(TSE Code: 8982)

Top REIT, Inc.

Presentation on
Business Results forthe 12ｔｈ Fiscal Period
November 1, 2011－
April 30, 2012

June 15, 2012

IndexTopics:VI. Management Results at the Twelfth fiscal Period

・ Overview since ListingVl-1. Operating Results：History of Asset GrowthVl-2. Appraisal Value as at End of Period

I. Overview of Business Results of the Twelfth Fiscal Period(Ended April 30, 2012)

VI-3. Appraisal Cap Rate

I-1. Highlights of 12th Fiscal Period

Vl-5. Operating Results：Rent Revisions (excluding residential)

Vl-4. Operating Results：History of Occupancy Rate

I-2. Summary of the Twelfth Fiscal Period

VII. Twelfth Fiscal Period Results (Ended April 30, 2012)
II. The Strategy for Recovery of Dividend Level( the Twelfth Fiscal Period)

Vll-1. Statements of Income (Summary) / Statements of Cash Distributions

II-1. Results of Strategy for Recovery of Dividend Level
II-2. Results of Strategy for Recovery of Dividend Level in 12th FP

VIl-3. Major Financial Indicators

VIl-2. Balance Sheets (Summary)VIl-4. Unitholders
VlI-5. Unit Price Performance and Volume (Mar 1, 2006 – May 31, 2012)

III. 13th FP and 14th FP Forecasts
III-1. 13th FP and 14th FP Forecasts

VIlI. Appendix: Portfolio Overview

III-2. Results of Past Periods and Forecasts (Detail)

VIlI-1. Portfolio Map (as at end of 12th FP)
VIIl-2. Portfolio Summary (as at end of 12th FP)

IV. Growth Strategy: Leaping for the Next Stage

VIlI-3. Portfolio Overview (as at end of 12th FP)

IV-1. Market Prospects

VIIl-4. Operating Income by Property (Twelfth Fiscal Period)IV-2. The Current Management Policy

VIIl-5. Property Details：Office Buildings

IV-3. Growth Strategy for the Next Stage

Vlll-6. Property Details：Residential
Vlll-7. Property Details：Retails Properties and Other Properties

V. Financial Strategies
V-1. Financial Strategies: Stable Financial management
V-2. Financial Strategies: Financial Status / Extending Borrowing Periods
V-3. Financial Strategies: Issuer Rating and Loans at End of Twelfth Fiscal Period

lX. Appendix: Structure of Related Parties
lX-1. Characteristics of Top REIT and Operational Strategies
lX-2. Overview of Asset Manager

1

TOPICS． Overview since Listing
4th・5th・6th FP

1st・2nd・3rd FP
Mar. 1, 2006 – Oct. 31, 2007

7th・8th・9th FP
May 1, 2009 － Oct. 31, 2010

Nov. 1, 2007－ Apr. 30, 2009

Financial Status

IPO:
IPO: 82.
82.2626 bnbn
Offering Price:¥550,000 per unit

Nov. 1, 2010－Oct. 31, 2011 Nov. 11, 2011 －Apr. 30, 2012

Dividend

2nd
End of FP
Debt¥54.3bn

3rd
End of FP
Debt¥54.4bn

4th
End of FP
Debt¥83.0bn

5th
End of FP
Debt¥82.0bn

6th・7thEnd of FP
Debt¥81.74bn

8th
End of FP
Debt¥94.24bn

ＬＴＶ
28.0％

ＬＴＶ
37.1％

ＬＴＶ
37.3％

ＬＴＶ
47.4％

ＬＴＶ
47.3％

ＬＴＶ
47.3％

ＬＴＶ
50.6％

1st
1st
¥17,609¥17,609

2nd
2nd¥14,992¥14,992

3rd
3rd¥11,921¥11,921

4th
4th¥11,884¥11,884

5th
5th¥12,863¥12,863

OfficeOfficeRetailRetail6th
6th¥13,206¥13,206

7th
7th¥12,654¥12,654

Residental
Residental

8th
8th¥13,484¥13,484

9th
End of FP
Debt （※）¥94.17bn
ＬＴＶ
50.5％

10th
End of FP
Debt （※）¥94.10bn

9th
9th¥14,220¥14,220

ＬＴＶ
50.5％

11th
End of FP
Debt (※)¥94.03bn
ＬＴＶ
50.7％

12th
End of FP
Debt (※)¥96.97 bn
ＬＴＶ
51.5％

10th
10th
¥13,922¥13,92211th
11th¥12,809¥12,80912th
12th¥12,577¥12,577

External Growth120

77
properties
properties¥104.386bn¥104.386bn

88
properties
properties¥113.286bn¥113.286bn

11
11
properties
properties¥130.846bn¥130.846bn

14
14 properties
properties¥162.347bn¥162.347bn

13
13
properties
properties¥157.187bn¥157.187bn

17
17properties
properties¥177.435bn¥177.435bn

15
15 properties
properties¥175.047bn¥175.047bn

200
180

(※) Includes Investment
Corporation Bonds

Other
Other

(billion yen)140

May 1, 2012－
Oct. 31, 2012

Jun. 2010
Investment Corporation Bonds Issued

1st
End of FP
Debt¥35.9bn160

13th FP

12th FP

10th・11th FP

18
18
properties
properties¥184.345bn¥184.345bn

100
80
60
40
20
0

Listing

1st FP

2nd FP

3rd FP

4th FP

5th FP

6th FP

7th FP

8th FP

9th FP

10th FP

11th FP

12th FP2

I． Overview of Business Results of the Twelfth Fiscal Period（Ended April 30, 2012）3

I - 1． Highlights of 12th Fiscal Period《《 Flawless
Flawless Management
Management ofof Existed
Existed Properties
Properties 》》◆ Leasing Activities of Akasaka Oji Building・ Concluded lease agreements on 7 floors during 12th fiscal period with subsequent tenants
・ Vacancy space remaining on 1floor remaining, but application received from 1 candidate tenant◆ Improvement of Occupancy Rate
・ End of 11th FP occupancy rate 97.3％ ⇒ End of 12th FP occupancy rate 98.5％ （ 1.2% pt ↑ ）◆ Rent Revision
・ Agreed within assumed range of rent reduction with 10 tenants in office buildings（approximately 14% of total monthly rents in portfolio) （11.4％ ↓ ）《《 Acquisition
Acquisition andand Disposition
Disposition ofof Assets
Assets 》》◆ First Replacement of Assets
・ November 2011: Disposed the Nittetsu Honmachi Building in Osaka City for ¥1.3 billion （capital gains from disposition ¥256 million ）・ February 2012 : Acquired Top Residence Nihonbashi Kayabacho, a residential property located in Central Tokyo for ¥2.4billion◆ Acquisition of Office Building located in Central Tokyo・ March 2012: Acquired Shinkawa Chuo Building, an office building located in Chuo Ward, Tokyo for ¥5.61 billion《《 Financial
Financial Strategy
Strategy 》》◆ November 2011: Refinanced total amount of ¥19.04 billion （long-term loans payable／floating interest rate）
・Refinanced with 5 years long-term loans （ floating interest rate ）◆ March 2012: Additional Procurement of ¥3 billion for acquisition of new property
・Procured with ４ years and 7 months long-term loan （ floating interest rate ）⇒ Implemented by syndicated loans with major banks which Top REIT has conducted business since listing【 Average remaining terms ： End of the 11th FP: ２ years → End of the12th FP: ２ years and ７months 】《《 Dividend
Dividend 》》【 Decided to Pay Dividend per Unit： ¥12,577 】
・ Distribute almost total amount remaining after deducting the internally reserved ¥78 million from capital gains (¥256million) on disposing
Nitetsu Honmachi Building（accumulated approx. ¥1,100 per unit）

4

I - 2. Summary of the Twelfth Fiscal Period
12th FP Results
November 1,
2011 April 30, 2012

12th FP Forecast(Announced on
December 14,
2011)

Period of asset
management (days)

182

182

-

-

184

-

-

Operating revenue¥5,693mn¥5,641mn

¥51mn

0.9%

¥5,812mn(¥119mn)(2.1%)

Operating income¥2,772mn¥2,738mn

¥33mn

1.2%

¥2,779mn(¥7mn)(0.3%)

Ordinary income¥2,029mn¥1,998mn

¥31mn

1.5%

¥1,986mn

¥42mn

2.1%

(※)¥1,999mn¥1,967mn

¥32mn

1.6%

¥1,985mn

¥13mn

0.7%

Number of units issued
and outstanding (unit)

155,000

155,000--

155,000--

Dividend per unit (yen)(※)¥12,577¥12,400

¥177

1.4%

¥12,809(¥232)(1.8%)

Number of properties

18

17

１

-

17

1

-

Appraisal value total¥179,000mn

-

-

-

¥172,440mn¥6,560mn

3.8%

Items

Net income

11th FP Results
May 1, 2011 October 31, 2011

Net Change(Results vs. Forecast)

Net Change(12th FP Results vs.
11th FP Results)（※）Internally reserved approximately ¥78 million in 12th FP （Breakdown：Tax Effective Accounting: ¥28 million, Reduction Reserves: ¥49 million）■ Differences between Forecasts and Actual Results
Operating Revenue: +¥51mn
 Increased revenues due to acquisition of new property(Shinkawa Chuo Building) Increased revenues due to receiving common service fees from
subsequent tenants in Akasaka Oji Building Increased revenues due to receiving rent, etc. from subsequenttenant in Faret East Building
Operating Income: +¥33mn
 Increased expenses due to management costs and brokerage
fees from soliciting subsequent tenants at Akasaka Oji Building Increased expenses due to acquisition of new properties
Ordinary Income: +¥31mn
 Increased interest expenses due to procurement of funds for
new property acquisition■ Other References
Items

12th FP Results

11th FP Results

40

48

300,294.23m2

295,215.03m2

Occupancy rate

98.5%

97.3%

Depreciation andamortization¥1,072mn¥1,060mn

Capital expenditures¥442mn¥234mnTerm-end unit price¥451,500¥403,000

Term-end market
capitalization¥69,982mn¥62,465mn

Number of tenants
Total rentable floor space5II． The Strategy for Recovery of Dividend Level (the Twelfth Fiscal Period)6

II - 1．Results of Strategy for Recovery of Dividend Level

Recovery of Dividend level（ yen ）

As of announced on 10th FP

As of announced on 11th FP

16,00014,000Contribution of profits
throughout period fromnewly acquired property
in 12th FP

・ Capital gains from disposition（+¥1,100 ）・ Increased profits due toacquisition of new properties

13,922

12,80912,60012,000

1 2,5 77

Contribution inearnest of profits of
Akasaka Oji
Building

13,00012,40012,400

11,10010,000

As of announced on 12th FP

Decreased profits due to Major
tenant moved out of Akasaka
Oji Building

11,500Figures painted red：Actual results
Other figures：Forecast

8,000
10th FP（Ended Apr 30,2011）

11th FP（Ended Oct 31,2011）

12th FP（Ended Apr 30,2012）

13th FP（Ending Oct 31,2012）

14th FP（Ending Apr 30, 2013）《 Major Results in 12th FP 》
・ Leasing activities of Akasaka Oji Building expected to bear fruit
・ Replacement of properties (capital gains from disposition ¥256 million)
・ Acquisition of office building in Central Tokyo7

II – 2． Results of Strategy for Recovery of Dividend Level in 12th FP

Leasing of Akasaka Oji Building
Current
Current Leasing
Leasing Condition
Condition
Occupancy Rate (End of April 2012)
Occupancy Rate (End of May 2012)
Agreement conclusion
Number of considerations

63.6%(85.8%)
Approx.5,760m2／Approx.6,500m2(7.5 floors ／8.5 floors)
３ （Of which, 1 application wasreceived）

Floors

9F
8F
7F
6F
5F
4F
3F
2F
1F
B1F

Rentable Floor
Space

Lease start

Status809.25 ㎡

Mar, 2012

Leased up

809.25 ㎡

Sep, 2011809.25 ㎡

May, 2012

Leased up

809.25 ㎡

May, 2012

Leased up

809.38 ㎡

Mar, 2012

Leased up

809.38 ㎡－

Leasing activities under way

854.18 ㎡

Feb, 2012

Leased up

825.58 ㎡

Apr, 2012

Leased up

479.10 ㎡

Apr, 2012

Leased up

286.53 ㎡

Existing tenant

Leased up

Repository areas partially vacantContributeto
toincreasing
increasingprofits
profitsfrom
fromthethe14th
14thFP
FPdue
dueto
tothe
theimpact
impactof
ofFreeFreeRent
Rent
Contribute（partialcontribution
contributiontotoprofits
profitsinin13th
13thFP）
FP）（partial

ChangeChange ofof Akasaka
Akasaka Oji
Oji Building’s
Building’s Occupancy
Occupancy Rate
Rate
（㎡）
8,000

Rentable space

Multiplied
Multiplied Tenants
Tenants inin Akasaka
Akasaka Oji
Oji Building
Building

Occupancy rate
100%
80%

6,000

TenantＡ

Vacancy
spacesTenant E

60%
4,000

Tenant D

40%
2,000

20%

TenantＡ

Sony ComputerEntertainment Inc.

TenantC

TenantB0%0
End ofJan. 2012

End ofFeb. 2012

End ofMar. 2012

End ofApr. 2012

End ofMay. 20128

II - 2．Results of Strategy for Recovery of Dividend Level in 12th FP

Property Replacement
Top Residence Nihonbashi Kayabacho

Nittetsu Honmachi Building（ Determined disposition in 11th FP,
and completed in 12th FP）
FP）

Replacement（ Decided acquisition in 11th FP,
and completed in 12 th FP）
FP）● Effect of Replacement ● Accrued Capital Gains （¥256 million)
 Reserved internally portions of capital gains (¥78 million)
by utilizing the exceptional taxation to reinforce financial
standing
 Accumulated the cash dividend in 12th FP （accumulated
approx. ¥1,100）
 Secured further stability of portfolio《Utilize Sponsors’ Strengths》
Realized effective disposition gaining best opportunity by brokerageof Sumitomo Trust and Banking （present Sumitomo Mitsui TrustBank)【 Focus upon acquisition 】【 Assumed risk regarding the property 】① High transport convenience: About a 3 minute walk from Kayabacho Station on the Tokyo Metro

Due to large supply of offices in line with redevelopment of areas
around Osaka Station① Risk of worsening supply-demand balance② Tenants’ moving out risk is expanding, vacancy rate is increasing in Honmachi
area③ Concentration of rent revisions from 13th to 15th FP、increasing risks of rent
reduction

Hibiya Line and about a 4 minute walk from the same station on Tozai Line, further it has goodaccess to Nihonbashi Station that is within walking distance② Expected steady demand from business persons due to proximity to the central business districtsof Otemachi and marunouchi Areas③ Construction plans with increased scarcity value due to construction of studio apartments (lessthan 40m2) limited due to being district planning area of Chuo Ward

9

II - 2． Result of Strategy for Recovery of Dividend Level in 12th FP

Acquisition of Newly Property
Property

Shinkawa Chuo Building

Address

Sinkawa, Chuo Ward, Tokyo

Acquisition
Date
Acquisition
Price

March 30, 2012
5.61billion yen

Floor Area

7,981.27㎡

Structure/Floors

SRC structure with flat roof /1 basement floors, 9 floors above ground

Completion

July 1987

Type of Title

Ownership【Focus upon acquisition】①Excellent transit access: Approximately 4 minute walk from the Kayabacho Station on the Tokyo Metro Hibiya Lineand Tozai Line and approximately 6 minute walk from the Suitengumae Station on the Tokyo Metro Hanzomon Line
②Expected to meet various tenant needs due to proximity to central business districts such as Marunouchi, Otemachi,
Yaesu and Nihonbashi③Excellent spaces of more than 200 tsubo on standard floors, and Flexible responses to tenant needs possible thanks toexcellent floor efficiency with such features as U-shaped symmetrical column-free spaces④Equipped with standard facilities including office automation-compatible floors and individually-controllable air
conditioning systems⑤Enhanced convenience due to having 20 parking spaces on first basement floor

10III． 13th FP and 14th FP Forecasts

11

III - 1. 13th FP and 14th FP Forecasts
Preconditions for Forecast of Earnings Results
13th FP (Ending of October, 2012)
Portfolio Assets

14th FP (Ending of April, 2013)

Preconditioned on 18 properties held by Top REIT as of June 14, 2012

Number of Units Issued
and Outstanding

Interest-Bearing
Liabilities

Tenants for Akasaka
Oji Building
Rent Revisions
Operating Expenses
Non-Operating
Expenses

155,000 Units・As of end of FP: ¥96,835 million (Anticipated repayment of ¥67
million as agreed upon)・It is assumed that the ¥9,800 million due for repayment on
November 30, 2012 and the ¥9,300 million due for repayment
on March 27, 2013 will be respectively fully refinanced.

・As of end of FP: ¥96,902 million (Anticipated repaymentof ¥67 million as agreed upon)・It is assumed that the ¥17,500 million due for repayment onJune 29, 2012 will be fully refinanced.

It is assumed that revenues come only from lease agreements that have been concluded as of June 14, 2012,
covering approximately 1,890 tsubo / 2,200 tsubo) （ 8 floors／9 floors and underground repository)
2.5% of total rents (as of the end of 12th FP) are planned for rent
25.8% of total rents (as of the end of 12th FP) are planned for rent
revision
revision
It is assumed that property tax, etc. will be ¥596 million and
It is assumed that property tax, etc. will be ¥597 million anddepreciation and amortization will be ¥1,116 million
depreciation and amortization will be ¥1,121 million¥709 million (interest on loans, interest expenses on investment
corporation bonds and related expenses: ¥704 million)

Dividend¥649 million (interest on loans, interest expenses on investment
corporation bonds and related expenses: ¥644 million)

It is assumed that there is no reversal of internal reserves ( ¥78 million).

OperatingOperating Revenue
Revenue(million yen)

7,000

6,060
5,814

6,000

5,000

4,715

4,817

3rd FP

4th FP

5,584

5,606

5,608

5th FP

6th FP

7th FP

5,967

5,812
5,693

5,621

5,670

12th FP

13th FP(Forecast)

14th FP(Forecast)

4,526
4,000

4,037

3,000
1st FP

2nd FP

8th FP

9th FP

10th FP

11th FP

12

III - 1. 13th FP and 14th FP Forecasts
OperatingOperating Expenses
Expenses(million yen)

4,000

3,000

2,465

2,464

3rd FP

4th FP

2,933

2,905

2,978

2,964

3,041

2,995

3,033

2,921

5th FP

6th FP

7th FP

8th FP

9th FP

10th FP

11th FP

12th FP

13th FP
14th FP(Forecast) (Forecast)

3,019

2,971
2,779

2,772

2,631

11th FP

12th FP

2,990

3,006

1,878

2,000

1,610
1,000

0
1st FP

2nd FP

OperatingOperating Income
Income(million yen)

4,000

2,849

3,000

2,647
2,427

2,250

2,651

2,700

2,630

5th FP

6th FP

7th FP

2,353

2,663

2,000

1,000

0
1st FP

2nd FP

3rd FP

4th FP

8th FP

9th FP

10th FP

13th FP
14th FP(Forecast) (Forecast)*The actual number of days in the First Fiscal Period was 245. The above numbers are calculated by the following calculation method: (First Fiscal Period Results / 245 Days) x 365 Days / 2.
In addition, the above forecast figures are calculated under certain preconditions as of the date of this material and are subject to change. Moreover, the dividend is not guaranteed.

13

III – 1. 13th FP and 14th FP Forecasts
Net
Net Income
Income(million yen)

2,500

2,000

2,323
2,033
1,847

1,841

3rd FP

4th FP

1,993

2,046

1,961

5th FP

6th FP

7th FP

2,090

2,204

2,157
1,985

1,999

1,922

2,015

11th FP

12th FP

13th FP
14th FP(Forecast) (Forecast)

1,500

1,000

500

0
1st FP

2nd FP

8th FP

9th FP

10th FPDividend
Dividend(yen)
16,00014,992
14,22014,00013,116

12,863

12,00011,921

11,884

3rd FP

4th FP

13,922

13,484

13,206

12,80912,654

12,577

13,00012,40010,0008,000
1st FP

2nd FP

5th FP

6th FP

7th FP

8th FP

9th FP

10th FP

11th FP

12th FP

13th FP
14th FP(Forecast) (Forecast)*The actual number of days in the First Fiscal Period was 245. The above numbers are calculated by the following calculation method: (First Fiscal Period Results / 245 Days) x 365 Days / 2.
In addition, the above forecast figures are calculated under certain preconditions as of the date of this material and are subject to change. Moreover, the dividend is not guaranteed.

14

III - 2. Results of Past Periods and Forecasts (Detail)Item

7th Fiscal
Period

8th Fiscal
Period

9th Fiscal
Period10th Fiscal
Period11th Fiscal
Period12th Fiscal
Period13th Fiscal
Period(Forecast)

14th Fiscal
Period(Forecast)

Period of asset
management (days)

184

181

184

181

184

182

184

181

Operating revenue¥5,608mn¥5,814mn¥6,060mn¥5,967mn¥5,812mn¥5,693mn¥5,621mn¥5,670mn

Operating expenses¥2,978mn¥2,964mn¥3,041mn¥2,995mn¥3,033mn¥2,921mn¥2,990mn¥3,006mn¥762mn¥711mn¥783mn¥741mn¥809mn¥702mn¥719mn¥725mn¥561mn¥567mn¥586mn¥586mn¥609mn¥608mn¥596mn¥597mn¥1,105mn¥1,127mn¥1,081mn¥1,086mn¥1,060mn¥1,072mn¥1,116mn¥1,121mn

Operating income¥2,630mn¥2,849mn¥3,019mn¥2,971mn¥2,779mn¥2,772mn¥2,631mn¥2,663mn

Ordinary income¥1,960mn¥2,091mn¥2,204mn¥2,194mn¥1,986mn¥2,029mn¥1,923mn¥2,016mn

Net income¥1,961mn¥2,090mn¥2,204mn¥2,157mn¥1,985mn¥1,999mn¥1,922mn¥2,015mn

Net operating income
from property leasing¥4,284mn¥4,535mn¥4,691mn¥4,639mn¥4,393mn¥4,126mn (Note1)¥4,304mn¥4,347mn

ＦＦＯ¥3,066mn¥3,217mn¥3,286mn¥3,243mn¥3,046mn¥2,815mn¥3,038mn¥3,136mn

Number of units issued
and outstanding (units)

155,000

155,000

155,000

155,000

155,000

155,000

155,000

155,000

Dividend per unit

¥12,654¥13,484¥14,220¥13,922¥12,809¥12,577¥12,400¥13,000

FFO per unit

¥19,785¥20,755¥21,200¥20,929¥19,654¥18,165¥19,602¥20,238

Of which, expenses
related to rent business(excluding taxes and dues, anddepreciation and amortization)

Of which, taxes anddues
Of which, depreciation
and amortization

Note1: Net operating income from property leasing of 12th Fiscal Period excluded capital gains by disposition of property.
Note2: The forecasts should not be construed as a guarantee of the actual dividends

15

IV． Growth Strategy: Leaping for the Next Stage16

IV - 1. Market Prospects[Present state]

Real
Real Estate
Estate Leasing
Leasing Market
Market◆Vacancy rates remain at a high level due to the large supply of officebuildings in Central Tokyo in the first half of this year (leading to thegeneration of after-relocation vacancy and accelerated polarization bybuilding grade)◆Office rent levels still remain weak, though the range of decrease in rent
levels has decelerated◆Studio and family residences with high convenience continue to show
steady performance[Future prospects]◆Supply of office floors in Central Tokyo in 2013 expected to decrease in volume to lessthan half of the previous fiscal year, and the vacancy rate will be shown a recovering
trend, starting in the second half of fiscal 2012
◆Office rent is expected to hit the bottom due to the post-quake reconstruction demand
becoming in earnest and steady corporate eranings.
◆However, Japanese economic situations and corporate performance is likely to remain
unpredictability due to the impact of the yen’s appreciation and the European debt
problem. Close monitoring when office rents bottom out will be necessary.

⇒ Top REIT’s strategy
Continue efforts to further strengthen relations with tenants[Present state]

Real
Real Estate
Estate Transaction
Transaction Market
Market[Future prospects]◆Information on high-grade office properties available for sale is limited(repayment of borrowings is primarily being conducted through refinancedue to the improved financing environment)◆Will the price of high-grade office properties show an upward trend, given the
scarce properties available for sale and strong willingness of REITs andother buyers?

◆Buyers compete over high-grade office buildings available for sale incentral Tokyo, which are scarce, and show strong willingness to buy(buyers are primarily REITs, private placement funds and railroad and realestate companies)◆The market for rental residential property transactions remains steady⇒ Top REIT’s strategy
Focus acquisitions by gathering information on high-grade properties
available for sale◆Market for rental residential property transactions will remain steady, but tend
to overheat in Central Tokyo and the Tokyo Metropolitan Area

Financial
Financial // Capital
Capital Market
Market[Future prospects][Present state]◆De facto zero interest rate monetary policy maintained and continued by
the Bank of Japan◆Fund procurement environment is relatively favorable, with financial
institutions maintaining positive lending attitude◆The J-REIT market, which had shown a recovering trend primarily due tothe Bank of Japan conducting monetary easing and increasing thepurchase amount of and intermittently implementing purchase of J-REIT
units, has entered an adjustment phase due to the European debt problem
becoming more serious◆Market interest rates will remain stable at low levels for some time
◆Close monitoring will be continuously required for the European debt problem(impact on the J-REIT market conditions and financial institutions)⇒Top REIT’s strategy
・Strive to implement steadily refinance.
・While closely monitoring the market environment, select fund procurement
measures flexibly.

17

IV - 2． The Current Management Policy
The Current Management Policy◆ Secure foothold for revenues through flawless management of existing properties○ Make effort to lease up vacant spaces including the remaining one floor of Akasaka Oji Building along with
implementing measures to prevent tenants from moving out by continuously strengthening tenant relations.
○ Minimize range of decrease in rent revision by conducting persistent negotiations utilizing strong tenants relations with tenants◆ Stable Financial Management – Strive to refinance –○ 12th FP ： ¥17.5bn due for repayment on June 29, 13th FP ： ¥9.8bn due for repayment on November 30, ¥9.3bn due forrepayment on March 27,2013◆ Accumulate greater revenues with acquisition of new properties○ Acquire superior office properties with excellent location in Central Tokyo and major cities across the country○ Utilize the sponsor’s strengths (properties owned or brokered by sponsors) as well as various information channels
Asset Class
Offices

Other thanoffices

Property acquisition target◆ Excellent location in Central Tokyo and major cities across the country◆ High-quality specifications◆ Properties with strong competitiveness (ability to attract tenants, stable operations over long term)◆ Focus on residential properties
・Located in Central Tokyo, surrounding areas and major cities close to railway stations and with excellent transit access・Stable occupancy rates and rent levels

Portfolio Share

StanceApprox.
75%◎

Approx.
25%△

Harumi Island Triton Y (parts of tenants)（mn yen）

Monthly Schedule of Rent Revision

300*Based on monthly rent

13th
FP

200

Shinkawa chuo Building (parts of tenants)
Kanda Park Plaza (parts of tenants)
Faret East Building (parts of tenants)

30

20

14th
FP

10

0

Shiba-Koen Building (parts of tenants)

May. 2012 Jun. 2012 Jul. 2012 Aug. 2012 Sep. 2012 Oct. 2012 Nov. 2012 Dec. 2012 Jan. 2013 Feb. 2013 Mar. 2013 Apr. 2013
13th FP

14th FP

Harumi Island Triton Y (parts of tenants)
Harumi Island Triton Z
Kanda Nishiki-cho 3-chome Building
Akasaka Oji Building (parts of tenants)
Shiba-Koen Building (parts of tenants)
Kanda Park Plaza (parts of tenants)

8
Tenants
2.5% of total rents(as of end of 12thFP)

14
Tenants
25.8% of total rents(as of end of 12thFP)

Faret East Building (parts of tenants)

18

IV - 3. Growth Strategy for the Next Stage◆ While securing a foothold for revenues, acquire competitive and highly profitable properties◆ Fully utilize the Top REIT Edge

Growth Strategy
Strategy
GrowthGrowth Methods
Methods
GrowthContinued Implementation of Growth Strategy for the Next Stage
Sponsor Strength
Superior Portfolio◆ Implement growth strategy with anextreme focus on the dividend level(¥13,000~14,000)◆ Flexibly select fund procurement means according to the market environment
・Bank loans: Flexibly utilize strong bank formation
・Investment corporation bonds: Consider in view of market environment, etc.
・Capital increases through public offerings: Consider investment unit price levels andproperty returns, as well as amount of net assets and dividend◆ Consider M&A and joining of new sponsors

Further Leap
Forward

Next Stage
Asset
Asset Size
Size
(No. of
Properties)

Achieve ¥210.0bn

Next stage

Dividend
Dividend Level
Level Maintain ¥13,000~14,000g

Asset size: ¥210bn
No. of properties: around 20 – 23
LTV: 40 – 50%

20

Acquisitions ofadditional ¥26bn
Appropriately
control LTV

15

End of 12th FP
10

Asset size: ¥184.345bn
No. of properties: 18
LTV: 51.5%¥170bnTargetingTargeting asset
asset size
size ofof ¥210bn,¥210bn,reducing
reducingNEC
NEC Head
Head Office
Office Building’s
Building’s
share
share ofofthe
the portfolio
portfolio toto 20%
20%¥180bn¥190bn¥200bn¥210bn(Asset Size)

19

V． Financial Strategies

20V - 1. Financial Strategies: Stable Financial Management
Financial Policies (Stable Financial Management)
Maintain stable bank formationand secure financial flexibility

Changes in Fund Procurement Status (Debt)

Short-Term

LTVLong-Term

60%(billion yen) 100

Extend Borrowing Periods and Spread
Out Repayment Dates

47.4%
80

10.3

Manage Risk of Fluctuating Interest
Rates

37.1%

47.3%
9.3

37.3%

47.3%
13.3

47.3%

6.7

6.7

50.6%

50.5%

50.7%

50.5%

51.5%
50%

13.3
40%

60
27.8%
The market interest rate is currently low and stable. In viewof the risk of future interest rate fluctuations, Top REIT willin the meantime operate with a ratio of fixed-rate interest
borrowings of 50% while enjoying the present benefits. Top
REIT will watch for interest rate trends and deliberate on
raising the ratio of fixed-rate interest borrowings.

28.0%
20.9

40

2.5

72.7

20

33.4

33.4

33.4

16.2%

16.2%

7.1%

IPO

1st FP

2nd FP

97.0

94.0

68.5

30%

20%

Conduct operation with a target ratio of loans to total assets(LTV) of around 50% in contrast to the 60% ceiling

10%0%
3rd FP

4th FP

5th FP

6th FP

7th FP

8th FP

9th FP

10th FP

11th FP

12th FP

Ratio
Ratio ofof Loans
Loans with
with Fixed
Fixed Interest
Interest Rates
Rates
100%

7.1%

24.0%
37.9%

80%

80%

37.9%
52.8%

52.8%

47.3%

47.4%

49.0%

47.2%

47.2%

52.7%

52.6%

51.0%

60%

60%

40%

68.5

94.1

0

Ratio
Ratio ofof Long-Term
Long-Term Loans
Loans
11.3%

72.7

87.5

54.4

Manage Risk of Fluctuating Interest Rates

100%

87.5

88.7%

83.8%

83.8%

92.9%

92.9%

100.0%

100.0%

100.0%
40%

76.0%
62.1%

ShortTerm

20%

LongTerm0%
5th FP

6th FP

7th FP

8th FP

9th FP

10th FP

11th FP

12th FP

62.1%

20%

Floating
Fixed

0%
5th FP

6th FP

7th FP

8th FP

9th FP

10th FP

11th FP

12th FP•Regarding all graphs on this page, figures for the end of the 9th FP and after include ¥8.5 bn of investment corporation bonds.

21

V - 2. Financial Strategies: Financial Status / Extending Borrowing Periods
Refinancing
Refinancing Status
Status andand Extending
Extending Borrowing
Borrowing Periods
Periods

Remaining Period of Interest-bearing Liabilities
2 years
11ｔｈ FP（as of Oct. 31, 2011）

Refinance for 12th Fiscal Period(avg.)● Nov. 2011: Total ¥19.04bn in long-term loans⇒ Refinanced with long-term loans (floating rate)● Mar. 2012: Procured additional funds of ¥3bn to acquire new property ⇒ Long-term loans（floating rate）

12th FP after refinancing（as of Nov. 30, 2011）

・ Both implemented by syndicated loan with major banks which Top REIT has conductedbusiness since listing

12th FP（as of Apr. 30, 2012）

・ Will continue to maintain stable bank formation and work to extend remaining periods of loans(million yen)
25,0002 years &11 months (avg.)
2 years & 7 months(avg.)*Scheduled repayment of 67.5 million yen each period between 12th FP and 21th FP

6,700

20,000（Plan）

1,670
15,000

4,908

9,800

No. 1 Unsecured
Investment
Corporation Bonds

9,000
1,273
10,00016,700

3,000

Newly
Procurementof funds in12th FP

19,04017,50011,189

5,000

8,500

8,500
6,300
4,000

3,000

12th FP

Outstanding Balanceof Loans by Lender

Outstanding Balance of InterestBearing Liabilities as of th FP
12

13th FP

14th FP

15th FP

16th FP

17th FP

18th FP

19th FP

20th FP

21th FPLong-Term
Long-Term

1,823
22th FP

23th FP

Sumitomo Mitsui Trust Bank, Limited.

¥27,887mn

31.5％

Dai-Ichi Life Insurance Company Ltd.

¥1,000mn

1.1％Mizuho Corporate Bank, Ltd.

¥16,590mn

18. ％Resona Bank, Limited¥1,000mn

1.1％

Sumitomo Mitsui Banking Corporation¥13,074mn

14.8％

The Bank of Fukuoka,Ltd.

¥3,000mn

3.4％

The Bank of Tokyo Mitsubishi UFJ, Ltd.

¥13,074mn

8

14. ％

The Hiroshima Bank, Ltd.

¥1,000mn

1.1％

Mitsubishi UFJ Trust and Banking
Corporation¥4,415mn

5.0％

The Yamaguchi Bank, Ltd.

¥1,000mn

1.1％Development Bank of Japan, Inc.

¥6,430mn

7.3％¥88,470mn

100.0％¥8,500mn－¥96,970mn－

8Subtotal
No 1 Unsecured Investment Corporation Bonds
Total

22

V - 3． Financial Strategies: Issuer Rating and Loans at End of Twelfth Fiscal Period
IssuerRating

Baa１ (Negative)

Assigned by Moody’s Japan K.K.

(※)The Issuer Rating was downgraded to Baa1 from A3 with a negative outlook on May 9, 2012.

AA－（Stable）

LenderCategory

Development Bank of Japan, Inc

Assigned by Rating and Investment Information, Inc. (R&I)
Loan
Balance

Interest Rate(end of Apr.
2012)

Loan
Execution
Date

Repayment
Date

Remaining
PeriodNote¥135mn2.42％（fixed）

January
13, 2010

November30, 2016

Scheduled
repayment

Unsecured
and without
guarantee

1.95％（fixed）

June 29,2007

Sumitomo Mitsui Trust Bank, Limited.
Mizuho Corporate Bank, Ltd.
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust and Banking Corporation¥135mnSumitomo Mitsui Trust Bank, Limited.
Mizuho Corporate Bank, Ltd.
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust and Banking Corporation¥8,500mn

June 29,2012

2 months

Unsecured
and without
guarantee

1.24％（floating）

March
26, 2010

June 29,2012

2 months¥9,800mn

1.24％（floating）

January
13, 2010

November30, 2012

7 months

Development Bank of Japan, Inc¥3,000mn

Loan
Execution
Date

Repayment
Date

Remaining
PeriodNote¥16,700mn

1.39％（fixed）

March 3,2011

February29, 2016

3 years &10monthsUnsecured
and without
guarantee

0.84％（floating）

March 31,2011

February29, 2016

3 years &10monthsUnsecured
and without
guarantee

0.66％（floating）

March 30,
2012

October
31, 2016

4 years &6 months

2.42％（fixed）

January
13, 2010

November30, 2016

4 years &2 months

0.56％
November November
30, 2016（floating） 30, 2011

4 years &7 months¥6,700mn

1.48％（fixed）

Long-Term Loans

Sumitomo Mitsui Trust Bank, Limited.

¥2,000mn

Development Bank of Japan, Inc¥1,000mn

Dai-Ichi Life Insurance Company Ltd.

¥1,000mn¥4,000mn

Unsecured
and without
guarantee

Development Bank of Japan, Inc.

¥2,295mn

Unsecured
and without
guarantee¥2,295mn¥19,040mn

Unsecured
and without
guarantee¥19,040mn
March
27, 2008

March 27,2013

11 months

Unsecured
and without
guarantee¥51,735mn

1.09％
（avg）

4 yeras（avg）¥88,470mn

1.25％
（avg）

2 years &7 months（avg）

No 1 Unsecured Investment
Corporation Bonds¥8,500mn

1.00％（fixed）

Total Interest bearing liabilities¥96,970mn

1.23％
（avg）

Subtotal
Total Loans

1.53％（fixed）
1.47％
（avg）
2.27％
（fixed）
2.40％（fixed）
2.40％（fixed）¥3,000mn¥3,000mn

Sumitomo Mitsui Trust Bank, Limited.
Mizuho Corporate Bank, Ltd.
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust and Banking Corporation¥9,300mn¥36,735mn

Sumitomo Mitsui Trust Bank, Limited.
Mizuho Corporate Bank, Ltd.
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust and Banking Corporation

Unsecured
and without
guarantee¥9,800mn¥6,300mn

Long-Term Loans

Current Portion of Long-Term Loans¥9,000mn

Sumitomo Mitsui Trust Bank, Limited.
Mizuho Corporate Bank, Ltd.
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust and Banking Corporation

SubtotalInterest Rate(end of Apr.
2012)

¥6,700mn
Unsecured
and without
guarantee¥9,000mn
Sumitomo Mitsui Trust Bank, Limited.
Mizuho Corporate Bank, Ltd.
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust and Banking Corporation
Resona Bank, Limited

Loan Balance¥16,700mn
Sumitomo Mitsui Trust Bank, Limited.
The Bank of Fukuoka, Ltd.
The Hiroshima Bank, Ltd.
The Yamaguchi Bank, Ltd.

¥8,500mn
Sumitomo Mitsui Trust Bank, Limited.
Mizuho Corporate Bank, Ltd.
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo Mitsubishi UFJ, Ltd.
Mitsubishi UFJ Trust and Banking Corporation

LenderCategory

6 months（avg）

June 29,
2007

June 30,
2014

2 years &2 months

Unsecured
and without
guarantee

June 4,2010

June 4,2015

3 years &1 monthUnsecured
and without
guarantee

2 years &7months（avg）

Note 1: Interest rates are rounded to the second decimal place, and the remaining periods are rounded toa whole number. The averages for interest rates and remaining periods are weighted averages
based on the balance at the end of fiscal period.
Note 2: The Sumitomo Trust and Banking Co., Ltd merged with The Chuo Mitsui Trust and Banking, Co.,Ltd and Chuo Mitsui Asset Trust Banking Company, Limited on April 1, 2012, and changed
corporate name to Sumitomo Mitsui Trust Bank, Limited.

23

VI． Management Results at the Twelfth fiscal Period24VI - 1. Operating Results: History of Asset Growth
History
History ofof Asset
Asset Growth
GrowthAcquisition price

Latent profit = (Appraisal value – Book value)

Appraisal value(billion yen)(billion yen)

200

30
25

180
20
160

15
10

140

5
120
0
-5

100
1st FP

2nd FP

3rd FP

4th FP

5th FP

6th FP

7th FP

8th FP

9th FP

End of 1st
FP
Oct. 2006

End of 2nd
FP
Apri. 2007

End of 3rd
FP
Octl. 2007

End of 4th
FP
April. 2008

End of 5th
FP
Oct. 2008

End of 6thFP
April. 2009

End of 7th
FP
Oct. 2009

End of 8thFP
April. 2010

Acquisition
price¥113.286bn¥130.846bn¥130.846bn¥157.187bn¥162.347bn¥162.347bn¥162.347
bn

Book value¥116.187bn¥133.576bn¥132.698bn¥159.585bn¥163.985bn¥163.245bn

Appraisalvalue¥127.442bn¥152.468bn¥155.923bn¥188.035bn¥189.441bn

Unrealized
profits andloses¥11.254bn¥18.891bn¥23.224bn¥28.449bn¥25.455bn

10th FP

11th FP

12th FPEnd of 9th
FP
Oct. 2010

End of 10thFP
April. 2011

End of 11th
FP
Oct. 2011

End of 12thFP
April. 2012¥175.047bn¥175.047bn¥175.047bn¥177.435bn¥184.345bn¥162.237bn¥174.618bn¥173.618bn¥172.994bn¥174.742bn¥181.405bn¥170.870bn¥164.948bn¥177.146bn¥175.351bn¥170.670bn¥172.440bn¥179.000bn¥7.624bn¥2.710bn¥2.527bn¥1.732bn(¥2.324bn)(¥2.302bn)(¥2.405bn)*Acquisition price and appraisal value details are provided on P26 to P27.
*Figures less than one million yen have been rounded down for the above-mentioned values. As for latent profits and loses, figures less than one million yen have been rounded down
after deducting book value (total) from appraisal value (total).

25

VI – 2. Appraisal Value as at End of Period(million yen)

Asset
Class

Area

Property

Book Value at
Appraisal Value Appraisal Value
End of 12th FP
at End of 9th FP at End of 10th(A)
FP
(Note1)(Note1)

Appraisal Valueat End of 11th
FP
(B)
(Note1)

Appraisal Valueat End of 12th
FP (Ｃ）

NEC Head Office Building

41,95043,00047,75047,95047,50049,450

6,449

1,950

Harumi Island Triton Square
Office Tower Y

33,00030,99739,00038,70038,50036,4005,402(2,100)

Harumi Island Triton Square
Office Tower Z

20,00019,807

15,10014,30014,20014,300(5,507)100

Kanda Nishiki-cho 3-chome
Building

12,70012,785

14,10014,00014,00014,100

1,314

100

Akasaka Oji Building

9,660

9,834

13,300

9,570

9,560

9,080

(754)

(480)

Shiba-Koen Building

5,770

5,882

3,410

3,410

3,410

3,420

(2,462)

10

Shinkawa Chuo Building

5,610

5,773

-

-

-

5,790

16

(Note2) -Kanda Park Plaza

5,156

5,092

4,959

4,970

4,930

4,930

(162)

-

Tokyo
Faret East Building
Metropolitan Area

2,091

1,712

2,500

2,430

2,390

2,390

677

-

135,937

134,887

140,119

135,330

134,490

139,860

4,972

(420)

Sagamihara Shopping Center

12,00011,411

10,30010,30010,30010,400(1,011)

100

Tokyo
Ito-Yokado Higashi-Narashino
Metropolitan Area Store

8,900

7,994

5,568

5,560

5,560

5,620

(2,374)60

Musashiurawa Shopping Center

4,335

4,000

3,810

3,810

3,810

3,860

(140)

50

Central Tokyo
OfficeSubtotal（9 Properties）

RetailAcquisition
Price

Difference in
Difference
Appraisal Value
Betweenfrom End of 11th
Appraisal ValueFP
and Book Value(C) – (B)（C）－（A）(Note2)

Subtotal（3 Properties）

25,23523,406

19,67819,67019,67019,880(3,526)210

Top Residence
Nihonbashi Kayabacho

2,400

2,478

-

-

-

2,550

71

(Note2) -Fukasawa House Towers H&I

10,635

10,307

6,980

6,990

6,960

6,950

(3,357)(10)

Ecology Toyosu Procentury

5,160

5,075

4,520

4,590

4,780

4,880

(195)

100

1,223

1,307

-

-

1,270

1,280

(27)

10

1,165

1,247

-

-

1,170

1,150

(97)

(20)

Subtotal（5 Properties）

20,583

20,415

11,500

11,58014,18016,810(3,605)80

Central Tokyo

2,590

2,695

2,674

2,660

2,670

2,450

(245)

(220)

2,590

2,695

2,674

2,660

2,670

2,450

(245)

(220)

Total（18 Properties）
184,345
181,405
173,971
169,240
171,010179,000(2,405)(Note1) In the described above table, the respective appraisal value of ended period from 9th to 11th excluded the Nittetsu Honmachi Building disposed on November 25, 2011.
(Note2) Difference in appraisal value excluded the property acquired in 12th FP.

(350)

Central Tokyo

Residential Tokyo
Metropolitan Area Impress Musashi-Koganei
Top Residence Yoga

Other

OAK PLAZA

Subtotal（1Propertｙ）

26

VI - 3. Appraisal Cap Rate
Property

8th Fiscal Period

9th Fiscal Period

Discounted Cash Flow
DirectCapitaliz Method
ation
Discount
Terminal
Method:Rate
Cap Rate
Cap Rate

Discounted Cash Flow
DirectCapitaliz Method
ation
Discount
Terminal
Method:Rate
Cap Rate
Cap Rate

10th Fiscal Period

11th Fiscal Period

Discounted Cash Flow
MethodDirectCapitalization
Method:Cap Rate

Discount
Rate

Terminal
Cap Rate

DirectCapitalization
Method:Cap Rate

12th Fiscal Period

Discounted Cash Flow
MethodDiscount
Rate

Terminal
Cap Rate

DirectCapitalization
Method:Cap Rate

Discounted Cash Flow
MethodDiscount
Rate

Terminal
Cap Rate

3.7%
3.8%
NEC Head Office Building

4.3%(Next 3 years)

4.3%

3.8%
4.6%

4.3%

(afterward)(Next 3 years)

4.3%

3.8%
4.6%

4.3%

(afterward)(Next 2 years)

4.3%

3.8%
4.6%

4.3%

(afterward)(Next 2 years)

4.3%(Next 1 years)

4.6%

4.2%

3.9%

4.5%

(2-5years)

4.2%(afterward)(afterward)

Harumi Island Triton Square
Office Tower Y
Harumi Island Triton Square
Office Tower Z
Kanda Nishiki-cho 3-chome
Building
Akasaka Oji Building
Shiba-Koen Building
Shinkawa Chuo Building
Kanda Park Plaza
Faret East Building
Sagamihara Shopping
Center
Ito-Yokado HigashiNarashino Store
Musashiurawa Shopping
SquareTop Residence
Nihonbashi Kayabacho
Fukasawa House Towers
H&I

4.6%

4.3%

4.8%

4.6%

4.3%

4.8%

4.6%

4.3%

4.8%

4.6%

4.3%

4.8%

4.6%

4.3%

4.8%

4.6%

4.3%

4.8%

4.6%

4.3%

4.8%

4.6%

4.3%

4.8%

4.6%

4.3%

4.8%

4.6%

4.3%

4.8%

5.2%

4.9%

5.4%

5.2%

4.9%

5.4%

4.9%

4.6%

5.1%

4.9%

4.6%

5.1%

4.9%

4.6%

5.1%

4.5%
4.8%
5.3%
5.8%

4.4%
4.6%
4.8%
5.5%

4.8%
4.9%
5.9%
6.0%

4.5%
5.0%
5.3%
5.8%

4.5%
4.8%
4.8%
5.5%

4.8%
5.1%
5.9%
6.0%

4.5%
4.9%
5.3%
5.8%

4.5%
4.7%
4.8%
5.5%

4.8%
5.0%
5.6%
6.0%

4.5%
4.9%
5.2%
5.7%

4.5%
4.7%
4.7%
5.4%

4.8%
5.0%
5.5%
5.9%

4.5%
4.8%
4.9%
5.2%
5.7%

4.4%
4.6%
4.7%
4.7%
5.4%

4.7%
5.0%
5.1%
5.5%
5.9%

6.0%

5.8%

6.2%

6.0%

5.8%

6.1%

6.0%

5.8%

6.1%

6.0%

5.8%

6.1%

5.9%

5.7%

6.1%

6.4%

5.5%

6.9%

6.4%

5.5%

6.9%

6.3%

6.1%

6.6%

6.3%

6.1%

6.6%

6.3%

6.1%

6.6%

5.8%

5.5%

6.1%

5.8%

5.5%

6.1%

5.8%

5.5%

6.1%

5.8%

5.5%

6.1%

5.7%

5.4%

6.0%

-

-

-

-

-

-

-

-

-

-

-

-

5.1%

4.9%

5.3%

5.2%

4.9%

5.4%

5.2%

4.9%

5.4%

5.1%

4.8%

5.3%

5.0%

4.7%

5.2%

5.0%

4.7%

5.2%

Ecology Toyosu Procentury

5.5%

5.3%

5.7%

5.5%

5.3%

5.7%

5.4%

5.2%

5.6%

5.2%

5.0%

5.4%

5.2%

5.0%

5.4%

Impress Musashi-Koganei

-

-

-

-

-

-

-

-

-

5.5%

5.3%

5.7%

5.5%

5.3%

5.7%

Top Residence Yoga
OAK PLAZA

-

-

-

-

-

-

-

-

-

5.0%

4.8%

5.2%

5.0%

4.8%

5.2%

4.8%

4.3%

5.4%

4.8%

4.3%

5.4%

5.2%

5.0%

5.5%

5.2%

5.0%

5.5%

5.1%

4.9%

5.4%

Appraisers

Properties

Tanizawa Sogo Appraisal Co., Ltd.

NEC Head Office Building, Akasaka Oji Building,Japan Real Estate institute

Harumi Island Triton Square Office Towers Y & Z, Kanda Nishiki-cho 3-chome Building, Kanda Park Plaza, Faret East Building, Ito-Yokado
Higashi-Narashino Store, Top Residence Nihonbashi kayabacho, Fukasawa House Towers H&I, Ecology Toyosu Procentury,
Impress Musashi-Koganei, Top Residence Yoga ,OAK PLAZA,DAIWA REAL ESTATE APPRAISAL Corporation

Shiba-Koen Building, Shinkawa chuo Building, Sagamihara Shopping Center, Musashiurawa Shopping Square,• The appraisals were conducted by the above real estate appraisers based on the asset assessment methods and standards specified in TOP REIT’s
articles of incorporation as well as the regulations set forth by The Investment Trust Association, Japan.

27

VI - 4. Operating Results: History of Occupancy Rate
Occupancy
Occupancy Rate
Rate (Portfolio)(Portfolio)
Gross rentable floor space
99.8%

99.9%

99.5%

(gross rentablefloor space: ㎡)

Occupancy rate

99.7%

99.5%

99.5%

99.2%

99.2%

99.2%

99.5%

99.7%
97.3%

97.2%

97.3%

97.3%

97.4%

98.5%

98.1%

99.2%

(Ｏｃｃｕｐａｎｃｙ ｒａｔｅ)

325,000

100%
95%

275,000

261,671.68

300,294.23
295,215.03
294,261.19300,294.23
291,647.88
290,805.51
290,805.51
291,627.72
300,294.23
290,805.51
283,622.23
283,622.23
291,627.72
283,622.23
276,833.20
261,671.67

90%
85%
80%

229,231.70
225,00075%
178,104.46

70%

175,00065%
125,000
Oct. 2011 Nov. 2011
Oct.2010
Apr. 2011
Apr.2008
Apr.2010
Oct.2006
Oct.2009
Apr.2007
Oct.2007
March 2006
Apr.2009
Oct.2008
End of 1st FP End of 2nd FP End of 3rd FP End of 4th FP End of 5th FP End of 6th FP End of 7th FP End of 8th FP End of 9th FP End of 10th FPEnd of 11th FP(IPO)

Dec.2011

Jan. 2012

Feb. 2012

Mar. 2012

Apr. 2012
May. 2012
End of 12th FP

60%

Occupancy
Occupancy Rate
Rate (Office)(Office)
Rentable office space(gross rentablefloor space: ㎡)
180,000

Occupancy rate
(Ｏｃｃｕｐａｎｃｙ ｒａｔｅ)

99.7%

99.8%

100.0%

100.0%

100.0%

99.6%

99.0%

99.1%

99.6%

99.8%
95.0%

150,000
131,531.52

120,000

99.4%

116,370.00 116,369.99

130,408.56
130,968.26
130,249.39

138,929.87
139,312.77
138,673.71
132,601.13

94.9%

94.9%

95.1%

95.7%

129,341.15
128,486.97
128,191.61
128,191.61

97.0%

98.0%

99.1%

139,916.00
138,297.50
136,992.82

116,089.69
116,015.47

100%

90%

80%

90,00070%
60,00060%

30,000050%
Oct. 2011 Nov. 2011
Oct.2010
Apr. 2011
Apr.2008
Apr.2010
Oct.2006
Oct.2009
Apr.2007
Oct.2007
March 2006
Apr.2009
Oct.2008
End of 1st FP End of 2nd FP End of 3rd FP End of 4th FP End of 5th FP End of 6th FP End of 7th FP End of 8th FP End of 9th FP End of 10th FPEnd of 11th FP(IPO)

Dec.2011

Jan. 2012

Feb. 2012

Mar. 2012

Apr. 2012
May. 2012
End of 12th FP

28

VI - 4. Operating Results: History of Occupancy Rate
Occupancy
Occupancy Rate
Rate (Total(Total ofof Residence)
Residence)
Rentable office space(gross rentablefloor space: ㎡)

Occupancy rate (Total)(Ｏｃｃｕｐａｎｃｙ ｒａｔｅ)100%

32,000
94.6%

93.6%

28,000

93.9%

95.7%

95.1%

93.3%

94.6%
93.2%

93.8%

88.7%

24,00023,791.91
23,456.01
20,620.34

20,478.87

94.9%

94.5%

94.3%

92.7%

89.5%

95.3%

95.0%

20,704.61

23,604.89

23,898.83

90%

20,544.33

80%

20,00017,174.91

17,262.03

17,033.88
16,983.11

16,00017,374.28

16,821.94

70%
12,000

10,633.16

10,164.11

10,069.11

60%

8,000
Apr.2008
Apr.2007
Oct.2007
Oct.2008
Apr.2009
Oct.2009
End of 2nd FP End of 3rd FP End of 4th FP End of 5th FP End of 6th FP End of 7th FP

Oct. 2010
Apr.2010
End of 8th FP End of 9th FP

Apr. 2011
Oct. 2011
End of 10th FP End of 11th FP

Nov. 2011

Dec. 2011

Jan. 2012

Feb. 2012

Mar. 2012

Apr. 2012
End of 12th FP

May. 2012

Occupancy
Occupancy Rate
Rate (Each(Each ofof Residence)
Residence)(Ｏｃｃｕｐａｎｃｙ ｒａｔｅ)

Fukasawa

ToyosuMusashi-Koganei

Yoga

Nihonbachi kayabacho

100.0%

97.7%

97.5%

97.4%

97.7%

98.0%

97.6%
96.9%

96.6%

97.1%

97.2%

94.9%

95.0%

93.6%

94.6%
93.0%

94.3%

93.6%

92.2%

93.1%

92.0%
90.7%

91.0%

91.8%

92.1%

97.2%
96.8%

95.6%
95.0%
94.9%

95.5%
94.8%

94.5%
94.4%

94.2%
93.3%

93.2%
92.3%
92.1%
92.2%
92.1%
92.0%

90.0%

96.8%
95.7%

96.6%

93.0%

94.0%

92.7%

89.2%

89.5%

89.2%

88.8%

88.7%

85.0%
Apr.2008
Apr.2007
Oct.2007
Oct.2008
Apr.2009
Oct.2009
End of 2nd FP End of 3rd FP End of 4th FP End of 5th FP End of 6th FP End of 7th FP

Oct. 2010
Apr.2010
End of 8th FP End of 9th FP

Apr. 2011
Oct. 2011
End of 10th FP End of 11th FP

Nov. 2011

Dec. 2011

Jan. 2012

Feb. 2012

Mar. 2012

Apr. 2012
End of 12th FP

May. 201229

VI - 5. Operating Results: Rent Revisions (excluding residential)
Revised monthly
rentMonthly rent before
revision

Rent revision results ＝Increase in monthly rent(%)

Monthly rent before revision（million yen）

300

△13.8％△13.8％
250

＋0.5％
＋0.5％

＋0.1％
＋0.1％

200

150

△11.4％△11.4％
△5.8％
△5.8％

100

＋14.9％＋14.9％
＋0.2％
＋0.2％

＋7.8％
＋7.8％

50

0

1st FP

2nd FP

3th FP

△6.5％
△6.5％

△1.4％
△1.4％

＋9.1％
＋9.1％
4th FP

5th FP

6th FP

7th FP

8th FP

9th FP

△9.0％
△9.0％

10th FP

11th FP

12th FP◆
Results ofof 12th
12th FPFP Rent
Rent Revision
Revision ◆◆◆ Results
Agreed within estimated ranges of rent reduction
・ Office Buildings

10cases ： Unchanged：7 ・ Decreased：3■ Total (excluding residential) ： 11.4％ decrease on average30VII. Twelfth Fiscal Period Results (Ended April 30, 2012)31

VII - 1. Statements of Income (Summary) /Statements of Cash Distributions■ Statements of Income
Account■ Statements of Cash Distributions
11th FPMay 1, 2011 October 31, 2011(184 days)

12th FP
November 1, 2011 April 30, 2012(182 days)

AmountAmountAccount

I. Operating revenue andexpenses
1.Operating revenue¥5,812mn¥5,693mn

2.Operating expenses¥3,033mn¥2,921mn

Expenses related torent business¥2,479mn¥2,383mn

Asset management fees

¥424mn¥409mnOther01¥129mn¥129mnOperating income¥2,779mn¥2,772mn

11th FPMay 1, 2011 October 31, 2011(184 days)

12th FP
November 1, 2011 April 30, 2012(182 days)

AmountAmountUnappropriatedretained earnings¥1,985mn¥1,999mn

Total dividend amount¥1,985mn¥1,949mn<Dividend per unit><¥12,809><¥12,577>

Provision of reserve for
reduction entry

-

¥49mn

Retained earnings
carried forward

00

II. Non-operating income
and expenses
1.Non-operating income¥8mn¥6,060mn¥4mn

Interest income

¥3mn

¥2mn

¥4mn

¥1mn

2.Non-operating expenses

Other02¥801mn¥747mnInterest expenses¥613mn¥553mnInterest expenses oninvestment corporation bonds

¥42mn

¥42mn

Other03¥145mn¥151mnOrdinary income¥1,986mn¥2,029mn--¥1,986mn¥2,029mn

¥1mn

¥0mn

Extraordinary loss
Income before income taxes
Income taxes-current
Income taxes-deferred(¥0mn)¥28mn

Net income¥1,985mn¥1,999mn

Unappropriatedretained earnings¥1,985mn¥1,999mn【Expenses related to rent business】
 Depreciation and amortization:¥ 1,072 mn

 Property management expenses:¥ 398 mn

 Utilities expenses:¥ 189 mnand others32VII - 2. Balance Sheets (Summary)
Account

11th FP(as of October 31, 2011)

12th FP(as of April 30, 2012)

AmountAmountAssets
I. Total current assets¥10,183mn¥6,235mn

Cash and deposits¥5,405mn¥1,669mn

Cash and deposits in trust¥4,512mn¥4,299mn

Other¥265mn¥266mnII. Total noncurrent assets¥175,235mn¥182,137mn

1. Total property, plant andequipment¥174,742mn¥181,403mn

Buildings, etc.

¥1,002mn¥994mnLand¥4,888mn¥4,888mn

Buildings, etc. in trust¥49,410mn¥50,842mn

Land in trust¥119,440mn¥124,678mn

2. Total intangible assets

¥2mn

¥2mn

Intangible assets

¥2mn

¥2mn

3. Total investment andother assets¥490mn¥731mnLease and guarantee deposits

¥10mn

¥10mn

Long-term prepaid expenses¥304mn¥537mnOther¥176mn¥184mn

¥40mn

¥34mn

¥40mn

¥34mn

¥185,459mn¥188,407mn

III. Total deferred assets
Investment corporation bondissuance costs
Total assets

Account
Liabilities
I. Total current liabilities
Operating accounts payable
Short-term loans payable
Current portion of long-termloans payable
Accounts payable － otherAccrued expenses
Accrued consumption taxes
Advances received
Derivative liabilities
Other
II. Total noncurrent liabilities

11th FP

12th FP(as of October 31, 2011)(as of April 30, 2012)

AmountAmount¥38,364mn¥163mn-¥38,225mn¥225mn-¥36,675mn¥36,735mn¥254mn¥261mn¥63mn¥941mn¥4mn¥62,849mn¥233mn¥221mn¥804mn¥4mn¥65,922mn

Investment Corporation Bond

¥8,500mn¥8,500mn

Long-term loans payable¥48,862mn¥51,735mn¥144mn¥144mn¥5,342mn¥5,513mn

Deferred tax liabilities

-

¥28mn

Other noncurrent liabilities--¥101,214mn¥104,147mn¥84,245mn¥82,260mn¥84,259mn¥82,260mn¥1,985mn¥1,999mn¥1,985mn¥1,999mn

-

-

-

-

Total net assets¥84,245mn¥84,259mn

Total liabilities and net assets¥185,459mn¥188,407mn

Tenant leasehold and security
deposits
Tenant leasehold and security
deposits in trust

Total liabilities
Net assets
I. Total unitholders’ equity
1.Unitholders’ capital
2.Surplus
Unappropriatedretained earnings
Total surplus
II. Total valuation and translation
adjustments
Deferred gains or losses on hedge

33VII - 3. Major Financial Indicators
10th Fiscal Period
November 1, 2010 –April 30, 2011

11th Fiscal Period
May 1, 2011 –October 31, 2011

12th Fiscal Period
November 1, 2011 –April 30, 2012

181days184days

182days

50.5%

50.7%

51.5%

¥4,639mn¥4,393mn¥4,126mn－－[¥4,382mn]

5.3%

5.0%

4.5%

－

－

¥3,243mn¥3,046mn¥20,929¥19,654

Ratio of ordinary income to total
assets (return on assets (ROA))

1.2%

1.1%

[Annualized][2.4%][2.1%]

2.6%

2.4%[5.1%][4.7%]

Item
Period of asset management
Ratio of interest-bearing liabilities tototal assets at end of period(LTV)
Rental NOI(Net operating income)[ Included capitalgains ]
Rental NOI yield[ Included capitalgains ]
Funds from Operation (FFO)
FFO per unit

Ratio of net income to unitholders'equity (return on equity (ROE))[Annualized]

RemarkInterest-bearing liabilities at end of period / Total assets at end of
periodRent revenue – Expenses related to rent business + Depreciation andamortization

Rental NOI x 2 / Sum total of the acquisition price of all properties intheportfolio at end of period[4.8%]¥2,815mn

Net income + Depreciation and amortization – Gain on sales of realestate properties¥18,165 FFO / Number of units issued and outstanding at end of period
Ordinary income / ((Total assets at beginning of period + Total assets
at end of period) / 2)
(Note) The figure of 12th FP was included capital gains disposed[2.2%]
on November 25, 2011

1.1%

Net income / ((Net assets at beginning of period + Net assets at endof period) / 2)
(Note) The figure of 12th FP was included capital gains disposed[4.8%]
on November 25, 2011

2.4%

Implied Cap Rate

5.6%

5.7%

NOI / ( Market capitalization at end of period +Net Debt at end of
period (Total liabilities at end of period – Total current assets at end
5.1% of period))（Note）The figure of 12th FP was excluded capital gains disposedon November 25, 2011

NAV multiple

0.93

0.76

0.85 (Appraisal value at end of period – Book value at end of period))

Ratio of unitholders' equity to total
assets at the end of period

45.3%

45.4%

44.7% Net assets at end of period / Total assets at end of periodMarket capitalization at end of period / (Net assets at end of period +34

VII - 4 . Unitholders
Unitholdings
Unitholdings (as(as atat endend of12thof12th FP)
FP)
Category

Number of Units Held

Individuals / other
Financial institutions(incl. securities firms)
Other domestic
corporations
Overseas corporations /individuals
Total

NumberNumber ofof Unitholders
Unitholders
Number of Unitholders

21,159

13.7%

6,583

95.2%

101,359

65.4%

99

1.4%

13,264

8.6%

140

2.0%

19,218

12.4%

90

1.3%

155,000

100.0%

6,912

100.0%

Top
Top 1515 Unitholders
Unitholders (as(as atat endend ofof 12th
12th FP)
FP)
Rank

Name

Number of
Share of Total
Units Held

1 Japan Trustee Service Bank (trust account)

30,97319.98

2 Nomura Trust and Banking (investment trust account)

9,962

6.43

3 The Master Trust Bank of Japan (trust account)

6,181

3.99

4 North Pacific Bank, LTD.

6,139

3.96

Trust and Custody Services Bank (securities investment
5 trust account)

6,059

3.91

6 The Senshu Ikeda Bank, Ltd

4,540

2.93

7 American Life Insurance Company GA Company JPY

4,000

2.58

8 NOMURA BANK (LUXEMBOURG) S.A.

3,634

2.34

9 The Fuji Fire and Marine Insurance Company, Limited

3,465

2.24

10 Sumitomo Mitsui Trust Bank, Limited

3,176

2.05

11 Nippon Steel City Produce, Inc

3,162

2.04

11 Oji Real Estate Co., Ltd.

3,162

2.04

13 Trust and Custody Services Bank (money trust tax
account)

2,884

1.86

14 The Zibraltar life insurance Co., Ltd

1,780

1.15

15 The Minami Nippon Bank, Ltd.

1,550

1.00

90,667

58.49

Total

10th Fiscal Period
Total number ofunitholders at endof period: 7,090

11th Fiscal Period
Total number ofunitholders at endof period: 7,031

12th Fiscal Period
Total number ofunitholders at endof period: 6,912

Financial institutions (incl. securities firms):
Other domestic corporations:
Overseas corporations / individuals:

113 [1.6%]
145 [2.0%]
114 [1.6%]

Individuals / other 6,718 [94.8%]
Financial institutions (incl. securities firms):
Other domestic corporations:
Overseas corporations / individuals:

111 [1.6%]
140 [2.0%]
105 [1.5%]

Individuals / other 6,675 [94.9%]
Financial institutions (incl. securities firms):
Other domestic corporations:
Overseas corporations / individuals:

99 [1.4%]
140 [2.0%]
90 [1.3%]

Individuals / other 6,583 [95.2%]

0%

20%

40%

60%

80%

100%

NumberNumber ofof Units
Units Held
Held
10th Fiscal Period
Total number of units
issued andoutstanding at end of
period: 155,000

11th Fiscal Period
Total number of units
issued andoutstanding at end of
period: 155,000
12th Fiscal Period
Total number of units
issued andoutstanding at end of
period: 155,0000%Individuals / other:
20,592 [13.3%]

Other domestic corporations:
13,475 [8.7%]

Overseas
corporations /individuals:
23,674 [15.3%]

Financial institutions (incl. securities firms):
97,259 [62.7%]
Other domestic corporations:
13,120 [8.5%]

Individuals / other:
20,516 [13.2%]

Overseas
corporations /individuals:
20,427 [13.2%]

Financial institutions (incl. securities firms):
100,937 [65.1%]
Individuals / other:
21,159 [13.7%]

Other domestic corporations:
13,264 [8.6%]

Overseas
corporations /individuals:
19,218 [12.4%]

Financial institutions (incl. securities firms):
101,359 [65.4%]

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

35

VII - 5. Unit Price Performance and Volume (Mar 1, 2006 – May 31, 2012)
第10期

Top REIT Trading Volume

第10期
（円）
(yen)

Top REITTES REIT Index

TOPIX

第10期
（口）
(Unit)

1,000,000

10,00012th FP

13th FP

900,000
8,000

800,000

700,000
6,000
600,000

500,000
4,000
400,000

300,000

2,000

200,000

100,000

Apr
2006

Oct
2006

Apr
2007

Oct
2007

12th
12th Fiscal
Fiscal Period
Period End
End
Unit
Unit PricePrice(based(based on
on closing
closing price)
price)

Apr
2008

Oct
2008

Apr
2009

Oct
2009

Apr
2010

IPO
IPO PricePrice¥451,500(Apr. 27, 2012)

Historical
Historical HighHigh since
since IPO
IPO
(basedon
closing
price)(based on closing price)
Historical
Historical Low
Low since
since IPO
IPO
(basedon
closing
price)(based on closing price)

Oct
2010

¥550,000

Apr
2011

Oct
2011

Apr
2012

0

Mar. 1, 2006

¥998,000 Feb. 16, 2007
¥208,000 Oct. 28, 2008

36

VIII． Appendix: Portfolio Overview

37

VIII - 1. Portfolio Map (as at end of 12th FP)
Tokyo Metropolitan Area

Musashiurawa
Shopping
SquareImpress
MusashiMusashi-Koganei Fukasawa House
Towers H&I
Faret East Building
ItoIto-Yokado
HigashiHigashi-Narashino
Top Residence
Store
Yoga

NEC Head Office Building

Musashiurawa
Shopping
SquareFukasawa House Towers H&I
Harumi Island Triton Square
Office Tower Y&Z
Sagamihara Shopping Center

Iidabashi Sta.OAK PLAZA
Kanda Nishiki-cho
3-chome Building

Central Tokyo

Shinjuku Sta.
Yotsuya Sta.

Shibuya
Ward

Akihabara Sta.
Kanda Park Plaza
Kanda Sta.

ChiyodaTop Residence
Ward Tokyo Sta. Nihonbashi Kayabacho
Shinkawa Chuo Building

Akasaka Oji
Building
MinatoWard
Shibuya Sta.

Chuo Ward
Shinbashi Sta.

ShibaShiba-Koen
Building
NEC Head
Office Building

Ecology Toyosu
Procentury
Harumi Island
Triton Square
Office Tower Y & Z
Kanda Nishiki-cho 3-chome Building

Shinagawa
Ward
Shinagawa Sta.

38

VIII - 2. Portfolio Summary (as at end of 12th FP)
Total Acquisition Price: ¥184.345bn.

Gross Rentable Floor Area : 300,294.23m2

Number of Properties

:

PML

18

:

Asset Class (property type)
100%
11.5%

2.0%
8.1%
19.3%

80%

1.6%
6.8%
16.1%

1.6%
9.7%

1.5%
9.0%

1.5%
9.0%

Area
1.4%
11.2%

Other

14.4%

14.4%

13.7%

Office

1.1%
13.0%

0.8%

0.7%

0.7%

0.6%

0.6%

28.6%

24.2%

26.6%

24.6%

24.6%

Other

88.5%
70.6%

75.5%

73.1%

75.1%

75.1%

73.7%

80%

40%

Tokyo
Metropolitan
Area
Central Tokyo

86.0%
70.6%

75.1%

72.8%

74.7%

74.7%

75.3%

End of
2nd FP

End of
4th FP

End of
6th FP

End of
8th FP

End of10th FPEnd of12th FP20%

20%(40.2%)(32.1%)(26.7%)(25.8%)(24.0%)(24.0%)(22.8%)IPO

End of
2nd FP

End of
4th FP

End of
6th FP

End of
8th FP

End of10th FPEnd of12th FP( ) Share of
NEC Head Office
Building

0%

0%

IPO

Scale (based on total floor space)
100%

6.0%

6.8%

9.3%

26.8%

22.7%

10.7%
80%

11.5%

9.2%

60%

40%

24.7%

60%

60%

40%

100%

Residential
Retail

15.5%

2.6%

7.6%

12.2%
21.9%
7.4%

11.3%

11.3%

15.8%

Less than
10,000㎡

100%

27.6%

6.9%

6.9%

26.2%

10,000㎡49,999㎡

49.4%

71.8%
60.4%

58.5%

50,000㎡99,999㎡

54.2%

54.2%

51.5%

20%

0%

0%
End of
2nd FP

End of
4th FP

End of
6th FP

40.3%

4.9%

20 years or
more

10.7%
41.2%

37.2%

41.2%

45.3%

37.5%

14.6%

6.8%

25.2%

33.7%

32.6%

11.4%

9.5%

12.4%

17.1%

17.1%

17.1%

39.3%

41.8%

12.5%

14.0%

100,000㎡
or more

20%

IPO

5.9%

60%
6.5%

40%
57.3%

4.9%

80%
27.6%

th

End
End ofof 12
12th FPFP
Ａｖｅｒａｇｅ:
Ａｖｅｒａｇｅ
Ａｖｅｒａｇｅ:: 18.0
18.0 years
years

Age of Buildings

15 years19 years
10 years14 years
5 years-9
years
Less than
5 years

28.8%

31.6%
2.5%

12.2%
1.3%

End of
End of
End of
End of
End of
End of
2nd FP
4th FP
6th FP
8th FP
10th FP
12th FP※In the above graphs, percentage figures are calculated based on acquisition price and the average is a weighted average based on acquisition price.

End of
8th FP

End of10th FPEnd of12th FP

IPO

39

VIII - 3. Portfolio Overview (as at end of 12th FP)
Asset
Class

Area

Property

100.0

1

1.4

Mar 1, 2006

33,000

17.9

100.0

7

1.2

Mar 27, 2008 267,132.67

10,914.20

Oct. 2001

20,000

10.8

100.0

1

1.5

Kanda Nishiki-cho 3-chome
Building

Chiyoda Ward,Tokyo

Jan 13,2010

12,169.78

8,025.65

Mar.1973

12,700

6.9

100.0

1

7.0

Mar 1, 2006

10,063.05

7,301.15

Apr. 1989

9,660

5.2

63.6

4

6.4

Mar 19, 2008

4,958.29

3,060.43

May 1991

5,770

3.1

92.7

2

9.6

Mar 30, 2012

7,981.27

6,032.24

July 1987

5,610

3.0

100.0

1

7.0

Mar 1, 2006

5,511.83

4,537.66

Nov. 1959

5,156

2.8

100.0

10

14.1

Mar 1, 2006

16,206.34

5,850.23

Dec. 1994

2,091

1.1

100.0

1

2.8

－

141,179.05

135,937

73.7

98.0

28

－

56,351.42

61,763.28－
Aug. 1993
etc.

12,000

6.

5

100.

0

2

3.6

45,338.37

51,098.42

Oct. 1994

8,900

4.8

100.0

1

7.7

28,930.36

14,960.69

Oct. 2005

4,335

2.4

100.0

3

8.5

－

127,822.39－

25,235

13.7

100.0

6

－

3,455.

68

Feb. 2004

2,400

1.

3

96.

8

1

6.6

Kanda Park Plaza
Faret East Building

Minato Ward,Tokyo
Minato Ward,Tokyo
Chuo Ward,Tokyo
Chiyoda Ward,Tokyo
Tachikawa City,Tokyo

Subtotal（9 Properties）
Sagamihara City,
Sagamihara Shopping Center
Kanagawa Pref. Mar 1, 2006
Ito-Yokado Higashi-Narashino
Narashino City,
Jun 30, 2006
Store
Chiba Pref.
Saitama City,
Musashiurawa Shopping Square
Mar 19, 2007
Saitama Pref.
Subtotal（3 Properties）

Top Residence Nihonbashi
Central Tokyo Kayabacho
Fukasawa House Towers H&I
Ecology Toyosu Procentury
Impress Musashi-Koganei
Top Residence Yoga

Chuo Ward,Tokyo
Setagaya Ward,Tokyo
Koto Ward,Tokyo
Koganei City,Tokyo
Setagaya Ward,Tokyo

Feb 1, 2012

4,540.

Dec 8, 2006

12,135.36

11,357.44

Jun. 2004

10,635

5.8

93.0

1

1.6

May 30, 2008

9,630.96

6,789.03

Jan. 2005

5,160

2.8

94.4

1

10.6

Aug 12, 2011

2,471.30

2,056.41

Jun. 2008

1,223

0.7

94.5

1

6.4

Oct 14, 2011

1,894.35

1,512.38

Feb. 2008

1,165

0.6

89.2

1

8.6

25,170.94－

20,583

11.2

93.8

5

－

6,121.85

6,121.85

Central Tokyo OAK PLAZA

Apr. 1985

2,590

1.4

100.0

1

7.7

Subtotal（1 Property）－

6,121.85

－

2,590

1.4

100.0

1

－

－

300,294.23

Total（18 Properties）－

184,345

100.

98.

40

2.6

70

－

Subtotal（5 Properties）
Other

22.8

72,238.03

Oct. 2001

Shinkawa Chuo Building

Residential Tokyo
Metropolitan
Area41,950144,476.05

PML
(%)

23,219.46

Shiba-Koen Building

Tokyo
Metropolitan
Area

Jan. 1990

Mar 3, 2006

Occupancy Number ofRate
Tenants(%)

267,132.67

OfficeRetailPortfolio
Share
(%)

Total Floor
RentableCompletion
Space (m2) Floor Space (m2)
DateHarumi Island Triton Square
Office Tower Y
Harumi Island Triton Square
Office Tower Z

Akasaka Oji Building

Tokyo
Metropolitan
Area

AcquisitionPrice(mm yen)Acquisition
Date

Minato Ward,Tokyo
Chuo Ward,Tokyo
Chuo Ward,Tokyo

NEC Head Office Building

Central Tokyo

Address

Chiyoda Ward,Tokyo

Mar 20, 2007

0

5

40

VIII - 4. Operating Income by Property (Twelfth Fiscal Period)(million yen)Harumi Harumi
IslandIslandNEC
Triton
TritonHead
Square Square
OfficeOfficeOfficeBuilding
Tower Y Tower Z(Note 1)
Operatingperiod (days)

Kanda
Nishiki- Akasaka Shiba- Shinkawa
cho
Oji
Koen
Chuo
3-chome Building Building Building
Building(Note 1)

182days 182days 182days 182days 182days 182days

32days

ItoMusashi
Fukasawa
Top
Faret
Nittetsu Sagamihar Yokado
Ecology ImpressTopurawa Residence HouseOAK
Toyosu Musashi- Residence
East Honmachi a Shopping HigashiNihonbashi Towers
Shopping
PLAZA
Center
Procentury
Yoga
Narashino
Building Building
Koganei
Square Kayabacho
H&I
Store
(Note 2)

Kanda
Park
Plaza

182days 182days

25days182days 182days 182days

90days182days 182days 182days 182days 182days

Total revenue
from property
leasing

1,370

1,294

54

107

34

174

153

13

407

236

129

42

235

159

44

36

94

Rent revenue－ real estate

1,370

1,294

54

107

34

174

153

13

407

236

129

42

226

155

42

35

94

233

356

94

28

5

41

67

15

59

47

19

6

64

37

8

5

21

1

166

38

8

2

8

31

1

2

1

1

5

36

19

6

3

0

224

95

40

9

-

13

12

7

55

29

15

-

16

8

-

-

14

Utilities
expenses

-

80

10

7

0

12

22

2

-

-

-

0

0

1

0

0

-

Repairexpenses

4

9

2

3

2

4

0

3

0

14

0

1

8

7

1

1

5

Non-life
insurance
expenses

1

2

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

Other

1

2

2

-

-

2

1

0

1

0

1

0

2

1

0

0

1

1,137

938

278

29

132

86

348

188

110

35

171

121

36

31

73

[5.7%][2.8%](39)[(0.8%)]

79[5.4%]

370[5.8%][2.7%][6.0%][5.2%][8.2%][5.8%][4.2%][5.1%][6.1%][3.2%][4.7%][5.9%][5.3%][5.6%]

Depreciation
andamortization

215

245

120

34

32

16

10

13

34

2

54

72

49

13

66

45

17

13

12

Operatingincome

921

693

158

335

(72)

62

18

119

51

(4)

294

116

60

22

105

76

18

17

60

Capitalexpenditures

358

9

7

0

-

8

5

-

1

-

30

11

-

0

1

-

-

0

6

Total expenses
from property
leasing
Property
management
expenses
Taxes and duesNOI(NOI yield)

・Renewal of refrigerator
・Renewal of air condition facilities
・Renewal of central monitor subsystem, etc

・Renewal of restroom equipments, etc(Note1) Some figures for Harumi Island Triton Square Office Tower Z and Kanda Nishiki-cho
3-chome Building are not disclosed due to request by the tenants.
（Note2）Disposition of Nittetsu Honmachi Building has been completed on November 25, 2011

41

VIII - 5. Property Details: Office Buildings

Property

NEC Head Office Building

Property

Harumi Island Triton Square Office Tower Y

Property

Harumi Island Triton Square Office Tower Z

Address

Shiba, Minato Ward, Tokyo

Address

Harumi, Chuo Ward, Tokyo

Address

Harumi, Chuo Ward, Tokyo

Floor Area

144,476.05m2

Floor Area

267,132.67m2

Floor Area

267,132.67m2

Completion

January 1990

Completion

October 2001

Completion

October 2001

Title

Co-ownership (50%)

Title

Co-ownership (3rd – 15th floors)

Title

Co-ownership (a part of the 17th floor and18th – 22nd floors)

Acquisition Price

41.95 billion yen

Acquisition Price

33 billion yen

Acquisition Price

20 billion yen

42

VIII - 5. Property Details: Office Buildings

Property

Kanda Nishiki-cho 3-chome Building(formerly called “Sumitomo Corporation
Nishiki-cho Building”)

Address

Kanda Nishiki-cho, Chiyoda Ward, Tokyo

Floor Area

Property

Akasaka Oji Building

Property

Shiba-Koen Building

12,169.78m2

Address

Akasaka, Minato Ward, Tokyo

Address

Shiba, Minato Ward, Tokyo

Floor Area

10,063.05m2

Floor Area

4,958.29m2

Completion

March 1973 (large-scale renovation
undertaken in November 2001 andearthquake-resistant reinforcement
construction implemented in October 2009)

Completion

April 1989

Completion

May 1991

Ownership

Co-ownership (1st – 7th floors)

Ownership

Title

Title

Title

12.7 billion yen

Acquisition Price

9.66 billion yen

Acquisition Price

Acquisition Price

5.77 billion yen

43VIII - 5. Property Details: Office Buildings

Shinkawa Chuo Building

Property

Kanda Park Plaza

Property

Faret East Building

Address

Sinkawa, Chuo Ward, Tokyo

Address

Kajicho, Chiyoda Ward, Tokyo

Address

Akebonocho, Tachikawa City, Tokyo

Floor Area

7,981. ㎡

Floor Area

5,511.83m2

Floor Area

16,206.34m2

Repair work to enhance earthquake resistance in2003

Completion

December 1994

OwnershipTitle

Co-ownership (2nd – 5th and a part of the
6th and 8th floors)

Acquisition Price

2.091 billion yen

Property

27

Completion

July 1987

Completion

Title

Ownership

Title

Acquisition Price 5.61 billion yen

November 1959

Acquisition Price 5.156 billion yen

44VIII - 6. Property Details／Residential
Property

Fukasawa Towers H&I

Address

Fukasawa, Setagaya Ward,Tokyo

Floor Area

12,135.36m2

Completion

June 2004

Title

Co-ownership (H&I)

AcquisitionPrice

10.635 billion yen

Ecology Toyosu Procentury

Property

Toyosu, Koto Ward, Tokyo

Address

9,630.96m2

Floor Area

January 2005

Completion

Ownership

Title

5.16 billion yen

Acquisition
Price

45

VIII - 6. Property Details／Residential

Property

Top Residence Nihonbashi
Kayabacho

Address

Nihonbashi Kayabacho,
Chuo Ward, Tokyo

Floor Area

4,540.70m2

Completion

Property

Top Residence Yoga

Address

Tamagawadai, Setagaya Ward,Tokyo

Floor Area

1,894.35㎡

Completion

February. 2008

Ownership

Title

Ownership

1.2234 billion yen

Acquisition Price

1.165 billion yen

Property

Impress Musashi-koganei

AddressNakamachi, Koganei-shi,Tokyo

Floor Area

2,471.30 m2

February,2004

Completion

June.2008

Title

Ownership

Title

Acquisition Price

2.40 billion yen

Acquisition Price

46

VIII - 7. Property Details: Retail Properties and Other Properties

Property

Sagamihara Shopping Center

Property

Ito-Yokado Higashi-Narashino Store

PropertyMusashiurawa Shopping Square

PropertyOAK PLAZA

Address

Kobuchi, Sagamihara City,
Kanagawa Pref.

Address

Higashinarashino, Narashino City,
Chiba Pref.

Address

Bessho, Minami Ward, Saitama
City, Saitama Pref.

Address

Kanda Awajicho, Chiyoda Ward,Tokyo

Floor Area

56,351.42m2

Floor Area

45,338.37m2

Floor Area

28,930.36m2

Floor Area

6,121.85m2

Completion

August 1993

Completion

October 1994

Completion

October 2005

Completion April 1985
Completion of the conversion in 2007

Title

Ownership

Title

OwnershipTitle

Co-ownership (50%)

Title

Ownership

AcquisitionPrice

8.9 billion yen

AcquisitionPrice

4.335 billion yen

AcquisitionPrice

2.59 billion yen

AcquisitionPrice

12 billion yen

47

IX. Appendix: Structure of Related Parties48

IX - 1. Characteristics of Top REIT and Operational Strategies
Top
Top REITREIT Asset
Asset
Management
Management (TRAM)(TRAM)

Asset
Management

Top
Top REIT
REIT

1. Skilled Management of a Diversified Portfolio(1) Pursuit of both external growth and quality of assets managed

Diversified Portfolio(2) Pursuit of stability and growth potential of profitability through uniqueasset class

Development
Development
Brokerage
Brokerage
Property
Property
Management
Management

Capital+Human
Resources

Office(3) Strategic application of commissioned reports from a think tank

DNA
DNA

RetailThree
Three Major
Major
Asset
Asset Types
Types

Residential

Other Asset
Types

2. Optimal Application of Sponsor Strengths

Asset
Asset
Management
Management

Sponsors
Sponsors
Sumitomo Mitsui Trust
Bank, Limited.

(2) Agile acquisition of properties through warehousing function(3) Achieving internal growth through “management-added benefits”

38%

Nippon Steel City Produce
A wholly-owned subsidiary of
Nippon Steel

31%

Ensuring SteadyRevenue

SupportOji Real Estate
A wholly-owned subsidiary of
Oji Paper(1) Steady external growth through pipeline function

i.e., hotels andwarehouses

31%

Steady Growth ofPortfolio

Maximizing Unitholders’ ValueSponsors’Sponsors’Strengths
Strengths

Utilizing Sponsor Strengths
Inheriting Sponsors’ DNATRAM was established in collaboration with three firms – Sumitomo Mitsui Trust Bank,

Excellent personnel have been dispatched to TRAM from the three sponsors toensure real estate investment expertise as well as inheritance of their corporategroups’ assets, that is, a long-term strategic view and diversified know-how acquired
through each of the sponsor’s businesses.

, Nippon Steel City Produce and Oji Real Estate.



Sponsor skills shall be utilized to achieve steady growth by applying their real estatedevelopment abilities, brokerage networks and management skills, including leasing
activities that utilize the leasing demand from sponsors’ groups/clients.
Number of group companies (as of March 31, 2012)
Sumitomo Mitsui Trust Holdings Group101

Nippon Steel Group363

Oji Paper Group

344

49

IX - 2. Overview of Asset Manager
Name
Address

Top REIT Asset Management Co., Ltd.
Nittetsu Nihonbashi Building 1-13-1 Nihonbashi, Chuo Ward, Tokyo

GeneralGeneral Meeting
Meeting ofof Stockholders
Stockholders(※) To be planed to relocate to 1-3-7 Yaesu, Chuo Ward, Tokyo,
on August 13, 2012.

AuditorBoard of Directors

EstablishedOct. 22, 2004

Paid-in Capital
Shareholders¥300mnSumitomo Mitsui Trust Bank, Limited. 38%
Nippon Steel City Produce, Inc. 31%
Oji Real Estate Co., Ltd. 31%

Business
Description

Investment and Management Committee

Investment
Investment management business
Department(Registered Financial Instruments
Business Operator No. 365 (Kinsho), issued by the
Director-General of the Kanto Local Finance Bureau)

Risk and Compliance Committee

Representative
Director and President
Compliance Officer
AssetManagement
Department

Finance
Department

Planning and
Administrative
Department

Compliance
OfficeFinance and Accounting GroupIR Group※The head of the Compliance Officeconcurrently serves as the Compliance
Officer

Directors

President and Representative
Director:

Nobuhito Endo

Milestones

Dec. 10, 2004:

Top REIT Asset Management (TRAM) obtained a license as a real estate agent (The Governorof Tokyo No. (1) 83904)
TRAM obtained approval for a discretionary agent license for real estate transactions(The Minister of Land, Infrastructure and Transport No. 35)
TRAM obtained approval as an asset manager for an investment corporation(The Prime Minister No. 47)
TRAM entered into an Asset Management Agreement with Top REIT, Inc.
TRAM was deemed a Registered Financial Instruments Business Operator (Investment
Management Business), No. 365 (Kinsho), issued by the Director-General of the Kanto Local
Finance Bureau
TRAM formally submitted applications to register as Financial Instruments Business Operator(Investment Management Business)
TRAM renewed a license as a real estate agent (The Governorof Tokyo No. (2) 83904)

May 10, 2005:
June 28, 2005:
Nov. 2, 2005:
Sept. 30, 2007:

Nov. 27, 2007:
Dec. 10, 2009:

Portfolio Management Group50

IX - 2. Overview of Asset Manager【 Decision-Making Process 】

Report of minority opinions(Note 1)

(Note 2)

Risk and Compliance
Committee
Department in chargeof preparing proposal

Compliance Office

Examination

Examination
anddecision(Rejection)
ReturnBoard of Directors
Final
Decision

Investment andManagement Committee

Examination
anddecision(Rejection and/or Suspension)(Note 3)

Examination
anddecision(Rejection)(Note 1) Proposals will be passed to the Risk and Compliance Committee if they fall under eitherof the following:• Material transactions with interested parties defined in the rules on transactions with interested parties(a unanimous vote is required in this case.)• The head of the Compliance Office recognizes the discussion of the issues in the Risk and Compliance Committee to be necessary.
(Note 2) Proposals will be passed to the Board of Directors if they fall under any of the following:• The price of the proposed acquisition or sale is over 10 billion yen and over 10% of Top REIT’s total assets.
• Material transactions with interested parties defined in the rules on transactions with interested parties• Forward commitment transactions• Capital raising plans (final decisions on raising capital shall be made by the Board of Directors of Top REIT.)(Note 3) The head of the Compliance Office can suspend discussions and decisions and return the item to the Department in charge of the proposal if he or she
judges that the item has legal problems in the process of discussions or decision making at the Investment and Management Committee.

51

Contact
IR Contact
Takashi Mizuno,
Tomio Kurokawa,
Junko Yoshii
Investor Relations
Top REIT Asset Management Co., Ltd. (Asset Manager)
Phone: +81-3-3243-2181
Fax:+81-3-3243-2182
E-mail: info-top@top-reit-am.co.jp
HP:
http://www.top-reit.co.jp/english/
The contents of this document, including summary notes, quotes, data and other information, are provided solely
for informational purposes and not intended to constitute an offer, solicitation and/or promotion of any specificproducts including investment units of Top REIT, Inc..
Forward looking statements in this document shall not be viewed as a guaranty of Top REIT’s future
performance.
Although every attention has been paid to the contents of this document, the accuracy and appropriateness of
the information included in this document is not guaranteed and the contents can be revised and/or cancelled
without notice.
All rights regarding use of these materials belong to Top REIT. No copy or use of the content shown in thesematerials shall be permitted without the prior consent of Top REIT.

52