December 14, 2011

Summary of Earnings Results for the
Eleventh Fiscal Period(From May 1, 2011 to October 31, 2011)
Top REIT, Inc. (listed on the Tokyo Stock Exchange with securities code 8982) hereby announces its earnings
results for the fiscal period ended October 31, 2011 (eleventh fiscal period).

1. Earnings Results for the Eleventh Fiscal Period
Eleventh Fiscal Period: From May 1, 2011 to October 31, 2011
Tenth Fiscal Period:
From November 1, 2010 to April 30, 2011
(1) Business Results
Eleventh
Fiscal Period
TenthFiscal Period

Eleventh
Fiscal Period
TenthFiscal Period

Operating
Revenue

Period-on-Period
ChangeOperating
IncomePeriod-on-Period
ChangeOrdinary
IncomePeriod-on-Period
Change¥5,812mn(2.6%)¥2,779mn(6.5%)¥1,986mn(9.5%)¥5,967mn(1.5%)¥2,971mn(1.6%)¥2,194mn(0.5%)Net
IncomePeriod-on-Period
ChangeNet
Incomeper Unit¥1,985mn(8.0%)¥12,809

2.4%

1.1%

34.2%

¥2,157mn(2.1%)¥13,922

2.6%

1.2%

36.8%

Ratio ofRatio ofRatio ofNet Income to
Ordinary Income to Ordinary Income toUnitholders’
Total Assets
Operating Revenue
Equity(Note) Net income per unit is rounded to the nearest yen.

(2) Dividends
Dividend
per Unit

Total Amount of
Dividends(excluding dividend inexcess of earnings)

Eleventh
Fiscal Period
TenthFiscal Period

Dividend in
Excess ofEarnings
per Unit

Total Amount of
Dividends in
Excess ofEarnings

Dividend
Payout Ratio

Ratio of
Dividends to
Net Assets¥12,809¥1,985mn¥0¥–mn

100.0%

2.4%¥13,922¥2,157mn¥0¥–mn

100.0%

2.6%(3) Financial Position

Eleventh
Fiscal Period
TenthFiscal Period

Total Assets

Net Assets

Ratio of
Unitholders’ Equity to
Total Assets

Net Assets per Unit

¥185,459mn¥84,245mn

45.4%¥543,520¥186,336mn¥84,418mn

45.3%¥544,632(Note) Net assets per unit is rounded to the nearest yen.

1(4) Cash Flows

Eleventh
Fiscal Period
TenthFiscal Period

Net Cash
Provided by (Used in)Operating Activities

Net Cash
Provided by (Used in)Investing Activities

Net Cash
Provided by (Used in)
Financing Activities

Cash and
Cash Equivalents
at End of Period¥3,066mn(¥3,372mn)(¥2,225mn)¥9,917mn¥3,026mn(¥318mn)(¥2,271mn)¥12,448mn

2. Forecast of Earnings Results for the Twelfth Fiscal Period
Twelfth Fiscal Period:

TwelfthFiscal Period

TwelfthFiscal Period

From November 1, 2011 to April 30, 2012

Operating
Revenue

Period-on-Period
ChangeOperating
IncomePeriod-on-Period
ChangeOrdinary
IncomePeriod-on-Period
Change¥5,641mn(2.9%)¥2,738mn(1.5%)¥1,998mn

0.6%

Net
IncomePeriod-on-Period
ChangeDividend per Unit (Note)(excluding dividend in excess of earnings)

Dividend in Excess of Earnings
per Unit¥1,967mn(0.9%)¥12,400¥0(Reference) Estimated net income per unit for the twelfth fiscal period: ¥12,690(Note) The Dividend per Unit is calculated based on the assumption that the distribution will be the amount remaining after deducting the
reduction reserves of expected capital gains of the disposition of real estate in the twelfth fiscal period from net income.

*Explanation on the Appropriate Use of Earnings Results Forecasts, and Other Matters of Special Note
The earnings results forecasts and other forward-looking statements contained in this document are basedon information currently available to and certain assumptions deemed reasonable by Top REIT.
Accordingly, the actual results may differ materially due to a variety of factors. Moreover, the forecasts
should not be construed as a guarantee of the dividend amount.

3. Others(1) Changes in Accounting Policies, Changes in Accounting Estimates and Restatements of Revisions
a. Changes in accounting policies due to amended accounting standards: No
b. Changes in accounting policies due to other factors from a. above:Noc. Changes in accounting estimates:
Nod. Restatements of revisions:No(2) Number of Investment Units Issued and Outstanding
a. Number of investment units (including own investment units) issued and outstanding at end of fiscal period
Eleventh Fiscal Period:
155,000 units
Tenth Fiscal Period:
155,000 units
b. Number of own investment units issued and outstanding at end of fiscal period
Eleventh Fiscal Period:
0 units
Tenth Fiscal Period:
0 units
This summary of earnings results is translated from the Japanese “Kessan Tanshin” report, dated
December 14, 2011, which is prepared in accordance with generally accepted accounting principles inJapan and Japanese law.
Unless otherwise stated, fractions less than the specified unit are rounded down to the nearest specified
unit for monetary amounts and rounded to the nearest specified unit for percentage figures.
24. Asset Management Performance
A. Brief Background of Top REIT
Top REIT, Inc. (Top REIT) was founded on November 2, 2005 based on the Act on Investment Trusts andInvestment Corporations (Act No. 198 of 1951, as amended) with Top REIT Asset Management Co., Ltd.
(Asset Manager) as the incorporator, and listed on the Real Estate Investment Trust Section of the Tokyo
Stock Exchange (TSE) (Securities Code: 8982) on March 1, 2006 with the number of investment units
issued and outstanding totaling 145,500 units. Later, Top REIT issued additional investment units (9,500
units) through a third-party allotment on March 23, 2006. As of the end of the eleventh fiscal period (October
31, 2011), the total number of investment units issued and outstanding stands at 155,000 units.
Top REIT works to conduct management with the aim of maximizing the investment value for its unitholders
by securing stable revenues over the medium to long term and achieving steady growth of its portfolio. To doso, Top REIT focuses on the two strategies of “skilled management of a diversified portfolio” and “optimal
application of the sponsors’ strengths.” As of the end of the eleventh fiscal period, its portfolio consists of 17
properties with a total acquisition value of ¥177,435 million.
B. Investment Environment and Management Performance<Investment Environment>(a) Economy in General
Although the Japanese economy continued to be in severe circumstances due to the Great East Japan
Earthquake in March 2011, there were signs of economic activities in Japan recovering from the shock of
the Earthquake and restoring calm. This was evident by, for example, the disrupted automotive,
semiconductor and other industry supply chains (supply system of parts, etc.) and production facilities
returning to normal at a rapid pace as well as individual consumption showing gradual recovery trends witheasing of the mood of voluntary restraint. However, in addition to ongoing response to power shortages
over the long term and rising costs due in part to raw material prices hovering at a high level, there areconcerns over rapid progress in the appreciation of the yen and it hovering at a high level for an extended
period, leading to mounting concerns over decreases in corporate earnings among export firms in particular.
Moreover, the increasingly severe European debt problem and concerns of slowdown in the U.S. economy,
stagnating growth of emerging countries and other factors are causing greater instability in the economic
climate worldwide. The situation ahead is thus estimated to be unpredictable.
(b) Real Estate Leasing Market[Office Buildings]
Reflecting the economic opaqueness , the vacancy rate in the office building leasing market for the five
central wards of Tokyo still hovers at a high level. There appeared to be no major impact on tenantevacuations such as from the Earthquake. However, movements to temporarily suspend or postpone
relocation plans were seen after the Earthquake among tenants that had been planning office relocations as ameans of reducing costs, increasing operational efficiency or other reasons. In addition, changes were foundin the selection of office buildings, such as movements to give preference to such buildings as thoseboasting high earthquake resistance performance or those equipped with an in-house power generator. Signsof reversal in rent levels appeared for certain Class S and A buildings in central Tokyo, but there were still
no signs of bottoming out overall. Under the circumstances of no economic recovery being foreseen, withthe large volume of supply of office buildings scheduled in and after 2012, there are such risks as the
supply-demand balance further worsening. Recovery in the leasing market is thus thought to require asubstantial amount of time.

3[Retail Properties]
According to the analysis of commerce trends in the July to September 2011 period compiled by the
Ministry of Economy, Trade and Industry, large-scale retail store (department stores, supermarkets) sales
value has gradually recovered from the impact of the mood of voluntary restraint adopted immediately after
the Earthquake and sales of certain luxury goods at department stores were seen. However, bad weather,heavy typhoons and other factors caused stagnant growth overall, centering on apparel and other seasonalcommercial goods. The result was ongoing severe circumstances of decrease for about three years sinceApril, 2008. Under such circumstances, major retailers held back from opening new stores and promoted
restructuring through the closing of unprofitable stores and such, as well as targeted improvement of
earnings through such means as reviewing business organizations. Therefore, as a business operator
engaged in the leasing of facilities, future trends of major retailers need to be closely monitored.
[Residential Properties]
The volume of new supply of rental residential properties in Tokyo and the Tokyo metropolitan area
remains at a low level due to developers holding back on development plans. On the other hand, there wasongoing population influx and stable demand from single-person and small households resulting in the
supply-demand moving towards a good balance. Rental condominiums boasting excellent location (area)
and transportation access and that are competitive in terms of also the rent level continue to maintain astable occupancy rate. While the rent level continues to hover on a weak note for luxury rental
condominiums, a ceasing of the fall in the rent level for rental condominiums comprised primarily of studiounits targeting single-person and small households was seen.
(c) Real Estate Transaction Market
Although transactions were stagnant at temporary due to the Earthquake, there were no obvious signs of thefeared impact on price. With limited market players, the transaction market was led by consistent real estatetransactions by REITs using funds procured from utilizing through public offerings. There were also
movements to arrange new funds, centering on foreign capital companies. However, with uncertainty in the
future Japanese and overseas economies and corporate earnings causing prolonged stagnation in real estateleasing market conditions and ongoing relatively favorable financing environment, the number of officebuilding transactions was at a low level as the gap in the price perspective between sellers and buyers did
not narrow and the transaction market is thus yet to recover. Despite relatively strong movements withregard to rental residential properties, declining trends in cap rates began to emerge for certain blue-chipproperties and future increase in transaction prices is thus forecast.
<Asset Management Performance >(a) Acquisition and Disposition of Assets
Top REIT began the eleventh fiscal period with 15 properties (total acquisition value: ¥175,047 million),and investigated possible acquisition of properties based on information collected and carefully selectedwith a focus on office buildings located in central Tokyo and residential properties located in central Tokyoand Tokyo metropolitan areas through not only the “optimal application of sponsors’ strengths,” but alsoestablished information channels. As a result, Top REIT acquired two residential properties using cash on
hand, Impress Musashi-Koganei on August 12, 2011 (acquisition value: ¥1,223 million) and TOP
Residence Yoga on October 14, 2011 (acquisition value: ¥1,165 million).
Thus, the number of properties owned by Top REIT expanded to 17 properties (total acquisition value:¥177,435 million) as of the end of the eleventh fiscal period.
Furthermore, on October 26, 2011, Top REIT decided to acquire Premier Stage Nihonbashi Kayabacho(anticipated acquisition date: February 1, 2012) and dispose the Nittetsu Honmachi Building (disposition
date: November 25, 2011). The disposition of Nittetsu Honmachi Building has been completed as planned.

4(b) Management and Maintenance of Portfolio Assets
The basic asset management strategy of Top REIT centers on sustaining and increasing revenue over the
medium to long term by maintaining and improving tenant satisfaction (the “Tenants First” policy) andkeeping operational management costs at an appropriate level. Top REIT strived to improve tenantsatisfaction by sustaining relationships of trust with tenants and discerning tenant needs via property
management companies in order to maintain and improve high occupancy rates. The lease contract withSony Computer Entertainment Inc., the major tenant at Akasaka Oji Building, was terminated as of
September 18, 2011 and Top REIT has strived to solicit successor tenants, but these leasing activities havenot provided results due to the delay in the recovery in corporate earnings and opaqueness of the economic
situation. As a result of such undertakings, the occupancy rate of Top REIT’s entire portfolio at the end of
the eleventh fiscal period was 97.3%.
Regarding maintenance, Top REIT followed up on ensuring that it had an appropriate grasp of theoperational management conditions and steady implementation of asset management plans for each
property. Top REIT also carried out renewal construction and repair work that contribute to enhancing thecompetitiveness of properties and maintaining and improving the functionality of properties based on asset
management plans, took steps to keep relevant costs at an appropriate level, as well as conducted efficientmanagement of resources.
Furthermore, there was minor damage to owned properties due to the impact of earthquake, but repair ofsuch damage is almost complete as of the end eleventh fiscal period.
C. Procurement of Funds
Top REIT procures funds by adopting a financial policy that is based on stable financial management.
In the eleventh fiscal period, Top REIT repaid ¥67 million in the long-term loans payable as agreed upon
using cash on hand. Furthermore, Top REIT did not newly procure funds as there were no borrowings whichbecame due for repayment, and new property acquisitions during the eleventh fiscal period were conductedusing cash on hand.
As a result, at the end of the eleventh fiscal period, the total amount of interest-bearing liabilities stands at¥94,037 million and the ratio of interest-bearing liabilities to total assets at 50.7%. Of the total amount ofinterest-bearing liabilities, 52.6% are interest-bearing liabilities with fixed interest rates and 100.0% are longterm interest-bearing liabilities (including the current portion).
Moreover, the ¥19,040 million in long-term loans payable due for repayment on November 30, 2011 wasrefinanced by long-term loans with 5 year periods on the same date to extend the remaining period ofinterest-bearing liabilities.
The credit ratings of Top REIT as of October 31, 2011 are as follows:
Credit rating agency
Moody’s Japan K.K. (Moody’s)
Rating and Investment Information, Inc. (R&I)

Issuer rating [Outlook]
A3 [Negative]
AA– [Stable]

D. Business Results and Dividends
As a result of the asset management and operations described above, Top REIT recorded the asset
management performance during the eleventh fiscal period of ¥5,812 million in operating revenue, ¥2,779
million in operating income and ¥1,986 million in ordinary income after deducting expenses concerning
borrowings, etc. and net income was ¥1,985 million.
5

As for dividends, with the aim of having an amount equivalent to profit dividends deducted as expenses
based on application of the special provision on taxation of investment corporations (Article 67-15 of the Act
on Special Measures Concerning Taxation [Act No. 26 of 1957, as amended; hereinafter, the “Special
Taxation Measures Act”]), Top REIT decided that the entire amount of unappropriated retained earnings ofthe eleventh fiscal period, excluding fractions of the dividend per investment unit that are less than ¥1, would
be paid out. Consequently, Top REIT declared a dividend per investment unit of ¥12,809.

5. Management Policy and Future Issues(a) Management Strategy for Existing Properties
Top REIT will continue to follow its basic asset management strategy that centers on sustaining andincreasing revenue over the medium to long term by maintaining and improving tenant satisfaction (the“Tenants First” policy) and keeping operational management costs at an appropriate level. Under thisstrategy, Top REIT will focus on sustaining relationships of trust with tenants and leasing vacant spaces, etc.
and striving to maintain stable occupancy rates over the medium to long term. Furthermore, Top REIT
positions the leasing activities to attract subsequent tenants for Akasaka Oji Building as a top priority andwill focus on leasing activities to attract subsequent tenants as early as possible and selecting candidates
with high potential from a wide range of sources while continuously approaching candidates currently
considering .
Top REIT will also work to ensure an appropriate perception of the operational management conditions foreach property while steadily implementing such measures as to sustain and improve revenues and keep
operational management costs at an appropriate level. In addition, Top REIT will carry out systematic
repair work and such to enhance the competitiveness of properties and to maintain and improve thefunctionality of properties, in an aim to secure stable revenues over the medium to long term.
(b) Investment Strategy for New Properties
Top REIT aims to increase its dividends over the medium to long term by realizing external growth throughacquisitions of new properties. Along with continuing to further utilize pipeline support functions fromsponsor companies and utilizing various cultivated information channels, Top REIT will collect information
on new properties from a wide range of sources.. Based on this information, Top REIT will consider
investment targets centering on highly competitive office buildings in central Tokyo including residential
properties that are expected to have stable occupancy among office buildings, retail properties, residential
properties and other asset classes. By doing so, Top REIT aims to expand the portfolio size while improving
its quality.
Furthermore, Top REIT makes it a management policy to keep the ratio of the investment amount perproperty at less than 20% of the entire portfolio as a target over the medium to long term. For reference, theacquisition value of the NEC Head Office Building accounts for 23.6% of the total acquisition value of Top
REIT’s properties as of the end of the eleventh fiscal period. Going forward, Top REIT will work to reduce
the risk of concentration on specific properties by steadily advancing further external growth.
(c) Financial Strategy
Top REIT will continue to implement diversified and flexible fund procurement operations in preparation
for acquisition of new properties and refinancing of existing loans, etc. While securing mobility andflexibility in fund procurement, Top REIT will work to reduce the risk involved in fund procurement byextending borrowing periods and spreading out the repayment dates. At the same time, Top REIT will
manage the risk of interest rate fluctuations by taking into account the balance of borrowings at floating andfixed interest rates, as it discerns the interest rate trends. Moreover, financial soundness will be maintainedby keeping the leverage at an appropriate level.

6

(d) Compliance and Risk Management, etc.
In addition to the supervision of the Executive Officer by Supervisory Directors at the Board of Directors
meetings and other occasions, Top REIT will continue its direction and supervision on the Asset Manager
so that it can conduct management operations with full care given to market risks, including rent decreases,
and credit risks as well as with a focus on the protection of unitholders’ interests in conducting transactions
with interested parties and on other compliance issues.

6. Significant Subsequent Events
Regarding the Disposition of Assets
Top REIT has disposed the owned property described below on November 25, 2011, after the end of theeleventh fiscal period (October 31, 2011). The overview of the disposition of the property is as follows:<Overview of Disposition>(i) Disposed Assets:(ii) Name of Property:(iii) Address:(iv) Disposition Price:(v) Book Value:(vi) Capital Gains:(vii) Sales Agreement Date:(viii) Disposition Date:(ix) Purchaser:

Trust beneficiary interest in real estate in Japan
Nittetsu Honmachi Building
1-10-24, Utsubohonmachi, Nishi Ward, Osaka City, Osaka (residentialbuilding address)¥1,300 million¥1,003 million (as of October 31, 2011)
Approximately ¥250 million
October 28, 2011
November 25, 2011
SK Housing Corporation［Reference Information］
Top REIT decided to acquire assets on October 26, 2011 as follows:<Overview of Acquisition>(i) Type of Title:(ii) Name of Property:(iii) Anticipated Acquisition Price:(iv) Date of Sales Agreement:(v) Anticipated Acquisition Date:

Ownership of trust beneficiary interest in real estate in Japan
Premier Stage Nihonbashi Kayabacho¥2,400 million
October 26, 2011
February 1, 2012

Furthermore, for details, please refer to the press release “Notice of Acquisition of Trust BeneficiaryInterest in Real Estate in Japan (Premier Stage Nihonbashi Kayabacho)” dated October 26, 2011.

7. Outlook for the Twelfth and Thirteenth Fiscal Periods
The earnings results forecasts for the twelfth fiscal period (from November 1, 2011 to April 30, 2012) and thethirteenth fiscal period (from May 1, 2012 to October 31, 2012) are as follows:
Fiscal Period

Twelfth Fiscal Period

Thirteenth Fiscal Period[period of asset management][182 days][184 days]¥5,641mn¥5,379mn

Operating Revenue
7Ordinary Income¥1,998mn¥1,783mn

Net Income¥1,967mn¥1,782mn

Dividend per Unit
(excluding dividend in excess of earnings)¥12,400¥11,500¥0¥0

Dividend in Excess of Earnings per Unit

(Note) The earnings results forecasts presented above are the current estimated figures calculated based on
certain assumptions. Accordingly, the actual operating revenue, ordinary income, net income, dividend
per unit and dividend in excess of earnings per unit may vary due to changes in the circumstances.
Moreover, the forecasts should not be construed as a guarantee of the dividend amount.

8Preconditions for Forecast of Earnings Results for the Twelfth Fiscal Period (from November 1, 2011 toApril 30, 2012) and the Thirteenth Fiscal Period (from May 1, 2012 to October 31, 2012)
Item
Management
PeriodPortfolio Assets
Number ofInvestment Units
Issued andOutstanding

Interest-Bearing
Liabilities

Operating
Revenue

OperatingExpenses

Preconditions and Assumptions
 Twelfth fiscal period: November 1, 2011 – April 30, 2012 (182 days) Thirteenth fiscal period: May 1, 2012 – October 31, 2012 (184 days) The forecast is based on 17 properties, adding trust beneficiary interest in real estate inPremier Stage Nihonbashi Kayabacho planned for acquisition on February 1, 2012, tothe 16 properties Top REIT owns as of December 14, 2011. Meanwhile, the actual
circumstances may change when the acquisition of the new property becomes difficult,the timing of the acquisition is delayed, or the acquisition or disposal of other properties.
 The number of investment units issued and outstanding is based on the number as of
October 31, 2011, which is 155,000 units, and assumes that no issuance of new
investment units will be made through to October 31, 2012.
 It is assumed that the total amount of interest-bearing liabilities were ¥94,037 million,
which is the amount as of October 31, 2011.
 For the twelfth fiscal period, the ¥19,040 million loans payable due for repayment on
November 30, 2011 were fully refinanced. Moreover, it is assumed that the ¥67 million
in long-term loans payable will be repaid on December 30, 2011 as agreed upon.
 For the thirteenth fiscal period, it is assumed that the ¥17,500 million loans payable due
for repayment on June 29, 2012 will be fully refinanced and the ¥67 million in longterm loans payable will be repaid on June 29, 2012 as agreed upon.
 For real estate rent revenue for existing properties, Top REIT takes into consideration
execution of new agreements, early termination of agreements, etc. that have been
finalized as of December 14, 2011, along with current real estate leasing market
conditions, and also takes into account factors that may cause fluctuations in suchaspects as risks of reductions in revenue due to decreased amounts of rent of tenants
when they reach their rent revision period hereafter. Furthermore, as for Akasaka Oji
Building, it is assumed only that the rent revenues will be received from subsequenttenants based on the terms of concluded lease contracts (including lease reservation
contracts) as of December 14, 2011.
 It is assumed that approximately ¥250 million of capital gains will be accrued in thetwelfth fiscal period from the disposition of Nittetsu Honmachi Building on November
25, 2011.
 Top REIT adopts a method of treating property, city planning and depreciable asset
taxes, etc. on real estate, etc. it owns, as expenses related to the rent business in theamount corresponding to the management period out of the assessed and determined
taxation amount. In addition, as for the acquisition of real estate or beneficiary interests
in trust in real estate, the adjustments equivalent to property tax for the acquired fiscal
year paid to the transferor will be included in acquisition costs, and thus will not berecorded as expenses in the corresponding period.
 It is assumed that the amount of property tax, etc. will be ¥609 million for the twelfth
fiscal period and ¥ 598 million for the thirteenth fiscal period.
 It is assumed that the depreciation and amortization will be ¥1,061 million for thetwelfth fiscal period and ¥1,087 million for the thirteenth fiscal period.
 Repair expenses for buildings, etc. may vary greatly from the forecasted amount due tovarious reasons. For example, emergency repair expenses may possibly arise due to
unexpected factors causing building damage, etc. Another reason is that repair expenses
are expenses that do not accrue periodically and, rather, the variation in the amount islarge depending on the fiscal period.
 Management operation fees are assumed by reflecting historical data, among otherfactors.
9Non-Operating
ExpensesDividend per
Unit

Dividend in
Excess ofEarnings per Unit
Other

 It is assumed that non-operating expenses for the twelfth fiscal period will be ¥741
million, of which interest on loans and interest expenses on investment corporation
bonds (including related expenses) will be ¥737 million.
 It is assumed that non-operating expenses for the thirteenth fiscal period will be ¥694
million, of which interest on loans and interest expenses on investment corporation
bonds (including related expenses) will be ¥ 689 million.
 Dividends (dividend per unit) are calculated based on the dividend policy stipulated in
Top REIT’s Articles of Incorporation.
 It is assumed that capital gains of approximately ¥250 million from the disposition of
Nittetsu Honmachi Building will be accrued in the twelfth fiscal period. Of the capitalgains, those from land are assumed to be internally reserved (approximately ¥80
million) by applying the “Special Provisions for Taxation in the Event of Advance
Acquisition of Land, etc. in 2009 and 2010” stipulated in Article 66-2 of the Special
Taxation Measures Act in order to reinforce financial standing. It is assumed that theremaining amount will be transferred into reduction reserves after income taxes deferred.
 For the thirteenth fiscal period, it is assumed that the internal reserve will not bereversed.
 Top REIT does not currently anticipate dividends in excess of earnings (dividend inexcess of earnings per unit).
 It is assumed that there will be no changes in legislation, taxation, accounting standards,
Tokyo Stock Exchange’s listing regulations, rules and requirements imposed by The
Investment Trusts Association, Japan that would impact the aforementioned forecasts.
 It is assumed that there will be no unpredictable material changes in general economic
trends and real estate market conditions, etc.

10

8. Financial Statements(1) Balance Sheets(Unit: thousand yen)
Tenth Fiscal Period(as of April 30, 2011)
AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Deferred tax assets
Income taxes receivable
Other
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Total property, plant and equipment
Intangible assets
Assets in trust and other intangible assets
Other
Total intangible assets
Investments and other assets
Lease and guarantee deposits
Long-term prepaid expenses
Other
Total investments and other assets
Total noncurrent assets
Deferred assets
Investment corporation bond issuance costs
Total deferred assets
Total assets

11

Eleventh Fiscal Period(as of October 31, 2011)

8,244,212
4,204,759
28,260259,065
18
267
2,333
12,738,917

5,405,178
4,512,649
27,275236,504
21
319
1,845
10,183,794

1,116,573(129,310)
987,262
4,452(2,596)
1,855
11,436(9,210)
2,226
1,370
(560)
810
4,888,525
58,107,314(9,962,605)
48,144,709
680,914(199,312)
481,601
212,861(81,959)
130,902204,392(81,894)
122,498
118,234,009
172,994,401

1,143,383(145,279)
998,103
4,452(2,732)
1,719
11,436(9,493)
1,943
1,370
(683)
686
4,888,525
59,611,048(10,964,364)
48,646,683
699,737(219,949)
479,788
242,090(92,931)
149,159
227,793(92,531)
135,261
119,440,939
174,742,811

－
191
191

2,343
170
2,513

10,000389,548
157,734
557,282
173,551,875

10,000304,061
176,125
490,187
175,235,512

45,93245,932
186,336,725

40,42040,420185,459,727

(Unit: thousand yen)
Tenth Fiscal Period(as of April 30, 2011)

Eleventh Fiscal Period(as of October 31, 2011)

Liabilities
Current liabilities
Operating accounts payable
Short-term loans payable
Current portion of long-term loans payable
Accounts payable – otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Derivatives liabilities
Provision for loss on disaster
Other
Total current liabilities

210,849―
19,175,000
262,699
254,237528
49,858868,261―
26,742
2,425

163,924―
36,675,000
254,070
261,532
512
63,072
941,986
―
747
3,647

20,850,602

38,364,493

8,500,000
66,430,000
144,487
5,993,537
79

8,500,000
48,862,500
144,487
5,342,641
35

81,068,104
101,918,707

62,849,665
101,214,158

82,260,100

82,260,100

2,157,918

1,985,468

2,157,918

1,985,468

84,418,018

84,245,568―――
84,418,018
186,336,725―
84,245,568
185,459,727

Noncurrent liabilities
Investment corporation bondLong-term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Long-term advances received
Total noncurrent liabilities
Total liabilities
Net Assets
Unitholders’ equity
Unitholders’ capital
Surplus
Unappropriated retained earnings (undisposed loss)
Total surplus
Total unitholders’ equity
Valuation and translation adjustments
Deferred gains or losses on hedges
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

12(2) Statements of Income(Unit: thousand yen)
Tenth Fiscal Period(November 1, 2010 –April 30, 2011)

Eleventh Fiscal Period(May 1, 2011 –October 31, 2011)

Operating revenue
Rent revenue – real estate

5,947,270

5,661,876

Other lease business revenue

20,165

150,602

Total operating revenue

5,967,436

5,812,479

2,414,304

2,479,757

450,347

424,168

Operating expenses
Expenses related to rent business
Asset management fee
Asset custody fee

8,367

8,358

Administrative service fees

63,117

63,912

Directors’ compensations

6,900

6,600

Audit fee

10,00010,000

Other operating expenses

42,80840,204

Total operating expenses
Operating income

2,995,845

3,033,001

2,971,591

2,779,477

3,373

3,894

Non-operating income
Interest income
Reversal of dividends payable

795

686

2,235

2,195

Reversal of provision for loss on disaster

－

1,672

Other

144

－

6,549

8,448

Interest expenses

615,788613,254

Interest expense on investment corporation bonds

42,03442,870

Amortization of investment corporation bond issuance costs

5,511

5,511

115,568

136,618

4,702

3,170

Insurance income

Total non-operating income
Non-operating expenses

Borrowing related expenses
Other
Total non-operating expenses

783,605

801,426

2,194,535

1,986,499

1,361

－

1,361

－

Loss on disaster

10,277－

Provision for loss on disaster

26,742－

Total extraordinary loss

37,019－

Income before income taxes

2,158,876

1,986,499

986

1,041

Ordinary income
Extraordinary income
Refunded Property taxes
Total extraordinary income
Extraordinary loss

Income taxes – current
Income taxes – deferred

(1)

(2)

Total income taxes

985

1,039

2,157,891

1,985,460

Net income
Retained earnings brought forward
Unappropriated retained earnings (undisposed loss)

13

26

8

2,157,918

1,985,468

(3) Statements of Changes in Net Assets (Unitholders’ Equity)(Unit: Thousand yen)
Tenth Fiscal Period(November 1, 2010 –April 30, 2011)

Eleventh Fiscal Period(May 1, 2011 –October 31, 2011)

Unitholders’ equity
Unitholders’ capital
Balance at the beginning of the period

82,260,100

82,260,100

Changes of items during the period
Total changes of items during the period――

82,260,100

82,260,100

2,204,126

2,157,918

Dividends from surplus(2,204,100)(2,157,910)

Net income

2,157,891

1,985,460

Total changes of items during the period(46,208)(172,449)

2,157,918

1,985,468

2,204,126

2,157,918

Dividends from surplus(2,204,100)(2,157,910)

Net income

2,157,891

1,985,460

Total changes of items during the period(46,208)(172,449)

2,157,918

1,985,468

84,464,226

84,418,018

Dividends from surplus(2,204,100)(2,157,910)

Net income

2,157,891

1,985,460

Total changes of items during the period(46,208)(172,449)

84,418,018

84,245,568(25,241)－

Changes of items other than unitholders’ equity (net)25,241－

Total changes of items during the period

25,241－――(25,241)－

Changes of items other than unitholders’ equity (net)25,241－

Total changes of items during the period

25,241－――

84,438,984

84,418,018

Dividends from surplus(2,204,100)(2,157,910)

Net income

2,157,891

1,985,460

Balance at the end of current period
Surplus
Unappropriated retained earnings (undisposed loss)
Balance at the beginning of the period
Changes of items during the period

Balance at the end of current period
Total surplus
Balance at the beginning of the period
Changes of items during the period

Balance at the end of current period
Total unitholders’ equity
Balance at the beginning of the period
Changes of items during the period

Balance at the end of current period
Valuation and translation adjustments
Deferred gains or losses on hedges
Balance at the beginning of the period
Changes of items during the period

Balance at the end of current period
Total valuation and translation adjustments
Balance at the beginning of the period
Changes of items during the period

Balance at the end of current period
Total net assets
Balance at the beginning of the period
Changes of items during the period

Changes of items other than unitholders’ equity (net)25,241－

Total changes of items during the period(20,966)(172,449)

84,418,018

84,245,568

Balance at the end of current period

14

(4)

Statements of Cash Dividend Distributions
For the period
from November 1, 2010
to April 30, 2011

For the period
from May 1, 2011
to October 31, 2011

Amount(yen) (Note 1)

Amount(yen) (Note 2)

I. Unappropriated retained earnings

2,157,918,140

1,985,468,894

II. Total Amount of Dividends

2,157,910,000

1,985,395,000(13,922)(12,809)8,140

73,894(Dividend per unit)
III. Retained earnings brought forward

Note 1: In accordance with the “cash distribution policy” stipulated in Article 34 of the Articles of Incorporation, the amounts ofdividends are limited to the amounts of income. The article also stipulates the policy that “Top REIT shall distribute amount inexcess of the amount equivalent to 90% of its distributable profits as stipulated in Article 67-15 of the Special Taxation
Measures Act.” Based on these policies, Top REIT decided on a total distribution of 2,157,910,000 yen as distribution ofincome for the period. This is the maximum value arrived at when the number of units issued and outstanding (155,000
units) is multiplied by an integer, within the limit of unappropriated retained earnings for the fiscal period.
Furthermore, Top REIT does not make cash distributions in excess of the profit as stipulated in Article 34-2 of the Articles
of Incorporation.
Note 2: In accordance with the “cash distribution policy” stipulated in Article 34 of the Articles of Incorporation, the amounts ofdividends are limited to the amounts of income. The article also stipulates the policy that “Top REIT shall distribute amount inexcess of the amount equivalent to 90% of its distributable profits as stipulated in Article 67-15 of the Special Taxation
Measures Act.” Based on these policies, Top REIT decided on a total distribution of 1,985,395,000 yen as distribution ofincome for the period. This is the maximum value arrived at when the number of units issued and outstanding (155,000
units) is multiplied by an integer, within the limit of unappropriated retained earnings for the fiscal period.
Furthermore, Top REIT does not make cash distributions in excess of the profit as stipulated in Article 34-2 of the Articles
of Incorporation.

15

(5) Statements of Cash Flows(Unit: thousand yen)
Tenth Fiscal Period(November 1, 2010 –April 30, 2011)
Net cash provided by (used in) operating activities
Income before income taxes
Depreciation and amortization
Amortization of deferred organization expenses
Amortization of right of trademark
Amortization of investment corporation bond issuance costs
Interest income and interest on securities
Interest expenses
Reversal of provision for loss on disaster
Provision for loss on disaster
Decrease (increase) in operating accounts receivable
Decrease (increase) in income taxes receivable
Decrease (increase) in consumption taxes receivable
Decrease (increase) in prepaid expenses
Decrease (increase) in other current assets
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable – other
Increase (decrease) in accrued consumption taxes
Increase (decrease) in advances received
Decrease (increase) in long-term prepaid expenses
Other, net
Subtotal

Eleventh Fiscal Period(May 1, 2011 –October 31, 2011)

2,158,876
1,086,104
―
21
5,511
(3,373)657,823―
26,742
14,206243―(8,494)―(5,169)(8,528)(84,285)
57,546(190,999)(17,961)

1,986,499
1,060,958
―
21
5,511
(3,894)
656,125(1,672)
―
831
(51)
―
22,560―(60,823)(16,847)
13,21473,72585,486(85,204)

3,688,263

3,736,441

3,757(664,738)(904)
3,026,378

4,396(648,830)(24,323)(1,057)
3,066,626(300,000)
400,000(366)(417,894)―(2,105)646,653(645,250)(318,962)――(26,283)(2,692,868)(2,466)―70,026(720,768)(3,372,360)

Net cash provided by (used in) financing activities
Increase in short-term loans payable
Decrease in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Dividends paid
Net cash provided by (used in) financing activities

6,700,000(13,400,000)
23,400,000(16,767,500)(2,204,100)(2,271,600)―――(67,500)(2,157,910)(2,225,410)

Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

435,816
12,013,156
12,448,972(2,531,143)
12,448,972
9,917,828

Interest income received
Interest expenses paid
Payment for Loss on disaster
Income taxes paid
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities
Payments into time deposits
Proceeds from withdrawal of time deposits
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust
Purchase of intangible assets in trust
Repayments of tenant leasehold and security deposits
Proceeds from tenant leasehold and security deposits in trust
Repayments of tenant leasehold and security deposits in trust
Net cash provided by (used in) investing activities

169. Portfolio Data
Asset
Class

Area

Central Tokyo
OfficeBuilding

Property Name(million yen)(million yen)

NEC Head Office Building

41,95047,500

27.5

Harumi Island Triton Square OfficeTower Y

33,00038,50022.3

Akasaka Oji Building

9,660

9,560

5.5

Kanda Park Plaza

5,156

4,930

2.9

Shiba-Koen Building

5,770

3,410

2.0

20,00014,2008.2

12,70014,000

8.1

Harumi Island Triton Square OfficeTower Z
Kanda Nishiki-cho 3-chome
Building
Faret East Building

2,091

2,390

1.4

KansaiNittetsu Honmachi Building(Note 2)

1,100

1,430

0.8

131,427

135,920

78.8

Sagamihara Shopping Center

12,00010,300

6.0

Ito-Yokado Higashi-Narashino Store

8,900

5,560

3.2

Musashiurawa Shopping Square

4,335

3,810

2.2

25,235

19,670

11.4

Fukasawa House Towers H&I

10,6356,960

4.0

Ecology Toyosu Procentury

5,160

4,780

2.8

Impress Musashi-Koganei

1,223

1,270

0.7

Top Residence Yoga

1,165

1,170

0.7

Subtotal (4 properties)

18,183

14,180

8.2

Central Tokyo

2,590

2,670

1.5

2,590

2,670

1.5

177,435

172,440

100.0

Tokyo
Metropolitan
Area

Subtotal (3 properties)Tokyo
Residential Metropolitan
Area
Property

Other
Property

(%)

Tokyo
Metropolitan
Area

Subtotal (9 properties)

RetailProperty

AcquisitionPrice

As of October 31, 2011
Appraisal
Investment
Value atBreakdown
End of Period(Note 1)OAK PLAZA

Subtotal (1 property)

Total (17 properties)(Note 1) The investment breakdown is the ratio of the appraisal value at end of period for the applicableproperty or the applicable asset class to the sum total of the appraisal value at end of period for allproperties in the portfolio and is rounded to the first decimal place.
(Note 2) Disposition of Nittetsu Honmachi Building has been completed on November 25, 2011.

17

For more information, please visit our website http://www.top-reit.co.jp/english/
Contact for inquiries in Japanese:
Top REIT Asset Management Co., Ltd. (Asset Manager)
Koji Murata, Director, General Manager, Finance Department+81-3-3243-2181
Contact for inquiries in English:
Top REIT Asset Management Co., Ltd. (Asset Manager)
E-mail address: info-top@top-reit-am.co.jp

DISCLAIMER:
Top REIT, Inc. makes no assurance or warranty with respect to the completeness or accuracy of this English
translation. In the event of any discrepancy between the Japanese original and this English translation, theJapanese original shall prevail. For complete and accurate information, please refer to the Japanese original.

18