Tenth Fiscal Period

Semi-Annual Report
May 1, 2008

October 31, 2008

Profile
Nomura Real Estate Office Fund, Inc. (referred to as “Nomura Office Fund” or the“Company” hereafter) was listed on the Tokyo Stock Exchange on December 4,
2003 as a real estate investment corporation formed to own and invest in officeproperties, subject to the Law Concerning Investment Trusts and Investment
Corporations of Japan. The Company’s basic investment policy is to assure stable
rent revenues and steady portfolio growth over the medium- to long-term.
Nomura Real Estate Asset Management Co., Ltd. (referred to as“NREAM”
hereafter), a wholly owned subsidiary of Nomura Real Estate Holdings, Inc. is incharge of asset management on behalf of Nomura Office Fund in accordancewith the basic investment policy as described above. Through coordination with
Nomura Real Estate Holdings, Inc. and other group companies, NREAM aims toachieve these goals and more.

Strength of Nomura Office FundJ-REIT with a large-capitalization specialized in office buildings■ Portfolio of 46 properties at a total acquisition price of¥362.2 billion (as of October 31, 2008)■ Market capitalization of ¥168.1 billion (as of October 31, 2008)■ Constituent of MSCI Standard Index
Track records of stable managements■ Ten consecutive fiscal periods of growth in operating revenues
and net income■ Steady growth in DPU
Collaboration with Nomura Real Estate Group■ NREAM, in charge of the Company’s asset management,
belongs to Nomura Real Estate Group■ Supported by the group companies through provision of sales informationand management expertise
Rated A or more by three domestic and foreign rating agencies
Rating and Investment Information, Inc.

Issuer rating: AA-Standard & Poor’s
Ratings Services

Long-term rating: A
Short-term rating: A-1

Moody’s Investors Service, Inc.

Issuer rating: A2■ Holding to conservative financial strategies

Unit Price (¥)

Operating Revenues (Lth)Market Capitalization (¥ mln)

Net Income (Lth)(¥ mln)1,600,000

900,000

1,400,000

750,000

16,00014,000
14,11412,0001,200,000

600,000

14,520450,000

800,000

300,000

400,000
Dec. 4 Apr. 30 Oct. 29 Apr. 28 Oct. 31 Apr. 28
2003 2004
2004
2005
2005
2006

150,000
0Oct. 31 Apr. 27
2006
2007

Oct. 31 Apr. 30
2007
2008

Oct. 31
2008

17,225
16,750 16,918 16,923
13,925

10,739 11,090

11,968 12,183

8,000
6,656

14,00010,000

7,106

4,531
2,606

2,681

3,484

3,596

4,229

4,466

4,486

4,499

5,256

1,526

0

8,000
6,000
4,000
2,000

1st
2nd
3rd
4th
5th
6th
7th
8th
9th
10th
Period Period Period Period Period Period Period Period Period Period

Contents

16,00012,000

6,000

2,000

(¥)

18,000

8,641

4,000
600,000

15,638 15,905

9,810

10,00010,2731,000,000

15,150Cash Distribution per Unit (Rth)To Our Investors ........................................................................... 2

Major Properties ......................................................................... 14

Financial Highlights ..................................................................... 3

Performance Report ................................................................... 17

Management Summary of the Tenth Fiscal Period ................... 4

Financial Section ........................................................................ 35

Portfolio Highlights .................................................................... 10

Profile of the Asset Management Company ............................ 48

Financial Status of the Tenth Fiscal Period ................................11

Business Structure ...................................................... Back CoverSummary of Portfolio Properties .............................................. 12

Corporate Data ............................................................ Back CoverTo Our Investors

Financial Highlights

Dear Investors,

FINANCIAL SUMMARY

We are delighted to be able to present to you the financial results for the tenth fiscal period (ended October 31, 2008)
and report on our activities during the period herein.
We booked operating revenues for this period of ¥13,925 million, current profits of ¥5,256 million, and net
income of ¥5,255 million. Cash distribution per unit was ¥17,225.
Some of the major developments during the tenth fiscal period included new investments in ”Shinjuku Sanshin

10th Period

9th Period

8th Period

7th Period

6th Period

from May 1, 2008
to Oct. 31, 2008

from Nov. 1, 2007
to Apr. 30, 2008

from May 1, 2007
to Oct. 31, 2007

from Nov. 1, 2006
to Apr. 30, 2007

from May 1, 2006
to Oct. 31, 2006

Operating Revenues¥ mln

13,925

12,183

11,968

11,09010,739Net Operating Income (NOI) (Note 1)

¥ mln

9,927

8,572

8,286

7,763

7,591

Income before Income Taxes

¥ mln

5,256

4,500

4,486

4,466

4,230

Net Income

¥ mln

5,255

4,499

4,486

4,466

4,229

Building”, ”Iwamoto-cho Toyo Building”, ”Central Kyobashi Building”, ”Central Shintomicho Building”, ”Sunworld

Total Assets¥ mln

401,684

353,730

326,711315,402

288,060

Yotsuya Building”, ”Toshin Meguro Building”, ”EME Hakata Ekimae Building”, ”Nomura Shibuya Dogenzaka

Unitholders' Capital¥ mln

185,455

156,767

156,767

156,767

156,767

Building”, and ”Nomura Nishi-Umeda Building.” As a result of these investments, the number of properties in the

Number of Units Issued

unit

305,123265,903

265,903

265,903

265,903

portfolio now totals 46, with total acquisition price of ¥362.2 billion, promoting further diversification of the portfolio.
Concerning property management, we continued to focus on raising of rents. The average occupancy rate
remained stable throughout this period, reaching 97.3% at the end of the period.
In terms of financing, regardless of the change in the funding environment, the Company has maintained good
relationship with financial institutions and secured stable funding, and continues to maintain a healthy balance sheet.
We will continue adhering to the conservative investment policies in future.

Net Assets per Unit¥

625,031

606,488606,510606,315

605,499

¥ mln

5,255

4,499

4,498

4,453

4,229

Cash Distribution per Unit¥

17,225

16,923

16,91816,75015,905

Funds from Operation (FFO) per Unit (Note 2)¥

23,22823,06922,71422,50921,585

Total Cash Distribution

Note 1: NOI (Net Operating Income) = Real Estate Rental Revenues − Real Estate Rental Expenses + Depreciation
Note 2: FFO per Unit = (Net Income + Depreciation + Amortization of Investment Corporation Bonds Issuance Costs − Real Estate Sale Profit/Loss) / Number of Units Issued

Lastly, we would like to thank you again for your patronage in the past periods, and would like to ask for yourcontinued support for the years to come.

CHANGES IN KEY FIGURES
Operating Revenues (¥ mln)

Total Assets (¥ mln)

Cash Distribution per Unit (¥)

13,92514,00012,00010,739 11,090

500,000

11,968 12,183

401,684

400,000

10,000288,060

8,000

300,000

6,000

200,000

315,402 326,711

16,750 16,918 16,923

17,225

15,905353,730
16,00014,0004,000

12,000100,000

2,000
0

18,0006th
Period7th
Period8th
Period9th
Period10th
Period0

6thPeriod7th
Period8th
Period9th
Period10th
Period10,0006th
Period7th
Period8th
Period9th
Period10th
PeriodCHANGES IN UNIT PRICE AND MARKET CAPITALIZATION
Unit Price (¥)

Market Capitalization (¥ mln)
900,000

1,600,000

750,000

1,400,000
Market capitalization (as of Oct. 31, 2008) .......................¥ 168,122 mln
All-time high price ............................................................¥1,560,000 per unit
All-time low price .............................................................¥ 407,000 per unit

Mitsuharu Sato
Executive Director
Nomura Real Estate Office Fund, Inc.

1,200,000

600,000

1,000,000

450,000

800,000

300,000

2nd public offering¥588,000

600,000

4th public offering¥926,100

3rd public offering¥740,782

150,000
5th public offering¥756,560

Initial public offering¥500,000
400,000
Dec. 4
2003

2

Apr. 302004

0Oct. 29
2004

Apr. 282005

Oct. 312005

Apr. 28
2006

Oct. 312006

Apr. 272007

Oct. 312007

Apr. 30
2008

Oct. 312008

3

In the Tenth fiscal period, we made new investments in ”Nomura

on foot from Shinjuku Station andShibuya Dogenzaka Building”, ”Shinjuku Sanshin Building”,

is surrounded by business and”Sunworld Yotsuya Building”, ”Iwamoto-cho Toyo Building”,

completion of the artificial ground,

Building” and ”EME Hakata Ekimae Building” (TotaluS

ne
Keio Li

Odakyu Dept. Store.

tn.

LUMINEoM

juku

Isetan
ar u

-san

cho

nou

me

c hi

Stn

.

Lin

juk
Shin

e

u-s

h
anc

om

eS

tn.

Line
injukuToei Sh

Takashimaya
Times
SquareNOF Minami Shinjuku
Building

OdakyuSouthern
Shinjuku
MAYNDS Tower Tower
JR Tokyo
General hospitalLinecurrently under construction, both

Tokyo

JR
ShinjukuStn.

Headofﬁce of
JR Eastcommercial facilities. After the”Central Kyobashi Building”, ”Central Shintomicho Building”,”Toshin Meguro Building”, ”Nomura Nishi-Umeda

juk
Shin
o
Kaid
yu
Kos

etr

Shin

Od

ak

yu

Dori
Meiji

The Property is located 4 minutesoM

Shinjuku
Gyoen

Stn.

Property Profile

Shinjuku Sanshin
BuildingTokyMitsukoshi

YoyogiNew Investments

Keio Line Shi

njuku Stn.

enjuku Stn

Lin
Toei OedoLine Shi

Shinjuku Sanshin Building

OdakyuManagement Summary of the Tenth Fiscal Period

NTT DoCoMo
Yoyogi Building

sides of the station will be

Osaka
Fukuokaacquisition price: ¥44.8 billion).

connected, further enhancing the

Location:

Shibuya-ku, Tokyo

location’s convenience as aDate Acquired:

June 25, 2008

business concentrated area.

Acquisition Price: ¥12,300 million

Central Tokyo

Ikebukuro
Ueno
Shinjuku

Sunworld Yotsuya Building

Tokyo
Shinjuku Sanshin Building

Nomura Shibuya Dogenzaka Building
Location:

Shibuya-ku, Tokyo

Date Acquired:

September 26, 2008

Shibuya
Nomura Shibuya Dogenzaka Building

ShinagawaAcquisition Price: ¥7,660 million

Property Profile

Quattro
PARCO
Tokyu
Department Storelocation as it faces ”Dogenzaka,”

Line

os

hi

Lin

e

ashiraE Space
Tower

To
k

yu

De

n- e

n -t

from the wide range of tenants.

Inok
Keio

Sunworld Yotsuya Building

Metr

o po

lita

pre
n Ex

ssw

ay

.
a Stn

demand for mid- to long - term

Shibuya Stn.
The Bank ofTokyo-Mitsubishi UFJ
ShibuyaMark City
Shibuya
Tokyu Plaza
Shibuya Chuo
Post Ofﬁce Shibuya
Line
u ya
Shib
Nomura Bldg.
No.3

y
hibu

Company can expect stable

NOA
Dogenzaka

Shibuya Stn.

ShibuyaEkimae Bldg.

ka
nza
ge
Do

JR S

buildings and retail stores. The

Shibuya109

Nomura Shibuya
Dogenzaka Building
Shibuya Theater
TSUTAYA

JR LineShibuya with many office

SEIBU DEPT.
STORE

Shibuya Shoto
Post Ofﬁce

Meiji DoriLoft

The Property has excellent
one of the busiest streets inMiyashita
Park

NOF Shibuya Koen-dori Building

Location:

Shinjuku-ku, Tokyo

Date Acquired:

June 25, 2008

Acquisition Price: ¥778 million

Cerulean Tower
Tokyu Hotel

Property Profile
The Property is located near Yotsuya San-chome Station on the Tokyo
Metro Marunouchi Line and Akebonobashi Station on the Toei Shinjuku
Line. It has excellent appeal in location and the Company can expect
stable demand from tenants who seek relatively low rent in Tokyo CBD
area.

Sh
Toei

injukuChuo University
Ichigaya Campus

Line Akebonobashi Stn.

Ministry of Defense

Sunworld Yotsuya Building

Tokyo ElectricPower Hospital

4

arun

ne
Li
ine
uL

Tok y
oM
etr
oN
am
JR Ch
uo a
nd S bo
ob

Shin
juku
Dori
i Lin
e

ouch

Stn.

YotsuyaTaxation Ofﬁce

oM

ku

Stn.

Metr

Yotsuya

The Graduate
University of Japan
Traditional Medicine
and Science

Tok y
o

Snow Brand
Milk Products
Headquarters

Yotsuyachome stn.

Yasukuni Dori

Tsun
oka
miz
aka
Dori

Ga
ien
Hi
ga
sh
iD
ori

YotsuyaFire Stn.
n
Yotsuya-Sa

Bank of Tokyo-Mitsubishi
UFJ

Sophia University
Yotsuya Campus

5

Iwamoto-cho Toyo Building
Location:

Chiyoda-ku, Tokyo

Date Acquired:

June 25, 2008

Central Shintomicho Building

Acquisition Price: ¥6,020 million

Property Profile

Property Profile

Location:

Chuo-ku, Tokyo

The Property, located near

Date Acquired:

June 25, 2008

Shintomicho Station on the Tokyo

Acquisition Price: ¥1,750 million

individual air-conditioning system,
appeal to tenants such as

Akihabara Stn.

Showa Dori

cho L

ine

To
k

AkashiElementary School
St. Luke’s
Collegeof Nursing

St. Luke’s
International
Hospital

St. Luke’s
Tower

Health Centerof Chuo-ku

Ehime Banke

Shinjuku
Tokyo

Hib

iya

Lin

ShibuyaCentral Shintomicho Buildingtro

Toshin Meguro Building

Location:

Chuo-ku, Tokyo

Date Acquired:

June 25, 2008

Acquisition Price: ¥2,550 million

Property Profile

ShinagawaToshin Meguro Building
Location:

Meguro-ku, Tokyo

Date Acquired:

June 25, 2008

Acquisition Price: ¥1,340 million

Property Profile
The Property, located along Meguro Dori, a 7 minute walk from Meguro Station,e Line

ro

ay

gu
Me

has
h

Atre Meguro 2

Meguro Gajoen
ine

Tok
y

Arco tower

Kyobashi Plaza*The right side building is notincluded in the Property.

ro L
egu

Sakuragawa Parkessw
n Exprpolitane
MetroMeguro Li
No.2

i Do
oM
ri
Su etro
Hib
mi
iya
da
Lin Kayabac
Ri
ho S
e
ve
tn.
r

y

Mizuho Bank

uM

tn.

Sumitomo mitui
Banking
Corporation

Tok
y

eS

i
Meguro Dor

Namboku LineTok yo Metro i Mita Lineand Toe

Hatchobori Stn.

Ch
uo
Do
ri

om

Hatch
obor
i Stn Shin
.
-o

Tak
a

rac

ho

Stn
.

Kyo
bash
i Stn
.

Chuo
Hatchobori
Post Ofﬁce

JR Keiyo Linetch

Toshin Meguro Building
MeguroMuseum of
Art.Tokyo

Tokyo
Metropolitan teien
Art Museum

manot
JR Ya

Stn
.

shi
nba

Sho
ine
wa
Dor
i

ine
aL

aL
k us

Gin
z
etro

A sa

oM

Tok
y

Toe
i

Tok y
o
a-i

ay a
b ac
Chuo
h
Police Ofﬁce o Stn.

Hotel
Princess
GardenNational Museum of
Nature and Science,Tokyoo Stn.

Gin
z

Tokyo
Stock
Exchange
Tokyo
ShokenK Kaikan

Hatchobori NF Building

Central Kyobashi Building
Dori

tn.

Takashimaya

Yae
su D
ori

Yaesu Fujiya
Hotel

Nihonbashi
COREDO Post Ofﬁce
Nihonbashi

hi S

and apparel industries looking for locations in Ebisu and Shibuya area.

Megur

Soto
bor
i Do
ri

Stn.

Daimaru
Dept.Store

Kaji
bas
hi

bas

Nihon
bash
i Stn.

Toke Nihon

Nih
o

zai L
in

yo

St

o To

Me
Tos tropo
hin lita
Kan n E
jo L xpre
ine ssw
a

Metr

n.

Tok yodemand as the property has strong appeal to tenants in the engineering, design,r

Steady demand from tenants looking for convenient location from Tokyo Station could be expected.

Tokyu Lines, has high visibility on the corner lot. The Company can expect stablevearea of approximately 250 sq. meters, building provisions such as individual air-conditioning system, etc.

accessible to several railway lines such as JR, Tokyo Metro, Toei Subway andRi

The Property, conveniently located near Tokyo Station, was completed in 1998, with the standard floor

ri
Do
ate
Yam

Iwamoto-cho
Toyo Building

Central Kyobashi Building

Me

Metropolitan
Expressway
No.1 Ueno Line

Tsukiji Hongwanji

TokyoElectric Power
Company

Ueno

yo
Tok

JR Yamanote Line
JR Keihin Tohoku Line

JR Chuo Line

tro Y
uraku

Iwamoto-cho Toyo Building

Chiba Bank
Li
ne

tn.

o Me

Ikebukuro

NOF Kanda
Iwamoto-cho Building

ku

da S

city, Tokyo and Ginza, etc.

hi
nj
u

K an

relatively low rent near the inner

JR Sobu LineCentral Kyobashi Building

6

Ginza
Capital Hotel

Kanda River

Iwamoto-cho Stn.

Yasukuni Dorimanufacturers, etc. who seek

Central Tokyo / Suburban Tokyo

To
ei
S

Dori
Chuo

Akihabara Stn.

tn.

etc. The Property has strong

NTT Data
Tsukiji Bldg.
Ts
uk
iji
S

business areas such as Akihabara and Kanda.

Mitsui Memorial
Hospital

Central Shintomicho Building

Toky

ine

building provisions such as

from tenants looking for locations near growing

NTT

aL

approximately 3,300 sq. meters,

It has excellent appeal and can expect stable demandHi
biyKanda Station and Akihabara Station on the JR Lines.

KyobashiTax Ofﬁce

Shin
tom
Chuo
ich
Ward Ofﬁce
oS
tn.
Ginza
Capital Hotel
Main Bldg.
tr oa standard floor area ofMe

Line, was completed in 1990, with

Shinjuku Line, also has convenient access to bothyoStation on the Tokyo Metro Hibiya

1 minute walk from Iwamoto-cho Station on the Toei

Shin
-oha
shi D
ori

Metro Yurakucho Line and Tsukiji

The Property, located on a corner lot on Showa Dori, a7

Other Regional Cities: Osaka Area
IbarakiTakarazuka
Itami

Suita

RENEWALS ENHANCE PORTFOLIO OCCUPANCY RATESShin Osaka
Osaka
Kyobashi
Nomura Nishi-Umeda Building

Nishinomiya”NOF Kobe Kaigan Building” was renovated to enhance appeals to prospective tenants by renewal of elevator hall on each floor,
as well as common hallways and rest rooms. As a result of improvement in competitiveness and tenant satisfaction, theTsuruhashi

occupancy rate rose by approximately 5%.

Nomura Nishi-Umeda Building
Location:

Kita-ku, Osaka City

Date Acquired:

September 26, 2008

Before
a
Umed

Os

ak

tn.
aS

e
Lin
Ma
in

e

ilw

ay

Umeda
DAIBIRU

DT Tower

After

c tr
Ele

Kitashinchi Stn.

hin

HERBIS
OSAKA

Ha

ns

JR Tozai Line

Nomura Nishi-Umeda
Building

Umeda Station on the subway Yotsubashi Line.
NTT

The Company can expect wide range of tenants’

Osaka Nakanoshima
Government Bldg.

i SujiYotsubash

Kitashinchi Station on the JR Line and Nishi-

needs as it has excellent location.

After

ic

Lin

xp
Hanshin E

subway Yot subashi Linein Osaka City, is adjacent to Osaka Station andJR

HiltonRalocation, located in Umeda area which is therepresentative business and commercial district

Nishi-Umeda Stn.

Osaka Chuo
Post Ofﬁce

Beforea Stn.
i Linei-UmedidosujHigashay M
Subw

Daimaru Dpt.
Store
Hanshin Dpt.
Store

Property Profile
The Property, an office building with superioreay Linbw hi
S u ac
m
ni
a
T

Stn.

Acquisition Price: ¥5,660 million

The Bank ofTokyo-Mitsubishi UFJ

Occupancy Rate of NOF Kobe Kaigan Building

DOJIMA AVANZAr e s s wa(%)
y No.11

Ikeda Line

98.6

98.6

100

Dojima River

98
96

93.8

93.8

May. 31. 2008
(Beginning of 10th Period)

Jun. 30. 200894

EME Hakata Ekimae Building

94.4

94.4

Jul. 31. 2008

Aug. 31. 2008

92
90

Property Profile

Other Regional Cities: Kyusyu Area

area, has excellent accessibility and high visibility from the

ku

ok

aE

xp

NTTDATA
Hakata Ekimae
Bldg.

ine

r es

sw

ay

Nishi-Nippon
City Bank
Head Ofﬁce

Oct. 31. 2008
(End of 10th Period)

EME Hakata Ekimae BuildingNo.2

Hakata

Ku
ko
Do
ri

Hakata Stn.

T
D aih

or ak
Hakatai u
Ward Ofﬁce
Canal
HakataCity
Shin-Mitsui
HakataBldg.
Tenjin-Minami Stn.
FukuokaAsahi
NOF Tenjin-Minami Building
Bldg.

Nishitetsu Tenjin O

with a prospect of further developing area.

oL.
Tenjin Stn
Fukuoka (Tenjin) Stn.
Fukuoka City Hall

Naka Riverlaunch the opening of the entire Kyushu Shinkansen Line,

uk

EME HakataEkimae Building

Line
muta

station. Also, the said area, in spring 2011, is scheduled toFu

Subway K

Oita

Saga

Fukuoka
Kotsu
Center Bldg.

Takeshita Dorifrom Hakata Station, a main station of the Kyushu economic

Me
iji
Do
ri

Sh
ow
aD
ori

The Property, located on a corner lot of Kuko Dori, 1 minuteSep. 30. 2008

RENEWALS ENHANCE PORTFOLIO PROFITABILITY
Elevators were renewed in the ”NOF Nihonbashi Honcho Building.” In addition to improved functionality and safety, the energy

Nagasakisaving effects resulted in significant 59% (about ¥1,000,000 p.a.) reduction of

Kumamoto

electricity costs.

Watanabe Dori Stn.
Yakuin Stn.

Miyazaki

Points of renewalt Improved safety by installation of door sensors

Location:Hakata-ku, Fukuoka City

Date Acquired:

June 27, 2008

Acquisition Price: ¥6,750 million

Kagoshimat Installation of handicap-accessible elevator unitst Enhanced sense of security by installation of security cameras and remotemonitoring systemt Improved operational efficiency and reduced waiting time through miniaturizationof control and driving systems and implementation of group management control.

Before renovation

100(Note)

After Renovation
After renovation

59% cost reduction

41(Note)

Note: Electricity cost for elevators as of October 2007 = 100

89Portfolio Highlights

Financial Status of the Tenth Fiscal Period

CHANGES IN OCCUPANCY RATE (AVERAGE)TURNING OF SHORT-TERM FLOATING-RATE DEBTS TO LONG-TERM FIXED-RATE DEBTS

The average occupancy rate maintained stable and high level throughout the tenth ﬁscal period.

The Company has secured ﬁnancial stability through promotion of long-term, ﬁxed-rate interest-bearing debt including issuanceof investment corporation bonds, to prepare for the future interest rate hikes. As of the end of the tenth ﬁscal period, the ratioof long- and short-term debt and ﬁxed and ﬂoating debt are as follows:
Total leasable space (000m2)

Average occupancy rate (%)

97.6

97.5

96.9

97.0

96.9

97.2

97.3

500

421

430

430

400

100.0

421

395

90.0

421

421

Ratio of long-term and short-term interest-bearing debts

300

80.0

100

60.0
50.0

Floating-rate:¥38.1 billion
20.9%

Long-term:¥133.0 billion
73.0%

200

70.0

Ratio of ﬁxed and ﬂoating interest-bearing debts

Short-term:¥49.1 billion
27.0%

Fixed-rate:¥144.0 billion
79.1%

0
Apr. 30,
2008(End of 9th Period)

May 31,
2008

Jun. 30,
2008

Jul. 31,2008

Aug. 31,2008

Sep. 30,
2008

Oct. 31,2008(End of 10th Period)

Note: “Short-term” includes long-term debts
to be repaid within one year.

Note: “Fixed” includes ﬂoating-rate debts
with ﬁxed-rates through interest-rate
swap transactions.

CHANGES IN SIZE OF PORTFOLIO

DIVERSITY OF REPAYMENT DATES (as of the end of Tenth fiscal period)

As indicated below, diversiﬁcation of the portfolio, which has steadily increased since listing, has also been promoted.

We have diversiﬁed the repayment dates of interest-bearing debts to avoid concentration on any speciﬁc period or timing, thus
reducing the reﬁnance risk and stabilizing the cash ﬂow.

(¥ bln)400
300

15 bldgs
12 bldgs
g

200

127.2

104.2

18 bldgs
151.5

23 bldgs

19 bldgs

210.1

184.6

30 bldgs

28 bldgs

259.1

240.8

31 bldgs
282.8

34 bldgs
292.4

37 bldgs

46 bldgs

362.2
317.4

(¥ bln)30

Debts

Investment Corporation Bonds

24.3 24.8
25
19
20

100

17.5
16 15.5015Initial Listing
Dec. 2003

1st Period
Apr. 30, 2004

2nd Period
Oct. 31, 2004

3rd Period
Apr. 30, 2005

4th Period
Oct. 31, 2005

5th Period
Apr. 30, 2006

6th Period
Oct. 31, 2006

7th Period
Apr. 30, 2007

8th Period
Oct. 31, 2007

9th Period
Apr. 30, 2008

10th Period
Oct. 31, 2008

10
8

10

8

8

6.5 6

5

4

5

4.5

5

ALLOCATION BY AREA AND PROPERTY (as of Oct. 31, 2008)
0
11th 12th 13th 14th 15th 16th 17th 18th 19th 20th 21st 22nd 23rd 24th 25th 26th 27th 28th 29th 30th 31st 32nd 33rd 34th 35th 36th 37th 38th 39th 40th 41st 42nd 43rd 44th 45th 46th 47th 48th 49th

Diversiﬁcation by Location
Other Regional Cities
30.3%
Central Tokyo
57.2%
Suburban Tokyo
12.6%

Other 36 Buildings
45.1%
Secom Medical Bldg.
3.2%
NOF Shibuya
Koen-dori Bldg.
3.3%
Shinjuku Sanshin Bldg.
3.4%
NOF Midosuji Bldg.
3.6%

Shinjuku Nomura Bldg.
10.7%
JAL Bldg.
9.1%
Omron Kyoto
Center Bldg.
6.5%
NOF Nihonbashi
Honcho Bldg.
5.7%
SORA Shin-Osaka 21
5.3%
Tennozu Park Side Bldg.
4.1%

Note : Central Tokyo ................... Six central wards consisting of Chiyoda, Chuo, Minato, Shinjuku, Shinagawa and Shibuya
Suburban Tokyo ................ Other areas of Tokyo and the Surrounding three prefectures including Kanagawa, Saitama and Chiba
Other Regional Cities ....... Major regional cities in other areas.
Note : Based on the acquisition price10(period)

Diversiﬁcation by Property (Main Top 10 Properties)

CREDIT RATINGS
We have obtained ratings from three domestic and foreign rating companies for the purpose of diversifying funding methods
such as issuance of investment corporation bonds, and improving creditworthiness in the capital market.
Rating Company

RatingOutlookRating and Investment Information, Inc.

AA−:

Issuer rating

StableStandard & Poor’s Ratings Services

A:
A−1:

Long-term corporate credit rating
Short-term corporate credit rating

StableMoody’s Investors Service, Inc.

A2:

Issuer rating

Stable11

Summary of Portfolio Properties

JR Chuo Line

16

Shinjyuku-ku

06
10

33
31 32
Sapporo03
17 15

Chuo-ku

11
Shibuya

JR SobuLine

14

01 Shinjyuku 20
12
18
09
Chiyoda-ku
05
07 Tokyo
Shibuya-ku

MAP
No.

Leasable Floor
Space (m2)Date Acquired

Acquisition Price(¥mln)

Ratio
(%)

17

Central Kyobashi Building

Chuo-ku, Tokyo

1,720.05

Jun. 25, 2008

2,550

0.7

NOF Minami Shinjuku Building

Shibuya-ku, Tokyo

2,464.71

Jun. 25, 2004

2,280

0.6

19

Central Shintomicho Building

Chuo-ku, Tokyo

2,467.14

Jun. 25, 2008

1,750

0.5

20

Sunworld Yotsuya Building

Shinjuku-ku, Tokyo

2,367.51

Jun. 25, 2008

Total Central Tokyo(20 Properties)

778

0.2

207,138

57.2

Dec. 5, 2003

7,550

2.1

183,739.79

Minato-ku

S u b u r b a n To k y o

am
JR Y

08

te L

ano

Shinagawa

ine

13 04
02

34

35

Sendai

Utsunomiya

SaitamaTokyo

Shin-Osaka

44 Hiroshima
45

Fukuoka

38 37

43

46

36

NagoyaShin-Yokohama

Kyoto

26
Tachikawa

41
39
42 40

Name of Property

HachiojiTokyo
Kichijoji

25

Leasable Floor
Space (m2)2830Date Acquired

21

24

29

Location

Chiba

23

Kanagawa

21

NOF Toyo-cho Building

Koto-ku, Tokyo

18,218.17

22

NOF Technoport Kamata Center Building

Ota-ku, Tokyo

13,652.45

Dec. 5, 2003

6,416

1.8

23

Toho Edogawabashi Building

Bunkyo-ku, Tokyo

2,058.97

Mar. 28, 2008

2,080

0.6

24

Toshin Meguro Building

Meguro-ku, Tokyo

1,610.07

Jun. 25, 2008

1,340

0.4

25

Crystal Park Building

Musashino City, Tokyo

3,900.85

Feb. 28, 2006

3,700

1.0

26

Faret Tachikawa Center Square

Tachikawa City, Tokyo

6,853.38

Dec. 5, 2003

3,290

0.9

27

NOF Kawasaki Higashiguchi Building

Kawasaki City, Kanagawa

8,253.41

Jun. 30, 2005

9,500

2.6

28

NOF Yokohama Nishiguchi Building

Yokohama City, Kanagawa

6,817.76

May 12, 2005

5,050

1.4

29

NOF Shin-Yokohama Building

Yokohama City, Kanagawa

8,074.83

Dec. 5, 2003

3,600

1.0

30

Yokohama Odori Koen Building

Yokohama City, Kanagawa

4,236.46

Sep. 28, 2007

2,993

0.8

45,519

12.6

Total Suburban Tokyo (10 Properties)

Shinkiba

22

27

Yokohama

Acquisition Price(¥mln)

73,676.35

Other Regional Cities

Kawasaki

Ratio
(%)

C e n t r a l To k y o

12Location

18

19

Shinagawa-ku

MAP
No.

Name of Property

01

Shinjuku Nomura Building

Shinjuku-ku, Tokyo

31,589.26

Dec. 8, 2003

38,730

10.7

02

JAL Building

Shinagawa-ku, Tokyo

42,084.11

Mar. 18, 2005

33,080

9.1

03

NOF Nihonbashi Honcho Building

Chuo-ku, Tokyo

19,233.25

Dec. 5, 2003

20,600

5.7

04

Tennozu Park Side Building

Shinagawa-ku,Tokyo

18,051.60

Feb. 27, 2004

14,800

4.1

05

Shinjuku Sanshin Building

Shibuya-ku, Tokyo

6,663.64

Jun. 25, 2008

12,300

3.4

06

NOF Shibuya Koen-dori Building

Shibuya-ku, Tokyo

3,420.16

Sep. 28, 2004

12,0003.3

07

Secom Medical Building

Chiyoda-ku, Tokyo

8,821.24

Sep. 1, 2006

11,500

3.2

08

NOF Shiba Building

Minato-ku, Tokyo

8,165.10

May 25, 2004

10,0002.8

09Nishi-Shinjuku Showa Building

Shinjuku-ku, Tokyo

5,663.19

Nov. 30, 2005

8,800

2.4

10

Nomura Shibuya Dogenzaka Building

Shibuya-ku, Tokyo

3,436.67

Sep. 26, 2008

7,660

2.1

11

NOF Tameike Building

Minato-ku, Tokyo

4,715.20

Sep. 29, 2005

7,400

2.0

12

Iwamoto-cho Toyo Building

Chiyoda-ku, Tokyo

4,117.26

Jun. 25, 2008

6,020

1.7

13

NOF Shinagawa Konan Building

Shinagawa-ku, Tokyo

7,667.55

Dec. 8, 2003

5,500

1.5

14

NOF Surugadai Plaza Building

Chiyoda-ku, Tokyo

4,160.94

Feb. 27, 2004

5,150

1.4

15

Hatchobori NF Building

Chuo-ku, Tokyo

2,854.83

Aug. 10, 2007

3,160

0.9

16

NOF Kanda Iwamoto-cho Building

Chiyoda-ku, Tokyo

4,076.38

Feb. 26, 2004

3,080

0.9

31

Sapporo North Plaza

Sapporo City, Hokkaido

13,635.86

Jun. 1, 2006

6,820

1.9

32

JCB Sapporo Higashi Building

Sapporo City, Hokkaido

9,062.04

Feb. 8, 2008

3,700

1.0

33

Kita-Sanjo Building

Sapporo City, Hokkaido

5,060.45

Sep. 28, 2007

3,430

0.9

34

NOF Sendai Aoba-dori Building

Sendai City, Miyagi

6,165.00

Nov. 30, 2005

3,200

0.9

35

NOF Utsunomiya Building

Utsunomiya City, Tochigi

5,887.40

Dec. 5, 2003

2,970

0.8

36

NOF Nagoya Yanagibashi Building

Nagoya City, Aichi

4,655.74

Sep. 29, 2005

3,550

1.0

37

Omron Kyoto Center Building

Kyoto City, Kyoto

34,616.84

Mar. 20, 2007

23,700

6.5

38

SORA Shin-Osaka 21

Osaka City, Osaka

21,653.31

Apr. 25, 2008

19,251

5.3

39

NOF Midosuji Building

Osaka City, Osaka

12,240.88

Nov. 30, 2005

12,9003.6

40

Nomura Osaka Building

Osaka City, Osaka

16,977.79

Dec. 5, 2003

6,410

1.8

41

Nomura Nishi-Umeda Building

Osaka City, Osaka

5,213.02

Sep. 26, 2008

5,660

1.6

42

Nomura Yotsubashi Building

Osaka City, Osaka

11,558.68

Dec. 5, 2003

3,940

1.1

43

NOF Kobe Kaigan Building

Kobe City, Hyogo

6,425.16

Dec. 5, 2003

3,280

0.9

44

Hiroshima Tatemachi NOF Building

Hiroshima City, Hiroshima

4,428.13

Nov. 30, 2005

2,100

0.6

45

Nomura Hiroshima Building

Hiroshima City, Hiroshima

7,905.94

Dec. 5, 2003

1,930

0.5

46

EME Hakata Ekimae Building

Fukuoka City, Fukuoka

7,585.43

Jun. 27, 2008

6,750

1.9

Total Other Regional Cities (16 Properties)

173,071.67

109,59130.3

Grand Total (46 Properties)

430,487.81

362,248100.0

Note : The Company owns "Nomura Shibuya Dogenzaka Building," "Secom Medical Building," "Toho Edogawabashi Building," "Crystal Park Building," "Yokohama Odori Koen Building,""JCB Sapporo Higashi Building," "Kita-Sanjo Building," "SORA Shin-Osaka 21" and "Nomura Nishi-Umeda Building" as real estate, and other properties in the form of beneficial
interest in real estate trusts.
Note : "Ratio" refers to the ratio of each asset based on acquisition price to the entire portfolio (total of 46 properties). As the figures in the above table have been rounded to thefirst decimal place, the total may not be 100.0%.
Note : Shinjuku Nomura Building is held through the quasi co-ownership of beneficial interest in real estate trust. The Company holds 50.1% of the quasi co-ownership. Total
leasable floor space and acquisition price in the above table indicates the figures related to the quasi co-ownership.
Note : The Company transferred a part of the land of NOF Technoport Kamata Center Building (co-owned area) on August 31, 2007. The acquisition price on the list is the amount
subtracting a book price of the asset to be transferred (13,905,628 yen) from the acquisition price before the transfer (6,430 million yen). The number of amount below unit istruncated.
Note : Although the name of "JCB Sapporo Higashi Building" is "Sapporo Higashi Building" as of now, it will be altered hereafter.

13

Major Properties

21

01

38

04

25

07

02

21 NOF Toyo-cho Building
1-6-35 Shinsuna Koto-ku, Tokyo

25 Crystal Park Building
1-1-3 Gotenyama Musashino City, Tokyo

14

02 JAL Building
2-4-11 Higashi-Shinagawa Shinagawa-ku, Tokyo

01 Shinjuku Nomura Building
1-26-2 Nishi-Shinjuku Shinjuku-ku, Tokyo

38 SORA Shin-Osaka 21
2-1-3 Nishi-Miyahara Yodogawa-ku, Osaka City, Osaka

04 Tennozu Park Side Building
2-5-8 Higashi-Shinagawa Shinagawa-ku, Tokyo

07 Secom Medical Building
7-7 Niban-cho Chiyoda-ku, Tokyo

15

Major Properties

37

Performance Report

03

15

SORA Shin-Osaka 21

Contents

Asset Management Report ......................................... 18
Profile of the Company ............................................... 23

37 Omron Kyoto Center Building
801 Minami Fudodo-cho, Horikawa Higashi-iru,
Shiokoji-dori, Shimogyo-ku Kyoto City, Kyoto

03 NOF Nihonbashi Honcho Building
2-7-1 Nihonbashi Honcho Chuo-ku, Tokyo

15 NOF Kawasaki Higashiguchi Building
3-1 Ekimae-Honcho Kawasaki-ku Kawasaki City, Kanagawa

16

Status of Investment Assets of the Company ............ 25
Capital Expenditures ................................................... 28
Expenses and Liabilities .............................................. 29
Trading during the Tenth Fiscal Period ........................ 32
Other Information ....................................................... 34

17

Asset Management Report
1. CHANGES IN KEY INDICATORS

2. OUTLINE OF INVESTMENTS IN THE TENTH FISCAL PERIOD
10th Period
9th Period
from May 1, 2008 from Nov.1, 2007
to Oct. 31, 2008 to Apr. 30, 2008

8th Period
from May 1, 2007
to Oct. 31, 2007

7th Period
from Nov.1, 2006
to Apr. 30, 2007

6th Period
from May 1, 2006
to Oct. 31, 2006

Operating Revenues¥ mln

13,925

12,183

11,968

11,09010,739of which Real Estate Rental Revenues¥ mln

13,925

12,183

11,958

11,09010,739Operating Expenses

¥ mln

6,993

6,359

6,243

5,953

5,556

of which Real Estate Rental Expenses

¥ mln

5,790

5,213

5,190

4,805

4,619

Operating Profits

¥ mln

6,932

5,823

5,725

5,137

5,182

Current Profits

¥ mln

5,256

4,500

4,486

4,466

4,230

Net Income

¥ mln

5,255

4,499

4,486

4,466

4,229

Total Assets¥ mln

401,684

353,730

326,711315,402

288,060%(+13.6)(+8.3)(+3.6)(+9.5)(+7.3)

Interest-Bearing Debts¥ mln

182,100

165,700

140,000

130,000

106,000

Net Assets¥ mln

190,711161,267

161,272

161,221161,004%(+18.3)(60.0)(+0.0)(+0.1)(+25.6)Unitholders’ Capital¥ mln

185,455

156,767

156,767

156,767

156,767

Number of Units Issued

units

305,123265,903

265,903

265,903

265,903¥

625,031

606,488606,510606,315

605,499

¥ mln

5,255

4,499

4,498

4,453

4,229

Cash Distribution per Unit¥

17,225

16,923

16,91816,75015,905
15,905(Changes from Previous Period)(Changes from Previous Period)

Net Assets per Unit
Total Cash Distributionof which Cash Distribution of Profits¥

17,225

16,923

16,91816,750of which Cash Distribution in excess of Profits

¥

–

–

–

–

–

ROA (Return on Assets) (Note 1)

%

1.4

1.3

1.4

1.5

1.5

Annualized ROA (Note 2)

%

2.7

2.7

2.8

3.0

3.0

ROE (Return on Equity) (Note 3)

%

2.8

2.8

2.8

2.8

2.7

Annualized ROE (Note 2)

%

5.6

5.6

5.5

5.6

5.4

Capital Adequacy Ratio (Note 4)

%

47.5

45.6

49.4

51.1

55.9

(Changes from Previous Period)%(+1.9)(63.8)(61.7)(64.8)(+8.2)LTV (Loan-to-Value) (Note 5)

%

45.3

46.8

42.9

41.2

36.8

Number of Operating Days

days

184

182

184

181

184

Payout Ratio (Note 6)

%

99.9

99.9

100.2

99.7

99.9

Number of Properties Held

bldgs

46

37

34

31

30

Total Leasable Floor Spacem2

430,487.81

395,330.99

362,773.62

350,712.00

316,132.49

676

583

533

517

512

Number of Tenants

tenants
%

97.3

97.6

97.9

98.5

98.2

Depreciation

¥ mln

1,793

1,601

1,518

1,478

1,471

Capital Expenditures

¥ mln

1,552

1,346

1,252

757

588

NOI (Net Operating Income) (Note 7)

¥ mln

9,927

8,572

8,286

7,763

7,591

FFO (Funds from Operation) (Note 8)

¥ mln

7,087

6,134

6,039

5,985

5,739

¥

23,22823,06922,71422,50921,585

Occupancy Rate

FFO per Unit (Note 9)

Note 1: “ROA (Return on Assets)” = Current Profits / {(Total Assets at the beginning of the period + Total Assets at the end of the period) / 2} x 100
As for the 6th period and the 10th period, the Total Assets were time-adjusted due to the additional issuance of investment units.
Note 2: “ROA” and “ROE” are annualized using the following number of operating days. 6th period: 184 days, 7th period: 181 days, 8th period: 184 days, 9th Period: 182 days, and10th Period: 184 days.
Note 3: “ROE (Return on Equity)” = Net Income / {(Net Assets at the beginning of the period + Net Assets at the end of the period) / 2} x 100
As for the 6th period and the 10th period, Net Assets is time-adjusted due to the additional issuance of investment units.
Note 4: “Capital Adequacy Ratio” = Net Assets / Total Assets x 100
Note 5: “LTV (Loan-to-Value)” = Interest-Bearing Debts / Total Assets x 100
Note 6: Rounded off to the first decimal place.
Note 7: “NOI (Net Operating Income)” = Real Estate Rental Revenues – Real Estate Rental Expenses + Depreciation
Note 8: “FFO (Funds from Operation) = Net Income + Depreciation + Amortization of Investment Corporation Bonds Issuance Costs – Real Estate Sale Profit / Loss
Note 9: “FFO per Unit” = FFO / Number of Units Issued

18

Nomura Real Estate Office Fund, Inc., incorporated on August 7, 2003 under the Law Concerning Investment Trusts and Investment
Corporations of Japan, listed the unit certificates in the Real Estate Investment Trust (REIT) Market of the Tokyo Stock Exchange on
December 4, 2003 (TSE code 8959). The Company’s basic investment policy is to assure stable income from, and steady growth of,investment assets over the mid- to long-term. In accordance with this policy, we invest in properties mostly for office use in threelargest conurbations and other major cities, or in property-backed securities that are backed by such properties.
Note: The Law Concerning Investment Trusts and Investment Corporations of Japan (Law No. 198 of 1951) is referred to as the “Investment Trust Law” hereinafter.
The term “unit certificates” are the securities issued by the Company and may be referred to as “investment units” or “units” hereinafter.
The term “investment assets” refers to those assets that belong to the Company.
Unless otherwise stated, for the purpose of this report, the concept of “property(ies)” is construed to include leasehold and superficies.
The term “property(ies)” refers to those assets defined in Section 27, Paragraph 1, Article (1) and (2), and “property-backed securities” refers to those assets defined in
Section 27, Paragraph 1, Article (3) respectively of the Articles of Incorporation of the Company.
The terms “property(ies)” and “property-backed securities” are collectively referred to as “property-related assets” hereinafter.
The properties and underlying properties of the property-related assets are collectively referred to as the “investment properties”.

(1) Market Environments
During this period, the outlook for the Japanese economy became increasingly uncertain. The impact of the global decline inshare prices and the sharp appreciation of the yen caused by the rapid change in the capital market triggered by the U.S. subprime loan problems is now affecting the actual economy, such as can be seen from the heightened concerns for deterioration of
corporate earnings.
(a) Office Leasing Market
Due to the slowing of overall economy, corporate demand for office space was not as strong compared to the past, and theoffice leasing market generally eased from the previous period.
In Tokyo and other metropolitan areas, large-scale properties with superior convenience maintained relatively stable occupancies. However, properties lacking competitiveness in size and location are experiencing difficulty filling vacancies, and theaverage vacancy rate is gradually rising in the overall market.
In addition, the prolonged economic weakness and increase in new supplies in some regional cities had some areas witnessing more significant market easing, leading to further polarization in occupancy rates depending on the property size andlocation, and also to a rise in the average vacancy rate.
As to the office rental levels, increase in new asking rent and rent increase for existing tenants are both showing signs ofslowing, reflecting the supply environment for office space.
(b) Real Estate Sales Market
The real estate sales market in this period saw an increase in the number of properties being sold. However, transactions byreal estate funds and real estate companies were subdued against the backdrop of conservative lending practices by domestic
and overseas financial institutions, with a clear indication of easing in the profitable real estate sales market.
In some regions, polarization of real estate prices was also apparent, and the market cap rate for profitable real estate in
the sales market has started to rise as the sales price declined.
(2) Status of Managements for the Tenth Fiscal Period
To comply with the basic policy of acquiring only such properties that would generate stable cash flow over the mid- to long-term,
the Company continues to invest in properties with strong competitiveness both in terms of locations and basic building features.
During the tenth fiscal period, we have proactively collected information in accordance with the above-mentioned basic policy. As a result of careful investigation of a number of investment opportunities which obtained through collaboration with Nomura
Real Estate Group, and the utilization of an asset management company’s own information pipeline, we made new investmentson Shinjuku Sanshin Building (Shibuya-ku, Tokyo, ¥12.3 billion, beneficial interest in real estate trust), Iwamoto-cho Toyo Building(Chiyoda-ku, Tokyo, ¥6.0 billion, beneficial interest in real estate trust), Central Kyobashi Building (Chuo-ku, Tokyo, ¥2.5 billion,
beneficial interest in real estate trust), Central Shintomicho Building (Chuo-ku, Tokyo, ¥1.7 billion, beneficial interest in real estate
trust), Sunworld Yotsuya Building (Shinjuku-ku, Tokyo, ¥770 million, beneficial interest in real estate trust), Toshin Meguro
Building (Meguro-ku, Tokyo, ¥1.3 billion, beneficial interest in real estate trust), and EME Hakata Ekimae Building (Hakata-ku,
Fukuoka City, ¥6.7 billion, beneficial interest in real estate trust) in June, 2008, Nomura Shibuya Dogenzaka Building (Shibuya-ku,
Tokyo, ¥7.6 billion, real estate) and Nomura Nishi-Umeda Building (Kita-ku, Osaka City, ¥5.6 billion, real Estate) in September,
2008.
As a result of the above acquisition, the Company’s total assets under management (“portfolio”) as of the end of the tenthfiscal period (October 31, 2008) has reached 46 properties totaling ¥362.2 billion (total acquisition price). We have steadily
increased the size of the portfolio, while seeking diversification of the assets.
In property management, although corporate tenants were showing conservativeness towards entering into office leases
due to the environment described in “(1) Market Environments (a) Office Leasing Market” above, we focused on the fact that thelevel of rents for existing tenants tends to be lower than new asking rents (market rent), and emphasized management strategies

19that would ensure portfolio revenue growth (or internal growth of portfolio). We maintained our efforts to secure stable occupancy rate, achieving smooth rent negotiations with existing tenants supported by improvement of the level of satisfaction and property competitiveness through strategic renewals, and implementation of proactive marketing strategies towards prospective tenants, reflecting the market environment.
As a result, the average occupancy rate remained stably around 97% throughout the tenth fiscal period, reaching 97.3% at
the end of the period. Furthermore, approximately 41% of leases renewed with existing tenants during this period agreed to
upward revision of rent, continuing the favorable performance albeit slightly lower than the previous period (approximately 47%).
Note 1: “Nomura Real Estate Group” refers to a corporate group consisting of the consolidated subsidiaries of Nomura Real Estate Holdings, Inc. (referred to as Nomura Real
Estate Holdings hereinafter) including Nomura Real Estate Development Co., Ltd. but excluding Nomura Real Estate Asset Management Co., Ltd. (referred to as theAsset Management Company hereinafter).
Note 2: The “beneficial interest in real estate trust” refers to a beneficial interest arising from a trust in which real estates are the primary underlying assets.

10th Period
9th Period
from May 1, 2008 from Nov 1, 2007
to Oct. 31, 2008
to Apr. 30, 2008

High
Low

(¥)
(¥)

874,000
407,000

1,200,000
655,000

8th Period
from May 1, 2007
to Oct. 31, 2007

7th Period
from Nov 1, 2006
to Apr. 30, 2007

6th Period
from May 1, 2006
to Oct. 31, 2006

1,540,000
935,000

1,560,000
956,000

1,040,000
803,000

4. CASH DISTRIBUTION
In order to qualify for special tax treatment under Article 67-15 of the Special Taxation Measures Law (Law No. 26 of 1957) to havemaximum cash distribution amount treated as deductible dividends, the Company distributed the entire unappropriated retained
earnings except for fractional amounts smaller than one yen per each investment unit. As a result, the amount of cash distribution
per unit for this fiscal period was ¥17,225.

(3) Status of Funding
Concerning funding through interest-bearing debts, the Company has the basic financial policy of funding through promotion of
long-term, diversified and fixed interest rate debts, for the purpose of securing financial stability and avoiding future interest raterisks. Based on this policy, the Company has implemented funding through long-term debts and issuance of investment corporation bonds, while establishing a total of ¥40 billion of commitment line for the purpose of flexible funding at the time of property
acquisition and reduction of refinancing risks, from the perspective of securing stable funding base.
During the tenth fiscal period, the Company completed the fourth issuance of investment units since listing with issuance of
39,220 units for ¥28.6 billion through public offering and third-party allotments, for the purpose of additional investment in newproperties and stabilization of balance sheet. As a result, the total number of investment units issued is 305,123 units, and thetotal unitholders’ capital is ¥185.4 billion.
Concerning debts, a total of ¥29.7 billion in borrowings and short-term investment corporation bonds have been repaid atmaturity, in part with funding through the above stated investment unit issuance. Furthermore, funding of ¥46.1 billion for investment in eight properties including “Nomura Dogenzaka Building” was achieved through usage of commitment lines, term loanborrowings and short-term investment corporation bond issuance, taking into consideration the structure of interest-bearing
debts. As a result, outstanding interest-bearing debt as of the end of tenth fiscal period was ¥182.1 billion.

Retained Earnings
Accumulated earnings
Total cash distribution(Cash distribution per unit)of which distribution of profits(Distribution of profits per unit)of which refund of capital(Refund of capital per unit)

3. STATUS OF CAPITAL

5. INVESTMENT POLICY AND FUTURE ISSUESThe Company issued additional investment units on May 27, 2008 and June 24, 2008 (Primary offering: 37,000 units and Third-party
allotment: 2,220 units) and procured ¥28,688 million in the tenth fiscal period. Changes in the number of units issued and unitholders’ capital before the tenth period are as follows.

(1) Investment Environments
The outlook for the Japanese economy is now clearly slowing, due to the turmoil in the financial market triggered by the U.S.
financial crisis. As a result of deteriorating funding environment caused by tightened investment capital liquidity in the real estatemarket, global economy including the Japanese economy is now entering a period of correction, and the difficult environment is
expected to continue.
Against these backdrops, we believe that conservative financial management and maintenance of funding capacities will
have increased significance going forward.
In the office leasing market, vacancy rates have been rising in major regional cities, and the trend is now also apparent in theTokyo metropolitan market. Therefore, the supply conditions in each submarket must be evaluated separately, and measures
should be implemented to maintain stable occupancy.
In the real estate sales market, the supplies are easing as discussed above. Hence, trends in the market cap rates for profitable real estate and in property liquidity driven by the changes in lending practices by financial institutions as well as in the capital
market environment such as interest rate hikes, demand attention.

Number of Units Issued (Unit)

Unitholders’ Capital (¥ mln)

Date

Type of Issue

ChangeBalance

ChangeBalance

NoteAug. 7, 2003
Dec. 4, 2003
May 19, 2004
Jun. 16, 2004
May 1, 2005
May 24, 2005
May 25, 2006
Jun. 23, 2006
May 27, 2008
Jun. 24, 2008

Initial private placement
Public offering
Public offering
Third-party allotment
Public offering
Third-party allotment
Public offering
Third-party allotment
Public offering
Third-party allotment

400
148,200
35,0001,050
44,0001,320
34,8001,133
37,0002,220

400
148,600
183,600
184,650
228,650
229,970
264,770
265,903
302,903
305,123200
71,506
19,866595
31,496944
31,143
1,013
27,0641,623

200
71,706
91,572
92,168
123,665
124,610
155,753
156,767
183,831
185,455(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)(Note 9)(Note 10)Note 1: Initial private placement at the offer price of ¥500,000 per unit to incorporate the Company.
Note 2: Public offering at the offer price of ¥500,000 (issue price of ¥482,500) to finance acquisition of new properties.
Note 3: Public offering at the offer price of ¥588,000 (issue price of ¥567,600) to finance acquisition of new properties and to repay borrowings.
Note 4: Third-party allotment to Nomura Securities Co., Ltd. at the offer price of ¥567,600 following the public offering on May 19, 2004.
Note 5: Public offering at the offer price of ¥740,782 (issue price of ¥715,837) to finance acquisition of new properties and to repay borrowings.
Note 6: Third-party allotment to Nomura Securities Co., Ltd. at the offer price of ¥715,837 following the public offering on May 1, 2005.
Note 7: Public offering at the offer price of ¥926,100 (issue price of ¥894,915) to finance acquisition of new properties and to repay borrowings.
Note 8: Third-party allotment to Nomura Securities Co., Ltd. at the offer price of ¥894,915 following the public offering on May 25, 2006.
Note 9: Public offering at the offer price of ¥756,560 (issue price of ¥731,470) to redeem the short-term investment corporation bonds and to repay short-term borrowings.
Note 10:Third-party allotment to Nomura Securities Co., Ltd. at the offer price of ¥731,470 following the public offering on May 27, 2008.

20[Changes in Price at the Tokyo Stock Exchange]
Changes in prices of the Company’s investment units listed on the Tokyo Stock Exchange are as follows.

10th Period
9th Period
8th Period
7th Period
6th Period
from May 1, 2008 from Nov 1, 2007 from May 1, 2007 from Nov 1, 2006 from May 1, 2006
to Oct. 31, 2008
to Apr. 30, 2008
to Oct. 31, 2007
to Apr. 30, 2007
to Oct. 31, 2006(¥000)(¥000)(¥000)(¥)(¥000)(¥)(¥000)(¥)

5,255,922
178
5,255,743(17,225)
5,255,743(17,225)–(–)

4,500,000
124
4,499,876(16,923)
4,499,876(16,923)–(–)

4,498,622
76
4,498,546(16,918)
4,498,546(16,918)–(–)

4,466,301
12,426
4,453,875(16,750)
4,453,875(16,750)–(–)

4,229,293
106
4,229,187(15,905)
4,229,187(15,905)–(–)(2) Investment Policy and Future Issues
With such environments in mind, the Company will employ the following investment policies to ensure stable income from, andsteady growth of the portfolio over the mid- to long-term.
(a) Property Management in a Mid- to Long-Term View
In addition to enhancement of property management to satisfy the requirements of existing tenants, proper recognition of theproperty features and market environments will help us market the potential tenants more organically. We will maintain anduplift the occupancy rate and level of rents in pursuit of sustainable and improved profitability of portfolio, namely internal
growth of portfolio, over the mid- to long-term.
By putting the know-how of Nomura Real Estate Group together, we seek to design the most suitable specifications of
how to manage and maintain each property in the most effective way, which in turn will ensure stable inflow of revenues.
In order to ensure stable revenues over the mid- to long-term, we will carry out strategic refurbishment and renovation
works to maintain and/or improve features of the properties, establishing their uniqueness and increasing their competitiveness.

21

Profile of the Company(b) Continuation of Conservative Financial Policy
In order to assure stable financing capability and increase creditworthiness in the market over the mid- to long-term, we will
pay particular attention to debt finance. We will seek to continuously keep the LTV low by using more long-term funding atfixed rates, diversifying the repayment dates, and increasing the number of institutions we bank with.
We will closely monitor the conditions of financial markets, and carefully deliberate and choose the best means of funding, including the usage of commitment lines, issuance of investment corporation bonds and short-term investment corporation bonds from a wide range of available sources of funding to ensure a well-balanced structure of interest-bearing debts.
(c) Enlargement of Portfolio by Acquisition of New Properties
Although the Company is targeting portfolio size of ¥500 billion in the medium term, we believe careful decisions are necessary for new property acquisition, having thoroughly considered the capital and real estate sales market conditions as well as
the financial status of the Company.

1. STATUS OF UNITHOLDERS’ CAPITAL
10th Period
9th Period
8th Period
7th Period
6th Period(as of Oct. 31, 2008) (as of Apr. 30, 2008) (as of Oct. 31, 2007) (as of Apr. 30, 2007) (as of Oct. 31, 2006)

Maximum number of units allowed to issue(Unit)

2,000,000

2,000,000

2,000,000

2,000,000

2,000,000

Number of units issued(Unit)

305,123265,903

265,903

265,903

265,903

Amount of unitholders’ capital(¥ mln)185,455

156,767

156,767

156,767

156,767

12,406

11,12011,492

12,50015,205

Number ofUnits Held
(Unit)

Portion in
the Total
Units Issued (%)

Number of unitholders

2. MATTERS CONCERNING THE INVESTMENT UNITS
The 10 largest unitholders as of October 31, 2008 were as follows.

6. IMPORTANT EVENTS SUBSEQUENT TO THE TENTH FISCAL PERIOD
There is no relevant matter under this subject.

Name(Reference)
The Company acquired PMO Nihonbashi Honcho and Nomura Sapporo Building on November 5, 2008, right after the end of the tenthfiscal period. The Property summaries are as follows.
Type of Asset

Real Estate

Real Estate

Property Name

Structure (Note)

PMO Nihonbashi Honcho(Registry) 4-8-9 Nihonbashi Honcho, Chuo-ku,
Tokyo(Street) 4-12-20 Nihonbashi Honcho, Chuo-ku,
Tokyo
S/SRC, B1/9F

Nomura Sapporo Building(Registry) 2-15-1, Kitashichijyo-Nishi, Kita-Ku,
Sapporo City, Hokkaido*A street address has not been allocated to theProperty
S, B1/10F

Land Area (Note)

506.16 m²

1,275.68 m²

Building Area (Note)

3,507.37 m²(Land) Ownership(Building) Ownership
June 17, 2008

9,603.81 m²(Land) Ownership(Building) Ownership
July 11, 2008

¥5,000 million
November 5, 2008
(date of agreement on purchase and sale ofreal estate)
November 5, 2008
(date of delivery of real estate)
Nomura Real Estate Development Co., Ltd.
(“NRED”)
Private fund and debt financing¥5,300 million
November 5, 2008
(date of agreement on purchase and sale ofreal estate)
November 5, 2008
(date of delivery of real estate)
Nomura Real Estate Development Co., Ltd.
(“NRED”)
Private fund and debt financing

Location (Note)

Type of Ownership
Completion Date (Note)
Acquisition Price
Date of Agreement
Date of Acquisition
SellerFinancingNote: “Location (Registry)”, “Structure”, “Land Area”, “Building Area”, and “Completion Date” are based on the information in the real estate registry.

NikkoCiti Trust and Banking Corp. (Trust Accounts)

27,4288.99

Trust & Custody Services Bank, Ltd. (Securities Trust Accounts)

21,507

7.05

Japan Trustee Service Bank, Ltd. (Trust Accounts)

20,374

6.68

The Master Trust Bank of Japan, Ltd. (Trust Accounts)

19,7906.49

Nomura Real Estate Development Co., Ltd.

15,287

5.01

The Nomura Trust and Banking Co., Ltd. (Trust Accounts)

8,290

2.72

Kawasaki Gakuen

7,000

2.29

North Pacific Bank, Ltd.

5,926

1.94

The Bank of Ikeda, Ltd.

5,669

1.86

National Mutual Insurance Federation of Agricultural Cooperative
Total

1.62
44.65

3. BREAKDOWN OF UNITHOLDERS
The breakdown of unitholders as of October 31, 2008 was as follows.
Number ofUnitholders

Portion (%)

11,735

94.6

30,062

9.9

Financial institutions(Including sales agents for financial instruments firm)

168

1.4

172,282

56.5

Other domestic corporate investors

208

1.7

28,9189.5

Private and other investors

Foreign corporate investors, etc.
Total

22

4,958
136,229

Number of Units
per Unitholders

Portion (%)

295

2.4

73,861

24.2

12,406100.0

305,123100.0

23

Status of Investment Assets of the Company
4. DIRECTORS AND AUDITOR

1. COMPOSITION OF ASSETS(1) Name of directors and an auditor in the tenth fiscal period are as follows (Note 1).

Title

Name

Executive Director
Supervisory Director

Other Major Title (s)Mitsuharu Sato
Shuhei Yoshida

Corporate Auditor, Nomura Real Estate Holdings, Inc.
Corporate Auditor, Nomura Real Estate Development Co., Ltd.

2,400

Representative Lawyer, Yoshida Shuhei Law Office
Supervisory Director, Nomura Real Estate Residential Fund, Inc.

2,400
2,400

Supervisory Director

Eitoku Aikawa

Supervisory Director

Saneaki IchijoPartner, Anderson Mori & Tomotsune Law Firm

2,400

Supervisory Director

Motoharu Yokose
Earnst & Young ShinNihon
LLC

Advisor, Asahi Tax Partners

2,400

–

15,000(Note 2)

Note 1: No Executive Directors or Supervisory Directors are in possession of the Company’s investment units either under their own or other person’s name. Supervisory Directors
might serve as directors of other companies, but there are no mutual business interests whatsoever between such companies and the Company.
Note 2: The total amount of fees paid to Earnst & Young ShinNihon LLC includes remuneration of ¥3 million in relation to a job (examination of agreed procedures concerning newissue of investment units on May 27, 2008 and June 24, 2008), which is outside the stipulation of Article 2, Paragraph 1 of the Certified Public Accountant Law (Law No. 103
of 1948)
Note 3: At the third General Unitholders’ Meeting held on July 23, 2007, Mr. Atsushi Ogata, Director of the Asset Management Company, Nomura Real Estate Asset Management
Co., Ltd., has been appointed as substitute Executive Director, to provide against vacancy of the Executive Director’s position or lack of statutory quorum.

(2) Policy on Determination of Dismissal and Denial of Reappointment of Accounting Auditors
In case an item listed under Article 105, Paragraph 1 of the Investment Trust Law becomes applicable to the accounting auditor,
and the Board of Directors determines that there is no likelihood of improvement, the Board of Directors shall dismiss theaccounting auditor by unanimous vote of all board members.
In addition, if the Board of Directors determines that the accounting auditor is inappropriate for the position having given thoroughconsideration to its business execution and other various reasons, the Board of Directors shall dismiss or deny reappointment of
the accounting auditor, and present an agenda for appointment of a new accounting auditor at the General Unitholders’ Meeting.

5. ASSET MANAGEMENT COMPANY, CUSTODIANS AND ADMINISTRATORS
Asset Management Company, custodians and administrators as of October 31, 2008 are as follows:Business

Asset Management Company

Company Name (s)Nomura Real Estate Asset Management Co., Ltd.

Custodian of assets

Mitsubishi UFJ Trust and Banking Corporation

Custodian of unitholders’ register

Mitsubishi UFJ Trust and Banking Corporation (Note 1), The Bank of Tokyo-Mitsubishi
UFJ, Ltd. (Note 2), Sumitomo Mitsui Banking Corporation (Note 2)

Administrative agent (underwriter)(Note 3)Administrative agent (accounting, etc.)

Mitsubishi UFJ Trust and Banking Corporation

Administrative agent(investment corporation bonds)

The Bank of Tokyo-Mitsubishi UFJ, Ltd., Sumitomo Mitsui Banking Corporation, Nomura
Securities Co., Ltd., Nikko Citigroup Limited, Mizuho Securities Co., Ltd.

10th Period (as of Oct. 31, 2008)
Total Amount (¥ mln)
Portion (%)(Note 2)
(Note 3)19,064

4.7

Suburban Tokyo

8,725

Other Regional Cities

32,373Central Tokyo
Suburban Tokyo
Other Regional Cities

9th Period (as of Apr. 30, 2008)
Total Amount (¥ mln)
Portion (%)(Note 2)
(Note 3)

11,420

3.2

2.2

8,754

2.5

8.1

26,6807.5

188,33046.9

164,823

46.6

35,6378.9

34,306

9.7

77,84919.4

71,013

20.1

Subtotal

361,97990.1

316,999

89.6

Cash, deposits and other assets

39,7059.9

36,731

10.4

401,684

100.0

353,730

100.0

Central Tokyo
Real estate

Real estate in trust

Director, Fair Appraisers, K.K.
Supervisory Director, Nomura Real Estate Residential Fund, Inc.

Accounting Auditor

Type of Assets

Total Amount of Fees Paid
during the 10th Period (¥000)

Area(Note 1)

Grand Total

Note 1: “Central Tokyo” refers to Chiyoda, Chuo, Minato, Shinjuku, Shinagawa and Shibuya Wards;“ Suburban Tokyo” refers to Tokyo excluding the Central Tokyo area, Kanagawa,
Saitama and Chiba: “Other Regional Cities” refers to areas other than Central Tokyo and Suburban Tokyo. The same applies hereafter.
Note 2: Total amount is taken from the balance sheet. (Real Estate and Real Estate in Trust represent the total book value after depreciation.)
Note 3: The percentage figures may not necessarily add up to 100.0 due to rounding to the nearest first decimal place.

2. BRIEF OF MAJOR PROPERTIES OWNED
The major components of assets (the 10 largest properties by book value) as of October 31, 2008 are as follows.

Name of Property

Book Value(¥ mln)Leasable Floor
Space
(m2)

Leased Space(m2)

Occupancy Rate(%)

Portionof Rental
Revenues (%)

Primary Use

Shinjuku Nomura Bldg.

39,254

31,589.26

30,387.69

96.2

14.2

OfficeJAL Bldg.

33,24342,084.11

42,084.11

100.0(Note 1)

OfficeOmron Kyoto Center Bldg.

23,196

34,616.84

34,616.84

100.0(Note 1)

OfficeNOF Nihonbashi-Honcho Bldg.

20,73919,233.25

18,437.39

95.9

6.5

OfficeSORA Shin-Osaka 21

19,422

21,653.31

21,052.95

97.2

4.6

OfficeTennozu Park Side Bldg.

13,471

18,051.60

18,051.60

100.0

6.0

OfficeNOF Midosuji Bldg.

12,86912,240.88

10,601.42

86.6

3.2

OfficeNOF Shibuya Koen-dori Bldg.

12,5073,420.16

3,420.16

100.0

2.7

OfficeShinjuku Sanshin Bldg.

12,3296,663.64

6,316.08

94.8

1.7

OfficeMedical Office(Note 2)

Secom Medical Bldg.
Total

11,374

8,821.24

8,821.24

100.0(Note 1)

198,410

198,374.29

193,789.48

97.7

51.3 (Note 3)

Note 1: Not disclosed due to compelling reasons.
Note 2: Although this property is currently registered as “clinic/parking” on the registry book, it was originally designed to be used as offices. The Company’s Articles ofIncorporation allows us to invest in the non-office properties given that they can easily be converted into offices.
Note 3: “Total” for “Portion of Rental Revenues” column include rental revenues for properties which do not disclose “Portion of Rental Revenues” due to unavoidable reasons.

Administrative agent
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
(short-term investment corporation bonds)
Note 1: Administrates preparation, retention and other tasks related to the Unitholders’ Register.
Note 2: Administrates preparation, retention and other tasks related to the Investment Company Bond Register.
Note 3: In association with the additional issuance of the investment units, the Company entered into underwriting agreements on May 20, 2008 with Nomura Securities Co., Ltd.
(the lead manager), Nikko Citigroup Limited, Merrill Lynch Japan Securities Co., Ltd., Shinko Securities Co., Ltd., Daiwa Securities SMBC Co., Mitsubishi UFJ Securities Co.,
Ltd., Mizuho Securities Co., Ltd., Takagi Securities Co., Ltd., and SBI E*TRADE SECURITIES Co., Ltd. (currently SBI E*TRADE SECURITIES Co., Ltd.) The underwriting
agreement was terminated in its entirety upon completion of the pay-in on May 27, 2008.

24

25

3. DETAILS OF PORTFOLIO PROPERTIESName of Property

Location(Postal Address)

Type ofOwnership

Appraisal Valueas of Oct. 31, Book Value
2008 (¥ mln)(¥ mln)(Note 1)
(Note 2)Central Tokyo
Shinjuku Nomura Bldg. (Note 3)

1-26-2 Nishi-Shinjuku, Shinjuku-ku, Tokyo

JAL Bldg.

2-4-11 Higashi-Shinagawa, Shinagawa-ku, TokyoNOF Nihonbashi-Honcho Bldg.

2-7-1 Nihonbashi-Honcho, Chuo-ku, Tokyo

Tennozu Park Side Bldg.

2-5-8 Higashi-Shinagawa, Shinagawa-ku, Tokyo

Shinju Sanshin Bldg.

2-4-9 Yoyogi, Shibuya-ku, TokyoNOF Shibuya Koen-dori Bldg.

20-17 Udagawa-cho, Shibuya-ku, Tokyo

Secom Medical Bldg.

7-7 Niban-cho, Chiyoda-ku, Tokyo (Note 5)

NOF Shiba Bldg.

4-2-3 Shiba, Minato-ku, Tokyo

Nishi-Shinjuku Showa Bldg.

1-13-12 Nishi-Shinjuku, Shinjuku-ku, Tokyo

Nomura Shibuya Dogenzaka Bldg. 2-16-4 Dogenzaka, Shibuya-ku, TokyoNOF Tameike Bldg.

1-1-14 Akasaka, Minato-ku, Tokyo

Iwamoto-cho Toyo Bldg.

3-1-2 Iwamoto-cho, Chiyoda-ku, TokyoNOF Shinagawa Kounan Bldg.

1-2-5 Higashi-Shinagawa, Shinagawa-ku, TokyoNOF Surugadai Plaza Bldg.

2-5-12 Kanda Surugadai, Chiyoda-ku, Tokyo

Hatchobori NF Bldg.

2-21-6 Hatchobori Chuo-ku, TokyoNOF Kanda Iwamoto-cho Bldg.

3-8-16 Iwamoto-cho, Chiyoda-ku, Tokyo

Central Kyobashi Bldg.

1-4-13 Kyobashi, Chuo-ku, Tokyo

NOF Minami-Shinjuku Bldg.

5-32-7 Sendagaya, Shibuya-ku, Tokyo

Central Shintomocho Bldg.

3-5-10 Minato, Chuo-ku, Tokyo

Sunworld Yotsuya Bldg.

13-9 Araki-cho, Shinjuku-ku, Tokyo

Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Real Estate

72,60039,25433,40033,24327,40020,73923,30013,471

12,60012,32914,00012,507

11,60011,374

Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Real Estate

10,900

10,157

Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust

10,100

8,734

7,660

7,689

8,280

7,615

5,880

6,022

6,970

5,478

7,300

5,088

3,190

3,214

3,920

3,103

2,590

2,562

2,980

2,254

1,650

1,759

778

791

267,098

207,394

Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Real Estate

9,030

7,132

7,820

6,314

1,830

2,109

Beneficial Interest in
Real Estate Trust
Real Estate

1,210

1,347

4,200

3,648

Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Real Estate

5,660

3,016

9,800

9,485

7,682

5,010

4,450

3,330

2,690

2,967

54,37244,362

Subtotal

Suburban TokyoNOF Toyo-cho Bldg.

1-6-35 Shinsuna, Koto-ku, TokyoNOF Technoport Kamata Center
Bldg.
Toho Edogawabashi Bldg.

2-16-1 Minami-Kamata, Ota-ku, Tokyo
1-24-8 Sekiguchi Bunkyo-ku, Tokyo

Toshin Meguro Bldg.

2-20-28 Shimo Meguro, Meguro-ku, Tokyo

Crystal Park Bldg.

1-1-3 Gotenyama, Musashino City, Tokyo

Faret Tachikawa Center Square

2-36-2 Akebono-cho, Tachikawa City, TokyoNOF Kawasaki Higashiguchi Bldg. 3-1 Ekimae Honcho, Kawasaki-ku, Kawasaki City,NOF Yokohama Nishiguchi Bldg.
NOF Shin-Yokohama Bldg.
Yokohama Odori Koen Bldg.

Kanagawa (Note 5)
1-11-11 Kita-Saiwai, Nishi-ku, Yokohama City,
Kanagawa
2-15-16 Shin-Yokohama, Kohoku-ku, Yokohama City,
Kanagawa
2-4-1 Horai-cho, Naka-ku, Yokohama City, Kanagawa(Note 5)

Subtotal

Other Regional Cities
7,268

7,429

JCB Sapporo Higashi Bldg. (Note 4) 1-1 Minamiichijo-Nishi Chuo-ku, Sapporo City (Note 5) Real Estate

3,470

3,808

Real Estate

2,780

3,421

3,310

3,187

3,490

2,618

3,670

3,725

22,00023,19618,20019,422

Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Real Estate

14,00012,86911,000

6,405

5,660

5,720

Beneficial Interest in
Real Estate Trust

6,690

3,656

Sapporo North Plaza

Kita-Sanjo Bldg.
NOF Sendai Aoba-dori Bldg.
NOF Utsunomiya Bldg.
NOF Nagoya Yanagibashi Bldg.
Omron Kyoto Center Bldg.
SORA Shin-Osaka 21

26

4-2-2 Kitaichijo-nishi, Chuo-ku, Sapporo City, Hokkaido Beneficial Interest in
Real Estate Trust(Note 5)3-1-25 Kitasanjo-nishi, Chuo-ku, Sapporo City,
Hokkaido (Note 5)
2-1-2 Ichiban-cho, Aoba-ku, Sendai City, Miyagi

Beneficial Interest in
Real Estate Trust
Beneficial Interest in
2-1-1 Baba-dori, Utsunomiya City, Tochigi
Real Estate Trust
Beneficial Interest in
1-16-28 Meieki-Minami, Nakamura-ku, Nagoya City,
Real Estate Trust
Aichi
Beneficial Interest in
801 Minami Fudodo-cho, Horikawa Higashi-iru,
Shiokoji-dori, Shimogyo-ku, Kyoto City, Kyoto (Note 5) Real Estate Trust
Real Estate
2-1-3 Nishi-Miyahara, Yodogawa-ku, Osaka City

NOF Midosuji Bldg.

3-5-7 Kawaramachi, Chuo-ku, Osaka City, Osaka

Nomura Osaka Bldg.

1-8-15 Azuchi-cho, Chuo-ku, Osaka City, Osaka

Nomura Nishi-Umeda Bldg.

2-1-22, Umeda, Kita-Ku, Osaka City, Osaka

Nomura Yotsubashi Bldg.

1-4-4 Awaza, Nishi-ku, Osaka City, Osaka

NOF Kobe Kaigan Bldg.

3 Kaigan-dori, Chuo-ku, Kobe City, Hyogo (Note 5)

Hiroshima Tatemachi NOF Bldg.

1-20 Tatemachi, Naka-ku, Hiroshima City, Hiroshima

Nomura Hiroshima Bldg.

2-23 Tatemachi, Naka-ku, Hiroshima City, Hiroshima

EME Hakata Ekimae Bldg.

1-15-20 Hakata Ekimae, Hakata-ku, Fukuoka City,
Fukuoka

Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust

Subtotal
Grand total

3,490

2,970

2,060

2,444

2,490

2,581

5,900

6,761

115,478
436,948

110,222361,979

Note 1: “Appraisal Value as of Oct. 31, 2008” stands for the prices appraised by the estate surveyors in accordance with the provisions of the Company’s Articles of Incorporationand the “Rules Concerning Calculations of Investment Corporations” (Cabinet Office Regulation No. 47 of 2006). The appraisal prices are calculated by Tanizawa Sogo
Appraisal Co., Ltd., Japan Real Estate Institution, HIRO & REAS Network, Inc., Daiwa Real Estate Appraisal, Co., Ltd., Appraisal Firm A-Square Co., Ltd., Morii Appraisal &Investment Consulting Inc., or Chuo Real Estate Appraisal Co., Ltd. using the capitalization approach, with the end of the tenth fiscal period, i.e. October 31, 2008, being
taken as the point of evaluation.
Note 2: “Book Value” stands for the aggregate purchase price of lands, buildings, structures, machinery and equipments, tools and fixtures, and construction in progress, owned
directly or held in trust, less depreciation including expenses associated with these purchases.
Note 3: The Company’s stake in this property is quasi co-ownership of 50.1% of entirety. The appraisal value and book value as of Oct. 31, 2008 accounted solely for the quasi coownership.
Note 4: Although the name of “JCB Sapporo Higashi Building” is “Sapporo Higashi Building” as of October 31, 2008, it will be altered to the name mentioned hereafter and thesame shall apply hereinafter
Note 5: Residential indication of the property is not available yet.

Name of Property

Central Tokyo
Shinjuku Nomura Bldg.
JAL Bldg.
NOF Nihonbashi-Honcho Bldg.
Tennozu Park Side Bldg.
Shinjuku Sanshin Bldg.
NOF Shibuya Koen-dori Bldg.
Secom Medical Bldg.
NOF Shiba Bldg.
Nishi-Shinjuku Showa Bldg.
Nomura Shibuya Dogenzaka Bldg.
NOF Tameike Bldg.
Iwamoto-cho Toyo Bldg.
NOF Shinagawa Kounan Bldg.
NOF Surugadai Plaza Bldg.
Hatchobori NF Bldg.
NOF Kanda Iwamoto-cho Bldg.
Central Kyobashi Bldg.
NOF Minami-Shinjuku Bldg.
Central Shintomicho Bldg.
Sunworld Yotsuya Bldg.
Subtotal
Suburban TokyoNOF Toyo-cho Bldg.
Technoport Kamata Center Bldg.
Toho Edogawabashi Bldg.
Toshin Meguro Bldg.
Crystal Park Bldg.
Faret Tachikawa Center Square
NOF Kawasaki Higashiguchi Bldg.
NOF Yokohama Nishiguchi Bldg.
NOF Shin-Yokohama Bldg.
Yokohama Odori Koen Bldg.
Subtotal
Other Regional Cities
Sapporo North PlazaJCB Sapporo Higashi Bldg.
Kita-Sanjo Bldg.
NOF Sendai Aoba-dori Bldg.
NOF Utsunomiya Bldg.
NOF Nagoya Yanagibashi Bldg.
Omron Kyoto Center Bldg.
SORA Shin-Osaka 21
NOF Midosuji Bldg.
Nomura Osaka Bldg.
Nomura Nishi-Umeda Bldg.
Nomura Yotsubashi Bldg.
NOF Kobe Kaigan Bldg.
Hiroshima Tatemachi NOF Bldg.
Nomura Hiroshima Bldg.
EME Hakata Ekimae Bldg.
Subtotal
Grand Total

10th Period (from May 1, 2008 to Oct. 31, 2008)

9th Period (from Nov 1, 2007 to Apr. 30, 2008)

Rentalat Period End
Revenues
PortionNumber ofof Rental
Tenants
Occupancy during the(Note 1)
Rate (%) Period (¥ mln) Revenues (%)

at Period End
Number of
Tenants
Occupancy
Rate (%)(Note 1)

RentalRevenues
Portionduring theof Rental
Period (¥ mln) Revenues (%)

81
1
12
15
15
3
1
9
21
6
13
7
4
1
6
8
9
5
7
1
225

96.2
100.0
95.9
100.0
94.8
100.0
100.0
100.0
100.0
100.0
100.0
100.0
87.9
100.0
72.8
100.0
100.0
100.0
100.0
100.0
97.8

1,970
(Note 2)
909
830
241
371
(Note 2)
357
339
37
234
102
231
(Note 2)
94
156
55
105
49
(Note 2)
7,505

14.2
(Note 2)
6.5
6.0
1.7
2.7
(Note 2)
2.6
2.4
0.3
1.7
0.7
1.7
(Note 2)
0.7
1.1
0.4
0.8
0.4
(Note 2)
53.9

82
1
12
15
–
3
1
9
21
–
13
–
4
1
8
8
–
5
–
–
183

97.2
100.0
100.0
100.0
–
100.0
100.0
100.0
100.0
–
100.0
–
87.9
100.0
100.0
100.0
–
100.0
–
–
98.9

1,917
(Note 2)
871
784
–
366
(Note 2)
339
321
–
224
–
253
(Note 2)
105
153
–
104
–
–
6,744

15.7
(Note 2)
7.2
6.4
–
3.0
(Note 2)
2.8
2.6
–
1.8
–
2.1
(Note 2)
0.9
1.3
–
0.9
–
–
55.4

1
15
7
1
10
16
27
30
3
14
124

100.0
100.0
100.0
100.0
100.0
98.9
98.8
95.5
100.0
94.0
99.0

(Note 2)411
71
(Note 2)
141
246
335
261
(Note 2)116
2,101

(Note 2)3.0
0.5
(Note 2)
1.0
1.8
2.4
1.9
(Note 2)
0.8
15.1

1
13
7
–
10
17
27
31
3
14
123

100.0
87.7
100.0
–
100.0
100.0
98.8
100.0
100.0
94.0
97.2

(Note 2)
426
12
–
131
238
333
257
(Note 2)110
1,999

(Note 2)
3.5
0.1
–
1.1
2.0
2.7
2.1
(Note 2)
0.9
16.4

40
1
17
29
24
11
1
23
15
25
11
16
35
27
15
37
327

89.7
100.0
97.3
100.0
97.6
91.3
100.0
97.2
86.6
100.0
100.0
94.7
98.6
87.5
91.9
93.5
96.1

2.4
(Note 2)
0.8
1.3
1.2
1.1
(Note 2)
4.6
3.2
3.9
0.3
2.3
1.4
0.8
1.5
1.0
31.0

40
1
18
29
24
12
1
20
15
27
–
17
32
25
16
–
277

87.8
100.0
95.6
100.0
99.6
100.0
100.0
95.2
93.3
99.1
–
97.8
93.8
80.0
96.0
–
96.4

97.3

100.0

583

97.6

338
(Note 2)
116
170
172
144
(Note 2)
20
486
533
–
324
176
97
207
–
3,439
12,183(Note 3)2.8
(Note 2)
1.0
1.4
1.4
1.2
(Note 2)
0.2
4.0
4.4
–
2.7
1.4
0.8
1.7
–
28.2

676

330
(Note 2)
116
175
173
151
(Note 2)
634
448
546
41
318
191
104
204
138
4,319
13,925(Note 3)100.0

Note 1: In the case a master lease agreement is in place, in which the master tenant of the said lease agreement subleases a part or whole of the leased floor spaces to the end
tenants, only the master tenant is counted as the number of tenants. In the case more than one space within the same building are leased by the same tenant, such spaces are combined to count for just one tenant. However, when the same tenant leased floor spaces in more than one building, such spaces are counted separately for eachbuilding as if they are leased by different tenants. As for Shinjuku Nomura Building, the number of tenants in the entire building is taken into account.
Note 2: Not disclosed due to compelling reasons.
Note 3: Subtotal of “Rental Revenues” and "Portion of Rental Revenues” for each area is not disclosed due to compelling reasons.

27

4. OUTSTANDING AMOUNT AND CURRENT PRICE OF SPECIFIED TRANSACTIONS

2. CAPITAL EXPENDITURES DURING THE TENTH FISCAL PERIODThe outstanding amount and current price of the specified transactions as of October 31, 2008 are as follows.

The table below lists capital expenditures during the tenth fiscal period in conjunction with the major works of renovation. During theperiod, we have conducted engineering works totalling ¥1,872 million: capital expenditures of ¥1,552 million and repair expenses of¥320 million combined all together.

Contract Amount (¥ mln) (Note 1)
Segment

Longer than a Year

Current
Price (¥ mln)
(Note 2)65,00055,0006603

65,00055,0006603

Type of Transaction

Interest-rate swap
Transaction other than market transaction (Receiving
floating-rate, paying fixed-rate)
Total

Name of Property (Location)

Description of Works (Purpose)

Cost of
Works (¥ mln)

Period of Works

Note 1: Presented based on notional principal of contract.
Note 2: Evaluated at the price provided by the counterparty based on the prevailing market rate.

Shinjuku Nomura Bldg.
(Shinjuku-ku, Tokyo)

Renewal of exclusively owned area
(To increase revenues)

From: Jul. 2008
To:
Sep. 2008

150

5. STATUS OF THE OTHER ASSETSNOF Nihonbashi Honcho Bldg.
(Chuo-ku, Tokyo)

Renewal of elevators(To increase quality)

From: May 2008
To:
Oct. 2008

176

Sapporo North Plaza(Chuo-ku, Sapporo City)

Aseismic retrofitting(To increase quality)

From: May 2008
To:
Jul. 2008

238

NOF Nagoya Yanagibashi Bldg.
(Nakamura-ku, Nagoya City)

Renewal of air-conditioning system(To increase quality)

From: May 2008
To:
Oct. 2008

61

NOF Shiba Bldg.
(Minato-ku, Tokyo)

Renewal of air-conditioning system and AHU(To increase quality)

From: May 2008
To:
Oct. 2008

81

NOF Technoport Kamata Center Bldg. Renewal of through the wall air-conditioning system(Ota-ku, Tokyo)(To increase quality)

From: Jun. 2008
To:
Oct. 200876

Other Properties

From: May 2008
To:
Oct. 2008

767

Other than the Trust Beneficial Interest and Real Estate listed in the table under the title “3. Details of Portfolio Properties”, theCompany had no other assets to integrate into the portfolio as at of October 31, 2008.

6. STATUS OF ASSETS BY COUNTRY AND REGION
As of the end of the tenth fiscal period, the real estate and beneficial interest in real estate trust held by the Company by country andregion are as follows.
Appraisal Value as of Oct. 31, 2008 (Note 2)

Number of
Properties

Country

Total Portfolio Amount (Note 1)Japan¥361,979 million¥436,948 million

100.0%

46

Total¥361,979 million¥436,948 million

100.0%

46

Portion of Total Portfolio

Improvement of features

Total

Note 1: Total portfolio amount stands for the book value after depreciation and amortization.
Note 2: Appraisal value as of Oct. 31, 2008 stands for the value appraised by the real estate appraisers.

3. FUNDS RESERVED FOR THE LONG-TERM REPAIR PLANS
Subject to the long-term schedule for repairs and maintenance set down for each building, the Company has accounted for reserves fromthe operating cash flow to prepare for large-scale engineering works to be carried out in the future.

Capital Expenditures

10th Period
9th Period
8th Period
7th Period
6th Period
from May 1, 2008 from Nov.1, 2007 from May 1, 2007 from Nov. 1, 2006 from May 1, 2006
to Oct. 31, 2008 to Apr. 30, 2008 to Oct. 31, 2007 to Apr. 30, 2007 to Oct. 31, 2006

1. PLAN OF CAPITAL EXPENDITURES
The table below lists major capital expenditures in conjunction with the refurbishment and / or renewal works scheduled for the future(finished in part) on the properties held as of October 31, 2008. The estimated cost of works includes the amount to be charged as“expenses” for accounting purposes.
Estimated Cost (¥ mln) (Note 1)
Paid during
Paid before
Total
10th Period
10th Period

Description of Works (Purpose)

Estimated
PeriodShinjuku Nomura Bldg.
(Shinjuku-ku, Tokyo)

Renewal of exclusively owned area
(To increase revenues) (Note 2)

From: Nov. 2008
To:
Mar. 2009

313

15

15

NOF Shibuya Koen-dori Bldg.
(Shibuya-ku, Tokyo)

Renewal of air-conditioning
system (To increase quality) (Note 2)

From: Nov. 2008To:
Nov. 2009

200

–

–

Sapporo North Plaza(Chuo-ku, Sapporo City)

Renewal of multilevel parking
lot (To increase quality)

From: Feb. 2009To:
May 2009

70––

Kita-Sanjo Bldg.
(Chuo-ku, Sapporo City)

Renewal of air-conditioning
system (To increase quality) (Note 2)

From: Nov. 2008
To:
May 2009

201

–

–

From: Nov. 2008
To:
Mar. 2010

317

–

–

Name of Property (Location)

1,552

NOF Technoport Kamata Center Bldg. Renewal of through the wall
(Ota-ku, Tokyo)
air-conditioning system(To increase quality)

Note 1: As for Shinjuku Nomura Building, the posted amount of cost represents 50.1%, our portion of quasi co-ownership, of the total cost of refurbishment of the entire building.
Note 2: These works have already been implemented as of the date of this report.

Balance brought forward from the previous period
Amount reserved during the period
Amount used during the period
Balance brought forward to the next period

¥ mln

¥ mln

¥ mln

¥ mln

¥ mln

290
1,716
1,768
238

596
1,118
1,424
290

938
718
1,060
596

935
693
690
938

761
671
497
935

Expenses and Liabilities
1. EXPENSES RELATED TO ASSET MANAGEMENT

Asset management fees (Note 1)of which Management Fee I
of which Management Fee IIof which Management Fee III
Custodian fees
General administrative fees
Directors’ compensation
Other expenses
Total

10th Period
from May 1, 2008
to Oct. 31, 2008¥000

9th Period
from Nov. 1, 2007
to Apr. 30, 2008
¥000

1,025,096
652,019
373,077–
27,01463,70012,00074,3891,202,201

990,994
570,179
327,802
93,01226,001
58,61412,00058,986
1,146,597

Note 1: In the Asset Management Agreement between the Company and the Asset Management Company, there is no provision for the acquisition fees, which are payable to the
Asset Management Company by the Company on acquisition of a new property, and such fees are non-existent.

28

29

2. STATUS OF BORROWINGSThe status of borrowings from the financial institutions as of Oct.31, 2008 is as follows.

Financial Institutions

Short-term Borrowings
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
The Mizuho Corporate Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Trust and Banking Co., Ltd.
The Chiba Bank, Ltd.
The Iyo Bank, Ltd.
The Chugoku Bank, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
The Mizuho Corporate Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Trust and Banking Co., Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
The Mizuho Corporate Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Trust and Banking Co., Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
The Mizuho Corporate Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Trust and Banking Co., Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
The Mizuho Corporate Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Trust and Banking Co., Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
The Mizuho Corporate Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Trust and Banking Co., Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
The Mizuho Corporate Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Trust and Banking Co., Ltd.
Subtotal

Date
Borrowed

Dec. 27, 2007

Feb. 7, 2008

Mar. 27, 2008

June 24, 2008

June 26, 2008

Sep. 24, 2008

Sep. 25, 2008

Long-term Borrowings to be Repaid within a Year
The Yamanashi Chuo Bank, Ltd.
The Chugoku Bank, Ltd.
Dec. 9, 2005
The Bank of Fukuoka, Ltd.
The Aozora Bank, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
Dec. 8, 2003
Mitsubishi UFJ Trust and Banking Corp.
The Iyo Bank, Ltd.
The Norinchukin Bank, Ltd.
Mitsui Life Insurance Company
Taiyo Life Insurance Company
Dec. 8, 2003
Daido Life Insurance Company
Mitsui Sumitomo Insurance Co., Ltd.
The Chiba Bank, Ltd.
Feb. 27, 2006
The Hachijuni Bank, Ltd.
Subtotal
Total Short-term Borrowings

30

Outstanding as of Outstanding as of
Average
Oct. 31, 2008
Apr. 30, 2008
Interest Rate(¥000)(¥000)(%) (Note 1)

–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,035,000
575,000
230,000
230,000
230,000
3,150,000
1,750,000
700,000
700,000
700,000
5,250,000
5,250,000
1,500,000
1,500,000
1,500,000
4,410,000
2,450,000
980,000
980,000
980,000
34,100,000––––
2,000,000
2,000,000
1,000,000
1,000,000
2,000,000
2,000,000
1,000,000
1,000,000
1,000,000
1,500,000
500,000
15,000,000
49,100,000

1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,500,000
1,000,000
1,800,000
1,000,000
400,000
400,000
400,000
990,000
550,000
220,000
220,000
220,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
14,700,000
1,000,000
1,000,000
1,000,000
1,000,000
2,000,000
2,000,000
1,000,000
1,000,000
2,000,000
2,000,000
1,000,000
1,000,000
1,000,000
1,500,000
500,000
19,000,000
33,700,000

1.15333

1.27583

1.25917

Date of
Repayment

Use of
Method of
Repayment Borrowings

June 27, 2008

June 27, 2008

June 27, 2008

Balloonpayment
1.29250

Dec. 24, 2008

1.29250

Dec. 24, 2008

1.43500

June 24, 2009

1.33500

June 25, 20091.28583

1.66750

Note(Note 2)

Unsecured/
UninsuredAug. 26, 2008

Dec. 8, 2008

1.51625

Dec. 8, 2008

1.19000

Feb. 26, 2009

Balloonpayment(Note 2)

Unsecured/
UninsuredFinancial Institutions

Date
Borrowed

Outstanding as of Outstanding as of
Average
Oct. 31, 2008
Apr. 30, 2008
Interest Rate(¥000)(¥000)(%) (Note 1)

Long-term Borrowings
The Norinchukin Bank
Feb. 26, 2004
3,000,000
Feb. 26, 2004
1,000,000
Mitsui Life Insurance Company
The Chiba Bank, Ltd.
1,000,000
The Hiroshima Bank, Ltd.
Dec. 8, 2006
500,000
1,000,000
Tokio Marine & Nichido Fire Insurance Co. Ltd.
1,000,000
Nippon Life Insurance Company
Nov. 30, 2006
Sompo Japan Insurance Inc.
1,000,000
Sumitomo Mitsui Banking Corp.
1,000,000
The Yamanashi Chuo Bank, Ltd.
1,000,000
Aug. 26, 2008
The Chugoku Bank, Ltd.
1,000,000
1,000,000
The Bank of Fukuoka, Ltd.
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
1,000,000
The Mizuho Corporate Bank, Ltd.
1,000,000
Feb. 27, 2006
500,000
Mitsubishi UFJ Trust and Banking Corp.
Sumitomo Trust and Banking Co., Ltd.
3,000,000
2,000,000
The Nomura Trust & Banking Co., Ltd.
4,000,000
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Sumitomo Mitsui Banking Corp.
1,000,000
The Chiba Bank, Ltd.
500,000
Dec. 10, 2007
The Hachijuni Bank, Ltd.
1,000,000
The Hiroshima Bank, Ltd.
1,000,000
1,000,000
The Keiyo Bank, Ltd.
The Mizuho Corporate Bank, Ltd.
1,000,000
Mitsubishi UFJ Trust and Banking Corp.
1,000,000
Sumitomo Trust and Banking Co., Ltd.
Apr. 25, 2008
1,000,000
The Hachijuni Bank, Ltd.
1,000,000
500,000
The Yamanashi Chuo Bank, Ltd.
The Mizuho Corporate Bank, Ltd.
2,000,000
Mar. 19, 2007
The Chuo Mitsui Trust & Banking Co., Ltd.
1,000,000
1,000,000
The Iyo Bank, Ltd.
1,000,000
The 77 Bank, Ltd.
Sep. 25, 2008
The Hyakujushi Bank, Ltd.
1,000,000
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
2,000,000
Sumitomo Mitsui Banking Corp.
2,000,000
Mitsubishi UFJ Trust and Banking Corp.
1,000,000
Sumitomo Trust and Banking Co., Ltd.
Dec. 8, 2006
2,000,000
The Chuo Mitsui Trust & Banking Co., Ltd.
1,000,000
The Nomura Trust & Banking Co., Ltd.
2,000,000
1,000,000
The Iyo Bank, Ltd.
Mitsui Life Insurance Co., Ltd.
1,000,000
Taiyo Life Insurance Company
1,000,000
Daido Life Insurance Company
1,000,000
Nov. 29, 2005
National Mutual Insurance Federation of
1,000,000
Agricultural Cooperative
Development Bank of Japan
1,000,000
National Mutual Insurance Federation of
Dec. 9, 2005
1,000,000
Agricultural Cooperative
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
2,000,000
Sumitomo Mitsui Banking Corp.
1,500,000
Feb. 26, 2008
2,500,000
Mitsubishi UFJ Trust and Banking Corp.
The Chuo Mitsui Trust & Banking Co., Ltd.
1,000,000
500,000
The Iyo Bank, Ltd.
Mitsubishi UFJ Trust and Banking Corp.
1,000,000
Sep. 25, 2008
Sumitomo Trust and Banking Co., Ltd.
1,000,000
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
2,000,000
Sumitomo Mitsui Banking Corp.
June 27, 2008
2,000,000
1,000,000
The Mizuho Corporate Bank, Ltd.
Mar. 17, 2005
1,000,000
Development Bank of JapanThe Daiichi Mutual Life Insurance Company Dec. 8, 2006
2,000,000
Taiyo Life Insurance Company
1,000,000
Daido Life Insurance Company
Mar. 19, 2007
1,000,000
Sumitomo Life Insurance Company
2,000,000
The Daiichi Mutual Life Insurance Company Feb. 26, 2008
3,000,000
Taiyo Life Insurance Company
1,000,000
Sumitomo Life Insurance Company
June 24, 2008
3,000,000
4,000,000
Development Bank of Japan
Subtotal
88,500,000
Total
137,600,000

3,000,000
1,000,000
1,000,000
500,000
1,000,000
1,000,000
1,000,000––––
1,000,000
1,000,000
500,000
3,000,000
2,000,000
4,000,000
1,000,000
500,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
500,000
2,000,000
1,000,000
1,000,000––
2,000,000
2,000,000
1,000,000
2,000,000
1,000,000
2,000,000
1,000,000
1,000,000
1,000,000
1,000,000

Date of
Repayment

1.77500
1.50625

Feb. 26, 2010
Feb. 26, 2010

1.48375

Feb. 26, 2010

1.65500

Aug. 26, 2010

1.24667

Aug. 26, 2010

1.68000

Feb. 26, 2011

1.43200

June 10, 2011

1.44800

Aug. 25, 2011

1.63825

Aug. 26, 2011

1.43950

Sep. 25, 2011

Use of
Method of
Repayment Borrowings

Balloonpayment
1.89764

Feb. 26, 2012

1.43750

Aug. 26, 2012

1.53625

Aug. 26, 2012

1.46000

Aug. 26, 2012

1.61150

Sep. 25, 2012

1.87200

Dec. 27, 2012

1.75250
1.99250

Feb. 26, 2013
Feb. 26, 2013

1.98000

Mar. 19, 2014

1.91875

Feb. 26, 2015

2.31750

June 24, 2015

(Note 2)

Note

Unsecured/
Uninsured

1,000,000
1,000,000
1,000,000
2,000,000
1,500,000
2,500,000
1,000,000
500,000–––––
1,000,000
2,000,000
1,000,000
1,000,000
2,000,000
3,000,000–––
67,500,000
101,200,000

Note 1: The average interest rate is weighted by the balance of each borrowing as at the end of the period and rounded to the nearest fifth decimal place. As for the borrowings,
which were hedged by interest-rate swaps for the purpose of avoiding interest rate fluctuation risk, the swapped interest rates are used to calculate the weighted averageof interest.
Note 2: The use of borrowings is to purchase property-related assets, the related miscellaneous expenses and the repayment of borrowings.

31

3. STATUS OF INVESTMENT CORPORATION BONDS

3. PRICE INVESTIGATIONThe status of investment corporation bonds issued as of October 31, 2008 is as follows.

(1) Real Estates

Balance as ofOct. 31, 2008(¥ mln)Balance as ofApr. 30, 2007(¥ mln)Name of Bonds

Issue DateFirst Series Unsecured Investment
Corporation Bonds

Mar. 16,
2005

5,000

5,000

Second Series Unsecured
Investment Corporation Bonds

Mar. 16,
2005

5,000

5,000

Maturity Date

Method of
Repayment

Use ofProceeds

1.85

Mar. 16,
2015

Balloon(Note 1) (Note 2)
payment

2.47

Mar. 16,
2020

Balloon(Note 1) (Note 2)
payment
Balloon(Note 1) (Note 3)
payment

Acquisition
Acquisition

Note

Third Series Unsecured Investment Nov. 28,
Corporation Bonds
2005

10,00010,0001.19

Nov. 29,2010

Fourth Series Unsecured
Investment Corporation Bonds

Nov. 28,
2005

10,00010,0002.05

Nov. 30,
2015

Balloon(Note 1) (Note 3)
payment

Fifth Series Unsecured Investment
Corporation Bonds

Mar. 19,
2007

5,000

5,000

1.61

Mar. 19,2012

Balloon(Note 1) (Note 3)
payment

Sixth Series Unsecured Investment Mar. 19,
Corporation Bonds
2007

5,000

5,000

2.21

Mar. 17,2017

Balloon(Note 1) (Note 3)
payment

4,500

4,500

2.90

Mar. 17,
2028

Balloon(Note 1) (Note 3)
payment

44,50044,500Seventh Series Unsecured
Investment Corporation Bonds
Total

Mar. 19,
2007

4. STATUS OF SHORT-TERM INVESTMENT CORPORATION BONDS
There are no outstanding short-term investment corporation bonds as of the end of the tenth fiscal period.

Trading during the Tenth Fiscal Period

Beneficial Interest in Real
Estate Trust
Beneficial Interest in Real
Estate Trust
Beneficial Interest in Real
Estate Trust
Beneficial Interest in Real
Estate Trust
Beneficial Interest in Real
Estate Trust
Beneficial Interest in Real
Estate Trust
Beneficial Interest in Real
Estate Trust
Real estate
Real estate
Total
Note:

Acquisition
Price (¥ mln)
Date
(Note)

Date

Disposition
Price (¥ mln) Book Value Gain (Loss)(Note)(¥ mln)(¥ mln)Shinjuku Sanshin Bldg.

June 25, 2008

12,300––––

Iwamoto-cho Toyo Bldg.

June 25, 2008

6,020

–

–

–

–

Central Kyobashi Bldg.

June 25, 2008

2,550

–

–

–

–

Central Shintomicho Bldg.

June 25, 2008

1,750

–

–

–

–

Sunworld Yotsuya Bldg.

June 25, 2008

778

–

–

–

–

Toshin Meguro Bldg.

June 25, 2008

1,340

–

–

–

–

EME Hakata Ekimae Bldg.

June 27,
2008
Sep. 26, 2008
Sep. 26, 2008

6,750

–

–

–

–

7,660
5,660
44,808

–
–

–
–
–

–
–
–

–
–
–

Nomura Shibuya Dogenzaka Bldg.
Nomura Nishi-Umeda Bldg.

“Acquisition price” and “Disposition price” do not include various costs (intermediary fees, taxes and duties, etc.) required for acquisition or disposition of the property (thepurchase and sale price of the real estate, etc., as indicated in the Transfer Agreement of Trust Beneficial Interest or Real Estate).

2. STATUS OF OTHER ASSETS
Other than the above-mentioned properties and asset-backed securities, the Company’s assets are mostly comprised of direct bankdeposits and bank deposits in trust.

32

Acquisition
Acquisition
Acquisition

Acquisition
Acquisition
Acquisition

Beneficial Interest in Real
Estate Trust
Beneficial Interest in Real
Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Beneficial Interest in
Real Estate Trust
Real estate
Real estate

Price (¥ mln)

Appraisal
Value (¥ mln)

June 25, 2008

12,30012,300

Iwamoto-cho Toyo Bldg.

June 25, 2008

6,020

6,020

Central Kyobashi Bldg.

June 25, 2008

2,550

2,550

Central Shintomicho Bldg.

June 25, 2008

1,750

1,750

Sunworld Yotsuya Bldg.

June 25, 2008

778

778

Toshin Meguro Bldg.

June 25, 2008

1,340

1,340

EME Hakata Ekimae Bldg.

June 27, 2008

6,750

6,750

Nomura Shibuya Dogenzaka Bldg.
Nomura Nishi-Umeda Bldg.

Sep. 26, 2008
Sep. 26, 2008

7,660
5,660

7,660
5,660

Name of Property

Date

Shinjuku Sanshin Bldg.

Note1: The price investigation procedures were conducted by Ernst & Young ShinNihon LLC at the time of acquisition or disposition in accordance with the guidance under “Price
Investigation of Specified Assets Held by Investment Trusts and Investment Corporations”, Industry Audit Committee Report No. 23 issued by The Japanese Institute ofCertified Public Accountants. The Company has received detailed reports including the location and lot number to identify these properties.
Note2: “Acquisition price” and “Disposition price” do not include various costs (intermediary fees, taxes and duties, etc.) required for acquisition or disposition of the property (thepurchase and sale price of the real estate, etc., as indicated in the Transfer Agreement of Trust Beneficial Interest or Real Estate).

4. TRANSACTIONS WITH RELATED PARTIES AND MAJOR SHAREHOLDERS

1. STATUS OF REAL ESTATES AND ASSET-BACKED SECURITIES TRADING

Name of Property

Acquisition

Type of Asset(2) Others
With regard to the properties the Company has traded but not included in the above table “(1) Real Estates,” the priceinvestigation procedures ware conducted by Ernst & Young ShinNihon LLC subject to the requirement by Article 201 of theInvestment Trust Law.
For the tenth fiscal period (from May 1, 2008 to October 31, 2008), three OTC derivatives transactions were subject toinvestigation. Ernst & Young ShinNihon LLC was requested to investigate the details of three transactions including the name ofcounterparty, issues, the number of execution, financial instruments/monetary indicators, put/call options, exercise prices, theperiod of execution of right, the trading period, etc. The investigation report has been received.

Note 1: The uses of proceeds are to purchase the property-related assets, pay for the costs, and to repay borrowings.
Note 2: Ranking Pari Passu among the investment corporation bonds for qualified institutional investors only.
Note 3: Ranking Pari Passu among the specified investment corporation bonds.

Type of Asset

Acquisition/Disposition

Acquisition/
Disposition

Interest
Rate(%)(1) Transactions
Table of transactions in respect of specified assets entered into with related parties and major shareholders during the tenth fiscal
period is as follows.
Purchase (¥000)(%)

44,808,000( –%)Total amountAmount purchased from related parties andmajor shareholders
13,320,000(29.7%)
Details of transaction with related parties and major shareholders
Nomura Real Estate Development Co., Ltd.
13,320,000(100.0%)
Total
13,320,000(100.0%)
Note:

Sale (¥000)(%)–
Amount sold to related parties andmajor shareholders
–

( –%)
( –%)

–
–

( –%)
( –%)

Related parties and major shareholders refer to those bodies that have business interest and major stake in the Asset Management Companies defined by Article 29-4,
Paragraph 2 of Financial Instruments and Exchange Law, with which the Company, stipulated by article 123 of Enforcement Order of Investment Trust Law, has an AssetManagement Agreement.

(2) Fees Paid to Related Parties and Major Shareholders
Table of fees paid to related parties and major shareholders during the tenth fiscal period is as follows.
Name of Related Party and Major Shareholders

Contract-out fees
Property management fees
Other expenses

Amount Paid (A)(¥000)

Nomura Building Management Co., Ltd. (Note 1)
Flagship Properties, Inc. (Note 2)
Nomura Real Estate Development Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Building Management Co., Ltd.

577,598
916
208,868
24,16825,77524,971

Total Amount Paid (B)(¥000)

1,069,458
317,748
77,484

Portion(A) / (B)
(%)

54.0
0.1
65.7
7.6
33.3
32.2

Note1: In addition to the Property Management Agreement, the Company has entrusted Nomura Building Management Co., Ltd. with daily maintenance of building and equipments, the cost of which is included in “Contract-out Fees”.
Note2: The Company has entrusted certain jobs such as receipt of rents, payment of disbursements and notification of repairs in conjunction with the sublease of JAL Building to
Flagship Properties. The Contract-out fees paid to Flagship Properties include remuneration for these services.
Note3: Besides the above, the Company has made the following payments for repair works during the tenth fiscal period.
Name of Related Party
Nomura Real Estate Development Co., Ltd.
Nomura Building Management Co., Ltd.

Amount Paid (¥000)
55,560590,92033

Financial Section
The management fees paid to the property management companies, which are related parties, are broken down as follows.
Name of Property

Shinjuku Nomura Bldg.
JAL Bldg.
Tennozu Park Side Bldg.
NOF Shibuya Koen-dori Bldg.
Secom Medical Bldg.
Nishi-Shinjuku Showa Bldg.
Nomura Shibuya Dogenzaka Bldg.
NOF Tameike Bldg.
NOF Shinagawa Konan Bldg.
NOF Surugadai Plaza Bldg.
Hatchobori NF Bldg.
NOF Minami-Shinjuku Bldg.
NOF Technoport Kamata Center Bldg.
Faret Tachikawa Center Square
NOF Yokohama Nishiguchi Bldg.
NOF Shin-Yokohama Bldg.
Omron Kyoto Center Bldg.
NOF Midosuji Bldg.
Nomura Osaka Bldg.
Nomura Nishi-Umeda Bldg.
Nomura Yotsubashi Bldg.
Hiroshima Tatemachi NOF Bldg.
Nomura Hiroshima Bldg.
Shinjuku Sanshin Bldg.
Central Kyobashi Bldg.
Central Shintomicho Bldg.
Sunworld Yotsuya Bldg.
NOF Toyo-cho Bldg.
Toshin Meguro Bldg.
NOF Kawasaki Higashiguchi Bldg.
NOF Utsunomiya Bldg.
NOF Nagoya Yanagibashi Bldg.

Property Management Company

Property Management Fees(¥000) (Note 1) (Note 2)

Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Development Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Building Management Co., Ltd.
Nomura Building Management Co., Ltd.

48,9584,369
27,867
5,940
3,789
13,354
707
7,413
4,635
5,195
1,963
3,814
8,852
6,976
7,975
3,776
5,815
11,686
17,114
798
9,638
2,680
5,542
3,020
972
894
505
2,088
420
8,504
4,824
2,937

Note 1: “Property Management Fees” are the aggregated sum of the basic fee and the incentive fee.
Note 2: Daily maintenance of building and equipments is entrusted to Nomura Building Management, but the fees associated with such works are not included here.

5. STATUS OF BUSINESS WITH THE ASSET MANAGEMENT COMPANY OVER ITS SUBSIDIARY BUSINESSThere is no relevant matter under this subject as Nomura Real Estate Asset Management Co., Ltd., the asset management companyof the Company, is not in any subsidiary business.

Other Information

NOF Kobe Kaigan Building

1. NOTICE
There is no relevant matter under this subject.

2. STATUS OF BENEFICIAL INTEREST IN INVESTMENT TRUSTS ESTABLISHED BY THE COMPANY
Not applicable.

3. OTHER MATTERS
For the purpose of this report, the numbers of amount below unit are truncated and the numbers in percentage are rounded to unit
unless otherwise mentioned specifically.

34

Contents

Balance Sheets ........................................................... 36
Statements of Income and Retained Earnings............ 38
Statements of Changes in Net Assets ........................ 39
Statements of Cash Flows .......................................... 40
Notes to Financial Statements .................................... 4135

Balance Sheets
As of October 31, 2008

Thousands of Yen
As of April 30, 2008ASSETS
Current Assets:
Cash and bank deposits
Rental receivables
Corporate taxes refundable
Consumption taxes refundable
Other current assets¥

38,567,826
294,748
6,353–
260,218¥

35,583,622
200,059
5,527
309,378
254,625

39,129,145

36,353,211

Property and Equipment, at Cost:Land
Buildings and structures
Machinery and equipment
Tools, furniture and fixtures
Lease assets
Construction in progress

257,244,529
114,639,528
997,100
210,179
31,42342,202

221,645,728
105,534,282
917,793
171,376–
36,915

SubtotalLess accumulated depreciation

373,164,961(13,086,726)

328,306,094(11,306,725)

Net property and equipment

360,078,235

316,999,369

Total Assets

As of April 30, 2008

LIABILITIES

Total current assets

Investments and Other Assets:
Leasehold right
Intangible assets
Long-term prepaid expenses
Security deposits
Deferred investment corporation bond issuance costs
Total investments and other assets

Thousands of Yen
As of October 31, 2008

1,900,905
3,493
57,730411,300
103,438
2,476,866–
1,726
27,376211,250
137,818
378,170¥ 401,684,246¥ 353,730,750

Current Liabilities:
Trade accounts payable
Other accounts payable
Short-term investment corporation bonds
Short-term debt
Accrued expenses
Accrued consumption taxes
Rent received in advance
Other current liabilities
Total current liabilities¥

821,170
1,475,833–
49,100,000
712,984
53,222
2,366,636
15,14854,544,993¥

737,287
1,844,192
19,984,303
33,700,000
563,800–
2,100,767
27,12558,957,474

Long-term Liabilities:
Investment corporation bonds
Long-term debt
Security deposits from tenants
Other long-term liabilities
Total long-term liabilities

44,500,000
88,500,000
23,405,390
22,494
156,427,884

44,500,000
67,500,000
21,506,082–
133,506,082

Total Liabilities

210,972,877

192,463,556

Unitholders' Equity:
Unitholders' capital
Retained earnings
Total unitholders' equity

185,455,447
5,255,922
190,711,369

156,767,193
4,500,001
161,267,194

Total Net Assets

190,711,369

161,267,194¥ 401,684,246¥ 353,730,750

NET ASSETS

The accompanying notes to financial statements are an integral part of these statements.

Total Liabilities and Net Assets
The accompanying notes to financial statements are an integral part of these statements.

36

37

Statements of Income and Retained Earnings

Statements of Changes in Net Assets

For the period
from May 1, 2008
to October 31, 2008

Thousands of Yen
For the period
from November 1, 2007
to April 30, 2008

For the period from May 1, 2008 to October 31, 2008

Operating Revenues and Expenses
Operating Revenues:
Real estate rental revenues

Balance as of April 30, 2008¥

13,925,429¥

13,925,429

12,183,127
12,183,127

Issuance of new investment units
Cash distribution paid
Net income
Balance as of October 31, 2008

Operating Expenses:
Real estate rental expenses
Asset management fees
Administrative service and custodian fees
Other operating expenses

5,790,875
1,025,096
90,71686,3905,213,083
990,995
84,61670,986

6,993,077

6,359,680

Units

Unitholders'CapitalRetained
Earnings

265,903¥156,767,193¥4,500,001¥161,267,194––¥161,267,194

39,220––28,688,254–––(4,499,877)
5,255,798

28,688,254(4,499,877)
5,255,798

–
–
–

–
–
–

28,688,254(4,499,877)
5,255,798

305,123¥185,455,447¥5,255,922¥190,711,369––¥190,711,369

Unitholders'CapitalRetained
Earnings

Total
Unitholders'Equity6,932,352

265,903¥156,767,193¥4,498,623¥161,265,816¥7,161¥7,161¥161,272,977

–
–
–

–
–
–

(4,498,546)
4,499,925–(4,498,546)
4,499,925–––(7,161)––(7,161)(4,498,546)
4,499,925(7,161)

Balance as of October 31, 2007
Cash distribution paid
Net income
Interest-rate swaps
Balance as of April 30, 2008

Non-Operating Revenues:
Interest income
Other non-operating revenues

265,903¥156,767,193¥4,500,001¥161,267,194––¥161,267,194

36,97540,17332,89853,77977,14886,677916,963
119,319
51,378432,525
38,49150,788143,205

743,444
94,5203,052
428,975
32,295–
106,884

1,752,669

1,409,170

5,256,831

4,500,954

Income Taxes:
Current
Deferred

1,032
1

1,051
(22)

Net Income

5,255,798

4,499,925

124

76

Non-Operating Expenses:
Interest expense
Loan arrangement fees
Interest expense on short-term investment corporation bonds
Interest expense on investment corporation bonds
Amortization of investment corporation bond issuance costs
New investment units issuance costs
Other non-operating expenses

Income before Income Taxes

Retained earnings brought forward
Retained Earnings at End of Period¥

5,255,922

Thousands of Yen

5,823,447

Non-Operating Revenues and Expenses¥

Total Valuation
Deferred
Total
Hedge Gains and Translation Net Assets
Adjustments(Losses)

For the period from November 1, 2007 to April 30, 2008
Units

Operating Profit

Thousands of Yen
Total
Unitholders'EquityDeferred
Total Valuation
Total
Hedge Gains and Translation(Losses)
Adjustments Net Assets

The accompanying notes to financial statements are an integral part of these statements.

4,500,001

The accompanying notes to financial statements are an integral part of these statements.

38

39

Statements of Cash Flows

Notes to Financial Statements
For the period
from May 1, 2008
to October 31, 2008

Thousands of Yen
For the period
from November 1, 2007
to April 30, 2008

Cash Flows
Cash Flows from Operating Activities
Income before income taxes
Depreciation
Amortization of long-term prepaid expenses
Amortization of investment corporation bond issuance costs
Interest income
Interest expense
Loss on disposal of property and equipment
Decrease (Increase) in rental receivables(Increase) Decrease in consumption taxes refundable(Decrease) Increase in trade accounts payable
Increase (Decrease) in other accounts payable
Increase in accrued consumption taxes
Increase in rent received in advance
Changes in other current assets/liabilities¥¥

8,698,842
36,975(1,196,677)(1,858)7,537,282

SubtotalInterest received
Interest paid
Income taxes paid
Net cash provided by operating activities

4,500,954
1,601,990
2,918
32,295(32,898)
1,175,471–
10,174(275,442)(70,490)349,217–150,349(264,180)
7,180,358
32,898(1,131,556)(1,238)6,080,462

Cash Flows from Investing Activities
Payments for purchases of property and equipment
Payments for purchases of intangible assets
Reimbursement of security deposits to tenants
Proceeds from security deposits from tenants
Payments of security deposits
Net cash used in investing activities(44,895,113)(1,900,905)(663,840)
2,563,149(200,050)(45,096,759)(26,733,587)–(1,081,136)
2,118,020–(25,696,703)

Cash Flows from Financing Activities
Proceeds from short-term debt
Repayment of short-term debt
Proceeds from short-term investment corporation bonds
Repayment of short-term investment corporation bonds
Proceeds from long-term debt
Repayment of long-term debt
Proceeds from issuance of new investment units
Distributions to unitholders
Net cash provided by financing activities

34,100,000(14,700,000)
14,954,207(35,000,000)
21,000,000(4,000,000)
28,688,253(4,498,779)
40,543,681

24,700,000(23,500,000)
19,981,251–
23,500,000(19,000,000)–(4,497,892)
21,183,359

Net Increase in Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period
Cash and Cash Equivalents at End of Period

2,984,204
35,583,622
38,567,826

1,567,118
34,016,504
35,583,622

The accompanying notes to financial statements are an integral part of these statements.

40

5,256,831
1,793,148
10,53838,491(36,975)
1,400,866
7,600(94,689)309,378
83,883(320,025)
53,222
265,869(69,295)¥¥

1. ORGANIZATION
Nomura Real Estate Office Fund, Inc. (the “Company”) is a real estate investment corporation formed to own and invest primarily in
office properties. The Company is externally managed by a licensed asset management company, Nomura Real Estate AssetManagement Co., Ltd. (“NREAM”). NREAM is a wholly-owned subsidiary of Nomura Real Estate Holdings, Inc.
On August 7, 2003, the Company was incorporated under the Law Concerning Investment Trusts and Investment Corporations(the “Investment Trust Law”) of Japan. On December 4, 2003, the Company was listed on the Tokyo Stock Exchange as the 9th
J-REIT and started operations on the following day. As of October 31, 2008, the Company owned a portfolio of 46 office properties
containing an aggregate of approximately 430,487.81 square meters of leasable area and leased office space to 676 tenants.

2. BASIS OF PRESENTATIONThe Company maintains its accounting records and prepares its financial statements in accordance with accounting principles
generally accepted in Japan (“Japanese GAAP”), including provisions set forth in the Investment Trust Law of Japan, the Corporation
Law of Japan, the Financial Instruments and Exchange Law of Japan and related regulations, which are different in certain respects
as to the application and disclosure requirements of International Financial Reporting Standards.
The accompanying financial statements are a translation of the audited financial statements of the Company, which wereprepared in accordance with Japanese GAAP and were presented in the Securities Report of the Company filed with the Kanto Local
Finance Bureau. In preparing the accompanying financial statements, certain reclassifications and modifications have been made to
the financial statements issued domestically in order to present them in a format that is more familiar to readers outside Japan. In
addition, the notes to financial statements include certain information that might not be required under Japanese GAAP but ispresented herein as additional information. Amounts have been rounded to the nearest thousand of yen in the accompanying
financial statements and the notes thereto, whereas amounts were truncated in the Japanese financial statements prepared inaccordance with Japanese GAAP.
The Company’s fiscal period is a six-month period which ends at the end of April or October. The Company does not prepare
consolidated financial statements because it has no subsidiaries.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESCash and cash equivalents
Cash and cash equivalents consist of cash on hand, deposits placed with banks and short-term investments that are highly
liquid, readily convertible to cash, with an insignificant risk of market value fluctuation, and with a maturity of three months orless when purchased.
Property and equipment
Property and equipment are stated at cost, which includes the purchase price and related costs for acquisition, lessaccumulated depreciation. Depreciation is calculated by the straight-line method over the estimated useful lives of the fixed
assets outlined below:
Buildings
3 - 69 years
Structures
2 - 45 years
Machinery and equipment
3 - 15 years
Tools, furniture and fixtures
3 - 18 years
Intangible assets
Intangible assets are amortized by the straight-line method.
Lease Transactions
Finance lease transactions, excluding the ownership of the leased assets is deemed to be transferred to the lessee, areaccounted for the straight-line method, depreciated over the lease term with no residual value.
Impairment of fixed assets
The Company reviews fixed assets for impairment whenever events or changes in circumstances indicate that the carrying
amount of its fixed assets may not be recoverable. An impairment loss is recognized if the carrying amount of its fixed assets
exceeds the respective aggregate of the estimated future cash flows. If the fixed assets are determined to be impaired, it is
written down to its recoverable amount and the write-down is recorded as an impairment loss during the current period. No
impairment losses have been recognized to date.
Deferred investment corporation bond issuance costs
Deferred investment corporation bond issuance costs are amortized over the respective terms of the bonds by the straight-line
method. Deferred investment corporation bond issuance costs that were reported on the balance sheets at October 31, 2006
or prior to the six-month period then ended were amortized over a period of three years, with an equal amount amortized ineach fiscal period based on the previous method of accounting.
Deferred new investment units issuance costs
The entire costs associated with the issuance of the new investment units are expensed as incurred.
The public offering of new investment units on May 27, 2008 was conducted through an underwriting agreement underwhich underwriting securities companies underwrote all of the new investment units at an agreed issue price and sold them at
an offer price, which is different from the issue price to investors (“Spread Method”). The Company does not pay any fees tothe underwriting securities companies under the Spread Method because the difference between the offer price and the issue
price represents the underwriting commission received by the underwriting securities companies. In the case of the public
offering of new investment units on May 27, 2008, the total amount of the difference between the offer price and the issue
price was ¥928,330,000. If the underwriting securities companies had underwritten the new investment units at the issue

41

price and offered the units to investors at an offer price equal to the issue price (known as the “Conventional Method”), a
commission would have been incurred and it would have been expensed as new investment units issuance costs. Therefore,
under the Spread Method, the new investment units issuance costs were reported ¥928,330,000 less, and operating income
and income before income taxes were reported ¥928,330,000 more than if the Conventional Method was applied.
Accounting treatment of beneficial interests in real estate
All assets and liabilities held in trust, for which the real estate in possession of the Company was entrusted, and all theearnings and expenses incurred from such trust are properly reflected in the accompanying balance sheets and statements ofincome and retained earnings, respectively.
Revenue recognition
Operating revenues consist of rental revenues including base rents and common area charges, and other operating revenues
including utility charge reimbursements, parking space rental revenues and other income. Rental revenues are generally
recognized on an accrual basis over the life of each lease. Utility charge reimbursements are recognized when earned and theiramounts are reasonably estimated.
Property related taxes
Property related taxes including property taxes, urban planning taxes and depreciable property taxes imposed during the fiscal
period are charged as rental expenses.
On the other hand, the Company paid the amount equivalent to the property related taxes to the respective sellers ofproperties applicable to the period since acquisition and capitalized such amounts as part of the costs to acquire suchproperties or beneficial interests in real estate. The capitalized property related taxes amounted to ¥82,023 thousand for thesix-month period ended October 31, 2008, and ¥118,642 thousand for the six-month period ended April 30, 2008.
Income taxes
Deferred tax assets and liabilities are computed based on the differences between the financial statements and income tax
bases of assets and liabilities using the applicable statutory tax rates.
Consumption taxes
Consumption taxes received and paid are not included in the accompanying statements of income and retained earnings.
Derivative financial instruments
The Company utilizes interest-rate swap contracts as derivative financial instruments only for the purpose of hedging its
exposure to changes in interest rates. The Company deferred recognition of gains or losses resulting from changes in the fairvalue of interest-rate swap contracts which meet the criteria for deferral hedge accounting.
Although the deferred hedge treatment is generally applied, effective September 1, 2006, the Company has applied
special treatment to those interest-rate swap contracts that meet the criteria for such special treatment based on the revised
Investment Trust Law (effective beginning on May 1, 2006) and partial Amendment of the Articles of Incorporation. Under the
special treatment, interest-rate swaps are not remeasured at fair value; instead, the net amount paid or received under theinterest rate swap contract is recognized and included in interest expense or income.
The New Accounting standard for lease transactions
In the period ended October 31,2008, the company adopted Accounting Standard for Lease Transactions (on March 30, 2007,
the ASBJ issued ASBJ Statement No. 13) and the Implementation Guidance on Accounting Standard for Lease Transactions (onMarch 30, 2007, the ASBJ issued ASBJ Guidance No. 16). The new accounting standard is required to be adopted in fiscal
periods beginning on or after April 1, 2008.The adoption of this new standard had no effect on the statements of income andretained earnings for the fiscal period ended October 31,2008.

4. SCHEDULE OF PROPERTY AND EQUIPMENT
Property and equipment as of October 31, 2008 and April 30, 2008 consist of the following:Thousands of Yen
As of October 31, 2008Land
Buildings and structures
Accumulated depreciation
Machinery and equipment
Accumulated depreciation
Land in trust
Buildings and structures in trust
Accumulated depreciation
Machinery and equipment in trust
Accumulated depreciation
Tools, furniture and fixtures in trust
Accumulated depreciation
Lease assets in trust
Accumulated depreciation
Construction in progress in trust
Total

42

As of April 30, 2008

Acquisition Costs

Book Value

Acquisition Costs

Book Value¥ 40,439,040
18,296,244(631,536)
192,251(34,495)
216,805,489
96,343,284(12,031,671)
804,849(337,748)
210,179(48,319)
31,423(2,957)42,202¥360,078,235¥ 40,439,040¥ 31,276,665
15,784,166(337,826)
154,538(22,462)
190,369,063
89,750,116(10,618,014)
763,255(293,381)
171,376(35,042)––
36,915¥316,999,369¥ 31,276,665

17,664,708
157,756
216,805,489
84,311,613
467,101
161,860
28,46642,202¥360,078,235

15,446,340
132,076
190,369,063
79,132,102
469,874
136,334–
36,915¥316,999,369

5. SHORT-TERM DEBT
Short-term debt as of October 31, 2008 and April 30, 2008 consists of the following:
As of October 31, 2008
Amount(Thousandsof Yen)Unsecured loans from banks due on June 27, 2008
Unsecured loans from banks due on June 27, 2008
Unsecured loans from banks due on June 27, 2008
Unsecured loans from banks due on August 26, 2008
Unsecured loans from banks due on December 8, 2008
Unsecured loans from insurance companies due on
December 8, 2008
Unsecured loans from banks due on December 24, 2008
Unsecured loans from banks due on December 24, 2008
Unsecured loans from banks due on February 26, 2009
Unsecured loans from banks due on June 24, 2009
Unsecured loans from banks due on June 25, 2009
Total

Weightedaverageinterest rate

As of April 30, 2008
Amount(Thousandsof Yen)Weightedaverageinterest rate––––
¥ 8,000,000––––
1.66750%¥ 8,500,000
4,000,000
2,200,000
4,000,000
8,000,000

1.15333%
1.27583%
1.25917%1.28583%
1.66750%

5,000,000

1.51625%

5,000,000

1.51625%2,300,000
7,000,000
2,000,000
15,000,000
9,800,000¥49,100,000

1.29250%
1.29250%
1.19000%
1.43500%
1.33500%––
2,000,000––¥33,700,000––
1.19000%––

The Company entered into ¥40,000 million credit facilities in the form of commitment lines with five financial institutions for thesix-month periods ended October 31, 2008 and April 30, 2008. The total unused amount of such credit facilities was ¥5,900 million
as of October 31, 2008 and ¥33,800 million as of April 30, 2008.

6. LONG-TERM DEBT
Long-term debt as of October 31, 2008 and April 30, 2008 consists of the following:
As of October 31, 2008
Amount(Thousandsof Yen)Unsecured loans from a bank due on February 26, 2010
Unsecured loans from an insurance company due on
February 26, 2010
Unsecured loans principally from banks due on February 26,
2010
Unsecured loans from insurance companies due on August
26, 2010
Unsecured loans from banks due on August 26, 2010
Unsecured loans from banks due on February 26, 2011
Unsecured loans from banks due on June 10, 2011
Unsecured loans from banks due on August 25, 2011
Unsecured loans from banks due on August 26, 2011
Unsecured loans from banks due on September 25, 2011
Unsecured loans from banks due on February 26, 2012
Unsecured loans principally from insurance companies due
on August 26, 2012
Unsecured loans from a financial institution due on August
26, 2012
Unsecured loans from banks due on August 26, 2012
Unsecured loans from banks due on September 25, 2012
Unsecured loans from banks due on December 27, 2012
Unsecured loans from a bank due on February 26, 2013
Unsecured loans from an insurance company due on
February 26, 2013
Unsecured loans from insurance companies due on March
19, 2014
Unsecured loans from an insurance company due on
February 26, 2015
Unsecured loans principally from insurance companies due
on June 24, 2015
Total

Weightedaverageinterest rate

As of April 30, 2008
Amount(Thousandsof Yen)Weightedaverageinterest rate

¥ 3,000,000

1.77500%¥ 3,000,000

1.77500%

1,000,000

1.50625%

1,000,000

1.50625%2,500,000

1.48375%

2,500,000

1.48375%

2,000,000

1.65500%

2,000,000

1.65500%

4,000,000
7,500,000
8,500,000
4,500,000
4,000,000
2,000,000
11,000,000

1.24667%1.68000%
1.43200%
1.44800%
1.63825%
1.43950%
1.89764%–
7,500,000
8,500,000
4,500,000
4,000,000–
11,000,000–
1.68000%
1.43200%
1.44800%
1.63825%–
1.89764%5,000,000

1.43750%

5,000,000

1.43750%

1,000,000

1.53625%

1,000,000

1.53625%

7,500,000
2,000,000
5,000,000
1,000,000

1.46000%
1.61150%
1.87200%
1.75250%

7,500,000––
1,000,000

1.46000%––
1.75250%

2,000,000

1.99250%

2,000,000

1.99250%

4,000,000

1.98000%

4,000,000

1.98000%

3,000,000

1.91875%

3,000,000

1.91875%

8,000,000

2.31750%––¥88,500,000¥67,500,000

437. INVESTMENT CORPORATION BONDS
Investment Corporation Bonds
Details of investment corporation bonds outstanding are summarized as follows:
As of October 31, 2008
Amount(Thousandsof Yen)First Series of Unsecured Investment Corporation Bonds
Due on March 16, 2015
Second Series of Unsecured Investment Corporation Bonds
Due on March 16, 2020
Third Series of Unsecured Investment Corporation Bonds
Due on November 29, 2010
Fourth Series of Unsecured Investment Corporation Bonds
Due on November 30, 2015
Fifth Series of Unsecured Investment Corporation Bonds
Due on March 19, 2012
Sixth Series of Unsecured Investment Corporation Bonds
Due on March 17, 2017
Seventh Series of Unsecured Investment Corporation Bonds
Due on March 17, 2028
Total

As of April 30, 2008

Weightedaverageinterest rate

Amount(Thousandsof Yen)Weightedaverageinterest rate

For the period
from November 1, 2007
to April 30, 2008

39.39%(39.38)0.01
0.02%

39.39%(39.38)0.01
0.02%

1.85000%¥ 5,000,000

1.85000%

5,000,000

2.47000%

5,000,000

2.47000%

10,000,000

1.19000%

10,000,000

1.19000%

10,000,000

2.05000%

10,000,000

2.05000%

Due to change in Law on Provisional Measures Relating to the Special Local Corporation Taxes on April 30, 2008 , the Japanese
statutory effective tax rate used in the calculation of deferred tax assets or liabilities effective has been changed from 39.39% to39.33%. The effect of the change of the tax rate is immaterial.

5,000,000

1.61000%

5,000,000

1.61000%

12. BREAKDOWN OF REAL ESTATE RENTAL REVENUES AND EXPENSES

5,000,000

2.21000%

5,000,000

2.21000%

Real estate rental revenues and expenses for the six-month periods ended October 31, 2008 and April 30, 2008 consist of thefollowing:

4,500,000

2.90000%

4,500,000

2.90000%¥44,500,000

Statutory tax rate
Deductible cash distributions
Other
Effective tax rates

Thousands of Yen¥44,500,000

As of October 31, 2008
Amount(Thousandsof Yen)As of April 30, 2008

Redemption price(Thousandsof Yen)Amount(Thousandsof Yen)Redemption price(Thousandsof Yen)––¥19,984,303¥20,000,000––¥19,984,303¥20,000,000

8. UNITHOLDERS’ EQUITYThe Company issues only non-par value investment units in accordance with the Investment Trust Law. The entire amount of theissue price of new units is designated as stated capital. The Company is required to maintain net assets of at least ¥50,000
thousand as set forth in the Investment Trust Law.

9. PER UNIT INFORMATIONThe net asset values per unit as of October 31, 2008 and April 30, 2008 were ¥625,031 and ¥606,488 respectively. Net income perunit was ¥17,563 and ¥16,923 for the six-month periods ended October 31, 2008 and April 30, 2008, respectively.

10. RELATED PARTY TRANSACTIONSParent Company, corporate shareholders and otherNot applicable
Directors, individual shareholders and otherNot applicable
Subsidiary companies and otherNot applicable
Fellow subsidiary companies and otherNot applicable

11. INCOME TAXESThe Company, as an investment corporation, is subject to corporate income taxes at a statutory tax rate of approximately 40% for
the six-month periods ended October 31, 2008 and April 30, 2008. However, the Company may deduct dividend distributions paid to
its unitholders from its taxable income amounts, provided such distributions meet the requirements under the Special Taxation
Measures Law of Japan. Under this law, an investment corporation must meet a number of tax requirements, including arequirement to distribute in excess of 90% of its distributable income for the fiscal period, in order to deduct such amounts. If the44

For the period
from May 1, 2008
to October 31, 2008

¥ 5,000,000

Short-term Investment Corporation Bonds
Details of short-term investment corporation bonds outstanding are summarized as follows:First Series of Short-term Investment Corporation Bonds
Due on June 6, 2008
Total

investment corporation does not satisfy all of the requirements, the entire taxable income of the investment corporation will be
subject to regular corporate income taxes.
Since the Company distributed approximately 100% of its distributable income in the form of cash distributions totaling¥5,255,743 thousand and ¥4,499,876 thousand for the six-month periods ended October 31, 2008 and April 30, 2008, respectively,
such distributions were treated as deductible distributions for purposes of corporate income taxes. The following summarizes thesignificant differences between the statutory tax rate and the effective tax rates:

Real estate rental revenues
Rental revenues
Rental revenues
Common area charges
Non-rental revenues
Parking revenues
Incidental income
Other miscellaneous revenues
Real estate rental expenses
Property management costs
Property management fees
Utility expenses
Property and other taxes
Casualty insurance
Repairs and maintenance
Depreciation
Other rental expenses
Profit

For the period
from May 1, 2008
to October 31, 2008

For the period
from November 1, 2007
to April 30, 2008

¥13,925,429
12,493,338
10,150,767
2,342,571
1,432,091
302,604
1,056,711
72,776
5,790,875
1,069,458
317,749
1,084,225
971,039
26,729320,219
1,793,088
208,368¥ 8,134,554¥12,183,127
11,057,640
8,991,314
2,066,326
1,125,487
255,389
795,928
74,1705,213,083
935,502
325,080
790,511
941,568
23,075403,143
1,601,962
192,242¥ 6,970,044

13. LEASES
Finance lease agreements, excluding the ownership of the leased assets is deemed to be transferred to the lessee, are mainly tools,
furniture and fixtures in trust. Finance lease transactions excluding the ownership of the leased assets is deemed to be transferred to
the lessee are accounted for the straight-line method, depreciated over lease period and will have a salvage value of zero.
The Company, as lessor, has entered into lease agreements whose fixed monthly rents are due in advance with a lease term ofgenerally two years for offices. The future minimum rental revenues under existing non-cancelable operating lease agreements as of
October 31, 2008 and April 30, 2008 are summarized as follows:
Thousands of Yen

Due within one year
Due after one year
Total

As of October 31, 2008

As of April 30, 2008

¥ 4,949,373¥ 4,773,371

32,368,785

32,986,020¥37,318,158¥37,759,392

45

14. DERIVATIVES AND HEDGE ACCOUNTING
The Company has entered into interest-rate swap contracts with several financial institutions to hedge its variable rate long-term debt
obligations. The Company utilizes interest-rate swap contracts, which are derivative financial instruments, only for the purpose of
mitigating future risk of fluctuation of interest rates, but does not enter into such transactions for speculative or trading purposes.
The Company entered into such derivative transactions to hedge risk in accordance with its Articles of Incorporation and theestablished risk management policies of NREAM.
Beginning the fiscal period ended October 31, 2007, the Company has applied the “special treatment” set forth in the amended
Investment Trust Law (effective beginning on May 1, 2006) and partial Amendment of the Articles of Incorporation.
The following summarizes the notional amounts and the estimated fair value of the interest-rate related positions outstanding asof October 31, 2008 and April 30, 2008:
Thousands of Yen
Notional amount

Estimated fair value

Unrealized loss

As of October 31, 2008
Interest-rate swaps:
Received/floating and paid/fixed¥65,000,000(¥603,601)(¥603,601)

As of April 30, 2008
Interest-rate swaps:
Received/floating and paid/fixed¥56,000,000(¥11,987)(¥11,987)

15. SIGNIFICANT SUBSEQUENT EVENTS
Dispositions of Properties
On January 14, 2009, the Company resolved to dispose three properties as follows. Consumption taxes and adjustments ofproperty taxes are excluded from the sales prices.
(a) NOF Midosuji Building
1. Type of assets sold
2. Sales price3. Contract date
4. Delivery date
5. Transferee
6. Impact on net income(b) Kita-Sanjo Building
1. Type of assets sold
2. Sales price3. Contract date
4. Delivery date
5. Transferee
6. Impact on net income

Real estate¥14,000 million
January 14, 2009
January 14, 2009
Nomura Real Estate Development Co., Ltd. and NREG Toshiba Building Co., Ltd.
Approximately ¥1,237 million of gain on sale of real estate will be recorded in the following
fiscal period.
Real estate¥2,630 million
January 14, 2009
January 14, 2009
NREG Toshiba Building Co., Ltd.
Approximately ¥771 million of loss on sale of real estate will be recorded in the following
fiscal period.

(c) Hiroshima Tatemachi NOF Building
1. Type of assets soldReal estate in trust
2. Sales price¥2,210 million
3. Contract date
January 14, 2009
4. Delivery dateFebruary 27, 2009
5. Transferee
NREG Toshiba Building Co., Ltd.
6. Impact on net income
Approximately ¥234 million of loss on sale of real estate will be recorded in the following
fiscal period.

46

47

Profile of the Asset Management Company

Asset Custodian
Administrator ofUnitholders Register
General Administration(Accounting, etc.)

PROFILE AND HISTORY OF INCORPORATION
Company:
Capital:Shareholder:
Incorporation:

Business Structure

Nomura Real Estate Asset Management Co., Ltd.
¥300 million (as of October 31, 2008)
Nomura Real Estate Holdings, Inc. (100%)January 24, 2003

Mitsubishi UFJ Trust andBanking Corporation

AGENDA
Proposal

COMPLIANCE OFFICER
When compliance is satisﬁed

COMPLIANCES COMMITTEE
Major objectives of the Compliance Committee are:to ensure compliance with the laws and regulations applicable tothe proposed agenda,
to deliberate the contents of trade with the related parties,
to check the legal matters for the Investment Committee inmaking investment decisions.

Investment Committee deliberates on such subjects as:
Formulation and revision of investment guidelines,
Selection of properties for investment,
Formulation and revision of investment planning for the ﬁscal year,
Policy making on material articles such as funding.

DECISION MAKING
The entire process of deliberation and ﬁnal decision is reported.

COMPLIANCE COMMITTEEUSE OF INFORMATION NETWORK OF NOMURA REAL ESTATE GROUP
In order to maximize opportunity to invest in better properties, we have collected as much information as possible not only from the AssetManagement Company but also from other companies of Nomura Real Estate group as listed below.

AuditorBoard of Directors’Meeting

Ernst & Young
ShinNihon LLC

Rents, etc.

RepaymentofPrincipal &Interest

Unitholders

Trading

Capital Investment
Unitholders

EquityProperty
Management
Agreement

Property
Management

Financial Instituions,etc. / Investors ofInvestment
Corporation Bonds

Liabilities
Asset

Property Management
Companies

Instructions forRents andManagement

Nomura Real Estate Development
Co., Ltd.
Nomura Building
Management Co., Ltd., etc.

RentalStrategies,
Plans ofRepairs, etc.

Asset Management
Services Agreement

Asset Management Company

Distribution

Property
Information
Service
Agreement, etc.

Information andResearch-related
Service Providers
Nomura Real Estate
Development Co., Ltd.
Nomura Real Estate
Urban Net Co., Ltd.
Nomura Real
Estate Investment
Management Co., Ltd.

Corporate Data
Corporate Name
Nomura Real Estate Office Fund, Inc.

INVESTMENT COMMITTEE

Unitholders’ Meeting

Investment
Ofﬁce Buildings(Real Estate
Related Assets)

Debt Financing /Issue of Investment
Corporation Bonds

Administration
Agreement, etc.

PROCESS OF DECISION-MAKING
We have ensured transparency in the decision-making process by placing agenda through the Compliance Committee, in which two
external members with professional experience sit.

Nomura Real EstateOfﬁce Fund, Inc.

Asset Custody
Agreement

Corporate Office8-5-1 Nishi Shinjuku Shinjuku-ku, Tokyo
160-0023, Japan
http://www.nre-of.co.jp/english/
Date of Incorporation
August 7, 2003
Stock Listing
Tokyo Stock Exchange (Securities Code: 8959)
Fiscal Period
Six months ending on April 30 and October 31
Capital¥185,455,446,935 (as of October 31, 2008)
Number of Units Issued
305,123 (as of October 31, 2008)

Transfer Agent
Mitsubishi UFJ Trust and Banking Corporation
1-4-5 Marunouchi Chiyoda-ku, Tokyo 100-8212, Japan
Business Office of the Transfer Agent
Corporate Agency Department
Mitsubishi UFJ Trust and Banking Corporation
7-10-11 Higashisuna Koto-ku, Tokyo 137-8081, Japan
Tel: +81-3-5683-5111
Independent Auditors
Ernst & Young ShinNihon LLC
Hibiya Kokusai Bldg. 2-2-3 Uchisaiwai-cho Chiyoda-ku,
Tokyo 100-0011, Japan
Investor Relations
For further information, please contact the Asset Management
Company:
Nomura Real Estate Asset Management Co., Ltd.
8-5-1 Nishi Shinjuku Shinjuku-ku, Tokyo 160-0023, Japan
Tel: +81-3-3365-0507

Number of Unitholders
12,406 (as of October 31, 2008)

Disclaimer

Nomura Real Estate Ofﬁce Fund, Inc.
Nomura Real Estate Asset Management Co., Ltd.

Nomura Real Estate Development Co., Ltd.
Nomura Real Estate Urban Net Co., Ltd.
Nomura Real Estate Investment Management Co., Ltd.

General Real Estate Market

48

Properties owned and developed by
Nomura Real Estate Urban Net andNomura Real Estate Development

This semiannual report includes translations of certain Japanese documents originally filed under the Securities and Exchange Law ofJapan. This report was prepared in English solely for the convenience of and reference by readers outside Japan and should not be
considered as a disclosure statement. The original Japanese documents always govern the meaning and interpretation.
In general, accounting principles and practices used by real estate investment corporations in Japan (”J-REITs”) in preparing its financial statements conform with accounting principles generally accepted in Japan (”Japanese GAAP”). However, they may differ fromgenerally accepted accounting principles applied in certain other countries. Potential investors should consult their own professional
advisors for an understanding of the differences between Japanese GAAP and generally accepted accounting principles in the UnitedStates (”U.S. GAAP”) or other jurisdictions and how those differences might affect the financial information contained herein.
Estimates for Nomura Office Fund’s future operating results contained in this semiannual report are forward-looking statements andare based on information currently available to Nomura Office Fund and its asset management company and are subject to risks anduncertainties. Consequently, these projections should not be relied upon as the sole basis for evaluating Nomura Office Fund. Actual
results may differ substantially from the projections depending on a number of factors.

49http://www.nre-of.co.jp/english/