Japan Prime Realty Investment Corporation
Company Presentation

13th

Japan Prime Realty Investment Corporation(Securities Code: 8955 TSE)
URL: http://www.jpr-reit.co.jp/jpr_e/

Sep. 2008

Profile of Japan Prime Realty Investment Corporation

Profile Overview
TickerMarket Cap.
Asset Size (based on acquisition price）
Investment Target (type)
Investment Target (area)
Real Estate IndicesCredit Rating(as of August 29,
29, 2008): 8955 (Tokyo Stock Exchange): JPY 148.6 bn: JPY 282.3 bn: Office: 80%; Retail: 20%: Tokyo: 60%; Other Selected Cities: 40%: MSCI Japan Index, TSE REIT Index, GPR, EPRA/NAREIT: R&I: AA-; Moody’s: A2; S&P: A

Asset Management Company

Market Cap. of Major Diversified J-REITs

Tokyo Realty Investment Management (TRIM)
Sponsors (Shareholders of Asset Management Company)
Tokyo Tatemono (8804:TSE)
Meiji Yasuda Life

Real Estate
Insurance

26%
24%(JPY bn)
160

149

149

(as of August 29,
29, 2008)

151
135

140
120

98

100

93
80

80

Taisei Corp. (1801:TSE)

Construction

20%

60

Yasuda Real Estate

Real Estate

20%

40

Sompo Japan Insurance(8755:TSE)

Insurance

10%

57

55

NCI

MHR

63

62

PIC

TOP

58

20

JPR

OJR

MTR

TRE

KRI

UUR

JER

Top Ranked Diversified J-REIT with Strong Sponsor Capability

FKR

2Financial Results and Forcast
9th Period

10th Period

11th Period

12th Period

13th Period

Operating revenues

8,588

9,088

10,056

10,44910,83011,195

Operating profits

4,024

4,373

5,108

5,006

5,280

5,474

Net income

3,449

3,642

4,372

4,169

4,451

4,375

DPU (JPY)

6,509

6,873

6,996

6,671

7,122

7,000

FFO

5,010

5,222

5,524

5,978

6,269

6,194

FFO per unit (JPY)

9,453

9,853

8,839

9,566

10,031

9,911

Total units outstanding (Units)

530,000

530,000

625,000

625,000

625,000

625,000

LTV (%)

45.8%

48.7%

37.2%

38.9%

44.1%

45.9%

Total assets

231,523

244,691

271,398

278,842

303,459

-

44

46

48

49

50

53

97.7%

98.3%

99.0%

98.7

98.0%

97.1

(JPY mn)

Number of properties
Average occupancy rate (%)

14th PeriodEnding Dec. 2008
Ended June 2006 Ended Dec. 2006 Ended June 2007 Ended Dec. 2007 Ended June 2008
(E)

13th Fiscal Period (1st half 2008) Results

14th Fiscal Period (2nd half 2008) Forecast (as of Aug. 2008)

9Achieved DPU of JPY 7,000 for the first time
9Contribution of 2 properties newly acquired in the 13th Fiscal
Period9Contribution of 3 properties newly acquired in the 14th
Fiscal Period-Shinjuku Center Bldg. (JPY 21.0 bn) and Shinjuku Sanchome East
Bldg.(JPY 2.2 bn)

9Achieving higher rents with existing and new tenants
9Maintaining high occupancy rate through the period-Minami Azabu Bldg. (JPY 3.76 bn.), Yurakucho Ekimae Bldg. (JPY
3.4 bn.) and Shinagawa Canal Bldg.(1.87 bn., planned)

9Assuming LTV ratio is at 45.9% at the end of the period
9Total units outstanding is based on 625,000 units.

Net Income Expected to Drop Mainly Due to Absence of Cancellation Penalty____________________
Note: FFO = Net Income + Depreciation and Amortization – Capital Gains (Losses) from Disposal of Properties
DPU and FFO per unit are calculated using the number of units outstanding as of the end of each fiscal period.
LTV = Interest Bearing Debt ÷ (Interest Bearing Debt + Unitholders’ Capital) × 100

3

JPR’s Market Recognition History
More than JPY 150 bin. In Market Cap. through Internal and External Growth(as of August 29, 2008)(Unit Price)(JPY)
600,000

IPO
June 14, 2002
182,000 units(Market Cap)(JPY bn)

3rd AddAdd-on Offering
Feb. 7, 2007
95,000 units

2nd AddAdd-on Offering
Feb. 2, 2005
100,000 units

500

450

May 13, 2005
MSCI Japan Index

500,000

400

Add-on Offering Price:
JPY 449,820 (2007)

300,000

200,000

350

AddAdd-on Offering
July 15, 2003
144,400 units

400,000

300

Add-on Offering Price:
JPY 272,440 (2005)

250

Add-on Offering Price:
JPY 237,160 (2003)

200

IPO Offering Price:
JPY 200,000 (2002)

150

100
100,00050

00

Jun.02

Dec.02

Jun.03

Dec.03

Jun.04

Dec.04

Jun.05

Dec.05

Jun.06

Dec.06

Jun.07

Dec.07

Jun.084

From Expansion of Portfolio Size to Quality Improvement
Current Target: Achieved 300 Billion Yen on a Contracted Basis and Shift
Focus to Quality Improvement
The portfolio size on a contracted basis as ofthe end of July 2008 totaling 308.4 billion yen(55 properties) (Note 1)

Portfolio Size

(Acquisition price basis)

JPY 300 bn

50 properties
JPY 275.1 bn
49 properties
48 propertiesJPY 251.9 bn
JPY 245.3 bn
Office (Tokyo
CBDs and46 properties
Greater
JPY
222.4
bn
Tokyo)
44 properties

42 properties
JPY 179.6 bn
38 properties
JPY 163.6 bn
32 properties
30 propertiesJPY 139.6 bn
JPY 125.7 bn(42.1)(14.0)

June
02年2002
6月 期

Dec.12月
2002
02年
期

Office(Other Cities)(17.6)(26.4)

June
2003
03年 6月期(17.1)(15.7)(20.4)(29.3)(26.7)(42.0)(14.4)(47.9)(50.8)(22.3)(31.6)(43.5)(49.4)(42.0)(31.4)(45.6)(45.0)(41.2)

Compositio(44.0)
n ratio(%)(49.3)(44.1)(50.2)(47.3)

25 properties 27 properties
JPY 92.1 bn JPY 94.5 bn

42 properties
JPY 209.2 bn
42 properties
JPY 202.6 bn
JPY 197.6 bn(27.4)(23.4)(22.5)

Dec.12月
2003
03年
期

June
2004
04年 6月期

Dec.
2004
04年
12月
期

(21.6)(24.5)

RetailFacilities(25.3)(28.3)

June
2005
05年 6月期

Dec.12月
2005
05年
期(30.5)(38.3)(37.3)(35.0)

June
2007
07年6月
期

Dec.12月
2007
07年
期

June
2008
08年 6月期(34.6)

June
20076
Dec.
2006
06年 6月
12月
期 06年
期

After acquiring
all properties(excluding
preferred
securities)

Total properties sold: 8
properties totaling JPY 14.4 bn____________________*JPR listed on June 14, 2002. All amounts are acquisition prices (excluding preferred securities) rounded down to 100 million yen. The composition ratio has been rounded to the first decimal place.
(Note 1) The figure includes Minami Azabu Building that was already acquired, Yurakucho Ekimae Building (Yurakucho Itocia), Shinagawa Canal Building, KM Fukugo Bldg. (tentative name)and Sendagaya Yonchome Building (tentative name), all of which are to be acquired, and excludes Meieki Nichome Kaihatsu SPC Preferred Securities.

5Acquisition 1３th Fiscal Period and After (Planned)
Acquisitions Centered on Blue-chip Properties in Tokyo CBDs in the 13th Fiscal Period and After
Shinjuku Center
Building

Shinjuku Sanchome
East Bldg.

Minami Azabu Building

Yurakucho Ekimae Building(Yurakucho Itocia)
Itocia)OfficeRetailOfficeRetailType of UseAcquisition Date(planned)

March 2008
(Acquired)

April 2008
(Acquired)

July 2008(Acquired)

August 2008
(Acquired)Acquisition Price(planned)

JPY 21.0 bn

JPY 2.2 bn

JPY 3.76 bn

JPY 3.4 bn

Appraisal Value

JPY 20.9 bn

JPY 2.0 bn

JPY 3.76 bn

JPY 3.4 bn

Shinjuku-ku, Tokyo

Shinjuku-ku, Tokyo

Minato-ku, Tokyo

Chiyoda-ku, Tokyo

Co-ownership (40%)

Ownership and leasehold

Ownership

Co-ownership (1.9%)

Unit ownership (Note 1)

Unit ownership (Note 2)

Ownership

Co-ownership ofunit ownership (4.3%)(at acquisition or contract)

Location

Ownership

Land
Bldg.



Expected NOI

3.8%

3.7%

4.1%

3.4%



Seller (planned)

Asahi Mutual Life Insurance Co.

D&M Holdings Inc.

East3 SPC

Taisei Corporation(SPC operated by Tokyo Tatemono)____________________(Note 1) The ownership equals 8.6% of the entire building.
(Note 2) When combined with the portion acquired in March 2007, the total acquisition price is JPY 2.74 bn and JPR's unit ownership equals 21.01% of the entire unit ownership.

6

Acquisition in 14th Fiscal Period and After (Planned)
Invest in Blue-chip Development Properties while Reducing Development Risks
Shinagawa Canal
Building

KM Fukugo Bldg.
(tentative name)

Sendagaya Yonchome
Building (tentative name)

Meieki Nichome Kaihatsu
SPC Preferred Securities

OfficeRetailOfficeOfficeType of UseAcquisition Date(planned)

December 2008

March 2009(contracted in October 2007)(contracted in March 2007)

May 2010(contracted in June 2008)(1) November 2007 (acquired) /(2) May 2009 (Note 2) / (3) April 2010 (Note 2)Acquisition Price(planned)

JPY 1.87 bn

JPY 9.25 bn

JPY 15.05 bn (Note 1)(1) JPY 0.34 bn /(2) JPY 1.643 bn / (3) TBDAppraisal Value

JPY 1.89 bn

JPY 9.27 bn

JPY 15.1 bn

Minato-ku, Tokyo

Osaka-shi, Osaka

Shibuya-ku, Tokyo

Nagoya-shi, Aichi

Co-ownership (45.6%)

Ownership (21.42%)

Ownership

Unit ownership

Unit ownership

Ownership

Preferred equity ratio(acquired and planned ) [total 40%]1) 3% / (2) 12% / (3) 25%(ratio after additional preferred equity
planned for April 2009)(at acquisition or contract)

Location

Ownership

Land
Bldg.

JPY 33.7 bn (Note 3)Expected NOI

4.8% (appraisal cap rate)

4.3% (appraisal cap rate)

4.0%

−



Seller (planned)

Tokyo Tatemono Co., Ltd.

Sanyo Homes Co., Ltd.,
Haseko Corporation and 8other companies

Sendagaya Kaihatsu Tokutei
Mokuteki Kaisha (SPC operatedby Tokyo Tatemono)(1) and (2): Shimizu Corporation /(3) Marubeni Corporation____________________(Note 1) The acquisition price may be changed up to JPN 16.5 bn following a certain calculation method if the profitability of the property improves as a result of tenant solicitation by the seller. (Note 2) The preferred securities of
Meieki Nichome Kaihatsu SPC are to be acquired in three steps. (1) JPR already acquired the 3% equity in November 2007. (2) JPR concluded purchase agreements for the 12% equity and (3) the 25% equity in November 2007.
The (2) and (3) portions will be acquired in May 2009 and April 2010, respectively. (Note 3) The figure is the appraisal value of the real estate that backs the preferred securities of Meieki Nichome Kaihatsu SPC.

7

Establishing the Core Portfolio and Diversifying Risks
Focus on Investing in Office Buildings in Tokyo where Stability and Growth are Expected,
while Considering Risk Diversification
Portfolio Diversification as of the End of June 2008
(on a acquisition price basis)

Geographic Diversification (as of the ends of Dec 2007 and Jun 2008)
Sapporo, Sendai andOther cities
Fukuoka
2.1%
7.4%
Osaka and Nagoya
21.8%

Sapporo1 property JPY 3.7 bn

Naha

Niigata

Sendai1 property JPY 2.1 bn

2 properties JPY 7.4 bn

Osaka and Nagoya
20.0%Tokyo CBDs
37.7%

Greater Tokyo
30.9%

1 property JPY 1.6 bn

Sapporo, Sendai andOther cities
Fukuoka
2.0%
6.8%

Tokyo: 68.6%

Tokyo: 71.3%

Property Type Diversification (as of the ends of Dec 2007 and Jun 2008)

Retail
35.0%

Retail
37.3%

Osaka

Greater Tokyo
28.3%

Tokyo CBDs
43.0%

7 properties JPY 46.2 bn

Office62.7%

Fukuoka
3 properties JPY 7.6 bn

Tokyo CBDs and Greater Tokyo
３2 properties JPY 196.1 bn

Office65.0%

Tenant Diversification (as of the ends of Dec 2007 and Jun 2008)

NagoyaTop 5 tenants
21.1%

2 properties JPY 8.7 bn

Wakayama
1 property JPY 1.7 bn

Tokyo CBDs and Greater Tokyo: 71.3%
Tokyo, Osaka and Nagoya: 91.3%
Other tenants
67.8%

6th - 10th lartest
tenants
11.1%

Top 5 tenants
24.8%

Other tenants
64.7%

6th - 10th largest
tenants
10.5%*The figures have been rounded to JPY 100 million, and prepared based on JPR's portfolio (acquisition price) as of ends of Dec 2007 and Jun 2008, excluding Minami Azabu Building that was alreadyacquired, Yurakucho Ekimae Building (Yurakucho Itocia), Shinagawa Canal Building, KM Fukugo Bldg. (tentative name) ,Sendagaya Yonchome Building (tentative name) and Meieki Nichome
Kaihatsu SPC Preferred Securities, all of which are to be acquired.

8

Promote Upward Revisions of Rents
Results of Upward Revisions of Rents by Fiscal Period

Internal Growth through Promoting Rent Revisions Contributes to Expanded Revenues and Profits
Offices covered are only those located in Tokyo CBDs and Greater Tokyo
Fiscal Period

Timing of Rent Increase

Revised Total No. ofContracts Contracts%

11th fiscal period
contribution by revisions
12th fiscal period
contribution by revisions
13th fiscal period
contribution by revisions

11th fiscal period (Jun 2007 period) or
before

56

297

18.9%

12th fiscal period (Dec 2007 period)

35

328

10.7%

13th fiscal period (Jun 2008 period)

60

364

16.5%

14th fiscal period
contribution by revisions

14th fiscal period (Dec 2008 period)(fixed portion)
15th fiscal period (Jun 2009) period orafter (fixed portion)

12

364

3.3%

9

364

2.5%

172

364

15th fiscal period
contribution by revisions

Total

Contribution to Profit Increase (1,000 yen)
11th fiscal
period

46,601

12th fiscal
period13th fiscal
period14th fiscal
period15th fiscal
period76,124

76,124

76,124

76,124

45,11783,88383,88383,88335,87878,14378,14330,212

34,363
2,076

47.3%

46,601

121,241

195,885

268,363274,590

vs. 10th fiscal
period results

1.6%

4.2%

6.8%

9.3%

9.5%

274,590•Upward revisions continued at the same level as the 11th and12th fiscal periods due to continued compensations for upwardrevisions and establishment of detailed upward revision targets【13th Period results】
results】
Upward revisions: approx. JPY 16 mn per month withrevision rate of about 26% maximum
Average revision rate: 11.1%

268,363

2,076

30,212

34,36378,14378,14383,88383,88383,88376,124

76,124

76,124

76,12412th fiscal
period13th fiscal
period14th fiscal
period15th fiscal
period195,885
35,878121,241

Contribution volume to increases in NOI will further expand in
the 14th fiscal period and after

45,11746,601*1. The revision results are accumulated numbers on a contract basis.
basis.
*2. The numbers of contracts are those at the ends of the 11th, 12th and 13th fiscal periods, while
using the figure at the end of the 13th fiscal period for the 14th
14th and 15th fiscal periods forconvenience.
*3. Offices covered are only those located in Tokyo or Greater Tokyo.
Tokyo.
*4. Contributions to increased revenues and the ratios of rents over the 10th fiscal period have been
calculated solely based on rents excluding common expenses.
*5. Figures for the 14th and 15th fiscal periods are revisions thatthat were already agreed on as of theend of December 2008.

46,601

11th fiscal
period11th fiscal period contribution by revisions
13th fiscal period contribution by revisions
15th fiscal period contribution by revisions

12th fiscal period contribution by revisions
14th fiscal period contribution by revisions

9Increases in Rent Revenues and Changes in Occupancy Rates
Changes in Rent Revenues (from properties owned at end of each fiscal period)

Rent Revenues Tend to Increase since 8th Fiscal Period (Dec 2005 Period) due to Rent
Revisions, Leasing Activities and Other Efforts
106.2%
105.6%
105.0%

104.7%
103.8%

103.5%

101.9%
101.2%

100.0%
8th Fis cal
Period100.0%
9th Fis cal
Period102.5%

102.4%

102.2%

100.0%

103.2%

100.0%
10th Fis cal
Period101.0%
100.0%
11th Fis cal
Period101.4%
100.9%

100.8%
100.0%
12th Fis cal
Period13th Fis cal
PeriodGrowth rate of properties owned at end of 7th fis cal period
Growth rate of properties owned at end of 8th fis cal period
Growth rate of properties owned at end of 9th fis cal period____________________(Note) Changes in rent revenues areshown in indices for all properties owned at
the end of each fiscal period excluding soldproperties, with the rent revenues of theprevious fiscal period set at 100.

Growth rate of properties owned at end of 10th fis cal period
Growth rate of properties owned at end of 11th fis cal period

Changes in Occupancy Rate by Type of Use and by Region

Occupancy of Entire Portfolio Remains Stable at High Level Since 8th Fiscal Period(Dec 2005 Period)
100.0%

97.2%

98.0%

98.6%

99.0%

98.4%

97.5%

95.0%

90.0%

85.0%

80.0%
8th Fiscal Period
Overall

9th Fiscal Period 10th Fiscal Period 11th Fiscal Period 12th Fiscal Period 13th Fiscal Period
Office (Tokyo CBDs)

Office (Greater Tokyo)

Office (Other Cities)

Retail____________________(Note) Figures in the graph are solely theoccupancy rates of the entire portfolio.

10Changes in LTV Ratio
LTV Ratio is Controlled Between 30% and 50%
Portfolio Size and LTV Ratio

Total Unitholders’ Capital and LTV Ratio(JPY bn)

Total unitholders’ capital (left axis)

LTV ratio (right axis)

60%

2,000
200

Acquisition value
after end of Dec 2006
(after deducting
sold properties)

Portfolio size (acquisition price basis)(JPY bn)

3,000
300

54.9
51.1
46.4

1,500
150

275.1
JPY 156.7 bn
45.8 48.7
44.1

44.1
38.9 40%

42.0

39.4
40.6

JPY 115.4 bn

251.9
245.3

2,500
250
Portfolio size

222.4

37.2

37.1
1,000
100

50%
527

229

295

End of Jun
2007
37.2%

End of Dec
2007
38.9%

30%

JPY 89.1 bn

2,000
200
20%

JPY 56.9 bn

500
50
10%

1,500
150

00

Jun/Dec
2002

Jun/Dec
2003

Jun/Dec
2004

Jun/Dec
2005

Jun/Dec
2006

Jun/Dec2007

Jun 0%
2008

End of Dec
2006
48.7%
LTV ratio (*1)

End of Jun
2008
44.1%

At end of Jun 2008

zAdditionally issued 95,000 investment units in February 2007, leading to LTV ratio of 37.2%
at end of Jun 2007
zLTV ratio rose to 44.1% at end of Jun 2006 due to external growth achieved afterwards

Ratio of interest-bearing liabilities
to total assets (*2)

: 40.7%

Ratio of interest-bearing liabilities
to total assets at market value (*3)

: 34.5%zAll key monies and deposits are reserved in cash as of end of Jun 2008____________________（*1) LTV ratio (interest-bearing liabilities ratio) = interest-bearing liabilities/(interest-bearing liabilities + total unitholders' capital) x 100(*2) Ratio of interest-bearing liabilities to total assets = interest-bearing liabilities/total assets at end of period x 100(*3) Ratio of interest-bearing liabilities to total assets at market value = interest-bearing liabilities/(total assets at end of period + real estate valuation losses or gains) x 100

11

Diversify Source of Debt and Systematically Distribute Maturities
Diversified Fund Procurement Pipelines

Use Diversified Procurement Methods
Corporate Bonds Issued

Status of Lenders<The sole issuance of corporate bonds (excluding CPs) among J-REITs in the first half of 2008>
Name

Issue Date

Balance at End of
13th Fiscal Period(JPY mn)

Interest
Rate

Term(years)Redemption DateFirst Series of Unsecured Bonds

February 12, 2004

−

0.84％

4

Febuary 12, 2008

Second Series of Unsecured Bonds

February 12, 2004

7,000

1.38％

6

February 12, 2010

Third Series of Unsecured Bonds

February 12, 2004

5,000

2.32％

10

February 12, 2014

Fourth Series of Unsecured Bonds

November 4, 2004

10,0000.92％

5November 4, 2009

Fifth Series of Unsecured Bonds

November 4, 2004

5,000

1.44％

7

November 4, 2011

November 4, 2004

5,000

2.00％

10

November 4, 2014(as of end of July 2008)
Remarks

City banks

4

The Mizuho Corporate Bank, The Bank of TokyoMitsubishi UFJ, Resona Bank and Sumitomo Mitsui
Banking Corporation

Regional banks

4

Fukuoka Bank, The Chugoku Bank, The Hachijuni
Bank and The Iyo Bank

Trust banks

1

Mitsubishi UFJ Trust and Banking

Life and non-life insurancecompanies

5

Meiji Yasuda Life Insurance, Sumitomo Life
Insurance, Taiyo Life Insurance, Daido Life
Insurance and Sompo Japan Insurance

Other financial institutions

3

National Mutual Insurance Federation of Agricultural
Cooperatives, Shinsei Bank and Aozora Bank

Unsecured
Unguaranteed

Sixth Series of Unsecured Bonds
Seventh Series of Unsecured Bonds

December 14, 2006

4,500

2.90％

20

Eighth Series of Unsecured Bonds

December 14, 2026

July 23, 2007

9,000

1.85％

5

July 23, 2012

Ninth Series of Unsecured Bonds

July 23, 2007

6,000

2.10％

7

Jul;y 23, 2014

Tenth Series of Unsecured Bonds

May 30, 2008

3,000

1.71％

3

May 30, 2011

Flatten Refinance Amounts throughMaturity Diversification

Achieved High Credit Ratings among J-REITs
Current Ratings

Debt Maturity Ladder
250

IssuerR&I

AA-

Outlook(as of end of July 2008)(JPY 100 mn)

Ratio of long-term, fixed interest
debt: 85.3%

Total commitment line: JPY 20 bn

200

Stable150

Stable100Long-term interest-bearing debt
Average maturity: 4.3 years
Average interest rate: 1.7%

39

30
69

Corporate bonds

Moody's

Ａ２

147

147

S&P

Ａ２

Stable

50

100
78

70

90

50

60

60

Jun/Dec
2010

Jun/Dec
2011

80Long-term debt
Short-term debt

110
50

54

40

50

50

45

0
Dec Jun/Dec
2008
2009

Jun/Dec2012

Jun/Dec Jun/Dec Jun
20132014 2015

Dec
2026

(fiscalperiod))12

Future Investment and Management Policy
Investment
Subject

Area

Investment
MethodFocus on investment in offices by utilizing coordination with sponsors

Focus investment in Tokyo metropolitan area where increases
in rents are expected

Discern the market conditions and strictly select excellent,
operating properties as investment subject

Improve the portfolio quality throughreplacing properties and other measures
Rent

Occupancy

Continue to raise rents in an effort to increase revenues

Aim
Aimto
toachieve
achieve
growth
growthafter
afterrealizing
realizing
dividend
dividendper
perunit
unit
of
of
7,000
7,000yenyen(equivalent(equivalentto
to17,50017,500yenyen
perperunitunit
beforebeforesplitting
splittinginvestment
investmentunits)
units)

Maintain the occupancy rate at its current almost full occupancy

13

13th

Appendix
1. Financial Summary
2. Property Portfolio Summary
3. Overview of TRIM

13th

1.Financial Summary

15

Blance Sheet as of the End of the 13th Fiscal Period
Acquired Large Property Mainly through Long-term Borrowings
Total current assets
Cash and bank deposits
Entrusted cash and deposits
Other current assets
Total fixed assets
Property and equipment

Real estate
Buildings and structures
Land
Entrusted real estate
Buildings and structures
Land
Total intangible assets
Leasehold right
Other intangible assets
Total investments and other assets

Investment securities
Deposits
Long-term prepaid expenses
Total deferred assets
Corporate bond issuance costs

Total assets
Total current liabilities

As of June 30, 2008
Amount%33,958 11.2%
18,461
6.1%
15,126
5.0%
369
0.1%
269,365 88.8%
267,450 88.1%
83,062 27.4%
26,5198.7%
56,542 18.6%
184,388 60.8%
67,260 22.2%
117,128 38.6%
1,552
0.5%
1,542
0.5%
9
0.0%
362
0.1%
344
0.1%
17
0.0%
0
0.0%
135
0.0%
135
0.0%
303,459 100.0%

As of Dec. 31, 2007
Amount%31,87411.4%
16,307
5.8%
14,990
5.4%
576
0.2%
246,84488.5%
246,478
88.4%
61,27022.0%
24,6708.8%
36,60013.1%
185,207
66.4%
68,07924.4%
117,128
42.0%
10
0.0%
−
−
10
0.0%
355
0.1%
344
0.1%
10
0.0%
0
0.0%
122
0.0%
122
0.0%
278,842 100.0%(JPY mn)
ChangeAmount
%
2,083
6.5%
2,154
13.2%
136
0.9%
-207
-36.0%
22,521
9.1%
20,972
8.5%
21,791
35.6%
1,849
7.5%
19,941
54.5%
-819
-0.4%
-819
-1.2%
−
−
1,542 14872.8%
−
1,542
-0
-7.4%
6
1.9%
−
−
6
68.3%
−
−
13
10.7%
13
10.7%
24,617
8.8%(JPY mn)
1. Balance of interest-bearing debt
Total
(Breakdown) Unsecured borrowings
Secured borrowings
Unsecured corporate bonds
2. Interest-bearing debt ratio etc.

4.7%
0.8%
0.4%
−
−
3.6%
37.5%
5.4%
13.7%
18.5%
42.3%

5,123
303
28
14,792−-10,000
19,212212
16,0003,000
24,336

38.7%
14.5%
2.5%
−
−
-100.0%
18.3%
1.4%
41.9%
5.8%
20.6%

3. Commitment line status

Long-term borrowings
Corporate bonds
Total liabilities

13,242
2,101
1,140
−
−
10,000104,704
15,021
38,18351,500117,946

Unitholders' capital
Retained earnings
Total unitholders' equity

156,725
4,451
161,177

51.6%
1.5%
53.1%

156,725
4,169
160,895

56.2%
1.5%
57.7%

−
281
281

−
6.8%
0.2%

4. Investment units status

278,842 100.0%

24,617

8.8%

Current portion of long-term borrowings
Current portion of corporate bonds

Total long-term liabilities
Deposits received from tenants

Total liabilities and unitholders' equity

303,459 100.0%

99,68329,0009,183
61,50023,79230,792−-7,000End of 13th End of 12th Variation (P)Fiscal Period Fiscal Period(3) Ratio of long-term fixed-rate borrowings
Long-term fixed-rate interest-bearing debt (*) / Interest-bearing debt
88.0%
90.0%
-1.9
*Total amount of long-term fixed-rate debt with over 1 year to maturity

6.1%
0.8%
0.4%
4.9%
−
−
40.8%
5.0%
17.9%
18.0%
46.9%

Rent received in advance
Short-term borrowings

123,475
59,792
9,183
54,500

Variation(1) Interest-bearing debt ratio
Interest-bearing debt / (Interest-bearing debt + Unitholders' capital)
44.1%
38.9%
5.2
(2) Interest-bearing debt to total assets① Interest-bearing debt / Total assets at end of period
40.7%
35.7%
4.9
② Interest-bearing debt / (Total assets at end of period + Gains or losses
from real estate valuation)
34.5%
29.9%
4.5

18,366
2,405
1,168
14,792−−
123,916
15,23354,18354,500142,282

Accounts payable and accrued expenses

End of 13th End of 12th
Fiscal Period Fiscal Period

End of 13th End of 12th
Fiscal Period Fiscal Period

Variation−
20,00020,000① Credit limit (total)−−−② Outstanding debt at the end of the per③ Unused commitment line at the end of the period−
20,00020,000④ Lenders (as of the end of the period)
Mizuho Corporate Bank, The Bank of Tokyo-Mitsubishi UFJ,
Resona Bank, Mitsubishi UFJ Trust and Banking, Shinsei Bank
* Agreements have been concluded separately with respective banks
listed above.
End of 13th End of 12th
Fiscal Period Fiscal Period① Total number of units issued and outstanding (units)
625,000 625,000② Total unitholders' equity per unit (yen) 257,883 257,432

Variation−451

Note: Figures were rounded off to a million yen

16Income Statement for the 13th Fiscal Period
DPU Increased by about 7% by Acquiring New Properties

Rental revenues
Other rental revenues
Real estate rental revenues ①
Gain on sale of real estate
Dividends income

12th Fiscal Period
Jul. 1, 2007 – Dec. 31, 2007

Amount%10,002
92.3%
828
7.7%
10,830 100.0%−−−−

Amount9,662
752
10,415
−
34

%
92.5%
7.2%
99.7%
−
0.3%

ChangeAmount
%
339
3.5%
76
10.2%
415
4.0%
−
−
-34 -100.0%

Operating revenues

10,830100.0%

10,449100.0%

381

3.6%

Property and other taxes
Other rental expenses
Outsourcing expenses
Utilities expenses
Casualty insurance
Repairs and maintenance
Property management fees

859
2,231
498
662
33
265
219
457
95
1,818
4,909
416
66
6
55
95
5,550

7.9%
20.6%
4.6%
6.1%
0.3%
2.4%
2.0%
4.2%
0.9%
16.8%
45.3%
3.8%
0.6%
0.1%
0.5%
0.9%
51.2%

764
2,242
477
740
35
251
207
461
69
1,809
4,816
400
69
6
55
94
5,443

7.3%
21.5%
4.6%
7.1%
0.3%
2.4%
2.0%
4.4%
0.7%
17.3%
46.1%
3.8%
0.7%
0.1%
0.5%
0.9%
52.1%

95
-11
20
-78
-1
13
12
-3
25
8
93
15
-2
0
-0
0
106

12.5%
-0.5%
4.4%
-10.5%
-4.8%
5.4%
6.0%
-0.8%
36.3%
0.5%
1.9%
3.9%
-4.1%
4.8%
-0.2%
0.7%
2.0%

Operating profits

5,280

48.8%

5,006

47.9%

274

5.5%

Profits (①-②)

5,921
7,739
99
928
897
16
9
−
4
4,452

54.7%
71.5%
0.9%
8.6%
8.3%
0.1%
0.1%
−
0.0%
41.1%

5,598
7,407
18
854
809
16
8
−
20
4,170

53.6%
70.9%
0.2%
8.2%
7.7%
0.2%
0.1%
−
0.2%
39.9%

322
331
81
73
88
-0
1
−
-15
281

5.8%
4.5%
433.5%
8.6%
10.9%
-0.9%
18.8%
−
-77.3%
6.8%

Income before income taxes

4,452

41.1%

4,170

39.9%

281

6.8%

Net income

4,451

41.1%

4,169

39.9%

281

6.8%

Retained earnings at the end of period

4,451

41.1%

4,169

39.9%

281

6.8%

Distribution per unit (JPY)7,122Management association accounts

経
常
損
益
の
部

13th Fiscal Period
Jan. 1, 2008 – June 30, 2008

Other
Depreciation
Real estate rental expenses ②
Asset management fees
Adm. service/custodian fees
Director’s remuneration
Trust fees
Other operating expenses
Operating expenses

Net operating income (NOI)
Non-operating revenues
Non-operating expenses
Interest expenses (including corporate bonds)

Loan arrangement fees
Amortization of corporate bond issuance costs

New unit-issuance costs
Other non-operating expenses
Recurring profits

Note: Figures were rounded off to a million yen

6,671

451

1.
1. Rental
Rental businessbusiness income
income**Whole-period
Whole-period contribution
contribution ofof11 property
propertyacquiredacquired inin 12th12thfiscal
fiscal period
period+9+9 mn
mn yenyen** In-period
In-period rental
rental ofof 22 properties
properties acquired
acquired inin 13th
13th
fiscalfiscal period
period+269+269 mn
mn yenyen** Improved
Improved profitability
profitabilityofof existing
existing properties
properties+61+61 mnmn yenyen

2.
2. Additional
Additional use
use fees/utilities
fees/utilities** Revenue
Revenue from
fromCancellation
Cancellation Penalty:
Penalty: +186
+186 mn
mn yenyen

3.
3. Incidental
Incidental income/utilities
income/utilities expenses
expenses** Incidental
Incidental income:income: -110
-110 mn
mn yenyen** Utilities
Utilities expenses:
expenses: -78-78 mnmn yenyen(Seasonal(Seasonal changechange on
onbothboth sides
sides ofofrevenue
revenue andand
expense)expense)4.
4. Non-operating
Non-operating profits
profits andand losses
losses(1)(1)Non-operating
Non-operatingprofits
profits** Income
Income fromfrom settlement
settlement ofof management
management
accounts+80
accounts+80 mnmn yenyen(2)(2) Non-operating
Non-operating expenses
expenses** Paid+88
Paid interest
interest+88 mnmn yenyen(Increase(Increase fromfrom acquiring
acquiringproperties
properties andandrefinancing
refinancingto
to long-termlong-term andand fixed
fixed rate
rate debt)
debt)(Reference)
In January 2002 (before IPO) investment units (500,000 yen a unit)
were split into 2.5 units (200,000 yen a unit) to make investment units
easier to invest in. Therefore, the distribution per unit based on the
pre-split level would be 16,670 yen.

17

Forecast for the 14th Fiscal Period
Forecasts for the 14th Fiscal Period
July 1, 2008 – December 31, 2008
50 properties asof the end of 13th
Fiscal Period

Rental revenues
Other rental revenues
Real estate rental revenues ①
Gain on sale of real estate
Dividends income
Operating revenues
Property and other taxes
Other rental expenses
Outsourcing expenses
Utilities expenses
Casualty insurance
Repairs and maintenance
Property management fees
Management association accounts

Other
Depreciation
Real estate rental expenses ②
Loss on sale of real estate
Asset management fees
Adm. service/custodian fees
Director’s remuneration
Trust fees
Other operating expenses
Operating expenses
Operating profits
Profits (①-②)
Net operating income (NOI)
Non-operating revenues
Non-operating expenses
Recurring profits
Income before income taxes
Net income
Retained earnings at the end of period
Distribution per unit (JPY)Minami Azabu
Building

10,292755
11,047−−
11,047
854
2,312
527
770
34
221
216
455
87
1,792
4,959
−

6,087
7,880

60
79

Yurakucho
Ekimae Building Shinagawa Canal(Yurakucho
Building
Itocia)

35
41

-1
0

Change from the 13th
Fiscal Period Results
Total

%

Amount%10,429 93.2%
766
6.8%
11,195 100.0%−−−−
11,195 100.0%854
7.6%
2,338 20.9%
534
4.8%
781
7.0%
35
0.3%
223
2.0%
220
2.0%
455
4.1%
87
0.8%
1,819 16.3%
5,012 44.8%
−
−
419
3.7%
72
0.6%
6
0.1%
55
0.5%
153
1.4%
5,720 51.1%
5,474 48.9%
6,182 55.2%
8,002 71.5%
24
0.2%
1,122 10.0%
4,376 39.1%
4,376 39.1%
4,375 39.1%
4,375 39.1%

427
-62
364
−
−
364
-5
107
36
118
1
-41
0
-2
-7
1
102
−
2
6
−
0
58
170
194
261
263
-75
194
-76
-76
-76
-76

7,000
Total units outstanding (Units)
625,000

-122

4.3%
-7.5%
3.4%
−
−
3.4%
-0.6%
4.8%
7.4%
17.9%
6.0%
-15.7%
0.4%
-0.5%
-7.6%
0.1%
2.1%
−
0.6%
9.9%
−
0.1%
61.1%
3.1%
3.7%
4.4%
3.4%
-75.9%
21.0%
-1.7%
-1.7%
-1.7%
-1.7%

Premises behind
Forecasts for 14th Fiscal
Period Management<Portfolio>
Portfolio>
Portfolio as of end of 13th fiscal
period: 50 properties
Preferred securities: 1
Properties to be acquired in 14th
fiscal period and after: 3<Average Monthly Occupancy
during Period>
97.1％
97.1％
<Total Number of Units
Outstanding>
625,000 units<LTV Ratio at the end of 14th fiscal
period>
45.9％
45.9％

-

Note: Figures were rounded off to a million yen

For details on assumptions for the 14th Fiscal Period forecast, please refer to the “Assumptions for the 14th Fiscal Period Forecast (July 1, 2008 December 31, 2008)” on pages 3 and 4 of the “Japan Prime Realty Investment Corporation 13th Fiscal Period Results (January 1, 2008 - June 30, 2008).”
18

Historical Unitholder Composition
Ratio of Foreign Investors Rose for Six Consecutive Periods
while Ratio of Financial Institutions Excluding Trust Banks Dropped
625,000

625,000

625,000

2 2 .1 %1 3 8 ,1 4 1

2 4 .4 %1 5 2 ,6 3 2

2 4 .6 %1 5 3 ,6 1 3

1 1 .8 %
7 3 ,6 8 6

1 1 .8 %
7 4 ,0 5 7

5 7 .5 %3 5 9 ,5 3 8

5 6 .5 %3 5 3 ,2 9 4

5 6 .5 %3 5 3 ,2 1 2

Of whichtrust banksown

Of whichtrust banksown

内、信託銀行の24.9％
155,575

26.1％
163,242

Number ofUnitholders
14,921(-168)

600,000

500,000
Units Outstanding

430,000
400,000

1 0 .8 %
4 6 ,5 9 0
1 7 .5 %
7 5 ,2 9 8

430,000

7 .2 %

530,000

530,000

530,000

530,000

6 .9 %
3 6 ,5 6 49 .9 %
5 2 ,3 6 6

1 2 .4 %6 5 ,6 4 7

1 3 .6 %7 1 ,9 4 7

1 4 .6 %7 7 ,2 1 4

1 4 .1 %7 4 ,8 2 2

3 0 ,9 4 4
1 6 .9 %7 2 ,7 2 7

1 4 .0 %7 4 ,0 3 0

1 3 .8 %
7 3 ,3 8 1

6 3 .8 %3 3 8 ,1 4 5

6 3 .7 %3 3 7 ,4 8 8

6 2 .9 %3 3 3 ,4 9 1

6 3 .0 %3 3 3 ,6 9 7

Of whichtrust banksown

Of whichtrust banksown

Of whichtrust banksown

Of whichtrust banks
own

20.3％
107,34222.9％
121,48122.5％
119,10424.5％
129,658

1 1 .9 %7 4 ,5 9 8300,000
5 6 .2 %2 4 1 ,6 9 1

6 0 .4 %2 5 9 ,8 9 1

200,000

100,000

14,277(-176)

13.4％
57,76916.2％
69,666

1 5 .4 %6 6 ,4 2 1

1 5 .5 %6 6 ,4 3 8

1 4 .7 %
7 8 ,0 7 7

1 2 .3 %6 5 ,3 2 4

1 0 .7 %
5 6 ,8 3 2

9 .6 %
5 0 ,9 7 5

8 .4 %
5 2 ,7 2 3

7 .3 %
4 5 ,3 8 87 .1 %
4 4 ,1 1 8J un 2004

Dec 2004

J un 2005

Dec 2005

J un 2006

Dec 2006

J un 2007

Dec 2007J un 2008

Financial Institutions

Other Domestic Companies

163
(-13)

27.0％
168,910口Of whichtrust banks
own

Individuals229(no change)

Of which, 10
are trust
banks
(-1)

保有投資口数Of whichtrust banks
own

0

252
(+21)

Foreign Investors____________________
Note: The composition ratio is rounded to the first decimal place.

19

13th

2.Property Portfolio Summary

20

Projected Trends of Occupancy Rates
13th Period (June 2008)

15th Period (June 2009)

14th Period (Dec. 2008)
Forecast

100%

98.5%
99%
98%

97.5%
96.5%

97%
96%
95%
94%

A 0.2% increase compared tothe 97.3% forecasted at thetime of announcing the 12th
Fiscal Period results

93%

Includes finalized new tenants
and contract cancellations

92%

Average Occupancy Rate
91%

98.0%

97.1%

97.9%

90%

(Reference) Total leasable area: 383,491.03㎡ (end of the 13th fiscal period)(1)(1) TheThe occupancy
occupancy rate
rate forfor thethe 14th
14th fiscal
fiscal period
period andand after
after has
has been
been calculated
calculated based
based onon below:
below:
14
14thth 1)
1) July
July 2008:
2008: occupancy
occupancy rate
rate forfor 5151 properties
properties including
including Minami
Minami Azabu
Azabu Building
Building thatthat was
was newly
newly acquired
acquired2)2) AugustAugust 2008:
2008: occupancy
occupancy rate
rate forfor 5252 properties
properties including
including Yurakucho
Yurakucho Ekimae
Ekimae Building
Building toto be
be acquired
acquired3)
ncluding Shinagawa
iincluding3) December
December 2008:
2008: occupancy
occupancy rate
rate forfor 5353 properties
properties including
Shinagawa Canal
Canal Building
Building toto be
be acquired
acquired15
15thth1)
1) March
March 2009:
2009: occupancy
occupancy rate
rate forfor 5454 properties
properties including
including KM
KM Fukugo
Fukugo Bldg.
Bldg. (tentative(tentative name)name) toto be
be acquired
acquired(2)
ation all8 andconsider200(2) TheThe occupancy
occupancy forfor thethe 14th
14th fiscal
fiscal period
period has
has taken
taken into
into considerationconsideration
all ofof thethe contract
contract terminations
terminations known
known asas ofof August,8,
August,8, 2008
2008
andincluded
only
executed
contractsfortheschedulednewtenants.
enants.
t
included only executed contracts for the scheduled new tenants.
(3)
ts in
tenan
(3) TheThe occupancy
occupancy forfor thethe 15th
15th fiscal
fiscal period
period includes
includes some
some newnew tenants
tenants
in addition
addition toto thethe above
above (2).
(2).

21

NOI Yield by Property for the 12th Fiscal Period (Tokyo CBDs)
12.0%

Portfolio NOI 5.8%
10.1%

Office Buildings NOI 5.9%

10.0%

Retail Properties NOI 5.6%

7.8%

8.0%
7.1%

7.0%

7.4%
6.9%
5.4%

5.8%

6.0%

5.5%

5.5%

5.3%

5.2%

5.0%

4.2%

4.1%

4.1%
3.8%

4.0%

3.7%

2.0%

Q

O: JPR Shibuya Tower Records Building
Ｐ: JPR Daikanyama
Ｑ: JPR Jingumae 432
Ｒ: Shinjuku Sanchome East Building

新 宿三 丁目イ ースト ビル

P

Ｊ ＰＲ 神宮前 ４３２O

Ｊ ＰＲ 代官山

N

Ｊ ＰＲ 渋谷タ ワーレ コー ドビル____________________(※) ＮＯＩ yield＝（Rental revenuesーRental expenses＋Depreciation）×365/182÷Acquisition priceM

新 宿セ ンター ビル

事務所
OfficeL

ア クロ ス新川 ビルア ネッ クス

H: Fukuoka Building
I: JPR Ichigaya Building
J: Oval Court Ohsaki Mark West
K: Shinjuku Square Tower
L: BYGS Shinjuku Building
M: Across Shinkawa Building Annex
N: Shinjyuku Center BuildingK

ビ ッグ ス新宿 ビル

J

新 宿ス クエア タワーIオ ーバ ルコー ト大崎
マー クウエ スト

H

Ｊ ＰＲ 市ヶ谷 ビル

G

福 岡ビ ル

A: Kanematsu Building
B: Kanematsu Building Annex
C: JPR Ningyo-cho Building
D: Shin-Kojimachi Building
E: JPR Crest Takebashi Building
F: MS Shibaura Building
G: Gotanda First BuildingF

五 反田 ファー ストビ ルE

Ｍ Ｓ芝 浦ビル

D

Ｊ ＰＲ クレス ト竹橋 ビル

C

新 麹町 ビルB

Ｊ ＰＲ 人形町 ビル

A

兼 松ビ ル別館

兼 松ビ ル

0.0%

R

商業施設
Retail22

NOI Yield by Property for the 13th Fiscal Period (Greater Tokyo)
12.0%
11.7%

Portfolio NOI

Office Buildings NOI 5.9%

10.1%

10.0%

5.8%

Retail Properties NOI 5.6%
8.3%

8.0%
7.0%

6.9%
6.3%

6.1%

6.0%
5.2%

5.2%

5.2%

5.0%

4.7%

4.6%

4.0%

4.0%

2.0%

13

10: Tanashi ASTA
11: Cupo-la Main Building
12: JPR Musashikosugi Building
13: Musashiurawa Shopping Square
14: Kawasaki Dice Building

川崎ダ イス ビル

12

武蔵浦 和シ ョッピ ングセ ンター____________________(※) ＮＯＩ yield＝（Rental revenuesーRental expenses＋Depreciation）×365/182÷Acquisition price11

ＪＰＲ 武蔵 小杉ビ ル

事務所
Office10

キュポ ・ラ 本館棟

８: Rise Arena Building
９: Ｙume-ooka Ｏffice Ｔower

９

田無ア スタ８

ゆめお おお かオフ ィスタ ワー

７

ライズ アリ ーナビ ル

１: Arca East
２: JPR Chiba Building
３: JPR Yokohama Nihon Odori Building
４: Shinyokohama 2nd Center Building
５: Kawaguchi Center Building
６: JPR Ueno East Building
７: Tachikawa Business Center Building

６

立川ビ ジネ スセン タービ ル

５

ＪＰＲ 上野 イース トビル

４

川口セ ンタ ービル

３

新横浜 第二 センタ ービル

２

ＪＰＲ 横浜 日本大 通ビル

１

ＪＰＲ 千葉 ビル

アルカ イー スト

0.0%

14

商業施設
Retail23

NOI Yield by Property for the 12th Fiscal Period (Other selected cities)
12.0%

Portfolio NOI
10.0%

5.8%
9.8%

Office Buildings NOI 5.9%

9.8%

9.3%
8.9%

Retail Properties NOI 5.6%
8.2%

8.2%
7.7%

8.0%
6.5%

6.0%

5.6%

5.9%

6.4%

6.4%
6.0%

5.7%

5.6%

5.0%
4.1%

4.0%

3.6%

2.0%

q

m: NORTH 33 Building
n: Sompo Japan Sendai Buildingo: Strasse Ichibancho
p: Niigata Ekinan Center Building
q: Sompo Japan Wakayama Buildingr: JPR Naha Building

事務所
OfficeOffice
事務所

Office事務所

名古屋
Nagoya福岡
Fukuoka

Sapporo/Sendai
札幌・仙台____________________(※) ＮＯＩ yield＝（Rental revenuesーRental expenses＋Depreciation）×365/182÷Acquisition pricep

Retail
商業施設

ＪＰ Ｒ那覇 ビルo

損保 ジャパ ン和 歌山ビ ルn

新潟 駅南セ ンタ ービル

シュ トラッ セ一 番町m

損保 ジャパ ン仙 台ビル

h: JPR Nagoya Sakae Buildingi: Mitsubishi UFJ Lease & Finance
Nagoya Head Office Building
j: JPR Hakata Building
k: Tenjin 121 Building
l: JPR Hakata-Chuo BuildinglＮＯ ＲＴＨ ３３ ビルk

ＪＰ Ｒ博多 中央 ビル

j

天神 １２１ ビル

大阪
Osaka

i

ＪＰ Ｒ博多 ビル

Retail
商業施設

Office事務所h

三菱 ＵＦＪ リー ス名古 屋本社 ビル

a: Meiji Yasuda Life Osaka Umeda Buildingb: Tokyo Tatemono Honmachi Buildingc: JPR Dojima Buildingd: JPR Umeda Loft Building
e: Benetton Shinsaibashi Building
f: Housing Design Center Kobe
g: Chayamachi Grande Buildingg

ＪＰ Ｒ名古 屋栄 ビルf

ＪＰ Ｒ茶屋 町ビ ルeハウ ジング ・デ ザイン ・セン ター 神戸d

ベネ トン心 斎橋 ビルc

ＪＰ Ｒ梅田 ロフ トビルb

ＪＰ Ｒ堂島 ビルa

東京 建物本 町ビ ル

明治 安田生 命大 阪梅田 ビル

0.0%

r

Office
事務所
地方その他
Other
cities24

Changes in Variation Between Appraisal Value and Book Value
Variation between Appraisal Value and Book Value (Unrealized Gains) Increased,
Making Net Assets Per Unit After Including Unrealized Gains at 345,047 Yen (Note 1)
End of 2nd eriod End of 3rd Period End of 4th Period End of 5th Period End of 6th Period End of 7th Period End of 8th Period End of 9th Period

End of 10th Period

End of 11th Period

End of 12th Period

End of 13th Period

Dec 2002 Jun 2003 Dec 2003 Jun 2004 Dec 2004 Jun 2005 Dec 2005 Jun 2006 Dec 2006 Jun 2007 Dec 2007 Jun 2008
Number of properties

30

32

38

42

42

42

44

46

48

49

50

94,413

125,207135,211155,061

171,526

191,905

210,601

224,773249,366

285,176

299,995

322,984

94,234

125,511

139,224

163,384

178,977

195,773

200,019

205,543

218,123240,546

246,002

268,506

Variation (unrealized gains: JPY mn)

179

-304

-4,013-8,323-7,451-3,868

10,582

19,23031,243

44,63053,99354,478

Ratio of unrealized gains or loss*

0.2%

-0.2%

-2.9%

-5.1%

-4.2%

-2.0%

5.3%

9.4%

14.3%

18.6%

21.9%

20.3%

Appraisal value at end of period(JPY mn)

Book value (JPY mn)

27

Variation (unrealized gains or losses)(JPY mn)

53,99350,00054,47844,63040,00031,24330,00019,23020,000

10,582

10,0000-10,000

179-304

End of 2nd
PeriodEnd of 3rd
Period-4,013-8,323-7,451-3,868End of 4th
PeriodEnd of 5th
PeriodEnd of 6th
PeriodEnd of 7th
PeriodEnd of 8th
PeriodEnd of 9th
PeriodEnd of 10th
PeriodEnd of 11th End of 12th
PeriodPeriodEnd of 13th
Period____________________(Note 1) Net assets per unit after including unrealized gains = (net assets at end of period + unrealized gains or losses)/number of outstanding units issued at end of period

25

13th

3.Ｏｖｅｒｖｉｅｗ ｏｆ ＴＲＩＭ

26

Overview of TRIM - Biography of Management
Name
Toshihiro Hagiwara
President & Chief Executive Officer

Kazuo Kitami
Director & Chief Administrative Officer

Seiji Miwa
Director & Chief Investment Officer

Yasuo Furuya
Director & Chief Financial Officer

Biography
 Has over 30 years of experience in investment, brokerage and development
development of real estate aswell as property management since joining Tokyo Tatemono Co., Ltd.
Ltd. in 1968. At Tokyo
Tatemono, he worked on acquisitions of leasing building companies
companies with a total transaction
value in the tens of billions of yen. He was Director and Head ofof the Osaka Branch of Tokyo
Tatemono before assuming his current role of President and CEO ofof Tokyo Realty Investment
Management, Inc. (TRIM) in January 2001. In addition, he assumed the concurrent role as
Substitute Executive Officer of Japan Prime Realty Investment Corporation
Corporation (JPR) in September
2007.

 Joined The Yasuda Mutual Life Insurance Company (currently, Meiji
Meiji Yasuda Life Insurance

Company) in 1975. Since then, he has been involved in a widewide-range of finance business andreal estate investment for almost 30 years. His experience includes
includes overseeing the insurer’insurer’sloan management as its credit manager, formulation of a series ofof regulations such as selfselfassessment in line with the insurance inspection manual and supervisingsupervising credit management
based on such regulations.

 Joined Tokyo Tatemono in 1983. After working in Design Supervision,
Supervision, Planning and Development

for 15 years, he was responsible for real estate securitization from 1998. He became a memberof the JJ-REIT Composition Project Team after the formation of the first securitization
securitization deal basedon the Japanese SPC law. He was responsible for the establishment
establishment of TRIM and was one of the
key members in the launch of JPR. In 2003, he was seconded to TRIM
TRIM to work in asset
management. He is a firstfirst-class architect.

 Joined The Yasuda Mutual Life Insurance Company (currently, Meiji
Meiji Yasuda Life Insurance

Company) in 1980. Spent eight years in securities investment operations
operations engaged in interest rate
analysis, as well as the establishment of bond investment and asset
asset management companies.
Undertook activities related to variable insurance securities management
management and oversaw securities
investment activities as Chief Bond Trader. Later, he gained further
further experience in stock market
investment operations.
27

Overview of TRIM - Measures to Avoid Conflicts of Interests
Transactions with Interested Parties<1st check > Compliance Committee

Acquisitions/sales of individual assets
 Property management commissions
 Trading intermediation or agent
 Large-scale renovation works, etc.


Asset Manager’s Compliance Committee
Prior examination of appropriateness/rationalityof transactions by members including outside
attorney, 4 full-time directors + compliancemanager + outside attorney (Special Committee)【Prior Examination】<Decision Making Organization>< 2nd check > Compliance Subcommittee
Asset Manager’s Compliance
Subcommittee

Board of Directors【 Prior Review】

Prior review of decision making procedures ofvarious committees by members including 4 fulltime directors + deal manager + complianceoffice general manager

4 full-time directors: Dispatched fromshareholders, except the President
 4 part-time directors: Interlocking
directors with shareholders
ORCommittees(Investment Policy Committee / Investment
Subcommittee / Management Subcommittee)

4 full-time directors
 4 managers in each committee< 3rd check > Investment Committee
JPR : BoD Meeting
Prior approval of transactions by a committee
independent from shareholders of the asset
manager, based on investor-oriented decision【Prior Approval】

Execution of Selected Deals Only
28

Overview of TRIM - Decision-Making Process of Property Acquisition
Enhanced Due Diligence Process upon Acquisition
Draft

Review

Investment Management Division

Compliance Subcommittee*1

Determineacquisition
policyInvestment Subcommittee

Due diligence

Due Diligence Subcommittee

Transactions withinterested parties,
advanceverification/approval

Finalization of
acquisition
Determination of
acquisition ofproperties valued at a
certain level or greater

Conclusion ofcontract

Compliance Committee/Boardof Officers of Investment
Corporation

Investment Subcommittee

Reviews whether or not the decision procedure of theInvestment Subcommittee violates any laws, ordinances,
rules, bylaws of the investment corporation, internal rules, etc.
etc.
Determines the acquisition policy for the property based on
the materials disclosed by the seller and other content

The Subcommittee verifies the content, importance and suchof legal compliance, site related studies, environmental risks,interests and other items indicated by the engineering report(ER) that the Investment Subcommittee had conducted priorto acquisition and also verifies the appropriateness ofsolutions and improvements regarding problems

After obtaining the results of due diligence and negotiations
with the seller, it judges the compliance with investment
standards and the appropriateness of the acquisition priceand makes the decision on the acquisition

Board of Directors*2

Acquisition*1: The Compliance Subcommittee holds a session whenever there isis asession of the Investment Subcommittee or Due Diligence Subcommittee.
Subcommittee.
*2: The Board of Directors of the asset manager must discuss any
acquisitions (sales) of individual assets valued at a certain level
level or greaterand exercise caution in their management.
29

Overview of TRIM - The Fee Structure of TRIMAM Fee Structure (No fees for purchase/sale of property)
Merits from Economies of Scalez Fixed(JPY 12.5 mn every 6 months)+
Incentive Fee 1AM fee structure initially designed to enjoy
economies of scaleIncentive Fee 1
Æ 2% of total revenues, decreasing to 1.5% for+amounts exceeding JPY 8 bnz Incentive Fee 2

Incentive for Cost Reductions
Incentive fee linked to distributable amountÆ 3% of the amount available for distribution prior+

to deduction of relevant fees will be allocated as
Incentive Fee 2z Incentive Fee 3

Incentive for Acquiring Blue-Chip Properties(after Jan. 2008)

0.25% of the price for assets being acquired(excluding acquisition costs, consumption taxes,
etc.)

30

Disclaimer Regarding Forward-Looking Statements
This material contains information that constitutes forward-looking statements. Such forward-looking statements are
made by Japan Prime Realty Investment Corporation and Tokyo Realty Investment Management, Inc., based on
information currently available, and are therefore not guarantees of future performance. Actual results may differ
materially from those in the forward-looking statements as a result of various factors including known or unknown
risks and uncertainties.
This material is solely for the purpose of providing information and it is not intended for the purpose of offering or
soliciting investment, or as a recommendation to purchase or sell any specific product. Please refer any inquiries forpossible purchases of units or other products of Japan Prime Realty Investment Corporation to a securities dealer.
Although Japan Prime Realty Investment Corporation takes all possible measures to ensure the accuracy of thecontent provided in this material (including references to legislation and taxation), it makes no guarantee of theaccuracy of the content. Furthermore, the content may be subject to change without prior notification.
Please further note that this English material is a provisional translation of the original Japanese material.

Web site URL: http://www.jpr-reit.co.jp/jpr_e/31