Invincible

Investment
Corporation

This is a summary English language version of the original Japanese semi-annual report available on our
Website. However, no assurance or warranties are given with respect to the accuracy or completeness of thissummary English language version. The Japanese original shall prevail in the case of any discrepancies
between this summary English language version and the Japanese original.

Invincible Investment Corporation
Asset Management Report
Fiscal Period ended December 31, 2013 (July 1, 2013 to December 31, 2013)

Contents
Greetings from Naoki Fukuda, Executive Director of Invincible Investment
Corporation and President & CEO of Consonant Investment Management Co., Ltd.
Summary of Financial Results
Efforts towards Further GrowthProfitability, Dividend Trends, and Roadmap for Growth
Operating Results for Period ended December 2013
Portfolio Overview
Information for Unitholders
Asset Management Report
I.

1
3
4
6
8
12
15
16

II.
III.
IV.
V.

32
34
35
36

Balance Sheet

VI.

Statement of Income
Statement of Unitholders’ Equity
Notes
Statement of Cash Distribution

VII.

Statement of Cash Flows (Reference Information)

47
48

Roppongi Hills Mori Tower 6-10-1 Roppongi Minato-ku Tokyo, 106-6190
www.invincible-inv.co.jp/

Invincible

Investment
Corporation

Greetings from Naoki Fukuda, Executive Director of Invincible Investment Corporation
and President & CEO of Consonant Investment Management Co., Ltd.

It gives me much pleasure to take this opportunity to express my sincere gratitude to all investors of Invincible
Investment Corporation (INV) for your ongoing support.
We hereby provide you with a report of the results of INV’s financial results and operational condition for the
21st period (covering the period from July 1, 2013 to December 31, 2013).
First, with respect to the operation of our properties, as a result of our continued strengthening of leasing
activities and thorough management of property related and other expenditures, the average occupancy rate forour portfolio as a whole increased from 95.9% for the prior fiscal period to 96.3%, and despite a relative decline
in revenues from rental properties due to seasonal factors, we were able to record NOI (Note 1) of JPY 2,006
million, which is almost the same level as the prior fiscal period (representing only a 0.1% decrease).
With respect to financial management, on December 20, 2013 we successfully refinanced the existing syndicate
loans and Shinsei Trust Loans A and B (total outstanding balance of JPY 22,760 million with an average interest
rate of 4.98%) through a new syndicate loan (borrowing amount of JPY 20,350 million with an interest rate of
1.68%) arranged by Sumitomo Mitsui Banking Corporation and The Bank of Tokyo-Mitsubishi UFJ, Ltd. on
December 21, 2013, and a capital increase via third-party allotment (total newly issued investment units:
224,887; total issue value: JPY 2,000 million). As a result, we significantly enhanced our earnings potential
through lower interest expenses, improved our loan-to-value (LTV) ratio and enhanced our ability for future
external growth.
Notwithstanding the increase in units outstanding resulting from the third-party allotment and the recognition ofcertain one-time expenses in connection with the refinancing, we are pleased to report distributions per unit of
JPY 237, which exceeds the previous forecasted level of JPY 200.
Furthermore, we expect that the distribution per unit for the fiscal period ending June 30, 2014, for which thedecrease in interest expenses resulting from the refinancing will be evident for the full fiscal period, will be JPY
464.
Under the sponsorship from July 2011 by Calliope Godo Kaisha, an affiliate company of Fortress Investment
Group LLC (together with other related companies, the “Fortress Group”) (Note 2), we have been able to achievea financial restructuring, increases in occupancy rates, cost reductions and an increase in earnings potential
through property acquisitions. With the implementation of the refinancing discussed above, we have been able toestablish earnings potential and a financial foundation to make a leap into a new stage in our development.
Going forward, we will seek further growth for INV and further enhancement of unitholders’ value throughproactive asset management that takes advantage of the improving leasing market (such as through increases in
occupancy rates and rent levels), as well as through internal growth resulting from additional reductions inborrowing costs and external growth by fully utilizing the Fortress Group’s expertise in the real estate businessand pipeline.
We look forward to receiving the continued support of all of our unitholders.
Naoki Fukuda
Executive Officer, Invincible Investment Corporation
President and Representative Director, Consonant Investment Management Co. Ltd

1

Invincible

Investment
Corporation(Note 1) NOI = rental revenues – property-related expenses + depreciation expense(Note 2) In July 2011, Calliope Godo Kaisha acquired 97.35% (note 3) of the outstanding shares of Consonant
Investment Management Co, Ltd., and the Investment Corporation conducted a capital increase via third-party
allotment with Callope Godo Kaisha as the principal investor.
(Note 3) In October 2013 the investment ratio became 100%

Fixed
Distributions
Forecast
Distributions

The 21st fiscal period(the fiscal period
ended December 2013)
The 22 fiscal period(the fiscal period ended June2014)

Per investment
unit JPY 237
Per investment
unit JPY 464(Note) We are forecasting operating revenues of JPY 2,760 million and net income of JPY 231 million for the
22nd fiscal period.
The forward-looking statements, forecasts and goals mentioned above are based on available information,
assumptions and estimates as of February 26, 2014. These assumptions and estimates are unavoidably uncertain,
and could be affected by various risks and factors beyond INV’s control. Thus, no guarantee can be maderegarding the realization of such future forecasts and targets, and actual results may vary significantly.

2

Invincible

Investment
Corporation

Summary of Financial Results

Operating Revenue (Thousands of yen)
Ordinary Income(Thousands of yen)
Net Income(Thousands of yen)
Net Assets(Thousands of yen)
Total Assets(Thousands of yen)
Net Assets per Unit
(Thousands of yen)
Net Assets/Total Assets (Thousands of yen)
Distribution per Unit
(Thousands of yen)
Number of Units Issued(Units)Period fromJanuary 1, 2012
toJune 30, 2012

Period from
July 1, 2012 to
December 31,
2012

Period fromJanuary 1, 2013
toJune 30, 2013

Period from
July 1, 2013 to
December 31,
2013

2,176,839

2,476,430

2,760,177

2,740,449

125,981

114,784

335,683

353,360

128,175

114,179

335,078

352,755

32,826,175

32,670,697

32,848,025

35,844,824

67,698,887

80,200,022

80,249,063

79,176,632

24,34624,231

24,36322,785

48.5

40.7

40.9

45.3

200

117

264

237

1,348,292

1,348,292

1,348,292

1,573,179

Note: Figures are rounded down to the indicated unit and percentages are rounded to one decimal place. However, “Net Assets per Unit” are rounded
to the nearest yen.

Operating Revenue
2,740,449 thousand yen

Operating Income
352,755 thousand yen

Distribution per Unit
237 yen

Down 19,727 thousand yen
from previous period(0.7% decrease)Up 17,677 thousand yen fromprevious period (5.3% increase)

Down 27 yen from previous
period (10.2% decrease)

2,760,177 2,740,449

2,476,430

335,078 352,755

2,176,839

01/01/12
to
06/30/12

264
200

07/01/12
to12/31/12

01/01/13 07/01/13
toto
06/30/13 12/31/13

Unit: Thousand yen

128,175

114,179

01/01/12
to
06/30/12

07/01/12
to12/31/12

237

117

01/01/13
to
06/30/13

07/01/13
to12/31/13

01/01/12
to
06/30/12

Unit: Thousand yen

07/01/12
to12/31/12

01/01/13 07/01/13
toto
06/30/13 12/31/13

Unit: yen

Note: Figures are rounded down to the indicated unit and percentages are rounded to one decimal place.

3

Invincible

Investment
Corporation

Efforts towards Further Growth
Paving the way for future growth with new borrowing from Mega Banks•

A new syndicate loan of JPY 20,350 million led by Sumitomo Mitsui Banking Corporation and The Bank ofTokyo‐Mitsubishi UFJ, Ltd. refinanced the Shinsei Trust Loans A&B (JPY 9,548 million) (Note 1) and theexisting syndicate loan (JPY 13,212 million) (Note 1)•

New equity raise of approximately JPY 3 billion (Note 2) via Third‐Party Allotment to affiliates of Fortress
Investment Group LLC. (FIG), and Secured Capital Investment Management Co., Ltd.

•The interest rate on the entire portfolio declined from 3.66% to 1.95%, and net income for the 22nd Fiscal
Period (1H/2014) is expected to increase by 2.2x to JPY 465(Note 3)•

The Refinancing and Third-Party Allotment enhances Invincible’s ability to achieve external growth(Note 1) Balance of Shinsei Trust Loans A & B and existing Syndicate Bank Loan as of December 20, 2013.
(Note 2) Total issue price: JPY2,999,992,580 = Issue price: JPY 13,340 per unit x Number of new investment units: 224,887 units.
(Note 3) The forward-looking statements above are based on estimates and assumptions based on information available on February 26, 2014.
Estimates and assumptions are affected by a variety of factors and risks that are beyond the control of Invincible. Therefore, no guarantees can bemade as to the realization of the future goals or estimates, and results may be materially different from estimates.

Strengthening of Bank Formation<Bank formation excluding entrusted borrowing>
Before Refinancing

After Refinancing
Aozora Bank, Ltd.
7% (JPY 1, 350 million)
Shinsei Trust & Banking (Note 3)
10% (JPY 2,000 million)

Shinsei Bank,
Limited. 13%(JPY 2,900 million)
Citibank Japan
Ltd. 13%(JPY 2,900 million)

Sumitomo Mitsui

Shinsei Trust& BankingCo., Ltd.
(Note 2)
42%(JPY 9500
million)The Bank of New
York Mellon(Note 1) 13%(JPY 2,900
million)
MetLifeAlico Life Insurance K.K.
19% (JPY 4,400 million)

Banking Corporation
27% (JPY 5,500 milllion)
Citibank Japan Ltd.
10% (JPY 2,000 million))
Shinsei Bank,
Limited 20%(JPY 4,000 million)

The Bank of Tokyo
Mitsubishi UFJ, Ltd.
27% (JPY 5,500 )(Note 1) The Bank of New York Mellon Trust (Japan), Ltd. is the trustee in the form of a specified money trust, and Platinum CRE Loan Investment
Limited Partnership holds beneficiary interests for such trust.
(Note 2) There were two loans whose debtor bank was Shinsei Trust & Banking Co., Ltd. The details for the borrowings as of July 29, 2011 are:
‐ Shinsei Trust Loan A (7.1billion): The borrowing was conducted in the form of a specified money trust, with Shinsei Trust as the trustee andShinsei Bank holds beneficiary interests for such trust. Shinsei
Bank re-entrusted the subordinated beneficiary interests in the said trust to Shinsei Trust as self‐benefit trust. Shinsei Trust entered into a total
return swap transaction agreement with Calliope Godo Kaisha(Calliope) in connection to the said re-entrusted trust. The total return swap gave Calliope an indirect and partial economic interest in thesubordinated beneficiary interests in the trust concerning the lending by Shinsei Trust.
‐ Shinsei Trust Loan B (2.4billion): The borrowing was conducted in the form of a specified money trust, with Shinsei Trust as the trustee andCitibank holds beneficiary interests for such trust. Citibank reentrusted the part of the beneficiary interests in the said trust to Shinsei Trust as self‐
benefit trust benefit. Shinsei Trust entered into a total return swap agreement with Calliope in connection to the said reentrusted
trust. The total return swap gave Calliope an indirect and partial economic interest in certain beneficiary interests in the trust concerning the lending
by Shinsei Trust.
(Note 3) Shinsei Trust & Banking Co., Ltd. is the trustee in the form of a specified money trust, and Platinum CRE Loan II Investment Limited
Partnership holds beneficiary interests for such trust.
(Note 4) Figures are rounded down, while ratios are rounded to the nearest whole number.

4

Invincible

Summary of Refinancing

Investment
Corporation(Before transaction: as of December 19, 2013)
Loan

Debtor Bank

Shinsei Trust Loan A

Metlife Alico Life Insurance K.K.
The Bank of New York Mellon Trust(Japan), Ltd.(Note 1)
Citibank Japan Ltd.
Shinsei Bank, Ltd.
Shinsei Trust & Banking Co., Ltd.

Shinsei Trust Loan B

Shinsei Trust & Banking Co., Ltd.

Syndicate Loan B

Prudential LPS Loan
Prudential LPS Loan B

Loan
New Syndicate Loan(A)

Prudential LPS Loan
Prudential LPS Loan B

Subtotal of long-term debt
Prudential Mortgage Asset Holdings I
Japan Investment Limited Partnership
Prudential Mortgage Asset Holdings I
Japan Investment Limited Partnership
Subtotal of long-term debt in trust
Total

Debtor Bank
Sumitomo Mitsui Banking Corporation
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
Shinsei Bank, Limited
Citibank Japan Ltd.
Shinsei Trust & Banking Co., Ltd.(Note 2)
Aozora Bank, Ltd.

Subtotal of long-term debt
Prudential Mortgage Asset Holdings I
Japan Investment Limited Partnership
Prudential Mortgage Asset Holdings I
Japan Investment Limited Partnership
Subtotal of long-term debt in trust
Total

Borrowing
Date

Borrowing Balance(JPY mn)

Sep. 28, 201213,212

Jul. 29, 2011

7,100

Jul. 29, 2011

2,448

Jul. 29, 2011

22, 760
11,000Sep. 28, 2011

9,960

Interest Rate
(Annual)Maturity Date

20,9602.24214%,
Variableinterest rate
8.5%
Fixed interest rate
9.5%
Fixed interest rate
4.98%
2.5%
Fixed interest rate
1.9%
Fixed interest rate
2.21%

43,720

3.66%

Borrowing
Date

Borrowing Balance(JPY mn)

Interest Rate
(Annual)Maturity Date

Dec. 20. 2013

20,350

1.68% (Note 3)

Dec. 20, 2016

20,350

1.68%

Jul. 29, 2011

11,000Sep. 28, 2011

9,960
20, 960

2.5%
Fixed interest rate
1.9%
Fixed interest rate
2.21%

41,310

1.95%

Jul. 31, 2014
Jan. 30, 2015
Jan. 30, 2015

Jan. 25, 2017 –Jan. 25, 2019
Mar. 31, 2018 –Mar. 31, 2020

Averageduration
2.6 years

Jan. 25, 2017 –Jan. 25, 2019
Mar. 31, 2018 –Mar. 31, 2020

Averageduration
3.8 years(Note 1): The Bank of New York Mellon Trust (Japan), Ltd. Is the trustee in the form of a specified money trust, and Platinum CRE Loan
Investment Limited Partnership holds beneficiary interests for such trust.
(Note 2): Shinsei Trust & Banking Co., Ltd. Is the trustee in the form of a specified money trust, and Platinum CRE Loan II Investment Limited
Partnership holds beneficiary interests for such trust.
(Note 3): One-month JPY TIBOR + spread (1.5%). The interest rate calculation for the period from December 20, 2013 to January 30, 2014 using
Two-monthy JPY TIBOR + spread (1.5%).
(Note 4): The borrowing balance is rounded down to the indicated unit.

5

Invincible

Investment
Corporation

Profitability, Dividend Trends, and Roadmap for Growth6

Roadmap for Growth

Invincible

Investment
Corporation

7

Invincible

Investment
Corporation

Operating Results for Period ended December 2013
Financial Highlights: 21st Fiscal Period (2H/2013)
Implementation of Refinancing and Capital Increase via
Third-Party Allotment as of Dec. 20, 2013

Financial•••

A new bank syndicate led by Sumitomo Mitsui Banking Corporation and the Bank of TokyoMitsubishi UFJ, Ltd. provided a long-term loan of JPY 20,350 million at 1.68% interest
Invincible Investment Corporation’s average interest rate declined from 3.66% to 1.95%*
Third-Party Allotment of approximately JPY 3 billion lowered the LTV from 59.0% to 55.6%(Appraisal base)*** The interest rate/average interest rate and procured funds above are the interest rate and amount at the time of the allotment (Dec. 20, 2013).
** Appraisal value‐based LTV = Interest-bearing Debt / Appraisal value as the end of 20th Fiscal Period ended June 30, 2013.

Improvements in Invincible’s profitability and financial
situation significantly enhance its future external growthpotential

Distribution per unit exceeded initial forecasts by JPY 37,
reaching JPY 237

Dividend*•

Forecast for the 2st Fiscal Period (2H/2013) announced in the financial summary dated August 28, 2013

Net income for the 21th Fiscal Period after deducting various one‐off expenses associated with the
Refinancing and Third-Party Allotment outperformed initial forecasts by JPY 82 million (31%),
growing to JPY 352 million, net income per unit (EPS)* after investment unit dilution (16.68%)
increased by JPY 24 (12%), to JPY 224* Net income per unit (EPS) for the 21st Fiscal Period is calculated using the number of investment units at the end of the 21st
Fiscal Period (1,573,179).

•

Total dividends paid increased by JPY 103 million compared to the initial forecast, to JPY 372
million. A portion of the dividend came from the reversal of Surplus (JPY 20 million)
Distribution per unit reached JPY 237, exceeded initial forecasts by JPY 37 (19%)

The effect of lowering the interest burden is expected to raise
dividends to JPY 464* per unit for the 22nd Fiscal Period (1H/2014)* The forward-looking statements above are based on estimates and assumptions based on information available on
February 26, 2014. Estimates and assumptions are affected by a variety of factors and risks that are beyond thecontrol of Invincible. Therefore, no guarantees can be made as to the realization of the future goals or estimates,
and results may be materially different from estimates.

8

Invincible

Portfolio Occupancy

Investment
Corporation

The average portfolio occupancy improved from 95.9% in the 20th Fiscal Period (1H/2013) to96.3% in the 21st Fiscal Period (2H/2013)
The occupancy rate for residential properties remains stable, office and retail occupancy
increased to 96.3% from 94.6% in the previous period

Occupancy rate

17th Fiscal Period(2H/2011)
Total 94.3%
Residential 92.9%
Office/Retail Facilities
93.8%

18th Fiscal Period(1H/2012)
Total 95.2%
Residential 94.2%
Office/Retail Facilities
94.4%

19th Fiscal Period(2H/2012)
Total 96%
Residential 95.2%
Office/Retail Facilities
95.7%

20th Fiscal Period(1H/2013)
Total 95.9%
Residential 95.6%
Office/Retail Facilities
94.6%

21st Fiscal Period(2H/2013)
Total 95.5%
Residential 95.5%
Office/Retail Facilities
96.3%

100%

98%
Monthly occupancy rate

96%

94%

92%
Total
Residential
Office/Retail Facilities

End ofDec. 2013
96.3%
95.4%
96.7%

End ofJan. 2014
96.7%
96.0%
96.6%

90%

88

Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
Period ending
Period ending
Period ending
Period ending
Period ending
Dec. 2012
Jun. 2013
Dec. 2013
Dec. 2011
Jun. 2012
Residential

Office/Retail

Seniors/Parking Lots

Total

(Note) Data for the 17th Fiscal Period (2H/2011) excludes the effect of the sale of the New Edobashi Building which was sold on October 21, 2011.

9Invincible

Investment
Corporation

10

Invincible

Investment
Corporation

Portfolio Characteristics
At the end of the reporting period, the number of properties held by the Investment Corporation totaled 78, including
63 residential properties, 7 retail and office buildings, and 7 senior facilities as well as one parking lot with a totalacquisition value of ¥77,161 million and a total leasable area of 171,283.92 m2.
(Note) The ratios below are indicated are based on the acquisition price and are rounded to one decimal place.

Investment Ratios by Region
Tokyo 23 Wards

17th Fiscal Period(as of the end of December 2011)

Major Regional Cities (Note 2)

Greater Tokyo Area (Note 1)

73.0%

19th Fiscal Period(as of the end of December 2012)
21st Fiscal Period(as of the end of December 2013)

0

20

11.0%

16.0%

64.5%

9.4%

26.1%

64.5%

9.4%

26.1%

60

40

80

100(%)(Note 1) Greater Tokyo Area indicates Tokyo excluding 23 Wards, Kanagawa, Chiba, and Saitama(Note 2) Major Regional Cities indicates “areas surrounding Tokyo” and “major cities including ordinance designated cities andsurrounding areas.

By Property Type
Residential

Seniors/Parking Lots

Offices/Retail Facilities

7.5%

69.8%

17th Fiscal Period(as of the end of December 2011)

22.8%
6.1%

19th Fiscal Period(as of the end of December 2012)

75.3%

21st Fiscal Period(as of the end of December 2013)

75.3%

18.7%
6.1%

0

20

40

18.7%

60

80

100(%)

By Property Age
Less than 5 years

17th Fiscal Period(as of the end of December 2011)

15 to 19 years

10 to 14 years

5 to 9 years

51.2%

19th Fiscal Period(as of the end of December 2012)

2.0%

57.8%

21st Fiscal Period(as of the end of December 2013)

0More than 20 years

5.5%

1.9%

20

46.9%

12.0% 9.6%

40

60

20.5%

20.9%

18.9%

21.3%
31.4%

80

100(%)(Note) Open parking lots are not counted in the property age distribution since they lack building structures.

11

Invincible

Investment
Corporation

Portfolio Overview
用途(as of December 31, 2013)

Property Number

RentableUnits

1,771.13

98

2,681.94

60

1,051.50

48

1,367.96

66

2,152.31

96

1,748.24

65

Suncrest Shakujii-Koen

Nerima Ward, Tokyo

3,029.16

29

Growth Maison ShinYokohama
Belle Face UenoOkachimachi

Yokohama City, Kanagawa 1,858.44
Prefecture
1,351.11
Taito Ward, Tokyo

68

A35

Grand Rire Kameido

Koto Ward, Tokyo

1,562.26

72

A36

Growth Maison Ikebukuro

Toshima Ward, Tokyo

952.8942

1,015.34

39

1,368.57

24

1,167.50

25

1,235.93

19

1,210.74

57

1,126.65

26

1,047.75

62

Residential

Leasable Area
(m2)

A26
A27

Name of Property

Location

Nisshin Palacestage
Suginami Ward, Tokyo
Daitabashi
Nisshin Palacestage HigashiToshima Ward, Tokyo
Nagasaki

A28

Growth Maison Gotanda

Shinagawa Ward, Tokyo

A29

Growth Maison Kameido

Koto Ward, Tokyo

A30

Emerald House

Itabashi Ward, Tokyo

A31

Harmonie Ochanomizu

Bunkyo Ward, Tokyo

A32
A33
A34

A37

Growth Maison Yoga

Setagaya Ward, Tokyo

A38

Route Tachikawa

Tachikawa City, Tokyo

A39

Shibuya-Honmachi Mansion Shibuya Ward, Tokyo

A40

City Heights Kinuta

A41

Acseeds Tower Kawaguchi- Kawaguchi City, Saitama
NamikiPrefecture

A42

Setagaya Ward, Tokyo

Capital Heights Kagurazaka Shinjuku Ward, Tokyo

A43

College Square Machida

Machida City, Tokyo

A44

Belair Meguro

Meguro Ward, Tokyo

A45

Wacore Tsunashima I

A46

Foros Nakamurabashi

A47

Growth Maison Kaijin

557.0525

Yokohama City, Kanagawa 907.46
Prefecture815.77
Nerima Ward, Tokyo

50

Funabashi City, Chiba
Prefecture

2,040.27

34

871.3543

3,364.00

86

4,032.70

118

4,310.77

69

1,987.88

88

1,197.19

17

1,627.13

58

1,220.24

70

1,969.45

29

3,426.36

154

1,929.59

51

1,528.58

39

705.758

1,430.64

43

784.7433

4,460.56

120

7,794.91

109

3,574.70

52

2,773.71

81

2,310.49

82

A48

College Square Machiya

A51

City House Tokyo Shinbashi Minato Ward, Tokyo

A52
A53
A54

Winbell Kagurazaka
Nishiwaseda Cresent
MansionLexington Square
Akebonobashi

Arakawa Ward, Tokyo

Shinjuku Ward, Tokyo
Shinjuku Ward, Tokyo
Shinjuku Ward, Tokyo

A56

Casa Eremitaggio

A59

Towa City Coop Shinotsuka
Toshima Ward, Tokyo
II

Meguro Ward, Tokyo

A61

Bichsel Musashiseki

Nerima Ward, Tokyo

A62

Lexel Mansion Ueno
Matsugaya

Taito Ward, Tokyo

A63
A64
A65
A66

Yokohama City, Kanagawa
Towa City Coop Sengencho
Prefecture
Sendai City, Miyagi
Royal Park Omachi
Prefecture
Lexington Square
Sendai City, Miyagi
Haginomachi
Prefecture
Nagoya City, Aichi
Visconti Kakuozan
Prefecture

A71

Lexington Square Daitabashi Suginami Ward, Tokyo

A72

Lexington Square Honjo
Azumabashi

Sumida Ward, TokyoA73

AMS TOWER Minami 6-Jo Sapporo City, Hokkaido

A75

Spacia Ebisu

Shibuya Ward, TokyoA76

Neo Prominence

A77

Invoice Shin-Kobe Residence Kobe City, Hyogo Prefecture

A78
A79

64

Kita Ward, Tokyo

Cosmo Court Motomachi

Kobe City, Hyogo Prefecture

Revest Honjin

Nagoya City, Aichi
Prefecture

1,933.80

3780

Acquisition Appraisal
Price
Value
(JPY mn) (JPY mn)
1,130
1,251
1,229
888
1,070
1,505
1,428
1,088
1,059
1,023
906
825
795
676
651
646
620
604
589
589
572
566
557
510
2,520
3,260
1,880
1,450
1,070
866
577
970
1,110
415
330
255
977
511
120
1,180
7,010
1,660
1,260
674

1,240
922
1,040
1,180
1,230
998
1,060
928
909
827
674
591
588
454
676
534
525
545
496
532
455
494
2,650
3,420
2,140
1,570
980
930
631
1,050
1,230
484
405
232
1,020
536
1,080
6,860
1,710
1,300
1,020
705

Book Value(JPY mn)

Investment Occupancy
Ratio
Rate

1,145

1.6

1,123

1.6

851

1.2

1,018

1.4

1,427

2.0

1,385

1.9

1,045

1.4

1,000

1.4

988

1.3

860

1.2

782

1.1

768

1.0

657

0.9

656

0.8

647

0.8

576

0.8

618

0.8

573

0.8

574

0.8

550

0.7

534

0.7

525

0.7

481

0.7

2,418

3.3

3,141

4.2

1,849

2.4

1,385

1.9

1,005

1.4

835

1.1

561

0.7

907

1.3

1,052

1.4

395

0.5

310

0.4

241

0.3

914

1.3

473

0.7

1,18-

1,080

1,071

1.5

6,729

9.1

1,665

2.2

1,262

1.6

676

0.9

95.0
97.4
100.0
89.3
98.9
97.5
95.3
94.1
100.0
100.0
97.6
100.0
83.5
96.4
94.6
96.5
91.0
100.0
92.1
82.1
94.5
100.0
100.0
100.0
96.5
94.8
89.7
90.0
89.9
92.9
100.0
90.5
95.0
97.4
100.0
93.7
100.0
97.1
89.2
96.6
95.4
98.7
93.7

12

Invincible

Investment
Corporation用途(as of December 31, 2013)

Property Number Name of Property

Residential

Location

Leasable Area(m2)

RentableUnits1,955.40

70

A80

Revest Matsubara

Nagoya City, Aichi
Prefecture

A81

Sun Terrace Minami Ikebukuro

Toshima Ward, Tokyo

A82

Alba Noritake Shinmachi

A83

Revest Meieki Minami

Nagoya City, Aichi
Prefecture
Nagoya City, Aichi
Prefecture
Nagoya City, Aichi
Prefecture

A84

Revest Heian

A85

Vendir Hamaotsu Ekimae

Otsu City, Shiga Prefecture

A86

Salvo Sala

Osaka City, Osaka
Prefecutre

A87

Excellente Kagurazaka

A88

Luna Court Edobori

637

611

0.8

597

626

600

0.8

595

610

598

0.8

581

650

583

0.8

544

567

548

0.7

543

558

546

0.7

525

547

527

0.7

512

545

514

0.7

456

477

457

0.6

446

468

448

0.6

412

428

414

0.5

374

394

376

0.5

373

383

374

0.5

355

382

358

0.5

335

349

336

0.4

331

334

330

0.4

310

329

313

0.4

297

307

298

0.4

96.5
98.5
98.4
100.0

25
42

530.6026

1,020.86

40

789.12

32

992.7621

1,477.62

44794.8040

Okasa City, Osaka
Prefecture
Kobe City, Hyogo
Prefecture

974.81

31

761.1828

109,584.45

3,413

58,08357,921

56,192

75.3

95.4

Shinagawa Ward, Tokyo

Amagasaki City, Hyogo
Siete Minami-Tsukaguchi
Prefecture
Kobe City, Hyogo
Prime Life Sannomiya Isogami Koen
Prefecture
Osaka City, Osaka
HERMITAGE NANBA WEST
Prefecture
Nagoya City, Aichi
Century Park Shinkawa 1-bankan
Prefecture
Kunitachi City, Tokyo

Subtotal

608

97.4

1,029.05

Belair Oimachi

Prime Life Mikage

0.8

765.18

A92

A99

625

57

Corp Higashinotoin

Little River Honmachibashi

81

644

50

A91

A98

2,670.66

625

98.8

1,433.35

Osaka City, Osaka
Prefecture
Kobe City, Hyogo
Prefecture
Kyoto City, Kyoto
PrefectureWest Avenue

40

0.9

1,185.50

Shinjuku Ward,Tokyo

Koto Ward, Tokyo

A97

61

1,554.03

659

33

Queen's Court Fukuzumi

A96

1,634.60

705

54

A90

A95

64

657

1,428.12

Winntage Kobe Motomachi

A94

38

Book Value Investment Occupancy
Ratio
Rate
(JPY mn)

701.92A89

A93

898.701,731.68

Acquisition Appraisal
Value
Price
(JPY mn) (JPY mn)

96.7
91.2
98.0
86.0
100.0
95.1
96.4
97.5
93.8
96.0
97.7
90.0
96.9
96.6

Kindai Kagakusha Building

Shinjuku Ward, Tokyo

1,451.54

13

1,301

1,020

1,226

1.7

100.0

B9

Shinjuku Island

Shinjuku Ward, Tokyo

526.43

1

715

542

714

0.9

100.0

B14

Lexington Plaza Nishigotanda

Shinagawa Ward, Tokyo

6,033.58

11

4,880

4,050

4,811

6.3

90.1

B15

Cross Square NAKANO

Nakano Ward, Tokyo

2,145.00

45

1,060

930

1,073

1.4

67.6

B16

Ohki Aoba Building

8167

633

759

1.1

100.0

Lexington Plaza Hachiman

18

3,280

3,270

3,198

4.3

100.0

B18

AEON TOWN Sukagawa

Sendai City, Miyagi
2,178.41
Prefecture
Sendai City, Miyagi
8,419.15
Prefecture
Sukagawa City, Fukushima 18,440.58
Prefecture
39,194.69

13

B17

1

2,320

2,150

2,120

3.0

100.0

1021

14,372

12,595

13,904

18.6

96.7

Office Buildings/Retail Facilities

B8

Subtotal
Stop Parking Kanda-Sudacho

1

97

92

100

0.1

100.0

Bon Sejour Chitose Funabashi

Kanda sudacho, Chiyodaku, Tokyo
Setagaya Ward, Tokyo

81.04

C21

2,342.17

42

685

762

659

0.9

100.0

C22

Bon Sejour Yotsugi

Katsushika Ward, Tokyo

1,962.87

62

652

703

624

0.8

100.0

C23

Bon Sejour Hino

Hino City, Tokyo

1,984.17

56

574

662

553

0.7

100.0

C24

Bon Sejour Musashi Shinjo

1,710.43

46

486

561

469

0.6

100.0

C25

Bon Sejour Komaki

8,858.49

123

1,050

1,060

989

1.4

100.0

C26

Bon Sejour Hadano Shibusawa

3,435.79

100

681

634

636

0.9

100.0

C27

Bon Sejour Itami

Kawasaki City, Kanagawa
Prefecture
Komaki City, Aichi
Prefecture
Hadano City, Kanagawa
Prefecture
Itami City, Hyogo
Prefecture

2,129.87

62

480

439

452

0.6

100.0

22,504.83

492

492

4,913

4,486

6.1

100.0

171.293.97

4,007

77,16175,42974,5831000.6.0

96.3

Parking Lots/Seniors

C1

Subtotal
Total(Note): Figures are rounded down to the indicated unit and percentages are rounded to one decimal place.

13

Invincible

Investment
Corporation

Overview of Unitholders/Investment Units
Overview of Unitholders■ Number of Unitholders■ Individuals/Other■ Financial institutions(includes brokerages)

by Owner■ Other domestic
institutions■ Foreign investors

109 Unitholders (1.1%)

66 Unitholders (0.7%)

26 Unitholders (0.3%)

20 th Fiscal Period(at end of June 2013)

9,892 Unitholders (98.0%)(Total Unitholders 10,093)

105 Unitholders (1.2%)

21 st Fiscal Period

54 Unitholders (0.6%)(at end of December 2013)

8,597 Unitholders (97.9%)(Total Unitholders 8,783)

0■Number of

20

60

40

80

100(%)

27 Unitholders (0.3%)

Investment Units by
Owner

20 th Fiscal Period

750,456 Units (55.7%)

235,938 Units(17.5%)

177,102Units
Units(10.8%)(11.3%)

975,784Units (62.0%)

249,944 Units(15.9%)

040

201,677 Units 160,221 Units(11.9%)(at end of June 2013) (15.0%)(Total Units 1,348,292)

21 st Fiscal Period 170,349(at end of December 2013)(Total Units 1,573,179)20

80100(%)

20th Fiscal Period

21st Fiscal Period

60

Investment Unit Price Trends
17th Fiscal Period(円)

25,00018th Fiscal Period

19th Fiscal Period

Unit Price
Trading(Units)35,00028,00020,00021,00015,00014,00010,000

7,000

5,000

0

0
End ofDecember
2011

End of June 2012

End ofDecember
2012

End of

End ofJune 2013

December
2013(Note) The investment unit price indicated is the Tokyo Stock Exchange closing price.

14

Invincible

Investment
Corporation

Information for Unitholders
Notification Process for Address Changes
Please notify your brokerage (financial instruments business operator) regarding changes to addresses, names, registered seals, and the like.
Unitholders who have special accounts instead of brokerage accounts should contact the transfer account management institution (financial
instruments business operator) below.
Unitholders of the pre-merger Investment Corporation (former Tokyo Growth REIT Fund)
Mitsubishi UFJ Trust and Banking Corporation Limited
Toll-free Number:

0120-255-100

Unitholders of the former LCP Investment Corporation
Sumitomo Mitsui Trust Bank, Limited

0120-782-031

Toll-free Number:

Dividends
Unitholders may collect “dividends” by submitting the “Dividends Receipt” at your local Japan Post Bank or at the deposit teller of a post
office. In the case that the collection period is past, please specify the collection method on the back of the “Dividends Receipt,” and either mail thereceipt to the Transfer Agent Department of the Sumitomo Mitsui Trust Bank, Limited or collect from a branch teller.

(Bank Transfers)
Should you desire to specify bank transfers for future dividends, please notify your brokerage (financial instruments
business operator).
(Note)
Please collect dividends within 3 years of distribution. Please note that payments cannot be made after 3 years due to the rules andregulations of the Articles of Incorporation of the Investment Corporation.

Notification(Advice of Payment)

The 2008 amendment of the Special Taxation Measures Law (Act No. 23 of April 30, 2008) mandated the sending to unitholders a “Notice ofDividend Payment” that stated the dividend amount, amount of taxes withheld, and the like. If you collect dividends via a “Dividends Receipt,”
please view the “Notice of Dividend Payment” sent alongside it. If you have specified a wire transfer, the “Dividend Statement” delivered with thedividend payment is the “Notice of Dividend Payment.” Both documents may be used as supporting documents when filing income tax returns.

(Characters for Addresses and Names of Unitholders)With the digitization of investment securities, if there are Chinese characters in your address or names that the Japan Securities Depository Center(JASDEC) has not included in the transfer system, please list in the Investors’ Registry by converting part or all of the characters to those that
JASDEC has included in the transfer system or to katakana. Please be aware that correspondence may be addressed using characters that JASDEC
has included in the transfer system. Please inquire with your brokerage regarding characters registered for your address and name.

Annual Schedule
Jan

Feb

Mar

Apr

Dividend Payout
Start Date
Asset Management
Earnings Report Mailing

May

June
ReportingMonthRelease

July

Aug

Sept

Oct

Dividend Payout
Start Date
Asset Management
Earnings
Report Mailing
ReleaseNov

Dec
ReportingMonthInquiries
For inquiries regarding Invincible Investment
Corporation: Consonant Investment Management Co., Ltd.
TEL: 03-5411-2731 (Main)
Weekdays 9:30-17:30

15

Invincible

Investment
Corporation

Ⅰ. Asset Management Report
Overview of Asset Management
1 Trends in Investment Corporation’s Operating Results
By Period

Operating revenues

Note 1 (Thousands of yen)

17th
Fiscal Period
Jul. 1, 2011 to
Dec. 31, 2011
2,202,448(Rental revenues)(Thousands of yen)

2,202,448

2,176,839

2,476,430

2,760,177

2,740,449

Operating expenses(Thousands of yen)

2,612,417

1,282,766

1,392,258

1,528,940

1,474,679(Thousands of yen)

1,137,994

1,024,277

1,156,672

1,295,403

1,261,221

Operating income(Thousands of yen)

1,084,171

1,231,237

1,265,770

Ordinary income(409,968)

894,072(Thousands of yen)

114,784

335,683

353,360(Thousands of yen)

(3,466,417)

125,981Net income(2,476,155)

128,175

114,179

335,078

352,755

68,083,586(6.9)
31,734,500

67,698,887(0.6)
31,603,500

80,200,022
18.5
43,982,500

80,249,063
0.1
43,851,500

79,176,632(1.3)
41,310,000

Calculated period

Operating Results(Property-related expenses)

18th
Fiscal Period
Jan. 1, 2012 toJun. 30, 2012
2,176,839

19th
Fiscal Period
Jul. 1, 2012 toDec. 31, 2012
2,476,430

20thFiscal Period
Jan. 1, 2013 toJun. 30, 2013
2,760,177

21stFiscal Period
Jul. 1, 2013 toDec. 31, 2013
2,740,449

Asset Condition
DivideInformation per

Financial

Total assets(change from last period)
Interest-bearing debt(a) (Thousands of yen)(%)

Net assets(change from last period)
Total contribution(b) (Thousands of yen)(%)(Thousands of yen)

32,967,658
15.4
26,134,396

32,826,175(0.4)
26,134,396

32,670,697(0.5)
26,134,396

32,848,025
0.5
26,134,396

35,844,824
9.1
29,134,389

Total distribution(c) (Thousands of yen)

269,658

269,658

157,750

355,949

372,843(Note 2) (Thousands of yen)

—

210.5

137.6

106.0

105.7

(d) (Units)

1,348,292

1,348,292

1,348,292

1,348,292(b) / (d) (yen)(Note 3)24,451

24,34624,231

24,36322,785Distribution per unit
(Profit distribution per unit)(Excess profit distribution per unit)(c) / (d) (yen)
(yen)
(yen)

200
200
—

200
200
—

117
117
—

264
264
—

237
237
—

Return on assets(change over year)
Return on equity(change over year)
Capital ratio(change from last period)
NOI(Net Operating Income)(Note 4) (%)

(4.9)
(9.7)
(8.0)
(16.0)
48.4
9.4
1,486,538

0.2
0.4
0.4
0.8
48.5
0.1
1,564,247

0.2
0.3
0.3
0.7
40.7
(7.8)
1,800,380

0.4
0.8
1.0
2.1
40.9
0.2
2,008,413

0.4
0.9
1.0
2.0
45.3
4.3
2,006,648

Dividend payout ratio
Number of investment units
Issued and outstanding
Net assets per unit

(Note1)(Note 2)
(Note 3)(Note 4)

(Thousands of yen)

(Note 4) (%)(b) / (a) (%)(Note 4) (%)(Note 4) (Thousands of yen)

1,573,179

Consumption taxes etc. are not included in operating income.
Dividend payout ratio is calculated by dividing profit distribution by unit by net income that period. However, for the 21st Fiscal Period, it is calculatedby dividing the total profit distribution amount by net income. Dividend payout ratio for the 17th Fiscal Period is not indicated because distribution byunit that period was a negative figure.
Distribution by unit is rounded to the nearest unit.
Published benchmarks are calculated as below, and ratios are rounded to one decimal place.
Return on Assets = Ordinary Income / (Total Assets at Start of Reporting Period + Total Assets at End of Reporting Period) / 2 x 100
Return on Equity = Net Income this period / (Net Assets at Start of Reporting Period + Net Assets at End of Reporting Period) / 2 x 100
Capital Ratio = Net Assets at End of Reporting Period /Total Assets at End of Reporting Period x 100
Rental NOI = Rental Revenues – Leasing Costs + Fiscal Period Depreciation Expenses

16

Invincible
2

Operating Conditionsa.

Main trends in the Investment Corporation

Investment
Corporation

The investment corporation (the “Investment Corporation” or "INV") was established in January 2002 basedon the Investment Trust and Investment Corporation Act (Law No. 198 of 1951, as amended; hereinafter referred to as
the “Investment Trust Act”). In May 2004, the Investment Corporation was listed on the Osaka Securities Exchange(application for delisting was made in August 2007), and in August 2006 it was listed on the Real Estate Investment
and Trust Securities Section of the Tokyo Securities Exchange (Ticker Code: 8963).
Following the realization of a merger (“the Merger”) with LCP Investment Corporation (“LCP” ) on February
1, 2010 , the Investment Corporation issued new investment units through third-party allotment to Calliope Godo
Kaisha (“Calliope” ), an affiliate of Fortress Investment Group LLC (“FIG” and together with Calliope and its otheraffiliates, the “Fortress Group”), acting as the principal investor, and conducted a refinancing.
Ever since the sponsorship from Fortress Group, the Investment Corporation has been dedicating itself to theimprovement of occupancy rates and the reduction of its and its properties’ expenditures by strengthening its asset
management capabilities. Furthermore, in September 2012, it newly acquired 24 properties (residences) without issuing
any equity, thus improving portfolio earning potential and establishing an earnings base for stable distributions
comparable to earlier performance (approximately JPY 200 per unit).
As the next step , during the fiscal period ended December 31, 2013 (the “reporting period”), the Investment
Corporation implemented, effective December 20, 2013, the refinancing of existing borrowings (“the Refinancing” )with new borrowings secured by a syndicated loan arranged by Sumitomo Mitsui Banking Corporation (SMBC) and
The Bank of Tokyo-Mitsubishi UFJ, Ltd. (BTMU) and with funds raised via third-party allotment. The Investment
Corporation believes that the Refinancing enabled, among other things, the reduction of the Investment Corporation’s
interest-bearing debt ratio, the improvement of its earnings-generating power as a result of the significant reduction ofinterest expenses, and the strengthening of its lender formation, and that the financial stability of the Investment
Corporation has been improved along with a substantial improvement in future external growth potential.
b.

Operational Environment and Performance

In the reporting period, this country’s economy underwent a strengthening recovery trend in corporate
performance centered on a weakening yen due to large-scale monetary easing and increasing public spending, thecontinued trend towards a higher-priced stock market , and the improvement of consumer spending due to the wealtheffect of effective asset utilization and improvement of the export industry. Against this trend of general economic
recovery, among businesses and financial institutions there was an increase in the number of those expecting an
upward revision of standard wage increases in the next fiscal year, and there continued to be signs towards
improvement in the consumption environment necessary for overcoming deflation and achieving a full-scaleeconomic recovery.
Regarding the real estate investment market, asset acquisitions accompanying public offerings and the newlistings of J-REITs in 2013 increased to over JPY 2.2 trillion, achieving record highs for the first time in seven years. In
addition, against the backdrop of Japan’s economic recovery, the weaker yen and the decision to hold the 2020 Summer
Olympics in Tokyo, real estate transactions by foreign companies are increasing as enhanced market activity and alowering of yields on trading are becoming more clearly apparent.
Regarding the property rental market, in the Tokyo area and parts of other major cities, the office vacancy rate
has bottomed, and in central Tokyo, rents are turning around with the appearance of new construction projects,
premium properties, etc. In regional areas as well, there is increasing evidence of a decrease in the rate of rent decline.
In addition, although stable compared with the office and other sectors, the residential sector, which had seen acontinuous trend in declining rent revenue after the Lehman shock, saw signs of recovery in the rent market. For
example, in Tokyo the year-on-year rate rent decline was nearly flat at -0.1% (year-on-year rate of decline for
September 2013 according to the research division of the Japan Real Estate Institute, which publishes Nationwide Rent
Statistics; in September 2009; the year-on-year rate of decline was - 3.9% ).
In such an environment, in the reporting period the Investment Corporation did not engage in any acquisitions
or sales of properties, focusing attention instead on improved profitability through internal growth. The Investment
Corporation’s entire portfolio in the reporting period saw its average occupancy rate rise to 96.3%, up 0.4% from theprevious period, attaining the highest post-Merger level. The improvement of the occupancy rate was achieved by,among other things, the following measures: with respect to certain of the office buildings, the outsourcing of leasing
management for functional enhancement and strategic renovations, etc.; and with respect to residential properties, thecontinued strengthening of the property management companies (“PM companies” ) and direct sales to brokers, an
17Invincible

Investment
Corporation

overhaul of the handling of original state restoration periods, the shortening of construction periods, and a change
in PM companies (for 13 residential units in November 2013).
At the end of the reporting period, the number of properties held by the Investment Corporation totaled 78,
including 63 residential properties, 7 retail and office buildings, and 7 senior facilities as well as one parking lot with a
total acquisition value of ¥77,161 million and a total leasable area of 171,283.92 m2.
As a result of the above trends in real estate investments and the rental market, as well as the above implementation ofinternal growth strategies, etc., at the end of the reporting period the appraised value of the properties in the portfolio
increased by JPY 1,083 million (or 1.5%) over the preceding period, from JPY 74,347 million to JPY 75,429 million,
representing the fourth consecutive fiscal period for which there was an increase.
c.

Overview of Fund Raising

On December 20, 2013, the Investment Corporation implemented a refinancing of a portion of existing
borrowings (total balance of borrowings: JPY 22,760 million; average interest rate at time of repayment: 4.98%) withfunds raised from a syndicated loan arranged by Sumitomo Mitsui Banking Corporation and The Bank of TokyoMitsubishi UFJ, Ltd. (amount borrowed: JPY 20,350 million; interest on borrowings upon the execution of the
Refinancing: 1.68%) and from a capital increase through third party allotment with Rayo Godo Kaisha, which belongs
to the Fortress Group, acting as the principal investor (number of new investment units issued: 224,887; sum total ofamounts issued: JPY 2,999 million). The Refinancing has enabled the Investment Corporation to reduce its interestbearing debt ratio and substantially decrease interest expenses, thus significantly improving earnings capabilities.
Moreover, the Investment Corporation believes that the implementation of the Refinancing involving two
megabanks provides evidence of the enhancement of the credit standing of the Investment Corporation, and that thestrengthening of its lender formation has substantially improved its fund raising capacity.
As a result of implementing the above, as of the end of the reporting period, the outstanding balance of theinterest-bearing debt of the Investment Corporation was JPY 41,310 million, with the interest-bearing debt ratio at
52.2% (Note).

(Note) The calculation for the interest-bearing debt ratio uses the calculation formula below:
Interest-bearing debt ratio = amount of interest-bearing debt ÷ total amount of assets at end of period x 100

3

Changes in Number of Investment Units Issued and Outstanding

Changes in the number of investment units issued and outstanding and unitholders’ equity from the date ofestablishment to the end of the reported fiscal period are as follow.
Number of investment units issued
and outstanding (units)

Unitholders’ equity (yen)Increase

Total

Increase

Total

Private placement for400
incorporation

400

200,000,000

200,000,000(Note 1)

December 26, 2003

Private placement

2,700

3,100

1,012,500,000

1,212,500,000(Note 2)January 9, 2004

Private Placement

1,350

4,450

506,250,000

1,718,750,000(Note 2)January 21, 2004

Private placement

1,333

5,783

499,875,000

2,218,625,000(Note 2)January 27, 2004

Private placement

267

6,050

100,125,000

2,318,750,000(Note 2)January 28, 2004

Private placement

800

6,850

300,000,000

2,618,750,000(Note 2)January 31, 2004

Private placement

266

7,116

99,750,000

2,718,500,000(Note 2)February 5, 2004

Private placement

800

7,916

300,000,000

3,018,500,000(Note 2)February 7, 2004

Private placement

1,333

9,249

499,875,000

3,518,375,000(Note 2)

May 17, 2004

Public offering

9,000

18,2493,377,250,000

6,895,625,000(Note 3)February 7, 2005

Public offering

10,65028,8993,937,667,100

10,833,292,100(Note 4)

July 31, 2006

Public offering

25,00053,8998,301,125,000

19,134,417,100(Note 5)February 1, 2010

Unit split

215,596

269,495―

19,134,417,100(Note 6)

February 1, 2010

Merger367,200

636,695―

19,134,417,100(Note 7)

July 29, 2011

Third-party allotment 711,597

1,348,292

6,999,979,689

26,134,396,789(Note 8)December 20, 2013

Third-party allotment 224,887

1,573,179

2,999,992,580

29,134,389,369(Note 9)Date

Type of issue

January 18, 2002

Reference

18

Invincible(Note 1)
(Note 2)
(Note 3)(Note 4)(Note 5)(Note 6)(Note 7)(Note 8)(Note 9)Investment
Corporation

The Investment Corporation was incorporated through a private placement at a price of 500,000 yen per unit.
New investment units were issued in a private placement at a price of 375,000 yen per unit to raise funds for the acquisition of new
properties.
New investment units were issued in a public offering at a price of 395,000 per unit (375,250) yen after deducting the underwriters’
discount) to raise funds for the acquisition of new properties.
New investment units were issued in a public offering at a price of 385,140 yen per unit (369,734 yen after deducting theunderwriters’ discount) to raise funds for the acquisition of new properties.
New investment units were issued in a public offering at a price of 348,740 yen per unit (332,045 yen after deducting theunderwriters’ discount) to raise funds for the acquisition of new properties.
An investment unit slit of 5 units per 1 unit was conducted.
A merger by absorption pursuant to Article 147 of the Act on Investment Trusts and Investment Corporations was conducted with
LCP, with the Investment Corporation as the surviving entity. As a result of the merger by absorption, 4 investment units of theInvestment Corporation (after the investment unit split) were allotted for each LCP investment unit. The number of LCP investment
units issued as of the time of the merger by absorption was 91,800 units.
New investment units were issued in a third party allotment at a price of 9,387 yen per unit to make repayment of existing debt, etc.
New investment units were issued in a third party allotment at a price of 13,340 yen per unit to make repayment of existing debt, etc.

Trends in Trading Prices of Investment Securities
The highest and lowest prices (trading prices) in the Real Estate Investment and Trust Securities Section of the Tokyo
Securities Exchange on which the investment securities of the Investment Corporation are listed are as follow.
Real Estate Investment and Trust Securities Section, Tokyo Securities Exchange(Unit: yen)

Period17th Fiscal Period

18th Fiscal Period

19th Fiscal Period

20th Fiscal Period

21st Fiscal Period

Closing Month

December 2011

June 2012

December 2012

June 2013

December 2013

Highest12,830

7,160

6,540

14,48020,000

Lowest

6,200

6,060

6,080

6,230

12,6104Distribution PerformanceWith respect to distributions, it was determined to distribute a total of JPY 372 million based on the following: a distribution of net incomeof JPY 352 million to meet the required level to satisfy distribution requirements (note 2); and a reversal of a portion of the surplus (JPY 20 million)
resulting from the negative goodwill (the “Surplus”) from the Merger.
One of the conduit requirements is distribution of 90% or more of distributable profit (Note 2).
The amount of distributable profit (JPY 412 million (*)) x 90% = JPY 371 million
The total amount of distributions for the period ended December 2013 was JPY 372 million, which exceeded the above calculation of JPY
371 million .
(*) The amount of distributable profit (JPY 412 million) = fiscal period net profit before taxes (JPY 353 million) + the sum of negative goodwill
amortization (JPY 59 million) ** for each period.
(**) The negative goodwill amortization for each period (JPY 59 million) = extraordinary gain resulting from negative goodwill from the Merger(JPY 11,843) x (net number of months divided by 1200 months (***)).
(***) 1,200 months = a period of 100 years x 12 months (a one-year period)
Note 1:
Note 2:

PeriodCalculated Period
Total unappropriated retained earnings
for period (thousands of yen)
Reserved profit (thousands of yen)
Cash distribution (thousands of yen)(Distribution per unit) (yen)Distribution amount (thousands of yen)(Distribution per unit) (yen)Contribution return (thousands of yen)(Contribution return per unit ) (yen)17th Fiscal
PeriodJuly 1, 2011 to
Dec. 31, 2011
568,830

18th Fiscal
PeriodJan. 1, 2012 toJune 30, 2012
427,346

19th Fiscal
PeriodJuly 1, 2012 toDec. 31, 2012
271,868

20th Fiscal
PeriodJan. 1, 2013 toJune 30, 2013
449,196

21st Fiscal
PeriodJuly 1, 2013 toDec. 31, 2013
446,003299,171
269,658(200)
269,658
(200)
−
(−)

157,688269,658(200)
269,658
(200)
−
(−)

114,118
157,750(117)
157,750
(117)
−
(−)

93,247355,949(264)
355,949
(264)
−
(−)

73,159372,843(237)
372,843
(237)
−
(−)

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Future Operational Policy and Issues to be Addressed

Forecast for Next Period and Issues to be Addressed(i) External growth strategy
New Property Acquisitions
The Investment Corporation believes that with, among other things, the reduction of its interest-bearing debt
ratio through implementation of the Refinancing, its significant improvement in earnings-generating ability and its
strengthened lender formation, both debt and equity fund raising capacity has been enhanced, thus greatly improving theexternal growth potential of this Corporation.
The Fortress Group is an investment manager committed to long-term, large-scale real estate investments in theJapanese real estate market, and holds excellent pipeline assets that are well balanced in terms of sectors. By utilizing
the Fortress Group’s pipeline support, along with the property sale information resulting from the independent networkof the asset management company, Consonant Investment Management Co., Ltd (the “Asset Manager”), to whom the
Fortress Group and the Investment Corporation entrust the managing of assets, the Investment Corporation will consider
and execute property acquisitions that contribute to stable growth in profits and cash flow and increase per unit
distributions.
Property Sales
While the Investment Corporation places priority on increasing unitholders’ value through external growth,
taking into account the ongoing high level of activity in the real estate trading market, it also plans to review as
appropriate points such as its portfolio composition and geographic distribution in considering property sales andreplacements.
(ii) Strategy for internal growth
The Investment Corporation will continue in the fiscal period ending June 30, 2014 to strengthen its
collaborative ties with PM companies and brokers to further boost occupancy rates and earning capabilities of its
properties. Furthermore, in consideration of the large-scale monetary easing and improving business activity andpersonal income environment attributed to the Bank of Japan’s inflation target policy and other measures, it will look to
implement a proactive and flexible asset management with, in the residential sector, a focus on lease renewals andincreasing rent. At the same time, while taking into account any changes in the status of competing properties in themarket area, the Investment Corporation intends to closely monitor the management of free rent, advertising-related
expenses and other leasing-related costs so as maximize the actual rent.
Furthermore, because the implementation of appropriate maintenance and repair plans is of the utmost
importance in maintaining and enhancing the competitiveness and market value of properties as well as improving
tenant satisfaction, thorough attention will be placed on the drafting of strategic plans and on their flexible
implementation.
(iii) Financial strategy
In addition to the substantial interest cost reduction made possible by the Refinancing implemented in thereporting period, the Investment Corporation will continue to consider and implement measures for improving property
earnings, as described above, as well as measures for further lowering the overall fund-raising costs for the Investment
Corporation.
In connection with the above, the Investment Corporation will aim to execute equity finance that will result in
improved distributions per unit and to maximize unitholders’ value from a financial perspective.
(iv) Compliance risk management
While the executive officer of the Investment Corporation concurrently serves as the representative director at
the Asset Manager, two supervisory directors (an attorney and a certified public account) oversee the execution of theexecutive officer’s duties via the Board of Directors of the Investment Corporation. In addition, the compliance officerof the Asset Manager attends each meeting of the Board of Directors in the capacity of an observer.
The Asset Manager has a compliance officer who is responsible for compliance with laws, regulations andother relevant matters as well as overall management of transactions with sponsor related parties. Moreover, it has in20

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place a compliance committee which, chaired by such compliance officer, is in charge of deliberating on compliancewith laws, regulations and other relevant matters as well as transactions with sponsor related parties. Compliancecommittee meetings are attended by an outside expert (an attorney) who, sitting in as a compliance committee
member, conducts rigorous deliberations on the existence of conflicts of interest in transactions with sponsor relatedparties as well as strict examinations with respect to the Investment Corporation’s compliance with laws andregulations.
The Investment Corporation intends to continually take steps to strengthen its compliance structure.
6

Significant subsequent events
Nothing applicable.

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Overview of the Investment Corporation
1

Overview of Investment

By Period

17th Fiscal Period 18th Fiscal Period 19th Fiscal Period 20th Fiscal Period 21st Fiscal Period

Results Dates

July 1, 2011 to
Dec. 31, 2011

Jan. 1, 2012 toJune 30, 2012

July 1, 2012 toDec. 31, 2012

Jan. 1, 2013 toJune 30, 2013

July 1, 2013 toDec. 31, 2013

Number of investment units authorized
Number of investment units issued andUnitholders’ capital
Number of total unitholders

10,000,000
1,348,292
26,134
10,793

10,000,000
1,348,292
26,134
10,703

10,000,000
1,348,292
26,134
10,325

10,000,000
1,348,292
26,134
10,093

10,000,000
1,573,179
29,134
8,783

2

Notes regarding Unitholders

Major unitholders at the end of the reporting period are as below.
Name

Number of units held

Calliope Godo Kaisha
Rayo Godo Kaisha
New Mission Funding Co., Ltd.
SCG16 Godo Kaisha (Note 1)
JP MORGAN CHASE BANK 380180
GOLDMAN SACHS INTERNTATIONAL
Japan Trustee Services Bank, Ltd. (trust account)
INFINITE VALUE INVESTMENT LTD. (Note 1)
The Nomura Trust and Banking Co., Ltd. (investment trust account)
CHASE MANHATTAN BANK GTS CLIENTS ACCOUNT ESCROW
Total

609,942
149,925
129,400
74,962
67,28365,70158,79957,75740,36934,445
1,288,583% of total number ofinvestment units issued
and outstanding
38.77
9.53
8.22
4.76
4.27
4.17
3.73
3.67
2.56
2.18
81.90

(Note 1):INFINITE VALUE INVESTMENT LTD and SCG16 are both managed under the same umbrella fund by the Secured
Capital- related company SC Investment Advisors Pte. Ltd. (SCIA).
(Note 2): Percentages are rounded down to two decimal places

3

Notes regarding Directors

Directors at the end of the reporting period are as below.
Position

Name

Executive Naoki Fukuda
Director
Supervisory Takashi Takahashi
Director
Hiroyuki Fujimoto
AuditorErnst & Young
ShinNihon LLC

Primary Responsibilities
President and CEO, Chief Planning and Financial Officer,
Consonant Investment Management Co. Ltd. (Note 1)
Attorney, Ocean General Law Office
Tax accountant, CPA Fujimoto Office--Directors’ remuneration for
operating period (thousands of yen)
-2,4002,400
7,300(Note 1)

The investment company had a change in organizational structure and personnel as of January 1, 2014, and Naoki Fukuda
became President and CEO as of the same date, relinquishing his other positions.
(Note 2) Executive and supervisory directors do not hold the Investment Corporation’s units either in their names or in thenames of third parties. In addition, while they may be directors of organizations not listed above, those organizations
as well as those listed above have no conflicts of interest with the Investment Corporation.
(Note 3) The auditing agreement with the auditor is renewed every accounting period. Dismissals are made in accordancewith the Investment Trust Act, and in addition, non-reappointments are considered by the board of directors of theInvestment Corporation by comprehensively taking into account the auditing quality, auditor remuneration, and othervarious circumstances.

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Asset Management Company, Asset Custody Companies, and General Administrative AgentsThe asset management company, asset custody companies, and general administrative agents at the end of the 21st
Fiscal Period are as below.
Delegation Category

Name

Asset management company

Consonant Investment Management Co., Ltd.

Asset custody company

Sumitomo Mitsui Trust Bank, Limited

General administrative agent (institutional operations (Note 1)

Sumitomo Mitsui Trust Bank, Limited

administration of investors’ registry, etc.)
General administrative agent (institutional operations (Note 2))

Consonant Investment Management Co., Ltd.

General administrative agent (auditing operations, etc.)

EP Consulting Services Corporation

Special account management company

Mitsubishi UFJ Trust and Banking Corporation Limited (Note 3) /Sumitomo Mitsui Trust Bank, Limited (Note 4)(Note 1) Of the administrative tasks for the Investment Corporation’s institutional operations, tasks related to the mailing of general unitholders’meetings and the receipt and counting of voting forms are delegated(Note 2) ① Tasks related to the running of general unitholders’ meetings for the Investment Corporation (excluding tasks related to the mailing ofgeneral unitholders’ meetings and the receipt and counting of voting forms),② Tasks related to the running of the meetings of the Board of Directorsof the Investment Corporation, and ③ the aforementioned in ① or tasks incidental or related to ② are delegated.
(Note 3) Conducts administrative tasks related to the creation, maintenance, and disposition of transfer savings account registers for special accounts
of unitholders of the Investment Corporation before the merger (former Tokyo Growth REIT Fund) as well as tasks related to other transfer savings
account registers.
(Note 4)Conducts administrative tasks related to the creation, maintenance, and disposition of transfer savings account registers for special accounts
of unitholders of the former LCP as well as tasks related to other transfer savings account registers.

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Status of Investment Corporation’s Assets under Management
1

Composition of Investment Corporation’s Assets

Type of
Asset

Purpose

Geographic area
(Note 1)

Fiscal Period ended June 30, 2013(as of June 30, 2013)

Amount held(millions of yen)
(Note 2)
Greater Tokyo area －Residential
Major regional cities －Subtotal－
Greater Tokyo area 715
Real estate Office/Retail
Major regional cities －Subtotal
715
Seniors,
Greater Tokyo area 3,061
hourly parking, Major regional cities 1,452
etc.
Subtotal
4,513
Total real estate
5,229Greater Tokyo area 44,312
Residential
Major regional cities 12,208
Subtotal
56,520Greater Tokyo area 7,092
Real estate
Office/Retailin trust
Major regional cities 6,111
Subtotal
13,204
Seniors,
Greater Tokyo area －hourly parking, Major regional cities －etc.
Subtotal－
Total real estate in trust
69,724
Deposits and other assets
5,294
Total assets (Note 3)
80,249(74,954)

Fiscal Period ended December 31, 2013(as of December 31, 2013)

Ratio of total assets
(%)
－
－
－
0.9
－
0.9
3.8
1.8
5.6
6.5
55.2
15.2
70.4
8.8
7.6
16.5
－
－
－
86.9
6.6
100.0
(93.4)

Amount held(millions of yen)
(Note 2)
－
－
－
714
－
714
3,044
1,441
4,486
5,200
44,10812,08456,192
7,111
6,078
13,190－－－69,383
4,593
79,176(74,583)

Ratio of total assets
(%)
－
－
－
0.9
－
0.9
3.8
1.8
5.7
6.6
55.7
15.3
71.0
9.0
7.7
16.7
－
－
－
87.6
5.8
100.0
(94.2)(Note 1) Greater Tokyo area refers to Tokyo, Kanagawa Prefecture, Chiba Prefecture and Saitama Prefecture.
(Note 2) “Amount held” is from the balance sheet as of the end of the reporting period and is calculated by decreasing accumulated
depreciation from the acquisition price (including acquisition related costs).
(Note 3) The figure indicated in“( )” in “total assets “shows the amount related to actual owned real estate.

2

Major Properties

The overview of the Investment Corporation’s major properties (top 10 properties by book value) at the end of the reporting period is as
below.
Name of Property

A75
B14
B17
A52
A51
B18
A53
A76
A30
A31

Spacia Ebisu
Lexington Plaza Nishigotanda
Lexington Plaza HachimanWinbell Kagurazaka
City House Tokyo Shinbashi
AEON Town Sukagawa
Nishiwaseda Crescent Mansion
Neo Prominence
Emerald House
Harmonie Ochanomizu
Total

Book Value(millionsof yen)Leasable
Area (m2)

LeasedArea (m2)Occupancy
rate (%)(Note)

Ratio ofrentalrevenue (%)

Main Use

6,72
4,81
3,19
3,14
2,41
2,12
1,84
1,66
1,42
1,38
28,74

7,794.9
6,033.5
8,419.1
4,032.7
3,364.0
18,440.5
4,310.7
3,574.7
2,152.3
1,748.2
59,870.9

6,954.62
5,437.21
8,419.15
3,893.54
3,364.00
18,440.58
4,086.33
3,452.00
2,129.26
1,703.84
57,880.53

89.2
90.1
100.0
96.5
100.0
100.0
94.8
96.6
98.9
97.5
96.7

6.6
5.1
5.9
3.7
3.3
5.2
2.6
2.3
1.5
1.4
37.8

Residential
OfficeRetail Facilities
Residential
Residential
Retail Facilities
Residential
Residential
Residential
Residential―(Note) “Occupancy Rate” is computed by dividing the leased area by leasable area, and rounded to one decimal place.

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Asset Portfolio Including Real Estate

The portfolio of held properties (real estate and accounts of assets and liabilities within assets in trust) of the Investment Corporation
at the end of the reporting period are as below.
Name of property

A26
A27
A28
A29
A30
A31
A32
A33
A34
A35
A36
A37
A38
A39
A40
A41
A42
A43
A44
A45
A46
A47
A48
A51
A52
A53
A54
A56
A59
A61
A62
A63
A64
A65
A66
A71
A72
A73
A75
A76
A77

Nisshin Palacestage Daitabashi

Location (Note 1)

Type of ownership

1-31-2 Izumi, Suginami Ward, Trust beneficiary interests
Tokyo
Nisshin Palacestage Higashi-Nagasaki 5-4-1 Nagasaki, Toshima
Trust beneficiary interests
Ward, Tokyo
Growth Maison Gotanda
2-26-6 Nishi-Gotanda,
Trust beneficiary interests
Shinagawa Ward, Tokyo
Growth Maison Kameido
6-58-16 Kameido, Koto Ward, Trust beneficiary interests
Tokyo
Emerald House
3-27-18 Itabashi, Itabashi
Trust beneficiary interests
Ward, Tokyo
Harmonie Ochanomizu
2-5-5 Yushima, Bunkyo Ward, Trust beneficiary interests
Tokyo
Suncrest Shakujii-Koen
3-15-35 Takanodai, Nerima
Trust beneficiary interests
Ward, Tokyo
Growth Maison Shin-Yokohama
3-16-2 Shin-Yokohama,
Trust beneficiary interests
Kohoku-ku, Yokohama City,
Belle Face Ueno-Okachimachi
1-27-5 Higashi-Ueno, Taito
Trust beneficiary interests
Ward, Tokyo
Grand Rire Kameido
3-39-12 Kameido, Koto Ward, Trust beneficiary interests
Tokyo
Growth Maison Ikebukuro3-31-14 Nishi-Ikebukuro,
Trust beneficiary interests
Toshima Ward, Tokyo
Growth Maison Yoga
1-15-15 Okamoto, Setagaya
Trust beneficiary interests
Ward, Tokyo
Route Tachikawa
3-7-6 Nishikicho, Tachikawa Trust beneficiary interests
City, Tokyo
Shibuya-Honmachi Mansion
2-35-2 Honmachi, Shibuya
Trust beneficiary interests
Ward, Tokyo
City Heights Kinuta
4-13-15 Kinuta, Setagaya
Trust beneficiary interests
Ward, Tokyo
Acseeds Tower Kawaguchi- Namiki 2-5-13 Namiki, Kawaguchi
Trust beneficiary interests
City, Saitama Prefecture
Capital Heights Kagurazaka
71-1 Enokicho, Shinjuku
Trust beneficiary interests
Ward, Tokyo
College Square Machida
3-4-4 Nakamachi, Machida
Trust beneficiary interests
City, Tokyo
Belair Meguro
1-2-15 Meguro, Meguro Ward, Trust beneficiary interests
Tokyo
Wacore Tsunashima I
2-7-47 Tarumachi, Kohoku-ku, Trust beneficiary interests
Yokohama City, Kanagawa
Foros Nakamurabashi
1-6-6 Koyama, Nerima Ward, Trust beneficiary interests
Tokyo
Growth Maison Kaijin
5-29-51 Kaijin, Funabashi
Trust beneficiary interests
City, Chiba Prefecture
College Square Machiya
7-3-1 Arakawa, Arakawa
Trust beneficiary interests
Ward, Tokyo
City House Tokyo Shinbashi
6-19-1 Shinbashi, Minato
Trust beneficiary interests
Ward, Tokyo
Winbell Kagurazaka
6-15 Shin-Ogawacho, Shinjuku Trust beneficiary interests
Ward, Tokyo
Nishiwaseda Cresent Mansion
3-18-9 Nishi-Waseda,Shinjuku Trust beneficiary interests
Ward, Tokyo
Lexington Square Akebonobashi
3-8 Yochomachi,Shinjuku
Trust beneficiary interests
Ward, Tokyo
Casa Eremitaggio
1-14-15 Nakane,Meguro Ward, Trust beneficiary interests
Tokyo
Towa City Coop Shinotsuka II
5-49-7 Higashi-Ikebukuro,
Trust beneficiary interests
Toshima Ward, Tokyo
Bichsel Musashiseki
1-22-7 Sekimachi-Kita,Nerima Trust beneficiary interests
Ward, Tokyo
Lexel Mansion Ueno Matsugaya
3-10-2 Matsugaya,Taito Ward, Trust beneficiary interests
Tokyo
Towa City Coop Sengencho
4-338-2 Sengencho, NishiTrust beneficiary interests
ku,Yokohama City, Kanagawa
Royal Park Omachi
2-11-10 Omachi, Aoba-ku,
Trust beneficiary interests
Sendai City, Miyagi Prefecture
Lexington Square Haginomachi
1-15-16 Haginomachi,
Trust beneficiary interests
Miyagino-ku, Sendai City,
Visconti Kakuozan
2-44 Otanacho, ChikusaTrust beneficiary interests
ku,Nagoya City, Aichi
Lexington Square Daitabashi
1-33-8 Izumi,Suginami Ward, Trust beneficiary interests
Tokyo
Lexington Square Honjo Azumabashi 4-20-6
Trust beneficiary interests
Higashikomagata,Sumida
AMS TOWER Minami 6-Jo
2-5-15 Minami 6-Jo Nishi,
Trust beneficiary interests
Chuo-ku, Sapporo City,
Spacia Ebisu
3-6-22 Higashi,Shibuya Ward, Trust beneficiary interestsTokyo
Neo Prominence
3-21-5 Shimo, Kita Ward,
Trust beneficiary interests
Tokyo
Invoice Shin-Kobe Residence
3-3-8 Ikutacho Chuo
Trust beneficiary interests
Ward,Kobe City, Hyogo

Leasable
Area (m2)
1,771.13

Appraisal value as ofBook Value
December 31, 2013 (millions of yen)(million of yen)
(Note 2)
1,771.13
1,130

2,681.94

2,681.94

1,240

1,051.50

1,051.50922

1,367.96

1,367.96

1,040

2,152.31

2,152.31

1,180

1,748.24

1,748.24

1,230

3,029.16

3,029.16

998

1,858.44

1,858.44

1,060

1,351.11

1,351.11

928

1,562.26

1,562.26

909

952.89952.89827

1,015.34

1,015.34

674

1,368.57

1,368.57

591

1,167.50

1,167.50

588

1,235.93

1,235.93454

1,210.74

1,210.74

676

1,126.65

1,126.65534

1,047.75

1,047.75

525

557.05557.05545

907.46907.46496815.77815.77532

2,040.27

2,040.27

455

871.35871.35494

3,364.00

3,364.00

2,650

4,032.70

4,032.70

3,420

4,310.77

4,310.77

2,140

1,987.88

1,987.88

1,570

1,197.19

1,197.19980

1,627.13

1,627.13930

1,220.24

1,220.24

631

1,969.45

1,969.45

1,050

3,426.36

3,426.36

1,230

1,929.59

1,929.59484

1,528.58

1,528.58

405

705.75705.75232

1,430.64

1,430.64

1,020

784.74784.74536

4,460.56

4,460.56

1,080

7,794.91

7,794.91

6,860

3,574.70

3,574.70

1,710

2,773.71

1,300

1,262

25

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Name of property

A78
A79
A80
A81
A82
A83
A84
A85
A86
A87
A88
A89
A90
A91
A92
A93
A94
A95
A96
A97
A98
A99

Location (Note 1)

Type of ownership

Cosmo Court Motomachi

3-12-20 Motomachi Dori Chuo Trust beneficiary interests
Ward,Kobe City, Hyogo
Revest Honjin
2-13 Torii Dori Nakamura
Trust beneficiary interests
Ward, Nagoya City, Aichi
Revest Matsubara
3-13-12 Matsubara Naka Ward Trust beneficiary interests,Nagoya City, Aichi Prefecture
Sun Terrace Minami Ikebukuro
2-22-6 Minami Ikebukuro,
Trust beneficiary interests
Toshima Ward, Tokyo
Alba Noritake Shinmachi
3-6-8 Noritake Shinmachi,
Trust beneficiary interests
Nishi Ward, Nagoya City,
Revest Meieki Minami
2-13-33 Meiekiminami,
Trust beneficiary interests
Nakamura Ward, Nagoya City,
Revest Heian
2-13-17 Heian, Kita Ward,
Trust beneficiary interests
Nagoya City, Aichi Prefecture
Vendir Hamaotsu Ekimae
1-2-15 Hama Otsu,Otsu City, Trust beneficiary interests
Shiga Prefecture
Salvo Sala
2-6-21 Shimanouchi Chuo
Trust beneficiary interests
Ward, Osaka City, Osaka
Excellente Kagurazaka
128-1 YamabukichoShinjuku Trust beneficiary interests
Ward,Tokyo
Luna Court Edobori
3-4-11 Edobori, Nishi Ward, Trust beneficiary interests
Osaka City, Osaka Prefecture
Winntage Kobe Motomachi
7-2-2 Motomachi Dori, Chuo Trust beneficiary interests
Ward,Kobe City, Hyogo
Queen's Court Fukuzumi
1-3-10 Fukuzumi, Koto Ward, Trust beneficiary interests
Tokyo
Corp Higashinotoin
380-1 Kawaranomachi,
Trust beneficiary interests
Higashinotoin Dori Nijo
Belair Oimachi
5-14-17 Higashi Oi, Shinagawa Trust beneficiary interests
Ward, Tokyo
Siete Minami-Tsukaguchi
3-18 Minami
Trust beneficiary interests
Tsukaguchimachi, Amagasaki
Prime Life Sannomiya Isogami Koen 4-3-23 Isogamidori ,Chuo
Trust beneficiary interests
Ward, Kobe City Hyogo
HERMITAGE NANBA WEST
4-10-3 Sakuragawa Naniwa
Trust beneficiary interests
Ward, Osaka City, Osaka
Century Park Shinkawa 1-bankan
4-1-2 Shinkawamachi Minato Trust beneficiary interests
Ward,Nagoya City, Aichi
West Avenue
1-5-17 Nishi,Kunitachi City, Trust beneficiary interests
Tokyo
Little River Honmachibashi
1-34 Honmachibashi Chuo
Trust beneficiary interests
Ward,Okasa City, Osaka
2-25-11Mikage Tsukamachi
Prime Life Mikage
Trust beneficiary interests
Higashi Nada Ward, Kobe
City, Hyogo Prefecture
Subtotal (63 properties)

B8
B9
B14
B15
B16
B17
B18

C1
C21
C22
C23
C24
C25
C26
C27

Kindai Kagakusha Building

Leasable
Area (m2)

Appraisal value as ofDecember 31, 2013
(million of yen)
(Note 2)

Book Value(millions of yen)

2,310.49

1,020

976

1,933.80

705

676

1,955.40

705

659

898.70644

625

1,731.68

637

611

1,634.60

626

600

1,554.03

610

598

2,670.66

650

583

1,428.12

567

548

701.92558

546

1,185.50547

527

1,433.35

545

514

765.18477

457

1,029.05

468

448

530.60428

414

1,020.86394

376

789.12383

374

992.76382

358

1,477.62

349

336

794.80334

330

974.81329

313

761.18307298

109,584.45 57,921

2-7-15, Ichigaya
Trust beneficiary interests
Tamachi,Shinjuku Ward,
Shinjuku Island
6-5-1 Nishi-Shinjuku, Shinjuku Real estate
Ward, Tokyo
Lexington Plaza Nishigotanda 5-2-4 Nishigotanda,Shinagawa Trust beneficiary interests
Ward, Tokyo
Cross Square NAKANO
5-24-18 Nakano,Nakano Ward, Trust beneficiary interests
Tokyo
Ohki Aoba Building
9-7 Futsukacho, AobaTrust beneficiary interests
ku,Sendai City, Miyagi
Lexington Plaza Hachiman
3-1-50 Hachiman, AobaTrust beneficiary interests
ku,Sendai City, Miyagi
AEON TOWN Sukagawa
105 Furukawa,Sukagawa City, Trust beneficiary interests
Fukushima Prefecture
Subtotal (7 properties)

1,451.54

1,020

526.43542

6033.58

4,050

2145.00930

2,178.41633

8,419.15

3,270

18,440.58

2,150

39,194.69

12,595

Stop Parking Kanda-Sudacho

81.04

92

2,342.17762

1,962.87

703

1-22-7 1-22-15 Kanda
Real estatesudacho, Chiyoda-ku, TokyoBon Sejour Chitose Funabashi 1-37-3 Funabashi,Setagaya
Real estate
Ward, TokyoBon Sejour Yotsugi
3-1-11 Higashi-Yotsugi,
Real estate
Katsushika Ward, TokyoBon Sejour Hino
438-1 Ochigawa,Hino City,
Real estateTokyo
Bon Sejour Musashi Shinjo
773-2 Chitose, Takatsu-ku,
Real estate
Kawasaki City, Kanagawa
Bon Sejour Komaki
3-1 Shiroyama,Komaki City, Real estate
Aichi Prefecture
Bon Sejour Hadano Shibusawa 1-6-60 ShibusawaReal estate
Kami,Hadano City, Kanagawa
Bon Sejour Itami
1-2-25 Chuo, Itami City,
Real estate
Hyogo Prefecture
Subtotal (8 properties)
Total (78 properties)

1,984.17 662

Investment
Corporation

56,192
1,226
714
4,811
1,073
759
3,198
2,120
13,904
100
659
624
553

1,710.43561

8,858.49

1,060

3,435.79

634

2,129.87

439

22,504.83

4,705

4,486

171,283.97 77,161

74,583

469
989
636
452

(Note 1) “Location” is in principle based on the indicated address (jyukohyoji), except that if the yukohyoji system has not been implemented for such property, the location is based on
the land number (banchi).
(Note 2) “Appraisal value” is the value appraised or researched as of the end of the fiscal period in accordance with the Articles of Incorporation and the regulations of the Investment
Trust Association, Japan by Asset Research and Development Inc., the Japan Real Estate Institute, Morii Appraisal & Investment Consulting Inc., or Tanizawa Sogo Appraisal
Co., Ltd.

26

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Investment
Corporation

Occupancy trends for the leasing operations of the real estate and acounts of assets and liabilities within assets in trust that the Investment
Corporation holds are as below.
20th Fiscal Period(Jaunary 1, 2013 to June 30, 2013)

Name
Number oftenants (at endof period)(unit)

Occupancy
rate(at end of
period) (%)(Note 1)21th Fiscal Period(July 1, 2013 to December 31, 2013)

Rental revenue
Ratio of rental Number of(during period)
revenuetenants (at(Thousands of yen) （%）
end ofperiod)（Note 2）
(unit)

Occupancy
rate(at end of
period) (%)(Note 1)

Rental revenue
Ratio of rental(during period)
revenue(Thousands of yen) （%）（Note 2）

A26 Nisshin Palacestage Daitabashi

1

98.0

40,694

1.5

1

95.0

40,764

1.5

A27 Nisshin Palacestage Higashi-Nagasaki

1

98.4

46,495

1.7

1

97.4

44,8281.6

Growth Maison Gotanda

1

100.0

27,481

1.0

1

100.0

27,386

1.0

A29 Growth Maison Kameido

1

94.0

33,015

1.2

1

89.3

31,655

1.2

Emerald House

1

100.0

50,083

1.8

1

98.9

41,974

1.5

A31 Harmonie Ochanomizu

1

88.2

41,051

1.5

1

97.5

39,196

1.4

Suncrest Shakujii-Koen

1

95.6

37,025

1.3

1

95.3

34,6601.3

A33 Growth Maison Shin-Yokohama

1

97.1

35,753

1.3

1

94.1

36,146

1.3

A28
A30
A32

Belle Face Ueno-Okachimachi

1

100.0

32,762

1.2

1

100.0

30,564

1.1

A35 Grand Rire Kameido

1

100.0

26,619

1.0

1

100.0

26,6191.0

A36 Growth Maison Ikebukuro

1

88.2

23,607

0.9

1

97.6

24,2440.9

Growth Maison Yoga

1

97.3

21,693

0.8

1

100.0

21,660

0.8

1

76.7

20,364

0.7

1

83.5

17,305

0.6

1

80.8

19,238

0.7

1

96.4

18,641

0.7

1

94.6

17,112

0.6

1

94.6

16,885

0.6

A34

A37

A38 Route Tachikawa
A39

Shibuya-Honmachi Mansion

A40 City Heights Kinuta
Acseeds Tower Kawaguchi- Namiki

1

93.0

26,096

0.9

1

96.5

24,2850.9

A42 Capital Heights Kagurazaka

1

97.2

18,127

0.7

1

91.0

18,084

0.7

A43 College Square Machida

1

100.0

18,268

0.7

1

100.0

18,2680.7

Belair Meguro

1

96.0

16,304

0.6

1

92.1

16,116

0.6

A45 Wacore Tsunashima I

1

90.0

18,235

0.7

1

82.1

16,987

0.6

Foros Nakamurabashi

1

92.0

17,550

0.6

1

94.5

17,295

0.6

A47 Growth Maison Kaijin

1

94.4

22,249

0.8

1

100.0

23,364

0.9

College Square Machiya

1

100.0

14,706

0.5

1

100.0

14,706

0.5

A51 City House Tokyo Shinbashi

1

100.0

87,840

3.2

1

100.0

91,2883.3

Winbell Kagurazaka

1

96.9

102,111

3.7

1

96.5

101,996

3.7

A53 Nishiwaseda Cresent Mansion

1

98.5

73,895

2.7

1

94.8

70,856

2.6

A54 Lexington Square Akebonobashi

1

94.4

47,818

1.7

1

89.7

46,136

1.7

A41

A44
A46
A48
A52

Casa Eremitaggio

1

90.0

27,934

1.0

1

90.0

30,392

1.1

A59 Towa City Coop Shinotsuka II

1

94.9

34,269

1.2

1

89.9

32,744

1.2

Bichsel Musashiseki

A56

1

95.7

25,714

0.9

1

92.9

22,4550.8

A62 Lexel Mansion Ueno Matsugaya

1

86.8

32,021

1.2

1

100.0

32,797

1.2

Towa City Coop Sengencho

A61

1

94.9

61,782

2.2

1

90.5

60,0852.2

A64 Royal Park Omachi

1

100.0

25,936

0.9

1

95.0

25,5830.9

A65 Lexington Square Haginomachi

1

100.0

18,166

0.7

1

97.4

18,2070.7

Visconti Kakuozan

1

100.0

10,515

0.4

1

100.0

11,6830.4

A71 Lexington Square Daitabashi

1

95.1

32,140

1.2

1

93.7

30,928

1.1

1

93.9

18,498

0.7

1

100.0

17,511

0.6

1

88.2

48,065

1.7

1

97.1

47,709

1.7

1

90.2

187,658

6.8

1

89.2

180,121

6.6

1

96.6

62,498

2.3

1

96.6

63,701

2.3

95.4

48,8991.8

98.7

37,159

1.4

A63

A66
A72

Lexington Square Honjo Azumabashi

A73 AMS TOWER Minami 6-Jo
A75

Spacia Ebisu

A76 Neo Prominence
A77

Invoice Shin-Kobe Residence

A78 Cosmo Court Motomachi

1

98.6

48,133

1.7

1

1

92.7

37,1871.3

127

Invincible
20th Fiscal Period(Jaunary 1, 2013 to June 30, 2013)

Name
Number oftenants (atend ofperiod)(unit)

A79 Revest Honjin
Revest Matsubara

Occupancy
rate(at end of
period) (%)(Note 1)

Investment
Corporation

21st Fiscal Period(July 1, 2013 to December 31, 2013)

Rental revenue
Number ofOccupancy(during period)
tenants (at end rate
(Thousands of yen) of period)(at end of(unit)
period) (%)（Note 2）
(Note 1)

Rental revenue Number of tenants Occupancy(during period) (at end of period) rate
(Thousands of (unit)(at end of
yen)
period) (%)(Note 1)
（Note 2）

1

98.8

31,100

1.1

1

93.7

30,568

1.1

1

95.7

28,957

1.0

1

98.8

29,325

1.1

A81 Sun Terrace Minami Ikebukuro

1

97.4

22,001

0.8

1

97.4

21,707

0.8

Alba Noritake Shinmachi

A80

1

93.8

25,407

0.9

1

96.5

24,841

0.9

A83 Revest Meieki Minami

1

100.0

25,512

0.9

1

98.5

25,0530.9

A84 Revest Heian

1

100.0

23,227

0.8

1

98.4

23,423

0.9

1

95.4

31,352

1.1

1

100.0

32,235

1.2

1

98.0

24,272

0.9

1

96.7

24,562

0.9

1

97.1

18,157

0.7

1

91.2

17,831

0.7

1

98.0

21,571

0.8

1

98.0

21,738

0.8

A82

A85

Vendir Hamaotsu Ekimae

A86 Salvo Sala
A87

Excellente Kagurazaka

A88 Luna Court Edobori
Winntage Kobe Motomachi

1

94.9

24,092

0.9

1

86.0

22,696

0.8

A90 Queen's Court Fukuzumi

1

100.0

16,712

0.6

1

100.0

16,668

0.6

Corp Higashinotoin

1

97.7

17,929

0.6

1

95.1

17,6780.6

A92 Belair Oimachi

1

100.0

14,640

0.5

1

96.4

15,193

0.6

A93 Siete Minami-Tsukaguchi

1

100.0

17,140

0.6

1

97.5

16,916

0.6

1

100.0

14,804

0.5

1

93.8

14,484

0.5

1

86.9

14,732

0.5

1

96.0

15,418

0.6

1

90.9

16,940

0.6

1

97.7

16,960

0.6

1

82.5

12,652

0.5

1

90.0

12,084

0.4

1

93.8

12,986

0.5

1

96.9

13,438

0.5

1

100.0

12,315

0.4

1

96.6

12,366

0.5

63

95.0

2,033,237

73.7

63

95.4

1,997,099

72.9

A89
A91

A94

Prime Life Sannomiya Isogami Koen

A95 HERMITAGE NANBA WEST
A96

Century Park Shinkawa 1-bankan

A97 West Avenue
A98

Little River Honmachibashi

A99 Prime Life Mikage
Subtotal

B8

Kindai Kagakusha Building

1

100.0

37,890

1.4

1

100.0

39,112

1.4

B9

Shinjuku Island

1

100.0

(Note 3)(Note 3)1100.0(Note 3)(Note 3)

B14 Lexington Plaza Nishigotanda

8

90.1

134,136

4.9

8

90.1

139,8215.1

B15 Cross Square NAKANO

1

57.6

28,611

1.0

1

67.6

28,653

1.0

Ohki Aoba Building

1

100.0

40,249

1.5

1

100.0

40,415

1.5

B17 Lexington Plaza Hachiman

1

100.0

155,659

5.6

1

100.0

162,868

5.9

AEON TOWN Sukagawa

1

100.0

140,817

5.1

1

100.0

142,719

5.2

14

96.2

556,123

20.1

14

96.7

570,788

20.8

B16
B18

Subtotal

C1

Stop Parking Kanda-Sudacho

1

100.0

2,443

0.1

1

100.0

2,443

0.1

C21

Bon Sejour Chitose Funabashi

1

100.0

23,544

0.9

1

100.0

23,7980.9

C22

Bon Sejour Yotsugi

1

100.0

22,208

0.8

1

100.0

22,4150.8

C23

Bon Sejour Hino

1

100.0

21,197

0.8

1

100.0

21,354

0.8

C24

Bon Sejour Musashi Shinjo

1

100.0

17,606

0.6

1

100.0

17,697

0.6

C25

Bon Sejour Komaki

1

100.0

44,479

1.6

1

100.0

45,224

1.7

C26

Bon Sejour Hadano Shibusawa

1

100.0

23,371

0.8

1

100.0

23,6590.9

C27

Bon Sejour Itami

1

100.0

15,963

0.6

1

100.0

15,9680.6

Subtotal8

100.0

170,816

6.2

8

100.0

172,561

6.3

Total

85

95.9

2,760,177

100.0

85

96.3

2,740,449

100.0(Note 1) “Occupancy rate” is computed by dividing the leased area by leasable area, and is rounded to one decimal place.
(Note 2) “Rental revenue (during period)” indicates each property’s leasing operation revenues dring the fiscal period, and has been rounded down to the nearest thousand yen.
(Note 3) Undisclosed due to inability to gain approval from the property tenant for document disclosure.

28

Invincible
4

Investment
Corporation

Status of Size and Market Value of Trading Assets

No relevant items
5

Status of Other Assets

Trust beneficiary interests in real estate and real estate held in trust are listed together in the 3 Asset Portfolio
Including Real Estate above. As of the end of this reporting period, there are no investments in specified assets thatare significant investment targets for the Investment Corporation outside of the above 3.
6Asset Holdings Outside of Japan or the Region

There are no relevant items outside of Japan or the region.

29
9

Invincible

Investment
Corporation

Capital expenditures for properties
1 Schedule for capital expenditures
The schedule for the principal capital expenditures for property maintenance construction, etc. as of the end of the fiscal period for the realestate assets is as follows.

Property
Suncrest Shakujii-Koen

B8

B16

Estimated cost (thousands of yen)

Scheduled time of
implementation

PurposeNerima Ward, Tokyo Large-scale maintenanceconstruction
Renewal construction of air
Shinjuku Ward,conditioning system on the first
Kindai Kagakusha Building
Tokyobasement floor and three otherfloorsRenewal construction of air
Sendai City, Miyagi
Ohki Aoba Building
conditioning system on the 1st
Prefectureand 2nd floors
Lexington Plaza
Shinagawa Ward,
Renewal construction of air
Nishigotanda
Tokyoconditioning system on 1st floor

A32

Total

From April 2014 to June
2014

Payment for the Advancefiscal period
payments

33,800－－From April 2014 to May
201416,583－－

From April 2014 to May
2014

15,965

－

－

－

－

－

－

－

－

－

－

－

－

－

－

From March 2014 to April 14,260
2014
From March 2014 to June 13,500
Cross Square NAKANO Nakano Ward, Tokyo Renovation construction
2014
Funabashi
City,
Chiba
Maintenanceconstruction
work
From January 2014 toGrowth Maison Kaijin
11,800Prefecture
on mechanical parking facility
March 2014
Nisshin Palacestage
Replacement
constructionofFrom
February2014
toToshima Ward, Tokyo
7,454
Higashi-Nagasaki
intercom
March 2014
From June 2014 to June
Lexington Plaza Hachiman Sendai City, Miyagi Iron repair work on parking
6,140
Prefecture
structure and evacuation staircase 2014
Nisshin Palacestage
Suginami Ward,
Renewal construction of prepaid From March 2014 to March 5,806
DaitabashiTokyo
hot water unit
2014

B14
B15
A47
A27
B17
A26

2

Location

Capital expenditures for the fiscal period ended December 31, 2013

The principal construction constituting capital expenditures for the real estate assets for the fiscal period ended December 31, 2013 is asfollows. Capital expenditures for the fiscal period was 156,682 thousand yen, and together with 28,041 of repair cost include in this fiscal period’s
expenses, construction work totaling 184,723 thousand yen was implemented.
Property

A27

Nisshin Palacestage
Higashi-Nagasaki

Location

PurposeTime of implementation

Toshima Ward, Tokyo

Large-scale maintenance construction
Renewal construction of air conditioning
system on the 6th and 7th floors
Renovation constructin of Room 805 and 4other rooms

B16

Ohki Aoba Building

Sendai City, Miyagi
Prefecture

B15

Cross Square NAKANO

Nakano Ward, Tokyo

B14

Lexington Plaza
Nishigotanda

Shinagawa Ward, Tokyo Renewal of central monitoring device

B15

Cross Square NAKANO

Nakano Ward, Tokyo

Renovation construction of Room 1004,
Room 1005 and Room 1006

Payment(thousands of yen)

From October 2013 to
34,551
December 2013
From November 203 to
14,147
December 2013
From November 2013 to
13,994
December 2013
From August 2013 to October 9,008
2013
From October 2013 to8,396
November 2013

Other construction

76,584

Total

156,682

3 Reserved funds for long-term maintenance plan
The Investment Corporation has reserved funds, as below, from the cash flow of the relevant fiscal period towards large-scale maintenancerepairs in the medium to long term future in accordance with the long-term maintenance plan for each property.
Fisacl period

17th Fiscal Period

18th Fiscal Period

19th Fiscal Period

20th Fiscal Period

21st Fiscal Period

Reserved funds at beginning of period

From July 1, 2011 to From January 1, 2012 From July 1, 2012 to From January 1, 2013 From July 1, 2013 to
December 31, 2011
to June 30, 2012
December 31, 2012
to June 30, 2013
December 31, 2013
551,103 thousand yen 356,408 thousand yen 487,561 thousand yen 541,609 thousand yen 571,543 thousand yen

Amount reserved (Note)

238,107 thousand yen 163,931 thousand yen 151,076 thousand yen 165,233 thousand yen 165,271 thousand yen

Amount reversed (Note)

432,803 thousand yen 32,777 thousand yen

Amount carried over for next fiscal period

356,408 thousand yen 487,561 thousand yen 541,609 thousand yen 571,543 thousand yen 524,730 thousand yen(Note)

97,028 thousand yen

135,298 thousand yen 212,084 thousand yen

The amount reserved for the relevant fiscal period includes the reserves for acquired properties, and the amount reversed includes the reserves for disposed properties.

30

Invincible

Investment
Corporation

Overview of Liabilities and Expenses
1

Statement of Operating Expenses(Thousands of yen)Item

20th Fiscal Period

21st Fiscal Period(a) Asset management fees

Jan. 1, 2013 to June 30, 2013
125,000

July 1, 2013 to Dec. 31, 2013
125,000

3,911

3,986

21,531

19,089

4,800

4,800

78,29360,582

233,536

213,457(b) Asset custodian fees(c) Administrative services fees(d) Directors’ remuneration(e) Other operating expenses

2

Borrowing Conditions
Borrowing conditions by financial institution at the end of this reporting period are as below.

Type

Borrowing
Date

LenderBalance at Start of Balance at End of Average
Reporting Period Reporting Period Interest Rate
(Thousands of yen) (Thousands of yen) (%) (Note 1)

MetLife Alico
4,462,220
The Bank of New York Mellon Trust
2,974,813
Citibank Japan Ltd.
Sep. 28. 2012 2,925,233
Shinsei Bank, Limited.
2,925,233
Shinsei Trust & Banking Co., Ltd.
Jul. 29, 2011 7,100,000
Shinsei Trust & Banking Co., Ltd.
Jul. 29, 2011 2,504,000
Sumitomo Mitsui―
The Bank of Tokyo-Mitsubishi UFJ, Ltd.
―
Shinsei Bank, Limited
Citibank Japan Ltd.
Shinsei Trust & Banking Co., Ltd.
Aozora Bank, Ltd.
SubtotalLong-term Debts
in Trust (Note 2)
SubtotalMizuho Trust & Banking
Co., Ltd.
Mitsubishi UFJ Trust andBanking Corporation

―
―
―
―
―
―
5,500,000
5,500,000

Dec. 20, 2013 ――――
22,891,500

4,000,000
2,000,000
2,000,000
1,350,000
20,350,000

3,750,000
3,620,000
3,630,000
2,700,000
2,860,000
Sep. 28. 2012 1,830,000
2,570,000
20,960,000
43,851,500

3,750,000
3,620,000
3,630,000
2,700,000
2,860,000
1,830,000
2,570,000
20,960,000
41,310,000

Jul. 29, 2011

Repayment
Date

Payment
MethodPurpose

2.252
2.252
2.252
2.252
8.500
9.500

―
―
―
―
―
―

(Note 3)(Note 3)(Note 3)(Note 4)(Note 5)(Note 5)(Note 5)1.680

Dec. 20, 2016 (Note 6)(Note 5)

2.500
2.500
2.500
1.900
1.900
1.900
1.900

Jan. 25, 2017
Jan. 25, 2018
Jan. 25, 2019 (Note 8)(Note 5)Mar. 31, 2018 Lump Sum
Mar. 31, 2019
Mar. 31, 2020 (Note 10)
Mar. 31, 2019 (Note 11) (Note 4)

Notes

SecuredConventional

SecuredConventional(Note 1) Average interest rate is the daily weighted average number of the period according to the number of days, and is rounded to one decimal place.
(Note 2) Includes long-term debt scheduled to be repaid within 1 year and long-term debt in trust scheduled to be repaid within 1 year.
(Note 3) Repaid total balance before maturity on Dec. 20, 2013.
(Note 4) The funds raised through borrowings are mainly used to acquire real estate properties or properties in trust.
(Note 5) Used for purposes including repayment of existing debt.
(Note 6) Portion of principal (16 million yen) repaid on same day as coupon payment date (monthly), and lump-sum payment of balance to be made on principal maturity date.
(Note 7) Mizuho Trust & Banking Co., Ltd. is the trustee of the REIT of which the Investment Corporation is the beneficiary, and has borrowed funds on Jul. 29, 2011 fromPrudential Mortgage Asset Holdings 1 Japan Investment Limited Partnership of Prudential Financial Inc. Group. The Investment Corporation received said loan (after
deduction of reserves) as grant of trust principal of said REIT from Mizuho Trust & Banking Co. Ltd. on the same date.
(Note 8) On each principal and interest payment date (every 3 months) that occurs after 3 years from the borrowing date, amounts paid will be those calculated under the assumptionthat the repayment of the balance of the principal will be by the equal payment method for a term of 20 years (total 80 payments). The balance remaining after thepayments above will be repaid in one lump sum on the principal maturity date.
(Note 9) Mitsubishi UFJ Trust and Banking Corporation is the trustee of the REIT of which the Investment Corporation is the beneficiary, and has borrowed funds on Sep. 28, 2012
from Prudential Mortgage Asset Holdings 1 Japan Investment Limited Partnership of Prudential Financial Inc. Group. The Investment Corporation received said loan
(after deduction of reserves) as grant of trust principal of said REIT from Mitsubishi UFJ Trust and Banking Corporation on the same date.
(Note 10) On each principal and interest payment date (every 3 months) that occurs after 5 years from the borrowing date, amounts paid will be those calculated under theassumption that the repayment of the balance of the principal will be by the equal payment method for a term of 27 years (total 108 payments). The balance remaining
after the payments above will be repaid in one lump sum on the principal maturity date.
(Note 11) On each principal and interest payment date (every 3 months) that occurs after 3 years from the borrowing date, amounts paid will be those calculated under theassumption that the repayment of the balance of the principal will be by the equal payment method for a term of 20 years (total 80 payments). The balance remaining
after the payments above will be repaid in one lump sum on the principal maturity date.

Other
Unless there are specific statements to the contrary, monetary figures are rounded down to the nearest yen and percentages arerounded off for unspecified values.

31

Invincible

Investment
Corporation

The following is a summary English language translation of original Japanese audited financial statements. However, noassurance or warranties are given with respect to the accuracy or completeness of this summary English language translation,and it should be noted that this translation has not been audited or reviewed by our auditor. The Japanese original shall prevailin the case of any discrepancies between this summary English language translation and the Japanese original.

II. Balance Sheet(Unit: thousands of yen)
Fiscal Period ended June 30, 2013
(As of June 30, 2013)

AssetsCurrent Assets
Cash and deposits
Cash and deposits in trust
Accounts receivables
Advances paid
Deposits paid
Prepaid expenses
Consumption tax receivable
OthersAllowance for doubtful accounts
Total Current Assets
Non-current Assets
Property, plant and equipment
Buildings
Accumulated depreciation
Buildings, net
Equipment
Accumulated depreciation
Equipment, net
Building improvements
Accumulated depreciation
Building improvements, net
Land
Buildings in trust
Accumulated depreciation
Buildings in trust, net
Equipment in trust
Accumulated depreciation
Equipment in trust, net
Building improvements in trust
Accumulated depreciation
Building improvements 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
OthersTotal intangible assets
Total investment and other assets
Guarantee deposits
Long-term prepaid expenses
OthersTotal investments and other assets
Total non-current Assets
Total Assets

Fiscal Period ended December 31, 2013
(As of December 31, 2013)

1,427,483※1 2,690,331
17,407139※2 748,197
211,587(1,528)
5,093,620※1 1,457,257※1 2,729,902
10,9480※2 122,321
7,419
10(2,573)
4,325,286※1 2,680,174(190,772)
2,489,402※1 50,691(26,789)
23,902※1 3,848(1,397)2,451※1 2,713,620※1 29,677,895(2,060,616)
27,617,278※1 6,713,907(1,493,122)
5,220,784※1 312,020(85,630)
226,389※1 142,175(64,333)
77,842※1 36,582,527
74,954,199※1 2,680,174(218,377)
2,461,796※1 50,691(27,985)
22,706※1 3,848(1,518)2,330※1 2,713,620※1 29,762,419(2,339,358)
27,423,061※1 6,763,740(1,690,614)
5,073,126※1 320,904(97,258)
223,646※1 155,616(74,970)
80,646※1 36,582,527
74,583,461

167
167

137
137

10,000158,394
32,680201,075
75,155,443
80,249,063

10,000224,371
33,375
267,746
74,851,345
79,176,632

32

Invincible

Investment
Corporation(Unit: thousands of yen)
Fiscal Period ended June 30, 2013
(As of June 30, 2013)

Fiscal Period ended December 31, 2013
(As of December 31, 2013)

Accounts Payable

151,861

174,201

Current portion of long-term debts※1 262,000※1 203,520

Current portion of long-term debts in trust-※1 105,833

Accrued liabilities

4,375

5,000

Accrued expenses

354,066

229,843

Accrued income taxes

527

525

Accrued consumption taxes

24,902-

Advances received

377,475

385,886

Deposits received

8,601

5,048

Total Current Liabilities

1,183,809

1,109,859

Long-term debts※1 22,629,500※1 20,146,480

Long-term debts in trust※1 20,960,000※1 20,854,166

Tenant leasehold and security deposits in trust

1,048,635

1,037,721

Tenant leasehold and security deposits

183,579

183,579

Long-term accrued expenses

1,395,513-

Total Non-current Liabilities

46,217,228

42,221,948

47,401,038

43,331,808

26,134,396

29,134,389

Capital Surplus

6,264,432

6,264,432

Unappropriated retained earnings/loss

449,196446,003

Total Surplus

6,713,628

6,710,435

32,848,025

35,844,824※3 32,848,025※3 35,844,824

80,249,063

79,176,632

Liabilities
Current Liabilities

Non-current Liabilities

Total Liabilities
Net Assets
Unitholders’Equity
Unitholders’ Capital
Surplus

Total Unitholders’ Equity
Total Net Assets
Total Liabilities and Net Assets

33

Invincible

Investment
Corporation(Unit: thousands of yen)

III. Statement of Income
Fiscal Period ended
June 30, 2013
(from January 1, 2013
to June 30, 2013)

Fiscal Period ended
December 31, 2013
(from July 1, 2013 to
December 31, 2013)

Rental revenues※1 2,760,177※1 2,740,449

Total Operating Revenues

2,760,177

2,740,449

Property related expenses※1 1,295,403※1 1,261,221

Asset management fees

125,000

125,000

Directors’ remuneration

4,800

4,800

Asset custodian fees

3,911

3,986

Administrative service fees

21,531

19,089Provision of allowance for doubtful accounts

730

1,045

Other operating expense

-

2,561

Other operating expenses

77,562

56,975

Total Operating Expenses

1,528,940

1,474,679

1,231,237

1,265,770

Interest revenues

383

400

Profit from finance related cost adjustment-※2 354,737

Miscellaneous income

3,088

406

Total Non-operating Revenues

3,472

355,544

Interest expenses

800,615

672,128

Finance related costs

96,816

579,038

Investment unit issuance expenses-

15,487

Miscellaneous losses

1,593

1,300

Total Non-operating Expenses

Operating Revenues

Operating Expenses

Operating Income
Non-operating Revenues

Non-operating Expenses

899,026

1,267,953

Ordinary Income

335,683

353,360

Income Before Income Taxes

335,683

353,360

Corporate Tax, etc.

605

605

Total Corporate Tax, etc.

605

605

Net Income

335,078

352,755

Retained Earnings at the Beginning of the Period

114,118

93,247

Unappropriated Retained Earnings/Loss at the End of the Period

449,196446,00334

Invincible

Investment
Corporation

IV. Statement of Unitholders’ Equity

Fiscal Period ended June 30, 2013 (from January 1, 2013 to June 30, 2013)(Units：thousands of yen)
Unitholders’ equity
SurplusCapital Surplus

UnappropriatedRetained
Earnings/Loss

Total Surplus

Total Unitholders’ Total Net Assets
Equity6,264,432

271,868

6,536,300

32,670,697

32,670,697

Distributions from surplus(157,750)(157,750)(157,750)(157,750)

Net income

335,078

335,078

335,078

335,078

Unitholders’ Capital

Balance at the beginning of 26,134,396
the period
Change during the period

Total change during theperiodBalance at the end of theperiod－－177,328

177,328

177,328

177,328

26,134,396

6,264,432

449,196

6,713,628

32,848,025

32,848,025

Fiscal Period ended December 31, 2013 (from July 1, 2013 to December 31, 2013)(Units：thousands of yen)
Unitholders’ equity
Unitholders’ Capital

SurplusCapital Surplus

Balance at the beginning of 26,134,396
the period
Change during the period

6,264,432

UnappropriatedRetained
449,196

Total Surplus
6,713,628

Total Unitholders’ Total Net Assets
Equity32,848,025

32,848,025

2,999,992

2,999,992

Issuance of new investment 2,999,992
units
Distributions from surplus(355,949)(355,949)(355,949)(355,949)

Net income

352,755

352,755

352,755

352,755

Total change during theperiodBalance at the end of theperiod2,999,992－(3,193)(3,193)

2,996,799

2,996,799

29,134,389

6,264,432

446,0036,710,435

35,844,824

35,844,82435

Invincible

Investment
Corporation

V. Notes［ Notes Concerning Significant Accounting Policies］
By Period

For the Fiscal Period ended June 30, 2013
(from January 1 to June 30, 2013)

1. Method of depreciation of noncurrent assets

1. Property, plant and equipment
The straight-line method is used.
The useful lives of major property, plant andequipment are as follows.

Item

For the Fiscal Period ended December 31, 2013
(from July 1, 2013 to Dec. 31, 2013)
1. Property, plant and equipment
The straight-line method is used.
The useful lives of major property, plant andequipment are as follows.

Buildings

40 - 77 years Buildings

40 - 77 years

Equipment

3 - 24 years Equipment

3 - 24 years

Building improvements

3 - 18 years Building improvements

3 - 18 years

Buildings in trust

6 - 66 years Buildings in trust

6 - 66 years

Equipment in trust

3 - 32 years Equipment in trust

3 - 32 years

Building improvements in trust

3 - 55 years Building improvements in trust

3 - 55 years

Tools, furniture & fixtures in trust 2 - 15 years Tools, furniture & fixtures in trust 2 - 15 years
2.Intangible assets
The straight-line method is used.
3. Long-term prepaid expenses
The straight-line method is used.
2. Method of calculating allowances

3. Revenue and expense recognition

2.Intangible assets
The straight-line method is used.
3. Long-term prepaid expenses
The straight-line method is used.

Allowance for doubtful accounts
Allowance for doubtful accounts
To reserve for losses on doubtful accounts,
To reserve for losses on doubtful accounts,
allowances are provided for normal receivables allowances are provided for normal receivables
using a rate determined based on past bad debt using a rate determined based on past bad debt
experiences, and specific allowances areexperiences, and specific allowances areprovided for accounts with a possibility ofprovided for accounts with a possibility ofdefault based on the estimated amounts
default based on the estimated amounts
considered to be uncollectible by considering the considered to be uncollectible by consideringcollectability of accounts on an individual basis. the collectability of accounts on an individual
basis.
Accounting treatment of property taxes andAccounting treatment of property taxes andother taxes
other taxes
With respect to property taxes, city planningWith respect to property taxes, city planningtaxes and depreciable asset taxes, of the tax
taxes and depreciable asset taxes, of the tax
amount assessed and determined, the amountamount assessed and determined, the amountcorresponding to the relevant fiscal period iscorresponding to the relevant fiscal period is
accounted for as property related expenses.
accounted for as property related expenses.
Of the amounts paid to the seller for acquisitions Of the amounts paid to the seller forof real estate, the amount equivalent to property acquisitions of real estate, the amounttaxes is capitalized as part of the acquisition cost equivalent to property taxes is capitalized asof the real estate instead of being charged aspart of the acquisition cost of the real estate
expense. There was no such amount equivalent instead of being charged as expense. There wasto property taxes that was included as part of the no such amount equivalent to property taxes
acquisition of real estate during this fiscalthat was included as part of the acquisition of
period.
real estate during this fiscal period.

36

Invincible

By Period
Item

For the Fiscal Period ended June 30, 2013
(from January 1 to June 30, 2013)

Investment
Corporation

For the Fiscal Period ended December 31, 2013
(from July 1, 2013 to Dec. 31, 2013)(1) Accounting treatment of trust beneficiary (1) Accounting treatment of trust beneficiaryinterests of real estate
4.Other significant matters which interests of real estate
As to trust beneficiary interests of real estate, As to trust beneficiary interests of real estate, allconstitute the basis for
all accounts of assets and liabilities within
accounts of assets and liabilities within assets in
preparation of financial
assets in trust, as well as all income generated trust, as well as all income generated andstatements
and expenses incurred from assets in trust, are expenses incurred from assets in trust, arerecorded in the relevant balance sheets andrecorded in the relevant balance sheets andincome statement accounts. Of such items, the income statement accounts. Of such items, thefollowing significant trust assets and liabilities following significant trust assets and liabilities areare shown separately on the balance sheet.
shown separately on the balance sheet.
Cash and deposits in trust
Cash and deposits in trust
Buildings in trust
Buildings in trust
Equipment in trust
Equipment in trust
Building improvements in trust
Building improvements in trust
Tools, furniture and fixtures in trust
Tools, furniture and fixtures in trust
Land in trust
Land in trust
Tenant leasehold and security deposits in trust Tenant leasehold and security deposits in trust
Long-term debts in trust
Long-term debts in trust
Current portion of long-term debts in trust－(2) Accounting treatment of deferred charges(a) Investment unit issuance expenses
The full amount is recorded as expense at the timeof expenditure.

(2) Accounting treatment of consumption taxes (3) Accounting treatment of consumption taxes
Transactions subject to consumption taxes
Transactions subject to consumption
are recorded at amounts exclusive of consumption
taxes are recorded at amounts exclusive oftaxes.
consumption taxes.

37

Invincible

Investment
Corporation(Notes Concerning Changes in Methods of Presentation)
Fiscal Period ended June 30, 2013
(from January 1 to June 30, 2013)－

Fiscal Period ended December 31, 2013
(from July 1 to December 31, 2013)““Public listing related costs”, which was included as anindependent item under “non-operating expenses” for the fiscal
period ended June 30, 2013, has been included in “miscellaneous
losses “under “non-operating expenses” for the fiscal period ended
December 31, 2013 due to the insignificant amount. The financial
statements for the first period ended June 30, 2013 have been
restated to reflect this change in method of presentation.
As a result, the amount of 1,300 yen which was presented as “public
listing related costs” under “non-operating expenses” has been
restated to be included in “miscellaneous” in the statement ofincome.

38

Invincible

Investment
Corporation(Notes to the Balance Sheets)※1.
Assets pledged as collateral and liabilities with collateral
Assets pledged as collateral are as follows.
(Unit：thousands of yen)

Cash and deposits

Fiscal Period ended December 31,
Fiscal Period ended June 30, 20132013
(as of June 30, 2013)(as of December 31, 2013)
167,136

Cash and deposits in trust

2,690,331

2,729,902

Buildings

2,489,402

2,461,796

Equipment

23,902

22,706

Building improvements

2,451

2,330

Land

2,713,620

2,713,620

Buildings in trust

27,617,278

27,423,061

Equipment in trust

5,220,784

5,073,126

Building improvements in trust

226,389

223,646

Tools, furniture and fixtures in trust

77,84280,646

Land in trust

36,582,527

36,582,527

Total

77,644,531

77,480,500

Liabilities with collateral are as follows.
(Unit：thousands of yen)

Current portion of long-term debts

Fiscal Period ended December 31,
Fiscal Period ended June 30, 20132013
(as of June 30, 2013)(as of December 31, 2013)
262,000
203,520

Long-term debts

22,629,500

20,146,480

Current portion of long-term debts in trust-

105,833

Long-term debts in trust

20,960,000

20,854,166

Total

43,851,500

41,310,000※2.
Represents amounts entrusted to financial institutions for the purpose of repayment of borrowings in trust from suchfinancial institutions. There was no such amount as of December 31, 2013.
※3.

Minimum net assets as required by Article 67, Paragraph 4 of the Act on Investment Trusts and Investment Corporations.

(Unit：thousands of yen)

Fiscal Period ended December 31,
Fiscal Period ended June 30, 20132013
(as of June 30, 2013)(as of December 31,2013)
50,00050,00039Invincible

Investment
Corporation(Notes to Statement of Income)※1.
Rental revenues and property related expenses are as follows:(Unit：thousands of yen)
Fiscal Period ended June 30, 2013
(January 1, 2013 to June 30, 2013)

Fiscal Period ended December 31, 2013
(July 1, 2013 to December 31, 2013)

Rent/common area charges

2,537,676

2,542,588

Other revenues

222,500

197,861

Total

2,760,177

2,740,449

Maintenance costs

441,633

435,966

Taxes and public dues

162,456

175,993

Insurance expenses

5,160

5,085

Other expenses

142,512116,754

Depreciation expenses

543,640

527,420

Total

1,295,403

1,261,221

C. Operating income from rental revenues A-B)

1,464,773

1,479,227

A .Rental revenues

B. Property-related expenses※2.

Profit from finance related cost adjustment

With respect to the exit fees which were to be paid pursuant to the Shinsei Trust Loan A and the Shinsei Trust Loan B, 1,337,460
thousand yen was recognized as an accrued expense in a prior period on the basis that it would be paid on the maturity date of theborrowings. However, as a result of the prepayment of such borrowings during the fiscal period ended December 31, 2013, such exit
fees were refunded, which was recognized as profit from finance related cost adjustment.
(Notes to Statement of Unitholders’ Equity)
Number of investment units authorized and number of investment units issued and outstanding
Fiscal Period ended June 30, 2013
(January 1, 2013 to June 30, 2013)

Fiscal Period ended December 31, 2013
(July 1, 2013 to December 31, 2013)

Number of investment units authorized

10,000,000 units

10,000,000 units

Number of investment units issued and outstanding

1,348,292 units

1,573,179 units

40

Invincible(Notes Related to Tax Accounting)1.

Significant components of deferred tax assets and liabilities

Deferred tax assets - current assets
Enterprise tax payable
Rental receivables(merger)
Allowance for doubtful accounts
Accrued expenses
Subtotal
Valuation allowance
Total
Net deferred tax assets – current
Deferred tax assets – non-current assets
Buildings and other(merger)
Land(merger)
Long-term accrued expenses
Net loss carried forward
Subtotal
Valuation allowance
Total
Net deferred tax assets – non-current
2.

Investment
Corporation

Fiscal Period ended June 30, 2013
(from January 1 to June 30, 2013)(Unit：thousands of yen)
Fiscal Period ended December 31, 2013
(from July 1 to December 31, 2013)

590
211
559
6,454
7,815
7,815

590
211
941
－
1,743
1,743

－

－

－

－

1,194,346
2,547,099
510,618
7,023,707
11,275,771
11,275,771

1,177,288
2,547,099－
7,401,300
11,125,688
11,125,688

－

－

－

－

Significant difference between statutory income tax rate and the effective tax rate
(Unit: %)Fiscal Period ended June 30, 2013 Fiscal Period ended December 31, 2013
(from January 1 to June 30, 2013) (from July 1 to December 31, 2013)

Statutory tax rate
Deductible cash distributions
Provision of reserve for reduction entry
Others
Effective tax rate

36.59
-31.40
-5.19
0.18
0.18

(Notes Related to Lease Contracts)
Operating lease transactions(as lessee)Remaining lease payments

Due within one year
Due after one year
Total

Fiscal Period ended June 30, 2013(as of June 30, 2013)
112,249
2,392,537
2,504,787

36.59－-36.590.17
0.17(Unit：thousands of yen)
Fiscal Period ended December 31, 2013(as of December 31, 2013)
112,249
2,336,413
2,448,662

Operating lease transactions (as lessor) Remaining lease payments(Unit：thousands of yen)

Due within one year
Due after one year
Total

Fiscal Period ended December 31,
Fiscal Period ended June 30, 20132013
(as of June 30, 2013)(as of December 31, 2013)
674,516
669,922
7,258,593
6,914,939
7,933,109

7,584,862

41

Invincible

Investment
Corporation(Notes Related to Financial Instruments)
1.

Status of Financial Instruments(1) Policy for Financial Instruments
The Investment Corporation principally conducts its operations through investments in real estate and other specified assets to seek to ensure stable
income in the medium to long term.
The policy for raising funds is principally through issuing new investment units or entering into debt.
Derivative transactions are to be entered into for the purpose of hedging against the rate of future interest rate increases, etc. and not for
speculation. There are currently no derivative transactions that have been entered into.
Surplus funds are managed carefully after carefully taking into account safety, liquidity, the interest rate environment and financing.
(2) Nature and extent of risks arising from financial instruments and risk management
The funds raised through borrowings are mainly used to acquire real estate properties or properties in trust (including related acquisition costs) andfor the repayment of existing debt. Liquidity risks relating to debt are managed by the finance department of the Asset Manager by preparing andupdating plans for funds, and monitoring the covenants set forth in loan agreements.
(3) Supplemental information regarding market value, etc. for financial instruments
The fair value of financial instruments is based on quoted market prices if available. When quoted market prices are not available, fair value isestimated using valuation techniques which contain various assumptions. If other valuation models or assumptions were used, the estimated value
may differ.
2.
Estimated Fair Value of Financial Instruments
Book value, fair value and the difference between values as of June 30, 2013 are as follows.
Book value
Fair value(1) Cash and deposits
1,427,483
1,427,483(2) Cash and deposits in trust
2,690,331
2,690,331
Total assets
4,117,815
4,117,815(3) Current portion of long-term debts
262,000
263,952(4) Long-term debts
22,629,500
22,932,788(5) Long-term debts in trust
20,960,000
21,117,642
Total liabilities
43,851,500
44,314,382
Book value, fair value and the difference between values as of December 31, 2013 are as follow.

(1) Cash and deposits(2) Cash and deposits in trust
Total assets(3) Current portion of long-term debts(4) Long-term debts(5) Current portion of long-term debts in trust(6) Long-term debts in trust
Total liabilities

Book value
1,457,257
2,729,902
4,187,160
203,520
20,146,480
105,833
20,854,166
41,310,000

Fair value
1,457,257
2,729,902
4,187,160
203,520
20,146,480
106,40921,127,212
41,583,622(Unit：thousands of yen)
Difference
―
―
―
1,952
303,288
157,642462,882(Unit：thousands of yen)
Difference
―
―
―
―
―
576
273,045
273,622(Note 1) Methods to calculate fair values of financial instruments(1) Cash and deposits (2) Cash and deposits in trust
Due to the short maturities, the book value of these instruments is deemed a reasonable approximation of the fair value, and therefore, the bookvalue is used as the fair value.
(3) Current portion of long-term debts (4) Long-term debts (5) Current portion of long-term debts in trust (6) Long-term debts in trust
The fair values of long-term debt with fixed interest rates are determined based on the present value of contractual cash flows
discounted at current market interest rates which would be applicable to new debt with the same amount. Long-term debt with floating interest rates
reflecting changes in market rates within a short term period are stated at their book value as their book value approximate their fair values.

42Invincible(Note 2)

Investment
Corporation

Financial instruments for which fair value is extremely difficult to value(Unit：thousands of yen)
Fiscal Period ended June 30, 2013
(from January 1 to June 30, 2013)

Fiscal Period ended December 31, 2013
(from July 1 to December 31, 2013)

Tenant leasehold and security deposits

183,579

183,579

Tenant leasehold and security deposits in trust

1,048,635

1,037,721

Tenant leasehold and security deposits and tenant leasehold and security deposits in trust have no observable market price, and it is impracticable toreasonably estimate their future cash flows because it because the repayment dates of those deposits and the timing of the lessee’s exit from theproperty are not certain. Thus, their fair value is not disclosed.
(Note 3)

Remaining schedule of monetary claims after the closing date of the fiscal period
As of June 30, 2013
(Unit：thousands of yen)
Due within one Due after one to Due after two to Due after three to Due after four to Due after fiveyear
two years
three years
four years
five years
years

Cash and deposits

1,427,483

―

―

―

―

―

Cash and deposits in trust

2,690,331

―

―

―

―

―

Total

4,117,815

―

―

―

―

―

As of December 31, 2013
(Unit：thousands of yen)
Due within one Due after one to Due after two to Due after three to Due after four to Due after fiveyear
two years
three years
four years
five years
years
Cash and deposits

1,457,257

―

―

―

―

―

Cash and deposits in trust

2,729,902

―

―

―

―

―

Total

4,187,160

―

―

―

―

―

(Note 4) Redemption schedule of long-term debts and other interest-bearing indebtedness after the closing date of the fiscal period
As of June 30, 2013
(Unit：thousands of yen)
Due within one Due after one to Due after two to Due after three to Due after four to Due after fiveyear
two years
three years
four years
five years
years
Current portion of long-term debts

262,000

―

―

―

―

―

Long-term debts―

22,629,500

―

―

―

―

Long-term debts in trust―

320,981

491,866

3,861,986

6,238,387

10,046,777

Total

262,000

22,950,481

491,866

3,861,986

6,238,387

10,046,777

As of December 31, 2013
(Unit：thousands of yen)
Due within one Due after one to Due after two to Due after three to Due after four to Due after fiveyear
two years
three years
four years
five years
years
Current portion of long-term debts

203,520

―

―

―

―

―

Long-term debts―

203,520

19,942,960

―

―

―

Current portion of long-term debts intrust

105,833

―

―

―

―

―

Long-term debts in trust―

450,442516,273

3,819,427

6,196,028

9,871,993

Total

309,353

653,962

20,459,233

3,819,427

6,196,028

9,871,993

43

Invincible

Investment
Corporation(Notes Related to Rental Properties)
The Investment Corporation owns residential and other properties principally in the Tokyo area and major regional cities for the purpose of earning
stable rental revenues. The book value, amount changed during the period and balance at the end of the period are as follows.
(Unit：thousands of yen)

Balance at the beginning of the period
Residential

Book value Change during the period
Balance at the end of the period
Fair value at the end of the period
Balance at the beginning of the period

OfficeBook value Change during the period
Balance at the end of the period
Fair value at the end of the period
Balance at the beginning of the period

RetailBook value Change during the period
Balance at the end of the period
Fair value at the end of the period
Balance at the beginning of the period

ParkingBook value Change during the period
Balance at the end of the period
Fair value at the end of the period
Balance at the beginning of the period

Seniors

Book value Change during the period
Balance at the end of the period
Fair value at the end of the period
Balance at the beginning of the period

Total

Book Value Change during the period
Balance at the end of the period
Fair value at the end of the period(Note 1)
(Note 2)
(Note 3)Fiscal Period ended June 30, 2013
(from January 1 to June 30, 2013)

Fiscal Period ended December 31,
2013(from July 1 to December 31, 2013)

56,845,746

56,520,161(325,585)(327,357)

56,520,161

56,192,804

56,993,000

57,921,000

8,557,382

8,567,749

10,367

17,8898,567,749

8,585,639

7,151,000

7,175,000

5,397,628

5,352,806(44,821)(34,149)

5,352,806

5,318,657

5,360,000

5,420,000

100,865

100,851

(13)

(13)

100,851

100,838

92,30092,8004,441,219

4,412,629(28,590)(27,106)

4,412,629

4,385,522

4,751,000

4,821,000

75,342,842

74,954,199(388,642)(370,738 )

74,954,199

74,583,461

74,347,300

75,429,800

Book value is the figure calculated by decreasing the amount of depreciation from acquisition price (including acquisition-related costs).
The major factor of the increase for the fiscal period ended June 30, 2013 was capital expenditures related to construction work, and the major factor of the decrease
was depreciation. The major factor of the increase for the fiscal period ended December 31, 2013 was capital expenditures related to construction work, and the
major factor of the decrease was depreciation.
The fair value as of the end of the reporting period is determined based on the appraisal value provided by Asset Research and Development Inc., Japan Real Estate
Institute, Morii Appraisal & Investment Consulting Inc. and Tanizawa Sogo Appraisal Co., Ltd.

For information related to profits and losses from rental properties, please refer to “Notes to Statement of Income"44

Invincible

Investment
Corporation(Notes Related to Related Party Transactions)
1.

Transactions with Parent Company and Major Unitholders

Fiscal Period ended June 30, 2013 (from January 1 to June 30, 2013)

Classification Name

Address

Interested
Party of the
Asset
Manager

Chuo-ku,Tokyo

Shinsei
Trust andBankingCo., Ltd.

Transaction
EndingStatedamount% of voting Relationshipbalance
capitalType ofType of(thousands Accountrights(thousands ofCommonBusiness(millions of business
transactionof yen)ownedyenboard relationyen)(Note 1)
(Note１)
member ship
Repayment
Repayment of
56,0009,604,000
of longlong-term debts
term debts
Long-term
52,925prepaid
expenses
Prepaid90,270expensesFinancial
Finance
5,000――
Lender
44,764
Businessrelated fees
Long-term
1,395,513
accruedexpenses
Accrued17,640expenses
Interest
expenses(Note 1)
(Note 2)
(Note 3)(Note 4)

418,332

Accruedexpenses

140,614

Consumption taxes are not included in transaction amounts, but are included in the balance at the end of the period.
For borrowing conditions, see “I. Asset Management Report - Overview of Liabilities and Expenses - 2. Borrowing Conditions".
The financing includes transactions for which Calliope, which became the parent company of the Asset Manager on July 29, 2011, had a portion of the economic benefit.
Calliope holds 609,942 units (holding ratio: 45.23%) of the issued investment units of the Company.

Fiscal Period ended December 31, 2013 (from July 1, 2013 to December 31, 2013)

Classification Name

Interested
business of
the Asset
ManagerStatedcapital Type ofLocation(millions businessof yen)

Shinsei
Trust and Chuo-ku,
5,000Banking Tokyo
Co., Ld.

% ofvotingrightsFinancial―business

RelationshipCommon Businessboard
relationshipmember―LenderType oftransaction

Repaymentof long-term 9,604,000
debts

Financerelated fees
(Note 6)

Interest
expenses
Rayo
Godo
KaishaMinato0.1
ku, Tokyo

Investment
manageme 9.53
nt business―Transaction
amount(thousands of Accountyen)(Note 1)

143,196

282,863

Affiliate of Subscription
1,999,999
the parent
capitalcompany of increase

Endingbalance(thousands ofyen)(Note 1)

Repayment－of longterm debts
Long-term－
prepaid
expenses
Prepaid
expenses－Long-term－
accruedexpenses
Accruedexpenses－

Accruedexpenses－－－(Note 1) Consumption taxes are not included in transaction amounts, but are included in the balance at the end of the period.
(Note 2) For borrowing conditions, see “I. Asset Management Report - Overview of Liabilities and Expenses - 2. Borrowing Conditions".
(Note 3) The financing includes transactions for which Calliope, which became the parent company of the Asset Manager on July 29, 2011, had a portion of the economic benefit.
(Note 4) Accrued expenses and long-term accrued expenses decreased due to redemption before maturity date and this transaction is not included above.
(Note 5) Calliope holds 609,942 units (holding ratio: 45.23%) of the issued investment units of the Company.
(Note 6) Rayo Godo Kaisha and the Asset Manager have no capital relationship to be disclosed. Rayo Godo Kaisha has received an anonymous partnership investment throughfunds that are managed by FIG, an affiliate of Calliope.

45

Invincible

Investment
Corporation(Notes Related to Per Unit Information)
Fiscal Period ended June 30, 2013
(from January 1 to June 30, 2013)

Fiscal Period ended December 31, 2013
(from July 1 to December 31, 2013)

Net assets per unit

24,363 yen

22,785 yen

Net income per unit

249 yen

259 yen

Net income per unit is calculated by dividing Net income per unit is calculated by dividing
net income for the period by the daily weighted net income for the period by the daily weighted
average number of investment units issued and average number of investment units issued andoutstanding. Diluted net income is not stated as outstanding. Diluted net income is not stated as
there are no diluted units.
there are no diluted units.
(Note) The basis for calculating net income per unit is as follows.

Net income for the fiscal period (thousands of yen)

Fiscal Period ended June 30, 2013
(January 1 to June 30, 2013)

Fiscal Period ended December 31, 2013
(July 1 to December 31, 2013)

335,078

352,755

Net income not attributable to common unit holders―(thousands of yen)
Net income attributable to common unit holders(thousands of yen)

Average number of investment units during theperiod (unit)

Fiscal Period ended June 30, 2013
(from January 1 to June 30, 2013)――

335,078

352,755

1,348,292

1,362,959

Fiscal Period ended December 31, 2013
(from July 1 to December 31, 2013)―46

Invincible

Investment
Corporation

VI. Statement of Cash Distribution

Fiscal Period ended June 30, 2013
(from January 1, 2013 to June 30, 2013)

Fiscal Period ended December 31, 2013
(from July 1, 2013 to December 31, 2013)

Ⅰ Unappropriated retained earnings

449,196,371 yen

446,003,163 yen

Ⅱ Distribution Amount

355,949,088 yen

372,843,423 yen(Distribution per Unit)(264 yen)(237 yen)

Ⅲ Retained earnings carried forward

93,247,283 yen

73,159,740 yen

Calculation method of distribution amount In accordance with the distribution policy set
forth in Article 17, Paragraph 1 of the Articles
of Incorporation of Investment Corporation,
the distribution amount shall be the amountwhich does not exceed the amount of profits
but exceeds 90% of the distributable profit as
defined in Article 67-15 of the Special
Taxation Measures Act. However, in the eventthat any tax losses arise, or if no profits havebeen recorded for tax purposes due to tax
losses carried forward, the distribution amount
may be as reasonably determined by
Investment Corporation. Pursuant to thispolicy, Investment Corporation determined the
distribution amount to be 355,949,088 yen,which is the sum of net income of 335,078,277
yen and reversal of surplus of 20,870,811 yen.
Investment Corporation did not distribute any
amounts in excess of profit, as set forth in
Article 17, Paragraph 4 of the Articles ofIncorporation.

In accordance with the distribution policy set
forth in Article 17, Paragraph 1 of the Articles
of Incorporation of Investment Corporation,
the distribution amount shall be the amountwhich does not exceed the amount of profits
but exceeds 90% of the distributable profit as
defined in Article 67-15 of the Special
Taxation Measures Act. However, in the eventthat any tax losses arise, or if no profits havebeen recorded for tax purposes due to tax
losses carried forward, the distribution amount
may be as reasonably determined by
Investment Corporation. Pursuant to thispolicy, Investment Corporation determinedthe distribution amount to be 372,843,423
yen, which is the sum of net income of352,755,880 yen and reversal of surplus of
20,870,811 yen. Investment Corporation did
not distribute any amounts in excess of profit,as set forth in Article 17, Paragraph 4 of the
Articles of Incorporation.

Note
Accompanying English financial information, comprising Balance Sheet, Statement of Income, Statement of Unitholders’ Equity, Notes to financial
statements and statement of Cash Distribution, have been translated from the Japanese financial statements of the Investment Corporation prepared inaccordance with the Act on Investment Trusts and Investment Corporations of Japan.
Under Article 130 of the Act on Investment Trusts and Investment Corporations of Japan, the Japanese financial statements for the six months ended
December 31, 2013 have been audited by Ernst & Young ShinNihon LLC, in accordance with auditing standards generally accepted in Japan. However,English translation of the Japanese language report of independent auditors is not attached herein since the accompanying English translation of Balance
Sheet, Statement of Income, Statements of Unitholders’ Equity, Notes to financial statements and Statement of Cash Distribution are unaudited.
Regarding the English audited financial statements, please refer to the “Audited Financial Statements” on the website of Invincible Investment
Corporation: http://www.invincible-inv.co.jp/eng/cms/doc.html

47

Invincible
VII. Statement of Cash Flow (Reference Information)
Fiscal Period ended June 30, 2013
(from January 1 to June 30, 2013)
Cash Flows from Operating Activities
Net income before taxes(Unit：thousands of yen)
Fiscal Period ended December 31, 2013
(from July 1 to December 31, 2013)

335,683

353,360

Depreciation expenses

543,717

527,451

Investment unit issuance expenses-

15,487

Finance related costs

96,816

579,038

Amortization of tenant leasehold and security deposits

(433)

(683)

Interest received

(383)

(400)

Profit from finance related cost adjustment-(354,737)Interest Said

800,615

672,128

Increase (decrease) in allowance for doubtful accounts

730

1,045

Decrease (increase) in accounts receivable

962

6,458

Decrease (increase) in deposit payments(57,701)

748,197

Decrease (increase) in consumption tax receivable

115,447(7,419)

Increase (decrease) in accrued consumption tax payable

24,902(24,902)

Increase (decrease) in accounts payable

17,493

24,617

Increase (decrease) in accrued liabilities(13,571)-

Increase (decrease) in accrued expenses

9,112(127,432)

Increase (decrease) in advances received(1,294)

8,411

Increase (decrease) in deposits received

3,333(3,553)

Others(2,456)

5,481

Subtotal

1,872,971

2,422,548

Proceeds of interest
Payment of interest

383(818,164)390(650,982)

Payment of corporate taxes, etc.

(581)

(606)

Cash Flows from Operating Activities

1,054,609

1,771,350

Cash Flows from Investing Activities
Payment for acquisition of tangible assets in trust(154,421)(158,960)

Payment of tenant leasehold and security deposits in trust(93,409)(49,761)

Proceeds of tenant leasehold and security deposits in trust

83,16239,531Others(3,298)(694)

Cash Flows from Investing Activities(167,967)(169,885)

Cash Flows from Financing Activities
Proceeds from long-term debt

Investment
Corporation-

20,350,000

Repayment of long-term debt

(131,000)(22,891,500)

Finance related costs(10,636)(1,618,501)

Payment of distributions(157,800)(355,323)

Proceeds from issuance of investment units-

2,999,992

Others(1,300)(16,787)

Cash Flows from Financing Activities(300,737)(1,532,119)

Increase (decrease) in cash and cash equivalents

585,905

69,344

Beginning balance of cash and cash equivalents

3,531,910

4,117,815

Closing balance of cash and cash equivalents※1 4,117,815※1 4,187,160

48

Invincible

Investment
Corporation

Notes Concerning Significant Accounting Policies
By Period
Item
Cash and cash equivalents as stated inStatement of Cash Flows

Fiscal Period ended June 30, 2013
(from January 1 to June 30, 2013)

Fiscal Period ended December 31, 2013
(from July 1 to December 31, 2013)

Cash and cash equivalents as stated in theStatement of Cash Flows consist of cash on
hand and cash in trust, floating deposits,
deposits in trust and short-term investmentsthat are very liquid and realizable with amaturity of three months or less whenpurchased and that are subject toinsignificant risks of changes in value.

Cash and cash equivalents as stated in theStatement of Cash Flows consist of cash on
hand and cash in trust, floating deposits,
deposits in trust and short-term investmentsthat are very liquid and realizable with amaturity of three months or less whenpurchased and that are subject toinsignificant risks of changes in value.

Notes Concerning Changes in Methods of Presentation
Fiscal Period ended June 30, 2013
(from January 1 to June 30, 2013)

Fiscal Period ended December 31, 2013
(from July 1 to December 31, 2013)“Public listing related costs”, which was included as an independent
item under “non-operating expenses” for the fiscal period ended
June 30, 2013, has been included in “miscellaneous losses “under“non-operating expenses” for the fiscal period ended December 31,
2013 due to the insignificant amount. The financial statements forthe first period ended June 30, 2013 have been restated to reflect
this change in method of presentation.

-

As a result, the amount of 1,300 yen which was presented as“public listing related costs” under “non-operating expenses”
has been restated to be included in “miscellaneous” in thestatement of income.

Notes to Statement of Cash Flow
※１．Relationship between cash and cash equivalents in statement of cash flows and amounts in accompanying balance sheet(unit：thousands of yen)
Fiscal Period ended June 30, 2013
(from January 1 to June 30, 2013)

Fiscal Period ended December 31, 2013
(from July 1 to December 31, 2013)

Cash and deposits

1,427,483

1,457,257

Cash and deposits in trust

2,690,331

2,729,902

Cash and cash equivalents

4,117,815

4,187,160

By Period
Item49

Invincible

Investment
Corporation

TSE Code: 8963

http://www.invincible-inv.co.jp/

For Unitholders
Investors’ Registry
Administrator

Sumitomo Mitsui Trust Bank, Limited
4-1, Marunouchi 1-chome, Chiyoda-ku, Tokyo

Special Account<Unitholders of the former Tokyo Growth REIT Fund>Management Institution

Mitsubishi UFJ Trust and Banking Corporation Limited
4-5, Marunouchi 1-chome, Chiyoda-ku, Tokyo<Unitholders of the forme LCP Investment Corporation>
Sumitomo Mitsui Trust Bank, Limited
4-1, Marunouchi 1-chome Chiyoda-ku, Tokyo
Transfer Agent Department, Sumitomo Mitsui Trust Bank, Limited
8-4, Izumi 2-chome, Suginami-ku, Tokyo, 168-0063
Toll-free Telephone Number 0120-782-031
Administrative services are available at the main and branch offices throughout
Japan of Sumitomo Mitsui Trust Bank, Limited

Correspondence(Telephone Assistance)

50