June 16, 2014

Summary of Earnings Results
for the Sixteenth Fiscal Period(From November 1, 2013 to April 30, 2014)
Top REIT, Inc. (listed on the Tokyo Stock Exchange with securities code 8982) hereby announces its earnings
results for the fiscal period ended April 30, 2014 (sixteenth fiscal period).

1. Earnings Results for the Sixteenth Fiscal Period
Sixteenth Fiscal Period: From November 1, 2013 to April 30, 2014
Fifteenth Fiscal Period: From May 1, 2013 to October 31, 2013
(1) Business Results
Operating
Revenue
Period endedApril 30, 2014
October 31, 2013

Period endedApril 30, 2014
October 31, 2013

Period-on-Period
ChangeMillions of yen

Operating
IncomePeriod-on-Period
ChangeMillions of yen

Ordinary
IncomePeriod-on-Period
ChangeMillions of yen¥5,637¥5,1549.4%(11.8%)¥2,528¥2,172

16.4%(11.2%)Net
IncomePeriod-on-Period
ChangeNet
Incomeper Unit

Ratio ofNet Income toUnitholders’Equity21.2%(13.3%)¥11,056¥10,191

2.2%
1.9%

1.0%
0.8%

33.9%
30.7%

Dividend in
Excess ofEarnings
per Unit

Total Amount of
Dividends in
Excess ofEarnings

Dividend
Payout Ratio

Ratio of
Dividends to
Net Assets

99.9%
100.0%

2.0%
1.9%

Millions of yen¥1,913¥1,579¥1,913¥1,58021.0%(13.3%)

Ratio ofRatio of
Ordinary Income to Ordinary Income toOperating Revenue
Total Assets

Yen(Note) Net income per unit is rounded down to the nearest yen.

(2) Dividends
Dividend
Total Amount ofper Unit
Dividends(excluding(excluding
dividend in excess dividend in excessof earnings)
of earnings)
Period endedApril 30, 2014
October 31, 2013
(Note1)(Note 2)

(Note 3)

Yen

¥10,864¥10,191

Millions of yen

Yen¥1,912¥1,579¥0¥0Millions of yen¥–¥–

Since fund procurement through public offering was conducted during the period and the number of investment units has changed accordingly,
Dividend Payout Ratio for the fiscal period ended April 30, 2014 is calculated as below
Dividend Payout Ratio= Total Amount of Dividends (excluding dividend in excess of earnings) / Net Income ×100
The reason for the difference in Net Income and Total Amount of Dividends for the Period ended April 30 is due to the correction amount (1million yen) of deferred tax liability from the change in corporate tax rate following the tax system revisions in the fiscal year 2014 wasincluded in the reserve for reduction
The reason for the difference in Dividend per Unit and Net Income per Unit is due to the impact from the change in corporate tax rate following
the tax system revisions in the fiscal year 2014 as mentioned in (Note 2), and that the Net Income per Unit is calculated based on the average
number of investment units issued and outstanding during the fiscal period.

(3) Financial Position
Total Assets
Period endedApril 30, 2014
October 31, 2013

Millions of yen¥200,802¥186,169

Net Assets

Ratio of
Unitholders’ Equity to
Total Assets

Net Assets per Unit

46.4%
45.1%

¥528,873¥541,105Millions of yen¥93,081¥83,871(Note) Net assets per unit is rounded down to the nearest yen.

1Yen

(4) Cash FlowsNet Cash
Provided by (Used in)Operating Activities
Period endedApril 30, 2014
October 31, 2013

Net Cash
Provided by (Used in)Investing Activities

Millions of yen¥2,976¥2,735Net Cash
Provided by (Used in)
Financing Activities

Millions of yen

Cash and
Cash Equivalents
at End of Period

Millions of yen(¥12,195)(¥703)

Millions of yen¥11,700(¥1,890)¥7,323¥4,842

2. Earnings Forecast Results for the Seventeenth Fiscal Period
Seventeenth Fiscal Period : From May 1, 2014 to October 31, 2014
Operating
Revenue
Period ending
October 31, 2014

Period ending
October 31, 2014

Period-on-Period
ChangeMillions of yen

Operating
IncomePeriod-on-Period
ChangeMillions of yen¥2,483

2.2%

Net
IncomePeriod-on-Period
ChangeDividend per Unit
(excluding dividend in excess ofearnings)(2.5%)¥10,600¥1,865Period-on-Period
ChangeMillions of yen¥5,758(1.8%)

Millions of yen

Ordinary
Income¥1,866(2.4%)

Dividend in Excess of Earnings
per Unit

Yen

Yen

¥0

(Reference) Estimated net income per unit for the seventeenth fiscal period: ¥10,600

3. Others(1) Changes in Accounting Policies, Changes in Accounting Estimates and Restatements of Revisions
a. Changes in accounting policies due to amended accounting standards: No
b. Changes in accounting policies due to other factors from a. above:Noc. Changes in accounting estimates:
Nod. Restatements of revisions:No(2) Number of Investment Units Issued and Outstanding
a. Number of investment units (including own investment units) issued and outstanding at end of fiscal period
As of April 30, 2014:
176,000 units
As of October 31, 2013:
155,000 units
b. Number of own investment units issued and outstanding at end of fiscal period
As of April 30, 2014:
0 units
As of October 31, 2013:
0 units* Statement on Implementation Status of Audit Procedure
This Summary of Earnings Results (“Kessan Tanshin” in Japanese) report is outside the scope of theauditing procedure under the Financial Instruments and Exchange Act. As of the publication of this report,
no auditing procedure under the Financial Instruments and Exchange Act has been completed for theearnings results.
* Explanation on the Appropriate Use of Earnings Forecasts, and Other Matters of Special Note
The earnings forecasts and other forward-looking statements contained in this document are based on
information currently available to and certain assumptions deemed reasonable by Top REIT. Accordingly,
the actual results may differ materially due to a variety of factors. Moreover, the forecasts should not be
construed as a guarantee of the dividend amount.
This summary of earnings results is translated from the Japanese “Kessan Tanshin” report, dated June 16, 2014,
which is prepared in accordance with generally accepted accounting principles in Japan and Japanese law.
Unless otherwise stated, fractions less than the specified unit are rounded down to the nearest specified unit formonetary amounts and rounded to the nearest specified unit for percentage figures.

24. Asset Management Performance
A. Brief Background of Top REIT
Top REIT, Inc. (Top REIT) was founded on November 2, 2005 based on the Act on Investment Trusts andInvestment Corporations (Act No. 198 of 1951, as amended) with Top REIT Asset Management Co., Ltd.
(Asset Manager) as the incorporator, and listed on the Real Estate Investment Trust Section of the Tokyo
Stock Exchange (TSE) (Securities Code: 8982) on March 1, 2006 with the number of investment units issued
and outstanding totaling 145,500 units. As of the end of the sixteenth fiscal period (April 30, 2014), the total
number of investment units issued and outstanding stands at 176,000 units due to Top REIT issuing
additional investment units through public offering (21, 000 units; including a third-party allotment during
the sixteenth fiscal period).
Top REIT works to conduct management with the aim of maximizing the investment value for its unitholders
by securing stable revenues over the medium to long term and achieving steady growth of its portfolio. To doso, Top REIT focuses on the two strategies of “skilled management of a diversified portfolio” and “optimal
application of the sponsors’ strengths.” As of the end of the sixteenth fiscal period, its portfolio consists of 22
properties with a total acquisition value of ¥197,855 million.
B. Investment Environment and Management Performance<Investment Environment>(a)Economy in General
The Japanese economy has continued on a mild recovery affected by the government’s dynamic public
spending package and continuous monetary easing by the Bank of Japan. Capital investment by companies
is beginning to become active with improved corporate earnings and an increase in government investments.
Personal consumption and housing investment have maintained underlying strength with expectations for
an improvement in the employment and income environments despite the impact from the consumption tax
hike in April this year. Some companies are showing significant recovery in performance due to thedepreciating yen and high stock prices. Although caution remains, the business sentiment of companies
continues to recover. Going forward, the economy is expected to sustainably improve due to the economic
ripple effect from infrastructure construction in line with the hosting of the 2020 Olympic Games in Tokyo
among other factors.
(b)Real Estate Leasing Market[Office Buildings]
A recovery in corporate performance has generated tenant movement for leasing more floor area within thesame property and relocating for expanded spaces. In addition, the supply-demand balance has been
improving due to factors such as relocations to blue-chip office buildings seeking business continuity plans(BCP) and energy saving measures, thus the vacancy rate of office buildings in central Tokyo shows adownward trend. As for rent levels, some regions or properties are seeing rises in new asking rents and thedecrease in rents has been easing recently.
[Retail Properties]
In line with the recovery in business sentiment and wage increases centering on major companies, consumer
sentiment continues to improve and personal consumption is going strong. Even the decrease due to thetemporary backlash from the consumption tax hike in April 2014 was relatively small and the recovery inpersonal consumption is expected to continue going forward. However, with the anticipated decrease inpopulation on the macro level and the ongoing expansion of the E-commerce market size due to factors
such as the increased internet penetration rate on the micro level, the demand for retail properties, which arephysical stores, will become more selective regardless of business type in the face of competition with
online businesses.

3

[Residential Properties]
The residential properties leasing market is experiencing an increase in the number of single-personhouseholds and small households in the Tokyo metropolitan area and other core cities due to population
inflow from other regions. Therefore, the residential properties leasing market has been retaining a stable
occupancy rate. As for the rent levels, rents are stable and generally flat for properties with actual consumer
demand, while the unit rent for high-rent properties is also bottoming out. As such, supply-demandconditions of the residential property leasing market are believed to be favorable.
(c) Real Estate Transaction Market
Against the backdrop of a favorable environment for fund procurement, the real estate transaction market
has become active propelled by the huge appetite for property acquisitions from private funds such asprivate placement investment corporations in addition to J-REITs, and also by the appetite for real estate
investments by overseas investors who anticipate Japanese economic recovery. The favorable equity
financing environment and debt financing environment are expected to continue for the time being, thus it isthought that the real estate transaction market will remain strong. Since market prices appear to be
somewhat overheated for all property types while investments in regional properties are also expanding,further selection of properties is believed to be essential.
(d) Financial Market
Long-term interest rates are expected to remain at a low level for some time as the financial environment inJapan is under a situation whereby the monetary easing policies of the Bank of Japan such as the massive
purchase of government bonds, increased amount for the Asset Purchase Program and extension of theremaining period to maturity of government bonds eligible for purchase are being implemented on an
ongoing basis.
Although the stock market requires ongoing attention due to uncertain factors such as the impact of anotherphase of the consumption tax hike, a reduction in corporate taxes and other policies, as well as overseas
economic trends, interest rate trends and exchange rate trends, it is believed to be strong while a recovery incompanies’ performance is expected to become gradually clear from now on.

<Asset Management Performance >(a)Acquisition and Disposition of Assets
Top REIT began the sixteenth fiscal period with 19 properties (total acquisition value: ¥185,555 million).
With an aim to acquire highly-competitive and highly-profitable properties, Top REIT considered possible
acquisition of properties through not only the “optimal application of the sponsors’ strengths” but also by
utilizing established information channels to collect and carefully select from property sale information,with excellent office buildings located in central Tokyo at the core, as well as other asset classes, bydrawing on the characteristics of being a diversified REIT.
As a result, Top REIT acquired a total of three properties (total acquisition value: ¥12,300 million) as ofNovember 28, 2013 during the sixteenth fiscal period. The three properties are Shinjuku EAST Building
and Ginza Oji Building, two office buildings located in central Tokyo, and Kojima×Bic Camera Kashiwa
Store, a retail property located in Kashiwa-shi, Chiba. With these acquisitions, the number of properties
owned by Top REIT expanded to 22 properties (total acquisition value: ¥197,855 million) as of the end of
the sixteenth fiscal period.
Furthermore, with the main objective to partly fund the acquisition of these three properties, Top REIT
conducted fund procurement of ¥8,883 million through issuance of new investment units and ¥4,500 million
through borrowings from financial institutions during the sixteenth fiscal period.
(b)Management and Maintenance of Portfolio Assets
The basic asset management strategy of Top REIT is sustaining and increasing revenue over the medium tolong term by maintaining and improving tenant satisfaction (the “Tenants First” policy) and keeping4operational management costs at an appropriate level. Top REIT strived to improve tenant satisfaction andmaintain and improve high occupancy rates while sustaining trusted relationships with tenants anddiscerning tenant needs via property management companies. During the sixteenth fiscal period, Top REIT
continued to focus on tenant solicitation activities for successor tenants of Harumi Island Triton Square
Office Tower Y. As a result, the occupancy rate reached 87.5% at the end of the sixteenth fiscal period(April 30, 2014), and is expected to further improve to 93.6% in July 2014, thus likely settling the successor
tenant issue. However, since a tenant who is leasing the entire building of Kanda Nishiki-cho 3-chome
Building has notified its intention to terminate the leasing agreement as of January 2015, solicitation forsuccessor tenants is underway.
Regarding maintenance, Top REIT followed up on ensuring that it had an appropriate grasp of theoperational management conditions and steady implementation of asset management plans for each
property. Based on asset management plans, Top REIT also carried out renewal construction and repair
work that contributed to enhancing the competitiveness of properties, maintaining and improving thefunctionality of properties, and construction that contributed to improving tenant satisfaction. It also took
steps to keep relevant costs at an appropriate level and conducted efficient management of resources.
C. Procurement of Funds
Top REIT procures funds under a financial policy based on stable financial management. Top REIT
resolved on the issuance of 20,000 new investment units through public offering and 1,000 new investment
units through third-party allotment. With these issuances of new investment units, Top REIT procured fundsof ¥8,460 million on November 25, 2013 and ¥423 million on December 13, 2013 respectively. In addition,a short-term loan of ¥4,500 million was made on November 28, 2013, and, together with funds procured
through the issuance of new investment units, was used for the acquisition of the specified assets as of thesame day.
Furthermore, Top REIT conducted new borrowings of a long-term loan of ¥4,500 million (repayment date:
March 29, 2019) on March 31, 2014 and the short-term loan of ¥4,500 million which partly funded thespecified assets was repaid ahead of schedule as of the same day while fixing interest rates for the entire
amount of the concerned long-term loan through an interest-rate swap transaction. In addition, ¥67.5 million
in long-term loans payable was repaid on December 30, 2013 as agreed upon using cash on hand.
As a result, at the end of the sixteenth fiscal period, the total amount of interest-bearing liabilities stands at
100,430 million (¥91,930 million in long-term loans (including the current portion) and ¥8,500 million in
investment corporation bonds), and the ratio of interest-bearing liabilities to total assets is 50.0%. Moreover,
the ratio of long-term interest-bearing liabilities (including the current portion) is 100%, while interestbearing liabilities with fixed interest rates account for 46.5%.
The credit rating of Top REIT as of April 30, 2014 was as follows:
Credit Rating Agency
Rating [Outlook]
Issuer rating: A+ [Stable]
Rating and Investment Information, Inc.
Unsecured investment corporation bond rating (No. 1(R&I)
Unsecured Investment Corporation Bonds): A+(Note) Top REIT requested Moody’s Japan, K.K. (“Moody’s”) withdrawal of issuer rating and seniorunsecured long-term debt rating and withdrawal was made April 10, 2014.
Moreover, Top REIT conducted shelf registration for investment corporation bonds, as indicated below, inorder to secure flexible procurement of long-term funds.
[Overview of Shelf Registration]
Object of Shelf Registration
Investment corporation bonds(excluding short-term corporation bonds)

Amount to be Issued

Scheduled Period of Issue¥100,000 million

From May 20, 2014 to May 19, 20165

D. Business Results and Dividends
As a result of the asset management and operations described above, Top REIT recorded asset management
performance during the sixteenth fiscal period of ¥5,637 million in operating revenue, ¥2,528 million in
operating income and ¥1,913 million in ordinary income after deducting expenses concerning borrowings,
etc., and net income was ¥1,913 million.
As for dividends, with the aim of having an amount equivalent to profit dividends deducted as expenses
based on the application of the special provision on taxation of investment corporations (Article 67-15 of
the Act on Special Measures Concerning Taxation [Act No. 26 of 1957, as amended; hereinafter, the“Special Taxation Measures Act”]), Top REIT decided that the maximum value arrived at when the numberof units issued and outstanding (176,000 units) is multiplied by an integer, within the limit of the balance ofunappropriated retained earnings of the sixteenth fiscal period and after deducting the amount of deferred
tax liabilities being corrected due to the change in tax rate which would be transferred to the reserve for
reduction entry, would be paid out. Consequently, Top REIT declared a dividend per investment unit of¥10,864.

5. Management Policy and Future Issues(a)Management Strategy for Existing Properties
Top REIT will continue to follow its basic asset management strategy that centers on sustaining andincreasing revenue over the medium to long term by maintaining and improving tenant satisfaction (the“Tenants First” policy) and keeping operational management costs at an appropriate level. Under thisstrategy, Top REIT will focus on sustaining relationships of trust with tenants, leasing vacant spaces andsuch, as well as striving to maintain stable occupancy rates over the medium to long term.
Furthermore, Top REIT will also work to ensure an appropriate perception of the operational management
conditions for each property while steadily implementing such measures as to sustain and improve revenues
and keep operational management costs at an appropriate level. In addition, Top REIT will carry out
systematic repair work and such to enhance the competitiveness of properties and to maintain and improve
the functionality of properties, in an aim to secure stable revenues over the medium to long term.
(b)Investment Strategy for New Properties
Top REIT aims to increase its dividends over the medium to long term by realizing external growth throughacquisition of new properties. Top REIT will continue to not only further utilize pipeline support functions
from sponsor companies, but also utilize various established information channels to collect information on
new properties based on detailed analysis of market environment of each asset classes, while placingemphasis on primarily highly competitive office buildings. By doing so, Top REIT aims to expand theportfolio size while improving its quality.
Furthermore, Top REIT makes it a management policy to keep the ratio of the investment amount perproperty at less than 20% of the entire portfolio as a target over the medium to long term. For reference, theacquisition value of the NEC Head Office Building accounts for 21.2% of the total acquisition value of Top
REIT’s properties as of the end of the sixteenth fiscal period. Going forward, Top REIT will work to reduce
the risk of concentration on specific properties by steadily advancing further external growth.
(c)Financial Strategy
Top REIT will continue to implement diversified and flexible fund procurement operations in preparation
for acquisition of new properties and refinancing of existing loans, etc. While securing mobility andflexibility in fund procurement, Top REIT will work to reduce the risk involved in fund procurement byextending borrowing periods and spreading out the repayment dates. At the same time, Top REIT will
manage the risk of interest rate fluctuations by taking into account the balance of borrowings at floating andfixed interest rates, as it discerns the interest rate trends. Moreover, financial soundness will be maintainedby keeping the leverage at an appropriate level.

6

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

6. Significant Subsequent Events
There are none applicable.
[Reference Information]
New borrowings
Top REIT entered into a loan agreement as described below on March 27, 2014 for the repayment oflong-term loan of ¥4,000 million (Lender: Sumitomo Mitsui Trust Bank, Limited., Development Bankof Japan Inc., The Dai-ichi Life Insurance Company, Limited) due for repayment on June 30, 2014.
Funds from Term Loan No. 23-(1) were allocated for the early repayment of a short-term loan of ¥4,500
million on March 31, 2014.
Long-term loan (Term Loan No. 23-(1))

LenderAmount of loan
Interest rate
Execution date
Borrowing method
Principal repayment datePrincipal repayment method
Collateral, etc.

Sumitomo Mitsui Trust Bank, Limited.
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking Corporation
The Bank of Fukuoka, Ltd.
Aozora Bank, Ltd.
JPY 4,500 million
0.81625% (Interest rate to be actually paid up to March 29, 2019 fixedby an interest-rate swap transaction)
March 31, 2014
Borrowing based on the loan agreement concluded on March 27, 2014
March 29, 2019
Bullet repayment on the principal repayment dateUnsecured and unguaranteed

Long-term loan (Term Loan No. 23-(2))

LenderAmount of loan
Interest rate
Execution date
Borrowing method
Principal repayment datePrincipal repayment method
Collateral, etc.

Sumitomo Mitsui Trust Bank, Limited.
Mizuho Bank, Ltd.
Sumitomo Mitsui Banking Corporation
The Dai-ichi Life Insurance Company, Limited
The Bank of Fukuoka, Ltd.
Aozora Bank, Ltd.
JPY 4,000 million
To be determined
June 30, 2014 (scheduled)
Borrowing based on the loan agreement concluded on March 27, 2014
March 29, 2019
Bullet repayment on the principal repayment dateUnsecured and unguaranteed

77. Outlook for the Seventeenth and Eighteenth Fiscal Periods
The earnings forecasts for the seventeenth fiscal period (from May 1, 2014 to October 31, 2014) and theeighteenth fiscal period (from November 1, 2014 to April 30, 2015) are as follows:
Please refer to the page 9 for the preconditions of earnings forecasts.
Fiscal Period

Seventeenth Fiscal Period

Eighteenth Fiscal Period[period of asset management][ 184days][ 181days]

Operating Revenue¥5,758million¥5,454million

Operating Income¥2,483million¥2,253million

Ordinary Income¥1,866million¥1,637million

Net Income¥1,865million¥1,636million

Dividend per Unit
(excluding dividend in excess of earnings)¥10,600 (Note 2)¥9,300 (Note 2)

Dividend in Excess of Earnings per Unit

(Note 1)

(Note 2)¥0¥0The earnings forecasts represented above are the current estimated figures calculated based on
certain assumptions. Accordingly, the actual operating revenue, operating income, ordinary
income, net income, dividend per unit and dividend in excess of earnings per unit may vary
due to changes in the circumstances. Moreover, the forecasts should not be construed as aguarantee of the dividend amount.
With regard to the ¥78 million of internal reserves, Top REIT will not reverse all or part of theinternal reserves for dividend of the seventeenth and eighteenth fiscal period.

8Preconditions for Forecast of Earnings Results for the Seventeenth Fiscal Period (from May 1, 2014 to
October 31, 2014) and the Eighteenth Fiscal Period (from November 1, 2014 to April 30, 2015)
Item
Preconditions and Assumptions
 Seventeenth fiscal period: May 1, 2014 – October 31, 2014 (184 days)
Management
Period Eighteenth fiscal period: November 1, 2014 – April 30, 2015 (181 days) The forecast is based on 22 properties Top REIT owns as of June 16, 2014. The actualPortfolio Assets
circumstances may change depending on the acquisition or disposal of other properties.
Number of The number of investment units issued and outstanding is based on the number as of June
Investment Units16, 2014, which is 176,000 units, and assumes that no issuance of new investment units
Issued andwill be made through April 30, 2015.
Outstanding It is assumed that the total amount of interest-bearing liabilities is ¥100,430 million,
which is the amount as of April 30, 2014.
 The ¥4,000 million loan payable due for repayment on June 30, 2014 will be fullyrefinanced and a loan agreement has already been concluded.
Interest-Bearing
Liabilities
 For the seventeenth fiscal period, it is assumed that the ¥67 million in long-term loans
payable will be repaid on June 30, 2014 as agreed upon.
 For the eighteenth fiscal period, it is assumed that the ¥67 million in long-term loans
payable will be repaid on December 30, 2014 as agreed upon.
 For real estate rent revenue related to existing properties, Top REIT takes into
consideration execution of new lease agreements and cancellation of lease agreementsthat have been finalized and scheduled, along with current real estate leasing market
conditions, as well as factors that may cause fluctuations in such aspects as risks
Operatingassociated with rent revision due to fluctuations in rent of tenants reaching their rent
Revenuerevision period or contract renewal period.
 For Kanda Nishiki-cho 3-chome Building, it is assumed it will remain vacant after thetermination date, since the termination of lease agreement by its major tenant has been
confirmed and a new lease agreement has not been concluded.
 Top REIT adopts a method of treating property, city planning and depreciable asset taxes,
etc. on real estate, etc. it owns, as expenses related to the rent business in the amountcorresponding to the management period out of the assessed and determined taxation
amount. In addition, as for the acquisition of real estate or beneficiary interests in trust inreal estate, the adjustments equivalent to property tax for the acquired fiscal year paid to
the transferor will be included in acquisition costs, and thus will not be recorded as
expenses in the corresponding period.
 It is assumed that the amount of property tax, etc. will be ¥638 million for theseventeenth fiscal period and ¥638 million for the eighteenth fiscal period.
OperatingExpenses It is assumed that the depreciation and amortization will be ¥1,203 million for theseventeenth fiscal period and ¥1,216 million for the eighteenth fiscal period.
 Repair expenses for buildings, etc. may vary greatly from the forecasted amount due tovarious reasons. For example, emergency repair expenses may possibly arise due to
unexpected factors causing building damage, etc. Another reason is that repair expenses
are expenses that are not accrued periodically and, rather, the variation in the amountlargely depends on the fiscal period.
 Management operation fees are assumed by considering historical data and the detail ofmanagement contracts.
 It is assumed that non-operating expenses for the seventeenth fiscal period will be ¥621
million, of which interest on loans and interest expenses on investment corporation bonds(including related expenses) will be ¥610 million. Amortization of investment unit
Non-Operating
issuance expenses will be ¥6 million.
Expenses It is assumed that non-operating expenses for the eighteenth fiscal period will be ¥617
million, of which interest on loans and interest expenses on investment corporation bonds(including related expenses) will be ¥607 million. Amortization of investment unit
9

issuance expenses will be ¥6 million.

Dividend per
Unit




Dividend in
Excess ofEarnings per Unit

Dividends (dividend per unit) are calculated based on the dividend policy stipulated in
Top REIT’s Articles of Incorporation.
It is assumed that net income will be fully distributed as dividend (excluding fractions) in
the seventeenth Fiscal Period and the eighteenth fiscal Period.
Top REIT will not reverse the amount of internal reserves for the seventeenth andeighteenth fiscal period.



Top REIT does not currently anticipate dividends in excess of earnings (dividend inexcess of earnings per unit).



It is assumed that there will be no changes in legislation, taxation, accounting standards,
Tokyo Stock Exchange’s listing regulations, rules and requirements imposed by The
Investment Trusts Association, Japan that would impact the aforementioned forecasts.
It is assumed that there will be no unpredictable material changes in general economic
trends and real estate market conditions, etc.

Other


10

8. Financial Statements(1) Balance Sheets(Unit: thousand yen)Fifteenth Fiscal Period(as of October 31, 2013)

Sixteenth Fiscal Period(as of April 30, 2014)

AssetsCurrent assets
Cash and deposits
Cash and deposits in trust
Operating accounts receivable
Prepaid expenses
Deferred tax assets
Consumption taxes receivable
Other
Total current assets
Noncurrent assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Structures
Accumulated depreciation
Structures, net
Machinery and equipment
Accumulated depreciation
Machinery and equipment, net
Tools, furniture and fixtures
Accumulated depreciation
Tools, furniture and fixtures, net
Land
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Structures in trust
Accumulated depreciation
Structures in trust, net
Machinery and equipment in trust
Accumulated depreciation
Machinery and equipment in trust, net
Tools, furniture and fixtures in trust
Accumulated depreciation
Tools, furniture and fixtures in trust, net
Land in trust
Total property, plant and equipment
Intangible assets
Leasehold right in trust
Other intangible assets in trust
Other
Total intangible assets
Investments and other assets
Lease and guarantee deposits
Long-term prepaid expenses
Other
Total investments and other assets
Total noncurrent assets
Deferred assets
Investment corporation bond issuance costs
Investment unit issuance expenses
Total deferred assets
Total assets

11903,3143,939,421
103,255
329,13617－
6,586
5,281,731

3,049,986
4,273,472
193,414353,139
16
137,402
1,830
8,009,261

1,150,996(210,309)
940,687
5,559(3,280)2,278
20,309(11,393)
8,915
5,717
(1,724)
3,992
4,888,525
62,810,594(14,921,677)
47,888,916
697,890(298,860)
399,030
256,518(131,514)
125,003
260,147(141,218)
118,928
125,686,918
180,063,196

1,153,573(225,614)
927,958
5,559(3,388)2,170
20,309(11,988)
8,320
5,717
(2,137)
3,579
4,888,525
66,712,538(16,038,443)
50,674,094
801,903(317,387)
484,516
307,426(156,723)
150,702
273,432(156,700)
116,731
134,748,836
192,005,437

－
1,356
85
1,441

7,348
2,198
63
9,610

10,000562,703
231,780
804,484
180,869,122

10,000492,375
229,164
731,540
192,746,588

18,372－
18,372
186,169,227

12,86133,393
46,254200,802,104

(Unit: thousand yen)Fifteenth Fiscal Period(as of October 31, 2013)

Sixteenth Fiscal Period(as of April 30, 2014)

Liabilities
Current liabilities
Operating accounts payable
Current portion of long-term loans payable
Accounts payable – otherAccrued expenses
Income taxes payable
Accrued consumption taxes
Advances received
Other

136,532
4,135,000
239,584
131,320859
61,670705,8422,821

296,523
4,135,000
252,726
131,332853－
795,670
9,937

Total current liabilities

5,413,630

5,622,044

Investment corporation bondLong-term loans payable
Tenant leasehold and security deposits
Tenant leasehold and security deposits in trust
Deferred tax liabilities
Long-term advances received
Derivatives liabilities

8,500,000
83,362,500
101,016
4,873,415
19,293
122
27,9498,500,000
87,795,000
101,016
5,649,955
13,79979
38,429Total noncurrent liabilities
Total liabilities

96,884,297

102,098,279

102,297,927

107,720,324

82,260,100

91,143,100

49,95849,958

Noncurrent liabilities

Net Assets
Unitholders’ equity
Unitholders’ capital
Surplus
Voluntary retained earnings
Reserve for reduction entry
Total Voluntary retained earnings
Unappropriated retained earnings (undisposed loss)
Total surplus
Total unitholders’ equity
Valuation and translation adjustments
Deferred gains or losses on hedges

49,95849,958

1,579,617
1,629,576

1,913,997
1,963,956

83,889,676

93,107,056(18,376)(25,275)

Total valuation and translation adjustments
Total net assets(18,376)(25,275)

83,871,299

93,081,780

Total liabilities and net assets

186,169,227

200,802,104

12

(2) Statements of Income(Unit: thousand yen)Fifteenth Fiscal Period(May 1, 2013 –October 31, 2013)

Sixteenth Fiscal Period(November 1, 2013 –April 30, 2014)

Operating revenue
Rent revenue – real estate

5,125,553

5,590,221

Other lease business revenue

28,74847,135

Total operating revenue

5,154,302

5,637,356

2,438,852

2,622,805

406,366

354,776

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

8,385

8,898

Administrative service fees

64,806

66,861

Directors’ compensations

6,300

6,300

Audit fee

10,00010,000

Other operating expenses

46,94038,929Total operating expenses
Operating income

2,981,651

3,108,571

2,172,650

2,528,785

641

675

825

1,023

10,304191

Non-operating income
Interest income
Reversal of dividends payable
Insurance income

71－

11,842

1,891

Interest expenses

406,843

408,933

Interest expense on investment corporation bonds

42,96542,034

Other
Total non-operating income
Non-operating expenses

Amortization of investment corporation bond issuance costs
Borrowing related expenses
Amortization of investment unit issuance expenses
Other

5,511

5,511

143,961

150,072

－

6,678

4,639

4,415

603,922617,646

Ordinary income

1,580,570

1,913,029

Income before income taxes

1,580,570

1,913,029

958

957

Income taxes – deferred(0)(1,913)

Total income taxes

957

(955)

1,579,612

1,913,985

Total non-operating expenses

Income taxes – current

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

13

4

12

1,579,617

1,913,997

(3) Statements of Changes in Net Assets (Unitholders’ Equity)
For the period from May 1, 2013 to October 31, 2013 (15th fiscal period)(Unit: thousand yen)
Unitholders’ equity
Surplus
Unitholders’capitalBalance at the
beginning of theperiodChanges of items
during the period
Dividends fromsurplus
Net income
Net changes of
items other thanunitholders’equity (net)Total changes of
items during theperiodBalance at the endof current period

82,260,100

Voluntary retained earnings
Total
Reserve for
Voluntary
reduction entry
retainedearnings
49,95849,958

Total surplus

Totalunitholders’equity1,822,649

1,872,608

84,132,708

ሺ1,822,645)(1,822,645)(1,822,645)

1,579,612

1,579,612

1,579,612－－－

ሺ243,032)(243,032)(243,032)

82,260,100

49,95849,958

1,579,617

1,629,576

83,889,676

Valuation and translation
adjustments

Balance at the
beginning of theperiodChanges of items
during the period
Dividends fromsurplus
Net income
Net changes of
items other thanunitholders’equity (net)Total changes of
items during theperiodBalance at the endof current period

Unappropriatedretainedearnings(undisposed
loss)

Deferred gains
or losses onhedgesTotal valuationand translation
adjustments(5,177)(5,177)

Total net
assets84,127,531(1,822,645)
1,579,612(13,199)(13,199)(13,199)(13,199)(13,199)(256,231)(18,376)(18,376)

83,871,299

14

For the period from November 1, 2013 to April 30, 2014 (16th fiscal period)(Unit: thousand yen)
Unitholders’ equity
Surplus
Unitholders’capitalBalance at the
beginning of theperiodChanges of items
during the period
Issuance of new
investment units
Dividends fromsurplus
Net income
Net changes of
items other thanunitholders’equity (net)Total changes of
items during theperiodBalance at the endof current period

82,260,100

Voluntary retained earnings
Total
Reserve for
Voluntary
reduction entry
retainedearnings
49,95849,958

Total surplus

Totalunitholders’equity1,579,617

1,629,576

83,889,676

8,883,000

8,883,000(1,579,605)(1,579,605)(1,579,605)

1,913,985

1,913,985

1,913,985

8,883,000－－

334,380

334,380

9,217,380

91,143,100

49,95849,958

1,913,997

1,963,956

93,107,056

Valuation and translation
adjustments

Balance at the
beginning of theperiodChanges of items
during the period
Issuance of new
investment units
Dividends fromsurplus
Net income
Net changes of
items other thanunitholders’equity (net)Total changes of
items during theperiodBalance at the endof current period

Unappropriatedretainedearnings(undisposed
loss)

Deferred gains
or losses onhedgesTotal valuationand translation
adjustments(18,376)(18,376)

Total net
assets

83,871,299

8,883,000(1,579,605)
1,913,985(6,899)(6,899)(6,899)(6,899)(6,899)9,210,480(25,275)(25,275)

93,081,780

15

(4) Statements of Cash Dividend Distributions
For the period
from May 1, 2013
to October 31, 2013

For the period
from November 1, 2013
to April 30, 2014

Amount(yen)(Note 1)

Amount(yen)(Note 2)

I. Unappropriated retained earnings

1,579,617,747

1,913,997,778

II. Total Amount of Dividends

1,579,605,000

1,912,064,000(10,191)(10,864)－

1,914,510

12,747

19,268(Dividend per unit)
III. Voluntary retained earnings
Reserve for reduction entry
IV. Retained earnings brought forward(Note1)

In accordance with the “cash distribution policy” stipulated in Article 34 of the Articles of Incorporation, the amountsof dividends are limited to the amounts of income. The article also stipulates the policy that “Top REIT shall
distribute amount in excess of the amount equivalent to 90% of its distributable profits as stipulated in Article 67-15
of the Act on Special Measures Concerning Taxation.” Based on these policies, Top REIT decided on a total
distribution of 1,579,605,000 yen as distribution of income for the period. This is the maximum value arrived at when
the number of units issued and outstanding (155,000 units) is multiplied by an integer, within the limit ofunappropriated retained earnings for the fiscal period.
Furthermore, Top REIT does not make cash distributions in excess of the profit as stipulated in Article 34-2 of the
Articles of Incorporation.

(Note2)

In accordance with the “cash distribution policy” stipulated in Article 34 of the Articles of Incorporation, the amountsof dividends are limited to the amounts of income. The article also stipulates the policy that “Top REIT shall
distribute amount in excess of the amount equivalent to 90% of its distributable profits as stipulated in Article 67-15
of the Act on Special Measures Concerning Taxation.” Based on these policies, Top REIT decided on a total
distribution of 1,912,064,000 yen as distribution of income for the period. This is the maximum value arrived at when
the number of units issued and outstanding (176,000 units) is multiplied by an integer, within the limit of the balanceof unappropriated retained earnings of the sixteenth fiscal period and after deducting the amount of deferred tax
liabilities being corrected due to the change in tax rate which would be transferred to the reserve for reduction entry.
Furthermore, Top REIT does not make cash distributions in excess of the profit as stipulated in Article 34-2 of the
Articles of Incorporation.

16

(5) Statements of Cash Flows(Unit: thousand yen)Fifteenth Fiscal Period(May 1, 2013 –October 31, 2013)
Net cash provided by (used in) operating activities
Income before income taxes
Depreciation and amortization
Amortization of trademark
Amortization of investment corporation bond issuance costs
Amortization of investment unit issuance expenses
Interest income and interest on securities
Interest expenses
Decrease (increase) in operating accounts receivable
Decrease (increase) of consumption taxes receivable
Decrease (increase) in prepaid expenses
Increase (decrease) in operating accounts payable
Increase (decrease) in accounts payable – other
Increase (decrease) in accrued consumption taxes
Increase (decrease) in advances received
Decrease (increase) in long-term prepaid expenses
Other, net
SubtotalInterest income received
Interest expenses paid
Income taxes paid

Sixteenth Fiscal Period(November 1, 2013 –April 30, 2014)

1,580,570
1,115,879
21
5,511
－
(641)
449,809(75,812)－(11,887)(9,835)(1,280)40,927(20,537)
143,973(31,711)

1,913,029
1,193,406
21
5,511
6,678
(675)
450,967(90,159)(137,402)(24,002)
15,641
13,142(61,670)
89,82870,327(17,394)

3,184,987
641(449,111)(801)

3,427,250
675(450,954)(963)

Net cash provided by (used in) operating activities

2,735,714

2,976,008

Net cash provided by (used in) investing activities
Purchase of property, plant and equipment
Purchase of property, plant and equipment in trust
Purchase of property, intangible assets in trust
Proceeds from tenant leasehold and security deposits in trust
Repayments of tenant leasehold and security deposits in trust(549)(290,168)－
95,109(508,214)(2,951)(12,961,001)(8,450)1,098,156(321,616)

Net cash provided by (used in) investing activities(703,823)(12,195,863)－－－(67,500)－－(1,822,645)

4,500,000(4,500,000)
4,500,000(67,500)
8,883,000(35,317)(1,579,605)(1,890,145)

11,700,577

Net cash provided by (used in) financing activities
Increase in short-term loans payable
Decrease in short-term loans payable
Proceeds from long-term loans payable
Repayment of long-term loans payable
Proceeds from issuance of investment units
Payments for investment unit issuance expenses
Dividends paid
Net cash provided by (used in) financing activities
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

17

141,745

2,480,722

4,700,990
4,842,736

4,842,736
7,323,458

9. Portfolio Data
As of April, 2014
Asset Class

Area

Central Tokyo
OfficeBuilding

Property Name

Acquisition
Price

Appraisal Value at
End of Period

NEC Head Office Building
Harumi Island Triton Square Office Tower Y
Akasaka Oji Building
Kanda Park Plaza
Shiba-Koen Building
Harumi Island Triton Square Office Tower Z
Kanda Nishiki-cho 3-chome Building
Shinkawa Chuo Building
Shinjuku EAST Building
Ginza Oji Building(million yen)
41,95033,000
9,660
5,156
5,770
20,00012,700
5,610
5,800
2,000

(million yen)
51,90027,200
8,850
5,000
3,410
12,30010,500
5,990
6,250
2,050

Investment
Breakdown(Note)
(%)
28.9
15.1
4.9
2.8
1.9
6.8
5.8
3.3
3.5
1.1

Tokyo
Faret East Building
2,091
2,530
1.4
Metropolitan Area
Subtotal (11 properties)
143,737
135,980
75.6
Sagamihara Shopping Center
12,0008,480
4.7
Ito-Yokado Higashi-Narashino Store
8,900
5,400
3.0
Tokyo
Metropolitan Area Musashiurawa Shopping Square
4,335
3,870
2.2
RetailKojima ×Bic Camera Kashiwa Store
4,500
4,730
2.6
Property
Other
MEL Building
1,210
1,280
0.7
Major Cities
Subtotal (5 properties)
30,94523,76013.2
Central Tokyo
Top Residence Nihonbashi Kayabacho
2,400
2,640
1.5
Fukasawa House Towers H&I
10,6357,230
4.0
Ecology Toyosu Procentury
5,160
5,100
2.8
Residential Tokyo
Property
Metropolitan Area Impress Musashi-Koganei
1,223
1,280
0.7
Top Residence Yoga
1,165
1,200
0.7
Subtotal (5 properties)
20,583
17,450
9.7
Central TokyoOAK PLAZA
2,590
2,610
1.5
Other
Property
Subtotal (1 property)
2,590
2,610
1.5
Total (22 properties)
197,855
179,800
100.0(Note) The investment breakdown is the ratio of the appraisal value at end of period for the applicable property or the applicable asset
class to the sum total of the appraisal value at end of period for all properties in the portfolio and is rounded to the first decimal
place.

18

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

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

19