5,000

5,000

0.775

April 26,
2021

BulletRepay
existing loans

Fixed interest rate

September 1,
2015

―

5,000

0.2

September 2,
2019

BulletPurchasereal estate

Fixed interest rate

September 1,
2015

―

2,000

0.47125

September 1,
2022

BulletRepay
existing shortterm loans

Fixed interest rate

UFJ, Ltd.

40JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Segment
LenderSumitomo
Mitsui Trust
Bank, Limited

Long-term loans
MizuhoBank, Ltd.

Drawdown
Date

Balance at
Beginning ofCurrent
Period(¥ million)

Balance at
End ofCurrent
Period(¥ million)

Average
Interest
Rate *1(%)

Repayment
Date

Repayment
MethodUse ofProceeds

Notes

January 17,
2011

3,000

3,000

1.43375

January 17
2018

BulletRepay
existing shortterm loans

Fixed interest rate

September 26,
2011

5,500

5,500

1.16

September 26,
2019

BulletRepay
existing shortterm loans

Fixed interest rate

November 15,
2011

3,000

3,000

0.98375

November 15,
2018

BulletPurchasereal estate

Fixed interest rate

June 15,
2012

4,000

4,000

0.9525June 15,
2020

BulletPurchasereal estate

Fixed interest rate

January 31
2014

2,000

2,000

0.62575*7January 29,
2021

BulletPurchase realestate trust
beneficiaryrightsFloating
interest rate*7

May 29,
2015

―

5,000

0.2075

May 29,2019

BulletRepay
existing loans

Fixed interest rate

June 15,
2015

―

3,000

0.3425June 15,
2020

BulletRepay
existing loans

Fixed interest rate

September 2,
2015

―

3,800

0.536
*7

September 2,
2024

BulletRepay
existing shortterm loans

Floating
interest rate
*7

December 21,
2010

5,000

5,000

1.30625

December 21,
2016

BulletRepay
existing shortterm loans

Fixed interest rate

November 1,
2011

6,000

6,000

1.2075

November 1,
2019

BulletRepay
existing shortterm loans andother loans

Fixed interest rate

November 15,
2011

3,000

3,000

1.13875

November 15,
2019

BulletPurchasereal estate

Fixed interest rate

June 15,
2012

4,000

4,000

1.07375

June 15,
2021

BulletPurchasereal estate

Fixed interest rate

January 15,
2013

5,000

5,000

0.96625

January 17,
2022

BulletRepay
existing loans

Fixed interest rate

April 24,
2013

3,000

3,000

0.87375

April 25,
2022

BulletRepay
existing loans

Fixed interest rate

September 1,
2015

―

2,500

0.17

March 1,
2019

BulletPurchasereal estate

Fixed interest rate

March 24,
2010

1,400

1,350

1.665

March 24,2017

Purchasereal estate

Fixed interest rate

Purchasereal estate

Fixed interest rate

Repaymentininstallments*6

Development
Bank ofJapan Inc.

January 7,
2013

3,000

3,000

1.115

January 6,
2023

BulletJanuary 31,
2014

5,000

5,000

0.9325January 31,
2023

BulletSeptember 1,
2015

―

7,000

0.7175September 1,
2025

Bullet41

Purchase realestate trust
beneficiaryrightsPurchasereal estate andRepay
existing loans

Fixed interest rate

Fixed interest rate

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）
Balance at
Beginning ofCurrent
Period(¥ million)

Balance at
End ofCurrent
Period(¥ million)

1,800

1,800

1,400

1,400

1,400

1,400

1,400

1,400

1,000

1,000

900

900

900

900

900

900

900

900

900

900

500

500

500

500

500

500

November 15,
2011

1,000

January 7,
2013

Segment
Lender
The Daishi
Bank, Ltd.
The Hokuetsu
Bank, Ltd.
Sony Bank
Incorporated
The Toho
Bank, Ltd.
The Shinkumi
FederationBank
The Akita
Bank, Ltd.
The FukuiBank, Ltd.
The Gunma
Bank, Ltd.
The 77
Bank, Ltd.
The Tochigi
Bank, Ltd.
The Higo
Bank, Ltd.
The Bank of
Iwate, Ltd.
The Yamagata
Bank, Ltd.

Long-term loans

ShinkinCentral Bank

The Bank ofFukuoka, Ltd.

The Norinchukin Bank

Average
Interest
Rate *1(%)

Repayment
Date

Repayment
MethodUse ofProceeds

Notes

0.463
*7

November 15,
2021

BulletRepay
existing shortterm loans

Floating
interest rate
*7

1,000

0.7525

November 15,
2016

BulletPurchasereal estate

Fixed interest rate

2,000

2,000

0.71375

January 7,
2020

BulletPurchasereal estate

Fixed interest rate

January 15,
2013

5,000

5,000

0.71

January 15,
2020

BulletRepay
existing loans

Fixed interest rate

April 24,
2013

5,000

5,000

0.52775

April 24,2018

BulletRepay
existing loans

Fixed interest rate

August 31,
2011

2,000

2,000

0.9025

August 31,
2017

BulletRepay
existing loans

Fixed interest rate

June 15,
2012

2,500

2,500

0.66

June 15,2017

BulletRedeeminvestment
corporation
bonds

Fixed interest rate

August 31,
2012

1,000

1,000

0.57125

August 31,
2017

BulletRepay
existing loans

Fixed interest rate

January 31,
2014

2,500

2,500

0.63849*7

January 29,
2021

BulletPurchase realestate trust
beneficiaryrightsFloating
interest rate
*7

March 24,
2015

2,000

2,000

0.5125

March 24,
2023

BulletRepay
existing loans

Fixed interest rate

January 31,
2014

3,500

3,500

0.757
*7

January 31,
2022

BulletJune 17,
2014

3,000

3,000

0.6785*7

June 17,
2022

BulletMarch 25,
2015

3,500

3,500

0.46825*7

March 27,
2023

BulletDrawdown
Date

November 14,
2014

42

Purchase realestate trust
beneficiaryrightsRedeeminvestment
corporation
bonds
Purchase realestate trust
beneficiaryrightsFloating
interest rate
*7
Floating
interest rate
*7
Floating
interest rate
*7

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Drawdown
Date

Balance at
Beginning ofCurrent
Period(¥ million)

Balance at
End ofCurrent
Period(¥ million)

Average
Interest
Rate *1(%)

Repayment
Date

Repayment
MethodUse ofProceeds

Notes

August 31,
2011

3,000

3,000

1.0475

August 31,
2018

BulletRepay
existing loans

Fixed interest rate

June 15,
2012

2,500

2,500

0.66

June 15,2017

BulletPurchasereal estate

Fixed interest rate

1.2725June 15,
2022

BulletRedeeminvestment
corporation
bonds

Fixed interest rate

0.3925*7

August 10,
2022

BulletRepay existing
shortterm loans

Floating
interest rate
*7

Segment
Lender

Shinsei Bank,
LimitedJune 15,2012
The Chugoku
Bank, Limited
The Daishi
Bank, Ltd.
The FukuiBank,Ltd.
The Gunma
Bank, Ltd.
The Shinkumi
FederationBank
The Toho
Bank, Ltd.
The Tochigi
Bank, Ltd.

The Chugoku
Bank, Limited

Long-term loans

The IyoBank, Ltd.

Taiyo Life
Insurance
Company

The Dai-ichi
Life Insurance
Company,
LimitedResona Bank,
LimitedSumitomo
Mitsui
Banking
Corporation

2,500

2,500

―

1,000

―

1,000

―

1,000

―

1,000

―

1,000

―

1,000

―

500

March 25,
2013

2,000

2,000

0.45

March 26,2018

BulletRepay
existing loans

Fixed interest rate

October 1,
2014

1,000

1,000

0.4725*7

October 1,
2021

BulletPurchasereal estate

Floating
interest rate
*7

June 15,
2015

―

3,000

0.61175*7June 15,
2023

BulletRepay
existing loans

Floating
interest rate
*7

June 15,
2012

2,500

2,500

0.66

June 15,2017

BulletRedeeminvestment
corporation
bonds

Fixed interest rate

March 24,
2014

2,000

2,000

0.6035*7

March 24,
2021

BulletRepay
existing loans

Floating
interest rate
*7

October 1,
2014

1,000

1,000

0.46525*7

October 1,
2021

BulletPurchasereal estate

Floating
interest rate
*7

April 24,
2008

1,000

―

1.595

April 25,
2016

BulletRedeeminvestment
corporation
bonds

Fixed interest rate

March 30,
2011

2,000

2,000

1.39625

March 30,
2018

BulletRepay
existing loans

Fixed interest rate

October 1,
2014

2,000

2,000

0.7825October 1,
2024

BulletPurchasereal estate

Fixed interest rate

May 29,
2015

―

1,500

0.7375

May 29,2025

BulletRepay
existing loans

Fixed interest rate

March 30,
2009

5,000

5,000

1.54375

March 30,
2017

BulletRepay
existing loans

Fixed interest rate

March 1,
2011

2,000

2,000

1.255

March 1,
2017

BulletPurchase realestate trust
beneficiaryrightsFixed interest rate

March 25,
2013

3,000

3,000

0.45

March 26,2018

BulletRepay
existing loans

Fixed interest rate

November 15,
2011

3,000

3,000

0.98375

November 15,
2018

BulletPurchasereal estate

Fixed interest rate

January 7,
2013

2,000

2,000

0.98

January 7,
2022

BulletPurchasereal estate

Fixed interest rate

August 10,
2015

43

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Drawdown
Date

Balance at
Beginning ofCurrent
Period(¥ million)

Balance at
End ofCurrent
Period(¥ million)

Average
Interest
Rate *1(%)

Repayment
Date

Repayment
MethodUse ofProceeds

Notes

June 15,
2012

1,000

1,000

0.66

June 15,2017

BulletPurchasereal estate

Fixed interest rate

December 20,
2012

1,000

1,000

0.45625

December 20,
2017

BulletRepay
existing loans

Fixed interest rate

March 25,
2013

1,000

1,000

0.45

March 26,2018

BulletRepay
existing loans

Fixed interest rate

The Hiroshima
Bank, Ltd.

October 1,
2014

3,000

3,000

0.31575*7October 1,
2019

BulletPurchasereal estate

Floating
interest rate
*7

Mizuho Trust& BankingCo., Ltd.

March 2,
2015

3,000

3,000

0.5585*7

March 3,2025

BulletPurchase realestate trust
beneficiaryrightsFloating
interest rate
*7

October 29,
2012

2,000

2,000

0.8

October 29,
2020

BulletRepay
existing loans

Fixed interest rate

March 25,
2013

1,000

1,000

0.945

March 24,
2023

BulletRepay
existing loans

Fixed interest rate

March 24,
2014

1,000

1,000

0.4105*7

March 25,
2019

BulletRepay
existing loans

November 17,
2014

1,000

1,000

0.316
*7

November 18,
2019

BulletRepay
existing loans

Nippon Life
Insurance
Company

March 1,
2011

2,000

2,000

1.465

March 1,
2018

BulletThe
Nishi-Nippon
City Bank, Ltd.

June 17,
2014

2,000

2,000

0.621
*7

December 17,
2021

BulletThe Yamanashi
Chuo Bank,Ltd.

December 15,
2014

2,000

2,000

0.266
*7

December 16,
2019

BulletRepay
existing loans

Floating
interest rate
*7

The Ashikaga
Bank, Ltd.

January 7,
2013

1,000

1,000

0.49125

January 9,
2018

BulletPurchasereal estate

Fixed interest rate

The JoyoBank, Ltd.

January 7,
2013

1,000

1,000

0.49125

January 9,
2018

BulletPurchasereal estate

Fixed interest rate

6,000

－

6,000

－
0.90875

June 23,2016

BulletRepay
existing loans

Fixed interest rate

Segment
Lender

The Hachijuni
Bank, Ltd.

Long-term loans

The Yamaguchi
Bank, Ltd.

The Gunma
Bank, Ltd.

Mitsubishi
UFJ Trustand Banking
Corporation
MizuhoBank, Ltd.
Sumitomo
Mitsui Trust
Bank, Limited
The Bank ofTokyoMitsubishi
UFJ, Ltd.
Total

July 23,
2011

6,000

－

6,000

－

271,900

284,650*1.

Purchase realestate trust
beneficiaryrightsRedeeminvestment
corporation
bonds

Floating
interest rate
*7
Floating
interest rate
*7
Fixed interest rate
Floating
interest rate
*7

The average for floating interest rates is recorded as the weighted average during the period. The average is rounded off to thefifth decimal place.
*2. As of May 12, 2015, ¥1,000 million has been repaid before the original maturity.
*3. As of April 7, 2015, the entire amount of ¥2,000 million has been repaid before the original maturity.
*4. As of May 12, 2015, ¥1,000 million and as of September 1, 2015, ¥2,500 million has been repaid before the original maturity.
*5. As of September 1, 2015, ¥2,000 million has been repaid before the original maturity.
*6. ¥50 million is repaid every six months respectively. ¥1,350 million is scheduled to be repaid on the final principal repayment date.
*7. In order to hedge the risk of interest rate fluctuations, floating interest rates were swapped to fixed rates. Accordingly, theweighted average for interest rates during the period is calculated taking the effect of this swap into consideration.
*8. In order to hedge the risk of exchange rate and interest rate fluctuations related to foreign currency-denominated loans, theCompany conducted an interest-rate and currency swap transaction, which substantially secured exchange and interest rates.
Accordingly, the weighted average for interest rates during the period is calculated taking the effect of this interest-rate andcurrency swap into consideration.
Note: All floating interest rate loans and fixed interest rate loans procured are unsecured, unguaranteed, and unsubordinated.
44

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(iii) Investment Corporation Bonds
Outstanding investment corporation bonds as of September 30, 2015, are as follows.

Securities

4th unsecured
investment
corporationbond
7th unsecured
investment
corporationbond
8th unsecured
investment
corporationbond
9th unsecured
investment
corporationbond

Date of Issue

Balance at
Beginning ofCurrent Period(¥ million)

Balance at
End of Current
Period(¥ million)

Interest
Rate(％)

Repayment
PeriodRepayment
MethodUse ofProceeds

Notes

September 29,
2005

10,00010,0002.56

September 29,
2025

Bullet*1*2

April 23,2010

10,000―1.26

April 23,2015

Bullet*1*2

July 23,2010

10,000―

1.05

July 23,2015

Bullet*1*2

August 30,
2013

10,00010,0000.497

August 30,
2018

Bullet*1*2

40,00020,000Total*1. The 4th and 8th unsecured investment corporation bonds are used to fund the repayment of existing short-term loans. The 7th
unsecured investment corporation bond is used to redeem existing investment corporation bonds.
The 9th unsecured investment corporation bond is used to fund the repayment of loans and acquire specified assets (“specified
assets” defined in Article 2, Paragraph 1 of the ITA).
*2. Financial covenants, such as a negative pledge, are not included in these bonds.

(iv) New Unit Acquisition Rights“Not applicable”

45

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

f. Examination of the Value of Specified Assets(i) Real Estate, etc.
Acquisition
Or
Disposition

Property Name

Acquisition/
Disposition Cost*1(¥ million)

Date ofTransaction

Real EstateAppraisal Value(¥ million)

Appraising
Institution

Date of
Appraisal

Daiwa RealMarch 1,Estate Appraisal
2015
Co., Ltd.
Daiwa Real
Shiodome
May 1,March1,
Acquisition
10,100
10,200Estate Appraisal
Building
2015
2015
Co., Ltd.
Daiwa Real
September 1,
August 1,
Acquisition
AER
18,64018,900Estate Appraisal
2015
2015
Co., Ltd.
*1. The “acquisition/disposition cost” refers to the amount listed in the sale and purchase contract, and does not include various
expenses necessary in the acquisition of the property such as trading intermediate fees.
*2. The appraisal value listed above is decided in accordance with the 3rd chapter of the Japanese Real Estate Appraisal Act and Real
Estate Appraisal Standards.
Acquisition

Umeda Square
Building

April 1,
2015

15,523

16,100(ii) Asset-backed securities, etc.
Acquisition
Or
Disposition

Date of Transaction

Type

TrusteeAcquisition /Disposition Cost(¥thousand)

Survey priceof
specific assets

Acquisition

July 1, 2015

Trust beneficiaryrights in deposits

Mitsubishi UFJ Trustand Banking Corporation

916,344916,344(iii) Other
Value inspections on transactions by the Company that are deemed necessary under article 201, item 2 of the ITA, are entrusted to Ernst& Young ShinNihon LLC.
Transactions that were subject to inspection during the period from April 1, 2015 to September 30, 2015, were 3 interest rate swap
transactions. This excludes transactions listed in the “(ii) Asset-backed securities, etc.” section above. The Company has received thevaluation reports on those transactions from Ernst & Young ShinNihon LLC.
Please note that on the occasion of such investigations, the Company entrusts the investigation of all relevant details of the interest
rate swap transactions, such as names of counter parties, securities, agreed interest rates, types of financial instruments or reference
interest rates and the tenor of transactions.
g. Transactions with Interested Parties (from April 1, 2015 to September 30, 2015)(i) Transactions
Buying and Selling Amounts
Segment

Total Amount

Buying Amounts

Selling Amounts¥44,263,520 thousand¥ - thousand

Breakdown of Transactions with Interested Parties
Shiodome Investment LLC¥ 10,100,000 thousand(22.8%)¥ - thousand

(-%)

Total

¥ 10,100,000 thousand(22.8%)¥ - thousand(-%)* The numerical values within the ( ) represent a percentage of the total buying/selling amounts.

46

JAPAN REAL ESTATE INVESTMENT CORPORATION（8952）(ii) Amount of Commission Fees and Other Expenses
Segment

Property
management
expenses

Total Amount ofCommission Fees andOther Expenses A¥3,549,250

thousandBreakdown of Transactions with Interested Parties
Payment Recipient

Other
operatingexpenses¥2,869,139

thousand¥1,937,719

thousand(54.6%)

Mitsubishi Estate Co., Ltd.

¥249,159

thousand(7.0%)¥33,073

thousand(0.9%)¥30,041thousand(0.8%)¥26,336

thousand(0.7%)¥192

thousand(0.0%)¥96,958

thousand(3.4%)¥16,309

thousand(10.6%)¥904

thousand(0.6%)¥178

thousand(0.1%)¥45

thousand(0.0%)

Yuden Building Kanri Co.,Ltd.
Mitsubishi Real Estate
Services Co., Ltd. *2
Mitsubishi Jisho House Net
Co., Ltd. *2

Minato Mirai 21 District
Heating and Cooling Co.,Ltd.
Mitsubishi Jisho Property
Management Co., Ltd.
Mitsubishi Estate Co., Ltd.

¥154,520

thousand

B/A

Mitsubishi Jisho Property
Management Co., Ltd.

Shiodome Investment LLC
Utilities
expenses

Amount Paid B

Percentage of Total Amount

Mitsubishi Jisho Retail
Property Management Co.,Ltd.
Mitsubishi Real Estate
Services Co., Ltd. *2*1. Interested parties refers to interested parties of the asset management company who has concluded consignment agreements with
the Company, as stipulated in Article 123 of the enforcement order of the ITA, and Section 26, Paragraph 1, Item 27 of theRegulations for Management Reports Concerning Investment Trusts and Investment Corporations of the Investment Trusts
Association, Japan.
*2. As of July 1, 2015, Mitsubishi Jisho House Net Co., Ltd. split of a section of its housing business and integrated it into Mitsubishi
Real Estate Services Co., Ltd. In accordance with this, Mitsubishi Real Estate Services Co., Ltd. inherited the position ofleaseholder for master lease contracts for Nibanhco Garden and the residential section of the Akasaka Park Building on the samedate.
*3. In addition to the transactions and commission fees listed above, other amounts paid to interested parties, such as orders placed for
repair work, are listed below.
Mitsubishi Jisho Property Management Co., Ltd.
Mitsubishi Estate Co., Ltd.
Mitsubishi Real Estate Services Co., Ltd. *2
Mitsubishi Jisho House Net Co., Ltd. *2
Yuden Building Kanri Co., Ltd.
MEC Design International Corporation¥338,425¥126,208¥8,997¥7,933¥4,045¥651

h. Other Announcements“Not applicable”

47

thousandthousandthousandthousandthousandthousandJAPAN REAL ESTATE INVESTMENT CORPORATION（8952）

Selected Financial Data
Millions of yen
For the period from

For the period from

For the period from

For the period from

For the period from

April 1, 2015 to
September 30, 2015

October 1, 2014 toMarch 31, 2015

April 1, 2014 toSeptember 30, 2014

October 1, 2013 toMarch 31, 2014

April 1, 2013 to
September 30, 2013

Operating revenues

29,98028,314

27,76026,582

26,225

Operating expenses

17,926

17,071

16,50515,751

15,444

Operating income

12,054

11,243

11,255

10,831

10,781

Ordinary income

10,487

9,625

9,582

9,083

9,143

Income before income
taxes
Profit10,487

9,625

9,582

9,083

9,143

10,476

9,619

9,572

9,070

9,129

Total assets

899,938

852,679

813,931

817,130

775,066

Interest-bearing debt

373,450

361,000

323,550

358,900

320,150

Net assets

468,767

436,671436,622405,355

405,415

Unitholders’ capital

458,016

426,783

426,783

396,018

396,018

1,309,310

1,251,530

1,251,530

1,188,280

594,140

Net assets per unit (Yen)(Note1)
Cash distribution

358,026

348,909348,871

341,128

682,356

10,475

9,613

9,571

9,070

9,129

Dividend payout ratio

99.9%

99.9%

99.9%

99.9%

99.9%

Dividend per unit (Yen)

8,001

7,681

7,648

7,633

15,366

Net operating income(NOI)
Funds from operations(FFO)
Return on assets (ROA)(Note 2)

19,67018,412

18,105

17,481

17,205

16,80815,62915,455

14,71914,619

1.2%

1.2%

1.2%

1.1%

1.2%

(2.4% annualized)(2.3% annualized)(2.3% annualized)(2.3% annualized)(2.4% annualized)

2.2%

2.2%

2.2%

2.2%

2.3%

(4.5% annualized)(4.4% annualized)(4.4% annualized)(4. 5% annualized)(4.5% annualized)

EOP equity ratio(Note 4)
EOP interest-bearing
debt ratio on total assets(Note 5)
FFO multiple (Times)

52.1%

51.2%

53.6%

49.6%

52.3%

41.5%

42.3%

39.8%

43.9%

41.3%

21.5

22.6

22.9

20.9

23.4

Debt service coverage
ratio (Times) (Note 6)

12.1

10.8

10.5

9.6

9.5

Number of units

Return on equity (ROE)(Note 3)

Notes:1.
2.
3.

4.
5.
6.

The Company implemented a 2-for-1 split of each investment unit with an effective date of January 1, 2014. Net assets per unit iscalculated as if the split had occurred at the start of the fiscal period ended March 31, 2014.
ROA = Ordinary income ÷ Average of Total assets during the period
ROE = Profit ÷ Average of Net assets during the period(Annualized portion of the calculation given in Note 2 and Note 3 assumes a fiscal period of 183 days for the period ended
September 30, 2013, 182 days for the period ended March 31, 2014, 183 days for the period ended September 30, 2014, 182 days
for the period ended March 31, 2015 and 183 days for the period ended September 30, 2015.)
EOP equity ratio = (Net assets at the end of period ÷ Total assets at the end of period) × 100
EOP interest-bearing debt ratio on total assets = (Interest-bearing debt at the end of period ÷ Total assets at the end of period) ×100
Debt service coverage ratio = Profit before Interest, Taxes, Depreciation and Amortization ÷ Interest expenses

48